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EXHIBIT 10.1

 

 

ASSET PURCHASE AGREEMENT

 

 

AMONG

 

 

NEOFORMA, INC.,

 

 

NEOCARS CORPORATION

 

 

AND

 

 

I-MANY, INC.

 

 

JULY 18, 2003

 

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TABLE OF CONTENTS

 

Page

Article 1     

   Definitions    1

1.1  

   Certain Defined Terms    1

Article 2

   Purchase and Sale of Purchased Assets    11

2.1  

   Agreement to Sell and Purchase    11

2.2  

   Purchased Assets Defined    11

2.3  

   Excluded Assets Defined    13

2.4  

   Asset Transfer; Passage of Title; Delivery    13

2.5  

   Assumption of Specified Liabilities; Exclusion of Liabilities    13

2.6  

   No Other Liabilities Assumed    14

2.7  

   Purchase Price and Escrow    15

2.8  

   Closing    16

2.9  -

   Closing Deliveries by Seller    16

2.10

   Closing Deliveries by Parent and Buyer    17

2.11

   Securities Law Compliance    18

2.12

   Seller Options and Seller Warrants Not Assumed    18

Article 3

   Representations and Warranties of Seller    18

3.1  

   Organization and Good Standing    18

3.2  

   Power, Authorization and Validity    18

3.3  

   No Conflict    19

3.4  

   Litigation    19

3.5  

   Taxes    20

3.6  

   Seller Exchange Act Documents; Seller Financial Statements    20

3.7  

   Absence of Certain Changes    21

3.8  

   Title to and Condition of Purchased Assets; Sufficiency of Assets; Warranties
   22

3.9  

   Contracts and Commitments/Licenses and Permits    23

3.10

   No Default; No Restrictions    24

3.11

   Intellectual Property    24

3.12

   Compliance with Laws    28

3.13

   Certain Transactions and Agreements    28

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TABLE OF CONTENTS

 

(continued)

 

Page

3.14

   Employee Matters    28

3.15

   No Brokers    30

3.16

   Books and Records    30

3.17

   [Intentionally Omitted]    31

3.18

   Fairness of Consideration    31

3.19

   Privacy    31

3.20

   No Other Negotiations    31

3.21

   Disclosure    31

3.22

   Seller Customers    32

3.23

   Environmental Compliance    32

3.24

   Accounts Receivable    32

3.25

   Investment Representations    33

Article 4     

   Representations and Warranties of Parent and Buyer    33

4.1  

   Organization and Good Standing    34

4.2  

   Power; Authorization and Validity    34

4.3  

   Parent Exchange Act Documents    34

4.4  

   Capitalization    35

4.5  

   No Conflict    36

4.6  

   Litigation    36

4.7  

   No Brokers    36

4.8  

   Valid Issuance of Stock    36

4.9  

   Nasdaq Requirements    36

4.10

   Absence of Certain Changes    36

4.11

   Registration Obligations    36

Article 5

   Other Covenants and Agreements    37

5.1  

   Advice of Changes    37

5.2  

   Conduct of Business Prior to the Closing    37

5.3  

   Permit; Fairness Hearing    39

5.4  

   Seller Stockholder Meeting    40

5.5  

   No Other Negotiations    40

 

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TABLE OF CONTENTS

 

(continued)

 

Page

5.6      Access to Information; Right to Use Purchased Assets    42 5.7     
Employment Matters    42 5.8      Satisfaction of Conditions Precedent    43
5.9      Public Disclosure    44 5.10    Further Actions    44 5.11    Consents;
Cooperation    44 5.12    Lock-Up of Guaranteed Shares    48 5.13   
Confidentiality.    50 5.14    Nasdaq Listing    50 5.15    Post-Closing
Retention    50 5.16    Information Provided    51 5.17    No Solicitation of
Vote by Seller    51 5.18    Non-Compete    51 5.19    Blue Sky Laws    52 5.20
   Furnishing of Outstanding Business Proposals    52 5.21    Purchase Price
Allocation    52 5.22    Transfer of Additional Seller Technology    52 5.23   
Collection of Accounts Receivable    52 5.24    Performance of Contractual
Obligations    52 5.25    Cooperation with Respect to Unallocated Assets    53
Article 6         Tax Matters    53 6.1      Taxes Relating to Sale of Purchased
Assets    53 6.2      Property Taxes    53 6.3      Other Taxes    53 6.4     
Treatment of Indemnity Payments    53 6.5      Cooperation    53 Article 7   
Indemnification    54 7.1      Survival of Representations and Warranties and
Indemnification Obligations and Indemnification Obligations    54 7.2     
Indemnification Obligations of Seller    54 7.3      Indemnification Obligations
of Parent    55

 

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TABLE OF CONTENTS

 

(continued)

 

Page

7.4    

   Limitations on Indemnification Obligations    55

7.5    

   Indemnification Procedures    57

7.6    

   Survival of Claims    59

Article 8       

   Conditions to Closing    59

8.1    

   Conditions to Obligations of Seller    59

8.2    

   Conditions to Obligations of Parent and Buyer    60

Article 9

   Termination of Agreement    62

9.1    

   Termination by Mutual Consent    62

9.2    

   Unilateral Termination    62

9.3    

   Notice of Termination; Effect of Termination    63

9.4    

   Fees    63

9.5    

   Liquidated Damages    64

Article 10

   General Provisions    64

10.1  

   Dispute Resolution    64

10.2  

   Expenses    65

10.3  

   Notices    65

10.4  

   Headings    66

10.5  

   Severability    66

10.6  

   Entire Agreement    66

10.7  

   Assignment    66

10.8  

   No Third-Party Beneficiaries    66

10.9  

   Amendment; Waiver    67

10.10

   Counterparts    67

10.11

   Construction of Agreement    67

10.12

   Attorneys’ Fees    67

10.13

   Specific Performance    67

10.14

   Passage of Title and Risk of Loss    67

10.15

   Governing Law; Forum    67

 

 

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TABLE OF CONTENTS

 

 

EXHIBITS:

 

Exhibit A-1:   Perpetual Software Distribution and License Agreement Exhibit
A-2:   Term-Limited Software Distribution and License Agreement Exhibit B:  
Escrow Agreement Exhibit C:   Earnout Schedule Exhibit D:   Bill of Sale and
Assumption Agreement Exhibit E:   Patent Assignment Exhibit F:   Copyright
Assignment Exhibit G:   Mark Assignment

 

 

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ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
July 18, 2003 (the “Agreement Date”) by and among Neoforma, Inc., a Delaware
corporation (“Parent”), Neocars Corporation, a Delaware corporation that is a
wholly-owned subsidiary of Parent (“Buyer”), and I-many, Inc., a Delaware
corporation (“Seller”).

 

RECITALS

 

A.    Seller, among other things, is engaged in the business of providing
software and related services related to the management of contractual
relationships in the Life Sciences Market (as defined below) (the “Business”).

 

B.    Seller desires to sell and assign to Buyer, and Buyer desires to purchase
and acquire from Seller, certain assets related to the Business and Buyer agrees
to assume certain of the liabilities of Seller related to the Business on the
terms and conditions set forth in this Agreement.

 

C.    Concurrently with the execution of this Agreement, Parent, Buyer and
Seller are entering into a Perpetual Software Distribution and License Agreement
and a Term-Limited Software Distribution and License Agreement (the “Software
Distribution and License Agreements”) in the forms attached hereto as Exhibit
A-1 and Exhibit A-2, pursuant to which Seller and Parent have agreed to license
and/or re-sell certain products and services related to the Business and not
compete against one another in specified industries and product categories.

 

D.    In connection with this Agreement, Parent, Buyer and Seller are entering
into an escrow agreement (the “Escrow Agreement”) in the form attached hereto as
Exhibit B pursuant to which a portion of the Purchase Price (as defined below)
to be paid by Buyer hereunder will be held to secure Seller’s indemnification
obligations hereunder.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set
forth herein, the parties hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1    Certain Defined Terms.    As used in this Agreement, the following terms
shall have the following meanings:

 

“AAA” has the meaning set forth in Section 10.1.

 

“AAA Rules” has the meaning set forth in Section 10.1.

 

“Accounts Receivable” means all trade accounts receivable and any other
evidences of indebtedness of and rights to receive payment and the full benefit
of all security for such accounts or rights to payment, in each case that are
related to the Business and that would be characterized as accounts receivable
in accordance with GAAP.

 

“actual knowledge” with respect to any fact, circumstance, event or other matter
in question means (i) when used in Section 3.11 of this Agreement, the knowledge
of the Seller Knowledge Parties of such fact, circumstance, event or other
matter after reasonable inquiry of (A) all employees of Seller and

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(B) Seller’s outside legal counsel for intellectual property matters and (ii)
when used other than in Section 3.11 of this Agreement, the actual knowledge
(without any requirement of reasonable inquiry) of the Seller Knowledge Parties
of such fact, circumstance or other matter.

 

“Acquisition Transaction” has the meaning set forth in Section 3.20.

 

“Affiliate” means, with respect to any specified person, any other person that
directly or indirectly controls, is controlled by, or is under common control
with, such specified person (where, for purposes of this definition,“control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of stock, as an officer, director, trustee or executor, by contract or
otherwise).

 

“Agreement” and “Agreement Date” have the respective meanings set forth in the
introductory paragraph of this Agreement.

 

“Applicable Legal Requirements” means, collectively, all foreign, federal,
state, local or other laws, statutes, constitutions, resolutions, ordinances,
codes, edicts, decrees, orders, writs, injunctions, awards, judgments, rules,
regulations, rulings or requirements issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Authority that is applicable to the subject entity and its
properties, assets and business.

 

“Asset Purchase” has the meaning set forth in Section 3.2(a).

 

“Assigned Agreements” has the meaning set forth in Section 2.2(g).

 

“Assumed Liabilities” has the meaning set forth in Section 2.5.

 

“Bill of Sale and Assumption Agreement” has the meaning set forth in Section
2.9(a).

 

“Books and Records” means, to the extent not already included in the
Documentation, all books, records, books of account, financial records,
financial statements, files, data and papers, whether in hard copy or computer
format, used or held for use by Seller in connection with the conduct of the
Business (other than the corporate minute books of Seller), including, to the
extent used in connection with the Business, engineering information, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, lists of present and former personnel,
and any Tax Return relating exclusively to any Tax imposed on the Purchased
Assets.

 

“Business” has the meaning set forth in Paragraph A of the Recitals to this
Agreement.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks are
open for ordinary banking business in California.

 

“BusinessEmployees” are those officers and employees of Seller listed on
Schedule 1.1(a) attached hereto who dedicate a substantial portion of their
working hours towards the Business, and consultants and independent contractors
listed on Schedule 1.1(b) attached hereto who perform services in connection
with the Business.

 

“Buyer Ancillary Agreements” means the Escrow Agreement, the Software
Distribution and License Agreements, the Bill of Sale and Assumption Agreement
and all other assumptions, certificates and documents that Buyer is required to
execute and deliver pursuant to this Agreement.

 

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

 

“California Commissioner” means the California Commissioner of Corporations.

 

“California Securities Law” means the California Corporate Securities Law of
1968, as amended, and the rules and regulations promulgated thereunder.

 

“Claim” has the meaning set forth in Section 7.5(a).

 

“Closing Shares” has the meaning set forth in Section 2.7(a)(i).

 

“Closing” and “Closing Date” have the respective meanings set forth in Section
2.8.

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.

 

“Consented Maintenance Agreement” has the meaning set forth in Section
5.11(c)(ii).

 

“Consented Services Agreement” has the meaning set forth in Section 5.11(d)(ii).

 

“Contested Claim” has the meaning set forth in Section 7.5(d)(ii).

 

“Contract” means any written, oral or other agreement, contract, subcontract,
lease, sublease, mortgage, instrument, indenture, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan, memorandum
of understanding, letter of intent, promise, arrangement, commitment or
undertaking of any nature.

 

“Copyright Assignment” has the meaning set forth in Section 2.9(d).

 

“Damages” means any and all claims, demands, suits, actions, causes of actions,
losses, costs, damages, Liabilities and expenses, including reasonable
attorneys’ fees, other professionals’ and experts’ reasonable fees and court or
arbitration costs.

 

“Deferred Revenue” means all amounts received or entitled to be received from
customers of the Business that would be characterized as deferred revenue in
accordance with GAAP as of the Closing.

 

“Determination Date” means (i) with respect to the Closing Shares, the Closing
Date, (ii) with respect to the Earnout Shares, the date such Earnout Shares are
issued in accordance with the Earnout Schedule and (iii) with respect to the
Indemnification Shares, the Closing Date.

 

“Dispute Notice” has the meaning set forth in Section 5.11(e)(ii).

 

“Documentation” means, collectively, programmers’ notes or logs, source code
annotations, user guides, manuals, instructions, software architecture designs,
layouts, any know-how, and any other designs, plans, drawings, documentation,
materials, supplier lists, software source code and object code, net lists,
photographs, development tools, blueprints, media, memoranda and records that
are primarily related to or otherwise necessary for the use and exploitation of
any Seller Technology Assets, whether in tangible or intangible form, whether
owned by Seller or held by Seller under any licenses or sublicenses (or similar
grants of rights).

 

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“Earnout Period” has the meaning set forth in the Earnout Schedule.

 

“Earnout Schedule” means Exhibit C attached hereto.

 

“Earnout Shares” has the meaning set forth in Section 2.7(b).

 

“Employee Plan” means each employment and consulting Contract, pension,
retirement, disability, medical, dental or other health plan, life insurance or
other death benefit plan, profit sharing, deferred compensation agreement,
stock, option, bonus or other incentive plan, vacation, sick, holiday or other
paid leave plan, severance plan or other similar employee benefit plan,
including all “employee benefit plans” as defined in Section 3(3) of ERISA
maintained by Seller or any of its affiliates, which covers any Business
Employee.

 

“Encumbrance” means any pledge, lien, collateral assignment, security interest,
deed of trust, mortgage, title retention device, collateral assignment, claim,
license or other contractual restriction (including any restriction on the
transfer of any asset, the receipt of income derived from any asset or on the
possession, exercise or transfer of any other attribute of ownership of any
asset), conditional sale or other security arrangement, or any charge, adverse
claim of title, ownership or right to use or any other encumbrance of any kind
whatsoever, other than (i) mechanic’s, materialmen’s, landlord’s and similar
liens, (ii) liens arising under worker’s compensation, unemployment insurance,
social security, retirement and similar legislation, (iii) liens for Taxes not
yet due and payable, (iv) liens for Taxes that are being contested in good faith
and by appropriate proceedings and which are set forth on Schedule 3.5 to the
Seller Disclosure Letter, (v) liens arising solely by action of Parent or the
Buyer and (vi) liens relating to capitalized lease financings or purchase money
financings that have been entered into in the ordinary course of business,
provided that with respect to clauses (i) through (iii), such liens do not
materially and adversely impair the use or value of the Purchased Assets and do
not secure outstanding liabilities that have not been paid when due.

 

“Environmental Laws” means any federal, state, local or foreign law (including
common law), treaty, judicial decision, regulation, ordinance, code, legally
binding guideline or policy or rule of the United States or of any other country
or any judgment, order, decree, injunction, permit or governmental restriction
or any agreement with any Governmental Authority, relating to the environment,
natural resources, human health and safety or to exposure to Hazardous
Substances, and includes the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. §9601 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. §1801 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. §6901 et seq., the Clean Water Act, 33 U.S.C. Sections
1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Toxic Substance
Control Act, 15 U.S.C. §2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C.
§2701 et seq., and the Occupational Safety and Health Act, 29 U.S.C. §651 et
seq., as such laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes and any
applicable transfer statutes.

 

“Environmental Liabilities” means any and all Liabilities arising in connection
with or in any way relating to Seller (or any predecessor of Seller or any prior
owner of all or part of Seller’s business and assets), any property now or
previously owned, leased or operated by Seller, the Business (as currently or
previously conducted by Seller), the Purchased Assets or any activities or
operations occurring or conducted at the real property owned, leased or used by
Seller (including offsite disposal), whether accrued, contingent, absolute,
determined, determinable or otherwise, which (i) arise under any Environmental
Laws and (ii) relate to actions occurring on or prior to the Closing Date.

 

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

 

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“Escrow Agent” has the meaning set forth in the Escrow Agreement.

 

“Escrow Agreement” has the meaning set forth in Paragraph D of the Recitals to
this Agreement.

 

“Escrow Period” has the meaning set forth in Section 2.7(a).

 

“Escrow Shares” has the meaning set forth in Section 2.7(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.

 

“Excluded Assets” has the meaning set forth in Section 2.3.

 

“Excluded Liabilities” has the meaning set forth in Section 2.6.

 

“Facility” has the meaning set forth in Section 3.23.

 

“Final Award” has the meaning set forth in Section 10.1(e).

 

“GAAP” means United States generally accepted accounting principles in effect at
the time of any determination, which are applied on a consistent basis.

 

“Governmental Authority” means any (a) nation, province, state, county, city,
town, district or other jurisdiction of any nature; (b) federal, provincial,
state, local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal); (d)
multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing power of any nature.

 

“Governmental Permit” has the meaning set forth in Section 3.12.

 

“Guaranteed Shares” has the meaning set forth in Section 2.7(a).

 

“Hazardous Substances” means any pollutant, contaminant, waste or chemical or
any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous or
toxic substance, having any constituent elements displaying any of the foregoing
characteristics, as defined in or regulated under any applicable Environmental
Laws.

 

“Hearing” has the meaning set forth in Section 5.3(a).

 

“Hearing Notice” has the meaning set forth in Section 5.3(a).

 

“Incurred Damages” has the meaning set forth in Section 10.1(e).

 

“Indemnification Cap” has the meaning set forth in Section 7.4(a).

 

“Indemnification Shares” has the meaning set forth in Section 7.4(b).

 

“Indemnified Person” has the meaning set forth in Section 7.5(a).

 

“Indemnifying Person” has the meaning set forth in Section 7.5(c)(i).

 

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“Information Statement” has the meaning set forth in Section 5.3(a).

 

“Intellectual Property Rights” means any rights exercisable or available in any
jurisdiction of the world constituting industrial or intellectual property
rights or protections, whether owned, licensed or otherwise used or held,
including without limitation all of the following: (i) all patents, patent
applications and the inventions, designs and improvements described and claimed
therein, patentable inventions, and other patent rights (including any
divisions, continuations, continuations-in-part, substitutions, or reissues
thereof, whether or not patents are issued on any such applications and whether
or not any such applications are amended, modified, withdrawn, or resubmitted);
(ii) all trademarks, service marks, trade dress, trade names, brand names,
Internet domain names and URLs, designs, logos, or corporate names (including,
in each case, the goodwill associated therewith), whether registered or
unregistered, and all registrations and applications for registration thereof;
(iii) all copyrights, including all renewals and extensions, copyright
registrations and applications for registration, and non-registered copyrights
and moral rights; (iv) all trade secrets, confidential business information,
concepts, ideas, designs, research or development information, processes,
procedures, techniques, technical information, specifications, operating and
maintenance manuals, engineering drawings, methods, know-how, data, mask works,
discoveries, inventions, modifications, extensions, improvements, and other
proprietary rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection); (v) all computer software programs,
including all source code, object code and documentation related thereto; and
(vi) all databases and data collections and rights therein.

 

“IRS” means the Internal Revenue Service.

 

“J.A.M.S.” has the meaning set forth in Section 10.1.

 

“knowledge” of a party, with respect to any fact, circumstance, event or other
matter in question, means the knowledge of the Seller Knowledge Parties or the
Parent Knowledge Parties, as the case may be, of such fact, circumstance, event
or other matter after reasonable inquiry.

 

“Liabilities” means debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured, determined or determinable,
known or unknown, including those arising under any law (under law or equity and
under any theory of liability), action or governmental order and those arising
under any Contract.

 

“License Excluded Assets” has the meaning set forth in Section 2.3.

 

“Life Sciences Market” means all (i) healthcare providers (as evidenced by state
licensure or other legal authorization to engage in the treatment of illness,
injury or disease), including but not limited to acute care hospitals,
physicians, pharmacies and clinical laboratories, (ii) those entities and any
division, department or other subdivision of an entity which sell, directly or
through third parties, services or supplies used in direct patient treatment,
including without limitation pharmaceutical and medical/surgical manufacturers
and distributors, (iii) healthcare group purchasing organizations, (iv) pharmacy
benefit managers, (v) healthcare contract research organizations, (vi)
healthcare biotechnology and healthcare biologically-oriented nanotechnology
companies, (vii) medical research laboratories, (viii) those entities and any
division, department or other subdivision of an entity which supply (or
supplies) medical capital equipment to healthcare providers (excluding any
division, department or other subdivision of such entity which does not supply
medical capital equipment to healthcare providers), and (ix) those entities and
any division, department or other subdivision of an entity which sell, directly
or through third parties, services or supplies used in billing for or the
reimbursement of the treatment of illness, injury or disease (excluding any
division, department or other subdivision of such entity which

 

6

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does not sell, directly or through third parties, services or supplies used in
billing for or the reimbursement of the treatment of illness, injury or
disease).

 

“Mark Assignment” has the meaning set forth in Section 2.9(d).

 

“Material Adverse Change” when used in reference to (a) Seller or Parent, means
any change, event, violation, inaccuracy, circumstance or effect (regardless of
whether such events or changes are inconsistent with the representations or
warranties made by such person in this Agreement) that is or is reasonably
likely to be individually or in the aggregate, materially adverse to the
condition (financial or otherwise), business, prospects, properties, assets
(including intangible assets), employees, operations or results of operations of
Seller, Parent or Buyer, as the case may be, and their Subsidiaries, taken as a
whole, and (b) the Purchased Assets or the Business, means a material diminution
in the condition or ability to use such Purchased Assets or the condition
(financial or otherwise), business, prospects, properties, assets (including
intangible assets), employees, operations or results of operations of the
Business.

 

“Material Adverse Effect,” when used in reference to (a) Seller, Parent or
Buyer, means any change, event, violation, inaccuracy, circumstance or effect
(regardless of whether such events or changes are inconsistent with the
representations or warranties made by such person in this Agreement) that is or
is reasonably likely to be, individually or in the aggregate, materially adverse
to the condition (financial or otherwise), business, properties, assets
(including intangible assets), employees, operations or results of operations of
Seller, Parent or Buyer, as the case may be, and their Subsidiaries, taken as a
whole, and (b) the Purchased Assets or the Business, means a material diminution
in the value, condition, status or ability to use such Purchased Assets or
Business.

 

“Material Seller Customer” has the meaning set forth in Section 5.2.

 

“Nasdaq Website” means the official website of the Nasdaq Stock Market with the
URL http://www.nasdaq.com.

 

“Notice of Claim” has the meaning set forth in Section 7.5(a).

 

“Notice of Superior Offer” has the meaning set forth in Section 5.5(c).

 

“Open Source Materials” has the meaning set forth in Section 3.11(m).

 

“Parent” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Parent Average Stock Price” means, with respect to any Determination Date, the
average of the closing sale prices per share of Parent Common Stock, as reported
on the Nasdaq National Market on the Nasdaq Website, during the ten consecutive
trading days ending on and including the Business Day prior to such
Determination Date.

 

“Parent Common Stock” means the common stock of Parent, $0.001 par value per
share.

 

“Parent Disclosure Letter” has the meaning set forth in the introductory
paragraph of Article 4, “Representations and Warranties of Parent and Buyer.”

 

“Parent Exchange Act Documents” has the meaning set forth in Section 4.3(a).

 

“Parent Financial Statements” has the meaning set forth in Section 4.3.

 

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“Parent Indemnified Person” and “Parent Indemnified Persons” have the respective
meanings set forth in Section 7.3.

 

“Parent Indemnifying Person” has the meaning set forth in Section 7.2.

 

“Parent Knowledge Parties” means each of Robert Zollars, Daniel Eckert, Andrew
Guggenhime, Steven Wigginton, Herbert Cross, Stephen Phillips and Jason Somer.

 

“Parent Preferred Stock” means the preferred stock of Parent, $0.001 par value
per share.

 

“Parent Stock Plans” has the meaning set forth in Section 4.4(a).

 

“Patent Assignment” has the meaning set forth in Section 2.9(d).

 

“Permit” has the meaning set forth in Section 2.11.

 

“Permit Application” has the meaning set forth in Section 5.3(a).

 

“person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity.

 

“Prepaid Assets” has the meaning set forth in Section 2.2(i).

 

“Pre-Closing Period” has the meaning set forth in Section 5.2.

 

“Prior Facility” has the meaning set forth in Section 3.23.

 

“Privacy Practices” has the meaning set forth in Section 3.19.

 

“Professional Services Agreement” has the meaning set forth in Section 5.11(d).

 

“Purchase Price” has the meaning set forth in Section 2.7(a).

 

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

 

“Receivables List” has the meaning set forth in Section 3.24.

 

“Required ConsentMaintenance Agreement” has the meaning set forth in Section
5.11(c)(i).

 

“Required ConsentServices Agreement” has the meaning set forth in Section
5.11(d)(i).

 

“Resale Registration Statement” has the meaning set forth in Section 2.11.

 

“Restricted Period” has the meaning set forth in Section 5.18.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

 

“Selected Employees” has the meaning set forth in Section 5.7(a).

 

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“Seller” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Seller Agreements” has the meaning set forth in Section 3.9.

 

“Seller Ancillary Agreements” means the Escrow Agreement, Software Distribution
and License Agreements, Bill of Sale and Assumption Agreement and all other
assignments, certificates and documents that Seller is required to execute and
deliver pursuant to this Agreement.

 

“Seller Balance Sheet” has the meaning set forth in Section 3.6(b).

 

“Seller Common Stock” means the common stock of Seller, $0.0001 par value per
share.

 

“Seller Confidential Information” has the meaning set forth in Section 5.13(b)

 

“Seller Customer Assets” has the meaning set forth in Section 2.2(j).

 

“Seller Customers” has the meaning set forth in Section 3.22.

 

“Seller Disclosure Letter” has the meaning set forth in the introductory
paragraph of Article 3, “Representations and Warranties of Seller.”

 

“Seller Exchange Act Documents” has the meaning set forth in Section 3.6(a).

 

“Seller Indemnified Person” and “Seller Indemnified Persons” have the respective
meaning set forth in Section 7.3.

 

“Seller Indemnifying Person” has the meaning set forth in Section 7.2.

 

“Seller IP Rights” has the meaning set forth in Section 3.11(a).

 

“Seller IP Rights Agreements” has the meaning set forth in Section 3.11(b).

 

“Seller Knowledge Parties” means each of A. Leigh Powell, Terry Nicholson, Kevin
Collins, Robert G. Schwartz, Roger Guerin, Alan Cardinal, Todd Venetianer,
Stephen van Houten, Leonard Rainow, Scott Landry, Tim Curran, Adam Fine, Ed
Lawrence, Donna Senkbeil and all project managers of Seller with respect to the
projects for which he or she is responsible.

