Exhibit 10.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

WILDEBEEST INTERMEDIATE, LLC,

WILDEBEEST-2 MERGER SUB, INC.,

GOVDELIVERY HOLDINGS, INC.,

ACTUA HOLDINGS, INC.,

and

THE EQUITYHOLDERS’ REPRESENTATIVE

Dated as of September 20, 2016

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TABLE OF CONTENTS

 

         Page  

Section 1.

  Merger      2   

(a)

  The Merger      2   

(b)

  The Closing and the Effective Time      2   

(c)

  Effect of the Merger      3   

(d)

  Certificate of Incorporation and Bylaws      3   

(e)

  Directors and Officers      3   

(f)

  Effect of the Merger on the Company Capital Stock      3   

(g)

  Paying Agent      5   

(h)

  Treatment of Options and Non-Participating Options      7   

(i)

  Repaid Indebtedness; Transaction Expenses      9   

(j)

  Adjustment of the Merger Consideration      9   

(k)

  Release of Liens      12   

(l)

  Dissenting Shares      12   

Section 2.

  Conditions to Obligations of Parent and Merger Sub      12   

(a)

  Representations and Warranties      12   

(b)

  Covenants and Agreements      13   

(c)

  Absence of Material Adverse Effect      13   

(d)

  Absence of Litigation      13   

(e)

  Closing Deliveries      13   

(f)

  Regulatory Approvals, Licenses and Permits      15   

(g)

  Real Property Holding Corporation Affidavit      15   

(h)

  Liens      15   

(i)

  Dissenting Shareholders      15   

(j)

  Joinder Agreements      15   

Section 3.

  Conditions to Obligation of the Company      15   

(a)

  Representations and Warranties      15   

(b)

  Covenants and Agreements      16   

(c)

  Absence of Litigation      16   

(d)

  Closing Deliveries      16   

(e)

  Regulatory Approvals      17   

Section 4.

  Covenants Prior to Closing      17   

(a)

  Affirmative Covenants      17   

(b)

  Negative Covenants      18   

(c)

  Mutual Covenants      20   

(d)

  Exclusivity      20   

(e)

  Monthly Financial Statements      21   

(f)

  Stockholder Notice; Appraisal Rights; Written Consent      21   

(g)

  Directors and Officers Indemnification      22   

(h)

  Antitrust Matters      22   

 

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Section 5.

  Representations and Warranties of the Company      23   

(a)

  Organization; Capitalization      24   

(b)

  Authorization of the Transaction      24   

(c)

  Noncontravention      25   

(d)

  Brokers’ Fees      25   

(e)

  Subsidiaries and Investments      25   

(f)

  Financial Statements      26   

(g)

  Absence of Certain Developments      26   

(h)

  Absence of Undisclosed Liabilities      29   

(i)

  Legal Compliance      29   

(j)

  Assets and Properties      29   

(k)

  Real Property      29   

(l)

  Tax Matters      30   

(m)

  Intellectual Property      31   

(n)

  Contracts and Commitments      34   

(o)

  Government Contracts      36   

(p)

  Insurance      36   

(q)

  Litigation      36   

(r)

  Employees      37   

(s)

  Employee Benefits      38   

(t)

  Customers, Suppliers and Resellers      39   

(u)

  Affiliate Interests      41   

(v)

  Governmental Permits      41   

(w)

  Product Warranty      41   

(x)

  Environmental Matters      41   

(y)

  Sanctions, Import and Export Controls      42   

(z)

  Anti-Corruption      42   

Section 6.

  Representations and Warranties of Parent and Merger Sub      43   

(a)

  Organization      43   

(b)

  Authorization of the Transaction      43   

(c)

  Noncontravention      43   

(d)

  Brokers’ Fees      44   

(e)

  Financing      44   

(f)

  Merger Sub      45   

Section 7.

  Termination      45   

(a)

  Termination      45   

(b)

  Effect of Termination      46   

(c)

  Waiver of Rights      46   

Section 8.

  Indemnification      46   

(a)

  Survival      46   

(b)

  Indemnification      47   

 

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Section 9.

  Additional Agreements      51   

(a)

  Press Releases      51   

(b)

  Transaction Expenses      52   

(c)

  Tax Matters      52   

(d)

  [Intentionally Omitted]      58   

(e)

  Confidentiality      58   

(f)

  Release      59   

(g)

  Further Assurances      59   

(h)

  Specific Performance      59   

(i)

  Equityholders’ Representative      60   

(j)

  Termination of Certain Contracts      62   

(k)

  Transfer Taxes      62   

Section 10.

  Miscellaneous      62   

(a)

  No Third Party Beneficiaries; No Recourse      62   

(b)

  Entire Agreement      62   

(c)

  Successors and Assigns      62   

(d)

  Counterparts      63   

(e)

  Headings      63   

(f)

  Notices      63   

(g)

  Governing Law      64   

(h)

  Consent to Jurisdiction; Waiver of Jury Trial      64   

(i)

  Amendments and Waivers      65   

(j)

  Incorporation of Appendices, Exhibits and Schedules      65   

(k)

  Cumulative Remedies      65   

(l)

  Construction      65   

(m)

  Severability of Provisions      66   

(n)

  No Additional Representations      66   

(o)

  Waiver of Conflicts; Privilege      67   

EXHIBITS

 

Exhibit A Form of Joinder Agreement

Exhibit B Form of Certificate of Merger

Exhibit C Form of Transmittal Letter

Exhibit D Form of Option Cancellation Agreement

Exhibit E Form of Non-Solicitation Agreement

Exhibit F Form of Non-Competition Agreement

Exhibit G Form of Escrow Agreement

Exhibit H Form of Paying Agent Agreement

Exhibit I Allocation Methodology

Exhibit J 336(e) Adjustment Methodology and Sample Calculation

Exhibit K Form of Representative Side Letter

Exhibit L Form of Form 8-K

Exhibit M Distribution Waterfall

 

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AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this “Agreement”) is entered into as of
September 20, 2016, by and among Wildebeest Intermediate, LLC, a Delaware
limited liability company (“Parent”), Wildebeest-2 Merger Sub, Inc., a Delaware
corporation (“Merger Sub”), GovDelivery Holdings, Inc., a Delaware corporation
(the “Company”), and Actua USA Corporation, a Delaware corporation, solely in
its capacity as the Equityholders’ Representative (as defined below) and, solely
for purposes of Section 9(c)(viii), Actua Holdings, Inc., a Delaware corporation
(“Seller”). Parent, Merger Sub, the Company, the Equityholders and the
Equityholders’ Representative are referred to sometimes individually as a
“Party” and, collectively herein as the “Parties”. Capitalized terms used herein
and not otherwise defined shall have the meanings set forth on Appendix A
attached hereto.

RECITALS

WHEREAS, the board of directors of the Company (the “Company Board”), subject to
the terms and conditions set forth herein, has unanimously (i) declared the
advisability of this Agreement and approved and adopted this Agreement, and
(ii) resolved to recommend approval and adoption of this Agreement by all of the
holders of Company Capital Stock (as defined below) (all such holders of Company
Capital Stock collectively, the “Stockholders” and together with the
Optionholders (as defined below), the “Equityholders”));

WHEREAS, the board of directors of Merger Sub has declared the advisability of
this Agreement and approved and adopted this Agreement;

WHEREAS, Parent has approved and adopted this Agreement in its capacity as the
sole stockholder of Merger Sub;

WHEREAS, each of the Company Board and the board of directors of Merger Sub has
approved the merger of Merger Sub with and into the Company, with the Company as
the surviving corporation (the “Surviving Corporation”), upon the terms and
subject to the conditions set forth in this Agreement and the applicable
provisions of the Delaware General Corporations Law (as amended, the “DGCL”),
whereby each issued and outstanding share of series AA preferred stock, par
value $0.001 per share (the “Series AA Preferred Stock”), and each issued and
outstanding share of common stock, par value $0.001 per share (the “Common
Stock” and, together with the Series AA Preferred Stock, the “Company Capital
Stock”), of the Company (other than the Series AA Preferred Stock and the Common
Stock to be canceled pursuant to Section 1(f)(vi) and Dissenting Shares) shall
be converted into the right to receive a portion of the Merger Consideration (as
defined herein) upon the terms and subject to the conditions set forth herein
and based upon the applicable liquidation preferences and other rights,
preferences and privileges of such class or series of Company Capital Stock as
set forth in the Company’s Fourth Amended and Restated Certificate of
Incorporation, as filed with the Secretary of State of the State of Delaware on
April 28, 2015 (the “Charter”);

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WHEREAS, immediately after execution of this Agreement, Stockholders holding in
excess of ninety percent (90%) of the issued and outstanding shares of Company
Capital Stock (on an as-converted basis) shall execute and deliver, in
accordance with Section 228 of the DGCL, a written consent approving this
Agreement, the Merger and the other transactions contemplated hereby in
accordance with Section 251 of the DGCL (the “Written Consent”), adopting this
Agreement, and a Joinder Agreement, substantially in the form of Exhibit A (the
“Joinder Agreement”), providing for certain agreements, undertakings,
representations, warranties, releases and waivers, and it is anticipated that,
within 24 hours following the execution and delivery of this Agreement by the
Company, each of those Stockholders will deliver a Written Consent and Joinder
Agreement, which are integral to the transactions contemplated hereby, and it is
acknowledged and agreed that Parent and Merger Sub would not consummate the
transactions contemplated hereby absent the execution and delivery of the
Written Consent and Joinder Agreement being in full force and effect and valid,
binding and enforceable against the holders of Company Capital Stock;

WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger, and also to prescribe various conditions to the Merger, as set forth in,
and subject to the provisions of, this Agreement; and

WHEREAS, the Equityholders’ Representative desires to serve as a representative
for the Equityholders on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties hereto agree as follows:

Section 1. Merger.

(a) The Merger. At the Effective Time and subject to and upon the terms and
conditions of this Agreement and the applicable provisions of the DGCL, Merger
Sub shall be merged with and into the Company, the separate corporate existence
of Merger Sub shall cease, and the Company shall continue as the Surviving
Corporation and as a wholly-owned subsidiary of Parent (the “Merger”).

(b) The Closing and the Effective Time. The closing of the Merger (the
“Closing”) will take place at the offices of Kirkland & Ellis LLP in San
Francisco, California, one Business Day following the satisfaction (or waiver by
the party entitled to the benefit thereof) of the conditions to the Closing set
forth in Sections 2 and 3 (other than the conditions that must be satisfied (or
waived by the party entitled to the benefit thereof) at the Closing); provided,
however, that, subject to the immediately following sentence, the Closing shall
not occur prior to the thirtieth (30th) day following the date on which this
Agreement is executed without Parent’s written consent, unless another time or
place is mutually agreed upon in writing by Parent and the Company.
Notwithstanding the immediately preceding sentence, in the event the Closing has
not occurred on or prior to October 28, 2016 (the “Target Date”), the Closing
shall occur one (1) Business Day following the satisfaction (or waiver by the
Party entitled to the benefit thereof) at any time subsequent to the Target Date
of the conditions to Closing set forth in Sections 2 and 3 (other than the
conditions that must be satisfied (or waived by the party entitled to the
benefit thereof) at the Closing). The date upon which the Closing occurs shall
be referred to herein as the “Closing Date.” On the Closing Date, and upon the
terms and subject to

 

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the conditions of this Agreement, the Parties shall cause the Merger to be
consummated by filing the Certificate of Merger (the “Certificate of Merger”),
in substantially the form attached hereto as Exhibit B, with the Secretary of
State of the State of Delaware, as required by and executed in accordance with
the applicable provisions of the DGCL (the time of such filing with the
Secretary of State of the State of Delaware, or such later time as may be agreed
upon in writing by Parent and the Company and specified in the Certificate of
Merger, shall be referred to herein as the “Effective Time”).

(c) Effect of the Merger. At the Effective Time, the effect of the Merger shall
be as provided in this Agreement, the Certificate of Merger and the applicable
provisions of the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, except as otherwise agreed to pursuant
to the terms of this Agreement, all of the property, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.

(d) Certificate of Incorporation and Bylaws. At the Effective Time, by virtue of
the Merger, the certificate of incorporation and bylaws of the Surviving
Corporation shall be amended and restated to be identical to the certificate of
incorporation and bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, until duly amended as provided therein or by applicable laws.

(e) Directors and Officers. The directors and officers of Merger Sub immediately
prior to the Effective Time shall be the directors and officers of the Surviving
Corporation immediately after the Effective Time, each to hold such office in
accordance with the provisions of the DGCL and the certificate of incorporation
and bylaws of the Surviving Corporation.

(f) Effect of the Merger on the Company Capital Stock.

(i) At the Effective Time, by virtue of the Merger, each share of Series AA
Preferred Stock issued and outstanding immediately prior to the Effective Time
(other than Excluded Shares and Dissenting Shares) shall be cancelled,
extinguished and converted into, and represent only the right to receive,
subject to the terms and conditions set forth in this Agreement, the Joinder
Agreement and the Escrow Agreement, including the indemnification provisions set
forth in Section 8, the Series AA Per Share Merger Consideration in the form of
(A) cash in an amount equal to the Closing Series AA Per Share Merger
Consideration and (B) the right to receive cash in an amount equal to the Pro
Rata Share attributable to such share of (x) any amounts released from the
Escrow Fund and/or the Reserve Account and (y) any positive Merger Consideration
Adjustment Amount.

(ii) At the Effective Time, by virtue of the Merger, each share of Common Stock
issued and outstanding immediately prior to the Effective Time (other than
Excluded Shares and Dissenting Shares) shall be cancelled, extinguished and
converted into and represent only the right to receive, subject to the terms and
conditions set forth in this Agreement, the Joinder Agreement and the Escrow
Agreement, including the indemnification provisions set forth in Section 8, the
Common Per Share Merger Consideration in the form of

 

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(A) cash in an amount equal to the Closing Common Per Share Merger Consideration
and (B) the right to receive cash in an amount equal to the Pro Rata Share
attributable to such share of (x) any amounts released from the Escrow Fund
and/or the Reserve Account and (y) any positive Merger Consideration Adjustment
Amount.

(iii) All shares of Company Capital Stock, when canceled, extinguished and
converted pursuant to this Section 1(f) shall no longer be outstanding and shall
automatically be canceled and retired, and each former holder of Company Capital
Stock shall cease to have any rights with respect thereto, except the right to
receive the consideration provided for herein.

(iv) At the Effective Time, Parent shall pay or cause to be paid by wire
transfer of immediately available funds the following:

(A) all Repaid Indebtedness and Transaction Expenses, as set forth on Schedules
1(i)(i) and 1(i)(ii), respectively, which such schedules shall be delivered by
the Company to Parent no later than two (2) Business Days prior to the Closing
Date;

(B) to the Equityholders’ Representative an amount equal to the Reserve Amount
for deposit into a bank account (the “Reserve Account”) in accordance with the
instructions set forth in the Distribution Waterfall, to be held and released in
accordance with Section 9(i);

(C) the Indemnity Escrow Amount to the Escrow Agent to be held as a trust fund
and released in accordance with the terms of the Escrow Agreement (the
“Indemnity Escrow Fund”);

(D) the Working Capital Escrow Amount to the Escrow Agent to be held as a trust
fund and released in accordance with the terms of the Escrow Agreement (the
“Working Capital Escrow Fund” and, together with the Indemnity Escrow Fund, the
“Escrow Fund”);

(E) the Initial Merger Consideration (less any portion thereof (x) payable in
respect of In-the-Money Options pursuant to Section 1(h) or (y) applicable to
Dissenting Shares) to the Paying Agent for further distribution to the
Stockholders in accordance with Section 1(g) and as set forth in the
Distribution Waterfall (the “Payment Fund”);

(F) that portion of the Initial Merger Consideration payable to the
Optionholders pursuant to Section 1(h) to the Surviving Corporation for further
distribution to the Optionholders in accordance with Section 1(h) and as set
forth in the Distribution Waterfall, in order that such payments be effected
through the Surviving Corporation’s payroll payment system (in each case,
subject to applicable withholding Taxes), if applicable; and

(G) the aggregate amount of Non-Participating Payments payable to the
Non-Participating Optionholders pursuant to Section 1(h) to the Surviving
Corporation for further distribution to the Non-Participating Optionholders in
accordance with Section 1(h), in order that such payments be effected through
the Surviving Corporation’s payroll payment system (in each case, subject to
applicable withholding Taxes), if applicable.

 

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(v) Capital Stock of Merger Sub. At the Effective Time, by virtue of the Merger,
each share of common stock, par value $0.001 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
exchanged for one share of common stock, par value $0.001 per share, of the
Surviving Corporation. Each stock certificate of Merger Sub evidencing ownership
of any such stock shall continue to evidence ownership of such stock of the
Surviving Corporation.

(vi) Cancellation of Treasury Shares. At the Effective Time, by virtue of the
Merger, any Company Capital Stock that is owned by the Company and not issued
and outstanding as of the Effective Time shall be automatically canceled and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.

(vii) Withholding. Notwithstanding any other provision in this Agreement,
Parent, the Company and its Subsidiaries, as applicable, shall have the right to
deduct and withhold any Taxes as it is required to deduct and withhold under
applicable law from any payments to be made hereunder; provided that, except
with respect to payments in the nature of compensation to be made to employees
or former employees, Parent shall consult with the Equityholders’ Representative
in good faith prior to withholding any amounts payable to any Equityholder
hereunder. To the extent that amounts are so withheld and paid over to the
appropriate Governmental Authority, such withheld amounts shall be treated for
all purposes of this Agreement as having been delivered and paid to the
applicable Equityholder or any other recipient of payment in respect of which
such deduction and withholding was made.

(viii) Treatment of Amounts in Escrow. Each Equityholder shall be deemed to have
contributed an amount equal to the amount of such Equityholder’s Pro Rata Share
of (A) the Escrow Amount to the Escrow Fund and (B) the Reserve Amount to the
Reserve Account (in each case, as set forth in the Distribution Waterfall).

(g) Paying Agent.

(i) Continental Stock Transfer & Trust Company, a New York corporation, shall
act as exchange and paying agent, registrar and transfer agent (in such
capacity, the “Paying Agent”) for the purpose of exchanging certificates
representing, immediately prior to the Effective Time, Company Capital Stock
(“Certificates”) for the aggregate Series AA Per Share Merger Consideration or
Common Per Share Merger Consideration, as applicable. At the Effective Time,
Parent or Merger Sub shall deposit, or Parent or Merger Sub shall otherwise take
all steps necessary to cause to be deposited, by wire transfer of immediately
available funds, in trust with the Paying Agent for the benefit of the
Stockholders, cash in an aggregate amount equal to the Payment Fund, which
deposit shall be used solely and exclusively for purposes of paying the Series
AA Per Share Merger Consideration and Common Per Share Merger Consideration, as
applicable, and shall not be used to satisfy any other obligations of the
Surviving Corporation. The Paying Agent shall, pursuant to instructions provided
by Parent and the Company, make the payments provided for in this Section 1(g)
out of the Payment Fund (it being understood that any and all interest earned on
funds made available to the Paying Agent pursuant to this Agreement shall remain
the property of the Surviving Corporation).

 

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(ii) No later than two (2) Business Days following the Effective Time, the
Paying Agent shall provide to each record holder of Certificates that
immediately prior to the Effective Time represented Company Capital Stock (A) a
notice of the effectiveness of the Merger, (B) a letter of transmittal,
substantially in the form of Exhibit C attached hereto (“Transmittal Letter”),
which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent, (C) a Joinder Agreement, and (D) instructions for use in
surrendering such Certificates and receiving the Series AA Per Share Merger
Consideration or Common Per Share Merger Consideration, as applicable, in
respect thereof. In addition, the form of Transmittal Letter will require the
delivering holder to represent that (x) such delivering holder has good title to
such Certificate(s), (y) such delivering holder has all necessary power and
authority to execute and deliver such Transmittal Letter and to perform its
obligations in connection therewith, and (z) such delivering holder agrees to
the terms of this Agreement.

(iii) Upon surrender to the Paying Agent of a Certificate, together with such
Transmittal Letter and a Joinder Agreement, in each case duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive, promptly after such surrender, in
exchange therefor, (A) cash in an amount equal to the Closing Series AA Per
Share Merger Consideration or Closing Common Per Share Merger Consideration,
which amount(s) shall be paid by the Paying Agent by check or wire transfer in
accordance with the instructions provided by such holder and (B) the right to
receive such holder’s Pro Rata Share of (x) any amounts released from the Escrow
Fund and/or the Reserve Account and (y) any positive Merger Consideration
Adjustment Amount. No interest or dividends will be paid or accrued on the
consideration payable upon the surrender or transfer of any Certificate. If the
consideration provided for herein is to be delivered in the name of a Person
other than the Person in whose name the Certificate surrendered, it shall be a
condition of such delivery that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the Person requesting
such delivery shall pay any transfer or other Taxes required by reason of such
delivery to a Person other than the registered holder of the Certificate, or
that such Person shall establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 1(g), each Certificate (other
than those representing Company Capital Stock to be canceled pursuant to
Section 1(f)(vi)) shall represent, for all purposes, only the right to receive
the Series AA Per Share Merger Consideration or Common Per Share Merger
Consideration, as applicable, in respect of the Company Capital Stock formerly
evidenced by such Certificate (which includes any portion of the Merger
Consideration that is released from the Escrow Fund and/or the Reserve Account),
without any interest or dividends thereon.

(iv) The consideration issued upon the surrender of Certificates in accordance
with this Agreement shall be deemed to have been issued in full satisfaction of
all rights pertaining to such Company Capital Stock formerly represented
thereby. After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Company Capital Stock that
was outstanding immediately prior to the Effective Time.

 

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(v) Neither Parent nor the Surviving Corporation shall be liable to a holder of
Certificates or any other Person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered or transferred by the sixth
anniversary of the Closing Date (or immediately prior to such earlier date on
which any Series AA Per Share Merger Consideration or Common Per Share Merger
Consideration, as applicable, dividends (whether in cash, stock or property) or
other distributions with respect to Company Capital Stock in respect of such
Certificate would otherwise escheat to or become the property of any foreign,
federal, state or local governments or governmental agency), any such shares,
cash, dividends or distributions in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any Person previously
entitled thereto.

(vi) In the event any Certificate has been lost, stolen or destroyed, upon the
making of an affidavit (in form and substance acceptable to the Surviving
Corporation) of that fact by the Person (who shall be the record owner of such
Certificate) claiming such Certificate to be lost, stolen or destroyed, and, if
required by the Surviving Corporation, the providing of an indemnity against any
claim that may be made against it with respect to such Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration deliverable in respect thereof pursuant to this Agreement.

(h) Treatment of Options and Non-Participating Options.

(i) For purposes of this Agreement, the term “Option” means each outstanding
unexercised option or similar entitlement (including convertible notes or other
similar debt instruments) to purchase shares of Company Capital Stock, whether
or not then vested or fully exercisable, granted prior to January 1, 2016 to any
current or former employee or director of the Company or any other Person (each
such Person, an “Optionholder” and collectively, the “Optionholders”), whether
under any stock option plan or otherwise (collectively, the “Stock Plans”).

(ii) On and subject to the terms and conditions of this Agreement, the Company
shall have taken all actions necessary so that at the Effective Time, (A) each
Option held by an Optionholder immediately before the Effective Time shall
become fully vested, (B) all Stock Plans and all Options shall be terminated and
cancelled, in each case in accordance with and pursuant to the terms of the
Stock Plans or other agreements under which such Options were granted to cause
the Stock Plans to be terminated, including but not limited to obtaining any
necessary consents from Optionholders, and (C) upon such cancellation, each
Optionholder who holds an In-the-Money Option shall be entitled to receive from
the Company, in settlement thereof, subject to Section 1(h)(vi), the Option Per
Share Merger Consideration in the form of (1) cash in an amount equal to the
Closing Option Per Share Merger Consideration and (2) the right to receive cash
in an amount equal to such Optionholder’s Pro Rata Share of (x) any amounts
released from the Escrow Fund and/or the Reserve Account and (y) any positive
Merger Consideration Adjustment Amount.

(iii) The Option Per Share Merger Consideration, which shall in all events be
paid in a manner that is exempt from or compliant with Section 409A of the Code,
shall be subject to all applicable withholding of Taxes and shall be paid by the
Surviving Corporation to the applicable Optionholders, without interest, upon
receipt (on or after Closing) of a duly executed consent and agreement in
substantially the form attached hereto as Exhibit D (an “Option Cancellation
Agreement”) with respect to each In-the-Money Option.

 

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(iv) For purposes of this Agreement, the term “Non-Participating Option” means
each outstanding unexercised option or similar entitlement to purchase shares of
Company Capital Stock, whether or not then vested or fully exercisable, granted
on or after January 1, 2016 to any current employee or director of the Company
or any other Person (each such Person, a “Non-Participating Optionholder” and,
collectively, the “Non-Participating Optionholders”) under the GovDelivery
Holdings, Inc. 2010 Equity Compensation Plan (the “2010 Equity Plan”).

(v) On and subject to the terms and conditions of this Agreement, the Company
shall have taken all actions necessary so that at the Effective Time, (A) each
Non-Participating Option held by a Non-Participating Optionholder immediately
before the Effective Time shall become fully vested, (B) all Non-Participating
Options shall be terminated and cancelled in accordance with the 2010 Equity
Plan, including Section 11(b)(iii) thereof, without the need for any such
Non-Participating Optionholder’s consent, and (C) upon such cancellation, each
Non-Participating Optionholder who holds a Non-Participating Option shall be
entitled to receive from the Company, in settlement thereof, subject to
Section 1(h)(vi), cash in an amount equal to no less than the consideration such
Non-Participating Optionholder would have received had the Non-Participating
Optionholder exercised such Non-Participating Option (assuming for the purposes
of this Section 1(h)(v) only, that all amounts held in the Escrow Fund and the
Reserve Account were, in fact, released), less the exercise price applicable to
such Non-Participating Option (each such payment, a “Non-Participating
Payment”).

(vi) The Surviving Corporation shall deduct and withhold from all consideration
otherwise payable or deliverable to any Optionholder and/or Non-Participating
Optionholder, as applicable, pursuant to this Section 1(h) such amounts as it
determines in good faith are required to deduct and withhold with respect to the
making of the payments pursuant to this Section 1(h) under any applicable
provision of U.S. or non-U.S. federal, state, provincial or local Tax law, and
such amounts shall, to the extent permitted by applicable law (but only to the
extent that such amounts are paid over to the appropriate Governmental
Authority), be treated for all purposes of this Agreement as having been paid to
the Optionholder and/or Non-Participating Optionholder, as applicable, in
respect of which the Surviving Corporation made such deduction and withholding.
Without limiting the generality of the foregoing, effective as of the Closing,
any and all rights of each Optionholder (and any and all Liabilities of the
Surviving Corporation to each Optionholder other than with respect to
withholding of Taxes and reporting with respect thereto) with respect to the
Options shall terminate in all respects, except as expressly set forth herein
with respect to the payment of a portion of the Option Per Share Merger
Consideration. Additionally, without limiting the generality of the foregoing,
effective as of the Closing, any and all rights of each Non-Participating
Optionholder (and any and all Liabilities of the Surviving Corporation to each
Non-Participating Optionholder other than with respect to withholding of Taxes
and reporting with respect thereto) with respect to the Non-Participating
Options shall terminate in all respects, except as expressly set forth herein
with respect to the Non-Participating Payment, and, for the avoidance of doubt,
no Non-Participating Option shall be entitled to receive any additional
consideration with respect to any amounts released from the Escrow Fund, the
Reserve Account and/or any positive Merger Consideration Adjustment Amount.

 

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(i) Repaid Indebtedness; Transaction Expenses.

