Execution Version

AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EPICOR SOFTWARE CORPORATION,
BOBBYJONES MERGER SUB, LLC
SHOPVISIBLE, LLC
AND
ROBERT M. JONES, AS REPRESENTATIVE

Dated as of December 10, 2014

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Execution Version

Table of Contents
ARTICLE I DEFINITIONS1
ARTICLE II THE MERGER15
2.1THE MERGER.    15
2.2EFFECTIVE TIME; CLOSING.    15
2.3EFFECT OF THE MERGER.    15
2.4ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT OF SURVIVING COMPANY.    16
2.5EFFECT OF MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS.    16
2.6TREATMENT OF COMPANY OPTIONS AND COMPANY WARRANTS.    16
2.7EARN-OUT.    17
2.8CLOSING STATEMENT; PAYMENTS AT CLOSING.    18
2.9ADJUSTMENTS TO BASE MERGER CONSIDERATION.    19
2.10PAYMENT PROCESS.    21
2.11ESCROW AGREEMENT.    22
2.12TAKING OF NECESSARY ACTION; FURTHER ACTION.    23
2.13DISSENTING UNITS.    23
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY23
3.1ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.    23

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3.2ORGANIZATIONAL DOCUMENTS.    24
3.3AUTHORIZATION OF AGREEMENT.    24
3.4CAPITALIZATION.    25
3.5NO CONFLICT; REQUIRED FILINGS AND CONSENTS.    26
3.6PERMITS; COMPLIANCE.    26
3.7FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.    26
3.8ABSENCE OF CERTAIN CHANGES OR EVENTS.    27
3.9LITIGATION; DISPUTES.    29
3.10EMPLOYEE BENEFIT PLANS AND LABOR MATTERS.    29
3.11TAXES.    32
3.12PROPERTIES.    34
3.13INTELLECTUAL PROPERTY AND TECHNOLOGY.    35
3.14CERTAIN CONTRACTS.    41
3.15ENVIRONMENTAL, HEALTH AND SAFETY.    43
3.16INSURANCE.    43
3.17CERTAIN TRANSACTIONS AND AGREEMENTS.    43
3.18CUSTOMERS AND SUPPLIERS.    44
3.19CERTAIN PAYMENTS.    44

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3.20BROKERS.    44
3.21SUFFICIENCY OF ASSETS.    44
3.22DISCLOSURE.    45
3.23NO OTHER REPRESENTATIONS AND WARRANTIES.    45
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB45
4.1ORGANIZATION AND QUALIFICATION; OWNERSHIP AND INTERIM OPERATIONS OF MERGER
SUB.    45
4.2AUTHORIZATION OF AGREEMENT.    45
4.3NO CONFLICT; REQUIRED FILINGS AND CONSENTS.    46
4.4FINANCIAL ABILITY.    46
4.5BROKERS.    46
4.6LITIGATION.    46
ARTICLE V CONDUCT PRIOR TO THE CLOSING46
5.1CONDUCT OF BUSINESS.    46
5.2ACCESS AND INFORMATION.    48
ARTICLE VI ADDITIONAL AGREEMENTS48
6.1APPROPRIATE ACTIONS; CONSENTS; FILINGS; COOPERATION.    48
6.2CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS.    49

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6.3EXCLUSIVITY.    49
6.4COMPANY MEMBER APPROVAL.    50
6.5PAYOFF AMOUNTS; PAYOFF LETTERS; TRANSACTION EXPENSES.    50
6.6TAX MATTERS.    51
ARTICLE VII CONDITIONS TO CLOSING53
7.1CONDITIONS TO OBLIGATIONS OF EACH PARTY.    53
7.2ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB.    53
7.3ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY.    55
ARTICLE VIII INDEMNIFICATION56
8.1INDEMNIFICATION BY THE COMPANY MEMBERS.    56
8.2INDEMNIFICATION BY PARENT.    57
8.3SURVIVAL TIME FOR CLAIMS; CLAIM NOTICE.    57
8.4LIABILITY LIMITATIONS.    58
8.5THIRD PARTY CLAIMS.    60
8.6INDEMNIFICATION PROCEDURE.    62
8.7SATISFACTION OF CLAIMS; ESCROW MATTERS.    63
8.8TREATMENT OF INDEMNIFICATION PAYMENTS.    64
8.9REPRESENTATIVE; FEES AND EXPENSES.    64

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ARTICLE IX TERMINATION, TERMINATION FEE; AMENDMENT AND WAIVER65
9.1TERMINATION.    65
9.2EFFECT OF TERMINATION.    66
9.3FEES AND EXPENSES.    66
9.4AMENDMENT.    66
9.5WAIVER.    66
ARTICLE X GENERAL PROVISIONS66
10.1NOTICES.    66
10.2HEADINGS.    68
10.3INTERPRETATION.    68
10.4SEVERABILITY.    68
10.5ENTIRE AGREEMENT.    69
10.6DISCLOSURE SCHEDULES.    69
10.7ASSIGNMENT.    69
10.8PARTIES IN INTEREST.    69
10.9SPECIFIC PERFORMANCE.    69
10.10FAILURE OR INDULGENCE NOT WAIVER.    70
10.11GOVERNING LAW; EXCLUSIVE JURISDICTION.    70