 

“Seller Options” means outstanding options to purchase shares of Seller Common
Stock.

 

“Seller Proxy Statement” has the meaning set forth in Section 5.4(a).

 

“Seller Receivables” means all Accounts Receivable, notes receivable and other
receivables, as well as unbilled work-in-progress, of Seller and the Business.

 

“Seller Stockholder Meeting” has the meaning set forth in Section 3.21(b).

 

“Seller Source Code” has the meaning set forth in Section 3.11(i).

 

“Seller Tangible Personal Property” has the meaning set forth in Section 2.2(l).

 

“Seller Tax Period” has the meaning set forth in Section 6.2.

 

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“Seller Technology” means (all computer software (including software programs,
objects, modules, routines, algorithms and any other software code) in both
source code and object code form, copyrightable works, inventions (whether or
not patentable), trade secrets (including Seller’s customer lists), know-how,
processes, designs, techniques, confidential business information and other
proprietary information and technologies used in, in development for, or which
are otherwise necessary for, conducting the Business, including without
limitation any of the above related to software programs and updates, upgrades,
new versions and new releases of such software programs currently under
development by or for Seller, whether owned by Seller or held by Seller under
any licenses or sublicenses (or similar grants of rights) excluding the
Seller-Licensed IP Rights and the Excluded Assets).

 

“Seller Technology Assets” means all of the Seller Technology described on
Schedule 1.1(c) attached hereto. The Seller Technology Assets specifically
exclude all other Seller Technology not described on Schedule 1.1(c) (the
“Retained Seller Technology Assets”).

 

“Seller Warrants” means outstanding warrants to purchase shares of Seller Common
Stock.

 

“Seller-Licensed IP Rights” has the meaning set forth in Section 3.11(a).

 

“Seller-Owned IP Rights” has the meaning set forth in Section 3.11(a).

 

“Shares” means, collectively, the Closing Shares, the Escrow Shares and the
Earnout Shares.

 

“Shares Cap” has the meaning set forth in Section 2.7(c).

 

“Significant Customer” has the meaning set forth in Section 5.11(h).

 

“Significant Customer Agreement” has the meaning set forth in Section 5.11(h).

 

“Software Distribution and License Agreements” has the meaning set forth in
Paragraph C of the Recitals to this Agreement.

 

“Subsidiary” of a specified person means any corporation, partnership, limited
liability company, joint venture or other legal entity of which the specified
entity (either alone or through or together with any other Subsidiary) owns,
directly or indirectly, 50% or more of the stock or other equity or partnership
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.

 

“Superior Offer” has the meaning set forth in Section 5.5(c).

 

“Tax” or “Taxes” means foreign, federal, state and local taxes of any kind
whatsoever (whether payable directly or by withholding), including alternative
or add-on minimum income, gains, estimated employment, license, documentary,
stamp, occupation, recording, transfer, sales, use, excise, franchise, ad
valorem, property, property transfer, inventory, value added, withholding and
payroll taxes (including all taxes or other payments required to be withheld by
an employer and paid over to any Governmental Authority), or other similar
payments, together with any interest, penalties or additions to tax relating
thereto.

 

“Tax Returns” means all required foreign, federal, state and local returns,
estimates, information statements and reports required to be supplied to a
Taxing authority in connection with Taxes.

 

“Termination Date” has the meaning set forth in Section 9.2(b).

 

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“Third-Party Claim” has the meaning set forth in Section 7.5(a).

 

“Total Maintenance Fees” has the meaning set forth in Section 5.11(c)(i).

 

“Total Required Consent Maintenance Fees” has the meaning set forth in Section
5.11(d)(i).

 

“Total Required Consent Services Fees.” has the meaning set forth in Section
5.11(d)(i).

 

“Total Services Fees” has the meaning set forth in Section 5.11(d)(i).

 

“Triggering Event” has the meaning set forth in Section 9.2(f).

 

“Transaction Taxes” has the meaning set forth in Section 6.1.

 

“Unallocated Assets” has the meaning set forth in Section 5.25.

 

“URL” means Uniform Resource Locator.

 

“WARN Act” means the Worker Adjustment Retraining and Notification Act, as
amended.

 

ARTICLE 2

PURCHASE AND SALE OF PURCHASED ASSETS

 

2.1    Agreement to Sell and Purchase.    Subject to the terms and conditions of
this Agreement and in reliance on the representations, warranties and covenants
set forth in this Agreement, at the Closing, Seller will sell, assign, transfer,
convey and deliver to Buyer, and Buyer will purchase and acquire, all right,
title and interest in and to the Purchased Assets, subject to Section 2.4(c).
The Purchased Assets shall be sold, assigned, transferred and conveyed to Buyer
on the Closing Date, free and clear of all Encumbrances.

 

2.2    Purchased Assets Defined.    As used in this Agreement, the term
“Purchased Assets” means, collectively, all of the following:

 

(a)    all of the Seller Technology Assets, in intangible form;

 

(b)    all Documentation primarily or exclusively used in connection with the
Business and copies of all other Documentation, in both cases in intangible
form;

 

(c)    any and all copies in tangible medium and any and all other tangible
embodiments of all of the Seller Technology Assets and all Documentation
primarily or exclusively used in connection with the Business and copies of all
other Documentation;

 

(d)    all Intellectual Property Rights owned by Seller, used in or related to
the Purchased Assets, including all patents, rights in patent applications and
invention rights listed in the Patent Assignment, all copyrights listed in the
Copyright Assignment, all marks listed in the Mark Assignment and all domain
names listed in the Domain Name Assignment;

 

(e)    all Books and Records primarily or exclusively used in connection with
the Business and copies of all other Books and Records;

 

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(f)    to the extent lawfully transferable and applicable exclusively or
primarily to the Business, all Governmental Permits;

 

(g)    the Contracts listed on Schedule 2.2(g) attached hereto (collectively,
the “Assigned Agreements”); provided, however that to the extent any Contract
related to the Business existing on the Agreement Date that has not been
disclosed to Buyer is discovered after the Agreement Date or after the Closing
Date, Buyer will have the right to elect whether or not such Contract shall be
deemed an Assigned Agreement. Assigned Agreements will also include any Contract
with a customer related to the Business entered into after the Agreement Date
without violation of Section 5.2 of this Agreement.

 

(h)    such Accounts Receivable of Seller arising out of or in connection with
the Business that are mutually selected by Seller and Buyer five Business Days
prior to the Closing Date in an outstanding amount (net of any reserves
established or required under GAAP) equal to the Deferred Revenue of Seller that
is assumed pursuant to Section 2.5(b); provided, however, that if the amount of
such Accounts Receivable is less than the amount of such Deferred Revenue,
Seller will provide to Buyer cash in an amount equal to the difference between
the amount of such Accounts Receivable and the amount of such Deferred Revenue;

 

(i)    all prepaid expenses, deposits and similar prepaid items relating to the
Business existing on the Closing Date, of the type set forth on Schedule 2.2(i)
attached hereto (collectively, the “Prepaid Assets”), which exhibit will be
updated to reflect the Prepaid Assets outstanding as of the Closing Date at
least one Business Day prior to the Closing Date, but excluding those prepaid
expenses, deposits and similar prepaid items set forth on Schedule 2.2(i)
attached hereto;

 

(j)    a complete list of all Seller Customers and prospect lists of the
Business (whether current or prior), and Seller Customer account histories,
correspondence, notes and plans for Seller Customers or prospective customers of
the Business, including all data regarding such Seller Customers, and all other
marketing, promotional, Seller Customer and sales information, whether stored in
written form, magnetic or electronic media or in any other form, in each case
only to the extent any such Seller Customer or prospect list is with respect to
the Business (collectively, the “Seller Customer Assets”);

 

(k)    all rights, claims, credits, causes of action or rights of setoff of
Seller against third parties arising out of the Purchased Assets or the
Business, whether liquidated or unliquidated, fixed or contingent, and all
rights of Seller arising out of the Purchased Assets or the Business, under or
pursuant to all warranties, representations and guarantees made by suppliers,
manufacturers, contractors and other third parties, other than those related
primarily or exclusively to the Excluded Assets;

 

(l)    all tangible assets listed on Schedule 2.2(l) attached hereto
(collectively, the “Seller Tangible Personal Property”);

 

(m)    all policy rights and proceeds payable under any insurance policy
covering the Purchased Assets for damage to the Purchased Assets or other
insurable or covered event affecting the condition of the Purchased Assets
occurring prior to the Closing; provided, however that to the extent any policy
rights and proceeds payable under any insurance policy covering the Purchased
Assets for damage to the Purchased Assets also relate to any Excluded Assets,
then such policy rights and proceeds will be apportioned based on the value of
the Purchased Assets covered under any such insurance policy versus the value of
the Excluded Assets covered under any such insurance policy;

 

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(n)    all goodwill associated with the Purchased Assets and the Business,
together with the right to represent to third parties that Parent is the
successor to the Business; and

 

(o)    all proceeds from the Summit trade show to be held in October 2003, net
of any expenses incurred by Seller prior to Closing in connection with hosting
such trade show, which expenses must be consistent with Seller’s past practices
in hosting similar trade shows.

 

2.3    Excluded Assets Defined.    As used in this Agreement, the term “Excluded
Assets” means all assets of Seller that are not expressly stated herein to be
Purchased Assets, including those assets related to or otherwise necessary for
the conduct of the Business by Seller as of the date of this Agreement that are
listed on Schedule 2.3 to the Seller Disclosure Letter and which shall be
licensed by Seller to Parent and Buyer pursuant to the Software Distribution and
License Agreements (the “Licensed Excluded Assets”). Subject to this Section
2.3, all Excluded Assets will be retained by Seller or its licensors and will
not be sold, assigned, transferred or conveyed to Buyer.

 

2.4    Asset Transfer; Passage of Title; Delivery.

 

(a)    Title Passage.    Upon the Closing, all of the right, title and interest
of Seller in and to all of the Purchased Assets shall pass to Buyer, and Seller
shall deliver to Buyer possession or control of all of the Purchased Assets and
shall further deliver to Buyer proper assignments, conveyances and bills of sale
sufficient to convey to Buyer good (and in the case of tangible assets,
marketable) title to all of the Purchased Assets, free and clear of all
Encumbrances, as well as such other instruments of conveyance as Buyer may
reasonably determine are necessary (both at and after the Closing) to effect or
evidence the transfers contemplated hereby.

 

(b)    Method of Delivery of Assets.    At the Closing, Seller shall deliver or
cause to be delivered to Buyer all of the Purchased Assets, which shall be
delivered to Buyer in the form and to the location to be determined by Buyer in
its reasonable discretion before the Closing Date at Buyer’s cost and expense;
provided, that (i) Seller shall deliver all of Seller’s tangible personal
property at their current locations in Portland, ME and Stratford, CT and (ii)
all other Purchased Assets shall be delivered through electronic delivery or in
another manner reasonably acceptable to Buyer. Except as otherwise provided in
Section 2.2 and Section 5.15, Seller shall not retain any copy of any Purchased
Asset following the Closing.

 

(c)    Nontransferable Assets.    Notwithstanding any other provision of this
Agreement or any of the Seller Ancillary Agreements, to the extent that any of
the Assigned Agreements or any other assets constituting part of the Purchased
Assets are not assignable or otherwise transferable to Buyer without the
consent, approval or waiver of another party thereto or any third party
(including any Governmental Authority), or if such assignment or transfer would
constitute a breach thereof or a violation of any Applicable Legal Requirement
or agreement with any third party, then neither this Agreement nor such Seller
Ancillary Agreements shall constitute an assignment or transfer (or an attempted
assignment or transfer) thereof until such consent, approval or waiver of such
party or parties has been duly obtained.

 

2.5    Assumption of Specified Liabilities; Exclusion of Liabilities.    Upon
and subject to the terms the conditions of this Agreement, Parent shall cause
Buyer, effective at the time of the Closing, to pay, perform and discharge when
due only the following liabilities (collectively, the “Assumed Liabilities”):

 

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(a)    subject to Section 2.4(c), the Liabilities of Seller under the Assigned
Agreements, but only to the extent that such Liabilities accrued or arose after
the Closing Date for reasons other than any breach, violation or default by
Seller of any of the terms of any of the Assigned Agreements;

 

(b)    the Liabilities of the Seller under the Assigned Agreements if and to the
extent that such Liabilities are included in the Deferred Revenue of Seller
arising out of or associated with the Business that is outstanding as of the
Closing Date;

 

(c)    subject to Section 2.4(c), the Liabilities of Seller under the leases set
forth on Schedule 2.5(c) attached hereto, but only to the extent that such
Liabilities accrued or arose after the Closing Date for reasons other than any
breach, violation or default by Seller of any of the terms of any of such
leases;

 

(d)    any and all Liabilities in respect of the operation of the Business or
the Purchased Assets, but only to the extent that such Liabilities accrued or
arose after the Closing Date and did not accrue or arise as a result of any (or
represent a) breach by Seller of any representation or warranty contained in
Article 3, “Representations and Warranties of Seller”;

 

(e)    any and all Liabilities under the Governmental Permits included among the
Purchased Assets, but only to the extent that such Liabilities accrued or arose
after the Closing Date;

 

(f)    any and all Liabilities for Taxes for which the Parent or the Buyer is
liable pursuant to Article 6, “Tax Matters”; and

 

(g)    any and all Liabilities of the Seller to its customers for the repair,
replacement or return of products sold or services provided prior to the
Closing, relating primarily or exclusively to the Business, but only to the
extent that such Liabilities (i) did not accrue or arise as a result of any (or
represent a) breach by Seller of any representation or warrants contained in
Article 3, “Representations and Warranties of Seller,” or as a result of the
infringement of any Intellectual Property Right of any other Person, (ii) arose
under a Contract listed on Schedule 3.22 and (iii) do not require a refund,
payment under a warranty provision or any similar payment of a portion or all of
the purchase price therefore; provided, however, that with respect to any
Liability for the repair of products sold or services provided prior to the
Closing that would otherwise become an Excluded Liability pursuant to clauses
(i), (ii) or (iii) of this Section 2.5(g), Parent must first use its
commercially reasonable efforts to repair such products or services before such
Liability will be deemed to be an Excluded Liability.

 

2.6    No Other Liabilities Assumed.    As a material consideration and
inducement to Buyer to enter into this Agreement, Seller will retain, and will
be solely responsible for paying, performing and discharging when due, and
Parent and Buyer will not assume or otherwise have or acquire any obligation,
responsibility or liability for, any Excluded Liabilities. The term “Excluded
Liabilities” means any and all Liabilities of Seller, whether now existing or
hereafter arising, other than the Assumed Liabilities, including, by way of
example and not by way of limitation:

 

(a)    except as provided in Article 6, “Tax Matters,” any and all Taxes now or
hereafter due and payable by Seller or any Affiliate of Seller;

 

(b)    any and all trade payables incurred or accrued by Seller or any of
Seller’s Affiliates, whether or not relating to the Business, and any related
Liabilities of Seller and its Affiliates;

 

(c)    except as provided in Section 2.5(g), any and all Liabilities now or
hereafter arising from or with respect to the sale, license, provision,
performance or delivery of any products or

 

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services of, by or for Seller or any of its Affiliates, including, but not
limited to, all past sales and licenses of the products and services in
connection with the Business by Seller or any of its Affiliates; or any
Liability under claims based on rights of privacy and/or copyrights in
third-party content sourced from the World Wide Web (including claims of
contributory infringement);

 

(d)    any and all Liabilities arising from any breach or default by Seller or
any of its Affiliates of any Contract of Seller or any of its Affiliates,
including, but not limited to, any breach, violation or default by Seller or any
of its Affiliates of any of the Assigned Agreements that occurred or first arose
prior to the Closing;

 

(e)    any and all Liabilities under any Contract that is not an Assigned
Agreement;

 

(f)    any and all Liabilities arising under the Employee Plans of Seller and
any and all Liabilities to current or former employees or consultants of Seller
related to or arising from or with respect to any act or omission of Seller,
including any Liabilities to such employees and consultants for the payment of
any and all wages or accrued and unused vacation time or for the reimbursement
of any expenses incurred by such employees and consultants;

 

(g)    any and all Liabilities arising from the termination by Seller or any of
its Affiliates of the employment of any current, former or future employees or
consultants of Seller, any other claims brought against Seller arising from the
employment by Seller or any of its Affiliates of any person, or arising from any
duties or obligations under any Employee Plans of Seller or any of its
Affiliates;

 

(h)    any and all present or future Liabilities of Seller or any of its
Affiliates to employees or consultants of Seller under ERISA, COBRA, the WARN
Act or the rulings and regulations promulgated thereunder, or any severance pay
obligations of Seller;

 

(i)    any and all Liabilities relating to or arising out of any of the Excluded
Assets;

 

(j)    any and all Liabilities arising from any claim, action, demand, lawsuit,
investigation or proceeding instituted by or against Seller or from the actual
or alleged infringement or misappropriation by Seller of any Intellectual
Property Rights of a third party;

 

(k)    all costs and expenses, including fees and disbursements of counsel,
financial advisors and accountants, incurred by Seller in connection with this
Agreement and the transactions contemplated hereby;

 

(l)    any Environmental Liability;

 

(m)    any and all Liabilities arising from the violation (or alleged violation)
by Seller or any of its Affiliates of any statute, law, ordinance, regulation,
order, judgment or decree of any Governmental Authority or any jurisdiction
(other than Assumed Liabilities); and

 

(n)    any and all Liabilities arising as a result of any failure to comply with
any “bulk sales,” “bulk transfer” or similar laws in connection with the
transactions contemplated by this Agreement.

 

2.7    Purchase Price and Escrow.    In consideration of the sale, assignment,
transfer and conveyance of all the Purchased Assets (free and clear of all
Encumbrances) to Buyer at the Closing, Buyer shall (i) pay Seller $10.0 million
in cash and (ii) issue to Seller shares of Parent Common Stock

 

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(collectively, the “Purchase Price”), which shares of Parent Common Stock shall
be issued in the following amount and manner:

 

(a)    At the Closing, Buyer shall issue such number of shares of Parent Common
Stock as shall be equal to the quotient (rounded down to the nearest whole
number) of (A) $10.0 million divided by (B) the Parent Average Stock Price (the
“Closing Shares”). Of the aggregate number of Closing Shares to be issued by
Parent at the Closing, 20% of such Closing Shares (rounded up to the nearest
whole number) (the “Escrow Shares”) will be deposited in an account with the
Escrow Agent. The Escrow Agent will hold the Escrow Shares as collateral to
secure Seller’s indemnification obligations hereunder for a period of one year
from the Closing Date (the “Escrow Period”) and will release amounts in
accordance with the Escrow Agreement and Article 7, “Indemnification.” The
portion of the Closing Shares that are not Escrow Shares are referred to herein
as “Guaranteed Shares.”

 

(b)    Contingent upon the occurrence of the conditions and in accordance with
the provisions of the Earnout Schedule during the period from the Closing Date
through and including the Earnout Period, Seller has the opportunity to earn up
to an additional number of shares (the “Earnout Shares”) of Parent Common Stock
as shall be equal to the quotient of (A) $5.0 million divided by (B) the Parent
Average Stock Price. Any Earnout Shares that may be earned by Seller during the
Earnout Period will be issued by Parent to Seller in the manner prescribed in
the Earnout Schedule.

 

(c)    Notwithstanding anything to the contrary herein or in the Earnout
Schedule, the maximum aggregate number of Shares that Parent may be required to
issue to Seller hereunder or thereunder shall not exceed that number of shares
of Parent Common Stock as shall equal 19.9% of the total number of shares of
Parent Common Stock outstanding on the Closing Date (the “Shares Cap”). In the
event that the number of Shares otherwise issuable hereunder would exceed the
Shares Cap, Parent will issue to Seller that number of Shares as shall equal the
Shares Cap, and Parent shall pay Seller the balance of the consideration in cash
in an amount equal to the value of the unissued Shares that exceeded the Share
Cap.

 

2.8    Closing.    Subject to the terms and conditions of this Agreement, the
sale and purchase of the Purchased Assets contemplated hereby will take place at
a closing (the “Closing”) at the offices of Fenwick & West LLP, 801 California
Street, Mountain View, California at 10:00 a.m., Pacific Time, within two
Business Days after all of the conditions to Closing set forth in Article 8,
“Conditions to Closing,” have been satisfied and/or waived in accordance with
this Agreement, or at such other time and date, and at such other place, as may
be agreed to by the Buyer and Seller (the “Closing Date”).

 

2.9    Closing Deliveries by Seller.    At the Closing, in addition to Seller’s
delivery of the items, documents and certificates to be delivered by Seller at
the Closing pursuant to Section 8.2, Seller will deliver or cause to be
delivered to Parent and Buyer the following items, documents and certificates,
against delivery to Seller of the items, payments, documents and certificates to
be delivered to Seller by Parent and Buyer at the Closing pursuant to Section
2.10 and Section 8.1:

 

(a)    counterparts of each of the Bill of Sale and Assumption Agreement, in
substantially the form of Exhibit D attached hereto (the “Bill of Sale and
Assumption Agreement”), the Escrow Agreement and the Software Distribution and
License Agreements, each executed on Seller’s behalf by an authorized officer of
Seller;

 

(b)    the Purchased Assets, which shall be delivered to Buyer in accordance
with Section 2.4;

 

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(c)    assignments from Seller to Buyer of any and all patent rights, rights in
patent applications and invention rights, registered and unregistered
copyrights, trademarks, service marks and domain names included in the Purchased
Assets and all pending applications for registration or recordation of any
copyrights, trademarks, service marks and domain names included in the Purchased
Assets, duly executed on behalf of Seller by an authorized officer of Seller and
notarized, in a form acceptable for recording with the United States Patent and
Trademark Office, the United States Copyright Office, or InterNIC Registration
Services (or other applicable registrar), as applicable, and in substantially
the forms of Exhibit E attached hereto (the “Patent Assignment”), Exhibit F
attached hereto (the “Copyright Assignment”) or Exhibit G attached hereto (the
“Mark Assignment”), as applicable;

 

(d)    copies of resolutions of the board of directors of Seller authorizing the
execution, delivery and performance by Seller of this Agreement, each of the
Seller Ancillary Agreements, and the consummation of the sale, assignment and
delivery of the Purchased Assets hereunder and all other transactions
contemplated hereby and thereby, certified as true and correct on the Closing
Date by the Secretary of Seller;

 

(e)    certificates from the Secretary of State of the States of Connecticut,
Delaware, New Jersey and Maine, dated as of a date that is no more than three
Business Days before the Closing Date regarding the corporate good standing of
Seller with each such agency as of such date, in each case with such good
standing confirmed verbally with each such agency on the Closing Date; and

 

(f)    evidence of Seller’s receipt of all consents, waivers and approvals from
third parties and Governmental Authorities, if any, that are necessary to effect
the assignment and transfer to Buyer of good (and, in the case of tangible
assets, marketable) title to all of the Purchased Assets, and the assignment to
Buyer of all Assigned Agreements, in each case free and clear of all
Encumbrances.

 

2.10    Closing Deliveries by Parent and Buyer.    At the Closing, in addition
to Parent’s and Buyer’s respective delivery of the items, documents and
certificates to be delivered by them at the Closing pursuant to Section 8.1,
Parent and Buyer will deliver or cause to be delivered to Seller the following
items, documents and certificates, against delivery to Parent and Buyer of the
items, documents and certificates to be delivered to them at the Closing
pursuant to Section 2.9 and Section 8.2:

 

(a)    counterparts of each of the Escrow Agreement, the Software Distribution
and License Agreements and the Bill of Sale and Assumption Agreement, each
executed on Parent’s or Buyer’s behalf by an authorized officer of Parent or
Buyer, as the case may be;

 

(b)    payment of $10.0 million in cash by wire transfer to the account
designated in writing by Seller at least two days prior to the Closing Date;

 

(c)    a stock certificate of Parent registered in the name of the Seller
representing the Guaranteed Shares;

 

(d)    a copy of resolutions of the respective boards of directors of Parent and
Buyer authorizing the execution, delivery and performance by Parent and Buyer of
this Agreement and each of the Buyer Ancillary Agreements, certified as true and
correct on the Closing Date by the Secretary of Parent and the Secretary of
Buyer, respectively; and

 

(e)    certificates from the Secretary of State of the States of Delaware and
California, as applicable, dated as of a date that is no more than three
Business Days before the Closing Date, regarding the corporate good standing of
each of Parent and Buyer with that agency as of such date, in each case with
such good standing confirmed verbally with each such agency on the Closing Date.

 

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2.11    Securities Law Compliance.    Pursuant to Section 5.3, the parties
hereto intend that Parent shall issue the Shares pursuant to a permit approving
the fairness of this Agreement and the Asset Purchase pursuant to Section 25121
of California Securities Law such that the issuance of the Shares shall be
exempt pursuant to Section 3(a)(10) of the Securities Act from the registration
requirements of Section 5 of the Securities Act (the “Permit”). The Shares may,
under certain circumstances pursuant to Section 5.3(c), be issued in a
transaction exempt from registration under the Securities Act under Section 4(2)
thereof and/or Regulation D promulgated under the Securities Act and the
exemptions from qualification under applicable state securities laws.

 

2.12    Seller Options and Seller Warrants Not Assumed.    Buyer is not
assuming, and shall not assume the Seller Options or Seller Warrants or any
obligations or Liabilities under the Employee Plans of Seller.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Parent and Buyer that, except as specifically
set forth in the letter addressed to Parent and Buyer from Seller and dated as
of date hereof (including all Schedules thereto), which letter has been
delivered by Seller to Parent and Buyer concurrently with the parties’ execution
of this Agreement (the “Seller Disclosure Letter”), each of the representations,
warranties and statements contained in the following sections of this Article 3
is true and correct as of the date hereof and will be true and correct as of the
Closing Date (other than such representations and warranties that are expressly
made as of another date, in which case such representations and warranties are
true and correct as of such other specified date). For all purposes of this
Agreement, the statements contained in the Seller Disclosure Letter and its
Schedules shall also be deemed to be part of the representations and warranties
made and given by Seller to Parent and Buyer pursuant to this Article 3.

 

3.1    Organization and Good Standing.    Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller has the corporate power and authority and all necessary
governmental licenses, authorizations and permits to own, operate and lease its
properties and to carry on its business as now conducted, except where such
failure would not have a Material Adverse Effect on the Business or the
Purchased Assets. Seller is qualified to transact business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities make such qualification
necessary, except where such failure would not have a Material Adverse Effect on
the Business or the Purchased Assets. Seller has made available to Parent and
Parent’s legal counsel copies of its Certificate of Incorporation and Bylaws,
each as currently in effect. Seller is not in violation of its Certificate of
Incorporation or Bylaws, each as currently in effect. Schedule 3.1 to the Seller
Disclosure Letter lists every Subsidiary of Seller.

