EXHIBIT 10.1

 

EXECUTION COPY

 

 

 

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ASSET PURCHASE AGREEMENT

 

BY AND BETWEEN

 

FON ACQUISITION, LLC

 

AND

 

FONCENTRAL.COM, INC.

 

 

May 26, 2005

 

 

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EXHIBITS

 

Exhibit A

  

Form  of Bill of Sale

Exhibit B

  

Form  of Intellectual Property Assignment Documents

Exhibit C

  

Form  of Opinion of Seller’s Legal Counsel

 

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of this 26th
day of May, 2005 by and between FON Acquisition, LLC, a Delaware limited
liability company (“Buyer”), FONcentral.com, Inc., a New York corporation
(“Seller”). For purposes of this Agreement, Buyer and Seller are sometimes each
referred to individually as a “Party” or collectively as the “Parties.” Both of
the stockholders of Seller, Mr. Chris Cicero and Mr. Sam Lamba, (collectively
the “Principals”) are each executing this Agreement in their individual capacity
for the sole purpose of agreeing to be bound by the terms and conditions of
Section 5.4, 5.11(b), Section 5.14 and Section 5.15. InPhonic, Inc., a Delaware
corporation and parent company to Buyer (“InPhonic”) is executing this Agreement
for the sole purpose of making certain representations and warranties set forth
in Article IV.

 

RECITALS

 

WHEREAS, Seller engages in the business of selling, activating and distributing
wireless devices, accessories and services primarily through the Internet
(together with all other business which is being conducted by Seller as of the
date hereof, the “Business”); and

 

WHEREAS, subject to the terms and conditions set forth herein, Seller desires to
sell, convey, transfer, assign and deliver to Buyer, and Buyer desires to
purchase, acquire and accept from Seller, free and clear of all liens, charges
and encumbrances of any kind, all of Seller’s right, title, and interest in and
to the Acquired Assets (collectively, the “Acquisition”).

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, agreements and covenants herein contained, and for other good and
other valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the Parties, the Principals (as to Section 5.4, Section
5.11(b), Section 5.14 and Section 5.15 only) and InPhonic (as to certain
Sections of Article IV only) intending to be legally bound, hereby agree as
follows.

 

AGREEMENT

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

Capitalized terms undefined in the text of this Agreement shall have the
following meanings:

 

“Accounts Receivable” means (i) all trade accounts receivable and other rights
to payment from customers of Seller and the full benefit of all security for
such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of

 

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goods shipped or products sold or services rendered to customers of Seller, and
(ii) any claim, privilege, cause of action, remedy or other right related to any
of the foregoing.

 

“Acquired Assets” has the meaning set forth in Section 2.1.

 

“Acquisition” has the meaning set forth in the Recitals.

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly, through one or more intermediaries, Controls, is Controlled by or
is under common Control with, such Person. For purposes of this definition,
“Control” (including, with correlative meanings, the terms “Controlled by” and
“under common Control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock, as trustee or executor, by
written or oral contracts, commitments, understandings or other agreements or
credit arrangement or otherwise.

 

“Agreement” has the meaning set forth in the first paragraph.

 

“Ancillary Agreements”means all assignment agreements, and other documents and
instruments, pursuant to which Seller’s right, title or interest in any of the
Acquired Assets are transferred to Buyer.

 

“Back-Office Technology” all of the assets transferred from Airware, Inc. to
Seller pursuant to the Technology Agreement and Bill of Sale, which are defined
as Seller’s Technology therein.

 

“Business” has the meaning set forth in the Recitals.

 

“Business Affiliate(s)” has the meaning set forth in Section 3.21.

 

“Buyer” has the meaning set forth in the first paragraph of this Agreement.

 

“Buyer Charter” means the Certificate of Formation of Buyer.

 

“Buyer Disclosure Schedules” has the meaning set forth in the first paragraph of
Article IV.

 

“Buyer Indemnified Persons” has the meaning set forth in Section 7.1(a).

 

“Bylaws” means a true and complete copy of Seller’s bylaws, as amended and in
effect on the date hereof.

 

“Cash Consideration” has the meaning set forth in Section 2.5(a).

 

“Charter” means a true and complete copy of Seller’s certificate of
incorporation, as amended and in effect on the date hereof.

 

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“Closing” has the meaning set forth in Section 6.1.

 

“Closing Date” has the meaning set forth in Section 6.1.

 

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the applicable rules and regulations promulgated thereunder.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contract” has the meaning set forth in Section 2.1.

 

“Damages” means any and all losses, costs, damages, liabilities, liens,
interest, awards, judgments, penalties, fees and expenses arising from claims,
bankruptcy proceedings, demands, investigations, actions, causes of action,
including, without limitation, all appeals and extensions thereof and the
related reasonable legal fees.

 

“Disclosing Party” has the meaning set forth in Section 8.1.

 

“Distribution Date” means May 26, 2006.

 

“Employee Benefit Plan” means any “employee pension benefit plan” (as defined in
Section 3(2) of ERISA, any “employee welfare benefit plan” (as defined in
Section 3(1) of ERISA), and any other written or oral plan, agreement or
arrangement involving direct or indirect compensation, including, without
limitation, insurance coverage, severance benefits, disability benefits,
deferred compensation, bonuses, stock options, stock purchase, phantom stock,
stock appreciation or other forms of incentive compensation or post-retirement
compensation.

 

“Encumbrance” means any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, Security Interest, guaranty, mortgage,
right of way, easement, encroachment, servitude, right of first option, right of
first refusal or similar restriction, including any restriction on use, voting
(in the case of any security or equity interest), transfer, receipt of income,
or exercise of any other attribute of ownership.

 

“Environmental Law” means any applicable federal, state, county, provincial,
local or foreign statute, law, ordinance, regulation, rule or code in effect as
of the Closing Date relating to pollution, the protection of the environment or
the health and safety of employees.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
and successor statute thereto and the rules and regulations promulgated
thereunder.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Assets” has the meaning set forth in Section 2.2.

 

“GAAP” means United States generally accepted accounting principles.

 

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“Governmental Entity” means any court, arbitrational tribunal, judicial body,
administrative agency or commission or other governmental or regulatory
authority, department, board, instrumentality or agency, in each case whether
federal, state, county, provincial, local or foreign.

 

“InPhonic Certificate of Incorporation” means InPhonic’s Eleventh Amended and
Restated Certificate of Incorporation.

 

“InPhonic Common Stock” means InPhonic’s common stock, par value $.01 per share.

 

“InPhonic Financial Statements” has the meaning set forth in Section 4.4.

 

“InPhonic SEC Documents” has the meaning set forth in Section 4.4(b).

 

“Intellectual Property” means all intellectual property that Seller owns or uses
including, but not limited to, any works of authorship, inventions (whether
patentable or not), invention disclosures, industrial models, industrial
designs, utility models and certificates of invention, designs (including
without limitation graphics, label and artistic designs), all United States and
foreign patents and patent applications (including provisional patent
applications) listed on the Disclosure Schedule, including all U.S., foreign and
PCT related applications continuations, continuations-in-part, divisionals,
RCES, CPAs, reexaminations, reissues and the like), trademarks, trade names,
service marks, copyrights, and any applications for such trademarks, trade
names, service marks and copyrights, and all patent rights listed on the
Disclosure Schedule, names, product designs, product packaging, business and
product names and logos together in all cases with related intangible value,
franchises, franchise rights, domain names, pricing and cost information,
business and marketing plans and proposals and other trade secrets, schematics,
technical information, technology, manufacturing and engineering information,
know-how, and computer software programs or applications, source codes, object
codes and tangible or intangible proprietary information or material.

 

“Intellectual Property Rights” has the meaning set forth in Section 3.10.

 

“Legal Opinion” has the meaning set forth in Section 5.10.

 

“Liability” means any liability or obligation of any kind, character or
description (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether disputed or
undisputed, whether liquidated or unliquidated, whether secured or unsecured,
whether joint or several, whether due or to become due, whether vested or
unvested, whether executory, determined, determinable or otherwise), and whether
or not such liability or obligation is required to be accrued on the financial
statements.

 

“Material Adverse Effect” means, with respect to any entity or group of
entities, any event, change, condition or effect related to the financial
condition, properties, assets (including both tangible and intangible assets),
liabilities, business, operations or results of operations of such entity or
group of entities which is material and adverse.

 

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“Ordinary Course of Business” means an action taken by Seller will be deemed to
have been taken in the “Ordinary Course of Business” only if that action:

 

(a) is consistent in nature, scope and magnitude with the past customs and
practices of Seller and is taken in the ordinary course of the normal day-to-day
operations of Seller;

 

(b) does not require authorization by the board of directors or stockholders of
Seller and does not require any other separate or special authorization of any
nature;

 

(c) is similar in nature, scope and magnitude to actions customarily taken,
without any separate or special authorization, in the ordinary course of the
normal day-to-day operations of other persons or entities that are in the same
line of business as Seller; and

 

(d) shall not have a Material Adverse Effect upon Seller, the Business or the
transactions contemplated by this Agreement.

 

“Owned Software” means Software as to which the source code is owned by Seller.

 

“Permits” means all material permits, licenses, registrations, certificates,
orders or approvals from any Governmental Entity (including, without limitation,
those issued or required under applicable export laws or regulations) affecting
the Acquired Assets and the transactions contemplated hereby.

 

“Permitted Activities” has the meaning set forth in Section 5.14(b).

 

“Person” means any individual, corporation, limited liability company,
partnership, association, trust, joint venture, unincorporated organization or
other legal entity.

 

“Purchase Price” has the meaning set forth in Section 2.5(a).

 

“Receiving Party” has the meaning set forth in Section 8.1.

 

“Representatives” means Buyer’s and Seller’s respective directors, officers,
employees, Affiliates, representatives or agents as so indicated.

 

“Requisite Stockholder Approval” means the adoption of this Agreement and the
approval of the Acquisition by Seller’s stockholders in the manner required by
Seller’s Charter and Bylaws and as required under applicable law.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Interest” means any mortgage, pledge, security interest, Encumbrance,
charge, or other lien (whether arising by contract or by operation of law),
other than (i) mechanic’s,

 

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materialmen’s, and similar liens or (ii) liens arising under worker’s
compensation, unemployment insurance, social security, retirement, and similar
legislation that secures the payment.

 

“Seller Auditor” has the meaning set forth in Section 2.7.

 

“Seller Disclosure Schedules” has the meaning set forth in the first paragraph
of Article III.

 

“Seller Financial Statements” has the meaning set forth in Section 3.5(a).

 

“Seller Indemnified Persons” has the meaning set forth in Section 7.2(a).

 

“Seller Information” has the meaning set forth in Section 5.15.

 

“Seller Obligations” has the meaning set forth in Section 2.4.

 

“Software” means all computer software programs, program specifications, charts,
procedures,, source codes (including annotations), object codes, input data,
diagnostic and other routines, data bases and report layouts and formats, record
file layouts, diagrams, functional specifications and narrative descriptions and
flow charts owned or licensed by Seller and employed in the Business.

 

“Stock Consideration” has the meaning set forth in Section 2.5(a).

 

“Subsidiary” means, with respect to any Person, corporation, limited liability
company, partnership or other legal entity of any kind of which such Person
(either alone or through or together with one or more of its other Subsidiaries)
owns, directly or indirectly, more than 50% of the stock or other equity
interests, the holders of which are (a) generally entitled to vote for the
election of the board of directors or other governing body of such legal entity
or (b) generally entitled to share in the profits or capital of such legal
entity.

 

“Taxes” shall mean all taxes, charges, fees, levies or other similar assessments
or liabilities, including without limitation income, gross receipts, capital
stock, franchise, ad valorem, value-added, excise, environmental, real property,
personal property, sales, use, transfer, withholding, social security,
employment, payroll, disability, unemployment and alternative or add-on minimum
taxes imposed by the United States or any state, local or foreign government, or
any agency thereof, or other political subdivision of the United States or any
such government, and any interest, fines, penalties, assessments or additions to
tax resulting from, attributable to or incurred in connection with any tax or
any contest or dispute thereof and any amounts of Taxes of another person that
Seller or any subsidiary is liable to pay by law or otherwise.