(i) The Parties hereto agree that, upon the Closing, the Indebtedness of the
Company set forth on the attached Schedule 1(i)(i) (the “Repaid Indebtedness”)
shall be fully repaid by Parent on behalf of the Company in accordance with this
Section 1(i)(i). In order to facilitate such repayment, no less than three
(3) Business Days prior to the Closing, the Company shall obtain payoff letters
for the Repaid Indebtedness (together with all related documents and
instruments, the “Payoff Documents”), which Payoff Documents shall be in a form
reasonably satisfactory to Parent and shall indicate that such lenders have
agreed to, if applicable, upon receipt of the amounts indicated in such Payoff
Documents, promptly release all Liens relating to the assets and properties of
the Company and return all possessory and original collateral.

(ii) In addition, it is contemplated by the Parties that, upon the Closing, all
of the Transaction Expenses will be fully paid. In order to facilitate such
payment, no less than two (2) Business Days prior to the Closing, the Company
shall provide and attach hereto as Schedule 1(i)(ii) a statement of Transaction
Expenses in a form reasonably satisfactory to Parent. Subject to the
satisfaction of the Company’s conditions, covenants and obligations to be
satisfied prior to the Closing, in connection with the Closing, Parent shall
make payment of the Transaction Expenses by wire transfer of immediately
available funds on the Closing Date in order to discharge the amounts payable
thereunder. The Company shall obtain wire transfer instructions for the
satisfaction of the Transaction Expenses no less than two (2) Business Days
prior to the Closing.

(j) Adjustment of the Merger Consideration.

(i) Capitalization. In the event that, at the Effective Time, the actual number
of shares of Company Capital Stock outstanding and/or the actual number of
shares of Company Capital Stock issuable upon the exercise of Options, or
similar agreements or upon conversion of securities (including as a result of
any stock split, reclassification, stock dividend (including any dividend or
distribution of securities convertible into Company Capital Stock) or
recapitalization) is different than as described in Section 5(a)(ii), the Common
Per Share Merger Consideration shall be accurately reflected in the Distribution
Waterfall. The provisions of this Section 1(j) shall not, in any event,
adversely affect, constitute a waiver of or otherwise impair any of Parent’s or
Merger Sub’s rights under this Agreement (including any of Parent’s or Merger
Sub’s rights arising from any misrepresentation or breach of the representations
and warranties set forth in Section 5(a)(ii) hereof).

(ii) Closing Date Merger Consideration Adjustment. Not later than two
(2) Business Days prior to the Closing, the Company shall cause to be prepared
and delivered to Parent the Company’s good faith estimates of the Working
Capital (the “Estimated Working Capital”), the Closing Indebtedness (the
“Estimated Indebtedness”), the Transaction Expenses (the “Estimated Transaction
Expenses”), and the Cash and Cash Equivalents (the “Estimated Cash and Cash
Equivalents”) in form and substance reasonably satisfactory to Parent. Such
amounts shall be used to calculate the Initial Merger Consideration, subject to
final adjustment as provided in this Section 1(j).

 

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(iii) Closing Statement. Within seventy-five (75) days following the Closing,
Parent shall prepare or cause to be prepared and deliver or cause the Company to
deliver to the Equityholders’ Representative a statement (the “Closing
Statement”) setting forth the actual Working Capital (the “Actual Working
Capital”), the actual Closing Indebtedness (the “Actual Indebtedness”), the
actual Transaction Expenses (the “Actual Transaction Expenses”), and the actual
Cash and Cash Equivalents (the “Actual Cash and Cash Equivalents”), including,
in each case, the calculation thereof and any trial balances or other supporting
documentation used to prepare such calculations, and the Equityholders’
Representative shall cooperate as reasonably requested by Parent in the
preparation of the Closing Statement.

(iv) Post-Closing Adjustments. Following the conclusive determination, in each
case, in accordance with Section 1(j)(v), of the Actual Working Capital (such
amount as so determined, the “Final Working Capital”), the Actual Indebtedness
(such amount as so determined, the “Final Indebtedness”), the Actual Transaction
Expenses (such amount as so determined, the “Final Transaction Expenses”) and
the Actual Cash and Cash Equivalents (such amount as so determined, the “Final
Cash and Cash Equivalents”), the amount of the Initial Merger Consideration
shall be recalculated by substituting the Final Working Capital for the
Estimated Working Capital, the Final Indebtedness for the Estimated
Indebtedness, the Final Transaction Expenses for the Estimated Transaction
Expenses and the Final Cash and Cash Equivalents for the Estimated Cash and Cash
Equivalents (the result, the “Merger Consideration”). The “Merger Consideration
Adjustment Amount,” which may be positive or negative, shall mean (x) the Merger
Consideration, as finally determined in accordance with this Section 1(j), minus
(y) the Initial Merger Consideration. If (A) the Merger Consideration is greater
than the Initial Merger Consideration, then (1) Parent shall pay or cause to be
paid to the Paying Agent (for the benefit of the Stockholders) and the Company
(for the benefit of the Optionholders) the difference between the Initial Merger
Consideration and the Merger Consideration, in each case, to be distributed in
accordance with the applicable Pro Rata Shares set forth in the Distribution
Waterfall and (2) the funds remaining in the Working Capital Escrow Amount shall
be released to the Paying Agent (for the benefit of the Stockholders) and the
Company (for the benefit of the Optionholders), in each case, to be distributed
in accordance with the applicable Pro Rata Shares set forth in the Distribution
Waterfall; or (B) the Initial Merger Consideration is greater than the Merger
Consideration, then (y) such amount shall be paid from the Working Capital
Escrow Amount to Parent (with any shortfall that exceeds the Working Capital
Escrow Amount payable to Parent from the Indemnity Escrow Amount in accordance
with the applicable Pro Rata Shares set forth in the Distribution Waterfall) and
(z) the funds remaining (if any) in the Working Capital Escrow Amount, after
giving effect to clause (y), shall be released to the Paying Agent (for the
benefit of the Stockholders) and the Company (for the benefit of the
Optionholders), in each case to be distributed in accordance with the applicable
Pro Rata Shares set forth in the Distribution Waterfall.

 

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(v) Post-Closing Adjustment Payments. The amount of any payment required to be
made pursuant to Section 1(j)(iii) shall be paid to Parent, the Paying Agent
(for the benefit of the Stockholders in accordance with the applicable Pro Rata
Shares set forth in the Distribution Waterfall) and the Company (for the benefit
of the Optionholders in accordance with the applicable Pro Rata Shares set forth
in the Distribution Waterfall), as applicable, within eight (8) days after the
final determination of such amount becomes final in accordance with
Section 1(j)(v). For the avoidance of doubt, in the event no payment is required
to be made to Parent pursuant to Section 1(j)(iii), the Working Capital Escrow
Amount shall be released to the Paying Agent (for the benefit of the
Stockholders in accordance with the applicable Pro Rata Shares set forth in the
Distribution Waterfall) and the Company (for the benefit of the Optionholders in
accordance with the applicable Pro Rata Shares set forth in the Distribution
Waterfall), as applicable, promptly, but in any event within five (5) days after
the Closing Statement becomes final, and the Paying Agent and the Company shall
distribute the Working Capital Escrow Amount to the Stockholders and
Optionholders (in each case, in accordance with the applicable Pro Rata Shares
set forth in the Distribution Waterfall), as applicable, promptly, but in any
event within five (5) days of the release of the Working Capital Escrow Amount.

(vi) Adjustment Finalization. Unless the Equityholders’ Representative notifies
Parent in writing (the “Dispute Notice”) within thirty (30) Business Days after
receipt by the Equityholders’ Representative of the Closing Statement (the
“Dispute Notification Period”), of any objections thereto (specifying in
reasonable detail the statement so disputed together with the basis for such
dispute), such Closing Statement shall be final and binding for all purposes (it
being understood that any Closing Statement not expressly disputed in a writing
received by the Equityholders’ Representative in the Dispute Notification Period
shall become final, binding and conclusive upon the expiration of the Dispute
Notification Period). If the Equityholders’ Representative timely notifies
Parent of any such objection, Parent and the Equityholders’ Representative shall
attempt in good faith to reach an agreement as to the matter in dispute. During
the Dispute Notification Period, for purposes of confirming or disputing the
Closing Statement, the Equityholders’ Representative shall be given reasonable
access to all of the appropriate records of the Surviving Corporation as well as
any appropriate personnel of the Surviving Corporation materially involved in
the creation or preparation of the Closing Statement. If such Parties shall have
failed to resolve any such dispute within ten (10) Business Days after receipt
of timely notice of such objection (or such longer period mutually agreed to by
Parent and the Equityholders’ Representative), then any such disputed matter
shall be submitted to and determined by an independent nationally recognized
accounting firm that is mutually agreed upon by Parent and the Equityholders’
Representative (in each case, the “Independent Accounting Firm”). The
Independent Accounting Firm shall be given reasonable access to all of the
records of the Surviving Corporation and the Equityholders to resolve any
dispute regarding the Closing Statement, which determination with respect to any
disputed matters in the Closing Statement shall be submitted to Parent and the
Equityholders’ Representative within twenty (20) Business Days after the
parties’ engagement of the Independent Accounting Firm. The Independent
Accounting Firm shall address only those items properly disputed in accordance
with this Section 1(i)(vi) and the Independent Accounting Firm shall make its
determination as to any disputed items within the dollar ranges set forth in the
Closing Statement delivered by Parent and the Dispute Notice delivered by the
Equityholders’ Representative. The fees and expenses of such Independent
Accounting Firm incurred in resolving the disputed matter shall be equitably
apportioned between Parent, on the one hand, and the Equityholders’
Representative, on the other hand, such that the Equityholders’ Representative’s
share of such fees and expenses shall be in the same proportion that the
aggregate amount that was unsuccessfully disputed by the Equityholders’
Representative (as finally determined by the Independent Accounting Firm) bears
to the total amount of such

 

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disputed amounts so submitted by the Equityholders’ Representative to the
Independent Accounting Firm, and Parent’s share shall be the balance of such
fees and expenses; provided that any fees and expenses paid by the
Equityholders’ Representative shall be paid solely on behalf of the
Equityholders. The Closing Statement, if any, properly disputed hereunder shall,
after resolution of such dispute pursuant to this Section 1(j)(vi), be final,
binding and conclusive on all Parties.

(k) Release of Liens. Upon the Closing, the Company shall ensure that all
material Liens (including the Liens set forth on Schedule 1(k)), other than
Permitted Liens, on the assets of the Company will be released.

(l) Dissenting Shares. Notwithstanding anything contained herein to the
contrary, any shares of Company Capital Stock held by a holder who has not
effectively withdrawn or lost such holder’s appraisal rights under the DGCL
(“Dissenting Shares”) shall not be converted into the right to receive the
Series AA Per Share Merger Consideration or the Common Per Share Merger
Consideration, as applicable, but the holder thereof shall only be entitled to
such rights as are provided by the DGCL. Notwithstanding the foregoing, if any
holder of Dissenting Shares shall effectively withdraw or lose (through failure
to perfect or otherwise) such holder’s appraisal rights under the DGCL, then,
upon the occurrence of such event, such holder’s shares shall automatically be
converted into and represent only the right to receive the consideration for
Company Capital Stock, as applicable, provided for herein, without interest
thereon, and subject to all provisions of this Agreement applicable to the
Stockholders, upon surrender of the Certificate representing such shares or, if
applicable, making of an affidavit as described in Section 1(g)(vi). The Company
shall give Parent prompt notice of any demands for appraisal received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to the DGCL and received by the Company. The Company shall not, except with the
prior written consent of Parent (which consent shall not be unreasonably
withheld, conditioned or delayed), voluntarily make any payment or offer to make
any payment with respect to, or settle or offer to settle, any claim or demand
in respect of any Dissenting Shares. To the extent that Parent or the Surviving
Corporation (A) makes any payment or payments in respect of any Dissenting
Shares in excess of the consideration that otherwise would have been payable in
respect of such shares in accordance with this Agreement or (B) incurs any other
out-of-pocket costs or expenses in respect of any Dissenting Shares (excluding
payments for such shares) (together “Dissenting Share Payments”), Parent shall
be entitled to recover under the terms of Section 8 hereof (subject to the terms
and conditions set forth therein) the amount of such Dissenting Share Payments.

Section 2. Conditions to Obligations of Parent and Merger Sub. The obligation of
Parent and Merger Sub to consummate the transactions to be performed by each in
connection with the Closing is subject to satisfaction (or waiver, in accordance
with this Section 2) of the following conditions as of the Closing:

(a) Representations and Warranties. (i) Each of the representations and
warranties set forth in Section 5 (excluding the representations and warranties
in Sections 5(a) (Organization; Capitalization), 5(b) (Authorization of the
Transaction), 5(c)(i) (Noncontravention), 5(c)(ii) (Noncontravention), 5(d)
(Brokers’ Fees), 5(e) (Subsidiaries and Investments), 5(g)(x) (Absence of
Certain Developments) and 5(u) (Affiliate Interests)),

 

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disregarding all qualifications and exceptions contained therein relating to
“material,” “materiality,” “Material Adverse Effect” or other terms of similar
import or effect, shall be true and correct as of the date of this Agreement and
as of the Closing Date with the same effect as though made on and as of the
Closing Date (except to the extent that such representation and warranty
expressly speaks as of an earlier date, in which case such representation and
warranty shall be true and correct as of such earlier date), except where the
failure to be true and correct has not had and would not reasonably be expected
to have a Material Adverse Effect; provided, however, that, notwithstanding the
foregoing, the representation of the Company set forth in Section 5(g)(x)
(Absence of Certain Developments) shall be true and correct in all respects
(without disregarding the term Material Adverse Effect) as of the date of this
Agreement and as of the Closing Date with the same effect as though made on and
as of the Closing Date (except to the extent that such representation and
warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date);
(ii) the representations and warranties in Sections 5(a)(i) (Organization), 5(b)
(Authorization of the Transaction), 5(c)(i) (Noncontravention), 5(c)(ii)
(Noncontravention), 5(d) (Brokers’ Fees), 5(e) (Subsidiaries and Investments)
and 5(u) (Affiliate Interests)) shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date with the
same effect as though made on and as of the Closing Date (except to the extent
that such representation and warranty expressly speaks as of an earlier date, in
which case such representation and warranty shall be true and correct as of such
earlier date), and (iii) the representations and warranties in Section 5(a)(ii)
(Capitalization) shall be true and correct in all respects (except for such
inaccuracies that would not result in more than a de minimis increase in the
aggregate consideration payable by Parent) as of the date of this Agreement and
as of the Closing Date with the same effect as though made on and as of the
Closing Date (except to the extent that such representation and warranty
expressly speaks as of an earlier date, in which case such representation and
warranty shall be true and correct as of such earlier date).

(b) Covenants and Agreements. The Company shall have performed and complied with
in all material respects all of its covenants and agreements required to be
performed or complied with by it under this Agreement on or prior to the Closing
Date.

(c) Absence of Material Adverse Effect. There shall not have occurred a Material
Adverse Effect.

(d) Absence of Litigation. There shall not be (i) any injunction, writ or order
of any nature issued and directing that the transactions provided for herein not
be consummated as provided herein or (ii) any Action pending before any
Governmental Authority with respect to the transactions contemplated hereby;
provided that Parent and Merger Sub shall not be entitled to rely on the failure
of this condition to be satisfied if such Action was instituted by the Parent
Group or any of its Affiliates.

(e) Closing Deliveries. The Company shall have delivered, or caused to be
delivered, to Parent all of the following:

(i) a certificate to the effect that each of the conditions specified in
Sections 2(a) through 2(d), inclusive, have been satisfied;

 

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(ii) copies of the Charter and bylaws of the Company (the “Bylaws”) and the
written consents or resolutions, as the case may be, of the Stockholders and the
Company Board approving this Agreement and authorizing the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby certified to be accurate and complete and in full force and effect as of
the Closing, including the Written Consent;

(iii) a certificate of good standing (or equivalent) of the Company issued by
the Secretary of State of the State of Delaware and a certificate of good
standing (or equivalent) of each of the Company’s Subsidiaries issued by the
secretary of state (or other appropriate office) of the state of such
Subsidiary’s incorporation or formation, as applicable, and certificates of good
standing of the Company and each of the Company’s Subsidiaries issued by the
Secretary of State (or other appropriate office) of those jurisdictions set
forth on Schedule 5(a)(i)(A) attached hereto;

(iv) all books and records pertaining to the business of the Company and each of
the Company’s Subsidiaries, including all corporate and other records, books of
account, contracts, agreements and such other documents or certificates as
Parent may reasonably request, including minute books and stockholder records
(if any);

(v) resignations of the directors and officers of the Company and each of the
Company’s Subsidiaries (except to the extent otherwise identified in writing by
Parent prior to the Closing Date), effective at or prior to the Closing;

(vi) Non-Solicitation, Non-Disparagement and Confidentiality Agreement signed by
Actua Corporation (“Actua”) in substantially the form of Exhibit E attached
hereto (the “Non-Solicitation Agreement”), which such Non-Solicitation Agreement
shall be in full force and effect as of the Closing;

(vii) Non-Competition, Non-Solicitation, Non-Disparagement and Confidentiality
Agreement signed by Scott Burns in substantially the form of Exhibit F attached
hereto (“Non-Competition Agreement”), which such Non-Competition Agreement shall
be in full force and effect as of the Closing;

(viii) payoff letters for the Repaid Indebtedness in a form reasonably
satisfactory to Parent;

(ix) evidence, in form and substance reasonably satisfactory to Parent, of the
termination of the contracts, agreements, and arrangements set forth on Schedule
9(j);

(x) Option Cancellation Agreements duly executed by Optionholders holding no
less than ninety-five percent (95%) of the aggregate value of the In-the-Money
Options, which such Option Cancellation Agreements shall be in full force and
effect;

(xi) the Escrow Agreement, substantially in the form attached hereto as Exhibit
G, duly executed by the Equityholders’ Representative and the Escrow Agent (the
“Escrow Agreement”), which such Escrow Agreement shall be in full force and
effect; and

 

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(xii) the Paying Agent Agreement, substantially in the form attached hereto as
Exhibit H, duly executed by the Equityholders’ Representative, Citibank, N.A., a
national banking association as depository agent (the “Depository Agent”), and
Continental Stock Transfer & Trust Company, a New York corporation, as paying
agent (the “Paying Agent”) (the “Paying Agent Agreement”), which such Paying
Agent Agreement shall be in full force and effect.

(f) Regulatory Approvals, Licenses and Permits. All waiting periods (and any
extensions thereof) applicable to the transactions contemplated hereby under the
HSR Act or any other antitrust laws shall have been terminated or shall have
expired. No Order (whether temporary, preliminary or permanent) has been entered
by a Governmental Authority that restrains, enjoins, suspends or otherwise
prohibits the consummation of the Closing. Parent shall have received evidence
reasonably satisfactory to it that all regulatory approvals, licenses and
permits set forth on Schedule 2(f) have been received from each jurisdiction in
which the Company or any of the Company’s Subsidiaries presently has operations
such that Parent shall be legally entitled to continue to provide the same
products and services that the Company and its Subsidiary provided before the
consummation of the transactions contemplated hereby.

(g) Real Property Holding Corporation Affidavit. The Company shall deliver an
affidavit, under penalties of perjury, stating that the Company is not and has
not been within the applicable period a United States real property holding
corporation, dated as of the Closing Date and in form and substance required
under Treasury Regulation Section 1.897-2(h).

(h) Liens. None of the assets or properties of the Company shall be subject to
any Liens (including the Liens set forth on Schedule 1(k)), other than Permitted
Liens and Liens that, individually or in the aggregate, are not material to the
Business.

(i) Dissenting Shareholders . At least twenty (20) days shall have passed since
the delivery of the Stockholder Notice to the holders of Company Capital Stock,
and as of the Effective Time, the holders of no more than five percent (5%) of
the shares of Company Capital Stock shall have exercised any statutory
dissenters’ rights.

(j) Joinder Agreements. The Company will have delivered or caused to be
delivered to Parent, Joinder Agreements, duly executed by holders of at least
ninety percent (90%) of the outstanding Company Capital Stock (on an
as-converted basis).

Parent and Merger Sub may waive any condition specified in this Section 2 in
writing at or prior to the Closing.

Section 3. Conditions to Obligation of the Company. The obligation of the
Company to consummate the transactions to be performed by them in connection
with the Closing is subject to the satisfaction (or waiver, in accordance with
this Section 3) of the following conditions as of the Closing:

(a) Representations and Warranties. Each of the representations and warranties
set forth in Section 6 (excluding the representations and warranties in Sections
6(a), 6(b), 6(c)(i), and 6(d)), disregarding all qualifications and exceptions
contained therein relating to “material,” “materiality,” “material adverse
effect” or other terms of similar import or effect,

 

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shall be true and correct as of the date of this Agreement and as of the Closing
Date with the same effect as though made on and as of the Closing Date (except
to the extent that such representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty shall be true and
correct as of such earlier date), except where the failure to be true and
correct has not had and would not reasonably be expected to have a material
adverse effect on the ability of Parent to consummate the transactions
contemplated hereby; provided, however, that, notwithstanding the foregoing, the
representations and warranties in Sections 6(a), 6(b), 6(c)(i) and 6(d) shall be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date with the same effect as though made on and as of the
Closing Date (except to the extent that such representation and warranty
expressly speaks as of an earlier date, in which case such representation and
warranty shall be true and correct as of such earlier date).

(b) Covenants and Agreements. Each of Merger Sub and Parent shall have performed
and complied with in all material respects all of the covenants and agreements
required to be performed or complied with by it under this Agreement prior to
the Closing Date.

(c) Absence of Litigation. There shall not be (i) any injunction, writ or order
of any nature issued and directing that the transactions provided for herein not
be consummated as provided herein or (ii) any Action pending before any
Governmental Authority with respect to the transactions contemplated hereby;
provided that the Company shall not be entitled to rely on the failure of this
condition to be satisfied if such Action was instituted by the Company or any of
its Affiliates.

(d) Closing Deliveries. Parent shall have delivered, or caused to be delivered,
to the Company all of the following:

(i) a certificate to the effect that each of the conditions specified in
Sections 3(a) through 3(c), inclusive, have been satisfied;

(ii) certified copies of the resolutions of Parent’s and Merger Sub’s boards of
directors approving this Agreement and authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement;

(iii) a certificate of good standing of each of Parent and Merger Sub issued by
the Secretary of State of the applicable jurisdiction of incorporation or
formation;

(iv) the Escrow Agreement, duly executed by Parent and the Escrow Agent, which
such Escrow Agreement shall be in full force and effect;

(v) the Paying Agent Agreement, duly executed by Parent, the Depository Agent
and the Paying Agent, which such Paying Agent Agreement shall be in full force
and effect;

(vi) evidence that either (A) Parent has provided guarantees adequate to replace
Actua as guarantor under each of the agreements set forth on Schedule 3(d)(vi)
or (B) the counterparty to each such agreement has determined that a guarantee
is no longer required and has fully released Actua from its obligations as a
guarantor under such agreement; and

 

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(vii) the Representative Side Letter, duly executed by Parent, which such
Representative Side Letter shall be in full force and effect.

(e) Regulatory Approvals. All waiting periods (and any extensions thereof)
applicable to the transactions contemplated hereby under the HSR Act or any
other antitrust laws shall have been terminated or shall have expired. No Order
(whether temporary, preliminary or permanent) has been entered by a Governmental
Authority that restrains, enjoins, suspends or otherwise prohibits the
consummation of the Closing.

The Company may waive any condition specified in this Section 3 in writing at or
prior to the Closing.

Section 4. Covenants Prior to Closing. For purposes of this Section 4, the term
“Company” shall be deemed to refer to and include the Company and each of the
Company’s Subsidiaries.

(a) Affirmative Covenants. From the date hereof and through the Closing Date,
except as otherwise expressly provided herein, the Company shall carry on the
Business in the ordinary course of business and substantially in the same manner
as previously conducted unless Parent shall have otherwise given its prior
written consent. Without limiting the generality of the foregoing, the Company
shall:

(i) conduct the Business, including its cash management customs and practices
(including the collection of receivables and payment of payables) and billing,
marketing, sales and discount practices, only in the usual and ordinary course
of business in accordance with past custom and practice, and use commercially
reasonable efforts to keep its business organization, properties, assets and
business relationships intact;

(ii) use commercially reasonable efforts to (A) cooperate with Parent in
Parent’s investigation of the Business as Parent may reasonably request and use
commercially reasonable efforts to provide Parent, its financing sources and its
authorized representatives with reasonable access at reasonable times and upon
reasonable notice, to the offices, properties, advisors, agents, senior
management and books and records of the Company that Parent may reasonably
request, (B) provide reasonable assistance with the preparation and negotiation
of, loan agreements, pledge and security documents and other definitive
documents and/or certificates (including a solvency certificate) in connection
with any financing arranged or utilized by Parent (such documents, collectively
“Financing Documents”), (C) provide reasonable assistance with the completion of
schedules and other information disclosures reasonably requested by Parent
(including in connection with the Financing Documents), (D) cooperate in the
replacement or backstop of any outstanding letters of credit issued for the
account of the Company, (E) furnish, as promptly as practicable, Parent and
Parent’s financing sources with all documentation and other information with
respect to the Company required under applicable “know your customer” and
anti-money laundering laws, rules and regulations, including the U.S. PATRIOT
Act, (F) obtain the Payoff Documents in a form reasonably satisfactory to
Parent, Merger Sub and their financing sources, and (G) facilitate the pledge of
the collateral for any financing sources; provided that such pledge, for the
avoidance of doubt, shall not be effective prior to the consummation of the
Merger; provided, further that (1) the

 

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actions required under clauses (A) through (G) above do not unreasonably
interfere with the duties and responsibilities of the Company’s officers,
agents, advisors or employees with respect to the operations of the Company,
(2) all reasonable travel costs of such officers, agents, advisors and employees
related to the actions described in this Section 4(a)(ii) are promptly
reimbursed by or on behalf of Parent and (3) all other reasonable documented
out-of-pocket costs, fees and expenses incurred by the advisors of the Company
related to actions pursuant to this Section 4(a)(ii) are promptly reimbursed by
or on behalf of Parent; and

(iii) maintain the existence of and use commercially reasonable efforts to
protect all Intellectual Property owned by the Company.

