EXHIBIT 10.1

 

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ASSET PURCHASE AGREEMENT

 

among:

 

EBAY INC.,

a Delaware corporation,

 

PAYPAL, INC.,

a Delaware corporation,

 

PAYPAL INTERNATIONAL LIMITED,

a company incorporated in the Republic of Ireland,

 

and

 

VERISIGN, INC.,

a Delaware corporation

 

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Dated as of October 10, 2005

 

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TABLE OF CONTENTS

 

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            1.    SALE OF TRANSFERRED ASSETS; RELATED TRANSACTIONS    1      1.1
   Sale of Transferred Assets    1      1.2    Excluded Assets    3      1.3   
Agreements Relating to Transfer of Transferred Assets    4      1.4    Purchase
Price    7      1.5    Assumption of Liabilities    7      1.6    Sales Taxes   
8      1.7    Allocation    9      1.8    Closing    9 2.    REPRESENTATIONS AND
WARRANTIES OF SELLER    9      2.1    Due Organization    10      2.2   
Equipment; Fixed Assets    10      2.3    Financial Statements; Customers;
Services    10      2.4    Title to Certain Transferred Assets    11      2.5   
Intellectual Property    11      2.6    Contracts    15      2.7    Compliance
with Legal Requirements    16      2.8    Governmental Authorizations    16     
2.9    Proceedings; Orders    16      2.10    Employee and Labor Matters    17  
   2.11    Tax Matters    18      2.12    Authority; Binding Nature of
Agreements    18      2.13    Non-Contravention; Consents    19      2.14   
Sufficiency of Transferred Assets    19 3.    REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND PARENT    20      3.1    Due Organization    20      3.2   
Authority    20      3.3    Binding Nature of Agreements    20      3.4   
Financing    20      3.5    Proceedings; Orders    20      3.6   
Non-Contravention; Consents    20      3.7    SEC Filings; Financial Statements
   21      3.8    Valid Issuance    22

 

i.

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TABLE OF CONTENTS

(CONTINUED)

 

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4.    PRE-CLOSING COVENANTS    22      4.1    Access and Investigation    22  
   4.2    Operation of Business    22      4.3    Filings and Consents    24  
   4.4    Notification of Certain Matters    25      4.5    No Negotiation    25
     4.6    Reasonable Efforts    25      4.7    Registration Rights Agreement;
Investor Certification    25      4.8    Termination of Certain Agreements    25
     4.9    Registration    25      4.10    Amendment of Certain Contracts    26
5.    CONDITIONS PRECEDENT TO PARENT’S AND PURCHASERS’ OBLIGATION TO CLOSE    26
     5.1    Accuracy of Representations    26      5.2    Performance of
Obligations    26      5.3    Consents    26      5.4    No Business Material
Adverse Effect    26      5.5    Antitrust Matters    27      5.6    Documents
   27      5.7    No Proceedings    28      5.8    No Prohibition    28      5.9
   Employees    28      5.10    Termination of Contracts    28 6.    CONDITIONS
PRECEDENT TO SELLER’S OBLIGATION TO CLOSE    29      6.1    Accuracy of
Representations    29      6.2    Performance of Obligations    29      6.3   
Antitrust Matters    29      6.4    Documents    29      6.5    No Proceedings
   30      6.6    No Prohibition    30      6.7    Listing    30      6.8   
Freely Tradable Shares    30 7.    TERMINATION    30      7.1    Termination
Events    30      7.2    Termination Procedures    31

 

ii.

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TABLE OF CONTENTS

(CONTINUED)

 

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     7.3    Effect of Termination    32 8.    INDEMNIFICATION, ETC    32     
8.1    Survival of Representations, Etc.    32      8.2    Indemnification by
Seller    33      8.3    Indemnification by Parent and Purchaser    34      8.4
   Defense of Third Party Claims    35 9.    POST-CLOSING MATTERS    37      9.1
   Employee Matters    37      9.2    Tax Cooperation; Allocation of Taxes    40
     9.3    Merchant Contracts and Merchant and Consumer Data    40      9.4   
Australian Arrangements    42 10.    MISCELLANEOUS PROVISIONS    42      10.1   
Further Actions    42      10.2    Continuing Access to Information    42     
10.3    Publicity    43      10.4    Fees and Expenses    43      10.5   
Attorneys’ Fees    44      10.6    Notices    44      10.7    Headings    45  
   10.8    Counterparts and Exchanges by Electronic Transmission or Facsimile   
45      10.9    Governing Law; Venue    46      10.10    Successors and Assigns;
Parties in Interest    46      10.11    Remedies Cumulative; Specific
Performance    47      10.12    Waiver    47      10.13    Amendments    47     
10.14    Severability    47      10.15    Entire Agreement    47      10.16   
Disclosure Schedule    48      10.17    Construction    48

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT is entered into as of October 10, 2005, by and
among: VERISIGN, INC., a Delaware corporation (“Seller”); EBAY INC., a Delaware
corporation (“Parent”); PAYPAL, INC., a Delaware corporation (“Purchaser”) and
wholly owned subsidiary of Parent; and PAYPAL INTERNATIONAL LIMITED, a company
incorporated in the Republic of Ireland and a wholly owned subsidiary of
Purchaser (“International” and together with Purchaser, “Purchasers”). Certain
capitalized terms used in this Agreement are defined in Exhibit A.

 

RECITAL

 

Seller and Purchasers wish to provide for the sale of the Transferred Assets (as
defined in Section 1.1) to Purchasers and/or an affiliate of Purchasers and
assumption of the Assumed Liabilities (as defined in Section 1.5) by Purchaser
on the terms set forth in this Agreement.

 

AGREEMENT

 

The parties to this Agreement, intending to be legally bound, agree as follows:

 

1. SALE OF TRANSFERRED ASSETS; RELATED TRANSACTIONS.

 

1.1 Sale of Transferred Assets. Subject to Section 1.2, Seller shall cause to be
sold, assigned, transferred, conveyed and delivered to Purchasers and/or (at
Purchaser’s discretion) an affiliate of Purchasers, at the Closing, the
following properties, rights, interests and tangible and intangible assets,
whether existing as of the date of this Agreement or acquired during the
Pre-Closing Period and whether owned by Seller or a Subsidiary of Seller (the
“Transferred Assets”), on the terms and subject to the conditions set forth in
this Agreement:

 

(a) Patents and Patent Applications: All of the patents, patent applications and
patent rights to inventions that are identified on Schedule 1.1(a), and any
counterparts, reissues, divisions, extensions, continuations and continuations
in part of, and any other patents claiming priority from, any of the foregoing,
in each case in any jurisdiction in the world (the patents, patent applications,
patent rights to inventions, counterparts, reissues, divisions, extensions,
continuations and continuations in part of, and any other patents claiming
priority from, any of the foregoing referred to in this Section 1.1(a) being
referred to in this Agreement as the “Transferred Patents”).

 

(b) Trademarks, Tradenames and Service Marks: All of the tradenames, trademarks,
service marks and other marks (including brand names, product names, logos, and
slogans) and applications therefor that are identified on Schedule 1.1(b) and
all rights therein (the tradenames, trademarks and service marks and rights
therein referred to in this Section 1.1(b) being referred to as the “Transferred
Marks”).

 

(c) Domain Names: All of the domain name registrations and uniform resource
locators (“URLs”) that are identified on Schedule 1.1(c) and all rights therein
(the domain name registrations, URLs and rights therein referred to in this
Section 1.1(c) being referred to as the “Transferred Domain Names”).

 

(d) Other Intellectual Property and Intellectual Property Rights: All of the
Intellectual Property and Intellectual Property Rights (other than: (i) patents,
patent applications, patent rights and rights in patentable inventions;
(ii) tradenames, trademarks, service marks and other marks (including brand
names, product names, logos, and slogans) and applications therefor and rights
therein; and (iii) domain names, URLs and rights therein) that are owned by
Seller or any Subsidiary of Seller and necessary for the conduct of, or that are
primarily used in or held for use for, the Business, including the Intellectual
Property and Intellectual Property Rights referred to in Schedule 1.1(d) (the
Transferred Patents, Transferred Marks and Transferred Domain Names, together
with the Intellectual Property and Intellectual Property Rights referred to in
this Section 1.1(d), being referred to in this Agreement as the “Transferred
IP”).

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(e) Customer/Merchant Base: All contact information, files and other data
possessed by Seller or any of Seller’s Subsidiaries to the extent related to the
direct customers, merchants, reseller partners and processors of the Business
that have not Opted Out and all Cleansed Data (but not any other information or
data) contained or included in Seller’s Pay 1 database (whether or not the
direct customer, merchant, reseller partner or processor linked to such Cleansed
Data has Opted Out).

 

(f) Fixed Assets: All computer equipment and other tangible assets of Seller or
any Subsidiary of Seller identified on Schedule 1.1(f) (the tangible assets
referred to in this Section 1.1(f) being referred to in this Agreement as the
“Transferred Fixed Assets”); provided, however, that unless the Seller Contract
identified in item #1 on Schedule 4.10 has been amended as set forth on Schedule
4.10 prior to the Closing, the tangible assets identified in Part 2.4 of the
Disclosure Schedule (the “Australian Fixed Assets”) shall not be included in the
Transferred Fixed Assets.

 

(g) Contracts: All rights of Seller or any Subsidiary of Seller under: (i) the
Seller Contracts identified on Schedule 1.1(g)(i) (the “Shared Seller
Contracts”) to the extent that such rights relate to the Business or any
Business Offering; (ii) the Seller Contracts related to the Business that are
merchant agreements and that Seller or any Subsidiary of Seller has entered into
pursuant to the corresponding Standard Form Agreement (as defined in
Section 2.5(b)), other than the Shared Seller Contracts (the “Standard Merchant
Agreements”); (iii) the Seller Contracts related to the Business that are
confidentiality agreements, employee proprietary information and invention
assignment agreements or similar agreements, to the extent that such rights
relate to the Business or the Transferred Assets; (iv) the Seller Contracts
identified on Schedule 1.1(g)(iv) (the “Other Business Contracts”); (v) the
Seller Contracts related to the Business that are entered into by Seller or any
Subsidiary of Seller during the Pre-Closing Period in compliance with Sections
4.2(d) and 4.2(e); (vi) the Seller Contracts related to the Business that are
entered into by Seller or any Subsidiary of Seller during the Pre-Closing Period
that, in the timeframe contemplated by the parenthetical clause at the end of
Section 1.2(d), Purchaser notifies Seller at any time (either before or after
the Closing) are to be included in the Transferred Assets; (vii) if and only if
the Seller Contract identified in item #1 on Schedule 4.10 has been amended as
set forth on Schedule 4.10 prior to the Closing, the Seller Contracts identified
on Schedule 1.1(g)(vii) to the extent that such rights relate to the Business or
any Business Offering (the “Australian Contracts”); and (viii) the Seller
Contracts, if any, and to the extent the rights under such Seller Contracts are
assignable in whole or in part without further payment, liability or obligation
on behalf of Seller, that are either (A) license agreements for the operating
systems on the data center hardware and development and quality assurance
hardware that are included in the Transferred Fixed Assets, or (B) service
contracts, extended warranties, and other similar agreements for the data center
hardware and development and quality assurance hardware that are included in the
Transferred Fixed Assets.

 

(h) Claims: All Claims (including Claims for past infringement of Transferred
IP) of Seller or any Subsidiary of Seller against other Persons relating to the
Transferred Assets (regardless of whether or not such Claims have been asserted
by Seller or any Subsidiary of Seller), and all rights of indemnity, warranty
rights, rights of contribution, rights to refunds, rights of reimbursement and
other rights of recovery related to the Transferred Assets possessed by Seller
or any Subsidiary of Seller (regardless of whether such rights are currently
exercisable).

 

(i) Promotional Materials, Records, Etc.: All advertising and promotional
materials, and all books (including log books), records, files, data, notebooks,
research reports, computer databases, and computer email archives, including
programming diagrams, development documentation, specifications and
specification negotiations, written customer configurations, written financial
arrangements, security documentation and certifications, and related third party
information (collectively, “Records”), in each case that are necessary for the
conduct of, or are primarily used in or held for use for, the Business and in
each case excluding personally identifiable data for any Transferred Customer
(as defined in Section 9.3(a)) that has Opted Out (the “Transferred Records”).

 

(j) Post-Closing Revenue: All rights of Seller or any Subsidiary of Seller to
recognize revenues following the Closing Date under or pursuant to any Seller
Contract that is assumed by Purchaser hereunder.

 

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(k) Goodwill: All goodwill of the Business.

 

1.2 Excluded Assets. Notwithstanding anything to the contrary contained in this
Agreement, the parties agree that neither Seller nor any Subsidiary of Seller is
selling, assigning, transferring, conveying or delivering (nor does Seller or
any such Subsidiary have any obligation to assign, transfer, convey or deliver)
to Purchasers or an affiliate of Purchasers, and the Transferred Assets shall
not include, any assets that are not Transferred Assets (the “Excluded Assets”).
For greater clarity, the Excluded Assets include:

 

(a) the assets specifically identified on Schedule 1.2(a);

 

(b) all rights, interests and claims of Seller under this Agreement, the
Transactional Agreements to which Seller is a party and any other agreements
between Seller and any of its Subsidiaries and Parent or Purchaser and any of
its affiliates;

 

(c) all corporate minutes and stock books of account of Seller and its
Subsidiaries, blank stock certificates, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals and other
documents relating to the organization, maintenance and existence of Seller and
its Subsidiaries as a corporation;

 

(d) all Seller Contracts relating to the Business entered into during the
Pre-Closing Period in violation of Section 4.2(d) or Section 4.2(e), unless,
prior to the Closing, Purchaser notifies Seller in writing that such Seller
Contract is a Transferred Asset (it being understood that if during the
Pre-Closing Period Seller or any Subsidiary of Seller enters into a Seller
Contract relating to the Business in violation of Section 4.2(d) or
Section 4.2(e), then notwithstanding this clause “(d)” or clause “(e)” of this
Section 1.2, Purchaser shall be entitled (but not required) to designate such
Seller Contract as a Transferred Asset at any time (either before or after the
Closing) within 10 days after Seller provides Purchaser with a copy of such
Seller Contract and notifies Purchaser that such Seller Contract was entered
into during the Pre-Closing Period in violation of Section 4.2(d) or
Section 4.2(e));

 

(e) all contracts, agreements, arrangements, commitments and undertakings to
which Seller or its Subsidiaries are a party or is bound or to which its assets
are subject that are not described in Section 1.1(g);

 

(f) any cash, cash equivalents, receivables or amounts invoiced (other than
amounts invoiced in advance of the scheduled billing date therefor) that have
not yet been recorded as receivables of Seller relating to the Business that
exist or are accrued prior to or as of the Closing Date;

 

(g) all rights of recovery related to the receivables and other amounts
described in Section 1.2(f);

 

(h) all assets or rights that relate to the Employee Plans of Seller;

 

(i) any Contracts, assets or rights that are necessary for the conduct of, or
that are primarily used in or held for use for, Seller’s payment and billing
services as part of Seller’s prepaid, postpaid and content business within
Seller’s communications business, other than any Contracts, assets or rights
included in the Seller Business Software that is included in the Transferred
Assets, the Transferred Patents, the Transferred Marks, the Transferred Domain
Names, the Transferred Fixed Assets, the Shared Seller Contracts, the Standard
Merchant Contracts, the Other Business Contracts or the Australian Contracts;

 

(j) all Governmental Authorizations; and

 

(k) if the Seller Contract identified in item #1 on Schedule 4.10 has not been
amended as set forth on Schedule 4.10 prior to the Closing, the Australian
Contracts and the Australian Fixed Assets.

 

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1.3 Agreements Relating to Transfer of Transferred Assets.

 

(a) Seller shall electronically transfer all of the Transferred IP to Purchasers
or an affiliate of Purchasers promptly following the Closing and shall not
deliver any Transferred IP to Purchasers or any affiliate of Purchasers on any
tangible medium. In the event any tangible Transferred Asset is inadvertently
transferred to Purchasers together with any Transferred IP, such tangible asset
shall be returned to Seller, the Transferred IP thereon shall be removed by
Seller, Seller shall transfer such tangible Transferred Asset back to Purchasers
without such Transferred IP, and Purchasers shall irretrievably remove such
Transferred IP that was originally acquired on a tangible medium from Seller’s
computers or other electronic media. Promptly following any electronic
transmission of any Transferred IP, Seller shall execute and deliver to
Purchaser a certificate in a form reasonably acceptable to Purchaser and
containing, at a minimum, the following information: (i) the date of
transmission; (ii) the time the transmission was commenced and concluded;
(iii) the name of the individual who made the transmission; (iv) the signature
of such individual; (v) a general description of the nature of the items
transmitted sufficient to distinguish the transmission from other transmissions;
and (vi) a certification that no Transferred IP was transferred to Purchasers or
any affiliate of Purchasers on any tangible personal property.

 

(b) Except as expressly set forth in Section 1.3(c), Purchaser and Seller shall
cooperate and work together to transfer promptly the Transferred Assets to
Purchasers and shall take all other steps reasonably required to enable
Purchasers to obtain possession of and good and valid title to, the Transferred
Assets. Within five days after the Closing, each party will appoint a
representative from its organization with appropriate technical expertise for
the purpose of evaluating and transferring the Transferred Assets to Purchaser.
Such individuals will consult with other members of each party’s organization as
needed to accomplish such evaluation and transfer.

