Exhibit 10.1

STOCK PURCHASE AGREEMENT

relating to

AUTOMOTIVE INFORMATION SYSTEMS, INC.

by and between

MOBILE PRODUCTIVITY, INC.

and

CSK AUTO, INC.

Dated as of _________ __, 2005

1

STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS

Page

         
ARTICLE 1 DEFINITIONS
    1  
1.1 Definitions
    1  
1.2 Interpretation and Accounting Terms
    11  
ARTICLE 2 PURCHASE AND SALE OF SHARES
    13  
2.1 Transfer of Shares
    13  
2.2 Consideration
    13  
2.3 Closing
    13  
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
    13  
3.1 Corporate Existence and Power
    13  
3.2 Valid and Enforceable Agreement; Authorization; Non-contravention
    14  
3.3 Capitalization and Ownership
    15  
3.4 Financial Statements
    15  
3.5 Events Subsequent to February 1, 2004
    16  
3.6 Undisclosed Liabilities
    18  
3.7 Taxes
    18  
3.8 Accounts Receivable
    21  
3.9 Inventories; Consignment
    21  
3.10 No Breach of Law or Governing Document
    21  
3.11 Litigation.
    22  
3.12 Owned and Leased Real Property
    22  
3.13 Personal Property; Title to Assets
    24  
3.14 Personal Property Leases
    24  
3.15 Necessary Property
    24  
3.16 Use and Condition of Property; Location
    24  
3.17 Licenses and Permits
    25  
3.18 Environmental Matters
    25  
3.19 Contracts and Commitments
    26  
3.20 Validity of Contracts
    28  
3.21 Intellectual Property
    28  
3.22 Insurance
    30  
3.23 Employees, Officers, Directors and Consultants
    31  
3.24 Bank Accounts of the Company
    32  
3.25 Labor Matters
    32  
3.26 Employee Benefit Matters
    34  
3.27 Product and Service Warranties
    35  
3.28 Product Liability Claims
    36  
3.29 Books and Records and Financial Controls
    36  
3.30 Customers, Suppliers and Competitors
    37  
3.31 Propriety of Past Payments
    37  
3.32 Change in Ownership
    37  
3.33 Guarantees
    37  
3.34 Brokers, Finders
    37  
3.35 Accuracy of Information
    37  
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER
    38  
4.1 Corporate Existence and Power
    38  
4.2 Valid and Enforceable Agreement
    38  
4.3 Brokers, Finders
    39  
4.4 Solvency
    39  
4.5 Investment Representation
    39  
4.6 Independent Investigation
    39  
4.7 Litigation and Arbitration / HSR Act
    39  
ARTICLE 5 ADDITIONAL COVENANTS OF THE PARTIES
    40  
5.1 Confidentiality
    40  
5.2 Covenant Not To Compete and Not to Solicit
    40  
5.3 Taxes
    43  
5.4 Books and Records
    45  
5.5 Public Announcements
    45  
5.6 Filings
    46  
5.7 Registration Rights Agreement and Stockholders Agreement
    46  
5.8 Further Assurances; Cooperation
    46  
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
    46  
6.1 Accuracy of Representations and Warranties and Performance of Obligations
    46  
6.2 Consents and Approvals
    47  
6.3 No Litigation or Contrary Judgment
    47  
6.4 No Material Adverse Effect
    47  
6.5 Deliveries of Seller at Closing
    47  
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
    48  
7.1 Accuracy of Representations and Warranties and Performance of Obligations
    48  
7.2 Consents and Approvals
    49  
7.3 No Litigation or Contrary Judgment
    49  
7.4 Deliveries of Buyer at Closing
    49  
ARTICLE 8 INDEMNIFICATION
    50  
8.1 Survival of Representations and Warranties
    50  
8.2 Indemnification by Seller
    50  
8.3 Indemnification by Buyer
    51  
8.4 Notice of Claim
    51  
8.5 Right to Contest Claims of Third Persons
    51  
8.6 Limitations on Indemnity
    52  
8.7 Characterization of Indemnity Payments
    55  
8.8 Exclusive Remedy
    55  
8.9 Other Limitations
    55  
ARTICLE 9 MISCELLANEOUS PROVISIONS
    55  
9.1 Notice
    55  
9.2 Termination
    57  
9.3 Entire Agreement
    57  
9.4 Amendment and Modification
    57  
9.5 Assignment; Binding Agreement
    57  
9.6 Waiver of Compliance; Consents
    57  
9.7 Expenses
    57  
9.8 Equitable Relief
    57  
9.9 Counterparts, Facsimiles
    58  
9.10 Severability
    58  
9.11 Governing Law
    58  
9.12 No Third Party Beneficiaries or Other Rights
    58  
9.13 Submission to Jurisdiction
    58  
9.14 Waiver of Jury Trial
    58  
9.15 Further Assurances
    58  

2

Exhibits and Schedules

      Exhibit   Description
1
  Summary of Potential Terms of Acquisition
 
   
2
  Senior Secured 5% Convertible Promissory Note
 
   
3
  Security Agreement
 
   
4
  Source Code Escrow Agreement
 
   
5
  Pledge Agreement
 
   
6
  UCC Filings
 
   
7
  Guaranty
 
   
8
  Amended Certificate of Incorporation
 
   
9
  License Agreement
 
   
10
  Employment Agreement
 
   
11
  Form of First Amended and Restated Registration Rights Agreement
 
   
12
  First Amended and Restated Stockholders’ Agreement
 
   
13
  Voting Agreement
 
   
14
  Buyer’s Counsel Legal Opinion
 
   
15
  Seller’s Counsel Legal Opinion
 
   
16
  Certificate of Representations and Warranties (J. Sweet)

      Schedule   Description
A
  Disclosure Letter
 
   
B
  Business Interests

3

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of the
     day of      , 2005, by and between Mobile Productivity, Inc., a Delaware
corporation (“Buyer”), and CSK Auto, Inc., an Arizona corporation (“Seller”).
Buyer and Seller are referred to herein as a “Party” and together as the
“Parties”. Capitalized terms are defined in Article 1.

RECITALS

A. Buyer desires to purchase from Seller, on the following terms and conditions,
the Shares, which comprise all of the issued and outstanding capital stock of
Automotive Information Systems, Inc., d/b/a Identifix, a Minnesota corporation
(the “Company”); and

B. Seller desires to sell the Shares to Buyer on the following terms and
conditions.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants, representations, warranties, conditions, and agreements hereinafter
contained and contained in the Related Agreements, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. The following words shall have the respective meanings given to
them in this Article 1.

  1.1.1   “Accounts Receivable” has the meaning set forth in Section 3.8.

1.1.2 “Action” has the meaning set forth in Section 3.11.

  1.1.3   “Affiliate” means with respect to any Person, any other Person which
is controlling, controlled by, or under common control with, directly or
indirectly through any Person, the Person referred to, and, if the Person
referred to is a natural Person, any member of such Person’s immediate family.
The term “control” (including, with correlative meaning, the terms “controlled
by” and “under common control with”) as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. Immediately following
the Effective Time, the Company shall be the Affiliate of Buyer and shall no
longer be deemed to be the Affiliate of Seller.

  1.1.4   “Agreement” means this Agreement as executed on the date hereof and as
amended or supplemented in accordance with the terms hereof, including the
Disclosure Letter and all Schedules and Exhibits hereto.

  1.1.5   “Amended Certificate of Incorporation” means the Amended Certificate
of Incorporation of Buyer substantially in the form of Exhibit 8 attached
hereto.

  1.1.6   “Book Value” means the sum of (a) Seller’s initial cash outlay for the
Company, including without limitation any and all indirect costs associated with
the acquisition of the Company; (b) net cash advances made by Seller to the
Company through February 1, 2004; and (c) the book value (as defined under GAAP)
of the Company’s capitalized software as of January 31, 2004.

  1.1.7   “Business” means any and all business activities in which the Company
is engaged (including, without limitation, designing, developing, manufacturing,
distributing, promoting and selling the Identifix Internet “Direct-Hit” product,
as such business is conducted by the Company on the date hereof and as of the
Effective Time.

  1.1.8   “Business Day” means any day which is not a Saturday, Sunday or legal
holiday in the State of Arizona, United States of America.

  1.1.9   “Buyer” has the meaning set forth in the first paragraph hereof.

1.1.10 “Buyer Indemnified Persons” has the meaning set forth in Section 8.2.

  1.1.11   “Buyer’s Counsel Legal Opinion” means the legal opinion letter of
counsel to Buyer, August Law Group, P.C., in favor of Seller and its counsel
substantially in the form attached as Exhibit 14 hereto.

  1.1.12   “Certificate of Representations and Warranties” means the Certificate
of Representations and Warranties of Jeff Sweet, the President of the Company,
substantially in the form attached as Exhibit 16 hereto.

  1.1.13   “Closing” means the consummation of the transactions contemplated by
this Agreement, as provided for in Section 2.3.

  1.1.14   “Closing Date” means the date of the Parties’ execution of this
Agreement.

  1.1.15   “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended from time to time.

  1.1.16   “Code” means the Internal Revenue Code of 1986, as amended from time
to time.

1.1.17 “Company” has the meaning set forth in the Recitals.

  1.1.18   “Confidential Information” has the meaning set forth in Section
5.2(f).

  1.1.19   “Contract” means any written or oral contract, agreement,
understanding, lease, indenture, mortgage, deed of trust, evidence of
indebtedness, commitment or instrument, open purchase order or offer, to which
the Company is a party or by which it or any of its assets is bound.

  1.1.20   “Disclosure Letter” means the letter from Seller to Buyer, dated the
date hereof, of exceptions to the representations and warranties made in
Article 3, and the listings of information provided by Seller in Article 3, to
be dated as of, and attached to this Agreement as Schedule A by the Parties at,
Closing.

1.1.21 “EPA” means the United States Environmental Protection Agency.

  1.1.22   “Effective Time” means the effective time of the Closing, which shall
be deemed to be as of 12:01 a.m. Central Daylight Time on the Closing Date.

  1.1.23   “Employment Agreement” means the Employment Agreement to be executed
at Closing by and between Jeff Sweet (the President of the Company) and the
Buyer substantially in the form of Exhibit 10 attached hereto.

  1.1.24   “Environmental Claim(s)” means all Actions, Liens, or Orders asserted
by a Person other than Buyer, Seller, or any of its Affiliates, and arising out
of any violation or alleged violation of any Environmental Laws or Environmental
Permits, including, but not limited to, (i) any and all Actions, Liens, or
Orders asserted by a Government for enforcement, cleanup, removal, response,
closure, remedial or other actions, or damages pursuant to any applicable
Environmental Laws or Environmental Permits, and (ii) any and all Actions,
Liens, or Orders asserted by a Person other than Buyer, Seller, or any of its
Affiliates, arising out of any violation or alleged violation of any
Environmental Laws or Environmental Permits, seeking damages, contribution,
indemnification, cost recovery, compensation, private or Governmental
enforcement, or injunctive relief resulting from Hazardous Materials.

  1.1.25   “Environmental Law” means all applicable laws, statutes, enactments,
orders, regulations, rules and ordinances of any Government relating to
pollution or protection of human health, safety, the environment, natural
resources or laws relating to releases or threatened releases of Hazardous
Materials into the indoor or outdoor environment (including, without limitation,
ambient air, surface water, groundwater, land, surface and subsurface strata) or
otherwise relating to the manufacture, generation, processing, distribution,
use, treatment, storage, release, transport, disposal or handling of Hazardous
Materials, including, without limitation (as applicable), the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. §
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.) and
the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136y, et. seq.), and the
Oil Pollution Act (33 U.S.C. §2701, et seq.), all as amended from time to time
and the regulations promulgated pursuant thereto.

  1.1.26   “Environmental Permits” means all permits, registrations, approvals,
licenses, filings and submissions to any Government or other authority required
by or made by or on behalf of the Company under or pursuant to any Environmental
Law.

  1.1.27   “Environmental Property” means any assets or real property currently
or previously owned, leased, operated or used by the Company or any Affiliate
thereof to the extent liability for an Environmental Claim could be asserted
against the Company under any applicable Environmental Law.

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

  1.1.29   “Financial Statements” means the unaudited (a) balance sheets of the
Company as of February 1, 2004, 2003, and 2002; (b) balance sheet of the Company
as of November 30, 2004 (the “Interim Financial Statements”); and (c) related
statements of earnings, stockholders’ equity and changes in financial position
and cash flows for the periods then ended, together, as to all the foregoing,
with any notes or schedules thereto.

  1.1.30   “First Amended and Restated Stockholders’ Agreement” means the First
Amended and Restated Stockholders’ Agreement among Buyer, Seller and the other
stockholders of Buyer identified therein, substantially in the form attached as
Exhibit 12 hereto.

  1.1.31   “Form of First Amended and Restated Registration Rights Agreement”
means the First Amended and Restated Registration Rights Agreement among Buyer,
Seller and the other parties thereto, substantially in the form attached as
Exhibit 11 hereto.

  1.1.32   “GAAP” means the accounting principles generally accepted in the
United States, including as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, applied consistently throughout the periods involved.

  1.1.33   “Government” means the United States of America, any other nation or
state, any federal, bilateral or multilateral governmental authority, state, any
possession, territory, local, county, district, city or other governmental unit
or subdivision, and any branch, entity, agency, or judicial body of any of the
foregoing.

  1.1.34   “Guaranty” means the Guaranty made by Warburg Pincus in favor of
Seller substantially in the form attached as Exhibit 7 hereto.

  1.1.35   “Hazardous Materials” means any petroleum, petroleum hydrocarbons,
petroleum waste or petroleum products, underground storage tanks, asbestos or
asbestos-containing materials, pesticides, lead and lead-containing materials,
urea formaldehyde insulation and polychlorinated biphenyls (PCBs), ionizing and
non-ionizing radiation including radon and electromagnetic frequency radiation;
and any chemicals, materials, substances or wastes in any amount or
concentration which are “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants” or words of similar import, or which are defined
or regulated as dangerous, toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous or as a pollutant or
contaminant, in each case under any applicable Environmental Law.

  1.1.36   “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, or any successor thereto.

  1.1.37   “Income Taxes” means any Tax imposed upon or measured by net income
or gross income (excluding any Tax based solely on gross receipts) including any
interest, penalty, or additions thereto, whether disputed or not.

  1.1.38   “IRCA” means the Immigration Reform and Control Act of 1986 and the
rules and regulations thereunder.

     
1.1.39
  “IRS” means the United States Internal Revenue Service.
 
   
 
   
1.1.40
  “Indemnified Losses” has the meaning set forth in Section 8.2.
 
   
 
   
1.1.41
  “Indemnified Party” has the meaning set forth in Section 8.4.
 
   
 
   
1.1.42
  “Indemnifying Party” has the meaning set forth in Section 8.4.
 
   

  1.1.43   “Intellectual Property” means all intellectual property owned or used
by the Company, including, without limitation, all:

  (a)   inventions, models, designs, developments, ideas, concepts, shop rights,
proprietary processes and formulae, and items of proprietary know-how,
information or data whether or not patentable, whether or not reduced to
practice or whether or not yet made the subject of a pending patent application
or applications;

  (b)   ideas and conceptions of potentially patentable subject matter,
including, without limitation, any patent disclosures, whether or not reduced to
practice and whether or not yet made the subject of a pending patent application
or applications;

  (c)   national (including the United States) and multinational statutory
invention registrations, patents, patent registrations and patent applications
(including all reissues, divisions, continuations, continuations-in-part,
extensions and reexaminations) and all rights therein provided by multinational
treaties or conventions and all improvements to the inventions disclosed in each
such registration, patent or application;

  (d)   trademarks, service marks, trade dress, logos, trade names, domain
names, business names and corporate names, including but not limited to
“Automotive Information Systems”, “Identifix” and “Direct-Hit”, and any
variations, derivations and abbreviations thereof, whether or not registered,
including all common law rights and registrations and applications for
registration thereof, including, but not limited to, all marks registered in the
United States Patent and Trademark Office, and the trademark offices of other
nations throughout the world, and all rights therein provided by multinational
treaties or conventions,

  (e)   copyrights (registered or otherwise), copyrighted works, mask works,
derivative works, and registrations and applications for registration thereof,
and all rights therein provided by multinational treaties or conventions;

  (f)   computer software, including, without limitation, source code, operating
systems and specifications, data, data bases, files, programs, documentation and
other materials related thereto, and rights to Uniform Resource Locators and web
site addresses;

  (g)   trade secrets and confidential, technical or business information
(including ideas, formulas, compositions, inventions, and conceptions of
inventions whether patentable or unpatentable and whether or not reduced to
practice);

  (h)   whether or not confidential, technology (including know-how and
show-how), manufacturing and production process and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial, marketing and business data,
projections, market studies, pricing and cost information, business and
marketing plans and prospects, customer and supplier lists and information;

  (i)   copies and tangible embodiments of all of the foregoing, in whatever
form or medium;

  (j)   rights to obtain and rights to apply for patents, to claim priority to
earlier-filed patent applications, and to register trademarks and copyrights;

  (k)   rights to sue and recover and retain damages and costs and attorneys’
fees for present and past infringement of any of the intellectual property
rights set forth above;

  (l)   all intangible rights, in whatever form, recognized as protectable
intellectual property under the laws of any country; and

  (m)   all the goodwill associated with any of the foregoing, and licenses,
sublicenses, assignments, and agreements in respect of any of the foregoing, in
each case which are owned, used, licensed or assigned by or to the Company.