 

3.2    Power, Authorization and Validity.

 

(a)    Power and Authority; Due Authorization.    Seller has all requisite
corporate power and authority to enter into, execute, deliver and, subject only
to the approval by the holders of Seller Common Stock set forth in Section
3.2(b), perform its obligations under this Agreement and each of the Seller
Ancillary Agreements, to sell the Purchased Assets to Buyer and to consummate
all other transactions contemplated hereby and thereby (the “Asset Purchase”).
The execution, delivery and performance by Seller of this Agreement and each of
the Seller Ancillary Agreements, and the sale of the Purchased Assets to Buyer,
have been duly and validly approved and authorized by all necessary corporate
action on the part of Seller, subject only to the approval and adoption of this
Agreement and the approval of the Asset Purchase, by the holders of Seller
Common Stock as set forth in Section 3.2(b).

 

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(b)    Stockholder Consents.    Seller has determined to obtain the vote of a
majority of the holders of Seller Common Stock (the “Requisite Stockholder
Approval”) to adopt this Agreement and approve the Asset Purchase. Except as
provided in the preceding sentence, no other action or approval on the part of
the holders of any of Seller’s securities is required in order to validly
approve and adopt this Agreement and approve the Asset Purchase.

 

(c)    Other Consents.    No consent, approval, order or authorization of,
notification to, action by or registration, declaration or filing with, any
Governmental Authority, or any other person, governmental or otherwise, is
necessary or required to be made or obtained by Seller to enable Seller to
lawfully enter into, execute, deliver and perform its obligations under this
Agreement and each of the Seller Ancillary Agreements, or to consummate the
transactions contemplated hereby or thereby, including Seller’s sale,
assignment, transfer, conveyance and delivery of the Purchased Assets, except
for the approvals of the holders of Seller Common Stock as set forth in Section
3.2(b), the filing of a Current Report on Form 8-K and the Seller Proxy
Statement with the SEC in accordance with the Exchange Act and the consents set
forth on Schedule 3.2(c) to the Seller Disclosure Letter.

 

(d)    Enforceability.    This Agreement has been duly executed and delivered by
Seller. This Agreement and each of the Seller Ancillary Agreements are, or when
duly executed and delivered by Seller shall be, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms,
subject only to the effect, if any, of (i) applicable bankruptcy and other
similar laws affecting the rights of creditors generally or (ii) rules of law
and equity governing specific performance, injunctive relief and other equitable
remedies.

 

3.3    No Conflict.    Neither the execution and delivery of this Agreement or
any of the Seller Ancillary Agreements by Seller, nor the consummation of the
transactions contemplated hereby or thereby, will conflict with, or (with or
without notice or lapse of time, or both) result in a termination, breach,
impairment or violation of, or constitute a default under: (i) any provision of
the Certificate of Incorporation or Bylaws of Seller, each as currently in
effect; (ii) any Applicable Legal Requirements or (iii) any Contract (whether
oral or in writing) to which Seller is a party or by which Seller or any of the
Purchased Assets are bound, except in the cases of clauses (ii) and (iii), where
such conflict, termination, breach, impairment, violation or default would not
have a Material Adverse Effect on the Business or any of the Purchased Assets.
Neither Seller’s entering into this Agreement or any of the Seller Ancillary
Agreements nor the consummation of the transactions contemplated hereby or
thereby will result in the creation of any Encumbrance on any of the Purchased
Assets or give rise to, or trigger the application of, a right or claim of any
third party with respect to the Business or the Purchased Assets that would have
a Material Adverse Effect on Seller, the Business or the Purchased Assets.

 

3.4    Litigation.    There is no litigation, including, without limitation, any
claim, action, suit, investigation or proceeding of any nature pending or, to
the knowledge of Seller, threatened, at law or in equity, by way of arbitration
or before any court or other Governmental Authority that: (i) would reasonably
be expected to adversely affect, contest or challenge Seller’s authority, right
or ability to sell or convey any of the Purchased Assets or the Business to
Buyer and Parent under this Agreement or to otherwise perform Seller’s
obligations under this Agreement or any of the Seller Ancillary Agreements, as
applicable; (ii) challenges or contests Seller’s right, title or ownership in
any of the Purchased Assets or asserts any Encumbrance on any of the Purchased
Assets; (iii) seeks to enjoin, prevent or hinder the consummation of any of the
transactions contemplated by this Agreement or any of the Seller Ancillary
Agreements; (iv) is pending against Seller and would impair or have an adverse
effect on Buyer’s or Parent’s right or ability to own, use, commercialize or
otherwise exploit any of the Purchased Assets or impair or have an adverse
effect on the value of any of the Purchased Assets; or (v) involves a wrongful
termination, harassment or other employment-related claim by any Business
Employee or that would adversely affect or prevent Buyer or Parent from hiring
or employing any Business Employee. To

 

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Seller’s knowledge, there is no reasonable basis for any person to assert a
claim against Parent, Buyer or Seller with respect to the matters set forth in
the preceding sentence. There are no judgments, decrees, injunctions or orders
of any Governmental Authority or arbitrator binding on Seller which (i)
adversely affect any of the Purchased Assets or the Business, (ii) would enjoin,
prevent, hinder or conflict with any of the transactions contemplated by this
Agreement or (iii) would impair or adversely affect Buyer’s or Parent’s rights
in any of the Purchased Assets at any time on or after the Closing.

 

3.5    Taxes.    No Tax liens are currently in effect against any of the
Purchased Assets or the Business, except liens for Taxes not yet due and payable
or for Taxes set forth on Schedule 3.5 to the Seller Disclosure Letter, which
are being contested in good faith by appropriate proceedings.

 

3.6    Seller Exchange Act Documents; Seller Financial Statements.

 

(a)    Seller has filed all forms, reports and documents (together with any
required amendments thereto) required to be filed by Seller with the SEC since
December 31, 2000. All such required forms, reports and documents (including
those that Seller may file subsequent to the Agreement Date) are referred to
herein as the “Seller Exchange Act Documents.” As of their respective dates, the
Seller Exchange Act Documents (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Seller
Exchange Act Documents and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except to the extent corrected prior to the date of
this Agreement by a subsequently filed Seller Exchange Act Document. The Seller
Exchange Act Documents, taken as a whole, together with any press release that
is broadly disseminated after the date of the most recent Seller Exchange Act
Documents and the date of this Agreement, do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Seller’s
Subsidiaries is required to file any forms, reports or other documents with the
SEC.

 

(b)    Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Seller Exchange Act Documents (the
“Seller Financial Statements”), including each Seller Exchange Act Document
filed after the Agreement Date until the Closing, (i) complied as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 10-Q, Form 8-K or any successor form under
the Exchange Act) and (iii) fairly presented the consolidated financial position
of Seller and its Subsidiaries as at the respective dates thereof and the
consolidated results of Seller’s operations and cash flows for the periods
indicated, except that the unaudited interim financial statements may not
contain footnotes and were or are subject to normal and recurring year-end
adjustments. The balance sheet of Seller contained in Seller’s Annual Report on
Form 10-K for the year ended December 31, 2002 is hereinafter referred to as the
“SellerBalance Sheet.” Except as disclosed in the Seller Financial Statements,
since the date of the Seller Balance Sheet, neither Seller nor any of its
Subsidiaries has any liabilities required under GAAP to be set forth on a
balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Seller and its Subsidiaries taken as a
whole, except for (i) liabilities for accrued expenses incurred since the date
of the Seller Balance Sheet in the ordinary course of business consistent with
past practices and liabilities incurred in connection with this Agreement and
(ii) liabilities for which neither Parent nor Buyer will be liable pursuant to
this Agreement or operation of law. Seller has

 

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delivered to Buyer its current projections (as of the Agreement Date) for the
Business for the fiscal year ending December 31, 2003. Such projections were
made or given in good faith and, in Seller’s judgment, are based on reasonable
assumptions.

 

(c)    Seller has heretofore furnished to Buyer and Parent a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Seller with the SEC
pursuant to the Securities Act or the Exchange Act.

 

3.7    Absence of Certain Changes.    Since the date of the Seller Balance
Sheet, Seller has operated the Business in the ordinary course consistent with
its past custom and practice, and since such date there has not been with
respect to Seller any:

 

(a)    occurrence that has had or would reasonably be expected to have a
Material Adverse Effect on the Business or the Purchased Assets;

 

(b)    incurrence, creation or assumption by Seller of any Liability relating to
or in respect of the Business, other than (i) Assumed Liabilities, (ii)
Liabilities for which neither Parent nor Buyer will be liable pursuant to this
Agreement or operation of law and (iii) accounts payable in the ordinary course
of business;

 

(c)    purchase, license, sale, assignment, grant of right under or other
disposition or transfer, or any Contract for the purchase, license, sale,
assignment or other disposition or transfer, of any of Seller IP Rights, any
assets used in or relating to the Business, or any Purchased Assets, other than
(i) the Assigned Agreements and the Contracts listed in Schedule 3.9 to the
Seller Disclosure Letter and (ii) agreements with Seller’s customers granted in
the ordinary course of business;

 

(d)    amendment of, relinquishment, termination or non-renewal by Seller of any
Assigned Agreement, other than such Assigned Agreements as may expire pursuant
to their own terms, or a right or obligation set forth in any Assigned
Agreement, or any written or, to Seller’s actual knowledge, oral indication or
assertion by the other party thereto of any material problems with Seller’s
products, services or performance under any Assigned Agreement or its desire to
so amend, relinquish, terminate or not renew any Assigned Agreement (or a right
or obligation set forth therein);

 

(e)    change or increase, or agreement to change or increase, the compensation
payable or to become payable to any Business Employees or in any bonus, pension,
severance, retention, insurance or other benefit payment or arrangement
(including stock awards, stock option grants, stock appreciation rights or stock
option grants) made to or with any of such Business Employees, or any other
change in the terms of employment of any Business Employee.

 

(f)    amendment of, relinquishment or termination by Seller of any Contract
relating to the employment of any Business Employees or any other type of
Contract with any such Business Employees;

 

(g)    capital expenditure, or commitment for a capital expenditure, for
additions or improvements to property, plant and equipment used by Seller in the
Business;

 

(h)    material delay in paying any accounts payable of Seller relating to the
Business, or failure to pay any such account payable in an amount more than
$25,000 beyond its due date;

 

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(i)    other material occurrence, event, incident, action, failure to act, or
transaction by Seller outside the ordinary course involving the Business or the
Purchased Assets; or

 

(j)    commitment to any of the foregoing with respect to the Business or the
Purchased Assets.

 

3.8    Title to and Condition of Purchased Assets; Sufficiency of Assets;
Warranties.

 

(a)    Seller has good (and, in the case in tangible assets, marketable) title
to all of the Purchased Assets free and clear of all Encumbrances. Title to all
of the Purchased Assets is transferable from Seller to Buyer, free and clear of
all Encumbrances, without obtaining the consent or approval of any person,
except that the consents set forth on Schedule 3.2(c) to the Seller Disclosure
Letter are required for Seller to assign the Assigned Agreements to Buyer. Upon
consummation of the transactions contemplated hereby, Buyer will have acquired
good (and, in the case in tangible assets, marketable) title in and to, or a
valid leasehold interest in, each of the Purchased Assets, free and clear of all
Encumbrances.

 

(b)    Except as set forth in Schedule 3.8(b) to the Seller Disclosure Letter,
the Purchased Assets and the rights granted under the Software Distribution and
License Agreements constitute all the Intellectual Property Rights that are
related to the Business or otherwise necessary and all the other assets,
properties and rights that are owned by Seller that are necessary to enable
Parent and Buyer, following the Closing, to own, conduct, operate and continue
the Business substantially as presently conducted and to continue to sell and
otherwise use and create derivative works based on the products and services
that are provided in connection with the Business in the same manner as Seller
as of the Closing Date without: (i) the need for Parent or Buyer to acquire or
license any other intangible asset, intangible property or Intellectual Property
Right and (ii) the breach or violation of any Contract or commitment. Except as
set forth in Schedule 3.8(b) to the Seller Disclosure Letter, none of the
Purchased Assets is licensed or leased from any third party, and no royalties,
license fees or similar payments are due or payable (or may become due or
payable) to any third party under any license, lease or other agreement of, to
or affecting the Purchased Assets and none of the Purchased Assets are licensed
to any third party other than pursuant to standard non-exclusive licenses to
Seller’s customers, clients and business partners granted in the ordinary course
of business.

 

(c)    All tangible personal property included in the Purchased Assets is in
good operating condition and repair, normal wear and tear excepted. Schedule
3.8(c)(1) to the Seller Disclosure Letter contains a true and complete list of
all Seller Tangible Personal Property as of the date of this Agreement having a
greater than nominal book value (which schedule will be updated to reflect
Seller Tangible Personal Property as of the Closing Date by Seller and delivered
to Buyer at least one Business Day prior to the Closing Date). Schedule
3.8(c)(2) to the Seller Disclosure Letter contains a true and complete list of
all Prepaid Assets of Seller as of the date of this Agreement (which schedule
will be updated to reflect Prepaid Assets of Seller as of the Closing Date by
Seller and delivered to Buyer at least one Business Day prior to the Closing
Date).

 

(d)    Schedule 3.8(d) to the Seller Disclosure Letter sets forth each lease or
sublease of real property used in the Business or on which any of the Purchased
Assets are located (and each amendment or supplement thereof). All such leases
afford Seller peaceful and undisturbed possession of the subject matter of the
lease. All leases of real property and personal property related to the Business
or the Purchased Assets are in good standing, in full force and effect and are
valid, binding and enforceable in accordance with their respective terms against
Seller and, to Seller’s knowledge, the other party thereto and, to the knowledge
of Seller, there does not exist under any such lease any default or any event
which with notice or lapse of time or both would constitute a default under such
lease.

 

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(e)    Each product manufactured, sold, licensed, leased or delivered by Seller
in connection with the Business has been in substantial conformity with all
applicable contractual commitments and all express warranties made by Seller and
there is, to Seller’s knowledge, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand pending or threatened with
respect to any such contractual commitments or express warranties for
replacement or repair thereof or other damages in connection therewith. No
product manufactured, sold, licensed, leased or delivered by Seller in
connection with the Business is subject to any guaranty, warranty, or other
indemnity beyond Seller’s applicable standard terms and conditions of sale,
lease or licensing or beyond that imposed by Applicable Legal Requirements.

 

3.9    Contracts and Commitments/Licenses and Permits.    Schedule 3.9 to the
Seller Disclosure Letter sets forth a list of each of the following types of
Contracts (other than the Assigned Agreements) to which Seller is a party and
which relates to any of the Purchased Assets or the Business (the “Seller
Agreements”):

 

(a)    any Contract providing for payments (whether fixed, contingent or
otherwise) by or to Seller in an aggregate amount of $10,000 or more;

 

(b)    any Contract with any dealer, distributor, OEM (original equipment
manufacturer), VAR (value added reseller), sales representative or similar party
under which any third party is authorized to sell, sublicense, lease,
distribute, market or take orders for, any product, service or technology of
Seller which is included in the Purchased Assets or which relates to the
Business;

 

(c)    any Contract providing for the development of any software, content
(including textual content and visual, photographic or graphics content),
technology or intellectual property for (or for the benefit or use of) Seller,
or providing for the purchase or license of any software, content (including
textual content and visual, photographic or graphics content), technology or
intellectual property to (or for the benefit or use of) Seller, which software,
content, technology or intellectual property is in any manner used or
incorporated (or is presently contemplated by Seller to be used or incorporated)
in connection with any aspect or element of any product, service or technology
of Seller which is included in the Purchased Assets or which relates to the
Business (other than software generally available to the public at a per copy
license fee of less than $500 per copy);

 

(d)    any joint venture, investment or partnership Contract that has involved,
or is reasonably expected to involve, a sharing of profits, expenses or losses
with any other party or the joint development of any product, service, software
or other technology with any third party;

 

(e)    any Contract with any Business Employee, including any Contract for or
relating to the employment of such Business Employee or providing for any bonus
or severance payment to such Business Employee;

 

(f)    any Contract under which Seller is lessee of or holds or operates any
items of tangible personal property or real property owned by any third party;

 

(g)    any Contract (i) that restricts Seller from freely setting prices for
Seller’s products, services or technologies (including most favored customer
pricing provisions) or that grants any exclusive rights to any party or (ii)
containing any covenant (A) limiting in any respect the right of the Seller to
engage in any line of business, to make use of any Intellectual Property Rights,
develop, market or distribute products or services or compete with any person or
(B) otherwise limiting the right of Seller to sell, distribute or manufacture
any products or services or to purchase or otherwise obtain any Software or
services;

 

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(h)    any Seller IP Rights Agreement, other than standard non-exclusive
licenses to Seller’s customers granted in the ordinary course of business;

 

(i)    any Contract with or commitment to any labor union;

 

(j)    any Governmental Permit;

 

(k)    any Contract obligating Seller to indemnify any person, except for any
licenses of commercial off-the-shelf computer software under shrink-wrap
agreements and standard form agreements and except for standard non-exclusive
licenses to Seller’s customers granted in the ordinary course of business;

 

(l)    any website hosting, collocation, linking, content or data sharing, data
feed, information exchange, order or transaction processing or similar
arrangement relating to the Business; and

 

(m)    any other Contract or other instrument not specified above which is
material to the Purchased Assets or the Business.

 

A true and complete copy of each of the Seller Agreements has been delivered to
or otherwise made available to Parent’s legal counsel.

 

3.10    No Default; No Restrictions.

 

(a)    Each Assigned Agreement and Governmental Permit is in full force and
effect. Seller is not, nor to Seller’s knowledge is any other party, in material
breach or default under any Assigned Agreement or Governmental Permit. No event
has occurred, and no circumstance or condition exists, that (with or without
notice or lapse of time, or both) will, or to Seller’s knowledge, would
reasonably be expected to, (i) result in a material violation or breach by
Seller or, to Seller’s knowledge, any other party of any of the provisions of
any Assigned Agreement or (ii) give any third party, to Seller’s knowledge, (A)
the right to declare a default or exercise any remedy for breach under any
Assigned Agreement, (B) the right to a rebate, chargeback or penalty under any
Assigned Agreement (C) the right to accelerate the maturity or performance of
any obligation of Seller under any Assigned Agreement or (D) the right to
cancel, terminate or modify any Assigned Agreement. No violation, breach or
default of any of the provisions of any Seller Agreement that is not an Assigned
Agreement shall result in any Liability to Parent, Buyer or any of their
respective Subsidiaries. Seller has not received any written notice or other
communication, or, to Seller’s knowledge, oral notice or other communication
regarding any material violation or breach of, or default under, any Assigned
Agreement that has not been cured by Seller or waived by the other party
thereto. Seller has no material Liability for renegotiation of any government
Contracts included in the Assigned Agreements.

 

(b)    None of the Purchased Assets, is bound or affected by any judgment,
injunction, order, decree or Contract (noncompete or otherwise) that, restricts
or prohibits, or purports to restrict or prohibit, Seller or, following the
Closing, Parent, Buyer or any of their respective Subsidiaries, from freely
engaging in the Business by Seller of exclusive rights or licenses.

 

3.11    Intellectual Property.

 

(a)    Seller owns or has the valid right or license to use, possess, develop,
sell, license, copy, distribute, market, advertise and/or dispose of, under all
Intellectual Property Rights used in the conduct of the Business as presently
conducted, including that portion of the Business involving products under
development (such ownership and Intellectual Property Rights being hereinafter
collectively

 

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referred to as the “Seller IP Rights”). Such Seller IP Rights are sufficient for
such conduct of the Business. As used herein, the term “Seller-Owned IP Rights”
means Seller IP Rights that are owned by or exclusively licensed to Seller; and
“Seller-Licensed IP Rights”means Seller IP Rights that are not Seller-Owned IP
Rights.

 

(b)    Neither the execution, delivery and performance of this Agreement and the
Seller Ancillary Agreements, nor the consummation of the transactions
contemplated by this Agreement and/or by the Seller Ancillary Agreements will,
in accordance with their terms: (i) constitute a material breach of or default
under any Contract governing any Seller IP Right (collectively, the “Seller IP
Rights Agreements”); (ii) cause the forfeiture or termination of, or give rise
to a right of forfeiture or termination of, any Seller IP Right or (iii)
materially impair the right of Seller (prior to Closing), and following the
Closing, Parent, Buyer or any of their respective Subsidiaries, to use, possess,
sell or license any Seller-Owned IP Right or to use, possess, or license any
Seller-Licensed IP Rights (other than commercially available software with a
retail purchase price of five hundred ($500) dollars or less) or portion thereof
included in or related to the development, operation or maintenance the
Purchased Assets. Except as set forth in Schedule 3.11(b) to the Seller
Disclosure Letter, there are no royalties, honoraria, fees or other payments
payable by Seller to any third person (other than salaries payable to employees
and independent contractors not contingent on or related to use of their work
product) as a result of the ownership, use, possession, license-in, sale,
marketing, advertising or disposition of any Seller IP Rights by Seller to the
extent necessary for the conduct of the Business or to be able to hold and use
the Purchased Assets, and none will become payable as a result of the
consummation of the transactions contemplated hereby.

 

(c)    The use, development, manufacture, marketing, license, sale, or
furnishing of the Purchased Assets, including portions of the Purchased Assets
under development, does not violate any Contract between Seller and any third
party or, to Seller’s knowledge, infringe or misappropriate any Intellectual
Property Right of any other party, including copyrights in third-party content
sourced from the World Wide Web. There is no pending or, to Seller’s actual
knowledge, threatened claim or litigation contesting the validity, ownership or
right of Seller to exercise any Seller IP Right, nor to Seller’s knowledge, is
there any legitimate basis for any such claim, nor has Seller received any
written notice or, to Seller’s actual knowledge, any oral notice asserting that
any Seller IP Right or the proposed (as stated or represented to Parent, Buyer
or any third party) use, sale, license or disposition thereof conflicts or will
conflict with the rights of any other party, nor, to Seller’s knowledge, is
there any legitimate basis for any such assertion. There is no pending or, to
Seller’s actual knowledge, threatened claim or litigation with respect to or
relating to the Purchased Assets or the Business asserting infringement
(including contributory infringement) of any copyrights in third-party content
that is posted or distributed through the Seller’s websites before the Closing.

 

(d)    To Seller’s knowledge, no current or former employee, consultant or
independent contractor of Seller who performs or performed services in
connection with or relating to the Business or the Purchased Assets: (i) is in
material violation of any term or covenant of any employment Contract, patent
disclosure agreement, invention assignment agreement, nondisclosure agreement,
noncompetition agreement or any other Contract with any other party by virtue of
such employee’s, consultant’s or independent contractor’s being employed by, or
performing services for, Seller in connection with or relating to the Business
or the Purchased Assets or using without permission trade secrets or proprietary
information of others in Seller’s possession or otherwise disclosed to Seller;
or (ii) has developed any technology, software or other copyrightable,
patentable, or otherwise proprietary work for Seller in connection with or
relating to the Business or the Purchased Assets that is subject to any
agreement under which such employee, consultant or independent contractor has
assigned or otherwise granted to any third party any rights (including
Intellectual Property Rights) in or to such technology, software or other
copyrightable, patentable or otherwise proprietary work. Neither the employment
of any employee by Seller in the Business, nor the use by Seller in the Business
of the services of any consultant or

 

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independent contractor prior to Closing, subjects Seller to any Liability to any
third party for improperly soliciting such employee, consultant or independent
contractor to work for Seller, whether such Liability is based on contractual or
other legal obligations to such third party.

 

(e)    Except as otherwise set forth in Schedule 3.11(e), Seller has taken all
necessary and appropriate steps to protect, preserve and maintain the secrecy
and confidentiality of the Seller IP Rights and to preserve and maintain all of
the interests and proprietary rights of Seller in the Seller IP Rights. All
current and former officers, employees, consultants and actual or potential
customers or business partners of Seller having access to confidential
information of Seller with respect to the Business, its customers or business
partners and inventions owned by Seller with respect to the Business, have
executed and delivered to Seller an agreement regarding the protection of such
confidential information and except for Seller’s customers and business
partners, have executed and delivered the assignment of inventions to Seller (in
the case of confidential information of Seller’s customers and business
partners, to the extent required by such customers and business partners); and
copies of all such agreements have been made available to Buyer. Seller has
secured valid written assignments from all current and former consultants,
contractors and employees of Seller who were involved in, or who contributed to,
the creation or development of any Seller-Owned IP Rights, of the rights to such
contributions that may be owned by such persons or that Seller does not already
own by operation of law. No current or former employee, officer, director,
consultant or independent contractor of Seller has any right, license, claim or
interest whatsoever in or with respect to any Seller-Owned IP Rights.

 

(f)    Schedule 3.11(f) to the Seller Disclosure Letter contains a true and
complete list with respect to the Business of: (i) all registrations, made by or
on behalf of Seller with any governmental or quasi-governmental authority
anywhere in the world, of any patents, copyrights, mask works, trademarks,
service marks, Internet domain names or Internet or World Wide Web URLs or
addresses and (ii) all applications for any such registrations. To Seller’s
actual knowledge, all such registered patents, copyrights, trademarks, service
marks, or rights in Internet or World Wide Web domain names or URLs or addresses
owned by Seller are valid, enforceable and subsisting.

 

(g)    Seller owns all right, title and interest in and to all Seller-Owned IP
Rights free and clear of all Encumbrances and licenses (other than licenses,
rights and restrictions contained in the agreements listed in Schedule 3.11(h)
to the Seller Disclosure Letter and standard non-exclusive licenses granted to
Seller’s customers in the ordinary course of business). To Seller’s actual
knowledge, Seller’s right, license and interest in and to all Seller-Licensed IP
Rights are free and clear of all Encumbrances and licenses (other than licenses,
rights and restrictions contained in the agreements listed in Schedule 3.11(h)
to the Seller Disclosure Letter and standard non-exclusive licenses granted to
Seller’s customers in the ordinary course of business).

 

(h)    Schedule 3.11(h) to the Seller Disclosure Letter contains a true and
complete list of: (i) all licenses, sublicenses and other contracts, agreements,
arrangements, commitments and undertakings as to which Seller is a party and
pursuant to which any person is authorized to use any Seller IP Rights, other
than standard non-exclusive licenses to Seller’s customers granted in the
ordinary course of business, and (ii) all licenses, sublicenses and contracts,
agreements, arrangements, commitments and undertakings with respect to the
Business or relating to the Purchased Assets as to which Seller is a party and
pursuant to which Seller is authorized to use any third party Intellectual
Property Rights.

