Exhibit 10.1

ACQUISITION AGREEMENT

AMONG

OVERLAND STORAGE, INC.,

TANDBERG DATA HOLDINGS S.À R.L.,

AND

THE COMPANY SHAREHOLDERS LISTED ON SCHEDULE I HERETO

November 1, 2013

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TABLE OF CONTENTS

 

ARTICLE 1    

   CERTAIN DEFINITIONS      1   

ARTICLE 2    

   THE ACQUISITION      13   

2.1

   Purchase and Sale of Company Interests      13   

2.2

   Purchase Price      13   

2.3

   Closing      14   

2.4

   Transactions to be Effected at the Closing      14   

2.5

   Tax Withholding      15   

2.6

   Further Assurances      16   

ARTICLE 3

   [RESERVED]      16   

ARTICLE 4

   REPRESENTATIONS AND WARRANTIES CONCERNING THE GROUP COMPANIES      16   

4.1

   Organization and Good Standing      16   

4.2

   Subsidiaries      17   

4.3

   Power, Authorization and Validity      17   

4.4

   Capitalization      18   

4.5

   No Conflict      18   

4.6

   Litigation      19   

4.7

   Taxes      19   

4.8

   Related Party Transactions      22   

4.9

   Company Financial Statements      22   

4.10

   Title to Properties      23   

4.11

   Absence of Certain Changes      25   

4.12

   Contracts, Agreements, Arrangements, Commitments and Undertakings      26   

4.13

   No Default; No Restrictions      28   

4.14

   Intellectual Property      28   

4.15

   Compliance with Laws      33   

4.16

   Employees, ERISA and Other Compliance      33   

4.17

   Books and Records      36   

4.18

   Insurance      37   

4.19

   Environmental Matters      37   

4.20

   Customers and Suppliers      37   

4.21

   Accounts Receivable      38   

4.22

   Foreign Corrupt Practices Act      38   

4.23

   Export Controls      39   

4.24

   Product Warranty      40   

4.25

   Inventory      40   

4.26

   No Existing Discussions      40   

4.27

   Corporate Documents      40   

4.28

   Transaction Fees      41   

4.29

   Disclosure      41   

ARTICLE 5

   REPRESENTATIONS AND WARRANTIES OF COMPANY SHAREHOLDERS      41   

5.1

   Organization of Company Shareholders      41   

5.2

   Power, Authorization and Validity      41   

5.3

   No Conflict      42   

5.4

   Company Interests      42   

 

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TABLE OF CONTENTS

 

5.5

   Brokers’ Fees      42   

5.6

   Information Supplied      42   

ARTICLE 6    

   REPRESENTATIONS AND WARRANTIES OF BUYER      42   

6.1

   Organization, Good Standing and Qualification      43   

6.2

   Authorization      43   

6.3

   Capitalization      43   

6.4

   Valid Issuance      44   

6.5

   Consents      44   

6.6

   Delivery of SEC Filings; Business      44   

6.7

   Absence of Certain Changes      44   

6.8

   SEC Filings      45   

6.9

   No Conflict, Breach, Violation or Default      45   

6.10

   Tax Matters      45   

6.11

   Title to Properties      46   

6.12

   Certificates, Authorities and Permits      46   

6.13

   Labor Matters      46   

6.14

   Intellectual Property      47   

6.15

   Environmental Matters      47   

6.16

   Litigation      47   

6.17

   Financial Statements      48   

6.18

   Insurance Coverage      48   

6.19

   Compliance with Nasdaq Continued Listing Requirements      48   

6.20

   Brokers and Finders      48   

6.21

   Questionable Payments      48   

6.22

   Board Approval      48   

6.23

   Proxy Statement      49   

6.24

   Internal Controls      49   

6.25

   Investment Company      49   

6.26

   Compliance with Laws      49   

6.27

   Disclosure      49   

6.28

   Buyer 401(k) Plan      50   

6.29

   No Other Representations or Warranties      50   

ARTICLE 7    

   COMPANY COVENANTS      50   

7.1

   Advice of Changes      50   

7.2

   Maintenance of Business      50   

7.3

   Conduct of Business      51   

7.4

   Regulatory Approvals      51   

7.5

   Necessary Consents      52   

7.6

   Litigation      52   

7.7

   No Other Negotiations      52   

7.8

   Access to Information      53   

7.9

   Satisfaction of Conditions Precedent      53   

7.10

   Company Benefit Arrangements      53   

7.11

   Repayment of Debt      53   

7.12

   Notices to Company Shareholders and Employees      53   

7.13

   Closing Certificates      54   

7.14

   Cooperation      54   

 

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TABLE OF CONTENTS

 

7.15

   Additional Financial Statements      54   

7.16

   Nasdaq Listing      55   

ARTICLE 8    

   BUYER COVENANTS      55   

8.1

   Advice of Changes      55   

8.2

   Regulatory Approvals      55   

8.3

   No Other Negotiations      56   

8.4

   Shareholders Meeting; Preparation of Proxy Materials      58   

8.5

   Board of Directors of Buyer      59   

8.6

   Conduct of Business      59   

8.7

   Satisfaction of Conditions Precedent      59   

8.8

   Litigation      59   

8.9

   Rights Plan      59   

8.10

   Nasdaq Listing      60   

8.11

   Evidence of Transfer of Company Shares      60   

ARTICLE 9    

   CONDITIONS TO CLOSING OF ACQUISITION      60   

9.1

   Conditions to Each Party’s Obligation to Effect the Acquisition      60   

9.2

   Additional Conditions to Obligations of Buyer      60   

9.3

   Additional Conditions to Obligations of the Company Shareholders      62   

ARTICLE 10    

   TERMINATION OF AGREEMENT      62   

10.1

   Termination by Mutual Consent      62   

10.2

   Unilateral Termination      63   

10.3

   Effect of Termination      63   

ARTICLE 11    

   MISCELLANEOUS      64   

11.1

   Survival; Indemnification      64   

11.2

   Governing Law; Resolution of Conflicts      64   

11.3

   Consent to Jurisdiction and Venue      64   

11.4

   Assignment; Binding Upon Successors and Assigns      65   

11.5

   Severability      65   

11.6

   Counterparts      65   

11.7

   Other Remedies      65   

11.8

   Amendments and Waivers      65   

11.9

   Expenses      66   

11.10

   Attorneys’ Fees      66   

11.11

   Notices      66   

11.12

   Waiver of Jury Trial      67   

11.13

   Interpretation; Rules of Construction      67   

11.14

   Third-Party Beneficiary Rights      68   

11.15

   Public Announcement      68   

11.16

   Entire Agreement      68   

 

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SCHEDULES AND EXHIBITS

 

Schedule I

   Company Shareholders

Schedule II

   Subsidiaries of the Company

Schedule III    

   Persons Included in the Definition of “Knowledge”

Schedule IV

   Continuing Officers and Directors of the Group Companies

Exhibit A

   Form of Registration Rights Agreement

Exhibit B

   Form of Voting Agreement

 

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ACQUISITION AGREEMENT

THIS ACQUISITION AGREEMENT (this “Agreement”) is made and entered into as of
November 1, 2013 (the “Agreement Date”) by and among Overland Storage, Inc., a
California corporation (“Buyer”), on the one hand, and Tandberg Data
Holdings S.à r.l., a private limited liability company (société à responsabilité
limitée) incorporated under the laws of the Grand Duchy of Luxembourg, having a
share capital of twelve thousand five hundred Euro (EUR 12,500.-), its
registered office at 46A, avenue J.F. Kennedy, L-1855 Luxembourg, registered
with the Luxembourg Register of Commerce and Companies (R.C.S. Luxembourg) under
number B 147.829 (the “Company”), and the persons listed on Schedule I attached
hereto (collectively, the “Company Shareholders”), on the other hand (each a
“Party” and together the “Parties”).

RECITALS

A.        The Company Shareholders together own (i) 100% of the outstanding
capital shares of the Company and (ii) an income sharing loan agreement granted
by the Company Shareholders to the Company, and have approved and adopted this
Agreement, the Acquisition (as defined below) and the other transactions
contemplated hereby prior to the Agreement Date.

B.        The Company Shareholders desire to sell to Buyer, and Buyer desires to
purchase from the Company Shareholders, 100% of the Company Interests (as
defined below), in each case on the terms and subject to the conditions of this
Agreement (the “Acquisition”).

C.        The Boards of Directors of the Company and Buyer have determined that
the Acquisition is in the best interests of such Parties and their respective
shareholders and have approved and declared advisable this Agreement and the
Acquisition.

D        As a condition to Buyer’s obligation to consummate the Acquisition,
certain employees of the Group Companies (as defined below) shall execute and
deliver to Buyer consulting agreements (each, a “Consulting Agreement”) at the
Closing (as defined below).

E.        Certain employees of the Group Companies may execute and deliver to
Buyer employment agreements (each an “Employment Agreement”) at the Closing.

F.        As a condition to Buyer’s obligation to consummate the Acquisition,
certain employees and consultants of the Group Companies shall execute and
deliver to Buyer Non-Solicitation Agreements (each, a “Non-Solicitation
Agreement”) at the Closing.

G.        Buyer, the Company and the Company Shareholders desire to make certain
representations, warranties, covenants and agreements in connection with the
Acquisition and to prescribe various conditions to the Acquisition.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and conditions contained herein, the Parties hereby agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth
below.

 

1

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“Action” means any action, order, writ, injunction, or claim, suit, litigation,
proceeding, arbitration, mediation, audit, investigation or dispute.

“Affiliate” shall have the meaning set forth in Rule 144 promulgated under the
Securities Act.

“Alternative Buyer Transaction” means: (i) any acquisition or purchase of shares
of Buyer Common Stock from Buyer by any person or “group” (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
representing more than a 50% voting interest in any class or series of Equity
Securities of Buyer or any tender offer or exchange offer that if consummated
would result in any person or “group” (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) beneficially owning
Equity Securities of Buyer representing 50% or more of the voting interest in
any class or series of Equity Securities of Buyer or any merger, consolidation,
business combination or similar transaction involving Buyer pursuant to which
the shareholders of Buyer immediately preceding such transaction hold less than
50% of the equity interests in any class or series of capital stock of the
surviving or resulting entity of such transaction; (ii) any merger,
consolidation, business combination or similar transaction involving Buyer,
(iii) any sale, lease, exchange, transfer, license, acquisition or disposition
of all or substantially all of the assets of Buyer and its Subsidiaries,
considered as a whole; or (iv) any sale, lease, exchange, transfer, license or
disposition to a third party of the business of Buyer.

“Alternative Transaction” means: (i) any acquisition or purchase of Company
Shares from the Company by any person or “group” (as defined under Section 13(d)
of the Exchange Act and the rules and regulations thereunder) representing more
than a 15% voting interest in any class or series of Company Shares or any
tender offer or exchange offer that if consummated would result in any person or
“group” (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) beneficially owning Company Capital Stock representing
15% or more of the voting interest in any class or series of Company Shares or
any merger, consolidation, business combination or similar transaction involving
the Company pursuant to which the Company Shareholders immediately preceding
such transaction hold less than 85% of the equity interests in any class or
series of capital stock of the surviving or resulting entity of such
transaction; (ii) any acquisition, directly or indirectly, of any capital stock
of any Group Company or any merger, consolidation, business combination or
similar transaction involving any Group Company, (iii) any sale, lease,
exchange, transfer, license, acquisition or disposition of a substantial portion
of the assets of any Group Company; (iv) any sale, lease, exchange, transfer,
license or disposition to a third party of the Company Business; or (v) any
initial public offering of capital stock or other securities of any Group
Company pursuant to a registration statement filed under the Securities Act or
any similar offering or filing in any foreign jurisdiction.

“Applicable Law” means, collectively, all supranational, international, national
(of any jurisdiction), federal, state, local or municipal laws, statutes,
ordinances, regulations, and rules, and all orders, writs, injunctions, awards,
judgments and decrees (and any regulations promulgated thereunder) applicable to
the assets, properties and business of the applicable Person.

“Balance Sheet Date” means June 30, 2013.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which banks are required or authorized by Applicable Law to be closed in New
York, New York, San Francisco, California or the Grand Duchy of Luxembourg.

“Buyer Ancillary Agreements” means each agreement or document (other than this
Agreement) that Buyer is to enter into as a party thereto pursuant to this
Agreement.

“Buyer Common Stock” means common stock, no par value, of Buyer.

 

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“Buyer Shareholders Additional Approval Matters” means (i) a proposal to
authorize the board of directors of Buyer, in its discretion, to effect a
reverse stock split of the Buyer Common Stock at a specific ratio, ranging from
one-for-two to one-for-ten, to be determined by the board of directors of Buyer
and effected, if at all, within one (1) year from the date of the Buyer
Shareholders Meeting, and (ii) a proposal to approval the issuance of shares of
Buyer Common Stock upon the conversion of Convertible Notes or New Convertible
Notes held by Cyrus and/or its Affiliates.

“Buyer Shareholders Meeting” means the special meeting of the shareholders of
Buyer to be held to consider, among other things, the issuance of the
Acquisition Shares to the Company Shareholders and the Buyer Shareholders
Additional Approval Matters.

“CFIUS Regulations” means the Regulations Pertaining to Mergers, Acquisitions,
and Takeovers by Foreign Persons, 31 CFR Part 800.

“Charter Documents” means, with respect to a particular legal entity, the
articles or certificate of incorporation, deed of incorporation, formation or
registration (including, if applicable, certificates of change of name),
memorandum of association, articles of association, rules of procedure for the
management of any other corporate body, bylaws, articles of organization,
limited liability company agreement, trust deed, trust instrument, operating
agreement, joint venture agreement, business license, or similar or other
constitutive, governing, or charter documents, or equivalent documents, of such
entity.

“Closing” means the closing of the transactions necessary to consummate the
Acquisition.

“Closing Date” means a time and date to be specified by the Parties, which shall
be (i) no later than the third (3rd) Business Day after the satisfaction or
waiver (to the extent permitted by Applicable Law and this Agreement) of the
conditions set forth in Article 9, or (ii) if later, 30 December 2013, or in
each case at such other time or date as the Parties hereto agree in writing.
Notwithstanding the foregoing, if the Closing would otherwise occur during the
third month of any fiscal quarter of Buyer, absent the written waiver of Buyer,
Buyer and the Company shall mutually agree in writing on an alternative date not
occurring in such month.

“Closing Transaction Fees Certificate” means a certificate of the Company,
executed by authorized representatives of the Company and dated as of the
Closing Date, certifying the amount of the Transaction Fees that have been or
will be paid by the Company at or prior to the Closing, together with the amount
of the Transaction Fees that will remain unpaid by the Company as of the Closing
(including an itemized list of each Transaction Fee and the Party to whom such
amount has been or will be made at or prior to the Closing by the Company or to
whom such amount will be owed as of the Closing). The Closing Transaction Fees
Certificate shall include a representation of the Company, certified by
authorized representatives of the Company, that such certificate includes all
Transaction Fees previously paid by the Company and all Unpaid Transaction Fees
payable following the Closing by the Company or any Affiliate of the Company
(including Buyer).

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

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

“Company Ancillary Agreements” means each agreement or document (other than this
Agreement) that any Group Company is to enter into as a party thereto pursuant
to this Agreement.

“Company Balance Sheet” means the Company and its Subsidiaries’ unaudited
consolidated balance sheet as of the Balance Sheet Date included in the Company
Financial Statements.

 

3

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“Company Business” means the business of the Group Companies taken as a whole as
presently conducted and as presently proposed to be conducted.

“Company Employee Agreement” means each management, employment, retention,
change in control, severance, consulting, relocation, repatriation or
expatriation agreement or other similar Contract between any Group Company or
any of their respective Affiliates, on the one hand, and any current or former
employee, independent contractor or director of any Group Company or any of
their respective Affiliates, on the other hand.

“Company Employee Plan” means any plan, program, policy, practice (including, in
respect of TD Germany, company practice (betriebliche Übung)), Contract or other
arrangement providing for compensation, severance, vesting acceleration, change
in control pay, termination pay, deferred compensation, profit-sharing, bonuses
or other incentives, performance awards, stock or stock-related awards,
insurance coverage (including any self-insured arrangements that are clearly
identified as such), vacation or other paid-time off benefits, disability
benefits, death benefits, hospitalization benefits, retirement benefits, fringe
benefits or other employee benefits or remuneration of any kind, whether
written, unwritten or otherwise, funded or unfunded, including each “employee
benefit plan,” within the meaning of Section 3(3) of ERISA (whether or not ERISA
is applicable to such plan), that is or has been maintained, contributed to, or
required to be contributed to, by the Company or any ERISA Affiliate for the
benefit of any current or former employee, independent contractor or director of
the Company or any Affiliate of the Company, or with respect to which the
Company or any ERISA Affiliate has or may have any Liability or obligation,
except such definition shall not include any Company Employee Agreement.

“Company Financial Statements” means (i) the audited consolidated balance sheets
of the Company and its Subsidiaries as of December 31, 2011 and December 31,
2012; (ii) the Company and its Subsidiaries’ audited consolidated statements of
operations, changes in shareholders’ equity and cash flows for the years ended
December 31, 2011 and December 31, 2012; (iii) the Company and its Subsidiaries’
unaudited consolidated statements of operations, changes in shareholders’ equity
and cash flows for the 6 months ended June 30, 2013; and (iv) the Company
Balance Sheet.

“Company Intellectual Property” means any and all Intellectual Property that is
used, held for use or practiced by the Company or any Group Company, including
any Intellectual Property incorporated into or otherwise used, held for use or
practiced in connection with (or planned to be incorporated into or otherwise
used, held for use or practiced in connection with) any Company Offerings.

“Company Interests” means, collectively, the Company Shares and the ISL.

“Company Material Contract” means any Contract required to be listed on the
Company Disclosure Letter pursuant to Section 4.10, Section 4.12 or
Section 4.14.

“Company Offerings” means any products or services designed, developed,
manufactured, offered, provided, sold or otherwise distributed by or for the
Group Companies, or any products or service offerings under development that
form the basis, in whole or in part, of any revenue or business projection
provided to Buyer.

“Company-Owned Intellectual Property” means any and all Intellectual Property
that is owned in whole or in part by the Company. Company-Owned Intellectual
Property includes Registered Company Intellectual Property.

 

4

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“Company Shareholder Ancillary Agreements” means each agreement or document
(other than this Agreement) that any Company Shareholder is to enter into as a
party thereto pursuant to this Agreement.

“Company Shares” means the capital shares of the Company that may be outstanding
from time to time, taken together.

“Contract” means any written or oral contract, agreement, instrument,
arrangement, commitment, understanding or undertaking (including leases,
licenses, mortgages, notes, guarantees, sublicenses, subcontracts and purchase
orders).

“Converted Buyer Shares” means any shares of Buyer Common Stock issued by Buyer
pursuant to any conversion or exchange of any Convertible Notes or New
Convertible Notes.

“Convertible Notes” means the convertible promissory notes issued by Buyer
pursuant to the Note Purchase Agreement.

“Copyleft License” means any license that requires, as a condition of use,
modification or distribution of Works of Authorship, that such Works of
Authorship, or other software or other Intellectual Property incorporated into,
derived from, used, or distributed with such Works of Authorship: (i) in the
case of software, be made available or distributed in a form other than binary
(e.g., source code form); (ii) be licensed for the purpose of preparing
derivative works; (iii) be licensed under terms that allow the Company Offerings
or portions thereof or interfaces therefore to be reverse engineered, reverse
assembled or disassembled (other than by operation of law); or (iv) be
redistributable at no license fee. Copyleft licenses include the GNU General
Public License, the GNU Lesser General Public License, the Mozilla Public
License, the Common Development and Distribution License, the Eclipse Public
License, and all Creative Commons “sharealike” licenses.

“Copyleft Materials” means any software or other Intellectual Property subject
to a Copyleft License.

“Copyrights” means copyrights and all other rights with respect to Works of
Authorship and all registrations thereof and applications therefor (including
moral and economic rights, however denominated).

“Cyrus” means Cyrus Capital Partners, L.P., a Delaware limited partnership.

“Damages” means losses, reductions in value, costs, damages, loss of revenue or
profits, Liabilities, interest and expenses (including reasonable and documented
out-of-pocket attorneys’ fees, other professionals’ and experts’ fees, costs of
investigation and court costs).

“Databases” means databases and other compilations and collections of data or
information.

“Debt” means the principal amount of the Group Companies’ outstanding
indebtedness for borrowed money, including any interest accrued thereon, as of
immediately prior to the Closing (as defined by and determined in accordance
with GAAP) after taking into account any payments scheduled to be made pursuant
to the terms of this Agreement on the Closing Date.

“Domain Names” means domain names, uniform resource locators and other names and
locators associated with the Internet.

 

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“Encumbrance” means, with respect to any asset, any mortgage, deed of trust,
lien, pledge, charge, security interest, title retention device, collateral
assignment or transfer, conditional assignment or transfer, adverse claim,
restriction, usufruct or other encumbrance of any kind in respect of such asset
(including any restriction on the voting of any security, any restriction on the
transfer of any security or other asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset, any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset and any co-ownership of another Person). For purposes of
clarification only, neither restrictions on transferability imposed by foreign,
federal or state securities laws nor the grant of a license to Intellectual
Property Rights shall constitute an Encumbrance.

“Environmental Law” means any supranational, international, national (of any
jurisdiction), federal, provincial, state or local statute, law, regulation,
guideline, rule, standard or other legal requirement relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata), including any law or
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.

“Equity Securities” means, with respect to any Person that is a legal entity,
any and all shares of capital stock, membership interests, units, profits
interests, ownership interests, equity interests, registered capital, and other
equity securities of such Person, and any right, warrant, option, call,
commitment, conversion privilege, preemptive right or other right to acquire any
of the foregoing, or security convertible into, exchangeable or exercisable for
any of the foregoing, or any Contract providing for the acquisition of any of
the foregoing.

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

“ERISA Affiliate” means any entity (whether or not incorporated) other than the
Company that, together with the Company, is required to be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.

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

“FBC” means FBC Holdings S.à r.l., a Luxembourg private limited liability
company (société à responsabilité limitée) having its registered office at 46A,
Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, registered
with the Luxembourg Register of Commerce and Companies under number B 142133.

“Fully Diluted Buyer Shares” means the sum, without duplication, of the
aggregate number of shares of Buyer Common Stock that are issued and outstanding
as of the date of this Agreement plus (i) any shares of Buyer Common Stock
issuable in connection with the conversion, exercise or exchange of other Equity
Securities of Buyer issued or issuable upon conversion of any New Convertible
Notes, plus (ii) all Equity Securities of Buyer exercisable or convertible into
shares of Buyer Common Stock at a per share price less than or equal to $1.30,
plus (iii) any Converted Buyer Shares issued upon conversion of Convertible
Notes occurring prior to the Closing Date, plus (iv) any shares of Buyer Common
Stock issued after the date of this Agreement but before the Closing Date at a
per share price of $1.00 or more, but excluding (x) all Equity Securities of
Buyer exercisable or convertible into shares of Buyer Common Stock at a per
share price greater than $1.30, (y) all unvested restricted stock units issued
to employees or consultants of Buyer and its Subsidiaries and (z) any shares
issuable upon conversion of the Convertible Notes and any Converted Buyer Shares
issuable upon conversion thereof (other than any Converted Buyer Shares included
in subsection (iii) above) and “Fully Diluted Buyer Share” means each of them.

 

6

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

“Governmental Authority” means any court or tribunal, governmental,
quasi-governmental or regulatory body, administrative agency or bureau,
commission or authority or other body exercising similar powers or authority,
including any regulatory body, administrative agency or bureau, commission or
authority or other body of the European Union.

“Group Companies” means, collectively, the Company and its Subsidiaries as set
forth in Schedule II attached hereto.

“Intellectual Property” means any and all: (i) technology, formulae, algorithms,
procedures, processes, methods, techniques, know how, ideas, creations,
inventions, discoveries, and improvements (whether patentable or unpatentable
and whether or not reduced to practice); (ii) technical, engineering,
manufacturing, product, marketing, servicing, financial, supplier, personnel and
other information and materials; (iii) customer lists, customer contact and
registration information, customer correspondence and customer purchasing
histories; (iv) specifications, designs, models, devices, prototypes, schematics
and development tools; (v) Works of Authorship; (vi) Databases;
(vii) Trademarks; (viii) Domain Names; (ix) Trade Secrets; (x) tangible
embodiments of any of the foregoing, in any form or media whether or not
specifically listed herein; and (xi) all Intellectual Property Rights related
thereto.

“Intellectual Property Rights” means any and all rights (anywhere in the world,
whether statutory, common law or otherwise) relating to, arising from, or
associated with Intellectual Property, including: (i) Patents; (ii) Copyrights;
(iii) industrial design rights and registrations thereof and applications
therefor; (iv) rights with respect to Trademarks, and all registrations thereof
and applications therefor; (v) rights with respect to Domain Names, including
registrations thereof and applications therefor; (vi) rights with respect to
Trade Secrets, including rights to limit the use or disclosure thereof by any
Person; (vii) rights with respect to Databases, including registrations thereof
and applications therefor; (ix) publicity and privacy rights, including all
rights with respect to use of a Person’s name, signature, likeness, image,
photograph, voice, identity, personality, and biographical and Personal
Information and materials; and (x) any rights equivalent or similar to any of
the foregoing.

“Intervening Event” means a material event or circumstance that was not known to
the board of directors of Buyer prior to the execution of this Agreement (or if
known, the consequences of which were not known or reasonably foreseeable),
which event or circumstance, or any consequence thereof, becomes known to the
board of directors of Buyer after the execution of this Agreement by Buyer and
prior to the receipt of the Buyer Shareholder Approval; provided, however, that
in no event shall the receipt, existence or terms of an Alternative Buyer
Transaction or any matter relating thereto constitute an Intervening Event.

“IRS” means the United States Internal Revenue Service.

“ISL” means an income sharing loan granted by FBC to the Company on October 26,
2009 for a total principal amount of one hundred fifty-five thousand three
hundred ninety Euro and seventy-six cents (EUR 155,390.76), as partly assigned
to TDM on September 7, 2010, as described in Schedule I below.

