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Exhibit 10.3
Execution Copy
 
STOCK PURCHASE AGREEMENT
 
among
 
BRINK SOFTWARE, INC.,
 
THE SHAREHOLDERS,
 
PARTECH, INC.
 
and
 
PAR TECHNOLOGY CORPORATION
 
dated as of
 
September 18, 2014
 

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TABLE OF CONTENTS
 
ARTICLE I  DEFINITIONS
4
ARTICLE II PURCHASE AND SALE
17
Section 2.01 Purchase and Sale.
17
Section 2.02 Purchase Price.
18
Section 2.03 Transactions to be Effected at the Closings.
23
Section 2.04 Purchase Price Adjustment.
26
Section 2.05 Closing.
27
Section 2.06 Withholding Tax.
27
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS AND THE COMPANY
28
Section 3.01 Authority of Shareholders.
28
Section 3.02 Organization, Authority and Qualification of the Company.
28
Section 3.03 Capitalization.
28
Section 3.04 No Subsidiaries.
29
Section 3.05 No Conflicts; Consents.
29
Section 3.06 Financial Statements.
29
Section 3.07 Undisclosed Liabilities.
30
Section 3.08 Absence of Certain Changes, Events and Conditions.
30
Section 3.09 Material Contracts.
32
Section 3.10 Title to Assets; Real Property.
34
Section 3.11 Condition And Sufficiency of Assets.
35
Section 3.12 Intellectual Property.
35
Section 3.13 Inventory.
37
Section 3.14 Accounts Receivable.
37
Section 3.15 Customers and Suppliers.
37
Section 3.16 Insurance.
37
Section 3.17 Legal Proceedings; Governmental Orders.
38
Section 3.18 Compliance With Laws; Permits.
38

 

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Section 3.19 Environmental Matters.
39
Section 3.20 Employee Benefit Matters.
40
Section 3.21 Employment Matters.
44
Section 3.22 Taxes.
45
Section 3.23 Indebtedness.
47
Section 3.24 Books and Records.
47
Section 3.25 Brokers.
47
Section 3.26 Full Disclosure.
48
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
48
Section 4.01 Organization and Authority of Buyer and Parent.
48
Section 4.02 No Conflicts; Consents.
49
Section 4.03 Investment Purpose.
49
Section 4.04 Brokers.
49
Section 4.05 Sufficiency of Funds.
49
Section 4.06 Legal Proceedings.
49
ARTICLE V COVENANTS
50
Section 5.01 Conduct of Business After the First Closing.
50
Section 5.02 Expenses.
50
Section 5.03 Confidentiality.
50
Section 5.04 Non-competition; Non-solicitation
50
Section 5.05 Books and Records.
52
Section 5.06 Public Announcements.
52
Section 5.07 Further Assurances.
52
Section 5.08 Parent Guaranty.
53
Section 5.09 Shareholder Representative.
53
Section 5.10 Option Agreements.
54
ARTICLE VI TAX MATTERS
54
Section 6.01 Tax Covenants.
54
Section 6.02 Termination of Existing Tax Sharing Agreements.
55

 
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Section 6.03 Tax Indemnification.
56
Section 6.04 Straddle Period.
56
Section 6.05 Intentionally Omitted.
56
Section 6.06 Contests.
56
Section 6.07 Cooperation and Exchange of Information.
57
Section 6.08 Overlap.
57
ARTICLE VII INTENTIONALLY OMITTED
57
ARTICLE VIII INDEMNIFICATION
57
Section 8.01 Survival.
57
Section 8.02 Indemnification By Shareholders.
58
Section 8.03 Indemnification By Buyer and Parent.
58
Section 8.04 Certain Limitations.
59
Section 8.05 Indemnification Procedures.
59
Section 8.06 Payments.
61
Section 8.07 Tax Treatment of Indemnification Payments.
62
Section 8.08 Effect of Investigation.
62
Section 8.09 Exclusive Remedies.
62
ARTICLE IX INTENTIONALLY OMITTED
63
ARTICLE X MISCELLANEOUS
63
Section 10.01 Notices.
63
Section 10.02 Interpretation.
64
Section 10.03 Headings.
64
Section 10.04 Severability.
64
Section 10.05 Entire Agreement.
64
Section 10.06 Successors and Assigns.
64
Section 10.07 No Third-party Beneficiaries.
65
Section 10.08 Amendment and Modification; Waiver.
65
Section 10.09 Governing Law; Dispute Resolution.
65
Section 10.10 Specific Performance.
66
Section 10.11 Counterparts.
66

3

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STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”), dated as of September 18,
2014, is entered into by and among Brink Software, Inc., a California
corporation (“Company”), those individual shareholders of the Company who have
executed a counterpart of this Agreement (each individually referred to herein
as a “Shareholder” and collectively as the “Shareholders”), ParTech, Inc., a New
York corporation (“Buyer”) and PAR Technology Corporation, a Delaware
corporation (“Parent”).

RECITALS

WHEREAS, Shareholders own all of the issued and outstanding shares of common
stock, no par value (the “Shares”) of the Company; and

WHEREAS, Shareholders wish to sell to Buyer, and Buyer wishes to purchase from
the Shareholders, the Shares, subject to the terms and conditions set forth
herein;

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

 
ARTICLE I
DEFINITIONS

The following terms have the meanings specified or referred to in this Article
I (Definitions):

“Achievement Percentage” means the percentage of achievement of planned software
revenue with respect to a particular Calculation Period calculated as the sum of
actual Direct Software Revenue plus actual Indirect Software Revenue during such
Calculation Period divided by the amount of Planned Software Revenue for such
Calculation Period.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration,
inquiry, audit, notice of violation, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity.

“Addressable Market” has the meaning set forth in Section 2.02(e)(vi)(A)
(Earn-Out Payments).

“Affiliate” of a Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

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“Aggregate Purchase Price” means the First Tranche Purchase Price plus the
Second Tranche Purchase Price plus the Earn-Out Payments, if any.

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

“Balance Sheet” has the meaning set forth in Section 3.06 (Financial
Statements).

“Balance Sheet Date” has the meaning set forth in Section 3.06 (Financial
Statements).

“Basket” has the meaning set forth in Section 8.04(a) (Certain Limitations).

“Benefit Plan” has the meaning set forth in Section 3.20(a) (Employee Benefit
Matters).

“Business Day” means any day except Saturday, Sunday or any other day on which
commercial banks located in New York, New York are authorized or required by Law
to be closed for business.

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

“Buyer Indemnitees” has the meaning set forth in Section
8.02(a) (Indemnification By Shareholder).

“Buyer’s Accountants” means BDO USA, LLP.

“Cap” has the meaning set forth in Section 8.04(a) (Certain Limitations).

“Calculation Period” means a period of time consisting of a calendar year ending
December 31 for the years 2015, 2016, 2017 or 2018, as applicable.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.

“Change in Strategic Direction” has the meaning set forth in Section
2.04(e)(vii)(A) (Earn-Out Impairment).

“Change of Control” means, with respect to either Buyer or Parent, either (i) a
transaction or related series of transactions (including by way of merger,
consolidation, recapitalization, or reorganization) with a third party that is
not an Affiliate of Buyer or Parent, as applicable, the result of which is that
the holders of the outstanding voting stock of Buyer or Parent, as applicable
immediately prior to such transaction cease to hold a majority of the
outstanding voting stock of the surviving or resulting Person as a result of a
merger, consolidation, recapitalization or reorganization or (ii) the sale,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Buyer or Parent,
as applicable. The term “control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

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“Closing” means either the First Closing or the Second Closing, as applicable.

“Closing Date” means either the First Closing Date or the Second Closing Date.

“Closing Date Balance Sheet” has the meaning set forth in Section 2.04(a)(i)
(Post-Closing Adjustment).

“Closing Date Net Assets” has the meaning set forth in Section 2.04(a)(i)
(Post-Closing Adjustment).

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” has the meaning set forth in Section 3.03(a).

“Company” has the meaning set forth in the Preamble.

“Company Intellectual Property” means all Intellectual Property that is owned or
held for use by the Company including, for avoidance of the doubt, the Software.

“Company IP Agreements” means all material licenses, sublicenses, consent to use
agreements, settlements, coexistence agreements, covenants not to sue,
permissions, escrow agreement, access agreements, development agreements,
services agreements, integration agreements, royalty agreements and other
Contracts (including any right to receive or obligation to pay royalties or any
other consideration), whether written or oral, relating to Intellectual Property
to which the Company is a party, specified third-party beneficiary or otherwise
bound.

“Company IP Registrations” means all Company Intellectual Property that is
subject to any issuance registration, application or other filing by, to or with
any Governmental Authority or authorized private registrar in any jurisdiction,
including registered trademarks, domain names and copyrights, issued and
reissued patents and pending applications for any of the foregoing.

“Company Transaction Expenses” include the direct costs and expenses incurred by
the Company in connection with its obligations pursuant to Sections 2.03(b)(ix)
and (x) (Transactions to be Effected at Closing).

“Contracts” means all contracts, leases, deeds, mortgages, licenses,
instruments, notes, commitments, undertakings, indentures, joint ventures and
all other agreements, commitments and legally binding arrangements, whether
written or oral.

“Direct Claim” has the meaning set forth in Section 8.05(c) (Direct Claims).

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“Direct Software Revenue” means Software Revenue generated by Buyer’s internal
direct sales team during a particular Calculation Period.

“Disclosure Schedules” means the Disclosure Schedules delivered by Shareholders
and Buyer concurrently with the execution and delivery of this Agreement.

“Disputed Amounts” has the meaning set forth in Section 2.04(b)(iii)
(Examination and Review Period).

“Dollars or $” means the lawful currency of the United States.

“Earn-Out Calculation” has the meaning set forth in Section 2.02(e)(iv)(A)
(Earn-Out Payments).

“Earn-Out Calculation Delivery Date” has the meaning set forth in Section
2.02(e)(iv)(A) (Earn-Out Payments).

“Earn-Out Calculation Objection Notice” has the meaning set forth in Section
2.02(e)(iv)(B) (Earn-Out Payments).

“Earn-Out Calculation Statement” has the meaning set forth in Section
2.02(e)(iv)(A) (Earn-Out Payments).

“Earn-Out Impairment” has the meaning set forth in Section 2.04(e)(vii)(A)
(Earn-Out Impairment).
 
“Earn-Out Review Period” has the meaning set forth in Section 2.02(e)(iv)(B)
(Earn-Out Payments).

“Earn-Out Payment” has the meaning set forth in Section 2.02(e)(i) (Earn-Out
Payments).

“Earn-Out Payment Date” has the meaning set forth in Section 2.02(e)(ii)
(Earn-Out Payments).

“Earn-Out Percentage” means (a) with respect to the 2015 Calculation Period, one
hundred percent (100%); (b) with respect to the 2016 Calculation Period, seventy
five percent (75%); (c) with respect to the 2017 Calculation Period, fifty
percent (50%); and, (d) with respect to the 2018 Calculation Period, fifty
(50%).

“Employment Agreements” means those certain Employment Agreements dated as of
the First Closing Date between the Company and each of the Key Employees.

“Encumbrance” means any charge, claim, community property interest, pledge,
condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

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“Environmental Attributes” means any emissions and renewable energy credits,
energy conservation credits, benefits, offsets and allowances, emission
reduction credits or words of similar import or regulatory effect (including
emissions reduction credits or allowances under all applicable emission trading,
compliance or budget programs, or any other federal, state or regional emission,
renewable energy or energy conservation trading or budget program) that have
been held, allocated to or acquired for the development, construction,
ownership, lease, operation, use or maintenance of the Company as of: (a) the
date of this Agreement; and (b) future years for which allocations have been
established and are in effect as of the date of this Agreement.

“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty,
or, as to each, any settlement or judgment arising therefrom, by or from any
Person alleging liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations,
cleanup, governmental response, removal or remediation, natural resources
damages, property damages, personal injuries, medical monitoring, penalties,
contribution, indemnification and injunctive relief) arising out of, based on or
resulting from: (a) the presence, Release of, or exposure to, any Hazardous
Materials; or (b) any actual or alleged non-compliance with any Environmental
Law or term or condition of any Environmental Permit.

“Environmental Law” means any applicable Law, and any Governmental Order or
binding agreement with any Governmental Authority: (a) relating to pollution (or
the cleanup thereof) or the protection of natural resources, endangered or
threatened species, human health or safety, or the environment (including
ambient air, soil, surface water or groundwater, or subsurface strata); or (b)
concerning the presence of, exposure to, or the management, manufacture, use,
containment, storage, recycling, reclamation, reuse, treatment, generation,
discharge, transportation, processing, production, disposal or remediation of
any Hazardous Materials. The term “Environmental Law” includes, without
limitation, the following (including their implementing regulations and any
state analogs): the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976, as
amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901
et seq.; the Federal Water Pollution Control Act of 1972, as amended by the
Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control
Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air
Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§
7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. §§ 651 et seq.

“Environmental Notice” means any written directive, notice of violation or
infraction, or notice respecting any Environmental Claim relating to actual or
alleged non-compliance with any Environmental Law or any term or condition of
any Environmental Permit.

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“Environmental Permit” means any Permit, letter, clearance, consent, waiver,
closure, exemption, decision or other action required under or issued, granted,
given, authorized by or made pursuant to Environmental Law.

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

“ERISA Affiliate” means all employers (whether or not incorporated) that would
be treated together with the Company or any of its Affiliates as a “single
employer” within the meaning of Section 414 of the Code.

“Escrow Agent” means NBT Bank, N.A.

“Escrow Agreement” means that certain Escrow Agreement dated as of the First
Closing Date between Buyer, Shareholder Representative, and the Escrow Agent
including provisions with respect to the escrow of the Second Tranche Escrow
Payment and the Second Tranche Shares attached hereto as Exhibit 1.

“Estimated Net Assets” has the meaning set forth in Section 2.04(a)(i)
(Post-Closing Adjustment).

“Financial Statements” has the meaning set forth in Section 3.06 (Financial
Statements).

“First Closing” has the meaning set forth in Section 2.01(a) (First Tranche).

“First Closing Date” has the meaning set forth in Section 2.05(a) (First
Closing).

“First Closing Shareholders” means those Shareholders identified on Exhibit 2
attached hereto.

“First Tranche Purchase Price” has the meaning set forth in Section 2.02(a)
(First Tranche Purchase Price).

“First Tranche Shares” means those shares held by the First Closing Shareholders
and identified on Exhibit 2 attached hereto, which shares constitute not less
than fifty-one percent (51%) of the Shares, as being sold in the First Closing.

“GAAP” means United States generally accepted accounting principles in effect
from time to time.

“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.

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“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

“Hazardous Materials” means: (a) any material, substance, chemical, waste,
product, derivative, compound, mixture, solid, liquid, mineral or gas, in each
case, whether naturally occurring or manmade, that is hazardous, acutely
hazardous, toxic, or words of similar import or regulatory effect under
Environmental Laws; and (b) any petroleum or petroleum-derived products, radon,
radioactive materials or wastes, asbestos in any form, lead or lead-containing
materials, urea formaldehyde foam insulation, and polychlorinated biphenyls.

“Impairment Notice” has the meaning set forth in Section 2.04(e)(vii)(A)
(Earn-Out Impairment).

“Indemnified Party” has the meaning set forth in Section 8.05 (Indemnification
Procedures).

“Indemnifying Party” has the meaning set forth in Section 8.05 (Indemnification
Procedures).

“Independent Accountant” has the meaning set forth in Section 2.02(iv) (Earn-Out
Payments).

“Indirect Software Revenue” means Software Revenue generated through Buyer’s
channel partners during a particular Calculation Period.

“Insider Shareholders” means, collectively, each of the shareholders identified
in Exhibit 3 attached hereto.

“Insurance Policies” has the meaning set forth in Section 3.16 (Insurance).

“Intellectual Property” means all intellectual property rights and assets, and
all rights, interests and protections that are associated with, similar to, or
required for the exercise of, any of the foregoing, however arising, pursuant to
the Laws of any jurisdiction throughout the world, whether registered or
unregistered, including any and all: (a) trademarks, service marks, trade names,
brand names, logos, trade dress, design rights and other similar designations of
source, sponsorship, association or origin, together with the goodwill connected
with the use of and symbolized by, and all registrations, applications and
renewals for, any of the foregoing; (b) internet domain names, whether or not
trademarks, registered in any top-level domain by any authorized private
registrar or Governmental Authority, web addresses, web pages, websites and
related content, accounts with Twitter, Facebook and other social media
companies and the content found thereon and related thereto, and URLs; (c) works
of authorship, expressions, designs and design registrations, whether or not
copyrightable, including copyrights, author, performer, moral rights, and all
registrations, applications for registration and renewals of such copyrights;
(d) inventions, discoveries, trade secrets, business and technical information
and know-how, databases, data collections and other confidential and proprietary
information and all rights therein; (e) patents (including all reissues,
divisionals, provisionals, continuations and continuations-in-part,
re-examinations, renewals, substitutions and extensions thereof), patent
applications, and other patent rights and any other Governmental
Authority-issued indicia of invention ownership (including inventor’s
certificates, petty patents and patent utility models); and (f) software and
firmware, including data files, source code, object code, application
programming interfaces, architecture, files, records, schematics, computerized
databases and other related specifications and documentation; and (g)
semiconductor chips and mask works.

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“Internal Financial Statements” has the meaning set forth in Section
3.06 (Financial Statements).

“Intentional Fraud” means material representations made by the Company or any
Shareholder that are deliberately made and known to be untrue by the party
making such representation, or omissions of material facts deliberately made by
any such person and known to make statements made by such person, in light of
the circumstances under which they were made, misleading.

“Interim Balance Sheet” has the meaning set forth in Section 3.06 (Financial
Statements).

“Interim Balance Sheet Date” has the meaning set forth in Section
3.06 (Financial Statements).

“Interim Financial Statements” has the meaning set forth in Section
3.06 (Financial Statements).

“Key Employees” means each of (a) the Insider Shareholders and (b) any other key
employees identified by mutual agreement of Buyer and Shareholder Representative
and set forth on Exhibit 4 attached hereto.

“Knowledge of the Company” or “Company’s Knowledge” means the actual or
knowledge of any Insider Shareholder and such knowledge as such Insider
Shareholder would have after reasonable inquiry into the facts necessary to make
any related representation or warranty.

“Law” means any statute, law, ordinance, regulation, rule, code, order,
constitution, treaty, common law, judgment, decree, other requirement or rule of
law of any Governmental Authority.

“Letter of Transmittal” has the meaning set forth in Section 2.02(a) (Purchase
Price).

“Liabilities” has the meaning set forth in Section 3.07 (Undisclosed
Liabilities).

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“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments,
interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable attorneys’ fees and the cost of enforcing any right to
indemnification hereunder and the cost of pursuing any insurance providers;
provided, however, that “Losses” shall not include consequential, special,
incidental or other indirect damages or punitive damages, except in the case of
breach of confidentiality, Intentional Fraud or to the extent actually awarded
to a Governmental Authority or other third party, and shall be calculated net of
any proceeds of insurance received with respect thereto.

“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is, or could reasonably be expected to become, individually or in the
aggregate, materially adverse to (a) the business, results of operations,
condition (financial or otherwise) or assets of the Company, or (b) the ability
of Shareholders to consummate the transactions contemplated hereby on a timely
basis; provided, however, that “Material Adverse Effect” shall not include any
event, occurrence, fact, condition or change, directly or indirectly, arising
out of or attributable to: (i) general economic or political conditions; (ii)
conditions generally affecting the industries in which the Company operates;
(iii) any changes in financial or securities markets in general; (iv) acts of
war (whether or not declared), armed hostilities or terrorism, or the escalation
or worsening thereof; (v) any action required or permitted by this Agreement,
except pursuant to Section 3.05 (No Conflicts; Consents); or (vi) the public
announcement, pendency or completion of the transactions contemplated by this
Agreement; provided further, however, that any event, occurrence, fact,
condition or change referred to in clauses (i) through (iv) immediately above
shall be taken into account in determining whether a Material Adverse Effect has
occurred or could reasonably be expected to occur to the extent that such event,
occurrence, fact, condition or change has a disproportionate effect on the
Company compared to other participants in the industries in which the Company
conducts its businesses.

