Exhibit 10.1

ASSET PURCHASE AGREEMENT

by and between

CIRCLE GRAPHICS, INC.

a Delaware corporation

and

CAFEPRESS INC.

a Delaware corporation

Dated as of

February 11, 2015

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TABLE OF CONTENTS

 

          Page   Section 1    Definitions      1   1.1    Definitions      1  
Section 2    Purchase of Assets/Assumption of Liabilities      8   2.1   
Purchased Assets      8   2.2    Excluded Assets      9   2.3    Assumed
Liabilities and Obligations      10   2.4    Excluded Liabilities and
Obligations      10   2.5    Non-Assignable Assets      11   Section 3   
Transaction Consideration      12   3.1    Transaction Consideration      12  
3.2    Taxes and Tax Reporting      15   3.3    Transition Services Agreement   
  16   3.4    Commercial Agreement      16   Section 4    Closing      16   4.1
   Closing      16   4.2    Transfer of Possession      16   Section 5   
Representations and Warranties of Seller      17   5.1    Organization, Good
Standing, Corporate Power and Qualification      17   5.2    Due Authorization,
Binding Effect      17   5.3    No Conflicts      17   5.4    Governmental
Consents      17   5.5    Litigation      18   5.6    Intellectual Property     
18   5.7    Compliance with Contracts and Legal Requirements      19   5.8   
Assets Generally      20   5.9    Contracts      20   5.10    Governmental
Authorizations; Permits      21   5.11    Employee Matters      21   5.12   
Taxes      23   5.13    Material Relationships      24   5.14    Financial
Statements      25   5.15    Related-Party Transactions      25   5.16   
Insurance      25   5.17    Real Property      25   5.18    Environmental
Compliance      26   5.19    Accounts Receivable      27   5.20    Inventory   
  27   5.21    Warranty Obligations      28   5.22    Absence of Undisclosed
Liabilities      28   5.23    Absence of Certain Events      28   5.24    Full
Disclosure      29  

 

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Section 6 Representations and Warranties of Buyer   29   6.1 Organization, Good
Standing, Corporate Power and Qualification   29   6.2 Due Authorization,
Binding Effect   29   6.3 No Conflicts   30   6.4 Governmental Consents   30  
6.5 Litigation   30   6.6 No Finder’s Fees   30   6.7 Financing   30   Section 7
Covenants   31   7.1 Conveyance of Assets   31   7.2 Employee Matters   31   7.3
Access and Information   33   7.4 Preservation of Business   34   7.5
Commercially Reasonable Efforts   35   7.6 Publicity   35   7.7 Exclusivity   35
  7.8 Notice   36   7.9 Confidentiality   37   7.10 Bulk Sales Laws   38   7.11
Company Sale   38   Section 8 Conditions Precedent to the Closing by Buyer   39
  8.1 Representations and Warranties   39   8.2 Performance   39   8.3 No Action
  39   8.4 Material Adverse Effect   39   8.5 Certificates   39   8.6
Governmental Approvals   40   8.7 Consents Obtained   40   8.8 Bill of Sale;
Assumption Agreement; IP Assignment Agreement   40   8.9 Transition Services
Agreement   40   8.10 Commercial Agreement   40   8.11 Escrow Agreement   40  
8.12 Termination of Employment; Waiver of Rights   40   8.13 Approval of
Documentation   40   8.14 Transferred Employees   40   8.15 Contemporaneous
Delivery and Effectiveness   41   Section 9 Conditions Precedent to the Closing
by Seller   41   9.1 Representations and Warranties   41   9.2 Performance   41
  9.3 Consideration   41   9.4 Certificate   41   9.5 No Actions   41   9.6
Transition Services Agreement   42   9.7 Commercial Agreement   42   9.8 Escrow
Agreement   42   9.9 Approval of Documentation   42   9.10 Contemporaneous
Delivery and Effectiveness   42  

 

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Section 10 Post-Closing Indemnification   42   10.1 Survival of Representations
and Warranties and Related Indemnification Rights   42   10.2 Indemnification  
43   10.3 Arbitration   47   10.4 Set-Off   48   Section 11 Post-Closing
Covenants   48   11.1 Employee Non-Solicitation   48   11.2 Non-Competition   49
  11.3 Certain Acknowledgements   49   11.4 Outstanding Consents   50   11.5
Cooperation on Tax Matters   50   Section 12 Termination   50   12.1 Termination
  50   12.2 Effect of Termination   51   Section 13 General Provisions   52  
13.1 Notices   52   13.2 Expenses   53   13.3 Counterparts; Facsimile Signatures
  53   13.4 Governing Law   53   13.5 Integration and Construction   53   13.6
Waivers and Amendments   53   13.7 Injunctive Relief   53   13.8 Successors and
Assigns   54   13.9 Severability   54   13.10 Time of Essence   54   13.11 No
Third Party Beneficiaries   54  

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is entered into as of
February 11, 2015, by and between CIRCLE GRAPHICS, INC., a Delaware corporation
(“Buyer”), and CAFEPRESS INC., a Delaware corporation (“Seller”).

Recitals

WHEREAS, Seller is engaged in the business of transforming photographs and
images into canvas works of art and selling such products through its e-commerce
websites, including canvasondemand.com, greatbigcanvas.com and imagekind.com
(the “Business”);

WHEREAS, effective on the Closing Date (as defined below), (a) Seller desires to
sell, assign, transfer, convey and deliver to Buyer or the Designated Purchaser,
and Buyer or the Designated Purchaser desires to purchase and acquire from
Seller, all of its rights, title and interest in and to the Assets (as defined
herein) and (b) Buyer or the Designated Purchaser agrees to assume and become
responsible for the Assumed Liabilities (as defined herein), on the terms and
subject to the conditions hereinafter set forth (the “Transaction”); and

WHEREAS, prior to delivery of this Agreement, and as a condition and inducement
for Buyer’s willingness to enter into this Agreement, each of Gavin Jocius, Mike
Keyes, Nicki Velasco, Jason Sloan and Elijah Taylor shall have executed and
delivered to Buyer employment letters satisfactory in form and substance to
Buyer, in each case to become effective upon Closing.

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

SECTION 1 DEFINITIONS.

1.1 Definitions. In this Agreement, the following terms have the meanings
specified or referred to in this Section 1 and shall be equally applicable to
both the singular and plural forms. Any agreement referred to below shall mean
such agreement as amended, supplemented and modified from time to time to the
extent permitted by the applicable provisions thereof and by this Agreement.

(a) “Accrued PTO” shall mean accrued but unused vacation, accrued but unused
sick time and earned but unused time off.

(b) “Action” shall have the meaning ascribed to such term in Section 10.2(a).

(c) “Acquisition Proposal” shall have the meaning ascribed to such term in
Section 7.7.

(d) “Affiliate” shall mean, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other
Person as of the date on which, or at any time during the period for which, the
determination of affiliation is

 

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being made. For purposes of this definition, the term “control” (including the
correlative meanings of the terms “controlled by” and “under common control
with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.

(e) “Agreed Amount” shall have the meaning ascribed to such term in
Section 10.2(g).

(f) “Agreement” shall have the meaning set forth in the Preamble.

(g) “Assets” shall have the meaning ascribed to such term in Section 2.1.

(h) “Assumed Liabilities” shall have the meaning ascribed to such term in
Section 2.3.

(i) “Assumption Agreement” shall have the meaning ascribed to such term in
Section 4.2.

(j) “Bill of Sale” shall have the meaning ascribed to such term in Section 4.2.

(k) “Books and Records” shall have the meaning ascribed to such term in
Section 2.1(j).

(l) “Business” shall have the meaning set forth in the Recitals.

(m) “Business Day” shall mean any day other than a Saturday, a Sunday or a day
on which banks in New York City, United States of America are authorized or
obligated by Legal Requirement to close.

(n) “Buyer” shall have the meaning set forth in the Preamble.

(o) “Buyer Indemnified Parties” shall have the meaning ascribed to such term in
Section 10.2(a).

(p) “Claimed Amount” shall have the meaning ascribed to such term in
Section 10.2(e).

(q) “Claim Notice” shall have the meaning ascribed to such term in
Section 10.2(e).

(r) “Closing” shall have the meaning ascribed to such term in Section 4.1.

(s) “Closing Date” shall have the meaning ascribed to such term in Section 4.1.

(t) “Closing PTO Amount Schedule” shall have the meaning ascribed to such term
in Section 7.2(c).

(u) “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the regulations thereunder, and corresponding provisions
of state or local law.

 

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(v) “Code” shall mean the United States Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.

(w) “Commercial Agreement” shall have the meaning ascribed to such term in
Section 3.4.

(x) “Company Sale” shall mean an acquisition of all or substantially all of the
assets of the Seller, an acquisition of more than a majority of the Seller’s
voting equity, or a merger, consolidation or other business combination or
similar transaction involving the Seller, as a whole. For the sake of clarity,
in no event shall a “Company Sale” be deemed to include the sale of the Assets
or Business on a standalone basis.

(y) “Competitors” shall have the meaning ascribed to such term in the definition
of Material Adverse Effect.

(z) “Confidentiality Agreement” shall mean the Confidentiality Agreement between
Seller and Buyer dated August 4, 2014.

(aa) “Contract” shall mean any agreement, contract, subcontract, lease,
instrument, note, evidence of indebtedness, indenture, mortgage, security
agreement, warranty, insurance policy, benefit plan or other legally binding
commitment (whether written or oral) to which Seller or any of its subsidiaries
is a party.

(bb) “Copyrights” shall have the meaning ascribed to such term in the definition
of Intellectual Property.

(cc) “Damages” shall have the meaning ascribed to such term in Section 10.2(a).

(dd) “Designated Purchaser” shall have the meaning ascribed to such term in
Section 13.8.

(ee) “Dispute” shall have the meaning ascribed to such term in Section 10.2(h).

(ff) “Employee Agreement” shall mean each employment, severance, consulting,
relocation, repatriation, expatriation or other agreement or contract between
Seller, its parents or any Seller subsidiary and any Target Employee relating to
the material terms of such Target Employee’s employment.

(gg) “Employee Plan” shall mean any deferred compensation, pension, retirement,
health, profit sharing, incentive bonus, stock purchase, stock option or
stock-related awards, hospitalization, insurance, severance, workers’
compensation, supplemental unemployment benefits, vacation benefits, disability
benefits, change of control, retention, termination, fringe benefit, or any
other employee pension benefit (as defined in ERISA or otherwise) or employee
welfare benefit (as defined in ERISA or otherwise) obligation, or any other
employee benefit of any kind whatsoever whether under a plan or agreement, that
is sponsored, maintained, contributed to, or required to be contributed to by
Seller or any Seller subsidiary for the benefit of any Target Employee or any
beneficiary or dependents thereof.

 

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(hh) “Employees” shall mean all employees employed by Seller who primarily work
in the Business as of the date of this Agreement that are set forth on Schedule
1.1(hh).

(ii) “Employment Laws” shall have the meaning ascribed to such term in
Section 5.11(a).

(jj) “Encumbrance” shall mean any Liens, pledge, mortgage, deed of trust,
security interest, charge, claim, easement, encroachment or other similar
encumbrances.

(kk) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.

(ll) “Excluded Assets” shall have the meaning ascribed to such term in
Section 2.2.

(mm) “Excluded Liabilities” shall have the meaning ascribed to such term in
Section 2.4.

(nn) “Excluded Records” shall have the meaning ascribed to such term in
Section 2.2(d).

(oo) “Fraudulent Breach” shall have the meaning ascribed to such term in
Section 10.1.

(pp) “Fundamental Representations” shall have the meaning ascribed to such term
in Section 10.1.

(qq) “Governmental Authority” shall mean any and all foreign, federal, state or
local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including departments, boards, bureaus, commissions,
agencies, courts, arbitrals, administrations and panels, and any divisions or
instrumentalities thereof, whether permanent or ad hoc.

(rr) “Governmental Authorization” shall mean any (i) permit, license,
certificate, franchise, permission, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority or pursuant to any Legal Requirement,
and (ii) right under any Contract with any Governmental Authority.

(ss) “Indemnified Party” shall mean either Buyer Indemnified Parties or Seller
Indemnified Parties in their respective capacities as indemnitees hereunder, as
applicable.

(tt) “Indemnifying Party” shall mean either Buyer or Seller in its capacity as
an indemnitor hereunder, as applicable.

(uu) “Intellectual Property” shall mean all rights in or arising under
(a) patents, patent rights, invention disclosures and similar rights in
inventions (collectively, “Patents”); (b) copyrights and copyrightable works,
mask works, rights in Software, ‘moral rights’ and any other rights of authors
or in works of authorship, whether copyrightable or not (including databases and
other compilations of information) (collectively, “Copyrights”); (c) registered
and unregistered trademarks, service marks, trade dress, trade names, corporate
names, logos,

 

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slogans, URLs and internet domain names, and all goodwill associated therewith
and symbolized thereby (collectively, “Trademarks”); (d) trade secrets,
know-how, confidential or proprietary information, and any technical, business
and other information (collectively, “Trade Secrets”); (e) registrations,
applications, renewals, reissues, reexaminations, extensions, parents,
continuations, continuations-in-part, and domestic and foreign counterparts for
and to any of the foregoing; and (f) all other similar or equivalent proprietary
rights now known or hereafter recognized anywhere in the world.

(vv) “Intellectual Property Licenses” means all licenses, sublicenses and other
agreements by or through which other Persons grant Seller or Seller grants any
other Persons any exclusive or non-exclusive rights or interests in or to any
Intellectual Property that is used primarily in connection with the Business.

(ww) “Intellectual Property Registrations” means all Intellectual Property
Assets that are subject to any issuance, registration, application or other
filing by, to or with any Governmental Authority or authorized private registrar
in any jurisdiction, including registered Trademarks, domain names, and
Copyrights, issued and reissued Patents and pending applications for any of the
foregoing.

(xx) “IP Assignment Agreement” shall have the meaning ascribed to such term in
Section 4.2.

(yy) “knowledge” shall mean (i) with respect to Seller, the actual or
constructive knowledge of any fact or circumstance after reasonable inquiry of
any of the individuals set forth in Schedule 1.1(yy)(i), and (ii) with respect
to Buyer, the actual or constructive knowledge of any fact or circumstance after
reasonable inquiry of any of the individuals set forth in Schedule 1.1(yy)(ii).

(zz) “Legal Requirement” shall mean any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, order, code, edict, decree, consent decree, judgment,
rule, regulation, ruling, requirement or other pronouncement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by or under the
authority of any Governmental Authority, including any bulk transfer laws.

(aaa) “Liability” shall mean any indebtedness, liability, loss or cost (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.

(bbb) “Lien” shall mean any interest in property securing an obligation, whether
such interest is based on common law, statute or contract (and including any
security interest or lien arising from a mortgage, claim, encumbrance, pledge,
charge, easement, servitude, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes),
reservations, exceptions, covenants, conditions, options, restrictions, leases,
subleases, licenses, occupancy agreements, pledges, charges, assessments,
covenants, reservations, defects in title, encroachments and other burdens, and
other title exceptions and encumbrances affecting property of any nature,
whether accrued or unaccrued, tangible or intangible, or absolute or contingent,
excluding claims of Intellectual Property violations.

 

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(ccc) “Material Adverse Effect” shall mean any circumstance, change in or effect
on, the Assets or the Business that, individually or in the aggregate with any
other circumstances, changes in, or effects on the Assets or the Business
(A) has had or would be reasonably expected to have a material adverse effect on
the Assets or the Business or (B) has had or would be reasonably expected to
have a material adverse effect on the ability of Seller and its Affiliates to
perform their obligations under this Agreement or any other agreement
contemplated hereby; provided, however, that in determining whether a Material
Adverse Effect has occurred or would be reasonably expected to occur, there
shall be excluded any effect to the extent resulting from, or arising in
connection with, any of the following (either alone or in combination):

(i) changes in general economic or business conditions or the financial or
securities markets generally that do not impact Seller’s ability to operate the
Business in a disproportionate manner relative to Seller’s competitors whose
primary business involves transforming photographs and images into canvas works
of art (“Competitors”);

(ii) changes in the industries in which Seller operates, to the extent such
changes do not adversely affect Seller’s ability to operate the Business in a
disproportionate manner relative to Seller’s Competitors;

(iii) changes in generally accepted accounting principles;

(iv) changes in Legal Requirements, to the extent such changes do not adversely
affect Seller’s ability to operate the Business in a disproportionate manner
relative to Seller’s Competitors;

(v) acts of war (whether or not declared), the commencement, continuation or
escalation of a war, acts of armed hostility, sabotage or terrorism or other
international or national calamity or any material worsening of such conditions
threatened or existing as of the date of this Agreement, to the extent such
changes do not adversely affect Seller’s ability to operate the Business in a
disproportionate manner relative to Seller’s Competitors;

(vi) the announcement or pendency of the Transaction contemplated by this
Agreement; or

(vii) (1) the failure by Seller to take any action expressly prohibited by the
terms of this Agreement or (2) any actions taken by Seller as expressly required
by the terms of this Agreement or with the consent of Buyer.

(ddd) “Patents” shall have the meaning ascribed to such term in the definition
of Intellectual Property.

(eee) “Permits” means all permits, licenses, franchises, approvals,
authorizations and consents required to be obtained from or issued by any
Governmental Authority.

 

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(fff) “Permitted Encumbrances” shall mean (i) Encumbrances for Taxes,
assessments and other governmental charges not yet due and payable or, if due
(A) not delinquent and described in reasonable detail on the Seller Disclosure
Schedule; or (B) being contested in good faith by appropriate proceedings and
described in reasonable detail on the Seller Disclosure Schedule, and
(ii) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other
similar Liens or Encumbrances, including all statutory Liens and Encumbrances,
arising or incurred in the ordinary course of business.

(ggg) “Person” shall mean any natural person, any Governmental Authority and any
entity the separate existence of which is recognized by any Governmental
Authority including corporations, limited liability companies, partnerships,
limited liability partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.

(hhh) “Purchase Price” shall have the meaning ascribed to such term in
Section 3.1(a).

(iii) “Receivables” shall have the meaning ascribed to such term in
Section 2.1(a).

(jjj) “Related Agreements” shall mean the Bill of Sale, Assumption Agreement,
the IP Assignment Agreement, the Transition Services Agreement and the
Commercial Agreement.

(kkk) “Representatives” shall mean any director, officer, employee, accountant,
counsel, investment banker, financial advisor or other agent or representative
of such Person or any of its Affiliates.

(lll) “Restrictive Covenants” shall have the meaning ascribed to such term in
Section 11.3(a).

(mmm) “Seller” shall have the meaning set forth in the Preamble.

(nnn) “Seller Disclosure Schedule” shall mean the schedule (dated as of the date
of the Agreement) delivered to Buyer on behalf of Seller setting forth
exceptions to, and disclosure with respect to, representations and warranties of
Seller set forth herein.

(ooo) “Seller Indemnified Parties” shall have the meaning ascribed to such term
in Section 10.2(b).

(ppp) “Service Providers” shall have the meaning ascribed to such term in
Section 5.6(d).

(qqq) “Software” shall mean computer software, programs and databases in any
form, including source code, object code, operating systems and specifications,
data, databases, database management code, firmware, utilities, graphical user
interfaces and software engines, and all related documentation, developer notes,
comments and annotations.

(rrr) “Target Employees” shall have the meaning ascribed to such term in
Section 7.2(a).

 

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(sss) “Tax,” “Taxes” and “Tax Returns” shall have the meanings ascribed to such
terms in Section 5.12(a).

(ttt) “Termination Date” shall have the meaning ascribed to such term in
Section 12.1(b).

(uuu) “Trademarks” shall have the meaning ascribed to such term in the
definition of Intellectual Property.

(vvv) “Trade Secrets” shall have the meaning ascribed to such term in the
definition of Intellectual Property.

(www) “Transaction” shall have the meaning ascribed to such term in the
Recitals.

(xxx) “Transfer Offers” shall have the meaning ascribed to such term in
Section 7.2(a).

(yyy) “Transferred Employees” shall have the meaning ascribed to such term in
Section 7.2(a).

(zzz) “Transition Services Agreement” shall have the meaning ascribed to such
term in Section 3.3.

SECTION 2 PURCHASE OF ASSETS/ASSUMPTION OF LIABILITIES.

2.1 Purchased Assets. On the terms and subject to the conditions contained
herein, effective as of the Closing, the Seller shall sell, convey, transfer,
assign and deliver to Buyer, and Buyer shall purchase, acquire and accept from
the Seller, free and clear of all Encumbrances (other than Permitted
Encumbrances), all of the Seller’s right, title and interest in and to all of
the following assets, which the Seller owns or in which the Seller has any
right, title or interest, other than those assets specified as Excluded Assets
(collectively, the “Assets”) as the same shall exist as of the Closing:

(a) all drafts, accounts or notes receivable (including unbilled receivables),
deposits, and any other rights to payment and the full benefit of all security
for such rights to payment, including receivables arising from goods shipped or
sold or services rendered to the Seller’s customers, in each case arising
primarily in connection with the Business or the Assets (the “Receivables”);

(b) all inventory, finished goods, raw materials, work in progress, packaging,
supplies, parts and other inventories of the Business (“Inventory”);

(c) all Contracts set forth on Schedule 2.1(c)(i), the Leases set forth on
Schedule 2.1(c)(ii) and the Intellectual Property Licenses set forth on Schedule
2.1(c)(iii) (the “Assigned Contracts”);

(d) all Intellectual Property owned by Seller and primarily used in connection
with or necessary and sufficient for the operation of the Business, including,
without limitation, the Intellectual Property Registrations set forth on
Schedule 2.1(d) (the “Intellectual Property Assets”);

 

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(e) all tangible personal property of the Business, including, without
limitation, all machinery, furniture, fixtures, equipment, tooling, computer
hardware, supplies and other tangible personal property of the Business located
in Raleigh, North Carolina (“Tangible Assets”); provided, however, that the
Tangible Assets shall not include the assets set forth on Schedule 2.1(e)(ii);

(f) all of the Seller’s right, title and interest in and to all Governmental
Authorizations and Permits listed on Schedule 2.1(f), but only to the extent
such Governmental Authorizations and Permits may be transferred under applicable
Legal Requirements;

(g) all prepaid expenses, credits, advance payments, security deposits, charges,
sums and fees to the extent related to the Assets;

(h) all of Seller’s rights under warranties, indemnities and all similar rights
against third parties to the extent related to the Assets;

(i) all rights of offset and credits, rights to any action, suit or claim of any
nature, all causes of action, claims, demands, all attorney-client privileges
and rights related thereto, to the extent primarily related to any Assets or to
the Business;

(j) all books, records, files, and data, including, without limitation, books of
account, ledgers and general, financial and accounting records, machinery and
equipment maintenance files, customer lists, customer purchasing histories,
price lists, distribution lists, supplier lists, production data, quality
control records and procedures, customer complaints and inquiry files, research
and development files, records and data (including all correspondence with any
Governmental Authority), sales material and records, strategic plans, internal
financial statements and marketing and promotional surveys, material and
research, that primarily relate to or are necessary for the operation of the
Business or the Assets (the “Books and Records”), other than books and records
set forth on Schedule 2.1(j) and the Excluded Records; and

(k) all goodwill associated with any of the assets described in the foregoing
clauses (a) to (j).

2.2 Excluded Assets. Notwithstanding anything to the contrary herein and except
as expressly set forth in Section 2.1 above, the Assets do not include, Seller
is not selling and Buyer is not purchasing, any other assets of Seller, and all
such other assets and properties shall be excluded from the Assets (the
“Excluded Assets”). Without limiting the foregoing, Excluded Assets include the
following assets and properties of the Seller:

(a) all cash and cash equivalents, bank accounts and securities of Seller;

(b) all Contracts that are not Assigned Contracts;

(c) all Intellectual Property other than the Intellectual Property Assets;

 

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(d) the corporate seals, organizational documents, minute books, stock books,
Tax Returns, books of account or other records having to do with the corporate
organization of Seller, all employee-related or employee benefit-related files
or records, other than personnel files of Transferred Employees, a copy of which
may be kept by Seller, and any other books and records that Seller is prohibited
from disclosing or transferring to Buyer under applicable Legal Requirements and
is required by applicable Legal Requirements to retain (collectively, “Excluded
Records”);

(e) all insurance policies of Seller and all rights to applicable claims and
proceeds thereunder;

(f) all benefit plans and trusts of Seller or other assets attributable thereto;

(g) all Tax assets (including duty and Tax refunds and prepayments) of Seller;

(h) all rights to any action, suit or claim of any nature available to or being
pursued by Seller, whether arising by way of counterclaim or otherwise, that are
not related to the Assets or Business;

(i) all assets, properties and rights (other than the Assets) used by Seller in
its businesses other than the Business; and

(j) the assets set forth on Schedule 2.1(e)(ii).

2.3 Assumed Liabilities and Obligations. On the terms and subject to the
conditions and exceptions contained herein, as of the Closing, Buyer shall
assume and become responsible for only those obligations specified on Schedule
2.3 (the “Assumed Liabilities”), and Buyer does not assume and will not be
responsible or liable for any other Liabilities or obligations of Seller
(including, without limitation, the Excluded Liabilities and any Liabilities or
obligations associated with Excluded Assets). Assumed Liabilities shall include
Liability for the payout of Accrued PTO (excluding any interest, waiting time
payments and the like) set forth on the Closing PTO Amount Schedule and that is
credited to Buyer or any of its Affiliates for the benefit of Transferred
Employees. Seller shall not amend, adjust or compromise any Assumed Liabilities
from the date hereof without the prior knowledge and written consent of Buyer.

2.4 Excluded Liabilities and Obligations. Notwithstanding anything to the
contrary contained in this Agreement, Buyer will not assume or be liable for,
and Seller will retain and remain responsible for, all of Seller’s debts,
Liabilities and obligations of any nature whatsoever (other than the Assumed
Liabilities set forth in Section 2.3), whether accrued or unaccrued, whether
absolute or contingent, whether known or unknown, whether due or to become due,
and regardless of when asserted (collectively, the “Excluded Liabilities”). The
Excluded Liabilities include the following:

(a) Liabilities Under This Agreement. All of Seller’s Liabilities and
obligations under this Agreement or under any other agreement between Seller on
the one hand and Buyer or the Designated Purchaser on the other hand;

 

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(b) Taxes. Except as provided in Section 3.2, any Liability for or in respect of
all Taxes and assessments, including all excise Taxes, sales and use Taxes,
payroll withholding Taxes, FICA Taxes, unemployment Taxes, income Taxes,
business Taxes and real and personal property Taxes that are required to be paid
or remitted by Seller, and of any Taxes arising out of or relating to the
Business or the ownership or use of the Assets prior to the Closing;

(c) Employee Liabilities. Except as specifically set forth in Section 7.2 of
this Agreement, any and all Liabilities under or relating to any Employee Plan,
Employee Agreement or otherwise relating to any current or former employee,
director, or consultant of Seller and his or her service or employment with
Seller prior to the Closing;

(d) Breach of Contract/Violation of Law. All of Seller’s Liabilities or
obligations arising out of or in connection with (i) the breach by Seller of any
Contract, including any Liabilities or obligations resulting from, arising out
of, relating to, in the nature of or caused by any breach of contract, breach of
warranty, tort, infringement, violation of Legal Requirement or environmental
matters concerning or in connection with the Business or the Assets (including
those arising under any and all applicable securities, environmental, health and
safety laws) occurring before the Closing, or any damages to third parties
resulting from acts, events or omissions occurring before the Closing; and
(ii) any liability of Seller to third parties (other than the Assumed
Liabilities) resulting from, arising out of, relating to, in the nature of or
caused by the execution of this Agreement or the consummation of the
transactions contemplated hereby to the extent not caused by or resulting from
the actions or omissions of Buyer or any of its Affiliates; provided, however,
that this Section 2.4(d) shall not be deemed to limit or affect in any way the
obligations of Buyer under Section 10.2(b);

(e) Fees. All of Seller’s Liabilities or obligations for expenses or fees
incurred by Seller incident to or arising out of the negotiation, preparation,
approval or authorization of this Agreement, or the consummation (or preparation
for the consummation) of the transactions contemplated hereby, including all of
the Seller’s attorneys’ and accountants’ fees, brokerage fees, consultants’ fees
and finders’ fees;

(f) Unclaimed Coupons. All of Seller’s Liabilities or obligations arising from
or in connection with the value of any discounted gift certificates, Groupons,
coupons, discounts, or other offers that have expired prior to the Closing
(collectively, “Unclaimed Coupons”) to the extent the value of such Unclaimed
Coupons is reflected as income on the Financial Statements, including, without
limitation, any Liabilities or obligations with respect to claims by (a) the
holders of Unclaimed Coupons and (b) any Governmental Authority with respect to
any Legal Requirements applicable to the Unclaimed Coupons, including Legal
Requirements dealing with unclaimed property or escheatment; and

(g) Third Party Claims. All of Seller’s Liabilities or obligations arising out
of or in connection with the claims set forth on Schedule 5.6(c)(ii) of the
Seller Disclosure Schedule.

2.5 Non-Assignable Assets. Notwithstanding anything to the contrary in this
Agreement, no Contracts, properties, rights or other assets of the Seller shall
be deemed sold, transferred or assigned to Buyer pursuant to this Agreement if
the attempted sale, transfer or assignment thereof to Buyer without the consent
or approval of any other Person would be

 

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ineffective or would constitute a breach of contract or a material violation of
any Legal Requirement or would in any other way materially and adversely affect
the rights of the Seller (or Buyer as transferee or assignee), and such consent
or approval is not obtained at or prior to the Closing. In such case, for a
period of 150 days following Closing (the “Transition Period”), to the extent
possible, (a) the beneficial interest in or to such Contracts, properties,
rights or assets (collectively, the “Beneficial Rights”) shall in any event pass
at the Closing to Buyer under this Agreement; and (b) pending such consent or
approval, Buyer shall discharge the obligations of the Seller under such
Beneficial Rights (to the extent such obligations are Assumed Liabilities) as
agent for the Seller, and the Seller shall act as Buyer’s agent in the receipt
of any benefits, rights or interest received from the Beneficial Rights. During
the Transition Period Seller shall use commercially reasonable efforts to
secure, as promptly as practicable and at its own expense, any consents,
approvals, waivers and authorizations required in connection with the
transactions contemplated by this Agreement, including, without limitation, all
Required Consents and Other Consents, to the extent such consents, approvals,
waivers and authorizations were not obtained and delivered to Buyer at or prior
to the Closing. During the Transition Period, Seller shall cooperate with Buyer
in any other reasonable arrangement designed to provide for Buyer the benefits
of such Contracts, properties, rights and assets, including enforcement at the
cost and for the account of Buyer of any and all rights of the Seller against
the other party thereto arising out of the breach or cancellation thereof by
such other party or otherwise, and to provide for the discharge of any liability
under such Contracts, properties, rights or assets, to the extent such liability
constitutes an Assumed Liability. If and to the extent that by the end of the
Transition Period an arrangement acceptable to Buyer with respect to Beneficial
Rights cannot be made, or the requisite consents, approvals, waivers or
authorizations are not obtained, then Buyer shall have no obligation with
respect to any such Contract, property, right or other asset, and such Contract,
property, right or other asset shall not be deemed to be an Asset and any
related liability shall not be deemed an Assumed Liability, and, notwithstanding
any contrary provision of this Agreement or any Related Agreement, Seller shall
have no further obligation to use commercially reasonable efforts to secure such
consents, approvals, waivers or authorizations after the end of the Transition
Period. Notwithstanding anything to the contrary in this Section 2.5, the Seller
shall be solely responsible for using commercially reasonable efforts to obtain,
and shall use commercially reasonable efforts to obtain, all necessary consents
to assignment on or prior to the Closing Date, and Buyer shall have no
obligation to expend any money, incur any liability, commence any legal
proceeding or offer or grant any accommodation (financial or otherwise) to any
person or entity in connection with the process of obtaining the consents and
approvals described in this Section 2.5.