“Knowledge” or “Known” means, with respect to any Party, the knowledge of a
particular fact, circumstance, event or other matter in question of any of the
Persons identified underneath such Party’s name on Schedule III and of any other
Persons that may, between the date of this Agreement and the Closing Date,
succeed to any of the duties of the aforementioned individuals (collectively,
the “Entity Representatives”). Any such Entity Representative will be deemed to
have knowledge of a particular fact, circumstance, event or other matter if
(i) such Entity Representative has actual knowledge of the

 

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fact, circumstance, event or other matter, (ii) such fact, circumstance, event
or other matter is reflected in one or more documents (whether written or
electronic, including e-mails sent to or by such Entity Representative) in, such
Entity Representative’s actual possession, or (iii) such fact, circumstance,
event or other matter is reflected in one or more documents (whether written or
electronic) contained in books and records of the relevant Person that would
reasonably be expected to be reviewed by a person who has the duties and
responsibilities of such Entity Representative in connection with such Person’s
entering into this Agreement, or (iv) such Entity Representative would
reasonably be expected to have such knowledge in the ordinary and prudent course
of performing their respective duties and roles on behalf of the relevant
Person, including through responses to formal requests for information in
relation to the subject matters set forth in this Agreement with the personnel
that report to them who are responsible for the relevant subject matters.

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

“Licensed Company Intellectual Property” means all of the Company Intellectual
Property that is not Company-Owned Intellectual Property and is licensed to the
Company or any of its Subsidiaries.

“Luxembourg Company Law” means the law dated August 10, 1915 concerning the
commercial companies as amended.

“Material Adverse Change” and “Material Adverse Effect” when used in connection
with an entity means any change, event, circumstance, condition or effect that
(i) is or is reasonably likely to be or become, individually or in the
aggregate, materially adverse to the condition (financial or otherwise),
prospects, assets (including Intellectual Property or other intangible assets),
Liabilities (including those relating to Intellectual Property), business or
results of operations of the Group Companies, taken as a whole or Buyer and its
Subsidiaries, taken as a whole, as the case may be, or (ii) prevents, materially
delays or materially impairs the ability of any Party to carry out their
obligations under this Agreement and to consummate the Acquisition and the
transactions contemplated by this Agreement; provided, however, that none of the
following shall be deemed to constitute or be taken into account in determining
pursuant to clause (i) above whether that has been or will or could be, a
“Material Adverse Effect”: (A) any changes resulting from or arising out of
general market, economic or political conditions (including any changes arising
out of acts of terrorism, or war, weather conditions or other force majeure
events), provided, that such changes do not have a substantially
disproportionate impact on the relevant Party, (B) any changes resulting from or
arising out of general market, economic or political conditions in the
industries in which the relevant Party conducts business (including any changes
arising out of acts of terrorism, or war, weather conditions or other force
majeure events), provided, that such changes do not have a substantially
disproportionate impact on the relevant Party, (C) any changes resulting from or
arising out of actions taken pursuant to (and required by) this Agreement or at
the request of the other Parties to this Agreement or the failure to take any
actions due to restrictions set forth in this Agreement, (D) any changes in the
price or trading volume of Buyer Common Stock, in and of itself, provided, that
such exclusion shall not apply to any underlying fact, event or circumstance
that may have caused or contributed to such change in market price or trading
volume, (E) any failure of the Buyer Common Stock to be listed on The Nasdaq
Capital Market, including as a result of or pursuant to the notice of deficiency
received by Buyer from Nasdaq on January 2, 2013 and (F) any failure by the
Company or Buyer to meet published revenue or earnings projections, in and of
itself, provided, that such exclusion shall not apply to any underlying fact,
event or circumstance that may have caused or contributed to such failure to
meet published revenue or earnings projections.

 

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“Materials of Environmental Concern” include chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products and any
other substance that is currently regulated by an Environmental Law or that is
otherwise a danger to health, reproduction or the environment.

“New Convertible Notes” means the convertible promissory notes having an
aggregate principal amount of $7,000,000 issued or issuable by Buyer pursuant to
the New Note Purchase Agreement (whether or not such notes are ultimately
issued).

“New Note Purchase Agreement” means the amended and restated note purchase
agreement dated November 1, 2013 amending and restating the Note Purchase
Agreement, to be entered into by and among Buyer and Cyrus or its Affiliates and
the other purchasers party thereto before the Closing Date, as amended from time
to time.

“Note Purchase Agreement” means that certain note purchase agreement dated as of
February 12, 2013 by and among Buyer and the purchasers party thereto, as
amended by that certain amendment to the note purchase agreement dated March 5,
2013.

“Open Source License” means any license meeting the Open Source Definition (as
promulgated by the Open Source Initiative) or the Free Software Definition (as
promulgated by the Free Software Foundation), or any substantially similar
license, including but not limited to any license approved by the Open Source
Initiative, and any Creative Commons License. For avoidance of doubt, Open
Source Licenses include Copyleft Licenses.

“Open Source Materials” means any software or other Intellectual Property
subject to an Open Source License.

“Ordinary Course of Business” means a course of business that is (i) in the
ordinary course of the Group Companies’ or the Buyer Group’s business and
consistent with its past practices, as applicable (ii) is consistent with the
Buyer’s or the Company’s (or other Group Company’s, as applicable) business plan
(including the capital investment and business expansion components thereof), as
applicable, previously provided to Buyer or the Company Shareholders, as
applicable, and (iii) consistent with prudent business practices for an entity
that is of a similar size and in a similar industry.

“Patents” means patents and patent applications, utility models and applications
for utility models, inventor’s certificates and applications for inventor’s
certificates, and invention disclosure statements.

“Permitted Encumbrances” means (i) statutory liens for Taxes that are not yet
due and payable; (ii) statutory liens to secure obligations to landlords,
lessors or renters under leases or rental agreements; (iii) deposits or pledges
made in connection with, or to secure payment of, workers’ compensation,
unemployment insurance or similar programs mandated by Applicable Law;
(iv) statutory liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens; (v) any minor imperfection of title or similar liens, charges or
encumbrances which individually or in the aggregate with other such liens,
charges and encumbrances does not impair the value of the property subject to
such lien, charge or encumbrance or the use of such property in the conduct of
the Company Business; and (vi) any liens or Encumbrances which are to be, and
will be, released at the Closing without the payment of any consideration by
Buyer and/or any of the Group Companies.

“Person” means any individual, corporation, company, limited liability company,
partnership, limited liability partnership, trust, estate, proprietorship, joint
venture, association, organization, entity or Governmental Authority.

 

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“Personal Information” means information from or about an individual person the
use, aggregation, holding or management of which is restricted under any
Applicable Law, including, but not limited to, an individual person’s:
(a) personally identifiable information (e.g., name, address, telephone number,
email address, financial account number, government-issued identifier, and any
other data used or intended to be used to identify, contact or precisely locate
a person); and (b) Internet Protocol address or other persistent identifier.

“Prohibited Person” means any Person that is (a) a national or resident of any
U.S. embargoed or restricted country, (b) included on, or Affiliated with any
Person on, the United States Commerce Department’s Denied Parties List, Entities
and Unverified Lists; the U.S. Department of Treasury’s Specially Designated
Nationals, Specially Designated Narcotics Traffickers or Specially Designated
Terrorists, or the Annex to Executive Order No. 13224; the Department of State’s
Debarred List; UN Sanctions, (c) a member of any PRC military organization, or
(d) a Person with whom business transactions, including exports and re-exports,
are restricted by a U.S. Governmental Authority, including, in each clause
above, any updates or revisions to the foregoing and any newly published rules.

“Public Official” means any executive, official, or employee of a Governmental
Authority, political party or member of a political party, political candidate;
executive, employee or officer of a public international organization; or
director, officer or employee or agent of a wholly owned or partially
state-owned or controlled enterprise.

“Registered Company Intellectual Property” means: (i) all Patents, registered
Trademarks, applications to register Trademarks (including intent-to-use
applications), registered Copyrights, applications to register Copyrights, and
all Domain Names included in the Company-Owned Intellectual Property that are
registered, recorded or filed by, for, or under authorization from (or in the
name of) the Company; and (ii) any other applications, registrations, recordings
and filings by the Company (or otherwise authorized by or in the name of the
Company) with respect to any Company-Owned Intellectual Property.

“Registration Rights Agreement” means a registration rights agreement in
substantially the form attached hereto as Exhibit A to be entered into by Buyer
and the Company Shareholders in respect of the Acquisition Shares.

“SEC” means the Securities and Exchange Commission.

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

“Subsidiary” means with respect to any Person, any corporation, association,
business entity, partnership, limited liability company or other Person of which
such Person, either alone or together with one or more Subsidiaries or by one or
more other Subsidiaries (i) directly or indirectly owns or controls securities
or other interests representing at least fifty percent (50%) of the voting power
of such Person, or (ii) is entitled, by Contract or otherwise, to elect, appoint
or designate directors or other members constituting a majority of the members
of such Person’s board of directors, board of managers or other governing body.

“Superior Proposal” means a written Alternative Buyer Transaction that the board
of directors of Buyer has determined, after consultation with its outside legal
counsel and financial advisor, in its good faith judgment, taking into account
the conditionality, expected timing and likelihood of consummation of the
proposal and all other factors the board of directors of Buyer determines in
good faith to be relevant, (i) is reasonably likely to be consummated and
(ii) if consummated, would result in a transaction more favorable to Buyer’s
shareholders from a financial point of view than the transactions contemplated
by this Agreement.

 

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“Tax” (and, with correlative meaning, “Taxes”) means (i) any federal, state,
local or foreign net income, alternative or add-on minimum, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental, estimated or windfall profit tax, custom duty, national
insurance tax, health tax or other tax or other like assessment or charge of any
kind whatsoever, including social security contributions, in each case together
with any interest or any penalty, addition to tax or additional amount imposed
by any Governmental Authority responsible for the imposition of any such tax
(domestic or foreign), whether disputed or not, (ii) any Liability for the
payment of any amounts of the type described in clause (i) of this sentence as a
result of being a member of an affiliated, consolidated, combined, unitary or
aggregate group for any Tax period, and (iii) any Liability for the payment of
any amounts of the type described in clause (i) or (ii) of this sentence as a
result of being a transferee of or successor to any Person or as a result of any
express or implied obligation to indemnify any other Person, by Contract or
otherwise. Taxes include any taxes within the meaning of Section 3 of the German
Tax Code.

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

“Tax Ruling” means the letter from the Luxembourg tax authorities issued on the
establishment of the Company.

“TD Germany” means Tandberg Data GmbH with its legal seat in Dortmund, Germany,
registered with the commercial register of local court of Dortmund, Germany,
under HRB 5589.

“TDM” means Tandberg Data Management S.à r.l., a Luxembourg private limited
liability company (société à responsabilité limitée) having its registered
office at L-1855 Luxembourg, 46A, avenue J.F. Kennedy, registered with the
Luxembourg Register of Commerce and Companies under number B 151.395.

“Trade Secrets” means information and materials not generally known to the
public, including trade secrets and other confidential and proprietary
information.

“Trademarks” means trademarks, service marks, logos and design marks, trade
dress, trade names, fictitious and other business names, brand names, together
with all goodwill associated with any of the foregoing.

“Transaction Fees” means all out-of-pocket costs and expenses of the Group
Companies , any employee of any Group Company or any Company Shareholder
incurred by, paid by, or to be paid by, any Group Company in connection with the
Acquisition and this Agreement (and the related term sheet and the related
discussions and negotiations between the Parties with respect thereto) and the
transactions contemplated hereby, including, any fees and expenses of investment
bankers, financial advisors, legal counsel, accountants or other professional
advisors.

“Transfer Pricing Policy” means the transfer pricing policy applicable to the
Group Companies disclosed by the Company to the Buyer prior to the date of this
Agreement.

“Treasury Regulations” means the United States Treasury Regulations promulgated
under the Code.

“Unpaid Transaction Fees” means any Transaction Fees, or portions thereof, that
are not paid in full prior to the Closing.

 

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

“Voting Agreement” means a voting rights agreement in substantially the form
attached hereto as Exhibit B to be entered into by Buyer and the Company
Shareholders in respect of the Acquisition Shares.

“Works of Authorship” means software (whether in source code, object code form,
including user interfaces, command structures, menus, buttons and icons,
flow-charts, and related documentation), websites, content, images, graphics,
text, photographs, artwork, audiovisual works, sound recordings, graphs,
drawings, reports, analyses, writings, and other works of authorship and
copyrightable subject matter.

Other capitalized terms defined elsewhere in this Agreement and not defined in
this Article 1 shall have the meanings assigned to such terms in this Agreement
in the sections referenced below:

 

Defined Term

  

Section

10-K

  

6.6

401(k) Plan

  

7.11

Acquisition Shares

  

2.2(a)

Acquisition Subsidiary

  

2.1(b)

Agreement

  

Preamble

Agreement Date

  

Preamble

Articles of Incorporation

  

6.3

Board

  

4.3(a)

Board Approval

  

4.3(d)

Buyer

  

Preamble

Buyer Disclosure Letter

  

Article 6

Buyer Representatives

  

8.3(a)

Company

  

Preamble

Company Benefit Arrangement

  

4.16(h)

Company Certificates

  

2.4(b)(iii)

Company Disclosure Letter

  

Article 4

Company Intellectual Property Contracts

  

4.14(e)

Company Representative

  

4.22(a)

Company Shareholders

  

Preamble

Compliance Laws

  

4.22(a)

Consulting Agreement

  

Recitals

Consideration

  

2.2(a)

Employment Agreement

  

Recitals

Evaluation Date

  

6.24

Export Approvals

  

4.23(a)

FCPA

  

4.22(a)

Governmental Permits

  

4.15(c)

Inbound Intellectual Property Contracts

  

4.14(e)

Leased Real Property

  

4.10(a)

Leases

  

4.10(a)

Non-Solicitation Agreement

  

Recitals

Outbound Intellectual Property Contracts

  

4.14(e)

Owned Real Property

  

4.10(a)

Party

  

Preamble

 

12

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Defined Term

  

Section

Payee

  

2.5

Real Property

  

4.10(a)

Rights Plan

  

6.3

Significant Customer

  

4.20(b)

Significant Supplier

  

4.20(c)

SEC Filings

  

6.6

Systems

  

4.14(p)

Takeover Proposal

  

8.3(b)

TD Corp

  

7.10

ARTICLE 2

THE ACQUISITION

2.1        Purchase and Sale of Company Interests.

(a)        Subject to the terms and conditions set forth herein, at the Closing
and effective as of the Closing Date, the Company Shareholders shall sell to
Buyer, and Buyer shall purchase from the Company Shareholders, the Company
Interests, free and clear of all Encumbrances, for the consideration specified
in Section 2.2(a).

(b)        Prior to the Closing, Buyer shall form a wholly-owned subsidiary of
Buyer incorporated under the laws of the Grand Duchy of Luxembourg (“Acquisition
Subsidiary”), and Buyer shall assign its right to acquire and receive the
Company Shares from the Company Shareholders pursuant to this Agreement to
Acquisition Subsidiary. Following the formation of Acquisition Subsidiary, any
obligation of Buyer to the Company or the Company Shareholders under this
Agreement which is performed, satisfied or fulfilled by Acquisition Subsidiary
(which, for the avoidance of doubt, shall not include the obligation to issue
the Acquisition Shares pursuant to Section 2.1(a) at the Closing), shall be
deemed to have been performed, satisfied or fulfilled in all respects by Buyer.

2.2        Purchase Price.

(a)        The aggregate consideration payable by Buyer to the Company
Shareholders (the “Consideration”) in respect of the Company Interests shall
consist of one (1) share of fully paid and nonassessable Buyer Common Stock for
each Fully Diluted Buyer Share (the “Acquisition Shares”).

(b)        The issuance of the Acquisition Shares to the Company Shareholders
pursuant to Section 2.2(a) shall be made in accordance with an allocation to be
provided by the Company Shareholders to Buyer five (5) Business Days prior to
the Closing Date.

(c)        Adjustments. In the event of any share split, reverse share split,
share dividend (including any dividend or distribution of securities convertible
into capital shares), reorganization, reclassification, combination,
recapitalization or other like change with respect to the Company Shares or the
shares of Buyer Common Stock occurring after the date of this Agreement and
prior to the Closing, all references in this Agreement to specified numbers of
shares of any class or series affected thereby, and all calculations provided
for that are based upon numbers of shares of any class or series (or trading or
other prices therefor or relating thereto) affected thereby, shall be equitably
adjusted to the extent necessary to provide the Parties the same economic effect
as contemplated by this Agreement prior to such share split, reverse share
split, share dividend, reorganization, reclassification, combination,
recapitalization or other

 

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like change. Unless indicated otherwise, all mathematical calculations
contemplated by this Agreement shall be made to the fifth decimal place.

(d)        No Fractional Shares. Notwithstanding any other provision of this
Agreement, no certificates for fractional shares of Buyer Common Stock shall be
issued in the Acquisition. Each holder of Company Shares who otherwise would
have been entitled to a fraction of a share of Buyer Common Stock shall receive
in lieu thereof cash (without interest) in an amount determined by multiplying
the fractional share interest to which such holder would otherwise be entitled
(after taking into account all Company Shares owned by such holder at the
Closing) by the closing market price of the Buyer Common Stock on the date that
is three (3) Business Days prior to the Closing Date. No such holder shall be
entitled to any dividends, voting rights or any other rights in respect of any
fractional share.

(e)        Transfer Formalities. Buyer and the Company Shareholders instruct and
authorise the Company to register at the Closing, in the name and on behalf of
Buyer, the transfer of the Company Shares in the shareholders’ register of the
Company and to file as soon as practicable a notice with the Luxembourg Register
of Commerce and Companies in respect of the transfer of the Company Shares from
the Company Shareholders to Buyer. The Company Shareholders, Buyer and the
Company hereby jointly empower and authorise any manager of the Company, acting
individually, to (i) proceed, at the Closing, with the entry of the transfer of
the Company Shares in accordance with this Agreement in the shareholders’
register of the Company and to sign the shareholders’ register of the Company in
accordance with article 185 of the Luxembourg Company Law, (ii) file a Company
Shares transfer notice with the Luxembourg Register of Commerce and Companies
and (iii) perform any operation or act which might be necessary or useful for
the performance and the execution of this Agreement, in particular the Company
Shares and ISL transfer formalities.

2.3        Closing. Subject to the earlier termination of this Agreement
pursuant to Article 10, the Closing shall take place at the offices of
O’Melveny & Myers LLP, 2765 Sand Hill Road, Menlo Park, California 94025, at
10:00 a.m. local time on the Closing Date, provided, however, that to the extent
possible pursuant to Applicable Law, the Closing may take place by exchange of
executed documents by facsimile or email transmission.

2.4        Transactions to be Effected at the Closing.

(a)         At the Closing Buyer shall:

(i)         deliver to the Company and the Company Shareholders a duly executed
counterpart of this Agreement and each of the Buyer Ancillary Agreements to
which Buyer is a party;

(ii)         deliver to the Company and FBC all other agreements, documents,
instruments or certificates and other items required to be delivered by Buyer at
or prior to the Closing;

(iii)         provide the Company Shareholders with duly executed shareholders’
resolutions (i) accepting the resignation of the current managers of the Company
and (ii) appointing as of the Closing, new managers of the Company;

(iv)         provide the evidence that following the transfer of the Company
Shares to Buyer, the registered office of the Company will be transferred and
the domiciliation agreement be terminated, or as the case may be, provide
evidence that transfer of the Company Shares to Buyer and related change of
control of the Company has been accepted by the trust company with which the
Company has its office registered and the domiciliation agreement continued; and

(v)         issue the Acquisition Shares to FBC pursuant to Section 2.2(a).

 

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(b)         At the Closing the Company and each Company Shareholder shall:

(i)         deliver to Buyer a duly executed counterpart of this Agreement and
each of the Company Ancillary Agreements or Company Shareholder Ancillary
Agreements to which the Company or such Company Shareholder is a party;

(ii)         deliver to Buyer all other agreements, documents, instruments or
certificates and other items required to be delivered by the Company or such
Company Shareholder, or any of their respective Affiliates, at or prior to the
Closing;

(iii)         surrender its share certificate or certificates (if any) which as
of the Closing represented the Company Shares (the “Company Certificates”);
provided, that in the event any Company Certificate shall have been lost, stolen
or destroyed, the owner of such lost, stolen or destroyed Company Certificate
shall provide to Buyer an indemnity agreement or bond against any claim that may
be made against Buyer with respect to the Company Certificate alleged to have
been lost, stolen or destroyed;

(iv)         deliver to Buyer a certified true copy of the resolutions of the
Company Shareholders approving the Acquisition in accordance with and pursuant
to this Agreement and the Buyer as the new shareholder of the Company for the
purpose of article 189 of the Luxembourg Company Law;

(v)         deliver to Buyer a certified true copy of the duly updated
shareholders’ register of the Company evidencing the registration of the
transfer of the Company Shares from the Company Shareholders to Buyer, along
with all other corporate books and records and registers (complete and duly
written up-to-date) of the Company;

(vi)         deliver to Buyer transfer forms for all of the Company Shares duly
executed in favour of Buyer as transferee, free and clear of all Encumbrances,
duly executed by the registered holders as transferors; and

(vii)         written evidence of due corporate action taken to effect the
termination of each 401(k) Plan sponsored or maintained by TD Corp, effective as
of no later than one day prior to Closing (but such termination may be
contingent upon the Closing).

2.5        Tax Withholding. Buyer shall be entitled to deduct and withhold, or
cause to be deducted and withheld, from the Consideration or any other payment
otherwise payable pursuant to this Agreement, to each Company Shareholder (each,
the “Payee”), the amounts required to be deducted and withheld under the Code,
or any provision of state, local or foreign Tax law, with respect to the making
of such payment and, to the extent that amounts are so deducted and withheld,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the Payee in respect of whom such deduction and withholding was made.
The Parties agree to cooperate to allow Buyer, at its election, to effectuate
such withholding by means acceptable to Buyer, including by paying the
applicable portion of the Consideration for which such withholding is required
to the Company or any of its Subsidiaries and causing the Company or such
Subsidiary to withhold the applicable amounts through the Company’s or such
Subsidiary’s payroll system. If any deduction or withholding is required as
contemplated by this Section 2.5, then the Parties shall take all reasonable
steps to reduce the rate of withholding Tax as provided under relevant Tax law
and practice. The Parties shall cooperate reasonably in completing and filing
documents required under the provisions of any Applicable Law in connection with
reducing the rate of withholding Tax due under the laws of the relevant
territory or relevant double tax treaties, or in connection with any claim to a
refund of, or credit for, any required deduction or withholding.

 

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2.6        Further Assurances. If, at any time before or after the Closing, any
of the Parties hereto reasonably believes or is advised that any further
instruments, deeds, assignments or assurances are reasonably necessary to
consummate the Acquisition or to carry out the purposes and intent of this
Agreement at or after the Closing, then the Company, Buyer, the Company
Shareholders and their respective officers and directors shall execute and
deliver all such proper deeds, assignments, instruments (including not limited
to a notice of the transfer of the Company Shares with the Luxembourg Register
of Commerce and Companies, in order to make the transfer of the Company Shares
enforceable vis-à-vis third parties) and assurances and do all other things
(including but not limited to the publication of the aforementioned notice of
transfer in the Luxembourg official gazette, in accordance with applicable
provisions of the Luxembourg Company Law) reasonably necessary to consummate the
Acquisition and to carry out the purposes and intent of this Agreement.

ARTICLE 3

[RESERVED]

ARTICLE 4

REPRESENTATIONS AND WARRANTIES CONCERNING THE GROUP COMPANIES

Subject to the exceptions set forth in a numbered or lettered section of the
disclosure letter of the Company addressed to Buyer, dated as of the Agreement
Date and delivered to Buyer concurrently with the Parties’ execution of this
Agreement (the “Company Disclosure Letter”) specifically referencing a
representation or warranty herein, the Company represents and warrants to Buyer
that the statements contained in this Article 4 (each of which exceptions and
disclosures set forth in any section or subsection of the Company Disclosure
Letter will apply to any other section or subsection of the Company Disclosure
Letter to the extent the relevance to such other section or subsection is
reasonably apparent from a reading of the text of such disclosure to a reader
unfamiliar with the Company Business) are true and correct on and as of the
Agreement Date and shall be true and correct as of immediately prior to the
Closing. For purposes of this Agreement, a document shall be deemed to have been
“made available” by the Company to Buyer only if it has been posted in the
electronic data site at https://oursite.reedsmith.com in connection with the
Acquisition.

4.1        Organization and Good Standing. All Group Companies, their respective
jurisdictions of incorporation and their respective legal form are identified in
Schedule II. Each Group Company is duly incorporated or organized, validly
existing, and in good standing under the laws of the jurisdiction where such
Group Company is incorporated or organized. Each Group Company has all power and
authority to own, operate and lease its properties and to carry on its business
as currently conducted and proposed to be conducted. Each Group Company is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified, licensed and in
good standing would not result, or reasonably be expected to result, in a
Material Adverse Effect on the Company. The Company has made available to Buyer
true and complete copies of the currently effective Charter Document of each
Group Company, each, as amended to date. The minute books (containing the
records of meetings of the shareholders, the board of directors or other
governing body and any committee thereof), the stock certificate books, and the
stock record books, to the extent kept, of each Group Company are correct and
complete. No Group Company is in default under or in violation of any provision
of its Charter Documents. Schedule 4.1(a) contains a true and complete list of
each jurisdiction where the Group Companies are organized and qualified to do
business. Schedule 4.1(b) lists the managers, directors and officers of each
Group Company. Schedule 4.1(c) contains a true and correct copy, as of
October 17, 2013, of an excerpt from the commercial register
(Handelsregisterauszug) of TD Germany. No registrations or applications for
registration in such register

 

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are pending and there are no matters which are not registered therein, but with
respect to which a registration would be required under Applicable Law.

4.2        Subsidiaries. Except as set forth on Schedule II, no Group Company
has any Subsidiaries, and no Group Company owns or controls, directly or
indirectly, any equity or similar interest in, or any interest convertible into
or exchangeable or exercisable for any equity or similar interest in, or have
any commitment or obligation to invest in, purchase any securities or
obligations of, fund, guarantee, contribute or maintain the capital of or
otherwise financially support any corporation, partnership, limited liability
company, trust, joint venture or other business association or entity. Each
Subsidiary is, directly or indirectly, wholly owned by the Company. Any former
Subsidiary of any Group Company that is no longer in existence has been duly
dissolved in accordance with its charter documents and the laws of the
jurisdiction of its incorporation or organization and there are no outstanding
Liabilities, including Taxes, with respect to any such entity for which any
Group Company is responsible. TD Germany is not a party to any enterprise
agreement (Unternehmensvertrag) within the meaning of Sections 291 et seq. of
the German Stock Corporation Act (AktG), nor is TD Germany obliged to enter into
any such agreement. No bankruptcy, insolvency, liquidation or similar
proceedings (whether mandatory or voluntary) are pending and no filing for such
proceeding has been made or is required, with respect to TD Germany. TD Germany
has not stopped or suspended payment of its debts, become unable to pay its
debts or otherwise become insolvent. TD Germany is not over-indebted
(überschuldet). No assets of TD Germany have been seized or confiscated by or on
behalf of any third party nor are any foreclosure, forfeiture, execution or
enforcement proceedings pending or threatened with respect to TD Germany or its
assets. To the Knowledge of the Company, there are no facts or events which may
reasonably be expected to result in any such proceedings or other events as
referred to in this Section 4.2.