  1.1.44   “Knowledge” or “knowledge” means, subject to Section 1.2.1(a), a
Person’s actual knowledge (i.e., the conscious awareness of facts or other
information), without undertaking any investigation, and not constructive or
imputed knowledge. The words “know,” “knowing” and “known” shall be construed
accordingly.

  1.1.45   “Law” means any statute, law, ordinance, decree, order, injunction,
rule, directive, or regulation of any Government or quasi-governmental
authority, and includes rules and regulations of any regulatory or
self-regulatory authority compliance with which is required by any such statute,
law, ordinance, decree, order, injunction, rule, directive, or regulation.

1.1.46 “Leased Real Property” has the meaning set forth in Section 3.12(b).

  1.1.47   “Liabilities” or “Liability” means all debts, adverse claims,
liabilities and/or obligations, direct, indirect, absolute or contingent,
liquidated or unliquidated, whether accrued, vested or otherwise, and whether or
not reflected or required to be reflected on the financial statements of a
Person.

  1.1.48   “License Agreement” means the License Agreement between Buyer and
Seller substantially in the form attached as Exhibit 9 hereto.

  1.1.49   “Lien” means any lien, security interest, mortgage, indenture, deed
of trust, pledge, charge, adverse claim, easement, restriction or other
encumbrance, including, without limitation, any liens arising pursuant to any
Environmental Law or in respect of any Tax.

1.1.50 “Losses” has the meaning set forth in Section 8.2.

  1.1.51   “Material Adverse Effect” means any material adverse effect on (a)
the Business, properties, assets, liabilities, profits, operations, results of
operations or condition (financial or otherwise) of the Company taken as a
whole, or (b) the authority or ability of Seller to perform its obligations
under this Agreement, but shall not be deemed to include (i) any adverse changes
resulting from general economic, regulatory or political conditions,
(ii) circumstances that affect the industries in which the Company operates
generally unless expressly directed at or disproportionately affecting the
Company, (iii) with respect to the Company or its Affiliates, acts attributable
to, omissions by, or circumstances affecting, the other Party hereto or its
Affiliates, or (iv) any changes resulting from the announcement or pendency of
the transactions provided for in this Agreement.

     
1.1.52
  “Material Contracts” has the meaning set forth in Section 3.19(a).
 
   
 
   
1.1.53
  “Non-Competition Period” has the meaning set forth in Section 5.2(a).
 
   
 
   
1.1.54
  “Non-Income Taxes” means any Taxes other than Income Taxes.
 
   

  1.1.55   “Order” means an order, writ, injunction, or decree of any court or
Government.

  1.1.56   “Ordinary Course” means, with respect to the Business of the Company,
only the ordinary course of commercial operations customarily engaged in by the
Company consistent with industry norms and the Company’s prior practices, and
specifically does not include (a) any activity (i) involving the purchase or
sale of the Company or of any product line or business unit of the Company,
(ii) involving modification or adoption of any Plan, or (iii) which requires
approval by the board of directors or shareholders of the Company, or (b) the
incurrence of any material Liability for any tort or any breach or violation of
or default under any Contract or Law.

1.1.57 “Owned Real Property” has the meaning set forth in Section 3.12(a).

  1.1.58   “Party” or “Parties” has the meaning set forth in the first paragraph
hereof.

1.1.59 “PBGC” means the Pension Benefit Guaranty Corporation.

  1.1.60   “Permitted Liens” means, collectively, (a) Liens that are disclosed
in the Disclosure Letter, (b) Liens for Taxes, fees, levies, duties or other
governmental charges of any kind which are not yet delinquent or are being
contested in good faith by appropriate proceedings, (c) Liens for landlords,
common carriers, warehousemen, mechanics, materialmen, laborers, employees,
suppliers or similar liens arising by operation of law for amounts which are
owed, but not yet delinquent, (d) purchase money security interests relating to
the acquisition of goods in the Ordinary Course equal to, or less than, Ten
Thousand Dollars ($10,000) per individual acquisition, (e) in the case of real
property, any matters, restrictions, covenants, conditions, limitations, rights,
rights of way, encumbrances, encroachments, reservations, easements, agreements
and other matters of record, such state of facts of which an accurate survey of
the property would reveal, and (f) Liens arising from or related to immaterial
indebtedness or capital leases of the Company or its Subsidiaries equal to, or
less than, Ten Thousand Dollars ($10,000) in each case.

  1.1.61   “Person” shall be construed broadly and shall include an individual,
a partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization or
a Government entity (or any department, agency or political subdivision
thereof).

  1.1.62   “Plan” means any agreement, arrangement, plan, or policy, whether or
not written, that involves (a) any pension, retirement, profit sharing, savings,
deferred compensation, bonus, stock option, stock purchase, phantom stock,
health, welfare, or incentive plan; or (b) welfare or “fringe” benefits,
including without limitation vacation, holiday, severance, disability, medical,
hospitalization, dental, life and other insurance, tuition, company car, club
dues, sick leave, maternity, paternity or family leave, or other benefits; or
(c) any employment, consulting, engagement, or retainer agreement.

  1.1.63   “Pledge Agreement” means the Pledge Agreement between Buyer, as
pledgor, and Seller, as pledgee, substantially in the form of Exhibit 5 attached
hereto.

1.1.64 “Pre-Closing Periods” has the meaning set forth in Section 5.3(b).

1.1.65 “Purchase Price” has the meaning set forth in Section 2.2.

  1.1.66   “Real Property” means the Owned Real Property and the Leased Real
Property.

  1.1.67   “Related Agreements” means the Senior Secured 5% Convertible
Promissory Note, Security Agreement, Pledge Agreement, Source Code Escrow
Agreement, UCC Filings, Guaranty, Amended Certificate of Incorporation, License
Agreement, Employment Agreement, Termination of Severance and Retention
Agreement between Jeff Sweet (the President of the Company), the Company and
Seller, and the Voting Agreement.

  1.1.68   “Security Agreement” means the Security Agreement between Buyer, as
debtor, and Seller, as secured party, substantially in the form of Exhibit 3
attached hereto.

  1.1.69   “Seller Indemnified Persons” has the meaning set forth in Section
8.3.

1.1.70 “Seller” has the meaning set forth in the first paragraph hereof.

  1.1.71   “Seller’s Counsel Legal Opinion” means the legal opinion letter of
counsel to Seller, Bryan Cave LLP, in favor of Buyer and its counsel
substantially in the form attached as Exhibit 15 hereto.

  1.1.72   “Senior Secured 5% Convertible Promissory Note” means the Senior
Secured 5% Convertible Promissory Note made and issued by Buyer, as maker, to
Seller, as payee, substantially in the form of Exhibit 2 attached hereto.

  1.1.73   “Shares” means the shares of the Company’s common stock, par value
$0.01 per share, to be sold by Seller to Buyer hereunder.

  1.1.74   “Source Code Escrow Agreement” means the Source Code Escrow Agreement
for the Company’s Identifix “Direct-Hit” software among Buyer, Seller, and the
escrow agent named therein, substantially in the form of Exhibit 4 attached
hereto.

  1.1.75   “Sponsor” means any employer who is participating (or who has
participated) in any Plan.

1.1.76 “Straddle Period” has the meaning set forth in Section 5.3(c).

  1.1.77   “Summary of Potential Terms of Acquisition” means the Summary of
Potential Terms of Acquisition among Buyer, Seller and the Company attached as
Exhibit 1 hereto.

  1.1.78   “Tax” or “Taxes” means all taxes, charges, fees, levies, or other
like assessments, including without limitation, all federal, possession, state,
city, county and foreign (or governmental unit, agency, or political subdivision
of any of the foregoing) income, profits, employment (including Social Security,
unemployment insurance and employee income tax withholding), franchise, gross
receipts, sales, use, transfer, stamp, occupation, property, capital, severance,
premium, windfall profits, customs, duties, ad valorem, value added and excise
taxes; PBGC premiums; and any other Government charges of the same or similar
nature; including any interest, penalty or addition thereto, whether disputed or
not and including any obligations to indemnify or otherwise assume or succeed to
the Tax Liability of any other Person. Any one of the foregoing Taxes shall be
referred to sometimes as a “Tax.”

  1.1.79   “Tax Returns” means all reports, estimates, declarations, claims for
refund, information statements and returns relating to or required by Law to be
filed by the Company in connection with any Taxes, and all information returns
(e.g., Form W-2, Form 1099) and reports relating to Taxes and Taxes payable by,
pursuant to, or in connection with, any Plans, including any amendment or
supplement thereof. Any one of the foregoing Tax Returns shall be referred to
sometimes as a “Tax Return.”

     
1.1.80
  “Territory” has the meaning set forth in Section 5.2(a).
 
   
 
   
1.1.81
  “Third Person” has the meaning set forth in Section 8.5.
 
   
 
   
1.1.82
  “Third-Person Claim” has the meaning set forth in Section 8.5.
 
   

  1.1.83   “UCC Filings” means the Uniform Commercial Code Financing
Statement(s) and Fixture Filing(s) in favor of Seller, as secured party,
substantially in the form(s) attached as Exhibit 6 hereto.

1.1.84 “VEBA” means voluntary employees’ beneficiary association.

  1.1.85   “Voting Agreement” means that Voting Agreement dated as of the date
hereof by and among Seller, Buyer and the Stockholders of Buyer parties thereto
substantially in the form attached as Exhibit 13 hereto.

  1.1.86   “Warburg Pincus” means Warburg Pincus Private Equity VIII, Inc., a
Delaware corporation.

  1.1.87   “Welfare Plan” means an employee welfare benefit plan (within the
meaning of ERISA Section 3(1)).

              1.2   Interpretation and Accounting Terms.
 
                 
 
           
 
    1.2.1     Interpretation.
 
           

  (a)   In respect of Seller, on the one hand, or Buyer, on the other hand, a
reference to the “knowledge” or “Knowledge” of such Person or “awareness of”
such Person, and variations thereof, shall be deemed to refer to the Knowledge
of the Relevant Persons of such Person. In respect of Seller, (i) the term
“Relevant Persons” shall be deemed to refer to Don Watson, Larry Buresh, Ed
O’Brien, Maynard L. Jenkins and Martin Fraser (except with respect to any
communications which are subject to attorney-client or attorney work product
privileges), and any other individual who, prior to the Closing Date, shall
succeed to the position or office now held by any of the foregoing individuals,
and (ii) the terms “knowledge”, “Knowledge”, “awareness”, or variations thereof,
of “Relevant Persons” shall include the Knowledge of Jeff Sweet, the President
of the Company, solely to the extent disclosed in Mr. Sweet’s Certificate of
Representations and Warranties pertaining to the representations and warranties
relating to the Company in Article 3 of this Agreement, substantially in the
form attached hereto as Exhibit 16. In respect of Buyer, the term “Relevant
Persons” shall be deemed to refer to Les Silver and Kevin Rogers, and any other
individual who, prior to the Closing Date, shall succeed to the position or
office now held by any of the foregoing individuals.

  (b)   Whenever in this Agreement the terms “include,” “includes,” “including,”
and derivative or similar words, are used, they shall be construed to be
followed by the phrase “without limitation”.

  (c)   Whenever in this Agreement the term “agreement” is used, it shall be
deemed to refer to binding agreements, commitments, leases, contracts, contract
rights, licenses and sublicense agreements, quotations, purchase orders,
customer orders, work orders and other executory rights.

  (d)   Wherever in this Agreement a statute or other piece of legislation is
referenced, such reference shall be deemed to include any and all amendments
thereto, as well as any successor legislation which may be adopted subsequent to
the date of this Agreement, and covering the same subject matter or the
referenced statute or legislation.

  (e)   Whenever in this Agreement the term “party to” is used in regard to an
agreement, it shall be construed as meaning “party to or bound by”.

  (f)   The headings of the Articles, Sections and paragraphs of this Agreement
are inserted for convenience of reference only and shall not constitute a part
hereof.

  (g)   Each reference in this Agreement to an Article, Paragraph, Section,
Schedule or Exhibit, unless otherwise indicated, shall mean an Article,
Paragraph or Section of this Agreement or a Schedule or Exhibit attached to this
Agreement, respectively.

  (h)   Whenever in this Agreement the terms “hereof,” “herein,” “hereby”, or
derivative or similar words are used, such terms refer to this entire Agreement.

  (i)   All references herein to “days” in this Agreement are to consecutive
calendar days unless Business Days are specified.

  (j)   The language in all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning, strictly neither for nor
against any Party hereto, and without implying a presumption that the terms
thereof shall be more strictly construed against one Party by reason of the rule
of construction that a document is to be construed more strictly against the
Person who itself or through its prepared the same, it being agreed that
representatives of both Parties have participated in the preparation hereof.

  (k)   Whenever in this Agreement the singular is used, it shall include the
plural if the context so requires, and whenever the masculine gender is used in
this Agreement, it shall be construed as if the masculine, feminine or neuter
gender, respectively, has been used where the context so dictates, with the rest
of the sentence being construed as if the grammatical and terminological changes
thereby rendered necessary have been made.

1.2.2 Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement shall have the respective meanings given to them in
accordance with GAAP.

ARTICLE 2

PURCHASE AND SALE OF SHARES

2.1 Transfer of Shares. Upon the terms and subject to the conditions of this
Agreement, at the Closing on the Closing Date and as of the Effective Time,
Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall
purchase, acquire and accept from Seller, all of Seller’s right, title and
interest to and in the Shares free and clear of all Liens.

2.2 Consideration. The consideration that Buyer shall pay Seller for the Shares,
the obligations of Seller under Article 5, and other rights of Buyer hereunder
(the “Purchase Price”), shall be Twelve Million Eighteen Thousand Seven Hundred
Sixteen Dollars ($12,018,716.00), representing the Book Value of the Company,
paid by delivery to Seller of the Senior Secured 5% Convertible Promissory Note.

2.3 Closing. The execution of this Agreement by the Parties and the Closing
shall take place at 9:00 a.m. (Phoenix, Arizona, time) on the Closing Date,
effective as of the Effective Time, at the offices of Bryan Cave LLP, Two North
Central Avenue, Suite 2200, Phoenix, Arizona 85004. At Closing, Seller shall
deliver or cause to be delivered to Buyer the documents identified in Article 6
and Buyer shall deliver or cause to be delivered to Seller the documents
identified in Article 7.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that as of the date of this Agreement
and the Closing the statements contained in this Article 3, when read together
with and qualified by the Disclosure Letter delivered by Seller to Buyer in
connection with this Agreement, are true and correct except for events,
transactions or occurrences expressly contemplated or required by this
Agreement.

The Disclosure Letter is divided into sections and subsections corresponding to
the sections and subsections of Article 3 of this Agreement. Whether or not
specifically required by the terms of this Article 3 or otherwise, Seller may
modify Seller’s representations and warranties contained in this Agreement by
disclosing relevant facts in the Disclosure Letter; provided, however, that for
any such disclosure to be effective, it must indicate the specific sections or
subsections of Article 3 to which it relates. The disclosure of any information
in the Disclosure Letter shall not be deemed to constitute an acknowledgment
that such information is required to be disclosed in connection with the
representations and warranties made by Seller in Article 3 or that it is
material, nor shall such information be deemed to establish a standard of
materiality. Unless otherwise specifically defined therein or the context
otherwise requires, capitalized terms set forth in the Disclosure Letter shall
have the meanings ascribed to such terms in this Agreement.

