Exhibit 10.5

 

Execution Copy

 

AMENDED AND RESTATED PURCHASE AGREEMENT

 

THIS AMENDED AND RESTATED PURCHASE AGREEMENT (as amended, this “Agreement”) is
made and entered into as of January 15, 2008 by and among Answers Corporation, a
Delaware corporation (the “Purchaser”) and Brian Kariger, as the Sellers
Representative. Certain capitalized terms used in this Agreement are defined in
Exhibit A.

 

RECITALS

 

A.            Lexico Publishing Group, LLC, a California limited liability
company (the “Company”), Brian Kariger, as trustee of the Brian Patrick Kariger
Charitable Remainder Unitrust Trust dated April 9, 2007, Brian Kariger, as
trustee of the Brian Patrick Kariger Revocable Trust dated February 9, 2007, and
Daniel Fierro (collectively, the “Sellers”), the Sellers Representative, and the
Purchaser entered into a Purchase Agreement, dated as of July 13, 2007, as
amended by the First Amendment to the Purchase Agreement dated July 31, 2007 as
amended by the Second Amendment to the Purchase Agreement dated November 12,
2007 (the “Original Purchase Agreement”), which the parties wish to further
amend and restate;

 

B.            Each of the Sellers owns such percentage of Company’s Membership
Interest, which includes the Economic Interest, as set forth opposite such
Seller’s name on Schedule A attached hereto (collectively, the “Interests”), in
each case free and clear of any Encumbrances, which Interests represents all of
the outstanding Membership Interests of the Company;

 

C.            The Purchaser desiring to purchase, and the Sellers desiring to
sell, all of the Interests, at the Closing, and, upon consummation of such sale,
that the Purchaser shall become the sole owner of the Company, as more fully set
forth herein, have entered into the Original Purchase Agreement;

 

D.            The Members of the Company have unanimously approved and
authorized the execution, delivery and performance of this Agreement and the
transaction contemplated hereby, including, the Purchaser’s admission to the
Company as a Member at the Closing;

 

E.             As a material inducement to the willingness of Purchaser to enter
into this Agreement, the parties hereto and the Escrow Agent executed the Bonus
Plan/Documents Escrow Agreement, as amended, pursuant to which, inter alia, the
Sellers have deposited with the Escrow Agent instruments evidencing the transfer
of their Interests to the Purchaser at the Closing, to be held by the Escrow
Agent for the benefit of the Sellers and the Purchaser, in order to facilitate
the Closing;

 

F.             As a material inducement to the willingness of Purchaser to enter
into this Agreement, the parties hereto and the Escrow Agent executed an
Indemnity Escrow Agreement in order to facilitate the indemnification
obligations contemplated by this Agreement, which the parties wish to amend so
as to provide that such agreement shall automatically terminate if Purchaser
elects to effect the Holdback with respect to the entire Escrow Amount, as set
forth in Section 1.3.2 hereto;

 

F.             Concurrently with the Closing of this Agreement, provided
Purchaser elected to effect the Holdback: (i) the parties hereto shall enter
into the that certain Pledge and Security Agreement, in the form attached hereto
as Exhibit E (as amended, the “Pledge and Security Agreement”), and (ii) the
parties hereto and Interlachen Convertible Investments Limited, in its capacity
as collateral agent of the Senior Debt, shall enter into the Subordination
Agreement, in the form attached hereto as Exhibit F (as amended, the
“Subordination Agreement”); and

 

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H.            The Parties wish to amend and restate the Original Purchase
Agreement in its entirety, as set forth herein, in accordance with Section 10.5
of the Original Purchase Agreement, pursuant to which such amendment and
restatement may be made with the written consent of Purchaser and the Sellers
Representative and shall be binding upon the Parties and their respective
successors and assignees.

 

NOW THEREFORE, in consideration of the premises and of the mutual promises,
covenants, representations and warranties made in this Agreement, the Purchaser,
the Company and the Sellers, intending to be legally bound, hereby agree as
follows:

 

1.             SALE AND PURCHASE.

 

1.1.             SALE AND PURCHASE OF THE INTERESTS. SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, AT THE CLOSING, (A) THE SELLERS SHALL EACH SELL,
CONVEY, ASSIGN AND TRANSFER HIS INTERESTS TO PURCHASER, FREE AND CLEAR OF ALL
ENCUMBRANCES, (B) THE PURCHASER SHALL PURCHASE AND ACCEPT THE INTERESTS FROM THE
SELLERS, (C) THE SELLERS SHALL EACH WITHDRAW AS A MEMBER OF THE COMPANY, AND
(D) THE PURCHASER SHALL BE ADMITTED AS THE SOLE MEMBER OF THE COMPANY WITH
RESPECT TO THE INTERESTS. ALL INTERESTS TOGETHER SHALL BE PURCHASED BY THE
PURCHASER AND UNDER NO CIRCUMSTANCES SHALL ONLY PART OF THE INTERESTS BE
PURCHASED BY THE PURCHASER.

 

1.2.             PURCHASE PRICE.

 

1.2.1.          AS FULL CONSIDERATION FOR THE SALE, CONVEYANCE, ASSIGNMENT AND
TRANSFER OF THE INTERESTS TO PURCHASER, FREE AND CLEAR OF ALL ENCUMBRANCES, AND
ALL OF THE OBLIGATIONS, COVENANTS AND CONDITIONS CONTAINED IN THIS AGREEMENT,
(I) AT CLOSING, PURCHASER SHALL DEPOSIT IN A BANK ACCOUNT IN THE NAME OF THE
ESCROW AGENT AN AGGREGATE AMOUNT EQUAL TO $80,000,000 (SUBJECT TO ADJUSTMENTS IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 1.2.2) (THE “PURCHASE PRICE”), TO BE
IMMEDIATELY THEREAFTER TRANSFERRED BY THE ESCROW AGENT TO THE SELLERS, PRO-RATA
IN ACCORDANCE WITH THE PERCENTAGE MEMBERSHIP INTEREST HELD BY EACH SELLER AS SET
FORTH IN SCHEDULE A; (II) THE AMOUNT OF FORFEITED EMPLOYEE BONUS AMOUNT (IF ANY)
SHALL BE TRANSFERRED AND PAID TO THE SELLERS, PRO-RATA IN ACCORDANCE WITH THE
PERCENTAGE MEMBERSHIP INTEREST HELD BY EACH SELLER AS SET FORTH IN SCHEDULE A,
IN THE MANNER SET FORTH IN SECTION 1.4.2 (SUCH AMOUNT, IF ANY, THE “SECOND
INSTALLMENT”) AND (III) THE ESCROW FUND REMAINING (IF ANY) AFTER DEDUCTING ANY
INDEMNIFIABLE DAMAGES PURSUANT TO SECTION 9 SHALL BE TRANSFERRED AND PAID TO THE
SELLERS, PRO-RATA IN ACCORDANCE WITH THE PERCENTAGE MEMBERSHIP INTEREST HELD BY
EACH SELLER AS SET FORTH IN SCHEDULE A, IN THE MANNER SET FORTH IN SECTION 9
(SUCH AMOUNT, IF ANY, THE “THIRD INSTALLMENT”, AND TOGETHER WITH THE PURCHASE
PRICE, AND SECOND INSTALLMENT, THE “AGGREGATE PURCHASE PRICE”).

 

1.2.2.          NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE CLOSING, THE
COMPANY SHALL PREPARE IN GOOD FAITH AND DELIVER TO THE PURCHASER (WITH A
DUPLICATE COPY TO THE ESCROW AGENT) A CERTIFICATE IN THE FORM ATTACHED HERETO AS
SCHEDULE 1.2.2 (THE “ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE”) SETTING FORTH,
IN REASONABLE DETAIL, THE ESTIMATED CLOSING NET WORKING CAPITAL (TOGETHER WITH
THE COMPANY’S BALANCE SHEET) AND THE TRANSACTION EXPENSES, EACH AS OF THE
CLOSING.  THE COMPANY SHALL DELIVER TO PURCHASER, TOGETHER WITH THE ESTIMATED
CLOSING ADJUSTMENT CERTIFICATES, ALL THE SUPPORTING WORK PAPERS PREPARED FOR THE
CALCULATION OF THE AMOUNTS STATED THEREIN AND SUCH OTHER SUPPORTING
DOCUMENTATION AS PURCHASER SHALL REASONABLY REQUEST. THE ESTIMATED CLOSING
ADJUSTMENTS CERTIFICATE SHALL BE DEEMED TO BE A REPRESENTATION AND WARRANTY OF
THE SELLERS HEREUNDER.  THE PURCHASE PRICE SHALL BE SUBJECT TO THE FOLLOWING
ADJUSTMENTS:

 

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1.2.2.1.          THE PURCHASE PRICE SHALL BE REDUCED, ON A DOLLAR FOR DOLLAR
BASIS, BY THE AMOUNT, IF ANY, BY WHICH THE CLOSING NET WORKING CAPITAL IS LESS
THAN $650,000 (WITH ANY NEGATIVE RESULT, I.E. THE ESTIMATED CLOSING NET WORKING
CAPITAL BEING IN EXCESS OF $650,000, TREATED IN ACCORDANCE WITH
SECTION 1.2.2.2), AS SET FORTH IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE.

 

1.2.2.2.          IN THE EVENT THAT THE CLOSING NET WORKING CAPITAL AS SET FORTH
IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE IS IN EXCESS OF $650,000, THEN,
AT THE SELLERS’ ELECTION, SUCH EXCESS AMOUNT SHALL BE: (I) ADDED TO THE PURCHASE
PRICE, ON A DOLLAR FOR DOLLAR BASIS, OR (II) PERMITTED TO BE DECLARED AND PAID
AS DIVIDENDS BY THE COMPANY TO THE SELLERS PRIOR TO OR CONCURRENTLY WITH THE
CLOSING. SELLERS MAY ELECT EITHER OF THE MANNERS OF PAYMENTS SET FORTH IN
CLAUSES (I) OR (II) ABOVE, OR A COMBINATION THEREOF THAT HAS THE RESULT OF
MAKING THE FULL PAYMENT OF SUCH EXCESS AMOUNT TO THE SELLERS.

 

1.2.2.3.          THE PURCHASE PRICE SHALL BE REDUCED, ON A DOLLAR FOR DOLLAR
BASIS, BY THE AMOUNT OF ANY TRANSACTION EXPENSES OUTSTANDING AT THE CLOSING, AS
SET FORTH IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE.

 

FAILURE OF THE COMPANY TO TIMELY AND DULY DELIVER THE ESTIMATED CLOSING
ADJUSTMENTS CERTIFICATE MAY BE WAIVED BY PURCHASER, IN ITS SOLE DISCRETION
(WITHOUT DEROGATING FROM ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, UNDER SECTION 9).

 

1.3.             ESCROW; HOLDBACK.  THE SELLERS HEREBY AGREE THAT THE ESCROW
AMOUNT SHALL NOT BE PAID TO THE SELLERS AT THE CLOSING, BUT INSTEAD, AT THE
ELECTION OF THE PURCHASER, SHALL BE EITHER (OR IN A COMBINATION OF THE
FOLLOWING):

 

1.3.1.          HELD BACK (IN WHOLE OR IN PART WITH RESPECT TO ANY PORTION OF
THE ESCROW AMOUNT NOT DEPOSITED IN ESCROW PURSUANT TO SECTION 1.3.2 BELOW) BY
THE PURCHASER TO OFFSET ANY AMOUNT DUE BY SELLERS UNDER SECTIONS 1.2 AND 9
HEREOF (THE “HOLDBACK”), AND THE REMAINING AMOUNT SHALL BE PAID (IF ANY) TO THE
SELLERS, TOGETHER WITH INTEREST THEREON AT THE RATE OF 7% PER ANNUM ON THE
ESCROW AMOUNT, COMPUTED ON THE BASIS OF ACTUAL NUMBER OF DAYS ELAPSED OVER A
360-DAY YEAR, UPON THE SECOND ANNIVERSARY OF THE CLOSING (THE “HOLDBACK RELEASE
DATE”) PURSUANT TO SECTION 9 HEREOF. IN THE EVENT THAT THE PURCHASER ELECTS TO
EFFECT THE HOLDBACK, THEN: (I) IF THE HOLDBACK IS EFFECTED WITH RESPECT TO WITH
RESPECT TO THE ENTIRE ESCROW AMOUNT, THE INDEMNITY ESCROW AGREEMENT SHALL
AUTOMATICALLY TERMINATE, WITHOUT THE NEED OF ANY ACTION FROM ANY PARTY THERETO,
AND BE OF NO FORCE AND EFFECT, AND THE PARTIES HERETO, ACTING PURSUANT TO
SECTION 4(B) OF THE INDEMNITY ESCROW AGREEMENT, HEREBY AGREE THAT THE INDEMNITY
ESCROW AGREEMENT SHALL BE DEEMED TO HAVE BEEN AMENDED TO THIS EFFECT; AND
(II) THE PARTIES SHALL ENTER INTO THE PLEDGE AND SECURITY AGREEMENT AND (IF THE
PURCHASER PURCHASES ANY SENIOR NOTES) THE SUBORDINATION AGREEMENT WITH RESPECT
TO THE ESCROW AMOUNT SUBJECT TO HOLDBACK; AND/OR

 

1.3.2.          RETAINED (IN WHOLE OR IN PART WITH RESPECT TO ANY PORTION OF THE
ESCROW AMOUNT NOT HELD BACK PURSUANT TO SECTION 1.3.1 ABOVE) BY THE ESCROW AGENT
IN A SEPARATE BANK ACCOUNT IN THE NAME OF THE ESCROW AGENT, TO BE HELD BY THE
ESCROW AGENT PURSUANT TO THE INDEMNITY ESCROW AGREEMENT, TO SECURE THE
OBLIGATIONS OF THE SELLERS UNDER SECTIONS 1.2 AND 9 HEREOF (THE “INDEMNITY
ESCROW”), AND THE REMAINING AMOUNTS SHALL BE PAID (IF ANY) TO THE SELLERS UPON
THE LAPSE OF THE ESCROW PERIOD PURSUANT TO SECTION 9 HEREOF.  IN THE EVENT THAT
THE PURCHASE ELECTS TO EFFECT THE INDEMNITY ESCROW WITH RESPECT TO THE ENTIRE
ESCROW AMOUNT, THEN THE PLEDGE AND SECURITY AGREEMENT AND SUBORDINATION
AGREEMENT SHALL BE OF NO FORCE AND EFFECT.

 

1.3.3.          NOTWITHSTANDING SECTIONS 1.3.1 AND 1.3.2 ABOVE, IN THE EVENT THE
UNDERWRITERS OF THE OFFERING EXERCISE THEIR OVER-ALLOTMENT OPTION, IN WHOLE OR
IN PART, RESULTING IN ADDITIONAL OFFERING PROCEEDS (THE “OVERALLOTMENT
PROCEEDS”), (I) THE PURCHASER HEREBY AGREES TO USE THE OVERALLOTMENT

 

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Proceeds to effect the Indemnity Escrow up to the entire Escrow Amount; (ii) the
Escrow Amount subject to the Indemnity Escrow will not bear interest pursuant to
Section 1.3.1 above, and will instead be governed by the Indemnity Escrow
Agreement; and (iii) any Overallotment Proceeds in excess of the Escrow Amount
shall be retained by the Purchaser.

 

1.4.             EMPLOYEES BONUS PLAN; FORFEITED EMPLOYEE BONUS AMOUNT.

 

1.4.1.          AT THE CLOSING, PURCHASER SHALL DEPOSIT WITH THE ESCROW AGENT
THE EMPLOYEE BONUS AMOUNT, TO BE HELD PURSUANT TO THE BONUS PLAN/DOCUMENTS
ESCROW AGREEMENT.  THE PORTION OF THE EMPLOYEE BONUS AMOUNT TO BE PAID AT
CLOSING SHALL BE TRANSFERRED BY THE ESCROW AGENT TO THE COMPANY FOR THE PURPOSE
OF MAKING PAYMENTS UNDER THE EMPLOYEE BONUS PLAN AS SOON AS PRACTICABLE AFTER
THE CLOSING. THE EMPLOYEES ENTITLED TO PARTICIPATE IN THE EMPLOYEE BONUS PLAN,
AND THEIR BONUS AMOUNTS, SHALL BE DETERMINED BY THE SELLERS, WITH PURCHASER’S
PRIOR WRITTEN CONSENT.  THE TIMING AND CONTENT OF THE NOTICE TO ELIGIBLE
PARTICIPANTS SHALL BE COORDINATED WITH PURCHASER IN ADVANCE AND BE SUBJECT TO
PURCHASER’S PRIOR CONSENT.

 

1.4.2.          ANY PORTION OF THE EMPLOYEE BONUS AMOUNT (IF ANY), INCLUDING
INTEREST ACCRUED THEREON (IF ANY), WHICH THE PARTICIPANTS IN THE EMPLOYEE BONUS
PLAN SHALL NOT BE ENTITLED TO RECEIVE IN ACCORDANCE WITH THE TERMS AND
CONDITIONS THEREOF (THE “FORFEITED EMPLOYEE BONUS AMOUNT”), SHALL BE PAID TO THE
SELLERS, PRO-RATA IN ACCORDANCE WITH THE ALLOCATION OF THE PERCENTAGE MEMBERSHIP
INTEREST HELD BY EACH SELLER AS SET FORTH IN SCHEDULE A.  PAYMENT TO THE SELLERS
OF THE FORFEITED EMPLOYEE BONUS AMOUNT SHALL BE MADE IN ACCORDANCE WITH THE
BONUS PLAN/DOCUMENTS ESCROW AGREEMENT.  THE SELLERS SHALL NOT MAKE ANY PAYMENTS
FROM THE FORFEITED EMPLOYEE BONUS AMOUNTS TO CURRENT OR FORMER EMPLOYEES OF THE
COMPANY AFTER THE CLOSING.

 

1.5.             TAXES; WITHHOLDING.  PURCHASER, THE COMPANY AND THE ESCROW
AGENT SHALL EACH BE ENTITLED TO DEDUCT AND WITHHOLD FROM THE CASH OTHERWISE
DELIVERABLE UNDER THIS AGREEMENT, AND FROM ANY OTHER PAYMENTS OTHERWISE REQUIRED
PURSUANT TO THIS AGREEMENT SUCH AMOUNTS AS IT IS REQUIRED TO DEDUCT AND WITHHOLD
WITH RESPECT TO ANY SUCH DELIVERIES AND PAYMENTS UNDER THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED OR ANY PROVISION OF STATE, LOCAL, PROVINCIAL OR FOREIGN TAX
LAW AND TO REQUEST ANY NECESSARY TAX FORMS, INCLUDING IRS FORM W-9 OR THE
APPROPRIATE SERIES OF FORM W-8, AS APPLICABLE, OR ANY OTHER PROOF OF EXEMPTION
FROM WITHHOLDING OR ANY SIMILAR INFORMATION, FROM THE SELLERS AND ANY OTHER
RECIPIENT OF ANY PAYMENT HEREUNDER.  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 SUCH RECIPIENTS IN RESPECT OF WHICH SUCH
DEDUCTION AND WITHHOLDING WAS MADE.

 

1.6.             MANNER OF PAYMENT. THE PURCHASE PRICE SHALL BE PAID IN U.S.
DOLLARS. THE ESCROW AGENT SHALL BE INSTRUCTED TO TRANSFER THE PURCHASE PRICE BY
WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO SUCH BANK ACCOUNTS THE DETAILS
OF WHICH SHALL BE PROVIDED BY EACH OF THE SELLERS TO THE ESCROW AGENT, IN
ACCORDANCE WITH THE BONUS PLAN/DOCUMENTS ESCROW AGREEMENT.

 

2.     CLOSING.

 

2.1.             CLOSING DATE.  UNLESS THIS AGREEMENT IS EARLIER TERMINATED IN
ACCORDANCE WITH SECTION 8, THE DELIVERY BY THE PURCHASER OF THE PURCHASE PRICE
(SUBJECT TO ADJUSTMENTS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1.2.2) AND
THE EMPLOYEE BONUS AMOUNT TO THE ESCROW AGENT AND PURCHASER’S ADMISSION TO THE
COMPANY AS THE SOLE MEMBER THEREOF (THE “CLOSING”) AND ALL OTHER ACTIONS
SPECIFIED IN THIS AGREEMENT TO OCCUR AT THE CLOSING, SHALL TAKE PLACE AT THE
OFFICES OF MONTGOMERY & CO., LLC, 100 WILSHIRE BLVD., SUITE 400, SANTA MONICA,
CA 90401, ON THE DATE SPECIFIED BY PURCHASER WHICH WILL BE NO LATER THAN THE
FIFTH BUSINESS DAY AFTER THE DATE ON WHICH THE LAST OF THE CONDITIONS SET FORTH
IN SECTION 7 HAS BEEN SATISFIED OR WAIVED (IF PERMISSIBLE) (OTHER THAN THOSE
CONDITIONS THAT BY THEIR NATURE ARE TO BE

 

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satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions) or at such other time and place as Purchaser and the Sellers
Representative shall agree. The date on which the Closing occurs is herein
referred to as the “Closing Date”. All transactions to occur at the Closing
shall be deemed to take place simultaneously, and no transaction shall be deemed
to have been completed or any document delivered until all such transactions
have been completed and all required documents delivered.

 

2.2.             SELLERS DELIVERIES.

 

2.2.1.          SELLERS CLOSING DELIVERIES.  THE SELLERS SHALL DELIVER, OR CAUSE
TO BE DELIVERED, TO PURCHASER, AT OR PRIOR TO THE CLOSING, EACH OF THE FOLLOWING
(UNLESS DELIVERY OF ANY SUCH DOCUMENT HAS BEEN WAIVED BY PURCHASER, IN ITS SOLE
DISCRETION):

 

2.2.1.1.              A CERTIFICATE, DATED AS OF THE CLOSING DATE IN THE FORM
ATTACHED HERETO AS SCHEDULE 2.2.1.1, EXECUTED BY EACH OF THE SELLERS, ON BEHALF
OF THEMSELVES AND THE COMPANY, TO THE EFFECT THAT EACH OF THE CONDITIONS SET
FORTH IN SECTION 7.3 HAVE BEEN SATISFIED;

 

2.2.1.2.              A BRING DOWN WRITTEN OPINION FROM THE LEGAL COUNSEL(S) TO
THE SELLERS AND THE COMPANY AND ADDRESSED TO PURCHASER, THAT THE WRITTEN
OPINIONS RENDERED ON THE DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT, IN THE
FORM ATTACHED HERETO AS EXHIBIT D, ARE TRUE AND CORRECT AS OF THE CLOSING DATE,
AS THOUGH MADE ON AND AS OF SUCH DATE;

 

2.2.1.3.              A CERTIFICATE EXECUTED BY EACH OF THE SELLERS, ON BEHALF
OF THE COMPANY, IN THE FORM ATTACHED HERETO AS SCHEDULE 2.2.1.3 AND IN SUBSTANCE
SATISFACTORY TO PURCHASER, SETTING FORTH AND CERTIFYING THE COMPANY’S AGGREGATE
LIABILITY FOR TRANSACTION EXPENSES AS OF THE CLOSING DATE (INCLUDING ALL
TRANSACTION EXPENSES PAID BY THE COMPANY THROUGH SUCH DATE), ACCOMPANIED BY SUCH
SUPPORTING DOCUMENTATION, INFORMATION AND CALCULATIONS AS ARE NECESSARY FOR
PURCHASER TO VERIFY AND DETERMINE THE AMOUNT OF SUCH TRANSACTION EXPENSES AS OF
THE CLOSING DATE;

 

2.2.1.4.              ALL OTHER DOCUMENTS EXPRESSLY REQUIRED TO BE DELIVERED AT
OR PRIOR TO CLOSING PURSUANT TO THE SELLERS’ OBLIGATIONS HEREUNDER.

 

2.2.2.          SELLERS SIGNING DELIVERIES.  CONCURRENTLY WITH THE EXECUTION OF
THIS AGREEMENT, THE SELLERS HAVE DELIVERED, OR CAUSE TO BE DELIVERED, EACH OF
THE FOLLOWING:

 

2.2.2.1.              TO THE ESCROW AGENT:

 

(I)                    INSTRUMENTS OF TRANSFER OF MEMBERSHIP INTERESTS, VALIDLY
EXECUTED BY EACH OF THE SELLERS, EVIDENCING THE TRANSFER OF HIS MEMBERSHIP
INTEREST TO THE PURCHASER, FREE AND CLEAN OF ANY ENCUMBRANCE (DATED BLANK);

 

(II)                   SPOUSAL CONSENT TO THE TRANSFER OF MEMBERSHIP INTERESTS,
VALIDLY EXECUTED BY THE SPOUSE OF EACH OF THE SELLERS (IF APPLICABLE), RELATING
TO THE TRANSFER OF MEMBERSHIP INTEREST TO THE PURCHASER (DATED BLANK);

 

(III)                  THE LIST OF COMPANY’S MEMBERS MAINTAINED PURSUANT TO
SECTION 17058(A)(1) OF THE CALIFORNIA CORPORATIONS CODE, EVIDENCING THE
WITHDRAWAL OF THE SELLERS AS MEMBERS AND THE ADMISSION OF THE PURCHASER AS THE
SOLE MEMBER (WITH THE DATE OF ADMISSION BLANK); AND

 

(IV)                 SIGNATURES OF THE SELLERS TO THE SUBORDINATION AGREEMENT.

 

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AT THE CLOSING, THE ESCROW AGENT SHALL, AUTOMATICALLY, AND WITHOUT ANY FURTHER
ACTION REQUIRED BY EITHER PARTY (AND THE PARTIES HEREBY IRREVOCABLY INSTRUCT THE
ESCROW AGENT TO) DATE THE DOCUMENTS SPECIFIED IN THIS SECTION 2.2.2.1 AS OF THE
CLOSING DATE AND DELIVER THEM TO THE PURCHASER.

 

2.2.2.2.              TO THE PURCHASER, A WRITTEN OPINION FROM THE LEGAL COUNSEL
TO THE SELLERS AND THE COMPANY, IN THE FORM ATTACHED HERETO AS EXHIBIT D, DATED
AS OF THE DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT AND ADDRESSED TO THE
PURCHASER.

 

2.3.             EXPENSES.  WHETHER OR NOT THE CLOSING OCCURS, SUBJECT TO
SECTION 8.3.1, THE SELLERS SHALL BE RESPONSIBLE FOR THE PAYMENT OF ALL
TRANSACTION EXPENSES THEY HAVE INCURRED OR WILL INCUR OR THAT THE COMPANY HAS
INCURRED AT OR PRIOR TO CLOSING, IN CONNECTION WITH THE NEGOTIATION, EXECUTION
AND DELIVERY OF THIS AGREEMENT AND CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY (AND, IF THE CLOSING OCCURS, THE SELLERS SHALL REIMBURSE THE COMPANY TO
THE EXTENT ANY SUCH COSTS WERE PAID BY THE COMPANY). PURCHASER SHALL BE
RESPONSIBLE FOR THE PAYMENT OF COSTS (INCLUDING LEGAL AND ACCOUNTING FEES) IT
HAS INCURRED AND WILL INCUR IN CONNECTION WITH THE EXECUTION AND DELIVERY OF
THIS AGREEMENT AND CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

2.4.             FURTHER ACTION.  THE SELLERS SHALL AT ANY TIME AND FROM TIME TO
TIME UPON THE REQUEST OF THE PURCHASER EXECUTE, ACKNOWLEDGE AND DELIVER, OR
CAUSE TO BE EXECUTED, ACKNOWLEDGED AND DELIVERED, ALL SUCH FURTHER ASSIGNMENTS,
INSTRUMENTS OF SALE AND TRANSFER AND OTHER DOCUMENTS AS MAY BE REASONABLY
REQUIRED FOR THE ASSIGNING AND TRANSFERRING TO THE PURCHASER OR ITS SUCCESSORS
AND ASSIGNS FULL RIGHT, TITLE TO, AND INTEREST IN, THE INTERESTS, AND FOR THE
PURPOSE OF CARRYING OUT THE INTENT OF THIS AGREEMENT.

 

3.             REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANY

 

SUBJECT TO THE DISCLOSURES SET FORTH IN THE DISCLOSURE SCHEDULE, THE SELLERS AND
THE COMPANY HEREBY REPRESENT AND WARRANT TO PURCHASER AS FOLLOWS:

 

3.1.             ORGANIZATION, STANDING AND POWER.

 

3.1.1.          THE COMPANY IS A LIMITED LIABILITY COMPANY DULY ORGANIZED,
VALIDLY EXISTING AND, TO THE EXTENT THAT SUCH JURISDICTION RECOGNIZES THE
CONCEPT OF GOOD STANDING, IS IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION
OF ORGANIZATION.  THE COMPANY HAS ALL NECESSARY POWER AND AUTHORITY TO OWN AND
USE ITS ASSETS IN THE MANNER IN WHICH ITS ASSETS ARE CURRENTLY OWNED AND USED,
CONDUCT ITS BUSINESS IN THE MANNER IN WHICH ITS BUSINESS IS CURRENTLY BEING
CONDUCTED, AND TO PERFORM ITS OBLIGATIONS UNDER ALL CONTRACTS BY WHICH IT IS
BOUND.  THE COMPANY IS DULY QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING IN
EACH JURISDICTION WHERE THE FAILURE TO BE SO QUALIFIED AND IN GOOD STANDING,
INDIVIDUALLY OR IN THE AGGREGATE WITH ANY SUCH OTHER FAILURES, WOULD REASONABLY
BE EXPECTED TO BE MATERIAL TO THE COMPANY.

 

3.1.2.          THE COMPANY HAS DELIVERED TO PURCHASER A TRUE AND CORRECT COPY
OF ITS CHARTER DOCUMENTS, AS IN EFFECT ON THE DATE OF SIGNING THE ORIGINAL
PURCHASE AGREEMENT.  THE CHARTER DOCUMENTS CONSTITUTE THE SOLE AND EXCLUSIVE
GOVERNING DOCUMENT OF THE COMPANY. THE COMPANY IS NOT IN VIOLATION OF ANY OF THE
PROVISIONS OF ITS CHARTER DOCUMENTS.

 

3.1.3.          EACH SELLER THAT IS NOT A NATURAL PERSON IS DULY ORGANIZED,
VALIDLY EXISTING AND IS NOT IN VIOLATION OF ANY OF THE PROVISIONS OF ITS
FORMATION DOCUMENTS.

 

3.2.             NO SUBSIDIARIES; NO OFFICERS. THE COMPANY DOES NOT DIRECTLY OR
INDIRECTLY OWN ANY EQUITY OR SIMILAR INTEREST IN, OR ANY INTEREST CONVERTIBLE OR
EXCHANGEABLE OR EXERCISABLE FOR, ANY EQUITY OR SIMILAR INTEREST IN, ANY PERSON.
THE SELLERS (IN THEIR CAPACITIES AS MEMBERS, OR THE BENEFICIAL HOLDERS OF THE

 

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INTERESTS) ARE MANAGING THE COMPANY, AND THERE ARE NO OTHER MANAGING MEMBERS,
DIRECTORS OR OFFICERS.

 

3.3.             CAPITAL STRUCTURE.

 

3.3.1.          THE INTERESTS CONSTITUTE ALL OF THE MEMBERSHIP INTERESTS OF THE
COMPANY AND ARE OWNED OF RECORD AND BENEFICIALLY SOLELY BY THE SELLERS, FREE AND
CLEAR OF ANY ENCUMBRANCES.  THE SELLERS HAVE NOT SOLD, PLEDGED OR OTHERWISE
TRANSFERRED (WHETHER BY OPERATION OF LAW OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, TRANSFERS PURSUANT TO ANY DECREE OF DIVORCE OR SEPARATE MAINTENANCE,
ANY PROPERTY SETTLEMENT, ANY SEPARATION AGREEMENT OR ANY OTHER AGREEMENT WITH A
SPOUSE) ANY ECONOMIC INTERESTS IN THEIR INTEREST TO ANY OTHER PERSON. OTHER THAN
THE INTEREST, THERE ARE NO OTHER ISSUED AND OUTSTANDING RIGHTS, INTERESTS OF ANY
KIND OR OTHER SECURITIES OF THE COMPANY AND NO OUTSTANDING COMMITMENTS OR
CONTRACTS TO ISSUE ANY RIGHTS, INTERESTS OF ANY KIND OR OTHER SECURITIES OF THE
COMPANY. NO PERSON HAS ANY RIGHT TO, AND THERE IS NO CONDITION OR CIRCUMSTANCE
THAT COULD REASONABLY BE EXPECTED TO GIVE RISE TO OR PROVIDE A BASIS FOR THE
ASSERTION OF A VALID CLAIM BY ANY PERSON TO THE EFFECT THAT SUCH PERSON IS
ENTITLED TO, ACQUIRE RIGHTS, INTERESTS OF ANY KIND OR OTHER SECURITIES OF THE
COMPANY OR ANY OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE THE SAME, FROM THE
COMPANY OR FROM ANY MEMBER OF THE COMPANY. THE COMPANY HAS NO MEMBERS, OTHER
THAN THE SELLERS. THERE ARE NO OUTSTANDING CONTRIBUTIONS REQUIRED TO BE MADE BY
ANY MEMBER TO THE COMPANY. THE INTERESTS ARE DULY AUTHORIZED, VALIDLY ISSUED,
FULLY PAID AND NON-ASSESSABLE AND ARE FREE OF ANY ENCUMBRANCES, PREEMPTIVE
RIGHTS, RIGHTS OF FIRST REFUSAL OR “PUT” OR “CALL” RIGHTS CREATED BY ANY LEGAL
REQUIREMENTS, THE CHARTER DOCUMENTS OF THE COMPANY OR ANY CONTRACT TO WHICH THE
COMPANY OR ANY OF THE SELLERS IS A PARTY OR BY WHICH THE COMPANY OR ANY OF THE
SELLERS IS BOUND.  THE INTERESTS WERE ISSUED IN COMPLIANCE WITH ALL APPLICABLE
LEGAL REQUIREMENTS AND ALL REQUIREMENTS SET FORTH IN APPLICABLE CONTRACTS.

 

3.3.2.          THERE IS NO LIABILITY FOR DIVIDENDS ACCRUED AND UNPAID BY THE
COMPANY. ALL DISTRIBUTIONS WERE MADE IN COMPLIANCE WITH ALL APPLICABLE LEGAL
REQUIREMENTS.

 

3.3.3.          NO BONDS, DEBENTURES, NOTES OR OTHER INDEBTEDNESS OF THE COMPANY
(I) HAVING THE RIGHT TO VOTE ON ANY MATTERS ON WHICH MEMBERS MAY VOTE (OR WHICH
IS CONVERTIBLE INTO, OR EXCHANGEABLE FOR, SECURITIES HAVING SUCH RIGHT) OR
(II) THE VALUE OF WHICH IS ANY WAY BASED UPON OR DERIVED FROM MEMBERSHIP
INTEREST OR OTHER SECURITIES OF THE COMPANY, ARE ISSUED OR OUTSTANDING AS OF THE
DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT (COLLECTIVELY, “COMPANY VOTING
DEBT”).  THERE ARE NO OPTIONS, WARRANTS, CALLS, RIGHTS OR CONTRACTS OF ANY
CHARACTER TO WHICH THE COMPANY IS A PARTY OR BY WHICH IT IS BOUND OBLIGATING THE
COMPANY TO ISSUE, DELIVER, SELL, REPURCHASE OR REDEEM, OR CAUSE TO BE ISSUED,
DELIVERED, SOLD, REPURCHASED OR REDEEMED, ANY RIGHTS, INTERESTS OF ANY KIND OR
OTHER SECURITIES OF THE COMPANY, OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE
RIGHTS, INTERESTS OF ANY KIND OR OTHER SECURITIES OF THE COMPANY, OR ANY COMPANY
VOTING DEBT, OR OBLIGATING THE COMPANY TO GRANT, EXTEND, ACCELERATE THE VESTING
AND/OR REPURCHASE RIGHTS OF, CHANGE THE PRICE OF, OR OTHERWISE AMEND OR ENTER
INTO ANY SUCH OPTION, WARRANT, CALL, RIGHT OR CONTRACT.  THERE ARE NO CONTRACTS
RELATING TO VOTING (INCLUDING, VOTING TRUSTS OR PROXIES), PARTICIPATION IN THE
MANAGEMENT OF THE COMPANY, GRANTING THE RIGHT TO INFORMATION CONCERNING THE
BUSINESS AND AFFAIRS OF THE COMPANY, OR THE PURCHASE OR SALE OF ANY MEMBERSHIP
INTERESTS (I) BETWEEN OR AMONG THE COMPANY AND ANY OF ITS MEMBERS, OR
(II) BETWEEN OR AMONG ANY OF THE COMPANY’S MEMBERS.  THE COMPANY IS NOT UNDER
ANY OBLIGATION TO REGISTER UNDER THE SECURITIES ACT ANY MEMBERSHIP INTEREST OR
ANY OTHER SECURITIES OF THE COMPANY, WHETHER CURRENTLY OUTSTANDING OR THAT MAY
SUBSEQUENTLY BE ISSUED.

 

3.3.4.          THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT, OF ITSELF,
DISSOLVE THE COMPANY OR ENTITLE THE SELLERS OR ANY OTHER PERSON TO VOTE OR
PARTICIPATE IN THE MANAGEMENT AND AFFAIRS OF THE COMPANY OR TO BECOME OR
EXERCISE ANY RIGHTS OF A MEMBER.

 

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3.4.             TITLE TO THE INTEREST.  THERE ARE NO RESTRICTIONS ON THE
TRANSFER OF THE INTERESTS. THE SELLERS HAVE GOOD AND VALID TITLE TO THE
INTERESTS HELD BY THEM, FREE AND CLEAR OF ALL ENCUMBRANCES.  UPON DELIVERY OF
THE INTERESTS TO THE PURCHASER AND PAYMENT THEREFOR PURSUANT HERETO, GOOD AND
VALID TITLE TO THE INTERESTS, FREE AND CLEAR OF ALL ENCUMBRANCES WILL PASS TO
THE PURCHASER.

 

3.5.             AUTHORITY; NON-CONTRAVENTION.

 

3.5.1.          THE COMPANY AND EACH SELLER HAS ALL REQUISITE POWER AND
AUTHORITY TO ENTER INTO THIS AGREEMENT AND THE TRANSACTION AGREEMENTS TO WHICH
THEY ARE A PARTY, AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH OF THE
TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY, AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, HAVE BEEN DULY AUTHORIZED BY THE
COMPANY AND EACH SELLER THAT IS NOT A NATURAL PERSON.  THIS AGREEMENT AND EACH
OF THE TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY HAS BEEN DULY EXECUTED
AND DELIVERED BY THE COMPANY AND THE SELLERS AND CONSTITUTES THE VALID AND
BINDING OBLIGATION OF THE COMPANY AND THE SELLERS ENFORCEABLE AGAINST EACH OF
THEM IN ACCORDANCE WITH ITS TERMS, SUBJECT ONLY TO THE EFFECT, IF ANY, OF
(I) APPLICABLE BANKRUPTCY AND OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF
CREDITORS GENERALLY AND (II) RULES OF LAW GOVERNING SPECIFIC PERFORMANCE,
INJUNCTIVE RELIEF AND OTHER EQUITABLE REMEDIES.  THE MEMBERS OF THE COMPANY, BY
RESOLUTIONS DULY ADOPTED (AND NOT THEREAFTER MODIFIED OR RESCINDED) BY THE
UNANIMOUS VOTE THEREOF HAS APPROVED AND ADOPTED THIS AGREEMENT, AND NO OTHER
VOTE IS REQUIRED FOR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY..

 

3.5.2.          THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH OF THE
TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY BY THE COMPANY AND THE SELLERS
DOES NOT, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY, WILL NOT (I) RESULT IN THE CREATION OF ANY ENCUMBRANCE ON THE INTERESTS
OR ANY OF THE MATERIAL PROPERTIES OR ASSETS OF THE COMPANY, OR (II) 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 PROVISION OF
THE CHARTER DOCUMENTS OF THE COMPANY, AS AMENDED TO DATE, (B) ANY CONTRACT OF
THE COMPANY OR ANY CONTRACT APPLICABLE TO ANY OF THEIR RESPECTIVE MATERIAL
PROPERTIES, ASSETS OR TO THE INTERESTS, OTHER THAN AS SET FORTH IN SCHEDULE
3.5.2(II)(B) OF THE DISCLOSURE SCHEDULE, OR (C) ANY LEGAL REQUIREMENTS
APPLICABLE TO THE SELLERS, THE COMPANY OR ANY OF THEIR RESPECTIVE MATERIAL
PROPERTIES, ASSETS OR THE INTERESTS.

 

3.5.3.          NO CONSENT, APPROVAL, ORDER OR AUTHORIZATION OF, OR
REGISTRATION, DECLARATION OR FILING WITH, ANY GOVERNMENTAL ENTITY IS REQUIRED BY
OR WITH RESPECT TO THE COMPANY OR THE SELLERS IN CONNECTION WITH THE EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE TRANSACTION AGREEMENTS TO WHICH THEY
ARE A PARTY, OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, OR IN ORDER TO VEST IN THE PURCHASER GOOD AND MARKETABLE TITLE IN AND
TO ALL OF THE INTEREST UPON THE CLOSING, EXCEPT (TO THE EXTENT APPLICABLE) FOR
NOTIFICATION PURSUANT TO, AND EXPIRATION OR TERMINATION OF THE WAITING PERIOD
UNDER, THE HSR ACT. NEITHER SELLERS NOR THE COMPANY HAVE ANY KNOWLEDGE THAT THE
COMPANY WILL BE UNABLE TO CONTINUE TO OPERATE ITS BUSINESS FOLLOWING CLOSING IN
THE SAME MANNER AS CONDUCTED PRIOR TO THE CLOSING WITHOUT VIOLATING ANY COVENANT
OR AGREEMENT THAT BINDS THE COMPANY OR THE SELLERS.

 

3.5.4.          NO STATE TAKEOVER STATUTE OR SIMILAR LEGAL REQUIREMENT APPLIES
OR PURPORTS TO APPLY TO THIS AGREEMENT OR ANY OF TRANSACTIONS CONTEMPLATED
HEREBY.

 

3.6.             FINANCIAL STATEMENTS.

 

3.6.1.          SCHEDULE 3.6.1 OF THE DISCLOSURE SCHEDULE CONSISTS OF THE
FOLLOWING (REFERRED TO COLLECTIVELY AS THE “FINANCIAL STATEMENTS”) THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AS OF AND FOR THE FISCAL YEARS
ENDED DECEMBER 31, 2005 AND 2006 (INCLUDING, IN EACH CASE,

 

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balance sheets, income statements, statement of changes in shareholders equity
and statement of cash flows), together with the an audit opinion thereon of
independent auditors associated with one of the “Big 4” accounting firms.

 

3.6.2.          THE FINANCIAL STATEMENTS (I) ARE DERIVED FROM AND IN ACCORDANCE
WITH THE BOOKS AND RECORDS OF THE COMPANY, (II) COMPLIED AS TO FORM IN ALL
MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING REQUIREMENTS WITH RESPECT THERETO
AS OF THEIR RESPECTIVE DATES, (III) HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP
APPLIED ON A CONSISTENT BASIS THROUGHOUT THE PERIODS INDICATED AND CONSISTENT
WITH EACH OTHER, (IV) FAIRLY PRESENT THE CONSOLIDATED FINANCIAL CONDITION OF THE
COMPANY AT THE DATES THEREIN INDICATED AND THE CONSOLIDATED RESULTS OF
OPERATIONS AND CASH FLOWS OF THE COMPANY FOR THE PERIODS THEREIN SPECIFIED, AND
(V) ARE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS.

 

3.6.3.          THE COMPANY HAS NO OBLIGATIONS OR LIABILITIES OF ANY NATURE
(MATURED OR UN-MATURED, ABSOLUTE OR ACCRUED, FIXED OR CONTINGENT OR OTHERWISE)
OTHER THAN (I) THOSE SET FORTH OR ADEQUATELY PROVIDED FOR IN THE BALANCE SHEET
INCLUDED IN THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2006 (THE “COMPANY
BALANCE SHEET”), AND (II) THOSE INCURRED IN THE CONDUCT OF THE COMPANY’S
BUSINESS SINCE DECEMBER 31, 2006 (THE “COMPANY BALANCE SHEET DATE”) IN THE
ORDINARY COURSE, CONSISTENT WITH PAST PRACTICE, WHICH ARE OF THE TYPE THAT
ORDINARILY RECUR AND, 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.  EXCEPT FOR OBLIGATIONS AND LIABILITIES REFLECTED IN THE
FINANCIAL STATEMENTS, THE COMPANY HAS NO OFF BALANCE SHEET OBLIGATION OR
LIABILITY OF ANY NATURE (MATURED OR UN-MATURED, FIXED OR CONTINGENT) TO, OR ANY
FINANCIAL INTEREST IN, ANY THIRD PARTY OR ENTITIES (INCLUDING THE SELLERS AND
ANY OF THEIR AFFILIATES), 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 COMPANY
BALANCE SHEET HAVE BEEN ESTABLISHED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED
AND ARE ADEQUATE.