 

(c) For the avoidance of doubt, Seller may retain possession of the following
Transferred Assets:

 

(i) subject to the parenthetical clause at the end of this sentence, any
Transferred Assets that are necessary for the performance by Seller of its
obligations under the Transition Services Agreement (as defined in
Section 5.6(a)), solely for the use permitted under the Transition Services
Agreement and only for the term of the Transition Services Agreement (it being
understood that Seller shall deliver all such Transferred Assets to Purchasers
promptly following the end of the term of the Transition Services Agreement and,
subject to clauses “(ii),” “(iii)” and “(iv)” below, Seller shall promptly
destroy any and all copies of such Transferred Assets that remain in the
Seller’s possession following such delivery to Purchasers);

 

(ii) subject to the parenthetical clause at the end of this sentence, a copy of
the Transferred IP that is expressly licensed by Purchaser to Seller pursuant to
the terms of the License Agreement, solely for the use permitted under the
License Agreement and only for the term of the License Agreement (it being
understood that, subject to clause “(iii)” below, promptly following the end of
the term of the License Agreement, Seller shall destroy any and all copies of
such Transferred IP);

 

(iii) a copy of all contact information, files and other data possessed by
Seller or any of Seller’s Subsidiaries solely to the extent related to the
customers, merchants, reseller partners and processors of any of Seller’s
businesses other than the Business and solely to the extent currently used in
any of Seller’s businesses other than the Business (it being understood that:
(A) subject to clause “(B)” of this sentence, any such information, files or
other data may be used only to the extent necessary for the operation of
Seller’s businesses other than the Business; and (B) any such information, files
or other data that prior to the Closing was maintained as confidential
information by Seller or any Subsidiary of Seller will be continued to be
maintained as confidential information of Seller or any Seller Subsidiary
following the Closing using the same standard of care and protection regarding
non-disclosure as Seller and its Subsidiaries used prior to the Closing but in
any event no less than a reasonable standard of care;

 

(iv) subject to the parenthetical clause at the end of this sentence, a copy of
all Transferred Records that are financial records or information, financial
files and other financial data related to the

 

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customers, merchants, reseller partners and processors of the Business solely to
the extent necessary for (and for use solely for): (A) the preparation of tax
returns and financial statements which are the responsibility of Seller; (B) the
management and handling of any tax audits and tax disputes; (C) complying with
any audit request; or (D) satisfying liabilities related to the Business that
are not Assumed Liabilities (it being understood that: (1) such Transferred
Records will only be accessible by financial and legal employees and advisors of
Seller and its Subsidiaries having a need to access such Transferred Records to
perform the obligations set forth above, and (2) with respect to any such
Transferred Records that prior to the Closing were maintained as confidential
information by Seller or any Subsidiary of Seller will be continued to be
maintained as confidential information of Seller or any Seller Subsidiary
following the Closing using the same standard of care and protection regarding
non-disclosure as Seller and its Subsidiaries used prior to the Closing but in
any event no less than a reasonable standard of care; and

 

(v) subject to the parenthetical clause at the end of this sentence, a copy of
all Transferred Records applicable to (and for use solely for) complying with
any subpoena or other investigative demand by any Governmental Body or for any
civil litigation, provided that: (A) with respect to any Transferred Records
that include, embody, incorporate, are derived from or relate to any of the
Transferred IP, any such Transferred Records may be: (1) subject to clause “(3)”
of this sentence, retained and available only to the internal and external legal
counsel to Seller; (2) used solely for the defense of the legal proceedings
referred to in Part 2.5(h) of the Disclosure Schedule or any other legal
proceedings that may arise after the Closing; and (3) disclosed to a third party
in connection with any legal proceedings referred to in this clause “(v)” only
if: (w) Seller provides Purchaser with at least five business days prior notice
of such proposed disclosure; (x) at the request of Purchaser, seeks a protective
order or other appropriate protection with respect to such Transferred Records;
(y) uses its reasonable best efforts to limit the disclosure of such Transferred
Records to the greatest extent possible; and (z) uses its reasonable best
efforts to cause such Transferred Records to be treated confidentially by each
Person to whom they are disclosed; and (B) with respect to any other Transferred
Records: (1) subject to clause “(2)” of this sentence, retained and available
only to the internal and external legal counsel to Seller; and (2) disclosed to
a third party only in connection with the legal proceedings referred to in this
clause “(v)” and only if: (x) Seller provides Purchaser with at least five
business days prior notice of such proposed disclosure; (y) Seller uses its
reasonable best efforts to limit the disclosure of such Transferred Records to
the greatest extent possible; and (z) Seller uses its reasonable best efforts to
cause such Transferred Records to be treated confidentially by each Person to
whom they are disclosed.

 

1.4 Purchase Price.

 

(a) As consideration for the sale, assignment, transfer, conveyance and delivery
of the Transferred Assets pursuant to this Agreement:

 

(i) subject to Section 1.4(b), at the Closing, Purchaser shall pay (or cause to
be paid) to Seller, in cash, an amount equal to $370,000,000 (the
“Consideration”), by wire transfer to an account number provided to Purchaser by
Seller prior to the Closing; and

 

(ii) at the Closing, Purchaser shall assume the Assumed Liabilities (as defined
in Section 1.5(b)) by delivering to Seller a Bill of Sale and Assignment and
Assumption Agreement substantially in the form of Exhibit B (the “Bill of Sale
and Assignment and Assumption Agreement”).

 

(b) Notwithstanding anything to the contrary contained in this Agreement,
Purchaser may, at any time after December 1, 2005, but prior to the Closing
Date, elect to have Parent issue shares of Parent Common Stock to Seller in lieu
of all or any portion of the Consideration (such election being referred to as
the “Stock Payment Election”); provided, however, that Purchaser may not make
the Stock Payment Election: (i) unless the shares of Parent Common Stock
issuable to Seller are covered by an effective registration statement on Form
S-3 and are not subject to restrictions on public resale under applicable U.S.
securities laws; (ii) unless the shares of Parent Common Stock to be issued in
the Transactions shall have been approved for listing (subject to notice of
issuance) on the NASDAQ National Market; (iii) if all of the conditions set
forth in Sections 5 and 6 have been satisfied or waived on or prior to
December 1, 2005; and (iv) there shall not have occurred (and there shall not be
reasonably likely to occur) any effect, change, event or other circumstance
relating to Parent that could result in a

 

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suspension of the use of the Registration Statement (as defined in the
Registration Rights Agreement) or any prospectus or prospectus supplement
relating thereto. In the event that Purchaser makes the Stock Payment Election,
at the Closing, Purchaser shall, in lieu of the cash payment set forth in
Section 1.4(a)(i):

 

(i) pay (or cause to be paid) to Seller an amount in cash equal to the
Consideration less the portion of the Consideration to which the Stock Payment
Election applies (such portion being referred to as the “Stock Payment Amount”);
and

 

(ii) cause Parent to issue to Seller the number of shares of Parent Common Stock
(rounded down to the nearest whole share) equal to the quotient of the Stock
Payment Amount divided by the Parent Average Stock Price.

 

1.5 Assumption of Liabilities.

 

(a) Except as set forth in Section 1.5(b), neither Purchaser nor any affiliate
of Purchaser shall assume any Liabilities of Seller or any Subsidiary of Seller
(whether or not related to the Business or the Transferred Assets), including,
but not limited to: (i) any Tax Liabilities of Seller or any Subsidiary of
Seller; (ii) any Liabilities of Seller or any Subsidiary of Seller relating to
accounts payable, accrued liabilities, indebtedness, legal services, accounting
services, financial advisory services, investment banking services or other
professional services performed in connection with the sale of the Transferred
Assets; (iii) any wages or salaries or other Liabilities relating to any
employee of Seller or any Subsidiary of Seller, including the Retained
Employment Liabilities (as defined in Section 9.1(c)) but excluding any
Post-Hiring Date Employment Liabilities; (iv) any Liability of Seller or any
Subsidiary of Seller under the Shared Seller Contracts; and (v) any other
Liabilities of Seller or any Subsidiary of Seller.

 

(b) Notwithstanding Section 1.5(a), Purchaser and/or (at Purchaser’s discretion)
an affiliate of Purchaser shall assume the following obligations and liabilities
(the “Assumed Liabilities”): (i) the obligations of Seller or, if applicable,
the applicable Subsidiary of Seller, under the Standard Merchant Agreements and
the Other Business Contracts; (ii) the obligations of Seller or, if applicable,
the applicable Subsidiary of Seller, under the Shared Seller Contracts to the
extent that such obligations relate to the Business Offerings only; (iii) if and
only if the Seller Contract identified in item #1 on Schedule 4.10 has been
amended as set forth on Schedule 4.10 prior to the Closing, the obligations of
Seller or, if applicable, the applicable Subsidiary of Seller, under the
Australian Contracts, to the extent that such obligations relate to the Business
Offerings only; (iv) the obligations of Seller or, if applicable, the applicable
Subsidiary of Seller, under any other Seller Contracts relating to the Business
entered into during the Pre-Closing Period in full compliance with Sections
4.2(d), 4.2(e)(i) and 4.2(e)(ii); and (v) the obligations of Seller or, if
applicable, the applicable Subsidiary of Seller, under any other Seller
Contracts relating to the Business that are entered into during the Pre-Closing
Period to the extent that Purchaser notifies Seller at any time (either before
or after the Closing) that such Seller Contracts are Transferred Assets, but in
any case (under clauses “(i),” “(ii), “ “(iii),” “(iv)” and “(v)” of this
sentence) only to the extent that such obligations: (A) arise after the Closing
Date; (B) do not arise from or relate to any breach by Seller or any Subsidiary
of Seller of any provision of any of such Contracts; (C) do not arise from or
relate to any event, circumstance or condition occurring or existing on or prior
to the Closing Date that, with notice or lapse of time, would constitute or
result in a breach of any of such Contracts; and (D) are ascertainable (in
nature and amount) solely by reference to the express terms of such Contracts;
provided, however, that Purchaser shall not assume any obligations or have any
rights under any Seller Contract that is a Specified Asset (as defined in
Section 10.1(a)) until such time as such Seller Contract is deemed to have been
assigned and transferred to Purchaser in accordance with Section 10.1(a).

 

1.6 Sales Taxes. Seller shall bear and pay (or cause one or more of its
Subsidiaries to bear and pay) any sales taxes, value added taxes, use taxes,
transfer taxes, documentary charges or similar taxes, charges or fees
(collectively, “Transfer Fees”) that may become payable in connection with the
sale of the Transferred Assets to Purchasers; provided, however, that in the
event that any portion of the Consideration allocated to the Transferred Fixed
Assets on the Consideration Allocation Schedule (as defined in Section 1.7)
exceeds the aggregate book value of the Transferred Fixed Assets carried by
Seller on its books as of the date of this Agreement, then Purchaser shall bear
and pay any Transfer Fees that become payable on the portion of such allocated
Consideration that exceeds the

 

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aggregate book value of such Transferred Fixed Assets. Notwithstanding anything
to the contrary contained in this Agreement, any Transfer Fees resulting from
Seller’s failure to deliver any Transferred IP to Purchasers by electronic
transmission in accordance with Section 1.3(a) shall be borne and paid entirely
by Seller, unless Purchaser requests in writing that Seller deliver such
Transferred IP to Purchaser in the form of tangible personal property as a
result of Purchaser’s inability to receive, download or accept electronic
delivery of such Transferred IP by Seller. Upon request by Purchaser, Seller
shall provide to Purchaser a receipt for any amounts paid by Purchaser pursuant
to this Section 1.6.

 

1.7 Allocation. The Consideration shall be allocated among the Transferred
Assets in accordance with a schedule to be prepared in accordance with the
valuation assigned to the Transferred Assets by a nationally recognized,
independent, third-party valuation firm selected by Purchaser within 60 days
following the Closing Date (the “Consideration Allocation Schedule”) (it being
understood that the Consideration Allocation Schedule shall be prepared in
compliance with Section 1060 of the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations promulgated thereunder), and neither Purchaser,
Parent nor Seller shall file (and shall not permit any of their Subsidiaries or
affiliates to file) any Tax Return or other document with, or make any statement
or declaration to, any Governmental Body that is inconsistent with the
allocation set forth on the Consideration Allocation Schedule. To the extent
that Purchasers plan to use any of the Transferred Assets outside of the United
States, Purchaser may identify such Transferred Assets (the “non-US Transferred
Assets”) at or prior to the Closing and allocate a portion of the Consideration
to such non-US assets to be paid by any affiliate of Purchaser identified by
Purchaser. For this purpose, a preliminary allocation of the Consideration
between the US Transferred Assets and the non-US Transferred Assets will be
provided by Purchaser to Seller at or prior to the Closing, subject to
adjustment as set forth in the Consideration Allocation Schedule.

 

1.8 Closing. Subject to the satisfaction or waiver of the conditions set forth
in Sections 5 and 6, the closing of the sale of the Transferred Assets pursuant
to this Agreement (the “Closing”) shall take place at the offices of Cooley
Godward LLP in Palo Alto, California, at a time and date (no later than the
fifth business day after the satisfaction or waiver of the last of the
conditions set forth in Sections 5 and 6 to be satisfied, other than those
conditions that by their nature are to be satisfied at Closing, but subject to
the satisfaction or waiver of such conditions) to be agreed upon by Purchaser
and Seller. For purposes of this Agreement, “Closing Date” shall mean the date
on which the Closing actually takes place.

 

2. REPRESENTATIONS AND WARRANTIES OF SELLER.

 

Seller represents and warrants, to and for the benefit of the Purchaser
Indemnified Persons, as follows:

 

2.1 Due Organization. Seller and each Subsidiary of Seller that owns any
Transferred Assets or is otherwise involved in the Business is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.

 

2.2 Equipment; Fixed Assets.

 

(a) Part 2.2(a) of the Disclosure Schedule accurately identifies as of the date
of this Agreement all computer equipment and other tangible assets of Seller or
any Subsidiary of Seller that are necessary for the conduct of, or are primarily
used in or held for use for, the Business.

 

(b) All of the Transferred Fixed Assets: (i) are (and will as of the Closing be)
structurally sound, free of material defects and deficiencies; (ii) are in good
condition and repair in all material respects (ordinary wear and tear excepted);
and (iii) are (and will as of the Closing be) adequate in all material respects
for the uses to which they are currently being put (it being understood that
removing any Transferred IP from any Transferred Fixed Asset for purposes of
compliance with Section 1.3(a) shall not, in and of itself, constitute a breach
of this Section 2.2(b) with respect to such Transferred Fixed Asset).

 

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2.3 Financial Statements; Customers; Services.

 

(a) Seller has delivered to Purchaser (i) the unaudited statement of revenues
and expenses of the Business for the year ended December 31, 2004, (ii) the
unaudited statement of revenues and expenses of the Business for the eight
months ended August 31, 2005; and (iii) the unaudited list of fixed assets of
the Business as of August 31, 2005 (the financial statements referred to in
clauses “(i),” “(ii)” and “(iii)” of this sentence being collectively referred
to as the “Business Unit Financial Statements”). The revenues, direct expenses
and fixed assets included in the Business Unit Financial Statements were
prepared in accordance with generally accepted accounting principles in the
United States. The Business Unit Financial Statements have been prepared with
due care in accordance with the books and records of Seller. The Business Unit
Financial Statements present fairly in all material respects the revenues,
direct expenses and fixed assets of the Business for the relevant periods
referred to above. Seller has delivered to Purchaser the unaudited statement of
revenues and expenses (in Australian dollars) for Seller’s Australian payments
business for the nine months ended September 30, 2005 (the “Australian
Statement”). The revenues and direct expenses included in the Australian
Statement were prepared in accordance with generally accepted accounting
principles in Australia. The Australian Statement has been prepared with due
care in accordance with the books and records of VeriSign Australia Limited. The
Australian Statement presents fairly in all material respects the revenues and
direct expenses of the Business as conducted by VeriSign Australia Limited for
the nine months ending September 30, 2005. The Business Unit Financial
Statements do not contain all corporate expenses, taxes and intercompany
charges.

 

(b) Part 2.3(b)(i) of the Disclosure Schedule provides an accurate and complete
listing of the revenues received by Seller and its Subsidiaries from the top 25
customers (including merchants, resellers, distributors and referral partners)
of the Business (based on total revenues received by Seller and its Subsidiaries
related to the Business) with respect to the Business Offerings in fiscal year
ended December 31, 2004 and in the eight months ended August 31, 2005. Other
than as identified on Part 2.3(b)(ii) of the Disclosure Schedule, since
January 1, 2005, neither Seller nor any of its Subsidiaries has received any
written notice or, to the Knowledge of Seller, any other communication
indicating that any such top 25 customer of the Business intends or expects to
cease being a customer of the Business or to materially reduce the volume of
such customer’s business below the volume thereof during fiscal year 2004 and
fiscal year 2005 (calculated on an annualized basis).

 

2.4 Title to Certain Transferred Assets. Seller (or the Subsidiary of Seller
identified in Part 2.4 of the Disclosure Schedule) owns, and has good and valid
title to, all of the Transferred Assets, free and clear of any Encumbrances,
other than Permitted Encumbrances (it being understood that no representation or
warranty is being made in this Section 2.4 with respect to any Transferred IP).
Except as specifically identified in Part 2.4 of the Disclosure Schedule, no
Subsidiary or other affiliate of Seller owns (or has any rights with respect to)
any of the Transferred Assets. To the extent that any of the Transferred Assets
are located or owned by an Entity located outside the United States, the part of
the Disclosure Schedule that identifies such Transferred Asset also identifies
the location of such Transferred Asset and the Entity that owns such Transferred
Asset.

 

2.5 Intellectual Property.

 

(a) Part 2.5(a) of the Disclosure Schedule accurately identifies and describes:

 

(i) in Part 2.5(a)(i) of the Disclosure Schedule, each Business Offering;

 

(ii) in Part 2.5(a)(ii) of the Disclosure Schedule: (A) each item of Seller IP
that is Registered IP (other than trademarks, tradenames, service marks, service
names and domain names) in which Seller or any Subsidiary of Seller has or
purports to have an ownership interest of any nature (whether exclusively,
jointly with another Person or otherwise); (B) the jurisdiction in which such
item of Registered IP has been registered or filed and the applicable
registration or serial number; and (C) any other Person that has an ownership
interest in such item of Registered IP and the nature of such ownership
interest;

 

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(iii) in Part 2.5(a)(iii) of the Disclosure Schedule: each Seller Contract
pursuant to which any Intellectual Property Rights or Intellectual Property used
in the development or provision of the Business Offerings is licensed to Seller
or any Subsidiary of Seller (other than software license agreements for any
third-party software that is generally available to the public on standard terms
at a cost of less than $5,000); and

 

(iv) in Part 2.5(a)(iv) of the Disclosure Schedule: (A) each Seller Contract
pursuant to which any Person has been granted any exclusive license under, or
otherwise has received or acquired any exclusive right (whether or not currently
exercisable) or interest in, any Transferred IP; and (B) each other Seller
Contract pursuant to which any Person has been granted any other license under,
or otherwise has received or acquired any other right (whether or not currently
exercisable) or interest in, any Transferred IP (other than: (1) non-exclusive
licenses granted by Seller or any Subsidiary of Seller pursuant to a Standard
Form Agreement of Seller or any Subsidiary of Seller; and (2) non-disclosure
agreements entered into by Seller in the ordinary course of business providing
revocable, non-exclusive rights to use confidential information for a limited
purpose).

 

(b) Seller has provided to Purchaser a complete and accurate copy of each
standard form of the following Contracts currently used by Seller or any
Subsidiary of Seller in connection with the Business: (i) referral agreement;
(ii) development agreement; (iii) distributor or reseller agreement;
(iv) employee agreement containing any assignment or license of Intellectual
Property or Intellectual Property Rights or any confidentiality provision;
(v) consulting or independent contractor agreement containing any assignment or
license of Intellectual Property or Intellectual Property Rights or any
confidentiality provision; (vi) confidentiality or nondisclosure agreement; or
(vii) merchant agreement (such standard form agreements being referred to as the
“Standard Form Agreements”). There is no material difference between each
Standard Form Agreement and any standard form of such agreement: (A) that was
previously used by Seller or any Subsidiary of Seller in connection with the
Business; and (B) under which there exists any current rights or obligations.
Part 2.5(b) of the Disclosure Schedule accurately identifies each Seller
Contract being assigned to Purchaser or an affiliate of Purchaser pursuant to
this Agreement that constitutes a Contract with a reseller, referral partner,
distributor or merchant and that deviates in any material respect from the
corresponding Standard Form Agreement. Except for the nonexclusive licenses and
rights granted in Contracts identified in Part 2.5(a)(iv) of the Disclosure
Schedule, and except for non-exclusive licenses granted by Seller or any
Subsidiary of Seller pursuant to a Standard Form Agreement and non-disclosure
agreements entered into by Seller or any Subsidiary of Seller in the ordinary
course of business providing revocable, non-exclusive rights to use confidential
information for a limited purpose, Seller is not bound by, and no Transferred IP
is subject to, any Contract containing any covenant or other provision that in
any way limits or restricts the ability of Seller to use, exploit, assert, or
enforce any Transferred IP anywhere in the world.