 

(i)    Except as set forth in Schedule 3.11(i)(a) to Seller Disclosure Letter,
neither Seller nor any other party acting on its behalf, has disclosed or
delivered to any party, or permitted the disclosure or delivery to any escrow
agent or other party of, any Seller Source Code. Schedule 3.11(i)(a) to the
Seller Disclosure Letter identifies each Contract pursuant to which Seller has
provided, or is or may be required to provide, Seller Source Code other than as
a deposit of such Seller Source Code into escrow.

 

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No event has occurred, and no circumstance or condition exists, that (with or
without notice or lapse of time, or both) will, or would reasonably be expected
to, nor will the consummation of the transactions contemplated hereby, result in
the disclosure or delivery by Seller or any other party acting on Seller’s
behalf to any party of any Seller Source Code. Schedule 3.11(i) to the Seller
Disclosure Letter identifies each Contract pursuant to which Seller has
deposited, or is or may be required to deposit, with an escrow holder or any
other party, any Seller Source Code and further describes whether the execution
of this Agreement or the consummation of the transactions contemplated hereby,
in and of themselves, would reasonably be expected to result in the release from
escrow of any Seller Source Code. Except as listed in Schedule 3.11(i)(a),
Seller has not granted: (i) any rights to any third party with respect to Seller
Source Code other than rights granted to licensees of Seller Source Code to
modify, adapt or merge the Seller Source Code solely for such licensee’s
internal use; and (ii) any right to any third party to distribute any Seller
Source Code or any derivative works thereof. “Seller Source Code” means,
collectively, any human-readable software source code, or any material portion
or aspect of such source code, or any material proprietary information or
algorithm contained in or relating to any such source code, that constitutes
Seller-Owned IP Rights.

 

(j)    To Seller’s knowledge, there is no unauthorized use, disclosure,
infringement or misappropriation of any Seller IP Rights by any third party,
including any employee or former employee of Seller. Except with respect to
indemnity obligations to Seller’s customers, Seller has not agreed to indemnify
any person for any infringement of any Intellectual Property Right of any third
party by the Purchased Assets.

 

(k)    Seller is in conformance in all material respects with all applicable
contractual commitments, express and implied warranties, product specifications
and product documentation and with respect to any representations relating to
all Software developed by Seller and licensed by Seller to customers of the
Business and all services provided by or through Seller to customers under an
Assigned Agreement of the Business on or before the Closing Date and Seller has
no material Liability (and, to Seller’s knowledge, there is no legitimate basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand against Seller or Buyer giving rise to any
material Liability relating to the Assigned Agreements) for replacement or
repair thereof or other damages in connection therewith in excess of any
reserves therefor reflected in the Seller Financial Statements. Seller has made
available to Buyer all documentation and notes relating to the testing of
Seller’s software products related to the Business and plans and specifications
for software products related to the Business currently under development by
Seller. Seller has taken such actions as are necessary, or appropriate by the
standard of a reasonably competent programmer, to document the software products
related to the Business and any software used in the development, compilation,
maintenance and support of the software products related to the Business, such
that the materials comprising such software, including the source code and
documentation, have been written in a clear and professional manner so that they
may be understood, modified and maintained in an efficient manner by reasonably
competent programmers.

 

(l)    No government funding; facilities of a university, college, other
educational institution or research center; or funding from third parties (other
than funds received in consideration for capital stock of Seller) was used in
the development of the computer software programs or applications owned by
Seller and used in connection with the Business or relating to the Purchased
Assets. No current or former employee, consultant or independent contractor of
Seller, who was involved in, or who contributed to, the creation or development
of any Seller IP Rights, has performed services for the government, university,
college, or other educational institution or research center during a period of
time during which such employee, consultant or independent contractor was also
performing services for Seller.

 

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(m)    Schedule 3.11(m) of the Seller Disclosure Letter lists Open Source
Materials that Seller has used in any way in connection with the Business or in,
with or otherwise relating to the Purchased Assets and describes the manner in
which such Open Source Materials have been used, including, without limitation,
whether and how the Open Source Materials have been modified and/or distributed
by Seller. Except as set forth on Schedule 3.11(m), Seller has not (i)
incorporated Open Source Materials into, or combined Open Source Materials with,
any of the Purchased Assets; (ii) distributed Open Source Materials in
conjunction with any Purchased Asset; or (iii) used Open Source Materials that
create, or purport to create, obligations for Seller with respect to any of the
Purchased Assets or grant, or purport to grant, to any third party, any rights
or immunities under Intellectual Property Rights (including, but not limited to,
using any Open Source Materials that require, as a condition of use,
modification and/or distribution of such Open Source Materials that other
software incorporated into, derived from or distributed with such Open Source
Materials be (a) disclosed or distributed in source code form, (b) be licensed
for the purpose of making derivative works, or (c) be redistributable at no
charge). “Open Source Materials” means all software or other material that is
distributed as “free software”, “open source software” or under a similar
licensing or distribution model, including, but not limited to, the GNU General
Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public
License (MPL), BSD licenses, the Artistic License, the Netscape Public License,
the Sun Community Source License (SCSL) the Sun Industry Standards License
(SISL) and the Apache License.

 

3.12    Compliance with Laws.    Seller has complied in all material respects
with all Applicable Legal Requirements that are applicable or relevant to the
Business. Seller holds all material permits, licenses and approvals from, and
has made all material filings with, Governmental Authorities, that are necessary
for Seller to conduct the Business without any material violation of Applicable
Legal Requirements (“Governmental Permits”), which Governmental Permits are set
forth on Schedule 3.12 to the Seller Disclosure Letter, and all such
Governmental Permits are in full force and effect. Seller has not received any
written notice or other written communication from any Governmental Authority
regarding (i) any actual or possible violation of Applicable Legal Requirements
that are applicable or relevant to the Business or any Governmental Permit or
any failure to comply with any term or requirement of any Governmental Permit or
(ii) any actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental Permit.

 

3.13    Certain Transactions and Agreements.    None of the officers and
directors of Seller, and, to the knowledge of Seller, none of the Business
Employees or Affiliates of Seller or any member of the immediate families of
such officers, directors, Business Employees or Affiliates, has any direct
ownership interest in any firm or corporation that competes with, or does
business with, or has any Contract with, the Business (except with respect to
any interest in less than one percent (1%) of the stock of any corporation whose
stock is publicly traded). None of said officers, directors, Business Employees,
Affiliates or family members has any interest in any of the Purchased Assets or
any property that is used in or pertains to the Business.

 

3.14    Employee Matters.

 

(a)    General.    Seller is in compliance in all material respects with all
Applicable Legal Requirements that are applicable or relevant to the Business
regarding employment practices, terms and conditions of employment, and wages
and hours (including ERISA, the WARN Act or any similar national, state or local
law) and has correctly classified Business Employees as exempt employees and
non-exempt employees under the Fair Labor Standards Act. Seller has no Contract
with Business Employees currently in effect that are not terminable at will
(other than agreements with the sole purpose of providing for the
confidentiality of proprietary information or assignment of inventions). Each of
the Business Employees is legally permitted to be employed by Seller in the
jurisdiction in which such

 

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Business Employee is employed. Seller, with respect to the Business: (i) has
never been and is not now subject to a union organizing effort; (ii) is not
subject to any collective bargaining agreement with respect to any Business
Employee; (iii) is not subject to any other Contract with any trade or labor
union, employees’ association or similar organization and (iv) has no current
labor disputes and has had no material labor disputes or claims of unfair labor
practices. To Seller’s knowledge, Seller has good labor relations with the
Business Employees, and Seller has no knowledge of any facts indicating that the
consummation of the transactions provided for herein will adversely affect such
labor relations, and Seller has no knowledge that any Business Employee intends
to leave Seller’s employ or to decline to accept employment with Parent or Buyer
following the Closing. No Business Employee has given written notice that such
Business Employee intends to terminate his or her employment with Seller. There
are no strikes, material slowdowns, work stoppages or lockouts, or threats
thereof by or with respect to any Business Employees.

 

(b)    Employee Plans.    Schedule 3.14(b) to the Seller Disclosure Letter
contains a list of all employment and consulting agreements and Employee Plans.
Seller has made available true and complete copies or descriptions of all the
Employee Plans to Buyer’s legal counsel. No Employee Plan is a “multiemployer
plan” within the meaning of Section 3(37) or ERISA, and no Employee Plan is
subject to Title IV of ERISA or Section 412 of the Code. Neither Seller nor any
of its Affiliates has incurred any Liability under Title IV of ERISA arising in
connection with the termination of any plan covered or previously covered by
Title IV of ERISA or Section 412 of the Code that could become, after the
Closing Date, an obligation of Buyer or any of its Affiliates. Each Employee
Plan which is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified during the period from its adoption to date,
and each trust forming a part thereof is exempt from Tax pursuant to Section
501(a) of the Code. No Business Employee will become entitled to any retirement,
severance or similar benefit or enhanced benefit solely as a result of the
transactions contemplated hereby. In addition, within the past five years,
Seller has never been a participant in any “prohibited transaction,” within the
meaning of Section 406 of ERISA with respect to any employee pension benefit
plan (as defined in Section 3(2) of ERISA) which it sponsors as employer or in
which it participates as an employer, which was not otherwise exempt pursuant to
Section 408 of ERISA (including any individual exemption granted under Section
408(a) of ERISA), or which could result in an excise Tax under the Code. No
Employee Plan provides, or has any liability to provide, retiree life insurance,
retiree health or other retiree employee welfare benefits to any person for any
reason, except as may be required by COBRA or other applicable statute, and
Seller has never represented, promised or contracted (whether in oral or written
form) to any Business Employee (either individually or to Business Employees as
a group) or any other person that such Business Employee(s) or other person
would be provided with retiree life insurance, retiree health or other retiree
employee welfare benefit, except to the extent required by statute. Each
Employee Plan has been established, maintained and administered in material
compliance with its terms and conditions and with the requirements prescribed by
any and all statutory or regulatory laws that are applicable to such Employee
Plan.

 

(c)    Immigration Law Compliance.    No Business Employee holds any visa from
the United States government, and Seller is not sponsoring any Business
Employees with respect to any visa or other authorization. All Business
Employees were hired in compliance with all laws, statutes, regulations and
requirements for the lawful hiring of employees who are not citizens of the
United States of America.

 

(d)    Effect of Transaction.    Except as expressly contemplated by this
Agreement, the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Employee
Plan, trust or loan that will or may result in any payment (whether of severance
pay or

 

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otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any Business
Employee.

 

(e)    No Employment Agreements.    To Seller’s knowledge, no Business Employee
is in material violation of any term of any employment Contract or any
restrictive covenant relating to the right of any such Business Employee to be
employed by Seller or to use trade secrets or proprietary information of others,
and the employment of any Business Employee does not subject Seller to any
liability to any third party.

 

(f)    Employee List.    Schedule 3.14(f) to the Seller Disclosure Letter
contains a complete and accurate list of the Business Employees. As to all such
Business Employees, Seller has provided Parent and Buyer with a writing setting
forth the locations at which such Business Employees are working as of the
Agreement Date, their date of hire and current base salary together with a
complete and accurate list of all written employment contracts (if any) related
to any of such Business Employees.

 

(g)    Continuation of Coverage; COBRA.    The group health plans (as defined in
Section 4980B(g) of the Code) that benefit Business Employees are in compliance,
in all material respects, with the continuation coverage requirements of Section
4980B of the Code. There are no material outstanding, uncorrected violations
under COBRA with respect to any of the Employee Plans that could materially
adversely affect the Business or the Purchased Assets after the Closing Date.

 

(h)    No Representations to Employees or Consultants of Seller.    Seller has
made no representations to any Business Employee concerning the length of time
(if any) that the Business Employee’s work or employment with Parent or Buyer
may continue or the compensation or benefits or other terms or conditions of
employment (if any) with Parent or Buyer to be offered to Business Employees by
Parent or Buyer.

 

3.15    No Brokers.    Except for fees payable to First Albany Corporation,
Seller is not obligated for the payment of any fees or expenses of any
investment banker, broker, finder or similar party in connection with the
origin, negotiation or execution of this Agreement and the Seller Ancillary
Agreements or in connection with the transactions contemplated hereby and
thereby. Neither Parent nor Buyer will incur any Liability, either directly or
indirectly, to any such investment banker, broker, finder or similar party as a
result of any Contract entered into by Seller relating to this Agreement, any of
the Seller Ancillary Agreements, the transactions contemplated hereby and
thereby or any act or omission of Seller, any of its employees, officers,
directors, stockholders, agents or Affiliates.

 

3.16    Books and Records.

 

(a)    The books, records and accounts of Seller relating to the Business, the
Purchased Assets or Assumed Liabilities (i) are in all material respects true,
complete and correct, (ii) have been maintained in all material respects in
accordance with good business practices on a basis consistent with prior years,
(iii) are stated in all material respects in reasonable detail and accurately
and fairly reflect the transactions and dispositions of the assets of Seller in
all material respects and (iv) accurately and fairly reflect the basis for the
Seller Financial Statements.

 

(b)    Seller has devised and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary (A) to permit preparation of financial
statements in conformity with GAAP or any other criteria applicable to such
statements and (B) to maintain accountability for assets and (iii) the amount
recorded for assets on the

 

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books and records of Seller is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

3.17    [Intentionally Omitted].

 

3.18    Fairness of Consideration.    Seller’s Board of Directors has determined
that the Purchase Price (including Buyer’s assumption of the Assumed
Liabilities) represents fair and reasonably equivalent consideration for the
Purchased Assets and title thereto to be transferred to Buyer at the Closing
under this Agreement. Seller’s Board of Directors has received a written opinion
from First Albany Corporation, dated as of the date hereof, to the effect that,
as of the date hereof, the Asset Purchase is fair to Seller from a financial
point of view.

 

3.19    Privacy.    Seller’s collection, use, storage, transfer and disclosure
of any personally identifiable information (“Privacy Practices”), and use by
third parties having authorized access to the Seller’s websites or other
records, in each case as it relates to the Business or Purchased Assets, does
conform, and at all times has conformed, in all material respects to all
Applicable Legal Requirements, and all contractual commitments of Seller to its
customers and the viewers of the Seller’s websites, relating to such practices.
With respect to the Purchased Assets and Business, Seller’s Privacy Practices
have been consistent with all statements or representations made to customers,
potential customers and third parties, whether orally or in writing, regarding
such practices. To the extent applicable to the Business or Purchased Assets,
Seller has taken all necessary and appropriate steps to be in compliance with 45
C.F.R. §160 and §164 and the Transaction and Code Set Standards as promulgated
by the U.S. Department of Health and Human Services.

 

3.20    No Other Negotiations.    During the period from May 20, 2003 through
and including June 24, 2003, neither Seller nor any of its officers, directors,
stockholders, employees, Affiliates, attorneys, financial advisors or other
agents or representatives has, directly or indirectly, solicited, initiated,
sought, facilitated, encouraged, entertained, discussed, supported, or
negotiated any inquiry, proposal or offer from, furnished any information to, or
participated in any discussions or negotiations with, any party (other than
Parent or Buyer) regarding any (i) acquisition of Seller, (ii) merger,
consolidation or similar transaction with or involving Seller or (iii)
disposition of all or any substantial portion of the Business, assets or
securities of Seller, including any of the Purchased Assets, or an exclusive
license of any technology of Seller, other than in the ordinary course of
business (other than with respect to any discussions, proposals or offers with
respect to the possible disposition of Seller’s Foodmark Subsidiary) (each, an
“Acquisition Transaction”).

 

3.21    Disclosure.

 

(a) Neither this Agreement, any of the Seller Ancillary Agreements nor the
Seller Disclosure Letter (including all Schedules thereto) delivered by Seller
to Parent and Buyer under this Agreement, taken together, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make any statement contained herein or therein, in light of the
circumstances under which any such statement was made, not misleading.

 

(b) The information (i) supplied by Seller for inclusion or incorporation by
reference in the Permit Application, the Hearing Notice and the Information
Statement, at the time each is filed with the California Commissioner, and in
the case of the Hearing Notice and Information Statement, at the time each is
mailed to the holders of Seller Common Stock, and (ii) supplied by Seller for
inclusion or incorporation by reference in the Seller Proxy Statement, at the
time it is filed with the SEC, at the time it is mailed to the holders of Seller
Common Stock and at the time of the meeting of Seller’s stockholders to consider
adoption of this Agreement and approval of the Asset Purchase (the “Seller
Stockholder

 

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Meeting”), and in all cases at all times subsequent thereto (through and
including the Closing), shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not false or misleading; or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Seller Stockholder Meeting
which has become false or misleading. If at any time prior to the Closing Date
any event relating to Seller or any of its Affiliates, officers or directors
should be discovered by Seller which is required to be set forth in a supplement
to the Permit Application or Seller Proxy Statement, Seller shall promptly
inform Parent and Buyer.

 

3.22    Seller Customers.    Schedule 3.22 to the Seller Disclosure Letter is a
true and complete list of each customer, client or licensee of the Business for
which Seller is currently performing services, or has provided services or sold
or licensed products to since January 1, 2000 (the “Seller Customers”) and, with
respect to each such Seller Customer, states what products or services were
sold, licensed or provided to and the fees charged for each such Seller Customer
through the Agreement Date. The Seller Customer Assets are accurate and complete
in all material respects. Seller has no outstanding material disputes concerning
its products and services with any Seller Customers, and Seller has no actual
knowledge of any material dissatisfaction on the part of any such Seller
Customer. Seller has not received any written, or, to Seller’s actual knowledge,
oral information from any Seller Customer, and has no reason to believe, that
such Seller Customer shall not continue as a customer of Parent or Buyer after
the Closing or intends to terminate or materially modify existing Contracts with
Seller.

 

3.23    Environmental Compliance.    Seller has at all times prior to the date
of this Agreement and prior to the Closing Date complied in all material
respects with all applicable Environmental Laws both in respect of the Business
as carried on from time to time and in respect of any of the facilities at which
the Business is now conducted or at which any Purchased Assets are located
(each, a “Facility”) and any prior facility or site at which the Business or at
which any Purchased Assets have been located (each, a “Prior Facility”). Seller
is not aware of any circumstances that may cause Seller to be in material
non-compliance or violation of any Environmental Laws and Seller is not aware of
any circumstances affecting the Business that would reasonably be expected to
justify the imposition of any requirement by a competent authority in accordance
with such authority’s powers and obligations under the Environmental Laws which
would, if the requirement were not complied with, result in there being a
material non-compliance or violation of any Environmental Laws. There are no
past, pending or, to Seller’s knowledge, threatened proceedings, claims or
actions against Seller brought under any Environmental Laws before any court,
arbitrator or other body which have had or which would, in the event of a
judgment, decision, ruling or order being unfavorable to Seller, have a Material
Adverse Effect on the Business or any of the Purchased Assets. To Seller’s
knowledge, no part of any Facility or any Prior Facility has been contaminated
(whether by the deposit, spillage, disposal, discharge, release or leaching) in
any material respect by any Hazardous Substances that represents a material
hazard to health or to the environment.

 

3.24    Accounts Receivable.    All of the Seller Receivables as of the date
hereof are set forth on Schedule 3.24 to the Seller Disclosure Letter (the
“Receivables List”). The Receivables List contains a true, correct and complete
aging list of all of the Seller Receivables, including the amount of each such
Seller Receivable as of the Agreement Date (which Receivables List will be
updated to reflect the Seller Receivables as of the Closing Date and be
delivered to Buyer at least one Business Day prior to the Closing Date). All of
the Seller Receivables (i) represent sales actually made or services actually
provided by Seller in the ordinary course of business consistent with its past
practices, (ii) are current, valid and genuine, (iii) represent a binding
obligation of the account party in the book amounts thereof and (iv) are not
subject to any discounts, right of offset or defense against payment of any
amount thereof.

 

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3.25    Investment Representations.    To the extent Shares become issuable
pursuant to Section 5.3(c), Seller represents and warrants that:

 

(a)    Purchase for Own Account.    The Shares to be purchased by Seller
hereunder shall be acquired for investment for Seller’s own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act, and Seller has no intention of
selling, granting any participation in, or otherwise presently distributing the
same in violation of the Securities Act or any applicable federal or state
securities law and the rules and regulations thereunder.

 

(b)    Disclosure of Information.    At no time was Seller presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and issuance of the Shares. Seller has received or has had
full access to all of the information it considers necessary or appropriate to
make an informed investment decision with respect to the Shares to be issued to
Seller under this Agreement. Seller further has had an opportunity to ask
questions and receive answers from Parent and Buyer regarding the terms and
conditions of the offering of the Shares and to obtain additional information
(to the extent Parent or Buyer possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any information
furnished to Seller or to which Seller had access. The foregoing, however, does
not in any way limit or modify the representations and warranties made by Parent
and Buyer in Article 4, “Representations and Warranties of Parent and Buyer.”

 

(c)    Accredited Investor Status.    Seller is an “accredited investor” within
the meaning of Regulation D under the Securities Act. Seller is a corporation,
not formed for the purpose of acquiring the Shares.

 

(d)    Investment Experience.    Seller understands that an investment in the
Shares involves substantial risk. Seller acknowledges that Seller is able to
fend for itself, Seller can bear the economic risk of Seller’s investment in the
Shares and Seller’s board of directors has such knowledge and experience in
financial or business matters that Seller is capable of evaluating the merits
and risks of this investment in the Shares and protecting its own interests in
connection with this investment.

 

(e)    Restricted Securities.    Seller understands that the Shares are
characterized as “restricted securities” under the Securities Act inasmuch as
they are being acquired in a transaction not involving a public offering and
that under the Securities Act such securities may be resold without registration
under the Securities Act only in certain limited circumstances. In this
connection, Seller represents that Seller is familiar with Rule 144 of the
Securities and Exchange Commission, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act. Seller understands
that Parent is under no obligation to register any of the Shares except as
provided in Section 5.3.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER

 

Parent and Buyer, jointly and severally, represent and warrant to Seller that,
except as set forth in the letter from Parent and Buyer addressed to Seller and
dated as of the date hereof, which letter has been delivered by Parent and Buyer
to Seller concurrently with the parties’ execution of this Agreement (the
“Parent Disclosure Letter”), each of the representations, warranties and
statements contained in the following sections of this Article 4 is true and
correct as of the date hereof and will be true and correct as of the Closing
Date (other than such representations and warranties that are expressly made as
of another

 

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date, in which case such representations and warranties are true and correct as
of such other specified date).

 

4.1    Organization and Good Standing.    Each of Parent and Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Parent and Buyer has the corporate power and
authority to own, operate and lease its properties and to carry on its business
as now conducted and as presently proposed to be conducted, and is qualified to
conduct business, and is in good standing, in each jurisdiction in which the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification necessary, except where such failure would
not have a Material Adverse Effect on Parent or Buyer.

 

4.2    Power; Authorization and Validity.

 

(a)    Power and Authority; Due Authorization.    Each of Parent and Buyer has
all requisite corporate power and authority to enter into, execute, deliver and
perform its obligations under this Agreement and each of the Buyer Ancillary
Agreements and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by each of Parent and Buyer of this
Agreement and each of the Buyer Ancillary Agreements, and the purchase of the
Purchased Assets by Buyer, have been duly and validly approved and authorized by
all necessary corporate action on the part of Parent and Buyer.

 

(b)    Consents.    No consent, approval, order or authorization of,
notification to, action by or registration, declaration or filing with, any
Governmental Authority, or any other person, governmental or otherwise, is
necessary or required to be made or obtained by Parent or Buyer to enable each
of Parent and Buyer to lawfully enter into, execute, deliver and perform its
respective obligations under this Agreement and each of the Buyer Ancillary
Agreements, or to consummate the transactions contemplated hereby or thereby.

 

(c)    Enforceability.    This Agreement has been duly executed and delivered by
Parent and Buyer. This Agreement and each of the Buyer Ancillary Agreements are,
or when duly executed and delivered by Parent and Buyer shall be, valid and
binding obligations of Parent and/or Buyer, as applicable, enforceable against
Parent and/or Buyer, as applicable, in accordance with their respective terms,
subject only to the effect, if any, of (i) applicable bankruptcy and other
similar laws affecting the rights of creditors generally and (ii) rules of law
and equity governing specific performance, injunctive relief and other equitable
remedies.

 

4.3    Parent Exchange Act Documents.

 

(a)    Parent has filed all forms, reports and documents (together with any
required amendments thereto) required to be filed by Parent with the SEC since
December 31, 2000. All such required forms, reports and documents (including
those that Parent may file subsequent to the date hereof) are referred to herein
as the “ParentExchange Act Documents.” As of their respective dates, the Parent
Exchange Act Documents (i) were prepared in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Parent Exchange Act
Documents and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent corrected prior to the date of this
Agreement by a subsequently filed Parent Exchange Act Document. The Parent
Exchange Act Documents, taken as a whole, together with any press release that
is broadly disseminated after the date of the most recent Parent Exchange Act

 

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Documents and the date of this Agreement, do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Parent’s
Subsidiaries is required to file any forms, reports or other documents with the
SEC.

 

(b)    Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Parent Exchange Act Documents (the
“Parent Financial Statements”), including each Parent Exchange Act Document
filed after the Agreement Date until the Closing, (i) complied as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 10-Q, Form 8-K or any successor form under
the Exchange Act) and (iii) fairly presented the consolidated financial position
of Parent and its Subsidiaries as at the respective dates thereof and the
consolidated results of Seller’s operations and cash flows for the periods
indicated, except that the unaudited interim financial statements may not
contain footnotes and were or are subject to normal and recurring year-end
adjustments. The balance sheet of Parent contained in Parent’s Annual Report on
Form 10-K for the year ended December 31, 2002 is hereinafter referred to as the
“Parent Balance Sheet.” Except as disclosed in the Parent Financial Statements,
since the date of the Parent Balance Sheet, neither Parent nor any of its
Subsidiaries has any liabilities required under GAAP to be set forth on a
balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its Subsidiaries taken as a
whole, except for liabilities for accrued expenses incurred since the date of
the Parent Balance Sheet in the ordinary course of business consistent with past
practices and liabilities incurred in connection with this Agreement.

 

(c)    Parent has heretofore furnished to Seller a complete and correct copy of
any amendments or modifications, which have not yet been filed with the SEC but
which are required to be filed, to agreements, documents or other instruments
which previously had been filed by Parent with the SEC pursuant to the
Securities Act or the Exchange Act.

 

4.4    Capitalization.

 

(a)    The authorized capital stock of Parent consists of 300,000,000 shares of
Parent Common Stock and 5,000,000 shares of Parent Preferred Stock. The rights
and privileges of each class of Parent’s capital stock are set forth in the
Parent’s Certificate of Incorporation. As of the close of business on July 15,
2003, 18,983,880 shares of Parent Common Stock were issued and outstanding and
no shares of Parent Preferred Stock were issued or outstanding. No material
change in such capitalization has occurred since July 15, 2003.