 

3.6.4.          THE COMPANY HAS ESTABLISHED AND MAINTAINS A SYSTEM OF INTERNAL
ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCES (I) THAT
TRANSACTIONS, RECEIPTS AND EXPENDITURES OF THE COMPANY ARE BEING EXECUTED AND
MADE ONLY IN ACCORDANCE WITH APPROPRIATE AUTHORIZATIONS OF MANAGEMENT OF
COMPANY, (II) THAT TRANSACTIONS ARE RECORDED AS NECESSARY (A) TO PERMIT
PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GAAP AND (B) TO MAINTAIN
ACCOUNTABILITY FOR ASSETS, (III) REGARDING PREVENTION OR TIMELY DETECTION OF
UNAUTHORIZED ACQUISITION, USE OR DISPOSITION OF THE ASSETS OF COMPANY, AND
(IV) THAT THE AMOUNT RECORDED FOR ASSETS ON THE BOOKS AND RECORDS OF THE COMPANY
IS COMPARED WITH THE EXISTING ASSETS AT REASONABLE INTERVALS AND APPROPRIATE
ACTION IS TAKEN WITH RESPECT TO ANY DIFFERENCES.  NEITHER THE COMPANY, COMPANY’S
INDEPENDENT AUDITORS, NOR TO THE COMPANY’S KNOWLEDGE, ANY CURRENT OR FORMER
EMPLOYEE, CONSULTANT OR MANAGER (OR DIRECTOR, AS THE CASE MAY BE) OF COMPANY,
HAS IDENTIFIED OR BEEN MADE AWARE OF ANY FRAUD, WHETHER OR NOT MATERIAL, THAT
INVOLVES COMPANY’S MANAGEMENT OR OTHER CURRENT OR FORMER EMPLOYEES, CONSULTANTS,
MANAGERS OF 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.  NEITHER THE COMPANY NOR, TO THE
COMPANY’S KNOWLEDGE, ANY MANAGER, OFFICER, EMPLOYEE, AUDITOR, ACCOUNTANT OR
REPRESENTATIVE OF THE COMPANY HAS RECEIVED OR OTHERWISE HAD OR OBTAINED
KNOWLEDGE OF ANY MATERIAL 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 COMPANY’S FINANCIAL
STATEMENTS.  NO ATTORNEY REPRESENTING THE COMPANY, WHETHER OR NOT EMPLOYED BY
THE COMPANY, HAS REPORTED TO COMPANY’S MANAGEMENT OR ANY COMMITTEE THEREOF OR TO
ANY MANAGER OR OFFICER OF THE COMPANY EVIDENCE OF A MATERIAL VIOLATION OF
SECURITIES LAWS, BREACH OF FIDUCIARY DUTY OR SIMILAR VIOLATION BY THE COMPANY OR
ANY OF ITS OFFICERS, MANAGERS, EMPLOYEES OR AGENTS.  THERE ARE NO SIGNIFICANT
DEFICIENCIES OR MATERIAL WEAKNESSES IN THE DESIGN OR OPERATION OF THE COMPANY’S
INTERNAL CONTROLS, WHICH COULD ADVERSELY AFFECT THE COMPANY’S ABILITY TO RECORD,
PROCESS, SUMMARIZE AND REPORT FINANCIAL DATA.  THERE HAS BEEN NO CHANGE IN THE
COMPANY ACCOUNTING POLICIES SINCE

 

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the Company’s inception, except as described in the Financial Statements.

 

3.6.5.          SCHEDULE 3.6.5 OF THE DISCLOSURE SCHEDULE SETS FORTH THE NAMES,
ACCOUNT NUMBER, ACCOUNT TYPE AND LOCATIONS OF ALL BANKS, TRUST COMPANIES,
SAVINGS AND LOAN ASSOCIATIONS AND OTHER FINANCIAL INSTITUTIONS AT WHICH THE
COMPANY MAINTAIN ACCOUNTS OF ANY NATURE AND THE NAMES OF ALL PERSONS AUTHORIZED
TO DRAW THEREON OR MAKE WITHDRAWALS THEREFROM.

 

3.6.6.          SCHEDULE 3.6.6 OF THE DISCLOSURE SCHEDULE ACCURATELY LISTS ALL
INDEBTEDNESS OF COMPANY FOR MONEY BORROWED (“COMPANY DEBT”), INCLUDING, FOR EACH
ITEM OF COMPANY DEBT, THE CONTRACT GOVERNING THE COMPANY DEBT, THE PERSON TO
WHOM IT IS OWED, THE INTEREST RATE, MATURITY DATE AND ANY ASSETS OR PROPERTIES
SECURING SUCH COMPANY DEBT.  ALL COMPANY DEBT MAY BE PREPAID AT THE CLOSING
WITHOUT PENALTY UNDER THE TERMS OF THE CONTRACTS GOVERNING SUCH COMPANY DEBT.

 

3.7.             ABSENCE OF CERTAIN CHANGES.  SINCE THE COMPANY BALANCE SHEET
DATE, THE COMPANY HAS CONDUCTED ITS BUSINESS ONLY IN THE ORDINARY COURSE
CONSISTENT WITH PAST PRACTICE AND:

 

3.7.1.          THERE HAS NOT BEEN ANY MATERIAL ADVERSE EFFECT WITH RESPECT TO
THE COMPANY, AND NO EVENT HAS OCCURRED OR CIRCUMSTANCE HAS ARISEN THAT, IN
COMBINATION WITH ANY OTHER EVENTS OR CIRCUMSTANCES, WOULD HAVE OR WOULD
REASONABLY BE EXPECTED TO HAVE OR RESULT IN A COMPANY MATERIAL ADVERSE EFFECT;

 

3.7.2.          THE COMPANY HAS NOT MADE NOR ENTERED INTO ANY CONTRACT OR LETTER
OF INTENT WITH RESPECT TO ANY ACQUISITION, SALE OR TRANSFER OF ANY ASSET OF THE
COMPANY (OTHER THAN THE SALE OR NONEXCLUSIVE LICENSE OF COMPANY PRODUCTS TO ITS
CUSTOMERS IN THE ORDINARY COURSE OF ITS BUSINESS CONSISTENT WITH ITS PAST
PRACTICE);

 

3.7.3.          EXCEPT AS REQUIRED BY GAAP, THERE HAS NOT OCCURRED ANY CHANGE IN
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;

 

3.7.4.          THERE HAS NOT OCCURRED ANY DECLARATION, SETTING ASIDE, OR
PAYMENT OF A DIVIDEND OR OTHER DISTRIBUTION WITH RESPECT TO ANY SECURITIES OF
THE COMPANY, OR ANY DIRECT OR INDIRECT REDEMPTION, PURCHASE OR OTHER ACQUISITION
BY THE COMPANY OF ANY OF ITS SECURITIES, OR ANY CHANGE IN ANY RIGHTS,
PREFERENCES, PRIVILEGES OR RESTRICTIONS OF ANY OF ITS OUTSTANDING SECURITIES,
EXCEPT PURSUANT TO SECTION  1.2.2.2 HEREOF;

 

3.7.5.          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;

 

3.7.6.          THERE HAS NOT OCCURRED ANY AMENDMENT OR CHANGE TO THE CHARTER
DOCUMENTS OF THE COMPANY;

 

3.7.7.          THERE HAS NOT OCCURRED ANY INCREASE IN OR MODIFICATION OF THE
COMPENSATION OR BENEFITS PAYABLE OR TO BECOME PAYABLE BY THE COMPANY TO ANY OF
ITS MANAGERS, OFFICERS, EMPLOYEES OR CONSULTANTS (OTHER THAN INCREASES IN THE
BASE SALARIES OF EMPLOYEES WHO ARE NOT OFFICERS IN AN AMOUNT THAT DOES NOT
EXCEED 3% OF SUCH BASE SALARIES), ANY MATERIAL MODIFICATION OF ANY “NONQUALIFIED
DEFERRED COMPENSATION PLAN” WITHIN THE MEANING OF SECTION 409A OF THE CODE AND
INTERNAL REVENUE SERVICE NOTICE 2005-1, OR ANY NEW LOANS OR EXTENSION OF
EXISTING LOANS TO ANY SUCH PERSONS (OTHER THAN ROUTINE EXPENSE ADVANCES TO
EMPLOYEES OF THE COMPANY CONSISTENT WITH PAST PRACTICE), AND THE COMPANY HAS NOT
ENTERED INTO ANY CONTRACT TO GRANT OR PROVIDE (NOR HAS GRANTED ANY) SEVERANCE,
ACCELERATION OF VESTING OR

 

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other similar benefits to any such Persons;

 

3.7.8.          THERE HAS NOT OCCURRED ANY CHANGE IN TITLE, OFFICE OR POSITION,
OR MATERIAL REDUCTION IN THE RESPONSIBILITIES OF, OR CHANGE IN IDENTITY WITH
RESPECT TO THE MANAGEMENT, SUPERVISORY OR OTHER KEY PERSONNEL OF THE COMPANY,
ANY TERMINATION OF EMPLOYMENT OF ANY SUCH EMPLOYEES, OR ANY LABOR DISPUTE OR
CLAIM OF UNFAIR LABOR PRACTICES INVOLVING THE COMPANY;

 

3.7.9.          THE COMPANY HAS NOT INCURRED, CREATED OR ASSUMED ANY ENCUMBRANCE
(OTHER THAN A PERMITTED ENCUMBRANCE) ON ANY OF ITS ASSETS OR PROPERTIES, ANY
LIABILITY OR OBLIGATION FOR BORROWED MONEY OR ANY LIABILITY OR OBLIGATION AS
GUARANTY OR SURETY WITH RESPECT TO THE OBLIGATIONS OF ANY OTHER PERSON;

 

3.7.10.        THE COMPANY HAS NOT PAID OR DISCHARGED ANY ENCUMBRANCE OR
LIABILITY WHICH WAS NOT SHOWN ON THE COMPANY BALANCE SHEET OR INCURRED IN THE
ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE SINCE THE COMPANY
BALANCE SHEET DATE;

 

3.7.11.        THE COMPANY HAS NOT INCURRED ANY LIABILITY TO ITS EMPLOYEES,
MANAGERS (OR DIRECTORS, AS THE CASE MAY BE), OFFICERS OR MEMBERS (OTHER THAN
LIABILITIES TO PAY COMPENSATION OR BENEFITS IN CONNECTION WITH SERVICES RENDERED
IN THE ORDINARY COURSE OF BUSINESS, CONSISTENT WITH PAST PRACTICE);

 

3.7.12.        THE COMPANY HAS NOT MADE ANY DEFERRAL OF THE PAYMENT OF ANY
ACCOUNTS PAYABLE OTHER THAN IN THE ORDINARY COURSE OF BUSINESS, CONSISTENT WITH
PAST PRACTICE, OR IN AN AMOUNT IN EXCESS OF $25,000, 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,

 

3.7.13.        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 ITS CUSTOMERS;

 

3.7.14.        THERE HAS BEEN NO MATERIAL DAMAGE, DESTRUCTION OR LOSS, WHETHER
OR NOT COVERED BY INSURANCE, AFFECTING THE ASSETS, PROPERTIES OR BUSINESS OF THE
COMPANY;

 

3.7.15.        THERE HAS BEEN NO MATERIAL CHANGE IN THE MONTHLY TRAFFIC METRICS
INFORMATION ON EACH COMPANY WEB SITE INDIVIDUALLY OR IN THE AGGREGATE, ACCORDING
TO THE PARAMETERS REQUESTED BY PURCHASER IN CONNECTION WITH
SCHEDULE 3.12.32(I) OF THE DISCLOSURE SCHEDULE OR IN THE NUMBER OF REGISTERED
USERS OF EACH OF COMPANY WEB SITE;

 

3.7.16.        THE COMPANY HAS NOT (I) SOLD, DISPOSED OF, TRANSFERRED OR
LICENSED TO ANY PERSON ANY RIGHTS TO ANY COMPANY IP RIGHTS (OTHER THAN LICENSES
OF COMPANY PRODUCTS IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE), (II) SOLD, DISPOSED OF, TRANSFERRED OR PROVIDED A COPY OF ANY COMPANY
SOURCE CODE TO ANY PERSON, (III) ESTABLISHED A SUBSIDIARY, OR (IV) HAS ACQUIRED
OR LICENSED FROM ANY PERSON ANY INTELLECTUAL PROPERTY (OTHER THAN LICENSES IN
THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE; AND

 

3.7.17.        THERE HAS NOT OCCURRED ANY ANNOUNCEMENT OF, ANY NEGOTIATION BY OR
ANY ENTRY INTO ANY CONTRACT BY THE COMPANY OR ANY SUBSIDIARY TO DO ANY OF THE
THINGS DESCRIBED IN THE PRECEDING CLAUSES 3.7.1 THROUGH 3.7.16 (OTHER THAN
NEGOTIATIONS AND AGREEMENTS WITH PURCHASER AND ITS REPRESENTATIVES REGARDING THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT).

 

3.8.             LITIGATION.  THERE IS NO PRIVATE OR GOVERNMENTAL ACTION, SUIT,
PROCEEDING, CLAIM, MEDIATION, ARBITRATION OR INVESTIGATION PENDING BEFORE ANY
GOVERNMENTAL ENTITY, OR THREATENED IN WRITING,

 

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or, to the knowledge of the Company, otherwise threatened against the Company or
any of its assets or properties or any of their respective managers, officers or
employees (in their capacities as such or relating to their employment, services
or relationship with the Company), nor, to the knowledge of the Company, is
there any reasonable basis for any such action, suit, proceeding, claim,
mediation, arbitration or investigation.  There is no judgment, decree,
injunction or order against the Company, any of its assets or properties, or, to
the knowledge of the Company, any of their respective managers, officers or
employees (in their capacities as such or relating to their employment, services
or relationship with the Company).  To the knowledge of the Company, there is no
reasonable basis for any Person to assert a claim against the Company based upon
the Company entering into this Agreement or any of the other transactions or
agreements contemplated hereby.  The Company has no action, suit, proceeding,
claim, mediation, arbitration or investigation pending against any other Person,
nor is it a party to, or subject to the provisions of, any judgment, order,
writ, injunction, decree or award of any court, arbitrator or governmental or
regulatory official, body or authority.

 

3.9.             RESTRICTIONS ON BUSINESS ACTIVITIES.  THERE IS NO CONTRACT,
JUDGMENT, INJUNCTION, ORDER OR DECREE BINDING UPON THE COMPANY WHICH HAS OR
WOULD REASONABLY BE EXPECTED TO HAVE, WHETHER BEFORE OR AFTER CONSUMMATION OF
THE TRANSACTION CONTEMPLATED HEREBY, THE EFFECT OF PROHIBITING OR IMPAIRING ANY
CURRENT OR PRESENTLY PROPOSED BUSINESS PRACTICE OF THE COMPANY, ANY ACQUISITION
OF PROPERTY BY THE COMPANY OR THE CONDUCT OF BUSINESS BY THE COMPANY AS
CURRENTLY CONDUCTED OR AS PRESENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY.

 

3.10.           COMPLIANCE WITH LAWS; GOVERNMENTAL PERMITS.

 

3.10.1.        THE COMPANY HAS COMPLIED IN ALL MATERIAL RESPECTS WITH, IS NOT IN
MATERIAL VIOLATION OF, AND HAS NOT RECEIVED ANY NOTICES OF VIOLATION WITH
RESPECT TO, ANY LEGAL REQUIREMENT WITH RESPECT TO THE CONDUCT OF ITS BUSINESS OR
THE OWNERSHIP OR OPERATION OF ITS BUSINESS (INCLUDING THE KEEPING OF ALL
REQUIRED REGISTERS AND TIMELY FILING OR DELIVERY OF ALL REQUIRED DOCUMENTS UNDER
THE PROVISIONS OF ANY APPLICABLE LEGAL REQUIREMENT), EXCEPT AS SET FORTH IN
SCHEDULE 3.10.1 OF THE DISCLOSURE SCHEDULE.  NEITHER THE COMPANY NOR ANY
MANAGER, OFFICER, AFFILIATE OR EMPLOYEE THEREOF (IN THEIR CAPACITIES AS SUCH OR
RELATING TO THEIR EMPLOYMENT, SERVICES OR RELATIONSHIP WITH THE COMPANY), HAS
GIVEN, OFFERED, PAID, PROMISED TO PAY OR AUTHORIZED PAYMENT OF ANY MONEY, ANY
GIFT OR ANYTHING OF VALUE, WITH THE PURPOSE OF INFLUENCING ANY ACT OR DECISION
OF THE RECIPIENT IN HIS OR HER OFFICIAL CAPACITY OR INDUCING THE RECIPIENT TO
USE HIS OR HER INFLUENCE TO AFFECT AN ACT OR DECISION OF A GOVERNMENT OFFICIAL
OR EMPLOYEE, TO ANY (I) GOVERNMENTAL OFFICIAL OR EMPLOYEE, (II) POLITICAL PARTY
OR CANDIDATE THEREOF, OR (III) PERSON WHILE KNOWING THAT ALL OR A PORTION OF
SUCH MONEY OR THING OF VALUE WOULD BE GIVEN OR OFFERED TO A GOVERNMENTAL
OFFICIAL OR EMPLOYEE OR POLITICAL PARTY OR CANDIDATE THEREOF.

 

3.10.2.        THE COMPANY HAS OBTAINED EACH FEDERAL, STATE, COUNTY, LOCAL OR
FOREIGN GOVERNMENTAL CONSENT, LICENSE, PERMIT, GRANT, OR OTHER AUTHORIZATION OF
A GOVERNMENTAL ENTITY (A) PURSUANT TO WHICH THE COMPANY CURRENTLY OPERATES OR
HOLDS ANY INTEREST IN ANY OF ITS ASSETS OR PROPERTIES OR (B) THAT IS REQUIRED
FOR THE OPERATION OF THE COMPANY’S BUSINESS OR THE HOLDING OF ANY SUCH INTEREST
(ALL OF THE FOREGOING CONSENTS, LICENSES, PERMITS, GRANTS, AND OTHER
AUTHORIZATIONS, COLLECTIVELY, THE “COMPANY AUTHORIZATIONS”), AND ALL OF THE
COMPANY AUTHORIZATIONS ARE IN FULL FORCE AND EFFECT.  THE COMPANY HAS NOT
RECEIVED ANY NOTICE OR OTHER COMMUNICATION FROM ANY GOVERNMENTAL ENTITY
REGARDING (I) ANY ACTUAL OR POSSIBLE VIOLATION OF LAW OR ANY COMPANY
AUTHORIZATION OR ANY FAILURE TO COMPLY WITH ANY TERM OR REQUIREMENT OF ANY
COMPANY AUTHORIZATION OR (II) ANY ACTUAL OR POSSIBLE REVOCATION, WITHDRAWAL,
SUSPENSION, CANCELLATION, TERMINATION OR MODIFICATION OF ANY COMPANY
AUTHORIZATION.  NONE OF THE COMPANY AUTHORIZATIONS WILL BE TERMINATED OR
IMPAIRED, OR WILL BECOME TERMINABLE, IN WHOLE OR IN PART, AS A RESULT OF THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

3.11.           TITLE TO PROPERTY AND ASSETS.  THE COMPANY HAS GOOD AND VALID
TITLE TO ALL OF THEIR

 

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respective properties, and interests in properties and assets, real and
personal, reflected on the Company Balance Sheet or acquired after the Company
Balance Sheet Date (except properties and assets, or interests in properties and
assets, sold or otherwise disposed of since the Company Balance Sheet Date in
the ordinary course of business consistent with past practice), or, with respect
to leased properties and assets, valid leasehold interests in such properties
and assets which afford the Company valid leasehold possession of the properties
and assets that are the subject of such leases, in each case, free and clear of
all Encumbrances, except (i) Permitted Encumbrances incurred in the ordinary
course of business consistent with past practice for obligations not past due,
(ii) such imperfections of title and non-monetary Encumbrances as do not and
will not detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise impair business operations involving
such properties, and (iii) liens securing indebtedness that is reflected on the
Company Balance Sheet, if any.  The plant, property and equipment of each of the
Company that are used in the operations of its business are (i) in good
operating condition and repair, subject to normal wear and tear and (ii) not
obsolete, dangerous or in need of renewal or replacement, except for renewal or
replacement in the ordinary course of business, consistent with past practice. 
All properties used in the operations of the Company are reflected on the
Company Balance Sheet to the extent required under GAAP to be so reflected. 
Schedule 3.11 of the Disclosure Schedule identifies each parcel of real property
leased or sub-leased by the Company.  The Company has adequate rights of ingress
and egress into any real property used in the operation of their respective
businesses.  The Company has heretofore provided to Purchaser true, correct and
complete copies of all leases, subleases and other Contracts under which the
Company uses or occupies or has the right to use or occupy, now or in the
future, any real property or facility, including all modifications, amendments
and supplements thereto.  The Company does not currently owns any real property
or any tenant improvement.

 

3.12.           INTELLECTUAL PROPERTY AND INTERNET PRACTICES.

 

3.12.1.        AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS INDICATED BELOW:

 

3.12.1.1.    “INTELLECTUAL PROPERTY” MEANS ANY AND ALL STATUTORY OR COMMON LAW
WORLDWIDE INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS AND ALL RIGHTS ASSOCIATED
THEREWITH, INCLUDING ALL PATENTS AND APPLICATIONS THEREFOR AND ALL REISSUES,
DIVISIONS, RENEWALS, EXTENSIONS, PROVISIONALS, CONTINUATIONS AND
CONTINUATIONS-IN-PART THEREOF, ALL INVENTIONS (WHETHER PATENTABLE OR NOT),
INVENTION DISCLOSURES, IMPROVEMENTS, TRADE SECRETS, PROPRIETARY INFORMATION,
KNOW HOW, TECHNOLOGY, TECHNICAL DATA, PROPRIETARY PROCESSES AND FORMULAE,
ALGORITHMS, SPECIFICATIONS, CUSTOMER LISTS AND SUPPLIER LISTS, ALL INDUSTRIAL
DESIGNS AND ANY REGISTRATIONS AND APPLICATIONS THEREFOR, ALL TRADEMARKS, TRADE
NAMES, TRADE DRESS, LOGOS, AND SERVICE NAMES AND MARKS (IN EACH CASE WHETHER OR
NOT REGISTERED) AND REGISTRATIONS AND APPLICATIONS THEREFORE AND THE RIGHT TO
FILE APPLICATIONS FOR THE REGISTRATION THEREOF, INTERNET DOMAIN NAMES, INTERNET
AND WORLD WIDE WEB URLS OR ADDRESSES, ALL COPYRIGHTS (WHETHER OR NOT
REGISTERED), REGISTRATIONS AND APPLICATIONS THEREFOR AND THE RIGHT TO FILE
APPLICATIONS FOR REGISTRATION THEREOF, AND ALL OTHER RIGHTS CORRESPONDING
THERETO, ALL COMPUTER SOFTWARE, INCLUDING ALL SOURCE CODE, OBJECT CODE,
FIRMWARE, DEVELOPMENT TOOLS, FILES, RECORDS, DOCUMENTATION, SCREEN DISPLAYS,
LAYOUTS, AND DATA, TEST METHODOLOGIES, EMULATION AND SIMULATION TOOLS AND
REPORTS, ALL DATABASES AND DATA COLLECTIONS AND ALL RIGHTS THEREIN, ALL
PUBLICITY AND PRIVACY RIGHTS, AND ALL MORAL AND ECONOMIC RIGHTS OF AUTHORS AND
INVENTORS, HOWEVER DENOMINATED, AND ANY SIMILAR OR EQUIVALENT RIGHTS TO ANY OF
THE FOREGOING, ARISING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, ANY STATE
THEREOF, OR ANY OTHER COUNTRY OR PROVINCE, AND ALL TANGIBLE EMBODIMENTS OF THE
FOREGOING (IN WHATEVER FORM).

 

3.12.1.2.            “COMPANY IP RIGHTS” MEANS ANY AND ALL INTELLECTUAL PROPERTY
USED IN THE CONDUCT OF THE BUSINESS OF THE COMPANY AS CURRENTLY CONDUCTED OR AS
CURRENTLY

 

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PROPOSED TO BE CONDUCTED BY THE COMPANY, INCLUDING, WITHOUT LIMITATION,
INTELLECTUAL PROPERTY CURRENTLY UNDER DEVELOPMENT BY OR FOR THE COMPANY (WHETHER
OR NOT IN COLLABORATION WITH ANOTHER PERSON).

 

3.12.1.3.            “COMPANY-OWNED IP RIGHTS” MEANS COMPANY IP RIGHTS THAT ARE
OWNED OR ARE PURPORTEDLY OWNED BY OR EXCLUSIVELY LICENSED TO THE COMPANY,
INCLUDING, BUT NOT LIMITED TO, COMPANY REGISTERED INTELLECTUAL PROPERTY.

 

3.12.1.4.            “COMPANY REGISTERED INTELLECTUAL PROPERTY” MEANS ALL UNITED
STATES, INTERNATIONAL AND FOREIGN: (A) PATENTS AND PATENT APPLICATIONS
(INCLUDING PROVISIONAL APPLICATIONS ALL REISSUES, DIVISIONS, RENEWALS,
EXTENSIONS, CONTINUATIONS AND CONTINUATIONS-IN-PART THEREOF); (B) REGISTERED
TRADEMARKS AND SERVICE MARKS, APPLICATIONS TO REGISTER TRADEMARKS AND SERVICE
MARKS, INTENT-TO-USE APPLICATIONS, AND OTHER REGISTRATIONS AND APPLICATIONS
RELATED TO TRADEMARKS OR SERVICE MARKS; (C) REGISTERED INTERNET DOMAIN NAMES AND
INTERNET AND WORLD WIDE WEB URLS OR ADDRESSES; (D) REGISTERED COPYRIGHTS AND
APPLICATIONS FOR COPYRIGHT REGISTRATION; AND (E) ANY OTHER INTELLECTUAL PROPERTY
THAT IS THE SUBJECT OF AN APPLICATION, CERTIFICATE, FILING, REGISTRATION OR
OTHER DOCUMENT ISSUED, FILED WITH, OR RECORDED BY ANY GOVERNMENTAL AUTHORITY
OWNED BY, REGISTERED OR FILED IN THE NAME OF, THE COMPANY.

 

3.12.1.5.            “THIRD PARTY INTELLECTUAL PROPERTY RIGHTS” MEANS ANY
INTELLECTUAL PROPERTY OWNED BY A THIRD PARTY.

 

3.12.1.6.            “COMPANY PRODUCTS” MEANS ALL PRODUCTS AND SERVICES
PRODUCED, MARKETED, LICENSED, SOLD, DISTRIBUTED OR PERFORMED BY OR ON BEHALF OF
THE COMPANY AND ALL PRODUCTS AND SERVICES CURRENTLY UNDER DEVELOPMENT BY THE
COMPANY.

 

3.12.1.7.            “COMPANY SOURCE CODE” MEANS, COLLECTIVELY, ALL SOFTWARE
SOURCE CODE AND SPECIFICATIONS AND DESIGNS AND ALL MATERIAL PROPRIETARY
INFORMATION AND ALGORITHMS CONTAINED IN OR RELATING TO ANY SOFTWARE SOURCE CODE
OR SPECIFICATIONS OR DESIGNS, OF ANY COMPANY-OWNED IP RIGHTS OR COMPANY
PRODUCTS.

 

3.12.2.        THE COMPANY (I) OWNS AND HAS INDEPENDENTLY DEVELOPED OR ACQUIRED,
OR (II) HAS THE VALID RIGHT OR LICENSE TO ALL COMPANY IP RIGHTS.  THE COMPANY IP
RIGHTS ARE SUFFICIENT FOR THE CONDUCT OF THE BUSINESS OF THE COMPANY AS
CURRENTLY CONDUCTED AND AS CURRENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY.

 

3.12.3.        THE COMPANY HAS NOT TRANSFERRED OWNERSHIP OF ANY INTELLECTUAL
PROPERTY THAT IS OR WAS COMPANY-OWNED IP RIGHTS TO ANY THIRD PARTY, OR KNOWINGLY
PERMITTED THE COMPANY’S RIGHTS IN ANY INTELLECTUAL PROPERTY THAT IS OR WAS
COMPANY-OWNED IP RIGHTS TO ENTER THE PUBLIC DOMAIN OR, WITH RESPECT TO ANY
INTELLECTUAL PROPERTY FOR WHICH THE COMPANY HAS SUBMITTED AN APPLICATION OR
OBTAINED A REGISTRATION, LAPSE (OTHER THAN THROUGH THE EXPIRATION OF REGISTERED
INTELLECTUAL PROPERTY AT THE END OF ITS MAXIMUM STATUTORY TERM).

 

3.12.4.        THE COMPANY OWNS AND HAS GOOD AND EXCLUSIVE TITLE TO EACH ITEM OF
COMPANY-OWNED IP RIGHTS AND EACH ITEM OF COMPANY REGISTERED INTELLECTUAL
PROPERTY, FREE AND CLEAR OF ANY ENCUMBRANCES (OTHER THAN PERMITTED
ENCUMBRANCES).  THE RIGHT, LICENSE AND INTEREST OF THE COMPANY IN AND TO ALL
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS LICENSED BY THE COMPANY FROM A THIRD
PARTY ARE FREE AND CLEAR OF ALL ENCUMBRANCES (EXCLUDING RESTRICTIONS CONTAINED
IN THE APPLICABLE LICENSE AGREEMENTS WITH SUCH THIRD PARTIES AND PERMITTED
ENCUMBRANCES).

 

3.12.5.        NEITHER THE EXECUTION AND DELIVERY OR EFFECTIVENESS OF THIS
AGREEMENT NOR THE

 

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PERFORMANCE OF THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT WILL CAUSE THE
FORFEITURE OR TERMINATION OF, OR GIVE RISE TO A RIGHT OF FORFEITURE OR
TERMINATION OF ANY COMPANY-OWNED IP RIGHT, OR IMPAIR THE RIGHT OF THE COMPANY OR
PURCHASER TO USE, POSSESS, SELL OR LICENSE ANY COMPANY-OWNED IP RIGHT OR PORTION
THEREOF.  AFTER THE CLOSING, ALL COMPANY-OWNED IP RIGHTS WILL BE FULLY
TRANSFERABLE, ALIENABLE OR LICENSABLE BY PURCHASER WITHOUT RESTRICTION AND
WITHOUT PAYMENT OF ANY KIND TO ANY THIRD PARTY.

 

3.12.6.        SCHEDULE 3.12.6 OF THE DISCLOSURE SCHEDULE LISTS ALL COMPANY
REGISTERED INTELLECTUAL PROPERTY INCLUDING THE JURISDICTIONS IN WHICH EACH SUCH
ITEM OF INTELLECTUAL PROPERTY HAS BEEN ISSUED OR REGISTERED (INCLUDING, WITHOUT
LIMITATION, THE “WHOIS” LOOKUP WITH RESPECT TO DOMAIN NAMES) OR IN WHICH ANY
APPLICATION FOR SUCH ISSUANCE AND REGISTRATION HAS BEEN FILED, OR IN WHICH ANY
OTHER FILING OR RECORDATION HAS BEEN MADE.  SCHEDULE 3.12.6 OF THE DISCLOSURE
SCHEDULE SETS FORTH A LIST OF ALL ACTIONS THAT ARE REQUIRED TO BE TAKEN BY THE
COMPANY WITHIN 120 DAYS OF THE DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT
WITH RESPECT TO ANY OF THE COMPANY REGISTERED INTELLECTUAL PROPERTY IN ORDER TO
AVOID PREJUDICE TO, IMPAIRMENT OR ABANDONMENT OF SUCH COMPANY REGISTERED
INTELLECTUAL PROPERTY.

 

3.12.7.        ALL STATEMENTS AND REPRESENTATIONS MADE BY THE COMPANY IN ANY
PENDING COPYRIGHT, TRADEMARK, SERVICE MARK, OR PATENT APPLICATIONS, FILINGS OR
REGISTRATIONS WERE TRUE IN ALL MATERIAL RESPECTS AS OF THE TIME THEY WERE MADE. 
EACH ITEM OF COMPANY REGISTERED INTELLECTUAL PROPERTY IS VALID AND SUBSISTING
(OR IN THE CASE OF APPLICATIONS, APPLIED FOR), ALL REGISTRATION, MAINTENANCE AND
RENEWAL FEES CURRENTLY DUE IN CONNECTION WITH SUCH COMPANY REGISTERED
INTELLECTUAL PROPERTY HAVE BEEN PAID AND ALL DOCUMENTS, RECORDATIONS AND
CERTIFICATES IN CONNECTION WITH SUCH COMPANY REGISTERED INTELLECTUAL PROPERTY
CURRENTLY REQUIRED TO BE FILED HAVE BEEN FILED WITH THE RELEVANT PATENT,
COPYRIGHT, TRADEMARK OR OTHER AUTHORITIES IN THE UNITED STATES OR FOREIGN
JURISDICTIONS, AS THE CASE MAY BE, FOR THE PURPOSES OF PROSECUTING, MAINTAINING
AND PERFECTING SUCH COMPANY REGISTERED INTELLECTUAL PROPERTY AND RECORDING THE
COMPANY’S OWNERSHIP INTERESTS THEREIN.

 

3.12.8.        THE COMPANY IS NOT NOR SHALL IT BE AS A RESULT OF THE EXECUTION
AND DELIVERY OR EFFECTIVENESS OF THIS AGREEMENT OR THE PERFORMANCE OF THE
COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT, IN BREACH OF ANY CONTRACT GOVERNING
ANY COMPANY IP RIGHTS (THE “COMPANY IP RIGHTS AGREEMENTS”) AND THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL NOT RESULT IN THE
MODIFICATION, CANCELLATION, TERMINATION, SUSPENSION OF, OR ACCELERATION OF ANY
PAYMENTS WITH RESPECT TO THE COMPANY IP RIGHTS AGREEMENTS, OR GIVE ANY
NON-COMPANY PARTY TO ANY COMPANY IP RIGHTS AGREEMENT THE RIGHT TO DO ANY OF THE
FOREGOING.  FOLLOWING THE CLOSING, THE COMPANY (AS WHOLLY-OWNED, DIRECTLY OR
INDIRECTLY, BY PURCHASER) WILL BE PERMITTED TO EXERCISE ALL OF THE COMPANY’S
RIGHTS UNDER THE COMPANY IP RIGHTS AGREEMENTS TO THE SAME EXTENT THE COMPANY
WOULD HAVE BEEN ABLE TO HAD THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT NOT
OCCURRED AND WITHOUT THE PAYMENT OF ANY ADDITIONAL AMOUNTS OR CONSIDERATION
OTHER THAN ONGOING FEES, ROYALTIES OR PAYMENTS WHICH THE COMPANY WOULD OTHERWISE
BE REQUIRED TO PAY.

 

3.12.9.        NONE OF THE COMPANY IP RIGHTS AGREEMENTS GRANTS ANY THIRD PARTY
EXCLUSIVE RIGHTS TO OR UNDER ANY COMPANY IP RIGHTS OR GRANTS ANY THIRD PARTY THE
RIGHT TO SUBLICENSE ANY COMPANY IP RIGHTS.

 

3.12.10.      THERE ARE NO ROYALTIES, HONORARIA, FEES OR OTHER PAYMENTS PAYABLE
BY THE COMPANY TO ANY PERSON (OTHER THAN SALARIES PAYABLE TO EMPLOYEES,
CONSULTANTS AND INDEPENDENT CONTRACTORS NOT CONTINGENT ON OR RELATED TO USE OF
THEIR WORK PRODUCT) AS A RESULT OF THE OWNERSHIP, USE, POSSESSION, LICENSE-IN,
LICENSE-OUT, SALE, MARKETING, ADVERTISING OR DISPOSITION OF ANY COMPANY-OWNED IP
RIGHTS BY THE COMPANY.

 

3.12.11.      TO THE KNOWLEDGE OF THE COMPANY, THERE IS NO UNAUTHORIZED USE,
UNAUTHORIZED DISCLOSURE, INFRINGEMENT OR MISAPPROPRIATION OF ANY COMPANY-OWNED
IP RIGHTS, BY ANY THIRD PARTY,

 

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INCLUDING ANY EMPLOYEE OR FORMER EMPLOYEE OF THE COMPANY.  THE COMPANY HAS NOT
BROUGHT ANY ACTION, SUIT OR PROCEEDING FOR INFRINGEMENT OR MISAPPROPRIATION OF
ANY INTELLECTUAL PROPERTY OR BREACH OF ANY COMPANY IP RIGHTS AGREEMENT.

 

3.12.12.      THE COMPANY HAS NOT BEEN SUED IN ANY SUIT, ACTION OR PROCEEDING
(OR RECEIVED ANY WRITTEN NOTICE OR, TO THE KNOWLEDGE OF THE COMPANY, THREAT)
WHICH INVOLVES A CLAIM OF INFRINGEMENT OR MISAPPROPRIATION OF ANY INTELLECTUAL
PROPERTY RIGHT OF ANY THIRD PARTY OR WHICH CONTESTS THE VALIDITY, OWNERSHIP OR
RIGHT OF THE COMPANY TO EXERCISE ANY INTELLECTUAL PROPERTY RIGHT.  THE COMPANY
HAS NOT RECEIVED ANY WRITTEN COMMUNICATION THAT INVOLVES AN OFFER TO LICENSE OR
GRANT ANY OTHER RIGHTS OR IMMUNITIES UNDER ANY THIRD PARTY INTELLECTUAL PROPERTY
RIGHT.

 

3.12.13.      THE OPERATION OF THE BUSINESS OF THE COMPANY AS SUCH BUSINESS IS
CURRENTLY CONDUCTED AND AS CURRENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY,
INCLUDING (I) THE DESIGN, DEVELOPMENT, MANUFACTURING, REPRODUCTION, MARKETING,
LICENSING, SALE, OFFER FOR SALE, IMPORTATION, DISTRIBUTION, PROVISION AND/OR USE
OF ANY COMPANY PRODUCT AND (II) THE COMPANY’S USE OF ANY PRODUCT, DEVICE OR
PROCESS USED IN THE BUSINESS OF THE COMPANY AS PREVIOUSLY CONDUCTED, AS
CURRENTLY CONDUCTED AND AS CURRENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY,
DOES NOT AND WILL NOT INFRINGE OR MISAPPROPRIATE THE INTELLECTUAL PROPERTY OF
ANY THIRD PARTY AND DOES NOT CONSTITUTE UNFAIR COMPETITION OR UNFAIR TRADE
PRACTICES UNDER THE LAWS OF ANY JURISDICTION AND THERE IS NO SUBSTANTIAL BASIS
FOR A CLAIM THAT THE DESIGN, DEVELOPMENT, MANUFACTURING, REPRODUCTION,
MARKETING, LICENSING, SALE, OFFER FOR SALE, IMPORTATION, DISTRIBUTION, PROVISION
AND/OR USE OF ANY COMPANY PRODUCT OR THE OPERATION OF THE BUSINESS OF THE
COMPANY IS INFRINGING OR HAS INFRINGED ON OR MISAPPROPRIATED ANY INTELLECTUAL
PROPERTY OF A THIRD PARTY.

 

3.12.14.      NONE OF THE COMPANY-OWNED IP RIGHTS, THE COMPANY PRODUCTS, THE
COMPANY IS SUBJECT TO ANY PROCEEDING OR OUTSTANDING ORDER, CONTRACT OR
STIPULATION (A) RESTRICTING IN ANY MANNER THE USE, TRANSFER, OR LICENSING BY THE
COMPANY OF ANY COMPANY-OWNED IP RIGHT OR ANY COMPANY PRODUCT, OR WHICH MAY
AFFECT THE VALIDITY, USE OR ENFORCEABILITY OF ANY SUCH COMPANY-OWNED IP RIGHT OR
COMPANY PRODUCT, OR (B) RESTRICTING THE CONDUCT OF THE BUSINESS OF THE COMPANY
IN ORDER TO ACCOMMODATE THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

3.12.15.      THE COMPANY HAS NOT RECEIVED ANY OPINION OF COUNSEL THAT ANY
COMPANY PRODUCT OR THE OPERATION OF THE BUSINESS OF THE COMPANY, AS PREVIOUSLY
OR CURRENTLY CONDUCTED, OR AS CURRENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY,
INFRINGES OR MISAPPROPRIATES ANY THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

3.12.16.      THE COMPANY HAS SECURED FROM ALL OF ITS CONSULTANTS, EMPLOYEES AND
INDEPENDENT CONTRACTORS WHO INDEPENDENTLY OR JOINTLY CONTRIBUTED TO THE
CONCEPTION, REDUCTION TO PRACTICE, CREATION OR DEVELOPMENT OF ANY COMPANY-OWNED
IP RIGHTS UNENCUMBERED AND UNRESTRICTED EXCLUSIVE OWNERSHIP OF, ALL SUCH THIRD
PARTY’S INTELLECTUAL PROPERTY IN SUCH CONTRIBUTION THAT THE COMPANY DOES NOT
ALREADY OWN BY OPERATION OF LAW AND SUCH THIRD PARTY HAS NOT RETAINED ANY RIGHTS
OR LICENSES WITH RESPECT THERETO.  WITHOUT LIMITING THE FOREGOING, THE COMPANY
HAS OBTAINED PROPRIETARY INFORMATION AND INVENTION DISCLOSURE AND ASSIGNMENT
AGREEMENTS FROM ALL CURRENT AND FORMER EMPLOYEES AND CONSULTANTS OF THE COMPANY.

 

3.12.17.      NO CURRENT OR FORMER EMPLOYEE, CONSULTANT OR INDEPENDENT
CONTRACTOR OF THE COMPANY: (I) IS IN VIOLATION OF ANY TERM OR COVENANT OF ANY
CONTRACT RELATING TO EMPLOYMENT, INVENTION DISCLOSURE, INVENTION ASSIGNMENT,
NON-DISCLOSURE OR NON-COMPETITION OR ANY OTHER CONTRACT WITH ANY OTHER PARTY BY
VIRTUE OF SUCH EMPLOYEE’S, CONSULTANT’S OR INDEPENDENT CONTRACTOR’S BEING
EMPLOYED BY, OR PERFORMING SERVICES FOR, THE COMPANY OR USING TRADE SECRETS OR
PROPRIETARY INFORMATION OF OTHERS WITHOUT PERMISSION; OR (II) HAS DEVELOPED ANY
TECHNOLOGY, SOFTWARE OR OTHER COPYRIGHTABLE, PATENTABLE OR OTHERWISE

 

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PROPRIETARY WORK FOR THE COMPANY THAT IS SUBJECT TO ANY AGREEMENT UNDER WHICH
SUCH EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR HAS ASSIGNED OR OTHERWISE
GRANTED TO ANY THIRD PARTY ANY RIGHTS (INCLUDING INTELLECTUAL PROPERTY RIGHTS)
IN OR TO SUCH TECHNOLOGY, SOFTWARE OR OTHER COPYRIGHTABLE, PATENTABLE OR
OTHERWISE PROPRIETARY WORK.

 

3.12.18.      THE EMPLOYMENT OF ANY EMPLOYEE OF THE COMPANY OR THE USE BY THE
COMPANY OF THE SERVICES OF ANY CONSULTANT OR INDEPENDENT CONTRACTOR DOES NOT
SUBJECT THE COMPANY TO ANY LIABILITY TO ANY THIRD PARTY FOR IMPROPERLY
SOLICITING SUCH EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR TO WORK FOR THE
COMPANY, WHETHER SUCH LIABILITY IS BASED ON CONTRACTUAL OR OTHER LEGAL
OBLIGATIONS TO SUCH THIRD PARTY.  NO CURRENT OR FORMER EMPLOYEE, CONSULTANT OR
INDEPENDENT CONTRACTOR OF THE COMPANY HAS ANY RIGHT, LICENSE, CLAIM OR INTEREST
WHATSOEVER IN OR WITH RESPECT TO ANY COMPANY-OWNED IP RIGHTS.

 

3.12.19.      TO THE EXTENT THAT ANY INTELLECTUAL PROPERTY THAT IS OR WAS A
THIRD PARTY INTELLECTUAL PROPERTY RIGHT IS INCORPORATED INTO, INTEGRATED OR
BUNDLED WITH, OR USED BY THE COMPANY IN THE DEVELOPMENT, MANUFACTURE OR
COMPILATION OF ANY OF THE COMPANY PRODUCTS, THE COMPANY HAS A WRITTEN AGREEMENT
WITH SUCH THIRD PARTY WITH RESPECT THERETO PURSUANT TO WHICH THE COMPANY EITHER
(A) HAS OBTAINED COMPLETE, UNENCUMBERED AND UNRESTRICTED OWNERSHIP OF, AND IS
THE EXCLUSIVE OWNERS OF SUCH INTELLECTUAL PROPERTY BY OPERATION OF LAW OR BY
VALID ASSIGNMENT, OR (B) HAS OBTAINED PERPETUAL, ASSIGNABLE AND NON TERMINABLE
(OTHER THAN FOR BREACH) LICENSES (SUFFICIENT FOR THE CONDUCT OF ITS BUSINESS AS
CURRENTLY CONDUCTED BY THE COMPANY AND AS CURRENTLY PROPOSED TO BE CONDUCTED BY
THE COMPANY) TO ALL SUCH THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

3.12.20.      THE COMPANY HAS TAKEN ALL COMMERCIALLY REASONABLE STEPS TO PROTECT
AND PRESERVE THE CONFIDENTIALITY OF ALL CONFIDENTIAL OR NON-PUBLIC INFORMATION
INCLUDED IN THE COMPANY IP RIGHTS (“CONFIDENTIAL INFORMATION”).  ALL USE,
DISCLOSURE OR APPROPRIATION OF CONFIDENTIAL INFORMATION OWNED BY THE COMPANY TO
A THIRD PARTY HAS BEEN PURSUANT TO THE TERMS OF A WRITTEN CONTRACT BETWEEN THE
COMPANY AND SUCH THIRD PARTY.  ALL USE, DISCLOSURE OR APPROPRIATION OF
CONFIDENTIAL INFORMATION BY THE COMPANY NOT OWNED BY THE COMPANY HAS BEEN
PURSUANT TO THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE OWNER
OF SUCH CONFIDENTIAL INFORMATION, OR IS OTHERWISE LAWFUL.  ALL CURRENT AND
FORMER EMPLOYEES AND CONSULTANTS OF THE COMPANY HAVING ACCESS TO CONFIDENTIAL
INFORMATION OR PROPRIETARY INFORMATION OF ANY OF THEIR RESPECTIVE CUSTOMERS OR
BUSINESS PARTNERS HAVE EXECUTED AND DELIVERED TO THE COMPANY AN AGREEMENT
REGARDING THE PROTECTION OF SUCH CONFIDENTIAL INFORMATION OR PROPRIETARY
INFORMATION (IN THE CASE OF PROPRIETARY INFORMATION OF THE COMPANY’S CUSTOMERS
AND BUSINESS PARTNERS, TO THE EXTENT REQUIRED BY SUCH CUSTOMERS AND BUSINESS
PARTNERS).