3.1 Corporate Existence and Power.

  (a)   The Company is a corporation validly existing and in good standing under
the laws of the State of Minnesota. The Company has made available to Buyer
true, complete and correct copies of its Articles of Incorporation and Bylaws,
as currently in effect.

  (b)   The Company has all requisite corporate power and authority to own,
lease and use its assets and to transact the Business, and holds all
authorizations, franchises, licenses and permits required therefor and all such
authorizations, franchises, licenses and permits are valid and subsisting.
Section 3.1(b) of the Disclosure Letter sets forth the jurisdiction(s) where the
Company is duly licensed or qualified to do business as a foreign corporation.
The Company is in good standing in each of the jurisdiction(s) set forth in
Section 3.1(b) of the Disclosure Letter and is duly licensed or qualified to do
business as a foreign corporation in any other jurisdiction where such license
or qualification is required, and is in good standing in each such jurisdiction,
except for jurisdictions where the failure to be so licensed or qualified would
not, individually or in the aggregate, have a Material Adverse Effect.

  (c)   Seller has the corporate power, authority and capacity to execute and
deliver this Agreement, to perform Seller’s obligations hereunder, and to
consummate the transactions contemplated thereby.

3.2 Valid and Enforceable Agreement; Authorization; Non-contravention.

  (a)   This Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except that such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally, and (ii)
general principles of equity.

  (b)   The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not require any action on the part of
Seller.

  (c)   Neither the Company nor Seller are a party to, subject to or bound by
any Contract, Law or Order which does or would (i) conflict with or be breached
or violated or its obligations thereunder accelerated or increased (whether or
not with notice or lapse of time or both) by the execution, delivery or
performance by Seller of this Agreement, or (ii) prevent the carrying out of the
transactions contemplated hereby. No permit, consent, waiver, approval or
authorization of, or declaration to or filing or registration with, any
Government or third party is required in connection with the execution, delivery
or performance of this Agreement by Seller or the Company any of the Related
Agreements to which Seller or the Company is a party, or the consummation by
Seller or the Company of the transactions contemplated hereby and thereby,
except for any such permits, consents, waivers, approvals, authorizations,
declarations, filings or registrations the failure of which to obtain would not
have a Material Adverse Effect. The transactions contemplated hereby will not
result in the creation of any Lien against the Company or any of its properties
or assets (other than a Permitted Lien), nor in the cancellation or modification
of any license, agreement or arrangement to which the Company is a party, except
for any such cancellations or modifications which would not, individually or in
the aggregate, have a Material Adverse Effect.

3.3 Capitalization and Ownership.

  (a)   The authorized capital stock of the Company and the names, addresses and
holdings of the record holders thereof are set forth in Section 3.3 of the
Disclosure Letter. The Shares are owned by Seller of record and beneficially,
and constitute the only issued and outstanding capital stock of the Company.
Seller has valid and marketable title in and to the Shares. Upon purchase and
payment therefor and delivery to Buyer thereof in accordance with the terms of
this Agreement, the Shares shall be transferred at Closing free and clear of all
Liens. All the Shares were duly authorized and validly issued and are fully paid
and non-assessable without restriction on the right of transfer thereof (other
than legends or other restrictions solely evidencing the restricted nature of
such Shares pursuant to applicable state and federal securities laws). Except
for Buyer’s rights pursuant to this Agreement, (i) there are no authorized or
outstanding (A) securities of the Company other than the Shares, or (B)
warrants, preemptive rights, other rights, or options with respect to any
securities of the Company, and (ii) neither the Company nor Seller is subject to
any obligation to issue, sell, deliver, redeem, exchange, convert, repurchase,
substitute or otherwise transfer, acquire or retire the Shares or any other
securities of the Company.

  (b)   The Company does not have any subsidiaries. The Company does not
directly or indirectly own or have any capital stock or other equity interest in
any other Person (including, without limitation, any contractual, joint venture,
profit sharing or other similar quasi-equity arrangement), and there are no
Contracts to effect any of the foregoing to which the Company is a party.

  3.4   Financial Statements. Attached as Section 3.4 of the Disclosure Letter
are the Financial Statements. To Seller’s knowledge, the Financial Statements
(i) have been prepared from, and are in accordance with, the books and records
of the Company consistently applied, (ii) are complete and correct and in
accordance with such books and records, (iii) present fairly the financial
position and results of operations of the Company in all material respects at
the dates and for the periods indicated, and (iv) have been prepared in
accordance with GAAP (except for year-end adjustments and notes with respect to
any interim financial statements) or are accompanied by a statement disclosing
any deviations from GAAP.

  3.5   Events Subsequent to February 1, 2004. Since February 1, 2004, except as
reflected in the Interim Financial Statements, there has been no:

  (a)   change in the business or condition (financial or otherwise), operations
or results of operations of the Company, or to Seller’s knowledge, current
prospects, other than changes in the Ordinary Course (which changes have not,
individually or in the aggregate, had a Material Adverse Effect);

  (b)   damage, destruction or loss, whether covered by insurance or not,
affecting the tangible assets of the Company which individually exceeds $25,000
or in the aggregate exceeds $100,000;

  (c)   material adverse change in the Company’s relationship with any of the
suppliers, customers, distributors, employees, consultants, lessors, licensors,
licensees or other third parties;

  (d)   declaration, setting aside, or payment of any dividend or any
distribution (in cash or in kind) with respect to any securities of the Company;

  (e)   sale or direct or indirect redemption, purchase or other acquisition of
securities of the Company;

  (f)   increase in or commitment to increase compensation, benefits, or other
remuneration to or for the benefit of any employee, shareholder, director,
officer, or agent of the Company, or any benefits granted under any Plan with or
for the benefit of any such employee, director, officer, or agent, except for
increases in salary, wages or benefits in the Ordinary Course which individually
exceeds $25,000 or in the aggregate exceeds $100,000;

  (g)   accrual or arrangement, whether direct or indirect, for, or payment of,
bonuses or special compensation of any kind, or any severance or termination
pay, to any present or former officer, director, or employee of the Company,
other than in the Ordinary Course and provided that any such accrual or
arrangement does not individually exceed $25,000 or in the aggregate exceed
$100,000;

  (h)   labor dispute or activity or proceeding by a labor union or threat
thereof or other event or condition of any character that could have a Material
Adverse Effect;

  (i)   material transaction entered into or carried out by the Company or
Seller in connection with the Business other than in the Ordinary Course;

  (j)   borrowing or incurrence of any indebtedness (including letters of credit
and foreign exchange contracts), contingent or otherwise, by or on behalf of the
Company or any endorsement, assumption, or guarantee of payment or performance
of any such indebtedness or any Liabilities of any other Person by or on behalf
of the Company other than in the Ordinary Course and provided that any such
borrowing or incurrence of indebtedness does not individually exceed $25,000 or
in the aggregate exceed $100,000;

  (k)   change made by the Company with respect to its Tax or financial
accounting, or making of any Tax election;

  (l)   grant of any Lien (other than Permitted Liens) with respect to the
Shares or the assets of the Company;

  (m)   transfer of any material assets, properties or rights (tangible or
intangible) of the Company, other than arm’s-length sales, leases, or
dispositions in exchange for not less than the fair market value thereof and in
the Ordinary Course;

  (n)   issuance by the Company of any security, including without limitation
any option, warrant or right to receive any security;

  (o)   change in the authorized capital or outstanding securities of the
Company;

  (p)   payment of any obligation or liability (absolute or contingent), by the
Company other than current liabilities reflected in or shown on the Financial
Statements and current liabilities incurred in the Ordinary Course;

  (q)   change in any accounting methods or practices (including, without
limitation, any change in depreciation or amortization methods, policies, or
rate) by the Company;

  (r)   entry into, or amendment, modification, or termination of any Material
Contracts except as otherwise disclosed in Sections 3.5(r) or 3.19 of the
Disclosure Letter;

  (s)   waiver or release of any right or claim of the Company or cancellation
of any debts or claims, except in the Ordinary Course and provided that any such
waiver or release does not individually exceed $25,000 or in the aggregate
exceed $100,000;

  (t)   capital expenditure by the Company individually exceeding $25,000 or in
the aggregate exceeding $100,000;

  (u)   any agreement by the Company to do any of the foregoing items 3.5(d)
through (u).

3.6 Undisclosed Liabilities.

  (a)   To Seller’s knowledge, the Company does not have any Liabilities,
except:

  (i)   those Liabilities identified on the Financial Statements; or

  (ii)   as incurred in the Ordinary Course since the date of the most recent
Financial Statements (none of which has had or may reasonably be expected to
have a Material Adverse Effect on the Company).

  (b)   To Seller’s knowledge, except as disclosed in Sections 3.4, 3.5, 3.6(a),
3.7, 3.10, 3.11, 3.19, 3.21, 3.27, 3.28, 3.30 or 3.33 of the Disclosure Letter
(noting in each case where such disclosure may involve a Liability which would
have a Material Adverse Effect), there is no currently existing condition or
circumstance which would reasonably be expected to result in such a Liability
which would have a Material Adverse Effect.

3.7 Taxes.

  (a)   The Company has filed, or caused to be filed, on a timely basis all Tax
Returns, and such Tax Returns are true, correct and complete in all respects.
Without limiting the foregoing, none of the Tax Returns contains any position
that is, or would be, subject to penalties under Section 6662 of the Code (or
any corresponding provisions of state, local or foreign Tax law). The Company
has not entered into any “listed transactions” as defined in
Section 1.6011-4(b)(2) of the Treasury Regulations, and the Company has properly
disclosed all reportable transactions as required by Section 1.6011-4 of the
Treasury Regulations.

  (b)   Section 3.7 of the Disclosure Letter lists all Tax Returns for periods
up to the Closing Date (whether or not the period ends on such date) that have
not been filed on or before the Closing Date. The Company currently is not the
beneficiary of any extension of time within which to file any Tax Return except
for the Company’s fiscal year 2003 income tax returns (for which the Company has
filed extensions).

  (c)   All Taxes due and owing by the Company (whether or not reflected on any
Tax Return) have been timely and fully paid when due and there are no grounds
for the assertion or assessment of additional Taxes against the Company or its
assets.

  (d)   The Company has timely and properly withheld and paid all Taxes required
to have been withheld and paid in connection with any amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party, including, but not limited to, amounts required to be withheld under
Sections 1441 and 1442 of the Code, or any similar provision under foreign law.

  (e)   The Company has filed or caused to be filed with the appropriate
Government entity all unclaimed property reports required to be filed and has
remitted to the appropriate Government entity all unclaimed property required to
be remitted.

  (f)   There are no Liens for Taxes (other than for current Taxes not yet due
and payable) upon any assets of the Company.

  (g)   The Company is not a party to or bound by any Tax indemnity, Tax
sharing, Tax allocation or other similar agreement.

  (h)   The Company (i) is not and never has been a member of an “affiliated
group” within the meaning of Section 1504 of the Code, except that the Company
has been included in the CSK Auto Corporation consolidated income tax return
since the Company was acquired by Seller; and (ii) does not have any Liability
for the Taxes of any Person under Treasury regulation Section 1.1502-6 (or
similar provision of state, local or foreign law) as a transferee or successor,
by contract or otherwise.

  (i)   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.

  (j)   The Company has not conducted business outside the State of Minnesota in
a manner that would subject it to the income tax of a state other than
Minnesota. The Company does not have and has not had a permanent establishment
in any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country, or a presence in a foreign
country that could subject the Company to income tax in such foreign country.

  (k)   No federal, state, local or foreign Tax audits or administrative or
judicial Tax proceedings are pending or being conducted with respect to the
Company.

  (l)   The Company has not received from any federal, state, local or foreign
Tax authority (including jurisdictions where the Company has not filed a Tax
Return) any (i) notice indicating an intent to open an audit or other review;
(ii) request for information related to Tax matters; or (iii) notice or
deficiency or proposed adjustment for any amount of Tax proposed, asserted, or
assessed by any Tax authority against the Company.

  (m)   The Company has not waived any statutes of limitation in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.

  (n)   True, correct and complete copies of all income Tax Returns, Tax
examination reports and statements of deficiencies assessed against, or agreed
to with respect to the Company with respect to the last three years with the IRS
or any taxing authority have been made available to Buyer, except for the
Company’s fiscal year 2003 income tax returns (for which the Company has filed
extensions).

  (o)   The Company is not a party to any agreement, contract, arrangement or
plan that has resulted or would result in a payment that would not be fully
deductible as a result of Section 162(m) or Section 280G of the Code or any
similar provision of foreign, state, or local law.

  (p)   None of the assets of the Company is property that the Company is
required to treat as being a “safe harbor lease” within the meaning of
Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity
and Fiscal Responsibility Act of 1982.

  (q)   None of the assets of the Company has been financed with or directly or
indirectly secures any debt the interest on which is tax-exempt under Section
103(a) of the Code. The Company is not a borrower or guarantor of any
outstanding industrial revenue , development or other similar bonds, and is not
a tenant, principal user or related person to any principal user (within the
meaning of Section 144(a) of the Code) of any property that has been financed or
improved with the proceeds of any such bonds.

  (r)   None of the assets of the Company is “tax exempt use property” within
the meaning of Section 168(h) of the Code.

  (s)   The Company is not, and never has been, a United States real property
holding company within the meaning of Section 897(c)(1)(A)(ii) of the Code.

  (t)   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) “closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date; (iii) installment sale or open
transaction disposition made on or prior to the Closing Date; or (iv) prepaid
amount received on or prior to the Closing Date.

  3.8   Accounts Receivable. The accounts receivable of the Company
(collectively, the “Accounts Receivable”) are (to the extent not yet paid in
full) valid, genuine and existing and arose or will have arisen from bona fide
sales of products or services actually made in the Ordinary Course. To Seller’s
knowledge, the Accounts Receivable are not subject to, and the Company has
received no notice of, any counterclaim, set-off, defense or Lien with respect
to the Accounts Receivable. To Seller’s knowledge, except to the extent of any
reserve therefor on the Closing Balance Sheet or to the extent paid prior to
Closing, the Accounts Receivable are and will at Closing be fully collectible.
Attached to the Disclosure Letter is an aging report for the Company’s Accounts
Receivable dated as of January 1, 2005. No agreement for deduction, free goods,
discount or deferred price or quantity adjustment has been made with respect to
any Accounts Receivable, except in the Ordinary Course.

  3.9   Inventories; Consignment. The inventory held by the Company at any
location consists of a quantity and quality usable and salable in the Ordinary
Course, is not physically damaged, previously used, obsolete, discontinued “old”
or “excess” (as defined below), is merchantable and fit for its intended use, is
in compliance with all applicable Law, whether domestic or foreign, and is in
conformity with all applicable product registrations and specifications, subject
only to the reserve, if any, for inventory write-down set forth in the Financial
Statements. If there is no reserve for inventory write-down set forth in the
Financial Statements, then the aggregate amount of all physically damaged,
previously used, obsolete, discontinued, old or excess inventory held by the
Company does not exceed Twenty Five Thousand Dollars ($25,000). The Company does
not hold any inventory or materials on consignment or have title to any
inventory or materials in the possession of others except in the Ordinary
Course. As used in this Agreement, “excess” inventory shall mean (A) with
respect to products in existence more than 24 months, the amount of inventory in
excess of a 24-month supply based on actual sales of such products over the
preceding 12 months, and (B) with respect to products introduced within the last
24 months, the amount of such inventory in excess of a 24-month supply based
upon the forecasted sales amount for such products during the 6 months following
the Closing, which forecast has been prepared by Seller in a commercially
reasonable manner. As used in the Agreement, “old” inventory shall mean any item
of inventory which has been held by the Company for more than 24 months.

