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AGREEMENT AND PLAN OF MERGER

BY AND AMONG

QUALITY SYSTEMS, INC.

BUD MERGER SUB, LLC

AND

LACKLAND ACQUISITION II, LLC

dba Healthcare Strategic Initiatives

May 16, 2008

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

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ARTICLE I THE MERGER

 

1

 

 

1.1

The Merger

 

1

 

 

1.2

The Closing

 

1

 

 

1.3

Actions at the Closing

 

1

 

 

1.4

Additional Action

 

2

 

 

1.5

Conversion of Membership Interests; Purchase Consideration

 

2

 

 

1.6

Closing Amount Adjustment

 

3

 

 

1.7

Earnout Payment

 

5

 

 

1.8

Escrow

 

10

 

 

1.9

Articles of Organization and Operating Agreement of Surviving Company

 

10

 

 

1.10

No Further Rights

 

10

 

 

1.11

Member Releases

 

10

 

 

1.12

Company Closing Expenses

 

11

 

 

1.13

Appointment of Member Representatives

 

11

 

 

 

 

 

 

 

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

12

 

 

2.1

Organization, Qualification and Corporate Power

 

12

 

 

2.2

Capitalization

 

13

 

 

2.3

Authorization of Transaction

 

13

 

 

2.4

Noncontravention

 

14

 

 

2.5

Subsidiaries

 

14

 

 

2.6

Financial Statements

 

14

 

 

2.7

Absence of Certain Changes

 

14

 

 

2.8

Undisclosed Liabilities

 

16

 

 

2.9

Taxes

 

16

 

 

2.10

Assets

 

18

 

 

2.11

Owned Real Property

 

19

 

 

2.12

Real Property Leases

 

19

 

 

2.13

Intellectual Property

 

20

 

 

2.14

Contracts

 

21

 

 

2.15

Accounts Receivable

 

23

 

 

2.16

Powers of Attorney

 

23

 

 

2.17

Insurance

 

23

 

 

2.18

Litigation

 

23

 

 

2.19

Warranties

 

23

 

 

2.20

Employees

 

24

 

 

2.21

Employee Benefits

 

24

 

 

2.22

Environmental Matters

 

27

 

 

2.23

Legal Compliance

 

28

 

 

2.24

Customers and Suppliers

 

29

 

 

2.25

Permits

 

29

 

 

2.26

Certain Business Relationships With Affiliates

 

29

 

 

2.27

Brokers’ Fees

 

29

 

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Page

 

 

 

 

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2.28

Books and Records

 

29

 

 

2.29

Compliance with Healthcare Laws and Regulations

 

30

 

 

 

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARENT

 

31

 

 

3.1

Organization and Corporate Power

 

31

 

 

3.2

Authorization of Transaction

 

31

 

 

3.3

Noncontravention

 

31

 

 

3.4

Financing

 

32

 

 

3.5

SEC Filings

 

32

 

 

 

 

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB REGARDING
MERGER SUB

 

32

 

 

4.1

Organization and Corporate Power

 

32

 

 

4.2

Authorization of Transaction

 

32

 

 

4.3

Litigation

 

32

 

 

4.4

Noncontravention

 

33

 

 

 

 

 

 

 

ARTICLE V PRE-CLOSING AND POST-CLOSING COVENANTS

 

33

 

 

5.1

Closing Efforts

 

33

 

 

5.2

Governmental and Third-Party Notices and Consents

 

33

 

 

5.3

Operation of Business

 

33

 

 

5.4

Access to Information

 

35

 

 

5.5

Notice of Breaches

 

35

 

 

5.6

Exclusivity

 

36

 

 

5.7

Expenses

 

36

 

 

5.8

Proprietary Information

 

36

 

 

5.9

Confidentiality

 

37

 

 

5.10

Insurance Matters

 

37

 

 

5.11

Guarantees

 

37

 

 

 

 

 

 

 

ARTICLE VI CONDITIONS TO CONSUMMATION OF MERGER

 

37

 

 

6.1

Conditions to Obligations of the Parent and Merger Sub

 

37

 

 

6.2

Conditions to Obligations of the Company

 

39

 

 

 

 

 

 

 

ARTICLE VII INDEMNIFICATION

 

40

 

 

7.1

Indemnification by the Indemnifying Members

 

40

 

 

7.2

Indemnification by the Parent

 

41

 

 

7.3

Third Party Actions

 

42

 

 

7.4

Non-Third Party Actions

 

43

 

 

7.5

Survival of Representations and Warranties

 

44

 

 

7.6

Treatment of Indemnity Payments

 

45

 

 

7.7

Limitations

 

45

 

 

 

 

 

 

 

ARTICLE VIII TAX MATTERS

 

46

 

 

8.1

Tax Indemnification

 

46

 

 

8.2

Preparation and Filing of Tax Returns; Payment of Taxes

 

47

 

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Page

 

 

 

 

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8.3

Audits, Assessments, Etc

 

47

 

 

8.4

Termination of Tax Sharing Agreements

 

48

 

 

8.5

Indemnification Claims

 

48

 

 

8.6

Dispute Resolution

 

48

 

 

8.7

Limitations

 

49

 

 

 

 

 

 

 

ARTICLE IX TERMINATION

 

49

 

 

9.1

Termination of Agreement

 

49

 

 

9.2

Effect of Termination

 

49

 

 

 

 

 

 

 

ARTICLE X DEFINITIONS

 

50

 

 

 

 

 

ARTICLE XI MISCELLANEOUS

 

64

 

 

11.1

Press Releases and Announcements

 

64

 

 

11.2

No Third Party Beneficiaries

 

64

 

 

11.3

Entire Agreement

 

64

 

 

11.4

Succession and Assignment

 

64

 

 

11.5

Counterparts and Facsimile Signature

 

64

 

 

11.6

Headings

 

64

 

 

11.7

Notices

 

64

 

 

11.8

Governing Law

 

65

 

 

11.9

Amendments and Waivers

 

66

 

 

11.10

Severability

 

66

 

 

11.11

Construction

 

66

 

 

11.12

Attorneys Fees

 

66

 

 

11.13

Arbitration

 

66

 

 

[Signature page follows]

 

67

 

Disclosure Schedule
Exhibit A - Member Transmittal Letter
Exhibit B – Membership Interest Conversion Calculation
Exhibit C – Calculations of Assumed Distributions to Members
Exhibit D – Accounting Policies
Exhibit E – Escrow Agreement
Exhibit F – Form of Legal Opinion of the Company’s Counsel
Exhibit G – InfoNow License Agreement (form of)
Exhibit H – Form of Legal Opinion of the Parent’s Counsel
Exhibit I – Earnout Calculation Examples
Exhibit J – Earnout Payment Definitions

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AGREEMENT AND PLAN OF MERGER

          This Agreement and Plan of Merger (this “Agreement”) is entered into
as of May 16, 2008 by and among (i) QUALITY SYSTEMS, INC., a California
corporation (the “Parent”), (ii) BUD MERGER SUB, LLC, a Missouri limited
liability company and a wholly-owned subsidiary of the Parent (the “Merger
Sub”), (iii) LACKLAND ACQUISITION II, LLC, dba Healthcare Strategic Initiatives,
a Missouri limited liability company (the “Company”), and (iv) the Members of
the Company who have executed this Agreement (each an “Indemnifying Member” and
collectively, the “Indemnifying Members”).

          This Agreement contemplates a merger of the Merger Sub with and into
the Company with the Company as the surviving entity. In such merger, the
Members will receive cash and Parent Stock in exchange for their Membership
Interests in the Company.

          Now, therefore, in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows.

ARTICLE I
THE MERGER

          1.1 The Merger. Upon and subject to the terms and conditions of this
Agreement, the Merger Sub shall merge with and into the Company. From and after
the Effective Time, the separate company existence of the Merger Sub shall cease
and the Company shall continue as the Surviving Company. The Merger shall have
the effect set forth in Section 347.133 of the Missouri Revised Statutes (the
“MRS”).

          1.2 The Closing. The Closing shall take place at the offices of Rutan
& Tucker, LLP, Costa Mesa, California, or at such other place as the Company and
Parent may mutually agree in writing, commencing at 10:00 a.m. local time on the
third Business Day following the date on which the last of the conditions set
forth in Article VI have been satisfied or waived (other than conditions that
may only be satisfied on the Closing Date, but subject to the satisfaction of
such conditions) or on such other date as the Parent and the Company may
mutually agree in writing (the “Closing Date”).

          1.3 Actions at the Closing.

                    (a) At the Closing:

                              (i) the Company shall deliver to the Parent the
various certificates, instruments and documents referred to in Section 6.1 of
this Agreement;

                              (ii) the Parent and/or Merger Sub shall deliver to
the Company the various certificates, instruments and documents referred to in
Section 6.2 of this Agreement; and

                              (iii) the Surviving Company shall file the Notice
of Merger with the Missouri Secretary of State.

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                    (b) At or prior to the Closing, each Member, shall deliver
to the Parent an appropriate letter of transmittal and instruction of any
documentation or certification, if any, of such Member’s Membership Interests
(each, a “Member Transmittal Letter”) substantially in the form attached hereto
as Exhibit A;

                    (c) Commencing at the Effective Time, immediately upon
receipt of a properly completed Member Transmittal Letter from a Member the
Parent shall pay to such Member: (A) by wire transfer of immediately available
funds to an account designated by such Member in the Member Transmittal Letter
the cash portion of the Closing Amount; and (B) by delivery (or electronic
transfer) from the Parent’s transfer agent, to each Member the Parent Stock
portion of the Closing Amount; into which such Member’s Membership Interests are
converted or exchanged pursuant to Section 1.5(a);

                    (d) At the Effective Time, the Parent shall deposit the cash
and Parent Stock in to the Escrow Fund account with the Escrow Agent in
accordance with Section 1.8.

          1.4 Additional Action. The Surviving Company may, at any time after
the Effective Time, take any action, including executing and delivering any
document, in the name and on behalf of the Company or the Merger Sub, in order
to consummate the series of transactions contemplated by this Agreement.

          1.5 Conversion of Membership Interests; Purchase Consideration. At the
Effective Time, by virtue of the Merger without any further action on the part
of any Party or holder of any of the Membership Interests:

                    (a) Each Membership Interest shall be converted, in
accordance with the formula set forth in Exhibit B attached hereto, into the
right to receive a pro-rata portion, relative to all outstanding Membership
Interests, of the Aggregate Transaction Consideration which shall be payable,
without interest, at any time in which a portion of the Aggregate Transaction
Consideration is distributed in accordance with the provisions of this Agreement
or the Escrow Agreement (each a “Payment Date”).

                    (b) Whenever cash payments are due by the Parent under this
Agreement, Parent shall pay each Member by wire transfer of immediately
available funds to the account designated by such Member in his or her Member
Transmittal Letter, the amount determined in accordance with the preceding
provision of Section 1.5(a).

                    (c) One hundred percent (100%) of the membership interest of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and thereafter evidence one hundred percent (100%) of the
Membership Interests of the Surviving Company.

                    (d) For illustrative purposes only, a spreadsheet showing
the calculations for the assumed distributions to each Member is set forth on
Exhibit C attached hereto.

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          1.6 Closing Amount Adjustment.

                    (a) Estimated Net Debt.

                              (i) The Closing Amount will be adjusted downward
by the amount, if any, by which the Estimated Net Debt as of the Closing is
greater than Three Million Six Hundred Fifty-five Thousand Two Hundred Six
Dollars ($3,655,206).

                              (ii) Two Business Days before the anticipated
Closing Date, the Company will deliver to Parent a certificate setting forth, as
of the date thereof, an estimate of the amount of Cash and Debt expected as of
the Closing Date (on a pro forma basis giving effect to the transactions
contemplated by the Agreement)(the difference between such Debt less Cash, the
“Estimated Net Debt”). The amount of Debt will be itemized by creditor, with
supporting detail, and the amount of Cash will specify cash on hand and each
cash equivalent, with supporting detail. If the amount of Estimated Net Debt as
of the Closing Date is more than Three Million Six Hundred Fifty-five Thousand
Two Hundred Six Dollars ($3,655,206) (the “Target Net Debt”), the cash portion
of the Closing Amount will be reduced by the amount of such excess (the amount
of such decrease, if any, shall be referred to as the “Estimated Net Debt
Adjustment”). Under no circumstances shall the amount of Debt be in excess of
$3,750,000 (the “Maximum Allowable Closing Debt”) unless such restriction is
waived in writing by Parent.

                    (b) Estimated Working Capital Adjustment

                              (i) The Closing Amount will be adjusted downward
by the amount by which Estimated Closing Date Working Capital is less than a
negative ($586,103) exclusive of $385,000 subordinated member debt owing to
Maxine Hirsch (the “Target Working Capital”).

                              (ii) Two Business Days before the anticipated
Closing Date, the Company will deliver to Parent a certificate setting forth, as
of the date thereof, an estimate of the Closing Date Working Capital (the
“Estimated Working Capital”), with supporting detail. If the Estimated Working
Capital set forth in such certificate is less than the Target Working Capital,
the cash portion of the Closing Amount will be decreased by such shortfall (the
amount of such decrease shall be referred to as the “Estimated Working Capital
Adjustment”).

                    (c) Closing Amount Adjustment. Within five (5) Business Days
after the final determination of the Final Balance Sheet pursuant to Section
1.6(d) of this Agreement, the Closing Amount will be adjusted again (the amount
of any such adjustment shall be referred to as the “Closing Amount Adjustment”)
and the Members will make such payments to the Surviving Company as are
necessary, if any, as follows: (i) an amount equal to that amount by which the
Estimated Net Debt is less than the Net Debt reflected on such Final Balance
Sheet (only in the event that Net Debt is greater than the Target Net Debt); and
(ii) an amount equal to that amount by which the Estimated Working Capital is
greater than the Closing Date Working Capital reflected on such Final Balance
Sheet (only in the event that Closing Date Working Capital is less than Target
Working Capital). In the event a Closing Amount Adjustment is due to the Parent
hereunder, the amount shall be disbursed (i) first, from the cash portion of the
Escrow Fund, (ii) second, from the Parent Stock portion of the Escrow Fund
(valued using the Escrow Stock Valuation), (iii) third, to the extent the Escrow
Fund is insufficient to pay in full

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such Closing Amount Adjustment, from any other amounts of the Aggregate
Transaction Consideration payable to the Members hereunder, whether by right of
setoff or otherwise upon notice of such election to the Member Representatives,
or (iii) fourth, if amounts of the Aggregate Transaction Consideration payable
hereunder are not sufficient, upon demand from the Indemnifying Members. No
Closing Amount Adjustment shall be paid or due to any of the Members.

                    (d) Adjustment Procedures. The adjustments described in
Section 1.6(c) will be determined as follows:

                              (i) Within fifty (50) days after the Closing Date,
the Parent shall prepare, in accordance with GAAP, and deliver to the Member
Representatives a balance sheet of the Company as of the Closing Date (the
“Final Balance Sheet”). The parties acknowledge and agree that, for purposes of
determining the Closing Amount Adjustment pursuant to this Section 1.6(d)(i),
the Final Balance Sheet shall be prepared on a basis consistent with and
utilizing the same principles, practices and policies of the Company, as those
used in preparing the Most Recent Balance Sheet, subject to the Accounting
Policies. The Parties acknowledge and agree that the items listed on Section
1.6(d)(i) of the Disclosure Schedules shall be included on the Final Balance
Sheet.

                              (ii) Upon receipt of the Final Balance Sheet, the
Member Representatives and any professionals chosen by them shall have the right
to review the Surviving Company’s books and records relating to, and the work
papers of the Parent and its advisors utilized in preparing the Final Balance
Sheet. The Final Balance Sheet shall be binding for purposes of the Closing
Amount Adjustment unless the Member Representatives present to the Parent within
20 Business Days after receipt of the Final Balance Sheet from the Parent
written notice of disagreement specifying in reasonable detail the nature and
extent of the disagreement.

                              (iii) If the Member Representatives deliver a
timely notice of disagreement, the Parent and the Member Representatives shall
attempt in good faith during the thirty (30) days immediately following the
Parent’s receipt of timely notice of disagreement to resolve any disagreement
with respect to the Final Balance Sheet. If, at the conclusion of such 30-day
period, the Parent and the Member Representatives have not resolved their
disagreements regarding the Final Balance Sheet, the Parent and the Member
Representatives shall refer the items of disagreement for final determination to
the Orange County, California office of a regional accounting firm which is
mutually acceptable to the Parent and the Member Representatives (the
“Adjustment Accountants”). However, if the Parent and Member Representatives are
unable to agree on such a firm which is willing to so serve, the Parent shall
deliver to the Member Representatives a list of three independent California
regional accounting firms with offices in Orange County, California, that are
not currently nor have they been during the past five (5) years, auditors, tax
advisors or other consultants to the Parent (or Parent’s then current
subsidiaries, officers, or directors), the Company or the Member
Representatives, and the Member Representatives shall select one of such three
firms to be the Adjustment Accountants within five (5) Business Days. The
parties will be reasonably available for such firm, and shall instruct such firm
to render a final determination within the 20 days immediately following the
referral to the Adjustment Accountants. The Final Balance Sheet shall be deemed
to be

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conclusive and binding on the Parent and the Members upon (A) the failure of the
Member Representatives to deliver to the Parent a notice of disagreement within
20 Business Days of their receipt of the Final Balance Sheet prepared by the
Buyer, (B) resolution of any disagreement by mutual agreement of the Parent and
the Member Representatives after a timely notice of disagreement has been
delivered to the Parent, or (C) notification by the Adjustment Accountants of
their final determination of the items of disagreement submitted to them.

                    (e) The fees and disbursements of the Adjustment Accountants
under this Section 1.6(e) shall be paid by the Parent, on the one hand, and the
Members, on the other hand, based on their Pro Rata Award. In the event the
Members are obligated to pay the fees and disbursements of the Adjustment
Accountants hereunder, such amounts shall be disbursed (i) first, from the cash
portion of the Escrow Fund, (ii) second, to the extent the cash portion of the
Escrow Fund is insufficient to pay in full such Closing Amount Adjustment, then
from the Parent Stock portion of the Escrow Fund (valued using the Escrow Stock
Valuation), (iii) third, from any other amounts of the Aggregate Transaction
Consideration payable to the Members hereunder, whether by right of setoff or
otherwise, or (iv) fourth, if amounts payable hereunder are not sufficient, upon
demand by Parent, from the Indemnifying Members.

          1.7 Earnout Payment.

                    (a) Within fifty (50) days after the second anniversary of
the Closing Date (which two year period from the Closing Date shall be referred
to as the “Earnout Period”), the Parent will determine in good faith a
contingent payment for such Earnout Period in an amount not to exceed $1,000,000
(the “Earnout Payment”) (subject to the additional $650,000 earnout override
described below (the “Earnout Override”) and deliver a written certificate
containing a calculation of such amount specifying in reasonable detail the
elements of each component thereof (the “Earnout Certificate”)) as set forth
herein such that the Member Representatives can confirm such calculation was
made pursuant to the terms of this Agreement, GAAP and subject to the Accounting
Policies. The Earnout Payment and Earnout Override shall be divided into two
equal parts with each part separately earned independent of the other part
except as set forth in the criteria set forth below:

 

 

 

(i) the revenue earnout which shall account for 50% of the possible Earnout
Payment and, if applicable, the Earnout Override, and

 

 

 

(ii) the income earnout which shall account for the other 50% of the possible
Earnout Payment and, if applicable, the Earnout Override. The determination of
the Earnout Payment and Earnout Override shall be made in accordance with the
following terms and conditions set forth in this Section 1.7:

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Earnout Payment Definitions:

                              The definitions of (i) Fiscal Year 2009 Earnout
Targets, (ii) Fiscal Year 2010 Earnout Targets, and (iii) Aggregate Fiscal Year
2009/2010 Earnout Target, are each set forth on Exhibit J attached hereto.

The Earnout calculation:

          1. If, for Fiscal Year 2009, either:

                    (i) the Company’s gross revenues are less than 80% of the
Fiscal Year 2009 Revenue Target; or

                    (ii) the Company’s pre-tax income is less than 80% of the
Fiscal Year 2009 Income Target;

                    (iii) then, no Earnout Payment or Earnout Override shall be
made at the end of the Earnout Period.

          2. If, for Fiscal Year 2010, either:

                    (i) the Company’s gross revenues are less than 80% of the
Fiscal Year 2010 Revenue Target; or

                    (ii) the Company’s pre-tax income is less than 80% of the
Fiscal Year 2010 Income Target;

                    (iii) then, no Earnout Payment or Earnout Override shall be
made at the end of the Earnout Period.