4.3        Power, Authorization and Validity.

(a)        Power and Authority. The Company has the capacity as well as all
requisite corporate power and corporate authority to enter into, execute,
deliver and perform its obligations under this Agreement and each of the Company
Ancillary Agreements and to consummate the Acquisition, subject to the approval
of the Company Shareholders. The Acquisition and the execution, delivery and
performance by the Company of this Agreement, each of the Company Ancillary
Agreements and all other agreements, transactions and actions contemplated
hereby or thereby, have been duly and validly approved and authorized by the
Company’s managers (the “Board”).

(b)        No Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to any (i) Governmental
Authority or (ii) any other Person is necessary or required to be made or
obtained by the Company to enable the Company to lawfully execute and deliver,
enter into, and perform its obligations under this Agreement and each of the
Company Ancillary Agreements or to consummate the Acquisition (including the
consent of or notice to any Person required pursuant to the terms of such
Contract to be obtained or given in order to keep any Contract between such
Person and the Company in effect following the Acquisition or to provide that
the Company is not in breach or violation of any such Contract following the
Acquisition, in each case, as a result of failure to obtain such consent or
provide such notice), except for filings required to be made pursuant to the
provisions of the Luxembourg Company Law.

(c)        Enforceability. This Agreement has been duly executed and delivered
by the Company. This Agreement and each of the Company Ancillary Agreements are,
or when executed by the Company will be, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, subject to the effect of (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to rights of creditors

 

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generally and (ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.

(d)        Board Approval. The Board has, at a meeting duly called and held, by
a unanimous vote of those directors voting on such matters, or by a unanimous
written consent in lieu thereof: (i) approved and declared advisable this
Agreement; (ii) determined that the Acquisition and other transactions
contemplated by this Agreement are advisable, fair to, and in the best interests
of the Company; (iii) resolved to recommend to the Company Shareholder’s the
approval of this Agreement and the Acquisition; and (iv) directed that this
Agreement be submitted to the Company Shareholders for their adoption
(collectively, the “Board Approval”). No takeover statute or similar statute or
regulation of any jurisdiction applies or purports to apply to the Acquisition.

(e)        Required Vote of Company Shareholders. The affirmative vote or
consent of the Company Shareholders (the “Shareholder Approval”) are the only
votes or consents of the holders of any class or series of Company Shares
necessary to adopt this Agreement. Such votes and consents have been obtained in
a manner fully in accordance with Applicable Law. Other than the Shareholder
Approval, no other votes or consents of any Company Shareholder, holder of any
Debt or holder of any other Equity Securities of the Company or any of its
Subsidiaries is required to adopt or approve this Agreement and the transactions
contemplated hereby.

4.4        Capitalization. As of the date of this Agreement, the entire
subscribed share capital of the Company consists of twelve thousand five hundred
(12,500) Company Shares. As of the date of this Agreement, there are 12,500
Company Shares issued and outstanding and no Company Shares that are authorized
but not issued. All of the issued and outstanding Company Shares have been duly
authorized, are validly issued and fully paid in compliance with all the
requirements of Applicable Law and all requirements set forth in applicable
organizational documents and as of the date of this Agreement are held
beneficially and of record by the respective Company Shareholders as set forth
in Schedule 4.4 of the Company Disclosure Letter. Schedule 4.4 of the Company
Disclosure Letter contains a true, correct and complete description of the share
capital and the Equity Securities issued by each of the Subsidiaries. The Equity
Securities of the Subsidiaries are held as indicated in Schedule 4.4 of the
Company Disclosure Letter, free and clear of any Encumbrances. All of the issued
and outstanding Equity Securities of each other Group Company have been duly
authorized, are validly issued, fully paid not been repaid, neither in whole nor
in part, and nonassessable, in compliance with all the requirements of
Applicable Law and all requirements. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other Contracts or commitments that could require any Group
Company to issue, sell, or otherwise cause to become outstanding any of its
Equity Securities. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to any Group
Company. No Group Company is a party to and there is not, and immediately after
the Closing there will not be, any Contract, right of first refusal, right of
first offer, proxy, voting agreement, voting trust or agreement,
sub-participation agreement, registration rights agreement or shareholders
agreement, whether or not such Group Company is a party thereto, with respect to
the purchase, sale, creating of Encumbrances or voting or other shareholder
rights of or in respect of any Equity Securities of any Group Company. No Group
Company holds any treasury shares. There are no unvested shares of capital stock
of the Company or shares of capital stock of the Company that are subject to a
repurchase right of the Company. There is no Liability for dividends accrued and
unpaid by the Company. Each Company Shareholder is ultimately solely controlled
by U.S. persons within the meaning of the CFIUS Regulations.

4.5        No Conflict. Neither the execution and delivery of this Agreement or
any of the Company Ancillary Agreements by the Company, nor the consummation of
the Acquisition or any other transaction contemplated hereby or thereby, shall
conflict with, result in a termination, breach,

 

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impairment or violation of (with or without notice or lapse of time, or both),
or constitute a default, or require the consent, release, waiver or approval of,
or notice to, any third party, under: (i) any provision of the Charter Document
of any Group Company, each as currently in effect; (ii) any Applicable Law
applicable to any Group Company or any of its assets or properties; or (iii) any
Company Material Contract. Neither the Company’s entering into this Agreement
nor the consummation of the Acquisition shall change the obligations or rights
of the Company as they exist at the Closing and without giving effect to any
action taken by Buyer after the Closing to make payments to or receive payments
from any customer or supplier of the Company.

4.6        Litigation. There is no Action pending against any Group Company (and
there is no Action pending against any officer, director, employee or agent of
any Group Company in their capacity as such or relating to their employment,
services or relationship with such Group Company) before any Governmental
Authority, arbitrator or mediator, nor, to the Knowledge of the Company, has any
such Action been threatened. There is no judgment, decree, injunction, rule or
order of any Governmental Authority, arbitrator or mediator outstanding against
any Group Company. To the Knowledge of the Company, there is no reasonable basis
for any person to assert a claim against any Group Company based upon the
Company’s entering into this Agreement or any Company Ancillary Agreement or
consummating the Acquisition or any of the transactions contemplated by this
Agreement or any Company Ancillary Agreement. No Group Company has an Action
pending against any Governmental Authority or other Person.

4.7        Taxes.

(a)        Tax Returns and Audits.

(i)         Each Group Company (A) has properly completed and timely filed all
Tax Returns required to be filed by it, and all such Tax Returns are true,
correct and complete in all material respects, (B) has timely paid all Taxes
required to be paid by it for which payment was due (whether or not shown on any
Tax Returns), (C) in accordance with generally accepted accounting practice, has
established an adequate accrual or reserve for the payment of all Taxes expect
to be payable in respect of the periods or portions thereof prior to the Balance
Sheet Date (which accrual or reserve as of the Balance Sheet Date is fully
reflected on the face of the Company Balance Sheet (rather than in any notes
thereto) and will establish an adequate accrual or reserve for the payment of
all Taxes payable in respect of the periods or portion thereof through the
Closing Date, (D) has made (or will make on a timely basis) in all material
respects all estimated Tax payments required to be made, (E) has no Liability
for Taxes in excess of the amount so paid or accruals or reserves so
established, and (F) since the Balance Sheet Date has not incurred any material
Liability for Taxes outside the Ordinary Course of Business or otherwise
inconsistent with past custom and practice other than as a result of the
transactions contemplated by this Agreement. The Company has made available to
Buyer correct and complete copies of all federal income and other material Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by any Group Company filed or received for all taxable years remaining
open under the applicable statute of limitations.

(ii)         None of the Group Companies is materially delinquent in the payment
of any Tax or in the filing of any Returns, no material deficiencies for any Tax
have been threatened, claimed, proposed or assessed against any Group Company or
any of its officers, employees or agents in their capacity as such, where such
threat, claim, proposal or assessment remains outstanding.

(iii)         Within the three years prior to Closing, no Group Company has
received from the IRS or any other Governmental Authority (including any sales
or use Tax authority) any written and outstanding (i) notice indicating an
intent to open an audit or other review, (ii) request for information related to
Tax matters, or (iii) notice of deficiency or proposed adjustment of or any
amount of Tax

 

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proposed, asserted, or assessed by any Governmental Authority against any Group
Company. No Tax Return of any Group Company is under audit by the IRS or any
other Governmental Authority and any such past audits (if any) have been
completed and fully resolved to the satisfaction of the applicable Governmental
Authority conducting such audit and all Taxes determined by such audit to be due
from such Group Company have been paid in full to the applicable Governmental
Authorities or adequate reserves therefor have been established and are
reflected on the face of the Company Balance Sheet (rather than in any notes
thereto). To the Knowledge of the Company, no claim has ever been made by a
Governmental Authority in a jurisdiction where any Group Company does not file
Tax Returns that such Group Company is or may be required to file any such Tax
Returns in that jurisdiction.

(iv)         No material Tax liens are currently in effect against any of the
assets of any Group Company other than liens for Taxes not yet due and payable.
There is not in effect any waiver by any Group Company of any statute of
limitations with respect to any Taxes nor has any Group Company agreed to any
extension of time for filing any Tax Return that has not been filed. No Group
Company has consented to extend the period in which any Tax may be assessed or
collected by any Tax agency or authority which extension is still in effect.

(v)         Each Group Company has in its possession official foreign government
receipts for any Taxes paid by it to any foreign Governmental Authorities.

(vi)         Except as set forth on Schedule 4.7(a) of the Company Disclosure
Letter, no consideration payable pursuant to this Agreement is subject to
withholding in any jurisdiction.

(vii)         No Group Company will be required to include any item of income
in, or exclude any item of deduction from, taxable income for any Tax period (or
portion thereof) ending after the Closing Date as a result of: (A) the
application of Section 481 or Section 263A of the Code (or any corresponding or
similar provisions of state, local or foreign Tax laws) to transactions, events
or accounting methods employed prior to the Closing, (B) any “closing
agreement,” as described in Section 7121 of the Code (or any corresponding or
similar provision of state, local or foreign Tax law) executed on or prior to
the Closing Date, (C) any “intercompany transaction” or any “excess loss
account” (within the meaning of Treasury Regulations Sections 1.1502-13 and
1502-19, respectively) (or any corresponding or similar provisions of state,
local or foreign Tax law); (D) any installment sale, open transaction or other
transaction made on or prior to the Closing Date, or (E) any prepaid amount
received on or prior to the Closing Date.

(b)        Withholding. Each Group Company has materially complied with all
Applicable Law relating to the payment and withholding of Taxes (including
withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code
or any corresponding or similar provisions of state, local or foreign Tax law),
and has, substantially within the time and in the manner prescribed by
Applicable Law, withheld from employee wages and paid over to the proper
Governmental Authorities all amounts required to be so withheld and paid over
under all Applicable Law (including the Federal Insurance Contribution Act,
Medicare, Federal Unemployment Tax Act and relevant state income and employment
Tax withholding laws), including federal, state, local and foreign Taxes, and
has timely filed or provided all withholding Tax Returns in accordance with
Applicable Law.

(c)        Special Tax Status.

(i)         No Group Company is a party to or bound by any Tax sharing,
indemnity, or allocation Contract (other than with another Group Company), and
no Group Company has any Liability to another party (other than with another
Group Company) under any such Contract.

 

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(ii)         No Group Company is now, or has ever been, a member of a
consolidated, combined, unitary or aggregate group of which the Company was not
the ultimate parent corporation. No Group Company has any Liability for the
Taxes of any Person (other than another Group Company) under Treasury
Regulations Section 1.1502-6 (or any corresponding or similar provision of
state, local or foreign Tax law), as a transferee or successor, by Contract or
otherwise.

(iii)         Within the three years prior to Closing, the Company has not
constituted either a “distributing corporation” or a “controlled corporation” in
a distribution of stock intended to qualify for tax-free treatment under
Section 355 of the Code.

(iv)         Each Group Company is, and has been at all times within the past
two (2) years, in compliance with the Transfer Pricing Policy in all material
respects.

(v)         Each Group Company is in compliance with all terms and conditions of
any Tax exemptions expressly granted by the IRS or any other Governmental
Authority, and to the Knowledge of the Company the consummation of the
Acquisition shall not have any adverse effect on the continued validity and
effectiveness of any such Tax exemptions.

(vi)         No Group Company has a permanent establishment (within the meaning
of an applicable Tax treaty) in any country other than the country in which it
is incorporated. No Group Company operates or conducts business through any
branch in any country other the country in which it is incorporated.

(vii)         No Group Company has ever requested or received a material ruling
from any Tax authority (other than the Tax Ruling) or signed a closing or other
agreement with any Tax authority.

(viii)         To the Knowledge of the Company, there is no limitation on the
utilization by any Group Company of its net operating losses, built-in losses,
Tax credits or similar items under Sections 382, 383 or 384 of the Code or
comparable provisions of foreign, state or local law (other than any such
limitation arising as a result of the consummation of the transactions
contemplated by this Agreement).

(d)        Nonqualified Deferred Compensation.

(i)         Except as set forth in Schedule 4.7(d) of the Company Disclosure
Letter, the Company is not a party to any contract, agreement or arrangement
that is a “nonqualified deferred compensation plan” subject to Section 409A of
the Code. Each such nonqualified deferred compensation plan, if any, has since
January 1, 2005 been operated in compliance in all material respects with
Section 409A of the Code, and the applicable Treasury Regulations and IRS
guidance thereunder so as to avoid any Tax pursuant to Section 409A of the Code.
The document or documents that evidence each such plan substantially conform to
the provisions of Section 409A of the Code and the Treasury Regulations
thereunder.

(e)        Additional Tax Representations. Except as set forth on Schedule
4.7(e) of the Company Disclosure Letter, the Company is not a party to any
Contract or any Company Benefit Arrangement that, to the knowledge of the
Company, could give rise to payments with respect to the performance of services
that are nondeductible under Sections 162(m), 404 or 280G of the Code or subject
to the excise tax under Section 4999 of the Code, and no amount payable as a
result of or in connection with the consummation of the Acquisition by any
employee or director of the Company who is a “disqualified individual” (as such
term is defined in proposed Treasury Regulation Section 1.280G-1)

 

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under any Company Employee Plan could be characterized as an “excess parachute
payment” (as defined in Section 280G(b)(1) of the Code).

4.8        Related Party Transactions. None of the Group Companies has, or, to
the Knowledge of the Company, has been deemed to have for purposes of any
Applicable Law, engaged in or been party to any transaction with any of its
officers, directors, employees or direct or indirect shareholders or, to the
Knowledge of the Company, any member of their immediate families (i) acquired or
have the use of property for proceeds greater than the fair market value
thereof, (ii) received services or have the use of property for consideration
other than the fair market value thereof, or (iii) received interest or any
other amount other than at a fair market value rate from any person with whom it
does not deal at arm’s length within the meaning of applicable taxation acts.
None of the Group Companies has, or, to the Knowledge of the Company, has been
deemed to have for purposes of any Applicable Law, engaged in or been party to
any transaction with any of its officers, directors, employees or direct or
indirect shareholders or, to the Knowledge of the Company, any member of their
immediate families (i) disposed of the property for proceeds less than the fair
market value thereof, (ii) performed services for consideration other than the
fair market value thereof or (iii) paid interest or any other amount other than
at a fair market value rate to any person with whom it does not deal at arm’s
length within the meaning of applicable acts. To the Knowledge of the Company,
none of the officers, directors and employees of any Group Company, any Company
Shareholder, nor any immediate family member of an officer, director, employee
or such beneficial owner, has a direct ownership interest of more than five
percent (5%) of the equity ownership of any firm or corporation that competes
with, or does business with, or has any contractual arrangement with, the Group
Companies.

4.9        Company Financial Statements.

(a)        Schedule 4.9(a) of the Company Disclosure Letter includes the Company
Financial Statements. The Company Financial Statements: (a) are derived from and
are in accordance with the books and records of the Group Companies; (b) fairly
present in all material respects the financial condition of the Company and its
Subsidiaries at the dates therein indicated and the results of operations and
cash flows of the Group Companies for the periods therein specified; and
(c) have been prepared in accordance with GAAP (except that the unaudited
Company Financial Statements do not have notes and are subject to normal
recurring year-end adjustments, the effect of which are not, individually or in
the aggregate, material to the Group Companies). Except for (i) Liabilities
shown on the Company Balance Sheet, (ii) Liabilities that were incurred after
the Balance Sheet Date in the Ordinary Course of Business, (iii) executory
Liabilities expressly provided for in any of the Company’s Contracts that have
been made available to Buyer and that are not required to be reflected in the
Company Financial Statements under GAAP, (iv) Liabilities incurred in connection
with the negotiation, preparation or execution of this Agreement, which have
been or will be taken into account in the calculation of Transaction Fees and
(v) Liabilities identified in the Company Disclosure Letter, the Group Companies
have no Liabilities, individually or in the aggregate, that are or could
reasonably be expected to have a Material Adverse Effect. All reserves
established by the Group Companies that are set forth in or reflected in the
Company Balance Sheet have been established in accordance with GAAP.

(b)         Except as disclosed in Schedule 4.9(b) of the Company Disclosure
Letter, the Company has established and maintains a system of internal control
over financial reporting (within the meaning of Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) which is effective in providing reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements in accordance with GAAP, including policies and procedures that
(i) require the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company
and its Subsidiaries, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with GAAP, and that

 

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receipts and expenditures of the Company and its Subsidiaries are being made
only in accordance with appropriate authorizations of management and the Board,
and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the assets of the Company and
its Subsidiaries. The Company has disclosed to the Company’s outside auditors
and Board (x) any Known significant deficiencies and Known material weaknesses
in the design or operation of internal control over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information and (y) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal control over financial reporting. A summary of any of these disclosures
made by management to the Company’s auditors and Board is set forth as Schedule
4.9(b) of the Company Disclosure Letter. Except as disclosed in Schedule 4.9(b)
of the Company Disclosure Letter, the Company does not have any Knowledge of any
“significant deficiencies” or “material weaknesses” (as defined by the Public
Company Accounting Oversight Board) in the design or operation of the Company’s
internal controls and procedures that would reasonably be expected to adversely
affect the Company’s ability to record, process, summarize and report financial
data.

(c)         The Company has filed and published all its annual accounts in
compliance with the Luxembourg Company Law.

4.10        Title to Properties.

(a)         The Group Companies have good and valid title to, or in the case of
leased assets and properties, valid leasehold interests in, all of the
respective tangible assets and properties used, possessed or occupied by them
(including those shown on the Company Balance Sheet), free and clear of all
Encumbrances, other than Permitted Encumbrances. Such assets are sufficient for
the continued operation of the Company Business. All properties used in the
operations of the Company Business are reflected on the Company Balance Sheet to
the extent required under GAAP to be so reflected. All machinery, vehicles,
equipment and other tangible personal property owned or leased by each Group
Company or used in the Company Business are in good condition and repair, normal
wear and tear excepted. All leases of real or personal property to which a Group
Company is a party are fully effective and afford such Group Company, as
applicable, a valid leasehold possession of the real or personal property that
is the subject of the lease. Schedule 4.10(a)-1 of the Company Disclosure Letter
sets forth a complete and accurate list of all real property owned by any Group
Company, including rights equivalent to real property (grundstücksgleiche
Rechte) (the “Owned Real Property”). Schedule 4.10(a)-2 of the Company
Disclosure Letter sets forth a complete and accurate list of all real property
leased or subleased to any Group Company (the “Leased Real Property” and
together with the Owned Real Property, the “Real Property”), with correct and
completed copies of each lease or sublease thereof (the “Leases”) has been
delivered by the Company to Buyer. Schedule 4.10(a)-3 of the Company Disclosure
Letter sets forth a complete and accurate listing of the locations of all sales
offices and any other offices or facilities of the Group Companies and a true
and complete and accurate list of all states or foreign jurisdictions in which
any Group Company maintains employees.

(b)         With respect to each Owned Real Property listed in Schedule
4.10(a)-1 of the Company Disclosure Letter:

(i)         the Group Company that is shown as the owner of such real property
in Schedule 4.10(a)-1 has good and marketable indefeasible fee simple title,
free and clear of all Encumbrances, except for Permitted Encumbrances;

(ii)         no Group Company has leased or otherwise granted to any Person the
right to use or occupy such Owned Real Property or any portion thereof;

 

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(iii)         there are no outstanding options, rights of first offer or rights
of first refusal to purchase such Owned Real Property or any portion thereof or
interest therein; and

(iv)        Schedule 4.10(b)(iv) contains up-to-date copies of any land register
(Grundbuch), register of heritable building rights (Erbbaugrundbuch) and public
encumbrance register (Baulastenverzeichnis) existing in respect of Owned Real
Property owned by TD Germany. No registrations or applications for registration
in such registers are pending and there are no matters which are not registered
therein, but with respect to which a registration in any of such registers would
be required or permitted under Applicable Law. No Owned Real Property owned by
TD Germany is encroached (überbaut) and no buildings on such Owned Real Property
encroach over neighboring properties. None of the Group Companies has received
any written notice from any Governmental Authority or Person of any pending or
threatened condemnations (Enteignung), planned public redevelopment measures
(Sanierungsmaßnahmen), annexation, special assessments charged on the premises
(Erschließungskostenbeiträge), zoning or subdivision changes (Änderungen der
Bauleitplanung und Parzellierung), affecting such Owned Real Property.

(c)         With respect to each Lease listed in Schedule 4.10(a)-2 of the
Company Disclosure Letter:

(i)         such Lease will continue to be legal, valid, binding, enforceable
and in full force and effect immediately following the Closing in accordance
with the terms thereof as in effect immediately prior to the Closing;

(ii)         no Group Company is in breach or default under such leases or
subleases, and to the Knowledge of the Company, no other party thereto is in
breach of default thereof, and no event has occurred which, with notice or lapse
of time, would constitute a breach or default or permit termination,
modification, or acceleration thereunder;

(iii)         no Group Company has assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold or subleasehold;

(iv)         to the Knowledge of the Company, the owner of the Leased Real
Property has good and marketable title to such Leased Property, and such owners
of the sublessor of the Leased Real Property has full right, power and authority
to lease the Leased Real Property and improvements thereon to the applicable
Group Company on the terms set forth in such Lease; and

(v)         no Group Company is obligated to pay any leasing or brokerage
commission relating to such lease or will have any obligation to pay any leasing
or brokerage commission upon the renewal of the lease.

(d)         All facilities located on the Real Property have received all
approvals of Governmental Authorities (including licenses and permits) required
in connection with the operation thereof and have been operated and maintained
by the applicable Group Company in accordance with Applicable Law.

(e)         The Real Property is in compliance with all applicable building,
zoning, subdivision, health and safety and other land use laws, including, if
applicable, the Americans with Disabilities Act of 1990, as amended, and all
insurance requirements affecting such Real Property.

(f)         All facilities located on the Real Property are supplied with all
water, gas, electrical, sewer, storm and waste water systems and all other
utilities and other services necessary for the operation of said facilities, and
such utilities and services are operational and sufficient.

 

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(g)         All buildings, structures, fixtures, building systems and equipment
located on the Real Property and used in the business of the applicable Group
Company are in good condition and repair and sufficient for the operation of the
business of the applicable Group Company and there are no material defects in
design, construction or structure of any premises or other improvements utilized
by applicable Group Company.

(h)         There is no condemnation, expropriation or other proceeding in
eminent domain, pending or, to the Knowledge of the Company, threatened,
affecting any parcel of Real Property or any portion thereof or interest
therein.

(i)         The Real Property comprises all of the real property used or
intended to be used in the Company Business.

(j)         With respect to each such owned personal property in Schedule
4.10(a)-2 of the Company Disclosure Letter, to the Knowledge of the Company,
there are no Parties (other than the Group Companies and its officers,
directors, employees, consultants and agents) who are in possession of or who
are using any such item of personal property.

4.11        Absence of Certain Changes. Since the Balance Sheet Date, the
Company Business has been operated in the Ordinary Course of Business, and since
such date there has not been with respect to any Group Company any:

(a)         Material Adverse Change or any change, event, circumstance,
condition or effect that would reasonably be expected to result in a Material
Adverse Change;

(b)         amendment or change in its Charter Documents;

(c)         incurrence, creation or assumption of (i) any Encumbrance on any of
its assets or properties (other than Permitted Encumbrances) or (ii) any
Liability as a guarantor or surety with respect to the obligations of any Person
other than another Group Company;

(d)         material damage, destruction or loss of any property or asset,
whether or not covered by insurance;

(e)         declaration, setting aside or payment of any dividend on, or the
making of any other distribution in respect of, its capital stock, other than
the issuance of Company Shares in connection with the conversion of outstanding
Debt to equity by the Company and the Company Shareholders prior to the Closing;

(f)         any material change with respect to its senior management or other
key personnel;

(g)         any actual or threatened material employee strikes, work stoppages,
slowdowns or lockouts or, to the Knowledge of the Company, any labor union
organization activity;

(h)         making or entering into of any Contract with respect to any
acquisition, sale or transfer of all or substantially all of the assets of the
Company;

(i)         any change in accounting methods or practices (including any change
in depreciation or amortization policies or rates or revenue recognition
policies) or any revaluation of any of its assets;

(j)         commencement of any action, suit, arbitration, mediation,
proceeding, claim or investigation, or receipt notice of or, to the Knowledge of
the Company, a threat of any action, suit,

 

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arbitration, mediation, proceeding, claim or investigation against a Company
Entity relating to any of its business, properties or assets;

(k)         any negotiation with respect to, or any entry into, any Contract to
do any of the things described in the preceding clauses (a) - (j) (other than
negotiations and agreements with Buyer and its representatives regarding the
transactions contemplated by this Agreement).

