Exhibit 10.1
 
STOCK PURCHASE AGREEMENT
 
           This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of
December 12, 2013, is entered into by and among InterCloud Systems, Inc., a
Delaware corporation (“Purchaser”), Integration Partners-NY Corporation, a New
Jersey corporation (the “Company”), and Barton F. Graf, Jr. (“Graf”), David C.
Nahabedian (“Nahabedian”) and Frank Jadevaia (“Jadevaia”) (each of Graf,
Nahabedian and Jadevaia, a “Seller” and collectively the “Sellers”) as the sole
shareholders of the Company.
 
WHEREAS, the Sellers desire to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase from the Sellers, all of the outstanding stock of
the Company, as more fully described herein and upon the terms and subject to
the conditions set forth herein, and to enter into the other transactions as
described herein;
 
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties expressly contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the terms and conditions set forth herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
 
ARTICLE I
 
DEFINITIONS
 
           1.1           Definitions.  The following terms shall have the
following meanings for the purposes of this Agreement:
 
“401(k) Plan” has the meaning set forth in Section 6.10.
 
“Act” means the Securities Act of 1933, as amended.
 
“Additional 338 Taxes” has the meaning set forth in Section 6.13.
 
“Additional Post-2012 Taxes” has the meaning set forth in Section 6.13.
 
“Adjustment Payment” has the meaning set forth in Section 2.6(e).
 
“Affiliate” means, with respect to any specified Person, any other Person which,
directly or indirectly, owns or controls, is under common ownership or control
with, or is owned or controlled by, such specified Person.  For purposes of this
definition, the term “control” (including the terms “controlling,” “controlled
by,” and “under common control with”) means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.
 
 
 

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“Agreement” means this Stock Purchase Agreement, including all exhibits and
schedules hereto, as it may be amended from time to time.
 
“Balance Sheet” means the consolidated balance sheet of the Company, dated
September 30, 2013, a copy of which is set forth in Schedule 1.1.
 
“Balance Sheet Date” means September 30, 2013.
 
“Base Earnout Amount” has the meaning set forth in Section 2.3(b).
 
“Business” means the business of the Company, and shall be deemed to include any
of the following incidents of such business: income, cash flow, operations,
condition (financial or other), assets/properties, anticipated revenues/income,
prospects, Liabilities and personnel/management.
 
“Business Confidential Information” means all information, knowledge or data
related to the operation of the Business or the Company that is not in the
public domain or otherwise publicly available, other than as a result of any
action or inaction by a Seller, or that has been treated as confidential by the
Company.
 
“Business Day” means any day other than (a) any Saturday or Sunday or (b) any
other day on which banks located in New York, New York are required or permitted
to be closed.
 
“Closing” has the meaning set forth in Section 2.2.
 
“Closing Cash” means any cash in the Company immediately prior to the Closing.
 
“Closing Date” has the meaning set forth in Section 2.2.
 
“Closing Debt” means any Debt of the Company that is not repaid in full prior to
the Closing.
 
“Closing Notice” has the meaning set forth in Section 2.6(a).
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Common Stock Price” means the average closing price of the Purchaser’s common
stock as reported on Yahoo Finance for the three (3) trading days immediately
prior to, but not including, the Closing Date.
 
“Company” has the meaning set forth in the introductory paragraph of this
Agreement.
 
“Company Charter Documents” means the Company’s Certificate of Incorporation, as
amended to the date hereof, and the Company’s Bylaws, as amended to the date
hereof.
 
“Company Plans” has the meaning set forth in Section 3.14(a).
 
“Company IP Rights” has the meaning set forth in Section 3.10(b).
 
 
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“Company Registered IP” has the meaning set forth in Section 3.10(a).
 
“Company Unpaid Transaction Expenses” means the expenses incurred by the Company
in connection with this Agreement and the transactions contemplated hereby that
remain unpaid as of the Closing.
 
“Competitor” means any Person or business unit or group of any Person whose
business operations are substantially similar to the Business or any material
portion thereof, located anywhere in the United States or its territories.
 
“Contingent Earnout Amount” has the meaning set forth in Section 2.3(b).
 
“Contract” means any contract, lease, commitment, understanding, task order,
sales order, purchase order, delivery order, teaming agreement, joint venture
agreement, other agreement, indenture, mortgage, note, bond, right, warrant,
instrument, plan, permit or license, whether written or oral, which is intended
or purports to be binding and enforceable.
 
“Debt” means, on a consolidated basis, any and all (a) obligations for borrowed
money, whether current or unfunded, secured or unsecured (including any accrued
but unpaid interest thereon and any premiums, penalties, termination fees,
expenses or breakage costs due upon prepayment of such indebtedness or payable
as a result of the consummation of the transactions contemplated hereby) and
whether or not evidenced by notes, bonds, debentures, mortgages or other debt
instruments, debt securities or other similar instruments, (b) obligations to
reimburse any Person for amounts drawn upon or funded under a letter of credit
or similar arrangement, but which have not been repaid, (c) obligations arising
out of overdrafts, acceptance credit or similar facilities and (d) guarantees of
obligations of a type described in clauses (a) - (c).
 
“Determination Letter” has the meaning set forth in Section 3.14(b).
 
“Determined Losses” has the meaning set forth in Section 11.6.
 
“Disagreement Notice” has the meaning set forth in Section 2.6(c).
 
“Earnout Payment” has the meaning set forth in Section 2.3(b).
 
“Earnout Period” means the twelve-month period commencing on first day of the
first calendar month commencing after the Closing Date (e.g. if the Closing Date
is December 15, 2013, the Earnout Period would begin on January 1, 2014 and end
on December 31, 2014).
 
“EBITDA” means, for any period, the consolidated earnings before interest,
taxes, depreciation and amortization of the Company.

“Elected Amount” has the meaning set forth in Section 2.3(d).
 
 
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“Environmental Law or Order” means any Law which relates to or otherwise imposes
liability or standards of conduct concerning discharges, emissions, releases or
threatened releases of noises, pathogens, odors, pollutants, or contaminants or
hazardous or toxic wastes, substances or materials, whether as matter or energy,
into air (whether indoors or out), water (whether surface or underground) or
land (including any subsurface strata), or otherwise relating to their
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling, including the following Laws:
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as amended,
the Resource Conservation and Recovery Act of 1976, as amended, the Toxic
Substances Control Act of 1976, as amended, the Federal Water Pollution Control
Act Amendments of 1972, the Clean Water Act of 1977, as amended, the National
Environmental Policy Act of 1969, and any state Law analogous to any of the
foregoing.
 
“Environmental Liability” means, without limitation, all damages, losses and
Liabilities (including investigation, cleanup, compliance, enforcement, response
and toxic tort Liabilities) (whether absolute, contingent, matured, liquidated,
accrued, known, or unknown), including fines, penalties, capital expenditures,
fees and expenses of any kind or nature whatsoever, and whether arising out of
loss of life, personal injuries, liens or other claims against property or
improvements thereon or other obligations of any kind or character, in each case
that relate in any way to, or arise under, an Environmental Law or Order or any
Hazardous Substance.
 
“Environmental Permit” means any Permit required by or pursuant to any
applicable Environmental Law or Order.
 
“Equipment” means machinery, equipment, tools, furniture, office equipment,
computer hardware, supplies, materials, vehicles and other items of tangible
personal property accounted for as equipment.
 
“Equity Recipients” has the meaning set forth in Section 4.3.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“ERISA Affiliate” has the meaning set forth in Section 3.14(c).
 
“Escrow Agent” has the meaning set forth in Section 2.4.
 
“Escrow Agreement” means the escrow agreement between Sellers, Purchaser and the
Escrow Agent, in substantially the form attached hereto as Exhibit B.
 
“Escrow Amount” has the meaning set forth in Section 2.4.
 
“Escrow Claims Period” has the meaning set forth in Section 11.7.
 
“Escrow Fund” has the meaning set forth in Section 2.4.
 
“Escrow Termination Date” has the meaning set forth in Section 11.7.
 
“Estimated Closing Cash” has the meaning set forth in Section 2.6(a).
 
“Estimated Closing Debt” has the meaning set forth in Section 2.6(a).
 
 
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“Estimated Company Unpaid Transaction Expenses” has the meaning set forth in
Section 2.6(a).
 
“Estimated Working Capital Surplus” has the meaning set forth in Section 2.6(a).
 
“Estimated Working Capital Deficiency” has the meaning set forth in Section
2.6(a).
 
“Financial Statements” means, collectively, (a) the Company’s consolidated
unaudited balance sheet at December 31, 2012 and the Company’s consolidated
unaudited statements of income and cash flows for the 12-month period ended
December 31, 2012, and (b) the Balance Sheet and the Company’s consolidated
unaudited statements of income and cash flows for the 10-month period ended
October 31, 2013.
 
“Foreign Benefit Plan” has the meaning set forth in Section 3.14(g).
 
“Forward EBITDA” means the EBITDA of the Company for the Earnout Period.
 
“Fundamental Representations” has the meaning set forth in Section 11.2(a).
 
“GAAP” means United States generally accepted accounting principles.
 
“Government Bid” means a bid, tender or proposal which, if accepted, would
result in a Government Contract.
 
“Government Contract” means any Contract between the Company and any
Governmental Authority, as well as any subcontract or other arrangement by which
(i) such company has agreed to provide goods or services to a prime contractor,
to the Governmental Authority, or to a higher-tier subcontractor or (ii) a
subcontractor or vendor has agreed to provide goods or services to a company,
where, in either event, such goods or services ultimately will benefit or be
used by a Governmental Authority.
 
“Governmental Authority” means the government of the United States or any
foreign country, any state or political subdivision thereof, or any entity, body
or authority exercising executive, legislative, judicial, regulatory,
administrative or other governmental functions or any court, department,
commission, board, agency, instrumentality or administrative body of any of the
foregoing.
 
“Graf” has the meaning set forth in the introductory paragraph of this
Agreement.
 
“Gross-Up Payment” has the meaning set forth in Section 6.12.
 
“Hazardous Substance” means any material, substance, form of energy or pathogen
which (i) constitutes a “hazardous substance”, “toxic substance” or “pollutant”,
“contaminant”, “hazardous material”, “hazardous chemical”, “regulated
substance”, or “hazardous waste” (as such terms are defined by or pursuant to
any Environmental Law or Order) or (ii) is otherwise regulated or controlled by,
or can give rise to liability under, any Environmental Law or Order.
 
“Indemnitee” has the meaning set forth in Section 11.2.
 
 
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“Indemnitor” has the meaning set forth in Section 11.2.
 
“Initial Cash Payment” has the meaning set forth in Section 2.3(a).
 
“Initial Closing Payment” has the meaning set forth in Section 2.3(a).
 
“Initial Stock Payment” has the meaning set forth in Section 2.3(a).
 
“Intellectual Property” means, throughout the world, all trade names, trade
dress, corporate names and logos, trademarks, service marks, patents,
copyrights, industrial designs, Internet domain names, IP Addresses (and any
registrations with any Governmental Authority of, and applications for
registration pending with respect to, any of the foregoing), works of
authorship, trade secrets, proprietary information, mask works, technology,
inventions, processes, designs, know-how, computer software and data, databases
and data collections, formulas, goodwill, any licenses related to any of the
foregoing, and all other intangible intellectual property assets, including all
rights to sue and recover for past and future infringement or misappropriation
thereof and to receive all income, royalties, damages and payments for past and
future infringements thereof and all other intangible intellectual property
assets and similar or equivalent rights to any of the foregoing anywhere in the
world.
 
“IPO” means Purchaser’s first underwritten public offering of Purchaser Common
Stock after the date hereof.
 
“IT Systems” has the meaning set forth in Section 3.10(g).
 
“Jadevaia” has the meaning set forth in the introductory paragraph of this
Agreement.
 
“Law” means any constitution or provision thereof, law, statute, regulation,
ordinance, rule, order, decree, judgment, consent decree, settlement agreement
or governmental requirement enacted by, promulgated by, entered into by, agreed
to or imposed by any Governmental Authority.
 
“Leased Real Property” means all real property leased by the Company.
 
“Liability” means any liability, debt or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, whether due or to become due,
and whether or not required to be reported under GAAP), including any liability
for Taxes.
 
“Lien” means any mortgage, lien, charge, restriction, pledge, security interest,
option, claim, easement, encroachment or encumbrance.
 
“Loss” or “Losses” means all Liabilities, losses, costs, claims, damages, lost
profits, lost revenues, diminution in value, penalties and expenses (including
reasonable attorneys’ and accountants’ fees and expenses and reasonable
investigation and litigation costs incurred in relation to the matter or in
enforcing such matter), whether or not special, non-compensatory, consequential,
indirect, incidental, statutory or punitive.
 
 
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“Material Adverse Change” or “Material Adverse Effect” means an adverse change,
event, development or effect on or in the business, operations, assets,
Liabilities, results of operations, cash flows, prospects or condition
(financial or otherwise) of the Company; provided, however, that Material
Adverse Change or Material Adverse Effect shall not include any adverse change,
event, development, or effect to the extent arising from or relating to: (a)
general business or economic conditions, including such conditions related to
the Business (provided the impact on the Company or the Business is not
disproportionate to the impact on similar companies in the same industry); (b)
national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon the United States, or any of its territories, possessions,
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States; (c) financial, banking, or securities markets
(including any disruption thereof and any decline in the price of any security
or any market index); (d) changes in Laws; or (e) the taking of any action
required by this Agreement.
 
“Material Contracts” means all of the Contracts listed or described, or required
by Section 3.11 to be listed or described, in Section 3.11 of the Schedule of
Exceptions.
 
“Nahabedian” has the meaning set forth in the introductory paragraph of this
Agreement.
 
“Net Working Capital” means as of the Closing Date, (a) the sum of the Closing
Cash, accounts receivable, inventory and prepaid expenses, less (b) the sum of
accounts payable and other current liabilities, calculated in accordance with
GAAP.
 
“New Initial Payment” has the meaning set forth in Section 2.6(e).
 
“Notice of Claim” has the meaning set forth in Section 11.4.
 
“Notice of Objection” has the meaning set forth in Section 11.4.
 
“Order” means any decree, injunction, judgment, order, ruling, assessment or
writ.
 
“Parachute Payment Waiver” has the meaning set forth in Section 6.13.
 
“Permits” means any license, permit, franchise, certificate of authority, or
order required to be issued by any Governmental Authority.
 
“Permitted Liens” means (a) Liens created by Law for current taxes, assessments
or similar charges not yet due and payable and (b) Liens on Equipment securing
leases or purchase money indebtedness or financing of such Equipment.
 
“Person” means any individual or any corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association,
Governmental Authority or other entity.
 
 
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“Pre-Closing Taxes” means (i) any Taxes of the Company or any of their
Affiliates with respect to any Pre-Closing Tax Period, (ii) any Taxes of the
Sellers or their respective Affiliates for which the Company or Purchaser is
liable, whether by reason of any requirement to withhold or otherwise, in
connection with this Agreement, and (iii) any Taxes for which the any Company is
held liable under Treasury Regulations Section 1.1502-6 (or any corresponding or
similar provision of state, local or foreign Tax law) by reason of such entity
being included in any consolidated, affiliated, combined or unitary group in any
Pre-Closing Tax Period.  The amount of any Tax based on or measured by income or
receipts of the Company that is allocable to the portion of a Straddle Period
ending on the Closing Date shall be determined based on an interim closing of
the books as of the close of business on the Closing Date (and for such purpose,
the Tax period of any partnership or other pass-through entity in which the
Company holds a beneficial interest shall be deemed to terminate at such time)
and the amount of any other Tax of the Company that is allocable to the portion
of a Straddle Period ending on the Closing Date shall be deemed to be the amount
of such Tax for the entire Straddle Period multiplied by a fraction, the
numerator of which is the number of days in the portion of the Straddle Period
that is deemed to end on the Closing Date and the denominator of which is the
total number of days in the entire Straddle Period.
 
