Exhibit 10.6

 

EXECUTION COPY

 

 

 

STOCK PURCHASE AGREEMENT

 

BETWEEN

 

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

 

AND

 

TTI HOLDING CORPORATION

 

Dated as of November 17, 2004

 

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

 

TABLE OF CONTENTS

 

 

Page

ARTICLE I PURCHASE AND SALE OF STOCK

 

 

 

 

 

 

1.1

Sale and Transfer of Stock.

1

 

1.2

The Purchase Price.

1

 

1.3

The Additional Purchase Price.

1

 

1.4

Purchase Price Adjustment.

3

 

1.5

Purchase Price Allocation.

7

 

1.6

The Closing.

7

 

 

 

 

ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER

 

 

 

 

 

 

2.1

Organization; Standing and Power; Charter Documents; Subsidiaries.

7

 

2.2

Capital Structure.

8

 

2.3

Authority; Non-Contravention; Necessary Consents.

8

 

2.4

Financial Statements; No Undisclosed Liabilities.

9

 

2.5

Absence of Certain Changes or Events.

10

 

2.6

Taxes.

11

 

2.7

Intellectual Property.

12

 

2.8

Compliance; Permits.

15

 

2.9

Litigation.

15

 

2.10

Employee Benefit Plans.

16

 

2.11

Title to Properties.

18

 

2.12 [a04-14220_1ex10d6.htm#EnvironmentalMatters_]

Environmental Matters. [a04-14220_1ex10d6.htm#EnvironmentalMatters_]

19

 

2.13 [a04-14220_1ex10d6.htm#Contracts_]

Contracts. [a04-14220_1ex10d6.htm#Contracts_]

20

 

2.14 [a04-14220_1ex10d6.htm#Insurance_]

Insurance. [a04-14220_1ex10d6.htm#Insurance_]

21

 

2.15 [a04-14220_1ex10d6.htm#TransactionsWithSellerAndAffiliates]

Transactions with Seller and Affiliates.
[a04-14220_1ex10d6.htm#TransactionsWithSellerAndAffiliates]

21

 

2.16 [a04-14220_1ex10d6.htm#BrokersAndFinders]

Brokers and Finders. [a04-14220_1ex10d6.htm#BrokersAndFinders]

21

 

2.17 [a04-14220_1ex10d6.htm#SellerOrganization]

Seller Organization, Standing and Power; Charter Documents
[a04-14220_1ex10d6.htm#SellerOrganization]

22

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER
[a04-14220_1ex10d6.htm#ArticleIii]

 

 

 

 

 

 

3.1 [a04-14220_1ex10d6.htm#OrganizationStandingAndPower]

Organization; Standing and Power; Charter Documents.
[a04-14220_1ex10d6.htm#OrganizationStandingAndPower]

22

 

3.2 [a04-14220_1ex10d6.htm#AuthorityNoncontravention]

Authority; Non-Contravention; Necessary Consents.
[a04-14220_1ex10d6.htm#AuthorityNoncontravention]

22

 

3.3 [a04-14220_1ex10d6.htm#AvailabilityOfFunds_]

Availability of Funds. [a04-14220_1ex10d6.htm#AvailabilityOfFunds_]

23

 

3.4 [a04-14220_1ex10d6.htm#Litigati]

Litigation. [a04-14220_1ex10d6.htm#Litigati]

24

 

3.5 [a04-14220_1ex10d6.htm#BrokersAndFinders_]

Brokers and Finders. [a04-14220_1ex10d6.htm#BrokersAndFinders_]

24

 

 

 

 

ARTICLE IV INTERIM OPERATIONS OF THE COMPANY [a04-14220_1ex10d6.htm#ArticleIv]

 

 

 

 

 

 

4.1 [a04-14220_1ex10d6.htm#ConductOfBusinessByTheCompany_]

Conduct of Business by the Company.
[a04-14220_1ex10d6.htm#ConductOfBusinessByTheCompany_]

24

 

 

 

 

ARTICLE V ADDITIONAL AGREEMENTS [a04-14220_1ex10d6.htm#ArticleV]

 

 

 

 

 

 

5.1 [a04-14220_1ex10d6.htm#AcquisitionProposals_]

Acquisition Proposals. [a04-14220_1ex10d6.htm#AcquisitionProposals_]

27

 

5.2 [a04-14220_1ex10d6.htm#ConfidentialityAccessToInformation_]

Confidentiality; Access to Information.
[a04-14220_1ex10d6.htm#ConfidentialityAccessToInformation_]

27

 

5.3 [a04-14220_1ex10d6.htm#PublicDisclosure]

Public Disclosure. [a04-14220_1ex10d6.htm#PublicDisclosure]

28

 

5.4 [a04-14220_1ex10d6.htm#RegulatoryFilingsReasonableEfforts_]

Regulatory Filings; Reasonable Efforts.
[a04-14220_1ex10d6.htm#RegulatoryFilingsReasonableEfforts_]

29

 

i

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

 

 

5.5 [a04-14220_1ex10d6.htm#NotificationOfCertainMatters_]

Notification of Certain Matters.
[a04-14220_1ex10d6.htm#NotificationOfCertainMatters_]

31

 

5.6 [a04-14220_1ex10d6.htm#EmployeeBenefits_]

Employee Benefits. [a04-14220_1ex10d6.htm#EmployeeBenefits_]

31

 

5.7 [a04-14220_1ex10d6.htm#DirectorsAndOfficersIndemnification]

Director’s and Officer’s Indemnification.
[a04-14220_1ex10d6.htm#DirectorsAndOfficersIndemnification]

32

 

5.8 [a04-14220_1ex10d6.htm#TaxCovenants_]

Tax Covenants. [a04-14220_1ex10d6.htm#TaxCovenants_]

34

 

5.9 [a04-14220_1ex10d6.htm#TransitionServices_]

Transition Services. [a04-14220_1ex10d6.htm#TransitionServices_]

35

 

5.10 [a04-14220_1ex10d6.htm#ReleaseOfGuarantiesAssumptionsOfLe]

Release of Guaranties; Assumptions of Letters of Credit; Transfer of Equipment
Leases. [a04-14220_1ex10d6.htm#ReleaseOfGuarantiesAssumptionsOfLe]

36

 

5.11 [a04-14220_1ex10d6.htm#OtherMatters]

Other Matters. [a04-14220_1ex10d6.htm#OtherMatters]

37

 

5.12 [a04-14220_1ex10d6.htm#Financing]

Financing. [a04-14220_1ex10d6.htm#Financing]

38

 

 

 

 

ARTICLE VI CONDITIONS PRECEDENT TO THE PARTIES’ PERFORMANCE
[a04-14220_1ex10d6.htm#ArticleVi]

 

 

 

 

 

 

6.1 [a04-14220_1ex10d6.htm#ConditionsToThePerformanceOfEachPa]

Conditions to the Performance of Each Party.
[a04-14220_1ex10d6.htm#ConditionsToThePerformanceOfEachPa]

39

 

6.2 [a04-14220_1ex10d6.htm#AdditionalConditionsToTheObligations]

Additional Conditions to the Obligations of Seller.
[a04-14220_1ex10d6.htm#AdditionalConditionsToTheObligations]

39

 

6.3 [a04-14220_1ex10d6.htm#AdditionalConditionsToThe]

Additional Conditions to the Obligations of Purchaser.
[a04-14220_1ex10d6.htm#AdditionalConditionsToThe]

40

 

 

 

 

ARTICLE VII INDEMNIFICATION [a04-14220_1ex10d6.htm#ArticleVii]

 

 

 

 

 

 

7.1 [a04-14220_1ex10d6.htm#SurvivalOfRepresentationsAndWarranti]

Survival of Representations and Warranties.
[a04-14220_1ex10d6.htm#SurvivalOfRepresentationsAndWarranti]

41

 

7.2 [a04-14220_1ex10d6.htm#IndemnificationBySeller_]

Indemnification by Seller. [a04-14220_1ex10d6.htm#IndemnificationBySeller_]

41

 

7.3 [a04-14220_1ex10d6.htm#IndemnificationByPurchaser_]

Indemnification by Purchaser.
[a04-14220_1ex10d6.htm#IndemnificationByPurchaser_]

42

 

7.4 [a04-14220_1ex10d6.htm#ProcedureForClaimsBetweenParties_]

Procedure for Claims Between Parties.
[a04-14220_1ex10d6.htm#ProcedureForClaimsBetweenParties_]

42

 

7.5 [a04-14220_1ex10d6.htm#DefenseOfThirdPartyClaims_]

Defense of Third Party Claims.
[a04-14220_1ex10d6.htm#DefenseOfThirdPartyClaims_]

43

 

7.6 [a04-14220_1ex10d6.htm#Limita]

Limitations. [a04-14220_1ex10d6.htm#Limita]

45

 

7.7 [a04-14220_1ex10d6.htm#NoDuplicationExclusiveRemedy_]

No Duplication; Exclusive Remedy.
[a04-14220_1ex10d6.htm#NoDuplicationExclusiveRemedy_]

46

 

7.8 [a04-14220_1ex10d6.htm#TaxClaims_]

Tax Claims. [a04-14220_1ex10d6.htm#TaxClaims_]

46

 

7.9 [a04-14220_1ex10d6.htm#TaxEffectOfIndemnificationPayments]

Tax Effect of Indemnification Payments.
[a04-14220_1ex10d6.htm#TaxEffectOfIndemnificationPayments]

48

 

 

 

 

ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
[a04-14220_1ex10d6.htm#ArticleViii]

 

 

 

 

 

 

8.1 [a04-14220_1ex10d6.htm#Termination_]

Termination. [a04-14220_1ex10d6.htm#Termination_]

48

 

8.2 [a04-14220_1ex10d6.htm#NoticeOfTerminationEffectOfTermina]

Notice of Termination; Effect of Termination.
[a04-14220_1ex10d6.htm#NoticeOfTerminationEffectOfTermina]

49

 

8.3 [a04-14220_1ex10d6.htm#FeesAndExpenses_]

Fees and Expenses. [a04-14220_1ex10d6.htm#FeesAndExpenses_]

50

 

8.4 [a04-14220_1ex10d6.htm#Amendment_]

Amendment. [a04-14220_1ex10d6.htm#Amendment_]

50

 

8.5 [a04-14220_1ex10d6.htm#ExtensionWaiver_]

Extension; Waiver. [a04-14220_1ex10d6.htm#ExtensionWaiver_]

50

 

 

 

 

ARTICLE IX GENERAL PROVISIONS [a04-14220_1ex10d6.htm#ArticleIx]

 

 

 

 

 

 

9.1 [a04-14220_1ex10d6.htm#Notices_]

Notices. [a04-14220_1ex10d6.htm#Notices_]

50

 

9.2 [a04-14220_1ex10d6.htm#InterpretationKnowledge_]

Interpretation; Knowledge. [a04-14220_1ex10d6.htm#InterpretationKnowledge_]

52

 

9.3 [a04-14220_1ex10d6.htm#Counterparts_]

Counterparts. [a04-14220_1ex10d6.htm#Counterparts_]

53

 

9.4 [a04-14220_1ex10d6.htm#EntireAgreementThirdpartyBeneficiar]

Entire Agreement; Third-Party Beneficiaries.
[a04-14220_1ex10d6.htm#EntireAgreementThirdpartyBeneficiar]

53

 

9.5 [a04-14220_1ex10d6.htm#Severability_]

Severability. [a04-14220_1ex10d6.htm#Severability_]

53

 

9.6 [a04-14220_1ex10d6.htm#OtherRemedies_]

Other Remedies. [a04-14220_1ex10d6.htm#OtherRemedies_]

53

 

9.7 [a04-14220_1ex10d6.htm#GoverningLaw]

Governing Law; Waiver of Jury Trial; Arbitration of Patent Claims.
[a04-14220_1ex10d6.htm#GoverningLaw]

54

 

9.8 [a04-14220_1ex10d6.htm#RulesOfConstruction_]

Rules of Construction. [a04-14220_1ex10d6.htm#RulesOfConstruction_]

55

 

9.9 [a04-14220_1ex10d6.htm#Assignment_]

Assignment. [a04-14220_1ex10d6.htm#Assignment_]

55

 

9.10 [a04-14220_1ex10d6.htm#NoWaiver_]

No Waiver. [a04-14220_1ex10d6.htm#NoWaiver_]

55

 

ii

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

 

Exhibits

 

Exhibit A - Transition Services Agreement

Exhibit B - Noncompetition Agreement

Exhibit C - Cross License Agreement

 

iii

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

 

Definitions

 

The definitions used in this Agreement are defined in the following Sections:

 

Defined Term

 

Section

 

 

 

Acquisition

 

Section 5.1

Acquisition Proposal

 

Section 5.1

Additional Purchase Price

 

Section 1.3

Adjusted Working Capital

 

Section 1.4(a)(iii)(1)

Adjustment Statement

 

Section 1.4(a)(ii)(1)

Affiliate

 

Section 9.2(e)

Agreement

 

Preamble

Ancillary Agreements

 

Section 2.3(a)

Benefit Plans

 

Section 2.10(b)(i)

Claim Notice

 

Section 7.4

Closing

 

Section 1.6

Closing Balance Sheet

 

Section 1.4(a)(ii)(1)

Closing Date

 

Section 1.6

Code

 

Section 2.6(b)(ii)

Commitment Letter

 

Section 3.3(a)

Company

 

Recital A

Company Balance Sheet

 

Section 2.4(a)

Company Charter Documents

 

Section 2.1(b)

Company Common Stock

 

Recital B

Company Indemnified Liabilities

 

Section 5.7(a)

Company Indemnified Parties

 

Section 5.7(a)

Company Indemnified Proceedings

 

Section 5.7(a)

Company Intellectual Property

 

Section 2.7(a)(ii)

Company Material Contract

 

Section 2.13(a)

Company Participants

 

Section 5.6(a)

Company Permits

 

Section 2.8(b)

Company Registered Intellectual Property

 

Section 2.7(a)(iv)

Confidentiality Agreements

 

Section 9.2(f)

Contract

 

Section 2.7(f)

Debt Financing

 

Section 3.3(a)

DGCL

 

Section 5.7(a)

DOJ

 

Section 5.4(a)

Effect

 

Section 9.2(c)

Employee

 

Section 2.10(a)

End Date

 

Section 8.1(b)

Environmental Law

 

Section 2.12(a)

ERISA

 

Section 2.10(b)(i)

ERISA Affiliate

 

Section 2.10(b)(i)

Estimated Working Capital Adjustment

 

Section 1.4(a)(i)

Excluded Claims

 

Section 7.2(d)

Financial Statements

 

Section 2.4(a)

 

iv

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

 

FTC

 

Section 5.4(a)

Funded Debt

 

Section 1.4(a)(iii)(4)

GAAP

 

Section 2.4(a)

Governmental Entity

 

Section 2.3(c)

Hazardous Materials

 

Section 2.12(a)

HSR Act

 

Section 2.3(c)

Included Assets

 

Section 1.4(a)(iii)(2)

Included Liabilities

 

Section 1.4(a)(iii)(3)

Indefinitely Surviving Representations

 

Section 7.1

Indemnified Party

 

Section 7.4

Indemnifying Party

 

Section 7.4

Independent Accountants

 

Section 1.4(a)(iii)(5)

Intellectual Property

 

Section 2.7(a)(i)

IRS

 

Section 2.10(b)(iv)

Knowledge

 

Section 9.2(b)

LCP Deferred Revenue

 

Section 1.4(a)(iii)(6)

Legal Proceedings

 

Section 2.9

Legal Requirement

 

Section 2.3(b)

Lenders’ Consent

 

Section 6.2(e)

Liens

 

Section 2.1(c)

Losses

 

Section 7.2

Material Adverse Effect

 

Section 9.2(c)

Minimum Amount

 

Section 7.6(a)

Multiemployer Plan

 

Section 2.10(c)

Necessary Consents

 

Section 2.3(c)

Net LCP Deferred Revenue

 

Section 1.4(a)(iii)(7)

Noncompetition Agreement

 

Section 6.3(f)

Notice Period

 

Section 7.4

October Financial Statements

 

Section 5.12(c)

Owned Real Property

 

Section 2.11(a)

Patent Claims

 

Section 1.3(b)

Pension Plans

 

Section 2.10(b)(i)

Permits

 

Section 2.8(b)

Person

 

Section 9.2(d)

Potential Contributor

 

Section 7.6(a)

Pre-Closing Tax Period

 

Section 5.8(a)

Proprietary Information

 

Section 5.2(a)(ii)

Prudent Business Reasons

 

Section 5.11(a)(ii)

PTO

 

Section 2.7(b)

Purchase Price

 

Section 1.2

Purchaser

 

Preamble

Purchaser Charter Documents

 

Section 3.1(b)

Purchaser Deductible Amount

 

Section 7.6(a)

Purchaser Indemnified Parties

 

Section 7.2

Registered Intellectual Property

 

Section 2.7(a)(iii)

Remaining Guaranties

 

Section 5.10(b)

 

v

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

 

Scheduled Guaranties

 

Section 5.10(a)

Seller

 

Preamble

Seller Disclosure Letter

 

Article II

Seller Indemnified Parties

 

Section 7.3

Shares

 

Recital B

Straddle Period

 

Section 5.8(b)

Subsidiaries

 

Section 2.1(a)

Subsidiary Charter Documents

 

Section 2.1(b)

Tax or Taxes

 

Section 2.6(a)(i)

Tax Claim

 

Section 7.8(c)

Tax Return

 

Section 2.6(a)(ii)

Transition Services Agreement

 

Section 5.9

TSA Litigation

 

Section 1.3(a)

Working Capital Deficit

 

Section 1.4(a)(iii)(1)

Working Capital Surplus

 

Section 1.4(a)(iii)(1)

 

vi

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

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
November 17, 2004, between Science Applications International Corporation, a
Delaware corporation (“Seller”), and TTI Holding Corporation, a Delaware
corporation (“Purchaser”).

 

RECITALS

 

A.                                   Seller owns all of the issued and
outstanding shares of capital stock of Telcordia Technologies, Inc., a Delaware
corporation (the “Company”).

 

B.                                     At the Closing, Seller desires to sell
all of the outstanding shares (the “Shares”) of common stock of the Company, par
value $0.01 per share (“Company Common Stock”), to Purchaser and Purchaser
desires to purchase all of the Shares from Seller, in each case upon the terms
and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the covenants and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

 

ARTICLE I

PURCHASE AND SALE OF STOCK

 

1.1                                 Sale and Transfer of Stock.

 

Subject to and upon the terms and conditions of this Agreement, at the Closing,
Seller shall sell, convey, assign, transfer and deliver to Purchaser, and
Purchaser shall purchase from Seller, all the Shares, free and clear of all
Liens.

 

1.2                                 The Purchase Price.  Subject to and upon the
terms and conditions of this Agreement, in consideration for the aforesaid sale,
conveyance, assignment, transfer and delivery of the Shares at the Closing, the
Purchaser shall pay to Seller cash in the amount of One Billion Three Hundred
Fifty Million Dollars ($1,350,000,000) (the “Purchase Price”), which Purchase
Price shall be paid by the Purchaser to the Seller at the Closing by wire
transfer of immediately available funds to such account as the Seller shall, not
less than one (1) business day prior to the Closing Date, designate in writing
to Purchaser.  The Purchase Price shall be subject to adjustment as provided in
Section 1.4.

 

1.3                                 The Additional Purchase Price.

 

Subject to and upon the terms and conditions of this Agreement, as additional
consideration for the sale, conveyance, assignment, transfer and delivery of the
Shares at the Closing, the Purchaser shall, within fifteen (15) days from the
occurrence of any of the following events, pay to Seller the following amounts
(collectively, the “Additional Purchase Price”):

 

(A)                                  THE AMOUNT OF CONSIDERATION, IF ANY,
RECEIVED BY PURCHASER OR ANY OF ITS AFFILIATES (INCLUDING, FOLLOWING THE
CLOSING, THE COMPANY OR ANY OF ITS SUBSIDIARIES) (NET OF INCREMENTAL TAXES
IMPOSED OR TAX ATTRIBUTES UTILIZED WITH RESPECT TO THE RECEIPT OF SUCH

 

1

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

 

CONSIDERATION) RELATED TO OR ARISING OUT OF THE SETTLEMENT, OR PURSUANT TO A
JUDGMENT OR ORDER, IN CONNECTION WITH THE MATTER OF TELCORDIA TECHNOLOGIES, INC.
V. TELKOM SOUTH AFRICA (THE “TSA LITIGATION”);

 

(B)                                 FIFTY PERCENT (50%) OF THE AMOUNT OF
CONSIDERATION, WHEN AND AS RECEIVED, (NET OF RELATED OUT-OF-POCKET LEGAL AND
ADVISER FEES AND EXPENSES INCURRED BY THE COMPANY AFTER THE CLOSING DATE AND
INCREMENTAL TAXES IMPOSED OR TAX ATTRIBUTES UTILIZED WITH RESPECT TO THE RECEIPT
OF SUCH CONSIDERATION), RECEIVED BY PURCHASER OR ANY OF ITS AFFILIATES
(INCLUDING, FOLLOWING THE CLOSING, THE COMPANY OR ANY OF ITS SUBSIDIARIES) IN
SETTLEMENT OR PURSUANT TO A JUDGMENT OR ORDER, INCLUDING ANY LICENSE OR
CROSS-LICENSE OF INTELLECTUAL PROPERTY RESULTING THEREFROM, RELATED TO OR
ARISING OUT OF THE ENFORCEMENT OF THE COMPANY’S RIGHTS UNDER THE PATENTS SET
FORTH ON SECTION 1.3(B) OF THE SELLER DISCLOSURE LETTER (“PATENT CLAIMS”),
PROVIDED, HOWEVER, THAT IF PURCHASER OR ANY OF ITS AFFILIATES RECEIVES
CONSIDERATION OTHER THAN CASH IN PAYMENT OF ANY SETTLEMENT, JUDGMENT OR ORDER
RELATING TO THE PATENT CLAIMS, INCLUDING ANY LICENSE OR CROSS-LICENSE OF
INTELLECTUAL PROPERTY, THE PARTIES SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
VALUE SUCH NON-CASH CONSIDERATION AND PURCHASER SHALL PROMPTLY PAY SELLER ITS
FIFTY PERCENT (50%) SHARE OF SUCH NON-CASH CONSIDERATION IN CASH BASED ON THE
AGREED-UPON VALUE OF SUCH NON-CASH CONSIDERATION (I.E. VALUE OF NON-CASH
CONSIDERATION SHALL BE BASED ON THE ADDITIONAL INCREMENTAL PROFIT OR OTHER VALUE
TO BE RECEIVED BY THE COMPANY ATTRIBUTABLE TO THE PATENT CLAIMS), PROVIDED,
FURTHER, THAT IF THE PARTIES ARE UNABLE TO AGREE ON THE VALUE OF SUCH NON-CASH
CONSIDERATION, THEN THE VALUE OF SUCH NON-CASH CONSIDERATION SHALL BE DETERMINED
IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 9.7(C);

 

(C)                                  IF ANY AMOUNT REPRESENTING THE RESERVE FOR
TAX CLAIMS IDENTIFIED BY STATE IN SECTION 1.3(C) OF THE SELLER DISCLOSURE LETTER
IS GREATER THAN THE FINAL AMOUNT PAID BY THE COMPANY IN CONNECTION WITH THE
SETTLEMENT OR FINAL JUDGMENT OF ANY SUCH TAX CLAIMS, THE AMOUNT OF THE
DIFFERENCE BETWEEN SUCH RESERVE IDENTIFIED IN SECTION 1.3(C) OF THE SELLER
DISCLOSURE LETTER AND THE AMOUNT PAID BY THE COMPANY PURSUANT TO SUCH SETTLEMENT
OR JUDGMENT, PROVIDED, HOWEVER, THAT SELLER’S OBLIGATION TO INDEMNIFY PURCHASER
FOR SUCH TAX CLAIMS IN ACCORDANCE WITH SECTION 7.8 SHALL REMAIN IN FULL FORCE
AND BE UNAFFECTED BY THIS SECTION 1.3(C);

 

(D)                                 IF ANY AMOUNT REPRESENTING THE RESERVE FOR
TAX CLAIMS IDENTIFIED BY STATE OR COUNTRY IN SECTION 1.3(D) OF THE SELLER
DISCLOSURE LETTER IS GREATER THAN THE FINAL AMOUNT PAID BY THE COMPANY IN
CONNECTION WITH THE SETTLEMENT OR FINAL JUDGMENT OF ANY SUCH TAX CLAIMS, THE
AMOUNT OF THE DIFFERENCE BETWEEN THE SUCH RESERVE IDENTIFIED IN SECTION 1.3(D)
OF THE SELLER DISCLOSURE LETTER AND THE AMOUNT PAID BY THE COMPANY PURSUANT TO
SUCH SETTLEMENT OR JUDGMENT, PROVIDED, HOWEVER, THAT IF NO AUDIT OR
INVESTIGATION IS INSTITUTED BY THE TAXING AUTHORITIES IN ANY SUCH STATE OR
COUNTRY BY THE SECOND ANNIVERSARY OF THE CLOSING DATE, THEN THE AMOUNT
REPRESENTING THE FULL AMOUNT OF THE RESERVE FOR TAX CLAIMS IDENTIFIED BY STATE
OR COUNTRY IN SECTION 1.3(D) OF THE SELLER DISCLOSURE LETTER SHALL BE REMITTED
TO SELLER WITHIN FIFTEEN (15) DAYS OF THE SECOND ANNIVERSARY OF THE CLOSING
DATE, PROVIDED, FURTHER THAT SELLER’S OBLIGATION TO INDEMNIFY PURCHASER FOR SUCH
TAX CLAIMS IN ACCORDANCE WITH SECTION 7.8 SHALL REMAIN IN FULL FORCE AND BE
UNAFFECTED BY THIS SECTION 1.3(D);

 

(E)                                  THE AMOUNT OF THE U.S. FEDERAL RESEARCH TAX
CREDITS AND NEW JERSEY RESEARCH TAX CREDITS EARNED BY THE COMPANY DURING THE
PRE-CLOSING TAX PERIODS BEGINNING ON OR AFTER FEBRUARY 1, 2004, WHICH MAY NOT BE
INCLUDABLE OR REPORTABLE ON SELLER’S U.S. OR NEW JERSEY

 

2

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TAX RETURNS, CALCULATED IN THE CASE OF SUCH AMOUNTS ATTRIBUTABLE TO THE YEAR IN
WHICH THE CLOSING OCCURS BY MULTIPLYING THE TOTAL AMOUNT OF EACH SUCH TAX CREDIT
EARNED BY THE COMPANY BY A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF
DAYS ELAPSED DURING ANY SUCH PRE-CLOSING TAX PERIOD AND THE DENOMINATOR OF WHICH
IS 365; PROVIDED, HOWEVER, THAT ANY PAYMENT MADE PURSUANT TO THIS SECTION 1.3(E)
SHALL BE MADE AFTER SUCH TAX CREDITS ARE ACTUALLY UTILIZED BY THE COMPANY OR ANY
OF THE SUBSIDIARIES IN A TAXABLE PERIOD BEGINNING AFTER THE CLOSING DATE AND
AFTER ALL RELATED TAX CREDIT CARRY-FORWARDS EXISTING AS OF THE CLOSING DATE HAVE
BEEN UTILIZED BY THE COMPANY OR ANY OF THE SUBSIDIARIES; AND

 

(F)                                    ANY TAX REFUNDS RECEIVED (NET OF
INCREMENTAL TAXES IMPOSED OR TAX ATTRIBUTES UTILIZED WITH RESPECT TO THE RECEIPT
OF SUCH REFUND AND NET OF TAX ATTRIBUTES REDUCED, EXTINGUISHED OR CANCELLED IN
CONNECTION WITH, OR AS A RESULT OF, SUCH REFUND) AFTER THE CLOSING (INCLUDING
REFUND CHECKS NEGOTIATED AFTER THE CLOSING TO THE EXTENT NOT OTHERWISE TAKEN
INTO ACCOUNT IN SECTION 1.4), IF ANY, BY THE COMPANY FOR THE PRE-CLOSING TAX
PERIODS INCLUDING, WITHOUT LIMITATION, REFUNDS RECEIVED BY THE COMPANY RELATING
TO THE NEW JERSEY BUSINESS EMPLOYMENT INCENTIVE PROGRAM, ALL OF WHICH SHALL,
WITH RESPECT TO THE YEAR IN WHICH THE CLOSING OCCURS, BE CALCULATED BY
MULTIPLYING THE TOTAL AMOUNT OF ANY SUCH TAX REFUND RECEIVED BY THE COMPANY FOR
THE YEAR IN WHICH THE CLOSING OCCURS BY A FRACTION, THE NUMERATOR OF WHICH IS
THE NUMBER OF DAYS ELAPSED DURING SUCH PRE-CLOSING TAX PERIOD AND THE
DENOMINATOR OF WHICH IS 365; PROVIDED, HOWEVER, THAT NO PAYMENT SHALL BE
REQUIRED PURSUANT TO THIS SECTION 1.3(F) WITH RESPECT TO TAX REFUNDS RESULTING
FROM, OR RELATING TO, A CARRY-BACK OF ANY LOSS ARISING IN A TAXABLE PERIOD (OR
PORTION THEREOF) THAT BEGAN AFTER THE CLOSING DATE.

 

1.4                                 PURCHASE PRICE ADJUSTMENT.

 

The Purchase Price shall be subject to adjustment as follows:

 

(A)                                  WORKING CAPITAL ADJUSTMENT.

 

(I)                           ESTIMATED WORKING CAPITAL ADJUSTMENT.  AT THE
CLOSING, THE PURCHASE PRICE WILL BE ADJUSTED ON A DOLLAR-FOR-DOLLAR BASIS AS SET
FORTH IN THIS SECTION 1.4(A)(I).  NOT MORE THAN TEN (10) BUSINESS DAYS, BUT IN
NO EVENT LESS THAN FIVE (5) BUSINESS DAYS, BEFORE THE ANTICIPATED CLOSING DATE,
SELLER SHALL, IN GOOD FAITH, PREPARE AND DELIVER TO PURCHASER A WRITTEN
STATEMENT OF ESTIMATED ADJUSTED WORKING CAPITAL, LCP DEFERRED REVENUE, NET LCP
DEFERRED REVENUE AND FUNDED DEBT AS OF THE OPEN OF BUSINESS ON THE CLOSING DATE,
IN EACH CASE USING AN ESTIMATED CLOSING BALANCE SHEET PREPARED USING THE
COMPANY’S THEN AVAILABLE FINANCIAL INFORMATION AS OF SUCH DATE. THE PURCHASE
PRICE TO BE PAID AT CLOSING SHALL BE REDUCED BY THE ESTIMATED SUM OF ANY NET LCP
DEFERRED REVENUE PLUS THE WORKING CAPITAL DEFICIT, IF ANY, PLUS FUNDED DEBT, IF
ANY, AND SHALL BE INCREASED BY THE AMOUNT OF THE WORKING CAPITAL SURPLUS, IF ANY
(THE NET AMOUNT OF SUCH ADJUSTMENTS IS REFERRED TO HEREIN AS THE “ESTIMATED
WORKING CAPITAL ADJUSTMENT”).

 

(II)                        FINAL WORKING CAPITAL ADJUSTMENT.

 

(1)                                  AS SOON AS PRACTICABLE AFTER THE CLOSING,
BUT IN NO EVENT LATER THAN THIRTY (30) DAYS AFTER THE CLOSING DATE, PURCHASER
SHALL (I) PREPARE A BALANCE SHEET OF THE COMPANY AS OF THE CLOSING DATE IN
ACCORDANCE WITH GAAP APPLIED ON A BASIS CONSISTENT WITH

 

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THE COMPANY’S HISTORICAL PRACTICES IN THE PREPARATION OF ITS UNAUDITED MONTHLY
FINANCIAL STATEMENTS (THE “CLOSING BALANCE SHEET”), (II) CALCULATE THE ADJUSTED
WORKING CAPITAL OF THE COMPANY AS OF THE CLOSING DATE, (III) CALCULATE THE LCP
DEFERRED REVENUE AS OF THE CLOSING DATE, (IV) CALCULATE THE NET LCP DEFERRED
REVENUE AS OF THE CLOSING DATE, (V) CALCULATE FUNDED DEBT, AND (VI) PREPARE AND
DELIVER TO PURCHASER A STATEMENT (THE “ADJUSTMENT STATEMENT”) SETTING FORTH
PURCHASER’S CALCULATIONS OF THE ADJUSTED WORKING CAPITAL, THE LCP DEFERRED
REVENUE, THE NET LCP DEFERRED REVENUE AND FUNDED DEBT.  FOR THE AVOIDANCE OF
DOUBT, ONLY THOSE ACCOUNTS IDENTIFIED IN SECTION 1.4(A)(II) OF THE SELLER
DISCLOSURE LETTER SHALL BE INCLUDED IN THE CLOSING BALANCE SHEET FOR PURPOSES OF
CALCULATING ADJUSTED WORKING CAPITAL.  SELLER SHALL HAVE THIRTY (30) DAYS AFTER
RECEIPT OF THE CLOSING BALANCE SHEET AND THE ADJUSTMENT STATEMENT TO GIVE
PURCHASER WRITTEN NOTICE OF ITS OBJECTION TO ANY ITEM OR CALCULATION CONTAINED
IN THE CLOSING BALANCE SHEET OR THE ADJUSTMENT STATEMENT.  IF SELLER DOES NOT
GIVE PURCHASER WRITTEN NOTICE OF ITS OBJECTION TO THE CLOSING BALANCE SHEET AND
THE ADJUSTMENT STATEMENT WITHIN SUCH THIRTY (30) DAY PERIOD, SUCH CLOSING
BALANCE SHEET AND ADJUSTMENT STATEMENT SHALL BE DEEMED FINAL AND CONCLUSIVE WITH
RESPECT TO THE DETERMINATION OF THE ADJUSTED WORKING CAPITAL, THE LCP DEFERRED
REVENUE, THE NET LCP DEFERRED REVENUE AND FUNDED DEBT AND SHALL BE BINDING ON
SELLER FOR SUCH PURPOSE.  IF, HOWEVER, SELLER OBJECTS TO ANY ITEMS OR
CALCULATIONS CONTAINED IN THE CLOSING BALANCE SHEET OR THE ADJUSTMENT STATEMENT,
SELLER SHALL SUBMIT A STATEMENT OF ITS OBJECTIONS THAT QUANTIFIES THE DOLLAR
AMOUNT OF EACH OBJECTION AND OUTLINES IN REASONABLE DETAIL THE BASIS AND
RATIONALE FOR SUCH OBJECTION, AND THE PARTIES SHALL MEET AND SHALL ATTEMPT IN
GOOD FAITH TO RESOLVE SUCH OBJECTIONS.  IF THE PARTIES ARE UNABLE TO RESOLVE
SELLER’S OBJECTIONS WITHIN THIRTY (30) DAYS FOLLOWING SUCH OBJECTION, SUCH
OBJECTIONS WILL BE RESOLVED BY THE INDEPENDENT ACCOUNTANT, WHO SHALL RESOLVE ALL
SUCH OBJECTIONS AND SHALL MAKE ANY NECESSARY CHANGES OR REVISIONS TO THE CLOSING
BALANCE SHEET AND THE ADJUSTMENT STATEMENT WITHIN FIFTEEN (15) DAYS AFTER SUCH
INDEPENDENT ACCOUNTANT RECEIVES WRITTEN INSTRUCTIONS TO RESOLVE SUCH
OBJECTIONS.  THE INDEPENDENT ACCOUNTANT’S REVIEW SHALL BE LIMITED TO THE
OBJECTIONS MADE IN THE STATEMENT SUBMITTED TO PURCHASER BY SELLER AND
PURCHASER’S RESPONSES THERETO AND IN NO EVENT SHALL THE INDEPENDENT ACCOUNTANT
DETERMINE THAT ANY OBJECTION MADE BY SELLER EXCEEDS THE AMOUNT QUANTIFIED BY
SELLER RELATING TO EACH SUCH OBJECTION.  WITHIN FIVE (5) DAYS AFTER COMPLETION,
THE INDEPENDENT ACCOUNTANT SHALL DELIVER THE CLOSING BALANCE SHEET AND THE
ADJUSTMENT STATEMENT (AS SO CHANGED OR REVISED, IF APPLICABLE) TO PURCHASER AND
SELLER.  THE CLOSING BALANCE SHEET AND THE ADJUSTMENT STATEMENT AS FINALIZED BY
THE INDEPENDENT ACCOUNTANT SHALL BE DEEMED FINAL AND CONCLUSIVE WITH RESPECT TO
THE DETERMINATION OF THE ADJUSTED WORKING CAPITAL, LCP DEFERRED REVENUE, THE NET
LCP DEFERRED REVENUE AND FUNDED DEBT AND SHALL BE BINDING ON ALL THE PARTIES
HERETO FOR SUCH PURPOSES (BUT SHALL NOT LIMIT THE REPRESENTATIONS, WARRANTIES,
COVENANTS OR AGREEMENTS OF SUCH PARTIES SET FORTH ELSEWHERE IN THIS AGREEMENT). 
THE FEES AND EXPENSES OF THE INDEPENDENT ACCOUNTANT IN RESOLVING ALL SUCH
OBJECTIONS SHALL BE BORNE EQUALLY BY THE SELLER AND PURCHASER.