“Material Contracts” has the meaning set forth in Section 3.09(a) (Material
Contracts).

“Material Employees” means those employees identified by the mutual agreement of
Buyer and the Shareholder Representative prior to the First Closing.

“Multiemployer Plan” has the meaning set forth in Section 3.20(c) (Employee
Benefit Matters).

“Net Asset Calculations” has the meaning set forth in Section 2.04(a)(i)
(Post-Closing Adjustment).

“Net Assets” means the value of the assets of the Company less the value of the
liabilities of the Company, as determined in accordance with GAAP.

“Non-U.S. Benefit Plan” has the meaning set forth in Section 3.20(a) (Employee
Benefit Matters).

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“Option Agreements” means agreements issued pursuant to and in accordance with
Parent’s then effective equity incentive plan with respect to stock options with
respect to the award of options to purchase shares of the Parent Common Stock 
between Parent and each of the Insider Shareholders, such agreements (a)
representing an aggregate total of three hundred thousand (300,000) shares of
Parent Common Stock to be allocated among the foregoing individuals in
accordance with Exhibit 5 attached hereto, (b) including an exercise price equal
to the fair market value of the Parent Common Stock as of the date such option
is granted and (z) subject to vesting whereby such options shall become 75%
vested on the third anniversary of the date of such grant and an additional 25%
vested, or fully vested, on the fourth anniversary of the date of such grant
with such vesting accelerated upon termination of the recipient’s employment by
the Company without Cause or by the recipient for Good Reason, each as defined
in such recipient’s Employment Agreement.

“Parent” has the meaning set forth in the Preamble.

“Permits” means all permits, licenses, franchises, approvals, authorizations,
registrations, certificates, variances and similar rights obtained, or required
to be obtained, from Governmental Authorities.

“Permitted Encumbrances” has the meaning set forth in Section 3.10(a).

“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.

“Planned Software Revenue” means the projected Software Revenue for each
Calculation Period as identified in Exhibit 6 attached hereto.

“Post-Closing Adjustment” has the meaning set forth in Section 2.04(a)(ii)
(Post-Closing Adjustment).

“Post-Closing Tax Period” means any taxable period beginning after the First
Closing Date and, with respect to any taxable period beginning before and ending
after the First Closing Date, the portion of such taxable period beginning after
the First Closing Date.

“Post-Closing Taxes” means Taxes of the Company for any Post-Closing Tax Period.

“Pre-Closing Tax Period” means any taxable period ending on or before the First
Closing Date and, with respect to any taxable period beginning before and ending
after the First Closing Date, the portion of such taxable period ending on and
including the First Closing Date.

“Pre-Closing Taxes” means Taxes of the Company for any Pre-Closing Tax Period.

“Pro Rata Share” means, for a Shareholder, the quotient of that number of Shares
held by such Shareholder divided by the total number of Shares held by all
Shareholders as of the date of the applicable calculation.

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“Public Software” means any software that contains, or is derived in any manner
(in whole or in part) from, any software that is distributed as free software,
open source software or similar licensing or distribution models, including
Software licensed or distributed under any of the following licenses or
distribution models, or licenses or distribution models similar to any of the
following:  (i) GNU’s General Public License or Lesser/Library GPL; (ii) Mozilla
Public License; (iii) Netscape Public License; (iv) Sun Community
Source/Industry Standard License; (v) BSD License; (vi) MIT License; (vii)
Apache License; and (viii) the Artistic License.

“Qualified Benefit Plan” has the meaning set forth in Section 3.20(c) (Employee
Benefit Matters).

“Real Property” means the real property owned, leased or subleased by the
Company, together with all buildings, structures and facilities located thereon.

“Release” means any actual or threatened release, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, abandonment, disposing or allowing to escape or migrate into or through
the environment (including, without limitation, ambient air (indoor or outdoor),
surface water, groundwater, land surface or subsurface strata or within any
building, structure, facility or fixture).

“Representative” means, with respect to any Person, any and all directors,
officers, employees, consultants, financial advisors, counsel, accountants and
other agents of such Person.

“Restricted Business” means the provision of point of sale/restaurant management
software and related services for food service operators (corporate or
franchisee) regardless of service model.

“Restricted Period” has the meaning set forth in Section
5.04(a) (Non-competition; Non-solicitation).

“Restricted Shareholders” has the meaning set forth in Section 5.04
(Non-competition; Non-Solicitation).

“Review Period” has the meaning set forth in Section 2.04(b)(i) (Examination and
Review Period).

“Resolution Period” has the meaning set forth in Section 2.04(b)(ii)
(Examination and Review Period).

“Second Closing” has the meaning set forth in Section 2.01(b) (Second Tranche).

“Second Closing Date” has the meaning set forth in Section 2.05(b) (Second
Closing).

“Second Closing Shareholders” means those Shareholders identified on Exhibit 7
attached hereto.

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“Second Tranche Contingent Cash Payment” has the meaning set forth in Section
2.02(b)(ii) (Second Tranche Purchase Price).

“Second Tranche Escrow Payment” has the meaning set forth in Section 2.02(b)(ii)
(Second Tranche Purchase Price).

“Second Tranche Final Payment” has the meaning set forth in Section 2.02(b)(iv)
(Second Tranche Purchase Price).

“Second Tranche Fixed Cash Payment” has the meaning set forth in Section
2.02(b)(i) (Second Tranche Purchase Price).

“Second Tranche Purchase Price” has the meaning set forth in Section 2.02(b)
(Second Tranche Purchase Price).

“Second Tranche Shares” means those Shares held by the Second Closing
Shareholders and identified on Exhibit 7 attached hereto as being sold in the
Second Closing, which shall include all issued and outstanding Shares not
transferred to Buyer at the First Closing.

“Shareholder” has the meaning set forth in the Preamble.

“Shareholder Agreement” means that certain Shareholder Agreement of the Company
among Buyer and the Shareholders dated as of the First Closing Date, which
agreement shall include an agreement by all Shareholders to name Buyer as
irrevocable proxy to vote the Second Tranche Shares attached hereto as Exhibit
8.

“Shareholder Indemnitees” has the meaning set forth in Section 8.03
(Indemnification By Buyer and Parent).

“Shareholder Representative” has the meaning set forth in Section 5.09
(Shareholder Representative).

“Shareholder Transaction Expenses” has the meaning set forth in Section 5.02
(Expenses).

“Shareholders’ Accountants” means Carr Accounting or such other accountants as
may be designated by Shareholder Representative in writing to Buyer from time to
time.

“Shares” has the meaning set forth in the recitals.

“Software” means Brink POS Software suite and associated modules, a cloud-based
point of sale and restaurant management application primarily intended for use
by operators of restaurants and other food service industry providers.

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“Software Revenue” means revenue generated from (a) recurring
software-as-a-service fees for the Software, (b) end user Software license fees,
and (c) Software maintenance revenue (in each case, with respect to the Software
as it is constituted as of the date of generation), all of which shall be
measured as recognized in accordance with GAAP.

“Statement of Objections” has the meaning set forth in Section 2.04(b)(ii)
(Examination and Review Period).

“Straddle Period” has the meaning set forth in Section 6.04 (Straddle Period).

“Taxes” means all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer, franchise, registration,
profits, license, lease, service, service use, withholding, payroll, employment,
unemployment, estimated, excise, severance, environmental, stamp, occupation,
premium, property (real or personal), real property gains, windfall profits,
customs, duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.

“Tax Claim” has the meaning set forth in Section 6.06 (Contests).

“Tax Losses” has the meaning set forth in Section 6.03 (Tax Losses).

“Tax Return” means any return, declaration, report, claim for refund,
information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

“Territory” means the United States of America.

“Third Party Claim” has the meaning set forth in Section 8.05(a) (Third Party
Claims).

“Total R&D Expense” means the aggregate expenses related solely to the
development of the Software (allocated as necessary by mutual agreement for
persons not solely working with or on the Software) accrued during a particular
Calculation Period in the following expense categories, subject to the
applicable maximum identified for the relevant Calculation Period as set forth
in Exhibit 9 attached hereto: (a) personnel-related expenses, including wages,
salary, bonus, benefits, and expenses related to the employment of personnel in
the following functions:  (i) product management; (ii) developers (including
third party/off-shore development); (iii) development management; (iv) quality
assurance; (v) quality assurance management; and (vi) database analyst; plus (b)
other costs related to engineering development and quality assurance tools and
applications, both (a) and (b) as mutually agreed to by Buyer and Shareholder’s
Representative, reduced by (c) any credits to expense for mutually agreed to
customization or build-to-order projects for or of the Software.

“Transaction Documents” means this Agreement and the Escrow Agreement, the
Employment Agreements and the Shareholders Agreement.

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“Treasury Regulations” means the United States Treasury regulations promulgated
under the Code.
 
“Undisputed Amounts” has the meaning set forth in Section 2.04(b)(iii)
(Examination and Review Period).
 
“Union” has the meaning set forth in Section 3.21(b) (Employment Matters).

“WARN Act” means the federal Worker Adjustment and Retraining Notification Act
of 1988, and similar state, local and foreign laws related to plant closings,
relocations, mass layoffs and employment losses.
 
ARTICLE II
PURCHASE AND SALE
 
Section 2.01             Purchase and Sale. Subject to the terms and conditions
set forth herein, Shareholders shall sell to Buyer, and Buyer shall purchase
from Shareholders, the Shares, free and clear of all Encumbrances, for the
consideration specified in Section 2.02 (Purchase Price).

(a)                First Tranche. On the First Closing Date, the First Closing
Shareholders will sell and Buyer will purchase the First Tranche Shares for the
First Tranche Purchase Price as hereinafter provided (“First Closing”). At or
prior to the First Closing, each Shareholder shall deliver to Buyer a duly
executed letter of transmittal in the form provided by Buyer (“Letter of
Transmittal”) that has been completed in accordance with the instructions
thereto (which Letters of Transmittal may be modified by the subject
Shareholder(s) by written notice to Buyer as to the directions for making
payment to such Shareholder(s) at least two Business Days prior to the date of
the applicable payment).  Such Letter of Transmittal shall advise each First
Closing Shareholder of the procedure for surrendering his or her First Tranche
Shares in connection with the First Closing in consideration of such
Shareholder’s Pro Rata Share of the First Tranche Purchase Price (as set forth
adjacent to such Shareholder’s name on Exhibit 2 attached hereto) payable in
accordance with Section 2.02(a) (First Tranche Purchase Price) below.

(b)                Second Tranche. Subject to the consummation of the First
Closing, on the Second Closing Date, the Second Closing Shareholders will sell
and the Buyer will purchase the Second Tranche Shares for the Second Tranche
Purchase Price as hereinafter provided (“Second Closing”).  The Letter of
Transmittal shall advise each Second Closing Shareholder of the procedure for
surrendering and releasing from escrow his or her Second Tranche Shares in
connection with the Second Closing in consideration of such Shareholder’s Pro
Rata Share of the Second Tranche Purchase Price (as set forth adjacent to such
Shareholder’s name on Exhibit 7 attached hereto) payable in accordance with
Section 2.02(b) (Second Tranche Purchase Price) below.

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Section 2.02             Purchase Price.

(a)               First Tranche Purchase Price. The purchase price for the First
Tranche Shares shall be five million dollars ($5,000,000.00) (“First Tranche
Purchase Price”), reflecting a per Share purchase price of approximately $9.27,
payable by wire transfer of immediately available funds on the First Closing
Date to an account or accounts designated to Buyer in the applicable Letters of
Transmittal.

(b)               Second Tranche Purchase Price. The purchase price for the
Second Tranche Shares shall be five million dollars ($5,000,000.00) (“Second
Tranche Purchase Price”), reflecting a per Share purchase price of approximately
$9.65, payable by wire transfer of immediately available funds as follows:

(i)                  two million dollars ($2,000,000.00) on the Second Closing
Date to an account or accounts designated to Buyer in the applicable Letters of
Transmittal (“Second Tranche Fixed Cash Payment”);

(ii)                 the aggregate estimated maximum amount of any
indemnification claims of which Buyer has notified the Shareholder
Representative on or prior to the Second Closing Date that Buyer may have
pursuant to this Agreement up to a maximum of one million dollars ($1,000,000)
(the amount of such claims the “Second Tranche Escrow Payment”), on the Second
Closing Date to an account designated by the Escrow Agent, to be held in escrow
until final resolution of such claim or claims in accordance with the Escrow
Agreement, provided, however, that if the total amount of such claims of which
Buyer has notified the Stockholder Representative is less than the Basket, the
Second Tranche Escrow Payment shall be zero;

(iii)              an amount equal to the difference of (A) one million dollars
($1,000,000.00) less (B) the Second Tranche Escrow Payment, (such difference the
“Second Tranche Contingent Cash Payment”) payable on the Second Closing Date to
the account or accounts designated to Buyer in the applicable Letters of
Transmittal; provided, however, if such amount does not equal a positive
integer, no payment shall be due under this Section 2.02(b)(iii) (Purchase
Price); and

(iv)               two million dollars ($2,000,000.00) payable by wire transfer
of immediately available funds on the date of the first anniversary of the
Second Closing Date (“Second Tranche Final Payment”) to an account or accounts
designated to Buyer in the applicable Letters of Transmittal.

(c)                Purchase Price Adjustment. The Aggregate Purchase Price shall
be subject to adjustment pursuant to Section 2.04 (Purchase Price Adjustment)
hereof, which adjustment shall be applied against payments due to Shareholders
hereunder until offset in full.

(d)                [Intentionally Omitted.]

(e)                Earn-Out Payments.

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(i)                  As additional consideration for the Shares and the other
promises and covenants contained herein, and subject to and as a condition of
each Shareholder’s compliance with, and fulfillment of, its obligations and
covenants hereunder, Buyer shall pay each Shareholder with respect to each
Calculation Period an amount calculated in accordance with this Section 2.02(e)
(Earn-Out Payments) its Pro Rata Share of up to an aggregate maximum (for any
Calculation Period and in the aggregate for all Calculation Periods) of seven
million dollars ($7,000,000) (each an “Earn-Out Payment” and, collectively, the
“Earn-Out Payments”).

(ii)                 Each Earn-Out Payment, if any, shall be payable by wire
transfer of immediately available funds to the account or accounts designated to
Buyer in the Letters of Transmittal on the date that is two Business Days
following the public release of final audited consolidated financial results in
Parent’s Form 10-K for each Calculation Period (“Earn-Out Payment Date”). Each
Shareholder shall receive a portion of each Earn-Out Payment equal to such
Shareholder’s Pro Rata Share as set forth on Exhibit 2 attached hereto.

(iii)                The Earn-Out Payment for each Calculation Period, if any,
shall be an amount equal to: (A) the sum of (1) Direct Software Revenue plus (2)
Indirect Software Revenue minus (3) Total R&D Expense, multiplied by (B) the
product of (1) the Earn-Out Percentage multiplied by (2) the Achievement
Percentage; provided, however, if the Achievement Percentage for a particular
Calculation Period does not equal or exceed seventy five percent (75%), no
Earn-Out Payment shall be due or payable for such Calculation Period.

(iv)               Procedures Applicable to Determination of Earn-Out Payments.

(A)           By February 15 of each year from 2016 through 2019, inclusive
(each such date, an “Earn-Out Calculation Delivery Date”), Buyer shall prepare
and deliver to Shareholder Representative a written statement (in each case, an
“Earn-Out Calculation Statement”) setting forth in reasonable detail its
calculation of the resulting Earn-Out Payment (in each case, an “Earn-Out
Calculation”). No later than the fifteenth (15th) Business Day of each month
from January 2015 through December 2018, inclusive, Buyer shall also prepare and
deliver to the Shareholder Representative a written statement setting forth in
reasonable detail its calculation of the Earn-Out Payment earned through the end
of the immediately preceding month  in such Calculation Period.

(B)            Shareholder Representative shall have fifteen (15) Business Days
after receipt of the Earn-Out Calculation Statement for each Calculation Period
(in each case, the “Earn-Out Review Period”) to review the Earn-Out Calculation
Statement and the Earn-Out Calculation set forth therein. During the Earn-out
Review Period, Shareholders Accountants shall have the right to inspect only
those Company books and records supporting the Earn-Out Calculation during
normal business hours at the Company’s offices, upon reasonable prior notice and
solely for purposes reasonably related to the determinations of the Earn-Out
Payment. Prior to the expiration of the Earn-out Review Period, Shareholder
Representative may object to the Earn-Out Calculation set forth in the Earn-Out
Calculation Statement for the applicable Calculation Period by delivering a
written notice of objection (an “Earn-Out Calculation Objection Notice”) to
Buyer.

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(C)            Any Earn-Out Calculation Objection Notice shall specify the items
in the applicable Earn-Out Calculation disputed by Shareholder Representative
and shall describe in reasonable detail the basis for such objection, as well as
the amount in dispute. If Shareholder Representative fails to deliver an
Earn-Out Calculation Objection Notice to Buyer prior to the expiration of the
Earn-out Review Period, then the Earn-Out Calculation set forth in the Earn-Out
Calculation Statement shall be final and binding on the parties hereto. If
Shareholder Representative timely delivers an Earn-Out Calculation Objection
Notice, Buyer and Shareholder Representative shall negotiate in good faith to
resolve the disputed items and agree upon the resulting amount of the Earn-Out
Payment for the applicable Calculation Period. If Buyer and Shareholder
Representative are unable to reach agreement within ten (10) calendar days after
such an Earn-Out Calculation Objection Notice has been given, all unresolved
disputed items shall be promptly submitted for resolution to the office of an
impartial nationally recognized firm of independent certified public accountants
other than Shareholders’ Accountants or Buyer’s Accountants selected by mutual
agreement of Buyer and Shareholder Representative (the “Independent
Accountant”). The Independent Accountant shall be directed to render a written
report on the unresolved disputed items with respect to the applicable Earn-Out
Calculation as promptly as practicable, but in no event greater than thirty (30)
calendar days after such submission to the Independent Accountant, and to
resolve only those unresolved disputed items set forth in the Earn-Out
Calculation Objection Notice. If unresolved disputed items are submitted to the
Independent Accountant, Buyer and Shareholder Representative shall each furnish
to the Independent Accountant such work papers, schedules and other documents
and information relating to the unresolved disputed items as the Independent
Accountant may reasonably request. The Independent Accountant shall resolve the
disputed items based solely on the applicable definitions and other terms in
this Agreement and the presentations by Buyer and Shareholder Representative,
and not by independent review. The resolution of the dispute and the calculation
of Earn-Out Payment that is the subject of the applicable Earn-Out Calculation
Objection Notice by the Independent Accountant shall be final and binding on the
parties hereto. The fees and expenses of the Independent Accountant shall be
borne by Shareholders and Buyer in proportion to the amounts by which their
respective calculations differ from the Earn-Out Calculations as finally
determined by the Independent Accountant.