“Pre-Closing Tax Period” means any taxable period ending on or prior to the
Closing Date, including the portion of any Straddle Period ending on the Closing
Date.
 
“Preparation Period” has the meaning set forth in Section 2.6(b).
 
“Pro Rata Share” means, with respect to a Seller, the number of Shares being
sold pursuant to this Agreement by such Seller divided by the total number of
Shares.
 
“Public Software” has the meaning set forth in Section 3.10(h).
 
“Purchase Price” has the meaning set forth in Section 2.3.
 
“Purchaser” has the meaning set forth in the introductory paragraph of this
Agreement.
 
“Purchaser Common Stock” means shares of Purchaser’s common stock, par value
$0.0001 per share.
 
“Purchaser Notice” has the meaning set forth in Section 2.6(b).
 
“Receivables” means accounts receivable, notes receivables and other receivables
of the Company arising from the operation of the Business.
 
“Release” means the form of Release Agreement attached hereto as Exhibit C.
 
“Resolved Amount” has the meaning set forth in Section 11.4.
 
“Schedule of Exceptions” has the meaning set forth in Article III.
 
“SEC” means the U.S. Securities and Exchange Commission, or any successor
Governmental Authority.
 
 
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“Section 338(h)(10) Elections” has the meaning set forth in Section 6.12.
 
“Seller” and “Sellers” have the meaning set forth in the introductory paragraph
of this Agreement.
 
“Sellers’ knowledge” or “to the knowledge of the Sellers” or variants thereof
mean with respect to any matter in question that any Seller or any officer or
director of the Company has present actual knowledge of such matter or would
have knowledge of such matter after reasonable inquiry and investigation.
 
“Shares” means all of the issued and outstanding shares of stock of the Company.
 
“Straddle Period” means any taxable period that begins on or before the Closing
Date and ends after the Closing Date.
 
“Supplement” has the meaning set forth in Section 6.2.
 
“Tax Return” means any report, return or other information required to be and
actually supplied to a Governmental Authority in connection with any Taxes.
 
“Taxes” means all taxes, charges, fees, duties (including customs duties),
levies or other assessments, including income, gross receipts, net proceeds, ad
valorem, turnover, real and personal property (tangible and intangible), sales,
use, franchise, excise, value added, stamp, leasing, lease, user, transfer,
fuel, excess profits, occupational, interest equalization, windfall profits,
severance, license, payroll, environmental, capital stock, disability,
employee’s income withholding, other withholding, unemployment and Social
Security taxes, which are imposed by any Governmental Authority, and such term
shall include any interest, penalties or additions to tax attributable thereto.
 
“Termination Date” has the meaning set forth in Section 10.1(f).
 
“Threshold Amount” has the meaning set forth in Section 11.3.
 
“Transaction Documents” means the Transition Services Agreement, the Releases
and the Escrow Agreement.
 
“Transition Services Agreement” means a transition services agreement in a form
mutually agreeable to the Sellers, Integration Partners Corporation and
Purchaser.
 
“Treasury Regulations” means the Treasury Regulations promulgated under the Code
by the U.S. Treasury Department.
 
“TTM EBITDA” means the means the EBITDA of the Company for the twelve-month
period beginning ending September 30, 2013
 
 “WARN Act” has the meaning set forth in Section 3.15.
 
 
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“Working Capital Deficiency” means the amount, if any, by which the Net Working
Capital is less than $500,000.
 
“Working Capital Surplus” means the amount, if any, by which the Net Working
Capital is greater than $831,000.
 
ARTICLE II
 
SALE AND PURCHASE OF SHARES
 
2.1           Agreements to Sell and Purchase.  Subject to the terms and
conditions of this Agreement, and in exchange for the Purchase Price to be paid
as provided herein, at the Closing the Sellers shall sell, assign, convey,
transfer and deliver to Purchaser, free and clear of all Liens, and Purchaser
shall purchase, acquire and take assignment of, the Shares.
 
2.2           Closing.  Subject to the terms and conditions hereof, the purchase
and sale of the Shares as provided for herein (the “Closing”) shall take place
at the offices of Pryor Cashman LLP at 7 Times Square, New York, NY 10036, on
the second business day after the satisfaction or waiver of the conditions in
Article VIII and Article IX (which date on which the Closing occurs shall be
referred to herein as the “Closing Date”).
 
2.3           Purchase Price; Payment of Consideration.  Subject to the terms
and conditions of this Agreement, Purchaser shall pay the aggregate purchase
price set forth in this Section 2.3 for the Shares (the “Purchase Price”) as
follows:
 
(a)           At the Closing, Purchaser shall pay to the Sellers an aggregate
amount equal to (i) the product of the TTM EBITDA and 5.4 (ii) less any
Estimated Closing Debt (iii) less any Estimated Company Unpaid Transaction
Expenses (iv) plus any Estimated Working Capital Surplus or less any Estimated
Working Capital Deficiency (the “Initial Closing Payment”).  The Initial Closing
Payment will be paid as follows:
 
(i)   Purchaser shall pay the Sellers, with each Seller receiving his respective
Pro Rata Share, an aggregate amount equal to (i) the product of the TTM EBITDA
and 5.2 (ii) less any Estimated Closing Debt (iii) less any Estimated Company
Unpaid Transaction Expenses (iv) plus any Estimated Working Capital Surplus or
less any Estimated Working Capital Deficiency, less the Escrow Amount.
 
Nahabedian and Graf shall receive their Pro Rata share in cash (the “Initial
Cash Payment”), while Jadevaia shall receive his Pro Rata share in the form of a
convertible note, with a fixed conversion price.  The conversion price shall
equal the average of the closing prices of the Purchaser’s common stock for the
three (3) trading days immediately prior to, but not including, the Closing
Date.
 
(ii)         Purchaser shall further issue to Jadevaia an aggregate number of
shares of Purchaser Common Stock equal to the quotient obtained by dividing (A)
(i) the product of TTM EBITDA and 0.2 (ii) less any Estimated Closing Debt (iii)
less any Estimated Company Unpaid Transaction Expenses (iv) plus any Estimated
Working Capital Surplus or less any Estimated Working Capital Deficiency, by (B)
the Common Stock Price (rounded to the nearest whole share of Purchaser Common
Stock) (such shares, the “Initial Stock Payment”).
 
 
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(b)   Within sixty (60) days of the end of the Earnout Period, Purchaser shall
pay to Jadevaia an aggregate amount equal to (i) 0.6 times the Forward EBITDA
(the “Base Earnout Amount”) plus (ii) in the event that the Forward EBITDA
equals or exceeds the TTM EBITDA by 5.0% or more, an amount equal to 2.0 times
the difference between the Forward EBITDA and the TTM EBITDA (the “Contingent
Earnout Amount” and, together with the Base Earnout Amount, the “Earnout
Payment”).  The Earnout Payment will be paid in cash.
 
(c)   The Forward EBITDA calculation shall be made within forty-five (45) days
of the end of the Earnout Period by Purchaser’s independent auditors (or other
appropriate third party chosen by Purchaser and reasonably acceptable to the
Sellers) and payment shall be made within sixty (60) days of the end of the
Earnout Period.
 
(d)   Any Seller may elect to receive a portion of such Seller’s Pro Rata Share
of the Initial Cash Payment up to an amount equal to such Seller’s Pro Rata
Share of the TTM EBITDA in shares of Purchaser Common Stock in lieu of cash (the
“Elected Amount”) provided that (i) such Seller notifies Purchaser of such
election at least five (5) Business Days prior to the Closing and (ii) the
number of shares to be so issued shall be determined by dividing such Seller’s
Elected Amount by the Common Stock Price.
 
(e)   The portion of the Purchase Price constituting the Escrow Amount shall be
deposited in the Escrow Fund with the Escrow Agent in accordance with Section
2.4.
 
2.4   Escrow.  At the Closing, Purchaser shall deposit an amount in cash equal
to 7% of the Initial Cash Payment (the “Escrow Amount”) with Wells Fargo Bank,
National Association as escrow agent (the “Escrow Agent”).  Such deposit shall
constitute the “Escrow Fund” and will be governed by the terms set forth herein
and in the Escrow Agreement.  Each Seller’s proportionate interest in the Escrow
Fund shall be based on such Seller’s Pro Rata Share.
 
2.5   Withholding.  Purchaser (or any other Person responsible for withholding
any amount with respect to any payment made under this Agreement) shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement such amounts as are required to be deducted and
withheld with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax law.  To the extent that amounts are so
deducted and withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Person in respect of which such
deduction and withholding was made.
 
2.6           Calculation of Initial Closing Payment; Post-Closing Adjustment.
 
(a)           The Sellers shall cause the Company to prepare, in good faith, and
deliver to Purchaser no later than the close of business on the day that is two
(2) Business Days prior to the Closing Date, a notice (the “Closing Notice”),
certified by each Seller and the Company’s chief financial officer and otherwise
in form and substance reasonably satisfactory to Purchaser, setting forth the
Company’s calculation of (i) the Closing Debt (the “Estimated Closing Debt”),
(ii) the Company Unpaid Transaction Expenses (the “Estimated Company Unpaid
Transaction Expenses”), (iii) the Closing Cash (the “Estimated Closing Cash”),
(iv) the Working Capital Surplus or Working Capital Deficiency (respectively,
the “Estimated Working Capital Surplus” and “Estimated Working Capital
Deficiency”)and (v) the resulting Initial Closing Payment.  The Closing Notice
shall be accompanied by sufficient documentation to support the calculations set
forth therein as reasonably determined by Purchaser.
 
 
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(b)           As promptly as practicable, but not later than sixty (60) days
after the Closing Date (the “Preparation Period”), Purchaser shall prepare and
deliver to the Sellers a notice (the “Purchaser Notice”) setting forth
Purchaser’s good faith calculation of the Closing Debt, the Company Unpaid
Transaction Expenses, the Closing Cash, the Working Capital Surplus or Working
Capital Deficiency and the resulting calculation of the Initial Closing Payment,
together with supporting documentation for such calculations.  In the event that
Purchaser does not so deliver the Purchaser Notice, Purchaser shall be deemed to
have accepted the calculations set forth in the Closing Notice.
 
(c)           After receipt of the Purchaser Notice by the Sellers, in the event
that the Sellers do not agree with any of the calculations set forth in the
Purchaser Notice, the Sellers shall, within ten (10) days of receipt of the
Purchaser Notice provide a notice (the “Disagreement Notice”) to Purchaser
informing Purchaser of each such disagreement and the reasons and bases
therefor.  Unless the Sellers provide the Disagreement Notice to Purchaser prior
to the expiration of the Review Period, the Sellers shall be deemed to have
accepted the calculations set forth in the Purchaser Notice.
 
(d)           In the event that the Sellers timely deliver a Disagreement Notice
to Purchaser, Purchaser and the Sellers shall attempt in good faith to come to
an agreement on any calculations that are the subject of the Disagreement
Notice.  If the Parties are unable to come to an agreement regarding any such
disputed amount within thirty (30) days of receipt by Purchaser of the
Disagreement Notice, either the Sellers or Purchaser may notify the other(s)
that such dispute is being submitted to an independent accounting firm selected
by such submitting Party(ies), reasonably acceptable to Purchaser (if selected
by the Sellers) or to the Sellers (if selected by Purchaser), for resolution of
the disputed items and determination of the disputed calculations and the
resulting Initial Closing Payment; provided that in no event shall the resulting
Initial Closing Payment be less than that contained in the Purchaser Notice or
more than that contained in the Closing Notice.  The Company and Purchaser shall
furnish such accounting firm with access to such books and records as it shall
reasonably require to resolve the dispute.  The accounting firm shall be
directed to complete its calculations and report the same in writing to the
Parties hereto no later than thirty (30) days after its engagement.  The fees
and expenses of the accounting firm shall be borne 50% by Purchaser and 50% by
the Sellers.
 
(e)           Within five (5) Business Days following (i) Sellers’ acceptance of
the Purchaser Notice calculations, (ii) the agreement of the Sellers and
Purchaser on the calculations or (iii) receipt by the Parties of the accounting
firm’s calculations pursuant to Section 2.6(d) above (the revised Initial
Closing Payment resulting from any of the foregoing being the “New Initial
Payment”), if the New Initial Payment is less than the original Initial Closing
Payment, each Seller shall promptly, and in any event within five (5) Business
Days, pay in cash by check or wire transfer to Purchaser such Seller’s Pro Rata
Share of the difference between the original Initial Closing Payment and the New
Initial Payment (the aggregate of such differences being the “Adjustment
Payment”); provided, however, that if the Adjustment Payment is $200,000 or
less, Purchaser shall be entitled to recover such Adjustment Payment from the
Escrow Fund.
 
 
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ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF
THE SELLERS AND THE COMPANY
 
The Company and each Seller represents and warrants to Purchaser that, except as
set forth on the schedule of exceptions attached hereto as Exhibit A (the
“Schedule of Exceptions”), which exceptions or disclosure shall be deemed to be
part of the representations and warranties made hereunder, the following
representations in this Article III are true, correct and complete as of the
date hereof.  The Schedule of Exceptions shall be arranged in sections and
subsections corresponding to the numbered and lettered sections and subsections
of this Article III, and the disclosures in any section or subsection of the
Company Disclosure Schedule shall only qualify each section and subsection of
this Article III to which it corresponds and each other section and subsection
of this Article III to the extent it is reasonably apparent from a reading of
the text of the disclosure without reference to any underlying document that
such disclosure is applicable to such other section or subsection.
 
3.1           Due Incorporation.  The Company is duly organized, validly
existing and in good standing under the laws of New Jersey, and possesses all
requisite power (corporate or otherwise) and authority and all governmental
licenses, permits, authorizations and approvals, necessary to enable it to own,
lease and operate its properties and to carry on its business.  The Company is
duly licensed or qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of the properties owned,
leased or operated by it or the business conducted by it requires such licensing
or qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.  The Company does not own, control, or hold any equity
or other similar interest or any right (contingent or otherwise) in, directly or
indirectly, any corporation, trust, joint venture, limited liability company or
other Person and, in furtherance of the foregoing, has no subsidiaries.
 
3.2           Authorization; Investment Intent; Ownership of Shares.
 
(a)           The Company has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.  The execution
and delivery of this Agreement and the performance by the Company its
obligations hereunder have been duly authorized by all necessary corporate
action of the Company in accordance with applicable Law and the Company Charter
Documents.  This Agreement constitutes the valid and legally binding obligations
of the Company enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar Laws affecting the enforcement of
creditors’ rights or by general principles of equity, whether such
enforceability is considered in a court of law, a court of equity or otherwise.
 
 
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(b)           Section 3.2(b) of the Schedule of Exceptions sets forth all of the
Company’s shareholders, the number and class and series of shares of capital
stock owned by them and all outstanding securities of the Company convertible
into or exercisable or exchangeable for shares of capital stock of the Company
along with the holders thereof.  Each Seller is the sole record and beneficial
owner of the Shares set forth opposite such Seller’s name in Section 3.2(b) of
the Schedule of Exceptions, all of which Shares are owned free and clear of all
rights, claims and Liens, and have not been sold, pledged, assigned or otherwise
transferred except pursuant to this Agreement.  There are no outstanding
subscriptions, rights, options, warrants or other agreements obligating the
Company to issue any shares of capital stock of the Company or securities
convertible into or exercisable or exchangeable for shares of capital stock of
the Company or obligating any Seller to sell or transfer to any Person any or
all of the Shares owned by such Seller, or any interest therein.
 