 

(2)                                  ADJUSTMENTS.  PURCHASER AND SELLER SHALL
MAKE THE FOLLOWING PAYMENTS, AS APPLICABLE, WITHIN FIVE (5) BUSINESS DAYS
FOLLOWING THE FINAL DETERMINATION OF THE CLOSING BALANCE SHEET, ADJUSTED WORKING
CAPITAL, THE LCP DEFERRED REVENUE, NET LCP DEFERRED REVENUE AND FUNDED DEBT IN
ACCORDANCE WITH SECTION 1.4(A)(II)(1):

 

A)                                      SELLER SHALL PAY TO PURCHASER AN AMOUNT
EQUAL TO THE WORKING CAPITAL DEFICIT, IF ANY, PLUS THE NET LCP DEFERRED REVENUE,
IF ANY, PLUS FUNDED DEBT, IF ANY.

 

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B)                                     PURCHASER SHALL PAY TO SELLER AN AMOUNT
EQUAL TO THE WORKING CAPITAL SURPLUS, IF ANY.

 

C)                                      THE PAYMENTS SET FORTH IN THIS
SECTION 1.4(A)(II)(2) SHALL ONLY BE MADE AFTER GIVING EFFECT TO ANY ESTIMATED
WORKING CAPITAL ADJUSTMENT PURSUANT TO SECTION 1.4(A)(I) AND, IF PURCHASER AND
SELLER ARE BOTH REQUIRED TO MAKE PAYMENTS PURSUANT TO THIS
SECTION 1.4(A)(II)(2), THEN THE PARTIES SHALL ONLY BE REQUIRED TO PAY THE NET
AMOUNT, AFTER OFFSETTING THE PAYMENTS TO BE RECEIVED FROM THE OTHER PARTY
PURSUANT TO THIS SECTION 1.4(A)(II)(2).  IN ANY EVENT, IF NO WORKING CAPITAL
ADJUSTMENT PAYMENT IS DUE UNDER THIS SECTION 1.4(A)(II)(2) AND A PAYMENT WAS
MADE AT CLOSING PURSUANT TO THE ESTIMATED WORKING CAPITAL ADJUSTMENT SET FORTH
IN SECTION 1.4(A)(I), THEN THE FULL AMOUNT OF SUCH PAYMENT MADE AT CLOSING SHALL
BE REPAID TO THE PURCHASER OR SELLER, AS THE CASE MAY BE, BY THE OTHER PARTY. 
FOR THE AVOIDANCE OF DOUBT AND BY WAY OF EXAMPLE, IF THE PURCHASE PRICE IS
REDUCED AT CLOSING AS A RESULT OF THE ESTIMATED WORKING CAPITAL ADJUSTMENT,
SELLER’S OBLIGATION TO PAY PURCHASER PURSUANT TO SECTION 1.4(A)(II)(2)A) SHALL
BE REDUCED TO THE EXTENT OF THE ESTIMATED WORKING CAPITAL ADJUSTMENT.  ANY
PAYMENTS TO BE MADE PURSUANT TO THIS SECTION 1.4(A)(II)(2) SHALL BE MADE BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS AND, IN THE CASE OF A PAYMENT TO THE
SELLER, SHALL BE MADE TO SUCH ACCOUNT DESIGNATED BY SELLER PURSUANT TO
SECTION 1.2 AND, IN THE CASE OF A PAYMENT TO PURCHASER, SHALL BE MADE TO AN
ACCOUNT DESIGNATED IN WRITING BY PURCHASER.

 

(III)                     DEFINITIONS.  FOR PURPOSES OF THIS SECTION 1.4(A), THE
TERMS SET FORTH BELOW HAVE THE FOLLOWING MEANING:

 

(1)                                  “ADJUSTED WORKING CAPITAL” MEANS THE VALUE
OF THE INCLUDED ASSETS, LESS THE VALUE OF THE INCLUDED LIABILITIES AS REFLECTED
IN THE CLOSING BALANCE SHEET, AFTER GIVING EFFECT TO THE ESTIMATED WORKING
CAPITAL ADJUSTMENT, IF ANY.  TO THE EXTENT THE ADJUSTED WORKING CAPITAL IS LESS
THAN NEGATIVE FORTY-SEVEN MILLION DOLLARS ($47,000,000) SUCH DIFFERENCE SHALL BE
DEEMED TO BE A “WORKING CAPITAL DEFICIT.”  TO THE EXTENT THE ADJUSTED WORKING
CAPITAL IS MORE THAN NEGATIVE FORTY-SEVEN MILLION DOLLARS ($47,000,000)  SUCH
DIFFERENCE SHALL BE DEEMED TO BE A “WORKING CAPITAL SURPLUS.”

 

(2)                                  “INCLUDED ASSETS” MEANS THE TOTAL VALUE OF
THE FOLLOWING ACCOUNTS, AS REFLECTED IN THE CLOSING BALANCE SHEET: ACCOUNTS
RECEIVABLE (BILLED); ACCOUNTS RECEIVABLE (UNBILLED); ALLOWANCES FOR DOUBTFUL
ACCOUNTS; PREPAID ACCOUNTS; CHESTER HOLDBACK – ACCOUNTS RECEIVABLE; AND CURRENT
ASSETS – OTHER.  FOR THE AVOIDANCE OF DOUBT, (A) “CURRENT ASSETS – OTHER” SHALL
INCLUDE ALL ASSETS THAT WOULD BE CLASSIFIED AS CURRENT ASSETS ON A BALANCE SHEET
PREPARED IN ACCORDANCE WITH GAAP, APPLIED ON A BASIS CONSISTENT WITH THE
COMPANY’S HISTORICAL PRACTICES IN THE PREPARATION OF ITS UNAUDITED MONTHLY
FINANCIAL STATEMENTS, THAT DO NOT APPEAR IN ANOTHER ACCOUNT INCLUDED IN THE
DEFINITION OF INCLUDED ASSETS, AND (B) INCLUDED ASSETS SHALL EXCLUDE (I)
PAYMENTS MADE OR TO BE MADE TO THE COMPANY IN CONNECTION WITH THE TSA LITIGATION
OR ANY PATENT CLAIMS, (II) REGULAR CASH, (III) CASH EQUIVALENTS, SHORT-TERM
INVESTMENTS - LESS THAN 90 DAYS, (IV) RESTRICTED CASH, (V) WORK IN PROCESS, (VI)
MATERIAL INVENTORY, (VII) FINISHED GOODS INVENTORY, (VIII) INVENTORY RESERVES,
(IX) A/R - NON-TRADE, (X) NOTES RECEIVABLE - CURRENT PORTION, (XI) ACCRUED
INTEREST RECEIVABLE, (XII) OFFICERS AND EMPLOYEE ADVANCES, RECEIVABLES, (XIII)
SHORT-TERM INVESTMENTS - GREATER THAN 90 DAYS, LESS THAN 1 YEAR, (XIV)
SHORT-TERM DEPOSITS, (XV) DEFERRED TAX ASSET - CURRENT, AND (XVI) DEFERRED COSTS
- LONG TERM.

 

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(3)                                  “INCLUDED LIABILITIES” MEANS THE TOTAL
VALUE OF THE FOLLOWING ACCOUNTS, AS REFLECTED IN THE CLOSING BALANCE SHEET:
ACCOUNTS PAYABLE; ACCRUED LIABILITIES-OTHER (EXCLUDING SALES TAX RESERVES AND
TSA TAX RESERVES); ADVANCE PAYMENTS; DEFERRED REVENUE (CURRENT PORTION,
EXCLUDING LCP DEFERRED REVENUE); DEFERRED CREDITS (CURRENT PORTION); DEFERRED
COMPENSATION (CURRENT PORTION); ACCRUED SALARIES, WAGES AND OTHER; ACCRUED
VACATION; AND ACCRUED CASH AND STOCK BONUS.  FOR THE AVOIDANCE OF DOUBT, (A)
“ACCRUED LIABILITIES-OTHER” SHALL INCLUDE ALL ACCRUED LIABILITIES THAT WOULD BE
CLASSIFIED AS CURRENT ON A BALANCE SHEET PREPARED IN ACCORDANCE WITH GAAP,
APPLIED ON A BASIS CONSISTENT WITH THE COMPANY’S HISTORICAL PRACTICES IN THE
PREPARATION OF ITS UNAUDITED MONTHLY FINANCIAL STATEMENTS, THAT DO NOT APPEAR IN
ANOTHER ACCOUNT INCLUDED IN THE DEFINITION OF INCLUDED LIABILITIES, AND (B)
INCLUDED LIABILITIES SHALL EXCLUDE (I) SALES TAX RESERVES AND TSA TAX RESERVES,
(II) LCP DEFERRED REVENUE, (III) INCOME TAXES PAYABLE, (IV) DEFERRED TAXES AND
(V) NOTES PAYABLE AND CURRENT PORTION OF LONG-TERM DEBT AND (VI) AMOUNTS DUE
UNDER THE COMPANY’S EMPLOYEE APPRECIATION PLAN.  INCLUDED LIABILITIES SHALL NOT
INCLUDE ANY FEES AND EXPENSES PAID BY SELLER PURSUANT TO SECTION 8.3.

 

(4)                                  “FUNDED DEBT” MEANS, AS OF THE CLOSING
DATE, THE OUTSTANDING PRINCIPAL AMOUNT OF, ACCRUED AND UNPAID INTEREST ON, AND
ANY OTHER PAYMENT OBLIGATIONS (INCLUDING PREPAYMENT PREMIUMS PAYABLE AS OF SUCH
DATE IF SUCH PRINCIPAL AND INTEREST IS PAID IN FULL AS OF SUCH DATE, FEES,
EXPENSES OR OTHER AMOUNTS) ARISING UNDER, ANY OBLIGATIONS OF THE COMPANY OR ANY
SUBSIDIARY FOR INDEBTEDNESS OR GUARANTEES OF INDEBTEDNESS FOR BORROWED MONEY,
PROVIDED, HOWEVER, THAT THE CANCELLATION OF OBLIGATIONS OWING FROM THE COMPANY
TO SELLER (OR VICE VERSA) AT OR PRIOR TO THE CLOSING DATE SHALL IN NO EVENT
AFFECT THE CLOSING BALANCE SHEET OR THE ESTIMATED WORKING CAPITAL ADJUSTMENT.

 

(5)                                  “INDEPENDENT ACCOUNTANTS” MEANS EITHER
PRICEWATERHOUSECOOPERS OR KPMG.

 

(6)                                  “LCP DEFERRED REVENUE” MEANS THE VALUE OF
THAT PORTION OF THE COMPANY’S DEFERRED REVENUE REFLECTED IN THE CLOSING BALANCE
SHEET THAT IS ATTRIBUTABLE TO PRE-PAYMENTS FOR THE COMPANY’S LIFE CYCLE PROGRAM.

 

(7)                                  “NET LCP DEFERRED REVENUE” MEANS LCP
DEFERRED REVENUE LESS THE AMOUNT OF CASH REFLECTED IN THE CLOSING BALANCE SHEET.

 

(B)                                 PATENT CLAIM ADJUSTMENT.  THE PURCHASE PRICE
TO BE PAID AT CLOSING SHALL BE REDUCED BY AN AMOUNT EQUAL TO 50% OF ANY
CONSIDERATION RECEIVED BY THE COMPANY AFTER THE DATE HEREOF AND PRIOR TO THE
CLOSING DATE IN SETTLEMENT OR PURSUANT TO A JUDGMENT OR ORDER, INCLUDING ANY
LICENSE OR CROSS-LICENSE OF INTELLECTUAL PROPERTY RESULTING THEREFROM, RELATED
TO OR ARISING OUT OF ANY PATENT CLAIMS (NET OF ANY FEES AND EXPENSES PAID BY THE
COMPANY IN RESPECT OF SUCH PATENT CLAIMS).

 

(C)                                  OTHER ADJUSTMENTS.  THE PURCHASE PRICE TO
BE PAID AT CLOSING SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE AGGREGATE AMOUNTS
DUE UNDER THE EXECUTIVE CHANGE-IN-CONTROL, INCENTIVE AND SEVERANCE AGREEMENTS
SET FORTH IN SECTION 1.4(C) OF THE SELLER DISCLOSURE LETTER.

 

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1.5                                 PURCHASE PRICE ALLOCATION.

 

A portion of the Purchase Price shall be allocated to the Noncompetition
Agreement, as set forth in Section 1.5  of the Seller Disclosure Letter, and
neither Seller nor Purchaser shall take any position inconsistent with such
allocation in any Tax Return.

 

1.6                                 THE CLOSING.  THE CLOSING FOR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (THE “CLOSING”)
SHALL TAKE PLACE AT THE OFFICES OF WILLKIE FARR & GALLAGHER LLP, LOCATED AT 787
SEVENTH AVENUE, NEW YORK, NY 10019, ON THE LATER OF (I) FEBRUARY 1, 2005 OR (II)
THE SECOND BUSINESS DAY AFTER THE SATISFACTION OR WAIVER OF THE CONDITIONS SET
FORTH IN ARTICLE VI (OTHER THAN THOSE THAT BY THEIR TERMS ARE TO BE SATISFIED OR
WAIVED AT THE CLOSING), OR AT SUCH OTHER TIME, DATE AND LOCATION AS THE PARTIES
HERETO AGREE IN WRITING.  THE DATE ON WHICH THE CLOSING OCCURS IS REFERRED TO
HEREIN AS THE “CLOSING DATE.”

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser, except as set forth in the related
section(s) of the disclosure letter supplied by Seller to Purchaser dated as of
the date hereof (the “Seller Disclosure Letter”), as follows:

 

2.1                                 Organization; Standing and Power; Charter
Documents; Subsidiaries.

 

(A)                                  ORGANIZATION; STANDING AND POWER.  THE
COMPANY AND EACH OF ITS SUBSIDIARIES (AS DEFINED BELOW) (I) IS A CORPORATION OR
OTHER ORGANIZATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER
THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION (EXCEPT, IN
THE CASE OF GOOD STANDING, FOR ENTITIES ORGANIZED UNDER THE LAWS OF ANY
JURISDICTION THAT DOES NOT RECOGNIZE SUCH CONCEPT), (II) HAS THE REQUISITE POWER
AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS NOW BEING CONDUCTED, AND (III) IS DULY QUALIFIED OR LICENSED AND IN
GOOD STANDING TO DO BUSINESS IN EACH JURISDICTION IN WHICH THE NATURE OF ITS
BUSINESS OR THE OWNERSHIP OR LEASING OF ITS PROPERTIES MAKES SUCH QUALIFICATION
OR LICENSING NECESSARY, OTHER THAN IN SUCH JURISDICTIONS WHERE THE FAILURE TO BE
SO QUALIFIED OR LICENSED OR TO BE IN GOOD STANDING, INDIVIDUALLY OR IN THE
AGGREGATE, WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
THE COMPANY.  FOR PURPOSES OF THIS AGREEMENT, “SUBSIDIARIES” SHALL MEAN THE
ENTITIES SET FORTH ON SCHEDULE 2.1(A) OF THE SELLER DISCLOSURE LETTER.

 

(B)                                 CHARTER DOCUMENTS.  THE COMPANY HAS MADE
AVAILABLE TO PURCHASER A TRUE AND CORRECT COPY OF (I) THE CERTIFICATE OF
INCORPORATION AND BYLAWS OF THE COMPANY, EACH AS AMENDED TO DATE (COLLECTIVELY,
THE “COMPANY CHARTER DOCUMENTS”) AND (II) THE CERTIFICATE OF INCORPORATION AND
BYLAWS, OR LIKE ORGANIZATIONAL DOCUMENTS OF EACH OF ITS SUBSIDIARIES, EACH AS
AMENDED TO DATE (COLLECTIVELY, “SUBSIDIARY CHARTER DOCUMENTS”), AND EACH SUCH
INSTRUMENT IS IN FULL FORCE AND EFFECT.  THE COMPANY IS NOT IN MATERIAL
VIOLATION OF ANY OF THE PROVISIONS OF THE COMPANY CHARTER DOCUMENTS AND EACH
SUBSIDIARY IS NOT IN MATERIAL VIOLATION OF ITS RESPECTIVE SUBSIDIARY CHARTER
DOCUMENTS.

 

(C)                                  SUBSIDIARIES.  ALL THE OUTSTANDING SHARES
OF CAPITAL STOCK OF, OR OTHER EQUITY OR VOTING INTERESTS IN, EACH SUBSIDIARY
HAVE BEEN VALIDLY ISSUED AND ARE FULLY PAID AND

 

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NONASSESSABLE AND ARE OWNED BY THE COMPANY, FREE AND CLEAR OF ALL PLEDGES,
CLAIMS, LIENS, CHARGES, ENCUMBRANCES AND SECURITY INTERESTS OF ANY KIND OR
NATURE WHATSOEVER, OTHER THAN LIENS FOR TAXES NOT YET DUE AND PAYABLE AND
RESTRICTIONS IMPOSED BY APPLICABLE SECURITIES LAWS (COLLECTIVELY, “LIENS”). 
OTHER THAN EQUITY OWNERSHIP INTERESTS IN THE SUBSIDIARIES, NEITHER THE COMPANY
NOR ANY SUBSIDIARY OWNS ANY CAPITAL STOCK OF, OR OTHER EQUITY OR VOTING
INTERESTS OF ANY NATURE IN, OR ANY INTEREST CONVERTIBLE, EXCHANGEABLE OR
EXERCISABLE FOR, CAPITAL STOCK OF, OR OTHER EQUITY OR VOTING INTERESTS OF ANY
NATURE IN, ANY OTHER PERSON.

 

2.2                                 CAPITAL STRUCTURE.

 

The authorized capital stock of Company consists of 1,000 shares of Common
Stock.  At the close of business on the date hereof, seven shares of Company
Common Stock were issued and outstanding and no shares of Company Common Stock
are owned, beneficially, or of record, by any Person other than Seller.  All of
the outstanding shares of capital stock of the Company are duly authorized and
validly issued, fully paid and nonassessable and are owned by the Seller free
and clear of all Liens and are not subject to any preemptive rights.  At the
Closing, the Purchaser will acquire good and valid title to all of the
outstanding shares of capital stock of the Company, free and clear of all Liens,
except any Liens incurred by the Purchaser or its Affiliates.  Except as set
forth above, (i) there are no shares of capital stock of, or other equity or
voting interests in, the Company authorized, issued or outstanding, (ii) there
are no existing options, warrants, calls, preemptive rights, subscription or
other rights, agreements, arrangements or commitments of any character, relating
to the issued or unissued capital stock of the Company, obligating the Company
or any of its Subsidiaries to issue, transfer, redeem, purchase or sell or cause
to be issued, transferred, redeemed, purchased or sold any shares of capital
stock of the Company or any of its Subsidiaries or to otherwise make any payment
in respect of any such shares or any outstanding securities convertible into or
exchangeable into the issued or unissued capital stock of the Company or any of
its Subsidiaries, and (iii) there are no rights, agreements or arrangements of
any character which provide for a stock appreciation or similar right or grant
any right to share in the equity, income, revenue or cash flow of the Company.

 

2.3                                 AUTHORITY; NON-CONTRAVENTION; NECESSARY
CONSENTS.

 

(A)                                  AUTHORITY.  SELLER HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND THE TRANSITION
SERVICES AGREEMENT, THE LICENSE AGREEMENT AND THE NONCOMPETITION AGREEMENT (THE
“ANCILLARY AGREEMENTS”) AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART
OF SELLER AND NO OTHER CORPORATE PROCEEDINGS, APPROVALS OR CONSENTS ON THE PART
OF SELLER, ITS STOCKHOLDERS OR THE COMPANY ARE NECESSARY TO AUTHORIZE THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS OR
TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THIS AGREEMENT
HAS BEEN, AND, UPON EXECUTION AND DELIVERY, EACH OF THE ANCILLARY AGREEMENTS
WILL BE, DULY EXECUTED AND DELIVERED BY SELLER AND, ASSUMING DUE EXECUTION AND
DELIVERY BY PURCHASER, CONSTITUTE VALID AND BINDING OBLIGATIONS OF SELLER,
ENFORCEABLE AGAINST SELLER IN ACCORDANCE WITH THEIR TERMS, EXCEPT AS SUCH
ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM AND OTHER LAWS OF GENERAL APPLICATION AFFECTING
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND (II) GENERAL PRINCIPLES OF
EQUITY.

 

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(B)                                 NON–CONTRAVENTION.  THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS BY SELLER DOES NOT AND
PERFORMANCE OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS BY SELLER WILL NOT
(I) CONFLICT WITH OR VIOLATE THE CERTIFICATE OF INCORPORATION OR BYLAWS OF
SELLER, THE COMPANY CHARTER DOCUMENTS OR THE SUBSIDIARY CHARTER DOCUMENTS,
(II) CONFLICT WITH OR VIOLATE ANY MATERIAL FEDERAL, STATE, LOCAL, MUNICIPAL,
FOREIGN OR OTHER LAW, STATUTE, CONSTITUTION, PRINCIPLE OF COMMON LAW,
RESOLUTION, ORDINANCE, CODE, ORDER, EDICT, DECREE, RULE, REGULATION, RULING OR
REQUIREMENT ISSUED, ENACTED, ADOPTED, PROMULGATED, IMPLEMENTED OR OTHERWISE PUT
INTO EFFECT BY OR UNDER THE AUTHORITY OF ANY GOVERNMENTAL ENTITY (EACH, A “LEGAL
REQUIREMENT”) APPLICABLE TO SELLER OR BY WHICH SELLER IS BOUND OR APPLICABLE TO
THE COMPANY OR ANY SUBSIDIARY OR BY WHICH THE COMPANY OR ANY SUBSIDIARY IS
BOUND, OR (III) RESULT IN ANY BREACH OF OR CONSTITUTE A DEFAULT (OR AN EVENT
THAT WITH NOTICE OR LAPSE OF TIME OR BOTH WOULD BECOME A DEFAULT) UNDER, OR
IMPAIR THE COMPANY’S OR ANY SUBSIDIARY’S RIGHTS OR ALTER THE RIGHTS OR
OBLIGATIONS OF ANY THIRD PARTY UNDER, OR GIVE TO OTHERS ANY RIGHTS OF
TERMINATION, AMENDMENT, ACCELERATION OR CANCELLATION OF, OR RESULT IN THE
CREATION OF A LIEN ON ANY OF THE PROPERTIES OR ASSETS OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES PURSUANT TO ANY CONTRACT, EXCEPT WHERE SUCH BREACH, DEFAULT,
IMPAIRMENT, TERMINATION, AMENDMENT, ACCELERATION, CANCELLATION OR CREATION OF
LIEN, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT REASONABLY BE EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT ON THE COMPANY.

 

(C)                                  NECESSARY CONSENTS.  NO CONSENT, APPROVAL,
ORDER OR AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING WITH ANY
SUPRANATIONAL, NATIONAL, STATE, MUNICIPAL, LOCAL OR FOREIGN GOVERNMENT, ANY
INSTRUMENTALITY, SUBDIVISION, COURT, ADMINISTRATIVE AGENCY OR COMMISSION OR
OTHER GOVERNMENTAL AUTHORITY OR INSTRUMENTALITY, DOMESTIC OR FOREIGN (A
“GOVERNMENTAL ENTITY”), IS REQUIRED TO BE OBTAINED OR MADE BY SELLER OR THE
COMPANY IN CONNECTION WITH SELLER’S EXECUTION AND DELIVERY OF THIS AGREEMENT OR
ANY OF THE ANCILLARY AGREEMENTS OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, EXCEPT FOR (I) SUCH CONSENTS, APPROVALS, ORDERS,
AUTHORIZATIONS, REGISTRATIONS, DECLARATIONS AND FILINGS AS MAY BE REQUIRED UNDER
APPLICABLE FEDERAL, FOREIGN AND STATE SECURITIES (OR RELATED) LAWS AND THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE “HSR ACT”)
AND SATISFACTION OF SUCH OTHER REQUIREMENTS OF THE COMPARABLE LAWS OF OTHER
JURISDICTIONS, (II) SUCH OTHER CONSENTS, AUTHORIZATIONS, FILINGS, APPROVALS AND
REGISTRATIONS SET FORTH IN SECTION 2.3(C) OF THE SELLER DISCLOSURE LETTER, AND
(III) SUCH OTHER CONSENTS, AUTHORIZATIONS, FILINGS, APPROVALS AND REGISTRATIONS
THE ABSENCE OF WHICH WOULD NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT ON THE COMPANY.  THE CONSENTS, APPROVALS, ORDERS, AUTHORIZATIONS,
REGISTRATIONS, DECLARATIONS AND FILINGS SET FORTH IN CLAUSES (I) AND (II) ARE
REFERRED TO HEREIN AS THE “NECESSARY CONSENTS.”

 

2.4                                 FINANCIAL STATEMENTS; NO UNDISCLOSED
LIABILITIES.

 

(A)                                  SELLER HAS MADE AVAILABLE TO PURCHASER
(I) A COPY OF THE COMPANY’S AUDITED CONSOLIDATED BALANCE SHEETS AS OF
JANUARY 31, 2004 AND 2003 AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME,
CASH FLOWS AND STOCKHOLDER’S EQUITY AND COMPREHENSIVE INCOME FOR THE THREE
FISCAL YEARS ENDED JANUARY 31, 2004, ACCOMPANIED BY THE REPORT OF THE COMPANY’S
INDEPENDENT PUBLIC ACCOUNTANTS THEREON AND (II) A COPY OF THE COMPANY’S
UNAUDITED CONSOLIDATED BALANCE SHEET AS OF JULY 31, 2004 AND THE RELATED
CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE SIX-MONTH PERIOD THEN
ENDED (COLLECTIVELY, THE “FINANCIAL STATEMENTS”).  THE FINANCIAL STATEMENTS HAVE
BEEN PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED

 

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ACCOUNTING PRINCIPLES (“GAAP”) (SUBJECT, IN THE CASE OF UNAUDITED FINANCIAL
STATEMENTS, TO NORMAL, RECURRING YEAR-END ADJUSTMENTS AND THE ABSENCE OF NOTES
THERETO) APPLIED ON A CONSISTENT BASIS THROUGHOUT THE PERIODS INDICATED.  THE
FINANCIAL STATEMENTS PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE FINANCIAL
CONDITION AND OPERATING RESULTS OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE
DATES, AND FOR THE PERIODS, INDICATED THEREIN, SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS.  THE COMPANY MAINTAINS A STANDARD SYSTEM OF ACCOUNTING ESTABLISHED
AND ADMINISTERED IN ACCORDANCE WITH GAAP.  THE COMPANY’S UNAUDITED BALANCE SHEET
AS OF JULY 31, 2004 IS REFERRED TO IN THIS AGREEMENT AS THE “COMPANY BALANCE
SHEET.”

 

(B)                                 ALL ACCOUNTS AND NOTES RECEIVABLE OF THE
COMPANY AND THE SUBSIDIARIES REFLECTED IN THE COMPANY BALANCE SHEET HAVE ARISEN
IN THE ORDINARY COURSE OF BUSINESS FROM BONA FIDE TRANSACTIONS, REPRESENT VALID
OBLIGATIONS DUE TO THE OPERATIONS OF THE COMPANY OR THE SUBSIDIARIES IN
ACCORDANCE WITH THEIR TERMS AND HAVE BEEN PROPERLY ACCOUNTED FOR IN ACCORDANCE
WITH GAAP (SUBJECT TO NORMAL YEAR-END ADJUSTMENTS AND THE ABSENCE OF NOTES
THERETO).

 

(C)                                  NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS
ANY LIABILITY OR ANY OBLIGATIONS OF ANY NATURE, WHETHER OR NOT ACCRUED,
CONTINGENT OR OTHERWISE, AND WHETHER DUE OR TO BECOME DUE OR ASSERTED OR
UNASSERTED, EXCEPT FOR (A) LIABILITIES SHOWN ON THE COMPANY BALANCE SHEET, (B)
LIABILITIES AND OBLIGATIONS INCURRED PRIOR TO THE DATE OF THE COMPANY BALANCE
SHEET IN THE ORDINARY COURSE OF BUSINESS WHICH WILL NOT BE REQUIRED BY GAAP TO
BE REFLECTED IN, RESERVED AGAINST OR OTHERWISE DESCRIBED IN THE COMPANY BALANCE
SHEET AND THAT WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT AND (C) LIABILITIES AND OBLIGATIONS INCURRED SINCE THE DATE OF
THE COMPANY BALANCE SHEET IN THE ORDINARY COURSE OF BUSINESS AND WHICH HAVE NOT
AND WOULD NOT REASONABLY BE EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE,
A MATERIAL ADVERSE EFFECT ON THE COMPANY.

 

2.5                                 Absence of Certain Changes or Events.  Since
January 31, 2004, (a) the Company and its Subsidiaries have conducted their
businesses in the ordinary course of business in all material respects, (b)
there has not been (i) any Material Adverse Effect on the Company or any events,
circumstances or conditions that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect on the Company,
(ii) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of the
Company’s or any of its Subsidiaries’ capital stock, other than any
distributions of cash from the Company to Seller in accordance with Seller’s
cash management policies, (iii) any purchase, redemption or other acquisition by
the Company or any of its Subsidiaries of any of the Company’s capital stock or
any other securities of the Company or its Subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities,
(iv) any split, combination or reclassification of any of the Company’s or any
of its Subsidiaries’ capital stock, (v) any material change by the Company in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, (vi) any material revaluation by the Company of any
of its assets other than in the ordinary course of business or (vii) any
material damage, destruction or loss (whether or not covered by insurance) to
any material assets of the Company or any Subsidiary and (c) neither the Company
nor any Subsidiary has taken any of the actions set forth in Section 4.1(b)(ix)
or (xi).

 

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2.6                                 TAXES.

 

(A)                                  DEFINITIONS. FOR THE PURPOSES OF THIS
AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANING:

 

(I)                           “TAX” OR, COLLECTIVELY, “TAXES” SHALL MEAN (I) ANY
AND ALL FEDERAL, STATE, LOCAL AND FOREIGN TAXES AND OTHER LIKE GOVERNMENTAL
CHARGES, FEES OR OTHER LIKE ASSESSMENTS OF ANY KIND WHATSOEVER, INCLUDING TAXES
BASED UPON OR MEASURED BY GROSS RECEIPTS, INCOME, PROFITS, SALES, USE AND
OCCUPATION, AND VALUE ADDED, AD VALOREM, TRANSFER, REGISTRATION, FRANCHISE,
WITHHOLDING, PAYROLL, RECAPTURE, EMPLOYMENT, EXCISE, ENVIRONMENTAL AND PROPERTY
TAXES, TOGETHER WITH ALL INTEREST, PENALTIES AND ADDITIONS IMPOSED WITH RESPECT
TO SUCH AMOUNTS, (II) ANY LIABILITY FOR THE PAYMENT OF ANY AMOUNTS OF THE TYPE
DESCRIBED IN CLAUSE (I) OF THIS SECTION 2.6 AS A RESULT OF BEING A MEMBER OF AN
AFFILIATED, CONSOLIDATED, COMBINED OR UNITARY GROUP FOR ANY PERIOD, AND (III)
ANY LIABILITY FOR THE PAYMENT OF ANY AMOUNTS OF THE TYPE DESCRIBED IN CLAUSES
(I) OR (II) OF THIS SECTION 2.6 AS A RESULT OF ANY EXPRESS OR IMPLIED OBLIGATION
TO INDEMNIFY ANY OTHER PERSON OR AS A RESULT OF ANY OBLIGATIONS UNDER ANY
AGREEMENTS OR ARRANGEMENTS WITH ANY OTHER PERSON WITH RESPECT TO SUCH AMOUNTS
AND INCLUDING ANY LIABILITY FOR TAXES OF A PREDECESSOR ENTITY.

 

(II)                        “TAX RETURN” SHALL MEAN ANY FEDERAL, STATE, LOCAL
AND FOREIGN RETURN, ESTIMATE, INFORMATION STATEMENT OR REPORT.

 

(B)                                 TAX RETURNS AND AUDITS.

 

(I)                           THE COMPANY AND EACH OF ITS SUBSIDIARIES HAVE
PREPARED AND FILED, OR JOINED IN THE FILING OF, WHEN DUE (TAKING INTO ACCOUNT
ALL APPLICABLE EXTENSIONS OF TIME TO FILE), ALL MATERIAL REQUIRED TAX RETURNS
AND SUCH TAX RETURNS HAVE BEEN COMPLETED IN ACCORDANCE WITH APPLICABLE LAW.

 

(II)                        ALL MATERIAL TAXES DUE AND OWING BY THE COMPANY OR
ANY OF ITS SUBSIDIARIES OR TO WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES ARE
LIABLE UNDER TREASURY REGULATIONS SECTION 1.1502-6 BY VIRTUE OF HAVING BEEN A
MEMBER OF AN “AFFILIATED GROUP” (WITHIN THE MEANING OF SECTION 1504(A) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (“CODE”)) OF WHICH THE SELLER IS THE
COMMON PARENT, HAVE BEEN PAID AS OF THE CLOSING DATE, OR HAVE BEEN ACCRUED OR
RESERVED AS SET FORTH ON SECTIONS 1.3(C) OR 1.3(D) OF THE SELLER DISCLOSURE
LETTER.

 

(III)                     NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS
ANY MATERIAL LIABILITY FOR SUCH TAXES AS OF THE DATE OF THE COMPANY BALANCE
SHEET WHICH WERE NOT APPROPRIATELY ACCRUED OR RESERVED ON THE COMPANY BALANCE
SHEET IN ACCORDANCE WITH GAAP, AND NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES HAS INCURRED OR WILL INCUR ANY MATERIAL LIABILITY FOR SUCH TAXES
AFTER THE DATE OF THE COMPANY BALANCE SHEET THROUGH THE CLOSING DATE OTHER THAN
IN THE ORDINARY COURSE OF BUSINESS.

 

(IV)                    EACH MATERIAL AUDIT OR OTHER EXAMINATION RELATING TO
TAXES OF, OR ANY TAX RETURN FILED BY OR ON BEHALF OF, THE COMPANY OR ANY OF ITS
SUBSIDIARIES WHICH BEGAN AFTER JANUARY 1, 2001 (WHETHER COMPLETED OR IN PROGRESS
OR OF WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES HAVE BEEN NOTIFIED); EACH
ADJUSTMENT RELATING TO ANY MATERIAL TAX RETURN FILED BY THE COMPANY OR ANY OF
ITS SUBSIDIARIES (OR ON BEHALF OF THE COMPANY OR ANY OF ITS SUBSIDIARIES TO THE
EXTENT SUCH ADJUSTMENT RELATES TO THE COMPANY OR ANY OF ITS SUBSIDIARIES) THAT
HAS BEEN PROPOSED IN WRITING BY ANY TAX AUTHORITY TO SELLER, THE COMPANY OR ANY
OF ITS SUBSIDIARIES; AND EACH

 

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OUTSTANDING WAIVER OF ANY STATUTE OF LIMITATIONS ON OR OUTSTANDING EXTENSION OF
THE PERIOD FOR THE ASSESSMENT OR COLLECTION OF ANY TAX, AND EACH ASSESSMENT FOR
TAXES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES WHICH CURRENTLY REMAINS UNPAID,
IS SET FORTH IN THE SELLER DISCLOSURE LETTER.