  3.10   No Breach of Law or Governing Document. The Company is not (i) in
default under or in breach or violation of any Law, or of any provision of its
Articles of Incorporation or Bylaws, or (ii) the provisions of any Government
permit, franchise, or license, which breach or violation of such permit,
franchise, or license would have a Material Adverse Effect on the Company.
Neither the Company nor Seller has received any notice alleging such default,
breach or violation. Neither the execution of this Agreement nor any Related
Agreement, nor the Closing, does or will constitute or result in any such
default, breach or violation.

3.11 Litigation.

  (a)   There is no, and for the previous three years there has not been any,
suit, claim, litigation, proceeding (administrative, judicial, or in
arbitration, mediation or alternative dispute resolution), Government or grand
jury investigation, or other action (any of the foregoing, an “Action”), pending
or, to Seller’s knowledge, threatened, anticipated or contemplated, against
Seller (solely with respect to the Company or the Business), the Company,
involving the Business, or involving any of the Company’s property, assets or
capital stock or any of its shareholders, directors, officers, agents, or other
personnel in its capacity as such, including without limitation any Action
challenging, enjoining, or preventing this Agreement, or the consummation of the
transactions contemplated hereby;

  (b)   The Company is not currently and, to Seller’s knowledge, has not been
subject to any Order other than Orders of general applicability; and

  (c)   The Company has not been or been threatened to be subject to any Action
or Order relating to personal injury, death, or property or economic damage
arising from products sold, licensed or leased and services performed by the
Company.

3.12 Owned and Leased Real Property.

  (a)   Set forth in Section 3.12(a) of the Disclosure Letter is a list of the
real property owned by the Company (the “Owned Real Property”) together with the
legal description of each parcel of Owned Real Property, a description of the
title insurance policy or other evidence of title issued with respect thereto
and a description of the type of use of each such parcel. Except for Permitted
Liens and easements and Liens set forth in Section 3.12(a) of the Disclosure
Letter, none of which are substantial in character or amount and none of which
detract from the value or interfere with the use of the property in any material
way, the Company has good and marketable title to the Owned Real Property free
and clear of all options, leases, covenants, conditions, easements, agreements,
claims, and other Liens of every kind and there exists no restriction or
limitation on the use or transfer of such property. Seller has no interest in or
any right or obligation to acquire any interest in the Owned Real Property.

  (b)   Set forth in Section 3.12(b) of the Disclosure Letter hereto is a
description of each lease under which the Company is the lessee of any real
property (“Leased Real Property”). The Company has made available to Buyer a
true, correct and complete copy of each lease identified on Section 3.12(b) of
the Disclosure Letter. The premises or property described in such leases are
presently occupied or used by the Company as lessee under the terms of such
leases. All rentals due under such leases have been paid and there exists no
default by the Company or by any other party to such leases under the terms of
such leases and no event has occurred which, upon passage of time or the giving
of notice, or both, would result in any event of default by the Company or by
any other party to such leases, or prevent or limit the Company from exercising
and obtaining the benefits of any rights or options contained therein. The
Company has all right, title and interest of the lessee under the terms of said
leases, free of all Liens other than Permitted Liens and to Seller’s knowledge
all such leases are valid and in full force and effect.

  (c)   To Seller’s knowledge, all improvements located on, and the use
presently being made of, the Real Property comply with all applicable zoning and
building codes, ordinances and regulations and all applicable fire,
environmental, occupational safety and health standards and similar standards
established by Law and the same use thereof by the Company and Buyer following
Closing will not result in any violation of any such code, ordinance, regulation
or standard. To Seller’s knowledge, the present use and operation of the Real
Property does not constitute a non-conforming use and is not subject to a
variance. To Seller’s knowledge, there is no proposed, pending or threatened
change in any such code, ordinance, regulation or standard which would have a
Material Adverse Effect.

  (d)   At and after the Closing, the Company shall have all rights, easements
and agreements necessary for the use and maintenance of water, gas, electric,
telephone, sewer or other utility pipelines, poles, wires, conduits or other
like facilities, and appurtenances thereto, over, across and under the Real
Property. No proceeding is pending or, to Seller’s knowledge, threatened which
could adversely affect the zoning classification of the Real Property.

  (e)   There is no unpaid property Tax, levy or assessment against the Real
Property (except for Liens relating to Taxes not yet due and payable), nor is
there pending or threatened any condemnation proceeding against the Real
Property or any portion thereof. To Seller’s knowledge, no part of any
improvements on the Real Property encroaches upon any property adjacent thereto
or upon any easement, nor is there any encroachment or overlap upon the Real
Property.

  (f)   To Seller’s knowledge, there is no condition affecting the Real Property
or the improvements located thereon which requires repair or correction to
restore the same to reasonable operating condition.

3.13 Personal Property; Title to Assets.

  (a)   Section 3.13 of the Disclosure Letter sets forth a complete and correct
list and brief description of each item of equipment, furniture, fixtures and
other tangible personal property owned or leased by the Company and having an
individual book value in excess of $50,000.

  (b)   Except with respect to leases set forth in Section 3.13 and Section 3.14
of the Disclosure Letter (or which, by the terms of such Sections, are not
required to be set forth in the Disclosure Letter), the Company has good and
marketable title to and is the sole and exclusive owner of all right, title and
interest in and to all of the property used by it or necessary to conduct its
business, including in each case all personal property reflected on the
Financial Statements or acquired after the date thereof (except any personal
property subsequently sold in the Ordinary Course), free and clear of all Liens
except for Permitted Liens.

  3.14   Personal Property Leases. Set forth in Section 3.14 of the Disclosure
Letter is a description of each lease having annual lease payments in excess of
$25,000 under which the Company is the lessee of any personal property and the
location of such property. The Company has made available to Buyer a true,
correct and complete copy of each lease identified on Section 3.14 of the
Disclosure Letter. The property described in such leases is presently used by
the Company as lessee under the terms of such leases. All rentals due under such
leases have been paid and there exists no default by the Company or, to Seller’s
knowledge, by any other party to such leases under the terms of such leases and
no event has occurred which, upon passage of time or the giving of notice, or
both, would result in any event of default by the Company or, to Seller’s
knowledge by any other party to such leases, or prevent the Company from
exercising and obtaining the benefits of any rights or options contained
therein. The Company has all right, title and interest in the leasehold
interests of the lessee under the terms of said leases, free of all Liens other
than Permitted Liens and all such leases are valid and in full force and effect.

  3.15   Necessary Property. The assets owned or leased by the Company
constitute all of the property and property rights used or necessary for the
conduct of the Business in the manner and to the extent presently conducted by
the Company. There exists no condition, restriction or reservation affecting the
title to or utility of such assets of the Company which would prevent the
Company or Buyer from utilizing such assets, or any part thereof, after the
Closing to the same full extent that the Company might continue to do so if the
transactions contemplated hereby did not take place.

  3.16   Use and Condition of Property; Location. To Seller’s knowledge, all the
assets of the Company are in good operating condition and repair, subject to
ordinary and normal wear and tear, as reasonably required for its use as
presently conducted or planned by the Company, and conform in all material
respects to all applicable Laws, and no notice of any violation of any Law
relating to any of such property or assets has been received by the Company
except such as have been fully complied with. No property or assets of the
Company, other than inventory in transit or on consignment or bailment, are in
the possession of others and the Company does not hold any property, other than
inventory on consignment. All of the tangible property of the Company has been
maintained in accordance with normal industry practice and is suitable for the
purposes for which it is presently used. Section 3.16 of the Disclosure Letter
sets forth every location at which the Company maintains any inventory on
consignment or bailment.

  3.17   Licenses and Permits. The Company possesses all licenses, permits and
other authorizations and approvals required for the conduct of the Business in
the manner in which it is currently being conducted. Each such license or permit
is valid and in full force and effect and is not subject to any pending or, to
Seller’s knowledge, threatened or contemplated administrative or judicial
proceeding to revoke, cancel or declare such license or permit invalid in any
respect, except where such action would not have a Material Adverse Effect on
the Business. Upon Closing, the Company will have all right and authority to
conduct its activities pursuant to such licenses and permits. The Company is in
compliance in all respects with such licenses and permits except where such non
compliance would have a Material Adverse Effect. No such license or permit has
been, or to Seller’s knowledge is threatened to be, revoked, canceled, suspended
or materially adversely modified. Neither the execution of this Agreement nor
the Closing does or will constitute or result in a material default under or
violation of any such license or permit.

3.18 Environmental Matters.

  (a)   There is no Environmental Claim pending or, to the Knowledge of Seller,
threatened or contemplated, against the Company, or pending, or to the Knowledge
of Seller, threatened or contemplated, against any Person whose Liability for
such Environmental Claim the Company has or may have incurred, retained,
succeeded to, or assumed either contractually, by operation of law or otherwise,
relating to the Environmental Property.

  (b)   To the Knowledge of Seller, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the handling, manufacture, treatment, storage, use, generation,
release, emission, discharge, presence or disposal of any Hazardous Materials,
either collectively, individually, or severally, that could form the basis of
any Environmental Claim against the Company, or against any Person whose
Liability for any Environmental Claim the Company has incurred, retained,
succeeded to, or assumed either contractually, by operation of law or otherwise,
relating to the Environmental Property.

  (c)   To the Knowledge of Seller, there has been no release of any Hazardous
Material on, in, at, under or from the Environmental Property, which would or
may result in material Liabilities of or to the Company, and the Company has no
Liability for any off-site disposal of any Hazardous Materials which would or
may result in material Liabilities of or to the Company.

  (d)   To the Knowledge of Seller: (i) there are no above ground or underground
storage tanks currently or formerly located on any Environmental Property or
which would or may result in Liabilities which would or may result in material
Liabilities of or to the Company; and (ii) there are no Hazardous Materials on
any Environmental Property which would or may result in Liabilities which would
or may result in material Liabilities of or to the Company.

  (e)   Seller has provided or made available to Buyer copies of all documents,
reports, data and other information in its possession, custody or control
concerning the environmental condition of any Environmental Property and the
Company’s compliance with Environmental Laws, except for any such materials
which are subject to an attorney/client privilege in favor of Seller, the
Company or any of the Company’s Affiliates, or which constitute attorney work
product, but only with respect to privileged materials constituting the
provision of legal advice and not the underlying facts, and only to the extent
reasonably necessary to preserve the privilege asserted.

3.19 Contracts and Commitments.

  (a)   Section 3.19 of the Disclosure Letter lists each of the Contracts of the
Company described below (such Contracts being hereinafter referred to as the
“Material Contracts”) together with a brief description of each such Contract:

  (i)   any Contract providing for the sale of products or the provision of
services, in any such case, by the Company to any other Person with a value
reflected on the books of the Company (representing, as applicable, the
aggregate value of the money, services, goods, property or products to be
expended, transferred or received by the Company) in excess of $50,000;

  (ii)   any single Contract providing for an expenditure by the Company in
excess of $25,000, or Contracts with the same or affiliated vendor(s) providing
for an expenditure by the Company in excess of $50,000;

  (iii)   any Contract to sell products or to provide services to third parties
which (i) Seller or the Company knows is at a price which would result in a net
loss on the sale of such products or provision of such services or (ii) contains
terms or conditions which Seller or the Company cannot reasonably expect the
Company to satisfy or fulfill in all material respects;

  (iv)   any Contract for materials, supplies, component parts or other items or
services in excess of the normal, ordinary, usual and current requirements of
the Company or at a price in excess of the current reasonable market price at
the time of such Contract;

  (v)   any Contract pursuant to which the Company is the lessor or sublessor
of, or permits any third party to operate, any real or personal property;

  (vi)   any revocable or irrevocable power of attorney granted to any Person
for any purpose whatsoever;

  (vii)   any loan agreement, indenture, promissory note, conditional sales
agreement, mortgage, security agreement, pledge, letter of credit arrangement,
guarantee, endorsement, assumption, indemnity, surety, foreign exchange
contract, accommodation or other similar type of Contract;

  (viii)   any other Contract which involves (i) a sharing of profits,
(ii) future payments of $25,000 individually or $50,000 or more in the aggregate
per annum to other persons, or (iii) any joint venture, partnership or similar
Contract;

  (ix)   any sales agency, sales representation, consultant, distributorship or
franchise Contract that is not terminable unilaterally by the Company without
penalty within 60 days;

  (x)   any Contract providing for the payment of any cash or other benefits
upon the sale or change of control of the Company or a substantial portion of
its assets;

  (xi)   any Contract prohibiting or limiting competition, prohibiting or
limiting the Company from freely engaging in any business anywhere in the world,
or prohibiting or limiting the disclosure of trade secrets or other confidential
or proprietary information;

  (xii)   any Contract not made in the Ordinary Course (irrespective of whether
such Contract was permitted to be left off of any other disclosure in the
Disclosure Letter due to the monetary value thereof or otherwise);

  (xiii)   any Contract pursuant to which the Company has or has agreed to
acquire, redeem, repurchase, or dispose of any securities or acquire or dispose
of any business, product line or the like;

  (xiv)   any shareholder agreements or agreements relating to the issuance of
any securities of the Company and/or the granting of registration rights with
respect thereto; and

  (xv)   to the extent not included within Clauses (i) through (xiv) above, any
Contract involving aggregate expenditures in excess of $50,000 which is not
cancelable unilaterally by the Company without penalty on thirty (30) days
notice or less.

  (b)   The Company has not received any notice of any intention to terminate,
repudiate or disclaim any Material Contract.

  3.20   Validity of Contracts. Each of the Material Contracts is a valid,
binding and enforceable obligation of the Company and, to Seller’s Knowledge,
the other parties thereto, in accordance with its terms and conditions, subject
to the qualification that the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws, now or hereafter in effect, affecting creditors’ rights generally,
and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding for the enforcement thereof may be brought, and further subject to
any other legal defenses to enforcement that may be available to the Company or
the Company’s Affiliates, as applicable, or any of them. The Company is not, to
the extent it would create a current or future Liability of Buyer and/or the
Company, the Company has not been, and to Seller’s Knowledge, no other party to
a Material Contract is, in material breach or violation of or default under any
Material Contract, and no event has occurred that, through the passage of time
or the giving of notice, or both, would constitute, and neither the execution of
this Agreement nor the Closing hereunder do or will constitute or result in,
such a breach, violation or default on the part of any party thereto, cause the
acceleration of any Liability of the Company or any other party thereto, or the
creation of a Lien upon any assets of the Company or the Shares, or require any
consent thereunder. The Company has provided or made available to Buyer a true,
complete and accurate copy of each Material Contract.

  3.21   Intellectual Property. Section 3.21 of the Disclosure Letter sets forth
the registered Intellectual Property owned by the Company (excluding
non-proprietary information, know-how or processes otherwise available to the
industry or public or rights obtained pursuant to licenses associated with
software and other Intellectual Property generally made available for purchase
or use by the industry or the public) and accurately identifies, where
applicable, the following for each item of registered Intellectual Property:
filing date, issue date, classification of invention or goods or services
covered, country of origin, licensor, license date, licensed subject matter,
territorial limitations and the degree of exclusivity of use.

  (a)   Section 3.21(a) of the Disclosure Letter sets forth a complete and
accurate list (showing in each case, where applicable, the registered owner,
title (in the case of patents), mark, applicable jurisdiction, application
number, registration number and date of filing or registration (if any)) of all
(i) patents, (ii) trademarks, trade names, service marks and assumed or
fictitious names currently or previously used by the Company during the past
three (3) years, (iii) material Internet domain names currently or previously
used by the Company during the past three (3) years, and (iv) registered
copyrights, and (v) material software (excluding software and other Intellectual
Property generally made available for purchase or use by the industry or the
public), in each case which are owned by the Company.

  (b)   Section 3.21(b) of the Disclosure Letter sets forth a complete and
accurate list and description of all material Contracts pursuant to which
Company uses or grants others the right to use any Intellectual Property,
including without limitation software of the Company (excluding non-proprietary
information, know-how or processes otherwise available to the industry or public
or rights obtained pursuant to licenses associated with software and other
Intellectual Property generally made available for purchase or use by the
industry or the public).

  (c)   The Company either owns or has the valid right to use all Intellectual
Property (excluding non-proprietary information, know-how or processes otherwise
available to the industry or public or rights obtained pursuant to licenses
associated with software and other Intellectual Property generally made
available for purchase or use by the industry or the public) currently used in
connection with the Business.