 

(b)    Schedule 4.4(b) of the Parent Disclosure Letter sets forth a complete and
accurate list, as of the Agreement Date, of: (i) all stock option plans or other
stock or equity-related plans of Parent (the “Parent Stock Plans”), indicating
for each Parent Stock Plan the number of shares of Parent Common Stock issued to
date under such Plan, the number of shares of Parent Common Stock subject to
outstanding options under such Plan and the number of shares of Parent Common
Stock reserved for future issuance under such Plan; and (ii) the number of
shares of Parent capital stock, and the class or series of such shares, subject
to any outstanding warrants or other contractual rights to purchase or acquire
capital stock of the Parent. Except as set forth in this Section 4.4 or the
Parent Disclosure Letter, as of the Agreement Date, (i) no subscription,
warrant, option, convertible security or other right (contingent or otherwise)
to purchase or acquire any shares of capital stock of Parent is authorized or
outstanding, (ii) Parent has no obligation (contingent or otherwise) to issue
any subscription, warrant, option, convertible security or other such right, or
to issue or distribute to holders of any shares of its

 

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capital stock any evidences of indebtedness or assets of Parent, (iii) Parent
has no obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or to make any other distribution in respect thereof, and (iv) there
are no outstanding or authorized stock appreciation, phantom stock or similar
rights with respect to Parent.

 

4.5    No Conflict.    Neither the execution and delivery of this Agreement or
any of the Buyer Ancillary Agreements by Parent or Buyer, nor the consummation
of the transactions contemplated hereby or thereby, will conflict with, or (with
or without notice or lapse of time, or both) result in a termination, breach,
impairment or violation of, or constitute a default under: (i) any provision of
the Certificate of Incorporation or Bylaws of Parent or Buyer, each as currently
in effect; (ii) any Applicable Legal Requirements or (iii) any Contract (whether
oral or in writing) to which Parent or Buyer is a party or by which Parent or
Buyer is bound, except in the cases of clauses (ii) and (iii), where such
conflict, termination, breach, impairment, violation or default would not have a
Material Adverse Effect on Parent or Buyer.

 

4.6    Litigation.    Except as required to be disclosed in the Parent Exchange
Act Documents, there is no claim, action, suit, arbitration, mediation,
investigation or proceeding of any nature in progress or pending or, to Parent’s
knowledge, threatened against Parent (or against any officer, director, employee
or agent of Parent in their capacity as such or relating to their employment,
services or relationship with Parent) before any court, Governmental Authority,
arbitrator or mediator. Except as required to be disclosed in the Parent
Exchange Act Documents, there is no judgment, decree, injunction, rule or order
of any court, Governmental Authority or arbitrator pending or binding against
Parent. To Parent’s knowledge, there is no reasonable basis for any person to
assert a claim against Parent, Buyer or Seller based upon Parent and Buyer
entering into this Agreement or any of the Buyer Ancillary Agreements or
consummating the transactions contemplated hereby or thereby.

 

4.7    No Brokers.    Neither Parent nor Buyer, nor any Affiliate of Parent or
Buyer, is obligated for the payment of any fees or expenses of any investment
banker, broker, finder or similar party in connection with the origin,
negotiation or execution of this Agreement and the Buyer Ancillary Agreements or
in connection with the transactions contemplated hereby and thereby. Seller will
not incur any Liability, either directly or indirectly, to any such investment
banker, broker, finder or similar party as a result of any Contract entered into
by Parent or Buyer relating to this Agreement, any of the Buyer Ancillary
Agreements, the transactions contemplated hereby and thereby or any act or
omission of Parent or Buyer, or any of its respective employees, officers,
directors, stockholders, agents or Affiliates.

 

4.8    Valid Issuance of Stock.    The Shares, when issued and delivered as
provided in this Agreement, shall be duly authorized and validly issued, fully
paid and nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer pursuant to this Agreement and/or pursuant to federal
and state securities laws.

 

4.9    Nasdaq Requirements.    Parent shall comply with all applicable
requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Shares and the listing thereof on The Nasdaq
National Market.

 

4.10    Absence of Certain Changes.     Since the date of the Parent Balance
Sheet, Parent has operated its business in the ordinary course consistent with
its past custom and practice, and since such date there has not been with
respect to Parent any Material Adverse Change with respect to Parent.

 

4.11    Registration Obligations.    Parent has not committed to (i) register
any Parent Common Stock under the Securities Act or (ii) issue shares pursuant
to a permit in connection with a hearing to be held by the California
Commissioner pursuant to Section 25142 of the California Securities Law and

 

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conducted in compliance with Section 3(a)(10) of the Securities Act, in each
case to the extent such commitment could prevent, prior to the Termination Date,
Parent’s issuance of the Shares to be issued to Seller in accordance with
Section 5.3 of this Agreement.

 

ARTICLE 5

OTHER COVENANTS AND AGREEMENTS

 

5.1    Advice of Changes.    Seller covenants and agrees that, during the
Pre-Closing Period, it shall promptly advise Parent in writing of any Material
Adverse Change in the Purchased Assets or the Business. Each of Seller, on the
one hand, and Parent and Buyer, on the other hand, shall give prompt written
notice to the other of: (i) any event occurring after the date hereof that would
render any representation or warranty of such party contained in this Agreement
or any of the Seller Ancillary Agreements or Buyer Ancillary Agreements, as the
case may be, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material respect (except for any representation or
warranty that is only made as of a particular date); (ii) any breach of any
covenant or obligation of such party pursuant to this Agreement or any of the
Seller Ancillary Agreements or Buyer Ancillary Agreements, as the case may be;
(iii) any notice or other communication from any person not listed on Schedule
3.2(c) of the Seller Disclosure Letter alleging that the consent of such person
is or may be required in connection with the transactions contemplated by this
Agreement, any of the Seller Ancillary Agreements or any of the Buyer Ancillary
Agreements; (iv) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement,
any of the Seller Ancillary Agreements or any of the Buyer Ancillary Agreements
and (v) any litigation relating to, involving or otherwise relating to the
consummation of the transactions contemplated by this Agreement, any of the
Seller Ancillary Agreements or any of the Buyer Ancillary Agreements.

 

5.2    Conduct of Business Prior to the Closing.    Seller covenants and agrees
that, from the period beginning on the date hereof and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Closing (the “Pre-Closing Period”), Seller shall continue to conduct the
Business in the ordinary course consistent with past practice, and it will use
its commercially reasonable best efforts to preserve the Business and
relationships with Seller Customers, suppliers, licensors, licensees, Business
Employees, consultants and others with whom it has business dealings in
connection with the Business. During the Pre-Closing Period, if any Seller
Knowledge Party becomes aware of a deterioration in the relationship with any
Seller Customer listed on Schedule 5.2(a) of the Seller Disclosure Letter (a
“Material Seller Customer”) or a material deterioration in the relationship with
any supplier, licensor, licensee, Business Employee, consultant or business
partner in connection with the Business, it will promptly bring such information
to Parent’s and Buyer’s attention in writing and, if requested by Parent or
Buyer, will exert its commercially reasonable efforts to promptly restore the
relationship. During the Pre-Closing Period, if any Parent Knowledge Party
becomes aware of a deterioration in the relationship with any Material Seller
Customer it will promptly bring such information to Seller’s attention in
writing. During the Pre-Closing Period, if any Parent Knowledge Party becomes
aware of a deterioration in the relationship with any customer of Parent listed
on Schedule 5.2(b) of the Parent Disclosure Letter, it will promptly bring such
information to Seller’s attention in writing and, if requested by Seller, will
exert its commercially reasonable efforts to promptly restore the relationship.
During the Pre-Closing Period, Seller shall not, with respect to the Business
without Parent’s prior written consent:

 

(a)    take any action that would reasonably be expected to result in any breach
of any representation or warranty of Seller set forth in Article 3,
“Representations and Warranties of Seller”;

 

(b)    take any action which would reasonably be expected to result in a
Material Adverse Change with respect to the Business as currently conducted or
the Purchased Assets;

 

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(c)    sell, transfer, assign, convey, lease, encumber, move, relocate or
otherwise dispose of any of the Purchased Assets;

 

(d)    take any action that could reasonably be expected to result in the
incurrence, creation or assumption by Seller of (i) any Encumbrance on any of
the Purchased Assets, (ii) any Liabilities or any indebtedness for borrowed
money, in each case, that would be an Assumed Liability or (iii) any contingent
Liability that would be an Assumed Liability as a guarantor or surety with
respect to the obligations of others;

 

(e)    enter into any material transaction or agreement or take any other
action, in each case not in the ordinary course of business consistent with past
practice;

 

(f)    amend or terminate any Assigned Agreement, except such Assigned
Agreements that expire upon their terms;

 

(g)    enter into any Contract with a customer with respect to the Purchased
Assets or Business (i) that does not permit assignment of such Contract to
Purchaser or Buyer, (ii) involving payments of $250,000 or more in license fees
or (iii) involving payments of less than $250,000 in license fees if such
Contract is on terms inconsistent with the past conduct of Seller’s business in
the ordinary course, including any Contract that includes (A) material pricing
discounts based on the prices that Seller has historically charged customers for
similar products or services, (B) guaranteed refund rights or (C) specific
performance metrics that Seller must satisfy in order to receive full payment
under the Contract; provided, however, that Parent will be deemed to have
consented to any such Contract in the event that either (i) Parent does not
respond to Seller’s written request for approval of such Contract within five
days of receiving such written request or (ii) Parent does not respond to
Seller’s written request for approval of such Contract within 48 hours of
receiving such written request in the event that Seller makes such written
request during the last two weeks of a fiscal quarter; provided, further, that
Parent will not unreasonably withhold its written consent with respect to any
Contract subject to this Section 5.2(g) submitted for Parent’s approval by
Seller;

 

(h)    waive or release any material right or claim with respect to the
Purchased Assets or Business;

 

(i)    license any of its technology or Intellectual Property Rights, or acquire
any Intellectual Property Rights or any license thereto from any third party,
other than pursuant to standard non-exclusive licenses to Seller’s customers
granted in the ordinary course of business;

 

(j)    fail to maintain its equipment and other assets that are Purchased Assets
in good working condition and repair according to the standards it has
maintained to the date hereof, subject only to ordinary wear and tear;

 

(k)    terminate the employment of any Business Employees, except for cause so
long as prior written notice is provided to Parent;

 

(l)    with respect to any Business Employee, increase or modify in any material
respect the rate of remuneration or any other benefit or consideration
(including benefits payable under Employee Plans and whether payable in cash,
stock, equity securities, property or otherwise), or any other terms of
employment, or grant any severance or termination pay in cash or otherwise
except pursuant to written agreements outstanding as of the Agreement Date and
as disclosed and provided to Parent and Buyer, or policies existing, on the
Agreement Date and as previously disclosed in writing or made

 

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available to Parent and Buyer, or adopt any new severance plan, amend or modify
or alter in any manner any severance plan, agreement or arrangement existing on
the Agreement Date hereof or grant any bonus, payment or equity-based
compensation to any Business Employee (except as expressly permitted by this
Agreement), whether payable in cash, stock or other securities;

 

(m)    amend its Certificate of Incorporation or Bylaws in a manner inconsistent
with the terms of this Agreement, the Seller Ancillary Agreement or the
transactions contemplated hereby and thereby;

 

(n)    materially change the pricing or other material terms of Seller’s
products or services related to the Business; or

 

(o)    agree to do any of the things described in the preceding clauses (a)
through (o).

 

5.3    Permit; Fairness Hearing.

 

(a)    As soon as practicable after the Agreement Date, and in any event within
ten Business Days after the Agreement Date, (i) Parent and Buyer shall prepare,
with the cooperation of Seller, (A) an application for the Permit (the “Permit
Application”) in connection with the hearing held by the California
Commissioner, pursuant to Section 25142 of the California Securities Law and
conducted in compliance with Section 3(a)(10) of the Securities Act, to consider
the terms and conditions of this Agreement and the Asset Purchase and the
fairness of such terms and conditions (the “Hearing”) and (B) the notice of the
Hearing (the “Hearing Notice”) to be sent to Seller pursuant to, and meeting the
requirements of, the California Administrative Code, Title 10, Chapter 3,
Subchapter 1, Article 2, as amended, concerning the Hearing, and (ii) Seller
shall prepare, with the cooperation of Parent and Buyer, an information
statement relating to this Agreement and the transactions contemplated hereby
(the “Information Statement”) which Information Statement may, at Seller’s
option if permitted by Applicable Legal Requirements, be combined with the
Seller Proxy Statement described in Section 5.4. Each of Seller, Parent and
Buyer shall use its reasonable best efforts to cause the Permit Application, the
Hearing Notice and the Information Statement to comply with all Applicable Legal
Requirements, including all applicable federal and state securities laws.

 

(b)    Each of Parent, Buyer and Seller shall use its reasonable best efforts
(i) to cause the Permit Application, the Hearing Notice and the Information
Statement to be filed with the California Commissioner, as soon as practicable
following the Agreement Date, (ii) to deliver the Hearing Notice to Seller, as
soon as permitted by the California Commissioner, (iii) to obtain, as soon as
practicable thereafter, the Permit and (iv) to deliver the Information Statement
to Seller as soon as practicable following the issuance, if any, of the Permit.

 

(c)    In the event that Parent and Seller determine in writing that the Permit
cannot be obtained, or cannot reasonably be expected to be obtained, in time to
permit the Closing to occur on or before the Termination Date, or if the
California Commissioner notifies Parent, Buyer or Seller of the California
Commissioner’s determination not to grant the Hearing, not to permit the mailing
of the Hearing Notice and/or not to issue the Permit, then Parent shall issue
the Shares in a transaction exempt from registration under the Securities Act
under Section 4(2) thereof and/or Regulation D promulgated under the Securities
Act and the exemptions from qualification under applicable state securities
laws. If the Shares are issued pursuant to Section 4(2) and/or Regulation D, the
Shares may not be reoffered or resold other than pursuant to the registration
requirements of the Securities Act or an exemption therefrom. The certificates
issued by Parent with respect to the Shares shall, if issued pursuant to Section
4(2) and/or Regulation D, be legended to the effect described above and shall
include such additional legends as necessary to comply with Applicable Legal
Requirements, including all applicable federal and

 

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state securities laws, and such other restrictions as shall be deemed necessary
and appropriate by Parent. If the Shares are issued pursuant to Section 4(2)
and/or Regulation D, then Parent agrees that at such time as it is eligible to
use a registration statement on Form S-3 to register Parent Common Stock under
the Securities Act, Parent shall use its reasonable best efforts to promptly
prepare and file a registration statement with the SEC covering the resale of
such Shares; provided, however, that if Parent has not filed with the SEC a
registration statement on Form S-3 by January 15, 2004, then Parent will
promptly prepare and file a registration statement on Form S-1 with the SEC
covering the resale of such Shares (the registration statement filed with the
SEC on Form S-1 or Form S-3, the “Resale Registration Statement”). Parent shall
use its reasonable best efforts to cause such registration statement to become
effective as promptly as practicable after filing and to keep such Resale
Registration Statement continuously effective until all the Shares are saleable
within a three-month period pursuant to Rule 144 of the Securities Act.

 

(d)    Parent and Seller will bear, pay and be responsible in equal proportions
for all costs and expenses, including fees and disbursements of counsel,
financial advisors and accountants, incurred by it in connection with the
Hearing.

 

5.4    Seller Stockholder Meeting.

 

(a)    As soon as practicable after the Agreement Date, Seller shall prepare,
with the cooperation of Parent and Buyer, a proxy statement satisfying the
requirements of Regulation 14A under the Exchange Act (the “Seller Proxy
Statement”) in connection with the solicitation of the holders of Seller Common
Stock of adoption of this Agreement and approval of the Asset Purchase. Each of
Seller, Parent and Buyer shall use its reasonable best efforts to cause the
Seller Proxy Statement to comply with all Applicable Legal Requirements,
including all applicable federal and state securities laws.

 

(b)    Seller shall use its reasonable best efforts (i) to cause to be filed
with the SEC, the Seller Proxy Statement in preliminary form, as soon as
practicable following the Agreement Date and (ii) to mail the Seller Proxy
Statement in definitive form to all holders of Seller Common Stock entitled to
receive such Seller Proxy Statement under the Delaware General Corporation Law,
as promptly as practicable.

 

(c)    Seller shall take all such other necessary action in accordance with
Delaware General Corporation Law, its Certificate of Incorporation and its
Bylaws to call, convene and hold the Seller Stockholder Meeting. Seller shall
take such action as soon as practicable after the date (i) the California
Commissioner issues the Permit, (ii) Parent and Seller determine in writing that
the Permit cannot be obtained, or cannot reasonably be expected to be obtained,
in time to permit the Closing to occur on or before the Termination Date or
(iii) the California Commissioner notifies Parent, Buyer or Seller of the
California Commissioner’s determination not to grant the Hearing, not to permit
the mailing of the Hearing Notice and/or not to issue the Permit. Seller, after
consultation with Parent, may postpone or adjourn the Seller Stockholder Meeting
to the extent necessary to ensure that any required supplement or amendment to
the Seller Proxy Statement is provided to the Seller’s stockholders or, if as of
the time for which the Seller Stockholder Meeting is originally scheduled there
are insufficient shares of Seller Common Stock represented (either in person or
by proxy) to constitute a quorum necessary to conduct the business of the Seller
Stockholder Meeting. Subject to Section 5.5(c), Seller shall use its reasonable
best efforts to solicit from stockholders of Seller such proxies as are required
to adopt this Agreement and approve the Asset Purchase and shall take all other
action necessary or advisable to secure the vote of holders of Seller Common
Stock required to effect each of the transactions contemplated by this
Agreement.

 

5.5    No Other Negotiations.

 

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(a)    Seller covenants and agrees that during the Pre-Closing Period, it will
not, and will not authorize or permit any of its officers, directors, employees,
Affiliates, attorneys, financial advisors or any other persons acting on its
behalf to, directly or indirectly, solicit, initiate, seek, facilitate,
encourage, entertain, discuss, support, negotiate or accept any inquiry,
proposal or offer from, furnish any information to, or participate in any
discussions (except discussions to elicit information concerning an unsolicited
proposal for an Acquisition Transaction that may be required by the Board of
Directors of Seller in the exercise of their fiduciary duties to determine
whether such proposal will constitute a Superior Offer) or negotiations with, or
enter into any agreement with, any party (other than Parent or Buyer) regarding
any Acquisition Transaction; provided, however, that Seller and its officers,
directors, employees, Affiliates, attorneys, financial advisors or any other
persons acting on its behalf may solicit, initiate, seek, facilitate, encourage,
entertain, discuss, support, negotiate or accept any inquiry, proposal or offer
from, furnish any information to, or participate in any discussions or
negotiations with, or enter into any agreement with, any party regarding (i) an
acquisition of the Excluded Assets or of Seller that does not include the
Purchased Assets or (ii) a merger, consolidation or similar transaction with or
involving Seller, in both cases that would not prevent the consummation, prior
to the Termination Date, of the transactions contemplated by this Agreement.
Each of Seller, Parent and Buyer covenants and agrees that during the
Pre-Closing Period, it will not enter into any transaction that would prevent
the consummation, prior to the Termination Date, of the transactions
contemplated by this Agreement, except as otherwise determined by each of the
respective Boards of Directors of Parent and Buyer in its exercise of its
fiduciary duties.

 

(b)    Seller covenants and agrees that during the Pre-Closing Period, it will
notify Parent promptly, and in any event within 24 hours, after the receipt by
Seller or any of its officers, directors, employees, Affiliates, attorneys,
financial advisors or any other persons acting on its behalf of any proposal
for, or inquiry with respect to, an Acquisition Transaction or any request for
information in connection with such a proposal or inquiry, or for access to the
properties, books and records of Seller by any person or entity that informs or
has informed Seller that it is considering making or has made such a proposal or
inquiry. Seller shall notify Parent of the identity of the person or group
making such a proposal or inquiry and shall provide the material terms and
conditions of such proposal or inquiry. Seller agrees to keep Parent informed on
an on-going basis regarding the status of any such proposal or inquiry.

 

(c)    The Board of Directors of Seller shall be permitted to modify its
recommendation in favor of the adoption of this Agreement and the approval of
this Asset Purchase if (i) Seller receives an unsolicited Superior Offer and
such Superior Offer is not withdrawn, (ii) Seller shall have provided written
notice (a “Notice of Superior Offer”) to Parent advising that Seller has
received a Superior Offer, summarizing the material terms and conditions of such
Superior Offer and identifying the party making such Superior Offer (provided
that Seller shall not be required to provide Parent with any such Notice of
Superior Offer if Seller received the Superior Offer from a third-party with
which it entered into a confidentiality agreement prior to May 20, 2003 and the
terms of such confidentiality agreement explicitly prohibit Seller from
providing to Parent the information required to be set forth in the Notice of
Superior Offer), (iii) Parent shall not have made, within two Business Days of
its receipt of the Notice of Superior Offer, an offer that the Board of
Directors of Seller determines in its good faith judgment by a majority vote
(after consultation with its financial advisor) to be at least as favorable to
the holders of Seller Common Stock as such Superior Offer (it being agreed that
the Board of Directors of Seller shall convene a meeting to consider any such
offer by Parent promptly following the receipt thereof), (iv) the Board of
Directors of Seller concludes in good faith, after consultation with its outside
legal counsel, that, in light of such Superior Offer, the failure to modify such
recommendation would be inconsistent with the fiduciary duties of the Board of
Directors of Seller to the holders of Seller Common Stock under all Applicable
Legal Requirements and (v) Seller shall not have knowingly or materially
violated any of the restrictions set forth in this Section 5.5. Seller shall
provide Parent with at least two Business Days notice

 

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(or such lesser prior notice as provided to the members of the Board of
Directors of Seller) of any meeting of the Board of Directors of Seller at which
the Board of Directors of Seller is reasonably expected to consider any
Acquisition Transaction to determine whether such Acquisition Transaction is a
Superior Offer. Nothing contained in this Section 5.5(c) shall limit Seller’s
obligation to convene the Seller Stockholder Meeting (regardless of whether the
recommendation of the Board of Directors of Seller shall have been modified). As
used in this Agreement, the term “Superior Offer” means an unsolicited, bona
fide written offer made by a third party to consummate an Acquisition
Transaction on terms that the Board of Directors of Seller determines, in its
good faith judgment (after consultation with its financial advisor) to be more
favorable to the holders of Seller Common Stock than the Asset Purchase (taking
into account any written proposals made by Parent after receipt of the Notice of
Superior Offer to modify the terms of the Asset Purchase); provided, however,
that any such offer shall not be deemed to be a “Superior Offer” if any
financing required to consummate the transaction contemplated by such offer is
not committed and is not likely in the good faith determination of the Board of
Directors of Seller (after consultation with its financial advisor) to be
obtained by such third party on a timely basis.

 

5.6    Access to Information; Right to Use Purchased Assets.

 

(a)    Seller covenants and agrees that, during the Pre-Closing Period, it will
allow Parent, Buyer and their agents access at reasonable times to the files,
books, records, technology, contracts, personnel and offices of Seller
pertaining to the Business, subject to the terms of this Agreement. If, before
or after the Closing, in order to properly operate the Purchased Assets or the
Business or to properly prepare documents required to be filed with Governmental
Authorities or its financial statements, it is necessary that Parent or Buyer be
furnished with additional information relating to Seller, the Purchased Assets
or the Business, and such information is in Seller’s possession, Seller agrees
to use all reasonable efforts to furnish such information to Parent or Buyer.
If, before or after the Closing, in order to properly prepare documents required
to be filed with Governmental Authorities or its financial statements, it is
necessary that Seller be furnished with additional information relating to the
Purchased Assets or the Business, and such information is in Parent’s or Buyer’s
possession, Parent and Buyer agree to use all reasonable efforts to furnish such
information to Seller.

 

(b)    Each party hereto agrees that in the event any party is actively
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Business or the Purchased Assets, the other party will cooperate
with the contesting or defending party and its counsel by making available its
personnel and providing such testimony and access to its books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending party (unless the contesting or
defending party is entitled to indemnification therefor under Article 7).

 

(c)    Except as permitted by the Software Distribution and License Agreements,
during the Restricted Period, Seller will not take any action that is intended
to have the effect of discouraging any lessor, licensor, customer, supplier, or
other business associate of the Business from maintaining the same business
relationships with the Buyer after the Closing as it maintained with Seller
prior to the Closing. Except as permitted by the Software Distribution and
License Agreements, during the Restricted Period, Seller will refer all customer
inquiries relating to the Business to the Buyer from and after the Closing.

 

5.7    Employment Matters.

 

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(a)    Selected Employees.    Within 45 days after the Agreement Date, Parent
and Buyer, in their sole discretion, will determine and inform Seller of the
identity of the Business Employees, if any, to whom Parent or Buyer will offer
employment (the “Selected Employees”), and the terms and conditions of any such
offer. Notwithstanding the foregoing, neither Parent nor Buyer shall have any
obligation to employ any of the employees of Seller, including any Selected
Employee. Seller will not take any action, before or after the Closing, directly
or indirectly, to prevent or discourage any Selected Employee from being
employed by Parent or Buyer. Seller will retain, and Parent and Buyer will not
assume, any employer or employment-related obligations of Seller to the Selected
Employees or any other liability of Seller related to any Selected Employee that
arises or accrues on or before the Closing Date, including, without limitation:
(i) accrued personal time off (including sick leave); (ii) any obligation to
provide health, medical, disability, life or other insurance benefits or any
stock, stock option rights, or pension savings plan or similar benefits pursuant
to any Seller employee benefit plan, plans, agreement or arrangement; (iii) any
government-mandated employee or employment-related payments; (iv) workers’
compensation and disability insurance premiums (if any) paid or payable by
Seller on behalf of Selected Employees who are on workers’ compensation or
disability leave as of the Closing Date; or (v) any bonuses accrued or earned by
any of the Selected Employees on or prior to the Closing Date. Any Liabilities
to any of the employees of Seller resulting from Parent’s or Buyer’s failure to
offer employment to any such employee will be, and will remain, Seller’s sole
responsibility.

 

(b)    No Third Party Beneficiaries.    Notwithstanding any possible inferences
to the contrary, Parent, Buyer and Seller do not intend for this Section 5.7 to
create any rights or obligations except as between Buyer and Seller, and no
past, present or future employee of Seller, Parent or Buyer shall be treated as
a third party beneficiary of this Agreement.

 

(c)    Waiver of Noncompetition Agreements.    Seller shall execute and deliver
agreements and instruments, in such form as may be reasonably satisfactory to
Parent, releasing those Selected Employees who accept employment with Parent or
Buyer from any obligations of such Selected Employees to Seller that may first
arise after the Closing with respect to the Business under employment
agreements, confidentiality agreements, invention agreements or other similar
agreements to the extent that such obligations would restrict or inhibit such
Selected Employees’ performance of their duties as employees of Parent or Buyer.