 

(V)                       NEITHER THE COMPANY NOR ANY OF THE SUBSIDIARIES (A)
HAVE ANY LIABILITY FOR THE TAXES OF ANOTHER PERSON (OTHER THAN ANY MEMBER OF THE
CONSOLIDATED GROUP OF WHICH THE SELLER IS THE COMMON PARENT) UNDER TREASURY
REGULATIONS SECTION 1.1502-6 (OR ANY SIMILAR PROVISION OF APPLICABLE STATE,
LOCAL OR FOREIGN LAW), AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR OTHERWISE;
(B) WILL BE REQUIRED TO INCLUDE ANY ITEM OF INCOME IN, OR EXCLUDE ANY ITEM OF
DEDUCTION FROM, TAXABLE INCOME FOR ANY TAXABLE PERIOD, OR PORTION THEREOF,
ENDING AFTER THE CLOSING DATE AS A RESULT OF ANY (1) CHANGE IN METHOD OF
ACCOUNTING FOR A TAXABLE PERIOD ENDING ON OR PRIOR TO THE CLOSING DATE, (2)
“CLOSING AGREEMENT” AS DESCRIBED IN SECTION 7121 OF THE CODE (OR ANY
CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN INCOME TAX LAW)
EXECUTED ON OR PRIOR TO THE CLOSING DATE, (3) INTERCOMPANY TRANSACTIONS OR
EXCESS LOSS ACCOUNT DESCRIBED IN THE TREASURY REGULATIONS UNDER SECTION 1502 OF
THE CODE (OR ANY CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN
INCOME TAX LAW), (4) INSTALLMENT SALE OR OPEN TRANSACTION DISPOSITION MADE ON OR
PRIOR TO THE CLOSING DATE, (5) ITEM HAVING BEEN REPORTED ON THE COMPLETED
CONTRACT METHOD OF ACCOUNTING OR THE PERCENTAGE OF COMPLETION METHOD OF
ACCOUNTING, (6) PREPAID AMOUNT RECEIVED ON OR PRIOR TO THE CLOSING DATE, OR (7)
OTHER ACTION TAKEN PRIOR TO THE CLOSING DATE; OR (C) HAS DISTRIBUTED STOCK OF
ANOTHER PERSON, OR HAS HAD ITS STOCK DISTRIBUTED BY ANOTHER PERSON, IN A
TRANSACTION THAT WAS PURPORTED OR INTENDED TO BE GOVERNED IN WHOLE OR IN PART BY
SECTION 355 OR SECTION 361 OF THE CODE.

 

(VI)                    THERE IS NO CONTRACT, PLAN OR ARRANGEMENT THAT,
INDIVIDUALLY OR COLLECTIVELY, COULD GIVE RISE TO THE PAYMENT OF ANY AMOUNT THAT
WOULD NOT BE DEDUCTIBLE BY THE COMPANY, OR ANY OF ITS SUBSIDIARIES OR PURCHASER
(OR AFFILIATES OF PURCHASER) BY REASON OF SECTION 280G OF THE CODE.

 

(VII)                 SINCE JANUARY 1, 1998, SELLER HAS BEEN, AND CURRENTLY IS,
THE COMMON PARENT OF THE AFFILIATED GROUP (WITHIN THE MEANING OF SECTION 1504 OF
THE CODE) OF WHICH THE COMPANY AND EACH SUBSIDIARY THAT IS ORGANIZED WITHIN THE
UNITED STATES ARE MEMBERS.

 

2.7                                 INTELLECTUAL PROPERTY.

 

(A)                                  DEFINITIONS.  FOR THE PURPOSES OF THIS
AGREEMENT, THE FOLLOWING TERMS HAVE THE FOLLOWING MEANINGS:

 

(I)                           “INTELLECTUAL PROPERTY” SHALL MEAN ANY OR ALL OF
THE FOLLOWING AND ALL RIGHTS IN, ARISING OUT OF, OR ASSOCIATED THEREWITH (I) ALL
UNITED STATES, INTERNATIONAL AND FOREIGN PATENTS AND APPLICATIONS THEREFOR AND
ALL REISSUES, DIVISIONS, RENEWALS, EXTENSIONS, PROVISIONALS, CONTINUATIONS AND
CONTINUATIONS-IN-PART THEREOF, (II) ALL INVENTIONS (WHETHER PATENTABLE OR NOT),
INVENTION DISCLOSURES, IMPROVEMENTS, TRADE SECRETS, PROPRIETARY INFORMATION,
KNOW HOW, TECHNOLOGY, PROCESSES, DESIGNS, TECHNIQUES, RESEARCH AND DEVELOPMENT
PROJECTS, TECHNICAL DATA AND CUSTOMER LISTS, AND ALL DOCUMENTATION RELATING TO
ANY OF THE FOREGOING, (III) WORKS OF AUTHORSHIP IN ANY MEDIA, AND ALL
COPYRIGHTS, COPYRIGHTS REGISTRATIONS AND APPLICATIONS THEREFOR, AND ALL OTHER
RIGHTS, INCLUDING AUTHORS’ OR MORAL RIGHTS, CORRESPONDING THERETO THROUGHOUT THE
WORLD, (IV) ALL COMPUTER SOFTWARE, INCLUDING ALL SOURCE CODE, OBJECT CODE,
FIRMWARE, DEVELOPMENT

 

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TOOLS, FILES, RECORDS AND DATA, AND ALL MEDIA ON WHICH ANY OF THE FOREGOING IS
RECORDED, (V) ALL INDUSTRIAL DESIGNS AND ANY REGISTRATIONS AND APPLICATIONS
THEREFOR THROUGHOUT THE WORLD, (VI) ALL TRADE NAMES, TRADE DRESS, LOGOS, COMMON
LAW TRADEMARKS AND SERVICE MARKS, INTERNET DOMAIN NAMES AND REGISTRATION
THEREFOR, TRADEMARK AND SERVICE MARK REGISTRATIONS AND APPLICATIONS THEREFOR
THROUGHOUT THE WORLD AND ALL GOODWILL ASSOCIATED THEREWITH, (VII) ALL DATABASES
AND DATA COLLECTIONS AND ALL RIGHTS THEREIN THROUGHOUT THE WORLD, (VIII) ALL
INTERNET WEB PAGES, WEBSITES AND ALL INTELLECTUAL PROPERTY USED IN CONNECTION
WITH OR CONTAINED IN ALL VERSIONS OF THE COMPANY’S WEBSITE, AND (IX) ANY SIMILAR
OR EQUIVALENT RIGHTS TO ANY OF THE FOREGOING ANYWHERE IN THE WORLD.

 

(II)                        “COMPANY INTELLECTUAL PROPERTY” SHALL MEAN ANY
INTELLECTUAL PROPERTY THAT IS OWNED BY, OR EXCLUSIVELY LICENSED TO, THE COMPANY.

 

(III)                     “REGISTERED INTELLECTUAL PROPERTY” SHALL MEAN ALL
UNITED STATES, INTERNATIONAL AND FOREIGN (I) PATENTS AND DESIGN OR UTILITY
PATENT APPLICATIONS, (II) REGISTERED TRADEMARKS, APPLICATIONS TO REGISTER
TRADEMARKS, INTENT-TO-USE APPLICATIONS, OR OTHER REGISTRATIONS OR APPLICATIONS
RELATED TO TRADEMARKS, (III) REGISTERED INTERNET DOMAIN NAMES AND APPLICATIONS
TO REGISTER INTERNET DOMAIN NAMES AND (IV) REGISTERED COPYRIGHTS AND
APPLICATIONS FOR COPYRIGHT REGISTRATION.

 

(IV)                    “COMPANY REGISTERED INTELLECTUAL PROPERTY” SHALL MEAN
ALL OF THE REGISTERED INTELLECTUAL PROPERTY OWNED BY, OR FILED IN THE NAME OF,
THE COMPANY OR ANY OF ITS SUBSIDIARIES.

 

(B)                                 REGISTERED INTELLECTUAL PROPERTY;
PROCEEDINGS.  SECTION 2.7(B) OF THE SELLER DISCLOSURE LETTER SETS FORTH AS OF
THE CLOSE OF BUSINESS ON THE DATE HEREOF ALL (I) COMPANY REGISTERED INTELLECTUAL
PROPERTY AND SPECIFIES, WHERE APPLICABLE, THE JURISDICTIONS IN WHICH EACH SUCH
ITEM OF COMPANY REGISTERED INTELLECTUAL PROPERTY HAS BEEN ISSUED OR REGISTERED
AND (II) PROCEEDINGS OR ACTIONS BEFORE ANY GOVERNMENTAL ENTITY (INCLUDING THE
UNITED STATES PATENT AND TRADEMARK OFFICE (THE “PTO”) OR EQUIVALENT AUTHORITY
ANYWHERE ELSE IN THE WORLD) RELATED TO ANY OF THE COMPANY REGISTERED
INTELLECTUAL PROPERTY.

 

(C)                                  NO ORDER.  NO COMPANY INTELLECTUAL PROPERTY
OWNED BY THE COMPANY AND, TO THE KNOWLEDGE OF SELLER, NO COMPANY INTELLECTUAL
PROPERTY EXCLUSIVELY LICENSED TO THE COMPANY, IS SUBJECT TO ANY OUTSTANDING
ORDER, INJUNCTION OR STIPULATION ENTERED OR IMPOSED BY ANY GOVERNMENTAL ENTITY
RESTRICTING IN ANY MANNER THE USE, TRANSFER, OR LICENSING THEREOF BY COMPANY OR
ANY OF ITS SUBSIDIARIES, OR WHICH MAY AFFECT THE VALIDITY, USE OR ENFORCEABILITY
OF SUCH COMPANY INTELLECTUAL PROPERTY.

 

(D)                                 REGISTRATION.  ALL NECESSARY REGISTRATION,
MAINTENANCE AND RENEWAL FEES CURRENTLY DUE IN CONNECTION WITH COMPANY REGISTERED
INTELLECTUAL PROPERTY HAVE BEEN MADE AND ALL NECESSARY DOCUMENTS, RECORDATIONS
AND CERTIFICATES IN CONNECTION WITH SUCH COMPANY REGISTERED INTELLECTUAL
PROPERTY HAVE BEEN FILED WITH THE RELEVANT GOVERNMENTAL AUTHORITIES IN THE
UNITED STATES OR THOSE FOREIGN JURISDICTIONS IN WHICH APPLICATIONS FOR COMPANY
REGISTERED INTELLECTUAL PROPERTY HAVE BEEN FILED, AS THE CASE MAY BE, FOR THE
PURPOSES OF PROSECUTING, MAINTAINING OR PERFECTING SUCH COMPANY REGISTERED
INTELLECTUAL PROPERTY, EXCEPT WHERE SUCH FAILURES WOULD NOT, INDIVIDUALLY OR IN
THE AGGREGATE, BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY.

 

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(E)                                  OWNERSHIP OF INTELLECTUAL PROPERTY; ABSENCE
OF LIENS. THE COMPANY OR ITS SUBSIDIARIES OWNS ALL RIGHT, TITLE AND INTEREST IN
AND TO EACH MATERIAL ITEM OF COMPANY INTELLECTUAL PROPERTY (EXCLUDING COMPANY
INTELLECTUAL PROPERTY USED PURSUANT TO AN EXCLUSIVE LICENSE) FREE AND CLEAR OF
ANY LIENS (EXCLUDING NON-EXCLUSIVE LICENSES AND RELATED RESTRICTIONS GRANTED IN
THE ORDINARY COURSE OF BUSINESS); PROVIDED, HOWEVER, THAT FOR PURPOSES OF THIS
SECTION 2.7(E), THE TERM “COMPANY INTELLECTUAL PROPERTY” SHALL NOT INCLUDE TRADE
SECRETS.

 

(F)                                    LICENSES.  OTHER THAN “SHRINK WRAP” AND
SIMILAR WIDELY AVAILABLE COMMERCIAL “OFF THE SHELF” END-USER LICENSES, TO THE
KNOWLEDGE OF SELLER, SECTION 2.7(F) OF THE SELLER DISCLOSURE LETTER SETS FORTH A
LIST AS OF THE DATE HEREOF OF ALL AGREEMENTS, CONTRACTS, SUBCONTRACTS,
SETTLEMENT AGREEMENTS, LEASES, INSTRUMENTS, NOTES, WARRANTIES, PURCHASE ORDERS,
LICENSES, SUBLICENSES OR OTHER LEGALLY BINDING COMMITMENT (EACH, A “CONTRACT”)
(INCLUDING ANY CONTRACTS WHEREBY COMPANY INTELLECTUAL PROPERTY IS TIED, BUNDLED
OR CO-BRANDED WITH ANY THIRD-PARTY INTELLECTUAL PROPERTY) THAT ARE MATERIAL AND
TO WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY PERTAINING TO ANY
COMPANY INTELLECTUAL PROPERTY OR THIRD-PARTY INTELLECTUAL PROPERTY.

 

(G)                                 NO CONFLICT.  ALL MATERIAL CONTRACTS
RELATING TO ANY OF (I) COMPANY INTELLECTUAL PROPERTY, (II) INTELLECTUAL PROPERTY
OF A THIRD PARTY LICENSED TO THE COMPANY OR ANY OF ITS SUBSIDIARIES (OTHER THAN
COMMERCIAL OFF-THE-SHELF LICENSES), OR (III) INTELLECTUAL PROPERTY LICENSED BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES TO A THIRD PARTY ARE IN FULL FORCE AND
EFFECT. THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL
NEITHER VIOLATE NOR RESULT IN THE MATERIAL BREACH, OR MODIFICATION, OF, OR THE
CANCELLATION, TERMINATION, SUSPENSION OF, OR ACCELERATION OF ANY PAYMENTS WITH
RESPECT TO, SUCH MATERIAL CONTRACTS. EACH OF THE COMPANY AND ITS SUBSIDIARIES IS
IN COMPLIANCE WITH, AND HAS NOT BREACHED ANY TERM OF ANY SUCH MATERIAL CONTRACTS
AND, TO THE KNOWLEDGE OF SELLER, ALL OTHER PARTIES TO SUCH MATERIAL CONTRACTS
ARE IN COMPLIANCE WITH, AND HAVE NOT BREACHED ANY TERM OF, SUCH MATERIAL
CONTRACTS. FOLLOWING THE CLOSING DATE, THE COMPANY WILL BE PERMITTED TO EXERCISE
ALL OF THE COMPANY’S AND ITS SUBSIDIARIES’ RIGHTS UNDER SUCH CONTRACTS TO THE
SAME EXTENT THE COMPANY AND ITS SUBSIDIARIES WOULD HAVE BEEN ABLE TO HAD THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT NOT OCCURRED AND WITHOUT THE PAYMENT
OF ANY ADDITIONAL AMOUNTS OR CONSIDERATION OTHER THAN ONGOING FEES, ROYALTIES OR
PAYMENTS WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES WOULD OTHERWISE BE
REQUIRED TO PAY.

 

(H)                                 NO INFRINGEMENT.  TO THE KNOWLEDGE OF
SELLER, THE OPERATION OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, AS
SUCH BUSINESS CURRENTLY IS CONDUCTED, DOES NOT INFRINGE OR MISAPPROPRIATE THE
INTELLECTUAL PROPERTY OF ANY THIRD PARTY.

 

(I)                                     NO NOTICE OF INFRINGEMENT.  NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED WRITTEN NOTICE FROM ANY THIRD
PARTY THAT THE OPERATION OF THE BUSINESS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR ANY ACT, PRODUCT OR SERVICE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, INFRINGES, VIOLATES OR MISAPPROPRIATES THE INTELLECTUAL PROPERTY
OF ANY THIRD PARTY.

 

(J)                                     NO THIRD PARTY INFRINGEMENT.  TO THE
KNOWLEDGE OF SELLER, NO PERSON IS INFRINGING OR MISAPPROPRIATING ANY COMPANY
INTELLECTUAL PROPERTY.

 

(K)                                  PROTECTION OF INTELLECTUAL PROPERTY.  TO
THE KNOWLEDGE OF SELLER (I) NONE OF THE COMPANY’S TRADE SECRETS HAVE BEEN USED,
DISCLOSED OR APPROPRIATED TO THE DETRIMENT OF THE

 

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COMPANY OR ANY SUBSIDIARY FOR THE BENEFIT OF ANY PERSON OTHER THAN THE COMPANY
OR SUCH SUBSIDIARY AND (II) NO EMPLOYEE, INDEPENDENT CONTRACTOR OR AGENT OF THE
COMPANY OR ANY SUBSIDIARY HAS MISAPPROPRIATED ANY TRADE SECRETS OR OTHER
CONFIDENTIAL INFORMATION OF ANY OTHER PERSON IN THE COURSE OF THE PERFORMANCE OF
HIS OR HER DUTIES AS AN EMPLOYEE, INDEPENDENT CONTRACTOR OR AGENT OF THE COMPANY
OR ANY SUBSIDIARY.  THE COMPANY AND ITS SUBSIDIARIES HAVE TAKEN COMMERCIALLY
REASONABLE STEPS TO PROTECT AND MAINTAIN THE CONFIDENTIALITY OF ALL TRADE
SECRETS OWNED BY THE COMPANY AND ITS SUBSIDIARIES.

 

(L)                                     SOURCE CODE.  NONE OF THE PERSONS LISTED
ON SECTION 2.7(L) OF THE SELLER DISCLOSURE LETTER HAS POSSESSION OR THE RIGHT TO
RECEIVE ACCESS OR POSSESSION OF THE SOURCE CODE FOR ANY MATERIAL COMPANY
INTELLECTUAL PROPERTY.

 

2.8                                 COMPLIANCE; PERMITS.

 

(A)                                  COMPLIANCE.  NEITHER THE COMPANY NOR ANY OF
ITS SUBSIDIARIES IS, OR HAS BEEN SINCE JANUARY 31, 2004, IN CONFLICT WITH, OR IN
DEFAULT OR IN VIOLATION OF, ANY LEGAL REQUIREMENT APPLICABLE TO THE COMPANY OR
ANY OF ITS SUBSIDIARIES OR BY WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES OR
ANY OF THEIR RESPECTIVE BUSINESSES OR PROPERTIES IS BOUND, EXCEPT FOR THOSE
CONFLICTS, DEFAULTS OR VIOLATIONS THAT, INDIVIDUALLY OR IN THE AGGREGATE, WOULD
NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY.  TO
THE KNOWLEDGE OF SELLER, NO INVESTIGATION OR REVIEW BY ANY GOVERNMENTAL ENTITY
IS PENDING OR HAS BEEN THREATENED AGAINST THE COMPANY OR ANY OF ITS
SUBSIDIARIES.  THERE IS NO JUDGMENT, INJUNCTION, ORDER OR DECREE BINDING UPON
THE COMPANY OR ANY OF ITS SUBSIDIARIES THAT WOULD BE REASONABLY EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT ON THE COMPANY.

 

(B)                                 PERMITS.  THE COMPANY AND ITS SUBSIDIARIES
HOLD, TO THE EXTENT LEGALLY REQUIRED, ALL PERMITS, REGISTRATIONS, LICENSES,
VARIANCES, CLEARANCES, CONSENTS, COMMISSIONS, FRANCHISES, EXEMPTIONS, ORDERS AND
APPROVALS FROM GOVERNMENTAL ENTITIES (“PERMITS”) EXCEPT WHERE THE FAILURE TO
HOLD SUCH PERMITS WOULD NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT ON THE COMPANY (COLLECTIVELY, “COMPANY PERMITS”). NO SUSPENSION OR
CANCELLATION OF ANY OF THE COMPANY PERMITS IS PENDING OR, TO THE KNOWLEDGE OF
SELLER, THREATENED BY ANY GOVERNMENTAL ENTITY.  THE COMPANY AND ITS SUBSIDIARIES
ARE IN COMPLIANCE WITH THE TERMS OF THE COMPANY PERMITS, EXCEPT WHERE THE
FAILURE TO SO COMPLY WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, BE REASONABLY
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY.

 

2.9                                 LITIGATION.

 

There are no claims, suits, actions or proceedings (a “Legal Proceeding”)
pending or, to the Knowledge of Seller, threatened against the Seller, the
Company or any of its Subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority or any arbitrator that seek to
restrain or enjoin the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Agreements or would reasonably be expected,
either individually or in the aggregate with all such claims, actions or
proceedings, to have a Material Adverse Effect on the Company.  Section 2.9 of
the Seller Disclosure Letter sets forth each Legal Proceeding pending before any
court, governmental department, commission, agency,

 

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instrumentality or authority or any arbitrator instituted by or on behalf of the
Company or any Subsidiary against any Person.

 

2.10                           Employee Benefit Plans.

 

(A)                                  SCHEDULE.  SECTION 2.10(A) OF THE SELLER
DISCLOSURE LETTER SETS FORTH A LIST AS OF THE CLOSE OF BUSINESS ON THE DATE
HEREOF OF THE FOLLOWING (I) ALL SEVERANCE AND EMPLOYMENT AGREEMENTS OF THE
COMPANY WITH DIRECTORS OR EXECUTIVE OFFICERS, (II) ALL SEVERANCE PROGRAMS AND
POLICIES OF EACH OF THE COMPANY OR ITS SUBSIDIARIES, (III) ALL PLANS OR
AGREEMENTS OF THE COMPANY OR ITS SUBSIDIARIES RELATING TO ANY OF THEIR
RESPECTIVE CURRENT OR FORMER EMPLOYEES, CONSULTANTS OR DIRECTORS (EACH, AN
“EMPLOYEE”) PURSUANT TO WHICH BENEFITS WOULD VEST OR AN AMOUNT WOULD BECOME
PAYABLE OR THE TERMS OF WHICH WOULD OTHERWISE BE MATERIALLY ALTERED, IN ANY CASE
BY VIRTUE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR BY THE
TERMINATION OF EMPLOYMENT OR ENGAGEMENT OR CHANGE IN POSITION OF ANY EMPLOYEE
FOLLOWING OR IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, (IV) ALL BENEFIT PLANS, AND (V) ALL PENSION
PLANS.

 

(B)                                 BENEFIT PLAN COMPLIANCE.

 

(I)                           FOR PURPOSES OF THIS SECTION 2.10, (I) “BENEFIT
PLANS” SHALL MEAN ALL “EMPLOYEE BENEFIT PLANS” AS DEFIED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), AND ALL
OTHER MATERIAL EMPLOYEE BENEFIT ARRANGEMENTS, PROGRAMS, POLICIES OR PAYROLL
PRACTICES (OTHER THAN STOCK PURCHASE, STOCK OPTION, PHANTOM STOCK OR OTHER
EQUITY BASED COMPENSATION PLANS), INCLUDING, WITHOUT LIMITATION, SEVERANCE PAY,
SICK LEAVE, VACATION PAY, SALARY CONTINUATION FOR DISABILITY, RETIREMENT,
DEFERRED COMPENSATION, BONUS, HOSPITALIZATION, MEDICAL INSURANCE, CAFETERIA,
LIFE INSURANCE, TUITION REIMBURSEMENT AND SCHOLARSHIP PROGRAMS MAINTAINED BY THE
SELLER, THE COMPANY OR ANY SUBSIDIARY AND TO WHICH CONTRIBUTIONS ARE MADE BY THE
SELLER, THE COMPANY OR ANY SUBSIDIARY ON BEHALF OF THE EMPLOYEES, AND (II)
“PENSION PLANS” SHALL MEAN ALL “EMPLOYEE PENSION PLANS”, AS DEFINED IN
SECTION 3(2) OF ERISA, MAINTAINED BY THE SELLER, THE COMPANY, THE SUBSIDIARIES
OR ANY TRADE OR BUSINESS (WHETHER OR NOT INCORPORATED) WHICH IS OR HAS EVER BEEN
UNDER CONTROL OR TREATED AS A SINGLE EMPLOYER WITH THE SELLER OR THE COMPANY
UNDER SECTION 414(B), (C), (M) OR (O) OF THE CODE (“ERISA AFFILIATE”) OR TO
WHICH THE SELLER, THE COMPANY OR ANY ERISA AFFILIATE HAS CONTRIBUTED.

 

(II)                        EACH BENEFIT PLAN HAS BEEN ADMINISTERED, MAINTAINED
AND OPERATED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH ITS TERMS AND
APPLICABLE LAWS (INCLUDING ERISA AND THE CODE, AND ANY RULES AND REGULATIONS
PROMULGATED THEREUNDER).

 

(III)                     NONE OF THE BENEFIT PLANS OR PENSION PLANS IS SUBJECT
TO TITLE IV OF ERISA AND NONE OF THE COMPANY, ITS SUBSIDIARIES OR ANY ERISA
AFFILIATE HAS ANY LIABILITY WITH RESPECT TO ANY PLAN SUBJECT TO TITLE IV OF
ERISA.

 

(IV)                    WITH RESPECT TO EACH BENEFIT PLAN THAT IS INTENDED TO
QUALIFY UNDER CODE SECTION 401(A), SUCH BENEFIT PLAN, AND ITS RELATED TRUST, HAS
RECEIVED, HAS AN APPLICATION PENDING OR REMAINS WITHIN THE REMEDIAL AMENDMENT
PERIOD FOR OBTAINING, A DETERMINATION LETTER FROM THE UNITED STATES INTERNAL
REVENUE SERVICE (“IRS”) THAT IT IS SO QUALIFIED AND THAT ITS TRUST IS

 

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EXEMPT FROM TAX UNDER SECTION 501(A) OF THE CODE AND, TO THE SELLER’S KNOWLEDGE,
NO FACTS OR SET OF CIRCUMSTANCES EXIST THAT COULD REASONABLY BE EXPECTED TO
CAUSE SUCH PLAN AND RELATED TRUST TO BE DISQUALIFIED OR TO BE SO NON-EXEMPT FROM
TAX.

 

(V)                       THERE HAS BEEN NO VIOLATION OF ERISA OR THE CODE WITH
RESPECT TO THE FILING OF APPLICABLE DOCUMENTS, NOTICES OR REPORTS (INCLUDING,
BUT NOT LIMITED TO, ANNUAL REPORTS FILED ON IRS FORM 5500) REGARDING THE BENEFIT
PLANS WITH THE DEPARTMENT OF LABOR AND THE IRS, OR THE FURNISHING OF SUCH
REQUIRED DOCUMENTS TO THE PARTICIPANTS OR THE BENEFICIARIES OF THE BENEFIT PLANS
THAT WOULD RESULT IN A MATERIAL LIABILITY TO THE COMPANY OR ANY SUBSIDIARY.

 

(VI)                    THERE ARE NO PENDING MATERIAL ACTIONS, CLAIMS OR
LAWSUITS WHICH HAVE BEEN ASSERTED, INSTITUTED OR, TO THE KNOWLEDGE OF SELLER,
THREATENED, AGAINST THE BENEFIT PLANS, THE ASSETS OF ANY OF THE TRUSTS UNDER THE
BENEFIT PLANS OR THE SPONSOR OR THE ADMINISTRATOR OF THE BENEFIT PLANS, OR, TO
THE SELLER’S KNOWLEDGE, AGAINST ANY FIDUCIARY OF THE BENEFIT PLANS WITH RESPECT
TO THE OPERATION OF THE BENEFIT PLANS (OTHER THAN ROUTINE BENEFIT CLAIMS).

 

(VII)                 EXCEPT AS MAY BE REQUIRED UNDER 4980B OF THE CODE OR
SECTION 601 OF ERISA, NO BENEFIT PLAN PROVIDES RETIREE HEALTH OR LIFE INSURANCE
BENEFITS.  THE COMPANY AND ITS SUBSIDIARIES HAVE RESERVED THE RIGHT TO AMEND,
TERMINATE OR MODIFY AT ANY TIME ALL BENEFIT PLANS PROVIDING FOR RETIREE HEALTH
OR LIFE INSURANCE BENEFITS, AND THERE HAVE BEEN NO WRITTEN COMMUNICATIONS TO
EMPLOYEES THAT COULD REASONABLY BE INTERPRETED TO PROMISE OR GUARANTEE SUCH
EMPLOYEES RETIREE HEALTH OR LIFE INSURANCE OR OTHER RETIREE DEATH BENEFITS ON A
PERMANENT BASIS.

 

(C)                                  MULTIEMPLOYER PLANS.  NONE OF THE BENEFIT
PLANS OR PENSION PLANS IS A “MULTIEMPLOYER PLAN,” AS DEFINED IN SECTION 3(37) OF
ERISA (“MULTIEMPLOYER PLAN”).  NONE OF THE COMPANY, ITS SUBSIDIARIES OR ANY
ERISA AFFILIATE HAS INCURRED ANY LIABILITY DUE TO A COMPLETE OR PARTIAL
WITHDRAWAL FROM A MULTIEMPLOYER PLAN OR DUE TO THE TERMINATION OR REORGANIZATION
OF A MULTIEMPLOYER PLAN, EXCEPT FOR ANY SUCH LIABILITY WHICH HAS BEEN SATISFIED
IN FULL, AND NO EVENTS HAVE OCCURRED AND NO CIRCUMSTANCES EXIST THAT COULD
REASONABLY BE EXPECTED TO RESULT IN ANY SUCH LIABILITY TO THE COMPANY, ITS
SUBSIDIARIES OR ANY ERISA AFFILIATE.

 

(D)                                 LABOR.  NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES IS A PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT OR UNION CONTRACT
WITH RESPECT TO EMPLOYEES AND NO COLLECTIVE BARGAINING AGREEMENT IS BEING
NEGOTIATED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES.  THERE IS NO LABOR
DISPUTE, STRIKE OR WORK STOPPAGE AGAINST THE COMPANY OR ANY OF ITS SUBSIDIARIES
PENDING OR, TO THE KNOWLEDGE OF SELLER, THREATENED OR REASONABLY ANTICIPATED
WHICH MAY MATERIALLY INTERFERE WITH THE RESPECTIVE BUSINESS ACTIVITIES OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES.  THERE ARE NO ACTIONS, SUITS, CLAIMS, LABOR
DISPUTES OR GRIEVANCES PENDING, OR, TO THE KNOWLEDGE OF THE SELLER, THREATENED
RELATING TO ANY LABOR, SAFETY OR DISCRIMINATION MATTERS INVOLVING ANY EMPLOYEE,
INCLUDING, WITHOUT LIMITATION, CHARGES OF UNFAIR LABOR PRACTICES OR
DISCRIMINATION COMPLAINTS, WHICH, IF ADVERSELY DETERMINED, WOULD, INDIVIDUALLY
OR IN THE AGGREGATE, BE MATERIAL TO THE COMPANY.

 

(E)                                  EMPLOYMENT MATTERS.  THE COMPANY AND EACH
OF ITS SUBSIDIARIES IS IN COMPLIANCE WITH ALL APPLICABLE FOREIGN, FEDERAL, STATE
AND LOCAL LAWS, RULES AND REGULATIONS RESPECTING EMPLOYMENT, EMPLOYMENT
PRACTICES, TERMS AND CONDITIONS OF EMPLOYMENT, EMPLOYEE

 

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SAFETY AND WAGES AND HOURS, EXCEPT WHERE NON-COMPLIANCE WOULD NOT BE REASONABLY
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY.

 

2.11                           Title to Properties.

 

(A)                                  OWNED REAL PROPERTY.  SCHEDULE 2.11(A)
CONTAINS A TRUE AND COMPLETE DESCRIPTION OF ALL REAL PROPERTY OWNED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES (THE “OWNED REAL PROPERTY”).  WITH RESPECT TO
EACH SUCH PARCEL OF OWNED REAL PROPERTY, EXCEPT AS OTHERWISE DISCLOSED ON
SECTIONS 2.11(A) AND 2.11(B) OF THE SELLER DISCLOSURE LETTER, (I) THERE ARE NO
LEASES, SUBLEASES, OPTIONS OR OTHER AGREEMENTS, WRITTEN OR ORAL, GRANTING TO ANY
PARTY OR PARTIES THE RIGHT TO OBTAIN TITLE OF SUCH PARCEL OR ANY PORTION THERETO
(EXCEPT FOR WHICH PUBLIC NOTICE HAS BEEN PROVIDED OR HAS BEEN DISCLOSED IN A
SURVEY) AND (II) TO THE SELLER’S KNOWLEDGE, THERE ARE NO PARTIES (OTHER THAN THE
COMPANY AND/OR ANY OF ITS SUBSIDIARIES AND/OR THEIR CONTRACTORS, SUBCONTRACTORS,
AGENTS, SUBLESSEES, LICENSEES, CUSTOMERS AND INVITEES) WHO HAVE LEASES,
SUBLEASES, OPTIONS OR OTHER AGREEMENTS, WRITTEN OR ORAL, GRANTING TO ANY PARTY
OR PARTIES THE RIGHT OF USE OR OCCUPANCY AND/OR WHO ARE IN POSSESSION OF OR WHO
ARE USING ANY SUCH PARCEL.  TO THE SELLER’S KNOWLEDGE, ALL IMPROVEMENTS ON THE
OWNED REAL PROPERTY CONFORM IN ALL MATERIAL RESPECTS WITH APPLICABLE LAWS AND
ORDINANCES, AND NEITHER THE SELLER NOR ANY OF ITS AFFILIATES HAS RECEIVED ANY
WRITTEN NOTICE OF ANY VIOLATION OF ANY SUCH LAWS OR ORDINANCES.  TO SELLER’S
KNOWLEDGE, ALL IMPROVEMENTS ON THE OWNED REAL PROPERTY ARE IN REASONABLE
CONDITION AND REPAIR AND HAVE NOT SUFFERED ANY CASUALTY OR OTHER MATERIAL DAMAGE
THAT HAS NOT BEEN REPAIRED IN ALL MATERIAL RESPECTS, EXCEPT FOR ONGOING AND
ROUTINE MAINTENANCE AND REPAIR REQUIREMENTS.  TO THE SELLER’S KNOWLEDGE, THERE
IS NO MATERIAL LATENT OR PATENT STRUCTURAL, MECHANICAL OR OTHER SIGNIFICANT
DEFECT, SOIL CONDITION OR DEFICIENCY IN THE IMPROVEMENTS LOCATED ON THE OWNED
REAL PROPERTY.

 

(B)                                 LEASED REAL PROPERTY.  SECTION 2.11(B) OF
THE SELLER DISCLOSURE LETTER SETS FORTH A LIST AS OF THE CLOSE OF BUSINESS ON
THE DATE HEREOF OF ALL REAL PROPERTY CURRENTLY LEASED OR SUBLEASED TO OR BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES.  ALL SUCH CURRENT LEASES AND SUBLEASES ARE
VALID, BINDING, ENFORCEABLE AND IN FULL FORCE AND EFFECT, AND THERE IS NOT,
UNDER ANY OF SUCH LEASES OR SUBLEASES, ANY EXISTING MATERIAL DEFAULT OR, TO THE
SELLER’S KNOWLEDGE, ANY EVENT WHICH WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A MATERIAL DEFAULT.  THE SELLER HAS MADE AVAILABLE TO THE PURCHASER
COMPLETE AND ACCURATE COPIES OF SUCH LEASES AND SUBLEASES, EACH AS AMENDED TO
DATE.

 

(C)                                  VALID TITLE.  THE COMPANY AND EACH OF ITS
SUBSIDIARIES HAS GOOD AND VALID TITLE TO, OR, IN THE CASE OF LEASED PROPERTIES
AND ASSETS, VALID LEASEHOLD INTERESTS IN, ALL OF ITS TANGIBLE PROPERTIES AND
ASSETS, REAL, PERSONAL AND MIXED, USED OR HELD FOR USE IN ITS BUSINESS, FREE AND
CLEAR OF ANY LIENS, EXCEPT (I) LIENS IMPOSED BY LAW IN RESPECT OF OBLIGATIONS
NOT YET DUE WHICH ARE OWED IN RESPECT OF TAXES, (II) MECHANIC’S AND MATERIAL
MAN’S LIENS INCURRED IN THE ORDINARY COURSE OF BUSINESS, AND (III) LIENS WHICH
ARE NOT MATERIAL IN CHARACTER, AMOUNT OR EXTENT, AND WHICH DO NOT MATERIALLY
DETRACT FROM THE VALUE, OR MATERIALLY INTERFERE WITH THE PRESENT USE, OF THE
PROPERTY SUBJECT THERETO OR AFFECTED THEREBY.

 

(D)                                 SUFFICIENCY OF ASSETS.  THE PROPERTIES AND
ASSETS NOW OWNED, LICENSED OR LEASED BY THE COMPANY AND ITS SUBSIDIARIES ARE
SUFFICIENT TO CARRY ON THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES AS
PRESENTLY CONDUCTED.

 

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2.12                           ENVIRONMENTAL MATTERS.