 

“Tax Returns” shall mean all reports, returns, declarations, statements or other
information supplied or required to be supplied to a taxing authority in
connection with Taxes including, without limitation, any schedules, attachments
or amendments thereto.

 

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“Technology Transfer Agreement and Bill of Sale” shall mean the Technology
Transfer Agreement and Bill of Sale by and among Seller and Airware, Inc. dated
of even date of this Agreement.

 

“Third Party Intellectual Property Rights” shall mean all United States and
foreign third-party patents, patent rights, patent applications, trademarks,
service marks, or copyrights, and all trade secrets, schematics, technology,
know-how, inventions, whether patentable or not, computer software programs or
applications and tangible or intangible proprietary information or material or
other intellectual property or proprietary rights owned by a third party,
excluding packaged, commercially available “off the shelf” licensed software
programs sold to the public, and used in the Business.

 

“Third Party Licenses” shall mean licenses, contracts, or other arrangements to
which Seller is a party that provide rights to Seller to use any Third Party
Intellectual Property Rights in the Business as it is currently conducted.

 

“Third Party Software” shall mean (i) Software which is licensed to Seller by
third parties, regardless of whether Seller has possession of or access to the
source code, (ii) Software purchased by or licensed to Seller solely for resale
or sublicense to its customers, (iii) Software in which Seller has any use,
possessor or proprietary rights other than as set forth in (i) and (ii) above,
provided, however, that Third Party Software shall not include packaged,
commercially available “off the shelf” licensed software programs sold to the
public and used in the Business.

 

“WARN Act” means the Workers Adjustment and Retaining Notification Act of 1988,
as amended.

 

“Year-End Financial Statements” has the meaning set forth in Section 4.4.

 

ARTICLE II

 

THE PURCHASE AND DELIVERY OF THE ACQUIRED ASSETS

 

2.1 The Purchase and Sale of Assets.

 

Subject to the terms and conditions of this Agreement, and in reliance upon the
representations, warranties, covenants and agreements of Seller contained
herein, at the Closing, Seller shall sell, convey, transfer, assign and deliver
to Buyer, and Buyer shall purchase, acquire and accept from Seller, free and
clear of all Liabilities and Encumbrances, the assets, properties, rights,
interests, claims of Seller, tangible and intangible, listed under (a) through
(l) below, as the same shall exist as of the Closing Date (collectively, the
“Acquired Assets”). The Acquired Assets shall include:

 

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(a) all tangible personal property set forth on Schedule 2.1(a);

 

(b) all supplies owned and used in connection with the Acquired Assets as set
forth in Schedule 2.1(b);

 

(c) all Permits relating to the acquisition or ownership of the Acquired Assets;

 

(d) all data, records, files, manuals, blueprints and other documentation
related to the Acquired Assets;

 

(e) all Intellectual Property owned or used by Seller and Third Party Licenses
presently held by Seller in connection with the Acquired Assets as set forth on
Schedule 2.1(e), including all value associated with the trademarks, service
marks, trade names, all URLs (whether owned, licensed or leased), including, but
not limited to, those listed in Schedule 2.1(e), object codes and source codes
(including all copies thereof and related documentation), the right to sue and
collect for past infringement of the Intellectual Property, the right to create
derivative works for any copyrighted works (including the right to exploit the
copyrighted works for subsidiary purposes and in different media and by future
methods of exploitation) and all causes of action related to the Intellectual
Property;

 

(f) all methods of delivery of services, trade secrets, disks, drawings and
specifications, market studies, consultants’ reports, prototypes, and all
similar property of any nature, tangible or intangible, owned by Seller and used
in connection with the Acquired Assets, including, but not limited to, any
files, notices or documents related to Better Business Bureau offices, Attorney
General’s or other state of federal agencies related to customer complaints;

 

(g) all intangible value incident to the Acquired Assets, including, but not
limited to, the value of the name(s) associated with the Acquired Assets and the
value of good customer relations;

 

(h) all rights to offset associated with the Acquired Assets other than those
associated with Excluded Assets and the Retained Liabilities;

 

(i) all other intangible assets (including all claims, contract rights and
warranty and product liability claims against third parties) relating to the
Acquired Assets;

 

(j) all insurance benefits, including rights and proceeds, arising from or
relating to the Acquired Assets prior to the Closing; and

 

(k) all rights, claims, credits, causes of action or rights of set-off of Seller
against third parties relating to the Acquired Assets, whether choate or
inchoate, known or unknown, contingent or non-contingent.

 

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This Agreement shall not constitute an agreement or attempted agreement to
transfer, sublease, sublicense or assign any privilege, right or interest in any
written or oral license, agreement, commitment, contract or understanding (a
“Contract”) or Permit or any claim, right or benefit arising thereunder or
resulting therefrom, if an attempted assignment thereof without the consent
required or necessary of a third party would constitute a breach or violation
thereof or affect adversely the rights of Seller or Buyer thereunder. If a
consent of a third party which is required in order to assign any interest is
not obtained prior to the Closing Date, or if an attempted assignment would be
ineffective or would adversely affect the ability of Seller to convey its
interest to Buyer, Seller shall cooperate with Buyer in any lawful arrangement
to provide that Buyer shall receive Seller’s entire interest in the benefits
under any such Contract or Permit, including, without limitation, enforcement
for the benefit of Buyer of any and all rights of Seller against any other party
thereto arising out of the breach or cancellation thereof by such party or
otherwise; provided, however, that nothing contained in this paragraph shall
affect the liability, if any, of Seller or recourse of Buyer at law or in equity
or as provided in this Agreement for failing to have disclosed the need for such
consent or approval.

 

Notwithstanding the foregoing, the transfer of the Acquired Assets pursuant to
this Agreement shall not include the assumption of any Liability or Encumbrance
in respect thereof.

 

2.2 Excluded Assets.

 

Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere
in this Agreement, the following assets of Seller are not part of the sale and
purchase contemplated hereunder, are excluded from the Acquired Assets, and
shall remain the property of Seller after the Closing (the “Excluded Assets”):

 

(a) all minute books, stock records, corporate seals, accounting and tax books,
ledgers and records and other financial records relating to Seller, its Business
and the Acquired Assets, provided,however, that Buyer shall have access to and
have the right to receive copies of such books and records as is reasonably
necessary after the Closing during regular business hours and upon reasonable
notice;

 

(b) the shares of capital stock of Seller held in treasury;

 

(c) the consideration paid and to be paid to Seller pursuant to this Agreement;

 

(d) originals of all personnel records and other records that Seller is required
by law to retain in its possession;

 

(e) all written or oral contracts, commitments, understandings or other
agreements of Seller;

 

(f) all prepaid expenses, deposits, claims for refunds of Seller, and as to
rights to offset, those rights of Seller associated with the Retained
Liabilities;

 

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(g) all insurance policies and insurance benefits relating to the Retained
Liabilities and other assets of Seller that are not Acquired Assets;

 

(h) all cash and cash equivalents on hand or in bank accounts and short-term
investments and Seller’s revenue through the Closing Date;

 

(i) all Accounts Receivable accrued prior to the Closing Date;

 

(j) all rights of Seller under this Agreement and the Ancillary Agreements;

 

(k) all Tax Returns and Tax records of Seller pertaining to the Excluded Assets
and the Retained Liabilities;

 

(l) all rights and interests under any of the Employee Benefit Plans;

 

(m) all claims for refunds of Taxes and other governmental charges of whatever
nature for periods prior to the Closing Date;

 

(n) all client, customer and supplier lists and order information, telephone
numbers and electronic mail addresses and any other information with respect to
past, present or prospective clients, customers and suppliers; and

 

(o) all rights and obligations for Seller’s inventory.

 

2.3 No Assumption of Liabilities.

 

Seller shall transfer the Acquired Assets to Buyer on the Closing Date free and
clear of all Liabilities and Encumbrances of any kind and (ii) Buyer shall not,
by virtue of its purchase of the Acquired Assets, assume or become responsible
for (A) any Seller Obligations or (B) Liabilities or Encumbrances of Seller or
any other person. Buyer does not assume and will not be bound by or be obligated
or responsible for, and shall have no liability for, any Retained Liabilities
(as defined in Section 2.4) of any kind, character or description, whether
accrued, absolute, contingent or otherwise, it being understood that Buyer is
expressly disclaiming any express or implied assumption of any Retained
Liabilities.

 

2.4 Retained Liabilities.

 

The Liabilities, Encumbrances and all other obligations, shall remain the sole
responsibility of and shall be retained, fully paid, fully performed and fully
discharged solely by Seller (“Seller Obligations”). “Retained Liabilities” shall
mean every Seller Obligation, including:

 

(a) any Seller Obligation arising out of or relating to inventory, products and
services of Seller to the extent manufactured, sold or performed prior to the
Closing Date;

 

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(b) any Seller Obligation under all written or oral contracts, commitments,
understandings or other agreements of Seller, including, without limitation, any
Seller Obligation arising out of or relating to Seller’s credit facilities or
any Security Interest related thereto and any leased real and personal property;

 

(c) any Seller Obligation for Taxes, including (i) any Taxes arising as a result
of Seller’s operation of its business or ownership of the Acquired Assets prior
to the Closing Date, (ii) any Taxes that will arise as a result of the sale of
the Acquired Assets pursuant to this Agreement that are attributed to Seller
(excluding Buyer’s obligation for half of the New York State sales tax and use
taxes as set forth in Section 5.7(c)) and (iii) any deferred Taxes of any
nature;

 

(d) any environmental, health and safety Liabilities arising out of or relating
to the operation of Seller’s Business or Seller’s leasing, ownership or
operation of real property;

 

(e) any Seller Obligation under any Employee Benefit Plan or relating to
payroll, vacation, sick leave, worker’s compensation, unemployment benefits,
pension benefits, employee stock option or profit-sharing plans, health care
plans or benefits, or any other employee plans or benefits of any kind for
Seller’s employees or former employees, or both;

 

(f) any Seller Obligation under any employment, severance, retention or
termination agreement with any current or former employee of Seller or any of
its Affiliates, including without limitation any liability under the WARN Act,
if any;

 

(g) any Seller Obligation arising out of or relating to any employee grievance
whether or not the affected employees are hired by Buyer;

 

(h) any Seller Obligation to any of Seller’s stockholders or Affiliates;

 

(i) any Seller Obligation to indemnify, reimburse or advance amounts to any
officer, director, employee or agent of Seller, or to any third party or
otherwise;

 

(j) any Seller Obligation to distribute to any of Seller’s stockholders or
otherwise apply all or any part of the consideration received hereunder,
including the repayment to Mr. Lamba of amounts owed under a promissory note ;

 

(k) any Seller Obligation arising out of any legal proceeding finally
adjudicated, pending, contemplated or threatened as of the Closing Date, whether
or not set forth in the Seller Disclosure Schedules;

 

(l) any Seller Obligation arising out of any legal proceeding commenced after
the Closing Date and arising out of, or relating to, any occurrence or event
happening prior to the Closing Date;

 

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(m) any Seller Obligation arising out of or resulting from Seller’s
non-compliance with any legal requirement or order of any Governmental Entity;

 

(n) any Seller Obligation that is a trade account payable;

 

(o) any Seller Obligation under this Agreement or any other document executed in
connection with the transactions contemplated hereby; and

 

(p) any Seller Obligation based upon Seller’s acts or omissions occurring after
the Closing Date.