(c)           The authorized capital stock of the Company consists of 200,000
shares of common stock, no par value, of which there are presently issued and
outstanding 150 shares, all of which are owned by the Sellers as and in the
amounts set forth in Section 3.2(b) of the Schedule of Exceptions and all of
which constitute Shares hereunder.  The Company has not granted, issued or
agreed to grant, issue or make available any warrants, options, subscription
rights or any other calls, claims or commitments of any character relating to
the unissued shares of capital stock of the Company.  All of the issued and
outstanding capital stock of the Company has been duly authorized and validly
issued, is fully paid and non-assessable, and was issued in compliance with all
applicable securities Laws, and are not subject to, and immediately after the
Closing will not be subject to any option, Lien, right of rescission, right of
first refusal, right of first offer, voting agreement, voting trust, proxy,
shareholders agreement, or preemptive right.  No shares of capital stock of the
Company are subject to vesting or repurchase rights.
 
3.3           Consents and Approvals.  Except as set forth on Section 3.3 of the
Schedule of Exceptions, no consent, license, authorization or approval of,
filing or registration, declaration or filing with, or cooperation from, any
Governmental Authority or any other Person not a party to this Agreement is
necessary in connection with the execution, delivery, performance, validity and
enforceability by the Company or Sellers of this Agreement or any Transaction
Documents and the consummation by the parties of the transactions contemplated
hereby, other than such consents, licenses, authorizations, approvals, filings,
registrations, declarations or cooperation that, if not obtained, made or given,
would not, individually or in the aggregate, impair in any material respect the
ability of the Company to perform its obligations hereunder or prevent or
materially impede, interfere with, hinder or delay the consummation of the
transactions contemplated hereby.  The execution, delivery and performance under
this Agreement and the Transaction Documents, the consummation of the
transactions contemplated hereby and thereby and compliance with the terms of
this Agreement and the Transaction Documents by the Company or Sellers does not
and will not (i) violate or conflict with, result in a material breach or
termination of, result in any loss or forfeiture of rights or benefits under,
constitute a default under, or permit cancellation of, or require any notice or
consent under any Contract to which the Company is a party or any of its
properties are bound or affected or any Law applicable to the Company or by
which any of its properties are bound of affected, (ii) result in the creation
of, or require the creation of any Lien upon any of the Shares or any property
of the Company, or (iii) violate or conflict with any provision of the Company
Charter Documents.
 
 
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3.4           Financial Statements.
 
(a)           The Financial Statements were prepared in accordance with GAAP
applied on a basis consistent with prior periods (except, to the extent any such
Financial Statements are unaudited, such unaudited Financial Statements do not
contain footnotes and are subject to normal and recurring year-end adjustments,
none of which are, individually or in the aggregate, material in amount or
nature) and present fairly the financial position, assets and Liabilities of the
Company as of the dates thereof and the revenues, expenses, results of
operations and cash flows of the Company for the periods covered thereby.  The
Financial Statements are in accordance with the books and records of the
Company, and do not reflect any transactions which are not bona fide
transactions.  Except as set forth in the Balance Sheet, the Company does not
have any material Liabilities, debts, claims or obligations, whether accrued,
absolute, contingent or otherwise, whether due or to become due, other than
trade payables to third parties and accrued expenses incurred in the ordinary
course of business consistent with past practice since the Balance Sheet
Date.  A true and complete copy of the Financial Statements is attached as
Exhibit A to the Schedule of Exceptions.
 
(b)           Financial Books and Records.  The financial books and records of
the Company have been maintained in accordance with customary business practices
and fairly and accurately reflect on a basis consistent with past periods and
throughout the periods involved, (i) the consolidated financial position of the
Company and (ii) all transactions of the Company, including all transactions
between the Company, on the one hand, and a Seller on the other hand.  The
Company has not received any advice or notification from its current or past
independent accountants that the Company has used any improper accounting
practice that would have the effect of not reflecting or incorrectly reflecting
in the books and records of the Company any properties, assets, Liabilities,
revenues, expenses, equity accounts or other accounts.
 
(c)           No Undisclosed Liabilities.  Except as set forth in the Financial
Statements, the Company does not have any Liabilities (whether or not the
subject of any other representation or warranty hereunder) except for
Liabilities reflected on the Balance Sheet or that have arisen in the ordinary
course of business consistent with past practice since the Balance Sheet Date.

(d)           Projections.  Any financial projections provided by the Company or
any Seller to Purchaser in connection with Purchaser’s review of the Company
were prepared in good faith based upon assumptions believed by the Company’s
management and the Sellers to be reasonable at the time made.

 
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3.5           No Changes.  Since the Balance Sheet Date, the Company has
conducted its business in the ordinary course and in a manner consistent with
past practice, and there has not been any Material Adverse Change or event or
change (whether alone or with any other event or change) that has had or is
reasonably likely to have a Material Adverse Effect.  Since the Balance Sheet
Date, the Company has not (a) suffered any damage or destruction to, or loss of,
any of its assets or properties (whether or not covered by insurance)
individually or in the aggregate in excess of $25,000; (b) permitted the
imposition of a Lien (other than Permitted Liens) on, or disposed of, leased,
transferred, mortgaged or assigned any of its assets; (c) terminated, modified
or entered into any Material Contract or canceled, compromised, knowingly waived
or released any right or claim (or series of related rights and claims) under
any Material Contract; (d) cancelled, waived, released or otherwise compromised
any trade debt, receivable, right or claim exceeding $25,000 individually or in
the aggregate; (e) made or committed (in a binding manner) to make any capital
expenditures or capital additions or betterments in excess of $25,000
individually or in the aggregate; (f) entered into, adopted, amended (except as
may be required by Law and except for immaterial amendments) or terminated any
bonus, profit sharing, compensation, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreements, trusts, plans, funds or other arrangements for the benefit or
welfare of any director, officer or employee, or increased in any manner the
compensation or fringe benefits of any director, officer or employee or paid any
benefit not required by any existing plan and arrangement (except for normal
salary increases consistent with past practice) or entered into any contract,
agreement, commitment or arrangement to do any of the foregoing; (g) disposed of
or permitted the lapse in registration of any Intellectual Property; (h)
experienced any Material Adverse Change in its Receivables or its accounts
payable; (i) changed its accounting methods, systems, policies, principles or
practices; (j) incurred, assumed, guaranteed or discharged any Debt; (k)
modified the Company Charter Documents; (l) issued, sold or otherwise permitted
to become outstanding any capital stock, or split, combined, reclassified,
repurchased or redeemed any shares of its capital stock; (m) made any capital
investment in, any loan to, or any acquisition of the securities or assets of
any other Person other than acquisitions of inventory and supplies in the
ordinary course of business consistent with past practice; (n) failed to
maintain in full force and effect insurance policies on its properties providing
coverage and amounts of coverage comparable to the coverage and amounts of
coverage provided under its policies of insurance in effect on the Balance Sheet
Date; (o) encountered any labor union organizing activity or had any actual or
overtly threatened employee strikes, work stoppages, slowdowns or lockouts; (p)
materially modified or changed its business organization or materially and
adversely modified or changed its relationship with its suppliers, customers and
others having business relations with it; (q) entered into any Contract outside
the ordinary course of business that is or would be a Material Contract; (r)
adopted a plan or agreement of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization, or other material
reorganization; or (s) authorized, agreed, resolved or committed to any of the
foregoing.

3.6           Title to Assets.  The Company has good and marketable title to all
of its properties, interests in properties and assets, real and personal,
reflected in the Balance Sheet or acquired after the Balance Sheet Date that are
material to the conduct of the Business as currently conducted (except
properties, interests in properties and assets sold or otherwise disposed of
since the 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 leased properties and assets that are material to the conduct
of the Business as currently conducted, in each case free and clear of all Liens
other than Permitted Liens.  No Person other than the Company owns any material
assets, properties or rights relating to or used or held for use in the
Business, other than Leased Real Property.  The assets and rights of the Company
include all of the assets and rights necessary for the conduct of the Business.
 
3.7           Real Property.
 
(a)           The Company operates the Business at the Leased Real Property, and
at no other locations, other than client sites.  Except for the Leased Real
Property, the Company is not a party to any lease of any real property, whether
as lessor or as lessee, and has no ownership of or other interest in any real
property.  Section 3.7(a) of the Schedule of Exceptions lists the addresses and
the leases relating to each Leased Real Property.

 
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(b)           The Leased Real Property leases are in full force and effect and
the Company holds a valid and existing leasehold interest under such leases free
and clear of all Liens, other than Permitted Liens.  The Company is not in
material default, and no circumstances exist which would result in such default
(including upon the giving of notice or the passage of time, or both), under
such lease, and no other party to such lease has the right to terminate or
accelerate performance under or otherwise modify any of such lease, including
upon consummation of Purchaser’s acquisition of the Shares pursuant to this
Agreement. To the knowledge of the Sellers, no Person other than the Company has
any right to use, occupy or lease any of the Leased Real Property.
 
(c)           There is no pending or, to the knowledge of the Sellers,
threatened condemnation, expropriation, eminent domain or similar proceeding
affecting all or any part of the Leased Real Property, and the Company has not
received any written notice thereof.

(d)           The buildings and other structures on the Leased Real Property are
in good repair, ordinary wear and tear excepted, and fit for the purposes for
which they are presently used in all material respects.  The Company has rights
of egress and ingress with respect to each of the Leased Real Property that is
sufficient for it to conduct its business.

3.8           Personal Property.  All of the tangible assets (whether owned or
leased) used in connection with the Business, (a) are suitable for the purposes
for which such assets are presently used and are suitable for the continuing
conduct of the Business after the Closing, and (b) have been maintained and are
in good operating condition and repair (normal wear and tear excepted).
 
3.9           No Third Party Options.  There are no agreements, options,
commitments or rights with, of or to any Person (other than Purchaser) to
acquire any of the assets, properties, rights, shares or other equity interests
of the Company, and the Company is not a party to any agreement to merge into
(or have another entity merge into it) or consolidate with another entity.
 
3.10         Intellectual Property.
 
(a)           Section 3.10(a) of the Schedule of Exceptions sets forth a
complete and accurate list of all Intellectual Property owned by the Company as
of the date hereof that is registered, recorded or filed in the name of the
Company with a Governmental Authority and all applications therefor, and all
material unregistered trademarks or service marks owned by the Company and used
by the Company in the operation of the Business (“Company Registered IP”).  Each
item of Company Registered IP is (i) in compliance with all applicable legal
requirements and is current with its filing, registration and maintenance
requirements, and (ii) to the knowledge of the Sellers, valid and enforceable.
 
(b)           The Company either exclusively owns, free and clear of all Liens
(other than Permitted Liens), or has permission to use pursuant to a valid
written agreement or, to the knowledge of the Sellers, has other valid rights to
use, all Intellectual Property used or held for use in the operation of the
Business as presently conducted (collectively, “Company IP Rights”).  The
Company IP Rights comprise all of the Intellectual Property that is used in or
necessary for the operation of the Business as currently conducted.  No Person
has asserted or, to the knowledge of the Sellers, threatened to assert any
claims (i) contesting the right of the Company to use, transfer or license any
Company IP Rights or any products, processes, services or materials covered
thereby in any manner, or (ii) challenging the ownership, validity or
enforceability of any Company IP Rights.
 
 
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(c)           To the knowledge of the Sellers, the operation of the Business has
not and does not infringe or misappropriate any Intellectual Property of any
Person, and has not and does not violate the rights of any Person (including the
right to privacy or publicity) or constitute unfair competition or trade
practices under any Laws.  To the knowledge of the Sellers, no Person has
infringed or misappropriated or is infringing or misappropriating any Company IP
Rights.
 
(d)           Following the Closing, the Company will be permitted to exercise
all of the rights under the Company IP Rights to the same extent the Company
would have been able to had the transactions contemplated by this Agreement not
occurred.  All Company IP Rights are, and immediately after the Closing Date,
will be, fully transferable, alienable or licensable by the Company without
restriction and without payment of any kind to any Person, except as a result of
any independent agreements or obligations of Purchaser.  The Company has not
granted any exclusive licenses or rights of any kind in the Company IP Rights to
any Person, and the Company does not hold any rights to Company IP Rights
jointly with any third Person.
 
(e)           The Company has not entered into any Contract to settle or resolve
any action, claim or dispute with respect to any Intellectual Property.  No
Company IP Right is subject to any proceeding or outstanding decree, Order,
judgment, Contract or stipulation that restricts in any manner the use, transfer
or licensing thereof by the Company.
 
(f)           The Company has taken all actions reasonably necessary to maintain
and protect all Company IP Rights, including all confidential and proprietary
information and trade secrets pertaining thereto.  All agents, employees and
independent consultants of the Company employed or engaged in the five (5) years
prior to the date hereof who have participated in or contributed to the
development of any Intellectual Property for the Company have executed and
delivered to the Company a written assignment agreement that vests in the
Company exclusive ownership of all right, title and interest in and to any such
Intellectual Property.
 
(g)           The information technology systems used by the Company in
connection with the operation of the Business (“IT Systems”) as a whole, are
adequate and sufficient in all material respects for the conduct of the Business
as currently conducted.  The Company has taken commercially reasonable steps
consistent with industry practice to protect the IT Systems from unauthorized
access, use and damage.  The IT Systems have not suffered any material failures
or defects and have functioned consistently and accurately in all material
respects.
 
(h)           No software owned by the Company incorporates any Public
Software.  For purposes of this Agreement, “Public Software” means any software
that contains, or is derived in any manner from, in whole or in part, any
software that is distributed as freeware, shareware, open source software (e.g.,
Linux) or similar licensing or distribution models that (i) requires the
licensing or distribution of source code to licensees, (ii) prohibits or limits
the receipt of consideration in connection with sublicensing or distributing any
software, (iii) except as specifically required to be permitted by applicable
Law, allows any Person to decompile, disassemble or otherwise reverse-engineer
any software, or (iv) requires the licensing of any software to any other Person
for the purpose of making derivative works.  No software owned by the Company
has been provided or disclosed in source code form to any Person (including
without limitation, any escrow agents, employees and officers of the
Company).  To the extent the Company has provided or disclosed any such source
code, such provision or disclosure has been pursuant to a written
confidentiality agreement adequate to protect the proprietary and confidential
nature of such source code.
 
 
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3.11         Contracts.
 
(a)           All of the Material Contracts are in writing and are in full force
and effect and constitute the legal, valid and binding obligations of the
Company and, to the knowledge of the Sellers, the other parties thereto.  All of
the Material Contracts are enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and by equitable limitations on the availability of specific
remedies.  No termination notice has been delivered by the Company to any other
party or, to the knowledge of Sellers, by any other party to the Company, with
respect to any Material Contract.  As to each Material Contract, there does not
exist thereunder any breach, violation or default on the part of the Company or,
to the knowledge of the Sellers, any other party to such Material Contract, and
there does not exist any event, occurrence or condition, including the
consummation of the transactions contemplated hereby, which (with or without
notice, passage of time, or both) would constitute a breach, violation or
default thereunder on the part of the Company.  No waiver has been granted by
the Company or any of the other parties thereto under any of the Material
Contracts.  The Company has delivered or made available to Purchaser true and
complete copies of each Material Contract that Purchaser has requested.
 