 

3.12.21.      SCHEDULE 3.12.21 OF THE DISCLOSURE SCHEDULE LISTS ALL SOFTWARE OR
OTHER MATERIAL THAT IS DISTRIBUTED AS “FREE SOFTWARE”, “OPEN SOURCE SOFTWARE” OR
UNDER A SIMILAR LICENSING OR DISTRIBUTION TERMS (INCLUDING BUT NOT LIMITED TO
THE GNU GENERAL PUBLIC LICENSE (GPL), GNU LESSER GENERAL PUBLIC LICENSE (LGPL),
MOZILLA PUBLIC LICENSE (MPL), BSD LICENSES, THE ARTISTIC LICENSE, THE NETSCAPE
PUBLIC LICENSE, THE SUN COMMUNITY SOURCE LICENSE (SCSL) THE SUN INDUSTRY
STANDARDS LICENSE (SISL) AND THE APACHE LICENSE) (“OPEN SOURCE MATERIALS”) USED
BY THE COMPANY IN ANY WAY.  THE COMPANY IS IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF ALL LICENSES FOR THE OPEN SOURCE MATERIALS.

 

3.12.22.      THE COMPANY HAS NOT (I) INCORPORATED OPEN SOURCE MATERIALS INTO,
OR COMBINED OPEN SOURCE MATERIALS WITH, THE COMPANY IP RIGHTS OR COMPANY
PRODUCTS; (II) DISTRIBUTED OPEN SOURCE MATERIALS IN CONJUNCTION WITH ANY COMPANY
IP RIGHTS OR COMPANY PRODUCTS; OR (III) USED OPEN SOURCE MATERIALS, IN SUCH A
WAY THAT, WITH RESPECT TO (I), (II), OR (III), CREATES, OR PURPORTS TO CREATE
OBLIGATIONS FOR THE COMPANY WITH RESPECT TO ANY COMPANY IP RIGHTS OR GRANT, OR
PURPORT TO GRANT, TO ANY THIRD PARTY, ANY RIGHTS OR IMMUNITIES UNDER ANY COMPANY
IP RIGHTS (INCLUDING USING ANY OPEN SOURCE MATERIALS THAT REQUIRE, AS A
CONDITION OF USE, MODIFICATION AND/OR DISTRIBUTION OF SUCH OPEN SOURCE MATERIALS
THAT OTHER SOFTWARE INCORPORATED INTO, DERIVED FROM OR DISTRIBUTED WITH SUCH
OPEN SOURCE

 

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MATERIALS BE (A) DISCLOSED OR DISTRIBUTED IN SOURCE CODE FORM, (B) BE LICENSED
FOR THE PURPOSE OF MAKING DERIVATIVE WORKS, OR (C) BE REDISTRIBUTABLE AT NO
CHARGE).

 

3.12.23.      ALL COMPANY PRODUCTS SOLD, LICENSED, LEASED OR DELIVERED BY THE
COMPANY TO CUSTOMERS AND ALL SERVICES PROVIDED BY OR THROUGH THE COMPANY TO
CUSTOMERS ON OR PRIOR TO THE CLOSING DATE CONFORM TO APPLICABLE CONTRACTUAL
COMMITMENTS, EXPRESS AND IMPLIED WARRANTIES (TO THE EXTENT NOT SUBJECT TO
LEGALLY EFFECTIVE EXPRESS EXCLUSIONS THEREOF), AND TO ANY REPRESENTATIONS
PROVIDED TO CUSTOMERS AND CONFORM IN ALL MATERIAL RESPECTS TO PACKAGING,
ADVERTISING AND MARKETING MATERIALS AND TO APPLICABLE PRODUCT OR SERVICE
SPECIFICATIONS OR DOCUMENTATION.  THE COMPANY HAS NO LIABILITY (AND, TO THE
KNOWLEDGE OF THE COMPANY, THERE IS NO LEGITIMATE BASIS FOR ANY PRESENT OR FUTURE
ACTION, SUIT, PROCEEDING, HEARING, INVESTIGATION, CHARGE, COMPLAINT, CLAIM OR
DEMAND AGAINST THE COMPANY GIVING RISE TO ANY MATERIAL LIABILITY RELATING TO THE
FOREGOING CONTRACTS) FOR REPLACEMENT OR REPAIR THEREOF OR OTHER DAMAGES IN
CONNECTION THEREWITH IN EXCESS OF ANY RESERVES THEREFOR REFLECTED ON THE COMPANY
BALANCE SHEET.

 

3.12.24.      THE COMPANY HAS PROVIDED PURCHASER WITH ALL DOCUMENTATION AND
NOTES RELATING TO THE TESTING OF ALL COMPANY PRODUCTS.  THE COMPANY HAS
DOCUMENTED ALL BUGS, ERRORS AND DEFECTS IN ALL THE COMPANY PRODUCTS, AND SUCH
DOCUMENTATION IS RETAINED AND IS AVAILABLE INTERNALLY AT THE COMPANY.  ALL
COMPANY PRODUCTS ARE FREE FROM ANY MATERIAL DEFECT, BUG, VIRUS, TIME BOMB,
TROJAN HORSE, BACKDOOR OR PROGRAMMING, DESIGN OR DOCUMENTATION ERROR AND OPERATE
AND RUN IN A REASONABLE MANNER.

 

3.12.25.      FOR ALL SOFTWARE USED BY THE COMPANY IN PROVIDING SERVICES, OR IN
DEVELOPING OR MAKING AVAILABLE ANY OF THE COMPANY PRODUCTS, THE COMPANY HAS
IMPLEMENTED ANY AND ALL SECURITY PATCHES OR UPGRADES THAT ARE GENERALLY
AVAILABLE FOR THAT SOFTWARE.

 

3.12.26.      NO (I) GOVERNMENT FUNDING; (II) FACILITIES OF A UNIVERSITY,
COLLEGE, OTHER EDUCATIONAL INSTITUTION OR RESEARCH CENTER; OR (III) FUNDING FROM
ANY PERSON (OTHER THAN FUNDS RECEIVED IN CONSIDERATION FOR THE MEMBERSHIP
INTERESTS) WAS USED IN THE DEVELOPMENT OF THE COMPANY-OWNED IP RIGHTS.  NO
CURRENT OR FORMER EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR OF THE COMPANY,
WHO WAS INVOLVED IN, OR WHO CONTRIBUTED TO, THE CREATION OR DEVELOPMENT OF ANY
COMPANY-OWNED IP RIGHTS, HAS PERFORMED SERVICES FOR OR OTHERWISE WAS UNDER
RESTRICTIONS RESULTING FROM HIS/HER RELATIONS WITH ANY GOVERNMENT, UNIVERSITY,
COLLEGE OR OTHER EDUCATIONAL INSTITUTION OR RESEARCH CENTER DURING A PERIOD OF
TIME DURING WHICH SUCH EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR WAS ALSO
PERFORMING SERVICES FOR THE COMPANY.

 

3.12.27.      NEITHER THE COMPANY NOR ANY OTHER PERSON THEN ACTING ON ITS BEHALF
HAS DISCLOSED, DELIVERED OR LICENSED TO ANY PERSON, AGREED TO DISCLOSE, DELIVER
OR LICENSE TO ANY PERSON, OR PERMITTED THE DISCLOSURE OR DELIVERY TO ANY ESCROW
AGENT OR OTHER PERSON OF, ANY COMPANY SOURCE CODE.  NO EVENT HAS OCCURRED, AND
NO CIRCUMSTANCE OR CONDITION EXISTS, THAT (WITH OR WITHOUT NOTICE OR LAPSE OF
TIME, OR BOTH) WILL, OR WOULD REASONABLY BE EXPECTED TO, RESULT IN THE
DISCLOSURE, DELIVERY OR LICENSE BY THE COMPANY OR ANY PERSON THEN ACTING ON ITS
BEHALF TO ANY PERSON OF ANY COMPANY SOURCE CODE.  SCHEDULE 3.12.27 OF THE
DISCLOSURE SCHEDULE IDENTIFIES EACH CONTRACT PURSUANT TO WHICH THE COMPANY HAS
DEPOSITED, OR IS OR MAY BE REQUIRED TO DEPOSIT, WITH AN ESCROW HOLDER OR ANY
OTHER PERSON, ANY OF THE COMPANY SOURCE CODE, AND DESCRIBES WHETHER THE
EXECUTION OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, IN AND OF ITSELF, WOULD REASONABLY BE EXPECTED TO RESULT IN THE
RELEASE FROM ESCROW OF ANY COMPANY SOURCE CODE.

 

3.12.28.      THE COMPANY IS NOT NOW AND HAS NEVER BEEN A MEMBER OR PROMOTER OF,
OR A CONTRIBUTOR TO, ANY INDUSTRY STANDARDS BODY OR ANY SIMILAR ORGANIZATION
THAT COULD REASONABLY BE EXPECTED TO REQUIRE OR OBLIGATE ANY OF THE COMPANY TO
GRANT OR OFFER TO ANY OTHER PERSON ANY LICENSE OR RIGHT TO ANY COMPANY-OWNED IP
RIGHTS.

 

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3.12.29.      THE COMPANY HAS IMPLEMENTED AND MAINTAINS A COMPREHENSIVE SECURITY
PLAN WHICH (I) IDENTIFIES INTERNAL AND EXTERNAL RISKS TO THE SECURITY OF THE
CONFIDENTIAL INFORMATION, INCLUDING PERSONALLY IDENTIFIABLE INFORMATION;
(II) IMPLEMENTS, MONITORS AND IMPROVES ADEQUATE AND EFFECTIVE ADMINISTRATIVE,
ELECTRONIC AND PHYSICAL SAFEGUARDS TO CONTROL THOSE RISKS; AND (III) MAINTAINS
NOTIFICATION PROCEDURES IN COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS IN THE
CASE OF ANY BREACH OF SECURITY COMPROMISING UNENCRYPTED DATA CONTAINING
PERSONALLY IDENTIFIABLE INFORMATION.  THE COMPANY HAS NOT EXPERIENCED ANY BREACH
OF SECURITY OR OTHERWISE UNAUTHORIZED ACCESS BY THIRD PARTIES TO THE
CONFIDENTIAL INFORMATION, INCLUDING PERSONALLY IDENTIFIABLE INFORMATION IN THE
COMPANY’S POSSESSION, CUSTODY OR CONTROL, OR TO ANY COMPANY PRODUCT.

 

3.12.30.      THE COMPANY (I) HAS NOT COLLECTED, AND IS NOT COLLECTING, ANY
PERSONALLY IDENTIFIABLE INFORMATION FROM ANY THIRD PARTIES, (II) IS IN
COMPLIANCE WITH THEIR RESPECTIVE INTERNAL PRIVACY POLICIES AND TERMS OF USE,
(III) HAS NOT AND DOES NOT, DIRECTLY OR INDIRECTLY, DELIVER OR HAS THIRD PARTIES
DELIVER UNSOLICITED ELECTRONIC MAILS, NOR PLACE METATAGS IN A MANNER THAT
INFRINGES RIGHTS OF THIRD PARTIES, (IV) COMPLIES WITH THE SAFE HARBOR
REQUIREMENTS OF THE UNITED STATES DESIGNATED AGENT FILINGS FOR SAFE HARBOR UNDER
DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998, (V) DOES NOT PROVIDE GOODS OR SERVICES
THAT ARE REGULATED OR ARE INTENDED ONLY FOR ADULTS, OR PROHIBITED OR CONTROLLED
IN ANY JURISDICTIONS, AND (VI) DOES NOT KNOWINGLY COLLECT PERSONALLY
IDENTIFIABLE INFORMATION FROM ANYONE UNDER THE AGE OF 13 AND COMPLY WITH THE
REQUIREMENTS OF THE UNITED STATES CHILDREN’S ONLINE PRIVACY PROTECTION ACT OF
1998, AS AMENDED. THIRD PARTIES’ CONTENT (INCLUDING WITHOUT LIMITATION TEXT,
GRAPHICS AND TECHNOLOGY) INCLUDED IN, OR LINKED TO BY, THE WEBSITES MAINTAINED
BY THE COMPANY AND THE SUBSIDIARY IS PROPERLY LICENSED FOR ELECTRONIC POSTING,
DISTRIBUTION, STORAGE AND ALL OTHER INTENDED USES BY THE COMPANY AND USERS OF
ALL SUCH WEBSITES.

 

3.12.31.      THE COMPANY HAS COMPLIED WITH ALL APPLICABLE LEGAL REQUIREMENTS
AND THEIR RESPECTIVE INTERNAL AND PUBLIC PRIVACY POLICIES RELATING TO THE USE,
COLLECTION, STORAGE, DISCLOSURE AND TRANSFER OF ANY PERSONALLY IDENTIFIABLE
INFORMATION COLLECTED BY THE COMPANY OR BY THIRD PARTIES HAVING AUTHORIZED
ACCESS TO THE RECORDS OF THE COMPANY.  THE EXECUTION, DELIVERY AND PERFORMANCE
OF THIS AGREEMENT, WILL COMPLY WITH ALL APPLICABLE LEGAL REQUIREMENTS RELATING
TO PRIVACY AND WITH THE COMPANY’S PRIVACY POLICIES.  THE COMPANY HAS NOT
RECEIVED A COMPLAINT REGARDING THE COMPANY’S COLLECTION, USE OR DISCLOSURE OF
PERSONALLY IDENTIFIABLE INFORMATION.

 

3.12.32.      SCHEDULE 3.12.32(I) OF THE DISCLOSURE SCHEDULE SETS FORTH TRUE AND
ACCURATE MONTHLY TRAFFIC METRICS INFORMATION ON EACH COMPANY WEB SITE,
INDIVIDUALLY AND IN THE AGGREGATE, ACCORDING TO THE PARAMETERS REQUESTED BY
PURCHASER AND REFLECTS, IN ALL MATERIAL RESPECTS, THE ACTUAL USE OF EACH COMPANY
WEB SITE BY ITS RESPECTIVE USERS FOR THE PERIODS COVERED BY SUCH METRICS.  THE
NUMBER OF REGISTERED USERS OF EACH COMPANY WEB SITE, AS OF JULY 5, 2007, IS AS
SET FORTH IN SCHEDULE 3.12.32(II) OF THE DISCLOSURE SCHEDULE.

 

3.13.     ENVIRONMENTAL MATTERS.  (I) ALL HAZARDOUS MATERIALS AND WASTES OF THE
COMPANY HAS BEEN DISPOSED OF IN ACCORDANCE IN ALL MATERIAL RESPECTS WITH ALL
ENVIRONMENTAL AND SAFETY LAWS; (II)  THE COMPANY HAS NOT RECEIVED ANY NOTICE OF
ANY NONCOMPLIANCE OF THE FACILITIES OR ITS PAST OR PRESENT OPERATIONS WITH
ENVIRONMENTAL AND SAFETY LAWS; (III) NO NOTICES, ADMINISTRATIVE ACTIONS OR SUITS
ARE PENDING OR THREATENED RELATING TO AN ACTUAL OR ALLEGED VIOLATION OF ANY
APPLICABLE ENVIRONMENTAL AND SAFETY LAWS BY THE COMPANY; (IV) THE COMPANY IS NOT
A POTENTIALLY RESPONSIBLE PARTY UNDER THE FEDERAL COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980, AS AMENDED, OR ANY ANALOGOUS
STATE, LOCAL OR FOREIGN LAWS ARISING OUT OF EVENTS OCCURRING PRIOR TO THE
CLOSING DATE; (V) TO THE COMPANY’S KNOWLEDGE, THERE HAVE NOT BEEN IN THE PAST,
AND ARE NOT NOW, ANY HAZARDOUS MATERIALS ON, UNDER OR MIGRATING TO OR FROM ANY
OF THE FACILITIES OR ANY PROPERTY; (VI) TO THE COMPANY’S KNOWLEDGE, THERE HAVE
NOT BEEN IN THE PAST, AND ARE NOT NOW, ANY UNDERGROUND TANKS OR UNDERGROUND
IMPROVEMENTS AT, ON OR UNDER ANY PROPERTY, INCLUDING TREATMENT OR STORAGE TANKS,
SUMPS, OR WATER, GAS OR OIL WELLS; AND (VII) THE COMPANY’S USES AND ACTIVITIES
AT ITS FACILITIES HAVE AT ALL TIMES MATERIALLY COMPLIED WITH ALL

 

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ENVIRONMENTAL AND SAFETY LAWS.

 

3.14.           TAX MATTERS.

 

3.14.1.        THE COMPANY AND ANY CONSOLIDATED, COMBINED, UNITARY OR AGGREGATE
GROUP FOR TAX PURPOSES OF WHICH THE COMPANY IS OR HAS BEEN A MEMBER, HAVE
PROPERLY COMPLETED AND TIMELY FILED ALL TAX RETURNS REQUIRED TO BE FILED BY THEM
AND HAVE TIMELY PAID ALL TAXES WHETHER OR NOT SHOWN ON ANY TAX RETURN.  ALL TAX
RETURNS WERE COMPLETE AND ACCURATE AND HAVE BEEN PREPARED IN SUBSTANTIAL
COMPLIANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS.  ALL AMOUNTS SHOWN ON THE TAX
RETURNS TO BE DUE ON OR BEFORE THE CLOSING DATE HAVE BEEN OR WILL BE PAID ON OR
BEFORE THE CLOSING DATE.  THE COMPANY HAS DISCLOSED ON ITS INCOME TAX RETURNS IN
ANY YEAR FOR WHICH THE STATUTE OF LIMITATIONS HAS NOT EXPIRED ALL POSITIONS THAT
WOULD REASONABLY BE EXPECTED TO GIVE RISE TO A MATERIAL UNDERSTATEMENT PENALTY
OR ANY SIMILAR LEGAL REQUIREMENT.

 

3.14.2.        THE COMPANY HAS DELIVERED OR MADE AVAILABLE TO PURCHASER
(I) COMPLETE AND CORRECT COPIES OF ALL TAX RETURNS OF THE COMPANY RELATING TO
TAXES FOR ALL TAXABLE PERIODS INCLUDING RELATED WORKPAPERS, (II) ALL FOREIGN
STATUTORY ACCOUNTS OF THE COMPANY, AND (III) COMPLETE AND CORRECT COPIES OF ALL
PRIVATE LETTER RULINGS, REVENUE AGENT REPORTS, INFORMATION DOCUMENT REQUESTS,
NOTICES OF PROPOSED DEFICIENCIES, DEFICIENCY NOTICES, PROTESTS, PETITIONS,
CLOSING AGREEMENTS, SETTLEMENT AGREEMENTS, PENDING RULING REQUESTS AND ANY
SIMILAR DOCUMENTS SUBMITTED BY, RECEIVED BY, OR AGREED TO BY OR ON BEHALF OF THE
COMPANY RELATING TO TAXES FOR ALL TAXABLE PERIODS FOR WHICH THE STATUTE OF
LIMITATIONS HAS NOT YET EXPIRED.  THE COMPANY HAS NOT BEEN INFORMED BY ANY
JURISDICTION THAT THE JURISDICTION BELIEVES THAT THE COMPANY WAS REQUIRED TO
FILE ANY TAX RETURN THAT WAS NOT FILED.

 

3.14.3.        THE COMPANY BALANCE SHEET REFLECTS ALL LIABILITY FOR UNPAID TAXES
OF THE COMPANY FOR PERIODS (OR PORTIONS OF PERIODS) THROUGH THE COMPANY BALANCE
SHEET DATE.  THE COMPANY HAS NO LIABILITY FOR UNPAID TAXES ACCRUING AFTER THE
COMPANY BALANCE SHEET DATE EXCEPT FOR TAXES ARISING IN THE ORDINARY COURSE OF
BUSINESS SUBSEQUENT TO THE COMPANY BALANCE SHEET DATE.

 

3.14.4.        THERE IS (I) NO CLAIM FOR TAXES BEING ASSERTED AGAINST THE
COMPANY THAT HAS RESULTED IN A LIEN AGAINST THE PROPERTY OF THE COMPANY OTHER
THAN LIENS FOR TAXES NOT YET DUE AND PAYABLE, (II) NO AUDIT OR PENDING AUDIT OF,
OR TAX CONTROVERSY ASSOCIATED WITH, ANY TAX RETURN OF THE COMPANY BEING
CONDUCTED BY A TAX AUTHORITY, (III) NO EXTENSION OF ANY STATUTE OF LIMITATIONS
ON THE ASSESSMENT OF ANY TAXES GRANTED BY THE COMPANY CURRENTLY IN EFFECT, AND
(IV) NO AGREEMENT BY THE COMPANY TO ANY EXTENSION OF TIME FOR FILING ANY TAX
RETURN WHICH HAS NOT BEEN FILED.

 

3.14.5.        THE COMPANY HAS NOT BEEN, NOR WILL IT BE, REQUIRED TO INCLUDE ANY
MATERIAL ADJUSTMENT IN TAXABLE INCOME FOR ANY TAX PERIOD (OR PORTION THEREOF)
ENDING AFTER THE CLOSING DATE AS A RESULT OF TRANSACTIONS OR EVENTS OCCURRING,
OR ACCOUNTING METHODS EMPLOYED, PRIOR TO THE CLOSING.

 

3.14.6.        THE COMPANY (I) IS NOT A PARTY TO NOR BOUND BY ANY TAX SHARING,
TAX INDEMNITY, OR TAX ALLOCATION AGREEMENT, NOR DOES THE COMPANY HAS ANY
LIABILITY OR POTENTIAL LIABILITY TO ANOTHER PARTY UNDER ANY SUCH AGREEMENT;
(II) IS NOT LIABLE FOR TAXES OF ANY OTHER PERSON PURSUANT TO ANY CONTRACT OR ANY
LEGAL REQUIREMENT, NOR IS IT CURRENTLY UNDER ANY CONTRACTUAL OBLIGATION TO
INDEMNIFY ANY PERSON WITH RESPECT TO ANY AMOUNTS OF SUCH PERSON’S TAXES OR IS A
PARTY TO ANY CONTRACT PROVIDING FOR PAYMENTS BY AN ACQUIRED CORPORATION WITH
RESPECT TO ANY AMOUNT OF TAXES OF ANY OTHER PERSON; (III) HAS NOT REQUESTED NOR
RECEIVED A RULING FROM ANY TAX AUTHORITY OR SIGNED A CLOSING OR OTHER AGREEMENT
WITH ANY TAX AUTHORITY, NOR HAS ANY THE COMPANY OR ANYONE ACTING ON ITS BEHALF
REQUESTED OR RECEIVED A RULING FROM ANY TAXATION AUTHORITY OR SIGNED A CLOSING
OR OTHER AGREEMENT WITH ANY TAXATION AUTHORITY.

 

3.14.7.        NO WRITTEN NOTICE HAS EVER BEEN DELIVERED BY ANY GOVERNMENTAL
ENTITY TO THE

 

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COMPANY IN A JURISDICTION WHERE IT DOES NOT FILE A TAX RETURN THAT CLAIMS THAT
IT IS OR MAY BE SUBJECT TO TAXATION BY THAT JURISDICTION WHICH HAS RESULTED OR
COULD REASONABLY BE EXPECTED TO RESULT IN AN OBLIGATION TO PAY MATERIAL TAXES.
THE COMPANY HAS IN ITS POSSESSION OFFICIAL FOREIGN GOVERNMENT RECEIPTS FOR ANY
TAXES PAID BY IT TO ANY FOREIGN TAX AUTHORITIES.

 

3.14.8.        THE COMPANY HAS PROVIDED TO THE PURCHASER ALL DOCUMENTATION
RELATING TO ANY APPLICABLE TAX HOLIDAYS OR INCENTIVES.  THE COMPANY IS IN
COMPLIANCE WITH THE REQUIREMENTS FOR ANY APPLICABLE TAX HOLIDAYS OR INCENTIVES
AND NONE OF THE TAX HOLIDAYS OR INCENTIVES WILL BE JEOPARDIZED BY THE
TRANSACTION CONTEMPLATED IN THIS AGREEMENT.

 

3.14.9.        THE COMPANY IS NOT NOR HAS IT EVER BEEN A “UNITED STATES REAL
PROPERTY HOLDING CORPORATION” WITHIN THE MEANING OF SECTION 897 OF THE CODE, AND
THE COMPANY HAS FILED WITH THE INTERNAL REVENUE SERVICE ALL STATEMENTS, IF ANY,
WHICH ARE REQUIRED UNDER SECTION 1.897-2(H) OF THE TREASURY REGULATIONS
PROMULGATED THEREUNDER.

 

3.14.10.      THE COMPANY HAS COMPLIED (AND UNTIL THE CLOSING WILL COMPLY) WITH
ALL APPLICABLE LEGAL REQUIREMENTS RELATING TO THE PAYMENT, REPORTING AND
WITHHOLDING OF TAXES (INCLUDING WITHHOLDING OF TAXES PURSUANT TO SECTIONS 1441,
1442, 1445 AND 1446 OF THE CODE OR SIMILAR PROVISIONS UNDER ANY FOREIGN LAW),
HAS, WITHIN THE TIME AND IN THE MANNER PRESCRIBED BY LAW, WITHHELD FROM ANY
PAYMENTS (INCLUDING, WITHOUT LIMITATION, EMPLOYEE WAGES OR CONSULTING
COMPENSATION) AND PAID OVER TO THE PROPER GOVERNMENTAL AUTHORITIES (OR IS
PROPERLY HOLDING FOR SUCH TIMELY PAYMENT) ALL AMOUNTS REQUIRED TO BE SO WITHHELD
AND PAID OVER UNDER ALL APPLICABLE LEGAL REQUIREMENTS, INCLUDING FEDERAL AND
STATE INCOME TAXES, FEDERAL INSURANCE CONTRIBUTION ACT, MEDICARE, FEDERAL
UNEMPLOYMENT TAX ACT, RELEVANT STATE INCOME AND EMPLOYMENT TAX WITHHOLDING LAWS,
AND HAS TIMELY FILED ALL WITHHOLDING TAX RETURNS, FOR ALL PERIODS THROUGH AND
INCLUDING THE CLOSING DATE.  THE COMPANY HAS COLLECTED (AND REMITTED TO THE
PROPER AUTHORITIES OF ANY STATE OR OTHER JURISDICTION) AND/OR PAID ALL SALES
AND/OR USE TAXES REQUIRED UNDER ALL APPLICABLE LEGAL REQUIREMENTS TO BE CHARGED
ON ANY TRANSACTIONS THAT IT HAS ENGAGED IN.

 

3.14.11.      THERE IS NO AGREEMENT, PLAN, ARRANGEMENT OR OTHER CONTRACT
COVERING ANY CURRENT OR FORMER EMPLOYEE OR OTHER SERVICE PROVIDER OF THE COMPANY
OR ERISA AFFILIATE (AS DEFINED BELOW) TO WHICH THE COMPANY IS A PARTY OR BY
WHICH THE COMPANY IS BOUND THAT, CONSIDERED INDIVIDUALLY OR CONSIDERED
COLLECTIVELY WITH ANY OTHER SUCH AGREEMENTS, PLANS, ARRANGEMENTS OR OTHER
CONTRACTS, THAT HAS RESULTED, WILL, OR COULD REASONABLY BE EXPECTED TO, RESULT,
ON ACCOUNT OF ENTERING INTO THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER ALONE
OR UPON THE OCCURRENCE OF ANY ADDITIONAL OR SUBSEQUENT EVENTS, INCLUDING, ANY
TERMINATION OF EMPLOYMENT), IN THE PAYMENT OF ANY AMOUNT THAT COULD REASONABLY
BE EXPECTED TO BE NON-DEDUCTIBLE UNDER SECTION 162 OF THE CODE (OR ANY
CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW) OR
CHARACTERIZED AS AN “EXCESS PARACHUTE PAYMENT” WITHIN THE MEANING OF
SECTION 280G OF THE CODE (OR ANY CORRESPONDING OR SIMILAR PROVISION OF STATE,
LOCAL OR FOREIGN TAX LAW).  SCHEDULE 3.14.11 OF THE DISCLOSURE SCHEDULE LISTS
EACH PERSON WHO THE COMPANY REASONABLY BELIEVES IS, WITH RESPECT TO THE COMPANY
AND/OR ANY ERISA AFFILIATE, A “DISQUALIFIED INDIVIDUAL” (WITHIN THE MEANING OF
SECTION 280G OF THE CODE AND THE REGULATIONS PROMULGATED THEREUNDER), AS
DETERMINED AS OF THE DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT.

 

3.14.12.      SCHEDULE 3.14.12 OF THE DISCLOSURE SCHEDULE SETS FORTH EACH
JURISDICTION (OTHER THAN UNITED STATES FEDERAL) IN WHICH THE COMPANY FILES, IS
REQUIRED TO FILE OR HAS BEEN REQUIRED TO FILE A TAX RETURN OR IS OR HAS BEEN
LIABLE FOR ANY TAXES ON A “NEXUS” BASIS AND EACH JURISDICTION THAT HAS SENT
NOTICES OR COMMUNICATIONS OF ANY KIND REQUESTING INFORMATION RELATING TO THE
COMPANY’S NEXUS WITH SUCH JURISDICTION.

 

3.14.13.      THE COMPANY IS NOT NOR HAS IT EVEN BEEN A PARTY TO A TRANSACTION
OR AGREEMENT THAT IS IN CONFLICT WITH THE TAX RULES ON TRANSFER PRICING IN ANY
RELEVANT JURISDICTION.

 

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3.14.14.      THE COMPANY HAS NOT CONSUMMATED, HAS PARTICIPATED IN, OR IS
CURRENTLY PARTICIPATING IN ANY TRANSACTION WHICH WAS OR IS A “TAX SHELTER”
TRANSACTION AS DEFINED IN SECTIONS 6662, 6011, 6012 OR 6111 OF THE CODE OR THE
TREASURY REGULATIONS PROMULGATED THEREUNDER OR IN SIMILAR PROVISIONS OF FOREIGN
LAW OR WHICH WAS OR IS A “LISTED TRANSACTION” OR A “REPORTABLE TRANSACTION” AS
THOSE TERMS ARE DEFINED IN THE CODE AND THE TREASURY REGULATIONS THEREUNDER OR
IN SIMILAR PROVISIONS OF FOREIGN LAW.

 

3.14.15.      SCHEDULE 3.14.15 THE DISCLOSURE SCHEDULE SETS FORTH THE FOLLOWING
INFORMATION WITH RESPECT TO THE COMPANY AS OF THE MOST RECENT PRACTICABLE DATE:
(I) THE BASIS IN ITS ASSETS AND (II) THE AMOUNT OF ANY NET OPERATING LOSS, NET
CAPITAL LOSS, UNUSED INVESTMENT OR OTHER CREDIT, UNUSED FOREIGN TAX, OR EXCESS
CHARITABLE CONTRIBUTION ALLOCABLE TO IT.

 

3.14.16.      NO STOCK TRANSFER TAXES, SALES TAXES, USE TAXES, REAL ESTATE
TRANSFER OR GAINS TAXES OR OTHER SIMILAR TAXES WILL BE IMPOSED ON THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

3.14.17.      THE COMPANY HAS ALWAYS BEEN TREATED AS A PARTNERSHIP FOR FEDERAL
INCOME TAX PURPOSES AND HAS NOT MADE AN ELECTION TO BE TREATED AS AN ASSOCIATION
TAXABLE AS A CORPORATION.

 

3.15.           EMPLOYEE BENEFIT PLANS AND EMPLOYEE MATTERS.

 

3.15.1.        SCHEDULE 3.15.1 OF THE DISCLOSURE SCHEDULE LISTS, WITH RESPECT TO
THE COMPANY AND ANY TRADE OR BUSINESS (WHETHER OR NOT INCORPORATED) WHICH IS
TREATED AS A SINGLE EMPLOYER WITH THE COMPANY (AN “ERISA AFFILIATE”) WITHIN THE
MEANING OF SECTION 414(B), (C), (M) OR (O) OF THE CODE, (I) ALL “EMPLOYEE
BENEFIT PLANS” WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (II) EACH LOAN TO AN EMPLOYEE
IN EXCESS OF $10,000, (III) ALL STOCK OPTION, STOCK PURCHASE, PHANTOM STOCK,
STOCK APPRECIATION RIGHT, SUPPLEMENTAL RETIREMENT, SEVERANCE, SABBATICAL,
MEDICAL, DENTAL, VISION CARE, DISABILITY, EMPLOYEE RELOCATION, CAFETERIA BENEFIT
(SECTION 125 OF THE CODE), DEPENDENT CARE (SECTION 129 OF THE CODE), LIFE
INSURANCE OR ACCIDENT INSURANCE PLANS, PROGRAMS OR ARRANGEMENTS, (IV) ALL BONUS,
PENSION, PROFIT SHARING, SAVINGS, SEVERANCE, RETIREMENT, DEFERRED COMPENSATION
OR INCENTIVE PLANS, PROGRAMS OR ARRANGEMENTS, (V) ALL OTHER FRINGE OR EMPLOYEE
BENEFIT PLANS, PROGRAMS OR ARRANGEMENTS THAT APPLY TO SENIOR MANAGEMENT AND THAT
DO NOT GENERALLY APPLY TO ALL EMPLOYEES, AND (VI) ALL EMPLOYMENT OR EXECUTIVE
COMPENSATION OR SEVERANCE AGREEMENTS, WRITTEN OR OTHERWISE, AS TO WHICH
UNSATISFIED OBLIGATIONS OF THE COMPANY OF GREATER THAN $10,000 REMAIN FOR THE
BENEFIT OF, OR RELATING TO, ANY PRESENT OR FORMER EMPLOYEE, CONSULTANT OR
NON-EMPLOYEE MANAGER (OR DIRECTOR, AS THE CASE MAY BE) OF THE COMPANY (ALL OF
THE FOREGOING DESCRIBED IN CLAUSES (I) THROUGH (VI), COLLECTIVELY, THE “COMPANY
EMPLOYEE PLANS”, AND EACH A “COMPANY EMPLOYEE PLAN”).

 

3.15.2.        THE COMPANY HAS FURNISHED TO PURCHASER A TRUE, CORRECT AND
COMPLETE COPY OF EACH OF THE COMPANY EMPLOYEE PLANS AND RELATED PLAN DOCUMENTS
(INCLUDING TRUST DOCUMENTS, INSURANCE POLICIES OR CONTRACTS, EMPLOYEE BOOKLETS,
SUMMARY PLAN DESCRIPTIONS AND OTHER AUTHORIZING DOCUMENTS, AND ANY MATERIAL
EMPLOYEE COMMUNICATIONS RELATING THERETO) AND HAS, WITH RESPECT TO EACH COMPANY
EMPLOYEE PLAN WHICH IS SUBJECT TO ERISA REPORTING REQUIREMENTS, PROVIDED TO
PURCHASER TRUE, CORRECT AND COMPLETE COPIES OF THE FORM 5500 REPORTS FILED FOR
THE LAST THREE PLAN YEARS.  ANY COMPANY EMPLOYEE PLAN INTENDED TO BE QUALIFIED
UNDER SECTION 401(A) OF THE CODE HAS EITHER OBTAINED FROM THE INTERNAL REVENUE
SERVICE A FAVORABLE DETERMINATION LETTER AS TO ITS QUALIFIED STATUS UNDER THE
CODE, INCLUDING ALL AMENDMENTS TO THE CODE EFFECTED BY THE TAX REFORM ACT OF
1986 AND SUBSEQUENT LEGISLATION, OR HAS APPLIED (OR HAS TIME REMAINING IN WHICH
TO APPLY) TO THE INTERNAL REVENUE SERVICE FOR SUCH A DETERMINATION LETTER PRIOR
TO THE EXPIRATION OF THE REQUISITE PERIOD UNDER APPLICABLE TREASURY REGULATIONS
OR INTERNAL REVENUE SERVICE PRONOUNCEMENTS IN WHICH TO APPLY FOR SUCH
DETERMINATION LETTER AND TO MAKE ANY AMENDMENTS NECESSARY TO OBTAIN A FAVORABLE
DETERMINATION OR HAS BEEN ESTABLISHED UNDER A STANDARDIZED PROTOTYPE PLAN FOR
WHICH AN INTERNAL REVENUE SERVICE OPINION LETTER HAS BEEN OBTAINED BY THE

 

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PLAN SPONSOR AND IS VALID AS TO THE ADOPTING EMPLOYER.  THE COMPANY HAS ALSO
PROVIDED TO PURCHASER A TRUE, CORRECT AND COMPLETE COPY OF THE MOST RECENT
INTERNAL REVENUE SERVICE DETERMINATION OR OPINION LETTER ISSUED WITH RESPECT TO
EACH SUCH COMPANY EMPLOYEE PLAN, AND NOTHING HAS OCCURRED SINCE THE ISSUANCE OF
EACH SUCH LETTER WHICH WOULD REASONABLY BE EXPECTED TO CAUSE THE LOSS OF THE
TAX-QUALIFIED STATUS OF ANY COMPANY EMPLOYEE PLAN SUBJECT TO SECTION 401(A) OF
THE CODE.  THE COMPANY HAS ALSO PROVIDED TO PURCHASER ALL REGISTRATION
STATEMENTS AND PROSPECTUSES PREPARED IN CONNECTION WITH EACH COMPANY EMPLOYEE
PLAN.  ALL INDIVIDUALS WHO, PURSUANT TO THE TERMS OF ANY COMPANY EMPLOYEE PLAN,
ARE ENTITLED TO PARTICIPATE IN ANY COMPANY EMPLOYEE PLAN, ARE CURRENTLY
PARTICIPATING IN SUCH COMPANY EMPLOYEE PLAN OR HAVE BEEN OFFERED AN OPPORTUNITY
TO DO SO AND HAVE DECLINED IN WRITING.  NO EMPLOYEE OF THE COMPANY AND NO PERSON
SUBJECT TO ANY HEALTH PLAN OF THE COMPANY HAS MADE MEDICAL CLAIMS THROUGH ANY
SUCH HEALTH PLAN DURING THE 12 MONTHS PRECEDING THE DATE OF SIGNING THE ORIGINAL
PURCHASE AGREEMENT FOR MORE THAN $25,000 IN THE AGGREGATE FOR WHICH THE COMPANY
IS RESPONSIBLE.  FOR THE PURPOSES OF THE FORGOING SENTENCE, ANY EXCEPTION TO
SUCH REPRESENTATION AND WARRANTY SET FORTH IN THE DISCLOSURE LETTER SHALL BE
STATED GENERALLY AND SHALL NOT IDENTIFY ANY EMPLOYEE OF THE COMPANY OR PERSON
SUBJECT TO ANY HEALTH PLAN OF THE COMPANY WHO HAS MADE MEDICAL CLAIMS.  THE
COMPANY DOES NOT SPONSOR OR MAINTAIN ANY SELF-FUNDED EMPLOYEE BENEFIT PLAN.

 

3.15.3.        NONE OF THE COMPANY EMPLOYEE PLANS PROMISES OR PROVIDES RETIREE
MEDICAL OR OTHER RETIREE WELFARE BENEFITS TO ANY PERSON OTHER THAN AS REQUIRED
UNDER THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985, AS AMENDED
(“COBRA”), OR SIMILAR STATE LAW.  THERE HAS BEEN NO “PROHIBITED TRANSACTION”
(WITHIN THE MEANING OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE AND NOT
EXEMPT UNDER SECTION 408 OF ERISA AND REGULATORY GUIDANCE THEREUNDER) WITH
RESPECT TO ANY COMPANY EMPLOYEE PLAN.  EACH COMPANY EMPLOYEE PLAN HAS BEEN
ADMINISTERED IN ACCORDANCE WITH ITS TERMS AND IN COMPLIANCE WITH THE
REQUIREMENTS PRESCRIBED BY ANY AND ALL STATUTES, RULES AND REGULATIONS
(INCLUDING ERISA AND THE CODE), AND THE COMPANY AND EACH ERISA AFFILIATE HAS
PERFORMED ALL OBLIGATIONS REQUIRED TO BE PERFORMED BY IT UNDER, IS NOT IN
DEFAULT UNDER OR IN VIOLATION OF, AND HAS NO KNOWLEDGE OF ANY DEFAULT OR
VIOLATION BY ANY OTHER PARTY TO, ANY OF THE COMPANY EMPLOYEE PLANS.  NEITHER THE
COMPANY NOR ANY ERISA AFFILIATE IS SUBJECT TO ANY LIABILITY OR PENALTY UNDER
SECTIONS 4976 THROUGH 4980 OF THE CODE OR TITLE I OF ERISA WITH RESPECT TO ANY
OF THE COMPANY EMPLOYEE PLANS.  ALL CONTRIBUTIONS REQUIRED TO BE MADE BY THE
COMPANY OR ANY ERISA AFFILIATE TO ANY COMPANY EMPLOYEE PLAN HAVE BEEN MADE ON OR
BEFORE THEIR DUE DATES AND A REASONABLE AMOUNT HAS BEEN ACCRUED FOR
CONTRIBUTIONS TO EACH COMPANY EMPLOYEE PLAN FOR THE CURRENT PLAN YEARS (AND NO
FURTHER CONTRIBUTIONS WILL BE DUE OR WILL HAVE ACCRUED THEREUNDER AS OF THE
CLOSING DATE, OTHER THAN CONTRIBUTIONS ACCRUED IN THE ORDINARY COURSE OF
BUSINESS, CONSISTENT WITH PAST PRACTICE, AFTER THE COMPANY BALANCE SHEET DATE AS
A RESULT OF THE OPERATIONS OF COMPANY AFTER THE COMPANY BALANCE SHEET DATE).  IN
ADDITION, WITH RESPECT TO EACH COMPANY EMPLOYEE PLAN INTENDED TO INCLUDE A CODE
SECTION 401(K) ARRANGEMENT, THE COMPANY AND ERISA AFFILIATES HAVE AT ALL TIMES
MADE TIMELY DEPOSITS OF EMPLOYEE SALARY REDUCTION CONTRIBUTIONS AND PARTICIPANT
LOAN REPAYMENTS, AS DETERMINED PURSUANT TO REGULATIONS ISSUED BY THE UNITED
STATES DEPARTMENT OF LABOR.  NO COMPANY EMPLOYEE PLAN IS COVERED BY, AND NEITHER
THE COMPANY NOR ANY ERISA AFFILIATE HAS INCURRED OR EXPECTS TO INCUR ANY
LIABILITY UNDER TITLE IV OF ERISA OR SECTION 412 OF THE CODE.  EACH COMPANY
EMPLOYEE PLAN CAN BE AMENDED, TERMINATED OR OTHERWISE DISCONTINUED AFTER THE
CLOSING IN ACCORDANCE WITH ITS TERMS, WITHOUT LIABILITY TO PURCHASER AND/OR THE
COMPANY (OTHER THAN ORDINARY ADMINISTRATIVE EXPENSES TYPICALLY INCURRED IN A
TERMINATION EVENT).  WITH RESPECT TO EACH COMPANY EMPLOYEE PLAN SUBJECT TO ERISA
AS EITHER AN EMPLOYEE PENSION BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(2) OF
ERISA OR AN EMPLOYEE WELFARE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(1) OF
ERISA, THE COMPANY HAS PREPARED IN GOOD FAITH AND TIMELY FILED ALL REQUISITE
GOVERNMENTAL REPORTS (WHICH WERE TRUE, CORRECT AND COMPLETE AS OF THE DATE
FILED), INCLUDING ANY REQUIRED AUDIT REPORTS, AND HAS PROPERLY AND TIMELY FILED
AND DISTRIBUTED OR POSTED ALL NOTICES AND REPORTS TO EMPLOYEES REQUIRED TO BE
FILED, DISTRIBUTED OR POSTED WITH RESPECT TO EACH SUCH COMPANY EMPLOYEE PLAN. 
NO SUIT, ADMINISTRATIVE PROCEEDING, ACTION OR OTHER LITIGATION HAS BEEN BROUGHT,
OR TO THE KNOWLEDGE OF THE

 

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COMPANY, IS THREATENED, AGAINST OR WITH RESPECT TO ANY SUCH COMPANY EMPLOYEE
PLAN, INCLUDING ANY AUDIT OR INQUIRY BY THE INTERNAL REVENUE SERVICE OR UNITED
STATES DEPARTMENT OF LABOR.

 

3.15.4.        WITH RESPECT TO EACH COMPANY EMPLOYEE PLAN, THE COMPANY HAS
COMPLIED WITH (I) THE APPLICABLE HEALTH CARE CONTINUATION AND NOTICE PROVISIONS
OF COBRA AND THE REGULATIONS (INCLUDING PROPOSED REGULATIONS) THEREUNDER,
(II) THE APPLICABLE REQUIREMENTS OF THE FAMILY MEDICAL AND LEAVE ACT OF 1993 AND
THE REGULATIONS (INCLUDING PROPOSED REGULATIONS) THEREUNDER, (III) THE
APPLICABLE REQUIREMENTS OF THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY
ACT OF 1996 AND THE REGULATIONS (INCLUDING PROPOSED REGULATIONS) THEREUNDER,
(IV) THE APPLICABLE REQUIREMENTS OF THE AMERICANS WITH DISABILITIES ACT OF 1990,
AS AMENDED AND THE REGULATIONS (INCLUDING PROPOSED REGULATIONS) THEREUNDER,
(V) THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, AND (VI) THE
APPLICABLE REQUIREMENTS OF THE WOMEN’S HEALTH AND CANCER RIGHTS ACT OF 1998 AND
THE REGULATIONS (INCLUDING PROPOSED REGULATIONS) THEREUNDER.

 

3.15.5.        THERE HAS BEEN NO AMENDMENT TO, WRITTEN INTERPRETATION OR
ANNOUNCEMENT (WHETHER OR NOT WRITTEN) BY THE COMPANY OR ANY ERISA AFFILIATE
RELATING TO, OR CHANGE IN PARTICIPATION OR COVERAGE UNDER, ANY COMPANY EMPLOYEE
PLAN WHICH WOULD MATERIALLY INCREASE THE EXPENSE OF MAINTAINING SUCH COMPANY
EMPLOYEE PLAN ABOVE THE LEVEL OF EXPENSE INCURRED WITH RESPECT TO SUCH COMPANY
EMPLOYEE PLAN FOR THE MOST RECENT FISCAL YEAR INCLUDED IN THE FINANCIAL
STATEMENTS.  NO COMPANY EMPLOYEE PLAN WILL BE SUBJECT TO ANY SURRENDER FEES OR
SERVICE FEES UPON TERMINATION OTHER THAN THE NORMAL AND REASONABLE
ADMINISTRATIVE FEES ASSOCIATED WITH THE TERMINATION OF BENEFIT PLANS.