(b) Negative Covenants. From the date hereof and prior to the Closing Date,
except as otherwise provided or required herein or as set forth in
Schedule 4(b), the Company shall not, unless Parent shall have otherwise given
its prior written consent:

(i) Take any action or omit to take any action that would require disclosure
under Sections 5(g)(i), (ii), (iii), (iv), (v), (vii), (viii), (ix), (x), (xi),
(xiv), (xv), (xvi), (xvii), (xviii) or (xix) hereof (Absence of Certain
Developments) as of the Closing Date;

(ii) hire or otherwise enter into or amend any employment agreement or
arrangement with any Person (A) outside of the ordinary course of business or
(B) whose compensation would exceed, on an annualized basis, $100,000;

(iii) enter into a consulting agreement or arrangement with any Person providing
for compensation that would exceed $75,000 in the aggregate;

(iv) enter into or amend any agreements providing for, making or granting any
bonus, severance or termination pay other than as required under the terms of
any agreements set forth on Schedule 5(n) or any Plans set forth on Schedule
5(s)(i); enter into or amend any agreements or otherwise provide for any
increase in any wage, salary or other compensation payable to any director,
officer, employee, consultant or other service provider; increase the benefits
to be provided under any employee benefit plan, program, policy or arrangement,
except as provided under Section 1(h), or adopt, amend or terminate any Plan
(including any employee benefit plan that would be a Plan if it was in effect on
the date hereof) except amendments to Plans that are required under applicable
law;

(v) implement any employee layoffs implicating the WARN Act or similar
applicable state law;

(vi) establish, adopt, enter into, or amend any collective bargaining agreement
or any other similar agreement with any labor union or labor organization;

(vii) take any action or omit to take any action, the taking or omission of
which, would reasonably be expected to have a Material Adverse Effect;

 

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(viii) (A) enter into any contract, agreement or arrangement that would be
required to be disclosed pursuant to Section 5(n)(xii) hereunder, (B) except as
provided under Section 1(h), directly or indirectly engage in any transaction,
arrangement or contract with any officer, director, stockholder or Affiliate of
the Company or any known relative of such an officer, director or Affiliate,
outside the ordinary course of business or (B) incur any Indebtedness for
borrowed money outside of the ordinary course of business;

(ix) settle or compromise any Action or threatened Action (or series of related
Actions) for an amount in excess of $100,000;

(x) enter into, materially amend or modify, outside the ordinary course of
business (for the avoidance of doubt renewals of existing customer contracts
shall be considered to be in the ordinary course of business), or terminate any
agreement the disclosure of which would be required by Section 5(n) of this
Agreement were such agreement in effect as of the date of this Agreement;

(xi) make any material deviations from planned marketing in the ordinary course
of business;

(xii) introduce any of the following changes with respect to the operation of
the Company: (A) (x) any material change in the types, nature, or composition,
outside the ordinary course of business, or (y) any material change in quality,
in each case of the products or services sold, leased or delivered by the
Company, (B) any material change in product specifications or prices or terms of
distribution of the products, outside the ordinary course of business, (C) any
material change in pricing, discount, allowance, warranty, refund or return
policies or practices, outside the ordinary course of business, (D) any material
modification of any pricing, discount, allowance, warranty, refund or return
terms for any customer or vendor, outside the ordinary course of business, or
(E) any material change to the manner in which the Company licenses or otherwise
distributes its products, outside the ordinary course of business;

(xiii) convert any customer product license agreement from a subscription-based
model to a fully paid-up model, other than in the ordinary course of business;

(xiv) enter into any contract, agreement or arrangement that obligates the
Company to refund the counter-party to any such contract, agreement or
arrangement any license fees payable pursuant to the terms of such contract,
agreement or arrangement (other than pursuant to the terms and conditions of the
Company’s warranty terms or service level agreements entered into in the
ordinary course of business), other than in the ordinary course of business;

(xv) enter into any contract, agreement or arrangement that obligates the
Company to develop any Intellectual Property related to the Company or the
Company Products, other than customizations of Company Products developed for
customers in the ordinary course of business, which such customizations shall be
owned by the Company;

(xvi) materially modify standard billing or collection procedures, other than in
the ordinary course of business;

 

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(xvii) make or change any election with respect to any material Taxes, adopt or
change any accounting method, amend any material Tax Returns, enter into any
closing agreement related to material Taxes, settle any material Tax claim or
assessment, or consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment;

(xviii) disclose any of the Company’s trade secrets to any third party, other
than pursuant to confidentiality agreements; or

(xix) agree to do anything prohibited by this Section 4(b).

(c) Mutual Covenants. Each of Parent, Merger Sub and the Company shall:

(i) use commercially reasonable efforts to cause the conditions to each other
party’s obligation to close to be satisfied;

(ii) use commercially reasonable efforts to do all things necessary and proper
to consummate the transactions contemplated by this Agreement, as soon as
practicable, including obtaining third party consents (including the consents
set forth on Schedule 5(c)); and

(iii) promptly deliver to the other parties written notices, upon becoming aware
of (A) any fact, change, condition, circumstance, event, occurrence or
non-occurrence that has caused or is reasonably likely to cause the failure of
any conditions set forth in Section 2(a) or Section 3(a), as applicable, (B) any
material failure on the part of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder where such failure is reasonably likely to cause the failure of any of
the conditions set forth in Section 2(b) or Section 3(b), as applicable, or
(C) (1) any injunction, writ or order of any nature issued and directing that
the transactions provided for herein not be consummated as herein provided or
(2) any Action pending or threatened before any Governmental Authority with
respect to the transactions contemplated hereby; provided that, subject to
Section 4(d), the delivery of any notice pursuant to this Section 4(c)(iii)
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice, or the representations and warranties or conditions
to the obligations of, the Parties; provided further that the failure to deliver
a notice pursuant to this Section 4(c)(iii) shall not (x) be considered in
determining whether the conditions set forth in Section 2 or Section 3 have been
satisfied or (y) be deemed to be a breach of a covenant under this Section 4 but
instead shall constitute only a breach of the underlying representation or
warranty or covenant, condition or agreement, as the case may be.

(d) Exclusivity. The Company agrees that it will not, and will cause its
officers, directors, employees, stockholders, partners, members, agents,
financial advisors, consultants, attorneys, accountants, representatives or
other advisors not to, directly or indirectly (i) solicit, intentionally and
knowingly initiate, facilitate, or encourage the submission of any Acquisition
Proposal or accept any such Acquisition Proposal; (ii) participate in any
discussions, negotiations or other communications (as a sender thereof)
regarding, or furnish to any Person any information with respect to, or take any
other action to knowingly facilitate or encourage any inquiries or the making of
any proposal that constitutes, or could reasonably be expected to lead to, any
Acquisition Proposal, or otherwise knowingly cooperate in any way, knowingly
assist or knowingly participate in, knowingly facilitate or knowingly encourage
any effort or attempt by any other Person to seek to do any of the foregoing; or
(iii) enter into any agreement with respect to any Acquisition Proposal.
Immediately following the execution and delivery of this

 

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Agreement, the Company shall, and the Company shall cause its officers,
directors, employees, partners, members, agents, financial advisors,
consultants, attorneys, accountants, authorized representatives or other
advisors to, cease and cause to be terminated all existing discussions,
negotiations and other communications with any Persons conducted heretofore with
respect to any of the foregoing. The Company shall, as promptly as practicable
(and in any event within one (1) Business Day after such party obtains knowledge
thereof), notify Parent if any other written proposals or offers, or any written
expressions of interest for the Company are made (unless such disclosure is
prohibited by a confidentiality or standstill agreement executed prior to the
date hereof). The Company shall not release any third party from, or waive any
provision of, any such confidentiality or standstill agreement to which it is a
party.

(e) Monthly Financial Statements. The Company shall promptly deliver to Parent
copies of the Company’s monthly financial statements (as prepared in the
ordinary course of business consistent with past practice for internal use) as
they are finalized between the date of this Agreement and the Closing Date on or
prior to the tenth (10th) Business Day following the last day of each such month
(the “Monthly Financial Statements”). The Monthly Financial Statements shall be
prepared in accordance with GAAP (except for the absence of the notes thereto
and subject to normal year-end adjustments), shall be consistent in all material
respects with the books and records of the Company, and shall fairly present, in
all material respects, the Company’s consolidated balance sheets and the related
consolidated statements of operations, stockholders’ deficit and cash flows for
the fiscal periods then ended.

(f) Stockholder Notice; Appraisal Rights; Written Consent. Within 24 hours
following the execution of this Agreement, the Company shall deliver to Parent
the Written Consent and the Joinder Agreement executed by the Significant
Equityholders. Within three (3) Business Days after the delivery of the Written
Consent, the Company shall prepare and deliver to each of the holders of Company
Capital Stock a written notice (the “Stockholder Notice”) pursuant to the DGCL
and the Charter. The Stockholder Notice shall (x) comply with the requirements
of the DGCL and all applicable federal and state securities laws, including
notice of the availability of appraisal rights under the DGCL and (y) be in a
form and substance reasonably acceptable to Parent. The Stockholder Notice shall
include a copy of the Written Consent and the Joinder Agreement along with an
information statement describing this Agreement and the transactions
contemplated herein (including the Merger) for approval and adoption as provided
by the DGCL and the Company’s organizational and governing documents. The
Stockholder Notice, and any proxy or consent in connection therewith, shall
specify that adoption of this Agreement shall constitute approval by the
Stockholders of: (i) the Escrow Amount and obligations of the Stockholders set
forth in Section 1 hereof and the deposit of the Escrow Amount with the Escrow
Agent, (ii) the appointment of Actua USA Corporation as the Equityholders’
Representative, with the rights and responsibilities set forth in this
Agreement, and (iii) the deposit of the Reserve Amount with the Equityholders’
Representative. The Company shall use its commercially reasonable efforts to
obtain the approval of or consent to the Merger, the transaction contemplated
hereby and this Agreement from each of the Stockholders as soon as reasonably
practicable following the date of this Agreement.

 

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(g) Directors and Officers Indemnification.

(i) Prior to the Closing Date, the Company shall purchase, at the Company’s
expense, “tail” coverage (the “D&O Tail Policy”) for the six-year period
following the Closing under the directors’ and officers’ liability insurance
policies of the Company to be in place prior to the Closing Date with respect to
matters existing or occurring at or prior to the Closing Date that provides
coverage no less favorable in scope and amount to the coverage provided by such
policies at such time.

(ii) From and after the Effective Time, and until the sixth (6th) anniversary of
the Effective Time, Parent shall cause the Surviving Corporation to fulfill and
honor in all respects the obligations of the Company to Persons who on or prior
to the Effective Time are or were directors and/or officers of the Company (the
“D&Os”) pursuant to any indemnification provisions under the Charter or the
Bylaws as in effect on the date hereof and pursuant to any indemnification
agreements between the Company and such D&Os existing as of the date hereof
solely to the extent listed on Schedule 4(g)(ii), with respect to claims arising
out of matters occurring at or prior to the Effective Time; provided, however,
that (x) the foregoing obligations shall be subject to any limitation imposed by
applicable laws and will not apply with respect to any fraud or willful
misconduct committed by such Persons in connection with this Agreement, any
agreement contemplated herein or any transaction contemplated hereby or thereby,
and (y) none of the D&Os shall have any right of contribution, indemnification
or right of advancement from Parent, the Surviving Corporation or their
respective successors with respect to any Losses claimed by any of the
Indemnified Parties against any such D&O in his or her capacity as an
Indemnifying Party pursuant to this Agreement.

(iii) The provisions of this Section 4(g) are intended to be for the benefit of,
and shall be enforceable by, the D&Os and their respective heirs, personal
representatives, successors and assigns.

(iv) In the event Parent or the Surviving Corporation or any of their respective
successors or assigns (A) consolidates with or merges into any other Person and
shall not be the continuing or surviving entity of such consolidation or merger
or (B) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, proper provisions shall be
made so that the successors and assigns of Parent or the Surviving Corporation,
as the case may be, assume the obligations set forth in this Section 4(g).

(h) Antitrust Matters. Parent (and its Affiliates, if applicable), on the one
hand, and the Company (and its Affiliates, if applicable), on the other hand,
will, to the extent required in the reasonable judgment of counsel to Parent and
the Company, (i) file with the United States Federal Trade Commission (“FTC”)
and the Antitrust Division of the United States Department of Justice (“DOJ”) a
Notification and Report Form relating to this Agreement and the transactions
contemplated by this Agreement as required by the HSR Act within three
(3) Business Days following the date of this Agreement (such filings shall
specifically request early termination of the waiting period, and Parent and the
Company shall each be responsible for fifty percent (50%) of the filing fee
payable under the HSR Act); and (ii) promptly file comparable pre-merger
notification filings, forms and submissions with any Governmental Authority that
are required by other applicable antitrust laws in connection with the
transactions contemplated by

 

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this Agreement (with any comparable pre-merger filings to be made as soon as
reasonably practicable following the date of this Agreement and Parent and the
Company shall each be responsible for fifty percent (50%) of the filing fee with
respect to such filing). Each of Parent and the Company will (A) cooperate and
coordinate (and cause its respective Affiliates to cooperate and coordinate)
with the other in the making of such filings; (B) supply the other (or cause the
other to be supplied) with any information or documents that may be required in
order to make such filings; provided that insofar as any such information or
documents are competitively sensitive, such information or documents may be
provided directly to the relevant Governmental Authorities or, if required, on
an outside counsel-to-counsel, in each case on a strictly confidential basis;
(C) supply (or cause the other to be supplied) any additional information that
reasonably may be required or requested by the FTC, the DOJ or the Governmental
Authorities of any other applicable jurisdiction in which any such filing is
made; and (D) use reasonable best effort to (1) cause the expiration or
termination of the applicable waiting periods pursuant to the HSR Act and any
other antitrust laws applicable to the transactions contemplated by this
Agreement; and (2) obtain any required consents pursuant to any antitrust laws
applicable to the transactions contemplated by this Agreement as soon as
practicable. Parent (and its Affiliates, if applicable), on the one hand, and
the Company (and its Affiliates), on the other hand, will (i) promptly inform
the other party of any material written or oral communication received from any
Governmental Authority relating to the transactions contemplated hereby (and if
in writing, furnish the other party with a copy of such communication); (ii) use
its reasonable best efforts to respond as promptly as practicable to any request
from any Governmental Authority for information, documents or other materials in
connection with the review of the HSR Act Filings or the transactions
contemplated hereby; (iii) provide to the other party, and permit the other
party to review and comment in advance of submission, all proposed material
correspondence and written communications to any Governmental Authority with
respect to the transactions contemplated hereby; and (iv) not participate in any
substantive meeting or discussion with any Governmental Authority in respect of
investigation or inquiry concerning the transactions contemplated hereby without
giving the other parties reasonable prior notice of such meeting or discussions
and, except as prohibited by applicable Law or Governmental Authority, gives the
other party the opportunity to attend and participate thereat. If any Party or
Affiliate thereof receives a request for additional information or documentary
material from any Governmental Authority with respect to the transactions
contemplated by this Agreement pursuant to the HSR Act or any other antitrust
laws applicable to the transactions contemplated by this Agreement, then such
Party will make (or cause to be made), as soon as reasonably practicable and
after consultation with the other Parties, an appropriate response in compliance
with such request.

Section 5. Representations and Warranties of the Company. As a material
inducement to Parent and Merger Sub to enter into and perform their respective
obligations under this Agreement, as of the date hereof and as of the Closing
(unless made as of a specific date) the Company represents and warrants to
Parent as follows (it being understood that for purposes of this Section 5, the
term “Company” shall be deemed to refer to and include the Company and each of
the Company’s Subsidiaries, as applicable):

 

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(a) Organization; Capitalization.

(i) The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, and the Company is
also qualified to do business and in good standing in those jurisdictions set
forth on Schedule 5(a)(i)(A) attached hereto which jurisdictions constitute all
of the jurisdictions in which the ownership of properties or the conduct of the
Business requires the Company to be so qualified, except where failure to be so
qualified and in good standing would not result or reasonably be expected to
result in, a Material Adverse Effect to the Company. A correct and complete list
of the directors and officers of the Company is set forth on Schedule 5(a)(i)(B)
attached hereto.

(ii) The attached Schedule 5(a)(ii) accurately sets forth the authorized and
outstanding securities of the Company and the name of each holder of such
securities together with the number of such securities held by each such Person.
All of the issued and outstanding securities of the Company have been duly
authorized, are validly issued, fully paid and nonassessable, are not subject
to, nor were they issued in violation of, any preemptive rights, and are owned
of record and beneficially by the Stockholders as described on Schedule
5(a)(ii). Except for this Agreement, the Stockholder Agreements and as may be
set forth on the attached Schedule 5(a)(ii), there are no outstanding or
authorized Options, Non-Participating Options, rights, contracts, calls, puts,
rights to subscribe, rights of first refusal, rights of first offer, conversion
rights or other agreements or commitments to which the Company is a party or
which are binding upon the Company providing for the issuance, disposition or
acquisition of any of its securities or any rights or interests exercisable
therefor. There are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Company. Except for the Stockholder
Agreements, there are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of the securities of the Company. The
Company has not received any unconditional or conditional shareholders’
contributions or any equity or other capital contributions of any nature that
may involve any repayment obligations of the Company. Except for the Stockholder
Agreements, the Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its securities.

(b) Authorization of the Transaction. The execution, delivery and performance by
the Company of this Agreement, each other agreement, document, instrument or
certificate contemplated hereby, to which the Company is a party or at the
Closing will be a party, and of each of the transactions contemplated hereby and
thereby have been duly and validly authorized by the Company, and no other act
or proceeding on the part of the Company, the Company Board or the Stockholders
is necessary to authorize the execution, delivery or performance by the Company
of this Agreement or each other agreement, document, instrument or certificate
contemplated hereby, to which the Company is a party or at the Closing will be a
party, or the consummation of any of the transactions contemplated hereby and
thereby, other than the Written Consent and the approval of this Agreement and
the transactions contemplated by this Agreement, including the Merger, by the
Company Board. On or prior to the date of this Agreement, the Company Board has,
at a meeting duly called and held in which all directors were present,
unanimously determined that this Agreement and the transactions contemplated by
this Agreement, including the Merger, are fair to and in the best interest of
the Company and the holders of Company Capital Stock, and adopted resolutions
(i) approving this Agreement, and (ii) declaring this Agreement and the Merger
advisable and directed that this Agreement be

 

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submitted to the holders of Company Capital Stock for their adoption, which
resolutions have not been subsequently withdrawn or modified in a manner adverse
to Parent. This Agreement has been duly executed and delivered by the Company,
and this Agreement constitutes, and each other agreement, document, instrument
or certificate contemplated hereby, to which the Company is a party or at the
Closing will be a party, upon execution and delivery by the Company will each
constitute, a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by (x) bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, relating to or limiting creditors’
rights generally, and (y) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies (the
“Enforceability Exceptions”).

(c) Noncontravention. Except as set forth on Schedule 5(c), neither the
execution and the delivery of this Agreement or any other agreement, document,
instrument or certificate contemplated hereby, and none of the transactions
contemplated hereby or thereby, shall (i) violate any law or other restriction
of a Governmental Authority (other than in its capacity as a customer of the
Company) to which the Company is subject in any material respect, (ii) violate
any provision of the Charter and Bylaws, (iii) result in a breach or
acceleration of, or create in any party the right to accelerate, terminate,
modify, or require any notice under, any agreement or other arrangement required
to be disclosed pursuant to Section 5(n) or (iv) result in the imposition of any
material Lien upon any of the Company’s assets except, in the case of clause
(iii), for such breaches, accelerations, terminations or modifications as would
not be reasonably expected to be material to the Company. The Company is not
required to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any Governmental Authority (other than in
its capacity as a customer of the Company) in order for the Parties to
consummate the transactions contemplated by this Agreement, except for the
filing and recordation of the Certificate of Merger as required by the DGCL and
necessary filings under the HSR Act.

(d) Brokers’ Fees. Except as set forth on Schedule 5(d), the Company has no
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.

(e) Subsidiaries and Investments. Except as set forth on Schedule 5(e) attached
hereto, at all times prior to the date hereof, the Company has not had any
Subsidiaries. Except as set forth on Schedule 5(e) attached hereto, the Company
does not own, directly or indirectly, any stock or other interest in, or any
security issued by, any other Person. Each of the Subsidiaries set forth on
Schedule 5(e) attached hereto is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of each such Subsidiary’s
incorporation or formation, and such Subsidiary is also qualified to do business
and in good standing in those jurisdictions set forth on Schedule 5(e) attached
hereto which jurisdictions constitute all of the jurisdictions in which the
ownership of properties or the conduct of the Business requires such Subsidiary
to be so qualified, except where failure to be so qualified and in good standing
would not result or reasonably be expected to result in, a Material Adverse
Effect to such Subsidiary. The Company owns directly or indirectly all of the
outstanding equity interests of the Subsidiary set forth on Schedule 5(e)
attached hereto, and there are no subscriptions, options, warrants, commitments,
preemptive rights, agreements, arrangements or

commitments of any kind relating to the issuance or sale of, or outstanding
securities convertible into or exercisable for, any shares of capital stock or
any class or other equity interests with respect to such Subsidiary.

 

 

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(f) Financial Statements. Schedule 5(f) attached hereto contains the following
financial statements (collectively the “Financial Statements”):

(i) the unaudited consolidated balance sheets of the Company as of December 31,
2014 and December 31, 2015, and the related unaudited consolidated statements of
operations, changes in stockholders’ equity and cash flows for the fiscal
periods then ended, and the related notes thereto (if any);

(ii) the unaudited consolidated balance sheet of the Company as of July 31, 2016
(such date, the “Latest Balance Sheet Date”) (such balance sheet, the “Latest
Balance Sheet”), and the related unaudited consolidated statements of
operations, changes in stockholders’ equity and cash flows for the seven-month
period then ended;

The Financial Statements are based upon and consistent with information
contained in the books and records of the Company (which books and records are
accurate, correct and complete in all material respects) and fairly present, in
all material respects, the financial condition and results of operations of the
Company as of the times and for the periods referred to therein in accordance
with GAAP and the Financial Statements have been prepared in accordance with
GAAP, as consistently applied throughout such periods (except for the absence of
notes and subject to normal recurring year-end adjustments (which adjustments
are not expected to be material, individually or in the aggregate, in scope or
amount) in the case of any interim Financial Statements). The Company Relevant
Persons have not directly or indirectly (A) circumvented the internal accounting
controls of the Company, (B) intentionally falsified any of the books, records
or accounts of the Company, or (C) made false or misleading statements to, or
attempted to coerce or fraudulently influence, an accountant in connection with
any audit, review or examination of the financial statements of the Company and,
to the Knowledge of the Company, no Other Relevant Person has directly or
indirectly (X) circumvented the internal accounting controls of the Company,
(Y) intentionally falsified any of the books, records or accounts of the Company
or (Z) made false or misleading statements to, or attempted to coerce or
fraudulently influence, an accountant in connection with any audit, review or
examination of the financial statements of the Company. Except as set forth on
Schedule 5(f) attached hereto, no Equityholder owes to the Company any
outstanding advances, money obligations or other indebtedness.

(g) Absence of Certain Developments. (x) Since December 31, 2015, there has not
been any Material Adverse Effect, and (y) since that date (or, with respect to
Section 5(g)(xii), since the Latest Balance Sheet Date), except as set forth on
Schedule 5(g) attached hereto, the Company has conducted its operations in the
ordinary course of business, and, without limiting the generality of the
foregoing:

(i) the Company has not sold, assigned, or otherwise transferred any of its
assets (including Intellectual Property) other than sales in the ordinary course
of business;

 

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(ii) the Company has not licensed any of its Intellectual Property, except for
non-exclusive grants to customers to access the Company’s Software (on a hosted
basis) in the ordinary course of business;

(iii) the Company has not terminated any agreement (or series of related
agreements) either involving more than $300,000 or outside the ordinary course
of business;

(iv) no party (including the Company) has accelerated, terminated or materially
modified (except with respect to renewals of customer contracts in the ordinary
course of business) any agreement or other arrangement (or series of related
agreements or arrangements) involving more than $300,000 to which the Company is
a party or by which the Company is bound and, to the Knowledge of the Company,
no party has informed the Company in writing of its intention to take any such
action;

(v) the Company has not suffered or imposed any material Lien (except Permitted
Liens) upon any of its assets (including any Company Intellectual Property);

(vi) the Company has not compromised any Action, right or claim (or series of
related Actions, rights or claims) involving more than $100,000;

(vii) the Company has not experienced any material damage or loss (whether or
not covered by insurance) to its property;

(viii) the Company has not entered into or terminated any employment agreement
(other than offer letters for at-will employment that do not deviate in any
material respect from the offer letter templates provided to Parent and that do
not provide for severance), collective bargaining agreement, or any similar
agreement with a labor union or labor organization, or modified the terms of any
existing such agreement;

(ix) the Company has not recorded any sales revenues pursuant to transactions in
which the purchaser of such products has the right to return such products or
services, including software-as-a-service, at a future date or has the right to
elect early termination of such services and receive a refund of service fees
paid, as applicable (other than pursuant to the terms and conditions of the
Company’s warranty terms or service level agreements entered into in the
ordinary course of business);

(x) the Company has not failed to pay and discharge current liabilities in the
ordinary course of business and consistent with the past custom and practice,
except where disputed in good faith by appropriate proceedings;

(xi) the Company has not, except in the ordinary course of business, (A) made
any change in any material respects in terms of distribution of products or
services, (B) made any change in any material respects to its pricing, discount,
allowance or return policies, (C) granted any pricing, discount, allowance or
return terms for any customer or vendor, including by modifying the manner in
which it licenses or otherwise distributes its products, including making any
material change in the proportion of fully paid-up and subscription-based
licenses granted to customers, or (D) decreased by at least $25,000 (determined
on an annual recurring revenue basis) the amount of any subscription and support
renewal fees due to the Company from the amount of such subscription and support
renewal fee payable to the business during the preceding twelve-month period;

 

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(xii) except as provided under Section 1(h), the Company has not granted any
material increase in the compensation of any of its directors, officers,
employees or other service providers;

(xiii) the Company has not adopted, amended or terminated any employee benefit
plan, program or arrangement or otherwise increased (or otherwise agreed to
materially increase) the benefits (other than sales compensation) provided to
any directors, officers, employees or other services providers;

(xiv) the Company has not conducted its cash management customs and practices
(including the collection of receivables, payment of payables, capital
expenditures and pricing and credit practices) other than in the usual and
ordinary course of business consistent with past custom and practice;

(xv) the Company has not declared, set aside or paid any dividend or distributed
cash or other property to any Equityholder with respect to its securities,
redeemed or otherwise acquired any of its securities or warrants, options or
other rights to acquire its securities, or made any other payments to any
Equityholder (other than ordinary course salary payments with respect to any
Equityholder that is an employee of the Company);

(xvi) the Company has not entered into any settlement, conciliation or similar
agreement, the performance of which will involve payment after the execution
date of this Agreement of consideration in excess of $25,000 per annum;

(xvii) the Company has not made any loan to, or entered into any other
transaction with, any of its Affiliates, directors, officers, employees or other
service providers outside the ordinary course of business and inconsistent with
past practice;

(xviii) the Company has not (i) billed for any agreement that would have been
billed after the Closing in the ordinary course of business or (ii) offered any
customer a discount or other inducement in order to accelerate billings
associated with new contracts and business;

(xix) the Company has not changed or otherwise modified any material Tax
election affecting it, adopted or changed any accounting method, entered into
any closing agreement related to material Taxes, amended any material Tax
Return, settled any material Tax claim or assessment, or consented to any
extension or waiver of the limitation period applicable to any Tax claim or
assessment; and

(xx) the Company has not committed to do any of the foregoing.

 

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(h) Absence of Undisclosed Liabilities. The Company does not have any material
Liability other than: (a) Liabilities reflected or reserved against on the face
of the Latest Balance Sheet; (b) Liabilities that have arisen since the date of
the Latest Balance Sheet in the ordinary course of business (none of which is a
Liability resulting from, arising out of, relating to, in the nature of, or
caused by any breach of contract, breach of warranty, tort, infringement,
violation of law, environmental matter, claim or lawsuit); (c) Liabilities under
agreements described on Schedule 5(n) or under agreements not required to be
disclosed thereon (but not Liabilities for breaches thereof); (d) Liabilities
set forth on Schedule 5(h); and (e) Liabilities incurred pursuant to this
Agreement or any other agreement, document, instrument or certificate entered
into or executed in connection herewith.

(i) Legal Compliance. In the last three (3) years, the Company has complied and
is in compliance in all material respects with all applicable laws, rules and
regulations applicable to the Company (including all laws related to the
protection of personal information) and has not received written notice
(including via email) of non-compliance with any such law, rule, or regulation.
The Company has complied and is in compliance with all orders, decrees or
judgments promulgated or issued by any Governmental Authority. The
representations and warranties set forth in this Section 5(i) do not apply with
respect to Taxes and any matters covered by the representations made in
Section 5(s) (Employee Benefits).