SECTION 3 TRANSACTION CONSIDERATION.

3.1 Transaction Consideration.

(a) Purchase Price. In consideration for Buyer’s purchase of the Assets and
assumption of the Assumed Liabilities, Buyer shall pay to Seller an aggregate
amount (the “Purchase Price”) equal to (i) $31,500,000 plus (ii) the Excess
Amount, if any, minus (iii) the Deficiency Amount, if any. The Purchase Price
shall be payable at the Closing as follows:

(i) Buyer shall deliver by wire transfer of immediately available funds to The
Bank of New York Mellon Corporation (the “Escrow Agent”) the sum of
$3,780,000.00

 

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(the “Escrow Amount”) to be held in escrow and payable by the Escrow Agent
pursuant to the terms of an escrow agreement in substantially the form attached
hereto as Exhibit F (the “Escrow Agreement”).

(ii) Buyer shall deliver by wire transfer of immediately available funds to an
account designated in writing by the Seller the balance of the Purchase Price
(i.e., the Purchase Price less all amounts delivered by Buyer pursuant to
Section 3.1(a)(i)).

The Purchase Price shall be subject to adjustment at and following the Closing
pursuant to Section 3.1(b) below. All adjustments to the Purchase Price made
after the Closing Date shall be payable as set forth in Section 3.1(b).

(b) Purchase Price Adjustment. The Purchase Price shall be subject to adjustment
at and following the Closing as follows:

(i) On the date two (2) business days prior to the Closing Date, the Seller
shall deliver to Buyer a statement of Working Capital of the Business (the
“Closing Working Capital Statement”) setting forth the Working Capital of the
Business estimated as of the Closing (such Working Capital, the “Closing Working
Capital Number”). The Closing Working Capital Statement shall be prepared in
accordance with the definitions set forth in Section 3.1(b)(vi)-(viii) and in
conformity with accounting principles generally accepted in the United States
(“GAAP”) applied in a manner consistent with the Financial Statements. If the
Closing Working Capital Number is greater than (i.e. less negative than)
$(2,500,000.00) (the “Target Working Capital Number”), the Purchase Price shall
be increased at the Closing by an amount equal to the Closing Working Capital
Number minus the Target Working Capital Number (the “Excess Amount”); provided,
however that if the difference between the Closing Working Capital Number and
the Target Working Capital Number is less than $200,000.00, then there shall be
no adjustment to the Purchase Price at Closing. If the Closing Working Capital
Number is less than (i.e. more negative than) the Target Working Capital Number,
the Purchase Price shall be decreased at the Closing by an amount equal to the
Target Working Capital Number minus the Closing Working Capital Number (the
“Deficiency Amount”); provided, however that if the difference between the
Closing Working Capital Number and the Target Working Capital Number is less
than $200,000.00, then there shall be no adjustment to the Purchase Price at
Closing.

(ii) Buyer may, at its option and at its own expense, (A) examine the Closing
Working Capital Statement and determine the Working Capital of the Business as
of the Closing (Buyer’s Working Capital determination, the “Buyer Working
Capital Number”) and (B) prepare a statement of Working Capital of the Business
(the “Buyer Closing Statement”) setting forth the Working Capital of the
Business as of the Closing, which shall be prepared in accordance with the
definitions set forth in Section 3.1(b)(vi)-(viii) and in conformity with GAAP
applied in a manner consistent with the Financial Statements. Buyer must deliver
to the Seller the Buyer Closing Statement, together with the calculation of the
Buyer Working Capital Number, not later than 90 days after the Closing Date. If
the Buyer does not deliver the Buyer Closing Statement within such 90-day
period, the Closing Working Capital Number shall be deemed the Final Working
Capital Number.

 

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(iii) For a period of 30 days after the delivery of the Buyer Closing Statement,
Buyer shall make available to the Seller (and its Representatives) any and all
books and records related to the Business that are reasonably requested by the
Seller (or such Representatives), and provide the Seller (and its
Representatives) with access (during normal business hours and on two days prior
notice) to Buyer’s facilities and personnel involved in the preparation of the
Buyer Closing Statement in order for the Seller to review the Buyer Closing
Statement. If the Seller disagrees with the Buyer Closing Statement, the Seller
shall notify Buyer in writing (the “Dispute Notice”) of the amount, nature and
basis of such dispute within 30 days after the Seller’s receipt of the Buyer
Closing Statement. In the event no Dispute Notice is given within such 30 day
period, the Buyer Working Capital Number shall be deemed the Final Working
Capital Number. In the event a Dispute Notice is given, the parties shall first
use their best efforts to resolve such dispute among themselves. If the parties
are able to resolve the dispute within 15 days after delivery of the Dispute
Notice, Buyer and the Seller shall mutually agree upon the number that shall be
deemed the Final Working Capital Number. If the parties are unable to resolve
the dispute within 15 days after delivery of the Dispute Notice, the parties
shall submit the matter for final resolution to Grant Thornton LLP or such other
independent, nationally-recognized certified public accounting firm mutually
agreed upon by Buyer and the Seller (the “Dispute Auditor”); provided, however
that such Dispute Auditor shall not have performed any services for Buyer or the
Seller in the immediately preceding two year period; and provided further that
if the parties are unable to agree upon a Dispute Auditor, each party shall
select an independent, nationally-recognized certified public accounting firm
and such selected accountants shall mutually select the Dispute Auditor. The
Dispute Auditor shall resolve the dispute by calculating the Working Capital of
the Business as of the Closing in accordance with the definitions set forth in
Section 3.1(b)(vi)-(viii) and in conformity with GAAP applied in a manner
consistent with the Financial Statements. The Dispute Auditor shall determine
the Final Working Capital Number within 30 days after the submission of the
dispute, and the Dispute Auditor’s calculation shall be deemed the Final Working
Capital Number and such determination shall be conclusive and binding on the
parties. The costs of the Dispute Auditor shall be shared equally by Buyer and
the Seller.

(iv) The Working Capital of the Business as of the Closing, as finally
determined pursuant to the provisions of Section 3.1(b)(ii) or
Section 3.1(b)(iii), as applicable, shall be referred to herein as the “Final
Working Capital Number”.

(v) Upon determination of the Final Working Capital Number pursuant to this
Section 3.1(b):

 

  (1)

if the Final Working Capital Number is less than the Closing Working Capital
Number, the Seller shall, within five business days thereafter, remit to the
Buyer an amount equal to (A) the Closing Working Capital Number minus (B) the
Final Working Capital Number or instruct the Escrow Agent to remit to Buyer

 

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  such amount from the Escrow Amount; provided, however that if the difference
between the Final Working Capital Number and the Target Working Capital Number
is less than $200,000.00, then there shall be no adjustment to the Purchase
Price pursuant to this Section 3.1(b)(v); or

 

  (2) if the Final Working Capital Number is greater than the Closing Working
Capital Number, Buyer shall, within five business days thereafter, remit to the
Seller an amount equal to (A) the Final Working Capital Number minus (B) the
Closing Working Capital Number; provided, however that if the difference between
the Final Working Capital Number and the Target Working Capital Number is less
than $200,000.00, then there shall be no adjustment to the Purchase Price
pursuant to this Section 3.1(b)(v).

(vi) “Working Capital” shall mean (i) the aggregate amount of the Working
Capital Assets (as defined below) of the Business minus (ii) the aggregate
amount of the Working Capital Liabilities (as defined below) of the Business,
each determined as of the Closing in accordance with GAAP as applied in a manner
consistent with the Financial Statements.

(vii) “Working Capital Assets” means the sum of all trade accounts receivable,
other accounts receivable (excluding Tax related receivables), inventory,
deferred current assets, prepaid fees, prepaid maintenance, prepaid insurance,
prepaid office supplies, prepaid warehouse supplies, prepaid personal property
Taxes and other current assets, in each case if and to the extent included in
the Assets.

(viii) “Working Capital Liabilities” means the sum of all trade accounts
payable, credit card payables, shopkeeper payables, accrued expenses, deferred
revenue, third party freight accruals and other liabilities, in each case if and
to the extent included in the Assumed Liabilities.

3.2 Taxes and Tax Reporting. Seller and Buyer shall each be responsible for, and
shall pay, 50% of all applicable sales Taxes, use Taxes, value-added Taxes and
other transfer Taxes (including recording Taxes, stamp Taxes and any similar
Taxes arising upon the transfer of tangible, intangible or real property or
interests therein) that become due and payable as a result of the sale, transfer
and delivery of the Assets. Seller and Buyer each agrees to use its commercially
reasonable efforts to take actions reasonably requested by the other party to
minimize any sales, use and other transfer taxes and fees incurred in connection
with the assignment, conveyance, transfer and/or delivery of the Assets
hereunder, including the acceptance of transfer via means of electronic
transmission of all Assets capable of being so transmitted. Each of Buyer and
Seller further agrees to use commercially reasonable efforts to deliver all
certificates reasonably requested by the other party to verify the fact of such
electronic transmissions or other actions. The parties hereto agree that for all
federal and state tax purposes the consideration received by Seller for the
Assets hereof shall be allocated in accordance with Section 1060 of the Code as
set forth in Schedule 3.2; that all financial reports, and income and other tax
returns and information reports, will be prepared and filed in a manner
consistent with

 

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such allocation; and that no party hereto will take any position inconsistent
with such allocation in any subsequent returns or proceedings, except as may be
required by law. Buyer and Seller each agree to file IRS Form 8594, and any
corresponding state tax forms, on a timely basis and in accordance with the
methodology set forth on Schedule 3.2 prior to Closing.

3.3 Transition Services Agreement. On the Closing Date, Buyer and Seller shall
enter into a Transition Services Agreement in the form attached hereto as
Exhibit A (the “Transition Services Agreement”) pursuant to which Seller will
provide certain transition services.

3.4 Commercial Agreement. On the Closing Date, Buyer and Seller shall enter into
an Art Fulfillment Agreement in the form attached hereto as Exhibit B (the
“Commercial Agreement”).

SECTION 4 CLOSING.

4.1 Closing. The closing (the “Closing”) shall take place by facsimile, e-mail
and/or overnight courier exchange of documents at the offices of Foley & Lardner
LLP, 111 Huntington Avenue, Boston, Massachusetts 02199 at 10:00 a.m., Eastern
Time on the second Business Day following the date on which the conditions set
forth in Section 8 and Section 9 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the fulfillment or
waiver of those conditions) are satisfied or waived in accordance with this
Agreement, or such other date, place or time as may be agreed upon between the
parties; provided, further, that nothing in this Section 4.1 shall effect
Buyer’s obligations pursuant to Section 7.1. The day on which the Closing
actually occurs is referred to herein as the “Closing Date”. The Closing shall
be deemed to take place at 12:01 a.m. Eastern Time on the Closing Date.

4.2 Transfer of Possession. Except as expressly set forth in this Section 4.2,
on the Closing Date, Seller shall place Buyer or the Designated Purchaser, as
applicable, in full possession of the Assets and shall execute such assignments,
assumptions and other instruments of transfer, in form and substance reasonably
satisfactory to Buyer, with such other appropriate instruments of title and
consents of third parties as Buyer shall reasonably request in order to
effectively transfer the Assets to Buyer or the Designated Purchaser, including
(i) one or more Assignment and Assumption Agreements in substantially the form
of Exhibit C attached hereto (the “Assumption Agreement”), (ii) one or more
Bills of Sale in substantially the form of Exhibit D attached hereto (the “Bill
of Sale”), and (iii) one or more IP Assignment Agreements in substantially the
form of Exhibit E attached hereto (the “IP Assignment Agreement”). The Assets
shall be delivered via electronic transmission to the extent practicable. On the
Closing Date, Seller shall make all other Assets available for Buyer or the
Designated Purchaser, as applicable, to take physical possession at the Closing.
If and to the extent that, from and after the Closing, Seller or Buyer discovers
any Assets that should have been conveyed and delivered to Buyer or the
Designated Purchaser, as applicable, at the Closing pursuant hereto but were not
so conveyed and delivered at the Closing, Seller shall convey and deliver such
Assets to Buyer or the Designated Purchaser, as applicable, as soon as
reasonably practicable after the discovery thereof, in each case without
additional consideration paid therefor.

 

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SECTION 5 REPRESENTATIONS AND WARRANTIES OF SELLER.

Except as set forth in the Seller Disclosure Schedule with respect to
specifically identified subsections of this Section 5, as an inducement to Buyer
to enter into this Agreement and to consummate the transactions contemplated
hereby, Seller represents and warrants to Buyer as follows:

5.1 Organization, Good Standing, Corporate Power and Qualification. Seller has
been duly organized and is validly existing and in good standing under the laws
of the State of Delaware and has the requisite power and authority to enter into
and perform this Agreement and the Related Agreements to which Seller is or is
to be a party, to consummate the transactions contemplated hereby and thereby,
to own and operate its properties and assets and to carry on its business as
currently conducted. Seller is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in which it is required
to be qualified to do intrastate business as Seller’s business is currently
conducted by Seller, except for jurisdictions in which failure to so qualify or
be in good standing has not had or would not reasonably be expected to have a
Material Adverse Effect.

5.2 Due Authorization, Binding Effect. All action on the part of Seller and its
directors, officers, and stockholders necessary for the authorization,
execution, delivery of, and the performance of all obligations of Seller under
this Agreement and the Related Agreements to which Seller is or is to be a party
has been taken. This Agreement, along with the Related Agreements, when executed
and delivered by Buyer, will constitute valid and legally binding obligations of
Seller, enforceable in accordance with their respective terms, except as may be
limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally or (ii) the effect of rules of law governing the
availability and enforceability of equitable remedies.

5.3 No Conflicts. The execution, delivery and performance of this Agreement, the
Related Agreements to which Seller is or is to be a party and the consummation
of the transactions contemplated hereby or thereby do not and will not, with or
without the giving of notice or the passage of time or both, (i) conflict with
or result in any violation or default under Seller’s certificate of
incorporation or bylaws, as amended to-date, (ii) violate any Legal Requirement
to which Seller is subject; (iii) conflict with or result in a violation or
breach of, constitute a default under, or give any party the right to terminate,
accelerate or modify, or require the consent of any Person under, any Contract
to which Seller is a party or (iv) result in the creation of any Encumbrance on
any Asset, except in the case of (ii), any violation which would not reasonably
be expected to have a Material Adverse Effect and except in the case of (iii),
as to Contracts not included in Assigned Contracts, any violation or breach that
would not prevent Seller from performing its obligations under this Agreement or
any Related Agreement to which Seller is a party or consummating the
transactions contemplated hereby or thereby.

5.4 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, notice, declaration or filing with,
any Governmental Authority is required on the part of Seller in order to enable
Seller to execute, deliver and perform its obligations under this Agreement or
the Related Agreements to which Seller is or is to be a party, or to consummate
any of the transactions contemplated by the Agreement or the Related Agreements
to which it is or is to be a party.

 

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5.5 Litigation. There is, and in the past three (3) years there has been, no
action, suit, proceeding, claim, arbitration or investigation pending (or, to
Seller’s knowledge, currently threatened) against Seller with respect to the
Business or the Assets before any Governmental Authority or arbitrator. Seller
is not a party or subject to the provisions of any Legal Requirement that would
prevent or materially interfere with or delay the consummation of the
transactions contemplated by the Agreement or the Related Agreements. There is
no action, suit, proceeding, claim, arbitration or investigation by Seller or
any of its Affiliates related to the Business or the Assets that is pending or
which Seller or any of its Affiliates intends to initiate. None of the Assets or
the Business is subject to any order, writ, judgment, award, injunction or
decree of any Governmental Authority or any arbitrator or arbitrators.

5.6 Intellectual Property.

(a) Status. Section 5.6(a) of the Seller Disclosure Schedule sets forth (i) each
Intellectual Property Asset, (ii) any actions that must be taken by the Seller
or any of its Affiliates within ninety (90) days of the Closing Date with
respect to any Intellectual Property Asset, including the payment of any
registration, maintenance or renewal fees or the filing of any documents,
applications or certificates, (iii) any proceedings or actions before any
Governmental Authority (including the United States Patent and Trademark Office
or equivalent authority anywhere in the world) to which the Seller or any of its
Affiliates is or was a party and in which claims are or were raised relating to
the validity, enforceability, scope, ownership or infringement of any
Intellectual Property Asset, and (iv) all “free” or “open source” software
(including, but not limited to, software licensed under the GNU General Public
License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License
(MPL), or Common Development and Distribution License (CDDL), or similar
distribution models) that is used or distributed by the Seller (alone or
incorporated, integrated, or bundled with or into any Seller products generally
available or in development). Neither the Seller nor the Seller’s products nor
any software or technology developed by or for the Seller is subject to any
obligation or condition that would require that any of the Seller’s products or
any other software or other technology developed by or for the Seller (A) be
disclosed, distributed, or made available in source code form; (B) be licensed
with the permission to create derivative works; or (C) be redistributable at no
charge. None of the Intellectual Property Assets are the subject of (i) any
outstanding judgment, order, decree, agreement or ruling, or, to the Seller’s
knowledge, any pending or threatened governmental or judicial proceeding that
(A) challenges the legality, validity, enforceability, use or ownership of any
of the Intellectual Property Assets or restricts the use or licensing thereof or
(B) would adversely affect or limit Buyer’s use thereof or rights thereto or
(ii) any agreement restricting the use or licensing thereof. No third party has
any ownership right, title, interest, claim in or Encumbrance on any of the
Intellectual Property Assets, and Seller has taken those steps reasonably
necessary to preserve Seller’s legal rights in, and the secrecy and value of,
all of the Intellectual Property Assets, except for which disclosure pursuant to
Seller’s standard form non-disclosure agreement is reasonably necessary for
legitimate business or legal reasons. The Intellectual Property Assets include
all of the Seller’s Intellectual Property primarily used in connection with or
necessary and sufficient for the operation of the Business. Each trademark
included in the Intellectual Property Assets, each domain name included in the
Intellectual Property Assets, and the image management software included in the
Intellectual Property Assets do not violate, misappropriate, infringe upon,
interfere with, or otherwise violate any Intellectual Property rights of any
Person.

 

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(b) Licenses; Other Agreements. Section 5.6(b) of the Seller Disclosure Schedule
sets forth (i) any option, license or agreements under which Seller has granted
a license to any Person under any the Intellectual Property Assets, other than
customary end user license agreements entered into in the ordinary course of
business, (ii) any covenant not to compete or Contract limiting Seller’s ability
to exploit fully the Intellectual Property Assets and to transact the Business
in any market or geographical area or with any Person, and (iii) each item or
component of Intellectual Property that is licensed to Seller by any Person
which is used in connection with the Business as currently conducted, except for
“shrink-wrap” or “click-wrap” license agreements relating to off-the-shelf
computer software licensed in the ordinary course of business. Seller has the
right to assign to Buyer any and all right, title and interest Seller has under
the license agreements listed on Section 5.6(b) without obtaining the prior
consent of the licensors of such Intellectual Property.

(c) No Infringement. To the knowledge of Seller, no product or service marketed
or sold by the Seller, nor the operation of the Business as presently conducted,
violates, misappropriates, infringes upon, interferes with, or otherwise
violates any Intellectual Property rights of any Person. Seller has not received
any (i) written communications nor, to Seller’s knowledge, oral communications,
alleging, that Seller’s operation of the Business has violated, misappropriated,
infringed upon, or interfered with or would violate, misappropriate, infringe
upon, or interfere with any Intellectual Property of any Person or (ii) cease
and desist letters or invitations to enter into a license under the Intellectual
Property of any Person, in each case, in connection with Seller’s operation of
the Business. To the Seller’s knowledge, no Person is violating,
misappropriating, infringing upon, or interfering with, or has violated,
misappropriated, infringed upon, or interfered with the Intellectual Property
rights of the Seller.

(d) No Breach by Employee. To Seller’s knowledge, no Transferred Employee or
consultant to Seller or its subsidiaries who works primarily with the Business
or the Assets (collectively, with Transferred Employees, “Service Providers”) is
obligated under any agreement (including licenses, covenants, or commitments of
any nature) or subject to any judgment, decree or order of any Governmental
Authority, or any other restriction that would interfere with the use of his or
her reasonable best efforts to carry out his or her duties for Seller or to
promote the interests of Seller or that would prevent such employees or
consultants from assigning to Seller inventions and all other Intellectual
Property created, developed, conceived or reduced to practice in connection with
services rendered to Seller. To Seller’s knowledge, it will not be necessary to
use any inventions of any Transferred Employees made prior to the Closing that
are not currently being used in the Business. Each Transferred Employee has
assigned to the Seller all intellectual property rights he or she owns that are
related to the Business as now conducted and has executed an assignment
agreement substantially in the form made available to Buyer.

5.7 Compliance with Contracts and Legal Requirements. Seller’s use of the Assets
and operation of the Business are not in violation or default in any material
respect of any Contract to which Seller or any of its Affiliates is a party or
by which Seller or any of its Affiliates is bound, and Seller’s use of the
Assets and operation of the Business are in compliance in all material respects
with all applicable Legal Requirements. Notwithstanding the foregoing, the
representations and warranties in this Section 5.7 shall not be deemed to cover,
refer or relate to matters with respect to (a) Intellectual Property, which are
addressed solely in

 

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Section 5.6, (b) employee matters, which are addressed solely in Section 5.11,
(c) Taxes, which are addressed solely in Section 5.12 or (d) environmental
matters, which are addressed solely in Section 5.18. Seller and its Affiliates
have not received any written notice of any breach or violation of any such
Contract or Legal Requirement. No fines, penalties or claims have been assessed,
filed or commenced, or, to the Seller’s knowledge, threatened, against it
alleging failure to so comply.

5.8 Assets Generally.

(a) Seller has good and valid title to, or in the case of leased or licensed
Assets, valid leasehold interests in or license to, as applicable, all Assets,
free and clear of all Encumbrances (other than Permitted Encumbrances). At the
Closing, Seller will deliver to Buyer good and valid title to all of the Assets,
free and clear of any Encumbrance (other than Permitted Encumbrances).

(b) The Assets to be transferred hereunder (together with services to be
provided pursuant to the Transition Services Agreement) constitute all the
assets, properties and rights of Seller (i) necessary to operate the Business as
currently being operated or (ii) primarily or exclusively used or held for use
in the Business as currently operated.

(c) Each Tangible Asset is in good working order and condition (ordinary wear
and tear excepted), free from any defects (except for such minor defects as do
not interfere with the use thereof in the conduct of the normal operations of
the Business), has been, to the Seller’s knowledge, properly maintained and does
not require more than regularly scheduled maintenance in the ordinary course of
business, consistent with Seller’s established maintenance policies, to keep in
good operating condition.

5.9 Contracts. Section 5.9 of the Seller Disclosure Schedule contains an
accurate and complete list of all Contracts to which Seller is a party or by
which it is bound that are primarily used in or are necessary to the operation
of the Business or the Assets, including, without limitation, but in each case,
only those Contracts that are primarily used in or necessary to the operation of
the Business of the Assets, (i) all Contracts relating to borrowed money or
pledging or placing a Lien on an Asset; (ii) all personal property leases and
lease purchase agreements; (iii) all management agreements, severance
agreements, executive compensation plans, bonus agreements or plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option,
employee stock purchase plans or other agreements for the employment of any
officer, individual employee or other Person or entity on a full time, part time
or consulting basis; (iv) all Contracts under which the Seller has advanced or
loaned any other Person or entity any amounts; (v) all Contracts under which the
Seller is lessee; (vi) all agency, distributor, sales representative, franchise
or similar agreements to which the Seller is a party; (vii) all warranty
agreements with respect to the Seller’s services rendered or its products sold,
leased or licensed; (viii) all Contracts that provide any customer with pricing,
discounts or benefits that change based on the pricing, discounts or benefits
offered to other customers of the Business, including, without limitation,
contracts containing “most favored nation” provisions; (ix) all Contracts that
contain performance guarantees; (x) all Contracts documenting the settlement of
any action or threatened action; (xi) all Contracts appointing any agent to act
on the Seller’s behalf and all powers of attorney; and (xii) all Contracts that
restrict the Seller from freely engaging the operation of the Business of the
Assets anywhere in the world. Each

 

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Assigned Contract is a valid and binding agreement of the Seller and, to
Seller’s knowledge, the other parties thereto, and shall continue to be so
enforceable and in full force and effect on identical terms immediately
following the Closing. The Seller has fulfilled all obligations required
pursuant to the Assigned Contracts to have been performed by the Seller prior to
the date hereof and as of the Closing Date, will have fulfilled its obligations
required to have been performed prior to the Closing. The Seller is not in
material breach of or in default under any Assigned Contract, and no event has
occurred that with the passage of time or giving of notice or both would
constitute a breach or default, which breach or default would result in a loss
of a material right, result in the payment of any damages or penalties or result
in the creation of an Encumbrance thereunder or pursuant thereto. The Seller has
not received written notice from any Person party to any Contract regarding the
termination, cancellation or material change to the terms of, any Contract.
Buyer has been supplied with, or has been given access to, a true and correct
copy of all Contracts, together with all material amendments, waivers or other
changes thereto. Section 5.9 of the Seller Disclosure Schedule sets forth a
correct and complete list of all consents and approvals of third parties that
are required in connection with the consummation by the Seller of the
transactions contemplated by this Agreement.

5.10 Governmental Authorizations; Permits. Section 5.10 of the Seller Disclosure
Schedule identifies each Governmental Authorization and Permit held by Seller
that is primarily related to the Business or the Assets, and Seller has
delivered to Buyer accurate and complete copies of all such Governmental
Authorizations and Permits. The Governmental Authorizations and Permits
identified in Section 5.10 of the Seller Disclosure Schedule are valid and in
full force and effect and shall remain valid and in full force and effect on
identical terms immediately following the Closing and collectively constitute
all Governmental Authorizations and Permits necessary for the use of the Assets
as they are currently being used and for the Business as currently being
conducted. Seller and its Affiliates are, and have at all times been, in
compliance in all material respects with the terms and requirements of the
Governmental Authorizations and Permits identified in Section 5.10 of the Seller
Disclosure Schedule. Seller and its Affiliates have not received any written
notice or other written communication from any Governmental Authority regarding
(a) any actual or possible violation of or failure to comply with any term or
requirement of any Governmental Authorization or Permit related to the Assets or
the Business or (b) any actual or possible revocation, withdrawal, suspension or
modification of any Governmental Authorization or Permit related to the Assets
or the Business.

5.11 Employee Matters.

(a) All compensation, including wages, commissions, bonuses and benefits payable
to or on behalf of the Target Employees that is required to be paid on or prior
to the Closing Date shall be paid in full on or prior to the Closing Date.
Seller and its Affiliates have no past due obligations under any outstanding
agreements, understandings or commitments to the Target Employees with respect
to any compensation, severance obligations, change in control benefits, employee
benefits, commissions or bonuses. Seller is and has been in compliance (or has
effectively corrected any potential noncompliance such that no causes of action
currently exist) in all material respects with all federal, state and municipal
Legal Requirements with respect to employment practices, terms and conditions of
employment, compensation, employee benefits and wages and hours, including but
not limited to The Fair Labor Standards Act, The National Labor Relations
Action, The Equal Pay Act, Occupational Health and Safety Act, The Employee

 

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Retirement Income Security Act of 1974, the North Carolina Wage and Hour Act,
Kentucky Revised Statutes Chapter 337 or any similar state or local law which in
any way regulates the employment relationship (“Employment Laws”).

(b) No Target Employee performs services outside of the United States. All
persons who provide services to Seller or an Affiliate of Seller on behalf of
the Business and who have been classified as providing such services in a
non-employee status have been properly classified.

(c) All Employee Plans and Employee Agreements have complied in all material
respects, in form and operation, with the terms of ERISA, the Code and other
applicable law. Neither Seller nor any of its subsidiaries or any other Person
that, together with Seller or its Affiliates, would be treated as a single
employer under Section 414 of the Code or under Section 4001(b) of ERISA, has
ever maintained, contributed to or been obligated to maintain or contribute to
or otherwise have or had any liability (whether actual or contingent) with
respect to any “employee benefit plan” (as defined in Section 3(3) of ERISA)
that (a) is or was a multiemployer pension plan (as defined in Section 3(37) of
ERISA or is or was otherwise subject to Title IV of ERISA or Sections 412, 430
or 431 of the Code, or (b) provides vested life insurance, medical or other
health and welfare benefits to or with respect to any Target Employee, or to or
with respect to any former employee of the Business, upon or following
retirement or termination of employment for any reason, except as may be
required by COBRA.

(d) Section 5.11(d) of the Seller Disclosure Schedule sets forth the policy of
Seller with respect to Accrued PTO. As of the Closing, the Closing PTO Amount
Schedule will set forth an accurate and complete list of the amount of Accrued
PTO for each of the Target Employees. Seller has delivered to Buyer a complete
and accurate list, dated as of a date no earlier than five (5) days prior to the
date of this Agreement, of each Target Employee’s: (i) employee identification
number, (ii) employment location, (iii) date of hire, (iv) current title,
(v) current annual salary, (vi) current bonus and/or commission potential,
including amounts earned but unpaid as of the date hereof, (vii) classification
by Seller as exempt or non-exempt, (viii) outstanding equity awards under any
Employee Plan, (ix) any commitment, promise or understanding of the Seller or
its Affiliates to pay an amount or benefit in connection with a termination of
employment (contingent or otherwise) or in connection with a change of control,
and (x) Accrued PTO as of January 31, 2015. No payment or benefit that is
contingent upon or otherwise paid in connection with the occurrence of a change
of control will be an “excess parachute payment” (as defined in Code Sections
280G and 4999) that would result in any of the Target Employees becoming subject
to an excess tax under Code Section 4999.

