Exhibit 10.1

SHARE Purchase Agreement

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I       DEFINITIONS; INTERPRETATION

1

1.1.

Definitions

1

1.2.

Interpretation

11

1.3.

Rules of Construction

11

ARTICLE II      SHARE PURCHASE

12

2.1.

Share Purchase; Closing Consideration

12

2.2.

Tax Matters

12

2.3.

Purchase Price Adjustment

12

2.4.

Earn-Out

14

ARTICLE III     CLOSING

16

3.1.

Closing

16

3.2.

Closing Deliverables

16

3.3.

Closing Payments

18

ARTICLE IV     REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY

18

4.1.

Organization

18

4.2.

Authorization

19

4.3.

Capitalization

19

4.4.

Non-Contravention

19

4.5.

Permits; Compliance

20

4.6.

Financial Statements

20

4.7.

Accounts Receivable

21

4.8.

Inventories

22

4.9.

Absence of Changes

22

4.10.

Litigation

23

4.11.

Employee Matters

23

4.12.

Real Property; Title to Assets

26

4.13.

Intellectual Property

27

4.14.

Environmental Matters

28

4.15.

Taxes

28

4.16.

Material Contracts

29

4.17.

Customers; Suppliers

31

4.18.

Insurance

31

4.19.

Brokers

31

4.20.

Warranties and Guaranties

32

4.21.

Compliance with Laws

32

4.22.

Books and Records

32

4.23.

Related Party Transactions

32

4.24.

Restrictions on Business Activities

33

4.25.

Solvency

33

4.26.

Disclosure

33

 

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ARTICLE V      REPRESENTATIONS AND WARRANTIES OF THE SELLERS

33

5.1.

Ownership of Shares

33

5.2.

Authorization

34

5.3.

Non-Contravention

34

5.4.

Litigation

34

5.5.

No Brokers

34

5.6.

Taxes

34

5.7.

Confirmation Regarding the Company Representations and Warranties

35

ARTICLE VI     REPRESENTATIONS AND WARRANTIES OF BUYER

35

6.1.

Organization and Authority of Buyer; Enforceability

35

6.2.

Non-Contravention

35

6.3.

Legal Proceedings

35

6.4.

Investment Purpose

35

ARTICLE VII      COVENANTS

35

7.1.

Further Action; Reasonable Best Efforts

35

7.2.

Public Announcements

36

7.3.

Tax Matters

36

7.4.

Release

38

7.5.

401(k) Plans

38

7.6.

Customer Notification

38

ARTICLE VIII     INDEMNIFICATION

38

8.1.

Indemnification

38

8.2.

Recourse; Other Limitations

40

8.3.

Period for Claims; Other Limitations

40

8.4.

Claims

41

8.5.

Resolution of Objections to Claims

41

8.6.

Third-Party Claims

42

8.7.

No Waiver by Knowledge

43

8.8.

Tax Treatment of Indemnity Payments

43

ARTICLE IX      GENERAL PROVISIONS

43

9.1.

Survival of Representations and Warranties and Covenants

43

9.2.

Notices

43

9.3.

Counterparts

43

9.4.

Entire Agreement; Non-assignability; Parties in Interest; Amendment

43

9.5.

Assignment

44

9.6.

Severability

44

9.7.

Remedies Cumulative

44

9.8.

Governing Law

44

9.9.

WAIVER OF JURY TRIAL

44

9.10.

Fees and Expenses

45

9.11.

Confidentiality

45

9.12.

Limited Guarantee

45

9.13.

Sellers’ Representative

45

 

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Schedules

 

Schedule AAdditional Defined Terms

Schedule BAccounting Principles

Schedule CFunds Flow Memo

Schedule DNotice Addresses

Schedule EIllustrative Calculation of Net Working Capital Amount

 

Schedule 3.2(a)(ix)Required Consents

 

 

Disclosure Schedules

 

Section 4.1(a)Organization

Section 4.1(b)Subsidiaries

Section 4.3Capitalization

Section 4.4Non-Contravention

Section 4.5Permits; Compliance

Section 4.6Financial Statements

Section 4.8Inventories

Section 4.9(a)(1)Absence of Changes

Section 4.9(a)(2)Change of Control Bonuses

Section 4.10Litigation

Section 4.11Employee Matters

Section 4.12Real Property; Title to Assets

Section 4.13Intellectual Property

Section 4.16(a)Material Contracts

Section 4.17Customers; Suppliers

Section 4.19Brokers

Section 4.20Warranties and Guaranties

Section 4.23Related Party Transactions

 

 

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SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of
December 31, 2018 (such date, the “Closing Date”) by and among L.A.R.K.
Industries, Inc. (d/b/a Residential Design Services), a California corporation
(“Buyer”), T.A.C. Ceramic Tile Co., a Virginia corporation (the “Company”),
Robert J. Hughes, as Trustee serving under the TAC & TAC Irrevocable Trust Dated
December 28, 2012 (the “TAC & TAC Irrevocable Trust”), Thomas A. Callaway, as
Trustee serving under the Thomas A. Callaway Living Trust U/A dated December 28,
2012 (the “Thomas A. Callaway Living Trust” and together with the TAC & TAC
Irrevocable Trust, each a “Seller” and collectively the “Sellers”), and Thomas
A. Callaway, solely in his capacity as the Sellers’ Representative and for
purposes of agreeing to be bound by ARTICLE IX.  Buyer, the Company, the Sellers
and the Sellers’ Representative are sometimes collectively referred to herein as
the “Parties” and individually as a “Party”. Capitalized terms used herein
(including in this introductory paragraph) and not otherwise defined herein have
the respective meanings given to such terms in Section 1.1 or Schedule A, as
applicable.

BACKGROUND

A.

The Company is engaged in the Business.

B.

Immediately before giving effect to the Transactions (as defined below) the
Sellers, collectively, were the record and beneficial holders of 100% of the
issued and outstanding equity and equity-linked interests of the Company
(collectively, the “Shares”).

C.

The Parties intend that, pursuant to the terms and conditions of this Agreement,
at the closing of the Transaction, Buyer will purchase from each Seller, and
each Seller will sell to Buyer, 100% of the Shares held by such Seller
immediately prior to the Closing, in each case free and clear of all Liens (as
defined below) (collectively with the other transactions contemplated hereby,
the “Transaction”).

D.

The Parties desire to make certain representations, warranties, covenants and
agreements in connection with the Transaction and to prescribe various
conditions to the Transaction.

E.

Concurrently with the execution of this Agreement and as a material inducement
to the willingness of Buyer to enter into this Agreement and to consummate the
Transaction, each Seller is entering into (i) a release of claims and (ii) a
restrictive covenant agreement to become effective upon the closing of the
Transaction.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I
DEFINITIONS; INTERPRETATION

1.1.Definitions.  For purposes of this Agreement, the following terms have the
respective meanings indicated in this Section 1.1.

“Accounting Principles” means GAAP, except to the extent that the Company’s
historical method of accounting, using the accounting principles, methods and
practices utilized in preparing the Financial Statements throughout the period
indicated, applied on a consistent basis, and as applied in accordance with the
revenue and expense recognition principles set forth on Schedule B is not in
accordance with GAAP.

 

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“Action” means any claim, action, suit, charge, complaint, grievance,
arbitration, notice, inquiry, dispute, strike, meditation, audit, investigation,
litigation or other proceeding (whether civil, criminal or administrative)
commenced, brought, conducted or heard by or before any Governmental Entity or
arbitrator.

“Adjusted EBITDA” has the meaning specified in Schedule A.

“Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person.

“Agreed Value” has the meaning set forth in Section 8.6(c).

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

“Ancillary Transaction Documents” has the meaning specified in Schedule A.

“Assumed Contracts” means all Contracts to which the Company is a party (other
than any Company Plans or insurance policies held or maintained by the Company).

“Assumed Liabilities” means: (a) all executory obligations required to be
performed following the Closing under the Assumed Contracts, but only to the
extent such executory obligations are incurred in the ordinary course of
business, are first required to be performed on or after the Closing, are
expressly set forth in the written terms of the Assumed Contracts and do not
relate to any failure to perform, improper performance, warranty or other breach
default or violation by the Company on or prior to the Closing; and (b) those
trade accounts payable of the Company to third parties in connection with the
Business that remain unpaid and are not delinquent as of the Closing Date and
that are included as current liabilities in the calculation of the Final Net
Working Capital Amount.

“Author” has the meaning set forth in Section 4.13(c).

“Balance Sheet Date” has the meaning specified in Schedule A.

“Basket Amount” has the meaning specified in Schedule A.

“beneficial owner”, with respect to any capital stock or other equity or
equity-linked interests of the Company, has the meaning ascribed to such term
under Rule 13d-3(a) of the Exchange Act.

“Business” has the meaning specified in Schedule A.

“Business Day” means a day on which banks are open for business in the State of
New York, but does not include a Saturday, Sunday or a statutory holiday in the
State of New York.

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

“Claims Period” has the meaning set forth in Section 8.3.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Effective Time” has the meaning specified in Schedule A.

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“Code” means the Internal Revenue Code of 1986, as amended, and any reference to
any particular Code section shall be interpreted to include any revision of or
successor to that section regardless of how numbered or classified.

“Commercial Leases” means those certain Commercial Leases, dated as of the
Closing Date, by and between the Company and Callaway Development, LLC.

“Company Intellectual Property” means any and all Company Owned Intellectual
Property and any and all Third Party Intellectual Property that is licensed to
the Company.

“Company Owned Intellectual Property” means any and all Intellectual Property
Rights that are owned or purportedly owned by the Company or that were developed
for the Company by full or part time employees or independent contractors of the
Company (including customizations of Third Party Intellectual Property).

“Company Plan” means any “employee benefit plan” (within the meaning of Section
3(3) of ERISA), whether or not subject to ERISA, equity-based compensation
(including any stock option, stock appreciation right, restricted stock, stock
purchase, stock unit, performance award, capital interest, profits interest or
phantom equity), compensation, change in control, transaction, retention,
incentive, bonus, profit-sharing, savings, deferred compensation, health,
medical, dental, life insurance, disability, accident, supplemental
unemployment, vacation, paid time off, welfare, pension, retirement, employment,
severance, salary or benefits continuation, death benefit, gift, fringe benefit
or other perquisites in the form of a plan, policy, program, arrangement,
agreement or commitment (and amendments thereto), whether or not any such plan,
policy, program, arrangement, agreement and/or commitment is in writing, funded
or unfunded, whether or not Tax-qualified, or subject to or exempt from the
provisions of ERISA, for the direct or indirect benefit of any current or former
employee, officer, manager, director or consultant of the Company or any
dependent, family member or associate of any of them, which the Company or any
of its Affiliates maintains, sponsors, contributes to or is required to
contribute to.

“Contract” means any contract, agreement, statement of work, understanding,
arrangement or commitment, written or oral, to which the Company is a party or
by which the Company or any of its properties, rights or assets are bound.

“Contract Materiality Threshold” has the meaning specified in Schedule A.

“control” (and, with correlative meaning, “controlled by” and “under common
control with”) means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise.

“Disclosure Schedules” means the Disclosure Schedules delivered by the Company
and the Sellers concurrently with the execution and delivery of this Agreement,
which disclosures, in order to be effective, shall clearly indicate the Section
and, if applicable, the Subsection of Article IV or Article V to which it
relates (unless and only to the extent the relevance to other representations
and warranties is reasonably apparent from the actual text of the disclosures,
which, for the avoidance of doubt, may include cross-references from one Section
of the Disclosure Schedule to another Section of the Disclosure Schedule), and
each affirmative disclosure made pursuant to the representations and warranties
shall also be deemed to be part of the representations and warranties made by
the Company to Buyer under Article IV and by the Sellers under Article V.

“Dispute Notice” has the meaning set forth in Section 2.3(a).

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“Disputed Amount” has the meaning set forth in Section 8.6(c).

“Disputed Items” has the meaning set forth in Section 2.3(a).

“Earn-Out Business” has the meaning specified in Schedule A.

“Earn-Out Consideration” has the meaning set forth in Section 2.4(a).

“Earn-Out End Date” has the meaning specified in Schedule A.

“Earn-Out Statement” has the meaning set forth in Section 2.4(b)(i).

“Earn-Out Statement Delivery Deadline” has the meaning specified in Schedule A.

“Enterprise Value” has the meaning specified in Schedule A.

“Environmental Laws” means all material federal, state and local Laws relating
to protection of the environment, including surface or ground water, drinking
water supply, soil, surface or subsurface strata or medium, or ambient air,
pollution control and Hazardous Substances.

“Environmental Permits” means all Permits issued pursuant to Environmental Laws.

“Environmental Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, dumping or disposing into the
environment.

“Equity Interest” has the meaning set forth in Section 5.1.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations thereunder.

“Estimated Balance Sheet Certificate” means a certificate: (a) in the form
provided by Buyer to the Company prior to the Closing Date; (b) prepared by the
Company; (c) reasonably acceptable to Buyer; (d) executed by the Company’s Chief
Executive Officer (or similar officer); (e) dated as of the Closing Date; (f)
certifying the Company’s good faith estimate, as of immediately prior to the
Closing Effective Time, of (i) the Estimated Net Working Capital Amount, and
illustrating the calculation of the Estimated Net Working Capital Amount,
including: (A) the amount of each line item component of the consolidated total
current assets of the Company included in the Estimated Net Working Capital
Amount (corresponding to the line items set forth in the Estimated Company
Balance Sheet to the maximum extent practicable); and (B) the amount of each
line item component of the consolidated total current liabilities of the Company
included in the Estimated Net Working Capital Amount (corresponding to the line
items set forth in the Estimated Company Balance Sheet to the maximum extent
practicable); (ii) an itemized list of each element of the Estimated
Indebtedness of the Company with a description of the amount and nature of such
Estimated Indebtedness and the person to whom such Indebtedness is owed; (iii)
an itemized list of each unpaid Estimated Transaction Expense with a description
of the amount of such Estimated Transaction Expense and the person to whom such
Estimated Transaction Expense is owed; (iv) the Estimated Net Working Capital
Adjustment Amount; and (v) the Estimated Purchase Price Adjustment Amount.

“Estimated Indebtedness” means the Company’s good faith estimate, as of 11:59
p.m. Eastern Time on the last day preceding the Closing Date, of the Company’s
Indebtedness that existed prior to the Closing and will remain unpaid
immediately following the Closing, excluding any Indebtedness that the Company
included in current liabilities in determining the Estimated Net Working Capital
Amount.

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“Estimated Net Purchase Price” means an amount equal to the sum of: (a) the
Enterprise Value; plus (b) the Estimated Net Working Capital Adjustment Amount.

“Estimated Net Working Capital Adjustment Amount” means an amount (which may be
positive, negative or equal to zero) equal to: (a) the Estimated Net Working
Capital Amount; minus (b) the Target Net Working Capital Amount.

“Estimated Net Working Capital Amount” means the Company’s good faith estimate,
as of immediately prior to the Closing Effective Time, of the Net Working
Capital Amount.

“Estimated Company Balance Sheet” means the unaudited consolidated balance sheet
for the Company as of immediately prior to the Closing Effective Time, prepared
in good faith in accordance with Accounting Principles and presenting fairly, in
all respects, the financial condition of the Company at the respective date and
delivered concurrently with the delivery of the Estimated Balance Sheet
Certificate.

“Estimated Transaction Expenses” means the Company’s good faith estimate, as of
11:59 p.m. Eastern Time on the last day preceding the Closing Date, of the
Transaction Expenses.

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

“Excluded Liabilities” means any Liabilities of the Company or any Liabilities
relating to the Business that are not Assumed Liabilities, including any
Liability: (a) owed to any Seller or any Affiliate of a Seller; (b) pertaining
to Pre-Closing Taxes; (c) for any Indebtedness; (d) relating to or arising out
of claims made in pending or future Actions, claims made based on violations or
non-compliance with any Law, breach of contract, employment practices (which
shall include, for the avoidance of doubt, any Liability related to claims for
unpaid commissions claimed by any Person), environmental or health and safety
matters or any other actual or alleged failure by the Company to perform any
obligation, in each case, relating to or arising out of events that have
occurred, or services performed, or products sold, or the operation of the
Business by the Company prior to the Closing; (e) under any Company Plan
maintained or sponsored by the Company or any employment agreements held by the
Company; (f) relating to any non-compliance by the Company with any applicable
bulk sales Law; (g) that constitutes a Transaction Expense; and (h) relating to
any overpayments made to the Company prior to the Closing.

“Final Balance Sheet Certificate” means a certificate executed by an authorized
officer of Buyer and dated no later than 90 days following the Closing Date,
certifying Buyer’s calculation, as of immediately prior to the Closing Effective
Time, of: (a) the Final Net Working Capital Amount, and illustrating the
calculation of the Final Net Working Capital Amount, including: (i) the amount
of each line item component of the consolidated total current assets of the
Company included in the Final Net Working Capital Amount (corresponding to the
line items set forth in the Final Company Balance Sheet to the maximum extent
practicable); (ii) the amount of each line item component of the consolidated
total current liabilities of the Company included in the Final Net Working
Capital Amount (corresponding to the line items set forth in the Final Company
Balance Sheet to the maximum extent practicable); (b) an itemized list of each
element of the Final Indebtedness of the Company; (c) an itemized list of each
Final Transaction Expense; (d) the Final Net Working Capital Adjustment Amount;
and (e) the Final Purchase Price Adjustment Amount; provided, however, that such
certificate shall be deemed final only in accordance with the terms of Section
2.3(a).

“Final Company Balance Sheet” means the unaudited balance sheet for the Company
as of immediately prior to the Closing Effective Time, prepared in good faith in
accordance with Accounting Principles and presenting fairly, in all respects,
the financial condition of the Company at the respective date and delivered
concurrently with the delivery of the Final Balance Sheet Certificate.

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“Final Indebtedness” means Buyer’s calculation, as of 11:59 p.m. Eastern Time on
the last day preceding the Closing Date, of the Company Group’s Indebtedness
that existed prior to the Closing and remained unpaid immediately following the
Closing, excluding any Indebtedness included in current liabilities in
determining the Final Net Working Capital Amount, all as finally determined in
accordance with Section 2.3.

“Final Net Purchase Price” means an amount equal to the Estimated Net Purchase
Price (as finally adjusted and determined in accordance with Section 2.3).

“Final Net Working Capital Adjustment Amount” means an amount (which may be
positive, negative or equal to zero) equal to: (a) the Final Net Working Capital
Amount; minus (b) the Target Net Working Capital Amount.