(b)           Section 3.11(b) of the Schedule of Exceptions sets forth a true
and complete list of all Contracts of the following types to which a Company is
a party, by which it is bound, or which otherwise pertain to the Business of the
Company (including in each case which subsection(s) of this Section 3.11 to
which such Material Contract is responsive) (each such Contract, whether or not
so listed, is referred to as a “Material Contract”):
 
(i)         any Contract or arrangement of any kind with any employee, officer,
director, shareholder or other equity interest holder or other Persons with whom
the Company is not dealing at arm’s-length;
 
(ii)        any Contract or arrangement with a broker, advertising agency,
placement agent or other Person engaged in sales, marketing, distributing or
promotional activities, or any Contract to act as one of the foregoing on behalf
of any Person;
 
(iii)       any Contract or arrangement of any nature (A) having an aggregate
value in excess of $25,000, (B) of any value that is not terminable by the
Company at any time on notice of thirty (30) days or less or (C) is otherwise
material to the Company;
 
(iv)       any indenture, credit agreement, loan agreement, note, mortgage,
security agreement, letter of credit, loan commitment, guaranty, repurchase
agreement or other Contract or arrangement relating to the borrowing of funds,
an extension of credit or financing, pledging of assets or guarantying the
obligations of any Person;
 
 
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(v)        any Contract or arrangement involving the Company as a participant in
or an owner of a partnership, limited liability company, corporation, joint
venture, strategic alliance, or other cooperative undertaking;
 
(vi)       any Contract or arrangement involving any restrictions on the Company
or any Affiliate of the Company with respect to the geographical area of
operations where such Person may conduct business, or scope or type of business
that such Person may conduct or the solicitation of any individual or class of
individuals for employment;
 
(vii)      any Contract granting to any Person a right at such Person’s option
to purchase or acquire any asset or property of the Company (or interest
therein);
 
(viii)     any Contract for capital improvements or expenditures in excess of
$10,000 individually or $40,000 in the aggregate;
 
(ix)        any Contract for which the full performance thereof may extend
beyond ninety (90) days from the date of this Agreement;
 
(x)         any Contract not made in the ordinary course of business which is to
be performed in whole or in part at or after the date of this Agreement;
 
(xi)        any Contract or arrangement relating to management support,
facilities support or similar arrangement which, if breached, could have a
Material Adverse Effect on the Business;
 
(xii)       any Contract whereby any Person agrees (A) not to compete with the
Company or to solicit employees, clients or customers of the Company, or (B) to
maintain the confidentiality of any information of the Company;
 
(xiii)     any Contract of the Company for the provision of consulting services
of any type or nature and any arrangement for the payment of commissions, in
each case, whether by or for the Company;
 
(xiv)     any Contract (A) under which the Company is granted a right or license
to use the Intellectual Property of any Person (other than for generally
commercially available software) and (B) pursuant to which the Company has
granted any right or license to any Person in respect of Company IP Rights;
 
(xv)      any Contract evidencing or relating to any obligations of the Company
with respect to the issuance, sale, repurchase or redemption of any securities
of the Company;
 
(xvi)     all Leased Real Property leases;
 
 
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(xvii)    any Contract that obligates the Company with respect to contingent
payments of any type;
 
(xviii)   any Contract relating to any litigation or claim involving the Company
at any time during the last five (5) years or under with there are ongoing
responsibilities;
 
(xix)      any Contract relating to the acquisition or disposition of any
capital stock, all or substantially all the assets or business or product line
of any other Person; and
 
(xx)       any Government Bid or Government Contract.
 
3.12        Permits.  Section 3.12 of the Schedule of Exceptions contains a true
and complete list as of the date hereof of all Permits used or held for use by
the Company in the Business.  Except for such Permits, there are no Permits that
are necessary for the lawful operation of the Business.  The Company is in
compliance in all material respects with all requirements and limitations under
such Permits.  No employee, officer, director, shareholder, consultant, advisor
or manager of the Company owns or has any interest in any such Permit.
 
3.13        Insurance.  Section 3.13 of the Schedule of Exceptions contains a
true and complete list as of the date hereof of all policies of fire, liability,
errors and omissions, workmen’s compensation, public and product liability,
title and other forms of insurance owned or held by the Company, which
insurance, to the knowledge of the Sellers, is comprised of the types and in the
amounts customarily carried by businesses of similar size in the same industry,
and a claims history for the past three years.  All such policies are in full
force and effect and all applicable premiums, which are due and owing as of the
Closing Date, have been paid.  No notice of cancellation or termination or
increase in premiums (except for general increases in rates to which similarly
situated companies are subject) has been received with respect to any such
policy.  No insurer has cancelled or refused to renew any insurance applicable
to the Company nor has any insurer applied any additional material restrictions
to any existing insurance policy during the term of the policy or upon
renewal.  The Company has timely filed all claims for which it is seeking
payment or other coverage under any of its insurance policies.  The Company has
not made any claim against an insurance policy as to which the insurer is
denying coverage or defending the claim under a reservation of rights.  The
Company is not in default in any material respect under any insurance policy
maintained by any of them.
 
3.14         Employee Benefit Plans and Employment Agreements.
 
(a)           Section 3.14(a) of the Schedule of Exceptions contains a list as
of the date of this Agreement of each “employee benefit plan,” as defined in
Section 3(3) of ERISA and all other material employment Contracts, and employee
benefit plans, programs, policies and arrangements (including all collective
bargaining, stock purchase, stock option, compensation, deferred compensation,
pension, retirement, severance, termination, separation, vacation, sickness,
health insurance, welfare and bonus plans or Contracts) entered into, maintained
or contributed to by the Company for the benefit of continuing employees or
other service-providers (or former employees or service-providers) of the
Company or with respect to which the Company has any obligation or Liability
(collectively, the “Company Plans”).
 
 
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(b)          The Company has provided or made available to Purchaser true and
materially correct copies of each of the Company Plans (including all amendments
thereto) and all Contracts relating thereto, or to the funding thereof,
including all trust Contracts, insurance Contracts, administration Contracts,
investment management Contracts, subscription and participation Contracts, and
recordkeeping Contracts, each as in effect on the date hereof, to the extent
such Company Plans are in written form (and, as to any Company Plan that is not
in writing, a description of the material terms of such plan).  To the extent
applicable, a true and correct copy of the most recent annual report, actuarial
report, summary plan description, and Internal Revenue Service determination,
opinion, notification or advisory letter (“Determination Letter”) with respect
to each of the Company Plans has been supplied or made available to Purchaser by
the Company.
 
(c)          With respect to each of the Company Plans that is an “employee
pension benefit plan” (within the meaning of section 3(2) of ERISA):
 
(i)         no Company Plan (and no other plan currently or ever in the past
maintained, sponsored, contributed to or required to be contributed to by the
Company or any ERISA Affiliate of the Company) is or ever in the past was a
multiemployer plan (as defined in section 3(37) of ERISA), a plan subject to
title IV of ERISA, or a plan subject to the minimum funding standards of Section
412 of the Code or Section 302 of ERISA.  As used herein, the term “ERISA
Affiliate” means any Person that, together with the Company, would be deemed a
“single employer” within the meaning of Section 414(b), (c), (m) or (o) of the
Code; and
 
(ii)        each such Company Plan which is intended to be tax qualified under
section 401(a) of the Code (and each related trust which is intended to be tax
qualified under section 501(a) of the Code), is so qualified and has obtained a
currently effective favorable Determination Letter as to its qualified status
(or the qualified status of the master or prototype form on which it is
established) from the IRS covering the amendments to the Code effected by the
Tax Reform Act of 1986 and all subsequent legislation for which the IRS will
currently issue such a letter; and no event has occurred, to the Seller’s
knowledge, which would cause any such Company Plan to fail to so comply with
such requirements.
 
(d)          There are no actions, suits or claims pending or, to the knowledge
of Sellers, threatened involving any Company Plan or the assets thereof (other
than routine claims for benefits), and no audits, inquiries or proceedings
pending or, to the Seller’s knowledge, threatened by the IRS or other
Governmental Authority with respect to any Company Plan.  Each Company Plan has
been maintained and administered in all material respects in material compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations (foreign and domestic), including (without
limitation) ERISA and the Code, which are applicable to such Company Plan.  All
contributions, reserves or premium payments required to be made or accrued as of
the date hereof to the Company Plans have in all material respects been timely
made or accrued.  No “Prohibited Transaction,” within the meaning of Section
4975 of the Code or Sections 406 or 407 of ERISA and not otherwise exempt under
Section 408 of ERISA, has occurred with respect to any Company Plan.  No Company
Plan provides, or reflects or represents any Liability to provide, health or
welfare benefits with respect to any former or current employee, or any spouse
or dependent of any such employee, beyond the employee’s retirement or other
termination of employment with the Company (other than coverage mandated by Part
6 of Title I of ERISA or Section 4980B of the Code or analogous provision of
applicable U.S. state or foreign Law).
 
 
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(e)           There is no Contract or plan covering any employee or former
employee of the Company that, individually or collectively, could give rise to
the payment as a result of the transactions contemplated by this Agreement of
any amount that would not be deductible by the Company by reason of Section 280G
of the Code.  The execution of this Agreement and the consummation of the
transactions contemplated by this Agreement (alone or together with any other
event which, standing alone, would not by itself trigger such entitlement or
acceleration) will not (1) entitle any Person to any payment, forgiveness of
indebtedness, vesting, distribution, or increase in benefits under or with
respect to any Company Plan, (2) otherwise trigger any acceleration (of vesting
or payment of benefits or otherwise) under or with respect to any Company Plan,
or (3) trigger any obligation to fund any Company Plan.
 
(f)           With respect to each Company Plan that is a “nonqualified deferred
compensation plan” (as defined for purposes of Section 409A(d)(1) of the Code)
that is subject to, and not exempt from, Section 409A of the Code, (1) such plan
has been operated since January 1, 2005 in compliance with Section 409A of the
Code and all applicable IRS guidance promulgated thereunder; (2) the document or
documents that evidence each such plan have conformed to the provisions of
Section 409A of the Code and the final regulations under Section 409A of the
Code since December 31, 2008; and (3) as to any such plan in existence prior to
January 1, 2005 and not subject to Section 409A of the Code, has not been
“materially modified” (within the meaning of IRS Notice 2005-1) at any time
after October 3, 2004.  No stock option covering securities of the Company is
subject to any tax, penalty or interest under Section 409A of the Code.
 
(g)           No Company Plan is maintained outside the jurisdiction of the
United States, or covers any employee residing or working outside the United
States (any such Company Plan, a “Foreign Benefit Plan”).  With respect to any
Foreign Benefit Plans, (A) all Foreign Benefit Plans have been established,
maintained and administered in compliance in all material respects with their
terms and all applicable statutes, laws, ordinances, rules, orders, decrees,
judgments, writs, and regulations of any controlling Governmental Authority, (B)
all Foreign Benefit Plans that are required to be funded are fully funded, and
with respect to all other Foreign Benefit Plans, adequate reserves therefor have
been established on the Financial Statements, and (C) no material Liability or
obligation of the Company exists with respect to such Foreign Benefit Plans.
 
3.15         Employees.  Section 3.15 of the Schedule of Exceptions contains a
true and complete list of the names, titles, annual base compensation and target
bonuses for the current year for each director, officer, manager and employee of
the Company.  There is not currently, and during the past two years there has
been no, labor strike, picketing, dispute, slow-down, work stoppage, union
organization effort, grievance filing or proceeding, or other labor difficulty
actually pending or, to the knowledge of Sellers,  threatened against or
involving the Company.  The Company is not a party to any collective bargaining
agreement; there are no labor unions or other organizations representing any
employee of the Company; and to the knowledge of Sellers, no labor union or
organization is engaged in any organizing activity with respect to any employee
of the Company.  In the three years prior to the Closing Date, the Company has
not effectuated a “plant closing” as defined in the Worker Adjustment and
Retraining Notification Act (the “WARN Act”) (or any similar state, local or
foreign law) or a “mass layoff” as defined in the WARN Act (or any similar
state, local or foreign law) affecting any site of employment or facility of the
Company.  Neither the Company nor any Seller has received written notice that
any of the Company’s current key employees (including, without limitation, the
Sellers) intends to terminate his employment with the Company. The Company has
complied, and is presently in compliance in all material respects with all Laws
relating to employment.
 
 
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3.16         Taxes.
 
(a)           Except for current Taxes not due and payable through Closing, each
of the Company has paid to, and where necessary collected or withheld and
remitted to, the proper Governmental Authority, all Taxes that are due and
payable.
 
(b)          The Company has filed all Tax Returns which are required to be
filed and all such Tax Returns are complete and accurate in all material
respects.  All unpaid Taxes of the Company for periods through the date of the
Financial Statements are reflected on the balance sheets of the Company.  The
Company does not have any Liability for Taxes accruing after the Financial
Statements other than Taxes accrued in the ordinary course of business and which
are not yet due.
 
(c)          There is no, and there has never been any, action, suit,
investigation, audit, claim, collection or assessment pending or, to the
knowledge of the Sellers, proposed or threatened, with respect to any Tax Return
or Taxes of the Company.  No claim has ever been made by a Taxing authority in a
jurisdiction where the Company is not paying Taxes or filing Tax Returns
asserting that the Company is or may be subject to Taxes assessed by such
jurisdiction.  There are no Liens for Taxes upon the any of the assets of the
Company except Liens relating to current Taxes not yet due.
 
(d)          The Company is not (and has never been) a party to any Tax sharing
agreement, Tax indemnity agreement or Tax allocation agreement, or has assumed
the Tax Liability of any other Person under contract.
 
(e)           The Company has not been the “distributing corporation” or the
“controlled corporation” (in each case, within the meaning of Section 355(a)(1)
of the Code) with respect to a transaction described in Section 355 of the Code
(i) within the three (3)-year period ending as of the date of this Agreement, or
(ii) in a distribution that could otherwise constitute part of a “plan” or
“series of related transactions” (within the meaning of Section 355(e) of the
Code) that includes the transactions contemplated by this Agreement.
 
(f)           The Company has never been a member of an affiliated group filing
consolidated Tax Returns.  The Company does not have any actual or potential
Liability under Treasury Regulations Section 1.1502-6 (or any comparable or
similar provision of federal, state, local or foreign law), as a transferee or
successor, pursuant to any contractual obligation, or otherwise for any Taxes of
any Person.
 
(g)          There are no adjustments under Section 481 of the Code (or any
similar adjustments under any provision of the Code or the corresponding
foreign, state or local Tax laws) that are required to be taken into account by
the Company in any period ending after the Closing Date by reason of a change in
method of accounting in any taxable period ending on or before the Closing Date.
 
 
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(h)          There are no outstanding waivers or agreements extending the
statute of limitations for any period with respect to any Tax to which the
Company may be subject.
 
(i)            The Company has not engaged in a “reportable transaction,” as set
forth in Treasury Regulation Section 1.6011-4(b), or any transaction that is the
same as or substantially similar to one of the types of transactions that the
Internal Revenue Service has determined to be a tax avoidance transaction and
identified by notice, regulation, or other form of published guidance as a
“listed transaction,” as set forth in Treasury Regulation Section
1.6011-4(b)(2).
 
(j)           The Company is in compliance with all terms and conditions of all
Tax exemptions, or order of a foreign government and the transactions
contemplated by this Agreement shall not have any adverse effect on the
continued validity and effectiveness of any such Tax exemptions or orders.
 
(k)           The Company has been a validly electing S corporation within the
meaning of Sections 1361 and 1362 of the Code at all times since its inception,
and there is no basis for the revocation or other termination of the Company’s S
corporation election for Tax purposes.  The Company will not be liable for any
Tax under Section 1374 of the Code (or any similar provision of state or local
Law) in connection with the deemed sale of the assets of the Company caused by
any elections under Section 338(h)(10) (or any similar provision of state or
local Law), and the Company has not in the past 10 years acquired assets from
another corporation in a transaction in which the Company’s tax basis for the
acquired assets was determined, in whole or in part, by reference to the Tax
basis of the acquired assets (or any other property) in the hands of the
transferor.
 