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10.12COUNTERPARTS.    70

AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) is made and entered into as
of December 10, 2014, by and among Epicor Software Corporation, a Delaware
corporation (“Parent”), Bobbyjones Merger Sub, LLC, a Georgia limited liability
company and a wholly-owned subsidiary of Parent (“Merger Sub”), Shopvisible,
LLC, a Georgia limited liability company (the “Company”), and Robert M. Jones,
as representative of the Company Securityholders (the “Representative”).
RECITALS
WHEREAS, the board of directors and managers, as applicable, of Parent, Merger
Sub and the Company each determined that it is advisable and in the best
interests of their respective equityholders for Parent to acquire the Company by
way of the merger of Merger Sub with and into the Company with the Company being
the surviving limited liability company, in each case, upon the terms and
subject to the conditions set forth herein;
WHEREAS, the board of managers of the Company (the “Company Board”) unanimously
(a) approved the execution, delivery and performance of this Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement (collectively, the “Transactions”), and (b) determined, subject to the
terms of this Agreement and the LLC Act, to recommend that the Company Members
adopt and approve this Agreement and approve the Merger;
WHEREAS, the parties hereto have determined that the Merger shall be effected by
merging Merger Sub with and into the Company (with the Company being the
surviving limited liability company) so that upon consummation of the Merger,
Merger Sub will cease to exist and the Company will be a wholly-owned subsidiary
of Parent;
WHEREAS, concurrently with the execution of this Agreement, all of the Company
Members identified on Schedule 1.1 executed and delivered to the Company Support
Agreement in substantially the form attached hereto as Exhibit A (the “Support
Agreements”); and
WHEREAS, concurrently with the execution of this Agreement, each of the
Restrictive Covenants Agreements has been executed by the Company and each of
Robert M. Jones, Sean Cook, Josh Lloyd, Bryan Kujawski and Michael Hersh.
NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the following
respective meanings:
“Accounting Firm” has the meaning set forth in Section 2.9(d).
“Acquisition Proposal” means (a) any merger, liquidation, dissolution,
recapitalization, reorganization, share exchange, consolidation or other
business combination involving the Company, (b) any issuance or sale,
disposition or transfer of shares of capital stock or other equity securities of
the Company (or of any rights to acquire, or securities convertible into or
exchangeable for such capital stock or other equity securities), or (c) any
acquisition, sale, lease or other disposition of a material portion of the
assets of the Company, in each case, other than the Transactions contemplated by
this Agreement.
“Action” has the meaning set forth in Section 3.9.
“Actual Cash” has the meaning set forth in Section 2.9(b).
“Actual Debt” has the meaning set forth in Section 2.9(b).
“Actual Net Working Capital” has the meaning set forth in Section 2.9(b).
“Actual Transaction Expenses” has the meaning set forth in Section 2.9(b).
“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Aggregate Merger Consideration” means the Base Merger Consideration (as finally
determined in accordance with Section 2.9) plus the Earn-Out Payment (to the
extent payable hereunder).
“Annual Financial Statements” has the meaning set forth in Section 3.7(a).
“Articles of Merger” has the meaning set forth in Section 2.2.
“Balance Sheet” has the meaning set forth in Section 3.7(a).
“Balance Sheet Date” has the meaning set forth in Section 3.7(a).
“Base Merger Consideration” means $19,200,000.00 (a) plus (i) the amount of
Estimated Cash, if any, and (ii) the amount, if any, by which Estimated Net
Working Capital exceeds the Target Net Working Capital and (b) less (i) the
Estimated Transaction Expenses, (ii) the Estimated Debt and (iii) the amount, if
any, by which the Estimated Net Working Capital is less than the Target Net
Working Capital (in each case, without duplication).
“Base Merger Consideration Deficit” has the meaning set forth in Section 2.9(e).
“Base Merger Consideration Surplus” has the meaning set forth in Section 2.9(e).
“Broker” means Raymond James & Associates, Inc.
“Business” means (i) those activities, products, and services that are the same
as or similar to the activities conducted and products and services offered
and/or provided by the Company currently or within the two years prior to the
Closing Date; (ii) the business of designing, developing, marketing, licensing
and/or selling an ecommerce software platform (the “e-commerce Solution”); (iii)
the business of designing, developing, marketing, licensing, and/or selling a
multi-channel order management system (the “OMS”); (iv) providing support
services for the e-commerce Solution including, but not limited to, technical
support and maintenance; (v) providing support services for the OMS including,
but not limited to, technical support and maintenance; (vi) providing
professional services for the e-commerce Solution including, but not limited to,
consulting, implementation, customization, and training; and/or (vii) providing
professional services for the OMS including, but not limited to, consulting,
implementation, customization, and training.
“Business Day” means each day that is not a Saturday, Sunday or other day on
which banking institutions located in Atlanta, Georgia are authorized or
obligated by Law or executive order to close.
“Cap” has the meaning set forth in Section 8.4(b).
“Capped Parties” has the meaning set forth in Section 8.4(b).
“Cash” means all cash, cash equivalents (including money market accounts, money
market funds, money market instruments, certificates of deposit and demand
deposits) and marketable securities of the Company.
“Closing” has the meaning set forth in Section 2.2.
“Claim Notice” has the meaning set forth in Section 8.6(a).
“Closing Date” has the meaning set forth in Section 2.2.
“Closing Date Balance Sheet” has the meaning set forth in Section 2.9(a).
“Closing Statement” has the meaning set forth in Section 2.8(a).
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Units” means Common Units of the Company.
“Company” has the meaning set forth in the preamble to this Agreement.
“Company Approvals” has the meaning set forth in Section 3.5.
“Company Articles” means the Articles of Organization of the Company as filed
with the Secretary of State of the State of Georgia on December 29, 2005, as may
be amended from time to time.
“Company Board” has the meaning set forth in the recitals to this Agreement.
“Company Benefits Plan” has the meaning set forth in Section 3.10(a).
“Company Disclosure Schedule” has the meaning set forth in Article III.
“Company Intellectual Property” means any and all (a) Intellectual Property
Rights that are owned, or purported to be owned, by the Company, and (b) Company
Technology.
“Company Material Adverse Effect” means any event, fact, occurrence,
circumstance, condition, development, change, occurrence or effect
(collectively, “Events”) that, individually or in the aggregate with all other
events, has had or is reasonably likely to have a material adverse effect on (a)
the Business, assets, properties, prospects, results of operations or conditions
(financial or otherwise) of the Company, or (b) the ability of the Company to
consummate the Transactions; provided, however, that the following and the
effects of the following shall not be deemed, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Company Material Adverse Effect: (i) general economic,
capital market, financial, political or regulatory conditions, worldwide or in
any particular region which do not affect the Company in a materially
disproportionate manner as compared to other companies in the Company’s
industry; (ii) an occurrence, outbreak, escalation or material worsening of war,
armed hostilities, acts of terrorism, political instability or other national or
international calamity, crisis or emergency, or any governmental or other
response or reaction to any of the foregoing which do not affect the Company in
a materially disproportionate manner as compared to other companies in the
Company’s industry; (iii) any action required by this Agreement or any action
taken (or omitted to be taken) with the written consent of or at the written
request of Parent; or (iv) any changes in applicable Laws or accounting rules
(including GAAP) which do not affect the Company in a materially
disproportionate manner as compared to other companies in the Company’s
industry.
“Company Member Approval” has the meaning set forth in Section 3.3(b).
“Company Members” means the holders of Company Units, collectively.
“Company Operating Agreement” means that certain Seventh Amended and Restated
Operating Agreement, dated as of the date hereof, by and among the Company and
the parties named therein, as amended, and as may be amended from time to time.
“Company Option Plan” has the meaning set forth in Section 3.4(b).
“Company Options” means the outstanding options issued under the Company Option
Plan prior to the Effective Time.
“Company Organizational Documents” has the meaning set forth in Section 3.2.
“Company Products” means all products and services developed (including products
and services for which development is ongoing), manufactured, made commercially
available, marketed, distributed, supported, sold, imported for resale or
licensed out by or on behalf of the Company, that are currently under
development, currently provided to customers of the Company, currently licensed
by the Company to customers of the Company or have been licensed or provided to
customers in the five years prior to the Closing Date, including those products
and services that use the Software products of the Company that are offered as a
service over a network (e.g., the Internet).
“Company Registered Intellectual Property” has the meaning set forth in Section
3.13(c).
“Company Representatives” has the meaning set forth in Section 6.3.
“Company Securityholders” means the holders of Company Units, Company Options
and Company Warrants, collectively.
“Company Technology” means all Technology owned, or purported to be owned, by
the Company.
“Company Units” means the Common Units and the Preferred Units, collectively.
“Company Warrants” means, collectively, Sean Cook, Allen Graber, Robert M.
Jones, Bryan Kujawski, Josh Lloyd, and Brennan Ryan.
“Competition Law” shall mean any Law that is designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition.
“Confidential Information” means information owned by, held by, or known to, a
party to this Agreement that is not generally known to third parties who are not
subject to confidentiality obligations to the Company or readily ascertainable
through proper means, whether tangible or intangible, including algorithms,
customer lists, ideas, designs, formulas, know-how, methods, processes,
programs, prototypes, systems and techniques; Confidential Information may
include information that also is a Trade Secret; provided, however, that with
respect to the Non-Disclosure Agreement, Confidential Information shall have the
meaning set forth therein.
“Consideration Certificate” has the meaning set forth in Section 2.9(a).
“Contract” means any contract, agreement, subcontract, lease, understanding,
instrument, note, option, warranty, purchase order, license, sublicense,
mortgage, guarantee, purchase order, insurance policy, benefit plan, obligation,
commitment or undertaking of any nature (in each case, whether oral or in
writing).
“Current Liabilities” means the Company’s total current liabilities, as defined
by and determined in accordance with GAAP (a) excluding (i) any Debt that would
be categorized as a “Current Liability” in accordance with GAAP, (ii)
Transaction Expenses, in each case of (i) and (ii), which shall be set forth in
the Closing Statement and subject to the adjustments set forth in Section 2.9
and (iii) deferred rent and (b) including all unearned or deferred revenue
(whether or not classified as a current or long-term liability).  
“Customization Obligations” has the meaning set forth in Section 3.13(s).
“Damages” means all losses, damages, deficiencies, claims, judgments, interest,
costs, amounts paid in settlement, Liabilities, obligations, Taxes, fines,
penalties, expenses and fees of whatever kind (including court costs and
reasonable experts’, attorneys’ and other professionals’ fees and expenses), and
any other cost of settlement, investigation, defense, arbitration and other
enforcement costs; provided that Damages shall not include punitive damages
(except to the extent paid or payable in connection with a Third Party Claim).
“Debt” means, without duplication, the outstanding principal amount of, accrued
and unpaid interest on and other payment obligations arising under any
obligations of the Company or consisting of (a) indebtedness of the Company for
borrowed money, including such indebtedness evidenced by notes, bonds,
debentures or similar instruments, or in respect of loans or advances, (b) all
obligations issued or assumed as the deferred purchase price of assets, goods or
services, all conditional sale obligations of the Company and all obligations of
the Company under any title retention agreement (other than trade payables or
accruals incurred in the ordinary course of business), (c) all obligations under
capital or synthetic leases, (d) accrued Taxes, (e) all obligations of the
Company for the reimbursement of any obligor on any letter of credit, whether or
not drawn, bankers’ acceptance or similar credit transaction, (f) all
obligations of the Company under an interest rate or currency swap transaction
(valued at the termination value thereof), (g) all obligations of the Company
secured by a contractual Lien, (h) any severance, unfunded pensions or deferred
compensation owed by the Company to any of the Company’s current or former
employees, members, directors, officers, consultants or third party service
providers, (i) any obligations resulting from the resolution or settlement of a
private or governmental action, suit, arbitration, mediation or judicial
proceeding to which the Company is a party or otherwise subject, (j) any
liability or obligation of the Company under any deferred compensation
arrangement or phantom stock arrangement, (k) any off-balance sheet financing of
the Company, (l) any amounts owed by the Company under any non-competition or
similar arrangements, (m) all obligations for underfunded employee pension
benefit plans and any unsatisfied obligation for “withdrawal liability” to a
“multiemployer plan” as such terms are defined under ERISA, (n) any accrued
interest, prepayment premiums or penalties or other costs or expenses related to
any of the foregoing, (o) any indebtedness or obligation properly classified as
indebtedness under GAAP, (p) any guarantees with respect to any of the
obligations described in clauses (a) through (o) above of any other Person; and
any Indirect Tax Liability.
“Deductible” has the meaning set forth in Section 8.4(a).
“Dissenting Units” has the meaning set forth in Section 2.13.
“Earn-Out Milestones” has the meaning set forth in Section 2.7(a).
“Earn-Out Payment” has the meaning set forth in Section 2.7(a).
“Effective Time” has the meaning set forth in Section 2.2.
“Employee Plan” means any plan, program, policy, arrangement or Contract,
whether or not reduced to writing, and whether covering a single individual or a
group of individuals, that is (a) an employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, (b) an employee pension benefit plan within
the meaning of Section 3(2) of ERISA, (c) an equity bonus, equity purchase,
equity option, restricted equity, phantom equity, deferred equity, equity
appreciation right or similar equity-based plan or (d) any other
deferred-compensation, retirement benefit, severance benefit, disability
benefit, death benefit, welfare-benefit, reimbursement, bonus, profit-sharing,
commission, incentive, vacation, sickness, paid-time off or fringe-benefit plan,
program or arrangement.
“Equity Interest” means, with respect to any Person, (a) any capital stock,
equity interest, partnership or membership interest or unit, unit of
participation or other similar interest (however designated) in such Person, and
(b) any option, warrant, purchase right, conversion right, exchange right or
other Contract that would entitle any other Person to acquire any such interest
in such Person or otherwise entitle any other Person to share in the equity,
profits, earnings, losses or gains of such Person (including equity
appreciation, phantom equity, profits interest, profit participation or other
similar rights).
“ERISA Affiliate” means, with respect to a Person (the “First Person”), any
other Person whose employees would be treated as employed by a single employer
with the employees of the First Person under the provisions of Sections 414(b),
(c), (m) or (o) of the Code.
“Escrow Account” means, collectively, the Indemnification Escrow Account and the
NWC Escrow Account.
“Escrow Agent” means Wells Fargo Bank, N.A.
“Escrow Agreement” means that certain Escrow Agreement by and among Escrow
Agent, Parent and the Representative as defined in Section 2.11.
“Escrow Amount” means collectively, the Indemnification Escrow Amount and the
NWC Escrow Amount.
“Escrow Funds” means collectively, the Indemnification Escrow Funds and the NWC
Escrow Funds.
“Estimated Cash” has the meaning set forth in Section 2.9(a).
“Estimated Debt” has the meaning set forth in Section 2.9(a).
“Estimated Net Working Capital” has the meaning set forth in Section 2.9(a).
“Estimated Transaction Expenses” has the meaning set forth in Section 2.9(a).
“Events” has the meaning set forth in this Article I.
“Final Base Merger Consideration” has the meaning set forth in Section 2.9(d)
“Financial Statements” has the meaning set forth in Section 3.7(a).
“First Person” has the meaning set forth in this Article I.
“Fundamental Representations” has the meaning set forth in Section 8.3(a)(iv).
“GAAP” means United States generally accepted accounting principles.
“Governmental Authority” means any court, administrative agency or commission or
other United States, federal, national, provincial, state, local, foreign or
other governmental authority, of any nature (including any government,
quasi-governmental authority, instrumentality, board, bureau, agency, court,
commission or any regulatory, administrative or other department, agency or
branch of any of the foregoing) or any body entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
“Gross Proceeds” means Base Merger Consideration (without giving effect to any
reduction for Transaction Expenses and Debt) plus, to the extent paid or payable
the Earn-Out Amount.
“Indemnification Escrow Account” means the account into which the
Indemnification Escrow Amount is deposited with the Escrow Agent and held by it,
subject to disbursement as provided in Article VIII hereof and in the Escrow
Agreement.
“Indemnification Escrow Amount” means $2,500,000 together with any interest,
gains and other distributions on such amount, as reduced from time to time by
the amount of monies distributed from the Indemnification Escrow Funds in
accordance with this Agreement and the Escrow Agreement.
“Indemnification Escrow Funds” means the funds maintained from time to time in
the account established pursuant to the Escrow Agreement (which funds initially
shall be equal to the Indemnification Escrow Amount and shall be disbursed and
released in accordance with the terms and conditions of this Agreement and the
Escrow Agreement).
“Indemnification Objection Notice” has the meaning set forth in Section 8.6(b).
“Indemnified Party” means a Parent Indemnified Party or Seller Indemnified
Party, as applicable.
“Indemnifying Party” means a Parent Indemnifying Party or Seller Indemnifying
Party, as applicable.
“Indirect Tax Liability” means the amount of the Tax liability of the Company
for transactions undertaken by the Company prior to the Closing Date for which
the Company was required under state, local or federal law to collect and remit
taxes on customer or other third party purchases and purchases made by the
Company, but for which the Company did not so collect or remit. For the
avoidance of doubt, Indirect Tax Liability includes sales, use taxes, ad valorem
and Canadian GST, QST and PST taxes.
“Information Systems” means all computer hardware, data storage systems,
computer and communications networks (other than the Internet), interfaces,
firewalls, and other apparatuses that are owned by or leased to the Company and
used to create, manipulate, store, transmit, exchange, or receive information in
any electronic form.
“Insiders” has the meaning set forth in Section 3.17.
“Insurance Policies” has the meaning set forth in Section 3.16.
“Intellectual Property Rights” means any and all intellectual property and other
proprietary rights, whether registered or unregistered, which may exist under
the laws of any jurisdiction, including any and all rights: (a) arising out of,
or associated with, copyrightable works and rights associated with works of
authorship, including those arising under the Copyright Act of 1976, as amended,
and any and all copyrights therefor, including any and all copyright
registrations and renewals thereof and applications for registration of
copyright therefor; (b) arising out of, or associated with, inventions (whether
patentable or unpatentable and whether or not reduced to practice), improvements
to inventions, patents, patent applications and rights granted under the Patent
Act of 1952, as amended, together with any reissuances, divisions,
continuations, continuations-in-part, revisions, extensions, or reexaminations
of any such patent or patent application; (c) arising out of, or associated
with, trademarks, words, names, symbols, designs or other designation, or a
combination of any of the preceding items, used to uniquely identify the origin
of goods, a group, a product or a service, or to indicate a form of
certification, including logos, trade names, trade dress, trademarks, service
marks, and corporate names, and rights granted under the Lanham Act of 1946, as
amended, together with all goodwill relating thereto, registrations and renewals
thereof and applications for registration therefor; (d) arising out of, or
associated with, Confidential Information or Trade Secrets, including know-how,
technical, marketing or pricing information, notes, reports, drawings, works,
devices, makes, models, works-in-progress, research and development, formulas,
algorithms, processes, data, designs, layouts, customer and supplier lists,
inventions, and creations; (e) arising out of, or associated with a person’s
name, voice, signature, photograph, or likeness, including rights of
personality, privacy, and publicity; (f) of attribution and integrity and other
moral rights of an author; (g) in internet domain names and websites, including
all related internet protocol addresses, together with all goodwill relating
thereto and all applications and registrations and renewals therefor; (h) in
Software (whether in general release or under development) and databases; and
(i) to prosecute and perfect any of the foregoing through administrative
prosecution, registration, recordation, or other proceeding, and all causes of
action and rights to sue or seek other remedies arising from or relating to the
foregoing, including for any past or ongoing infringement, misuse or
misappropriation, anywhere in the world.
“IRS” means the U.S. Internal Revenue Service.
“Intellectual Property Cap” has the meaning set forth in Section 8.4(b).
“Knowledge of the Company,” “to the Company’s Knowledge” or any similar phrase
means the knowledge of any Sean Cook, Josh Lloyd, Shane Desrochers, Robert M.
Jones, Richard Lynch and Adele Lester. Any such person will be deemed to have
knowledge of a particular fact, circumstance, event or other matter if such
knowledge would reasonably expected to be obtained by such person in the
ordinary course of the performance of his duties and responsibilities for the
Company or if such Person would have discovered such fact, circumstance, event
or other matter after reasonable inquiry
“Laws” means any federal, national, provincial, state, local, United States,
foreign or other statute, law (both common and statutory law and civil and
criminal law), treaty, convention, ordinance, regulation, rule, code, decree,
judgment, writ, injunction, regulatory code (including statutory instruments,
guidance notes, circulars, directives, decisions, rules, regulations and
restrictions) or other order, or other requirement or rule of law or an Order of
any Governmental Authority or any self-regulatory organization.
“Lenders” means Robert M. Jones and Michael J. Hersh.
“Letter of Transmittal” has the meaning set forth in Section 2.10(a).
“Liability” or “Liabilities means any and all Debts, liabilities and obligations
of any nature whatsoever, whether accrued or fixed, absolute or contingent,
mature or unmatured, determined or indeterminable, known or unknown, asserted or
unasserted, accrued or unaccrued, liquidated or unliquidated, and whether or not
due or becoming due, including those arising under any Law or action and those
arising under any Contract.
“Liens” means any mortgage, deed of trust, hypothecation, pledge, lien
(statutory or otherwise), security interest, charge, right of first refusal,
option, claim, restriction or encumbrance of any kind, whether voluntary or
involuntary (including any conditional sale or other title retention agreement,
any lease in the nature thereof and any agreement to give any security interest)
and, with respect to Equity Interests, any option or other right to purchase,
right of first refusal or any restriction on voting or other rights.
“LLC Act” means the Georgia Limited Liability Company Act, as amended.
“Material Contract” has the meaning set forth in Section 3.14(b).
“Member Written Consent” shall mean the action by written consent executed by
the Company Members, in accordance with the relevant provisions of the LLC Act
and the Company Organizational Documents, constituting the Company Member
Approval, in substantially the form attached hereto as Exhibit B.
“Merger” has the meaning set forth in Section 2.1.
“Merger Sub” has the meaning set forth in the preamble to this Agreement.
“Merger Sub Units” has the meaning set forth in Section 2.5(c).
“Most Recent Annual Financial Statements Date” has the meaning set forth in
Section 3.7(a).
“Net Working Capital” means (a) the sum of those current assets included in the
line items provided on the illustrative calculation of Net Working Capital set
forth on the Net Working Capital Schedule less (b) the sum of those Current
Liabilities, in each case, determined in accordance with GAAP. For the avoidance
of doubt and notwithstanding the foregoing, the calculation of Net Working
Capital shall exclude (w) cash and cash equivalents, (x) Transaction Expenses to
the extent such Transaction Expenses are included in the Closing Statement and
the calculation of the Base Merger Consideration, (y) any Debt to the extent
such Debt is included in the Closing Statement and the calculation of the Base
Merger Consideration and (z) deferred rent and (b) shall include in Current
Liabilities all unearned or deferred revenue (whether or not classified as a
current or long-term liability). The line items included in the calculation
shall be computed in accordance with GAAP. For purposes of illustration only,
the Net Working Capital sets forth an example of the calculation of Net Working
Capital.
“Net Working Capital Schedule” means the schedule pursuant to which Net Working
Capital is to be calculated, attached as Annex I hereto.
“Non-Disclosure Agreement” means that certain Mutual Non-Disclosure Agreement by
and between the Company and Epicor Retail Solutions Corporation, a Nova Scotia
Company, dated on August 30, 2013.
“NWC Escrow Account” means the account into which the NWC Escrow Amount is
deposited with the Escrow Agent and held by it, subject to disbursement as
provided in Section 2.9 and Article VIII and in the Escrow Agreement.
“NWC Escrow Amount” means $300,000 together with any interest, gains and other
distributions on such amount, as reduced from time to time by the amount of
monies distributed from the NWC Escrow Funds in accordance with this Agreement
and the Escrow Agreement.
“NWC Escrow Funds” means the funds maintained from time to time in the account
established pursuant to the Escrow Agreement (which funds initially shall be
equal to the NWC Escrow Amount and shall be disbursed and released in accordance
with the terms and conditions of this Agreement and the Escrow Agreement).
“Object Code” means Software, substantially or entirely in binary form, which is
intended to be directly executable by a computer after suitable processing and
linking but without the intervening steps of compilation or assembly.
“Objection Notice” has the meaning set forth in Section 2.9(c).
“Open Source License” means (a) any Software that contains, or is derived in any
manner in whole or in part from, any Software that is distributed as free
Software, open source Software (e.g., Linux) or under similar licensing or
distribution models; (b) any Software that may require as a condition of use,
modification or distribution that such Software or other Software incorporated
into, derived from or distributed with such Software: (i) be disclosed or
distributed in source code form; (ii) be licensed for the purpose of making
derivative works; or (iii) be redistributable at no charge; and (c) Software
licensed or distributed under any of the following licenses or distribution
models, or licenses or distribution models similar to any of the following: (1)
GNU's General Public License (GPL) or Lesser/Library GPL (LGPL); (2) the
Artistic License (e.g., PERL); (3) the Mozilla Public License; (4) the Netscape
Public License; (5) the Sun Community Source License (SCSL); (6) the Sun
Industry Source License (SISL); (7) the Apache Software License; and (8) other
open source licenses that have been approved by the Open Source Initiative™ as
complying with its definition of “open source.”
“Open Source Software” has the meaning set forth in Section 3.13(i).
“Order” means any judgment, writ, decree, award, compliance agreement,
injunction or order (whether judicial, administrative or arbitral) and any
legally binding determination of any Governmental Authority or arbitrator.
“Outside Date” has the meaning set forth in Section 9.1(e).
“Parent” has the meaning set forth in the preamble to this Agreement.
“Parent Certificate” has the meaning set forth in Section 2.9(b).
“Parent Closing Balance Sheet” has the meaning set forth in Section 2.9(b).
“Parent Earn-Out Certificate” has the meaning set forth in Section 2.7(b).
“Parent Escrow Interest” has the meaning set forth in Section 2.8(c).
“Parent Indemnified Party” has the meaning set forth in Section 8.1.
“Parent Indemnifying Party” has the meaning set forth in Section 8.2.
“Parent Representatives” has the meaning set forth in Section 5.2.
“Payoff Amounts” has the meaning set forth in Section 6.5.
“Payoff Letters” has the meaning set forth in Section 6.5.
“Pending IP” has the meaning set forth in Section 3.13(c).
“Permits” means all permits, franchises, grants, authorizations, registrations,
licenses, easements, variances, exemptions, consents, certificates, approvals,
orders and similar rights obtained, or required to be obtained by the Company.
“Permitted Liens” has the meaning set forth in Section 3.12(a).
“Person” means an individual or entity, including a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a Governmental
Authority (or any department, agency, or political subdivision thereof).
“Pre-Closing Tax Period” means (i) any Tax period ending on or before the
Closing Date, and (ii) with respect to a Straddle Period, any portion thereof
ending on, and including, the Closing Date.
“Post-Closing Tax Period” means any taxable period ending following the Closing
Date and (ii) with respect to a Straddle Period, any portion thereof following
the Closing Date.
“Preferred Units” means the Series A Preferred Units, the Series A-1 Preferred
Units, the Series A-2 Preferred Units and the Series B Preferred Units,
collectively.
“Proceeds Cap” has the meaning set forth in Section 8.4(b). For the avoidance of
doubt, the Proceeds Cap shall not include the repayment of Debt in accordance
with Section 6.5 to the Lenders identified on Schedule 6.5.
“Pro Rata Portion” means the percentage obtained by dividing (a) the number of
Company Units held by each Company Member by (b) the number of Company Units
held by all Company Members, in each case with all Preferred Units being
calculated on an as converted basis. For purposes of Article VIII, each time a
Company Member reaches their Proceeds Cap, Pro Rata Portion with respect to
Damages in excess of the amount at which the Proceeds Cap is reached would be
recalculated for the remaining Company Members who have not reached their
Proceeds Cap by excluding such Company Member’s Company Units held by Company
Members who have reached their Proceeds Cap from subsection (b) above. For the
avoidance of doubt, the sum of all Company Members’ Pro Rata Portion shall be
100% at all times.
“Registered Intellectual Property” means all Intellectual Property Rights, that
are the subject of an application, certificate, filing, registration, or other
document issued by, filed with, or recorded by, any Governmental Authority at
any time in any jurisdiction.
“Repaid Debt” has the meaning set forth in Section 6.5.
“Representative” has the meaning set forth in the preamble to this Agreement.
“Representative Earn-Out Objection Notice” has the meaning set forth in Section
2.7(b)
“Representative Losses” has the meaning set forth in Section 8.9(c).
“Restrictive Covenants Agreements” has the meaning set forth in Section 7.2(q).
“Securities Act” means the Securities Act of 1933, as amended.
“Seller Indemnified Party” has the meaning set forth in Section 8.2.
“Seller Indemnifying Party” has the meaning set forth in Section 8.1.
“Series A Preferred Units” means the Series A Preferred Units of the Company
“Series A-1 Preferred Units” means the Series A-1 Preferred Units of the
Company.
“Series A-2 Preferred Units” means the Series A-2 Preferred Units of the
Company.
“Series B Preferred Units” means the Series B Preferred Units of the Company.
“Shrink Wrap Code” means any generally commercially available software in
executable code form that is available for a cost of not more than $1,000 for an
annual license for a single user or work station (or $2,000 annually in the
aggregate for all users and work stations for the specific application).
“Significant Customer” has the meaning set forth in Section 3.18(a).
“Significant Supplier” has the meaning set forth in Section 3.18(b).
“Software” means (a) computer programs and software systems, including any and
all software implementations of algorithms, tool sets, modules, libraries,
files, models and methodologies or software code of any nature, whether
operational, under development or inactive, including all Object Code, Source
Code, data files, rules, definitions or methodology derived from the foregoing
and any derivations, updates, enhancements and customization of any of the
foregoing, processes, know-how, operating procedures, methods and all other
Intellectual Property Rights embodied with the foregoing, technical manuals,
user manuals and other documentation thereof, whether in machine-readable form,
programming language or any other language or symbols and whether stored,
encoded, recorded or written on disk, tape, film, memory device, paper or other
media of any nature, and (b) all User Documentation, including user manuals and
training materials, relating to any of the foregoing.
“Soliciting Materials” has the meaning set forth in Section 6.4(c).
“Source Code” means Software and code, in form other than Object Code or machine
readable form, including related programmer comments and annotations, help text,
data and data structures, instructions and procedural, object-oriented and other
code, which may be printed out or displayed in human readable form.
“Specified Time” has the meaning set forth in Section 6.3.
“Straddle Period” has the meaning set forth in Section 6.6(b).
“Subsidiary” means, with respect to any Person, any corporation, partnership,
trust, limited liability company, association or other business entity of which
(a) if a corporation, a majority of the total voting power of shares of 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 (b) if a partnership,
limited liability company, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons shall be allocated a majority of partnership, limited liability
company, association or other business entity gains or losses, shall have a
majority of the voting-rights to elect or designate a majority of the board of
directors, managers or other governing body, or shall be or control the managing
director or general partner of such partnership, limited liability company,
association or other business entity.
“Support Agreements” has the meaning set forth in the recitals to this
Agreement.
“Surviving Company” has the meaning set forth in Section 2.1.
“Target Net Working Capital” means negative Forty Two Thousand Two Hundred Forty
Nine Dollars (-$42,249).
“Tax” means any U.S. federal, state, local or municipal, foreign or other tax
(including any income tax, franchise tax, license tax, employment tax, premium
tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated
tax, alternative or add-on minimum tax, unemployment tax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, real property tax, personal
property tax, registration tax, business tax, profits tax, environmental tax
(including taxes pursuant to Code Section 59A), capital stock tax, escheat,
abandoned or unclaimed property, severance tax, occupation tax, windfall profits
tax, social security (or similar) tax, disability tax, withholding tax or
payroll tax), levy, tariff, or duty (including any customs duty), or any other
tax, charge, fee, impost, levy or other assessment of any kind whatsoever
(including any fine, penalty, interest or addition to tax with respect thereto,
whether disputed or not and including any obligation to indemnify or otherwise
assume or succeed to the Tax Liability of another Person).
“Tax Contest” has the meaning set forth in Section 6.6(g).
“Tax Return” means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“Technology” means all forms of technology, including any or all of the
following: algorithms, APIs, databases, data collections, diagrams, inventions,
methods and processes (whether or not patentable), network configurations and
architectures, protocols, schematics, specifications, Software (in any form,
including Source Code and Object Code), techniques, interfaces, URLs, websites,
in each case whether or not registered with a Governmental Entity or embodied in
any tangible form.
“Third Party Claim” has the meaning set forth in Section 8.5(a).
“Third-Party Technology” has the meaning set forth in Section 3.13(e).
“Trade Secret” means information held confidential and deemed a trade secret
under applicable Law.
“Transactions” has the meaning set forth in the recitals to this Agreement.
“Transaction Documents” means this Agreement, the Company Disclosure Schedule,
the closing certificates delivered pursuant to this Agreement, the Certificate
of Merger, the Escrow Agreement, the Employment Agreements, Support Agreements,