“Final Net Working Capital Amount” means Buyer’s calculation, as of immediately
prior to the Closing Effective Time, of the Net Working Capital Amount, which
such calculation shall be included in the Final Balance Sheet Certificate.

“Final Transaction Expenses” means Buyer’s calculation, as of 11:59 p.m. Eastern
Time on the last day preceding the Closing Date, of the Transaction Expenses as
finally determined in accordance with Section 2.3.

“Financial Statements” has the meaning specified in Schedule A.

“Fundamental Representations” means any of the representations and warranties in
Section 4.1 (Organization), Section 4.2 (Authorization), Section 4.3
(Capitalization), Section 4.4 (Non-Contravention), Section 4.11 (Employee
Matters), Section 4.12(c) (Real Property; Title to Assets), Section 4.14
(Environmental Matters), Section 4.15 (Taxes), Section 4.19 (Brokers), Section
5.1 (Ownership of Shares), Section 5.2 (Authorization), Section 5.3
(Non-Contravention) and Section 5.5 (No Brokers).

“Funds Flow Memo” means the funds flow memo attached hereto as Schedule C.

“GAAP” means generally accepted accounting principles for financial reporting in
the United States in effect as of the applicable date.

“General Enforceability Exclusions” means applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally, general equitable principles and the availability of equitable
remedies.

“Governmental Entity” means: (a) any federal, state, local, municipal, foreign
or other government; (b) any governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, entity
or self-regulatory organization and any court or other tribunal); (c) any
governmental or similar body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature, including any arbitral tribunal; or (d) any
agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of any federal, state, local, municipal
or foreign government or other political subdivision or otherwise, or any
officer or official thereof with requisite authority.

“Hazardous Substance” means any waste, pollutant, contaminant, hazardous
substance, toxic or corrosive substance, hazardous waste, special waste,
industrial substance, by-product, process-intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical liquids or solids,
liquid or

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gaseous products, or any constituent of any such substance or waste, the use,
handling or disposal of which by the Company is governed by or subject to
applicable Laws.

“Indebtedness” means, at a particular time, without duplication: (a) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money; (b) any indebtedness evidenced by any note,
bond, debenture or other debt security; (c) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business and
reflected on the Estimated Company Balance Sheet); (d) any drawn amounts under
letter of credit arrangements; (e) any cash overdrafts drawn as of the Closing;
(f) any off-balance sheet Liabilities; (g) any commitment by which a Person
assures a creditor against loss (including contingent reimbursement obligations
with respect to letters of credit); (h) any indebtedness guaranteed in any
manner by a Person (including guarantees in the form of an agreement to
repurchase or reimburse); (i) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss; (j) any accrued but unpaid incentive compensation, bonus,
profit-sharing obligation or deferred compensation payable under any Company
Plans; (k) any indebtedness secured by a Lien on a Person’s assets; (l) any
Liabilities of the Company relating to any period ending at or prior to the
Closing to the extent not included in current liabilities in determining the
Final Net Working Capital Amount; and (m) any prepayment premiums or penalties
triggered (or partially triggered) by the repayment or payoff of all or any
amount outstanding under the items described in the preceding clauses (a)
through (l) of this definition.

“Indemnifiable Damages” has the meaning set forth in Section 8.1(a).

“Indemnification Period” has the meaning set forth in Section 8.3.

“Indemnified Persons” has the meaning set forth in Section 8.1(a).

“Indemnifying Person” has the meaning set forth in Section 8.1(a).

“Intellectual Property Rights” means any and all: (a) U.S. and foreign patents,
patent applications, continuations, continuations in part, and divisionals,
reissues, extensions and reexaminations thereof, and inventions (whether or not
patentable); (b) trade names, trade dress, logos, packaging design, slogans,
work products, Internet domain names, registered and unregistered trademarks and
service marks and applications for registration; (c) copyrights in both
published and unpublished works, including all compilations, databases, computer
programs (source code and object code versions), and work product, programs,
manuals and other documentation and all copyright registrations and
applications, and all derivatives, translations, adaptations and combinations of
the above; (d) know-how, trade secrets, confidential or proprietary information,
work product, research in progress, algorithms, data, designs, processes,
formulae, methodologies, drawings, schematics, blueprints, flow charts, models,
prototypes, techniques, research in progress, proprietary information, data,
materials and technology owned by the Company; and (e) goodwill, franchises,
licenses, permits, consents, approvals and claims of infringement against third
parties in any of the foregoing rights.

“Inventories” has the meaning set forth in Section 4.8.

“IRS” means the Internal Revenue Service.

“knowledge” means, with respect to the Company, the actual knowledge of each of
the Knowledge Group Members, in each case after due inquiry into the matter at
hand.

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“Knowledge Group Members” has the meaning specified in Schedule A.

“Law” means any federal, state, foreign, local, municipal or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity and any orders, writs, injunctions, awards, judgments
and decrees.

“Leased Real Property” has the meaning set forth in Section 4.12(a).

“Liabilities” means any and all debts, liabilities and obligations of any
nature, whether accrued or fixed, absolute or contingent, matured or unmatured,
determined or determinable, asserted or unasserted, known or unknown, including
those arising under any Law, action or order of any Governmental Entity and
those arising under any Contract.

“Lien” means any mortgage, pledge, security interest, voting trust, proxy,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Company, any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
Law.

“Material Adverse Effect” means, with respect to any entity, any change, event,
circumstance or effect (each, an “Effect”) that, individually or taken together
with all other Effects, and regardless of whether or not such Effect constitutes
a breach of the representations or warranties made by such entity in this
Agreement is materially adverse in relation to the financial condition or
results of operations of such entity and its Subsidiaries, if any, taken as a
whole; provided, however, that the following Effects shall not be taken into
account except to the extent they disproportionately impact such entity as
compared to other participants in the industry in which such entity operates:
(a) any Effect resulting from (i) changes in the general worldwide, U.S.
financial, securities and currency markets, changes in prevailing interest rates
or exchange rates or changes in general worldwide, U.S. economic, regulatory or
political conditions, (ii) acts of war or terrorism or other events or changes
that generally affect the participants in the industry in which such entity
operates or (iii) changes in applicable Laws or accounting standards; and (b)
strikes, slowdowns or work stoppages.

“Material Contract” has the meaning set forth in Section 4.16(a).

“Multiemployer Plan” has the meaning set forth in Section 4.11(d).

“Multiple Employer Plan” has the meaning set forth in Section 4.11(d).

“Net Working Capital Amount” has the meaning specified in Schedule A.

“Neutral Accountant” has the meaning specified in Schedule A.

“Notice of Earn-Out Disagreement” has the meaning set forth in Section
2.4(b)(ii).

“Officer’s Certificate” has the meaning set forth in Section 8.4.

“Organizational Documents” means: (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership; (d) the
operating or limited liability company agreement and the certificate of
formation or articles of organization of a limited liability company; (e) any
charter, joint venture agreement or similar document adopted or filed in
connection with

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the creation, formation or organization of a Person; and (f) any amendment or
equivalent of any the foregoing.

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

“Permits” has the meaning set forth in Section 4.5(a).

“Permitted Liens” means: (a) Liens for current Taxes and assessments and other
governmental charges not yet past due, in each case, for which adequate reserves
have been maintained on the Financial Statements of the Company in accordance
with GAAP; (b) inchoate mechanics’ and materialmen’s Liens for construction in
progress; and (c) workmen’s, repairmen’s, warehousemen’s and carriers’ Liens
arising in the ordinary course of business of the Company consistent with past
practice for sums not yet due and payable.

“Person” means an individual, corporation, partnership, limited partnership,
limited liability company, syndicate, person (including a “person” as defined in
Section 13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a government.

“Post-Closing Tax Period” means any Tax period beginning after the Closing Date
and, with respect to any Tax period that begins prior to the Closing Date and
ends after the Closing Date, the portion of such Taxable period beginning the
day after the Closing Date, as applicable.

“Pre-Closing Ownership Percentage” means, with respect to the TAC & TAC
Irrevocable Trust, 49%, and with respect to the Thomas A. Callaway Living Trust,
51%.

“Pre-Closing Sales Taxes” has the meaning set forth in Section 7.3(e)(i).

“Pre-Closing Sales Tax Matter” has the meaning set forth in Section 7.3(e)(ii).

“Pre-Closing Tax Period” means any Tax period beginning before the Closing Date
and, with respect to any Tax period that begins prior to the Closing Date and
ends after the Closing Date, the portion of such Taxable period ending as of the
close of business on the Closing Date, as applicable.

“Pre-Closing Taxable Events” means any transaction or event occurring on or
before the Closing Date, the occurrence of which results in the imposition of a
Tax on the Company, provided that the transactions contemplated hereby shall not
be deemed to constitute Pre-Closing Taxable Events.

“Pre-Closing Taxes” means any Taxes for a Pre-Closing Tax Period of the Company
or the portion of a Straddle Period ending on the Closing Date.

“Property Taxes” means all real property Taxes, personal property Taxes, and
similar ad valorem obligations levied for any Taxable period.

“Purchase Price Deficiency” has the meaning set forth in Section 2.3(c).

“Purchase Price Excess” has the meaning set forth in Section 2.3(c).

“Related Party” has the meaning set forth in Section 4.23(a).

“Released Claims” has the meaning set forth in Section 7.4.

“Releasing Parties” has the meaning set forth in Section 7.4.

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“Restricted Party” has the meaning specified in Schedule A.

“Restrictive Covenant Agreement” has the meaning specified in Schedule A.

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

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

“Sellers’ Representative” has the meaning set forth in Section 9.13.

“Straddle Period” has the meaning set forth in Section 7.3(a).

“Settlement Amount” has the meaning set forth in Section 8.6(c).

“Significant Customer” has the meaning set forth in Section 4.17(a).

“Significant Supplier” has the meaning set forth in Section 4.17(b).

“Special Matters” has the meaning specified in Schedule A.

“Specified Liabilities” has the meaning set forth in Section 4.6(e).

“Subsequent Claims Period” has the meaning set forth in Section 8.3.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company or other legal entity of which such
Person owns, directly or indirectly, 50% or more of the capital stock,
membership interests or other equity interests that are generally entitled to
vote for the election of the board of directors, board of managers or other
governing body of such corporation, partnership, joint venture, limited
liability company or other legal entity or to vote as a general partner thereof.

“Target Net Working Capital Amount” has the meaning specified in Schedule A.

“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means: (a) any
federal, state, local or foreign tax, assessment, fee, duty, levy or other
charge of any kind whatsoever (whether disputed or not) imposed by any
Governmental Entity responsible for the imposition of any such tax (domestic or
foreign) (each, a “Tax Authority”), including any net income, alternative or
add-on minimum, gross income, estimated, gross receipts, sales, use, ad valorem,
value added, transfer, franchise, capital stock, profits, license, registration,
withholding, payroll, social security (or equivalent), employment, unemployment,
disability, excise, severance, stamp, occupation, premium, property (real,
tangible or intangible), escheat or unclaimed property, environmental, windfall
profit, custom duty or other tax, (b) any interest or any penalty, addition to
tax or additional amount with respect thereto, imposed, assessed or collected by
or under the authority of any Governmental Entity; and (c) any Liability for the
payment of any amounts of the type described in clauses (a) or (b) of this
sentence as a result of being a transferee of or successor to any Person,
operation of Law, Treasury Regulation Section 1.1502-6(a) (or any similar
provision of Law or any predecessor or successor thereof), any express or
implied obligation to assume such Taxes or to indemnify any other Person, or
otherwise.

“Tax Return” means any return, statement, report or form (including estimated
Tax returns and reports, withholding Tax returns and reports, any schedule or
attachment, and information returns and reports) filed or required to be filed
with respect to Taxes, and any amendment thereof.

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“Third-Party Claim” has the meaning set forth in Section 8.6(a).

“Third Party Intellectual Property” means any and all Intellectual Property
Rights owned by a third party as of the Closing Date.

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

“Transaction Expenses” means all third party fees and expenses incurred or
otherwise payable by the Company or any Seller in connection with this Agreement
and the Transactions, whether or not billed or accrued, including: (a) 50% of
any Transfer Taxes; (b) any transaction bonus, retention, severance,
termination, change in control or similar-type payments or benefits made to any
current or former service provider of the Company in connection with the
execution of this Agreement or consummation of the Transactions, including any
fees, costs, expenses related to such payments; (c) any employer portion of any
employment, payroll or similar Taxes payable by the Company or any Seller in
connection with any payments related to any transaction bonus, retention,
severance, termination, change in control or similar-type payments or benefits
in connection with the execution of this Agreement or consummation of the
Transactions; (d) any fees or expenses payable to the Escrow Agent in connection
with the Transaction; and (e) the full amount of any fees and expenses of legal
counsel and accountants, financial advisors, investment bankers and brokers of
the Company and the Sellers in connection with this Agreement and the
Transactions, and any such fees and expenses incurred or otherwise payable by
the Company, the Sellers, or any manager, director, officer, employee, agent, or
Affiliate of the Company or any of the foregoing.

“Transfer Taxes” has the meaning set forth in Section 7.3(d).

“Unidentified Liabilities” means the amount, if any, by which, (a) Final
Transaction Expenses, plus Final Indebtedness, exceeds (b) Estimated Transaction
Expenses, plus Estimated Indebtedness.

“Virtual Data Room” has the meaning specified in Schedule A.

“Warranty” has the meaning set forth in Section 4.20(a).

1.2.Interpretation.  When a reference is made in this Agreement to Articles,
Sections, Exhibits or Schedules, unless otherwise indicated, such reference
shall be to an Article or Section of, or an Exhibit or Schedule to, this
Agreement.  The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  The words “include,” “includes” and “including” when used herein
shall be deemed in each case to be followed by the words “without
limitation.”  Unless the context of this Agreement otherwise requires: (a) words
of any gender include the other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms
“hereof,” “herein,” “hereunder” and derivative or similar words refer to this
entire Agreement; and (d) the phrases “made available,” “provided to,”
“furnished to,” and phrases of similar import when used herein, unless the
context otherwise requires, shall mean that a true, correct and complete copy of
such document or information was posted by the Company to the Virtual Data Room
not less than 72 hours prior to 12:01 a.m. Eastern time on the date of this
Agreement and remained continuously viewable by Buyer and its representatives
from the time such document or information was posted through the Closing.  Any
references in this Agreement to “dollars” or “$” shall be to U.S. dollars.

1.3.Rules of Construction.  The Parties have been represented by counsel during
the negotiation, preparation and execution of this Agreement and, therefore,
hereby waive, with respect to this Agreement, each Schedule and each Exhibit
attached hereto, the application of any Law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document shall
be construed against any one or more parties drafting such agreement or
document.

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ARTICLE II
Share purchase

2.1.Share Purchase; Closing Consideration.  

(a)Share Purchase.  Subject to the terms and conditions of this Agreement, at
the Closing, each Seller will sell, transfer and assign to Buyer, and Buyer will
purchase from such Seller, free and clear of any and all Liens, 100% of the
Shares held by such Seller immediately prior to the Closing (collectively, the
“Purchased Shares”).  The Purchased Shares constitute, in the aggregate, 100% of
the equity interests of the Company issued and outstanding immediately prior to
the consummation of the Transaction.  Subject to adjustments pursuant to Section
2.3, the aggregate purchase price for the Purchased Shares is equal to the sum
of (i) the Final Net Purchase Price, plus (ii) the Earn-Out Consideration, if
and only if payable pursuant to the terms and conditions of Section 2.4.

(b)Closing Consideration.  Subject to delivery of all of the items set forth in
Section 3.2, at the Closing, Buyer shall deliver to each Seller, as
consideration for the Purchased Shares, by wire transfer to one or more accounts
designated by such Seller in the Funds Flow Memo (the “Closing Payment”), cash
in an amount equal to the (i) the Estimated Net Purchase Price, multiplied by
(ii) such Seller’s Pre-Closing Ownership Percentage.

2.2.Tax Matters.

(a)Withholding Rights.  Buyer shall be entitled to deduct and withhold from the
amount payable under this Agreement and from any other payments otherwise
required pursuant to this Agreement, such amounts as Buyer, as applicable, is
required to deduct and withhold with respect to any such payments under the Code
or any provision of state, local or foreign Tax Law.  To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been delivered and paid to the applicable Person in respect
of which such deduction and withholding was made.

(b)Tax Treatment.  The Parties agree to treat any payments made pursuant to
Section 2.3 or Section 2.4 as an adjustment to the Final Net Purchase Price for
federal, state, local and foreign income Tax purposes, unless otherwise required
by Law.

2.3.Purchase Price Adjustment.

(a)Dispute Resolution.  No later than 90 days following the Closing Date, Buyer
shall deliver the Final Balance Sheet Certificate to Sellers’
Representative.  Within 30 days following receipt by Sellers’ Representative of
the Final Balance Sheet Certificate, Sellers’ Representative shall deliver
written notice to Buyer of any dispute it has with respect to the preparation or
content of the Final Balance Sheet Certificate (a “Dispute Notice”).  Any
Dispute Notice shall specify: (i) in reasonable detail the basis upon which the
Sellers dispute in good faith the preparation or content of the Final Balance
Sheet Certificate; and (ii) the proposed dollar amount for each disputed item on
the Final Balance Sheet Certificate.  Any item set forth in the Final Balance
Sheet Certificate that the Sellers do not dispute in a Dispute Notice delivered
within such 30-day period will be final, conclusive and binding on the Parties,
and if Sellers’ Representative does not deliver a Dispute Notice within such
30-day period, such Final Balance Sheet Certificate will be final, conclusive
and binding on the Parties.  If Sellers’ Representative does deliver a Dispute
Notice within such 30-day period, Buyer and Sellers’ Representative shall
negotiate in good faith to resolve each disputed item raised therein (each a
“Disputed Item” and collectively, the “Disputed Items”).  To the extent the
Buyer and Sellers’ Representative agree in writing to resolve their differences,
the Final Balance Sheet Certificate will be adjusted to reflect the final
written agreement of Buyer and Sellers’ Representative with respect to

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the Disputed Items.  If Buyer and Sellers’ Representative, notwithstanding such
good faith negotiation, fail to resolve each Disputed Item within 30 days after
Buyer’s receipt of the Dispute Notice, Buyer and the Sellers’ Representative
jointly shall engage the Neutral Accountant to resolve each unresolved Disputed
Item.  The scope of disputes to be resolved by the Neutral Accountant shall be
limited to each Disputed Item, and Buyer and Sellers’ Representative shall
jointly instruct the Neutral Accountant to determine, on such basis, the extent,
if any, to which the Final Net Working Capital Adjustment Amount set forth in
the Final Balance Sheet Certificate requires adjustment.  The Neutral
Accountant’s decisions shall be based solely on written presentations by Buyer
and Sellers’ Representative and their respective representatives, and not by
independent review, and the Neutral Accountant shall address only the Disputed
Items.  In resolving any Disputed Item, in no event shall the Neutral
Accountant’s determination be higher or lower than the respective amounts
therefor proposed by Buyer and Sellers’ Representative.  Buyer and Sellers’
Representative shall jointly instruct the Neutral Accountant to deliver, in
connection with its determination, a certificate of the Neutral Accountant that
its determination was prepared in accordance with this Agreement.  Buyer and
Sellers’ Representative shall jointly instruct the Neutral Accountant to report
its conclusions as to such Disputed Items and its determination of the Final Net
Working Capital Adjustment Amount, based thereon made in accordance with this
Section 2.3(a), no later than 30 days after it is engaged, which determination,
absent manifest error, shall be final, conclusive and binding on all Parties and
not subject to further dispute or judicial review.  The fees, costs and expenses
of the Neutral Accountant shall be allocated to and borne by Buyer, on the one
hand, and the Sellers, on the other hand, based on the inverse of the percentage
that the Neutral Accountant’s determination (before such allocation) bears to
the total amount of the total items in dispute as originally submitted to the
Neutral Accountant.  For example, should the items in dispute total in amount to
$1,000 and the Neutral Accountant awards $600 in favor of Sellers’ position, 60%
of the costs of its review would be borne by Buyer and 40% off the costs would
be borne by Seller.