 

2.5 Consideration.

 

(a) The consideration to be paid on the Closing Date by Buyer to Seller for the
Acquired Assets is: (i) Two Million Four Hundred Thirty-Eight Thousand Eight
Hundred Forty-Eight Dollars ($2,438,848.00) in cash (“Cash Consideration”), plus
(ii) 131,876 shares of InPhonic Common Stock having a value of One Million Seven
Hundred Fifty Thousand Dollars ($1,750,000.00) (“Stock Consideration”) (which
number of shares was obtained by dividing (a) $1,750,000.00 by (b) $13.27). The
Cash Consideration and the Stock Consideration shall be the total consideration
paid by Buyer to Seller for the Acquired Assets (the “Purchase Price”). The
Purchase Price is being paid for the transfer, sale, conveyance, assignment,
transfer and delivery to Buyer of the Acquired Assets, as provided herein, and
in reliance on the representations and warranties, covenants and other
agreements made by Seller in this Agreement.

 

(b) On the Closing Date, the cash portion of the Purchase Price reflected in
Section 2.5(a)(i) above will be delivered by Buyer to Seller by wire transfer to
Seller. The Stock Consideration portion of the Purchase Price reflected in
Section 2.5(a)(ii) will be delivered by Buyer to Seller on the Distribution
Date.

 

2.6 Change and Use of Name.

 

Concurrently with the Closing, Seller shall use its best efforts to promptly
take all actions reasonably necessary to enable Buyer to have a perpetual,
exclusive right, title, interest, ownership and use of the trademarks, service
marks and trade names as set forth in Section 2.1(e) and any derivative or
combination thereof that it may elect, and Seller shall make no further use of
any of such names. After the Closing Date, Seller may not use any such
trademark, service mark or trade name without the prior written consent of
Buyer.

 

2.7 Further Action.

 

At any time and from time to time after the Closing, at Buyer’s request and
without further consideration, Seller shall promptly execute and deliver such
instruments of sale, transfer,

 

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conveyance, assignment and confirmation, and take such action, and provide such
advice, as Buyer may request to more effectively transfer, convey and assign to
Buyer, and to confirm and perfect Buyer’s title to, all of the Acquired Assets,
to put Buyer in actual possession and operating control thereof and all rights
with respect thereto and to carry out the purpose and intent of this Agreement.
Seller agrees to cause Anchin, Bloch & Anchin (the “Seller Auditor”) to assist
and cooperate with Buyer (with Buyer paying the reasonable expenses and costs
associated with such assistance and cooperation, excluding payments required
under Section 5.11(b)), InPhonic and their independent auditor relating to
Seller Financial Statements or the Business and to provide InPhonic or Buyer
with any consents that may be necessary for InPhonic or Buyer to comply with the
Securities Act or the Exchange Act and the rules and regulations promulgated
thereunder.

 

2.8 Purchase Price Allocation.

 

Buyer shall prepare an allocation of the Purchase Price (and all other
capitalized costs) among the Acquired Assets in accordance with Code §1060 and
the Treasury regulations thereunder (and any similar provision of state, local
or foreign law, as appropriate). Buyer shall deliver such allocation to Seller
within 60 days after the Closing Date. Buyer and Seller (and their Affiliates)
shall report, act and file Tax Returns (including, but not limited to Internal
Revenue Service Form 8594) in all respects and for all purposes consistent with
such allocation prepared by Buyer. Seller shall timely and properly prepare
execute, file and deliver all such documents, forms and other information as
Buyer may request to prepare such allocation. Neither Buyer nor Seller shall
take any position (whether in audits, Tax Returns or otherwise), which is
inconsistent with such allocation unless required to do so by applicable law.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

As an inducement to Buyer to enter into this Agreement and to consummate the
Acquisition, Seller hereby represents and warrants to Buyer, as of the date
hereof, that, except as set forth in the Disclosure Schedules provided by Seller
(the “Seller Disclosure Schedules”) attached hereto and incorporated herein by
reference, the statements contained in this Article III are true and correct.

 

3.1 Organization, Qualification and Corporate Power.

 

Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. Seller is duly qualified to conduct
business and is in corporate good standing under the laws of each jurisdiction
in which the nature of its businesses or the ownership or leasing of its
properties requires such qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect on
Seller. Schedule 3.1 sets forth each jurisdiction in which Seller has qualified
to do business together with any state or other similar identification number.
Seller has the power and authority to carry on the Business and to own and use
the properties and assets owned and used by it. Seller has furnished or made

 

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available to Buyer the Bylaws and Charter. Seller is not in default under or in
violation of any provision of its Charter or Bylaws, each as amended to date and
through the Closing Date.

 

3.2 Authorization of Transaction.

 

Seller has the right, power and authority to execute and deliver this Agreement
(including the Ancillary Agreements and all other agreements referred to herein
or contemplated hereby), to fully perform its obligations hereunder and
consummate the transactions contemplated in this Agreement. The execution and
delivery of this Agreement and the performance by Seller of this Agreement and
the consummation by Seller of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part of Seller. No
other corporate proceedings by or on behalf of Seller will be necessary to
authorize this Agreement or to carry out of the transactions contemplated
hereby. Seller has obtained the Requisite Stockholder Approvals to authorize and
approve the Agreement, the Ancillary Agreements and the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by Seller, and assuming the due authorization, execution and delivery
by Buyer, constitutes a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of creditors’ rights
generally, and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefore may be brought.

 

3.3 Noncontravention.

 

Neither the execution, delivery or performance of this Agreement (including the
Ancillary Agreements and all other agreements referred to herein or contemplated
hereby) by Seller, nor the consummation by Seller of the transactions
contemplated hereby and thereby, including delivery of the Acquired Assets or
the assignments and assumptions referred to in Article II herein, will (a)
conflict with or violate any provision of the Charter or Bylaws; (b) require on
the part of Seller any filing with, or any Permit, authorization, consent or
approval of, any Person or Governmental Entity (except for recordation in the
case of Intellectual Property); (c) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a material
default under, result in the acceleration of, create in any Person the right to
accelerate, terminate, modify or cancel, or require notice, consent or waiver
under, any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of indebtedness,
Security Interest or other arrangement to which Seller is a party or by which
Seller or any of its assets or properties are bound or subject, including,
without limitation, the Acquired Assets; (d) cause Buyer to become subject to or
become liable for payment of any Tax, other than half of the NY sales tax; (e)
result in the imposition of any Encumbrance upon any of the Acquired Assets or
the Business; (f) violate any material order, writ, injunction, decree, statute,
law, ordinance, rule or regulation applicable to Seller or any of the Acquired
Assets; or (g) result in any of Seller’s stockholders having the right to
exercise dissenter’s rights of appraisal.

 

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3.4 Subsidiaries.

 

Seller does not have any direct or indirect Subsidiaries or any other equity
interest in any other firm, corporation, partnership, joint venture, association
or other business organization. There are no Liabilities or Encumbrances that
exist between Seller and any Affiliate that relate to the Acquired Assets.

 

3.5 Seller Financial Statements.

 

(a) Attached as Schedule 3.5(a) are the unaudited balance sheet and statements
of operations and changes in stockholders’ equity for the fiscal years ended
December 31, 2004 and 2003 and an unaudited balance sheet and statements of
operations and changes in stockholders equity for the one-month ended January
31, 2005. Such financial statements (collectively, the “Seller Financial
Statements”) have been prepared in accordance with GAAP, applied on a consistent
basis throughout the periods covered thereby, fairly and accurately present the
financial condition and results of operations of Seller as of the respective
dates thereof and for the periods referred to therein and are consistent with
the books and records of Seller; provided, however, that the Seller Financial
Statements for the one-month period ended January 31, 2005 are subject to normal
year-end audit adjustments.

 

(b) Seller has assets sufficient to discharge all of its debts and is capable of
timely discharge of its debts as they come due.

 

(c) The transactions contemplated hereby will not render Seller insolvent or
subject Seller to any voluntary or involuntary proceedings seeking liquidation,
reorganization or other relief under any bankruptcy or other similar law now or
hereafter in effect, or cause Seller to seek the appointment of a trustee,
receiver, liquidator or custodian of it or any part of its property.

 

(d) Attached under Schedule 3.5(d) are copies of all letters from Seller’s
auditors to Seller’s board of directors, executive officers or the audit
committee during the past 36 months, together with copies of all responses
thereto.

 

3.6 Undisclosed Liabilities.

 

Neither Seller nor any former Subsidiary has any Liability of any nature except
for (a) Liabilities accrued or reserved against on Seller Financial Statements,
(b) Liabilities which have arisen since December 31, 2004, in the Ordinary
Course of Business and which are similar in nature and amount to the Liabilities
which arose during the comparable period of time in the immediately preceding
fiscal period, (c) contractual or statutory Liabilities incurred in the Ordinary
Course of Business, and (d) Liabilities which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on Seller.

 

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3.7 Tax Matters.

 

(a) Seller has timely (taking into account extensions of time to file) filed all
Tax Returns that it was required to file with the appropriate Governmental
Entities in all jurisdictions in which such returns are required to be filed.
All such Tax Returns accurately and correctly reflect the Taxes of Seller for
the periods covered thereby and are complete in all material respects. All Taxes
owed by Seller, or for which Seller may be liable (whether or not shown on any
Tax Return), have been or will be timely paid. Seller is not currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where Seller does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the Acquired Assets or assets of
Seller that arose in connection with any failure (or alleged failure) to pay any
Tax.

 

(b) Seller has timely filed (taking into account extensions of time to file) all
Tax Returns and has withheld or collected and paid or deposited in accordance
with law all Taxes required to have been withheld or collected and paid or
deposited by Seller in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.

 

(c) Neither Seller nor any of Seller’s directors or officers (or employees
responsible for Tax matters) expects any Governmental Entity to assess any
additional Taxes on Seller for any period for which Tax Returns of Seller have
been filed, and there exists no basis for any such assessment. There is no
dispute or claim concerning any Liability relating to Taxes of Seller either (i)
claimed or raised by any Governmental Entity in writing or (ii) as to which
Seller or its directors or officers (and employees responsible for Tax matters)
has knowledge. Seller has delivered to Buyer correct and complete copies of
examination reports, and statements of deficiencies assessed against or agreed
to by Seller since inception of Seller. No examination or audit of any Tax
Return of Seller by any Governmental Entity is currently in progress or
threatened or, to Seller’s knowledge, contemplated.

 

(d) Seller has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time nor has any such waiver or extension been
required with respect to a Tax assessment or deficiency.

 

(e) The unpaid Taxes of Seller (i) did not, as of the date of the end of
Seller’s most recent fiscal year, exceed the reserve for Liabilities for Taxes
of Seller (without taking into account any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of Seller balance sheet set forth in the Seller Financial Statements
(rather than in any notes thereto) and (ii) do not exceed such reserve as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of Seller in filing their Tax Returns.

 

(f) No taxing authority has raised any issues with respect to Taxes that, by the
application of similar principles, might result in the issuance of a notice of
deficiency or similar

 

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notice of intention to assess Seller for Taxes by any taxing authority and
Seller does not have any reason to expect any such notices.

 

(g) Seller has not taken any action that would have the effect of deferring any
liability for Seller’s Taxes from any taxable period ending on or before the
Closing Date to any taxable period ending thereafter.

 

3.8 Assets.

 

Seller has good, valid and marketable title to the Acquired Assets. No Acquired
Asset is subject to any Liability or Encumbrance or restrictions on transfer of
any kind. The Acquired Assets are in good repair and operating condition for
their current use, ordinary wear and tear excepted. Upon consummation of the
transactions contemplated herein, Buyer will have acquired good, valid,
marketable and exclusive title in and to the Acquired Assets free and clear of
all Liabilities and Encumbrances, or third-party interest of any nature
whatsoever, other than those that may be created by Buyer.

 

3.9 Owned Real Property.

 

Seller does not own any real property.