(e) There are no actions, suits, claims, labor disputes or grievances pending,
or, to the knowledge of Seller, threatened or anticipated relating to any
compensation, benefits, labor, safety or discrimination matters involving any
Target Employee. To the Seller’s knowledge, there are no complaints against
Seller pending before the National Labor Relations Board, the Equal Employment
Opportunity Commission, U.S. Department of Labor, North Carolina Department of
Labor, Kentucky Labor Cabinet or any similar state or local labor agency by or
on behalf of any Target Employee. Neither Seller nor any of its Affiliates has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act nor has been the subject of any unfair labor practice complaint.
To the knowledge of Seller, no Target Employee is obligated under any contract
or agreement, subject to any judgment, decree or order of any court

 

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or administrative agency that would interfere with such person’s efforts to
promote the interests of Seller or that would interfere with the Assets. Neither
the execution nor delivery of this Agreement will conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract or agreement to which Seller is a party and under which any Target
Employee is now bound. Seller has not been subject to any labor strike, dispute,
slowdown or stoppage affecting the Business.

(f) Neither Seller nor any of its subsidiaries is a party or is bound by any
collective bargaining agreement or other labor union contract (including any
contract or agreement with any works council, trade union, or other
labor-relations entity) with respect to any Target Employee, neither Seller nor
any of its subsidiaries has been subject to or bound by any such collective
bargaining agreement or other union contract at any time during the three
(3) years prior to the date of this Agreement, and no such collective bargaining
agreement or other union contract is being negotiated by Seller or any of its
subsidiaries. To the knowledge of Seller, as of the date hereof, none of the
Target Employees is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreements relating to, affecting or in
conflict with the present or proposed activities of the Business, except for
agreements between Seller or any of its Affiliates and their present and former
employees, consultants and contractors.

(g) During the three (3)-year period ending on the date hereof, Seller has not
been cited, fined, served with a Cease and Desist Order nor has any action at
law or administrative proceeding been initiated or, to the knowledge of Seller,
threatened against Seller, by reason of any actual or alleged failure to comply
with any Employment Laws in connection with the operation of the Business.

(h) Seller has a completed and true copy of the Form I-9 (Employment Eligibility
Verification Form) for each Target Employee and has retained all other records
or documents that are required to be retained by Seller pursuant to the
Immigration Reform and Control Act with respect to the Target Employees.

5.12 Taxes.

(a) For purposes of this Agreement, (i) the term “Tax” or “Taxes” means any
federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add on minimum, estimated or other
tax, assessment, or duty, of any kind whatsoever imposed by any Governmental
Authority, including any interest, penalty or addition thereto, whether disputed
or not, and (ii) the term “Tax Return” means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.

(b) Seller has timely filed all Tax Returns that it was required to file for all
periods through and including the Closing Date. All such Tax Returns are correct
and complete in all respects and were prepared in compliance with all applicable
laws and regulations. All Taxes required to be paid by Seller (whether or not
shown or required to be shown on any Tax Return)

 

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have been paid. Seller is not the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by a Governmental
Authority in a jurisdiction where Seller does not file Tax Returns that Seller
may be subject to taxation or required to file a Tax Return in that
jurisdiction. There are no audits, examinations, investigations, disputes,
claims or other actions now pending or, to Seller’s knowledge, threatened with
respect to any liability for Taxes of Seller. No deficiencies exist or have been
asserted or assessed with respect to Taxes of Seller.

(c) Seller’s Tax obligations will not result in the inability to consummate the
transactions contemplated in this Agreement or any Related Agreement.

(d) There are no Encumbrances for Taxes upon any of the Assets (other than
Permitted Encumbrances). Seller has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.

(e) There is no contract to which Seller or any of its Affiliates is a party
covering any Target Employee that has or will, or could reasonably be expected
to, cause compensation to be includable in the gross income of any Target
Employee under Section 409A of the Code (or any similar state law).

(f) All Taxes that the Seller is required by law to withhold or collect have
been timely withheld or collected in all material respects and, to the extent
required, have been timely paid over to the proper Governmental Authorities or
are being held by the Seller for such purpose and all Forms W-2 and 1099 and
similar forms with respect thereto have been properly completed and timely filed
in all material respects.

(g) The Seller (i) has never been a member of an “affiliated group” (as defined
in Section 1504(a) of the Code) and (ii) is not liable for the Taxes of any
other Person under Section 1.1502-6 of the Treasury Regulations promulgated
under the Code (the “Treasury Regulations”) or any similar provision of state,
local or foreign law, as a transferee or successor, or under any tax allocation
agreement, tax sharing agreement, tax indemnification agreement, or similar
agreement.

5.13 Material Relationships. Section 5.13 of the Seller Disclosure Schedule sets
forth a correct and complete list of all suppliers of raw materials, work in
process, intermediates, packaging, labeling and finished product to whom the
Seller paid more than $25,000 in calendar year 2014, and in each case for each
of the Seller’s products and services in connection with the Business
(collectively, the “Suppliers”) and customers constituting at least one percent
(1%) of the Business’s gross sales based on the gross revenues received by the
Business from each such customer for the 12 month period ended on the Balance
Sheet Date. No Supplier or distributor of or customer of the Business has
notified Seller in writing of an intention to or to the Seller’s knowledge, has
threatened to terminate, cancel or materially adversely change any Contract or
its existing business relationship with Seller or has made any claim against the
Seller under any Contract, and Seller has no reason to believe that such
termination, cancellation or alteration of a Contract or the relationship with
Seller is likely to occur. To the knowledge of Seller, no Supplier, distributor
or customer of the Business is threatened with bankruptcy or insolvency.

 

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5.14 Financial Statements. Attached as Section 5.14 of the Seller Disclosure
Schedule are the unaudited balance sheet of the Business as of December 31, 2014
(the “Balance Sheet Date”) and the related unaudited statements of income for
the Business for the 12 month period then ended (the “Financial Statements”).
The Financial Statements have been prepared in conformity with GAAP, as applied
by Seller. The Financial Statements are based upon information contained in the
Seller’s books and records and present fairly, in all material respects, the
financial position of the Business as of the times and for the periods indicated
therein, subject, to customary year-end adjustments, which are not material in
the aggregate, and the absence of footnotes. The Seller maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(x) transactions are executed in accordance with management’s authorization, and
(y) transactions are recorded as necessary to permit preparation of financial
statements that fairly present the results of operations in accordance with GAAP
applied consistently with past practices.

5.15 Related-Party Transactions. No officer or employee of Seller who works
primarily with the Business or, to Seller’s knowledge, member of his, her, or
its immediate family is indebted to Seller, nor is Seller indebted (or committed
to make loans or extend or guarantee credit) to any of them other than for
accrued salaries, reimbursable expenses or other standard employee benefits. To
Seller’s knowledge, none of such persons has any direct or indirect ownership
interest in any Person with which Seller is affiliated or with which Seller has
a business relationship, or any Person that competes with Seller. No officer or
employee of Seller who works primarily with the Business or, to the best of
Seller’s knowledge, no member of his, her, or its immediate family is directly
or indirectly interested in any Assigned Contract. Except for salary, bonus and
benefits paid to officers or employees of Seller, there are no material
agreements, understandings or proposed transactions between Seller and any of
its officers or employees who works primarily with the Business or any affiliate
thereof.

5.16 Insurance. Section 5.16 of the Seller Disclosure Schedule sets forth a
correct and complete list of all fire, theft, casualty, general liability,
workers’ compensation, business interruption, product liability, automobile and
other insurance policies maintained by the Seller with respect to the Business
and the Assets, specifying the type of coverage, the face amount of coverage,
the annual premium, the carrier and the expiration date of each such policy
(collectively, the “Insurance Policies”). All premiums on the Insurance Policies
that are payable prior to the date hereof have been paid, and the Seller is not
in breach or default, in any material respect, under any Insurance Policy, and
all Insurance Policies are in full force and effect. The Seller has not received
any notice that any such Insurance Policy will be canceled or not renewed or of
increase or intent to increase premiums in any significant respect. The Seller
has not received a denial of a claim for coverage under the Insurance Policies
made by the Seller within the twelve months immediately preceding the date
hereof (excluding any claims related to employee insurance benefits).

5.17 Real Property. Section 5.17 of the Seller Disclosure Schedule sets forth a
correct and complete list of all real property occupied by the Seller primarily
in the conduct of the Business (collectively, the “Real Property”) and all
leasehold or subleasehold estates and other material rights to use or occupy any
land, buildings, structures, improvements, fixtures or other interest in real
property to which the Seller is a party as of the date hereof or that are
primarily used in connection with the conduct of the Business (collectively, the
“Leases”). The Seller does

 

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not own any Real Property that is used primarily in the conduct of the Business.
The Leases are valid and binding obligations of the Seller as lessee therein and
are in full force and effect. Seller is not, and to the Seller’s knowledge, no
other party thereto is, in material breach or default under any Lease, nor has
any event occurred which, with notice or the passage of time, or both, would
give rise to such a default by the Seller or such other party. Seller has not
received notice claiming that it is, nor has Seller provided any notice claiming
that any other party is, in default under any Lease. The Seller has not leased
or otherwise granted to any Person the right to use or occupy any of the real
property subject to the Leases. There are no pending or, to the Seller’s
knowledge, threatened condemnation or eminent domain proceedings with respect to
the real property subject to the Leases or any portion thereof. Except as
disclosed on Section 5.17 of the Seller Disclosure Schedule, the use of the real
property subject to the Leases as presently utilized by the Seller complies, or
is legally non-conforming, in all material respects with the requirements of
applicable building, zoning, and other similar Legal Requirements. There are no
suits, petitions, notices, or proceedings pending or, to the Seller’s knowledge,
threatened against the Seller with respect to the real property subject to the
Leases.

5.18 Environmental Compliance. The Seller is and at all times during the last
three years has been in compliance with all applicable Environmental Laws,
including those that relate to the environmental condition of the Real Property,
except for non-compliance with such Environmental Laws as could not reasonably
be expected to subject the Seller or any of its subsidiaries to material
Liability. The Seller is not subject to, nor has it received any notice, report
or other written information, of, any private, administrative or judicial action
relating to the presence or alleged presence of Hazardous Substances in, at,
under or upon the Real Property, and there are no pending or, to the Seller’s
knowledge, threatened actions or proceedings (or notices of potential actions or
proceedings received by Seller) against the Seller from any Governmental
Authority or other Person regarding any matter relating to any Environmental
Laws or Hazardous Substances, that would reasonably be expected to have a
Material Adverse Effect. No Hazardous Substances have been generated, disposed,
stored, discharged or released and no Person has been exposed to Hazardous
Substances at the Real Property, except in compliance with Environmental Laws in
a manner that could not reasonably be expected to subject the Seller or any of
its subsidiaries to material Liability. The Seller has not assumed, undertaken,
become subject to, or provided an indemnity with respect to, any liability of
any other Person relating to Environmental Law. For purposes of this Agreement,
(a) “Environmental Laws” means all applicable federal, state and local Legal
Requirements and common law relating to pollution, protection of the
environment, or protection of worker health and safety from environmental
hazards, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, U.S.C. §9601 et seq., the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. §6901 et seq., the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. §11001 et seq., the Clean
Air Act, 42 U.S.C. §7401 et seq., the Federal Water Pollution Control Act, 33
U.S.C. §1251 et seq., the Toxic Substance Control Act, 15 U.S.C. §2601 et seq.,
and the Safe Drinking Water Act, 42 U.S.C. §300f et seq.; and (b) “Hazardous
Substances” means (i) hazardous materials, hazardous substances, extremely
hazardous substances, toxic substances, hazardous wastes or words of similar
meaning as defined, listed or regulated under any Environmental Laws;
(ii) petroleum, including without limitation, crude oil or any fraction thereof;
(iii) any radioactive material; (iv) asbestos in any form or condition regulated
under applicable Environmental Laws; (v) polychlorinated byphenyls (“PCB”) or
PCB-containing materials regulated under applicable Environmental Laws; and
(vi) any other material, substance or waste to which liability or standards of
conduct is currently imposed under any Environmental Laws.

 

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5.19 Accounts Receivable. Subject to the reserves reflected on the Financial
Statements, the accounts receivable of Seller reflected on the Financial
Statements, and all accounts arising subsequent to the Balance Sheet Date,
(a) have arisen from bona fide, arms’-length transactions entered into in the
ordinary course of business consistent with past practice, (b) are legal, valid
and binding obligations of the respective debtors enforceable in accordance with
their respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors’ rights generally
and by general principles of equity, (c) are not subject to claims of set off or
other defenses or counterclaims, and (d) are collectible in full in accordance
with the terms of the applicable Contract, net of reserves reflected on the
Financial Statements. No Person has any Encumbrance (other than a Permitted
Encumbrance) on any Receivables, and no written request for deduction, discount
or concession (other than normal cash discounts, rebates and charge-backs set
forth on Section 5.19 of the Seller Disclosure Schedule) has been made in
respect of any Receivables. Section 5.19 of the Seller Disclosure Schedule sets
forth a correct and complete list of all Receivables that were classified as
doubtful accounts as of the Balance Sheet Date. Since the Balance Sheet Date,
all Receivables have been collected by the Seller in a manner consistent with
past practice, and the Seller shall use commercially reasonable efforts to
collect all Receivables outstanding as of the date hereof only in a manner
consistent with past practices.

5.20 Inventory. All Inventory reflected on the Financial Statements (a) had a
commercial value at least equal to the value shown on the face of the Financial
Statements, (b) is valued in accordance with GAAP at the lower of cost (on a
FIFO basis) or market and (c) consists of a quality and quantity usable and
saleable in the ordinary course of the Business as currently conducted or as
reasonably contemplated to be conducted, except for slow-moving, damaged or
obsolete items (all of which have been written down to net realizable value or
for which adequate reserves have been provided and all intercompany profit or
other mark-up has been eliminated). All Inventory acquired since the Balance
Sheet Date consists of a quality and quantity usable and saleable in the
ordinary course of the Business. All work-in-process contained in Inventory
constitutes items in process of production pursuant to Contracts entered into
(including orders taken) in the ordinary course of the Business by regular
customers of the Business. Neither the Seller nor, to the Seller’s knowledge,
any such customer is in material breach of the terms of any obligation to the
other. To the Seller’s knowledge, no valid grounds exist for any set off of
amounts billable to such customers on the completion of the Contract to which
work-in-process relates. All work-in-process consists of a quality ordinarily
produced in accordance with the requirements of the Contracts to which such
work-in-process relates. The Seller (and Buyer as its transferee or assignee)
will have on hand as of the Closing such quantities of Inventory as are
reasonably required to continue the Business immediately after the Closing
consistent with past practice. The Seller has purchased all Inventory in
material compliance with applicable Legal Requirements relating to imported
goods. All Inventory is the property of Seller free and clear of any Encumbrance
other than any Permitted Encumbrance, and conform in all material respects to
all standards applicable to such inventory or its use or sale imposed by
Governmental Authorities.

 

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5.21 Warranty Obligations. Section 5.21 of the Seller Disclosure Schedule sets
forth (i) a list of all forms of written warranties, guarantees and written
warranty policies of Seller in respect of any of Seller’s products and services
that are currently in effect (the “Warranty Obligations”) and the duration of
each such Warranty Obligation and (ii) each of the Warranty Obligations that is
subject to any dispute or, to the knowledge of Seller, threatened dispute. There
have not been any material deviations from the Warranty Obligations. All
products manufactured, designed or sold by Seller in the past three (3) years
which primarily related to the Business (A) are and were free from material
defects in construction and (B) satisfy any and all Contracts or other
specifications related thereto to the extent stated in writing in such Contracts
or specifications, in each case, in all material respects.

5.22 Absence of Undisclosed Liabilities. The Seller does not have any Liability
primarily related to the Assets or the Business, and, to the Seller’s knowledge,
there is no basis for any proceeding, hearing, investigation, charge, complaint
or claim with respect to any such Liability, except for (i) Liabilities
reflected in the Financial Statements, (ii) Liabilities disclosed in the Seller
Disclosure Schedule, and (iii) Liabilities of a similar type, magnitude and
scope as those reflected in the Financial Statements that have arisen since the
Balance Sheet Date in the ordinary course of business and which would not,
individually or in the aggregate, result in a Material Adverse Effect.

5.23 Absence of Certain Events. Except as expressly contemplated by this
Agreement or as would not have a Material Adverse Effect, since the Balance
Sheet Date, the Seller has, with respect to the Business:

(a) operated, repaired, and maintained the Assets and the Business in the
ordinary course of business as currently conducted consistent with past
practice;

(b) used commercially reasonable efforts to preserve the goodwill of and
relationships with Governmental Authorities, customers, Suppliers, vendors,
lessors, licensors, licensees, contractors, distributors, agents, employees and
others having business dealings with Seller or its Affiliates in connection with
Seller’s or its Affiliates’ use of the Assets or operation of the Business;

(c) complied with all Legal Requirements applicable to Seller’s use of the
Assets or operation of the Business and provided Buyer with any notice from any
Governmental Authority or other Person alleging violation of any Legal
Requirement;

(d) maintained in full force and effect policies of insurance or substantially
equivalent policies that relate to the Assets or the Business;

(e) not mortgaged, pledged or subjected to any Encumbrance (other than a
Permitted Encumbrance) any of the Assets;

(f) not sold, assigned, licensed, granted a covenant not to sue or released,
transferred, conveyed, leased, surrendered, relinquished, permitted to expire,
terminate or lapse, or otherwise disposed of any material right, title or
interest in or to any of the Assets;

 

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(g) not settled or compromised any claim, Liability, Action or obligation
related to or in connection with the Assets, any Assumed Liability, other than
the payment, discharge or satisfaction of Liabilities in the ordinary course of
business or as otherwise contemplated by this Agreement;

(h) not materially amended, waived, modified or consented to the termination of
any Governmental Authorization or Permit or materially amended, waived, modified
or consented to the termination of rights of Seller or its Affiliates
thereunder;

(i) not terminated the employment or otherwise materially modified the terms and
conditions of employment (including increasing the base salary payable or
entering into, renewing or amending any offer letter or other employment or
consulting agreement) of any of the Target Employees other than in the ordinary
course of business or as otherwise contemplated by this Agreement;

(j) not entered into any lease of real or personal property or any renewals
thereof for the Assets involving a term of more than one month;

(k) not knowingly taken any action which would reasonably be expected to cause
any representation or warranty of Seller in this Agreement to be or become
untrue in any material respect or intentionally omitted to take any action
reasonably necessary to prevent any such representation or warranty from being
untrue in any material respect at such time; or

(l) authorized or entered into an agreement to do any of the foregoing.

5.24 Full Disclosure. No representation or warranty made by Seller in this
Agreement, and no statement contained in the Seller Disclosure Schedule or the
certificates to be delivered pursuant to Section 8.5 hereof contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading. To the Seller’s knowledge,
there are no facts that (individually or in the aggregate) would reasonably be
expected to have a Material Adverse Effect that have not been set forth in this
Agreement or the exhibits and schedules hereto.

SECTION 6 REPRESENTATIONS AND WARRANTIES OF BUYER.

Buyer represents and warrants to Seller as follows:

6.1 Organization, Good Standing, Corporate Power and Qualification. Buyer has
been duly organized and is validly existing and in good standing under the laws
of the state of Delaware. Buyer has the requisite corporate power and authority
to enter into and perform this Agreement, and the Related Agreements to which
Buyer is or is to be a party, to consummate the transactions contemplated hereby
and thereby, to own and operate its properties and assets and to carry on its
business as currently conducted.

6.2 Due Authorization, Binding Effect. All corporate action on the part of Buyer
necessary for the authorization, execution, delivery of and the performance of
all obligations of Buyer under this Agreement and the Related Agreements to
which Buyer is or is to be a party

 

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has been taken. This Agreement, along with the Related Agreements to which Buyer
is a party, when executed and delivered by Seller, will constitute valid and
legally binding obligations of Buyer, enforceable in accordance with their
respective terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or others laws of general application
relating to or affecting the enforcement of creditors’ rights generally or
(ii) the effect of rules of law governing the availability or enforceability of
equitable remedies.

6.3 No Conflicts. The execution, delivery and performance of this Agreement, the
Related Agreements to which Buyer is or is to be a party and the consummation of
the transactions contemplated hereby or thereby do not and will not (i) conflict
with or result in any violation or default under Buyer’s certificate of
incorporation or bylaws, as amended to-date, or (ii) violate any Legal
Requirement to which Buyer is subject; or (iii) conflict with or result in a
violation or breach of, with or without the giving of notice or the passage of
time or both, or give any party the right to terminate, accelerate or modify, or
require the consent of any Person under, any Contract to which Buyer is a party,
except in the case of (iii), any violation or breach that would not prevent
Buyer from performing its obligations under this Agreement or any Related
Agreement to which Buyer is a party or consummating the transactions
contemplated hereby or thereby.

6.4 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, notice, declaration or filing with,
any Governmental Authority is required on the part of Buyer in order to enable
Buyer to execute, deliver and perform its obligations under this Agreement or
the Related Agreements to which Buyer is or is to be a party, or to consummate
any of the transactions contemplated by the Agreement or the Related Agreements
to which Buyer is or is to be a party.

6.5 Litigation. There is no action, suit, proceeding, claim, arbitration or
investigation pending (or, to Buyer’s knowledge, currently threatened) against
Buyer before any Governmental Authority or arbitrator that would prevent or
materially interfere with or delay the consummation of the transactions
contemplated by the Agreement or the Related Agreements to which Buyer is or is
to be a party. To Buyer’s knowledge, Buyer is not a party or subject to the
provisions of any Legal Requirement that would prevent or materially interfere
with or delay the consummation of the transactions contemplated by the Agreement
or the Related Agreements to which Buyer is or is to be a party.

6.6 No Finder’s Fees. There is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
Buyer or any of its Affiliates who might be entitled to any fee or commission
from Buyer in connection with the transactions contemplated hereby.

6.7 Financing. Buyer will have available to it, at Closing, sufficient funds to
pay, or to cause to be paid, in full the Purchase Price.

 

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SECTION 7 COVENANTS.

7.1 Conveyance of Assets.

(a) At or prior to the Closing, Seller shall execute any deeds, bills of sale,
instruments of conveyance, assignments, assurances or any other actions or
things as are necessary to transfer, vest, perfect or confirm right, title,
interest or ownership (of record or otherwise) of the Assets, including the
Intellectual Property Assets, as reasonably requested by Buyer.

(b) At any time and from time to time after the Closing, at Buyer’s reasonable
request and without further consideration, Seller shall execute and deliver all
deeds, bills of sale, instruments of conveyance, assignments and assurances and
take and do all such other actions and things as may be reasonably requested by
Buyer in order to vest, perfect or confirm any and all right, title and interest
in, to and under the Assets in Buyer or the Designated Purchaser, as applicable,
or otherwise to carry out this Agreement.

(c) In case after the Closing Date any further action is reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, as soon as reasonably practicable, each party
hereto shall take, or cause its officers or directors or Affiliates to take, all
such reasonably necessary, proper or advisable actions.

(d) After the Closing Date, Seller shall cooperate with Buyer, its Affiliates
and their successors and assigns in the prosecution and maintenance of the
Intellectual Property Assets, including by promptly (i) disclosing relevant
facts and delivering instruments and other documents reasonably requested by
Buyer or its successors or assigns, and (ii) providing technical consultations
reasonably requested by Buyer or its successors or assigns, including taking
reasonable best efforts to make the relevant inventors and counsel that were
involved in prosecution of any Intellectual Property Assets available and
accessible to Buyer or its successors or assigns. All such assistance will be
provided by Seller without the payment of additional compensation, except that
the inventors will be paid and reimbursed a reasonable amount for time expended
and reasonable travel and subsistence expenses incurred in performing such
technical consultations requested by Buyer or its successors or assigns, such
expenses to be approved in advance by Buyer or its successors or assigns. Seller
and its Affiliates hereby appoint Buyer as its and their attorney in fact, and
hereby authorize Buyer to execute a power of attorney form on its and their
behalf for use in any jurisdiction in which Buyer may wish to have the
assignment of the Intellectual Property Assets, sufficient in scope for Buyer to
have such assignment registered with the applicable Governmental Authority or
domain name registrar.

7.2 Employee Matters.

(a) Buyer shall, or Buyer shall cause one of its Affiliates to, extend offers of
employment to Seller’s employees set forth on Schedule 7.2(a) (the “Target
Employees”) (and such offers to Target Employees, the “Transfer Offers”) that,
if accepted, shall become effective on the Closing Date. Seller and the officers
of Seller shall use commercially reasonable efforts to encourage Target
Employees to accept the Transfer Offers. The Transfer Offers shall set forth the
proposed terms of employment for the Target Employees, including salary,
incentive compensation opportunities and benefits, with base salary no less than
to what is paid to such

 

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Target Employee by Seller as of the date hereof and incentive compensation
opportunity which shall be at least commensurate with the terms of employment of
a similarly situated employee currently employed by Buyer. Employment pursuant
to a Transfer Offer shall be contingent, among other requirements stated in the
Transfer Offer, upon such Target Employee remaining continuously employed by
Seller until the end of the day prior to the Closing. Target Employees who
commence employment with Buyer or an Affiliate of Buyer pursuant to a Transfer
Offer shall be referred to herein as “Transferred Employees.” Nothing in this
Section 7.2 or elsewhere in this Agreement shall be construed to create a right
in any Target Employee, or in any other employee of Seller, to employment with
Buyer or any Affiliate of Buyer. All compensation, including base salary or
wages, unused Accrued PTO (except to the extent assumed by Buyer or its
Affiliates), commissions, bonuses and benefits payable by Seller to or on behalf
of each Transferred Employee for services performed on or prior to the Closing,
shall be vested and paid or otherwise discharged in full by Seller. Effective as
of the Closing, the Transferred Employees shall cease all active participation
in and accrual of benefits under the Employee Plans.

(b) Effective as of the end of the day prior to the Closing Date, Seller shall
terminate the employment of all Transferred Employees. Seller agrees that Buyer
shall not be responsible for any severance obligations to any Employees, whether
or not they are Transferred Employees, related to such Employees’ employment by
Seller prior to the Closing Date, and that Seller shall be solely responsible
for any such obligations. Seller shall retain all Liability for salary, wages,
bonuses, unused Accrued PTO (except to the extent assumed by Buyer or its
Affiliate), and any other Liabilities arising with respect to all Employees
(including the Transferred Employees) before the Closing Date; provided,
however, Buyer shall, or Buyer shall cause one of its Affiliates to, assume all
Liability for the payout of all Accrued PTO (excluding any interest) not in
excess of 100 hours per employee that is set forth on the Closing PTO Amount
Schedule and that is credited to Buyer or any of its Affiliates for the benefit
of Transferred Employees. Seller agrees to use its commercially reasonable
efforts to obtain necessary consents (which shall be included in the Transfer
Offers) from each Transferred Employee relating to Buyer’s or its Affiliates’
assumption of the Accrued PTO set forth on the Closing PTO Amount Schedule.

(c) At least two (2) Business Days prior to the Closing, Seller shall deliver to
Buyer a true and accurate schedule setting forth the amount of all Accrued PTO
through and as of the Closing Date for each of the Employees who have received a
Transfer Offer and have not, prior to such date, rejected such Transfer Offer
(the “Closing PTO Amount Schedule”).

(d) Seller shall retain and perform all Liabilities and maintain all obligations
under COBRA with respect to Employees (including the Transferred Employees) and
their covered dependents as a result of any such persons being covered (or
ceasing to be covered) under a program maintained or contributed to by Seller or
an Affiliate of Seller; provided, that Buyer shall, or Buyer shall cause one of
its Affiliates to, perform all of its obligations under COBRA with respect to
Transferred Employees that become covered by any group health insurance plan of
Buyer or one of its Affiliates and who incur a “qualifying event” with respect
to such program of Buyer or an Affiliate of Buyer. Buyer or an Affiliate of
Buyer shall be solely responsible for all Liability for salary, wages, bonuses,
accrued, but unused vacation pay and any other Liabilities arising with respect
to all Transferred Employees as a result of employment on or after the Closing
Date.

 

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(e) Buyer and its Affiliates shall not assume sponsorship or any
responsibilities under any Employee Plans and Employee Agreements. Seller shall
retain all Liabilities and obligations of Seller and its Affiliates under its
Employee Plans and any Employee Agreements. As of the Closing Date, each
Transferred Employee will be eligible to participate in Buyer’s or one of its
Affiliates’ employee benefit plans and programs which are generally applicable
to Buyer’s or its Affiliates’ similarly situated employees, in accordance with
the terms and conditions of such plans. Each Transferred Employee shall be given
credit for the corresponding service recognized by Seller prior to the date he
or she terminates employment with Seller for purposes of participation
eligibility, vesting and benefit eligibility under Buyer’s or its Affiliates’
employee benefit plans and programs, whether in effect on the Closing Date or
subsequently established by Buyer or its Affiliates; provided, that the
foregoing shall not apply to the extent that its application would result in a
duplication of benefits with respect to the same period of service and the
foregoing shall not apply for benefit accrual purposes under any defined benefit
pension plan. Buyer shall use its reasonable best efforts to cause Buyer’s or
its Affiliates’ health plans to provide each Transferred Employee and his or her
otherwise eligible dependents with coverage commencing immediately upon the
Closing Date. If such Transferred Employee was enrolled in Seller’s
corresponding plan immediately prior to the Closing, then Buyer shall use its
commercially reasonable efforts to cause Buyer’s or its Affiliates’ health plans
to: (A) waive any pre-existing condition limitations; and (B) recognize each
such Transferred Employee’s expenditures (including those of his or her covered
dependents and/or domestic partner) under Seller’s corresponding plan for the
calendar year in which the Closing occurs toward any applicable deductible and
annual out-of-pocket limit in Buyer’s health plans for such calendar year. Buyer
will cause Buyer’s or its Affiliates’ health plans to waive any pre-existing
condition limitation where required to comply with the provisions of the Health
Insurance Portability and Accountability Act of 1996, as amended.