 

3.15.6.        NEITHER THE COMPANY NOR ANY CURRENT OR FORMER ERISA AFFILIATE
CURRENTLY MAINTAINS, SPONSORS, PARTICIPATES IN OR CONTRIBUTES TO, OR HAS EVER
MAINTAINED, ESTABLISHED, SPONSORED, PARTICIPATED IN, OR CONTRIBUTED TO, ANY
PENSION PLAN (WITHIN THE MEANING OF SECTION 3(2) OF ERISA) WHICH IS SUBJECT TO
PART 3 OF SUBTITLE B OF TITLE I OF ERISA, TITLE IV OF ERISA OR SECTION 412 OF
THE CODE. NEITHER THE COMPANY NOR ANY ERISA AFFILIATE IS A PARTY TO, OR HAS MADE
ANY CONTRIBUTION TO OR OTHERWISE INCURRED ANY OBLIGATION UNDER, ANY
“MULTIEMPLOYER PLAN” AS SUCH TERM IS DEFINED IN SECTION 3(37) OF ERISA OR ANY
“MULTIPLE EMPLOYER PLAN” AS SUCH TERM IS DEFINED IN SECTION 413(C) OF THE CODE.

 

3.15.7.        EACH COMPENSATION AND BENEFIT PLAN MAINTAINED OR CONTRIBUTED TO
BY THE COMPANY UNDER THE LAW OR APPLICABLE CUSTOM OR RULE OF THE RELEVANT
JURISDICTION OUTSIDE OF THE UNITED STATES (EACH SUCH PLAN, A “FOREIGN PLAN”) IS
LISTED IN SCHEDULE 3.15.7 OF THE DISCLOSURE SCHEDULE.  AS REGARDS EACH FOREIGN
PLAN, (I) SUCH FOREIGN PLAN IS IN MATERIAL COMPLIANCE WITH THE PROVISIONS OF THE
LEGAL REQUIREMENTS OF EACH JURISDICTION IN WHICH SUCH FOREIGN PLAN IS
MAINTAINED, TO THE EXTENT THOSE LEGAL REQUIREMENTS ARE APPLICABLE TO SUCH
FOREIGN PLAN, (II) ALL CONTRIBUTIONS TO, AND MATERIAL PAYMENTS FROM, SUCH
FOREIGN PLAN WHICH MAY HAVE BEEN REQUIRED TO BE MADE IN ACCORDANCE WITH THE
TERMS OF SUCH FOREIGN PLAN, AND, WHEN APPLICABLE, THE LEGAL REQUIREMENTS OF THE
JURISDICTION IN WHICH SUCH FOREIGN PLAN IS MAINTAINED, HAVE BEEN TIMELY MADE OR
SHALL BE MADE BY THE CLOSING DATE, AND ALL SUCH CONTRIBUTIONS TO SUCH FOREIGN
PLAN, AND ALL PAYMENTS UNDER SUCH FOREIGN PLAN, FOR ANY PERIOD ENDING BEFORE THE
CLOSING DATE THAT ARE NOT YET, BUT WILL BE, REQUIRED TO BE MADE, ARE REFLECTED
AS AN ACCRUED LIABILITY ON THE COMPANY BALANCE SHEET, (III) THE COMPANY AND EACH
ERISA AFFILIATE HAS MATERIALLY COMPLIED WITH ALL APPLICABLE REPORTING AND NOTICE
REQUIREMENTS, AND SUCH FOREIGN PLAN HAS OBTAINED FROM THE GOVERNMENTAL ENTITY
HAVING JURISDICTION WITH RESPECT TO SUCH FOREIGN PLAN ANY REQUIRED
DETERMINATIONS, IF ANY, THAT SUCH FOREIGN PLAN IS IN COMPLIANCE WITH THE LEGAL
REQUIREMENTS OF THE RELEVANT JURISDICTION IF SUCH DETERMINATIONS ARE REQUIRED IN
ORDER TO GIVE EFFECT TO SUCH FOREIGN PLAN, (IV) SUCH FOREIGN PLAN HAS BEEN
ADMINISTERED IN ALL MATERIAL RESPECTS AT ALL TIMES IN ACCORDANCE WITH ITS TERMS
AND APPLICABLE LEGAL REQUIREMENTS, (V) TO THE KNOWLEDGE OF THE COMPANY, THERE
ARE NO PENDING INVESTIGATIONS BY ANY GOVERNMENTAL BODY INVOLVING SUCH FOREIGN
PLAN, AND NO PENDING CLAIMS (EXCEPT FOR CLAIMS FOR BENEFITS PAYABLE IN THE
NORMAL OPERATION OF SUCH FOREIGN PLAN), SUITS OR PROCEEDINGS AGAINST SUCH
FOREIGN PLAN OR ASSERTING ANY RIGHTS OR CLAIMS TO BENEFITS UNDER SUCH FOREIGN
PLAN, (VI) THE

 

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CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL NOT BY
ITSELF CREATE OR OTHERWISE RESULT IN ANY LIABILITY WITH RESPECT TO SUCH FOREIGN
PLAN, AND (VII) EXCEPT AS REQUIRED BY APPLICABLE LEGAL REQUIREMENTS, NO
CONDITION EXISTS THAT WOULD PREVENT THE COMPANY FROM TERMINATING OR AMENDING ANY
FOREIGN PLAN AT ANY TIME FOR ANY REASON IN ACCORDANCE WITH THE TERMS OF EACH
SUCH FOREIGN PLAN WITHOUT THE PAYMENT OF ANY FEES, COSTS OR EXPENSES (OTHER THAN
THE PAYMENT OF BENEFITS ACCRUED THROUGH THE DATE OF TERMINATION AND ANY NORMAL
AND REASONABLE EXPENSES TYPICALLY INCURRED IN A TERMINATION EVENT).  THE
BENEFITS AVAILABLE UNDER ALL FOREIGN PLANS IN THE AGGREGATE DO NOT PROVIDE
MATERIALLY GREATER BENEFITS TO EMPLOYEES OF THE COMPANY PARTICIPATING IN SUCH
PLANS THAN THE BENEFITS AVAILABLE UNDER THE COMPANY EMPLOYEE PLANS FOR EMPLOYEES
OF THE COMPANY IN THE UNITED STATES.  NO FOREIGN PLAN HAS UNFUNDED LIABILITIES
THAT WILL NOT BE OFFSET BY INSURANCE OR THAT ARE NOT FULLY ACCRUED ON THE
FINANCIAL STATEMENTS OF THE COMPANY IN ACCORDANCE WITH GAAP.

 

3.15.8.        SCHEDULE 3.15.8 OF THE DISCLOSURE SCHEDULE LISTS AS OF THE DATE
OF SIGNING THE ORIGINAL PURCHASE AGREEMENT EACH EMPLOYEE OF THE COMPANY WHO IS
NOT FULLY AVAILABLE TO PERFORM WORK BECAUSE OF DISABILITY OR OTHER LEAVE AND
ALSO LISTS, WITH RESPECT TO EACH SUCH EMPLOYEE, THE BASIS OF SUCH DISABILITY OR
LEAVE AND THE ANTICIPATED DATE OF RETURN TO FULL SERVICE.

 

3.15.9.        NONE OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE
CONSUMMATION OF THE TRANSACTION CONTEMPLATED HEREBY OR ANY TERMINATION OF
EMPLOYMENT OR SERVICE IN CONNECTION THEREWITH OR SUBSEQUENT THERETO WILL,
INDIVIDUALLY OR TOGETHER WITH THE OCCURRENCE OF SOME OTHER EVENT, (I) RESULT IN
ANY PAYMENT (INCLUDING SEVERANCE, UNEMPLOYMENT COMPENSATION, GOLDEN PARACHUTE,
BONUS OR OTHERWISE) BECOMING DUE TO ANY PERSON, (II) MATERIALLY INCREASE OR
OTHERWISE ENHANCE ANY BENEFITS OTHERWISE PAYABLE BY THE COMPANY, (III) RESULT IN
THE ACCELERATION OF THE TIME OF PAYMENT OR VESTING OF ANY SUCH BENEFITS, EXCEPT
AS REQUIRED UNDER SECTION 411(D)(3) OF THE CODE, (IV) INCREASE THE AMOUNT OF
COMPENSATION DUE TO ANY PERSON, OR (V) RESULT IN THE FORGIVENESS IN WHOLE OR IN
PART OF ANY OUTSTANDING LOANS MADE BY THE COMPANY TO ANY PERSON.

 

3.15.10.      THE COMPANY IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL
CURRENTLY APPLICABLE LEGAL REQUIREMENTS RESPECTING EMPLOYMENT, DISCRIMINATION IN
EMPLOYMENT, TERMS AND CONDITIONS OF EMPLOYMENT, WORKER CLASSIFICATION (INCLUDING
THE PROPER CLASSIFICATION OF WORKERS AS INDEPENDENT CONTRACTORS AND
CONSULTANTS), WAGES, HOURS AND OCCUPATIONAL SAFETY AND HEALTH AND EMPLOYMENT
PRACTICES, INCLUDING THE IMMIGRATION REFORM AND CONTROL ACT, AND IS NOT ENGAGED
IN ANY UNFAIR LABOR PRACTICE.  ALL EMPLOYEES OF THE COMPANY WHO RESIDE IN THE
UNITED STATES OF AMERICA ARE AUTHORIZED FOR EMPLOYMENT BY THE COMPANY IN
ACCORDANCE WITH ALL UNITED STATES IMMIGRATION LAWS (INCLUDING THE IMMIGRATION
AND NATURALIZATION ACT, THE IMMIGRATION REFORM AND CONTROL ACT AND THE ILLEGAL
IMMIGRATION REFORM AND RESPONSIBILITY ACT, EACH AS AMENDED) AND THE REGULATIONS
PROMULGATED THEREUNDER.  THE COMPANY HAS COMPLETED AND RETAINED IN ACCORDANCE
WITH IMMIGRATION AND NATURALIZATION SERVICE REGULATIONS A FORM I-9 FOR ALL
EMPLOYEES HIRED ON OR AFTER NOVEMBER 7, 1986.  THE COMPANY HAS WITHHELD ALL
AMOUNTS REQUIRED BY LAW OR BY AGREEMENT TO BE WITHHELD FROM THE WAGES, SALARIES,
AND OTHER PAYMENTS TO EMPLOYEES; AND IS NOT LIABLE FOR ANY ARREARS OF WAGES,
COMPENSATION, TAXES, PENALTIES OR OTHER SUMS FOR FAILURE TO COMPLY WITH ANY OF
THE FOREGOING.  THE COMPANY HAS PAID IN FULL TO ALL EMPLOYEES, INDEPENDENT
CONTRACTORS AND CONSULTANTS ALL WAGES, SALARIES, COMMISSIONS, BONUSES, BENEFITS
AND OTHER COMPENSATION DUE TO OR ON BEHALF OF SUCH EMPLOYEES, INDEPENDENT
CONTRACTORS AND CONSULTANTS.  THE COMPANY IS LIABLE FOR ANY PAYMENT TO ANY TRUST
OR OTHER FUND OR TO ANY GOVERNMENTAL ENTITY, WITH RESPECT TO UNEMPLOYMENT
COMPENSATION BENEFITS, SOCIAL SECURITY OR OTHER BENEFITS OR OBLIGATIONS FOR
EMPLOYEES (OTHER THAN ROUTINE PAYMENTS TO BE MADE IN THE NORMAL COURSE OF
BUSINESS AND CONSISTENTLY WITH PAST PRACTICE).  THERE ARE NO PENDING CLAIMS
AGAINST THE COMPANY UNDER ANY WORKERS COMPENSATION PLAN OR POLICY OR FOR LONG
TERM DISABILITY.  THE COMPANY HAS NO OBLIGATIONS UNDER COBRA WITH RESPECT TO ANY
FORMER EMPLOYEES OR QUALIFYING BENEFICIARIES THEREUNDER, EXCEPT FOR OBLIGATIONS
THAT ARE NOT MATERIAL IN AMOUNT.  THERE ARE NO CONTROVERSIES PENDING OR, TO THE
KNOWLEDGE OF THE COMPANY, THREATENED, BETWEEN THE COMPANY AND ANY ITS EMPLOYEES,
WHICH CONTROVERSIES HAVE OR WOULD REASONABLY

 

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BE EXPECTED TO RESULT IN AN ACTION, SUIT, PROCEEDING, CLAIM, ARBITRATION OR
INVESTIGATION BEFORE ANY GOVERNMENTAL ENTITY.

 

3.15.11.      SCHEDULE 3.15.11 OF THE DISCLOSURE SCHEDULE SETS FORTH A TRUE,
CORRECT AND COMPLETE LIST OF ALL SEVERANCE CONTRACTS AND EMPLOYMENT CONTRACTS TO
WHICH THE COMPANY IS A PARTY OR BY WHICH THE COMPANY IS BOUND.  THE COMPANY HAS
NO OBLIGATION TO PAY ANY AMOUNT OR PROVIDE ANY BENEFIT TO ANY FORMER EMPLOYEE OR
OFFICER, OTHER THAN OBLIGATIONS (I) FOR WHICH COMPANY HAS ESTABLISHED A RESERVE
FOR SUCH AMOUNT ON THE COMPANY BALANCE SHEET AND (II) PURSUANT TO CONTRACTS
ENTERED INTO AFTER THE COMPANY BALANCE SHEET DATE AND DISCLOSED ON
SCHEDULE 3.15.11 OF THE DISCLOSURE SCHEDULE.  THE COMPANY IS NOT A PARTY TO NOR
BOUND BY ANY COLLECTIVE BARGAINING AGREEMENT OR OTHER LABOR UNION CONTRACT, NO
COLLECTIVE BARGAINING AGREEMENT IS BEING NEGOTIATED BY THE COMPANY AND THE
COMPANY HAS NO DUTY TO BARGAIN WITH ANY LABOR ORGANIZATION.  THERE IS NO PENDING
DEMAND FOR RECOGNITION OR ANY OTHER REQUEST OR DEMAND FROM A LABOR ORGANIZATION
FOR REPRESENTATIVE STATUS WITH RESPECT TO ANY PERSON EMPLOYED BY THE COMPANY. 
THE COMPANY HAS NO KNOWLEDGE OF ANY ACTIVITIES OR PROCEEDINGS OF ANY LABOR UNION
OR TO ORGANIZE THEIR RESPECTIVE EMPLOYEES.  THERE IS NO LABOR DISPUTE, STRIKE OR
WORK STOPPAGE AGAINST THE COMPANY PENDING OR, TO THE KNOWLEDGE OF THE COMPANY,
THREATENED, WHICH MAY INTERFERE WITH THE RESPECTIVE BUSINESS ACTIVITIES OF THE
COMPANY.  NEITHER THE COMPANY, NOR TO THE KNOWLEDGE OF THE COMPANY, ANY OF ITS
REPRESENTATIVES OR EMPLOYEES, HAS COMMITTED ANY UNFAIR LABOR PRACTICE IN
CONNECTION WITH THE OPERATION OF THE RESPECTIVE BUSINESSES OF THE COMPANY, AND
THERE IS NO CHARGE OR COMPLAINT AGAINST THE COMPANY BY THE NATIONAL LABOR
RELATIONS BOARD OR ANY COMPARABLE GOVERNMENTAL ENTITY PENDING OR TO THE
KNOWLEDGE OF THE COMPANY, THREATENED.  NO EMPLOYEE OF THE COMPANY HAS RESIGNED
OR BEEN DISMISSED IN THE 12 MONTH PERIOD ENDING ON THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT, FOR ANY REASON (INCLUDING DISABILITY OR DEATH).

 

3.15.12.      NO EMPLOYEE OF THE COMPANY IS IN VIOLATION OF ANY TERM OF ANY
EMPLOYMENT AGREEMENT, PATENT DISCLOSURE AGREEMENT, NON-COMPETITION AGREEMENT, OR
ANY RESTRICTIVE COVENANT TO A FORMER EMPLOYER RELATING TO THE RIGHT OF ANY SUCH
EMPLOYEE TO BE EMPLOYED BY THE COMPANY BECAUSE OF THE NATURE OF THE BUSINESS
CONDUCTED OR PRESENTLY PROPOSED TO BE CONDUCTED BY THE COMPANY OR TO THE USE OF
TRADE SECRETS OR PROPRIETARY INFORMATION OF OTHERS.  EXCEPT AS SET FORTH ON
SCHEDULE 3.15.12 OF THE DISCLOSURE SCHEDULE, NO EMPLOYEE OF THE COMPANY HAS
GIVEN NOTICE TO THE COMPANY, NOR DOES THE COMPANY OTHERWISE HAS KNOWLEDGE, THAT
ANY SUCH EMPLOYEE INTENDS TO TERMINATE HIS OR HER EMPLOYMENT WITH THE COMPANY. 
THE EMPLOYMENT OF EACH OF THE EMPLOYEES OF THE COMPANY IS “AT WILL” (EXCEPT FOR
NON-U.S. EMPLOYEES OF THE COMPANY LOCATED IN A JURISDICTION THAT DOES NOT
RECOGNIZE THE “AT WILL” EMPLOYMENT CONCEPT) AND THE COMPANY DOES NOT HAVE ANY
OBLIGATION TO PROVIDE ANY PARTICULAR FORM OR PERIOD OF NOTICE PRIOR TO
TERMINATING THE EMPLOYMENT OF ANY OF THEIR RESPECTIVE EMPLOYEES, EXCEPT AS SET
FORTH ON SCHEDULE 3.15.12 OF THE DISCLOSURE SCHEDULE.  AS OF THE DATE OF SIGNING
THE ORIGINAL PURCHASE AGREEMENT, THE COMPANY HAS NOT, AND TO THE KNOWLEDGE OF
COMPANY, NO OTHER PERSON HAS, (I) ENTERED INTO ANY CONTRACT THAT OBLIGATES OR
PURPORTS TO OBLIGATE PURCHASER TO MAKE AN OFFER OF EMPLOYMENT TO ANY PRESENT OR
FORMER EMPLOYEE OR CONSULTANT OF THE COMPANY AND/OR (II) PROMISED OR OTHERWISE
PROVIDED ANY ASSURANCES (CONTINGENT OR OTHERWISE) TO ANY PRESENT OR FORMER
EMPLOYEE OR CONSULTANT OF THE COMPANY OF ANY TERMS OR CONDITIONS OF EMPLOYMENT
WITH PURCHASER FOLLOWING THE CLOSING.

 

3.15.13.      THE COMPANY HAS PROVIDED TO PURCHASER A TRUE, CORRECT AND COMPLETE
LIST OF THE NAMES, POSITIONS AND RATES OF COMPENSATION OF ALL OFFICERS, MANAGERS
(OR DIRECTORS, AS THE CASE MAY BE), AND EMPLOYEES OF THE COMPANY SHOWING EACH
SUCH PERSON’S NAME, POSITION, ANNUAL REMUNERATION, STATUS AS EXEMPT/NON-EXEMPT,
BONUSES AND FRINGE BENEFITS FOR THE CURRENT FISCAL YEAR AND THE MOST RECENTLY
COMPLETED FISCAL YEAR.  THE COMPANY HAS PROVIDED TO PURCHASER THE ADDITIONAL
FOLLOWING INFORMATION FOR EACH OF ITS INTERNATIONAL EMPLOYEES: CITY/COUNTRY OF
EMPLOYMENT, CITIZENSHIP, DATE OF HIRE, MANAGER’S NAME AND WORK LOCATION, DATE OF
BIRTH, ANY MATERIAL SPECIAL CIRCUMSTANCES (INCLUDING PREGNANCY, DISABILITY OR
MILITARY SERVICE), AND WHETHER THE EMPLOYEE WAS RECRUITED FROM A PREVIOUS
EMPLOYER.

 

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

 

3.15.14.      THE COMPANY HAS PROVIDED TO PURCHASER A TRUE, CORRECT AND COMPLETE
LIST OF ALL OF ITS CONSULTANTS AND INDEPENDENT CONTRACTORS AND FOR EACH THE
INITIAL DATE OF THE ENGAGEMENT AND WHETHER THE ENGAGEMENT HAS BEEN TERMINATED BY
WRITTEN NOTICE BY EITHER PARTY.

 

3.15.15.      THE COMPANY HAS PROVIDED TO PURCHASER TRUE, CORRECT AND COMPLETE
COPIES OF EACH OF THE FOLLOWING: ALL FORMS OF OFFER LETTERS; ALL FORMS OF
EMPLOYMENT AGREEMENTS AND SEVERANCE AGREEMENTS; ALL FORMS OF SERVICES AGREEMENTS
AND AGREEMENTS WITH CURRENT AND FORMER CONSULTANTS AND/OR ADVISORY BOARD
MEMBERS; ALL FORMS OF CONFIDENTIALITY, NON-COMPETITION OR INVENTIONS AGREEMENTS
BETWEEN CURRENT AND FORMER EMPLOYEES/CONSULTANTS AND THE COMPANY (AND A TRUE,
CORRECT AND COMPLETE LIST OF EMPLOYEES, CONSULTANTS AND/OR OTHERS NOT SUBJECT
THERETO); THE MOST CURRENT MANAGEMENT ORGANIZATION CHART(S); ALL AGREEMENTS
AND/OR INSURANCE POLICIES PROVIDING FOR THE INDEMNIFICATION OF ANY OFFICERS OR
MANAGERS (OR DIRECTORS, AS THE CASE MAY BE) OF THE COMPANY; SUMMARY OF LIABILITY
FOR TERMINATION PAYMENTS TO CURRENT AND FORMER MANAGERS (OR DIRECTORS, AS THE
CASE MAY BE), OFFICERS AND EMPLOYEES OF THE COMPANY; AND A SCHEDULE OF BONUS
COMMITMENTS MADE TO EMPLOYEES OF THE COMPANY.

 

3.15.16.      THERE ARE NO PERFORMANCE IMPROVEMENT OR DISCIPLINARY ACTIONS
CONTEMPLATED OR PENDING AGAINST ANY OF THE COMPANY’S CURRENT EMPLOYEES.

 

3.15.17.      THE WORKER ADJUSTMENT RETRAINING NOTIFICATION ACT OF 1988, AS
AMENDED, OR ANY SIMILAR STATE OR LOCAL LAW IS NOT, AND WAS NEVER, APPLICABLE TO
THE COMPANY.

 

3.15.18.      THE COMPANY HAS DELIVERED TO PURCHASER TRUE AND COMPLETE COPIES OF
ALL ELECTION STATEMENTS UNDER SECTION 83(B) OF THE CODE THAT ARE IN THE
COMPANY’S POSSESSION OR SUBJECT TO ITS CONTROL WITH RESPECT TO ANY UNVESTED
SECURITIES OR OTHER PROPERTY ISSUED BY THE COMPANY OR ANY ERISA AFFILIATE TO ANY
OF THEIR RESPECTIVE EMPLOYEES, NON-EMPLOYEE MANAGERS (OR DIRECTORS, AS THE CASE
MAY BE), CONSULTANTS AND OTHER SERVICE PROVIDERS.

 

3.15.19.      SCHEDULE 3.15.19 TO THE DISCLOSURE SCHEDULE LISTS ALL
“NONQUALIFIED DEFERRED COMPENSATION PLANS” (WITHIN THE MEANING OF SECTION 409A
OF THE CODE) TO WHICH THE COMPANY IS A PARTY.  EACH “NONQUALIFIED DEFERRED
COMPENSATION PLAN” TO WHICH THE COMPANY IS A PARTY COMPLIES WITH THE
REQUIREMENTS OF PARAGRAPHS (2), (3) AND (4) OF SECTION 409A(A) BY ITS TERMS AND
HAS BEEN OPERATED IN ACCORDANCE WITH SUCH REQUIREMENTS, AND HAS BEEN OPERATED
SINCE JANUARY 1, 2005 IN GOOD FAITH COMPLIANCE WITH SECTION 409A OF THE CODE AND
IRS NOTICE 2005-1.  NO SUCH NONQUALIFIED DEFERRED COMPENSATION PLAN HAS BEEN
MATERIALLY MODIFIED (AS DETERMINED UNDER NOTICE 2005-1) AFTER OCTOBER 3, 2004. 
NO EVENT HAS OCCURRED THAT WOULD BE TREATED BY SECTION 409A(B) AS A TRANSFER OF
PROPERTY FOR PURPOSES OF SECTION 83 OF THE CODE.

 

3.16.           INTERESTED PARTY TRANSACTIONS.  NONE OF THE SELLERS, MANAGERS
(OR DIRECTORS, AS THE CASE MAY BE), OFFICERS, EMPLOYEES OR MEMBERS OF THE
COMPANY, NOR ANY IMMEDIATE FAMILY MEMBER OF ANY OF THE FOREGOING OR OF THE
SELLERS (EACH, AN “INTERESTED PARTY”), HAS ANY DIRECT OR INDIRECT OWNERSHIP,
PARTICIPATION, ROYALTY OR OTHER INTEREST IN, OR IS AN OFFICER, DIRECTOR,
EMPLOYEE OF OR CONSULTANT OR CONTRACTOR FOR ANY FIRM, PARTNERSHIP, ENTITY OR
CORPORATION THAT COMPETES WITH, OR DOES BUSINESS WITH, OR HAS ANY CONTRACTUAL
ARRANGEMENT WITH, THE COMPANY (EXCEPT WITH RESPECT TO ANY INTEREST IN LESS THAN
5% OF THE STOCK OF ANY CORPORATION WHOSE STOCK IS PUBLICLY TRADED).  NO
INTERESTED PARTY IS A PARTY TO, OR TO THE KNOWLEDGE OF THE COMPANY, OTHERWISE
DIRECTLY OR INDIRECTLY INTERESTED IN, ANY CONTRACT TO WHICH THE COMPANY IS A
PARTY OR BY WHICH THE COMPANY OR ANY OF ITS ASSETS OR PROPERTIES MAY BE BOUND OR
AFFECTED, EXCEPT FOR NORMAL COMPENSATION FOR SERVICES AS AN OFFICER, MANAGER (OR
DIRECTOR, AS THE CASE MAY BE) OR EMPLOYEE THEREOF.  TO THE KNOWLEDGE OF THE
COMPANY, NO INTERESTED PARTY HAS ANY INTEREST IN ANY PROPERTY, REAL OR PERSONAL,
TANGIBLE OR INTANGIBLE (INCLUDING ANY INTELLECTUAL PROPERTY) THAT IS USED IN, OR
THAT RELATES TO, THE BUSINESS OF THE COMPANY, EXCEPT FOR THE RIGHTS OF MEMBERS
UNDER APPLICABLE LEGAL REQUIREMENTS.

 

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

 

3.17.           INSURANCE.  THE COMPANY MAINTAINS THE POLICIES OF INSURANCE AND
BONDS SET FORTH IN SCHEDULE 3.17 OF THE DISCLOSURE SCHEDULE, INCLUDING ALL
LEGALLY REQUIRED WORKERS’ COMPENSATION INSURANCE AND ERRORS AND OMISSIONS,
CASUALTY, FIRE AND GENERAL LIABILITY INSURANCE.  SCHEDULE 3.17 OF THE DISCLOSURE
SCHEDULE SETS FORTH THE NAME OF THE INSURER UNDER EACH SUCH POLICY AND BOND, THE
TYPE OF POLICY OR BOND, THE COVERAGE AMOUNT AND ANY APPLICABLE DEDUCTIBLE AND
ANY OTHER MATERIAL PROVISIONS AS OF THE DATE OF SIGNING THE ORIGINAL PURCHASE
AGREEMENT AS WELL ALL MATERIAL CLAIMS MADE UNDER SUCH POLICIES AND BONDS SINCE
JANUARY 1, 2005.  THE COMPANY HAS PROVIDED TO PURCHASER TRUE, CORRECT AND
COMPLETE COPIES OF ALL SUCH POLICIES OF INSURANCE AND BONDS ISSUED AT THE
REQUEST OR FOR THE BENEFIT OF THE COMPANY.  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 COMPLIANCE WITH THE TERMS OF SUCH POLICIES AND BONDS.  ALL SUCH
POLICIES AND BONDS REMAIN IN FULL FORCE AND EFFECT, AND THE COMPANY HAS NO
KNOWLEDGE OF ANY THREATENED TERMINATION OF, OR MATERIAL PREMIUM INCREASE WITH
RESPECT TO, ANY OF SUCH POLICIES.

 

3.18.           BOOKS AND RECORDS.  THE COMPANY HAS PROVIDED TO PURCHASER TRUE,
CORRECT AND COMPLETE COPIES OF EACH DOCUMENT THAT HAS BEEN REQUESTED BY
PURCHASER OR ITS COUNSEL IN CONNECTION WITH THEIR LEGAL AND ACCOUNTING REVIEW OF
THE COMPANY (OTHER THAN ANY SUCH DOCUMENT THAT DOES NOT EXIST OR IS NOT IN THE
COMPANY’S POSSESSION OR SUBJECT TO ITS CONTROL).  WITHOUT LIMITING THE
FOREGOING, THE COMPANY HAS PROVIDED TO PURCHASER COMPLETE AND CORRECT COPIES OF
(A) ALL DOCUMENTS IDENTIFIED ON THE DISCLOSURE SCHEDULE, (B) THE MINUTE BOOKS
CONTAINING RECORDS OF ALL PROCEEDINGS, CONSENTS, ACTIONS AND MEETINGS OF THE
MANAGEMENT COMMITTEE (IF ANY) AND MEMBERS OF THE COMPANY, (D) THE LIST OF
MEMBERS, JOURNAL AND OTHER RECORDS REFLECTING ALL MEMBERSHIP INTERESTS AND
TRANSFERS AND ALL OPTION AND WARRANT GRANTS AND AGREEMENTS OF THE COMPANY, AND
(E) ALL PERMITS, ORDERS AND CONSENTS ISSUED BY ANY REGULATORY AGENCY WITH
RESPECT TO THE COMPANY, OR ANY SECURITIES OF THE COMPANY, AND ALL APPLICATIONS
FOR SUCH PERMITS, ORDERS AND CONSENTS.  THE MINUTE BOOKS OF THE COMPANY PROVIDED
TO PURCHASER CONTAIN A COMPLETE AND ACCURATE SUMMARY OF ALL MEETINGS OF
MANAGEMENT COMMITTEE (IF ANY) AND MEMBERS OF THE COMPANY OR ACTIONS BY WRITTEN
CONSENT SINCE THE TIME OF INCORPORATION OF THE COMPANY THROUGH THE DATE OF THIS
AGREEMENT, AND REFLECT ALL TRANSACTIONS REFERRED TO IN SUCH MINUTES ACCURATELY
IN ALL MATERIAL RESPECTS.  THE BOOKS, RECORDS AND ACCOUNTS OF THE COMPANY
(I) ARE TRUE, CORRECT AND COMPLETE IN ALL MATERIAL RESPECTS, (II) HAVE BEEN
MAINTAINED IN ACCORDANCE WITH REASONABLE BUSINESS PRACTICES ON A BASIS
CONSISTENT WITH PRIOR YEARS, (III) ARE STATED IN REASONABLE DETAIL AND
ACCURATELY AND FAIRLY REFLECT THE TRANSACTIONS AND DISPOSITIONS OF THE ASSETS
AND PROPERTIES OF THE COMPANY, AND (IV) ACCURATELY AND FAIRLY REFLECT THE BASIS
FOR THE FINANCIAL STATEMENTS.

 

3.19.           MATERIAL CONTRACTS.

 

3.19.1.        EXCEPT FOR THIS AGREEMENT, THE TRUST AGREEMENT AND THE CONTRACTS
SPECIFICALLY IDENTIFIED IN SCHEDULE 3.19 OF THE DISCLOSURE SCHEDULE, THE COMPANY
IS NOT A PARTY TO NOR IS IT BOUND BY ANY OF THE FOLLOWING CONTRACTS (EACH A
“MATERIAL CONTRACT”):

 

3.19.1.1.         ANY DISTRIBUTOR, ORIGINAL EQUIPMENT MANUFACTURER, RESELLER,
VALUE ADDED RESELLER, SALES, ADVERTISING, AGENCY OR MANUFACTURER’S
REPRESENTATIVE CONTRACT;

 

3.19.1.2.         ANY CONTINUING CONTRACT FOR THE PURCHASE, SALE OR LICENSE OF
CONTENT, MATERIALS, SUPPLIES, EQUIPMENT, SERVICES, SOFTWARE, INTELLECTUAL
PROPERTY OR OTHER ASSETS INVOLVING IN THE CASE OF ANY SUCH CONTRACT MORE THAN
$10,000 OVER THE LIFE OF THE CONTRACT;

 

3.19.1.3.         ANY CONTRACT THAT EXPIRES OR MAY BE RENEWED AT THE OPTION OF
ANY PERSON OTHER THAN THE COMPANY SO AS TO EXPIRE MORE THAN ONE YEAR AFTER THE
DATE OF THIS AGREEMENT;

 

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3.19.1.4.         ANY TRUST INDENTURE, MORTGAGE, PROMISSORY NOTE, LOAN AGREEMENT
OR OTHER CONTRACT FOR THE BORROWING OF MONEY, ANY CURRENCY EXCHANGE, COMMODITIES
OR OTHER HEDGING ARRANGEMENT OR ANY LEASING TRANSACTION OF THE TYPE REQUIRED TO
BE CAPITALIZED IN ACCORDANCE WITH GAAP;

 

3.19.1.5.         ANY CONTRACT FOR CAPITAL EXPENDITURES IN EXCESS OF $10,000 IN
THE AGGREGATE;

 

3.19.1.6.         ANY CONTRACT LIMITING THE FREEDOM OF THE COMPANY 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, OR ANY CONTRACT
GRANTING MOST FAVORED NATION PRICING, EXCLUSIVE SALES, DISTRIBUTION, MARKETING
OR OTHER EXCLUSIVE RIGHTS, RIGHTS OF REFUSAL, RIGHTS OF FIRST NEGOTIATION OR
SIMILAR RIGHTS AND/OR TERMS TO ANY PERSON, OR ANY CONTRACT OTHERWISE LIMITING
THE RIGHT OF THE COMPANY TO SELL, DISTRIBUTE OR MANUFACTURE ANY PRODUCTS OR
SERVICES OR TO PURCHASE OR OTHERWISE OBTAIN ANY SOFTWARE, COMPONENTS, PARTS,
SUBASSEMBLIES OR SERVICES;

 

3.19.1.7.         ANY CONTRACT PURSUANT TO WHICH THE COMPANY IS A LESSOR OR
LESSEE OF ANY REAL PROPERTY OR ANY MACHINERY, EQUIPMENT, MOTOR VEHICLES, OFFICE
FURNITURE, FIXTURES OR OTHER PERSONAL PROPERTY INVOLVING IN EXCESS OF $25,000
PER ANNUM;

 

3.19.1.8.         ANY CONTRACT WITH AN INTERESTED PARTY (OTHER THAN CONTRACTS
WITH EMPLOYEES WHICH ARE TERMINABLE BY THE COMPANY ON NOTICE OF THIRTY (30) DAYS
OR LESS WITHOUT PENALTY OR FURTHER PAYMENT) OR WITH ANY PERSON WITH WHOM THE
COMPANY DOES NOT DEAL AT ARMS’ LENGTH;

 

3.19.1.9.         ANY CONTRACT OF GUARANTEE, SUPPORT, INDEMNIFICATION,
ASSUMPTION OR ENDORSEMENT OF, OR ANY SIMILAR COMMITMENT WITH RESPECT TO, THE
OBLIGATIONS, LIABILITIES (WHETHER ACCRUED, ABSOLUTE, CONTINGENT OR OTHERWISE) OR
INDEBTEDNESS OF ANY OTHER PERSON;

 

3.19.1.10.       ALL LICENSES, SUBLICENSES AND OTHER CONTRACTS AS TO WHICH THE
COMPANY IS A PARTY AND PURSUANT TO WHICH ANY PERSON IS AUTHORIZED TO USE ANY
COMPANY IP RIGHTS;

 

3.19.1.11.       OTHER THAN “SHRINK WRAP” AND SIMILAR GENERALLY AVAILABLE
COMMERCIAL END-USER LICENSES TO SOFTWARE THAT IS NOT REDISTRIBUTED WITH THE
COMPANY PRODUCTS THAT HAVE AN INDIVIDUAL ACQUISITION COST OF $10,000 OR LESS,
ALL LICENSES, SUBLICENSES AND OTHER CONTRACTS TO WHICH THE COMPANY IS A PARTY
AND PURSUANT TO WHICH THE COMPANY ACQUIRED OR IS AUTHORIZED TO USE ANY THIRD
PARTY INTELLECTUAL PROPERTY RIGHTS;

 

3.19.1.12.       ALL LICENSES, SUBLICENSES AND OTHER CONTRACTS PURSUANT TO WHICH
THE COMPANY HAS AGREED TO ANY RESTRICTION ON THE RIGHT OF THE COMPANY TO USE OR
ENFORCE ANY COMPANY-OWNED IP RIGHTS OR PURSUANT TO WHICH THE COMPANY AGREES TO
ENCUMBER, TRANSFER OR SELL RIGHTS IN OR WITH RESPECT TO ANY COMPANY-OWNED IP
RIGHTS;

 

3.19.1.13.       ANY CONTRACT PROVIDING FOR THE DEVELOPMENT OR PROVISION OF ANY
SOFTWARE, CONTENT, TECHNOLOGY OR INTELLECTUAL PROPERTY, INDEPENDENTLY OR
JOINTLY, BY OR FOR OR TO THE COMPANY;

 

3.19.1.14.       ANY CONTRACT TO LICENSE OR AUTHORIZE ANY THIRD PARTY TO
MANUFACTURE OR REPRODUCE ANY OF THE PRODUCTS, SERVICES, TECHNOLOGY OR
INTELLECTUAL PROPERTY OF THE COMPANY;

 

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3.19.1.15.   (A) ANY JOINT VENTURE CONTRACT, (B) ANY CONTRACT THAT INVOLVES A
SHARING OF REVENUES, PROFITS, CASH FLOWS, EXPENSES OR LOSSES WITH OTHER PERSONS
OR (C) ANY CONTRACT THAT INVOLVES THE PAYMENT OF ROYALTIES TO ANY OTHER PERSON;

 

3.19.1.16.    ANY AGREEMENT OF INDEMNIFICATION OR WARRANTY OR ANY CONTRACT
CONTAINING ANY SUPPORT, MAINTENANCE OR SERVICE OBLIGATION OR COST ON THE PART OF
THE COMPANY (OTHER THAN UNDER ITS UNMODIFIED FORM OF STANDARD CUSTOMER OR
DISTRIBUTOR AGREEMENT, THE FORM OF WHICH HAS BEEN MADE AVAILABLE TO PURCHASER);

 

3.19.1.17.   ANY CONTRACT FOR THE EMPLOYMENT OF ANY MANAGER (OR DIRECTOR, AS THE
CASE MAY BE), OFFICER, EMPLOYEE OR CONSULTANT OF THE COMPANY OR ANY OTHER TYPE
OF CONTRACT WITH ANY OFFICER, EMPLOYEE OR CONSULTANT OF THE COMPANY THAT IS NOT
IMMEDIATELY TERMINABLE BY THE COMPANY WITHOUT COST OR LIABILITY, INCLUDING ANY
CONTRACT REQUIRING IT TO MAKE A PAYMENT TO ANY MANAGER (OR DIRECTOR, AS THE CASE
MAY BE), OFFICER, EMPLOYEE OR CONSULTANT ON ACCOUNT OF ANY TRANSACTION
CONTEMPLATED BY THIS AGREEMENT OR ANY CONTRACT THAT IS ENTERED INTO IN
CONNECTION WITH THIS AGREEMENT;

 

3.19.1.18.   ANY CONTRACT OR PLAN (INCLUDING ANY STOCK OPTION, MERGER AND/OR
STOCK BONUS PLAN) RELATING TO THE SALE, ISSUANCE, GRANT, EXERCISE, AWARD,
PURCHASE, REPURCHASE, FORFEITURE OR REDEMPTION OF MEMBERSHIP INTERESTS OR ANY
OTHER SECURITIES OF THE COMPANY OR ANY OPTIONS, WARRANTS, CONVERTIBLE NOTES OR
OTHER RIGHTS TO PURCHASE OR OTHERWISE ACQUIRE ANY MEMBERSHIP INTERESTS OTHER
SECURITIES OR OPTIONS, WARRANTS OR OTHER RIGHTS THEREFOR;

 

3.19.1.19.   ANY CONTRACT UNDER WHICH THE COMPANY PROVIDES ANY ADVICE OR
SERVICES TO ANY THIRD PARTY, INCLUDING ANY CONSULTING CONTRACT, PROFESSIONAL
CONTRACT OR SOFTWARE IMPLEMENTATION, DEPLOYMENT OR DEVELOPMENT SERVICES
CONTRACT, OR SUPPORT SERVICES CONTRACT (INCLUDING, FOR EACH SUCH CONTRACT, A
DESCRIPTION OF THE PERCENTAGE OF COMPLETION AND EXPECTED ADDITIONAL HOURS,
RESOURCES AND COSTS NECESSARY TO COMPLETE SUCH SERVICES);

 

3.19.1.20.   ANY CONTRACT WITH ANY LABOR UNION OR ANY COLLECTIVE BARGAINING
AGREEMENT OR SIMILAR CONTRACT WITH ITS EMPLOYEES;

 

3.19.1.21.   ANY CONTRACT WITH ANY INVESTMENT BANKER, BROKER, ADVISOR OR SIMILAR
PARTY, OR ANY ACCOUNTANT, LEGAL COUNSEL OR OTHER PERSON RETAINED BY THE COMPANY,
IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY;

 

3.19.1.22.   ANY CONTRACT PURSUANT TO WHICH THE COMPANY HAS ACQUIRED A BUSINESS
OR ENTITY, OR ASSETS OF A BUSINESS OR ENTITY, WHETHER BY WAY OF MERGER,
CONSOLIDATION, PURCHASE OF STOCK, PURCHASE OF ASSETS, LICENSE OR OTHERWISE, OR
ANY CONTRACT PURSUANT TO WHICH IT HAS ANY MATERIAL OWNERSHIP INTEREST IN ANY
OTHER PERSON;

 

3.19.1.23.   ANY CONTRACT WITH ANY GOVERNMENTAL ENTITY OR ANY COMPANY
AUTHORIZATION;

 

3.19.1.24.   ANY CONFIDENTIALITY, SECRECY OR NON-DISCLOSURE CONTRACT OTHER THAN
ANY SUCH CONTRACT ENTERED INTO WITH CUSTOMERS AND DISTRIBUTORS IN THE ORDINARY
COURSE OF BUSINESS PURSUANT TO THE COMPANY’S STANDARD UNMODIFIED FORM (A COPY OF
WHICH HAS BEEN PROVIDED TO PURCHASER);

 

3.19.1.25.   ANY SETTLEMENT AGREEMENT;

 

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3.19.1.26.   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 CONTEMPLATED HEREUNDER, EITHER
ALONE OR IN COMBINATION WITH ANY OTHER EVENT; OR

 

3.19.1.27.   ANY OTHER ORAL OR WRITTEN CONTRACT OR OBLIGATION NOT LISTED IN THE
ABOVE CLAUSES THAT INDIVIDUALLY HAD OR HAS A VALUE OR PAYMENT OBLIGATION IN
EXCESS OF $25,000 OVER THE LIFE OF THE CONTRACT OR IS OTHERWISE MATERIAL TO THE
COMPANY OR ITS BUSINESS, OPERATIONS, FINANCIAL CONDITION, PROPERTIES OR ASSETS.

 

3.19.2.                                ALL MATERIAL CONTRACTS ARE IN WRITTEN
FORM.  THE COMPANY HAS PERFORMED ALL OF THE OBLIGATIONS REQUIRED TO BE PERFORMED
BY IT AND IS ENTITLED TO ALL BENEFITS UNDER, IS NOT 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 EFFECT, IF ANY, OF APPLICABLE BANKRUPTCY
AND OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF CREDITORS GENERALLY AND RULES OF
LAW GOVERNING SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF AND OTHER EQUITABLE
REMEDIES.  THERE EXISTS NO DEFAULT OR EVENT OF DEFAULT OR EVENT, OCCURRENCE,
CONDITION OR ACT, WITH RESPECT TO THE COMPANY OR, TO THE COMPANY’S SUBSIDIARY’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. THE COMPANY HAS NOT
RECEIVED ANY NOTICE OR OTHER 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 GOVERNMENT
CONTRACTS.  TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL CONTRACTS HAVE
BEEN PROVIDED TO PURCHASER PRIOR TO THE DATE OF SIGNING THE ORIGINAL PURCHASE
AGREEMENT.

 

3.20.                        EXPORT CONTROL LAWS.  THE COMPANY HAS CONDUCTED ITS
EXPORT TRANSACTIONS IN ACCORDANCE IN ALL RESPECTS WITH APPLICABLE PROVISIONS OF
UNITED STATES AND APPLICABLE FOREIGN EXPORT CONTROL LAWS AND REGULATIONS,
INCLUDING BUT NOT LIMITED TO THE EXPORT ADMINISTRATION ACT AND IMPLEMENTING
EXPORT ADMINISTRATION REGULATIONS.  THERE ARE NO PENDING OR, TO THE KNOWLEDGE OF
THE COMPANY, THREATENED CLAIMS AGAINST THE COMPANY WITH RESPECT TO SUCH EXPORT
LICENSES OR OTHER APPROVALS, AND THERE ARE NO ACTIONS, CONDITIONS OR
CIRCUMSTANCES PERTAINING TO THE COMPANY’S EXPORT TRANSACTIONS THAT WOULD
REASONABLY BE EXPECTED TO GIVE RISE TO ANY FUTURE CLAIMS.