(j) Assets and Properties. The Company has good and marketable title, free and
clear of all Liens (other than (i) Liens reflected on the Latest Balance Sheet,
which Liens will be discharged as of or prior to the Closing and (ii) Permitted
Liens), to all of the properties and assets (A) reflected on the Latest Balance
Sheet or (B) used in the conduct of the Business as presently conducted, except
for leased properties and leased or licensed assets that are so used or so
necessary, which the Company leases or licenses under valid leases or licenses.
The properties and assets of the Company are in operable condition and repair in
all material respects and are usable in the ordinary course of business. The
tangible assets of the Company constitute all of the property and tangible
assets used or held for use by the Company in the conduct of the Business as
presently conducted.

(k) Real Property. The Company does not own and has never owned any interest in
any real property. Schedule 5(k) sets forth the address of each real property
leased, subleased or otherwise occupied by the Company, and a true and complete
list of all leases (including all amendments, extensions, renewals, guaranties
and other agreements with respect thereto) for each such leased real property
(“Leased Real Property”) (including the date and name of the parties to such
lease document) (the “Leases”). The Company has made available to Parent a
correct and complete copy of each such Lease document. Except as set forth on
Schedule 5(k), with respect to each of the Leases: (i) such Lease is legal,
valid, binding, enforceable and in full force and effect; (ii) the Company’s
possession and quiet enjoyment of the leased real property under such Lease has
not been disturbed, and there are no disputes with respect to such Lease;
(iii) neither the Company nor, to the Knowledge of the Company, any other party
to the Leases is in breach or default under such Lease, and no event has
occurred which, with the delivery of notice, the passage of time or both, would
constitute such a breach or default, or permit the termination, modification or
acceleration of rent under such Lease; and (iv) the Company has not subleased,
licensed or otherwise granted any Person the right to use or occupy such leased
real property or any portion thereof.

 

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(l) Tax Matters. Except as set forth on Schedule 5(1) attached hereto:

(i) The Company has timely filed (taking into account extensions of time to
file) all income and other material Tax Returns which are required to be filed
by it, and all such Tax Returns are complete and accurate in all material
respects.

(ii) The Company has paid all Taxes due (whether or not shown on any Tax
Return).

(iii) No deficiency for any amount of Tax has been asserted or assessed in
writing by a taxing authority against the Company, nor has the Company received
any written notice from a taxing authority indicating an intent to open an audit
or assessment, or any written request from a taxing authority for information
related to Tax matters.

(iv) The Company is not currently the beneficiary of any extension of time
within which to file any Tax Return.

(v) No claim has been made in writing in the last five (5) years by any taxing
authority in a jurisdiction where the Company does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction.

(vi) The Company has not waived any statute of limitations in respect of Taxes
or consented to extend the time in which any Tax may be assessed or collected by
any taxing authority, which waiver or consent is still in effect.

(vii) The Company has withheld and paid over to the appropriate taxing authority
all Taxes which it is required to withhold from amounts distributed, paid or
owing to any Equityholder, employee or other Person.

(viii) There are no, and since January 1, 2012 there have not been, any Actions
or audits or any written notices of inquiry regarding Taxes of the Company.

(ix) The Company does not have any current or contingent contractual obligation
to indemnify any other Person with respect to Taxes, and the Company is not a
party to or bound by any Tax allocation or Tax sharing agreement with any
Person, in each case other than pursuant to the customary provisions of an
agreement entered into in the ordinary course of business the primary purpose of
which is not related to Taxes, such as leases, licenses or credit agreements.

(x) The Company (A) has not been a member of an Affiliated Group (other than a
group the common parent of which was GovDelivery Holdings, Inc., GovDelivery,
Inc. or Actua) or (B) does not have any liability for the Taxes of any Person
(i) under Treas. Reg. Section 1.1502-6 (or any corresponding or similar
provision of state, local or non-U.S. law) other than with respect to a Person
which is or was a member of an Affiliated Group the common parent of which was
GovDelivery Holdings, Inc., GovDelivery, Inc. or Actua, or (ii) as a transferee
or successor, by contract, or otherwise.

 

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(xi) The Company will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) beginning after the Closing Date as a result of any (A) change
in method of accounting for a taxable period ending on or prior to the Closing
Date; (B) “closing agreement” as described in Code Section 7121 (or any
corresponding or similar provision of state, local or non-U.S. law) entered into
on or prior to the Closing Date; (C) installment sale or open transaction
disposition made on or prior to the Closing Date; (D) deferred intercompany gain
or any excess loss account described in Treasury Regulation under Code
Section 1502 (or any corresponding or similar provision of state, local or
non-U.S. law) arising on or prior to the Closing Date; (E) prepaid amount
received on or prior to the Closing Date; or (F) election under Code
Section 108(i) (or any corresponding or similar provision of state, local or
non-U.S. law) made on or prior to the Closing Date.

(xii) There are no Liens for Taxes (other than Permitted Liens) upon the assets
of the Company.

(xiii) The Company has not received any private letter ruling from the Internal
Revenue Service (or any comparable ruling from any other taxing authority).

(xiv) The Company is a tax resident in its country of formation and has not had
a permanent establishment (within the meaning of an applicable Tax treaty or
convention between its country of formation and any other country), or otherwise
been subject to taxation in any country other than the country of its formation.

(xv) The Company is not a party to any agreement, contract arrangement or plan
that has resulted or would result, separately or in the aggregate, in the
payment of any “excess parachute payment” within the meaning of Code
Section 280G (or any corresponding or similar provision of state, local or
non-U.S. law) in connection with the Merger.

(xvi) Each contract, arrangement or plan of the Company that is a “nonqualified
deferred compensation plan” (subject to Code Section 409A(d)(l)) has been
maintained in all material respects in documentary and operational compliance
with Code Section 409A and the applicable guidance issued thereunder in all
material respects.

(xvii) The Company does not have any contractual indemnity obligation for any
Taxes imposed under Section 4999 or 409A of the Code.

(xviii) Seller’s ownership of stock of the Company meets the requirements of
Section 1504(a)(2) of the Code.

(m) Intellectual Property.

(i) Schedule 5(m)(i) contains a complete and accurate list of all Registered
Intellectual Property owned by the Company. All Registered Intellectual Property
owned by the Company (other than pending applications) is subsisting, valid and
enforceable.

 

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(ii) Schedule 5(m)(ii) identifies all of the Company Products. The Company
possesses all source code and related documentation and materials, in each case,
owned by the Company and necessary compile and operate the Company Products, and
the Company has not disclosed, delivered, licensed or otherwise made available,
other than to any employees, consultants and contractors of the Company on a
confidential basis, and does not have a duty or obligation (whether present,
contingent, or otherwise) to disclose, deliver, license, or otherwise make
available, any such source code for any Company Products to any Person.

(iii) The Company exclusively owns and possesses all right, title and interest
in and to, or has a valid and enforceable written license to use, all
Intellectual Property that is used by the Company in or necessary for the
operation of the Business (collectively, the “Company Intellectual Property”) as
of the date of the Latest Balance Sheet and as of the Closing, free and clear of
all Liens. The Company Intellectual Property shall be available for use by the
Business immediately after the Closing Date on identical terms and conditions to
those under which the Business and the Company owned or used the Company
Intellectual Property immediately prior to the Closing Date.

(iv) All Persons who have contributed to the development or conception of any
Intellectual Property owned or purported to be owned by the Company, or on
behalf of the Company, or to those portions of Company Products owned by the
Company have done so pursuant to a written, valid and enforceable agreement that
protects the confidential information of the Company and grants to the Company
exclusive ownership of such development or conception.

(v) The Company is not under any obligation, whether written or otherwise, to
develop any Intellectual Property (including any elements of any Company
Products) for any third party (including any customer or end user) that would be
owned by such third party.

(vi) The operation of the Business, including the provision of services and
content and the sale or licensing of Company Products does not infringe, dilute,
misappropriate or otherwise violate the Intellectual Property of any third
party, and within the five (5) year period ending as of the date of this
Agreement, the Company has not received any notices, requests for
indemnification or threats from any third party, in each case in writing,
related to the foregoing. The Company has not requested or received any opinions
of counsel related to the foregoing.

(vii) To the Knowledge of the Company, no third party is infringing,
misappropriating, diluting or otherwise violating the Company Intellectual
Property owned by the Company.

(viii) Schedule 5(m)(viii) sets forth a list of all Open Source Software that
has been used in, incorporated into, integrated or bundled with any Company
Products, and for each such item of Open Source Software: (A) the applicable
Company Product(s); (B) the name and version number of the applicable Open
Source Software license; and (C) whether such Open Source Software component is
used “as is” or has been modified by the Company.

 

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(ix) The Company has not used and does not use any Open Source Software or any
modification or derivative thereof (A) in a manner that would grant or purport
to grant to any Person any rights to or immunities under any of the Company
Intellectual Property owned by the Company, or (B) under any license requiring
the Company to disclose or distribute the source code, owned by the Company, to
any of the Company Products, to license or provide such source code to any of
the Company Products for the purpose of making derivative works, or to make
available for redistribution to any Person such source code to any of the
Company Products at no or minimal charge.

(x) The Company is in compliance in all material respects with all obligations
under any agreement to which the Company is party or bound, pursuant to which
the Company has obtained the right to use any third party Software, including
Open Source Software, and in particular the Company has purchased a sufficient
number of seat licenses for the Business Systems for its current use thereof, as
of the date of this Agreement.

(xi) The Company has taken steps reasonable under the circumstances to maintain
and protect the secrecy, confidentiality and value of the trade secrets and
other confidential information of the Company, and the Company has not disclosed
any confidential Company Intellectual Property to any third party other than
pursuant to a written confidentiality agreement pursuant to which such third
party agrees to protect such confidential information.

(xii) There are no material defects, technical concerns or problems in any of
the Company Products that would prevent the same from performing in all material
respects in accordance with their user specifications or functionality
descriptions (collectively, “Technical Deficiencies”).

(xiii) The Company owns, leases, licenses or otherwise has the legal right to
use or have operated on its behalf, all Business Systems and such Business
Systems are sufficient for the needs of the Company’s Business as currently
conducted. The Company maintains commercially reasonable security, disaster
recovery and business continuity plans, procedures and facilities, and such
plans and procedures have been proven effective upon testing in all material
respects, and, in the last twelve (12) months, there has not been any material
failure with respect to any of the Business Systems owned by or under the
control of the Company that has not been remedied or replaced in all material
respects.

(xiv) The Company has taken commercially reasonable actions to protect the
security and integrity of the Business Systems and the data stored or contained
therein or transmitted thereby, including by implementing industry standard
procedures designed to prevent unauthorized access and the introduction of any
virus, worm, Trojan horse or similar disabling code or program (“Malicious
Code”), and the taking and storing of back-up copies of critical data.

(xv) To the Knowledge of the Company, there is no Malicious Code in any of the
Company Products or the Business Systems owned by or under the control of the
Company, and, as of the date of this Agreement, the Company has not received any
written complaints from any customers related to any Malicious Code or Technical
Deficiencies.

 

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(xvi) The Company and the conduct of the Business are in compliance with, and
have been in compliance, in all material respects, with all Data Security
Requirements. Within the five (5)-year period ending as of the date of this
Agreement, no notices have been received by, and no Actions have been made
against, the Company by any Governmental Authority or other Person alleging a
violation of any Data Security Requirements. There have not been any actual or
alleged incidents of data security breaches or, unauthorized access or use of
any of the Business Systems under the control of the Company, or unauthorized
acquisition, destruction, damage, disclosure, loss, corruption, alteration, or
use of any Business Data. The transactions contemplated by this Agreement will
not result in any liabilities in connection with any Data Security Requirements.

(xvii) No Company Products or Intellectual Property owned or purported to be
owned by the Company or its Subsidiaries, is based upon, uses, or incorporates
any Intellectual Property that was developed using funding provided by any
Governmental Authority, nor does any Governmental Authority have any ownership
interest in or right to restrict the sale, licensing, distribution or transfer
of any Company Products or Intellectual Property owned or purported to be owned
by the Company or its Subsidiaries.

(n) Contracts and Commitments. Except as set forth on Schedule 5(n) attached
hereto, the Company is not a party to or bound by any currently-effective
contracts of the following types:

(i) employment agreement, consulting agreement or offer letter (other than offer
letters for at-will employment that do not deviate in any material respect from
the offer letter templates provided to Parent and that do not provide for
severance), as applicable, and each agreement providing for severance or loans
to officers, directors, employees or Affiliates, other than advances in the
ordinary course of business;

(ii) guarantee of any Liability or obligation of a third party;

(iii) agreement under which it is lessee of or holds or operates any personal
property owned by any other party, except for any lease of personal property
under which the aggregate annual rental payments do not exceed $50,000;

(iv) agreement under which it is a licensee of or is otherwise granted by a
third party any rights to use any Intellectual Property (other than
non-exclusive licenses of (or agreements to provide Software on a nonexclusive,
hosted basis) commercially-available Software used solely for the Company’s
internal use with a total replacement cost of less than $50,000);

(v) agreement under which it is a licensor or otherwise grants to a third party
any rights to use any Intellectual Property (other than the Company’s Software
licensed or provided on a hosted basis to customers on a non-exclusive basis in
the ordinary course of business);

(vi) (A) joint venture agreement, partnership agreement, or similar agreement,
or (B) joint development or collaboration agreement entered into other than in
the ordinary course of business;

 

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(vii) agreement under which it is lessor of or permits any third party to hold
or operate any material personal property owned or controlled by it;

(viii) collective bargaining agreement or other agreement with any labor union
or labor organization;

(ix) settlement, conciliation or similar agreement entered into in the last
three (3) years;

(x) agreement pursuant to which the Company is granted a lease in, a sublease
in, or the right to use or occupy any land or building;

(xi) agreement or group of related agreements with the same party that (A) is
not a contract between the Company and a customer of the Company and
(B) involves consideration in excess of $250,000 in any calendar year;

(xii) agreement prohibiting the Company or the Business from competing with any
third party in any line of business or any geographic area (including personnel
non-solicitation provisions) or otherwise including provisions on joint
price-fixing, market or customer sharing, exclusivity or market classification;

(xiii) agreement providing for (A) marketing of the Company or any Company
Product or (B) the distribution of, or referrals of sales with respect to any
Company Product, and in each case, involving the payment by the Company of
consideration in excess of $100,000 in any calendar year;

(xiv) agreement for the development of Intellectual Property for the benefit of
the Company;

(xv) agreement providing for co-location or software hosting, data hosting or
infrastructure hosting services to the Company;

(xvi) all agreements with the Significant Customers; or

(xvii) (A) agreement containing an agreement by the Company to provide any
Person with access to the source code (other than Open Source Software) for any
Company Products (other than source code escrow commitments entered into in the
ordinary course of business for which the sole conditions that could trigger the
release of such source code are either the bankruptcy or insolvency of the
Company or the Company’s failure to satisfy its subscription and support
obligations for such Company Product), or (B) any contract between the Company
and an escrow agent to provide for the source code for any Company Products to
be put in escrow.

Except as specifically disclosed on Schedule 5(n), the Company has performed in
all material respects all obligations required to be performed by it and is not
in default under or in breach in any material respect of nor in receipt of any
written claim of default or breach in any material respect under any agreement
required to be referenced in Section 5(n), and no event has occurred, which with
the delivery of notice, the passage of time or both, would constitute such a

 

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default or breach in any material respect or event of noncompliance under any
such agreement. To the Knowledge of the Company, the other party to each
agreement has performed in all material respects all obligations required to be
performed by it under such agreement. Each such agreement was awarded to and is
held in the name of the Company and is legal, valid, binding and enforceable
against the Company and, to the Knowledge of the Company, against any other
party to such contract, agreement or arrangement, subject to the Enforceability
Exceptions. The Company has made available a correct and complete copy of each
of the contracts which are referred to on Schedule 5(n), together with all
amendments, waivers or other changes thereto.

(o) Government Contracts. The Company has established and maintains adequate
internal controls for compliance with all Government Contracts, and all invoices
submitted by the Company pursuant to any Government Contract were current,
accurate and complete in all material respects upon submission. Except as set
forth in Schedule 5(o), the Company has not (i) been suspended or debarred from
government contracts by any Governmental Authority; (ii) been audited or
investigated by any Governmental Authority with respect to any Government
Contract; (iii) conducted or initiated any internal investigation or made a
voluntary or mandatory disclosure to any Governmental Authority or other Person
with respect to any alleged or potential irregularity, misstatement or omission
arising under or relating to a Government Contract; (iv) received from any
Governmental Authority any notice of breach, cure, show cause or default with
respect to any Government Contract; or (v) had any Government Contract
terminated by any Governmental Authority for default or failure to perform.

(p) Insurance. Schedule 5(p) attached hereto lists and briefly describes each
insurance policy currently maintained by the Company with respect to the
Business. All premiums due and payable under each such policy have been paid,
all of such policies are legal, valid, binding and enforceable and in full force
and effect and the Company is not nor has ever been in breach or default with
respect to its obligations under such policies. There has been no threatened
termination of, or premium increase with respect to, any such policies. There
are no claims by the Company pending under any such policies as to which
coverage has been denied by the underwriters thereof. Since December 31, 2013,
the Company has not had a claim which could reasonably be expected to cause a
material increase in the rates of insurance for the Business. Set forth on
Schedule 5(p) are all insurance claims in excess of $100,000 made under such
policies since December 31, 2013.

(q) Litigation. Except as set forth on Schedule 5(q) attached hereto, there are
no Actions pending or, to the Knowledge of the Company, threatened in writing
against or affecting the Company, or before or by any Governmental Authority.
The Company is not subject to any outstanding injunction, fine, judgment, order,
or decree of any Governmental Authority. Notwithstanding the foregoing, the
representations in this Section 5(q) shall not be applicable with respect to any
Plan, as such is addressed in Section 5(s)(ii), or with respect to Taxes.

 

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(r) Employees.

(i) To the Knowledge of the Company, except as set forth on Schedule 5(r)(i), no
executive, key employee or group of employees of the Company (A) intends, either
on or prior to the Closing Date or within three (3) months after the Closing
Date, to terminate his, her or their employment with the Company in connection
with the transactions contemplated hereby (in each case, other than a
termination by such executive, key employee or group of employee directly as a
result of the post-Closing employment terms offered by Parent or any of its
Affiliates with respect to base salary, base wages and bonus and commission
opportunities (other than equity based arrangements) that are not, in the
aggregate, at a minimum, substantially comparable to the base salary, base wages
and bonus and commission opportunities (other than equity based arrangements in
effect immediately prior to Closing) or (B) is a party to any confidentiality,
noncompetition, proprietary rights or other such agreement between such employee
and any other Person besides the Company that would be material to the
performance of such employee’s employment duties, or the ability of the Company
to conduct its business.

(ii) Except as set forth on Schedule 5(r)(ii), with respect to the Company:
(A) there are no collective bargaining agreements, collective bargaining
relationships, or any other similar agreements with any labor union or labor
organization; (B) no labor organization or group of employees has filed any
representation petition or made any written or oral demand for recognition, nor
has any such labor organization or group of employees filed such a petition or
made such a demand in the last five (5) years; (C) no union organizing or
decertification activities are underway or threatened and no such activities
have occurred within the past five (5) years, and no other question concerning
representation exists; (D) there are no material labor relations disputes
(including any past, current or threatened strikes, work stoppages, slowdowns,
lockouts, or other material labor disputes) and no such disputes have occurred
in the past three (3) years; (E) there are no workers’ compensation liabilities,
experiences or matters arising outside of the ordinary course of business;
(F) there are no unfair labor practice charges or complaints pending or, to the
Knowledge of the Company, threatened against the Company and no such charges or
complaints have been filed against the Company in the past three (3) years; and
(G) there are no material employment-related Actions or obligations of any kind,
pending or, to the Knowledge of the Company, threatened in any forum, relating
to an alleged violation or breach by the Company (or their officers or
directors) of any law, regulation or contract, and no such Actions have been
filed or obligations arisen against the Company in the past three (3) years.

(iii) There is no Liability to make any outstanding payment to any director,
officer, employee or independent contractor, or to any former director, officer,
employee or independent contractor by way of damages or compensation for loss of
office or employment or engagement, or for termination or unfair or wrongful
dismissal or for other grounds, and other than by the terms of an employment
agreement between the Company and an employee of the Company, the Company does
not have any obligation to employ or re-employ any person, including any former
employee of the Company. The Company is not delinquent in the payment of any
wages, salaries, bonuses, commissions, wage premiums, or any other compensation
that has become due and payable to its employees, independent contractors, or
other service providers pursuant to any law, contract, or employment policy.

 

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(iv) Except as set forth on Schedule 5(r)(iv), the consummation of the
transactions contemplated by this Agreement will not (A) entitle any employee of
the Company to severance pay, unemployment compensation, bonus payment or any
other payment, (B) except as provided under Section 1(h), accelerate the time of
payment for vesting of, or increase the amount of compensation due to, any such
employee, or (C) entitle any such employee to terminate, shorten or otherwise
change the terms of his or her employment.

(v) The Company is in compliance, and for the past three (3) years has complied,
in all material respects with all applicable laws relating to the employment of
labor, including provisions thereof relating to wages, hours, equal opportunity,
affirmative action, nondiscrimination, harassment, retaliation, equal pay,
workers compensation, collective bargaining, immigration, vacation pay and
accrual, and workplace safety. The Company has properly classified each person
in all material respects who has performed services for the Company as an
overtime exempt or non-exempt employee or as an independent contractor, and the
Company has no material liability or obligations under any applicable law
arising out of the classification of any Person who provides or has provided
services to the Company, including but not limited to wages, taxes, penalties,
social security, workers compensation, benefit plans or otherwise, as a result
of any failure to properly classify any such Person.

(vi) The Company has made available to the Parent on September 19, 2016 a
complete and accurate list (titled “Contractor Census with respect to all
independent contractors and “Employee Census” with respect to all other service
providers) containing the name of each current director, officer and employee of
the Company and each Person who primarily performs services for the Business who
is not employed by the Company, together with each such Person’s position or
function, annual base salary, any non-standard employee benefit, and any
incentive or bonus arrangement with respect to such person.

(vii) The Company has no outstanding liability under the WARN Act, with respect
to employee layoffs implemented in the last three (3) years. Schedule 5(r)(vii)
sets forth by date and location any employees terminated within the ninety
(90) days preceding the Closing.

(s) Employee Benefits.

(i) Schedule 5(s)(i) contains an accurate and complete list of each Employee
Benefit Plan maintained or contributed to or sponsored by the Company or with
respect to which Company has any Liability or potential Liability (individually
referred to herein as a “Plan” and collectively, the “Plans”). No Plan is or
ever was subject to Title IV of ERISA or to the funding requirements of
Section 412 of the Code or Section 302 of ERISA. The Company has no obligation
to contribute to or any Liability or potential Liability (including actual or
potential withdrawal Liability) with respect to any “multiemployer pension plan”
(as defined in Section 3(37) of ERISA), any defined benefit pension plan or any
employee benefit plan subject to Title IV of ERISA or of the type described in
Section 4063 or 4064 of ERISA or in Section 413(c) of the Code.

(ii) With respect to each of the Plans, all required contributions, payments and
accruals have been made on a timely basis and in accordance with the terms of
such Plans and applicable laws or, to the extent not yet due, properly accrued
for on the books and records of the Company and there is no unfunded Liability
related to Plans which is not taken into account in determining Working Capital.
No Action, claims, audits, or investigations with respect to the Plans (other
than routine claims for benefits) are pending or, to the Knowledge of the
Company, threatened.

 

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(iii) No Plan provides (or could require the Company to provide) post-employment
medical, dental, life or other welfare benefits other than (A) payment of
accrued and unused vacation or paid time off upon termination of employment,
(B) fully insured long-term disability benefits or (C) coverage mandated by
Section 4980B of the Code or other applicable state continuation coverage law
for which the covered individual pays the full cost of coverage.

(iv) Each Plan (and any predecessor plans that have been merged into such Plan)
has been funded, administered and maintained, in form and operation in
compliance in all material respects with its terms and all applicable laws and
regulations, including, but not limited to, ERISA and the Code. Each Plan that
is intended to meet the requirements of a “qualified plan” under Section 401(a)
of the Code has received a favorable determination letter from the Internal
Revenue Service to the effect that such Plan meets the requirements of Code
Section 401(a), and, to the Knowledge of the Company, nothing has occurred that
could adversely affect the qualification of any Plan that is intended to qualify
under Section 401 of the Code.

(v) The Company has made available to Parent (A) a current, accurate and
complete copy (or, to the extent no such copy exists, an accurate description of
all material terms) of each Plan and any related trust agreement or other
funding instrument; (B) the most recent IRS determination letter, if applicable;
(C) any summary plan description and other material written communication (or a
description of any material oral communications) by the Company to its employees
concerning the benefits provided under the Plan; and (D) the most recent
financial statements, trustee annual report and annual report (a Form 5500
annual report) (including attached schedules).

(vi) Other than as disclosed in Schedule 5(r)(vii) or as set forth in
Section 1(f) or Section 1(h) of this Agreement, the consummation of the
transactions contemplated by this Agreement will not accelerate the time of the
payment, funding or vesting of, or increase the amount of, or result in the
forfeiture of compensation or benefits under any Plan.

(t) Customers, Suppliers and Resellers.

(i) Schedule 5(t)(i)(A) attached hereto sets forth an accurate list of the
thirty (30) largest customers (with a customer including any direct or indirect
contract signed between the Company and that customer, including parent level
buying entities) of the Company based on the annual recurring subscription
revenue of each such customer for the most recent fiscal year and for the
trailing seven (7)-month period ending on the Latest Balance Sheet Date
(“Significant Customers”), along with the dollar amounts of annual recurring
subscription revenue generated from each such Significant Customer for such
periods. Schedule 5(t)(i)(B) attached hereto contains an accurate list of the
ten (10) largest vendors or service providers of the Company, as measured by the
dollar amounts of purchases therefrom for the trailing seven (7)-month period
ending on the Latest Balance Sheet Date and for the most recent fiscal year and
shows such measured amounts for such periods. Schedule 5(t)(i)(C) attached
hereto sets forth an

 

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accurate list of all of the resellers of the Company Products who have resold in
excess of $100,000 of Company Products for the most recent fiscal year and for
the annualized amount for trailing seven (7)-month period ending on the Latest
Balance Sheet Date (each, a “Significant Reseller”).

(ii) Except as set forth on Schedule 5(t)(ii), (A) no Significant Customer or
Significant Reseller has indicated in writing (including by email) that it shall
(1) stop purchasing or reselling, as applicable, or decrease the volume of
purchases or resales, as applicable, of materials, products or services from the
Company by more than $25,000 per year or (2) seek to (x) purchase or resell the
products and services provided by the Company from any other supplier or vendor
not currently providing such products and services to such customer or through
such reseller, as applicable, or (y) convert any exclusive or single-source
purchasing or reselling arrangement or relationship between such customer or
reseller, as applicable, and the Company into a non-exclusive or multi-source
arrangement or relationship, and (B) none of the vendors listed on Schedule
5(t)(i)(B) has indicated in writing that it shall stop, or significantly
decrease the rate of, supplying, materials, products or services to the Company,
other than in accordance with material, product or service lifecycle changes and
similar changes to its business that do not prejudicially affect the Company.

(iii) Copies of the Company’s current forms of written agreements entered into
between the Company and any of the customers of the Company have been made
available to Parent. Schedule 5(t)(iii) sets forth a list of each customer of
the Company who has entered into an agreement containing terms that are
materially different from those reflected in one of the standard form agreements
that have been made available to Parent. The Company has made available to
Parent a copy of each of the Company’s written agreements (and in the case of
binding oral agreements, a written summary of such agreement) with the
Significant Customers and the customers listed on Schedule 5(t)(iii).