the Restrictive Covenants Agreements and all other agreements, schedules and
certificates contemplated by this Agreement.
“Transaction Expenses” means the aggregate amount of all out-of-pocket fees and
expenses, incurred by or on behalf of the Company or any Company Securityholder
that was paid or is payable by the Company in connection with the process of the
Transactions (including any auction or sale process) or otherwise relating to
the negotiation, preparation or execution of this Agreement, the other
Transaction Documents or any documents or agreements contemplated hereby or the
performance or consummation of the transactions contemplated hereby or relating
to bonuses, including (a) any fees and expenses associated with obtaining
necessary or appropriate waivers, consents or approvals of any foreign, federal,
state or local governments or governmental agencies or third parties on behalf
of the Company or any Company Securityholder, (b) any fees or expenses
associated with obtaining the release and termination of any Liens, (c) all
brokers’ or finders’ fees, (d) fees and expenses of counsel, advisors,
consultants, investment bankers, accountants, auditors and experts of the
Company, (e) all sale, change-of-control, severance, “stay-around,” retention,
success or similar bonuses or payments to current or former directors, employees
and other service providers of the Company paid or payable as a result of or in
connection with (in whole or in part) the transactions contemplated hereby (and
the employer-side Taxes and any amounts paid or to be paid to offset or gross-up
any Person for any excise Taxes or income Taxes associated with any such
payments or with respect to any exercise of Company Options) and (f) any bonus,
profit-sharing or other discretionary payments payable to employees and other
service providers of the Company.
“Transfer Taxes” has the meaning set forth in Section 6.6(c).
“Treasury Regulations” means the regulations (including temporary regulations)
of the United States Treasury Department pertaining to the Code.
“Unaudited Financial Statements” has the meaning set forth in Section 3.7(a).
“Unresolved Claims” has the meaning set forth in Section 8.7(c).
“User Documentation” means explanatory and informational materials concerning
the Company Products and Company Technology, in printed or electronic form,
which the Company has released for distribution to end users with such Company
Products or Company Technology, which may include manuals, descriptions, user or
installation instructions, diagrams, printouts, listings, flow-charts and
training materials, contained on visual media such as paper or photographic
film, or on other physical storage media in machine readable form.
ARTICLE II
THE MERGER
2.1    The Merger.
At the Effective Time and subject to and upon the terms and conditions of this
Agreement and the applicable provisions of the LLC Act, Merger Sub shall be
merged with and into the Company (the “Merger”), the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving company and as a direct, wholly owned subsidiary of Parent. The
Company, as the surviving company after the Merger, is hereinafter sometimes
referred to as the “Surviving Company.”
2.2    Effective Time; Closing.
On the Closing Date, and upon the terms and subject to the conditions of this
Agreement and the applicable provisions of the LLC Act, the parties hereto shall
cause the Merger to be consummated by filing articles of merger in substantially
the form attached hereto as Exhibit C (the “Articles of Merger”) with the
Secretary of State of the State of Georgia in accordance with the relevant
provisions of the LLC Act (the time of such filing (or such later time as may be
agreed in writing by the Company and Parent prior to the Closing and specified
in the Articles of Merger) being the “Effective Time”) concurrently with or as
soon as practicable following the Closing. The consummation of the Merger (the
“Closing”) shall take place at the offices of Morris, Manning & Martin, LLP,
1600 Atlanta Financial Center, 3343 Peachtree Road, N.E., Atlanta, Georgia 30326
at 10:00 a.m. local time no later than the date that is three (3) Business Days
after the satisfaction or waiver of the conditions set forth in Article VII
(other than those conditions that are waived or, which by their terms, are to be
satisfied on the Closing Date) (the date on which the Closing actually occurs
being the “Closing Date”).
2.3    Effect of the Merger.
(a)    General. At the Effective Time, the effect of the Merger shall be as
provided in this Agreement, the Articles of Merger and the applicable provisions
of the LLC Act. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all of the assets, properties, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Company, and all of the debts, liabilities, obligations,
restrictions and duties of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions and duties of the Surviving Company.
(b)    Officers and Managers.
(i)    At the Effective Time, the members of the board of managers of Merger Sub
immediately prior to the Effective Time shall be appointed as the members of the
board of managers of the Surviving Company immediately after the Effective Time,
until their respective successors are duly elected or appointed and qualified in
accordance with applicable Law and the organizational documents of the Surviving
Company.
(ii)    At the Effective Time, the officers of the Merger Sub immediately prior
to the Effective Time shall be appointed as the officers of the Surviving
Company immediately after the Effective Time, until their respective successors
are duly appointed and qualified in accordance with applicable Law and the
organizational documents of the Surviving Company.
2.4    Articles of Organization and Operating Agreement of Surviving Company.
(a)    Articles of Organization. The Articles of Organization of the Company
shall remain the Articles of Organization of the Surviving Corporation at the
Effective Time.
(b)    Operating Agreement. As of the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub or the Company, the operating
agreement of the Surviving Company shall be amended and restated to read the
same as the operating agreement of Merger Sub, as in effect immediately prior to
the Effective Time, except that all references to Merger Sub in the operating
agreement of the Surviving Company shall be changed to refer to the Company.
2.5    Effect of Merger on the Capital Stock of the Constituent Corporations.
(a)    Effect on Company Units. Upon the terms and subject to the conditions of
(x) this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of Parent, Merger Sub, the Company, the Representative or
the Company Securityholders, each Company Unit issued and outstanding
immediately prior to the Effective Time (excluding Dissenting Units and Company
Units to be cancelled pursuant to Section 2.5(b)) will be cancelled and
extinguished and the holders of such cancelled Company Units shall be entitled
to receive the portion of such Base Merger Consideration payable to such Company
Member in accordance with Section 8.2 of the Company Operating Agreement;
provided that each Company Member’s Pro Rata Portion of the Escrow Amount with
respect to such units shall be withheld at the Effective Time and deposited with
the Escrow Agent in accordance with this Agreement, with each such Company
Member having a contingent right to receive such Company Member’s Pro Rata
Portion of any amount released from escrow for the benefit of the Company
Members; provided, further, that, subject to the terms of this Agreement, each
Company Member shall have the contingent right to receive such Company Member’s
Pro Rata Portion of (x) any Earn-Out Payment actually payable, contingent upon
the satisfaction of the Earn-Out Milestones or (y) any Base Merger Consideration
Surplus. The Base Merger Consideration shall be payable without interest as set
forth in this Article II.
(b)    Cancellation of Treasury and Parent-Owned Units. Notwithstanding the
provisions of Section 2.5(a) above, each Company Unit held by the Company or
owned by Merger Sub, Parent or any direct or indirect wholly-owned Subsidiary of
the Company or of Parent immediately prior to the Effective Time shall be
cancelled and extinguished without any conversion thereof and without payment of
any consideration therefor.
(c)    Capital Stock of Merger Sub. Each unit of Merger Sub (the “Merger Sub
Units”) issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable unit of the
Surviving Company. Each certificate (if certificated) evidencing units of Merger
Sub Units outstanding immediately prior to the Effective Time shall evidence
ownership of such units of the Surviving Company.
2.6    Treatment of Company Options and Company Warrants.
(a)    Prior to the Effective Time and in accordance with the Company Option
Plan, the Company Board will accelerate the vesting of each Company Option that
is outstanding immediately prior to the Effective Time to a date prior to the
Effective Time and conditioned upon the consummation of the Merger, with the
stipulation that such Company Options will terminate if not exercised prior to
the Effective Time.
(b)    As of the date hereof, each holder of Company Warrants executed a warrant
exercise agreement pursuant to which each such holder’s Company Warrant was
exercised subject to and contingent upon the occurrence of the Merger.
2.7    Earn-Out.
(a)    In addition to the Base Merger Consideration payable to the Company
Members pursuant to the terms hereof, the Company Members shall be entitled to
receive their respective Pro Rata Portion of the Earn-Out Payment determined
pursuant to Exhibit E (the “Earn-Out Payment”) in the event the Business
achieves the performance milestones described on Exhibit E during the Earn-Out
Period (the “Earn-Out Milestones”).
(b)    The calculation of the Earn-Out Payment shall be initially determined in
good faith by Parent within seventy-five (75) days of the end of the applicable
Earn-Out Period. Upon such determination, Parent shall deliver a certificate to
the Representative setting forth Parent’s calculation of the Earn-Out Payment,
together with all reasonable supporting documentation necessary for the
Representative to confirm Parent’s calculation of the Earn-Out Payment (the
“Parent Earn-Out Certificate”). Within twenty (20) Business Days following the
Representative’s receipt of the Parent Earn-Out Certificate, the Representatives
may deliver a written notice to Parent objecting to the Parent’s calculation of
such Earn-Out Payment in the Parent Earn-Out Certificate (the “Representative
Earn-Out Objection Notice”); provided that if the Representative fails to
deliver a Representative Earn-Out Objection Notice, the calculation of the
Earn-Out Payment set forth in the Parent Earn-Out Certificate shall be deemed
final and binding on the parties. Upon the delivery of the Representative
Earn-Out Objection Notice within such twenty (20) Business Day period, the
Representative and the Parent shall confer in good faith for a period of up to
fifteen (15) Business Days in an attempt to resolve any disagreement and any
resolution by them shall be in writing and shall be final and binding. If, after
such fifteen (15) Business Day period, the Parent and the Representative cannot
resolve any such disagreement, then the parties shall engage the Accounting Firm
to review the calculations for the Earn-Out Payment. After review of such
calculations, the Accounting Firm shall promptly determine the amount of the
Earn-Out Payment and such determination shall be final and binding on the
parties. In conducting its review, the Accounting Firm shall consider only items
in dispute, and shall base its determination solely on presentations of Parent
and Representatives (i.e., no independent investigation). The fees and expenses
of the Accounting Firm shall be allocated between Parent and the Representative
so that the Representative shall be responsible for that portion of the fees and
expenses equal to such fees and expenses multiplied by a fraction, the numerator
of which is the aggregate dollar value of issues in dispute submitted to the
Accounting Firm that are resolved in a manner further from the position
submitted to the Accounting Firm by the Representative and closer to the
position submitted to the Accounting Firm by Parent (as finally determined by
the Accounting Firm), and the denominator of which is the total dollar value of
the issues in dispute so submitted, and Parent shall be responsible for the
remainder of such fees and expenses. Any portion of the Accounting Firm’s fees
and expenses payable hereunder by the Representative shall be paid by the
Company Members in accordance with their respective Pro Rata Portion.
(c)    In the event the Earn-Out Milestones are finally determined to be
satisfied in accordance with this Section 2.7, then Parent shall pay (or caused
to be paid) to the Company Members (in accordance with each such Company
Member’s Pro Rata Portion) the aggregate amount of the Earn-Out Payment
allocated as determined pursuant to Section 2.7(a).
(d)    The parties acknowledge that the payment of any Earn-Out Payment is
contingent upon the future Net Revenue (as defined on Exhibit E) derived by
Parent from the products and services of the Company during the applicable
Earn-Out Periods.  Parent shall make or cause to be made all business decisions
with respect to the operation of the Business following the Closing in good
faith, and not take, or permit to be taken, any action which has the sole
objective of avoiding, circumventing or minimizing the opportunity to achieve
the Earn-Out Payments hereunder or the ability of the Company Members to receive
the Earn-Out Payments.
(e)    Notwithstanding anything to the contrary set forth herein, in the event
of the sale of all or substantially all of the assets of the Business by Parent
in a transaction in which this Agreement is not assigned to the purchaser in
such sale transaction, Parent, in its sole discretion, shall either (i) obtain
such purchaser’s commitment to assume the obligations with respect to the
payment of the Earn-Out Payments if such payments become payable (subject to the
conditions set forth herein and in Exhibit E, including the achievement of the
Earn-Out Milestones) with respect to any Earn-Out Period ending after the
closing date of such sale transaction or (ii) accelerate, subject to and
contingent upon the occurrence such sale, the obligations to pay the applicable
maximum Earn-Out Payment (and pay such amounts in full) for any Earn-Out Period
that has not ended prior to the consummation of such sale transaction. For
purposes of clarity and by way of example, if Parent sells all or substantially
all of the assets of the Business following the First Earn-Out Period but before
the end of the Second Earn-Out Period, there will not be any acceleration of the
Earn-Out Payment obligations for the First Earn-Out Period even if the purchaser
of the assets does not assume the obligations under this Agreement. Further, if
the sale occurs following the Second Earn-Out Period, there will not be any
acceleration of the Earn-Out Payment obligations for the First Earn-Out Period
or Second Earn-Out Period even if the purchaser of the assets does not assume
the obligations under this Agreement.
2.8    Closing Statement; Payments at Closing.
(a)    The Company will prepare and deliver to Parent, not later than five (5)
Business Days prior to the Closing Date, drafts of (a) the Closing Date Balance
Sheet, (b) the Consideration Certificate (pursuant to Section 2.9) and (c) a
closing statement (the “Closing Statement”), each of which may be modified as
mutually agreed by the Company and Parent prior to the Closing and the Company
will consider in good faith any changes or comments made by Parent with respect
to such documents. The Closing Statement will be dated as of the Closing Date
and will accurately set forth, as of the Closing Date and immediately prior to
the Effective Time: (i) the names of all Company Members and their respective
addresses; (ii) the number and kind of Company Units held by such Persons; (iii)
the calculation of the Base Merger Consideration; (iv) the calculation of the
applicable payment to each Member in exchange for Company Units held by such
Person (based, in each case, on the Base Merger Consideration set forth in the
Consideration Certificate); (v) each Company Member’s Pro Rata Portion
(calculated as of the Closing); and (vi) each of the parties receiving payment
for Transaction Expenses and Repaid Debt and the amount thereof.
(b)    At the Closing, Parent will:
(i)    deliver to the Escrow Agent, by wire transfer of immediately available
funds, the Escrow Amount which shall be managed, held and paid out by the Escrow
Agent in accordance with the terms of the Escrow Agreement and this Agreement;
(ii)    in accordance with Section 6.5, pay to the Lenders and the other
creditors identified on Schedule 6.5, by wire transfer of immediately available
funds, amounts equal to the Payoff Amounts;
(iii)    on behalf of the Company and in accordance with Section 2.8(a), pay to
such account or accounts as the Company specifies in the Closing Statement the
aggregate amount of all Transaction Expenses payable to a third party to the
extent not paid by the Company prior to the Closing Date;
(iv)    subject to Section 2.10(b), no more than five (5) Business Days
following receipt of a Letter of Transmittal and any other documents that may be
reasonably required by Parent to be delivered by a Company Member pursuant to
Section 2.5(a), pay the aggregate amount payable to such Company Member in
exchange for such holder’s Company Units (less, for the avoidance of doubt, such
Company Member’s Pro Rata Portion of the Escrow Amount (pursuant to Section
2.5(a) and as set forth in the Closing Statement) by wire transfer of
immediately available funds or check in accordance with this Article II.
(c)    The Escrow Amount shall be withheld at the Closing from the Base Merger
Consideration payable to the Company Members in respect of Company Units
pursuant to Section 2.5(a). The parties hereto agree that, for Tax reporting
purposes only, Parent shall be deemed to be the owner of any cash in the Escrow
Funds, and that all interest on or other taxable income, if any (“Parent Escrow
Interest”), earned from the investment of such cash shall be treated for Tax
purposes as earned by Parent. After the end of each calendar year and at the
termination of the applicable account holding the Escrow Amounts, as applicable,
Parent may provide a written direction to the Escrow Agent to distribute to
Parent 50% of any Parent Interest for any such year that has become part of the
Escrow Year (or any stub-year, in the event of termination of the applicable
account holding period).
2.9    Adjustments to Base Merger Consideration.
The Base Merger Consideration shall be adjusted upward or downward, on a
dollar-for-dollar basis, as set forth below:
(a)    The Company will prepare and deliver to Parent (x) a balance sheet of the
Company as of the Closing Date (the “Closing Date Balance Sheet”) and (y) a
certificate (the “Consideration Certificate”), which shall contain the Company’s
good faith estimate of (i) the Net Working Capital as of the Closing Date
(calculated in accordance with GAAP and the Net Working Capital Schedule as of
the Closing Date (provided in the event of differences between GAAP and the Net
Working Capital Schedule, GAAP shall govern except as expressly set forth in the
Net Working Capital Schedule as an exception to GAAP) and without giving effect
to the Merger and the other Transactions) (the “Estimated Net Working Capital”),
(ii) Cash as of immediately prior to the Closing (calculated in accordance with
GAAP) and without giving effect to the Merger and the other Transactions (the
“Estimated Cash”), (iii) Debt as of immediately prior to the Closing (calculated
in accordance with GAAP ) and without giving effect to the Merger and the other
Transactions (the “Estimated Debt”), (iv) Transaction Expenses without giving
effect to the Merger and the other Transactions (the “Estimated Transaction
Expenses”) and (v) based on such calculations, the Base Merger Consideration;
provided, that the Company shall prepare and deliver to the Parent, no later
than five (5) Business Days prior to the Closing Date, drafts of the Closing
Date Balance Sheet and the Consideration Certificate, each of which may be
modified as mutually agreed by the Company and Parent prior to the Closing and
the Company will consider in good faith any changes or comments made by Parent
with respect to such documents. To the extent that (y) the Estimated Net Working
Capital exceeds the Target Net Working Capital, the Base Merger Consideration
shall be increased by the amount by which the Estimated Net Working Capital
exceeds the Target Net Working Capital or (z) the Estimated Net Working Capital
is less than the Target Net Working Capital, the Base Merger Consideration shall
be decreased by the amount by which Estimated Net Working Capital is less than
Target Net Working Capital.
(b)    Not later than 5:00 p.m., Eastern time, on the day that is ninety (90)
days after the Closing Date, Parent shall prepare and deliver to the
Representative a certificate (the “Parent Certificate”) providing (i) an
unaudited balance sheet as of the Closing Date and without giving effect to the
Merger and the other Transactions contemplated herein (the “Parent Closing
Balance Sheet”) and (ii) Parent’s calculation of (A) Net Working Capital as of
the Closing Date and without giving effect to the Merger and the other
Transactions (“Actual Net Working Capital”) (B) Cash as of immediately prior to
the Closing and without giving effect to the Merger and the other Transactions
(the “Actual Cash”), (C) Debt as of immediately prior to the Closing and without
giving effect to the purchase of the Merger and the other Transactions (the
“Actual Debt”), (D) Transaction Expenses without giving effect to the Merger and
the other Transactions (the “Actual Transaction Expenses”), and (iii) the
amount, if any, by which the Base Merger Consideration, calculated by replacing
Estimated Net Working Capital, Estimated Cash, Estimated Debt and Estimated
Transaction Expenses in the definition of Base Merger Consideration, with,
respectively, Actual Net Working Capital, Actual Cash, Actual Debt and Actual
Transaction Expenses, is less than or greater than the calculation of each of
the Base Merger Consideration calculated at the Closing. Parent’s determination
of Actual Net Working Capital, Actual Cash and Actual Debt shall be prepared in
accordance with GAAP and, in the case of Actual Net Working Capital, the Net
Working Capital Schedule (provided in the event of differences between GAAP and
the Net Working Capital Schedule, GAAP shall govern except as expressly set
forth in the Net Working Capital Schedule as an exception to GAAP). The Parent
Certificate will include reasonable detail of the calculation and a description
of the reasons for ‎variations from the Estimated Net Working Capital, Estimated
Cash, Estimated Debt and Estimated Transaction Expenses, if any.‎
(c)    On or prior to 5:00 p.m., Eastern time on the day that is thirty (30)
days following Parent’s delivery of the Parent Certificate, the Representative
may give Parent written notice stating in reasonable detail Parent’s objections
(an “Objection Notice”) to Parent’s determination of Actual Net Working Capital,
Actual Cash, Actual Debt and Actual Transaction Expenses and Parent’s
calculation of the Base Merger Consideration. If the Representative does not
give Parent an Objection Notice within such thirty (30) day period, then the
Parent Closing Balance Sheet, Actual Net Working Capital, Actual Cash, Actual
Transaction Expenses and the Base Merger Consideration as determined by Parent
in the Parent Certificate will be conclusive and binding upon Parent, the
Representative, the Company and the Company Members, and will constitute the
final determination of Actual Net Working Capital, Actual Cash, Actual Debt,
Actual Transaction Expense and Base Merger Consideration for purposes of this
Section 2.9, subject to Sections 8.1(d) and (e).
(d)    Following Parent’s receipt of an Objection Notice (if applicable), the
Representative and Parent shall attempt to negotiate to resolve such dispute for
a period of thirty (30) days. In the event that the Representative and Parent
fail to agree on any of the Representative’s proposed adjustments set forth in
the Objection Notice within such thirty (30) day period, the Representative and
Parent agree to engage Grant Thornton LLP (the “Accounting Firm”) to make a
determination of Actual Net Working Capital, Actual Cash, Actual Debt, Actual
Transaction Expenses and Base Merger Consideration, and Parent and the
Representative shall use their commercially reasonable efforts to cause the
Accounting Firm to make its final determination of Actual Net Working Capital,
Actual Cash, Actual Debt, Actual Transaction Expenses and Base Merger
Consideration in accordance with the terms of this Agreement, within the thirty
(30) day period immediately following such engagement. Parent and the
Representative each shall provide the Accounting Firm with its respective
determinations of Actual Net Working Capital, Actual Cash, Actual Debt, Actual
Transaction Expenses and Base Merger Consideration, as well as all supporting
documentation reasonably required by the Accounting Firm. The Accounting Firm
shall render a written decision as to each disputed matter set forth in the
Objection Notice, including a statement in reasonable detail of the basis for
its decision. The determination of Actual Net Working Capital, Actual Cash,
Actual Debt, Actual Transaction Expenses and Base Merger Consideration by the
Accounting Firm shall be final and binding on the Parent, the Representative,
the Company and the Company Members for purposes of this Section 2.9, subject to
Sections 8.1(d) and (e). The Accounting Firm shall address only those items
disputed in accordance with this Section 2.9 and the Accounting Firm may not
assign a value greater than the greatest value for any such item assigned by
Parent, on the one hand, or the Representative, on the other hand, or less than
the smallest value for any such item assigned by Parent, on the one hand, or the
Representative, on the other hand. The fees and expenses of the Accounting Firm
shall be allocated between Parent and the Representative so that the
Representative shall be responsible for that portion of the fees and expenses
equal to such fees and expenses multiplied by a fraction, the numerator of which
is the aggregate dollar value of issues in dispute submitted to the Accounting
Firm that are resolved in a manner further from the position submitted to the
Accounting Firm by the Representative and closer to the position submitted to
the Accounting Firm by Parent (as finally determined by the Accounting Firm),
and the denominator of which is the total dollar value of the issues in dispute
so submitted, and Parent shall be responsible for the remainder of such fees and
expenses. Any portion of the Accounting Firm’s fees and expenses payable
hereunder by the Representative shall be paid by the Company Members in
accordance with their respective Pro Rata Portion. Additionally, in the event
the Representative and the Company Members fail to pay any such fees and
expenses, such fees and expenses, at the sole election of the Parent, may be
paid from the Net Working Capital Escrow Funds or the Indemnification Escrow
Funds. Following the final determination of the amounts subject to adjustment in
accordance with this Section 2.9, the Base Merger Consideration shall be
recalculated by replacing Estimated Net Working Capital, Estimated Cash,
Estimated Debt and Estimated Transaction Expenses in the definition of Base
Merger Consideration, with, respectively, Actual Net Working Capital, Actual Net
Working Capital, Actual Debt and Actual Transaction Expenses in each case, as
finally determined in accordance with this Section 2.9 (the “Final Base Merger
Consideration”), subject to Section 8.1(d) and (e).
(e)    Upon the final determination of Final Base Merger Consideration:
(i)    if the Final Base Merger Consideration is greater than the Base Merger
Consideration calculated at Closing (such surplus, the “Base Merger
Consideration Surplus”), then Parent shall pay (or caused to be paid) to the
Company Members in accordance with their respective Pro Rata Portion, an amount
equal to such surplus;
(ii)    if the Final Base Merger Consideration is less than the Base Merger
Consideration calculated at the Closing (such deficit, the “Base Merger
Consideration Deficit”), then such deficit shall be satisfied in accordance with
Section 8.7(a).
2.10    Payment Process.
(a)    Letter of Transmittal. Each Company Member shall deliver an executed
letter of transmittal in substantially the form attached hereto as Exhibit D-1
(to the extent such Company Member signed the Support Agreement) or Exhibit D-2
(to the extent such Company Member did not sign the Support Agreement) (each, a
“Letter of Transmittal”) and such other documents as may be required to be
delivered pursuant to the instructions set forth in the Letter of Transmittal),
to Parent no less than two (2) Business Days prior to Closing, to be held in
escrow by Parent until the Closing. If each such Company Member who has complied
with the foregoing, Parent shall deliver and cause to be issued, without
interest, the consideration payable in respect of such Company Units in
accordance with Section 2.5(a) on or promptly following Closing. If each such
Company Member has not complied with the foregoing, Parent shall deliver, and
cause to be issued without interest, the consideration payable in respect of
such Company Units in accordance with Section 2.5(a) promptly upon receipt of an
executed Letter of Transmittal and such other documents as may be required to be
delivered pursuant to the instructions set forth in the Letter of Transmittal
from such Company Member.
(b)    Payments with Respect to Surrendered Company Units; No Liability. Neither
Parent nor the Surviving Company shall be liable to any Company Securityholder
for any consideration delivered in respect of any Company Units, Company
Warrants or Company Options to a public official pursuant to any abandoned
property, escheat or other similar law.
(c)    Transfers of Ownership. If the payment of the consideration payable in
respect of Company Units in accordance with Section 2.5(a) is to be paid to a
Person other than the Person in whose name the Company Units are reflected as
held in the Company Operating Agreement, it will be a condition of payment that
transfer documentation satisfactory to the Parent be executed, and that the
Persons requesting such payment will have paid to Parent any transfer or other
Taxes required by reason of the payment of such consideration to a Person other
than the registered holder as set forth in the Company Operating Agreement, or
established to the satisfaction of Parent or any agent designated by it that
such Tax has been paid or is not applicable.
(d)    Withholding for Payment of Taxes. Parent, the Company, the Surviving
Company, or the Escrow Agent, or anyone acting on their behalf, shall be
entitled to deduct and withhold from the amounts otherwise payable pursuant to
or in accordance with this Agreement and the Escrow Agreement to any Company
Member or other payee unless Parent, the Surviving Company, the Escrow Agent or
the Company has received from such Person an exemption from such withholding Tax
in respect of each such payment to the payor’s reasonable satisfaction, such
amounts as is required to be deducted and withheld with respect to the making of
any such payment under any applicable Tax Law. To the extent that amounts are so
withheld by Parent, Company, the Surviving Company or the Escrow Agent, or
anyone acting on their behalf, and paid to the proper taxing authority pursuant
to any applicable Tax Law, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to such Person in respect of
which such deduction and withholding was made by Parent, Company, the Surviving
Company or the Escrow Agent, or anyone acting on their behalf, as applicable.
Parent, the Company, the Surviving Company or the Escrow Agent, or anyone acting
on their behalf, as the case may be, shall give written notice to each such
Person of any such withholding except with respect to any compensatory payments,
and shall further promptly provide any such Person any additional documentation
required for such Person’s Tax filings, as may be reasonably be requested by
such Person.
(e)    Adjustments. If during the period from the date of this Agreement through
the Effective Time, any change in the outstanding Company Units or securities
convertible or exchangeable into or exercisable for Company Units, shall occur
by reason of any reclassification, recapitalization, split or combination,
exchange or readjustment of Company Units, or any similar transaction, or any
dividend thereon with a record date during such period, the consideration
payable in respect of such Company Units shall be appropriately adjusted to
reflect such change.
2.11    Escrow Agreement.
Prior to the Closing, the Representative and Parent shall enter into an Escrow
Agreement with the Escrow Agent substantially in the form of Exhibit F, subject
to any administrative changes as may be required by the Escrow Agent (the
“Escrow Agreement”).
2.12    Taking of Necessary Action; Further Action.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Company with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of the Company and Merger Sub, the officers
and directors of the Company and Merger Sub will take all such lawful and
necessary action.
2.13    Dissenting Units.
Notwithstanding anything in this Agreement to the contrary, Company Units issued
and outstanding immediately prior to the Effective Time that are held by any
holder who has the right to vote for the Merger and shall not have voted in
favor of the Merger, consented thereto in writing or otherwise contractually
waived their dissenters’ rights and who shall have properly demanded dissenters’
rights for such units in accordance with Section 14-11-1002 of the LLC Act (the
“Dissenting Units”) shall not be converted into the right to receive their
respective portion of Aggregate Merger Consideration. At the Effective Time,
holders of Dissenting Units shall cease to have any rights with respect thereto
and instead shall only be entitled to the rights provided under Section
14-11-1002 of the LLC Act. All Dissenting Units held by Company Members who
shall have failed to perfect or who shall have effectively withdrawn or lost
their rights under such Section 14-11-1002 of the LLC Act shall thereupon be
deemed to have been converted into and to have become exchangeable for the right
to receive the applicable portion of the Aggregate Merger Consideration provided
for in Section 2.5(a) (subject to the same rights, contributions and obligations
applicable to other Company Units of the same class and series that are not
Dissenting Units), as of the Effective Time, without any interest thereon, upon
delivery of a Letter of Transmittal in the manner provided in Section 2.10. The
Company shall (a) serve prompt written notice to Parent of any demands under
such Section 14-11-1002 of the LLC Act and attempted withdrawals of such notices
or demands and (b) give Parent the opportunity to participate in and direct all
negotiations, petitions and proceedings with respect to such demands. Prior to
the Effective Time, the Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
ARTICLE III    
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Company represents and warrants to Parent and Merger Sub that the statements
contained in this Article III are true and correct as of the date hereof and as
of the Closing Date, except as set forth expressly herein or in the
correspondingly numbered section of the disclosure schedule delivered by the
Company to Parent (the “Company Disclosure Schedule”).
3.1    Organization and Qualification; Subsidiaries.
(a)    The Company (i) is a limited liability company, validly existing and in
good standing under the Laws of the State of Georgia, (ii) has the requisite
limited liability company power and authority necessary to own, lease and
operate its properties and to carry on its business as it is now being conducted
and as currently proposed to be conducted and (iii) is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification or license necessary, except, in the case of
clause (iii), where the failure to be so qualified or licensed or in good
standing, individually or in the aggregate with such other failures, would not
reasonably be expected to result in material Liability to the Company.
(b)    The Company has no Subsidiaries. Except as set forth on Section 3.1(b) of
the Company Disclosure Schedule, the Company does not own or control, directly
or indirectly, Equity Interests in any Person.
3.2    Organizational Documents.
The Company has delivered to Parent complete and correct copies as of the date
hereof of the Company Operating Agreement and Company Articles (collectively,
the “Company Organizational Documents”), in each case, as modified, amended or
restated as of the date hereof, and such Company Organizational Documents and
other organizational documents are in full force and effect. Section 3.2 of the
Company Disclosure Schedule sets forth all of the Company Organizational
Documents. The Company is not in violation of any of the provisions of its
applicable organizational documents (including, the Company Organizational
Documents). The Company has made available to Parent complete and correct copies
of the minute books containing records of all proceedings, consents, actions and
meetings of the board of managers of the Company, committees of the board of
managers of the Company and Company Members.
3.3    Authorization of Agreement.
(a)    The Company has all requisite limited liability company power and
authority to execute and deliver this Agreement and the Transaction Documents to
which it is a party, and, subject to receipt of the Company Member Approval, to
perform its obligations hereunder and thereunder and to consummate the
Transactions. Without limiting the generality of the foregoing, the Company
Board, at a meeting duly called and held or by written consent in lieu of a
meeting, unanimously (i) determined that the Merger is fair and in the best
interests of the Company and the Company Members, (ii) approved the execution,
delivery and performance of this Agreement and each of the other Transaction
Documents to which the Company is a party and declared their advisability in
accordance with the provisions of the LLC Act, and (iii) directed that this
Agreement be submitted to the Company Members for their adoption and resolved to
recommend that the Company Members vote in favor of the adoption of this
Agreement. Subject to the foregoing and receipt of the Company Member Approval,
the execution and delivery of this Agreement and the other Transaction Documents
to which the Company is a party by the Company, the performance by the Company
of its obligations hereunder and thereunder and the consummation by the Company
of the Transactions have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or the other Transaction Documents to which the Company
is a party, to perform the Company’s obligations hereunder or thereunder or to
consummate the Transactions. This Agreement and each of the other Transaction