(l)            No Seller holds equity in the Company that is non-transferable
and subject to a substantial risk of forfeiture within the meaning of Section 83
of the Code with respect to which a valid election under Section 83(b) of the
Code has not been made, and no payment to any Seller of any portion of the
consideration payable pursuant to this Agreement will result in compensation or
other income to such Seller with respect to which Purchaser or the Company would
be required to deduct or withhold any Taxes.
 
3.17         No Defaults or Violations.
 
(a)           The Company is not in material breach of or default under any
Material Contract, no event has occurred or circumstance exists which, with
notice or lapse of time or both, would constitute a material breach of or
default under any Material Contract, and, to the knowledge of the Sellers, no
other party to any Material Contract is in material breach of or default under
any such Material Contract.
 
(b)           The Company is not, and during the past five (5) years the Company
has not been, in violation of, in any material respect, and, to the knowledge of
the Sellers, no event has occurred or circumstance exists that (with or without
notice or lapse of time) would constitute or result in a violation in any
material respect by the Company of, or failure on the part of the Company to
comply with in any material respect, any Law that is or was applicable to it or
the conduct or operation of its business or the ownership or use of any of its
assets.
 
 
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(c)           No notice from any Governmental Authority has been received within
the past two years claiming any violation of any Law or requiring any work,
construction (other than pursuant to sales contracts with Governmental
Authorities), or expenditure, or asserting any Tax, assessment or penalty, with
respect to the Company.
 
3.18         Environmental Matters.
 
(a)           To the knowledge of the Sellers, the Company is in compliance with
all applicable Environmental Laws or Orders, which compliance includes the
possession and maintenance of all material Environmental Permits that are
necessary for the operation of the Business.
 
(b)           The Company is not a party or otherwise subject to any action,
litigation, claim, suit, mediation, arbitration, inquiry, government or other
investigation or proceeding of any nature nor, to Sellers’ knowledge, is any of
the foregoing threatened, against the Company that relates to any Environmental
Laws or Orders or any Hazardous Substance.
 
(c)           To the knowledge of Sellers, there are no material Environmental
Liabilities of the Company.
 
(d)           To the knowledge of the Sellers, there is no contamination of, and
there have been no releases or, to the knowledge of the Sellers, threatened
releases of any Hazardous Substance at any Leased Real Property or any real
property formerly owned, leased or operated by the Company (or any predecessor
of the Company), in each case, that (i) would require notification to a
Governmental Authority, investigation and/or remediation pursuant to any
Environmental Laws or Orders or (ii) could give rise to material Liabilities
pursuant to any Environmental Laws or Orders.
 
(e)           To the knowledge of the Sellers, there are no past or present
conditions, events, circumstances, facts, activities, practices, incidents,
actions, omissions or plans that may (i) interfere with or prevent continued
compliance by the Company with Environmental Laws or Orders and the requirements
of Environmental Permits or (ii) give rise to any material Liability or other
obligation under any Environmental Laws or Orders.
 
(f)           The Company (or, to the knowledge of the Sellers, any predecessor
of the Company) has not used any waste disposal site, or otherwise disposed of,
transported, or arranged for the transportation of, any Hazardous Substances to
any place or location (i) in violation of any Environmental Laws or Orders, or
(ii) in a manner that has given or could reasonably be expected to give rise to
material Liabilities pursuant to any Environmental Laws or Orders.
 
 
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(g)           There are no claims, notices (including notices that the Company
(or, to the knowledge of the Sellers, any predecessor of the Company) or any
Person whose Liability has been retained or assumed contractually by the Company
is or may be a potentially responsible person or otherwise liable in connection
with any site or other location containing Hazardous Substances or used for the
storage, handling, treatment, processing, disposal, generation or transportation
of Hazardous Substances), civil, criminal or administrative actions, suits,
hearings, investigations, inquiries or proceedings pending or, to the knowledge
of the Sellers, threatened that are based on or related to any environmental
matters relating to the Business or the Company.
 
(h)           The Company has delivered or made available to Purchaser true and
complete copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by the Company pertaining to environmental
matters.
 
           3.19          Litigation.  There are no actions, litigation, claims,
suits, mediations, arbitrations, inquiries, government or other investigations
or proceedings of any nature pending or, to the Sellers’ knowledge, threatened,
involving the Company, its properties or the Business or, with respect to the
operation of the Business, any of its officers, directors, employees,
consultants, advisors or shareholders, before any Governmental Authority, or
that have been settled, dismissed or resolved since January 1, 2010.  The
Company is not subject to any Order arising from any litigation.
 
3.20         Related Parties.
 
(a)           Neither Seller has any direct or indirect interest in any other
Person which conducts a business similar to the Business, or in any customer or
supplier of the Company.
 
(b)           To the knowledge of the Sellers, no officer, director, employee,
consultant, shareholder of the Company or any Affiliate of any of the foregoing
(a) has any interest in any property (real, personal, or mixed and whether
tangible or intangible), used in or pertaining to the Business, (b) except for
the ownership of less than 2% of the outstanding common stock of a publicly-held
corporation, owns of record or as a beneficial owner, an equity interest or any
other financial or a profit interest in a Person that has had business dealings
or a material financial interest in any transaction with the Company or (c) is a
party to any Contract (except for employment and similar agreements), including
with respect to compensation or remuneration to be paid to such officer,
director, shareholder or Affiliate in connection with this Agreement or the
transactions contemplated hereby.
 
3.21         Receivables.  All Receivables represent bona fide, current and
valid obligations arising from sales actually made or services actually
performed in the ordinary course of business.  The Company has not received
written notice from any obligor of any Receivable that such obligor is refusing
to pay or contesting payment of amounts in excess of $5,000 in any individual
case, or $20,000 in the aggregate, which has not been resolved prior to the date
hereof, other than returns in the ordinary course of business under and in
accordance with any Contract with any obligor of any Receivable.
 
3.22         Brokers. None of the Company or any of the Company’s directors,
officers, employees, consultants, advisors or agents, nor any Seller, has
employed or incurred any Liability to any broker, finder or agent with respect
to this Agreement, the Transaction Documents and the transactions contemplated
hereby.
 
 
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3.23         Accuracy of Information.  None of the representations or warranties
of the Company or the Sellers herein (including the Schedule of Exceptions), any
statements of the Company or any of the Sellers in any certificate or other
document provided to Purchaser in connection with the Closing or any other
information supplied by or on behalf of the Company or the Sellers (a) to any
Person for inclusion in any document or application filed with any Governmental
Authority having jurisdiction over or in connection with the transactions
contemplated by this Agreement or (b) to Purchaser, its agents or
representatives in connection with this Agreement and the transactions
contemplated hereby or the negotiations leading up to this Agreement, did
contain, at the respective times such information was delivered, or will
contain, if delivered after the date hereof, any untrue statement of a material
fact, or, to the knowledge of the Sellers, omitted or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
 
3.24         Disclaimer of Additional Representations and Warranties.  EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY EXPRESSLY SET FORTH IN
THIS AGREEMENT, NEITHER THE COMPANY NOR ANY OTHER PERSON MAKES ANY EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY ON BEHALF OF THE COMPANY IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED HEREBY.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each Seller, severally and not jointly, represents and warrants to Purchaser as
follows:
 
4.1           Authorization; Investment Intent; Ownership of Shares.
 
(a)           Such Seller has full power, authority and capacity to enter into
this Agreement and the Transaction Documents to which such Seller is a party,
and to consummate the transactions contemplated hereby and thereby.  This
Agreement and each Transaction Document to which such Seller is a party
constitutes, or upon execution and delivery will constitute, a valid and legally
binding obligation of such Seller, enforceable against such Seller in accordance
with their respective terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar Laws affecting the
enforcement of creditors’ rights or by general principles of equity, whether
such enforceability is considered in a court of law, a court of equity or
otherwise.  The Shares held by such Seller do not constitute community property
under applicable Laws.
 
(b)           Such Seller is the sole record and beneficial owner of the Shares
set forth opposite such Seller’s name in Section 3.2(b) of the Schedule of
Exceptions, all of which Shares are owned free and clear of all Liens, and
neither such Shares nor any interest therein have been sold, pledged, assigned
or otherwise transferred except pursuant to this Agreement.  There are no
outstanding subscriptions, rights, options, warrants or other agreements
obligating such Seller to sell or transfer to any third person any or all of the
Shares owned by such Seller, or any interest therein.  Following the Closing,
Purchaser shall own one-hundred percent (100%) of the issued and outstanding
shares of capital stock of the Company.  This Agreement, together with any stock
powers or assignments delivered at the Closing by the Sellers to Purchaser, are
sufficient to transfer to Purchaser the entire right, title and interest, legal
and beneficial, in the Shares, free and clear of all Liens.
 
 
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4.2           Consents and Approvals.  Except as set forth on Schedule 4.2, no
consent, license, authorization or approval of, filing or registration,
declaration or filing with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery or performance by such Seller of this Agreement or any
Transaction Document to which such Seller is a party or the validity and
enforceability of this Agreement or any Transaction Document to which such
Seller is a party with respect to such Seller, or the consummation of the
transactions contemplated by this Agreement or any such Transaction Document by
such Seller.  The execution, delivery and performance of this Agreement and the
Transaction Documents, the consummation of the transactions contemplated hereby
or thereby and compliance with the terms of this Agreement and the Transaction
Documents by such Seller does not and will not (i) violate or conflict with,
result in a material breach or termination of, result in any loss or forfeiture
of rights or benefits under, constitute a default under, or permit cancellation
of, or require any notice or consent under any Contract to which the Company is
a party or any of its properties are bound or affected or any Law applicable to
the Company or by which any of its properties are bound of affected, or (ii)
result in the creation of, or require the creation of any Lien upon any of the
Shares.
 
4.3           Securities Laws. Jadevaia (and any other Seller electing to
receive shares pursuant to Section 2.3(d) (Jadevaia and such Sellers, if any,
collectively, the “Equity Recipients”)   is an “accredited investor” within the
meaning of Rule 501 of Regulation D of the Act.  Such Equity Recipient is
acquiring shares of Purchaser Common Stock pursuant to this Agreement not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and such Equity Recipient has no present intention of selling, granting
any participation or otherwise distributing the same.  Such Equity Recipient
understands that the shares of Purchaser Common Stock to be issued to him
pursuant hereto are “restricted securities” under the U.S. federal securities
laws inasmuch as they are being acquired from Purchaser in a transaction not
involving a public offering and that under such laws and applicable regulations,
such securities may be resold without registration only in certain limited
circumstances. “Equity Recipient” as used in this Section 4.3 shall include any
transferee or assignee of shares of Purchaser Common Stock issued pursuant to
this Agreement.
 
4.4           Disclaimer of Additional Representations and Warranties.  EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER EXPRESSLY SET FORTH IN THIS
AGREEMENT, NETHER THE SELLER NOR ANY OTHER PERSON MAKES ANY EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY ON BEHALF OF THE SELLER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY. THIS SECTION 4.4 DOES NOT LIMIT THE SELLERS’
INDEMNIFICATION OBLIGATIONS IN ARTICLE XI HEREOF.
 
 
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ARTICLE V
 
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Company and each Seller as follows:
 
5.1           Due Incorporation.  Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Delaware with all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being owned, leased, operated and conducted.  The
Company is duly licensed or qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the nature of the properties
owned, leased or operated by it or the business conducted by it requires such
licensing or qualification, except where the failure to be so qualified would
not have a material adverse effect on Purchaser and its subsidiaries, taken as a
whole.
 
5.2           Due Authorization.  Purchaser has full power and authority to
enter into this Agreement and the Transaction Documents and to consummate the
transactions contemplated hereby and thereby.  The execution, delivery and
performance by Purchaser of this Agreement have been duly and validly approved
by all necessary corporate action and no further corporate action is
necessary.  Purchaser has duly and validly executed and delivered this
Agreement.  This Agreement and the Transaction Documents constitute the legal,
valid and binding obligations of Purchaser, enforceable in accordance with their
respective terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in effect
which affect the enforcement of creditors’ rights generally or (b) equitable
limitations on the availability of specific remedies.
 
5.3           Consents and Approvals.  No consent, authorization or approval of,
filing or registration with, or cooperation from, any Governmental Authority or
any other Person not a party to this Agreement is necessary in connection with
the execution, delivery and performance by Purchaser of this Agreement and the
Transaction Documents and the consummation by Purchaser of the transactions
contemplated hereby or thereby, except as have been obtained or will be obtained
prior to the Closing.  The execution, delivery and performance by Purchaser of
this Agreement do not (i) violate or conflict with, result in a breach or
termination of, constitute a default under, or permit cancellation of any
material Contract to which Purchaser is a party or to which any of its assets is
subject, (ii) violate or conflict with any provision of Purchaser’s certificate
of incorporation or bylaws, (iii) result in any breach or termination of, or
constitute a default under, or constitute an event which notice or lapse of
time, or both, would become a default under, or result in the creation of any
Lien upon any asset of Purchaser under, or create any rights of termination,
cancellation or acceleration in any Person or entity under any material Contract
or violate any Order, to which Purchaser is a party or by which Purchaser or its
assets, business or operations receive benefits, or result in the loss or
adverse modification of any material license, franchise, Permit or other
authorization granted to or otherwise held by Purchaser that is material or
otherwise held by Purchaser that is material to the business or financial
condition of Purchaser, in any such case as would have a material adverse effect
on Purchaser and its subsidiaries taken as a whole or as would be reasonably
likely to prevent Purchaser from completing the purchase of the Shares
hereunder.
 
5.4           Legal Proceedings.  There are no legal, administrative, arbitral
or other actions, claims, suits or proceedings or investigations instituted or
pending or, to the knowledge of Purchaser, threatened against Purchaser, or any
subsidiary of Purchaser, or against any property, asset, or rights or interest
of Purchaser, in each case that would be reasonably likely to prevent Purchaser
from completing the purchase of the Shares hereunder.
 
 
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5.5           Brokers. None of Purchaser or any of Purchaser’s directors,
officers, employees, consultants, advisors or agents has employed or incurred
any Liability to any broker, finder or agent with respect to this Agreement, the
Transaction Documents and the transactions contemplated hereby.
 