 

(c) Seller (or the Subsidiary of Seller identified in Part 2.5(c) of the
Disclosure Schedule) exclusively owns all right, title and interest to and in
the Transferred IP free and clear of any Encumbrances (other than Permitted
Encumbrances). Without limiting the generality of the foregoing:

 

(i) all documents and instruments necessary to perfect the rights of Seller or
any Subsidiary of Seller in each item of Registered IP included in the
Transferred Assets have been validly executed, delivered and filed in a timely
manner with the appropriate Governmental Body;

 

(ii) Seller and each Subsidiary of Seller has and enforces a policy of securing
from each Person who is or was an employee or independent contractor of Seller
or any Subsidiary of Seller and who is or was involved in the creation or
development of any Seller IP a valid and enforceable agreement containing an
irrevocable (subject to the limitations of any applicable public law) assignment
of Intellectual Property Rights to Seller or the applicable Subsidiary of Seller
and confidentiality provisions protecting the Seller IP that is maintained or
purported to be maintained by Seller as a trade secret; and

 

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(iii) Seller and each Subsidiary of Seller has taken reasonable steps to
maintain the confidentiality of and otherwise protect and enforce its rights in
all proprietary information held by Seller or any Subsidiary of Seller, or
purported to be held by Seller or any Subsidiary of Seller, as a trade secret
relating to the Business.

 

(d) All Registered IP included in the Transferred Assets (other than pending
applications) is subsisting and, to the Knowledge of Seller, is valid and
enforceable. Without limiting the generality of the foregoing:

 

(i) all filings, payments and other actions required to be made or taken by
Seller or any Subsidiary of Seller to maintain each item of Registered IP
included in the Transferred Assets in full force and effect have been made or
taken by the applicable deadline, except where the failure to make or take such
filings, payments or actions would not and would not reasonably be expected to
have an adverse effect on any Registered IP included in the Transferred Assets;
and

 

(ii) no interference, opposition, reissue, reexamination or other Proceeding of
any nature is or has been pending or, to the Knowledge of Seller, threatened, in
which the scope, validity or enforceability of any Registered IP included in the
Transferred Assets is being, has been or could reasonably be expected to be
contested or challenged.

 

(e) The Transferred IP constitutes all of the Intellectual Property Rights of
Seller or any Subsidiary of Seller that is necessary: (i) to develop,
manufacture, market, distribute, sell, support and use the Business Offerings as
such activities have been carried on or are currently proposed to be carried on
by Seller or any Subsidiary of Seller; and (ii) to enable Purchaser to conduct
the Business in the manner in which the Business has been conducted, is
currently being conducted and is currently proposed by Seller (or any Subsidiary
of Seller) to be conducted.

 

(f) Neither the execution, delivery or performance of any of the Transactional
Agreements nor the consummation of any of the Transactions will, with or without
notice or the lapse of time, and as a result of any provision of or obligation
under any Seller Contract, result in or give any other Person the right or
option to cause or declare: (i) a loss of, or Encumbrance on, any Transferred
IP; (ii) a material breach of any Contract listed or required to be listed in
Part 2.5(a)(iii) of the Disclosure Schedule and that is included in the
Transferred Assets; (iii) the release, disclosure or delivery of any source code
or trade secrets included in the Transferred IP by or to any escrow agent or
other Person, other than to Parent or Purchaser pursuant to this Agreement; or
(iv) the grant, assignment or transfer to any other Person of any license or
other right or interest under, to or in any of the Transferred IP, other than to
Parent or Purchaser pursuant to this Agreement, the Transition Services
Agreement or the License Agreement.

 

(g) To the Knowledge of Seller, no Person has infringed, misappropriated, or
otherwise violated, and no Person is currently infringing, misappropriating or
otherwise violating, any Transferred IP. Part 2.5(g) of the Disclosure Schedule
accurately identifies (and Seller has provided to Purchaser a complete and
accurate copy of) each letter that has been sent or otherwise delivered by or to
Seller or any Subsidiary of Seller or any Representative of Seller or any
Subsidiary of Seller since January 1, 2003 regarding any actual, alleged or
suspected infringement or misappropriation of any Transferred IP by a third
party.

 

(h) None of the Transferred IP infringes or misappropriates any Intellectual
Property Right of any other Person. Since January 1, 2003, neither Seller nor
any Subsidiary of Seller has received any written notice or, to the Knowledge of
Seller, any other communication, relating to any actual, alleged or suspected
infringement, misappropriation or violation of any Intellectual Property Right
of another Person that relates to the Business.

 

(i) None of the Seller Business Software included in the Transferred IP (and, to
the Knowledge of Seller, none of the Seller Business Software that is being made
available pursuant to a Seller Contract being assigned to Purchaser or an
affiliate of Purchaser pursuant to this Agreement) contains any bug, defect or
error

 

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(including any bug, defect or error relating to or resulting from the display,
manipulation, processing, storage, transmission or use of date data) that
materially and adversely affects the use, functionality or performance of such
Seller Business Software or any product or system containing or used in
conjunction with such Seller Business Software.

 

(j) To the Knowledge of Seller, none of the Seller Business Software included in
the Transferred IP and none of the Seller Business Software that is being made
available pursuant to a Seller Contract being assigned to Purchaser or an
affiliate of Purchaser pursuant to this Agreement contains any “back door,”
“drop dead device,” or “time bomb,” (as such terms are commonly understood in
the software industry) or any other code capable of materially disrupting,
disabling, or enabling unauthorized access to the Seller Business Software.

 

(k) Part 2.5(k) of the Disclosure Schedule identifies all Open Source Software
(as defined below) that is included in the Transferred Assets. For purposes of
this Agreement, “Open Source Software” shall mean any software that contains, or
is derived in any manner (in whole or in part) from, any software that is
distributed as free software, open source software (e.g., Linux) or similar
licensing or distribution models, including software licensed or distributed
under any of the following licenses or distribution models: (i) GNU’s General
Public License (GPL) or Lesser/Library GPL (LGPL); (ii) the Artistic License
(e.g., PERL); (iii) the Mozilla Public License; (iv) the Netscape Public
License; (v) the Sun Community Source License (SCSL); (vi) the Sun Industry
Standards License (SISL); (vii) the BSD License; or (viii) the Apache License.

 

(l) No source code for any Transferred IP has been delivered, licensed or made
available to any escrow agent or other Person who is not, or was not at the time
of disclosure, an employee or consultant of Seller or any Subsidiary of Seller
or an employee or consultant of Parent or Purchaser as a result of this
Agreement. Neither Seller nor any Subsidiary of Seller has any duty or
obligation (whether present, contingent or otherwise) to deliver, license or
make available the source code for any Transferred IP to any escrow agent or
other Person other than to Parent or Purchaser as a result of this Agreement. No
event has occurred, and no circumstance or condition exists, that (with or
without notice or lapse of time) will, or could reasonably be expected to,
result in the delivery, license or disclosure of any source code for any
Transferred IP by Seller or any Subsidiary of Seller or any Person then acting
on their behalf to any other Person other than Parent or Purchaser as a result
of this Agreement.

 

(m) As related to the Business, Seller and each Subsidiary of Seller is in
compliance with all applicable payment card industry requirements, including the
VISA Cardholder Information Security Program (CISP), the MasterCard Site Data
Protection (SDP) program, and the Payment Card Industry Data Security Standard.

 

2.6 Contracts.

 

(a) Part 2.6(a)(i) of the Disclosure Schedule identifies each of the following
Seller Contracts relating to the Business or the Transferred Assets: (i) each
such Seller Contract with any current customer who has purchased, is entitled to
receive, or otherwise has been provided with any Business Offering (other than
any Seller Contract that is currently in effect and does not materially deviate
from the corresponding Standard Form Agreement); (ii) each such Seller Contract
that is currently in effect and relates to maintenance or similar services with
respect to any Business Offering (other than any Seller Contract that is
currently in effect and does not materially deviate from the corresponding
Standard Form Agreement); (iii) each partnership, joint venture or similar
Contract; (iv) each such Seller Contract relating to the acquisition by Seller
or any Subsidiary of Seller of the rights to, or the manufacture or distribution
of any Business Offering; and (v) each Seller Contract relating to the
acquisition, transfer, use, development, sharing or license of any services,
Intellectual Property or Intellectual Property Right that is used in the
development or provision of any Business Offering (other than: (A) software
license agreements for any third-party software that is generally available to
the public on standard terms at a cost of less than $5,000; and
(B) non-disclosure agreements, employee agreements and consulting agreements
entered into by Seller or any Subsidiary of Seller in the ordinary course of
business). Seller has delivered (or, with respect to the Seller Contracts
relating to the Business entered into during the Pre-Closing Period, will
deliver prior to the Closing) to Purchaser accurate and complete copies (or
standard terms in the case of Contracts that do not deviate in any material
respect from the corresponding Standard Form Agreement) of all Seller Contracts
that constitute

 

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Transferred Assets and all other Contracts identified in Part 2.6(a)(i) of the
Disclosure Schedule, other than the Contracts identified on Schedule 8.2(a)(vi).
Neither Seller nor any of its Subsidiaries has any obligation or Liability with
respect to any Seller Contract that constitutes a Transferred Asset except as
specifically set forth in such Seller Contract.

 

(b) With respect to each of the Seller Contracts included in the Transferred
Assets: (i) neither Seller nor any Subsidiary of Seller has (and, to the
Knowledge of Seller, no other Person has) violated or breached, or declared or
committed any default under, any such Seller Contract, except for any violation,
breach or default that, either individually or when taken together with all
other violations, breaches or defaults of all such Seller Contracts, is not
material in any respect; (ii) no event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time) would
reasonably be expected to result in a material violation, breach or default by
Seller or any Subsidiary of Seller (or, to the Knowledge of Seller, by any other
Person) of or under any of the provisions of any such Seller Contract;
(iii) neither Seller nor any Subsidiary of Seller has received any written
notice or, to the Knowledge of Seller’s, any other communication regarding any
actual or alleged material violation or breach of, or material default under,
any such Seller Contract; and (iv) neither Seller nor any Subsidiary of Seller
has waived, either orally or in writing and in a manner that is legally binding
on Seller or any Subsidiary of Seller, any material right under any such Seller
Contract.

 

(c) No Person is renegotiating with Seller or any Subsidiary of Seller any
material amount paid or payable to Seller or any Subsidiary of Seller under any
Seller Contract being assigned to Purchaser or an affiliate of Purchaser
pursuant to this Agreement or any other material term or provision of any such
Seller Contract.

 

(d) Seller does not have any actual knowledge of any reasonable basis upon which
any party to any Seller Contract that is material to the Business may object to:
(i) the assignment to Purchaser of any right under such Seller Contract; or
(ii) the delegation to or performance by Purchaser of any obligation under such
Seller Contract (it being understood that the actual knowledge of Seller for
purposes of this Section 2.6(d) means the actual knowledge of each executive
officer of Seller and of each Person identified on Annex A to Exhibit A without
investigation).

 

2.7 Compliance with Legal Requirements. Except as set forth in Part 2.7 of the
Disclosure Schedule, as related to the Business: (a) Seller and each Subsidiary
of Seller is in compliance in all material respects with each Legal Requirement
that is applicable to the conduct of the Business or the ownership or use of any
of the Transferred Assets; (b) to the Knowledge of Seller, no event has
occurred, and no condition or circumstance exists, that (with or without notice
or lapse of time) would reasonably be expected to constitute or result in a
material violation by Seller or any Subsidiary of Seller of, or a failure on the
part of Seller or any Subsidiary of Seller to comply in any material respect
with, any Legal Requirement in connection with or that is applicable to the
Business or the Transferred Assets; and (c) neither Seller nor any Subsidiary of
Seller has received, at any time, any written notice from any Governmental Body
or any other Person regarding any actual or alleged violation of, or failure to
comply in any material respect with, any Legal Requirement in connection with or
that is applicable to the Business or the Transferred Assets.

 

2.8 Governmental Authorizations. There are no Governmental Authorizations held
by Seller or any of its Subsidiaries that are necessary for the conduct of, or
are primarily used in or held for use for, the Business.

 

2.9 Proceedings; Orders. There is no pending Proceeding to which Seller or any
Subsidiary of Seller is a party or participant (other than if it is
participating in such Proceeding solely as a witness), and, to the Knowledge of
Seller, no Person has threatened to commence any Proceeding to which Seller or
any Subsidiary of Seller is a party or participant (other than if it is
participating in such Proceeding solely as a witness): (a) that involves the
Business or would reasonably be expected to affect the Business or any of the
Transferred Assets; or (b) that challenges, or that would reasonably be expected
to have the effect of preventing, materially delaying, making illegal or
otherwise materially interfering with, any of the Transactions. There is no
Order against Seller or any Subsidiary of Seller relating to the Business or any
of the Transferred Assets (other than Orders issued by the United States Patent
and Trademark Office and other foreign government offices having similar
responsibilities for prosecution of trademark and patent applications included
as Transferred Assets), or to which any of the Transferred

 

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Assets is subject. To the Knowledge of Seller, there is no proposed Order that,
if issued or otherwise put into effect: (i) would reasonably be expected to have
a Business Material Adverse Effect; or (ii) would reasonably be expected to have
the effect of preventing, materially delaying, making illegal or otherwise
materially interfering with any of the Transactions.

 

2.10 Employee and Labor Matters.

 

(a) Part 2.10(a) of the Disclosure Schedule accurately sets forth the name of
each Business Employee, the date of hire by Seller for such employee and the
service date for such employee.

 

(b) To the Knowledge of Seller: (i) no Business Employee has communicated any
intention to terminate his or her employment with Seller or any of its
Subsidiaries; and (ii) no Business Employee is a party to or is bound by any
written confidentiality agreement, noncompetition agreement or other similar
Contract (with any Person) that would reasonably be expected to have a material
adverse effect on the performance by such employee of any of his duties or
responsibilities as an employee of the Business.

 

(c) Neither Seller nor any Subsidiary of Seller is or has been a party to any
collective bargaining agreement or other labor union contract applicable to any
Business Employees. Seller and the applicable Subsidiaries of Seller have
complied in all material respects with all applicable Legal Requirements
pertaining to the employment or termination of employment of Business Employees
related to the Business.

 

(d) With respect to each scheme or arrangement mandated by a Governmental Body
other than the United States with respect to Business Employees and with respect
to each plan, program, policy, practice or Contract providing for employment,
compensation, deferred compensation, retirement benefits, severance, relocation,
repatriation, expatriation, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other benefits, including each
“employee benefit plan” within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) which is or has
been maintained, contributed to, or required to be contributed to by Seller or
any ERISA Affiliate (each, a “Seller Plan”) for the benefit of any current or
former Business Employees that is subject to the laws of a jurisdiction outside
of the United States (each, a “Non-U.S. Seller Plan”), the fair market value of
the assets of each funded Non-U.S. Seller Plan, the liability of each insurer
for any Non-U.S. Seller Plan funded through insurance or the book reserve
established for any Non-U.S. Seller Plan, together with any accrued
contributions, is sufficient in all material respects to procure or provide for
the accrued benefit obligations, as of August 31, 2005, with respect to all
current and former Business Employees in such Non-U.S. Seller Plan according to
the actuarial assumptions and valuations most recently used to determine
employer contributions to such Non-U.S. Seller Plan, and none of the
Transactions or other actions contemplated by this Agreement shall cause such
assets or insurance obligations to be materially less than such benefit
obligations.

 

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2.11 Tax Matters.

 

(a) (i) All of the material Tax Returns required to be filed by Seller with any
Governmental Body with respect to any taxable period ending on or before the
Closing Date that relate in whole or in part to the Business or the Transferred
Assets have been filed or will be filed on or before the applicable due date
(including any extensions of such due date) and all such Tax Returns has been,
or will be when filed, prepared in all material respects in compliance with all
applicable Legal Requirements, (ii) all material Taxes required to be paid by
Seller that relate in whole or in part to the Business or the Transferred Assets
have been paid or will be paid on or before the Closing Date, (iii) all material
Taxes required to be withheld by Seller in connection with amounts paid or owing
to any Business Employee have been duly and timely withheld, and such withheld
Taxes have been either duly and timely paid to the proper Governmental Body or
properly set aside in accounts for such purpose and will be duly and timely paid
to the proper Governmental Body, (iv) no statute of limitations has been
extended or waived by any Tax authority with respect to any Taxes or Tax Returns
referred to in clauses “(i)” through “(iii)”, and (v) there are no outstanding
Tax liens that have been filed by any Tax authority against any of the
Transferred Assets and no claims are being asserted with respect to any Taxes
related to any of the Transferred Assets.

 

(b) There is no dispute or claim concerning any liability for Taxes of Seller
relating to the Business or Transferred Assets claimed or raised by any
Governmental Body in writing and no such claim would reasonably be expected to
be asserted against Purchaser. Since January 1, 2003, neither Seller nor any
Subsidiary of Seller has received any written notice or, to the Knowledge of
Seller, any other communication, relating to any actual or alleged requirement
to file Tax Returns relating to the Business in any jurisdiction in which Seller
does not file Tax Returns relating to the Business.

 

(c) None of the Seller Contracts included in the Transferred Assets will, or
would reasonably be expected to, give rise directly or indirectly to payment of
any amount that would not be deductible pursuant to Sections 162(m), 280G or 404
of the Code.

 

(d) Notwithstanding the foregoing, the representations in Section 2.11(a) and
the first sentence of Section 2.11(b) shall apply only to the extent that: (i) a
lien, claim or Encumbrance can be placed upon any of the Transferred Assets with
respect to Taxes; or (ii) Purchaser or any of its affiliates can be made
directly or indirectly liable with respect to Taxes.