Documents to which the Company is a party have been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
hereof and thereof by Parent and Merger Sub and the other parties hereto or
thereto, as applicable, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar Laws relating to or
affecting the enforcement of creditors’ rights generally and legal principles of
general applicability governing the availability of equitable remedies (whether
considered in a proceeding in equity or at Law or under applicable legal codes).
(b)    The affirmative vote or consent of (i) the Series A Manager of the
Company (provided, however, that the Series A Manager may delegate its approval
rights to members holding a majority of the Series A Preferred Units, Series A-1
Preferred Units and/or Series A-2 Preferred Units); (ii) the Series B Manager of
the Company (provided, however, that the Series B Manager may delegate its
approval rights to members holding a majority of the Series BA Preferred Units)
and (iii) members holding a majority of the Company Units on an as-converted,
fully-diluted basis, are the only votes of the holders of any class or series of
Company Units necessary to approve and adopt this Agreement and approve the
Merger (such affirmative vote, whether at a meeting of Company Members, however
called, or in connection with any written consent of Company Members, shall
herein be referred to as the “Company Member Approval”).
3.4    Capitalization.
(a)    The authorized units of the Company consist of (i) Common Units, (ii)
Series A Preferred Units, (iii) Series A-1 Preferred Units, (iv) Series A-2
Preferred Units and (v) Series B Preferred Units. As of the date hereof, there
are: 677,868 issued and outstanding Common Units (inclusive of 39,202
outstanding Company Warrants), 363,000 issued and outstanding Series A Preferred
Units, 448,217 issued and outstanding shares of Series A-1 Preferred Units,
225,799 issued and outstanding Series A-2 Preferred Units and 1,079,987 issued
and outstanding Series B Preferred Units. No other units of the Company is
authorized, issued or outstanding. Section 3.4(a) of the Company Disclosure
Schedule sets forth a complete and accurate list of the Company Members and the
number and class of Company Units held by such Company Member, in each case as
of the date hereof.
(b)    Except for the Amended and Restated Shopvisible, LLC 2008 Option Plan
(the “Company Option Plan”), the Company does not have or maintain any stock
option plan or other similar plan providing for equity compensation of any
Person. The Company has reserved 240,420 Common Units for issuance to employees
and directors of, and consultants to, the Company upon the exercise of options
(whether vested or unvested) to purchase Common Units, of which (i) 52,500
Common Units are issuable, as of the date of this Agreement, upon the exercise
of outstanding, unexercised Company Options and (ii) 1,666 Common Units were
issued as a result of the exercise of Company Options as of the date of this
Agreement. Section 3.4(b) of the Company Disclosure Schedule sets forth a
complete and accurate list of all holders of (x) Company Options, indicating the
number of Company Options held by each Person as of the date hereof, and
identifies which Company Options are vested and exercisable as of the date
hereof, and the exercise price for each such Company Option and (y) Company
Warrants, indicating the number of Company Units subject to each Company Warrant
and the exercise price for each such Company Warrant. Except as set forth on
Section 3.4(b) of the Company Disclosure Schedule, there are no outstanding
Equity Interests in the Company.
(c)    All of the issued and outstanding Company Units are, and all Company
Units issuable upon exercise of the Company Options and Company Warrants, upon
issuance on the terms and conditions specified in the Company Option or Company
Warrant pursuant to which they are issuable will be, duly authorized, validly
issued, fully paid and nonassessable and have not been and will not be issued in
violation of any preemptive rights. Except for the Company Options and Company
Warrants, there are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which the Company is a party or
by which it is bound obligating the Company to issue, deliver, sell, repurchase
or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
units or other Equity Interests of the Company or obligating the Company to
grant, extend, accelerate the vesting of, change the price of, otherwise amend
or enter into any such option, warrant, call, right, commitment or agreement.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights with respect to the Company. Except as
contemplated by this Agreement, there are no registration rights, and there is
no voting trust, proxy, rights plan, antitakeover plan or other agreements or
understandings to which the Company is a party or by which the Company is bound
with respect to any equity security of any class of the Company.
3.5    No Conflict; Required Filings and Consents.
Except as set forth in Section 3.5 of the Company Disclosure Schedule, the
execution and delivery of this Agreement and the Transaction Documents by the
Company does not, and the consummation of the Transactions will not (i) conflict
with or violate the Company Organizational Documents, (ii) conflict with or
violate any Laws applicable to the Company or by which any of its respective
assets or properties is bound or subject or (iii) result in any breach of or
constitute a default (or an event that with or without notice or lapse of time
or both would become a breach of or constitute a default) under, or give to
others any rights of termination, modification, acceleration or cancellation of,
or require payment under, or result in the creation of a Lien on any of the
properties or assets of the pursuant to, any Contract, Permit, franchise or
other instrument or obligation to which the Company is a party or by or to which
any of them or any of its assets or properties is bound or subject or (iv)
require the Company to obtain any consent, license, permit, approval, waiver,
authorization or order of, or to make any filing with or notification to, any
Governmental Authority or third Person (any such consents, licenses, permit,
approval, waiver, authorization, order of filing or other similar action
(collectively, the “Company Approvals”), except for compliance with and filings,
notices, permits, authorizations, consents and approvals that may be required
under any Competition Laws, the Securities Act or any state securities laws.
3.6    Permits; Compliance.
(a)    The Company is in possession of all Permits necessary to own, lease,
maintain and operate its properties and to carry on its Business. There is no
action, proceeding or investigation pending or, to the Knowledge of the Company,
threatened that has resulted in or after notice or lapse of time or both could
reasonably be expected to result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction, termination or cancellation
of, or order of forfeiture or material fine with respect to, any material
Permit.
(b)    The Company has complied and is complying with all Laws applicable to the
Company and its Business, properties or assets. The Company has not received any
written or oral notice or other communication from ‎any Governmental Authority
or any other Person regarding any actual, alleged, or potential ‎violation of,
or failure to comply with, any applicable Law.
(c)    The Company has conducted its export transactions in accordance in all
respects with applicable provisions of export controls laws and regulations.
3.7    Financial Statements; Undisclosed Liabilities.
(d)    Attached to Section 3.7(a) of the Company Disclosure Schedule are the
true and complete copies of the (i) unaudited annual financial statements
consisting of (A) the unaudited annual balance sheets of the Company as of
December 31, 2013 (the “Most Recent Annual Financial Statements Date”) and
December 31, 2012, and the related unaudited annual statements of income and
cash flows for each of the fiscal years then ended (including in each case the
notes or other supplementary information thereto) (collectively, the “Annual
Financial Statements”) and (ii)(A) the unaudited balance sheet of the Company
(the “Balance Sheet”) as of October 31, 2014 (such date, the “Balance Sheet
Date”) and (B) the related unaudited and consolidated statements of income and
cash flows for the ten month period then ended (the “Unaudited Financial
Statements,” and together with the Annual Financial Statements, the “Financial
Statements”). All of the Financial Statements (x) have been prepared in
accordance with GAAP applied by the Company on a consistent basis throughout the
periods covered (provided, however, that the Unaudited Financial Statements are
subject to normal and recurring year-end adjustments (which adjustments will not
be material individually or in the aggregate)), (y) fairly present in all
material respects the financial condition of the Company as of the respective
dates therein indicated and the results of operations and cash flows of the
Company for the respective periods therein specified and (z) have been prepared
from and are consistent and in accordance with the books and records of the
Company (which are in turn accurate and complete). The Company maintains a
standard system of accounting established and administered in accordance with
GAAP. The Company has never had, and nor does it currently have, any off balance
sheet Liability of any nature to, or any financial interest in, any third party
or entities.
(e)    The Company has no Liabilities other than (i) those which are adequately
reflected or reserved against in the Balance Sheet as of the Balance Sheet Date
and (ii) those incurred in the ordinary course of the business since the Balance
Sheet Date (none of which (y) are material in nature or amount or (z) is for a
breach of Contract, warranty, infringement, tort or violation of Law). Without
limiting the generality of the foregoing, the Company does not have any
outstanding guarantees of any debt or other obligation of any other Person. All
reserves that are set forth in or reflected in the Balance Sheet are adequate.
(f)    Section 3.7(c) of the Company Disclosure Schedule sets forth the names
and locations of all banks, trust companies, savings and loan associations and
other financial institutions at which the Company maintains accounts and the
names of all persons authorized to draw thereon or make withdrawals therefrom.
(g)    Section 3.7(d) of the Company Disclosure Schedule accurately lists all
Debt of the Company, including, for each item of Debt, the agreement governing
the Debt and the interest rate, maturity date and any assets or properties
securing such Debt.
(h)    Except as set forth on Section 3.7(e) of the Company Disclosure Schedule,
the accounts receivable reflected on the Balance Sheet and the accounts
receivable arising after the date thereof (i) have arisen from bona fide
transactions entered into by the Company involving the sale of goods or the
rendering of services in the ordinary course of business consistent with past
practice and (ii) constitute only valid, undisputed claims of the Company not
subject to claims of set-off or other defenses or counterclaims other than
normal cash discounts accrued in the ordinary course of business consistent with
past practice.
3.8    Absence of Certain Changes or Events.
Since the Most Recent Annual Financial Statements Date, the Company has carried
on the Business in the ordinary course of business, consistent with past
practice, and there has been no Company Material Adverse Effect. Without
limiting the foregoing, and except as set forth on Section 3.8 of the Company
Disclosure Schedule, since the Most Recent Annual Financial Statements Date and
other than changes, events or conditions that are contemplated by this
Agreement, there has not been with respect to the Company:
(f)    any Liability incurred other than in the ordinary course of business,
consistent with past practice, or any borrowing of monies or incurrence of or
becoming subject to Debt or other long-term Liabilities, in each case, in excess
of $25,000 in the aggregate;
(g)    any incurrence, creation or assumption of any Lien on any of its assets
or properties;
(h)    any making of any loan, advance or capital contribution to, guarantee for
the benefit of, or investment in, any Person other than any travel loans or
advances made in the ordinary course of business, consistent with past practice
which do not exceed $25,000 in the aggregate;
(i)    any acquisition, sale or transfer of any tangible or intangible asset of
the Company (other than the sale or nonexclusive license of Products to its
customers in the ordinary course of business consistent with past practice for
which the consideration is less than $25,000);
(j)    any acquisition (by merger, consolidation, acquisition of stock or assets
or otherwise) of (i) any corporation, partnership or other business organization
or (ii) any assets from any other Person (excluding ordinary course purchases of
goods, products and off-the-shelf Intellectual Property);
(k)    any material damage, destruction or loss, whether or not covered by
insurance, affecting its assets, properties or Business;
(l)    any change in Company’s authorized or issued equity, or issued any notes,
bonds or other debt securities or securities convertible or exercisable into or
exchangeable for any capital stock, or any warrants, options or other rights to
acquire any Company Units or other equity interest in the Company;
(m)    any entry into, amendment or modification of, or relinquishment,
termination or nonrenewal of any material Contract or other right or obligation,
or any other material change in any business practice;
(n)    any entry into any Contract whereby that gives rise to any deferred
revenue Liability under GAAP in excess of $25,000;
(o)    any sale, disposition, transfer or license to any Person of any rights to
Company Intellectual Property other than in the ordinary course of business
consistent with past practice or any acquisition or license from any Person of
any Intellectual Property Rights or any sale, disposition, transfer or providing
of any copy of the Company’s Source Code to any Person, in each case involving
consideration in excess of $25,000;
(p)    except in the ordinary course of business, consistent with past practice,
any capital expenditures or commitments therefor with respect to the Company in
an amount in excess of $25,000 in the aggregate.
(q)    any waiver of any rights of material value to the Company;
(r)    any disclosure of any confidential information of the Company to any
Person other than pursuant to a written confidentiality agreement with adequate
protection of the Company’s confidential information;
(s)    any material changes to any insurance coverage or policies;
(t)    any deferral of the payment of any accounts payable other than in the
ordinary course of business, consistent with past practice, any discount,
accommodation or other concession made other than in the ordinary course of
business, consistent with past practice, in order to accelerate or induce the
collection of any receivable, or any other conduct of the cash management
customs and practice other than in the ordinary course of business, consistent
with past practice (including with respect to maintenance of working capital
balances and inventory levels, collection of accounts receivable, payment of
accrued Liabilities and other Liabilities and pricing policies);
(u)    any material change in the manner in which it extends discounts, credit
or warranties to its customers or otherwise deals with its customers;
(v)    any amendment to the Company Organizational Documents;
(w)    except as required by Law, any grant of any rights to severance benefits,
“stay pay”, termination pay, change of control bonuses, or similar rights or
benefits to any director, officer or other employee of the Company (other than
under agreements, if any, for which Parent or the Company will not be obligated
following the Closing) or increased benefits payable or potentially payable to
any such director, officer or other employee of the Company under any previously
existing severance benefits, “stay-pay”, termination pay or change of control
arrangements;
(x)    any material modification of or promise to modify the benefits payable,
or to become payable, to any of its directors, officers or employees, or any
increase in the compensation (including severance and equity compensation)
payable, or to become payable, to any of its directors, officers or employees,
any material bonus payment or arrangement made to or with any of such directors,
officers or employees, or any entrance into any transaction with an Insider (as
defined below);
(y)    any material change in any method of accounting or accounting practice of
the Company, except as required by GAAP;
(z)    any event, occurrence or development that has had, or could reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(aa)    any election in respect of Taxes, any adoption or change of accounting
method, any change in annual accounting period, any filing of an amended Tax
Return, any closing agreement entered into, any agreement to settle any claim or
assessment in respect of Taxes entered into, any surrender of a right to claim a
refund of Taxes, any consent to an extension or waiver of the limitation period
applicable to any claim or assessment in respect of Taxes; or
(bb)    any negotiation by or entry into any agreement or commitment to take any
of the foregoing actions.
3.9    Litigation; Disputes.
Except as set forth in Section 3.9 of the Company Disclosure Schedule, there is
and, since January 1, 2013, there has been no private or governmental action,
claim, dispute, cause of action, suit, investigation, mediation, proceeding, or
arbitration (collectively, “Action”) pending or, to the Knowledge of the
Company, threatened against the Company nor any of its assets or properties, and
the Company is not subject to any Order. The Company is in compliance with each
Order to which the Company is subject. To the Knowledge of the Company, no event
has occurred or circumstance exists that may give rise to, or serve as a basis
for, any such Action.
3.10    Employee Benefit Plans and Labor Matters.
(a)    Section 3.10(a) of the Company Disclosure Schedule lists all Employee
Plans that the Company sponsors or maintains, or to which the Company
contributes or is obligated to contribute, or under which the Company or any
ERISA Affiliate of the Company has or may have any Liability, or which benefits
any current or former employee, director, consultant or independent contractor
of the Company or the beneficiaries or dependents or domestic partners of any
such Person (each, a “Company Benefits Plan”). With respect to each Company
Benefits Plan, the Company has made available to Parent complete copies of each
of the following: (i) if the plan has been reduced to writing, the plan document
together with all amendments thereto, (ii) if the plan has not been reduced to
writing, a written summary of all material plan terms, (iii) if applicable, the
most recent trust agreements, custodial agreements, insurance policies or
Contracts, administrative agreements and similar agreements, and investment
management or investment advisory agreements, (iv) if applicable, the most
recent summary plan description, employee handbook or similar employee
communication, (v) in the case of any plan that is intended to be qualified
under Code Section 401(a), the most recent determination letter from the IRS and
any related correspondence, and any pending request for determination with
respect to the plan’s qualification, (vi) in the case of any plan for which
Forms 5500 are required to be filed, the three (3) most recently filed Forms
5500, and (vii) any notices, letters or other correspondence from the IRS or the
Department of Labor relating to such Company Benefits Plan.
(b)    Neither the Company nor any of the ERISA Affiliates of the Company have
maintained, contributed to or had any Liability with respect to a plan subject
to Title IV of ERISA or Code Section 412, including any “multiemployer plan” as
defined in Sections 3(37) and 4001(a)(3) of ERISA or Code Section 414(f), and no
condition exists that presents a risk to the Company of incurring liability
under Title IV of ERISA or Section 412 or Section 430 of the Code. Neither the
Company nor any of its Subsidiaries have ever maintained, contributed to or had
any Liability with respect to a “multiple employer welfare arrangement” within
the meaning of Section 3(40) of ERISA, a “multiple employer plan” as defined in
Section 4063(a) of ERISA and Section 413 of the Code, or a “funded welfare plan”
within the meaning of Section 419 of the Code.
(c)    Each Company Benefits Plan that is intended to be qualified under Code
Section 401(a) has received a favorable determination or opinion letter from the
IRS as to its qualified status or is within the remedial amendment period (as
defined in Section 401(b) of the Code, taking into account any pronouncements of
the IRS relating to such period) for making any required change. Each Company
Benefits Plan, including any associated trust or fund, has been administered in
accordance with its terms and any applicable collective bargaining agreements
and with applicable Laws, including ERISA and the Code, and, nothing has
occurred that could adversely affect the tax-qualification of such Company
Benefits Plan or the tax-exempt status of its related trust. Nothing has
occurred with respect to any Company Benefits Plan that has subjected or could
subject the Company to a penalty under Section 502 of ERISA or to an excise tax
under the Code, or that has subjected or could subject any participant in, or
beneficiary of, a Company Benefits Plan to a Tax under Code Section 4973. The
Company does not have any Liability for any excise tax imposed by Chapter 43 of
the Code. The Company has no obligation (current or contingent) to compensate
any individual for any Taxes which may be imposed under Sections 4999 or 409A of
the Code. With respect to each Company Benefits Plan, no prohibited transactions
(as defined in Section 406 or 407 of ERISA or Section 4975 of the Code) have
occurred for which a statutory exemption is not available.
(d)    All required contributions to, and premium payments on account of, each
Company Benefits Plan have been made on a timely basis and all such
contributions not yet due have been properly accrued and are shown on the
applicable financial statements of the Company obligated to make such payments.
(e)    There is no pending or, to the Company’s Knowledge, threatened action
relating to a Company Benefits Plan, other than routine claims in the ordinary
course of business for benefits provided for by the Company Benefits Plans for
which internal administrative review procedures have not been exhausted. No
Company Benefits Plan is or, within the last six (6) years, has been the subject
of an examination or audit by a Governmental Authority, or is the subject of an
application or filing under, or is a participant in, a government-sponsored
amnesty, voluntary compliance, self-correction or similar program.
(f)    Except as required under Section 601 et seq. of ERISA or other Law, no
Company Benefits Plan provides post-retirement or post-separation welfare
benefits or coverage (including health, life or disability insurance) to any
director, officer, consultant or employee, or any dependent, beneficiary or
domestic partner of any such Person following such Person’s retirement or other
termination of service with the Company.
(g)    Each “nonqualified deferred compensation plan” (as defined in Code
Section 409A(d)(1) and applicable regulations) with respect to any service
provider to the Company (i) has been maintained and operated in compliance in
all material respects with, and the document(s) evidencing such arrangement
comply with, the requirements of Code Section 409A and regulations and other
guidance promulgated thereunder. To the extent that Section 409A of the Code
does not apply to an “nonqualified deferred compensation plan” because amounts
were deferred thereunder before January 1, 2005, such “grandfathered” plan (or
portion thereof) has not been “materially modified” (within the meaning of
Treasury Regulations §1.409A-6(a)(4)) subsequent to October 3, 2004.
(h)    Except as set forth in Section 3.10(h) of the Company Disclosure
Schedule, neither the execution of this Agreement and the other Transaction
Documents nor the consummation of the Transactions (either together with or upon
the occurrence of any additional or subsequent events) will constitute an event
under any Company Benefits Plan that will or may reasonably be expected to
result in any payment (including severance or termination pay) or any
acceleration, vesting, increase, funding (including the segregation of assets to
fund) or provision of benefits thereunder, in each case, to any employee,
consultant, director, officer or other individual (or any dependent or
beneficiary thereof).
(i)    All compensation, including wages, commissions and bonuses, payable to
employees, independent contractors or consultants of the Company for services
performed on or prior to the date hereof have been paid in full (or accrued in
full and shown on the applicable financial statements of the Company) and there
are no outstanding agreements, understandings or commitments of the Company with
respect to any employment, compensation, commissions or bonuses.
(j)    Section 3.10(j) of the Company Disclosure Schedule sets forth as of the
date hereof a complete list of all current employees, officers and consultants
or individual service providers, of the Company and their current title or job
description, details of their compensation (base compensation, commissions and
bonuses, including all plans or Contracts with respect thereto), and, to the
extent applicable, exempt or non-exempt status, citizenship or residency status,
visa or other similar permit and dates of issuance and expiration of such,
accrued and unused vacation, sick and other paid time off (including a
description of the Company’s policies with respect to the accrual of vacation,
sick and other paid time off), and details of each Company Benefits Plan to
which they are entitled.. The Company has made available to Parent true,
complete and correct copies of all employment agreements, confidentiality
agreements, non-competition agreements, non-solicitation agreements, material
employee manuals and handbooks, policy statements and other materials relating
to the employment of employees of the Company or any of its Subsidiaries. The
Company has made available to Parent true, complete and correct copies of all
contractor or consulting agreements with any independent contractor. The Company
has made no verbal commitments to any current or former officers, employees,
consultants or independent contractors with respect to compensation, promotion,
retention, termination, severance or similar matters in connection with the
transaction contemplated by this Agreement or otherwise. Except as set forth in
Section 3.10(j) of the Company Disclosure Schedule, the employment of each of
the Company Employees is terminable at will, without cause or prior notice and
without liability.
(k)    There are no controversies or labor disputes, labor slowdowns or union
organization activities, picketing or strikes pending or threatened between the
Company and any employees of the Company. None of the Company employees belong
to any union or collective bargaining unit. The Company has not engaged in any
unfair labor practice within the meaning of the National Labor Relations Act or
state law equivalent, and there exists no pending or, to the Knowledge of the
Company, threatened unfair labor practice charges or race, color, religion, sex,
citizenship, national origin, veteran status, age or disability discrimination
charges, or charges of retaliation against the Company before any board,
department, commission or agency.
(l)    Each Company employee has been properly classified as exempt or
non-exempt under the Fair Labor Standards Act and any other applicable federal
and state wage Laws. The Company has not received any claim from any
Governmental Authority to the effect that it has improperly classified the
exempt/non-exempt status of any Company employee. No individual classified as of
the date hereof by the Company as an independent contractor or other
non-employee status would be deemed an employee or common-law employee under any
Employee Plan or applicable federal or state Laws.
(m)    The Company has complied in all material respects with all applicable
foreign, federal, state, and municipal Laws related to equal employment
opportunity, wage and hour, immigration, occupational health and safety, and
Laws related to employment (or the termination of employment) or working
conditions.
3.11    Taxes.
(a)    The Company has been classified as a partnership under Treasury
Regulation Section 301.7701-3(b)(1)(i) since its formation. The Company has not
filed or caused to be filed any U.S. federal, state or local tax return or other
document, including without limitation a Form 8832 “Entity Classification
Election,” or otherwise taken any position for U.S. federal, state or local tax
purposes that is inconsistent with the classification of the Company as a
partnership.
(b)    The Company is not a party to or a partner in any joint venture,
partnership or other arrangement or contract that could be treated as a
partnership for federal income tax purposes.
(c)    The Company has duly and timely filed, or caused to be duly and timely
filed, all Tax Returns required to be filed by it and each such Tax Return is
true, correct and complete in all material respects. Without limiting the
foregoing, none of such Tax Returns contains or omits any position or
transaction that is, or would be, subject to penalties under Code Section 6662
(or any similar provisions of state, local or non-U.S. Tax law). The Company has
not extended the due date for the filing of any Tax Returns that have not been
filed.
(d)    The Company has paid all Taxes due and payable by the Company (whether or
not shown on any Tax Return).
(e)    No written notice or inquiry has been issued, or written claim has been
made by a Governmental Authority in a jurisdiction where the Company does not
file Tax Returns that the Company is or may be subject to taxation in that
jurisdiction.
(f)    The Company has made available to Parent correct and complete copies of
all Tax Returns for periods ending on or after December 31, 2011, and all Tax
examination reports and statements of Tax deficiencies asserted against the
Company since December 31, 2011 or that otherwise remain unresolved.
(g)    The Company is not subject to any current, pending or proposed or
threatened Tax audit or examination, Tax claim or Tax proceeding. The Company
has not received from any federal, state, local, or non-U.S. taxing authority
(including jurisdictions where the Company has not filed Tax returns) any (i)
written notice indicating an intent to open an audit or other review, (ii)
request for information related to Tax matters, or (iii) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
taxing authority against the Company which has not been satisfied or resolved as
of the date hereof.
(h)    The Company has not waived any statute of limitations in respect of Taxes
or agreed to any extension of time to assess or collect any Tax deficiency.
(i)    The Company is not a party to nor bound by any Tax sharing, Tax
indemnity, Tax allocation or similar agreement or arrangement with respect to
Taxes. The Company is not otherwise liable for Taxes of any other Person as a
transferee or successor, by contract, or otherwise.
(j)    The Company has timely withheld and paid all Taxes required by any Tax
Law to have been withheld and paid by it in connection with amounts paid or
owing to, or allocated to, any employee, independent contractor, creditor,
stockholder, member or other Person, including without limitation amounts
required to be withheld under Code Section 1441 and 1442 (or similar provisions
of state, local or non-U.S. Tax Law).
(k)    The Company has properly (A) collected and remitted sales and similar
Taxes with respect to sales made to its customers and (B), for all sales that
are exempt from sales and similar Taxes and that were made without charging or
remitting sales or similar Taxes, received and retained any appropriate Tax
exemption certificates and other documentation qualifying such sale as exempt.
(l)    No Company Units are “subject to substantial risk of forfeiture” within
the meaning of Code Section 83.
(m)    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) ending after the Closing Date as a result of any:
(i)    change in method of accounting for a taxable period ending on or prior to
the Closing Date;
(ii)    use of an improper method of accounting for a taxable period ending on
or prior to the Closing Date;
(iii)    “closing agreement” as described in Code §7121 (or any corresponding or
similar provision of state, local, or non-U.S. income Tax Law) executed on or
prior to the Closing Date;
(iv)    installment sale or open transaction disposition made on or prior to the
Closing Date;
(v)    prepaid amount received or deferred revenue accrued on or prior to the
Closing Date; or
(vi)    election under Code §108(i) or any corresponding or similar provision of
state, local, or non-U.S. income Tax Law.
(n)    The Company has not entered into any “listed transactions” as defined in
Treasury Regulation 1.6011-4(b)(2), and the Company has properly disclosed all
“reportable transactions” as required by Treasury Regulation 1.6011-4, including
filing Form 8886 with Tax Returns and with the Office of Tax Shelter Analysis
(or any corresponding provisions of state, local or non-U.S. Tax law) and there
has been no act or omission on the part of the Company that has resulted or
could result in the imposition of a penalty under Section 6707A of the Code.
(o)    The Company is not carrying on any trade or business through a permanent
establishment in any country or territory outside the U.S.
(p)    There are no liens for Taxes (other than for current Taxes not yet due
and payable) on any assets of the Company.
(q)    The Company has either (1) filed or caused to be filed with the
appropriate Governmental Authorities all unclaimed property reports required to
be filed and has remitted to the appropriate Governmental Authorities all
unclaimed property required to be remitted, or (2) delivered or paid all
unclaimed property to its original or proper recipient.
(r)    Each of the Company Securityholders is a U.S. citizen and resident of the
United States.
3.12    Properties.
(a)    The Company and each of its Subsidiaries has good and marketable title
to, or valid leasehold interest in, all of the properties and assets, real and
personal, tangible or intangible, that it purports to own or lease, free and
clear of all Liens, except for (i) Liens for Taxes or assessments and similar
charges not yet due and payable or contested in good faith by appropriate
proceedings or (ii) mechanic’s, material men’s, contractor’s, repairman’s or
similar Liens arising in the ordinary course of business, consistent with past
practice (the items in clauses (i) and (ii) collectively, the “Permitted
Liens”).
(b)    All machinery, equipment and other tangible personal property owned or
leased by the Company or used in the Company’s Business are (i) in generally
good operating condition, reasonable wear and tear excepted, and (ii) not in
need of renewal or replacement, except for renewal or replacement in the
ordinary course of business. Section 3.12(b) of the Company Disclosure Schedule
identifies each parcel of real property leased by the Company. The Company has
provided to Parent true, correct and complete copies of all leases, subleases
and other agreements under which the Company uses or occupies or has the right
to use or occupy any real property or facility, including all modifications,
amendments and supplements thereto, and such lease, sublease or other agreement
is a valid, binding and enforceable obligation of the Company, and will continue
to be valid, binding and enforceable immediately following the Closing in
accordance with the terms thereof as in effect prior to the Closing (except as
the foregoing may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar Laws relating to or affecting the
enforcement of creditors’ rights generally and legal principles of general
applicability governing the availability of equitable remedies (whether
considered in a proceeding in equity or at Law or under applicable legal
codes)). The Company is not in breach or default, and no event has occurred
which, with notice or lapse of time, would constitute a breach or default or
permit termination, modification or acceleration thereunder, and there are no
disputes, oral arguments or forbearance programs to which the Company is a party
in effect as to any lease or sublease. The Company does not own any real
property.
3.13    Intellectual Property and Technology.
(a)    Company Products. Section 3.13(a) of the Company Disclosure Schedule is a
complete and accurate list of all Company Products (including a name, product
description, version level, the language in which it is written and the hardware
requirements) including any and all modules offered within the Company Products.
(b)    Intellectual Property. Intellectual Property. Section 3.13(b) of the
Company Disclosure Schedule is a complete and accurate list of all third-party
Intellectual Property Rights (including those associated with all Open Source
Software other than Open Source Software included in commercial third-party
Software) that the Company has incorporated into or distributed with, or is
material to the operation of, the Company Products or the conduct of the
Business as it is currently contemplated to be conducted. Other than those
third-party Intellectual Property Rights listed on Section 3.13(b) of the
Company Disclosure Schedule, all Intellectual Property Rights that are
incorporated into, or is distributed with, or is material to the operation of,
the Company Products was written, developed, or created solely by either (i)
employees of the Company acting within the scope of their employment or (ii) by
third parties who have validly and irrevocably assigned all of their rights in
such Intellectual Property Rights to the Company. No current or former employee,
Company founder, or third party owns (or claims to own) any rights in any
Company Intellectual Property.
(c)    Registered Intellectual Property. Section 3.13(c) of the Company
Disclosure Schedule is a complete and accurate list of (i) all Registered
Intellectual Property in which the Company has or purports to have an ownership
interest of any nature (whether exclusively, jointly with another Person or
otherwise) (“Company Registered Intellectual Property”) and all unregistered
trademarks, service marks, trade names, logos, or corporate names used by the
Company, (ii) the jurisdictions in which each such item of Registered
Intellectual Property has been registered or filed, dates issued, dates filed,
the owners of record and the applicable registration or serial number, and (iii)
any other Person that has an ownership interest in such item of Registered
Intellectual Property and the nature of such ownership interest. With respect to
each item of Company Registered Intellectual Property (A) all necessary
registration, maintenance and renewal fees in connection with such item of