(f) No provision of this Agreement (other than the penultimate sentence of
Section 7.2(a)) shall (i) create any third-party beneficiary rights in any
Transferred Employee, or any beneficiary or dependents thereof, (ii) be
construed as in any way modifying or amending the provisions of any Employee
Plan or any employee benefit plan of Buyer or any of its Affiliates,
(iii) require Buyer or any of its Affiliates to continue any employee benefit
plan or be construed to prevent or limit Buyer or any of its Affiliates from
terminating or modifying any employee benefit plan that Buyer or its Affiliates
may establish or maintain or (iv) require Buyer or any of its Affiliates to
continue or maintain the employment of any Transferred Employee following the
Closing Date.

7.3 Access and Information.

(a) From the date hereof until the Closing, subject to any applicable Legal
Requirements, Seller shall (i) afford Buyer and its Representatives access,
during regular business hours and upon reasonable advance notice, but in no
event less than 48 hours prior notice, to the Employees, the Assets and the
Books and Records, (ii) furnish, or cause to be furnished, to Buyer any
financial and operating data and other information that is available with
respect to the Assets, Assumed Liabilities or the Business as Buyer from time to
time reasonably requests and (iii) instruct the Employees and its
Representatives to reasonably cooperate with Buyer in its investigation of the
Assets, Assumed Liabilities and the Business. No investigation pursuant to this
Section 7.3(a) shall alter any representation or warranty given hereunder by

 

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Seller. All requests for information made pursuant to this Section 7.3(a) shall
be directed to an executive officer of Seller or such Person or Persons as may
be designated by Seller. All information received in any form pursuant to this
Section 7.3(a) shall be governed by the terms of the Confidentiality Agreement
and shall be held in confidence pursuant to Section 7.9 hereof.

(b) Following the Closing, upon the request of the other party, Seller and Buyer
shall, to the extent permitted by applicable Legal Requirements and
confidentiality obligations existing as of the Closing Date, grant to the other
party and its Representatives during regular business hours and upon reasonable
advance notice, but in no event less than 48 hours prior notice, the right, at
the expense of the non-granting party, to inspect and copy the books, records
and other documents in the granting party’s possession pertaining to the
operation of the Assets or the Business prior to the Closing (including books of
account, records, files, invoices, correspondence and memoranda, customer and
supplier lists, data, specifications, insurance policies, operating history
information and inventory records) to the extent such access is reasonably
required by the non-granting party for any proper business purpose. In no event
shall either party have access to legally privileged information of the other
party, or to the consolidated federal, state or local Tax Returns of the other
party. The Seller agrees not to destroy or otherwise dispose, for a period of
six years after the Closing Date, of any of the business records primarily
related to the Business, Assets or Assumed Liabilities without first offering in
writing to surrender such records to Buyer, and Buyer shall have 10 days after
such offer to agree to take possession thereof.

7.4 Preservation of Business. During the period from the date hereof until the
Closing, except as required by applicable Legal Requirements, as otherwise
expressly contemplated by this Agreement or as set forth on Schedule 7.4, or
with the prior written consent of Buyer, Seller shall, and shall cause its
Affiliates to:

(a) operate, repair, and maintain the Assets and the Business in the ordinary
course of business as currently conducted consistent with past practice;

(b) use commercially reasonable efforts to preserve the goodwill of and
relationships with Governmental Authorities, customers, Suppliers, vendors,
lessors, licensors, licensees, contractors, distributors, agents, employees and
others having business dealings with Seller or its Affiliates in connection with
Seller’s or its Affiliates’ use of the Assets or operation of the Business;

(c) comply with all Legal Requirements applicable to Seller’s use of the Assets
or operation of the Business and promptly provide Buyer with any notice from any
Governmental Authority or other Person alleging violation of any Legal
Requirement;

(d) maintain in full force and effect policies of insurance or substantially
equivalent policies that relate to the Assets or the Business;

(e) not mortgage, pledge or subject to any Encumbrance (other than a Permitted
Encumbrance) any of the Assets;

 

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(f) not sell, assign, license, grant a covenant not to sue or release, transfer,
convey, lease, surrender, relinquish, permit to expire, terminate or lapse, or
otherwise dispose of any right, title or interest in or to any of the Assets;

(g) not settle or compromise any claim, Liability, Action or obligation related
to or in connection with the Assets, any Assumed Liability, other than the
payment, discharge or satisfaction of Liabilities in the ordinary course of
business or as otherwise contemplated by this Agreement;

(h) not materially amend, waive, modify or consent to the termination of any
Governmental Authorization or Permit or materially amend, waive, modify or
consent to the termination of rights of Seller or its Affiliates thereunder;

(i) not terminate the employment or otherwise materially modify the terms and
conditions of employment (including increasing the base salary payable or
entering into, renewing or amending any offer letter or other employment or
consulting agreement) of any of the Target Employees other than in the ordinary
course of business or as otherwise contemplated by this Agreement;

(j) not enter into any lease of real or personal property or any renewals
thereof for the Assets involving a term of more than one month;

(k) not knowingly take any action which would reasonably be expected to cause
any representation or warranty of Seller in this Agreement to be or become
untrue in any material respect or intentionally omit to take any action
reasonably necessary to prevent any such representation or warranty from being
untrue in any material respect at such time; or

(l) authorize or enter into an agreement to do any of the foregoing.

7.5 Commercially Reasonable Efforts. Seller and Buyer shall cooperate and use
commercially reasonable efforts to fulfill as promptly as practicable the
conditions precedent to the other party’s obligations hereunder, including
securing as promptly as practicable all consents, approvals, waivers and
authorizations required in connection with the transactions contemplated by this
Agreement.

7.6 Publicity. Neither Buyer nor Seller, without the prior consent of the other
party, shall, and each shall cause its Representatives not to, make any public
statement or press release with respect to the transactions contemplated hereby,
or otherwise disclose to any person or entity the existence, terms, content or
effect of this Agreement, except to the extent that disclosure is required by
Legal Requirement or to comply with the obligations set forth in this Agreement.
If either party determines that any disclosure is required by Legal Requirement
or to comply with the obligations set forth in this Agreement, such party shall
first provide an advance copy to the other party for its reasonable review and
comments.

7.7 Exclusivity. From the date of this Agreement until the earlier of the
Closing Date or the termination of this Agreement pursuant to Section 12.1,
neither Seller nor any of Seller’s Representatives will directly or indirectly:
(i) solicit, encourage, initiate, review, accept, support, approve or
participate in any negotiations or discussions with respect to, or enter into
any

 

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contract or agreement in principle concerning, any inquiry, offer or proposal
(formal or informal, oral, written or otherwise) to acquire all or any part of
the Assets or the Business, whether by purchase of assets, sale of stock or
other equity, merger or consolidation, any recapitalization, liquidation,
dissolution, disposition or any similar transaction, exclusive license, joint
venture formation, strategic partnership or other alliance formation (each of
the foregoing, an “Acquisition Proposal”), (ii) disclose any information not
customarily disclosed to any Person concerning the Assets and which could
reasonably be used for the purposes of formulating any Acquisition Proposal,
(iii) assist, cooperate with, facilitate or encourage any Person to make,
participate in any discussions or negotiations with any Person with respect to,
or take any other action to facilitate any inquiries or the making of, any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iv) agree to, enter into a contract regarding, approve,
recommend or endorse any transaction involving any Acquisition Proposal or
(v) authorize or permit any of Seller’s Representatives to take any such action.
Upon the execution of this Agreement, Seller shall cease, and shall cause its
Representatives to cease, immediately and cause to be terminated any and all
existing discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal and promptly request that all confidential
information with respect thereto furnished by Seller or its Representatives be
returned. From the date of this Agreement until the earlier of the Closing Date
or termination of this Agreement, Seller shall notify Buyer as promptly as
practicable (and in any event within two (2) Business Days) of the receipt by
Seller or its Representatives of any proposal or offer (formal or informal,
oral, written or otherwise), or any inquiry or contact with any Person with
respect thereto, regarding any Acquisition Proposal or of any request for
information in connection with a potential Acquisition Proposal. Such
notification shall include any details of the proposal or offer, including any
offer terms and conditions. Seller shall instruct each of its Representatives to
observe the terms of this Section 7.7. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in this Section 7.7
by any Representative, whether or not such Person is purporting to act on behalf
of Seller or otherwise, shall be deemed to be a breach of this Section 7.7 by
Seller. The Seller agrees that the rights and remedies for noncompliance with
this Section 7.7 shall include having such provision specifically enforced by
any court having jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach shall cause irreparable injury to Buyer and that
money damages would not provide an adequate remedy to Buyer.

7.8 Notice.

(a) From the date hereof until the Closing, Seller shall promptly notify Buyer
in writing of (i) any fact, circumstance, event or action the existence,
occurrence or taking of which (x) has had, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, (y) has
resulted in, or would reasonably be expected to result in, any representation or
warranty made by Seller hereunder not being true and correct or (z) has resulted
in, or would reasonably be expected to result in, the failure of any of the
conditions set forth in Section 8 to be satisfied, (ii) any notice or other
written communication from any Person alleging that the consent of such Person
is or may be required in connection with the Transaction, (iii) any notice or
other written communication from any Governmental Authority in connection with
the Transaction, and (iv) any Actions commenced or, to the knowledge of Seller,
threatened in writing against, relating to or involving or otherwise affecting
Seller, the Assets or the Business that, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to
Section 5.5 or that relates to the consummation of the Transaction.

 

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(b) Buyer’s receipt of information pursuant to this Section 7.8 shall not
operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by Seller in this Agreement and shall not be deemed to
amend or supplement the Seller Disclosure Schedule.

7.9 Confidentiality.

(a) Seller shall treat as confidential and shall safeguard any and all
information, knowledge and data included in the Assets or the Assumed
Liabilities or related to the Business, in each case by using the same degree of
care, but no less than a reasonable standard of care, to prevent the
unauthorized use, dissemination or disclosure of such information, knowledge and
data as Seller or its Affiliates used with respect thereto prior to the
execution of this Agreement.

(b) From and after the Closing, Buyer shall, and shall cause its Affiliates to,
treat as confidential and shall safeguard any information relating to the
business of Seller or its Affiliates other than the Assets or the Assumed
Liabilities or primarily related to the Business that becomes known to Buyer as
a result of the transactions contemplated by this Agreement, except as otherwise
agreed to by Seller in writing; provided, however, that nothing in this
Section 7.9(b) shall prevent the disclosure of any such information, knowledge
or data to any Representatives of Buyer or any of its Affiliates to whom such
disclosure is necessary in the conduct of the ownership of the Assets, the
handling of the Assumed Liabilities or the operation of the Business if such
Persons are informed by Buyer or one of its Affiliates of the confidential
nature of such information and are directed by Buyer to comply with the
provisions of this Section 7.9(b).

(c) Buyer and Seller acknowledge that the confidentiality obligations set forth
herein shall not extend to information, knowledge and data that is publicly
available or becomes publicly available through no act or omission of the party
owing a duty of confidentiality, or becomes available on a non-confidential
basis from a source other than the party owing a duty of confidentiality so long
as such source is not known by such party to be bound by a confidentiality
agreement with or other obligations of secrecy to the other party. In the event
that either party is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process or by the rules or regulations of any
regulatory authority having jurisdiction over such party or a stock exchange on
which such party’s securities are traded) to disclose any confidential
information, such party will, except as prohibited by law, notify the other
party promptly of the request or requirement so that the latter party may seek
an appropriate protective order or other remedy or waive compliance with the
provisions of this Section 7.9. If the other party seeks a protective order or
other remedy, the party obligated to disclose the confidential information shall
provide such cooperation as the other party reasonably requests. If, in the
absence of a protective order or other remedy or the receipt of a waiver
hereunder, either party is, on the advice of counsel, compelled to disclose any
confidential information to any tribunal or other entity or else stand liable
for contempt or suffer other censure or penalty, such party may disclose the
confidential information to the tribunal or other entity; provided, however,
that the disclosing party shall (i) limit such disclosure to that which is
reasonably required by any applicable Legal Requirement and (ii) use its
reasonable best efforts to minimize the disclosure

 

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of the confidential information and to obtain, at the reasonable request of the
other party, and at the other party’s cost, an order or other assurance that
confidential treatment will be accorded to such portion of the confidential
information required to be disclosed as the other party shall designate.

7.10 Bulk Sales Laws. Seller shall satisfy all of its Liabilities and
obligations other than the Assumed Liabilities, in the ordinary course of
business. The parties hereby waive compliance with the provisions of any bulk
sales, bulk transfer or similar Legal Requirements of any jurisdiction that may
otherwise be applicable with respect to the sale of any or all of the Assets to
Buyer; it being understood that any Liabilities arising out of the failure to
comply with the requirements and provisions of any bulk sales, bulk transfer or
similar Legal Requirements of any jurisdiction shall be treated as Excluded
Liabilities.

7.11 Company Sale.

(a) Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement shall limit, restrict, or prohibit the Seller or its
Representatives from soliciting, encouraging, initiating, reviewing, accepting,
supporting, approving, participating in any negotiations or discussions with
respect to, or entering into any contract or agreement in principal concerning,
any inquiry, offer or proposal (formal or informal, oral, written, or otherwise)
for a Company Sale or disclosing information relating to the Seller to any
Person in connection therewith.

(b) Seller shall not consummate a Company Sale on or prior to the Closing unless
the buyer or the surviving entity in such transaction (a “Company Buyer”) agrees
to be bound by the terms and provisions of this Agreement, assumes all of the
obligations of the Seller hereunder and reaffirms the representations and
warranties of the Seller contained herein.

(c) In the event that on or prior to the Closing (i) a Company Buyer that has
assumed the obligations of the Seller pursuant to subsection (b) above commits a
material breach (or causes the Seller to commit a material breach) of the
Seller’s obligations set forth in Section 7.5 and does not cure such material
breach within five (5) Business Days after receipt of notice thereof from Buyer,
(ii) such uncured material breach causes a closing condition that was within
Company Buyer’s or Seller’s control to become incapable of fulfillment on or
prior to the Termination Date, and (iii) as a result thereof, the Buyer has the
right to terminate this Agreement pursuant to Section 12.1(f) and in fact
terminates this Agreement in accordance with such Section 12.1(f) prior to the
Termination Date, then upon the Buyer’s written request made to the Company
Buyer within two (2) Business Days after the effective date of such termination,
the Company Buyer shall pay a fee of $2,000,000 by wire transfer of immediately
available funds to an account designated in writing by the Buyer within ten
(10) Business Days after its receipt of such written request from the Buyer (the
“Break Up Fee”); provided, however, that (A) if Buyer elects to make such
request, the Break Up Fee shall be its sole and exclusive remedy with respect to
such material breach and with respect to any other Damages arising from or
relating to this Agreement, and Buyer shall be deemed to have waived,
relinquished and released any and all other rights and remedies that it may have
at law or in equity arising from or

 

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relating to this Agreement, and (B) the Company Buyer shall not be obligated to
pay the Break Up Fee unless Buyer executes and delivers to the Company Buyer,
together with its request for the Break Up Fee, a general release of Seller,
Company Buyer and their respective Affiliates and Representatives from all
claims and other Damages arising from or relating to this Agreement, which
general release shall become effective immediately and automatically upon
payment of the Break Up Fee to the account designated by Buyer as provided
above.

SECTION 8 CONDITIONS PRECEDENT TO THE CLOSING BY BUYER.

The obligation of Buyer to consummate this Agreement is subject to the
fulfillment (or waiver by Buyer) at or prior to the Closing Date of the
conditions set forth below.

8.1 Representations and Warranties. Each of the representations and warranties
of Seller contained in this Agreement are true and correct as of the date
hereof, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
were true and correct on and as of such earlier date). Each of the
representations and warranties of Seller that are qualified as to materiality
and the representations and warranties contained in Section 5.1 (Organization,
Good Standing, Corporate Power and Qualification), Section 5.2 (Due
Authorization, Binding Effect), Section 5.3 (No Conflicts), Section 5.8 (Assets
Generally), and Section 6.6 (No Finder’s Fees) shall be true and correct, and
all other representations and warranties of Seller shall be true and correct in
all material respects, in each case, as of the Closing Date as though made on
the Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, on and as of
such earlier date).

8.2 Performance. Seller shall have complied in all material respects with all
covenants and agreements to be performed or satisfied by Seller on or prior to
the Closing Date.

8.3 No Action. No action or proceeding shall have been instituted, pending or
threatened before any Governmental Authority, or instituted, pending or
threatened in writing by any Person, whether brought against Buyer or Seller,
pertaining to the purchase by Buyer of the Assets, and no order shall have been
issued by any Governmental Authority which would be reasonably expected to
prevent, materially delay or make illegal the consummation of such purchase or
would have, or be reasonably expected to have, any Material Adverse Effect.

8.4 Material Adverse Effect. No Material Adverse Effect shall have occurred.

8.5 Certificates. Buyer shall have received (a) a certificate executed by a duly
authorized officer of Seller, dated as of the Closing Date and reasonably
satisfactory in form and substance to Buyer, certifying that the conditions set
forth in Section 8.1, Section 8.2, Section 8.3, Section 8.4, Section 8.6 and
Section 8.7 have been satisfied; (b) a certificate of the Secretary of State of
the State of Delaware as to the legal existence and good standing of the Seller;
and (c) a certificate signed by the Secretary of the Seller attesting to the
incumbency of the Seller’s officers, the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement, and the
authenticity and continuing validity of the organizational documents of the
Seller.

 

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8.6 Governmental Approvals. Approvals from any Governmental Authority necessary
for consummation of the transactions contemplated by this Agreement shall have
been timely obtained.

8.7 Consents Obtained. Each of the approvals or consents required to be obtained
by Seller in connection with the transactions contemplated hereby and for the
assumption by or assignment to Buyer or the Designated Purchaser, as applicable,
of the Assets, including, without limitation, (a) all of the approvals and
consents set forth on Schedule 8.7(a) (“Required Consents”), and (b) no fewer
than 50% of the approvals and consents set forth on Schedule 8.7(b) (“Other
Consents”), shall have been obtained and delivered to Buyer.

8.8 Bill of Sale; Assumption Agreement; IP Assignment Agreement. Seller shall
have executed and delivered the Bill of Sale, the Assumption Agreement, the IP
Assignment Agreement and any other instruments of transfer reasonably requested
by Buyer to consummate and make effective the transactions contemplated by this
Agreement, including without limitation such instrument(s) of transfer
reasonably requested by Buyer to record transfer of the following marks to Buyer
effective as of Closing: “IMAGEKIND” Australian registration number 1187683
dated February 26, 2008, and “IMAGEKIND” EU registration number 006076319 dated
September 25, 2008.

8.9 Transition Services Agreement. Seller shall have executed and delivered the
Transition Services Agreement to Buyer, and it shall be in full force and effect
as to Seller as of the Closing.

8.10 Commercial Agreement. Seller shall have executed and delivered the
Commercial Agreement to Buyer, and it shall be in full force and effect as to
Seller as of the Closing.

8.11 Escrow Agreement. Seller shall have executed and delivered the Escrow
Agreement to Buyer, and it shall be in full force and effect as to Seller as of
the Closing.

8.12 Termination of Employment; Waiver of Rights. Seller shall have terminated
each Transferred Employee in accordance with Section 7.2, and Seller shall have
waived all of its rights under any agreements Seller may have with such
employees, including any duty of confidentiality owed to Seller.

8.13 Approval of Documentation. Seller shall have delivered such other
certificates, instruments and other documents as Buyer may reasonably request to
consummate the transactions contemplated by this Agreement and the Related
Agreements.

8.14 Transferred Employees. At least eighty percent (80%) of the Target
Employees shall have accepted employment with the Buyer or one of its
Affiliates. The employment letters entered into between Buyer and each of Gavin
Jocius, Mike Keyes, Nicki Velasco, Jason Sloan and Elijah Taylor on or prior to
the date hereof shall remain in full force and effect and shall not have been
amended, cancelled, terminated, revoked or rescinded.

 

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8.15 Contemporaneous Delivery and Effectiveness. All acts and deliveries
prescribed by this Section 8, regardless of chronological sequence, will be
deemed to occur simultaneously and contemporaneously on the occurrence of the
last act or delivery, and none of such acts or deliveries will be effective
until the last of the same has occurred

SECTION 9 CONDITIONS PRECEDENT TO THE CLOSING BY SELLER.

The obligation of Seller to consummate this Agreement is subject to the
fulfillment (or waiver by Seller) at or prior to the Closing Date of the
conditions set forth below.

9.1 Representations and Warranties. Each of the representations and warranties
of Buyer contained in this Agreement are true and correct as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date). Each of the representations and
warranties of Buyer contained in this Agreement that are qualified as to
materiality and the representations and warranties contained in Section 6.1
(Organization, Good Standing, Corporate Power, Qualification) and Section 6.2
(Due Authorization, Binding Effect) shall be true and correct, and all other
representations and warranties of Buyer shall be true and correct in all
material respects, in each case, as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on and as of such
earlier date).

9.2 Performance. Buyer shall have performed or complied in all material respects
with all covenants and agreements to be performed or satisfied by Buyer prior to
the Closing Date.

9.3 Consideration. On the Closing Date, Buyer shall deliver, or cause to be
delivered, the Purchase Price to the Seller in accordance with Section 3.1.

9.4 Certificate. Seller shall have received a certificate executed by a duly
authorized officer of Buyer, dated as of the Closing Date and reasonably
satisfactory in form and substance to Seller, certifying that the conditions set
forth in Section 9.1 and Section 9.2 have been satisfied; (b) a certificate of
the Secretary of State of the State of Delaware as to the legal existence and
good standing of the Buyer; and (c) a certificate signed by the Secretary of the
Buyer attesting to the incumbency of the Buyer’s officers and the authenticity
of the resolutions authorizing the transactions contemplated by this Agreement,
and the authenticity and continuing validity of the organizational documents of
the Buyer.

9.5 No Actions. No action or proceeding shall have been instituted, pending or
threatened before any Governmental Authority, or instituted, pending or
threatened by any Person, whether brought against Buyer or Seller, pertaining to
the purchase by Buyer of the Assets, and no order shall have been issued by any
Governmental Authority which would reasonably be expected to prevent, materially
delay or make illegal the consummation of such purchase.

 

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9.6 Transition Services Agreement. Buyer shall have executed and delivered the
Transition Services Agreement to Seller, and it shall be in full force and
effect as to Buyer as of the Closing.

9.7 Commercial Agreement. Buyer shall have executed and delivered the Commercial
Agreement to Seller, and it shall be in full force and effect as to Buyer as of
the Closing.

9.8 Escrow Agreement. Buyer shall have executed and delivered the Escrow
Agreement to Seller, and it shall be in full force and effect as to Buyer as of
the Closing.

9.9 Approval of Documentation. Buyer shall have delivered such other
certificates, instruments and other documents as Seller may reasonably request
to consummate the transactions contemplated by this Agreement and the Related
Agreements.

9.10 Contemporaneous Delivery and Effectiveness. All acts and deliveries
prescribed by this Section 9, regardless of chronological sequence, will be
deemed to occur simultaneously and contemporaneously on the occurrence of the
last act or delivery, and none of such acts or deliveries will be effective
until the last of the same has occurred.

SECTION 10 POST-CLOSING INDEMNIFICATION.

10.1 Survival of Representations and Warranties and Related Indemnification
Rights. The representations and warranties of Seller and Buyer contained in this
Agreement, or in any certificate or other instrument delivered pursuant to this
Agreement, and the parties’ right to indemnification hereunder in respect of any
breaches of or inaccuracies in any such representations and warranties, shall
survive the Closing and continue until 5:00 p.m., California time, on the date
that is the fifteen (15) month anniversary of the Closing Date; provided, that
indemnification obligations with respect to the representations and warranties
contained in (a) Section 5.1 (Organization, Good Standing, Corporate Power and
Qualification), Section 5.2 (Due Authorization, Binding Effect), Section 5.3 (No
Conflicts), Section 5.8 (Assets Generally), Section 6.6 (No Finder’s Fees),
Section 6.1 (Organization, Good Standing, Corporate Power and Qualification) and
Section 6.2 (Due Authorization, Binding Effect) (collectively, the “Fundamental
Representations”) shall survive indefinitely; and (b) Section 5.11 (Employee
Matters), Section 5.12 (Taxes), and Section 5.18 (Environmental Compliance)
shall survive until sixty (60) days after the expiration of the applicable
statute of limitations (plus extensions for tolling of such statutes). Any
willful or intentional misrepresentation or fraud (each a “Fraudulent Breach”
and collectively “Fraudulent Breaches”) shall survive indefinitely. In the event
notice of any claim for indemnification under Section 10.2 hereof has been given
within the applicable survival period, such claim shall survive until such time
as there is a Final Determination with respect to such claim. The parties
acknowledge that the time periods set forth in this Section 10.1 and elsewhere
in this Agreement for the assertion of claims and notices under this Agreement
are the result of arms’-length negotiation among the parties and that they
intend for the time periods to be enforced as agreed by the parties. The parties
further acknowledge that the time periods set forth in this Section 10.1 and
elsewhere in the Agreement may be shorter than otherwise provided by Legal
Requirement.

 

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10.2 Indemnification.

(a) By Seller. Subject to Section 10.2(c), Seller shall defend, indemnify and
hold harmless Buyer and its Representatives (the “Buyer Indemnified Parties”)
from, against and in respect of any loss, cost, charge, expense, Liability,
claim, demand, action, suit, proceeding, payment, judgment, settlement,
assessment, deficiency, tax, interest, penalty or damages (including reasonable
fees and disbursements of counsel and accountants and other reasonable costs and
expenses incident to any actual or threatened claim, suit, action or proceeding
(each, an “Action”)) (collectively, the “Damages”), imposed on, sustained,
incurred or suffered by any of the Buyer Indemnified Parties, whether in respect
of third-party claims, claims between the parties hereto, or otherwise, directly
or indirectly relating to or arising out of (i) any breach or inaccuracy of
Seller’s representations and warranties under this Agreement or in any Related
Agreements, excluding any Fraudulent Breach which shall be governed by
Section 10.2(a)(iii), (ii) any breach of any covenant or agreement of Seller
contained in this Agreement or in any Related Agreement that is to be performed
prior to the Closing, and/or (iii) any Fraudulent Breach. In addition, Seller
shall defend, indemnify, and hold harmless the Buyer Indemnified Parties,
without limitation as to amount, duration or any other potential limitation,
from and against any Damages imposed on, sustained, incurred or suffered by any
of the Buyer Indemnified Parties, whether in respect of third-party claims,
claims between the parties hereto, or otherwise, directly or indirectly relating
to or arising out of (x) any breach of any covenant or agreement of Seller
contained in this Agreement or any Related Agreement that is to be performed as
of (e.g., conveyance and delivery of the Assets at the Closing pursuant hereto)
or after the Closing and (y) any and all (1) Excluded Assets and Excluded
Liabilities and (2) Taxes (or the non-payment thereof) of the Seller for all
taxable periods ending on or before the Closing Date, Taxes that are the
responsibility of the Seller pursuant to Section 3.2, and any and all Taxes of
any Person (other than Seller) imposed on Seller as a transferee or successor,
by contract or pursuant to any Legal Requirement, which Taxes relate to an event
or transaction occurring before the Closing.

(b) By Buyer. Subject to Section 10.2(c), Buyer shall defend, indemnify and hold
harmless Seller and its Representatives (the “Seller Indemnified Parties”) from
and against any Damages imposed on, sustained, incurred or suffered by any of
Seller Indemnified Parties, whether in respect of third-party claims, claims
between the parties hereto, or otherwise, directly or indirectly relating to or
arising out of (i) any breach or inaccuracy of Buyer’s representations and
warranties under this Agreement or in any Related Agreements, excluding any
Fraudulent Breach which shall be governed by Section 10.2(b)(iii), (ii) any
breach of any covenant or agreement of Buyer contained in this Agreement or any
Related Agreement that is to be performed prior to the Closing, and/or (iii) any
Fraudulent Breach. In addition, Buyer shall defend, indemnify and hold harmless
the Seller Indemnified Parties, without limitation as to amount, duration or any
other potential limitation, for and against any Damages imposed on, sustained,
incurred or suffered by any of the Seller Indemnified Parties, whether in
respect of third-party claims, claims between the parties hereto, or otherwise,
directly or indirectly relating to or arising out of (x) any breach of any
covenant or agreement of Buyer contained in this Agreement or any Related
Agreement that is to be performed as of (e.g., payment of the Purchase Price at
the Closing pursuant hereto) or after the Closing and (y) any and all Assumed
Liabilities.

 

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(c) Limitations on Indemnification Liability.

(i) Other than rights to specific performance and injunctive relief with respect
to a party’s covenants and agreements under this Agreement or in the event of a
Fraudulent Breach, the indemnification provided under Section 10.2 shall be the
sole and exclusive remedy of the parties and any other Persons claiming by or
through any party (including the Indemnified Parties) with respect to this
Agreement or any Related Agreement, including any misrepresentation or
inaccuracy in, or breach of, any representations or warranties, or any breach or
failure in performance prior to, on or after the Closing of any covenants or
agreements, made by the other parties in this Agreement, any Related Agreements,
or in any schedule or exhibit hereto or thereto or any document delivered
pursuant to this Agreement, and each party hereby waives, to the full extent
that it may do so, any other rights or remedies that may arise under any
applicable Legal Requirements.

(ii) Notwithstanding any provision to the contrary contained in this Agreement,
but subject to Section 10.2(c)(iv), the liability of Seller with respect to all
indemnification claims under Section 10.2(a)(i) (excluding claims relating to
any breach or inaccuracy of a Fundamental Representation) shall be limited to an
amount equal to twelve percent (12%) of the Purchase Price in the aggregate.

(iii) Notwithstanding any provision to the contrary contained in this Agreement,
but subject to Section 10.2(c)(iv), the liability of Buyer with respect to all
indemnification claims under Section 10.2(b)(i) (excluding claims relating to
any breach or inaccuracy of a Fundamental Representation) shall be limited to an
amount equal to twelve percent (12%) of the Purchase Price in the aggregate.

(iv) Section 10.2(c)(ii) and (iii) shall not apply to:

 

  (A) claims for indemnification under Section 10.2(a)(i) or 10.2(b)(i) of this
Agreement based on any breach or inaccuracy of a Fundamental Representation, the
liability for each of which shall be limited to the Purchase Price;

 

  (B) claims for indemnification under Section 10.2(a)(ii) or 10.2(b)(ii) of
this Agreement, the liability for each of which shall be limited to the Purchase
Price;

 

  (C) claims for indemnification under Section 10.2(a)(iii) or 10.2(b)(iii) of
this Agreement, the liability for each of which shall not be limited hereunder;
or

 

  (D)

claims for indemnification under the last sentence of Section 10.2(a) of this
Agreement with respect to Excluded Assets or Excluded Liabilities, or claims for
indemnification under the last sentence of Section 10.2(b) of this Agreement
with respect to Assumed Liabilities, the liability for each of which shall not
be limited hereunder. For purposes of this subsection 10.2(c)(iv)(D),

 

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  “Excluded Liabilities” shall not include subsection 2.4(d) with respect to
violation of Legal Requirement or environmental matters or subsection 2.4(a).