 

2.12 Authority; Binding Nature of Agreements. Seller and each of its
Subsidiaries has the corporate right, power and authority to enter into and to
perform its obligations under each of the Transactional Agreements to which it
is or may become a party; and the execution, delivery and performance by Seller
and each of its Subsidiaries of the Transactional Agreements to which it is or
may become a party have been duly authorized by all necessary corporate action
on the part of Seller (or such Subsidiary) and its board of directors. Seller is
not required to obtain the approval of its stockholders in connection with the
execution, delivery and performance of any of the Transactional Agreements.
Assuming the due authorization, execution and delivery by Purchaser and Parent,
this Agreement constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, subject to: (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors; and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies. Upon the execution by Seller or any of its
Subsidiaries of each other Transactional Agreement to which Seller or any of its
Subsidiaries is a party, such Transactional Agreement will constitute a legal,
valid and binding obligation of Seller or such Subsidiary, as the case may be,
and will be enforceable against Seller or such Subsidiary, as the case may be,
in accordance with their respective terms, subject to: (A) laws of general
application relating to bankruptcy, insolvency and the relief of debtors; and
(B) rules of law governing specific performance, injunctive relief and other
equitable remedies.

 

2.13 Non-Contravention; Consents. Assuming compliance with the HSR Act and any
applicable foreign Antitrust Laws (as defined in Section 4.3(a)), neither the
execution and delivery by Seller or any of its Subsidiaries of any of the
Transactional Agreements, nor the consummation by Seller or any of its
Subsidiaries of any of the Transactions, nor the transfer of any data from
Seller or any Subsidiary of Seller to Purchaser of any affiliate of Purchaser
pursuant to the terms of this Agreement, will (with or without notice or lapse
of time):

 

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(a) contravene, conflict with or result in a violation of: (i) any of the
provisions of the certificate of incorporation, bylaws or similar documents of
Seller or any of its Subsidiaries; or (ii) any resolution adopted by the
stockholders, board of directors or any committee of the board of directors of
Seller or any of its Subsidiaries;

 

(b) contravene, conflict with or result in a violation of any Legal Requirement
in any material respect or any Order to which Seller or any of its Subsidiaries,
or any of the Transferred Assets, is subject;

 

(c) result in the imposition or creation of any Encumbrance upon or with respect
to any Transferred Asset; or

 

(d) contravene, conflict with or result in a material violation or breach of, or
result in a material default under, any provision of any Contract to which
Seller or any of its Subsidiaries is a party or by which Seller or any of its
Subsidiaries, or any of the Transferred Assets, are bound.

 

Except as set forth in Part 2.13 of the Disclosure Schedule and for any filing
under any Antitrust Law, neither Seller nor any of its Subsidiaries is or will
be required to make any filing with or give any notice to, or to obtain any
Consent from, any Person in connection with the execution and delivery by Seller
or any of its Subsidiaries of any of the Transactional Agreements or the
consummation or performance by Seller or any of its Subsidiaries of any of the
Transactions.

 

2.14 Sufficiency of Transferred Assets. Except as set forth in Part 2.14 of the
Disclosure Schedule, the Transferred Assets collectively constitute, and will
collectively constitute as of the Closing Date, all of the properties, rights,
interests and other tangible and intangible assets necessary for the conduct of,
or that are primarily used in or held for use for, the Business as the Business
is currently being conducted and is currently proposed to be conducted by Seller
(or any Subsidiary of Seller).

 

3. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT.

 

Each of Purchaser and Parent represents and warrants, to and for the benefit of
Seller, as follows:

 

3.1 Due Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

 

3.2 Authority. Each of Parent and Purchaser has the corporate right, power and
authority to enter into and to perform its obligations under each Transactional
Agreement to which it is or may become a party, and the execution and delivery
by Purchaser and Parent of each Transactional Agreement to which it is or may
become a party has been duly authorized by all necessary corporate action on the
part of Purchaser, Parent and each of their respective boards of directors.

 

3.3 Binding Nature of Agreements. Assuming the due authorization, execution and
delivery by Seller, this Agreement constitutes a legal, valid and binding
obligation of Purchaser and Parent, enforceable against Purchaser and Parent in
accordance with its terms, subject to: (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
Upon the execution by Purchaser and Parent of each other Transactional Agreement
to which it is a party, such Transactional Agreement will constitute a legal,
valid and binding obligation of Purchaser or Parent, as the case may be, and
will be enforceable against Purchaser or Parent, as the case may be, in
accordance with their respective terms, subject to: (A) laws of general
application relating to bankruptcy, insolvency and the relief of debtors; and
(B) rules of law governing specific performance, injunctive relief and other
equitable remedies.

 

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3.4 Financing. As of the Effective Time, Parent and/or Purchaser will have
sufficient cash, available lines of credit or other sources of readily available
funds to enable it to pay all cash amounts required to be paid as Consideration
in the Transactions.

 

3.5 Proceedings; Orders. There is no pending Proceeding to which Purchaser or
Parent is a party or a participant (other than if it is participating in such
Proceeding solely as a witness), and, to the knowledge of Parent, no Person has
threatened to commence any Proceeding to which Purchaser or Parent is a party or
participant (other than if it is participating in such Proceeding solely as a
witness) that challenges, or that would reasonably be expected to have the
effect of preventing, materially delaying, making illegal or otherwise
materially interfering with, any of the Transactions. To the knowledge of
Parent, there is no proposed Order that, if issued or otherwise put into effect:
(i) would reasonably be expected to have a material adverse effect on the
ability of Purchaser or Parent to comply with or perform any of their respective
covenants or obligations under any of the Transactional Agreements; or
(ii) would reasonably be expected to have the effect of preventing, materially
delaying, making illegal or otherwise materially interfering with any of the
Transactions.

 

3.6 Non-Contravention; Consents. Assuming compliance with the HSR Act and any
applicable foreign Antitrust Laws, neither the execution and delivery by
Purchaser of any of the Transactional Agreements, nor the consummation by
Purchaser of any of the Transactions, will (with or without notice or lapse of
time):

 

(a) contravene, conflict with or result in a violation of: (i) any of the
provisions of the certificate of incorporation or bylaws of Purchaser; or
(ii) any resolution adopted by the stockholders, board of directors or any
committee of the board of directors of Purchaser; or

 

(b) contravene, conflict with or result in a material violation of any Legal
Requirement or any Order to which Purchaser is subject.

 

Except as may be required by Antitrust Laws, or, if Purchaser makes the Stock
Payment Election, as contemplated by the Registration Rights Agreement (as
defined in Section 6.4(d)), neither Purchaser nor Parent is and will be required
to make any filing with or give any notice to, or to obtain any Consent from,
any Person in connection with the execution and delivery by Purchaser of any of
the Transactional Agreements or the consummation or performance by Purchaser of
any of the Transactions.

 

3.7 SEC Filings; Financial Statements. If and only if Purchaser makes the Stock
Payment Election, Parent represents and warrants as follows:

 

(a) Parent has delivered to the Company (or made available on the SEC website)
accurate and complete copies of all registration statements, proxy statements
and other statements, reports, schedules, forms and other documents filed by
Parent with, or Parent Certifications (as defined below) filed or furnished by
Parent with or to, the SEC since January 1, 2004, including all amendments
thereto (collectively, the “Parent SEC Documents”). All statements, reports,
schedules, forms and other documents required to have been filed or furnished by
Parent with or to the SEC since January 1, 2004 have been so filed or furnished
on a timely basis. As of the time it was filed with or furnished to the SEC:
(i) each of the Parent SEC Documents complied as to form in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a 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 to the extent corrected: (A) in the case of Parent SEC
Documents filed or furnished on or prior to the date of this Agreement that were
amended or superseded on or prior to the date of this Agreement, by the filing
or furnishing of the applicable amending or superseding Parent SEC Document; and
(B) in the case of Parent SEC Documents filed or furnished after the date of
this Agreement that are amended or superseded prior to the Effective Time, by
the filing or furnishing of the applicable amending or superseding Parent SEC
Document. Each of the certifications and statements relating to the Parent SEC
Documents required by: (1) the SEC’s Order dated June 27, 2002 pursuant to
Section 21(a)(1) of the Exchange Act (File No. 4-460); (2) Rule 13a-14 or 15d-14
under the Exchange Act; or (3) 18 U.S.C. §1350 (Section 906 of the
Sarbanes-Oxley Act) (collectively, the “Parent Certifications”) is accurate and
complete, and complied as to form and content with all applicable Legal
Requirements in effect at the time such Parent Certification was filed with or
furnished to the SEC.

 

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(b) The consolidated financial statements (including any related notes)
contained or incorporated by reference in the Parent SEC Documents: (i) complied
as to form in all material respects with the published rules and regulations of
the SEC applicable thereto; (ii) were prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered (except as may be indicated in the notes to such financial
statements and, in the case of unaudited statements, as permitted by Form 10-Q,
Form 8-K or any successor form under the Exchange Act, and except that the
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end adjustments that will not, individually or in the
aggregate, be material in amount); and (iii) fairly present in all material
respects the consolidated financial position of Parent and its consolidated
Subsidiaries as of the respective dates thereof and the consolidated results of
operations and cash flows of Parent and its consolidated Subsidiaries for the
periods covered thereby.

 

3.8 Valid Issuance. If and only if Purchaser makes the Stock Payment Election,
the Parent Common Stock to be issued in the Transactions will, when issued in
accordance with the provisions of this Agreement, be validly issued, fully paid
and nonassessable.

 

4. PRE-CLOSING COVENANTS.

 

4.1 Access and Investigation. During the Pre Closing Period Seller shall:
(a) provide Purchaser and its Representatives with reasonable access during
normal business hours to: (i) the Representatives, personnel and assets of
Seller and the Subsidiaries of Seller to the extent such Representatives, and
personnel and assets relate to the Business and the Transferred Assets; and
(ii) to all existing books, records, work papers and other documents and
information to the extent relating to the Business and the Transferred Assets;
(b) provide Purchaser and its Representatives with such copies of existing
books, records, work papers and other documents and information to the extent
relating to the Business and the Transferred Assets as Purchaser may reasonably
request; and (c) Seller and its Representatives use commercially reasonable
efforts to compile and provide Purchaser and its Representatives with such
additional financial, operating and other data and information relating to the
Business and the Transferred Assets as Purchaser may reasonably request,
provided that such requested data and information is substantially similar to
the type of data and information compiled by Seller or any Subsidiary of Seller
prior to the date of this Agreement or during the Pre-Closing Period.

 

4.2 Operation of Business. Unless Seller shall receive the prior written consent
of Purchaser, Seller shall, and shall cause its Subsidiaries to, during the
Pre-Closing Period, comply with the following covenants as they relate to the
Business and the Covered Assets:

 

(a) Seller and each of its Subsidiaries conducts the operations of the Business
in the ordinary course of business and consistent with past practices, except
for actions taken by Seller that are immaterial in all respects;

 

(b) Seller and each of its Subsidiaries uses all commercially reasonable efforts
to: (i) keep available the services of the current Business Employees; and
(ii) maintain its relations and goodwill with all suppliers, customers,
licensors, licensees or independent contractors of the Business, all Business
Employees and all other Persons having business relationships with the Business;

 

(c) Seller and each of its Subsidiaries reasonably promptly repairs, restores or
replaces any Transferred Fixed Assets that are destroyed or damaged;

 

(d) neither Seller nor any Subsidiary of Seller sells, transfers, leases,
licenses or otherwise disposes of or encumbers any of the Covered Assets, other
than as set forth in Section 4.2(e);

 

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(e) neither Seller nor any Subsidiary of Seller: (i) licenses, sells or
otherwise makes available any Business Offering to any Person, other than in the
ordinary course of business consistent with past practice and on terms
consistent with the corresponding Standard Form Agreement; (ii) enters into any
Contract relating to the Business, other than Contracts with respect to the sale
of Business Offerings or the provision of services in the ordinary course of
business consistent with past practice and on terms consistent with the
corresponding Standard Form Agreement; or (iii) amends or terminates any Seller
Contract the rights under which are included in the Covered Assets, or waives,
either orally or in writing and in a manner that is legally binding on Seller or
any Subsidiary of Seller, any material right under any Seller Contract the
rights under which are included in the Covered Assets;

 

(f) neither Seller nor any Subsidiary of Seller: (i) declares or pays any bonus
or declares or makes any cash incentive payment or similar payment to, or
increases the amount of the wages, salary, commissions, benefits or other
compensation (including equity and equity-based compensation) or remuneration
payable to, or accelerates any benefits available to, any of the Business
Employees that are intended to become employees of Purchaser after the Closing
without the prior written consent of Purchaser not to be unreasonably withheld
(except that Seller: (A) may provide routine compensation increases to employees
in the ordinary course of business and in accordance with past practices in
connection with Seller’s customary employee review process; (B) may make
customary bonus payments consistent with past practices in accordance with bonus
and profit sharing plans existing on the date of this Agreement);

 

(g) neither Seller nor any Subsidiary of Seller commences or settles any
Proceeding relating to the Business, other than Proceedings that do not involve
or affect any of the Transferred Assets;

 

(h) neither Seller nor any Subsidiary of Seller takes any action or allows any
action to be taken by Seller or any Subsidiary of Seller or enter into any
transaction that would reasonably be expected to materially delay or interfere
with the consummation of the Transactions;

 

(i) Seller obtains: (A) all Velocity Consents (as such term is defined in
Section 3.5 of the Transition Services Agreement); and (B) any Consents
necessary to enable Seller to continue to use any Intellectual Property or
Intellectual Property Rights of any third party required to be used by Seller to
provide the services that Seller is or may be obligated to provide under the
Transition Services Agreement;

 

(j) each of Seller and its Subsidiaries dedicates at least the same level of
resources to the sales and marketing efforts relating to the Business as it did
during the first two quarters of 2005 and during fiscal year 2004; and

 

(k) neither Seller nor any Subsidiary of Seller agrees, commits or offers (in
writing or otherwise) to take any of the actions prohibited in clauses ”(a)”
through “(j)” of this Section 4.2.

 

4.3 Filings and Consents.

 

(a) Each party shall use commercially reasonable efforts: (i) to file, as soon
as practicable after the date of this Agreement, all notices, reports and other
documents required to be filed by such party with any Governmental Body with
respect to the Transactions, together with a request for early termination of
the applicable waiting period; and (ii) to give all notices required to be given
by such party and use commercially reasonable efforts to obtain each Consent
required to be obtained by such party, in each case in connection with the
Transactions, including: (A) the Consents required under the Seller Contracts
identified in Part 2.13 of the Disclosure Schedule; and (B) the consent of each
party to a Shared Seller Contract to the assignment to Purchasers of the rights
under such Shared Seller Contract that relate the Business or any of the
Business Offerings. Without limiting the generality of the foregoing, Seller,
Purchaser and Parent shall, promptly after the date of this Agreement, prepare
and file the notifications required under the HSR Act and under any other Legal
Requirement that is designed to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade (collectively,
“Antitrust Laws”) in connection with the Transactions. Seller, Purchaser and
Parent shall use

 

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commercially reasonable efforts to respond as promptly as practicable to:
(i) any inquiries or requests (including any “second request”) received from the
Federal Trade Commission or the U.S. Department of Justice for additional
information or documentation; and (ii) any inquiries or requests received from
any state attorney general, foreign antitrust authority or other Governmental
Body in connection with antitrust or related matters.

 

(b) Subject to compliance with applicable Legal Requirements, Parent and
Purchaser shall use commercially reasonable efforts to provide to Seller, and
Seller shall use commercially reasonable efforts to provide to Parent and
Purchaser, as promptly as practicable any information that is required in order
to effectuate any filings or applications by Purchaser, Parent or Seller, as the
case may be, pursuant to Section 4.3(a). Except where prohibited by applicable
Legal Requirements, each of Seller, Parent and Purchaser shall use commercially
reasonable efforts to: (i) consult with and consider the views of the other
party regarding material positions being taken in material filings to be made
under Antitrust Laws in connection with the Transactions; (ii) provide the other
(and its counsel) as promptly as practicable with copies of all material filings
and material written submissions made by such party with any Governmental Body
under any antitrust law in connection with the Transactions (it being understood
that such filings and submissions may be redacted by a party prior to providing
a copy thereof to the other party to remove information that such party believes
in good faith to be confidential, proprietary or competitively sensitive).

 

4.4 Notification of Certain Matters. During the Pre-Closing Period, Seller shall
promptly notify Purchaser in writing of: (a) the discovery by Seller or any
Subsidiary of Seller of any event, condition, fact or circumstance that occurred
or existed on or prior to the date of this Agreement and that caused or
constitutes a breach of any representation or warranty made by Seller in this
Agreement; (b) the discovery by Seller or any Subsidiary of Seller of any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute a breach of any representation
or warranty made by Seller in this Agreement if: (i) such representation or
warranty had been made as of the time of the occurrence, existence or discovery
of such event, condition, fact or circumstance; or (ii) such event, condition,
fact or circumstance had occurred, arisen or existed on or prior to the date of
this Agreement; (c) the discovery by Seller or any Subsidiary of Seller of any
breach of any covenant or obligation of Seller contained in this Agreement;
(d) any Seller Contract related to the Business entered into during the
Pre-Closing Period that would reasonably be expected to be included in the
Transferred Assets (it being understood that with respect to any such Seller
Contract that is a click-through merchant Contract, the disclosure required by
this clause “(d)” need only be made once per week); and (e) the discovery by
Seller or any Subsidiary of Seller of any event, condition, fact or circumstance
that would reasonably be expected to make the timely satisfaction of any of the
conditions set forth in Section 5 or Section 6 impossible or unlikely. No
notification under this Section 4.4 or otherwise shall be deemed to supplement
or amend the Disclosure Schedule for the purpose of: (i) determining the
accuracy of any representation or warranty made by Seller in this Agreement (for
purposes of Section 8 or otherwise); or (ii) determining whether any of the
conditions set forth in Section 5 has been satisfied.

 

4.5 No Negotiation. Seller shall ensure that, during the Pre-Closing Period,
neither Seller nor any Subsidiary of Seller (or any of their respective
Representatives), directly or indirectly: (a) solicits or knowingly encourages
the initiation of any inquiry, proposal or offer from any Person (other than
Parent or Purchaser) relating to any Prohibited Transaction; (b) participates in
any discussions or negotiations with, or provides any non public information to,
any Person (other than Parent or Purchaser) relating to any proposed Prohibited
Transaction (other than to indicate that Seller will not discuss or negotiate
any Prohibited Transaction); or (c) enter into any Contract relating to, any
inquiry, proposal or offer from any Person (other than Parent or Purchaser)
relating to any Prohibited Transaction.

 

4.6 Reasonable Efforts. During the Pre-Closing Period, Seller shall use its
reasonable efforts to cause (and Seller shall ensure that its Subsidiaries use
their reasonable efforts to cause) the conditions set forth in Section 5 to be
satisfied on a timely basis and Purchaser and Parent shall use their respective
reasonable efforts to cause the conditions set forth in Section 6 to be
satisfied on a timely basis.

 

4.7 Registration Rights Agreement; Investor Certification. If Purchaser makes
the Stock Payment Election, (a) Purchaser shall cause Parent to enter into the
Registration Rights Agreement, in substantially the form

 

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attached hereto as Exhibit C (the “Registration Rights Agreement”), governing
the shares of Parent Common Stock to be issued by Parent in connection with the
Transactions; and (b) Seller shall enter into the Investor Certification and
Agreement in substantially the from of Exhibit D (the “Investor Certification”).