(iv) A detailed backlog of the Company’s customer engagements as of August 31,
2016 that are expected to require at least forty (40) hours of professional
services (other than solely with respect to contractually recurring digital
engagement services) complete is set forth on Schedule 5(t)(iv) (each such
customer engagement, a “Backlog Customer Engagement”), reflecting for each
Backlog Customer Engagement (A) the name of the customer, (B) the date of the
contract between the customer and the Company, (C) the anticipated start date
for implementation of the customer engagement, (D) the total budgeted number of
hours required to complete the customer engagement, (E) a description of such
customer engagement as either “new customer,” “expansion or upgrade” or “other”
and (F) the annual contract value excluding setup and implementation fees of the
customer in question.

(v) Except as set forth on Schedule 5(t)(v) (each, a “Failed Implementation,”
and, collectively, the “Failed Implementations”), no customer engagement with
such customer having an annual contract value of $30,000 or greater since
January 1, 2014 has materially failed to be implemented on the contractual terms
agreed to by the Company and such customer, except where such has been remedied
in all material respects. Schedule 5(t)(v) sets forth for each Failed
Implementation, the (A) name of the customer, (B) the date of the applicable
contract between such customer and the Company, (C) the applicable anticipated
start date, and (D) the date of such failure to implement, (E) the decrease in
one-time or annual recurring contract value directly attributable thereto and
(F) the annual contract value for the first year of such contract (less any
payments made for subscription fees and less any settlement amount attributable
to subscription fees) if the implementation had been successful.

 

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(vi) The Company does not receive or hold, directly or indirectly (excluding for
the avoidance of doubt deferred revenue held by the Company in connection with
contracts with Company customers), any funds on behalf of any Company customer.

(u) Affiliate Interests. Except as set forth on Schedule 5(u) attached hereto,
no officer, director, Equityholder or Affiliate of the Company or any immediate
family member of such an officer, director, Equityholder or Affiliate has any
agreement with the Company or any ownership or financial interest in any
property (real, personal or mixed, tangible or intangible) used in or pertaining
to the Business, except (i) employment relationships or relationships in a
person’s capacity as a director or officer of the Company, (ii) the payment of
compensation and benefits in the ordinary course of business or (iii) any
agreement related to the ownership of any Company Capital Stock, Options or
Non-Participating Options.

(v) Governmental Permits. Schedule 5(v) sets forth a list and brief description
of each material permit, license, approval, certificate, registration,
accreditation, and other authorization (collectively, “Permits”) obtained from
any Governmental Authority held by the Company. The Company has fulfilled and
performed in all material respects its obligations under each such Permit and no
event has occurred which, with the delivery of notice, the passage of time or
both, would constitute a material breach or default under any such Permit. There
is no proceeding pending or threatened to revoke, modify or otherwise fail to
renew any such Permit.

(w) Product Warranty. Each Company Product and service provided by the Company
has been provided in material conformity with all applicable contractual
commitments by which the Company is bound, and all express warranties by which
the Company is bound, and the Company does not have any material Liability for
replacement or repair thereof, other than Liabilities for which reserves have
been established as set forth in the Latest Balance Sheet and, if applicable,
the notes thereto.

(x) Environmental Matters.

(i) The Company is and has been in compliance in all material respects with all
Environmental, Health and Safety Laws. The Company has not received any written
notice or report regarding any material violation of, or material Liability
under, any Environmental, Health and Safety Laws. The Company (nor any Person
whose Liability the Company has assumed, undertaken or become subject to) has
not treated, stored, manufactured, transported, handled, disposed, arranged for
or permitted the disposal of, exposed any Person to, or released any toxic or
hazardous substance, material or waste, or owned or operated any facility or
property that is or has been contaminated by any such substance, material or
waste, so as to give rise to any material Liability pursuant to any
Environmental, Health and Safety Law. The Company (nor any Person whose
Liability the Company has assumed, undertaken or become subject to) has no
material Liability with respect to the presence of asbestos or other toxic or
hazardous substances, materials or wastes in any product, item, property,
building or other structure.

 

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(ii) The Company has made available to Parent all material environmental, health
or safety reports, audits, documents, or assessments in its possession or
control relating to the Company or its facilities or operations.

(y) Sanctions, Import and Export Controls.

(i) The Company is and since January 1, 2012, has been in compliance with:
(A) all applicable sanctions laws, including the U.S. economic sanctions laws
administered by the U.S. Department of the Treasury, Office of Foreign Assets
Control (“OFAC”); (B) all applicable export control laws, including the Export
Administration Regulations administered by the U.S. Department of Commerce
(“Commerce”); and (C) the anti-boycott regulations administered by Commerce and
the U.S. Department of the Treasury (collectively, the “Customs & International
Trade Laws”), related to the regulation of exports, re-exports, transfers,
releases, shipments, transmissions, imports or similar transfer of goods,
technology, software or services, or any other transactions or business
dealings, by or on behalf of the Company. Without limiting the foregoing, the
Company has not submitted any disclosures nor received any notice that it is
subject to any civil or criminal investigation, proceeding, audit or any other
inquiry, or has conducted any internal investigation concerning, or is aware of
any allegation involving or otherwise relating to, any alleged or actual
violation of the Customs & International Trade Laws.

(ii) None of the Company nor any of its directors, officers, or employees, nor
any agent, distributor, reseller or, to the Knowledge of the Company, any other
Person acting for, at the direction, or on behalf of any of them has been or is
designated on, or is owned or controlled by any Person that has been or is
designated on, any list of restricted parties maintained by any applicable
Governmental Authority, including OFAC’s Specially Designated Nationals and
Blocked Persons List, Foreign Sanctions Evaders List, and Sectoral Sanctions
Identifications List, and Commerce’s Denied Persons and Entity Lists. There is
no pending or, to the Knowledge of the Company, threatened Action pending
against or investigation by a Governmental Authority of, the Company, nor is
there any order imposed (or, to the Knowledge of the Company, threatened to be
imposed) upon the Company by or before any Governmental Authority, in each case,
in connection with an alleged violation of any applicable export control laws,
including applicable regulations of the U.S. Department of Commerce, the U.S.
Department of State and OF AC.

(iii) Schedule 5(y)(iii) sets forth a list of all of licenses, agreements or
authorizations issued related to Customs & International Trade Laws.

(z) Anti-Corruption.

(i) Since January 1, 2013, the Company, and, while acting for or on its behalf,
each of the Company’s officers, directors and employees (the “Company Relevant
Persons”) have not, and to the Knowledge of the Company, agents, distributors,
or sub-distributors of the Company or other Persons, while acting for or on
behalf of the Company (the “Other Relevant Persons”) have not, directly or
indirectly, violated any provision of the U.S. Foreign Corrupt Practices Act of
1977 (as amended), the UK Bribery Act 2010 or any other anti-corruption or
anti-bribery law (collectively, the “Anti-Corruption Laws”) to the extent
applicable to the Company’s operations.

 

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(ii) The Company, the other Company Relevant Persons and, to the Knowledge of
the Company, the Other Relevant Persons have not, directly or indirectly made
any offer, payment, promise to pay, gift, bribe, rebate, loan, payoff, kickback
or any other transfer of value to any Person for the purpose of inducing such
Person to do any act or make any decision in an official capacity, including a
decision to fail to perform an official function, or use his or her or its
influence with a Governmental Authority in order to affect any act or decision
of such Governmental Authority for the purpose of assisting any Person to obtain
or retain any business, or to facilitate efforts of any Person to transact
business or for any other improper purpose (e.g., to obtain a tax rate lower
than allowed by law) in each case in violation of applicable Anti-Corruption
Laws.

(iii) To the Knowledge of the Company, there is no current investigation,
allegation, request for information, or other inquiry by any Governmental
Authority regarding the actual or possible violation of the Anti-Corruption Laws
by the Company and since January 1, 2013, the Company has not received any
written notice that there is any investigation, allegation, request for
information, or other inquiry by any Governmental Authority regarding an actual
or possible violation of the Anti-Corruption Laws.

Section 6. Representations and Warranties of Parent and Merger Sub. As a
material inducement to the Company to enter into and perform its obligations
under this Agreement, as of the date hereof and as of the Closing (unless made
as of a specific date), Parent and Merger Sub represent and warrant to the
Company as follows:

(a) Organization. Each of Parent and Merger Sub (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted and (iii) is qualified to do business and is in good standing in every
jurisdiction where such qualification is required, except where the failure so
to qualify or be in good standing would not reasonably be expected to result in
a Material Adverse Effect on Parent or Merger Sub.

(b) Authorization of the Transaction. Each of Parent and Merger Sub has full
power and authority to execute and deliver this Agreement and to perform each of
their obligations hereunder. This Agreement constitutes the valid and
legally-binding obligation of each of Parent and Merger Sub, enforceable in
accordance with its terms and conditions.

(c) Noncontravention. Neither the execution and the delivery of this Agreement
and each other agreement, document, instrument or certificate contemplated
hereby to which Parent is a party, nor the consummation of the transactions
contemplated hereby or thereby, shall (i) violate any law or other restriction
to which Parent or Merger Sub is subject in any material respect, (ii) violate
any provision of its organizational documents or (iii) result in a breach or
acceleration of, or create in any party the right to accelerate, terminate,
modify, or require any notice under any agreement, or other arrangement by which
it is bound or to which any of its assets are subject, except, in the case of
clause (iii), for such breaches, accelerations,

 

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terminations or modifications as would not be, or reasonably be expected to be
material to Parent or Merger Sub. Neither Parent nor Merger Sub is required to
give any notice to, make any filing with, or obtain any authorization, consent
or approval of any Governmental Authority in order for the Parties to consummate
the transactions contemplated by this Agreement, except for necessary filings
under the HSR Act. There are no Actions pending or threatened against or
affecting Parent or Merger Sub at law or in equity, or before any Governmental
Authority, which would adversely affect Parent’s or Merger Sub’s performance
under this Agreement or the consummation of the transactions contemplated by
this Agreement.

(d) Brokers’ Fees. Neither Parent nor Merger Sub has an obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.

(e) Financing. Concurrently with the execution of this Agreement, Parent has
provided to the Company a true and complete copy of the executed equity
commitment letter (the “Equity Financing Commitment”), by and between Parent and
Vista Foundation Fund III, L.P. (“Sponsor”), pursuant to which Sponsor has
committed that Sponsor or certain of its Affiliates will provide equity
financing in the amount set forth therein for the purpose of funding payment of
the Initial Merger Consideration and such other payment obligations of Parent
set forth in Section 1 of this Agreement, subject to the terms and conditions
set forth therein and in this Agreement (the “Equity Financing”). The Company
and the Equityholders’ Representative (on behalf of each of the Equityholders)
are express third-party beneficiaries of the Equity Financing Commitment. The
Equity Financing Commitment has not been amended or modified prior to the date
of this Agreement, and as of the date hereof (x) no such amendment or
modification is contemplated and (y) the commitment contained in the Equity
Financing Commitment has not been withdrawn, terminated or rescinded in any
respect. As of the date of this Agreement, there are no side letters or other
agreements, contracts or arrangements related to the Equity Financing which
expand conditions precedent, other than as set forth in the Equity Financing
Commitment delivered to the Company prior to the execution of this Agreement. As
of the date hereof, the Equity Financing Commitment (i) is in full force and
effect and (ii) is a legal, valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms, subject to the Enforceability
Exceptions, and there are no conditions precedent related to the funding of the
full amount of the Equity Financing, other than as expressly set forth in this
Agreement and in the Equity Financing Commitment. As of the date hereof, no
event has occurred which, with or without notice, lapse of time or both, would
constitute a default or breach on the part of Parent or, to the knowledge of
Parent, any other party thereto under the Equity Financing Commitment. Assuming
satisfaction of the conditions set forth in Section 2 of this Agreement and
based upon facts and events known to Parent on the date hereof, Parent has no
reason to believe, as of the date hereof, that any of the conditions to the
funding of the Equity Financing required to be satisfied by it will not be
satisfied by the time it is required to consummate the Closing hereunder.
Assuming satisfaction of the conditions set forth in Section 2 of this Agreement
and based upon facts and events known to Parent on the date hereof, the funds
provided pursuant to the Equity Financing Commitment, if funded in accordance
with the terms and conditions of the Equity Financing Commitment, will be
sufficient for Parent to have at the Closing funds sufficient to (A) pay the
Initial Merger Consideration and such other payment obligations of Parent set
forth in Section 1 of this Agreement, (B) pay any and all fees and expenses
required to be paid by Parent in connection with the transactions contemplated
by

 

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this Agreement and (C) satisfy all of the other payment obligations of Parent
contemplated hereunder that are required to be satisfied in connection with the
Closing. Concurrently with the execution of this Agreement, Sponsor has duly
executed and delivered to the Company the limited guarantee by Sponsor, dated as
of the date of this Agreement, in favor of the Company (the “Limited
Guarantee”). As of the date hereof, the Limited Guarantee (1) is in full force
and effect and (2) is a legal, valid and binding obligation of Sponsor,
enforceable against Sponsor in accordance with its terms, subject to
Enforceability Exceptions. As of the date hereof, (x) there is no default under
the Limited Guarantee by Sponsor and (y) no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
thereunder by Sponsor.

(f) Merger Sub. Merger Sub is a direct, wholly owned Subsidiary of Parent formed
for the purposes of engaging in the transactions contemplated hereby, including
effecting the Merger. There is no agreement outstanding pursuant to which any
Person (other than Parent) has any existing or contingent right to acquire any
stock of Merger Sub. Merger Sub has conducted no activities other than those
necessary or appropriate to effectuate the Merger and the transactions
contemplated hereby.

Section 7. Termination.

(a) Termination. This Agreement may be terminated and the Merger contemplated
hereby may be abandoned, notwithstanding any Written Consent, at any time prior
to the Closing only as follows:

(i) by mutual written consent of each of the Parties;

(ii) by either Parent, on the one hand, or the Company, on the other hand, in
either case if there has been a breach of a representation or warranty where
such breach would result in the failure of any of the conditions set forth in
Section 2(a) or Section 3(a), as applicable, or breach of a covenant by the
Company (in the case of termination by Parent) or by Parent or Merger Sub (in
the case of termination by the Company) of such Party to be complied with or
satisfied by it hereunder where such breach would result in the failure of any
of the conditions set forth in Section 2(b) or Section 3(b), as applicable (so
long as the Party seeking to terminate this Agreement has provided written
notice of such breach and such breach has continued without cure for twenty
(20) days after the notice of such breach has been delivered);

(iii) by either Parent, on the one hand, or the Company, on the other hand, in
either case by delivery of written notice of termination to the other Party
prior to the Closing, if the transactions contemplated hereby have not been
consummated by December 31, 2016 (the “Termination Date”); or

(iv) by Parent providing written notice to the Equityholders’ Representative, if
the Company does not deliver the Written Consent or the Joinder Agreement, in
each case executed by the Significant Equityholders, to Parent within 24 hours
following the execution of this Agreement;

provided, however, that no Party shall be entitled to terminate this Agreement
pursuant to this Section 7(a) if (A) that Party’s breach of this Agreement has
prevented the consummation of the transactions contemplated hereby at or prior
to such time or (B) that Party has failed to satisfy any condition set forth in
Section 2 or Section 3, as applicable, that such Party was required to satisfy
prior to the Closing.

 

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(b) Effect of Termination. In the event of termination of this Agreement as
provided in Section 7(a) hereof, this Agreement will forthwith become void and
there will be no liability or obligation hereunder on the part of either the
Parent or the Company or any of their respective Affiliates, except for the
provisions of this Section 7, Section 9(b), Section 9(e), and Section 10 hereof
(all of which will survive any such termination) and except as provided in the
following sentence. If this Agreement is terminated other than pursuant to
Section 7(a), such termination will not affect any right or remedy which accrued
hereunder or under applicable laws prior to or on account of such termination,
and the provisions of this Agreement shall survive such termination to the
extent required so that each Party may enforce all rights and remedies available
to such Party hereunder or under applicable laws in respect of such termination
and so that any Party responsible for any breach or nonperformance of its
obligations hereunder prior to termination shall remain liable for the
consequences thereof.

(c) Waiver of Rights. Each Party shall be deemed to have waived its rights to
terminate this Agreement upon consummation of the transactions contemplated
hereby. No such waiver shall constitute a waiver of any other rights arising
from the non-fulfillment of any condition precedent set forth in Section 2 or
Section 3 hereof or any misrepresentation or breach of any warranty, covenant or
agreement contained herein unless such waiver is made in writing; any such
written waiver shall constitute a waiver only of the specific matters set forth
therein.

Section 8. Indemnification.

(a) Survival. All of the representations, warranties, covenants and agreements
set forth in this Agreement or in any certificate or other agreement or writing
delivered in connection with this Agreement shall survive the Closing and the
consummation of the transactions contemplated hereby (regardless of any
investigation by or on behalf of the damaged Party or the acceptance of any
certificate) and shall continue in full force and effect as further set forth in
this Section 8(a). Notwithstanding the foregoing or anything to the contrary
contained herein, no Party shall be entitled to recover for any Loss (as defined
below) arising from or as a result of a breach of representations and warranties
set forth in Sections 5 or 6, unless written notice thereof is delivered to the
other Party or Parties, as applicable, on or prior to the Applicable Limitation
Date. For purposes of this Agreement, the term “Applicable Limitation Date”
shall be the date that is twelve (12) months following the Closing Date;
provided that the Applicable Limitation Date with respect to the following
Losses shall be: (i) with respect to any Loss arising from or as a result of a
breach of the representations and warranties of the Company set forth in
Sections 5(a) (Organization; Capitalization), 5(b) (Authorization of the
Transaction), 5(c)(i) and 5(c)(ii) (Noncontravention), 5(d) (Brokers’ Fees),
5(e) (Subsidiaries and Investments) and 5(u) (Affiliate Interests), the
Applicable Limitation Date shall be the third (3rd) anniversary of the Closing
Date; (ii) with respect to any Loss arising from or as result of a breach of the
representations and warranties of the Company set forth in Sections 5(1) (Tax
Matters), the Applicable Limitation Date shall be the date which is the earlier
of (x) thirty (30) days following the expiration of the statute of limitations
applicable to the particular Tax matters at issue and (y) the seventh
(7th) anniversary of the Closing Date and (iii) with respect to any Loss arising
from or as a result of a breach of the representations and warranties of Parent
set forth in Sections 6(a)

 

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(Organization), 6(b) (Authorization of the Transaction), 6(c)(ii)
(Noncontravention) and 6(d) (Brokers’ Fees), the Applicable Limitation Date
shall be the fifth (5th) anniversary of the Closing Date. The Applicable
Limitation Date with respect to all covenants and agreements contained herein
shall be the date that is ninety (90) days after the Closing Date, except for
those covenants and agreements which by their terms contemplate actions
following the Closing, in which such case, the Applicable Limitation Date shall
be the date that is ninety (90) days after the date on which such actions were
to be taken. Notwithstanding anything in this Section 8(a) to the contrary, in
the event that (1) any breach of any representation or warranty by the Company
constitutes fraud or willful misconduct, or (2) any breach of any representation
or warranty by Parent or Merger Sub constitutes fraud or willful misconduct,
such representation or warranty shall survive the Closing and the consummation
of the transactions contemplated hereby (regardless of any investigation by or
on behalf of the damaged party or the acceptance of any certificate) and shall
continue in full force and effect without any time limitation with respect to
such breach.

(b) Indemnification.

(i) From and after the Effective Time, each of the Equityholders (each, a
“Responsible Person”), severally (and not jointly), pro rata based upon each
such Responsible Person’s Pro Rata Share, shall indemnify and hold harmless
Parent and its officers, directors, shareholders, employees and Affiliates
(including, after the Effective Time, the Surviving Corporation) (collectively,
as the case may be, the “Parent Group”), against any loss, Liability,
deficiency, Tax, damage, fine, penalty or expense (excluding punitive and
exemplary damages, unless, in each such case, such damages are incurred as a
result of a third party claim, but including reasonable out-of-pocket legal
expenses and costs, including costs of investigation, and to the extent
reasonably foreseeable, indirect and consequential damages) (each, a “Loss”),
which they suffer, sustain or become subject to as the result of (A) the breach
by the Company of any representation, warranty, covenant or agreement contained
in this Agreement or any certificate delivered by or on behalf of the Company at
or prior to the Closing, (B) the breach by the Company of any covenant or
agreement contained in this Agreement or any certificate delivered by or on
behalf of the Company at or prior to the Closing, (C) any Indebtedness of the
Company and any Transaction Expenses, in each case that are not paid in full at
the Closing or taken into account in the calculation of the Merger
Consideration, (D) actual or claimed inaccuracies in the Distribution Waterfall,
(E) any claims by any current, past or putative holder of Company Capital Stock,
in his, her or its capacity as such, including as a result of or in connection
with the Dissenting Shares, Dissenting Share Payments, the exercise of appraisal
rights (net of any amount that would otherwise have been payable to the holder
of Company Capital Stock exercising any appraisal rights), or any distribution
of Series AA Per Share Merger Consideration, Common Per Share Merger
Consideration and/or Option Per Share Merger Consideration to the Equityholders
pursuant to the Distribution Waterfall, (F) any claims by any current, past or
putative holder of Options in his or her capacity as such including as a result
of or in connection with any distribution of Series AA Per Share Merger
Consideration, Common Per Share Merger Consideration and/or Option Per Share
Merger Consideration pursuant to the Distribution Waterfall and including the
determination of the vested and unvested status of any Options, (G) (1) any and
all Taxes (or the non-payment thereof) of the Company or any of its Subsidiaries
for all taxable periods ending on or before the Closing Date and the portion
through the end of the Closing Date for any taxable period that includes (but
does not end on) the Closing

 

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Date (“Pre-Closing Tax Period”), (2) any and all Taxes of any member of an
Affiliated Group of which the Company or any of its Subsidiaries (or any of
their predecessors) is or was a member on or prior to the Closing Date pursuant
to Treasury Regulation Section 1.1502-6 (or any analogous or similar state,
local, or non-U.S. law), and (3) any and all Taxes with respect to a Pre-Closing
Tax Period of any Person (other than the Company or any of its Subsidiaries)
imposed on the Company or any of its Subsidiaries as a transferee or successor,
or by contract, which Taxes arose pursuant to an event or transaction occurring
before the Closing, and (H) any matter set forth on Schedule 8(b)(i)(H).

(ii) Parent shall indemnify and hold harmless the Equityholders against any
Losses which they suffer, sustain or become subject to as the result of a breach
by Parent or Merger Sub of any representation, warranty, covenant or agreement
contained in this Agreement or any certificate delivered by or on behalf of
Parent at or prior to the Closing (provided that this clause (ii) shall not
derogate from Parent’s rights or recoveries pursuant to Section 8(b)(i) above).

(iii) For purposes of Sections 8(b)(i)(A) and 8(b)(ii), in determining whether
there has been a breach of any representation or warranty, and in calculating
the amount of any Loss with respect to any such breach, all qualifications in
such representation or warranty referencing the terms “material,” “materiality,”
“Material Adverse Effect,” “in all material respects” and similar phrases shall
be disregarded.

(iv) After the Closing, the Parent Group shall not be entitled to recover under
Section 8(b)(i)(A) for any Losses arising from or as a result of a breach of
representations and warranties set forth in Section 5 (other than
representations and warranties described in Sections 8(a)(i) and 8(a)(ii))
unless each individual Loss for such breach exceeds fifty thousand U.S. dollars
($50,000) (the “Minimum Threshold”) (it being understood and agreed that if a
common or similar set of occurrences, events or sets of facts results in Losses,
such Losses shall be aggregated for purposes of determining if the Minimum
Threshold has been satisfied). The Parent Group shall not be entitled to recover
under Section 8(b)(i)(A) for any Losses arising from or as a result of a breach
of representations and warranties set forth in Section 5 (other than
representations and warranties described in Sections 8(a)(i) and 8(a)(ii))
unless the aggregate Losses for all such breaches above the Minimum Threshold
exceeds One Million Five Hundred Thirty Thousand U.S. dollars ($1,530,000) (the
“Basket”) (at which point the Parent Group shall be entitled to indemnification
from and against all such Losses in excess of the Basket, and not for any such
Losses equal to or below the Basket) and the Parent Group shall not be entitled
to recover under Section 8(b)(i)(A) (other than Losses arising from or as a
result of a breach of representations and warranties described in
Section 8(a)(i) and 8(a)(ii)) for more than an amount equal to, in the
aggregate, the Indemnity Escrow Amount (the “Cap”). None of the Minimum
Threshold, the Basket or the Cap shall apply to any such Loss arising from or as
a result of (i) either an action or inaction that constitutes fraud or willful
misconduct (and no such Losses shall count towards satisfaction of the Minimum
Threshold, the Basket or the Cap) or (ii) a breach of representations and
warranties described in Section 8(a)(i) and 8(a)(ii); provided that the
aggregate maximum liability of each Responsible Person for Losses pursuant to
clauses (i) and (ii) of this sentence shall not exceed the consideration
actually received by such Responsible Person pursuant to this Agreement.

 

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(v) No limitation shall apply to the liability of any individual Responsible
Person for any Loss arising from or as a result of either an action or inaction
that constitutes fraud or willful misconduct committed by such Responsible
Person. Notwithstanding anything to the contrary contained in this Agreement, in
no event shall any Responsible Person be liable under this Agreement or in
connection with the transactions contemplated hereby for amounts in excess the
consideration actually received by such Responsible Person pursuant to this
Agreement, except in the case of fraud or willful misconduct committed by such
Responsible Person.

(vi) Any Person making a claim for indemnification under this Section 8(b) (an
“Indemnified Party”) must give the indemnifying party (the “Indemnifying Party”)
written notice of such claim describing such claim and the nature and amount, or
anticipated amount, of the Loss, to the extent that the nature and amount
thereof are determinable at such time (a “Claim Notice”) promptly (but in any
event no later than forty-five (45) days) after the Indemnified Party receives
notice from a third party with respect to any matter which may give rise to a
claim for indemnification against the Indemnifying Party (a “Third Party Claim”)
or otherwise discovers the liability, obligation or facts giving rise to such
claim for indemnification; provided that the failure to notify or delay in
notifying the Indemnifying Party will not relieve the Indemnifying Party of its
obligations under this Section 8(b), except to the extent such claim or the
Indemnifying Party is materially prejudiced as a result thereof. Within thirty
(30) days after receipt of a Claim Notice with respect to a Third Party Claim,
the Indemnifying Party may assume the defense of such matter; provided that
(A) the Indemnifying Party shall retain counsel reasonably acceptable to the
Indemnified Party, (B) the Indemnified Party may participate in the defense of
such claim, at its own expense, with co-counsel of its choice to the extent that
the Indemnified Party believes in its sole discretion that such matter shall
affect its ongoing business and (C) the Indemnifying Party may not consent to
the entry of any judgment with respect to the matter or enter into any
settlement with respect to the matter which does not include a provision whereby
the plaintiff or claimant in the matter releases the Indemnified Party from all
Liability and obligations with respect thereto. If, within such thirty (30) day
period, the Indemnifying Party does not assume the defense of such matter, the
Indemnified Party may defend against the matter in any manner that it reasonably
may deem appropriate and may consent to the entry of any judgment with respect
to the matter or enter into any settlement with respect to matter without the
consent of the Indemnifying Party; provided, however, that if such consent is
not obtained, such settlement shall not be dispositive of the amount of or
existence of any indemnifiable Loss hereunder. The Indemnified Party shall
cooperate with the Indemnifying Party in all matters arising under this
Section 8(b).

(vii) In the event an Indemnified Party has a claim for indemnity under this
Section 8 against the Indemnifying Party that does not involve a Third Party
Claim (a “Direct Claim”), the Indemnified Party agrees to deliver to the
Indemnifying Party a Claim Notice within forty-five (45) days after the
Indemnified Party becomes aware of such Direct Claim; provided that the failure
to notify or delay in notifying the Indemnifying Party will not relieve the
Indemnifying Party of its obligations under this Section 8(b), except to the
extent such claim is materially prejudiced as a result thereof.