4.12        Contracts, Agreements, Arrangements, Commitments and Undertakings.
Schedule 4.12 of the Company Disclosure Letter sets forth a list of each of the
following Contracts to which any Group Company is a party or to which any Group
Company or any of its assets or properties is bound:

(a)         any material dealer, distributor, OEM (original equipment
manufacturer), VAR (value added reseller), sales representative or similar
Contract under which any third party is authorized to sell, sublicense, lease,
distribute, market or take orders for any of its products, services or
technology;

(b)         any Contract providing for the development of any software, content
(including textual content and visual, photographic or graphics content),
technology or Intellectual Property for (or for the benefit or use of) it, or
providing for the purchase by or license to (or for the benefit or use of) it of
any software, content (including textual content and visual, photographic or
graphics content), technology or Intellectual Property, which software, content,
technology or Intellectual Property is in any manner used or incorporated (or is
contemplated by it to be used or incorporated) in connection with any aspect or
element of any product, service or technology of any Group Company;

(c)         any Contract that relates to a partnership (including silent
partnership (Stille Gesellschaft), joint venture, joint marketing, joint
development or similar arrangements with any other Person, and any cash-pooling
agreements or similar agreements;

(d)         any Company Employee Agreement or other Contract for or relating to
the employment by it of any director, managing director, officer, employee or
consultant or any other type of Contract with any of its officers, employees or
consultants that is not immediately, or, in the case of TD Germany, in
compliance with such notice period as required under mandatory Applicable Law,
terminable by it without cost or other Liability, including any contract
requiring it to make a payment to any director, managing director, officer,
employee or consultant in connection with the Acquisition, any transaction
contemplated by this Agreement or any Contract that is entered into in
connection with this Agreement;

(e)         any Contract with any labor union, organization or association or
any works council, including any collective bargaining agreement, works
agreement (Betriebsvereinbarung) or similar Contract with respect to employees
of any Group Company;

(f)         any indenture, mortgage, trust deed, promissory note, loan
agreement, security agreement, guarantee or other Contract for or with respect
to the borrowing of money, a line of credit, any currency exchange, commodities
or other hedging arrangement, or a leasing transaction of a type required to be
capitalized in accordance with GAAP which will remain in place after the
Closing;

(g)         any Contract that, following the Closing, will restrict Buyer or any
of its Subsidiaries from (i) engaging in any aspect of its business,
(ii) participating or competing in any line of business, market or geographic
area, (iii) freely setting prices for its products, services or technologies
(including most favored customer pricing provisions), or (iv) soliciting
potential employees, consultants, contractors or other suppliers or customers;

 

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(h)         any Contract under which any Group Company grants any exclusive
rights, non-competition rights, rights of refusal or rights of first negotiation
to any Person;

(i)         any Contract relating to the sale, issuance, grant, exercise, award,
purchase, repurchase or redemption of any shares of its capital stock or other
securities or any options, warrants or other rights to purchase or otherwise
acquire any such shares of capital stock, other securities or options, warrants
or other rights therefor;

(j)         any Contract with any labor union or works council or any collective
bargaining agreement or works agreement or similar Contract with its employees
or representatives of its employees

(k)         any Contract with a third party that leases temporary employees or
independent contractors to work for a Group Company;

(l)         any settlement agreement (including any agreement under which any
employment-related claim is settled);

(m)         any Contract of guarantee, support, indemnification, assumption or
endorsement of, or any similar commitment with respect to, the obligations,
Liabilities (whether accrued, absolute, contingent or otherwise) or indebtedness
of any Person other than another Group Company;

(n)         any Contract in which its officers, directors, employees or
shareholders or, to the Knowledge of the Company, any member of their immediate
families is directly or indirectly interested (whether as a party or otherwise)
other than a Company Employee Agreement;

(o)         any Contract pursuant to which it has acquired a business or entity,
or substantially all of the assets of a business or entity, whether by way of
merger, consolidation, purchase of stock, purchase of assets, license or
otherwise;

(p)         any Contract with any Person with whom any Group Company does not
deal at arm’s length;

(q)         any Contract that involves the sharing of profits with other Persons
or the payment of royalties to any other Person other than another Group Company
or an employee as part of their employment arrangements, excluding non-exclusive
software licenses entered into in the Ordinary Course of Business;

(r)         any Contract containing any support, maintenance or service
obligations on the part of any Group Company that has been entered into outside
of the Ordinary Course of Business;

(s)         any Contract that does not contain a limitation of the liability of
a Group Company for money damages thereunder for any purpose, or that purports
to expose a Group Company to unlimited liability for money damages thereunder
under any circumstances;

(t)         any Contract that relates to any interest rate or currency, swap,
cap, collar or other derivative or hedging arrangement;

(u)         any Contract subjecting any Group Company to an employee or customer
non-solicitation provision;

(v)         any Contracts or subcontracts to which a Governmental Authority is a
party; or

 

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(w)         any other Contract that is material to it or its business,
operations, financial condition, properties or assets.

All Contracts to which any Group Company is a party are in written form.

4.13        No Default; No Restrictions.

(a)         Each of the Company Material Contracts is in full force and effect.
Each Group Company is performing all of the obligations required to be performed
by it and is entitled to all of the benefits under, and is not alleged to be in
default in respect of, any Company Material Contract to which it is a party or
by which it is bound. There exists no default or event of default or event,
occurrence, condition or act, with respect to any Group Company or, to the
Knowledge of the Company, with respect to any other contracting party, which,
with the giving of notice or the lapse of time, would reasonably be expected to
(i) become a default or event of default under any Company Material Contract to
which such Group Company is a party or by which such Group Company is bound or
(ii) give any third party (A) the right to declare a default or exercise any
remedy under such Company Material Contract, (B) the right to a rebate,
chargeback, refund, credit, penalty or change in delivery schedule under such
Company Material Contract, (C) the right to accelerate the maturity or
performance of any obligation of the Group Company under such Company Material
Contract, or (D) the right to cancel, terminate or modify such Company Material
Contract. No Group Company has not received any written, or, to the Knowledge of
the Company, oral notice or other communication regarding any actual or possible
violation or breach of or default under, or intention to cancel or modify, any
Company Material Contract.

(b)         No Group Company is a party to, nor any asset or property of any
Group Company is bound or affected by, any judgment, injunction, order or
decree, that restricts or prohibits any Group Company or, following the Closing,
will restrict or prohibit the Company or Buyer, from freely engaging in the
Company Business or from competing anywhere in the world (including any
judgments, injunctions, orders or decrees, restricting the geographic area in
which any Group Company may sell, license, market, distribute or support any
products or technology or provide services or restricting the markets, customers
or industries that any Group Company may address in operating the Company
Business or restricting the prices which any Group Company may charge for its
products, technology or services (including most favored customer pricing
provisions)), or includes any grants by the Company of exclusive rights or
licenses, non-competition rights, rights of refusal, rights of first negotiation
or similar rights.

4.14        Intellectual Property.

(a)        Schedule 4.14(a)(i) of the Company Disclosure Letter contains a
complete and accurate list of all Company Offerings, including, where
applicable, the title and most current version. Each of the Company Offerings or
services performs in all material respects, free of significant defects, bugs or
errors (other than those listed in any documentation delivered with the Company
Offerings or services, or which are disclosed in Schedule 4.14(a)(ii) of the
Company Disclosure Letter), in compliance with the functions, performance and
other requirements described in any applicable warranty, published
specifications or end user documentation provided by the Company or its
Subsidiaries to customers of the Company or its Subsidiaries acquiring such
Company Offerings or services.

(b)        Schedule 4.14(b) of the Company Disclosure Letter contains a complete
and accurate list of all Registered Company Intellectual Property, in each case
listing, as applicable: (i) for each Patent, the name of the current owner, the
Patent number or application serial number and the jurisdiction in which each
Patent was filed; (ii) for each registered Trademark or Trademark application,
the name of the applicant/registrant/creator, the jurisdiction where the
application/registration/creation is located (by country, province and state)
and the application serial number or registration number; (iii) for each

 

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Domain Name, the name of the registrant and expiration date of the registration;
and (iv) for each Copyright or Copyright application, the name of the
applicant/registrant, the jurisdiction where the application/registration is
located (by country, province and state) and the application or registration
number. Schedule 4.14(b) of the Company Disclosure Letter also contains a
complete and accurate list of all material unregistered Trademarks used or held
for use by the Company and its Subsidiaries to indicate the source or origin of
the Company Offerings and all material unregistered Copyrights that are
Company-Owned Intellectual Property. All Registered Company Intellectual
Property is exclusively owned by and registered or applied for solely in the
name of the Company or its Subsidiaries. All Registered Company Intellectual
Property is valid, has not been abandoned and, except for applications for the
foregoing, is enforceable. There are no pending disputes regarding such
Registered Company Intellectual Property, including disputes with regard to the
validity of such right, the scope thereof, or any (alleged) violation thereof.

(c)         Except as set forth in Schedule 4.14(c) of the Company Disclosure
Letter: (i) all necessary registration, maintenance, employee inventor and
renewal fees with respect to the Registered Company Intellectual Property have
been paid; (ii) and all documents and instruments necessary for the purposes of
obtaining, maintaining, perfecting, preserving and renewing such Registered
Company Intellectual Property have been validly executed, delivered and filed
with the appropriate Governmental Authority; (iii) each item of Registered
Company Intellectual Property has been prosecuted in compliance with all
applicable rules, policies, and procedures of the applicable Governmental
Authority, and (iv) there are no actions that must be taken for the purposes of
obtaining, maintaining, preserving or renewing any Registered Company
Intellectual Property within ninety (90) days following the date of this
Agreement, including the payment of any registration, maintenance or renewal
fees or the filing of any affidavits, responses, recordations, certificates or
other documents. Neither the Company, any of its Subsidiaries nor any of their
respective employees, officers or directors has taken any actions or failed to
take any actions that would cause any of the Registered Company Intellectual
Property to be invalid, unenforceable or not subsisting.

(d)         To the Knowledge of the Company, there are no facts, circumstances,
or information that would or reasonably could be expected to: (i) render any of
the Intellectual Property Rights in the Company-Owned Intellectual Property
invalid or unenforceable; or (ii) adversely affect, limit, restrict, impair, or
impede the ability of the Company to use and practice the Company Intellectual
Property upon the Closing in the same or similar manner as currently used and
practiced by the Company prior to the Closing.

(e)        Schedule 4.14(e)(i) of the Company Disclosure Letter contains a
complete and accurate list of all Contracts to which the Company or its
Subsidiaries is a party, or by which the Company or its Subsidiaries is
otherwise bound, under which the Company or one of its Subsidiaries has granted
or agreed to grant to any other Person any license, covenant, release, immunity
or other right that applies to any Company-Owned Intellectual Property
(“Outbound Intellectual Property Contracts”), other than nondisclosure
agreements entered into in the Ordinary Course of Business. Schedule 4.14(e)(ii)
of the Company Disclosure Letter contains a complete and accurate list of all
Contracts to which the Company or its Subsidiaries is a party, or by which the
Company or its Subsidiaries is otherwise bound, under which any other Person has
granted or agreed to grant to the Company or its Subsidiaries any license,
covenant, release, immunity or other right with respect to Intellectual Property
(“Inbound Intellectual Property Contracts”), other than non-exclusive inbound
end user licenses of generally commercially available software with license fees
under $5,000 that do not relate to software incorporated into any Company
Offering. The Inbound Intellectual Property Contracts and Outbound Intellectual
Property Contracts, together, are referred to herein as the “Company
Intellectual Property Contracts.” All Company Intellectual Property Contracts
are in full force and effect, and enforceable in accordance with their terms.
The Company or its Subsidiaries, as applicable, is in compliance with, and

 

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have not breached any term of, any such Company Intellectual Property Contracts
and, to the Knowledge of the Company, all other Parties to such Company
Intellectual Property Contracts are in compliance with, and have not breached
any term of, such Company Intellectual Property Contracts. There are no pending
disputes regarding such Company Intellectual Property Contracts, including
disputes with respect to the scope thereof, performance thereunder, or payments
made or received in connection therewith. The consummation of the transactions
contemplated by this Agreement will neither violate nor result in the breach,
modification, cancellation, termination or suspension of, acceleration of any
payments or loss of any rights under, any of the Company Intellectual Property
Contracts.

(f)         Neither this Agreement nor the transactions contemplated by this
Agreement, including the assignment to Buyer or the Company, by operation of law
or otherwise, of any Contracts to which the Company or any of its Subsidiaries
is a party, will result in: (i) any third party being granted rights or access
to, or the placement in or release from escrow, of any Intellectual Property;
(ii) Buyer or the Company granting to any third party any right in any
Intellectual Property; (iii) Buyer or the Company being bound by, or subject to,
any non-compete or other restriction on the operation or scope of their
respective businesses; or (iv) Buyer or the Company being obligated to pay any
amounts, or offer discounts, in connection with Intellectual Property, to any
Person, in each case in a manner other than that in which the Company or any of
its Subsidiaries would be obligated had such transactions contemplated hereby
not occurred.

(g)         The Company or one of its Subsidiaries solely and exclusively owns
all right, title and interest in and to (including the sole right to enforce)
the Company-Owned Intellectual Property, including any improvements made by or
for the Company or one of its Subsidiaries, free and clear of all Encumbrances
(other than Permitted Encumbrances), and have not: (i) licensed any such
Company-Owned Intellectual Property, or any other Company Intellectual Property,
to any Person, except pursuant to an Outbound Intellectual Property Contract
listed in Schedule 4.14(e)(i) of the Company Disclosure Letter, or a
nondisclosure agreement entered into in the Ordinary Course of Business; or
(ii) exclusively licensed any such Company-Owned Intellectual Property, or any
other Company Intellectual Property, to any Person. To the extent that any
Company-Owned Intellectual Property is not solely and exclusively owned by
Company or one of its Subsidiaries, such Company-Owned Intellectual Property is
licensed exclusively to Company or one of its Subsidiaries pursuant to an
Inbound Intellectual Property Contract for use in the manner in which it is
currently used and is planned to be used by the Company or the applicable
Subsidiary. All Licensed Company Intellectual Property is licensed to Company or
one of its Subsidiaries pursuant to a Company Intellectual Property Contract for
use in the manner in which it is currently used and is planned to be used by the
Company or the applicable Subsidiary.

(h)         The Intellectual Property included in the Company-Owned Intellectual
Property and Licensed Company Intellectual Property include all of the
Intellectual Property that is necessary to enable Buyer and the Company and its
Subsidiaries to conduct the Company Business in the same manner as currently
conducted by the Company and its Subsidiaries, and following the Closing, the
Company and its Subsidiaries will own or have (pursuant to the Company
Intellectual Property Contracts) the same rights that the Company and its
Subsidiaries have immediately prior to the Closing with respect to such
Intellectual Property.

(i)         The Company and its Subsidiaries have taken steps consistent with
generally accepted industry standards, and in any event no less than reasonable
steps, to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all information and materials not generally known to the
public that are included in the Company Intellectual Property (including any
Trade Secrets provided by or to third Persons). Neither the Company nor any of
its Subsidiaries has authorized the disclosure of any Trade Secret included in
the Company Intellectual Property or Company-Owned Intellectual Property, nor
has any such Trade Secret been disclosed, other than pursuant to a valid and
enforceable

 

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confidentiality agreement with respect thereto. No Person has misappropriated or
made any unauthorized disclosure of any Trade Secret included in the Company
Intellectual Property or Company-Owned Intellectual Property (or claimed or
understood to be so included), or breached any obligations of confidentiality
with respect to the Company Intellectual Property or Company-Owned Intellectual
Property.

(j)         Each current, and to the Knowledge of the Company, each former,
employee, officer, consultant and contractor of the Company and each of its
Subsidiaries, who is or has been involved in the development of any Company
Intellectual Property or Company-Owned Intellectual Property, has executed and
delivered to the Company or one of its Subsidiaries employment or contractor
agreements, non-disclosure agreements, and assignment of invention and Works of
Authorship agreements that assign to the Company or one of its Subsidiaries all
right, title and interest in and to any Intellectual Property arising from or
developed or delivered to the Company or one of its Subsidiaries in connection
with such Person’s work for or on behalf of the Company or one of its
Subsidiaries and provide reasonable protection for Trade Secrets of the Company
or its Subsidiaries. No current, or to the Knowledge of the Company, former,
employee, officer, consultant or contractor is party to any agreement,
non-disclosure agreement, assignment agreement, or similar agreement with any
Person, according to which any Person (including, but not limited to, any
Governmental Authority, government-owned institution, university, college, other
educational institution or research center) has ownership, license or other
right, title or interest, directly or indirectly, in whole or in part, in any
Company Intellectual Property or Company-Owned Intellectual Property. No
current, or to the Knowledge of the Company, former, employee, officer,
consultant or contractor is in default or breach of any material term of any
employment or contractor agreement, non-disclosure agreement, assignment
agreement, or similar agreement. No current, or to the Knowledge of the Company,
former, employee, officer, consultant or contractor of the Company or its
Subsidiaries has any ownership, license or other right, title or interest,
directly or indirectly, in whole or in part, in any Company Intellectual
Property or Company-Owned Intellectual Property. In each case in which the
Company or one of its Subsidiaries has acquired ownership (or claimed or
purported to acquire ownership) of any Intellectual Property from any Person
(including any employee, officer, consultant and contractor of the Company or
one of its Subsidiaries), the Company or such Subsidiary has obtained a valid
and enforceable written assignment sufficient to irrevocably transfer ownership
of and all rights with respect to such Intellectual Property to the Company or
such Subsidiary. No current, or to the Knowledge of the Company, former,
employee, officer, consultant or contractor of the Company or one of its
Subsidiaries who was involved in, or who contributed to, the creation or
development of any of the Company Intellectual Property or Company-Owned
Intellectual Property, has performed services for or was an employee of any
Governmental Authority, government-owned institution, university, college, other
educational institution or research center while such employee, consultant or
independent contractor was also performing services for the Company or such
Subsidiary or during the time period in which such employee, consultant or
independent contractor invented, created or developed any Company Intellectual
Property or Company-Owned Intellectual Property.

(k)         No government funding, facilities or funding of a university,
college, other educational institution or research center or funding from a
granting agency was used in the development of any Company-Owned Intellectual
Property.

(l)         The Company Business, including the design, development, use,
provision, import, branding, advertising, promotion, marketing, manufacture and
sale of any Company Offerings: (i) does not infringe, misappropriate, use or
disclose without authorization, or otherwise violate any Intellectual Property
Rights of any third Person; and (ii) does not constitute unfair competition or
trade practices under the laws of any relevant jurisdiction.

 

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(m)         Except as set out in Schedule 4.14(m) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries has received any Claim
(or notice of any related Action) that the Company, any Company Offering,
Company-Owned Intellectual Property, Licensed Intellectual Property or Company
Intellectual Property infringes, misappropriates, uses or discloses without
authorization, or otherwise violates any Intellectual Property Rights of any
Person or constitutes unfair competition or trade practices under the laws of
any jurisdiction (nor does the Company have Knowledge of any facts,
circumstances or information that could reasonably be the basis for such a
Claim). No Claim of infringement of Intellectual Property Rights is pending or,
to the Knowledge of the Company, threatened, against any Person who may be
entitled to be indemnified, defended, held harmless, or reimbursed by the
Company or one of its Subsidiaries with respect to such Claim. Without limiting
the foregoing, except as set out in Schedule 4.14(m) of the Company Disclosure
Letter, the Company and each of its Subsidiaries have not received any
correspondence asking or inviting the Company or one of its Subsidiaries to
enter into a Patent license or similar agreement, to obtain a release or a
covenant not to sue for Patent infringement, or otherwise to enter into other
arrangements with respect to the Patents of any other Person.

(n)        Schedule 4.14(n) of the Company Disclosure Letter contains a complete
and accurate list of all Open Source Materials incorporated into, distributed
with or used in connection with the development of any Company Offerings,
including a listing of the Open Source Licenses applicable to each such Open
Source Material and the manner in which such Open Source Material is used.
Neither the Company nor any of its Subsidiaries has used or is using any Open
Source Materials in connection with the software included in the Company
Offerings in such a manner that could cause any such software, in whole or in
part, to be (i) disclosed, distributed, licensed or made available in source
code form, (ii) licensed for the purpose of making derivative works, (iii) made
available for free or for a nominal fee or (iv) licensed, sold or otherwise made
available on terms that limit the ability to charge fees for use or grant the
rights to reverse engineer, decompile or otherwise derive source code of such
software. All use and distribution of Company Offerings or any Open Source
Materials by or through the Company or one of its Subsidiaries is in full
compliance with all Open Source Licenses applicable thereto, including all
copyright notice and attribution requirements.

(o)         To the Knowledge of the Company no Person has infringed or
misappropriated, or is infringing or misappropriating, any Intellectual Property
Right in the Company-Owned Intellectual Property. Except as set out in Schedule
4.14(o) of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has made any Claims with respect to infringement of any
Intellectual Property Right in the Company-Owned Intellectual Property against
any Person, nor has the Company or its Subsidiaries issued any written
communication inviting any Person to take a license, ownership interest,
release, covenant not to sue or the like with respect to any Intellectual
Property Right in the Company-Owned Intellectual Property.

(p)         To the Knowledge of the Company, the software included in the
Company Offerings, or used by Company or each of its Subsidiaries to provide the
Company Offerings, and the internal computer systems used in connection with the
operation of the Company Business (consisting of hardware, software, Databases
or embedded control systems, collectively, the “Systems”) are free of any
material defects, bugs and errors in accordance with generally accepted industry
standards, and does not contain or make available any disabling codes or
instructions, backdoors, spyware, Trojan horses, worms, viruses or other
software routines that permit or cause unauthorized access to, or disruption,
impairment, disablement, or destruction of, software, data or other materials.
The Company and each of its Subsidiaries have taken commercially reasonable
steps to safeguard its Systems and restrict unauthorized access thereto.

 

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(q)         The Company and each of its Subsidiaries operate their websites,
communicate with customers and otherwise conduct the Company Business in
compliance in all material respects with all Applicable Law and any contractual
obligations relating to privacy, data protection, and the collection and use of
Personal Information.

4.15        Compliance with Laws.

(a)         Each Group Company has complied in all material respects, and is in
material compliance, with all Applicable Law.

(b)         All materials, products and services distributed or marketed by any
Group Company have at all times made all material disclosures to users or
customers required by Applicable Law, and none of such disclosures made or
contained in any such materials have been inaccurate, misleading or deceptive in
any material respect.

(c)         The Company holds all permits, licenses and approvals from, and have
made all filings with, Governmental Authorities, that are legally required to be
held to conduct the Company Business without any violation of Applicable Law
(“Governmental Permits”), and all such Governmental Permits are valid and in
full force and effect. The Company has never received any written notice or
other written communication, or to the Knowledge of the Company, any oral notice
or other oral communication, from any Governmental Authority regarding (i) any
actual or possible violation of law or any Governmental Permit or any failure to
comply with any term or requirement of any Governmental Permit or (ii) any
actual or possible revocation, withdrawal, suspension, cancellation, termination
or modification of any Governmental Permit.

4.16        Employees, ERISA and Other Compliance.

(a)        Schedule 4.16(a)(i) of the Company Disclosure Letter accurately lists
all current managing directors or officers and employees of each Group Company
as of the Agreement Date, and for each such managing director, officer and
employee, his or her: (i) job position, (ii) hourly rate of compensation or base
salary (as applicable), and (iii) employing entity. Schedule 4.16(a)(ii) of the
Company Disclosure Letter accurately lists all independent contractors and
persons that have a consulting or advisory relationship of each Group Company
and each of their respective Affiliates as of the Agreement Date, and for each
such independent contractor and person with a consulting or advisory
relationship, his or her: (x) terms of compensation; and (y) contracting entity.

(b)         Each Group Company has correctly classified employees as exempt
employees and nonexempt employees under the Fair Labor Standards Act and other
Applicable Law. All employees of each Group Company are legally permitted to be
employed by such Group Company in the jurisdiction in which such employee is
employed in their current job capacities for the maximum period permitted by
Applicable Law. All independent contractors or persons that have a consulting or
advisory relationship providing services to any Group Company have been properly
classified as independent contractors for purposes of federal and applicable
state tax laws, laws applicable to employee benefits and other Applicable Law.
No Group Company has any employment or consulting or advisory Contracts
currently in effect that are not terminable at will (other than agreements with
the sole purpose of providing for the confidentiality of proprietary information
or assignment of inventions) or, as applicable, by applying any mandatory notice
period. No temporary worker has the right to demand employment by any Group
Company.

(c)         Each Group Company and each of its respective Affiliates and ERISA
Affiliates: (i) are, and at all times have been, in compliance in all material
respects with all Applicable Law respecting employment, employment practices,
terms and conditions of any managing director’s service

 

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agreements, consulting or advisory agreements, agreements with free-lancers and
employment, employee safety and wages and hours, including the health care
continuation requirements of COBRA, the requirements of the Family and Medical
Leave Act of 1993, as amended, the requirements of the Health Insurance
Portability and Accountability Act of 1996, as amended, and any similar
provisions of state law; (ii) have withheld and reported all amounts required by
Applicable Law or by Contract to be withheld and reported with respect to
compensation, wages, salaries and other payments to managing directors or
officers, employees, consultants or advisors of such Group Company or Affiliate;
(iii) are not liable for any arrears of wages or any taxes or any penalty for
failure to comply with any Applicable Law; and (iv) are not liable for any
payment to any trust or other fund governed by or maintained by or on behalf of
any Governmental Authority with respect to unemployment compensation benefits,
social security or any other applicable social insurance, or other benefits or
obligations for managing directors, officers or employees of the Company or any
Affiliate of the Company (other than routine payments to be made in the Ordinary
Course of Business). There are no pending or, to the Knowledge of the Company,
threatened claims or Legal Proceedings against any Group Company or any of their
respective Affiliates under any compensation policy or long-term disability
policy.

(d)         No Group Company is now, nor to the Knowledge of the Company has it
ever been, subject to a union organizing effort. No Group Company is subject to
any collective bargaining agreement with respect to any of its employees,
subject to any other Contract with any trade or labor union, employees’
association or similar organization, or subject to any current labor disputes.
To the Knowledge of the Company, no employee of any Group Company presently
intends to terminate his or her employment with such Group Company and no
employee of any Group Company has received an offer to join a business that may
be competitive with the Company Business.