(v)                In the event of a Change of Control of Parent prior to the
Earn-Out Payment Date occurring in 2019, Parent shall cause the Person acquiring
control of Parent to expressly assume Parent’s obligations under this
Agreement.  In the event of a Change of Control of Buyer or a Change of Control
of a (direct or indirect) subsidiary of Parent that owns the Software prior to
the Earn-Out Payment Date occurring in 2019, Parent shall cause the Person
acquiring control of Buyer or such other Person to expressly assume Buyer’s
obligations under this Section 2.02(e) (Earn-Out Payments).  In the event of a
transfer of title or exclusive license of the Software prior to the Earn-Out
Payment Date occurring in 2019, Parent shall cause the Person acquiring title to
the Software or so licensing the Software to expressly assume Buyer’s
obligations under this Section 2.02(e) (Earn-Out Payments).

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(vi)              Subsequent to the First Closing through the earlier of
December 31, 2018 or full payment of the maximum amount of Earn-Out Payments, it
is Buyer’s intention to:

(A)           take such measures as are reasonably required to assist in the
generation of Software Revenue adequate to cause full payment of the Earn-Out
Payments, including (i) actively promoting sales of the Software through those
existing sales channels of Buyer and/or Parent which are reasonably appropriate
to the Software’s potential customers whose requirements match the current
Software functionality (referred to herein as the Software’s “Addressable
Market”), (ii) prioritizing such sales of the Software within the then-current
Addressable Market  , and (iii) prioritizing sales of the Software versus any
existing Parent or Buyer software products or services that might compete with
or be a substitute for the Software (except that Buyer and/or Parent may
continue to prioritize sales of existing products in table service and
international markets);

(B)            take such measures as are reasonably required to maintain and
expand the addressable market by investing in the development of the Software;

(C)            provide reasonable customer support;

(D)            involve the Shareholder Representative in any strategic decisions
of either Parent or Buyer that may result in a material reduction or delay in
the timing of recognition of Software Revenue or a material increase in Total
R&D Expense;

(E)            not terminate the Insider Shareholders without Cause (as defined
in the Employment Agreement); and

(F)            not permit any condition to exist that would, upon an Insider
Shareholder’s resignation, constitute termination for Good Reason (as defined in
the Employment Agreement).

(vii)            Earn-Out Impairment.

(A)            In the event that, prior to December 31, 2018 or full payment of
the maximum amount of Earn-Out Payments, any action or inaction of Buyer or
Parent occurs that the Shareholder Representative believes in good faith has not
materially conformed to subsections (vi)(A) through (F) above (any of the
foregoing a “Change in Strategic Direction”), the Shareholder Representative
shall notify Buyer in writing within thirty (30) days of its knowledge that the
events giving rise to such Change in Strategic Direction have occurred (such
notice an “Impairment Notice”) of: (1) the occurrence of a Change in Strategic
Direction, (2) the events constituting such Change in Strategic Direction, and
(3) the Shareholder Representative’s good faith estimate of the amount by which
the Earn-Out Payments for each Calculation Period affected by such Change in
Strategic Direction has been reduced or is likely to be reduced, as compared to
the expected amount the Earn-Out Payment for each such Calculation Period had
such Change in Strategic Direction not occurred (the aggregate amount of all
such reductions for all Calculation Periods the “Earn-Out Impairment”). For the
avoidance of doubt, no Change in Strategic Direction shall have occurred on the
basis of any events to which the Shareholder Representative shall have consented
in writing.

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(B)            Buyer shall have thirty (30) days after its receipt of the
Impairment Notice to respond in writing thereto.  If Buyer disagrees a Change in
Strategic Direction has occurred or as to the amount of the Earn-Out Impairment,
Buyer shall notify the Shareholder Representative and such notice to the
Shareholder Representative shall be a “Dispute Notice” and such dispute shall be
a “Dispute” pursuant to Section 10.09(c) (Governing Law; Dispute Resolution) and
such Dispute shall be resolved in accordance with such section.  If the Buyer
does not so respond within such thirty (30) day period, the Buyer shall be
deemed to have rejected the amount of the Earn-Out Impairment, in which case the
Shareholder Representative shall be free to pursue such remedies as may be
available to the Shareholder Representative pursuant to Section
10.09(c) (Governing Law; Dispute Resolution); provided, however, the sole
matters to be determined pursuant to any arbitration of a Dispute concerning an
Earn-Out Impairment shall be (1) whether a Change in Strategic Direction
occurred and (2) if so, the amount of the Earn-Out Impairment.

(C)            Any Earn-Out Impairment amount either agreed to by Buyer and the
Shareholder Representative or determined by an arbitrator pursuant to Section
10.10(c) (Governing Law; Dispute Resolution) shall be paid by Buyer in equal
installments over the remaining Earn-Out Payment Dates in addition to any
Earn-Out Payment otherwise due on such date, subject in all cases to the
requirement that the total amount of Earn-Out Payments and Earn-Out Impairment
amounts shall not exceed $7,000,000.

(D)            Nothing contained herein shall limit Buyer’s right and obligation
to exercise reasonable business judgment and to discharge fiduciary
responsibilities to shareholders and shareholders of Parent in connection with
conducting the business of the Company, subject to Buyer’s obligation to make
any payments required by this Section.

(viii)            The parties hereto understand and agree that (A) the
contingent rights to receive any Earn-Out Payment shall not be represented by
any form of certificate or other instrument, are not transferable, except by
operation of Laws relating to descent and distribution, divorce and community
property, and do not constitute an equity or ownership interest in Buyer or the
Company, (B) Shareholders shall not have any rights as a security holder of
Buyer or the Company as a result of Shareholders’ contingent rights to receive
any Earn-Out Payment hereunder, and (C) no interest is payable with respect to
any Earn-Out Payment.

(f)                 Buyer shall have the right to withhold and set off against
any amount otherwise due to be paid pursuant to this Section 2.02 (Purchase
Price) the amount of (i) any Purchase Price Adjustment owed to it pursuant to
Section 2.04 (Purchase Price Adjustment) and (ii) any Losses to which any Buyer
Indemnitee may be entitled under Article VIII (Indemnification) of this
Agreement or any other Transaction Document.

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Section 2.03             Transactions to be Effected at the Closings.

(a)                At the First Closing, Buyer shall deliver (or cause to be
delivered) to the First Closing Shareholders, in the case of subsection (i) and,
otherwise, to the Shareholder Representative:

(i)                  each First Closing Shareholder’s Pro Rata Share of the
First Tranche Purchase Price (as set forth adjacent to such Shareholder’s name
on Exhibit 2 attached hereto);

(ii)                duly executed counterparts of each of the Transaction
Documents;

(iii)               duly executed counterparts of all approvals, consents and
waivers that are listed on Schedule 4.02 of the Disclosure Schedules;

(iv)               a certificate of the Secretary or an Assistant Secretary (or
equivalent officer) of Buyer certifying that attached thereto are true and
complete copies of all resolutions adopted by the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated hereby and thereby;

(v)                a certificate of the Secretary or an Assistant Secretary (or
equivalent officer) of Parent certifying that attached thereto are true and
complete copies of all resolutions adopted by the board of directors of Parent
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated hereby and thereby;

(vi)               a certificate of the Secretary or an Assistant Secretary (or
equivalent officer) of Buyer certifying the names and signatures of the officers
of Buyer authorized to sign this Agreement, the Transaction Documents and the
other documents to be delivered hereunder and thereunder;

(vii)             certificate of the Secretary or an Assistant Secretary (or
equivalent officer) of Parent certifying the names and signatures of the
officers of Buyer authorized to sign this Agreement, the Transaction Documents
and the other documents to be delivered hereunder and thereunder; and,

(viii)            such other documents or instruments as Shareholders reasonably
request and are reasonably necessary to consummate the transactions contemplated
by this Agreement.

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(b)                 At the First Closing, the Shareholders shall deliver (or
cause to be delivered):

(i)                  to Buyer, stock certificates evidencing the First Tranche
Shares, free and clear of all Encumbrances, duly endorsed in blank or
accompanied by stock powers or other instruments of transfer duly executed in
blank, with associated Letters of Transmittal;

(ii)                 to Buyer, duly executed counterparts of the Transaction
Documents;

(iii)               to Buyer, duly executed counterparts of all approvals,
consents and waivers that are listed on Schedule 3.05 of the Disclosure
Schedules;

(iv)               to Buyer, a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Company certifying that attached
thereto are true and complete copies of all resolutions adopted by the board of
directors of Company (i) authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents, (ii) the consummation of the
transactions contemplated hereby and thereby and (iii) appointing new officers
and directors of the Company designated by Buyer, and that all such resolutions
are in full force and effect and are all the resolutions adopted in connection
with the transactions contemplated hereby and thereby;

(v)                to Buyer, a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Company certifying the names and
signatures of the officers of Company authorized to sign this Agreement, the
Transaction Documents and the other documents to be delivered hereunder and
thereunder;

(vi)               to Buyer, a good standing certificate (or its equivalent) for
the Company from the secretary of state or similar Governmental Authority of the
jurisdiction under the Laws in which the Company is organized;

(vii)             to Buyer a certificate from the Company and each Shareholder
pursuant to Treasury Regulations Section 1.1445-2(b) that the Company or such
Shareholder, as applicable, is not a foreign person within the meaning of
Section 1445 of the Code;

(viii)            to Buyer, written resignations, effective as of the First
Closing Date, of all directors of the Company and such officers of the Company
as requested by Buyer prior to such date;

(ix)              to Buyer, evidence reasonably satisfactory to Buyer that the
Company has (A) secured the employment of all Material Employees;  (B)
terminated the employment of employees of the Company other than Key Employees
or Materials Employees; and (C) terminated all employment or similar agreement
binding on the Company, with the exception of the Employment Agreements;

(x)                 to Buyer, evidence of the termination or amendment of each
of the Company Contracts identified by the mutual agreement of Buyer and
Shareholder Representative and set forth on Exhibit 10 attached hereto;

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(xi)               to Buyer, a certificate of an executive officer of the
Company identifying all unpaid Company Transaction Expenses and certifying that
the Company has no payment obligations with respect to the Company Transaction
Expenses other than those identified therein;

(xii)              to Buyer, evidence of the payment of all outstanding Company
Indebtedness disclosed on Schedule 3.23 of the Disclosure Schedules and a
certificate of an executive officer of the Company certifying that the Company
has no outstanding Company Indebtedness as of the First Closing Date and that
the properties and assets (including leasehold interests) of the Company are
free and clear of Encumbrances;

(xiii)             to Buyer, such other documents or instruments as Buyer
reasonably requests and are reasonably necessary to consummate the transactions
contemplated by this Agreement;

 
(xiv)            to the Escrow Agent, stock certificates evidencing the Second
Tranche Shares, free and clear of all Encumbrances, duly endorsed in blank or
accompanied by stock powers or other instruments of transfer duly executed in
blank; and,

(xv)              to the Escrow Agent, the stock transfer records of the Company
and any blank stock certificates.

(c)                At the Second Closing, Buyer shall deliver (or cause to be
delivered):

(i)                  to the Escrow Agent for delivery to the Second Closing
Shareholders in accordance with the terms of the Escrow Agreement, such
Shareholder’s  Pro Rata Share of Second Tranche Fixed Cash Payment and the
Second Tranche Contingent Cash Payment, if any (as set forth adjacent to such
Shareholder’s name on Exhibit 7 attached hereto), subject to any Post Closing
Adjustment pursuant to Section 2.04 (Purchase Price Adjustment);

(ii)                 to the Shareholder Representative, such other documents or
instruments as Shareholders reasonably request and are reasonably necessary to
consummate the transactions contemplated by this Agreement; and,

(iii)               to the Escrow Agent, the Second Tranche Escrow Payment, if
any.

(d)                At the Second Closing, Shareholders shall deliver (or cause
to be delivered):

(i)                  to Buyer, a certificate dated as of the Second Closing Date
and signed by each Shareholder that the representations and warranties of the
Shareholders contained in contained in Section 3.01 (Authority of Shareholders)
are true and correct in all respects on and as of Second Closing Date with the
same effect as though made at and as of such date; and,

(ii)                 to Buyer, such other documents or instruments as Buyer
reasonably requests and are reasonably necessary to consummate the transactions
contemplated by this Agreement.

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Section 2.04              Purchase Price Adjustment.

(a)                 Post-Closing Adjustment.

(i)                  As soon as reasonably practical following the First Closing
Date, and in any event within sixty (60) days thereof, Buyer share prepare and
deliver to Shareholder Representative (A) an unaudited balance sheet of the
Company as of 11:59 p.m. PT on the First Closing Date (the “Closing Date Balance
Sheet”) and (B) calculations of the Net Assets as reflected on (1) the Interim
Balance Sheet (“Estimated Net Assets”) and (2) the Closing Date Balance Sheet
(“Closing Date Net Assets”) (such calculations, collectively, the “Net Asset
Calculations”). The Closing Date Balance Sheet shall be prepared on a consistent
basis with the preparation of the Interim Balance Sheet.

(ii)                 The post-closing adjustment shall be an amount, which may
be positive or negative, equal to the Closing Date Net Assets minus the
Estimated Net Assets (the “Post-Closing Adjustment”). If the Post-Closing
Adjustment is a positive number in excess of fifty thousand dollars
($50,000.00), the Second Tranche Purchase Price shall be increased by the amount
of the Post-Closing Adjustment less $50,000. If the Post-Closing Adjustment is a
negative number, the Second Tranche Purchase Price shall be reduced by the
amount of the Post-Closing Adjustment (expressed as a positive integer) less
$50,000, applied in the following order: first to reduce the Second Tranche
Fixed Cash Payment and then, as necessary until such adjustment is entirely set
off, to reduce the Second Tranche Contingent Cash Payment, Second Tranche Final
Payment and any Earn-Out Payment.

(b)                Examination and Review.

(i)                  After receipt of the Closing Date Balance Sheet and Net
Asset Calculations, Shareholder Representative shall have thirty (30) days (the
“Review Period”) to review the Closing Date Balance Sheet and Net Asset
Calculations. During the Review Period, Shareholder Representative and
Shareholders Accountants shall have the right to inspect only those Company
books and records supporting the Net Asset Calculations during normal business
hours at the Company’s offices, upon reasonable prior notice and solely for
purposes reasonably related to the determination of the Net Asset Calculations
and the Post-Closing Adjustment. Prior to the expiration of the Review Period,
Shareholder Representative may object to the Net Asset Calculations by
delivering a written notice of objection (“Statement of Objections”) to Buyer.

(ii)                 Any Statement of Objection shall specify the items in the
Net Asset Calculation disputed by Shareholder Representative and shall describe
in reasonable detail the basis for such objection, as well as the amount in
dispute. If Shareholder Representative fails to deliver the Statement of
Objections before the expiration of the Review Period, the Closing Date Balance
Sheet, Net Asset Calculations and the Post-Closing Adjustment shall be final and
binding on the parties hereto. If Shareholder Representative timely delivers the
Statement of Objections before the expiration of the Review Period, Buyer and
Shareholders shall negotiate in good faith to resolve such objections within
thirty (30) days after the delivery of the Statement of Objections (the
“Resolution Period”), and, if the same are so resolved within the Resolution
Period, the Closing Date Balance Sheet, Net Asset Calculations and the
Post-Closing Adjustment with such changes as may have been previously agreed in
writing by Buyer and Shareholders, shall be final and binding.

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(iii)               If Shareholders and Buyer fail to reach an agreement with
respect to all of the matters set forth in the Statement of Objections before
expiration of the Resolution Period, then any amounts remaining in dispute
(“Disputed Amounts” and any amounts not so disputed, the “Undisputed Amounts”)
shall be submitted for resolution to the office of the Independent Accountant
who, acting as experts and not arbitrators, shall resolve the Disputed Amounts
only and make any adjustments to the Post-Closing Adjustment, as the case may
be, and the Closing Date Balance Sheet. The parties hereto agree that all
adjustments shall be made without regard to materiality. The Independent
Accountant shall only decide the specific items under dispute by the parties and
their decision for each Disputed Amount must be within the range of values
assigned to each such item in the Net Asset Calculations and the Statement of
Objections, respectively.

(iv)               The fees and expenses of the Independent Accountant shall be
paid by Shareholders, on the one hand, and by Buyer, on the other hand, based
upon the percentage that the amount actually contested but not awarded to
Shareholders or Buyer, respectively, bears to the aggregate amount actually
contested by Shareholders and Buyer.

(v)                 The Independent Accountant shall make a determination as
soon as practicable within thirty (30) days (or such other time as the parties
hereto shall agree in writing) after their engagement, and their resolution of
the Disputed Amounts and their adjustments to the Post-Closing Adjustment shall
be conclusive and binding upon the parties hereto.

(c)                Adjustments for Tax Purposes. Any payments made pursuant to
Section 2.04 (Purchase Price Adjustment) shall be treated as an adjustment to
the Purchase Price by the parties for Tax purposes, unless otherwise required by
Law.

Section 2.05             Closing.

(a)                 First Closing. Subject to the terms and conditions of this
Agreement, the First Closing shall be consummated remotely via the electronic
exchange of documents and signatures on the date hereof or on such other date as
the Shareholder Representative and Buyer may mutually agree upon in writing (the
day on which the First Closing takes place being the “First Closing Date”).

(b)                Second Closing. Subject to the terms and conditions of this
Agreement, the Second Closing shall be consummated remotely via the electronic
exchange of documents and signatures on the first anniversary of the First
Closing Date (or, if such date fall on a non-Business Day, the next subsequent
Business Day) or on such other date or at such other place as the Shareholder
Representative and Buyer may mutually agree upon in writing (the day on which
the Second Closing takes place being the “Second Closing Date”).

Section 2.06             Withholding Tax. Buyer and the Company shall be
entitled to deduct and withhold from the Purchase Price all Taxes that Buyer and
the Company may be required to deduct and withhold under any provision of Tax
Law. All such withheld amounts shall be treated as delivered to Shareholders
hereunder.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS AND THE COMPANY
 
Except as set forth in the correspondingly numbered schedules of the Disclosure
Schedules, (i) solely with respect to Section 3.01 (Authority of Shareholders),
each Shareholder severally represents and warrants, and (ii) solely with respect
to Sections 3.02 (Organization, Authority and Qualification of the Company)
through Section 3.26 (Full Disclosure), the Insider Shareholders and the Company
jointly and severally represent and warrant that the statements contained in
this Article III (Representations and Warranties of Shareholders and the
Company) are true, correct and not misleading as of the date hereof.

Section 3.01            Authority of Shareholders. Each Shareholder has full
legal capacity and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. This Agreement has been, and
the other agreements and documents contemplated hereby have been or at the
applicable Closing will be, duly executed by such Shareholder and will
constitute the legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with its respective terms and
conditions, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws and judicial decisions affecting the rights of
creditors generally and by general principles of equity (whether applied in a
proceeding at law or in equity). The execution, delivery and (provided required
regulatory approvals are obtained) performance of this Agreement and
consummation of the transaction contemplated hereby will not conflict with or
result by itself or with giving of notice or passage of time any mortgage
indenture, lease, contract, agreement or other instrument applicable to such
Shareholder. Upon the consummation of the transactions contemplated by this
Agreement, Buyer shall own all of the Shares held by each Shareholder free and
clear of all Encumbrances.

Section 3.02             Organization, Authority and Qualification of the
Company. The Company is a corporation duly organized, validly existing and in
good standing under the Laws of the state of California and has full corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been and
is currently conducted. Schedule 3.02 of the Disclosure Schedules sets forth
each jurisdiction in which the Company is licensed or qualified to do business,
and the Company is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the operation of its business as currently conducted makes such licensing or
qualification necessary. All corporate actions taken by the Company in
connection with this Agreement and the other Transaction Documents, if any, to
which it is a party will be duly authorized on or prior to the Closing.

Section 3.03             Capitalization.