(b)Cooperation.  For purposes of complying with the terms set forth in this
Section 2.3, each Party shall cooperate with and make available to the other
Party and its representatives all information, records, data and working papers
and shall permit access to its facilities and personnel, as reasonably required
in connection with the preparation and analysis of the Final Balance Sheet
Certificate and the resolution of any items included in a Dispute Notice
delivered by Sellers’ Representative within the 30-day period referenced in
Section 2.3(a).

(c)Purchase Price Adjustment Amount.  Once the Final Balance Sheet Certificate
is final, as determined in accordance with Section 2.3(a), the Estimated Net
Purchase Price shall be, as applicable: (i) increased by the amount, if any, by
which (A) the Final Net Working Capital Adjustment Amount set forth in the Final
Balance Sheet Certificate exceeds (B) the Estimated Net Working Capital
Adjustment Amount set forth in the Estimated Balance Sheet Certificate; (ii)
decreased by the amount, if any, by which (A) the Estimated Net Working Capital
Adjustment Amount set forth in the Estimated Balance Sheet Certificate exceeds
(B) the Final Net Working Capital Adjustment Amount set forth in the Final
Balance Sheet Certificate; and (iii) decreased by the Unidentified Liabilities,
if any. If the foregoing amounts sum to an upward adjustment to the Estimated
Net Purchase Price, such amount is referred to herein as the “Purchase Price
Deficiency”.  Alternatively, if the foregoing amounts sum to a downward
adjustment to the Estimated Net Purchase Price, such amount is referred to
herein as the “Purchase Price Excess”.

(d)Purchase Price Adjustment Payment.  Promptly, and in any event within five
Business Days following the final determination of the Final Balance Sheet
Certificate, as determined in accordance with Section 2.3(a), as applicable,
either: (i) if there is a Purchase Price Deficiency, Buyer shall deliver to
Seller by wire transfer to the account(s) designated by Seller in the Funds Flow
Memo, cash to each Seller Entity in an amount equal to such Seller’s Pre-Closing
Ownership Percentage of the Purchase Price Deficiency; or (ii) if there is a
Purchase Price Excess, Seller shall pay to Buyer, by wire transfer to

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the account(s) designated by Buyer in the Final Balance Sheet Certificate, cash
in an amount equal to the Purchase Price Excess.  Notwithstanding the foregoing,
Buyer may, in its sole discretion, claim any payment due to it by Seller under
this Section 2.3(d) from the Escrow Amount, in which case Buyer and Seller will
execute joint written instructions to be delivered to the Escrow Agent
instructing the Escrow Agent to disburse to Buyer an amount equal to the
Purchase Price Excess.

2.4.Earn-Out.

(a)Earn-Out Consideration.  If and only if the Adjusted EBITDA equals or exceeds
the Adjusted EBITDA Threshold, and, subject to the terms and conditions of this
Section 2.4, as additional consideration for the Purchased Shares, Buyer shall
pay to each Seller such Seller’s Pre-Closing Ownership Percentage of an
aggregate amount (the “Earn-Out Consideration”), equal to the sum of $0.50 for
each dollar of Adjusted EBITDA, plus one dollar for each dollar by which the
Adjusted EBITDA exceeds the Adjusted EBITDA Threshold; provided, however, that
if the Adjusted EBITDA is less than the Adjusted EBITDA Threshold, then the
Earn-Out Consideration shall be zero dollars.

(b)Determination of the Earn-Out Consideration.

(i)Not later than the Earn-Out Statement Delivery Deadline, Buyer shall prepare
and deliver to Sellers’ Representative a statement (the “Earn-Out Statement”)
setting forth Buyer’s calculation of the Adjusted EBITDA.  Unless Sellers’
Representative disputes in good faith Buyer’s calculation of the Adjusted EBITDA
in accordance with the provisions of Section 2.4(b)(ii), Buyer’s determination
thereof shall be conclusive and binding upon the Parties.  Buyer shall make
available to Sellers’ Representative all books and records maintained by Buyer
as Sellers’ Representative may reasonably require in order to review and confirm
Buyer’s calculation of the Adjusted EBITDA as set forth in the Earn-Out
Statement.

(ii)The Earn-Out Statement and Buyer’s calculation of the Adjusted EBITDA shall
become final and binding upon the Parties on the 30th day following receipt
thereof by Sellers’ Representative unless Sellers’ Representative gives written
notice of the Sellers’ good faith disagreement (a “Notice of Earn-Out
Disagreement”) to Buyer prior to such date.  Any Notice of Earn-Out Disagreement
shall specify in reasonable detail the basis upon which the Sellers dispute in
good faith Buyer’s calculation of the Adjusted EBITDA.

(iii)If a timely Notice of Earn-Out Disagreement is received by Buyer, then the
Earn-Out Statement shall become final and binding upon the parties on the
earlier of (A) the date Buyer and the Sellers resolve in writing any differences
they have with respect to the Earn-Out Statement; and (B) the date all remaining
applicable differences they have with respect to the applicable Earn-Out
Statement are finally resolved in writing by the Neutral Accountant pursuant to
Section 2.4(b)(iv).  During the 15 days immediately following the delivery of a
Notice of Earn-Out Disagreement, Buyer and Sellers’ Representative shall consult
in good faith to resolve in writing any differences they have with respect to
the Earn-Out Statement.  During such 15-day consultation period, Buyer shall
make available to Sellers’ Representative all books and records maintained by
Buyer as Sellers’ Representative may reasonably require in order for the Sellers
to review and confirm Buyer’s calculation of the Adjusted EBITDA as set forth in
the Earn-Out Statement.

(iv)At the end of such 15-day consultation period, if Buyer and Sellers’
Representative have not resolved all applicable differences they have with
respect to the Earn-Out Statement, Buyer and Sellers’ Representative shall
submit any and all differences they have with respect to the Earn-Out Statement
which remain unresolved to the Neutral Accountant.  Buyer and

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Sellers’ Representative shall direct the Neutral Accountant to work to resolve
such differences promptly and, in any event, within 30 days from the date the
dispute is submitted to the Neutral Accountant.  Any matter in the Earn-Out
Statement on which Buyer and Sellers’ Representative do not differ and which is
not specifically referred to the Neutral Accountant pursuant to this Section
2.4(b) shall be deemed final and binding on the Parties (as set forth in the
Earn-Out Statement or as otherwise agreed to in writing by Buyer and Sellers’
Representative).  The Neutral Accountant shall finalize the calculation of the
Adjusted EBITDA by selecting an amount equal to Buyer’s position as set forth in
the Earn-Out Statement or Sellers’ Representative’s position as set forth in the
Notice of Earn-Out Disagreement.  The Neutral Accountant shall act as an
arbitrator to determine only the Adjusted EBITDA, and shall make such
determination based solely on presentations by Buyer and Sellers’ Representative
(and not by independent review).  The determination of the Adjusted EBITDA by
the Neutral Accountant shall be binding on the Parties and shall be
non-appealable.

(v)All fees and expenses of the Neutral Accountant in connection with this
Section 2.4(b) shall be borne, as applicable: (A) by the Sellers, if the Neutral
Accountant selects Buyer’s calculation of the Adjusted EBITDA as set forth in
the Earn-Out Statement; or (B) if Section 2.4(b)(v)(A) is not applicable, by
Buyer.

(c)Additional Agreements.  The Sellers agree and acknowledges that: (i) Buyer
may make, or cause the Company to make, from time to time such business
decisions as it deems appropriate in its sole discretion in the conduct of the
business of Buyer and the Company, including actions with respect to the
ownership and operation of the Company and the Business, in each case that will
or may have an impact on the Adjusted EBITDA and/or the achievement of all or
any portion of Earn-Out Consideration; and (ii) the Sellers or any Affiliate
thereof shall not have any right to claim any lost Earn-Out Consideration or
other damages as a result of such decisions; provided, however, Buyer may not
take any action the intent and effect of which is to decrease in any material
respect either: (A) the likelihood the full Earn-Out Consideration is achieved;
or (B) the portion of the Earn-Out Consideration actually earned and payable to
the Sellers.  The Parties understand and acknowledge that Buyer is interested in
developing new facilities in Richmond, Virginia (and possibly other locations
within the Commonwealth of Virginia) within one year following Closing, and to
the extent there is a reasonably quantifiable impact on the Adjusted EBITDA
based on such expansion efforts that is not de minimis, up or down, as
applicable, Buyer and Sellers’ Representative shall negotiate in good faith to
make commercially reasonable adjustments to the Adjusted EBITDA as may be
required to normalize such figures.  Any dispute related to the amount of such
additional adjustments shall be resolved with the Neutral Accountant in
accordance with the procedures set forth in 2.4(b), mutatis mutandis.

(d)Payment of Earn-Out Consideration.  If the Earn-Out Consideration is payable
pursuant to this Section 2.4, then Buyer shall pay the Earn-Out Consideration to
the Sellers, without interest, no later than five Business Days following the
final determination of the Earn-Out Consideration pursuant to this Section 2.4,
by wire transfer of immediately available funds to the account or accounts
designated in the Funds Flow Memo.

(e)No Transfer. Each Seller agrees that it shall not transfer, convey, assign or
deliver any right to any portion of the Earn-Out Consideration that may be due
and payable from time to time under this Section 2.4 to any third party.  The
Parties acknowledge and agree that nothing in this Section 2.4 creates a
security that would require registration under the Securities Act or an
exemption therefrom.

(f)Right of Set-off. Buyer shall have the right to withhold and set off against
any Earn-out Consideration payable pursuant to this Section 2.4 the amount of
(i) any Purchase Price Excess

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owed to it pursuant to Section 2.3 and (ii) any Indemnifiable Damages to which
any Indemnified Person may be entitled under this Agreement or any ancillary
document hereto.

ARTICLE III
CLOSING

3.1.Closing.  The closing of the Transactions (the “Closing”) shall take place
simultaneously with the execution of this Agreement or such other date as may be
agreed in writing by Buyer and the Sellers via remote exchange of electronic
signature pages or scanned copies of original signature pages.  The consummation
of the Transactions shall be deemed to occur as of the Closing Effective Time.

3.2.Closing Deliverables.  

(a)Company Closing Deliverables.  At the Closing, Seller, the Sellers and/or the
other Person(s) specified below shall deliver to Buyer the following:

(i)the Restrictive Covenant Agreement, duly executed by the Restricted Party;

(ii)the Commercial Leases, duly executed by Callaway Development, LLC;

(iii)a certificate executed by the Secretary of the Company (or equivalent
officer), dated as of the Closing Date, as to: (A) the good standing of the
Company in its jurisdiction of organization and in each other jurisdiction where
it is qualified to do business; and (B) the effectiveness of the resolutions of
the board of directors (or similar governing authority) of the Company and the
Sellers authorizing the execution, delivery and performance of this Agreement
and the Transactions;

(iv)the Estimated Balance Sheet Certificate, duly executed and delivered by the
Company’s Chief Executive Officer (or equivalent officer), accompanied by such
supporting documentation, information and calculations as are reasonably
necessary for Buyer to verify and determine the Estimated Net Working Capital
Amount; provided, however, that such receipt shall not be deemed to be an
agreement by Buyer that the amounts set forth on the Estimated Balance Sheet
Certificate are accurate and shall not diminish Buyer’s remedies hereunder if
any of the foregoing documents is not accurate;

(v)an invoice or release agreement issued by each Person who advised the Company
or any Seller in connection with the Transactions, dated not earlier than three
Business Days prior to the anticipated Closing Date, which sets forth: (A) the
amounts required to pay in full all amounts owed to such Person by the Company
and all or any of the Sellers in connection with the Transactions; and (B) the
wire transfer instructions for the payment of such amounts to such persons;

(vi)with respect to any Transaction Expenses that remain, or that will remain,
unpaid immediately following the Closing, documentation reasonably satisfactory
to Buyer setting forth the amounts of all such unpaid Transaction Expenses
(including the identity of each recipient, dollar amounts, wire instructions and
any other information necessary for Buyer to effect the final payment in full
thereof) and indicating that upon receipt of such amounts that all such
Transaction Expenses shall have been paid in full;

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(vii)(A) payoff letters from each creditor under the Indebtedness identified in
Section 4.6(f) of the Disclosure Schedule, which payoff letters shall: (I) set
forth the amount required to pay off in full, on the Closing Date (and the daily
accrual thereafter), the Indebtedness (including the outstanding principal,
accrued and unpaid interest and prepayment and other penalties) owing to the
creditor and wire transfer information for such payment; (II) confirm that upon
receipt of the amount described in clause (I), the Contract evidencing such
Indebtedness and all related instruments will be terminated; and (III) contain
the commitment of such creditor to release any Liens that the creditor may hold
on any of the assets of the Company within a designated time period after
receipt of such amount; and (B) as to a creditor for which the Company is a
guarantor of Indebtedness, a letter which sets forth the amount required to be
wire transferred to such creditor along with wire transfer information for such
payment, and confirmation that upon receipt of such amount that the guarantee of
the Company shall be released and the commitment of such creditor to release any
Liens that the creditor may hold on any of the assets of the Company securing
such guarantee within a designated period of time after receipt of such amount;

(viii)a duly executed non-foreign affidavit, dated as of the Closing Date, from
each Seller, sworn under penalty of perjury and in form and substance required
under the Treasury Regulations issued pursuant to Section 1445 of the Code
stating that the Seller is not a “foreign person” within the meaning of Section
1445 of the Code;

(ix)written consents of or notices to, as applicable, the third parties to those
Contracts identified on Schedule 3.2(a)(ix) (or waivers with respect thereto),
in a form reasonably acceptable to Buyer;

(x)estoppel and consent certificates, in the form provided by Buyer and
reasonably acceptable to Seller, duly executed by the landlord of each parcel of
Leased Real Property;

(xi)the Escrow Agreement, duly executed by the Sellers’ Representative;

(xii)a retention agreement (the “Retention Agreement”) between the Company and
Tom Latkanich, duly executed by the Company and Tom Latkanich;

(xiii)evidence that each Company Plan intended to qualify as a qualified cash or
deferred arrangement under Section 401(k) of the Code has been terminated
pursuant to an action by the Company board of directors;

(xiv)written resignations of each officer and director of the Company, effective
as of the Closing, form and substance satisfactory to Buyer (it being understood
that such resignations shall not constitute a termination of employment by such
officer or director);

(xv)original share certificates representing all Purchased Shares (or
declarations and indemnities regarding missing stock certificates in form and
substance reasonably satisfactory to Buyer, as applicable), duly endorsed in
blank for transfer to, or accompanied by duly executed stock transfer powers
executed in favor of Buyer;

(xvi)the minute book and equity interest ledger (or similar) of the Company; and

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(xvii)all other documents required to be entered into by the Company and the
Sellers (or any one or more of them) pursuant to this Agreement or reasonably
requested by Buyer to consummate the Transactions.

(b)Buyer Closing Deliverables.  At the Closing, Buyer shall deliver the
following:

(i)to the Company, the Escrow Agreement, duly executed by Buyer;

(ii)to the Company, the Commercial Lease, duly executed by Buyer;

(iii)to the Company, the Side Letter Agreement, duly executed by Buyer and

(iv)to the applicable recipients, the payments contemplated by Section 3.3.

3.3.Closing Payments.  At the Closing, Buyer shall deliver:

(a)to the Escrow Agent, by wire transfer to the applicable account(s) designated
in the Funds Flow Memo, cash in an amount equal to the Escrow Amount;

(b)to each Seller and in proportion to its such Seller’s Pre-Closing Ownership
Percentage, by wire transfer to the applicable account(s) designated in the
Funds Flow Memo, cash in an amount equal to: (i) the Estimated Net Purchase
Price; minus (ii) the Escrow Amount; minus (iii) any Indebtedness that is unpaid
as of immediately prior to the Closing; minus (iv) any Transaction Expenses that
are unpaid as of immediately prior to the Closing;

(c)to each applicable Person, the aggregate amount of any Indebtedness that is
unpaid as of immediately prior to the Closing and owed to such Person, in each
case as set forth in the Funds Flow Memo; and

(d) to each applicable Person, the aggregate amount of any Transaction Expenses
that are unpaid as of immediately prior to the Closing and owed to such Person,
in each case as set forth in the Funds Flow Memo; and

(e)to the Company, an aggregate amount equal to the sum of the Change of Control
Bonus Payments, for further distribution, through the Company’s payroll provider
and net of applicable withholdings, to each applicable Bonus Recipient set forth
on Section 4.9(a)(2) of the Disclosure Schedules.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES With Respect to the company

For purposes of this ARTICLE IV, the term “Seller” shall be construed to mean
(x) each Seller, individually; and (y) all Sellers, collectively, unless context
otherwise clearly indicates.  As an inducement to Buyer to enter into this
Agreement, the Company and the Sellers hereby, jointly and severally, represent
and warrant to Buyer, as of the date of this Agreement and as of the Closing,
that:

4.1.Organization.  The Company is an entity, duly formed or incorporated (as
applicable), validly existing and in good standing under the Laws of the
jurisdiction of formation or incorporation set forth opposite its name on
Section 4.1(a) of the Disclosure Schedule.  The Company has the requisite power
and authority and all necessary governmental approvals to own, lease and operate
its assets and proprieties and to carry on its business as it is now being
conducted. The Company is duly qualified or licensed as a foreign entity to do
business, and is in good standing, in each jurisdiction where such qualification
or

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licensure is necessary or appropriate for the conduct of its business as
currently conducted.  Except as set forth on Section 4.1(b) of the Disclosure
Schedule, at no time has the Company had, and the Company does not currently
have, any Subsidiaries, and the Company does not own, nor has ever owned, any
equity interest or equity-linked interest in, or any interest convertible into
or exchangeable or exercisable for, directly or indirectly, any equity interest
or equity-linked interest in, any Person.  The Company made available a complete
and correct copy of the Company’s Organizational Documents.  The Company’s
Organizational Documents are in full force and effect and neither the Company
nor Seller are in violation of any of the provisions of any of the Company’s
Organizational Documents.