 

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(viii) As of the Effective Time, Parent, the Escrow Agent and the Equityholders’
Representative shall execute and deliver the Escrow Agreement, and Parent shall
deposit (A) the Working Capital Escrow Amount with the Escrow Agent to be held
as a trust fund for the purpose of securing the purchase price obligations set
forth in Section 1(j) and (B) the Indemnity Escrow Amount with the Escrow Agent
to be held as a trust for the purpose of securing the indemnification
obligations set forth in this Section 8. The Escrow Fund shall be held by the
Escrow Agent under the Escrow Agreement pursuant to the terms thereof. The
Escrow Fund shall be held as a trust fund and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any creditor of any
party, and shall be held and disbursed solely for the purposes and in accordance
with the terms of the Escrow Agreement and the Pro Rata Shares set forth in the
Distribution Waterfall. Interest earned on the Escrow Amount shall become part
of the Escrow Fund and shall be held in escrow and distributed in accordance
with the Escrow Agreement. The termination of the Escrow Fund and the
distribution of the remaining Escrow Amount shall be as set forth in the Escrow
Agreement.

(ix) From and after the Closing, any indemnification to which a member of the
Parent Group is entitled under this Agreement, subject to the applicable
limitations set forth in Section 8(b)(iv), as a result of any Loss shall be
first satisfied by recouping all of such Loss from the Indemnity Escrow Fund by
such member of the Parent Group in accordance with the terms of the Escrow
Agreement until the Indemnity Escrow Amount is exhausted or released pursuant to
the terms of the Escrow Agreement subject to the Applicable Limitation Dates and
subject to the last sentence of this Section 8(b)(viii); provided that all
payments made to the Parent Group from the Indemnity Escrow Fund shall reduce
each Responsible Person’s contribution to the Indemnity Escrow Fund pro rata
based on such Responsible Person’s Pro Rata Share. If the Indemnity Escrow
Amount is not sufficient to pay the entire amount of any such claim, other than
with respect to claims made under Section 8(b)(i)(A) for any Losses arising from
or as a result of a breach of representations and warranties set forth in
Section 5 (other than representations and warranties described in Sections
8(a)(i) and 8(a)(ii)), such member of the Parent Group shall have all other
rights and remedies available to it to recover any remaining amount directly
from the Responsible Persons in accordance with each such Responsible Person’s
Pro Rata Share, subject to the limitations set forth in Section 8(b)(iv) and the
Applicable Limitation Dates.

(x) All indemnification payments made pursuant to this Section 8 will be deemed
to be adjustments to the Merger Consideration (including, for the avoidance of
doubt, for Tax purposes).

(xi) For purposes of calculating the amount of Loss incurred by an Indemnified
Party for purposes of this Agreement, such amount shall be reduced by (A) the
amount of any insurance proceeds actually paid to such Indemnified Party in
respect of such Loss, net of any deductible amounts, any increase in premiums
related thereto and any costs associated with obtaining such insurance proceeds,
(B) the amount of any net Tax benefit actually realized by such Indemnified
Party in respect of such Loss in the taxable year of such Loss or the next
succeeding taxable year, as calculated on a with and without basis, and (C) the
amount of any indemnification, contribution, and other similar payment proceeds
actually recovered by such Indemnified Party in respect of such Loss, net of any
costs associated with obtaining such proceeds.

 

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(xii) Each of the Parties acknowledges and agrees that the indemnification
provisions set forth in this Section 8 shall be the exclusive remedy of the
Parties with respect to any breaches of the representations, warranties,
covenants, or agreements set forth in this Agreement, it being agreed that
nothing herein shall limit or impair any Party’s right to obtain specific
performance or other injunctive relief with respect to any such breach of any
such representation, warranty, covenant, or agreement.

(xiii) Notwithstanding anything to the contrary herein, Losses for purposes of
this Section 8 shall not include any amounts actually taken into account in the
final determination of Merger Consideration and in each case resulting in a
corresponding decrease to the Merger Consideration (it being understood and
agreed that the intent of this Section 8(b)(xiii) is to avoid duplication or
“double counting” of the same liability hereunder).

(xiv) Notwithstanding anything to the contrary herein, no member of the Parent
Group shall be entitled to indemnification or recovery for, and Losses shall not
include, (A) except for any Losses for Taxes attributable to a breach of a
representation or warranty contained in Sections 5(l)(ix), (x), (xi), (xv),
(xvii) and (xviii), any Taxes of the Company or any of its Subsidiaries with
respect to any taxable period or portion thereof beginning after the Closing
Date, (B) any limitation or diminution of or on any Tax attribute of the Company
or any of its Subsidiaries, (C) any Taxes described on Schedule 8(b)(xiv)(C) or
(D) any Taxes included in the calculation of the 336(e) Adjustment to the extent
such Taxes do not exceed the 336(e) Adjustment Cap.

Section 9. Additional Agreements.

(a) Press Releases. The Parties agree that no press release or other public
announcement (including in any trade journal or other publication) of the
transactions contemplated hereby shall be made (i) prior to the Closing without
the prior written consent of each of the Parties or (ii) after the Closing
without the prior written consent of Parent, except as provided in the
Representative Side Letter; provided, however, that notwithstanding anything to
the contrary in this Section 9(a) or otherwise, the filing with the U.S.
Securities and Exchange Commission and issuance, as applicable, by Actua of
(A) a Form 8-K in the form attached hereto as Exhibit L disclosing the terms of
this Agreement and the transactions contemplated hereby (and attaching thereto a
copy of this Agreement and a press release in form and substance reasonably
satisfactory to Parent) and (B) the Financial Statements (as defined in the
Representative Side Letter) to the extent permitted under the Representative
Side Letter shall, in each case, be expressly permitted by this Section 9(a);
provided, further, that such Form 8-K shall be filed on the earliest to occur of
(1) prior to market open on the fourth (4th) Business Day following the date of
this Agreement, (2) prior to market open on September 26, 2016 and (3) at any
such time following the date hereof that Actua and its counsel reasonably
determines that such timing of such filing is necessary or advisable in order to
comply with the disclosure requirements of the U.S. Securities and Exchange
Commission and/or any applicable stock exchange, and Actua shall notify Parent
of any such determination as promptly as practicable as such determination is
made.

 

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(b) Transaction Expenses. Each Party shall be solely responsible for and shall
bear all of its own costs and expenses incident to its obligations under and in
respect of this Agreement and the transactions contemplated hereby; provided
that the Equityholders shall be responsible for the Transaction Expenses.

(c) Tax Matters. The following provisions shall govern the allocation of
responsibility as between Parent and the Company, on the one hand, and the
Equityholders, on the other hand, for certain Tax matters following the Closing
Date (it being understood that for purposes of this Section 9(c), the term
“Company” shall be deemed to refer to and include the Company and each of the
Company’s Subsidiaries).

(i) Apportionment of Taxes. In the case of any taxable period that includes (but
does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes
based on or measured by income, payroll or receipts of the Company for the
Pre-Closing Tax Period shall be determined based on an interim closing of the
books as of the close of business on the Closing Date (and for such purpose, the
taxable period of any partnership or other pass-through entity in which the
Company holds a beneficial interest shall be deemed to terminate at such time),
and the amount of other Taxes of the Company for a Straddle Period which relate
to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for
the entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period.

(ii) Cooperation. Parent, the Company and the Equityholders’ Representative
shall, and shall cause their Affiliates to, cooperate fully, as and to the
extent reasonably requested by the other Parties, in connection with the
preparation and filing of Tax Returns and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon the other Party’s request) the provision of records and information
which are reasonably relevant to any such Tax Return, audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.

(iii) Preparation of Tax Returns.

(A) The Equityholders’ Representative shall prepare or cause to be prepared and
file or cause to be filed all income Tax Returns of the Affiliated Group which
includes the Company and the common parent of which is Actua (the “Seller Tax
Returns”). Such Seller Tax Returns shall be prepared in a manner consistent with
past practice to the extent related to the Company, except as otherwise required
by applicable law. At least twenty (20) days prior to the due date of any Seller
Tax Return (taking into account extensions), the Equityholders’ Representative
shall provide a draft of the portions of such Seller Tax Return related to the
Company to Parent for the Parent’s review and comment. The Equityholders’
Representative shall take into consideration any changes to such Seller Tax
Returns reasonably requested by Parent.

(B) Parent shall prepare or cause to be prepared and file or cause to be filed
all Tax Returns of the Company that are first due after the Closing Date (taking
into account any extensions) for any taxable period of the Company ending on or
before the Closing Date and for any Straddle Period of the Company, other than
Seller Tax Returns (the

 

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“Company Tax Returns”). Such Company Tax Returns shall be prepared in a manner
consistent with the Company’s past practice except as otherwise required by
applicable law; provided, that, , any Company Tax Returns that are income Tax
Returns shall be prepared in a manner consistent with Seller Tax Returns as
provided by the Equityholders’ Representative pursuant to Section 9(c)(iii)(A),
to the extent such Seller Tax Returns are related to the Company. At least
twenty (20) days prior to the due date of any Company Tax Return (taking into
account extensions), Parent shall provide a draft of such Company Tax Return to
the Equityholders’ Representative for the Equityholders’ Representative’s review
and written approval (such approval not to be unreasonably withheld, conditioned
or delayed). Parent shall, or shall cause the Company, to make all changes to
such Company Tax Returns reasonably requested by the Equityholders’
Representative. Any disputes as to such changes shall be submitted to the
Independent Accounting Firm, the decision of which shall be final, binding and
conclusive and the expenses of which shall be shared equally between the Parent,
on the one hand, and the Equityholders, on the other hand. If the Independent
Accounting Firm is unable to make a determination with respect to any disputed
item prior to the due date for the filing of Company Tax Return in question,
then (i) the Company may file such Company Tax Return in accordance with the
Company’s reasonable position (“Reasonable Position Returns”) and (ii) if the
Independent Accounting Firm subsequently determines that such Company Tax Return
should be amended, the Company shall file an amended Company Tax Return
reflecting the Independent Accounting Firm’s determination. No member of Parent
Group shall be entitled to indemnification or recovery for, and Losses shall not
include, (i) Taxes paid in connection with the filing of Reasonable Position
Returns to the extent such Taxes are a disputed item subject to the Independent
Accounting Firm’s review, (ii) interest, penalties or other charges, fees or
expenses arising out of or related to late payment or late filing of Company Tax
Returns and (iii) Taxes paid in connection with filing Tax Returns that serve as
requests for extension of time to file (including IRS Form 7004 and comparable
or analogous other Tax forms, “Extension Returns”). For the avoidance of doubt,
the indemnification provided in Section 8(b)(G)(1) shall apply (subject to any
qualifications and limitations set forth in this Agreement) to disputed Taxes
that were paid in connection with Reasonable Position Returns and Taxes paid in
connection with Extension Returns as and when the amount of such Taxes are
finally determined (and only to the extent of such Taxes as finally determined)
following the filing of the applicable Company Tax Return that includes such
Taxes as finally determined pursuant to the procedures set forth in this
Section 9.3(c)(iii)(B) (i.e., after the filing of such Company Tax Return as
mutually agreed upon by Parent and Equityholders’ Representative or after the
filing of such Company Tax Return following determination of all disputes by the
Independent Accounting Firm).

(C) Without the Equityholders’ Representative’s prior written consent (such
consent not to be unreasonably withheld, conditioned or delayed), Parent will
not, and will not cause the Company or any of their Affiliates to, take any of
the following actions that could have an effect with respect to Taxes or Tax
Returns in each case for any Pre-Closing Tax Period, if such action could
reasonably be expected to give rise to an indemnification claim against the
Responsible Persons under this Agreement or otherwise result in amounts for
which Responsible Persons could become liable or responsible: (1) amend, file,
re-file or otherwise modify any Tax Return of the Company or (2) except for the
Section 336(e) Elections, make, revoke or modify any Tax election with respect
to the Company, in each case, unless as a condition or result of the judgment or
settlement of a Tax Proceeding resolved in accordance with the procedures set
forth in Section 9.3(c)(v) or made or done in accordance with VDA Procedures as
set forth in Section 9(c)(v).

 

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(iv) Closing Date Course of Business. For the portion of the Closing Date after
the time of Closing, Parent shall cause the Company to carry on its business
only in the ordinary course in the same manner as previously conducted and shall
not make or cause to be made or permit any extraordinary transaction that would
result in Losses with respect to Taxes for which indemnification pursuant to
this Agreement would be required or for which the Equityholders would otherwise
be responsible.

(v) Tax Proceedings. Parent shall give reasonably prompt written notice to
Equityholders’ Representative of any dispute or claim or the commencement of any
audit, suit, action or proceeding (excluding any VDA Procedure, which shall be
addressed in paragraph (C) of this Section 9(c)(v)) related to Taxes with
respect to the Company with respect to a Pre-Closing Tax Period (in each case, a
“Tax Proceeding”).

(A) The Equityholders’ Representative shall have the right to control the
defense of any Tax Proceeding to the extent related to Losses with respect to
which the Responsible Persons could reasonably be expected to have to provide
indemnification pursuant to this Agreement (a “Seller Proceeding”); provided
that (x) Parent shall have the right to participate in any such Seller
Proceeding, (y) the Equityholders’ Representative shall keep the Parent
reasonably informed of the status of such Tax Proceeding (including providing
Parent with copies of all written correspondence regarding such matter), and
(z) to the extent that any Seller Proceeding (other than a Seller Proceeding
related to income Taxes of the Affiliated Group which includes the Company and
the common parent of which is Actua) (1) is related to a taxable period (or
portion thereof) beginning after the Closing Date or (2) could reasonably be
expected to affect the Tax liability of the Parent or the Company in a taxable
period (or portion thereof) beginning after the Closing Date, Equityholders’
Representative shall not consent to the entry of any judgment or enter into any
settlement without the consent of Parent, which consent shall not be
unreasonably withheld, conditioned or delayed.

(B) Parent shall control the defense of any Tax Proceeding other than a Seller
Proceeding (a “Company Proceeding”); provided that to the extent an
indemnification claim against the Responsible Persons under this Agreement could
reasonably be expected to result from any such Company Proceeding, (x) the
Equityholders’ Representative shall have the right to participate in any such
Company Proceeding, (y) Parent shall keep the Equityholders’ Representative
reasonably informed of the status of such Company Proceeding (including
providing Equityholders’ Representative with copies of all written
correspondence regarding such matter), and (z) neither Parent nor the Company
shall consent to the entry of any judgment or enter into any settlement without
the consent of the Equityholders’ Representative, which consent shall not be
unreasonably withheld, conditioned or delayed.

(C) Notwithstanding anything to the contrary herein, each of Parent and the
Company shall, subject to the provisions of this Section 9.3(c)(v)(C), have the
right to (i) enter into and control “voluntary disclosure agreements” or other
similar programs with applicable taxing authorities for all Pre-Closing Tax
Periods (such programs, “VDA Procedures”) with respect to income or sales and
use Taxes and/or (ii) file a sales and use Tax

 

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Return with respect to any Pre-Closing Tax Period in a jurisdiction in which the
Company had not previously filed sales and use Tax Returns in such Pre-Closing
Tax Periods. Prior to Parent or the Company initiating any contact with a taxing
authority with respect to any VDA Procedures, or filing any such sales and use
Tax Return for any Pre-Closing Tax Period, Parent shall notify the
Equityholders’ Representative and obtain the Equityholders’ Representative’s
written consent (not to be unreasonably withheld, conditioned or delayed). Any
dispute regarding the initiation of such contact or VDA Procedures or the filing
of any such sales and use Tax Return shall be submitted to the Independent
Accounting Firm, and if the Independent Account Firm reaches a finding that it
is “more likely than not” that an outstanding Tax liability exists with respect
to the applicable Pre-Closing Tax Period in the applicable jurisdictions where
Parent intends to initiate contact or VDA Procedures or file any such sales and
use Tax Return, then Parent or the Company shall be able to proceed with such
VDA Procedures or the filing of such sales and use Tax Returns (notwithstanding
any lack of consent from the Equityholders’ Representative). The decision of the
Independent Accounting Firm shall be final, binding and conclusive and the
expenses of the Independent Accounting Firm be shared equally between the
Parent, on the one hand, and the Equityholders, on the other hand. With respect
to any VDA Procedures initiated pursuant to this paragraph (C), the
Equityholders’ Representative shall have the right to participate in any such
proceedings and to employ counsel at its own expense, and with respect to any
such sales and use Tax Returns filed pursuant to this paragraph (C), Parent or
the Company shall submit such Tax Return to the Equityholders’ Representative
for its review and comment at least twenty (20) days before filing such Tax
Return. In connection with any VDA Procedure related to sales and use Taxes or
filing of a sales and use Tax Return pursuant to this Section 9.3(c)(v)(C),
Parent and the Company shall use their commercially reasonable efforts to
collect the applicable sales and use Taxes to mitigate the sales and use Taxes
at issue to the greatest extent possible. In connection with any VDA Procedure
related to income Taxes, to the extent the result of the VDA Procedure includes
the assessment of income Taxes arising out of or related to the Section 336(e)
Election, no member of Parent Group shall be entitled to indemnification or
recovery for, and Losses shall not include, such income Taxes to the extent the
total amount of Section 336(e) Adjustment paid pursuant to this Agreement is
less than the 336(e) Adjustment Cap.

(D) To the extent that the provisions of this Section 9(c)(v) overlap or
contradict the provisions of Section 8(b)(vi), the provisions of this
Section 9(c)(v) shall govern.

(vi) Tax Refunds. Any refunds of Taxes, including any interest received from a
Governmental Authority thereon and net of any Taxes imposed thereon or
reasonable expenses incurred with respect thereto, attributable to any
Pre-Closing Tax Period of the Company shall be for the account of the
Equityholders, except to the extent such refund is attributable to a Tax
attribute arising in a taxable period (or portion thereof) beginning after the
Closing Date or was taken into account as a Current Asset in the determination
of Final Working Capital. Promptly upon the Company’s (or any of its
Affiliates’) receipt of any such refund, Parent shall pay over, by wire transfer
of immediately available funds, any such refund, including any interest received
by an applicable Governmental Authority thereon and net of any Taxes imposed
thereon or reasonable expenses incurred with respect thereto, to the Paying
Agent (for the benefit of the Stockholders) and the Company (for the benefit of
the Optionholders), in each case, to be distributed in accordance with the
applicable Pro Rata Shares set forth in the

 

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Distribution Waterfall. All such amounts for which a refund could be claimed
shall be claimed as a cash refund rather than as a credit against future Tax
liabilities. Upon the Equityholders’ Representative’s request and at the
Equityholders’ expense, Parent shall take any reasonable action necessary for
the Company to promptly claim refunds attributable to any Pre-Closing Tax Period
and cause the Company to claim refunds attributable to any Pre-Closing Tax
Period within the statutorily required time period. Notwithstanding anything in
this Agreement to the contrary, in the event that any such refund of Taxes is
subsequently determined by any Governmental Authority to be less than the amount
paid to the Equityholders, the Equityholders shall promptly return any such
disallowed amounts (plus any interest in respect of such disallowed refund owed
to a Governmental Authority) to Parent. All Transaction Tax Deductions shall be
considered to arise in the Pre-Closing Tax Period to the extent permitted by
applicable Tax law. All items of loss, deduction and credit of the Company
attributable to a Pre-Closing Tax Period shall be used for income Tax purposes
first to offset items of income and gain attributable to such Pre-Closing Tax
Period and thereafter shall be carried back to the extent permitted by
applicable Tax law.

(vii) Other Tax Matters. All Tax-sharing agreements or similar agreements (other
than agreements entered into in the ordinary course of business and not
primarily related to Taxes) with respect to or involving the Company shall be
terminated as of the Closing Date and, after the Closing Date, the Company shall
not be bound thereby or have any liability thereunder.

(viii) Section 336(e) Election.

(A) Actua, Seller and the Company hereby agree to make timely elections under
Code Section 336(e) (and any corresponding election under state Tax law) with
respect to the purchase and sale of the Company Capital Stock and with respect
to the indirect purchase and sale of the equity interests of each of the
Company’s U.S. Subsidiaries for income Tax purposes hereunder (collectively, the
“Section 336(e) Elections”). The first sentence of this paragraph (A) is
intended by the Parties hereto to meet the requirements of Treasury Regulation
Sections 1.336-2(h)(l)(i). Each of Seller, Actua, and the Company shall take any
and all actions necessary in order complete the Section 336(e) Elections in the
manner described in Treasury Regulation Sections 1.336-2(h)(l) (and any
corresponding requirements under applicable state Tax law). No later than twenty
(20) days prior to the applicable due date for timely filing, the Equityholders’
Representative shall deliver to Parent the election statement for each
Section 336(e) Election described in Treasury Regulations Section 1.336-2(h)(5)
for Parent’s review, comment and approval (not to be unreasonably withheld,
conditioned or delayed). Promptly following the consummation of the
Section 336(e) Elections, the Equityholders’ Representative shall provide
evidence reasonably satisfactory to Parent that the Section 336(e) Elections
have been properly executed and filed (including a copy of such election and any
related schedules, forms or other documentation) to the extent the
Equityholders’ Representative is responsible for such filing.

(B) The Merger Consideration and other items properly includible in the
aggregate deemed asset disposition price (“ADADP”) of the Company pursuant to
the Section 336(e) Election shall be allocated among the assets of the Company
in accordance with Section 336(e) of the Code, the regulations thereunder and
the principles set forth in Exhibit I attached hereto (the “Allocation
Methodology”).

 

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(C) Within sixty (60) days following the Closing Date, the Equityholders’
Representative shall provide Parent with (i) a statement setting forth an
allocation of the ADADP among the assets of the Company in accordance with the
Allocation Methodology for Tax Purposes (the “Purchase Price Allocation”) and
(ii) a statement setting forth a calculation of the 336(e) Adjustment as of the
Closing Date prepared in good faith and in accordance with the Purchase Price
Allocation (the “Closing Date 336(e) Adjustment”) (in each case, to the extent
components of the Merger Consideration have not yet been finally determined
pursuant to Section 1(j), using such components as calculated for purposes of
the Initial Merger Consideration). If, within fifteen (15) days following the
date of receipt of the Purchase Price Allocation and the Closing Date 336(e)
Adjustment, Parent does not dispute the Equityholders’ Representative’s
calculation of either, then the Purchase Price Allocation and Closing Date
336(e) Adjustment shall be final, binding and conclusive upon the Parties for
purposes of Tax reporting and determining the payment contemplated in this
Section 9(c)(viii)(C). If Parent disagrees with the Equityholders’
Representative’s calculation of either the Purchase Price Allocation or the
Closing Date 336(e) Adjustment, then, within such fifteen (15) days, the Parent
shall notify the Equityholders’ Representative of such disagreement in writing.
The parties shall negotiate in good faith for five (5) days to attempt to
resolve such disagreement. Any disagreement unresolved at the end of this period
shall be promptly submitted to the Independent Accounting Firm, whose resolution
shall be provided within fifteen (15) days of receipt of such submission, shall
be final, binding and conclusive on the parties and the costs of which shall be
split equally between Parent, on the one hand, and the Equityholders, on the
other hand. The Closing Date 336(e) Adjustment, as determined pursuant to this
Section 9(c)(viii)(C) after all actions and procedures described herein have
been completed, is hereinafter referred to as the “Final Closing Date 336(e)
Adjustment.” The Final Closing Date 336(e) Adjustment shall be paid by the
Parent (as provided in Section 9(c)(ix)) to the Equityholders’ Representative
for remittance to the appropriate Governmental Authorities (or shall be paid
directly by Parent or the Company to the appropriate Governmental Authorities,
as applicable). Except as otherwise required by law, (1) none of the Parties
will take a position on any Tax Return or in any Tax proceeding inconsistent
with the Purchase Price Allocation, and (2) the Parties shall file all Tax
Returns and forms consistently with the Purchase Price Allocation; provided,
however, the Parties acknowledge that the allocation may be different between
ADADP and “adjusted grossed up basis (AGUB)” as required by the regulations
under Code Section 336(e).

(ix) Payment of Final Closing Date 336(e) Adjustment. The Final Closing Date
336(e) Adjustment shall be paid by Parent to the Equityholders’ Representative
for remittance to the appropriate Governmental Authorities (or shall be paid
directly by Parent or the Company to the appropriate Governmental Authorities,
as applicable) promptly after the determination of such amount becomes final in
accordance with Section 9(c)(viii)(C). For the avoidance of doubt, the
Equityholders’ Representative shall not be entitled to any payment of the Final
Closing Date 336(e) Adjustment pursuant to Section 9(c)(viii)(C) and this
Section 9(c)(ix) for more than an amount equal to the 336(e) Adjustment Cap.

 

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(x) For purposes of this Agreement, “336(e) Adjustment” means the amount
determined in a manner consistent with the methodology and sample calculation
included in Exhibit J equal to the sum of (1) the excess of the amount of Tax
imposed as a result of the Merger by virtue of the Section 336(e) Elections over
the amount of Tax that would have been imposed in the absence of such elections,
and (2) a “gross-up” amount to reflect additional Taxes imposed as a result of
receiving the 336(e) Adjustment. For the avoidance of doubt, no 336(e)
Adjustment will be paid to Equityholders other than Seller.

(xi) Notwithstanding Section 9(c)(viii)(C) and Section 9(c)(ix), in the event
the Final Closing Date 336(e) Adjustment as determined and paid pursuant to such
Sections used components as calculated for purposes of the Initial Merger
Consideration instead of components used for calculation of the Merger
Consideration as finally determined pursuant to Section 1(j), the parties shall
re-determine the Final Closing Date 336(e) Adjustment using only components for
calculation of the Merger Consideration as finally determined pursuant to
Section 1(j) as soon as practicable, but no later than twenty (20) days, after
such components are finally determined. Any disagreement between the parties at
the end of this period shall be promptly submitted to the Independent Accounting
Firm, whose resolution shall be provided within fifteen (15) days of receipt of
such submission, shall be final, binding and conclusive on the parties and the
costs of which shall be split equally between Parent, on the one hand, and the
Equityholders, on the other hand. The re-determined Final Closing Date 336(e)
Adjustment pursuant to this Section 9(c)(xi) shall be called the “Re-determined
Final Closing Date 336(e) Adjustment.” In the event the Re-determined Final
Closing Date 336(e) Adjustment is greater than the Final Closing Date 336(e)
Adjustment, the difference shall be paid by Parent to the Equityholders’
Representative for remittance to the appropriate Governmental Authorities (or
shall be paid directly by Parent or the Company to the appropriate Governmental
Authorities, as applicable); provided, that the Equityholders’ Representative
shall not be entitled to any payment of the sum of (x) the Final Closing Date
336(e) Adjustment plus (y) the difference between the Re-determined Final
Closing Date 336(e) Adjustment and Final Closing Date 336(e) Adjustment, in
excess of the 336(e) Adjustment Cap. In the event the Re-determined Final
Closing Date 336(e) Adjustment is less than the Final Closing Date 336(e)
Adjustment, the portion of the difference between the two which had previously
been paid by Parent to the Equityholders’ Representative for remittance to the
appropriate Governmental Authorities shall be paid by the Equityholders’
Representative to Parent.

(d) [Intentionally Omitted.]