(a)                 The authorized capital stock of the Company consists of
5,000,000 shares of common stock, no par value (“Common Stock”), of which
1,057,194 shares are issued and outstanding and constitute the Shares. All of
the Shares have been duly authorized, are validly issued, fully paid and
non-assessable, and are owned of record and beneficially by the Shareholders,
free and clear of all Encumbrances other than any applicable community property
rights. Upon consummation of the transactions contemplated by this Agreement,
Buyer shall own all of the Shares, free and clear of all Encumbrances.

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(b)                All of the Shares were issued in compliance with applicable
Laws. None of the Shares were issued in violation of any agreement, arrangement
or commitment to which any Shareholders or the Company is a party or is subject
to or in violation of any preemptive or similar rights of any Person.

(c)                There are no outstanding or authorized options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the capital stock of the Company or obligating any
Shareholder or the Company to issue or sell any shares of capital stock of, or
any other interest in, the Company. The Company does not have outstanding or
authorized any stock appreciation, phantom stock, profit participation or
similar rights. There are no voting trusts, stockholder agreements, proxies or
other agreements or understandings in effect with respect to the voting or
transfer of any of the Shares.

Section 3.04             No Subsidiaries. The Company does not own, or have any
interest in any shares or have an ownership interest in any other Person.

Section 3.05             No Conflicts; Consents. The execution, delivery and
performance by the Company and each Shareholder of this Agreement and the other
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (a) conflict
with or result in a violation or breach of, or default under, any provision of
the certificate of incorporation, by-laws or other organizational documents of
the Company; (b) conflict with or result in a violation or breach of any
provision of any Law or Governmental Order applicable to the Company or any
Shareholder; (c) except as set forth in Schedule 3.05 of the Disclosure
Schedules, require the consent, notice or other action by any Person under,
conflict with, result in a violation or breach of, constitute a default or an
event that, with or without notice or lapse of time or both, would constitute a
default under, result in the acceleration of or create in any party the right to
accelerate, terminate, modify or cancel any Contract to which the Company or any
Shareholder is a party or by which the Company or any Shareholder is bound or to
which any of their respective properties and assets are subject (including any
Material Contract) or any Permit affecting the properties, assets or business of
the Company; or (d) result in the creation or imposition of any Encumbrance
other than Permitted Encumbrances on any properties or assets of the Company. No
consent, approval, Permit, Governmental Order, declaration or filing with, or
notice to, any Governmental Authority is required by or with respect to any
Shareholder or the Company in connection with the execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby.

Section 3.06             Financial Statements. Complete copies of the Company’s
internally-prepared unaudited financial statements consisting of the balance
sheet of the Company as at December 31, 2013 and the related statements of
income and retained earnings, stockholders’ equity and cash flow for the years
then ended (the “Internal Financial Statements”), and internally-prepared
unaudited financial statements consisting of the balance sheet of the Company as
at June 30, 2014 and the related statements of income and retained earnings,
stockholders’ equity and cash flow for the six-month period then ended (the
“Interim Financial Statements” and together with the Internal Financial
Statements, the “Financial Statements”) have been delivered to Buyer. The
Financial Statements are based on the books and records of the Company, and
fairly present the financial condition of the Company as of the respective dates
they were prepared and the results of the operations of the Company for the
periods indicated. The balance sheet of the Company as of December 31, 2013 is
referred to herein as the “Balance Sheet” and the date thereof as the “Balance
Sheet Date” and the balance sheet of the Company as of June 30, 2014 is referred
to herein as the “Interim Balance Sheet” and the date thereof as the “Interim
Balance Sheet Date”.

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Section 3.07             Undisclosed Liabilities. The Company has no
liabilities, obligations or commitments, absolute or contingent, accrued or
unaccrued, matured or unmatured (“Liabilities”), except (a) those which are
reflected or reserved against in the Interim Balance Sheet as of the Interim
Balance Sheet Date, and (b) those which have been incurred in the ordinary
course of business consistent with past practice since the Interim Balance Sheet
Date and which are not, individually or in the aggregate, material in amount or
(c) those that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

Section 3.08             Absence of Certain Changes, Events and Conditions.
Since the Interim Balance Sheet Date, and other than in the ordinary course of
business consistent with past practice, there has not been, with respect to the
Company, any:

(a)                event, occurrence or development that has had, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

(b)                amendment of the charter, by-laws or other organizational
documents of the Company;

(c)                split, combination or reclassification of any shares of its
capital stock;

(d)                issuance, sale or other disposition of any of its capital
stock, or grant of any options, warrants or other rights to purchase or obtain
(including upon conversion, exchange or exercise) any of its capital stock;

(e)                declaration or payment of any dividends or distributions on
or in respect of any of its capital stock or redemption, purchase or acquisition
of its capital stock;

(f)                 material change in any method of accounting or accounting
practice of the Company, except as required by GAAP or as disclosed in the notes
to the Financial Statements;

(g)                material change in the Company’s cash management practices
and its policies, practices and procedures with respect to collection of
accounts receivable, establishment of reserves for uncollectible accounts,
accrual of accounts receivable, inventory control, prepayment of expenses,
payment of trade accounts payable, accrual of other expenses, deferral of
revenue and acceptance of customer deposits;

(h)                entry into any Contract that would constitute a Material
Contract;

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(i)                  incurrence, assumption or guarantee of any indebtedness for
borrowed money except unsecured current obligations and Liabilities incurred in
the ordinary course of business consistent with past practice;

(j)                  transfer, assignment, sale or other disposition of any of
the assets shown or reflected in the Interim Balance Sheet or cancellation of
any debts or entitlements;

(k)                transfer, assignment or grant of any license or sublicense of
any material rights under or with respect to any Company Intellectual Property
or Company IP Agreements outside the ordinary course of business;

(l)                  material damage, destruction or loss (whether or not
covered by insurance) to its property;

(m)               any capital investment in, or any loan to, any other Person;

(n)                acceleration, termination, material modification to or
cancellation of any material Contract (including, but not limited to, any
Material Contract) to which the Company is a party or by which it is bound;

(o)                any material capital expenditures;

(p)                imposition of any Encumbrance upon any of the Company
properties, capital stock or assets, tangible or intangible;

(q)               (i) grant of any bonuses, whether monetary or otherwise, or
increase in any wages, salary, severance, pension or other compensation or
benefits in respect of its current or former employees, officers, directors,
independent contractors or consultants, other than as provided for in any
written agreements or required by applicable Law, (ii) change in the terms of
employment for any employee or any termination of any employees, or (iii) action
to accelerate the vesting or payment of any compensation or benefit for any
current or former employee, officer, director, independent contractor or
consultant;

(r)                 hiring or promoting any person as or to (as the case may be)
an officer or hiring or promoting any employee below officer except to fill a
vacancy in the ordinary course of business;

(s)                adoption, modification or termination of any: (i) employment,
severance, retention or other agreement with any current or former employee,
officer, director, independent contractor or consultant, (ii) Benefit Plan or
(iii) collective bargaining or other agreement with a Union, in each case
whether written or oral;

(t)                 any loan to (or forgiveness of any loan to), or entry into
any other transaction with, any of its stockholders or current or former
directors, officers and employees;

(u)                entry into a new line of business or abandonment or
discontinuance of existing lines of business;

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(v)                adoption of any plan of merger, consolidation,
reorganization, liquidation or dissolution or filing of a petition in bankruptcy
under any provisions of federal or state bankruptcy Law or consent to the filing
of any bankruptcy petition against it under any similar Law;

(w)               purchase, lease or other acquisition of the right to own, use
or lease any property or assets, except for purchases of inventory or supplies
in the ordinary course of business consistent with past practice;

(x)                 acquisition by merger or consolidation with, or by purchase
of a substantial portion of the assets or stock of, or by any other manner, any
business or any Person or any division thereof;

(y)               action by the Company to make, change or rescind any Tax
election, amend any Tax Return or take any position on any Tax Return, take any
action, omit to take any action or enter into any other transaction that would
have the effect of increasing the Tax liability or reducing any Tax asset of
Buyer in respect of any Post-Closing Tax Period; or

(z)                 any Contract to do any of the foregoing, or any action or
omission that would result in any of the foregoing.

Section 3.09             Material Contracts.

(a)                Section 3.09(a) of the Disclosure Schedules lists each of the
following Contracts of the Company (such Contracts, together with all Contracts
concerning the occupancy, management or operation of any Real Property
(including without limitation, brokerage contracts) listed or otherwise
disclosed in Schedule 3.10(b) of the Disclosure Schedules and all Company IP
Agreements set forth in Schedule 3.12(b) of the Disclosure Schedules, being
“Material Contracts”):

(i)                  each Contract of the Company involving aggregate
consideration in excess of $50,000 and which, in each case, cannot be cancelled
by the Company without penalty or without more than thirty (30) days’ notice;

(ii)                 all Contracts that require the Company to purchase its
total requirements of any product or service from a third party or that contain
“take or pay” provisions;

(iii)               all Contracts that provide for the indemnification by the
Company of any Person or the assumption of any Tax, environmental or other
Liability of any Person;

(iv)               all Contracts that relate to the acquisition or disposition
of any business, a material amount of stock or assets of any other Person or any
real property (whether by merger, sale of stock, sale of assets or otherwise);

(v)                all broker, distributor, dealer, manufacturer’s
representative, franchise, agency, sales promotion, market research, marketing
consulting and advertising Contracts to which the Company is a party;

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(vi)               all employment agreements and Contracts with independent
contractors or consultants (or similar arrangements) to which the Company is a
party and which are not cancellable without material penalty or without more
than thirty (30) days’ notice;

(vii)             except for Contracts relating to trade receivables, all
Contracts relating to indebtedness (including, without limitation, guarantees)
of the Company;

(viii)            all Contracts that limit or purport to limit the ability of
the Company to compete in any line of business or with any Person or in any
geographic area or during any period of time;

(ix)                any Contracts to which the Company is a party that provide
for any joint venture, partnership or similar arrangement by the Company;

(x)                 all Contracts between or among the Company on the one hand
and any Shareholder or any Affiliate of a Shareholder (other than the Company)
on the other hand;

(xi)                all collective bargaining agreements or Contracts with any
Union to which the Company is a party; and

(xii)              any other Contract that is material to the Company and not
previously disclosed pursuant to this Section 3.09 (Material Contracts).

(b)               Each Material Contract is valid and binding on the Company in
accordance with its terms and is in full force and effect. None of the Company
or, to the Company’s Knowledge, any other party thereto is in breach of or
default under (or is alleged to be in breach of or default under) in any
material respect, or has provided or received any notice of any intention to
terminate, any Material Contract. To the Company’s Knowledge, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute an event of default under any Material Contract or result in a
termination thereof or would cause or permit the acceleration or other changes
of any right or obligation or the loss of any benefit thereunder. Complete and
correct copies of each Material Contract (including all modifications,
amendments and supplements thereto and waivers thereunder) have been made
available to Buyer.

(c)                The Company is not a party to or otherwise bound by any
Contract with any Governmental Authority.

(d)                Except as set forth in Schedule 3.09(d) of the Disclosure
Schedules, Company does not have any development obligations that are
outstanding, ongoing or otherwise due or owing to any Person and, to the
Company’s Knowledge, no claim of non-performance or defect has been raised in
connection with any development deliverable. With regard to all obligations set
forth in Schedule 3.09(d) of the Disclosure Schedules, the Company expects to
complete all such obligations in accordance with (i) the time committed for
delivery and (ii) all applicable specifications.
 
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Section 3.10              Title to Assets; Real Property.

(a)                 The Company has good and valid (and, in the case of owned
Real Property, good and marketable fee simple) title to, or a valid leasehold
interest in, all Real Property and personal property and other assets reflected
in the Internal Financial Statements or acquired after the Interim Balance Sheet
Date, other than properties and assets sold or otherwise disposed of in the
ordinary course of business consistent with past practice since the Interim
Balance Sheet Date. All such properties and assets (including leasehold
interests) are free and clear of Encumbrances except for the following
(collectively referred to as “Permitted Encumbrances”):

(i)                  those items set forth in Schedule 3.10(a) of the Disclosure
Schedules;

(ii)                 liens for Taxes not yet due and payable;

(iii)                mechanics, carriers’, workmen’s, repairmen’s or other like
liens arising or incurred in the ordinary course of business consistent with
past practice or amounts that are not delinquent and which are not, individually
or in the aggregate, material to the business of the Company;

(iv)               easements, rights of way, zoning ordinances and other similar
encumbrances affecting Real Property which are not, individually or in the
aggregate, material to the business of the Company; or

(v)               other than with respect to owned Real Property, liens arising
under original purchase price conditional sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent
with past practice which are not, individually or in the aggregate, material to
the business of the Company.

(b)               Schedule 3.10(b) of the Disclosure Schedules lists (i) the
street address of each parcel of Real Property; (ii) if such property is leased
or subleased by the Company, the landlord under the lease, the rental amount
currently being paid, the expiration of the term of such lease or sublease for
each leased or subleased property, any existing option for the Company’s
extension or early termination of the term and any right of expansion for leased
space; and (iii) the current use of such property. With respect to owned Real
Property, the Company has delivered or made available to Buyer true, complete
and correct copies of the deeds and other instruments (as recorded) by which the
Company acquired such Real Property, and copies of all title insurance policies,
opinions, abstracts and surveys in the possession of the Company and relating to
the Real Property. With respect to leased Real Property, the Company has
delivered or made available to Buyer true, complete and correct copies of any
leases affecting the Real Property. The Company is not a sublessor or grantor
under any sublease or other instrument granting to any other Person any right to
the possession, lease, occupancy or enjoyment of any leased Real Property. The
use and operation of the Real Property in the conduct of the Company’s business
do not violate in any material respect any Law, covenant, condition,
restriction, easement, license, permit or agreement. No material improvements
constituting a part of the Real Property encroach on real property owned or
leased by a Person other than the Company. There are no Actions pending nor, to
the Company’s Knowledge, threatened against or affecting the Real Property or
any portion thereof or interest therein in the nature or in lieu of condemnation
or eminent domain proceedings.

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Section 3.11             Condition And Sufficiency of Assets. Except as set
forth in Schedule 3.11 of the Disclosure Schedules, the buildings, plants,
structures, furniture, fixtures, machinery, equipment, vehicles and other items
of tangible personal property of the Company are structurally sound, are in good
operating condition and repair, and are adequate for the uses to which they are
being put, and none of such buildings, plants, structures, furniture, fixtures,
machinery, equipment, vehicles and other items of tangible personal property is
in need of maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost. The buildings, plants,
structures, furniture, fixtures, machinery, equipment, vehicles and other items
of tangible personal property currently owned or leased by the Company, together
with all other properties and assets of the Company, are sufficient for the
continued conduct of the Company’s business after the First Closing in
substantially the same manner as conducted prior to the First Closing and
constitute all of the rights, property and assets necessary to conduct the
business of the Company as currently conducted.

Section 3.12              Intellectual Property.

(a)                Schedule 3.12(a) of the Disclosure Schedules lists all
Company Intellectual Property, including software, that are material to the
Company’s business or operations. The Company has no Company IP Registrations.

(b)               Schedule 3.12(b) of the Disclosure Schedules lists all Company
IP Agreements. The Insider Shareholders have provided Buyer with true and
complete copies of all such Company IP Agreements, including all modifications,
amendments and supplements thereto and waivers thereunder. Each Company IP
Agreement is valid and binding on the Company in accordance with its terms and
is in full force and effect. Neither the Company nor, to the Company’s
Knowledge, any other party thereto is in breach of or default under (or is
alleged to be in breach of or default under), or has provided or received any
notice of breach or default of or any intention to terminate, any Company IP
Agreement.

(c)                Except as set forth in Schedule 3.12(c) of the Disclosure
Schedules, the Company is the sole and exclusive legal and beneficial owner of
all right, title and interest in and to the Company Intellectual Property, and
has the valid right to use all other Intellectual Property used in or necessary
for the conduct of the Company’s current business or operations, in each case,
free and clear of Encumbrances other than Permitted Encumbrances. Without
limiting the generality of the foregoing, the Insider Shareholders have provided
the Buyer with true and complete copies of binding, written agreements with
every current and former employee of the Company, with every current and former
independent contractor, and with any other Person who has developed software
code or other Intellectual Property for on behalf of the Company, whereby such
employees, independent contractors and other Persons (i) assign to the Company
any ownership interest and right they may have in the Company Intellectual
Property; (ii) acknowledge the Company’s exclusive ownership and use of all
Company Intellectual Property; and (iii) release any and all claims pertaining
to ownership of the Company Intellectual Property.

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(d)                Except as set forth in Schedule 3.12(d) of the Disclosure
Schedules, all copies of the Software source code, in whole or in part, in all
matter of media are located at the Company’s current office located at 16835
West Bernardo Drive, Suite 205, San Diego, CA and no other location.

(e)                 The consummation of the transactions contemplated hereunder
will not result in the loss or impairment of or payment of any additional
amounts with respect to, nor require the consent of any other Person in respect
of, the Company’s right to own, use or hold for use any Intellectual Property as
owned, used or held for use in the conduct of the Company’s business or
operations as currently conducted.

(f)                  The Company’s rights in the Company Intellectual Property
are valid, subsisting and enforceable. The Company has taken all reasonable
steps to maintain the Company Intellectual Property and to protect and preserve
the confidentiality of all trade secrets included in the Company Intellectual
Property, including requiring all Persons having access thereto to execute
written non-disclosure agreements.

(g)                The conduct of the Company’s business as currently and
formerly conducted, and the products, processes and services of the Company,
have not infringed, misappropriated, diluted or otherwise violated, and do not
and will not infringe, dilute, misappropriate or otherwise violate the
Intellectual Property or other rights of any Person. To the Company’s Knowledge,
no Person has infringed, misappropriated, diluted or otherwise violated, or is
currently infringing, misappropriating, diluting or otherwise violating, any
Company Intellectual Property.

(h)                There are no Actions (including any oppositions,
interferences or re-examinations) settled, pending or, to the Company’s
Knowledge, threatened (including in the form of offers to obtain a license): (i)
alleging any infringement, misappropriation, dilution or violation of the
Intellectual Property of any Person by the Company; (ii) challenging the
validity, enforceability, registrability or ownership of any Company
Intellectual Property or the Company’s rights with respect to any Company
Intellectual Property; or (iii) by the Company or any other Person alleging any
infringement, misappropriation, dilution or violation by any Person of the
Company Intellectual Property. The Company is not subject to any outstanding or
prospective Governmental Order (including any motion or petition therefor) that
does or would restrict or impair the use of any Company Intellectual Property.

(i)                  All Public Software used by the Company is identified on
Schedule 3.12(i) of the Disclosure Schedules, is fully segregable from software
that is Company Intellectual Property and, except as described in Schedule
3.12(i) of the Disclosure Schedules, no Public Software is or has been
incorporated or otherwise integrated into, aggregated or compiled in the same
library or directory, or distributed with any software that is Company
Intellectual Property, in contravention of any applicable license.  Except as
set forth on Schedule 3.12(i) of the Disclosure Schedules, the Company has not
made any improvements or changes to any Public Software that would constitute
improvements that the Company would be obligated to share with the open source
community.  No software developed by or for the Company is a “bootleg” version
or copy.  The internal computer hardware systems, embedded systems and software
used to operate the business of the Company: (i) are in satisfactory working
order and are scalable to meet current and reasonably anticipated capacity, (ii)
have commercially reasonable security, backups, disaster recovery arrangements
and hardware and software support and maintenance to minimize the risk of error,
breakdown, failure or security breach occurring, (iii) are configured and
maintained to minimize the effects of viruses and do not, to the Company’s
Knowledge, contain trojan horses and other malicious code, and (iv) have not
suffered any error, breakdown, failure or security breach in the last twelve
months which had a Material Adverse Effect.