(e)         To the Knowledge of the Company, no Group Company has been a party
to any action, or received written notice of any threatened action, in which
such Group Company was, or is, alleged to have violated any Contract or
Applicable Law relating to employment, including, but not limited to, equal
opportunity, discrimination, retaliation, harassment, immigration, wages, hours,
unpaid compensation, classification of employees as exempt from overtime or
minimum wage laws, benefits, collective bargaining, works agreements, the
payment of social security and similar taxes, occupational safety and health,
and/or privacy rights of employees.

(f)         In the past two years, there has been no “mass layoff,” “employment
loss,” or “plant closing” as defined by the WARN Act or any similar Applicable
Law in any jurisdiction in respect of any Group Company nor has any Group
Company been affected by any transaction or engaged in any lay-offs or
employment terminations sufficient in number to trigger application of any such
law.

(g)         To the Knowledge of the Company, no employee, consultant or advisor
of any Group Company is in material violation of (i) any term of any employment
or consulting Contract or (ii) any term of any other Contract or any restrictive
covenant relating to the right of any such employee, consultant or advisor to be
employed by or to render services to such Group Company or to use trade secrets
or proprietary information of others. To the Knowledge of the Company, the
employment of any employee or engagement of any consultant, advisor or temporary
worker by each Group Company does not subject it to any Liability to any third
party.

(h)        Schedule 4.16(h) of the Company Disclosure Letter contains an
accurate and complete list as of the Agreement Date of each Company Employee
Plan and each Company Employee Agreement (collectively, the “Company Benefit
Arrangements” and each a “Company Benefit Arrangement”). The Company has not
committed to establish or enter into any new Company Benefit Arrangement, or to
modify any Company Benefit Arrangement (except to conform any such Company
Benefit Arrangement

 

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to the requirements of any Applicable Law, in each case as previously disclosed
to Buyer in writing or as required by this Agreement).

(i)        The Company has made available to Buyer: (i) correct and complete
copies of all documents establishing the terms of each Company Benefit
Arrangement, including all amendments thereto and all related trust documents;
(ii) the three most recent annual reports (Form Series 5500 and all schedules
and financial statements attached thereto), if any, required under ERISA or the
Code in connection with each Company Benefit Arrangement; (iii) if the Company
Benefit Arrangement is subject to the minimum funding standards of Section 302
of ERISA, the most recent annual and periodic accounting of Company Benefit
Arrangement assets; (iv) the most recent summary plan description together with
the summaries of material modifications thereto, if any, required under ERISA
with respect to each Company Benefit Arrangement; (v) for the past three
(3) years, all correspondence to or from any Governmental Authority relating to
any Company Benefit Arrangement; (vi) all COBRA forms and related notices;
(vii) all insurance policies in the possession of any Group Company or any of
their respective Affiliates pertaining to fiduciary liability insurance covering
the fiduciaries for each Company Benefit Arrangement; (viii) all discrimination
tests required under the Code for each Company Benefit Arrangement intended to
be qualified under Section 401(a) of the Code for the three most recent plan
years; and (ix) the most recent IRS determination (or opinion letter, as
applicable) issued with respect to each Company Benefit Arrangement intended to
be qualified under Section 401(a) of the Code.

(j)        To the Knowledge of the Company, each Company Benefit Arrangement has
been established and maintained in compliance in all material respects with its
terms and with the requirements prescribed by any and all Applicable Law that is
applicable to such Company Benefit Arrangement, including ERISA and the Code.
Each Group Company and each of their respective Affiliates have performed in all
material respects all obligations required to be performed by them under each
Company Benefit Arrangement and are not in default or violation in any material
respect of, and to the Knowledge of the Company there are no defaults or
violations in any material respect by any other party to, the terms of any
Company Benefit Arrangement. Each such Company Benefit Arrangement that is
intended to qualify under Section 401(a) of the Code has received a favorable
opinion, advisory, notification and/or determination letter, as applicable, as
to its qualified status under the Code, and nothing has occurred since the date
of such letter that would adversely affect such favorable determination. No
“prohibited transaction,” within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of
ERISA, has occurred with respect to any Company Benefit Arrangement. There is no
claim, suit, administrative proceeding, action or other litigation pending, or,
to the Knowledge of the Company, threatened (other than routine claims for
benefits), against any Company Benefit Arrangement or against the assets of any
Company Benefit Arrangement. Each Company Benefit Arrangement can be amended,
terminated or otherwise discontinued after the Closing in accordance with its
terms and Applicable Laws, without material Liability to Buyer, the Company or
any ERISA Affiliate (other than ordinary administration expenses). There is no
audit, inquiry, administrative proceeding, or action pending or, to the
Knowledge of the Company, threatened by the IRS, U.S. Department of Labor, or
any other Governmental Authority with respect to any Company Benefit
Arrangement. Neither the Company nor any ERISA Affiliate has ever incurred any
penalty or tax with respect to any Company Benefit Arrangement under
Section 502(i) of ERISA or Sections 4975 through 4980 of the Code. No Company
Benefit Arrangement shall be subject to any surrender fees or services fees upon
termination other than the normal and reasonable administrative fees associated
with the termination of benefit plans.

(k)        None of the Group Companies or any of their respective Affiliates or
any of their respective current or former ERISA Affiliates has ever maintained,
established, sponsored, participated in, or contributed to any: (i) pension plan
subject to Title IV of ERISA; (ii) a “multiemployer plan” within the meaning of
Section (3)(37) of ERISA; (iii) a “multiple employer plan” as defined in
Section 413(c) of the Code; (iv) a plan subject to the minimum funding standards
of Section 412 of the Code or Section 302

 

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of ERISA; or (v) a plan maintained in connection with any trust described in
Section 501(c)(9) of the Code. None of the Group Companies or any of their
respective Affiliates has ever maintained, established, sponsored, participated
in or contributed to, any Company Benefit Arrangement in which stock of any
Group Company or any their respective Affiliates is or was held as a plan asset.

(l)        All Contributions due from any Group Company or any of their
respective Affiliates with respect to any of the Company Benefit Arrangements
have been timely made or have been accrued on the Company Balance Sheet as
required under Applicable Law, and no further contributions shall be due or are
required to be accrued thereunder as of the Closing Date (other than
contributions accrued in the Ordinary Course of Business, after the Balance
Sheet Date as a result of the operations of the Company after the Balance Sheet
Date).

(m)        There has been no amendment to, written interpretation or
announcement (whether or not written) by any Group Company or any of their
respective Affiliates relating to, or change in employee participation or
coverage under, any Company Benefit Arrangement that would increase materially
the expense of maintaining such Company Benefit Arrangement above the level of
the expense incurred in respect thereof during the calendar year 2013 (other
than increased insurance premiums and/or statutory premiums), except any such
amendments that are required under Applicable Law.

(n)        Unless otherwise indicated in Schedule 4.16(n) of the Company
Disclosure Letter, none of the Group Companies or any of their respective
Affiliates is a party to any Company Benefit Arrangement: (i) with any current
or former managing director, officer, employee, consultant or advisor of any
Group Company or any of their respective Affiliates (A) the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving such Group Company or Affiliate in the
nature of the Acquisition or any of the other transactions contemplated by this
Agreement or any Company Ancillary Agreement, (B) providing any term of
employment or compensation guarantee, or (C) providing severance benefits or
other benefits after the termination of employment of such managing director,
officer or employee (including death or medical benefits, whether or not
insured, with respect to any former or current employer or any spouse or
dependent of any such managing director, officer or employee) regardless of the
reason for such termination of employment other than as required by COBRA (or
similar state laws) or other Applicable Law; or (ii) the benefits of which shall
be materially increased, or the vesting of benefits of which shall be
accelerated, by the occurrence of the Acquisition or any of the other
transactions contemplated by this Agreement, or any event subsequent to the
Acquisition, or the value of any of the benefits of which shall be calculated on
the basis of any of the transactions contemplated by this Agreement. None of the
Group Companies or any of their respective Affiliates has any obligation to pay
any material amount or provide any material benefit to any former managing
director, officer or employee, other than obligations (1) for which the Company
has established a reserve for such amount on the Company Balance Sheet and
(2) pursuant to Contracts entered into after the Balance Sheet Date and
disclosed on Schedule 4.16(n) of the Company Disclosure Letter.

4.17        Books and Records.

(a)        The books, records and accounts of the Group Companies (i) are in all
material respects true, complete and correct, (ii) have been maintained in
accordance with good business practices on a basis consistent with prior years,
(iii) accurately and fairly reflect the basis for the Company Financial
Statements and (iv) to the extent reasonably requested by Buyer, have been made
available to Buyer and its counsel.

(b)        The minute books of the Company previously made available to Buyer or
its counsel accurately and adequately reflect in all material respects all
action previously taken by the shareholders, the Board and any committees of the
Board.

 

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(c)        Schedule 4.17(c) of the Company Disclosure Letter sets forth the
names and locations of all banks, trust companies, savings and loan associations
and other financial institutions at which each Group Company maintains accounts
of any nature and the names of all Persons authorized to draw thereon or make
withdrawals therefrom.

(d)        Each Group Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
by such Group Company in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary (1) to permit
preparation of financial statements in conformity with GAAP and Applicable Law
or any other criteria applicable to such statements and (2) to maintain
accountability for assets; and (iii) the amount recorded for assets on such
Group Company’s books and records is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

4.18        Insurance. The Group Companies maintain the policies of insurance
and bonds set forth in Schedule 4.18 of the Company Disclosure Letter, including
all legally required workers’ compensation and other insurance, correct and
complete copies of which have been made available to Buyer. Schedule 4.18 of the
Company Disclosure Letter sets forth the name of the insurer under each such
policy and bond, the type of policy or bond, and the coverage amount thereunder.
There is no material claim pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. All premiums due and payable under all such policies and
bonds have been timely paid, and the Company is otherwise in compliance in all
material respects with the terms of such policies and bonds. All such policies
and bonds remain in full force and effect, and the Company has no Knowledge of
any threatened termination of, or material premium increase with respect to, any
of such policies or bonds.

4.19        Environmental Matters. Each Group Company and its predecessors and
Affiliates are in material compliance with all Environmental Laws, which
compliance includes the possession by each Group Company of all Governmental
Permits and other governmental authorizations required under Environmental Laws
and material compliance with the terms and conditions thereof. No Group Company
has received any written notice or other written communication, whether from a
Governmental Authority, citizens groups, employee or otherwise, that alleges
that the Company is not in compliance with any Environmental Law, and to the
Knowledge of the Company, there are no circumstances that may prevent or
interfere with the compliance by the Group Companies with any current
Environmental Law in the future. No current or prior owner of any property
leased or possessed by any Group Company has received any written notice or
other written communication, whether from a Governmental Authority, citizens
group, employee or otherwise, that alleges that such current or prior owner or
any Group Company is not in compliance with any Environmental Law. All
Governmental Permits held by the Group Companies pursuant to any Environmental
Law (if any) are identified in Schedule 4.19 of the Company Disclosure Letter.

4.20        Customers and Suppliers.

(a)        The Company Offerings or services are only provided to third Parties
under the terms of the warranty described in Schedule 4.20(a) of the Company
Disclosure Letter.

(b)        Schedule 4.20(b) of the Company Disclosure Letter sets forth the top
25 customers and distributors of the Group Companies based on payments received
or due over the twelve (12) complete calendar months ended December 31, 2012 and
the six (6) complete calendar months ended June 30, 2013 (each a “Significant
Customer”). All Significant Customers are current in their payment of invoices
and the Group Companies do not have, and have not had, any material disputes
with any Significant Customer that arose or remained unresolved during such
period. To the Knowledge of the Company, there is no dissatisfaction on the part
of any Significant Customer or any facts or circumstances

 

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that would reasonably be expected to lead to such material dissatisfaction. No
Group Company has received written or, to the Knowledge of the Company, oral
notice from any Significant Customer that such customer will not continue as a
customer or distributor, as the case may be, of a Group Company (or the Company
or Buyer) or that such customer or distributor, as the case may be, intends to
terminate or request a material modification to existing Contracts with the a
Group Company (or the Company or Buyer). None of any Group Company’s products
have been returned by any such Significant Customer except for normal warranty
returns consistent with past history and such returns that would not result in a
reversal of any material amount of revenue by any Group Company.

(c)        Schedule 4.20(c) of the Company Disclosure Letter sets forth the top
25 suppliers of technical products and services to the Group Companies based on
amounts paid or payable by any Group Company to such suppliers over the twelve
(12) complete calendar months ended December 31, 2012 and the six (6) complete
calendar months ended June 30, 2013 (each, a “Significant Supplier”). The Group
Companies are current in their payments to all Significant Suppliers and no
Group Company has, or has had, any material dispute concerning Contracts with or
products or services provided by any Significant Supplier that arose or remained
unresolved during such period. To the Knowledge of the Company, there is no
material dissatisfaction on the part of any Significant Supplier or any facts or
circumstances that could reasonably lead to such material dissatisfaction. No
Group Company has received any written or, to the Knowledge of the Company, oral
notice from any Significant Supplier that such supplier shall not continue as a
supplier to a Group Company (or the Company or Buyer) or that such supplier
intends to terminate or breach existing Contracts with a Group Company (or the
Company or Buyer). The Company has access, on commercially reasonable terms, to
all products and services reasonably necessary to carry on the Company Business,
and the Company has no Knowledge of any reasonable reason why it would not
continue to have such access on commercially reasonable terms.

4.21        Accounts Receivable. Schedule 4.21 of the Company Disclosure Letter
sets forth the accounts receivable listing of the Group Companies (other than
accounts receivable from other Group Companies) as of June 30, 2013. All
accounts receivable of the Group Companies are reflected properly on their books
and records, represent bona fide, current and valid obligations arising from
sales actually made or services actually performed in the Ordinary Course of
Business, subject to no material setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the allowance for doubtful accounts set forth
in the Company Balance Sheet as adjusted for the passage of time through the
Closing Date consistent with the past custom and practice of the relevant Group
Company. No Group Company has received written notice from any obligor of any
material accounts receivable that such obligor is refusing to pay or contesting
payment of which has not been resolved prior to the date of this Agreement,
other than in the Ordinary Course of Business under any Contract with any
obligor of any accounts receivable.

4.22        Foreign Corrupt Practices Act.

(a)        Each of the Group Companies and their respective officers, directors,
employees, shareholders, Affiliates, agents, advisors (including any attorneys,
financial advisors, investment bankers or accountants) or other representatives
(collectively, the “Company Representatives”) are familiar with and are and have
been in compliance with all Applicable Laws relating to anti-bribery,
anti-corruption, anti-money laundering, record keeping and internal control laws
(collectively, the “Compliance Laws”) including the Foreign Corrupt Practice Act
of 1977, as amended (“FCPA”), as if it were a U.S. Person. Furthermore, no
Public Official (i) holds an ownership or other economic interest, direct or
indirect, in any Group Company or in the contractual relationship formed by this
Agreement, or (ii) serves as an officer, director or employee of any Group
Company. Without limiting the foregoing, no Group Company or Company
Representative has, directly or indirectly, offered, authorized, promised,
condoned, participated in, consummated, or received notice of any allegation of,

 

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(i)        the making of any gift or payment of anything of value to any Public
Official by any Person to obtain any improper advantage, affect or influence any
act or decision of any such Public Official, or assist any Group Company in
obtaining or retaining business for, or with, or directing business to, any
Person;

(ii)        the taking of any action by any Person which (i) would violate the
FCPA, if taken by an entity subject to the FCPA, or (ii) could reasonably be
expected to constitute a violation of any applicable Compliance Law;

(iii)        the making of any false or fictitious entries in the books or
records of any Group Company by any Person; or

(iv)        the using of any assets of any Group Company for the establishment
of any unlawful or unrecorded fund of monies or other assets, or the making of
any unlawful or undisclosed payment.

(b)        No Group Company or any Company Representative has ever been found by
a Governmental Authority to have violated any criminal or securities law or is
subject to any indictment or any government investigation for bribery. None of
the beneficial owners of any Equity Securities or other interest in any Group
Company or the current or former Company Representatives are or were Public
Officials.

(c)        No Group Company or any Company Representative is a Prohibited
Person, and no Prohibited Person will be given an offer to become an employee,
officer, consultant or director of any Group Company. No Group Company has
conducted or agreed to conduct any business, or entered into or agreed to enter
into any transaction with a Prohibited Person.

(d)        If the Group Companies have beneficial owners or Company
Representatives who are Public Officials, no such Public Official has been
involved on behalf of a Governmental Authority in decisions as to whether any
Group Company would be awarded business or that otherwise could benefit any
Group Company, or in the appointment, promotion, or compensation of persons who
will make such decisions.

4.23        Export Controls. Each Group Company has at all times conducted its
export and related transactions in all material respects in accordance with
(i) all applicable U.S. export, re-export, and anti-boycott laws and
regulations, including the Export Administration Regulations, the Arms Export
Control Act and International Traffic in Arms Regulations, and U.S. economic
sanctions laws and regulations administered by the U.S. Treasury Department’s
Office of Foreign Assets Control and (ii) all other applicable import and export
controls in the other countries in which each Group Company conducts business.
Without limiting the foregoing:

(a)        Each Group Company has obtained all material export licenses and
other material consents, authorizations, waivers, approvals, and orders, and has
made or filed any and all necessary notices, registrations, declarations and
filings with any Governmental Authority, and has met the requirements of any
license exceptions or exemptions, as required by Applicable Law for any Group
Company in connection with (i) the export and re-export of products, services,
software or technologies, and (ii) releases of technology, technical data or
software to foreign nationals located in the United States and abroad (“Export
Approvals”).

(b)        Each Group Company is in compliance in all material respects with the
terms of all applicable Export Approvals.

 

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(c)        There are no pending or, to the Knowledge of the Company, threatened
inquiries, investigations, enforcement actions, voluntary disclosure or other
claims against any Group Company with respect to Export Approvals.

(d)        To the Knowledge of the Company, there are no actions, conditions or
circumstances pertaining to any Group Company’s export and related transactions
that may give rise to any future inquiries, investigations, enforcement actions,
voluntary disclosures or other claims.

(e)        No Export Approvals for the transfer of export licenses to Buyer or
the Company are required, or such Export Approvals can be obtained expeditiously
without material cost.

(f)        Schedule 4.23(f) of the Company Disclosure Letter sets forth the
true, complete and accurate export control classification numbers applicable to
the Group Companies’ products, services, software and technologies.

4.24        Product Warranty. Each product designed, manufactured, processed,
sold, distributed or delivered by a Group Company or service provided by a Group
Company has been in conformity with all applicable contractual commitments and
specifications, government safety standards and other Applicable Law, all
express and implied warranties and are substantially free from contamination,
deficiencies or defects. There has not been, nor is there under consideration by
a Group Company, any product recall or post-sale warning conducted by or on
behalf of any Group Company concerning any product. No Group Company has any
Liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability) for replacement or repair thereof or
other Damages in connection therewith, subject only to the reserve for product
warranty claims set forth in the Company Balance Sheet. No product manufactured,
sold, or delivered by a Group Company is subject to any guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale or
lease. The Company has provided Buyer with copies of the standard terms and
conditions of sale used by all Group Companies.

4.25        Inventory. Subject to reserves reflected in the Company Balance
Sheet, the inventory of the Company and each Subsidiary is of good merchantable
quality and salable (in the case of inventory held for sale) or usable (in the
case of other inventory) in the Ordinary Course of Business. The value of
damaged or obsolete inventory and of inventory below standard quality has been
written down on the Company Balance Sheet to ascertainable market value, and the
value at which inventories are carried reflects the customary inventory
valuation policy of the Company or the Subsidiaries, as applicable. Since the
Balance Sheet Date, the Company and each Subsidiary have continued to replenish
inventories in a normal and customary manner consistent with past practices.
Neither the Company nor any Subsidiary has received written or, to the Knowledge
of the Company, oral notice that it will experience in the foreseeable future
any difficulty in obtaining, in the desired quantity and quality and at
reasonable prices and upon reasonable terms and conditions, the raw materials,
supplies or component products required for the manufacture, assembly or
production of its products.

4.26        No Existing Discussions. None of the Group Companies or, to the
Knowledge of the Company, any director, officer, shareholder, employee or agent
(or any investment banker, broker, finder or similar party) of any Group Company
is engaged, directly or indirectly, in any discussions or negotiations with any
third party relating to any Alternative Transaction.

4.27        Corporate Documents. The Company has provided to Buyer for
examination by posting prior to the Agreement Date in the virtual data room
maintained by the Group Companies and as to which Buyer and its representatives
have been provided full access to all documents listed in the Company Disclosure
Letter (including any Schedule thereto).

 

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4.28        Transaction Fees. Except for the fees payable to the Persons set
forth on Schedule 4.28 of the Company Disclosure Letter, none of the Group
Companies or any Affiliate of any Group Company is obligated for the payment of
any fees or expenses of any investment banker, broker, finder or similar party
in connection with the origin, negotiation or execution of this Agreement or in
connection with the Acquisition or any other transaction contemplated by this
Agreement. The legal and accounting advisors and any other persons to whom the
Company currently expects to owe fees and expenses that will constitute
Transaction Fees are set forth on Schedule 4.28 of the Company Disclosure
Letter, and other than the Transaction Fees that will be due to the entities set
forth on Schedule 4.28 of the Company Disclosure Letter, there are no
Transaction Fees.

4.29        Disclosure. The representations and warranties in this Agreement
(including the Company Disclosure Letter) and in each other document delivered
or made available by any Group Company or the Company Shareholders to Buyer or
its advisors in connection with this Agreement do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which such statements were made, not misleading. The
information provided in writing to Buyer by or on behalf of the Company, any
Company Shareholder or any of their respective Affiliates for inclusion in the
Proxy Statement will not, at the time the Proxy Statement is first mailed to the
shareholders of Buyer or at the time of the Buyer Shareholders Meeting, and the
Offer Documents will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF COMPANY SHAREHOLDERS

Each Company Shareholder, jointly and severally, represents and warrants to
Buyer that the statements contained in this Article 5 are true and correct on
and as of the Agreement Date and shall be true and correct as of immediately
prior to the Closing.

5.1        Organization of Company Shareholders. Each Company Shareholder is
duly incorporated or organized, validly existing, and in good standing under the
laws of Luxembourg with full entity power and authority to conduct its business
as it is now being conducted.

5.2        Power, Authorization and Validity.

(a)        Power and Authority. Each Company Shareholder has all requisite
corporate power and authority to enter into, execute, deliver and perform its
obligations under this Agreement and each of the Company Shareholder Ancillary
Agreements and to consummate the Acquisition. The execution, delivery and
performance by each Company Shareholder of this Agreement, each of the Company
Shareholder Ancillary Agreements and all other agreements, transactions and
actions contemplated hereby or thereby have been duly and validly approved and
authorized by all necessary corporate action on the part of each Company
Shareholder.

(b)        No Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority, or any
other Person, governmental or otherwise, is necessary or required to be made or
obtained by any Company Shareholder to enable it to lawfully execute and
deliver, enter into, and perform its obligations under this Agreement and each
of the Company Shareholder Ancillary Agreements or to consummate the
Acquisition, except for such consents, approvals, orders, authorizations,
registrations, declarations and filings, if any, that if not made or obtained by
any Company Shareholder would not be material to such Company Shareholder’s
ability to consummate the Acquisition or to perform their respective obligations
under this Agreement and the Company Shareholder Ancillary Agreements.

 

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(c)        Enforceability. This Agreement has been duly executed and delivered
by each Company Shareholder. This Agreement and each of the Company Shareholder
Ancillary Agreements are, or when executed by each Company Shareholder shall be,
valid and binding obligations of such Company Shareholder, enforceable against
such Company Shareholder in accordance with their respective terms, subject to
the effect of (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to rights of creditors
generally and (ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.

5.3        No Conflict. Neither the execution and delivery of this Agreement or
any of the Company Shareholder Ancillary Agreements by each Company Shareholder,
nor the consummation of the Acquisition or any other transaction contemplated
hereby or thereby, shall conflict with, or (with or without notice or lapse of
time, or both) result in a termination, breach, impairment or violation of, or
constitute a default under: (a) any provision of the Charter Documents of such
Company Shareholder, each as currently in effect; (b) any Applicable Law
applicable to such Company Shareholder or any of their respective material
assets or properties; or (c) any Contract to which such Company Shareholder is a
party or by which such Company Shareholder or any of their respective material
assets or properties are bound, except in the cases of clauses (b) and (c) where
such conflict, termination, breach, impairment, violation or default would not
be material to such Company Shareholder’s ability to consummate the Acquisition
or to perform its obligations under this Agreement and the Company Shareholder
Ancillary Agreements.

5.4        Company Interests. Each Company Shareholder owns of record and
beneficially the Company Interests set forth next to its name in Schedule I
attached hereto, and has good and marketable title to such Company Interests,
free and clear of any Encumbrance whatsoever and with no restrictions on the
rights and other incidents of record and beneficial ownership pertaining
thereto. The Company Shares held by each Company Shareholder are duly
authorized, validly issued and fully paid. None of the Company Shareholders is a
party to any option, warrant, right (preemptive or otherwise),call, or other
Contract or commitment, oral or in writing, that could require the Company
Shareholder to sell, assign, transfer, or otherwise dispose of any Company
Interests. None of the Company Shareholders is a party to any contract, right of
first refusal, right of first offer, proxy, voting agreement, voting trust,
registration rights agreement or shareholders agreement with respect to the
purchase, sale or voting of any Equity Securities of any Group Company.

5.5        Brokers’ Fees. None of the Company Shareholders is obligated for the
payment of any fees or expenses of any investment banker, broker, finder or
similar party in connection with the origin, negotiation or execution of this
Agreement or in connection with the Acquisition or any other transaction
contemplated by this Agreement.

5.6        Information Supplied. The information provided in writing to Buyer by
or on behalf of the Company Shareholders for inclusion in the Proxy Statement
will not, at the time the Proxy Statement is first mailed to the shareholders of
Buyer or at the time of the Buyer Shareholders Meeting, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF BUYER

Subject to the exceptions set forth in a numbered or lettered section of the
disclosure letter of the Buyer addressed to the Company Shareholders, dated as
of the Agreement Date and delivered to the Company Shareholders concurrently
with the Parties’ execution of this Agreement (the “Buyer Disclosure Letter”)
specifically referencing a representation or warranty herein, Buyer represents
and

 

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warrants to the Company Shareholders that the statements contained in this
Article 6 (each of which exceptions and disclosures set forth in any section or
subsection of the Buyer Disclosure Letter will apply to any other section or
subsection of the Buyer Disclosure Letter to the extent the relevance to such
other section or subsection is reasonably apparent from a reading of the text of
such disclosure to a reader unfamiliar with the business of Buyer and its
Subsidiaries, taken as a whole) are true and correct on and as of the Agreement
Date. For purposes of this Agreement, a document shall be deemed to have been
“made available” by the Buyer to the Company Shareholders only if it is publicly
available through the EDGAR system or has been posted in the electronic data
site at https://omm.firmex.com/projects/59/documents in connection with the
Acquisition.