Company Intellectual Property that are or will be due for payment on or before
the Closing Date have been or will be paid prior to the Closing Date, and all
necessary documents and certificates in connection with such item of Company
Registered Intellectual Property that are or will be due for filing on or before
the Closing Date have been or will be filed with the relevant Governmental
Authority prior to the Closing Date for the purposes of maintaining and
protecting such Company Registered Intellectual Property; (B) each such item of
Company Registered Intellectual Property is in compliance in all material
respects with all formal legal requirements (including payment of registration,
maintenance and renewal fees and proofs of use); and (iii) each such item of
Company Registered Intellectual Property, other than items that are pending
before a Governmental Authority (“Pending IP”), is subsisting, valid and
enforceable. Except as set forth in Section 3.13(c) of the Company Disclosure
Schedule, there are no actions that must be taken within 90 days of the date of
this Agreement, including the payment of any registration, maintenance or
renewal fees or the filing of any response to an official action of a
Governmental Authority or the filing of any application for the purpose of
obtaining, maintaining, perfecting, preserving or renewing any of the Company
Registered Intellectual Property.
(d)    Title to Intellectual Property. The Company is the sole and exclusive
owner of and has good and marketable title to all right, title, and interest in
and to each item of Company Intellectual Property, free and clear of any Liens
other than Permitted Liens and the Liens set forth in Section 3.12(a) of the
Company Disclosure Schedule which will be released at Closing. As of the later
of (i) the date of the grant of the right by the applicable Governmental
Authority, or (ii) the date of acquisition thereof by the Company, or (iii) the
date of creation thereof, the Company has sufficient ownership rights that it
could bring a claim or suit against a third party for past, present or future
infringement or misappropriation of the Company Intellectual Property in the
event such infringement or misappropriation had occurred. In each case in which
the Company has acquired, other than through a license, any Intellectual
Property Rights from any Person, the Company has obtained a valid and
enforceable assignment sufficient to transfer all rights in and to such
Intellectual Property Rights to the Company. Except as set forth in Section
3.13(d) of the Company Disclosure Schedule, the Company has not transferred full
or partial ownership of (other than by non-exclusive license granted to
customers in the ordinary course of business), or granted any exclusive license
with respect to, any Company Intellectual Property. The Company has not received
any notice or claims challenging the Company’s exclusive ownership of any
Company Intellectual Property or the validity or enforceability of any Company
Intellectual Property. Neither the execution and delivery or effectiveness of
this Agreement nor the performance of the Company’s obligations under this
Agreement will cause the forfeiture or termination of, or give rise to a right
of forfeiture or termination of, any Company Intellectual Property or impair the
right of the Company to use, possess, sell or license any Company Intellectual
Property or portion thereof.
(e)    Third Party Intellectual Property Rights. The Company has and as of the
date of this Agreement will continue to have through the Closing Date the rights
in and to(i) the third-party Intellectual Property Rights listed in Section
3.13(b) of the Company Disclosure Schedule, (ii) Software licensed to the
Company under Open Source Licenses listed in Section 3.13(i) of the Company
Disclosure Schedule, (iii) licenses for Shrink Wrap Code, and (iv) the Software
licenses and other third-party Intellectual Property Rights set forth in Section
3.13(e) of the Company Disclosure Schedule (items (i) through (iv),
collectively, the “Third-Party Technology”). The Company Intellectual Property
and Third Party Technology includes all Intellectual Property Rights that are
used in or necessary for the conduct of the business of the Company as currently
conducted, including the design, development, manufacture, use, marketing,
import for resale, distribution, licensing out and sale of all Company Products.
The Company owns, or possesses licenses or other enforceable rights to use, all
Intellectual Property Rights that are used in or necessary to the operate the
Company’s business as currently conducted and as currently proposed to be
conducted, including all Intellectual Property Rights embodied in the Company
Products The Company Intellectual Property and Third-Party Technology includes
all Source Code, Object Code and other documentation and materials necessary to
compile and operate the Company Products, including installation and User
Documentation, engineering specifications, flow charts, and know-how reasonably
necessary for the use, maintenance, enhancement, development and other
exploitation of the Company Products. There are no material problems, defects,
or deficiencies in the Company Products or Third-Party Technology that prevent
such Company Products from operating substantially as described in their related
documentation or specifications, or prevent such Company Products from operating
in all material respects as warranted to any third party. The third party
Software (including, for purposes of this clause, all commercially available
"off-the-shelf" or "shrink-wrapped" software) that constitutes a component of
any Company Product is generally commercially available for license at
commercially reasonable rates and on commercially reasonable terms. Except as
set forth in Section 3.13(e) of the Company Disclosure Schedule, neither the
execution and delivery or effectiveness of this Agreement nor the performance of
the Company’s obligations under this Agreement will cause the forfeiture or
termination of, or give rise to a right of forfeiture or termination of, any
Company license or other rights to the Third-Party Technology.
(f)    No Infringement by the Company. The Company and the operation of the
Business as it has been and is now being conducted, including the design,
development, use, import, branding, advertising, promotion, marketing,
manufacture, sale and licensing out of any Company Products or Company
Intellectual Property, does not infringe, misappropriate, dilute or otherwise
violate any Intellectual Property Rights of any Person, or constitute unfair
competition or trade practices under the laws of any jurisdiction. Except as set
forth in Section 3.13(f) of the Company Disclosure Schedule, the Company has not
received notice (including unsolicited offers to license or grants of other
rights or immunities) from any Person claiming that any Company Intellectual
Property infringes, misappropriates, dilutes or otherwise violates any
Intellectual Property Rights of any Person or constitutes unfair competition or
trade practices under the laws of any jurisdiction. Except as set forth in
Section 3.13(f) of the Company Disclosure Schedule, no Company Intellectual
Property is subject to any proceeding or outstanding decree, order, judgment or
settlement agreement that restricts in any manner the use, provision, transfer,
assignment or licensing thereof by the Company or affects the validity, use or
enforceability of such Company Intellectual Property. The Company does not,
without proper authorization and all necessary rights, possess or have within
its custody or control any Intellectual Property Rights, including any customer
lists, marketing materials, technical information or data.
(g)    Third Party Rights. Except as set forth in Section 3.13(g) of the Company
Disclosure Schedule and except for non-exclusive licenses granted to customers
in the ordinary course of business, the Company has not granted any third party
ownership or joint ownership of, or any exclusive license to, any Company
Intellectual Property. The Company has not developed or created any Technology
or Intellectual Property Rights as a “work made for hire” or otherwise assigned
or transferred any Technology or Intellectual Property Rights to any customer.
(h)    No Third Party Infringement. Except as set forth in Section 3.13(h) of
the Company Disclosure Schedule, to the Knowledge of the Company, no Person is
infringing, misappropriating, diluting or otherwise violating any Intellectual
Property Rights of the Company in or to the Company Intellectual Property, and
the Company has the right to bring actions against any Person that is
infringing, misappropriating, diluting or otherwise violating any such
Intellectual Property Rights and to retain for the Company any damages recovered
in any such action. The Company has not entered into any Contract granting any
third party the right to bring infringement actions with respect to, or
otherwise to enforce rights with respect to any Intellectual Property Right
owned by, or exclusively licensed to, the Company. The Company has not granted
to any third party the right to file, or conduct prosecution of, any patents,
copyrights, trademark applications, or any domain names with respect to such
Intellectual Property Rights.
(i)    Open Source Software. Section 3.13(i) of the Company Disclosure Schedule
(i) lists all Software (other than Open Source Software included in commercial
third-party Software) that is distributed in Company Products under an Open
Source License or that has been incorporated into or used in the development,
testing or delivery of any Company Product under an Open Source License
(collectively, “Open Source Software”), (ii) for each item of such Open Source
Software identified, specifies the license that the Open Source Software is
licensed under, and (iii) describes whether such Open Source Software was
modified or distributed by the Company and otherwise describes the Company’s use
of the Open Source Software. The Company has not used Open Source Software in
any manner that would or could, with respect to any Company Product or other
Company Intellectual Property, (A) require its disclosure or distribution in
Source Code form, (B) require its licensing thereof for the purpose of making
derivative works, (C) impose any restriction on the consideration to be charged
for the distribution thereof, (D) create, or purport to create, obligations for
the Company with respect to any Company Intellectual Property or grant, or
purport to grant, to any third party, any rights or immunities under any Company
Intellectual Property or (E) impose any other material limitation, restriction,
or condition on the right of the Company with respect to its use or
distribution. With respect to any Open Source Software that is or has been used
by the Company in any way, the Company is in compliance in with all applicable
Open Source Licenses. The parties acknowledge that Black Duck Software has been
engaged to perform an audit of the Company’s usage of Open Source Software. The
Company has provided to Black Duck Software a complete copy of all Software used
by or incorporated into the Company Products.
(j)    Source Code. The Company possesses all Source Code for all Software
included within the Company Intellectual Property. Section 3.13(j) of the
Company Disclosure Schedule lists each Source Code escrow agreement or other
agreement requiring the Company to disclose any Source Code for any Company
Intellectual Property, except for disclosures to employees, contractors or
consultants under binding written agreements that prohibit use or disclosure
except in the performances of services to the Company. Neither this Agreement
nor the transactions contemplated by this Agreement will result in any third
party being granted rights or access to, or the placement in or release from
escrow or similar arrangement of, any Company Intellectual Property including
Source Code for any Software. Except as described on Section 3.13(j) of the
Disclosure Schedules, the Company has not disclosed, delivered or licensed to
any Person, agreed to disclose, deliver or license to any Person, or permitted
the disclosure or delivery to any escrow agent or other Person of, any Source
Code included in Company Intellectual Property. No event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time,
or both) will, or would reasonably be expected to, result in the disclosure or
delivery by the Company to any Person of any Source Code included in Company
Intellectual Property. The Company has maintained and protected the Source Code
for the Software that it owns with appropriate proprietary notices and
confidentiality agreements as are reasonably necessary to protect the
information therein.
(k)    Contaminants. Except as set forth in Section 3.13(k) of the Company
Disclosure Schedule, all Company Intellectual Property included in the Company
Products are free of any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop
dead device,” “virus” or other software routines or hardware components that
permit unauthorized access or the unauthorized disablement or erasure of such
Company Products or data or other Technology. The Company has in place disaster
recovery plans, procedures and facilities and has acted in a commercially
reasonable manner to safeguard the Information Systems utilized by the Company
in the operation of its Business.
(l)    Information Systems. The Company has obtained and possesses valid
licenses to use all of the Software programs present on the computers and other
software-enabled electronic devices and Information Systems that it uses in
connection with its Business. The Company is in compliance with, and has paid in
full, a sufficient number of licenses for the operation of such Information
Systems.
(m)    Compliance. The Company has complied in all material respects with all
applicable Laws and Contracts to which it is a party and its internal privacy
policies relating to: (i) the privacy of users of the Company Products and all
Internet websites owned, maintained or operated by the Company; and (ii) the
use, collection, storage, disclosure and transfer of any personally identifiable
information collected by the Company or by third parties having authorized
access to the records of the Company. Each of the websites of the Company and
all materials distributed or marketed by the Company have at all times made all
material disclosures to users or customers required by applicable Laws and
Contracts to which the Company is a party and that are in effect as of the
applicable dates of such Contracts and none of such disclosures made or
contained in any of the websites of the Company or in any such materials have
been inaccurate, misleading or deceptive or in violation of any applicable Law
or Contract to which the Company is a party. The Company conforms, and at all
times has conformed, in all material respects to its privacy policies. No claims
have been asserted or are threatened against the Company by any Person alleging
a violation of such Person’s privacy, personal or confidentiality rights under
the privacy policies of the Company, under any Contract, or under any Law. With
respect to all personally identifiable information described in this section,
the Company has taken industry standard steps reasonably necessary (including
implementing and monitoring compliance with adequate measures with respect to
technical and physical security) to ensure that such information is protected
against loss and against unauthorized access, use, modification, disclosure or
other misuse. There has been no unauthorized access to or other misuse of such
information. The execution, delivery and performance of this Agreement, will
comply in all material respects with all applicable Laws relating to privacy and
with the privacy policies of the Company. The Company has not received a
complaint (including any action letter or other inquiry from any Governmental
Authority) regarding the Company’s collection, use or disclosure of personally
identifiable information. There have been no facts or circumstances that would
require the Company to give notice to any customers, suppliers, consumers or
other similarly situated individuals of any actual or perceived data security
breaches pursuant to an applicable Law requiring notice of such a breach.
(n)    Confidentiality. The Company has taken all reasonable steps to maintain
the confidentiality of and otherwise protect and enforce their rights in all
Intellectual Property Rights that the Company holds, or purports to hold as
confidential, whether owned by, or provided to, the Company, and material to the
conduct of the Company’s business, the value of which to the Company is
contingent upon maintenance of the confidentiality thereof. No trade secret or
confidential know-how owned by the Company has been disclosed or authorized to
be disclosed to any third party (other than employees or consultants of the
Company who are bound by an agreement protecting the Company’s proprietary
interests in and to such trade secrets and confidential know-how) by the Company
or any of its employees, or by any third party who received such trade secret or
confidential know-how from the Company, other than pursuant to a non-disclosure
agreement that protects the Company’s proprietary interests in and to such trade
secrets and confidential know-how, which disclosure would not be materially
adverse to the Business. .
(o)    No Obligations to Develop Intellectual Property. Except for agreements
with customers to create enhancements that are part of or used in connection
with the core Company Products, the Company is not under any obligation, whether
written or otherwise, to develop any Intellectual Property Rights for any third
party (including any customer or end user).
(p)    Development. Section 3.13(p) of the Company Disclosure Schedule
identifies all Persons who have contributed to or participated in the conception
or the development of the Company Intellectual Property and Company Technology
and whether such Person was an employee or contractor to the Company. All
personnel, including employees, agents, consultants and contractors, who have
contributed to or participated in the conception or development of the Company
Intellectual Property and Company Technology:
(i)    have executed and are legally bound by a nondisclosure agreement
applicable to the Company’s Confidential Information to which the Company is the
beneficiary either directly or indirectly (for example, in the case of an
employee of a consultant or independent contractor who has entered into such a
nondisclosure agreement with the Company); and
(ii)    (A) have been party to a “work-for-hire” arrangement or agreement with
the Company, in accordance with applicable federal and state law, that has
accorded the Company full, effective, original, and exclusive ownership of all
Intellectual Property Rights developed for the Company or (B) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective, and exclusive ownership of all
Intellectual Property Rights developed for the Company, in each case either
directly or indirectly (for example, in the case of an employee of a consultant
or independent contractor who has entered into such an assignment agreement with
the Company).
(iii)    None of the Company’s employees’ or consultants’ who work for the
Company have been in any way in breach of such employees’ or consultants’
obligations to any third parties, including any confidentiality or Intellectual
Property Rights obligations. There is no basis for any third party to claim
rights to any Intellectual Property Rights owned or purported to be owned by the
Company as work for hire or otherwise in connection with any work performed by a
Company employee or consultant for such third party at any time.
(q)    Standards Organizations. The Company does not belong to or participate
in, and has not entered into any Contract with, any organization involved in the
development, preparation, or promulgation of standards that does or may require
the provision of Company Intellectual Property to any third Person.
(r)    Government Funding. No (i) government funding; (ii) facilities of a
university, college, other educational institution or research center; or (iii)
funding from any Person (other than funds received in consideration for shares
of capital or units, general commercial debt incurred by the Company or from the
sale of products or services) was used in the development of the Company
Intellectual Property. To the Knowledge of the Company, no current or former
employee, consultant or independent contractor of the Company who was involved
in, or who contributed to, the creation or development of any Company
Intellectual Property has performed services for any government, university,
college or other educational institution or research center during a period of
time during which such employee, consultant or independent contractor was also
performing services for the Company.
(s)    Customization Obligations. Except as set forth on Section 3.13(s) of the
Company Disclosure Schedule, the Company is not subject to any Contract with
customers or other third parties to create enhancements or customizations that
are part of or used in connection with the Company Products (collectively,
“Customization Obligations”). Except as set forth on Section 3.13(s) of the
Company Disclosure Schedule, no customer’s or other third party’s obligation to
pay any amounts to the Company are contingent, directly or indirectly, in full
or in part, upon the Company’s full or partial completion of any Customization
Obligation. In the event any disclosure is included in Section 3.13(s) of the
Company Disclosure Schedule, such disclosure includes a detailed description of
the obligations of the Company, the specific conditions comprising the
Customization Obligations that must be satisfied in order for the Company to
perform in full the contingency for the customer’s or other third party’s
payment obligation and a detailed description of the amount and conditions to
such payments. Except as expressly set forth in Section 3.13(s) of the Company
Disclosure Schedule, the full or partial completion by the Company of any
Customization Obligation is not a condition to the Company’s recognition of
subscription revenue payable by any customer or other third party. The Company
is not under any obligation, whether written or otherwise, to develop any
Intellectual Property for any third party (including any customer or end user).
The Company owns all right, title and interest in all enhancements and
customizations developed by the Company for any customer or other third party.
3.14    Certain Contracts.
(a)    Section 3.14(a) of the Company Disclosure Schedule contains a complete
and accurate list of each of the following Contracts of any type (other than
employment related agreements expressly set forth on Section 3.10 of the Company
Disclosure Schedule), to which the Company is a party, copies of each of which
(including all amendments, supplements, schedules, addenda and similar
modifications) have been made available to Parent:
(i)    any Contract (or group of related Contracts) requiring payments by the
Company in excess of $25,000 annually;
(ii)    any Contract or commitment (or group of related Contracts or
commitments) to make a capital expenditure or to purchase or sell a capital
asset in excess of $10,000 individually or in the aggregate by or on behalf of
the Company;
(iii)    any dealer, distributor, OEM (original equipment manufacturer), VAR
(value added reseller), sales representative or similar Contract under which any
third party is authorized to sell, sublicense, lease, distribute, or take orders
for any of its products, services or Technology, and (ii) any dealer,
distributor, OEM (original equipment manufacturer), VAR (value added reseller),
sales representative or similar Contract under which the Company is authorized
to sell, sublicense, lease, distribute or take orders for any products, services
or Technology for any third party;
(iv)    any Contract providing for the development of any Software, content,
Technology or intellectual property for (or for the benefit or use of) the
Company, or providing for the purchase by or license to (or for the benefit or
use of) the Company of any Software, content, Technology or intellectual
property, which Software, content, Technology or intellectual property is in any
manner used or incorporated (or is contemplated by the Company to be used or
incorporated) in any aspect or element of any product, service or Technology of
the Company (other than Shrink Wrap Code);
(v)    any bond, indenture, note, loan or credit agreement or other Contract
relating to the borrowing of money or to the guarantee or assumption of the
obligations of any other Person for borrowed money or to any other Debt or under
which it has imposed a Lien on any of its material assets, tangible or
intangible, except for any Permitted Liens;
(vi)    any Contract or judgment, injunction, order or decree that (A) restricts
the Company or, to the Knowledge of the Company, any manager, director, officer,
employee or equityholder of the Company from engaging in any aspect of the
Business, (B) restricts the Company, or, to the Knowledge of the Company, any
manager or employee of the Company from engaging, participating or competing in
any line of business, market or geographic area, (C) restricts it from freely
setting prices for its products, services or technologies (including most
favored customer or similar pricing provisions), (D) restricts it from
soliciting potential employees, consultants, contractors or other suppliers or
customers, or (E) that grants any exclusive rights, rights of refusal, rights of
first negotiation or similar rights to any party;
(vii)    any Contract of guarantee, indemnification or assumption of the
Liabilities of any other Person, other than contracts with customers entered
into in the ordinary course of business and on the Company’s form customer
agreement (a copy of which is included in Section 3.14(a)(vii) of the Company
Disclosure Schedule;
(viii)    any lease or similar agreement under which the Company is the lessor
of, or makes available for use by any third Person, any tangible personal
property owned by the Company;
(ix)    any lease pursuant to which the Company leases any real property;
(x)    any joint venture, partnership or other Contract that has involved, or
provides for a sharing of revenues, profits, cash flows, expenses or losses with
any other party;
(xi)    any outstanding loan, advance or investment by the Company to any Person
other than travel advances made in the ordinary course of business, consistent
with past practice;
(xii)    any Contract for the employment of any individual on a full-time or
part-time basis providing base annual compensation and bonus compensation at a
rate in excess of $50,000 in the aggregate or that does not provide for
termination by the Company at will without any severance obligation.
(xiii)    severance, “stay pay” or termination agreement with any officer or
other employee of the Company;
(xiv)    any grant or contract with a Governmental Authority or any Permit;
(xv)    any Contract for the acquisition of any operating business or the
capital stock of any other Person;
(xvi)    any Contract related to Intellectual Property Rights licensed to the
Company from a third party (including Contracts related to third-party
Intellectual Property referenced in Section 3.13(b) of the Company Disclosure
Schedule), except for licenses for Shrink Wrap Code, and indicate if such
Contract is not perpetual;
(xvii)    any Contract related to Intellectual Property Rights licensed by the
Company to a third party, except for non-exclusive licenses granted to customers
in the ordinary course of business;
(xviii)    any Contract under which the Company has granted (A) any covenant not
to sue, assert or exploit any Company Intellectual Property, or (B) any third
party the right to bring a lawsuit for infringement, misappropriation, dilution
or other violation of any Company Intellectual Property; and
(xix)    any other Contract not listed above that is material to it or the
Business, operations, financial condition, properties or assets.
(b)    Each Contract of any type or form set forth or required to be set forth
in Sections 3.10, 3.13 and 3.14(a) of the Company Disclosure Schedule (or, in
each case, any subsection thereof), whether or not set forth in such Schedules,
is referred to herein as a “Material Contract.” With respect to each Material
Contract, as of the date hereof, such Material Contract is in full force and
effect and is valid and enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar Laws relating
to or affecting the enforcement of creditors’ rights generally and legal
principles of general applicability governing the availability of equitable
remedies (whether considered in a proceeding in equity or at Law or under
applicable legal codes). The Company has performed in all material respects all
of the obligations required to be performed by it and is entitled to all
benefits under each Material Contract. There exists no breach, default or event,
occurrence, condition or act with respect to the Company or, to the Knowledge of
the Company, with respect to any other contracting party, which, with the giving
of notice, the lapse of time or both, is or would reasonably be expected to (x)
become a breach or default under any Material Contract or (y) give any third
party (1) the right to declare a breach or default or exercise any remedy under
any Material Contract, (2) the right to a rebate, chargeback, refund, credit,
penalty or change in performance schedule under any Material Contract, (3) the
right to accelerate the maturity or performance of any obligation of the Company
under any Material Contract, or (4) the right to cancel, terminate or modify any
Material Contract. The Company has not received any notice (written or oral) or
other communication regarding any actual or possible violation or breach of or
default under, or intention to cancel or modify, any Material Contract or to
reduce the level of product or services provided for, to the Company under the
Material Contracts.
3.15    Environmental, Health and Safety.
The Company has complied in all material respects with all applicable Laws of
Governmental Authorities concerning the environment, public health and safety,
and employee health and safety, and no claim, action, suit, litigation,
proceeding or investigation has been filed or commenced against the Company
alleging any failure to comply with any such Laws.
3.16    Insurance.
Each insurance policy now held by the Company (collectively, the “Insurance
Policies”) is set forth on Section 3.16 of the Company Disclosure Schedule,
together with the name of the insurer, the type of policy or bond, the coverage
amount and any applicable deductible. True, correct and complete copies of the
Insurance Policies have been made available to Parent. All premiums due and
payable under all such policies have been timely paid, and the Company is
otherwise in compliance in all material respects with the terms of the Insurance
Policies. All Insurance Policies are in full force and effect and are sufficient
for compliance by the Company with all Contracts to which the Company is a
party. The Company has no Knowledge of any threatened termination of, or
material premium increase with respect to, any of the Insurance Policies. There
is no claim pending under any insurance policy as to which coverage has been
questioned, denied, disputed by the underwriters of such Insurance Policy. The
Company at all times submits accurate information to the insurers as to the
employees’ remuneration for the purposes of workers’ compensation insurance.
3.17    Certain Transactions and Agreements.
Except as set forth on Section 3.17, none of the officers, directors, employees,
equityholders or other affiliates of the Company or any member of the Company or
any individual related by marriage or adoption to any such Person or any entity
in which any such Person owns any beneficial interest (other than through
ownership of less than 1% of the outstanding voting shares of any corporation
whose stock is publicly traded or shares of a mutual fund) (collectively, the
“Insiders”) (a) has any direct or indirect ownership or other interest in, or
any employment or consulting agreement with, any Person that competes or does
business with the Company, (b) is directly or indirectly interested in any
Material Contract, except for compensation for services as a director, officer
or employee of the Company as set forth on Section 3.10 or Section 3.14 of the
Company Disclosure Schedule, (c) has any interest in any property, real or
personal, tangible or intangible, used in the Company’s Business, except for the
rights of a Company Member, or (d) has or had, either directly or indirectly, a
material interest in any Person that purchases from or sells, licenses or
furnishes to the Company any goods, property, technology or intellectual or
other property rights or services.
3.18    Customers and Suppliers.
(a)    Except as set forth on Section 3.18(a), the Company does not have (and
has not had since January 1, 2012) any outstanding dispute concerning its
products or services with any customer or other Person who, in the twelve (12)
months ended on the date hereof, was one of the fifteen (15) largest sources of
revenue for the Company, based on amounts paid to the Company (each, a
“Significant Customer”). Each Significant Customer is listed on Section 3.18(a)
of the Company Disclosure Schedule. The Company has not received notice (whether
written or oral) from any Significant Customer that such customer (i) has or
intends to terminate or materially modify its Contracts or relationship with the
Company or materially reduce the rate or volume of products or services or the
amount payable to the Company for products and services or (ii) plans to seek to
purchase 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 convert any exclusive or single-source purchasing arrangement or
relationship between such customer and the Company into a non-exclusive or
multi-source arrangement or relationship.
(b)    Except as set forth on Section 3.18(b) of the Company Disclosure
Schedule, the Company does not have (and has not had since January 1, 2012) any
outstanding material dispute concerning products or services provided by any
Person who, in the twelve (12) months ended on the date hereof, is one of the
fifteen (15) largest suppliers of products or services or increase the rate
charge for products or services provided to the Company, based on amounts paid
to the Company (each, a “Significant Supplier”). Each Significant Supplier is
listed on Section 3.18(b) of the Company Disclosure Schedule. The Company has
not received a notice (whether written or oral) from any Significant Supplier
that such supplier intends to terminate or materially modify Contracts or
relationships with the Company or stop or materially reduce the rate of
supplying products or services to the Company.
3.19    Certain Payments.
Neither the Company, nor any director, officer, Affiliate or employee thereof,
has given, offered, paid, promised to pay or authorized payment of any money,
any gift or anything of value, with the purpose of influencing any act or
decision of the recipient in his or her official capacity or inducing the
recipient to use his or her influence to affect an act or decision of a
government official or employee that relates to the Business of the Company, to
any (a) governmental official or employee, (b) political party or candidate
thereof, or (c) other Person, while knowing that all or a portion of such money
or thing of value would be given or offered to a governmental official or
employee or political party or candidate thereof.
3.20    Brokers.
Except as set forth in Section 3.20 of the Company Disclosure Schedule, no
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of the Company.
3.21    Sufficiency of Assets.
The assets of the Company constitute all the assets and services used by the
Company in operating the Business as it is currently operated, and will enable
the Company to operate the Business following the Closing in the same manner as
operated immediately prior to the Closing.
3.22    Disclosure.
No representation or warranty by the Company in this Agreement and no statement
contained in the Company Disclosure Schedules to this Agreement or any
certificate or other document furnished or to be furnished to Parent pursuant to
this Agreement contains any untrue statement of a material fact, or omits to
state a material fact necessary to make the statements contained therein, in
light of the circumstances in which they are made, not misleading.
3.23    No Other Representations and Warranties.
Except for the representations and warranties contained in this Article III
(including the related portions of the Company Disclosure Schedule), none of the
Company or any other Person has made or makes any other express or implied
representation or warranty, either written or oral, on behalf the Company,
including any representation or warranty as to the accuracy or completeness of
any information regarding the Company furnished or made available to Parent and
its representatives.
ARTICLE IV    
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant, jointly and severally, to
the Company that the statements contained in this Article IV are true and
correct as of the date hereof and as of the Closing Date as follows:
4.1    Organization and Qualification; Ownership and Interim Operations of
Merger Sub.
Each of Parent and Merger Sub is a legal entity duly organized, validly existing
and in good standing under its relevant jurisdiction of organization. Merger Sub
is wholly-owned by Parent, was formed solely for the purpose of engaging in the
Transactions, has no Liabilities other than those contemplated by this Agreement
and has engaged in no activities other than in connection with entering into
this Agreement and the other Transaction Documents to which it is a party and
consummating the Transactions.
4.2    Authorization of Agreement.
Each of Parent and Merger Sub has all requisite limited liability company power
and authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party, and to perform its obligations hereunder and
thereunder and to consummate the Transactions. The execution and delivery of
this Agreement and the other Transaction Documents to which it is a party by
each of Parent and Merger Sub and the consummation by each of Parent and Merger
Sub of the Transactions have been duly authorized by all necessary action, and
no other proceedings on the part of Parent and Merger Sub are necessary to
authorize this Agreement and the other Transaction Documents to which they are
party or to consummate the Transactions. This Agreement has been duly executed
and delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery hereof by the Company and the Representative, constitutes
the legal, valid and binding obligation of Parent and Merger Sub, enforceable
against Parent and Merger Sub in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar Laws relating to or
affecting the enforcement of creditors’ rights generally and legal principles of
general applicability governing the availability of equitable remedies (whether
considered in a proceeding in equity or at Law or under applicable legal codes).
4.3    No Conflict; Required Filings and Consents.
The execution and delivery of this Agreement by each of Parent and Merger Sub