  (d)   All of the registrations or applications set forth in Section 3.21(a) of
the Disclosure Letter are valid and subsisting, in full force and effect, and
have not expired or been canceled or abandoned; and there is no pending or, to
Seller’s Knowledge, threatened opposition, interference or cancellation
proceeding before any court or registration authority in any jurisdiction
against the Intellectual Property described in Section 3.21(a) of the Disclosure
Letter.

  (e)   The licenses or sublicenses granted by the Company to third parties, and
the terms and conditions of any licenses or sublicenses granted to the Company
by third parties, in each case as described in Section 3.21(b) of the Disclosure
Letter, are valid and binding obligations of the Company, enforceable in
accordance with its terms against the Company and, to Seller’s Knowledge,
against each other party thereto, in accordance with its respective terms,
subject to (i) applicable bankruptcy, reorganization, insolvency, moratorium,
and similar laws affecting the enforcement of creditors’ rights generally; and
(ii) the effect of general principles of equity (including specific performance)
regardless of whether considered in a proceeding in equity or at law, there
currently exists no event or condition which will result in a material violation
or breach of, or constitutes (with or without due notice or lapse of time or
both) a default by, the Company under any such agreement.

  (f)   To Seller’s Knowledge, the manufacture, advertising, sale or use of any
products manufactured or sold by the Company did not and does not infringe (nor
has any claim been made that any such action infringes) the intellectual
property rights of others, and the Company has not received any notice of a
third party claim or suit, (i) alleging that the Company’s activities or the
conduct of the business of the Company infringes or constitutes the unauthorized
use of the intellectual property rights of any third party, or (ii) challenging
the ownership, use, validity or enforceability of any of the Intellectual
Property.

  (g)   To the Knowledge of Seller, no Person (other than the Company or the
Company’s Subsidiaries) is infringing on the Intellectual Property (excluding
non-proprietary information, know-how or processes otherwise available to the
industry or public or rights obtained pursuant to licenses associated with
software and other Intellectual Property generally made available for purchase
or use by the industry or the public) or upon the rights of the Company therein.

  (h)   The Company owns or has the right to use all software set forth in
Sections 3.21(a) and 3.21(b) of the Disclosure Letter and all material “shrink
wrap license” software used or owned by the Company.

  3.22   Insurance. The Company has at all times since February 1, 2004,
maintained insurance as required by Law or under any agreement to which the
Company is or has been a party, including without limitation general
comprehensive Liability, unemployment and workers’ compensation coverage.
Section 3.22 of the Disclosure Letter sets forth the insurance maintained by the
Company, together with the amount of coverage for each policy and indicates
which of such insurance policies are claims-made policies and which of such
policies are occurrence-based policies. To Seller’s Knowledge, policies thereon
described evidence insurance in such amounts and against such risks and losses
as are generally maintained with respect to comparable companies and properties.
All of such insurance policies are in full force and effect (with respect to the
applicable coverage periods), and the Company is not in default with respect to
any of its respective obligations under any of such insurance policies.

3.23 Employees, Officers, Directors and Consultants.

  (a)   Section 3.23(a) of the Disclosure Letter contains a complete and
accurate list of the following information for each director, officer and
employee of the Company, including each employee on leave of absence or layoff
status: name; job title; current compensation paid or payable and any change in
compensation since February 1, 2004; and, vacation accrued.

  (b)   Set forth in Section 3.23(b) of the Disclosure Letter is a list of:
(i) all current paid consultants to the Company, and (ii) all retirees and
terminated employees of the Company for whom the Company has any benefits
responsibility or other continuing or contingent Liability, together, with the
current rate of compensation, fees and benefits (if any) payable to each such
Person and any incentive or bonus payments.

  (c)   The Company is not indebted to Seller or any director, officer, employee
or agent of the Company, except for amounts due as normal salaries, wages, fees,
employee benefits, and bonuses and in reimbursement of ordinary expenses on a
current basis not in excess of $5,000 in each single instance and $20,000 in the
aggregate.

  (d)   No officer, director, employee or consultant of the Company is indebted
to the Company except for advances for ordinary business expenses on a basis
consistent with past practices not in excess of $5,000 in each single instance
and $20,000 in the aggregate.

  (e)   All payments to agents, consultants and others made by the Company have
been in payment of bona fide fees and commissions and not as bribes, kickbacks
or as otherwise illegal payments, including, without limitation, any payment in
violation of the Foreign Corrupt Practices Act (15 U.S.C. §78dd, et seq.). All
such payments have been made directly to or for the account of the parties
providing the goods or services for which such payments were made, and no such
payment has been paid in a manner intended to avoid currency controls or any
Party’s Tax reporting or payment obligations. The Company has properly and
accurately reflected on its books and records: (i) all compensation paid to and
perquisites provided to or on behalf of its agents and employees; and (ii) all
compensation and perquisites that are due and payable to such persons, but which
have not been paid or provided at the Closing Date. Such compensation and
perquisites have been properly and accurately reflected in the Financial
Statements, records and government filings of the Company, to the extent
required by Law.

  (f)   No former or current employee or current or former officer or director
of the Company is a party to, or is otherwise bound by, any agreement, including
any confidentiality, non-competition, or proprietary rights agreement, between
such employee or officer or director and any other Person that in any way
adversely affected, affects, or will affect (i) the performance of his or her
duties as an employee or officer or director of the Company, or (ii) the ability
of the Company to conduct the Business, which agreement cannot be terminated on
thirty (30) days notice by the Company.

3.24 Bank Accounts of the Company. Set forth in Section 3.24 of the Disclosure
Letter is a list of the locations and numbers of all bank accounts, investment
accounts and safe deposit boxes maintained by the Company, together with the
names of all persons who are authorized signatories or have access thereto or
control thereunder. The Company is not a party to any lock-box or other similar
arrangement, and all funds received by the Company in the Ordinary Course are
entitled to be, and are, deposited in its operating account(s) identified in
Section 3.24 of the Disclosure Letter.

3.25 Labor Matters.

  (a)   The Company is not a party to or bound by any collective bargaining,
works council, union representation or similar agreement;

  (b)   There is no controversy existing, pending or, to Seller’s Knowledge,
threatened with any association or union or collective bargaining representative
of the employees of the Company;

  (c)   There is no charge or complaint relating to unfair labor practices
pending against the Company, nor is there any labor strike, work stoppage,
material grievance or other labor dispute pending or, to Seller’s Knowledge,
threatened against the Company;

  (d)   To Seller’s Knowledge, the Company is not and has not engaged in any
unfair labor practice and there is no pending or threatened claim, investigation
or other proceeding before any tribunal (including, without limitation, the
National Labor Relations Board, the Equal Employment Opportunity Commission),
and all state, local, foreign or other similar agencies responsible for the
enforcement of labor or employment laws;

  (e)   There is no labor strike, dispute, slowdown, or stoppage pending or, to
Seller’s Knowledge, threatened against the Company;

  (f)   No right of representation exists respecting the employees of the
Company;

  (g)   No collective bargaining agreement is currently being negotiated and no
organizing effort is currently being made with respect to the employees of the
Company;

  (h)   To Seller’s Knowledge, no current or former employee of the Company has
any claim against the Company on account of or for (i) overtime pay, other than
overtime pay for the current payroll period and which the Company agrees is
payable, (ii) wages or salary (excluding current bonus accruals and amounts
accruing under pension and profit sharing plans) for any period other than the
current payroll period and which the Company agrees is payable, (iii) vacation,
time off or pay in lieu of vacation or time off, other than that earned in
respect of the current fiscal year and which the Company agrees is payable, or
(iv) any violation of any Law relating to minimum wages or maximum hours of
work;

  (i)   No claim has been made against the Company that remains outstanding for
breach of any contract of employment or for services or for severance or
redundancy payments or protective awards or for compensation for unfair
dismissal or for failure to comply with any Law with regard to employment rights
or in relation to any alleged sex or race discrimination or for any other
Liability accruing from the termination or variation of any contract of
employment or for services, nor is Seller aware that any such claim has been
threatened or is pending;

  (j)   There is no contract of service in force between the Company and any of
its directors, officers or employees which is not terminable by the Company
without compensation or other consideration on less than three months’ notice
given at any time or which provides for compensation or other consideration
specifically in connection with the transactions contemplated by this Agreement;

  (k)   The Company is not a party to (i) any outstanding employment, consulting
or management Contracts with any Person that are not terminable at will, or that
provide for the non-discretionary payment of any bonus or commission, or
(ii) any Contract, policy, guideline or practice that does or would require it
to pay termination or severance pay to salaried, non-exempt or hourly employees
(other than as required by applicable Law); and

  (l)   The Company has complied with any and all obligations arising under the
Worker Adjustment and Retraining Notification Act.

  3.26   Employee Benefit Matters. Section 3.26 of the Disclosure Letter lists
each current Plan, whether or not subject to ERISA, which the Company or its
ERISA Affiliates maintains, or to which the Company or its ERISA Affiliates
contributes, or has any obligation to contribute.

  (a)   Each such Plan (and each related trust, insurance contract, or fund) has
been maintained, funded and administered in accordance with the terms of such
Plan and complies in form and in operation in all material respects with the
applicable requirements of ERISA, the Code, and other applicable Laws.

  (b)   All required reports and descriptions (including Form 5500 annual
reports, summary annual reports, and summary plan descriptions) have been timely
filed and/or distributed in accordance with the applicable requirements of ERISA
and the Code with respect to each such Plan. The requirements of COBRA have been
met with respect to each such Plan which is an Employee Welfare Benefit Plan (as
defined in Section 3(2) of ERISA) subject to COBRA.

  (c)   All contributions (including all employer contributions and employee
salary reduction contributions) that are due have been made within the time
periods prescribed by ERISA and the Code to each such Plan that is an Employee
Pension Benefit Plan (as defined in Section 3(2) of ERISA), there has been no
“accumulated funding deficiency” (as defined in ERISA) with respect to any Plan,
and all contributions for any period ending on or before the Closing Date which
are not yet due have been made to each such Employee Pension Benefit Plan or
accrued in accordance with the past custom and practice of the Company. All
premiums or other payments for all periods ending on or before the Closing Date
have been paid with respect to each such Plan that is an Employee Welfare
Benefit Plan.

  (d)   There have been no Prohibited Transactions (as defined in Section 406 of
ERISA) with respect to any such Plan. No fiduciary has any Liability for breach
of fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any such Plan. No action, suit,
proceeding, hearing, or investigation with respect to the administration or the
investment of the assets of any such Plan (other than routine claims for
benefits) is pending or, to Seller’s Knowledge, threatened. The Company does not
have any Knowledge of any basis for any such action, suit, proceeding, hearing
or investigation.

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

(f) With respect to each such Plan:

  (i)   No such Plan that is an Employee Pension Benefit Plan (other than any
Multiemployer Plan (as defined in Section 3(37) of ERISA)) has been completely
or partially terminated or been the subject of a “reportable event”. No
proceeding by the PBGC to terminate any such Employee Pension Benefit Plan has
been instituted or threatened. The market value of assets under each such Plan
that is an Employee Pension Benefit Plan (other than any Multiemployer Plan)
equals or exceeds the present value of all vested and nonvested Liabilities
thereunder determined in accordance with PBGC methods, factors, and assumptions
applicable to an Employee Pension Benefit Plan terminating on the date for
determination; and

  (ii)   Neither the Company nor any of its Subsidiaries has incurred, and
Seller has no reason to expect that the Company will incur, any Liability to the
PBGC (other than with respect to PBGC premium payments not yet due) or otherwise
under Title IV of ERISA or under the Code with respect to any such Plan which is
an Employee Pension Benefit Plan.

  (g)   None of the Company nor any ERISA Affiliate thereof contributes to, has
any obligation to contribute to, or has any Liability (including withdrawal
Liability as defined in ERISA § 4201) under or with respect to any Multiemployer
Plan.

  (h)   Neither the Company nor any ERISA Affiliate thereof maintains,
contributes to or has an obligation to contribute to, or has any Liability or
potential Liability with respect to, any Employee Welfare Benefit Plan providing
health or life insurance or other welfare-type benefits for current or future
retired or terminated directors, officers or employees (or any spouse or other
dependent thereof) of the Company other than in accordance with COBRA.

  3.27   Product and Service Warranties. Set forth in Section 3.27 of the
Disclosure Letter are the standard forms of product and service warranties and
guarantees used by the Company and copies of all other outstanding product and
service warranties and guarantees. No oral product or service warranties or
guaranties have been authorized or made containing terms less favorable to the
Company than the terms of the forms of product and service warranties and
guarantees set forth in Section 3.27 of the Disclosure Letter. Since February 1,
2004, no product or service warranty or similar claims have been made against
the Company except routine claims as to which, in the aggregate, losses and
expenses in respect of service costs and repair or replacement of merchandise do
not and will not exceed the amount of the reserve for warranties on the Closing
Balance Sheet, or, if no such reserve exists, $50,000.

  3.28   Product Liability Claims(a) . Since February 1, 2004, none of Seller
and/or the Company has received any written notice or information relating to
any claim or allegation of personal injury, death, or property or economic
damages, any claim for punitive or exemplary damages, any claim for contribution
or indemnification, or any claim for injunctive relief in connection with or
involving any service provided or any product designed, manufactured, serviced,
produced, modified, distributed or sold by or on behalf of the Company,
resulting from an alleged defect in design, manufacture, materials or
workmanship, performance, or any alleged failure to warn, or from any alleged
breach of implied warranties or representations, or any alleged noncompliance
with any applicable Laws pertaining to products liability matters, other than
notices or claims that have been settled or resolved.

3.29 Books and Records and Financial Controls.

  (a)   True, correct and complete copies of the books of account, stock record
books, minute books, bank accounts, and other corporate records solely relating
to the Company (where necessary, redacted to exclude information not solely
related to the Company) have been made available to Buyer and such books and
records have been maintained in accordance with good business practices. The
minute book of the Company contains accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the Board of
Directors, and committees of the Board of Directors of the Company, and no
meeting of any such stockholders, Board of Directors, or committee has been held
for which minutes have not been prepared and are not contained in such minute
books. At the Closing, all of those books and records will be in the possession
of the Company.

  (b)   The Company uses commercially reasonable efforts to establish proper and
adequate internal accounting controls which provide reasonable assurance that
(i) transactions are executed with management’s authorization; (ii) transactions
are recorded as necessary to permit preparation of the financial statements of
the Company and to maintain accountability for the Company’s assets; (iii)
access to the Company’s assets is permitted only in accordance with management’s
authorization; (iv) the reporting of the Company’s assets is compared with
existing assets at regular intervals; and (v) accounts, notes and other
receivables and inventory are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis.

  3.30   Customers, Suppliers and Competitors. Section 3.30 of the Disclosure
Letter sets forth a complete and correct list of (a) the ten largest suppliers
by dollar volume of the Company and the aggregate dollar volume of purchases by
the Company from such suppliers since January 1, 2004; (b) the top ten customers
of the Company by dollar volume of purchase since January 1, 2004; and (c) any
provider of goods or services material to the Business as currently being
conducted, as to which such provider is the sole source of such good or service,
or where the loss of such supplier would result in a Material Adverse Effect, if
any. To Seller’s Knowledge, the Company has not received any notice or
indication that any of the persons listed in Section 3.30 of the Disclosure
Letter will (i) cease doing business with the Company, or (ii) materially reduce
the volume of such business which such person did or will provide to the Company
in each case since January 1, 2004.

  3.31   Propriety of Past Payments. Except as set forth in Section 3.31 of the
Disclosure Letter, no finder’s fee or other payment has been, or will be, made
by or on behalf of the Company in respect of, or in connection with, any
commitment to any person, firm, corporation or other entity which is not a party
to such Contract or commitment. No funds or assets of the Company have been used
for illegal purposes; no unrecorded funds or assets of the Company have been
established for any purpose; no accumulation or use of the Company’s corporate
funds or assets has been made without being properly accounted for in the
respective books and records of the Company; all payments by or on behalf of the
Company have been duly and properly recorded and accounted for in its books and
records; no false or artificial entry has been made in the books and records of
the Company for any reason; no payment has been made by or on behalf of the
Company with the understanding that any part of such payment is to be used for
any purpose other than that described in the documents supporting such payment;
and the Company has not made, directly or indirectly, any illegal contributions
to any political party or candidate, either domestic or foreign.