 

3.21.                        CUSTOMERS AND SUPPLIERS.

 

3.21.1.                                THE COMPANY HAS NO OUTSTANDING MATERIAL
DISPUTES CONCERNING ITS PRODUCTS AND/OR SERVICES WITH ANY CUSTOMER OR
DISTRIBUTOR WHO, IN THE YEAR ENDED DECEMBER 31, 2006 OR THE 3 MONTHS ENDED
MARCH 31, 2007, WAS ONE OF THE 5 LARGEST SOURCES OF REVENUES FOR THE COMPANY,
BASED ON AMOUNTS PAID OR PAYABLE (EACH, A “SIGNIFICANT CUSTOMER”), AND THE
COMPANY HAS NO KNOWLEDGE OF ANY MATERIAL DISSATISFACTION ON THE PART OF ANY
SIGNIFICANT CUSTOMER.  EACH SIGNIFICANT CUSTOMER IS LISTED ON SCHEDULE  OF THE
DISCLOSURE SCHEDULE.  THE COMPANY HAS NOT RECEIVED ANY INFORMATION FROM ANY
SIGNIFICANT CUSTOMER THAT SUCH CUSTOMER SHALL NOT CONTINUE AS A CUSTOMER OF THE
COMPANY (OR PURCHASER) AFTER THE CLOSING OR THAT SUCH CUSTOMER INTENDS TO
TERMINATE OR MATERIALLY MODIFY EXISTING CONTRACTS WITH THE COMPANY (OR
PURCHASER).  THE COMPANY HAS NOT HAD ANY OF ITS PRODUCTS RETURNED BY A PURCHASER
THEREOF EXCEPT FOR NORMAL WARRANTY RETURNS CONSISTENT WITH PAST HISTORY AND
THOSE RETURNS THAT WOULD NOT RESULT IN A REVERSAL OF ANY REVENUE BY THE COMPANY.

 

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3.21.2.                                THE COMPANY HAS NO OUTSTANDING MATERIAL
DISPUTE CONCERNING PRODUCTS AND/OR SERVICES PROVIDED BY ANY SUPPLIER (INCLUDING,
WITHOUT LIMITATIONS, CONTENT PROVIDERS) WHO, IN THE YEAR ENDED DECEMBER 31, 2006
OR THE 3 MONTHS ENDED MARCH 31, 2007, WAS ONE OF THE 5 LARGEST SUPPLIERS OF
PRODUCTS AND/OR SERVICES TO THE COMPANY, BASED ON AMOUNTS PAID OR PAYABLE (EACH,
A “SIGNIFICANT SUPPLIER”), AND THE COMPANY HAS NO KNOWLEDGE OF ANY MATERIAL
DISSATISFACTION ON THE PART OF ANY SIGNIFICANT SUPPLIER.  EACH SIGNIFICANT
SUPPLIER IS LISTED ON SCHEDULE  OF THE DISCLOSURE SCHEDULE.  THE COMPANY HAS NOT
RECEIVED ANY INFORMATION FROM ANY SIGNIFICANT SUPPLIER THAT SUCH SUPPLIER SHALL
NOT CONTINUE AS A SUPPLIER TO THE COMPANY (OR PURCHASER) AFTER THE CLOSING OR
THAT SUCH SUPPLIER INTENDS TO TERMINATE OR MATERIALLY MODIFY EXISTING CONTRACTS
WITH THE COMPANY (OR PURCHASER).  THE COMPANY HAS ACCESS, ON COMMERCIALLY
REASONABLE TERMS, TO ALL PRODUCTS AND SERVICES REASONABLY NECESSARY TO CARRY ON
ITS BUSINESS, AND THE COMPANY HAS NO KNOWLEDGE OF ANY REASON WHY THEY WILL NOT
CONTINUE TO HAVE SUCH ACCESS ON COMMERCIALLY REASONABLE TERMS.

 

3.22.                        BROKER’S AND FINDER’S FEES.  EXCEPT AS SET FORTH IN
SCHEDULE 3.19 OF THE DISCLOSURE SCHEDULE WITH RESPECT TO SECTION 3.19.1.21 
(PROVIDED, THAT ANY FEES OR OTHER PAYMENTS DUE THEREUNDER ARE BORNE SOLELY BY
THE SELLERS), NEITHER THE SELLERS, THE COMPANY NOR ANY AFFILIATE THEREOF IS
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 CONTEMPLATED BY THIS AGREEMENT.

 

3.23.                        REPRESENTATIONS COMPLETE.  NONE OF THE
REPRESENTATIONS OR WARRANTIES MADE BY THE COMPANY HEREIN OR IN ANY EXHIBIT OR
SCHEDULE HERETO, INCLUDING THE DISCLOSURE SCHEDULE, OR IN ANY CERTIFICATE
FURNISHED BY THE COMPANY PURSUANT TO THIS AGREEMENT, WHEN ALL SUCH DOCUMENTS ARE
READ TOGETHER IN THEIR ENTIRETY, CONTAINS OR WILL CONTAIN AT THE CLOSING ANY
UNTRUE STATEMENT OF A MATERIAL FACT, OR OMITS OR WILL OMIT AT THE CLOSING TO
STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED
HEREIN OR THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH MADE, NOT
MISLEADING. NO INFORMATION FURNISHED TO PURCHASER BY THE COMPANY OR THE SELLERS
TO BE INCLUDED IN THE REGISTRATION STATEMENT WILL CONTAIN ANY UNTRUE STATEMENT
OF A MATERIAL FACT, OR WILL OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER
TO MAKE THE STATEMENTS CONTAINED THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES
UNDER WHICH MADE, NOT MISLEADING.

 

4.                                      REPRESENTATIONS AND WARRANTIES OF
PURCHASER.

 

Purchaser represents and warrants to the Company as follows:

 

4.1.                              ORGANIZATION AND STANDING.  PURCHASER IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF ITS JURISDICTION OF ORGANIZATION.  PURCHASER IS NOT IN VIOLATION OF ANY OF
THE PROVISIONS OF ITS CERTIFICATE OF INCORPORATION.

 

4.2.                              AUTHORITY; NON-CONTRAVENTION.

 

4.2.1.                                      PURCHASER HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND EACH OF THE
TRANSACTION AGREEMENTS TO WHICH IT IS A PARTY, AND TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THE EXECUTION AND DELIVERY OF
THIS AGREEMENT AND EACH OF THE TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY,
AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY HAVE
BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF
PURCHASER.  THIS AGREEMENT AND EACH OF THE TRANSACTION AGREEMENTS TO WHICH THEY
ARE A PARTY HAS BEEN DULY EXECUTED AND DELIVERED BY PURCHASER AND CONSTITUTES
THE VALID AND BINDING OBLIGATION OF PURCHASER ENFORCEABLE AGAINST PURCHASER, IN
ACCORDANCE WITH ITS TERMS, SUBJECT ONLY TO THE EFFECT, IF ANY, OF (I) APPLICABLE
BANKRUPTCY AND OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF CREDITORS GENERALLY
AND (II) RULES OF LAW GOVERNING SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF AND
OTHER EQUITABLE REMEDIES.

 

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4.2.2.                                      THE EXECUTION AND DELIVERY OF THIS
AGREEMENT AND EACH OF THE TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY BY
PURCHASER DO NOT, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY WILL NOT, 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
A BENEFIT UNDER (I) ANY PROVISION OF ITS CERTIFICATE OF INCORPORATION, OR
(II) ANY CONTRACT TO WHICH PURCHASER IS A PARTY OR APPLICABLE LEGAL REQUIREMENT,
EXCEPT WHERE SUCH CONFLICT, VIOLATION, DEFAULT, TERMINATION, CANCELLATION OR
ACCELERATION, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT BE MATERIAL TO THE
ABILITY OF PURCHASER TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

4.2.3.                                      NO CONSENT, APPROVAL, ORDER OR
AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING WITH, ANY GOVERNMENTAL
ENTITY, IS REQUIRED BY OR WITH RESPECT TO PURCHASER IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE TRANSACTION AGREEMENTS TO
WHICH THEY ARE A PARTY, OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, EXCEPT FOR (I) THE FILING OF THE REGISTRATION STATEMENT AND
ANY FILINGS REQUIRED BY APPLICABLE SECURITIES LAWS AND NASDAQ RULES IN
CONNECTION WITH THE EXECUTION OF THIS AGREEMENT, (II) SUCH FILINGS AND
NOTIFICATIONS AS MAY BE REQUIRED TO BE MADE BY PURCHASER IN CONNECTION WITH THIS
AGREEMENT UNDER ANTITRUST LAWS AND THE EXPIRATION OR EARLY TERMINATION OF
APPLICABLE WAITING PERIODS UNDER SUCH LAWS, AND (III) SUCH OTHER CONSENTS,
AUTHORIZATIONS, FILINGS, APPROVALS, NOTICES AND REGISTRATIONS WHICH, IF NOT
OBTAINED OR MADE, WOULD NOT BE MATERIAL TO THE ABILITY OF PURCHASER TO PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

4.2.4.                                      FINANCING.  PURCHASER DOES NOT
CURRENTLY HAVE THE SUFFICIENT FINANCING RESOURCES TO PAY THE PURCHASE PRICE AND
THE EMPLOYEE BONUS AMOUNT, HOWEVER, SUBJECT TO AND CONDITIONAL UPON THE
SUCCESSFUL COMPLETION OF THE FINANCING PURSUANT TO THE REGISTRATION STATEMENT BY
WHICH PURCHASER SHALL HAVE RAISED NET PROCEEDS (AFTER DEDUCTING FEES, EXPENSES
AND COMMISSIONS) IN AN AMOUNT SUFFICIENT IN ORDER TO PAY THE PURCHASE PRICE AND
THE EMPLOYEE BONUS AMOUNT AT CLOSING, PURCHASER WILL HAVE THE CASH ON HAND TO
PAY THE PURCHASE PRICE AND THE EMPLOYEE BONUS AMOUNT AT CLOSING.

 

5.                                      CONDUCT PRIOR TO THE CLOSING

 

5.1.                              CONDUCT OF BUSINESS OF THE COMPANY AND
SUBSIDIARIES.  DURING THE PERIOD FROM THE DATE OF SIGNING THE ORIGINAL PURCHASE
AGREEMENT AND CONTINUING UNTIL THE EARLIER OF THE TERMINATION OF THIS AGREEMENT
AND THE CLOSING:

 

5.1.1.                                      THE COMPANY SHALL, AND SHALL CAUSE
EACH SUBSIDIARY TO, CONDUCT ITS BUSINESS IN THE USUAL, REGULAR AND ORDINARY
COURSE IN THE SAME MANNER AS HERETOFORE CONDUCTED AND IN MATERIAL COMPLIANCE ALL
APPLICABLE LEGAL REQUIREMENTS (EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE
IN THIS AGREEMENT OR AS CONSENTED TO IN WRITING BY PURCHASER);

 

5.1.2.                                      THE COMPANY SHALL, AND SHALL CAUSE
EACH SUBSIDIARY TO, (A) PAY ALL OF ITS DEBTS AND TAXES WHEN DUE, SUBJECT TO GOOD
FAITH DISPUTES OVER SUCH DEBTS OR TAXES, (B) PAY OR PERFORM ITS OTHER
OBLIGATIONS WHEN DUE, (C) USE COMMERCIALLY REASONABLE EFFORTS CONSISTENT WITH
PAST PRACTICE AND POLICIES TO COLLECT ACCOUNTS RECEIVABLE WHEN DUE AND NOT
EXTEND CREDIT OUTSIDE OF THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE, (D) SELL COMPANY PRODUCTS CONSISTENT WITH PAST PRACTICE AS TO LICENSE,
SERVICE AND MAINTENANCE TERMS, INCENTIVE PROGRAMS, AND IN ACCORDANCE WITH GAAP
REQUIREMENTS AS TO REVENUE RECOGNITION, AND (E) USE ITS COMMERCIALLY REASONABLE
EFFORTS CONSISTENT WITH PAST PRACTICE AND POLICIES TO PRESERVE INTACT ITS
PRESENT BUSINESS ORGANIZATIONS, KEEP AVAILABLE THE SERVICES OF ITS PRESENT
OFFICERS AND KEY EMPLOYEES AND PRESERVE ITS RELATIONSHIPS WITH CUSTOMERS,
SUPPLIERS, DISTRIBUTORS, LICENSORS, LICENSEES, AND OTHERS HAVING BUSINESS
DEALINGS WITH IT, TO THE END THAT ITS GOODWILL AND ONGOING BUSINESSES SHALL BE
UNIMPAIRED AT THE CLOSING;

 

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5.1.3.                                      THE COMPANY SHALL PROMPTLY NOTIFY
PURCHASER OF ANY CHANGE, OCCURRENCE OR EVENT NOT IN THE ORDINARY COURSE OF ITS
OR ANY SUBSIDIARY’S BUSINESS, OR OF ANY CHANGE, OCCURRENCE OR EVENT WHICH,
INDIVIDUALLY OR IN THE AGGREGATE WITH ANY OTHER CHANGES, OCCURRENCES AND EVENTS,
WOULD REASONABLY BE EXPECTED TO BE MATERIALLY ADVERSE TO THE COMPANY AND ITS
SUBSIDIARIES TAKEN TOGETHER OR CAUSE ANY OF THE CONDITIONS TO CLOSING SET FORTH
IN SECTION 7 NOT TO BE SATISFIED;

 

5.1.4.                                      THE COMPANY SHALL, AND SHALL CAUSE
EACH SUBSIDIARY TO, ASSURE THAT EACH OF ITS CONTRACTS ENTERED INTO AFTER THE
DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT WILL NOT REQUIRE THE PROCUREMENT
OF ANY CONSENT, WAIVER OR NOVATION OR PROVIDE FOR ANY CHANGE IN THE OBLIGATIONS
OF ANY PARTY IN CONNECTION WITH, OR TERMINATE AS A RESULT OF THE CONSUMMATION OF
THE TRANSACTION CONTEMPLATED HEREBY, AND SHALL GIVE REASONABLE ADVANCE NOTICE TO
PURCHASER PRIOR TO ALLOWING ANY MATERIAL CONTRACT OR RIGHT THEREUNDER TO LAPSE
OR TERMINATE OTHERWISE IN ACCORDANCE WITH ITS TERMS; AND

 

5.1.5.                                      THE COMPANY SHALL, AND SHALL CAUSE
EACH SUBSIDIARY TO, MAINTAIN EACH OF ITS LEASED PREMISES IN ACCORDANCE WITH THE
TERMS OF THE APPLICABLE LEASE.

 

5.2.                              RESTRICTIONS ON CONDUCT OF BUSINESS OF THE
COMPANY AND SUBSIDIARIES.  WITHOUT LIMITING THE GENERALITY OR EFFECT OF THE
PROVISIONS OF SECTION 1, DURING THE PERIOD FROM THE DATE OF SIGNING THE ORIGINAL
PURCHASE AGREEMENT AND CONTINUING UNTIL THE EARLIER OF THE TERMINATION OF THIS
AGREEMENT OR CLOSING, THE SELLERS AND THE COMPANY SHALL NOT, AND SHALL CAUSE
EACH SUBSIDIARY NOT TO, DO, CAUSE OR PERMIT ANY OF THE FOLLOWING (EXCEPT TO THE
EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, OR EACH OF THE
TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY, OR AS CONSENTED TO IN WRITING
BY PURCHASER):

 

5.2.1.                                      CHARTER DOCUMENTS.  CAUSE OR PERMIT
ANY AMENDMENTS TO ITS CHARTER DOCUMENTS OR EQUIVALENT ORGANIZATIONAL OR
GOVERNING DOCUMENTS;

 

5.2.2.                                      DIVIDENDS; CHANGES IN EQUITY. 
DECLARE OR PAY ANY DIVIDENDS ON OR MAKE ANY OTHER DISTRIBUTIONS (WHETHER IN
CASH, EQUITY OR PROPERTY) IN RESPECT OF ANY OF ITS MEMBERSHIP INTEREST OR
RECLASSIFY ANY OF ITS EQUITY INTERESTS OR ISSUE OR AUTHORIZE THE ISSUANCE OF ANY
OTHER EQUITY INTERESTS IN RESPECT OF, IN LIEU OF OR IN SUBSTITUTION FOR
MEMBERSHIP INTEREST, EXCEPT PURSUANT TO SECTION 1.2.2.2 HEREOF;

 

5.2.3.                                      MATERIAL CONTRACTS.  ENTER INTO ANY
CONTRACT THAT WOULD CONSTITUTE A MATERIAL CONTRACT, OTHER MATERIAL CONTRACT OR A
CONTRACT REQUIRING A NOVATION OR CONSENT IN CONNECTION WITH THE TRANSACTION
CONTEMPLATED HEREBY, OR VIOLATE, TERMINATE, AMEND, OR OTHERWISE MODIFY
(INCLUDING BY ENTERING INTO A NEW CONTRACT WITH SUCH PARTY OR OTHERWISE) OR
WAIVE ANY OF THE TERMS OF ANY OF ITS MATERIAL CONTRACTS;

 

5.2.4.                                      ISSUANCE OF SECURITIES.  ADMIT ANY
NEW MEMBERS TO THE COMPANY, ISSUE, DELIVER OR SELL OR AUTHORIZE OR PROPOSE THE
ISSUANCE, DELIVERY OR SALE OF, OR PURCHASE OR PROPOSE THE PURCHASE OF, ANY
COMPANY VOTING DEBT OR ANY EQUITY INTEREST OR SECURITIES CONVERTIBLE INTO, OR
SUBSCRIPTIONS, RIGHTS, WARRANTS OR OPTIONS TO ACQUIRE, OR OTHER CONTRACTS OF ANY
CHARACTER OBLIGATING IT TO ISSUE ANY SUCH SHARES OR OTHER CONVERTIBLE
SECURITIES;

 

5.2.5.                                      EMPLOYEES; CONSULTANTS; INDEPENDENT
CONTRACTORS.  (I) HIRE ANY ADDITIONAL OFFICERS OR OTHER EMPLOYEES, OR ANY
CONSULTANTS OR INDEPENDENT CONTRACTORS, (II) TERMINATE THE EMPLOYMENT, CHANGE
THE TITLE, OFFICE OR POSITION, OR MATERIALLY REDUCE THE RESPONSIBILITIES OF ANY
MANAGEMENT, SUPERVISORY OR OTHER KEY PERSONNEL OF THE COMPANY OR ANY SUBSIDIARY,
(III) ENTER INTO, AMEND OR EXTEND THE TERM OF ANY EMPLOYMENT OR CONSULTING
AGREEMENT WITH ANY OFFICER, EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR, OR
(IV) ENTER INTO ANY CONTRACT WITH A LABOR UNION OR COLLECTIVE BARGAINING
AGREEMENT (UNLESS REQUIRED BY APPLICABLE LEGAL REQUIREMENTS);

 

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5.2.6.                                      LOANS AND INVESTMENTS.  MAKE ANY
LOANS OR ADVANCES (OTHER THAN ROUTINE EXPENSE ADVANCES TO EMPLOYEES OF THE
COMPANY OR ANY SUBSIDIARY CONSISTENT WITH PAST PRACTICE) TO, OR ANY INVESTMENTS
IN OR CAPITAL CONTRIBUTIONS TO, ANY PERSON OR FROM ANY SUBSIDIARY (OTHER THAN
ORDINARY COURSE FUNDING TO ITS EXISTING SUBSIDIARIES IN ORDER TO FUND OPERATIONS
IN AMOUNTS CONSISTENT WITH PAST PRACTICE), OR FORGIVE OR DISCHARGE IN WHOLE OR
IN PART ANY OUTSTANDING LOANS OR ADVANCES, OR PREPAY ANY INDEBTEDNESS FOR
BORROWED MONEY;

 

5.2.7.                                      INTELLECTUAL PROPERTY.  TRANSFER OR
LICENSE FROM ANY PERSON ANY RIGHTS TO ANY INTELLECTUAL PROPERTY, OR TRANSFER OR
LICENSE TO ANY PERSON ANY RIGHTS TO ANY COMPANY IP RIGHTS (OTHER THAN
NON-EXCLUSIVE END-USER LICENSES IN CONNECTION WITH THE SALE OF COMPANY PRODUCTS
IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE), OR TRANSFER
OR PROVIDE A COPY OF ANY COMPANY SOURCE CODE TO ANY PERSON (OTHER THAN PROVIDING
ACCESS TO COMPANY SOURCE CODE TO CURRENT EMPLOYEES AND CONSULTANTS OF THE
COMPANY OR ITS SUBSIDIARIES INVOLVED IN THE DEVELOPMENT OF THE COMPANY PRODUCTS
ON A NEED TO KNOW BASIS, CONSISTENT WITH PAST PRACTICE);

 

5.2.8.                                      EXCLUSIVE RIGHTS AND MOST FAVORED
PARTY PROVISIONS.  ENTER INTO OR AMEND ANY AGREEMENT PURSUANT TO WHICH ANY OTHER
PARTY IS GRANTED EXCLUSIVE RIGHTS OR “MOST FAVORED PARTY” RIGHTS OF ANY TYPE OR
SCOPE WITH RESPECT TO ANY OF ITS PRODUCTS, TECHNOLOGY, INTELLECTUAL PROPERTY OR
BUSINESS, OR CONTAINING ANY NON-COMPETITION COVENANTS OR OTHER RESTRICTIONS
RELATING TO ITS OR PURCHASER’S BUSINESS ACTIVITIES;

 

5.2.9.                                      DISPOSITIONS.  SELL, LEASE, LICENSE
OR OTHERWISE DISPOSE OF OR ENCUMBER (OTHER THAN PERMITTED ENCUMBRANCES) ANY OF
ITS PROPERTIES OR ASSETS, OTHER THAN SALES AND NONEXCLUSIVE LICENSES OF COMPANY
PRODUCTS IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH ITS PAST PRACTICE,
OR ENTER INTO ANY CONTRACT WITH RESPECT TO THE FOREGOING;

 

5.2.10.                                INDEBTEDNESS.  INCUR ANY INDEBTEDNESS FOR
BORROWED MONEY OR GUARANTEE ANY SUCH INDEBTEDNESS OR ISSUE OR SELL ANY DEBT
SECURITIES OR GUARANTEE ANY DEBT SECURITIES OF OTHERS;

 

5.2.11.                                LEASES.  ENTER INTO ANY OPERATING LEASE
IN EXCESS OF $10,000 OR ANY LEASING TRANSACTION OF THE TYPE REQUIRED TO BE
CAPITALIZED IN ACCORDANCE WITH GAAP;

 

5.2.12.                                PAYMENT OF OBLIGATIONS; COLLECTION OF
RECEIVABLES.  PAY, DISCHARGE OR SATISFY, (I) ANY AMOUNTS DUE UNDER ANY
PROMISSORY NOTE ISSUED BY THE COMPANY TO ANY PERSON WHO IS AN OFFICER OR MANAGER
(OR DIRECTOR, AS THE CASE MAY BE) OF THE COMPANY OR ANY SUBSIDIARY, OR (II) ANY
AMOUNT IN EXCESS OF $10,000 IN ANY ONE CASE OR $25,000 IN THE AGGREGATE, ANY
CLAIM, LIABILITY OR OBLIGATION (ABSOLUTE, ACCRUED, ASSERTED OR UNASSERTED,
CONTINGENT OR OTHERWISE) ARISING OTHERWISE THAN IN THE ORDINARY COURSE OF
BUSINESS PURSUANT TO CONTRACTS MADE AVAILABLE TO PURCHASER, OTHER THAN THE
PAYMENT, DISCHARGE OR SATISFACTION OF LIABILITIES REFLECTED OR RESERVED AGAINST
IN THE FINANCIAL STATEMENTS OR DEFER PAYMENT OF ANY ACCOUNTS PAYABLE OTHER THAN
IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE, OR IN AN
AMOUNT IN EXCESS OF $10,000, OR GIVE 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;

 

5.2.13.                                CAPITAL EXPENDITURES.  MAKE ANY CAPITAL
EXPENDITURES, CAPITAL ADDITIONS OR CAPITAL IMPROVEMENTS IN EXCESS OF $10,000
INDIVIDUALLY OR $25,000 IN THE AGGREGATE;

 

5.2.14.                                INSURANCE.  MATERIALLY CHANGE THE AMOUNT
OF ANY INSURANCE COVERAGE;

 

5.2.15.                                TERMINATION OR WAIVER.  TERMINATE OR
WAIVE ANY RIGHT OF SUBSTANTIAL VALUE;

 

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5.2.16.                                EMPLOYEE BENEFIT PLANS; PAY INCREASES. 
(I) ADOPT OR AMEND ANY COMPANY EMPLOYEE PLAN, OR AMEND ANY COMPENSATION,
BENEFIT, ENTITLEMENT, GRANT OR AWARD PROVIDED OR MADE UNDER ANY SUCH PLAN,
EXCEPT IN EACH CASE AS REQUIRED UNDER ERISA, APPLICABLE LEGAL REQUIREMENTS OR AS
NECESSARY TO MAINTAIN THE QUALIFIED STATUS OF SUCH PLAN UNDER THE CODE;
(II) MATERIALLY AMEND ANY DEFERRED COMPENSATION PLAN WITHIN THE MEANING OF
SECTION 409A OF THE CODE AND INTERNAL REVENUE SERVICE NOTICE 2005-1, EXCEPT TO
THE EXTENT NECESSARY TO MEET THE REQUIREMENTS OF SUCH SECTION OR NOTICE;
(III) PAY ANY SPECIAL BONUS OR SPECIAL REMUNERATION TO ANY EMPLOYEE OR
NON-EMPLOYEE MANAGER (OR DIRECTOR, AS THE CASE MAY BE) OR CONSULTANT OR INCREASE
THE SALARIES, WAGE RATES OR FEES OF ITS EMPLOYEES OR CONSULTANTS, OTHER THAN
PURSUANT TO PREEXISTING PLANS, POLICIES OR CONTRACTS WHICH HAVE BEEN DISCLOSED
TO PURCHASER AND ARE SET FORTH ON SCHEDULE  OF THE DISCLOSURE SCHEDULE; OR
(IV) ESTABLISH OR ADD ANY NEW MEMBERS TO THE MANAGEMENT COMMITTEE OR BOARD OF
DIRECTORS, AS THE CASE MAY BE, OF THE COMPANY OR ANY SUBSIDIARY;

 

5.2.17.                                SEVERANCE ARRANGEMENTS.  GRANT OR PAY, OR
ENTER INTO ANY CONTRACT PROVIDING FOR THE GRANTING OF ANY SEVERANCE, RETENTION
OR TERMINATION PAY, OR THE ACCELERATION OF BENEFITS, TO ANY PERSON, OTHER THAN
PAYMENTS OR ACCELERATION MADE PURSUANT TO PREEXISTING PLANS, POLICIES OR
CONTRACTS WHICH HAVE BEEN DISCLOSED TO PURCHASER AND ARE SET FORTH ON SCHEDULE 
OF THE DISCLOSURE SCHEDULE;

 

5.2.18.                                LAWSUITS; SETTLEMENTS.  (I) COMMENCE A
LAWSUIT OR LEGAL PROCEEDING, OTHER THAN (A) FOR THE ROUTINE COLLECTION OF BILLS,
(B) IN SUCH CASES WHERE IT IN GOOD FAITH DETERMINES THAT FAILURE TO COMMENCE
SUIT WOULD RESULT IN THE MATERIAL IMPAIRMENT OF A VALUABLE ASPECT OF ITS
BUSINESS (PROVIDED THAT IT CONSULTS WITH PURCHASER PRIOR TO THE FILING OF SUCH A
SUIT), OR (C) FOR A BREACH OF THIS AGREEMENT; OR (II) SETTLE OR AGREE TO SETTLE
ANY PENDING OR THREATENED LAWSUIT, LEGAL PROCEEDING OR OTHER DISPUTE;

 

5.2.19.                                ACQUISITIONS; SUBSIDIARIES.  ACQUIRE OR
AGREE TO ACQUIRE BY MERGING OR CONSOLIDATING WITH, OR BY PURCHASING A
SUBSTANTIAL PORTION OF THE ASSETS OF, OR BY ANY OTHER MANNER, ANY BUSINESS OR
ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ORGANIZATION OR
DIVISION THEREOF, OR OTHERWISE ACQUIRE OR AGREE TO ACQUIRE ANY ASSETS WHICH ARE
MATERIAL, INDIVIDUALLY OR IN THE AGGREGATE, TO ITS AND ITS SUBSIDIARIES’
BUSINESS, OR ENTER INTO ANY CONTRACT WITH RESPECT TO A JOINT VENTURE, STRATEGIC
ALLIANCE OR PARTNERSHIP, OR ESTABLISH ANY SUBSIDIARY;

 

5.2.20.                                TAXES.  MAKE OR CHANGE ANY ELECTION IN
RESPECT OF TAXES, ADOPT OR CHANGE ANY ACCOUNTING METHOD IN RESPECT OF TAXES,
FILE ANY TAX RETURN OR ANY AMENDMENT TO A TAX RETURN, ENTER INTO ANY TAX SHARING
OR SIMILAR AGREEMENT OR CLOSING AGREEMENT, SETTLE ANY CLAIM OR ASSESSMENT IN
RESPECT OF TAXES, OR CONSENT TO ANY EXTENSION OR WAIVER OF THE LIMITATION PERIOD
APPLICABLE TO ANY CLAIM OR ASSESSMENT IN RESPECT OF TAXES, OR ENTER INTO
INTERCOMPANY TRANSACTIONS GIVING RISE TO DEFERRED GAIN OR LOSS OF ANY KIND;

 

5.2.21.                                ACCOUNTING.  CHANGE ACCOUNTING METHODS OR
PRACTICES (INCLUDING ANY CHANGE IN DEPRECIATION OR AMORTIZATION POLICIES) OR
REVALUE ANY OF ITS ASSETS (INCLUDING WRITING DOWN THE VALUE OF INVENTORY OR
WRITING OFF NOTES OR ACCOUNTS RECEIVABLE OTHERWISE THAN IN THE ORDINARY COURSE
OF BUSINESS), EXCEPT IN EACH CASE AS REQUIRED BY CHANGES IN GAAP AS CONCURRED
WITH ITS INDEPENDENT ACCOUNTANTS AND AFTER NOTICE TO PURCHASER;

 

5.2.22.                                REAL PROPERTY.  ENTER INTO ANY AGREEMENT
FOR THE PURCHASE, SALE OR LEASE OF ANY REAL PROPERTY OR OWNED TENANT
IMPROVEMENTS;

 

5.2.23.                                ENCUMBRANCES.  PLACE OR ALLOW THE
CREATION OF ANY ENCUMBRANCE (OTHER THAN A PERMITTED ENCUMBRANCE) ON ANY OF ITS
PROPERTIES, AND, IN THE RESPECT OF THE SELLERS, ON THE INTEREST;

 

5.2.24.                                WARRANTIES, DISCOUNTS.  MATERIALLY CHANGE
THE MANNER IN WHICH IT PROVIDES WARRANTIES, DISCOUNTS OR CREDITS TO CUSTOMERS;

 

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5.2.25.                                INTERESTED PARTY TRANSACTIONS.  ENTER
INTO ANY CONTRACT IN WHICH ANY INTERESTED PARTY HAS AN INTEREST UNDER
CIRCUMSTANCES THAT, IF ENTERED IMMEDIATELY PRIOR TO THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT, WOULD REQUIRE THAT SUCH CONTRACT BE LISTED ON
SCHEDULE  OF THE DISCLOSURE SCHEDULE;

 

5.2.26.                                GRANTS.  APPLY FOR, PROGRESS OR OBTAIN
FUNDS UNDER ANY GRANT, INCENTIVES, TAX BENEFITS AND SUBSIDIES FILED WITH ANY
GOVERNMENTAL ENTITY;

 

5.2.27.                                WEB SITE. ENGAGE IN ANY ACTION THAT WILL
BE OF DETRIMENT TO THE VALIDITY OR VALUE OF THE DOMAIN NAMES OR URLS INCLUDED IN
THE COMPANY REGISTERED INTELLECTUAL PROPERTY, OR CHANGE THE “LOOK AND FEEL” OF
ANY COMPANY WEB SITE AT ANY SUCH URLS; AND

 

5.2.28.                                OTHER.  TAKE OR AGREE IN WRITING OR
OTHERWISE TO TAKE, ANY OF THE ACTIONS DESCRIBED IN CLAUSES  THROUGH , OR ANY
ACTION WHICH WOULD REASONABLY BE EXPECTED TO MAKE ANY OF THE COMPANY’S
REPRESENTATIONS OR WARRANTIES CONTAINED IN THIS AGREEMENT UNTRUE OR INCORRECT
SUCH THAT THE CONDITION SET FORTH IN SECTION 7.3.1 OR 7.3.4 WOULD NOT BE
SATISFIED, OR PREVENT THE COMPANY FROM PERFORMING OR CAUSE THE COMPANY NOT TO
PERFORM ONE OR MORE COVENANTS REQUIRED HEREUNDER TO BE PERFORMED BY THE COMPANY
SUCH THAT THE CONDITION SET FORTH IN SECTION 7.3.1 WOULD NOT BE SATISFIED.

 

5.3.                              Point of Contact.  All notices, request for
consents and other communications pursuant to this  shall be in writing,
delivered in accordance with Section 10.2 and shall be sent by Sellers
Representative, as the Company’s point of contact to Purchaser’s point of
contact as detailed in Section 10.2.

 

6.                                      ADDITIONAL AGREEMENTS

 

6.1.                                       ACCESS TO INFORMATION.

 

6.1.1.                                      DURING THE PERIOD COMMENCING ON THE
DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT AND CONTINUING UNTIL THE EARLIER
OF THE TERMINATION OF THIS AGREEMENT OR THE CLOSING, (I) THE COMPANY AND THE
SELLERS SHALL AFFORD PURCHASER AND ITS ACCOUNTANTS, COUNSEL AND OTHER
REPRESENTATIVES, REASONABLE ACCESS DURING BUSINESS HOURS TO (A) ALL OF THE
COMPANY’S AND EACH OF ITS SUBSIDIARIES’ PROPERTIES, BOOKS, CONTRACTS AND
RECORDS, AND (B) ALL OTHER INFORMATION CONCERNING THE BUSINESS, PROPERTIES AND
PERSONNEL OF THE COMPANY OR ANY OF ITS SUBSIDIARIES AS PURCHASER MAY REASONABLY
REQUEST, AND (II) THE COMPANY AND SELLERS SHALL PROVIDE TO PURCHASER AND ITS
ACCOUNTANTS, COUNSEL AND OTHER REPRESENTATIVES TRUE, CORRECT AND COMPLETE COPIES
OF THE COMPANY’S AND EACH OF ITS SUBSIDIARIES’ (A) INTERNAL FINANCIAL
STATEMENTS, (B) TAX RETURNS, TAX ELECTIONS AND ALL OTHER RECORDS AND WORKPAPERS
RELATING TO TAXES, (C) A SCHEDULE OF ANY DEFERRED INTERCOMPANY GAIN OR LOSS WITH
RESPECT TO TRANSACTIONS TO WHICH THE COMPANY OR ANY SUBSIDIARY HAS BEEN A PARTY,
AND (D) RECEIPTS FOR ANY TAXES PAID TO FOREIGN TAX AUTHORITIES.

 

6.1.2.                                      FROM THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT UNTIL THE EARLIER OF THE TERMINATION OF THIS
AGREEMENT AND THE CLOSING, THE COMPANY SHALL CONFER FROM TIME TO TIME AS
REQUESTED BY PURCHASER WITH ONE OR MORE REPRESENTATIVES OF PURCHASER TO DISCUSS
ANY MATERIAL CHANGES OR DEVELOPMENTS IN THE OPERATIONAL MATTERS OF THE COMPANY
AND EACH OF ITS SUBSIDIARIES AND THE GENERAL STATUS OF THE ONGOING OPERATIONS OF
THE COMPANY AND EACH OF ITS SUBSIDIARIES.

 

6.1.3.                                      UNLESS THIS AGREEMENT TERMINATED,
SELLERS AGREE TO COOPERATE WITH THE PURCHASER AND ITS REPRESENTATIVES, AND IF SO
REASONABLY REQUESTED, TO PROVIDE FOR COPIES OF, THE BOOKS AND RECORDS OF THE
SELLERS, INSOFAR AS THEY RELATE TO THE COMPANY, DURING REGULAR BUSINESS HOURS
AND AT NO EXPENSE TO THE SELLERS, IN ORDER FOR THE PURCHASER TO OBTAIN
INFORMATION RELEVANT TO THE COMPANY’S TAX RETURNS, OR AS OTHERWISE REASONABLY
REQUIRED FOR THE CONDUCT OF THE COMPANY’S BUSINESS.

 

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6.1.4.                                      NO INFORMATION OR KNOWLEDGE OBTAINED
IN ANY INVESTIGATION PURSUANT TO THIS SECTION 6.1 SHALL AFFECT OR BE DEEMED TO
MODIFY ANY REPRESENTATION OR WARRANTY CONTAINED HEREIN OR THE CONDITIONS TO THE
OBLIGATIONS OF THE PARTIES HERETO TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

6.2.                                      CONFIDENTIALITY; PUBLIC DISCLOSURE.

 

6.2.1.                                      THE PARTIES HERETO ACKNOWLEDGE THAT
PURCHASER, THE SELLERS AND THE COMPANY HAVE PREVIOUSLY EXECUTED A MUTUAL
NON-DISCLOSURE AGREEMENT DATED APRIL 10, 2007 (THE “CONFIDENTIALITY AGREEMENT”),
WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS.

 

6.2.2.                                      THE SELLERS AND THE COMPANY SHALL
NOT, AND THE COMPANY SHALL CAUSE EACH SUBSIDIARY AND EACH COMPANY REPRESENTATIVE
NOT TO, DIRECTLY OR INDIRECTLY, ISSUE ANY PRESS RELEASE OR OTHER PUBLIC
STATEMENT RELATING TO THE TERMS OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING, IF APPLICABLE, THE TERMINATION OF THIS
AGREEMENT, OR USE PURCHASER’S NAME OR REFER TO PURCHASER DIRECTLY OR INDIRECTLY
IN CONNECTION WITH PURCHASER’S RELATIONSHIP 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 PURCHASER, UNLESS REQUIRED BY LAW (IN
WHICH EVENT A SATISFACTORY OPINION OF OUTSIDE COUNSEL TO THAT EFFECT SHALL BE
FIRST DELIVERED TO PURCHASER 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.  NOTWITHSTANDING ANYTHING HEREIN
OR IN THE CONFIDENTIALITY AGREEMENT, PURCHASER MAY ISSUE SUCH PRESS RELEASES OR
MAKE SUCH OTHER PUBLIC STATEMENTS REGARDING THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AS PURCHASER MAY, IN ITS REASONABLE DISCRETION, DETERMINE,
INCLUDING IN ORDER TO COMPLY WITH PURCHASER’S OBLIGATIONS UNDER APPLICABLE
SECURITIES LAWS AND THE NASDAQ RULES.

 

6.2.3.                                      THIS SECTION SHALL SURVIVE THE
CONSUMMATION, TERMINATION OR EXPIRATION OF THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

6.3.                              NO SOLICITATION.

 

6.3.1.                                      FROM AND AFTER THE DATE OF THIS
AGREEMENT UNTIL THE CLOSING OR TERMINATION OF THIS AGREEMENT, NEITHER THE
SELLERS, THE COMPANY NOR ANY OF ITS SUBSIDIARIES WILL, NOR WILL ANY OF THEM
AUTHORIZE OR PERMIT ANY OF THEIR RESPECTIVE OFFICERS, MANAGERS (OR DIRECTORS, AS
THE CASE MAY BE), AFFILIATES, MEMBERS (OR STOCKHOLDERS, AS THE CASE MAY BE) OR
EMPLOYEES OR ANY INVESTMENT ADVISOR OR BANKER, ATTORNEY OR OTHER ADVISOR OR
REPRESENTATIVE RETAINED BY ANY OF THEM (ALL OF THE FOREGOING COLLECTIVELY BEING
THE “COMPANY REPRESENTATIVES”) TO, DIRECTLY OR INDIRECTLY, (I) SOLICIT,
INITIATE, SEEK, ENTERTAIN, ENCOURAGE, FACILITATE, SUPPORT OR INDUCE THE MAKING,
SUBMISSION OR ANNOUNCEMENT OF ANY INQUIRY, EXPRESSION OF INTEREST, PROPOSAL OR
OFFER THAT CONSTITUTES, OR WOULD REASONABLY BE EXPECTED TO LEAD TO, AN
ACQUISITION PROPOSAL, (II) ENTER INTO, PARTICIPATE IN, MAINTAIN OR CONTINUE ANY
COMMUNICATIONS (EXCEPT SOLELY TO PROVIDE WRITTEN NOTICE AS TO THE EXISTENCE OF
THESE PROVISIONS) OR NEGOTIATIONS REGARDING, OR DELIVER OR MAKE AVAILABLE TO ANY
PERSON ANY NON-PUBLIC INFORMATION WITH RESPECT TO, OR TAKE ANY OTHER ACTION
REGARDING, ANY INQUIRY, EXPRESSION OF INTEREST, PROPOSAL OR OFFER THAT
CONSTITUTES, OR WOULD REASONABLY BE EXPECTED TO LEAD TO, AN ACQUISITION
PROPOSAL, (III) AGREE TO, ACCEPT, APPROVE, ENDORSE OR RECOMMEND (OR PUBLICLY
PROPOSE OR ANNOUNCE ANY INTENTION OR DESIRE TO AGREE TO, ACCEPT, APPROVE,
ENDORSE OR RECOMMEND) ANY ACQUISITION PROPOSAL, (IV) ENTER INTO ANY LETTER OF
INTENT OR ANY OTHER CONTRACT CONTEMPLATING OR OTHERWISE RELATING TO ANY
ACQUISITION PROPOSAL, OR (V) SUBMIT ANY ACQUISITION PROPOSAL TO THE VOTE OF ANY
MEMBERS (OR SECURITYHOLDERS, AS THE CASE MAY BE) OF COMPANY OR ANY SUBSIDIARY. 
EACH OF THE COMPANY AND ITS SUBSIDIARIES WILL IMMEDIATELY CEASE AND CAUSE TO BE
TERMINATED ANY AND ALL EXISTING ACTIVITIES, DISCUSSIONS OR NEGOTIATIONS WITH ANY
PERSONS CONDUCTED PRIOR TO OR ON THE DATE OF THIS AGREEMENT WITH RESPECT TO ANY
ACQUISITION PROPOSAL.  IF ANY COMPANY REPRESENTATIVE, WHETHER IN HIS OR HER
CAPACITY AS SUCH OR IN ANY OTHER CAPACITY, TAKES ANY ACTION THAT THE COMPANY IS
OBLIGATED PURSUANT TO THIS SECTION 6.3 TO CAUSE SUCH

 

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COMPANY REPRESENTATIVE NOT TO TAKE, THEN THE COMPANY SHALL BE DEEMED FOR ALL
PURPOSES OF THIS AGREEMENT TO HAVE BREACHED THIS SECTION 6.3.

 

6.3.2.                                      THE SELLERS AND THE COMPANY SHALL
IMMEDIATELY (AND IN NO EVENT LATER THAN 24 HOURS) NOTIFY PURCHASER ORALLY AND IN
WRITING AFTER RECEIPT BY THE SELLERS, THE COMPANY AND/OR ANY SUBSIDIARY (OR, TO
THE KNOWLEDGE OF THE COMPANY, BY ANY OF THE COMPANY REPRESENTATIVES), OF (I) ANY
ACQUISITION PROPOSAL, (II) ANY INQUIRY, EXPRESSION OF INTEREST, PROPOSAL OR
OFFER THAT CONSTITUTES, OR WOULD REASONABLY BE EXPECTED TO LEAD TO, AN
ACQUISITION PROPOSAL, (III) ANY OTHER NOTICE THAT ANY PERSON IS CONSIDERING
MAKING AN ACQUISITION PROPOSAL, OR (IV) ANY REQUEST FOR NONPUBLIC INFORMATION
RELATING TO THE COMPANY OR ANY SUBSIDIARY OR FOR ACCESS TO ANY OF THE
PROPERTIES, BOOKS OR RECORDS OF THE COMPANY OR ANY SUBSIDIARY BY ANY PERSON OR
PERSONS OTHER THAN PURCHASER.  SUCH NOTICE SHALL DESCRIBE (A) THE MATERIAL TERMS
AND CONDITIONS OF SUCH ACQUISITION PROPOSAL, INQUIRY, EXPRESSION OF INTEREST,
PROPOSAL, OFFER, NOTICE OR REQUEST, AND (B) THE IDENTITY OF THE PERSON OR GROUP
MAKING ANY SUCH ACQUISITION PROPOSAL, INQUIRY, EXPRESSION OF INTEREST, PROPOSAL,
OFFER, NOTICE OR REQUEST.  THE SELLERS AND THE COMPANY SHALL KEEP PURCHASER
FULLY INFORMED OF THE STATUS AND DETAILS OF, AND ANY MODIFICATION TO, ANY SUCH
INQUIRY, EXPRESSION OF INTEREST, PROPOSAL OR OFFER AND ANY CORRESPONDENCE OR
COMMUNICATIONS RELATED THERETO AND SHALL PROVIDE TO PURCHASER A TRUE, CORRECT
AND COMPLETE COPY OF SUCH INQUIRY, EXPRESSION OF INTEREST, PROPOSAL OR OFFER AND
ANY AMENDMENTS, CORRESPONDENCE AND COMMUNICATIONS RELATED THERETO, IF IT IS IN
WRITING, OR A REASONABLE WRITTEN SUMMARY THEREOF, IF IT IS NOT IN WRITING.  THE
SELLERS AND THE COMPANY SHALL PROVIDE PURCHASER WITH 48 HOURS PRIOR NOTICE (OR
SUCH LESSER PRIOR NOTICE AS IS PROVIDED TO THE MEMBERS OF ITS MANAGEMENT) OF ANY
MEETING OF THE MEMBERS OF THE COMPANY AT WHICH IT IS REASONABLY EXPECTED TO
DISCUSS ANY ACQUISITION PROPOSAL.