4.2.Authorization.  Except for proceedings completed prior to the date of this
Agreement, no proceedings on the part of the Company or any Seller are necessary
for the Company’s execution of this Agreement or consummation of the
Transactions.  To the Company’s knowledge, the Company has the legal capacity to
execute and deliver this Agreement and consummate the Transactions, and the
Company has all necessary power and authority to execute and deliver this
Agreement and consummate the Transactions.  This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Buyer and the Sellers, constitutes the
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, subject to the General Enforceability Exclusions.

4.3.Capitalization.  The Purchased Shares constitute all of the issued and
outstanding capital stock of the Company. Section 4.3 of the Disclosure Schedule
truly and accurately sets forth the capital structure of the Company by listing
thereon the number of shares of capital stock, other equity and equity-linked
interests of the Company which are authorized and which are issued and
outstanding and the record holders and the amounts held by such record holders
of such shares.  All of the outstanding capital stock of the Company is validly
issued, fully paid, non-assessable and not certificated.  There are no options,
warrants, profits interests, phantom units or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
equity or equity-linked interests of the Company or obligating the Company to
issue or sell any equity interests or equity-linked interests.  There are no
outstanding contractual obligations of the Company or any Seller to repurchase,
redeem or otherwise acquire any of the equity interests or equity-linked
interests of any Person, including the Company, or to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any Person, including the Company.  The capital stock and other equity and
equity-linked interests of the Company have been issued in compliance with all
applicable securities Laws and other applicable Laws and in accordance with the
Company’s Organizational Documents.  As of immediately prior to the Closing,
each Seller is the sole record and sole beneficial owner of the capital stock
and other equity and equity-linked interests of the Company and set forth
opposite its name on Section 4.3 of the Disclosure Schedule, free and clear of
any Liens, and upon consummation of the Transaction in accordance with the terms
and conditions of this Agreement, Buyer will acquire good and marketable title
to the Purchased Shares, free of any and all Liens.  

4.4.Non-Contravention.  

(a)The execution and delivery of this Agreement by the Company, the Sellers and
the Sellers’ Representative does not, and the performance of this Agreement by
such Parties will not: (i) conflict with or violate the Organizational
Documents; (ii) conflict with or violate in any material respect any Law
applicable to the Company, the Sellers or the Sellers’ Representative; or (iii)
result in any breach of or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien (except for Permitted Liens) on any properties or asset
of the Company or the Business pursuant to, any note, bond, mortgage, indenture,
Contract, agreement, lease, license, Permit, franchise or

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other instrument to which the Company is a party or by which any of the Company
is or its assets are bound, except with respect to those Contracts listed in
Section 4.4(a) of the Disclosure Schedule.  

(b)The execution and delivery of this Agreement by the Company, the Sellers and
the Sellers’ Representative does not, and the performance of this Agreement by
the Company, the Sellers and the Sellers’ Representative will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity or any other Person, except with respect to those
Contracts listed in Section 4.4(b)(1) of the Disclosure Schedule and those
Permits listed in Section 4.4(b)(2) of the Disclosure Schedule.

4.5.Permits; Compliance.  

(a)Section 4.5(a) of the Disclosure Schedule contains a complete and accurate
list of all material franchises, grants, authorizations, licenses,
registrations, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary for the
Company to own, lease and operate its properties or to carry on the Business as
it is now being conducted (the “Permits”).  The Company is in possession of all
necessary Permits and no suspension or cancellation of any of the Permits is
pending or, to Seller’s knowledge, threatened.  The Company or, to the Company’s
knowledge, any product that is or has been in the possession of the Company, is
not, in any material respect, in conflict with, or in default, breach or
violation of, any: (i) Law applicable to the Company; or (ii) note, bond,
mortgage, indenture, contract, agreement, lease, license, Permit, franchise or
other instrument or obligation to which the Company is a party or by which any
of the Company is or its assets are bound.  

(b)Except as set forth in Section 4.5(b) of the Disclosure Schedule: (i) since
its inception, neither the Company nor any Seller has received any formal notice
or other formal communication from any Governmental Entity or any other Person
regarding: (A) any actual, alleged, possible or potential violation of or
failure to comply with any term or requirement of any Permit; or (B) any actual,
proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any Permit; and (ii) all
applications required to have been filed for the renewal of any Permit have been
duly filed on a timely basis with the appropriate Governmental Entity, and all
other filings required to have been made with respect to any such Permit or with
respect to any distribution, dispensing, or other product-related activity have
been duly made on a timely basis with the appropriate Governmental Entity.

4.6.Financial Statements.  

(a)Section 4.6(a) of the Disclosure Schedule includes the Financial
Statements.  The Financial Statements: (i) are derived from and in accordance
with the books and records of the Company; (ii) are complete and correct in all
material respects; (iii) have been prepared in accordance with the Accounting
Principles; and (iv) present fairly, in all respects, the financial condition of
the Company at the respective dates therein indicated and the results of
operations and cash flows of the Company for the periods therein specified
(subject, in the case of unaudited interim period financial statements, to
normal recurring year-end audit adjustments, none of which individually or in
the aggregate will be material in amount).    

(b)The Company makes and keeps books, records and accounts which accurately and
fairly reflect the transactions and dispositions of its assets and all such
books, records and accounts made available are true, correct and complete in all
respects.  The Company maintains systems of internal accounting controls
sufficient to provide reasonable assurances that transactions are recorded as
necessary to present accurately and fairly in all respects the financial
condition of the Company.

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(c)The Company does not have any Liabilities, asserted or unasserted, known or
unknown, absolute or contingent, accrued or unaccrued, matured or unmatured,
other than: (i) Transaction Expenses; (ii) those Liabilities reflected on the
Estimated Balance Sheet Certificate; and (iii) those incurred since the Balance
Sheet Date in the ordinary course, consistent with past practice, in the conduct
of the Business, and which are of the type that ordinarily recur and which,
individually or in the aggregate, are not material in nature or amount and do
not result from any breach of Contract, tort or violation of Law.  The Company
does not have any off balance sheet Liability of any nature to, or any financial
interest in, any third party, the purpose or effect of which is to defer,
postpone, reduce or otherwise avoid or adjust the recording of debt expenses
incurred by the Company.  All reserves that are set forth in or reflected in the
Estimated Company Balance Sheet have been established in accordance with GAAP
and are adequate for the operation of the Business in the ordinary course of
business consistent with past practices.

(d)The Company has not, nor, to the Company’s knowledge, any independent
accountant of the Company, or any current or former employee, consultant,
director, officer or manager of the Company, identified or been made aware of
any fraud, whether or not material, that involves the management or other
current or former employees, consultants, directors, officers or managers of the
Company who have a role in the preparation of financial statements or the
internal accounting controls utilized by the Company, or any claim or allegation
regarding any of the foregoing.  The Company has not, nor, to the Company’s
knowledge, has any manager, director, officer, employee, auditor, accountant or
representative of the Company, received or otherwise had or obtained knowledge
of any complaint, allegation, assertion or claim, whether written or oral, in
each case, regarding deficient accounting or auditing practices, procedures,
methodologies or methods of the Company or its internal accounting controls or
any material inaccuracy in the Financial Statements.  Except as set forth on
Section 4.6(d) of the Disclosure Schedule, there has been no material change in
the accounting policies of the Company since its inception  

(e)The Estimated Company Balance Sheet sets forth the Company’s: (i) accounts
payable; (ii) compensation payable (including wages, salaries, bonuses or any
other remuneration payable to the Company’s managers, directors, officers,
employees, agents or consultants) and any related payroll Taxes; and (iii) state
income Taxes (collectively, the “Specified Liabilities”), in each case accrued
through the close of business on the last Business Day preceding the Closing
Date.  The Specified Liabilities arose from bona fide transactions in the
ordinary course of business of the Company consistent with past practice from
the Company’s inception through the date hereof.  Since its inception, the
Company: (A) has paid or discharged the Specified Liabilities when due; and (B)
has not engaged in any practice with the effect or intent of postponing to any
period following the Closing any payment by the Company that would otherwise
reasonably be expected (based on the Company’s past practice from its inception
through the date hereof) to be made prior to the Closing.  

(f)Section 4.6(f) of the Disclosure Schedule accurately lists all outstanding
Indebtedness of the Company, including, for each item of Indebtedness, the
agreement governing the Indebtedness and the interest rate, maturity date and
any assets or properties securing such Indebtedness.  All Indebtedness may be
prepaid at the Closing without penalty under the terms of the contracts
governing such Indebtedness.

(g)Section 4.6(g) of the Disclosure Schedule sets forth the names and locations
of all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains accounts of any nature and the names
of all persons authorized to draw thereon or make withdrawals therefrom.

4.7.Accounts Receivable.  All accounts receivable of the Company reflected (or
that should have been reflected) on the Estimated Company Balance Sheet arose
from bona fide transactions in the

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ordinary course of business consistent with past practices, are reflected in
accordance with GAAP, are not subject to valid defenses, setoffs or
counterclaims and have been collected or are collectible in the book amounts
thereof, less an amount not in excess of an appropriate allowance for doubtful
accounts and billing adjustments set forth on the Estimated Company Balance
Sheet, which such allowance is or will be sufficient to provide for any losses
that may be sustained on realization of the receivables.  No material amount of
accounts receivable is contingent upon the performance by the Company of any
obligation or Contract.  No Person has any Lien (except for Permitted Liens) on
any of such accounts receivable, and no agreement for deduction or discount has
been made with respect to any of such accounts receivable.

4.8.Inventories.  All inventories of the Company (collectively, “Inventory” or
“Inventories”) were produced or acquired by the Company in bona fide,
arms-length transactions entered into in the ordinary course of business. No
Inventory is held on consignment, or is otherwise subject to any ownership
interest of any third party. The Inventory reports previously provided to Buyer
were true, accurate and complete as of the respective dates indicated thereon.
No items of Inventory are held in quantities materially exceeding the amount of
such item sold or consumed, as applicable, in the Business during the 12
calendar months ended prior to the Closing Date. Except as set forth in Section
4.8 of the Disclosure Schedule, the Company does not depend on any single vendor
for any material portion of its Inventories, nor has the Company had difficulty
in obtaining Inventories. All finished goods Inventories are non-obsolete, are
of a quality and quantity which are merchantable and saleable as first quality
goods in the ordinary course of business without discount or allowance and all
Inventories of raw materials or work-in-process are of a quality fully usable in
the manufacture of first quality finished goods. The value of all items of
obsolete Inventory and of below standard quality has been written down to the
net realizable value or adequate reserves have been provided therefor in the
Financial Statements. All Inventories not written off have been priced at the
lower of cost or market on the first in, first out basis.

4.9.Absence of Changes.

(a)Since the first date of the current fiscal year, except as set forth in
Section 4.9(a)(1) of the Disclosure Schedule, or as expressly contemplated by
this Agreement, the Company has conducted the Business only in the ordinary
course consistent with past practice and: (i) the Company has not made or
entered into any Contract or letter of intent with respect to any acquisition,
sale or transfer of any asset or equity interest or equity-linked interest of
the Company; (ii) the Company has not entered into, amended or terminated any
Material Contract, and there has not occurred any default under any Material
Contract to which the Company is a party or by which it is, or any of its assets
and properties are, bound; (iii) there has not occurred any amendment or change
to the Organizational Documents; (iv) there has not occurred any increase in or
modification of the compensation or benefits payable (including wages, salaries,
bonuses, or any other remuneration or benefits) or to become payable by the
Company to any of its managers, directors, officers, employees, agents or
consultants, any material modification of any “nonqualified deferred
compensation plan” within the meaning of Section 409A of the Code and IRS Notice
2005-1, or any new loans or extension of existing loans to the Company’s
managers, directors, officers, employees, agents or consultants (other than
routine expense advances to employees of the Company consistent with past
practice), nor has the Company entered into any Contract to grant or provide
(nor has granted any) severance, acceleration of vesting or other similar
benefits to any such persons; (v) there has not occurred the execution of any
employment agreements or service Contracts or the extension of the term of any
existing employment agreement or service Contract with any Person in the employ
or service of the Company; (vi) there has not occurred: (A) any change in title,
office or position, or change in the responsibilities of, or change in identity
with respect to the management, supervisory or other key personnel of the
Company; (B) any termination of employment of any such employees; or (C) any
labor dispute or claim of unfair labor practices involving the Company; (vii)
the Company has not incurred any Liability to its managers, directors, officers,
employees, agents or consultants or any Seller (other than Liabilities to pay
compensation or benefits in connection with services rendered in the ordinary
course of business

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consistent with past practice); (viii) the Company has not established, adopted,
amended, modified or terminated any Company Plan or any collective bargaining,
thrift, compensation or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any of its managers, directors, officers,
employees, agents, contractors or consultants; (ix) there has been no material
damage, destruction or loss, whether or not covered by insurance, affecting the
assets or properties of the Company; (x) the Company has not acquired, sold,
leased, licensed or disposed of any material assets or property, other than
purchases and sales of assets and leases entered into in the ordinary course of
business, or merged or consolidated with any entity; and (xi) there has not
occurred any announcement of, any negotiation by or any entry into any Contract
by or commitment of the Company to do any of the things described in this
Section 4.9(a)(i)-(x). Notwithstanding the foregoing, in connection with the
Closing and no later than December 31, 2018, the Company is paying to the
respective Persons listed on Section 4.9(a)(2) of the Disclosure Schedule
(collectively, the “Bonus Recipients”) the change of control bonus payments
listed there (collectively, the “Change of Control Bonus Payments”), in each
case (A) through the Company’s payroll provider, (B) net of applicable
withholdings and (C) net of any Affiliate Loans owed to the Company by such
Bonus Recipient.

(b)Since the first day of the current fiscal year, except as set forth in
Section 4.9(a) of the Disclosure Schedule, or as expressly contemplated by this
Agreement, the Company has conducted the Business only in the ordinary course
consistent with past practice and: (i) there has not occurred a Material Adverse
Effect; (ii) there has not occurred any change in the accounting methods or
practices (including any change in depreciation or amortization policies or
rates or revenue recognition policies) by the Company or any revaluation by the
Company of any of its assets; (iii) the Company has not materially changed its
accounting or Tax policies, practices or methods, or made or revoked any Tax
election (including any entity classification election on IRS Form 8832);
(iv) the Company has not incurred, created or assumed any Lien (other than a
Permitted Lien) on any of its assets, any Liability for borrowed money or any
Liability as guaranty or surety with respect to the obligations of any other
Person, in each case other than in the ordinary course of business consistent
with past practice; (v) the Company has not made any deferral of the payment of
any accounts payable, or given any discount, accommodation or other concession
other than in the ordinary course of business, consistent with past practice, in
order to accelerate or induce the collection of any receivable; (vi) the Company
has not made any material change in the manner in which it extends discounts,
credits or warranties to customers or otherwise deals with such persons;
(vii) the Company has not made any material change in the manner it undertakes,
manages or funds capital improvement projects; and (viii) there has not occurred
any announcement of, any negotiation by or any entry into any Contract by the
Company to do any of the things described in this Section 4.9(a)(i)-(vii).

4.10.Litigation.  Except as set forth in Section 4.10 of the Disclosure
Schedule, there is no Action pending, or, to the Company’s knowledge, threatened
against the Company or any of its assets or any of its managers, directors,
officers, employees, agents or representatives (in their capacities as such or
relating to their employment, services or relationship with the Company), nor,
to the Company’s knowledge, is there any reasonable basis for any such
Action.  There is no judgment, decree, injunction or order against the Company
or any of its assets, or, to the Company’s knowledge, any of its managers,
directors, officers, employees, agents or representatives (in their capacities
as such or relating to their employment, services or relationship with the
Company).  To the Company’s knowledge, there is no reasonable basis for any
Person to assert a claim against the Company based upon the Company entering
into this Agreement or the Transactions.  To the Company’s knowledge, there is
no pending or active investigation related to the Company currently being
conducted by a Governmental Entity.  Except as set forth in Section 4.10 of the
Disclosure Schedule, the Company has no Action pending or contemplated against
any other Person.   

4.11.Employee Matters.  

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(a)Except as set forth on Section 4.11(a) of the Disclosure Schedule, the
Company is not a party to, has no obligation under, and does not maintain,
contribute to or sponsor any Company Plans.  With respect to each Company Plan,
the Company has made available to Buyer true and complete copies of all written
documents comprising such Company Plan (including amendments and individual
agreements relating thereto) or, if there is no such written document, an
accurate and complete description of such Company Plan.

(b)Except as set forth on Section 4.11(b) of the Disclosure Schedule, (i) each
Company Plan is and has at all times been in compliance in all material respects
with all applicable Laws and has been administered and operated in all respects
in accordance with its terms, (ii) each Company Plan which is intended to be
“qualified” within the meaning of Section 401(a) of the Code has received a
favorable determination letter or opinion letter from the IRS or is comprised of
a master or prototype plan that has received a favorable opinion letter from the
IRS, and no event has occurred and no condition exists which could reasonably be
expected to result in the revocation of any such determination letter or opinion
letter, and (iii) no Action has been made, commenced or, to the Company’s
knowledge, threatened with respect to any Company Plan (other than routine
claims for benefits payable in the ordinary course, and appeals of such
claims).  The Company has made available to Buyer a complete and correct copy of
each of the following, as applicable: (A) a copy of each trust or other funding
arrangement; (B) the current summary plan description and all summary of
material modifications thereto; (C) the three most recently filed IRS Form 5500;
(D) the most recently received IRS determination, advisory and/or opinion
letter; (E) the most recently prepared actuarial report and financial statement;
and (F) copies of all material filings and material written correspondence with
a Governmental Entity.