 

(A)                                  ENVIRONMENTAL LAWS.  EXCEPT AS WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY, (I) NEITHER THE COMPANY NOR ITS SUBSIDIARIES IS
SUBJECT TO ANY ACTION, CLAIM, SUIT, PROCEEDING, OR INVESTIGATION ALLEGING THE
VIOLATION OF, OR LIABILITY UNDER, ANY LAW (INCLUDING COMMON LAW), STATUTE,
ORDINANCE, REGULATION, ORDER OR SIMILAR REQUIREMENT OF ANY GOVERNMENTAL ENTITY
OR OTHER REQUIREMENT OF LAW REGULATING, RELATING TO OR IMPOSING LIABILITY OR
STANDARDS OF CONDUCT CONCERNING PROTECTION OF HUMAN HEALTH OR THE ENVIRONMENT,
INCLUDING ANY OF THE FOREGOING TO THE EXTENT SUCH MATTERS ARE ADDRESSED IN ANY
PRODUCT SAFETY OR WORKER HEALTH OR SAFETY LAWS INCLUDING THE OCCUPATIONAL SAFETY
AND HEALTH ACT OF 1970 AND ANY SIMILAR STATE OR LOCAL LAWS, RULES OR REGULATIONS
(“ENVIRONMENTAL LAW”), (II) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS A
PARTY TO ANY AGREEMENT CONCERNING, NOR HAVE SUCH ENTITIES RECEIVED ANY NOTICE,
DEMAND, REQUEST FOR INFORMATION, SUMMONS OR ORDER FROM ANY PERSON RELATING TO,
ACTUAL OR POTENTIAL LIABILITY UNDER ANY ENVIRONMENTAL LAW OR THE PRESENCE OR
RELEASE OF ANY HAZARDOUS MATERIALS, AND (III) NO UNDERGROUND STORAGE TANKS AND
NO AMOUNT OF ANY SUBSTANCE THAT HAS BEEN DESIGNATED BY ANY GOVERNMENTAL ENTITY
OR BY APPLICABLE FEDERAL, STATE OR LOCAL LAW OR REGULATION TO BE RADIOACTIVE,
TOXIC, HAZARDOUS OR OTHERWISE A DANGER TO HEALTH OR THE ENVIRONMENT OR THAT
COULD REASONABLY BE EXPECTED TO RESULT IN LIABILITY TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES UNDER ANY APPLICABLE ENVIRONMENTAL LAW, INCLUDING PCBS, ASBESTOS,
PETROLEUM, TOXIC MOLD, UREA-FORMALDEHYDE AND ALL SUBSTANCES LISTED AS HAZARDOUS
SUBSTANCES PURSUANT TO THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION,
AND LIABILITY ACT OF 1980, AS AMENDED, OR DEFINED AS A HAZARDOUS WASTE PURSUANT
TO THE UNITED STATES RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, AS AMENDED,
AND THE REGULATIONS PROMULGATED PURSUANT TO SAID LAWS, BUT EXCLUDING OFFICE AND
JANITORIAL SUPPLIES (“HAZARDOUS MATERIALS”), ARE PRESENT AS A RESULT OF THE
ACTIONS OR OMISSIONS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OR ANY AFFILIATE
OF THE COMPANY, OR, TO THE KNOWLEDGE OF THE SELLER, ANY OTHER PERSON, IN, ON OR
UNDER ANY REAL PROPERTY CURRENTLY OR PREVIOUSLY OWNED, LEASED OR OPERATED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES (INCLUDING THE PROPERTY THAT IS LEASED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES AS OF THE CLOSE OF BUSINESS ON THE DATE
HEREOF), INCLUDING THE LAND AND THE IMPROVEMENTS, GROUND WATER AND SURFACE WATER
THEREOF, IN VIOLATION OF ANY ENVIRONMENTAL LAW.

 

(B)                                 HAZARDOUS MATERIALS ACTIVITIES.  EXCEPT AS
WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON THE COMPANY, NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES HAS TRANSPORTED, STORED, USED, MANUFACTURED, DISPOSED OF OR
ARRANGED FOR THE DISPOSAL OF, RELEASED, REMOVED OR EXPOSED ITS EMPLOYEES OR
OTHERS TO HAZARDOUS MATERIALS OR MANUFACTURED ANY PRODUCT CONTAINING ANY
HAZARDOUS MATERIAL IN VIOLATION OF ANY ENVIRONMENTAL LAW.

 

(C)                                  ENVIRONMENTAL REPORTS.  SELLER HAS MADE
AVAILABLE TO PURCHASER COPIES OF ALL STUDIES, AUDITS, ASSESSMENTS OR
INVESTIGATIONS CONCERNING COMPLIANCE WITH, OR LIABILITY OR OBLIGATIONS UNDER,
ENVIRONMENTAL LAWS AFFECTING THE COMPANY OR ANY OF ITS SUBSIDIARIES WITH RESPECT
TO REAL PROPERTY CURRENTLY OWNED OR LEASED BY THE COMPANY OR ITS SUBSIDIARIES
AND THAT ARE IN THE POSSESSION OR CONTROL OF SELLER OR THE COMPANY.

 

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2.13                           Contracts.

 

(A)                                  MATERIAL CONTRACTS.  FOR PURPOSES OF THIS
AGREEMENT, “COMPANY MATERIAL CONTRACT” SHALL MEAN:

 

(I)                           ANY EMPLOYMENT OR CONSULTING CONTRACT WITH ANY
EXECUTIVE OFFICER OR OTHER EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY, INVOLVING
AN ANNUAL SALARY IN EXCESS OF ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000);

 

(II)                        ANY CONTRACT (A) CONTAINING ANY COVENANT LIMITING IN
ANY MATERIAL RESPECT THE RIGHT OF THE COMPANY OR ANY OF ITS SUBSIDIARIES TO
ENGAGE IN ANY LINE OF BUSINESS OR OPERATE IN ANY JURISDICTION AFTER THE CLOSING
DATE, OR COMPETE WITH ANY PERSON IN ANY LINE OF BUSINESS OR IN ANY JURISDICTION
AFTER THE CLOSING DATE OR (B) GRANTING EXCLUSIVE SALES, MARKETING OR LICENSING
RIGHTS IN ANY TERRITORY OR REGION OR “MOST FAVORED NATIONS” OR SIMILAR FORM OF
PRICING PROTECTIONS;

 

(III)                     ANY CONTRACT RELATING TO THE DISPOSITION OR
ACQUISITION BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF A MATERIAL AMOUNT OF
ASSETS NOT IN THE ORDINARY COURSE OF BUSINESS OR PURSUANT TO WHICH THE COMPANY
OR ANY OF ITS SUBSIDIARIES HAS OR HAD ANY OWNERSHIP INTEREST IN ANY OTHER PERSON
OR OTHER BUSINESS ENTERPRISE OTHER THAN ITS SUBSIDIARIES (A) DATED AFTER
JANUARY 31, 2004 OR (B) THAT CONTAINS CURRENTLY EFFECTIVE INDEMNIFICATION OR
PURCHASE PRICE ADJUSTMENT, HOLDBACK OR ESCROW OBLIGATIONS;

 

(IV)                    ANY DEALER, DISTRIBUTOR, JOINT MARKETING OR DEVELOPMENT
AGREEMENT UNDER WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES HAVE CONTINUING
MATERIAL OBLIGATIONS TO JOINTLY MARKET ANY PRODUCT, TECHNOLOGY OR SERVICE AND
WHICH MAY NOT BE CANCELED BY THE COMPANY OR ITS SUBSIDIARIES WITHOUT MATERIAL
PENALTY, PAYMENT OR CONTINUING OBLIGATION UPON NOTICE OF NINETY (90) DAYS OR
LESS;

 

(V)                       ANY CONTRACT CONTAINING ANY SUPPORT, MAINTENANCE OR
SERVICE OBLIGATION ON THE PART OF THE COMPANY OR ANY OF ITS SUBSIDIARIES,
INCLUDING, WITHOUT LIMITATION, ANY CONTRACT WITH ANY REGIONAL BELL OPERATING
COMPANY OR GOVERNMENTAL ENTITY, THAT IS EXPECTED TO INVOLVE ANNUAL REVENUES TO
THE COMPANY OR ANY SUBSIDIARY IN EXCESS OF SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000);

 

(VI)                    ANY MORTGAGES, INDENTURES, GUARANTEES, LOANS OR CREDIT
AGREEMENTS, SECURITY AGREEMENTS OR OTHER CONTRACTS RELATING TO THE BORROWING OF
MONEY OR EXTENSION OF CREDIT IN A PRINCIPAL AMOUNT IN EXCESS OF ONE MILLION
DOLLARS ($1,000,000) THAT IS OUTSTANDING OR MAY BE INCURRED ON THE TERMS
THEREOF, OTHER THAN ACCOUNTS RECEIVABLE AND PAYABLE IN THE ORDINARY COURSE OF
BUSINESS;

 

(VII)                 ANY CONTRACT THAT RELATES TO PARTNERSHIP, JOINT VENTURE OR
SIMILAR ARRANGEMENT WITH ANY OTHER PERSON THAT, IN EACH CASE, INVOLVES AN
INVESTMENT BY THE COMPANY IN EXCESS OF ONE MILLION DOLLARS ($1,000,000);

 

(VIII)              ANY CONTRACT REQUIRED TO BE DISCLOSED ON SECTION 2.7(F) OF
THE SELLER DISCLOSURE LETTER; OR

 

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(IX)                      ANY OTHER AGREEMENT, CONTRACT OR COMMITMENT NOT
OTHERWISE DEFINED IN SUBSECTIONS (I) - (VIII) ABOVE THAT INVOLVES A PAYMENT TO
OR FROM THE COMPANY OR ANY SUBSIDIARY IN AN AMOUNT IN EXCESS OF ONE MILLION
DOLLARS ($1,000,000) OVER THE TERM OF SUCH CONTRACT (INCLUDING ALL POTENTIAL
EXTENSIONS THEREOF).

 

(B)                                 SCHEDULE.  SECTION 2.13(B) OF THE SELLER
DISCLOSURE LETTER SETS FORTH A LIST OF ALL COMPANY MATERIAL CONTRACTS TO WHICH
THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR IS BOUND BY AS OF THE CLOSE
OF BUSINESS ON THE DATE HEREOF.

 

(C)                                  NO BREACH.  ALL COMPANY MATERIAL CONTRACTS
ARE VALID AND IN FULL FORCE AND EFFECT, EXCEPT TO THE EXTENT THEY HAVE
PREVIOUSLY EXPIRED IN ACCORDANCE WITH THEIR TERMS.  TO THE KNOWLEDGE OF THE
SELLER, ALL COMPANY MATERIAL CONTRACTS ARE ENFORCEABLE AGAINST EACH OF THE OTHER
PARTIES THERETO.  NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED
WRITTEN NOTICE OR, TO THE KNOWLEDGE OF THE SELLER, ORAL NOTICE, ALLEGING (I) ANY
VIOLATION BY ANY PERSON THERETO OF ANY PROVISION OF A COMPANY MATERIAL CONTRACT
OR (II) ANY FAILURE TO PERFORM AN ACT WHICH, WITH OR WITHOUT NOTICE, LAPSE OF
TIME OR BOTH, WOULD CONSTITUTE A DEFAULT UNDER THE PROVISIONS OF ANY COMPANY
MATERIAL CONTRACT, AND NO EVENT HAS OCCURRED OR, TO THE KNOWLEDGE OF THE SELLER,
IS ALLEGED TO HAVE OCCURRED WHICH WITH OR WITHOUT NOTICE, LAPSE OF TIME OR BOTH,
EXCEPT IN EACH CASE FOR THOSE VIOLATIONS AND DEFAULTS WHICH, INDIVIDUALLY OR IN
THE AGGREGATE, WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT ON TO THE COMPANY.

 

2.14                           Insurance.  Section 2.14 of the Seller Disclosure
Letter lists all policies of liability, fire, casualty, business interruption,
workers’ compensation and other forms of insurance insuring the Company and its
Subsidiaries and their respective assets, properties and operations.  All such
policies are in full force and effect.  None of the Seller, the Company or any
Subsidiary has received written notice (A) of cancellation or adverse
modification of any such insurance, or (B) from any of their respective brokers
or carriers that such broker or carrier will not be willing or able to renew
their existing coverage.  None of Seller, the Company or any Subsidiary is in
material default under any provisions of any such policy of insurance.

 

2.15                           Transactions with Seller and Affiliates.  Neither
the Company nor any of its Subsidiaries is a party to any material agreements or
arrangements with the Seller or any Affiliate of the Seller (other than the
Company and its Subsidiaries), including, but not limited to, any material
agreement or arrangement under which the Company or any Subsidiary (i) leases
any real or personal property (either to or from such Person), (ii) licenses
technology (either to or from such Person), (iii) is obligated to purchase any
tangible or intangible asset from or sell such asset to such Person, (iv)
purchases or receives products or services from such Person, or (v) pays or
receives commissions, rebates or other payments.

 

2.16                           Brokers and Finders.  Except for J.P. Morgan
Securities Inc., none of Seller, the Company, or any of the Company’s
Subsidiaries has employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement and the
Ancillary Agreements who would be entitled to a broker’s, finder’s or similar
fee or commission in connection therewith or upon the consummation thereof that
would be payable by the Company or the Subsidiaries.  The Seller is solely
responsible for such fees and expenses of J.P. Morgan Securities Inc.

 

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2.17                           Seller Organization, Standing and Power; Charter
Documents

 

(A)                                  ORGANIZATION; STANDING AND POWER.  SELLER
(I) IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER
THE LAWS OF THE STATE OF DELAWARE AND (II) HAS THE REQUISITE POWER AND AUTHORITY
TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW
BEING CONDUCTED.

 

(B)                                 CHARTER DOCUMENTS.  SELLER HAS DELIVERED OR
MADE AVAILABLE TO PURCHASER A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION AND BYLAWS OF SELLER, EACH AS AMENDED TO DATE.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller as follows:

 

3.1                                 ORGANIZATION; STANDING AND POWER; CHARTER
DOCUMENTS.

 

(A)                                  ORGANIZATION; STANDING AND POWER. 
PURCHASER IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION, HAS THE
REQUISITE POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO
CARRY ON ITS BUSINESS AS NOW BEING CONDUCTED AND IS DULY QUALIFIED AND IN GOOD
STANDING TO DO BUSINESS IN EACH JURISDICTION IN WHICH THE NATURE OF ITS BUSINESS
OR THE OWNERSHIP OR LEASING OF ITS PROPERTIES MAKES SUCH QUALIFICATION
NECESSARY.

 

(B)                                 CHARTER DOCUMENTS.  PURCHASER HAS DELIVERED
OR MADE AVAILABLE TO SELLER A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION AND BYLAWS, OR LIKE ORGANIZATIONAL DOCUMENTS, OF PURCHASER, EACH
AS AMENDED TO DATE (COLLECTIVELY, THE “PURCHASER CHARTER DOCUMENTS”).  PURCHASER
IS NOT IN MATERIAL VIOLATION OF ANY OF THE PROVISIONS OF THE PURCHASER CHARTER
DOCUMENTS.

 

3.2                                 AUTHORITY; NON-CONTRAVENTION; NECESSARY
CONSENTS.

 

(A)                                  AUTHORITY.  PURCHASER HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS TO WHICH IT IS A PARTY AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT
AND THE ANCILLARY AGREEMENTS TO WHICH PURCHASER IS A PARTY, AND THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, HAVE BEEN DULY AUTHORIZED
BY ALL NECESSARY CORPORATE ACTION ON THE PART OF PURCHASER AND NO OTHER
CORPORATE PROCEEDINGS, APPROVALS OR CONSENTS ON THE PART OF PURCHASER OR ITS
STOCKHOLDERS ARE NECESSARY TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY OR TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THIS AGREEMENT HAS BEEN, AND
UPON EXECUTION AND DELIVERY, THE ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY
WILL BE, DULY EXECUTED AND DELIVERED BY PURCHASER, AND, ASSUMING DUE EXECUTION
AND DELIVERY BY SELLER, CONSTITUTES, AND, UPON EXECUTION AND DELIVERY THE
ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY WILL CONSTITUTE, VALID AND BINDING
OBLIGATIONS OF PURCHASER, ENFORCEABLE AGAINST PURCHASER IN ACCORDANCE WITH THEIR
TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE
BANKRUPTCY, INSOLVENCY,

 

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REORGANIZATION, MORATORIUM AND OTHER LAWS OF GENERAL APPLICATION AFFECTING
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND (II) GENERAL PRINCIPLES OF
EQUITY.

 

(B)                                 NON–CONTRAVENTION.  THE EXECUTION AND
DELIVERY BY PURCHASER OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS TO WHICH IT
IS A PARTY DOES NOT, AND PERFORMANCE OF THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS TO WHICH PURCHASER IS A PARTY WILL NOT (I) CONFLICT WITH OR VIOLATE
THE PURCHASER CHARTER DOCUMENTS, (II) SUBJECT TO COMPLIANCE WITH THE
REQUIREMENTS SET FORTH IN SECTION 3.2(C), CONFLICT WITH OR VIOLATE ANY MATERIAL
LEGAL REQUIREMENT APPLICABLE TO PURCHASER OR BY WHICH PURCHASER OR ANY OF ITS
PROPERTIES IS BOUND, OR (III) RESULT IN ANY MATERIAL BREACH OF OR CONSTITUTE A
MATERIAL DEFAULT (OR AN EVENT THAT WITH NOTICE OR LAPSE OF TIME OR BOTH WOULD
BECOME A MATERIAL DEFAULT) UNDER, OR MATERIALLY IMPAIR PURCHASER’S RIGHTS OR
ALTER THE RIGHTS OR OBLIGATIONS OF ANY THIRD PARTY UNDER, OR GIVE TO OTHERS ANY
RIGHTS OF TERMINATION, MATERIAL AMENDMENT, ACCELERATION OR CANCELLATION OF, OR
RESULT IN THE CREATION OF A MATERIAL LIEN ON ANY OF THE PROPERTIES OR ASSETS OF
PURCHASER OR ANY OF ITS SUBSIDIARIES PURSUANT TO, ANY CONTRACT TO WHICH
PURCHASER IS A PARTY THE TERMINATION OR BREACH OF WHICH WOULD BE REASONABLY
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF PURCHASER TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS TO WHICH IT IS A PARTY.

 

(C)                                  NECESSARY CONSENTS.  NO CONSENT, APPROVAL,
ORDER OR AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING WITH ANY
GOVERNMENTAL ENTITY IS REQUIRED TO BE OBTAINED OR MADE BY PURCHASER IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS TO WHICH IT IS A PARTY OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, EXCEPT FOR THE NECESSARY CONSENTS.

 

3.3                                 AVAILABILITY OF FUNDS.

 

(A)                                  PURCHASER HAS RECEIVED A COMMITMENT LETTER
DATED AS OF NOVEMBER 17, 2004 FROM JPMORGAN CHASE BANK, N.A., J.P. MORGAN
SECURITIES INC., BEAR STEARNS CORPORATE LENDING INC. AND BEAR, STEARNS & CO.
INC. PURSUANT TO WHICH SUCH PARTIES HAVE COMMITTED, SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH THEREIN, TO PROVIDE TO THE PURCHASER THE $640,000,000
SENIOR SECURED CREDIT FACILITIES AND $410,000,000 IN A SENIOR SUBORDINATED
BRIDGE FACILITY (THE “COMMITMENT LETTER”), TO COMPLETE THE TRANSACTION
CONTEMPLATED HEREBY (THE “DEBT FINANCING”).  A TRUE AND COMPLETE COPY OF THE
COMMITMENT LETTER HAS BEEN MADE AVAILABLE TO SELLER ON OR PRIOR TO THE DATE
HEREOF.

 

(B)                                 PURCHASER HAS RECEIVED AN EXECUTED EQUITY
FINANCING LETTER FROM ITS STOCKHOLDERS AS OF THE DATE HEREOF, PURSUANT TO WHICH
THE STOCKHOLDERS HAVE AGREED TO PROVIDE, IN THE AGGREGATE, ON THE TERMS SET
FORTH THEREIN, FOUR HUNDRED FORTY MILLION DOLLARS ($440,000,000) OF EQUITY
FINANCING TO PURCHASER.  A TRUE AND COMPLETE COPY OF SUCH LETTER HAS BEEN MADE
AVAILABLE TO SELLER ON OR PRIOR TO THE DATE HEREOF.

 

(C)                                  UPON SATISFACTION OF THE CONDITIONS SET
FORTH IN THE COMMITMENT LETTER, AT THE CLOSING DATE, THE PURCHASER WILL HAVE
SUFFICIENT FUNDS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  TO THE
KNOWLEDGE OF PURCHASER, NO EVENT OR CIRCUMSTANCES HAS OCCURRED OR EXISTS THAT
WOULD BE REASONABLY LIKELY TO CAUSE A CONDITION UNDER THE COMMITMENT LETTER TO
NOT BE SATISFIED PRIOR TO CLOSING.

 

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3.4                                 LITIGATION.

 

As of the close of business on the date hereof, there are no claims, suits,
actions or proceedings pending or, to the knowledge of Purchaser, threatened
against Purchaser or any of its subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that seeks to restrain or enjoin the consummation of the transactions
contemplated hereby.

 

3.5                                 BROKERS AND FINDERS.

 

The Purchaser has not employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement and the
Ancillary Agreements who would be entitled to a broker’s, finder’s or similar
fee or commission in connection therewith or upon the consummation thereof.

 

ARTICLE IV

INTERIM OPERATIONS OF THE COMPANY

 

4.1                                 CONDUCT OF BUSINESS BY THE COMPANY.

 

(A)                                  ORDINARY COURSE.  DURING THE PERIOD FROM
THE DATE HEREOF AND CONTINUING UNTIL THE EARLIER OF THE TERMINATION OF THIS
AGREEMENT PURSUANT TO ITS TERMS OR THE CLOSING DATE, SELLER SHALL CAUSE THE
COMPANY AND EACH OF ITS SUBSIDIARIES TO, EXCEPT AS OTHERWISE EXPRESSLY
CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR AS SET FORTH IN
SECTION 4.1 OF THE SELLER DISCLOSURE LETTER OR TO THE EXTENT THAT PURCHASER
SHALL OTHERWISE CONSENT IN WRITING (WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED), (I) CARRY ON ITS BUSINESS IN THE USUAL, REGULAR AND
ORDINARY COURSE, IN SUBSTANTIALLY THE SAME MANNER AS HERETOFORE CONDUCTED AND IN
COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS, (II) PAY ITS DEBTS AND
TAXES WHEN DUE, (III) PAY OR PERFORM OTHER MATERIAL OBLIGATIONS WHEN DUE, (IV)
USE COMMERCIALLY REASONABLE EFFORTS TO PRESERVE INTACT ITS PRESENT BUSINESS
ORGANIZATION, INCLUDING OPERATIONS, RELATIONSHIPS WITH LESSORS, LICENSORS,
SUPPLIERS, KEY EMPLOYEES AND CUSTOMERS, (V) CONTINUE TO MAKE CAPITAL
EXPENDITURES CONSISTENT WITH PAST PRACTICES AND SUBJECT TO THE BUDGET REFERENCED
IN SECTION 4.1(A) OF THE SELLER DISCLOSURE LETTER, AND (VI) ENTER INTO THE CROSS
LICENSE AGREEMENT IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT C.

 

(B)                                 REQUIRED CONSENT.  IN ADDITION, WITHOUT
LIMITING THE GENERALITY OF SECTION 4.1, EXCEPT AS PERMITTED OR CONTEMPLATED BY
THE TERMS OF THIS AGREEMENT, AND EXCEPT AS PROVIDED IN SECTION 4.1 OF THE SELLER
DISCLOSURE LETTER, WITHOUT THE PRIOR WRITTEN CONSENT OF PURCHASER (WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED), DURING THE PERIOD FROM THE DATE
HEREOF AND CONTINUING UNTIL THE EARLIER OF THE TERMINATION OF THIS AGREEMENT
PURSUANT TO ITS TERMS OR THE CLOSING DATE, SELLER SHALL NOT PERMIT THE COMPANY
OR ANY SUBSIDIARY TO DO ANY OF THE FOLLOWING:

 

(I)                           CAUSE, PERMIT, ADOPT OR PROPOSE ANY AMENDMENTS TO
THE COMPANY CHARTER DOCUMENTS OR ANY OF THE SUBSIDIARY CHARTER DOCUMENTS;

 

(II)                        ADOPT A PLAN OF COMPLETE OR PARTIAL LIQUIDATION OR
DISSOLUTION;

 

(III)                     DECLARE, SET ASIDE OR PAY ANY DIVIDENDS ON OR MAKE ANY
OTHER DISTRIBUTIONS (WHETHER IN CASH, STOCK, EQUITY SECURITIES OR PROPERTY) IN
RESPECT OF ANY CAPITAL STOCK

 

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OR EQUITY INTERESTS OR SPLIT, COMBINE OR RECLASSIFY ANY CAPITAL STOCK OR ISSUE
OR AUTHORIZE THE ISSUANCE OF ANY OTHER SECURITIES IN RESPECT OF, IN LIEU OF OR
IN SUBSTITUTION FOR ANY CAPITAL STOCK OR EQUITY INTERESTS, OTHER THAN ANY SUCH
TRANSACTION BETWEEN THE COMPANY AND A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY
THAT REMAINS A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY AFTER CONSUMMATION OF SUCH
TRANSACTION IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST
PRACTICES;

 

(IV)                    PURCHASE, REDEEM OR OTHERWISE ACQUIRE, DIRECTLY OR
INDIRECTLY, ANY SHARES OF ITS CAPITAL STOCK OR EQUITY INTERESTS;

 

(V)                       ISSUE, DELIVER, SELL, AUTHORIZE, PLEDGE OR OTHERWISE
ENCUMBER ANY SHARES OF CAPITAL STOCK OR EQUITY INTERESTS, OR ANY SECURITIES
CONVERTIBLE INTO SHARES OF CAPITAL STOCK OR EQUITY INTERESTS, OR SUBSCRIPTIONS,
RIGHTS, WARRANTS OR OPTIONS TO ACQUIRE ANY SHARES OF CAPITAL STOCK OR EQUITY
INTERESTS OR ANY SECURITIES CONVERTIBLE INTO SHARES OF CAPITAL STOCK OR EQUITY
INTERESTS, OR ENTER INTO OTHER AGREEMENTS OR COMMITMENTS OF ANY CHARACTER
OBLIGATING IT TO ISSUE ANY OF THE FOREGOING;

 

(VI)                    ACQUIRE OR AGREE TO ACQUIRE BY MERGING OR CONSOLIDATING
WITH, OR BY PURCHASING ANY EQUITY OR VOTING INTEREST IN OR A PORTION OF
THE ASSETS OF, OR BY ANY OTHER SIMILAR MANNER, ANY BUSINESS OR ANY PERSON OR
DIVISION THEREOF, OR OTHERWISE ACQUIRE OR AGREE TO ACQUIRE ANY ASSETS OR RIGHTS
OUTSIDE THE ORDINARY COURSE OF BUSINESS OR WHICH ARE MATERIAL TO THE BUSINESS OF
THE COMPANY AND ITS SUBSIDIARIES;

 

(VII)                 SELL, LEASE, LICENSE, TRANSFER, ENCUMBER OR OTHERWISE
DISPOSE OF ANY PROPERTIES, RIGHTS OR ASSETS, EXCEPT (I) THE SALE, LEASE OR
DISPOSITION (OTHER THAN THROUGH LICENSING) TO THIRD PARTIES OF INVENTORY IN THE
ORDINARY COURSE OF BUSINESS AND OF TANGIBLE PROPERTY OR ASSETS THAT ARE NOT
MATERIAL TO THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES OR (II)
NON-EXCLUSIVE LICENSES OF CURRENT COMPANY PRODUCTS IN THE ORDINARY COURSE OF
BUSINESS AND CONSISTENT WITH PAST PRACTICES;

 

(VIII)              MAKE ANY LOANS, ADVANCES OR CAPITAL CONTRIBUTIONS TO, OR
INVESTMENTS IN, ANY OTHER PERSON, OTHER THAN (I) LOANS OR INVESTMENTS BY THE
COMPANY OR A SUBSIDIARY TO OR IN THE COMPANY OR A SUBSIDIARY OR (II) EMPLOYEE
LOANS OR ADVANCES MADE IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH
PAST PRACTICES;

 

(IX)                      EXCEPT AS REQUIRED BY GAAP AS CONCURRED IN BY ITS
INDEPENDENT AUDITORS, MAKE ANY MATERIAL CHANGE IN ITS METHODS OR PRINCIPLES OF
ACCOUNTING SINCE THE DATE OF THE COMPANY BALANCE SHEET;

 

(X)                         MAKE, CHANGE OR RESCIND ANY MATERIAL TAX ELECTION OR
ACCOUNTING METHOD, FILE ANY MATERIAL AMENDED TAX RETURN, ENTER INTO ANY
AGREEMENT RELATING TO TAXES, SURRENDER ANY MATERIAL RIGHT TO CLAIM FOR A TAX
REFUND, SETTLE OR COMPROMISE ANY MATERIAL INCOME TAX LIABILITY OR CONSENT TO ANY
EXTENSION OR WAIVER OF ANY LIMITATION PERIOD WITH RESPECT TO MATERIAL TAXES, IN
EACH CASE, IF SUCH ACTION COULD HAVE AN ADVERSE EFFECT ON THE COMPANY OR ANY
SUBSIDIARY IN A TAX PERIOD (OR PORTION THEREOF) THAT ENDS AFTER THE CLOSING
DATE;

 

(XI)                      REVALUE ANY OF ITS ASSETS OTHER THAN IN THE ORDINARY
COURSE OF BUSINESS AND OTHER THAN AS REQUIRED BY GAAP;

 

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(XII)                   GRANT ANY EXCLUSIVE RIGHTS WITH RESPECT TO ANY COMPANY
INTELLECTUAL PROPERTY OTHER THAN IN THE ORDINARY COURSE OF BUSINESS AND
CONSISTENT WITH PAST PRACTICES;

 

(XIII)                ENTER INTO OR RENEW ANY CONTRACTS CONTAINING, OR OTHERWISE
SUBJECT THE COMPANY OR ANY SUBSIDIARY FOLLOWING THE CLOSING TO, ANY
NON-COMPETITION, EXCLUSIVITY OR OTHER MATERIAL RESTRICTIONS ON THE COMPANY, ANY
SUBSIDIARY OR ANY OF THEIR RESPECTIVE BUSINESSES, OTHER THAN IN THE ORDINARY
COURSE OF BUSINESS AND CONSISTENT WITH PAST PRACTICES;

 

(XIV)               OTHER THAN IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT
WITH PAST PRACTICES, AND EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT, (A)
ENTER INTO ANY COMPANY MATERIAL CONTRACT THAT IS OF THE TYPE ENUMERATED IN
SECTIONS 2.13(A)(V), (VIII) OR (IX), OR (B) MODIFY, TERMINATE, AMEND OR GRANT
ANY WAIVER IN RESPECT OF ANY MATERIAL TERM OF ANY COMPANY MATERIAL CONTRACT THAT
IS IN EFFECT AS OF THE DATE HEREOF AND THAT IS OF THE TYPE ENUMERATED IN
SECTIONS 2.13(A)(V), (VIII) OR (IX);

 

(XV)                  TAKE ANY ACTION THAT WOULD OR IS REASONABLY LIKELY TO
RESULT IN ANY OF THE CONDITIONS TO THE SALE AND TRANSFER OF THE SHARES SET FORTH
IN ARTICLE VI NOT BEING SATISFIED OR THAT WOULD IMPAIR THE ABILITY OF SELLER TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY IN ACCORDANCE WITH THE TERMS
HEREOF OR MATERIALLY DELAY SUCH CONSUMMATION;

 

(XVI)               INCUR ANY INDEBTEDNESS FOR BORROWED MONEY OR GUARANTEE ANY
SUCH INDEBTEDNESS OF ANOTHER PERSON OTHER THAN A SUBSIDIARY, ISSUE OR SELL ANY
DEBT SECURITIES OR OPTIONS, WARRANTS, CALLS OR OTHER RIGHTS TO ACQUIRE ANY DEBT
SECURITIES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, GUARANTEE ANY DEBT
SECURITIES OF ANOTHER PERSON OTHER THAN A SUBSIDIARY, OR ENTER INTO ANY
ARRANGEMENT HAVING THE ECONOMIC EFFECT OF ANY OF THE FOREGOING, OTHER THAN IN
THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST PRACTICES;

 

(XVII)            ENTER INTO ANY NEW (OR AMEND ANY EXISTING) BENEFIT PLAN OR ANY
NEW (OR AMEND ANY EXISTING) EMPLOYMENT OR SEVERANCE AGREEMENT, GRANT ANY GENERAL
INCREASE IN THE COMPENSATION OF EMPLOYEES (INCLUDING ANY INCREASE PURSUANT TO
ANY BONUS, PENSION, PROFIT-SHARING OR OTHER PLAN OR COMMITMENT) OR GRANT ANY
INCREASE IN THE COMPENSATION PAYABLE, OR TO BECOME PAYABLE, TO ANY EMPLOYEE,
EXCEPT IN EACH CASE EITHER IN ACCORDANCE WITH PRE-EXISTING CONTRACTUAL
PROVISIONS OR IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST
PRACTICES;

 

(XVIII)         (A)  FAIL TO DILIGENTLY PURSUE ANY MATERIAL RIGHT OR CLAIM OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES, INCLUDING ANY MATERIAL CLAIMS RELATING
TO THE ENFORCEMENT OF THE COMPANY RIGHTS WITH RESPECT TO ANY INTELLECTUAL
PROPERTY, (B) SETTLE ANY PENDING OR THREATENED LEGAL PROCEEDINGS, OTHER THAN ANY
PATENT CLAIMS OR THOSE LEGAL PROCEEDINGS SET FORTH ON SECTION 2.9 OF THE SELLER
DISCLOSURE LETTER, DIRECTLY INVOLVING (1) ANY MATERIAL RESTRICTIONS UPON ANY OF
ITS OPERATIONS OR MATERIAL ASSETS, OR (2) THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND THE ANCILLARY AGREEMENTS, (C) CANCEL ANY MATERIAL LIABILITIES OWED
TO, OR WAIVE ANY MATERIAL RIGHT OR CLAIM OF, THE COMPANY OR ANY SUBSIDIARY,
OTHER THAN IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST
PRACTICES, OR (D) VOLUNTARILY ALLOW THE LAPSE OF ANY OF ITS MATERIAL RIGHTS OF
OWNERSHIP OR USE OF ANY MATERIAL COMPANY INTELLECTUAL PROPERTY;

 

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(XIX)                 DEVIATE IN ANY MATERIAL RESPECT FROM EXISTING POLICIES AND
PROCEDURES WITH RESPECT TO BILLING AND COLLECTION SERVICES OF THE COMPANY OR ITS
SUBSIDIARIES, OTHER THAN IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH
PAST PRACTICE;

 

(XX)                    ENTER INTO ANY CONTRACT THAT PROVIDES DEFERRED REVENUE
TO BE RECORDED BY THE COMPANY OR ANY SUBSIDIARY FOR LONGER THAN A 12-MONTH
PERIOD AFTER THE DATE OF SUCH CONTRACT; OR

 

(XXI)                 AGREE IN WRITING OR OTHERWISE TO TAKE ANY OF THE ACTIONS
DESCRIBED IN (I) THROUGH (XX) ABOVE.