          3. If:

                    (i) for Fiscal Year 2009, (A) the Company achieves at least
80% of the Fiscal Year 2009 Revenue Target, and (B) the Company achieves at
least 80% of the Fiscal Year 2009 Income Target; and

                    (ii) for Fiscal Year 2010, (A) the Company achieves at least
80% of the Fiscal Year 2010 Revenue Target, and (B) the Company achieves at
least 80% of the Fiscal Year 2010 Income Target,

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                    (iii) then, the Earnout Payment shall be made at the end of
the Earnout Period according to the following (the amounts set forth are
examples of data points along the continuum; it being the intention of the
parties that the amounts are to be calculated on a continuous, linear basis –
(for example, in the first table immediately below, a percentage of Fiscal Year
2009/2010 Aggregate Gross Revenue of 82.5 in the first column would result in
percentage of Revenue Earnout Earned of 56.25):

          Revenue Earnout Calculation

 

 

 

Percentage of Fiscal Year
2009/2010 Aggregate Gross
Revenue

 

Percentage of Revenue
Earnout Earned

 

80

 

50

85

 

62.5

90

 

75

95

 

87.5

100

 

100

          Income Earnout Calculation

 

 

 

Percentage of Fiscal Year
2009/2010 Aggregate Pre-Tax
Income

 

Percentage of Income
Earnout Earned

 

80

 

50

85

 

62.5

90

 

75

95

 

87.5

100

 

100

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The Earnout Override:

          Subject to the conditions of parts 1., 2. and 3. set forth under the
“The Earnout calculation” paragraph of this Section 1.7 (see above), the
following Earnout Override Payments may be made:

          4. If the Company achieves 115% or greater of its Fiscal Year
2009/2010 Aggregate Revenue Target, $325,000 shall be paid pursuant to the
Earnout Override; and

          5. If the Company achieves 115% or greater of its Fiscal Year
2009/2010 Aggregate Pre-Tax Income Target, $325,000 shall be paid pursuant to
the Earnout Override.

          6. Provided, however, that in no case shall the total Earnout Payments
(inclusive of the Earnout Override set forth in parts 4 and 5 immediately above)
under this Agreement exceed, in the aggregate, $1,650,000.

          7. Examples of possible outcomes for the Earnout and Earnout Override
are set forth on Exhibit I attached hereto.

                    (b) Dispute Resolution.

                              (i) The amount of the Earnout Payment and Earnout
Override set forth in the Earnout Certificate shall be binding on the Members
unless the Member Representatives present to the Parent within thirty (30) days
after receipt of the Earnout Certificate written notice of disagreement
specifying in reasonable detail the nature and extent of the disagreement. Upon
receipt of the Earnout Certificate, the Member Representatives and any
professionals chosen by them shall have the right to review the Surviving
Company’s books and records relating to any information contained in or related
to the Earnout Certificate. If the Member Representatives deliver a timely
notice of disagreement, Parent and the Member Representatives shall attempt in
good faith during the sixty (60) days immediately following the Parent’s receipt
of the Member Representatives’ timely notice of disagreement to resolve any
disagreement with respect to such Earnout Payment or Earnout Override.

                              (ii) If, at the end of the 60-day period
referenced in subsection (i) above, Parent and the Member Representatives have
not resolved all disagreements with respect to whether the calculation of the
Earnout Payment or the Earnout Override is in accordance with the terms of
Section 1.7 of this Agreement, GAAP, and the Accounting Policies, Parent and the
Member Representatives will refer the items of disagreement to the Orange
County, California office of a regional Orange County, California accounting
firm mutually acceptable to the Parent and the Member Representatives (the
“Earnout Accountants”) for final determination. However, if the Parent and the
Member Representatives are unable to agree on an accounting firm willing to so
serve, the Parent shall deliver to the Member Representatives a list of three
independent

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Orange County, California regional accounting firms that are not (and have not
been for the past five (5) years) auditors, tax advisors or other consultants to
the Parent (or its then current subsidiaries, officers or directors) or any of
its Affiliates or the Company or the Member Representatives or their respective
Affiliates, and the Member Representatives shall select one of such three firms
to be the Earnout Accountants within five (5) Business Days. The parties will be
reasonably available for such firm, and shall instruct such firm to render a
final determination and work diligently to facilitate the Earnout Payment and
Earnout Override within the 30-day period immediately following the referral to
the Earnout Accountants. The Earnout Accountants, Parent and the Member
Representatives will enter into such engagement letters as required by the
Earnout Accountants to perform under this Section 1.7(c)(ii). The determination
of the Earnout Accountants will be final and binding on the Parties. The fees
and disbursements of the Earnout Accountants under this Section 1.7(c)(ii) will
be paid by the Parent, on the one hand, and the Member, on the other hand, based
on their Pro Rata Award. If any amount is payable by the Members, such amount
will be (i) first deducted from the Earnout Payments and Earnout Overrides, if
any, (ii) second, from the cash portion of the Escrow Fund, (iii) third, to the
extent the cash portion of the Escrow Fund is insufficient to pay in full such
fees, then from the Parent Stock portion of the Escrow Fund (valued using the
Escrow Stock Valuation), and (iv) fourth, if amounts payable in this Section
6(b)(ii) are still not sufficient, from the Indemnifying Members.

                    (c) Conduct of Business.

                              (i) Parent is entitled to manage and operate the
Surviving Company and its businesses in its sole and absolute discretion;
provided, however, that (i) Parent will not make any special allocations of
expenses or deferrals of revenue with respect to the Surviving Company outside
the historical, usual and customary business and accounting practices of Parent
with a view toward negatively impacting the Earnout Payment and Earnout Override
and (ii) Parent will not cause the Surviving Company to share the burden of
“Corporate” allocations of overhead as historically accounted for by Parent.

                              (ii) The Parties acknowledge and agree that,
unless otherwise agreed to in writing by each of Parent and the Member
Representatives, in its and their sole discretion, during the Earnout Period,
Parent will not cause to be operated through the Surviving Company any business
other than the Business as of the Closing Date.

                              (iii) Parent will maintain or cause to be
maintained separate or otherwise identifiable (e.g., in the case of a shared
general ledger) books and records for the Surviving Company at all times during
the Earnout Period in a manner reasonably necessary for the financial statements
of the Surviving Company to be prepared in accordance with GAAP (and in a manner
consistent with the Accounting Policies) and the Earnout Payment and Earnout
Override to be readily calculable therefrom. In calculating the Earnout Payment
and Earnout Override, Parent shall use the same Accounting Policies, procedures,
policies, methods, elections and allocations as were used in preparing the Final
Balance Sheet.

                    (d) The Earnout Payment and the Earnout Override, if any,
shall be paid to the Members within fourteen (14) calendar days after such
amounts have been determined for the Earnout Period, in the manner set forth
under Section 1.5(b).

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                    (e) The Parties agree to discuss in good faith any issues
concerning the Earnout and Earnout Override as administered pursuant to this
Section 1.7.

          1.8 Escrow.

                    (a) Escrow Fund. On the Closing Date, the Parent or the
Merger Sub shall deposit with the Escrow Agent the Escrow Fund. The Escrow Fund
shall represent contingent Aggregate Transaction Consideration payable to the
Members hereunder to the extent the Escrow Fund has not been reduced by
operation of this Agreement or in accordance with the Escrow Agreement. The
Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement
pursuant to the terms thereof. The Escrow Fund shall be held until the second
anniversary of the Closing Date (except as specifically provided in Section
1.8(a)(ii), below) as a trust fund and shall not be subject to any lien,
attachment trustee process or any other judicial process of any creditor of any
party, and shall be held and disbursed solely for the purposes and in accordance
with the terms of the Escrow Agreement and as otherwise set forth herein;
provided, however, notwithstanding anything to the contrary contained in this
Agreement or the Escrow Agreement (i) one-third of all shares of Parent Stock
then in the Escrow Fund shall be released therefrom on the first anniversary of
the Closing Date and (ii) One Million Four Hundred Thousand Dollars ($1,400,000)
of Escrowed Parent Stock, valued using the Escrow Stock Valuation, shall be
released on the earlier of (A) the fifth anniversary of the Closing Date; or (B)
upon joint agreement of Parent and the Member Representatives confirming the
termination or other final resolution of the “Coding Activities” matter with
respect to the Company (as referenced in the Disclosure Schedule) has occurred.

                    (b) The adoption of this Agreement and the approval of the
Merger by the Members shall constitute approval of the Escrow Agreement and of
all of the arrangements relating thereto, including the placement of the Escrow
Fund in escrow and the appointment of the Member Representatives to act on
behalf of the Members.

          1.9 Articles of Organization and Operating Agreement of Surviving
Company.

                    (a) The Articles of Organization of the Surviving Company
immediately following the Effective Time shall be the same as the Articles of
Organization of the Company immediately prior to the Effective Time.

                    (b) The Operating Agreement of the Company immediately
following the Effective Time shall be the same as the Operating Agreement of the
Company immediately prior to the Effective Time.

          1.10 No Further Rights. From and after the Effective Time, membership
interests of the Merger Sub shall be deemed to be outstanding, and holders of
certificates, if any, or evidence of Merger Sub ownership shall cease to have
any rights with respect thereto except as provided herein or by law.

          1.11 Member Releases.

                    (a) Effective as of the Closing, each of the Indemnifying
Members agrees not to sue and fully releases and discharges the Company and its
Members, managers, officers,

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assigns and successors, past and present (collectively, “Releasees”), with
respect to and from any and all claims, issuances of the Company’s units, notes
or other securities, any demands, rights, liens, contracts, covenants,
proceedings, causes of action, obligations, debts, and losses of whatever kind
or nature in law, equity or otherwise, whether now known or unknown, and whether
or not concealed or hidden, all of which each Indemnifying Member now owns or
holds or has at any time owned or held against Releasees connected with or
relating to any matter occurring on or prior to the Closing Date; provided,
however, that nothing in this Section 1.11 will be deemed to constitute a
release by any Indemnifying Member of any right or claim of such Indemnifying
Member arising out of this Agreement or any agreement entered into in connection
with this Agreement or any employee benefit plan of the Company which benefit is
separately disclosed on the Disclosure Schedule and identifying the Indemnifying
Member entitled to such benefit.

                    (b) It is the intention of each Indemnifying Member that
such release be effective as a bar to each and every claim, demand and cause of
action hereinabove specified.

          1.12 Company Closing Expenses. At the Closing, subject to Section 5.7,
Company shall cause the payment of the Company Closing Expenses directly to
those Persons designated in writing on Section 1.12 of the Disclosure Schedule
as being entitled thereto. The Company and the Member Representatives hereby
represents and warrants that there will be no other Company Closing Expenses
owed except to those parties set forth in Section 1.12 of the Disclosure
Schedule as the same may be updated from time to time with Parent’s prior
written consent (which shall not be unreasonably withheld). The Company Closing
Expenses shall be taken in to account in the computation of the Final Balance
Sheet under Section 1.6(d).

          1.13 Appointment of Member Representatives.

                    (a) The Member Representatives are hereby authorized to act
as the Members’ representatives and agents for all purposes under this
Agreement, including all agreements and documents annexed as Exhibits hereto.

                    (b) Should either or both Member Representatives resign or
be unable to serve, the Member or Members having received a majority of the
Aggregate Transaction Consideration distributed as of the latest Payment Date
shall appoint a single substitute agent to take on the responsibilities of the
Member Representatives, whose appointment shall be effective on the date of the
prior Members Representative’s resignation or incapacity.

                    (c) By way of illustration only, and without limitation, the
Member Representatives shall have the authority to (i) execute on behalf of each
Member, as fully as if the Members were acting on their own behalf, any and all
documents and agreements referred to herein, including the Escrow Agreement as
the Members’ representative, (ii) give and receive notice or instructions
permitted or required under this Agreement or the Escrow Agreement, (iii)
authorize the release of the amounts held in the Escrow Fund to pay any Claimed
Amount, or (iv) to undertake any actions with respect to the resolution of a
Dispute or any disagreement with respect to the amount of any Earnout Payment or
Earnout Override, including partaking in any dispute resolution process.

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                    (d) Any notice, direction or communication received by
Parent, Merger Sub or the Surviving Company from the Member Representatives, or
delivered to the Member Representatives by Parent, Merger Sub or the Surviving
Company, shall be binding upon the Members, and each of them. The Member
Representatives shall act in all matters on behalf of the Members and Parent and
Merger Sub and, after the Effective Time, the Surviving Company shall be
entitled to rely on the actions of the Member Representatives hereunder acting
in concert or alone as the actions of the Members. Parent, Merger Sub and the
Surviving Company may deliver notices and communications to the Members
hereunder through the Member Representatives at the address set forth in this
Agreement for notices, and such delivery shall be deemed to have been made to
any or all of the Members. None of Parent, Merger Sub nor the Surviving Company
shall pay any costs or expenses incurred by the Member Representatives in
carrying out their obligations hereunder. Each of Parent, Merger Sub and the
Surviving Company consents to the appointment of the Member Representatives to
act as described hereunder.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The Company represents and warrants to the Parent that, except as set
forth in the Disclosure Schedule, the statements contained in this Article II
are true and correct as of the date of this Agreement and will be true and
correct as of the Closing Date, except to the extent such representations and
warranties are specifically made as of a particular date (in which case such
representations and warranties will be true and correct as of such date). The
Company shall have the right to supplement and update the Disclosure Schedule to
reflect events that have occurred between the date of this Agreement and the
Closing and could not have been disclosed at the date of this Agreement;
provided, however, that no such supplemental or updated information shall be
deemed to avoid or cure any misrepresentation or breach of warranty or
constitute an amendment of any breach of representation or warranty made by the
Company as of the date of this Agreement; and provided, further, however, that
such right shall not be deemed in any way to waive, modify or amend the
condition to Closing set forth in Section 6.1(i) hereof unless the Parent
expressly waives the condition in writing. The Disclosure Schedule shall be
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in this Article II. The disclosures in any
section or subsection of the Disclosure Schedule shall be deemed to be listed or
disclosed on other sections of the Disclosure Schedule to the extent such
disclosure is either (i) appropriately cross referenced in the other applicable
sections or (ii) clear and unambiguous that such disclosure is applicable to the
other sections and subsections of the Disclosure Schedule.

          2.1 Organization, Qualification and Corporate Power. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Missouri. The Company is duly qualified to
conduct business and is in good standing under the laws of each jurisdiction
listed in Section 2.1 of the Disclosure Schedule, which jurisdictions constitute
the only jurisdictions in which the nature of the Company’s businesses or the
ownership or leasing of its properties requires such qualification, except where
the failure to be so authorized, qualified or licensed would not result in a
Material Adverse Effect. The Company has all requisite company power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. The Company has furnished to

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the Parent true, complete and correct copies of its Articles of Organization and
Operating Agreement. The Company is not in default under or in violation of any
provision of its Articles of Organization or Operating Agreement.

          2.2 Capitalization.

                    (a) Section 2.2(a) of the Disclosure Schedule sets forth the
authorized and outstanding Membership Interests of the Company which consists of
such ownership interests in the Company as set forth in the Operating Agreement.

                    (b) Section 2.2(b) of the Disclosure Schedule sets forth a
complete and accurate list, as of the date of the Agreement, of the Members,
showing the percentage of Membership Interests, and the class or series, if any,
of such Membership Interests, held by each Member. No outstanding Membership
Interests constitute restricted Membership Interests or are otherwise subject to
a repurchase or redemption right, indicating the name of the applicable Member,
the vesting schedule (including any acceleration provisions with respect
thereto), and the repurchase price payable by the Company. All of the issued and
outstanding Membership Interests of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. All of the issued and
outstanding Membership Interests and securities of the Company have been
offered, issued and sold by the Company in compliance with all applicable
federal and state securities laws. None of the issued and outstanding Membership
Interests are certificated.

                    (c) The Company does not have any Membership Interest
Purchase Plans.

                    (d) No subscription, warrant, option, convertible security
or other right (contingent or otherwise) to purchase or acquire any Membership
Interest of the Company is authorized or outstanding. The Company has no
obligation (contingent or otherwise) to issue any subscription, warrant, option,
convertible security or other such right, or to issue or distribute to holders
of any Membership Interest, any evidences of indebtedness or assets of the
Company. The Company has no obligation (contingent or otherwise) to purchase,
redeem or otherwise acquire any Membership Interest or any subinterest therein
or to pay any dividend or to make any other distribution in respect thereof.
There are no outstanding or authorized Membership Interest appreciation, phantom
Membership Interest or similar rights with respect to the Company.

                    (e) Except as set forth in Section 2.2(e) of the Disclosure
Schedule, there is no outstanding agreement, written or oral, between the
Company and any holder of its securities, or, to the best of the Company’s
Knowledge, among any holders of its securities, relating to the sale or transfer
(including agreements relating to rights of first refusal, co-sale rights or
“drag-along” rights), registration under the Securities Act, or voting, of the
Membership Interests of the Company.

          2.3 Authorization of Transaction. The Company has all requisite power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary

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company action on the part of the Company, except for the Requisite Member
Approval. This Agreement has been duly and validly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent such enforceability is subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other law affecting or
relating to creditors’ rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

          2.4 Noncontravention. Subject to the filing of the Notice of Merger as
required by the MRS and the receipt of the Requisite Member Approval, neither
the execution and delivery by the Company of this Agreement, nor the
consummation by the Company of the transactions contemplated hereby, will (a)
conflict with or violate any provision of the Articles of Organization or
Operating Agreement of the Company, (b) require on the part of the Company any
notice to or filing with, or any permit, authorization, consent or approval of,
any Governmental Entity, (c) except as set forth in Section 2.4(c) of the
Disclosure Schedule, conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party the right to terminate,
modify or cancel, or require any notice, consent or waiver under, any contract
or instrument of a value in excess of $50,000 per year or duration in excess of
12 months, to which the Company is a party or by which the Company is bound or
to which any of its assets is subject, (d) result in the imposition of any
Security Interest upon any assets of the Company, or (e) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of its properties or assets.

          2.5 Subsidiaries. Except as disclosed in Section 2.5 of the Disclosure
Schedule, neither the Company, nor its Members that are to become employees of
the Surviving Company as part of the transactions contemplated hereby, have any
direct or indirect equity participation or similar interest in any corporation,
partnership, limited liability company, joint venture, trust or other business
association or entity, other than (i) as a passive investor who does no more
than hold such investor’s investment in the entity and does not directly or
indirectly render services or advice to such entity, and (ii) outside the area
and market in which the Business is conducted.

          2.6 Financial Statements. The Company has provided to the Parent the
Financial Statements, copies of which are attached to Section 2.6 of the
Disclosure Schedule. The Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered thereby,
fairly present in all material respects the financial condition, results of
operations and cash flows of the Company as of the respective dates thereof and
for the periods referred to therein and are consistent with the books and
records of the Company; provided, however, that the Financial Statements are
subject to normal recurring year-end adjustments (which will not be material)
and do not include notes.

          2.7 Absence of Certain Changes. Since the Most Recent Balance Sheet
Date, the Company has operated its business only in the Ordinary Course of
Business, and, except as set forth on Section 2.7 of the Disclosure Schedule:

                    (a) the Company has not incurred any Debt other than changes
in the principal balance of the Company’s line of credit;

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                    (b) the Company has not made any acquisition (by merger,
consolidation, or acquisition of stock or assets or otherwise) of any other
Person;

                    (c) the Company has not created any Security Interest on any
of its assets, tangible or intangible;

                    (d) except for sales to customers of the Company’s products
and services in the Ordinary Course of Business, the Company has not sold,
assigned or transferred any of its tangible assets;

                    (e) the Company has not entered into or amended (i) any
customer agreement with a Person that is a Significant Person or (ii) any
agreement, other than a customer agreement, that is or would be a Material
Contract;

                    (f) the Company has not (i) entered into or amended any
employment or severance or similar agreement with any employee or any collective
bargaining agreement, (ii) adopted or amended, or increased the payments to or
benefits under, any profit sharing, bonus, thrift, option, deferred
compensation, savings, insurance, restricted equity, pension, retirement, or
other employee benefit plan for or with any of its directors, officers or
employees or (iii) granted any increase in compensation payable or to become
payable or the benefits provided to its directors, officers or employees, other
than in the Ordinary Course of Business;

                    (g) the Company has not (i) made or changed any Tax election
or (ii) made any material change in any method of accounting or accounting
practice used by it, other than any such changes required by GAAP;

                    (h) the Company has conducted and reflected in its books and
records each transaction referenced in Section 2.26 of the Disclosure Schedule
on an arm’s-length basis;

                    (i) there has been no change, event or development that has
individually or in the aggregate, a Material Adverse Effect;

                    (j) there has not been any material casualty, loss, damage
or destruction (whether or not covered by insurance) to any asset of the
Company;

                    (k) the Company has not made any single expenditure or
commitment to purchase personal property or for additions to property, plant and
equipment in excess of $10,000;

                    (l) the Company has not issued, sold or otherwise disposed
of any debenture, note, or Equity Interest or modified or amended any right of
any holder thereof;

                    (m) the Company has not amended, terminated, waived,
disposed of, or permitted to lapse, any material Permit;

                    (n) there has not been any amendment to the Articles of
Organization or Operating Agreement of the Company; and

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                    (o) the Company has not materially altered the nature of its
business or business plan.