(c)Each Company Plan can be amended, terminated or otherwise discontinued at the
Closing in accordance with its terms, without material liabilities to Buyer, the
Company or any of their respective Affiliates other than ordinary administrative
expenses typically incurred in a termination event.  The Company has no
obligation to: (i) create, incur Liability with respect to or cause to exist any
new employee benefit plan, program or arrangement; (ii) adopt or establish an
new Company Plan or enter into any new Contract to provide compensation or
benefits to any individual; or (iii) modify, change or terminate any Company
Plan, in each case, other than as required by applicable Law or as expressly
contemplated by this Agreement.

(d)Neither the Company nor any of its current or former ERISA Affiliates have
ever maintained, established, participated in or contributed to, or had any
obligation to maintain, contribute to or otherwise participate in any of the
following: (i) a multiemployer plan within the meaning of Section 3(37) or
4001(a)(3) of ERISA (a “Multiemployer Plan”); (ii) a single employer pension
plan within the meaning of Section 4001(a)(15) of ERISA for which the Company
could incur Liability under Section 4063 or 4064 of ERISA (a “Multiple Employer
Plan”); (iii) a plan that is subject to Title IV of ERISA, Section 302 of ERISA
or Section 412 of the Code; (iv) a “funded welfare plan” within the meaning of
Section 419 of the Code or a registered pension plan; (v) a plan, policy or
other arrangement providing for or promises post-employment or retiree welfare
benefits (including, retiree medical, disability or life insurance benefits to
any current or former service provider of the Company or any of their respective
dependents or beneficiaries, except as required by Section 4980B of the Code,
Part 6 of Title I of ERISA, similar applicable state Law or applicable Law; (vi)
a “multiple employer welfare arrangement” (within the meaning of Section 3(40)
of ERISA); or (vii) a plan, policy or other arrangement providing benefits to
any employee who resides or performs services principally outside the U.S.

(e)Except as set forth on Section 4.11(e) of the Disclosure Schedule, (i) the
execution of this Agreement and the consummation of the Transaction, including
the execution and consummation of the Retention Agreement, do not constitute a
triggering event under any Company Plan or Contract, whether or not legally
enforceable, which (either alone or upon the occurrence of any additional or
subsequent event)

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will or may result in any payment of retention, bonus, retirement or
similar-type benefit, benefits payable, increase any benefits or accelerate the
payment or vesting of any benefits to any current or former employee, officer,
manager, director or consultant of the Company, (ii) no Company Plan or Contract
provides for a promise of job security or service arrangement with the Company
or any of its Affiliates, and (iii) no Company Plan provides for the payment of
severance, termination, change in control or similar-type payments or benefits.

(f)All compensation plans, programs, policies, contracts and arrangements are
either exempt from or in compliance with the requirements of Section 409A of the
Code, in both documentation and operation.  Neither the execution and delivery
of this Agreement nor the consummation of the Transactions shall, either alone
or in connection with any other event(s) (i) give rise to any “excess parachute
payment” as defined in Section 280G(b) of the Code, (ii) result in any excise
tax owing under Section 4999 of the Code, or (iii) result in any payment of
compensation by the Buyer or any of its Affiliates to a Transferred Employee
being non-deductible under Section 280G of the Code.  Neither the Company, nor
any of its Affiliates, has an obligation to pay to any Person a Tax gross-up
amount for any excise taxes or penalties accrued or payable under Section 4999
or 409A of the Code.

(g)Section 4.11(g)(i) of the Disclosure Schedule describes any Contracts
(including loan agreements), arrangements or understandings between the Company
and any current employee, officer, manager, director or consultant of the
Company, including any Contracts relating in any way to a sale of the Company or
the Transaction, other than (i) standard employee proprietary information and
inventions agreements and (ii) standard employee at-will offer letters
(collectively, the “Standard Company Agreements”).  The Company has made
available to Buyer the current form of each Standard Company Agreement, and
Section 4.11(g)(ii) of the Disclosure Schedule lists each current employee,
officer, manager, director or consultant of the Company, whether or not a party
to a Standard Company Agreement.

(h)The Company has made available a true, correct and complete list as of the
date hereof of all persons who are employees or independent contractors of the
Company, including any person who is on a leave of absence of any nature, and
sets forth for each such person the following: (i) name; (ii) title or position
(including whether full or part time); (iii) location; (iv) hire date; (v)
classification as exempt or non-exempt under applicable Laws; (vi) whether on
leave, (vii) whether providing services on a visa, (viii) current annual base
compensation rate or hourly rate of pay, as applicable; and (ix) target
commission or bonus, as applicable.  Except as set forth in Section 4.11(h) of
the Disclosure Schedule, (A) all employees of the Company are employed on an
at-will basis and their employment can be terminated at any time for any lawful
reason without any amounts being owed to such person, except for amounts
required to be paid by applicable Law or under an agreement identified on
Section 4.11(g)(i) of the Disclosure Schedule, (B) the Company does not have any
employees who hold U.S. temporary (non-immigrant) visas, and (C) the Company has
not entered into any contractual obligations with any employee or prospective
employee to assist in obtaining permanent residence on behalf of such
person.    

(i)Except as set forth in Section 4.11(i) of the Disclosure Schedule, there are
no claims pending as to violation of any Law or, to the Company’s knowledge,
threatened between the Company and any of its employees, managers, directors,
officers, consultants, agents or representatives.  The Company is in compliance
in all material respects with all applicable employment Laws, including the
payment and withholding of Taxes and other sums as required by the appropriate
Governmental Entity.  The Company has withheld and paid to the appropriate
Governmental Entity or is holding for payment not yet due to such Governmental
Entity all amounts required to be withheld from employees of the Company and is
not liable for any material arrears of wages, taxes, penalties or other sums for
failure to comply with any of the foregoing.  The Company has paid in full to
all employees, managers, directors, officers, consultants, agents or
representatives or adequately accrued for in accordance with GAAP all wages,
salaries, commissions, bonuses, benefits and other compensation due to or on
behalf of such employees and

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there is no claim with respect to payment of wages, salary or overtime pay that
has been asserted or is now pending or, to the Company’s knowledge, threatened
before any Governmental Entity with respect to any persons currently or formerly
employed or retained by the Company.  There is no charge of discrimination in
employment or employment practices, for any reason, including age, gender, race,
religion or other legally protected category, which has been asserted or is now
pending or, to the Company’s knowledge, threatened against the Company before
the U.S. Equal Employment Opportunity Commission or any other Governmental
Entity in any jurisdiction in which the Company has employed, employs or has
been alleged to employ any person.  To the Company’s knowledge, no employee or
independent contractor of the Company is in violation, in any material respect,
of (i) any Contract or (ii) any restrictive covenant, in each case relating to
the right of any such employee or independent contractor to be employed or
retained by the Company, or otherwise restricting the activities engaged in by
such employee or independent contractor on behalf of the Company, or to use
trade secrets or proprietary information of others.  The Company has classified
and compensated all individuals who perform services for the Company correctly
under each Company Plan, ERISA, the Code and other applicable Law as common law
employees, independent contractors or leased employees, and all employees of the
Company classified as exempt under the Fair Labor Standards Act and state and
local wage and hour Laws are properly classified. The Company has not entered
into a settlement agreement or similar agreement with a current or former
service provider, which payment would not be tax deductible as a business
expense.

(j)No employee of the Company is represented by a labor union, organization or
group that was either voluntarily recognized or certified by any labor relations
board (including the United States National Labor Relations Board) or by any
other Governmental Entity and, to the Company’s knowledge, no such labor union,
organization or group is seeking to represent any employees of the Company.  The
Company is not a signatory to any collective bargaining agreement with any labor
union, organization or group, nor is any such collective bargaining agreement
presently being negotiated, nor is there any duty on the part of the Company to
bargain with any such labor union, organization or group.  No labor dispute,
walk out, strike, work stoppage, picketing or, to the Company’s knowledge, hand
billing, or union organizational effort involving the employees of the Company
has occurred, is in progress or, to the Company’s knowledge, has been threatened
since the Company’s inception.  No event has occurred, and no condition or
circumstance exists, that the Company reasonably expects to directly or
indirectly give rise to or provide a basis for the commencement of any such
labor dispute, walk out, strike, hand billing, picketing, union organizational
effort or work stoppage.

(k)Except as described in Section 4.11(k) of the Disclosure Schedule, to the
Company’s knowledge, none of employees, managers or officers of the Company is
actively planning to resign or otherwise terminate their employment with the
Company prior to, on or after the Closing Date.

4.12.Real Property; Title to Assets.  

(a)Except as set forth on Section 4.12(a)(1) of the Disclosure Schedule, the
Company does not currently own, nor has the Company ever owned, any parcel of
real property.  Section 4.12(a)(2) of the Disclosure Schedule sets forth a true,
correct and complete legal description of each parcel of real property currently
leased by the Company (the “Leased Real Property”) or previously leased by the
Company.  True, correct and complete copies of all leases entered into by the
Company with respect to the Leased Real Property have been made available, and
all such leases are listed on Section 4.12(a)(3) of the Disclosure
Schedule.  All leases and subleases listed on Section 4.12(a)(3) of the
Disclosure Schedule are in full force and effect, are on commercially reasonable
terms, and are valid and effective in accordance with their respective terms,
and there is not, under any of such leases or subleases, any existing material
default or event of default (or event which, with notice or lapse of time, or
both, would constitute a default) by the Company or, to the Company’s knowledge,
by any other party to such lease or sublease, or any Person in the chain of
title to such leased or subleased premises.

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(b)There are no contractual or legal restrictions that preclude or restrict the
ability to use any Leased Real Property for the purposes for which it is
currently being used.  To the Company’s knowledge, there are no material latent
defects or material adverse physical conditions affecting the Leased Real
Property (and improvements thereon) that preclude or restrict the ability to use
the Leased Real Property by the Company for the purposes for which it is
currently being used.

(c)The Company has, and will convey, good and valid title to, or, in the case of
leased properties and assets, valid leasehold or sub-leasehold interests in, all
of its properties and assets, tangible, real, personal and mixed, free and clear
of any Liens (other than Permitted Liens).  All such leased properties and
assets are all of the properties and assets used or held for use in the Business
and constitute all of the assets appropriate, necessary and sufficient to
conduct the operations of the Business as currently conducted or as currently
contemplated to be conducted.  All equipment and other items of tangible
personal property and assets owned, used or held for use by the Company: (i) are
in good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted; (ii) were acquired and are usable in the
ordinary course of business; and (iii) conform to all applicable Laws applicable
thereto.  To the Company’s knowledge, there is no defect or material problem
with any of the Company’s assets.

4.13.Intellectual Property.  

(a)The Company has full title and ownership of, or is duly licensed under or
otherwise authorized to use, all Intellectual Property Rights necessary to
enable it to carry on its business, free and clear of any Liens (except for
Permitted Liens), and without any conflict with or infringement upon the rights
of others.  The Company Intellectual Property is sufficient for the conduct of
the business of the Company.  The Company has not transferred ownership of, or
agreed to transfer ownership of, any Intellectual Property Rights to any third
party.  No third party has any ownership right, title, interest, claim in or
Lien on any of the Company Owned Intellectual Property, and to the Company’s
knowledge, there is no unauthorized use, unauthorized disclosure, infringement
or misappropriation of any Company Owned Intellectual Property by any third
party.  The Company has taken all necessary steps to prosecute, maintain and
preserve its legal rights and ownership interests in all of its Company Owned
Intellectual Property.  The consummation of the Transactions will not result in
the loss or impairment of or payment of any additional amounts with respect to,
nor require the consent of any other Person in respect of, Buyer's right to own,
use or hold for use any Company Intellectual Property as owned, used or held for
use in the conduct of the Business as currently conducted.

(b)Section 4.13(b) of the Disclosure Schedule lists: (i) all Company Owned
Intellectual Property, including all patents and patent applications, and
registrations and applications for trademarks, copyrights, and domain names and
the jurisdictions in which it has been issued or registered or in which any
application for such issuance and registration has been filed, or in which any
other filing or recordation has been made; and (ii) all actions that are
required to be taken by the Company within 120 days after the Closing Date with
respect to such Intellectual Property Rights in order to avoid prejudice to,
impairment or abandonment of such Intellectual Property Rights.

(c)The Company has secured from all consultants, advisors, employees,
independent contractors and other persons who independently or jointly
contributed to or participated in the conception, reduction to practice,
customization, creation or development of any Company Owned Intellectual
Property for or on behalf of the Company (each an “Author”), unencumbered and
unrestricted exclusive ownership of, all of the Authors’ Intellectual Property
Rights in such contribution that the Company did not already own by operation of
Law, and has obtained the waiver of all non-assignable rights.

(d)To the Company’s knowledge, there is no unauthorized use, unauthorized
disclosure, infringement or misappropriation of any Company Owned Intellectual
Property by any third

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party.  The Company has not brought any Action for infringement or
misappropriation of any Intellectual Property Right.  The Company is not
infringing, misappropriating or violating, or has never infringed,
misappropriated or violated, the Intellectual Property Rights of any third
party.  The Company has not been implicated in any Action or received any formal
communication alleging that the Company has violated or, by conducting its
business as currently conducted or as proposed to be conducted, would violate
any of the patents, trademarks, service marks, trade names, copyrights, trade
secrets or other proprietary rights or processes of any other Person or entity.

4.14.Environmental Matters.  The Company holds, and is in compliance in all
material respects with, all Environmental Permits that are material to the
conduct of the Business.  The Company is, and has been since its formation,
otherwise in compliance in all material respects with applicable Environmental
Laws.  The Company has never received any formal communication from any
Governmental Entity or any other Person that the Company is subject to any
pending or threatened Action (a) based upon any provision of any Environmental
Law and arising out of any act or omission of the Company or any of its
employees, agents or representatives or (b) arising out of the ownership, use,
possession, control or operation by the Company of any facility, site, area or
property from which there was an Environmental Release of any Hazardous
Substance.  The Company does not currently, and has not since its formation,
generated any Hazardous Substance.

4.15.Taxes.  

(a)The Company: (i) has timely filed all Tax Returns required to be filed by it;
(ii) has timely paid and discharged all Taxes required to be paid or discharged
by it (whether or not shown as due on any Tax Return); (iii) has established
accruals and reserves for Taxes reflected in the Financial Statements that are
adequate to cover all Taxes accruable through the Closing Date (including
interest and penalties, if any, thereon) in accordance with GAAP; (iv) has made
all estimated Tax payments required to be made by it; and (v) has no Liability
for Taxes in excess of the amount so paid or accruals or reserves so
established.  All such Tax Returns are true, accurate and complete in all
material respects and were prepared in compliance with applicable Law.  The
Company is not delinquent in the payment of any Tax or in the filing of any Tax
Return, nor is it the beneficiary of any extension of time within which to file
any Tax Return, and no deficiencies for any Tax have been threatened, claimed,
proposed or assessed against the Company.  The Company has never received any
written communication from the IRS or any other Tax Authority regarding any
issues that (A) are currently pending before the IRS or any other Tax Authority
(including any sales or use Tax Authority) regarding the Company, or (B) have
been raised by the IRS or other Tax Authority and not yet finally resolved.  No
Tax Return of the Company is under audit by the IRS or any other Tax Authority
and any such past audits (if any) have been completed and fully resolved and all
Taxes determined by such audit to be due from the Company have been paid in full
to the applicable Tax Authorities.  The Company has not granted any waiver of
any statute of limitations with respect to, or any extension of a period for the
assessment of, any Tax.  There are no Tax Liens upon any property or assets of
the Company, except liens for current Taxes not yet due.  The Company has made
available true, correct and complete copies of all federal, state and foreign
income Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by the Company filed or received since its inception.

(b)The Company has withheld and paid all Taxes required to have been withheld
and paid in connection with any amounts owing to any employee, independent
contractor, creditor, member, stockholder or other third party, and has timely
filed all withholding Tax Returns.  The Company: (i) is not and never has been a
party to or bound by any Tax sharing, tax indemnity, or Tax allocation
agreement; (ii) has never filed any disclosures under Section 6662 of the Code
or comparable provisions of state, local or foreign Law; (iii) has never
consummated or participated in any transaction which was or is a “reportable
transaction” within the meaning of Section 1.6011-4(b)(2) of the Treasury
Regulations; (iv) has never been a member of a consolidated, combined, unitary
or aggregate group; (v) has not been a “distributing

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corporation” or a “controlled corporation” in a distribution intended to qualify
under Section 355 of the Code within the past five years; (vi) has never been at
any time a member of any partnership or joint venture or the holder of a
beneficial interest in any trust for any period for which the statute of
limitations for any Tax has not expired; (vii) has never made any entity
classification election on IRS Form 8832; and (viii) has never made any election
Section 965(h) of the Code.  No claim has ever been made by any Governmental
Entity in a jurisdiction where the Company does not file Tax Returns that the
Company is or may be subject to taxation by that jurisdiction.  The Company has
no Liability for the Taxes of any other person under Section 1.1502-6 of the
Treasury Regulations (or any similar provision of state, local or foreign Law),
as a transferee or successor, by Contract or otherwise and (viii) has never made
any election Section 965(h) of the Code.

(c)The Company will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i) change in method
of accounting for a taxable period ending on or prior to the Closing Date, (ii)
“closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax Law)
executed on or prior to the Closing, (iii) installment sale or open transaction
disposition made on or prior to the Closing Date, (iv) prepaid amount received
or deferred revenue accrued on or prior to the Closing, or (v) election pursuant
to Section 108(i) of the Code made effective on or prior to the Closing.  

4.16.Material Contracts.

(a)Section 4.16(a) of the Disclosure Schedule sets forth, by reference to the
applicable subsection of this Section 4.16(a), all of the following Contracts to
which the Company is a party (each, a “Material Contract”):

(i)any Contract for the purchase, sale, lease or license of property, materials,
supplies, equipment, services, software, intellectual property or other assets
committing the Company or the other party to such Contract to pay more than the
Contract Materiality Threshold;

(ii)any Contract pursuant to which rights of any third party are triggered or
become exercisable, or under which any other consequence, result or effect
arises, in connection with or as a result of the execution of this Agreement or
the consummation of the Transactions, either alone or in combination with any
other event;

(iii)any trust indenture, mortgage, promissory note, loan agreement or other
Contract for the lending or borrowing of money, or any leasing transaction of
the type required to be capitalized in accordance with the Company’s Accounting
Principles and any Contract of guarantee, support, indemnification, assumption
or endorsement of, or any similar commitment with respect to, the Indebtedness
of any other Person;

(iv)any Contract with any Significant Supplier or Significant Customer;

(v)any Contracts that require the Company to purchase or sell a stated portion
of the requirements or outputs of the Business or that contain “take or pay”
provisions;

(vi)any Contract that provides any customer of the Company or the Business with
pricing, discounts or benefits that change based on the pricing, discounts or
benefits offered to other customers of the Company or the Business, including,
without limitation, contracts containing what are generally referred to as “most
favored nation” provisions;

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(vii)any Contract concerning confidentiality or non-solicitation;

(viii)any Contract granting exclusive territory, sales, distribution, marketing
or other exclusive rights, rights of refusal, rights of first negotiation or
similar rights and/or terms to any Person;

(ix)any joint venture and/or partnership agreements, and any and all other
Contracts providing for the sharing of revenue, profits or expenses;

(x)any Contracts between the Company and any Governmental Entity;

(xi)any agreement containing any support, maintenance or service obligation or
cost on the part of the Company, other than Contracts that do not commit the
Company to pay more than the Contract Materiality Threshold;

(xii)any Contracts relating to the membership of, or participation by, the
Company in, or the affiliation of the Company with, any industry standards group
or association;

(xiii)any other Contract or obligation not listed in clauses (i) through (xii)
of this Section 4.16(a) that individually had or has a value or payment
obligation in excess of the Contract Materiality Threshold or is otherwise
material to the Company or the Business.