does not, and the consummation of the Transactions will not (a) conflict with or
violate the certificate of incorporation and bylaws or other equivalent
organizational documents, in each case as amended or restated, of Parent and
Merger Sub, (b) conflict with or violate any Laws applicable to Parent or Merger
Sub or by which any of their respective assets or properties is bound or
subject, (c) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, acceleration or cancellation of, or require
payment under, or result in the creation of a Lien (other than Permitted Liens)
on any of the properties or assets of Parent or Merger Sub pursuant to, any
Contract, Permit, franchise or other instrument or obligation to which Parent or
Merger Sub is a party or by or to which any of them or any of their respective
assets or properties is bound or subject or (d) require Parent or Merger Sub to
obtain any consent, license, permit, approval, waiver, authorization or order
of, or to make any filing with or notification to, any Governmental Authority or
third Person, except for (i) the filing of the Articles of Merger with the
Georgia Secretary of State or (ii) compliance with and filings, notices,
permits, authorizations, consents and approvals that may be required under any
Competition Laws.
4.4    Financial Ability.
Parent has, and at the Closing will have, funds sufficient to consummate the
Transactions and to pay the Aggregate Merger Consideration and all other amounts
payable by Parent in connection with the Transactions, such that it is not a
condition precedent to Closing that Parent or Merger Sub obtain financing or any
approvals from third parties.
4.5    Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Merger Sub.
4.6    Litigation.
There is no claim, action, suit, proceeding or arbitration pending, or to
Parent’s knowledge, threatened against Parent, Merger Sub or any of its or their
assets, properties or rights, and none of Parent or Merger Sub is subject to any
judgment, order, writ, injunction, decree or award of, or any settlement
agreement with, any Governmental Authority or arbitrational tribunal, in each
case, which would materially and adversely affect the ability of Parent or
Merger Sub to consummate the Transactions and otherwise perform their
obligations thereunder.
ARTICLE V    
CONDUCT PRIOR TO THE CLOSING
5.1    Conduct of Business.
From the date hereof until the earlier to occur of the Closing or the
termination of this Agreement pursuant to Article IX, except as expressly
required by this Agreement and the Transaction Documents, including Schedule 5.1
hereto, the Company will (i) conduct the Business in the ordinary course of
business, consistent with past practice, (ii) ) take no action or fail to take
action that would cause or result in a breach of any representation or warranty
of the Company contained in Article III and (iii) except as otherwise provided
in this Agreement, set forth on Schedule 5.1 hereto or consented to in writing
by the Parent (which consent shall not be unreasonably withheld or delayed), not
(c)    cause or permit any modifications, amendments or changes to the Company
Organizational Documents;
(d)    other than in the ordinary course of business, make (or incur any
obligation to make) any expenditures (including capital expenditures) or
commitment exceeding $10,000, individually or in the aggregate;
(e)    enter into any Contract that gives rise to any unearned or deferred
revenue Liability under GAAP;
(f)    adopt or change accounting methods or practices other than as required by
GAAP;
(g)    make or change any election in respect of Taxes, adopt or change any
accounting method, change an annual accounting period, file any amended Tax
return, enter into any closing agreement, enter into any agreement to settle any
claim or assessment in respect of Taxes, surrender any right to claim a refund
of Taxes, consent to any extension or waiver of the limitation period applicable
to any claim or assessment in respect of Taxes;
(h)    declare, set aside, or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any Company
Units, or split, combine or reclassify any Company Units or directly or
indirectly repurchase, redeem or otherwise acquire any Company Units (or
options, warrants or other rights convertible into, exercisable or exchangeable
for, Company Units);
(i)    issue or authorize the issuance of any other securities, including any
securities in respect of, in lieu of or in substitution for, Company Units (or
options, warrants or other rights convertible into, exercisable or exchangeable
for, Company Units), except for the issuance of Company Units in connection with
the exercise of the Company Warrants or Company Options or the conversion of the
Preferred Units;
(j)    adopt or amend any Company Benefits Plan, or enter into any employment
agreement, pay any bonus or special remuneration (cash, equity or otherwise) to
any director, officer, employee or consultant, or increase the salaries or wage
rates or fringe benefits or other compensation (cash, equity or otherwise)
(including rights to severance or indemnification) of its directors, officers,
employees or consultants (other than that which is required (and then only at
the time required) under the terms of the Company Benefits Plans in effect on
the date hereof and changes to compensation of employees (other than executive
officers) in the ordinary course of business, consistent with past practice);
(k)    incur, assume or guarantee any Debt;
(l)    waive or release any right or claim of the Company, including any
write-off or other compromise of any account receivable of the Company, in each
case in excess of $25,000 individually or in the aggregate or that is otherwise
material to the Company;
(m)    commence or settle any lawsuit, threat of any lawsuit or proceeding or
other investigation by or against any the Company or relating to any of its
Business, properties or assets;
(n)    enter into any lease, sublease, license or other occupancy agreement with
respect to any real property or alter, amend, modify or terminate any of the
terms of any lease agreements;
(o)    terminate, amend or otherwise modify, violate the terms of, or make any
payments resulting from agreed upon early termination of, any Contracts;
(p)    enter into any Contract that (i) restricts the Company from engaging in
any aspect of the Business, (ii) restricts the Company from engaging,
participating or competing in any line of business, market or geographic area,
(iii) restricts it from freely setting prices for its products, services or
technologies (including most favored customer pricing or similar provisions),
(iv) restricts the Company from soliciting potential employees, consultants,
contractors or other suppliers or customers, or (v) that grants any exclusive
rights, rights of refusal, rights of first negotiation or offer or similar
rights to any party;
(q)    assign, sell, license or otherwise transfer to any Person any right to
Company Intellectual Property other than grants of non-exclusive licenses of the
Company Products to customers in the ordinary course of business consistent with
past practice; or
(r)    take, commit, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through (o).
5.2    Access and Information.
Between the date hereof and the Closing Date, the Company shall (a) afford to
Parent and Parent’s officers, directors, employees, accounting firm,
consultants, legal counsel, agents and other representatives (collectively, the
“Parent Representatives”) reasonable access during normal business hours upon
reasonable prior notice, to the directors, officers, employees, agents,
auditors, properties, offices, customers, facilities, books and records of the
Company (provided that all such access to employees and customers shall be
coordinated in advance with the Company or its designated representatives) and
(b) furnish promptly to Parent and the Parent Representatives such information
concerning the business, properties, Contracts, records and personnel (including
financial, operating and other data and information) of the Company as is
prepared or compiled by the Company in the ordinary course of business and as
may be reasonably requested from time to time by Parent. Parent shall treat all
information obtained from the Company as “Confidential Information” (as such
term is defined in the Non-Disclosure Agreement) and Parent shall continue to
honor, and cause the Parent Representatives to honor, its obligations under the
Non-Disclosure Agreement.
ARTICLE VI    
ADDITIONAL AGREEMENTS
6.1    Appropriate Actions; Consents; Filings; Cooperation.
(d)    The Company, Merger Sub and Parent will each cooperate with each other in
connection with, and the Company, Merger Sub and Parent shall use commercially
reasonable efforts to (i) take, or to cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under the
Agreement and the other Transaction Documents to which they are a party,
applicable Law or otherwise to consummate and make effective the Transactions,
(ii) obtain from any Governmental Authorities any consents, licenses, Permits,
waivers, approvals, authorizations or orders required to be obtained and to make
any filings with or notifications or submissions to any Governmental Authority
required to be made by such Person in connection with the authorization,
execution and delivery of this Agreement and the other Transaction Documents to
which they are a party and the consummation of the Transactions, and (iii) make
all necessary filings, make such notices, deliver such written consents, and
make any other required submissions, with respect to this Agreement and the
other Transaction Documents to which they are a party, that are necessary,
proper or advisable under applicable Law or otherwise are reasonably required to
obtain the Company Approvals and to comply with Law. All Company Approvals shall
be in writing and in form and substance reasonably satisfactory to Parent, and
executed counterparts of such Company Approvals shall be delivered to Parent
promptly after receipt thereof, and copies of such notices shall be delivered to
Parent promptly after the making thereof. Notwithstanding anything herein to the
contrary, none of Parent, Merger Sub or any of their respective Affiliates
(which for purposes of this sentence shall include the Surviving Company) shall
be required to pay any amounts in connection with obtaining any Company Approval
or provide any guarantees of the obligations of any Company Securityholder or
the Company.
(e)    The Company will give prompt notice to Parent upon becoming aware of (i)
any event, fact, circumstance, change or condition that might reasonably be
expected to cause any of the representations or warranties set forth in Article
III not to be true and correct at the Closing such that the conditions set forth
in Sections 7.1 and 7.2 would not be satisfied or (ii) any failure of the
Company to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
6.2    Confidentiality; Public Announcements.
The Company and Parent each confirms that it (or one of its Affiliates) has
entered into the Non-Disclosure Agreement and that it is bound by, and will
abide by, the provisions of the Non-Disclosure Agreement, the terms of which
remain in full force and effect. If this Agreement is terminated, the
Non-Disclosure Agreement will remain in full force and effect, and all copies of
documents containing confidential information of a disclosing party will be
returned by the receiving party to the disclosing party or be destroyed, in each
case, to the extent provided in the Non-Disclosure Agreement. Notwithstanding
the foregoing, from the date of this Agreement until Closing or termination of
this Agreement pursuant to Article IX, the parties shall cooperate in good faith
to jointly prepare all press releases and public announcements pertaining to
this Agreement and the Transactions and no party shall issue or otherwise make
any public announcement or communication pertaining to this Agreement or the
Transactions without the prior written consent of Parent (in the case of an
announcement or communication by the Company, the Company Securityholders and
the Representative) or the Company (in the case of an announcement or
communication by Parent and Merger Sub), except as required by applicable Law or
by the rules and regulations, including the filing with the Securities and
Exchange Commission of a Form 8-K by Parent or its Affiliates relating to this
Agreement.. No party will unreasonably delay, withhold or condition approval
from the others with respect to any such press release or public announcement.
6.3    Exclusivity.
From and after the date hereof through the termination of this Agreement in
accordance with the terms hereof (the “Specified Time”), the Company shall not,
and shall cause its officers, directors, controlling persons, equityholders,
employees, representatives, agents, advisors and Affiliates (collectively, the
“Company Representatives”) not to, directly or indirectly: (a) submit, initiate,
solicit, encourage or otherwise facilitate or discuss or enter into any
agreement or accept any inquiry, proposal, offer or discussion with any party
(other than Parent or its Affiliates) concerning any Acquisition Proposal; (b)
furnish any information concerning the business, properties or assets of the
Company to any Person (other than Parent or its Affiliates) in connection with
an inquiry, proposal or offer for an Acquisition Proposal; or (c) engage in
discussions or negotiations with or otherwise facilitate or assist any party
(other than Parent or its Affiliates) concerning any such inquiry, proposal or
offer for an Acquisition Proposal. From and after the date hereof, the Company
shall promptly advise Parent in writing of the receipt of any inquiry, proposal
or offer for an Acquisition Proposal and provide details of such Acquisition
Proposal and a copy of any written communication regarding any Acquisition
Proposal. The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any Persons (other than Parent or its
Affiliates) conducted heretofore with respect to any Acquisition Proposal. The
Company represents that neither it nor any of Company Representatives will, by
pursuing the Transactions, violate the terms of any other agreement or
obligation to which they or any such Company Representative is subject.
6.4    Company Member Approval.
(i)    Subject to Section 6.3 above, the Company shall use its commercially
reasonable efforts to obtain the Company Member Approval and to deliver to
Parent, immediately following execution of this Agreement by the parties hereto
(but no later than one Business Day following the date hereof), a true, correct
and complete copy of the Member Written Consent evidencing the adoption and
approval of the Merger, this Agreement and the Transactions by the Company
Members constituting the Company Member Approval.
(j)    As soon as practicable (and in any event within two (2) Business Days)
following the execution and delivery of this Agreement, the Company shall take
all action reasonably necessary in accordance with this Agreement, the LLC Act
and the Company Organizational Documents to solicit a Member Written Consent
from each Company Member who did not execute such consent in accordance with
Section 6.4(a), and (ii) deliver to any such Company Member who did not execute
the Member Written Consent pursuant to Section 6.4(a) a notice of approval of
the Merger and the adoption of this Agreement by written consent of the Company
Members, which notice shall constitute the notice to Company Member required by
the LLC Act that appraisal rights may be available to such Company Members in
accordance with the LLC Act.
(k)    Any materials to be submitted to the Company Members pursuant to Section
6.4(b) above in connection with the Company’s solicitation of the Company
Members described above or notices with respect to appraisal rights (the
“Soliciting Materials”) shall be subject to review and approval by Parent (which
approval shall not be unreasonably withheld or delayed) and shall include
information regarding the Company, the terms of the Merger, this Agreement
(including the obligations set forth in Article VIII hereof and the appointment
of the Representative) and, subject to Section 6.3, the recommendation of the
Company Board with respect to the adoption of this Agreement and approval of the
Merger and the other transactions contemplated hereby.
6.5    Payoff Amounts; Payoff Letters; Transaction Expenses.
It is contemplated by the parties hereto and Section 2.8 that, upon the Closing,
all Debt of the Company set forth on Schedule 6.5 (the “Repaid Debt”) will be
fully repaid, and that such repayment will be funded with a portion of the
amounts payable hereunder. In order to facilitate such repayment, no less than
five (5) Business Days prior to the Closing, the Company shall obtain payoff
letters for the Repaid Debt (the “Payoff Letters”), which Payoff Letters will be
in a form reasonably satisfactory to Parent and shall include: (a) the balance
required to pay off all obligations arising in connection with such Repaid Debt
in whole as of the Closing (including outstanding principal, all accrued and
unpaid interest, the per-diem interest amount and any and all prepayment
penalties (such amount through and including the Closing Date, the “Payoff
Amounts”)); (b) a statement from each secured creditor that upon payment of the
applicable Payoff Amount, any Liens relating to the assets or properties of the
Company shall immediately be released; (c) wiring instructions for the payment
of the Payoff Amounts and (d) a release related to the Company’s obligations for
such Repaid Debt, contingent upon repayment. 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 or cause to be made
the payments referenced in such Payoff Letters on the Closing Date in order to
discharge the Repaid Debt covered thereby in accordance with Section 2.8. In
addition, it is contemplated by the parties hereto that, upon the Closing any
all of the Transaction Expenses will be fully paid, and the Base Merger
Consideration will be reduced by the amount of the Transaction Expenses not
fully paid prior to the Closing Date. Subject to the satisfaction of the
Company’s conditions, covenants and obligations to be satisfied prior to the
Closing, in connection with the Closing pursuant to Section 2.9 hereof, Parent
shall make or cause to be made payment pay to the Company an amount equal to the
unpaid Transaction Expenses on the Closing Date in order to provide the Company
funds to discharge the amounts payable thereunder.
6.6    Tax Matters.
(a)    Tax Return Filings. The Representative will prepare and timely file (or
cause to be prepared and timely filed) all Tax Returns of the Company required
to be filed on or before the Closing Date (after taking into account extensions
therefor). The Surviving Company will prepare and timely file (or cause to be
prepared and timely filed) all Tax Returns of the Company that the
Representative is not obligated to file (or cause to be filed) pursuant to this
Section 6.6(a). If any such Tax Return (whether original or amended) prepared
(or caused to be prepared) by the Surviving Company relates to or otherwise
affects any Pre‑Closing Tax Period, or if any such Tax Return (whether original
or amended) prepared (or caused to be prepared) by the Representative relates to
or otherwise affects any Post‑Closing Tax Period, then such Tax Return will be
prepared in accordance with past practices of the Company (except to the extent
otherwise required by applicable Laws) and the preparing party will give to the
Representative or the Surviving Company, as applicable, a copy of such Tax
Return as soon as practicable after the preparation, but before the filing,
thereof for such other party’s review and comment. Such preparing party will
consider in good faith and make any changes to such Tax Return that are
reasonably requested by the other party and consistent with past practices of
the Company and applicable Laws or otherwise required by applicable Laws.
(b)    Straddle Period Determinations. 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 of the Company for the portion of the Straddle Period ending
on and including the Closing Date which are based on or measured by income or
receipts of the Company shall be determined based on an interim closing of the
books as of the close of business on the Closing Date, and the amount of other
Taxes of the Company for the portion of the Straddle Period ending on and
including the Closing Date shall be deemed to be the amount of such Tax for the
entire Straddle Period multiplied by a fraction the numerator of which is the
number of days in the Straddle Period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period. The balance
of the Taxes with respect to a Straddle Period shall be deemed to relate to the
portion of the Straddle Period following the Closing Date.
(c)    Transfer Taxes. The Company Securityholders shall pay all transfer,
documentary, registration, sales, use and similar Taxes incurred in connection
with and as a result of the transfer or conversion of the Company Units and the
Merger, together with any related fee, penalties, interest and additions to such
Taxes (“Transfer Taxes”). The Representative and Parent shall cooperate in
timely preparing and filing all Tax Returns as may be required to comply with
the provisions of such Tax Laws. Each party hereto shall use its commercially
reasonable best efforts to avail itself of any available exemptions from any
Transfer Taxes, and shall cooperate with the other parties in timely providing
any information and documentation, including resale certificates, that may be
necessary to obtain such exemptions. For the avoidance of doubt, the term
“Transfer Taxes” shall not include any income Taxes.
(d)    Cooperation. Each party hereto will cooperate in all reasonable respects
with respect to Tax matters and provide one another with such information as is
reasonably requested to enable the requesting party to complete and file all Tax
Returns it may be required to file (or cause to be filed) with respect to the
Company, to respond to Tax audits, inquiries or other Tax proceedings and to
otherwise satisfy Tax requirements. Such cooperation also will include promptly
forwarding copies (to the extent related thereto) of (i) relevant Tax notices,
forms or other communications received from or sent to any Governmental
Authority (whether or not requested) and (ii) reasonably requested copies of all
relevant Tax Returns together with accompanying schedules and related work
papers, documents relating to rulings, audits or other Tax determinations by any
Governmental Authority and records concerning the ownership and Tax basis of
property.
(e)    Allocation of Purchase Price. Within ninety (90) days after the Base
Merger Consideration is finally determined pursuant to Section 2.9, Parent shall
provide Representative with a schedule reflecting Parent’s allocation in
accordance with applicable Laws of the Base Merger Consideration (plus other
relevant items) among the assets of the Company for all purposes (including Tax
and financial accounting purposes). The Parent shall permit Representative to
review and comment on the allocation schedule and shall consider such revisions
as are reasonably requested by Representative. With respect to such allocation
(as adjusted to reflect the Aggregate Merger Consideration) each party hereto
shall (i) be bound by such allocation; (ii) prepare all financial statements and
prepare and file all Tax Returns in accordance with such allocation; and (iii)
take no position and cause its Affiliates to take no position inconsistent with
such allocation (including in connection with any Tax audit, Tax review or Tax
proceeding), unless in each case otherwise required pursuant to a
“determination” within the meaning of Code Section 1313(a).
(f)    State and Local Tax Returns. Notwithstanding anything else to the
contrary herein, Parent shall be permitted to prepare and file, or cause to be
prepared and filed, state and local Tax Returns for the Company, including for
any period ending on or before the Closing Date, to the extent Parent determines
in its sole discretion that such Tax Return(s) should be filed pursuant to or
otherwise in connection with any “voluntary disclosure agreement” or similar
arrangement with the applicable taxing authority; provided, that such Tax
Returns shall first be submitted to the Representative fifteen (15) days prior
to Parent’s proposed date for filing such Tax Return, and Parent shall consider
in good faith any reasonable comments that the Representative submits within ten
(10) days after receipt of such Tax Returns. For the avoidance of doubt, any
Taxes for any period ending on or before the Closing Date relating to such Tax
Returns and any expenses incurred with respect thereto shall be deemed for all
purposes of this Agreement to constitute Damages subject to indemnification
pursuant to Section 8.1(g).
(g)    Parent shall control all Tax Contests. In the event of any audit,
examination, dispute or contest regarding Taxes (a “Tax Contest”), the Parent
shall be entitled to control the defense or prosecution of such Tax Contest and
for avoidance of doubt, any and all costs, fees and expenses incurred in
connection therewith shall constitute Damages subject to indemnification. If the
Company Securityholders would be required to indemnify the Parent with respect
to any such matter pursuant to Section 8.1(g), the Representative at the sole
expense of the Company Securityholders, shall have the right to reasonably
participate in the Parent’s defense or prosecution of any Tax Contest. Parent
shall be entitled to settle any Tax Contest without the consent of the
Representative, except that the prior written consent of the Representative
shall be required (such consent not to be unreasonably withheld, conditioned, or
delayed) if such Tax Contest is solely with respect to a taxable period ending
on or before the Closing Date and could not adversely affect the liability for
Taxes of Buyer or the Company for any period (or portion thereof) after the
Closing to any extent (including the imposition of Tax deficiencies, the
reduction of asset basis or cost adjustments, the lengthening of any
amortization or depreciation periods, the denial of amortization or depreciation
deductions, or the reduction of loss or credit carryforwards).
ARTICLE VII    
CONDITIONS TO CLOSING
7.1    Conditions to Obligations of Each Party.
The respective obligations of each party hereto to effect the Transactions are
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived in writing by the parties hereto
at or prior to the Closing:
(a)    No Order. No Governmental Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) or Order that is in effect and has the effect of
making the Transactions illegal or otherwise prohibiting consummation of the
Transactions.
(b)    Expiration or Termination of Competition Law Periods. All applicable
waiting periods (and extensions thereof) under any Competition Laws set forth on
Schedule 7.1(b) shall have expired or otherwise been terminated.
(c)    Pending Actions. There shall not be pending any action, suit or
litigation proceeding before any Governmental Authority challenging, or seeking
material damages in connection with, the Transactions or seeking to materially
restrain, prohibit or limit the exercise of rights of ownership or operation by
Parent of all or any material portion of the Company or the Business.
7.2    Additional Conditions to Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to effect the Transactions also are
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived in writing by Parent at or prior
to the Closing:
(a)    Representations and Warranties. Each representation and warranty of the
Company contained in this Agreement (i) that are qualified by materiality or
Company Material Adverse Effect will be true and correct in all respects and
(ii) that are not qualified by materiality or Company Material Adverse Effect
will be true and correct in all material respects, in each case on and as of the
Closing Date with the same force and effect as if they had been made on the
Closing Date (except for any such representations or warranties that, by their
terms, speak only as of a specific date or dates, in which case such
representations and warranties that are qualified by materiality or Company
Material Adverse Effect will be true and correct in all respects, and such
representations and warranties that are not qualified by materiality or Company
Material Adverse Effect will be true and correct in all material respects, in
each case on and as of such specified date or dates); provided, however, that,
notwithstanding the foregoing, the representations and warranties contained in
Sections 3.3 and 3.4 shall be true and correct in all respects.
(b)    Agreements and Covenants. The Company shall have performed or complied in
all material respects with all of its obligations, agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Closing.
(c)    No Material Adverse Effect. There shall not have occurred any Company
Material Adverse Effect.
(d)    Officers’ Certificate. The Company shall have delivered to Parent a
certificate, dated as of the Closing Date and executed by the Chief Executive
Officer of the Company, certifying compliance with the conditions set forth in
Sections 7.2(a), (b) and (c) above.
(e)    FIRPTA Certificate. The Company shall deliver to Parent an affidavit
dated as of the Closing Date, sworn under penalty of perjury and in form and
substance required under the Treasury Regulations issued pursuant to Code §1445
stating that the Company is not and has not been a United States real property
holding corporation within the applicable period set forth in Section
897(c)(1)(A)(ii) of the Code, dated as of the Closing Date and in form and
substance required under Treasury Regulation §1.897-2(h).
(f)    Employment Agreements. Parent shall have received executed employment
agreements in the form attached hereto as Exhibit G-1, 2 and 3 (including, the
Employee Proprietary Information and Innovations Agreements referenced therein)
from each of Sean Cook, Josh Lloyd and Shane Desrochers, respectively.
(g)    Letters of Transmittal. Parent shall have received Letters of Transmittal
from the persons set forth on Schedule 7.2(g).
(h)    Company Member Approval. This Agreement shall have been duly and validly
adopted in compliance with the LLC Act and the Company Organizational Documents,
each as in effect on the date of such approval and adoption, pursuant to the
Member Written Consent constituting the Company Member Approval.
(i)    Secretary’s Certificate. The Company shall have delivered to Parent a
certificate, dated as of the Closing Date and executed on behalf of the Company
by its secretary or chief executive officer, certifying the Company’s (i)
Company Organizational Documents, (ii) Company Board resolutions approving this
Agreement, the Transaction Documents and the Transactions and the execution,
delivery and performance of such agreements and transactions and (iii) Member
Written Consent approving the this Agreement, the Transaction Documents and the
Transactions and the execution, delivery and performance of such agreements and
transactions.
(j)    Escrow Agreement. The Company shall have delivered to Parent the Escrow
Agreement dated as of the Closing Date and executed by the Representative.
(k)    Payoff Letters. The Company shall have delivered to Parent the Payoff
Letters and related materials described in Section 6.5, in each case executed by
the applicable third party.
(l)    Closing Statements. The Company shall have delivered to Parent the
Closing Date Balance Sheet, the Consideration Certificate and the Closing
Statement described in Article II.
(m)    Third Party Consents. Parent shall have received the written consents,
assignments, waivers, authorizations or other certificates, in a form reasonably
acceptable to Parent, set forth on Schedule 7.2(m) attached hereto.
(n)    Removed.
(o)    Resignations. Parent and Merger Sub shall have received the resignations,
effective as of immediately following the Closing, of each member of the Company
Board.
(p)    Related Party Agreements. Evidence reasonably satisfactory to Parent that
the Contracts set forth on Schedule 7.2(p) have been terminated as of the
Closing with no further Liability to the Company or any of its Subsidiaries.
Additionally, each of the Company Members as of the date hereof (excluding
Marylee Vetrano) and Shane Desrochers shall execute a written termination and
release of the Company’s and it successors’ indemnification obligations under
the Company Operating Agreement (including Article XIV thereto) and any other
Company Organizational Documents, which shall be in a form acceptable to the
Company (“Indemnification Release”); provided further that the Company shall use
its commercially reasonable efforts to obtain an Indemnification Release from
Daniel Del Savio and Matthew Glazebrook (to the extent that such individuals
exercise their Company Options) and Marylee Vetrano.
(q)    Restrictive Covenant Agreements. The following agreements shall remain in
full force and effect: (a) non-competition, non-solicitation and no-hire
agreements executed by Robert M. Jones in the form attached hereto as Exhibit
H-1, Sean Cook in the form attached hereto as Exhibit H-2, Josh Lloyd in the
form attached hereto as Exhibit H-3, and Bryan Kujawski in the form attached
hereto as Exhibit H-4, and Michael Hersh in the form attached hereto as Exhibit
H-5 (collectively, the “Restrictive Covenants Agreements”).
(r)    Support Agreements. The Support Agreements shall remain in full force and
effect.
(s)    Good Standing Certificates. The Company shall have delivered to Parent a
certificate from the Secretary of State of the State of Georgia dated within ten
(10) Business Days prior to the Closing Date certifying that the Company is in
good standing.
(t)    Member Loans. All amounts due and owing from any Company Member to the
Company shall be satisfied in full prior to the Closing or, to the extent such
Company Member is receiving sufficient consideration for his Company Units under
this Agreement or under a Payoff Letter to satisfy such amounts, such Company
Member shall agree in writing that a sufficient portion of consideration
otherwise payable to such Company Member may be withheld by the Company to
offset such amounts due and owing.
7.3    Additional Conditions to Obligations of the Company.
The obligations of the Company to effect the Transactions also are subject to
the satisfaction at or prior to the Closing of the following conditions, any or
all of which may be waived in writing by the Company at or prior to the Closing:
(a)    Representations and Warranties. Each representation and warranty of
Parent and Merger Sub set forth in this Agreement (i) that is qualified by
materiality or Parent material adverse effect will be true and correct in all
respects and (ii) that is not qualified by materiality Parent material adverse
effect will be true and correct in all material respects, in each case on and as
of the Closing with the same force and effect as if it had been made on the
Closing Date (except for any such representations and warranties that, by their
terms, speak only as of a specific date or dates, in which case such
representations and warranties that are qualified by materiality or Parent
material adverse effect will be true and correct in all material respects, and
such representations and warranties that are not qualified by materiality or
Parent material adverse effect will be true and correct in all material
respects, in each case on and as of such specified date or dates); provided,
however, that, notwithstanding the foregoing, the representations and warranties
contained in Sections 4.2 shall be true and correct in all respects.
(b)    Agreements and Covenants. Parent and Merger Sub shall have performed or
complied in all material respects with all of its obligations, agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the Closing.
(c)    Officers’ Certificate. Parent shall have delivered to the Representative
a certificate, dated as of the Closing Date and executed by a duly authorized
officer of Parent, certifying compliance with the conditions set forth in
Sections 7.3(a) and (b) above.
(d)    Escrow Agreement. Parent shall have delivered to the Company the Escrow
Agreement dated as of the Closing Date and executed by Parent and the Escrow
Agent.
ARTICLE VIII    
INDEMNIFICATION
8.1    Indemnification by the Company Members.
Subject to the terms and conditions of this Article VIII, upon the Closing of
the Transactions, each of the Company Members (each, a “Seller Indemnifying
Party”) hereby, severally and not jointly, in accordance with this Article VIII,
agrees to indemnify, defend and hold harmless Parent and Parent’s Affiliates
(including, after the Closing, the Company), and their respective stockholders,
officers, directors, employees, partners, members, successors and permitted
assigns (each, a “Parent Indemnified Party”) from and against any and all
Damages directly or indirectly incurred, paid or accrued in connection with,
resulting from our arising out of:
(u)    Any inaccuracy in or the breach of any representation or warranty of the
Company set forth in this Agreement, the Company Disclosure Schedule, the Escrow
Agreement or any schedule or certificate delivered pursuant to this Agreement
(which in accuracy or breach (and the Damages related thereto) shall be
determined for purposes of this Article VIII (other than the first sentence of
Section 3.8) without regard to any qualification based on materiality or Company
Material Adverse Effect (or other similar phrase) contained in any such
representation and warranty);
(v)    any breach of or non-fulfillment by the Company (on or prior to the
Closing) or the Representative of any covenant, agreement or obligation of the
Company or the Representative contained in this Agreement, the Escrow Agreement,
the Company Disclosure Schedule or any schedule or certificate delivered
pursuant to the terms of this Agreement;
(w)    any amount payable to Parent pursuant to Section 2.9(e) for a Base Merger
Consideration Deficit;
(x)    any Debt of the Company that is not paid in full at the Closing as Actual
Debt, except to the extent included as a Current Liability in Actual Net Working
Capital;
(y)    any Transaction Expenses that are not paid in full at the Closing as
Actual Transaction Expenses, except to the extent included as a Current
Liability in Actual Net Working Capital;
(z)    any claims by any current or former holder of Company Units (or alleged
current or former holder of Company Units) (i) as a result of the exercise of
appraisal rights (net of any amount that would otherwise have been payable to
such holder of Company Units in the absence of the exercise of any appraisal
rights), (ii) that is based upon or would result in the Closing Statement being
incorrect or inaccurate in any respect (including any claim that the
distribution of the Aggregate Merger Consideration in accordance with this
Agreement were not made in accordance with the Company Organizational
Documents), (iii) arising from or related to the transactions contemplated
hereby and the Transaction Documents (to the extent such claim arises out of
facts or circumstances existing (or alleged to be existing) at, prior to, or
concurrently with the Closing) or (iv) otherwise arising from or related to the
Company arising out of facts and circumstances existing (or alleged to be
existing) at, prior to or concurrent with the Closing; and