          2.8 Undisclosed Liabilities. Except as provided in Section 2.8 of the
Disclosure Schedule, the Company has no liability (whether known or unknown,
whether absolute or contingent, whether liquidated or unliquidated and whether
due or to become due), except for (a) liabilities shown or reserved for on the
Most Recent Balance Sheet, (b) liabilities which have arisen since the Most
Recent Balance Sheet Date in the Ordinary Course of Business, (c) liabilities
incurred in connection with the negotiation of this Agreement and specifically
set forth in Section 2.8 of the Disclosure Schedule and clearly identified as
“liabilities not reflected on the Most Recent Balance Sheet”, (d) liabilities
specifically and clearly set forth in other sections of the Disclosure Schedule
and clearly identified as “liabilities not reflected on the Most Recent Balance
Sheet”, and (e) contractual and other liabilities incurred in the Ordinary
Course of Business which are not required by GAAP to be reflected on a balance
sheet or that would not otherwise be required to be disclosed in the notes of
the Company’s financial statements if such notes had been prepared.

          2.9 Taxes.

                    (a) The Company has properly filed on a timely basis all
material Tax Returns that it is and was required to file, and all such Tax
Returns were true, correct and complete in all respects and it has set forth in
Section 2.9(a) of the Disclosure Schedule a list of all such Tax Returns that it
is required to file. Except as set forth in Section 2.9(a) of the Disclosure
Schedule, the Company has properly paid on a timely basis all Taxes, whether or
not shown on any of its Tax Returns, that were due and payable. All Taxes that
the Company is or was required by law to withhold or collect have been withheld
or collected and, to the extent required, have been properly paid on a timely
basis to the appropriate Governmental Entity. The Company has complied with all
information reporting and back-up withholding requirements including maintenance
of the required records with respect thereto, in connection with amounts paid to
any employee, independent contractor, creditor or other third party.

                    (b) Except as set forth on Section 2.9(b) of the Disclosure
Schedule, the unpaid Taxes of the Company for periods ended on or prior to the
Most Recent Balance Sheet Date do not exceed the accruals and reserves for Taxes
(excluding accruals and reserves for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the Most Recent
Balance Sheet.

                    (c) The Company is not and has never been taxed as a
corporation or association taxable as a corporation under the Code or the laws
of any state. The Corporation is not and has never been a member of any group of
corporations with which it has filed (or been required to file) consolidated,
combined, or unitary Tax Returns. The Company has no actual or potential
liability under Treasury Regulation Section 1.1502-6 (or any comparable or
similar provision of federal, state, local, or foreign law), or as a transferee
or successor, by contract, or otherwise for any Taxes of any Person (including
without limitation any affiliated, combined, or unitary group of corporations or
other entities that included the Company during a prior Taxable period). The
Company is not a party to, bound by, or obligated under any Tax allocation, Tax
sharing, Tax indemnity or similar agreement.

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                    (d) The Company has delivered to the Parent (i) complete and
correct copies of all income Tax Returns of the Company relating to income Taxes
for all Taxable periods for which the applicable statute of limitations has not
yet expired beginning on or after January 1, 2004, and (ii) complete and correct
copies of all private letter rulings, revenue agent reports, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, and pending ruling requests submitted by, received by or
agreed to by or on behalf of the Company relating to Taxes for all Taxable
periods for which the applicable statute of limitations has not yet expired. The
income Tax Returns of the Company for the period beginning after January 1, 2004
have not been audited by the Internal Revenue Service or other applicable
Governmental Entity or are closed by the applicable statute of limitations for
all periods through and including the Taxable period specified in Section 2.9(d)
of the Disclosure Schedule. The Company has delivered or made available to the
Parent complete and correct copies of all other Tax Returns of the Company
relating to Taxes for all Taxable periods beginning on or after January 1, 2004.
No examination or audit of any Tax Return of the Company by any Governmental
Entity is currently in progress or, to the Knowledge of the Company, threatened
or contemplated, and the Company does not know of any basis upon which a Tax
deficiency or assessment could reasonably be expected to be asserted against the
Company. The Company has not been informed in writing by any jurisdiction that
the jurisdiction believes that the Company was required to file any Tax Return
that was not filed.

                    (e) The Company has not (i) waived any statute of
limitations which waiver is still in effect with respect to Taxes or agreed to
extend the period for assessment or collection of any Taxes, (ii) requested any
extension of time within which to file any Tax Return, which Tax Return has not
yet been filed, or (iii) executed or filed any power of attorney relating to
Taxes with any Governmental Entity.

                    (f) The Company is not a party to any Tax litigation. The
Company is not nor has it ever been a party to any specific transaction which
will result in the imposition of penalties upon the Company by any taxing
authority.

                    (g) There are no Security Interests or other encumbrances
with respect to Taxes upon any of the assets or properties of the Company, other
than with respect to Taxes not yet due and payable.

                    (h) The Company has not made any payments, nor is it
obligated to make any payments, nor is it a party to any agreement, contract,
arrangement, or plan that could obligate it to make any payments, that are or
could be, separately or in the aggregate, “excess parachute payments” within the
meaning of Section 280G of the Code (without regard to Sections 280G(b)(4) and
280G(b)(5) thereof).

                    (i) No Member holds Membership Interests that are
non-transferable and subject to a substantial risk of forfeiture within the
meaning of Section 83 of the Code with respect to which a valid election under
Section 83(b) of the Code has not been made, and no payment to any Member of any
portion of the consideration payable pursuant to this Agreement will result in
compensation or other income to such Member with respect to which the Parent or
the Company would be required to deduct or withhold any Taxes.

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                    (j) None of the assets of the Company (i) is property that
is required to be treated as being owned by any other person pursuant to the
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954,
(ii) is “tax-exempt use property” within the meaning of Section 168(h) of the
Code, (iii) directly or indirectly secures any debt the interest on which is tax
exempt under Section 103(a) of the Code, or (iv) is subject to a lease under
Section 7701(h) of the Code or under any predecessor section.

                    (k) The Company is not subject to (i) any change in method
of accounting for a Taxable period ending on or prior to the Closing Date (or as
a result of the transactions contemplated by this Agreement) under Section 481
of the Code (or any corresponding or similar provision of federal, state, local
or foreign Tax law); (ii) any “closing agreement” as described in Section 7121
of the Code (or any corresponding or similar provision of state, local or
foreign Tax law) executed on or prior to the Closing Date; or (iii) any
installment sale or open transaction disposition made on or prior to the Closing
Date. The Company will include in its income tax returns for periods ending on
or prior to the Closing Date any prepaid amounts received on or prior to the
Closing Date. The Company currently utilizes, the cash method of accounting for
income Tax purposes and such method of accounting has not changed in the past
five (5) years.

                    (l) The Company has not participated in or cooperated with
an international boycott within the meaning of Section 999 of the Code.

                    (m) Section 2.9(m) of the Disclosure Schedule sets forth
each jurisdiction (other than United States federal) in which the Company files,
or, is required to file or has been required to file a Tax Return or is or has
been liable for Taxes on a “nexus” basis and each jurisdiction that has on or
after January 1, 2004 sent notices or communications of any kind requesting
information relating to the Company’s nexus with such jurisdiction.

          2.10 Assets.

                    (a) Except as set forth in Section 2.10(a) of the Disclosure
Schedule, the Company is the true and lawful owner, and has good title to, all
of the assets (tangible or intangible) purported to be owned by the Company,
free and clear of all Security Interests. The Company owns or leases all
tangible assets sufficient for the conduct of its businesses as presently
conducted and as presently contemplated to be conducted by any business plans or
projections delivered by the Company to the Parent. Each such tangible asset
material to the operation of the Company’s business is free from material
defects, has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used and contemplated to be
used per such business plan.

                    (b) Section 2.10(b) of the Disclosure Schedule lists (i) all
fixed assets (within the meaning of GAAP) of the Company having a book value
greater than $5,000, indicating the cost, accumulated book depreciation (if any)
and the net book value of each such fixed asset as of the Most Recent Balance
Sheet Date, and (ii) all other assets of a tangible nature (other than
inventories) of the Company whose book value exceeds $5,000.

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                    (c) Each item of equipment, motor vehicle and other asset
that the Company has possession of pursuant to a lease agreement or other
contractual arrangement is in such condition that, upon its return to its lessor
or owner under the applicable lease or contract, the obligations of the Company
to such lessor or owner to maintain such item will have been discharged in full
and no additional amounts will be due and owing thereunder.

          2.11 Owned Real Property. The Company does not own, and has never
owned, any real property.

          2.12 Real Property Leases. Section 2.12 of the Disclosure Schedule
lists all Leases and lists the term of such Lease, any extension and expansion
options, and the rent payable thereunder. The Company has delivered to the
Parent complete and accurate copies of the Leases. With respect to each Lease:

                    (a) such Lease is legal, valid, binding, enforceable and in
full force and effect;

                    (b) except as disclosed on Section 2.12 of the Disclosure
Schedule, such Lease will continue to be legal, valid, binding, enforceable and
in full force and effect immediately following the Closing in accordance with
the terms thereof as in effect immediately prior to the Closing;

                    (c) the Company is not in material breach or violation of,
or material default under, any such Lease, and to the Company’s Knowledge no
event has occurred, is pending or, is threatened, which, after the giving of
notice, with lapse of time, or otherwise, would constitute a breach or default
by the Company or, to the Knowledge of the Company, any other party under such
Lease and to the Knowledge of the Company, each parcel of Leased Real Property
is in compliance in all material respects with all applicable Laws and
Governmental Orders. The Lease for each parcel of Leased Real Property is in
full force and effect, there are no material defaults under such leases by the
Company, or, to the Knowledge of the Company, any other party to such leases;

                    (d) there are no disputes, oral agreements or forbearance
programs in effect as to such Lease;

                    (e) the Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold or
subleasehold;

                    (f) based on the Company’s experience during the past full
fiscal year and up to the Closing Date, all facilities leased or subleased
thereunder are supplied with utilities and other services adequate for the
operation of said facilities;

                    (g) to the Company’s Knowledge, there is not any Security
Interest, easement, covenant or other restriction applicable to the real
property subject to such Lease which materially impairs the current uses or the
occupancy by the Company of the property subject thereto; and

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                    (h) other than the rental payment amounts set forth in
Section 2.12 of the Disclosure Schedule, no other amounts are owed by the
Company with respect to any parcel of Leased Real Property.

          2.13 Intellectual Property.

                    (a) Section 2.13(a) of the Disclosure Schedule lists (i)
each patent, patent application, copyright registration or application therefor,
and trademark, service mark and domain name registration or application therefor
owned or used by the Company.

                    (b) The Company owns or has the right to use all Company
Intellectual Property reasonably necessary (i) to use, sell, market and
distribute the Customer Deliverables and (ii) to operate the Business. Each item
of Company Intellectual Property will be owned or available for use by the
Surviving Company immediately following the Closing on substantially identical
terms and conditions as it was owned or available for use by the Company
immediately prior to the Closing. The Company has taken commercially reasonable
measures to protect the proprietary nature of each item of Company Intellectual
Property, and to maintain in confidence all trade secrets and confidential
information, that it owns or uses. No other Person has any rights to any of the
Company Intellectual Property owned by the Company and, to the Knowledge of the
Company, no other Person is infringing, violating or misappropriating any of the
Company Intellectual Property.

                    (c) None of the Company Intellectual Property, Customer
Deliverables, or the sale, marketing, distribution, provision or use thereof,
infringes or violates, or constitutes a misappropriation of, any Intellectual
Property rights of any Person. No complaint, claim or notice, or threat thereof,
has been received by the Company alleging any infringement, violation or
misappropriation. The Company has provided to the Parent complete access to all
written documentation in the Company’s possession relating to claims or disputes
known to the Company concerning any Company Intellectual Property.

                    (d) The Company not has licensed, distributed or otherwise
granted any rights to any third party with respect to, any Company Intellectual
Property or any Intellectual Property owned by a party other than the Company.
The Company has not agreed to indemnify any Person against any infringement,
violation or misappropriation of any Intellectual Property rights with respect
to any Customer Deliverables. The Company is not, nor will it or any party
hereto be as a result of the execution and delivery of this Agreement or the
performances of its obligations under this Agreement, in breach of any license,
sublicense or other agreement relating to the Company Intellectual Property.

                    (e) Section 2.13(e) of the Disclosure Schedule identifies
each item of Intellectual Property used or possessed by the Company that is
owned by a party other than the Company, and the license or agreement pursuant
to which the Company uses it (excluding off-the-shelf software programs licensed
by or to the Company pursuant to nonnegotiable standard form, mass market or
“shrink wrap” licenses). The Company is a party to all necessary licenses or
other agreements necessary to properly use the Intellectual Property which it
currently uses in the Business (in both type and number of licenses and whether
off-the-shelf, shrink wrap or

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otherwise) and all such licenses are fully paid (or accrued for) and cover all
the software and other Intellectual Property used by the Company in the
Business.

                    (f) All of the copyrightable materials (but excluding
materials created, developed or otherwise provided by a third party) embedded
in, or integrated in, incorporated in or bundled with the Customer Deliverables
have been created by employees of the Company within the scope of their
employment by the Company, or by independent contractors of the Company who have
executed agreements expressly assigning all right, title and interest in such
copyrightable materials to the Company. No portion of such copyrightable
materials was jointly developed with any third party.

                    (g) The Customer Deliverables, the Internal Systems, and the
Company Intellectual Property are free from significant defects or programming
errors, and conform in all material respects to the written documentation and
specifications therefore.

                    (h) The Internal Systems, Customer Deliverables, and the
Company Intellectual Property currently used by the Company to provide products
and services to their customers are fully adequate for the business of the
Company as of the date of this Agreement.

          2.14 Contracts.

                    (a) Section 2.14 of the Disclosure Schedule lists the
following agreements (written or oral) to which the Company is a party as of the
date of this Agreement (each, a “Material Contract”):

                               (i) any agreement (or group of related
agreements) for the lease of personal property from or to third parties
providing for lease payments in excess of $10,000 per annum and the expiration
date of the term of each such agreement;

                              (ii) any agreement (or group of related
agreements) with software vendors, distributors or sales agents allowing for the
resale, marketing or distribution of the Company’s services of products;

                              (iii) any agreement concerning confidentiality (A)
with respect to such agreement’s existence or the existence of an existing
customer or vendor agreement, or (B) containing covenants restraining or
limiting the freedom of the Company to engage in any line of business or compete
with any Person including, without limitation, by restraining or limiting the
right to solicit customers or that would be expected, following the Closing, to
restrain or limit the freedom of the Parent or the Surviving Company to engage
in any line of business in which it currently engages or, in the course of such
activity, compete with any Person;

                              (iv) any agreement containing a right of first
refusal;

                              (v) any agreement (or group of related agreements)
that is terminable upon or prohibits a change in ownership or control of the
Company, or that requires consent in connection with a change in ownership or
control of the Company;

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                              (vi) any agreement (or group of related
agreements) that provides for the Company to be the exclusive or a preferred
provider of any product or service to any Person or the exclusive or a preferred
recipient of any product or service of any Person during any period of time or
that otherwise involves the granting by any Person to the Company of exclusive
or preferred rights of any kind;

                               (vii) any agreement (or group of related
agreements) that provides for any Person to be the exclusive or a preferred
provider of any product or service to the Company, or the exclusive or a
preferred recipient of any product or service of the Company during any period
of time or that otherwise involves the granting by the Company to any Person of
exclusive or preferred rights of any kind;

                               (viii) any agreement (or group of related
agreements) in which a party has agreed to purchase at least $10,000 per year of
goods or services or that includes specific service level commitments;

                               (ix) any agreement (or group of related
agreements) in which the Company has granted manufacturing rights, “most favored
nation” or similar pricing provisions or marketing or distribution rights
relating to any products or territory;

                               (x) any agreement (or group of related
agreements) under which it has created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) Debt or under which it has imposed (or may
impose) a Security Interest on any of its assets, tangible or intangible;

                               (xi) any agreement for the disposition of any
significant portion of the assets or business of the Company (other than sales
of products in the Ordinary Course of Business) or any agreement for the
acquisition of the assets or business of any other entity (other than purchases
of inventory or components in the Ordinary Course of Business);

                               (xii) any employment or consulting agreement;

                               (xiii) any agreement, still in effect, involving
any current or former officer, director or Member of the Company or an Affiliate
thereof;

                               (xiv) any agreement which contains any provisions
requiring the Company to indemnify any other party; and

                               (xv) any other agreement (or group of related
agreements) either (A) involving more than $50,000 per year, or (B) that is
otherwise material to the Company.

                    (b) The Company has made available to the Parent a complete
and accurate copy of each agreement listed in Section 2.13 or Section 2.14 of
the Disclosure Schedule, or with respect to each such unwritten agreement, the
Company has provided a detailed description of the terms of such unwritten
agreement. With respect to each agreement so listed: (i) the agreement is legal,
valid, binding and enforceable and in full force and effect; (ii) the agreement
will continue to be legal, valid, binding and enforceable and in full force and
effect immediately following the Closing in accordance with the terms thereof as
in effect immediately prior to the

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Closing; and (iii) neither the Company nor, to the Knowledge of the Company, any
other party, is in material breach or violation of, or material default under,
any material provision of such agreement, and no event has occurred, is pending
or, to the Knowledge of the Company, is threatened, which, after the giving of
notice, with lapse of time, or otherwise, would constitute a material breach or
material default of any material provision of such agreement by the Company or,
to the Knowledge of the Company, of any other party under such agreement.

          2.15 Accounts Receivable. Each and all Accounts Receivable are valid
receivables enforceable and fully collectible in the ordinary course of business
as historically conducted, free and clear of any claim, right of setoff or other
dispute, demand or future obligation of any nature whatsoever net of any
applicable allowance for doubtful accounts reflected in the Most Recent Balance
Sheet. Except as set forth in Section 2.15 of the Disclosure Schedule, the
Company has not received any written notice from an account debtor stating that
any Account Receivable is subject to any contest, claim or setoff by such
account debtor.

          2.16 Powers of Attorney. Except as set forth in Section 2.16 of the
Disclosure Schedule, there are no outstanding powers of attorney executed on
behalf of the Company.

          2.17 Insurance. Section 2.17 of the Disclosure Schedule lists each
insurance policy (including fire, theft/crime, casualty, comprehensive general
liability, workers compensation, business interruption, environmental, errors
and omissions, directors and officers fiduciary liability, employment practices
liability, product liability and automobile insurance policies and bond and
surety arrangements) to which the Company is a party, all of which are in full
force and effect including the name of the insurer, policy numbers and whether
such policy is a claims-made or occurrence policy. Except as set forth in
Section 2.17 of the Disclosure Schedule, there is no claim pending or, if having
been disclosed, no such claim or existing facts were questioned, denied or
disputed by the underwriter of such policy. All premiums due and payable under
all such policies have been paid. The Company has not been denied insurance
coverage at any time during the past five years and no policies have been
cancelled or have been refused to be renewed by the insurer in the past five
years except as set forth in Section 2.17 of the Disclosure Schedule. The
Company has no Knowledge of any threatened termination of, or premium increase
with respect to, any such policy except as set forth in Section 2.17 of the
Disclosure Schedule. Each such policy will continue to be enforceable and in
full force and effect immediately following the Closing in accordance with the
terms thereof as in effect immediately prior to the Closing. The Company has not
failed to timely give any notice required or failed to satisfy any
subjectivities under such insurance policies or binders of insurance.

          2.18 Litigation. Except as set forth in Section 2.18 of the Disclosure
Schedule, there is no Legal Proceeding which is pending or, to the Knowledge of
the Company, has been threatened in writing against the Company. There are no
judgments, orders or decrees outstanding against the Company.

          2.19 Warranties.

                    (a) No Customer Deliverable is subject to any guaranty,
warranty, right of credit or other indemnity. Section 2.19 of the Disclosure
Schedule sets forth the aggregate expenses incurred by the Company in fulfilling
its obligations under its guaranty, warranty, right

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of credit and other indemnity provisions during the fiscal year and the interim
period covered by the Financial Statements.

                    (b) The Company has no liability arising out of any injury
to individuals or property as a result of the ownership, possession, or proper
use of any product manufactured, sold, leased or delivered by the Company.

          2.20 Employees.

                    (a) Section 2.20 of the Disclosure Schedule contains a list
of all employees of the Company, along with the position and the annual rate (or
hourly rate, where applicable) of compensation of each such person.