 

6.4.                                      NON-COMPETITION; NON-DISCLOSURE.

 

6.4.1.                                      IN ORDER TO INDUCE PURCHASER TO
PURCHASE THE INTEREST PURSUANT TO THIS AGREEMENT, SELLERS COVENANT AND AGREE
THAT DURING THE PERIOD COMMENCING ON THE CLOSING DATE AND ENDING ON THE SECOND
(2ND) ANNIVERSARY THEREOF (THE “NON-COMPETITION PERIOD”), NEITHER SELLERS NOR
ANY OF THEIR RESPECTIVE AFFILIATES SHALL DIRECTLY OR INDIRECTLY, WHETHER AS AN
OFFICER, DIRECTOR, STOCKHOLDER, INVESTOR, PARTNER, PROPRIETOR, BUSINESS
ASSOCIATE, EMPLOYEE, REPRESENTATIVE OR OTHERWISE, (I) PROMOTE, MARKET, BECOME OR
BE FINANCIALLY INTERESTED IN, CONSULT WITH OR FOR, OR ASSOCIATE IN A BUSINESS
RELATIONSHIP WITH, ANY OTHER PERSON, CORPORATION, FIRM, PARTNERSHIP OR OTHER
ENTITY WHATSOEVER (OTHER THEN THE COMPANY) WHOSE BUSINESS IS A COMPETITIVE
BUSINESS (AS DEFINED BELOW); (II) SOLICIT OR OTHERWISE ENCOURAGE ANY CUSTOMERS
OR VENDORS OF THE COMPANY TO CEASE DOING BUSINESS WITH THE COMPANY OR UNDERTAKE
ANY ACTION, EITHER DIRECTLY OR INDIRECTLY, THAT WOULD REASONABLY BE EXPECTED TO
CAUSE ANY CUSTOMER OR VENDORS OF THE COMPANY TO CEASE, TERMINATE OR MATERIALLY
ADVERSELY CHANGE ITS RELATIONSHIP WITH THE COMPANY, OR (III) SOLICIT THE
SERVICES OF ANY OF THE COMPANY’S EMPLOYEES, CONSULTANTS OR INDEPENDENT
CONTRACTOR, OR OTHERWISE ENCOURAGE ANY SUCH EMPLOYEES, CONSULTANTS OR
INDEPENDENT CONTRACTOR TO TERMINATE THEIR EMPLOYMENT WITH, OR SERVICES TO, THE
COMPANY OR TO BECOME AN EMPLOYEE, CONSULTANT OR INDEPENDENT CONTRACTOR OR
OTHERWISE PROVIDE SERVICES TO ANY PERSON OTHER THAN THE COMPANY. 
NOTWITHSTANDING THE FOREGOING, THIS SECTION SHALL NOT PROHIBIT A SELLER OR ITS
AFFILIATES FROM OWNING UP TO 5% OF THE EQUITY OF ANY PUBLICLY TRADED COMPANY,
WHETHER OR NOT SUCH COMPANY IS ENGAGED IN WHOLE, OR IN PART, IN A COMPETITIVE
BUSINESS. THE TERM “COMPETITIVE BUSINESS” SHALL MEAN ANY BUSINESS (OR ANY
COMPONENT THEREOF) THAT IS COMPETITIVE WITH THE BUSINESS CONDUCTED BY THE
COMPANY DURING THE TWELVE (12) MONTHS PERIOD PRIOR TO THE CLOSING DATE,
INCLUDING, WITHOUT LIMITATIONS, INTERNET REFERENCE CONTENT RELATED BUSINESS AND
ANY BUSINESS ASSOCIATED WITH LANGUAGE REFERENCE, GENERAL REFERENCE OR QUESTION
AND ANSWER INFORMATION DELIVERED OVER THE INTERNET. FOR THE PURPOSE OF THIS
SECTION 6.4, THE TERM “COMPANY” SHALL INCLUDE THE COMPANY, PURCHASER AND THEIR
RESPECTIVE AFFILIATES.

 

6.4.2.                                      WITHOUT LIMITING THE GENERALITY OF
SECTION 6.4.1, DURING THE NON-COMPETITION PERIOD, NEITHER SELLERS NOR ANY OF
THEIR RESPECTIVE AFFILIATES SHALL REGISTER, CAUSE TO BE REGISTERED, CLAIM,

 

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CAUSE TO BE CLAIMED OR TAKE ANY ACTION TO REGISTER OR CLAIM ANY RIGHTS IN AND TO
ANY TRADEMARK, SERVICE MARK OR ANY MARKS THAT ARE CONFUSINGLY SIMILAR TO ANY
COMPANY WEB SITE, DOMAIN NAMES OR URLS INCLUDED (OR WHICH SHOULD HAVE BEEN
INCLUDED) IN THE COMPANY REGISTERED INTELLECTUAL PROPERTY, AND SHALL NOT
REGISTER ANY DOMAIN NAME THAT CONTAINS THE WORD “REFERENCE”, “DICTIONARY”,
“THESAURUS” OR ANY WORD WHICH IS A MISSPELLING OF, OR POTENTIALLY CONFUSINGLY
SIMILAR NAME TO, ANY COMPANY WEB SITE, DOMAIN NAMES OR URLS INCLUDED (OR WHICH
SHOULD HAVE BEEN INCLUDED) IN THE COMPANY REGISTERED INTELLECTUAL PROPERTY.  IN
ADDITION, NEITHER SELLERS NOR ANY OF THEIR RESPECTIVE AFFILIATES SHALL REGISTER
OR CHALLENGE ANY RIGHTS OF THE COMPANY IN ANY COMPANY-OWNED IP RIGHTS.

 

6.4.3.                                      EACH OF THE SELLERS EXPRESSLY
ACKNOWLEDGES THAT DAMAGES ALONE WILL BE AN INADEQUATE REMEDY FOR ANY BREACH OR
VIOLATION OF ANY OF THE PROVISIONS OF THIS SECTION 6.4, AND PURCHASER, IN
ADDITION TO ALL OTHER REMEDIES AVAILABLE AT LAW OR HEREUNDER, SHALL BE ENTITLED,
AS A MATTER OF RIGHT, TO INJUNCTIVE RELIEF, INCLUDING SPECIFIC PERFORMANCE, WITH
RESPECT TO ANY SUCH BREACH OR VIOLATION, IN ANY COURT OF COMPETENT
JURISDICTION.  IF ANY OF THE PROVISIONS OF THIS SECTION 6.4 ARE HELD TO BE IN
ANY RESPECT AN UNREASONABLE RESTRICTION UPON ANY PARTY RESTRICTED HEREBY, THEN
THEY SHALL BE DEEMED TO EXTEND ONLY OVER THE MAXIMUM PERIOD OF TIME, GEOGRAPHIC
AREA OR RANGE OF ACTIVITIES AS TO WHICH THEY MAY BE ENFORCEABLE.  IN THE EVENT
THAT A SELLER SHALL BE IN VIOLATION OF THE PROVISIONS OF THIS SECTION 6.4, THEN
THE RUNNING OF THE NON-COMPETITION PERIOD WITH RESPECT TO SUCH SELLER SHALL BE
AUTOMATICALLY SUSPENDED UPON THE DATE OF SUCH VIOLATION AND SHALL RESUME ON THE
DATE SUCH VIOLATION CEASES, AND ACCORDINGLY THE NON-COMPETITION PERIOD SHALL BE
EXTENDED FOR A PERIOD OF TIME EQUAL TO THE PERIOD OF TIME DURING WHICH SUCH
BREACH SHALL OCCUR; AND, IN THE EVENT THAT PURCHASER SHOULD BE REQUIRED TO SEEK
RELIEF FROM SUCH BREACH IN ANY COURT, BOARD OF ARBITRATION OR OTHER TRIBUNAL,
THEN THE NON-COMPETITION PERIOD SHALL BE EXTENDED FOR THE PERIOD OF TIME
REQUIRED FOR THE PENDENCY OF SUCH PROCEEDINGS, INCLUDING ALL APPEALS.

 

6.4.4.                                      EACH OF THE SELLERS ACKNOWLEDGES
THAT HE HAS HAD ACCESS TO, AND BECAME FAMILIAR WITH, PROPRIETARY INFORMATION OF
THE COMPANY (AS DEFINED IN THE CONFIDENTIALITY AGREEMENT) AND THAT SUCH
PROPRIETARY INFORMATION IS A VALUABLE AND UNIQUE ASSET OF THE COMPANY AND IS AND
WILL REMAIN THE EXCLUSIVE PROPERTY OF THE COMPANY. THEREFORE, EACH OF THE
SELLERS AGREES AND UNDERTAKES THAT HE (I) WILL MAINTAIN SECURELY AND HOLD IN
STRICT CONFIDENCE ALL PROPRIETARY INFORMATION RECEIVED, ACQUIRED OR DEVELOPED BY
HIM WHETHER FOLLOWING OR PRIOR TO THE CLOSING, (II) WILL NOT, IN WHOLE OR IN
PART, DISCLOSE PROPRIETARY INFORMATION TO ANY PERSON UNDER ANY CIRCUMSTANCES,
AND (III) WILL NOT, IN WHOLE OR IN PART, USE ANY PROPRIETARY INFORMATION FOR ANY
PURPOSE (OTHER THAN FOR AND AS AUTHORIZED IN WRITING BY THE COMPANY).  EACH
SELLER AGREES TO INSTRUCT HIS REPRESENTATIVES WHO OBTAIN PROPRIETARY INFORMATION
TO COMPLY WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT.  THE OBLIGATION OF
NON-DISCLOSURE AND NON-USE IMPOSED SHALL NOT APPLY TO INFORMATION THAT
(A) APPEARS IN ISSUED PATENTS OR OTHER PRINTED PUBLICATIONS; (B) RECEIVED BY
SELLER NOT IN CONNECTION WITH HIS RELATIONSHIP TO THE COMPANY AND FROM A SOURCE
THAT WAS NOT PROHIBITED FROM DISCLOSING SUCH INFORMATION TO SELLER BY A
CONFIDENTIALITY OBLIGATION OR OTHER FIDUCIARY OR LEGAL DUTY, (C) IS OR BECOMES
GENERALLY KNOWN TO THE PUBLIC THROUGH NO WRONGFUL ACT OR BREACH OF SELLER OR ANY
OF HIS REPRESENTATIVES.  EACH SELLER SHALL NOT BE PROHIBITED FROM DISCLOSING
PROPRIETARY INFORMATION TO THE EXTENT REQUIRED BY A COURT ORDER OR APPLICABLE
LAW, PROVIDED THAT HE SHALL NOTIFY THE COMPANY OF SUCH DISCLOSURE AND SHALL USE
REASONABLE EFFORTS TO (AND COOPERATE WITH COMPANY IN SEEKING TO) SEAL, REDACT,
OR OTHERWISE MINIMIZE SUCH DISCLOSURE. THE OBLIGATIONS CONTAINED IN THIS
SECTION 6.4.4 SHALL SURVIVE THE CLOSING OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND REMAIN IN FORCE AND EFFECT IN ACCORDANCE WITH THEIR RESPECTIVE
TERMS.

 

6.4.5.                                      EACH SELLER AGREES THAT DOCUMENTS,
COPIES, RECORDS AND OTHER PROPERTY OR MATERIALS MADE OR RECEIVED BY SELLER THAT
PERTAIN TO THE BUSINESS AND AFFAIRS OF THE COMPANY OR ITS AFFILIATES, INCLUDING
ALL PROPRIETARY INFORMATION, WHICH IS IN SELLER’S POSSESSION OR UNDER HIS
CONTROL, ARE THE PROPERTY OF THE COMPANY AND THAT THE SELLER WILL RETURN SAME
AND ANY COPIES OF SAME TO THE COMPANY PROMPTLY AFTER THE CLOSING AND SHALL NOT
RETAIN ANY COPY, SUMMARY OR REPRODUCTION OF SAME.

 

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6.5.                              FINANCIALS; METRIC REPORTS. FROM AND AFTER THE
DATE OF THIS AGREEMENT UNTIL THE EARLIER OF CLOSING OR TERMINATION OF THIS
AGREEMENT:

 

6.5.1.                                      THE SELLERS AND THE COMPANY SHALL
CAUSE THE COMPANY’S EMPLOYEES, AUDITORS AND OTHER REPRESENTATIVES TO COOPERATE
WITH AND ASSIST PURCHASER, AS PURCHASER MAY REASONABLY REQUEST, TO ENABLE
PURCHASER TO PREPARE AND FILE WITH THE SEC, IN CONNECTION WITH THE TRANSACTION
CONTEMPLATED HEREBY, THE CURRENT REPORT ON FORM 8-K AND ANY ADDITIONAL
AMENDMENTS OR SUPPLEMENTS THAT MAY BE REQUIRED BY THE EXCHANGE ACT OF 1934
AND/OR THE SECURITIES ACT (AND, IN EACH CASE, THE RULES AND REGULATIONS
PROMULGATED THEREUNDER).  THE COMPANY SHALL USE ITS COMMERCIALLY REASONABLE
EFFORTS TO CAUSE ITS AUDITORS TO DELIVER ANY OPINIONS OR CONSENTS NECESSARY FOR
PURCHASER TO FILE THE COMPANY’S FINANCIALS STATEMENTS, TO THE EXTENT NECESSARY. 
ANY FINANCIAL STATEMENTS OF THE COMPANY PREPARED PURSUANT TO THIS PARAGRAPH
SHALL BE PREPARED IN ACCORDANCE WITH GAAP.

 

6.5.2.                                      THE SELLERS AND THE COMPANY SHALL
PROMPTLY PREPARE AND DELIVER TO PURCHASER THE UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS OF THE COMPANY PREPARED IN ACCORDANCE WITH GAAP (INCLUDING, IN EACH
CASE, BALANCE SHEETS, INCOME STATEMENTS, STATEMENT OF CHANGES IN SHAREHOLDERS
EQUITY AND STATEMENT OF CASH FLOWS, AND COMPARATIVE FINANCIAL INFORMATION FOR
THE PERIODS SPECIFIED THEREIN), REVIEWED BY INDEPENDENT AUDITORS ASSOCIATED WITH
ONE OF THE “BIG 4” ACCOUNTING FIRMS, FOR THE FISCAL QUARTER ENDED MARCH 31, 2007
(IN NO EVENT LATER THAN JULY 27, 2007) AND FOR THE FISCAL QUARTER ENDED JUNE 30,
2007 (IN NO EVENT LATER THAN AUGUST 15, 2007).

 

6.5.3.                                      THE SELLERS AND THE COMPANY SHALL
PROMPTLY PREPARE AT THE END OF EACH CALENDAR MONTH AND PROMPTLY DELIVER TO
PURCHASER, BUT IN NO EVENT LATER THAN TEN (10) CALENDAR DAYS AFTER THE END OF
EACH CALENDAR MONTH, AN INTERNAL MANAGEMENT ACCOUNTS OF INCOME, BALANCE SHEET,
RETAINED EARNINGS AND CASH FLOWS OF THE COMPANY AND ITS SUBSIDIARIES, ON A
CONSOLIDATED BASIS, FOR THE PRECEDING MONTH.  IN ADDITION, THE COMPANY SHALL
PROMPTLY PREPARE AT THE END OF EACH FISCAL QUARTER AND PROMPTLY DELIVER TO
PURCHASER, BUT IN NO EVENT LATER THAN TWENTY (20) CALENDAR DAYS AFTER THE END OF
EACH FISCAL QUARTER, UNAUDITED, CONSOLIDATED BALANCE SHEETS AND RELATED
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS’ EQUITY AND CASH FLOWS
OF THE COMPANY AS OF THE END OF SUCH FISCAL QUARTER, INCLUDING COMPARATIVE
FINANCIAL INFORMATION FOR THE PERIODS SPECIFIED THEREIN WITH THE CORRESPONDING
PERIODS OF THE PRECEDING FISCAL YEAR, REVIEWED BY INDEPENDENT AUDITORS
ASSOCIATED WITH ONE OF THE “BIG 4” ACCOUNTING FIRMS.  THE COMPANY HEREBY
REPRESENTS AND WARRANTS THAT SUCH UNAUDITED CONSOLIDATED BALANCE SHEETS AND
RELATED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS’ EQUITY AND
CASH FLOWS OF THE COMPANY SHALL (I) BE COMPLETE IN ALL MATERIAL RESPECTS EXCEPT
FOR THE OMISSION OF NOTES AND SCHEDULES CONTAINED IN ANNUAL FINANCIAL
STATEMENTS; (II) PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE CONSOLIDATED
FINANCIAL POSITION OF THE COMPANY AS OF THE DATE THEREOF AND THE CONSOLIDATED
RESULTS OF ITS OPERATION, CASH FLOWS AND CHANGES IN FINANCIAL POSITION FOR THE
PERIODS THEN ENDED (EXCEPT FOR NORMAL YEAR-END ADJUSTMENTS WHICH ARE,
INDIVIDUALLY OR IN THE AGGREGATE, NOT MATERIAL); AND (III) HAVE BEEN PREPARED IN
ACCORDANCE WITH THE GAAP APPLIED ON A CONSISTENT BASIS.  IN ADDITION, THE
COMPANY SHALL PROMPTLY PREPARE AND DELIVER TO PURCHASER SUCH OTHER FINANCIAL
INFORMATION REASONABLY REQUESTED BY PURCHASER.  PURCHASER HEREBY AGREES THAT THE
FINANCIAL INFORMATION PROVIDED TO PURCHASER PURSUANT TO THIS SECTION 6.5.3 SHALL
BE GOVERNED BY THE TERMS OF THE CONFIDENTIALITY AGREEMENT, PROVIDED HOWEVER THAT
PURCHASER IS PERMITTED TO DISCLOSE ANY SUCH INFORMATION IN CONNECTION WITH THE
OFFERING.

 

6.5.4.                                      THE SELLERS AND THE COMPANY SHALL
PROMPTLY PREPARE AT THE END OF EACH CALENDAR MONTH AND PROMPTLY DELIVER TO
PURCHASER, BUT IN NO EVENT LATER THAN TEN (10) CALENDAR DAYS AFTER THE END OF
EACH CALENDAR MONTH, UPDATED TRAFFIC METRICS INFORMATION ON EACH COMPANY WEB
SITE, INDIVIDUALLY AND IN THE AGGREGATE, ACCORDING TO THE PARAMETERS REQUESTED
BY PURCHASER IN CONNECTION WITH SCHEDULE (I) OF THE DISCLOSURE SCHEDULE, AND THE
UPDATED NUMBER OF REGISTERED USERS OF EACH COMPANY WEB SITE, AS OF THE END OF
EACH SUCH MONTH.

 

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6.6.                                      REGULATORY APPROVALS.

 

6.6.1.                                      THE SELLERS AND THE COMPANY SHALL,
AND SHALL CAUSE EACH SUBSIDIARY TO, PROMPTLY AFTER THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT, EXECUTE AND FILE, OR JOIN IN THE EXECUTION AND
FILING OF, ANY APPLICATION, NOTIFICATION (INCLUDING ANY NOTIFICATION OR
PROVISION OF INFORMATION, IF ANY, THAT MAY BE REQUIRED UNDER THE ANTITRUST LAWS)
OR OTHER DOCUMENT THAT MAY BE NECESSARY IN ORDER TO OBTAIN THE AUTHORIZATION,
APPROVAL OR CONSENT OF ANY GOVERNMENTAL ENTITY, WHETHER FEDERAL, STATE, LOCAL OR
FOREIGN, WHICH MAY BE REASONABLY REQUIRED, OR WHICH PURCHASER MAY REASONABLY
REQUEST, IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.  THE SELLERS AND THE COMPANY SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO OBTAIN, AND TO COOPERATE WITH PURCHASER TO PROMPTLY OBTAIN, ALL SUCH
AUTHORIZATIONS, APPROVALS AND CONSENTS.  SELLERS SHALL PAY ANY ASSOCIATED FILING
FEES PAYABLE BY THE COMPANY WITH RESPECT TO SUCH AUTHORIZATIONS, APPROVALS AND
CONSENTS.  THE SELLERS AND THE COMPANY SHALL PROMPTLY INFORM PURCHASER OF ANY
MATERIAL COMMUNICATION BETWEEN THE COMPANY AND ANY GOVERNMENTAL ENTITY REGARDING
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.  IF SELLERS AND THE COMPANY OR ANY
AFFILIATE OF THE COMPANY RECEIVES ANY FORMAL OR INFORMAL REQUEST FOR
SUPPLEMENTAL INFORMATION OR DOCUMENTARY MATERIAL FROM ANY GOVERNMENTAL ENTITY
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, THEN THE SELLERS AND
COMPANY SHALL MAKE, OR CAUSE TO BE MADE, AS SOON AS REASONABLY PRACTICABLE, A
RESPONSE IN COMPLIANCE WITH SUCH REQUEST.  THE SELLERS AND THE COMPANY SHALL
DIRECT, IN ITS SOLE DISCRETION, THE MAKING OF SUCH RESPONSE, BUT SHALL CONSIDER
IN GOOD FAITH THE VIEWS OF PURCHASER.

 

6.6.2.                                      PURCHASER SHALL PROMPTLY AFTER THE
DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT EXECUTE AND FILE, OR JOIN IN THE
EXECUTION AND FILING OF, ANY APPLICATION, NOTIFICATION (INCLUDING ANY
NOTIFICATION OR PROVISION OF INFORMATION, IF ANY, THAT MAY BE REQUIRED UNDER THE
ANTITRUST LAWS) OR OTHER DOCUMENT THAT MAY BE NECESSARY IN ORDER TO OBTAIN THE
AUTHORIZATION, APPROVAL OR CONSENT OF ANY GOVERNMENTAL ENTITY, WHETHER FOREIGN,
FEDERAL, STATE, LOCAL OR MUNICIPAL, WHICH MAY BE REASONABLY REQUIRED IN
CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  PURCHASER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ALL
SUCH AUTHORIZATIONS, APPROVALS AND CONSENTS.  PURCHASER SHALL PAY ANY ASSOCIATED
FILING FEES PAYABLE BY PURCHASER WITH RESPECT TO SUCH AUTHORIZATIONS, APPROVALS
AND CONSENTS.  PURCHASER SHALL PROMPTLY INFORM THE SELLERS OF ANY MATERIAL
COMMUNICATION BETWEEN PURCHASER AND ANY GOVERNMENTAL ENTITY REGARDING ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.  IF PURCHASER OR ANY AFFILIATE OF PURCHASER
RECEIVES ANY FORMAL OR INFORMAL REQUEST FOR SUPPLEMENTAL INFORMATION OR
DOCUMENTARY MATERIAL FROM ANY GOVERNMENTAL ENTITY WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED HEREBY, THEN PURCHASER SHALL MAKE, OR CAUSE TO BE
MADE, AS SOON AS REASONABLY PRACTICABLE, A RESPONSE IN COMPLIANCE WITH SUCH
REQUEST.  PURCHASER SHALL DIRECT, IN ITS SOLE DISCRETION, THE MAKING OF SUCH
RESPONSE, BUT SHALL CONSIDER IN GOOD FAITH THE VIEWS OF THE SELLERS AND THE
COMPANY.

 

6.6.3.                                      NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, IF ANY ADMINISTRATIVE OR JUDICIAL ACTION OR
PROCEEDING IS INSTITUTED (OR THREATENED TO BE INSTITUTED) CHALLENGING ANY
TRANSACTION CONTEMPLATED BY THIS AGREEMENT AS VIOLATIVE OF ANY ANTITRUST LAWS,
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT:  (I) PURCHASER SHALL NOT HAVE ANY
OBLIGATION TO LITIGATE OR CONTEST ANY ADMINISTRATIVE OR JUDICIAL ACTION OR
PROCEEDING OR ANY DECREE, JUDGMENT, INJUNCTION OR OTHER ORDER, WHETHER
TEMPORARY, PRELIMINARY OR PERMANENT; AND (II) PURCHASER SHALL BE UNDER NO
OBLIGATION TO MAKE PROPOSALS, EXECUTE OR CARRY OUT AGREEMENTS OR SUBMIT TO
ORDERS PROVIDING FOR (A) THE SALE, LICENSE OR OTHER DISPOSITION OR HOLDING
SEPARATE (THROUGH THE ESTABLISHMENT OF A TRUST OR OTHERWISE) OF THE INTEREST OR
ANY ASSETS OR CATEGORIES OF ASSETS OF PURCHASER OR ANY OF ITS AFFILIATES OR THE
COMPANY OR ITS SUBSIDIARIES, (B) THE IMPOSITION OF ANY LIMITATION OR REGULATION
ON THE ABILITY OF PURCHASER OR ANY OF ITS AFFILIATES TO FREELY CONDUCT THEIR
BUSINESS OR OWN SUCH ASSETS, OR (C) THE HOLDING SEPARATE OF THE INTERESTS OR ANY
LIMITATION OR REGULATION ON THE ABILITY OF PURCHASER OR ANY OF ITS AFFILIATES TO
EXERCISE FULL RIGHTS OF OWNERSHIP OF THE INTEREST (ANY OF THE FOREGOING, AN
“ANTITRUST RESTRAINT”).  NOTHING IN THIS SECTION 6.6 SHALL LIMIT A PARTY’S RIGHT
TO TERMINATE

 

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THIS AGREEMENT PURSUANT TO SECTION 8.1.12 IF SUCH PARTY HAS, UNTIL SUCH DATE,
COMPLIED IN ALL MATERIAL RESPECTS WITH ITS OBLIGATIONS UNDER THIS SECTION 6.6.

 

6.7.                              THIRD PARTY CONSENTS; NOTICES.

 

6.7.1.                                      THE SELLERS AND THE COMPANY SHALL
USE THEIR COMMERCIALLY REASONABLE EFFORTS TO OBTAIN OR DELIVER PRIOR TO THE
CLOSING ALL CONSENTS, WAIVERS AND APPROVALS OR NOTICES UNDER EACH CONTRACT OR
FROM EACH PERSON LISTED OR DESCRIBED ON SCHEDULE (II)(B) OF THE DISCLOSURE
SCHEDULE (AND ANY CONTRACT ENTERED INTO AFTER THE DATE OF SIGNING THE ORIGINAL
PURCHASE AGREEMENT THAT WOULD HAVE BEEN REQUIRED TO BE LISTED OR DESCRIBED ON
SCHEDULE (II)(B) OF THE DISCLOSURE SCHEDULE IF ENTERED INTO PRIOR TO THE DATE OF
SIGNING THE ORIGINAL PURCHASE AGREEMENT).

 

6.7.2.                                      AFTER PRIOR COORDINATION AND
CONSULTATION WITH PURCHASER REGARDING THE TIMING AND CONTENT THEREOF, THE
SELLERS AND COMPANY SHALL GIVE ALL NOTICES AND OTHER INFORMATION REQUIRED TO BE
GIVEN TO THE EMPLOYEES OF THE COMPANY OR ANY SUBSIDIARY, ANY COLLECTIVE
BARGAINING UNIT REPRESENTING ANY GROUP OF EMPLOYEES OF THE COMPANY OR ANY
SUBSIDIARY, AND ANY APPLICABLE GOVERNMENT AUTHORITY UNDER THE NATIONAL LABOR
RELATIONS ACT, AS AMENDED, THE CODE, COBRA AND OTHER APPLICABLE LEGAL
REQUIREMENTS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

6.8.                              LITIGATION.  THE SELLERS AND THE COMPANY WILL
(I) NOTIFY PURCHASER IN WRITING PROMPTLY AFTER LEARNING OF ANY ACTION, SUIT,
ARBITRATION, MEDIATION, PROCEEDING, CLAIM, OR INVESTIGATION BY OR BEFORE ANY
GOVERNMENTAL ENTITY OR ARBITRATOR INITIATED BY OR AGAINST ANY OF THEM OR ANY OF
THE COMPANY’S SUBSIDIARIES, OR KNOWN BY ANY OF THEM TO BE THREATENED AGAINST ANY
OF THEM, ANY OF THE COMPANY’S SUBSIDIARIES OR ANY OF THEIR RESPECTIVE MANGERS
(OR DIRECTORS, AS THE CASE MAY BE) OFFICERS, EMPLOYEES OR MEMBERS (OR
STOCKHOLDERS, AS THE CASE MAY BE) IN THEIR CAPACITY AS SUCH (A “NEW LITIGATION
CLAIM”), (II) NOTIFY PURCHASER OF ONGOING MATERIAL DEVELOPMENTS IN ANY NEW
LITIGATION CLAIM AND (III) CONSULT IN GOOD FAITH WITH PURCHASER REGARDING THE
CONDUCT OF THE DEFENSE OF ANY NEW LITIGATION CLAIM.

 

6.9.                              PURCHASER’S FINANCING. PURCHASER SHALL PREPARE
AND FILE OR CAUSE TO BE PREPARED AND FILED WITH THE SEC WITHIN 45 DAYS AFTER THE
DATE OF SIGNING THE ORIGINAL PURCHASE AGREEMENT, A REGISTRATION STATEMENT ON
FORM S-3 OR ANOTHER APPROPRIATE REGISTRATION STATEMENT FOR THE PURPOSE OF AN
OFFERING TO BE MADE IN ORDER TO RAISE NET PROCEEDS (AFTER DEDUCTING FEES,
EXPENSES AND COMMISSIONS) IN AN AMOUNT SUFFICIENT IN ORDER TO PAY THE PURCHASE
PRICE AND THE EMPLOYEE BONUS AMOUNT AT CLOSING (THE “OFFERING”).  SELLERS AND
THE COMPANY SHALL FURNISH TO THE PURCHASER, PURCHASER’S ADVISORS, THE
UNDERWRITERS OF SUCH OFFERING AND SUCH UNDERWRITERS’ ADVISORS, SUCH RELEVANT
INFORMATION, IN ORAL AND WRITTEN FORM, REGARDING THE SELLERS AND THE COMPANY AS
THE PURCHASER MAY REASONABLY REQUEST AND AS SHALL BE REASONABLY REQUIRED IN
CONNECTION WITH THE PREPARATION AND FILING OF THE REGISTRATION STATEMENT AND ANY
AMENDMENTS THERETO AND IN CONNECTION WITH THE OFFERING.  IN ADDITION, THE
SELLERS AND THE COMPANY SHALL, AND SHALL CAUSE THE COMPANY’S EMPLOYEES, AUDITORS
AND OTHER REPRESENTATIVES TO COOPERATE WITH AND ASSIST PURCHASER, AS PURCHASER
MAY REASONABLY REQUEST, TO ENABLE PURCHASER TO PREPARE AND FILE WITH THE SEC THE
REGISTRATION STATEMENT, INCLUDING BY PARTICIPATING IN DRAFTING SESSIONS AND
CONFERENCE CALLS REGARDING THE REGISTRATION STATEMENT AND THE CONTENTS THEREOF
AND BY SIGNING SUCH DOCUMENTS AS MAY BE REASONABLY REQUESTED BY PURCHASER, THE
UNDERWRITERS OF THE OFFERING AND THEIR RESPECTIVE ADVISORS IN CONNECTION WITH
THE CLOSING OF THE OFFERING.

 

6.10.                        TERMINATION OF AFFILIATED AGREEMENTS.  THE SELLERS
AND THE COMPANY UNDERTAKE THAT ALL CONTRACTS BETWEEN THE COMPANY, ON THE ONE
HAND, AND SELLERS OR ANY OF THEIR AFFILIATES, ON THE OTHER HAND, IF ANY, THAT
REQUIRE, OR COULD REQUIRE WITH THE PASSAGE OF TIME, THE PAYMENT BY THE COMPANY
OF ANY AMOUNTS OR OTHER CONSIDERATION TO ANY SELLER OR ITS AFFILIATE SHALL HAVE
BEEN TERMINATED ON OR BEFORE THE CLOSING DATE, WITHOUT ANY FURTHER LIABILITY OR
OBLIGATION WHATSOEVER THEREUNDER ON THE PART OF THE COMPANY, AND PURCHASER MAY
REQUEST TO RECEIVED REASONABLY SATISFACTORY WRITTEN EVIDENCE THEREOF.

 

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6.11.                        REASONABLE EFFORTS.  SUBJECT TO THE LIMITATIONS SET
FORTH IN SECTION 6.3, EACH OF THE PARTIES HERETO AGREES TO USE ITS COMMERCIALLY
REASONABLE EFFORTS, AND TO COOPERATE WITH EACH OTHER PARTY HERETO, TO TAKE, OR
CAUSE TO BE TAKEN, ALL ACTIONS, AND TO DO, OR CAUSE TO BE DONE, ALL THINGS
NECESSARY, APPROPRIATE OR DESIRABLE TO CONSUMMATE AND MAKE EFFECTIVE, IN THE
MOST EXPEDITIOUS MANNER PRACTICABLE, THE TRANSACTIONS CONTEMPLATED HEREBY,
INCLUDING THE SATISFACTION OF THE RESPECTIVE CONDITIONS SET FORTH IN ARTICLE VI,
AND INCLUDING TO EXECUTE AND DELIVER SUCH OTHER INSTRUMENTS AND DO AND PERFORM
SUCH OTHER ACTS AND THINGS AS MAY BE NECESSARY OR REASONABLY DESIRABLE FOR
EFFECTING COMPLETELY THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.12.                        RANK OF ESCROW AMOUNT.  ONLY IF PURCHASER ELECTS TO
EFFECT THE HOLDBACK, THEN WITH RESPECT TO SUCH PORTION OF THE ESCROW FUNDS
SUBJECT TO HOLDBACK AND FOR AS LONG AS ANY SUCH ESCROW AMOUNT REMAINS PAYABLE TO
THE SELLERS HEREUNDER (THE “OUTSTANDING ESCROW AMOUNT”):

 

6.12.1.                                                   IF PURCHASER ISSUES
SENIOR NOTES (AS DEFINED BELOW), THEN:

 

6.12.1.1.                              SUCH OUTSTANDING ESCROW AMOUNT SHALL BE
SUBORDINATED IN RIGHT OF PAYMENT TO ANY AMOUNTS DUE AND OUTSTANDING (AT OR PRIOR
TO THE TIME OF PAYMENT OF ANY OUTSTANDING ESCROW AMOUNT) UNDER THE PURCHASER’S
SENIOR CONVERTIBLE NOTES (AS AMENDED, THE “SENIOR NOTES”) ISSUED PURSUANT TO THE
SECURITIES PURCHASE AGREEMENT DATED ON OR ABOUT THE DATE HEREOF (AS AMENDED,
COLLECTIVELY, THE “SENIOR DEBT”), PROVIDED THAT, SENIOR DEBT SHALL NOT INCLUDE
ANY AMOUNT OF PRINCIPAL UNDER THE SENIOR NOTES IN EXCESS OF THE MAXIMUM PRIORITY
SENIOR NOTE AMOUNT, AS DEFINED AND SET FORTH IN THE SUBORDINATION AGREEMENT.

 

6.12.1.2.                              WITHOUT DEROGATING FROM THE PROVISIONS OF
SECTION 6.12.1.1, ANY INDEBTEDNESS INCURRED BY THE PURCHASER AFTER THE DATE
HEREOF THAT IS SUBORDINATED BY ITS TERMS IN RIGHT OF PAYMENT TO THE SENIOR DEBT,
SHALL ALSO BE SUBORDINATED IN RIGHT OF PAYMENT TO SUCH OUTSTANDING ESCROW
AMOUNT.

 

6.12.1.3.                              PURCHASER SHALL GRANT TO THE SELLERS, FOR
THE RATABLE INTEREST OF THE SELLERS, A SECOND PRIORITY PERFECTED SECURITY
INTEREST IN ANY PROPERTY OR OTHER ASSETS IN WHICH A FIRST PRIORITY SECURITY
INTEREST HAS BEEN (OR WILL BE) GRANTED TO SECURE THE SENIOR DEBT, BUT SUBJECT TO
SUCH FIRST PRIORITY INTEREST, AS SET FORTH IN THE SECURITY AND PLEDGE AGREEMENT
AND THE SUBORDINATION AGREEMENT.  SELLERS SHALL RECEIVE SUCH SECURITY
AGREEMENTS, ASSIGNMENTS AND OTHER DOCUMENTS, AND THE PURCHASER SHALL MAKE SUCH
FILINGS AND TAKE SUCH OTHER ACTIONS, AS GRANTED TO HOLDERS OF SENIOR DEBT, TO
CREATE AND PERFECT SUCH SECOND PRIORITY SECURITY INTEREST, SUBJECT TO THE
SUBORDINATION, IN ALL RESPECTS, OF THE OUTSTANDING ESCROW AMOUNT TO THE RIGHTS
OF SUCH HOLDERS OF SENIOR DEBT AND CLARIFYING THE JUNIOR STATUS OF ANY LIENS
SECURING SUCH OUTSTANDING ESCROW AMOUNT AS SET FORTH IN THE SECURITY AND PLEDGE
AGREEMENT AND THE SUBORDINATION AGREEMENT.

 

6.12.2.                                                   IF PURCHASER DOES NOT
ISSUE SENIOR NOTES, THEN:

 

6.12.2.1.                              SUCH OUTSTANDING ESCROW AMOUNT (A) SHALL
RANK PARI PASSU WITH UNSECURED INDEBTEDNESS TO TRADE CREDITORS INCURRED IN THE
ORDINARY COURSE OF BUSINESS, CONSISTENT WITH PAST PRACTICE AND NOT OUTSTANDING
FOR MORE THAN 120 DAYS AFTER THE DATE SUCH PAYABLE WAS CREATED, AND (B) SHALL BE
SENIOR TO ALL OTHER INDEBTEDNESS OF THE PURCHASER OTHER THAN PERMITTED SENIOR
INDEBTEDNESS (AS DEFINED BELOW).

 

“Permitted Senior Indebtedness” shall mean means the principal of (and premium,
if any), interest on, and all fees and other amounts (including, without
limitation, any

 

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reasonable out-of-pocket costs, enforcement expenses (including reasonable
out-of-pocket legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations relating thereto) payable by
Purchaser under or in connection with any inventory and receivables credit
facility based on a customary borrowing base entered into by Purchaser with one
or more financial institutions (and on terms and conditions) to fund the working
capital needs of Purchaser; provided, however, that the aggregate outstanding
amount of such indebtedness permitted hereunder (taking into account the maximum
amounts which may be advanced under the loan documents evidencing such Permitted
Senior Indebtedness) does not at any time exceed (i) five million dollars
($5,000,000) prior to December 31, 2009 and (ii) ten million dollars
($10,000,000) thereafter.

 

6.12.2.2.                              PURCHASER SHALL GRANT TO THE SELLERS, FOR
THE RATABLE INTEREST OF THE SELLERS, A FIRST PRIORITY PERFECTED SECURITY
INTEREST IN ANY PROPERTY OR OTHER ASSETS IN WHICH A FIRST PRIORITY SECURITY
INTEREST MAY HAVE BEEN GRANTED TO SECURE THE SENIOR DEBT, SUBSTANTIALLY AS SET
FORTH IN THE SECURITY AND PLEDGE AGREEMENT (BUT WITHOUT REGARDS TO THE
SUBORDINATION PROVISIONS THEREIN, WHICH SHALL BE REMOVED).  SELLERS SHALL
RECEIVE SUCH SECURITY AGREEMENTS, ASSIGNMENTS AND OTHER DOCUMENTS, AND THE
PURCHASER SHALL MAKE SUCH FILINGS AND TAKE SUCH OTHER ACTIONS, AS MAY HAVE BEEN
GRANTED TO HOLDERS OF SENIOR DEBT, TO CREATE AND PERFECT SUCH FIRST PRIORITY
SECURITY INTEREST SUBSTANTIALLY AS SET FORTH IN THE SECURITY AND PLEDGE
AGREEMENT (BUT WITHOUT REGARDS TO THE SUBORDINATION PROVISIONS THEREIN, WHICH
SHALL BE REMOVED).

 

7.                                     CONDITIONS TO THE CLOSING

 

7.1.                              CONDITIONS TO OBLIGATIONS OF EACH PARTY TO
EFFECT THE CLOSING.  THE OBLIGATIONS OF EACH PARTY HERETO TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE SUBJECT TO THE SATISFACTION AT OR
PRIOR TO THE CLOSING OF EACH OF THE FOLLOWING CONDITIONS:

 

7.1.1.                                      NO ORDER.  NO TEMPORARY RESTRAINING
ORDER, PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER ISSUED BY ANY
GOVERNMENTAL ENTITY WHICH HAS OR COULD HAVE THE EFFECT OF MAKING THE TRANSACTION
CONTEMPLATED HEREBY ILLEGAL OR OTHERWISE PROHIBITING OR PREVENTING THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OFFERING
SHALL BE IN EFFECT, NOR SHALL ANY ACTION HAVE BEEN TAKEN BY ANY GOVERNMENTAL
ENTITY SEEKING OR THREATENING ANY OF THE FOREGOING, AND NO STATUTE, RULE,
REGULATION OR ORDER SHALL HAVE BEEN ENACTED, ENTERED, ENFORCED OR DEEMED
APPLICABLE TO THE TRANSACTION CONTEMPLATED, WHICH MAKES THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ILLEGAL.

 

7.1.2.                                      GOVERNMENTAL APPROVALS.  PURCHASER,
SELLERS AND THE COMPANY SHALL HAVE TIMELY OBTAINED FROM EACH GOVERNMENTAL ENTITY
ALL APPROVALS, WAIVERS AND CONSENTS, IF ANY, NECESSARY FOR CONSUMMATION OF, OR
IN CONNECTION WITH, THE TRANSACTIONS CONTEMPLATED HEREBY.  ALL APPLICABLE
WAITING PERIODS UNDER THE ANTITRUST LAWS SHALL HAVE EXPIRED OR EARLY TERMINATION
OF SUCH WAITING PERIODS SHALL HAVE BEEN GRANTED BY BOTH THE FEDERAL TRADE
COMMISSION AND THE UNITED STATES DEPARTMENT OF JUSTICE (OR, WITH RESPECT TO
FOREIGN ANTITRUST LAWS, THE APPLICABLE FOREIGN GOVERNMENTAL ENTITY).

 

7.2.                              ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE
SELLERS.  THE OBLIGATIONS OF THE SELLERS TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE SUBJECT TO THE SATISFACTION AT OR PRIOR TO THE
CLOSING OF EACH OF THE FOLLOWING CONDITIONS (IT BEING UNDERSTOOD THAT EACH SUCH
CONDITION IS SOLELY FOR THE BENEFIT OF THE SELLERS AND MAY BE WAIVED BY THE
SELLERS REPRESENTATIVE IN WRITING IN ITS SOLE DISCRETION WITHOUT NOTICE,
LIABILITY OR OBLIGATION TO ANY PERSON):

 

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7.2.1.                                      REPRESENTATIONS, WARRANTIES AND
COVENANTS.  THE REPRESENTATIONS AND WARRANTIES OF PURCHASER IN THIS AGREEMENT
SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR SUCH
REPRESENTATIONS AND WARRANTIES THAT ARE QUALIFIED BY THEIR TERMS BY A REFERENCE
TO MATERIALITY, WHICH REPRESENTATIONS AND WARRANTIES AS SO QUALIFIED SHALL BE
TRUE AND CORRECT IN ALL RESPECTS) ON AND AS OF THE DATE HEREOF AND ON AND AS OF
THE CLOSING DATE AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES WERE MADE ON AND
AS OF SUCH DATE (EXCEPT FOR REPRESENTATIONS AND WARRANTIES WHICH SPECIFICALLY
RELATE TO ANOTHER DATE, WHICH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND
CORRECT WITH RESPECT TO SUCH DATE).  PURCHASER SHALL HAVE PERFORMED AND COMPLIED
IN ALL MATERIAL RESPECTS WITH ALL COVENANTS, OBLIGATIONS AND CONDITIONS OF THIS
AGREEMENT REQUIRED TO BE PERFORMED AND COMPLIED WITH BY IT AT OR PRIOR TO THE
CLOSING.

 

7.3.                              ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF
PURCHASER.  THE OBLIGATIONS OF PURCHASER TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE SUBJECT TO THE SATISFACTION AT OR PRIOR TO THE
CLOSING OF EACH OF THE FOLLOWING CONDITIONS (IT BEING UNDERSTOOD THAT EACH SUCH
CONDITION IS SOLELY FOR THE BENEFIT OF PURCHASER AND MAY BE WAIVED BY PURCHASER
IN WRITING IN ITS SOLE DISCRETION WITHOUT NOTICE, LIABILITY OR OBLIGATION TO ANY
PERSON):

 

7.3.1.                                      REPRESENTATIONS, WARRANTIES AND
COVENANTS.  THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANY IN
THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR
SUCH REPRESENTATIONS AND WARRANTIES THAT ARE QUALIFIED BY THEIR TERMS BY A
REFERENCE TO MATERIALITY, WHICH REPRESENTATIONS AND WARRANTIES AS SO QUALIFIED
SHALL BE TRUE AND CORRECT IN ALL RESPECTS) ON AND AS OF THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT AND ON AND AS OF THE CLOSING DATE AS THOUGH SUCH
REPRESENTATIONS AND WARRANTIES WERE MADE ON AND AS OF SUCH DATE (EXCEPT FOR
REPRESENTATIONS AND WARRANTIES WHICH SPECIFICALLY RELATE TO ANOTHER EARLIER,
WHICH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT WITH RESPECT TO
SUCH DATE).  THE SELLERS AND THE COMPANY SHALL HAVE PERFORMED AND COMPLIED IN
ALL MATERIAL RESPECTS WITH ALL COVENANTS, OBLIGATIONS AND CONDITIONS OF THIS
AGREEMENT REQUIRED TO BE PERFORMED AND COMPLIED WITH BY THE SELLERS AND COMPANY
AT OR PRIOR TO THE CLOSING.

 

7.3.2.                                      RECEIPT OF CLOSING DELIVERIES. 
PURCHASER SHALL HAVE RECEIVED EACH OF THE DELIVERIES AGREEMENTS, INSTRUMENTS AND
OTHER DOCUMENTS SET FORTH IN SECTION 2.2; PROVIDED, HOWEVER, THAT SUCH RECEIPT
SHALL NOT BE DEEMED TO BE AN AGREEMENT BY PURCHASER THAT THE AMOUNTS SET FORTH
ON ANY OF AGREEMENTS, INSTRUMENTS OR DOCUMENTS SET FORTH IN SECTION 2.2 IS
ACCURATE AND SHALL NOT PREJUDICE PURCHASER’S REMEDIES HEREUNDER IF ANY OF THE
FOREGOING DOCUMENTS IS NOT ACCURATE.

 

7.3.3.                                      NO INJUNCTIONS OR RESTRAINTS ON
CONDUCT OF BUSINESS.  NO TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT
INJUNCTION OR OTHER ORDER ISSUED BY ANY GOVERNMENTAL ENTITY WHICH HAS OR COULD
HAVE THE EFFECT OF LIMITING OR RESTRICTING PURCHASER’S OWNERSHIP, CONDUCT OR
OPERATION OF THE BUSINESS OF THE COMPANY AND/OR ANY SUBSIDIARY FOLLOWING THE
CLOSING SHALL BE IN EFFECT, NOR SHALL THERE BE PENDING OR THREATENED ANY SUIT,
ACTION OR PROCEEDING SEEKING ANY OF THE FOREGOING OR ANY OTHER ANTITRUST
RESTRAINT.