 

4.8 Termination of Certain Agreements. Effective as of the Closing, the parties
hereto agree that the Payment Services Integration and Channel Sales Agreement,
dated December 31, 2004, between Seller and Purchaser, and all rights and
obligations of the parties thereunder, shall terminate. Prior to the Closing,
Seller shall terminate, or cause to be terminated, effective as of the Closing
that certain Master License Agreement between Seller and VeriSign Australia
Limited dated July 1, 2002, as amended on March 28, 2004.

 

4.9 Registration. If Purchaser makes the Stock Payment Election, Parent shall
file a Registration Statement on Form S-3 covering the resale by Seller of the
shares of Parent Common Stock to be issued in the Transactions.

 

4.10 Amendment of Certain Contracts. Prior to the Closing Date, Seller shall use
commercially reasonable efforts to amend or cause to be amended in the manner
described in Schedule 4.10, effective as of the Closing Date and in form and
substance reasonably satisfactory to Purchaser, the Seller Contracts identified
on Schedule 4.10 and Purchaser shall use commercially reasonable efforts to
cooperate with Seller in obtaining such amendments.

 

5. CONDITIONS PRECEDENT TO PARENT’S AND PURCHASERS’ OBLIGATION TO CLOSE.

 

Purchasers’ obligation to purchase the Transferred Assets and the obligation of
Parent and Purchaser to take the other actions required to be taken by Parent
and Purchaser at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Purchaser, in whole or in part, in writing):

 

5.1 Accuracy of Representations.

 

(a) The representation and warranty made by Seller in the final sentence of
Section 2.9 shall have been accurate in all respects as of the date of this
Agreement, and shall be accurate in all respects as of the Closing Date as if
made on and as of the Closing Date.

 

(b) All of the representations and warranties made by Seller in this Agreement
shall have been accurate in all material respects as of the date of this
Agreement (without giving effect to any materiality or similar qualifications
contained or incorporated in, and limiting the scope of, such representations
and warranties), and shall be accurate in all material respects as of the
Closing Date as if made on and as of the Closing Date (without giving effect to
any materiality or similar qualifications contained or incorporated in, and
limiting the scope of, such representations and warranties).

 

5.2 Performance of Obligations. All of the covenants and obligations that Seller
is required to comply with or to perform at or prior to the Closing shall have
been complied with and performed in all material respects.

 

5.3 Consents. All Consents identified on Schedule 5.3, shall have been obtained
and shall be in full force and effect.

 

5.4 No Business Material Adverse Effect. There shall have been no Business
Material Adverse Effect since the date of this Agreement, and no event shall
have occurred and no condition or circumstance shall exist that would reasonably
be expected to give rise to a Business Material Adverse Effect.

 

5.5 Antitrust Matters. (a) The waiting period applicable to the consummation of
the sale of the Transferred Assets under the HSR Act and under any applicable
foreign antitrust or competition law or regulation or

 

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other similar foreign Legal Requirement shall have expired or been terminated,
and there shall not be in effect any voluntary agreement between Purchaser or
Seller on the one hand and the Federal Trade Commission, the Department of
Justice or any similar applicable foreign Governmental Body pursuant to which
Purchaser or Seller has agreed not to consummate the sale of the Transferred
Assets for any period of time; and (b) any Governmental Authorization or other
Consent required to be obtained with respect to the sale of the Transferred
Assets under any applicable antitrust or competition law or regulation or other
similar Legal Requirement shall have been obtained and shall remain in full
force and effect, and no such Governmental Authorization or other Consent so
obtained shall require, contain or contemplate any term, limitation, condition
or restriction that would reasonably be expected to be materially burdensome to
Purchasers, Parent or any of their respective affiliates.

 

5.6 Documents. Purchaser shall have received the following documents, each of
which shall be in full force and effect:

 

(a) a Transition Services Agreement, in substantially the form of Exhibit E (the
“Transition Services Agreement”), duly executed by Seller;

 

(b) a License Agreement, in substantially the form of Exhibit F (the “License
Agreement”), duly executed by Seller;

 

(c) a Noncompetition Agreement, in substantially the form of Exhibit G (the
“Noncompetition Agreement”), duly executed by Seller;

 

(d) Non-Solicitation/No-Hire Agreements, in substantially the form of Exhibit H
(the “Non-Solicitation/No-Hire Agreement”), duly executed by each of individuals
identified in Schedule 5.6(d);

 

(e) a Trademark License Agreement, in substantially the form of Exhibit I (the
“Trademark License Agreement”), duly executed by Seller;

 

(f) if Purchaser has made the Stock Payment Election, the Investor
Certification, duly executed by Seller;

 

(g) the Bill of Sale and Assignment and Assumption Agreement, duly executed by
Seller and any Subsidiary of Seller that holds any right, title or interest in
or to any Transferred Asset immediately prior to the Closing;

 

(h) a certificate (the “Seller Closing Certificate”) duly executed by Seller to
the effect that: (i) the conditions set forth in Sections 5.1, 5.2 and 5.4 have
been satisfied; and (ii) the condition set forth in Section 5.7 has been
satisfied to the extent that it relates to Proceedings to which Seller or any
Subsidiary of Seller is or is threatened to be a party or in which Seller or any
Subsidiary of Seller is or is threatened to be a participant;

 

(i) recordable assignment agreements with respect to the Transferred Patents and
such bills of sale, endorsements, assignments, business transfer agreements and
other documents as may be reasonably necessary or appropriate to assign, convey,
transfer and deliver to Purchaser or an affiliate of Purchaser good and valid
title to the Transferred Assets free and clear of any Encumbrances; and

 

(j) such other documents as Purchaser may reasonably request for the purpose of
evidencing the satisfaction of any condition set forth in this Section 5.

 

5.7 No Proceedings. There shall not be pending or threatened any Proceeding:
(a) challenging or seeking to restrain or prohibit any of the Transactions;
(b) seeking material damages, or other relief that would reasonably be expected
to be material, from Purchaser or any of its affiliates in connection with any
of the Transactions; or (c) that would reasonably be expected to have the effect
of preventing, materially delaying, making

 

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illegal or otherwise materially interfering with any of the Transactions;
provided, however, that Parent and Purchaser shall not be permitted to assert
that the condition set forth in this Section 5.7 is not satisfied with respect
to any Proceeding brought or threatened by any non-Governmental Body that arises
or results from any action or omission by or on behalf of Parent or Purchaser,
other than the execution and delivery of this Agreement.

 

5.8 No Prohibition. No temporary restraining order, preliminary or permanent
injunction or other Order preventing the consummation of any of the Transactions
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to any of the Transactions that makes consummation of the
Transactions illegal.

 

5.9 Employees.

 

(a) All of the individuals identified on Schedule 5.9(a) shall have accepted
employment, to be effective as of the day following the Closing Date, with
Purchaser.

 

(b) At least 80% of the individuals identified on Schedule 5.9(b) shall have
accepted employment, to be effective as of the day following the Closing Date,
with Purchaser.

 

(c) At least 80% of the individuals identified on Schedule 5.9(c) shall have
accepted employment, to be effective as of the day following the Closing Date,
with Purchaser.

 

(d) At least 80% of the individuals identified on Schedule 5.9(d) shall have
accepted employment, to be effective as of the day following the Closing Date,
with Purchaser.

 

5.10 Termination of Contracts. Seller shall have provided Purchaser with
evidence satisfactory to Purchaser as to the termination of the Contracts
identified on Schedule 5.10.

 

6. CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE.

 

Seller’s obligation to sell the Transferred Assets and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions:

 

6.1 Accuracy of Representations. All of the representations and warranties made
by Parent and Purchaser in this Agreement shall have been accurate in all
material respects as of the date of this Agreement (without giving effect to any
materiality or similar qualifications contained or incorporated in, and limiting
the scope of, such representations and warranties), and shall be accurate in all
material respects as of the Closing Date as if made on and as of the Closing
Date (without giving effect to any materiality or similar qualifications
contained or incorporated in, and limiting the scope of, such representations
and warranties).

 

6.2 Performance of Obligations. All of the covenants and obligations that Parent
and Purchaser are required to comply with or to perform pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of said
covenants and obligations (considered individually), shall have been complied
with and performed in all material respects.

 

6.3 Antitrust Matters. (a) The waiting period applicable to the consummation of
the sale of the Transferred Assets under the HSR Act and under any applicable
foreign antitrust or competition law or regulation or other similar foreign
Legal Requirement shall have expired or been terminated, and there shall not be
in effect any voluntary agreement between Purchaser or Seller on the one hand
and the Federal Trade Commission, the Department of Justice or any similar
applicable foreign Governmental Body pursuant to which Purchaser or Seller has
agreed not to consummate the sale of the Transferred Assets for any period of
time; and (b) any Governmental Authorization or other Consent required to be
obtained with respect to the sale of the Transferred Assets under any applicable
antitrust or competition law or regulation or other similar Legal Requirement
shall have been obtained and shall remain in full force and effect.

 

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6.4 Documents. Seller shall have received the following documents, each of which
shall be in full force and effect:

 

(a) the Bill of Sale and Assignment and Assumption Agreement, duly executed by
Purchasers;

 

(b) the License Agreement duly executed by Purchaser;

 

(c) a VeriSign Master Services and Strategic Relationship Agreement, in
substantially the form attached hereto as Exhibit J (the “Strategic Relationship
Agreement”) duly executed by Parent; and

 

(d) if Purchaser makes the Stock Payment Election, the Registration Rights
Agreement, duly executed by Parent;

 

(e) the Transition Services Agreement, duly executed by Purchaser;

 

(f) the Trademark License Agreement;

 

(g) the Purchaser Non-Solicitation Agreement in substantially the form attached
hereto as Exhibit K (the “Purchaser Non-Solicitation Agreement”), duly executed
by Purchaser and Parent; and

 

(h) a certificate executed by Purchaser and containing the representation and
warranty of Purchaser that the conditions set forth in Sections 6.1 and 6.2 have
been duly satisfied.

 

6.5 No Proceedings. There shall not be pending or threatened any Proceeding:
(a) challenging or seeking to restrain or prohibit any of the Transactions;
(b) seeking material damages, or other relief that would reasonably be expected
to be material, from Seller or any of its Subsidiaries in connection with any of
the Transactions; or (c) that would reasonably be expected to have the effect of
preventing, materially delaying, making illegal or otherwise materially
interfering with any of the Transactions; provided, however, that Seller shall
not be permitted to assert that the condition set forth in this Section 6.5 is
not satisfied with respect to any Proceeding brought or threatened by any
non-Governmental Body that arises or results from any action or omission by or
on behalf of Seller, other than the execution and delivery of this Agreement.

 

6.6 No Prohibition. No temporary restraining order, preliminary or permanent
injunction or other Order preventing the consummation of any of the Transactions
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to any of the Transactions that makes consummation of the
Transactions illegal.

 

6.7 Listing. If Purchaser makes the Stock Payment Election, the shares of Parent
Common Stock to be issued in the Transactions shall have been approved for
listing (subject to notice of issuance) on the NASDAQ National Market.

 

6.8 Freely Tradable Shares. If Purchaser makes the Stock Payment Election, the
shares of Parent Common Stock to be issued in the Transactions shall, as of the
Closing Date, be freely tradable shares in the public market that are registered
for public resale under the Securities Act on a registration statement on Form
S-3 that, to the extent necessary, has been declared effective by the SEC (and
not withdrawn or terminated).

 

7. TERMINATION.

 

7.1 Termination Events. This Agreement may be terminated prior to the Closing:

 

(a) by the mutual written consent of Purchaser and Seller;

 

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(b) by Purchaser if the Closing has not taken place on or before January 31,
2006; provided, however, that Purchaser shall not be permitted to terminate this
Agreement pursuant to this Section 7.1(b) if the failure to consummate the
transactions contemplated by this Agreement by January 31, 2006 is caused by a
breach by Purchaser or Parent of any covenant or obligation in this Agreement
required to be performed by Purchaser or Parent at or prior to the Closing;

 

(c) by Seller if the Closing has not taken place on or before January 31, 2006;
provided, however, that Seller shall not be permitted to terminate this
Agreement pursuant to this Section 7.1(c) if the failure to consummate the
transactions contemplated by this Agreement by January 31, 2006 is caused by a
breach by Seller of any covenant or obligation in this Agreement required to be
performed by Seller at or prior to the Closing;

 

(d) by either Purchaser or Seller if a court of competent jurisdiction or other
Governmental Body shall have issued a final and nonappealable order, decree or
ruling, or shall have taken any other action, having the effect of permanently
restraining, enjoining or otherwise prohibiting any of the Transactions;

 

(e) by Purchaser if: (i) any of Seller’s representations and warranties
contained in this Agreement shall have been inaccurate as of the date of this
Agreement or shall have become inaccurate as of any subsequent date (as if made
on such subsequent date), such that the condition set forth in Section 5.1 would
not be satisfied; or (ii) any of Seller’s covenants contained in this Agreement
shall have been breached such that the condition set forth in Section 5.2 would
not be satisfied; provided, however, that Purchaser may not terminate this
Agreement under this Section 7.1(e) on account of an inaccuracy in Seller’s
representations and warranties, or on account of a breach of a covenant by
Seller unless such inaccuracy or breach (if curable) is not cured by Seller
within 30 calendar days after receiving written notice from Purchaser of such
inaccuracy or breach; or

 

(f) by Seller if: (i) any of the representations and warranties of Purchaser
contained in this Agreement shall have been inaccurate as of the date of this
Agreement or shall have become inaccurate as of any subsequent date (as if made
on such subsequent date), such that the condition in Section 6.1 would not be
satisfied; or (ii) if any of the covenants of Purchaser contained in this
Agreement shall have been breached such that the condition set forth in
Section 6.2 would not be satisfied; provided, however, that Seller may not
terminate this Agreement under this Section 7.1(f) on account of an inaccuracy
in the representations and warranties of Purchaser or Parent or on account of a
breach of a covenant by Purchaser or Parent unless such inaccuracy or breach (if
curable) is not cured by Purchaser within 30 calendar days after receiving
written notice from Seller of such inaccuracy or breach.

 

7.2 Termination Procedures. If Purchaser wishes to terminate this Agreement
pursuant to Section 7.1(b), Section 7.1(d) or Section 7.1(e), Purchaser shall
deliver to Seller a written notice stating that Purchaser is terminating this
Agreement and setting forth a brief description of the basis on which Purchaser
is terminating this Agreement. If Seller wishes to terminate this Agreement
pursuant to Section 7.1(c), Section 7.1(d) or Section 7.1(f), Seller shall
deliver to Purchaser a written notice stating that Seller is terminating this
Agreement and setting forth a brief description of the basis on which Seller is
terminating this Agreement.

 

7.3 Effect of Termination. If this Agreement is terminated pursuant to
Section 7.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) no party shall be relieved of any
obligation or other Liability arising from any breach by such party of any
provision of this Agreement; and (b) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in
Sections 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, 10.13,
10.14, 10.15, and 10.17.

 

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8. INDEMNIFICATION, ETC.

 

8.1 Survival of Representations, Etc.

 

(a) Subject to Section 8.1(d), (i) the representations and warranties of Seller
(including the representations and warranties set forth in Section 2 and the
representations and warranties set forth in Seller Closing Certificate), and any
claim for a breach of a covenant or obligation required to be performed by
Seller prior to the Closing, shall survive the Closing and shall expire on the
second anniversary of the Closing Date, and (ii) each covenant and obligation
required to be performed after the Closing by Seller shall survive the Closing
and, if such covenant or obligation has an express termination date, shall
expire on such termination date; provided, however, that if a Claim Notice (as
defined in Schedule 10.9(c)) with respect to a particular representation,
warranty or breach of a covenant or obligation of or by Seller is given to
Seller on or prior to the applicable expiration date, then, notwithstanding
anything to the contrary contained in this Section 8.1(a), such representation,
warranty or claim for breach shall not so expire with respect to the claim or
claims described in such Claim Notice, but rather shall remain in full force and
effect with respect to such claim or claims until such time as such claim or
claims (including any indemnification claim asserted by any Purchaser
Indemnified Person under Section 8.2) have been fully and finally resolved. The
representations and warranties set forth in Section 3, and any claim for a
breach of a covenant or obligation required to be performed by Purchaser prior
to the Closing, shall expire on the second anniversary of the Closing Date, and
each covenant and obligation required to be performed after the Closing by
Purchaser shall survive the Closing and, if such covenant or obligation has an
express termination date, shall expire on such termination date; provided,
however, that if a Claim Notice with respect to a particular representation or
warranty or breach of a covenant or obligation of Purchaser or Parent is given
to Purchaser or Parent on or prior to the applicable expiration date, then,
notwithstanding anything to the contrary contained in this Section 8.1(a), such
representation, warranty or claim for breach shall not so expire with respect to
the claim or claims described in such Claim Notice, but rather shall remain in
full force and effect with respect to such claim or claims until such time as
such claim or claims (including any indemnification claim asserted by any Seller
Indemnified Person under Section 8.3) have been fully and finally resolved.

 

(b) The representations, warranties, covenants and obligations of Seller, and
the rights and remedies that may be exercised by the Purchaser Indemnified
Persons, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or any knowledge of, any
of the Purchaser Indemnified Persons or any of their Representatives, except as
set forth in the Disclosure Schedule. The representations, warranties, covenants
and obligations of Purchaser and Parent, and the rights and remedies that may be
exercised by the Seller Indemnified Persons, shall not be limited or otherwise
affected by or as a result of any information furnished to, or any investigation
made by or any knowledge of, any of the Seller Indemnified Persons or any of
their Representatives.

 

(c) For purposes of this Agreement, each statement or other item of information
set forth in the Disclosure Schedule shall be deemed to be a representation and
warranty made by Seller in this Agreement.

 

(d) Nothing contained in this Section 8.1 or elsewhere in this Agreement shall
limit any rights or remedy of any Purchaser Indemnified Person or any Seller
Indemnified Person for claims based on fraud or willful misconduct.