  3.32   Change in Ownership. To Seller’s and the Company’s Knowledge, neither
the purchase of the shares by the Buyer, nor the consummation of the
transactions contemplated by this Agreement will cause any Material Adverse
Effect upon the business operations of the Company or result in the loss of the
benefits of any relationships it has with any customer, supplier, or other
business relationship.

  3.33   Guarantees. The Company is not a guarantor, indemnitor, surety or
accommodation party or, to Seller’s Knowledge, otherwise liable for any
indebtedness of any other Person, firm or corporation except as endorser of
checks received and deposited in the Ordinary Course.

  3.34   Brokers, Finders. No finder, broker, agent, or other intermediary,
acting on behalf of the Company or Seller, is entitled to a commission, fee, or
other compensation or Liability in connection with the negotiation or
consummation of this Agreement or any of the transactions contemplated hereby.

  3.35   Accuracy of Information. To Seller’s Knowledge, none of the
representations, warranties or statements of Seller contained in this Agreement
or in the Disclosure Letter contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make any of such
representations, warranties or statements in this Agreement or in the Disclosure
Letter not misleading, provided, however, that no representation or warranty of
any kind is made by Seller with respect to any projections included in any
document provided to Buyer.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that as of the date of this Agreement
and the Closing the statements contained in this Article 4 are true and correct
except for events, transactions or occurrences contemplated or required by this
Agreement.

4.1 Corporate Existence and Power.

  (a)   Buyer is a corporation, validly existing and in good standing under the
laws of the State of Delaware.

  (b)   Buyer has all requisite corporate power and authority to own and use its
assets and to transact the business in which it is engaged, and holds all
franchises, licenses and permits required therefor. Buyer is duly licensed or
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where such license or qualification is required except for
jurisdictions where the failure to be so qualified would not, individually or in
the aggregate, have a Material Adverse Effect.

  (c)   Buyer has the corporate power, authority and capacity to enter into this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.

  (d)   Buyer is not a party to, subject to or bound by any Contract, Law or
Order which would (i) be breached or violated or its obligations thereunder
accelerated or increased (whether or not with notice or lapse of time or both)
by the execution or delivery by Buyer of this Agreement or the performance by
Buyer of the transactions contemplated by this Agreement, or (ii) prevent the
carrying out of the transactions contemplated hereby. Except as otherwise
provided for herein, no waiver or consent of any third Person is required for
the execution of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.

4.2 Valid and Enforceable Agreement; Authorization. This Agreement constitutes a
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms, except that such enforcement may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally and (ii)
general principles of equity. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized, approved and ratified by all necessary action on the part of Buyer.

4.3 Brokers, Finders. No finder, broker, agent, or other intermediary, acting on
behalf of Buyer, is entitled to a commission, fee, or other compensation or
Liability in connection with the negotiation or consummation of this Agreement
or any of the transactions contemplated hereby.

4.4 Solvency. As of the date hereof and the Closing, and the Effective Time
(both before and after giving effect to the transactions contemplated by this
Agreement), Buyer: (a) is and shall be solvent; (b) can and shall be able to
meet its Liabilities as they become due (including the obligations contained in
this Agreement and those Related Agreements to which it is a party); and (c) has
or will have sufficient funds or binding credit arrangements available to it to
meet and pay its Liabilities under this Agreement and those Related Agreements
to which it is a party.

4.5 Investment Representation. Buyer is an “accredited investor” (as that term
is defined in Regulation D promulgated under the United States Securities Act of
1933, as amended), and is acquiring the Shares for its own account, for
investment and without any view to resale or distribution of the Shares or any
portion thereof. Buyer acknowledges that the Shares are not registered under the
United States Securities Act of 1933, as amended, any applicable state
securities Laws or any applicable foreign securities Laws and that the Shares
may not be transferred or sold except pursuant to the registration provisions of
the United States Securities Act of 1933, as amended, and/or state securities
Laws and foreign securities Laws as applicable or pursuant to an applicable
exemption therefrom.

4.6 Independent Investigation. Buyer acknowledges that it has made its own
independent investigation, analysis and evaluation of the Company and the
Business and that it has had the opportunity to visit with representatives of
Seller and the Company and discuss the Company and the Business. Buyer
acknowledges that it has had the opportunity to and has undertaken such due
diligence, including an investigation of the Business, as Buyer deems to be
adequate and appropriate. Buyer further acknowledges that it has been provided
with all materials and information requested by Buyer to Buyer’s satisfaction
and, except as specifically set forth in Article 3 herein, Buyer is not relying
on any representations or warranties made by Seller, Company, or its respective
Affiliates, representatives, agents or employees.

4.7 Litigation and Arbitration / HSR Act.

  (a)   To Buyer’s Knowledge, there is no Action now pending or threatened which
seeks to prevent the consummation of the transactions provided for in this
Agreement.

  (b)   The board of directors of Buyer has determined in good faith that the
fair market value of the Shares is less than $50,000,000, such determination
having been made as of the date of this Agreement in accordance with Premerger
Notification Rule 801.10(c)(3) of the HSR Act (16 C.F.R. § 801.10(c)(3)).

ARTICLE 5

ADDITIONAL COVENANTS OF THE PARTIES

5.1 Confidentiality. In addition to the terms, provisions and covenants of the
Confidentiality Agreement dated April 9, 2004 , between Buyer and Seller, which
shall remain in full force and effect until Closing, Buyer acknowledges that, in
the course of its investigations of the Company, Buyer and its representatives
have and will become aware of confidential information and documents of the
Company, and that its use of such confidential information and documents, or
communication of such information to third parties, could be detrimental to the
Company. Buyer covenants that prior to Closing all information and documents
concerning the Company reviewed by Buyer or its representatives in connection
with this Agreement or the transactions contemplated hereby shall be maintained
in confidence and shall not be disclosed or used by Buyer or its representatives
without Seller’ prior written consent, unless Buyer can demonstrate that such
information is (a) otherwise publicly available, (b) in Buyer’s possession
through disclosure by a third party not in violation of any confidentiality or
other agreement or applicable Law, (c) required to be disclosed pursuant to
judicial order, regulation or law, or (d) required to be disclosed by the rules
of a securities exchange on which Buyer may from time to time be listed. In the
event that Buyer or any of its representatives becomes legally compelled to
disclose any such information or documents as referred to in this Section, Buyer
shall, to the extent reasonably practicable, provide Seller with prompt written
notice before such disclosure, in order that Seller may either seek a protective
order, at Seller’s expense, or seek another appropriate remedy preventing or
prohibiting such disclosure or to waive compliance with the provisions of this
Section 5.1 or both. With respect to information and documents related to the
Company, at Seller’s request, in the event that the Closing shall not occur, or
as soon as practicable following termination of this Agreement, (a) Buyer shall,
and shall cause its representatives to, promptly destroy all information and
documents concerning the Company (including any copies thereof or extracts
therefrom); (b) an officer of Buyer shall certify to Seller such destruction;
and (c) Buyer shall and shall cause its representatives to keep confidential and
not use any such information or documents unless required to disclose such
information or documents pursuant to judicial order, regulation or law.

5.2 Covenant Not To Compete and Not to Solicit.

  (a)   Non-Compete. Seller acknowledges and agrees that the Business of the
Company is conducted throughout the United States (the “Territory”), and that
the Company’s reputation and goodwill are an integral part of its business
success throughout the Territory. If Seller deprives Buyer of the Company’s
goodwill or in any manner utilizes its reputation and goodwill in competition
with Buyer, Buyer will be deprived of the benefits it has paid for pursuant to
this Agreement. Accordingly, as an inducement for Buyer to enter into this
Agreement, except as permitted and contemplated by the License Agreement or as
set forth in Schedule B attached hereto, or as expressly set forth in
Sections 5.2 (b) or 5.2(c) below, Seller agrees that for a period ending on the
fourth (4th) anniversary of the Closing Date (the “Non-competition Period”),
Seller shall not without Buyer’s prior written consent, directly or indirectly,
control, manage, finance or operate any Person that directly competes with the
Business in the Territory during the Non-competition Period. In the event the
agreement in this Section 5.2(a) shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the maximum period of time for which it may be enforceable and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.

  (b)   Special Agreement in the Event of Acquisition by Seller. The parties
hereby agree that, in the event Seller acquires through any means an interest in
any Person which constitutes a Significant Competitor (as hereafter defined),
Seller will not be deemed to have violated the provisions of Section 5.2(a)
above, whether or not Buyer’s prior written consent has been obtained, provided
that not later than the six (6) month anniversary of the date on which such
acquisition is consummated, Seller shall have (i) sold to Buyer that portion of
such Person’s business which causes it to be a Significant Competitor, on terms
acceptable to both Buyer and Seller (and Seller hereby agrees that it shall not
sell such interest to any other Person without first offering it for sale to
Buyer and provide Buyer a reasonable time to review and accept or reject such
offer on the most favorable terms and conditions Seller is willing to accept
therefor and, should Seller thereafter agree to accept any more favorable offer,
it shall again first provide Buyer with an opportunity to meet such offer before
selling the interest to any other Person); (ii) subject to the provisions of the
immediately preceding clause, sold to any third party that portion of the
business which causes such Person to be a Significant Competitor; or (c) ceased
to operate that portion of the business which constitutes the Significant
Competitor. The taking of any of these three actions within the required
six-month period shall relieve Seller of any liability under this Agreement as a
result of its acquisition of such interest.

  (c)   Special Agreement in the Event of Acquisition of Seller. The parties
hereby further agree that, in the event Seller agrees to become acquired by any
Person which is, or as to which a portion of its business constitutes, a
Significant Competitor, Seller will not be deemed to have violated the
provisions of Section 5.2(a) above, whether or not Buyer’s prior written consent
has been obtained, provided that (i) within twenty (20) days prior to the
consummation of such acquisition, Seller shall provide Buyer with written notice
thereof, setting forth in reasonable detail the circumstances surrounding such
event or determination; and (ii) at, or on a mutually-agreeable date prior to,
the consummation of such acquisition, the entire unconverted portion of the
Senior Secured 5% Convertible Promissory Note shall be converted into common
stock in accordance with the conversion provisions contained therein, and Seller
shall be entitled to retain all such shares obtained upon conversion of the
Senior Secured 5% Convertible Promissory Note, however (A) the First Amended and
Restated Registration Rights Agreement shall be modified so as to eliminate any
registration or other rights to Seller; (B) the First Amended and Restated
Stockholders’ Agreement shall be modified so as to eliminate any preferential
rights to Seller contained therein (provided, however, that Seller shall
continue to be bound by all of the obligations and restrictions of a common
stockholder under a stockholders’ agreement substantially in the form of that
certain Stockholders’ Agreement dated February 14, 2003 by and among Warburg
Pincus Private Equity VIII, L.P., Les Silver, the Company and the common
stockholders named therein); (C) the License Agreement shall be terminated, and
all rights and interests granted to Seller pursuant to its terms shall be
automatically revoked and revert to Buyer; and (D) the designated representative
of Seller serving on Buyer’s Board of Directors shall resign therefrom.

  (d)   Definition of Significant Competitor. For purposes of this Section 5.2,
the term “Significant Competitor” means any Person which (i) competes, directly
or indirectly, with the Business in the Territory during the Non-competition
Period, and (ii) has, during either of its last two (2) fiscal years prior to
the date of calculation thereof, achieved gross sales from the operation of such
competing business which equal or exceed 10% of the gross sales experienced by
the Company during the fiscal year immediately preceding the Closing.

  (e)   No Solicitation. During the Non-competition Period, except as permitted
by, and in accordance with the applicable provisions of, the License Agreement,
Seller shall not (i) solicit, raid, entice, induce or contact, or attempt to
solicit, raid, entice, induce or contact, any Person that is a customer of the
Company or any of its Affiliates to become a customer of any other Person for
products or services the same as, or competitive with, those products and
services sold, rented, leased, rendered or otherwise made available (or
currently planned to be made available) to customers by the Company and its
Affiliates as of the Closing Date, as well as products and services in any stage
of development by the Company and its Affiliates as of the Closing Date although
not yet commercialized or not generally available, or approach any such Person
for such purpose or authorize the taking of such actions by any other Person or
assist or participate with any such Person in taking such action, or
(ii) solicit, raid, entice, induce or contact, or attempt to solicit, raid,
entice, induce or contact, any Person that currently is or at any time during
such Non-competition Period shall be (or, in the case of termination is at the
time of termination), an employee, agent or consultant of or to the Company or
any of its Affiliates to leave the Company or such Affiliate or do anything from
which Seller is restricted by reason of this Section 5.2(b), and Seller shall
not approach any such employee, agent or consultant for such purpose or
authorize or participate with the taking of such actions by any other Person or
assist or participate with any such Person in taking such action.

  (f)   Confidential Information. Seller acknowledges that the Confidential
Information of the Company is valuable and proprietary to the Company and agrees
not to (and to cause its Affiliates not to), except in accordance with the
applicable provisions of this Agreement and the License Agreement, directly or
indirectly, use, publish, disseminate, describe, summarize or otherwise disclose
any Confidential Information or developments of the Company without the prior
written consent of Buyer, unless Seller can demonstrate that such information is
(a) otherwise publicly available, (b) in Seller’s possession through disclosure
by a third party not in violation of any confidentiality or other agreement or
applicable Law, (c) required to be disclosed pursuant to judicial order,
regulation or law, or (d) required to be disclosed by the rules of a securities
exchange on which Seller may from time to time be listed. For purposes of this
Agreement, the phrase “Confidential Information” means any and all Intellectual
Property (excluding non-proprietary information, know-how or processes otherwise
available to the industry or public or rights obtained pursuant to licenses
associated with software and other Intellectual Property generally made
available for purchase or use by the industry or the public), trade secrets and
other proprietary information owned or used by the Company which is not publicly
available or generally available to the industry, and not obtained by any Person
who, at the time of disclosure, was obligated to maintain such information as
confidential and which specifically relates to matters concerning the Business
of the Company.

  (g)   Remedies. Seller acknowledge that a breach of the covenants contained in
this Section 5.2 will cause irreparable damage to Buyer, the exact amount of
which will be difficult to ascertain, and that the remedies at law for any such
breach will be inadequate. Accordingly, Seller agrees that if Seller or any
Affiliate of Seller breaches the covenants contained in this Section 5.2 in
addition to any other remedy that may be available at law or in equity, Buyer
shall be entitled to specific performance, temporary and permanent injunctive
relief, and other equitable relief, without posting bond or other security.

5.3 Taxes.

  (a)   All transfer, documentary, sales, use, stamp, registration and other
such Taxes and all conveyance fees, recording charges and other fees and charges
(including any penalties and interest) incurred in connection with consummation
of the transactions contemplated by this Agreement shall be paid by Seller when
due, and Seller will, at its own expense, file all necessary Tax Returns and
other documentation with respect to all such Taxes, fees and charges, as
required by applicable Law. Buyer will, and will cause its Affiliates to, join
in the execution of any such Tax Returns and other documentation to the extent
Buyer, or its Affiliates (as applicable), are in agreement with the position
reflected therein.

  (b)   Seller shall prepare or cause to be prepared, and file or cause to be
filed, all Income Tax Returns of the Company for any Taxable year or period
ending on or before the Closing Date that are filed after the Closing Date
(“Pre-Closing Periods”). Such Income Tax Returns will be prepared in a manner
consistent with prior Income Tax Returns of the Company to the extent permitted
by applicable law. Seller shall permit Buyer to review and comment on such
Income Tax Returns prior to filing, and, if requested by Seller, the chief
financial officer of the Company post-Closing, shall sign such Income Tax
Returns to the extent that the Company is in agreement with the positions taken
therein. All other Pre-Closing Period Tax Returns shall be prepared by Buyer but
shall be subject to the review and approval of Seller prior to filing. All Taxes
payable with respect to these Pre-Closing Period Tax Returns shall be borne by
Seller and promptly remitted to Buyer, except to the extent and in such amount
as such Taxes are reflected on the Financial Statements.