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Section 3.13             Inventory. All inventory of the Company, whether or not
reflected in the Balance Sheet, consists of a quality and quantity usable and
salable in the ordinary course of business consistent with past practice, except
for obsolete, damaged, defective or slow-moving items that have been written off
or written down to fair market value or for which adequate reserves have been
established. All such inventory is owned by the Company free and clear of all
Encumbrances, and no inventory is held on a consignment basis. The quantities of
each item of inventory (whether raw materials, work-in-process or finished
goods) are not excessive, but are reasonable in the present circumstances of the
Company.

Section 3.14             Accounts Receivable. The accounts receivable reflected
on the Interim Balance Sheet and the accounts receivable arising after the date
thereof (a) have arisen from bona fide transactions entered into by the Company
involving the sale of goods or the rendering of services in the ordinary course
of business consistent with past practice; (b) constitute only valid, undisputed
claims of the Company not subject to claims of set-off or other defenses or
counterclaims other than normal cash discounts accrued in the ordinary course of
business consistent with past practice; and (c) subject to a reserve for bad
debts shown on the Interim Balance Sheet or, with respect to accounts receivable
arising after the Interim Balance Sheet Date, on the accounting records of the
Company, are collectible in full within ninety (90) days after billing.

Section 3.15             Customers and Suppliers.

(a)                Except as set forth in Schedule 3.15(a) of the Disclosure
Schedules, the Company has not received any notice, and has no reason to
believe, that any of its customers has ceased, or intends to cease, to use its
goods or services or to otherwise terminate or materially reduce its
relationship with the Company.

(b)                Except as set forth in Schedule 3.15(b) of the Disclosure
Schedules, the Company has not received any notice, and has no reason to
believe, that any of its suppliers has ceased, or intends to cease, to supply
goods or services to the Company or to otherwise terminate or materially reduce
its relationship with the Company.

Section 3.16             Insurance.  Schedule 3.16 of the Disclosure Schedules
sets forth a true and complete list of all current policies or binders of fire,
liability, product liability, umbrella liability, real and personal property,
workers’ compensation, vehicular, directors and officers’ liability, fiduciary
liability and other casualty and property insurance maintained by the Company
or, to the Company’s Knowledge, its Affiliates and relating to the assets,
business, operations, employees, officers and directors of the Company
(collectively, the “Insurance Policies”) and true and complete copies of such
Insurance Policies have been made available to Buyer. Such Insurance Policies
are in full force and effect and shall remain in full force and effect following
the consummation of the transactions contemplated by this Agreement. Neither the
Company nor, to the Company’s Knowledge, any of its Affiliates has received any
written notice of cancellation of, premium increase with respect to, or
alteration of coverage under, any of such Insurance Policies. All premiums due
on such Insurance Policies have either been paid or, if due and payable prior to
Closing, will be paid prior to Closing in accordance with the payment terms of
each Insurance Policy. The Insurance Policies do not provide for any
retrospective premium adjustment or other experience-based liability on the part
of the Company. All such Insurance Policies (a) are valid and binding in
accordance with their terms; (b) are provided by carriers who, to the Company’s
Knowledge, are financially solvent; and (c) have not been subject to any lapse
in coverage. Except as set forth on Schedule 3.16 of the Disclosure Schedules,
there are no claims related to the business of the Company pending under any
such Insurance Policies as to which coverage has been questioned, denied or
disputed or in respect of which there is an outstanding reservation of rights.
None of the Company or, to the Company’s Knowledge, any of its Affiliates is in
default under, or has otherwise failed to comply with, in any material respect,
any provision contained in any such Insurance Policy. The Insurance Policies are
of the type and in the amounts customarily carried by Persons conducting a
business similar to the Company and are sufficient for compliance with all
applicable Laws and Contracts to which the Company is a party or by which it is
bound.

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Section 3.17             Legal Proceedings; Governmental Orders.

(a)             Except as set forth in Schedule 3.17(a) of the Disclosure
Schedules, there are no Actions pending or, to the Company’s Knowledge,
threatened (i) against or by the Company affecting any of its properties or
assets (or by or against any Shareholder or any Affiliate thereof and relating
to the Company); or (ii) against or by the Company or, to the Company’s
Knowledge, any of its Affiliates, that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement. No event has
occurred or circumstances exist that may give rise to, or serve as a basis for,
any such Action.

(b)             Except as set forth in Schedule 3.17(b) of the Disclosure
Schedules, there are no outstanding Governmental Orders and no unsatisfied
judgments, penalties or awards against or affecting the Company or any of its
properties or assets. The Company is in compliance with the terms of each
Governmental Order set forth in Schedule 3.17(b) of the Disclosure Schedules. No
event has occurred or circumstances exist that may constitute or result in (with
or without notice or lapse of time) a violation of any such Governmental Order.

Section 3.18             Compliance With Laws; Permits.

(a)                 Except as set forth in Schedule 3.18(a) of the Disclosure
Schedules, the Company has complied, and is now complying, with all Laws
applicable to it or its business, properties or assets.

(b)               All Permits required for the Company to conduct its business
have been obtained by it and are valid and in full force and effect. All fees
and charges with respect to such Permits as of the date hereof have been paid in
full. Schedule 3.18(b) of the Disclosure Schedules lists all current Permits
issued to the Company, including the names of the Permits and their respective
dates of issuance and expiration. No event has occurred that, with or without
notice or lapse of time or both, would reasonably be expected to result in the
revocation, suspension, lapse or limitation of any Permit set forth in Schedule
3.18(b) of the Disclosure Schedules.

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Section 3.19             Environmental Matters.

(a)                The Company is currently and has been in compliance with all
Environmental Laws and has not received from any Person any: (i) Environmental
Notice or Environmental Claim; or (ii) written request for information pursuant
to Environmental Law, which, in each case, either remains pending or unresolved,
or is the source of ongoing obligations or requirements as of the First Closing
Date.

(b)               The Company has obtained and is in material compliance with
all Environmental Permits (each of which is disclosed in Schedule 3.19(b) of the
Disclosure Schedules) necessary for the ownership, lease, operation or use of
the business or assets of the Company and all such Environmental Permits are in
full force and effect and shall be maintained in full force and effect by the
Company through the First Closing Date in accordance with Environmental Law,
and, to the Company’s Knowledge, there is no condition, event or circumstance
that might prevent or impede, after the First Closing Date, the ownership,
lease, operation or use of the business or assets of the Company as currently
carried out. With respect to any such Environmental Permits, the Company has
undertaken, or will undertake prior to the First Closing Date, all measures
necessary to facilitate transferability of the same, and the Company is not
aware of any condition, event or circumstance that might prevent or impede the
transferability of the same, nor has it received any Environmental Notice or
written communication regarding any material adverse change in the status or
terms and conditions of the same.

(c)                No real property currently or formerly owned, operated or
leased by the Company is listed on, or has been proposed for listing on, the
National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

(d)                There has been no Release of Hazardous Materials in
contravention of Environmental Law with respect to the business or assets of the
Company or any real property currently or formerly owned, operated or leased by
the Company, and the Company has not received an Environmental Notice that any
real property currently or formerly owned, operated or leased in connection with
the business of the Company (including soils, groundwater, surface water,
buildings and other structure located on any such real property) has been
contaminated with any Hazardous Material which could reasonably be expected to
result in an Environmental Claim against, or a violation of Environmental Law or
term of any Environmental Permit by the Company.

(e)                Schedule 3.19(e) of the Disclosure Schedules contains a
complete and accurate list of all active or abandoned aboveground or underground
storage tanks owned or operated by the Company.

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(f)                 Schedule 3.19(f) of the Disclosure Schedules contains a
complete and accurate list of all off-site Hazardous Materials treatment,
storage, or disposal facilities or locations used by the Company and any
predecessor as to which the Company may retain liability, and none of these
facilities or locations has been placed or proposed for placement on the
National Priorities List (or CERCLIS) under CERCLA, or any similar state list,
and the Company has not received any Environmental Notice regarding potential
liabilities with respect to such off-site Hazardous Materials treatment,
storage, or disposal facilities or locations used by the Company.

(g)                The Company has not retained or assumed, by contract or
operation of Law, any liabilities or obligations of third parties under
Environmental Law.

(h)               The Company has provided or otherwise made available to Buyer
and listed in Schedule 3.19(h) of the Disclosure Schedules: (i) any and all
environmental reports, studies, audits, records, sampling data, site
assessments, risk assessments, economic models and other similar documents with
respect to the business or assets of the Company or any currently or formerly
owned, operated or leased real property which are in the possession or control
of the Company related to compliance with Environmental Laws, Environmental
Claims or an Environmental Notice or the Release of Hazardous Materials; and
(ii) any and all material documents concerning planned or anticipated capital
expenditures required to reduce, offset, limit or otherwise control pollution
and/or emissions, manage waste or otherwise ensure compliance with current or
future Environmental Laws (including, without limitation, costs of remediation,
pollution control equipment and operational changes).

(i)                 Neither any Insider Shareholder nor the Company is aware of
or reasonably anticipates, as of the First Closing Date, any condition, event or
circumstance concerning the Release or regulation of Hazardous Materials that
might, after the First Closing Date, prevent, impede or materially increase the
costs associated with the ownership, lease, operation, performance or use of the
business or assets of the Company as currently carried out.

(j)                 The Company owns and controls all Environmental Attributes
(a complete and accurate list of which is set forth in Schedule 3.19(j) of the
Disclosure Schedules) and has not entered into any contract or pledge to
transfer, lease, license, guarantee, sell, mortgage, pledge or otherwise dispose
of or encumber any Environmental Attributes as of the date hereof. Neither any
Insider Shareholder nor the Company is aware of any condition, event or
circumstance that might prevent, impede or materially increase the costs
associated with the transfer (if required) to Buyer of any Environmental
Attributes after the First Closing Date.

Section 3.20             Employee Benefit Matters.

(a)                Schedule 3.20(a) of the Disclosure Schedules contains a true
and complete list of each pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus,
performance award, phantom equity, stock or stock-based, change in control,
retention, severance, vacation, paid time off, welfare, fringe-benefit and other
similar agreement, plan, policy, program or arrangement (and any amendments
thereto), in each case whether or not reduced to writing and whether funded or
unfunded, including each “employee benefit plan” within the meaning of Section
3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA,
which is or has been maintained, sponsored, contributed to, or required to be
contributed to by the Company for the benefit of any current or former employee,
officer, director, retiree, independent contractor or consultant of the Company
or any spouse or dependent of such individual, or under which the Company or any
of its ERISA Affiliates has or may have any Liability, or with respect to which
Buyer or any of its Affiliates would reasonably be expected to have any
Liability, contingent or otherwise (as listed on Schedule 3.20(a) of the
Disclosure Schedules, each, a “Benefit Plan”). The Company has separately
identified in Schedule 3.20(a) of the Disclosure Schedules (i) each Benefit Plan
that contains a change in control provision and (ii) each Benefit Plan that is
maintained, sponsored, contributed to, or required to be contributed to by the
Company primarily for the benefit of employees outside of the United States (a
“Non-U.S. Benefit Plan”).

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(b)                With respect to each Benefit Plan, the Insider Shareholders
have made available to Buyer accurate, current and complete copies of each of
the following: (i) where the Benefit Plan has been reduced to writing, the plan
document together with all amendments; (ii) where the Benefit Plan has not been
reduced to writing, a written summary of all material plan terms; (iii) where
applicable, copies of any trust agreements or other funding arrangements,
custodial agreements, insurance policies and contracts, administration
agreements and similar agreements, and investment management or investment
advisory agreements, now in effect or required in the future as a result of the
transactions contemplated by this Agreement or otherwise; (iv) copies of any
summary plan descriptions, summaries of material modifications, employee
handbooks and any other written communications (or a description of any oral
communications) relating to any Benefit Plan; (v) in the case of any Benefit
Plan that is intended to be qualified under Section 401(a) of the Code, a copy
of the most recent determination, opinion or advisory letter from the Internal
Revenue Service; (vi) in the case of any Benefit Plan for which a Form 5500 is
required to be filed, a copy of the two most recently filed Form 5500, with
schedules and financial statements attached; (vii) actuarial valuations and
reports related to any Benefit Plans with respect to the two most recently
completed plan years; (viii) the most recent nondiscrimination tests performed
under the Code; and (ix) copies of material notices, letters or other
correspondence from the Internal Revenue Service, Department of Labor, Pension
Benefit Guaranty Corporation or other Governmental Authority relating to the
Benefit Plan.

(c)                Except as set forth in Schedule 3.20(c) of the Disclosure
Schedules, each Benefit Plan and related trust (other than any multiemployer
plan within the meaning of Section 3(37) of ERISA (each a “Multiemployer Plan”))
has been established, administered and maintained in accordance with its terms
and in compliance with all applicable Laws (including ERISA, the Code, and any
applicable local Laws). Each Benefit Plan that is intended to be qualified under
Section 401(a) of the Code (a “Qualified Benefit Plan”) is so qualified and has
received a favorable and current determination letter from the Internal Revenue
Service, or with respect to a prototype plan, can rely on an opinion letter from
the Internal Revenue Service to the prototype plan sponsor, to the effect that
such Qualified Benefit Plan is so qualified and that the plan and the trust
related thereto are exempt from federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, and nothing has occurred that could
reasonably be expected to adversely affect the qualified status of any Qualified
Benefit Plan. Nothing has occurred with respect to any Benefit Plan that has
subjected or could reasonably be expected to subject the Company or any of its
ERISA Affiliates or, with respect to any period on or after the Closing Date,
Buyer or any of its Affiliates, to a penalty under Section 502 of ERISA or to
tax or penalty under Section 4975 of the Code. Except as set forth in
Schedule 3.20(c) of the Disclosure Schedules, all benefits, contributions and
premiums relating to each Benefit Plan have been timely paid in accordance with
the terms of such Benefit Plan and all applicable Laws, and all benefits accrued
under any unfunded Benefit Plan have been paid, accrued or otherwise adequately
reserved. All Non-U.S. Benefit Plans that are intended to be funded and/or
book-reserved are funded and/or book-reserved, as appropriate, based upon
reasonable actuarial assumptions.

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(d)                Neither the Company nor, to the Company’s Knowledge, any of
its ERISA Affiliates has (i) incurred or reasonably expects to incur, either
directly or indirectly, any material Liability under Title I or Title IV of
ERISA or related provisions of the Code or applicable local Law relating to
employee benefit plans; (ii) failed to timely pay premiums to the Pension
Benefit Guaranty Corporation; (iii) withdrawn from any Benefit Plan; or (iv)
engaged in any transaction which would give rise to liability under Section 4069
or Section 4212(c) of ERISA.

(e)                With respect to each Benefit Plan (i) no such plan is a
Multiemployer Plan/except as set forth in Schedule 3.20(e) of the Disclosure
Schedules, no such plan is a Multiemployer Plan, and (A) all contributions
required to be paid by the Company or, to the Company’s Knowledge, its ERISA
Affiliates have been timely paid to the applicable Multiemployer Plan; (B)
neither the Company nor, to the Company’s Knowledge, any ERISA Affiliate has
incurred any withdrawal liability under Title IV of ERISA which remains
unsatisfied, and (C) a complete withdrawal from all such Multiemployer Plans at
the Effective Time would not result in any material liability to the Company;
(ii) no such plan is a “multiple employer plan” within the meaning of Section
413(c) of the Code or a “multiple employer welfare arrangement” (as defined in
Section 3(40) of ERISA); (iii) no Action has been initiated by the Pension
Benefit Guaranty Corporation to terminate any such plan or to appoint a trustee
for any such plan; (iv) no such plan is subject to the minimum funding standards
of Section 412 of the Code or Title IV of ERISA, and none of the assets of the
Company or, to the Company’s Knowledge, any ERISA Affiliate is, or may
reasonably be expected to become, the subject of any lien arising under Section
302 of ERISA or Section 412(a) of the Code/except as set forth in Schedule
3.20(e) of the Disclosure Schedules, no such plan is subject to the minimum
funding standards of Section 412 of the Code or Title IV of ERISA, and no plan
listed in Schedule 3.20(e) of the Disclosure Schedules has failed to satisfy the
minimum funding standards of Section 302 of ERISA or Section 412 of the Code;
and (v) no “reportable event,” as defined in Section 4043 of ERISA, has occurred
with respect to any such plan.

(f)                  Each Benefit Plan can be amended, terminated or otherwise
discontinued after the Closing in accordance with its terms, without material
liabilities to Buyer, the Company or, to the Company’s Knowledge, any of their
Affiliates other than ordinary administrative expenses typically incurred in a
termination event. The Company has no commitment or obligation and has not made
any representations to any employee, officer, director, independent contractor
or consultant, whether or not legally binding, to adopt, amend, modify or
terminate any Benefit Plan or any collective bargaining agreement, in connection
with the consummation of the transactions contemplated by this Agreement or
otherwise.

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(g)                 Except as set forth in Section 3.20(g) of the Disclosure
Schedules and other than as required under Section 601 et. seq. of ERISA or
other applicable Law, no Benefit Plan provides post-termination or retiree
welfare benefits to any individual for any reason, and neither the Company nor,
to the Company’s Knowledge, any of its ERISA Affiliates has any Liability to
provide post-termination or retiree welfare benefits to any individual or ever
represented, promised or contracted to any individual that such individual would
be provided with post-termination or retiree welfare benefits.

(h)                Except as set forth in Section 3.20(h) of the Disclosure
Schedules, there is no pending or, to the Company’s Knowledge, threatened Action
relating to a Benefit Plan (other than routine claims for benefits), and no
Benefit Plan has within the three (3) years prior to the date hereof been the
subject of an examination or audit by a Governmental Authority or the subject of
an application or filing under or is a participant in, an amnesty, voluntary
compliance, self-correction or similar program sponsored by any Governmental
Authority.

(i)                 There has been no amendment to, announcement by the Company
or, to the Company’s Knowledge, any of its Affiliates relating to, or change in
employee participation or coverage under, any Benefit Plan or collective
bargaining agreement that would increase the annual expense of maintaining such
plan above the level of the expense incurred for the most recently completed
fiscal year with respect to any director, officer, employee, independent
contractor or consultant, as applicable. None of the Company, nor, to the
Company’s Knowledge, any of its Affiliates, has any commitment or obligation or
has made any representations to any director, officer, employee, independent
contractor or consultant, whether or not legally binding, to adopt, amend,
modify or terminate any Benefit Plan or any collective bargaining agreement.

(j)                 Each Benefit Plan that is subject to Section 409A of the
Code has been administered in compliance with its terms and the operational and
documentary requirements of Section 409A of the Code and all applicable
regulatory guidance (including notices, rulings and proposed and final
regulations) thereunder. The Company does not have any obligation to gross up,
indemnify or otherwise reimburse any individual for any excise taxes, interest
or penalties incurred pursuant to Section 409A of the Code.

(k)                Each individual who is classified by the Company as an
independent contractor has been properly classified for purposes of
participation and benefit accrual under each Benefit Plan.

(l)                 Except as set forth in Section 3.20(l) of the Disclosure
Schedules, neither the execution of this Agreement nor any of the transactions
contemplated by this Agreement will (either alone or upon the occurrence of any
additional or subsequent events): (i) entitle any current or former director,
officer, employee, independent contractor or consultant of the Company to
severance pay or any other payment; (ii) accelerate the time of payment, funding
or vesting, or increase the amount of compensation due to any such individual;
(iii) limit or restrict the right of the Company to merge, amend or terminate
any Benefit Plan; (iv) increase the amount payable under or result in any other
material obligation pursuant to any Benefit Plan; (v) result in “excess
parachute payments” within the meaning of Section 280G(b) of the Code; or (vi)
require a “gross-up” or other payment to any “disqualified individual” within
the meaning of Section 280G(c) of the Code. The Company has made available to
Buyer true and complete copies of any Section 280G calculations prepared
(whether or not final) with respect to any disqualified individual in connection
with the transactions.