 

3.10 Intellectual Property.

 

Schedule 3.10 lists a true and complete list of all Intellectual Property
presently owned and Third Party Licenses presently held by Seller or necessary
for the conduct of the Business (as conducted) (such Intellectual Property and
Third Party Licenses, collectively, the “Intellectual Property Rights”). Seller
owns, or has the sole and exclusive right to use, reproduce, prepare derivative
works based upon, distribute, perform, display, sell, offer to sell, license,
sublicense and otherwise exploit the Intellectual Property Rights other than
Third Party Intellectual Property Rights. The Intellectual Property Rights are
free and clear of all Encumbrances, except for those restrictions set forth in
Third Party Licenses, all of the Intellectual Property Rights. The Intellectual
Property Rights that are listed under Schedule 2.1(e) will be conveyed by Seller
to Buyer free and clear of all Encumbrances. There are no outstanding options,
licenses or agreements of any kind relating to the Intellectual Property Rights,
nor is Seller bound by or a party to any options, licenses or agreements of any
kind with respect to any of the Intellectual Property Rights or the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from the purchase of
commercially available “off the shelf” products sold to the public. Seller has
not violated, and to Seller’s knowledge, is not violating any Third Party
Intellectual Property Right. Seller is not aware of any misappropriation,
violation, or defect in, or in the title to, any of any Intellectual Property
Rights. No person or entity (including, without limitation, any (i) current or
former employee of Seller or (ii) prior employer of any current or former
employee of Seller) has or will have any right, title or interest in any
Intellectual Property. Seller does not use, nor does Seller believe it will be
necessary to

 

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use, any inventions of any of its employees (or people it currently intends to
hire) made prior to their employment by Seller. Any and all source codes or
object codes of Seller have been delivered to Buyer at the Closing and shall
thereafter be the only copy(ies) of the source code and/or object codes in
existence after the Closing Date and no other copies (archived, reverse
engineered or otherwise), derivatives or related source codes or object codes
shall exist. Neither Seller nor any third party shall have any right, title or
interest, whatsoever, to any Seller source code or object code of Seller after
the Closing Date. To the knowledge of Seller: (i) the warranties set forth in
the Technology Transfer Agreement and Bill of Sale by Airware to Seller are
true, accurate and complete and (ii) except for the source code that is to be
destroyed as provided in Section 5.4, there are no other source codes or object
codes in existence held by any other person or entity after the Closing Date
that relate to the Back-Office Technology and no other copies (archived, reverse
engineered or otherwise), derivatives or related source codes or object codes
exist.

 

3.11 Real Property Leases.

 

Schedule 3.11 lists all real property leased or subleased to Seller. Seller has
delivered to Buyer correct and complete copies of the leases and subleases. All
such leases and subleases are legal, valid, binding and enforceable and in full
force and effect with respect to Seller and the written arrangement is legal,
valid, binding and is enforceable and in full force and effect with respect to
each other party thereto. All leases and subleases will continue to be legal,
valid, binding and enforceable and in full force and effect immediately
following the Closing in accordance with the terms thereof as in effect prior to
the Closing and no consent of any party to the transactions contemplated thereby
is required to assign any lease or sublease to Buyer other than such consents
that shall be obtained on or before the Closing Date and which are as set forth
on Schedule 3.11. Seller is not in material breach or default (and does not
anticipate being in material breach or default after Closing) under any lease or
sublease, and no other party thereto is in material breach or default, and no
event has occurred which with notice or lapse of time would constitute a
material breach or default or permit termination, modification, or acceleration,
under the lease or sublease. Seller is not a party to any oral contract,
agreement, guaranty or other arrangement relating to real property.

 

3.12 Contracts.

 

Seller is not in breach or default (and does not anticipate being in material
breach or default after Closing) of any written or oral contracts, commitments,
understandings or other agreements as of the date hereof and Seller will not be
in breach or default of any written or oral contracts, commitments,
understandings or other agreements of Seller as a result of the transactions
contemplated by this Agreement.

 

3.13 Insurance.

 

Schedule 3.13 lists each insurance policy (including fire, theft, casualty,
general liability, director and officer, workers compensation, business
interruption, environmental, product liability

 

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and automobile insurance policies and bond and surety arrangements), insurance
carrier and amount of coverages per event and in the aggregate to which Seller
is a party, a named insured, or otherwise the beneficiary of coverage at any
time within the past year that relates to the Acquired Assets. Schedule 3.13
lists each person or entity required to be listed as an additional insured under
each such policy. Each such policy is in full force and effect and by its terms
and with the payment of the requisite premiums thereon will continue to be in
full force and effect through the Closing.

 

Seller is not in material breach or default, and does not anticipate being in
material breach or default after Closing (including with respect to the payment
of premiums or the giving of notices) under any such policy, and no event has
occurred which, with notice or the lapse of time, would constitute such a
material breach or default or permit termination, modification or acceleration,
under such policy and Seller has not received any notice from the insurer
disclaiming coverage or reserving rights with respect to a particular claim or
such policy in general. Seller has not incurred any loss, damage, expense or
liability covered by any such insurance policy for which it has not properly
asserted a claim under such policy that was in excess either individually or in
the aggregate of Ten Thousand Dollars ($10,000.00).

 

3.14 Litigation.

 

(a) There are no: (i) unsatisfied judgments, orders, decrees, stipulations or
injunctions or any other judicial or administrative mandates; (ii) claims,
complaints, actions, suits, investigations, hearings or other proceedings, or
(iii) claims, complaints, actions, suits, investigations, hearings or other
proceedings of any Governmental Entity or before any arbitrator; to which Seller
or any former Subsidiary of Seller, or any of their respective officers,
directors, employees or agents of Seller or any former Subsidiary (in such
person’s capacity as an officer, director, employee or agent of Seller and not
personally) is or was (for the three years prior to and including the date
hereof) a party or is threatened in writing to Seller to be made a party or
known to be contemplated.

 

(b) There are no agreements or other documents or instruments settling or
proposed to settle any claim, complaint, action, suit, investigation, hearing or
other proceeding against Seller or any former Subsidiary.

 

3.15 Employees.

 

Seller does not contribute to any Employee Benefit Plans. Seller is not a party
to or bound by any collective bargaining agreement, nor has it experienced any
material strikes, grievances, claims of unfair labor practices or other
collective bargaining disputes. Seller has no knowledge of any organizational
effort made or threatened, either currently or within the past two years, by or
on behalf of any labor union with respect to employees of Seller. Seller is in
compliance in all material respects with all currently applicable laws and
regulations respecting wages, hours, occupational safety, health and employment
practices, and discrimination in employment terms and conditions, and is not
engaged in any unfair labor practice except, in each

 

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case, where such practice or failure to comply would not reasonably be expected
to have a Material Adverse Effect on Seller. There are no pending claims against
Seller under any workers compensation plan or policy or for long term
disability. Premiums for COBRA coverage with respect to any former employees or
beneficiaries are paid by the former employees or beneficiaries. All employees
and consultants hired by Seller have been and are in full compliance with the
applicable United States immigration and naturalization laws, including, without
limitation, the Immigration and Nationality Act. Seller has all necessary and
required documentation (e.g. I-9s) for all employees and consultants. No legal
proceedings, hearing or investigations have been completed in the last five
years of any employees of Seller or are currently pending, or, to the knowledge
of Seller, are threatened by any Governmental Entity that in any way relate to
any United States immigration or other applicable law, rule or regulation. There
are no proceedings pending or threatened, between Seller and its employees,
which proceedings have or would reasonably be expected to have a Material
Adverse Effect on Seller. Seller has provided all employees, with all relocation
benefits, stock options, bonuses and incentives, and all other compensation that
such employee has earned up through the date of this Agreement or that such
employee was otherwise promised in their employment agreements with Seller.

 

3.16 Legal Compliance; Restrictions on Business Activities.

 

Seller and the conduct and operations of the Business are in compliance in all
material respects with each law (including rules, regulations and requirements
thereunder) of any Governmental Entity which (a) affects or relates to this
Agreement or the transactions contemplated hereby or (b) is applicable to Seller
or the Business, unless such non-compliance would not have a Material Adverse
Effect on Seller. There is no agreement, judgment, injunction, order or decree
binding upon Seller which has or would reasonably be expected to have the effect
of prohibiting or materially impairing the Business as currently conducted by
Seller.

 

3.17 Permits.

 

Schedule 3.17 of the Seller Disclosure Schedule sets forth a list of all Permits
issued to or held by Seller. Such listed Permits are the only Permits that are
required for Seller to conduct its Business as presently conducted, except for
those the absence of which would not have a Material Adverse Effect on Seller.
No Permit has been revoked or otherwise lost by Seller that was maintained by
Seller and is necessary to conduct the Business. Each such Permit is in full
force and effect and no suspension or cancellation of such Permit is threatened
and there is no basis for Seller to believe that such Permit will not be
renewable upon expiration. Except as set forth in Schedule 3.17, each such
Permit will continue in full force and effect following the Closing.

 

3.18 Brokers’ Fees.

 

Seller has no liability or obligation to pay any fees or commissions to any
broker, investment banking firm, finder, agent or other intermediary with
respect to the transactions contemplated by this Agreement.

 

 

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3.19 Accounts Receivable.

 

All of the Accounts Receivable were derived from goods delivered or services
rendered to non-Affiliated third parties, and constitute only bona fide valid
claims against debtors for sales and other charges. None of Seller’s Accounts
Receivable is subject to discount except for normal cash and immaterial trade
discounts and is collectible in the Ordinary Course of Business subject to
ordinary reserves. Seller has not received and does not expect to receive any
written notice from or on behalf of any account debtor asserting any defense to
payment or right of setoff with respect to any of Seller’s Accounts Receivable.
The value at which reserves are carried reflect the reserve valuation policy of
Seller, which is consistent with its past practice and in accordance with GAAP
applied on a consistent basis.

 

3.20 Software.

 

Schedule 3.20 sets forth an accurate, correct and complete list and summary
description of (a) all material Software and identifies specifically Third Party
Software, (b) any other material Software employed in the Business which is not
Owned Software or Third Party Software, other than so called “shrink wrap”
Software which is not a component of the Software licensed or sold to Seller
customers, (c) in each case whether the particular component of Software is
employed in the Software licensed or sold by Seller to its customers and (d) all
Software development projects undertaken within the past two years with persons
other than employees, together with an identification of the persons undertaking
such projects.

 

3.21 Customers, Suppliers and Advertisers.

 

Schedule 3.21 attached hereto sets forth Seller’s Business Affiliates, suppliers
and advertisers. Except as set forth on Schedule 3.21, there are no material
outstanding disputes with any Business Affiliate, supplier or advertiser of the
Business, and no Business Affiliate, supplier or advertiser has given notice
that it will not do business with (or that it will materially reduce its
business with) Seller in the future, or with Buyer following the consummation of
the transactions contemplated hereby. For purposes of this Section 3.21,
“Business Affiliate(s)” shall mean those entities which are authorized by Seller
to use its website to refer customers who may be interested in purchasing
wireless products and services of Seller for which Seller will pay commission.
As of the Closing Date, the marketing agreements with those entities on Schedule
3.21 are assignable without consent of any Person, except as noted on Schedule
3.21. As of the Closing Date, Seller will assign its rights under such
agreements to Buyer.

 

3.22 Environmental Matters.

 

Except for any matter that would not reasonably be expected to have a Material
Adverse Effect: (a) no written notice, notification, demand, request for
information, citation, summons, complaint or order has been received by, and no
legal proceeding or action is pending or, to the knowledge of Seller, threatened
against Seller, in each case which is unresolved, with respect to

 

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any matters arising out of any Environmental Law and relate to Seller, the
assets, properties or Business; and (b) Seller is in compliance with all
Environmental Laws, and possesses and is in compliance with all material
permits, authorizations and licenses required for its current operations under
applicable Environmental Laws.

 

3.23 Returns.

 

Except as set forth on Schedule 3.23, Seller has not had any of its products
related to the Business returned by a purchaser or user thereof, other than for
minor, nonrecurring warranty problems or any other return that is not material,
and except as set forth on Schedule 3.23, Seller has no knowledge of any pending
material warranty claims for such products, any right to return such products in
material quantities or other material Liability relating to returns.