 

ARTICLE V

ADDITIONAL AGREEMENTS

 

5.1                                 ACQUISITION PROPOSALS.

 

Seller agrees that none of Seller, the Company nor any of its Subsidiaries, nor
any of their respective officers and directors, shall, and that Seller shall use
commercially reasonable efforts to cause each of Seller’s, the Company’s and its
Subsidiaries’ employees, agents and representatives (including any investment
banker, attorney or accountant retained by Seller, the Company or its
Subsidiaries) not to (and shall not authorize any of them to) directly or
indirectly (i) solicit, initiate, knowingly encourage or knowingly facilitate
any inquiries with respect to, or the making, submission or announcement of, any
offer or proposal for an Acquisition (as defined below) of the Company (an
“Acquisition Proposal”), (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any nonpublic information with respect to,
any Acquisition Proposal, (iii) engage in discussions with any Person with
respect to any Acquisition Proposal, except as to the existence of these
provisions, or (iv) enter into any letter of intent or similar document or any
contract agreement or commitment contemplating any Acquisition Proposal or
transaction contemplated thereby.  Seller, the Company and its Subsidiaries will
cease any and all existing activities, discussions or negotiations with any
third parties conducted heretofore with respect to any Acquisition Proposal,
and, promptly after the Closing, will request in writing the return or
destruction of any confidential information provided to such third party, in
accordance with the terms of any confidentiality agreement with such third
party.  For purposes of this Section 5.1, “Acquisition” shall mean any of the
following transactions (other than the transactions contemplated by this
Agreement) (i) a merger, consolidation, business combination or similar
transaction involving the Company or any Subsidiary, (ii) a sale or other
disposition by the Company of all or a substantial part of the assets of the
Company, or (iii) the acquisition by any Person or group, directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of any shares of capital stock or equity interests of the Company.

 

5.2                                 CONFIDENTIALITY; ACCESS TO INFORMATION.

 

(A)                                  CONFIDENTIALITY.

 

(I)                           THE PARTIES ACKNOWLEDGE THAT THE CONFIDENTIALITY
AGREEMENTS HAVE BEEN PREVIOUSLY EXECUTED AND WILL CONTINUE IN FULL FORCE AND
EFFECT IN ACCORDANCE WITH ITS TERMS, AND EACH OF SELLER AND PURCHASER WILL HOLD,
AND WILL CAUSE ITS RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND
ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS, CONSULTANTS, BANKERS AND

 

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FINANCIAL ADVISORS) TO HOLD, ANY INFORMATION REGARDING THE OTHER PARTY
CONFIDENTIAL IN ACCORDANCE WITH THE TERMS OF THE CONFIDENTIALITY AGREEMENT.

 

(II)                        EACH OF THE PARTIES HERETO SHALL (AND SHALL CAUSE
THEIR RESPECTIVE AFFILIATES TO) KEEP CONFIDENTIAL FOR A PERIOD OF THREE (3)
YEARS FROM THE DATE OF INITIAL DISCLOSURE ALL “PROPRIETARY INFORMATION” (AS
DEFINED IN THE CONFIDENTIALITY AGREEMENTS, MUTATIS MUTANDIS) OBTAINED FROM THE
OTHER PARTY OR ITS AFFILIATES OR REPRESENTATIVES (A) PURSUANT TO THE NEGOTIATION
AND EXECUTION OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS OR THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND (B) IN CONNECTION WITH
ANY MATTERS SET FORTH IN SECTIONS 5.4, 5.6 THROUGH 5.12 (INCLUSIVE) AND
ARTICLE VII, AND SHALL, DURING SUCH TIME, USE REASONABLE EFFORTS TO PROTECT THE
CONFIDENTIAL NATURE OF SUCH PROPRIETARY INFORMATION.

 

(III)                     AT THE CLOSING, SELLER SHALL ASSIGN TO PURCHASER, TO
THE EXTENT ASSIGNABLE, ITS RIGHTS UNDER ANY CONFIDENTIALITY AGREEMENTS BETWEEN
SELLER AND PERSONS OTHER THAN THE PURCHASER OR ITS AFFILIATES THAT WERE ENTERED
INTO IN CONNECTION WITH, OR RELATING TO, A POSSIBLE SALE OF THE COMPANY, ANY OF
ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE BUSINESSES OR ASSETS, INCLUDING, TO
THE EXTENT ASSIGNABLE, THE RIGHT TO ENFORCE ALL TERMS OF SUCH CONFIDENTIALITY
AGREEMENTS.

 

(B)                                 ACCESS TO INFORMATION.  SELLER SHALL, AND
SHALL CAUSE THE COMPANY AND THE SUBSIDIARIES TO, AFFORD PURCHASER AND
PURCHASER’S ACCOUNTANTS, COUNSEL, FINANCIAL ADVISORS, AUDITORS, AND OTHER
REPRESENTATIVES REASONABLE ACCESS TO THE PROPERTIES, BOOKS, RECORDS, PERSONNEL
AND INDEPENDENT AUDITORS OF THE COMPANY AND ITS SUBSIDIARIES (INCLUDING THE
BOOKS, RECORDS, FINANCIAL STATEMENTS AND PERSONNEL OF SELLER, BUT ONLY TO THE
EXTENT RELATED TO THE COMPANY AND ITS SUBSIDIARIES) DURING THE PERIOD PRIOR TO
THE CLOSING DATE TO OBTAIN ALL INFORMATION CONCERNING THEIR RESPECTIVE
BUSINESSES, LIABILITIES, OBLIGATIONS, ASSETS AND OTHER RIGHTS, INCLUDING THE
STATUS OF PRODUCT DEVELOPMENT EFFORTS, PROPERTIES, RESULTS OF OPERATIONS AND
PERSONNEL FOR PURPOSES OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, AS
PURCHASER MAY REASONABLY REQUEST.  NOTWITHSTANDING THE FOREGOING, SELLER, THE
COMPANY AND ITS SUBSIDIARIES MAY RESTRICT THE FOREGOING ACCESS TO THE EXTENT
THAT (I) ANY LEGAL REQUIREMENT APPLICABLE TO THE SELLER, THE COMPANY OR ANY OF
ITS SUBSIDIARIES REQUIRES SUCH PARTY TO RESTRICT OR PROHIBIT ACCESS TO ANY SUCH
PROPERTIES OR INFORMATION, (II) SUCH ACCESS WOULD BE IN BREACH OF ANY
CONFIDENTIALITY OBLIGATION, COMMITMENT OR PROVISION BY WHICH THE SELLER, THE
COMPANY OR ANY OF ITS SUBSIDIARIES IS BOUND OR AFFECTED, WHICH CONFIDENTIALITY
OBLIGATION, COMMITMENT OR PROVISION SHALL BE DISCLOSED TO PURCHASER, PROVIDED
THAT DISCLOSURE OF SUCH OBLIGATION, COMMITMENT OR PROVISION WOULD NOT ITSELF BE
THE BREACH OF AN OBLIGATION OR COMMITMENT TO A THIRD PARTY, OR (III) SUCH ACCESS
WOULD BE REASONABLY LIKELY TO JEOPARDIZE ANY ATTORNEY-CLIENT PRIVILEGE OR OTHER
LEGAL PRIVILEGE.  IN ADDITION, ANY INFORMATION OBTAINED FROM THE SELLER, THE
COMPANY OR ANY OF ITS SUBSIDIARIES PURSUANT TO THE ACCESS CONTEMPLATED BY THIS
SECTION 5.2(B) SHALL BE SUBJECT TO THE CONFIDENTIALITY AGREEMENTS.

 

5.3                                 PUBLIC DISCLOSURE.  WITHOUT LIMITING ANY
OTHER PROVISION OF THIS AGREEMENT, SELLER AND PURCHASER WILL CONSULT WITH EACH
OTHER BEFORE ISSUING, AND PROVIDE EACH OTHER THE REASONABLE OPPORTUNITY TO
REVIEW, COMMENT UPON AND CONCUR WITH, AND AGREE ON ANY PRESS RELEASE OR PUBLIC
STATEMENT WITH RESPECT TO THIS AGREEMENT, ANY OF THE ANCILLARY AGREEMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND WILL NOT ISSUE ANY SUCH
PRESS RELEASE OR MAKE ANY SUCH PUBLIC STATEMENT PRIOR TO SUCH CONSULTATION AND
AGREEMENT, EXCEPT AS MAY BE REQUIRED BY LAW OR ANY OTHER APPLICABLE NATIONAL OR
REGIONAL SECURITIES EXCHANGE OR MARKET.  THE SELLER SHALL USE

 

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COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE COMPANY AND ITS SUBSIDIARIES TO
COMPLY WITH THE PRECEDING SENTENCE.  THE PARTIES SHALL AGREE UPON THE TEXT OF
THE JOINT PRESS RELEASE ANNOUNCING THE EXECUTION OF THIS AGREEMENT.

 

5.4                                 REGULATORY FILINGS; REASONABLE EFFORTS.

 

(A)                                  REGULATORY FILINGS.  EACH OF SELLER AND
PURCHASER SHALL COORDINATE AND COOPERATE WITH ONE ANOTHER AND SHALL EACH USE
COMMERCIALLY REASONABLE EFFORTS TO COMPLY WITH, AND SHALL EACH REFRAIN FROM
TAKING ANY ACTION THAT WOULD IMPEDE COMPLIANCE WITH, ALL LEGAL REQUIREMENTS,
AND, AS PROMPTLY AS PRACTICABLE AFTER THE DATE HEREOF, EACH OF SELLER AND
PURCHASER SHALL MAKE (OR CAUSE TO BE MADE) ALL FILINGS, NOTICES, PETITIONS,
STATEMENTS, REGISTRATIONS, SUBMISSIONS OF INFORMATION, APPLICATION OR SUBMISSION
OF OTHER DOCUMENTS REQUIRED BY ANY GOVERNMENTAL ENTITY IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING (I) NOTIFICATION AND REPORT FORMS
WITH THE UNITED STATES FEDERAL TRADE COMMISSION (THE “FTC”) AND THE ANTITRUST
DIVISION OF THE UNITED STATES DEPARTMENT OF JUSTICE (“DOJ”) AS REQUIRED BY THE
HSR ACT, (II) ANY OTHER FILING NECESSARY TO OBTAIN ANY NECESSARY CONSENT,
(III) FILINGS UNDER ANY OTHER COMPARABLE PRE-MERGER NOTIFICATION FORMS REQUIRED
BY THE MERGER NOTIFICATION OR CONTROL LAWS OF ANY APPLICABLE JURISDICTION, AND
(IV) ANY FILINGS REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, ANY APPLICABLE STATE OR SECURITIES
OR “BLUE SKY” LAWS AND THE SECURITIES LAWS OF ANY FOREIGN COUNTRY, OR ANY OTHER
LEGAL REQUIREMENT RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 
EACH OF SELLER AND PURCHASER WILL CAUSE ALL DOCUMENTS THAT IT IS RESPONSIBLE FOR
FILING WITH ANY GOVERNMENTAL ENTITY UNDER THIS SECTION 5.4 TO COMPLY IN ALL
MATERIAL RESPECTS WITH ALL APPLICABLE LEGAL REQUIREMENTS.

 

(B)                                 EXCHANGE OF INFORMATION.  SELLER AND
PURCHASER EACH SHALL PROMPTLY SUPPLY THE OTHER WITH ANY INFORMATION WHICH MAY
REASONABLY BE REQUIRED IN ORDER TO EFFECTUATE ANY FILINGS OR APPLICATION
PURSUANT TO SECTION 5.4.  EXCEPT WHERE PROHIBITED BY APPLICABLE LEGAL
REQUIREMENTS, AND SUBJECT TO THE CONFIDENTIALITY AGREEMENTS AND ANY JOINT
DEFENSE AGREEMENT ENTERED INTO BETWEEN THE PARTIES OR THEIR COUNSEL, EACH OF THE
SELLER AND PURCHASER SHALL CONSULT WITH THE OTHER PRIOR TO TAKING A POSITION
WITH RESPECT TO ANY SUCH FILING, SHALL PERMIT THE OTHER TO REVIEW AND DISCUSS IN
ADVANCE, AND CONSIDER IN GOOD FAITH THE VIEWS OF THE OTHER IN CONNECTION WITH
ANY ANALYSES, APPEARANCES, PRESENTATIONS, MEMORANDA, BRIEFS, WHITE PAPERS,
ARGUMENTS, OPINIONS AND PROPOSALS BEFORE MAKING OR SUBMITTING ANY OF THE
FOREGOING TO ANY GOVERNMENTAL ENTITY BY OR ON BEHALF OF ANY PARTY HERETO IN
CONNECTION WITH ANY INVESTIGATIONS OR PROCEEDINGS IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING UNDER ANY ANTITRUST
OR FAIR TRADE LEGAL REQUIREMENT), COORDINATE WITH THE OTHER IN PREPARING AND
EXCHANGING SUCH INFORMATION AND PROMPTLY PROVIDE THE OTHER (AND ITS COUNSEL)
WITH COPIES OF ALL FILINGS, PRESENTATIONS OR SUBMISSIONS (AND A SUMMARY OF ANY
ORAL PRESENTATIONS) MADE BY SUCH PARTY WITH ANY GOVERNMENTAL ENTITY IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY;
PROVIDED, HOWEVER, THAT, WITH RESPECT TO ANY SUCH FILING, PRESENTATION OR
SUBMISSION, EACH OF SELLER AND PURCHASER NEED NOT SUPPLY THE OTHER (OR ITS
COUNSEL) WITH COPIES (OR IN CASE OF ORAL PRESENTATIONS, A SUMMARY) TO THE EXTENT
THAT (I) ANY LAW, TREATY, RULE OR REGULATION OF ANY GOVERNMENTAL ENTITY
APPLICABLE TO SUCH PARTY REQUIRES SUCH PARTY OR ITS SUBSIDIARIES TO RESTRICT OR
PROHIBIT ACCESS TO ANY SUCH PROPERTIES OR INFORMATION OR (II) SUCH ACCESS WOULD
BE IN BREACH OF ANY CONFIDENTIALITY OBLIGATION, COMMITMENT OR PROVISION BY WHICH
THE SELLER, THE COMPANY OR ANY OF ITS SUBSIDIARIES IS BOUND OR AFFECTED, WHICH
CONFIDENTIALITY OBLIGATION, COMMITMENT OR PROVISION SHALL BE DISCLOSED TO
PURCHASER, PROVIDED THAT DISCLOSURE OF SUCH OBLIGATION,

 

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COMMITMENT OR PROVISION WOULD NOT ITSELF BE THE BREACH OF AN OBLIGATION OR
COMMITMENT TO A THIRD PARTY.

 

(C)                                  NOTIFICATION.  EACH OF SELLER AND PURCHASER
WILL NOTIFY THE OTHER PROMPTLY UPON THE RECEIPT OF (I) ANY COMMENTS FROM ANY
OFFICIALS OF ANY GOVERNMENTAL ENTITY IN CONNECTION WITH ANY FILINGS MADE
PURSUANT HERETO, (II) ANY REQUEST BY ANY OFFICIALS OF ANY GOVERNMENTAL ENTITY
FOR AMENDMENTS OR SUPPLEMENTS TO ANY FILINGS MADE PURSUANT TO, OR INFORMATION
PROVIDED TO COMPLY IN ALL MATERIAL RESPECTS WITH, ANY LEGAL REQUIREMENTS, AND
(III) ANY LITIGATION OR ADMINISTRATIVE PROCEEDING PENDING OR, TO ITS KNOWLEDGE,
THREATENED AGAINST SUCH PARTY WHICH CHALLENGES THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS.  WHENEVER ANY EVENT OCCURS
THAT IS REQUIRED TO BE SET FORTH IN AN AMENDMENT OR SUPPLEMENT TO ANY FILING
MADE PURSUANT TO SECTION 5.4, SELLER OR PURCHASER, AS THE CASE MAY BE, WILL
PROMPTLY INFORM THE OTHER OF SUCH OCCURRENCE AND COOPERATE IN FILING WITH THE
APPLICABLE GOVERNMENTAL ENTITY SUCH AMENDMENT OR SUPPLEMENT.

 

(D)                                 REASONABLE EFFORTS.  UPON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH HEREIN, EACH OF THE PARTIES AGREES TO USE
COMMERCIALLY REASONABLE EFFORTS TO TAKE, OR CAUSE TO BE TAKEN, ALL ACTIONS, AND
TO DO, OR CAUSE TO BE DONE, AND TO ASSIST AND COOPERATE WITH THE OTHER PARTIES
IN DOING, ALL THINGS REASONABLY NECESSARY, PROPER OR ADVISABLE TO CONSUMMATE AND
MAKE EFFECTIVE, IN THE MOST EXPEDITIOUS MANNER PRACTICABLE, THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, INCLUDING USING
COMMERCIALLY REASONABLE EFFORTS TO ACCOMPLISH THE FOLLOWING:  (I) THE TAKING OF
ALL REASONABLE ACTS NECESSARY TO CAUSE THE CONDITIONS PRECEDENT SET FORTH IN
ARTICLE VI TO BE SATISFIED, (II) THE OBTAINING OF ALL NECESSARY ACTIONS OR
NONACTIONS, WAIVERS, CONSENTS, APPROVALS, ORDERS AND AUTHORIZATIONS FROM
GOVERNMENTAL ENTITIES AND THE MAKING OF ALL NECESSARY REGISTRATIONS,
DECLARATIONS AND FILINGS (INCLUDING REGISTRATIONS, DECLARATIONS AND FILINGS WITH
GOVERNMENTAL ENTITIES, IF ANY) AND THE TAKING OF ALL REASONABLE STEPS AS MAY BE
NECESSARY TO AVOID ANY SUIT, CLAIM, ACTION, INVESTIGATION OR PROCEEDING BY ANY
GOVERNMENTAL ENTITY, (III) THE OBTAINING OF ALL NECESSARY CONSENTS, APPROVALS OR
WAIVERS FROM THIRD PARTIES, INCLUDING THE LENDERS’ CONSENT AND THE NECESSARY
CONSENTS (PROVIDED, THAT THE PARTIES WILL DISCUSS IN GOOD FAITH PROCEDURES TO
PURSUE THIRD PARTY CONSENTS WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS) (IT BEING UNDERSTOOD THAT FAILURE
TO OBTAIN ANY ONE OR MORE SUCH CONSENTS, IN AND OF ITSELF, SHALL NOT CONSTITUTE
A FAILURE BY SELLER OR PURCHASER TO COMPLY WITH ANY OF ITS COVENANTS HEREIN OR A
FAILURE OF A CONDITION TO CLOSING HEREUNDER), (IV) THE DEFENDING OF ANY SUITS,
CLAIMS, ACTIONS, INVESTIGATIONS OR PROCEEDINGS, WHETHER JUDICIAL OR
ADMINISTRATIVE, CHALLENGING THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND (V) THE
EXECUTION OR DELIVERY OF ANY ADDITIONAL INSTRUMENTS REASONABLY NECESSARY TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY, AND TO CARRY OUT FULLY THE PURPOSES
OF, THIS AGREEMENT AND THE ANCILLARY AGREEMENTS.  PROMPTLY AFTER THE DATE
HEREOF, SELLER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO ARRANGE A MEETING
BETWEEN EACH OF THOSE PERSONS IDENTIFIED ON SECTION 5.4(D)(I) OF THE SELLER
DISCLOSURE LETTER AND REPRESENTATIVES OF THE COMPANY, PURCHASER AND SELLER TO
INTRODUCE PURCHASER TO EACH SUCH PERSON.  IN THE EVENT SELLER OR THE COMPANY
RECEIVES ANY WRITTEN NOTICE OR COMMUNICATION FROM ANY OF THOSE PERSONS
IDENTIFIED ON SECTION 5.4(D)(II) OF THE SELLER DISCLOSURE LETTER RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY, OR NOTICE OF TERMINATION OR THREATENED
TERMINATION OF ANY COMPANY MATERIAL CONTRACT WITH SUCH PERSON, THEN SELLER SHALL
PROMPTLY, AND IN ANY EVENT WITHIN TWO (2) BUSINESS DAYS AFTER RECEIPT THEREOF,
FURNISH PURCHASER WITH A COPY OF SUCH NOTICE OR COMMUNICATION.

 

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5.5                                 NOTIFICATION OF CERTAIN MATTERS.

 

(A)                                  BY SELLER.  SELLER SHALL GIVE PROMPT NOTICE
TO PURCHASER OF ANY REPRESENTATION OR WARRANTY MADE BY IT CONTAINED IN THIS
AGREEMENT BECOMING UNTRUE OR INACCURATE, OR ANY FAILURE OF SELLER TO COMPLY WITH
OR SATISFY IN ANY MATERIAL RESPECT ANY COVENANT, CONDITION OR AGREEMENT TO BE
COMPLIED WITH OR SATISFIED BY IT UNDER THIS AGREEMENT, IN EACH CASE, SUCH THAT
THE CONDITIONS SET FORTH IN SECTION 6.3(A) OR 6.3(B) WOULD NOT BE SATISFIED;
PROVIDED, HOWEVER, THAT THE DELIVERY OF ANY NOTICE PURSUANT TO THIS SECTION 5.5
WILL NOT LIMIT OR OTHERWISE AFFECT THE REMEDIES AVAILABLE HEREUNDER TO PURCHASER
OR THE REPRESENTATIONS, WARRANTIES OR COVENANTS OF SELLER OR THE CONDITIONS TO
THE OBLIGATIONS OF PURCHASER.

 

(B)                                 BY PURCHASER.  PURCHASER SHALL GIVE PROMPT
NOTICE TO SELLER OF ANY REPRESENTATION OR WARRANTY MADE BY IT CONTAINED IN THIS
AGREEMENT BECOMING UNTRUE OR INACCURATE, OR ANY FAILURE OF PURCHASER TO COMPLY
WITH OR SATISFY IN ANY MATERIAL RESPECT ANY COVENANT, CONDITION OR AGREEMENT TO
BE COMPLIED WITH OR SATISFIED BY IT UNDER THIS AGREEMENT, IN EACH CASE, SUCH
THAT THE CONDITIONS SET FORTH IN SECTION 6.2(A) OR 6.2(B) WOULD NOT BE
SATISFIED; PROVIDED, HOWEVER, THAT THE DELIVERY OF ANY NOTICE PURSUANT TO THIS
SECTION 5.5(B) WILL NOT LIMIT OR OTHERWISE AFFECT THE REMEDIES AVAILABLE
HEREUNDER TO SELLER OR THE REPRESENTATIONS, WARRANTIES OR COVENANTS OF PURCHASER
OR THE CONDITIONS TO THE OBLIGATIONS OF SELLER.

 

5.6                                 EMPLOYEE BENEFITS.

 

(A)                                  GENERAL.  FOLLOWING THE CLOSING DATE,
PURCHASER SHALL PROVIDE EACH PARTICIPANT IN THE BENEFIT PLANS (INCLUDING ALL
DEPENDENTS) (THE “COMPANY PARTICIPANTS”), FOR A PERIOD OF AT LEAST ONE YEAR FROM
THE CLOSING DATE, BENEFITS THAT ARE SUBSTANTIALLY COMPARABLE, IN THE AGGREGATE,
TO THOSE PROVIDED UNDER THE BENEFIT PLANS AS IN EFFECT AS OF THE CLOSING DATE. 
IF PURCHASER PROVIDES SUCH BENEFITS UNDER PURCHASER’S EMPLOYEE BENEFIT PLANS OR
ARRANGEMENTS, (X) EACH COMPANY PARTICIPANT SHALL BE GIVEN SERVICE CREDIT FOR
ELIGIBILITY TO PARTICIPATE (PROVIDED THAT NO RETROACTIVE CONTRIBUTIONS WILL BE
REQUIRED) AND ELIGIBILITY FOR VESTING UNDER PURCHASER EMPLOYEE BENEFIT PLANS AND
ARRANGEMENTS WITH RESPECT TO HIS OR HER LENGTH OF SERVICE WITH THE COMPANY (AND
ITS SUBSIDIARIES AND PREDECESSORS) PRIOR TO THE CLOSING DATE, AND (Y) PURCHASER
SHALL CAUSE ANY AND ALL PRE-EXISTING CONDITION (OR ACTIVELY AT WORK OR SIMILAR)
LIMITATIONS, ELIGIBILITY WAITING PERIODS AND EVIDENCE OF INSURABILITY
REQUIREMENTS UNDER ANY PURCHASER EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS TO BE
WAIVED (OTHER THAN LIMITATIONS OR WAITING PERIODS THAT ARE ALREADY IN EFFECT
WITH RESPECT TO SUCH COMPANY PARTICIPANT AND THAT HAVE NOT BEEN SATISFIED PRIOR
TO THE CLOSING DATE) WITH RESPECT TO SUCH COMPANY PARTICIPANTS TO THE SAME
EXTENT WAIVED OR SATISFIED UNDER COMPARABLE BENEFIT PLANS AND SHALL PROVIDE THEM
WITH CREDIT FOR ANY CO-PAYMENTS, DEDUCTIBLES, AND OFFSETS (OR SIMILAR PAYMENTS)
MADE DURING THE PLAN YEAR WHICH INCLUDES THE CLOSING DATE FOR THE PURPOSES OF
SATISFYING ANY APPLICABLE DEDUCTIBLE, OUT-OF-POCKET, OR SIMILAR REQUIREMENTS
UNDER ANY PURCHASER EMPLOYEE BENEFIT PLANS OR ARRANGEMENTS IN WHICH THEY ARE
ELIGIBLE IN THE PLAN YEAR WHICH INCLUDES PARTICIPATE AFTER THE CLOSING DATE.

 

(B)                                 401(K) PLAN.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, PURCHASER SHALL CAUSE THE COMPANY TO CONTINUE
THE COMPANY’S 401(K) PLAN ON SUBSTANTIALLY SIMILAR TERMS AS ARE IN EXISTENCE AT
THE CLOSING DATE FOR AT LEAST ONE YEAR FOLLOWING THE CLOSING DATE; PROVIDED,
HOWEVER, THAT THE COMPANY SHALL PERMIT THE RETENTION OR SALE OF ANY SECURITIES
OF SELLER (SHARES OR INTERESTS IN SELLER’S CLASS A COMMON STOCK) IN
PARTICIPANTS’ ACCOUNTS AS OF THE

 

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CLOSING DATE THROUGH SUCH ONE-YEAR ANNIVERSARY BUT SHALL NOT PERMIT THE PURCHASE
OF ADDITIONAL SECURITIES OF SELLER AFTER THE CLOSING DATE.  DURING THIS PERIOD,
PURCHASER SHALL CAUSE THE COMPANY TO PERMIT PARTICIPANTS TO ELECT TO TRANSFER
FUNDS FROM AN INVESTMENT IN SELLER’S SECURITIES TO ALTERNATIVE INVESTMENTS
OFFERED IN THE COMPANY’S 401(K) PLAN.  SELLER SHALL CONTINUE TO MANAGE ALL
ASPECTS OF SELLER’S SECURITIES, INCLUDING TRANSACTING PARTICIPANT EXCHANGES IN
SELLER’S SECURITIES ON THE QUARTERLY TRADE CYCLE, PROVIDED, HOWEVER, THAT SELLER
SHALL INDEMNIFY, SAVE AND HOLD HARMLESS PURCHASER AND ITS AFFILIATES (INCLUDING,
AFTER THE CLOSING, THE COMPANY AND ITS SUBSIDIARIES) FOR ANY LOSSES ARISING OUT
OF OR RELATED TO THE VALUATION BY SELLER OF SELLER’S SECURITIES.  ON THE DATE OF
SELLER’S QUARTERLY TRADE CYCLE IMMEDIATELY FOLLOWING THE ONE-YEAR ANNIVERSARY OF
THE CLOSING DATE OR AT SUCH LATER DATE AS PURCHASER (OR THE TRUSTEE OF THE
401(K) PLAN) AND SELLER SHALL AGREE, PURCHASER (OR THE TRUSTEE OF THE 401(K)
PLAN) SHALL CAUSE PARTICIPANTS IN THE COMPANY’S 401(K) PLAN TO OFFER FOR SALE TO
SELLER ANY SELLER SECURITIES IN PARTICIPANTS’ ACCOUNTS AND SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO CONTINUE USING THE VANGUARD GROUP, INC. AS
THE PLAN ADMINISTRATOR FOR THE COMPANY’S 401(K) PLAN.

 

(C)                                  COMPANY DEFERRAL PLANS.  AFTER CLOSING,
PURCHASER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE COMPANY TO
ESTABLISH A DEFERRAL PLAN TO PERMIT COMPANY EMPLOYEES TO DEFER COMPENSATION,
INCLUDING AMOUNTS VESTED SUBSEQUENT TO CLOSING UNDER THE COMPANY’S EMPLOYEE
APPRECIATION PLAN.

 

(D)                                 PENSION PLAN AMENDMENTS.  SELLER SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO COMPLETE ANY NON-DISCRIMINATION TESTING
APPLICABLE TO ALL PENSION PLANS PRIOR TO THE CLOSING, AND SELLER SHALL NOT CAUSE
OR PERMIT ANY AMENDMENTS RELATED TO SUCH PENSION PLANS TO BE ADOPTED AT ANY TIME
EARLIER THAN TEN (10) DAYS PRIOR TO THE ANTICIPATED CLOSING DATE, UNLESS SUCH
NON-DISCRIMINATION TESTS HAVE BEEN COMPLETED AND SELLER CONCLUDES, IN ITS SOLE
AND ABSOLUTE DISCRETION, THAT SUCH AMENDMENTS ARE NECESSARY IN ORDER TO COMPLY
WITH APPLICABLE LAW.  WITHOUT THE PRIOR WRITTEN CONSENT OF PURCHASER, NO SUCH
AMENDMENT TO THE PENSION PLANS SHALL (I) RESULT IN AN INCREASE IN THE “PROJECTED
BENEFIT OBLIGATIONS” OF SUCH PLANS OF MORE THAN $1,500,000 OR (II) REQUIRE ANY
CURRENT CASH CONTRIBUTION TO THE PENSION PLAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES.

 

5.7                                 DIRECTOR’S AND OFFICER’S INDEMNIFICATION.

 

(A)                                  FOR THE PERIOD OF SIX (6) YEARS FOLLOWING
THE CLOSING DATE, PURCHASER WILL CAUSE THE COMPANY TO INDEMNIFY AND HOLD
HARMLESS EACH PERSON WHO IS NOW, OR HAS BEEN AT ANY TIME PRIOR TO THE DATE OF
THIS AGREEMENT OR WHO BECOMES PRIOR TO THE CLOSING DATE, AN OFFICER, DIRECTOR OR
EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES (THE “COMPANY INDEMNIFIED
PARTIES”) AGAINST ALL LOSSES PAID IN SETTLEMENT, IN EACH CASE TO THE EXTENT
ACTUALLY AND REASONABLY INCURRED WITH THE APPROVAL OF THE INDEMNIFYING PARTY,
WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED (THE “COMPANY
INDEMNIFIED LIABILITIES”) OF OR IN CONNECTION WITH ANY CLAIM, ACTION, SUIT,
PROCEEDING OR INVESTIGATION BY REASON OF THE FACT THAT SUCH PERSON IS OR WAS A
DIRECTOR, OFFICER OR EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, WHETHER
PERTAINING TO ANY MATTER EXISTING OR OCCURRING AT OR PRIOR TO THE CLOSING DATE
AND WHETHER ASSERTED OR CLAIMED PRIOR TO, OR AT OR AFTER THE CLOSING DATE,
INCLUDING, WITHOUT LIMITATION, ALL COMPANY INDEMNIFIED LIABILITIES BASED ON,
PRIMARILY ARISING OUT OF, OR PRIMARILY RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (TO THE EXTENT THAT SUCH LOSSES AROSE FROM OR
ARE RELATED DIRECTLY TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY),
IN EACH CASE TO THE FULL

 

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EXTENT A CORPORATION IS PERMITTED BY LAW TO INDEMNIFY ITS OWN DIRECTORS,
OFFICERS AND EMPLOYEES (THE “COMPANY INDEMNIFIED PROCEEDINGS”).  IN THE EVENT
ANY COMPANY INDEMNIFIED PARTY IS OR BECOMES INVOLVED IN ANY COMPANY INDEMNIFIED
PROCEEDING, PURCHASER SHALL, OR SHALL CAUSE THE COMPANY TO, PAY EXPENSES IN
ADVANCE OF THE FINAL DISPOSITION OF ANY SUCH COMPANY INDEMNIFIED PROCEEDING TO
EACH COMPANY INDEMNIFIED PARTY TO THE FULL EXTENT PERMITTED BY LAW UPON RECEIPT
OF ANY UNDERTAKING CONTEMPLATED BY SECTION 145 OF THE DELAWARE GENERAL
CORPORATION LAW (“DGCL”).  WITHOUT LIMITING THE FOREGOING, IN THE EVENT ANY SUCH
COMPANY INDEMNIFIED PROCEEDING IS BROUGHT AGAINST ANY COMPANY INDEMNIFIED PARTY,
(I) THE COMPANY INDEMNIFIED PARTY MAY RETAIN COUNSEL OF ITS CHOOSING WHICH SHALL
BE REASONABLY SATISFACTORY TO THE PURCHASER AND THE COMPANY, (II) PURCHASER
SHALL, OR SHALL CAUSE THE COMPANY TO, PAY ALL REASONABLE AND DOCUMENTED FEES AND
EXPENSES OF ONE COUNSEL FOR ALL OF THE COMPANY INDEMNIFIED PARTIES WITH RESPECT
TO EACH SUCH COMPANY INDEMNIFIED PROCEEDING UNLESS THERE IS, UNDER APPLICABLE
STANDARDS OF PROFESSIONAL CONDUCT, A CONFLICT ON ANY SIGNIFICANT ISSUE BETWEEN
THE POSITIONS OF ANY TWO OR MORE COMPANY INDEMNIFIED PARTIES, IN WHICH CASE
PURCHASER SHALL, OR SHALL CAUSE THE COMPANY TO, PAY THE REASONABLE AND
DOCUMENTED FEES OF SUCH ADDITIONAL COUNSEL REQUIRED BY SUCH CONFLICT, PROMPTLY
AS STATEMENTS THEREFOR ARE RECEIVED, AND (III) PURCHASER WILL, AND WILL CAUSE
THE COMPANY TO, USE COMMERCIALLY REASONABLE EFFORTS TO ASSIST IN THE VIGOROUS
DEFENSE OF ANY SUCH MATTER; PROVIDED, HOWEVER, THAT NEITHER PURCHASER NOR THE
COMPANY SHALL BE LIABLE FOR ANY SETTLEMENT OF ANY CLAIM EFFECTED WITHOUT ITS
WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. 
ANY COMPANY INDEMNIFIED PARTY WISHING TO CLAIM INDEMNIFICATION UNDER THIS
SECTION 5.7 UPON BECOMING AWARE OF ANY SUCH COMPANY INDEMNIFIED PROCEEDING SHALL
PROMPTLY NOTIFY PURCHASER AND THE COMPANY (BUT THE FAILURE TO SO NOTIFY
PURCHASER OR THE COMPANY SHALL NOT RELIEVE PURCHASER OR THE COMPANY FROM ANY
LIABILITY IT MAY HAVE UNDER THIS SECTION 5.7 EXCEPT TO THE EXTENT SUCH FAILURE
MATERIALLY PREJUDICES PURCHASER OR THE COMPANY), AND SHALL DELIVER TO PURCHASER
AND THE COMPANY THE UNDERTAKING CONTEMPLATED BY SECTION 145 OF THE DGCL.

 

(B)                                 FOR A PERIOD OF SIX (6) YEARS FOLLOWING THE
CLOSING DATE, PURCHASER WILL, AND WILL CAUSE THE COMPANY TO, FULFILL AND HONOR
IN ALL RESPECTS THE OBLIGATIONS OF THE COMPANY PURSUANT TO THE INDEMNIFICATION
AGREEMENTS BETWEEN THE COMPANY OR ANY SUBSIDIARY AND THE INDEMNIFIED PARTIES SET
FORTH IN THE SELLER DISCLOSURE LETTER, SUBJECT TO APPLICABLE LAW.  FOR A PERIOD
OF SIX (6) YEARS FOLLOWING THE CLOSING DATE, THE CERTIFICATE OF INCORPORATION
AND BYLAWS OF THE COMPANY WILL CONTAIN PROVISIONS WITH RESPECT TO EXCULPATION
AND INDEMNIFICATION THAT ARE AT LEAST AS FAVORABLE TO THE INDEMNIFIED PARTIES AS
THOSE CONTAINED IN THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE COMPANY AS
IN EFFECT ON THE DATE HEREOF, WHICH PROVISIONS WILL NOT BE AMENDED, REPEALED OR
OTHERWISE MODIFIED IN ANY MANNER THAT WOULD ADVERSELY AFFECT THE RIGHTS
THEREUNDER OF INDEMNIFIED PARTIES.