(e) Confidentiality. Whether or not the transactions contemplated hereby are
consummated, the Parties shall keep, and shall cause each of their respective
Affiliates, employees, equityholders, advisors, agents and representatives to
keep, confidential all information and materials regarding any other Party. If
the transactions contemplated hereby are not consummated, Parent and each of its
Affiliates, employees, equityholders, advisors, agents and representatives shall
maintain the confidentiality of all non-public, proprietary information obtained
during its due diligence review of the Company and destroy all documents
received from the Company and all copies thereof containing any such
information. Each Equityholder shall not, and shall not permit its Affiliates,
employees, stockholders, advisors, agents and representatives to, disclose the
terms and provisions of this Agreement without the prior written consent of
Parent. If the transactions contemplated by this Agreement are consummated, the
Equityholders shall treat and hold as confidential any information concerning
the Business and/or the affairs of the Company and each of the Company’s
Subsidiaries that is not already

 

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generally available to the public (the “Confidential Information”) and refrain
from using any of the Confidential Information except in connection with this
Agreement, and deliver promptly to Parent or destroy, at the request of Parent,
all tangible embodiments (and all copies) of the Confidential Information which
are in its possession or under its control; provided that the Equityholders may
disclose the Confidential Information to the extent necessary to complete
federal, state or local personal income Tax Returns. This Agreement shall not be
deemed to restrict the Parties or their respective Affiliates, employees,
equityholders, advisors, agents and representatives from complying with a
lawfully issued governmental order or other legal requirement, including by
reason of filings with securities regulators, to produce or disclose any
documents or information subject to this Section 9(e) (including as contemplated
by Section 9(a)).

(f) Release. Effective upon the Closing, and except as set forth in the final
sentence of this Section 9(f), each Equityholder hereby unconditionally and
irrevocably waives, releases and forever discharges the Surviving Corporation
and each of its Subsidiaries and their respective past and present directors,
officers, employees, agents, predecessors, successors, assigns, equityholders,
partners, insurers, and Affiliates (the “Released Parties”) from any and all
Liabilities of any kind or nature whatsoever, in each case whether absolute or
contingent, liquidated or unliquidated, known or unknown, and such Equityholder
shall not seek to recover any amounts in connection therewith or thereunder from
such Released Parties. Such released Liabilities shall include any right to
recover against the Released Parties for any indemnification claims made against
or paid by an Equityholder pursuant to Sections 8 or 9(c). Each Equityholder
understands that this is a full and final release of all claims, demands, causes
of action and Liabilities of any nature whatsoever, whether or not known,
suspected or claimed, that could have been asserted in any legal or equitable
proceeding against the Released Parties, except as expressly set forth in this
Section 9(f). Each Equityholder represents that it is not aware of any claim by
it other than the claims that are waived, released and forever discharged by
this Section 9(f). Notwithstanding anything herein to the contrary, nothing
contained in this Section 9(f) shall operate to discharge, release or waive
(i) the obligations, covenants and agreements of Parent or Merger Sub arising
under this Agreement or any other agreement, document, instrument or certificate
entered into or executed in connection herewith, (ii) any indemnification
coverage or protections under the D&O Tail Policy or under the provisions of the
Company’s Charter and Bylaws, or (iii) any earned but unpaid employment
compensation or benefits owed to such Equityholder by the Company as of the date
of this Agreement and the Closing in connection with services provided by such
Equityholder to the Company as an employee.

(g) Further Assurances. As a material obligation of each Party to consummate the
transactions contemplated by this Agreement, from time to time after the
Closing, each Party shall at its own expense use commercially reasonable efforts
to (i) cooperate with the other Party, (ii) perform any further act and
(iii) execute and deliver such documents, instruments or certificates as may be
reasonably requested by the other Parties to this Agreement in order to
effectuate any transaction, act or agreement contemplated by this Agreement.

(h) Specific Performance. The Parties acknowledge that irreparable damage would
occur in the event of a breach of this Agreement or any other agreement,
document, instrument or certificate contemplated hereby, by any such Person,
money damages may be

 

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inadequate and the non-breaching Party may have no adequate remedy at law.
Accordingly, each of the Parties hereto agrees that the other Parties shall have
the right, in addition to any other rights and remedies existing in such Party’s
favor, to enforce such Party’s rights and each other Party’s obligations
hereunder not only by an action or actions for damages but also by an action or
actions for specific performance, injunctive and/or other equitable relief. If
any such action is brought by a Party to enforce this Agreement or any other
agreement, document, instrument or certificate contemplated hereby, each of the
other Parties hereto hereby waives the defense that there is an adequate remedy
at law.

(i) Equityholders’ Representative.

(i) Each Equityholder hereby authorizes, directs and appoints (and each other
holder of Company Capital Stock pursuant to the terms of such Stockholder’s
Transmittal Letter and the Joinder Agreement and each other Optionholder
pursuant to the terms of such Optionholder’s Option Cancellation Agreement shall
authorize direct and appoint) Actua USA Corporation to act as sole and exclusive
agent, attorney-in-fact and representative of the Equityholders (the
“Equityholders’ Representative”) and authorizes and directs the Equityholders’
Representative to (A) take any and all actions (including executing and
delivering any documents, incurring any costs and expenses on behalf of the
Equityholders and making any and all determinations) which may be required or
permitted by this Agreement to be taken by the Equityholders, (B) exercise such
other rights, power and authority, as are authorized, delegated and granted to
the Equityholders’ Representative pursuant to this Agreement, the Escrow
Agreement, the Paying Agent Agreement, any Transmittal Letter or any Option
Cancellation Agreement, and (C) exercise such rights, power and authority as are
incidental to the foregoing. Notwithstanding the foregoing, the Equityholders’
Representative shall have no obligation to act on behalf of the Equityholders,
except as provided herein, in the Escrow Agreement, in the Paying Agent
Agreement and the documents contemplated hereby and thereby. Any such actions
taken, exercises of rights, power or authority, and any decision or
determination made by the Equityholders’ Representative consistent therewith,
shall be absolutely and irrevocably binding on each Equityholder, and such
Equityholder’s successors, as if such holder personally had taken such action,
exercised such rights, power or authority or made such decision or determination
in such holder’s capacity and all defenses which may be available to any
Equityholder to contest, negate or disaffirm the action of the Equityholders’
Representative taken in good faith under this Agreement or the Escrow Agreement
are waived. The powers, immunities and rights to indemnification granted to the
Equityholders’ Representative Group (as defined below) hereunder (x) are coupled
with an interest and shall be irrevocable and survive the death, incompetence,
bankruptcy or liquidation of any Equityholder and shall be binding on any
successor thereto and (y) shall survive the delivery of an assignment by any
Equityholder of the whole or any fraction of his, her or its interest in the
Escrow Fund.

(ii) Each Equityholder agrees that neither the Equityholders’ Representative nor
its members, managers, directors, officers, contractors, agents and employees
(collectively, the “Equityholders’ Representative Group”), shall be liable for
any actions taken or omitted to be taken under or in connection with this
Agreement, the Escrow Agreement, the Paying Agent Agreement or any
Equityholders’ Representative engagement agreement, or the transactions
contemplated hereby or thereby, except for such actions taken or omitted to be
taken resulting from the Equityholders’ Representative’s willful misconduct.
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Equityholder shall indemnify, defend and hold harmless, severally (and not
jointly), pro rata based upon such Equityholder’s Pro Rata Share, from and
against any and all losses, claims, damages, liabilities, fees, costs, expenses
(including reasonable attorneys’ fees and expenses of other skilled
professionals and in connection with seeking recovery from insurers), judgments,
fines or amounts paid in settlement (collectively, “Representative Expenses”)
paid or incurred by the Equityholders’ Representative in connection with the
performance of its obligations as Equityholders’ Representative, including in
the defense of any indemnification claim brought against the Responsible Persons
under Section 8. The payment of such expenses shall first be made by the
Equityholders’ Representative out of the Reserve Account, second, from any
distribution of the Indemnity Escrow Fund otherwise distributable to the
Equityholders at the time of distribution, and thereafter the Equityholders’
Representative shall have the right to demand payment with respect to such
expenses from each Equityholder severally (and not jointly), pro rata based upon
each such Equityholder’s Pro Rata Share.

(iii) The Reserve Account shall be held by the Equityholders’ Representative as
agent and for the benefit of the Equityholders in a segregated client account
and shall be used (A) for the purposes of paying directly or reimbursing the
Equityholders’ Representative for any Representative Expenses incurred pursuant
to this Agreement, the Escrow Agreement or any Equityholders’ Representative
letter agreement, or (B) as otherwise determined by the Equityholders’
Representative Group. The Equityholders’ Representative is not providing any
investment supervision, recommendations or advice and shall have no
responsibility or liability for any loss of principal of the Reserve Account
other than as a result of its gross negligence or willful misconduct. The
Equityholders’ Representative is not acting as a withholding agent or in any
similar capacity in connection with the Reserve Account, and has no tax
reporting or income distribution obligations hereunder. The Equityholders’
Representative shall release all amounts remaining in the Reserve Account to the
Paying Agent (for further distribution to the Stockholders) and the Company (for
further distribution to the Optionholders) for further distribution to the
Equityholders, in each case in accordance with the Distribution Waterfall, upon
the later of the Release Date (as defined in the Escrow Agreement) or the
resolution of all indemnification claims against the Responsible Persons still
pending as of the Release Date.

(iv) The Parties agree that Parent and Merger Sub and, following the Closing,
the Surviving Corporation, shall be entitled to rely on any action taken by the
Equityholders’ Representative, on behalf of each of the Equityholders, pursuant
to this Section 9(i) (each, an “Authorized Action”), and that each Authorized
Action shall be binding on each Equityholder as fully as if such Equityholder
had taken such Authorized Action. The Equityholders agree to pay, based on their
respective Pro Rata Shares, and to indemnify and hold harmless, based on their
respective Pro Rata Shares, the Parent Group from and against any Losses which
they may suffer, sustain, or become subject to, as the result of any claim by
any Person that an Authorized Action is not binding on, or enforceable against,
any Equityholder.

(v) The Equityholders’ Representative shall be entitled to: (A) rely upon the
Distribution Waterfall, (B) rely upon any signature believed by it to be
genuine, and (C) reasonably assume that a signatory has proper authorization to
sign on behalf of the applicable Equityholder or other party. The Equityholders’
Representative may resign at any time following the Closing Date, and may be
removed or replaced by the vote of the Equityholders

 

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who, immediately prior to the Effective Time, held at least a majority of the
outstanding shares of Company Capital Stock, in each case upon five (5) days’
prior written notice to Parent. The immunities and rights to indemnification
shall survive the resignation or removal of the Equityholders’ Representative
and the Closing and/or any termination of this Agreement, the Escrow Agreement
and the Paying Agent Agreement.

(j) Termination of Certain Contracts. Each of the Equityholders hereby agrees
that each contract, agreement, or arrangement (other than this Agreement)
between the Company, on the one hand, and such Equityholder on the other hand
identified on Schedule 9(j) shall be terminated effective as of and conditioned
on the Closing and such Equityholder, as applicable, shall execute and deliver,
or cause to be executed and delivered, any further documentation reasonably
requested by Parent to give effect to or evidence the foregoing.

(k) Transfer Taxes. All transfer, documentary, sales, use, stamp, registration,
conveyance or similar Taxes or charges arising out of the transactions
contemplated hereby and all charges for or in connection with the recording of
any document, instrument or certificate contemplated hereby shall be paid fifty
percent (50%) by the Equityholders and fifty percent (50%) by Parent if and when
due. Parent will file all necessary Tax Returns and other documentation in
connection with the Taxes and charges encompassed in this Section 9(k) and, if
required by applicable law or to the extent reasonably requested, each Party
shall cooperate in the preparation and filing and join in the execution of any
such Tax Returns and other documentation.

Section 10. Miscellaneous.

(a) No Third Party Beneficiaries; No Recourse. Except for (i) the rights of the
Equityholders to receive the applicable portion of the Merger Consideration,
(ii) Section 4(g), which is for the benefit of the D&Os, and (iii) as otherwise
expressly provided herein, the Agreement is not intended to and shall not confer
upon any Person other than the Parties hereto any rights or remedies hereunder.

(b) Entire Agreement. This Agreement (including the appendices, exhibits,
schedules and other documents referred to herein) constitutes the entire
agreement among the Parties and supersedes any prior understandings, agreements
or representations by or among the Parties, written or oral, that may have
related in any way to the subject matter hereof.

(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties; provided that Parent may (i) assign any of its rights and
interests hereunder to any affiliate of Parent or any successor to Parent, the
Company or the Business that agrees to or is otherwise responsible for Parent’s
obligations hereunder (whether by express agreement, operation of law or
otherwise), and (ii) assign its rights under this Agreement to any lender (or
agent on behalf of such lenders) as collateral security for the obligations of
Parent to such lenders.

 

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(d) Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by telecopy or by electronic delivery in Adobe Portable
Document Format or other electronic format based on common standards will be
effective as delivery of a manually executed counterpart of this Agreement

(e) 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.

(f) 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 received when (i) delivered
personally to the recipient, (ii) one (1) Business Day after it is faxed to the
recipient (provided that it is followed by a hard copy), (iii) one (1) Business
Day after it is delivered to the recipient through other electronic means
(including by electronic mail) (provided that receipt is confirmed promptly
thereafter), or (iv) one (1) Business Day after it is sent to the recipient by
reputable express courier service (charges prepaid), and addressed to the
intended recipient as set forth below; provided that with respect to notices
delivered to the Equityholders’ Representative, such notices shall be delivered
solely via fax or email:

If to the Company prior to the Closing:

GovDelivery Holdings, Inc.

408 St. Peter Street, Suite 600

St. Paul, MN 55102

Telephone: (651) 726-7303

Attention: Scott Burns (scott.burns@govdelivery.com)

If to the Equityholders’ Representative:

Actua USA Corporation

555 Lancaster Ave, Suite 640

Radnor, PA 19087

Telephone: (610) 727-6874

Attention: Suzanne L. Niemeyer (suzanne@actua.com)

each, with a copy (which shall not constitute notice) to:

Pepper Hamilton LLP

3000 Two Logan Square

18th and Arch Streets

Philadelphia, PA 19103

Facsimile: (215) 981-4750

Attention: Solomon Hunter, Jr. (hunters@pepperlaw.com)

 

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If to Parent or, following the Closing, the Company:

Wildebeest Intermediate, LLC

c/o Vista Equity Partners Management, LLC

Four Embarcadero Center, 20th Floor

San Francisco, CA 94111

Attention: David A. Breach (dbreach@vistaequitypartners.com)

                 Patrick Severson (pseverson@vistaequitypartners.com)

with a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

555 California Street, Suite 2700

San Francisco, CA 94104

Facsimile: (415) 439-1500

Attention: David L. Dixon, P.C. (david.dixon@kirkland.com)

Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address, facsimile number or
electronic mail address set forth above using any other means, 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 intended
recipient. Any Party may change the address, facsimile number or electronic mail
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.

(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

(h) Consent to Jurisdiction; Waiver of Jury Trial. THE PARTIES AGREE THAT
JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THIS
AGREEMENT SHALL PROPERLY AND EXCLUSIVELY LIE IN ANY STATE OR FEDERAL COURT
LOCATED IN WILMINGTON, DELAWARE. BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY
AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION
THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH
ACTION. THE PARTIES FURTHER AGREE THAT THE MAILING BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL
CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT NECESSITY
FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT. EACH PARTY
HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION
RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

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(i) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by each of the
Parties hereto. All waivers of rights under this Agreement shall be in writing,
and 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, covenant or agreement hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.

(j) Incorporation of Appendices, Exhibits and Schedules. The appendices,
exhibits and schedules identified in this Agreement (including the Disclosure
Schedules delivered in connection herewith) are incorporated herein by reference
and made a part hereof.

(k) Cumulative Remedies. Subject to the provisions of Section 8(b)(xii), all
rights and remedies of any Party are cumulative of each other and of every other
right or remedy such Party may otherwise have at law or in equity, and the
exercise of one or more rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of other rights or remedies.

(l) Construction.

(i) Each Party agrees that they have been represented by counsel during the
negotiation 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. The Parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty or covenant
contained herein (or is otherwise entitled to indemnification) in any respect,
the fact that there exists another representation, warranty or covenant
(including any indemnification provision) relating to the same subject matter
(regardless of the relative levels of specificity) which such Party has not
breached (or is not otherwise entitled to indemnification with respect thereto)
shall not detract from or mitigate the fact that such Party is in breach of the
first representation, warranty or covenant (or is otherwise entitled to
indemnification pursuant to a different provision).

(ii) Where specific language is used to clarify by example a general statement
contained herein (such as by using the word “including”), such specific language
shall not be deemed to modify, limit or restrict in any manner the construction
of the general statement to which it relates. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms. Whenever required by the context, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa. The words “include” and “including,” and other words of similar import
when used herein shall not be deemed to be terms of limitation but rather shall
be deemed to be followed in each case by the words “without limitation.” The
word “if and other words of similar import when used herein

 

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shall be deemed in each case to be followed by the phrase “and only if.” The
words “herein,” “hereto,” and “hereby” and other words of similar import in this
Agreement shall be deemed in each case to refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision of this Agreement.
Any reference herein to “dollars” or “$” shall mean United States dollars. The
term “or” shall be deemed to mean “and/or”. Any reference to any particular Code
section or any other law will be interpreted to include any revision of or
successor to that section regardless of how it is numbered or classified and any
reference herein to a Governmental Authority shall be deemed to include
reference to any successor thereto. Any reference herein to “delivered”,
“provided” or “made available” to Parent means, with respect to any document or
information, that the same has been made available to Parent with unrestricted
access for a continuous period of at least one (1) Business Day prior to the
date of this Agreement by means of the virtual data room located at Intralinks
(https://services.intralinks.com) under the title “Project Monument”.

(iii) The disclosure schedules dated as of the date of this Agreement and
delivered to Parent herewith (the “Disclosure Schedules”) are hereby
incorporated by reference into the sections in which they are directly
referenced; provided that the disclosures and responses set forth in a
particular section of the Disclosure Schedule shall also qualify other Sections
or Subsections of Section 5 solely to the extent that it is reasonably apparent
on its face from the text of an exception or response that such exception or
response is applicable to such other Section or Subsection. Without limiting the
generality of the foregoing, the provision of monetary or other quantitative
thresholds for disclosure on the Disclosure Schedules does not and shall not be
deemed to create or imply a standard of materiality hereunder.

(m) Severability of Provisions. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced as a result of any rule of
law or public policy, all other terms and other provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Agreement are fulfilled to the greatest extent possible.

(n) No Additional Representations. Parent acknowledges that (i) none of the
Company, nor any other Person on behalf of the Company has made any
representation or warranty, expressed or implied, as to the Company, or the
accuracy or completeness of any information regarding the Company furnished or
made available to Parent, the Merger Sub and their representatives, or any other
matter related to the transactions contemplated herein, except as expressly set
forth in this Agreement, (ii) Parent and the Merger Sub have not relied on any
representation or warranty from the Company or any other Person on behalf of the
Company in determining to enter into this Agreement, except as expressly set
forth in this Agreement and (iii) none of the Company or any other Person acting
on behalf of the Company shall have any liability to Parent or any other Person
with respect to any projections, forecasts, estimates, plans or budgets of
future revenue, expenses or expenditures, future results of operations, future
cash flows or the future financial condition of the Company or the future
business, operations or affairs of the Company, except as expressly set forth in
this Agreement; provided, however, that subject to the terms of Section 8, the
foregoing clauses (i), (ii) and (iii) shall not apply to any claim for fraud or
willful misconduct.

 

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(o) Waiver of Conflicts; Privilege.

(i) Each of the parties hereto acknowledges and agrees that Pepper Hamilton LLP
(“Pepper Hamilton”) has acted as counsel to the Company, the Equityholders’
Representative and each of the Equityholders in connection with the negotiation
of this Agreement and consummation of the transactions contemplated hereby.
Parent hereby agrees that Pepper Hamilton shall be deemed to be acceptable
counsel pursuant to Section 8(b)(vi)(A) hereof.

(ii) Parent hereby consents and agrees to, and agrees to cause the Company to
consent and agree to, Pepper Hamilton representing the Equityholders’
Representative and/or any of the Equityholders (collectively, the “Seller
Parties”) after the Closing, including with respect to disputes in which the
interests of the Seller Parties may be directly adverse to Parent and its
Affiliates (including Parent and the Company), so long as doing so will neither
enable nor cause Pepper Hamilton to breach its duty of confidentiality to the
Company.

(iii) In connection with the foregoing, Parent hereby irrevocably waives and
agrees not to assert, and agrees to cause the Company to irrevocably waive and
not to assert, any conflict of interest arising from or in connection with
(A) Pepper Hamilton’s prior representation of the Company or (B) Pepper
Hamilton’s representation of the Seller Parties prior to and after the Closing.

(iv) Parent further agrees, on behalf of itself and, after the Closing, on
behalf of the Company, that all communications in any form or format whatsoever
between or among any of Pepper Hamilton, the Company, any of the Seller Parties,
or any of their respective directors, officers employees or other
representatives that directly relate to the negotiation, documentation and
consummation of the transactions contemplated by this Agreement or any dispute
arising under this Agreement (collectively, the “Deal Communications”) shall be
deemed to be retained and owned collectively by the Equityholders, shall be
controlled by the Equityholders’ Representative on behalf of the Equityholders
and shall not pass to or be claimed by Parent or the Company. All Deal
Communications that are attorney-client privileged (the “Privileged Deal
Communications”) shall remain privileged after the Closing and the privilege and
the expectation of client confidence relating thereto shall belong solely to the
Equityholders’ Representative and the Equityholders, shall be controlled by the
Equityholders’ Representative on behalf of the Equityholders and shall not pass
to or be claimed by Parent or the Company.

(v) Notwithstanding the foregoing, in the event that a dispute arises between
Parent or the Company on the one hand, and a third party other than the
Equityholders’ Representative or any Equityholders, on the other hand, Parent or
the Company may assert the attorney-client privilege to prevent the disclosure
of the Privileged Deal Communications to such third party; provided, however,
that none of Parent or the Company may waive such privilege without the prior
written consent of the Equityholders’ Representative. In the event that Parent
or the Company is legally required by governmental order or otherwise to access
or obtain a

 

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copy of all or a portion of the Deal Communications, Parent (x) shall, to the
extent legally permissible, reasonably promptly notify the Equityholders’
Representative in writing (including by making specific reference to this
Section 10(o)), (y) agrees that the Equityholders’ Representative can seek a
protective order and (z) agrees to use, at the Equityholders’ Representative’s
sole cost and expense, commercially reasonable efforts to assist therewith.

(vi) To the extent that files or other materials maintained by Pepper Hamilton
constitute property of its clients, only the Equityholders’ Representative and
the Equityholders shall hold such property rights and Pepper Hamilton shall have
no duty to reveal or disclose any such files or other materials or any Deal
Communications by reason of any attorney-client relationship between Pepper
Hamilton, on the one hand, and the Company, on the other hand.

(vii) Parent agrees that it will not, and that it will cause the Company not to,
(A) access or use the Deal Communications, including by way of review of any
electronic data, communications or other information, or by seeking to have the
Equityholders’ Representative or any Equityholders waive the attorney-client or
other privilege, or by otherwise asserting that Parent or the Company has the
right to waive the attorney-client or other privilege or (B) seek to obtain the
Deal Communications from Pepper Hamilton. In furtherance of the foregoing, it
shall not be a breach of any provision of this Agreement if prior to the Closing
the Company, the Equityholders’ Representative and/or any Equityholders, or any
of their respective directors, officers employees or other representatives takes
any action to protect from access or remove from the premises of the Company (or
any offsite back-up or other facilities) any Deal Communications, including by
segregating, encrypting, copying, deleting, erasing, exporting or otherwise
taking possession of any Deal Communications (any such action, a “Permitted
Removal”). In the event that, notwithstanding any good faith attempts by the
Equityholders’ Representative or any Equityholders, or any of their respective
directors, officers, employees or other representatives to achieve a Permitted
Removal of any Deal Communication, any copy, backup, image, or other form or
version or electronic vestige of any portion of such Deal Communication remains
accessible to or discoverable or retrievable by Parent (each, a “Residual
Communication”), Parent agrees that it will not, and that it will cause the
Company and its respective directors, officers, employees or other
representatives not to intentionally use or attempt to use any means to access,
retrieve, restore, recreate, unarchive or otherwise gain access to or view any
Residual Communication for any purpose.

(viii) In the event that Parent or the Company receives a subpoena or other
discovery request pursuant to state or federal law that calls for the search for
documents that may include Deal Communications, nothing herein shall preclude
Parent or the Company from complying with its legal obligations to do so.

* * * *

 

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

 

WILDEBEEST INTERMEDIATE, LLC

By:

 

/s/ Patrick M. Severson

Name:

 

Patrick M. Severson

Title:

 

President

WILDEBEEST-2 MERGER SUB, INC.

By:

 

/s/ Patrick M. Severson

Name:

 

Patrick M. Severson

Title:

 

President

--------------------------------------------------------------------------------

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

 

GOVDELIVERY HOLDINGS, INC. By:  

/s/ Scott Burns

Name:   Scott Burns Title:   Chief Executive Officer Equityholders’
Representative: ACTUA USA CORPORATION, solely in its capacity as the
Equityholders’ Representative By:  

/s/ Suzanne L. Niemeyer

Name:   Suzanne L. Niemeyer Title:   General Counsel Seller: ACTUA HOLDINGS,
INC., solely for purposes of Section 9(c)(viii) By:  

/s/ Suzanne L. Niemeyer

Name:   Suzanne L. Niemeyer Title:   General Counsel

--------------------------------------------------------------------------------

APPENDIX A

Certain Definitions

“336(e) Adjustment Cap” means an amount equal to Six Million One Hundred
Thousand U.S. dollars ($6,100,000). For the avoidance of doubt, amounts
described in Schedule 8(b)(xiv)(C) shall not apply against the 336(e) Adjustment
Cap.

“Acquisition Proposal” means any offer or proposal for, or indication of
interest in, a merger, consolidation, stock exchange, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar
transaction involving the Company, any direct or indirect acquisition or
purchase of all or a substantial portion of the assets of the Company, taken as
a whole, or all or substantial part of the Company Capital Stock, other than the
transactions contemplated by this Agreement.

“Actions” means any action, suits, claims, litigation (including arbitration
proceedings), orders, charges, complaints, grievances, or any governmental
investigations, audits or inquiries.

“Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities or otherwise.

“Affiliated Group” means an affiliated group as defined in Section 1504 of the
Code (or any analogous combined, consolidated or unitary group defined under
state, local or non-U.S. Tax law) of which the Company is or has been a member.

“Business” means the business of developing, providing, selling, licensing, or
maintaining software and services including cloud-based marketing, email
notification, text message notification, interactive text message notification,
online community forum, learning content, and related data analytics solutions
for Governmental Authorities, public sector organizations and school districts.

“Business Data” means all business information and all personally-identifying
information and data (whether of employees, contractors, consultants, customers,
consumers, or other Persons and whether in electronic or any other form or
medium) that is accessed, collected, used, processed, stored, shared,
distributed, transferred, disclosed, destroyed, or disposed of by any of the
Business Systems.

“Business Day” a day other than a Saturday or Sunday or a day on which banks in
the State of New York are authorized or required by law to close.

“Business Systems” means all Software (including Company Products), computer
hardware (whether general or special purpose), electronic data processing,
information, record keeping, communications, telecommunications, networks,
interfaces, platforms, servers, peripherals, and computer systems, including any
outsourced systems and processes that are owned or used by or for the Company in
the conduct of the Business.

 

Appendix A-1

--------------------------------------------------------------------------------

“Cash and Cash Equivalents” means the consolidated cash and cash equivalents and
marketable securities (other than Restricted Cash) of the Company, determined in
accordance with GAAP, in each case, as of the Closing Measurement Time (which
for the avoidance of doubt, shall (i) include checks, wires and drafts received
by the Company but not yet cashed as of the Closing Measurement Time, (ii) be
net of checks, wires and drafts issued by the Company but not yet cashed or
deducted as of the Closing Measurement Time and (iii) include the aggregate
amount of exercise price attributable to all In-the-Money Options and the
aggregate Equity Loan Amount, but otherwise exclude the effects of the
transactions contemplated by this Agreement to occur at the Closing).