 

3.24 Product Warranty.

 

Except as set forth on Schedule 3.24, each product sold, leased or delivered by
Seller was at the time of sale, lease or delivery by Seller in material
conformity with all applicable contractual commitments and all express and
implied warranties, Seller does not have any liability as of the date hereof for
replacement or repair thereof or other damages in connection therewith, and no
product sold, leased or delivered by Seller is subject to any guaranty, warranty
or other indemnity beyond the applicable standard terms and conditions of sale.

 

3.25 Product Liability.

 

Except as set forth on Schedule 3.25, Seller does not have any material
liability as of the date hereof arising out of any injury to individuals or
property as a result of the ownership, possession or use of any product
manufactured, sold, leased or delivered by Seller.

 

3.26 Customer Coupon Liability.

 

Except as set forth on Schedule 3.26, Seller has no material obligations or
Liabilities with respect to any coupon or other rebate program.

 

3.27 Related Party Transactions.

 

Except as set forth on Schedule 3.27, no Affiliate of Seller has, or since
December 31, 2003 has had, any written or oral contracts, commitments,
understandings, other agreements, business arrangement or business relationship
with the Business, and no Affiliate of Seller owns, or since December 31, 2003
has owned, any material asset or property used in the Business, including,
without limitation, any customer, supplier, competitor or potential competitor
or lessor.

 

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3.28 Restrictions on Business Activities.

 

There is no agreement, judgment, injunction, order or decree binding upon Seller
or its properties or assets (including, without limitation, its Intellectual
Property) which has or would reasonably be expected to have the effect of
prohibiting or materially impairing any acquisition of property or assets by
Seller or the conduct of the Business, including any exclusive distribution or
licensing agreements.

 

3.29 Investment Intent.

 

Seller understands and acknowledges and agrees and represents that: (a) it is an
“accredited investor” as defined under Regulation D of the Securities Act; (b)
Seller must bear the economic risk of its receipt of the Stock Consideration;
(c) Seller will be acquiring the Stock Consideration, for Seller’s own account
for investment only, and not with a view towards their distribution; (d) the
shares of Stock Consideration are restricted shares, have not been registered
under the Securities Act or any state securities laws and are being offered and
sold in reliance upon exemptions provided in the Securities Act and state
securities laws for transactions not involving a public offering and, therefore,
cannot be resold or transferred unless they are subsequently registered under
the Securities Act and applicable state laws or unless an exemption from such
registration is available; (e) Seller is fully aware and assumes the risk that
the Stock Consideration being delivered to Seller is priced based upon a fixed
value formula set forth in Section 2.6 and, consequently, the number of shares
of InPhonic Common Stock that Seller will receive is numerically fixed as of the
Closing Date and, as a result, the value of the Stock Consideration may increase
or decrease as the market price increases or decreases and Seller is fully aware
that these changes in market price may either increase or decrease the value of
the InPhonic Common Stock and the overall value of the Acquisition; (f) Seller
fully understands and is aware that there is no assurance of any return on the
Stock Consideration; (g) Seller has made its own investment decision about the
Stock Consideration; (h) Seller is not relying upon any non public information,
including any information relating to valuation or projections, provided by
InPhonic or Buyer or otherwise in making its decision to enter into this
Agreement and receive the Stock Consideration; (i) Seller acknowledges and is
aware that actual results may vary from those anticipated or implied in any
forecast or projection and there is no assurance of actual results; (j) Seller
has been advised and is aware of the provisions of Rule 144 promulgated under
the Securities Act as in effect from time to time, which permits limited resale
of restricted securities purchased in a private offering subject to the
satisfaction of certain conditions, including, among other things, the
availability of certain current public information about InPhonic, the resale
occurring following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations under Rule 144; (k) Seller also understands that there is no
assurance that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow Seller to
transfer all or any portion of the Stock Consideration, under the circumstances,
in the amounts or at the times Seller might propose; and (l) the certificate(s)
representing the Stock Consideration shall bear a legend in substantially the
following form:

 

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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

Such shares shall also be subject to a “stop order” with InPhonic’s stock
registrar and transfer agent.

 

Notwithstanding the foregoing, Seller shall not sell, transfer or otherwise
distribute the Stock Consideration, except pursuant to an exemption under the
Securities Act with an opinion of counsel reasonably satisfactory to InPhonic
and its legal counsel. Seller does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or pledge to such person or
anyone else any of the Stock Consideration, and Seller does not have any present
plans to enter into any such contract, undertaking, agreement or arrangement.
Seller has had an opportunity to discuss Buyer’s and InPhonic’s business,
management and financial affairs with directors, officers and management of
Buyer and InPhonic and has had the opportunity to review their operations and
facilities. Seller has also had the opportunity to ask questions of and receive
answers from, InPhonic and its management regarding the Stock Consideration.

 

3.30 Disclosure.

 

Seller recognizes that Buyer is basing its decision to consummate the
acquisition of the Acquired Assets in reliance upon Seller’s representations and
warranties, Seller Financial Statements, covenants and information in Seller’s
Disclosure Schedule. No representation or warranty by Seller contained in this
Agreement or any other document, certificate or other instrument delivered to or
to be delivered by or on behalf of Seller pursuant to this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary, in light of the circumstances under which it was made, in order to
make the statements herein not misleading.

 

ARTICLE iV

 

REPRESENTATIONS AND WARRANTIES OF BUYER and InPhonic

 

As an inducement to Seller to enter into this Agreement and to consummate this
transaction, Buyer and InPhonic severally hereby represent and warrant (to the
extent such representation and warranty applies to each herein) to Seller that,
as of the date hereof, that except as set forth in the Disclosure Schedule of
Buyer (the “Buyer Disclosure Schedule”) attached hereto and incorporated herein
by reference, the statements contained in this Article IV are true and correct.

 

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4.1 Organization, Qualification and Corporate Power.

 

Each of Buyer and InPhonic is a company duly organized, validly existing and in
corporate good standing under the laws of the State of Delaware. Buyer and
InPhonic are each duly qualified to conduct business and are in corporate good
standing under the laws of each jurisdiction in which the nature of their
businesses or the ownership or leasing of their respective properties requires
such qualification, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect on Buyer or InPhonic. Buyer
and InPhonic have the corporate power and authority to carry on the businesses
in which it is engaged and to own and use the properties owned and used by it.

 

4.2 Authorization of Transaction.

 

Each of Buyer and InPhonic has the corporate power and authority to execute and
deliver this Agreement (including the Ancillary Agreements and all other
agreements referred to herein or contemplated hereby) and to fully perform their
respective obligations as set forth hereunder and to consummate the transactions
contemplated in this Agreement. The execution and delivery of this Agreement and
the performance by Buyer and InPhonic of this Agreement and the consummation by
Buyer of the transactions contemplated hereby (as they apply to each of Buyer
and InPhonic) have been duly and validly authorized by all necessary corporate
action on the part of Buyer and InPhonic. This Agreement has been duly and
validly executed and delivered by Buyer and InPhonic and, assuming the due
authorization, execution and delivery by Seller, constitutes a valid and binding
obligation of Buyer and InPhonic, enforceable against Buyer and InPhonic in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting the enforcement of creditors’ rights generally, and except that
the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefore may
be brought.

 

4.3 Subsidiaries.

 

Except as set forth in Schedule 4.3, neither Buyer nor InPhonic owns or controls
any equity security or other interest of any other corporation, limited
partnership or other business entity. Neither of Buyer or InPhonic is a
participant in any joint venture, partnership or similar arrangement.

 

4.4 InPhonic Financial Statements.

 

(a) InPhonic has provided to Seller (i) the audited balance sheet and statements
of operations, changes in stockholders’ equity and cash flows for the fiscal
year ended December 31, 2004, 2003, and 2002 (the “Year-End Financial
Statements” or “InPhonic Financial Statements”). Such financial statements have
been prepared in accordance with GAAP, applied on a consistent basis throughout
the periods covered thereby, fairly and accurately present the

 

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financial condition, results of operations and cash flows of InPhonic as of the
respective dates thereof and for the periods referred to therein and are
consistent with the books and records of InPhonic.

 

(b) InPhonic has, upon request, previously made available to Seller (or Seller
has obtained copies as filed on the SEC website) an accurate and complete copy
of each final registration statement, prospectus, report, schedule and
definitive proxy statement, if any, filed since December 31, 2004 by InPhonic
with the SEC pursuant to the Securities Act or the Exchange Act (the “InPhonic
SEC Documents”) and no such registration statement, prospectus, report,
schedule, proxy statement, if any, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, except that information as of a later
date (regardless whether required to be filed on the SEC website) shall be
deemed to modify information as of an earlier date. InPhonic has timely filed
all InPhonic SEC Documents and other documents required to be filed by it under
the Securities Act and the Exchange Act, and, as of their respective dates, all
InPhonic SEC Documents complied in all material respects with the published
rules and regulations of the SEC with respect thereto, including the provisions
of the Sarbanes-Oxley Act of 2002 to the extent applicable to such InPhonic SEC
Documents.

 

4.5 Liabilities.

 

InPhonic has no material liabilities and, to the best of InPhonic’s knowledge,
knows of no material contingent liabilities not disclosed in the InPhonic
Financial Statements, except current liabilities incurred in the ordinary course
subsequent to December 31, 2004 which have not been, either in any individual
case or in the aggregate, materially adverse.

 

4.6 Absence of Certain Changes.

 

Since December 31, 2004, InPhonic has conducted its business in the ordinary
course consistent with past practice (except as set forth on Schedule 4.6) and
there has not occurred any change, event or condition (whether or not covered by
insurance) that has resulted in, or might reasonably be expected to result in,
any Material Adverse Effect on InPhonic.

 

4.7 Title to Properties and Assets; Liens, Etc.

 

Except as set forth in Schedule 4.7, Buyer and InPhonic each have good and
marketable title to their respective properties and assets, including, as it
relates to InPhonic, the properties and assets reflected in the most recent
balance sheet included in the InPhonic Financial Statements, and good title to
their respective leasehold estates, in each case subject to no mortgage, pledge,
lien, lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent, (b) liens and encumbrances which do not
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detract from the value of the property subject thereto or materially impair the
operations of either Buyer or InPhonic, and (c) those that have otherwise arisen
in the ordinary course. All facilities, machinery, equipment, fixtures, vehicles
and other properties owned, leased or used by Buyer and InPhonic in their
respective businesses are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. Each
of Buyer and InPhonic are in compliance with all material terms of each lease to
which each is a party or is otherwise bound.

 

4.8 Litigation.

 

Except as set forth in Schedule 4.8, there are no outstanding orders, judgments,
writs, injunctions or decrees of any court, Government Authority or arbitration
or mediation panel or tribunal against or involving Buyer or InPhonic likely to
have a Material Adverse Effect on either Buyer or InPhonic.

 

4.9 Compliance with Other Instruments.

 

Buyer is not in violation or default of any term of the Buyer Charter and
InPhonic is not in violation of the InPhonic Certificate of Incorporation.
Neither Buyer nor InPhonic is in violation of any material term of any mortgage,
indenture, contract, agreement, instrument or contract to which each is party or
by which each are bound or of any judgment, decree, order, or writ. The
execution, delivery, and performance of and compliance with this Agreement, and
the issuance and sale of the Stock Consideration will not, with or without the
passage of time or giving of notice, result in any such material violation, or
be in conflict with or constitute a default under any such material term, or
result in the creation of any mortgage, pledge, lien, encumbrance or charge upon
any of the properties or assets of either Buyer or InPhonic or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to Buyer or InPhonic, or their respective
businesses or operations or any of their respective assets or properties.

 

4.10 Compliance with Law.

 

No governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations, or declarations are required to be
filed in connection with the execution and delivery of this Agreement and the
issuance of the Stock Consideration by Buyer or InPhonic, except such as has
been duly and validly obtained or filed, or with respect to any filings that
must be made after the Closing as will be filed in a timely manner. Buyer and
InPhonic each have all franchises, permits, licenses and other similar authority
necessary for the conduct of their respective businesses as now being conducted,
the lack of which could have a Material Adverse Effect on their respective
businesses, properties, prospects or financial conditions. If necessary, Buyer
and InPhonic believe each can obtain, without undue burden or expense, any
similar authority for the conduct of their business as planned to be conducted.