 

(d)    COBRA.    Seller shall comply with all requirements and assume all
obligations under COBRA, the Health Insurance Portability and Accountability Act
of 1996, the Women’s Health and Cancer Rights Act of 1998 and the Family Medical
Leave Act of 1993 with respect to the termination of any Business Employees in
connection with the transactions contemplated by the Asset Purchase.

 

(e)    Termination of Employment.    Seller agrees to comply with the provisions
of the WARN Act and any other federal, state or local statute or regulation
regarding termination of employment in connection with the Asset Purchase and to
perform all obligations that might otherwise be required by Seller with respect
to the cessation of any operations of the Business or the termination of any
Business Employee in connection with the transactions contemplated by the Asset
Purchase.

 

(f)    General Matters.    Seller, Parent and Buyer agree to cooperate fully
with respect to the actions which are necessary or reasonably desirable to
accomplish the transactions contemplated hereunder, including, without
limitation, the provision of records and information as each may reasonably
request and the making of all appropriate filings under ERISA and the Internal
Revenue Code.

 

5.8    Satisfaction of Conditions Precedent.    Seller covenants and agrees
that, subject to Section 5.5(c), during the Pre-Closing Period, it will use its
diligent efforts to (i) satisfy or cause to be satisfied all the conditions
precedent set forth in Section 8.2 and (ii) cause the transactions contemplated
hereby to be

 

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consummated in accordance with this Agreement. Each of Parent and Buyer
covenants and agrees that, during the Pre-Closing Period, it will use its
diligent efforts to (i) satisfy or cause to be satisfied all the conditions
precedent set forth in Section 8.1 and (ii) cause the transactions contemplated
hereby to be consummated in accordance with this Agreement. Notwithstanding
anything in this Agreement to the contrary, neither Parent, Buyer nor any of
their respective Affiliates shall be under any obligation to make proposals,
execute or carry out agreements or submit to orders providing for the sale or
other disposition or holding separate (through the establishment of a trust or
otherwise) of any assets or categories of assets of Parent, Buyer or any of
their respective Affiliates or the holding separate of any of the Purchased
Assets or imposing or seeking to impose any limitation on the ability of Parent,
Buyer or any of their respective Affiliates to conduct their business or the
Business or own the Purchased Assets upon and after the Closing.

 

5.9    Public Disclosure.

 

(a)    Parent and Seller will consult with each other, and to the extent
practicable, agree, before issuing any press release or otherwise making any
public statement with respect to the Asset Purchase or this Agreement, and will
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange. The parties have agreed to the text of the press
releases to be issued by the parties announcing the signing of this Agreement.

 

(b)    If Parent or Seller determines that it is required by law to file any
agreement with the Securities and Exchange Commission which contains a reference
to the other party, then Parent or Seller, as applicable, shall at a reasonable
time before making any such filing, provide written notice to the other party
regarding such filing and seek confidential treatment for such portions of the
agreement as may be reasonably requested by such party.

 

5.10    Further Actions.    From and after the Closing, Seller will (i) file any
notice, statement or other communication, (ii) obtain and provide to Parent and
Buyer (and will promptly prepare all filings and applications, requests and
notices preliminary to obtaining) all approvals and consents, (iii) execute and
deliver all such other and additional instruments, notices, releases,
undertakings and documents and (iv) do all such other acts and things, all as
may be reasonably requested by Parent or Buyer as necessary to assure to Buyer
all the rights and interests granted under this Agreement, in each case with any
material out-of-pocket expense to Seller to be reimbursed by Parent or Buyer.
From and after the Closing, Seller shall take or cause to be taken such other
reasonable actions as Parent or Buyer may require (a) more effectively to
transfer, convey and assign to, and vest in, Buyer, and put Buyer in possession
of, the Purchased Assets as contemplated hereby and (b) to carry out Seller’s
obligations under this Agreement or any other agreements required to be entered
into by Seller pursuant to this Agreement and give effect to the transactions
contemplated hereby and such other agreements. From and after the Closing,
Parent and Buyer shall take or cause to be taken such other reasonable actions
as Seller may require to carry out Parent’s and Buyer’s obligations under this
Agreement or any other agreements required to be entered into by Parent and
Buyer pursuant to this Agreement and give effect to the transactions
contemplated by this Agreement and such other agreements.

 

5.11    Consents; Cooperation.

 

(a)    Each of Parent, Buyer and Seller shall, promptly after the Agreement
Date, apply for or otherwise seek, and use its reasonable best efforts to
obtain, all governmental consents, waivers and approvals required to be obtained
by it for the consummation of the Asset Purchase.

 

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(b)    Seller shall use commercially reasonable efforts to obtain prior to the
Closing, and deliver to Buyer at or prior to the Closing, all consents, waivers
and approvals under each Assigned Agreement listed or described on Schedule
3.2(c) to the Seller Disclosure Letter; provided, however, that Seller shall not
be required to make any payment (other than (i) reimbursement of reasonable
out-of-pocket expenses of any third party incurred in connection with the review
of such consent, approval or waiver request and (ii) refund of any prepaid fees
triggered by such assignment or transfer pursuant to the terms of the Assigned
Agreements, which Assigned Agreements are listed on Schedule 5.11(b)(1) to the
Seller Disclosure Letter) or agree to any material undertakings in connection
therewith. To the extent that Seller is unable to obtain such required consents,
waivers and approvals, then Seller shall use commercially reasonable efforts,
without breaching such Assigned Agreement, to enforce, for the account of Buyer,
any rights of Seller arising from any such Assigned Agreement (including the
right to elect to terminate such Assigned Agreement in accordance with the terms
thereof upon the advice of Buyer). Buyer agrees to cooperate with Seller and
supply relevant information to such party or parties or such third party in
order to assist Seller in its obligations under this 5.11(b). Any Contracts of
Seller to be terminated prior to Closing are listed or described on Schedule
5.11(b)(2) of the Seller Disclosure Letter, and Seller shall use its reasonable
best efforts to terminate such Contracts prior to the Closing and deliver
evidence of such termination to Buyer at or prior to the Closing. Any Contracts
of Seller to be amended prior to Closing are listed or described on Schedule
5.11(b)(3) of the Seller Disclosure Letter, and Seller shall use its reasonable
best efforts to amend such Contracts prior to the Closing and deliver evidence
of such amendment to Buyer at or prior to the Closing, in the manner described
on such exhibit with respect to each such Contract.

 

(c)    (i)    Any Assigned Agreements that provide for payment of maintenance or
support fees by a Seller Customer to Seller are listed on Schedule 5.11(c) of
the Seller Disclosure Letter, which schedule shall set forth with respect to
each such Assigned Agreement: (A) the name of the Seller Customer; (B) the date
of such agreement; (C) whether such agreement is listed on Schedule 3.2(c) of
the Seller Disclosure Letter (each such agreement, a “Required Consent
Maintenance Agreement”) and (D) the amount of unrecognized maintenance or
support fees under such agreement. The total amount of maintenance or support
fees that remain to be paid under all of the Assigned Agreements listed on
Schedule 5.11(c) of the Seller Disclosure Letter is herein referred to as the
“Total Maintenance Fees,” while the total amount of maintenance or support fees
that remain to be paid under all of the Required Consent Maintenance Agreements
is herein referred to as the “Total Required Consent Maintenance Fees.” Schedule
5.11(c) shall be updated by Seller at least one Business Day prior to Closing.

 

(ii)    Seller shall use commercially reasonable efforts to obtain prior to the
Closing, and deliver to Buyer at or prior to the Closing, all consents, waivers
and approvals under each Required Consent Maintenance Agreement to permit the
assignment to Buyer or Parent of all such Required Consent Maintenance
Agreements (each Required Consent Maintenance Agreement for which Seller obtains
the requisite consents, waivers and approvals subsequent to the Closing Date, a
“Consented Maintenance Agreement”). In the event that Seller is unable to secure
such necessary consents, waivers and approvals as of the Closing Date, then with
respect to each such unassigned Required Consent Maintenance Agreement, Seller
will (A) subcontract to Parent the right to provide all maintenance and support
under such unassigned Required Consent Maintenance Agreement and (B) promptly
remit to Parent all payments received by Seller from all such Seller Customers
for maintenance or support fees. After the Closing Date, Seller will continue to
use commercially reasonable efforts to obtain all consents, waivers and
approvals to permit the assignment to Buyer or Parent of each Required Consent
Maintenance Agreement that remains unassigned to Parent or Buyer as of the
Closing Date.

 

(iii)    In the event that Seller is able to obtain prior to December 31, 2003
the requisite consents, waivers and approvals under Required Consent Maintenance
Agreements to permit the assignment to Buyer or Parent of such Required Consent
Maintenance Agreements, then Seller shall be

 

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entitled to receive a collection fee from Parent calculated in accordance with
the following formula: the product of (A) the product of (1) 0.05 and (2) the
Total Required Consent Maintenance Fees as of the Closing Date and (B) the
quotient of (1) the portion of the Total Required Consent Maintenance Fees that
is attributable to Required Consent Maintenance Agreements that become Consented
Maintenance Agreements on or prior to December 31, 2003 and (2) the Total
Required Consent Maintenance Fees as of the Closing Date. By way of example, if
(1) Total Required Consent Maintenance Fees as of the Closing Date equals $2.0
million and (2) the portion of the Total Required Consent Maintenance Fees that
is attributable to Required Consent Maintenance Agreements that become Consented
Maintenance Agreements on or prior to December 31, 2003 equals $1.5 million,
then Parent would pay to Seller a collection fee of $75,000:

 

(0.05 * $2.0 million) * ($1.5 million ÷ $2.0 million) = $75,000

 

(iv)    In the event that Seller is unable to obtain the necessary consents,
waivers and approvals to permit the assignment to Buyer or Parent of any
Required Consent Maintenance Agreements, then Seller will not be permitted to
renew the term of such Required Consent Maintenance Agreements prior to the
expiration of such agreement; provided, however that the foregoing shall not
prevent a Seller Customer from exercising any renewal right existing under a
Required Consent Maintenance Agreement as of the Agreement Date, provided,
further, that Seller shall discourage any Seller Customer from so exercising any
such renewal right.

 

(d)    (i)    Any Assigned Agreements that provide for payment of professional
services fees by a Seller Customer to Seller are listed on Schedule 5.11(d) of
the Seller Disclosure Letter, which schedule shall set forth with respect to
each such Assigned Agreement: (A) the name of the Seller Customer; (B) the date
of such agreement; (C) whether such agreement is listed on Schedule 3.2(c) of
the Seller Disclosure Letter (each such agreement, a “Required Consent Services
Agreement”) and (D) the estimate of the professional services fees that remain
to be paid for work remaining to be performed under such agreement as set forth
on the applicable statement of work. The total amount of professional services
fees that remain to be paid under all of the Assigned Agreements listed on
Schedule 5.11(d) of the Seller Disclosure Letter is herein referred to as the
“Total Services Fees,” while the total amount of professional services fees that
remain to be paid under all of the Required Consent Services Agreements is
herein referred to as the “Total Required Consent Services Fees.” Schedule
5.11(d) shall be updated by Seller at least one Business Day prior to Closing.

 

(ii)    Seller shall use commercially reasonable efforts to obtain prior to the
Closing, and deliver to Buyer at or prior to the Closing, all consents, waivers
and approvals under each Required Consent Services Agreement to permit the
assignment to Buyer or Parent of all such Required Consent Services Agreements
(each Required Consent Services Agreement for which Seller obtains the requisite
consents, waivers and approvals subsequent to the Closing Date, a “Consented
Services Agreement”). In the event that Seller is unable to secure such
necessary consents, waivers and approvals as of the Closing Date, then with
respect to each such unassigned Required Consent Services Agreement, Seller will
(A) subcontract to Parent the right to provide all professional services under
such unassigned Required Consent Services Agreement and (B) promptly remit to
Parent all payments received by Seller from all such Seller Customers for
professional services fees. After the Closing Date, Seller will continue to use
commercially reasonable efforts to obtain all consents, waivers and approvals to
permit the assignment to Buyer or Parent of each Required Consent Services
Agreement that remains unassigned to Parent or Buyer as of the Closing Date.

 

(iii)    In the event that Seller is able to obtain prior to December 31, 2003
the requisite consents, waivers and approvals under Required Consent Services
Agreements to permit the assignment to Buyer or Parent of such Required Consent
Services Agreements, then Seller shall be

 

46

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entitled to receive a collection fee from Parent calculated in accordance with
the following formula: the product of (A) the product of (1) 0.05 and (2) the
Total Required Consent Services Fees as of the Closing Date and (B) the quotient
of (1) the portion of the Total Required Consent Services Fees that is
attributable to Required Consent Services Agreements that become Consented
Services Agreements on or prior to December 31, 2003 and (2) the Total Required
Consent Services Fees as of the Closing Date. By way of example, if (1) Total
Required Consent Services Fees as of the Closing Date equals $300,000 and (2)
the portion of the Total Required Consent Services Fees that is attributable to
Required Consent Services Agreements that become Consented Services Agreements
on or prior to December 31, 2003 equals $200,000, then Parent would pay to
Seller a collection fee of $10,000:

 

(0.05 * $300,000) * ($200,000 ÷ $300,000) = $10,000

 

(iv)    In the event that Seller is unable to obtain the necessary consents,
waivers and approvals to permit the assignment to Buyer or Parent of any
Required Consent Services Agreements, then Seller will not be permitted to renew
the term of such Required Consent Services Agreements prior to the expiration of
such agreement; provided, however that the foregoing shall not prevent a Seller
Customer from exercising any renewal right existing under a Required Consent
Services Agreement as of the Agreement Date, provided, further, that Seller
shall discourage any Seller Customer from so exercising any such renewal right.

 

(e)    (i)    In the event that Seller is able to obtain prior to December 31,
2003 (A) the requisite consents, waivers and approvals under Required Consent
Maintenance Agreements to permit the assignment to Buyer or Parent of Required
Consent Maintenance Agreements representing 5% of Total Maintenance Fees and (B)
the requisite consents, waivers and approvals under Required Consent Services
Agreements to permit the assignment to Buyer or Parent of Required Consent
Services Agreements representing 5% of Total Services Fees, then in the event
that the aggregate collection fee that would otherwise be payable by Parent to
Seller pursuant to Sections 5.11(c)(iii) and 5.11(d)(iii) is less then $25,000,
then the aggregate collection fee to be paid to Seller pursuant to Sections
5.11(c)(iii) and 5.11(d)(iii) will equal $25,000.

 

(ii)    Parent shall calculate the collection fee, if any, owed to Seller
pursuant to Sections 5.11(c)(iii), 5.11(d)(iii) and 5.11(e)(i) by January 31,
2004, and shall report any such amount in writing, together with the data
supporting such calculation, to Seller. In the event of any dispute concerning
the amount of any collection fee owed to Seller, Seller shall notify Parent in
writing (the “Dispute Notice”), setting forth in reasonable detail the basis of
the dispute, within 15 days of receiving such calculation. Seller shall have the
right, at its expense, to have its independent public accountants audit the
books and records of Parent to determine the collection fee, if any, owed to
Seller, and Parent will allow Seller access at reasonable times during normal
business hours to such books and records and personnel of Parent as is necessary
for purposes of conducting such audit. If Seller does not provide Parent with a
Dispute Notice within such 15-day period, Seller shall be deemed to have
accepted such calculation as correct and final. In the event that any amount of
the collection fee is disputed and Seller provides Parent with a Dispute Notice,
then Parent and Seller shall confer in good faith for a period of up to 10 days
following the delivery of any Dispute Notice concerning the subject matter of
the Dispute Notice in an attempt to resolve it. If, after such 10-day period,
Parent and Seller cannot resolve such dispute, then Parent and Seller shall
resolve all disputes over any collection fee owed to Seller through binding
arbitration in the same manner provided for resolution of Contested Claims under
Section 7.5(d) of this Agreement. In the event of any such unresolved dispute,
Parent will be under no obligation to make any payment of a disputed portion of
any collection fee until such dispute is resolved as provided herein.

 

 

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(iii)    Subject to the final sentence of Section 5.11(e)(ii), any collection
fee owed to Seller pursuant to Sections 5.11(c)(iii), 5.11(d)(iii) and
5.11(e)(i) of this Agreement shall be paid to Seller either (i) if Seller does
not elect to audit Parent’s calculation of such collection fee, by January 31,
2004 or (ii) if Seller does elect to audit Parent’s calculation of such
collection fee, within 5 Business Days of the completion of such audit by Seller
and any subsequent good faith conference between the parties regarding the
calculation of such collection fee if the parties are able to resolve the
subject matter of the Dispute Notice. If any collection fee owed to Seller is
determined by binding arbitration as contemplated by Section 5.11(e)(ii) above,
then in the event that the Final Award determines that a collection fee is owed
to Seller, then such collection fee shall be paid to Seller not later than 5
Business Days following the date of such Final Award.

 

(f)    To the extent that the Seller (1) is unable to obtain the requisite
consents, approvals and waivers under any Required Consent Maintenance Agreement
or Required Consent Services Agreement such that it becomes a Consented
Maintenance Agreement or Consented Services Agreement, as applicable, and (2)
does not have the right to subcontract to Parent the right to provide all
maintenance and support or professional services under such unassigned Required
Consent Maintenance Agreements or Required Consent Services Agreement, as
applicable, and the related Seller Customer does not permit Seller to
subcontract to Parent the provision of such services, then Seller will perform
any remaining services under such unassigned Required Consent Maintenance
Agreement or Required Consent Services Agreement (at Seller’s request, Buyer
shall make its employees available to Seller (without cost or expense to Seller)
to perform the required work under the applicable Required Consent Maintenance
Agreement and Required Consent Services Agreement) and Seller will promptly
remit to Parent any payments received by Seller from all such Seller Customers
for the provision of such services.

 

(g)    Seller shall use its best efforts to obtain prior to the Closing, and
deliver to Buyer at or prior to the Closing, the necessary consents, waivers and
approvals to permit the assignment to Buyer or Parent of any real property lease
listed on Schedule 3.2(c) to the Seller Disclosure Letter. In connection with
such best efforts by Seller, Parent agrees that it will agree to enter into a
three-month extension of any such real property lease listed on Schedule 3.2(c)
to the Seller Disclosure Letter provided that such extension is on terms
reasonably consistent with the terms of the existing lease.

 

(h)    In the event that Seller is unable to obtain the consent of the party
listed on Schedule 5.11(h) of the Seller Disclosure Letter (the “Significant
Customer”) to the assignment of the related Assigned Agreements with the
Significant Customer (the “Significant Customer Agreements”) to Parent and Buyer
prior to the Closing, then Seller agrees that it will not work with the
Significant Customer, nor with any employee or Affiliate of the Significant
Customer, until such time as either (1) Seller obtains the consent of the
Significant Customer to the assignment of the Significant Customer Agreements to
Parent and Buyer or (2) the Significant Customer Agreements are amended either
(A) on terms that are identical in substance to the current terms of the
Significant Customer Agreements except that the exclusive industries/markets set
forth in the Significant Customer Agreements relating primarily or exclusively
to the Business will be allocated to Parent and the other exclusive
industries/markets will be allocated to Seller or (B) in a manner that is
acceptable to Parent.

 

5.12    Lock-Up of Guaranteed Shares.

 

(a)    Seller agrees that, following the Closing, it shall not (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, including by operation of law or otherwise, any
Guaranteed Shares or (ii) enter into any swap or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Guaranteed Shares, whether any such transaction described in the foregoing
clauses is to

 

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be settled by delivery of the Guaranteed Shares, in cash or otherwise. The
restrictions on transferability of the Guaranteed Shares set forth in the
preceding sentence will lapse according to the following schedule:

 

Lock-Up Period

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

 

Transferability of Guaranteed Shares

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

Period from the Closing Date until the three-month anniversary of the Closing
Date   No Guaranteed Shares may be transferred Period from the three-month
anniversary of the Closing Date until the six-month anniversary of the Closing
Date   The restrictions on transferability will lapse with respect to an
aggregate of one-third of the Guaranteed Shares (rounded up to the nearest whole
number) Period from the six-month anniversary of the Closing Date until the
nine-month anniversary of the Closing Date   The restrictions on transferability
will lapse with respect to an aggregate of two-thirds of the Guaranteed Shares
(rounded up to the nearest whole number) Beginning after the nine-month
anniversary of the Closing Date   The restrictions on transferability will lapse
with respect to all of the Guaranteed Shares

 

In order to enforce the foregoing covenant, Parent may place restrictive legends
to such effect on the certificate(s) representing the Guaranteed Shares and
shall have the right to impose stop transfer instructions with respect to the
Guaranteed Shares. Notwithstanding the foregoing, the restrictions on
transferability set forth in this Section 5.12 will not apply to a distribution
by Seller of the Guaranteed Shares to holders of Seller Common Stock to the
extent such distribution is made pursuant to a declaration, setting aside or
payment of a dividend. The Earnout Shares and the Escrow Shares shall not be
subject to this Section 5.12.

 

(b)    Notwithstanding the provisions of Section 5.12(a) above, (A) in the event
that the number of shares of Parent Common Stock issued to Seller at the Closing
is equal to or greater than 10% of the outstanding Parent Common Stock, such
that the Seller shall become a reporting person for purposes of Section 16 under
the Exchange Act, then the restrictions on transferability set forth in Section
5.12(a) above will not preclude Seller from selling prior to December 31, 2003
the minimum number of shares of Parent Common Stock necessary such that as a
result of the issuance to Seller of any Earnout Shares, Seller would not violate
Section 16(b) of the Exchange Act if it were to sell shares of Parent Common
Stock immediately following any such issuance of the Earnout Shares (and in the
event that such shares of Parent Common Stock have not been issued pursuant to
the Permit, Parent will assist Seller (but only to the extent Parent may provide
such assistance without being deemed an underwriter, broker or dealer under the
Securities Act) in selling such minimum number of shares of Parent Common Stock
in a private transaction prior to December 31, 2003); and (B) in the event that
the disposition of shares of Parent Common Stock to Parent under Article VII
hereof and the Escrow Agreement pursuant to an indemnification obligation would
constitute a violation of Section 16 under the Exchange Act, Seller shall have
the right to satisfy such indemnification obligation in the form of cash rather
than Parent Common Stock to the extent necessary to avoid any such violation.

 

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5.13    Confidentiality.

 

(a)    The parties acknowledge that Parent and Seller have previously executed
that certain Mutual Nondisclosure Agreement, dated as of February 27, 2003 (the
“Confidentiality Agreement”), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms. Each party hereto agrees
that all confidential information of another party that is disclosed to such
party in the course of negotiating the transactions contemplated by this
Agreement or conducting due diligence in connection herewith will be held in
confidence in accordance with the terms of the Confidentiality Agreement.
Notwithstanding the foregoing, each of the parties may disclose to any and all
persons, without limitation of any kind, the U.S. federal Tax treatment and Tax
structure of the transaction and all materials of any kind (including opinions
or other Tax analyses) that are provided to the parties relating to such Tax
treatment and Tax structure. Seller will take all reasonable precautions to
prevent any trading in the securities of Parent by officers, directors,
employees and agents of Seller, having knowledge of any material information
regarding Parent provided hereunder, including, without limitation, the
existence of the transactions contemplated by this Agreement until the
information in question has been publicly disclosed. Parent will take all
reasonable precautions to prevent any trading in the securities of Seller by
officers, directors, employees and agents of Parent, having knowledge of any
material information regarding Seller provided hereunder, including, without
limitation, the existence of the transactions contemplated by this Agreement
until the information in question has been publicly disclosed.

 

(b)    All copies of financial information, marketing and sales information,
pricing, marketing plans, business plans, financial and business projections,
customer lists, methodologies, inventions, software, know-how, product designs,
product specifications and drawings, and other confidential and/or proprietary
information of the Seller related to the Business or any of the Purchased
Assets, including but not limited to the Software, the Documentation and the
Seller Technology Assets (collectively, “Seller Confidential Information”) will
be held by Seller in strict confidence and, at all times following the Closing,
will not be used or disclosed by Seller to any third party. After the Closing,
(i) Seller will continue to hold all Seller Confidential Information that is
primarily or exclusively related to the Business or Purchased Assets that Seller
is permitted to retain pursuant to Section 5.15 as confidential, will treat such
Seller Confidential Information in the same manner that Seller treats its other
confidential information and will only use such Seller Confidential Information
to enforce its rights and fulfill its obligations under this Agreement,
including, without limitation, in connection with the performance of any Assumed
Liabilities and Excluded Liabilities and (ii) Buyer and Parent will hold all
Seller Confidential Information that does not relate primarily or exclusively to
the Business or the Purchased Assets as confidential and will treat such Seller
Confidential Information in the same manner that Parent and Buyer treat their
other confidential information. It is agreed that Seller Confidential
Information will not include information that is now, or later becomes, part of
the general public knowledge or literature in the art, other than as a result of
a breach of this Agreement by Seller, Parent or Buyer, or any other information
that is used by Seller in any of its other businesses, without violation of
Section 5.18.

 

5.14    Nasdaq Listing. To the extent required by the rules and regulations of
The Nasdaq Stock Market, Parent shall apply to list, and shall use all requisite
commercially reasonable efforts to have authorized for listing, on The Nasdaq
Stock Market the Shares issuable in connection with the Asset Purchase, subject
to official notice of issuance.

 

5.15    Post-Closing Retention. Immediately after the Closing, in addition to
copies of the Purchased Agreements delivered to Buyer as part of the
transactions contemplated by this Agreement, Seller shall deliver to Buyer or
destroy copies of any Purchased Assets in Seller’s possession or control that
are primarily or exclusively related to the Business, whether such copies are in
paper form, on

 

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computer media or stored in another form; provided, however, that Seller may
retain copies of the Assigned Agreements. Except as otherwise provided in
Section 2.2(f) and to the extent lawfully transferrable, all Governmental
Permits may be retained by Seller.