(d) Notwithstanding anything contained herein to the contrary, following a final
determination that a breach of a representation or warranty has occurred, for
purposes of determining the amount of any Damages that are the subject matter of
a claim for indemnification hereunder, each representation and warranty in this
Agreement and each certificate delivered pursuant hereto shall be read without
regard and without giving effect to the term “material” or “Material Adverse
Effect” or similar phrases contained in such representation or warranty, which
has the effect of making such representation or warranty less restrictive (as if
such word were deleted from such representation and warranty).

(e) Claim Notice. In the event an Indemnified Party shall have a claim against
an Indemnifying Party, the Indemnified Party shall deliver a written notice of
such claim (a “Claim Notice”) with reasonable promptness to the Indemnifying
Party, and not more than 30 days after having received original notice of the
claim. Such Claim Notice shall set forth the estimated amount of the Damages
(which estimate shall not be conclusive of the final amount of such claim) (to
the extent reasonably available at such time) for which the Indemnified Party is
seeking indemnification hereunder (the “Claimed Amount”) and a summary in
reasonable detail of the basis for the claim (to the extent reasonably available
at such time). The failure to deliver a Claim Notice within such 30-day period
shall not affect whether the Indemnifying Parties are liable for indemnification
hereunder unless and only to the extent that the Indemnifying Party is
materially prejudiced thereby.

(f) Third Party Claims.

(i) Subject to the provisions of Sections 10.2(f)(ii) and 10.2(f)(iv) below, in
the event any claim for indemnification hereunder results from or in connection
with any claim or legal proceeding by a third party (a “Third Party Claim”), the
Indemnifying Parties at the sole cost and expense of the Indemnifying Parties,
shall have the right to control the defense and settlement of such claim if the
Indemnifying Parties give notice of the intention to do so to the Indemnified
Parties within thirty (30) days (or such lesser number of days set forth in the
Claim Notice as may be required by any court proceeding) after the Indemnifying
Parties receive such Claim Notice, subject to the limitations below, and shall
have the right to select and retain legal counsel, which counsel shall be
reasonably satisfactory to the Indemnified Party, to defend or settle any claim
or demand. The Indemnified Party shall have the right to retain its own counsel,
at its sole expense, to monitor the defense or settlement of any claim or
demand.

(ii) The Indemnifying Party shall not have the right to assume control of such
defense and shall pay the fees and expenses of counsel retained by the
Indemnified Party, if the claim with respect to which the Indemnifying Party
seeks to assume control (A) seeks non-monetary relief, (B) involves criminal or
quasi-criminal allegations, (C) involves any claim made by any customer or
supplier of the Business, other than a customer or supplier that is also a
customer or supplier to the Indemnifying Party, or (D) involves a claim if, as a
result of the application of the provisions of Section 10.2(c)(ii), less than
100% of the Damages reasonably expected to result from the Third Party Claim
would be indemnifiable hereunder.

 

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(iii) By assuming the defense of a claim or demand, the Indemnifying Party shall
be deemed to have conclusively acknowledged its obligation to indemnify the
Indemnified Party with respect to such claim or demand to the extent required
pursuant to this Agreement. In the event that the Indemnifying Party fails to
give notice of its intention to control the defense and settlement of any Third
Party Claim within the period prescribed in Section 10.2(f)(i), or affirmatively
notifies the Indemnified Party in a writing delivered within such period that it
does not desire to control the defense and settlement of any Third Party Claim,
or the Indemnifying Party fails to diligently pursue the defense of such assumed
claim or demand, the Indemnified Party shall conduct or reassume the defense of
and shall have the right, subject to Section 10.2(f)(iv), to settle any such
Third Party Claim (and the costs and expenses incurred by the Indemnified Party
in connection with such defense or settlement shall be included in the Damages
for which the Indemnified Party may seek indemnification pursuant to a claim
made hereunder). The Indemnifying Parties shall have the right to receive copies
of all pleadings, notices and communications with respect to such Third Party
Claim and shall have the right to retain its own counsel, at its sole expense,
to monitor the defense or settlement of any such claim or demand.

(iv) The party conducting the defense of a claim shall only have the right to
settle and compromise any claim or demand if (A) the other party to this
Agreement provides its prior written consent to such settlement or compromise,
which consent shall not be unreasonably withheld or delayed; or (B) other than
with respect to a claim assumed by an Indemnified Party pursuant to
Section 10.2(f)(ii), upon prior written notice to the other party so long as
such settlement or compromise (1) expressly and unconditionally releases the
other party from all liabilities and obligations with respect to such claim or
demand and (2) will not impose any injunctive or other equitable relief against
the other party.

(g) Response to Claim Notice. Within fifteen (15) calendar days after delivery
of a Claim Notice, the Indemnifying Party shall deliver to the Indemnified Party
a written response, in which the Indemnifying Party shall either: (i) agree that
the Indemnified Party is entitled to receive the full Claimed Amount, (ii) agree
that the Indemnified Party is entitled to receive a portion of the Claimed
Amount (an “Agreed Amount”), or (iii) dispute that the Indemnified Party is
entitled to receive any of the Claimed Amount, specifying in reasonable detail
the basis for such dispute. If the Indemnifying Party does not respond within
such 15-day period, it will be deemed to have conceded that the Indemnified
Party is entitled to receive the Claimed Amount. If the Indemnifying Party
delivers a response in accordance with Section 10.2(g)(i), such response shall
be deemed a Final Determination for the purposes of Section 10.2(i) with respect
to the Claimed Amount. If the Indemnifying Party delivers a response in
accordance with Section 10.2(g)(ii), such response shall be deemed a Final
Determination for the purposes of Section 10.2(j) with respect to the Agreed
Amount.

(h) Dispute. During the twenty (20) calendar day period following the delivery
of a response from the Indemnifying Party in accordance with Section 10.2(g)(ii)
(with respect to the

 

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difference between the Claimed Amount and the Agreed Amount) or
Section 10.2(g)(iii) (with respect to the Claimed Amount) (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 twenty
(20) calendar day period or any other period as agreed upon between the parties
in writing, the Indemnifying Party and the Indemnified Party shall submit the
Dispute to binding arbitration, and the provisions of Section 10.3 shall become
effective with respect to such Dispute.

(i) Payment of Indemnification Obligation. Upon a final determination of an
indemnification claim made by the Indemnified Party, whether such final
determination is by reason of (a) a failure of the Indemnifying Party to respond
to a Claim Notice in accordance with Section 10.2(g), (b) the Indemnifying Party
delivering a response in accordance with Section 10.2(g)(i) or
Section 10.2(g)(ii), (c) the resolution of a Dispute in accordance with
Section 10.2(h), (d) the mutual agreement of the Indemnified Party and the
Indemnifying Party, (e) the final decision of the arbitrator(s) in accordance
with Section 10.3, or (f) a final judgment of a court of competent jurisdiction
that is either not subject to any further appeals or the time for giving notice
to take such appeals has lapsed and no such notice was filed (each a “Final
Determination”), then the amount of the Damages stated in, or arising from, such
Final Determination shall be paid promptly, but in no event more than five
(5) Business Days after the date of such Final Determination, by the
Indemnifying Party. If the Indemnifying Party is Buyer, payment of damages shall
be by wire transfer of immediately available funds. If the Indemnifying Party is
the Seller, payment of Damages shall be first from the Escrow Amount and second,
if the Escrow Amount is insufficient, by wire transfer of immediately available
funds.

10.3 Arbitration.

(a) Any Dispute arising out of or in connection with this Agreement or the
Related Agreements, or the breach, termination or invalidity thereof (including
any controversy or claim sounding in tort), shall be finally settled by
arbitration in accordance with the rules of arbitration then in effect of the
Judicial Arbitration and Mediation Services, Inc. Any party hereto may initiate
a binding arbitration proceeding for the final resolution of any Dispute by
delivering a notice to the other party hereto, describing the Dispute to be
arbitrated. The place of arbitration shall be in Delaware.

(b) The arbitration shall be conducted before a single arbitrator jointly
selected by the parties. If the parties are unable to agree upon the arbitrator
within ten (10) days from receipt of the notice with request for arbitration,
the Indemnifying Party and Indemnified Party each shall choose one arbitrator
and the two arbitrators so selected shall select a third arbitrator. The third
arbitrator shall conduct the arbitration.

(c) Notwithstanding any contrary provision of the rules of arbitration then in
effect of the Judicial Arbitration and Mediation Services, Inc., the parties to
the arbitration shall be entitled to undertake discovery in the arbitration as
determined by the arbitrator(s) at his or her discretion; provided, that such
discovery shall not exceed more than (i) 10 witness depositions, plus the
depositions of any expert designated by the other party, (ii) 25
interrogatories, and (iii) 30 document requests. The arbitrator(s) shall have
authority to hear and rule upon all discovery motions.

 

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(d) Unless otherwise required by law (including securities laws and the rules of
The NASDAQ Stock Market LLC), the parties to this Agreement undertake and agree
that all arbitral proceedings conducted with reference to this arbitration
clause will be kept strictly confidential. This confidentiality undertaking
shall cover all information disclosed in the course of such arbitral
proceedings, as well as any decision or award that is made or declared during
the proceedings. Subject to the limitations described in this Section 10.3(d),
information covered by the confidentiality undertaking in this Section 10.3(d)
may not, in any form, be disclosed by either party to a third party without the
prior written consent of the other party.

10.4 Set-Off. If the Seller shall fail to pay any amounts that it is obligated
to pay to the Buyer (or any Buyer Indemnified Party) under this Agreement, the
Transition Services Agreement, or the Commercial Agreement, including, without
limitation, any amounts that it is obligated to pay pursuant to the
indemnification obligations set forth in this Section 10, then Buyer or any of
its Affiliates may, in addition to any other rights and remedies that may be
available, set off all or any portion of such amounts against any amounts due
and owing from the Buyer or any of its Affiliates to the Seller, including,
without limitation, the Escrow Amount. Any amounts so set off shall be deemed to
have been paid to the Seller as of the date on which written demand for payment
of the amount in question was given to the Seller. For the avoidance of doubt,
the right of set off hereunder shall only apply to (a) amounts that the Seller
expressly agrees are payable to the Buyer or a Buyer Indemnified Party, and/or
(b) or amounts that are finally determined to be payable to the Buyer or a Buyer
Indemnified Party (whether by mutual agreement, arbitration, judicial decision
or otherwise).

SECTION 11 POST-CLOSING COVENANTS.

11.1 Employee Non-Solicitation. At all times until the third anniversary of the
Closing Date, Seller shall not, and shall cause its subsidiaries and controlled
Affiliates not to, directly or indirectly, (i) hire, solicit to employ, or
solicit to provide services to Seller or any of its subsidiaries or controlled
Affiliates, (x) any Transferred Employee who is then currently employed by or
who was employed within the then previous 6 months by Buyer or an Affiliate of
Buyer, or (y) any Person with whom Seller had contact in connection with Buyer’s
investigation of the Business or the Business or negotiation of this Agreement
who is then currently employed by or who was employed within the then previous 6
months by Buyer or an Affiliate of Buyer, or (ii) induce or attempt to induce
(x) any Transferred Employee who is then currently employed by or who was
employed within the then previous 6 months by Buyer or an Affiliate of Buyer, or
(y) any Person with whom Seller had contact in connection with Buyer’s
investigation of the Business or the Business or negotiation of this Agreement
who is then currently employed by or who was employed within the then previous 6
months by Buyer or an Affiliate of Buyer, to terminate his or her employment or
association with Buyer or its Affiliates. For purposes of this Section 11.1, the
term “solicit” shall not include generalized searches for employees through
media advertisements, employment firms or otherwise that are not focused on or
directed to (x) any Transferred Employee who is then currently employed by or
who was employed within the then previous 6 months by Buyer or an Affiliate of
Buyer, or (y) any Person who participated in the investigation of the Business
or the Business or negotiation of this

 

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Agreement who is then currently employed by or who was employed within the then
previous 6 months by Buyer or an Affiliate of Buyer. For purposes of this
Section 11.1, each 6 month period set forth above is agreed to be a 12 month
period with respect to each of Gavin Jocius, Mike Keyes, Nicki Velasco, Jason
Sloan and Elijah Taylor

11.2 Non-Competition. During the period beginning on the Closing Date and ending
on the third anniversary of the Closing Date, the Seller covenants and agrees
not to, and shall cause its subsidiaries and controlled Affiliates not to,
directly or indirectly and anywhere in the United States or Canada, other than
pursuant to the transactions expressly contemplated or permitted by the
Commercial Agreement:

(a) conduct, manage, operate, or engage in, or have an ownership interest in any
business or enterprise engaged in, whether as principal, manager, agent,
consultant, equity holder, partner, investor, lender or member or in any other
capacity, any business or enterprise (or subsidiary or division thereof) that
markets, sells, manufactures or fulfills products or services that transform
photographs and images into canvas works of art; or

(b) solicit or endeavor to entice away from the Buyer or the Business, or
endeavor to reduce the business conducted with the Buyer or the Business by, any
Person who is, or was within the one-year period prior hereto, a customer,
licensee, or client of, supplier, vendor, licensor, or service provider to the
Business.

11.3 Certain Acknowledgements.

(a) Seller acknowledges and agrees that Buyer may be irreparably harmed if
Seller or its subsidiaries or Affiliates breach the covenants contained in this
Section 11 (the “Restrictive Covenants”) and that any such breach would result
in a substantial loss of goodwill by Buyer. Seller further acknowledges and
agrees that the Restrictive Covenants and agreements set forth in this
Section 11 were a material inducement to Buyer to enter into this Agreement and
to perform its obligations hereunder, and that Buyer would not obtain the full
benefit of the bargain set forth in this Agreement as specifically negotiated by
the parties hereto if Seller breached the provisions of this Section 11. Seller
acknowledges that the restrictions set forth in this Section 11 are reasonable
and necessary to protect the goodwill of the Business being purchased by Buyer
hereunder. The parties intend that these Restrictive Covenants shall be deemed
to be a series of separate covenants, one for each and every state of the United
States of America and province of Canada. If, at the time of enforcement of the
Restrictive Covenants, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed and directed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by
applicable Legal Requirements.

(b) Seller acknowledges and agrees that money damages would not provide an
adequate remedy for any breach of this Section 11 and that Buyer shall, whether
or not it is pursuing any potential remedies at law, be entitled to equitable
relief in the form of preliminary and permanent injunctions without bond or
other security upon any actual or threatened breach of these Restrictive
Covenants. If either Seller or a subsidiary or Affiliate of Seller breaches, or

 

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threatens to commit a breach of, any of the Restrictive Covenants, Buyer shall,
whether or not it is pursuing any potential remedies at law, have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to Buyer at law or in
equity:

(i) the right and remedy to have the Restrictive Covenants specifically enforced
by any court of competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause irreparable injury to
Buyer and that money damages would not provide an adequate remedy; and

(ii) the right and remedy to require Seller or such subsidiary or controlled
Affiliate to account for and pay over to Buyer any profits, monies, accruals,
increments or other benefits derived or received by such Person as the result of
any transactions constituting a breach of the Restrictive Covenants.

11.4 Outstanding Consents. During the Transition Period Seller shall use
commercially reasonable efforts to secure, as promptly as practicable and at its
own expense, any consents, approvals, waivers and authorizations required in
connection with the transactions contemplated by this Agreement, including,
without limitation, all Required Consents and Other Consents, to the extent such
consents, approvals, waivers and authorizations were not obtained and delivered
to Buyer at or prior to the Closing.

11.5 Cooperation on Tax Matters. After the Closing, Seller and Buyer agree to
cooperate with each other in connection with any inquiry, audit, determination
or proceeding affecting the Liability of either of them for Taxes, and, in
connection with the determination of any such Liability, each of them shall make
available to each other within a reasonable amount of time, at no cost to the
requesting party, any documents, correspondence, reports, books and records and
any other materials bearing on such Tax inquiry, audit, examination, proceeding
or determination then in the possession of the requested party; provided that
each party shall be reimbursed for any reasonable out-of-pocket expenses it
incurs in assisting another party under this Section 11.5. Each party further
agrees, upon request, to use its commercially reasonable efforts to obtain any
certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed. The Seller agrees (i) to retain all books and records with respect
to Tax matters pertinent to the Business and the Assets relating to periods
ending on or prior to the Closing Date until the expiration of the statute of
limitations (and any extensions thereof) of the respective Tax periods and to
abide by all record retention agreements entered into with any Governmental
Authority, and (ii) not to destroy or otherwise dispose of any such books and
records without first offering in writing to surrender such books and records to
Buyer, and Buyer shall have 10 days after such offer to agree to take possession
thereof.

SECTION 12 TERMINATION.

12.1 Termination. This Agreement may be terminated, and the transactions
contemplated herein may be abandoned, at any time on or prior to the Closing
Date:

(a) with the mutual written consent of Seller and Buyer;

 

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(b) by Seller or Buyer, if the Closing shall not have taken place on or before
April 15, 2015 (the “Termination Date”); provided, that the right to terminate
this Agreement under this Section 12.1(b) shall not be available to (i) Seller
if the failure of Seller to fulfill any of its obligations under this Agreement
caused the failure of the Closing to occur on or before such date or (ii) Buyer
if the failure of Buyer to fulfill any of its obligations under this Agreement
caused the failure of the Closing to occur on or before such date;

(c) by Seller or Buyer if any permanent injunction or other order of a
Governmental Authority of competent authority preventing the consummation of the
Transaction shall have become final and non-appealable; provided that the party
seeking termination shall have used commercially reasonable efforts to remove
such injunction or order;

(d) by Seller or Buyer if there shall be any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the Transaction by any
Governmental Authority that would make consummation of the Transaction illegal;

(e) by Seller if any of the conditions set forth in Section 9 shall have become
incapable of fulfillment on or prior to the Termination Date and shall not have
been waived by Seller, unless the failure of such condition is the result of a
material breach of this Agreement or a representation, warranty or covenant by
Seller; or

(f) by Buyer if any of the conditions set forth in Section 8 shall have become
incapable of fulfillment on or prior to the Termination Date and shall not have
been waived by Buyer, unless the failure of such condition is the result of a
material breach of this Agreement or a representation, warranty or covenant by
Buyer.

In the event of termination by Seller or Buyer pursuant to this Section 12.1
(other than Section 12.1(a)), written notice thereof shall be given to the other
party.

12.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 12.1, all obligations of the parties hereunder shall terminate, except
for the obligations set forth in Section 7.6 (Publicity), Section 7.11 (Company
Sale), Section 13.1 (Notices), Section 13.2 (Expenses), Section 13.3
(Counterparts; Facsimile Signatures), Section 13.4 (Governing Law), Section 13.5
(Integration and Construction), Section 13.6 (Waivers and Amendments),
Section 13.8 (Successors and Assigns) and Section 13.9 (Severability) (and any
related definitional provisions set forth in Section 1) which shall survive the
termination of this Agreement, and except that no such termination shall relieve
any party from liability for any prior breach of this Agreement.

 

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SECTION 13 GENERAL PROVISIONS.

13.1 Notices. All notices, requests, consents, and other communications required
or permitted hereunder shall be in writing and shall be personally delivered,
mailed using first-class, registered, or certified mail, postage prepaid, faxed
or sent by electronic mail to the following addresses or to such other address
as the parties hereto may designate in writing:

Seller:

CafePress Inc.

6901 Riverport Drive

Louisville, Kentucky 40258

Attn: General Counsel

Email: rhensley@cafepress.com

with a copy to, which shall not constitute notice:

Pillsbury Winthrop Shaw Pittman LLP

2550 Hanover Street

Palo Alto, CA 94304

Attn: Jorge del Calvo, Esq.

Fax: (650) 233-4545

Email: jorge@pillsburylaw.com

Buyer:

Circle Graphics, Inc.

120 Ninth Avenue

Longmont, Colorado 80501

Attn: Chief Executive Officer

Email: acousin@circlegraphicsonline.com

with a copy to, which shall not constitute notice:

Foley & Lardner LLP

111 Huntington Avenue

Boston, Massachusetts 02199

Attn: Susan E. Pravda, Esq.

Email: spravda@foley.com

All such notices, requests, consents and other communications shall be deemed to
be properly given (a) if delivered personally to the address as provided in this
Section, upon delivery, (b) if delivered by facsimile transmission or electronic
mail to the facsimile number or email address as provided for in this
Section 13.1, upon delivery confirmation if sent during normal business hours of
the recipient; if not, then on the next Business Day, (c) if sent by registered
or certified mail, three (3) Business Days after the same has been deposited in
the mail, addressed and postage prepaid as set forth above and (d) if delivered
by overnight courier to the address as provided in this Section 13.1, on the
earlier of the first Business Day following the date sent by such overnight
courier or upon receipt (in each case regardless of whether such notice, request
or other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 13.1). Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.

 

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13.2 Expenses. Each party will pay for its own legal, accounting, investment
banking or valuation services, and any and all other costs and expenses incurred
with respect to the transactions contemplated hereby and the negotiation and
execution of this Agreement.

13.3 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which when executed by the parties hereto and
delivered shall be deemed to be an original, and all such counterparts taken
together shall be deemed to be but one and the same instrument. This Agreement
may be executed and delivered by facsimile or .PDF signature, and upon such
delivery the facsimile signature or .PDF signature will be deemed to have the
same effect as if the original signature had been delivered to the other party.

13.4 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the state of Delaware,
excluding that body of law pertaining to conflicts of laws.

13.5 Integration and Construction. This Agreement, the Confidentiality Agreement
and the Related Agreements (including in each case all schedules and exhibits
hereto or thereto) shall comprise the complete and integrated agreement of the
parties hereto and shall supersede all prior agreements, written or oral, on the
subject matter hereof. Upon the Closing, the Confidentiality Agreement shall
terminate and be of no further force and effect. Any captions to, or headings
of, the sections of this Agreement are solely for the convenience of the parties
hereto, are not a part of this Agreement, and shall not be used for the
interpretation of this Agreement. Where the context so requires, words used in
any gender shall be deemed to include other genders, and the singular number
shall include the plural and vice versa. Unless the context requires otherwise,
wherever the word “include,” “includes,” or “including” is used in this
Agreement, it shall be deemed followed by the words “without limitation.” The
Recitals appearing at the beginning of this Agreement, and the Exhibits and
Schedules attached hereto, are hereby incorporated into and are deemed to
constitute a part of the operative text of this Agreement. Each party hereto and
such party’s counsel have had the full opportunity to review and comment upon,
and have reviewed and commented upon, this Agreement, and any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement or any
Exhibits or Schedules attached hereto.

13.6 Waivers and Amendments. No amendment, modification, supplement or waiver of
any provision of this Agreement, and no consent to any departure therefrom, may
in any event be effective unless in writing and signed by the party or parties
affected thereby, and then only in the specific instance and for the specific
purpose given. No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

13.7 Injunctive Relief. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
each party shall be entitled to enforce the terms of this Agreement by a decree
of specific performance without the necessity of proving the inadequacy of
monetary damages as a remedy and to obtain injunctive relief against any breach
or threatened breach, and each party agrees to waive any requirement to post any
bond in connection with obtaining such relief.

 

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13.8 Successors and Assigns. This Agreement may not be assigned, in whole or in
part, by any party hereto without the prior written consent of the other party;
provided, that prior to Closing, Buyer may, without the prior written consent of
Seller, assign all of its rights and obligations under this Agreement to any
Affiliate of Buyer (the “Designated Purchaser”). No assignment made in
accordance with this Section 13.8 shall be deemed valid unless the assignee
executes and delivers to the non-assigning party hereto a joinder agreement in a
form reasonably satisfactory to both the Buyer and the Seller, whereby the
assignee agrees to be bound by the terms and provisions of this Agreement,
assumes all of the obligations of the assignor hereunder and reaffirms the
representations and warranties contained herein. Any purported assignment in
violation of this Section 13.8 is void. Subject to the foregoing, this Agreement
and the provisions hereof shall be binding upon and inure to the benefit of each
of the parties and their successors and assigns.

13.9 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision.

13.10 Time of Essence. Time is of the essence of each and every term, condition,
obligation, and provision hereof.

13.11 No Third Party Beneficiaries. Except as expressly provided by this
Agreement, nothing in this Agreement, express or implied, is intended to or
shall (a) confer on any Person other than the parties to this Agreement and
their respective permitted successors or assigns any rights (including, without
limitation, third party beneficiary rights), remedies, obligations or
liabilities under or by reason of this Agreement or (b) constitute the parties
to this Agreement as partners or as participants in a joint venture. Except as
expressly provided by this Agreement, this Agreement shall not provide third
parties with any remedy, claim, liability, reimbursement, cause of action or
other right in excess of those existing without reference to the terms of this
Agreement.

[Remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
has caused this Agreement to be executed on its behalf by a representative duly
authorized, all as of the date first above set forth.

 

BUYER: CIRCLE GRAPHICS, INC. a Delaware corporation By:

/s/ Andrew Cousin

Name: ANDREW COUSIN Title: CEO SELLER: CAFEPRESS INC. a Delaware corporation By:

 

Name: Title:

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
has caused this Agreement to be executed on its behalf by a representative duly
authorized, all as of the date first above set forth.

 

BUYER: CIRCLE GRAPHICS, INC. a Delaware corporation By:

 

Name: Title: SELLER: CAFEPRESS INC. a Delaware corporation By:

/s/ Garett Jackson

Name: Garett Jackson Title: Chief Financial Officer

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EXHIBIT A

TRANSITION SERVICES AGREEMENT

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TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”) is made and entered into
as of                     , 2015 (the “Closing Date”), by and between Circle
Graphics, Inc., a Delaware corporation (“Buyer”), and CafePress Inc., a Delaware
corporation (“Seller”). Capitalized terms set forth herein but not otherwise
defined herein shall have the meanings assigned to them in the Asset Purchase
Agreement (as defined below).

RECITALS

WHEREAS, Buyer and Seller have entered into an Asset Purchase Agreement, dated
as of February 11, 2015 (the “Asset Purchase Agreement”), and the execution and
delivery of this Agreement is a condition to consummation of the transactions
contemplated by the Asset Purchase Agreement; and

WHEREAS, in connection with and after the transactions contemplated by the Asset
Purchase Agreement, the Buyer and Seller desire that the Seller provide certain
transition services relating to the Business on the terms and conditions set
forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, each intending to be legally bound, agree as
follows:

1. Transition Services.

(a) Services. From and after the Closing Date, during the term of this Agreement
as set forth in Section 8 (the “Transition Period”), and subject to the terms
and conditions set forth herein, Seller shall provide, or cause one or more of
its Affiliates or Subcontractors to provide (the providing party, the “Providing
Party”), to Buyer or one or more of its Affiliates (the receiving party, the
“Receiving Party”), in accordance with the standards set forth in Section 12
below, the services specified on Annex A hereto (each of the categories
described on Annex A and each other service required hereunder, a “Service” and,
collectively, the “Services”). The Services provided by Seller hereunder shall
only be made available for, and Buyer shall only be entitled to utilize such
Services for the benefit of the Business. With respect to use of the Seller’s
EZPrints builder application as part of the Services provided by Seller
hereunder, such use is hereby permitted and provided subject to a nonassignable,
nontransferable, nonexclusive, non-sublicensable, limited license solely as
contemplated by, and subject to the terms and conditions of, this Agreement.

(b) Fees. In consideration for the performance of the Services in accordance
with this Agreement, Buyer shall pay the fee set forth on Annex A for each
service; provided, however, that in the event any fees for Services are not set
forth on Annex A, Buyer shall pay an amount equal to the Cost Recovery Basis for
such Service. As used herein, “Cost Recovery Basis” means the aggregate sum of
all expenses, costs, fees, penalties and assessments directly related to the
provision of Services to the Receiving Party by the Providing Party (other than
such expenses, costs, fees, penalties and assessments resulting from a breach of
(i) this Agreement or any other agreement related to the Services,
(ii) applicable Legal Requirements, or (iii) the standards set forth in
Section 12 below, in each case, by the Providing Party).

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(c) Cooperation.

(i) The Parties shall cooperate and use commercially reasonable efforts to
obtain the consent of any licensors of Software or any other third party that
may be required in connection with the provision of any of the Services
hereunder. If any such third party requires a payment in order to make the
Services available to the Receiving Party hereunder, each Party shall promptly
notify the other Party of this additional cost and the Parties shall use all
reasonable best efforts to provide an alternative arrangement to achieve the
results intended (and the Parties shall cooperate with respect thereto). In any
such case, if the Parties are unable to agree upon an alternative arrangement,
each Party shall have the option to elect to terminate any of the Services
associated with the required consent. As of the date of this Agreement, neither
party expects that a third party will require payment in order to make the
Services available to the Receiving Party hereunder

(ii) Provided that Buyer is not in breach of its obligations set forth in
Section 7, prior to the termination of this Agreement, the Providing Party shall
cooperate with the Receiving Party as reasonably requested by the Receiving
Party to effect an orderly transition of the Services provided hereunder and
shall use commercially reasonable efforts to assist the Receiving Party to
complete the transition as promptly as practicable. In addition, the Providing
Party will facilitate and support the Receiving Party in the conversion of all
necessary systems from the Providing Party’s systems to the Receiving Party’s
systems, including support of the mapping and transferring of files. The Parties
agree to cooperate in good faith and to use their commercially reasonable
efforts to mutually develop a conversion plan to effect the orderly transition
of the Services from the Providing Party’s systems to the Receiving Party’s
systems. In connection therewith, the Parties will in good faith consider
modifications to the initial Transition Dates, and will negotiate in good faith
with respect to the cost, if any, of conversion services to be provided after
the final Transition Date.

2. Representatives. Buyer and Seller shall each designate one representative to
act as a contact person with respect to all issues relating to the provision of
Services under this Agreement. The initial Buyer representative shall be
             and the initial Seller representative shall be             . Each
representative’s contact information is set forth on Annex B hereto. A Party may
designate a replacement representative at any time upon notice to the other
Party in accordance with Section 18 below.

3. Limitation on Services. Except as set forth on Annex A, the Providing Party
shall have no obligation to upgrade, enhance or otherwise modify any computer
hardware, Software or network environment currently used in the Business or to
provide any support or maintenance services for any computer hardware, Software
or network environment that has been upgraded, enhanced or otherwise modified
from the computer hardware, Software or network environments that is currently
used in the Business.