                    (b) The Company is not a party to or bound by any collective
bargaining agreement, and has not experienced any strikes, grievances, claims of
unfair labor practices or other collective bargaining disputes during the past
five years. The Company has not committed any unfair labor practice during the
past five years. The Company has no Knowledge of any organizational effort made
or threatened, either currently or within the past two years, by or on behalf of
any labor union with respect to employees of the Company.

                    (c) All employee expenses and benefits have been accrued on
the Most Recent Balance Sheet for all periods prior to and up through the date
thereof.

                    (d) To the Knowledge of the Company, no officer, or Key
Employee has any plans to terminate employment with the Company.

          2.21 Employee Benefits.

                    (a) Section 2.21(a) of the Disclosure Schedule contains a
complete and accurate list of all Company Plans as of the date of this
Agreement. Prior to the date of this Agreement, Company has made available to
Parent complete and accurate copies of documents embodying each of the Company
Plans and related plan documents including (without limitation) plan documents,
trust documents, group annuity contracts, plan, plan amendments, insurance
policies or contracts, participant agreements, employee booklets, administrative
service agreements, summary plan descriptions, plan summaries or descriptions,
minutes, resolutions, compliance and nondiscrimination tests for the last three
plan years, standard COBRA forms and related notices, registration statements
and prospectuses, and, to the extent still in its possession, any material
employee communications relating thereto. With respect to the Company Plans
which are subject to ERISA reporting requirements, the Company has provided
copies of the Form 5500 reports and any applicable financial statements,
including schedules and reports filed for the last four years. The Company has
furnished Parent with the most recent Internal Revenue Service determination,
advisory or opinion letter issued with respect to each such Company Plan which
is intended to be a qualified plan as described in Code Section 401(a), and
nothing has occurred since the issuance of each such letter which could
reasonably be expected to cause the loss of tax-qualified status of any Company
Plan subject to Code Section 401(a).

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                    (b) Each Company Plan has been administered in accordance
with its terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), except
violations that would not have, individually or in the aggregate, a Material
Adverse Effect. The Company and the ERISA Affiliates have performed all material
obligations required to be performed by them under, are not in any material
respect in default under or in violation of, and have no Knowledge of any
material default or violation by any other party to, any Company Plan. All
contributions which are due and are required to be made by the Company or any
ERISA Affiliate have been made within the time period prescribed by ERISA to
each Company Plan which is subject to ERISA. All filings and reports required to
be made by each Company Plan subject to ERISA were prepared in good faith and
timely filed, and the Company has properly and timely filed and distributed or
posted all notices and reports to employees or participants in the Company Plans
that are required to be filed, distributed or posted by law, other than
violations that would not have, individually or in the aggregate, a Material
Adverse Effect. There has been no “prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code, with respect to any Company
Plan that is not exempt under Section 408 of ERISA. Neither the Company nor any
ERISA Affiliate is subject to any liability or penalty under Sections 4976
through 4980 of the Code or Title I of ERISA with respect to any Company Plan.
With respect to each Company Plan, no “reportable event” within the meaning of
Section 4043 of ERISA (excluding any such event for which the thirty (30) day
notice requirement has been waived under the regulations to Section 4043 of
ERISA) nor any event described in Section 4062, 4063 or 4041 of ERISA has
occurred that would, individually or in the aggregate, reasonably be expected to
likely result in a Material Adverse Effect. No Company Plan has assets that
include securities issued by the Company or any ERISA Affiliate and no Company
Plan constitutes a security which is required to be registered under applicable
state or federal securities laws.

                    (c) No suit, investigation, audit, administrative
proceeding, governmental or legal action, or other litigation (except claims for
benefits payable in the normal operation of the Company Plans and proceedings
with respect to qualified domestic relations orders and similar orders) is
pending, or to the Knowledge of the Company is threatened, against or relating
to any Company Plan asserting any rights or claims to benefits under any Company
Plan, including audit or investigation by the IRS or United States Department of
Labor.

                    (d) With respect to each Company Plan that is intended to be
qualified under Section 401(a) of the Code, the Company Plan (i) has obtained a
favorable determination letter from the Internal Revenue Service as to the
Company Plan’s qualified status under the Code and as to the exemption from tax
under the provisions of Code Section 501(a) of the trust created thereunder,
(ii) has been established under a standardized master and prototype or volume
submitter plan for which a favorable Internal Revenue Service advisory letter or
opinion letter has been obtained by the plan sponsor and upon which the adopting
employer may rely, or (iii) has time remaining to apply under applicable
Treasure Regulations or Internal Revenue Service pronouncements for a
determination letter or opinion. Nothing has occurred since the issuance of each
such letter that could reasonably be expected to cause the loss of the
tax-qualified status of any Company Plan subject to Section 401(a) of the Code.
Each Company Plan that is required to satisfy Section 401(k)(3) or Section
401(m)(2) of the Code has been tested for compliance with, and satisfies the
requirements of Section 401(k)(3) and Section 401(m)(2) of the Code for each
plan year ending prior to the Closing Date.

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                    (e) The Company has not nor has any ERISA Affiliate ever
maintained, established, sponsored, participated in, contributed to, or is
obligated to contribute to, or otherwise incurred any obligation or liability
(including, without limitation, any contingent liability) under any
“multiemployer plan” as defined in Section 3(37) of ERISA or to any “pension
plan” (as defined in Section 3(2) of ERISA) subject to Section 412 of the Code
or Title IV of ERISA. With respect to each Company Plan that is a “multiemployer
plan” (within the meaning of Section 3(37) of ERISA), neither the Company nor
any ERISA Affiliate has any actual or potential withdrawal liability (including,
without limitation, any contingent liability) from any complete or partial
withdrawal (as defined in Sections 4203 and 4205 of ERISA) from any such
multiemployer plan.

                    (f) With respect to each Company Plan, the Company and each
of its ERISA Affiliates have complied in all material respects with the
following to the extent applicable to such Company Plan: (i) the applicable
health care continuation and notice provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”) and the regulations thereunder or
any state law governing health care coverage extension or continuation; (ii) the
applicable requirements of the Family Medical Leave Act of 1993 and the
regulations thereunder; (iii) the applicable requirements of the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”); and (iv) the
applicable requirements of the Cancer Rights Act of 1998 and the Newborn and
Mother’s Health Protection Act of 1996.

                    (g) All anticipated contributions and funding obligations
are accrued on the Company’s financial statements to the extent required by
GAAP. The Company has expensed and accrued as a liability the present value of
future benefits under each applicable Company Plan for financial reporting
purposes to the extent required by GAAP. The assets of each Company Plan that is
funded are reported at their fair market value on the books and records of such
Company Plan. The Company has no obligation to provide retiree health coverage
or other retiree welfare benefits other than continuation coverage required
under Section 4980B of the Code or other applicable law and insurance conversion
privileges under state law.

                    (h) No act or omission has occurred and no condition exists
with respect to any Company Plan that would subject the Company or any ERISA
Affiliate to (i) any material fine, penalty, tax or liability of any kind
imposed under ERISA or the Code or (ii) any contractual indemnification or
contribution obligation protecting any fiduciary, insurer or service provider
with respect to any Company Plan.

                    (i) No Company Plan is funded by, associated with or related
to a “voluntary employee’s beneficiary association” within the meaning of
Section 501(c)(9) of the Code.

                    (j) Each Company Plan may be amended, terminated or
otherwise discontinued unilaterally by the Company at any time or after the
specified amount of required notice without liability or expense to the, Company
(or after the Closing Date, the Parent) or such Company Plan as a result
thereof, except insofar as benefits thereunder shall have vested and cannot be
modified, in respect of claims incurred prior to such amendment or termination,
as may be required under applicable requirements of law, and for reasonable
administrative expenses associated with such termination or amendment. No
Company Plan, plan documentation or agreement, summary plan description or other
written communication

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distributed generally to employees by its terms prohibits the Company from
amending, terminating or otherwise discontinuing any such Company Plan.

                    (k) The Company does not have any (i) agreement with any
Member, director, executive officer or other Key Employee of the Company (A) the
benefits of which are contingent, or the terms of which are altered, upon the
occurrence of a transaction involving the Company of the nature of any of the
transactions contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee or (C) providing severance benefits or
other benefits after the termination of employment of such director, executive
officer or Key Employee; (ii) agreement, plan or arrangement under which, absent
the Member vote to be taken pursuant to Section 5.9, any person may receive
payments from the Company that may be subject to the tax imposed by Section 4999
of the Code or included in the determination of such person’s “parachute
payment” under Section 280G of the Code (without regard to Sections 280G(b)(4)
and 280G(b)(5) thereof); and (iii) agreement or plan binding the Company,
including any option plan, appreciation right plan, restricted equity plan,
equity purchase plan, severance benefit plan or Company Plan, any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. Any Company Plan which is a “nonqualified deferred compensation plan”
as defined in Code Section 409A is either not subject to or exempt from Code
Section 409A or is operated and maintained by the Company in good faith
compliance in all material respects with Code Section 409A.

                    (l) Section 2.21(l) of the Disclosure Schedule sets forth
the policy of the Company with respect to accrued vacation, accrued sick time
and earned time off and the amount of such liabilities as of the date of this
Agreement. The information set forth in Section 2.21(l) of the Disclosure
Schedule shall be updated by the Company as of the Closing Date.

                    (m) The Company has correctly classified in all materials
respects all individuals who perform services for the Company under the Company
Plans, ERISA and the Code as common law employees, independent contractors,
leased employees, and exempt or non-exempt employees.

                    (n) With respect to any Company Plan, the Company has not
engaged in any reportable transaction under Treas. Reg. §1.6011-4(b), including
any transaction that is the same as or substantially similar to any transaction
that the Internal Revenue Service has determined to be a tax avoidance
transaction and has identified by notice, regulation, or other form of published
guidance as a listed transaction under Treas. Reg. §1.6011-4(b).

          2.22 Environmental Matters.

                    (a) The Company has complied in all material respects with
all applicable Environmental Laws and Environmental Permits. There is no pending
or to the Company’s Knowledge, threatened civil or criminal litigation, written
notice of violation, formal administrative proceeding, or investigation, inquiry
or information request by any Governmental Entity, relating to any Environmental
Law and Environmental Permits involving the Company or any properties owned or
leased by it.

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                    (b) The Company is not, and shall not be, subject to any
environmental liability of any solid or hazardous waste transporter or
treatment, storage or disposal facility that has been used by the Company.

                    (c) There has been no Release of any Hazardous Material on
any of the Leased Real Property or on any property formerly owned, leased, used
or occupied by the Company in violation of any applicable Environmental Law.

                    (d) There are no Environmental Claims pending or to the
Company’s Knowledge threatened against the Company on any of the Leased Real
Property.

          2.23 Legal Compliance.

                    (a) Except as set forth in Section 2.23 of the Disclosure
Schedule, the Company is currently conducting, and has at all times conducted,
its businesses in compliance in all material respects with each applicable law
(including rules and regulations thereunder) of any federal, state, local or
foreign government, or any Governmental Entity. The Company (including any
Affiliates) has not received any written notice or communication from any
Governmental Entity alleging noncompliance with any applicable law, rule or
regulation, including, without limitation, but by way of example only, those
laws, rules and regulations governing immigration.

                    (b) Subject to paragraph (c) below, the Company complies
with in all material respects and has implemented all such measures required for
it to comply, in all material respects, with its obligations as a Covered Entity
for its “Health Plan” and as a Business Associate of its “Covered Entity” (as
such capitalized terms are defined in HIPAA and the regulations promulgated
thereunder), including without limitation, the privacy and security regulations
(45 C.F.R. 160 and 164) and the transaction and code set regulations (45 C.F.R.
162) promulgated under HIPAA. With respect to any HIPAA regulatory requirements,
including any contractual privacy and security commitments for “Protected Health
Information” (as that term is defined in the HIPAA privacy and security
regulations), for which the Company’s (including any Affiliates) compliance with
HIPAA is required (collectively, the “HIPAA Commitments”),

                              (i) the Company is in material compliance with the
HIPAA Commitments;

                              (ii) the transactions contemplated by this
Agreement will not violate any of the HIPAA Commitments;

                              (iii) the Company has not received written
inquiries from the U.S. Department of Health and Human Services or any other
Governmental Entity regarding the Company’s compliance with the HIPAA
Commitments; and

                              (iv) the HIPAA Commitments have not been rejected
by any applicable certification organization which has reviewed such HIPAA
Commitments or to which any such HIPAA Commitment has been submitted.

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                    (c) The Company has either entered into or made reasonable
and good faith efforts to enter into valid, written Business Associate
agreements with all customers that are Covered Entities and with all
contractors, agents, vendors, suppliers, and service providers that are Business
Associates of the Company.

                    (d) Except as set forth in Section 2.23 of the Disclosure
Schedule, the Company has not incurred any Damages as a result of or in
connection with any matters, legal, regulatory or otherwise, concerning illegal
or improper medical coding activities performed by the Company including, but
not limited to, the development and/or submission of CPT or other codes for the
purposes of billing for medical services to Medicare, Medicaid and/or any third
party payer (the “Coding Activities”).

          2.24 Customers and Suppliers. Section 2.24 of the Disclosure Schedule
sets forth a list of (a) the top 25 customers of the Company by revenue under
contract for the fiscal year ended December 31, 2007 and (b) the top 10
suppliers by expenses incurred for the fiscal year ended December 31, 2007 that
are the sole supplier of any significant product or service to the Company (each
such customer or supplier, a “Significant Person”).

          2.25 Permits. Section 2.25 of the Disclosure Schedule sets forth a
list of all material Permits issued to or held by the Company. Such listed
Permits are the only material Permits that are required for the Company to
conduct its Business as presently conducted or as contemplated to be conducted
by any business plans or projections delivered by the Company to the Parent.
Each such Permit is in full force and effect; the Company is in compliance in
all material respects with the terms of each such Permit; and, to the Knowledge
of the Company, no suspension or cancellation of such Permit is threatened. The
Company has no basis for believing that such Permit will not be renewable upon
expiration. No notice to or consent from any Person is required under any Permit
as a result of the transactions contemplated by this Agreement.

          2.26 Certain Business Relationships With Affiliates. Except as set
forth in Section 2.26 of the Disclosure Schedule, no Affiliate of the Company
(a) owns any property or right, tangible or intangible, which is used in the
business of the Company, (b) to the Company’s Knowledge has any claim or cause
of action against the Company, or (c) owes any money to, or is owed any money
by, the Company. Section 2.26 of the Disclosure Schedule describes any
transactions or relationships between the Company and any Affiliate thereof
which occurred or have existed since the beginning of the time period covered by
the Financial Statements.

          2.27 Brokers’ Fees. Neither the Company, nor any Member nor any other
party with whom or for whom the Company or Members may have contracted has any
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.

          2.28 Books and Records. The minute books and other similar records of
the Company contain complete and accurate records of all actions taken at any
meetings of the Company’s Members, Board of Directors or any committee thereof
and of all written consents executed in lieu of the holding of any such meeting.
The books and records of the Company accurately reflect in all material respects
the assets, liabilities, business, financial condition and results of operations
of the Company and have been maintained in accordance with good business and

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bookkeeping practices. Section 2.28 of the Disclosure Schedule contains a list
of all (i) accounts and safe deposit boxes of the Company (including the name of
each bank, trust company, savings institution, brokerage firm, mutual fund or
other financial institution with which the Company has an account or safe
deposit box) and the names of persons having signature authority with respect
thereto or access thereto and (ii) fees and costs due and payable to third
parties with respect to the termination or expiration at any time of any
banking, financing or similar facility.

          2.29 Compliance with Healthcare Laws and Regulations.

                    (a) Without limiting the generality of Section 2.23 or any
other representation or warranty made by the Company herein, the Company is
conducting and has conducted its business and operations in compliance in all
material respects with, and neither the Company nor any of its officers,
directors or employees has engaged in any activities prohibited under, all
applicable civil or criminal statutes, laws, ordinances, rules and regulations
of any federal, state, local or foreign Governmental Entity with respect to
regulatory matters relating to the provision, administration, and/or payment for
healthcare products or services (collectively, “Healthcare Laws”), including,
without limitation, (i) rules and regulations governing the operation and
administration of Medicare, Medicaid, or other federal health care programs;
(ii) 42 U.S.C. § 1320a-7(b), commonly referred to as the “Federal Anti-Kickback
Statute,” (iii) 42 U.S.C. § 1395nn, commonly referred to as the “Stark Law,”
(iv) 31 U.S.C. §§ 3729-33, commonly referred to as the “False Claims Act” and
(v) rules and regulations of the U.S. Food and Drug Administration.

                    (b) The Company has not received any written notice or
communication from any Governmental Entity alleging noncompliance with any
Healthcare Laws and to the Company’s Knowledge it has not received any other
notice or communication (written or otherwise) from any Governmental Entity
alleging noncompliance with any Healthcare Laws. There is no civil, criminal or
administrative action, suit, demand, claim, complaint, hearing, investigation,
notice, demand letter, warning letter, proceeding or request for information
pending against the Company and the Company has no liability (whether actual or
contingent) for failure to comply with any Healthcare Laws. To the Company’s
Knowledge, there is no act, omission, event or circumstance that would
reasonably be expected to give rise to any such action, suit, demand, claim,
complaint, hearing, investigation, notice, demand letter, warning letter,
proceeding or request for information or any such liability. There has not been
any violation of any Healthcare Laws by the Company in its submissions or
reports to any Governmental Entity that could reasonably be expected to require
investigation, corrective action or enforcement action. There is no civil or
criminal proceeding pending, or, to the Knowledge of the Company, threatened,
relating to the Company or any Company director, officer or employee that
involves a matter within or related to Healthcare Laws.

                    (c) Any remuneration (including, without limitation, a
“discount or reduction in price,” as referenced in 42 U.S.C. §
1320a-7b(b)(3)(A)) exchanged between the Company and its customers, contractors,
or other entities with which it has a business relationship (together, “Trading
Partners”) has at all times been commercially reasonable and represents the fair
market value for rendered services or purchased items or does not otherwise
violate any Healthcare Laws. No remuneration exchanged between the Company and
its Trading Partners has taken

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into account, either directly or indirectly, the volume or value of any
referrals or any other federal health care program business generated between
the Company and such Trading Partners.

                    (d) Neither the Company nor any of its current directors,
officers, employees or Trading Partners has been debarred or subject to
mandatory or permissive exclusion from participation in Medicare, Medicaid, or
any other federal or state healthcare program.

                    (e) There has not been any material violation of any
Healthcare Laws by the Company in its maintenance of all records required under
any Healthcare Laws that would give rise to any Company liability for such
violation.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARENT

          The Parent represents and warrants to the Company and the Indemnifying
Members that the statements contained in this Article III are true and correct
as of the date of this Agreement and will be true and correct as of the Closing
as though made as of the Closing.

          3.1 Organization and Corporate Power. The Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. The Parent has all requisite corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties owned
and used by it.

          3.2 Authorization of Transaction. The Parent has all requisite power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by the Parent of this
Agreement and the consummation by the Parent of the series of transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Parent. This Agreement has been duly and
validly executed and delivered by the Parent and constitutes a valid and binding
obligation of the Parent, enforceable against it in accordance with its terms
and conditions, except to the extent such enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
other law affecting or relating to creditors’ rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

          3.3 Noncontravention. Neither the execution and delivery by the Parent
of this Agreement, nor the consummation by the Parent of the transactions
contemplated hereby, will (a) conflict with or violate any provision of the
Articles of Incorporation or Bylaws of the Parent, (b) require on the part of
the Parent or any Subsidiaries of Parent any notice to or filing with, or any
permit, authorization, consent or approval of, any Governmental Entity not
contemplated by this Agreement, (c) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any material contract or instrument to which the Parent or any
Subsidiaries of Parent is a party or by which the Parent or any Subsidiaries of
Parent is bound or to which any of their assets is subject the effect of which
would be to have a Parent Material Adverse Effect, (d) result in the imposition
of any Security Interest upon any assets of the Parent or any Subsidiaries of
Parent, or

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(e) to the Parent’s knowledge, violate any written order, writ, injunction,
decree, statute, rule or regulation applicable to the Parent or any of its
Subsidiaries or any of their respective properties or assets.

          3.4 Financing. At the Closing Date, Parent will have sufficient cash
to enable it to pay the cash portion of the Closing Amount. As of the Closing
Date, the Parent will have on hand cash amounts equal to the maximum amount
payable under the Earnout Payment and Earnout Override. The Parties acknowledge
that the immediately preceding sentence speaks only as of the Closing Date and
that no guarantee can be made concerning the financial status of the Parent
(cash or otherwise) as of the date amounts are due pursuant to the Earnout
Payment and the Earnout Override.

          3.5 SEC Filings. Parent has timely filed all Parent SEC Reports.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB
REGARDING MERGER SUB

          The Parent and Merger Sub, jointly and severally represent and warrant
to the Company and the Members that the statements contained in this Article IV
are true and correct as of the date of this Agreement and will be true and
correct as of the Closing as though made as of the Closing.