 

(C)                                  THIS SECTION 5.7 IS INTENDED TO BE FOR THE
BENEFIT OF, AND SHALL BE ENFORCEABLE BY THE INDEMNIFIED PARTIES AND THEIR HEIRS
AND PERSONAL REPRESENTATIVES AND SHALL BE BINDING ON PURCHASER AND THE COMPANY
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.  IN THE EVENT PURCHASER OR THE
COMPANY OR THEIR RESPECTIVE SUCCESSOR OR ASSIGN (I) CONSOLIDATES WITH OR MERGES
INTO ANY OTHER PERSON AND SHALL NOT BE THE CONTINUING OR SURVIVING CORPORATION
OR ENTITY IN SUCH CONSOLIDATION OR MERGER OR (II) TRANSFERS ALL OR SUBSTANTIALLY
ALL OF ITS PROPERTIES AND ASSETS TO ANY PERSON, THEN, AND IN EACH CASE, PROPER
PROVISION SHALL BE MADE SO THAT THE SUCCESSOR AND ASSIGN OF PURCHASER OR THE
COMPANY, AS THE CASE MAY BE, HONOR THE OBLIGATIONS SET FORTH WITH RESPECT TO
PURCHASER OR THE COMPANY, AS THE CASE MAY BE, IN THIS SECTION 5.7.

 

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(D)                                 NOTHING IN THIS AGREEMENT IS INTENDED TO,
SHALL BE CONSTRUED TO OR SHALL RELEASE, WAIVE OR IMPAIR ANY RIGHTS OF THE
COMPANY INDEMNIFIED PARTIES TO DIRECTORS’ AND OFFICERS’ INSURANCE CLAIMS UNDER
ANY POLICY OF THE SELLER, THE COMPANY OR ANY OF THEIR AFFILIATES IN EXISTENCE ON
OR PRIOR TO THE CLOSING DATE, IT BEING UNDERSTOOD AND AGREED THAT THE
INDEMNIFICATION PROVIDED FOR IN THIS SECTION 5.7 IS NOT PRIOR TO OR IN
SUBSTITUTION FOR ANY SUCH CLAIMS UNDER SUCH POLICY.

 

(E)                                  NOTWITHSTANDING ANY PROVISION OF THIS
SECTION 5.7 TO THE CONTRARY, NONE OF THE COMPANY, THE PURCHASER OR ANY AFFILIATE
OF EITHER SHALL BE OBLIGATED TO SELLER PURSUANT TO THIS AGREEMENT TO INDEMNIFY,
OR MAINTAIN INSURANCE FOR THE BENEFIT OF, ANY COMPANY INDEMNIFIED PARTY IN
RESPECT OF ANY CLAIM BROUGHT AGAINST ANY SUCH COMPANY INDEMNIFIED PARTY BY THE
SELLER OR ANY AFFILIATE OR STOCKHOLDER OF THE SELLER, SOLELY IN HIS OR HER
CAPACITY AS A STOCKHOLDER OF SELLER, WITH RESPECT TO MATTERS OCCURRING PRIOR TO
THE CLOSING DATE.

 

5.8                                 TAX COVENANTS.

 

(A)                                  SELLER SHALL PREPARE AND FILE WHEN DUE, OR
CAUSE TO BE PREPARED AND FILED WHEN DUE, ALL TAX RETURNS OF THE COMPANY AND ANY
OF ITS SUBSIDIARIES OR, IN THE CASE OF CONSOLIDATED INCOME TAX RETURNS UNDER
FEDERAL, STATE OR FOREIGN LAW, THAT INCLUDE THE COMPANY OR ANY OF ITS
SUBSIDIARIES, FOR ALL TAX PERIODS ENDING ON OR PRIOR TO THE CLOSING DATE (A
“PRE-CLOSING TAX PERIOD”).  PURCHASER SHALL COOPERATE WITH AND ASSIST, AND SHALL
CAUSE THE COMPANY, ITS SUBSIDIARIES AND THEIR RESPECTIVE OFFICERS, EMPLOYEES AND
REPRESENTATIVES TO COOPERATE WITH AND ASSIST, SELLER WITH RESPECT TO THE
PREPARING AND FILING OF TAX RETURNS FOR ALL PRE-CLOSING TAX PERIODS.  SELLER
SHALL PREPARE SUCH TAX RETURNS BY TREATING ITEMS ON SUCH TAX RETURNS IN A MANNER
CONSISTENT WITH PAST PRACTICE WITH RESPECT TO SUCH ITEMS, UNLESS OTHERWISE
REQUIRED BY A LEGAL REQUIREMENT.

 

(B)                                 PURCHASER SHALL (OR SHALL CAUSE THE COMPANY
TO) PREPARE AND FILE WHEN DUE, OR CAUSE TO BE PREPARED AND FILED WHEN DUE, ALL
TAX RETURNS REQUIRED TO BE FILED BY THE COMPANY AND ANY OF ITS SUBSIDIARIES
RELATING TO ANY TAXABLE PERIOD THAT BEGINS BEFORE, AND ENDS AFTER, THE CLOSING
DATE (A “STRADDLE PERIOD”) AND THE COMPANY SHALL REMIT (OR CAUSE TO BE REMITTED)
ANY TAXES DUE IN RESPECT OF SUCH TAX RETURNS. PURCHASER SHALL PROVIDE SELLER
WITH A WRITTEN NOTICE OF THE AMOUNT OWED BY SELLER PURSUANT TO SECTION 7.8(A)
WITH RESPECT TO THE TAXABLE PERIODS COVERED BY SUCH TAX RETURNS 15 DAYS BEFORE
SUCH TAXES ARE DUE AND SELLER SHALL REMIT TO PURCHASER (OR THE COMPANY) SUCH
AMOUNT NO LATER THAN FIVE (5) DAYS BEFORE SUCH TAXES ARE DUE AND SHALL PROMPTLY
PROVIDE SELLER WITH COPIES OF ALL SUCH TAX RETURNS.

 

(C)                                  IN CONNECTION WITH THE PREPARATION OF TAX
RETURNS, AUDIT EXAMINATIONS, AND ANY ADMINISTRATIVE OR JUDICIAL PROCEEDINGS
RELATING TO THE TAX LIABILITIES IMPOSED ON THE SELLER, THE PURCHASER, THE
COMPANY OR THE SUBSIDIARIES FOR ALL PRE-CLOSING TAX PERIODS AND THE STRADDLE
PERIOD, THE PURCHASER, THE COMPANY AND THE SUBSIDIARIES ON THE ONE HAND, AND THE
SELLER ON THE OTHER HAND, SHALL COOPERATE FULLY WITH EACH OTHER, INCLUDING, BUT
NOT LIMITED TO, DURING NORMAL BUSINESS HOURS, THE FURNISHING OR MAKING AVAILABLE
OF RECORDS, PERSONNEL (AS REASONABLY REQUIRED AND AT NO COST TO THE OTHER
PARTY), BOOKS OF ACCOUNT, POWERS OF ATTORNEY OR OTHER MATERIALS NECESSARY OR
HELPFUL FOR THE PREPARATION OF SUCH TAX RETURNS, THE CONDUCT OF AUDIT
EXAMINATIONS OR THE DEFENSE OF CLAIMS BY TAXING AUTHORITIES AS TO THE IMPOSITION
OF TAXES.  THE SELLER, THE PURCHASER, THE COMPANY AND THE SUBSIDIARIES SHALL
RETAIN ALL TAX RETURNS, SCHEDULES

 

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AND WORK PAPERS AND ALL MATERIAL RECORDS OR OTHER DOCUMENTS RELATING TO ALL TAX
MATTERS PERTINENT TO THE COMPANY AND THE SUBSIDIARIES RELATING TO ANY TAX PERIOD
BEGINNING BEFORE THE CLOSING DATE UNTIL THE EXPIRATION OF THE STATUTE OF
LIMITATIONS OF THE TAX PERIODS TO WHICH SUCH TAX RETURNS AND OTHER DOCUMENTS
RELATE, WITHOUT REGARD TO EXTENSION, EXCEPT TO THE EXTENT NOTIFIED BY ANOTHER
PARTY IN WRITING OF SUCH EXTENSIONS FOR THE RESPECTIVE TAX PERIODS.  THE SELLER,
ON THE ONE HAND, AND EACH OF THE PURCHASER, THE COMPANY AND THE SUBSIDIARIES, ON
THE OTHER HAND, SHALL GIVE THE OTHER PARTY REASONABLE WRITTEN NOTICE PRIOR TO
DESTROYING OR DISCARDING ANY SUCH BOOKS OR RECORDS AND, IF THE OTHER PARTY SO
REQUESTS, THE OTHER PARTY SHALL TAKE POSSESSION OF SUCH BOOKS AND RECORDS.

 

(D)                                 SELLER SHALL CAUSE ALL TAX SHARING
AGREEMENTS, TAX INDEMNITY AGREEMENTS OR SIMILAR ARRANGEMENTS BETWEEN THE COMPANY
AND SELLER OR ANY OF THEIR AFFILIATES TO BE TERMINATED, EFFECTIVE AS OF
IMMEDIATELY BEFORE THE CLOSING, TO THE EXTENT THAT ANY SUCH AGREEMENT RELATED TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES AND AFTER THE CLOSING, NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES SHALL HAVE ANY OBLIGATION UNDER ANY SUCH
AGREEMENT OR ARRANGEMENT.

 

(E)                                  WITHIN SIXTY (60) DAYS AFTER SELLER HAS
PREPARED THE TAX RETURNS DESCRIBED IN SECTION 5.8(A), SELLER SHALL TRANSFER TO
THE COMPANY COPIES OF ALL TAX RETURNS AND TAX BOOKS AND RECORDS THAT RELATE TO
THE COMPANY AND THE SUBSIDIARIES AND WHICH ARE IN THE POSSESSION OF THE SELLER
OR ANY OF ITS AFFILIATES.

 

(F)                                    SELLER SHALL NOT REPORT ON ITS U.S.
FEDERAL INCOME TAX RETURN FOR THE TAXABLE YEAR THAT INCLUDES THE CLOSING DATE
ANY TAX CREDITS DESCRIBED IN SECTION 1.3(E) OR TAKE ANY OTHER ACTION THAT IS
INCONSISTENT WITH PURCHASER, THE COMPANY OR ANY SUBSIDIARY CLAIMING ANY SUCH TAX
CREDITS ON ANY TAX RETURN FOR ANY TAXABLE PERIOD (OR PORTION THEREOF) ENDING
AFTER THE CLOSING DATE.

 

(G)                                 SELLER SHALL DELIVER TO PURCHASER AT THE
CLOSING (I) A DULY EXECUTED CERTIFICATE OF NON-FOREIGN STATUS THAT SATISFIES THE
REQUIREMENTS OF TREASURY REGULATION SECTION 1.1445-2(B)(2) AND (II) A DULY
EXECUTED IRS FORM W-9.

 

(H)                                 PURCHASER SHALL NOT MAKE, AND SHALL NOT
PERMIT THE COMPANY TO MAKE, AN ELECTION UNDER SECTION 338(G) OF THE CODE OR ANY
CORRESPONDING ELECTIONS UNDER STATE, LOCAL, OR FOREIGN TAX LAW, WITH RESPECT TO
THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT.

 

(I)                                     PURCHASER SHALL NOT MAKE, AND SHALL NOT
PERMIT THE COMPANY TO MAKE, AN AMENDED TAX RETURN FILING FOR ANY TAXABLE PERIOD
ENDING ON OR BEFORE THE CLOSING DATE WITHOUT THE PRIOR WRITTEN CONSENT OF
SELLER, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, IF SUCH
AMENDED TAX RETURN WOULD HAVE A MATERIAL ADVERSE EFFECT ON SELLER.

 

5.9                                 TRANSITION SERVICES.

 

Prior to the Closing, Seller and Purchaser shall enter into a Transition
Services Agreement in substantially the form attached hereto as Exhibit A (the
“Transition Services Agreement”).  Except as set forth in the Transition
Services Agreement, or as otherwise agreed to in writing by Seller and
Purchaser, all tax, information technologies, insurance, employee benefits,
treasury and other products and services provided to the Company or its
Subsidiaries by Seller or any Affiliate of Seller, including any agreements or
understanding (written or oral) with

 

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respect thereto, shall terminate simultaneously with the Closing without any
further action or liability on the part of the parties thereto; provided,
however, that if Purchaser desires additional transition services currently
provided by the Seller or any Affiliate of Seller but not described in the
Transition Services Agreement, Purchaser and Seller shall use commercially
reasonable efforts to agree upon the terms (including scope, duration and cost)
to provide such services.  Except as set forth in the Transition Services
Agreement, in the absence of any other written agreement, the provision of any
services (similar to those contemplated by the preceding sentence) by Seller to
the Company or its Subsidiaries from and after the Closing shall be for the
convenience, and at the expense of, the Purchaser only and shall be furnished
without any liability on the part of Seller with respect thereto.

 

5.10                           RELEASE OF GUARANTIES; ASSUMPTIONS OF LETTERS OF
CREDIT; TRANSFER OF EQUIPMENT LEASES.

 

(A)                                  PRIOR TO CLOSING, SELLER SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO BE RELIEVED OF ITS GUARANTY AND LEASE PAYMENT
OBLIGATIONS SET FORTH IN SECTION 5.10(A) OF THE SELLER DISCLOSURE LETTER (THE
“SCHEDULED GUARANTIES”).  PURCHASER SHALL COOPERATE WITH SELLER IN REMOVING
SELLER’S OBLIGATIONS ARISING UNDER OR RELATING TO THE SCHEDULED GUARANTIES,
INCLUDING, IF NECESSARY, ASSUMING THE SCHEDULED GUARANTIES OR PROVIDING
SUBSTITUTE GUARANTIES THEREFOR (TO THE EXTENT PERMITTED BY THE CURRENT
BENEFICIARIES OF SUCH SCHEDULED GUARANTIES).

 

(B)                                 AFTER THE CLOSING, (I) PURCHASER AND SELLER
SHALL COOPERATE IN REMOVING ANY REMAINING OBLIGATIONS, OF ANY NATURE WHATSOEVER,
THAT SELLER OR ANY AFFILIATE OF SELLER HAS TO GUARANTY THE PERFORMANCE OR
OBLIGATIONS OF THE COMPANY OR ITS SUBSIDIARIES AFTER THE CLOSING DATE INCLUDING,
WITHOUT LIMITATION, ANY SCHEDULED GUARANTIES IN EXISTENCE AS OF THE CLOSING,
CONTRACT-PERFORMANCE BONDS, COMPLETION BONDS, SURETY BONDS OR OTHER BONDS POSTED
TO SECURE THE PERFORMANCE, COMPLETION OR OTHER OBLIGATION OF THE COMPANY OR ITS
SUBSIDIARIES UNDER ANY CONTRACT (THE “REMAINING GUARANTIES”) AND (II) PURCHASER
SHALL ASSUME THE REMAINING GUARANTIES OR PROVIDE SUBSTITUTE GUARANTIES THEREFOR
(TO THE EXTENT PERMITTED BY THE CURRENT BENEFICIARIES OF SUCH REMAINING
GUARANTIES).  NOTWITHSTANDING THE FOREGOING, THE COMPANY AND PURCHASER SHALL
HAVE NO OBLIGATIONS UNDER THIS SECTION 5.10(B) (AND ONLY THIS SECTION 5.10(B))
WITH RESPECT TO A GIVEN REMAINING GUARANTY IF ANY ACTION REQUIRED UNDER THIS
SECTION 5.10(B) WOULD (I) MATERIALLY INCREASE THE COMPANY’S COSTS IN RESPECT OF
ANY RELATED PROJECT OR CONTRACT, UNLESS SELLER HAS AGREED IN WRITING TO
REIMBURSE THE COMPANY FOR SUCH EXPENSE, OR (II) CAUSE THE COMPANY TO DEFAULT
UNDER ANY RELATED CONTRACT.  THE COMPANY SHALL PAY ANY FEES INCURRED IN THE
RENEWAL AFTER THE CLOSING DATE OF ANY SUCH LETTERS OF CREDIT OR BONDS SECURING
OBLIGATIONS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES AND FOR WHICH SELLER OR
ANY AFFILIATE (OTHER THAN THE COMPANY OR ITS SUBSIDIARIES) IS THEN LIABLE. 
PURCHASER SHALL, AND SHALL CAUSE THE COMPANY TO, KEEP SELLER REASONABLY INFORMED
OF THE STATUS OF THE COMPANY’S EFFORTS TO OBTAIN SUCH RELEASES.

 

(C)                                  PROMPTLY AFTER THE CLOSING, AND, IN ANY
EVENT, WITHIN NINETY (90) DAYS FROM THE CLOSING, PURCHASER SHALL CAUSE THE
COMPANY TO ESTABLISH A CREDIT FACILITY AND SHALL, UNDER SUCH FACILITY, TAKE
ASSIGNMENT OF, ASSUME OR REPLACE THE OBLIGATIONS ARISING UNDER THE LETTERS OF
CREDIT SET FORTH IN SECTION 5.10(C) OF THE SELLER DISCLOSURE LETTER.

 

(D)                                 PROMPTLY AFTER THE CLOSING, AND, IN ANY
EVENT, WITHIN NINETY (90) DAYS FROM THE CLOSING, SELLER AND PURCHASER SHALL
COOPERATE TO EFFECT THE TRANSFER TO THE COMPANY OF

 

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THE EQUIPMENT LEASES SET FORTH IN SECTION 5.10(D) OF THE SELLER DISCLOSURE
LETTER.  IN THE EVENT THAT ANY EQUIPMENT LEASE CANNOT BE SO TRANSFERRED,
PURCHASER SHALL CAUSE THE COMPANY TO REIMBURSE SELLER FOR THE PAYMENTS UNDER
SUCH LEASE.

 

5.11                           OTHER MATTERS.

 

(A)                                  AFTER THE CLOSING, PURCHASER SHALL, AND
SHALL CAUSE THE COMPANY AND ITS SUBSIDIARIES TO TAKE THE FOLLOWING ACTIONS:

 

(I)                           FULLY COOPERATE WITH SELLER IN CONNECTION WITH
SELLER’S DEFENSE OF THE TAX AUDITS AND INVESTIGATIONS SET FORTH IN
SECTION 1.3(C) OF THE SELLER DISCLOSURE LETTER, IN EACH CASE INCLUDING (I)
MAINTAINING RELEVANT BOOKS AND RECORDS OF THE COMPANY AND ITS SUBSIDIARIES AND
OTHER DATA, IN EACH CASE AS REASONABLY REQUIRED FOR PROSECUTION AND/OR DEFENSE
OF SUCH CLAIMS, (II) PERMITTING SELLER OR ITS AGENTS, AT SELLER’S EXPENSE,
DURING REGULAR BUSINESS HOURS AND AFTER PROVISION OF REASONABLE ADVANCE NOTICE,
TO INSPECT AND MAKE COPIES OF SUCH RECORDS FOR THE SOLE PURPOSE OF PROSECUTING
AND/OR DEFENDING SUCH CLAIMS (IT BEING UNDERSTOOD THAT SUCH COPIES SHALL BE
SUBJECT TO SECTION 5.2(A)(II) HERETO), AND (III) MAKING AVAILABLE, AT SELLER’S
EXPENSE, EMPLOYEES, CONTRACTORS AND OTHER AGENTS OF THE COMPANY AND ITS
SUBSIDIARIES FOR THE GIVING OF INTERVIEWS, DEPOSITIONS AND OTHER TESTIMONY, AS
REASONABLY NEEDED, IN CONNECTION WITH SELLER PROSECUTION AND/OR DEFENSE OF SUCH
CLAIMS; AND

 

(II)                        USE COMMERCIALLY REASONABLE EFFORTS TO DILIGENTLY
PROSECUTE THE PATENT CLAIMS, INCLUDING, WITHOUT LIMITATION, THE ACTIONS, OR
POTENTIAL ACTIONS, AGAINST THE PARTIES IDENTIFIED ON SECTION 5.11(A)(II) OF THE
SELLER DISCLOSURE LETTER.  IN PROSECUTING THE PATENT CLAIMS, PURCHASER SHALL
CAUSE THE COMPANY TO PROVIDE SELLER WITH TIMELY WRITTEN REPORTS OF MATERIAL
DEVELOPMENTS IN ANY OF THE PENDING PATENT CLAIMS, INCLUDING PROVIDING WRITTEN
NOTICE WITHIN FIVE (5) BUSINESS DAYS FOLLOWING THE INSTITUTION OF LITIGATION OR
ARBITRATION PROCEEDINGS OR THE SETTLEMENT OF ANY PATENT CLAIM.  ADDITIONALLY,
PURCHASER SHALL CAUSE THE COMPANY TO PROVIDE A WRITTEN REPORT ONCE EVERY SIX
MONTHS (DUE EACH JUNE 30 AND DECEMBER 31, COMMENCING JUNE 30, 2005) SUMMARIZING
ALL PENDING PATENT CLAIMS AND ALL ACTIONS TAKEN WITH RESPECT TO SUCH CLAIMS IN
THE PRIOR SIX-MONTH PERIOD AGAINST THE THIRD PARTIES IDENTIFIED IN
SECTION 5.11(A)(II) OF THE SELLER DISCLOSURE LETTER.  SELLER SHALL PAY, ON A
QUARTERLY BASIS, FIFTY PERCENT (50%) OF THE COMPANY’S OUT-OF POCKET COSTS AND
EXPENSES INCURRED BY THE COMPANY AFTER THE CLOSING DATE IN CONNECTION WITH
PROSECUTING THE PATENT CLAIMS; PROVIDED THAT PURCHASER OR THE COMPANY SHALL HAVE
PROVIDED REASONABLE SUPPORTING DOCUMENTATION IN WRITING TO SELLER.  IF PURCHASER
AND THE COMPANY MAKE A REASONABLE DETERMINATION, ACTING IN GOOD FAITH, NOT TO
PROSECUTE FOR PRUDENT BUSINESS REASONS ONE OR MORE OF THE PATENT CLAIMS SET
FORTH ON SECTION 5.11(A)(II) OF THE SELLER DISCLOSURE LETTER, PURCHASER AND THE
COMPANY SHALL, WITHIN FIVE (5) BUSINESS DAYS, PROVIDE SELLER WITH WRITTEN
NOTIFICATION OF SUCH DETERMINATION, INCLUDING PROVIDING A DESCRIPTION IN
REASONABLE DETAIL OF THE BASIS FOR SUCH DETERMINATION.  “PRUDENT BUSINESS
REASONS” SHALL INCLUDE, BUT NOT BE LIMITED TO, PURCHASER’S GOOD FAITH JUDGMENT
THAT THE OUT-OF-POCKET COSTS AND/OR ANY PROFIT OR OTHER VALUE ANTICIPATED TO BE
LOST FROM PROSECUTING ANY SUCH PATENT CLAIMS EXCEEDS THE ESTIMATED VALUE OF ANY
SETTLEMENT, JUDGMENT OR OTHER RECOVERY REASONABLY EXPECTED TO BE DERIVED
THEREFROM.  NOTWITHSTANDING THE FOREGOING, “PRUDENT BUSINESS REASONS” SHALL IN
NO EVENT INCLUDE CONSIDERATION OF ANY BENEFITS (FINANCIAL OR OTHERWISE) DERIVED
OR COSTS INCURRED BY ANY AFFILIATE OF ANY SHAREHOLDER OF PURCHASER (OTHER THAN
THE COMPANY AND ITS SUBSIDIARIES) ARISING OUT OF OR RELATING TO THE PROSECUTION
OF ANY PATENT CLAIMS.

 

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(B)                                 PURCHASER AND SELLER SHALL REASONABLY
COOPERATE, AND SHALL CAUSE THEIR RESPECTIVE AFFILIATES, OFFICERS, AGENTS,
EMPLOYEES AND OTHER REPRESENTATIVES TO REASONABLY COOPERATE IN CONNECTION WITH
RESPONDING TO ANY INVESTIGATION OR REPORT ONGOING AFTER THE CLOSING DATE,
INCLUDING ANY INVESTIGATION RELATING TO ENVIRONMENTAL OR TAX MATTERS, INITIATED
OR UNDERTAKEN BY ANY GOVERNMENTAL ENTITY.

 

(C)                                  SELLER SHALL, FOR A PERIOD OF TWO YEARS
FROM THE CLOSING DATE, MAINTAIN RELEVANT BOOKS AND RECORDS MATERIALLY RELATING
TO THE COMPANY OR ITS SUBSIDIARIES AND SHALL PERMIT THE COMPANY OR ITS AGENTS,
AT THE COMPANY’S EXPENSE, DURING REGULAR BUSINESS HOURS AND AFTER PROVISION OF
REASONABLE ADVANCE NOTICE, TO INSPECT AND MAKE COPIES OF SUCH RECORDS AS
REASONABLY NEEDED IN CONNECTION WITH OPERATION OF THE COMPANY’S BUSINESS.

 

5.12                           FINANCING.

 

(A)                                  PURCHASER AGREES TO USE ITS REASONABLE BEST
EFFORTS TO OBTAIN THE DEBT FINANCING PRIOR TO THE CLOSING DATE AND ON
SUBSTANTIALLY THE TERMS SET FORTH IN THE COMMITMENT LETTER, TO KEEP THE SELLER
REASONABLY INFORMED ON THE STATUS OF ITS EFFORTS TO OBTAIN THE DEBT FINANCING
AND TO NOT PERMIT ANY AMENDMENT OR MODIFICATION TO THE COMMITMENT LETTER THAT
WOULD REASONABLY BE EXPECTED TO MATERIALLY HINDER OR DELAY THE RECEIPT OF THE
DEBT FINANCING UPON THE TERMS SET FORTH IN THE COMMITMENT LETTER AS OF THE DATE
HEREOF WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY (NOT TO BE UNREASONABLY
WITHHELD OR DELAYED).

 

(B)                                 SELLER WILL CAUSE THE COMPANY, ITS
SUBSIDIARIES AND THE RESPECTIVE OFFICERS, EMPLOYEES, ACCOUNTANTS, ATTORNEYS AND
ADVISERS OF THE COMPANY AND ITS SUBSIDIARIES, IN EACH CASE, TO PROVIDE
REASONABLE AND CUSTOMARY COOPERATION IN CONNECTION WITH THE ARRANGEMENT OF THE
DEBT FINANCING AND ANY OTHER FINANCING TO BE CONSUMMATED CONTEMPORANEOUSLY WITH
THE CLOSING IN RESPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
INCLUDING (I) PARTICIPATION IN MEETINGS, DUE DILIGENCE SESSIONS AND ROAD SHOWS,
(II) THE PREPARATION OF OFFERING MEMORANDA, PRIVATE PLACEMENT MEMORANDA,
PROSPECTUSES AND SIMILAR DOCUMENTS, AND (III) THE EXECUTION AND DELIVERY OF ANY
COMMITMENT OR FINANCING LETTERS, UNDERWRITING, PURCHASE OR PLACEMENT AGREEMENTS,
PLEDGE AND SECURITY DOCUMENTS, OTHER DEFINITIVE FINANCING DOCUMENTS, OR OTHER
REQUESTED CERTIFICATES OR DOCUMENTS AS MAY BE REASONABLY REQUESTED BY PURCHASER;
PROVIDED, HOWEVER THAT THE TERMS AND CONDITIONS OF SUCH FINANCING MAY NOT
REQUIRE THE PAYMENT OF ANY COMMITMENT OR OTHER FEES BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR THE INCURRENCE OF ANY LIABILITIES BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES PRIOR TO THE CLOSING.

 

(C)                                  IN ORDER TO PROVIDE FINANCIAL STATEMENTS
NECESSARY TO CONSUMMATE THE DEBT FINANCING, SELLER SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO, OR TO CAUSE THE COMPANY TO: (I) PREPARE AND DELIVER TO
PURCHASER FINANCIAL STATEMENTS IN ACCORDANCE WITH GAAP FOR THE NINE MONTH
PERIODS ENDED OCTOBER 31, 2004 AND 2003 (THE “OCTOBER FINANCIAL STATEMENTS”),
(II) CAUSE THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS TO (X) PERFORM THE
PROCEDURES SPECIFIED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
FOR A REVIEW OF FINANCIAL INFORMATION AS DESCRIBED IN SAS 100, INTERIM FINANCIAL
INFORMATION, WITH RESPECT TO THE OCTOBER FINANCIAL STATEMENTS (OR, IF REQUESTED
BY THE PURCHASER, THE UNAUDITED FINANCIAL STATEMENTS) AND (Y) PREPARE AND
DELIVER TO THE UNDERWRITERS ANY CUSTOMARY COMFORT LETTERS REASONABLY REQUESTED
BY PURCHASER, (III) OBTAIN THE CONSENT OF SELLER’S INDEPENDENT PUBLIC
ACCOUNTANTS, WHEN REQUIRED, WITH RESPECT TO THE AUDITED FINANCIAL STATEMENTS, AT
PURCHASER’S EXPENSE, SO THAT THE AUDITED

 

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FINANCIAL STATEMENTS CAN BE USED IN RULE 144A OFFERING MEMORANDA ISSUED BY
PURCHASER OR ONE OF ITS AFFILIATES, AND (IV) COOPERATE WITH PURCHASER SO
PURCHASER CAN OBTAIN INFORMATION SUFFICIENT FOR PURCHASER TO COMPLY WITH THE
REQUIREMENTS FOR THE MANAGEMENT’S DISCUSSION AND ANALYSIS PORTION OF ANY RULE
144A OFFERING MEMORANDA (IN CONFORMITY WITH SEC RULES).

 

ARTICLE VI

CONDITIONS PRECEDENT TO THE PARTIES’ PERFORMANCE

 

6.1                                 CONDITIONS TO THE PERFORMANCE OF EACH
PARTY.  THE RESPECTIVE OBLIGATIONS OF EACH PARTY TO THIS AGREEMENT TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE SUBJECT TO THE
SATISFACTION AT OR PRIOR TO THE CLOSING DATE OF THE FOLLOWING CONDITIONS:

 

(A)                                  NO ORDER.  NO GOVERNMENTAL ENTITY OF
COMPETENT JURISDICTION SHALL HAVE ENACTED, ISSUED, PROMULGATED, ENFORCED OR
ENTERED ANY STATUTE, RULE, REGULATION, EXECUTIVE ORDER, DECREE, INJUNCTION OR
OTHER ORDER WHICH (I) IS IN EFFECT AND (II) HAS THE EFFECT OF MAKING THE
TRANSACTIONS CONTEMPLATED HEREBY ILLEGAL.

 

(B)                                 ANTITRUST APPROVALS; NECESSARY CONSENTS. THE
WAITING PERIOD (AND ANY EXTENSION THEREOF) UNDER THE HSR ACT RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE EXPIRED OR TERMINATED EARLY, ALL
FOREIGN ANTITRUST APPROVALS LISTED IN SECTION 6.1(B) OF THE SELLER DISCLOSURE
LETTER SHALL HAVE BEEN OBTAINED AND THE NECESSARY CONSENTS SHALL HAVE BEEN
OBTAINED.

 

6.2                                 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF
SELLER.  THE OBLIGATION OF SELLER TO CONSUMMATE AND EFFECT THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT SHALL BE SUBJECT TO THE SATISFACTION AT OR PRIOR
TO THE CLOSING DATE OF EACH OF THE FOLLOWING CONDITIONS, ANY OF WHICH MAY BE
WAIVED, IN WRITING, EXCLUSIVELY BY SELLER:

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF PURCHASER CONTAINED IN THIS AGREEMENT SHALL BE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR SUCH REPRESENTATIONS AND
WARRANTIES QUALIFIED BY MATERIALITY OR MATERIAL ADVERSE EFFECT, WHICH SHALL BE
TRUE AND CORRECT IN ALL RESPECTS) ON THE DATE HEREOF AND AS OF THE CLOSING DATE
WITH THE SAME FORCE AND EFFECT AS IF MADE ON THE CLOSING DATE (EXCEPT THAT THOSE
REPRESENTATIONS AND WARRANTIES THAT ADDRESS MATTERS ONLY AS OF A PARTICULAR DATE
SHALL HAVE BEEN TRUE AND CORRECT ONLY ON SUCH DATE).  SELLER SHALL HAVE RECEIVED
A CERTIFICATE WITH RESPECT TO THE FOREGOING SIGNED ON BEHALF OF PURCHASER BY AN
AUTHORIZED EXECUTIVE OFFICER OF PURCHASER.

 

(B)                                 AGREEMENTS AND COVENANTS.  PURCHASER SHALL
HAVE PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL AGREEMENTS AND
COVENANTS REQUIRED BY THIS AGREEMENT TO BE PERFORMED OR COMPLIED WITH BY IT ON
OR PRIOR TO THE CLOSING DATE.  SELLER SHALL HAVE RECEIVED A CERTIFICATE WITH
RESPECT TO THE FOREGOING SIGNED ON BEHALF OF PURCHASER BY AN AUTHORIZED
EXECUTIVE OFFICER OF PURCHASER.

 

(C)                                  TRANSITION SERVICES AGREEMENT.  PURCHASER
SHALL HAVE EXECUTED AND DELIVERED TO SELLER THE TRANSITION SERVICES AGREEMENT.

 

(D)                                 DIRECTORS’ AND OFFICERS’ LIABILITY
INSURANCE.  PURCHASER SHALL HAVE PRESENTED DOCUMENTATION THAT IT HAS OBTAINED,
OR CAUSED THE COMPANY TO OBTAIN EFFECTIVE AS OF THE CLOSING, AT THE SOLE COST
AND EXPENSE OF THE PURCHASER OR, AFTER THE CLOSING, THE COMPANY,

 

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LIABILITY INSURANCE FOR THE BENEFIT OF ALL PAST AND PRESENT DIRECTORS AND
OFFICERS OF THE COMPANY COVERING MATTERS OCCURRING PRIOR TO THE CLOSING DATE. 
SUCH INSURANCE POLICY SHALL HAVE POLICY LIMITS OF AT LEAST TWENTY-FIVE MILLION
DOLLARS ($25,000,000) PER INCIDENT, BE FULLY PAID, AND SHALL REMAIN IN FORCE AND
BE NON-CANCELABLE FOR A PERIOD OF 6 YEARS FROM THE CLOSING DATE, WITH OTHER
COVERAGE TERMS AND DEDUCTIBLES COMPARABLE TO THE COVERAGE PROVIDED TO THE
COMPANY’S DIRECTORS AND OFFICERS AS OF THE DATE OF THIS AGREEMENT; PROVIDED,
HOWEVER, THAT PURCHASER SHALL NOT BE REQUIRED TO CAUSE TO BE MAINTAINED SUCH
LIABILITY INSURANCE POLICIES TO THE EXTENT THE AGGREGATE COST OF MAINTAINING
SUCH POLICIES EXCEEDS FOUR HUNDRED THOUSAND DOLLARS ($400,000), IN WHICH CASE
THE PURCHASER SHALL ONLY BE REQUIRED TO CAUSE TO BE MAINTAINED A LIABILITY
INSURANCE POLICY WITH THE GREATEST POLICY LIMITS THEN REASONABLY AVAILABLE AT
SUCH COST.

 

(E)                                  LENDERS’ CONSENT. SELLER SHALL HAVE
OBTAINED THE PRIOR WRITTEN CONSENT OF J.P. MORGAN CHASE BANK UNDER THAT CERTAIN
(I) CREDIT AGREEMENT (MULTI-YEAR FACILITY), DATED AS OF JULY 28, 2004, AMONG
SELLER AND J.P. MORGAN CHASE BANK, AS ADMINISTRATIVE AGENT, CITICORP USA, INC.,
AS SYNDICATION AGENT, MORGAN STANLEY BANK, WACHOVIA BANK, N.A., THE ROYAL BANK
OF SCOTLAND PLC, AS CO-DOCUMENTATION AGENTS, AND THE LENDERS PARTY THERETO, AND
(II) AMENDED AND RESTATED CREDIT AGREEMENT (MULTI-YEAR FACILITY), DATED AS OF
JULY 28, 2004, AMONG SELLER AND J.P. MORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CITICORP USA, INC., AS SYNDICATION AGENT, MORGAN STANLEY BANK, WACHOVIA BANK,
N.A., THE ROYAL BANK OF SCOTLAND PLC, AS CO-DOCUMENTATION AGENTS AND THE LENDERS
PARTY THERETO (THE “LENDERS’ CONSENT”).