 

8.2 Indemnification by Seller.

 

(a) If the Closing occurs, Seller shall hold harmless and indemnify each of the
Purchaser Indemnified Persons from and against, and shall compensate and
reimburse each of the Purchaser Indemnified Persons for, any Damages that are
suffered or incurred by any of the Purchaser Indemnified Persons or to which any
of the Purchaser Indemnified Persons otherwise becomes subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
that arise from or as a result of, or are connected with:

 

(i) any inaccuracy in or breach of any of the representations or warranties made
by Seller in this Agreement as of the date of this Agreement;

 

(ii) any inaccuracy in or breach of any of the representations or warranties
made by Seller in this Agreement as if such representation and warranty was made
as of the Closing Date;

 

25

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(iii) any breach of any covenant or obligation of Seller contained in this
Agreement;

 

(iv) any Liability of Seller or any Subsidiary of Seller (and any Claim against
any Purchaser Indemnified Person relating to any such Liability or any Liability
of Seller or any Subsidiary of Seller otherwise relating to any circumstance,
condition or event that existed or occurred prior to the Closing with respect to
the Business), other than the Assumed Liabilities and any matters referred to in
clause “(viii)” of this sentence;

 

(v) any Liability to which Purchaser or any of the other Purchaser Indemnified
Persons may become subject and that arises from or relates to any failure of
Seller or any Subsidiary of Seller to comply with any bulk transfer law or
similar Legal Requirement in connection with any of the Transactions;

 

(vi) any Liability to which Purchaser or any of the other Purchaser Indemnified
Persons may become subject and that arises from or relates to any provision of
any of the Seller Contracts set forth on Schedule 8.2(a)(vi) that is
inconsistent with the terms of the corresponding Standard Form Agreement (other
than inconsistencies that are immaterial in all respects) (it being understood
that all disclosures in the Disclosure Schedule regarding such Seller Contracts
shall be disregarded for purposes of this Section 8.2(a)(vi));

 

(vii) any matter identified or referred to in Schedule 8.2(a)(vii), subject to
the limitations set forth in Schedule 8.2(a)(vii); or

 

(viii) any matter identified or referred to in Schedule 8.2(a)(viii).

 

(b) Subject to Section 8.2(d), Seller shall not be required to make any
indemnification payment pursuant to Section 8.2(a)(i), Section 8.2(a)(ii),
Section 8.2(a)(vi) or Section 8.2(a)(viii) until such time as the total amount
of all Damages that have been suffered or incurred by any one or more of the
Purchaser Indemnified Persons, or to which any one or more of the Purchaser
Indemnified Persons has or have otherwise become subject, exceeds $2,250,000
(the “Threshold Amount”). If the total amount of such Damages exceeds the
Threshold Amount, then the Purchaser Indemnified Persons shall be entitled to be
indemnified against and compensated and reimbursed for the entire amount of such
Damages, and not merely the portion of such Damages exceeding the Threshold
Amount.

 

(c) In no event shall the maximum aggregate amount of Damages which the
Purchaser Indemnified Persons shall be entitled to be indemnified against with
respect to the matters referred to in Sections 8.2(a)(i), 8.2(a)(ii), 8.2(a)(v),
8.2(a)(vi), 8.2(a)(vii) and 8.2(a)(viii) exceed $55,500,000. In no event shall
the maximum aggregate amount of Damages which the Purchaser Indemnified Persons
shall be entitled to be indemnified against with respect to the matters referred
to in Section 8.2(a)(iii) exceed the amount of the Consideration.

 

(d) The limitations that are set forth in Sections 8.2(b) shall not apply:
(i) in the case of fraud or willful misconduct; (ii) to the matters referred to
in Section 8.2(a)(iii) or Section 8.2(a)(iv). The limitations that are set forth
in Section 8.2(c) shall not apply: (i) in the case of fraud or willful
misconduct; or (ii) to the matters referred to in Section 8.2(a)(iv).

 

8.3 Indemnification by Parent and Purchaser.

 

(a) If the Closing occurs, Purchaser and Parent shall jointly and severally hold
harmless and indemnify Seller, Seller’s current and future affiliates and the
respective successors and assigns of such persons (the “Seller Indemnified
Persons”) from and against, and shall compensate and reimburse the Seller
Indemnified Persons for, any Damages that are actually suffered or incurred by
any Seller Indemnified Person (regardless of whether or not such Damages relate
to any third party claim) that arise from or as a result of, or are connected
with,

 

26

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(i) any inaccuracy in or breach of any of the representations or warranties made
by Purchaser and Parent in this Agreement;

 

(ii) any inaccuracy in or breach of any of the representations or warranties
made by Purchaser and Parent in this Agreement as if such representation and
warranty was made as of the Closing Date;

 

(iii) any breach of any covenant of Purchaser or Parent contained in this
Agreement;

 

(iv) the failure by Purchaser to perform in all respects or to satisfy any
Assumed Liabilities;

 

(v) any Liabilities directly related to the provision of the Business Offerings
by Purchaser, in any case only to the extent that such Liabilities arise solely
from actions taken by Purchaser in the provision of the Business Offerings after
the Closing Date (it being understood that, for the avoidance of doubt, this
clause shall not apply to any such Liabilities that relate to or result from the
matters set forth on Schedule 8.3(a)(v)); or

 

(vi) any failure by Parent or Purchaser to reimburse Seller for amounts paid by
Seller in connection with the matters identified or referred to in Schedule
8.2(a)(vii) that Parent and Purchaser are required to reimburse or pay pursuant
to Schedule 8.2(a)(vii).

 

(b) Subject to Section 8.3(d), neither Purchaser nor Parent shall be required to
make any indemnification payment pursuant to Section 8.3(a)(i) or
Section 8.3(a)(ii) for any breach of the representations and warranties made by
it in this Agreement until such time as the total amount of all Damages
(including the Damages arising from such breach and all other Damages arising
from any other breaches of any representations or warranties of Parent and
Purchaser) that have been suffered or incurred by any one or more of the Seller
Indemnified Persons, or to which any one or more of the Seller Indemnified
Persons has or have otherwise become subject, exceeds the Threshold Amount. If
the total amount of such Damages exceeds the Threshold Amount, then the Seller
Indemnified Persons shall be entitled to be indemnified against and compensated
and reimbursed for the entire amount of such Damages, and not merely the portion
of such Damages exceeding the Threshold Amount.

 

(c) Subject to Section 8.3(d), in no event shall the maximum aggregate amount of
Damages which the Seller Indemnified Persons shall be entitled to be indemnified
against with respect to a breach of the representations and warranties of Parent
and Purchaser contained in this Agreement exceed $55,500,000. In no event shall
the maximum aggregate amount of Damages which the Seller Indemnified Persons
shall be entitled to be indemnified against with respect to the matters referred
to in Section 8.3(a)(iii) exceed the amount of the Consideration.

 

(d) The limitations that are set forth in Sections 8.3(b) and 8.3(c) shall not
apply: (i) in the case of fraud or willful misconduct; or (ii) to the matters
referred to in Section 8.3(a)(iv).

 

8.4 Defense of Third Party Claims.

 

(a) If (i) either Purchaser receives written notice of the commencement of any
Proceeding against Purchaser or against any other Purchaser Indemnified Person,
or Seller receives written notice of the commencement of any Proceeding against
Seller or against any other Seller Indemnified Person; and (ii) a claim for
indemnification, compensation or reimbursement is to be made under this
Section 8 with respect to such Proceeding, then Purchaser or Seller, as the case
may be, shall promptly notify the other (the “Indemnifying Person”) of the
commencement of such Proceeding; provided, however, that any failure on the part
of Purchaser or Seller, as the case may be, to notify the Indemnifying Person of
the commencement of such Proceeding shall not limit any of the obligations of
the Indemnifying Person, or any of the rights of any Purchaser Indemnified
Person or Seller Indemnified Person, as the case may be (the “Indemnified
Person”) under this Section 8 (except to the extent such

 

27

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failure materially prejudices the defense of such Proceeding). If, within ten
days after receiving notification of the commencement of any such Proceeding,
the Indemnifying Person delivers to the Indemnified Person a written notice
setting forth the election of the Indemnifying Person to assume the defense of
such Proceeding, then, subject to subsections “(b)” and “(c)” below:

 

(i) the Indemnifying Person shall be entitled to assume the defense of such
Proceeding, at the sole expense of the Indemnifying Person, with reputable
counsel reasonably satisfactory to the Indemnified Person; and

 

(ii) as long as the Indemnifying Person conducts such defense, the Indemnifying
Person shall not be required to reimburse any Indemnified Person for any fees
paid to any other counsel representing such Indemnified Person in such
Proceeding for legal services rendered while the Indemnifying Person is
conducting such defense (it being understood that the Indemnifying Person shall
be required to reimburse the Indemnified Persons for any fees paid to counsel
representing any of the Indemnified Persons in such Proceeding for legal
services rendered prior to the time the Indemnified Person receives notice of
the election of the Indemnifying Person to assume such defense).

 

(b) If the Indemnifying Person assumes the defense of a Proceeding in accordance
with Section 8.4(a) above, then:

 

(i) it will be deemed conclusively established for purposes of this Agreement
that all claims made in such Proceeding are within the scope of and are subject
to the indemnification provisions set forth in Section 8, and the Indemnifying
Person shall not be permitted to contest the applicability of Section 8 to such
Proceeding or to contest the Indemnifying Person’s obligation to provide
indemnification with respect thereto;

 

(ii) the Indemnifying Person shall keep the Indemnified Person informed of all
material developments relating to such Proceeding;

 

(iii) each of the Indemnified Persons shall be entitled to participate (at their
own expense) in the defense of such Proceeding; and

 

(iv) the Indemnifying Person shall not be permitted to effect any settlement,
adjustment or compromise of such Proceeding or any of the claims made in
connection therewith without the prior written consent of the Indemnified Person
(which consent shall not be unreasonably withheld or delayed) unless: (A) such
settlement, adjustment or compromise involves no finding or admission of any
breach by any Indemnified Person of any obligation to any other Person or any
violation by any Indemnified Person of any Legal Requirement; (B) such
settlement, adjustment or compromise has no effect on any other claim that may
be made against any Indemnified Person; and (C) the sole relief provided in
connection with such settlement, adjustment or compromise is monetary damages
that are paid in full by the Indemnifying Person or any other relief that is
enforceable only against such Indemnifying Person.

 

If the Indemnifying Person does not elect (within the ten-day time period
specified in Section 8.4(a) above) to assume the defense of a Proceeding in
accordance with Section 8.4(a) above, then: (1) the Indemnified Person shall
have the exclusive right, at its election, to control the defense of such
Proceeding (with counsel selected by the Indemnified Person and reasonably
satisfactory to the Indemnifying Person); and (2) the Indemnifying Person will
be bound by any judgment entered or any determination made in such Proceeding
and by any settlement, adjustment or compromise effected by any Purchaser
Indemnified Person with respect to such Proceeding provided that the
Indemnifying Person consents in writing to such settlement, adjustment or
compromise.

 

(c) Notwithstanding anything to the contrary contained in this Section 8.4, and
notwithstanding any election made by the Indemnifying Person to assume the
defense of any Proceeding in

 

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accordance with Section 8.4(a), the Indemnified Person may (by notifying the
Indemnifying Person) elect to assume, and shall have the exclusive right to
control, the defense of any Proceeding of the type referred to in Section 8.4(a)
(with counsel selected by the Indemnified Person and reasonably satisfactory to
the Indemnifying Person) if:

 

(i) the Indemnifying Person is also a party to such Proceeding, and counsel to
the Indemnified Person determines in good faith that joint representation would
give rise to a conflict of interest or would otherwise be inappropriate in such
Proceeding; or

 

(ii) the Indemnified Person is a Purchaser Indemnified Person and such
Proceeding relates directly to any Transferred IP;

 

provided, however, that, if the Indemnified Person assumes the defense of a
Proceeding in accordance with this Section 8.4(c): (A) the Indemnified Person
shall keep the Indemnifying Person informed of all material developments
relating to such Proceeding; (B) the Indemnifying Person shall be entitled to
participate (at its own expense) in the defense of such Proceeding; and (C) the
Indemnified Person shall not settle, adjust or compromise such Proceeding or any
of the claims made in connection therewith without the prior written consent of
the Indemnifying Person (which consent may not be unreasonably withheld or
delayed by the Indemnifying Person).

 

9. POST-CLOSING MATTERS.

 

9.1 Employee Matters.

 

(a) Purchaser will extend an offer of employment to certain of the Business
Employees who are actively employed by Seller or a Subsidiary of Seller as of
the date such offer is extended. On the later of (i) the day following the
Closing Date or (ii) the date preceding such date on which Purchaser’s offer of
employment to an applicable Business Employee may become effective (the “Hiring
Date”), Seller or the applicable Subsidiary of Seller shall terminate the
employment of each Business Employee who receives and accepts an offer of
employment extended by Purchaser. Effective as of the applicable Hiring Date,
Purchaser will hire each Business Employee who timely accepts the offer of
employment extended to such individual by Purchaser and who satisfies all
contingencies of such offer (each a “Hired Employee”). In connection with the
offers of employment described in this Section 9.1(a), Seller shall not
interfere with Purchaser’s solicitation of such Business Employees, and Seller
shall provide such reasonable assistance as Purchaser may reasonably request in
connection with such solicitation of employment, provided that such solicitation
is conducted during normal business hours and does not interfere with Seller’s
operations.

 

(b) Purchaser will use commercially reasonable efforts to compensate and/or
provide each Hired Employee with employee benefit programs and policies that are
substantially comparable in the aggregate to the benefits provided under
Purchaser’s or its Subsidiaries’ employee benefit programs to similarly situated
employees (it being understood that nothing in this sentence is intended to bind
Purchaser with respect to severance or similar benefits).

 

(c) Seller and each Subsidiary of Seller shall be fully responsible for any and
all Liabilities and Claims arising out of or relating to: (i) Seller’s or any of
its Subsidiaries’ or ERISA Affiliate’s employment or termination of employment
of any Business Employee, and (ii) Seller Plans (collectively, the “Retained
Employment Liabilities”). Retained Employment Liabilities also shall include any
Liabilities and Claims relating to employment agreements, change in control
agreements, sale bonuses and other retention arrangements established by Seller
or its ERISA Affiliates regardless of whether such Liabilities and Claims arise
before, on or after the Closing Date. Seller shall reimburse, indemnify and hold
harmless Purchaser, its affiliates and its employee benefit plans for any and
all Liabilities and Claims incurred by any of them in connection with any
Retained Employment Liabilities.

 

(d) Except as provided in Section 9.1(c), Purchaser shall be fully responsible
for any and all Liabilities and Claims arising out of or relating to:
(i) Purchaser’s employment or termination of employment of any

 

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Hired Employee; and (ii) Purchaser’s employee benefit plans, except (under
clauses “(i)” and “(ii)” of this sentence) to the extent the Liability or Claim
relates to any circumstance, condition or event that existed or occurred prior
to the Hiring Date (collectively referred to herein as “Post-Hiring Date
Employment Liabilities”). Purchaser shall reimburse, indemnify and hold harmless
Seller, its Subsidiaries and the Seller Plans for any and all Liabilities and
Claims incurred by any of them in connection with any Post-Hiring Date
Employment Liabilities.

 

(e) Purchaser shall provide each Hired Employee with credit for eligibility and
vesting (but not benefit accrual) purposes under Purchaser’s 401(k) plan for
service on and prior to the Hiring Date with Seller and its Subsidiaries
credited under the comparable Seller Plans. Such service shall not be recognized
for any purpose under any defined benefit pension plan, retiree health plan,
sabbatical program or for determining the amount of any severance benefit.

 

(f) Effective as of the applicable Hiring Date, Seller shall permit each Hired
Employee to: (i) elect a distribution of his or her account balance in Seller’s
401(k) Plan, pursuant to the provisions thereof; or (ii) elect to retain his/her
account balance in Seller’s 401(k) Plan to the extent required by applicable
Legal Requirements.

 

(g) Seller shall provide healthcare continuation coverage, under COBRA, or
similar state statute, to all current and former Business Employees (including
all Business Employees who do not become Hired Employees) who are or become
qualified M&A beneficiaries (as may be defined in Section 4980B(g)(1) of the
Code or applicable regulations) with respect to the Seller Plans.

 

(h) Responsibility for workers’ compensation claims of Business Employees
arising out of conditions having a date of injury (or, in the case of a claim
relating to occupational illness or disease, the last significant exposure)
prior to or on the Closing Date (or the applicable Hiring Date, if later) shall
remain with Seller or Seller’s Subsidiaries. Purchaser shall have responsibility
for workers’ compensation claims of Hired Employees arising out of conditions
having a date of injury (or, in the case of a claim relating to occupational
illness or disease, the last significant exposure) after the applicable Hiring
Date.

 

(i) Seller and Seller’s Subsidiaries shall retain full responsibility for
compliance with those provisions of the Worker’s Adjustment and Retraining
Notification Act of 1988, as amended, and any similar Legal Requirement that is
binding upon Seller or any Subsidiary of Seller and shall indemnify Purchaser
for any Liabilities related thereto.

 

(j) As of the applicable Hiring Date, Seller shall, and shall cause each
applicable Subsidiary of Seller to, terminate, waive and release its rights
under any covenants regarding noncompetition, non-solicitation, conflicting
obligations and other similar rights (but only to the extent such covenants,
obligations or rights are related to the Business or the Transferred Assets)
under any Contracts between Seller or any of its Subsidiaries and the Hired
Employees provided that such Hired Employee commences employment with Purchaser.

 

(k) Prior to the Closing Date (or the applicable Hiring Date, if later), neither
Seller nor any of its Subsidiaries shall communicate with Business Employees
regarding matters relating to post-Hiring Date employment with Purchaser,
including post-Hiring Date employee benefit plans and compensation, without the
prior written approval of Purchaser.

 

(l) In connection with the Transactions, certain Hired Employees will be
eligible to receive a bonus, subject to certain conditions and approval of the
Transactions by Parent’s board of directors. The size of the bonus pool and
terms of the payments will be mutually agreed upon by Parent and Seller.

 

(m) No provision of this Agreement shall create any third-party beneficiary
rights in any employee of Seller, any beneficiary or dependent thereof, or any
collective bargaining representative thereof, with respect to the compensation,
terms and conditions of employment and/or benefits that may be provided to any
employee of Seller by Purchaser or under any benefit plan which Purchaser may
maintain.

 

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9.2 Tax Cooperation; Allocation of Taxes.

 

(a) Seller agrees to furnish or cause to be furnished to Purchaser, upon
request, as promptly as practicable, such information and assistance relating to
the Business or the Transferred Assets (including access to books and records)
as is reasonably necessary for the filing of all Tax Returns, and making of any
election related to Taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax Return. Seller shall retain all books and records with
respect to Taxes pertaining to the Transferred Assets for a period of at least
six years following the Closing Date.

 

(b) All real property taxes, personal property taxes and similar ad valorem
obligations levied with respect to the Business or the Transferred Assets for a
taxable period which includes (but does not end on) the Closing Date
(collectively, the “Apportioned Obligations”) shall be apportioned between
Seller and Purchaser as of the Closing Date based on the number of days of such
taxable period ending on the Closing Date (the “Pre-Closing Tax Period”) and the
number of days of such taxable period after the Closing Date (with respect to
any such taxable period, the “Post-Closing Tax Period”). Seller shall file all
Tax Returns for any such taxable period. Seller shall be liable for the
proportionate amount of such Taxes that is attributable to the Pre-Closing Tax
Period, and Purchaser shall be liable for the proportionate amount of such Taxes
that is attributable to the Post-Closing Tax Period. Upon receipt of any bill
for real or personal property Taxes relating to the Business or the Transferred
Assets, Seller and Purchaser shall present a statement to the other setting
forth the amount of reimbursement to which each is entitled under this
Section 9.2(b) together with such supporting evidence as is reasonably necessary
to calculate the proration amount. The proration amount shall be paid by the
party owing it to the other within 20 days after delivery of such statement. In
the event that either Seller or Purchaser shall make any other payment for which
it is entitled to reimbursement under this Section 9.2(b), the other party shall
make such reimbursement promptly but in no event later than 20 days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement.