 

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4. Additional Services. Upon the Receiving Party’s request for additional
transition services (“Additional Services”) that are necessary for the Receiving
Party to operate the Business in a manner similar to or compatible with its
existing businesses, policies, or practices, representatives of the Providing
Party and the Receiving Party will negotiate in good faith regarding amending
Annex A to include the Additional Services and the terms and conditions
(including, without limitation and if necessary, cost and extension of the
Transition Period) upon which such Additional Services will be provided. Any
such Additional Services shall be mutually agreed to and the fees thereof shall
be effective as of the date of execution of an amendment to this Agreement by
duly authorized representatives of the Parties hereto.

5. Subcontractors. The Providing Party may, directly or through one or more of
its Affiliates, hire or engage (and/or continue to engage) one or more
subcontractors or other third parties (each, a “Subcontractor”) to perform any
or all of its obligations under this Agreement; provided, that: (i) the
Providing Party remains ultimately responsible for ensuring that the obligations
with respect to the nature, quality and standards of care set forth in Section 1
are satisfied with respect to any Service provided by any Subcontractor;
(ii) the use of any Subcontractor will not increase any costs, fees or expenses
payable by the Receiving Party hereunder; and (iii) the use of any Subcontractor
will not adversely affect the quality or timeliness of delivery of any Service
provided to the Receiving Party.

6. Title to The Providing Party’s Equipment; Management and Control.

(a) Except as provided in Section 6(c) below, all procedures, methods, systems,
strategies, tools, equipment, facilities and other resources used by a Providing
Party in connection with the provision of Services hereunder (collectively, the
“Provider’s Equipment”) shall remain the property of such Providing Party, and,
except as otherwise provided herein, shall at all times be under the sole
direction and control of such Providing Party.

(b) Except as otherwise provided herein, management of, and control over, the
provision of the Services (including the determination or designation at any
time of the Provider’s Equipment, employees and other resources of the Providing
Party to be used in connection with the provision of the Services) shall reside
solely with such Providing Party. Without limiting the generality of the
foregoing, all labor matters relating to any employees of the Providing Party
shall be within the exclusive control of such parties, and the Receiving Party
shall take no action affecting, or have any rights with respect to, such
matters.

7. Billing and Payment.

(a) The Receiving Party shall promptly pay when due any bills and invoices that
it receives from the Providing Party for services provided under this Agreement.
Within ten days after the last day of each month during the Transition Period,
or such longer period as the Providing Party reasonably requests, Seller shall
provide Buyer with an invoice specifying the Services performed in accordance
with this Agreement in the immediately preceding month and the payments due in
connection therewith. Unless otherwise provided herein or on Annex A, not later
than thirty (30) days following receipt by Buyer of such invoice, subject to
receiving, if requested, any appropriate reasonably requested support
documentation to substantiate the amounts reflected on such invoices, Buyer
shall pay the amounts properly reflected on all such invoices by check or wire
transfer of immediately available funds in accordance with the instructions
provided by the Seller in writing to Buyer. Should Buyer dispute any portion of
any invoice, Buyer shall promptly notify Seller in writing of the nature and
basis of the dispute.

 

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(b) The Parties shall provide and make available to each other any resale
certificate, information regarding out-of-state use of materials, services or
sale, and other exemption certificates or information reasonably requested by
the other Party. Notwithstanding anything to the contrary set forth herein,
neither Buyer nor any Receiving Party shall be liable for, and the Providing
Party shall pay, all Taxes, duties, customs, assessments and other fees and
charges (excluding any Taxes on the income of Buyer or any Receiving Party)
imposed by any Governmental Authority in connection with the Services; provided,
however, that to the extent a Providing Party collects sales, use or excise
taxes on behalf of the Buyer or any Receiving Party in connection with the
Services, the Providing Party shall forward such collections to the Buyer and
the Buyer shall be responsible for remitting such collections to the applicable
Governmental Authority.

8. Term of Agreement; Termination.

(a) Unless earlier terminated under the terms of this Section 8 or Section 9 or
extended by written agreement of the Parties hereto, this Agreement will expire
with respect to each Service on the date on which the Receiving Party has
notified the Providing Party that the Receiving Party has commenced such Service
(or a substitute therefor) on its own behalf, which shall be a date no later
than the date on which the maximum duration specified in the Annex A for such
Service has expired and in any event, no later than [                    ]
following the Closing Date with respect to such Service, the “Transition Date”).
The Providing Party shall not be obligated to provide any Service following the
Transition Date with respect to such Service; provided, however, that if Buyer
or the Receiving Party prior to such Transition Date reasonably requests that
such Service continue after such Transition Date, the Parties shall, upon
Buyer’s request, negotiate in good faith with respect to extending the
Transition Period with respect to such Service.

(b) Upon the occurrence of the final Transition Date for the last remaining
Service to be provided hereunder, this Agreement shall automatically terminate.

(c) The Providing Party may terminate this Agreement with respect to one or more
Services upon ten (10) days written notice to the Receiving Party in the event
of the failure of the Receiving Party to make undisputed payments within ten
(10) days of when due, provided that such termination shall be limited solely to
the portion of the individual Service affected by such non-payment.

(d) Either Buyer or the Seller may terminate this Agreement immediately upon
notice to the other Party:

(i) if the other Party files a petition of bankruptcy or the equivalent thereof
or becomes the subject of an involuntary petition in bankruptcy that is not
dismissed within sixty (60) days after the filing date thereof, or becomes
insolvent, or admits a general inability to pay its debts as they become due
(except where the Party in question is still able to pay fees due under this
Agreement as they become due); or

 

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(ii) upon the material breach of this Agreement by the other Party where such
breach is not remedied within thirty (30) days after written notice thereof has
been given by such Party; or

(iii) upon the material breach by the other Party of any of its representations,
warranties, covenants or agreements contained in the Asset Purchase Agreement,
where such breach is not remedied prior to the expiration of the applicable cure
period set forth therein, if any.

(e) Notwithstanding any other provision in this Agreement to the contrary,
(i) if this Agreement is terminated for any reason, the Receiving Party shall
remain liable for the payment of fees and expenses accruing for the period prior
to termination even though such fees may not become due until after termination,
and (ii) in the event of termination of this Agreement pursuant to this
Section 8 or Section 9, Sections 6(a), 7, 8, 9, 13, 14, 16, and 19 through 25
shall continue in full force and effect.

9. Termination by Buyer. Subject to Section 8(e), Buyer may terminate any or all
of the Services at any time prior to the expiration of the period specified on
Annex A (including any renewal period) upon at least ten (10) days’ prior
written notice to the Providing Party or such shorter period if agreed to by the
Providing Party. If Buyer terminates performance of all of the Services pursuant
to this Section 9, then such termination shall constitute the termination of
this Agreement.

10. Personnel.

(a) From the Closing Date until the termination of this Agreement, each
Providing Party shall employ or retain all employees and other personnel and
resources necessary, as determined by the Providing Party in its sole
discretion, to enable it to perform the Services and its other obligations
hereunder; provided, however, that nothing set forth in this Section 10 shall
limit the standards of performance required under this Agreement, including, but
not limited to, the requirements set forth in Section 12 of this Agreement.

(b) If the employment of any Transferred Employee or employee of Seller
(collectively, the “Service Employees”) who is primarily dedicated to the
Services under this Agreement is terminated (each such Service Employee whose
employment is so terminated, a “Former Employee”), whether voluntarily or
involuntarily, the Party with whom such Former Employee was employed at the time
of termination shall use commercially reasonable efforts to replace such Former
Employee with an employee or independent contractor having like competence and
qualifications (taking into account the original job description for the
relevant position). Nothing herein shall prevent a Party from terminating the
employment of any Service Employee.

 

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11. Covenants of the Parties.

(a) The information that each Party provides to the other under this Agreement
shall be, to the best of that Party’s knowledge, complete and accurate as of the
date that it is delivered.

(b) Each Party shall comply with all applicable Legal Requirements in all
material respects.

(c) The Receiving Party shall take all steps reasonably necessary to permit the
Providing Party to provide its Services hereunder on a timely basis and in
accordance with the service standards set forth in this Agreement and the Annex
hereto, including, but not limited to, responding to all correspondence and
communications of any Party within a reasonable period of time.

(d) Each Party may request of another Party reports and information as they
relate to the Services provided under this Agreement, subject to the
confidentiality requirements of Section 14 hereof, with such reports and
information being delivered within a reasonable time following such request.
Access to reports and information will be provided by each Party to any other
Party as is reasonably required to enable each Party to perform any Service
required hereunder.

(e) The terms “Party” and “party” as used in this Agreement shall be deemed to
include Seller, each Providing Party, Buyer and each Receiving Party. Seller
shall cause each Providing Party to comply with those provisions of this
Agreement that apply to a Providing Party, and Buyer shall cause each Receiving
Party to comply with those provisions of this Agreement that apply to a
Receiving Party. All obligations of Seller and any Providing Party under this
Agreement shall be deemed joint and several obligations of Seller and all
Providing Parties. All obligations of Buyer and any Receiving Party under this
Agreement shall be deemed joint and several obligations of Buyer and all
Receiving Parties.

12. Standards of Performance.

(a) The Providing Party shall provide the Services in substantially the same
manner and on substantially the same basis and with at least the same degree of
care, skill, diligence, priority, frequency and volume provided by the Providing
Party to the Business during the [            ] period immediately prior to the
Closing Date, but in no event on less than a commercially reasonable efforts
basis (unless expressly specified otherwise in Annex A).

(b) The Providing Party shall provide all Services in a good and workmanlike
manner and in accordance with the standards set forth herein and the Annex and
in a professional, ethical and businesslike manner consistent with general
industry standards and in accordance with all applicable Legal Requirements.

(c) The Parties hereby agree that in every instance they shall protect, enhance
and promote the good name and reputation of the other Parties hereto, and
refrain from any activity that could harm the name or reputation of any of the
Parties hereto.

 

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(d) The Providing Party shall use commercially reasonable efforts to avoid
commingling any of the Buyer’s business records, material, Confidential
Information and other data with its own such business records, material,
Confidential Information and other data.

(e) Each Party shall inform the other Parties of all material developments,
issues or problems related to the Services in a timely manner as soon as
reasonably practicable following the occurrence thereof.

(f) Nothing in this Agreement shall require or be interpreted to require the
Providing Party to provide to the Receiving Party any Service beyond the scope
and content of this Agreement, except as otherwise mutually agreed by the
Parties in writing and pursuant to the applicable provisions hereof.

(g) If the Services do not conform to the foregoing warranties, then the
Receiving Party shall have the right to require the Providing Party to either
(i) perform the Services again, properly and at no additional expense to Buyer
or the Receiving Party, or (ii) provide an adjustment to the fees payable
pursuant to Section 7 in such reasonable proportion as the nonconforming
Services relate to the total Services provided in the applicable month. Such
rights shall be in addition, and without prejudice, to all other rights
available under this Agreement, applicable Legal Requirements and otherwise.

13. Relationship of the Parties.

(a) It is expressly understood and agreed that the Parties are independent
contractors of each other for all and any purposes whatsoever.

(b) Nothing contained in this Agreement nor the consummation of the transactions
contemplated herein shall be construed to create a partnership, association,
joint venture, agency relationship or the relationship of employer and employee
between the Parties, nor shall their officers, directors, or employees be
considered employees or agents of another Party for any purpose. Nothing in this
Agreement shall permit any Party to create or assume any obligation on behalf
of, or otherwise bind, another Party for any purpose. No Party shall have any
power to act for or represent another Party, except as expressly set forth
herein, and shall not hold itself out as the agent of another Party.

(c) Seller or the Providing Party, as applicable, is solely responsible for
persons performing the Services pursuant to this Agreement. Such persons shall
not be subject to the discretion or control of Buyer or any Receiving Party for
any purpose and shall remain at all times employees of Seller or the Providing
Party, as applicable. No Party, nor its employees, contractors or subcontractors
shall be deemed to be employees, contractors or subcontractors of any other
Party, it being fully understood and agreed that no employees of any Party are
entitled to benefits or compensation from any other Party. Each Party is wholly
responsible for (i) all costs and expenses of its employees providing Services
pursuant to this Agreement, including all salary and benefits; (ii) withholding
and payment of all applicable federal, state and local and other taxes,
including, without limitation, income tax, social security taxes, unemployment
compensation tax, workers’ compensation tax, other employment taxes or
withholdings and premiums and remittances with respect to its own employees,
including any contributions from them as required by law; and (iii) all fringe
benefit programs for which such employees may be eligible.

 

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14. Confidentiality. The Parties acknowledge that Buyer and Seller have
previously executed a Confidentiality Agreement dated August 4, 2014 (the
“Confidentiality Agreement”), which Confidentiality Agreement shall continue in
full force and effect in accordance with its terms. Without limiting the
foregoing, all information furnished to Buyer and its officers, employees,
accountants and counsel by the Seller in connection with this Agreement, and all
information furnished to the Seller by Buyer and its officers, employees,
accountants and counsel pursuant to this Agreement, shall be deemed to be
“Evaluation Material” pursuant to the Confidentiality Agreement, and Buyer and
Seller shall be fully liable and responsible under the Confidentiality Agreement
for any breach of the terms and conditions thereof by their respective
subsidiaries, officers, employees, accountants, counsel and other
Representatives. Furthermore, without limiting the foregoing, each of the
parties hereto hereby agrees to keep the subject matter of, and the terms and
conditions of, this Agreement (except to the extent contemplated hereby) or
pursuant to the negotiation and execution of this Agreement or the effectuation
of the transactions contemplated hereby, confidential as “Evaluation Material”
pursuant to the terms and conditions of the Confidentiality Agreement.

15. Third Party Non-Disclosure Agreements. To the extent that any third party
proprietor of information or Software to be disclosed or made available to the
Receiving Party in connection with performance of the Services hereunder
requires a specific form of non-disclosure agreement as a condition of its
consent to use of the same for the benefit of the Receiving Party or to permit
the Receiving Party access to such information or Software, the Receiving Party
shall execute if required (and shall cause the Receiving Party’s employees to
execute, if required) any non-disclosure or similar agreement in substantially
the same form executed by the Providing Party.

16. Limitation of Liability; Disclaimer

(a) Neither Party nor any of its Affiliates shall be liable to the other Party,
its Affiliates or any third party for, and each Party irrevocably waives any
claim to any special, incidental, punitive, exemplary, multiplied, indirect, or
consequential (including loss of revenues or profits) damages of any kind
arising from any claim relating to this Agreement or any of the Services to be
provided hereunder or the performance of or failure to perform such Party’s
obligations under this Agreement, whether such claim is based on warranty,
contract, tort (including negligence or strict liability) or otherwise, all of
which are hereby excluded by agreement of the Parties regardless of whether or
not any Party to this Agreement has been advised of the possibility of such
damages.

(b) EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER SPECIFICALLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO,
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE
WARRANTIES OF MERCHANTABILITY, FITNESS FOR PURPOSE AND NON-INFRINGEMENT.

 

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17. Force Majeure. If the Providing Party is prevented from or delayed in
complying, either totally or in part, with any of the terms or provisions of
this Agreement by reason of fire, flood, storm, strike, walkout, lockout or
other labor trouble or shortage, delays beyond the reasonable control of such
Providing Party by unaffiliated suppliers or carriers, shortages of fuel, power,
raw materials or components, any law, order, proclamation, regulation,
ordinance, demand, seizure or requirement of any Governmental Authority, riot,
civil commotion, war, rebellion, acts of terrorism, nuclear accident or other
causes beyond the reasonable control of such Providing Party or other acts of
God, then upon prior written notice to the Receiving Party which notice shall
include a description of the circumstances in question, the affected provisions
and/or other requirements of this Agreement shall be suspended during the period
of such disability and the Providing Party shall have no liability to the
Receiving Party, its Affiliates or any other person in connection therewith. The
Providing Party and the Receiving Party shall make commercially reasonable
efforts to remove such disability within thirty (30) days after giving notice of
such disability. If the Providing Party is unable to provide any of the Services
due to such a disability, each Party shall use its commercially reasonable
efforts to cooperatively seek a solution that is mutually satisfactory to the
other Parties. In addition, upon becoming aware of a disability causing a delay
in performance or preventing performance of any obligations of the Providing
Party under this Agreement, the Receiving Party shall have the right, but not
the obligation, to engage subcontractors to perform such obligations for the
duration of the period during which such disability delays or prevents the
performance of such obligation by the Providing Party. Except to the extent such
delay is caused by the wrongful act or omission of the Providing Party, any
costs arising from such failure or delay shall be borne by the Party incurring
the costs.

18. Notices. All notices, requests, consents, and other communications required
or permitted hereunder shall be in writing and shall be personally delivered,
mailed using first-class, registered, or certified mail, postage prepaid, faxed
or sent by electronic mail to the following addresses or to such other address
as the parties hereto may designate in writing:

Seller:

CafePress Inc.

6901 Riverport Drive

Louisville, Kentucky 40258

Attn: Chief Financial Officer

          General Counsel

Fax:

Email:

with a copy to, which shall not constitute notice:

Pillsbury Winthrop Shaw Pittman LLP

2550 Hanover Street

Palo Alto, CA 94304

Attn: Jorge del Calvo

Fax: (650) 233-4545

Email: jorge@pillsburylaw.com

 

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Buyer:

Circle Graphics, Inc.

Attn: Chief Executive Officer

120 Ninth Avenue

Longmont, Colorado 80501

Email: acousin@circlegraphicsonline.com

with a copy to, which shall not constitute notice:

Foley & Lardner LLP

111 Huntington Avenue

Boston, Massachusetts 02199

Email: spravda@foley.com

Attn: Susan E. Pravda, Esq.

All such notices, requests, consents and other communications shall be deemed to
be properly given (a) if delivered personally to the address as provided in this
Section, upon delivery, (b) if delivered by facsimile transmission or electronic
mail to the facsimile number or email address as provided for in this
Section 18, upon delivery confirmation if sent during normal business hours of
the recipient; if not, then on the next Business Day, (c) if sent by registered
or certified mail, three (3) Business Days after the same has been deposited in
the mail, addressed and postage prepaid as set forth above and (d) if delivered
by overnight courier to the address as provided in this Section 18, on the
earlier of the first Business Day following the date sent by such overnight
courier or upon receipt (in each case regardless of whether such notice, request
or other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 18). Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.

19. Successors and Assigns. The rights of either Party under this Agreement
shall not be assignable by such Party hereto without the prior written consent
of the other Party and any attempted assignment without such consent shall be
void and without legal effect; provided that any such assignment shall not
relieve such Party from its obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their successors
and permitted assigns. Except as set forth below, nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
Person other than the Parties and successors and assigns permitted by this
Section 19 any right, remedy or claim under or by reason of this Agreement. Each
Providing Party and Receiving Party is a third-party beneficiary of this
Agreement and shall have the right to enforce the provisions of this Agreement
to protect its rights and interests. There are and shall be no other third-party
beneficiaries of this Agreement. Notwithstanding the foregoing, for the sake of
clarity and in accordance with Section 11(e) hereof, the Parties acknowledge and
agree that (i) the provision of services and performance of obligations
hereunder by any Providing Party other than Buyer shall not be deemed an
assignment hereunder in whole or in part, and shall not require the consent of
any other Party, and (ii) the receipt of services and performance of obligations
hereunder by any Receiving Party other than Seller shall not be deemed an
assignment hereunder in whole or in part, and shall not require the consent of
any other Party.

 

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20. Entire Agreement; Amendments. This Agreement and the agreements and annexes
referred to herein and the documents delivered pursuant hereto contain the
entire understanding of the Parties hereto with regard to the subject matter
contained herein or therein, and supersede all other prior representations,
warranties, agreements, understandings or letters of intent between or among any
of the Parties hereto (it being understood, however, that the Asset Purchase
Agreement and agreements contemplated thereby, including the Confidentiality
Agreement, set forth certain additional understandings between Seller and Buyer
regarding their relationship after the Closing Date). This Agreement shall not
be amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the Parties hereto.

21. Partial Invalidity. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.

22. Waivers. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the Party or Parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any Party, it is authorized in
writing by an authorized representative of such Party. The failure of any Party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any Party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

23. Execution in Counterparts. This Agreement may be executed in one or more
counterparts (including via facsimile or other electronic transmission), each of
which shall be considered an original instrument, but all of which shall be
considered one and the same agreement, and shall become binding when one or more
counterparts have been signed by each of the Parties hereto and delivered to
Seller and Buyer.

24. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the state of Delaware,
excluding that body of law pertaining to conflicts of laws.

25. Interpretation. For purposes of this Agreement: (a) the words “include,”
“includes” and “including” shall be deemed to be followed by the words “without
limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,”
“hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole.
Unless the context otherwise requires, references herein (i) to Sections mean
the Sections of this Agreement and (ii) to an agreement,

 

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instrument or other document means such agreement, instrument or other document
as amended, supplemented and modified from time to time to the extent permitted
by the provisions thereof and by this Agreement. Headings of Sections are
inserted for convenience of reference only and shall not be deemed a part of or
to affect the meaning or interpretation of this Agreement. This Agreement shall
be construed without regard to any presumption or rule requiring construction or
interpretation against the Party drafting an instrument or causing any
instrument to be drafted.

26. Annexes. Annex A and B shall be construed with and as an integral part of
this Agreement to the same extent as if it was set forth verbatim herein.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly
executed as of the date set forth above, all effective as of the Closing Date.

 

BUYER Circle Graphics, Inc. By

 

Name

 

Title

 

SELLER CafePress Inc. By

 

Name

 

Title

 

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Annex A

The following Services, in each case relating to the Business, will be provided
following Closing for the fees and term as set forth below; provided, however,
in the event Buyer requires any of the Services following the date, as defined
by the Term below, following the Closing, all monthly service fees and listed
below shall increase by 10% for each month such Services are used thereafter.

 

Service Description

  

Fees

  

Term

A. General Ledger and Accounting1

   Up to 3 months Seller shall provide the following Services related to the
General Ledger for a monthly service fee of $9,500 per month and the additional
fees as listed below.       Seller will continue to host, provide access,
support & maintenance for the general ledger and all associated modules,
including Accounts Receivable, Inventory, Accounts Payable, Purchasing, etc. The
employees and contractors of Buyer will continue to have access to reports
existing at time of closing. Seller will continue to provide the same level of
functional support for the general ledger and reporting in place for the
remainder of the Company.    No additional one-time fee    Up to 3 months Set up
a new company ledger for the Business for utilization by Buyer following the
Closing.    One-time fee of $ 12,000    Migrate beginning balances for the
Purchased Assets and Assumed Liabilities from Seller’s books to the new company
ledger.    One-time fee of $ 1,500    Seller assumes no responsibility for
purchase accounting adjustments.    No additional one-time fee    Up to 3 months

 

1  Buyer may only terminate the Services included under “General Ledger” during
the Term upon at least twenty-one (21) days’ prior written notice to Seller.

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Seller will ensure general ledger access and capability is provided to Buyer
employees and contractors in a manner consistent with the environment that
Seller company employees No additional one-time fee Up to 3 months System
interfaces to the general ledger for items like banking transactions, sales,
etc. will continue during the transition service period. No additional one-time
fee Up to 3 months Monthly closing schedule will be consistent with the
Seller’s. Ledger cycles during closing will remain consistent with Seller’s
practice. Buyer will be responsible for any adjustments related to Buyer’s
month-end closing, if necessary. No additional one-time fee Up to 3 months
Seller will make available the current master files during the transition
services period. Buyer will be responsible to update the sales / receivables and
vendor / payables master data files. After Closing, one copy of the master files
will be provided when requested by the Buyer. No additional one-time fee Up to 3
months Seller to provide General Accounting support during Closing. No
additional one-time fee Up to 3 months Ongoing use of foreign exchange rate data
service No additional one-time fee Up to 3 months Provide bank statements and
statements of accounts for items like Litle, American Express Merchant and
PayPal, etc. after Closing. No additional one-time fee Up to 3 months Provide
access and use of Litle, American Express Merchant and PayPal Accounts after
Closing No additional one-time fee Up to 3 months Compliance with the law and
accounting principles after Closing is Buyer’s responsibility. No additional
one-time fee Up to 3 months

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Capitalization of time and effort for Web Capitalization will be the
responsibility of the Buyer after Closing. No additional one-time fee Up to 3
months Completion the account reconciliations (accounts receivable, inventory,
accounts payable, etc.) on the newly created Buyer ledger will be the
responsibility of the Buyer No additional one-time fee Up to 3 months

B. Inbound and Outbound Freight

 

Seller shall provide the following Services related to Inbound and Outbound
Freight for a monthly service fee of $1,500 per month.

Up to 6 months Buyer to be permitted to continue to use UPS, FedEx, DHL, or any
other carrier on Seller’s accounts post close. If any of Seller’s shipping rates
(fuel surcharge, base rate, etc.) increase or decrease during the term of this
service they will be adjusted for Buyer accordingly. Actual costs to be billed
weekly. Up to 6 months Buyer will be responsible for selecting the carrier and
determining the level of service to be used for each individual shipment after
Closing No additional one-time fee Up to 6 months Seller will continue to manage
the relationship with UPS, FedEx, DHL, or any other carrier on Seller’s accounts
during the transition service for packages shipped under Seller’s contracts,
including negotiating terms with carriers. This does not restrict Buyer’s to
negotiate with shippers for their individual contracts after the TSA period. No
additional one-time fee Up to 6 months Account numbers for UPS, FedEx, DHL, or
any other carrier on Seller’s accounts shall remain the same post close unless
Seller determines it is in the best interest to change the account numbers. No
additional one-time fee Up to 6 months

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Audits will continue to be performed by Seller post close. Any benefit for an
audit that specifically relates to Buyer’s post close activity or account will
be reimbursed to Buyer. No additional one-time fee Up to 6 months Buyer will
reimburse Seller for shipping costs incurred on a weekly basis Actual costs to
be billed weekly. Up to 6 months Seller will provide reports to Buyer in a
manner similar to that prior to closing. Canned or already established reports
required to Buyer for Buyer’s negotiation of a new contract will be provided
upon request. No additional one-time fee Up to 6 months Consistent with prior to
Close, Buyer is responsible for all freight charges associated with returned
and/or undeliverable packages. This also includes Return to Vendor charges
and/or 3rd party charges associated with designers/vendors Actual costs to be
billed weekly Up to 6 months Buyer will continue to receive a shipping detail
with billing, and via carrier on-line reporting in the same manner as prior to
Closing. All reporting via carrier on-line services will be made available to
Buyer until TSA termination No additional one-time fee Up to 6 months

C. Accounts Receivables and Cash Receipts

Up to 3 months Seller shall provide the following Services related to Accounts
Receivable and Cash Receipts for a monthly service fee of $0 per month. Accounts
receivable collection efforts will be the responsibility of the Buyer after
closing No additional one-time fee Up to 3 months Buyer will perform cash
application of accounts receivable after Closing No additional one-time fee Up
to 3 months Seller will continue to host, provide support & maintenance for the
accounts receivable application. Seller will also provide access to the
application for employees transferred to Buyer. No additional one-time fee Up to
3 months

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Credit risk assessment including, assignment of credit to new customers,
reevaluation of credit with current customers and placing customers on hold,
will be determined by Buyer after Closing No additional one-time fee Up to 3
months Set up of new customers will be performed by Buyer. No additional
one-time fee Up to 3 months Invoice terms established for any shared customers
to remain consistent with Seller terms while TSA services are provided. For
customers not shared, all change in terms during the TSA period shall be the
responsibility of the Buyer. No additional one-time fee Up to 3 months Seller
may not write-off any of Buyer’s accounts receivable. No additional one-time fee
Up to 3 months All bad debt calculations and the related bad debt reserve
accounting are the responsibility of the Buyer No additional one-time fee Up to
3 months Buyer shall be responsible for communicating, in writing, new bank
account information to Seller before any system, cash application or other
migration. No additional one-time fee Up to 3 months Seller cash collections of
Buyer’s post- Closing sales and accounts receivable to be settled weekly. This
shall include Litle, PayPal, etc. accounts that may not be transacted through
the accounts receivable system. No additional one-time fee Up to 3 months Access
to Litle, PayPal, etc. activity specific to Buyer that may not be transacted
through the accounts receivable system will be made available after Closing. No
additional one-time fee Up to 3 months

D. Payroll

Seller shall provide no payroll Services

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Buyer is responsible to book month end closing payroll accrual during transition
period. Seller is not responsible for any costs related to the recruitment or
replacement of Buyer’s employees. At Seller’s discretion, they may provide
assistance to Buyer in recruitment and replacement.

E. Accounts Payable

Up to 3 months Seller shall provide the following Services related to Accounts
Payable for a monthly service fee of $0 per month plus the per transaction costs
identified below. Seller will pay accounts payable amounts identified and
processed by Buyer after Closing. No additional one-time fee Up to 3 months
Seller with provide a list of checks to be paid to vendors and Buyer will
authorize all payments prior payments being made. No additional one-time fee Up
to 3 months Seller will continue to host, provide support & maintenance for the
accounts payable application. Seller will also provide access to the application
for employees transferred to Buyer. No additional one-time fee Up to 3 months
Buyer will reimburse Seller weekly for all payments made for Buyer, this
excludes the costs mentioned below for TSA services. No additional one-time fee
Up to 3 months Set up of new vendors will be performed by Buyer. No additional
one-time fee Up to 3 months Entry / submission of data required to process /
generate a payable in the Seller’s system shall be the responsibility of the
Buyer after Closing. No additional one-time fee Up to 3 months

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Charges on a per transaction basis   

Invoice Type

  

Rate Per Transaction

   Check    $2.50    Wire (Domestic)    $ 18.00    Wire (International)   
$32.00

F. Credit and Purchasing Cards2

      Up to 60 days Seller shall provide the following Services related to
Credit and Purchasing Cards for a monthly service fee of $1,000 per month.      
Seller to continue to provide access to credit cards for employees in possession
of a card at time of Closing. All expenses charged to the cards will be
reimbursed Buyer. Buyer shall use best efforts to obtain replacement cards after
Closing. Buyer is responsible to reimburse Seller for all charges incurred after
Closing charged by Target, Transferred or contractor employees included in this
transaction.    No additional one-time fee    Up to 60 days Seller to provide
expenses reimbursement to Buyer employees and contractors consistent with past
practices    No additional one-time fee    Up to 60 days Seller to download
credit card transactions statement and provide files to Buyer to Buyer can book
transactions into their ledger. Transactions and associated files will be
provided in a manner consistent with Seller past practices.    No additional
one-time fee    Up to 60 days Amounts due to Seller related to the use of credit
cards, etc. will be settled weekly    Actual costs to be billed weekly.    Up to
60 days Weekly files and at each month end files will be sent to Buyer to permit
Buyer to book the weekly activity and month end accrual required for credit card
activity.    No additional one-time fee    Up to 3 months

 

2  Buyer may only terminate the Services included under “Credit and Purchasing
Cards” during the Term upon at least fourteen (14) days’ prior written notice to
Seller.