 

6.3                                 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF
PURCHASER.  THE OBLIGATIONS OF PURCHASER TO CONSUMMATE AND COMPLETE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE SUBJECT TO THE SATISFACTION
AT OR PRIOR TO THE CLOSING DATE OF EACH OF THE FOLLOWING CONDITIONS, ANY OF
WHICH MAY BE WAIVED, IN WRITING, EXCLUSIVELY BY PURCHASER:

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT SHALL BE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR SUCH REPRESENTATIONS AND
WARRANTIES QUALIFIED BY MATERIALITY, WHICH SHALL BE TRUE AND CORRECT IN ALL
RESPECTS) ON THE DATE HEREOF AND AS OF THE CLOSING DATE WITH THE SAME FORCE AND
EFFECT AS IF MADE ON THE CLOSING DATE (EXCEPT THAT THOSE REPRESENTATIONS AND
WARRANTIES THAT ADDRESS MATTERS ONLY AS OF A PARTICULAR DATE SHALL HAVE BEEN
TRUE AND CORRECT ONLY ON SUCH DATE).  PURCHASER SHALL HAVE RECEIVED A
CERTIFICATE WITH RESPECT TO THE FOREGOING SIGNED ON BEHALF OF SELLER BY AN
AUTHORIZED EXECUTIVE OFFICER OF SELLER.

 

(B)                                 AGREEMENTS AND COVENANTS.  SELLER SHALL HAVE
PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL AGREEMENTS AND COVENANTS
REQUIRED BY THIS AGREEMENT TO BE PERFORMED OR COMPLIED WITH BY IT AT OR PRIOR TO
THE CLOSING DATE.  PURCHASER SHALL HAVE RECEIVED A CERTIFICATE TO SUCH EFFECT
SIGNED ON BEHALF OF SELLER BY AN AUTHORIZED EXECUTIVE OFFICER OF SELLER.

 

(C)                                  TRANSITION SERVICES AGREEMENT.  SELLER
SHALL HAVE EXECUTED AND DELIVERED TO PURCHASER THE TRANSITION SERVICES
AGREEMENT.

 

(D)                                 RESIGNATIONS OF CERTAIN DIRECTORS.  SELLER
SHALL HAVE DELIVERED TO PURCHASER EXECUTED RESIGNATIONS OF EACH OF THE DIRECTORS
OF THE COMPANY AND EACH SUBSIDIARY OTHER THAN THOSE DIRECTORS OF THE COMPANY AND
EACH SUBSIDIARY WHO ARE EMPLOYEES OF THE COMPANY.

 

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(E)                                  CORPORATE RECORDS.  SELLER SHALL HAVE
DELIVERED TO PURCHASER (I) A CERTIFICATE OR CERTIFICATES REPRESENTING THE
SHARES, TOGETHER WITH A STOCK POWER OR STOCK POWERS DULY EXECUTED IN BLANK, AND
(II) ALL OF THE OTHER MINUTE BOOKS AND STOCK LEDGERS AND CERTIFICATES FOR THE
COMPANY AND EACH SUBSIDIARY, EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING IN
THIS CLAUSE (II) ARE IN THE POSSESSION OF COMPANY OR THE SUBSIDIARIES.

 

(F)                                    NONCOMPETITION AGREEMENT.  SELLER SHALL
HAVE EXECUTED AND DELIVERED TO PURCHASER A NONCOMPETITION AGREEMENT IN THE FORM
ATTACHED HERETO AS EXHIBIT B (THE “NONCOMPETITION AGREEMENT”).

 

(G)                                 DEBT FINANCING.  THE CONDITIONS OF THE DEBT
FINANCING AS SET FORTH IN THE COMMITMENT LETTER SHALL HAVE BEEN SATISFIED IN
FULL OR WAIVED, AND THE DEBT FINANCING SHALL HAVE BEEN PROVIDED OR MADE
AVAILABLE TO THE COMPANY AND/OR PURCHASER ON THE TERMS SET FORTH IN THE
COMMITMENT LETTER (AND, TO THE EXTENT SUCH TERMS ARE NOT SET FORTH IN THE
COMMITMENT LETTER, ON TERMS THAT ARE REASONABLY SATISFACTORY TO PURCHASER).

 

(H)                                 NO MATERIAL ADVERSE CHANGE. THERE SHALL HAVE
BEEN NO CHANGE, EVENT OR EFFECT THAT SHALL HAVE OCCURRED THAT HAS HAD OR, OR
THAT IS REASONABLY LIKELY TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL
ADVERSE EFFECT OF THE COMPANY.

 

ARTICLE VII

INDEMNIFICATION

 

7.1                                 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. 
ALL REPRESENTATIONS AND WARRANTIES OF THE PARTIES CONTAINED IN ARTICLE II OR III
OF THIS AGREEMENT OR IN ANY COMPLIANCE CERTIFICATE DELIVERED PURSUANT TO
SECTIONS 6.2(A) OR 6.3(A) SHALL SURVIVE UNTIL FIFTEEN (15) MONTHS AFTER THE
CLOSING DATE; PROVIDED, HOWEVER, THAT THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN (I) SECTION 2.6 (TAXES) OF THIS AGREEMENT SHALL SURVIVE THE CLOSING
UNTIL THIRTY (30) DAYS AFTER THE EXPIRATION OF THE APPLICABLE STATUTE OF
LIMITATIONS APPLICABLE TO THE MATTERS COVERED THEREBY (GIVING EFFECT TO ANY
WAIVER, MITIGATION OR EXTENSION THEREOF), (II) SECTIONS 2.10 (EMPLOYEE BENEFITS
PLANS) AND 2.12 (ENVIRONMENTAL MATTERS) OF THIS AGREEMENT SHALL SURVIVE UNTIL
THE THIRD ANNIVERSARY OF THE CLOSING DATE, (III) SECTION 2.7 (INTELLECTUAL
PROPERTY) SHALL SURVIVE UNTIL THE SECOND ANNIVERSARY OF THE CLOSING DATE, AND
(IV) SECTIONS 2.1(A) (ORGANIZATION; STANDING AND POWER), 2.1(C) (SUBSIDIARIES),
2.2 (CAPITAL STRUCTURE), 2.3(A) (AUTHORITY), 3.1(A) (ORGANIZATION; STANDING AND
POWER) AND 3.2(A) (AUTHORITY) SHALL SURVIVE THE CLOSING INDEFINITELY (THE
“INDEFINITELY SURVIVING REPRESENTATIONS”). THE TERMINATION OF REPRESENTATIONS
AND WARRANTIES PROVIDED HEREIN SHALL NOT AFFECT THE RIGHTS OF ANY INDEMNIFIED
PARTY IN RESPECT OF ANY CLAIM MADE BY SUCH INDEMNIFIED PARTY IN A CLAIM NOTICE
RECEIVED BY THE OTHER PARTY PURSUANT TO AND IN COMPLIANCE WITH THE PROVISIONS OF
THIS ARTICLE VII PRIOR TO THE EXPIRATION DATE SPECIFIED ABOVE. ALL COVENANTS AND
AGREEMENTS THAT BY THEIR TERMS ARE TO PERFORMED AFTER THE CLOSING SHALL EXPIRE
UPON THE COMPLETION OF PERFORMANCE OR WAIVER THEREOF.

 

7.2                                 INDEMNIFICATION BY SELLER.  SUBJECT IN ALL
CASES TO THE LIMITATIONS SET FORTH IN THIS ARTICLE VII (INCLUDING, WITHOUT
LIMITATION, THE LIMITATIONS SET FORTH IN SECTION 7.6), NOTWITHSTANDING ANY
INVESTIGATION OR INQUIRY BY PURCHASER OR ANY OF ITS REPRESENTATIVES OR
AFFILIATES, SELLER SHALL INDEMNIFY, SAVE AND HOLD HARMLESS PURCHASER AND ITS
AFFILIATES (INCLUDING, AFTER THE CLOSING, THE COMPANY AND THE SUBSIDIARIES) AND
THEIR RESPECTIVE DIRECTORS, OFFICERS,

 

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EMPLOYEES, SHAREHOLDERS, AGENTS AND REPRESENTATIVES (COLLECTIVELY, THE
“PURCHASER INDEMNIFIED PARTIES”) FROM AND AGAINST AND IN RESPECT OF ALL CLAIMS,
COSTS, LIABILITIES, OBLIGATIONS, FINES, PENALTIES, AWARDS, DAMAGES, LOSSES AND
EXPENSES (INCLUDING REASONABLE ATTORNEY’S FEES AND EXPENSES) (“LOSSES”) ARISING
OUT OF OR RESULTING FROM ANY:

 

(A)                                  BREACH OF, OR INACCURACY IN, ANY
REPRESENTATION OR WARRANTY CONTAINED IN ARTICLE II OF THIS AGREEMENT (OTHER THAN
THOSE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 2.6, WHICH SHALL BE
GOVERNED BY SECTION 7.8) OR THE COMPLIANCE CERTIFICATE DELIVERED BY SELLER
PURSUANT TO SECTION 6.3(A),

 

(B)                                 BREACH OR FAILURE TO PERFORM BY SELLER OF
ANY COVENANT, AGREEMENT OR OBLIGATION OF SELLER CONTAINED IN THIS AGREEMENT,

 

(C)                                  LIABILITIES FOR TAXES DESCRIBED IN
SECTION 7.8(A) BELOW,

 

(D)                                 MATTERS DESCRIBED IN SECTION 7.2(D) OF THE
SELLER DISCLOSURE LETTER (THE “EXCLUDED CLAIMS”), AND

 

(E)                                  LOSSES ARISING OUT OF, OR RELATING TO, ANY
CLAIM INITIATED BY OR ON BEHALF OF ANY STOCKHOLDER OF SELLER, SOLELY IN HIS OR
HER CAPACITY AS A STOCKHOLDER OF SELLER, AGAINST A COMPANY INDEMNIFIED PARTY.

 

7.3                                 INDEMNIFICATION BY PURCHASER.  SUBJECT IN
ALL CASES TO THE LIMITATIONS SET FORTH IN THIS ARTICLE VII (INCLUDING, WITHOUT
LIMITATION, THE LIMITATIONS SET FORTH IN SECTION 7.6), PURCHASER SHALL
INDEMNIFY, SAVE AND HOLD HARMLESS SELLER AND ITS AFFILIATES AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, SHAREHOLDERS, AGENTS AND REPRESENTATIVES
(COLLECTIVELY, THE “SELLER INDEMNIFIED PARTIES”) FROM AND AGAINST AND IN RESPECT
OF ALL LOSSES ARISING OUT OF OR RESULTING FROM ANY:

 

(A)                                  BREACH OF, OR INACCURACY IN, ANY
REPRESENTATION OR WARRANTY CONTAINED IN ARTICLE III OF THIS AGREEMENT OR THE
COMPLIANCE CERTIFICATE DELIVERED BY PURCHASER PURSUANT TO SECTION 6.2(A),

 

(B)                                 BREACH OR FAILURE TO PERFORM BY PURCHASER OF
ANY COVENANT, AGREEMENT OR OBLIGATION OF PURCHASER CONTAINED IN THIS AGREEMENT,

 

(C)                                  LIABILITIES FOR TAXES DESCRIBED IN
SECTION 7.8(B) BELOW,

 

(D)                                 OBLIGATIONS OF SELLER OR ITS AFFILIATES
UNDER THE REMAINING GUARANTIES, AND

 

(E)                                  INSURANCE DEDUCTIBLES OR RETENTIONS PAID BY
OR ON BEHALF OF SELLER AFTER THE CLOSING DATE IN CONNECTION WITH CLAIMS HAVING A
DATE OF OCCURRENCE PRIOR TO THE CLOSING DATE AND REPORTED BY OR ON BEHALF OF THE
COMPANY OR ANY OF THE SUBSIDIARIES UNDER INSURANCE POLICIES MAINTAINED BY
SELLER, INCLUDING, WITHOUT LIMITATION, GENERAL LIABILITY, AUTOMOBILE LIABILITY
AND WORKER’S COMPENSATION.

 

7.4                                 PROCEDURE FOR CLAIMS BETWEEN PARTIES.  IF A
CLAIM FOR LOSSES IS TO BE MADE BY A PERSON ENTITLED TO INDEMNIFICATION HEREUNDER
(AN “INDEMNIFIED PARTY”), THE INDEMNIFIED PARTY

 

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SHALL GIVE WRITTEN NOTICE (A “CLAIM NOTICE”) TO THE PARTY REQUIRED TO PROVIDE
SUCH INDEMNIFICATION (THE “INDEMNIFYING PARTY”) AS SOON AS PRACTICABLE (AND IN
ANY EVENT WITHIN FIVE (5) BUSINESS DAYS) AFTER THE INDEMNIFIED PARTY BECOMES
AWARE THAT A PARTICULAR FACT, CONDITION OR EVENT MAY GIVE RISE TO LOSSES FOR
WHICH INDEMNIFICATION MAY BE SOUGHT UNDER THIS ARTICLE VII, OTHER THAN WITH
RESPECT TO LOSSES RELATED TO TAXES (WHICH SHALL BE GOVERNED BY SECTION 7.8
BELOW).  ANY FAILURE TO SUBMIT ANY SUCH CLAIM NOTICE IN A TIMELY MANNER TO THE
INDEMNIFYING PARTY SHALL NOT RELIEVE THE INDEMNIFYING PARTY OF ANY LIABILITY
HEREUNDER, EXCEPT TO THE EXTENT (AND ONLY TO THE EXTENT) THE INDEMNIFYING PARTY
IS ACTUALLY PREJUDICED BY SUCH FAILURE.  EACH CLAIM NOTICE SHALL SET FORTH (I)
THE SPECIFIC REPRESENTATION, WARRANTY OR COVENANT ALLEGED TO HAVE BEEN BREACHED,
(II) THE NATURE AND AMOUNT OF THE CLAIM ASSERTED, TOGETHER WITH SUFFICIENT FACTS
RELATING THERETO, TO THE EXTENT KNOWN BY THE INDEMNIFIED PARTY, SO THAT THE
INDEMNIFYING PARTY MAY REASONABLY EVALUATE SUCH CLAIM, AND (III) A CALCULATION
OR GOOD FAITH ESTIMATE, IF SUCH CAN BE REASONABLY CALCULATED, OF THE AGGREGATE
LOSSES TO WHICH THE INDEMNIFIED PARTY BELIEVES IT IS ENTITLED IN CONNECTION WITH
THE CLAIM.  IF THE INDEMNIFYING PARTY, WITHIN TWENTY (20) BUSINESS DAYS AFTER
RECEIPT OF THE CLAIM NOTICE (THE “NOTICE PERIOD”), DOES NOT GIVE WRITTEN NOTICE
TO THE INDEMNIFIED PARTY OR PARTIES ANNOUNCING ITS INTENT TO CONTEST SUCH CLAIM,
THE CLAIM SHALL BE DEEMED ACCEPTED AND THE INDEMNIFYING PARTY SHALL, WITHIN TEN
(10) BUSINESS DAYS AFTER EXPIRATION OF THE NOTICE PERIOD, DELIVER TO THE
INDEMNIFIED PARTY THE AMOUNT OF LOSSES SET FORTH IN THE CLAIM NOTICE.  IN THE
EVENT, HOWEVER, THAT THE INDEMNIFYING PARTY OR PARTIES CONTEST THE ASSERTION OF
A CLAIM BY GIVING SUCH WRITTEN NOTICE TO THE INDEMNIFIED PARTY WITHIN THE NOTICE
PERIOD, THEN THE PARTIES SHALL ACT IN GOOD FAITH TO REACH AGREEMENT REGARDING
SUCH CLAIM.  IF THE PARTIES ARE UNABLE TO REACH AGREEMENT REGARDING ANY SUCH
CLAIM, THE RESOLUTION OF SUCH CLAIM SHALL BE DETERMINED IN A COURT PROCEEDING
CONDUCTED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 9.7(B).

 

7.5                                 DEFENSE OF THIRD PARTY CLAIMS.  OTHER THAN
TAX CLAIMS (WHICH SHALL BE GOVERNED BY SECTION 7.8), IF ANY LAWSUIT OR
ENFORCEMENT ACTION IS FILED AGAINST ANY INDEMNIFIED PARTY BY A THIRD PARTY,
WRITTEN NOTICE THEREOF WILL BE GIVEN TO THE INDEMNIFYING PARTY AS PROMPTLY AS
PRACTICABLE (AND IN ANY EVENT WITHIN FIVE (5) BUSINESS DAYS AFTER THE SERVICE OF
THE CITATION OR SUMMONS).  THE FAILURE OF ANY INDEMNIFIED PARTY TO GIVE TIMELY
NOTICE HEREUNDER WILL NOT AFFECT RIGHTS TO INDEMNIFICATION HEREUNDER, EXCEPT TO
THE EXTENT (AND ONLY TO THE EXTENT) THAT THE INDEMNIFYING PARTY IS ACTUALLY
MATERIALLY PREJUDICED BY SUCH FAILURE.  AFTER SUCH NOTICE, THE INDEMNIFYING
PARTY WILL BE ENTITLED, IF IT SO ELECTS, AT ITS OWN COST, RISK AND EXPENSE (I)
TO TAKE CONTROL OF THE DEFENSE AND INVESTIGATION OF SUCH LAWSUIT OR ACTION, (II)
TO EMPLOY AND ENGAGE ATTORNEYS OF ITS OWN CHOICE TO HANDLE AND DEFEND THE SAME
UNLESS THE NAMED PARTIES TO SUCH ACTION OR PROCEEDING INCLUDE BOTH THE
INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY AND THE INDEMNIFIED PARTY HAS BEEN
ADVISED IN WRITING BY COUNSEL THAT THERE MAY BE ONE OR MORE LEGAL DEFENSES
AVAILABLE TO SUCH INDEMNIFIED PARTY THAT ARE DIFFERENT FROM OR ADDITIONAL TO
THOSE AVAILABLE TO THE INDEMNIFYING PARTY, IN WHICH EVENT THE INDEMNIFIED PARTY
WILL BE ENTITLED, AT THE INDEMNIFYING PARTY’S COST, RISK AND EXPENSE, TO
SEPARATE COUNSEL OF ITS OWN CHOOSING, AND (III) TO COMPROMISE OR SETTLE SUCH
CLAIM, PROVIDED SUCH COMPROMISE OR SETTLEMENT PROVIDES SOLELY A MONETARY
SETTLEMENT WITH AN UNCONDITIONAL RELEASE OF THE INDEMNIFIED PARTY AND DOES NOT
INCLUDE AN ADMISSION OF LIABILITY.  THE INDEMNIFIED PARTY WILL COOPERATE WITH
THE INDEMNIFYING PARTY AND ITS ATTORNEYS IN THE INVESTIGATION, TRIAL AND DEFENSE
OF SUCH LAWSUIT OR ACTION AND ANY APPEAL ARISING THEREFROM WHICH COOPERATION
WILL INCLUDE, TO THE EXTENT REASONABLY REQUESTED BY THE INDEMNIFYING PARTY, THE
RETENTION, AND THE PROVISION TO THE INDEMNIFYING PARTY, OF RECORDS AND
INFORMATION REASONABLY RELEVANT TO SUCH THIRD-PARTY CLAIM, AND MAKING EMPLOYEES
OF THE INDEMNIFIED PARTY AND ITS AFFILIATES AVAILABLE ON A MUTUALLY CONVENIENT
BASIS TO PROVIDE ADDITIONAL

 

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INFORMATION AND EXPLANATION OF ANY MATERIALS PROVIDED HEREUNDER.  THE
INDEMNIFIED PARTY SHALL HAVE THE RIGHT BUT NOT THE OBLIGATION TO PARTICIPATE AT
ITS OWN EXPENSE IN THE DEFENSE THEREOF BY COUNSEL OF THE INDEMNIFIED PARTY’S
CHOICE. THE PARTIES WILL COOPERATE WITH EACH OTHER IN ANY NOTIFICATIONS TO
INSURERS.  IF THE INDEMNIFYING PARTY FAILS TO ASSUME THE DEFENSE OF SUCH CLAIM
WITHIN FIFTEEN (15) CALENDAR DAYS AFTER RECEIPT OF THE CLAIM NOTICE, THE
INDEMNIFIED PARTY AGAINST WHICH CLAIM HAS BEEN ASSERTED WILL (UPON DELIVERING
NOTICE TO SUCH EFFECT TO THE INDEMNIFYING PARTY) HAVE THE RIGHT TO UNDERTAKE, AT
THE INDEMNIFYING PARTY’S COST, RISK AND EXPENSE, THE DEFENSE, COMPROMISE OR
SETTLEMENT OF SUCH CLAIM ON BEHALF OF AND FOR THE ACCOUNT AND RISK OF THE
INDEMNIFYING PARTY; PROVIDED, HOWEVER, THAT SUCH CLAIM WILL NOT BE COMPROMISED
OR SETTLED WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFYING PARTY, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD.  IF THE INDEMNIFIED PARTY ASSUMES
THE DEFENSE OF THE CLAIM, THE INDEMNIFIED PARTY WILL KEEP THE INDEMNIFYING PARTY
REASONABLY INFORMED OF THE PROGRESS OF ANY SUCH DEFENSE, COMPROMISE OR
SETTLEMENT.  THE INDEMNIFYING PARTY WILL BE LIABLE FOR ANY SETTLEMENT OF ANY
ACTION EFFECTED PURSUANT TO AND IN ACCORDANCE WITH THIS SECTION 7.5 AND ANY
FINAL JUDGMENT (SUBJECT TO ANY RIGHT OF APPEAL), AND THE INDEMNIFYING PARTY WILL
INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTY FROM AND AGAINST ANY LOSSES BY
REASON OF ANY SUCH SETTLEMENT OR JUDGMENT.  NO INDEMNIFIED PARTY WILL TAKE ANY
ACTION THE PURPOSE OF WHICH IS TO PREJUDICE THE DEFENSE OF ANY CLAIM SUBJECT TO
INDEMNIFICATION HEREUNDER. NOTWITHSTANDING THE FOREGOING, AN INDEMNIFIED PARTY
SHALL HAVE THE RIGHT TO JOINTLY CONTROL THE DEFENSE OF ANY CLAIM SUBJECT TO
INDEMNIFICATION HEREUNDER IN THE EVENT THE POTENTIAL LOSSES WITH RESPECT TO SUCH
THIRD PARTY CLAIM, WHEN AGGREGATED WITH ALL OTHER SATISFIED OR PENDING LOSSES
SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 7.2(I) HEREOF, EXCEED THE LIMITS
SET FORTH IN SECTION 7.6(A), PROVIDED, HOWEVER, THAT IN SUCH CASE, NEITHER THE
INDEMNIFYING PARTY NOR THE INDEMNIFIED PARTY MAY COMPROMISE OR SETTLE SUCH
CLAIMS WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY, WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD.

 

(B)                                 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, WITH RESPECT TO THE DEFENSE OF THE TAX AUDITS AND
INVESTIGATIONS SET FORTH IN SECTION 1.3(C) OF THE SELLER DISCLOSURE LETTER AND
THE DEFENSE AND PROSECUTION OF THE TSA LITIGATION AFTER THE CLOSING DATE, (I)
SELLER SHALL CONTROL THE DEFENSE AND/OR PROSECUTION OF SUCH MATTERS AT SELLER’S
OWN COST, RISK AND EXPENSE, (II) SELLER SHALL EMPLOY AND ENGAGE ATTORNEYS AND
ANY OTHER ADVISERS OF ITS OWN CHOICE TO HANDLE AND DEFEND THE SAME, (III) SELLER
SHALL BE ENTITLED, EXCEPT AS PROVIDED IN THE FOLLOWING SENTENCE, TO COMPROMISE
OR SETTLE SUCH MATTERS IN ITS SOLE DISCRETION, AND (IV) PURCHASER SHALL
REASONABLY COOPERATE AND CAUSE THE COMPANY TO COOPERATE WITH SELLER, IN THE SAME
MANNER AS SET FORTH IN SECTION 7.5(A).  PURCHASER SHALL CAUSE THE COMPANY TO
PROVIDE, AT THE COST AND EXPENSE OF THE COMPANY, UP TO 200 HOURS OF COMPANY
EMPLOYEE ASSISTANCE IN THE TSA LITIGATION IN ANY GIVEN CALENDAR QUARTER,
INCLUDING UP TO 20 HOURS OF ASSISTANCE PER CALENDAR QUARTER FROM EACH OF THE
COMPANY’S CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER, BUT NOT TO EXCEED
500 AGGREGATE HOURS OF EMPLOYEE ASSISTANCE IN ANY CALENDAR YEAR, ALL OF WHICH
ASSISTANCE WILL BE AT THE COST AND EXPENSE OF THE COMPANY.  ANY ADDITIONAL
ASSISTANCE REQUIRED BEYOND THE HOURLY LIMITS IN THE PRECEDING SENTENCE SHALL BE
PAID FOR BY SELLER AT HOURLY RATES BASED ON THE BASE SALARIES OF EACH EMPLOYEE.
SELLER SHALL NOT COMPROMISE OR SETTLE ANY TAX AUDIT WITHOUT THE PRIOR WRITTEN
CONSENT OF PURCHASER IF SUCH COMPROMISE OR SETTLEMENT COULD ADVERSELY AFFECT THE
PURCHASER OR ITS AFFILIATES (INCLUDING, AFTER THE CLOSING DATE, THE COMPANY AND
THE SUBSIDIARIES), SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD.

 

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7.6                                 LIMITATIONS.

 

(A)                                  THE PURCHASER INDEMNIFIED PARTIES SHALL NOT
BE ENTITLED TO RECOVER FOR ANY LOSSES PURSUANT TO SECTION 7.2(A) HEREUNDER,
UNLESS (I) EACH OF SUCH LOSSES EXCEEDS FIFTY THOUSAND DOLLARS ($50,000) (THE
“MINIMUM AMOUNT”) AND (II) ALL SUCH LOSSES (EXCLUDING LOSSES INDIVIDUALLY LESS
THAN THE MINIMUM AMOUNT) IN THE AGGREGATE EXCEED SIX MILLION SEVEN HUNDRED FIFTY
THOUSAND DOLLARS ($6,750,000) (THE “PURCHASER DEDUCTIBLE AMOUNT”), AT WHICH TIME
PURCHASER SHALL BE ENTITLED TO BE INDEMNIFIED AND COMPENSATED THEREAFTER FOR ALL
LOSSES (EXCLUDING LOSSES LESS THAN THE MINIMUM AMOUNT) IN EXCESS OF THE
PURCHASER DEDUCTIBLE AMOUNT.  SOLELY FOR PURPOSES OF DETERMINING THE AMOUNT OF
LOSSES FOR WHICH THE PURCHASER INDEMNIFIED PARTIES ARE ENTITLED TO BE
INDEMNIFIED BY SELLER PURSUANT TO SECTION 7.2 FOR A BREACH OF, OR INACCURACY IN,
ANY REPRESENTATION OR WARRANTY (INCLUDING FOR DETERMINING WHETHER A BREACH OF A
REPRESENTATION OR WARRANTY HAS OCCURRED OR AN INACCURACY OF ANY REPRESENTATION
OR WARRANTY EXISTS), ANY MATERIALITY OR MATERIAL ADVERSE EFFECT STANDARD
CONTAINED IN THE APPLICABLE REPRESENTATION OR WARRANTY SHALL BE DISREGARDED. 
ABSENT FRAUD, IN NO EVENT SHALL SELLER’S ACTUAL CUMULATIVE LIABILITY FOR LOSSES
PURSUANT TO SECTION 7.2, EXCLUDING LOSSES RELATING TO THE EXCLUDED CLAIMS OR
TAXES, EXCEED TWO HUNDRED TWO MILLION, FIVE HUNDRED THOUSAND DOLLARS
($202,500,000). IN NO EVENT SHALL SELLER’S ACTUAL CUMULATIVE LIABILITY FOR ALL
LOSSES HEREUNDER, INCLUDING LIABILITY FOR LOSSES RELATING TO THE EXCLUDED CLAIMS
AND TAXES, EXCEED THE PURCHASE PRICE. EACH LOSS OR RIGHT OF INDEMNIFICATION
UNDER SECTION 7.8 FOR WHICH ANY PURCHASER INDEMNIFIED PARTY IS ENTITLED TO
RECOVERY SHALL BE REDUCED BY (I) THE AMOUNT OF ANY INSURANCE PROCEEDS ACTUALLY
RECEIVED BY SUCH PURCHASER INDEMNIFIED PARTY (NET OF COSTS AND EXPENSES OF
COLLECTION) WITH RESPECT TO SUCH LOSS OR RIGHT OF INDEMNIFICATION AND (II) ANY
INDEMNITY, CONTRIBUTION OR OTHER SIMILAR PAYMENT THAT SUCH PURCHASER INDEMNIFIED
PARTY RECEIVED FROM ANY THIRD PARTY WITH RESPECT TO SUCH LOSS OR RIGHT OF
INDEMNIFICATION. IF PURCHASER RECEIVED ANY PAYMENT FROM SELLER IN RESPECT OF ANY
LOSSES PURSUANT TO SECTION 7.2 AND PURCHASER COULD HAVE RECOVERED ALL OR PART OF
SUCH LOSSES FROM A THIRD PARTY (A “POTENTIAL CONTRIBUTOR”) BASED ON THE
UNDERLYING CLAIM (OTHER THAN FOR TAXES), AT THE WRITTEN REQUEST OF THE SELLER,
PURCHASER SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LEGAL REQUIREMENT AND ANY
CONTRACTUAL PROVISION, ASSIGN SUCH OF ITS RIGHTS TO PROCEED AGAINST THE
POTENTIAL CONTRIBUTOR AS ARE NECESSARY TO PERMIT SELLER TO RECOVER FROM THE
POTENTIAL CONTRIBUTOR THE AMOUNT OF SUCH PAYMENT.

 

(B)                                 IN DETERMINING THE AMOUNT OF LOSSES FOR
WHICH ANY SELLER INDEMNIFIED PARTY IS ENTITLED TO BE INDEMNIFIED BY PURCHASER
PURSUANT TO SECTION 7.3 FOR A BREACH OF, OR INACCURACY IN, ANY REPRESENTATION OR
WARRANTY (INCLUDING FOR DETERMINING WHETHER A BREACH OF A REPRESENTATION OR
WARRANTY HAS OCCURRED OR AN INACCURACY OF ANY REPRESENTATION OR WARRANTY
EXISTS), ANY MATERIALITY STANDARD CONTAINED IN THE APPLICABLE REPRESENTATION OR
WARRANTY SHALL BE DISREGARDED. EACH LOSS OR RIGHT OF INDEMNIFICATION PURSUANT TO
SECTION 7.8 FOR WHICH ANY SELLER INDEMNIFIED PARTY IS ENTITLED TO RECOVERY SHALL
BE REDUCED BY (I) THE AMOUNT OF ANY INSURANCE PROCEEDS ACTUALLY RECEIVED BY SUCH
SELLER INDEMNIFIED PARTY (NET OF COSTS AND EXPENSES OF COLLECTION) WITH RESPECT
TO SUCH LOSS OR RIGHT OF INDEMNIFICATION AND (II) ANY INDEMNITY, CONTRIBUTION OR
OTHER SIMILAR PAYMENT THAT SUCH SELLER INDEMNIFIED PARTY RECEIVED FROM ANY THIRD
PART WITH RESPECT TO SUCH LOSS OR RIGHT OF INDEMNIFICATION.

 

(C)                                  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL LOSSES INCLUDE A PARTY’S INCIDENTAL
OR CONSEQUENTIAL DAMAGES OR SPECIAL OR PUNITIVE DAMAGES TO SUCH PARTY.

 

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7.7                                 NO DUPLICATION; EXCLUSIVE REMEDY.  ANY
LIABILITY FOR INDEMNIFICATION HEREUNDER SHALL BE DETERMINED WITHOUT DUPLICATION
OF RECOVERY BY REASON OF THE STATE OF FACTS GIVING RISE TO SUCH LIABILITY
CONSTITUTING A BREACH OF MORE THAN ONE REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT.  SELLER AND PURCHASER AGREE THAT, AFTER THE CLOSING, THEIR SOLE
REMEDY WITH RESPECT TO ANY AND ALL CLAIMS ARISING IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (OTHER THAN WITH RESPECT TO FRAUD OR
WILLFUL BREACH OR AS SPECIFICALLY SET FORTH IN THE ANCILLARY AGREEMENTS) SHALL
BE PURSUANT TO THE INDEMNIFICATION PROVISIONS SET FORTH IN THIS ARTICLE VII.

 

7.8                                 TAX CLAIMS.

 

(A)                                  SELLER TAX INDEMNITY.  SELLER SHALL
INDEMNIFY AND HOLD PURCHASER INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST
LOSSES ARISING OUT OF OR RELATING TO THE FOLLOWING, BUT ONLY TO THE EXTENT SUCH
LOSSES EXCEED THE RELATED RESERVE, IF ANY, SET FORTH ON SECTION 7.8(A) OF THE
SELLER DISCLOSURE LETTER:

 

(I)                           ANY LOSS INCURRED BY REASON OF A BREACH OF THE
REPRESENTATIONS SET FORTH IN SECTION 2.6;

 

(II)                        TAXES OF ANY MEMBER OF A CONSOLIDATED, COMBINED OR
UNITARY GROUP OF WHICH THE COMPANY OR ANY SUBSIDIARY IS OR WAS A MEMBER ON OR
PRIOR TO THE CLOSING DATE BY REASON OF THE LIABILITY OF THE COMPANY OR ANY
SUBSIDIARY PURSUANT TO TREASURY REGULATIONS SECTION 1.1502-6(A) (OR ANY
ANALOGOUS OR SIMILAR STATE, LOCAL OR FOREIGN LAW OR REGULATION);

 

(III)                     TAXES IMPOSED ON THE COMPANY OR ANY SUBSIDIARY FOR ANY
PERIODS ENDING ON OR BEFORE THE CLOSING DATE (OR ANY PORTION OF ANY PERIOD UP
THROUGH THE CLOSING DATE TO THE EXTENT ANY PERIOD DOES NOT CLOSE ON SUCH DATE);

 

(IV)                    THE DISALLOWANCE, IN WHOLE OR IN PART, OF THE USE OF THE
TAX CREDITS (OTHER THAN AS A RESULT OF THERE BEING INSUFFICIENT TAX TO USE THE
CREDITS) DESCRIBED IN SECTION 1.3(E) BY PURCHASER OR ANY OF ITS AFFILIATES
(INCLUDING THE COMPANY AND THE SUBSIDIARIES) IN ANY TAXABLE PERIOD BEGINNING
AFTER THE CLOSING DATE, BUT ONLY IN THE RATIO THAT THE AMOUNT OF SUCH CREDITS
WERE PAID TO SELLER AS ADDITIONAL PURCHASE PRICE; AND

 

(V)                       THE RECOVERY BY A TAX AUTHORITY, IN WHOLE OR IN PART,
OF ANY REFUND DESCRIBED IN SECTION 1.3(F) FROM PURCHASER OR ANY OF ITS
AFFILIATES (INCLUDING THE COMPANY AND THE SUBSIDIARIES) PREVIOUSLY PAID TO
SELLER, BUT ONLY IN THE PROPORTION THAT THE REFUND WAS PAID TO SELLER AS
ADDITIONAL PURCHASE PRICE, AND, WITH RESPECT OF THE NEW JERSEY BUSINESS
EMPLOYMENT INCENTIVE PROGRAM REGARDLESS OF WHETHER SUCH LOSS RESULTED FROM ANY
ACTION TAKEN BY THE PURCHASER OR ITS AFFILIATES (INCLUDING THE COMPANY AND THE
SUBSIDIARIES) AFTER THE CLOSING DATE.

 

FOR PURPOSES OF THIS SECTION 7.8(A), (I) RESERVES SET FORTH ON SECTION 7.8(A) OF
THE SELLER DISCLOSURE LETTER SHALL BE TAKEN INTO ACCOUNT ONLY AFTER SUCH
RESERVES HAVE BEEN REDUCED BY THE AMOUNT OF ANY PAYMENT MADE TO SELLER PURSUANT
TO SECTION 1.3 AND (II) NO RESERVES SET FORTH IN SECTION 7.8(A) OF THE SELLER
DISCLOSURE LETTER SHALL BE TAKEN INTO ACCOUNT FOR PURPOSES OF SECTIONS
7.8(A)(IV) AND 7.8(A)(V). ANY LOSSES INCURRED SHALL BE REDUCED BY THE AMOUNT OF
ANY TAX SAVINGS, WHENEVER REALIZED, ARISING FROM ANY INCREASED DEDUCTIONS,
LOSSES OR CREDITS, WHENEVER REALIZED, OR BY DECREASES IN INCOME, GAINS OR
RECAPTURE OF TAX CREDITS. IF ANY PAYMENT MADE PURSUANT TO

 

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THIS SECTION 7.8(A) IS REQUIRED BY ANY RELEVANT TAX AUTHORITY TO BE TREATED IN A
MANNER DIFFERENT FROM THE TREATMENT DESCRIBED IN SECTION 7.9, THEN ANY SUCH
PAYMENT SHALL BE INCREASED BY THE TAX LIABILITY RESULTING OR ARISING FROM THE
RECEIPT OF SUCH PAYMENT (INCLUDING ANY PAYMENT MADE PURSUANT TO THIS SENTENCE).
THE INDEMNITY SET FORTH IN THIS SECTION 7.8(A) SHALL SURVIVE UNTIL THE
EXPIRATION OF THE STATUTE OF LIMITATIONS APPLICABLE TO THE MATTERS COVERED
HEREBY (GIVING EFFECT TO ANY WAIVER, MITIGATION OR EXTENSION THEREOF).