 

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4.11 Full Disclosure.

 

Buyer and InPhonic have each provided Seller with all information requested by
Seller in connection with its decision to enter into the transactions
contemplated by this Agreement. To Buyer’s and InPhonic’s knowledge, there are
no facts which (individually or in the aggregate) will have a Material Adverse
Effect that have not been set forth in the Agreement, the Exhibits hereto, the
Ancillary Agreements, the InPhonic SEC Documents, the Buyer Disclosure Schedules
or in other documents delivered to Seller or their attorney or agents in
connection herewith.

 

4.12 Shares and Corporate Documents.

 

The shares of Stock Consideration to be issued hereunder have been duly
authorized and when issued will be valid and legally issued, fully paid and
nonassessable, free and clear of Encumbrances, and not in violation of any
preemptive or similar rights or any applicable securities laws. Prior to the
date hereof, InPhonic has delivered to Seller a true, correct, and complete copy
of the InPhonic Certificate of Incorporation and Buyer has delivered to Seller
the Buyer Charter.

 

4.13 Disclosure.

 

Buyer recognizes that Seller is basing its decision to consummate the
acquisition of the Acquired Assets in reliance upon Buyer’s representations and
warranties, Buyer Financial Statements, covenants and information in Buyer’s
Disclosure Schedule. No representation or warranty by Buyer contained in this
Agreement or any other document, certificate or other instrument delivered to or
to be delivered by or on behalf of Buyer pursuant to this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary, in light of the circumstances under which it was made, in order to
make the statements herein not misleading.

 

ARTICLE V

 

COVENANTS

 

5.1 Best Efforts.

 

Each Party shall use its best efforts to take all actions and to do all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.

 

5.2 Notices and Consents.

 

Each of Buyer and Seller shall use its respective best efforts to obtain, at its
respective expense, all such waivers, permits, consents, approvals or other
authorizations from third parties and Governmental Entities, and to effect all
such registrations, filings and notices with or to third

 

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parties and Governmental Entities, as may be reasonably required by or with
respect to Buyer or Seller, respectively, in connection with the transactions
contemplated by this Agreement.

 

5.3 Notice of Breaches.

 

Seller shall promptly deliver to Buyer written notice of any event or
development of which Seller is aware and that would (a) render any statement,
representation or warranty of Seller in this Agreement (including the Seller
Disclosure Schedules) inaccurate or incomplete in any material respect, or (b)
constitute or result in a breach by Seller of, or a failure by Seller to comply
with, any agreement or covenant in this Agreement applicable to such party.
Buyer shall promptly deliver to Seller written notice of any event or
development of which Buyer is aware and that would (i) render any statement,
representation or warranty of Buyer in this Agreement inaccurate or incomplete
in any material respect, or (ii) constitute or result in a breach by Buyer of,
or a failure by Buyer to comply with, any agreement or covenant in this
Agreement applicable to such party. No such disclosure shall be deemed to avoid
or cure any such misrepresentation or breach.

 

5.4 Back-Office Technology.

 

To Seller’s and the Principals’ knowledge, as of the Closing all copies and
physical embodiments of the Back-Office Technology, including all source codes,
object codes, copies, derivatives or otherwise, will have been completely
destroyed, rendering such copies and physical embodiments of the Back-Office
Technology inoperable and unusable by any person after the Closing Date. After
the Closing, neither Seller nor the Principals shall attempt to operate,
license, reverse engineer, transfer, recover or otherwise make use of the
Back-Office Technology or any derivatives thereof.

 

5.5 Public Announcements.

 

Except as provided in Section 8.1 (second paragraph), neither Seller nor any
agent or Affiliate of Seller shall make any public statements, including,
without limitation, any press releases or other public disclosure, with respect
to this Agreement and the transactions contemplated hereby without the prior
written consent of Buyer, which shall not be unreasonably withheld or delayed.

 

5.6 Transition of Assets and Liabilities.

 

Seller agrees to provide reasonable assistance to Buyer, at Buyer’s expense
(except if such assistance is necessary because of Seller’s failure to perform
hereunder) in the transition of the Acquired Assets to Buyer pursuant to the
terms and conditions of this Agreement.

 

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5.7 Payment of all Taxes and Other Retained Liabilities.

 

(a) Each Party shall pay in a timely manner all Taxes, fees and charges imposed
upon it that arise from or are incurred by reason of, resulting from or payable
in connection with the sale of the Acquired Assets pursuant to this Agreement.

 

(b) Seller shall pay, or make adequate provision for the payment, in full of all
of its Retained Liabilities that have accrued or are payable as of the Closing
Date.

 

(c) Any and all New York State sales and use taxes relating to or arising from
the Acquisition and the transactions contemplated hereby shall be shared equally
by Seller and Buyer in the amount set forth on Schedule 5.7(c).

 

5.8 Seller Employees.

 

Nothing herein shall be construed or interpreted to impose on Buyer any
obligation for the hiring of or the continuation of employment of any employee
of Seller for any period of time following the Closing.

 

5.9 Employee Benefits.

 

(a) Schedule 5.9 lists each Employee Benefit Plan that Seller or any of its
Subsidiaries maintains, to which Seller or any of its Subsidiaries contributes
or has any obligation to contribute, or with respect to which Seller or any of
its Subsidiaries has any liability or potential liability.

 

(i) Each such Employee Benefit Plan (and each related trust, insurance contract,
or fund) has been maintained, funded and administered in accordance with the
terms of such Employee Benefit Plan and the terms of any applicable collective
bargaining agreement and complies in form and in operation in all respects with
the applicable requirements of ERISA, the Code, and other applicable laws.

 

(ii) All required reports and descriptions (including Form 5500 annual reports,
summary annual reports, and summary plan descriptions) have been timely filed
and/or distributed in accordance with the applicable requirements of ERISA and
the Code with respect to each such Employee Benefit Plan. The requirements of
COBRA have been met with respect to each such Employee Benefit Plan and each
Employee Benefit Plan maintained by an ERISA Affiliate which is an Employee
Welfare Benefit Plan subject to COBRA.

 

(iii) All contributions (including all employer contributions and employee
salary reduction contributions) that are due have been made within the time
periods prescribed by ERISA and the Code to each such Employee Benefit Plan that
is an Employee Pension Benefit Plan and all contributions for any period ending
on or before the Closing Date which are not yet due have been made to each such
Employee Pension Benefit Plan or accrued in accordance with the past custom and
practice of Seller and its Subsidiaries. All premiums or other

 

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payments for all periods ending on or before the Closing Date have been paid
with respect to each such Employee Benefit Plan that is an Employee Welfare
Benefit Plan.

 

(iv) Each such Employee Benefit Plan which is intended to meet the requirements
of a “qualified plan” under Code §401(a) has received a determination from the
Internal Revenue Service that such Employee Benefit Plan is so qualified, and
nothing has occurred since the date of such determination that could adversely
affect the qualified status of any such Employee Benefit Plan. All such Employee
Benefit Plans have been or will be timely amended for the requirements of the
Tax legislation commonly known as “GUST” and “EGTRRA” and have been or will be
submitted to the Internal Revenue Service for a favorable determination letter
on the GUST requirements within the remedial amendment period prescribed by
GUST.

 

(v) There have been no Prohibited Transactions (as defined under ERISA) with
respect to any such Employee Benefit Plan or any Employee Benefit Plan
maintained by an ERISA Affiliate. No Fiduciary (as defined under ERISA) has any
Liability for breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any such
Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation
with respect to the administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is pending or, to
the knowledge of any Seller or any director or officer (or employee with
responsibility for employee benefits matters) of Seller or Subsidiaries,
threatened. No Principal and no director or officer (or employee with
responsibility for employee benefits matters) of Seller or any Subsidiary has
any knowledge of any basis for any such action, suit, proceeding, hearing, or
investigation.

 

(vi) Seller has delivered to Buyer correct and complete copies of the plan
documents and summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent annual report (Form
5500, with all applicable attachments), and all related trust agreements,
insurance contracts, and other funding arrangements which implement each such
Employee Benefit Plan.

 

(b) Neither Seller, nor any of its Subsidiaries, nor any ERISA Affiliate
contributes to, has any obligation to contribute to, or has any liability under
or with respect to any Employee Pension Benefit Plan that is a “defined benefit
plan” (as defined in ERISA §(3(5)). No asset of Seller or any of its
Subsidiaries is subject to any Encumbrance under ERISA or the Code.

 

5.10 Restrictions on Seller Dissolution and Distribution.

 

Seller shall not dissolve or make any sale, distribution or transfer of the
Stock Consideration received pursuant to this Agreement, until Seller’s payment
of all Retained Liabilities or otherwise, unless Seller first obtains a legal
opinion from a nationally recognized and accredited law firm (the “Legal
Opinion”) opining, that such sale, distribution or transfer (i) is legal and
valid and made pursuant to an exemption under the Securities Act, and (ii) is in
compliance with applicable state securities laws; provided however, Seller may
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or otherwise transfer such stock, if Buyer and its legal counsel have first
accepted the Legal Opinion.

 

5.11 Post-Closing Operations.

 

(a) Seller agrees to continue to continue to fully perform and provide all such
services required under its written or oral contracts, commitments,
understandings or other agreements after the Closing Date. Seller shall also
make full and timely payment of all Retained Liabilities.

 

(b) If an audit is conducted for Seller’s 2005 fiscal year, Seller shall make
payment when due of the amount of Fifteen Thousand Dollars ($15,000.00) to the
Seller Auditor, as payment for costs, fees and expenses that Seller’s Auditor
will incur to complete the audit of Seller’s Financial Statements for the year
ended December 31, 2004. If an audit is conducted for Seller’s 2005 fiscal year
as may be required by either Buyer’s or InPhonic’s internal accounting
departments and/or their independent auditor, then Mr. Chris Cicero and Mr. Sam
Lamba agree that each will sign the Seller Auditor representation letter
prepared with respect to the audit of the Seller Financial Statements for the
period ended December 31, 2004 and will cooperate with the Seller Auditor in the
preparation of such audit. Failure of Mr. Cicero and Mr. Lamba to sign the
representation letter referenced in the preceding sentence shall be a material
breach of this Agreement.

 

5.12 Payment of Buyer Fees and Expenses Relating to Bankruptcy.

 

In the event that either Seller or any of its Affiliates or Subsidiaries either
voluntarily or involuntarily enters into bankruptcy proceedings at any time and
the Acquired Assets or other transactions contemplated by this Agreement become
the subject of such bankruptcy proceeding and Buyer is required to file any
petition or otherwise appear to defend this Agreement and the transactions
contemplated hereby, then Seller shall pay when due any and all Damages,
including, withdrawal limits, legal fees, relating to Buyer’s defense of this
Agreement or the transactions contemplated hereby in such bankruptcy proceeding,
including all applicable appeals.

 

5.13 Corporate Name.

 

As soon as practicable, and in any event not more than 30 days following the
Closing, Seller shall take all actions necessary to change its name to a name
that does not contain the words “FONcentral,” “FONcentral.com,” or “FON” and is
not similar to or subject to confusion with its present name.