          4.1 Organization and Corporate Power. The Merger Sub is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Missouri. The Merger Sub has all requisite company
power and authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it.

          4.2 Authorization of Transaction. The Merger Sub has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by the Merger Sub of this
Agreement and the consummation by the Merger Sub of the series of transactions
contemplated hereby have been duly and validly authorized by all necessary
company action on the part of the Merger Sub. This Agreement has been duly and
validly executed and delivered by the Merger Sub and constitutes a valid and
binding obligation of the Merger Sub, enforceable against it in accordance with
its terms and conditions, except to the extent such enforceability is subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or other law affecting or relating to creditors’ rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

          4.3 Litigation. There is no action, suit, investigation or proceeding
pending against or, to the Merger Sub’s Knowledge, threatened against or
affecting Merger Sub or any of its respective officers or managers in their
capacity as officers or managers of Merger Sub before any court or arbitrator or
any governmental body, agency or official, which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the series of
transactions contemplated hereby..

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          4.4 Noncontravention. Neither the execution and delivery by the Merger
Sub of this Agreement, nor the consummation by the Merger Sub of the
transactions contemplated hereby, will (a) conflict with or violate any
provision of the articles of organization or operating agreement of the Merger
Sub, (b) require on the part of the Merger Sub any notice to or filing with, or
any permit, authorization, consent or approval of, any Governmental Entity
except those filings contemplated hereby, under the Securities Act, and state
corporation/securities laws, if any, (c) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which the Merger Sub is a party or by which
the Merger Sub is bound or to which any of its assets is subject, (d) result in
the imposition of any Security Interest upon any assets of the Merger Sub, or
(e) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Merger Sub or any of its properties or assets.

ARTICLE V
PRE-CLOSING AND POST-CLOSING COVENANTS

          5.1 Closing Efforts. Each of the Parties shall use its Reasonable Best
Efforts to take all actions and to do all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement, including using
its Reasonable Best Efforts to ensure that (i) its representations and
warranties remain true and correct in all material respects through the Closing
Date and (ii) the conditions to the obligations of the other Parties to
consummate the Merger and its related transactions are satisfied.

          5.2 Governmental and Third-Party Notices and Consents.

                    (a) Each Party shall use its Reasonable Best Efforts to
obtain, at its expense, all waivers, permits, consents, approvals or other
authorizations from Governmental Entities, and to effect all registrations,
filings and notices with or to Governmental Entities, as may be required for
such Party to consummate the transactions contemplated by this Agreement and to
otherwise comply with all applicable laws and regulations in connection with the
consummation of the transactions contemplated by this Agreement.

                    (b) The Company shall use its Reasonable Best Efforts to
obtain, at its expense, all such waivers, consents or approvals from third
parties, and to give all such notices to third parties, as are required to be
listed in the Disclosure Schedule or resulting from the delivery requirements
set forth in Section 6. Parent will promptly advise the Company of any written
notice from a third Person alleging that the consent of such third Person is or
may be required in connection with the transactions contemplated by this
Agreement.

          5.3 Operation of Business. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, the Company
shall conduct its operations in the Ordinary Course of Business and in
compliance with all applicable laws and regulations and, to the extent
consistent therewith, use its Reasonable Best Efforts to preserve intact its
current business organization, keep its physical assets in good working
condition, keep available the services of its current officers and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing

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business shall not be impaired in any material respect. Without limiting the
generality of the foregoing, prior to the Closing, the Company shall not,
without the written consent of the Parent (which consent shall not be
unreasonably withheld):

                    (a) issue or sell any Membership Interest or other
securities of the Company or any options, warrants or rights to acquire any such
Membership Interest or other securities, or amend any of the terms of (including
the vesting of) any options, warrants or restricted Membership Interest
agreements, or repurchase or redeem any interest in the Company of any kind
whatsoever or other securities of the Company;

                    (b) [reserved];

                    (c) create, incur or assume any indebtedness (including
obligations in respect of capital leases), other than changes in the principal
balance of the Company line of credit; assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other Person; or make any loans, advances or capital
contributions to, or investments in, any other Person;

                    (d) enter into, adopt or amend any Employee Benefit Plan or
any employment or severance agreement or arrangement of the type described in
Section 2.21(k) or increase in any manner the compensation or fringe benefits
of, or materially modify the employment terms of, its managers, officers or
employees, generally or individually, or pay any bonus or other benefit to its
managers, officers or employees (except for existing payment obligations listed
in Section 2.21(a) of the Disclosure Schedule) or hire any new officers or
(except in the Ordinary Course of Business) any new employees;

                    (e) acquire, sell, lease, license or dispose of any assets
or property other than purchases and sales of assets in the Ordinary Course of
Business with a value not in excess of $25,000;

                    (f) mortgage or pledge any of its property or assets or
subject any such property or assets to any Security Interest;

                    (g) discharge or satisfy any Security Interest or pay any
obligation or liability other than in the Ordinary Course of Business;

                    (h) amend its Articles of Organization, Operating Agreement
or other organizational documents;

                    (i) change its accounting methods, principles or practices,
except insofar as may be required by a generally applicable change in GAAP, or
make any new elections, or changes to any current elections, with respect to
Taxes;

                    (j) enter into, amend, terminate, take or omit to take any
action that would constitute a violation of or default under, or waive any
rights under, any contract or agreement of a nature required to be listed in
Section 2.12, Section 2.13 or Section 2.14 of the Disclosure Schedule (other
than new customer agreements providing for the payment by the customer of not

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more than $50,000 per annum individually or $100,000 per annum for all such
agreements in the aggregate);

                    (k) make or commit to make any capital expenditure in excess
of $25,000 per item or $50,000 in the aggregate;

                    (l) institute or settle any Legal Proceeding;

                    (m) take any action of a nature required to be listed in
Section 2.7 of the Disclosure Schedule;

                    (n) take any action or fail to take any action permitted by
this Agreement with the knowledge that such action or failure to take action
would result in (i) any of the representations and warranties of the Company set
forth in this Agreement becoming untrue or (ii) any of the conditions to the
Merger set forth in Article VI not being satisfied; or

                    (o) agree in writing or otherwise to take any of the
foregoing actions.

          5.4 Access to Information. From the date of this Agreement until the
Closing, the Company shall permit representatives of the Parent to have access
(at reasonable times, and in a manner so as not to unreasonably interfere with
the normal business operations of the Company) to all premises, properties,
financial, tax and accounting records (including the work papers of the
Company’s independent accountants), contracts, other records and documents, and
personnel, of or pertaining to the Company (other than attorney/client
privileged information or attorney work product). Parent shall not meet with the
Company’s customers and suppliers (in person or otherwise) to discuss, and shall
use its Reasonable Best Efforts not to discuss otherwise with such customers or
suppliers, the Company’s relationship with such customers or suppliers without
informing the Company reasonably in advance of such meeting and giving the
Company the opportunity to be present at such meeting.

          5.5 Notice of Breaches.

                    (a) From the date of this Agreement until the Closing, the
Company shall promptly deliver to the Parent supplemental information concerning
events or circumstances occurring subsequent to the date hereof which would
render any representation, warranty or statement in this Agreement or the
Disclosure Schedule inaccurate or incomplete at any time after the date of this
Agreement until the Closing. No such supplemental information shall be deemed to
avoid or cure any misrepresentation or breach of warranty or constitute an
amendment of any representation, warranty or statement in this Agreement or the
Disclosure Schedule unless Parent expressly agrees in writing.

                    (b) From the date of this Agreement until the Closing, the
Parent shall promptly deliver to the Company supplemental information concerning
events or circumstances occurring subsequent to the date hereof which would
render any representation, warranty or statement of Parent or Merger Sub in this
Agreement inaccurate or incomplete at any time after the date of this Agreement
until the Closing. No such supplemental information shall be deemed to avoid or
cure any misrepresentation or breach of warranty or constitute an amendment of
any

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representation or warranty in this Agreement unless the Member Representatives
expressly agree in writing.

          5.6 Exclusivity.

                    (a) From the date of this Agreement until the Closing or
otherwise upon termination of this Agreement, the Company shall not, and the
Company shall require each of its managers, officers, employees,
representatives, and agents not to, directly or indirectly, (i) initiate,
solicit, encourage or otherwise facilitate any inquiry, proposal, offer or
discussion with any party (other than the Parent) concerning any merger,
acquisition, reorganization, consolidation, recapitalization, business
combination, liquidation, dissolution, equity interest exchange, sale of
Membership Interests, sale of material assets or similar business transaction
involving the Company or any division of the Company, (ii) furnish any
non-public information concerning the business, properties or assets of the
Company or any division of the Company to any party (other than the Parent or
its representatives) or (iii) engage in discussions or negotiations with any
party (other than the Parent) concerning any such transaction.

                     (b) The Company shall immediately notify any party with
which discussions or negotiations of the nature described in paragraph (a) above
were pending that the Company is terminating such discussions or negotiations.
If the Company or any Member receives any inquiry, proposal or offer of the
nature described in paragraph (a) above, the Company shall, within one Business
Day after such receipt, notify the Parent of such inquiry, proposal or offer,
including the identity of the other party and the terms of such inquiry,
proposal or offer.

          5.7 Expenses. Except as expressly set forth in this Agreement, each of
the Parties shall bear its own costs and expenses (including legal, investment
banking and accounting fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. For the avoidance of doubt,
except as specifically set forth in this Agreement, neither the Parent nor
Merger Sub shall pay any costs and expenses of the Company incurred in
connection with this Agreement and the transactions contemplated hereby
including, but not limited to, those fees, costs and other expenses of its
brokers and its counsel, including without limitation, Lewis Rice & Fingersh,
L.C. Similarly, except as specifically set forth in this Agreement, neither the
Company nor any Member shall pay any costs and expenses of Parent or Merger Sub
incurred in connection with this Agreement and the transactions contemplated
hereby including, but not limited to, those fees, costs and other expenses of
its brokers and its counsel, including without limitation, Rutan & Tucker, LLP.

          5.8 Proprietary Information. From and after the Closing, no Member
shall disclose or make use of, and each Member shall cause all of his Affiliates
not to disclose or make use of, any knowledge, information or documents of a
confidential nature or not generally known to the public with respect to the
Company, Merger Sub or the Parent and their respective businesses (including the
financial information, technical information or data relating to the Company’s
services and names of customers of the Company), except to the extent that such
knowledge, information or documents shall have become public knowledge other
than through improper disclosure by any Member or an Affiliate or such
disclosure is required by process of Law.

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          5.9 Confidentiality. Each of the parties hereto agrees that the
information obtained in any investigation pursuant to the negotiation and
execution of this Agreement or the effectuation of the transaction contemplated
hereby, shall be governed by the terms of the Confidentiality Agreement between
the Company and Parent dated November 30, 2007, provided, however, that any
Party may make such disclosures as may be required under applicable law
including, without limitation, those applicable provisions of the Securities Act
and Exchange Act.

          5.10 Insurance Matters.

                    (a) Prior to the Closing, Company shall maintain in effect
at its expense an errors and omissions liability insurance policy with a term
which terminates no less than three years after the Closing Date covering (i)
the Members and (ii) all officers, managers and employees of Company, as of
immediately prior to the Closing, with coverages in amount and scope at least as
favorable as Company’s errors and omissions liability insurance policy in effect
on the Closing Date (the “E&O Policy”). The E&O Policy will cover, by way of
appropriate tail insurance coverage or otherwise, all claims arising out of,
resulting from or pertaining to facts, events or matters existing or occurring
at or prior to the Closing Date, whether asserted or claimed prior to, at or
after the Closing Date.

                    (b) After the Effective Time, the Operating Agreement of the
Company may not be amended, repealed or otherwise modified for a period of three
years from the Effective Time in any manner that would affect materially and
adversely the rights thereunder of individuals who at or at any time prior to
the Effective Time were entitled to indemnification thereunder.

          5.11 Guarantees.

                    (a) The Parent shall use its Reasonable Best Efforts to
obtain no later than the Closing Date, a release of any and all personal
guarantees of Debt given by any Member or their Affiliates set forth on Section
5.11 of the Disclosure Schedule.

                    (b) The Indemnifying Members shall use their Reasonable Best
Efforts to obtain no later than fourteen (14) days after the Closing Date a
release of the Company’s guaranty of any Debt provided on behalf of InfoNow or
any Company Affiliate.

ARTICLE VI
CONDITIONS TO CONSUMMATION OF MERGER

          6.1 Conditions to Obligations of the Parent and Merger Sub. The
obligation of the Parent and Merger Sub to consummate the Merger is subject to
the satisfaction (or written waiver by the Parent) of the following additional
conditions:

                    (a) [reserved];

                    (b) the Company shall have obtained at its own expense (and
shall have provided copies thereof to the Parent) all of the waivers, permits,
consents, approvals, novations or other authorizations, and effected all of the
registrations, filings and notices which are required on the part of the Company
to consummate the transactions contemplated by this

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Agreement, including, but not limited to, the consents set forth in Section
2.4(c) of the Disclosure Schedule, and to otherwise comply with all applicable
laws and regulations in connection with the consummation of the series of
transactions contemplated by this Agreement;

                    (c) the representations and warranties of the Company set
forth in this Agreement shall be true and correct in all material respects as of
the Closing except to the extent they pertain to a different date as
specifically indicated;

                    (d) the Company and each of the Indemnifying Members shall
each have performed or complied with in all material respects its agreements and
covenants required to be performed or complied with under this Agreement as of
or prior to the Closing;

                    (e) no Legal Proceeding shall be pending or threatened
wherein an unfavorable judgment, order, decree, stipulation or injunction would
(i) prevent consummation of the series of transactions contemplated by this
Agreement or any one of them, (ii) cause the series of transactions contemplated
by this Agreement or any one of them to be rescinded following consummation or
(iii) have, individually or in the aggregate, a Material Adverse Effect, and no
such judgment, order, decree, stipulation or injunction shall be in effect;

                    (f) the Company shall have delivered to the Parent the
Company Certificate;

                    (g) the Parent shall have received the resignations,
effective as of the Closing, of each manager, managing member, director and
officer of the Company specified by the Parent; provided, however, that such
resignation shall have no effect on any employment agreement such individual may
have as disclosed on the Disclosure Schedule and or any benefits under any
Company employee benefit plan in effect with respect to such individual as of
the Closing.

                    (h) Ben Tischler, Mike Noble, Mike Gerling, Monte Sandler,
Deb Linder-Watts and Adam Steinberg shall each have entered into an employment
agreement (including noncompete and non-solicitation provisions) with the
Surviving Company that is acceptable to the Surviving Company and Ben Tischler,
Mike Noble, Mike Gerling, Monte Sandler, Deb Linder-Watts and Adam Steinberg
shall each have entered into confidentiality, inventions assignment and
nondisclosure agreements as may be required by Parent providing to the Parent
and Surviving Company the maximum trade secret and intellectual property
protection under the law of the state of each such person’s residence and
substantially in the form of the standard agreements currently employed by
Parent for such purposes;

                    (i) all Membership Interest Purchase Plans, if any, shall
have been terminated;

                    (j) since the date of this Agreement, there will not have
occurred and there will have been no change, event or development that has had,
individually or in the aggregate, a Material Adverse Effect;

                    (k) all outstanding options to acquire a Membership
Interest, if any, shall have been terminated;

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                    (l) the Company shall have obtained the Requisite Member
Approval of the Members;

                    (m) the Company, if instructed by Parent, in Parent’s sole
discretion, shall have terminated all of Company’s banking facilities (provided,
however, that the Parent shall have caused to be paid any indebtedness
outstanding under such banking facilities. Parent will pay up to $5,000 of any
pre-payment and/or termination fees required to terminate such banking
facilities and the Members shall be responsible for any such fees in excess of
$5,000;

                    (n) the Parent shall have received the legal opinion of the
Company’s counsel substantially in the form of Exhibit F, attached hereto, dated
as of the date of this Agreement;

                    (o) the amount of Debt at the Closing shall not exceed the
Maximum Allowable Closing Debt as set forth in Section 1.6(a)(ii);

                    (p) the Parent or one of its Affiliates shall have entered
into the License Agreement with InfoNow (concerning “PowerFlow”), in
substantially the form attached hereto as Exhibit G; and

                    (q) Each of Mike Noble and Ben Tischler shall have repaid in
full all amounts owing by each of them to the Company.

          6.2 Conditions to Obligations of the Company. The obligation of the
Company to consummate the Merger is subject to the satisfaction (or waiver by
the Company) of the following additional conditions:

                    (a) the Parent shall have obtained at its own expense (and
shall have provided copies thereof to the Company) all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices which are required on the part of the Parent
and/or the Merger Sub to consummate the series of transactions contemplated by
this Agreement and to otherwise comply with all applicable laws and regulations
in connection with the consummation of the series of transactions contemplated
by this Agreement;

                    (b) the representations and warranties of the Parent and
Merger Sub set forth in this Agreement shall be true and correct in all material
respects as of the Closing except to the extent they pertain to a different date
as specifically indicated herein;

                    (c) each of the Parent and the Merger Sub shall have
performed or complied with in all material respects its agreements and covenants
required to be performed or complied with under this Agreement as of or prior to
the Closing;

                    (d) no Legal Proceeding shall be pending or threatened
wherein an unfavorable judgment, order, decree, stipulation or injunction would
(i) prevent consummation of the transactions contemplated by this Agreement,
(ii) cause the transactions contemplated by this Agreement to be rescinded
following consummation, and no such judgment, order, decree, stipulation or
injunction shall be in effect or (iii) have, individually, or in the aggregate,
a Parent Material Adverse Effect;

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                    (e) the Parent shall have delivered to the Company the
Parent Certificate;

                    (f) the Company shall have received such other certificates
and instruments as it shall reasonably request in connection with the Closing;

                    (g) the Surviving Company shall have entered into employment
and confidentiality agreements as set forth in Section 6.1(h);

                    (h) the Parent or one of its Affiliates shall have entered
into the License Agreement with InfoNow (concerning “PowerFlow”), in
substantially the form attached hereto as Exhibit G;

                    (i) the Company shall have obtained the Requisite Member
Approval;

                    (j) since the date of this Agreement, there will not have
occurred and there will have been no change, event or development that has had,
individually or in the aggregate, a Parent Material Adverse Effect;

                    (k) the Members shall have received the releases of the
personal guarantees of Debt as contemplated by Section 5.11;

                    (l) the Members shall have received the legal opinion of the
Parent’s counsel substantially in the form of Exhibit H, attached hereto, dated
as of the date of this Agreement; and

                    (m) the subordinated debt to Maxine Hirsch shall be paid in
full.

ARTICLE VII
INDEMNIFICATION

          7.1 Indemnification by the Indemnifying Members. Except as otherwise
set forth in this Article VII, the Company (prior to Closing) and the
Indemnifying Members (after the Closing) shall severally and not jointly based
upon such Indemnifying Member’s Pro Rata Share indemnify the Parent in respect
of, and hold it harmless against any and all Damages incurred or suffered by the
Surviving Company or the Parent or any Affiliate thereof resulting from,
relating to or constituting the matters set forth in this Section 7.1. In
addition to the foregoing, and not by way of limitation, the Parent’s right to
indemnification hereunder shall not be affected by (i) any investigation
conducted by Parent or any of its Affiliates or (ii) any disclosures in the
Disclosure Schedules related to (A) Capitalization (Section 2.2), (B) Taxes
(Section 2.9), (C) Intellectual Property (Section 2.13), (D) Litigation (Section
2.18), (E) Employee Benefits (Section 2.21), and (F) Legal Compliance (Section
2.23).

                    (a) any breach of any representation or warranty of the
Company contained in this Agreement (other than any breach of Section 2.9 of
this Agreement which shall be resolved pursuant to Article VIII of this
Agreement) or any other agreement or instrument furnished by the Company or any
Member to the Parent pursuant to this Agreement), as though such representations
and warranties were restated and made at and as of the Closing Date;

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                    (b) any failure to perform any covenant or agreement of the
Company or any Member contained in this Agreement or any agreement or instrument
furnished by the Company or any Member to the Parent pursuant to this Agreement;

                    (c) any failure of any Member to have good, valid and
marketable title to the issued and outstanding Membership Interests registered
in such Member’s name, free and clear of all Security Interests (it being
understood that the indemnification obligation in this Section 7.1(c) shall be
several, and not joint, as to the Member with respect to whom the failure has
occurred);

                    (d) any claim by a Member or former Member of the Company,
or any other Person, seeking to assert, or based upon: (i) ownership or rights
to ownership of any interest in the Company which differ from those set forth in
the Disclosure Schedule; (ii) any rights of a Member (other than the right to
receive the Aggregate Transaction Consideration pursuant to this Agreement),
including any option, preemptive rights or rights to notice or to vote; (iii)
any rights under the Articles of Organization or Operating Agreement of the
Company; or (iv) any claim that his, her or its shares were wrongfully involved
in the transactions contemplated by this Agreement or which concerns the entry
into this Agreement by any of the Parties or the process related thereto;

                    (e) any claim of any entity (private, Governmental Entity or
otherwise) or Damages as a result of the Coding Activities; or

                    (f) any Third Party Actions concerning matters related to
the Company or any of the Members which matter giving rise to the Third Party
Action occurred prior to the Closing Date, regardless of when such Third Party
Action is filed or otherwise instituted, including, without limitation, any
claims concerning the matter set forth in Section 7.1(f) of the Disclosure
Schedule.