ARTICLE VI

COVENANTS
 
6.1           Preservation of Business.  During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, the Company agrees and the Sellers agree to use their reasonable
efforts to cause the Company (in each case except to the extent expressly
contemplated by this Agreement or as consented to in writing by Purchaser) to
carry on the Business in the usual, regular and ordinary course in substantially
the same manner as heretofore conducted, to pay its debts and Taxes when due, to
pay or perform other obligations when due, and to use all reasonable efforts
consistent with past practice to preserve intact its present business
organization, 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 business shall be materially unimpaired
at the Closing Date.  Without limiting the foregoing, except as expressly
contemplated by this Agreement, the Company shall not cause or permit any of the
following without the prior written consent of Purchaser:
 
(a)           Charter Documents.  Cause or permit any amendments to the Company
Charter Documents;
 
(b)           Dividends; Changes in Capital Stock.  Declare or pay any dividends
on or make any other distributions (whether in cash, stock or property) in
respect of any of its capital stock, or split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
repurchase or otherwise acquire, directly or indirectly, any shares of its
capital stock except from former employees, directors and consultants in
accordance with agreements providing for the repurchase of shares in connection
with any termination of service to the Company;
 
(c)           Material Contracts; Other Activities.  Enter into any commitment
or agreement not in the ordinary course of business or any material Contract
(including any Contract that would have been a Material Contract if in existence
on the date hereof), or violate, amend or otherwise modify or waive any of the
terms of any of its material Contracts (including Material Contracts) or
otherwise engage in any activities or transactions that are outside the ordinary
course of its business and consistent with past practice;
 
 
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(d)          Issuance of Securities.  Issue, deliver or sell or authorize or
propose the issuance, delivery or sale of, or purchase or propose the purchase
of, any shares of its capital stock or securities convertible into or
exercisable or exchangeable for, or subscriptions, rights, warrants or options
to acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible, exercisable or exchangeable
securities, including the grant of options pursuant to a stock option plan;
 
(e)           Intellectual Property.  Transfer to any person or entity any
rights to the Company’s Intellectual Property, other than non-exclusive licenses
to customers in the ordinary course of business consistent with past practices;
 
(f)           Exclusive Rights.  Enter into or amend any agreements pursuant to
which any other party is granted exclusive marketing or other exclusive rights
of any type or scope with respect to any of its products or technology;
 
(g)          Dispositions.  Sell, lease, license or otherwise dispose of or
encumber any of its properties or assets;
 
(h)          Indebtedness.  Incur any Debt in excess of $100,000 or guarantee
any Debt or issue or sell any debt securities in excess of $100,000 or guarantee
any debt securities of others;
 
(i)            Leases.  Enter into any lease with aggregate payment obligations
in excess of $10,000;
 
(j)            Payment of Obligations.  Pay, discharge or satisfy in an amount
in excess of $5,000 in any one case or $25,000 in the aggregate, any claim,
Liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise) arising other than in the ordinary course of business, other than
the payment, discharge or satisfaction of Liabilities reflected or reserved
against in the Balance Sheet;
 
(k)           Capital Expenditures.  Make any capital expenditures, capital
additions or capital improvements except in the ordinary course of business and
consistent with past practice;
 
(l)            Insurance.  Materially reduce the amount of any insurance
coverage provided by existing insurance policies;
 
(m)          Termination or Waiver.  Terminate or waive any right of substantial
value;
 
(n)           Employee Benefit Plans; New Hires; Pay Increases.  Adopt or amend
any employee benefit or stock purchase or option plan, enter into any employment
Contract, or hire any new officer-level employee, pay any special bonus or
special remuneration to any employee or director (except payments made pursuant
to written agreements outstanding on the date hereof and that have been
delivered to Purchaser prior to the date hereof), or increase the salaries or
wage rates of any employee;
 
(o)           Severance Arrangements.  Grant any severance or termination pay to
any director, officer or other employee;
 
 
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(p)           Lawsuits.  Commence a lawsuit other than (i) for the routine
collection of bills, or (ii) 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 (iii) for breach of this Agreement;
 
(q)          Acquisitions.  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 Person or division or business thereof,
or otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to the Company;
 
(r)           Taxes.  Make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, file any material Tax
Return or any amendment to a material Tax Return, enter into any closing
agreement, settle any material claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
material claim or assessment in respect of Taxes;
 
(s)           Notices.  Fail to give all material notices and other information
required to be given, if any, to the employees of the Company, any collective
bargaining unit representing any group of employees of the Company, and any
applicable government authority under the WARN Act, the National Labor Relations
Act, the Internal Revenue Code, the Consolidated Omnibus Budget Reconciliation
Act, and other applicable Law in connection with the transactions provided for
in this Agreement;
 
(t)            Revaluation.  Revalue any of its assets, including without
limitation writing down the value of inventory or writing off notes or
Receivables other than in the ordinary course of business;
 
(u)           Obligations.  Fail to pay or otherwise satisfy its material
monetary obligations as they become due, except such as are being contested in
good faith; or
 
(v)           Other.  Take or agree in writing or otherwise to take, any of the
actions described in (a)-(u) above, or any action that would cause a material
breach of its representations or warranties contained in this Agreement or
prevent it from performing or cause it not to perform its covenants hereunder or
result in the failure of any closing condition hereunder.
 
6.2           Supplemental Information.  None of the Sellers or the Company
shall take any action or fail to take any action which, from the date hereof
through the Closing, would cause or constitute a breach of any of the
representations, warranties, agreements or covenants of the Sellers or the
Company set forth in this Agreement or cause such representations, warranties,
agreements or covenants to be inaccurate at the Closing.  From time to time
prior to the Closing, each Party shall promptly (and in any event within 24
hours) disclose in writing to the other Parties any matter (i) occurring after
the date hereof, or (ii) which such Party becomes aware of after the date
hereof, which, if existing and known on the date hereof, would have been
required to be disclosed on the Schedule of Exceptions or which would render
inaccurate any of the representations and warranties set forth in Article III,
Article IV or Article V hereof (each such disclosure referred to herein as a
“Supplement”).  However, no Supplement provided pursuant to clause (ii) of this
Section 6.2 shall be deemed to cure any prior existing breach of any
representation, warranty or covenant in this Agreement nor shall such Supplement
be deemed to amend the Schedule of Exceptions with respect to any prior breach
without the written consent of Purchaser; provided, however that Sellers shall
be permitted to provide a Supplement pursuant to clause (ii) of this Section 6.2
at any time up to two weeks following the date of this Agreement which will be
deemed to amend the Schedule of Exceptions with respect to updates or additions
which are approved by prior written consent of Purchaser.  A Supplement provided
pursuant to clause (i) of this Section 6.2 shall be deemed to amend the Schedule
of Exceptions.
 
 
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6.3           Investigation.  No information or knowledge obtained in any
investigation by Purchaser pursuant to this Agreement or otherwise, whether
conducted prior to or after the date hereof, shall affect or be deemed to modify
any representation or warranty of the Company or any Seller contained herein or
the right of Purchaser to rely thereon, Purchaser’s rights under Article XI, or
the conditions to the obligations of the Parties at the Closing.

6.4           Confidentiality; Noncompetition; Non-solicitation.
 
(a)           From and after the Closing, no Seller shall use for such Seller’s
own benefit or the benefit of any Person other than Purchaser and its
subsidiaries (including the Company) or divulge or convey to any Person (other
than Purchaser and its subsidiaries (including the Company), any Business
Confidential Information.

(b)           Each Seller agrees and acknowledges that (i) such Seller holds
certain competitive advantages in the marketplace which are valuable to
Purchaser, (ii) the Business is geographically diverse in scope, in that the
Company has served clients located in various areas of the United States, (iii)
the provisions of this Section 6.4 are reasonable in scope and duration and are
reasonably designed to protect the goodwill and value of the Company and (iv)
each Seller’s agreement to this Section 6.4 is a condition to Purchaser entering
into this Agreement and agreeing to purchase the Shares for the consideration
set forth herein.
 
(c)           For a period of thirty-six (36) months after the Closing, other
than as an employee of Purchaser or any subsidiary of Purchaser (including the
Company), no Seller shall use Business Confidential Information or otherwise,
directly or indirectly, on such Seller’s own behalf or on behalf or for the
benefit of any other Person, (i) solicit the trade or business of, or trade with
or perform services for, any Person who is listed on Schedule 6.4(c) (which
schedule, to the Seller’s knowledge, contains at a minimum all current clients
or customers of the Company and clients or customers of the Company at any time
in the last three years), for purposes of selling any product or performing any
service that the Company currently sells or provides or (ii) solicit or induce
any person who is then an employee of Purchaser or any subsidiary of Purchaser
(including the Company) to leave the employ of such entity for any reason
whatsoever.
 
 
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6.5           Market Stand-off.  Each Equity Recipient hereby agrees that,
during the period of duration specified by Purchaser and an underwriter of
shares of common stock or other securities of Purchaser, following the effective
date of the registration statement for the IPO, he shall not, to the extent
requested by Purchaser and such underwriter, directly or indirectly sell, offer
to sell, contract to sell (including, without limitation, any short sale),
pledge, grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of Purchaser
(including any shares of Purchaser Common Stock issued to such Equity Recipient
pursuant to this Agreement) held by such Equity Recipient; provided, however,
that:
 
(1)           all officers, directors and one percent (1%) and greater
shareholders of Purchaser enter into similar agreements; and
 
(2)           such market stand-off time period shall not exceed 180 days (or
such longer period as is required by such underwriter to allow its research
analysts to issue or publish research reports under applicable rules of FINRA or
similar rules or regulations, such additional period not to exceed thirty-six
(36) days).
 
Each Equity Recipient further agrees that he will, at the request of Purchaser
or an underwriter of Purchaser’s securities, in connection with the IPO enter
into the underwriter’s standard form of lock-up agreement provided that the
lock-up agreement expires no later than the date described in clause (2)
above.  In order to enforce the foregoing covenants, Purchaser may impose stop
transfer instructions with respect to the securities of such Equity Recipient
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.
 
6.6           Public Announcement.  Except for public announcements or press
releases that are required by SEC disclosure laws concerning the proposed
purchase and sale transactions herein contemplated, no public announcement or
press release announcing such transactions will be made without the joint
written consent of Purchaser and the Sellers.  Purchaser and the Sellers shall
cooperate on the form, content, timing and manner of any such announcement.
 
6.7           RESERVED.
 
6.8           Access.  The Company and the Sellers will permit representatives
of Purchaser from and after the date hereof up and through Closing to have full
access at all reasonable times to the books, accounts, records, properties,
operations, facilities, clients, customers, creditors, suppliers and personnel
pertaining to the Company or the Business, and will furnish Purchaser with such
financial and operating data concerning the Company or the Business as Purchaser
shall from time to time reasonably request.
 
6.9           Transition and Cooperation.  From and after the Closing, (a) the
Sellers shall provide reasonable cooperation to transition to Purchaser the
control and enjoyment of the Business and the Company; and (b) the Sellers shall
promptly deliver to Purchaser all correspondence, papers, documents and other
items and materials received by either Seller or found to be in the possession
of either Seller which pertain to the Company or the Business.

 
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6.10         Termination of 401(k) Plan.  If so requested by Purchaser, the
Company will adopt, or will cause to be adopted, all necessary corporate
resolutions to terminate any 401(k) Plan sponsored or maintained by the Company,
effective as of no later than one day prior to the Closing (but such termination
may be contingent upon the Closing).  Immediately prior to such termination, the
Company will make all necessary payments to fund the contributions: (i)
necessary or required to maintain the tax-qualified status of any 401(k) Plan;
(ii) for elective deferrals made pursuant to the 401(k) Plan for the period
prior to termination; and (iii) for employer matching contributions (if any) for
the period prior to termination.  For this purpose, the term “401(k) Plan” means
any plan intended to be qualified under Code Section 401(a) which includes a
cash or deferred arrangement intended to qualify under Code Section 401(k).  The
Company shall provide Purchaser with a copy of resolutions duly adopted by the
Company’s board of directors so terminating any such 401(k) Plan.  In the event
that termination of the Company’s 401(k) Plan would reasonably be anticipated to
trigger liquidation charges, surrender charges or other fees (other than
ordinary administrative fees in connection with such termination), then the
Company shall take such actions as are necessary to reasonably estimate the
amount of such charges and/or fees and provide such estimate in writing to
Purchaser prior to the Closing Date.
 
6.11         Tax Cooperation.  After the Closing, the Sellers shall cooperate
fully with Purchaser and the Company in the preparation of all Tax Returns and
shall provide to Purchaser and the Company any records and other information
reasonably requested by such Persons in connection therewith.  The Sellers shall
cooperate fully with Purchaser and the Company in connection with any Tax
investigation, audit or other proceeding.  After the Closing, Purchaser and the
Company shall cooperate with each Seller in the preparation of any Tax Return of
a respective Seller and shall provide to such Seller any records and other
information reasonably requested by such Seller in connection therewith.  The
Purchaser and the Company shall cooperate fully with each Seller in connection
with any Tax investigation, audit or other proceeding.
 
6.12         Section 338(h)(10) Election.
 
(a)           At the election of Purchaser, the Sellers and Purchaser shall make
a timely, effective, and irrevocable election under Section 338(h)(10) of the
Code and under any comparable statutes in any other jurisdiction with respect to
the Company (collectively, the “Section 338(h)(10) Elections”) and shall file
such Section 338(h)(10) Elections in accordance with applicable
regulations.  The Sellers and Purchaser shall cooperate in all respects for the
purpose of effectuating the Section 338(h)(10) Elections, including the
execution and filing of any required Tax Returns and the grant of consent to the
Section 338(h)(10) Elections by the Sellers.  Without limiting the foregoing,
Purchaser and the Sellers shall each execute a Form 8023 with respect to the
Company at the Closing, which forms shall be timely filed by Purchaser.  Sellers
shall be responsible for all Taxes imposed on the Company or any Seller as a
result of making the Section 338(h)(10) Elections.
 
(b)           If Purchaser elects to make the Section 338(h)(10) Elections, then
within ninety (90) days after the Closing Date, Purchaser and the Sellers shall
mutually agree to the allocation of the Aggregate Deemed Sales Price (as such
term is defined in Treasury Regulation Section 1.338-4) among the assets of the
Company in accordance with Treasury Regulations Sections 1.338-6 and
1.338-7.  The allocation shall be in accordance with the fair market value of
the acquired assets as provided in Section 1060 of the Code and as mutually
agreed to by Purchaser and the Sellers.  The agreed to allocation shall be
binding on the parties, and all Tax Returns filed by Purchaser and Sellers shall
be prepared consistently with such allocation, and none of them shall take a
position on any Tax Return or other form or statement contrary to such
allocation.
 
 
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(c)           The Company and the Sellers will not revoke the Company’s election
to be treated as an S corporation.  The Company and the Sellers will not take or
allow any action, other than the issuance of Purchaser Common Stock pursuant to
this Agreement, that would result in the termination of the Company’s status as
a validly electing S corporation within the meaning of Sections 1361 and 1362 of
the Code.
 
(d)           If the Purchaser elects to make the Section 338(h)(10) Elections,
the Purchaser shall pay to each Seller the excess (such excess the “Additional
338 Taxes”) of (i) any Tax liability of such Seller incurred from the
transactions contemplated hereunder resulting from the Section 338(h)(10)
Elections, over (ii) the Tax which would have been incurred by such Seller from
the transactions contemplated hereunder if the Section 338(h)(10) Elections had
not been made.
 
6.13         Gross-Up for Additional for Tax Liability.  If the Closing Date
occurs any time after calendar year 2012, Parent shall pay to each Seller an
additional amount (the “Gross-Up Payment”) equal to the amount necessary such
that after payment by such Seller of all Additional Post-2012 Taxes and the
Additional 338 Taxes (if any) on the Purchase Price and the Gross-Up Payment,
each Seller would retain an amount of such Purchase Price and the Gross-Up
Payment equal to the amount of such Purchase Price that such Seller would have
retained if such Purchase Price had been paid and taxable to such Seller during
calendar year 2012 at the federal, state and local income and gains tax rates
applicable to such Seller during 2012, had no Section 338(h)(10) Elections  been
made (if any were made) and had there had been no Gross-Up Payment.  For
purposes of this Section 6.13, “Additional Post-2012 Taxes” with respect to each
Seller shall mean the excess of (i) all federal, state and local income and
gains tax that are payable by such Seller with respect to the year of the
Closing on the Purchase Price and the Gross-Up Payment, over (ii) all federal,
state and local income and gains tax that would have been payable by such Seller
if Closing occurred during calendar year 2012, if no Section 338(h)(10)
Elections  had been made (if any were made) and if no Gross-Up Payment had been
made.  Each Seller shall provide a detailed calculation (with supporting
documentation) of any Additional Post-2012 Taxes to Parent by the later of
thirty (30) days following the Closing and April 15, 2013.  Such calculation
shall be promptly reviewed and reasonably approved by Parent, and each Seller’s
Gross-Up Payment shall then be promptly paid to such Seller.  The Gross-Up
Payment shall be treated as additional purchase price consideration for federal,
state and local income and gains tax purposes.
 