 

5.14 Noncompetition.

 

(a) Except as contemplated in Section 2.6, during the period commencing on the
Closing Date and ending on the third anniversary thereof, neither Seller nor
either of the Principals shall, directly or indirectly through any Subsidiary,
Affiliate, successor entity,

 

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partnership, joint venture or agent, for their own account or as an owner,
stockholder (other than through the ownership of 5% or less of any class of
securities registered under the Exchange Act), operator, manager, advisor or
consultant of or to any Person: (i) participating or engaging in, or otherwise
lending assistance (financial or otherwise) to any Person participating or
engaged in the Business in any jurisdiction in which the Business was conducted
on the Closing Date or otherwise offer, market, sell, activate or distribute
wireless and/or satellite products, services or accessories over the Internet;
or (ii) employing, engaging or seeking to employ or engage any individual who at
or prior to the Closing had been an employee of Seller, unless such employee is
terminated by Buyer after the Closing Date or (iii) directly or indirectly act
or fail to act in any way that results in a breach of the provisions of Section
5.4 or Section 5.15 or Section 5.18 of this Agreement. Commencing on the Closing
Date and ending on the first anniversary thereof, neither Seller nor either of
the Principals shall, directly or indirectly through any Subsidiary, Affiliate,
successor entity, partnership, joint venture or agent, for their own account or
as an owner, stockholder (other than through the ownership of 5% or less of any
class of securities registered under the Exchange Act), operator, manager,
advisor or consultant of or to any Person, participate or engage in, or
otherwise lend assistance (financial or otherwise) to any Person participating
or engaged in offering, marketing, selling, activating or distributing any
products, services or accessories over the Internet.

 

(b) Buyer agrees and acknowledges that notwithstanding the provisions of Section
5.13(a), Mr. Sam Lamba has and shall be permitted to continue to have an
ownership or other financial interest in the company set forth on Schedule 5.14
(b) that offers, markets, sells, activates and/or distributes prepaid wireless
phone cards over the Internet (“Permitted Activities”) and that his interest in
such company shall not be covered by or otherwise limited by the non-compete
provisions of this Agreement, provided such company’s business does not exceed
the Permitted Activities or conflict with the provisions of Section 5.14(a).

 

(c) Buyer, Seller and the Principals recognize that the laws and public policies
of various jurisdictions may differ as to the validity and enforceability of
covenants similar to those set forth in this Section 5.14. It is the intention
of Buyer, Seller and the Principals that the provisions of this Section 5.14 be
enforced to the fullest extent permissible under the laws and policies of each
jurisdiction in which enforcement may be sought, and that the unenforceability
of any provisions of this Section 5.14 shall not render unenforceable, or
impair, the remainder of the provisions of this Section 5.14. Accordingly, if at
the time of enforcement of any provision of this Section 5.14 a court of
competent jurisdiction holds that the restrictions stated herein are
unreasonable under circumstances then existing, Buyer, Seller and the Principals
agree that the maximum period, scope or geographic area reasonable under such
circumstances will be substituted for the stated period, scope or geographical
area and that such court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and geographical area permitted by
applicable law. Any breach of this Section 5.14 by Seller and/or the Principals
shall be considered Damages to Buyer under this Agreement and subject to an
indemnification claim against Seller as provided in Section 7.1, in addition,
Buyer may seek any and all other remedies available to it under law or in equity
against Seller or either of the Principals to enforce the provisions of this
Section 5.14, including, without limitation seeking injunctive relief.

 

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5.15 Use of Customer and Supplier Information.

 

After the Closing, Seller and the Principals agree that neither will disclose,
share or otherwise use any of Seller’s client, customer and supplier lists and
order information, telephone numbers, electronic mail addresses and the other
information with respect to past, present or prospective clients, customers and
suppliers or contemplated in the future (“Seller Information”). The Seller and
the Principals have not disclosed the Seller Information to any third party, and
from and after the Closing, Seller and the Principals will not disclose the
Seller Information to any third party. Any disclosure of the Seller Information
shall be deemed to be a material breach of this Section 5.15 and the covenant
not to compete set forth in Section 5.14 of this Agreement.

 

5.16 Seller Customer Rebates.

 

Seller shall fully and timely pay all rebates owed to any consumer in accordance
with Seller’s rebate program policy (as in effect at the time of such rebate
submission by the consumer) and satisfy all obligations with respect to the
Carrier as they come due in the Ordinary Course of Business. After the Closing
Date, Seller shall permit Buyer and Buyer’s Representatives to have access, upon
reasonable notice, to the Seller financial and accounting records, contracts,
other records and documents pertaining to the payment of rebates to consumers
and the satisfaction of Seller’s obligations with respect to the Carriers as
provided in the preceding sentence, subject to compliance with applicable
confidentiality obligations of Buyer.

 

5.17 Right to Collect Accounts Receivable.

 

Buyer hereby agrees to license to Seller the right to use the “FONcentral.com”
letterhead and any related trade name, service mark or logo on the letterhead or
other pre-printed correspondence for the sole and express purpose of collection
of Seller’s trade Accounts Receivable (as of the Closing Date) that are Excluded
Assets.

 

5.18 Seller Contracts.

 

All written or oral contracts, commitments, understandings or other agreements
of Seller will be fully performed as of the Closing Date or as commercially
practicable thereafter and shall be terminated by Seller at no cost or expense
to Buyer. None of Seller’s written or oral contracts, commitments,
understandings or other agreements may be assigned to any Person after the
Closing Date.

 

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ARTICLE VI

 

THE CLOSING

 

6.1 Time and Place.

 

The consummation of the transactions contemplated hereby (the “Closing”) shall
take place simultaneously with the execution and delivery of this Agreement at
the offices Patton Boggs LLP, 2550 M Street, NW, Washington, D.C. 20037. The
date on which the Closing takes place is referred to herein as the “Closing
Date.”

 

6.2 Closing Deliveries of Seller.

 

At the Closing, Seller shall deliver to Buyer the following:

 

(a) an executed Bill of Sale substantially in substantially the form attached
hereto as Exhibit A;

 

(b) executed the instruments of sale, conveyance, assignment and transfer
(including, without limitation, Intellectual Property transfer documents), in
form and substance satisfactory to Buyer, as Buyer shall reasonably request, to
convey, transfer and assign to, and vest in, Buyer good, record and marketable
title to the Acquired Assets, free and clear of all Liabilities and
Encumbrances, in substantially the forms attached hereto as Exhibit B;

 

(c) an executed legal opinion of Seller’s legal counsel, that contains the
opinions as set forth in the form attached hereto as Exhibit C;

 

(d) copies of any contracts, files, data and documents pertaining to the
Acquired Assets;

 

(e) all of the waivers, permits, consents, approvals or other authorizations,
and effected all of the registrations, filings and notices, referred to in
Section 5.2;

 

(f) all UCC filings to terminate all financing statements relating to the
Acquired Assets;

 

(g) true and complete copies of all national, provincial, municipal and local
income, franchise, property and other Tax Returns filed by Seller with respect
to the Acquired Assets, which includes the Tax Return for the 2003 fiscal year;

 

(h) a duly executed certificate of the corporate secretary of Seller, certifying
(i) that the Charter as in effect on the date hereof remains in full force and
effect and has not been amended or superseded, (ii) that the Bylaws as in effect
on the date hereof remain in full force and effect and have not been amended or
superseded, (iii) that the resolutions of the Board of Directors of Seller
authorizing this Agreement and the transactions contemplated hereby are in

 

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force and effect and have not been amended, (iv) to the evidence of and the
receipt of the Requisite Stockholder Approval, and (v) to the incumbency of the
officers of Seller executing this Agreement or any Ancillary Documents;

 

(i) copies of such other instruments of sale, transfer, conveyance, and
assignment as Buyer and its counsel reasonably may request to convey good and
marketable title to the Acquired Assets to Buyer free and clear of any
Liability, Encumbrance or other right, except as expressly set forth in this
Agreement;

 

(n) executed Technology Transfer Agreement and Bill of Sale agreement among
Seller and Airware and the delivery of the only copy of the Source Code and
Object Codes (including all derivatives);

 

(o) evidence, reasonably satisfactory to Buyer, that all copies and physical
embodiments of the Back Office Technology has been completely destroyed,
rendering such copies and physical embodiments of the Back-Office Technology
inoperable and unusable by any person after the Closing Date; and

 

(p) copies of such other instruments of assumption as Buyer and its legal
counsel reasonably may request.

 

6.3 Closing Deliveries of Buyer.

 

At the Closing, Buyer shall deliver to Seller the following:

(a) the Cash Consideration portion of the Purchase Price to Seller
($2,438,848.00) (expressly not including Stock Consideration to be delivered in
accordance with Section 2.5);

 

(b) a duly executed certificate of the corporate secretary of Buyer, certifying
(i) that the Buyer Certificate of Formation as in effect on the date hereof
remains in full force and effect and has not been amended or superseded, (ii)
that the resolutions of the sole Member of Buyer authorizing this Agreement and
the transactions contemplated hereby are in force and effect and have not been
amended, and (iii) to the incumbency of the authorized representatives of Buyer
executing this Agreement or any Ancillary Documents; and

 

(c) copies of such other instruments of assumption as Seller and its counsel
reasonably may request.

 

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ARTICLE VII

INDEMNIFICATION

 

7.1 Indemnification by Seller.

 

(a) Seller shall indemnify, defend, save and keep Buyer, its successors and
assigns and its stockholders, directors, officers, Affiliates, representatives
and employees (“Buyer Indemnified Persons”), forever harmless against and from
all Damages sustained or incurred by any of the foregoing Buyer Indemnified
Persons as a result of or arising out of or by virtue of (i) any incorrect
representation or warranty made by Seller herein, Ancillary Agreements, the
Seller Disclosure Schedules or in any certificate, exhibit or schedule delivered
to Buyer in connection herewith, (ii) any breach of any covenant or obligation
to be performed hereunder by Seller; (iii) any lien, charge, Liability,
Encumbrance or Seller Obligation; (iv) any third party claim arising that
involve the Acquired Assets, the Technology Transfer Agreement and Bill of Sale
and the transactions contemplated by this Agreement; (v) any court,
administrative or bankruptcy proceeding involving Seller or otherwise relating
to this Agreement; or (vi) fraud or willful misconduct of the Seller and its
directors, officers, Affiliates, representatives and employees in connection
with the transactions contemplated by this Agreement, the Ancillary Agreements
and the Technology Transfer Agreement and Bill of Sale; or (vii) any
noncompliance with any fraudulent transfer laws in respect of the transactions
contemplated hereunder.

 

(b) As soon as practicable after obtaining knowledge thereof, any Buyer
Indemnified Person shall notify Seller of any claim or demand which the Buyer
Indemnified Person has determined has given or could give rise to a right of
indemnification under this Agreement. A failure to give such notice shall not
negate a right to indemnification hereunder; provided, however, that the Buyer
Indemnified Person shall bear any amount of Damages resulting directly from a
failure to give a timely notice. If such claim or demand relates to a claim or
demand asserted by a third party against the Buyer Indemnified Person and if
Seller acknowledges in writing its obligations to indemnify and hold harmless
under this Section 7.1, Seller shall have the right to employ such counsel that
is reasonably acceptable to Buyer to defend any such claim or demand asserted
against the Buyer Indemnified Person. The Buyer Indemnified Person shall have
the right to participate in the defense of any said claim or demand at its own
cost and expense, provided that unless the Buyer Indemnified Person bears a
greater risk of loss than Seller, the Buyer Indemnified Person shall control the
defense of said claim or demand.

 

(c) The Buyer Indemnified Person shall make available to Seller or its
representatives all records and other materials required for use in contesting
any claim or demand asserted by a third party against any Buyer Indemnified
Person. Whether or not Seller so elects to defend any such claim or demand, the
Buyer Indemnified Person shall not have any obligation to defend any such claim
or demand and the Buyer Indemnified Person shall not waive any rights it may
have against Seller under this Section 7.1 with respect to any such claim or
demand by electing or failing to elect to defend any such claim, provided that
the Buyer Indemnified Person against which a claim or demand is asserted in the
first instance shall file in a timely manner any

 

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answer or pleading with respect to a suit or proceeding in such action as is
necessary to avoid default or other adverse results.

 

(d) The indemnification obligations of Seller shall survive for eighteen months
after the Closing Date with the exception of any claims relating to breaches of
representations and warranties that Seller had knowledge of at any time prior to
the Closing Date, intentional breach of a covenant, gross negligence, fraud,
willful misconduct, claims related to Environmental Laws, Liabilities and
Encumbrances related to Seller Taxes or Intellectual Property infringement
issues, any infringement issues or claims that relate to the intellectual
property rights conveyed to Buyer under the Technology Transfer Agreement and
Bill of Sale, which shall all survive until expiration of the applicable
statutory periods; provided, however, that Seller indemnification obligations
hereunder shall survive with respect to any claim asserted by a Buyer
Indemnified Person prior to expiration of the applicable indemnification period
as provided herein.