          7.2 Indemnification by the Parent. The Parent shall indemnify the
Company (prior to the Effective Time) and the Members and their Affiliates
(after the Effective Time) in respect of, and hold them harmless against, any
and all Damages incurred or suffered by the Company (prior to the Effective
Time) or the Members or any Affiliate thereof (after the Effective Time)
resulting from, relating to or constituting:

                    (a) any breach of any representation or warranty of the
Parent or the Merger Sub contained in this Agreement or any other agreement or
instrument furnished by the Parent or the Merger Sub to the Company or the
Member Representatives pursuant to this Agreement;

                    (b) any failure to perform any covenant or agreement of the
Parent or the Merger Sub contained in this Agreement or any agreement or
instrument furnished by the Parent or the Merger Sub to the Company or the
Member Representatives pursuant to this Agreement; or

                    (c) any Third Party Actions concerning matters related to
the Surviving Company which matter giving rise to the Third Party Action
occurred on or after the Closing Date.

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          7.3 Third Party Actions.

                    (a) Notice of Third Party Actions. An Indemnified Party
shall give written notification to the Indemnifying Party of the commencement of
any Third Party Action. Such notification shall be given within twenty (20) days
after receipt by the Indemnified Party of notice of such Third Party Action, and
shall describe in reasonable detail (to the extent known by the Indemnified
Party) the facts constituting the basis for such Third Party Action and the
amount of the claimed Damages; provided, however, that no delay or failure on
the part of the Indemnified Party in so notifying the Indemnifying Party shall
relieve the Indemnifying Party of any liability or obligation hereunder except
to the extent of any damage or liability caused by or arising out of such
failure.

                    (b) Indemnification by the Indemnifying Members of Third
Party Actions. The obligations and liabilities of the Indemnifying Members
hereunder with respect to a Third Party Action for which the Parent is entitled
to indemnification pursuant to this Article VII will be subject to the following
terms and conditions.

                              (i) The Indemnifying Members will have the right,
but not the obligation, to defend against and to direct the defense of any such
Third Party Action and any related Legal Proceeding at their sole cost and
expense and with counsel of their choosing (subject to the approval of the
Parent, which will not be unreasonably withheld or delayed) and the Parent will
reasonably cooperate in the defense thereof. The Parent may participate in such
defense with counsel of its own choosing, provided that the Indemnifying Members
will not, following written notice of its election to defend against and direct
the defense of any such Third Party Action, be liable to the Parent under this
Article VII for any fees of other counsel or any other expenses with respect to
the defense of such Legal Proceeding incurred by the Parent in connection with
the defense of such Legal Proceeding unless the Parent is also a party to such
Third Party Action and the Parent determines in good faith that it has available
to it one or more defenses or counterclaims that are inconsistent with those of
the Indemnifying Members. If the Indemnifying Members assume the defense of a
Third Party Action, no compromise, discharge or settlement of, or admission of
liability in connection with, such claims may be effected by the Indemnifying
Members without the written consent of the Parent (which consent will not be
unreasonably withheld or delayed) unless (x) there is no finding or admission of
any violation of law or any violation of the rights of any Person and no effect
on any other claims that may be made against the Parent, (y) the sole relief
provided is monetary damages that are paid in full by the Indemnifying Members,
and (z) such settlement is not disclosed to the public or available for review
by any third party. The Parent will have no liability with respect to any
compromise or settlement of such claims effected without its written consent
(which consent will not be unreasonably withheld or delayed).

                              (ii) Notwithstanding the provisions of Section
7.3(b)(i) of this Agreement, if the Indemnifying Members fail or refuse to
undertake the defense of such Third Party Action within fourteen (14) days after
delivery of written notification to the Indemnifying Members of the commencement
of such Third Party Action or if the Indemnifying Members later withdraw from
such defense, the Parent will have the right to undertake the defense of such
claim with counsel of its own choosing, with the Indemnifying Members
responsible for the

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costs and expenses of such defense and bound by any determination made in such
Third Party Action or any compromise or settlement effected by the Parent.

                    (c) Indemnification by the Parent of Third Party Actions.
The obligations and liabilities of Parent hereunder with respect to a Third
Party Action for which the Company, the Members or their Affiliates are entitled
to indemnification pursuant to this Article VII will be subject to the following
terms and conditions:

                              (i) The Parent will have the right, but not the
obligation, to defend against and to direct the defense of any such Third Party
Action and any related Legal Proceeding at the Parent’s sole cost and expense
and with counsel of Parent’s choosing (subject to the approval of the Member
Representatives, which will not be unreasonably withheld or delayed) and the
Member Representatives will reasonably cooperate in the defense thereof. The
Member Representatives may participate in such defense with counsel of their own
choosing, provided that the Parent will not, following written notice of its
election to defend against and direct the defense of any such Third Party
Action, be liable to the Company, the Members or their Affiliates under this
Article VII for any fees of other counsel or any other expenses with respect to
the defense of such Legal Proceeding incurred by the Company, the Members or
their Affiliates in connection with the defense of such Legal Proceeding unless
such parties are also a party to such Third Party Action and the Member
Representatives determines in good faith that they have available to them one or
more defenses or counterclaims that are inconsistent with those of the Parent.
If the Parent assumes the defense of a Third Party Action, no compromise,
discharge or settlement of, or admission of liability in connection with, such
claims may be effected by the Parent without the written consent of the Member
Representatives (which consent will not be unreasonably withheld or delayed)
unless (x) there is no finding or admission of any violation of law or any
violation of the rights of any Person and no effect on any other claims that may
be made against the Company, the Members or their Affiliates, (y) the sole
relief provided is monetary damages that are paid in full by the Parent, and (z)
such settlement is not disclosed to the public or available for review by any
third party except as required by law. The Company, the Members and their
Affiliates will have no liability with respect to any compromise or settlement
of such claims without their written consent (which consent will not be
unreasonably withheld or delayed).

                              (ii) Notwithstanding the provisions of Section
7.3(c)(i) of this Agreement, if the Parent fails or refuses to undertake the
defense of such Third Party Action within fourteen (14) days after delivery of
written notification to the Parent of the commencement of such Third Party
Action or if the Parent later withdraws from such defense, the Member
Representatives will have the right to undertake the defense of such claim with
counsel of their own choosing, with the Parent responsible for the costs and
expenses of such defense and bound by any determination made in such Third Party
Action or any compromise or settlement effected by the Member Representatives.

          7.4 Non-Third Party Actions.

                    (a) In order to seek indemnification under this Article VII,
an Indemnified Party shall deliver a Claim Notice to the Indemnifying Party. If
the Indemnified Party is the

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Parent and is seeking to enforce such claim pursuant to the Escrow Agreement,
the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow
Agent.

                    (b) Within 20 days after delivery of a Claim Notice, the
Indemnifying Party shall deliver to the Indemnified Party a Response, in which
the Indemnifying Party shall: (i) agree that the Indemnified Party is entitled
to receive all of the Claimed Amount (in which case the Response shall be
accompanied by a payment by the Indemnifying Party to the Indemnified Party of
the Claimed Amount, by check or by wire transfer, provided that if the
Indemnified Party is the Parent and is seeking to enforce such claim pursuant to
the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall
deliver to the Escrow Agent, within three (3) days following the delivery of the
Response, a written notice executed by both parties instructing the Escrow Agent
to release the Claimed Amount to the Parent from the Escrow Account); (ii) agree
that the Indemnified Party is entitled to receive the Agreed Amount (in which
case the Response shall be accompanied by a payment by the Indemnifying Party to
the Indemnified Party of the Agreed Amount, by check or by wire transfer,
provided that if the Indemnified Party is the Parent and is seeking to enforce
such claim pursuant to the Escrow Agreement, the Indemnifying Party and the
Indemnified Party shall deliver to the Escrow Agent, within three (3) days
following the delivery of the Response, a written notice executed by both
parties instructing the Escrow Agent to release the Agreed Amount to the Parent
from the Escrow Fund); or (iii) dispute that the Indemnified Party is entitled
to receive any of the Claimed Amount provided that any notice of such dispute
shall identify the matters set forth in the Claim Notice which are disputed and
shall provide with reasonable specificity the amount of the Claim which is in
dispute and the portion of the Escrow Fund specified in the Claim Notice that
the Member Representatives believe should not be delivered to Parent.

                    (c) During the 30-day period following the delivery of a
Response that reflects a Dispute, the Indemnifying Party and the Indemnified
Party shall use good faith efforts to resolve the Dispute. If the Dispute is not
resolved within such 30-day period, such Dispute shall be resolved and a final
determination rendered pursuant to Section 11.13. If the Indemnified Party is
the Parent and is seeking to enforce the claim that is the subject of the
Dispute pursuant to the Escrow Agreement, the Indemnifying Party shall deliver
to the Escrow Agent, promptly following resolution of the Dispute (whether by
mutual agreement, or arbitration), a written notice executed by both parties
instructing the Escrow Agent as to what (if any) portion of the Escrow Fund
shall be released to the Parent and/or the Indemnifying Members (which notice
shall be consistent with the terms of the resolution of the Dispute).

          7.5 Survival of Representations and Warranties. All representations
and warranties that are covered by the indemnification agreements in Section
7.1(a) and Section 7.2(a) of this Agreement shall (a) survive the Closing and
(b) shall expire on the date which is the second anniversary of the Closing Date
except for those representations and warranties of Company concerning
Capitalization (Section 2.2), Taxes (Section 2.9), Intellectual Property
(Section 2.13), Employee Benefits (Section 2.21) and Environmental (Section
2.22), which shall be for their respective statute of limitations. If an
Indemnified Party delivers to an Indemnifying Party, before expiration of a
representation or warranty, either a Claim Notice based upon a breach of such
representation or warranty, or an Expected Claim Notice based upon a breach of
such representation or warranty, then the applicable representation or warranty
shall survive until, but only to the extent of, and for purposes of the
resolution of, the specific matter covered by such

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notice. If the Legal Proceeding or written claim with respect to which an
Expected Claim Notice has been given is definitively withdrawn or resolved, the
Indemnified Party shall promptly so notify the Indemnifying Party and if the
Indemnified Party has delivered a copy of the Expected Claim Notice to the
Escrow Agent with respect to such Expected Claim Notice, the Indemnifying Party
and the Indemnified Party shall promptly deliver to the Escrow Agent a written
notice executed by both parties instructing the Escrow Agent to release such
retained funds of the Escrow Fund in accordance with the resolution of such
matter pursuant to the terms of the Escrow Agreement. The rights to
indemnification set forth in this Article VII shall not be affected by (i) any
investigation or due diligence conducted by or on behalf of an Indemnified Party
or any knowledge acquired (or capable of being acquired) by an Indemnified
Party, whether before or after the date of this Agreement or the Closing Date,
with respect to the inaccuracy or noncompliance with any representation,
warranty, covenant or obligation which is the subject of indemnification
hereunder or (ii) any waiver by an Indemnified Party of any Closing condition
relating to the accuracy of representations and warranties or the performance of
or compliance with agreements and covenants.

          7.6 Treatment of Indemnity Payments. Any payments made to an
Indemnified Party pursuant to this Article VII shall be treated as an adjustment
to the Aggregate Transaction Consideration for Tax purposes.

          7.7 Limitations.

                    (a) No claim for indemnity under this Agreement may be made
unless (i) the amount of determined indemnifiable Damages incurred with respect
to such claim exceeds fifteen thousand dollars ($15,000), and (ii) the aggregate
of all claims for Damages exceeds one hundred thousand dollars ($100,000) (the
“Deductible”), at which time claims may be made for the entire amount of the
aggregate of all claims for Damages in excess of such Deductible. By way of
example only, if there are a series of claims that aggregate $115,000, then
Parent may make a claim for indemnity in the amount of $15,000. Claims and
adjustments pursuant to Article I shall not be subject to the limitations of
this Section 7.7.

                    (b) The Parent shall have the following rights in satisfying
its adjustments, holdbacks and claims for Damages under Section 1.6 and Article
VII and VIII:

                              (i) The Parent shall have the obligation to
satisfy any indemnifiable Damages which it may determine under Section 1.6 and
Articles VII and VIII hereof first from the Escrow Fund pursuant to the terms of
the Escrow Agreement.

                              (ii) To the extent that the Escrow Fund is
insufficient to pay in full any determined adjustments, holdbacks and
indemnifiable Damages under Section 1.6 (Adjustments) and Articles VII and VIII
hereof, the Parent shall have the right to set off any determined adjustments,
holdbacks and indemnifiable Damages under Section 1.6 and Articles VII and VIII
hereof against any amounts payable to the Members under this Agreement.

                              (iii) The Parent shall also have the right to
collect from each Indemnifying Member his/its Pro Rata Share of any determined
indemnifiable Damages under

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Section 1.6 and Articles VII and VIII hereof that are not otherwise satisfied
under Sections 7.7(b)(i) and (ii) above.

                    (c) Notwithstanding anything to the contrary contained in
this Agreement, the maximum amount of Damages that may be indemnified by the
Company and the Indemnifying Members pursuant to Section 7.1 shall not exceed
the amount of the Aggregate Transaction Consideration.

                    (d) In determining the amount of any indemnification
obligations under this Article VII, the amount of any obligation for which
indemnification may be claimed by any Indemnified Party shall be reduced by any
insurance proceeds received by the Indemnified Party (or by any Affiliate of the
Indemnified Party) with respect to the matter that is the subject of the
indemnified claim or any tax benefit actually received as a reduction in tax due
or receipt of a tax refund. Each Indemnified Party (on behalf of itself and its
Affiliates) agrees to make good faith, commercially reasonably efforts to obtain
all such insurance proceeds available to it; provided, however, that no claim
for indemnification shall be conditioned upon the final resolution of such
insurance claim – the proceeds of such claim to be paid back to the Indemnifying
Party if collected after the payment by the Indemnifying Party to the
Indemnified Party concerning such claim.

                    (e) Notwithstanding anything to the contrary contained in
this Agreement, no claim for indemnity under this Agreement may be made to the
extent such claim relates to amounts that are accrued for as current liabilities
on the Final Balance Sheet as determined by the parties pursuant to Section 1.6.

                    (f) The remedies set forth in this Article VII shall be the
exclusive remedy of the Parties with respect to the matters set forth in this
Article VII.

ARTICLE VIII
TAX MATTERS

          8.1 Tax Indemnification. The Indemnifying Members shall indemnify and
hold harmless the Parent and the Surviving Company, and any successors thereto
or Affiliates thereof in respect of and against Damages resulting from, relating
to, or constituting (x) a breach of any representation contained in Section 2.9
of this Agreement, (y) the failure to perform any covenant or agreement set
forth in this Article VIII, and (z) without duplication, the following Taxes:

                    (a) Any Taxes for any Taxable period ending on or before the
Closing Date due and payable by the Company and not reserved for on the Final
Balance Sheet; and

                    (b) Any Taxes for any Taxable period ending on or before the
Closing Date for which the Company has any liability as a transferee or
successor, or pursuant to any contractual obligation or otherwise and not
reserved for on the Final Balance Sheet; and

                    (c) Any transfer, sales, use, stamp, conveyance, value
added, recording, registration, documentary, filing and other non-income Taxes
and administrative fees (including, without limitation, notary fees) arising in
connection with the consummation of the series of

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transactions contemplated by this Agreement whether levied on the Parent, the
Surviving Company, the Company or any of the Members.

          8.2 Preparation and Filing of Tax Returns; Payment of Taxes.

                    (a) Pre-Closing. The Company shall prepare and timely file
or shall cause to be prepared and timely filed all Tax Returns for the Company
for periods ending prior to Closing Date that are required to be filed (taking
into account extensions) prior to the Closing Date and shall pay all Taxes with
respect thereto.

                    (b) Filing Date Straddle of Closing Date. The Member
Representatives shall prepare and the Surviving Company shall file or cause to
be filed all Tax Returns for the Company for periods ending prior to or on the
Closing Date that are required to be filed (taking into account extensions)
after the Closing Date and the Surviving Company shall pay all Taxes with
respect thereto. To the extent that the Taxes attributable to the periods
beginning before the Closing Date have not been accrued for on the Final Balance
Sheet as determined by the parties pursuant to Section 1.6, the Indemnifying
Members shall pay the Surviving Company the amount of such Taxes that were not
accrued by means of a withdrawal from the Escrow Fund.

                    (c) Taxable Period Straddle of Closing Date. The Surviving
Company shall prepare any Tax Return to be prepared and filed for taxable
periods beginning before the Closing Date and ending after the Closing Date and
Surviving Company shall file such returns and shall pay all Taxes with respect
thereto. Such returns shall be prepared on a basis consistent with the last
previous similar Tax Return to the extent permitted under applicable law. To the
extent that the Taxes attributable to the periods beginning before the Closing
Date have not been accrued for on the Final Balance Sheet as determined by the
parties pursuant to Section 1.6, the Indemnifying Members shall pay the
Surviving Company the amount of such Taxes that were not accrued by means of a
withdrawal from the Escrow Fund.

                    (d) Post-Closing. The Surviving Company shall prepare and
file all tax returns for periods beginning on and after the Closing Date.

          8.3 Audits, Assessments, Etc. Whenever any taxing authority sends a
notice of an audit, initiates an examination of the Company, or otherwise
asserts a claim, makes an assessment, or disputes the amount of Taxes for which
the Members are or may be liable under this Agreement, the recipient of such
notice shall promptly inform the other Parties. The failure of the recipient to
notify the other Parties promptly shall not relieve the Members of any
obligations under this Agreement except to the extent such failure materially
prejudices the Members. The Parent shall have the exclusive right to control any
resulting proceedings. The Member Representatives shall have the right to
participate at the Members’ own expense, in such proceeding, or portion thereof,
only to the extent such proceeding, or portion thereof, or determination, or
portion thereof, affects the amount of Taxes for which the Members are liable
under this Agreement, and the Parent may settle any such proceeding or
determination, or portion thereof, to the extent such proceeding or
determination affects the amount of Taxes for which the Members are liable under
this Agreement only with the prior written consent of the Member
Representatives, which consent shall not be unreasonably withheld.

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          8.4 Termination of Tax Sharing Agreements. All Tax sharing, Tax
indemnity or Tax distribution agreements or similar arrangements, including any
such provisions in the Company’s Operating Agreement, with respect to or
involving the Company, if any, shall be terminated prior to the Closing Date
and, after the Closing Date, the Parent, the Company, the Surviving Company and
their Affiliates shall not be bound thereby or have any liability thereunder for
amounts due in respect of periods ending on or before the Closing Date.

          8.5 Indemnification Claims.

                    (a) Scope of Article VIII. Any claim by any Party relating
to a breach by another Party of its obligations under this Article VIII shall be
pursued in accordance with the procedures for indemnification claims set forth
in this Article VIII, and shall not, except for Section 7.7, otherwise be
subject to the terms and conditions, set forth in Article VII. To the extent
there is any inconsistency between the terms of Article VII and this Article
VIII with respect to the allocation of responsibility between the Company, the
Members and the Parent for Taxes relating to the business of the Company, the
provisions of this Article VIII shall govern.

                    (b) Claim Procedure. For purposes of clarification, (i)
claims for a breach of an obligation under this Article VIII may be made by a
Party at any time prior to the thirtieth (30th) day after the expiration of the
statute of limitations applicable to the Tax matter to which the claim relates,
(ii) in order to seek indemnification under this Article VIII, the Parent shall
deliver a Claim Notice to the Member Representatives, and if the Parent is
seeking to enforce such claim pursuant to the Escrow Agreement, the Parent shall
deliver a copy of the Claim Notice to the Escrow Agent in the form prescribed by
the Escrow Agreement, (iii) upon delivery of any Claim Notice hereunder, the
applicable representation or warranty shall survive until, but only to the
extent of, and for purposes of the resolution of, the specific matter covered by
such notice, and (iv) within twenty (20) days after delivery of a Claim Notice,
the Member Representatives shall deliver to the Parent a Response in which the
Member Representatives shall: (1) agree that the Parent is entitled to receive
all of the Claimed Amount (in which case the Member Representatives and the
Parent shall deliver to the Escrow Agent, within three days following the
delivery of the Response, a written notice executed by the Member
Representatives and the Parent instructing the Escrow Agent to release the
Claimed Amount (or, if lesser, the amount remaining in the Escrow Account) to
the Parent); (2) agree that the Parent is entitled to receive the Agreed Amount
(in which case the Member Representatives and the Parent shall deliver to the
Escrow Agent, within three (3) days following the delivery of the Response, a
written notice executed by the Member Representatives and the Parent instructing
the Escrow Agent to release the Agreed Amount (or, if lesser, the amount
remaining in the Escrow Account) to the Parent), or (3) dispute that the Parent
is entitled to receive any of the Claimed Amount.