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G. Audit and Tax Cooperation

N/A Seller shall provide the following Services related to Audit and Tax
Cooperation. Provide historical data and information and access to personnel to
assist Buyer in the preparation and completion of tax returns and/or audits.
One-time fee of $3,125 paid by Buyer to Seller. N/A Buyer will provide Seller
with assistance in closing Seller’s books for the period ending on Closing Date.
One-time fee of $6,250 paid by Buyer to Seller. N/A

H. General3

Up to 3 months Seller shall provide the following General Services for a monthly
service fee of $2,000 per month. Provide general Transition Services support
including: IT and phone system migrations, credit cards, purchasing cards,
assistance in resolving questions/concerns arising from monthly billing, ad-hoc
analysis, and general accounting activity, etc. No additional one-time fee Up to
3 months In the event system upgrade or enhancements are made to Seller
applications which the Buyer utilizes, the Buyer will be included in the upgrade
or enhancement. There will be no additional charge for an upgrade or enhancement
unless the upgrade or enhancement was performed at the request of Buyer. No
additional one-time fee Up to 3 months

 

3  Buyer may only terminate the Services included under “General” during the
Term upon at least twenty-one (21) days’ prior written notice to Seller.

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Provide support associated with Transitional Services including but not limited
to Seller’s accounts payables, accounts receivable, and ledger systems, which
shall be billed until such time as Buyer no longer requires Transition Services
from Seller. No additional one-time fee Up to 3 months Provide pre-close levels
of support services and treat Buyer the same as other Seller’s parties
pre-close. No additional one-time fee Up to 3 months Destroy or delete any and
all information that relates to Seller and / or any of the sub-businesses, other
than the business in this transaction, in electronic or paper format as soon as
possible after Closing but no later than 60 days after Closing. No additional
one-time fee N/A The following is a list of services that Buyer does not require
and which Seller will not be providing services: Sarbanes Oxley / Compliance
Support, Fixed Assets Support, Tax Support (Income, Sales and Use, Property,
etc.), Insurance Support, Banking Support (Overdraft protection, Credit Lines,
Bank Account Administration, etc.), Operations Support, etc. No additional
one-time fee N/A

I. IT/Technology

Up to 365 days Seller shall provide the following Services related to
IT/Technology for the fees as listed below. Buyer to pay seller hourly rate for
support from development, architect, IT Management, and Project management
support for time spent during transition and separation activities. For
development and architect support hours are not to exceed 10 hours/week or go
beyond 90 days. Development/architect support currently requested from buyer
specifically for IMS and Groupon API integration. Hours will be tracked by
resource and compiled for monthly billing

Developer: $80/hr;

Architect: $100/hr;

IT Mgmt: $100/hr; and

Project Mgmt: $125/hr to be billed monthly.

Up to 365 days

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Buyer to cover Seller’s travel expenses associated with supporting IT and other
related separation activities; will provide receipts of travel Actual costs to
be billed as needed. Up to 365 days Seller to allow use of cafepresseast.com
domain for up to a year post close due to strategic value to business Annual
Mark Monitor domain and management fees Up to 365 days Seller to provide PCI
compliant order taking processing via phone or email via customer service for
buyer after Closing. The service will be provided in the same manner and quality
as prior to Closing. $1,000 per month Up to 90 days Seller to pay credit card
processing fee of 2.3% of sales price for all sales transactions processed by
Buyer (Litle, American Express Merchant and PayPal Accounts, etc.) during TSA
period. 2.3% of sales price to be billed monthly. Up to 90 days Seller to
support export of all existing emails to PST file for set up in Buyer’s email
system and to forward email addresses for 365 days; Buyer has hosted account and
would like to set up new accounts in there to forward to. No additional one-time
fee Up to 365 days Seller to provide access to buyer of Cisco phone system and
licenses until buyer is ready to fully separate. At that time Buyer to purchase
phone system from seller at current book value. At that time licenses for use of
Cisco phone system can be purchased by buyer from seller to transition or they
will convert back to seller. Book value of phone system and licenses. Up to 90
days Seller to provide access to all accounts; subscriptions, and licenses until
they can be separated and assigned to Buyer’s billing up to 30 days after
Closing (does not include access to Cisco phone system; CP domain, email, or
other core functions for purposes of running the business or handling accounting
or other purposes-that access is called out separately) No additional one-time
fee Up to 60 days

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Seller to provide Buyer support and access for Foreign Currency Exchange service
until such a time they are able to transition to their own No additional
one-time fee Up to 90 days Seller to provide access to Buyer of all domains and
IT related systems including support for issues up to 60 days while new domains
are established No additional one-time fee Up to 60 days Seller to provide VPN
access until new VPN is established. Will be necessary for continued access to
CP domains until finance is fully transitioned-up to 90 days No additional
one-time fee Up to 90 days Buyer to maintain usage of MPLS connection until all
transition and separation activities are completed and pay monthly fees for
service. This allows facilitation of those activities. When separation and
transition activities are completed Seller to coordinate disconnect of MPLS
service unless Buyer as decided to assume the service. $4237.57 billed by AT&T
Up to 365 days Buyer will continue to have access and use of EZ Prints builder
at costs consistent to prior to Closing. Pricing and more details about usage
will be formalized in an agreement after Closing. That agreement will replace
this TSA service. No additional one-time fee N/A Upon request Seller will
provide one copy of the database tables (or excel format equivalents) necessary
for the migration of data to Buyer’s ERP system, including but not limited to
the following tables: Customer, Vendor, A/R, A/P, Product, Inventory, etc. No
additional one-time fee N/A

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Annex B

Representative Contact Information

Representative for Buyer:

Representative for Seller:

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EXHIBIT B

COMMERCIAL AGREEMENT

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ART FULFILLMENT AGREEMENT

This Fulfillment Agreement (the “Agreement”) is by and between CafePress Inc., a
Delaware corporation, having a place of business at 6901A Riverport Drive,
Louisville, Kentucky 40258 (collectively “CafePress”) on the one hand, and
Circle Graphics, Inc., a Delaware corporation (“Company”) on the other hand
(each a “party” and collectively the “parties”), effective as of             ,
2015 (the “Effective Date”).

RECITALS

WHEREAS, CafePress is an e-commerce retailer of, among other things, customized
canvas wall art, panoramic canvas photographs and other wall art as set forth in
Exhibit A;

WHEREAS, Company offers printing and manufacturing of customized canvas wall
art, panoramic canvas photography and other wall art as set forth in Exhibit A;
and

WHEREAS, CafePress and Company further desire that (a) the Products (as defined
below) be included in CafePress’ assortment of products available for purchase
through the CafePress Service (as defined below), and (b) all purchases of
Products be fulfilled exclusively, except as otherwise provided herein, by
Company.

NOW THEREFORE, in consideration of the mutual promises and undertakings herein
contained and for other good and valuable consideration, intending to be legally
bound, the parties agree as follows:

1. DEFINITIONS

1.1 “CafePress Cost” shall have the meaning ascribed to such term in
Section 9.1.

1.2 “CafePress Customer Service” shall mean the payment processing and customer
service support related to Products sold through the CafePress Service.

1.3 “CafePress Customers” shall mean individuals or entities that purchase the
Products through the Website. Any reference to “Customer” shall include any one
of the Customers.

1.4 “CafePress Marketplace Content” shall mean content available through
CafePress from the CafePress Service other than CafePress User Content.

1.5 “CafePress Marketplace” shall mean the CafePress online marketplace for the
creation, customization and purchase of merchandise.

1.6 “CafePress Service” shall mean the Internet-based services offered by
CafePress available through the Websites, including without limitation, the
Create & Buy Service, the Internet-based storefronts, the CafePress Marketplace,
EZ Prints, Inc. Marketplace, application programming interfaces, and web pages.

1.7 “CafePress Users” shall mean individuals or entities that create and upload
User Content intended to be featured on the Products.

 

1

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1.8 “Company Content” shall mean have the meaning set forth in Section 5.

1.9 “Company Marks” shall mean those Marks that are owned by or licensed to
Company. Any reference to “Company Mark” shall include any one of the Company
Marks.

1.10 “Company Shipping Materials” shall mean the shipping and packing materials
that will be used by Company to ship the Products to Customers.

1.11 “Content” shall mean User Content, CafePress Marketplace Content and
Company Content.

1.12 “Create & Buy Service” shall mean the services offered by CafePress to
allow for customization and purchase by Customers of the Products.

1.13 “Inventory” shall mean the items intended to serve as Products under this
Agreement to be held at Company’s warehouse.

1.14 “Marks” shall mean trademarks, trade names, service marks, website
addresses, logos and/or trade dress. Any reference to “Mark” shall include any
one of the Marks.

1.15 “Products” shall mean the products set forth on Exhibit A which will be
available for customization by, and printing, purchase and sale through, the
CafePress Service. Additional Products may be added from time to time, subject
to the parties’ mutual agreement. Any reference to “Product” shall include any
one of the Products.

1.16 “Purchase Order” shall have the meaning set forth in Section 7.

1.17 “Shipping Account” shall mean the shipping account number that CafePress
provides to Company for shipping of Products to Customers.

1.18 “Third Party Distribution Channels” shall mean any and all third party
internet, shopping, or other ecommerce sites or feeds through which CafePress
sales and distributes products as determined by CafePress in its sole
discretion.

1.19 “User Content” shall mean the content uploaded by CafePress Users intended
for use or available for use with the Products.

1.20 “Website” shall mean the websites and domains owned and operated by
CafePress and its affiliated companies, currently existing or later developed or
acquired, including but not limited to, www.cafepress.com, and www.ezprints.com
and any other domain extension of “cafepress” and any solely geographic and/or
language designation domains later developed or acquired by CafePress.

 

2

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2. TERM.

2.1 This Agreement shall remain in effect for three (3) years from the Effective
Date (the “Initial Term”) and shall automatically renew for additional one
(1) year terms (each a “Renewal Term”) unless either party provides written
notice to the other party of its intent not to renew this Agreement no later
than 30 days prior to the end of the Initial Term or the then-current Renewal
Period, as applicable. The Initial Term and any and all Renewal Terms shall be
collectively referred to herein as the “Term.”

2.2 Either party may immediately terminate this Agreement if the other party:
(i) breaches a material provision of this Agreement and fails to cure such
breach within thirty (30) days following receipt of written notice; or
(ii) becomes insolvent or seeks protection under any bankruptcy or comparable
proceeding.

2.3 Upon expiration or termination of this Agreement, each party shall promptly
(i) cease all use of the other party’s Marks, and (ii) return, or, if agreed to
by the other party, destroy all such other party’s content, Products,
promotional materials and Confidential Information (as defined below) delivered
or disclosed, together with all copies thereof. Notwithstanding the foregoing,
after termination of this Agreement, CafePress may retain a copy of any Content
used on Products and images of Products for accounting and archival purposes.
Termination or expiration of this Agreement shall not prejudice any claim of
either party accrued on account of any default or breach of the other.

2.4 The following Sections will survive the expiration or termination of this
Agreement: 1, 2, 9, 11 - 13, and 15 - 27.

3. PARTIES OBLIGATIONS.

3.1 CafePress Obligations. In addition to obligations set forth elsewhere in
this Agreement, CafePress agrees as follows:

3.1.1 CafePress shall sell Products to Customers through the CafePress Service
and Third Party Distribution Channels. The responsibilities of CafePress shall
include, but not be limited to, providing mechanisms through the Create & Buy
Service to:

 

  (a) view and display User Content and Company Content on the CafePress
Website;

 

  (b) view and display Products and allow for decoration of Products on the
CafePress Website using User Content;

 

  (c) support transfer of order details from CafePress’ order and checkout
system to Company for fulfillment; and

 

  (d) allow access to order status information once the Products have been
shipped.

3.1.2 CafePress shall also feature the availability of the Products in the
CafePress Product Assortment which allows CafePress Customers to purchase
Products containing CafePress Marketplace Content or CafePress User Content
uploaded by existing and future CafePress Users and shall have the option, at
its discretion, to offer the Products for sale through Third Party Distribution
Channels.

3.1.3 CafePress will purchase Products exclusively from Company, on an “as
needed” basis at the CafePress Cost set forth on Exhibit A annexed hereto.
CafePress shall not directly or indirectly perform or provide any printing,
fulfillment or shipping relating to orders of Products, or engage or enter into
any agreement or arrangement with any third party to perform or provide any
printing, fulfillment or shipping relating to orders of Products.

 

3

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Notwithstanding the foregoing, the exclusivity described above shall not apply
with respect to a specific Product if:

 

  3.1.3.1 (a) CafePress has a contractual obligation to sell the Product to a
CafePress partner at a price that is equal to or greater than 95% of the
applicable CafePress Cost, (b) CafePress is able to purchase the same Product at
a price that is at least five percent (5%) less than the applicable CafePress
Cost, as evidenced by a bona fide writing provided by a bona fide alternate
third party supplier (an “Alternate Quote”), and (c) the Company elects not to
match the price set forth in the Alternate Quote, after receipt of a copy of the
Alternate Quote and a five (5) business day opportunity to provide notice that
it will match such price;

 

  3.1.3.2 the Company is repeatedly unable to meet the demand of CafePress for
such Product in all material respects including hitting the ship dates as set
forth in paragraph 8 herein, after written notice and a thirty (30) day
opportunity to cure; or

 

  3.1.3.3 the Product repeatedly fails to meet the quality standards set forth
in Section 12.2, after written notice and a thirty (30) day opportunity to cure.

3.1.4 CafePress shall have the right to reproduce the Company Marks on the
CafePress Services as reasonably necessary to promote and market the Products
for the Create & Buy Service, the CafePress Service, the CafePress Marketplace
and the Third Party Distribution Channels in accordance with Section 11.2.

3.2 Company Obligations. In addition to obligations set forth elsewhere in this
Agreement, Company agrees as follows:

3.2.1 Company shall provide all printing, fulfillment and shipping relating to
orders of Products. Company’s responsibilities shall include, but not be limited
to, procuring and maintaining all facilities and equipment customarily employed
by businesses of its sort, with appropriate amounts of warehousing and loading
dock space and with computer hardware and software to track and control
Inventory records.

3.2.2 Company shall maintain all Inventory and Company Shipping Materials in a
safe, dry place that protects such items from damage, discoloration or
deterioration and shall maintain an ERP system that tracks and accounts for
Inventory.

3.2.3 Company will manage all Inventory and assure that appropriate levels of
Inventory are available to satisfy orders for the Products.

3.2.4 Company shall not discontinue or change a Product unless such change or
removal is (i) required by law or (ii) mutually agreed to by the parties.

 

4

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3.2.5 During the Term of this Agreement and for a period of two (2) years after
its expiration or termination, Company shall obtain and maintain the following
policies of insurance: (i) workers’ compensation and/or disability insurance, in
amounts as required by applicable law, and (ii) commercial and general liability
insurance with a combined single limit of not less than two million U.S. Dollars
($2,000,000 U.S.). For each policy year of the Term, as regards the insurance
required in item (ii) above, Company shall furnish CafePress with a certificate
of insurance naming “CafePress and its parents, subsidiaries and affiliates” as
additional insured parties. In no event shall Company’s failure to obtain the
required policies of insurance, or to provide CafePress with the required
certificate of insurance, constitute a waiver of the requirement for same.

4. PRODUCTS AND PRICING. The Products and corresponding CafePress Cost for each
Product are listed on Exhibit A attached hereto. CafePress, at its own
discretion, shall determine the retail price for the Products sold through the
CafePress Services, including, without limitation, modifications of the price
and variations in pricing between items offered through the Create & Buy Service
and items offered otherwise on the CafePress Marketplace or Third Party
Distribution Channels. At any time after the first twelve (12) months of the
Term, but in any event not more than once every twelve (12) months, the parties
agree, upon request, to review pricing and to negotiate – in good faith –
reasonable changes in the CafePress Cost to reflect changes in business and/or
market conditions, including changes in the requirements of CafePress Partners.

5. COMPANY CONTENT. Company shall submit content to CafePress for merchandizing
on the CafePress Service (“Company Content”). Company hereby grants to CafePress
a non-exclusive, non-transferable, royalty-free right to use, reproduce and
display the Company Content on the CafePress Service or Third Party Distribution
Channels.

6. MARKETING PROGRAM SCOPE. CafePress may engage, in its sole and absolute
discretion, in any and all marketing, SEM and SEO activities, to drive traffic
to the CafePress Service and Third Party Distribution Channels to maximize sales
of Products.

7. ORDER PROCESSING AND FULFILLMENT.

7.1 CafePress shall take and process all orders for the Products from CafePress
Customers through an electronic purchase order (“Purchase Order”). A Purchase
Order will be issued by CafePress to Company via EDI, TCN or similar electronic
process on a prompt, ongoing basis, but in any event, no more than twelve
(12) hours after each Purchase Order is placed by a Customer, excluding
regularly scheduled maintenance of the Website and systems supporting the
CafePress Services. Company shall be responsible for all aspects of Purchase
Order fulfillment, including the storage and handling associated with the
Products.

7.2 Company shall provide order status updates in a format and manner as agreed
upon by the parties.

7.3 All Products produced pursuant to this Agreement shall be manufactured at
one of the following locations: (i) 120 Ninth Avenue, Longmont, CO 80503, or
(ii) 10700 World Trade Boulevard, Raleigh, NC 27617-4220. Products may not be
produced at any other facility or location without the prior written consent of
CafePress, which shall not be unreasonably withheld or delayed. Company shall
provide all information reasonably requested by CafePress in connection with its
review of proposed production locations.

 

5

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8. SHIPPING. Company shall ship the Products to Customers on CafePress provided
Shipping Accounts. Shipping to CafePress Customers will occur on or before the
ship date required under the Purchase Order, which shall be no sooner than four
(4) business days from receipt of the Purchase Order. CafePress will ensure that
through the order process or at checkout, CafePress Customers will be made aware
of the applicable anticipated shipping times for the Products purchased to the
extent they deviate from CafePress’ standard shipping options. Company shall
only ship ordered Products and shall not make any substitutions. Shipping costs
shall be at CafePress’ expense through CafePress’ provided shipping account;
provided that Company will be responsible for the costs of all Company Shipping
Materials. Once Company has shipped the Products to a CafePress Customer,
Company shall, in a manner agreed to by the parties, transmit to CafePress a
ship notice, which shall include order information and tracking number. In the
event that Company misses any Shipping SLA as set forth in Exhibit A, it shall
be solely responsible for upgrading the shipping method to ensure on time
delivery in accordance with the terms of the Purchase Order. All upgraded
shipping shall be at Company’s sole cost and expense.

9. PAYMENTS TO COMPANY.

9.1 At the end of each week during the Term, Company will invoice CafePress for
the CafePress Cost for each Product as set forth in Exhibit A (“CafePress Cost”)
sold and shipped to CafePress Customers through the CafePress Service in the
preceding week. Company shall provide CafePress with a weekly reporting of
shipments of Products sold through the CafePress Services along with delivery of
the invoice for sales and shipments of Products occurring in the preceding week.
CafePress will remit payment to Company of the CafePress Cost for such Products
sold for which CafePress has received full payment from the CafePress Customer
within thirty (30) days of CafePress’ receipt of invoice from Company.

9.2 CafePress will be entitled to retain any amount received from CafePress
Customers over and above the CafePress Cost, including amounts relating to
shipping.

9.3 For all Products sold through the CafePress Service, CafePress will be
solely responsible for determining whether any sales or use tax is payable to
any governmental authority and, if so payable, withholding, collecting and
remitting to the appropriate governmental authority any such tax.

10. CUSTOMER SERVICE AND RETURNED PRODUCTS.

10.1 CafePress shall provide all CafePress Customer Service. Company shall
provide reasonable support to CafePress customer support in efforts to resolve
any shipping issues attributable to Company performance of its shipping
obligations under this Agreement.

10.2 CafePress will handle all returns/refunds/redos (collectively “Returns”) of
Products by any CafePress Customer in accordance with the policies found in the
CafePress Service at the time of the corresponding Purchase Order. The current
return policy for the CafePress Service as of the date hereof, is found on
www.cafepress.com. CafePress shall reimburse each Customer for Returns.

 

6

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10.3 Company shall be responsible for the cost of all Returns attributable to
Company’s non-performance of its manufacturing, fulfillment, shipping or other
obligations as set forth herein (each, a “Company Caused Return”). To the extent
that CafePress has paid Company the CafePress Cost relating to a Company Caused
Return, Company shall reimburse CafePress the CafePress Cost paid plus all
Shipping Costs related to such Company Caused Return. In the event of a Company
Caused Return before CafePress is obligated under Section 9 to make payment to
Company of the CafePress Cost relating to the applicable Product, CafePress
shall not have any obligation to make payment of the CafePress Cost with respect
to such Product, and Company shall be responsible for all Shipping Costs related
to such Company Caused Return.

11. INTELLECTUAL PROPERTY

11.1 Company and CafePress mutually acknowledge that each party owns the
intellectual property rights in its own products, services, Marks, and images,
including without limitation, those rights protected by patent, copyright,
trademark and trade secret laws. Nothing in this Agreement creates, or is
intended to create, and no party shall acquire through the use of the other
party’s intellectual property, any right, title or interest in the intellectual
property of the other, unless expressly provided for in this Agreement. Each
party agrees never to assert any right or interest in or to the Confidential
Information or intellectual property of the other party, except as expressly
provided for in this Agreement.

11.2 Company hereby grants to CafePress, during the Term, a worldwide,
non-transferable, non-exclusive, royalty-free, revocable right and license to
use the Company Marks, for the sole and exclusive purpose of promoting,
marketing, advertising and selling Products through the CafePress Service and
Third Party Distribution Channels as provided for in this Agreement.

11.3 CafePress hereby grants to Company, during the Term, a worldwide,
non-transferable, non-exclusive, royalty-free, revocable right and license to
use CafePress’ Confidential Information and intellectual property including, but
not limited to, the CafePress Service, CafePress Marks, and Images provided by
and/or belonging to CafePress, for the sole and exclusive purpose of fulfilling
Company’s obligations under this Agreement.

11.4 Any use by either party of the other party’s Marks shall not tarnish or
dilute the high-quality image and reputation of the other party and the goodwill
that the other party has established in its Marks. In the event that an owner of
a Mark determines, in its sole discretion, that such tarnishment or dilution has
occurred, or is likely to occur, the owner reserves the right to terminate all
rights to use the Marks granted herein to the other party. Neither during nor
after the termination of this Agreement shall a party assert any claim to the
other party’s Marks or associated goodwill. All uses of a Mark shall inure to
the benefit of the owner of such Mark.

11.5 Except as provided for in this Agreement, neither party shall use the other
party’s Marks in combination with or as part of a composite mark. In no event
shall either party cause any Internet domain names to be registered that
incorporate the other party’s Marks or any marks or names confusingly similar
thereto.

11.6 Each party agrees that it shall neither itself nor permit any other
individual or entity, to (i) disassemble, decompile, decrypt or reverse engineer
or in any other way attempt to discover or reproduce source or object code for,
any part of the other party’s owned or licensed intellectual property;
(ii) alter, modify, copy, distribute or prepare derivative works based on the

 

7

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other party’s owned or licensed intellectual property; (iii) make the other
party’s intellectual property available for use in a time-sharing, service
bureau or similar environment; or (iv) use any part of the other party’s
intellectual property to create, invent or develop any computer program or other
invention, work or device that performs, replicates, or utilizes the same or
substantially similar functions as the other party’s intellectual property.

11.7 Notwithstanding anything to the contrary in this Agreement, (i) as between
Company and CafePress, CafePress shall own any and all rights, including all
intellectual property rights, in and to the CafePress Service and business, and
(ii) as between Company and CafePress, Company shall own any and all rights,
including all intellectual property rights, in and to the Company Content.

12. REPRESENTATIONS AND WARRANTIES.

12.1 Each party represents and warrants to the other party (i) that it has the
full power and authority to enter into and perform under this Agreement;
(ii) the execution and performance by it of its obligations under this Agreement
do not constitute a breach of or conflict with any other agreement or
arrangement by which it is bound; (iii) this Agreement is a legal, valid and
binding obligation of the party executing this Agreement; and (iv) it will
comply with all applicable laws, regulations and rules in its performance of
this Agreement.

12.2 Company hereby represents and warrants that (A) the Products and any
resulting customized Product shall (i) be new and not used, reconditioned or
refurbished, and will comply in all material respects with all specifications
for the Product order, (ii) comply in all material respects with all applicable
federal and state laws, rules, regulations, and ordinances, (iii) be free from
material defects, and (iv) shall not infringe upon or violate the intellectual
property rights of any third party; (B) the Company Shipping Materials shall be
of commercially reasonable quality and meet legal and industry standards for
their intended purpose of shipping the Products to Customers; and (C) if
requested, Company shall supply CafePress will all necessary and customary
certificates of compliance for the Products. Notwithstanding the foregoing, the
Company shall not be in breach of any of the foregoing representations or
warranties if and to the extent such breach is the basis for a claim by the
Company against Café Press pursuant to that certain Asset Purchase Agreement by
and between the parties dated as of February 11, 2015.

12.3 Company hereby represents and warrants that it does not utilize forced,
prison, or indentured labor, subject workers to any form of compulsion or
coercion, participate in human trafficking, or any other conduct as defined by
The California Transparency in Supply Chains Act of 2010 and/or as prohibited by
any federal, state or international statutes or regulations. Company shall also
ensure that none of its suppliers participate in the activities set forth above.
CafePress, its customers, and its and their representatives, shall have the
right to conduct on-site and/or record audits to ensure Company’s compliance
with its obligations under this Section upon thirty (30) days written notice.

13. INDEMNITY. Each party will indemnify and hold the other party, its
affiliates, and their respective employees, representatives, agents, affiliates,
directors, officers, managers and shareholders (the “Indemnified Parties”)
harmless from any damage, loss, cost or expense (including without limitation,
reasonable attorneys’ fees and costs) incurred in connection with any third
party claim, demand or action (“Claim”) brought against any of the Indemnified
Parties

 

8

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insofar as such Claim alleges facts or circumstances that would constitute a
breach of any provision of the other party’s (“Indemnifying Party”)
representations and warranties herein. If the Indemnifying Party is obligated to
provide indemnification hereunder, the Indemnifying Party may in its sole and
absolute discretion, control the disposition of any Claim, provided however,
Indemnifying Party shall not settle, compromise, or in any other manner dispose
of any Claim without the consent of the Indemnified Party.

14. NOTICES. Notices to the parties shall be sent via overnight mail or U.S.
Certified Mail to the parties at the addresses listed above, or at such other
address as a party may provide.

15. GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to its principles
of conflict of laws.

16. CONFIDENTIALITY & CUSTOMER INFORMATION.

16.1 During the Term of this Agreement, either party may receive information
that is proprietary and confidential to the other regarding the business and
affairs of the other party, including without limitation, the terms of this
Agreement (“Confidential Information”). Confidential Information will include
identifiable information or contact information relating to CafePress Customers.
In no event may Company use any CafePress Customer information for any purpose
other than fulfilling Company’s obligations under this Agreement, such as
shipping and processing Product orders.

16.2 Each party shall hold all Confidential Information in confidence (using at
least the same measures as it does to protect its own Confidential Information
of a similar nature) and not disclose the Confidential Information to any third
party except to the extent permitted by the terms of this Agreement. Each party
shall use the other party’s Confidential Information only in the course of
performance of this Agreement and shall have the right to disclose the other
party’s Confidential Information only to its employees, representatives, agents
and contractors that need to know it, and only for the purpose of rendering
assistance to the party performing its obligations under this Agreement. A
disclosing party shall be liable for any breach of its confidentiality
obligations by any such employee, representative, agent or contractor.

16.3 The following shall not be deemed to be Confidential Information:
(i) information that is or becomes public knowledge or enters the public domain
through a source other than the recipient and through no fault of recipient;
(ii) information independently developed by or for the recipient;
(iii) information that was known by a party prior to commencement of discussions
regarding the subject matter of this Agreement; and (iv) information that is
required to be disclosed by applicable law, the laws of a securities market or
exchange or at the direction of a court or governmental body; provided however,
that the disclosing party shall use reasonable efforts to give the other party a
reasonable opportunity to intervene in order to prevent such disclosure or to
obtain a protective order, and that any Confidential Information disclosed
remains subject to the confidentiality obligations set forth in this Section.

 

9

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16.4 CafePress shall own all Customer information that it collects through the
CafePress Service. CafePress shall have the right to use its CafePress Customer
information as it desires, in its sole and absolute discretion, with no
obligation to provide Company with access to such information. Notwithstanding
the foregoing, any uses of Customer information by CafePress shall be in
accordance with CafePress’ Privacy Policy.

17. NO PARTNERSHIP. The relationship of the parties created hereby shall be that
of independent contractors. Nothing in this Agreement shall be construed to
create a partnership, joint venture or combined entity by or between CafePress
and Company or to make either the agent of the other and neither shall have the
authority to bind the other. CafePress and Company each agree not to hold itself
out as a partner, joint venturer, combined entity or agent of the other. Each
party is, and is intended to be, engaged in its own and entirely separate
business. Each party shall be solely responsible for determining the
applicability of, and compliance with, any and all present and future federal,
state and local laws, orders, codes, regulations, and ordinances which may be
applicable to each party and their respective businesses and employees.

18. FORCE MAJEURE. Neither party shall be liable under this Agreement by reason
of any delay or failure in the performance of its obligations under this
Agreement because of a Force Majeure Event. A “Force Majeure Event” shall mean
causes beyond the reasonable control of the parties including, but not limit to:
an act of nature, inevitable accident, fire, labor dispute, riot or civil
commotion, act of public enemy, act of terror and/or terrorism, governmental
act, regulation or rule, failure of technical facilities, inability to obtain
supplies, delays in transportation, embargos, or other reason beyond the control
of the parties that is generally regarded as force majeure. Delays or
non-performance excused by this provision shall not excuse performance of any
other obligation that is already outstanding on the date that the Force Majeure
Event occurs.

19. SEVERABILITY. If any provision of this Agreement or the application thereof
shall be invalid or unenforceable to any extent, the remainder of this Agreement
or the application thereof shall not be affected, and each remaining provision
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

20. SIGNIFICANCE OF PARAGRAPH HEADINGS. Paragraph headings contained hereunder
are solely for the purpose of aiding in speedy location of subject matter and
are not in any sense to be given weight in the construction of this Agreement.
Accordingly, in case of any question with respect to the construction of this
Agreement, it is to be construed as though paragraph headings had been omitted.