 

7.3.4.                                      NO MATERIAL ADVERSE EFFECT.  THERE
SHALL NOT HAVE OCCURRED A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE COMPANY.

 

7.3.5.                                      EMPLOYEES.  EACH EMPLOYEE SET FORTH
ON SCHEDULE  HERETO SHALL HAVE REMAINED CONTINUOUSLY EMPLOYED WITH THE COMPANY
FROM THE DATE OF THIS AGREEMENT THROUGH THE CLOSING, AND NO ACTION SHALL HAVE
BEEN TAKEN BY ANY SUCH INDIVIDUAL TO RESCIND SUCH EMPLOYEE’S EMPLOYMENT
AGREEMENTS AND/OR THE A NON-COMPETITION, NON-SOLICITATION AND ASSIGNMENT OF
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.

 

7.3.6.                                      THIRD PARTY CONSENTS.  ALL CONSENTS,
WAIVERS, APPROVALS OR NOTICES UNDER EACH CONTRACT OR FROM EACH PERSON LISTED OR
DESCRIBED ON SCHEDULE (II)(B) OF THE DISCLOSURE SCHEDULE (OR

 

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THAT WOULD HAVE BEEN REQUIRED TO BE LISTED OR DESCRIBED THEREON) SHALL HAVE BEEN
OBTAINED OR DELIVERED, AS THE CASE MAY BE.

 

7.3.7.                                      FINANCING. THE OFFERING SHALL HAVE
SUCCESSFULLY CLOSED AND THE NET PROCEEDS TO PURCHASER THEREFROM DEPOSITED IN THE
BACK ACCOUNTS OF PURCHASER.

 

8.                                     TERMINATION

 

8.1.                              TERMINATION.  AT ANY TIME PRIOR TO THE
CLOSING, THIS AGREEMENT MAY BE TERMINATED AND THE TRANSACTIONS CONTEMPLATED
HEREBY ABANDONED BY AUTHORIZED ACTION TAKEN BY THE TERMINATING PARTY:

 

8.1.1.                                      BY MUTUAL WRITTEN OF THE SELLERS AND
PURCHASER;

 

8.1.2.                                      BY EITHER PURCHASER OR THE SELLERS,
IF THE CLOSING SHALL NOT HAVE OCCURRED BY A DATE BEING 228(1) DAYS FROM THE
INITIAL FILING DATE OF THE REGISTRATION STATEMENT IN RESPECT OF THE OFFERING BY
THE PURCHASER WITH THE SEC OR SUCH OTHER DATE THAT PURCHASER AND THE SELLERS
REPRESENTATIVE MAY AGREE UPON IN WRITING (THE “TERMINATION DATE”); PROVIDED,
HOWEVER, THAT (I) IN CASE THE REGISTRATION STATEMENT IN RESPECT OF THE OFFERING
IS STILL UNDER THE SEC REVIEW AT SUCH DATE, THEN THE TERMINATION DATE SHALL BE
EXTENDED BY SUCH ADDITIONAL PERIOD; AND (II) IN CASE THAT THE REVIEW OF THE
COMPANY’S FINANCIAL STATEMENTS FOR THE FIRST AND SECOND FISCAL QUARTERS SHALL
NOT HAVE BEEN COMPLETED WITHIN 30 DAYS FOLLOWING THE DATE OF SIGNING THE
ORIGINAL PURCHASE AGREEMENT, THEN THE TERMINATION DATE SHALL BE EXTENDED BY SUCH
ADDITIONAL PERIOD); AND PROVIDED, FURTHER, THAT THE RIGHT TO TERMINATE THIS
AGREEMENT UNDER THIS SECTION 8.1.2 SHALL NOT BE AVAILABLE TO ANY PARTY WHOSE
BREACH OF THIS AGREEMENT HAS RESULTED IN THE FAILURE OF THE CLOSING TO OCCUR ON
OR BEFORE THE TERMINATION DATE;

 

8.1.3.                                      BY EITHER PURCHASER OR THE SELLERS,
IF ANY PERMANENT INJUNCTION OR OTHER ORDER OF A GOVERNMENTAL ENTITY OF COMPETENT
AUTHORITY PREVENTING THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY
SHALL HAVE BECOME FINAL AND NON-APPEALABLE; PROVIDED, HOWEVER, THAT THE RIGHT TO
TERMINATE THIS AGREEMENT UNDER THIS SECTION 8.1.3 SHALL NOT BE AVAILABLE TO ANY
PARTY WHOSE BREACH OF THIS AGREEMENT HAS BEEN THE CAUSE OF OR RESULTED IN SUCH
INJUNCTION OR OTHER ORDER;

 

8.1.4.                                      BY PURCHASER, IF (I) THE SELLERS
SHALL HAVE BREACHED ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT OF THE
SELLERS OR THE COMPANY CONTAINED HEREIN, WHICH BREACH SHALL NOT HAVE BEEN CURED
WITHIN FIVE BUSINESS DAYS AFTER RECEIPT BY THE SELLERS OF WRITTEN NOTICE OF SUCH
BREACH (PROVIDED, HOWEVER, THAT NO SUCH CURE PERIOD SHALL BE AVAILABLE OR
APPLICABLE TO ANY SUCH BREACH WHICH BY ITS NATURE CANNOT BE CURED), AND IF
CLOSING WERE TO OCCUR ON THE DATE OF SUCH TERMINATION SUCH BREACH WOULD RESULT
IN THE FAILURE OF ANY OF THE CONDITIONS SET FORTH IN SECTION 7.1 OR SECTION 7.3
TO BE SATISFIED, (II) SECTION 6.3 HAS BEEN BREACHED PRIOR TO THE TERMINATION
DATE, (III) THE CIRCUMSTANCES OR EVENTS DESCRIBED IN SECTION 7.3.3 SHALL HAVE
OCCURRED, OR (IV) THERE SHALL HAVE BEEN A MATERIAL ADVERSE EFFECT WITH RESPECT
TO THE COMPANY; OR

 

8.1.5.                                      BY THE SELLERS, IF PURCHASER SHALL
HAVE BREACHED ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT CONTAINED
HEREIN, WHICH BREACH SHALL NOT HAVE BEEN CURED WITHIN FIVE BUSINESS DAYS AFTER
RECEIPT BY PURCHASER OF WRITTEN NOTICE OF SUCH BREACH (PROVIDED, HOWEVER, THAT
NO SUCH CURE PERIOD SHALL BE AVAILABLE OR APPLICABLE TO ANY SUCH BREACH WHICH BY
ITS NATURE CANNOT BE CURED) AND SUCH BREACH WOULD RESULT IN THE FAILURE OF ANY
OF THE CONDITIONS SET FORTH IN SECTION 7.1 OR SECTION 7.2 TO BE SATISFIED.

 

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(1) SECOND AMENDMENT TO THE PURCHASE AGREEMENT DATED NOVEMBER 12, 2007

 

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8.2.                              EFFECT OF TERMINATION.  IN THE EVENT OF
TERMINATION OF THIS AGREEMENT AS PROVIDED IN SECTION 8.1, THIS AGREEMENT SHALL
FORTHWITH BECOME VOID AND THERE SHALL BE NO LIABILITY OR OBLIGATION ON THE PART
OF PURCHASER, SELLERS, THE COMPANY OR THEIR RESPECTIVE OFFICERS, MANAGERS (OR
DIRECTORS, AS THE CASE MAY BE), STOCKHOLDERS OR AFFILIATES; PROVIDED, HOWEVER,
THAT (I) THE PROVISIONS OF SECTION 2.3 (EXPENSES), 6.2 (CONFIDENTIALITY; PUBLIC
DISCLOSURE), THIS SECTIONS 8.2 (EFFECT OF TERMINATION), SECTION 8.3 (TERMINATION
FEES AND EXPENSES), SECTION 10 (GENERAL PROVISIONS) AND THE CONFIDENTIALITY
AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT AND SURVIVE ANY TERMINATION OF
THIS AGREEMENT AND (II) THE TERMINATION OF THIS AGREEMENT SHALL NOT RELIEVE ANY
PARTY FROM ANY LIABILITY FOR ANY MATERIAL BREACH OF ANY COVENANT OR OBLIGATION
OR FOR ANY INTENTIONAL AND MATERIAL BREACH OF ANY REPRESENTATION OR WARRANTY
CONTAINED IN THIS AGREEMENT.

 

8.3.                              TERMINATION FEES AND EXPENSES.

 

8.3.1.                                                         PURCHASER SHALL
REIMBURSE SELLERS FOR DIRECT OUT-OF-POCKET EXPENSES FOR COUNSEL AND ACCOUNTANTS
THAT THE SELLERS HAVE INCURRED IN CONNECTION WITH THE PREPARATION, NEGOTIATION,
EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, NOT TO EXCEED $400,000, AS SELLERS’ SOLE AND EXCLUSIVE REMEDY UPON
TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 8.1.2 IN THE EVENT THAT
CLOSING DOES NOT OCCUR DUE TO FAILURE TO SATISFY THE CONDITIONS SET FORTH IN
SECTION 7.3.7. SUCH PAYMENT SHALL BE PAID WITHIN 10 BUSINESS DAYS FOLLOWING SUCH
TERMINATION AND UPON THE RECEIPT BY PURCHASER OF AN INVOICE FROM SELLERS SETTING
FORTH SUCH EXPENSES IN REASONABLE DETAIL, ACCOMPANIED BY REASONABLE
DOCUMENTATION.

 

8.3.2.                                                         SELLERS SHALL PAY
PURCHASER A FEE IN THE AMOUNT OF $2,000,000, AS PURCHASER’S SOLE AND EXCLUSIVE
REMEDY UPON TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 8.1.4. SUCH
PAYMENT SHALL BE PAID WITHIN 10 BUSINESS DAYS FOLLOWING THE DATE OF SUCH
TERMINATION.

 

8.3.3.                                                         PURCHASER SHALL
PAY SELLERS (IN THE SAME ALLOCATION AS THE ALLOCATION OF THE PURCHASE PRICE) A
FEE IN THE AMOUNT OF $2,000,000, AS SELLERS’ SOLE AND EXCLUSIVE REMEDY UPON
TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 8.1.5. SUCH PAYMENT SHALL BE
PAID WITHIN 10 BUSINESS DAYS FOLLOWING THE DATE OF SUCH TERMINATION.

 

8.3.4.                                                         THE PARTIES
ACKNOWLEDGES THAT THE AGREEMENTS CONTAINED IN THIS SECTION 8.3 ARE AN INTEGRAL
PART OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND THAT IF THIS
AGREEMENT IS TERMINATED AS PROVIDED IN THE APPLICABLE SUB-SECTIONS OF
SECTION 8.1, THAT THE AMOUNTS PAYABLE PURSUANT TO SECTIONS 8.3.1 THROUGH 8.3.3
ARE REASONABLE FORECASTS OF THE ACTUAL DAMAGES WHICH MAY BE INCURRED BY SUCH
PARTY UNDER SUCH CIRCUMSTANCES AND CONSTITUTE LIQUIDATED DAMAGES AND NOT A
PENALTY, AND FURTHER THAT, WITHOUT THESE AGREEMENTS, THE PARTIES WOULD NOT ENTER
INTO THIS AGREEMENT.

 

8.3.5.                                                         ALL PAYMENTS TO
BE MADE UNDER THIS SECTION 8.3 SHALL BE PAID IN U.S. DOLLARS BY WIRE TRANSFER IN
IMMEDIATELY AVAILABLE FUNDS TO SUCH BANK ACCOUNTS THE DETAILS OF WHICH SHALL BE
PROVIDED BY THE RELEVANT PAYEE(S) TO THE RELEVANT PAYOR UPON THE TIME OF
PAYMENT.

 

8.4.                              NOTHING IN THIS SECTION 8 IS INTENDED TO NOR
SHALL IT DEROGATE FROM OR LIMIT THE RIGHTS AND/OR REMEDIES ANY PARTY MAY HAVE
PURSUANT TO THIS AGREEMENT, BY LAW OR EQUITY AT ANY TIME PRIOR TO TERMINATION OF
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK INJUNCTIVE
RELIEF OR SPECIFIC PERFORMANCE IN ANY COURT OF COMPETENT JURISDICTION.

 

9.                                     ESCROW FUND AND INDEMNIFICATION

 

9.1.                              ESCROW FUND.  THE ESCROW AMOUNT SUBJECT TO
HOLDBACK SHALL BE HELD BACK BY THE PURCHASER (IF PURCHASER ELECTS TO EFFECT THE
HOLDBACK WITH RESPECT TO THE ENTIRE OR ANY PART OF THE ESCROW

 

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AMOUNT), AND/OR DEPOSITED WITH THE ESCROW AGENT (IF PURCHASER ELECTS TO EFFECT
THE INDEMNITY ESCROW WITH RESPECT TO THE ENTIRE OR ANY PART OF THE ESCROW
AMOUNT), AS THE CASE MAY BE (SUCH ESCROW AMOUNT, TOGETHER WITH ANY INTEREST THAT
MAY BE EARNED THEREON, TO CONSTITUTE AN ESCROW FUND (THE “ESCROW FUND”)) AND TO
BE GOVERNED BY THE PROVISIONS SET FORTH HEREIN.  THE ESCROW FUND SHALL BE
AVAILABLE TO COMPENSATE PURCHASER ON BEHALF OF ITSELF OR ANY OTHER INDEMNIFIED
PERSON OR SELLERS, AS THE CASE MAY BE, FOR INDEMNIFIABLE DAMAGES PURSUANT TO THE
INDEMNIFICATION OBLIGATIONS OF THE APPLICABLE INDEMNIFYING PARTY HEREUNDER.

 

9.2.                              INDEMNIFICATION BY SELLERS.  SUBJECT TO THE
LIMITATIONS SET FORTH IN THIS SECTION 9, THE SELLERS SHALL, JOINTLY AND
SEVERALLY, INDEMNIFY AND HOLD HARMLESS PURCHASER, ITS AFFILIATES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES, AND EACH PERSON, IF ANY,
WHO CONTROLS OR MAY CONTROL PURCHASER WITHIN THE MEANING OF THE SECURITIES ACT
FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES, DAMAGES, REDUCTIONS IN VALUE,
COSTS AND EXPENSES, INCLUDING COSTS OF INVESTIGATION AND DEFENSE AND REASONABLE
FEES AND EXPENSES OF LAWYERS, EXPERTS AND OTHER PROFESSIONALS (COLLECTIVELY,
“INDEMNIFIABLE DAMAGES”) DIRECTLY OR INDIRECTLY ARISING OUT OF, RESULTING FROM
OR IN CONNECTION WITH:

 

9.2.1.                                                         ANY FAILURE OF
ANY REPRESENTATION OR WARRANTY MADE BY THE SELLERS OR THE COMPANY IN THIS
AGREEMENT OR THE DISCLOSURE SCHEDULE (INCLUDING ANY EXHIBIT OR SCHEDULE TO THE
DISCLOSURE SCHEDULE), AND ANY CERTIFICATE TO BE DELIVERED PURSUANT TO THIS
AGREEMENT, TO BE TRUE AND CORRECT AS OF THE DATE OF THIS AGREEMENT AND AS OF THE
CLOSING DATE AS THOUGH SUCH REPRESENTATION OR WARRANTY WERE MADE AS OF THE
CLOSING DATE (EXCEPT IN THE CASE OF REPRESENTATIONS AND WARRANTIES WHICH
SPECIFICALLY RELATE TO ANOTHER DATE, WHICH REPRESENTATIONS AND WARRANTIES SHALL
BE TRUE AND CORRECT AS OF SUCH DATE);

 

9.2.2.                                                         ANY BREACH OF OR
DEFAULT IN CONNECTION WITH ANY OF THE COVENANTS OR AGREEMENTS MADE BY THE
SELLERS OR THE COMPANY IN THIS AGREEMENT OR THE DISCLOSURE SCHEDULE (INCLUDING
ANY EXHIBIT OR SCHEDULE TO THE DISCLOSURE SCHEDULE) AND ANY CERTIFICATE TO BE
DELIVERED PURSUANT TO THIS AGREEMENT;

 

9.2.3.                                                         IMPOSITION,
ASSESSMENT OR ASSERTION OF ANY TAXES OF THE COMPANY OR ANY SUBSIDIARY OR ANY
TAXES FOR WHICH THE COMPANY OR SUBSIDIARY IS OR MAY BECOME LIABLE (INCLUDING,
WITHOUT LIMITATION, BY REASON OF NON-RECOGNITION OF DEDUCTIONS, CHANGES IN
ACCOUNTING METHODS, FAILURE TO FULLY COMPLY WITH APPLICABLE LAWS OR FAILURE TO
QUALIFY IN ANY FOREIGN JURISDICTION AND INCLUDING THOSE INCURRED IN A CONTEST OF
GOOD FAITH BY APPROPRIATE PROCEEDINGS OF THE IMPOSITION, ASSESSMENT OR ASSERTION
OF ANY SUCH TAXES) ON ACCOUNT OF (A) ANY TAXABLE PERIODS THAT ENDS ON OR BEFORE
THE CLOSING DATE, AND (B) ANY TAXABLE PERIOD THAT BOTH INCLUDES AND ENDS AFTER
THE CLOSING DATE, FOR THE PORTION OF SUCH TAXABLE PERIOD THAT ENDS ON THE
CLOSING DATE;

 

9.2.4.                                                         ANY AMOUNTS
DETERMINED FOLLOWING THE CLOSING THAT SHOULD HAVE BEEN DEDUCTED FROM THE
PURCHASE PRICE PURSUANT TO THE ADJUSTMENTS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 1.2.2.1 BUT WERE NOT SO DEDUCTED OR ANY AMOUNT DETERMINED FOLLOWING THE
CLOSING THAT SHOULD NOT HAVE BEEN DEDUCTED FROM THE PURCHASE PRICE OR PERMITTED
TO BE PAID AS DIVIDEND PURSUANT IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 1.2.2.2 BUT WERE SO DEDUCTED OR PAID.

 

9.2.5.                                                         ANY TRANSACTION
EXPENSES PAID BY THE COMPANY PRIOR TO THE CLOSING OR WHICH WERE NOT ASSUMED AND
PAID BY THE SELLERS AFTER THE CLOSING.

 

9.2.6.                                                         ANY OBLIGATIONS
OF THE SELLERS TO MAKE CONTRIBUTIONS AS PROVIDED IN CHAPTER 5 OF THE
CORPORATIONS CODE (COMMENCING WITH SECTION 17200), TO RETURN ANY UNLAWFUL
DISTRIBUTIONS MADE UNDER CHAPTER 6 (COMMENCING WITH SECTION 17250) OR CHAPTER 8
(COMMENCING WITH SECTION 17350).

 

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IN DETERMINING THE AMOUNT OF ANY INDEMNIFIABLE DAMAGES IN RESPECT OF THE FAILURE
OF ANY REPRESENTATION OR WARRANTY TO BE TRUE AND CORRECT AS OF ANY PARTICULAR
DATE, ANY MATERIALITY STANDARD OR QUALIFICATION CONTAINED IN SUCH REPRESENTATION
OR WARRANTY SHALL BE DISREGARDED.

 

9.3.                              INDEMNIFICATION BY PURCHASER.  SUBJECT TO THE
LIMITATIONS SET FORTH IN THIS SECTION 9, PURCHASER SHALL INDEMNIFY AND HOLD
HARMLESS SELLERS FROM AND AGAINST ANY INDEMNIFIABLE DAMAGES DIRECTLY ARISING OUT
OF, RESULTING FROM OR IN CONNECTION WITH ANY FAILURE OF ANY REPRESENTATION OR
WARRANTY MADE BY THE PURCHASER IN THIS AGREEMENT TO BE TRUE AND CORRECT AS OF
THE DATE OF THIS AGREEMENT AND AS OF THE CLOSING DATE AS THOUGH SUCH
REPRESENTATION OR WARRANTY WERE MADE AS OF THE CLOSING DATE (EXCEPT IN THE CASE
OF REPRESENTATIONS AND WARRANTIES WHICH SPECIFICALLY RELATE TO ANOTHER DATE,
WHICH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT AS OF SUCH DATE),
UP TO AN AMOUNT EQUAL TO THE ESCROW AMOUNT, AS THE SOLE AND EXCLUSIVE REMEDY FOR
THE INDEMNITY OBLIGATIONS HEREUNDER.

 

9.4.                              INDEMNIFIABLE DAMAGE THRESHOLD; OTHER
LIMITATIONS.

 

9.4.1.                                                         NO INDEMNIFIED
PERSON SHALL BE ENTITLED TO INDEMNIFICATION PURSUANT TO SECTIONS 9.2.1 OR 9.2.2
(AND THAT DOES NOT INVOLVE FRAUD, WILLFUL BREACH OR INTENTIONAL
MISREPRESENTATION BY THE SELLERS, THE COMPANY OR ANY SUBSIDIARY, ANY INACCURACY
OR BREACH OF ANY OF THE REPRESENTATIONS AND WARRANTIES IN SECTION 3.3 (CAPITAL
STRUCTURE), SECTION 3.4 (TITLE TO INTEREST), 3.5 (AUTHORITY; NON-CONTRAVENTION),
SECTION 3.12 (INTELLECTUAL PROPERTY AND INTERNET PRACTICES) OR SECTION 3.14 (TAX
MATTERS), OR BREACH OF SECTION 6.4), OR PURSUANT TO SECTION 9.3, UNLESS AND
UNTIL AN OFFICER’S CERTIFICATE DESCRIBING INDEMNIFIABLE DAMAGES IN AN AGGREGATE
AMOUNT GREATER THAN $100,000 (THE “THRESHOLD”) HAS BEEN DELIVERED, IN WHICH CASE
THE INDEMNIFIED PERSON SHALL BE ENTITLED TO INDEMNIFICATION FOR ALL
INDEMNIFIABLE DAMAGES IN EXCESS OF THE THRESHOLD, SUBJECT TO THE LIMITATIONS SET
FORTH IN THIS SECTION 9.

 

9.4.2.                                                         IF THE CLOSING
OCCURS, OFFSET AGAINST (IN CASE PURCHASER ELECTS TO EFFECT THE HOLDBACK) AND/OR
RECOVERY FROM (IN CASE PURCHASER ELECTS TO EFFECT THE INDEMNITY ESCROW) THE
ESCROW FUND, AS THE CASE MAY BE, SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR THE
INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT FOR THE MATTERS LISTED IN
SECTIONS 9.2.1 OR 9.2.2, EXCEPT IN THE CASE OF (I) FRAUD, WILLFUL BREACH OR
INTENTIONAL MISREPRESENTATION BY THE SELLERS, THE COMPANY OR ANY SUBSIDIARY,
(II) ANY FAILURE OF ANY OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTION 3.3 (CAPITAL STRUCTURE), SECTION 3.4 (TITLE TO INTEREST), 3.5
(AUTHORITY; NON-CONTRAVENTION), SECTION 3.12 (INTELLECTUAL PROPERTY AND INTERNET
PRACTICES) OR SECTION 3.14 (TAX MATTERS) TO BE TRUE AND CORRECT AS AFORESAID,
AND (III) ANY BREACH OF OR DEFAULT IN CONNECTION WITH ANY COVENANT OR AGREEMENT
TO THE EXTENT SUCH COVENANT OR AGREEMENT IS TO SURVIVE OR BE PERFORMED ALSO
AFTER THE ESCROW PERIOD (INCLUDING, WITHOUT LIMITATION, PURSUANT TO
SECTION 6.4); WITH RESPECT TO EACH THE SELLERS SHALL BE LIABLE FOR ANY
INDEMNIFIABLE DAMAGES RESULTING THEREFROM AFTER INDEMNIFIED PERSONS HAVE
EXHAUSTED OR MADE CLAIMS UPON ALL AMOUNTS IN THE ESCROW FUND (AFTER TAKING INTO
ACCOUNT ALL OTHER CLAIMS FOR INDEMNIFICATION FROM THE ESCROW FUND MADE BY
INDEMNIFIED PERSONS). NOTWITHSTANDING ANYTHING TO THE CONTRARY, THIS SECTION 9
SHALL IN NO WAY LIMIT AN INDEMNIFIED PARTY’S RIGHT TO SEEK INJUNCTIVE RELIEF OR
SPECIFIC PERFORMANCE.

 

9.4.3.                                                         THE AMOUNT OF
INDEMNIFIABLE DAMAGES FOR WHICH INDEMNIFICATION IS PROVIDED UNDER THIS AGREEMENT
WILL BE (I) INCREASED TO TAKE ACCOUNT OF ANY TAX COST INCURRED (GROSSED UP FOR
SUCH INCREASE) BY THE INDEMNIFIED PERSONS ARISING FROM THE RECEIPT OF INDEMNITY
PAYMENTS HEREUNDER AND (II) REDUCED TO TAKE ACCOUNT OF ANY TAX BENEFIT REALIZED
BY THE INDEMNIFIED PERSONS ARISING FROM THE INCURRENCE OR PAYMENT OF ANY SUCH
INDEMNIFIABLE DAMAGES.  IN COMPUTING THE AMOUNT OF ANY SUCH TAX COST OR TAX
BENEFIT, THE INDEMNIFIED PERSONS WILL BE DEEMED TO BE SUBJECT TO THE APPLICABLE
FEDERAL, STATE, LOCAL AND/OR LOCAL COUNTRY INCOME TAXES AT THE MAXIMUM STATUTORY
RATE THEN IN EFFECT.

 

9.5.                              PERIOD FOR CLAIMS AGAINST ESCROW FUND.  THE
PERIOD DURING WHICH INDEMNIFICATION CLAIMS FOR INDEMNIFIABLE DAMAGES MAY BE MADE
(THE “CLAIMS PERIOD”) SHALL COMMENCE AT THE CLOSING

 

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AND TERMINATE ON THE DATE THAT IS 12 MONTHS FOLLOWING THE CLOSING DATE (THE
“ESCROW PERIOD”), PROVIDED, HOWEVER, THAT THE CLAIMS PERIOD FOR INDEMNIFIABLE
DAMAGES PURSUANT TO SECTION 9.2 (I) RESULTING FROM OR IN CONNECTION WITH FRAUD,
WILLFUL BREACH OR INTENTIONAL MISREPRESENTATION BY THE COMPANY OR ANY
SUBSIDIARY, (II) ARISING FROM ANY BREACH OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN SECTION 3.3 (CAPITAL STRUCTURE), SECTION 3.4 (TITLE TO INTEREST),
3.5 (AUTHORITY; NON-CONTRAVENTION), SECTION 3.12 (INTELLECTUAL PROPERTY AND
INTERNET PRACTICES) OR SECTION 3.14 (TAX MATTERS), (III) ARISING FROM ANY BREACH
OF OR DEFAULT IN CONNECTION WITH ANY COVENANT OR AGREEMENT TO THE EXTENT SUCH
COVENANT OR AGREEMENT IS TO SURVIVE OR BE PERFORMED ALSO AFTER THE ESCROW PERIOD
(INCLUDING, WITHOUT LIMITATION, PURSUANT TO SECTION 6.4), OR (IV) ARISING
PURSUANT TO EITHER OF SECTIONS 9.2.3 THROUGH 9.2.6, SHALL TERMINATE UPON THE
DATE THAT IS 30 DAYS AFTER EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS
WITH RESPECT TO ANY THERETOFORE UNASSERTED CLAIMS ARISING OUT OF OR OTHERWISE IN
RESPECT OF THE ITEMS COVERED BY SECTIONS (I) THROUGH (IV) ABOVE. 
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, SUCH PORTION OF THE
ESCROW FUND AT THE END OF THE ESCROW PERIOD (IN CASE OF INDEMNITY ESCROW) OR THE
HOLDBACK RELEASE DATE (IN CASE OF HOLDBACK) AS MAY BE NECESSARY TO SATISFY ANY
UNRESOLVED OR UNSATISFIED CLAIMS FOR INDEMNIFIABLE DAMAGES SPECIFIED IN ANY
OFFICER’S CERTIFICATE DELIVERED TO THE SELLERS REPRESENTATIVE PRIOR TO
EXPIRATION OF THE ESCROW PERIOD SHALL REMAIN IN THE ESCROW FUND UNTIL SUCH
CLAIMS FOR INDEMNIFIABLE DAMAGES HAVE BEEN RESOLVED OR SATISFIED.  THE REMAINDER
OF THE ESCROW FUND, IF ANY, SHALL BE PAID TO THE SELLERS PROMPTLY AFTER THE
ESCROW PERIOD (IN CASE OF INDEMNITY ESCROW) OR THE HOLDBACK RELEASE DATE (IN
CASE OF HOLDBACK) IN THE SAME ALLOCATION AS THAT OF THE PURCHASE PRICE.

 

9.6.                              CLAIMS.

 

9.6.1.                                                         ON OR BEFORE THE
LAST DAY OF THE ESCROW PERIOD, PURCHASER MAY DELIVER TO THE SELLERS
REPRESENTATIVE (IN CASE PURCHASER ELECTS TO EFFECT THE HOLDBACK) AND/OR TO THE
ESCROW AGENT WITH A DUPLICATE COPY TO THE SELLERS REPRESENTATIVE (IN CASE
PURCHASER ELECTS TO EFFECT THE INDEMNITY ESCROW), AS THE CASE MAY BE, A
CERTIFICATE SIGNED BY ANY OFFICER OF PURCHASER (IN CASE OF AN INDEMNIFICATION
CLAIM PURSUANT TO SECTION 9.2), OR SELLERS REPRESENTATIVE MAY DELIVER TO THE
PURCHASER A CERTIFICATE (IN CASE OF AN INDEMNIFICATION CLAIM PURSUANT TO
SECTION 9.3)  (AN “OFFICER’S CERTIFICATE”):

 

9.6.1.1.            STATING THAT AN INDEMNIFIED PERSON HAS INCURRED, PAID,
RESERVED OR ACCRUED, OR REASONABLY ANTICIPATES THAT IT MAY INCUR, PAY, RESERVE
OR ACCRUE, INDEMNIFIABLE DAMAGES (OR THAT WITH RESPECT TO ANY TAX MATTERS, THAT
ANY TAX AUTHORITY MAY RAISE SUCH MATTER IN AUDIT OF PURCHASER OR ITS AFFILIATES,
WHICH COULD GIVE RISE TO INDEMNIFIABLE DAMAGES);

 

9.6.1.2.                                  STATING THE AMOUNT OF SUCH
INDEMNIFIABLE DAMAGES (WHICH, IN THE CASE OF INDEMNIFIABLE DAMAGES NOT YET
INCURRED, PAID, RESERVED OR ACCRUED, MAY BE THE AMOUNT REASONABLY ANTICIPATED BY
PURCHASER TO BE INCURRED, PAID, RESERVED OR ACCRUED); AND

 

9.6.1.3.            SPECIFYING IN REASONABLE DETAIL (BASED UPON THE INFORMATION
THEN POSSESSED BY PURCHASER) 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.

 

NO DELAY IN PROVIDING SUCH OFFICER’S CERTIFICATE WITHIN THE ESCROW PERIOD SHALL
AFFECT AN INDEMNIFIED PERSON’S RIGHTS HEREUNDER, UNLESS (AND THEN ONLY TO THE
EXTENT THAT) THE INDEMNIFYING PERSON IS MATERIALLY PREJUDICED THEREBY.

 

9.6.2.                                                         IN CASE OF AN
INDEMNIFICATION CLAIM PURSUANT TO SECTION 9.2, THEN, AS APPLICABLE:

 

9.6.2.1.            IF THE PURCHASER ELECTED TO EFFECT THE HOLDBACK: AT THE TIME
OF DELIVERY OF ANY OFFICER’S CERTIFICATE TO THE SELLERS REPRESENTATIVE BY OR ON
BEHALF OF PURCHASER (ON

 

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BEHALF OF ITSELF OR ANY OTHER INDEMNIFIED PERSON) AND FOR A PERIOD OF 20 DAYS
AFTER SUCH DELIVERY OF SUCH OFFICER’S CERTIFICATE, THE PURCHASER SHALL NOT BE
ENTITLED TO OFFSET AMOUNTS AGAINST THE ESCROW FUND UNLESS THE PURCHASER SHALL
HAVE RECEIVED WRITTEN AUTHORIZATION FROM THE SELLERS REPRESENTATIVE TO MAKE SUCH
OFFSET.  AFTER THE EXPIRATION OF SUCH 20-DAY PERIOD, THE PURCHASER SHALL BE
ENTITLED TO OFFSET AMOUNTS AGAINST THE ESCROW FUND; PROVIDED, HOWEVER, THAT NO
SUCH OFFSET MAY BE MADE IF AND TO THE EXTENT THE SELLERS REPRESENTATIVE SHALL IN
GOOD FAITH OBJECT IN A WRITTEN STATEMENT TO ANY CLAIM OR CLAIMS MADE IN THE
OFFICER’S CERTIFICATE, AND SUCH STATEMENT SHALL HAVE BEEN DELIVERED TO THE
PURCHASER PRIOR TO THE EXPIRATION OF SUCH 20-DAY PERIOD.

 

9.6.2.2.                          IF THE PURCHASER ELECTED TO EFFECT THE
INDEMNITY ESCROW: AT THE TIME OF DELIVERY OF ANY OFFICER’S CERTIFICATE TO THE
ESCROW AGENT, A DUPLICATE COPY OF SUCH OFFICER’S CERTIFICATE SHALL BE DELIVERED
TO THE SELLERS REPRESENTATIVE BY OR ON BEHALF OF PURCHASER (ON BEHALF OF ITSELF
OR ANY OTHER INDEMNIFIED PERSON) AND FOR A PERIOD OF 20 DAYS AFTER SUCH DELIVERY
TO THE ESCROW AGENT OF SUCH OFFICER’S CERTIFICATE, THE ESCROW AGENT SHALL MAKE
NO PAYMENT PURSUANT TO THIS SECTION 9.6.2.2 UNLESS THE ESCROW AGENT SHALL HAVE
RECEIVED WRITTEN AUTHORIZATION FROM THE SELLERS REPRESENTATIVE TO MAKE SUCH
DELIVERY.  AFTER THE EXPIRATION OF SUCH 20-DAY PERIOD, THE ESCROW AGENT SHALL
MAKE DELIVERY OF CASH FROM THE ESCROW FUND TO PURCHASER IN ACCORDANCE WITH THIS
SECTION 9.6; PROVIDED, HOWEVER, THAT NO SUCH DELIVERY MAY BE MADE IF AND TO THE
EXTENT THE SELLERS REPRESENTATIVE SHALL IN GOOD FAITH OBJECT IN A WRITTEN
STATEMENT TO ANY CLAIM OR CLAIMS MADE IN THE OFFICER’S CERTIFICATE, AND SUCH
STATEMENT SHALL HAVE BEEN DELIVERED TO THE ESCROW AGENT AND TO PURCHASER PRIOR
TO THE EXPIRATION OF SUCH 20-DAY PERIOD.

 

9.7.                              RESOLUTION OF OBJECTIONS TO CLAIMS.

 

9.7.1.                                                         IN CASE OF AN
INDEMNIFICATION CLAIM PURSUANT TO SECTION 9.2, IF THE SELLERS REPRESENTATIVE IN
GOOD FAITH OBJECTS IN WRITING TO ANY CLAIM OR CLAIMS BY PURCHASER MADE IN ANY
OFFICER’S CERTIFICATE WITHIN SUCH 20-DAY PERIOD, PURCHASER AND THE SELLERS
REPRESENTATIVE SHALL ATTEMPT IN GOOD FAITH FOR 20 DAYS AFTER PURCHASER’S RECEIPT
OF SUCH WRITTEN OBJECTION TO RESOLVE SUCH OBJECTION.  IF PURCHASER AND THE
SELLERS REPRESENTATIVE SHALL SO AGREE, A MEMORANDUM SETTING FORTH SUCH AGREEMENT
SHALL BE PREPARED AND SIGNED BY BOTH PARTIES, AND, IF THE PURCHASER ELECTED TO
EFFECT THE INDEMNITY ESCROW, SHALL ALSO BE DELIVERED TO THE ESCROW AGENT.  THE
PURCHASER AND, IF APPLICABLE, THE ESCROW AGENT, SHALL BE ENTITLED TO
CONCLUSIVELY RELY ON ANY SUCH MEMORANDUM AND OFFSET AMOUNTS AGAINST, OR
DISTRIBUTE CASH FROM, THE ESCROW FUND, AS THE CASE MAY BE, IN ACCORDANCE WITH
THE TERMS OF SUCH MEMORANDUM.

 

9.7.2.                                                         IN CASE OF AN
INDEMNIFICATION CLAIM PURSUANT TO SECTION 9.3, PURCHASER AND THE SELLERS
REPRESENTATIVE SHALL ATTEMPT IN GOOD FAITH FOR 20 DAYS AFTER PURCHASER’S RECEIPT
OF AN OFFICER’S CERTIFICATE TO RESOLVE SUCH OBJECTION.  IF PURCHASER AND THE
SELLERS REPRESENTATIVE SHALL SO AGREE, A MEMORANDUM SETTING FORTH SUCH AGREEMENT
SHALL BE PREPARED AND SIGNED BY BOTH PARTIES.

 

9.7.3.                                                         IF NO SUCH
AGREEMENT PURSUANT TO SECTIONS 9.7.1 OR 9.7.2, AS THE CASE MAY BE, CAN BE
REACHED DURING THE 20-DAY PERIOD FOR GOOD FAITH NEGOTIATION, BUT IN ANY EVENT
UPON THE EXPIRATION OF SUCH 20-DAY PERIOD, EITHER PURCHASER OR THE SELLERS
REPRESENTATIVE MAY REFER THE MATTER TO ARBITRATION IN ACCORDANCE WITH
SECTION 10.10 HEREOF TO RESOLVE THE MATTER. THE DECISION OF THE ARBITRATOR AS TO
THE VALIDITY AND AMOUNT OF ANY CLAIM IN SUCH OFFICER’S CERTIFICATE SHALL BE
NON-APPEALABLE, BINDING AND CONCLUSIVE UPON THE PARTIES TO THIS AGREEMENT AND
(IF APPLICABLE) THE ESCROW AGENT, AND PURCHASER OR THE ESCROW AGENT, AS THE CASE
MAY BE SHALL BE ENTITLED TO ACT IN ACCORDANCE WITH SUCH DECISION AND OFFSET OR
DISTRIBUTE CASH, AS THE CASE MAY BE, FROM THE ESCROW FUND IN ACCORDANCE
THEREWITH.

 

9.7.4.                                                         JUDGMENT UPON ANY
AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION.  FOR PURPOSES OF THIS SECTION 9.7.4, IN ANY SUIT HEREUNDER IN
WHICH ANY CLAIM OR THE AMOUNT THEREOF STATED IN THE OFFICER’S CERTIFICATE IS AT
ISSUE, THE INDEMNIFIED PERSON SHALL BE DEEMED

 

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TO BE THE NON-PREVAILING PARTY UNLESS THE ARBITRATION AWARDS THE INDEMNIFIED
PERSON MORE THAN ONE-HALF OF THE AMOUNT IN DISPUTE, IN WHICH CASE THE
INDEMNIFYING PERSON SHALL BE DEEMED TO BE THE NON-PREVAILING PARTY.  THE
NON-PREVAILING PARTY TO A SUIT SHALL PAY ITS OWN EXPENSES AND THE EXPENSES AND
THE FEES AND EXPENSES OF THE PREVAILING PARTY, INCLUDING ATTORNEYS’ FEES AND
COSTS, REASONABLY INCURRED IN CONNECTION WITH SUCH SUIT.

 

9.8.                              SELLERS REPRESENTATIVE.

 

9.8.1.                                                         BY VIRTUE OF
THEIR SIGNATURE ON THIS AGREEMENT, THE SELLERS HAVE APPOINTED THE SELLERS
REPRESENTATIVE AS THE AGENT AND ATTORNEY-IN-FACT FOR AND ON BEHALF OF THE
SELLERS TO: (I) GIVE AND RECEIVE NOTICES AND COMMUNICATIONS, AS AN INDEMNIFIED
PERSON OR AN INDEMNIFYING PERSON, TO OR FROM PURCHASER (ON BEHALF OF ITSELF OR
ANY OTHER INDEMNIFIED PERSON, OR AS AN INDEMNIFYING PERSON) RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS AND OTHER MATTERS CONTEMPLATED HEREBY OR
THEREBY (EXCEPT TO THE EXTENT THAT THIS AGREEMENT EXPRESSLY CONTEMPLATES THAT
ANY SUCH NOTICE OR COMMUNICATION SHALL BE GIVEN OR RECEIVED BY SUCH SELLER
INDIVIDUALLY); (II) AUTHORIZE DELIVERIES TO OR OFFSET BY PURCHASER OF CASH FROM
THE ESCROW FUND IN SATISFACTION OF CLAIMS ASSERTED BY PURCHASER (ON BEHALF OF
ITSELF OR ANY OTHER INDEMNIFIED PERSON, INCLUDING BY NOT OBJECTING TO SUCH
CLAIMS); (III) OBJECT TO CLAIMS MADE BY OR ON BEHALF OF AN INDEMNIFIED PERSON,
INCLUDING PURSUANT TO SECTION 9.6, OR MAKE CLAIMS AS OR ON BEHALF OF AN
INDEMNIFIED PERSON; (IV) CONSENT OR AGREE TO, NEGOTIATE, ENTER INTO SETTLEMENTS
AND COMPROMISES OF, AND COMPLY WITH ORDERS OF COURTS OR ARBITRATION AWARDS WITH
RESPECT TO, SUCH CLAIMS; (V) CONSENT OR AGREE TO ANY AMENDMENT TO THIS
AGREEMENT; AND (VI) TAKE ALL ACTIONS NECESSARY OR APPROPRIATE IN THE JUDGMENT OF
THE SELLERS REPRESENTATIVE FOR THE ACCOMPLISHMENT OF THE FOREGOING, IN EACH CASE
WITHOUT HAVING TO SEEK OR OBTAIN THE CONSENT OF ANY PERSON UNDER ANY
CIRCUMSTANCE.  THE PERSON SERVING AS THE SELLERS REPRESENTATIVE MAY BE REPLACED
FROM TIME TO TIME BY THE SELLERS UPON NOT LESS THAN TEN DAYS’ PRIOR WRITTEN
NOTICE TO PURCHASER.  THE SELLERS REPRESENTATIVE SHALL RECEIVE NO COMPENSATION
FOR ITS SERVICES.

 

9.8.2.                                                         THE SELLERS
REPRESENTATIVE SHALL NOT BE LIABLE TO ANY SELLER FOR ANY ACT DONE OR OMITTED
HEREUNDER AS THE SELLERS REPRESENTATIVE WHILE ACTING IN GOOD FAITH (AND ANY ACT
DONE OR OMITTED PURSUANT TO THE ADVICE OF COUNSEL SHALL BE CONCLUSIVE EVIDENCE
OF SUCH GOOD FAITH) AND WITHOUT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  THE
SELLERS SHALL SEVERALLY INDEMNIFY THE SELLERS REPRESENTATIVE AND HOLD THE
SELLERS REPRESENTATIVE HARMLESS AGAINST ANY LOSS, LIABILITY OR EXPENSE INCURRED
WITHOUT GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH ON THE PART OF THE
SELLERS REPRESENTATIVE AND ARISING OUT OF OR IN CONNECTION WITH THE ACCEPTANCE
OR ADMINISTRATION OF THE DUTIES OF THE SELLERS REPRESENTATIVE HEREUNDER,
INCLUDING ANY OUT-OF-POCKET COSTS AND EXPENSES AND LEGAL FEES AND OTHER LEGAL
COSTS REASONABLY INCURRED BY THE SELLERS REPRESENTATIVE.  IF NOT PAID DIRECTLY
TO THE SELLERS REPRESENTATIVE BY THE SELLERS, SUCH LOSSES, LIABILITIES OR
EXPENSES MAY BE RECOVERED BY THE SELLERS REPRESENTATIVE FROM ESCROW FUND
OTHERWISE DISTRIBUTABLE TO THE SELLERS (AND NOT DISTRIBUTED OR DISTRIBUTABLE TO
AN INDEMNIFIED PERSON OR SUBJECT TO A PENDING INDEMNIFICATION CLAIM OF AN
INDEMNIFIED PERSON) AT THE END OF THE ESCROW PERIOD (IN CASE OF INDEMNITY
ESCROW) OR THE HOLDBACK RELEASE DATE (IN CASE OF HOLDBACK) PURSUANT TO THE TERMS
HEREOF, AT THE TIME OF DISTRIBUTION, AND SUCH RECOVERY WILL BE MADE FROM THE
SELLERS ACCORDING TO THEIR RESPECTIVE PRO RATA SHARE OF THE PURCHASE PRICE.

 

9.8.3.                                                         ANY NOTICE OR
COMMUNICATION GIVEN OR RECEIVED BY, AND ANY DECISION, ACTION, FAILURE TO ACT
WITHIN A DESIGNATED PERIOD OF TIME, AGREEMENT, CONSENT, SETTLEMENT, RESOLUTION
OR INSTRUCTION OF, THE SELLERS REPRESENTATIVE THAT IS WITHIN THE SCOPE OF THE
SELLERS REPRESENTATIVE’S AUTHORITY UNDER SECTION 9.8.1 SHALL CONSTITUTE A NOTICE
OR COMMUNICATION TO OR BY, OR A DECISION, ACTION, FAILURE TO ACT WITHIN A
DESIGNATED PERIOD OF TIME, AGREEMENT, CONSENT, SETTLEMENT, RESOLUTION OR
INSTRUCTION OF ALL THE SELLERS AND SHALL BE FINAL, BINDING AND CONCLUSIVE UPON
EACH SUCH SELLERS; AND EACH INDEMNIFIED PERSON SHALL BE ENTITLED TO RELY UPON
ANY SUCH NOTICE, COMMUNICATION, DECISION, ACTION, FAILURE TO ACT WITHIN A
DESIGNATED PERIOD OF TIME, AGREEMENT, CONSENT, SETTLEMENT, RESOLUTION OR
INSTRUCTION AS BEING A NOTICE OR COMMUNICATION TO OR BY, OR A DECISION, ACTION,
FAILURE TO ACT WITHIN A DESIGNATED PERIOD OF TIME, AGREEMENT,

 

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CONSENT, SETTLEMENT, RESOLUTION OR INSTRUCTION OF, EACH AND EVERY SUCH SELLER.