(aa)    (i) any and all Taxes (or the non-payment thereof) of the Company for
all Pre-Closing Tax Periods (with respect to the Straddle Periods, determined in
accordance with Section 6.6(b)); (ii) any and all Taxes of any Person imposed on
the Company as a transferee or successor, by contract or pursuant to any Law,
rule or regulation, which Taxes relate to an event or transaction occurring, or
a contract entered into, before the Closing; and (iii) any and all payroll and
employment Taxes with respect to any payments made pursuant to and in accordance
with this Agreement (including without limitation payments made pursuant to the
release of any Escrow Amount).  
8.2    Indemnification by Parent.
Subject to the terms and conditions of this Article VIII, upon the Closing of
the Transactions, Parent (the “Parent Indemnifying Party”) shall indemnify and
hold harmless each of the Company Members (each, a “Seller Indemnified Party”),
from, against and in respect of any and all Damages incurred or suffered by the
Seller Indemnified Parties or any of them as a result of, arising out of or
relating to, directly or indirectly:
(e)    the breach of any representation or warranty of Parent or Merger Sub set
forth in this Agreement;
(f)    the breach of any covenant or agreement of Parent, Merger Sub or the
Surviving Company in this Agreement.
8.3    Survival Time for Claims; Claim Notice.
(a)    The representations and warranties of the Company (as qualified by the
Company Disclosure Schedule), the Parent and Merger Sub set forth in this
Agreement and the certificates delivered at Closing pursuant to Sections 7.2 and
7.3 shall survive the Closing. Notwithstanding the foregoing, no claim may be
made or suit instituted seeking indemnification pursuant to Sections 8.1(a) or
8.2 unless a written notice is provided by the Indemnified Party to the
Indemnifying Party (or, following the Closing, to the Representative, in the
event the Indemnifying Party is a Seller Indemnifying Party):
(v)    except as set forth in Sections 8.3(a)(ii), (iii) and (iv), at any time
on or prior to the date that is eighteen (18) months from the Closing Date, in
the case of any inaccuracy in or breach of any representation or warranty in
Articles III or IV of this Agreement (including the bring down of such
representations and warranties pursuant to the certificates delivered pursuant
to Sections 7.2 and 7.3);
(vi)    At any time with respect to (A) any inaccuracy in or breach of the
representations and warranties set forth in (1) Sections 3.1 (Organization and
Qualification; Subsidiaries), 3.2 (Organizational Documents), 3.3 (Authorization
of Agreement), 3.4 (Capitalization), 3.5 (No Conflicts; Required Consents and
Filings), 3.20 (Brokers) and (2) Sections 4.1 (Organization and Qualification),
4.2 (Authorization of Agreement) and 4.5 (Brokers) (including the bring down of
such representations and warranties pursuant to the certificates delivered
pursuant to Sections 7.2 and 7.3) and (B) any claim or suit based upon fraud or
intentional misrepresentation or breach or criminal activity (it being
understood and agreed that claims for any inaccuracy in or breach of such
representations and warranties and any claim or suit based upon fraud or
intentional misrepresentation or breach or criminal activity shall survive
indefinitely);
(vii)    at any time prior to a date that is thirty-six (36) months from the
Closing Date in the case of claims for any inaccuracy in or breach of the
representations and warranties set forth in Section 3.13 (Intellectual Property
and Technology); and
(viii)    at any time prior to the expiration of the applicable statute of
limitations plus sixty (60) days in the case of claims for any inaccuracy in or
breach of the representations and warranties set forth in Sections 3.10
(Employee Benefits) and 3.11 (Taxes) (the representations and warranties
identified in Sections 8.3(a)(ii), (iii) and (iv), collectively, the
“Fundamental Representations”).
(b)    All covenants and agreements of the parties contained in this Agreement,
the Escrow Agreement or any schedule or certificate delivered pursuant to the
terms of this Agreement will survive the Closing until the expiration of the
applicable statute of limitations or for the period explicitly specified
therein.
(c)    Notwithstanding anything to the contrary set forth in Section 8.3(a) and
(b), any claims asserted in a Claim Notice delivered prior to the expiration
date of the applicable period set forth in Section 8.3(a) and (b) shall not
thereafter be barred by the expiration of such period and such claims shall
survive until finally resolved. Until the expiration date of the applicable
period set forth in Section 8.3(a) and (b), no delay on the part of Parent in
giving the Representative a Claim Notice shall relieve the Indemnifying Party
from any of its obligations under this Article VIII.
8.4    Liability Limitations.
(h)    Deductible. The Parent Indemnified Parties shall not be entitled to
indemnification for Damages under Section 8.1(a) unless the aggregate amount of
all Damages under Section 8.1(a) is in excess of $125,000, in which event the
Seller Indemnifying Parties shall only be required to pay or be liable for
Damages in excess of $125,000 (the “Deductible”); provided, however, that the
Deductible shall not apply to Damages or claims arising out of, with respect to
or by reason of any inaccuracy in or the breach of any Fundamental
Representation or for fraud, intentional misrepresentation or criminal activity.
(i)    Maximum Indemnification Amounts. Except in the case of Damages or claims
arising out of, with respect to or by reason of any inaccuracy in or the breach
of any Fundamental Representation or for fraud, intentional misrepresentation or
criminal activity, the maximum amount that the Parent Indemnified Parties may
recover from the Seller Indemnifying Parties in the aggregate pursuant to
Section 8.1(a) shall be limited to $2,500,000 (the “Cap”). The maximum amount
that the Parent Indemnified Parties may recover from the Seller Indemnifying
Parties in the aggregate for Damages or claims arising out of, with respect to
or by reason of any inaccuracy in or the breach of Section 3.13 (Intellectual
Property and Technology) pursuant to Sections 8.1(a) shall be limited to
$2,500,000 plus 88% of the amount in excess of $2,500,000 up to maximum of 50%
of Gross Proceeds paid by Parent (the “Intellectual Property Cap”). The maximum
amount that Parent Indemnified Parties may recover from each Seller Indemnifying
Party for Damages under this Agreement or otherwise with respect to the
Transactions shall be limited to the amount of proceeds received by such Company
Member (including for such purposes any proceeds that would otherwise have been
received by such Company Member absent any indemnification claims hereunder)
(such amount with respect to each such Company Member, the “Proceeds Cap”), in
each case, except with respect to any claim for fraud, intentional
misrepresentation or criminal activity which shall have no cap on liability;
provided, however, that with respect to the Seller Indemnifying Party’s set
forth on Schedule 8.4(b) (the “Capped Parties”), in addition to his
indemnification obligations hereunder, Robert M. Jones (and not the Capped
Parties) shall be required to indemnify the Parent Indemnified Parties for any
Damages with respect to any claim for fraud, intentional misrepresentation or
criminal activity in excess of the amount of proceeds received by the Capped
Parties (including for such purposes any proceeds that would otherwise have been
received by such Capped Parties absent any indemnification claims hereunder).
(j)    Set-off. In addition to any other remedies, Parent shall be entitled to
set-off or recoup any amounts due to any Indemnified Party from the Indemnifying
Parties pursuant to this Agreement against any amount otherwise payable by any
Indemnified Party to any of the Indemnifying Parties (including against all or
any portion of the Earn-Out Payment).
(k)    Duty to Mitigate Damages. Each party hereto shall (and shall cause its
Affiliates to) use its commercially reasonable efforts to mitigate the Damages
for which indemnification may be provided to it under this Article VIII to the
extent such party is required by applicable Law to do so; provided that such
duty to mitigate shall not require the Parent Indemnified Parties to contact any
customers or clients of the Company for purposes of collecting sales or use
taxes from such client or customer.
(l)    Insurance Effect. If, prior to the settlement and payment of a claim for
Damages by the Indemnifying Party, a Parent Indemnified Party receives a payment
from an insurance carrier in connection with the Damages to which such claim
relates, the amount of Damages incurred by a Parent Indemnified Party under this
Article VIII for such claim shall be reduced by the amount of such insurance
payment received, net of any costs of collection, co-pays, deductibles or
increases in premiums to be paid by the Parent Indemnified Party related to the
insurance carrier’s payment of such claim. If a Parent Indemnified Party
receives any insurance payment in connection with any claim for Damages for
which it already received payment from a Seller Indemnifying Party and the
receipt and retention of such insurance payment would not result in double
recover, then within thirty (30) days of receiving such insurance payment, the
Parent Indemnified Party shall pay to the Escrow Agent for deposit in the
Indemnification Escrow Fund, the amount of the insurance payments received to
the extent of such double recover and net of any costs of collection, co-pays,
deductibles or increases in premiums to be paid by the Parent Indemnified Party
related to the insurance carrier’s payment of such claim. In the event the
Indemnification Escrow Fund has been fully disbursed or has been closed, then
within thirty (30) days of receiving such insurance payment to the extent of
such double recovery, the Parent Indemnified Party shall distribute the amount
of such net insurance payments to the Company Members pursuant to instructions
provided by the Representative. For purposes of clarity, in the event that the
aggregate Damages incurred by a Parent Indemnified Party after giving effect to
the applicable reduction by the amount of any net insurance payments exceeds the
aggregate amount paid to the Parent Indemnified Parties by the Seller
Indemnifying Parties, the Parent Indemnified Parties shall not be required to
pay such insurance payment to the Seller Indemnifying Parties.
(m)    Exclusive Remedy. After the Closing, except for remedies that cannot be
waived as a matter of Law, claims involving specific performance, injunctive or
provisional relief or claims for fraud, intentional misrepresentation or
criminal activity, indemnification pursuant to this Article VIII shall be the
sole and exclusive remedy of the Parent Indemnified Parties in connection with
the transactions contemplated by this Agreement, the Escrow Agreement, the
Company Disclosure Schedule or any certificate, or schedule delivered in
connection herewith; provided, however, that for the avoidance of doubt this
provision shall not apply to any agreement, certificate or document for which
indemnification is not provided pursuant to Section 8.1 (including, the Supports
Agreements, the Employment Agreements, the Restrictive Covenants Agreements and
the Letters of Transmittal).
(n)    Limitations Related to Base Merger Consideration Adjustment. For purposes
of clarity, amounts that were specifically included (the actual dollar amount
and by description) in Actual Transaction Expenses, Actual Net Working Capital
or Actual Debt in the calculation of Final Base Merger Consideration shall not
be included in Damages under this Article VIII to the extent the Company Members
have, if applicable, satisfied their obligations as part of the determination of
Final Base Merger Consideration.
8.5    Third Party Claims.
(a)    Notice of Third Party Claims. In the event any Indemnified Party becomes
aware of a third-party claim against an Indemnified Party that such Indemnified
Party reasonably believes may result in indemnification pursuant to this Article
VIII (a “Third Party Claim”), an Indemnified Party shall give written
notification to the Indemnifying Party (or, following the Closing, if a Seller
Indemnifying Party is the Indemnifying Party, to the Representative, on behalf
of the Indemnifying Parties), including notice of the commencement of any
action, suit or proceeding relating to a Third Party Claim. Such notification
shall include a description in reasonable detail (to the extent known by the
Indemnified Party) of the facts constituting the basis for such Third Party
Claim and, if known, the amount of the Damages claimed.
(b)    Assumption of Defense, etc. In the event of a Third Party Claim and
subject to clause (c) below, the Indemnifying Party or the Representative (on
behalf of each Seller Indemnifying Party if such Persons are the Indemnifying
Parties), as applicable, may elect to assume the defense of the Third Party
Claim by written notice delivered to the Indemnified Party or the Representative
(on behalf of each Seller Indemnifying Party if such persons are the
Indemnifying Parties), as applicable, within thirty (30) calendar days after
receiving the Indemnified Party’s notice pursuant to Section 8.5(a); provided
that prior to the Indemnifying Party or the Representative (on behalf of each
Seller Indemnifying Party if such Persons are the Indemnifying Parties), as
applicable, assuming control of such defense it first (x) provide the
Indemnified Party with evidence that the Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties), as applicable, will have the financial resources to
defend against such claim and fulfill its indemnification obligations hereunder
and (y) acknowledge in writing that it is obligated to indemnify the
Indemnifying Parties against any Damages that may result from such Third Party
Claim (including any Damages in excess of the Cap or any other limitations set
forth herein). If the Indemnifying Party or the Representative (on behalf of
each Seller Indemnifying Party if such Persons are the Indemnifying Parties), as
applicable, so assumes any such defense, the Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties), as applicable, shall conduct the defense of the Third
Party Claim actively and diligently. The Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such persons are
the Indemnifying Parties), as applicable, shall not compromise or settle such
Third Party Claim or consent to entry of any judgment in respect thereof without
the prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed, provided that such consent may be withheld or
delayed for any reason if the compromise or settlement provides for any type of
relief or remedy other than monetary damages or admits fault on the part of the
Indemnified Party.
(c)    Limitations on Indemnifying Party Control. In the event that the
Indemnifying Party or the Representative (on behalf of each Seller Indemnifying
Party if such persons are the Indemnifying Parties), as applicable, assumes the
defense of the Third Party Claim in accordance with Section 8.5(b) above, the
Indemnified Party may retain separate counsel and participate in the defense of
the Third Party Claim, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party (it being agreed that the Indemnifying Party or
the Representative (on behalf of each Seller Indemnifying Party if such Persons
are the Indemnifying Parties), as applicable, will bear the reasonable fees and
expenses of such separate counsel incurred prior to the date upon which the
Indemnifying Party or the Representative (on behalf of each Seller Indemnifying
Party if such Persons are the Indemnifying Parties), as applicable, effectively
assumes control of such defense), unless the Indemnified Party shall reasonably
determine that there is a material conflict of interest that cannot be waived
between or among the Indemnified Party and the Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties), as applicable, with respect to such Third Party
Claim, in which case the reasonable fees and expenses of such counsel will be
borne by the Indemnifying Party. The Indemnifying Party will not be entitled to
assume control of the defense of such claim, and will pay the reasonable fees
and expenses of legal counsel retained by the Indemnified Party, if (i) the
Indemnified Party reasonably believes that an adverse determination of such
Third Party Claim could be materially detrimental to or materially injure the
Indemnified Party’s (or its Affiliates’) reputation, business or future business
prospects, (ii) the Indemnified Party reasonably believes that a conflict of
interest exists or could arise which, under applicable principles of legal
ethics, could prohibit a single legal counsel from representing both the
Indemnified Party and the Indemnifying Party in such Third Party Claim, other
than a conflict which may exist due to the underlying nature of the duty to
indemnify, (iii) a court of competent jurisdiction rules that the Indemnifying
Party has failed or is failing to prosecute or defend such claim, (iv) the Third
Party Claim seeks non-monetary relief or involves criminal or quasi criminal
allegations, (v) the Third Party Claim involves a Governmental Authority or a
customer or former customer of the Company or (vi) the Third Party Claim
involves potential exposure (whether monetary or otherwise, and whether in such
Third Party Claim or as a result thereof) arising out of such Third Party Claim
to the Indemnified Party in excess of the Indemnifying Party’s expected exposure
(whether monetary or otherwise, and whether in such Third Party Claim or as a
result thereof) arising out of such Third Party Claim after taking into account
all of the claims and causes of action (and underlying facts and circumstances)
upon which such Third Party Claim is premised and the indemnification
obligations of the Indemnifying Party and limits thereon hereunder.
Additionally, subject to the limitations set forth herein the Indemnifying Party
or the Representative (on behalf of each Seller Indemnifying Party if such
persons are the Indemnifying Parties) may control the defense of any action for
which indemnification is sought, provided that the Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such persons are
the Indemnifying Parties) agrees to comply with the following requirements in
connection with the conduct of the defense: (a) Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such persons are
the Indemnifying Parties) shall use all reasonable efforts to promptly provide
the Indemnified Parties with copies of all discovery requests or subpoenas as
soon as they are available to the Indemnifying Parties; (b) Indemnifying Party
or the Representative (on behalf of each Seller Indemnifying Party if such
persons are the Indemnifying Parties) shall provide the Indemnified Parties with
copies of all pleadings prior to their filing and the Indemnified Parties shall
be given the opportunity to provide comments to any such pleadings; (c)
Indemnifying Party or the Representative (on behalf of each Seller Indemnifying
Party if such persons are the Indemnifying Parties) shall choose defense counsel
that is reasonably satisfactory to the Indemnified Parties; (d) Indemnifying
Party or the Representative (on behalf of each Seller Indemnifying Party if such
persons are the Indemnifying Parties) will keep the Indemnified Parties or its
agents informed of all material information pertaining to a claim; (e)
Indemnifying Party or the Representative (on behalf of each Seller Indemnifying
Party if such persons are the Indemnifying Parties) shall inform the Indemnified
Parties of the date of any mediation, arbitration, trial or settlement
conference as soon as reasonably practicable after it receives such information;
and (f) Indemnifying Party or the Representative (on behalf of each Seller
Indemnifying Party if such persons are the Indemnifying Parties) shall inform
the Indemnified Parties of the outcome of any mediation, arbitration, motion,
trial or settlement or any other matter from which appeal rights could arise.
(d)    Indemnified Party’s Control. In the event that the Indemnifying Party or
the Representative (on behalf of each Seller Indemnifying Party if such Persons
are the Indemnifying Parties), as applicable, fails or elects not to assume the
defense of the Indemnified Party against such Third Party Claim within the time
period set forth in Section 8.5(b) above that the Indemnifying Party or the
Representative (on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties), as applicable, had the right to assume under Section
8.5(b) above, the Indemnified Party shall have the right to undertake the
defense, provided that, the Indemnified Party agrees to comply with the
following requirements: (a) Indemnified Party shall use commercially reasonable
efforts to promptly provide the Indemnifying Party or the Representative, as
applicable, with copies of all discovery requests or subpoenas as soon as they
are available to the Indemnified Party; (b) Indemnified Party shall provide the
Indemnifying Party or the Representative, as applicable, with copies of all
pleadings and the Indemnifying Party or the Representative, as applicable, shall
be given the opportunity to provide comments to any such pleadings; (c)
Indemnified Party shall choose defense counsel that is satisfactory to it in its
sole and absolute discretion; (d) Indemnified Party will keep the Indemnifying
Party or the Representative, as applicable, or its agents reasonably informed of
all material information pertaining to a claim; (e) Indemnified Party shall
inform the Indemnifying Party or the Representative, as applicable, of the date
of any mediation, arbitration, trial or settlement conference as soon as
reasonably practicable after it receives such information; and (f) Indemnified
Party shall inform as soon as reasonably practicable the Indemnifying Party or
the Representative, as applicable, of the outcome of any mediation, arbitration,
motion, trial or settlement or any other matter from which appeal rights could
arise.
8.6    Indemnification Procedure.
(a)    With respect to claims for Damages for which indemnification is believed
by an Indemnified Party to be due by an Indemnifying Party under this Article
VIII (including with respect to a Third Party Claim), the Indemnified Party
shall provide notice of such Damages to the Indemnifying Party (or to the
Representative, on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties) (the “Claim Notice”); provided, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party or the
Representative (as applicable) shall relieve such Indemnifying Party from any
obligation under this Article VIII, except to the extent such delay actually
materially and adversely prejudices the Indemnifying Party. Each Claim Notice
shall contain the following information: (x) that Parent or another Indemnified
Party has directly or indirectly incurred, paid, accrued, reserved or, believes
in good faith that it may have to directly or indirectly incur, pay, accrue or
reserve, Damages in an aggregate stated amount arising from such Claim (to the
extent known and which amount may be the amount of Damages claimed by a third
party in connection with a Third Party Claim based on alleged facts (plus an
estimate of the fees and expenses to be incurred in defending such Third Party
Claim), which if true, would give rise to Liability for Damages to such
Indemnified Party under this Article VIII) and (y) a brief description, in
reasonable detail (to the extent reasonably available), of the facts,
circumstances or events giving rise to the alleged Damages.
(b)    Following receipt of such Claim Notice, the Indemnifying Party (or the
Representative, on behalf of each Seller Indemnifying Party if such Persons are
the Indemnifying Parties) shall have thirty (30) calendar days to deliver a
written notice objecting to the Indemnified Party’s claims set forth in the
Claim Notice (the “Indemnification Objection Notice”). If the Indemnifying Party
(or the Representative, on behalf of each Seller Indemnifying Party if such
Persons are the Indemnifying Parties) fails to deliver an Indemnification
Objection Notice within such period, such failure shall be an irrevocable
acknowledgement and be deemed to be an agreement by the Indemnifying Parties
that the Indemnified Parties shall be entitled to the full amount of the claim
for Damages set forth in the Claims Notice, and the amount of such Damages shall
be satisfied by the Indemnifying Parties in accordance with this Agreement and
the Escrow Agreement.
(c)    In the event the Indemnifying Parties (or to the Representative, on
behalf of each Seller Indemnifying Party if such Persons are the Indemnifying
Parties) delivers an Indemnification Objection Notice, both the Indemnified
Parties and the Indemnifying Parties shall use commercially reasonable efforts
to cooperate and arrive at a mutually acceptable resolution of such dispute
within the next thirty (30) days. If a mutually acceptable resolution cannot be
reached between the Indemnified Party and the Indemnifying Parties within such
thirty (30) day period, the Indemnified Parties may thereupon proceed to pursue
such remedies as may be available to the Indemnified Parties on the terms and
subject to the provisions of this Agreement.
8.7    Satisfaction of Claims; Escrow Matters.
(a)    Any and all amounts payable for a Base Merger Consideration Deficit to
the Parent pursuant to Section 2.9(e) will be paid in cash (i) first, out of the
NWC Escrow Funds, (ii) second, to the extent the amount in the NWC Escrow Funds
is insufficient, out of the Indemnification Escrow Funds (in the case of (i) and
(ii), as applicable, the Parent and the Representative, within five (5) days
following the determination of the Final Base Merger Consideration in accordance
with Section 2.9, agree to direct the Escrow Agent to release such amounts), and
(iii) in the event such amounts exceed the NWC Escrow Funds and the
Indemnification Escrow Funds, thereafter directly by the Seller Indemnifying
Parties) as herein provided in accordance with payment instructions provided by
Parent.
(b)    Any amounts owing from the Seller Indemnifying Parties pursuant to
Section 8.1 shall first be recovered out of the Indemnification Escrow Account
(to the extent such funds remain in the Indemnification Escrow Account) and,
thereafter, directly from the Seller Indemnifying Parties for such party’s Pro
Rata Portion as herein provided in accordance with payment instructions provided
by the Parent Indemnified Party; provided, that any amounts owed to Parent for a
Base Merger Consideration Deficit shall be satisfied in accordance with Section
8.7(a). Any indemnification of the Parent Indemnified Parties pursuant to this
Article VIII or for other amounts payable by the Indemnifying Parties under this
Agreement (including, Section 2.9(e)) shall be effected by wire transfer of
immediately available funds from the Seller Indemnifying Parties) to an account
designated by Parent within five (5) Business Days after the determination
thereof.
(c)    On the date that is eighteen (18) months from the Closing Date, the
Escrow Agent shall release from the Indemnification Escrow Funds and pay to the
Company Members the then-remaining Indemnification Escrow Funds, subject to
applicable withholding, in accordance with each Company Member’s Pro Rata
Portion; provided, however, that if Parent instructs the Escrow Agent in
accordance with the Escrow Agreement to retain an amount (up to the total amount
then held by the Escrow Agent in the Indemnification Escrow Fund but subject to
any limitations applicable to the claims) equal to the amount of indemnity
claims under Article VIII asserted prior to such date but which are not yet
resolved (“Unresolved Claims”). The Escrow Funds retained for Unresolved Claims
shall be released by the Escrow Agent (to the extent not utilized to pay Parent
for any such claims resolved in favor of Parent) upon their resolution in
accordance with Article VIII and the Escrow Agreement.
(d)    On the date that the Final Base Merger Consideration is finally
determined pursuant to Section 2.9 and following payment of all amounts required
to be paid by the Company Members by Section 2.9, Parent and the Representative
shall instruct the Escrow Agent to release the remaining NWC Escrow Funds, if
any, to the Company Members pursuant to the Escrow Agreement and in accordance
with such Company Member’s Pro Rata Portion.
8.8    Treatment of Indemnification Payments.
All indemnification and other payments under this Article VIII shall, to the
extent permitted by Law, be treated for all income Tax purposes as adjustments
to the Aggregate Merger Consideration. Neither Parent nor the Company
Securityholders shall take any position on any Tax Return, or before any
Governmental Authority, that is inconsistent with such treatment unless
otherwise required by any applicable Law.
8.9    Representative; Fees and Expenses.
(a)    For purposes of this Agreement and the Escrow Agreement, each Company
Securityholder shall, without any further action on the part of any such Company
Securityholder, be deemed (by virtue of the adoption and approval of this
Agreement and approval of the Merger) to have consented and shall agree in
connection with the execution and delivery of the Letter of Transmittal or the
Support Agreement at the Closing to the appointment of Robert M. Jones as the
representative of such Company Securityholder, as the attorney-in-fact for and
on behalf of each such Company Securityholder, and the taking by the
Representative of any and all actions and the making of any decisions required
or permitted to be taken by them under or contemplated by this Agreement and the
other documents contemplated hereby, including the exercise of the power to (i)
execute this Agreement, the Escrow Agreement and other agreements, documents and
certificates pursuant to such agreements, including all amendments to such
agreements, and take all actions required or permitted to be taken under such
agreements, (ii) authorize delivery to Parent of the Escrow Amount, or any
portion thereof, in satisfaction of indemnification or other claims contemplated
by this Agreement or as provided in the Escrow Agreement, (iii) agree to,
negotiate, enter into settlements and compromises of and comply with orders of
courts and awards of arbitrators with respect to such indemnification or other
claims, (iv) resolve any indemnification or other claims, (v) receive and
forward notices and communications pursuant to this Agreement and the Escrow
Agreement, and (vi) take all actions necessary in the judgment of the
Representative for the accomplishment of the foregoing and all of the other
terms, conditions and limitations of this Agreement, the Escrow Agreement and
any other agreements, documents and certificates related thereto. Mr. Jones
hereby accepts his appointment as the Representative. The Representative is
authorized by each Company Securityholder by virtue of the adoption and approval
of this Agreement and approval of the Merger to act on its behalf as required
hereunder and under the Escrow Agreement. The Company Securityholders will be
bound by all actions taken and documents executed by the Representative in
connection with this Article VIII. Each of the Parent Indemnified Parties will
be entitled to rely on any action or decision of the Representative on its
behalf or on behalf of the Company Securityholders and the Company
Securityholders shall release and discharge the Parent Indemnified Parties from
and against any Liability arising out of or in connection with any action or
decision of the Representative or the Representative’s failure to distribute any
amounts received by the Representative on the Company Securityholders’ behalf to
the Company Securityholders. At any time during the term of the Escrow
Agreement, the Company Securityholders entitled to a majority in interest of the
Escrow Funds can appoint a new Representative by written consent by sending
notice and a copy of the duly executed written consent appointing such new
Representative to Parent and the Escrow Agent. Such appointment will be
effective upon the later of the date indicated in the consent or the date such
consent is received by Parent and the Escrow Agent.
(b)    The parties acknowledge that the Representative’s obligations under this
Article VIII are solely as a representative of the Company Securityholders that
all the obligations to indemnify the Parent Indemnified Parties under this
Article VIII are the obligations of the Company Securityholders (and not the
Representative except in his capacity as a Company Securityholder), and that the
Representative shall have no responsibility for any expenses incurred by it in
such capacity. Without limiting the foregoing, each Company Member agrees to
reimburse the Representative for such Company Member’s Pro Rata Portion of all
reasonable out-of-pocket expenses incurred by the Representative in the
performance of his, her or its duties hereunder.
(c)    The Representative will incur no liability of any kind with respect to
any action or omission by the Representative in connection with the
Representative’s services as Representative pursuant to this Agreement and the
Escrow Agreement, except in the event of liability directly resulting from the
Representative’s fraud, gross negligence or willful misconduct. The Company
Members will indemnify, defend and hold harmless the Representative from and
against any and all loss, liability, damage, claim, penalty, fine, forfeiture,
action, fee, cost and expense (including the fees and expenses of counsel and
experts and their staffs and all expense of document location, duplication and
shipment) (collectively, “Representative Losses”) arising out of or in
connection with the Representative’s execution and performance of this Agreement
and the Escrow Agreement, in each case as such Representative Loss is suffered
or incurred; provided, that in the event that any such Representative Loss is
finally adjudicated to have been primarily caused by the fraud, gross negligence
or willful misconduct of the Representative, the Representative will reimburse
the Company Members the amount of such indemnified Representative Loss
attributable to such fraud, gross negligence or willful misconduct.
ARTICLE IX    
TERMINATION, TERMINATION FEE; AMENDMENT AND WAIVER
9.1    Termination.
This Agreement may be terminated at any time prior to the Closing:
(g)    by mutual written consent of Parent (on behalf of itself and Merger Sub)
and the Company (on behalf of itself and the Representative);
(h)    by Parent (on behalf of itself and Merger Sub) upon written notice to the
Company, upon a breach of any representation, warranty, covenant or agreement on
the part of the Company set forth in this Agreement which (i) would give rise to
the failure of a condition set forth in Section 7.2 and (ii) has not been cured
within twenty (20) Business Days following the earlier of receipt by Parent of
written notice of such breach from the Company or receipt by the Company or
written notice of such breach from Parent;
(i)    by the Company (on behalf of itself and the Representative) upon written
notice to Parent, upon a breach of any representation, warranty, guarantee,
covenant or agreement on the part of Parent or Merger Sub set forth in this
Agreement which (i) would give rise to the failure of a condition set forth in
Section 7.3 and (ii) has not been cured within twenty (20) Business Days
following the earlier of receipt by the Company of written notice of such breach
from the Parent or receipt by Parent or written notice of such breach from the
Company;
(j)    by either Parent (on behalf of itself and Merger Sub) or the Company (on
behalf of itself and the Representative) upon written notice to the other party,
if there shall be entered or in effect any Law, order, injunction or decree
which is final and nonappealable preventing the consummation of the Transactions
or that makes consummation of the Transactions illegal;
(k)    by either Parent (on behalf of itself and Merger Sub) or the Company (on
behalf of itself and the Representative) upon written notice to the other party,
if the Closing shall not have occurred by January 31, 2015 (the “Outside Date”);
provided, however, that the right to terminate this Agreement under this Section
9.1(e) shall not be available to any party whose failure to perform any material
covenant, agreement or obligation hereunder has been a principal cause of the
failure of the Closing to occur on or before such Outside Date;
(l)    by Parent (on behalf of itself and Merger Sub) upon written notice to the
Company, if the Company Member Approval shall not have been delivered within one
Business Day following execution of this Agreement.
9.2    Effect of Termination.
In the event of the termination of this Agreement pursuant to Section 9.1, this
Agreement shall forthwith become void, there shall be no liability on the part
of any party hereto or their respective Affiliates, officers, directors,
equityholders, managers or partners and all rights and obligations of any party
hereto shall cease, except that nothing herein shall relieve any party hereto of
any liability for any and all of the damages suffered by the other party hereto
as a result of any intentional breach of such party’s representations,
warranties covenants or agreements contained in this Agreement prior to such
termination or for such party’s fraud, intentional misrepresentation or criminal
activity. Notwithstanding the foregoing, the provisions of this Section 9.2,
Section 9.3, Section 9.4 and Article X shall survive any termination of this
Agreement and shall not be limited by this Section 9.2. No termination of this
Agreement shall affect the obligations of the parties under the Non-Disclosure
Agreement, which shall remain in full force and effect until the Effective Time.
9.3    Fees and Expenses.
Other than as agreed to in writing by the Parties hereto or as expressly set
forth herein, all fees, costs and expenses (including the fees and expenses of
legal counsel, accountants, investment bankers, or other representatives and
consultants) incurred in connection with this Agreement, the Transaction
Documents and the Transactions will be paid by the party incurring such fees,
costs or expenses, whether or not the Transactions are consummated.
9.4    Amendment.
Subject to applicable Law, this Agreement may not be amended or modified except
by an instrument in writing signed by Parent, Merger Sub, the Company and the
Representative.
9.5    Waiver.
At any time prior to the Closing, any party hereto entitled to the benefits
thereof may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
ARTICLE X    
GENERAL PROVISIONS
10.1    Notices.
All notices, requests, consents, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
given: (a) when delivered by hand (with written confirmation of receipt); (b)
when received by the addressee if sent by a nationally recognized overnight
courier (receipt requested); (c) on the date sent by facsimile or e-mail of a
PDF document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient; or (d) on the third day after the date mailed,
by certified or registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 10.1):
If to Parent or Merger Sub or to the Company (following the Closing), to:
Epicor Software Corporation
804 Las Cimas Parkway
Austin,  TX 78746
Phone: 512-278-5460
Fax: 949-341-4225
Attn: John D. Ireland, General Counsel/Sr. Vice-President