 

9.3 Merchant Contracts and Merchant and Consumer Data.

 

(a) Promptly following the Closing, Seller will offer to each of the merchant
customers whose contracts with Seller are being assumed by Purchaser in
accordance with Section 1.5(b) (collectively. the “Transferred Customers”) a
written opportunity to Opt Out. The content of such offer will be drafted by
Purchaser and consented to by Seller, which consent shall not be unreasonably
withheld or delayed. Such offer shall include notice to each Transferred
Customer that electing to Opt Out and to not otherwise provide their contact
information to Purchaser will result in termination of such Transferred
Customer’s merchant services agreement and related payment processing services
(the “Opt-Out Notice”). Purchaser will not (a) during the 30-day period
following the date the Opt-Out Notice is delivered to the Transferred Customers
(the “Opt-Out Period”), contact any Transferred Customer if Seller is the source
of such Transferred Customer’s name or other contact information or
(b) following the Opt-Out Period, contact any Transferred Customer that has
Opted Out if Seller is the source of such Transferred Customer’s name or other
contact information. Following the end of the Opt-Out Period, Seller shall, upon
request by Purchaser, deliver a second notice to all Transferred Customers that
have Opted Out, the content of which shall be drafted by Purchaser and consented
to by Seller (which consent shall not be unreasonably withheld or delayed), for
purposes of retaining such Transferred Customers.

 

(b) Seller and Purchaser acknowledge that if a Transferred Customer Opts Out,
Purchaser would not have the necessary information to enable Purchaser to
continue to perform the merchant services agreement with such Transferred
Customer, unless Purchaser obtains such information directly from such
Transferred Customer.

 

(c) For Transferred Customers who do not Opt Out, during the period commencing
on the Closing Date and ending on the earlier of: (i) the date that such
Transferred Customer consents to Purchaser’s handling of such Transferred
Customer’s data in accordance with Purchaser’s privacy policy, where the method
of such consent has first been authorized by TRUSTe for Parent or Purchaser in a
process involving Seller’s participation and input; or (ii) the date that such
Transferred Customer renews or amends such Transferred

 

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Customer’s merchant services agreement where such amendment includes permitting
handling of such Transferred Customer’s data in accordance with Purchaser’s
privacy policy, Purchaser will use each piece of individually-identifiable
information of Transferred Customers or such Transferred Customers’ customers
that is included in the Transferred Assets only for the purposes of: (A) sending
customers updates or other important information about Purchaser’s
financial-related payment services and products; (B) facilitating the billing,
collection, support, renewal, and purchase of Purchaser’s financial-related
payment products and services, including disclosures to third party services
providers only for use in such facilitation and only under obligations of strict
confidentiality; (C) providing necessary information to appropriate financial
institutions, processors, and third parties under contract with Purchaser in
order to provide payment services to the customer; (D) disclosures to third
parties (including local, state, federal, national or international government
or law enforcement authorities) as necessary in order to comply with applicable
laws and regulations; (E) disclosures to third parties in order to investigate,
prevent, or take action regarding suspected illegal activities or suspected
fraud, or to enforce or apply Purchaser’s agreements; or (F) internal
statistical and business strategy analysis. In addition, Purchaser will comply
with any requests from Transferred Customers or such Transferred Customers’
customers to opt out of receiving marketing, advertising, or promotions, whether
such requests were made to Seller prior to the Closing (for only those
Transferred Customers and Transferred Customers’ customers enumerated as having
made such requests on a list provided by Seller to Purchaser at the Closing) or
to Purchaser. The preceding sentence will not apply to marketing, advertising or
promotions by Parent to its prior-existing customers that have not made such
requests to Purchaser.

 

(d) Following the Closing, Seller shall treat the personal information of
Purple’s customers and Purple’s customers’ customers confidentially and shall
use such information for the sole purpose of providing services to such parties
on Purchaser’s behalf.

 

(e) Seller will maintain payment processing data related to all consumer
transactions for one year following each such transaction that Seller handled,
whether while in direct contract with merchant customers before the merchant
agreements were assigned to Purchaser, or while acting as a service provider for
Purchaser during the term of the Transition Services Agreement. For transactions
that took place before the merchant agreements were assigned, Purchaser will not
have access to such data (other than Cleansed Data) but Seller will assist
Purchaser with follow-up actions related to such transactions as set forth in
the Transition Services Agreement.

 

9.4 Australian Arrangements. If the Seller Contract identified in item #1 on
Schedule 4.10 has not been amended as set forth on Schedule 4.10 prior to the
Closing, then as promptly as practicable following the Closing, Seller shall
cause VeriSign Australia Limited to enter into a reseller arrangement with
Purchaser on substantially the same economic terms as the terms with the top
reseller partners of the Business.

 

10. MISCELLANEOUS PROVISIONS.

 

10.1 Further Actions.

 

(a) From and after the Closing Date, Seller shall reasonably cooperate (and
shall cause its Subsidiaries to so cooperate) with Purchaser and Purchaser’s
Representatives, and shall cause to be executed and delivered such documents and
cause such other actions to be taken as Purchaser may reasonably request, for
the purpose of evidencing the Transactions and putting Purchaser in possession
and control of all of the Transferred Assets. To the extent that the parties
hereto have been unable to obtain any Consent that is necessary to be obtained
for the transfer to Purchaser of any of the Transferred Assets by the Closing
Date: (i) such Transferred Asset (a “Specified Asset”) shall not be assigned or
transferred to Purchaser until such time as such Consent is obtained; and
(ii) Seller shall use its commercially reasonable efforts to obtain such Consent
as promptly as practicable thereafter. Until such Consent is obtained, Seller
shall cooperate (and shall cause its Subsidiaries to cooperate), and shall use
its commercially reasonable efforts to cause its (and its Subsidiaries’)
Representatives to cooperate, with Purchaser in any lawful arrangement designed
to provide Purchaser with the benefits of such Specified Assets at no cost to
Purchaser in excess of the cost Purchaser would have incurred (without
modification to the terms of any Contract) if the Consent had been obtained. If
a required Consent with respect to a Specified Asset is obtained after the
Closing Date, the Specified Asset subject to such Consent shall be deemed to
have been assigned and transferred to Purchaser as of the date such Consent is
effective.

 

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(b) After the Closing, if Seller or any Subsidiary of Seller receives any
payment, refund or other amount that is a Transferred Asset or is otherwise
properly due and owing to Purchaser, Seller shall promptly remit or shall cause
to be remitted, such amount to Purchaser. After the Closing, if Purchaser or
Parent or any affiliate thereof receives any amount in respect of an Excluded
Asset or is otherwise properly due and owing to Seller, Purchaser, Parent or
such affiliate shall promptly remit or shall cause to be remitted, such amount
to Seller.

 

10.2 Continuing Access to Information.

 

(a) After the Closing Date, Purchaser shall give Seller and its Representatives
reasonable access during normal business hours to (and shall allow Seller and
its Representatives to make copies of) any accounting books and records and
other financial data acquired by Purchaser hereunder as may be necessary for:
(i) preparation of tax returns and financial statements which are the
responsibility of Seller; (ii) management and handling of any tax audits and tax
disputes; and (iii) complying with any audit request, subpoena or other
investigative demand by any Governmental Body or for any civil litigation, or
for any other reasonable purpose. After the Closing Date, Purchaser shall give
Seller and its Representatives reasonable access during normal business hours to
the Continuing Employees to provide the foregoing materials and for preparation
and testimony in any Proceeding identified in Part 2.5(h) of the Disclosure
Schedule or in any other legal proceeding commenced after the Closing Date to
the extent that the Continuing Employees have information that is relevant to
any such other legal proceeding.

 

(b) After the Closing Date, Seller shall give Purchaser and its Representatives
reasonable access during normal business hours to (and shall allow Purchaser and
its Representatives to make copies of) any books and records and other data
relating to the Business or the Transferred Assets as may be necessary for:
(i) preparation of tax returns and financial statements which are the
responsibility of Purchaser; (ii) management and handling of any tax audits and
tax disputes; and (iii) complying with any audit request, subpoena or other
investigative demand by any Governmental Body or for any civil litigation, or
for any other reasonable purpose.

 

(c) For a period of one year after the Closing Date, Seller shall: (i) give (and
shall cause its Subsidiaries to give) Purchaser and its Representatives
reasonable access during normal business hours to (and shall allow Purchaser and
its Representatives to make copies of) any other books and records of Seller and
its Subsidiaries to the extent relating to the Transferred Assets for any
reasonable purpose relating to the Business; and (ii) make its Representatives
(and the Representatives of its Subsidiaries) available to Purchaser at
reasonable times during normal business hours to answer questions related to the
Transferred Assets and the Business.

 

10.3 Publicity. Seller and Purchaser shall mutually agree on a joint press
release to be issued by the parties following the execution and delivery of this
Agreement. Each of Purchaser and Seller shall ensure that, on and at all times
after the date of this Agreement no press release or other publicity disclosing
any of the terms of this Agreement or any of the other Transactional Agreements
is issued or otherwise disseminated by or on behalf of it or any of its
Subsidiaries without the other’s prior written consent; provided, however, that
the terms of this Agreement and the other Transactional Agreements may be
disclosed: (a) to the extent required by law, including the rules promulgated by
the SEC, provided that the disclosing party cooperates with the other as
reasonably requested; and (b) to the extent otherwise disclosed in the joint
press release referred to in the first sentence of this Section 10.3, or in any
other press release or publicity issued by either Seller, Parent or Purchaser in
accordance with the terms of this Section 10.3. Seller shall (and shall cause
each of its Subsidiaries to) keep strictly confidential, and Seller shall not
(and shall cause each of its Subsidiaries not to) use or disclose to any other
Person, any non-public document or other information that relates to the
Business. Purchaser acknowledges that Seller will be required to file with or
furnish to the SEC a copy of this Agreement.

 

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10.4 Fees and Expenses.

 

(a) Subject to the provisions of Section 8 (including the indemnification and
other obligations of Purchaser thereunder) Seller shall bear and pay all fees,
costs and expenses that have been incurred or that are in the future incurred by
Seller or any of its Subsidiaries or by any Representatives of Seller or any of
its Subsidiaries in connection with: (i) the negotiation, preparation and review
of any term sheet or similar document relating to any of the Transactions;
(ii) the negotiation, preparation and review of this Agreement (including the
Disclosure Schedule), the other Transactional Agreements and all bills of sale,
assignments, certificates, opinions and other instruments and documents
delivered or to be delivered in connection with the Transactions; (iii) the
preparation and submission of any filing or notice required to be made or given
in connection with any of the Transactions, and the obtaining of any Consent
required to be obtained by Seller or any of Seller’s Subsidiaries in connection
with any of the Transactions; and (iv) the consummation and performance of the
Transactions.

 

(b) Subject to the provisions of Section 8 (including the indemnification and
other obligations of Seller thereunder), Parent or Purchaser shall bear and pay
all fees, costs and expenses that have been incurred or that are in the future
incurred by Parent, Purchaser, any Subsidiary of Parent or Purchaser or any
Representative of Parent or Purchaser in connection with: (i) the negotiation,
preparation and review of any term sheet or similar document relating to any of
the Transactions; (ii) the negotiation, preparation and review of this
Agreement, the other Transactional Agreements and all bills of sale,
assignments, certificates, opinions and other instruments and documents
delivered or to be delivered in connection with the Transactions; (iii) the
preparation and submission of any filing or notice required to be made or given
in connection with any of the Transactions, and the obtaining of any Consent
required to be obtained by Purchaser, Parent or any of their respective
Subsidiaries in connection with any of the Transactions; and (iv) the
consummation and performance of the Transactions.

 

(c) Notwithstanding anything to the contrary contained in Section 10.4(a).
Section 10.4(b) or elsewhere in this Agreement, and regardless of whether or not
the Closing takes place, Seller and Purchaser shall each bear and pay 50% of the
amount of any filing fee payable under the HSR Act in connection with the
Transactions.

 

10.5 Attorneys’ Fees. Except as expressly set forth in any Transactional
Agreement as it relates to such Transactional Agreement, or in Schedule 10.9(c)
as it relates to any Arbitrable Claim, if any Proceeding relating to any of the
Transactional Agreements or the enforcement of any provision of any of the
Transactional Agreements is brought against any party to this Agreement, the
prevailing party (as determined by the judge or arbitrator of such Proceeding)
shall be entitled to recover reasonable attorneys’ fees, costs and disbursements
incurred in such Proceeding (in addition to any other relief to which the
prevailing party may be entitled).

 

10.6 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given or
made as follows: (a) if sent by registered or certified mail in the United
States return receipt requested, upon receipt; (b) if sent designated for
overnight delivery by nationally recognized overnight air courier (such as DHL
or Federal Express), three business days after delivery to such courier; (c) if
sent by facsimile transmission before 5:00 p.m. in California, when transmitted
and receipt is confirmed; (d) if sent by facsimile transmission after 5:00 p.m.
in California and receipt is confirmed, on the following business day; and
(e) if otherwise actually personally delivered, when delivered, provided that
such notices, requests, demands and other communications are delivered to the
address set forth below, or to such other address as any party shall provide by
like notice to the other parties to this Agreement:

 

if to Seller:

          VeriSign, Inc.      487 East Middlefield Road      Mountain View, CA
94043      Attention: General Counsel      Facsimile: (650) 426-5113

 

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with copy to:

          Fenwick & West LLP      801 California Street      Mountain View, CA
94041      Attention: Douglas N. Cogen      Jeffrey R. Vetter      Facsimile:
(650) 938-5200

if to Parent:

          eBay Inc.      2145 Hamilton Avenue      San Jose, CA 95125     
Attention: General Counsel      Facsimile: (408) 376-7513

if to Purchasers:

          PayPal, Inc.      eBay Park North      2211 North First Street     
San Jose, CA 95131      Attention: General Counsel      Facsimile: (408)
967-9911

 

10.7 Headings. The bold-faced headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

 

10.8 Counterparts and Exchanges by Electronic Transmission or Facsimile. This
Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement. The exchange of a fully executed Agreement (in counterparts or
otherwise) by electronic transmission or facsimile shall be sufficient to bind
the parties to the terms and conditions of this Agreement.

 

10.9 Governing Law; Venue.

 

(a) This Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of the State of California (without giving effect
to principles of conflicts of laws).

 

(b) Except as otherwise provided in this Agreement, any Proceeding relating to
this Agreement or the enforcement of any provision of this Agreement shall be
brought or otherwise commenced in any state or federal court located in the
County of Santa Clara, California. Each party to this Agreement:

 

(i) expressly and irrevocably consents and submits to the jurisdiction of each
state and federal court located in the County of Santa Clara, California (and
each appellate court located in the State of California) in connection with any
such Proceeding;

 

(ii) agrees that each state and federal court located in the County of Santa
Clara, California shall be deemed to be a convenient forum; and

 

(iii) agrees not to assert (by way of motion, as a defense or otherwise), in any
such Proceeding commenced in any state or federal court located in the County of
Santa Clara, California, any claim that such party is not subject personally to
the jurisdiction of such court, that such Proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be enforced in or by
such court.

 

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(c) Notwithstanding anything to the contrary contained in this Agreement, any
claim for indemnification, compensation or reimbursement pursuant to Section 8
and any claim for a monetary remedy (such as in the case of a claim based on
fraud or willful misconduct) relating to this Agreement or the Transactions
after the Closing shall be brought and resolved exclusively in accordance with
Schedule 10.9(c); provided, however, that nothing in this Section 10.9(c) shall
prevent Seller or Purchaser from seeking preliminary injunctive relief from a
court of competent jurisdiction.

 

10.10 Successors and Assigns; Parties in Interest.

 

(a) This Agreement shall be binding upon: Seller and its successors and assigns
(if any); Purchaser and its successors and assigns (if any) and Parent and its
successors and assigns (if any). This Agreement shall inure to the benefit of:
Seller; the Seller Indemnified Persons; Parent; Purchaser; the other Purchaser
Indemnified Persons; and the respective successors and assigns (if any) of the
foregoing.

 

(b) Purchaser may freely assign any or all of its rights under this Agreement,
including its rights under Section 8, in whole or in part, to any other Person
without obtaining the consent or approval of any other Person. Seller shall not
be permitted to assign any of its rights or delegate any of its obligations
under this Agreement without Purchaser’s prior written consent.

 

(c) Except for the provisions of Section 8 hereof, none of the provisions of
this Agreement is intended to provide any rights or remedies to any Person other
than the parties to this Agreement and their respective successors and assigns
(if any). Without limiting the generality of the foregoing, no employee or
creditor of Seller, including the Continuing Employees, shall have any rights
under this Agreement or under any of the other Transactional Agreements.

 

10.11 Remedies Cumulative; Specific Performance. The rights and remedies of the
parties hereto shall be cumulative (and not alternative). Each party agrees
that: (a) in the event of any breach or threatened breach by the other party of
any covenant, obligation or other provision set forth in this Agreement, such
party shall be entitled (in addition to any other remedy that may be available
to it) to: (i) a decree or order of specific performance or mandamus to enforce
the observance and performance of such covenant, obligation or other provision;
and (ii) an injunction restraining such breach or threatened breach; and (b) no
Person shall be required to provide any bond or other security in connection
with any such decree, order or injunction or in connection with any related
Proceeding.

 

10.12 Waiver. No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any Person
in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy. No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.

 

10.13 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of Purchaser and Seller.

 

10.14 Severability. In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.

 

36

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10.15 Entire Agreement. The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof; provided, however, that neither
(a) the Confidentiality Agreement, dated June 27, 2005 between Parent and
Seller; nor (b) the Confidentiality Agreement, dated June 27, 2005 between
Purchaser and Seller shall be superseded and each such agreement shall remain in
full force and effect in accordance with its terms.

 

10.16 Disclosure Schedule. The Disclosure Schedule shall be arranged in separate
parts corresponding to the numbered and lettered sections contained herein
permitting such disclosure, and the information disclosed in any numbered or
lettered part shall be deemed to relate to and to qualify only: (a) the
particular representation or warranty or covenant set forth in the corresponding
numbered or lettered section herein permitting such disclosure; and (b) any
other representation and warranty set forth in Section 2 to the extent that it
is reasonably apparent from the wording of such information that such
information is intended to qualify such other representation and warranty.

 

10.17 Construction.

 

(a) For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.

 

(b) The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.

 

(c) As used in this Agreement, the words “include” and “including,” and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words “without limitation.”

 

(d) Except as otherwise indicated, all references in this Agreement to
“Sections” and “Exhibits” are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.