 

5.16    Information Provided.    Each of Seller, Parent and Buyer shall provide
promptly to the other such information concerning its business and financial
statements and affairs as, in the reasonable judgment of the providing party or
its counsel, may be required or appropriate for inclusion in the Permit
Application, the Hearing Notice, the Information Statement or the Seller Proxy
Statement, or in any amendments or supplements thereto, and to cause its counsel
and auditors to cooperate with the other’s counsel and auditors in the
preparation of the Permit Application, the Hearing Notice, the Information
Statement and the Seller Proxy Statement. Subject to Section 5.5(c), the
Information Statement and the Seller Proxy Statement shall include the
unqualified recommendation of the Board of Directors of Seller in favor of
adoption of this Agreement and approval of the Asset Purchase and the conclusion
of the Board of Directors of Seller that the terms and conditions of this
Agreement and the Asset are fair, just, reasonable, equitable, advisable and in
the best interests of Seller and its stockholders. Anything to the contrary
contained herein notwithstanding, Seller shall not include in the Information
Statement or Seller Proxy Statement any information with respect to Parent,
Buyer or their Affiliates or associates, without the prior approval of Parent of
the form and content of such information; provided, however, that Parent shall
not withhold approval of any information required to be included by Applicable
Legal Requirements, including any applicable federal and state securities laws,
the SEC or the California Commissioner. Each of Seller, Parent and Buyer shall
use its reasonable best efforts to cause the information relating to Seller,
Parent and Buyer, respectively, included in (i) the Permit Application, the
Hearing Notice, and the Information Statement, at the time each is filed with
the California Commissioner, and, in the case of the Hearing Notice and
Information Statement, at the time each is mailed to the holders of Seller
Common Stock, and (ii) the Seller Proxy Statement, at the time it is filed with
the SEC, at the time it is mailed to the holders of Seller Common Stock and at
the time of the Seller Stockholder Meeting, and in all cases at all times
subsequent thereto (through and including the Closing), not to contain any
untrue statement of a material fact nor omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Seller
shall promptly advise Parent, and Parent and Buyer shall promptly advise Seller,
in writing if at any time prior to the Closing either Seller, Parent or Buyer
shall obtain knowledge of any facts that might make it necessary or appropriate
to amend or supplement the Permit Application, Hearing Notice, the Information
Statement and/or the Seller Proxy Statement, in order to make the statements
contained or incorporated by reference therein not misleading or to comply with
Applicable Legal Requirements. Each of Seller, Parent and Buyer shall cooperate
in (i) filing any such amendment or supplement with the California Commissioner
and/or the SEC and/or any other government officials and (ii) delivering any
amendment or supplement to holders of Seller Common Stock.

 

5.17    No Solicitation of Vote by Seller.    Except for the delivery of the
Information Statement and Seller Proxy Statement in accordance with the terms
hereof, Seller shall not, and shall cause each of its Subsidiaries not to,
directly or indirectly, solicit the vote of any holder of Seller Common Stock in
connection with the Asset Purchase in violation of any Applicable Legal
Requirements, including all applicable federal and state securities laws.

 

5.18    Non-Compete.    As a material inducement and consideration for Parent
and Buyer to enter into this Agreement, for a period from the Closing Date until
the third anniversary of the Closing Date (the “Restricted Period”), Seller
shall not without the prior written consent of Parent and Buyer, directly or
indirectly, sell or otherwise distribute any products or services in the Life
Sciences Market, nor shall it cause or permit any third party to do so.
Notwithstanding the foregoing, Seller shall not be prohibited from acquiring or
owning less than 5% (by voting power) of the outstanding capital stock of any
publicly

 

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traded company in the Life Sciences Market. In the event of a breach of any of
the covenants set forth in this Section 5.18, Seller agrees that the damage to
Parent and Buyer would be irreparable and that Parent and Buyer shall be
entitled to seek an injunction against the Seller restraining such breach in
addition to any other remedies provided by law or equity. In the event that any
covenant in this Section 5.18 is held to be invalid, illegal or unenforceable by
any court of competent jurisdiction or any other governmental authority, the
parties agree and understand that such covenant shall not be voided but rather
shall be construed to impose limitations upon Seller’s activities no greater
than allowable under then Applicable Legal Requirements.

 

5.19    Blue Sky Laws.    Parent shall take such steps as may be necessary to
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable to the issuance of the Shares. Seller shall use its reasonable best
efforts to assist Parent as may be necessary to comply with the securities and
Blue Sky laws of all jurisdictions which are applicable in connection with the
issuance of the Shares.

 

5.20    Furnishing of Outstanding Business Proposals.    Prior to or
concurrently with the Closing, Seller will furnish Parent and Buyer with copies
of all business proposals (including names and status of discussions with
prospective customers and strategic partners) that are pending or outstanding
with respect to the Business.

 

5.21    Purchase Price Allocation.    Each party agrees that within 60 days of
the Closing, the parties shall mutually agree upon the allocation of the
Purchase Price to the Purchased Assets. Each party covenants that it shall not
to take any position that varies from or is inconsistent with such allocation in
any Tax Return or other filing made by such party with the IRS or with any other
Governmental Authority. Nothing contained herein shall impose on either party
the duty or obligation to contest any action which the IRS or any other
Governmental Authority may take or any adjustment or change in such allocation
which the IRS or any other Governmental Authority may make or propose.

 

5.22    Transfer of Additional Seller Technology.    If, within one (1) year
after the Closing, Buyer or Parent identifies in writing to Seller any Seller
Technology owned by Seller (other than any Retained Seller Technology Asset)
that is not included in the Purchased Assets or licensed to Buyer and Parent
under the Software Distribution and License Agreements and that is required to
render the representation of Seller set forth in the first sentence of Section
3.8(b) true as of the Closing Date, Seller shall promptly (a) if such Seller
Technology was primarily or exclusively used in the Business as of the Closing
Date, convey such Seller Technology to Buyer as if such Seller Technology were a
Purchased Asset under this Agreement or (b) if such Seller Technology was not
primarily or exclusively used in the Business as of the Closing Date, grant
Buyer and Parent a license to such Seller Technology on terms and conditions
consistent with the terms and conditions of the Software Distribution and
License Agreements. Buyer and Parent shall not make any claim for any breach of
Seller’s representation contained in the first sentence of Section 3.8(b) unless
Seller shall breach its obligations under this Section 5.22.

 

5.23    Collection of Accounts Receivable.    Seller agrees that it shall
forward promptly to Buyer any monies, checks or instruments received by Seller
after the Closing with respect to the accounts receivable purchased by Buyer
from Seller pursuant to this Agreement. Buyer and Parent agree that they will
forward promptly to Seller any monies, checks or instruments received by Buyer
or Parent after the Closing with respect to the accounts receivable retained by
Seller pursuant to this Agreement.

 

5.24    Performance of Contractual Obligations.    Seller agrees that, with
respect to each Contract listed on Schedule 5.24 of the Seller Disclosure Letter
for which Seller will have continuing product delivery obligations subsequent to
the Closing Date, it will perform each of the obligations it is required to
perform under such Contract if the failure to so perform such obligations could
result in a refund of part or all of the fees paid to Seller under such
Contract.

 

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5.25    Cooperation with Respect to Unallocated Assets.    Parent, Buyer and
Seller agree that with respect to the assets listed on Schedule 5.25 of the
Seller Disclosure Letter (the “Unallocated Assets”), the parties will cooperate
in good faith subsequent to the Agreement Date to allocate the Unallocated
Assets amongst the parties in an equitable manner, and Seller shall update
Schedule 5.25 at least two Business Days prior to the Closing Date to reflect
such allocation. Seller will permit Parent unrestricted access (to the extent
that such access does not unreasonably interfere with Seller’s business
operations) to Seller’s offices at 511 Congress Street in Portland, Maine from
the Closing Date until the expiration date of the related real property lease to
enable Parent to have access to the Unallocated Assets that become Purchased
Assets.

 

ARTICLE 6

TAX MATTERS

 

6.1    Taxes Relating to Sale of Purchased Assets.    Any transfer, documentary,
sales, use, registration, value-added and other similar Taxes directly
applicable to the conveyance and transfer from Seller to Buyer of the Purchased
Assets shall be paid equally by Seller and Buyer (collectively “Transaction
Taxes”). To the extent required by law, Seller shall be responsible for
preparing and filing any Tax Return relating to such Transaction Taxes imposed
on Seller and shall promptly provide a copy of such Tax Return to Buyer. To the
extent required by law, Buyer shall be responsible for preparing and filing any
Tax Return relating to such Transaction Taxes imposed on Buyer and shall
promptly provide a copy of such Tax Return to Seller. Seller and Buyer each
agree to pay and indemnify the other for any Transaction Taxes paid by Seller or
Buyer that exceeds 50% of the aggregate amount of Transaction Taxes imposed
collectively on Seller and Buyer. The parties shall cooperate with each other to
the extent reasonably requested and legally permitted to minimize any such
Taxes.

 

6.2    Property Taxes.    Any property Taxes applicable to the Purchased Assets
for a taxable period that includes but does not end on the Closing Date shall be
paid by Buyer or Seller, as required by law, and such Taxes shall be apportioned
between Buyer and Seller based on the number of days in the portion of the
taxable period that ends on the Closing Date (the “Seller Tax Period”) and the
number of days in the entire taxable period. Seller shall pay Buyer an amount
equal to any such Taxes payable by Buyer which are attributable to the Seller
Tax Period, and Buyer shall pay Seller an amount equal to any such Taxes payable
by Seller which are not attributable to the Seller Tax Period. Such payments
shall be made on or prior to the Closing Date (or thereafter, promptly after
request by Buyer or Seller if such Taxes are not identified by Buyer or Seller
on or prior to the Closing Date).

 

6.3    Other Taxes.    Seller will be responsible for and will pay any and all
Taxes with respect to the Purchased Assets relating to all periods (or portions
thereof) ending on or before the Closing Date, and Buyer will be responsible for
and will pay any and all Taxes with respect to the Purchased Assets relating to
all periods (or portions thereof) beginning after the Closing Date. On the
Closing Date, neither Seller, Parent nor Buyer shall take any action outside the
ordinary course of business with respect to the Purchased Assets.

 

6.4    Treatment of Indemnity Payments.    All payments made by Seller to or for
the benefit of Buyer pursuant to any indemnification obligations under this
Agreement, will be treated as adjustments to the Purchase Price for Tax purposes
and such agreed treatment will govern for purposes of this Agreement, unless
otherwise required by law.

 

6.5    Cooperation.    To the extent relevant to the Purchased Assets, each
party shall (i) provide the other such assistance as may be reasonably requested
in connection with the preparation of any Tax Return or the conduct of any audit
or examination or other proceeding and (ii) for a period of six years following
the Closing retain and provide the other with information that may be relevant
to the

 

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preparation of a Tax Return, or the conduct of an audit, examination or other
proceeding relating to Taxes.

 

ARTICLE 7

INDEMNIFICATION

 

7.1    Survival of Representations and Warranties and Indemnification
Obligations and Indemnification Obligations.    All representations and
warranties of Seller, Parent and Buyer contained in this Agreement and the
indemnification obligations of Seller, Parent and Buyer pursuant to this Article
7 will remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any of the parties to this Agreement,
until the earlier of (i) the termination of this Agreement in accordance with
its terms and (ii) the expiration of the Escrow Period; provided, however, that
any Indemnified Person shall be entitled to seek recovery (i) until the
expiration of the applicable statute of limitations for any claim which seeks
recovery of Damages for fraud by Seller, Parent or Buyer, as the case may be and
(ii) until the second anniversary of the Closing Date for any claim which seeks
recovery of Damages for willful misrepresentation or willful misconduct by
Seller, Parent or Buyer, as the case may be. Each of the covenants set forth in
Article 5, “Other Covenants and Agreements” and Article 6, “Tax Matters” shall
survive the Closing, and all other covenants of the parties shall survive
according to their respective terms.

 

7.2    Indemnification Obligations of Seller.    Subject to the provisions and
limitations set forth in Section 7.4, Seller (the “Seller Indemnifying Person”),
will defend, indemnify and hold harmless Parent, Buyer and their respective
Affiliates, officers, directors, agents, representatives, stockholders and
employees (collectively, the “Parent Indemnified Persons” and each individually,
a “Parent Indemnified Person”) from and against Damages directly or indirectly
incurred, resulting from or arising out of:

 

(a)    any inaccuracy, misrepresentation, or default in, or breach of, any of
the representations or warranties given or made by Seller in this Agreement, any
of the Seller Ancillary Agreements or the Seller Disclosure Letter (including
all Schedules thereto);

 

(b)    any breach of any of the covenants of Seller in this Agreement or the
Seller Ancillary Agreements;

 

(c)    any of the Excluded Assets or any of the Excluded Liabilities;

 

(d)    the operation of the Business by Seller at any time or times on or before
the Closing Date;

 

(e)    any Liability arising from any noncompliance with any bulk sales, bulk
transfer or similar laws applicable to the transactions contemplated hereby or
any claims asserting that any transaction contemplated hereby constitutes a
fraudulent conveyance, a preferential transfer or any claim of a similar nature;

 

(f)    any Taxes, assessments and other governmental charges of any kind or
nature whatsoever, including any withholding, social security or unemployment
levies, arising out of the Business through the Closing or payable with respect
to Seller or by Seller for the transactions contemplated hereby; and

 

(g)    any demand, claim, debt, suit, cause of action, arbitration or other
proceeding that is made or asserted against Seller (including a warranty claim,
a product liability claim or any other

 

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claim), including any such action that is made or asserted against Seller by any
stockholder of Seller, whether arising before or after the Closing, unless such
demand, claim, debt, suit, cause of action, arbitration or other proceeding
arises from any Assumed Liability or action taken by Parent or Buyer with
respect to the Purchased Assets or the Business after the Closing.

 

7.3    Indemnification Obligations of Parent.    Subject to the provisions and
limitations set forth in Section 7.4, Parent (the “Parent Indemnifying Person”)
will defend, indemnify and hold harmless Seller and its Affiliates, officers,
directors, agents, representatives, stockholders and employees (collectively,
the “Seller Indemnified Persons” and each individually, a “Seller Indemnified
Person”) from and against any Damages directly or indirectly incurred, resulting
from or arising out of:

 

(a)    any inaccuracy, misrepresentation, or default in, or breach of, any of
the representations or warranties given or made by Parent or Buyer in this
Agreement, any of the Buyer Ancillary Agreements or the Parent Disclosure Letter
(including all Schedules thereto);

 

(b)    any breach of the covenants of Parent or Buyer in this Agreement or the
Buyer Ancillary Agreements;

 

(c)    any of the Assumed Liabilities;

 

(d)    the operation of the Business by Buyer or Parent at any time after the
Closing Date, but only to the extent that such Damages do not relate to or
involve any breach by Seller of any of the representations or warranties
contained in Article 3, “Representations and Warranties of Seller”;

 

(e)    any Taxes, assessments and other governmental charges of any kind or
nature whatsoever, including any withholding, social security or unemployment
levies, arising out of the Business after the Closing or payable with respect to
Parent or Buyer or the transactions contemplated hereby; and

 

(f)    any demand, claim, debt, suit, cause of action, arbitration or other
proceeding (including a warranty claim, a product liability claim or any other
claim) that is made or asserted by any third party that relates to the Purchased
Assets and that arises from any act or omission of Parent or Buyer.

 

7.4    Limitations on Indemnification Obligations.

 

(a)    From and after the Closing, the sole and exclusive remedy of the Parent
Indemnified Persons against the Seller Indemnifying Persons for any Damages
directly or indirectly incurred, resulting from or arising out of this
Agreement, any of the Buyer Ancillary Agreements or any of the Seller Ancillary
Agreements is set forth in this Article 7 and the Escrow Agreement. The
Liability of the Seller Indemnifying Persons under Section 7.2(a) of this
Agreement shall be limited to recourse to (i) first the Escrow Shares (which
shall constitute a partial security for such indemnification obligations) and
(ii) if the Escrow Shares are insufficient to satisfy the indemnification
obligations of the Seller Indemnifying Persons, then an amount of cash up to an
additional $1,000,000 (collectively, the “Indemnification Cap”).

 

(b)    From and after the Closing, the sole and exclusive remedy of the Seller
Indemnified Persons against the Parent Indemnifying Person for any Damages
directly or indirectly incurred, resulting from or arising out of this
Agreement, any of the Buyer Ancillary Agreements or any of the Seller Ancillary
Agreements is set forth in this Article 7. The Liability of the Parent
Indemnifying Person under Section 7.3(a) of this Agreement shall be limited to
recourse to, at Parent’s option, (i)

 

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Parent’s issuance of shares of Parent Common Stock having a maximum aggregate
value equal to the total value of the Indemnification Cap or (ii) cash in an
aggregate amount equal to the total value of the Indemnification Cap. Any shares
issued by Parent pursuant to this Article 7 shall be “Indemnification Shares.”
The value of the Indemnification Shares will be determined by utilizing the
applicable Parent Average Stock Price.

 

(c)    Neither Parent Indemnified Persons nor Seller Indemnified Persons,
respectively, shall have any right to indemnification under Section 7.2(a) or
Section 7.3(a), respectively until such claims, in the aggregate, equal or
exceed $100,000 of Damages, in which case, indemnification shall be available
for all claims in excess of $100,000.

 

(d)    Notwithstanding anything contained herein to the contrary, the foregoing
limitations on indemnification under this Article 7 shall not apply to any
indemnification claim by any Parent Indemnified Person that arises from or as a
result of (i) any fraudulent conduct or fraudulent misrepresentation on the part
of Seller or its personnel, (ii) any breach by Seller of its representations or
warranties contained in Section 3.11 of this Agreement relating to any
infringement by Seller of any Intellectual Property Right of any other Person,
(iii) any refund or similar payment of the purchase price relating to any
products sold by Seller prior to Closing or (iv) any breach by Seller of its
representations or warranties contained in Section 3.2(c) of this Agreement. In
the event that any Parent Indemnified Person makes any indemnification claim
that arises from or as a result of any infringement by Seller of any
Intellectual Property Right of any other Person covered by clause (ii) of the
preceding sentence, then under such circumstances, and solely for the purposes
of any such claims, the Indemnification Cap will be equal to $10.0 million;
provided, however, that a Parent Indemnified Person shall only be entitled to
seek recovery for any such infringement by Seller of any Intellectual Property
Right of any other Person until the second anniversary of the Closing Date. In
the event that any Parent Indemnified Person makes any indemnification claim
that arises from or as a result of any refund or similar payment covered by
clause (iii) of the first sentence of this Section 7.4(d), then Seller will
promptly reimburse Parent in cash in the amount of any such refund or similar
payment made by Parent to a third party, without regard to the provisions of
Section 7.4(c). In the event that any Parent Indemnified Person makes any
indemnification claim that arises from or as a result of any refund or similar
payment covered by clause (iii) of the first sentence of this Section 7.4(d) or
that arises from or as a result of any breach by Seller of its representations
or warranties contained in Section 3.2(c) of this Agreement, then under such
circumstances, and solely for the purposes of any such claims, the
Indemnification Cap will be equal to $5.0 million; provided, further, that with
respect to any such indemnification claim made by any Parent Indemnified Person,
such Parent Indemnified Person will be entitled to recover for Damages first
from the $3.0 million cash portion of the Indemnification Cap, and second, to
the extent that such Damages exceed $3.0 million, from the Escrow Shares.

 

(e)    In no event shall any Indemnified Person (as hereinafter defined) be
responsible or liable for any Damages or other amounts under this Article 7 that
are (a) consequential damages for lost profits or diminution in the value of
property, (b) special or punitive damages or (c) otherwise not actual damages,
except (i) with respect to a breach by Seller of the covenants set forth in
Section 5.24 or (ii) in the event a court, arbitrator or Governmental Agency
requires such Indemnified Party to pay special or punitive damages to a third
party. Each Indemnified Person shall (and shall cause its Affiliates to) use
reasonable commercial efforts to pursue such material legal rights and remedies
available which such Indemnified Person believes in its good faith to be
reasonable under the circumstances in order to mitigate the Damages for which
indemnification is provided to it under this Article 7; provided, however, that
a breach by an Indemnified Person of its obligations under this sentence shall
not relieve any Indemnifying Person from any of their respective obligations
under this Article 7.

 

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(f)    The amount of Damages recoverable by any Indemnified Person under this
Article 7 with respect to an indemnity claim shall be reduced by (i) the amount
of any payment received by such Indemnified Person (or an Affiliate thereof),
with respect to the Damages to which such indemnity claim relates, from an
insurance carrier, and (ii) the amount of any Tax benefit actually realized by
such Indemnified Person (or an Affiliate thereof) which is attributable to the
Damages to which such indemnity claim relates. Each Indemnified Person shall use
reasonable commercial efforts to pursue, and to cause its Affiliates to pursue,
all insurance claims and Tax benefits to which it may be entitled in connection
with any Damages it incurs, and the parties shall cooperate with each other in
pursuing insurance claims with respect to any Damages or any indemnification
obligations with respect to Damages. If an Indemnified Person (or an Affiliate)
receives any insurance payment in connection with any claim for Damages for
which it has already received an indemnification payment from the Indemnifying
Person (as hereinafter defined), it shall pay to the Indemnifying Person, within
30 days of receiving such insurance payment, an amount equal to the excess of
(A) the amount previously received by the Indemnified Person under this Article
7 with respect to such claim plus the amount of the insurance payments received,
over (B) the amount of Damages with respect to such claim which the Indemnified
Person has become entitled to receive under this Article 7.

 

7.5    Indemnification Procedures.

 

(a)    Notice of Claim.    As used herein, “Claim” means a claim for
indemnification of any Parent Indemnified Person or Seller Indemnified Person,
as applicable (each, an “Indemnified Person”) for Damages under this Article 7.
Parent or Seller, as applicable, shall give a written notice of a Claim executed
by an officer of Parent or Seller, as applicable (a “Notice of Claim”), whether
for its own Damages or for Damages incurred by any other Indemnified Person.
Parent or Seller, as applicable, may deliver a Notice of Claim based on, arising
from, relating to or caused by: (i) the items specified in Section 7.2 or
Section 7.3, as applicable; or (ii) the assertion, whether orally or in writing,
against any Indemnified Person of a claim, demand, suit, action, cause of
action, dispute, arbitration, investigation, inquiry or proceeding brought by a
third party against such Indemnified Person that is based on, arises out of or
relates to any item specified in Section 7.2 or Section 7.3, as applicable (in
each such case, a “Third-Party Claim”). No delay on the part of Parent or
Seller, as applicable, in giving Seller or Parent, respectively, a Notice of
Claim shall relieve any Indemnifying Person from any of their respective
obligations under this Article 7 unless (and then only to the extent) that the
Indemnifying Person is materially prejudiced thereby. Each Notice of Claim shall
be delivered no later than the expiration of the Escrow Period, and if delivered
by such date, such Claim shall survive the expiration of the Escrow Period until
final resolution thereof.

 

(b)    Contents of Notice of Claim.    Each Notice of Claim by Parent or Seller,
as applicable, given pursuant to Section 7.5(a) shall contain the following
information:

 

(i)    that the Indemnified Person has incurred, paid or accrued (in accordance
with GAAP) or, in good faith, believes it shall have to incur, pay or accrue (in
accordance with GAAP), Damages in an aggregate stated amount arising from such
Claim (which amount may be the amount of damages claimed by a third party in a
Third-Party Claim); and

 

(ii)    a brief description, in reasonable detail (to the extent reasonably
available to the Indemnified Person), of the facts, circumstances or events
giving rise to the alleged Damages based on the Indemnified Person’s good faith
belief thereof, including the identity and address of any third-party claimant
(to the extent reasonably available to the Indemnified Person) and copies of any
formal demand or complaint, the amount of Damages, the date each such item was
incurred, paid or

 

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accrued, or the basis for such anticipated Liability, and the specific nature of
the breach to which such item is related.

 

(c)    Defense of Third-Party Claims.

 

(i)    The Parent Indemnifying Person or the Seller Indemnifying Person (each,
an “Indemnifying Person”), as applicable, shall be entitled, at its expense, to
participate in the defense of any Third-Party Claim and to receive copies of all
pleadings, notices and communications with respect to any Third-Party Claim (to
the extent that such participation and receipt of documents by the Indemnifying
Person does not affect any privilege relating to the Indemnified Person) and, at
its option (subject to the limitations set forth in this Section 7.5(c)), shall
be entitled to assume control of such defense.

 

(ii)    Notwithstanding the foregoing, the Indemnifying Person shall not have
the right to assume control (or the Indemnified Person shall have the right to
take back control, as the case may be) of such defense and shall pay the fees
and expenses of counsel retained by the Indemnified Person if the Third-Party
Claim which the Indemnifying Person seeks to assume control (A) seeks only
non-monetary relief or (B) involves criminal or quasi-criminal allegations.

 

(iii)    If, pursuant to the terms of this Section 7.5(c), the Indemnifying
Person is permitted to assume control of the defense of a Third-Party Claim and
elects to do so, the Indemnified Person shall be entitled to receive copies of
all pleadings, notices and communications with respect thereto (to the extent
that such participation and receipt of documents by the Indemnified Person does
not affect any privilege relating to the Indemnifying Person) and shall have the
right to employ counsel separate from counsel employed by the Indemnifying
Person in any such action and to participate in the defense thereof, but the
fees and expenses of counsel employed by the Indemnified Person shall be at the
expense of the Indemnified Person unless (A) the employment and payment of the
Indemnified Person’s counsel has been specifically authorized by the
Indemnifying Person in writing or (B) the Indemnified Person has been advised in
writing by its counsel that a reasonable likelihood exists of a conflict of
interest between the Indemnified Person and the Indemnifying Person. If the
Indemnifying Person controls the defense of a Third-Party Claim in accordance
with Section 7.5(c)(i) and Section 7.5(c)(ii), then the Indemnifying Person
shall not enter into any settlement of such Third-Party Claim or cease to defend
such Third-Party Claim without obtaining the prior written consent of the
Indemnified Person if, pursuant to or as a result of such settlement or
cessation, (A) any injunction or other equitable relief shall be imposed against
the Indemnified Person or (B) the Indemnified Person shall not be expressly and
unconditionally released, with prejudice, from any and all Liabilities with
respect to such Third-Party Claim and all other claims arising out of the same
or similar facts and circumstances.

 

(iv)    If, pursuant to this Section 7.5(c), the Indemnifying Person is not
permitted to assume control of the defense of a Third-Party Claim or does not
elect to do so, then the Indemnified Person shall control such defense and the
costs and expenses incurred by the Indemnified Person in connection with such
defense (including reasonable attorney’s fees, other professionals’ and experts’
fees and court or arbitration costs) shall be included in the Damages for which
the Indemnified Person may seek indemnification pursuant to a Claim made by such
Indemnified Person hereunder. No Indemnified Person shall enter into any
settlement of a Third-Party Claim without the prior written consent of the
Indemnifying Person (which consent shall not be unreasonably withheld or
delayed); provided, however, that if the Indemnifying Person shall have
consented in writing to any such settlement (or a portion thereof if such
settlement also relates to a matter or matters for which indemnification is not
provided hereunder) then the Indemnifying Person shall have no power or
authority to object to any Claim by any Indemnified Person for indemnification
under Section 7.2 or Section 7.3 for the amount of such settlement and the
Indemnifying Person shall remain responsible for indemnifying the Indemnified

 

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Persons for all Damages incurred, resulting from, arising out of or caused by
the Third-Party Claim to the fullest extent provided in this Article 7.