 

(B)                                 PURCHASER TAX INDEMNITY. PURCHASER SHALL
INDEMNIFY AND HOLD SELLER AND ITS AFFILIATES HARMLESS FROM AND AGAINST TAXES
IMPOSED ON THE COMPANY OR ANY SUBSIDIARY FOR ANY TAXABLE PERIOD BEGINNING AFTER
THE CLOSING DATE (OR PORTION THEREOF). THE INDEMNITY SET FORTH IN THIS
SECTION 7.8(B) SHALL SURVIVE UNTIL THE EXPIRATION OF THE STATUTE OF LIMITATIONS
APPLICABLE TO THE MATTERS COVERED HEREBY (GIVING EFFECT TO ANY WAIVER,
MITIGATION OR EXTENSION THEREOF).

 

(C)                                  PROCEDURE FOR TAX CLAIMS.  EACH PARTY
HERETO SHALL NOTIFY THE OTHER PARTY IN WRITING WITHIN FIFTEEN (15) DAYS
FOLLOWING RECEIPT BY SUCH PARTY OF WRITTEN NOTICE OF ANY PENDING OR THREATENED
AUDITS, NOTICE OF DEFICIENCY, PROPOSED ADJUSTMENT, ASSESSMENT, EXAMINATION OR
OTHER ADMINISTRATIVE OR COURT PROCEEDING, SUIT, DISPUTE OR OTHER CLAIM WHICH
GIVE RISE TO A CLAIM FOR INDEMNIFICATION UNDER THIS SECTION 7.8 (“TAX CLAIM”).
THE FAILURE OF ANY INDEMNIFIED PARTY TO GIVE TIMELY NOTICE OF A CLAIM FOR
INDEMNIFICATION OR DEFENSE ARISING UNDER THIS SECTION 7.8 (INCLUDING REASONABLE
ATTORNEYS FEES AND EXPENSES AND REASONABLE ACCOUNTANTS’ FEES AND EXPENSES
INCURRED BY A PARTY IN THE INVESTIGATION OR DEFENSE OF ANY OF THE SAME OR IN
ASSERTING, PRESERVING OR ENFORCING ANY SUCH PARTY’S RIGHTS ARISING UNDER THIS
SECTION 7.8) SHALL NOT AFFECT THE RIGHTS TO INDEMNIFICATION HEREUNDER, EXCEPT TO
THE EXTENT THAT THE INDEMNIFYING PARTY IS ACTUALLY AND MATERIALLY PREJUDICED BY
SUCH FAILURE. SELLER SHALL HAVE THE RIGHT, AT ITS SOLE DISCRETION AND EXPENSE,
TO REPRESENT THE INTEREST OF THE COMPANY AND ANY SUBSIDIARY IN ANY TAX CLAIM
RELATING TO PRE-CLOSING TAX PERIODS AND TO EMPLOY COUNSEL OF ITS CHOICE;
PROVIDED, HOWEVER, THAT IF ANY TAX CLAIM COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON PURCHASER, ANY COMPANY, ANY SUBSIDIARY OR ANY OF
THEIR AFFILIATES IN ANY TAXABLE PERIOD BEGINNING AFTER THE CLOSING DATE, THE TAX
CLAIM SHALL NOT BE SETTLED OR RESOLVED WITHOUT THE PRIOR WRITTEN CONSENT OF
PURCHASER, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. IN THE
CASE OF A STRADDLE PERIOD, SELLER SHALL BE ENTITLED TO PARTICIPATE IN THE
DEFENSE OF ANY TAX CLAIM RELATING IN ANY PART TO TAXES ATTRIBUTABLE TO THE
PORTION OF SUCH STRADDLE PERIOD DEEMED TO END ON OR BEFORE THE CLOSING DATE AND,
AT SELLER’S SOLE DISCRETION AND EXPENSE, MAY ASSUME THE CONTROL OF SUCH TAX
CLAIM; PROVIDED, HOWEVER, THAT IF ANY TAX CLAIM COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT ON PURCHASER, ANY COMPANY, ANY SUBSIDIARY OR ANY
OF THEIR AFFILIATES IN ANY TAXABLE PERIOD BEGINNING AFTER THE CLOSING DATE, THE
TAX CLAIM SHALL NOT BE SETTLED OR RESOLVED WITHOUT PURCHASER’S CONSENT, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. NONE OF PURCHASER, AND OF
ITS AFFILIATES, THE COMPANY OR ANY SUBSIDIARY MAY SETTLE OR OTHERWISE DISPOSE OF
ANY TAX CLAIM OR WHICH SELLER MAY HAVE A LIABILITY UNDER THIS AGREEMENT WITHOUT
THE PRIOR WRITTEN CONSENT OF SELLER, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED. IF SELLER ELECTS NOT TO PARTICIPATE AND/OR CONTROL A TAX
CLAIM THAT IT IS ENTITLED TO PARTICIPATE IN AND/OR CONTROL UNDER THIS
SECTION 7.8(C), THEN PURCHASER SHALL CONTROL SUCH TAX CLAIM, PROVIDED, HOWEVER,
THAT (I) PURCHASER SHALL KEEP SELLER INFORMED OF ALL MATERIAL DEVELOPMENTS
RELATED TO SUCH TAX CLAIM ON A TIMELY BASIS AND SHALL, IN GOOD FAITH, (A) AFFORD
SELLER THE OPPORTUNITY TO REVIEW MATERIAL SUBMISSIONS RELATED TO SUCH TAX CLAIM
AND (B) PROVIDE SELLER WITH FINAL COPIES OF ALL SUCH SUBMISSIONS, (II) THE
FAILURE OF PURCHASER TO SATISFY CLAUSE (I) OF THIS SENTENCE SHALL NOT AFFECT THE
RIGHTS OF THE PURCHASER INDEMNIFIED PARTIES TO INDEMNIFICATION HEREUNDER, EXCEPT
TO THE

 

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EXTENT THAT SELLER IS ACTUALLY AND MATERIALLY PREJUDICED BY SUCH FAILURE AND
(III) PURCHASER SHALL NOT RESOLVE SUCH TAX CLAIM WITHOUT SELLER’S PRIOR WRITTEN
CONSENT, WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. IN CONNECTION WITH
ANY TAX CLAIM, PURCHASER AND SELLER AND THEIR AFFILIATES SHALL FULLY COOPERATE
IN ASSISTING THE PARTY CONTROLLING THE TAX CLAIM TO EFFECTIVELY RESIST OR
RESOLVE SUCH CLAIM, INCLUDING PROVIDING REASONABLE ACCESS TO SUCH PERSONNEL,
DOCUMENTS AND RECORDS AS MAY BE NECESSARY TO RESISTING OR RESOLVING THE TAX
CLAIM.

 

(D)                                 RESOLUTION OF ALL TAX RELATED DISPUTES.  IF
SELLER AND PURCHASER CANNOT AGREE ON THE CALCULATION OF ANY AMOUNT RELATING TO
TAXES OR THE INTERPRETATION OR APPLICATION OF ANY PROVISION OFF THIS AGREEMENT
RELATING TO TAXES, SUCH DISPUTE SHALL BE RESOLVED BY A NATIONALLY RECOGNIZED
ACCOUNTING FIRM MUTUALLY ACCEPTABLE TO EACH OF SELLER AND PURCHASER, WHOSE
DECISION SHALL BE FINAL AND BINDING UPON ALL PERSONS INVOLVED AND WHOSE EXPENSES
SHALL BE SHARED EQUALLY BY SELLER AND PURCHASER.

 

7.9         Tax Effect of Indemnification Payments.  All indemnity payments made
by Seller to Purchaser or any of its Affiliates pursuant to this Agreement shall
be treated for all Tax purposes as adjustments to the consideration paid with
respect to the Shares.

 

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

 

8.1                                 TERMINATION.  THIS AGREEMENT MAY BE
TERMINATED AT ANY TIME PRIOR TO THE CLOSING DATE AS PROVIDED BELOW:

 

(A)                                  BY THE MUTUAL WRITTEN CONSENT OF SELLER AND
PURCHASER;

 

(B)                                 BY EITHER SELLER OR PURCHASER IF THE SALE
AND TRANSFER OF THE SHARES PURSUANT TO ARTICLE I OF THIS AGREEMENT SHALL NOT
HAVE BEEN CONSUMMATED BY MARCH 31, 2005 (THE “END DATE”); PROVIDED, HOWEVER,
THAT THE RIGHT TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 8.1(B) SHALL NOT
BE AVAILABLE TO ANY PARTY WHOSE ACTION OR FAILURE TO ACT HAS BEEN A PRINCIPAL
CAUSE OF OR RESULTED IN THE FAILURE OF THE SALE AND TRANSFER OF THE SHARES
PURSUANT TO ARTICLE I OF THIS AGREEMENT TO OCCUR ON OR BEFORE SUCH DATE AND SUCH
ACTION OR FAILURE TO ACT CONSTITUTES A BREACH OF THIS AGREEMENT;

 

(C)                                  BY EITHER SELLER OR PURCHASER IF A
GOVERNMENTAL ENTITY SHALL HAVE ISSUED AN ORDER, DECREE OR RULING OR TAKEN ANY
OTHER ACTION (INCLUDING THE FAILURE TO HAVE TAKEN AN ACTION), IN ANY CASE HAVING
THE EFFECT OF PERMANENTLY RESTRAINING, ENJOINING OR OTHERWISE PROHIBITING THE
SALE AND TRANSFER OF THE SHARES, WHICH ORDER, DECREE, RULING OR OTHER ACTION IS
FINAL AND NONAPPEALABLE;

 

(D)                                 BY SELLER, UPON A BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT ON THE PART OF PURCHASER SET
FORTH IN THIS AGREEMENT, OR IF ANY REPRESENTATION OR WARRANTY OF PURCHASER SHALL
HAVE BECOME UNTRUE, IN EITHER CASE SUCH THAT THE CONDITIONS SET FORTH IN
SECTION 6.2(A) OR SECTION 6.2(B) WOULD NOT BE SATISFIED AS OF THE TIME OF SUCH
BREACH OR AS OF THE TIME SUCH REPRESENTATION OR WARRANTY SHALL HAVE BECOME
UNTRUE, PROVIDED THAT IF SUCH INACCURACY IN PURCHASER’S REPRESENTATIONS AND
WARRANTIES OR BREACH BY PURCHASER IS CURABLE BY PURCHASER PRIOR TO THE END DATE
THROUGH THE EXERCISE OF REASONABLE EFFORTS, THEN SELLER MAY NOT

 

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TERMINATE THIS AGREEMENT UNDER THIS SECTION 8.1(D) PRIOR TO THIRTY (30) DAYS
FOLLOWING THE RECEIPT OF WRITTEN NOTICE FROM SELLER TO PURCHASER OF SUCH BREACH
(IT BEING UNDERSTOOD THAT SELLER MAY NOT TERMINATE THIS AGREEMENT PURSUANT TO
THIS SECTION 8.1(D) IF IT SHALL HAVE MATERIALLY BREACHED THIS AGREEMENT OR IF
SUCH BREACH BY PURCHASER IS CURED SO THAT SUCH CONDITIONS WOULD THEN BE
SATISFIED);

 

(E)                                  BY PURCHASER, UPON A BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT ON THE PART OF SELLER SET FORTH
IN THIS AGREEMENT, OR IF ANY REPRESENTATION OR WARRANTY OF THE COMPANY SHALL
HAVE BECOME UNTRUE, IN EITHER CASE SUCH THAT THE CONDITIONS SET FORTH IN
SECTION 6.3(A) OR SECTION 6.3(B) WOULD NOT BE SATISFIED AS OF THE TIME OF SUCH
BREACH OR AS OF THE TIME SUCH REPRESENTATION OR WARRANTY SHALL HAVE BECOME
UNTRUE, PROVIDED THAT IF SUCH INACCURACY IN SELLER’S REPRESENTATIONS AND
WARRANTIES OR BREACH BY SELLER IS CURABLE BY SELLER PRIOR TO THE END DATE
THROUGH THE EXERCISE OF REASONABLE EFFORTS, THEN PURCHASER MAY NOT TERMINATE
THIS AGREEMENT UNDER THIS SECTION 8.1(E) PRIOR TO THE END DATE THIRTY (30) DAYS
FOLLOWING THE RECEIPT OF WRITTEN NOTICE FROM PURCHASER TO SELLER OF SUCH BREACH
(IT BEING UNDERSTOOD THAT PURCHASER MAY NOT TERMINATE THIS AGREEMENT PURSUANT TO
THIS SECTION 8.1(E) IF IT SHALL HAVE MATERIALLY BREACHED THIS AGREEMENT OR IF
SUCH BREACH BY SELLER IS CURED SO THAT SUCH CONDITIONS WOULD THEN BE SATISFIED);
AND

 

(F)                                    BY PURCHASER, IF SELLER HAS NOT NOTIFIED
PURCHASER IN WRITING WITHIN FIFTEEN (15) BUSINESS DAYS OF THE DATE HEREOF THAT
THE CONDITION SET FORTH IN SECTION 6.2(E) HAS BEEN SATISFIED.

 

8.2                                 NOTICE OF TERMINATION; EFFECT OF
TERMINATION.  ANY TERMINATION OF THIS AGREEMENT UNDER SECTION 8.1 ABOVE WILL BE
EFFECTIVE IMMEDIATELY UPON THE DELIVERY OF A VALID WRITTEN NOTICE OF THE
TERMINATING PARTY TO THE OTHER PARTY HERETO OR, IN THE CASE OF TERMINATION
PURSUANT TO SECTION 8.1(A), AT SUCH TIME AS SET FORTH IN SUCH MUTUAL WRITTEN
CONSENT.  IN THE EVENT OF THE TERMINATION OF THIS AGREEMENT AS PROVIDED IN
SECTION 8.1, THIS AGREEMENT SHALL BE OF NO FURTHER FORCE OR EFFECT, EXCEPT
(I) AS SET FORTH IN SECTION 5.2, SECTION 5.3, THIS SECTION 8.2, SECTION 8.3 AND
ARTICLE IX, EACH OF WHICH SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT, AND
(II) NOTHING HEREIN SHALL RELIEVE ANY PARTY FROM LIABILITY FOR ANY WILLFUL
BREACH OF THIS AGREEMENT.  NO TERMINATION OF THIS AGREEMENT SHALL AFFECT THE
OBLIGATIONS OF THE PARTIES CONTAINED IN THE CONFIDENTIALITY AGREEMENT, ALL OF
WHICH OBLIGATIONS SHALL SURVIVE TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH
THEIR TERMS.

 

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8.3                                 FEES AND EXPENSES.  ALL FEES AND EXPENSES
INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, INCLUDING FEES AND EXPENSES OF FINANCIAL ADVISORS, FINANCIAL SPONSORS,
LEGAL COUNSEL AND OTHER ADVISORS, SHALL BE PAID BY THE PARTY INCURRING SUCH
EXPENSES WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE
CONSUMMATED.  FOR THE AVOIDANCE OF DOUBT, NEITHER THE COMPANY NOR ANY OF THE
SUBSIDIARIES SHALL BE RESPONSIBLE FOR (A) ANY OF THE FEES AND EXPENSES INCURRED
BY OR ON BEHALF OF SELLER IN CONNECTION WITH THE NEGOTIATION, EXECUTION OR
CONSUMMATION OF THIS AGREEMENT OR THE ANCILLARY AGREEMENTS, OR (B) EXCEPT AS SET
FORTH BELOW, ANY AMOUNTS DUE TO ANY EMPLOYEE OR CONSULTANT OF THE COMPANY OR ANY
SUBSIDIARY IN RESPECT OF STAY BONUSES, TRANSACTION BONUSES OR SIMILAR PAYMENTS
ARISING FROM THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(EXCLUDING PAYMENTS THAT REQUIRE SUBSEQUENT ACTION BY PURCHASER, THE COMPANY OR
ANY SUBSIDIARY FOLLOWING THE CLOSING, INCLUDING TERMINATION OF THE EMPLOYMENT OF
ANY PERSON), ALL OF WHICH FEES, EXPENSES AND AMOUNTS SHALL BE PAID BY SELLER. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE COMPANY SHALL BE
SOLELY RESPONSIBLE FOR THE PAYMENT OF (I) ANY AMOUNTS OF THE “ACTUAL INCENTIVE
BONUS,” AS DEFINED UNDER THE EXECUTIVE CHANGE-IN-CONTROL, INCENTIVE AND
SEVERANCE AGREEMENTS LISTED IN SECTION 1.4(C) OF THE SELLER DISCLOSURE LETTER,
AND (II) ANY AMOUNTS DUE UNDER THE COMPANY’S EMPLOYEE APPRECIATION PLAN.

 

8.4                                 AMENDMENT.  SUBJECT TO APPLICABLE LAW, THIS
AGREEMENT MAY BE AMENDED BY THE PARTIES HERETO AT ANY TIME BY EXECUTION OF AN
INSTRUMENT IN WRITING SIGNED ON BEHALF OF EACH OF SELLER AND PURCHASER.

 

8.5                                 EXTENSION; WAIVER.  AT ANY TIME PRIOR TO THE
CLOSING DATE, EITHER PARTY HERETO MAY, TO THE EXTENT LEGALLY ALLOWED (I) EXTEND
THE TIME FOR THE PERFORMANCE OF ANY OF THE OBLIGATIONS OR OTHER ACTS OF THE
OTHER PARTIES HERETO, (II) WAIVE ANY INACCURACIES IN THE REPRESENTATIONS AND
WARRANTIES MADE TO SUCH PARTY CONTAINED HEREIN OR IN ANY DOCUMENT DELIVERED
PURSUANT HERETO, AND (III) WAIVE COMPLIANCE WITH ANY OF THE AGREEMENTS OR
CONDITIONS FOR THE BENEFIT OF SUCH PARTY CONTAINED HEREIN.  ANY AGREEMENT ON THE
PART OF A PARTY HERETO TO ANY SUCH EXTENSION OR WAIVER SHALL BE VALID ONLY IF
SET FORTH IN AN INSTRUMENT IN WRITING SIGNED ON BEHALF OF SUCH PARTY.  DELAY IN
EXERCISING ANY RIGHT UNDER THIS AGREEMENT SHALL NOT CONSTITUTE A WAIVER OF SUCH
RIGHT.

 

ARTICLE IX

GENERAL PROVISIONS

 

9.1                                 NOTICES.  ALL NOTICES AND OTHER
COMMUNICATIONS HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED DULY GIVEN
(I) ON THE DATE OF DELIVERY IF DELIVERED PERSONALLY, (II) ON THE DATE OF
CONFIRMATION OF RECEIPT (OR, THE FIRST BUSINESS DAY FOLLOWING SUCH RECEIPT IF
THE DATE IS NOT A BUSINESS DAY) OF TRANSMISSION BY FACSIMILE OR EMAIL, OR
(III) ON THE DATE OF CONFIRMATION OF RECEIPT (OR, THE FIRST BUSINESS DAY
FOLLOWING SUCH RECEIPT IF THE DATE IS NOT A BUSINESS DAY) IF DELIVERED BY A
NATIONALLY RECOGNIZED COURIER SERVICE.  ALL NOTICES HEREUNDER SHALL BE DELIVERED
AS SET FORTH BELOW, OR PURSUANT TO SUCH OTHER INSTRUCTIONS AS MAY BE DESIGNATED
IN WRITING BY THE PARTY TO RECEIVE SUCH NOTICE:

 

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if to Purchaser, to:

 

 

 

TTI Holding Corporation

 

c/o Providence Equity Partners Inc.

 

50 Kennedy Plaza

 

18th Floor

 

Providence, RI 02903

 

Attention: Mark Pelson

 

Telephone No.: (401) 751-1710

 

Facsimile No.: (401) 751-1790

 

Email: m.pelson@provequity.com

 

 

 

with a copy to:

 

 

 

Warburg Pincus Private Equity VIII, L.P.

 

c/o Warburg Pincus LLC

 

466 Lexington Avenue

 

New York, NY 10017

 

Attention: Larry Bettino

 

Telephone No.: (212) 878-9499

 

Facsimile No.: (212) 878-9450

 

Email: lbettino@warburgpincus.com

 

 

 

with a copy to:

 

 

 

Willkie Farr & Gallagher LLP

 

787 Seventh Avenue

 

New York, NY 10010

 

Attention: Steven J. Gartner and David K. Boston

 

Telephone No.: (212) 728-8000

 

Facsimile No.: (212) 728-8111

 

Email: sgartner@willkie.com; dboston@willkie.com

 

 

 

if to Seller, to:

 

 

 

 

Science Applications International Corporation

 

10260 Campus Point Drive, M/S F3

 

San Diego, California 92121

 

Attention: Kevin A. Werner

 

Telephone No.: (858) 826-6637

 

Telecopy No.: (858) 826-2222

 

Email: kevin.a.werner@saic.com

 

 

 

with a copy to:

 

 

 

Science Applications International Corporation

 

10260 Campus Point Drive, M/S F3

 

San Diego, California 92121

 

Attention: Paul H. Greiner

 

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Telephone No.: (858) 826-7360

 

Telecopy No.: (858) 826-4037

 

Email: paul.h.greiner@saic.com

 

 

 

with a copy to:

 

 

 

Heller Ehrman White & McAuliffe LLP

 

4350 La Jolla Village Drive, 7th Floor

 

San Diego, California 92122-1246

 

Attention: Stephen C. Ferruolo

 

Telephone No.: (858) 450-8400

 

Facsimile No.: (858) 450-8499

 

Email: sferruolo@hewm.com

 

9.2                                 INTERPRETATION; KNOWLEDGE.

 

(A)                                  WHEN A REFERENCE IS MADE IN THIS AGREEMENT
TO EXHIBITS, SUCH REFERENCE SHALL BE TO AN EXHIBIT TO THIS AGREEMENT UNLESS
OTHERWISE INDICATED.  WHEN A REFERENCE IS MADE IN THIS AGREEMENT TO SECTIONS,
SUCH REFERENCE SHALL BE TO A SECTION OF THIS AGREEMENT UNLESS OTHERWISE
INDICATED.  FOR PURPOSES OF THIS AGREEMENT, THE WORDS “INCLUDE,” “INCLUDES” AND
“INCLUDING,” WHEN USED HEREIN, SHALL BE DEEMED IN EACH CASE TO BE FOLLOWED BY
THE WORDS “WITHOUT LIMITATION.”  THE TABLE OF CONTENTS AND HEADINGS CONTAINED IN
THIS AGREEMENT ARE FOR REFERENCE PURPOSES ONLY AND SHALL NOT AFFECT IN ANY WAY
THE MEANING OR INTERPRETATION OF THIS AGREEMENT.  WHEN REFERENCE IS MADE HEREIN
TO “THE BUSINESS OF” THE COMPANY, SUCH REFERENCE SHALL BE DEEMED TO INCLUDE THE
BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE.  EXCEPT AS
EXPRESSLY SET FORTH TO THE CONTRARY IN THE SELLER DISCLOSURE LETTER, AN
EXCEPTION OR DISCLOSURE MADE IN SELLER DISCLOSURE LETTER WITH REGARD TO A
REPRESENTATION OF SELLER SHALL BE DEEMED MADE WITH RESPECT TO ANY OTHER
REPRESENTATION BY SUCH PARTY TO WHICH SUCH EXCEPTION OR DISCLOSURE IS REASONABLY
APPARENT FROM THE CONTEXT OF SUCH EXCEPTION OR DISCLOSURE.

 

(B)                                 FOR PURPOSES OF THIS AGREEMENT, THE TERM
“KNOWLEDGE” MEANS WITH RESPECT TO SELLER, WITH RESPECT TO ANY MATTER IN
QUESTION, THE ACTUAL KNOWLEDGE OF THE INDIVIDUALS SET FORTH IN SECTION 9.2(B) OF
THE SELLER DISCLOSURE LETTER.

 

(C)                                  FOR PURPOSES OF THIS AGREEMENT, THE TERM
“MATERIAL ADVERSE EFFECT,” MEANS ANY CHANGE, EVENT, VIOLATION, INACCURACY,
CIRCUMSTANCE OR EFFECT (ANY SUCH ITEM, AN “EFFECT”), INDIVIDUALLY OR WHEN TAKEN
TOGETHER WITH ALL OTHER EFFECTS THAT HAVE OCCURRED PRIOR TO THE DATE OF
DETERMINATION OF THE OCCURRENCE OF THE MATERIAL ADVERSE EFFECT, THAT (X) IS
MATERIALLY ADVERSE TO THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION OR
RESULTS OF OPERATIONS OF AN ENTITY TAKEN AS A WHOLE WITH ITS SUBSIDIARIES OR (Y)
MATERIALLY ADVERSELY AFFECTS THE ABILITY OF AN ENTITY TAKEN AS A WHOLE WITH ITS
SUBSIDIARIES TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL CHANGES, ALONE OR IN COMBINATION,
AFFECTING ANY OF THE INDUSTRIES IN WHICH SUCH ENTITY OPERATES GENERALLY OR THE
UNITED STATES OR WORLDWIDE ECONOMY GENERALLY, WHICH CHANGES IN EACH CASE DO NOT
DISPROPORTIONATELY AFFECT SUCH ENTITY IN ANY MATERIAL RESPECT, BE DEEMED TO
CONSTITUTE AN EFFECT OR A MATERIAL ADVERSE EFFECT.  FOR THE AVOIDANCE OF DOUBT,
ANY OF THE MATTERS SET FORTH ON SECTION 9.2(C) OF THE SELLER DISCLOSURE LETTER
SHALL NOT CONSTITUTE AN EFFECT OR A MATERIAL ADVERSE EFFECT.

 

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(D)                                 FOR PURPOSES OF THIS AGREEMENT, THE TERM
“PERSON” SHALL MEAN ANY INDIVIDUAL, CORPORATION (INCLUDING ANY NON-PROFIT
CORPORATION), GENERAL PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY
PARTNERSHIP, JOINT VENTURE, ESTATE, TRUST, COMPANY (INCLUDING ANY LIMITED
LIABILITY COMPANY OR JOINT STOCK COMPANY), FIRM OR OTHER ENTERPRISE,
ASSOCIATION, ORGANIZATION, ENTITY OR GOVERNMENTAL ENTITY.

 

(E)                                  FOR PURPOSES OF THIS AGREEMENT, THE TERM
“AFFILIATE” SHALL HAVE THE MEANING GIVEN TO SUCH TERM IN RULE 12B-2 OF
REGULATION 12B UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(F)                                    FOR PURPOSES OF THIS AGREEMENT, THE TERM,
“CONFIDENTIALITY AGREEMENTS” SHALL MEAN, COLLECTIVELY, (I) THE CONFIDENTIALITY
AGREEMENT, DATED JULY 8, 2004, BETWEEN SELLER AND PROVIDENCE EQUITY PARTNERS
INC. AND (II) THE CONFIDENTIALITY AGREEMENT, DATED JULY 8, 2004, BETWEEN SELLER
AND WARBURG PINCUS LLC.

 

9.3                                 COUNTERPARTS.  THIS AGREEMENT MAY BE
EXECUTED IN TWO OR MORE COUNTERPARTS, ALL OF WHICH SHALL BE CONSIDERED ONE AND
THE SAME AGREEMENT AND SHALL BECOME EFFECTIVE WHEN ONE OR MORE COUNTERPARTS HAVE
BEEN SIGNED BY EACH OF THE PARTIES AND DELIVERED TO THE OTHER PARTY, IT BEING
UNDERSTOOD THAT ALL PARTIES NEED NOT SIGN THE SAME COUNTERPART.

 

9.4                                 ENTIRE AGREEMENT; THIRD-PARTY
BENEFICIARIES.  THIS AGREEMENT, THE ANCILLARY AGREEMENTS AND THE DOCUMENTS AND
INSTRUMENTS AND OTHER AGREEMENTS AMONG THE PARTIES HERETO AS CONTEMPLATED BY OR
REFERRED TO HEREIN AND THEREIN, INCLUDING THE SELLER DISCLOSURE LETTER
(I) CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS,
BOTH WRITTEN AND ORAL, AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF, IT BEING UNDERSTOOD THAT THE CONFIDENTIALITY AGREEMENT SHALL CONTINUE IN
FULL FORCE AND EFFECT UNTIL THE CLOSING AND SHALL SURVIVE ANY TERMINATION OF
THIS AGREEMENT AND (II) ARE NOT INTENDED TO CONFER UPON ANY OTHER PERSON ANY
RIGHTS OR REMEDIES HEREUNDER, EXCEPT AS SPECIFICALLY PROVIDED, FOLLOWING THE
CLOSING DATE, IN SECTIONS 5.7 AND ARTICLE VII.

 

9.5                                 SEVERABILITY.  IN THE EVENT THAT ANY
PROVISION OF THIS AGREEMENT OR THE APPLICATION THEREOF, BECOMES OR IS DECLARED
BY A COURT OF COMPETENT JURISDICTION TO BE ILLEGAL, VOID OR UNENFORCEABLE, THE
REMAINDER OF THIS AGREEMENT WILL CONTINUE IN FULL FORCE AND EFFECT AND THE
APPLICATION OF SUCH PROVISION TO OTHER PERSONS OR CIRCUMSTANCES WILL BE
INTERPRETED SO AS REASONABLY TO EFFECT THE INTENT OF THE PARTIES HERETO.  THE
PARTIES FURTHER AGREE TO REPLACE SUCH VOID OR UNENFORCEABLE PROVISION OF THIS
AGREEMENT WITH A VALID AND ENFORCEABLE PROVISION THAT WILL ACHIEVE, TO THE
GREATEST EXTENT POSSIBLE, THE ECONOMIC, BUSINESS AND OTHER PURPOSES OF SUCH VOID
OR UNENFORCEABLE PROVISION.

 

9.6                                 OTHER REMEDIES.  EXCEPT AS OTHERWISE
PROVIDED HEREIN, ANY AND ALL REMEDIES HEREIN EXPRESSLY CONFERRED UPON A PARTY
WILL BE DEEMED CUMULATIVE WITH AND NOT EXCLUSIVE OF ANY OTHER REMEDY CONFERRED
HEREBY, OR BY LAW OR EQUITY UPON SUCH PARTY, AND THE EXERCISE BY A PARTY OF ANY
ONE REMEDY WILL NOT PRECLUDE THE EXERCISE OF ANY OTHER REMEDY.  THE PARTIES
HERETO AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE
PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR
SPECIFIC TERMS OR WERE OTHERWISE BREACHED.

 

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9.7                                 GOVERNING LAW; WAIVER OF JURY TRIAL;
ARBITRATION OF PATENT CLAIMS.

 

(A)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION
AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF DELAWARE (REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF).

 

(B)                                 JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH
PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION 9.7(B).

 

(C)                                  ARBITRATION.  IN THE EVENT THE PARTIES
CANNOT AGREE AS TO THE VALUE OF NON-CASH CONSIDERATION UNDER SECTION 1.3(B), THE
ISSUE SHALL BE SETTLED BY ARBITRATION CONDUCTED IN NEW YORK, NEW YORK, OR SUCH
OTHER PLACE AS MUTUALLY AGREED TO BY THE PARTIES, WHICH SHALL BE CONDUCTED IN
ACCORDANCE WITH THE RULES AND PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION
(AAA) THEN IN EFFECT WITH RESPECT TO COMMERCIAL DISPUTES; PROVIDED, HOWEVER,
THAT DISCOVERY SHALL BE LIMITED TO DEPOSITIONS AND INTERROGATORIES, DOCUMENT
PRODUCTION AND OTHER WRITTEN DISCOVERY. THE ARBITRATION SHALL BE FINAL AND
BINDING UPON ALL PARTIES.  THE ARBITRATION SHALL BE CONDUCTED BY A SINGLE
ARBITRATOR WITH THE RELEVANT EXPERTISE ON THE VALUATION OF SUCH CONSIDERATION
APPOINTED IN ACCORDANCE WITH AAA RULES.  THE COST OF ANY ARBITRATION HEREUNDER,
INCLUDING THE COST OF THE RECORD OR TRANSCRIPTS THEREOF, IF ANY, ADMINISTRATIVE
FEES, SHALL BE DIVIDED EVENLY BETWEEN THE PARTIES, OR OTHERWISE ALLOCATED IN AN
EQUITABLE MANNER, AS DETERMINED BY THE ARBITRATOR.  THE PARTIES SHALL USE
REASONABLE EFFORTS TO ENABLE THE ARBITRATOR TO RENDER ITS DECISION NO LATER THAN
SIXTY (60) DAYS AFTER THE SUBMISSION OF THE DISPUTE TO THE ARBITRATOR.

 

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9.8                                 RULES OF CONSTRUCTION.  THE PARTIES HERETO
AGREE THAT THEY HAVE BEEN REPRESENTED BY COUNSEL DURING THE NEGOTIATION AND
EXECUTION OF THIS AGREEMENT AND, THEREFORE, WAIVE THE APPLICATION OF ANY LAW,
REGULATION, HOLDING OR RULE OF CONSTRUCTION PROVIDING THAT AMBIGUITIES IN AN
AGREEMENT OR OTHER DOCUMENT WILL BE CONSTRUED AGAINST THE PARTY DRAFTING SUCH
AGREEMENT OR DOCUMENT.

 

9.9                                 ASSIGNMENT.  NO PARTY MAY ASSIGN EITHER THIS
AGREEMENT OR ANY OF ITS RIGHTS, INTERESTS, OR OBLIGATIONS HEREUNDER WITHOUT THE
PRIOR WRITTEN APPROVAL OF THE OTHER PARTIES, PROVIDED, HOWEVER, THAT (A) SELLER
MAY ASSIGN TO ANY AFFILIATE ITS RIGHTS AND INTERESTS IN AND TO THE ADDITIONAL
PURCHASE PRICE, OR ANY PORTION THEREOF AND (B) PURCHASER MAY ASSIGN ANY OR ALL
OF ITS (I) RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT TO ANY WHOLLY-OWNED
SUBSIDIARY (PROVIDED THAT NO SUCH ASSIGNMENT SHALL RELEASE THE PURCHASER FROM
ANY OBLIGATION UNDER THIS AGREEMENT) OR (II) RIGHTS UNDER THIS AGREEMENT TO ANY
PERSON THAT ACQUIRES ALL OR ANY PORTION OF THE STOCK OR ASSETS OF THE COMPANY OR
ANY SUBSIDIARY.  ANY PURPORTED ASSIGNMENT IN VIOLATION OF THIS SECTION 9.9 SHALL
BE VOID.  SUBJECT TO THE PRECEDING SENTENCE, THIS AGREEMENT SHALL BE BINDING
UPON AND SHALL INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS.

 

9.10                           NO WAIVER.  NO FAILURE OR DELAY ON THE PART OF
ANY PARTY HERETO IN THE EXERCISE OF ANY RIGHT HEREUNDER WILL IMPAIR SUCH RIGHT
OR BE CONSTRUED TO BE A WAIVER OF, OR ACQUIESCENCE IN, ANY BREACH OF ANY
REPRESENTATION, WARRANTY OR AGREEMENT HEREIN, NOR WILL ANY SINGLE OR PARTIAL
EXERCISE OF ANY SUCH RIGHT PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR OF ANY
OTHER RIGHT.

 

*****

 

55

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

 

 

TTI HOLDING CORPORATION

 

 

 

 

 

 

 

By:

/s/   GEORGE M. H. ALLEN

 

 

 

   George M. H. Allen

 

 

   Vice President

 

 

 

SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION

 

 

 

 

 

 

By:

/s/   WILLIAM A. ROPER, JR.

 

 

 

   William A. Roper, Jr.

 

 

 

   Corporate Executive Vice President

 

 

[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

BETWEEN SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

AND TTI HOLDING CORPORATION]

 

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