 

(e) There shall be no liability for Seller under this Section 7.1, unless the
amount of Damages incurred by a Buyer Indemnified Person exceeds $*** in the
aggregate. The $*** is recoverable along with all other amounts for Damages by a
Buyer Indemnified Person. Seller’s liability to a Buyer Indemnified Person under
this Section 7.1 shall be limited to ***, other than Damages that result from
any claims relating to breaches of representations and warranties that Seller
had knowledge of at any time prior to the Closing Date, intentional breach of a
covenant, gross negligence, fraud, willful misconduct, claims related to
Environmental Laws, Liabilities and Encumbrances related to Seller Taxes or
Intellectual Property infringement issues, whereupon the Buyer Indemnified
Person may seek all additional remedies available at law or in equity. Damages
from Seller shall first be recovered from the Cash Consideration, then the Stock
Consideration and then any additional amount of Damages shall be recovered from
any other assets or property of Seller.

 

7.2 Indemnification by Buyer.

 

(a) Buyer shall indemnify, defend, save and keep Seller, its successors and
assigns and its stockholders, directors, officers, Affiliates, representatives
and employees (“Seller Indemnified Persons”), forever harmless against and from
all Damages sustained or incurred by any of the foregoing Seller Indemnified
Persons as a result of or arising out of or by virtue of (i) any incorrect
representation or warranty made by Buyer herein, Ancillary Agreements, the Buyer
Disclosure Schedule or in any certificate, exhibit or schedule delivered to
Buyer in connection herewith; (ii) any breach of any covenant or obligation to
be performed hereunder by Buyer and (iii) fraud or willful misconduct of Buyer
and its directors, officers, Affiliates, representatives and employees in
connection with the transactions contemplated by this Agreement or the Ancillary
Agreements.

 

(b) As soon as practicable after obtaining knowledge thereof, any Seller
Indemnified Person shall notify Buyer of any claim or demand which the Seller
Indemnified Person has determined has given or could give rise to a right of
indemnification under this Agreement. A failure to give such notice shall not
negate a right to indemnification hereunder;

 

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provided, however, that the Seller Indemnified Person shall bear any amount of
Damages resulting directly from a failure to give a timely notice. If such claim
or demand relates to a claim or demand asserted by a third party against the
Seller Indemnified Person and if Buyer acknowledges in writing its obligations
to indemnify and hold harmless under this Section 7.2, Buyer shall have the
right to employ such counsel that is reasonably acceptable to Seller to defend
any such claim or demand asserted against the Seller Indemnified Person. The
Seller Indemnified Person shall have the right to participate in the defense of
any said claim or demand at its own cost and expense, provided that unless the
Seller Indemnified Person bears a greater risk of loss than Buyer            ,
the Seller Indemnified Person shall control the defense of said claim or demand.

 

(c) The Seller Indemnified Person shall make available to Buyer or its
representatives all records and other materials required for use in contesting
any claim or demand asserted by a third party against any Seller Indemnified
Person. Whether or not Buyer so elects to defend any such claim or demand, the
Seller Indemnified Person shall not have any obligation to defend any such claim
or demand and the Seller Indemnified Person shall not waive any rights it may
have against Buyer under this Section 7.2 with respect to any such claim or
demand by electing or failing to elect to defend any such claim, provided that
the Seller Indemnified Person against which a claim or demand is asserted in the
first instance shall file in a timely manner any answer or pleading with respect
to a suit or proceeding in such action as is necessary to avoid default or other
adverse results.

 

(d) Buyer’s indemnification obligations under this Agreement shall survive for
eighteen months after the Closing Date.

 

(e) There shall be no liability for Buyer under this Section 7.2, unless the
amount of Damages incurred by a Seller Indemnified Person exceeds $*** in the
aggregate. The $*** is recoverable along with all other amounts for Damages by a
Seller Indemnified Person. Buyer’s liability to a Seller Indemnified Person
under this Section 7.2 shall be limited to $*** in the aggregate, other than
Damages that result from failure to pay the Purchase Price, fraud or intentional
misconduct, whereupon the Seller Indemnified Person may seek all additional
remedies available at law or in equity.

 

ARTICLE VIII

 

MISCELLANEOUS

 

8.1 Confidentiality, Press Releases and Announcements.

 

No Party hereto shall (nor permit its Representatives to), directly or
indirectly: (a) make any disclosure to a third party other than the Parties
relating to any matter contemplated by this Agreement; or (b) disclose to a
third party other than the Parties any information received from another Party
or its Representatives in connection with the Acquisition, including without

 

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limitation, information received during a Party’s due diligence investigation
(such party receiving such information, the “Receiving Party” and such party
disclosing such information, the “Disclosing Party”); except as required by law
or judicial or administrative processes. Information will not be subject to the
provisions of this Section 8.1 which (x) is or becomes publicly available other
than as a result of a breach by the Receiving Party; (y) is or becomes available
on a non-confidential basis from a source which is not prohibited by contract or
law from disclosing such information to the Receiving Party; or (z) was known by
the Receiving Party prior to the disclosure thereof by the Disclosing Party
other than by means that would be a violation of this Section 8.1 had it been in
effect at the time of disclosure. Seller agrees that it will not sell or
distribute (except to its stockholders as permitted by this Agreement) any of
the Stock Consideration or purchase any Buyer capital stock, until all material
non public information about Buyer known to Seller are made public. Seller
agrees that it shall cause any permitted transferee to agree not to sell or
distribute any of the Stock Consideration or purchase any InPhonic capital
stock, as long such permitted transferee was in possession of material non
public information about Buyer or InPhonic. The Parties acknowledge and agree
that any breach of this Section 8.1 by a Party would cause irreparable harm to
the other Party hereto and that, in such event, such other Party shall have the
right, among other things, to preliminary and injunctive relief, in addition to
any other relief to which such other Party may be entitled. In the event that
the Acquisition is not consummated, the Receiving Party shall promptly return
all such written information provided by the Disclosing Party or its
Representatives and destroy any copies or notes derived therefrom.

 

The Parties agree and acknowledge that this Agreement will be disclosed in
compliance with InPhonic’s and/or Buyer’s obligations under either the
Securities Act or the Exchange Act.

 

8.2 No Third Party Beneficiaries.

 

This Agreement shall not confer any rights or remedies upon any person other
than the Parties and their respective successors and permitted assigns.

 

8.3 Entire Agreement.

 

This Agreement, the Schedules, the Exhibits, the Ancillary Agreements, the
documents and instruments and other agreements among the Parties referred to
herein and the nondisclosure agreement signed by each of the Parties dated
November 2, 2004 and incorporated herein by reference, constitute the entire
agreement among the Parties and supersedes any prior understandings, agreements
or representations by or among the Parties, written or oral, with respect to the
subject matter hereof.

 

8.4 Succession and Assignment.

 

This Agreement shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. Buyer may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of Seller.

 

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8.5 Headings.

 

The section headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

8.6 Notices.

 

All notices, requests, demands, claims, and other communications hereunder shall
be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly delivered two business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent via a reputable nationwide overnight courier
service or sent via facsimile (with acknowledgment of complete transmission)
with a confirmation copy by registered or certified mail, in each case to the
intended recipient as set forth below:

 

If to Seller or the Principals:

 

FONcentral.com, Inc.

10 Skyline Drive

Hawthorne, New York 10532

Attention: Chris Cicero, Chief Executive Officer

Facsimile: ***

 

With a copy to:

 

Brown Raysman Millstein Felder & Steiner LLP

900 Third Avenue, 23rd Floor

New York, NY 10022

Attention: Joel M. Handel, Esq.

Facsimile: ***

 

If to Buyer:

 

FON Acquisition, LLC

1010 Wisconsin Avenue, Suite 600

Washington, DC 20007

Attention: Walter Leach, Esq., Authorized Representative

of the sole Member

Facsimile: ***

 

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With a copy to:

 

Patton Boggs LLP

2550 M Street, NW

Washington, D.C. 20037

Attention: Douglas C. Boggs, Esq.

Facsimile: ***

 

Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the Party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.

 

8.7 Governing Law.

 

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware without regard to conflicts of laws
principally that would require the application of any other law. Any action or
proceeding seeking to enforce any provision of, or based on any claims for
equitable relief arising out of this Agreement may be brought against any of the
Parties only in the courts of District of Columbia and each of the Parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.

 

8.8 Amendments and Waivers.

 

No amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the Parties. No waiver by any Party of any
default, misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, 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 to indemnification, reimbursement or other remedy
hereunder arising by virtue of any prior or subsequent default,
misrepresentation, breach of such warranty or covenant. In addition, waiver of
any condition based on the accuracy of any representation or warranty, or on
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, reimbursement, or other remedy based or such
representations, warranties, covenants and obligations.

 

8.9 Severability.

 

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Any term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of
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 after the expiration of the time within which the
judgment may be appealed, provided that this Agreement shall not then
substantially deprive either Party of the bargained-for performance of the other
Party.

 

8.10 No Joint Venture.

 

This Agreement expressly does not create or evidence a partnership or joint
venture between Buyer and Seller.

 

8.11 Expenses.

 

All fees and expenses (including all legal and accounting fees and expenses and
all other expenses) incurred by each respective Party in connection with this
Agreement and the transactions contemplated hereby shall be paid by each such
respective Party.

 

8.12 Specific Performance.

 

Each of the parties acknowledges and agrees that the other parties would be
damaged irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that each Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter in
addition to any other remedy to which they may be entitled, at law or in equity.

 

8.13 Other Remedies.

 

Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a Party will be deemed cumulative with, and not exclusive of, any
other remedy conferred hereby or by law or equity upon such party, and the
exercise by a Party of any one remedy will not preclude the exercise of any
other remedy.

 

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8.14 Survival of Covenants.

 

Notwithstanding any other provision of this Agreement, the representation
contained in Section 3.10 and the covenants contained in Sections 2.5(b), 2.7,
2.8, 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16
and 5.18 and indemnification obligations under Article VII (relating to the
provision that extends survival to expiration of applicable statutory periods)
and this Article VIII shall survive indefinitely.

 

8.15 Survival of Representations.

 

Except as provided in Section 8.14, all the representations and warranties and
understandings of the Parties and InPhonic contained in this Agreement shall
survive for a period of eighteen months after the Closing Date.

 

8.16 Letter of Intent.

 

This Agreement shall supersede in its entirety the Letter of Intent dated
January 13, 2005 entered into by the Parties.

 

8.17 Construction.

 

The Parties agree that they have been represented by counsel during the
negotiation, preparation and execution of this Agreement and, therefore, waive
the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise.

 

8.18 Incorporation of Exhibits.

 

The Exhibits and Schedules identified in this Agreement are incorporated herein
by reference and made a part hereof.

 

8.19 Counterparts, Facsimile Signatures.

 

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument. This Agreement may be executed by facsimile signatures.

 

[Signatures begin on following page]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

FON ACQUISITION, LLC

 

By: INPHONIC, INC.

Its: Sole Member

 

By:   /s/ Lawrence S. Winkler

Name:

Its:

 

Lawrence S. Winkler

Chief Financial Officer, Executive Vice President and Treasurer

 

 

INPHONIC, INC. By:   /s/ Lawrence S. Winkler

Name:

Its:

 

Lawrence S. Winkler

Chief Financial Officer, Executive Vice President and Treasurer

 

 

FONCENTRAL.COM, INC. By:   /s/ Chris Cicero

Name:

Its:

 

Chris Cicero

Chief Executive Officer

 

 

PRINCIPALS By:   /s/ Chris Cicero

Name:

  Mr. Chris Cicero

 

By:   /s/ Sam Lamba

Name:

  Mr. Sam Lamba

 

 

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