 

(d)    Resolution of Notice of Claim.    Any Notice of Claim delivered by Parent
or the Seller, as applicable, shall be resolved as follows:

 

(i)    Uncontested Claims.    If, within 20 days after a Notice of Claim is
received, Parent or Seller, as applicable, does not contest such Notice of Claim
in writing to Seller or Parent, respectively, then Parent or Seller, as
applicable, shall be conclusively deemed to have consented, on behalf of the
Parent Indemnifying Person or the Seller Indemnifying Person, as applicable, to
the recovery by the Seller Indemnified Person or the Parent Indemnified Person,
as applicable, of the full amount of the Claim specified in the Notice of Claim,
including, in the case of a Claim made by a Parent Indemnified Person, the
forfeiture of the Escrow Shares (as provided in Section 7.3) and, without
further notice, to have stipulated to the entry of a final judgment for damages
against the Parent Indemnifying Person or the Seller Indemnifying Person, as
applicable, for such amount in any court having jurisdiction over the matter
where venue is proper.

 

(ii)    Contested Claims.    If, within 20 days after a Notice of Claim is
received, Parent or Seller, as applicable, contests such Notice of Claim in
writing to Seller or Parent, respectively (a “Contested Claim”), then such
Contested Claim shall be resolved by either (A) a written settlement agreement
executed by Parent and Seller or (B) in the absence of such a written settlement
agreement, by binding arbitration between Parent and Seller in accordance with
the terms and provisions of Section 10.1.

 

7.6    Survival of Claims.    Notwithstanding anything contained herein to the
contrary, if, before the applicable survival date specified in Section 7.1 or
the expiration of the applicable statute of limitations with respect to fraud,
willful misrepresentation or willful misconduct as provided in Section 7.1, as
applicable, an Indemnified Person sustains Damages and issues a Notice of Claim
with respect to an inaccuracy, misrepresentation or default in, or breach of,
any representation or warranty or other claim hereunder, then the Indemnified
Person’s rights hereunder shall survive any expiration of such representation or
warranty or indemnification obligation with respect to the matter claimed.

 

 

ARTICLE 8

CONDITIONS TO CLOSING

 

8.1    Conditions to Obligations of Seller.    Seller’s obligations to
consummate the sale, transfer and delivery of the Purchased Assets to Buyer and
the other transactions contemplated hereby are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Seller in writing):

 

(a)    Accuracy of Representations and Warranties.    The representations and
warranties of Parent and Buyer set forth in Article 4, “Representations and
Warranties of Parent and Buyer,” (i) that are qualified as to materiality or
Material Adverse Effect will be true and correct and (ii) that are not qualified
as to materiality or Material Adverse Effect shall be true and correct in all
material respects, in each case on and as of the Closing with the same force and
effect as if they had been made on the Closing Date (except for any such
representations or warranties that, by their terms, speak only as of a specific
date or dates, in which case such representations and warranties (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
and (ii) that are not qualified as to materiality or Material Adverse Effect
shall be true and correct in all material respects, on and as of such specified
date or dates), and at the Closing Seller will have received a certificate to
such effect executed by a duly authorized officer of Parent; provided, however,
that if any representation or warranty is true and correct

 

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as provided in the foregoing clause on the date of this Agreement, but such
representation or warranty ceases to be so true and correct thereafter and (A)
Parent or Buyer notifies Seller in reasonable detail of the facts and
circumstances as a result of which such representation or warranty ceases to be
true and correct in all material respects and (B) the ceasing of such
representation or warranty to be so true and correct does not have or represent
a Material Adverse Effect with respect Parent or Buyer, then for purposes of
this Section 8.1(a) only (and not for purposes of any other Section or Article
hereunder, including Article 7, “Indemnification”), such representation or
warranty shall be deemed to be so true and correct as of the Closing Date.

 

(b)    Covenants.    Each of Parent and Buyer will have performed and complied
in all material respects with all of its covenants contained in Article 5,
“Covenants and Other Agreements” on or before the Closing (to the extent that
such covenants require performance by Parent or Buyer on or before the Closing),
and at the Closing Seller will have received a certificate to such effect signed
by a duly authorized officer of Parent.

 

(c)    No Material Adverse Change.    Since the date of this Agreement, there
shall have been no Material Adverse Change in Parent, and at the Closing, Seller
shall have received a certificate to such effect executed by a duly authorized
officer of Parent.

 

(d)    Compliance with Law; No Legal Restraints; No Litigation.    There will
not be issued, enacted or adopted, or threatened in writing by any Governmental
Authority, any order, decree, temporary, preliminary or permanent injunction,
legislative enactment, statute, regulation, action or proceeding, or any
judgment or ruling by any Governmental Authority that prohibits or renders
illegal or imposes limitations on the material transactions contemplated by this
Agreement, any Buyer Ancillary Agreement or any Seller Ancillary Agreement. No
litigation or proceeding will be pending for the purpose or with the probable
effect of enjoining or preventing the consummation the material transactions
contemplated hereby.

 

(e)    Seller Stockholder Approval.    Each of this Agreement, the Seller
Ancillary Agreements, and the Asset Purchase, shall have been approved and
adopted by the Requisite Stockholder Approval.

 

(f)    Securities Exemptions.    In the event that the Shares become issuable
pursuant to Section 5.3(c) of this Agreement, then such issuance of the Shares
by Parent to Seller pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and shall be made in compliance
with Applicable Legal Requirements.

 

(g)    Other Deliveries.    Buyer will have made the other deliveries required
by Section 2.10.

 

8.2    Conditions to Obligations of Parent and Buyer.    Parent’s and Buyer’s
obligations to consummate the purchase of the Purchased Assets from Seller and
the other transactions contemplated hereby are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Parent or Buyer, as applicable, in
writing):

 

(a)    Accuracy of Representations and Warranties.  The representations and
warranties of Seller set forth in Article 3, “Representations and Warranties of
Seller,” (i) that are qualified as to materiality or Material Adverse Effect
will be true and correct and (ii) that are not qualified as to materiality or
Material Adverse Effect shall be true and correct in all material respects, in
each case on and as of the Closing with the same force and effect as if they had
been made on the Closing Date (except for any such representations or warranties
that, by their terms, speak only as of a specific date or dates, in

 

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which case such representations and warranties (i) that are qualified as to
materiality or Material Adverse Effect shall be true and correct and (ii) that
are not qualified as to materiality or Material Adverse Effect shall be true and
correct in all material respects, on and as of such specified date or dates),
and at the Closing Buyer will have received a certificate to such effect
executed by an authorized officer of Seller; provided, however, that if any
representation or warranty is true and correct as provided in the foregoing
clause on the date of this Agreement, but such representation or warranty ceases
to be so true and correct thereafter and (A) Seller notifies Parent and Buyer in
reasonable detail of the facts and circumstances as a result of which such
representation or warranty ceases to be true and correct in all material
respects and (B) the ceasing of such representation or warranty to be so true
and correct does not have or represent a Material Adverse Effect with respect
the Business or the Purchased Assets, then for purposes of this Section 8.2(a)
only (and not for purposes of any other Section or Article hereunder, including
Article 7, “Indemnification”), such representation or warranty shall be deemed
to be so true and correct as of the Closing Date.

 

(b)    Covenants.    Seller will have performed and complied in all material
respects with all of its covenants contained in Article 5, “Covenants and Other
Agreements,” on or before the Closing (to the extent that such covenants require
performance by Seller on or before the Closing), and at the Closing Buyer will
have received a certificate to such effect signed by an authorized officer of
Seller.

 

(c)    No Material Adverse Change.    There will not have been any Material
Adverse Change in the Purchased Assets or the Business, and at the Closing,
Buyer will have received a certificate to such effect signed by an authorized
officer of Seller.

 

(d)    Compliance with Law; No Legal Restraints; No Litigation.    There will
not be issued, enacted or adopted, or threatened in writing by any Governmental
Authority, any order, decree, temporary, preliminary or permanent injunction,
legislative enactment, statute, regulation, action or proceeding, or any
judgment or ruling by any Governmental Authority that prohibits or renders
illegal or imposes limitations on the material transactions contemplated by this
Agreement, any Seller Ancillary Agreement or any Buyer Ancillary Agreement. No
litigation or proceeding will be pending for the purpose or with the probable
effect of enjoining or preventing the consummation the material transactions
contemplated hereby or that could be reasonably expected to have a Material
Adverse Effect on the Purchased Assets or the Business.

 

(e)    Requisite Approvals.    Each of this Agreement and the Asset Purchase
shall have been approved and adopted by the Requisite Stockholder Approval. All
covenants by which Seller is bound, which covenants, if not waived, would be
breached by Seller as a result of the transactions contemplated by this
Agreement, shall have been validly waived pursuant to the provisions of thereof.

 

(f)    Acceptance of Offers of Employment.    At least 90% of the Selected
Employees shall have accepted Buyer’s or Parent’s offers of employment in a
writing signed by them on terms satisfactory to Buyer; provided, however, that
if a Selected Employee refuses to accept Buyer’s or Parent’s offer of employment
because the terms of such offer include either (i) compensation that is
materially less than the Selected Employee’s current rate of compensation or
(ii) benefits that are not substantially similar to the benefits provided by
Parent to its other employees holding a similar position to that offered to such
Selected Employee, then such Selected Employee will not be counted for purposes
of this Section 8.2(f) when calculating the percentage of Selected Employees
that have accepted Buyer’s offers of employment.

 

(g)    Securities Exemptions.    In the event that the Shares become issuable
pursuant to Section 5.3(c) of this Agreement, then such issuance of the Shares
by Parent to Seller pursuant to this

 

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Agreement shall be exempt from the registration requirements of the Securities
Act and shall be made in compliance with Applicable Legal Requirements.

 

(h)    Certificate as to Accounts Receivable and Deferred Revenue.    Seller
shall have provided a certificate, in form and substance reasonably satisfactory
to Parent, signed by the Chief Financial Officer of Seller, derived from and in
accordance with the books and records of Seller, setting forth and certifying
(i) the Accounts Receivable (together with the aging thereof by customer) as of
the Closing Date and (ii) the Deferred Revenue by customer, in both cases with
such other information as may be reasonably requested by Parent.

 

(i)    Other Deliveries.    Seller will have made the other deliveries required
by Section 2.9.

 

 

ARTICLE 9  

TERMINATION OF AGREEMENT

 

9.1    Termination by Mutual Consent.    This Agreement may be terminated at any
time before the Closing by the mutual written consent of Parent and Seller.

 

9.2    Unilateral Termination.

 

(a)    Either Parent or Seller, by giving written notice to the other, may
terminate this Agreement if a court of competent jurisdiction or other
Governmental Authority shall have issued a nonappealable final order, decree or
ruling or taken any other action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby.

 

(b)    Either Parent or Seller, by giving written notice to the other, may
terminate this Agreement if the Closing shall not have occurred by 5 p.m.
Pacific Time on November 30, 2003 (the “Termination Date”); provided, however,
that the right to terminate this Agreement pursuant to this Section 9.2(b) shall
not be available to any party whose failure to perform in any material respect
any of its obligations or covenants under this Agreement results in the failure
of any condition set forth in Article 8, “Conditions to Closing” or if the
failure of such condition results from facts or circumstances that constitute a
material breach of a representation or warranty or covenant made under this
Agreement by such party.

 

(c)    Seller may terminate this Agreement at any time before the Closing (i)
upon a breach of any representation, warranty, covenant or agreement on the part
of Parent or Buyer set forth in this Agreement or any Buyer Ancillary Agreement,
or if any representation or warranty of Parent or Buyer shall have become
untrue, in either case such that the conditions set forth in Section 8.1(a) or
Section 8.1(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue or (ii) if the
condition in Section 8.1(c) would not be satisfied at any time before the
Closing, provided that if such inaccuracy in Parent’s or Buyer’s representations
and warranties or breach by Parent or Buyer or the Material Adverse Change to
Parent is curable by Parent, then Seller may not terminate this Agreement under
this Section 9.2(c) for 15 days after delivery of written notice from Seller to
Parent of such breach or Material Adverse Change to Parent, provided Parent
continues to exercise reasonable efforts to cure such breach or Material Adverse
Change to Parent (it being understood that Seller may not terminate this
Agreement pursuant to this Section 9.2(c) if such breach by Parent or Buyer or
Material Adverse Change to Parent is cured during such 15-day period, or if
Seller shall have materially breached this Agreement).

 

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(d)    Parent may terminate this Agreement at any time before the Closing (i)
upon a breach of any representation, warranty, covenant or agreement on the part
of Seller set forth in this Agreement or any Seller Ancillary Agreement, or if
any representation or warranty of Seller shall have become untrue, in either
case such that the conditions set forth in Section 8.2(a) or Section 8.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue or (ii) if the condition in
Section 8.2(c) would not be satisfied at any time before the Closing, provided
that if such inaccuracy in Seller’s representations and warranties or breach by
Seller or the Material Adverse Change to the Purchased Assets or the Business is
curable by Seller, then Parent may not terminate this Agreement under this
Section 9.2(d) for 15 days after delivery of written notice from Parent to
Seller of such breach or Material Adverse Change to the Purchased Assets or the
Business, provided Seller continues to exercise reasonable efforts to cure such
breach or Material Adverse Change to the Purchased Assets or the Business (it
being understood that Parent may not terminate this Agreement pursuant to this
Section 9.2(d) if such breach by Seller or Material Adverse Change to the
Purchased Assets or the Business is cured during such 15-day period, or if
Parent shall have materially breached this Agreement).

 

(e)    Either Seller or Parent, by given written notice to the other, may
terminate this Agreement if this Agreement and the Asset Purchase are not
approved and adopted by the Requisite Stockholder Approval at a meeting of
Seller stockholders duly convened therefor or at any adjournment thereof;
provided, however, that the right to terminate this Agreement under this Section
9.2(e) shall not be available to Seller where the failure to obtain the approval
of Seller’s stockholders shall have been caused by the action or failure to act
of Seller and such action or failure to act constitutes a material breach by
Seller of this Agreement.

 

(f)    Parent may terminate this Agreement at any time before the Closing if a
Triggering Event shall have occurred. For the purposes of this Agreement, a
“Triggering Event” shall be deemed to have occurred if: (i) the Board of
Directors of Seller or any committee thereof shall for any reason have withdrawn
or shall have amended or modified its recommendation in favor of the Seller
stockholders approving the Agreement and the Asset Purchase; or (ii) the Board
of Directors of Company or any committee thereof shall have approved or publicly
recommended any Alternative Proposal.

 

9.3    Notice of Termination; Effect of Termination.    Any proper termination
of this Agreement under Section 9.1 or Section 9.2 shall be effective
immediately upon the delivery of written notice of the terminating party to the
other parties hereto (or, if all of the conditions therefor are satisfied, upon
the expiration of any relevant cure period provided for in the relevant
paragraphs of Section 9.1 or Section 9.2). In the event of the termination of
this Agreement as provided in Section 9.1 or Section 9.2, this Agreement shall
be of no further force or effect, except (i) as set forth in Section 9.4 and
Article 10, “General Provisions,” each of which shall survive the termination of
this Agreement and (ii) nothing herein shall relieve any party from Liability
for any willful breach of any covenant of this Agreement or for any intentional
or willful act or omission by a party which renders any representations or
warranties of such party untrue.

 

9.4    Fees.

 

(a)    In the event that this Agreement is terminated by Parent pursuant to
Section 9.2(f), Seller shall promptly, but in no event later than ten Business
Days after the date of such termination, pay Parent a fee in cash equal to
$800,000 (which is equal to 4% of the guaranteed Purchase Price payable under
this Agreement) in immediately available funds (the “Seller Termination Fee”).

 

(b)    In the event that this Agreement is terminated by Parent or Seller, as
applicable, pursuant to clause (i) of the initial sentence of Section 9.2(c) or
clause (i) of the initial sentence of

 

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Section 9.2(d), then if such termination is caused by the willful breach of any
representation, warranty or covenant by the non-terminating party, the
non-terminating party shall promptly, but in no event later than ten Business
Days after the date of such termination, pay the terminating party a fee in cash
equal to $800,000 (which is equal to 4% of the guaranteed Purchase Price payable
under this Agreement) in immediately available funds (the “Breach Termination
Fee”).

 

(c)    Seller and Parent acknowledge that the agreements contained in this
Section 9.4(a) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, neither Seller nor Parent would
enter into this Agreement. Accordingly, if either Seller or Parent fails to pay
in a timely manner the amounts due pursuant to this Section 9.4, and, in order
to obtain such payment, Seller or Parent makes a claim that results in a
judgment against the other party for the amounts set forth in this Section 9.4,
the paying party shall pay to the receiving party its reasonable costs and
expenses (including reasonable attorneys’ fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this Section 9.4
at the prime rate of The Chase Manhattan Bank in effect on the date such payment
was required to be made. Payment of the fees described in this Section 9.4 shall
not be in lieu of, and shall not limit any claim for, damages incurred in the
event of fraud or willful breach of this Agreement.

 

9.5    Liquidated Damages.    The Seller Termination Fee or the Breach
Termination Fee when paid to the receiving party in the manner herein provided
shall constitute liquidated damages to the receiving party and the paying party
shall have no further liability in respect thereof, except with respect to fraud
or willful breach of this Agreement. The parties agree that such damages are
difficult to estimate and that such amounts are reasonable approximations of
actual damages.

 

 

ARTICLE 10  

GENERAL PROVISIONS

 

10.1    Dispute Resolution.    Any Contested Claim shall be settled by
arbitration in (i) Santa Clara County, California with respect to any Claim made
by Seller and (ii) in New York, New York, with respect to any Claim made by
Parent or Buyer, and, except as herein specifically stated, in accordance with
the commercial arbitration rules (the “AAA Rules”) of the American Arbitration
Association or its successor (“AAA”) then in effect. In the event AAA ceases to
provide arbitration service, then the term “AAA” shall thereafter mean and refer
to J.A.M.S./ENDISPUTE (“J.A.M.S.”), and the arbitration will be conducted in
accordance with the provisions of J.A.M.S.’ Streamlined Arbitration Rules and
Procedures (with the term “AAA Rules” thereafter meaning and referring to
J.A.M.S.’ Streamlined Arbitration Rules and Procedures). However, in all events,
the arbitration provisions of this Section 10.1 shall govern over any
conflicting rules that may now or hereafter be contained in the AAA Rules. Any
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction over the subject matter thereof. The arbitrator shall have
the authority to grant any equitable and legal remedies that would be available
in any judicial proceeding instituted to resolve a Contested Claim.

 

(a)    Compensation of Arbitrator.    Any such arbitration will be conducted
before a single arbitrator who will be compensated for his or her services at a
rate to be determined by the parties or by the AAA, but based upon reasonable
hourly or daily consulting rates for the arbitrator in the event the parties are
not able to agree upon his or her rate of compensation.

 

(b)    Selection of Arbitrator.    The AAA will have the authority to select an
arbitrator from a list of arbitrators who are lawyers familiar with Delaware
contract law; provided, however, that (i) such lawyers cannot work for a firm
then performing services for either party, (ii) each party will have the
opportunity to make such reasonable objection to any of the arbitrators listed
as such party may wish and (iii) the AAA will select the arbitrator from the
list of arbitrators as to whom neither party makes any

 

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such objection. In the event that the foregoing procedure is not followed, each
party will choose one person from the list of arbitrators provided by the AAA
(provided that such person does not have a conflict of interest), and the two
persons so selected will select from the list provided by the AAA the person who
will act as the arbitrator.

 

(c)    Payment of Costs.    The parties will bear the expense of deposits and
advances required by the arbitrator in equal proportions, but either party may
advance such amounts, subject to recovery as an addition or offset to any award.
The arbitrator will award to the prevailing party, as determined by the
arbitrator, all costs, fees and expenses related to the arbitration, including
reasonable fees and expenses of attorneys, accountants and other professionals
incurred by the prevailing party.

 

(d)    Burden of Proof.    For any Contested Claim submitted to arbitration, the
burden of proof will be as it would be if the claim were litigated in a judicial
proceeding.

 

(e)    Award.    Upon the conclusion of any arbitration proceedings hereunder,
the arbitrator shall render findings of fact and conclusions of law and a final
written arbitration award setting forth the basis and reasons for any decision
reached (the “Final Award”) and shall deliver such documents to Parent and
Seller, together with a signed copy of the Final Award. The Final Award shall
constitute a conclusive determination of all issues in question, binding upon
the Indemnified Persons, the Indemnifying Persons and Seller, and shall include
an affirmative statement to such effect. To the extent that the Final Award
determines that an Indemnified Person has actually incurred Damages in
connection with the Contested Claim through the date of the Final Award
(“Incurred Damages”), the Final Award shall set forth and award to the
Indemnified Person the amount of such Incurred Damages. Awards of Damages shall
be subject to Section 7.4.

 

(f)    Terms of Arbitration.    The arbitrator chosen in accordance with this
Section 10.1 will not have the power to alter, amend or otherwise affect the
provisions of this Agreement, including the terms of these arbitration
provisions.

 

(g)    Exclusive Remedy.    Except as specifically otherwise provided herein,
arbitration will be the sole and exclusive remedy of the parties for any
Contested Claim arising out of this Agreement.

 

10.2    Expenses.    Except as provided in Section 5.3(d), Article 6 and Section
10.1 with regard to fees and expenses in connection with the respective matters
set forth therein, each party hereto will bear, pay and be responsible for all
costs and expenses, including fees and disbursements of counsel, financial
advisors and accountants, incurred by it in connection with this Agreement and
the transactions contemplated hereby.

 

10.3    Notices.    All notices and other communications required or permitted
under this Agreement will be in writing and will be either hand delivered in
person, sent by facsimile, sent by certified or registered first-class mail,
postage pre-paid, or sent by nationally recognized express courier service. Such
notices and other communications will be effective upon receipt if hand
delivered or sent by facsimile (with receipt confirmed), five days after mailing
if sent by mail, and one day after dispatch if sent by express courier, to the
following addresses, or such other addresses as any party may notify the other
parties in writing in accordance with this Section 10.3.

 

To Parent and Buyer:  

Neoforma, Inc.  

3061 Zanker Road  

San Jose, California, 95134

 

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Attention: General Counsel  

Facsimile: 408-468-4040  

 

with a copy to:

Fenwick & West LLP  

275 Battery Street, Suite 1500  

San Francisco, California 94111  

Attention: David Michaels  

Facsimile: (415) 281-1350  

 

To Seller:  

I-many, Inc.  

399 Thornall Street, 12th Floor  

Edison, New Jersey 08837  

Attention: President  

Facsimile: 732-452-1511  

 

with a copy to:  

Hale and Dorr LLP  

60 State Street  

Boston, Massachusetts 02109  

Attention: Jeffrey Stein  

Facsimile: (617) 526-5000

 

10.4    Headings.    The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.

 

10.5    Severability.    If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

 

10.6    Entire Agreement.    This Agreement (including all Schedules and
exhibits attached hereto), the Seller Ancillary Agreements, the Buyer Ancillary
Agreements, the Seller Disclosure Letter (including all Schedules thereto) and
the Parent Disclosure Letter (including all Schedules thereto) constitute the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and undertakings with respect to the subject
matter hereof, both written and oral. The express terms of this Agreement
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.

 

10.7    Assignment.    This Agreement may not be assigned by any party hereto
without the prior written consent of the other party and any purported
assignment without such consent will be void. No such assignment by Parent or
Buyer shall relieve Parent or Buyer of any of its respective obligations under
this Agreement.

 

10.8    No Third-Party Beneficiaries.    This Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or will confer upon any

 

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other person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except for the indemnification
rights of the Indemnified Persons under Article 7.

 

10.9    Amendment; Waiver.    This Agreement may not be amended or modified
except by an instrument in writing signed by each of the parties hereto. Waiver
of any term or condition of this Agreement will only be effective if and to the
extent documented in a writing signed by the party making or granting such
waiver and will not be construed as a waiver of any subsequent breach or waiver
of the same term or condition, or a waiver of any other term or condition, of
this Agreement. The failure of any party to enforce any provision hereof will
not be construed to be a waiver of the right of such party thereafter to enforce
such provisions.

 

10.10    Counterparts.    This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed will be deemed to be an original but all of which taken
together will constitute one and the same agreement.

 

10.11    Construction of Agreement.    When a reference is made in this
Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement
unless otherwise indicated. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. When a reference is made in this Agreement to an Article,
such reference shall be to an Article of this Agreement. This Agreement has been
negotiated by Parent, Buyer and Seller and their attorneys and the language
hereof will not be construed for or against either party. Unless otherwise
indicated, the words “include,” “includes” and “including” when used herein will
be deemed in each case to be followed by the words “without limitation.” Each
reference herein to a law, statute, regulation, document or agreement will be
deemed in each case to include all amendments thereto.

 

10.12    Attorneys’ Fees.    Except as otherwise provided herein, should suit be
brought to enforce or interpret any part of this Agreement, the prevailing party
will be entitled to recover, as an element of the costs of suit and not as
damages, reasonable attorneys’ fees to be fixed by the court (including costs,
expenses and fees on any appeal). The prevailing party will be entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment.

 

10.13    Specific Performance.    Parent, Buyer and Seller each acknowledge
that, in view of the uniqueness of the Purchased Assets, the Business and the
transactions contemplated by this Agreement, the Seller Ancillary Agreements and
the Buyer Ancillary Agreements, a party would not have an adequate remedy at law
for money damages if this Agreement, any Seller Ancillary Agreement or any Buyer
Ancillary Agreement is not performed in accordance with its respective terms.
Each party to this Agreement therefore agrees that the other party hereto shall
be entitled to seek specific enforcement of the terms of this Agreement, any
Seller Ancillary Agreement and any Buyer Ancillary Agreement in addition to any
other remedy to which it may be entitled, at law or in equity.

 

10.14    Passage of Title and Risk of Loss.    Legal title, equitable title and
risk of loss with respect to the Purchased Assets shall not pass to Buyer until
the property or right is transferred at the Closing and possession thereof (in
the case of tangible assets) is delivered to Buyer.

 

10.15    Governing Law; Forum.    This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to laws concerning choice of law or conflicts of law. Subject to Section
10.1, all disputes arising out of this Agreement or the obligations of the
parties hereunder, including disputes that may arise following termination of
this Agreement, shall be subject to the exclusive jurisdiction and venue of the
Delaware State courts (or, if there is federal jurisdiction, then the exclusive
jurisdiction of the United States District Court for the District of Delaware).
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO

 

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THE PERSONAL AND EXCLUSIVE JURISDICTION AND VENUE OF SAID COURTS AND WAIVES
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME.

 

IN WITNESS WHEREOF, the parties have caused this Asset Purchase Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

I-MANY, INC.

     

NEOFORMA, INC.

By:   /s/    A. Leigh Powell               By:   /s/    Daniel A Eckert      

Name:

Title:

 

A. Leigh Powell

President and Chief Executive Officer

     

Name:

Title:

 

Daniel A Eckert

President and COO

 

 

       

NEOCARS CORPORATION

            By:   /s/    Daniel A Eckert                  

Name:

Title:

 

Daniel A Eckert

President and COO

 

 

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