6.1        Organization, Good Standing and Qualification. Each of Buyer and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and to own or lease its properties, in each case as described in the
SEC Filings. Each of Buyer and its Subsidiaries is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property makes such
qualification or leasing necessary unless the failure to so qualify has not had
and could not reasonably be expected to have a Material Adverse Effect.

6.2        Authorization. Buyer has the corporate power and authority to enter
into this Agreement and, subject only to the approval of the issuance of the
Acquisition Shares by the holders of a majority of the shares of Buyer Common
Stock at the Buyer Shareholders Meeting (the “Buyer Shareholder Approval”), has
taken all requisite action on its part, its officers, directors and shareholders
necessary for (i) the authorization, execution and delivery of this Agreement,
(ii) the authorization of the performance of all obligations of Buyer hereunder,
and (iii) the authorization, issuance (or reservation for issuance) and delivery
of the Acquisition Shares. This Agreement constitutes the legal, valid and
binding obligations of Buyer, enforceable against Buyer in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability, relating to or affecting
creditors’ rights generally and to general equitable principles.

6.3        Capitalization. Buyer has duly and validly authorized capital stock
as set forth in the SEC Filings and in the Amended and Restated Articles of
Incorporation of Buyer, as amended and as in effect as of the date of this
Agreement (the “Articles of Incorporation”). All of the issued and outstanding
shares of Buyer’s capital stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of pre-emptive rights and were issued in
full compliance with Applicable Law and any rights of third parties. Except as
described in the SEC Filings, all of the issued and outstanding shares of
capital stock of each Subsidiary of Buyer have been duly authorized and validly
issued and are fully paid, nonassessable and free of pre-emptive rights, were
issued in full compliance with applicable state and federal securities Law and
any rights of third parties and are owned by Buyer, beneficially and of record,
subject to no Encumbrance. Except as described in the SEC Filings, no Person is
entitled to pre-emptive or similar statutory or contractual rights with respect
to any securities of Buyer. Except as described in the SEC Filings, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which Buyer or any of its
Subsidiaries is or may be obligated to issue any equity securities of any kind
and except as contemplated by this Agreement, neither Buyer nor any of its
Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind. Except as described in the SEC Filings, there are no
voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among Buyer and any of the security
holders of Buyer relating to the securities of Buyer held by them. Except as
described in the SEC Filings, no Person has the right to require Buyer to
register any securities of Buyer under the Securities Act, whether on a demand
basis or in connection with the registration of securities of Buyer for its own
account or for the account of any other Person.

 

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Except as described in the SEC Filings, the issuance and sale of the Acquisition
Shares hereunder will not obligate Buyer to issue shares of Common Stock or
other securities to any other Person and will not result in the adjustment of
the exercise, conversion, exchange or reset price of any outstanding security.

Except as described in the SEC Filings, Buyer does not have outstanding
shareholder purchase rights or “poison pill” or any similar arrangement in
effect giving any Person the right to purchase any equity interest in Buyer upon
the occurrence of certain events (a “Rights Plan”).

6.4        Valid Issuance. Upon the issuance of the Acquisition Shares in
accordance with Section 2.2(a), the shares of Buyer Common Stock constituting
such Acquisition Shares will be validly issued, fully paid and nonassessable,
and shall be free and clear of all Encumbrances (other than any Encumbrances
created by Applicable Law or the Company Shareholders).

6.5        Consents. The execution, delivery and performance by Buyer of this
Agreement and the consummation of the transactions contemplated hereby require
no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities Laws and post-sale filings pursuant to
applicable state and federal securities Laws which Buyer undertakes to file
within the applicable time periods, including the filing of the Proxy Statement
with the SEC in accordance with the Exchange Act and such reports under the
Exchange Act as may be required in connection with this Agreement, the
Acquisition and the other transactions contemplated by this Agreement.

6.6        Delivery of SEC Filings; Business. Buyer has made available to the
Company and the Company Shareholders through the EDGAR system, true and complete
copies of Buyer’s most recent Annual Report on Form 10-K for the fiscal year
ended July 1, 2013 (as amended prior to the date of this Agreement, the “10-K”),
and all other reports filed by Buyer pursuant to Sections 13(a), 13(e), 14 and
15(d) of the Exchange Act since the filing of the 10-K and during the twelve
(12) months preceding the date of this Subscription Agreement (collectively, the
“SEC Filings”). The SEC Filings are the only filings required of Buyer pursuant
to the Exchange Act for such period. Buyer and its Subsidiaries are engaged in
all material respects only in the business described in the SEC Filings and the
SEC Filings contain a complete and accurate description in all material respects
of the business of Buyer and its Subsidiaries, taken as a whole.

6.7        Absence of Certain Changes. Between July 1, 2013 and the date of this
Agreement, except as described in the SEC Filings, there has not been with
respect to Buyer, any:

(a)        Material Adverse Change or any change, event, circumstance, condition
or effect that would reasonably be expected to result in a Material Adverse
Change;

(b)         amendment or change in Buyer’s Charter Documents;

(c)        incurrence, creation or assumption of (i) any Encumbrance on any of
its assets or properties (other than Permitted Encumbrances) or (ii) any
Liability as a guarantor or surety with respect to the obligations of any Person
other than a Subsidiary of Buyer;

(d)         material damage, destruction or loss of any property or asset,
whether or not covered by insurance;

(e)        declaration, setting aside or payment of any dividend on, or the
making of any other distribution in respect of, its capital stock;

 

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(f)         any material change with respect to its senior management or other
key personnel;

(g)        any actual or threatened material employee strikes, work stoppages,
slowdowns or lockouts or, to the Knowledge of Buyer, any labor union
organization activity;

(h)        making or entering into of any Contract with respect to any
acquisition, sale or transfer of all or substantially all of the assets of
Buyer;

(i)        any change in accounting methods or practices (including any change
in depreciation or amortization policies or rates or revenue recognition
policies) or any revaluation of any of its assets;

(j)        commencement of any action, suit, arbitration, mediation, proceeding,
claim or investigation, or receipt notice of or, to the Knowledge of Buyer, a
threat of any action, suit, arbitration, mediation, proceeding, claim or
investigation against a Buyer relating to any of its business, properties or
assets;

(k)        any negotiation with respect to, or any entry into, any Contract to
do any of the things described in the preceding clauses (a) - (j) (other than
negotiations and agreements with the Company and its representatives regarding
the transactions contemplated by this Agreement).

6.8        SEC Filings.

(a)        At the time of filing thereof, each of the SEC Filings complied as to
form in all material respects with the requirements of the Exchange Act and did
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.

(b)        Each registration statement and any amendment thereto filed by Buyer
since January 1, 2010 pursuant to the Securities Act and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the Securities Act
and did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein not misleading; and each prospectus filed pursuant to
Rule 424(b) under the Securities Act, as of its issue date and as of the closing
of any sale of securities pursuant thereto did not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.

6.9        No Conflict, Breach, Violation or Default. The execution, delivery
and performance of this Agreement by Buyer and the issuance of the Acquisition
Shares will not (a) conflict with or result in a breach or violation of (i) any
of the terms and provisions of, or constitute a default under the Articles of
Incorporation or the bylaws of Buyer, or (ii) any statute, rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over Buyer, any of its Subsidiaries or any of their
respective assets or properties, or (b) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Encumbrance upon any of the properties or
assets of Buyer or any of its Subsidiaries or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any Material Contract, except in the case of clauses
(a)(i) and (b) above, such as could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate.

6.10        Tax Matters. Buyer and each of its Subsidiaries have prepared and
filed (or filed applicable extensions therefor) all Tax Returns required to have
been filed by Buyer or any such

 

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Subsidiary with all appropriate Governmental Authorities and paid all Taxes
shown thereon or otherwise due for payment, other than any such Taxes which
Buyer or any Subsidiary are contesting in good faith and for which adequate
reserves have been provided and reflected in Buyer’s financial statements
included in the SEC Filings. The charges, accruals and reserves on the books of
Buyer in respect of Taxes for all fiscal periods are adequate in all material
respects, and there are no material unpaid assessments against Buyer or any of
its Subsidiaries nor, to Buyer’s Knowledge, any basis for the assessment of any
additional Taxes, penalties or interest for any fiscal period or audits by any
federal, state or local taxing authority except for any assessment which is not
material to Buyer and its Subsidiaries, taken as a whole. All Taxes and other
assessments and levies that Buyer or any of its Subsidiaries is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper Governmental Authority or third party when due, other than
any such Taxes which Buyer or any of its Subsidiaries are contesting in good
faith and for which adequate reserves have been provided and reflected in
Buyer’s financial statements included in the SEC Filings. There are no Tax liens
or claims pending or, to Buyer’s Knowledge, threatened in writing against Buyer
or any of its Subsidiaries or any of their respective assets or property. Except
as described in the SEC Filings, there are no outstanding Tax sharing agreements
or other such arrangements between Buyer and any of its Subsidiaries, on the one
hand, and any other corporation or entity, on the other hand.

6.11      Title to Properties.    Except as disclosed in the SEC Filings, Buyer
and each of its Subsidiaries have good and marketable title to all real
properties and all other properties and assets (excluding Intellectual Property
assets which are the subject of Section 6.14) owned by it, in each case free
from Encumbrances that would materially affect the value thereof or materially
interfere with the use made or currently planned to be made thereof by them; and
except as disclosed in the SEC Filings, Buyer and each of its Subsidiaries holds
any leased real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or currently
planned to be made thereof by them.

6.12      Certificates, Authorities and Permits.    Buyer and each of its
Subsidiaries possess adequate certificates, authorities or permits issued by
appropriate Governmental Authorities necessary to conduct the business now
operated by it, except to the extent failure to possess such certificates,
authorities or permits could not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate, and neither Buyer nor any of
its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if
determined adversely to Buyer or such Subsidiary, could reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate.

6.13      Labor Matters.

(a)         Except as set forth in the SEC Filings, Buyer is not a party to or
bound by any collective bargaining agreements or other agreements with labor
organizations. Buyer has not violated in any material respect any Laws,
regulations, orders or contract terms, affecting the collective bargaining
rights of employees, labor organizations or any Laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours.

(b)        (i)   There are no labor disputes existing, or to Buyer’s Knowledge,
threatened, involving strikes, slow-downs, work stoppages, job actions,
disputes, lockouts or any other disruptions of or by Buyer’s employees,
(ii) there are no unfair labor practices or petitions for election pending or,
to Buyer’s Knowledge, threatened before the National Labor Relations Board or
any other federal, state or local labor commission relating to Buyer’s
employees, (iii) no demand for recognition or certification heretofore made by
any labor organization or group of employees is pending with respect to Buyer
and

 

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(iv) to Buyer’s Knowledge, Buyer enjoys good labor and employee relations with
its employees and labor organizations.

(c)         Buyer is, and at all times has been, in compliance with all
Applicable Laws respecting employment (including Laws relating to classification
of employees and independent contractors) and employment practices, terms and
conditions of employment, wages and hours, and immigration and naturalization,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate. There are no claims
pending against Buyer before the Equal Employment Opportunity Commission or any
other administrative body or in any court asserting any violation of Title VII
of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C.
§§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance
barring discrimination in employment.

(d)         To Buyer’s Knowledge, Buyer has no liability for the improper
classification by Buyer of its employees as independent contractors or leased
employees prior to the date of this Agreement.

6.14      Intellectual Property.    Buyer and its Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to use, the
Intellectual Property necessary for the conduct of the business of Buyer and its
Subsidiaries as currently conducted and as described in the SEC Filings, except
where the failure to own, license or have such rights could not reasonably be
expected to result in a Material Adverse Effect, individually or in the
aggregate. Except as described in the SEC Filings, (i) to Buyer’s Knowledge,
there are no third parties who have or will be able to establish rights to any
Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to Buyer or where such rights could not
reasonably be expected to result in a Material Adverse Effect, individually or
in the aggregate; (ii) there is no pending or, to Buyer’s Knowledge, threat of
any, action, suit, proceeding or claim by others challenging Buyer or any of its
Subsidiaries’ rights in or to, or the validity, enforceability, or scope of, any
Intellectual Property owned by or licensed to Buyer or any of its Subsidiaries
or claiming that the use of any Intellectual Property by Buyer or any Subsidiary
in their respective businesses as currently conducted infringes, violates or
otherwise conflicts with the intellectual property rights of any third party;
and (iii) to Buyer’s Knowledge, the use by Buyer or any of its Subsidiaries of
any Intellectual Property by Buyer or any of its Subsidiaries in their
respective businesses as currently conducted does not infringe, violate or
otherwise conflict with the intellectual property rights of any third party.

6.15      Environmental Matters.    To Buyer’s Knowledge, neither Buyer nor any
of its Subsidiaries is in violation of any Environmental Laws, owns or operates
any real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim has had
or could reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate; and there is no pending or, to Buyer’s Knowledge,
threatened investigation that might lead to such a claim.

6.16      Litigation.    There are no pending actions, suits or proceedings
against or affecting Buyer, any of its Subsidiaries or any of its or their
properties; and to Buyer’s Knowledge, no such actions, suits or proceedings are
threatened, except (i) as described in the SEC Filings or (ii) any such
proceeding, which if resolved adversely to Buyer or any of its Subsidiaries,
could not reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate. Neither Buyer nor any of its Subsidiaries, nor any director
or officer thereof, is or since January 1, 2005 has been the subject of any
action involving a claim of violation of or liability under federal or state
securities Laws or a claim of breach of fiduciary duty. There has not been, and
to Buyer’s Knowledge, there is not pending or contemplated, any

 

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investigation by the SEC involving Buyer or any current or former director or
officer of Buyer. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by Buyer or any
Subsidiary under the Securities Act or the Exchange Act.

6.17      Financial Statements.    The financial statements included in each SEC
Filing comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing (or to the extent corrected by a subsequent restatement) and
present fairly, in all material respects, the consolidated financial position of
Buyer as of the dates shown and its consolidated results of operations and cash
flows for the periods shown, and such financial statements have been prepared in
conformity with GAAP (except as may be disclosed therein or in the notes
thereto, and, in the case of quarterly financial statements, as permitted by
Form 10-Q under the Exchange Act). Except as set forth in the SEC Filings,
neither Buyer nor any of its Subsidiaries has incurred any Liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or could reasonably be expected to have a Material Adverse
Effect.

6.18      Insurance Coverage.    Buyer and each of its Subsidiaries maintains in
full force and effect insurance coverage that is customary for comparably
situated companies for the business being conducted and properties owned or
leased by Buyer and its Subsidiaries.

6.19      Compliance with Nasdaq Continued Listing Requirements.    Except as
disclosed in the SEC Filings, (a) Buyer is in compliance with applicable Nasdaq
continued listing requirements, (b) there are no proceedings pending or, to
Buyer’s Knowledge, threatened against Buyer relating to the continued listing of
the Buyer Common Stock on Nasdaq, and (c) Buyer has not received any currently
pending notice of the delisting of the Buyer Common Stock from Nasdaq other than
the notice of deficiency received by Buyer on January 2, 2013.

6.20      Brokers and Finders.    Except for fees and expenses of Roth Capital
Partners and of the Company’s legal counsel and independent auditors, no Person
will have, as a result of the transactions contemplated by this Agreement, any
valid right, interest or claim against or upon Buyer or any of its Subsidiaries
for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of Buyer.

6.21      Questionable Payments.    Neither Buyer nor any of its Subsidiaries
nor, to Buyer’s Knowledge, any of their respective current or former
shareholders, directors, officers, employees, agents or other Persons acting on
behalf of Buyer or any of its Subsidiaries, has on behalf of Buyer or any of its
Subsidiaries or in connection with their respective businesses: (a) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of Buyer or any of its Subsidiaries; or (e) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment of any nature.

6.22      Board Approval.    The board of directors of Buyer, by resolutions
duly adopted by unanimous vote at a meeting of all directors of Buyer duly
called and held and, as of the date hereof, not subsequently rescinded or
modified in any way, has, as of the date hereof (i) determined that this
Agreement and the transactions contemplated hereby, including the Acquisition
and the issuance of the Acquisition Shares to the Company Shareholders, are fair
to, and in the best interests of, Buyer and Buyer’s shareholders, (ii) directed
that the issuance of the Acquisition Shares to the Company Shareholders pursuant
to and in accordance with this Agreement be submitted to Buyer’s shareholders
for approval, and (iii) resolved to recommend that Buyer’s shareholders approve
the issuance of the

 

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Acquisition Shares to the Company Shareholders pursuant to and in accordance
with this Agreement (collectively, the “Buyer Board Recommendation”) and
directed that such matter be submitted for consideration of the shareholders of
Buyer at the Buyer Shareholders Meeting.

6.23      Proxy Statement.    The Proxy Statement will comply in all material
respects with the requirements of the Exchange Act and, on the date filed with
the SEC, on the date first published, sent or given to Buyer’s shareholders and
at the time of the Buyer Shareholder Meeting, the Proxy Statement will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by Buyer with
respect to any information provided in writing by or on behalf of the Company or
the Company Shareholders for inclusion in the Proxy Statement.

6.24      Internal Controls.    Buyer is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to Buyer.
Buyer and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Buyer has established disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the
Exchange Act) for Buyer and designed such disclosure controls and procedures to
ensure that material information relating to Buyer, including its Subsidiaries,
is made known to the certifying officers by others within those entities,
particularly during the period in which Buyer’s most recently filed periodic
report under the Exchange Act, as the case may be, is being prepared. Buyer’s
certifying officers have evaluated the effectiveness of Buyer’s controls and
procedures as of December 31, 2012 (such date, the “Evaluation Date”) and
concluded that such controls and procedures are effective to ensure that
material information relating to Buyer, including its Subsidiaries, is made
known to certifying officers in a timely, accurate and complete manner. Since
the Evaluation Date, there have been no significant changes in Buyer’s internal
controls (as such term is defined in Item 308 of Regulation S-K) or, to Buyer’s
Knowledge, in other factors that could significantly affect Buyer’s internal
controls. Buyer maintains and will continue to maintain a standard system of
accounting established and administered in accordance with GAAP and the
applicable requirements of the Exchange Act.

6.25      Investment Company.    Buyer is not required to be registered as, and
is not an Affiliate of, and immediately following the Closing will not be
required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

6.26      Compliance with Laws.    Buyer and each of its Subsidiaries is in
compliance in all material respects with all requirements imposed by Law,
regulation or rule, whether foreign, federal, state or local, that are
applicable to it, its operations, or its properties and assets, including
applicable requirements of the Foreign Corrupt Practices Act of 1977 (FCPA) (15
U.S.C. § 78dd-1, et seq.).

6.27      Disclosure.    No representation or warranty of Buyer or any of its
Subsidiaries contained in this Agreement and none of the statements contained in
any other document, certificate, report, financial statement or written
statement furnished to the Company by or on behalf of Buyer or any of its
Subsidiaries pursuant to this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to Buyer, in the case of
any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials

 

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are based upon good faith estimates and assumptions believed by Buyer to be
reasonable at the time made.

6.28      Buyer 401(k) Plan.    Subject to the delivery to Buyer of a currently
effective IRS determination letter with respect to the 401(k) Plan, and to the
extent necessary under the Buyer 401(k) Plan (as defined below) and Applicable
Law, Buyer shall adopt (or shall cause there to be adopted), effective as of the
Closing Date, resolutions amending (or directing the appropriate officers of
Buyer to amend) Buyer’s employee pension benefit plan intended to be qualified
under Section 401(a) of the Code that includes a cash or deferred arrangement
intended to qualify under Section 401(k) of the Code (the “Buyer 401(k) Plan”)
so as to permit such Buyer 401(k) Plan to accept rollover contributions
attributable to the termination of the 401(k) Plan contemplated by Section 7.10
of this Agreement, including any promissory notes presently representing
outstanding participant loans under such 401(k) Plan.

6.29      No Other Representations or Warranties.    Each of the Company and the
Company Shareholders hereby acknowledges and agrees that neither Buyer nor any
of its Subsidiaries has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Article 6.

ARTICLE 7

COMPANY COVENANTS

During the time period from the Agreement Date until the earlier to occur of
(a) the Closing or (b) the termination of this Agreement in accordance with the
provisions of Article 10, the Company and the Company Shareholders, as
applicable, covenant and agree with Buyer as follows:

7.1      Advice of Changes.    The Company shall promptly advise Buyer in
writing of (a) any material event occurring subsequent to the Agreement Date
that would render any representation or warranty of the Company contained in
Article 4 untrue or inaccurate such that the condition set forth in Section
9.2(a) would not be satisfied, (b) any breach of any covenant or obligation of
the Company pursuant to this Agreement or any Company Ancillary Agreement such
that the condition set forth in Section 9.2(b) would not be satisfied, (c) any
Material Adverse Change in the Company, or (d) any change, event, circumstance,
condition or effect that would reasonably be expected to result in a Material
Adverse Effect on the Company or cause any of the conditions set forth in
Section 9.2 not to be satisfied; provided, however, that the delivery of any
notice pursuant to this Section 7.1 shall not be deemed to amend or supplement
the Company Disclosure Letter and shall not any right of Buyer to claim a
failure of a condition to Closing set forth in Section 9.1 or 9.2, as
applicable, with respect to any matters disclosed pursuant to this Section 7.1.

7.2      Maintenance of Business.

(a)         The Company shall, and shall cause each of its Subsidiaries to, use
commercially reasonable efforts to carry on and preserve the Company Business
and its business relationships with customers, advertisers, suppliers, employees
and others with whom each Group Company has contractual relations. If the
Company or any of its Subsidiaries becomes aware of any material deterioration
in the relationship with any Significant Customer, Significant Supplier or
employee of the Company or such Subsidiary, the Company shall, and shall cause
the relevant Subsidiary to, promptly bring such information to Buyer’s attention
in writing and, if reasonably requested by Buyer, shall exert commercially
reasonable efforts to promptly restore the relationship.

(b)         The Company shall, and shall cause each of its Subsidiaries to, use
commercially reasonable efforts to assure that each Contract to which the
Company is a party that is entered into after the Agreement Date will not
require the procurement of any consent, waiver or novation or provide for

 

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any material change in the obligations of any party in connection with, or
terminate as a result of the consummation of, the Acquisition.

(c)         The Company shall, and shall cause each of its Subsidiaries to,
continue to collect accounts receivable and pay accounts payable with respect to
the Company Business in the Ordinary Course of Business.

7.3      Conduct of Business.    The Company shall, and shall cause each of its
Subsidiaries to, continue to conduct the Company Business in the Ordinary Course
of Business and the Company shall not, and shall cause each of its Subsidiaries
not to, without Buyer’s prior written consent:

(a)         declare, set aside or pay any cash or stock dividend or other
distribution (whether in cash, stock or property) in respect of its capital
stock, or redeem, repurchase or otherwise acquire any of its capital stock or
other securities, or pay or distribute any cash or property to any of its
shareholders or securityholders or make any other cash payment to any of its
shareholders or securityholders in their capacity as such;

(b)        merge, consolidate or reorganize with, acquire, or enter into any
other business combination with any corporation, partnership, limited liability
company or any other entity (other than Buyer or any of its Affiliates), acquire
any portion of the assets of any such entity, or form any Subsidiary, or enter
into any negotiations, discussions or agreement for such purpose;

(c)        amend its Charter Documents;

(d)        change any of its accounting methods or practices;

(e)        (i) agree to do any of the things described in the preceding
clauses (a)-(d), (ii) take or agree to take any action which would reasonably be
expected to make any of the Company’s representations or warranties contained in
this Agreement materially untrue or incorrect, or (iii) take or agree to take
any action which would reasonably be expected to prevent the Company from
performing or cause the Company not to perform one or more covenants required
hereunder to be performed by the Company.

7.4      Regulatory Approvals.    The Company shall promptly execute and file,
or join in the execution and filing of, any application, notification or other
document that may be necessary in order to obtain the authorization, approval or
consent of any Governmental Authority, whether federal, state, local or foreign,
which may be required in connection with the consummation of the Acquisition and
the other transactions contemplated by this Agreement or any Company Ancillary
Agreement. The Company shall make all filings required of it under any
applicable antitrust laws with respect to the transactions contemplated hereby
as promptly as reasonably practicable and shall comply as soon as reasonably
practicable and to the extent necessary with any formal or informal request
under any applicable antitrust laws for additional information, documents or
other materials received from any Governmental Authority acting pursuant to its
antitrust authority. The Company shall use commercially reasonable efforts to
obtain, and to cooperate with Buyer to promptly obtain, all such authorizations,
approvals and consents and shall pay any associated filing fees payable by the
Company with respect to such authorizations, approvals and consents. The Company
shall promptly inform Buyer of any communication between the Company and any
Governmental Authority regarding any of the transactions contemplated hereby.
The Company shall consult with and cooperate with Buyer in advance of any such
written or oral communication to any Governmental Authority. The Company shall
use commercially reasonable efforts to resolve questions or objections, if any,
of any Governmental Authority and to take such actions as may be required to
cause expiration of the waiting periods under the applicable antitrust laws.

 

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7.5      Necessary Consents.    The Company shall use commercially reasonable
efforts to obtain prior to the Closing such consents and authorizations of third
Parties, give notices to third parties and take such other actions as may be
necessary or appropriate in order to effect the consummation of the Acquisition
and the other transactions contemplated by this Agreement, to enable the Company
(or Buyer) to carry on the Company Business immediately after the Closing, and
to keep in effect and avoid the breach, violation of, termination of, or adverse
change to, any Contract to which the Company is party, including the consents,
authorizations, notices and actions which are listed on Schedule 7.5 of the
Company Disclosure Letter.

7.6      Litigation.    The Company shall notify Buyer in writing promptly after
learning of any material claim, action, suit, arbitration, mediation, proceeding
or investigation by or before any court, arbitrator or arbitration panel, board
or governmental agency, initiated by or against it, or known by the Company to
be pending or threatened against any Group Company or any of its officers,
directors, employees or shareholders in their capacity as such.