ARTICLE VII

POST CLOSING OPERATIONS

7.1          Purchaser Obligations.  Purchaser and the Sellers recognize that
decisions made in the management of the Business by Purchaser after the Closing
may affect the Earnout Payment.  Each Seller acknowledges and agrees that after
the Closing, Purchaser will manage the Business with a view to maximizing the
long-term value of Purchaser taken as a whole with its subsidiaries as
determined by Purchaser and not to maximize the Earnout Payment during the
Earnout Period.  Neither Purchaser nor any of its officers, employees, directors
or shareholders or other Affiliates will owe any duty to any Seller or any
Affiliate of any Seller to manage Purchaser (including its subsidiaries), the
Company or the Business in such a way as to maximize the Earnout
Payment.  Notwithstanding the foregoing, during the Earnout Period, (a)
Purchaser shall manage the ongoing business in good faith and shall not
intentionally take any action or fail to take any action primarily for the
purpose of reducing or eliminating the Earnout Payment, (b) the Company shall
operate the Business independently from Purchaser’s other businesses and
subsidiaries and (c) subject to the principles in the other sentences of this
Section 7.1 and Purchaser’s right to manage the Company and the Business
accordingly, Purchaser shall use its good faith efforts to manage the Company
and the Business substantially in the same manner as they were managed prior to
the Closing (and, to the extent any Seller is then an officer of the Company,
permit such Seller(s) to do the same.  Without limiting the generality of the
foregoing provisions of this Section 7.1, the parties agree that Purchaser’s
consideration of and decisions made in light of normal business consideration
factors, such as profit margins, costs of marketing and sales activities,
commercial feasibility, market and technology developments, market acceptance,
business opportunities, company resources, competition and competitive
advantages and disadvantages, and economic conditions, shall constitute
management of the Business by Purchaser in good faith.

 
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ARTICLE VIII

CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

The obligations of Purchaser under Article II of this Agreement are subject to
the satisfaction of the following conditions precedent on or before the Closing,
unless waived in writing by Purchaser in its sole discretion:
 
8.1           Warranties True.  The representations and warranties of the
Company and the Sellers contained herein shall have been true and correct in all
respects on and as of the date of this Agreement; and, the representations and
warranties of the Company and the Sellers contained herein shall be true and
correct in all material respects on and as of the Closing (except in the case of
any representation or warranty which itself is qualified by materiality or
Material Adverse Effect or Material Adverse Change, which representation and
warranty must be true and correct in all respects).
 
8.2           Compliance with Covenants.  The Company and Sellers shall have
performed and complied in all material respects with all of their respective
covenants, obligations and agreements contained in this Agreement to be
performed by them on or prior to the Closing Date.
 
8.3           Consents; Approvals.  Purchaser shall have received written
evidence to the satisfaction of Purchaser that all consents and approvals of any
Governmental Authorities or any other Persons required, if any, for the Sellers’
consummation of the transactions contemplated hereby and the ownership of the
Company and operation of the Business by Purchaser resulting therefrom have been
obtained by the Sellers and/or the Company.
 
8.4           No Action.  No Order of any court or Governmental Authority shall
have been entered that enjoins, restrains or prohibits this Agreement or the
consummation of the transactions contemplated by this Agreement.  No
governmental action shall be pending or threatened that seeks to enjoin,
restrain, prohibit or obtain damages with respect to this Agreement or the
complete consummation of the transactions contemplated by this Agreement.  No
governmental investigation shall be pending or threatened that might result in
any such Order, suit, action or proceeding.
 
 
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8.5           Closing Deliveries.  Purchaser shall have received, in form and
substance reasonably satisfactory to Purchaser, such agreements, documents,
instruments and certificates as shall be reasonably requested by Purchaser to
consummate the transactions contemplated hereby to and convey to Purchaser all
of the Shares as contemplated herein, including the following duly executed
instruments:
 
(a)           all consents listed in Section 3.3 of the Schedule of Exceptions;
 
(b)           a good standing certificate for the Company, dated within five (5)
days of the Closing Date, from the State of New Jersey and each other State
where the Company is or is required to be qualified to do business;
 
(c)           stock certificates relating to the Shares duly endorsed for
transfer to Purchaser or accompanying duly executed and delivered stock powers
effecting the same;
 
(d)           a certificate of the Company’s Secretary’s certifying as to
resolutions adopted by the Company’s Board of Directors approving the
transactions described herein; and
 
(e)           a Release duly executed and delivered by each Seller;
 
(f)           the Escrow Agreement duly executed and delivered by each Seller;
and
 
(g)           the Transition Services Agreement duly executed and delivered by
the Company, Integration Partners Corporation and each Seller.
 
8.6           Participation in the Closing.  Each Seller shall have proceeded
with the Closing such that at the Closing, Purchaser shall own all of the
outstanding shares of capital stock of the Company.
 
8.7           No Bankruptcy; Material Adverse Effect.  The Company shall not
have entered, or have entered against it, an Order of relief under the
Bankruptcy Code, and there shall not have occurred any Material Adverse Effect
or Material Adverse Change.
 
8.8           Resignation.  Each director of the Company shall have resigned as
a director effective immediately prior to the Closing.
 
8.9           Minimum Closing Cash.  The Closing Cash shall be at least
$500,000.
 
 
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ARTICLE IX

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS

The obligations of the Sellers under Article II of this Agreement are subject to
the satisfaction of the following conditions precedent on or before the Closing,
unless waived by the Sellers:
 
9.1           Warranties True.  The representations and warranties of Purchaser
contained herein shall have been true and correct in all respects on and as of
the date of this Agreement; and, the representations and warranties of Purchaser
contained herein shall be true and correct in all material respects on and as of
the Closing (except in the case of any representation or warranty which itself
is qualified by materiality or material adverse effect or material adverse
change, which representation and warranty must be true and correct in all
respects).
 
9.2           Compliance with Covenants.  Purchaser shall have performed and
complied in all material respects with all of its covenants, obligations and
agreements contained in this Agreement to be performed by it on or prior to the
Closing Date.
 
9.3           No Action.  No Order of any court or Governmental Authority shall
have been entered that enjoins, restrains or prohibits this Agreement or the
consummation of the transactions contemplated by this Agreement.  No
governmental action shall be pending or threatened that seeks to enjoin,
restrain, prohibit or obtain damages with respect to this Agreement or the
complete consummation of the transactions contemplated by this Agreement.  No
governmental investigation shall be pending or threatened that might result in
any such Order, suit, action or proceeding.
 
9.4           Closing Deliveries.  The Sellers shall have received the following
duly executed instruments:
 
(a)           a good standing certificate for Purchaser, dated within five (5)
days of the Closing Date, from the State of Delaware and each other State where
Purchaser is or is required to be qualified to do business;
 
(b)           a certificate of Purchaser’s Secretary certifying as to
resolutions adopted by the Board of Directors of Purchaser approving the
transactions described herein;
 
(c)           the Escrow Agreement duly executed and delivered by Purchaser; and
 
(d)           the Transition Services Agreement duly executed and delivered by
Purchaser.
 
9.5           No Bankruptcy.  Purchaser shall not have entered, or have entered
against it, an Order of relief under the Bankruptcy Code.
 
9.6           Purchaser Common Stock Issuances.  Purchaser shall have issued to
each of Graf and Nahabedian an aggregate number of shares of Purchaser Common
Stock equal to the quotient obtained by dividing (A) $100,000, by (B) the Common
Stock Price (rounded to the nearest whole share of Purchaser Common Stock).
 
 
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ARTICLE X

TERMINATION
 
10.1         Termination.  This Agreement may be terminated at any time on or
prior to the Closing:
 
(a)           By the written consent of the each Seller and Purchaser;
 
(b)           By Purchaser by written notice to the Sellers if any event occurs
or condition exists that would render impossible the satisfaction of one or more
conditions to the obligations of Purchaser to consummate the transactions
contemplated by this Agreement as set forth in Article VIII and that, if capable
of cure, has not been cured within ten (10) Business Days of receipt by the
Sellers of notice thereof from Purchaser;
 
(c)           By the Sellers by written notice to Purchaser if any event occurs
or condition exists that would render impossible the satisfaction of one or more
conditions to the obligation of the Sellers to consummate the transactions
contemplated by this Agreement as set forth in Article IX and that, if capable
of cure, has not been cured within ten (10) Business Days of receipt by
Purchaser of notice thereof from the Sellers;
 
(d)           By Purchaser by written notice to the Sellers if there has been a
material misrepresentation or other material breach by any Seller or the Company
of the representations, warranties or covenants of the Sellers or the Company
set forth herein that, if capable of cure, has not been cured within ten (10)
Business Days of receipt by the Sellers of notice thereof from Purchaser; or by
the Sellers if there has been a material misrepresentation or other material
breach by Purchaser of the representations, warranties and covenants of
Purchaser set forth herein that, if capable of cure, has not been cured within
ten (10) Business Days of receipt by Purchaser of notice thereof from the
Sellers;
 
(e)           By written notice of the Sellers or Purchaser, to the other
Parties, if any court of competent jurisdiction or other Governmental Authority
shall have issued an Order or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such Order, ruling or other action shall have become final and
nonappealable; or
 
(f)           By written notice of Purchaser, on the one hand, or the Sellers,
on the other hand, to the other Parties hereto, if the Closing has not occurred
on or before December 31, 2013 (the “Termination Date”).  Any extension of the
Closing Date shall require the mutual written consent of the Sellers and
Purchaser.
 
10.2         Effect of Termination.  In the event of termination of this
Agreement as provided in Section 10.1, this Agreement shall forthwith become
void and there shall be no Liability or obligation on the part of any Party
hereto or their respective officers, directors, stockholders or Affiliates,
except to the extent that such termination results from a breach by a party
hereto of any of its representations, warranties or covenants contained herein;
provided that, the provisions of this Article X and Article XII shall remain in
full force and effect and survive any termination of this Agreement.
 
 
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ARTICLE XI

INDEMNIFICATION
 
11.1         Survival.  The representations and warranties of the Company and
the Sellers in this Agreement shall survive the Closing until the end of the
Earnout Period, provided, however, that (a) such time limitation shall not apply
to the representations and warranties set forth in Sections 3.2, 4.1 and 4.3
(the “Fundamental Representations”) (such representations and warranties to
survive until the date that is sixty (60) days following the expiration of the
applicable statute of limitations) and (b) the representations and warranties of
Graf and Nahabedian (other than the Fundamental Representations) shall survive
the Closing until the Escrow Termination Date.  After the end of the relevant
survival period specified above, the applicable Sellers’ obligations under this
Article XI with respect to such representations and warranties shall expire,
terminate and shall be of no further force and effect unless a claim for
indemnification is made hereunder prior to the expiration of the relevant
survival period in which case such claim shall continue in effect until final
resolution of such claim.  Notwithstanding anything in this Agreement to the
contrary, the covenants and agreements of the Sellers and the Company (but not
representations and warranties) under this Agreement are not affected by the
survival periods specified above.
 
11.2         Indemnification.  Subject to the limitations and conditions for
indemnification contained in Sections 11.3 and 11.7, the Sellers (each, an
“Indemnitor”), shall (i) prior to the Escrow Termination Date (and any period
thereafter with respect to claims made prior to the Escrow Termination Date)
severally (based on their Pro Rata Share) and not jointly, and (ii) following
the Escrow Termination Date, Jadevaia individually, indemnify, defend and hold
harmless Purchaser and its Affiliates, and each of their officers, directors,
employees and agents, and their heirs and successors (each, an “Indemnitee”),
against any Losses, relating to or arising out of:
 
(a)           any breach of any representation or warranty made by the Company
or any Seller in this Agreement in Article III;

(b)           any breach of any representation or warranty made by any Seller in
Article IV;
 
(c)           any breach of any covenant of the Company or any Seller in this
Agreement;
 
(d)           any unpaid Adjustment Payment due from the Sellers to Purchaser;
and
 
(e)           any Pre-Closing Taxes.
 
11.3         Limitations.  Notwithstanding anything to the contrary in this
Agreement:
 
(a)           no claim may be made by any Indemnitee(s) for indemnification
pursuant to Section 11.2(a) unless and until the aggregate amount of Losses for
which the Indemnitee(s) seeks to be indemnified pursuant to Section 11.2(a)
exceeds $50,000 (the “Threshold Amount”), at which time the Indemnitee(s) shall
be entitled to indemnification for all such Losses (including all Losses
included within the Threshold Amount);
 
 
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(b)          the maximum aggregate indemnification obligation of each Seller for
money damages pursuant to Section 11.2(a), other than with respect to a claim
for indemnification arising from any breach or inaccuracy of any Fundamental
Representations, shall be limited to (i) in the case of Graf and Nahabedian,
such Seller’s Pro Rata Share of the Escrow Amount, and in the case of Jadevaia,
such Seller’s Pro Rata Share of the Escrow Amount plus the Earnout Payment (if
any);
 
(c)           the maximum aggregate indemnification obligation of each Seller
for money damages pursuant to Section 11.2(a) with respect to a claim for
indemnification arising from any breach or inaccuracy of any Fundamental
Representations or pursuant to Sections 11.2(b)-(e) shall be limited in the
aggregate to the consideration actually received by such Seller pursuant to this
Agreement;
 
(d)           no Seller shall be liable or have any indemnification obligation
for the breach of any representations or warranty made by any other Seller in
Article IV of this Agreement, the breach of any covenant of any other Seller in
this Agreement or for the actions or inaction of any other Seller in connection
with this Agreement; and
 
(e)           no Indemnitor shall have any right to indemnification pursuant to
Section 11.2(e) with respect to any Losses to the extent (and only to the
extent) such Losses are duplicative of Losses that were included in the Net
Working Capital calculation and have previously been recovered by Purchaser
through an adjustment to the Initial Closing Price at Closing.
 