  (c)   Buyer shall prepare or cause to be prepared, and file or cause to be
filed, all Tax Returns of the Company for Tax periods commencing prior to the
Closing Date and ending after the Closing Date (a “Straddle Period”) but shall
be subject to the review and approval of Seller prior to filing. Seller shall
pay to the Company within 15 days after the date on which Taxes are paid with
respect to such Straddle Periods an amount equal to the portion of such Taxes
that relates to the Taxable period ending on the Closing Date, to the extent
such Taxes are not reflected on the Financial Statements or paid by the Company
or Seller prior to Closing, including amounts paid in respect of estimated
Taxes. For the purposes of this Section 5.3(c), in the case of any Taxes that
are imposed on a periodic basis and are payable for a Taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax that
relates to the portion of such Taxable period ending on the Closing Date shall
(i) in the case of any Taxes other than Taxes imposed upon or related to income
or receipts, be deemed to be the amount of such Tax for the entire Taxable
period multiplied by a fraction, the numerator of which is the number of days in
the Taxable period ending on the Closing Date, and the denominator of which is
the number of days in the entire taxable period, and (ii) in the case of any Tax
based upon or related to income or receipts, be deemed to be equal to the amount
that would be payable if the relevant Taxable period ended on the Closing Date.
Any credits relating to a Taxable period that begins before and ends after the
Closing Date shall be taken into account as though the relevant Taxable period
ended on the Closing Date. All determinations necessary to give effect to the
allocations described in this Section 5.3(c) shall be made in a manner
consistent with the prior practice of the Company, except for changes required
by Law or fact.

  (d)   Buyer and Seller agree to furnish or cause to be furnished to each
other, upon request, as promptly as practical, such information (including
reasonable access to books and records, Tax Returns and Tax filings) and
assistance as is reasonably necessary for the filing of any Tax Return, the
conduct of any Tax audit, and for the prosecution or defense of any claim, suit
or proceeding relating to any Tax matter. Buyer and Seller shall cooperate with
each other in the conduct of any Tax audit or other Tax proceedings and each
shall execute and deliver such powers of attorney and other documents as are
necessary to carry out the intent of this Section 5.3. Any Tax audit or other
Tax proceeding shall be deemed to be a Third Person claim subject to the
procedures set forth in Article 8 of this Agreement.

5.4 Books and Records. From and after the Closing, Buyer shall provide Seller
and its representatives with reasonable access, for any reasonable purpose,
including but not limited to (a) preparing Tax returns, or (b) defending any
claim in respect of which a notice of claim has been served on Seller, during
normal business hours, to all books and records of the Business, including, but
not limited to, accounting and Tax records, sales and purchase documents, notes,
memoranda, and any other electronic or written data (“Records”) pertaining or
relating to the period prior to the Effective Time. To the extent deemed
necessary by Seller with respect to its other business operations, Seller and
its Affiliates may retain copies of such Records prior to providing the
originals to Buyer, or, as soon as practicable after Closing, Buyer shall
provide to Seller and its Affiliates, at Seller’s expense, copies of all or any
portion of such Records as may reasonably be requested by Seller and its
Affiliates. Unless otherwise consented to in writing by Seller, Buyer shall not,
for a period of 10 years following the date hereof or such longer period as
retention thereof is required by applicable Law, destroy, alter or otherwise
dispose of (or allow the destruction, alteration or disposal of) any of the
Records without first offering to surrender to Seller such Records.

5.5 Public Announcements. Except with the prior written consent of the other
Parties, or as otherwise expressly permitted by this Agreement, or as may
otherwise be reasonably determined by any Party as being required under Law or
by stock exchange regulation, no Party nor any of its representatives will
disclose to any Person any information about the terms of this Agreement or the
transactions contemplated hereunder. In connection with the foregoing, the
Parties agree to work together in good faith to reach a mutual agreement as to
the content and form of any public announcement, press release or similar
publicity. Notwithstanding anything set forth herein to the contrary or in any
other agreement to which a Party hereto is bound, the Parties hereto (and any
employee, representative or other agent of any of the Parties) are hereby
expressly authorized to disclose the “tax treatment” or “tax structure” (as
those terms are defined in Treasury Regulation Section 1.6011-4(c)(8) and (9),
respectively) of the transactions contemplated by this Agreement and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Parties relating to such “tax treatment” or “tax structure” of
the contemplated transactions.

5.6 Filings. Prior to the Closing, the Parties shall proceed expeditiously and
in good faith to make such filings and take such other actions as may be
reasonably necessary to satisfy the conditions to Closing set forth in
Sections 6.2 and 7.2.

5.7 Registration Rights Agreement and Stockholders Agreement. Seller shall
execute the Form of First Amended and Restated Registration Rights Agreement and
the First Amended and Restated Stockholders Agreement prior, and as a condition
precedent, to the issuance of common stock of Buyer upon conversion of the
Senior Secured 5% Convertible Promissory Note or otherwise.

5.8 Further Assurances; Cooperation. From and after the Closing, the Parties
shall do such acts and execute such documents and instruments as may be
reasonably required to make effective the transactions contemplated hereby. On
or after the Closing Date, the Parties shall, on request, cooperate with one
another by furnishing any additional information, executing and delivering any
additional documents and instruments, including contract assignments, and doing
any and all such other things as may be reasonably required by the Parties or
its counsel to consummate or otherwise implement the transactions contemplated
by this Agreement.

ARTICLE 6

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligation of Buyer to proceed with the Closing shall be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent, any of which may be waived in whole or in part by Buyer:

6.1 Accuracy of Representations and Warranties and Performance of Obligations.
All representations and warranties made by Seller in or pursuant to this
Agreement shall be true and correct in all material respects, except (a) for
those representations and warranties that are qualified as to materiality which
shall be true and correct in all respects, on and as of the Closing Date with
the same effect as if such representations and warranties had been made on and
as of the Closing Date, (b) to the extent that any such representation or
warranty by its terms relates to an earlier date, or (c) where and to the extent
that Buyer, as of the Effective Time, had Knowledge of any then-existing pending
claim, breach or violation which would render any of the representations and
warranties contained herein to be false or materially misleading, (provided,
however, that (i) for purposes of determining the Knowledge of Buyer as of the
Effective Time, the Knowledge of Jeff Sweet or any other employee of the Company
shall be disregarded, and (ii) to the extent that Buyer or its representatives
shall have investigated any such pending claim, breach or violation with Seller
or its representatives, and Seller nevertheless makes a representation or
warranty to the contrary, then the Knowledge of Buyer shall be disregarded), and
Seller shall have performed or complied in all material respects with all
covenants, agreements and conditions contained in this Agreement on its part
required to be performed or complied with at or prior to the Closing. Seller
shall deliver to Buyer at the Closing a certificate of an officer of Seller
certifying that the conditions stated in this Section 6.1 have been fulfilled.

6.2 Consents and Approvals. All necessary filings with Government authorities or
any other third parties shall have been made and any necessary authorizations,
consents or approvals required from such authorities or third parties shall have
been obtained and shall be in full force and effect.

6.3 No Litigation or Contrary Judgment. On the Closing Date there shall exist no
valid Order, statute, rule, regulation, executive order, stay, decree, judgment
or injunction which prohibits or prevents the consummation of the transactions
contemplated by this Agreement that has not been vacated, dismissed or withdrawn
by the Effective Time.

6.4 No Material Adverse Effect. There shall not have occurred, and/or be
continuing at Closing, any event that has had or reasonably would be expected to
have a Material Adverse Effect.

6.5 Deliveries of Seller at Closing. At Closing, Seller shall deliver or cause
to be made available to Buyer the following original completed documents, dated
as of the Closing Date (unless otherwise noted below), executed by Seller and/or
Seller’s Affiliates or Seller’s Counsel who are parties thereto, as applicable:

  (a)   certificates representing all the Shares, free and clear of all Liens
(other than legends or other restrictions solely evidencing the restricted
nature of such Shares pursuant to applicable state and federal securities laws)
duly endorsed to Buyer or in blank or accompanied by duly executed stock powers;

  (b)   the Related Agreements to be executed by Seller;

(c) Seller’s Counsel Legal Opinion;

  (d)   the written resignation of each member of the Board of Directors, and
each officer of the Company, with the exception of Jeff Sweet;

  (e)   all required consents and approvals from Governments and third parties
under Material Contracts;

  (f)   the written release of all Liens (other than Permitted Liens) relating
to the assets of the Company and the Shares executed by the holder of or parties
to each such Lien. The releases shall be reasonably satisfactory in substance
and form to Buyer and its counsel;

  (g)   a Certificate, signed by the Secretary of Seller, attaching thereto (and
certifying as true and correct) copies of resolutions duly passed by the Board
of Directors of Seller approving the entry of Seller into this Agreement and the
Related Agreements to which it is a party, and authorizing Seller to perform all
of Seller’s obligations thereunder;

  (h)   a Certificate, signed by the Secretary of the Company, attaching thereto
(and certifying as true and correct) copies of (i) the Articles of Incorporation
of the Company, including all amendments thereto, and (ii) the Bylaws of the
Company, including all amendments thereto;

  (i)   a certificate of good standing of the Company, dated within five
Business Days of the Closing Date, from the Minnesota Secretary of State (and of
the Secretary of State of each State in which the Company is qualified or
licensed as a foreign corporation);

  (j)   all share transfer books, minute books and other corporate records of
the Company as contemplated by Section 3.29;

  (k)   the certificate required of an officer of Seller pursuant to
Section 6.1.

  (l)   canceled certificates, agreements and/or other evidence of the
redemption or other payment by the Company in respect of all previously issued
and outstanding securities of the Company other than the Shares, including all
options and warrants;

  (m)   a release from JPMorgan Chase Bank, releasing the Seller and the Company
from any and all any liens and security interests granted by the Seller and the
Company in the properties of and capital stock of the Company to secure any and
all of the obligations under the Amended and Restated Credit Agreement dated as
of January 16, 2004;

  (n)   evidence of a wire transfer in the amount of Two Hundred and Five
Thousand Dollars ($205,000) into the Company’s operating account at or prior to
the Closing; and

  (o)   such other customary documents, instruments or certificates as shall be
reasonably requested by Buyer and as shall be consistent with the terms of this
Agreement.

ARTICLE 7

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

The obligation of Seller to proceed with the Closing shall be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent, any of which may be waived in whole or in part by Seller:

7.1 Accuracy of Representations and Warranties and Performance of Obligations.
All representations and warranties made by Buyer in this Agreement shall be true
and correct in all material respects, except for those representations and
warranties that are qualified as to materiality which shall be true and correct
in all respects, on and as of the Closing Date with the same effect as if such
representations and warranties had been made on and as of the Closing Date,
except to the extent that any such representation or warranty by its terms
relates to an earlier date, and Buyer shall have performed or complied in all
material respects with all covenants, agreements and conditions contained in
this Agreement on its part required to be performed or complied with at or prior
to the Closing. Buyer shall deliver to Seller at the Closing a certificate of an
officer of Buyer certifying that the conditions stated in this Section 7.1 have
been fulfilled.

7.2 Consents and Approvals. All required filings with Government authorities or
any other third parties shall have been made and any necessary authorizations,
consents or approvals required from such authorities or third parties shall have
been obtained and shall be in full force and effect.

7.3 No Litigation or Contrary Judgment. On the Closing Date there shall exist no
valid Order, statute, rule regulation, executive order, stay decree, judgment or
injunction which prohibits or prevents the consummation of the transactions
contemplated by this Agreement that has not been vacated, dismissed or withdrawn
by the Effective Time.

7.4 Deliveries of Buyer at Closing. At Closing Buyer shall deliver or cause to
be delivered to Seller the following original completed documents, dated as of
the Closing Date (unless otherwise noted below), executed by all parties thereto
other than Seller, the Company, Seller’s Affiliates or Seller’s Counsel:

  (a)   the Senior Secured 5% Convertible Promissory Note;

(b) the other Related Agreements;

(c) Buyer’s Counsel Legal Opinion;

  (d)   a certificate of good standing of Buyer, dated within five Business Days
of the Closing Date, from the Delaware Secretary of State; and

such other customary documents, instruments or certificates as shall be
reasonably requested by Seller and as shall be consistent with the terms of this
Agreement.

ARTICLE 8

INDEMNIFICATION

8.1 Survival of Representations and Warranties. All of the representations and
warranties made by any Party in this Agreement, the Disclosure Letter or any
certificates or documents delivered hereunder shall survive the Closing Date and
consummation of the transaction contemplated hereby and will continue for a
period of eighteen (18) months following the Closing Date at which time they
shall expire unless and to the extent a notice of claim is made prior to such
expiration with respect to any breach of such representation or warranty
occurring prior to such expiration and set out in such notice of claim;
provided, however, that the representations and warranties contained in (a)
Section 3.1 (Corporate Existence and Power), Section 3.2 (Valid and Enforceable
Agreement; Authorization; Non-Contravention), Section 3.3 (Capitalization and
Ownership), Section 4.1 (Corporate Existence and Power), and Section 4.2 (Valid
and Enforceable Agreement) shall survive the Closing Date without any time
limit, (b) Section 3.7 (Taxes), Section 3.26 (Employee Benefit Matters), and
Section 3.28 (Product Liability Claims) shall survive the Closing Date until the
expiration of the applicable statutes of limitation, and (c) Section 3.18
(Environmental Matters) shall survive the Closing Date for a period of three
(3) years following the Closing Date. No Indemnified Party shall be entitled to
indemnification for breach of any representation and warranty unless a notice of
claim of such breach has been given to the Indemnifying Party within the period
of survival of such representation and warranty as set forth herein.

8.2 Indemnification by Seller. Subject to the terms and conditions of this
Article 8, including the limitations set forth in Section 8.6 below from and
after Closing, Seller shall indemnify and hold harmless Buyer and its Affiliates
(including, from and after the Closing, the Company and its Affiliates) and the
shareholders, directors, officers, partners, employees, successors, assigns,
representatives and agents of each of them in their capacities as such
(collectively, the “Buyer Indemnified Persons”), from and against, and Seller
waives any claim for contribution or indemnity against the Company and its
Affiliates with respect to, any and all claims, losses, monetary damages,
Liabilities, fines, fees, penalties, expenses or costs (“Losses”), plus
reasonable attorneys’ fees and expenses, including court costs and expert
witness fees and costs, incurred in connection with Losses and/or enforcement of
this Agreement (in all, “Indemnified Losses”) incurred or to be incurred by any
of them resulting from or arising out of:

  (a)   the breach of any agreement, covenant, representation, warranty, or
other obligation of Seller made or incurred under or pursuant to this Agreement
or any Related Agreement, except where and to the extent that Buyer, as of the
Effective Time, had Knowledge of any then-existing pending claim, breach or
violation which would render any of such representations and warranties to be
false or materially misleading (provided, however, that (i) for purposes of
determining the Knowledge of Buyer as of the Effective Time, the Knowledge of
Jeff Sweet or any other employee of the Company shall be disregarded, and
(ii) to the extent that Buyer or its representatives shall have investigated any
such pending claim, breach or violation with Seller or its representatives, and
Seller nevertheless makes a representation or warranty to the contrary, then the
Knowledge of Buyer shall be disregarded); and

  (b)   transaction costs and expenses incurred by or on behalf of the Company
or Seller in connection with this Agreement and the transactions contemplated
hereby, including without limitation, fees and expenses relating to any
investment banker, broker, lawyer or accountant.

8.3 Indemnification by Buyer. Subject to the terms and conditions of this
Article 8, Buyer shall indemnify and hold harmless each of Seller and its
Affiliates and the shareholders, directors, officers, partners, employees,
successors, assigns, representatives and agents of each of them in their
capacities as such (the “Seller Indemnified Persons”) from and against any and
all Indemnified Losses incurred or to be incurred by any of them, resulting from
or arising out of:

  (a)   the breach of any agreement, covenant, representation (excluding
Section 4.6), warranty (excluding Section 4.6), or other obligation of Buyer
made or incurred under this Agreement or any Related Agreements;

  (b)   the conduct of the business of the Company from and after the Effective
Time; and

  (c)   transaction costs and expenses incurred by or on behalf of Buyer in
connection with this Agreement and the transactions contemplated hereby,
including without limitation, fees and expenses relating to any investment
banker, broker, lawyer or accountant.