7.7      No Other Negotiations.

(a)      The Company and the Company Shareholders shall not, and shall not
authorize, encourage or permit any of its Subsidiaries or Company
Representatives to, directly or indirectly: (a) solicit, initiate, or knowingly
encourage, facilitate or induce the making, submission or announcement of any
inquiry, offer or proposal from any Person (other than Buyer) concerning any
Alternative Transaction; (b) furnish any nonpublic information regarding any
Group Company to any Person (other than Buyer and its agents and advisors) in
connection with or in response to any inquiry, offer or proposal for or
regarding any Alternative Transaction (other than to respond to such inquiry,
offer or proposal solely by indicating that the Company is subject to this
Section 7.7); (c) enter into, participate in, entertain, maintain or continue
any discussions or negotiations with any Person (other than Buyer and its agents
and advisors) with respect to any Alternative Transaction (other than to respond
to such inquiry, offer or proposal solely by indicating that the Company is
subject to this Section 7.7); (d) otherwise cooperate with, facilitate or
encourage any effort or attempt by any Person (other than Buyer and its agents
and advisors) to effect any Alternative Transaction; or (e) execute, enter into
or become bound by any letter of intent, memorandum of understanding, other
Contract or understanding between any Group Company and any Person (other than
Buyer) that is related to, provides for or concerns any Alternative Transaction.
If any Company Representative, whether in his or her capacity as such or in any
other capacity, takes any action that the Company is obligated pursuant to this
Section 7.7(a) to cause such Company Representative not to take, then the
Company shall be deemed for all purposes of this Agreement to have breached this
Section 7.7(a).

(b)      The Company or the Company Shareholders, as applicable, shall notify
Buyer within twenty-four (24) hours after receipt by the Company Shareholders or
any Group Company or by any of the Company Representatives of any inquiry, offer
or proposal that constitutes an Alternative Transaction, or any other notice
that any Person is considering making an Alternative Transaction, or any request
for nonpublic information relating to any Group Company or for access to any of
the properties, books or records of any Group Company by any Person or Persons
other than Buyer (which notice shall identify the Person or Persons making, or
considering making, such inquiry, offer or proposal) in connection with a
potential Alternative Transaction and shall keep Buyer fully informed of the
status and details of any such inquiry, offer or proposal and any correspondence
or communications related thereto and shall provide to Buyer a correct and
complete copy of such inquiry, offer or proposal and any amendments,
correspondence and communications related thereto, if it is in writing, or a
written summary of the material terms thereof, if it is not in writing. The
Company shall provide Buyer with forty-eight (48) hours prior notice (or such
lesser prior notice as is initially provided to the Board) of any meeting of the
Board, at which the Board is reasonably expected to discuss any Alternative
Transaction. The Company

 

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shall, and shall cause each of its Subsidiaries and the Company Representatives
to, immediately cease and cause to be terminated any and all existing
activities, discussions and negotiations with any Persons conducted heretofore
with respect to an Alternative Transaction.

7.8      Access to Information.    Subject to Applicable Law and reasonable
notice, the Company shall allow Buyer and its agents and advisors access at
reasonable times to the files, books, records, technology, Contracts, personnel
and offices of any Group Company, including any and all information relating to
the Taxes, Contracts, Liabilities, financial condition and real, personal and
intangible property of any Group Company. The Company shall cause its
accountants to cooperate with Buyer and Buyer’s agents and advisors in making
available all financial information reasonably requested by Buyer and its agents
and advisors, including the right to examine all working papers pertaining to
all financial statements prepared or audited by such accountants.

7.9      Satisfaction of Conditions Precedent.    The Company shall, and shall
cause each other Group Company to, use commercially reasonable efforts to
satisfy or cause to be satisfied all the conditions precedent set forth in
Article 9, and the Company shall use commercially reasonable efforts to cause
the Acquisition and the other transactions contemplated by this Agreement to be
consummated in accordance with the terms of this Agreement.

7.10      Company Benefit Arrangements.    The Board or the board of directors
of Tandberg Data Corporation, a Delaware corporation (“TD Corp”), as applicable,
shall adopt (or shall cause there to be adopted) no later than the day before
the Closing Date resolutions terminating each Company Benefit Arrangement
intended to be qualified under Section 401(a) of the Code that includes a cash
or deferred arrangement intended to qualify under Section 401(k) of the Code
(the “401(k) Plan”), such termination to be effective no later than the day
before the Closing Date, and authorizing the appropriate officers of TD Corp to
make such amendments to the 401(k) Plan that is sufficient to assure that the
tax-qualified status of such plan shall be maintained at the time of its
termination. The Company shall provide a draft of such resolutions to Buyer
prior to their adoption and address, to the reasonable satisfaction of Buyer,
any comments Buyer may have as to such resolutions. Immediately prior to such
termination, the Company will cause TD Corp to make all necessary payments to
the trust for the 401(k) Plan to fund the contributions: (a) necessary or
required to maintain the tax-qualified status of the 401(k) Plan; (b) for
elective deferrals made pursuant to the 401(k) Plan for the period through and
including the time of termination; and (c) for all employer contributions (if
any) for the period through and including the time of termination. All
participants and former participants in such 401(k) Plan (and in any other
Company Benefit Arrangement that is an “employee pension benefit plan” as
defined in Section 3(2) of ERISA) shall become fully vested in their account
balances under the 401(k) Plan (and any other employee pension benefit plan) to
the extent required by law.

7.11      Repayment of Debt.    On or prior to the Closing Date, the Company
shall (i) convert, or cause to be converted, the Debt into Company Shares;
provided, that the Company shall repay in full all of the Debt set forth on
Schedule 7.11, which shall not be converted into Company Shares; and (ii) obtain
executed UCC-2 or UCC-3 termination statements (or any other applicable
termination statement) executed by each Person holding a security interest in
any assets of any Group Company as of the Closing Date terminating any and all
such security interests and evidence reasonably satisfactory to Buyer that all
Encumbrances on assets of any Group Company shall have been released prior to,
or shall be released simultaneously with, the Closing.

7.12      Notices to Company Shareholders and Employees.

(a) The Company shall timely provide to the Company Shareholders all advance
notices required to be given to such Company Shareholders in connection with
this Agreement, the Acquisition

 

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and the transactions contemplated by this Agreement under the Charter Documents
of the Company or other applicable Contracts and under Applicable Law.

(b)      The Company shall give all notices and other information required to be
given by the Company to the employees of the Company, any collective bargaining
unit or any works council representing any group of employees of the Company,
and any applicable Governmental Authority under the WARN Act, the National Labor
Relations Act, as amended, the Code, COBRA and other Applicable Law in
connection with the transactions contemplated by this Agreement or other
applicable Contracts.

7.13      Closing Certificates.    The Company shall prepare and deliver to
Buyer a draft Closing Transaction Fees Certificate not later than five
(5) Business Days prior to the scheduled Closing Date. The Company shall provide
to Buyer copies of the documents or instruments evidencing the amounts set forth
on any such drafts and the Company shall consider in good faith any comments or
proposed changes to such documents and certificates that may be suggested by
Buyer in the period following delivery thereof but prior to the Closing.

7.14      Cooperation.    Each of the Group Companies and the Company
Shareholders shall use commercially reasonable efforts to, and shall cause each
other Group Company (including internal and external legal and accounting
representatives and outside auditors) to use commercially reasonable efforts to,
provide all such reasonable assistance and cooperation in connection with
Buyer’s efforts to consummate the transactions contemplated hereby as may be
reasonably requested by Buyer, including (i) furnishing Buyer with such
pertinent and customary information, regarding the Group Companies as may be
reasonably requested by Buyer, (ii) furnishing Buyer financial statements and
pro forma financial statements of the Group Companies that are reasonably
requested by Buyer, (iii) furnishing any information reasonably requested by
Buyer in connection with any filings under the Securities Act or the Exchange
Act in connection with the transactions contemplated by this Agreement and
(iv) causing the Group Companies’ auditors to confer with Buyer’s auditors
regarding the financial statements of any of them. In addition the Company
hereby consents to the use and disclosure of all information contained in the
Company’s financial statements and other financial or other information
regarding the Company in any report or registration statement required to be
filed by Buyer under the Securities Act or the Exchange Act as may be deemed
necessary or appropriate by Buyer in connection with the transactions
contemplated hereby. The Company also hereby agrees that it will provide (or
will cause the other Group Companies to provide, as needed) and will not
unreasonably withhold or delay the issuance of those representation letters as
required under GAAP or other standards in connection with the issuance by
Buyer’s auditors of any pro forma or other financial statements or as may be
otherwise necessary in connection with the filing of any document with the SEC
under the Securities Act or the Exchange Act. If requested by Buyer, the Company
shall (and shall cause each other applicable Group Company to) use its
reasonable best efforts to cause its auditors to consent to the inclusion of its
financial statements in any registration statement or other filing required to
be filed under the Securities Act or the Exchange Act by the Company. The
Company shall use commercially reasonable efforts to, and to cause the other
Group Companies, internal accountants and auditors to, support Buyer and its
auditors and legal advisors with respect to information reasonably necessary to
(i) respond to any inquiry of the SEC in connection with any filing by Buyer
under the Securities Act or the Exchange Act and (ii) assist investor in
ensuring that the Company’s consolidated financial statements comply with the
provisions of Regulation S-X, or any applicable accounting standards or rules
which have been introduced or become effective after the delivery by the Company
of its financial statements.

7.15      Additional Financial Statements.

(a)     The Company, at its sole cost and expense, and commencing with the month
ended October 31, 2013, will prepare and furnish to Buyer as soon as they become
available, but in any event,

 

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not later than twenty-five (25) calendar days after the end of the month of
October 2013, and not later than fifteen (15) Business Days after the end of
each month thereafter, (i) an unaudited balance sheet and an unaudited income
statement and an unaudited statement of cash flows for the Company for each full
monthly period prior to the Closing and for the elapsed portion of the Company’s
fiscal year and (ii) all other material or formal monthly reports delivered to
management of the Company in the Ordinary Course of Business. The Company will
prepare each of the additional unaudited financial statements on a basis
consistent with the Company Financial Statements.

(b)    The Company, at its sole cost and expense, will prepare and furnish to
Buyer as soon as they become available, but in any event, not later than
November 20, 2013, the Company’s unaudited consolidated statements of
operations, changes in shareholders’ equity and cash flows for the nine
(9) months ended September 30, 2013. The Company will prepare such unaudited
financial statements on a basis consistent with the Company Financial
Statements.

7.16      Nasdaq Listing.    The Company and FBC shall use their commercially
reasonable efforts to assist Buyer in causing the Buyer Common Stock to be
approved for listing on The Nasdaq Capital Market following the Closing and in
causing the Acquisition Shares to be listed on The Nasdaq Capital Market
following the Closing.

ARTICLE 8

BUYER COVENANTS

During the time period from the Agreement Date until the earlier to occur of
(a) the Closing or (b) the termination of this Agreement in accordance with the
provisions of Article 10, Buyer covenants and agrees with the Company as
follows:

8.1      Advice of Changes.    Buyer shall promptly advise the Company in
writing of (a) any event occurring subsequent to the Agreement Date that would
render any representation or warranty of Buyer contained in Article 6 untrue or
inaccurate such that the condition set forth in Section 9.3(a) would not be
satisfied, or (b) any breach of any covenant or obligation of Buyer pursuant to
this Agreement or any Buyer Ancillary Agreement such that the condition set
forth in Section 9.3(b) would not be satisfied.

8.2      Regulatory Approvals.    Buyer and the Company shall promptly execute
and file, or join in the execution and filing of, any application, notification
or other document that may be necessary in order to obtain the authorization,
approval or consent of any Governmental Authority, whether foreign, federal,
state, local or municipal, which may be required in connection with the
consummation of the Acquisition and the other transactions contemplated by this
Agreement or any Buyer Ancillary Agreement. Buyer shall make all filings
required of it under applicable antitrust laws with respect to the transactions
contemplated hereby as promptly as reasonably practicable and shall comply as
soon as reasonably practicable and to the extent necessary with any formal or
informal request under applicable antitrust laws for additional information,
documents or other materials received from the Governmental Authority acting
pursuant to its antitrust authority. Each Party shall use commercially
reasonable efforts to obtain all such authorizations, approvals and consents,
and Buyer and the Company shall equally split any associated filing fees payable
by either of them with respect to such authorizations, approvals and consents.
Each Party shall promptly inform the other Parties of any communication between
the initiating Party and any Governmental Authority regarding any of the
transactions contemplated hereby. Each Party shall use commercially reasonable
efforts to resolve questions or objections, if any, of any Governmental
Authority. Notwithstanding anything in this Agreement to the contrary, if any
administrative or judicial action or proceeding is instituted (or threatened in
writing to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Applicable Law, it is expressly understood and
agreed that neither Buyer nor any of its Subsidiaries or Affiliates shall be
under any obligation to: (a) litigate or contest any administrative or judicial
action or proceeding or any decree,

 

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judgment, injunction or other order, whether temporary, preliminary or
permanent; or (b) make proposals, execute or carry out agreements or submit to
orders providing for (i) the sale, divestiture or other disposition or holding
separate (through the establishment of a trust or otherwise) of any assets or
categories of assets of Buyer, any of its Subsidiaries or Affiliates (including
the Company) or the Company, or the holding separate of the Company Shares or
(ii) the imposition of any limitation on the ability of Buyer or any of its
Subsidiaries or Affiliates to freely conduct their business or own such assets
or to acquire, hold or exercise full rights of ownership of the Company Shares.

8.3      No Other Negotiations.

(a)         Buyer shall not, and shall not authorize, encourage or permit any of
its Subsidiaries or any of their respective officers, directors, employees,
shareholders, Affiliates, agents, advisors (including any attorneys, financial
advisors, investment bankers or accountants) or other representatives
(collectively, the “Buyer Representatives”) to, directly or indirectly:
(a) solicit, initiate, or knowingly encourage, facilitate or induce the making,
submission or announcement of any inquiry, offer or proposal from any Person
(other than Cyrus, the Company Shareholders or the Company) concerning any
Alternative Buyer Transaction; (b) furnish any nonpublic information regarding
Buyer to any Person (other than Buyer and its agents and advisors) in connection
with or in response to any inquiry, offer or proposal for or regarding any
Alternative Buyer Transaction (other than to respond to such inquiry, offer or
proposal solely by indicating that Buyer is subject to this Section 8.3);
(c) enter into, participate in, entertain, maintain or continue any discussions
or negotiations with any Person (other than Cyrus, the Company Shareholders or
the Company and their agents and advisors) with respect to any Alternative Buyer
Transaction (other than to respond to such inquiry, offer or proposal solely by
indicating that Buyer is subject to this Section 8.3); (d) otherwise cooperate
with, facilitate or encourage any effort or attempt by any Person (other than
Cyrus, the Company Shareholders or the Company and their agents and advisors) to
effect any Alternative Buyer Transaction; or (e) execute, enter into or become
bound by any letter of intent, memorandum of understanding, other Contract or
understanding between Buyer and any Person (other than Cyrus, the Company
Shareholders or the Company) that is related to, provides for or concerns any
Alternative Buyer Transaction. If any Buyer Representative, whether in his or
her capacity as such or in any other capacity, takes any action that Buyer is
obligated pursuant to this Section 8.3(a) to cause such Buyer Representative not
to take, then Buyer shall be deemed for all purposes of this Agreement to have
breached this Section 8.3(a). Buyer shall, and shall cause each of its
Subsidiaries and the Buyer Representatives to, immediately cease and cause to be
terminated any and all existing activities, discussions and negotiations with
any Persons conducted heretofore with respect to an Alternative Buyer
Transaction.

(b)        Notwithstanding the provisions of Sections 8.3(a), at any time prior
to the Closing, if the board of directors of Buyer receives a bona fide written
proposal relating to an Alternative Buyer Transaction (a “Takeover Proposal”)
after the date of this Agreement that was not solicited by Buyer or the Buyer
Representatives and did not otherwise result from a breach or deemed breach of
Sections 8.3(a) and a majority of the disinterested directors of the Company
Board reasonably determines in its good faith judgment, after consultation with
and based upon the advice from outside legal counsel, that it is required to
take the actions specified in the following clauses (x), (y) and/or (z) of this
sentence with respect to such Takeover Proposal in order to avoid a breach of
its fiduciary duties to the shareholders of Buyer under Applicable Law, then
subject to providing written notice of its decision to take such action to the
Company, the board of directors of Buyer may (x) furnish information with
respect to Buyer to the Person making such Takeover Proposal and its
representatives and advisors, (y) participate in discussions or negotiations
with such Person and its representatives and advisors regarding any Takeover
Proposal and (z) consummate an Alternative Buyer Transaction with respect to
such Takeover Proposal.

 

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(c)         Except as set forth in this Section 8.3, neither the board of
directors of Buyer nor any committee thereof shall:

(i)        withhold, withdraw, qualify or modify, in a manner adverse to the
Company, the Buyer Board Recommendation with respect to the issuance of the
Acquisition Shares, fail to include the Buyer Board Recommendation in the Proxy
Statement, or adopt, approve or recommend or propose to adopt, approve or
recommend (publicly or otherwise) an Alternative Buyer Transaction; or

(ii)         make any recommendation or public statement in connection with a
tender offer or exchange offer, other than a recommendation against such offer
or a “stop, look and listen” communication pursuant to Rule 14d-9(f) under the
Exchange Act (it being understood that the board of directors of Buyer may
refrain from taking a position with respect to an Alternative Buyer Transaction
until the close of business on the tenth (10th) Business Day after the
commencement of a tender offer or exchange offer in connection with such
Alternative Buyer Transaction pursuant to Rule 14d-9(f) under the Exchange Act
without such action being considered an adverse modification of the Buyer Board
Recommendation) (each action set forth in clauses (i) and (ii) of this Section
8.3(c), a “Change of Recommendation”).

(d)        Notwithstanding any other provisions of this Section 8.3 to the
contrary, at any time prior to the time the Buyer Shareholder Approval is
obtained, if the board of directors of Buyer has received a proposal relating to
an Alternative Buyer Transaction (that has not been withdrawn) that the board of
directors of Buyer determines constitutes a Superior Proposal, the board of
directors of Buyer may effect a Change of Recommendation or terminate this
Agreement pursuant to Section 10.2(d)(iii) if, and only if, prior to the board
of directors of Buyer taking any such action:

(i)         Buyer shall have (A) provided to FBC a written notice, which notice
shall (1) state that Buyer has received a proposal relating to an Alternative
Buyer Transaction which the board of directors of the Company has determined is
a Superior Proposal and that the board of directors of Buyer intends to take
such action and (2) include the identity of the Person making such Superior
Proposal, the most current written draft agreement relating to the transaction
that constitutes such Superior Proposal and all related transaction agreements,
(B) provided such notice to FBC at least four (4) Business Days prior to taking
any such action (it being understood that any material amendment to the terms of
such Superior Proposal shall require a new notice and a new two (2) Business Day
period) and (C) if requested by FBC, negotiated in good faith with FBC during
such four (4) Business Day period regarding revisions to this Agreement which
would permit Buyer not to effect a Change of Recommendation or take action
pursuant to this Section 8.3 in response to such a Superior Proposal; and

(ii)         if FBC shall have delivered to Buyer, within four (4) Business Days
after receipt by FBC of the notice described in Section 8.3(d)(i), a written
proposal capable of being accepted to amend the terms contemplated by this
Agreement, the board of directors of Buyer shall have in good faith determined
(after consultation with outside legal counsel), after considering the terms of
such proposal by FBC, that the proposal relating to an Alternative Buyer
Transaction continues to constitute a Superior Proposal.

(e)         The board of directors of Buyer may also effect a Change of
Recommendation at any time prior to the time the Buyer Shareholder Approval is
obtained in the absence of a Superior Proposal if an Intervening Event shall
have occurred and be continuing and prior to effecting such Change of
Recommendation the board of directors of Buyer in good faith determines (after
consultation with its outside legal counsel) that, in light of such Intervening
Event, the failure to take such action would reasonably be expected to result in
a breach of the fiduciary duties of the board of directors of Buyer under
Applicable Law.

 

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(f)        Nothing contained in this Section 8.3 or elsewhere in this Agreement
shall prohibit Buyer or its board of directors from complying with Rule 14d-9,
Rule 14e-2 or Item 1012 of Regulation M-A under the Exchange Act, or from making
any disclosures to the holders of Buyer Common Stock if the board of directors
of Buyer in good faith determines (after consultation with its outside legal
counsel) that the failure to make such disclosure would reasonably be expected
to result in a breach of its fiduciary duties under applicable Law (including
any “stop, look and listen” communication pursuant to Rule 14d-9(f) under the
Exchange Act); provided, however, that any such disclosure shall be deemed to be
a Change of Recommendation unless the board of directors of Buyer expressly
reaffirms its recommendation to Buyer’s shareholders to vote in favor of the
adoption of this Agreement in such disclosure.

8.4        Shareholders Meeting; Preparation of Proxy Materials.

(a)        As promptly as reasonably practicable following the date of this
Agreement, Buyer shall (i) prepare and file with the SEC a preliminary proxy
statement (as amended or supplemented from time to time, the “Proxy Statement”)
with respect to the Buyer Shareholders Meeting; and (ii) set a record date for
the Buyer Shareholders Meeting. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon the Proxy Statement prior to
the filing thereof with the SEC and Buyer shall consider in good faith any
comments reasonably proposed by the Company and it counsel. The Company and the
Company Shareholders shall furnish to Buyer all information regarding the
Company and its Affiliates that may be required (pursuant to the Exchange Act
and other applicable Laws) to be set forth in the Proxy Statement. Buyer shall
use its reasonable best efforts to have the Proxy Statement cleared by the SEC
as promptly as practicable after the Proxy Statement is filed with the SEC.
Buyer shall (to the extent required by applicable federal securities Laws):
(x) promptly correct any information provided by it for use in the Proxy
Statement if and to the extent that such information shall have become false or
misleading in any material respect and (y) take all steps necessary to cause the
Proxy Statement as so corrected to be filed with the SEC and to the extent
required by Law, disseminated to the shareholders of Buyer. Buyer shall promptly
provide the Company and its counsel with a copy of any comments received by
Buyer from the SEC or its staff with respect to the Proxy Statement. The Company
and its counsel shall be given a reasonable opportunity to review and comment
upon the response to any comment letter and any amendment or supplement to the
Proxy Statement prior to the filing thereof with the SEC, and Buyer shall
consider in good faith any comments reasonably proposed by the Company and its
counsel.

(b)        As promptly as reasonably practicable after the SEC or its staff
advises that it has no further comments on the Proxy Statement or that Buyer may
commence mailing the Proxy Statement, Buyer shall (subject to applicable Laws,
rules and regulations of Nasdaq and the requirements of Buyer’s Charter
Documents) take all action reasonably necessary to convene the Buyer
Shareholders Meeting and to cause the Proxy Statement to be mailed to Buyer’s
shareholders. Notwithstanding anything to the contrary contained in this
Agreement, Buyer may delay convening, postpone or adjourn the Buyer Shareholders
Meeting if Buyer determines in good faith that the delay, postponement or
adjournment of Buyer Shareholders Meeting is necessary or appropriate in order
to obtain sufficient votes to obtain the Buyer Shareholder Approval or, with
respect to disclosure matters, is required by Buyer to comply with Applicable
Law. Without limiting the generality of the foregoing, Buyer agrees that its
obligations pursuant to the first sentence of this Section 8.4(b) shall not be
affected by the commencement, public proposal, public disclosure or
communication to Buyer or any other Person of any Alternative Buyer Transaction
or the occurrence of any Change of Recommendation.

(c)        Subject to Section 8.3 and Section 8.4, (i) the board of directors of
Buyer shall include the Buyer Board Recommendation in the Proxy Statement, and
(ii) Buyer shall use reasonable best efforts to obtain the Buyer Shareholder
Approval.

 

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8.5      Board of Directors of Buyer. Within three (3) Business Days after the
Closing, Buyer shall cause the size of the board of directors of Buyer to be set
at seven (7) directors. In connection with the increase of the size of the board
of directors of Buyer from five (5) directors to seven (7) directors, Buyer
shall cause the board of directors of Buyer to appoint two (2) directors
approved by the Company Shareholders to fill the additional director positions.
Such directors shall serve for the same term as the other directors, or until
their earlier death, resignation or removal in accordance with the Charter
Documents of Buyer.

8.6      Conduct of Business. Buyer shall, and shall cause each of its
Subsidiaries to, continue to conduct its business in the Ordinary Course of
Business and Buyer shall not, and shall cause each of its Subsidiaries not to,
without the Company’s prior written consent:

(a)      declare, set aside or pay any cash or stock dividend or other
distribution (whether in cash, stock or property) in respect of its capital
stock, or redeem, repurchase or otherwise acquire any of its capital stock or
other securities, or pay or distribute any cash or property to any of its
shareholders or securityholders or make any other cash payment to any of its
shareholders or securityholders in their capacity as such;

(b)      merge, consolidate or reorganize with, acquire, or enter into any other
business combination with any corporation, partnership, limited liability
company or any other entity (other than the Company or any of its Affiliates),
acquire any portion of the assets of any such entity, or form any Subsidiary, or
enter into any negotiations, discussions or agreement for such purpose;

(c)      amend its Charter Documents;

(d)       change any of its accounting methods or practices (which, for the
avoidance of doubt, shall not include any change to Buyer’s fiscal year or any
fiscal month);

(e)      (i) agree to do any of the things described in the preceding
clauses (a)-(d), (ii) take or agree to take any action which would reasonably be
expected to make any of Buyer’s representations or warranties contained in this
Agreement materially untrue or incorrect, or (iii) take or agree to take any
action which would reasonably be expected to prevent Buyer from performing or
cause Buyer not to perform one or more covenants required hereunder to be
performed by Buyer.

8.7      Satisfaction of Conditions Precedent.    Buyer shall use commercially
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent set forth in Article 9, and Buyer shall use its commercially
reasonable efforts to cause the Acquisition and the other transactions
contemplated by this Agreement to be consummated in accordance with the terms of
this Agreement.

8.8      Litigation.    Buyer shall notify the Company Shareholders in writing
promptly after learning of any material claim, action, suit, arbitration,
mediation, proceeding or investigation by or before any court, arbitrator or
arbitration panel, board or governmental agency, initiated by or against it, or
known by the Buyer to be pending or threatened against Buyer or any of its
Subsidiaries or any of its officers, directors, employees or shareholders in
their capacity as such.

8.9      Rights Plan.    Buyer shall amend or waive the provisions of the Rights
Plan to the extent reasonably necessary to accommodate this Agreement and the
transactions contemplated hereby, including the issuance of the Acquisition
Shares, but not with respect to any Alternative Buyer Transaction.