 

9.9.                              THIRD-PARTY CLAIMS.  IN THE EVENT AN
INDEMNIFIED PERSON BECOMES AWARE OF A THIRD-PARTY CLAIM THAT IT BELIEVES MAY
RESULT IN AN INDEMNIFICATION OR OFFSET CLAIM AGAINST THE ESCROW FUND OR THE
INDEMNIFYING PERSON BY OR ON BEHALF OF AN INDEMNIFIED PERSON, THE INDEMNIFIED
PERSON SHALL PROMPTLY NOTIFY THE INDEMNIFYING PERSON IN WRITING AND IN
REASONABLE DETAIL OF SUCH THIRD-PARTY CLAIM, PROVIDED HOWEVER THAT NO DELAY IN
PROVIDING SUCH NOTICE SHALL AFFECT AN INDEMNIFIED PERSON’S RIGHTS HEREUNDER,
UNLESS (AND THEN ONLY TO THE EXTENT THAT) THE INDEMNIFYING PERSON  IS MATERIALLY
PREJUDICED THEREBY.  THE INDEMNIFYING PERSON SHALL HAVE THE RIGHT IN ITS SOLE
DISCRETION TO CONDUCT THE DEFENSE OF AND TO SETTLE OR RESOLVE ANY SUCH CLAIM
(AND THE COSTS AND EXPENSES INCURRED BY IT IN CONNECTION WITH SUCH DEFENSE,
SETTLEMENT OR RESOLUTION (INCLUDING REASONABLE ATTORNEYS’ FEES, OTHER
PROFESSIONALS’ AND EXPERTS’ FEES AND COURT OR ARBITRATION COSTS) SHALL BE
INCLUDED IN THE INDEMNIFIABLE DAMAGES FOR WHICH THE INDEMNIFYING PERSON MAY SEEK
INDEMNIFICATION PURSUANT TO A CLAIM MADE HEREUNDER).  THE SELLERS REPRESENTATIVE
OR PURCHASER, AS THE CASE MAY BE, SHALL HAVE THE RIGHT TO RECEIVE COPIES OF ALL
PLEADINGS, NOTICES AND COMMUNICATIONS WITH RESPECT TO THE THIRD-PARTY CLAIM TO
THE EXTENT THAT RECEIPT OF SUCH DOCUMENTS DOES NOT AFFECT ANY PRIVILEGE RELATING
TO ANY INDEMNIFIED PERSON AND SHALL BE ENTITLED, AT ITS EXPENSE, TO PARTICIPATE
IN, BUT NOT TO DETERMINE OR CONDUCT, ANY DEFENSE OF THE THIRD-PARTY CLAIM OR
SETTLEMENT NEGOTIATIONS WITH RESPECT TO THE THIRD-PARTY CLAIM.  HOWEVER, EXCEPT
WITH THE CONSENT OF THE SELLERS REPRESENTATIVE OR PURCHASER, AS THE CASE MAY BE
(WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED AND
WHICH SHALL BE DEEMED TO HAVE BEEN GIVEN UNLESS THE SELLERS REPRESENTATIVE OR
PURCHASER, AS THE CASE MAY BE, SHALL HAVE OBJECTED WITHIN 15 DAYS AFTER A
WRITTEN REQUEST FOR SUCH CONSENT BY PURCHASER OR SELLERS REPRESENTATIVE, AS THE
CASE MAY BE), NO SETTLEMENT OR RESOLUTION OF ANY SUCH CLAIM WITH ANY THIRD-PARTY
CLAIMANT SHALL BE DETERMINATIVE OF THE EXISTENCE OF OR AMOUNT OF INDEMNIFIABLE
DAMAGES RELATING TO SUCH MATTER.  IN THE EVENT THAT THE SELLERS REPRESENTATIVE
HAS CONSENTED TO ANY SUCH SETTLEMENT OR RESOLUTION, NEITHER THE SELLERS
REPRESENTATIVE NOR ANY SELLER SHALL HAVE ANY POWER OR AUTHORITY TO OBJECT
(INCLUDING PURSUANT TO SECTION 9.6 OR ANY OTHER PROVISION OF THIS SECTION 9) TO
THE AMOUNT OF ANY CLAIM BY OR ON BEHALF OF ANY INDEMNIFIED PERSON AGAINST THE
ESCROW FUND FOR INDEMNITY WITH RESPECT TO SUCH SETTLEMENT OR RESOLUTION.

 

9.10.                        SELLERS CLAIMS AGAINST THE COMPANY.  IF CLOSING
OCCURS, THE SELLERS AGREE THAT THEY WILL NOT SEEK, NOR WILL THEY BE ENTITLED TO,
CONTRIBUTION FROM, OR INDEMNIFICATION BY, THE COMPANY, UNDER ITS CHARTER
DOCUMENT, THIS AGREEMENT, APPLICABLE CORPORATE LAWS OR OTHER LAWS OR OTHERWISE,
WHETHER IN RESPECT OF AMOUNTS DUE FROM THE SELLERS TO THE PURCHASER UNDER THIS
SECTION 9 OR OTHERWISE UNDER THIS AGREEMENT, OR FOR ANY OTHER REASON, AND THE
SELLERS WILL HOLD THE COMPANY, PURCHASER AND OR ANY INDEMNIFIED PERSON HARMLESS
IN RESPECT OF ALL SUCH AMOUNTS AND SHALL NOT SEEK TO JOIN THE COMPANY IN
CONNECTION WITH ANY SUIT ARISING UNDER THIS AGREEMENT OR ARISING IN CONNECTION
WITH THEIR SERVICE AS A MANGERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF THE
COMPANY PRIOR TO THE CLOSING DATE.  WITHOUT LIMITING THE FOREGOING, THE SELLERS,
AS MEMBERS OF THE COMPANY, SHALL NOT DEMAND NOR SHALL ANY OF THEM BE ENTITLED TO
RECEIVE A RETURN OF ITS CONTRIBUTION TO THE COMPANY, AND ANY SUCH DEMAND OR
RIGHT SHALL BE DEEMED SATISFIED IN FULL AND WAIVED BY THE PAYMENT OF THE
PURCHASE PRICE IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT.  THE SELLERS
ALSO AGREES THAT THEY WILL NOT MAKE CLAIM AGAINST ANY DIRECTORS AND OFFICERS
INSURANCE POLICY MAINTAINED OR TO BE MAINTAINED BY THE COMPANY IN RESPECT OF
AMOUNTS DUE BY THE SELLERS TO THE PURCHASER OR ANY INDEMNIFIED PERSON UNDER THIS
SECTION 9, THIS AGREEMENT OR OTHERWISE, IF THE CARRIER OF SUCH INSURANCE POLICY
WOULD HAVE ANY RIGHT OF SUBROGATION AGAINST THE COMPANY IN RESPECT OF SUCH CLAIM
AND SHALL INDEMNIFY AND HOLD HARMLESS THE PURCHASER FROM ANY SUCH ACTION.  THE
PROVISIONS OF THIS SECTION 9.10 SHALL NOT BE DEEMED A WAIVER BY ANY OF THE
SELLERS FOR ANY INDEMNIFICATION OR OTHER RIGHTS ANY OF THEM MAY HAVE BY REASON
OF THEIR EMPLOYMENT BY, OR SERVICES TO, THE COMPANY (OR ANY SUCCESSOR THERETO)
FOLLOWING CLOSING.

 

9.11.                        APPORTIONMENT.  IN THE CASE OF ANY TAXES THAT ARE
PAYABLE FOR A TAXABLE PERIOD THAT INCLUDES (BUT DOES NOT END ON) THE CLOSING
DATE, THE PORTION OF SUCH TAXES THAT RELATES TO THE PORTION OF

 

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SUCH TAXABLE PERIOD ENDING ON THE CLOSING DATE SHALL (A) IN THE CASE OF ANY REAL
PROPERTY, PERSONAL PROPERTY OR OTHER AD VALOREM TAXES BE DEEMED TO BE THE AMOUNT
OF SUCH TAX FOR THE ENTIRE TAXABLE PERIOD MULTIPLIED BY A FRACTION, THE
NUMERATOR OF WHICH IS THE NUMBER OF DAYS IN THE TAXABLE PERIOD ENDING ON THE
CLOSING DATE AND THE DENOMINATOR OF WHICH IS THE NUMBER OF DAYS IN THE ENTIRE
TAXABLE PERIOD, AND (B) IN THE CASE OF ANY OTHER TAX BE DEEMED EQUAL TO THE
AMOUNT THAT WOULD BE PAYABLE IF THE RELEVANT TAXABLE PERIOD ENDED ON THE CLOSING
DATE BASED ON A CLOSING OF THE BOOKS AS OF THE CLOSE OF BUSINESS ON THE CLOSING
DATE.

 

10.                                GENERAL PROVISIONS.

 

10.1.                        SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS.  IF THE CLOSING OCCURS, THE REPRESENTATIONS AND WARRANTIES OF THE
SELLERS AND THE COMPANY CONTAINED IN THIS AGREEMENT, THE DISCLOSURE SCHEDULE
(INCLUDING ANY EXHIBIT OR SCHEDULE TO THE DISCLOSURE SCHEDULE), AND THE OTHER
CERTIFICATES CONTEMPLATED HEREBY SHALL SURVIVE THE CLOSING AND REMAIN IN FULL
FORCE AND EFFECT, REGARDLESS OF ANY INVESTIGATION OR DISCLOSURE MADE BY OR ON
BEHALF OF ANY OF THE PARTIES TO THIS AGREEMENT, UNTIL THE END OF THE ESCROW
PERIOD; PROVIDED, HOWEVER, THAT (I) THE REPRESENTATIONS AND WARRANTIES OF THE
COMPANY CONTAINED IN SECTION 3.3 (CAPITAL STRUCTURE), SECTION 3.4 (TITLE TO
INTEREST), 3.5 (AUTHORITY; NON-CONTRAVENTION), SECTION 3.12 (INTELLECTUAL
PROPERTY AND INTERNET PRACTICES)  OR SECTION 3.14 (TAX MATTERS) WILL REMAIN
OPERATIVE AND IN FULL FORCE AND EFFECT, REGARDLESS OF ANY INVESTIGATION OR
DISCLOSURE MADE BY OR ON BEHALF OF ANY OF THE PARTIES TO THIS AGREEMENT, UNTIL
THE DATE THAT IS 30 DAYS AFTER THE EXPIRATION OF THE APPLICABLE STATUTE OF
LIMITATIONS FOR CLAIMS AGAINST THE SELLERS, WHICH SEEK RECOVERY OF INDEMNIFIABLE
DAMAGES ARISING OUT OF AN INACCURACY OR BREACH OF SUCH REPRESENTATIONS OR
WARRANTIES, AND THEN EXPIRE WITH RESPECT TO ANY THERETOFORE UNASSERTED CLAIMS
ARISING OUT OF OR OTHERWISE IN RESPECT OF ANY BREACH OF SUCH REPRESENTATIONS AND
WARRANTIES; (II) NO RIGHT TO INDEMNIFICATION PURSUANT TO SECTION 9 IN RESPECT OF
ANY CLAIM THAT IS SET FORTH IN AN OFFICER’S CERTIFICATE DELIVERED TO THE ESCROW
AGENT (IN CASE OF HOLDBACK) OR SELLERS REPRESENTATIVE (IN CASE OF INDEMNITY
ESCROW), AS THE CASE MAY BE, PRIOR TO THE EXPIRATION OF THE ESCROW PERIOD SHALL
BE AFFECTED BY THE EXPIRATION OF SUCH REPRESENTATIONS AND WARRANTIES; AND
(III) SUCH EXPIRATION SHALL NOT AFFECT THE RIGHTS OF ANY INDEMNIFIED PERSON
UNDER SECTION 9 OR OTHERWISE TO SEEK RECOVERY OF INDEMNIFIABLE DAMAGES ARISING
OUT OF ANY FRAUD, WILLFUL BREACH OR INTENTIONAL MISREPRESENTATION BY THE COMPANY
OR ANY SUBSIDIARY UNTIL THE DATE THAT IS 30 DAYS AFTER THE EXPIRATION OF THE
APPLICABLE STATUTE OF LIMITATIONS.  IF THE CLOSING OCCURS, THE REPRESENTATIONS,
WARRANTIES AND CONVENTS OF PURCHASER CONTAINED IN THIS AGREEMENT AND THE OTHER
CERTIFICATES CONTEMPLATED HEREBY SHALL EXPIRE AND BE OF NO FURTHER FORCE OR
EFFECT AS OF THE CLOSING.  IF THE CLOSING OCCURS, ALL COVENANTS OF THE PARTIES
SHALL EXPIRE AND BE OF NO FURTHER FORCE OR EFFECT AS OF THE CLOSING, EXCEPT TO
THE EXTENT SUCH COVENANTS PROVIDE THAT THEY ARE TO SURVIVE OR BE PERFORMED AFTER
THE CLOSING; PROVIDED, HOWEVER, THAT NO RIGHT TO INDEMNIFICATION PURSUANT TO
SECTION 9 IN RESPECT OF ANY CLAIM BASED UPON ANY BREACH OF A COVENANT SHALL BE
AFFECTED BY THE EXPIRATION OF SUCH COVENANT.

 

10.2.                        NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS
HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN IF AS FOLLOWS: (A) IF
SENT BY REGISTERED OR CERTIFIED MAIL RETURN RECEIPT REQUESTED, UPON RECEIPT;
(B) IF SENT DESIGNATED FOR OVERNIGHT DELIVERY BY NATIONALLY RECOGNIZED OVERNIGHT
AIR COURIER (SUCH AS DHL OR FEDERAL EXPRESS), THREE BUSINESS DAYS AFTER DELIVERY
TO SUCH COURIER; (C) IF SENT BY FACSIMILE TRANSMISSION ON A BUSINESS DAY BEFORE
5:00 P.M. IN TIME ZONE OF THE RECIPIENT, WHEN TRANSMITTED AND FULL RECEIPT IS
ELECTRONICALLY CONFIRMED; (D) IF SENT BY FACSIMILE TRANSMISSION ON A BUSINESS
DAY AFTER 5:00 P.M. IN THE TIME ZONE OF THE RECIPIENT OR ON A NON-BUSINESS DAY
AND FULL RECEIPT IS ELECTRONICALLY CONFIRMED, ON THE FOLLOWING BUSINESS DAY; AND
(E) IF OTHERWISE ACTUALLY PERSONALLY DELIVERED, WHEN DELIVERED, PROVIDED THAT
SUCH NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS ARE DELIVERED TO THE
ADDRESS SET FORTH BELOW, OR TO SUCH OTHER ADDRESS AS ANY PARTY SHALL PROVIDE BY
LIKE NOTICE TO THE OTHER PARTIES TO THIS AGREEMENT:

 

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If to Purchaser, to:                                              Answers
Corporation

237 West 35th Street

Suite 1101

New York, NY 10001

Attention:  Robert S. Rosenschein, Chief Executive Officer
Facsimile No.:  646-502-4778
Telephone No.:  646-502-4777

 

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

 

Meitar, Liquornik, Geva & Leshem, Brandwein — Law Offices

16 Abba Hillel Silver Rd.

Ramat Gan 52506, Israel

Attention: Clifford Felig and David Glatt

Facsimile: +972-3-610-3111

If to the Sellers

or the Company (prior to Closing), to:

 

Daniel Fierro

312 E. Mandalay Drive

Olmos Park TX 78212

Telephone No.:  (210) 826-1939

 

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

 

DLA Piper US LLP
1251 Avenue of the Americas
New York, New York 10020-1104

Attention:  James E. Nelson

Facsimile No.:  (212) 884-8731

Telephone No.:  (212) 335-4631

 

and

 

Brian Kariger

3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.:  (562) 439-4301

Telephone No.: (310) 738-3777

 

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

 

Eric Adler, Magee & Adler, APC

400 Oceangate, Suite 1030

Long Beach, CA 90803

Attention:  Eric R. Adler, Esq.
Facsimile No.:  562-432-1060
Telephone No.:  562-432-1154

 

If to the Sellers Representative, to:

 

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

 

Brian Kariger

3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.:  (562) 439-4301

Telephone No.: (310) 738-3777

 

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

 

Eric Adler, Magee & Adler, APC

400 Oceangate, Suite 1030

Long Beach, CA 90803

Attention:  Eric R. Adler, Esq.
Facsimile No.:  562-432-1060
Telephone No.:  562-432-1154

 

10.3.                        INTERPRETATION.  WHEN A REFERENCE IS MADE IN THIS
AGREEMENT TO SECTIONS, SCHEDULES OR EXHIBITS, SUCH REFERENCE SHALL BE TO A
SECTION OF, SCHEDULE OR AN EXHIBIT TO THIS AGREEMENT UNLESS OTHERWISE
INDICATED.  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”. 
THE PHRASES “PROVIDED TO,” “FURNISHED TO,” OR “MADE AVAILABLE” AND PHRASES OF
SIMILAR IMPORT WHEN USED HEREIN, UNLESS THE CONTEXT OTHERWISE REQUIRES, SHALL
MEAN THAT A TRUE, CORRECT AND COMPLETE PAPER OR ELECTRONIC COPY OF THE
INFORMATION OR MATERIAL REFERRED TO HAS BEEN PROVIDED TO THE PARTY OR ITS
COUNSEL TO WHOM SUCH INFORMATION OR MATERIAL IS TO BE PROVIDED, AND IN CASE SUCH
INFORMATION OR MATERIAL WAS MADE AVAILABLE ELECTRONICALLY BY POSTING IT ON THE
COMPANY’S VIRTUAL DATA ROOM (PROVIDED IT WAS (I) POSTED UNDER THE RELEVANT
SECTION OF THE DUE DILIGENCE REQUEST LIST CALLING FOR SUCH DISCLOSURE AND WAS
INDICATED IN THE COMPANY’S WRITTEN RESPONSE TO SUCH LIST, OR (II) WAS REQUESTED
BY PURCHASER OR WAS POSTED IN SUCH VIRTUAL DATA ROOM PURSUANT TO A REQUEST FROM
PURCHASER).  UNLESS THE CONTEXT OF THIS AGREEMENT OTHERWISE REQUIRES: (I) WORDS
OF ANY GENDER INCLUDE EACH OTHER GENDER; (II) WORDS USING THE SINGULAR OR PLURAL
NUMBER ALSO INCLUDE THE PLURAL OR SINGULAR NUMBER, RESPECTIVELY; (III) THE TERMS
“HEREOF,” “HEREIN,” “HEREUNDER” AND DERIVATIVE OR SIMILAR WORDS REFER TO THIS
ENTIRE AGREEMENT; (IV) ALL REFERENCES TO “$” SHALL BE DENOMINATED IN U.S.
DOLLARS; AND (V) UNLESS INDICATED OTHERWISE, ALL MATHEMATICAL CALCULATIONS
CONTEMPLATED HEREBY SHALL BE ROUNDED TO THE HUNDREDTH DECIMAL PLACE.

 

10.4.                        ENTIRE AGREEMENT; PARTIES IN INTEREST.  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 HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS,
BOTH WRITTEN AND ORAL, AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF (INCLUDING, THE ORIGINAL PURCHASE AGREEMENT, WHICH SHALL BE
AMENDED AND RESTATED IN ITS ENTIRETY BY THIS AGREEMENT), BUT EXCEPT FOR THE
CONFIDENTIALITY AGREEMENT, WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT, AND
SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT, IN ACCORDANCE WITH ITS TERMS,
AND (B) ARE NOT INTENDED TO CONFER, AND SHALL NOT BE CONSTRUED AS CONFERRING,
UPON ANY PERSON OTHER THAN THE PARTIES HERETO ANY RIGHTS OR REMEDIES HEREUNDER
(EXCEPT THAT SECTION 9 IS INTENDED TO BENEFIT INDEMNIFIED PERSONS).

 

10.5.                        AMENDMENT.  ANY TERM OF THIS AGREEMENT MAY BE
AMENDED AND THE OBSERVANCE OF ANY TERM OF THIS AGREEMENT MAY BE WAIVED (EITHER
GENERALLY OR IN A PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR PROSPECTIVELY)
WITH THE WRITTEN CONSENT OF PURCHASER AND THE SELLERS REPRESENTATIVE. ANY
AMENDMENT OR WAIVER EFFECTED IN ACCORDANCE WITH THIS SECTION SHALL BE BINDING
UPON ALL PARTIES OF THIS AGREEMENT AND

 

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

 

THEIR RESPECTIVE SUCCESSORS AND ASSIGNEES.

 

10.6.                        EXTENSION; WAIVER.  ANY PARTY HERETO MAY (A) EXTEND
THE TIME FOR THE PERFORMANCE OF ANY OF THE OBLIGATIONS OR OTHER ACTS OF THE
OTHER PARTIES HERETO, (B) WAIVE ANY INACCURACIES IN THE REPRESENTATIONS AND
WARRANTIES MADE TO SUCH PARTY CONTAINED HEREIN OR IN ANY DOCUMENT DELIVERED
PURSUANT HERETO, AND (C) WAIVE COMPLIANCE WITH ANY OF THE AGREEMENTS OR
CONDITIONS FOR THE BENEFIT OF SUCH PARTY CONTAINED HEREIN.  THE SELLERS
REPRESENTATIVE AND PURCHASER MAY, (I) EXTEND THE TIME FOR THE PERFORMANCE OF ANY
OF THE OBLIGATIONS OR OTHER ACTS OF THE OTHER, (II) WAIVE ANY INACCURACIES IN
THE REPRESENTATIONS AND WARRANTIES MADE TO SUCH PARTY CONTAINED HEREIN OR IN ANY
DOCUMENT DELIVERED PURSUANT HERETO, AND (III) WAIVE COMPLIANCE WITH ANY OF THE
AGREEMENTS OR CONDITIONS FOR THE BENEFIT OF SUCH PERSON CONTAINED HEREIN.  ANY
WAIVER EFFECTED IN ACCORDANCE WITH THE PRECEDING SENTENCE SHALL BE BINDING UPON
ALL PARTIES OF THIS AGREEMENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNEES. ANY
AGREEMENT ON THE PART OF A PARTY HERETO TO ANY SUCH EXTENSION OR WAIVER SHALL BE
VALID ONLY IF SET FORTH IN AN INSTRUMENT IN WRITING.  WITHOUT LIMITING THE
GENERALITY OR EFFECT OF THE PRECEDING SENTENCE, NO DELAY IN EXERCISING ANY RIGHT
UNDER THIS AGREEMENT SHALL CONSTITUTE A WAIVER OF SUCH RIGHT, AND NO WAIVER OF
ANY BREACH OR DEFAULT SHALL BE DEEMED A WAIVER OF ANY OTHER BREACH OR DEFAULT OF
THE SAME OR ANY OTHER PROVISION IN THIS AGREEMENT.

 

10.7.                        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 HERETO WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTIES HERETO,
AND ANY SUCH ASSIGNMENT WITHOUT SUCH PRIOR WRITTEN CONSENT SHALL BE NULL AND
VOID, EXCEPT THAT PURCHASER MAY ASSIGN THIS AGREEMENT TO ANY OF PURCHASER’S
AFFILIATES WITHOUT THE PRIOR CONSENT OF THE SELLERS OR THE COMPANY; PROVIDED,
HOWEVER, THAT PURCHASER SHALL REMAIN LIABLE FOR ALL OF ITS OBLIGATIONS UNDER
THIS AGREEMENT.  SUBJECT TO THE PRECEDING SENTENCE, THIS AGREEMENT SHALL BE
BINDING UPON, INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE PARTIES HERETO
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

 

10.8.                        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 TO EFFECT THE INTENT OF THE PARTIES HERETO.  THE PARTIES HERETO
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.

 

10.9.                        REMEDIES CUMULATIVE.  EXCEPT AS OTHERWISE PROVIDED
HEREIN, ANY AND ALL REMEDIES HEREIN EXPRESSLY CONFERRED UPON A PARTY HERETO
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 HERETO
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.

 

10.10.                  GOVERNING LAW; ARBITRATION; JURISDICTION.

 

10.10.1.         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO SUCH STATE’S
PRINCIPLES OF CONFLICTS OF LAW, PROVIDED, HOWEVER, THAT ANY MATTER INVOLVING THE
INTERNAL CORPORATE AFFAIRS OF THE ANY PARTY HERETO SHALL BE GOVERNED BY THE
PROVISIONS OF THE JURISDICTIONS OF ITS INCORPORATION.

 

10.10.2.         ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE BREACH OR TERMINATION THEREOF,
SHALL BE SETTLED BY ARBITRATION BY A SINGLE ARBITRATOR ADMINISTERED BY THE
AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE WITH ITS COMMERCIAL ARBITRATION
RULES, INCLUDING THE OPTIONAL RULES FOR EMERGENCY MEASURES OF PROTECTION, TO BE
HELD IN NEW

 

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

 

YORK, NEW YORK, USA. THE AWARD RENDERED BY THE ARBITRATOR SHALL BE FINAL AND
BINDING UPON THE PARTIES. JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR MAY
BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE EXISTENCE AND
RESOLUTION OF THE ARBITRATION SHALL BE KEPT CONFIDENTIAL BY THE PARTIES AND BY
THE ARBITRATOR. THE AWARD OF THE ARBITRATOR SHALL BE ACCOMPANIED BY A REASONED
OPINION. EACH PARTY SHALL BEAR ITS OWN COSTS AND EXPENSES AND AN EQUAL SHARE OF
THE ARBITRATOR’S AND ADMINISTRATIVE FEES OF ARBITRATION, UNLESS OTHERWISE
DETERMINED BY THE ARBITRATOR. NOTWITHSTANDING THE FOREGOING, THE PARTIES MAY
APPLY TO ANY COURT OF COMPETENT JURISDICTION FOR A TEMPORARY RESTRAINING ORDER,
PRELIMINARY INJUNCTION, OR OTHER INTERIM OR CONSERVATORY RELIEF, AS NECESSARY.

 

10.10.3.         SUBJECT TO SECTION 10.10.2, THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION (OR, IN THE CASE OF ENFORCEMENT
OF OR SEEKING REMEDIES WITH RESPECT TO SECTION 6.4, NON-EXCLUSIVE JURISDICTION)
OF THE COURTS OF THE NEW YORK, NEW YORK IN CONNECTION WITH ANY MATTER BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREIN (INCLUDING
RESOLUTION OF DISPUTES UNDER SECTION 9.7), AGREES THAT PROCESS MAY BE SERVED
UPON THEM IN ANY MANNER AUTHORIZED BY THE LAWS OF SUCH JURISDICTION FOR SUCH
PERSONS AND WAIVES AND COVENANTS NOT TO ASSERT OR PLEAD ANY OBJECTION WHICH THEY
MIGHT OTHERWISE HAVE TO SUCH JURISDICTION, VENUE AND SUCH PROCESS.

 

10.11.                  COOPERATION.  THE PARTIES AGREES TO COOPERATE FULLY WITH
EACH OTHER AND TO EXECUTE AND DELIVER SUCH FURTHER DOCUMENTS, CERTIFICATES,
AGREEMENTS AND INSTRUMENTS AND TO TAKE SUCH OTHER ACTIONS AS MAY BE REASONABLY
REQUESTED BY A PARTY TO EVIDENCE OR REFLECT THE TRANSACTIONS CONTEMPLATED HEREBY
AND TO CARRY OUT THE INTENT AND PURPOSES OF THIS AGREEMENT.

 

10.12.                  RULES OF CONSTRUCTION.  THE PARTIES HERETO 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 THE PARTY DRAFTING SUCH
AGREEMENT OR DOCUMENT.

 

10.13.                  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND 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 HERETO IN NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

10.14.                  COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ONE OR
MORE COUNTERPARTS, 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 HERETO AND DELIVERED TO THE OTHER PARTIES HERETO; IT BEING
UNDERSTOOD THAT ALL PARTIES HERETO NEED NOT SIGN THE SAME COUNTERPART. THE
EXCHANGE OF A FULLY EXECUTED AGREEMENT (IN COUNTERPARTS OR OTHERWISE) BY
FACSIMILE OR BY ELECTRONIC DELIVERY IN .PDF FORMAT SHALL BE SUFFICIENT TO BIND
THE PARTIES TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, AS AN ORIGINAL.

 

 - SIGNATURE PAGES FOLLOW -

 

 

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

 

 

IN WITNESS WHEREOF, the parties have caused this AMENDED AND RESTATED PURCHASE
AGREEMENT to be executed and delivered by their respective officers thereunto
duly authorized, all as of the date first written above.

 

 

 

Answers Corporation

 

 

 

By:

/s/ Robert S. Rosenschein

 

 

 

 

Name:

Robert Rosenschein

 

 

 

 

Title:

CEO

 

 

 

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

 

 

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

 

 

BRIAN KARIGER, AS TRUSTEE OF THE BRIAN PATRICK KARIGER CHARITABLE REMAINDER
UNITRUST TRUST DATED APRIL 9, 2007

 

 

 

 

 

/s/ Brian Kariger

 

 

 

 

 

 

 

 

 

BRIAN KARIGER AS TRUSTEE OF THE BRIAN PATRICK KARIGER REVOCABLE TRUST DATED
FEBRUARY 9, 2007

 

 

 

 

 

/s/ Brian Kariger

 

 

 

 

 

 

 

 

 

DANIEL FIERRO

 

 

 

 

 

/s/ Daniel Fierro

 

 

 

 

 

 

 

 

 

LEXICO PUBLISHING GROUP, LLC

 

 

 

 

 

By:

/s/ Brian Kariger

 

Name:

Brian Kariger and Daniel Fierro

 

Title:

Authorized Signatories and Members

 

 

 

 

 

 

 

 

 

BRIAN KARIGER, AS SELLERS REPRESENTATIVE

 

 

 

 

 

/s/ Brian Kariger

 

 

 

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List of Exhibits

 

Exhibit A

 

-

 

Certain Definitions

Exhibit B

 

-

 

Form of Indemnity Escrow Agreement

Exhibit C

 

-

 

Form of Bonus Plan/Documents Escrow Agreement

Exhibit D

 

-

 

Form of Legal Opinion of Counsel to the Company

Exhibit E

 

-

 

Form of Pledge and Security Agreement

Exhibit F

 

-

 

Form of Subordination Agreement

 

 

List of Schedules

 

Schedule A

 

-

 

List of Sellers and Interests

Schedule 1.2.2

 

-

 

Estimated Closing Adjustments Certificate

Schedule 2.2.1.1

 

-

 

Certificate of Sellers

Schedule 2.2.1.2

 

-

 

Transaction Expenses Certificate

Schedule  7.3.5

 

-

 

List of Employees

 

 

Disclosure Schedule

 

 

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Schedule A

 

List of Sellers and Interests

 

Seller’s Name

 

% of Membership Interest

 

 

 

Brian Kariger as trustee of the Brian Patrick Kariger Charitable Remainder
Unitrust Trust dated April 9, 2007

 

5%

 

 

 

Brian Kariger as trustee of the Brian Patrick Kariger Revocable Trust dated
February 9, 2007

 

70%

 

 

 

Daniel Fierro

 

25%

 

 

 

 

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

 

 

Exhibit A

 

Certain Definitions

 

For purposes of the Agreement (including this Exhibit A):

 

1.     Defined Terms. As used herein, the following terms have the following
meanings:

 

        1.1.          “Acquisition Proposal” shall mean, with respect to the
Company or any of its Subsidiaries, any agreement, offer, proposal or bona fide
indication of interest (other than this Agreement or any other offer, proposal
or indication of interest by Purchaser), or any public announcement of intention
to enter into any such agreement or of (or intention to make) any offer,
proposal or bona fide indication of interest, relating to, or involving: (i) any
acquisition or purchase from the Company or any of its Subsidiaries, or from the
Member of the Company, by any Person or Group of more than a 10% interest in the
total Membership Interest, outstanding voting interest or Economic Interest of
Company or any of its Subsidiaries or any tender offer or exchange offer that if
consummated would result in any Person or Group beneficially owning 10% or more
of the total Membership Interest, outstanding voting interest or Economic
Interest of the Company or any of its Subsidiaries, or any merger,
consolidation, business combination or similar transaction involving the Company
or any of its Subsidiaries; (ii) any sale, lease, mortgage, pledge, exchange,
transfer, license (other than in the ordinary course of business), acquisition,
or disposition of more than 10% of the assets of the Company and its
Subsidiaries in any single transaction or series of related transactions; or (C)
any liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company or any of its Subsidiaries, or any extraordinary
dividend, whether of cash or other property.

 

        1.2.          “Affiliate” has the meaning set forth in Rule 145
promulgated under the US Securities Act.

 

        1.3.          “Antitrust Laws” means the HSR Act and applicable foreign
competition, antitrust or investment or trade regulatory Legal Requirements.

 

        1.4.          “Bonus Plan/Documents Escrow Agreement” means an Escrow
Agreement, substantially in the form attached hereto as Exhibit C, entered into
as of the date of signing the Original Purchase Agreement by and among
Purchaser, the Escrow Agent, the Company, the Sellers and the Sellers
Representative, in respect of the Employee Bonus Amount and the instruments
evidencing the transfer of Interests, as amended.

 

        1.5           “Business Day” means each day that is not a Saturday,
Sunday or other day on which commercial banks located in New York, New York are
not generally open for business.

 

        1.6.          “Charter Documents” means the Articles of Organization and
the Operating Agreement, in each case as in effect on the date of signing the
Original Purchase Agreement.

 

        1.7.          “Closing Net Working Capital” means the difference between
(a) the sum of accounts receivable, net, prepaid expenses and other current
assets of the Company and its Subsidiaries, on a consolidated basis, and (b) the
sum of accounts payable, accrued compensation, accrued expenses and deferred
revenue and other current liabilities of the Company and its Subsidiaries, on a
consolidated basis; in each case calculated as of the close of business on the
Closing Date in accordance with GAAP applied on a consistent basis with the
Company’s past practice.

 

        1.8.          “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

        1.9.          “Company Web Site(s)” means Reference.com, Dictionary.com
(including dictionary.reference.com) and/or Thesaurus.com (including
thesaurus.reference.com), individually or collectively, as the case may be.

 

        1.10.        “Contract” means any written or oral legally binding
contract, agreement, instrument, commitment or undertaking of any nature
(including leases, licenses, mortgages, notes, guarantees, sublicenses,
subcontracts, letters of intent, term sheet and purchase orders) as of the date
of signing the Original Purchase Agreement or as may hereafter be in effect.

 

 

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

 

 

        1.11.        “Corporations Code” means Title 2.5 Limited Liability
Companies of the California Corporations Code, as amended from time to time (or
any corresponding provisions of succeeding law).

 

        1.12.        “Disclosure Schedule” means the Disclosure Schedule
delivered to Purchaser and Purchaser concurrently with the parties’ execution of
this Agreement, containing disclosures that, in order to be effective, shall
clearly indicate the Section and, if applicable, the subsection of Section 3 to
which it relates and each of which disclosures shall also be deemed to be
representations and warranties made by the Sellers and the Company to Purchaser
and the Purchaser under Section 3. Any fact or item disclosed in any particular
section of the Disclosure Schedule shall be deemed to have been disclosed with
respect to another section of this Agreement only if and only to the extent the
relevance to other representations and warranties is readily apparent from the
actual text of the disclosures.

 

        1.13.        “Economic Interest” means a Person's right to share in the
income, gains, losses, deductions, credit, or similar items of, and to receive
distributions from, the Company, but does not include any other rights of a
Member, including, without limitation, the right to vote or to participate in
management, or, except as provided in applicable Legal Requirements, any right
to information concerning the business and affairs of the Company.

 

        1.14.        “Encumbrance” means any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, adverse claim, interference,
option, right of first refusal, preemptive right or restriction or rights of
third parties of any nature (including any spousal community property rights,
any restriction on the voting of any security, any restriction on the transfer
of any security or other asset, any restriction on the receipt of any income
derived from any security or other asset, any restriction on the use of any
asset and any restriction on the possession, exercise or transfer of any other
attribute of ownership of a security or other asset).

 

        1.15.        “Entity” means any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.

 

        1.16.        “Environmental and Safety Laws” shall mean any federal,
state or local laws, ordinances, codes, regulations, rules, policies and orders
that are intended to assure the protection of the environment, or that classify,
regulate, call for the remediation of, require reporting with respect to, or
list or define air, water, groundwater, solid waste, hazardous or toxic
substances, materials, wastes, pollutants or contaminants, or which are intended
to assure the safety of employees, workers or other persons, including the
public.

 

        1.17.        “Employee Bonus Amount” means a gross amount of
US$10,000,000 (which is inclusive of all Taxes, whether to be borne by the
employee or employer).

 

        1.18.        “Employee Bonus Plan” means a plan established by the
Company (and approved by Purchaser), for the payment of up to the Employee Bonus
Amount as bonuses to certain employees of the Company, upon the terms set forth
therein.

 

        1.19.        “Escrow Agent” means American Stock transfer & Trust Co. or
such other escrow agent as shall be designated by Purchaser and reasonably
agreed upon by Sellers Representative.

 

        1.20.        “Escrow Amount” means US$10,000,000.

 

        1.21.        “Facilities” shall mean all buildings and improvements on
the Property.

 

        1.22.        “GAAP” means generally accepted accounting principles in
the United States applied on a consistent basis.

 

        1.23.        “Governmental Entity” shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local or municipal or other
government; (c) governmental or quasi-governmental authority of any nature
(including any governmental division, department, agency, commission,
instrumentality,

 

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

 

 

official, ministry, fund, foundation, center, organization, unit, body or Entity
and any court or other tribunal); or (d) self-regulatory organization.

 

        1.24.        “Group” shall have the definition ascribed to such term
under Section 13(d) of the Exchange Act of 1934, the rules and regulations
thereunder, all as amended, and related case law.

 

        1.25.        “Hazardous Materials” shall mean any toxic or hazardous
substance, material or waste or any pollutant or contaminant, or infectious or
radioactive substance, material or waste defined in or regulated under any
Environmental and Safety Laws, but excludes office and janitorial supplies
properly and safely maintained.

 

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

 

        1.27.        “Indemnified Person(s)” the Person(s) entitled to
indemnification under Section 9.2 or 9.3, as the case may be.

 

        1.28.        “Indemnifying Person(s)” the Person(s) from whom
indemnification is sought under Section 9.2 or 9.3, as the case may be. 

 

        1.29.        “Indemnity Escrow Agreement” means the Indemnity Escrow
Agreement, substantially in the form attached hereto as Exhibit B, entered into
as of the date of signing the Original Purchase Agreement by and among
Purchaser, the Escrow Agent, the Sellers and the Sellers Representative, as
amended.

 

        1.30.        “knowledge” or “known” shall mean, with respect to the
Company and its Subsidiaries, the knowledge of the Sellers and of certain
employees of the Company as set forth on Schedule 0 of the Disclosure Schedule;
an individual shall be deemed to have “knowledge” of a particular fact or other
matter if (i) such individual is actually aware of such particular fact or other
matter; (ii) such individual has made, or reasonably should have made,
reasonable inquiry of those other employees of the Company and its Subsidiaries
whom such individual reasonably believes would have actual knowledge of the
matters represented; or (iii) such individual, when taking into account his or
her position and responsibilities, could be reasonably expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
such reasonable inquiry concerning the existence of such fact or other matter.

 

        1.31.        “Legal Requirement” means any law, statute, constitution,
principle of common law, resolution, ordinance, code, edict, decree, rule,
regulation, order, award, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity.

 

        1.32.        “Material Adverse Effect” with respect to any entity means
any change, event, violation, inaccuracy, 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, or is
reasonably likely to, (i) be or become materially adverse in relation to the
near-term or longer-term condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, prospects, capitalization,
operations or results of operations of such entity and its Subsidiaries, taken
as a whole (including, without limitations, a material disruption in the
operation of any Company Web Site continuing for more than 12 consecutive
hours); or (ii) materially impede or delay such entity’s ability to consummate
the transactions contemplated by this Agreement in accordance with its terms.

 

        1.33.        “Members” means any Person who has been admitted as a
member of the Company as provided in the Corporations Code.

 

        1.34.        “Membership Interest” shall mean a Member’s rights in the
Company, collectively, including the Member’s Economic Interest, any right to
vote or participate in management, and any right to information concerning the
business and affairs of the Company provided by the Charter Documents and Legal
Requirements.

 

 

 

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

 

 

        1.35.        “Permitted Encumbrances” means: (i) statutory liens for
taxes that are not yet due and payable or liens for taxes being contested in
good faith by any appropriate proceedings for which adequate reserves have been
established; (ii) statutory liens to secure obligations to landlords, lessors or
renters under leases or rental agreements; (iii) deposits or pledges made in
connection with, or to secure payment of, workers’ compensation, unemployment
insurance or similar programs mandated by applicable law; (iv) statutory liens
in favor of carriers, warehousemen, mechanics and materialmen, to secure claims
for labor, materials or supplies and other like liens; and (v) liens in favor of
customs and revenue authorities arising as a matter of Legal Requirements to
secure payments of customs duties in connection with the importation of goods.

 

        1.36.        “Person” means an individual, Entity or Governmental
Entity.

 

        1.37.        “Property” shall mean all real property leased, sub-leased
or owned by the Company or any Subsidiary either currently or in the past.

 

        1.38.        “Registration Statement” means the registration statement
referred to in Section 6.9., including, any prospectus included therein, as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such prospectus.

 

        1.39.        “SEC” means the Securities and Exchange Commission.

 

        1.40.        “Securities Act” means the United States Securities Act of
1933, as amended.

 

        1.41.        “Subsidiary” of a Person is an Entity in which a Person
directly or indirectly owns or purports to own, beneficially or of record: (a)
an amount of voting securities of or other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity’s board of directors or other governing body; or (b) at least 50% of
the outstanding equity, voting or financial interests in such Entity.

 

        1.42.        “Tax Authority” means the Governmental Entity responsible
for the imposition of any Tax (domestic or foreign).

 

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

 

        1.44.        “Tax” (and, with correlative meaning, “Taxes” and
“Taxable”) means (i) any federal, state, local or foreign income, capital gain,
alternative or add-on minimum tax, gross income, estimated, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, capital stock,
profits, license, registration, withholding, payroll, social security (or
equivalent), Federal Insurance Contributions Act (FICA) tax, employment,
unemployment, disability, excise, severance, stamp, occupation, premium,
property (real, personal, tangible or intangible), environmental or windfall
profit tax, custom duty, business and occupation, or other tax, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount (whether disputed
or not) imposed by any Tax Authority, (ii) any liability for the payment of any
amounts of the type described in clause (i) of this sentence as a result of
being a member of an affiliated, consolidated, combined, unitary or aggregate
group for any Taxable period, and (iii) any liability for the payment of any
amounts of the type described in clause (i) or (ii) of this sentence as a result
of being a transferee of or successor to any Person or as a result of any
express or implied obligation to assume such Taxes or to indemnify any other
Person.

 

        1.45.        “Transaction Agreements” means the Indemnity Escrow
Agreement and the Bonus Plan/Documents Escrow Agreement.

 

        1.46.        “Transaction Expenses” means the amounts of all fees, costs
or expenses incurred or expected to be incurred by the Company and the
Subsidiaries in connection with the preparation, negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby (including any fees and expenses of legal counsel, accountants, financial
advisors

 

 

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and consultants, investment bankers and brokers, notwithstanding any
contingencies for escrows, etc., any bonuses, costs and fees for obtaining or
securing required consents and approvals for the transactions contemplated
hereby, HSR Act filings fees, premiums or other payments in connection with
directors’ and officers’ liability insurance, and any such fees incurred by
Sellers and paid for or to be paid for by the Company), whether or not invoiced
or billed prior to the Closing, and whether incurred on behalf of the Company or
on behalf of the Sellers, in each case, which have not been assumed or paid (or
reimbursed by the Sellers to the Company, if paid by the Company) by the
Sellers.

 

2.     Each of the following terms is defined in the Section set forth opposite
such term:

 

Term

 

Section

Aggregate Purchase Price

 

1.2.1

Agreement

 

Preamble

Antitrust Restraint

 

6.6.3

Claims Period

 

9.5

Closing

 

2.1

Closing Date

 

2.1

COBRA

 

3.15.3

Company

 

Recital A

Company Authorizations

 

3.10.2

Company Balance Sheet

 

3.6.3

Company Balance Sheet Date

 

3.6.3

Company Debt

 

3.6.6

Company Employee Plan

 

3.15.1

Company Employee Plans

 

3.15.1

Company IP Rights

 

3.12.1.2

Company Products

 

3.12.1.6

Company Registered Intellectual property

 

3.12.1.4

Company Representatives

 

6.3.1

Company Source Code

 

3.12.1.7

Company Voting Debt

 

3.3.3

Company-Owned IP Rights

 

3.12.1.3

Confidential Agreement

 

6.2.1

Confidential Information

 

3.12.20

ERISA

 

3.15.1

ERISA Affiliate

 

3.15.1

Escrow Period

 

9.5

Estimated Closing Adjustments Certificate

 

1.2.2

Financial Statements

 

3.6.1

Foreign Plan

 

3.15.7

Forfeited Employee Bonus Amount

 

1.4.2

Holdback

 

1.3.1

Holdback Release Date

 

1.3.1

Indemnifiable Damages

 

9.2

Indemnified Person

 

9.2

 

 

 

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Indemnity Escrow

 

1.3.2

Interest

 

Recital B

Interested Party

 

3.16

Material Contract

 

3.19.1

Open Source Materials

 

3.12.21

Original Purchase Agreement

 

Recital A

Outstanding Escrow Amount

 

6.12

Pledge and Security Agreement

 

Recital F

Purchase Price

 

1.2.1

Purchaser

 

Preamble

Second Installment

 

1.2.1

Seller(s)

 

Recital A

Sellers Representative

 

Preamble

Senior Debt

 

6.12.1

Senior Notes

 

6.12.1

Significant Customer

 

3.21.1

Significant Supplier

 

3.21.2

Subordination Agreement

 

Recital F

Third Installment

 

1.2.1

Third Party Intellectual Property Rights

 

3.12.15

 

 

 

 

 

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