“Closing Common Per Share Merger Consideration” means, with respect to each
share of Common Stock (and as set forth in the Distribution Waterfall), (i) the
quotient obtained by dividing (A) the difference obtained by subtracting (x) the
aggregate Series AA Preference payable in respect of all shares of Series AA
Preferred Stock in the Merger from (y) the Initial Merger Consideration by
(B) the aggregate number of Fully-Diluted Shares held by all Equityholders, less
(ii) the Equity Loan Amount, if any, underlying such share.

“Closing Indebtedness” means the Indebtedness of the Company as of the Closing.

“Closing Measurement Time” means 11:59 p.m. Eastern Time on the date immediately
prior to the Closing Date.

“Closing Option Per Share Merger Consideration” means, with respect to each
In-the-Money Option (and as set forth in the Distribution Waterfall), (i) the
amount of the Closing Common Per Share Merger Consideration payable with respect
to each share of Common Stock underlying such In-the-Money-Option in the Merger,
minus (ii) the exercise price applicable to such In-the-Money-Option.

“Closing Series AA Per Share Merger Consideration” means, with respect to each
share of Series AA Preferred Stock (and as set forth in the Distribution
Waterfall), (i) (A) the Series AA Preference payable in respect of such share of
Series AA Preferred Stock in the Merger, plus (B) the quotient obtained by
dividing (1) the difference obtained by subtracting (x) the aggregate Series AA
Preference payable in respect of all shares of Series AA Preferred Stock in the
Merger from (y) the Initial Merger Consideration by (2) the aggregate number of
Fully-Diluted Shares held by all Equityholders, less (ii) the Equity Loan
Amount, if any, underlying such share.

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

“Common Per Share Merger Consideration” means, with respect to each share of
Common Stock, (i) the Closing Common Per Share Consideration payable in respect
of such share of Common Stock in the Merger, plus (ii) the Pro Rata Share of the
Escrow Amount, Reserve Account and Merger Consideration Adjustment Amount
attributable to such share of Common Stock.

“Company Products” means all Software and other products made available by
Company to its customers, and from which the Company has derived within the
three (3) years preceding the date hereof or is currently deriving, revenue from
the sale, license, subscription, support or provision thereof.

 

Appendix A-2

--------------------------------------------------------------------------------

“Current Assets” means the sum of the Company’s accounts receivable, net of the
allowance for doubtful accounts, unbilled receivables, prepaid expenses and all
other current assets, determined in accordance with GAAP as of the Closing
Measurement Time. For the avoidance of doubt, “Current Assets” does not include
any Cash and Cash Equivalents, the portion of deferred rent classified as
current asset, current employee loans, current or deferred income Tax assets or
income Tax receivables.

“Current Liabilities” means the sum of the Company’s accounts payable and
accrued expenses, vacation accruals, accrued compensation and payroll taxes
payable, short-term deferred revenues and all other current liabilities,
determined in accordance with GAAP as of the Closing Measurement Time. For
avoidance of doubt, “Current Liabilities” does not include current or deferred
income Tax liabilities, income Tax payables, accrued restructuring liabilities,
accrued interest, capital lease obligations, severance liabilities, deferred
rent and employee bonus liabilities or other Indebtedness (except as otherwise
set forth in the foregoing sentence); provided, however, that any item included
in “Current Liabilities” and actually reducing the Merger Consideration as a
result thereof shall not be included in “Indebtedness” or “Transaction
Expenses,” and any item included in “Indebtedness” or “Transaction Expenses” and
actually reducing the Merger Consideration as a result thereof shall not be
included in “Current Liabilities.”

“Data Security Requirements” means, collectively, all of the following to the
extent relating to Data Treatment or otherwise relating to privacy, security, or
security breach notification requirements and applicable to the Company, to the
conduct of the Business, or to any of the Business Systems or any Business Data:
(i) the Company’s own rules, policies, and procedures; (ii) all laws; and
(iii) contracts into which the Company has entered or by which they are
otherwise bound.

“Data Treatment” means the access, collection, use, import, export, processing,
storage, sharing, distribution, transfer, disclosure, security, destruction, or
disposal of any Business Data, sensitive, or confidential information or data
(whether in electronic or any other form or medium).

“Distribution Waterfall” shall mean a schedule, substantially in the form
attached hereto as Exhibit M, prepared in good faith by the Company and
delivered to Parent at least two (2) Business Days prior to the Closing, which
schedule shall set forth, at a minimum, (i) a list containing the name of each
Equityholder and the number of shares of Series AA Preferred Stock, Common Stock
and/or In-the-Money Options held by such Equityholder, (ii) with respect to the
shares of Series AA Preferred Stock, the Closing Series AA Per Share Merger
Consideration and Pro Rata Share of the Escrow Amount, Reserve Account and
Merger Consideration Adjustment Amount attributable to such shares, (iii) with
respect to the shares of Common Stock, the Closing Common Per Share Merger
Consideration and Pro Rata Share of the Escrow Amount, Reserve Account and
Merger Consideration Adjustment Amount attributable to such shares and (iv) with
respect to the In-the-Money Options, the exercise price, Closing Option Per
Share Merger Consideration and Pro Rata Share of the Escrow Amount, Reserve
Account and Merger Consideration Adjustment Amount attributable to such Options.

 

Appendix A-3

--------------------------------------------------------------------------------

“Downward Closing Working Capital Adjustment” means the amount, if any, by which
the Target Working Capital exceeds the Estimated Working Capital; provided that,
if such amount is equal to or less than one hundred twenty five thousand U.S.
dollars ($125,000), such amount shall be deemed to be zero U.S. dollars ($0.00).

“Employee Benefit Plan” of any Person means any “employee pension benefit plan”
or “employee welfare benefit plan” (as such terms are defined in Sections 3(2)
and 3(1) of ERISA, respectively), each employment or consulting agreement or
offer letter, each bonus, incentive, deferred compensation, retention, change in
control, pension, retirement, welfare, life assurance, illness benefit,
post-employment welfare, profit-sharing, severance, stock purchase, stock option
or equity incentive, warrant or other material benefit plan, policy, agreement,
arrangement or program, whether or not subject to ERISA and whether or not
funded.

“Environmental, Health and Safety Laws” means all laws and other requirements
having the force or effect of law relating to or imposing Liability or standards
of conduct concerning pollution or protection of the environment, public health
and safety, or employee health and safety, and all judgments, orders and decrees
of any Governmental Authority having the force and effect of law issued or
promulgated thereunder, and all related common law theories (including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act of 1976, the Occupational Safety and
Health Act of 1970, each as amended).

“Equity Loan Amount” means the aggregate principal amount and accrued interest,
as of the Closing, on those certain loans from the Company to certain holders of
Company Capital Stock, as described on Schedule A. The Equity Loan Amount
attributable to any share of Common Stock or Series AA Preferred Stock means the
quotient obtained by dividing (x) the aggregate Equity Loan Amount owing from
the applicable Stockholder to the Company by (y) the total number of shares of
Common Stock or Series AA Preferred Stock securing such Equity Loan Amount.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Escrow Agent” means Citibank, N.A.

“Escrow Amount” means an amount equal to the Indemnity Escrow Amount plus the
Working Capital Escrow Amount.

“Excluded Shares” means (i) shares of Company Capital Stock held in the treasury
of the Company and (ii) shares of Company Capital Stock held by Parent, Merger
Sub or any other Affiliate of Parent.

“Fully-Diluted Shares” means (i) the total number of shares of Common Stock
issued and outstanding immediately prior to the Effective Time, plus (ii) the
total number of shares of Common Stock issuable upon the conversion of all of
the shares of Series AA Preferred Stock issued and outstanding immediately prior
to the Effective Time, plus (iii) the total number of shares of Common Stock
issuable upon the exercise of all of the In-the-Money-Options outstanding
immediately prior to the Effective Time.

 

Appendix A-4

--------------------------------------------------------------------------------

“GAAP” means generally accepted accounting principles in the United States,
consistently applied in accordance with the past practices of the Company on a
basis consistent with the latest audited Financial Statements, but only to the
extent such past practices are in accordance with GAAP in the United States as
promulgated by all relevant accounting authorities, as in effect as of the date
hereof.

“Governmental Authority” means a federal, state or local or foreign government
or quasi-governmental entity or other political subdivision thereof or any
court, administrative or regulatory agency, department, board, bureau or
commission or other governmental authority or agency, domestic or foreign, as
well as any arbitrator or arbitral body or body exercising, or entitled to
exercise, any administrative, executive, judicial, adjudicative, legislative,
police, regulatory or taxing authority or power of any nature.

“Government Contract” means any contract that is (i) between the Company or its
Subsidiary and a Governmental Authority or (ii) is entered into by the Company
or its Subsidiary as a subcontractor (at any tier) to provide supplies or
services in connection with a contract between another Person and a Governmental
Authority.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“In-the-Money Option” means any Option that is vested as of the Effective Time
(including as contemplated by Section 1(h)(ii)) and has an exercise price that
is less than the Option Per Share Merger Consideration attributable to such
Option.

“Indebtedness” means, with respect to any Person at any time, without
duplication: (i) all obligations of such Person for borrowed money or in respect
of loans or advances; (ii) all obligations of such Person evidenced by bonds,
notes or other similar instruments (including any seller notes, deferred
purchase price obligations, conditional sale obligations, earnout obligations or
similar obligations, in each case, issued or entered into in connection with any
acquisition undertaken by such Person); (iii) all obligations in respect of
letters of credit, to the extent drawn, and bankers’ acceptances issued for the
account of such Person; (iv) all obligations and liabilities of such Person
under leases required under GAAP to be capitalized and NetApp’s Installment
Payment Agreement, dated December 23, 2015; (v) all interest rate protection
agreements of such Person (valued on a market quotation basis), if any; (vi) all
obligations of such Person secured by a contractual lien; (vii) any off-balance
sheet financing of a Person (but excluding operating leases); (viii) any
Liability of a Person under any deferred compensation plans or arrangements;
(ix) any accrued restructuring liability; (x) in connection with the deferred
rent balance, an amount equal to six hundred seventy five thousand U.S. dollars
($675,000); (xi) any outstanding lease payments for unused leased real property
(other than those subject to the indemnity set forth in Section 8(b)(i)(H));
(xii) any long term deferred revenue with respect to any customer arrangements;
(xiii) accrued interest and prepayment premiums or penalties relating to any
amount prepaid at or in connection with the

 

Appendix A-5

--------------------------------------------------------------------------------

Closing related to any of the foregoing; (xiv) an amount representing all
bonuses or other discretionary payments payable to employees and other service
providers of the Company or any Subsidiary of the Company in respect of the
pre-Closing portion of the fiscal year ending December 31, 2016 (which amount is
estimated as of the date hereof to equal one million eight hundred seven
thousand two hundred eight U.S. dollars ($1,807,208), and which amount shall be
updated by the Company in good faith not later than two (2) Business Days prior
to the Closing), and any Taxes payable in connection therewith (including the
employer portion of any payroll, social security, unemployment or similar Tax
imposed on such amounts); and (xv) all guarantees of such Person in connection
with any of the foregoing. For the avoidance of doubt, any item included in
either “Current Liabilities” or “Transaction Expenses” shall not be included in
“Indebtedness,” and any item included in “Indebtedness” shall not be included in
“Current Liabilities” or “Transaction Expenses”, in each case, solely to the
extent such item actually decreases the Merger Consideration.

“Indemnity Escrow Amount” means an amount equal to Eleven Million Four Hundred
Seventy-Five Thousand U.S. dollars ($11,475,000).

“Initial Merger Consideration” means (i) One Hundred Fifty-Three Million U.S.
dollars ($153,000,000), plus (ii) the Upward Closing Working Capital Adjustment
(if applicable), minus (iii) the Downward Closing Working Capital Adjustment (if
applicable), minus (iv) the Estimated Closing Indebtedness, minus (v) the
Estimated Transaction Expenses, minus (vi) the Escrow Amount, minus (vii) the
Reserve Amount, plus (viii) the Estimated Cash and Cash Equivalents.

“Intellectual Property” means all intellectual property and proprietary rights
throughout the world, including (i) all patents, patent applications, patent
disclosures, and inventions and all improvements thereto (whether or not
patentable or reduced to practice), and all reissues, continuations,
continuations-in-part, revisions, divisional, extensions, and reexaminations in
connection therewith, (ii) trademarks, service marks, domain names, trade dress,
corporate names, trade names, and other indicia of source, and all
registrations, applications and renewals in connection therewith (together with
the goodwill associated therewith), (iii) copyrights and all works of authorship
(whether or not copyrightable), and all registrations, applications and renewals
in connection therewith, (iv) Software, data and compilations of data,
(v) internet domain names, (vi) trade secrets, know-how, technologies,
databases, processes, techniques, protocols, methods, formulae, algorithms,
layouts, designs, specifications and confidential information, (vii) moral
rights, and (viii) rights of publicity.

“Knowledge of the Company” means the actual knowledge of Scott Burns, Robert
Ainsbury, Mike Coughlin, Howard Langsam and Steve Ressler, in each case, after
reasonable inquiry.

“law” means any foreign, federal, state, or local law (including common law),
rule, ruling, convention, act, constitution, treaty, fine, regulation, judgment,
injunction, executive order, order, decree, award, judgment, injunction,
administrative requirement, or other restriction of any Governmental Authority,
as enacted, promulgated, implemented, or in effect on or prior to the Closing
Date.

 

Appendix A-6

--------------------------------------------------------------------------------

“Liability” means any obligation, deficiency or liability of any kind or nature
whatsoever, whether asserted or unasserted, absolute or contingent, known or
unknown, accrued or unaccrued, liquidated or unliquidated, and whether due or to
become due and regardless of when asserted.

“Lien” means any security interest, pledge, lien or other similar encumbrance or
arrangement in real or personal property.

“Material Adverse Effect” means, with respect to any Person, any event,
circumstance, or effect (collectively, “Events”) that, individually or taken
together with all other Events, has or would reasonably be anticipated to have
in the future a material and adverse effect upon or change in (x) the Business,
assets, liabilities or financial condition, results of operations, cash flows or
properties of such Person (taken as a whole); or (y) the Person’s ability to
consummate the transactions contemplated by this Agreement, except that none of
the following will be deemed to constitute, and none of the following will be
taken into account in determining whether there has been, a Material Adverse
Effect: any adverse event, circumstance or effect to the extent arising from
(i) changes attributable to conditions affecting the industries in which such
Person and its Subsidiaries participate generally, taken as a whole;
(ii) changes in GAAP or other applicable accounting standards, in each case,
announced or initially proposed or implemented on or after the date hereof;
(iii) changes in law, rules, regulations, orders, or other binding directives
issued by any Governmental Authority, in each case, announced or initially
proposed or implemented on or after the date hereof, (iv) changes in general
economic conditions or financial markets; (v) any natural disasters, acts of
terrorism, military action or war; (vi) change resulting from compliance with
the express terms of, or the taking of any actions expressly required by, this
Agreement, solely to the extent arising from compliance with such terms of, or
the taking of any actions expressly required by, this Agreement; (vii) the
failure of such Person and its Subsidiaries to meet any financial forecast,
projection, estimate, prediction or models (but the underlying cause for such
failure to meet any financial forecast, projection, estimate, prediction or
models may be taken into account in determining whether there has been a
Material Adverse Effect); (viii) the loss of any individual Company executive or
employee (including, without limitation, any such loss that would constitute a
breach under Section 5(r)(i)); or (ix) the announcement or pendency of any of
the transactions contemplated by this Agreement (including any cancellation of
or delays in customer orders, any reduction in sales, any disruption in or loss
of customer, supplier, distributor, partner or similar relationships, or any
loss of employees), in each case solely to the extent arising from the
announcement or performance of, or compliance with, this Agreement or the
transactions contemplated hereby; provided that, in the case of clauses (i),
(ii), (iii), (iv) and (v), only to the extent such changes do not
disproportionately and materially affect such Person, taken as a whole (and with
respect to the Company, do not disproportionately and materially affect the
Company as compared to other Persons or businesses that operate in the industry
in which the Company operates).

“Open Source Software” means any Software that is licensed pursuant to: (i) any
license that is a license now or in the future approved by the Open Source
Initiative and listed at http://www.opensource.org/licenses, which licenses
include all versions of the GNU General Public License (GPL), the GNU Lesser
General Public License (LGPL), the GNU Affero GPL, the MIT license, the Eclipse
Public License, the Common Public License, the CDDL, the Mozilla Public License
(MPL), the Artistic License, the Netscape Public License, the Sun

 

Appendix A-7

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Community Source License (SCSL), and the Sun Industry Standards License (SISL);
(ii) any license to Software that is considered “free” or “open source software”
by the Open Source Foundation or the Free Software Foundation; or (iii) any
Reciprocal License, in each case whether or not source code is available or
included in such license.

“Option Per Share Merger Consideration” means, with respect to each In-the-Money
Option, (i) the difference obtained by subtracting (x) the exercise price
applicable to such In-the-Money Option from (y) the Closing Common Per Share
Consideration payable in respect of each share of Common Stock underlying such
In-the-Money Option in the Merger, plus (ii) the Pro Rata Share of the Escrow
Amount, Reserve Account and Merger Consideration Adjustment Amount attributable
to each share of Common Stock underlying such In-the-Money Option.

“Permitted Liens” means (i) Liens for Taxes not delinquent or Taxes being
contested in good faith by any appropriate proceeding for which adequate
reserves have been established in compliance with GAAP, (ii) statutory or
contractual landlord’s, mechanic’s or other similar Liens arising or incurred in
the ordinary course of business and for amounts which are not delinquent or
being contested in good faith (iii) liens created in connection with capitalized
lease obligations, (iv) recorded easements, covenants and other restrictions of
record; provided that no such item described in this clause (iv) impairs in any
material respect the current use or occupancy of the property subject thereto,
(v) Liens with respect to any Repaid Indebtedness, only to the extent such Liens
described in this clause (v) are released in connection with the Closing in
accordance with Section 1(i)(i), and (vi) any and all Liens encumbering the
underlying fee interest of the Leased Real Property.

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated association, corporation, limited liability company,
entity or Governmental Authority (whether federal, state, county, city or
otherwise and including any instrumentality, division, agency or department
thereof).

“Pro Rata Share” means, with respect to each Equityholder, the relative
percentage of (i) the Escrow Amount, Reserve Account and Merger Consideration
Adjustment Amount payable to such Equityholder and (ii) such Equityholder’s
indemnification obligation pursuant to Section 8, as applicable, in each case,
which percentage is (A) calculated as (x) the aggregate number of Fully-Diluted
Shares held by such Equityholder, divided by (y) the aggregate number of
Fully-Diluted Shares held by all Equityholders and (B) set forth in the
Distribution Waterfall, which percentage shall be subject to automatic
adjustment among the Equityholders following the date hereof upon the delivery
by the Optionholders of the Option Cancellation Agreements and the Stockholders
of the Joinder Agreement, as the case may be. Notwithstanding the foregoing,
solely for purposes of each Equityholder’s indemnification obligation pursuant
to Section 8 other than through the Escrow Fund, aggregate “Pro Rata Share”
shall include only those Equityholders that have executed a Joinder Agreement
and/or delivered an Option Cancellation Agreement, as the case may be, as of the
applicable date of determination; provided that upon the delivery by a
Stockholder of a Joinder Agreement and/or by an Optionholder of an Option
Cancellation Agreement following the date hereof, the aggregate Pro Rata Share
for such purposes shall be deemed adjusted to include such Stockholder and
Optionholder (it being understood that the Pro Rata Share of each Equityholder,
when taken together with the Pro Rata Share of each of the other Equityholders
as of the applicable date of determination, shall equal 100%).

 

Appendix A-8

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“Reciprocal License” means a license of an item of Software (the “Reciprocally
Licensed Software”) that requires or that conditions any rights granted in such
license upon: (i) the disclosure, distribution or licensing of any other
Software (other than such item of Reciprocally Licensed Software as provided by
a third party in its unmodified form); (ii) a requirement that any disclosure,
distribution or licensing of any other Software (other than such item of
Reciprocally Licensed Software in its unmodified form) be at no charge; (iii) a
requirement that any other licensee of such Reciprocally Licensed Software be
permitted to access the source code of, modify, make derivative works of, or
reverse-engineer any other Software; (iv) a requirement that any other Software
be redistributable by other licensees of such Reciprocally Licensed Software; or
(v) the grant by the licensee of any patent rights (other than patent rights in
such item of Reciprocally Licensed Software), including non-assertion or patent
license obligations (other than patent obligations relating to the use of such
item of Reciprocally Licensed Software).

“Registered Intellectual Property” means all Intellectual Property that is the
subject of registration (or an application for registration), including domain
names.

“Representative Side Letter” means that certain side letter in the form attached
hereto as Exhibit K between Parent and Representative, dated as of the Closing
Date, pertaining to, among other things, the sharing and disclosure of certain
financial information of the Company.

“Reserve Amount” means an amount equal to Five Hundred Thousand U.S. dollars
($500,000).

“Restricted Cash” means any cash which is not freely usable by the Company
because it is subject to restrictions, limitations or the imposition of Taxes on
use or distribution by law, contract or otherwise, including (i) restrictions on
dividends and repatriations or any other form of restriction (ii) the imposition
of any withholding Tax or other Tax on any such cash if it were to be
distributed or otherwise repatriated to the Company, and (iii) thirty thousand
one hundred eighteen U.S. dollars ($30,118) (which represents fifty thousand
U.S. dollars ($50,000) of restricted cash associated with the Company’s D.C.
facility lease, net of nineteen thousand eight hundred eighty two U.S. dollars
($19,882) of security deposit received in respect of the sublease of such
facility).

“Series AA Per Share Merger Consideration” means, with respect to each share of
Series AA Preferred Stock, (i) the Closing Series AA Per Share Consideration
payable in respect of such share of Series AA Preferred Stock in the Merger,
plus (ii) the Pro Rata Share of the Escrow Amount, Reserve Account and Merger
Consideration Adjustment Amount attributable to such share of Series AA
Preferred Stock.

“Series AA Preference” means, with respect to each share of Series AA Preferred
Stock, the amount of the Series AA Liquidation Preference (as defined in the
Charter) payable in respect of such share of Series AA Preferred in the Merger
pursuant to the Charter.

 

Appendix A-9

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“Significant Equityholders” means Actua Holdings, Inc. and any of its
Affiliates.

“Software” means all computer software (in object code or source code format)
and related documentation and materials.

“Stockholder Agreements” means (i) that certain Second Amended and Restated
Stockholder Rights Agreement, dated as of April 28, 2015, by and among the
Company and the Stockholders party thereto, (ii) that certain Stockholder
Agreement, dated as of December 5, 2014, by and among the Company and the
Stockholders party thereto, (iii) those certain Employee Stock Rights
Agreements, each dated as of July 13, 2015, by and between the Company and
Michelle Lee, Alexander Yule and Serena Wales, respectively, (iv) that certain
Transfer Rights Agreement, dated as of December 31, 2009, by and among the
Company and the Stockholders party thereto, and (v) that certain Stockholder
Voting Agreement, dated as of December 31, 2009, by and among the Company and
the Stockholders party thereto.

“Subsidiary” means, with respect to any Person, any partnership, limited
liability company, corporation or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of capital stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a partnership,
limited liability company or other business entity, a majority of the
partnership or other similar ownership interests thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof.

“Target Working Capital” means an amount equal to negative nine million three
hundred sixty two thousand eight hundred eighteen and 91/100 U.S. dollars
(-$9,362,818.91).

“Tax” means any U.S. or non-U.S. federal, state, provincial or local income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, escheat, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition,
whether disputed or not.

“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement filed or required to be filed with a
Governmental Authority in connection with the determination, assessment or
collection of Tax, including any schedule or attachment thereto, and including
any amendment thereof.

“Transaction Tax Deductions” means the sum of all items of losses, deductions or
credits attributable to (i) any and all payments in respect of Options and/or
Non-Participating Options at the Closing as contemplated by this Agreement
(including the Company and its Subsidiaries’ portion of any employment Taxes),
plus (ii) any and all deductions of the Surviving Corporation or the Company and
their respective Subsidiaries resulting from the exercise or other settlement of
any Options and/or Non-Participating Options in connection with the transactions
contemplated by this Agreement, including the Company and its Subsidiaries’

 

Appendix A-10

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portion of any employment Taxes, plus (iii) any and all payments in respect of
Company Capital Stock as contemplated by this Agreement that results in a
deduction to the Company pursuant to Section 421(b) of the Code (including the
Company portion of any employment Taxes), plus (iv) any and all bonuses paid in
connection with the transactions contemplated by this Agreement, plus
(v) vesting in respect of restricted stock of the Company arising out of
transactions contemplated by this Agreement, plus (vi) any and all deductible
amounts incurred in connection with the retirement of Indebtedness as
contemplated by this Agreement, plus (vii) any and all payments of Transaction
Expenses as contemplated by this Agreement.

“Transaction Expenses” means, without duplication, the aggregate amount of all
fees and expenses, incurred by or on behalf of the Company, the Company’s
Subsidiaries, the Equityholders, the Equityholders’ Representative or any of
their respective Affiliates in connection with the negotiation, preparation or
execution of this Agreement or any documents or agreements contemplated hereby
or the performance or consummation of the transactions contemplated hereby or
relating to bonuses, wages and severance and any other outstanding liabilities
to the independent contractors and employees of the Company or its Subsidiaries,
in each case, as a result of or in connection with the transactions contemplated
hereby and that have not been paid as of the Closing, including (i) any fees or
expenses of the Company and its Subsidiaries associated with obtaining the
necessary waivers, consents or approvals of any Persons on behalf of the Company
and its Subsidiaries, (ii) any fees or expenses of the Company and its
Subsidiaries associated with obtaining the release and termination of any Liens
(other than Permitted Liens), (iii) all brokers’ or finders’ fees of the Company
and its Subsidiaries, (iv) fees and expenses of counsel, advisors, consultants,
investment bankers, accountants, auditors and experts, (v) all sale,
change-of-control, “stay-around,” retention, or similar bonuses or payments to
current or former directors, officers, employees and other service providers of
the Company and its Subsidiaries paid or payable as a result of or in connection
with the transactions contemplated hereby (and including any severance
obligations set forth on Schedule B that are actually incurred and payable as a
result of the transactions contemplated hereby) and any Taxes payable in
connection therewith (including the employer portion of any payroll, social
security, unemployment or similar Tax imposed on such amounts), (vi) any and all
Non-Participating Payments made pursuant to Section 1(h) and (vii) any expenses
borne or to be borne by the Company and its Subsidiaries as a result of or in
connection with the transactions contemplated hereby (including the employer
portion of any payroll, social security, unemployment or similar Tax incurred in
connection with the exercise of, or payments made in respect of, any Options,
Non-Participating Options or similar arrangements). For the avoidance of doubt,
any item included in either “Current Liabilities” or “Indebtedness” shall not be
included in “Transaction Expenses,” and any item included in “Transaction
Expenses” shall not be included in “Current Liabilities” or “Indebtedness”, in
each case, solely to the extent such item actually decreases the Merger
Consideration.

“Upward Closing Working Capital Adjustment” means the amount, if any, by which
the Estimated Working Capital exceeds the Target Working Capital; provided that,
if such amount is equal to or less than one hundred twenty five thousand U.S.
dollars ($125,000), such amount shall be deemed to be zero U.S. dollars ($0.00).

“WARN Act” means The Worker Adjustment and Retraining Notification Act as well
as any similar applicable foreign, state, or local law.

 

Appendix A-11

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“Working Capital” means Current Assets minus Current Liabilities, in each case,
as of the Closing Measurement Time.

“Working Capital Escrow Amount” means an amount equal to seven hundred fifty
thousand U.S. dollars ($750,000).

 

Appendix A-12