          8.6 Dispute Resolution. During the thirty (30) day period following
the delivery of a Response that reflects a Dispute, the Parent and the Member
Representatives shall attempt in good faith to resolve the Dispute. If, at the
end of the thirty (30) day period, the Parent and the Member Representatives
have not resolved such Dispute, the Parent and the Member Representatives shall
refer the Dispute for determination to the Adjustment Accountants, and the
parties will be reasonably available and work diligently to facilitate the
Adjustment Accountants to render a determination within a twenty (20) day period
immediately following the referral to them. A determination by the Adjustment
Accountants with respect to any item of Dispute

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submitted to them will be binding on the Parent and the Members. The fees and
expenses of the Adjustment Accountants shall be borne by the Members on the one
hand and the Parent on the other hand based on the Pro Rata Award.

          8.7 Limitations. The Members shall have no right of contribution
against the Company or the Surviving Company with respect to any breach by the
Company of any of its representations, warranties, covenants or agreements. Any
payments made to the Parent pursuant to this Article VIII shall be treated as an
adjustment to the Aggregate Transaction Consideration for Tax purposes.

ARTICLE IX
TERMINATION

          9.1 Termination of Agreement. The Parties may terminate this Agreement
prior to the Closing, as provided below:

                     (a) the Company and Parent may terminate this Agreement by
mutual written consent;

                     (b) the Parent may terminate this Agreement by giving
written notice to the Company in the event the Company is in breach of any
representation, warranty or covenant contained in this Agreement, and such
breach (i) individually or in combination with any other such breach, would
cause the conditions set forth in clauses (b) or (c) of Section 6.1 not to be
satisfied and (ii) is not cured within twenty (20) days following delivery by
the Parent to the Company of written notice of such breach;

                     (c) the Company may terminate this Agreement by giving
written notice to the Parent in the event the Parent or the Merger Sub is in
breach of any representation, warranty or covenant contained in this Agreement,
and such breach (i) individually or in combination with any other such breach,
would cause the conditions set forth in clauses (b) and (c) of Section 6.2 not
to be satisfied and (ii) is not cured within twenty (20) days following delivery
by the Company to the Parent of written notice of such breach;

                     (d) the Parent may terminate this Agreement by giving
written notice to the Company if the Closing shall not have occurred on or
before May 31, 2008 by reason of the failure of any condition precedent under
Section 6.1 and such failure is not attributable to any action or inaction taken
by Parent or Merger Sub; or

                     (e) the Company may terminate this Agreement by giving
written notice to the Parent if the Closing shall not have occurred on or before
May 31, 2008 by reason of the failure of any condition precedent under Section
6.2 and such failure is not attributable to any action or inaction taken by the
Company.

          9.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9.1, all obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party; provided that
each Party shall remain liable for any breach of this Agreement prior to its
termination; and provided, further, that the provisions of Sections 5.8
(Proprietary Information) and 5.10 (Confidentiality), and this Section 9.2 shall
remain in full

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force and effect and survive any termination of this Agreement pursuant to the
terms of this Article IX.

ARTICLE X
DEFINITIONS

          For purposes of this Agreement, each of the following terms shall have
the meaning set forth below.

          “Accounting Policies” shall mean the cost accounting policies set
forth in Exhibit D to the Agreement.

          “Accounts Receivable” shall mean each and all accounts receivable of
the Company reflected on the Most Recent Balance Sheet (other than those paid
since such date).

          “Adjustment Accountants” shall have the meaning set forth in Section
1.6(d)(iii) of this Agreement.

          “Adverse Consequences” shall have the meaning set forth in the
definition of Claim Notice.

          “Affiliate” shall mean any affiliate, as defined in Rule 12b-2 under
the Securities Exchange Act of 1934.

          “Agreed Amount” shall mean part, but not all, of the Claimed Amount.

          “Aggregate Transaction Consideration” shall mean the sum of:

                    (a) the Closing Amount;

                    (b) any Closing Amount Adjustment payable to the Members in
accordance with Section 1.6           hereof;

                    (c) the Earnout Payment and Earnout Override payable to the
Members, if any; and

                    (d) any amount released to the Members from the Escrow Fund,
both previously paid and then           currently payable as of the applicable
Payment Date.

          “Agreement” shall have the meaning set forth in the first paragraph of
this Agreement.

          “Articles of Organization” shall mean the articles of organization of
the Company under the MRS.

          “Business” shall mean the provision of revenue cycle management
services as provided by the Company to physician groups and ambulatory care
centers as of the Effective Time, consisting of outsourced billing management
services, claims denial management, software sales, technology support services,
account management services and data management and decision support information
technology. As of the date of this Agreement, the Company

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conducts the following functions and activities in order to provide such
services to healthcare providers:

                    (i) comprehensive billing and fee collection;

                    (ii) printing and mailing of claim forms and electronic
submission of claims and printing and           mailing of patient statements;

                    (iii) posting of payments, management of adjustments and
explanation of benefits reviews;

                    (iv) designing and automating provider-specific sets of
decision criteria to bill, correct and remedy,           collect and monitor
revenue cycle trends using rules-based analytics;

                    (v) re-selling third-party practice management software;

                    (vi) training with regards to and support of, selected
third-party software;

                    (vii) client implementation and customer support;

                    (viii) providing data analytics, application interfaces, and
application hosting;

                    (ix) routine account manager client meetings and client
performance reviews;

                    (x) accounting services;

                    (xi) credentialing services;

                    (xii) coding review and education; and

                    (xiii) accounts receivable follow-up.

          “Business Day” means any day that is not a Saturday, Sunday or other
day on which commercial banks in the City of Los Angeles, California are
required or authorized by law to be closed.

          “Cash” shall mean all cash and cash equivalents of the Company as of
the Closing (including liquid debt instruments held as assets of the Company
with maturities of three months or less), calculated in accordance with GAAP and
the Accounting Policies.

          “CERCLA” shall mean the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

          “Claim Notice” shall mean written notification which contains (i) a
description of the Damages incurred by the Indemnified Party and the Claimed
Amount of such Damages, to the extent then known, (ii) a statement that the
Indemnified Party is entitled to indemnification under Article VII for such
Damages and a reasonable explanation of the basis therefor, and (iii) a demand
for payment in the amount of such Damages. Without limiting the foregoing, a
Claim Notice shall also include written notification which contains (i) claims
dependent upon the outcome of any actual proceeding, investigation, suit or
action or any proceeding, investigation, suit or action threatened in writing (a
“Pending Action”), and (ii) Parent’s good faith determination that there exists
a Pending Action and setting forth a reasonable estimate of any and all Damages,
net of any Tax benefit actually realized as a reduction in tax due or receipt of
tax refund or any insurance proceeds received by any party entitled to
indemnification as a result thereof (“Adverse Consequences”) reasonably
anticipated to be incurred in connection with such Pending Action, including,
without limitation, Adverse Consequences which may be incurred if such Pending
Action is determined adversely (such amount the “Pending Action Amount”), then
that portion of the Escrow Fund equal to the Pending Action Amount, less that
portion of the Deductible, to the extent applicable, if any remains that has not
been used to offset prior claims,

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shall be deemed to be “Disputed Funds” under the terms of the Escrow Agreement.
Upon all or any portion of the Pending Action Amount becoming a Claimed Amount,
Parent and the Member Representatives shall comply with the terms hereof
regarding Claimed Amounts and such Claimed Amounts shall be deemed Claimed
Amounts for which notice has been timely given.

          “Claimed Amount” shall mean the amount of any Damages incurred by the
Indemnified Party.

          “Closing” shall mean the closing of the series of transactions
contemplated by this Agreement.

          “Closing Amount” shall mean the following:

 

 

 

          (a) Cash: Eight Million Dollars ($8,000,000);

 

 

 

          (b) Parent Stock: Seven Million Three Hundred Fifty Thousand Dollars
($7,350,000) of Parent’s unregistered, restricted Common Stock (the “Parent
Stock”) delivered to the Members on the Closing Date valued based upon the
average closing price of the Parent Stock as reported by the Nasdaq Global
Select Market over the 45 trading days ending on the trading day immediately
prior to the Closing Date (the “Parent Stock Valuation”) and subject to the
Stock Restriction; and

 

 

 

          (c) The Closing Amount shall be (i) reduced by the Estimated Net Debt
Adjustment, if any, (ii) reduced by the Estimated Working Capital Adjustment, if
any, and (iii) decreased by the cash and Parent Stock amounts (valued using the
Parent Stock Valuation) to be deposited into the Escrow Fund.

          “Closing Amount Adjustment” shall have the meaning set forth in
Section 1.6(c) of this Agreement.

          “Closing Date” shall have the meaning set forth in Section 1.2.

          “Closing Date Working Capital” shall mean, as of the Closing Date and
giving effect to the consummation of the Merger, the difference of the Company’s
total current assets (including accounts receivable and prepaid expenses but
excluding Cash), minus the Company’s total current liabilities (excluding the
current portion of any Debt but including the Company Closing Expenses to the
extent not paid), determined in accordance with GAAP and the Accounting
Policies.

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

          “Coding Activities” shall have the meaning set forth in Section 2.23.

          “Commitments” shall have the meaning set forth in the definition of
Equity Interest.

          “Company” shall have the meaning set forth in the first paragraph of
this Agreement.

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          “Company Certificate” shall mean a certificate to the effect that each
of the conditions specified in of Section 6.1 of this Agreement is satisfied in
all respects.

          “Company Closing Expenses” shall mean the expenses incurred by the
Company in connection with the consummation of the series of transactions
contemplated hereby, including, without limitation, transaction-related expenses
of counsel and accountants (but not including regular audit fees), printing,
filing, investment banking and financial advisory fees and commissions.

          “Company Intellectual Property” shall mean the Intellectual Property
owned by the Company and used in connection with the Business.

          “Company Plan” shall mean any Employee Benefit Plan maintained, or
contributed to, by the Company or any ERISA Affiliate for employees or Members
of the Company or an ERISA Affiliate.

          “Customer Deliverables” shall mean the services that the Company (i)
currently provides, or (ii) has provided within the previous five years.

          “Damages” shall mean any and all debts, obligations and other
liabilities (whether absolute, contingent, fixed or otherwise, or whether known
or unknown, or due or to become due or otherwise), diminution in value, monetary
damages (but not incidental, consequential or punitive damages), fines, fees,
penalties, interest obligations, deficiencies, losses and reasonable expenses
(including amounts paid in settlement, interest, court costs, reasonable costs
of investigators, investigation of allegations, defense of allegations,
reasonable fees and expenses of attorneys, accountants, financial advisors and
other experts, and other expenses of litigation or threatened litigation).

          “Debt” shall mean the sum of (a) all obligations of the Company for
borrowed money, or with respect to deposits or advances of any kind to the
Company, (b) all obligations of the Company evidenced by bonds, debentures,
notes, preferred equity or similar instruments, (c) all obligations of the
Company upon which interest charges are customarily paid, (d) all obligations of
the Company under conditional sale or other title retention agreements relating
to property purchased by the Company, (e) all obligations of the Company issued
or assumed as the deferred purchase price of property or services (excluding
obligations of the Company or creditors for raw materials, inventory, services
and supplies incurred in the Ordinary Course of Business), (f) all capitalized
lease obligations of the Company, (g) all obligations of others secured by any
lien on property or assets owned or acquired by the Company, whether or not the
obligations secured thereby have been assumed, (h) all obligations of the
Company under interest rate or currency hedging transactions (valued at the
termination value thereof), (i) all letters of credit issued for the account of
the Company, and (j) all guarantees and arrangements having the economic effect
of a guarantee by the Company of any indebtedness of any other person. For the
purposes of clarification, Debt does not include accounts payable or other
liabilities to the extent such amounts are taken into account in calculating
Estimated Working Capital or Closing Date Working Capital as contemplated under
Section 1.6 of this Agreement.

          “Deductible” shall have the meaning set forth in Section 7.7(a).

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          “Disclosure Schedule” shall mean the disclosure schedule provided by
the Company to the Parent on the date hereof and accepted in writing by the
Parent. A full set of all contents of the Disclosure Schedule was delivered to
the Parent no less than three (3) Business Days prior to the execution of this
Agreement.

          “Dispute” shall mean the dispute resulting if the Indemnifying Party
in a Response disputes its liability for all or part of the Claimed Amount.

          “Earnout Accountants” shall have the meaning set forth in Section
1.7(b).

          “E&O Policy” has the meaning set forth in Section 5.11 of the
Agreement.

          “Earnout Certificate” shall have the meaning set forth in Section
1.7(a) of this Agreement.

          “Earnout Override” shall have the meaning set forth in Section 1.7(c)
of the Agreement.

          “Earnout Payment” shall have the meaning set forth in Section 1.7(a)
of this Agreement.

          “Earnout Period” shall have the meaning set forth in Section 1.7(a) of
this Agreement.

          “Effective Time” shall mean the time at which the Missouri Secretary
of State files the Notice of Merger for record.

          “Employee Benefit Plan” shall mean any “employee pension benefit plan”
(as defined in Section 3(3) of ERISA), any “employee welfare benefit plan” (as
defined in Section 3(1) of ERISA), and any other written or oral plan, agreement
or arrangement involving direct or indirect compensation, including insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, equity options, equity purchase, phantom equity, equity appreciation or
other forms of incentive compensation or post-retirement compensation.

          “Environmental Law” shall mean any federal, state or local law,
statute, rule, order, directive, judgment, Permit or regulation or the common
law relating to the environment, occupational health and safety, or exposure of
persons or property to Materials of Environmental Concern, including any
statute, regulation, administrative decision or order pertaining to: (i) the
presence of or the treatment, storage, disposal, generation, transportation,
handling, distribution, manufacture, processing, use, import, export, labeling,
recycling, registration, investigation or remediation of Materials of
Environmental Concern or documentation related to the foregoing; (ii) air, water
and noise pollution; (iii) groundwater and soil contamination; (iv) the release,
threatened release, or accidental release into the environment, the workplace or
other areas of Materials of Environmental Concern, including emissions,
discharges, injections, spills, escapes or dumping of Materials of Environmental
Concern; (v) transfer of interests in or control of real property which may be
contaminated; (vi) community or worker right-to-know disclosures with respect to
Materials of Environmental Concern; (vii) the protection of wild life, marine
life and wetlands, and endangered and threatened species; (viii) storage tanks,
vessels, containers, abandoned or discarded barrels and other closed
receptacles; and (ix) health and safety of employees and other persons. As used
above, the term “release” shall have the meaning set forth in CERCLA.

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          “Environmental Permits” shall mean all permits, approvals,
identification numbers, licenses and other authorizations required under or
issued pursuant to any applicable Environmental Law.

          “Equity Interest” means (i) with respect to a limited liability
company, partnership, trust or similar Person, any and all units, membership
interests or other partnership/limited liability company interests, and any
Commitments with respect thereto, (ii) with respect to a corporation, any and
all shares of capital stock and any option, warrant, convertible security,
subscription right, conversion right, exchange right or other agreement that
could require a Person to issue any of its capital stock or sell any capital
stock (“Commitments”) with respect thereto, and (iii) any other equity
ownership, participation or security in a Person.

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

          “ERISA Affiliate” shall mean any entity which is, or at any applicable
time was, a member of (1) a controlled group of corporations (as defined in
Section 414(b) of the Code), (2) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (3) an affiliated service
group (as defined under Section 414(m) of the Code or the regulations under
Section 414(o) of the Code), any of which includes or included the Company.

          “Escrow Account” shall be the account holding the Escrow Fund
established for the purposes described under Section 1.8(a).

          “Escrow Agreement” shall mean an escrow agreement in substantially the
form attached hereto as Exhibit E.

          “Escrow Agent” shall mean the escrow agent under the Escrow Agreement,
which shall initially be US Bank, Los Angeles, California.

          “Escrow Fund” shall mean the fund established pursuant to the Escrow
Agreement and paid in to the Escrow Account at the Closing pursuant to Section
1.8 consisting of the sum of:

                    (i) Five Hundred Thousand Dollars ($500,000); plus

                    (ii) shares of Parent Stock, equal to Seven Million Dollars
($7,350,000) of Parent Stock (valued                     using the Parent Stock
Valuation).

          “Escrow Stock Valuation” shall mean the value assigned to the shares
of Parent Stock in the Escrow Fund equal to the average closing price of the
Parent Stock as reported by the Nasdaq Global Select Market over the 45 trading
days ending on the trading day immediately prior to the date of the release of
the Parent Stock from the Escrow Fund.

          “Estimated Net Debt” shall have the meaning set forth in Section
1.6(a)(ii).

          “Estimated Net Debt Adjustment” shall have the meaning set forth in
Section 1.6(a)(ii).

          “Estimated Working Capital” shall have the meaning set forth in
Section 1.6(b)(ii).

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          “Estimated Working Capital Adjustment” shall have the meaning set
forth in Section 1.6(b)(ii).

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

          “Expected Claim Notice” shall mean a notice that, as a result of a
Legal Proceeding instituted by or written claim made by a third party, an
Indemnified Party reasonably expects to incur Damages for which it is entitled
to indemnification under Article VII.

          “Final Balance Sheet” shall have the meaning set forth in Section
1.6(d)

          “Financial Statements” shall mean:

                    (a) the unaudited balance sheet and statement of income and
cash flows of the Company as of the end of and for the twelve months ended
December 31, 2007; and

                    (b) the unaudited balance sheets and unaudited statements of
income and cash flows of the Company as of and for the three (3) months ended as
of March 31, 2008.

          “Fiscal Year 2009” shall the period from May 1, 2008 through March 31,
2009.

          “Fiscal Year 2010” shall the period from April 1, 2009 through March
31, 2010.

          “GAAP” shall mean generally accepted accounting principles in the
United States of America applied on a consistent basis and as set forth in the
Accounting Policies.

          “Governmental Entity” shall mean any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.

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

          “Hazardous Materials” shall mean (a) petroleum and petroleum products,
radioactive materials, asbestos-containing materials, mold, urea formaldehyde
foam insulation, transformers or other equipment that contain polychlorinated
biphenyls and radon gas, (b) any other chemicals, materials or substances
defined as or included in the definition of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted
hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” or
“pollutants,” or words of similar import, under any applicable Environmental
Law, and (c) any other chemical, material or substance which is regulated by any
Environmental Law.

          “Healthcare Laws” shall have the meaning set forth in Section 2.29 of
this Agreement.

          “HIPAA” shall mean the Health Insurance Portability and Accountability
Act of 1996, as it may be amended from time to time, and any rules or
regulations promulgated pursuant thereto.

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          “HIPAA Commitments” shall have the meaning set forth in Section
2.23(b) of this Agreement.

          “Indemnified Party” shall mean a party entitled, or seeking to assert
rights, to indemnification under Article VII.

          “Indemnifying Party” shall mean the party from whom indemnification is
sought by the Indemnified Party.

          “Indemnifying Members” shall have the meaning set forth in the first
paragraph of this Agreement.

          “InfoNow” shall mean InfoNow Solutions, LLC, a Missouri limited
liability company.

          “Intellectual Property” shall mean all:

                    (a) patents, patent applications, patent disclosures and all
related continuation, continuation-in-part, divisional, reissue, reexamination,
utility model, certificate of invention and design patents, patent applications,
registrations and applications for registrations;

                    (b) trademarks, service marks, trade dress, Internet domain
names, logos, trade names and corporate names and registrations and applications
for registration thereof;

                    (c) copyrightable works, copyrights and registrations and
applications for registration thereof;

                    (d) copyright, confidential information and trade secrets
embodied in computer software and documentation;

                    (e) inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques, research
and development information, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and supplier lists
and information;

                    (f) other proprietary rights relating to any of the
foregoing (including remedies against infringements thereof and rights of
protection of interest therein under the laws of all jurisdictions); and

                    (g) copies and tangible embodiments thereof.

          “Internal Systems” shall mean the internal computer systems of the
Company that are used in its and in connection with business or operations,
including computer hardware systems, software applications and embedded systems.

          “Key Employees” shall mean Mike Noble, Ben Tischler, Monte Sandler and
Mike Gerling.

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          “Knowledge” of the Company shall mean the knowledge of the Key
Employees and officers of the Company. “Knowledge” of the Parent or the Merger
Sub shall mean the knowledge of Patrick Cline and Timothy Eggena.

          “Law” means any federal, national, supranational, state, provincial,
local or similar statute, law, ordinance, regulation, rule, code, order,
requirement or rule of law (including common law).