(b)The Company has not entered into any Contract limiting the freedom of the
Company or any of its Affiliates to engage or participate, or compete with any
other Person, in any line of business, market or geographic area, or to make use
of any Intellectual Property Rights, or any Contract otherwise materially
limiting the right of the Company or any of its Affiliates to sell, distribute
or manufacture any products or services or to purchase or otherwise obtain any
products or services.

(c)All Material Contracts are in written form.  the Company has performed, in
all material respects, all of the obligations required to be performed by it
prior to the date hereof and is not, to the Company’s knowledge, alleged to be
in default in respect of, any Material Contract.  Each of the Material Contracts
is in full force and effect, subject only to the General Enforceability
Exclusions.  There exists no default or event of default or event, occurrence,
condition or act, with respect to the Company or, to the Company’s knowledge,
with respect to any other contracting party, which, with the giving of notice,
the lapse of time or the happening of any other event or condition, would
reasonably be expected to: (i) become a default or event of default under any
Material Contract; or (ii) give any third party: (A) the right to declare a
default or exercise any remedy under any Material Contract; (B) the right to a
rebate, chargeback, refund, credit, penalty or change in delivery schedule under
any Material Contract; (C) the right to accelerate the maturity or performance
of any obligation of the Company under any Material Contract; or (D) the right
to cancel, terminate or modify any Material Contract.  Since its inception, the
Company has not received or given any formal communication regarding any actual
or possible violation or breach of, default under, or intention to cancel or
modify any Material Contract.  The Company has no Liability for renegotiation of
any Contract with any Governmental Entity or any other Person.  The Company has
made available true, correct and complete copies of all Material Contracts.

4.17.Customers; Suppliers.  

(a)The Company has no outstanding material dispute concerning its products
and/or services with any customer that, in the 12-month period ended on the
Balance Sheet Date, was one of the 10 largest sources of revenues for the
Business, based on amounts paid or payable (each, a “Significant Customer”),
and, to the Company’s knowledge, no Significant Customer has any material
dissatisfaction

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with its relationship with the Company.  Each Significant Customer is listed on
Section 4.17(a)(1) of the Disclosure Schedule.  Except as described on Section
4.17(a)(2) of the Disclosure Schedule, the Company has not received any
communication from any Significant Customer that such Person intends to cease
conducting business with the Company in the foreseeable future or after the
Closing, or that such Person intends to terminate or materially modify its
pricing, payment terms, volume or existing relationship with the Company, and
the Company has not provided, or does not intend or expect to provide, any
notice of like effect to any Significant Customer.

(b)The Company has no outstanding dispute concerning products and/or services
provided by any supplier or vendor who, in the 12-month period ended on the
Balance Sheet Date, was one of the 10 largest suppliers of products and/or
services to the Business, based on amounts paid or payable (each, a “Significant
Supplier”), and, to the Company’s knowledge, no Significant Supplier has any
material dissatisfaction with its relationship with the Company.  Each
Significant Supplier is listed on Section 4.17(b)(1) of the Disclosure
Schedule.  Except as described on Section 4.17(b)(2) of the Disclosure Schedule,
the Company has not received any communication from any Significant Supplier
that such Person intends to cease conducting business with the Company in the
foreseeable future or after the Closing, or that such Person intends to
terminate or materially modify existing Contracts with the Company or otherwise
decrease its commercial relationship with the Company.  The Company has access,
on commercially reasonable terms, to all products and services reasonably
necessary to carry on its business as currently conducted and as proposed to be
conducted, to the Company’s knowledge, there is no reasonably foreseeable reason
why and, to the Company’s knowledge, there is no reason why the Company will not
continue to have such access on commercially reasonable terms for the
foreseeable future.

(c)Except as described in Section 4.17(c) of the Disclosure Schedule, the
Company has no partnership, joint venture, agency, franchise or other
relationship with any customer or supplier, other than the relationship of
independent contractors.

4.18.Insurance.  The Company maintains insurance policies reasonably appropriate
for its business and operations, including all legally required workers’
compensation insurance and casualty, fire and general liability insurance.  The
Company is in material compliance with all insurance requirements under its
Contracts.  There is no claim pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds.  All premiums due and payable under all such policies
and bonds have been timely paid, and the Company is otherwise in material
compliance with the terms of such policies and bonds.  All such policies and
bonds remain in full force and effect, and, to the Company’s knowledge, there is
no threatened termination of, or material premium increase with respect to, any
of such policies or bonds.

4.19.Brokers.  Except as set forth in Section 4.19 of the Disclosure Schedule,
no broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with this Agreement or the Transactions
based upon arrangements made by or on behalf of the Company or any
Seller.  Following the Closing, Buyer shall not have any Liability, either
directly or indirectly, to any such investment banker, broker, advisor, finder
or similar party as a result of this Agreement or the Transactions, or the
Company’s or any Seller’s engagement of any such investment banker, broker,
advisor, finder or similar party prior to the Closing.

4.20.Warranties and Guaranties.  

(a)Except as set forth on Section  4.20(a)(1) of the Disclosure Schedule, the
Company has not made any express warranty or guaranty as to goods sold, or
services provided by, the Company (a “Warranty”), and there is no pending or, to
the Company’s knowledge, threatened claim alleging any breach of any
Warranty.  Copies of all Warranties are attached on Section  4.20(a)(2) of the
Disclosure Schedule.  

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(b)The Company has no exposure to, or Liability under, any Warranty: (i) beyond
that which is typically assumed in the ordinary course of business by persons
engaged in businesses comparable in scope of the Business; or (ii) that would
have a Material Adverse Effect on the Company or the Business.  

4.21.Compliance with Laws.  The Company complies, and has at all times since its
inception complied, in all material respects with all applicable Laws.  The
Company has not, nor to the Company’s knowledge has any other Person, received
any notice or other written communication at any time regarding any actual or
alleged failure of the Company or any Seller (as it relates to the Business) to
comply with any applicable Law.  Neither the Company nor any retained
representative thereof has offered or given, and to the Company’s knowledge, no
Person has offered or given on its behalf, anything of value to, in violation of
applicable Law: (a) any official of a Governmental Entity, any political party
or official thereof or any candidate for political office; (b) any customer or
member of any Governmental Entity; or (c) any other Person, in any such case
while knowing or having reason to know that all or a portion of such money or
thing of value may be offered, given or promised, directly or indirectly, to any
customer or member of any Governmental Entity or any candidate for political
office for the purpose of the following: (i) influencing any action or decision
of such Person in such Person’s official capacity, including a decision to fail
to perform such Person’s official function; (ii) inducing such Person to use
such Person’s influence with any Governmental Entity to affect or influence any
act or decision of such Governmental Entity to assist the Company or any Seller
in obtaining or retaining business for, with, or directing business to, any
Person; or (iii) where such payment would constitute a bribe, kickback or
illegal or improper payment to assist the Company in obtaining or retaining
business for, with, or directing business to, any Person, except for an
immaterial political contribution (in an amount which was less than $1,000) by a
political action committee which was fully disclosed to the appropriate
Governmental Entity (without any resulting fine or penalty to the Company).

4.22.Books and Records.  The Company has made available true, correct and
complete copies of: (a) all documents identified on the Disclosure Schedule; (b)
the Organizational Documents, each as currently in effect; (c) the minute books
containing records of all proceedings, consents, actions and meetings of the
Company’s board of directors, committees of the Company’s board of directors and
the Sellers that occurred since the inception of the Company; (d) the stock
ledger, journal and other records reflecting all capital stock issuances and
transfers and all equity interests and equity-linked interests in the Company;
and (e) all Permits, orders and consents that are material to the operation of
the Business, and all applications for such Permits, orders and consents.  The
minute books the Company made available contain a complete and accurate summary
of all material actions taken at any meetings of managers, directors and
equityholders of the Company, or actions by written consent thereof, in each
case since the inception of the Company, and reflect all transactions referred
to in such minutes accurately in all material respects.

4.23.Related Party Transactions.  

(a)Except as set forth in Section 4.23(a)(1) of the Disclosure Schedule there
are no Contracts between the Company, on the one hand, and any of its managers,
officers, directors, employees, Affiliates, equityholders or other security
holders, or any relative or spouse of any such person (each, a “Related Party”),
on the other hand.  Each employee, consultant or contractor of the Company who
is a relative or spouse of any officer, director or manager of the Company or
any of its Affiliates or any Seller is listed on Section 4.23(a)(2) of the
Disclosure Schedule.  

(b)To the Company’s knowledge, no Related Party has any direct or indirect
ownership interest in or relationship with: (i) any Person with which the
Company has a material business relationship; or (ii) any Person that competes
with the Company (other than solely by virtue of such person’s

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ownership of less than 1% of the outstanding stock of publicly traded companies
that compete with the Company).

(c)All notes receivable and notes payable of the Company owing by or to any
Related Party (the “Affiliate Loans”) have been paid in full, settled by way of
capital contribution in kind, cancelled or otherwise discharged as of
Closing.  Section 4.23(c) of the Disclosure Schedules sets forth a true, correct
and complete list of all Affiliate Loans and the outstanding balance and
applicable interest payments under each Affiliate Loan as of the date hereof.
Any account receivable existing between the Company, on the one hand, and any
Related Party, on the other hand, shall be paid in full on the Closing Date and
out of Sellers’ proceeds.

4.24.Restrictions on Business Activities.  There is no Contract pursuant to
which the Company is or may become, or pursuant to which, immediately following
the Closing any Purchased Asset will or may become, subject to any restrictions
or purported restrictions on selling, licensing or otherwise distributing any of
its products or on providing services to customers or potential customers or any
class of customers, in any geographic area, during any period of time or in any
segment of any market.

4.25.Solvency.  Immediately after giving effect to the Transactions, the Company
shall be solvent and shall: (a) be able to pay its debts as they become due; (b)
own property that has a fair saleable value greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all contingent
Liabilities); and (c) have adequate capital to carry on its business.  No
transfer of property is being made and no obligation is being incurred in
connection with the Transactions with the intent to hinder, delay or defraud
either present or future creditors of the Company or any Seller. In connection
with the Transactions, the Company has not incurred, or does not plan to incur,
debts beyond its ability to pay as they become absolute and matured.

4.26.Disclosure.  No representation or warranty made to Buyer by the Company or
any Seller with respect to the Transactions, whether in this Agreement or
otherwise, contains an untrue statement of a material fact or omits to state a
material fact necessary to make such statements, in light of the circumstances
in which it was made, not misleading.  The Company does not know of any fact or
circumstance that is reasonably likely to materially adversely affect the
prospects, financial condition or results of operations of the Company.

ARTICLE V
Representations And Warranties Of the SellerS

Each Seller represents and warrants to Buyer, jointly and severally, as of the
date of this Agreement and as of the Closing, that:

5.1.Ownership of Shares.  Such Seller is the sole record and sole beneficial
holder of 100% of the capital stock set forth opposite its name on Section 4.3
of the Disclosure Schedule, free and clear of any Liens (such Shares, such
“Equity Interest”).  Such Seller’s Equity Interest constitutes such Seller’s
entire equity interest in the Company.  No person (other than Buyer) has a
beneficial interest in or a right to acquire or vote any of such Seller’s Equity
Interest.  Such Seller’s Equity Interest is not subject to any Liens (other than
Liens created pursuant hereto)

5.2.Authorization.  Such Seller is duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its formation or creation. Such
Seller has all requisite power and authority to enter into this Agreement and
each Ancillary Transaction Document to which such Seller is a party, and to
perform its obligations hereunder and thereunder.  The execution and delivery of
this Agreement and each Ancillary Transaction Document to which such Seller is a
party by such Seller and the consummation

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by such Seller of the Transactions have been duly authorized by all necessary
action, if any, on the part of such Seller.  This Agreement and each Ancillary
Transaction Document to which such Seller is a party has been duly executed and
delivered by such Seller and constitutes a valid and binding obligation of such
Seller, enforceable against such Seller in accordance with its terms, subject to
the General Enforceability Exclusions.

5.3.Non-Contravention.  

(a)No Conflict.  The execution and delivery by such Seller of this Agreement and
the Ancillary Transaction Documents to which such Seller is a party do not, and
the consummation of the Transactions does not, and the Seller’s performance of
its obligations under this Agreement and the Ancillary Transaction Documents to
which such Seller is a party will not: (i) result in the creation of any Lien on
any of such Seller’s capital stock or other equity or equity-linked interests of
the Company; or (ii) conflict with or violate the Organizational Documents, of
conflict with or result in any violation of or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit under, or
require any consent, approval or waiver from any Person pursuant to: (A) any
Contract to which such Seller is a party or by which such Seller or any of such
Seller’s capital stock or other equity or equity-linked interests of the Company
is bound or affected; or (B) any applicable Law.  

(b)Required Consents.  Except for consents or approvals obtained prior to the
date of this Agreement, no consent, approval, order, authorization, release or
waiver of, or registration, declaration or filing with, any Governmental Entity
or other Person is necessary or required to be made or obtained by such Seller
to enable such Seller to lawfully execute and deliver, enter into, and perform
its obligations under this Agreement and each of the Ancillary Transaction
Documents to which such Seller is a party.

5.4.Litigation.  There is no Action pending against such Seller that relates in
any way to this Agreement, any Ancillary Transaction Document to which such
Seller is a party, or the Transactions.  To the knowledge of such Seller: (a) no
such Action has been threatened; and (b) there is no reasonable basis for any
such Action.

5.5.No Brokers.  Except as set forth in Section 4.19 of the Disclosure Schedule,
such Seller is not obligated for the payment of any fees or expenses of any
investment banker, broker, advisor, finder or similar party in connection with
the origin, negotiation or execution of this Agreement or in connection with the
Transactions.  Following the Closing, none of Buyer, or any of its respective
Affiliates shall have any Liability, either directly or indirectly, to any such
investment banker, broker, advisor, finder or similar party as a result of this
Agreement or the Transactions or the engagement of any such investment banker,
broker, advisor, finder or similar party prior to the Closing.

5.6.Taxes.  Such Seller has had an opportunity to review with its own advisors
the Tax consequences of the Transactions.  Such Seller understands that it must
rely solely on its advisors and not on any statements or representations made by
Buyer, the Company or any of their respective agents or representatives.  Such
Seller understands that such Seller (and not Buyer, or the Company or any other
Person) shall be responsible for any Tax Liability for such Seller that may
arise as a result of the Transactions.

5.7.Confirmation Regarding the Company Representations and Warranties. Such
Seller has read and understands the representations and warranties set forth in
Article IV and, to the best of such Seller’s knowledge, such representations and
true and correct.

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER

As an inducement to the Company to enter into this Agreement, Buyer hereby
represents and warrants, solely to the Sellers, as follows:

6.1.Organization and Authority of Buyer; Enforceability.  Buyer is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its formation.  Buyer has full entity power and authority to
enter into this Agreement and the documents to be delivered hereunder, to carry
out its obligations hereunder and to consummate the Transactions.  The
execution, delivery and performance by Buyer of this Agreement and the documents
to be delivered hereunder and the consummation of the Transactions have been
duly authorized by all requisite actions on the part of Buyer.  This Agreement
and the documents to be delivered hereunder have been duly executed and
delivered by Buyer, and (assuming due authorization, execution and delivery by
the Company, the Sellers and the Sellers’ Representative) this Agreement and the
documents to be delivered hereunder constitute legal, valid and binding
obligations of Buyer enforceable against Buyer in accordance with their
respective terms.

6.2.Non-Contravention. The execution, delivery and performance by Buyer of this
Agreement and the documents to be delivered hereunder, and the consummation of
the Transactions, do not and will not: (a) violate or conflict with the
certificate of incorporation, by-laws or other organizational documents of
Buyer; or (b) violate or conflict with any judgment, order, decree, statute,
Law, ordinance, rule or regulation applicable to Buyer.  No consent, approval,
waiver or authorization is required to be obtained by Buyer from any Person or
entity (including any Governmental Entity) in connection with the execution,
delivery and performance by Buyer of this Agreement and the consummation of the
Transactions.

6.3.Legal Proceedings. There is no Action of any nature pending or, to Buyer’s
knowledge, threatened against or by Buyer that challenges or seeks to prevent,
enjoin or otherwise delay the Transactions.

6.4.Investment Purpose.  Buyer is acquiring the Purchased Shares solely for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution thereof other than in compliance with all applicable
Laws, including U.S. federal securities Laws.  Buyer agrees that the Purchased
Shares may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and any
applicable state securities Laws, except pursuant to an exemption from such
registration under the Securities Act and such Laws.  Buyer is able to bear the
economic risk of holding the Purchased Shares for an indefinite period
(including total loss of its investment), and (either alone or together with its
advisors) has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risk of its investment.

ARTICLE VII
covenants

7.1.Further Action; Reasonable Best Efforts.  Upon the terms and subject to the
conditions of this Agreement, each Party shall use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws to
consummate and make effective the Transactions, including executing and
delivering such additional documents, instruments, conveyances and assurances,
and  using its reasonable best efforts to obtain all Permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities
and parties to Contracts with the Company as are necessary for the consummation
of the Transactions.  In

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case, at any time after the Closing Date, any further action is necessary or
desirable to carry out the purposes of this Agreement, the Parties shall use
their respective reasonable best efforts to take all such action.