8.4 Notice of Claim. In the event that Buyer seeks indemnification on behalf of
a Buyer Indemnified Person, or Seller seeks indemnification on behalf of a
Seller Indemnified Person, such Party seeking indemnification (the “Indemnified
Party”) shall give reasonably prompt written notice to the indemnifying Party
(the “Indemnifying Party”) specifying in reasonable detail the facts
constituting the basis for such claim and the amount, to the extent known, of
the claim asserted; provided, however, that the right of a Person to be
indemnified hereunder shall not be adversely affected by a failure to give such
notice unless, and then only to the extent that, an Indemnifying Party is
actually materially damaged thereby. Subject to the terms hereof, the
Indemnifying Party shall pay the amount of any valid claim not more than 30 days
after the Indemnified Party provides notice to the Indemnifying Party of such
amount.

8.5 Right to Contest Claims of Third Persons. If an Indemnified Party is
entitled to indemnification hereunder because of a claim asserted by any
claimant (other than an indemnified Person hereunder) (“Third Person”), the
Indemnified Party shall give the Indemnifying Party reasonably prompt notice
thereof after such assertion is actually known to the Indemnified Party;
provided, however, that the right of a Person to be indemnified hereunder in
respect of claims made by a Third Person shall not be adversely affected by a
failure to give such notice unless, and then only to the extent that, an
Indemnifying Party is actually materially prejudiced thereby. The Indemnifying
Party shall have the right, upon written notice to the Indemnified Party, and
using counsel reasonably satisfactory to the Indemnified Party, to investigate,
contest, or settle the claim alleged by such Third Person (a “Third-Person
Claim”), provided that the Indemnifying Party has unconditionally acknowledged
to the Indemnified Party in writing its obligation to indemnify the persons to
be indemnified hereunder with respect to such Third Person Claim and to
discharge (and does in fact so discharge) any cost or expense arising out of
such investigation, contest or settlement and such Indemnifying Party has
presented evidence reasonably satisfactory to the Indemnified Party of its
ability to discharge the obligations, including without limitation by
establishment of an escrow account. The Indemnified Party may thereafter
participate in (but not control) the defense of any such Third Person Claim with
its own counsel at its own expense, unless separate representation is necessary
to avoid a conflict of interest, in which case such representation shall be at
the expense of the Indemnifying Party. Unless and until the Indemnifying Party
so acknowledges its obligation to indemnify, the Indemnified Party shall have
the right, at its option, to assume and control defense of the matter and to
look to the Indemnifying Party for the full amount of the reasonable costs of
defense. The failure of the Indemnifying Party to respond in writing to the
aforesaid notice of the Indemnified Party with respect to such Third Person
Claim within 20 days after receipt thereof shall be deemed an irrevocable
election not to defend the same. If the Indemnifying Party does not so
acknowledge its obligation to indemnify and assume the defense of any such Third
Person Claim, (a) the Indemnified Party may defend against such claim using
counsel of its choice, in such manner as it may reasonably deem appropriate,
including, but not limited to, settling such claim, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may
reasonably deem appropriate, and (b) the Indemnifying Party may participate in
(but not control) the defense of such action, with its own counsel at its own
expense. If the Indemnifying Party thereafter seeks to question the manner in
which the Indemnified Party defended such Third Person Claim or the amount or
nature of any such settlement, the Indemnifying Party shall have the burden to
prove by clear and convincing evidence that conduct of the Indemnified Party in
the defense and/or settlement of such Third Person Claim constituted gross
negligence or willful misconduct. The Parties shall make available to each other
all relevant information in its possession relating to any such Third Person
Claim and shall cooperate in the defense thereof.

8.6 Limitations on Indemnity.

  (a)   Seller shall have no obligation to indemnify Buyer Indemnified Persons
in respect of Indemnified Losses resulting from or arising out of breaches of
the representations and warranties contained in Article 3 of this Agreement
until all Indemnified Losses exceed $500,000 in the aggregate, and then only for
those Indemnified Losses in excess of $250,000 (except for Indemnified Losses
resulting from or arising under Section 3.1 (Corporate Existence and Power),
Section 3.2 (Valid and Enforceable Agreement, Authorization; Non-contravention),
Section 3.3 (Capitalization and Ownership), Section 3.7 (Taxes), and
Section 3.34 (Brokers, Finders), as to which the foregoing $500,000 limitation
shall not apply).

  (b)   Seller shall have no obligation to indemnify Buyer Indemnified Persons
in respect of Indemnified Losses hereunder in excess of the Purchase Price in
the aggregate (except for Indemnified Losses resulting from or arising under
Section 3.1 (Corporate Existence and Power), Section 3.2 (Valid and Enforceable
Agreement, Authorization; Non-contravention), Section 3.3 (Capitalization and
Ownership), Section 3.7 (Taxes), and Section 3.34 (Brokers, Finders), as to
which the foregoing limitation shall not apply).

  (c)   Buyer shall have no obligation to indemnify Seller Indemnified Persons
in respect of Indemnified Losses resulting from or arising out of breaches of
the representations and warranties contained in Article 4 of this Agreement
until all Indemnified Losses exceed $500,000 in the aggregate, and then only for
those Indemnified Losses in excess of $250,000 (except for Indemnified Losses
resulting from or arising under Section 4.1 (Corporate Existence and Power),
Section 4.2 (Valid and Enforceable Agreement, Authorization), and Section 4.3
(Brokers, Finders), as to which the foregoing $500,000 limitation shall not
apply).

  (d)   Buyer shall have no obligation to indemnify Seller Indemnified Persons
in respect of Indemnified Losses hereunder in excess of the amount of the
Purchase Price in the aggregate (except for Indemnified Losses resulting from or
arising under Section 4.1 (Corporate Existence and Power), Section 4.2 (Valid
and Enforceable Agreement, Authorization), and Section 4.3 (Brokers, Finders),
as to which the foregoing limitation shall not apply).

  (e)   In the event that Seller becomes liable to indemnify any Buyer
Indemnified Person for Losses under Section 8.2, any indemnified Losses shall be
payable, at the option of Seller, either in cash and/or by:

  (i)   surrender (i.e., transfer of ownership) to Buyer of shares of Buyer
common stock issued as a result of the conversion of the Senior Secured 5%
Convertible Promissory Note (“Buyer Convertible Stock”), such surrender/transfer
to be made on a dollar-for-dollar basis (with Buyer Convertible Stock valued at
the greater of its par value, book value, liquidation value at the time of
issuance, or at the rate such Buyer Convertible Stock was valued for conversion
purposes at the time of conversion of the Senior Secured 5% Convertible
Promissory Note) in accordance with the amount of Losses to be indemnified;
and/or

  (ii)   surrender (i.e., cancellation) of indebtedness otherwise owed to Seller
under the Senior Secured 5% Convertible Promissory Note, such
surrender/cancellation to be made as a set-off against a claim for damages on a
dollar-for-dollar basis in accordance with the amount of Losses to be
indemnified.

  (f)   Notwithstanding anything in this Agreement to the contrary, no
Liability, obligation, contract or other matter shall constitute a breach of any
representation or warranty of Seller or entitle a Buyer Indemnified Person to
indemnification hereunder:

  (i)   if the Liability, obligation, contract or other matter is set out in the
Disclosure Letter; or

  (ii)   to the extent that the Liability, obligation, contract or other matter
was provided for, or specifically referred to, in the Financial Statements; or

  (iii)   where and to the extent that Buyer, as of the Effective Time, had
Knowledge of any then-existing pending claim, breach or violation which would
render any of such representations and warranties to be false or materially
misleading (provided, however, that (i) for purposes of determining the
Knowledge of Buyer as of the Effective Time, the Knowledge of Jeff Sweet or any
other employee of the Company shall be disregarded, and (ii) to the extent that
Buyer or its representatives shall have investigated any such pending claim,
breach or violation with Seller or its representatives, and Seller nevertheless
makes a representation or warranty to the contrary, then the Knowledge of Buyer
shall be disregarded).

  (g)   In the event that Buyer shall be or become entitled to receive any
amounts as indemnification in accordance with the provisions of this Section 8,
it shall be obligated, without limiting any other rights or remedies of Buyer
hereunder or under any Schedule or Exhibit, to set off such amounts against, and
to the extent reduce dollar for dollar its obligations to make payments in
respect of the principal balance of, and all accrued but unpaid interest under,
the Senior Secured Convertible 5% Promissory Note, and Buyer may only seek
payment of any amount in cash from Seller in respect of any claim for which
indemnification is owed hereunder to the extent that such amount exceeds the
aggregate amount of principal and accrued but unpaid interest which is then due
and payable under the Senior Secured Convertible 5% Promissory Note.
Notwithstanding the foregoing, or anything to the contrary in any Exhibit
hereto, in the event that any matter shall arise hereunder or thereunder which
requires or permits Buyer to set off any amount against the Senior Secured
Convertible 5% Promissory Note as indemnity or otherwise, Seller shall have the
right to make such payment directly to Buyer, and, to the extent that Seller
actually pays such amount to Buyer, the outstanding principal balance of the
Senior Secured Convertible 5% Promissory Note shall not be deemed to have been
reduced by all or any portion of the amount of such indemnity or set off, and
shall be otherwise unaffected for all purposes.

  (h)   For the purposes of determining the amount of any claim for
indemnification that is to be paid by an Indemnifying Party to an Indemnified
Party, the Parties hereby agree that, notwithstanding any requirement of this
Agreement that a misrepresentation, breach of warranty or non-fulfillment of any
covenant or agreement has in fact occurred, any proper claim for indemnification
with respect thereto (i.e., fulfilling such requirements) by an Indemnified
Party against an Indemnifying Party shall not be measured and paid by whether or
not a Material Adverse Effect has, in fact, occurred, but shall be paid in full
subject to the provisions and limitations contained in this Section 8.6
(including the application of any applicable baskets, caps and deductible
amounts).

8.7 Characterization of Indemnity Payments. Any indemnification payments,
offsets or credits made pursuant to this Agreement shall be considered, to the
extent permissible under Law, as adjustments to the Purchase Price for all Tax
purposes.

8.8 Exclusive Remedy. In the absence of fraud, the indemnification provisions
set forth in this Article 8 shall provide the exclusive remedy for breaches of
any covenant, agreement, representation or warranty set forth in this Agreement.
Notwithstanding the foregoing, each Party shall be entitled to such equitable
remedies to which such Party may otherwise be entitled, including, without
limitation, the ability to apply to any court of competent jurisdiction for
specific performance or injunctive or other equitable relief.

8.9 Other Limitations. Notwithstanding anything to the contrary contained
herein, no Party shall be liable to or otherwise responsible to any other Party
hereto or any Affiliate of any other Party for consequential, incidental,
punitive or special damages or for diminution in value or lost profits that
arise out of or relate to this Agreement or any Related Agreement or the
performance or breach hereof or any Liability retained or assumed hereunder or
thereunder.

ARTICLE 9

MISCELLANEOUS PROVISIONS

9.1 Notice. All notices, requests, demands, and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given (a) when delivered in person, (b) by facsimile, receipt
confirmed, (c) on the next Business Day when sent by overnight courier, or
(d) on the second succeeding Business Day when sent by registered or certified
mail (postage prepaid, return receipt requested), to the respective Parties at
the following addresses (or at such other address for a Party as shall be
specified by like notice):

If to Buyer:

         
Mobile Productivity, Inc.
        4695 MacArthur Court, Suite 1100

Newport Beach, CA 92660 Telephone: 619.501.8886 Telecopier: 619.501.8008 Attn:
  Les Silver

President and CEO

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

         
August Law Group, P.C.
        19200 Von Karman, Suite 500

Irvine, CA 92612 Telephone: 949.752.7772 Telecopier: 949.752.7776 Attn:
  Kenneth S. August, Esq.

 
  President

If to Seller:

         
CSK Auto, Inc. 645 E. Missouri Suite 450 Phoenix, AZ 85012 Telephone:
602.631.7044
        Telecopier: 602.234.1713

Attn:
  Martin G. Fraser

 
  President and COO

With a copy to:

 
CSK Auto, Inc. 645 E. Missouri Suite 450 Phoenix, AZ 85012 Telephone:
602.631.7258 Telecopier: 602.264.0495 Attn:Lon B. Novatt, Esq. Senior VP, Chief
Administrative Officer and General Counsel
And a copy (which shall not constitute notice) to:

Bryan Cave LLP
Two North Central Avenue
Suite 2200
Phoenix, AZ 85004
Telephone: 602.364.7451
Telecopier: 602.364.7070
Attn: Frank M. Placenti, Esq.

9.2 Termination. This Agreement may be terminated at any time prior to the
Effective Time only by mutual written consent of Seller and Buyer. In the event
of any termination of this Agreement as provided in this Section 9.2, this
Agreement shall forthwith become wholly void and of no further force and effect
and there shall be no Liability on the part of Buyer or Seller, except that the
provisions of Section 5.1 shall survive any such termination of this Agreement.

9.3 Entire Agreement. This Agreement and the Schedules and Exhibits hereto
embody the entire agreement and understanding of the Parties hereto with respect
to the subject matter hereof, and supersede all prior and contemporaneous
agreements and understandings relative to such subject matter, including but not
limited to the Summary of Potential Terms of Acquisition.

9.4 Amendment and Modification. To the extent permitted by applicable Law, this
Agreement shall be amended, modified or supplemented only by a written agreement
between Buyer and Seller.

9.5 Assignment; Binding Agreement. This Agreement and various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the Parties hereto and their respective successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be transferred, delegated, or assigned (by operation of law or
otherwise), by the Parties hereto without the prior written consent of the other
Parties, except that Seller shall have the right to assign its rights to receive
payments, but not its obligations, hereunder.

9.6 Waiver of Compliance; Consents. Any failure of either Seller, on the one
hand, or Buyer, on the other hand, to comply with any obligation, covenant,
agreement or condition herein may be waived by Buyer, on the one hand, or
Seller, on the other hand, only by a written instrument signed by the Party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any Party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
9.6.

9.7 Expenses. All costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Party incurring
such costs or expenses.

9.8 Equitable Relief. The Parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached.
Accordingly, the Parties further agree that each Party shall be entitled to an
injunction or restraining order to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
right or remedy to which such Party may be entitled under this Agreement, at Law
or in equity.

9.9 Counterparts, Facsimiles. This Agreement may be executed in multiple
counterparts, and on separate counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Facsimiles containing original signatures shall be deemed for all
purposes to be originally signed copies of the documents which are the subject
of such facsimiles.

9.10 Severability. Subject to the provisions set forth in Section 5.2 regarding
judicial modification of the covenant not to compete, if any other provision of
this Agreement shall be determined to be contrary to Law and unenforceable by
any court of Law, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.

9.11 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of Arizona,
without reference to its choice of law rules.

9.12 No Third Party Beneficiaries or Other Rights. Nothing herein shall grant to
or create in any Person not a Party hereto, or any such Person’s dependents or
heirs, any right to any benefits hereunder, and no such Party shall be entitled
to sue any Party to this Agreement with respect thereto. The representations and
warranties contained in this Agreement are made for purposes of this Agreement
only and shall not be construed to confer any additional rights on the Parties
under applicable state and federal securities laws.

9.13 Submission to Jurisdiction. Each of the Parties hereto irrevocably submits
to the exclusive jurisdiction of (a) the circuit courts located in Maricopa
County, Arizona, and (b) the United States District Court for the District of
Arizona for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Each of the Parties
agrees to commence any action, suit or proceeding relating hereto in the United
States District Court for the District of Arizona or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons, in
the circuit courts located in Maricopa County, Arizona. Each of the Parties
further agrees that service of any process, summons, notice or document by
United States registered mail to such Party’s respective address set forth above
shall be effective service of process for any action, suit or proceeding in
Arizona with respect to any matters to which it has submitted to jurisdiction in
this Section 9.13. Each of the Parties irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby in (i) the circuit
courts located in Maricopa County, Arizona, or (ii) the United States District
Court for the District of Arizona, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum or to raise any similar defense or objection.

9.14 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (c) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS IN THIS SECTION 9.14.

9.15 Further Assurances. Each party hereto shall execute and/or cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Effective Date) for the purpose of carrying out or
evidencing any of the transactions contemplated herein.

IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed as of the date first above written.

MOBILE PRODUCTIVITY, INC.

     
By:
 

 
   
Name:
Title:
  Les Silver
President

CSK AUTO, INC.

By:
Name:
Title:

4