 

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8.10      Nasdaq Listing.    Buyer shall use its commercially reasonable efforts
to cause the Buyer Common Stock to be approved for listing on The Nasdaq Capital
Market following the Closing, and to cause the Acquisition Shares to be listed
on The Nasdaq Capital Market following the Closing.

8.11      Evidence of Transfer of Company Shares.    After the Closing, Buyer
shall cause the Company to provide to the Company Shareholders evidence that the
transfer of the Company Shares to Buyer has been registered and filed with the
Luxembourg Register of Commerce and Companies.

ARTICLE 9

CONDITIONS TO CLOSING OF ACQUISITION

9.1      Conditions to Each Party’s Obligation to Effect the Acquisition.    The
respective obligations of each Party to this Agreement to effect the Acquisition
shall be subject to the satisfaction prior to the Closing Date of the following
conditions:

(a)      Governmental Approvals.    All authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Authority shall have been filed, occurred or been
obtained, and there shall have been taken all such other actions by any
Governmental Authority or other regulatory authority having jurisdiction over
the Parties and the actions herein proposed to be taken, as may be required to
consummate the Acquisition and the transactions contemplated hereby.

(b)      No Injunctions or Restraints; Illegality.    No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory action, restraint or
prohibition preventing or challenging the consummation of the Acquisition or
limiting or restricting the conduct or operation of the business of any Group
Company by Buyer after the Acquisition shall have been issued, nor shall any
proceeding brought by an administrative agency or commission or other
Governmental Authority or other third party, seeking any of the foregoing be
pending; nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the Acquisition
which makes the consummation of the Acquisition illegal.

9.2      Additional Conditions to Obligations of Buyer.    The obligations of
Buyer to effect the Acquisition are subject to the satisfaction of each of the
following conditions, any of which may be waived in writing exclusively by
Buyer:

(a)      Representations and Warranties.    (i)  The representations and
warranties of the Company set forth in this Agreement that are qualified by
materiality or Material Adverse Effect shall be true and correct in all
respects, and the representations and warranties of the Company set forth in
this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and (except to
the extent such representations speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, and Buyer shall have received
a certificate of the Company to such effect, and (ii) all representations and
warranties of the Company Shareholders set forth in this Agreement shall be true
and correct in all material respects, in each case as of the date of this
Agreement and (except to the extent such representations speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date.

(b)      Performance of Obligations of the Company.    The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date; and Buyer shall have
received a certificate of the Company to such effect.

 

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(c)      No Material Adverse Effect.    From and after the Agreement Date, there
shall not have occurred any event and no circumstance shall exist which, alone
or together with any one or more other events or circumstances has had, is
having or would reasonably be expected to have a Material Adverse Effect.

(d)      Consulting Agreements.    Each of the Persons set forth in Schedule
9.2(d) shall have entered into and delivered to Buyer a Consulting Agreement in
a form reasonably acceptable to Buyer.

(e)      Non-Solicitation Agreements.    Each of the employees set forth in
Schedule 9.2(e) shall have entered into and delivered to Buyer a
Non-Solicitation Agreement in a form reasonably acceptable to Buyer.

(f)      Registration Rights Agreement.    FBC shall have executed and delivered
the Registration Rights Agreement.

(g)      Voting Agreement. FBC shall have executed and delivered the Voting
Agreement.

(h)      Consents.    Buyer shall have received duly executed copies of all
third-party consents, approvals, assignments, notices, waivers, authorizations
or other certificates set forth in Schedule 9.2(h).

(i)      Termination, Modification or Satisfaction of Company Shareholder
Documents and Rights.    Each of the agreements identified on Schedule 9.2(i)
shall have been terminated, effective as of the Closing, in accordance with
their respective terms, and the Parties to the agreements identified on such
Schedule 9.2(i) shall have waived all of their respective rights thereunder,
effective as of, and contingent upon, the Closing.

(j)      Resignations of Directors and Officers.    Except as set forth on
Schedule IV, the persons holding the positions of a director or officer of each
Group Company, including the Company, in office immediately prior to the
Closing, shall have resigned from such positions in writing effective as of the
Closing (for the avoidance of doubt, the persons set forth on Schedule IV shall
not be required to resign the positions held by such persons for the applicable
Group Companies as set forth on Schedule IV).

(k)      Registered Office.    The registered office of the Company shall have
been transferred effective as of the Closing, or the transfer of the Company
Shares to Buyer and the change of control of the Company resulting therefrom
shall have been accepted by the trust company with which the office of the
Company is registered in Luxembourg.

(l)      Closing Transaction Fees Certificate.    Buyer shall have received the
Closing Transaction Fees Certificate from the Company, provided, however, that
such receipt shall not be deemed to be an agreement by Buyer that the Closing
Transaction Fees Certificate is accurate and shall not diminish Buyer’s remedies
hereunder if the Closing Transaction Fees Certificate is not accurate.

(m)      Good Standing Certificates.    Each Group Company shall have delivered
to Buyer a certificate of good standing or other applicable certificates or
documents from such Group Company’s jurisdiction of incorporation or formation
(e.g., a certificate from the Luxembourg Register of Commerce and Companies for
the Company) and each state or jurisdiction in which such Group Company is
qualified to do business as a foreign corporation, to the extent provided by any
such jurisdiction, certifying as of a date no more than seven (7) Business Days
prior to the Closing Date that such Group Company is in good standing and, to
the extent provided by any such jurisdiction, that all applicable Taxes and fees
of such Group Company through such certification date have been paid.

 

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(n)      Termination of Company Benefit Arrangements.    The Company shall have
delivered to Buyer (i) a true, correct and complete copy of resolutions adopted
by the Board and the board of directors of TD Corp, certified by the Secretary
of the Company, authorizing the termination of the 401(k) Plan, and terminating
the 401(k) Plan, respectively, and authorizing the appropriate officers of TD
Corp to make such amendments to the 401(k) Plan that is sufficient to assure
compliance with all applicable requirements of the Code and regulations
thereunder so that the tax-qualified status of the 401(k) Plan shall be
maintained at the time of its termination.

(o)      Repayment of Debt.    Buyer shall have received evidence reasonably
satisfactory to it that all of the Debt converted or to be converted into
Company Shares shall have been converted into Company Shares. Buyer shall have
received evidence reasonably satisfactory to it that all of the Debt not
converted or to be converted into Company Shares shall have been repaid in full.
Buyer shall have received evidence reasonably satisfactory to Buyer that all
Encumbrances on assets of any Group Company shall have been released prior to,
or shall be released simultaneously with, the Closing.

(p)      Termination of Agreements.    The agreements set forth on
Schedule 9.2(p) shall have been terminated to the satisfaction of Buyer.

9.3      Additional Conditions to Obligations of the Company
Shareholders.    The obligation of the Company Shareholders to effect the
Acquisition is subject to the satisfaction of each of the following conditions,
any of which may be waived, in writing, exclusively by the Company Shareholders:

(a)      Representations and Warranties.    The representations and warranties
of Buyer set forth in this Agreement that are qualified by materiality or
Material Adverse Effect shall be true and correct in all respects, and the
representations and warranties of Buyer set forth in this Agreement that are not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement and (except to the extent such representations
speak as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date; and the Company shall have received a certificate signed on
behalf of Buyer by an authorized officer or director of Buyer to such effect.

(b)      Performance of Obligations of Buyer.    Buyer shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date; and the Company Shareholders shall
have received a certificate signed on behalf of Buyer by an authorized officer
or director of Buyer to such effect.

(c)      Registration Rights Agreement.    Buyer shall have executed and
delivered the Registration Rights Agreement.

(d)      Voting Agreement.    Buyer shall have executed and delivered the Voting
Agreement.

(e)      No Material Adverse Effect.    From and after the Agreement Date, there
shall not have occurred any event and no circumstance shall exist which, alone
or together with any one or more other events or circumstances has had, is
having or would reasonably be expected to have a Material Adverse Effect.

ARTICLE 10

TERMINATION OF AGREEMENT

10.1      Termination by Mutual Consent.    This Agreement may be terminated at
any time prior to the Closing by the mutual written consent of Buyer and FBC.

 

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10.2      Unilateral Termination.

(a)        Either Buyer or FBC, by giving written notice to the other Parties,
may terminate this Agreement if a court of competent jurisdiction or other
Governmental Authority shall have issued a final judgment or taken any action
(and the appeal of such judgment or action has been denied) having the effect of
permanently restraining or enjoining or otherwise prohibiting the Acquisition or
any other material transaction contemplated by this Agreement.

(b)        Either Buyer or FBC, by giving written notice to the other Parties,
may terminate this Agreement if the Acquisition shall not have been consummated
by midnight California time on February 28, 2014; provided, however, that the
right to terminate this Agreement pursuant to this Section 10.2(b) shall not be
available to any Party whose breach of a representation or warranty or covenant
made under this Agreement by such Party results in the failure of any condition
set forth in Article 9 to be fulfilled or satisfied on or before such date.

(c)        FBC, by giving written notice to the other Parties, may terminate
this Agreement at any time prior to the Closing if (i) Buyer has committed a
breach of (A) any of the representations and warranties under Article 6, or
(B) any of its covenants under or Article 8, and (x) has not cured such breach
within ten (10) Business Days after the Party seeking to terminate this
Agreement has given the other Party written notice of such breach and its
intention to terminate this Agreement pursuant to this Section 10.2(c)
(provided, however, that no such cure period shall be available or applicable to
any such breach which by its nature cannot be cured) and (y) if not cured on or
prior to the Closing Date, such breach would result in the failure of any of the
conditions set forth in Article 9 to be fulfilled or satisfied; provided,
however, that the right to terminate this Agreement under this Section 10.2(c)
shall not be available to FBC if the Company or any Company Shareholder is at
that time in material breach of this Agreement, or (ii) any event has occurred
or any circumstance exists which, alone or together with any one or more other
events or circumstances has had, is having or would reasonably be expected to
have a Material Adverse Effect on Buyer.

(d)        Buyer, by giving written notice to the Company and the Company
Shareholders, may terminate this Agreement at any time prior to the Closing if
(i) if the Company has committed a breach of (A) any of the representations and
warranties under Article 4, or (B) any of its covenants under or Article 7, and
(x) has not cured such breach within ten (10) Business Days after the Party
seeking to terminate this Agreement has given the other Party written notice of
such breach and its intention to terminate this Agreement pursuant to this
Section 10.2(d)(i) (provided, however, that no such cure period shall be
available or applicable to any such breach which by its nature cannot be cured)
and (y) if not cured on or prior to the Closing Date, such breach would result
in the failure of any of the conditions set forth in Article 9 to be fulfilled
or satisfied; provided, however, that the right to terminate this Agreement
under this Section 10.2(d)(i) shall not be available to Buyer if Buyer is at
that time in material breach of this Agreement, (ii) any Company Shareholder has
committed a material breach of any of such Company Shareholder’s representations
and warranties under Article 5, (iii) Buyer elects to consummate an Alternative
Buyer Transaction pursuant to any Takeover Proposal or (iv) any event has
occurred or any circumstance exists which, alone or together with any one or
more other events or circumstances has had, is having or would reasonably be
expected to have a Material Adverse Effect.

(e)        Either Buyer or FBC, by giving written notice to the other Parties,
may terminate this Agreement at any time prior to the Effective Time if the
Buyer Shareholders Meeting is convened and the Buyer Shareholder Approval is not
obtained.

10.3      Effect of Termination.

 

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(a)        In the event of termination of this Agreement as provided in Section
10.2, this Agreement shall forthwith become void and there shall be no Liability
or obligation on the part of Buyer, the Company Shareholders or the Company or
their respective officers, directors, shareholders or Affiliates; provided,
however, that (i) the provisions of this Section 10.3 and Article 11 shall
remain in full force and effect and survive any termination of this Agreement
and (ii) subject to Section 10.3(b), nothing herein shall relieve any Party
hereto from Liability in connection with any fraud or willful or intentional
breach of any of such Party’s representations, warranties or covenants contained
herein.

(b)        If this Agreement is terminated by Buyer pursuant to Section
10.2(d)(iii), then Buyer shall pay to the Company (by wire transfer of
immediately available funds), at or prior to such termination, a fee of $900,000
(the “Termination Fee”). Notwithstanding anything to the contrary in this
Agreement, the Parties hereby acknowledge that in the event that the Termination
Fee becomes payable and is paid by Buyer pursuant to this Section 10.3(b), the
Termination Fee shall be the sole and exclusive remedy of the Company and the
Company Shareholders under this Agreement.

ARTICLE 11

MISCELLANEOUS

11.1      Survival; Indemnification.    None of the representations and
warranties contained in this Agreement or in any instrument delivered under this
Agreement will survive the Closing; provided, however, that the representations
and warranties of the Company set forth in Section 4.29 and the representations
and warranties of the Company Shareholders set forth in Article 5 will remain
operative and in full force and effect, regardless of any investigation or
disclosure made by or on behalf of any of the parties to this Agreement, without
expiration. This Section 11.1 does not limit any covenant of the Parties to this
Agreement which, by its terms, contemplates performance after the Closing. Each
Company Shareholder shall jointly and severally indemnify and hold harmless
Buyer, the Company and their respective officers, directors, agents,
representatives, shareholders and employees, and each Person, if any, who
controls or may control Buyer within the meaning of the Securities Act or the
Exchange Act from and against any Damages to Buyer or its Affiliates arising out
of or resulting (directly or indirectly) from (i) the failure of the
representations and warranties of the Company set forth in Section 4.29 and the
representations and warranties of the Company Shareholders set forth in Article
5 to be true and correct as of the date of this Agreement or as of the Closing
Date (as though such representation or warranty were made as of the Closing Date
rather than the date of this Agreement, except in the case of any individual
representation and warranty which by its terms speaks only as of a specific date
or dates), and (ii) any breach of any covenant, obligation or agreement of the
Company or the Company Shareholders contained in this Agreement or any other
certificate or instrument delivered pursuant to this Agreement.

11.2      Governing Law; Resolution of Conflicts.    The internal laws of the
State of Delaware, irrespective of its conflicts of law principles, shall govern
the validity of this Agreement, the construction of its terms, and the
interpretation and enforcement of the rights and duties of the Parties hereto.

11.3      Consent to Jurisdiction and Venue.    Each Party hereby irrevocably
submits to the exclusive jurisdiction of, and venue in, any state or federal
court located in the State of Delaware for the purposes of any Action arising
out of this Agreement or any transaction contemplated hereby, and shall commence
any such Action only in such courts. Each Party further agrees that service of
any process, summons, notice or document by U.S. registered mail to such Party’s
respective address set forth herein will be effective service of process for any
such Action. Each Party hereby irrevocably and unconditionally waives any
objection to the laying of venue of any Action arising out of this Agreement or
any transaction contemplated hereby in such courts, and hereby irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum.

 

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11.4      Assignment; Binding Upon Successors and Assigns.    This Agreement
shall inure to the benefit of the successors and assigns of each Party,
including any successor to, or assignee of, all or substantially all of the
business and assets of a Party. Except as set forth in the preceding sentence,
no Party hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other Parties hereto; provided, however, that
Buyer may assign any of its rights and obligations hereunder (other than its
obligation to issue the Acquisition Shares pursuant to Section 2.2) to
Acquisition Subsidiary; provided, further, that Buyer shall not be relieved of
any of its obligations hereunder as a result of any such assignment to
Acquisition Subsidiary. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns. Any assignment in violation of this provision shall be void.

11.5      Severability.    If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, then the remainder of this Agreement and the application of such
provision to other persons or circumstances shall be interpreted so as
reasonably to effect the intent of the Parties hereto. The Parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that shall achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provision.

11.6      Counterparts.    This Agreement may be executed in any number of
counterparts (including via facsimile, .pdf or other electronic means), each of
which shall be an original as regards any Party whose signature appears thereon
and all of which together shall constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all Parties
reflected hereon as signatories.

11.7      Other Remedies.    Except as otherwise expressly provided herein, any
and all remedies herein expressly conferred upon a Party hereunder shall be
deemed cumulative with and not exclusive of any other remedy conferred hereby or
by law on such Party, and the exercise of any one remedy shall not preclude the
exercise of any other. The Parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of competent jurisdiction.

11.8      Amendments and Waivers.    Any term or provision of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only by a writing signed by Buyer, the Company and the Company
Shareholders. The waiver by a Party of any breach hereof or default in the
performance hereof shall not be deemed to constitute a waiver of any other
default or any succeeding breach or default. This Agreement may be amended by
the Parties hereto as provided in this Section 11.8 at any time before or after
adoption of this Agreement by the Company Shareholders, but, after such
adoption, no amendment shall be made which by Applicable Law requires the
further approval of the Company Shareholders without obtaining such further
approval. At any time prior to the Closing, each of the Company and Buyer, by
action taken by its board of directors, may, to the extent legally allowed,
(a) extend the time for the performance of any of the obligations or other acts
of the other, (b) waive any inaccuracies in the representations and warranties
made to it contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements or conditions for its benefit
contained herein. No such waiver or extension shall be effective unless signed
in writing by the Party against whom such waiver or extension is asserted. The
failure of any Party to enforce any of the provisions hereof shall not be
construed to be a waiver of the right of such Party thereafter to enforce such
provisions. Notwithstanding the foregoing, the Parties agree to work together in
good faith to agree any

 

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administrative modifications to this Agreement which may be required by any
local Applicable Law to give effect to the transactions contemplated by this
Agreement.

11.9      Expenses.    Except as expressly provided otherwise herein, whether or
not the Acquisition is successfully consummated, each Party shall bear its
respective legal, accountants, and financial advisory fees and other expenses
incurred with respect to this Agreement, the Acquisition and the transactions
contemplated hereby, it being the intention of the Parties that if the
Acquisition is consummated, the Transaction Fees be regarded for purposes of
this Section 11.9 as expenses of the Company Shareholders and not of the
Company.

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

11.11      Notices.    All notices and other communications required or
permitted under this Agreement shall be in writing and shall be either hand
delivered in person, sent by facsimile, sent by electronic mail, sent by
certified or registered first-class mail, postage pre-paid, or sent by
nationally recognized express courier service. Such notices and other
communications shall be effective upon receipt if hand delivered or sent by
facsimile or electronic mail, three (3) Business Days after mailing if sent by
mail, and one (1) Business Day after dispatch if sent by next-day courier
service, to the following addresses, or such other addresses as any Party may
notify the other Parties in accordance with this Section 11.11:

If to Buyer:

Overland Storage, Inc.

9112 Spectrum Center Boulevard

San Diego, CA 92123

Attention: Eric L. Kelly, Chief Executive Officer

Facsimile:     +1 (858) 495 4267

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

O’Melveny & Myers LLP

2765 Sand Hill Road

Menlo Park, CA 95014

Attention:   Steven Tonsfeldt, Esq.

  Paul L. Sieben, Esq.

Facsimile:   +1 (650) 473-2601

If to the Company:

Tandberg Data Holdings S.à r.l.

46A, avenue J.F. Kennedy

L-1855 Luxembourg

Grand Duchy of Luxembourg

 

Attention:

The Managers

 

Telephone:

+352 42 71711

 

Facsimile:

+352 42 1961

 

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

Reed Smith LLP

The Broadgate Tower

20 Primrose Street

London EC2A 2RS

Attention:     Georgia M. Quenby

Facsimile:    +44 20 3116 3999

If to Company Shareholders:

FBC Holdings S.à r.l.

46A, avenue J.F. Kennedy

L-1855 Luxembourg

Grand Duchy of Luxembourg

 

Attention:

The Managers

 

Telephone:

+352 42 71711

 

Facsimile:

+352 42 1961

Tandberg Data Management S.à r.l.

46A, avenue J.F. Kennedy

L-1855 Luxembourg

Grand Duchy of Luxembourg

 

Attention:

The Managers

 

Telephone:

+352 42 71711

 

Facsimile:

+352 42 1961

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

Reed Smith LLP

The Broadgate Tower

20 Primrose Street

London EC2A 2RS

Attention:    Georgia M. Quenby

Fax No.:      +44 20 3116 3999

11.12      Waiver of Jury Trial.    Each Party hereto acknowledges and agrees
that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such Party hereby
irrevocably and unconditionally waives any right such Party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated by this Agreement.
Each Party hereto certifies and acknowledges that (i) no representative, agent
or attorney of any other Party has represented, expressly or otherwise, that
such other Party would not, in the event of litigation, seek to enforce the
foregoing waiver, (ii) each such Party understands and has considered the
implications of this waiver, (iii) each such Party makes this waiver
voluntarily, and (iv) each such Party has been induced to enter into this
Agreement by, among other things, the waivers and certifications in this Section
11.12.

11.13      Interpretation; Rules of Construction.    When a reference is made in
this Agreement to Exhibits, Sections or Articles, such reference shall be to an
Exhibit to, Section of or Article of this Agreement, respectively, unless
otherwise indicated. The words “include,” “includes” and “including”

 

67

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when used herein shall be deemed in each case to be followed by the words
“without limitation.” When a reference is made to a specific law, act or
statute, such reference shall include any regulations promulgated thereunder.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. The
terms defined herein have the meanings assigned to them in this Agreement and
include plural as well as the singular. Terms to which a German translation has
been added shall be interpreted throughout this Agreement according to the
meaning assigned to them by the German translation. Pronouns of either gender or
neuter shall include, as appropriate, the other pronoun forms. The Parties
hereto agree that they have been represented by legal counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document shall be construed against
the Party drafting such agreement or document. References in this Agreement to
dollars ($) shall be to United States dollars and to cash shall be to cash in
U.S. dollars. When a reference is made to FBC in reference to any time after the
date hereof in which FBC is not the sole shareholder of the Company, such
reference to FBC shall be deemed to refer to all Company Shareholders at such
time.

11.14      Third-Party Beneficiary Rights.    No provisions of this Agreement
are intended, nor shall be interpreted, to provide or create any third party
beneficiary rights or any other rights of any kind in any client, customer,
employee, affiliate, shareholder, partner or any Party hereto or any other
Person unless specifically provided otherwise herein and, except as so provided,
all provisions hereof shall be personal solely between the Parties to this
Agreement.

11.15      Public Announcement.    Buyer may issue such press releases, and make
such other disclosures regarding the Acquisition, as it determines are required
under applicable securities laws or regulatory rules or as, with the prior
written consent of the Company, as it otherwise deems appropriate. The Company
shall not make any public announcement relating to this Agreement or the
transactions contemplated hereby, without the prior written consent of Buyer.

11.16      Entire Agreement.    This Agreement, the exhibits and schedules
hereto, the Company Ancillary Agreements and the Buyer Ancillary Agreements
constitute the entire understanding and agreement of the Parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the Parties with respect hereto. The express terms
hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

BUYER

 

OVERLAND STORAGE, INC.

/s/ Eric L. Kelly

Name: Eric L. Kelly

Title: President and Chief Executive Officer

 

[SIGNATURE PAGE TO ACQUISITION AGREEMENT]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

COMPANY

By executing this Agreement, the Company, in

accordance with article 190 of the Luxembourg

Company Law and article 1690 of the

Luxembourg Civil Code, also accepts and

acknowledges the transfer of the Company

Interests from the Company Shareholders to

Buyer and undertakes to record or cause to be

recorded, on the Closing Date, in its

shareholders‘ register the ownership rights of

the Buyer in respect of the Company Shares.

TANDBERG DATA HOLDINGS S.À R.L.

By:

 

/s/ Patrick van Denzen

Name: Manacor (Luxembourg) S.A.

Title: Manager A

By:

 

/s/ James Tucker

Name: Cyrus Capital Partners L.P.

Title: Manager B

COMPANY SHAREHOLDER

 

FBC HOLDINGS S.À R.L.

By:

 

/s/ Patrick van Denzen

Name: Manacor (Luxembourg) S.A.

Title: Manager A

By:

 

/s/ James Tucker

Name: Cyrus Capital Partners L.P.

Title: Manager B

COMPANY SHAREHOLDER

 

TANDBERG DATA MANAGEMENT S.À R.L.

By:

 

/s/ Patrick van Denzen

Name: Manacor (Luxembourg) S.A.

Title: Manager A

By:

 

/s/ James Tucker

Name: Cyrus Capital Partners L.P.

Title: Manager B

 

[SIGNATURE PAGE TO ACQUISITION AGREEMENT]

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SCHEDULE I

COMPANY SHAREHOLDERS

 

Company Shareholders

       Company        
Shares          ISL                Pro Rata    
Interest

FBC Holdings S.à r.l., a Luxembourg private limited liability company (société à
responsabilité limitée) having its registered office at L-1855 Luxembourg, 46A,
avenue J.F. Kennedy

   10,122      EUR
125,818.9        80.976%

Tandberg Data Management S.à r.l., a Luxembourg private limited liability
company (société à responsabilité limitée) having its registered office at
L-1855 Luxembourg, 46A, avenue J.F. Kennedy

   2,378      EUR
29,570.86        19.024%

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SCHEDULE II

SUBSIDIARIES

The Company

Guangzhou Tandberg Electronic Components Co., Ltd.

Tandberg Data (Asia) Pte Ltd

Tandberg Data (Hong Kong) Limited

Tandberg Data (Japan) Inc.

Tandberg Data Corporation

Tandberg Data GmbH

Tandberg Data Norge AS

Tandberg Data S.A.S.

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SCHEDULE III

PERSONS INCLUDED IN THE DEFINITION OF “KNOWLEDGE”

Each of the Group Companies

Patrick Clarke, Chief Executive Officer

Nils Hoff, Chief Financial Officer

Kevin Devlin, Chief Operating Officer

Scott Petersen, Senior Vice President, Americas

Graham Paterson, Senior Vice President, EMEA

Buyer

Eric Kelly, Chief Executive Officer

Kurt Kabfleisch, Chief Financial Officer

Jillian Mansolf, Senior Vice President of Marketing

Randy Gast, Senior Vice President of Worldwide Operations and Service

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SCHEDULE IV

CONTINUING OFFICERS AND DIRECTORS OF THE GROUP COMPANIES

Masayoshi Matsusawa (Tandberg Data (Japan) Inc.)

K.T. Fok (Guangzhou Tandberg Electronic Components Co., Ltd. and Tandberg Data
(Hong Kong) Limited)

Friedhelm Schopp (TD Germany)

Nils Hoff (TD Germany)

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EXHIBIT A

FORM OF REGISTRATION RIGHTS AGREEMENT

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EXHIBIT B

FORM OF VOTING AGREEMENT