7.2.Public Announcements.  The Company, the Sellers and the Sellers’
Representative shall not, and the Company, the Sellers and the Sellers’
Representative shall, shall not cause their respective agents and
representatives not to, prior to Buyer’s public announcement, if any, of this
Agreement and the Transactions, directly or indirectly, issue any press release
or other public statement relating to the terms of this Agreement or the
Transactions or use Buyer’s name or the name of any Affiliate of Buyer or refer
to Buyer or any Affiliate of Buyer directly or indirectly in connection with
Buyer’s relationship or the relationship of any Affiliate of Buyer with the
Company in any media interview, advertisement, news release, press release or
professional or trade publication, or in any print media, whether or not in
response to an inquiry, without the prior written approval of Buyer, unless
required by Law (in which event a satisfactory opinion of counsel to that effect
shall be first delivered to Buyer prior to any such disclosure) and except as
reasonably necessary for the Company to obtain the consents and approvals of
third parties contemplated by this Agreement.  In the event Buyer makes any
public announcement with respect to this Agreement or the Transactions, neither
the Company nor any Seller shall, and each such Party shall cause its respective
Affiliates, agents and representatives not to, issue any press release or other
public statement relating to the terms of this Agreement or the Transactions
that differs in any material respect from any such public announcement made by
Buyer or any of its Affiliates.  Notwithstanding anything to the contrary in
this Agreement, nothing in this Agreement shall prohibit or otherwise restrict
or limit any communication between Buyer, on the one hand, and any of its
Affiliates, on the other hand, and Buyer and its Affiliates shall be free to
make customary disclosures to their respective Affiliates relating to the terms
of this Agreement and/or the Transactions.

7.3.Tax Matters.

(a)Responsibility for Filing.  The Parties agree that Buyer shall prepare and
file or cause to be prepared and filed all income Tax Returns of the Company
that are for a Pre-Closing Tax Period and that are due after the Closing Date,
including Tax Returns for Taxable periods which begin before the Closing Date
and end after the Closing Date (a “Straddle Period”).  20 Business Days prior to
the due date of such returns, Buyer shall permit the Sellers’ Representative to
review and comment on the Straddle Period returns and shall consider in good
faith such revisions to such returns as are reasonably requested by the Sellers’
Representative.  The Sellers, jointly and severally, shall reimburse Buyer for
any Taxes paid by Buyer or any of its Affiliates that are attributable to
Pre-Closing Taxes within 30 days after payment by Buyer or any Affiliate of
Buyer of such Taxes; provided, however, that the Sellers shall not reimburse
Buyer for any Pre-Closing Taxes to the extent that they were included as current
liabilities in the Net Working Capital Amount.  Each Seller shall be responsible
for filing its own Tax Returns for all Taxable Periods, regardless of whether
such periods end before or after the Closing Date.

(b)Cooperation on Tax Matters.

(i)Each Party shall cooperate fully, as and to the extent reasonably requested
by the other Parties, in connection with the filing of Tax Returns and any
audit, litigation or other proceeding with respect to Taxes.  Such cooperation
shall include the retention and (upon any other Party’s request) the provision
of records and information which are reasonably necessary to any such audit,
litigation or other proceeding and being available on a mutually convenient
basis to provide additional information and explanation of any matters provided
hereunder.  Each Party shall retain all books and records with respect to Tax
matters pertinent to the Company relating to any Taxable period beginning before
the Closing Date until the expiration of the statute of limitations (including
extensions) of the respective Taxable periods, and abide by all record retention
agreements entered into with any Tax Authority.  

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(ii)Each Party further agrees, upon request, to use reasonable efforts to obtain
any certificate or other document from any Governmental Entity or any other
person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including with respect to the Transaction)

(c)Allocation of Taxes for any Straddle Period.  In the case of any Straddle
Period, the amount of any Taxes (other than property or ad valorem Taxes)
attributable to the portion of such Straddle Period ending on the Closing Date
shall be determined based on an interim closing of the books as of the close of
business on the Closing Date.  In the case of any property or ad valorem Taxes
that are payable for a Straddle Period, the portion of such Tax which is
attributable to the portion of such Straddle Period ending on the Closing Date
shall be deemed to be the amount of such Tax for the entire Straddle Period
multiplied by a fraction the numerator of which is the number of days in the
Straddle Period ending on the Closing Date and the denominator of which is the
number of days in the entire Straddle Period.

(d)Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration
and other similar Taxes and fees (collectively, “Transfer Taxes”) incurred in
connection with the Transactions shall be borne 50% by the Sellers and 50% by
the Buyer.  Seller will file all necessary Tax Returns and other documentation
with respect to all such Transfer Taxes, and, if required by applicable Law,
Buyer will, and will cause its Affiliates to, join in the execution of any such
Tax Returns and other documentation; provided, however, that Buyer shall be
given the opportunity to review and comment on any such Tax Return or other
documentation before joining in the execution thereof.

(e)Other Tax Matters.  

(i)Following the Closing Buyer shall cause the Company to (A) restate its
pre-Closing books and records to conform to GAAP; and (B) determine the
Company’s potential unpaid state sales and use tax liabilities for any
Pre-Closing Taxable Period (any such Taxes “Pre-Closing Sales Taxes”).  The
Sellers, jointly and severally, shall be fully responsible for and shall
promptly reimburse Buyer, on an as incurred basis, for any out-of-pocket
professional fees and expenses incurred by the Company in connection with the
restatement and determination contemplated by the previous sentence. Further,
Sellers shall cooperate fully, as and to the extent reasonably requested by the
Company and Buyer, in connection with such endeavors.

(ii)Notwithstanding anything in this Agreement to the contrary, in respect of
any applications, filing, communications, voluntary disclosure agreements or
other Tax Returns with respect Pre-Closing Sales Taxes (including any related
administrative or judicial proceedings) (any “Pre-Closing Sales Tax Matter”),
Buyer shall have the right to control the conduct of such Pre-Closing Sale Tax
Matter; provided that the Sellers may participate in the conduct of such
Pre-Closing Sales Tax Matter. For the avoidance of doubt, the Sellers shall be
responsible, jointly and severally, for and indemnify Buyer or its Affiliates
pursuant to Section 8.1(a)(viii) from, against and respect of any and all
Pre-Closing Sales Tax, and any and all other claims, liabilities, obligations,
damages, losses, costs, expenses, penalties, fines and judgments (at equity or
at law, including statutory and common) and damages whenever arising or incurred
(including amounts paid in settlement, costs of investigation and reasonable
attorneys’ fees and expenses) arising out of or relating to any Pre-Closing
Sales Tax Matter; provided, however, that should Buyer either fail to promptly
file a claim for refund, or notify Seller that it does not intend to make a
claim for refund in any jurisdiction which was overpaid as a result of any
determination of sales tax liability in another jurisdiction, then Seller shall
have the right to file a claim for such refund.  A promptly filed claim for
refund shall mean a claim for refund filed by Buyer within 30 days following
Buyer’s receipt of a notice of assessment issued by any jurisdiction assessing
Pre-Closing Sales Taxes.  Should Seller have the right to file a claim for
refund as set forth above, then Buyer shall use its

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reasonable efforts to provide Seller access to all applicable records, receipts,
tax filings and other documents in its possession that relate to such
Pre-Closing Sales Tax Matter as may be reasonably requested by Seller.  The
Parties acknowledge that Buyer may be required to sign and file any claim for
refund, and Buyer will use its reasonable efforts to timely file any claim for
refund submitted by Seller.  Seller acknowledges and agrees that in the event it
pursues any claim for refund on behalf of the Company as set forth above, Seller
shall be responsible for any legal and accounting fees associated with such
filings, if any.  To the extent Seller is successful in its claim for refund,
all amounts refunded and actually received by Buyer shall reduce the amount of
Buyer’s claim against Seller for any Pre-Closing Sales Tax Matter.

7.4.Release.  In consideration for the agreements and covenants of Buyer set
forth in this Agreement, as of and following the Closing Date, the Company and
each Seller, on behalf of themselves and, to the extent permitted by Law, each
of their respective Affiliates (collectively in the singular, each a “Releasing
Party” and in the plural, the “Releasing Parties”) hereby knowingly, voluntarily
and unconditionally releases, forever discharges, and covenants not to sue Buyer
and its predecessors, successors, parents, Subsidiaries and other Affiliates,
and any of their respective current and former officers, directors, employees,
agents, or representatives from and for any and all claims, causes of action,
demands, suits, debts, obligations, liabilities, damages, losses, costs, and
expenses (including attorneys’ fees) of every kind or nature whatsoever, known
or unknown, actual or potential, suspected or unsuspected, fixed or contingent,
a Releasing Party has or may have, now or in the future, arising out of,
relating to, or resulting from any act of commission or omission, errors,
negligence, strict liability, breach of contract, tort, violations of Law,
matter or cause whatsoever from the beginning of time to the Closing Date
(collectively, the “Released Claims”); provided, however, that such release will
not cover any claims against Buyer arising after the Closing Date under this
Agreement, or any Ancillary Transaction Document.

7.5.401(k) Plans.  Effective as of the Business Day immediately preceding the
Closing, the Company and the Sellers shall take all actions necessary to effect
the termination of any and all Company Plans intended to qualify as a qualified
cash or deferred arrangement under Section 401(k) of the Code, and effective as
of the Business Day immediately preceding the Closing, no Company employee shall
have any right thereafter to contribute any amounts to any Company Plan intended
to qualify as a qualified cash or deferred arrangement under Section 401(k) of
the Code.  The Company shall provide Buyer with evidence that each such Company
Plan has been terminated pursuant to an action by the Company board of
directors.

7.6.Customer Notification.  Buyer will not initiate a discussion with any
customer of the Company regarding the billing practices of the Company prior to
Closing; provided, however, nothing contained herein shall prohibit or restrict
Buyer from making any disclosures or providing any notifications as required by
Contract, applicable Law or any Governmental Entity or engaging in any such
discussions initiated by a customer of the Company.  In the event Seller alleges
that Buyer breached its obligations pursuant to this Section 7.6, the burden of
proof to prove such breach shall be on Seller.

ARTICLE VIII
INDEMNIFICATION

8.1.Indemnification.

(a)Subject to the limitations and exceptions set forth in this ARTICLE VIII,
each Seller (as such, the “Indemnifying Person”), jointly and severally, agrees
to indemnify and hold harmless Buyer and its Affiliates, each of their
respective managers, directors, officers, agents, employees, representatives,
successors and assigns (each of the foregoing being referred to individually as
an “Indemnified Person” and collectively as “Indemnified Persons”) from and
against any and all losses, Liabilities, damages, fees, settlement costs and
expenses, including costs of investigation and defense and

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reasonable fees and expenses of legal counsel, experts and other professionals
(collectively, “Indemnifiable Damages”), whether or not due to a third-party
claim, in each case, directly or indirectly incurred, arising out of or
resulting from or in connection with:

(i)any breach of any representation or warranty made by the Company in ARTICLE
IV or made by the Company in any Ancillary Transaction Document to which the
Company is a party;

(ii)any breach of any representation or warranty made by any Seller in ARTICLE V
or made by any Seller in any Ancillary Transaction Document to which such Seller
is a party;

(iii)any and all (A) Indebtedness of the Company that existed prior to the
Closing and that remained unpaid after the Closing that is not included in the
Final Net Working Capital Amount, and (B) Transaction Expenses that existed
prior to the Closing and that remained unpaid after the Closing that is not
included in the Final Net Working Capital Amount;

(iv)any breach of or default of any of the covenants in Article VII made by the
Company (to the extent required to be performed at or prior to the Closing) or
any Seller or a breach or default of any of the covenants in any Ancillary
Transaction Document to which the Company or any Seller is a party;

(v)any fraud, intentional misrepresentation or willful breach by or on the part
of Seller or any Seller arising out of, resulting from or in connection with
this Agreement or in any Ancillary Transaction Document to which Seller or any
such Seller is a party;

(vi)any Released Claim;

(vii)any failure to obtain any consent required from any Person in connection
with a Contract listed on Section 4.4(a) of the Disclosure Schedule;

(viii)any Excluded Liabilities;

(ix)any Pre-Closing Taxes, including for the avoidance of doubt, any federal or
state income taxes for any Pre-Closing Taxable Period and, subject to the
treatment of any refunds received pursuant to Section 7.3(e)(ii), Pre-Closing
Sales Taxes; and

(x)without duplication of Section 2.3, any Unidentified Liabilities.

(b)For purposes of calculating the amount of any Indemnifiable Damages under
this ARTICLE VIII, any materiality, Material Adverse Effect or other similar
qualifications in the representations and warranties contained in ARTICLE IV and
ARTICLE V shall be disregarded.

8.2.Recourse; Other Limitations.  

(a)The indemnification obligations of each Indemnifying Person under this
ARTICLE VIII and the set-off rights set forth in Section 2.4(f) shall constitute
the sole and exclusive rights, claims and remedies of all Indemnified Persons
with respect to the Transactions against such Indemnifying Person; provided,
however, that this ARTICLE VIII shall not limit or restrict Buyer’s and its
Affiliates’ rights to specific performance, injunctive relief or any other
equitable remedies for any breach or threatened breach of this Agreement or any
Ancillary Transaction Document to which the Company or any Seller is a

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party, or any right or remedy arising by reason of any claim of fraud,
intentional misrepresentation or willful breach.  

(b)Except with respect to Special Matters or indemnification claims pursuant to
Section 8.1(a)(i) or Section 8.1(a)(ii) for breaches of Fundamental
Representations the Indemnifying Persons’ aggregate Liability for
indemnification claims shall be limited to an aggregate amount equal to 15% of
the sum of: (i) the Final Net Purchase Price; plus (ii) the portion of the
Earn-Out Consideration actually earned pursuant to Section 2.4, if any.

(c)With respect to Special Matters (other than Section 8.1(a)(v)) and with
respect to indemnification claims pursuant to Section 8.1(a)(i) or Section
8.1(a)(ii) with respect to breaches of only those certain Fundamental
Representations, the Indemnifying Person shall be liable for any Indemnifiable
Damages resulting therefrom up to the sum of: (i) the Final Net Purchase Price;
plus (ii) the portion of the Earn-Out Consideration actually earned pursuant to
Section 2.4, if any. Notwithstanding anything to the contrary set forth herein,
indemnification claims pursuant to Section 8.1(a)(v) shall be unlimited.

(d)Other than with respect to indemnification claims pursuant to Section
8.1(a)(i) or Section 8.1(a)(ii) for a breach of any of the Fundamental
Representations, no claim for indemnification may be made by any Indemnified
Person pursuant to Section 8.1(a)(i) or Section 8.1(a)(ii) unless and until the
aggregate amount of the Indemnifiable Damages exceeds the Basket Amount, at
which point, subject to the limits set forth in this ARTICLE VIII, Indemnified
Persons may recover all Indemnifiable Damages, including the Basket Amount.  No
Indemnified Person shall be entitled to receive indemnification more than once
with respect to the same loss even if the state of facts giving rise to such
loss constitutes a breach of more than one representation, warranty, covenant or
agreement.

8.3.Period for Claims; Other Limitations.  The period during which claims for
Indemnifiable Damages may be made pursuant to Section 8.4 for the indemnity
obligations under this Agreement (the applicable period, the “Claims Period”)
shall commence at the Closing and terminate on the first Business Day occurring
after the 15-month anniversary of the Closing Date (the “Indemnification
Period”); provided, however, that the Claims Period for claims made:
(a) pursuant to Section 8.1(a)(i) or Section 8.1(a)(ii) with respect to the
breach of a Fundamental Representation; and (b) pursuant to Section
8.1(a)(iii)-(x) shall commence at the Closing and shall survive indefinitely
(the applicable time period specified in this proviso being the “Subsequent
Claims Period”).  Notwithstanding anything to the contrary in this Agreement,
all or the applicable portion of the Escrow Amount necessary to satisfy any
unresolved or unsatisfied claim for Indemnifiable Damages specified in any
Officer’s Certificate delivered to Sellers’ Representative pursuant to Section
8.4 prior to expiration of the Indemnification Period shall not be distributed
to the Sellers until such claim for Indemnifiable Damages has been resolved or
satisfied in accordance with the terms hereof, at which point the entire
remaining portion of the Escrow Amount shall be distributed to the Sellers upon
the terms and subject to the conditions set forth in the Escrow Agreement.  With
respect to any portion of the Escrow Amount reserved for a given indemnification
claim made by any Indemnified Person in accordance with Section 8.4 prior to the
expiration of the Claims Period, such reserved amount shall be distributed to
the Sellers after such claim has been resolved or satisfied in accordance with
the terms of this Agreement, net of any amounts therefrom used to satisfy any
Indemnifying Person’s indemnification obligations with respect to such claim in
accordance with this ARTICLE VIII, upon the terms and subject to the conditions
set forth in the Escrow Agreement.  

8.4.Claims.  On or before the last day of the Indemnification Period, Buyer may
deliver to Sellers’ Representative to Sellers’ Representative a certificate
signed by any officer of Buyer (as updated or amended from time to time by Buyer
in good faith by delivering an updated or amended Officer’s Certificate to
Sellers’ Representative, an “Officer’s Certificate”): (a) stating that an
Indemnified Person has incurred, paid, reserved or accrued Indemnifiable
Damages, or is reasonably likely to incur, pay, reserve or

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accrue Indemnifiable Damages (or that with respect to any Tax matters, that any
Tax Authority may reasonably raise such matter in audit of Buyer which could
give rise to Indemnifiable Damages); (b) stating the Indemnified Person’s
reasonable, good faith estimate of the amount of such Indemnifiable Damages
(which, in the case of Indemnifiable Damages not yet incurred, paid, reserved or
accrued, may be the maximum amount reasonably anticipated by Buyer to be
incurred, paid, reserved or accrued); and (c) specifying in reasonable detail
(based upon the information then possessed by Buyer) the individual items of
such Indemnifiable Damages included in the amount so stated and the nature of
the claim to which such Indemnifiable Damages are related and the principal
facts, to the extent then known by Buyer, giving rise to any such claim for
indemnification and the sections of this Agreement pursuant to which such claim
is being made.  Provided that the Officer’s Certificate is delivered to Sellers’
Representative, no delay in providing such Officer’s Certificate shall affect an
Indemnified Person’s rights hereunder, unless (and then only to the extent that)
the applicable Indemnifying Person is materially prejudiced by such delay.

8.5.Resolution of Objections to Claims.  

(a)Sellers’ Representative shall have 30 days after receipt of an Officer’s
Certificate to object in good faith in writing to any claim or claims by Buyer
made in such Officer’s Certificate, and if no such written objection is received
by Buyer within such 30-day period, such matter shall be deemed to be determined
in favor of Buyer as set forth in, and as may be qualified by, such Officer’s
Certificate.  If Sellers’ Representative objects in good faith and delivers
written notice of such objection to Buyer within such 30-day period, Buyer and
Sellers’ Representative shall attempt in good faith to resolve such objection
within the 45-day period commencing on Buyer’s receipt of such written
objection.  If Buyer and Sellers’ Representative shall so agree, a memorandum
setting forth such agreement shall be prepared and signed by all such Parties,
and the Parties shall execute and deliver written instructions to the Escrow
Agent directing the Escrow Agent to distribute an amount equal to the agreed
amount set forth in such memorandum.