          “Lease” shall mean any lease or sublease pursuant to which the Company
leases or subleases from another party any real property.

          “Leased Real Property” means the real property leased by the Company
as tenant, together with, to the extent leased by the Company, all buildings and
other structures, facilities or improvements currently located thereon, all
fixtures, systems, equipment and items of personal property of the Company
attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.

          “Legal Proceeding” shall mean any action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity or before any
arbitrator or mediator.

          “Material Adverse Effect” shall mean any material adverse change,
event, circumstance or development with respect to, or material adverse effect
on, (i) the business, assets, liabilities, capitalization, condition (financial
or other), or results of operations of the Company, or (ii) the ability of the
Parent to operate the business of the Company in the manner in which it is
conducted at the time of the Closing; provided, however, that none of the
following will be deemed to constitute, and none of the following will be taken
into account in determining whether there has been, a Material Adverse Effect as
of the execution of this Agreement and from such execution until the Closing
Date: (a) changes in GAAP, or (b) any adverse change, event, development, or
effect arising from or relating to (1) general business or economic conditions,
(2) national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon the United States, or any of its territories, possessions,
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States, (3) changes in financial, banking or
securities markets (including any disruption thereof and any decline in the
price of any security or any market index), (4) the taking of any action
contemplated by this Agreement or any of the other agreements contemplated by
this Agreement, (5) the public announcement of the execution of this Agreement
or the identification of Parent or the effect that such public announcement or
the consummation of the transactions contemplated by this Agreement has on the
business or continuing relationships of Company. For the avoidance of doubt, the
parties agree that the terms “material,” “materially” or “materiality” as used
in this Agreement with an initial lower case “m” shall have their respective
customary and ordinary meanings, without regard to the meaning ascribed to
Material Adverse Effect.

          “Material Contract” shall have the meaning set forth in Section 2.14
of this Agreement.

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          “Materials of Environmental Concern” shall mean any: pollutants,
contaminants or hazardous substances (as such terms are defined under CERCLA),
pesticides (as such term is defined under the Federal Insecticide, Fungicide and
Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined
under the Resource Conservation and Recovery Act), chemicals, other hazardous,
radioactive or toxic materials, oil, petroleum and petroleum products (and
fractions thereof), or any other material (or article containing such material)
listed or subject to regulation under any law, statute, rule, regulation, order,
Permit, or directive due to its potential, directly or indirectly, to harm the
environment or the health of humans or other living beings.

          “Members” shall mean the Members of record of the Company immediately
prior to the Effective Time.

          “Member Representatives” means Mike Noble and Ben Tischler and “Member
Representative” means each of Mike Noble and Ben Tischler.

          “Membership Interest Purchase Plan” shall mean any Membership Interest
option plan or other equity-related plan of the Company.

          “Member Transmittal Letter” shall have the meaning set forth in
Section 1.3(b)(i) this Agreement.

          “Membership Interests” shall mean the interests in the Company held by
the Members under the terms of the Company’s Operating Agreement.

          “Merger” shall mean the merger of the Merger Sub with and into the
Company in accordance with the terms of this Agreement.

          “Merger Sub” shall have the meaning set forth in the first paragraph
of this Agreement.

          “MRS” shall have the meaning set forth in Section 1.1 of this
Agreement.

          “Most Recent Balance Sheet” shall mean the unaudited balance sheet of
the Company as of the Most Recent Balance Sheet Date.

          “Most Recent Balance Sheet Date” shall mean February 29, 2008.

          “Net Debt” shall mean Debt minus any Cash as of the Closing.

          “Notice of Merger” shall mean the notice of merger or other
appropriate documents required to effect the Merger prepared and executed in
accordance with the MRS in form and substance satisfactory to the Company and
Parent

          “Operating Agreement” shall mean the operating agreement of the
Company.

          “Ordinary Course of Business” shall mean the ordinary course of
business consistent with recent past custom and practice (within the past 24
months) (including with respect to frequency and amount).

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          “Parent” shall have the meaning set forth in the first paragraph of
this Agreement.

          “Parent Certificate” shall mean a certificate to the effect that each
of the conditions specified in Section 6.2 of this Agreement is satisfied in all
respects.

          “Parent Material Adverse Effect” means any material adverse change,
event, circumstance or development with respect to, or material adverse effect
on, the business, assets, liabilities, capitalization, financial condition, or
results of operations of the Parent; provided, however, that none of the
following will be deemed to constitute, and none of the following will be taken
into account in determining whether there has been, a Parent Material Adverse
Effect: (a) changes in GAAP, (b) any adverse change, event, development, or
effect arising from or relating to (1) general business or economic conditions,
including such conditions related to the business of Parent, (2) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon the United States, or any of its territories, possessions, or diplomatic or
consular offices or upon any military installation, equipment or personnel of
the United States, (3) changes in financial, banking or securities markets
(including any disruption thereof and any decline in the price of any security
or any market index), (4) changes in any Law applicable to businesses generally,
(5) the taking of any action contemplated by this Agreement or any of the other
agreements contemplated by this Agreement, (6) the public announcement of the
execution of this Agreement or the identification of the Company or the effect
that such public announcement or the consummation of the transactions
contemplated by this Agreement has on the business or continuing relationships
of Parent.

          “Parent SEC Reports” means all forms, reports and documents required
to be filed by Parent with the Securities and Exchange Commission under the
Securities Act and the Securities Exchange Act since December 31, 2004.

          “Parent Stock” has the meaning set forth in the definition of Closing
Amount.

          “Parent Stock Valuation” shall have the meaning set forth in the
definition of Closing Amount.

          “Parties” or “Party” shall mean individually and collectively (as the
case may be) the Parent, the Merger Sub, the Company and the Indemnifying
Members.

          “Payment Date” shall have the meaning set forth in Section 1.5 of this
Agreement.

          “Pending Action” shall have the meaning set forth in the definition of
Claim Notice.

          “Pending Action Amount” shall have the meaning set forth in the
definition of Claim Notice.

          “Permits” shall mean all permits, licenses, registrations,
certificates, orders, approvals, franchises, variances and similar rights issued
by or obtained from any Governmental Entity (including those issued or required
under Environmental Laws and those relating to the occupancy or use of owned or
leased real property).

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          “Person” shall mean any natural person, corporation, limited liability
company, general or limited partnership, proprietorship, other business,
non-profit or charitable organization, trust, union, association (whether or not
incorporated in any jurisdiction), or any court, arbitration tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency.

          “Pro Rata Award” means a fraction the numerator of which is the dollar
amount of disputes resolved by the Adjustment Accountants or the Earnout
Accountants, as the case may be, in favor of Parent or the Members, as the case
may be, and the denominator is the dollar amount of all disputes resolved by the
Adjustment Accountants or Earnout Accountants, as the case may be.

          “Pro Rata Share” of any particular Indemnifying Member shall mean the
total Membership Interests owned by such Indemnifying Member divided by the
total number of Membership Interests owned by all of the Indemnifying Members or
if such Membership Interest is expressed in the Operating Agreement as a
percentage, then such percentage of such particular Indemnifying Member.

          “Reasonable Best Efforts” shall mean best efforts, to the extent
commercially reasonable.

          “Referred Revenue” shall mean, for the fiscal year so indicated, the
gross revenue collected by the Company from agreements concerning the Business
with entities referred to the Company by Parent or its Affiliates during such
fiscal year.

          “Release” means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing, appearing and
the like into or upon any land, building, surface, subsurface or water or air or
otherwise entering into the Environment.

          “Releasees” shall have the meaning set forth in Section 1.12(a) of
this Agreement.

          “Requisite Member Approval” shall mean the adoption of this Agreement
and the approval of the Merger by the Members as required by Section 347.079 of
the MRS and the Company’s Operating Agreement.

          “Response” shall mean a written response containing the information
provided for in Section 7.4(b).

          “Rule” shall mean any constitution or statute or law or any judgment,
decree, injunction, order, ruling, ordinance or final regulation or rule of any
Governmental Entity, including, without limitation, those relating to
disclosure, usury, equal credit opportunity, equal employment, environment,
employee safety and health, fair credit reporting and anti-competitive
activities.

          “SEC” means the Securities and Exchange Commission.

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

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          “Security Interest” shall mean any mortgage, pledge, security
interest, encumbrance, charge or other lien (whether arising by contract or by
operation of law), other than (i) mechanic’s, materialmen’s, landlord’s and
similar liens, (ii) liens arising under worker’s compensation, unemployment
insurance, social security, retirement, and similar legislation, (iii) liens for
taxes not yet due and payable, and (iv) liens on goods in transit incurred
pursuant to documentary letters of credit, in each case arising in the Ordinary
Course of Business of the Company and not material to the Company.

          “Significant Person” shall mean a Person listed in Section 2.24 of the
Disclosure Schedule.

          “Software” shall mean any of the software (including the documentation
thereto) owned by the Company and any software included with any of the
Company’s products and/or services or the Internal Systems.

          “Stock Restriction” shall mean the following restriction on the
transferability of the Parent Stock: subject to the requirements of applicable
securities laws, (i) one-third of the number of shares of Parent Stock held by
any Member shall become free from the imposition of restriction upon transfer
imposed by this Agreement upon the first anniversary of the Closing Date; and
(ii) the remaining two-thirds of the number of shares of Parent Stock held by
any Member shall become free from the imposition of restriction upon transfer
imposed by this Agreement upon the second anniversary of the Closing Date. Any
transfer or attempted transfer of the Parent Stock other than in compliance with
the foregoing shall be void and of no force or effect. Certificates representing
the Parent Stock shall bear a legend as follows for so long as such shares
remain in escrow but which shall be removed once such shares are released from
the Escrow Fund; provided that the first such legend set forth immediately below
is not required by Rule 144 under the Securities Act (the Parent’s transfer
agent will be similarly notified with respect to such certificates and any
electronic account entries):

 

 

 

 

THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS
OF THE VARIOUS STATES, AND HAVE BEEN ISSUED AND SOLD PURSUANT TO AN EXEMPTION
FROM THE ACT, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED BY THE
HOLDER THEREOF AT ANY TIME EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE ACT COVERING THESE SHARES, OR (2) UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT THESE
SHARES MAY BE TRANSFERRED WITHOUT REGISTRATION.

 

 

 

 

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
UPON TRANSFER AND RIGHTS AS SET FORTH IN AN AGREEMENT AND PLAN OF MERGER DATED
May 16, 2008, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION.

 

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          If requested by a Member in writing to the Secretary of Parent, such
legend shall be removed from the appropriate certificates representing the
Parent Stock on the appropriate anniversary date.

          “Subsidiary” or “Subsidiaries” means any entity with respect to which
any Person (or a Subsidiary thereof) owns 50% or more of the outstanding Equity
Interests or has the power, through the ownership of Equity Interests or
otherwise, to elect a majority of the directors or similar management body or to
direct the business and policies of such entity.

          “Surviving Company” shall mean the Company, as the surviving entity in
the Merger.

          “Target Net Debt” shall have the meaning set forth in Section
1.6(a)(ii) of this Agreement.

          “Target Working Capital” shall have the meaning set forth in Section
1.6(b)(i) of this Agreement.

          “Taxes” (including with correlative meaning “Tax” and “Taxable”) shall
mean (a) any and all taxes, and any and all other charges, fees, levies, duties,
deficiencies, customs or other similar assessments or liabilities in the nature
of a tax, including without limitation any income, gross receipts, ad valorem,
net worth, premium, value-added, alternative or add-on minimum, excise,
severance, stamp, occupation, windfall profits, real property, personal
property, assets, sales, use, capital stock, capital gains, documentary,
recapture, transfer, transfer gains, estimated, withholding, employment,
unemployment insurance, unemployment compensation, social security, business
license, business organization, environmental, workers compensation, payroll,
profits, license, lease, service, service use, gains, franchise and other taxes
imposed by any federal, state, local, or foreign Governmental Entity, (b) any
interest, fines, penalties, assessments, or additions resulting from,
attributable to, or incurred in connection with any items described in this
paragraph or any contest or dispute thereof, and (c) any items described in this
paragraph that are attributable to another person, but that the Company is
liable to pay by law, by contract, or otherwise.

          “Tax Returns” shall mean any and all reports, returns, declarations,
statements, forms, or other information required to be supplied to a
Governmental Entity or to any individual or entity in connection with Taxes and
any associated schedules, attachments, work papers or other information provided
in connection with such items, including any amendments, thereof.

          “Third Party Action” shall mean any suit, investigation or proceeding
(private or governmental) by a person or entity other than a Party for which
indemnification may be sought by a Party under Article VII.

          “Trading Partners” shall have the meaning set forth in Section
2.29(c).

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ARTICLE XI
MISCELLANEOUS

          11.1 Press Releases and Announcements. The parties acknowledge that
the Parent is a public reporting company under the Securities Act and the
Exchange Act. Accordingly, the Parent will create the form of press release to
be issued promptly after the Closing which it shall issue at its sole
discretion. The Company agrees that it shall not issue any other press release
or public announcement or make any statement to third parties relating to the
subject matter of this Agreement (including disclosure of any terms of this
Agreement) without the prior written approval of the Parent.

          11.2 No Third Party Beneficiaries. Except as otherwise set forth
herein, this Agreement shall not confer any rights or remedies upon any person
other than the Parties and their respective successors and permitted assigns and
the Members who are not also Indemnifying Members.

          11.3 Entire Agreement. This Agreement (including the documents
referred to herein), constitutes the entire agreement among the Parties with
respect to the subject matter hereof, and supersedes any prior or
contemporaneous understandings, agreements or representations by or among the
Parties, written or oral, express or implied, which may have related to the
subject matter hereof in any way.

          11.4 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein, the Members, and their
respective successors and permitted assigns. 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, Parent may
assign this Agreement to Affiliated parties as they exist now or in the future;
provided, further, that in the event of any such assignment, the Parent remains
ultimately liable for its obligations hereunder.

          11.5 Counterparts and Facsimile Signature. This Agreement may be
executed simultaneously in two or more counterparts, each of which shall be
deemed to be an original copy of this Agreement and all of which together shall
be deemed to constitute one and the same agreement. The exchange of copies of
this Agreement and of signature pages by facsimile transmission shall constitute
effective execution and delivery of this Agreement as to the Parties and may be
used in lieu of the original Agreement and signature pages thereof for all
purposes.

          11.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

          11.7 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered four business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent for next business day
delivery via a reputable nationwide overnight courier service, in each case to
the intended recipient as set forth below:

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If to the Company and Indemnifying
Members:

Copy to (which shall not constitute notice):

Ben Tischler
947 Kimswick Manor Lane
Ballwin, Missouri 63011
Telecopy: (314) 810-1445
Telephone: (314) 265-1444

Lewis, Rice & Fingersh, L.C.
500 North Broadway, Suite 2000
St. Louis, Missouri 63102-2147
Attn: John J. Riffle
Telephone: (314) 444-1349
Telecopy: (314) 612-1349

 

 

and

 

 

 

Mike Noble
115 Double Eagle Drive
St. Charles, Missouri 63303
Telecopy: (314) 810-1334
Telephone: (314) 265-1333

 

If to the Merger Sub or the Parent:

Copy to (which shall not constitute notice):

 

 

Quality Systems, Inc.
18191 Von Karman Avenue,
Suite 450
Irvine, California 92612
Attn: Chief Executive Officer
Telecopy: (949)255-2610
Telephone: (949)255-2600

Rutan & Tucker, LLP
611 Anton Boulevard, 14th Floor
Costa Mesa, California 92626
Attn: Thomas J. Crane
Telecopy: (714)546-9035
Telephone: (714)641-5100

 

 

          Any Party may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy or ordinary mail) other than
electronic mail, but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.

          11.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, and as to all other
matters (including the validity and applicability of the arbitration provisions
of this Agreement, the enforcement of any arbitral award made hereunder and any
other questions of arbitration law or procedure arising hereunder) shall be
governed by and construed in accordance with the internal laws of the State of
California without giving effect to any choice or conflict of law provision or
rule (whether of the State of California or any other jurisdiction) that would
cause the application of laws of any jurisdictions other than those of the State
of California.

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          11.9 Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Closing. No amendment of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the Parties. No waiver of any right or remedy
hereunder shall be valid unless the same shall be in writing and signed by the
Party giving such waiver. No waiver by any Party with respect to any default,
misrepresentation or breach of warranty or covenant hereunder shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.

          11.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

          11.11 Construction.

                    (a) The language used throughout this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any Party.

                    (b) All terms and words used in this Agreement, regardless
of whether singular or plural, or the gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.

                    (c) Any reference to any federal, state, local or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.

                    (d) Any reference herein to “including” shall be interpreted
as “including without limitation”.

                    (e) Any reference to any Article, Section or paragraph shall
be deemed to refer to an Article, Section or paragraph of this Agreement, unless
the context clearly indicates otherwise.

          11.12 Attorneys Fees. Except as otherwise expressly set forth herein,
in the event of any litigation or arbitration proceeding arising out of any
disputes under this Agreement, the prevailing party shall be entitled to recover
their reasonable costs and expenses including, without limitation, reasonable
attorneys fees.

          11.13 Arbitration. Except for the (i) adjustment resolution process
involving the Accountants in Section 1.6 and (ii) the dispute resolution
provisions set forth in Section 1.7, any

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claim arising out of or related to this Agreement, or a breach hereof, is to be
settled by arbitration in accordance with the procedures set forth in this
Section. The parties agree that, in the event of a dispute between them relating
to or arising out of this Agreement, the parties will submit such dispute to
binding arbitration as provided herein. All arbitrations will be conducted in
Orange County, California, or at another location mutually approved by the
parties, pursuant to the Commercial Arbitration Rules of the American
Arbitration Association except as provided herein. The arbitrator used will be
selected from arbitrators employed by the American Arbitration Association and
the decisions of the arbitrator are final and binding on the parties. All
arbitrations will be undertaken pursuant to the Federal Arbitration Act, where
applicable, and the decision of the arbitrator is enforceable in any court of
competent jurisdiction. Both parties agree to waive their respective rights to
further appeal or redress in any other court or tribunal except solely for the
purpose of obtaining execution of the decision resulting from the arbitration
proceeding. In the event of any arbitration or other legal proceeding brought by
either party against the other party with regard to any matter arising out of or
related to this Agreement, each party hereby expressly agrees that the final
determination and award decision will also provide for an allocation and
division between or among the parties to the arbitration, of: (i) reasonable
legal fees and expenses as set forth in Section 11.12; and (ii) all other
reasonable costs and expenses of the dispute, including court costs and
arbitrator’s, reasonable accountants’ and expert witness fees, costs and
expenses (including disbursements) incurred in connection with such proceedings,
on a basis which is just and equitable under the circumstances. The arbitrator
is directed by this Agreement to conduct the arbitration hearing no later than
three months from the service of the statement of claim and demand for
arbitration unless good cause is shown establishing that the hearing cannot
fairly and practically be so convened. Depositions will be taken only as deemed
appropriate by the arbitrator and only where good cause is shown. The parties to
the arbitration will be entitled to conduct document discovery by requesting
production of documents. Responses or objections will be served twenty days
after receipt of a request. The arbitrator will resolve any discovery disputes
by such pre-hearing conferences as may be needed. Both parties agree that the
arbitrator and any counsel of record to the proceeding have the power of
subpoena process as provided by law. Notices of demand for arbitration must be
filed in writing in accordance with Section 11.7. A demand for arbitration is to
be made within a reasonable time after the claim has arisen, but in no event
later than the date when institution of legal or equitable proceedings based on
such claim would be barred by the applicable statute of limitations. The award
rendered by the arbitrators, including as to legal fees in accordance with
Section 11.12, is final, and judgment may be entered upon it in accordance with
law in any court of competent jurisdiction.

[Signature page follows]

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SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER

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

 

 

 

 

 

QUALITY SYSTEMS, INC.

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Louis Silverman, Chief Executive Officer

 

 

 

 

 

and

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

   Paul Holt, Secretary

 

 

 

 

 

 

BUD MERGER SUB, LLC

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Louis Silverman, Chief Executive Officer

 

 

 

 

 

and

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Paul Holt, Secretary

 

 

 

 

 

 

 

 

LACKLAND ACQUISITION II, LLC dba
Healthcare Strategic Initiatives

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

and

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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INDEMNIFYING MEMBERS:

 

 

 

 

 

 

 

 

 

BEN TISCHLER

 

 

 

 

 

 

 

 

 

MIKE NOBLE

 

 

 

 

 

 

 

 

 

MONTE SANDLER

 

 

 

 

 

 

 

 

 

MIKE GERLING

 

 

 

 

 

 

 

MEMBER REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

BEN TISCHLER, solely as a Member

 

 

Representative

 

 

 

 

 

 

 

 

 

 

MIKE NOBLE, solely as a Member

 

 

Representative

 

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