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Section 3.21              Employment Matters.

(a)                The Company has provided to Buyer a true and complete list of
all persons who are employees, independent contractors or consultants of the
Company as of the date hereof, including any employee who is on a leave of
absence of any nature, paid or unpaid, authorized or unauthorized, and sets
forth for each such individual the following: (i) name; (ii) title or position
(including whether full or part time); (iii) hire date; (iv) current annual base
compensation rate; (v) commission, bonus or other incentive-based compensation;
and (vi) a description of the fringe benefits provided to each such individual
as of the date hereof. Except as set forth in Section 3.21(a) of the Disclosure
Schedules, as of the date hereof, all compensation, including wages, commissions
and bonuses, payable to all employees, independent contractors or consultants of
the Company for services performed on or prior to the date hereof have been paid
in full (or accrued in full on the Company’s records) and there are no
outstanding agreements, understandings or commitments of the Company with
respect to any compensation, commissions or bonuses.

(b)                Except as set forth in Section 3.21(b) of the Disclosure
Schedules, the Company is not, and has not been for the past three (3) years, a
party to, bound by, or negotiating any collective bargaining agreement or other
Contract with a union, works council or labor organization (collectively,
“Union”), and there is not, and has not been for the past three (3) years, any
Union representing or purporting to represent any employee of the Company, and
no Union or group of employees is seeking or has sought to organize employees
for the purpose of collective bargaining. Except as set forth in Section
3.21(b) of the Disclosure Schedules, there has never been, nor has there been
any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal
to work overtime or other similar labor disruption or dispute affecting the
Company or any of its employees. The Company has no duty to bargain with any
Union.

(c)                 The Company is and has been in compliance with the terms of
the collective bargaining agreements and other Contracts listed on Section
3.21(b) of the Disclosure Schedules and all applicable Laws pertaining to
employment and employment practices to the extent they relate to employees of
the Company, including all Laws relating to labor relations, equal employment
opportunities, fair employment practices, employment discrimination, harassment,
retaliation, reasonable accommodation, disability rights or benefits,
immigration, wages, hours, overtime compensation, child labor, hiring, promotion
and termination of employees, working conditions, meal and break periods,
privacy, health and safety, workers’ compensation, leaves of absence and
unemployment insurance. All individuals characterized and treated by the Company
as independent contractors or consultants are properly treated as independent
contractors under all applicable Laws. All employees of the Company classified
as exempt under the Fair Labor Standards Act and state and local wage and hour
laws are properly classified. Except as set forth in Schedule 3.21(c) of the
Disclosure Schedules, there are no Actions against the Company pending, or to
the Company’s Knowledge, threatened to be brought or filed, by or with any
Governmental Authority or arbitrator in connection with the employment of any
current or former applicant, employee, consultant, volunteer, intern or
independent contractor of the Company, including, without limitation, any claim
relating to unfair labor practices, employment discrimination, harassment,
retaliation, equal pay, wage and hours or any other employment related matter
arising under applicable Laws.

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(d)                The Company has complied with the WARN Act, and it has no
plans to undertake any action in the future that would trigger the WARN Act.

Section 3.22              Taxes. Except as set forth in Section 3.22 of the
Disclosure Schedules:

(a)                 All Tax Returns required to be filed on or before the
Closing Date by the Company have been, or will be, timely filed. Such Tax
Returns are, or will be, true, complete and correct in all respects. All Taxes
due and owing by the Company (whether or not shown on any Tax Return) have been,
or will be, timely paid.

(b)                 The Company has withheld and paid each Tax required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, customer, shareholder or other party, and
complied with all information reporting (e.g. Forms W-2 and 1099) and backup
withholding provisions of applicable Law.

(c)                 No written claim or the Company’s Knowledge, any other claim
has been made by any taxing authority in any jurisdiction where the Company does
not file Tax Returns that it is, or may be, subject to Tax by that jurisdiction.

(d)                No extensions or waivers of statutes of limitations have been
given or requested with respect to any Taxes of the Company.

(e)                The amount of the Company’s Liability for unpaid Taxes for
all periods ending on or before June 30, 2014 does not, in the aggregate, exceed
the amount of accruals for Taxes (excluding reserves for deferred Taxes)
reflected on the Interim Financial Statements. The amount of the Company’s
Liability for unpaid Taxes for all periods following the end of the recent
period covered by the Financial Statements shall not, in the aggregate, exceed
the amount of accruals for Taxes (excluding reserves for deferred Taxes) as
adjusted for the passage of time in accordance with the past custom and practice
of the Company (and which accruals shall not exceed comparable amounts incurred
in similar periods in prior years).

(f)                 Section 3.22(f) of the Disclosure Schedules sets forth:

(i)                   the taxable years of the Company as to which the
applicable statutes of limitations on the assessment and collection of Taxes
have been extended;

(ii)                 those taxable years for which examinations by the taxing
authorities for Taxes have been completed; and

(iii)                those taxable years for which examinations by taxing
authorities for Taxes are presently being conducted.

(g)                All deficiencies asserted, or assessments made, against the
Company as a result of any examinations by any taxing authority have been fully
paid.

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(h)               The Company is not a party to any Action by any taxing
authority. There are no pending or, to the Company’s Knowledge, threatened
Actions by any taxing authority.

(i)                 The Company has delivered to Buyer copies of all federal,
state, local and foreign income, franchise and similar Tax Returns, examination
reports, and statements of deficiencies assessed against, or agreed to by, the
Company for all Tax periods ending after December 31, 2012.

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

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

(l)                  No private letter rulings, technical advice memoranda or
similar agreement or rulings have been requested, entered into or issued by any
taxing authority with respect to the Company.

(m)               The Company has not been a member of an affiliated, combined,
consolidated or unitary Tax group for Tax purposes. The Company has no Liability
for Taxes of any Person (other than the Company) under Treasury Regulations
Section 1.1502-6 (or any corresponding provision of state, local or foreign
Law), as transferee or successor, by contract or otherwise.

(n)                The Company will not be required to include any item of
income in, or exclude any item or deduction from, taxable income for any taxable
period or portion thereof ending after the Closing Date as a result of:

(i)                  any change in method of accounting under Section 481 of the
Code (or any comparable provision of state, local or foreign Tax Laws), or use
of an improper method of accounting, for a taxable period ending on or prior to
the Closing Date;

(ii)                 an installment sale or open transaction occurring on or
prior to the First Closing Date;

(iii)               a prepaid amount received on or before the First Closing
Date;

(iv)               any closing agreement under Section 7121 of the Code, or
similar provision of state, local or foreign Law; or

(v)                any election under Section 108(i) of the Code.

(o)                Neither the Company nor any Shareholder is a “foreign person”
as that term is used in Treasury Regulations Section 1.1445-2. The Company is
not, nor has it been, a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable period specified
in Section 897(c)(1)(a) of the Code.

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(p)                The Company has not been a “distributing corporation” or a
“controlled corporation” in connection with a distribution described in Section
355 of the Code.

(q)                The Company is not, and has not been, a party to, or a
promoter of, a “reportable transaction” within the meaning of Section
6707A(c)(1) of the Code and Treasury Regulations Section 1.6011 4(b).

(r)                 Schedule 3.22(r) of the Disclosure Schedules sets forth all
foreign jurisdictions in which the Company is subject to Tax, is engaged in
business or has a permanent establishment. The Company has not entered into a
gain recognition agreement pursuant to Treasury Regulations Section 1.367(a)-8.
The Company has not transferred an intangible the transfer of which would be
subject to the rules of Section 367(d) of the Code.

(s)                 No property owned by the Company is (i) required to be
treated as being owned by another person pursuant to the so-called “safe harbor
lease” provisions of former Section 168(f)(8) of the Internal Revenue Code of
1954, as amended, (ii) subject to Section 168(g)(1)(A) of the Code, or (iii)
subject to a disqualified leaseback or long-term agreement as defined in Section
467 of the Code.

Section 3.23             Indebtedness.  Schedule 3.23 of the Disclosure
Schedules sets forth the principal of, and accrued interest and interest
equivalents on, the following indebtedness of the Company as of the date hereof:
(a) indebtedness for borrowed money, (b) any obligations evidenced by bonds,
notes, debentures or other similar instruments, including purchase money
obligations or other obligations relating to the deferred purchase price of
property (other than trade payables incurred in the ordinary course of
business), (c) liabilities of Persons (other than the Company) secured by a
Encumbrance on any asset of the Company, (d) liabilities under or in respect of
letters of credit and bank guarantees (including reimbursement obligations with
respect thereto), (e) liabilities under lease obligations required to be
classified and accounted for as capital leases and liabilities under any sale
and leaseback transaction, any synthetic lease or tax ownership operating lease
transaction or any other transaction that is the functional equivalent of or
takes the place of borrowing but that does not constitute a liability on the
balance sheet, and (f) liabilities in the nature of guarantees of obligations of
the type described in the foregoing clauses of any other person; including in
each case all accrued interest, penalties and all pre-payment fees
(collectively, “Company Indebtedness”).

Section 3.24             Books and Records. The minute books and stock record
books of the Company, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business
practices. The minute books of the Company contain accurate and complete records
of all meetings, and actions taken by written consent of, the stockholders, the
board of directors and any committees of the board of directors of the Company,
and no meeting, or action taken by written consent, of any such stockholders,
board of directors or committee has been held for which minutes have not been
prepared and are not contained in such minute books. At the Closing, all of
those books and records will be in the possession of the Company.

Section 3.25             Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement or any other Transaction
Document based upon arrangements made by or on behalf of the Company or any
Shareholder.

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Section 3.26             Full Disclosure. No representation or warranty by the
Company or any Shareholder in this Agreement and no statement contained in the
Disclosure Schedules to this Agreement or any certificate or other document
furnished or to be furnished to Buyer pursuant to this Agreement contains any
untrue statement of a material fact, or omits to state a material fact necessary
to make the statements contained therein, in light of the circumstances in which
they are made, not misleading. All copies of documents and other materials
provided to Buyer by the Company in connection with Buyer’s due diligence review
of the Company are true and complete copies and conform to the originals in all
material respects.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

Except as set forth in the correspondingly numbered schedules of the Disclosure
Schedules, Buyer and Parent represent and warrant, jointly and severally, that
the statements contained in this Article IV (Representations and Warranties of
Buyer) are true, correct and not misleading as of the date hereof.

Section 4.01             Organization and Authority of Buyer and Parent.

(a)                Buyer is a corporation duly organized, validly existing and
in good standing under the Laws of the state of New York. Buyer has full
corporate power and authority to enter into this Agreement and the other
Transaction Documents to which Buyer is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Buyer of this Agreement and any other
Transaction Document to which Buyer is a party, the performance by Buyer of its
obligations hereunder and thereunder and the consummation by Buyer of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer, and (assuming due authorization, execution and
delivery by the Shareholders and the Company) this Agreement constitutes a
legal, valid and binding obligation of Buyer enforceable against Buyer in
accordance with its terms. When each other Transaction Document to which Buyer
is or will be a party has been duly executed and delivered by Buyer (assuming
due authorization, execution and delivery by each other party thereto), such
Transaction Document will constitute a legal and binding obligation of Buyer
enforceable against it in accordance with its terms.

(b)                Parent is a corporation duly organized, validly existing and
in good standing under the Laws of the state of Delaware. Parent has full
corporate power and authority to enter into this Agreement and the other
Transaction Documents to which Parent is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Parent of this Agreement and any
other Transaction Document to which Parent is a party, the performance by Parent
of its obligations hereunder and thereunder and the consummation by Parent of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of Parent. This Agreement has been
duly executed and delivered by Parent, and (assuming due authorization,
execution and delivery by the Shareholders and the Company) this Agreement
constitutes a legal, valid and binding obligation of Parent enforceable against
Parent in accordance with its terms. When each other Transaction Document to
which Parent is or will be a party has been duly executed and delivered by Buyer
(assuming due authorization, execution and delivery by each other party
thereto), such Transaction Document will constitute a legal and binding
obligation of Parent enforceable against it in accordance with its terms.

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Section 4.02             No Conflicts; Consents. The execution, delivery and
performance by each of Buyer and Parent of this Agreement and the other
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (a) conflict
with or result in a violation or breach of, or default under, any provision of
the certificate of incorporation, by-laws or other organizational documents of
Buyer or Parent; (b) conflict with or result in a violation or breach of any
provision of any Law or Governmental Order applicable to Buyer or Parent; or (c)
except as set forth in Section 4.02 of the Disclosure Schedules, require the
consent, notice or other action by any Person under, conflict with, result in a
violation or breach of, constitute a default or an event that, with or without
notice or lapse of time or both, would constitute a default under, result in the
acceleration of or create in any party the right to accelerate, terminate,
modify or cancel any Contract to which Buyer or Parent is a party or by which
the Buyer or Parent is bound or to which any of their respective properties and
assets are subject (including any material contract) or any Permit affecting the
properties, assets or business of the Buyer or Parent. No consent, approval,
Permit, Governmental Order, declaration or filing with, or notice to, any
Governmental Authority is required by or with respect to Buyer or Parent in
connection with the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby and such consents, approvals, Permits, Governmental Orders,
declarations, filings or notices which, in the aggregate, would not have a
Material Adverse Effect.

Section 4.03              Investment Purpose. Buyer is acquiring the Shares
solely for its own account for investment purposes and not with a view to, or
for offer or sale in connection with, any distribution thereof. Buyer
acknowledges that the Shares are not registered under the Securities Act of
1933, as amended, or any state securities laws, and that the Shares may not be
transferred or sold except pursuant to the registration provisions of the
Securities Act of 1933, as amended or pursuant to an applicable exemption
therefrom and subject to state securities laws and regulations, as applicable.

Section 4.04             Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement or any other Transaction
Document based upon arrangements made by or on behalf of Buyer or Parent.

Section 4.05             Sufficiency of Funds. Buyer has sufficient cash on hand
or other sources of immediately available funds to enable it to make payment of
the Aggregate Purchase Price and consummate the transactions contemplated by
this Agreement.

Section 4.06             Legal Proceedings. Except as set forth in Section
4.06 of the Disclosure Schedules, there are no Actions pending or, to Buyer’s
knowledge, threatened against or by Buyer or any Affiliate of Buyer that
challenge or seek to prevent, enjoin or otherwise delay the transactions
contemplated by this Agreement. No event has occurred or circumstances exist
that may give rise or serve as a basis for any such Action.

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ARTICLE V
COVENANTS
 
Section 5.01             Conduct of Business After First Closing. From and
including the First Closing Date, no Shareholder that acts as an employee,
officer or agent of Company will take any action with respect to the Company
except under the direction and control of Buyer or Parent.

Section 5.02              Expenses. Except as otherwise expressly provided
herein, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by (a) the Shareholders in respect of the expenses of the Shareholders and
the Company (other than Company Transaction Expenses) (collectively, the
“Shareholder Transaction Expenses”) and the Parent in respect of the expenses of
the Parent and the Buyer, whether or not the First Closing shall have occurred.

Section 5.03             Confidentiality. From and after the First Closing, each
Shareholder shall, and shall use its commercially reasonable best efforts to
cause his or her respective Representatives to hold, in confidence any and all
information, whether written or oral, concerning the Company, except to the
extent that such Shareholder can show that such information (a) is generally
available to and known by the public through no fault of any Shareholder or his
or her respective Representatives; or (b) is lawfully acquired by Shareholder,
any of his or her respective Representatives from and after the Closing from
sources which are not prohibited from disclosing such information by a legal,
contractual or fiduciary obligation. If Shareholder or his or her respective
Representatives are compelled to disclose any information by judicial or
administrative process or by other requirements of Law, such Shareholder shall
promptly notify Buyer in writing and shall disclose only that portion of such
information which such Shareholder is advised by its counsel in writing is
legally required to be disclosed, provided that such Shareholder shall use
commercially reasonable best efforts to cooperate with Buyer to obtain an
appropriate protective order or other reasonable assurance that confidential
treatment will be accorded such information.

Section 5.04             Non-competition; Non-solicitation

(a)                Except with respect to authorized activities of the Insider
Shareholders  in their capacities as employees, officers, or agents of the
Company, the Buyer or the Parent, for a period commencing on the First Closing
and expiring on the fifth (5th) anniversary of the Second Closing Date (the
“Restricted Period”), each Insider Shareholder and each other Shareholder
identified on Exhibit 11 (collectively the “Restricted Shareholders”) shall not,
and shall not permit any of his or her Affiliates to, directly or indirectly,
(i) engage in or assist others in engaging in the Restricted Business in the
Territory; (ii) have an interest in any Person that engages directly or
indirectly in the Restricted Business in the Territory in any capacity,
including as a director, partner, shareholder, member, employee, principal,
agent, trustee or consultant; or (iii) intentionally interfere in any material
respect with the business relationships (whether formed prior to or after the
date of this Agreement) between the Company and customers or suppliers of the
Company. Notwithstanding the foregoing, a Restricted Shareholder may own,
directly or indirectly, solely as an investment, securities of any Person traded
on any national securities exchange if such Restricted Shareholder is not a
controlling Person of, or a member of a group which controls, such Person and
does not, directly or indirectly, own 5% or more of any class of securities of
such Person.

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(b)                Except with respect to the authorized activities of the
Shareholders  in their capacities as employees, officers, or agents of the
Company, the Buyer or the Parent, during the Restricted Period, each Shareholder
shall not, and shall not permit any of its Affiliates to, directly or
indirectly, hire or solicit any employee of the Company or encourage any such
employee to leave such employment or hire any such employee who has left such
employment, except pursuant to a general solicitation which is not directed
specifically to any such employees; provided, that nothing in this Section
5.04(b) (Non-competition; Non-solicitation) shall prevent each Shareholder or
any of his or her Affiliates from hiring (i) any employee whose employment has
been terminated by the Company or Buyer or (ii) after one (1) year from the date
of termination of employment, any employee whose employment has been terminated
by the employee.

(c)                During the Restricted Period, each Shareholder shall not, and
shall not permit any of his or her Affiliates to, directly or indirectly,
solicit or entice, or attempt to solicit or entice, any clients or customers of
the Company or potential clients or customers of the Company for purposes of
diverting their business or services from the Company.

(d)                Each Shareholder acknowledges that a breach or threatened
breach of this Section 5.04 (Non-competition; Non-solicitation) would give rise
to irreparable harm to Buyer, for which monetary damages would not be an
adequate remedy, and hereby agrees that in the event of a breach or a threatened
breach by any Shareholder of any such obligations, Buyer shall, in addition to
any and all other rights and remedies that may be available to it in respect of
such breach, be entitled to equitable relief, including a temporary restraining
order, an injunction, specific performance and any other relief that may be
available from a court of competent jurisdiction (without any requirement to
post bond).

(e)                Each Shareholder acknowledges that the restrictions contained
in this Section 5.04 (Non-competition; Non-solicitation) are reasonable and
necessary to protect the legitimate interests of Buyer and constitute a material
inducement to Buyer and Parent to enter into this Agreement and consummate the
transactions contemplated by this Agreement. In the event that any covenant
contained in this Section 5.04 (Non-competition; Non-solicitation) should ever
be adjudicated to exceed the time, geographic, product or service, or other
limitations permitted by applicable Law in any jurisdiction, then any court is
expressly empowered to reform such covenant, and such covenant shall be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable Law. The covenants
contained in this Section 5.04 (Non-competition; Non-solicitation) and each
provision hereof are severable and distinct covenants and provisions. The
invalidity or unenforceability of any such covenant or provision as written
shall not invalidate or render unenforceable the remaining covenants or
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such covenant or
provision in any other jurisdiction.

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Section 5.05             Books and Records.