11.4         Procedures for Making Claims.  If and when an Indemnitee desires to
assert a claim for Losses against any Indemnitor, the Indemnitee shall deliver
to the Indemnitor (with a copy to the Escrow Agent) a certificate signed by such
Indemnitee (if the Indemnitee is an entity, the certificate shall be signed by
its chief executive officer) (a “Notice of Claim”), which Notice of claim shall:
(i) state that the Indemnitee has paid or accrued (or intends or expects to pay
or accrue) Losses to which it is entitled to indemnification pursuant to this
Article XI and the amount thereof (to the extent then known); and (ii)
specifying to the extent possible (A) the individual items of Losses in the
certificate, (B) the date each such item was or is expected to be paid or
accrued, to the extent known, and (C) the basis upon which Losses are claimed
(including the specific clause of this Agreement pursuant to which such
indemnification is being sought.  Such Notice of Claim shall be delivered prior
to the expiration of any applicable survival period as set forth in Section
11.1.  If the Indemnitor shall object to such Notice of Claim, the Indemnitor
shall deliver written notice of objection (the “Notice of Objection”) to the
Indemnitee (with a copy to the Escrow Agent) within fifteen (15) Business Days
after receipt of the Notice of Claim.  The Notice of Objection shall set forth
the grounds upon which the objection is based and state whether the Indemnitor
objects to all or only a portion of the matter described in the Notice of
Claim.  The Losses set forth in the Notice of Claim shall be payable to the
Indemnitee within twenty (20) Business Days of the expiration of such fifteen
(15) Business Day period without the necessity of further action to the extent
the Indemnitor has not delivered a Notice of Objection.  If the Indemnitor shall
timely deliver a Notice of Objection, the Indemnitor and the Indemnitee shall
attempt in good faith to agree upon the rights of such Persons with respect to
the claim in the Notice of Claim.  If an agreement on the amount of Losses is
reached, a memorandum setting forth such agreement shall be prepared and signed
by the Indemnitor and Indemnitee and a written notice shall be delivered to the
Escrow Agent directing the delivery of the applicable portion of the Escrow
Amount to the Indemnitee based upon such resolution. If the parties are unable
to reach an agreement within fifteen (15) Business Days, either the Indemnitor
or the Indemnitee may demand arbitration of the matter (such arbitration to be
conducted by JAMS in New York City) (unless the matter is at issue in a pending
third party claim, in which case arbitration shall not be commenced until such
amount is ascertained or both persons agree to arbitration), and the matter
shall be settled by arbitration conducted by one arbitrator mutually agreeable
to the Indemnitor and the Indemnitee.  In the event that within ten (10) days
after submission of any dispute to arbitration, the Indemnitor and the
Indemnitee cannot mutually agree on one arbitrator, the Indemnitor and the
Indemnitee shall each select one arbitrator and the two arbitrators so selected
shall select a third arbitrator.  The arbitrator(s) shall set a limited time
period and establish procedures designed to reduce the cost and time for
discovery.  The decision of the arbitrator or a majority of the arbitrators, as
the case may be, as to the validity and amount of any claim for indemnification
for Losses (a “Resolved Amount”) shall be binding and conclusive upon the
Indemnitor and the Indemnitee.  Such decision shall be delivered in writing and
shall be supported by written findings of fact and conclusions which shall set
forth the award, judgment, decree or order awarded by the arbitrator(s). The
Escrow Agent shall be entitled to act in accordance with any such judgment and
make delivery of any portion of the Escrow Amount in accordance therewith.
Judgment upon any award rendered by the arbitrator(s) may be entered in any
court having jurisdiction.
 
 
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11.5        Defense Procedure for Third Party Claims.  If any claim, demand or
Liability that could constitute indemnifiable Losses hereunder is asserted by
any third party against any Indemnitee, the Indemnitee shall promptly provide
the Escrow Agent and the Indemnitor with a Notice of Claim with respect to such
third-party claim. The Indemnitor shall, upon the written request of the
Indemnitee, have the right to defend any actions or proceedings brought against
the Indemnitee in respect of matters embraced by the indemnity provided under
this Article XI, but the Indemnitee shall have the right to conduct and control
the defense, compromise or settlement of any such claim, demand or Liability if
the Indemnitee chooses to do so, on behalf of and for the account and risk of
the Indemnitor who shall be bound by the result so obtained to the extent
provided herein; provided, that if the Indemnitor is not allowed to control the
defense, they may provide advice or participate in the defense of any third
party claim through counsel of its choosing, but the fees and expenses of such
counsel shall be at the expense of the Indemnitor.  If, after a request to
defend any action or proceeding, the Indemnitor neglects to defend the
Indemnitee, a recovery against the latter suffered by it in good faith, is
conclusive in its favor against the Indemnitor, provided, however, that, if the
Indemnitor did not receive reasonable notice of the action or proceeding against
the Indemnitee, or is not allowed to control the defense, judgment against the
Indemnitee is only presumptive evidence against the Indemnitor that any
resulting Losses constitute an indemnifiable claim under this Article XI.  The
Parties shall cooperate in the defense of all third party claims that may give
rise to indemnifiable claims hereunder.  In connection with the defense of any
claim, each Party shall make available to the Party controlling such defense,
any books, records or other documents within its control that are reasonably
requested in the course of such defense.  Except with the consent of the
Indemnitor (which consent shall not be unreasonably withheld or delayed), no
settlement of any such claim with any third party claimant shall be
determinative of the amount of Losses relating to such matter, but shall only be
presumptive evidence of the amount of Losses constituting such indemnifiable
claim.  In the event that the Indemnitor has consented to any such settlement,
the Indemnitor shall have no power or authority to object under any provision of
this Article XI to the existence and amount of any claim by the Indemnitee with
respect to such settlement.  Indemnification payments with respect to third
party claims shall be paid by the Indemnitor upon (i) the entry of a judgment
against the Indemnitee and the expiration of any applicable appeal period; (ii)
the entry of an unappealable judgment or final appellate decision against the
Indemnitee; or (iii) a settlement of such claim, in each case subject to the
dispute resolution provisions of Section 11.4.

 
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11.6        Right of Setoff.  If there is determined to be any indemnifiable
Losses (whether by agreement, failure to object or decision of arbitrator(s))
(“Determined Losses”) payable to an Indemnitee or if there is otherwise
determined to be any amount owing to any such Indemnitee as a result of
indemnification under this Agreement, Purchaser shall be entitled to retain as
an offset, without any further action by any Indemnitor, a portion (up to all)
of any Earnout Payment equal to such Determined Losses and in satisfaction
thereof to the extent of such offset, and such offset shall be deemed to occur
automatically such as to reduce, as applicable, the applicable payments
otherwise payable by Purchaser.  In addition, if a Indemnitee has made a claim
for Losses that has not yet been resolved (including in connection with a third
party claim), Purchaser shall be entitled to hold back from any payments that
would otherwise be due as part of the Earnout Payment the full amount of such
claim until resolution and determination thereof.

11.7         Exclusive Remedy; Release of Escrow Amount.
 
(a)           In the event the Closing occurs, subject to Section 12.11, the
sole and exclusive remedy of Purchaser or any other Indemnitee for Losses for
any breach or inaccuracy of any representation or warranty or for any breach of
any covenant or obligation by the Company or any of the Sellers shall be
indemnification pursuant to this Article XI; provided, however, this exclusive
remedy does not preclude (i) a party from bringing an action for specific
performance or other equitable remedy to require a party to perform its
obligations under this Agreement or any of the Transaction Agreements or (ii) a
party from pursuing remedies under applicable Law for fraud or intentional
misrepresentation, provided that the maximum indemnification obligation of any
Seller for fraud of another party shall be limited to the total consideration
received by such Seller pursuant to this Agreement.
 
(b)           The period during which claims for indemnification from the Escrow
Fund may be initiated (the “Escrow Claims Period”) shall commence at the Closing
and terminate on the nine month anniversary of the Closing Date (the “Escrow
Termination Date”).  On the Escrow Termination Date, the Escrow Fund shall
terminate with respect to all amounts in the Escrow Fund at such time and shall
be distributed as set forth herein and in the Escrow Agreement; provided,
however, that the portion of the Escrow Amount, which, subject to the provisions
of this Article XI and the Escrow Agreement, are necessary to satisfy any
unsatisfied claims specified in any Notice of Claim delivered to the Indemnitors
and the Escrow Agent prior to the expiration of such Escrow Period shall remain
in the Escrow Fund (and the Escrow Fund shall remain in existence) until such
claims have been resolved.  As such claims are resolved after the Escrow
Termination Date, the Escrow Agent shall deliver to the Sellers any portion of
the Escrow Amount remaining in the Escrow Fund not required to satisfy such
resolved claims or any remaining unresolved claims.  Deliveries of any such
portion of the Escrow Fund to the Sellers pursuant to this Section 11.7 and the
Escrow Agreement shall be based on their respective Pro Rata Share of the Escrow
Amount.  The Escrow Fund serves as partial security for the indemnification
obligations of the Indemnitors hereunder.  Until the Escrow Fund is fully
released (whether to the Sellers or to Indemnitees) and/or become subject to
potential payment to any Indemnitee(s) as a result of unresolved claims, the
Escrow Fund shall be the first source of recovery by any Indemnitee with respect
to indemnification claims hereunder (and the only source of recovery with
respect to claims under Section 11.2(a) that do not involve a breach of the
Fundamental Representations), and no Indemnitee shall be entitled to seek
recovery of any Losses directly from any Indemnitor until such time; provided,
however, that the foregoing requirement to first seek recovery from the Escrow
Fund shall not apply to any Adjustment Payment in excess of $200,000 or any
indemnification claim with respect thereto.
 
 
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11.8        Treatment of Indemnity Payments.  Any payments made pursuant to this
Article XI shall be treated as an adjustment to the Purchase Price for all
income Tax purposes and none of the parties shall take a contrary position with
respect to any Tax Return, audit or other proceeding.
 
ARTICLE XII
 
MISCELLANEOUS
 
12.1        Expenses.  Except as otherwise expressly provided in this Agreement,
each party hereto shall bear its own expenses with respect to the transactions
contemplated hereby.
 
12.2        Amendment.  This Agreement may be amended, modified or supplemented
only by written agreement of Purchaser, the Company and the Sellers.
 
12.3        Notices.  Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by personal-delivery,
(b) on the date of transmission if sent by facsimile or other electronic
transmission including email with electronic confirmation of successful
transmission and if sent on a Business Day prior to 5:00 p.m. at the place of
receipt, and if not sent during such time, on the next succeeding Business Day,
(c) three (3) Business Days after being deposited in the U.S. mail, certified or
registered mail, postage prepaid, or (d) on the date of scheduled delivery if
delivered by nationally recognized express mail or courier service:
 
If to Purchaser, addressed as follows:

InterCloud Systems, Inc.
Attn:  Lawrence Sands, S.V.P.
2500 N. Military Trail
Boca Raton, Florida 33431Facsimile No.:  561-988-2307
lsands@digitalcomminc.com

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

Pryor Cashman LLP
7 Times Square
New York, NY 10036
Attn.:  M. Ali Panjwani, Esq.
Facsimile:  (212) 798-6319

If to Barton F. Graf, Jr., addressed as follows:

Barton F. Graf, Jr.
3 Abbott Rd.
Lexington, MA 02420
Facsimile No: 781.357.8500
bgraf@integrationpartners.com

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

Jay K. Hachigian
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
850 Winter Street, Waltham, MA 02451
Fax: 877-881-9197

If to David C. Nahabedian, addressed as follows:

David C. Nahabedian
10 Clark Rd
Wellesley, MA 02481
Facsimile No.: 781.357.8500
dnaha@integrationpartners.com

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

Jay K. Hachigian
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
850 Winter Street, Waltham, MA 02451
Fax: 877-881-9197

 
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If to Frank Jadevaia, addressed as follows:

Frank Jadevaia
575 Brook Ave
River Vale, NJ 07675
Facsimile No.: 973.630.5451
fjadevaia@integrationpartners.com

If to the Company, addressed as follows:

Integration Partners-NY Corporation
Attn: Chief Executive Officer
1719 Route 10 East, Suite 114
Parsippany, NJ 07054
Facsimile: 973.630.5451

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

Jay K. Hachigian
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
850 Winter Street, Waltham, MA 02451
Fax: 877-881-9197
 
or to such other individual or address as a Party hereto may designate for
itself by notice given as herein provided.
 
12.4        Waivers.  The failure of a party to require performance of any
provision shall not affect its right at a later time to enforce the same.  No
waiver by a party of any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement shall be effective unless
in writing.
 
12.5        Counterparts; Facsimile or Electronic Signature.  This Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.  A signature of
a party transmitted by facsimile or electronic mail shall constitute an original
for all purposes.
 
12.6        Interpretation.  The headings preceding the text of Articles and
Sections included in this Agreement and the headings to exhibits, schedules or
annexes to this Agreement are for convenience only and shall not be deemed part
of this Agreement or be given effect in interpreting this Agreement.
 
12.7        Applicable Law.  This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without giving effect to the principles of conflicts of law thereof.
 
12.8        No Third Party Beneficiaries.  This Agreement is solely for the
benefit of the parties hereto and no provision of this Agreement shall be deemed
to confer rights upon any other Person, other than as expressly set forth in
Section 6.4, Section 6.5 and Article XI.
 
 
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12.9        Severability.  If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
 
12.10      Remedies Cumulative.  The remedies provided in this Agreement shall
be cumulative and shall not preclude the assertion or exercise of any other
rights or remedies available by law, in equity or otherwise, except as limited
in Section 11.7(e).
 
12.11      Jurisdiction, Service of Process.  The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the Parties shall be entitled to seek
an injunction or injunctions to prevent or to address breaches or threatened
breaches of this Agreement, without the necessity of proving actual damages or
posting bond, and to enforce specifically the terms and provisions of this
Agreement in any Federal Court located in the Southern District of New York or
any New York State Court, this being in addition to any other remedy to which
they are entitled at law or in equity pursuant to, and as limited by, the terms
of this Agreement.  In addition, except to the extent an alternative dispute
resolution mechanism is expressly provided for herein, each of the Parties
hereto (a) consents to submit itself to the personal jurisdiction in the Federal
District Court of the Southern District of New York in the event any dispute
arises out of this Agreement or any transaction contemplated hereby, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to this Agreement or any transaction contemplated
hereby in any court other than the Federal District Court for the Southern
District of New York or any New York State Court, and (d) waives any right to
trial by jury with respect to any action related to or arising out of this
Agreement or any transaction contemplated hereby.  EACH PARTY TO THIS AGREEMENT
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER
ARISING OUT OF THIS AGREEMENT.
 
12.12      Attorney Fees and Costs.  Except as otherwise expressly set forth
herein, the prevailing party in any litigation, arbitration proceeding or other
action shall be awarded all of its or their costs and expenses including, but
not limited to, reasonable attorney fees against the non-prevailing Party.  This
provision shall apply to such expenses incurred at the trial and all appellate
levels, without respect to who is the initiating party and shall apply to an
action for declaratory relief if the party instituting it asserts specific
contentions concerning this Agreement which is ruled upon by the court or
arbitration. Such reasonable attorney’s fees shall include, but not be limited
to, fees for attorneys, paralegals, legal assistants and expenses incurred in
any and all judicial, bankruptcy, reorganization, administrative receivership,
or other proceedings affecting creditors' rights and involving a claim under
this Agreement, even if such proceedings arise before or after entry of a final
judgment
 
12.13      Waivers of Inducement. The Parties hereto waive any right to assert
or claim that they were induced to enter into this Agreement by any
representation, promise, statement, or warranty made by any Party or any Party's
agent which is not expressly set forth in this Agreement in writing.
 
 
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12.14      Assignment.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.  Neither the Company nor any Seller may assign, delegate or otherwise
transfer such Party’s rights or obligations hereunder, including by operation of
law, without the prior written consent of Purchaser.  In the event of any
permitted assignment, the assignor shall be responsible for all obligations of
the assignee and shall be bound in all respects by the provisions hereof.

12.15      Use of Certain Terms.  As used in this Agreement, the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular paragraph, subparagraph or other
subdivision.  The use of the term “including” shall be deemed to be followed by
“without limitation”.

12.16      Entire Understanding.  This Agreement and the Transaction Documents
sets forth the entire agreement and understanding of the Parties hereto and
supersedes any and all prior agreements, arrangements and understandings among
the parties.  The parties expressly agree that the prior Stock Purchase
Agreement dated November 20, 2012 among the Parties has been and is terminated
and of no further force and effect.

 
{Signature page to follow}
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 

 
INTERCLOUD SYSTEMS, INC.
       
By:
/s/ Mark E. Munro
 
Name:
Mark E. Munro
 
Title:
Chief Executive Officer

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 
INTEGRATION PARTNERS-NY CORPORATION
       
By:
/s/ Frank Jadevaia
 
Name:
Frank Jadevaia
 
Title:
President

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 

 
Barton F. Graf, Jr.
     
/s/ Barton F. Graf, Jr.
         
DAVID C. NAHABEDIAN
     
/s/ David C. Nahabedian
         
FRANK JADEVAIA
     
/s/ Frank Jadevaia

 
 
 

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