 

37

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The parties to this Agreement have caused this Agreement to be executed and
delivered as of the date first written above.

 

EBAY INC., a Delaware corporation

By:

 

/s/ Jeffrey D. Jordan

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

Name:

  Jeffrey D. Jordan

Title:

   

PAYPAL, INC.,

a Delaware corporation

By:

 

/s/ Jeffrey D. Jordan

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

Name:

  Jeffrey D. Jordan

Title:

   

PAYPAL INTERNATIONAL LIMITED,

a company incorporated in the Republic of Ireland

By:

 

/s/ Mathias Entenmann

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

Name:

  Mathias Entenmann

Title:

   

VERISIGN, INC.,

a Delaware corporation

By:

 

/s/ Stratton D. Sclavos

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

Name:

  Stratton D. Sclavos

Title:

  Chief Executive Officer

 

Signature Page to Asset Purchase Agreement

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

EXHIBIT A

 

CERTAIN DEFINITIONS

 

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

 

Agreement. “Agreement” shall mean the Asset Purchase Agreement to which this
Exhibit A is attached (including the Disclosure Schedule), as it may be amended
from time to time.

 

Business. “Business” shall mean Seller’s payment processing service that enables
merchants to authorize and settle the following payment types over the Internet:
credit cards, debit card without pin, purchase cards, electronic checks and
automated clearing house transactions. For the avoidance of doubt, (a) the
“Business” consists of the following services offered by Seller: Payflow Pro,
Payflow Link, Commerce Site Services (excluding SSL certificate component of
Commerce Site Services), Recurring Billing Services, Point-of-Sale Payment
Processing, Fraud Protection Services, Wireless Payment Services for prepaid
replenishment and wireless payments, and Prepaid Top-up Services; and (b) the
“Business” does not include any of Seller’s products or services outside of its
Payment Services business, including Seller’s Security Services business,
Naming & Directory Services business and Communications Services business.

 

Business Employee. “Business Employee” shall mean any employee of Seller or any
Subsidiary of Seller that performs services or has responsibilities primarily
with respect to the Business.

 

Business Material Adverse Effect. “Business Material Adverse Effect” shall mean
any effect, change, event or circumstance (each, an “Effect”) that, considered
together with all other Effects, has a material adverse effect on: (a) the
Transferred Assets; (b) the Business or the financial condition, operations or
results of operations of the Business; provided, however, that, in no event
shall any of the following, alone or in combination, be deemed to constitute,
nor shall any of the following be taken into account in determining whether
there has occurred, a Business Material Adverse Effect: (i) Effects resulting
from conditions generally affecting the industries in which the Business
participates or the U.S. or global economy, to the extent that such conditions
do not have a disproportionate impact on the Business or any of the Transferred
Assets; (ii) the loss of (or failure to generate) revenues resulting directly
from any delay or cancellation by customers (including merchants, resellers and
distributors) of any orders arising directly from the announcement or pendency
of the Transactions; or (iii) any failure by the Business to meet internal
projections or forecasts on or after the date of the Agreement (it being
understood, however, that any Effect causing or contributing to any such failure
to meet projections or predictions may constitute a Business Material Adverse
Effect and may be taken into account in determining whether a Business Material
Adverse Effect has occurred); or (c) the ability of Seller to consummate the
transactions contemplated by the Agreement, the Transition Services Agreement or
the License Agreement or to perform any of its material covenants or obligations
under the Agreement, the Transition Services Agreement or the License Agreement.

 

Business Offering. “Business Offering” shall mean each proprietary product or
service developed, marketed, sold, offered or supported by or on behalf of
Seller or any of its Subsidiaries for the Business as of the date of the
Agreement or during the Pre-Closing Period.

 

Claim. “Claim” shall mean and include all past, present and future disputes,
claims, controversies, demands, rights, obligations, liabilities, actions and
causes of action of every kind and nature, including: (a) any unknown,
unsuspected or undisclosed claim; and (b) any claim, right or cause of action
based upon any breach of any express, implied, oral or written contract or
agreement.

 

Cleansed Data. “Cleansed Data” shall mean merchant type, merchant ID, terminal
ID (if applicable), transaction date and amount and zip code and will expressly
not include any data that would allow an individual to be identified.

 

COBRA. “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Section 4980B of the Code and Section 601
et. seq. of ERISA and the regulations thereunder.

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

Consent. “Consent” shall mean any approval, consent, ratification, permission,
waiver or authorization (including any Governmental Authorization), whether
affirmatively or by silence (such as consent provided by not Opting Out).

 

Contract. “Contract” shall mean any written or oral agreement, contract,
understanding, license, instrument, note, guaranty, indemnity, representation,
warranty, deed, assignment, power of attorney, certificate, purchase order, work
order, insurance policy, benefit plan, commitment, covenant, assurance or
undertaking of any nature.

 

Covered Assets. “Covered Assets” shall mean any asset that would constitute a
Transferred Asset pursuant to the terms of the Agreement if such asset were
owned or held by Seller or any Subsidiary of Seller as of the Closing Date.

 

Damages. “Damages” shall include any loss, damage, injury, Liability, Claim,
settlement, judgment, award, fine, penalty, fee (including any reasonable legal
fees, expert fees, accounting fees or advisory fees), charge, cost (including
any reasonable cost of investigation) or expense of any nature (it being
understood that any fees, costs or expenses incurred by an Indemnified Person in
connection with any Proceeding relating to any of the matters set forth in
Section 8.2(a) or Section 8.3(a) of the Agreement, as the case may be, including
any Proceeding commenced by any Indemnified Person for the purpose of enforcing
any of its rights under Section 8 of the Agreement, shall be included in
“Damages”). Damages shall not include special, consequential or punitive
damages, except to the extent that any such damages are awarded to a third party
and become payable to such third party by an Indemnified Person.

 

Disclosure Schedule. “Disclosure Schedule” shall mean the schedule (dated as of
the date of the Agreement) delivered to Purchaser on behalf of Seller.

 

Encumbrance. “Encumbrance” shall mean any lien, pledge, hypothecation, charge,
mortgage, security interest, encumbrance, equity, trust, equitable interest,
claim, right of possession, lease, tenancy, license, encroachment, interference,
right, proxy, option, right of first refusal, preemptive right, legend,
imperfection of title or restriction of any nature (including any restriction on
the transfer of any asset, any restriction on the receipt of any income derived
from any asset, any restriction on the use of any asset and any restriction on
the possession, exercise or transfer of any other attribute of ownership of any
asset).

 

Entity. “Entity” shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.

 

ERISA Affiliate. “ERISA Affiliate” shall mean any Person under common control
with Seller within the meaning of Section 414(b), (c), (m) or (o) of the Code
and the regulations issued thereunder.

 

Governmental Authorization. “Governmental Authorization” shall mean any: permit,
license, certificate, franchise, concession, approval, consent, ratification,
permission, clearance, confirmation, endorsement, waiver, certification,
designation, rating, registration, qualification or authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.

 

Governmental Body. “Governmental Body” shall mean any: (a) nation, principality,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, unit, body or Entity and any court or
other tribunal); (d) multi-national organization or body; or (e) individual,
Entity or body lawfully exercising, or entitled to exercise, any executive,
legislative, judicial, administrative, regulatory, police, military or taxing
authority or power of any nature.

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

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

 

Intellectual Property. “Intellectual Property” shall mean algorithms, apparatus,
databases, data collections, diagrams, formulae, inventions (whether or not
patentable), know-how, logos, marks (including brand names, product names and
slogans), methods, processes, proprietary information, protocols, schematics,
specifications, software, software code (in any form, including source code and
executable or object code), techniques, user interfaces, URLs, web sites, works
of authorship and other forms of technology (whether or not embodied in any
tangible form and including all tangible embodiments of the foregoing, such as
instruction manuals, laboratory notebooks, prototypes, samples, studies and
summaries).

 

Intellectual Property Rights. “Intellectual Property Rights” shall mean all
rights of the following types, which may exist or be created under the laws of
any jurisdiction in the world: (a) rights associated with works of authorship,
including exclusive exploitation rights, copyrights, moral rights and mask
works; (b) trademark and trade name rights and similar rights; (c) trade secret
rights; (d) patent and industrial property rights; (e) other proprietary rights
in Intellectual Property; and (f) rights in or relating to registrations,
renewals, extensions, combinations, divisions, and reissues of, and applications
for, any of the rights referred to in clauses “(a)” through “(e)” above.

 

Knowledge. Information shall be deemed to be known to or to the “Knowledge” of
Seller if that information is actually known by, or would have been discovered
following reasonable inquiry concerning the existence of such fact or other
matter of those Persons who act in any managerial or supervisory capacity in
connection with the Business and who reasonably would have been expected to have
knowledge thereof by, any executive officer of Seller or any other Person
identified on Annex I to this Exhibit A.

 

Legal Requirement. “Legal Requirement” shall mean any federal, state, local,
municipal, foreign or other law, statute, legislation, constitution, principle
of common law, resolution, ordinance, code, treaty, convention, rule,
regulation, ruling, directive, pronouncement, requirement, specification,
determination, decision, opinion or interpretation lawfully issued, enacted,
adopted, passed, approved, promulgated, made, implemented or otherwise put into
effect by or under the authority of any Governmental Body.

 

Liability. “Liability” shall mean any debt, obligation, duty or liability of any
nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted,
contingent, indirect, conditional, implied, vicarious, derivative, joint,
several or secondary liability), regardless of whether such debt, obligation,
duty or liability would be required to be disclosed on a balance sheet prepared
in accordance with generally accepted accounting principles and regardless of
whether such debt, obligation, duty or liability is immediately due and payable.

 

Opt Out. To have “Opted Out” shall mean that a Transferred Customer has
requested in writing to Seller or to Purchaser, within 30 days after delivery by
Seller of the Opt-Out Notice, that individually identifiable information related
to such Transferred Customer not be transferred from Seller to Purchaser or any
affiliate of Purchaser.

 

Order. “Order” shall mean any: order, judgment, injunction, edict, decree,
ruling, pronouncement, determination, decision, opinion, verdict, sentence,
subpoena, writ or award issued, made, entered, rendered or otherwise put into
effect by or under the authority of any court, administrative agency or other
Governmental Body or any arbitrator or arbitration panel.

 

Parent. “Parent” shall mean eBay Inc., a Delaware corporation and sole
stockholder of Purchaser.

 

Parent Common Stock. “Parent Common Stock” shall mean the Common Stock, par
value $0.01 per share, of Parent.

 

Parent Average Stock Price. “Parent Average Stock Price” shall mean the average
of the closing sale price of Parent Common Stock as reported on the Nasdaq
National Market for the 10 trading day period ending immediately prior to (and
excluding) the trading day immediately before the Closing Date.

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

Permitted Encumbrances. “Permitted Encumbrances” means (i) Encumbrances with
respect to the payment of Taxes, in all cases which are not yet due or payable;
(ii) statutory Encumbrances of landlords and Encumbrances of suppliers,
mechanics, carriers, materialmen, warehousemen, service providers or workmen and
other similar Encumbrances imposed by law created in the ordinary course of
business for amounts that are not yet delinquent or that are being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted; (iii) non-exclusive licenses granted by Seller in the ordinary course
of business that would not reasonably be expected to materially interfere with
the use of any of the Transferred Assets; (iv) non-exclusive licenses identified
in Part 2.5(a)(iv)(B) of the Disclosure Schedule; (v) non-exclusive licenses
granted by Seller or any Subsidiary of Seller pursuant to a Standard Form
Agreement; and (vi) rights granted by Seller or any Subsidiary of Seller in
non-disclosure agreements entered into in the ordinary course of business
providing revocable, non-exclusive rights to use confidential information of
Seller or any Subsidiary of Seller for a limited purpose.

 

Person. “Person” shall mean any individual, Entity or Governmental Body.

 

Pre-Closing Period. “Pre-Closing Period” shall mean the period from the date of
the Agreement through the Closing Date.

 

Proceeding. “Proceeding” shall mean any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.

 

Prohibited Transaction. “Prohibited Transaction” shall mean any transaction
involving, directly or indirectly, the sale, lease, license, transfer or
disposition of all or any portion of the Business, other than the license or
sale of Business Offerings to third parties in the ordinary course of business
consistent with past practices.

 

Purchaser Indemnified Persons. “Purchaser Indemnified Persons” shall mean the
following Persons: (a) Purchaser; (b) Parent; (c) International; (d) the current
and future affiliates of the Persons referred to in clause “(a)” through “(c):
above; (e) the respective Representatives of the Persons referred to in clauses
“(a)” through “(d)” above; and (f) the respective successors and assigns of the
Persons referred to in clauses “(a)” through “(e)” above.

 

Registered IP. “Registered IP” shall mean all Intellectual Property Rights that
are registered, filed, or issued under the authority of, with or by any
Governmental Body, including all patents, registered copyrights and registered
trademarks and all applications for any of the foregoing.

 

Representatives. “Representatives” shall mean officers, directors, employees,
agents, attorneys, accountants and advisors.

 

SEC. “SEC” shall mean the United States Securities and Exchange Commission.

 

Securities Act. “Securities Act” shall mean the Securities Act of 1933, as
amended.

 

Seller Business Software. “Seller Business Software” shall mean any software
incorporated into, or used directly in the development, manufacturing,
provision, distribution, installation or support of, any Business Offerings.

 

Seller Contract. “Seller Contract” shall mean any Contract: (a) to which Seller
or any Subsidiary of Seller is a party; (b) by which Seller or any Subsidiary of
Seller or any of its assets is or may become bound or under which Seller or any
Subsidiary of Seller has, or may become subject to, any obligation; or (c) under
which Seller or any Subsidiary of Seller has or may acquire any right or
interest.

 

Seller Employee. “Seller Employee” shall mean any current or former employee,
independent contractor or director of Seller or any Subsidiary or other
affiliate of Seller.

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

Seller IP. “Seller IP” shall mean all Intellectual Property Rights and
Intellectual Property embodied in the Seller Business Software or incorporated
into, or used directly in the development, manufacturing, distribution,
installation or support of, any Business Offering.

 

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

 

Tax. “Tax” shall mean any tax (including any income tax, franchise tax, capital
gains tax, estimated tax, gross receipts tax, value-added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, occupation tax, inventory tax, occupancy tax, withholding tax or
payroll tax), levy, assessment, tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest) imposed, assessed or collected
by or under the authority of any Governmental Body.

 

Tax Return. “Tax Return” shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information, and
any amendment or supplement to any of the foregoing, filed with or submitted to,
any Governmental Body in connection with the determination, assessment,
collection or payment of any Tax.

 

Transactional Agreements. “Transactional Agreements” shall mean: (a) the
Agreement; (b) the Transition Services Agreement; (c) the License Agreement;
(d) the Noncompetition Agreement; (e) the Non-Solicitation/No Hire Agreements;
(f) the Bill of Sale and Assignment and Assumption Agreement; (g) the Seller
Closing Certificate; (h) if Purchaser makes the Stock Payment Election, the
Registration Rights Agreement; (i) if Purchaser makes the Stock Payment
Election, the Investor Certification; (j) the Strategic Relationship Agreement;
(k) the Trademark License Agreement; and (l) all bills of sale, assignments,
business transfer agreements and other agreements delivered or to be delivered
in connection with the transactions contemplated by the Agreement.

 

Transactions. “Transactions” shall mean: (a) the execution and delivery of the
respective Transactional Agreements; and (b) all of the transactions
contemplated by the respective Transactional Agreements, including: (i) the sale
of the Transferred Assets by Seller to Purchaser in accordance with the
Agreement; (ii) the assumption of the Assumed Liabilities by Purchaser in
accordance with the Agreement and the Bill of Sale and Assignment and Assumption
Agreement; and (iii) the performance by Seller and Purchaser of their respective
obligations under the Transactional Agreements, and the exercise by Seller and
Purchaser of their respective rights under the Transactional Agreements.

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FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

 

This First Amendment to Asset Purchase Agreement (the “Amendment”) is made and
entered into as of November 18, 2005, by and among VERISIGN, INC., a Delaware
corporation (“Seller”), EBAY INC., a Delaware corporation (“Parent”), PAYPAL,
INC., a Delaware corporation (“Purchaser”) and wholly owned subsidiary of
Parent, and PAYPAL INTERNATIONAL LIMITED, a company incorporated in the Republic
of Ireland and a wholly owned subsidiary of Purchaser (“International” and
together with Purchaser, “Purchasers”). Capitalized terms not defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement (as
defined below).

 

RECITALS

 

A. WHEREAS, Seller, Parent and Purchasers have entered into that certain Asset
Purchase Agreement dated as of October 10, 2005 (the “Purchase Agreement”);

 

B. WHEREAS, Seller, Parent and Purchasers desire to amend the Purchase Agreement
in accordance with terms of this Amendment;

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
Seller, Parent and Purchasers agree to amend the Purchase Agreement as follows:

 

AMENDMENT

 

1. Amendment.

 

(a) Schedule 1.1(c) is hereby amended and restated in its entirety as set forth
on Schedule A attached hereto.

 

(b) Schedule 1.1(f) is hereby amended and restated in its entirety as set forth
on Schedule B attached hereto.

 

(c) Schedule 5.9(a) is hereby amended and restated in its entirety as set forth
on Schedule C attached hereto.

 

(d) Schedule 5.9(d) is hereby amended and restated in its entirety as set forth
on Schedule D attached hereto.

 

2. Terms of Agreement. Except as expressly modified hereby, all terms,
conditions and provisions of the Purchase Agreement shall continue in full force
and effect.

 

3. Effective Date of Amendment. This Amendment shall become effective
immediately upon the execution hereof by Seller, Parent and Purchasers.

 

4. Continuing Effectiveness. The Purchase Agreement, except as amended hereby,
remains unamended, and, as amended hereby, remains in full force and effect.
Seller, Parent and Purchasers hereby reaffirm the continuing effectiveness of
the Purchase Agreement.

 

5. Counterparts. This Amendment may be executed in several counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement. The exchange of a fully executed Amendment (in
counterparts or otherwise) by electronic transmission or facsimile shall be
sufficient to bind the parties to the terms and conditions of this Amendment.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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The parties to this Amendment have caused this Amendment to be executed and
delivered as of the date first written above.

 

EBAY INC., a Delaware corporation By:  

/s/ Jeffrey D. Jordan

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

Name:   Jeffrey D. Jordan Title:    

PAYPAL, INC.,

a Delaware corporation

By:  

/s/ Stephanie Tilenius

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

Name:   Stephanie Tilenius Title:    

PAYPAL INTERNATIONAL LIMITED,

a company incorporated in the Republic of Ireland

By:  

/s/ Mathias Entenmann

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

Name:   Mathias Entenmann Title:    

VERISIGN, INC.,

a Delaware corporation

By:  

/s/ Stratton D. Sclavos

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

Name:   Stratton D. Sclavos Title:   President & Chief Executive Officer

 

[SIGNATURE PAGE TO AMENDMENT]