(a)                In order to facilitate the resolution of any claims made
against or incurred by Shareholders prior to the Second Closing, or for any
other reasonable purpose, for a period of six (6) years after the Closing, Buyer
shall:

(i)                   retain the books and records (including personnel files)
of the Company relating to periods prior to the Closing in a manner reasonably
consistent with the prior practices of the Company; and

(ii)                 upon reasonable notice, afford the Representatives of
Shareholders reasonable access (including the right to make, at the
Shareholders’ expense, photocopies and/or electronic copy), during normal
business hours, to such books and records;

provided, however, that any books and records related to Tax matters shall be
retained pursuant to the periods set forth in Article VI (Tax Matters).

(b)                Buyer shall not be obligated to provide the other party with
access to any books or records (including personnel files) pursuant to this
Section 5.05 (Books and Records) where such access would violate any Law.

Section 5.06             Public Announcements. Unless otherwise required by
applicable Law or stock exchange requirements (based upon the reasonable advice
of counsel), no party to this Agreement shall make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party (which consent shall not be unreasonably withheld or delayed), and the
parties shall cooperate as to the timing and contents of any such announcement.
Notwithstanding anything to the contrary in this Agreement, the Buyer shall be
entitled, without the prior approval of Shareholders, to file a Current Report
on Form 8-K with respect to the transactions contemplated by this Agreement and
by the Transaction Documents in the form required by the Securities Exchange Act
of 1934, as amended, and/or any other public disclosure as is required by
applicable Law or stock exchange requirements.

Section 5.07             Further Assurances. Following the First Closing and
continuing after consummation of the Second Closing, each of the parties hereto
shall, and shall use commercially reasonable best efforts to cause their
respective Affiliates to, execute and deliver such additional documents,
instruments, conveyances and assurances and take such further actions as may be
reasonably required to carry out the provisions hereof and give effect to the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, if any consent, approval or authorization necessary to preserve
any right or benefit under any Contract to which the Company is a party is not
obtained prior to the First Closing or Second Closing, as applicable, the
Insider Shareholders shall, subsequent to such Closing, provide reasonable
assistance to Buyer and the Company in obtaining such consent, approval or
authorization as promptly thereafter as practicable. If such consent, approval
or authorization cannot be obtained, Shareholders shall use their reasonable
best efforts to provide the Company with the rights and benefits of the affected
Contract for the term thereof, and, if Shareholders provide such rights and
benefits, the Company shall assume all obligations and burdens thereunder.

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Section 5.08            Parent Guaranty.  In consideration of the covenants,
agreements and undertakings of Shareholders contained in this Agreement, Parent
hereby guarantees to Shareholders, and their permitted successors and assigns,
the full, prompt and complete payment and performance by Buyer of all of the
covenants, conditions and agreements of the Buyer contained in this Agreement.
Parent hereby waives all notice of default by the Buyer and consents to any
extension that may be given by Shareholders to the Buyer of time of payment or
performance. This guarantee shall be construed as a continuing absolute and
unconditional guarantee of payment and performance and not as a guarantee of
collection.

Section 5.09             Shareholder Representative.

(a)                Each Shareholder hereby irrevocably authorizes, constitutes
and appoints the Person identified in Exhibit 12 attached hereto as such
“Shareholder Representative” as such Shareholder’s representative (“Shareholder
Representative”) and such Shareholder’s true and lawful attorney in fact, to act
on such Shareholder’s behalf in the absolute discretion of Shareholder
Representative with respect to all matters relating to this Agreement, including
execution and delivery of any amendment, supplement, or modification of this
Agreement and any other Transaction Document and any waiver of any claim or
right arising out of this Agreement and giving and receiving all notices
pursuant to this Agreement; and in general, to do all things and to perform all
acts, including executing and delivering all agreements, certificates, receipts,
instructions, and other instruments contemplated by or deemed advisable to
effectuate the provisions of this Section 5.09 (Shareholder Representative),
including the exercise of the power to:

(i)                  give and receive notices and communications;

(ii)                 agree to, negotiate, enter into settlements and compromises
of, and comply with orders of courts with respect to claims for indemnification
made by Buyer;

(iii)                litigate, arbitrate, resolve, settle or compromise any
claim for indemnification or Earn Out Payments;

(iv)               execute and deliver all documents necessary or desirable to
carry out the intent of this Agreement, including the Escrow Agreement;

(v)                 make all elections or decisions contemplated by this
Agreement and any Transaction Document; and,

(vi)               take all actions necessary or appropriate in the good faith
judgment of Shareholder Representative for the accomplishment of the foregoing

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(b)                Buyer shall be entitled to deal exclusively with Shareholder
Representative on all matters relating to this Agreement and shall be entitled
to rely conclusively (without further evidence of any kind whatsoever) on any
document executed or purported to be executed on behalf of any Shareholder by
Shareholder Representative, and on any other action taken or purported to be
taken on behalf of any Shareholder by Shareholder Representative, as being fully
binding upon such Person. Notices or communications to or from Shareholder
Representative shall constitute notice to or from each of the Shareholders. Any
decision or action by Shareholder Representative hereunder, including any
agreement between Shareholder Representative and Buyer relating to the defense,
payment or settlement of any claims for indemnification hereunder or the amount
of any Earn Out Payments, shall constitute a decision or action of all
Shareholders and shall be final, binding and conclusive upon each such Person.
No Shareholder shall have the right to object to, dissent from, protest or
otherwise contest the same. The provisions of this Section, including the power
of attorney granted hereby, are independent and severable, are irrevocable and
coupled with an interest and shall not be terminated by any act of any
Shareholder, either individually or collectively, or by operation of Law,
whether by death or other event.

(c)                The Shareholder Representative may resign at any time, and
may be removed for any reason or no reason by the vote or written consent of a
majority in interest of the Shareholders according to each Shareholder’s
percentage ownership in the Company immediately prior to the First Closing (the
“Majority Holders”); provided, however, in no event shall Shareholder
Representative resign or be removed without the Majority Holders having first
appointed a new Shareholder Representative who shall assume such duties
immediately upon the resignation or removal of Shareholder Representative. In
the event of the death, incapacity, resignation or removal of Shareholder
Representative, a new Shareholder Representative shall be appointed by the vote
or written consent of the Majority Holders. The Shareholders acknowledge and
agree that, if a Shareholder is available that is also an employee of the
Company, any Shareholder Representative appointed hereunder must at the time of
such appointment be an employee of the Company and shall be deemed to have
immediately resigned such appointment upon the effective date of any cessation
of employment with the Company. Notice of such vote or a copy of the written
consent appointing such new Shareholder Representative shall be sent to Buyer,
such appointment to be effective upon the later of the date indicated in such
consent or the date such notice is received by Buyer; provided, that until such
notice is received, Buyer shall be entitled to rely on the decisions and actions
of the prior Shareholder Representative as described in subsection (b) above.

Section 5.10            Option Agreements.  Promptly following the First Closing
Date, Parent shall submit to its board of directors with regard to the approval
and issuance of the Option Agreements and shall deliver to each Insider
Shareholder an Option Agreement for such Insider Shareholder’s acceptance and
execution.

ARTICLE VI
TAX MATTERS
 
Section 6.01              Tax Covenants.

(a)                Without the prior written consent of Buyer (which will not be
unreasonably withheld, conditioned or delayed), Shareholders shall not, to the
extent it may affect, or relate to, the Company, make, change or rescind any Tax
election, amend any Tax Return or take any position on any Tax Return, take any
action, omit to take any action or enter into any other transaction that would
have the effect of increasing the Tax liability or reducing any Tax asset of
Buyer or the Company in respect of any Post-Closing Tax Period.

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(b)                Without the prior written consent of the Shareholder
Representative (which consent will not be unreasonably withheld or delayed),
Buyer shall not, and shall not cause or permit the Company or its Affiliates to
(i) amend any Tax Returns filed with respect to any Tax year ending on or before
the First Closing Date (or with respect to any Straddle Period) or (ii) make any
Tax election that has retroactive effect to any such Tax year (or to any
Straddle Period).

(c)                All transfer, documentary, sales, use, stamp, registration,
value added and other such Taxes and fees (including any penalties and interest)
incurred in connection with this Agreement and the other Transaction Documents
(including any real property transfer Tax and any other similar Tax) shall be
borne and paid by Shareholders when due. Each Shareholder shall, at its own
expense, timely file any Tax Return or other document with respect to such Taxes
or fees (and Buyer shall cooperate with respect thereto as necessary).

(d)               Buyer shall prepare, or cause to be prepared, all Tax Returns
required to be filed by the Company after the First Closing Date with respect to
a Pre-Closing Tax Period. Any such Tax Return shall be prepared in a manner
consistent with past practice (unless otherwise required by Law) and without a
change of any election or any accounting method and shall be submitted by Buyer
to Shareholders (together with schedules, statements and, to the extent
requested by the Shareholders, supporting documentation) at least 45 days prior
to the due date (including extensions) of such Tax Return. If Shareholders
object to any item on any such Tax Return, it shall, within ten days after
delivery of such Tax Return, notify Buyer in writing that it so objects,
specifying with particularity any such item and stating the specific factual or
legal basis for any such objection. If a notice of objection shall be duly
delivered, Buyer and Shareholders shall negotiate in good faith and use their
commercially reasonable best efforts to resolve such items. If Buyer and
Shareholders are unable to reach such agreement within ten days after receipt by
Buyer of such notice, the disputed items shall be resolved by the Independent
Accountant and any determination by the Independent Accountant shall be final.
The Independent Accountant shall resolve any disputed items within twenty days
of having the item referred to it pursuant to such procedures as it may require.
If the Independent Accountant is unable to resolve any disputed items before the
due date for such Tax Return, the Tax Return shall be filed as prepared by Buyer
and then amended to reflect the Independent Accountant’s resolution. The costs,
fees and expenses of the Independent Accountant shall be borne equally by Buyer
and the Shareholders. The preparation and filing of any Tax Return of the
Company that does not relate to a Pre-Closing Tax Period shall be exclusively
within the control of Buyer.

Section 6.02             Termination of Existing Tax Sharing Agreements. Any and
all existing Tax sharing agreements (whether written or not) binding upon the
Company shall be terminated as of the First Closing Date. After such date
neither the Company, any Shareholder nor any Affiliates of any Shareholder and
their respective Representatives shall have any further rights or liabilities
thereunder.

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Section 6.03              Tax Indemnification. Except to the extent treated as a
liability in the calculation of Closing Date Net Assets, the following Losses
incurred by Buyer and any Buyer Indemnitee shall constitute “Tax Losses”: (a)
any Loss attributable to any breach of or inaccuracy in any representation or
warranty made in Section 3.22 (Taxes); (b) any Loss attributable to any breach
or violation of, or failure to fully perform, any covenant, agreement,
undertaking or obligation in this Article VI (Tax Matters); (c) all Taxes of the
Company or relating to the business of the Company for all Pre-Closing Tax
Periods; (d) all Taxes of any member of an affiliated, consolidated, combined or
unitary group of which the Company (or any predecessor of the Company) is or was
a member on or prior to the First Closing Date by reason of a liability under
Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign,
state or local Law; and (e) any and all Taxes of any person imposed on the
Company arising under the principles of transferee or successor liability or by
contract, relating to an event or transaction occurring before the First Closing
Date. In each of the above cases, together with any out-of-pocket fees and
expenses (including attorneys’ and accountants’ fees) incurred in connection
therewith.

Section 6.04             Straddle Period. In the case of Taxes that are payable
with respect to a taxable period that begins before and ends after the First
Closing Date (each such period, a “Straddle Period”), the portion of any such
Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement shall
be:

(a)                in the case of Taxes (i) based upon, or related to, income,
receipts, profits, wages, capital or net worth, (ii) imposed in connection with
the sale, transfer or assignment of property, or (iii) required to be withheld,
deemed equal to the amount which would be payable if the taxable year ended with
the First Closing Date; and

(b)                in the case of other Taxes, deemed to be the amount of such
Taxes for the entire period multiplied by a fraction the numerator of which is
the number of days in the period ending on the First Closing Date and the
denominator of which is the number of days in the entire period.

Section 6.05             Intentionally Omitted..

Section 6.06             Contests. Buyer agrees to give written notice to
Shareholders of the receipt of any written notice by the Company, Buyer or any
of Buyer’s Affiliates which involves the assertion of any claim, or the
commencement of any Action, in respect of which an indemnity may be sought by
Buyer for a Tax Loss (a “Tax Claim”); provided, that failure to comply with this
provision shall not affect Buyer’s right to indemnification hereunder, except
and only to the extent that the Shareholders forfeit rights or defenses by
reason of such failure. Buyer shall control the contest or resolution of any Tax
Claim; provided, however, that Buyer shall obtain the prior written consent of
Shareholders (which consent shall not be unreasonably withheld, conditioned or
delayed) before entering into any settlement of a claim or ceasing to defend
such claim; and, provided further, that Shareholders shall be entitled to
participate in the defense of such claim and to employ counsel of its choice for
such purpose, the fees and expenses of which separate counsel shall be borne
solely by Shareholders.

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Section 6.07             Cooperation and Exchange of Information. Shareholders
and Buyer shall provide each other with such cooperation and information as
either of them reasonably may request of the other in filing any Tax Return
pursuant to this Article VI (Tax Matters) or in connection with any audit or
other proceeding in respect of Taxes of the Company. Such cooperation and
information shall include providing copies of relevant Tax Returns or portions
thereof, together with accompanying schedules, related work papers and documents
relating to rulings or other determinations by tax authorities. Each of the
Shareholders and Buyer shall retain all Tax Returns, schedules and work papers,
records and other documents in its possession relating to Tax matters of the
Company for any taxable period beginning before the First Closing Date until the
expiration of the statute of limitations of the taxable periods to which such
Tax Returns and other documents relate, without regard to extensions except to
the extent notified by the other party in writing of such extensions for the
respective Tax periods. Prior to transferring, destroying or discarding any Tax
Returns, schedules and work papers, records and other documents in its
possession relating to Tax matters of the Company for any taxable period
beginning before the First Closing Date, Shareholders or Buyer (as the case may
be) shall provide the other party with reasonable written notice and offer the
other party the opportunity to take custody of such materials.

Section 6.08             Overlap. To the extent that any obligation or
responsibility pursuant to Article VIII (Indemnification) may overlap with an
obligation or responsibility pursuant to this Article VI (Tax Matters), the
provisions of this Article VI (Tax Matters) shall govern.
 
ARTICLE VII
INTENTIONALLY OMITTED

ARTICLE VIII
INDEMNIFICATION
 
Section 8.01             Survival. Subject to the limitations and other
provisions of this Agreement, the representations and warranties contained
herein shall survive the First Closing until such date that is the one year
anniversary of the First Closing Date; provided, that the representations and
warranties in (a) Section 3.01 (Authority of Shareholders), Section 3.02
(Organization, Authority and Qualification of the Company ), Section
3.03 (Capitalization), Section 3.25 (Brokers), Section 4.01 (Organization and
Authority of Buyer and Parent)  and Section 4.04 (Brokers) shall survive
indefinitely, (b) Section 3.19 (Environmental Matters), Section 3.20 (Employee
Benefit Matters) and Section 3.22 (Taxes) shall survive for the full period of
all applicable statutes of limitations (giving effect to any waiver, mitigation
or extension thereof) plus sixty (60) days, and (c) Section 3.12(g)
(Intellectual Property Matters) shall survive for a period of three (3) years
after the First Closing Date. All covenants and agreements of the parties
contained herein shall survive the First Closing Date indefinitely or for such
other period as is explicitly specified therein. Notwithstanding the foregoing,
any claims asserted in good faith with reasonable specificity (to the extent
known at such time) and in writing by notice from the non-breaching party to the
breaching party prior to the expiration date of the applicable survival period
shall not thereafter be barred by the expiration of the relevant representation
or warranty and such claims shall survive until finally resolved.

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Section 8.02             Indemnification By Shareholders.

(a)                Subject to the other terms and conditions of this Article
VIII (Indemnification), the Shareholders shall severally indemnify and defend
each of Buyer and its Affiliates (including the Company) and their respective
Representatives (collectively, the “Buyer Indemnitees”) against, and shall hold
each of them harmless from and against, and shall pay and reimburse each of them
for, any and all Losses incurred or sustained by, or imposed upon, the Buyer
Indemnitees based upon, arising out of, with respect to or by reason of (i) any
inaccuracy or breach of any of the representations or warranties in Section 3.01
(Authority of Shareholders) or in any certificate or instrument delivered by or
on behalf of such Shareholder pursuant to this Agreement, as of the date such
representation or warranty was made (except for representations and warranties
that expressly relate to a specified date, the inaccuracy in or breach of which
will be determined with reference to such specified date) or (ii) any breach or
non-fulfillment of any covenant, agreement or obligation to be performed by such
Shareholder pursuant to this Agreement.

(b)               Subject to the other terms and conditions of this Article VIII
(Indemnification), the Insider Shareholders shall jointly and severally
indemnify and defend each of Buyer and its Affiliates (including the Company)
and their respective Representatives (collectively, the “Buyer Indemnitees”)
against, and shall hold each of them harmless from and against, and shall pay
and reimburse each of them for, any and all Losses incurred or sustained by, or
imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to
or by reason of:

(i)                  any inaccuracy in or breach of any of the representations
or warranties of the Shareholders or the Company contained in this Agreement
(other than Section 3.01 (Authority of Shareholders)) or in any certificate or
instrument delivered by or on behalf of any Insider Shareholder or the Company
pursuant to this Agreement, as of the date such representation or warranty was
made (except for representations and warranties that expressly relate to a
specified date, the inaccuracy in or breach of which will be determined with
reference to such specified date);
 
(ii)                 any breach or non-fulfillment of any covenant, agreement or
obligation to be performed by the Shareholders or the Company (other than as
provided in subsection (a)(ii) above) pursuant to this Agreement; or
 
(iii)               any Tax Losses.
 
Section 8.03             Indemnification By Buyer and Parent. Subject to the
other terms and conditions of this Article VIII (Indemnification), Buyer and
Parent shall jointly and severally indemnify and defend each Shareholder and his
or her respective Affiliates (collectively, the “Shareholder Indemnitees”)
against, and shall hold each of them harmless from and against, and shall pay
and reimburse each of them for, any and all Losses incurred or sustained by, or
imposed upon, the Shareholder Indemnitees based upon, arising out of, with
respect to or by reason of:

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(a)                any inaccuracy in or breach of any of the representations or
warranties of Buyer or Parent contained in this Agreement or in any certificate
or instrument delivered by or on behalf of Buyer or Parent pursuant to this
Agreement, as of the date such representation or warranty was made (except for
representations and warranties that expressly relate to a specified date, the
inaccuracy in or breach of which will be determined with reference to such
specified date); or

(b)                any breach or non-fulfillment of any covenant, agreement or
obligation to be performed by Buyer or Parent pursuant to this Agreement.

Section 8.04             Certain Limitations. The indemnification provided for
in Section 8.02 (Indemnification By Shareholders) and Section
8.03 (Indemnification By Buyer and Parent) shall be subject to the following
limitations:

(a)                Shareholders shall not be liable to the Buyer Indemnitees for
indemnification under Section 8.02 (Indemnification By Shareholders)  until the
aggregate amount of all Losses in respect of indemnification under Section 8.02
(Indemnification By Shareholders)  exceeds $150,000 (the “Basket”), in which
event Shareholders shall be required to pay or be liable for all such Losses
from the first dollar. The aggregate amount of all Losses for which Shareholders
shall be liable pursuant to Section 8.02 (Indemnification By Shareholders) shall
not exceed Three Million Dollars ($3,000,000) (the “Cap”).