(b)If no such agreement can be reached during such 45-day period, but in any
event upon the expiration of such 45-day period, the dispute shall be handled in
accordance with Section 9.7, Section 9.8 or Section 9.8, as applicable.

8.6.Third-Party Claims.

(a)In the event that any claim for which an Indemnifying Person would be liable
to an Indemnified Person hereunder is asserted against or sought to be collected
from such Indemnified Person by a third party (including any Tax audit, contest
or similar proceeding), subject to Section 8.2 and Section 8.3 (each, a
“Third-Party Claim”), the Indemnified Person shall notify in writing Sellers’
Representative of such Third-Party Claim within 30 days after the Indemnified
Person becomes aware of such Third-Party Claim (or within such shorter period as
may be required to permit the Indemnifying Person to respond to any such
Third-Party Claim), specifying the nature of and the specific basis for such
Third-Party Claim and a good faith estimate (to the extent practicable) of the
amount of all related Indemnifiable Damages; provided, however, that the failure
to so notify Sellers’ Representative will not relieve any Indemnifying Person
from Liability under this ARTICLE VIII unless (and then only to the extent that)
it has been prejudiced by such delay.

(b)The Indemnifying Person shall be entitled to assume and control the defense
of such Third-Party Claim at its expense and through counsel of its choice if
and only if the Indemnifying Person (i) provides to the Indemnified Person
written notice of the Indemnifying Person’s election to defend such Third-Party
Claim within 30 days of the receipt of such notice from the Indemnified Person
and (ii) provides to the Indemnified Person written acknowledgment that such
Third-Party Claim involves a matter for which the Indemnifying Person is
obligated to provide indemnification to the Indemnified Person pursuant to this
ARTICLE VIII; provided, however, that in the case of any Third-Party Claim with
respect

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to any Tax audit, contest or similar proceeding relating to both a Pre-Closing
Tax Period and a Post-Closing Tax Period, the Indemnifying Person shall not be
entitled to assume and control the defense of such Third-Party Claim to the
extent such Tax audit, contest or similar proceeding relates to a Post-Closing
Tax Period.  Notwithstanding anything herein to the contrary, the Indemnifying
Person shall not have the right to assume the defense of any such Third-Party
Claim (A) if such Third-Party Claim could result in criminal liability of, or
equitable remedies against, the Indemnified Person, or (B) if the defendants in,
or targets of any such Third-Party Claim include both the Indemnifying Person
and the Indemnified Person, and the Indemnified Person has been advised by
counsel that a conflict of interest likely exists between the Indemnified Person
and the Indemnifying Person (in which case the Indemnifying Person will not have
the right to assume the defense of the Third-Party Claim against the Indemnified
Person).

(c)If the Indemnifying Person elects to undertake any such defense, the
Indemnified Person may participate in such defense at its own expense.  The
Indemnified Person shall undertake good faith efforts to cooperate with the
Indemnifying Person in such defense and make available to the Indemnifying
Person, at the Indemnifying Person’s expense, all witnesses, pertinent records,
materials and information in the Indemnified Person’s possession or under the
Indemnified Person’s control relating thereto (or in the possession or control
of any of its Affiliates or its or their representatives) as are reasonably
requested by the Indemnifying Person or its counsel.  If the Indemnifying Person
elects to control any such defense, the Indemnified Person shall not, without
the Indemnifying Person’s prior written consent pay or permit to be paid any
amount in settlement of such Third-Party Claim unless: (i) the Indemnifying
Person consents in writing to such payment; (ii) the Indemnifying Person
withdraws from the defense of, or fails to actively conduct the defense of, such
Third-Party Claim; or (iii) a final judgment is entered against the Indemnified
Person with respect to such Third-Party Claim.  The Indemnifying Person shall
not unreasonably withhold consent to a settlement.  Notwithstanding anything to
the contrary in this Agreement, with respect to any Third-Party Claim for which
the Indemnifying Person has elected to conduct the defense and is actively
conducting the defense thereof, if the Indemnified Person so directs the
Indemnifying Person in writing, the Indemnifying Person shall settle, compromise
or discharge such Third-Party Claim for the settlement amount specified by the
Indemnified Person (the “Settlement Amount”), which shall be paid as follows:
(A) to the extent that the Indemnifying Person does not object to the amount to
be paid to the applicable third party in connection with the settlement,
compromise or discharge of such Third-Party Claim, such amount shall constitute
Indemnifiable Damages for all purposes under this Agreement (such amount, the
“Agreed Value”), and the Indemnified Person may unilaterally direct the Escrow
Agent to distribute an amount equal to the Agreed Value as specified in written
instructions delivered by the Indemnified Person to the Escrow Agent; and (B)
the Indemnified Persons shall fund any portion of the Settlement Amount that is
in excess of the Agreed Value (such excess, the “Disputed Amount”).  The
Indemnified Person shall have the right to make a claim for Indemnifiable
Damages for the Disputed Amount and, if the Indemnified Person makes such claim,
a portion of the Escrow Amount equal to the Disputed Amount shall continue to be
held by the Escrow Agent and shall not be paid to the Sellers until the
Indemnified Person’s claim for Indemnifiable Damages with respect to the
Disputed Amount has been resolved or satisfied in accordance with the terms of
Section 8.4, this Section 8.6, Section 9.8, Section 9.9 and the Escrow
Agreement, as applicable.

8.7.No Waiver by Knowledge.  An Indemnified Person’s right to indemnification
under this ARTICLE VIII based on the breach of any representation, warranty,
covenant or agreement  shall not be diminished or otherwise affected in any way
as a result of the existence of such Indemnified Person’s or its Affiliates’ or
their respective representatives’ knowledge of such breach or untruth,
regardless of whether such knowledge exists as a result of the Indemnified
Person’s investigation, as a result of disclosure by the Indemnifying Person (or
any other Person), or otherwise.

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8.8.Tax Treatment of Indemnity Payments.  The Parties agree to treat any
indemnity payment made pursuant to this ARTICLE VIII as an adjustment to the
Final Net Purchase Price for federal, state, local and foreign income Tax
purposes unless otherwise required by Law.

ARTICLE IX
GENERAL PROVISIONS

9.1.Survival of Representations and Warranties and Covenants.  The
representations and warranties with respect to the Company and the Sellers in
Article IV and Article V shall survive the Closing and remain in full force and
effect until the expiration of the Claims Period that applies to such
representations and warranties as set forth in Section 8.3; provided, however,
that no right to indemnification pursuant to ARTICLE VIII in respect of any
claim that is set forth in an Officer’s Certificate (including any update or
amendment thereto) delivered to Sellers’ Representative prior to the expiration
of the applicable Claims Period shall be affected by the expiration of such
representations and warranties as it relates to such claim.

9.2.Notices.  All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt requested),
or sent via email (with receipt confirmed), to the Parties at the respective
addresses set forth on Schedule D (or at such other address for a Party as shall
be specified by like notice).

9.3.Counterparts.  This Agreement may be executed in one or more counterparts
(including by means of DocuSign (or similar) or transmission in portable
document format (.pdf)), all of which shall be considered one and the same
instrument and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Parties; it being
understood that all Parties need not sign the same counterpart.

9.4.Entire Agreement; Non-assignability; Parties in Interest; Amendment.  This
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including all the Exhibits
attached hereto, the Schedules, including the Disclosure Schedule:
(a) constitute the entire agreement among the Parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the Parties with respect to the subject matter
hereof; (b) are not intended to confer, and shall not be construed as
conferring, upon any Person other than the Parties any rights or remedies
hereunder (except that ARTICLE VIII is intended to benefit Indemnified Persons);
and (c) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided herein.  This Agreement shall not be amended,
modified or supplemented except by a written instrument signed by Buyer and the
Sellers.

9.5.Assignment.  Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned or delegated, in whole or in
part, by operation of law or otherwise, by any of the Parties without the prior
written consent of the other Parties, and any such assignment without such prior
written consent shall be null and void; provided; however, that Buyer may
assign, transfer or delegate its rights and obligations pursuant to this
Agreement, in whole and not in part, to one of the following persons if such
Person signs a written agreement evidencing its assumption of such rights and
obligations: (a) any direct wholly-owned Subsidiary of Buyer or any successor in
interest to Buyer; (b) one or more banks or other lenders providing financing to
Buyer or its Affiliates from time to time; or (c) any Person that acquires the
outstanding shares of capital stock or substantially all of the assets of Buyer.

9.6.Severability.  In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement shall
continue in full force and effect and shall be interpreted so as reasonably

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to effect the intent of the Parties.  The Parties shall use all reasonable
efforts to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that shall achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

9.7.Remedies Cumulative.  Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a Party shall be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such Party, and the exercise by a Party of any one remedy shall not preclude the
exercise of any other remedy and nothing in this Agreement shall be deemed a
waiver by any Party of any right to specific performance or injunctive
relief.  It is accordingly agreed that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which they are entitled at law or in equity, and the Parties
hereby waive the requirement of any posting of a bond in connection with the
remedies described herein.

9.8.Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to such
state’s principles of conflicts of law.  Other than as expressly provided in
Section 2.3, Section 2.4 and Section 8.6 with respect to the resolution of
Disputes, the Parties hereby irrevocably submit to the exclusive jurisdiction of
the state and federal courts in the Wilmington, Delaware, in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement and in respect of the Transactions, and
hereby waive, and agree not to assert, as a defense in any Action for the
interpretation or enforcement hereof or thereof, that it is not subject thereto
or that such Action may not be brought or is not maintainable in said courts or
that the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the Parties irrevocably
agree that all claims with respect to such Action shall be heard and determined
in such a Delaware state or federal court.  The Parties hereby consent to and
grant any such court jurisdiction over the Person of such Parties and over the
subject matter of such dispute and agree that mailing of process or other papers
in connection with any such Action in the manner provided in Section 9.2 or in
such other manner as may be permitted by applicable Law, shall be valid and
sufficient service thereof.  With respect to any particular Action, venue shall
lie solely in the State of Delaware.

9.9.WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF ANY PARTY IN NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

9.10.Fees and Expenses.  Other than as expressly provided in Section 2.3,
Section 2.4 and ARTICLE VIII, each Party shall bear and pay all fees, costs and
expenses that have been incurred or that are incurred in the future by such
Party in connection with the Transactions, including all fees, costs and
expenses incurred by such Party in connection with or by virtue of: (a) the
negotiation, preparation and review of this Agreement (including the Disclosure
Schedule) and all agreements, certificates, opinions and other instruments and
documents delivered or to be delivered in connection herewith or therewith; (b)
the preparation and submission of any filing or notice required to be made or
given in connection with the Transactions; and (c) the consummation of the
Transactions.

9.11.Confidentiality.  It is understood and agreed by the Company, each Seller
and their respective counsel that this Agreement and all of its Schedules and
Exhibits, as well as its terms, and matters discussed in negotiating its terms
are confidential. It is therefore understood and agreed by the Company and each
Seller and their respective counsel that they will not (except as specifically
permitted under Section 7.2), and will cause their Affiliates not to, unless
required by a subpoena, court or applicable Law or the rules of a stock exchange
on which their securities are listed, reveal, discuss, publish or in any way

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communicate any terms of this Agreement, or the fact of the Agreement generally,
other than to state that the terms in the Agreement were satisfactory to all
Parties.  The foregoing shall not prohibit Seller from disclosing or discussing
any information that is made public by Buyer, in each case so long as such
disclosure or discussion does not extend beyond such information made public by
Buyer.

9.12.Limited Guarantee. Subject to the terms and conditions set forth in this
Agreement, including Section 8.2, Thomas A. Callaway hereby irrevocably and
unconditionally guarantees to Buyer, without right of set-off, the due and
punctual performance of all of the obligations of the Sellers hereunder.

9.13.Sellers’ Representative.  

(a)Each Seller acknowledges, ratifies and agrees to the appointment of Thomas A.
Callaway as the representative of such Seller (the “Sellers’ Representative”) in
connection with the acquisition of the Company by Buyer pursuant to the terms of
this Agreement.  The Sellers’ Representative will act as agent and
attorney-in-fact on behalf of each Seller with full power of substitution to act
in the name, place and stead of the Sellers with respect to, as applicable, the
transfer of the Purchased Shares owned by the Sellers to Buyer in accordance
with the terms and provisions of this Agreement, and to act on behalf of each
Seller in any litigation or arbitration involving this Agreement, do or refrain
from doing all such further acts and things, and execute all such documents as
the Sellers’ Representative shall deem necessary or appropriate in connection
with the transactions contemplated by this Agreement, including, without
limitation, the power:

(i)to act for the Sellers with regard to matters pertaining to indemnification
referred to in this Agreement, including the power to compromise any claim on
behalf of Sellers and to transact matters of litigation;

(ii)to execute and deliver any certificate, instrument and/or agreement that the
Sellers’ Representative deems necessary or appropriate in connection with the
consummation of the transactions contemplated by this Agreement;

(iii)to receive funds under this Agreement and give receipts for such funds, it
being understood that any such funds received by the Sellers’ Representative
under this Agreement on behalf of Sellers shall be distributed by the Sellers’
Representative to the Sellers in accordance with their respective Pre-Closing
Ownership Percentages as if such funds were distributed directly to such
Sellers;

(iv)to receive service of process in connection with any claims under this
Agreement; and

(v)to exercise any powers or otherwise act on behalf of the Sellers as
explicitly provided for in this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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

BUYER:

L.A.R.K. Industries, Inc. (d/b/a Residential Design Services)

By: /s/ Kendall R. Hoyd

Name: Kendall R. Hoyd  

Title:President

COMPANY:

T.A.C. Ceramic Tile Co.

By: /s/ Thomas A. Callaway

Name: Thomas A. Callaway

Title:President

 

SELLERS:

TAC & TAC Irrevocable Trust dated December 28, 2012

By: /s/ Robert J. Hughes

Name: Robert J. Hughes

Title:Trustee

 

 

Thomas A. Callaway Living Trust U/A dated December 28, 2012

 

 

By: /s/ Thomas A. Callaway

Name: Thomas A. Callaway

Title:Trustee

 

 

 

 

 

 

 

 

 

 

[Signature Page to Purchase Agreement]

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

SELLERS’ REPRESENTATIVE:

 

/s/ Thomas A. Callaway

Thomas. A. Callaway

 

[Signature Page to Purchase Agreement]

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Schedule A

Additional Defined Terms

Term

Definition

Adjusted EBITDA

The net income generated by the operation of the Earn-Out Business during the
12-month period beginning the first full month after the Closing Date before
interest expense, income tax expense, depreciation expense and intangible asset
amortization expense, calculated in accordance with GAAP, and to the extent in
accordance with GAAP, consistently applied in accordance with past practices and
in accordance with normal year end cut-off practices, plus (or minus) any
adjustments that are reasonably required to remove the effect of any one-time or
non-recurring expenses or income during such period and/or are consistent with
adjustments that an independent and nationally recognized accounting firm would
reasonably be expected to make in the course of preparing a “quality of earnings
analysis” for a potential arm’s length purchaser of the Company.  

Adjusted EBITDA Threshold

$11,528,200.57.

Ancillary Transaction Documents

Collectively, the Escrow Agreement, the Restrictive Covenant Agreements, the
Commercial Lease, the Funds Flow Memo, the other documents, certificates,
affidavits and agreements delivered pursuant to Section 3.2.

Balance Sheet Date

November 30, 2018.

Basket Amount

An amount equal to 0.5% of Enterprise Value.

Business

Sale and installation of tile products, hardwood flooring, carpet and vinyl.

Buyer

L.A.R.K. Industries, Inc. (d/b/a Residential Design Services).

Closing Effective Time

12:01 a.m. Eastern time on the Closing Date.

Contract Materiality Threshold

$25,000 per annum.

Earn-Out Business

The Business as conducted by Seller immediately prior to the Closing; and for
the avoidance of doubt, excluding any other products or services sold by Buyer
or any of Buyer’s Affiliates.

Earn-Out End Date

The date which is 12 months following the first full month after the Closing
Date.  

Earn-Out Statement Delivery Deadline

The date which is 90 days following the Earn-Out End Date.

Schedule A-1

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

 

Enterprise Value

$41,405,300.

Escrow Agent

Citibank N.A.

Escrow Agreement

The Escrow Agreement, dated as of the Closing Date, by and among Seller, Buyer
and the Escrow Agent.

Escrow Amount

$5,000,000.

Financial Statements

Collectively: (a) the audited consolidated balance sheet of the Company as of
the last day immediately preceding the current fiscal year and the related
audited consolidated statement of income and Sellers’ equity and cash flow of
the Company for the fiscal year then-ended; and (b) the unaudited consolidated
interim balance sheet of the Company as of the Balance Sheet Date and the
related unaudited consolidated statements of income and the Company’s equity and
cash flow of the Company for the fiscal year-to-date period then-ended.

Knowledge Group Members

Thomas A. Callaway, Tom Latkanich, Ron Adams, Teresa Callaway.

Net Working Capital Amount

An amount equal to the sum of: (a) the Company’s consolidated total current
assets (as defined by and determined in accordance with GAAP); minus (b) the
Company’s consolidated total current liabilities (as defined by and determined
in accordance with GAAP); in each case corresponding to the categories and line
items set forth on the illustrative calculation of the Net Working Capital
Amount set forth on Schedule E.  For purposes of calculating the Net Working
Capital Amount and for the avoidance of doubt, the Company’s consolidated total
current liabilities shall include only those items listed as current assets or
current liabilities on Schedule E.

Neutral Accountant

Baker Tilly (or, if such firm shall decline or is unable to act, another
independent Neutral Accountant of national reputation reasonably acceptable to
Seller and Buyer).

Restricted Parties

Thomas A. Callaway.

Restrictive Covenant Agreement

A Restrictive Covenant Agreement in the form provided by Buyer and reasonably
acceptable to the Company and each Restricted Party, to be executed by the
Company and each Restricted Party in favor of Buyer.

Special Matters

Indemnification claims made pursuant to Section 8.1(a)(iii)-(x).

Target Net Working Capital Amount

$9,697,000.

Virtual Data Room

The “Tango Alpha Charlie 1” virtual data room folder hosted by Microsoft
OneDrive in connection with the Transactions.

 

Schedule A-2