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

Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, GA 30326
Tel: (404) 233-7000
Fax: (404) 365-9532
Attention: David M. Calhoun, Esq.

If to the Company (prior to the Closing), to:

945 East Paces Ferry Road
Suite 1475
Atlanta, Georgia 30326
Tel: (404) 496.6917
Attention: Sean Cook

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

Nelson Mullins Riley & Scarborough LLP
Atlantic Station
201 17th Street NW, Suite 1700
Tel: (404) 322-6218
Fax: (404) 322-6041
Attention: Brennan Ryan, Esq.

If to the Representative, to:

Robert M. Jones
821 N. Island Ter.
Atlanta, GA. 30327
Tel: (404) 255-1440
Fax: (404) 255-5235

with a copy to:

Nelson Mullins Riley & Scarborough LLP
Atlantic Station
201 17th Street NW, Suite 1700
Tel: (404) 322-6218
Fax: (404) 322-6041
Attention: Brennan Ryan, Esq.
10.2    Headings.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Section references herein are, unless the context otherwise requires, references
to sections of this Agreement.
10.3    Interpretation.
When reference is made in this Agreement to an Article, Exhibit or a Section,
such reference shall be to an Article, Exhibit or Section of this Agreement,
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa. Any reference to any federal, state, local or foreign statute or Law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.” When reference is made herein to the
business of any Person being conducted in the “ordinary course,” such reference
means the conduct of such Person’s business operations in the ordinary course,
consistent with past customs and practices. When used herein, “dollar” or “$”
means the U.S. dollar. “Made available,” “provided,” “furnished” and words of
similar import means the posting by or on behalf of the Company of materials to
a virtual data room managed by the Company or Broker and made accessible to
Parent or the Parent Representatives, the physical delivery by or on behalf of
the Company (including delivery by email or other electronic means) of such
materials to Parent or the Parent Representatives, or the Company or its
representative otherwise providing such materials to Parent or the Parent
Representatives for review. Any reference to “or” shall be interpreted to mean
“and/or.”
10.4    Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the Transactions are fulfilled to the extent possible.
10.5    Entire Agreement.
This Agreement, the Transaction Documents and the Non-Disclosure Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and thereof, and supersede all prior agreements and undertakings,
both written and oral, among the parties or between any of them, with respect to
the subject matter hereof and thereof.
10.6    Disclosure Schedules.
In connection with the execution of this Agreement, the Company delivered to
Parent the Company Disclosure Schedule setting forth, among other things, items
the disclosure of which is necessary or appropriate either (a) in response to an
express disclosure requirement contained in a provision hereof or (b) as an
exception to one or more representations or warranties contained in Article III.
The Company Disclosure Schedule shall be subject to the following terms and
conditions: (a) no disclosure of any matter contained in the applicable Company
Disclosure Schedule shall create an implication that such matter meets any
standard of materiality and the inclusion of any such items shall not in and of
itself be construed as implying that any such item is “material”); and (b)
headings and introductory language have been inserted on the sections of the
Company Disclosure Schedule for convenience of reference only and shall to no
extent have the effect of amending or changing the express description of the
sections as set forth in this Agreement. The Company Disclosure Schedule
constitutes an integral part of this Agreement and is attached hereto and is
hereby incorporated herein. Any capitalized term used in the Company Disclosure
Schedule and not otherwise defined therein has the meaning given to such term in
this Agreement.
10.7    Assignment.
This Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. No party hereto
may assign any of its rights or obligations hereunder without the prior written
consent of the other parties hereto, and any assignment in violation of this
Section 10.7 will be void; provided, however, that, notwithstanding the
foregoing, Parent, Merger Sub and, following the Closing, the Surviving Company,
and their respective permitted assigns, may assign this Agreement without the
written consent of the other parties hereto (i) to one or more lenders for
collateral security purposes, (ii) to any subsequent Parent of the Company
(whether such sale is structured as a sale of goods, sale of assets, merger,
recapitalization or otherwise); provided, that the obligations of Parent or
Merger Sub under this Agreement shall continue to be binding upon Parent or
Merger Sub, as applicable, or (iii) to an Affiliate of Parent or (iv) in
connection with the sale of all or substantially all of the assets of the
Business.
10.8    Parties in Interest.
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto, nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement (except as provided in Article
VIII).
10.9    Specific Performance.
The parties agree that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy to which they are entitled at law or in equity.
10.10    Failure or Indulgence Not Waiver.
No failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. Except as otherwise explicitly
provided for elsewhere herein, all rights and remedies existing under this
Agreement are cumulative to, and not exclusive to, and not exclusive of, any
rights or remedies otherwise available.
10.11    Governing Law; Exclusive Jurisdiction.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Georgia regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. Each of the parties hereto
irrevocably consents to the exclusive jurisdiction and venue of any court with
appropriate subject matter jurisdiction within the State of Georgia in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, agrees that process may be served upon them in any
manner authorized by the laws of the State of Georgia for such Persons and
waives and covenants not to assert or plead any objection which they might
otherwise have to such jurisdiction, venue and such process.

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10.12    Counterparts.
This Agreement may be executed and delivered in multiple counterparts (including
via facsimile or scanned .pdf image), and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement. The Agreement shall become effective when Parent, the Company, Merger
Sub and the Representative shall have executed this Agreement.

IN WITNESS WHEREOF, Parent, Merger Sub, the Company and the Representative have
caused this Agreement to be signed, all as of the date first written above.
PARENT        COMPANY
Epicor Software Corporation        Shopvisible, LLC
By:         By:                        
Name:         Name: Sean Cook

Title:                                 Title: Chief Executive Officer

MERGER SUB    REPRESENTATIVE
Bobbyjones Merger Sub, LLC    
By:                            By:                        
Name:                                 Robert M. Jones

Title:                             

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Exhibit A

Form of Support Agreement

(see attached)

1