(b)               Buyer shall not be liable to the Shareholder Indemnitees for
indemnification under Section 8.03 (Indemnification By Buyer and Parent) until
the aggregate amount of all Losses in respect of indemnification under Section
8.03 (Indemnification By Buyer and Parent) exceeds the Basket, in which event
Buyer shall be required to pay or be liable for all such Losses from the first
dollar. The aggregate amount of all Losses for which Buyer shall be liable
pursuant to Section 8.03 (Indemnification By Buyer and Parent) shall not exceed
the Cap, except for breach of Buyer’s obligations in Article II (Purchase and
Sale) and Parent’s obligations in Section 5.08 (Parent Guaranty) for which
Losses shall not exceed the Aggregate Purchase Price.

(c)                Notwithstanding the foregoing, the limitations set forth in
Section 8.04(a) and Section 8.04(b) (Certain Limitations) above shall not apply
to any Losses arising out of or related to Intentional Fraud.

(d)                For purposes of this Article VIII (Indemnification), the
calculation of the amount of Losses arising as a result of any inaccuracy in or
breach of any representation or warranty shall be determined without regard to
any materiality, Material Adverse Effect or other similar qualification
contained in or otherwise applicable to such representation or warranty.

Section 8.05             Indemnification Procedures. The party making a claim
under this Article VIII (Indemnification) is referred to as the “Indemnified
Party”, and the party against whom such claims are asserted under this Article
VIII (Indemnification) is referred to as the “Indemnifying Party”.

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(a)                 Third Party Claims. If any Indemnified Party receives notice
of the assertion or commencement of any Action made or brought by any Person who
is not a party to this Agreement or an Affiliate of a party to this Agreement or
a Representative of the foregoing (a “Third Party Claim”) against such
Indemnified Party with respect to which the Indemnifying Party is obligated to
provide indemnification under this Agreement, the Indemnified Party shall give
the Indemnifying Party reasonably prompt written notice thereof, but in any
event not later than thirty (30) calendar days after receipt of such notice of
such Third Party Claim. The failure to give such prompt written notice shall
not, however, relieve the Indemnifying Party of its indemnification obligations,
except and only to the extent that the Indemnifying Party forfeits rights or
defenses by reason of such failure. Such notice by the Indemnified Party shall
describe the Third Party Claim in reasonable detail, shall include copies of all
material written evidence thereof and shall indicate the estimated amount, if
reasonably practicable, of the Loss that has been or may be sustained by the
Indemnified Party and the Section of this Agreement pursuant to which such Third
Party Claim is made. The Indemnifying Party shall have the right to participate
in, or by giving written notice to the Indemnified Party, to assume the defense
of any Third Party Claim at the Indemnifying Party’s expense and by the
Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in
good faith in such defense; provided, that such Indemnifying Party shall not
have the right to defend or direct the defense of any such Third Party Claim
that seeks an injunction or other equitable relief against the Indemnified
Party. In the event that the Indemnifying Party assumes the defense of any Third
Party Claim, subject to Section 8.05(b) (Indemnification Procedures), it shall
have the right to take such action as it deems necessary to avoid, dispute,
defend, appeal or make counterclaims pertaining to any such Third Party Claim in
the name and on behalf of the Indemnified Party. The Indemnified Party shall
have the right to participate in the defense of any Third Party Claim with
counsel selected by it subject to the Indemnifying Party’s right to control the
defense thereof. The fees and disbursements of such counsel shall be at the
expense of the Indemnified Party, provided, that if in the reasonable opinion of
counsel to the Indemnified Party, (A) there are legal defenses available to an
Indemnified Party that are different from or additional to those available to
the Indemnifying Party; or (B) there exists a conflict of interest between the
Indemnifying Party and the Indemnified Party that cannot be waived, the
reasonable fees and expenses of counsel to the Indemnified Party in each
jurisdiction for which the Indemnified Party determines counsel is required
shall be deemed Losses of the Indemnified Party. If the Indemnifying Party
elects not to compromise or defend such Third Party Claim, fails to promptly
notify the Indemnified Party in writing of its election to defend as provided in
this Agreement, or fails to diligently prosecute the defense of such Third Party
Claim, the Indemnified Party may, subject to Section 8.05(b) (Indemnification
Procedures), pay, compromise, defend such Third Party Claim and seek
indemnification for any and all Losses based upon, arising from or relating to
such Third Party Claim. The Shareholder Representative (or in the case of any
claim arising under Section 8.02(a) (Indemnification by Shareholders) above, the
affected Shareholder) and Buyer shall cooperate with each other in all
reasonable respects in connection with the defense of any Third Party Claim,
including making available (subject to the provisions of Section 5.03
(Confidentiality)) records relating to such Third Party Claim and furnishing,
without expense (other than reimbursement of actual out-of-pocket expenses) to
the defending party, management employees of the non-defending party as may be
reasonably necessary for the preparation of the defense of such Third Party
Claim.

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(b)                Settlement of Third Party Claims. Notwithstanding any other
provision of this Agreement, the Indemnifying Party shall not enter into
settlement of any Third Party Claim without the prior written consent of the
Indemnified Party, except as provided in this Section 8.05(b) (Indemnification
Procedures). If a firm offer is made to settle a Third Party Claim without
leading to liability or the creation of a financial or other obligation on the
part of the Indemnified Party and provides, in customary form, for the
unconditional release of each Indemnified Party from all liabilities and
obligations in connection with such Third Party Claim and the Indemnifying Party
desires to accept and agree to such offer, the Indemnifying Party shall give
written notice to that effect to the Indemnified Party. If the Indemnified Party
fails to consent to such firm offer within ten (10) days after its receipt of
such notice, the Indemnified Party may continue to contest or defend such Third
Party Claim and in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim shall not exceed the amount of such settlement
offer. If the Indemnified Party fails to consent to such firm offer and also
fails to assume defense of such Third Party Claim, the Indemnifying Party may
settle the Third Party Claim upon the terms set forth in such firm offer to
settle such Third Party Claim. If the Indemnified Party has assumed the defense
pursuant to Section 8.05(a) (Indemnification Procedures), it shall not agree to
any settlement without the written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld or delayed).

(c)                Direct Claims. Any Action by an Indemnified Party on account
of a Loss which does not result from a Third Party Claim (a “Direct Claim”)
shall be asserted by the Indemnified Party giving the Indemnifying Party
reasonably prompt written notice thereof, but in any event not later than thirty
(30) days after the Indemnified Party becomes aware of such Direct Claim. The
failure to give such prompt written notice shall not, however, relieve the
Indemnifying Party of its indemnification obligations, except and only to the
extent that the Indemnifying Party forfeits rights or defenses by reason of such
failure. Such notice by the Indemnified Party shall describe the Direct Claim in
reasonable detail, shall include copies of all material written evidence thereof
and shall indicate the estimated amount, if reasonably practicable, of the Loss
that has been or may be sustained by the Indemnified Party and the Section of
this Agreement pursuant to which such Direct Claim is made. The Indemnifying
Party shall have thirty (30) days after its receipt of such notice to respond in
writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying
Party and its professional advisors to investigate the matter or circumstance
alleged to give rise to the Direct Claim, and whether and to what extent any
amount is payable in respect of the Direct Claim and the Indemnified Party shall
assist the Indemnifying Party’s investigation by giving such information and
assistance (including access to the Company’s premises and personnel and the
right to examine and copy any accounts, documents or records) as the
Indemnifying Party or any of its professional advisors may reasonably request.
If the Indemnifying Party does not so respond within such thirty (30) day
period, the Indemnifying Party shall be deemed to have rejected such claim, in
which case the Indemnified Party shall be free to pursue such remedies as may be
available to the such Indemnified Party pursuant to Section 10.09(c) (Governing
Law; Dispute Resolution).

Section 8.06             Payments. Once a Loss is agreed to by the Indemnifying
Party to be a Loss for which the Indemnifying Party must indemnify an
Indemnified Party, or such Loss is finally adjudicated to be payable pursuant to
this Article VIII (Indemnification), the Indemnifying Party shall satisfy its
obligations within fifteen (15) Business Days of such final, non-appealable
adjudication by (a) wire transfer of immediately available funds or (b) if the
Shareholders are the Indemnifying Party and (x) if such agreement occurs before
the Second Closing Date, by authorizing Buyer to withhold the agreed Loss from
the Second Tranche Escrow Payment, or (y) if such agreement occurs after the
Second Closing Date, by instructing the Escrow Agent pursuant to the Escrow
Agreement to disburse the amount of any agreed Losses to the Buyer Indemnitee;
provided, that, if the Second Tranche Escrow Payment or funds remaining in the
Escrow Amount are insufficient to satisfy Shareholders obligations hereunder,
Shareholders shall satisfy their obligations by wire transfer of immediately
available funds. The parties hereto agree that should an Indemnifying Party not
make full payment of any such obligations within such fifteen (15) Business Day
period, any amount payable shall accrue interest from and including the date of
agreement of the Indemnifying Party or final, non-appealable adjudication to but
excluding the date such payment has been made at a rate per annum equal to five
per cent (5%). Such interest shall be calculated daily on the basis of a 365 day
year and the actual number of days elapsed.

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Section 8.07            Tax Treatment of Indemnification Payments. All
indemnification payments made under this Agreement shall be treated by the
parties as an adjustment to the Purchase Price for Tax purposes, unless
otherwise required by Law.

Section 8.08            Effect of Investigation. The representations, warranties
and covenants of the Indemnifying Party, and the Indemnified Party’s right to
indemnification with respect thereto, shall not be affected or deemed waived by
reason of any investigation made by or on behalf of the Indemnified Party
(including by any of its Representatives) or by reason of the fact that the
Indemnified Party or any of its Representatives knew or should have known that
any such representation or warranty is, was or might be inaccurate.

Section 8.09             Exclusive Remedies. Subject to (a) Section
5.04 (Non-competition; Non-solicitation), (b) Section 10.10 (Specific
Performance) and (c) any dispute resolution procedures expressly established by
the parties herein, including, without limitation, by reference to Section 10.09
(Governing Law; Dispute Resolution), the parties acknowledge and agree that
their sole and exclusive remedy with respect to any and all claims (other than
claims arising from Intentional Fraud, criminal activity or willful misconduct
on the part of a party hereto in connection with the transactions contemplated
by this Agreement, in which cases the Persons committing such acts shall be
solely responsible therefor to the extent that such claims exceed the Aggregate
Purchase Price) for any breach of any representation, warranty, covenant,
agreement or obligation set forth herein or otherwise relating to the subject
matter of this Agreement, shall be pursuant to the indemnification provisions
set forth in Article VI (Tax Matters) and this Article VIII (Indemnification)
and pursuant to Section 10.09(c) (Governing Law; Dispute Resolution). In
furtherance of the foregoing, each party hereby waives, to the fullest extent
permitted under Law, any and all rights, claims and causes of action for any
breach of any representation, warranty, covenant, agreement or obligation set
forth herein or otherwise relating to the subject matter of this Agreement it
may have against the other parties hereto and their Affiliates and each of their
respective Representatives arising under or based upon any Law, except pursuant
to the indemnification provisions set forth in this Article
VIII (Indemnification). Nothing in this Section 8.09 (Exclusive Remedies) shall
limit any Person’s right to seek and obtain any equitable relief to which any
Person shall be entitled or to seek any remedy on account of any party’s
Intentional Fraud, criminal or intentional misconduct.
 
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ARTICLE IX
INTENTIONALLY OMITTED
 
ARTICLE X
MISCELLANEOUS
 
Section 10.01          Notices. All notices, requests, consents, claims,
demands, waivers and other communications hereunder shall be in writing and
shall be deemed to have been given (a) when delivered by hand (with written
confirmation of receipt); (b) when received by the addressee if sent by a
nationally recognized overnight courier (receipt requested); (c) on the date
sent by facsimile or e-mail of a PDF document (with confirmation of
transmission) if sent during normal business hours of the recipient, and on the
next Business Day if sent after normal business hours of the recipient or (d) on
the third (3rd) day after the date mailed, by certified or registered mail,
return receipt requested, postage prepaid. Such communications must be sent to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
10.01 (Notices)):
 
If to Shareholders:
Brink Shareholders
c/o Shareholder Representative
at Contact Information
set forth in Exhibit 12 attached hereto
 
with a copy to:
Procopio, Cory, Hargreaves & Savitch LLP
12544 High Bluff Drive, Suite 300
San Diego, CA 92130
Attention: Paul B. Johnson
Facsimile: 619-744-5443
 E-mail: paul.johnson@procopio.com
 
If to Buyer or Parent:
PAR Technology Corporation
8383 Seneca Turnpike
New Hartford, NY 13413
Attention: Ronald J. Casciano
Chief Executive Officer & President
Facsimile: 315-735-4191
E-mail: ron_casciano@partech.com
 
with a copy to:
PAR Technology Corporation
8383 Seneca Turnpike
New Hartford, NY 13413
Attention: Legal Department
Facsimile: 315-735-4191
E-mail:  legal@partech.com
 
with a copy to:
Pierce Atwood LLP
100 Summer Street
Boston, MA 02110
Attention: Timothy C. Maguire
Facsimile:617-824-2020
E-mail: tmaguire@pierceatwood.com

 
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Section 10.02         Interpretation. For purposes of this Agreement, (a) the
words “include,” “includes” and “including” shall be deemed to be followed by
the words “without limitation”; (b) the word “or” is not exclusive; and (c) the
words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this
Agreement as a whole. Unless the context otherwise requires, references herein:
(x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles
and Sections of, and Disclosure Schedules and Exhibits attached to, this
Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and (z) to a
statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder. This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted. The Disclosure Schedules and Exhibits
referred to herein shall be construed with, and as an integral part of, this
Agreement to the same extent as if they were set forth verbatim herein.

Section 10.03          Headings. The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.

Section 10.04         Severability. If any term or provision of this Agreement
is invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction. Except as provided in Section 5.04 (Non-competition;
Non-solicitation), upon such determination that any term or other provision is
invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

Section 10.05         Entire Agreement. This Agreement and the other Transaction
Documents constitute the sole and entire agreement of the parties to this
Agreement with respect to the subject matter contained herein and therein, and
supersede all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter. In the event of any
inconsistency between the statements in the body of this Agreement and those in
the other Transaction Documents, the Exhibits and Disclosure Schedules (other
than an exception expressly set forth as such in the Disclosure Schedules), the
statements in the body of this Agreement will control. No other representations
or warranties have been made by the Parties to each other except as are set
forth in this Agreement and the other Transaction Documents.

Section 10.06          Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may assign its rights or obligations
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. No assignment shall relieve the
assigning party of any of its obligations hereunder.

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Section 10.07          No Third-party Beneficiaries. Except as provided in
Article VIII (Indemnification), this Agreement is for the sole benefit of the
parties hereto and their respective successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
or entity any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

Section 10.08         Amendment and Modification; Waiver. This Agreement may
only be amended, modified or supplemented by an agreement in writing signed by
each party hereto. No waiver by any party of any of the provisions hereof shall
be effective unless explicitly set forth in writing and signed by the party so
waiving. No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

Section 10.09          Governing Law; Dispute Resolution.

(a)                This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction).

(b)                Except to the extent a different procedure is expressly
provided for herein and subject to the limitations of set forth in Article VIII
(Indemnification), including, without limitation, Section 8.09 (Exclusive
Remedies), if any dispute arises (i) out of or relating to, this Agreement, any
Transaction Document or any alleged breach hereof or thereof, or (ii) with
respect to any of the Transactions (“Dispute”), the party desiring to resolve
such Dispute shall deliver a written notice describing such Dispute with
reasonable specificity to the other parties (“Dispute Notice”).  If any party
delivers a Dispute Notice pursuant to this Section 10.09 (Governing Law; Dispute
Resolution), the parties involved in the Dispute shall meet at least twice
within the thirty (30) day period commencing with the date of the Dispute Notice
and in good faith shall attempt to resolve such Dispute.

(c)                If the Dispute is not resolved pursuant to Section 10.09(b)
(Governing Law; Dispute Resolution) above, the Dispute shall be submitted to
nonbinding mediation with a mutually agreed upon mediator.  A demand for
mediation shall be forwarded in writing to the other party.  Within ten (10)
days after receipt of the demand for mediation, the parties shall attempt in
good faith to agree on a mediator.  Should however, the parties fail to agree on
a mediator, then each party shall select a mediator and the two mediators so
chosen shall select a third mediator.  Mediation shall be conducted by the panel
of three mediators.  The mediation shall be held within thirty (30) days from
the selection of the mediator. Each party shall bear its own expenses of such
mediation, including the attorneys’ fees and expenses of the parties.  If either
party is dissatisfied with such mediation, either party shall have the right to
submit such dispute to arbitration pursuant to the following subsection (d).

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(d)                If the Dispute is not resolved pursuant to Section 10.09(b)
or (c) (Governing Law; Dispute Resolution) above, the Dispute or indemnification
claim shall be settled by arbitration conducted in San Diego, California, or
such other place as mutually agreed to by the parties, which shall be in
accordance with the then effective Comprehensive Arbitration Rules of JAMS.  The
arbitration of such issues, including the determination of any amount of Losses
suffered by any party hereto by reason of the acts or omissions of any party,
shall be subject to all limitations of liability set forth in this Agreement,
including, without limitation, Article VIII (Indemnification), and shall final
and binding upon all parties.  Judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction.  The arbitrator shall have the
authority to award any remedy or relief that a court in the State of California
could order or grant, including specific performance of any obligation created
under this Agreement, the issuance of an injunction or other provisional relief,
or the imposition of sanctions for abuse or frustration of the arbitration
process.  The arbitrator shall apply the law of the State of New York in
deciding the merits of any Dispute.  The arbitrator shall provide a written and
reasoned explanation for any award rendered in the arbitration.  By agreeing to
arbitration, the parties do not intend to deprive any court of its jurisdiction
to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in
aid of arbitration proceedings and the enforcement of any award.  Except as
otherwise set forth in this Agreement, the cost of any arbitration hereunder,
including the cost of the record or transcripts thereof, if any, administrative
fees, and all other fees involved including reasonable attorneys’ fees incurred
by the party determined by the arbitrator to be the prevailing party, shall be
paid by the party determined by the arbitrator not to be the prevailing party,
or otherwise allocated in an equitable manner as determined by the arbitrator.

Section 10.10          Specific Performance. The parties agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy to
which they are entitled at law or in equity.

Section 10.11         Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same agreement. A signed copy of this
Agreement delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement.
 
[SIGNATURE PAGE FOLLOWS]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.
 

 
PARTECH, INC.
   
By
     
Name:
 
Title:

 

 
PAR TECHNOLOGY CORPORATION
   
By
        
Name:
 
Title:

  

 
BRINK SOFTWARE, INC.
   
By
         
Name:
 
Title:

 
[COMPANY, BUYER AND PARENT SIGNATURE PAGE]
 

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

 
[SHAREHOLDERS NAME]
   
By
       
Name:
 
Title:

 
CONSENT OF SPOUSE
 
I, [SPOUSE NAME], spouse of [SHAREHOLDERS NAME],  have read and hereby approve
the foregoing Agreement.  In consideration of the purchase by Buyer of the
Shares pursuant to the Agreement, I hereby agree to be irrevocably bound by the
Agreement and further agree that any community property or similar interest that
I may have in the Shares shall be similarly bound by the Agreement.  Nothing in
this Agreement is intended to give me any property rights with respect to the
Shares that I do not otherwise have under applicable law.

I hereby appoint my spouse my attorney in fact to execute any documents
necessary or desirable to consummate the transactions contemplated by the
Agreement, including any Stock Powers, Assignments Separate from Certificate,
the Letter of Transmittal or the like.
 

 
[SPOUSE NAME]
 
 
   
By
    
Print Name:

 
[SHAREHOLDER AND SPOUSE SIGNATURE PAGE]

 

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