21. DISCLAIMER OF WARRANTIES. CAFEPRESS DOES NOT REPRESENT OR WARRANT THAT THE
CAFEPRESS SERVICE OR ITS USE (I) WILL BE UNINTERRUPTED; (II) WILL BE FREE OF
INACCURACIES OR ERRORS; (III) WILL MEET COMPANY’S REQUIREMENTS; OR (IV) WILL
OPERATE IN THE CONFIGURATION OR WITH THE HARDWARE OR SOFTWARE COMPANY USES.
CAFEPRESS MAKES NO WARRANTIES OTHER THAN THOSE MADE EXPRESSLY IN THIS AGREEMENT,
AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY AND
NON-INFRINGEMENT. COMPANY MAKES NO WARRANTIES OTHER THAN THOSE MADE EXPRESSLY IN
THIS AGREEMENT, AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY AND NON-INFRINGEMENT.

 

10

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22. LIMITATION OF LIABILITY.

22.1 EXCEPT IN CONNECTION WITH A PARTY’S INDEMNIFICATION AND CONFIDENTIALITY
OBLIGATIONS HEREIN, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
(INCLUDING DAMAGES RELATING TO LOST PROFITS, LOST DATA OR LOSS OF GOODWILL),
EXEMPLARY, OR PUNITIVE DAMAGES WHETHER SUCH CLAIM IS BASED ON WARRANTY,
CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, ARISING FROM ANY CLAIM
RELATING TO OR CONNECTED WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, EVEN
IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

22.2 EXCEPT IN CONNECTION WITH INDEMNITY, CONFIDENTIALITY, AND PAYMENT
OBLIGATIONS IN THIS AGREEMENT, IN NO EVENT WILL THE LIABILITY OF EITHER PARTY IN
CONNECTION WITH THIS AGREEMENT EXCEED $50,000.

23. CONSTRUCTION. Both of the parties have participated in the negotiation and
preparation of this Agreement and therefore waive any rule of law or judicial
precedent that provides that contractual ambiguities are to be construed against
the party who shall have drafted the contract in question.

24. COORDINATION & PUBLIC RELATIONS.

24.1 CafePress and Company shall cooperate with respect to public relations
regarding this Agreement and the relationship between the parties and each party
shall obtain the prior consent of the other party before publishing any press
releases.

24.2 Each party will designate at least one representative to be the point of
contact from their respective company to manage the business relationship
created hereunder and shall provide the name and contact information of such
individual promptly following execution of this Agreement.

25. RECORDS. During the Term, and for one (1) year after the expiration or
termination of this Agreement, each party shall keep, maintain and preserve
complete and accurate records relating to the Purchase Order(s), Product(s) and
services provided under this Agreement including, without limitation, purchase
orders, inventory records, invoices, correspondence, banking, financial and
other records. During the Term, and for one (1) year after the expiration or
termination of this Agreement, no more than once annually either party or its
representatives may, during normal business hours and upon twenty (20) days’
written notice, audit the records of the other party where such records are
regularly maintained solely for the purpose of determining the other party’s
compliance with the terms and obligations of this Agreement. The auditing party
is entitled to share its conclusions with third-parties and generally provide
the bases therefore, but shall in all events maintain the confidentiality of the
audited party’s records. Any and all costs of audits performed by or for a party
shall be solely at the expense of such party, except that if the undisputed
results of such audit reveal that the audited party has overcharged or
underpaid, the audited party will promptly make full restitution to the auditing
party for all such reasonable and customary documented amounts. In addition, in
the event the audit reveals that the audited party has overcharged or underpaid
the auditing party by more

 

11

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than ten percent (10%) of the amount the audited party should have charged or
paid, in addition to promptly making full restitution to the auditing party as
well as any other legal and equitable rights and remedies available to the
auditing party, the audited party will promptly reimburse the auditing party in
full for the reasonable and documented costs of the audit. Such audit shall not
interfere with or otherwise impede either party’s business activities in any
manner. Any individual or entity performing an audit on behalf of the auditing
party shall be subject to and abide by the audited party’s standard
non-disclosure agreement.

26. ASSIGNMENT. Neither party shall assign this Agreement or any of the rights,
duties or privileges contained herein, in whole or in part, without the express
written consent of the other, except that a party may assign this Agreement in
connection with the sale of all or substantially all of its assets, provided
that the assignee agrees to be bound by all of the terms and conditions of this
Agreement.

27. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between Company and CafePress with respect to the subject matter hereof and
cannot be altered or modified except by an agreement in writing signed by both
Company and CafePress. Upon its execution, this Agreement shall supersede all
prior negotiations, understandings, and agreements with respect to the subject
matter hereof, whether oral or written, and such prior agreements shall
thereupon be null and void and without further legal effect.

28. EXECUTION. This Agreement may be executed in multiple counterparts,
including, but not limited to execution by facsimile, each of which shall be
deemed an original, but all of which shall constitute the same document. Each
party waives any legal requirement that this Agreement be embodied, stored or
reproduced in tangible media, and agrees that an electronic reproduction will be
given the same legal force and effect as a signed writing.

Agreed and accepted:

 

COMPANY: CAFEPRESS: By:

 

By:

 

Name:

 

Name:

 

Title:

 

Title:

 

Date:

 

Date:

 

 

12

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Exhibit A

 

13

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EXHIBIT C

ASSIGNMENT AND ASSUMPTION AGREEMENT

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ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assumption Agreement”) is entered
into as of                     , 2015, by and between Circle Graphics, Inc., a
Delaware corporation (“Buyer”) and CafePress Inc., a Delaware corporation
(“Seller”).

W I T N E S S E T H

WHEREAS, this Assignment and Assumption Agreement is delivered pursuant to
Section 4.2 of that certain Asset Purchase Agreement (the “Agreement”) dated as
of February             , 2015 by and among Seller and Buyer. Unless otherwise
specifically defined herein, all terms used herein and defined in the Agreement
shall have the meanings assigned to them in the Agreement.

WHEREAS, pursuant to the Agreement, Seller has agreed to transfer, sell, convey,
assign and deliver to Buyer the Assets, as more fully described in Section 2.1
of the Agreement, but not including the Excluded Assets, as more fully described
in Section 2.2 of the Agreement.

WHEREAS, Buyer has agreed to assume the Assumed Liabilities, as more fully
described in Section 2.3 of the Agreement, not including those Excluded
Liabilities, as more fully described in Section 2.4 of the Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:

1. Effective as of the Closing, Seller hereby sells, conveys, transfers,
assigns, and delivers to Buyer or the Designated Purchaser, as applicable,
subject to and pursuant to the terms and conditions of the Agreement, all right,
title and interest in and to the Assets (including, without limitation, the
Assigned Contracts, but excluding the Excluded Assets).

2. Buyer hereby accepts the foregoing assignment and transfer of the Assets.

3. Buyer hereby assumes and agrees to pay, perform, fulfill and discharge, as
and when due, and in accordance with the terms thereof, the Assumed Liabilities.
Neither Buyer nor any of its Affiliates assumes or will otherwise become liable
for any of the Excluded Liabilities.

4. Nothing contained in this Assumption Agreement shall be deemed to supersede
any of the obligations, agreements, covenants, representations and warranties of
Seller or Buyer contained in the Agreement, and this Assumption Agreement is
made and accepted subject to all of the terms, conditions, representations and
warranties set forth in the Agreement, all of which survive execution and
delivery of this Assumption Agreement as set forth in the Agreement. Nothing
contained in this Assumption Agreement may be construed as a waiver of any of
the rights or remedies of the Seller or Buyer as set forth in, or arising in
connection with, the Agreement or any other instrument or document delivered by
the Seller or Buyer pursuant to the Agreement. In the event of any ambiguity or
conflict between the terms hereof and the Agreement, the terms of the Agreement
shall govern and control.

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5. This Assumption Agreement may be executed in any number of counterparts, each
of which when executed by the parties hereto and delivered shall be deemed to be
an original, and all such counterparts taken together shall be deemed to be but
one and the same instrument. This Agreement may be executed and delivered by
facsimile of .PDF signature, and upon delivery of such facsimile or .PDF
signature will be deemed to have the same effect as if the original signature
had been delivered to the other party.

6. This Assumption Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the state of Delaware, excluding that body
of law pertaining to conflicts of laws.

7. Neither this Assumption Agreement nor any term hereof may be changed, waived,
discharged or terminated other than by an instrument in writing signed by the
parties hereto. No failure to enforce any provision of this Assumption Agreement
shall be deemed to or shall constitute a waiver of such provision and no waiver
of any of the provisions of this Assumption Agreement shall be deemed to or
shall constitute a waiver of any other provision hereof nor shall such waiver
constitute a continuing waiver.

8. Nothing in this Assumption Agreement, express or implied, is intended to or
shall (a) confer on any Person other than the parties to this Assumption
Agreement and their respective permitted successors or assigns any rights
(including, without limitation, third party beneficiary rights), remedies,
obligations or liabilities under or by reason of this Assumption Agreement or
(b) constitute the parties to this Assumption Agreement as partners or as
participants in a joint venture. Except as expressly provided by this Assumption
Agreement, this Assumption Agreement shall not provide third parties with any
remedy, claim, liability, reimbursement, cause of action or other right in
excess of those existing without reference to the terms of this Assumption
Agreement.

[Remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement as of the date first above written.

 

BUYER CIRCLE GRAPHICS, INC. By

 

Name

 

Title

 

CAFEPRESS INC. By

 

Name

 

Title

 

SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT

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EXHIBIT D

BILL OF SALE

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BILL OF SALE

THIS BILL OF SALE (this “Bill of Sale Agreement”), is entered into as of
            , 2015, by and between CIRCLE GRAPHICS, INC., a Delaware corporation
(“Buyer”) and CAFEPRESS INC., a Delaware corporation (“Seller”).

W I T N E S S E T H:

WHEREAS, Seller and Buyer have entered into an Asset Purchase Agreement dated as
of February             , 2015 (the “Agreement”), pursuant to which Seller has
agreed to sell all of the right, title and interest of Seller in and to the
Assets (as defined in the Agreement) to Buyer, and Buyer has agreed to acquire
the Assets from Seller, all subject to the terms and conditions provided herein
and in the Agreement.

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

1. Sale of Assets. For good and valuable consideration, and subject to the
provisions of Section 2.5 of the Agreement, Seller hereby sells, conveys,
transfers, assigns and delivers to Buyer all of the right, title and interest of
Seller in and to the Assets as more fully described in Section 2.1 of the
Agreement, but not including the Excluded Assets, as more fully described in
Section 2.2 of the Agreement. Nothing contained in this Bill of Sale Agreement
shall be deemed to supersede any of the obligations, agreements, covenants,
representations and warranties of Seller or Buyer contained in the Agreement,
and this Bill of Sale Agreement is made and accepted subject to all of the
terms, conditions, representations and warranties set forth in the Agreement,
all of which survive execution and delivery of this Bill of Sale Agreement as
set forth in the Agreement. Nothing contained in this Bill of Sale Agreement may
be construed as a waiver of any of the rights or remedies of the Seller or Buyer
as set forth in, or arising in connection with, the Agreement or any other
instrument or document delivered by the Seller or Buyer pursuant to the
Agreement. In the event of any ambiguity or conflict between the terms hereof
and the Agreement, the terms of the Agreement shall govern and control.

2. Assignment. This Bill of Sale Agreement may not be assigned by any party
hereto without the prior written consent of the other parties; provided, that
Buyer may, without the prior written consent of Seller, assign any or all of its
rights or obligations under this Bill of Sale Agreement to any Affiliate of
Buyer. Subject to the foregoing, this Bill of Sale Agreement and the provisions
hereof shall be binding upon and inure to the benefit of each of the parties and
their successors and assigns. Nothing in this Bill of Sale Agreement, express or
implied, is intended to or shall (a) confer on any Person other than the parties
to this Bill of Sale Agreement and their respective permitted successors or
assigns any rights (including, without limitation, third party beneficiary
rights), remedies, obligations or liabilities under or by reason of this Bill of
Sale Agreement or (b) constitute the parties to this Bill of Sale Agreement as
partners or as participants in a joint venture. Except as expressly provided by
this Bill of Sale Agreement, this Bill of Sale Agreement shall not provide third
parties with any remedy, claim, liability, reimbursement, cause of action or
other right in excess of those existing without reference to the terms of this
Bill of Sale Agreement.

3. Governing Law. This Bill of Sale Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware, as if both parties hereto were resident and doing business in such
state, excluding that body of law pertaining to conflicts of laws.

 

BILL OF SALE

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4. Heading; Terms. Any captions to, or headings of, the sections of this Bill of
Sale Agreement are solely for the convenience of the parties hereto, are not a
part of this Bill of Sale Agreement, and shall not be used for the
interpretation of this Bill of Sale Agreement. Unless otherwise specifically
defined herein, all terms used herein and defined in this Bill of Sale Agreement
shall have the meanings assigned to them in the Agreement.

5. Counterpart. This Bill of Sale Agreement may be executed in any number of
counterparts, each of which when executed by the parties hereto and delivered
shall be deemed to be an original, and all such counterparts taken together
shall be deemed to be but one and the same instrument. This Bill of Sale
Agreement may be executed and delivered by facsimile or .PDF signature, and upon
delivery of such facsimile signature or .PDF signature will be deemed to have
the same effect as if the original signature had been delivered to the other
party.

6. Waiver. Neither this Bill of Sale Agreement nor any term hereof may be
changed, waived, discharged or terminated other than by an instrument in writing
signed by the parties hereto. No failure to enforce any provision of this Bill
of Sale Agreement shall be deemed to or shall constitute a waiver of such
provision and no waiver of any of the provisions of this Bill of Sale Agreement
shall be deemed to or shall constitute a waiver of any other provision hereof
nor shall such waiver constitute a continuing waiver.

[Remainder of this page is intentionally left blank.]

 

BILL OF SALE

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IN WITNESS WHEREOF, Buyer and Seller have duly executed this Bill of Sale
Agreement as of the date set forth above.

 

BUYER

 

CIRCLE GRAPHICS, INC.

By

 

Name

 

Title

 

SELLER CAFEPRESS INC. By

 

Name

 

Title

 

 

BILL OF SALE

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EXHIBIT E

IP ASSIGNMENT AGREEMENT

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IP ASSIGNMENT AGREEMENT

THIS IP ASSIGNMENT AGREEMENT (the “IP Assignment Agreement”) is entered into as
of             , 2015, and is made by CafePress Inc., a Delaware corporation
(“Seller”) located at 6901 A Riverport Drive, Louisville, Kentucky 40258, in
favor of Circle Graphics, Inc., a Delaware corporation (“Buyer”) located at
[address], which is the purchaser of certain assets of Seller pursuant to an
Asset Purchase Agreement (the “Agreement”) dated as of February             ,
2015 by and among Seller and Buyer.

W I T N E S S E T H

WHEREAS, this IP Assignment Agreement is delivered pursuant to Section 4.2 of
the Agreement, under which Seller has conveyed, transferred and assigned to
Buyer, among other assets, certain intellectual property of Seller, and has
agreed to execute and deliver this IP Assignment Agreement for recording with
the United States Patent and Trademark Office, the United States Copyright
Office and corresponding entities or agencies in any applicable jurisdictions.

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:

1. Effective as of the Closing, Seller hereby sells, conveys, transfers,
assigns, and delivers to Buyer, and Buyer hereby accepts, in each case subject
to and pursuant to the terms and conditions of the Agreement, all right, title
and interest in and to the following (the “Assigned IP”):

(a) the patents and patent applications set forth on Schedule 1 hereto and all
issuances, divisions, continuations, reissues, extensions, reexaminations and
renewals thereof (the “Patents”);

(b) the trademark registrations and applications set forth on Schedule 2 hereto
and all issuances, extensions and renewals thereof (the “Trademarks”), together
with the goodwill of the business connected with the use of, and symbolized by,
the Trademarks;

(c) the copyright registrations and applications for registration set forth on
Schedule 3 hereto and all issuances, extensions and renewals thereof (the
“Copyrights”); and

(d) all rights of any kind whatsoever of Seller accruing under any of the
foregoing provided by applicable law of any jurisdiction, by international
treaties and conventions and otherwise throughout the world.

2. Seller hereby authorizes the Commissioner of Patents and the Commissioner for
Trademarks of the United States Patent and Trademark Office, the Register of
Copyrights in the United States Copyright Office, and the officials of
corresponding entities or agencies in any applicable jurisdictions to record and
register this IP Assignment Agreement upon request by Buyer.

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3. Nothing contained in this IP Assignment Agreement shall be deemed to
supersede any of the obligations, agreements, covenants, representations and
warranties of Seller or Buyer contained in the Agreement, and this IP Assignment
Agreement is made and accepted subject to all of the terms, conditions,
representations and warranties set forth in the Agreement, all of which survive
execution and delivery of this IP Assignment Agreement as set forth in the
Agreement. Nothing contained in this IP Assignment Agreement may be construed as
a waiver of any of the rights or remedies of the Seller or Buyer as set forth
in, or arising in connection with, the Agreement or any other instrument or
document delivered by the Seller or Buyer pursuant to the Agreement. In the
event of any ambiguity or conflict between the terms hereof and the Agreement,
the terms of the Agreement shall govern and control.

4. This IP Assignment Agreement may be executed in any number of counterparts,
each of which when executed by the parties hereto and delivered shall be deemed
to be an original, and all such counterparts taken together shall be deemed to
be but one and the same instrument. This IP Assignment Agreement may be executed
and delivered by facsimile of .PDF signature, and upon delivery of such
facsimile or .PDF signature will be deemed to have the same effect as if the
original signature had been delivered to the other party.

5. This IP Assignment Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the state of Delaware, excluding that
body of law pertaining to conflicts of laws.

6. Neither this IP Assignment Agreement nor any term hereof may be changed,
waived, discharged or terminated other than by an instrument in writing signed
by the parties hereto. No failure to enforce any provision of this IP Assignment
Agreement shall be deemed to or shall constitute a waiver of such provision and
no waiver of any of the provisions of this IP Assignment Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof nor shall
such waiver constitute a continuing waiver.

7. Nothing in this IP Assignment Agreement, express or implied, is intended to
or shall (a) confer on any Person other than the parties to this IP Assignment
Agreement and their respective permitted successors or assigns any rights
(including, without limitation, third party beneficiary rights), remedies,
obligations or liabilities under or by reason of this IP Assignment Agreement or
(b) constitute the parties to this IP Assignment Agreement as partners or as
participants in a joint venture. Except as expressly provided by this IP
Assignment Agreement, this IP Assignment Agreement shall not provide third
parties with any remedy, claim, liability, reimbursement, cause of action or
other right in excess of those existing without reference to the terms of this
IP Assignment Agreement.

[Signature Page Follows]

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

 

BUYER

 

CIRCLE GRAPHICS, INC.

By

 

Name

 

Title

 

SELLER CAFEPRESS INC. By

 

Name

 

Title

 

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SCHEDULE 1

ASSIGNED PATENTS AND PATENT APPLICATIONS

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SCHEDULE 2

ASSIGNED TRADEMARKS REGISTRATIONS AND TRADEMARK APPLICATIONS

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SCHEDULE 3

ASSIGNED COPYRIGHTS REGISTRATIONS AND APPLICATIONS

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EXHIBIT F

ESCROW AGREEMENT

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ESCROW AGREEMENT

This Escrow Agreement (“Agreement”), dated as of [•], 2015, is by and among
Circle Graphics, Inc., a Delaware corporation (“Buyer”), CafePress Inc., a
Delaware corporation (“Seller” and, together with Buyer, the “Escrow Parties”),
and BNY Mellon, National Association, a national banking association with its
principal place of business at BNY Mellon Center, Pittsburgh, PA 15258 (the
“Escrow Agent”). Capitalized terms used but not defined herein shall have the
meaning ascribed to them in that certain Asset Purchase Agreement (the “Purchase
Agreement”) dated as of February 11, 2015, by and between Buyer and Seller.

WHEREAS, subject to the terms and conditions of the Purchase Agreement,
effective on the Closing Date, Seller has agreed to sell, assign, transfer,
convey and deliver to Buyer or the Designated Purchaser, and Buyer or the
Designated Purchaser has agreed to purchase and acquire from Seller, all of its
rights, title and interest in and to the Assets;

WHEREAS, pursuant to Section 3.1(a)(i) of the Purchase Agreement, Buyer has
agreed to deposit at the Closing certain funds with the Escrow Agent to be held
and disbursed by the Escrow Agent in accordance with the terms and conditions of
this Agreement; and

WHEREAS, the parties desire to set forth their understandings with regard to the
Escrow Account (as defined below) established by this Agreement.

NOW, THEREFORE, in consideration of the premises and agreements of the parties
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

1. Appointment of Escrow Agent. The Escrow Parties appoint the Escrow Agent as
their agent to hold in escrow, and to administer the disposition of, the Escrow
Account in accordance with the terms of this Agreement, and the Escrow Agent
accepts such appointment.

2. Establishment of Escrow. Upon the execution of this Agreement and in
accordance with Section 3.1(a)(i) of the Purchase Agreement, Buyer shall deposit
with the Escrow Agent in immediately available funds an amount equal to
$3,780,000 (the “Initial Deposit”), and Escrow Agent shall promptly, upon
request, acknowledge to the Escrow Parties receipt of any funds so deposited.
The Initial Deposit, and all additional amounts now or hereafter deposited with
the Escrow Agent (if any), together with all interest, dividends and other
income earned, shall be referred to as the “Escrow Fund.” The Escrow Agent shall
maintain the Escrow Fund in an escrow account (the “Escrow Account”).
Additionally, upon execution of this Agreement, one of the Escrow Parties shall
deliver one fully executed copy of this Agreement to the Escrow Agent in
accordance with the Notice section below. The Escrow Parties acknowledge that
the sum held in escrow hereunder may be reduced or increased from time to time
during the term hereof pursuant to the terms of this Agreement. Accordingly, the
term “Escrow Fund” shall refer both to the Initial Deposit and to such lesser or
greater amount as may be held pursuant hereto at any point during the term
hereof.

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3. Customer Identification and TIN Certification.

 

  (a) To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify
and record information that identifies each individual or entity that opens an
account. Therefore, the Escrow Agent must obtain the name, address, taxpayer or
other government identification number, and other information, such as date of
birth for individuals, for each individual and business entity that is a party
to this Agreement. For individuals signing this Agreement on their own behalf or
on behalf of another, the Escrow Agent requires a copy of a driver’s license,
passport or other form of photo identification. For business and other entities
that are parties to this Agreement, the Escrow Agent will require such
documents, as it deems necessary to confirm the legal existence of the entity.

 

  (b) At the time of or prior to execution of this Agreement, each Escrow Party
providing a tax identification number for tax reporting purposes shall provide
to the Escrow Agent a completed IRS Form W-9 (or the appropriate IRS Form W-8,
in the case of non U.S. persons), and every individual executing this Agreement
on behalf of an Escrow Party shall provide to the Escrow Agent a copy of a
driver’s license, passport or other form of photo identification acceptable to
the Escrow Agent. The Escrow Parties agree to provide to the Escrow Agent such
organizational documents and documents establishing the authority of any
individual acting in a representative capacity as the Escrow Agent may require
in order to comply with its established practices, procedures and policies.

 

  (c) The Escrow Agent is authorized and directed to report all interest and
other income earned on the Escrow Fund in accordance with the IRS Form W-9 (or
the appropriate IRS Form W-8, in the case of non U.S. persons) provided to the
Escrow Agent by the Seller. The Escrow Parties agree to treat the Escrow Fund as
owned by the Seller solely for tax purposes and the Seller agrees to file all
tax returns consistently with such treatment. The Escrow Agent shall have no
obligation to distribute interest or other income earned with respect to the
Escrow Fund until such interest or other income becomes due and payable in
accordance with the terms of the account in which such Escrow Fund is deposited
pursuant to Section 4 below. Any payments of funds from the Escrow Fund shall be
subject to applicable withholding and reporting regulations then in force in the
United States or any other jurisdictions, if applicable, including the filing of
information returns with the Internal Revenue Service and the issuance of IRS
Form 1099 to and in the name of the Seller. The Escrow Parties understand that,
in the event one or more tax identification numbers are not certified to the
Escrow Agent, the Internal Revenue Code, as amended from time to time, may
require withholding of a portion of any interest or other income earned on the
Initial Deposit.

 

  (d) The Escrow Agent shall have no duty to prepare or file any information
reports (including without limitation IRS Forms 1099-B) other than such
information reports of interest earned on the Escrow Fund as the Escrow Agent is
required to prepare and file in the ordinary course of its business.

 

2

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4. Deposit of the Escrow Fund. The Escrow Agent shall deposit the Escrow Fund in
one or more deposit accounts at BNY Mellon, National Association in accordance
with such written instructions and directions as may from time to time be
provided to the Escrow Agent by the Escrow Parties. In the event that the Escrow
Agent does not receive written instructions, the Escrow Agent shall deposit the
Escrow Fund in a checking with interest deposit account at BNY Mellon, National
Association. Deposits shall in all instances be subject to the Escrow Agent’s
standard funds availability policy. The Escrow Parties understand that deposits
of the Escrow Fund are not necessarily insured by the United States Government
or any agency or instrumentality thereof, or of any state or municipality. In no
instance shall the Escrow Agent have any obligation to provide investment advice
of any kind. The Escrow Agent shall not be liable or responsible for any loss
resulting from any deposits made pursuant to this Section 4, other than as a
result of the bad faith, gross negligence or willful misconduct of the Escrow
Agent.

5. Release of the Escrow Fund. The Escrow Agent shall only disburse amounts from
the Escrow Fund as follows:

 

  (a) Final Determination. At any time prior to the Release Date (as defined
below), Buyer or Seller may deliver a written notice to the Escrow Agent that a
Final Determination pursuant to Section 10.2(i) of the Purchase Agreement has
been made (together with a copy of such Final Determination, as applicable),
setting forth the amount to be paid, the recipient and instructions for the
payment of such amount, such notice to be executed by both Buyer and Seller (the
“Payment Notice”). The Escrow Agent shall verify only that the Payment Notice
sets forth an amount to be paid, the recipient and instructions for the payment
of such amount. To the extent that the Escrow Agent finds that the delivered
Payment Notice fails to set forth an amount to be paid, the recipient or
instructions for the payment of such amount, the Escrow Agent shall notify the
delivering party promptly to provide the missing information. Notwithstanding
the foregoing, the Escrow Agent shall not inquire into or consider whether the
requirements of Section 10.2(i) of the Purchase Agreement have been satisfied.
If the Escrow Agent receives a Payment Notice and there is no missing
information which remains uncured after the delivering party has been notified
in accordance with this Section 5(a), the Escrow Agent shall distribute the
Escrow Fund or any portion thereof in accordance with the payment instructions
set forth in the Payment Notice from the Escrow Account as soon thereafter as
possible using commercially reasonable efforts, but in any event, no later than
three (3) business days following the Escrow Agent’s receipt of a complete
Payment Notice.

 

  (b) Unresolved Claims. If at any time prior to the Release Date, Buyer shall
deliver written notice to the Escrow Agent of claims for indemnification pending
pursuant to Section 10 of the Purchase Agreement that have not yet been reduced
to a Final Determination (“Unresolved Claims”), indicating in such notice the
amount(s) of such claims, the Escrow Agent shall reserve such amount(s) in the
Escrow Fund and not distribute such reserved amount(s) unless and until it
receives a Payment Notice pursuant to Section 5(a) hereof, or a Joint Direction
pursuant to Section 5(e) hereof.

 

  (c) Termination. With respect to the Escrow Fund, the “Release Date” shall be
the earlier of (i) 15 months from the date hereof, or (ii) the date the Escrow
Agent no longer holds any Escrow Fund hereunder as a result of the distribution
of all of the Escrow Account

 

3

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  pursuant to the terms set forth herein. Within two (2) business days after the
Release Date or as soon thereafter as possible using commercially reasonable
efforts, the Escrow Agent shall deliver any remaining amounts in the Escrow
Account to the Seller (or as otherwise directed in writing by the Seller) unless
any Unresolved Claims are pending, in which case (y) such portion of the Escrow
Account as is necessary to satisfy the aggregate amount of the then-pending
Unresolved Claims shall be retained by the Escrow Agent until the Escrow Agent
receives notice that each such claim has been finally resolved in accordance
with Section 5(b) (and such amounts for each claim may be disbursed pursuant to
this Section 5 as and when the Escrow Agent receives a Payment Notice or Joint
Direction as contemplated by Section 5(b) with respect to such claim) and
(z) the balance of the Escrow Account, if any, shall be distributed to the
Seller or as otherwise directed in writing by the Seller.

 

  (d) Insufficient Funds on Release. Notwithstanding anything to the contrary in
this Agreement, if any amount to be released at any time or under any
circumstances exceeds the balance in the Escrow Account, the Escrow Agent shall
release the balance in the Escrow Fund and shall have no liability or
responsibility to the Escrow Parties for any deficiency unless such deficiency
is a result of the bad faith, gross negligence or willful misconduct of the
Escrow Agent.

 

  (e) Joint Direction. Notwithstanding the other provisions of this Section 5,
if at any time Buyer and the Seller jointly execute and deliver written
instructions in substantially the form of Exhibit A attached hereto (a “Joint
Direction”), the Escrow Agent shall disburse from the applicable Escrow Account
the amounts referred to in such Joint Direction in accordance with the
instructions contained therein. The Seller and Buyer will in good faith deliver
a Joint Direction upon any mutual agreement that any amounts are owed from the
applicable Escrow Account pursuant to the terms of the Purchase Agreement,
including pursuant to final determination of any Purchase Price adjustment
pursuant to the terms of Section 3.1(b) of the Purchase Agreement.

6. Methods of Payment. All payments required to be made by the Escrow Agent
under this Agreement shall be made by wire transfer or by check in accordance
with written payment instructions provided to the Escrow Agent by the party
receiving the funds. Any wire transfers shall be made subject to, and in
accordance with, the Escrow Agent’s normal funds transfer procedures in effect
from time to time. The Escrow Agent shall be entitled to rely upon all bank and
account information provided to the Escrow Agent by any of the Escrow Parties.
The Escrow Agent shall have no duty to verify or otherwise confirm any written
wire transfer instructions but it may do so in its discretion on any occasion
without incurring any liability to any of the Escrow Parties for failing to do
so on any other occasion. Any such verification may include, but not be limited
to, a telephone call to the party receiving the funds or to one or more of the
Escrow Parties in accordance with Section 14. The Escrow Parties agree that any
such call back is a commercially reasonable security procedure and that the
Escrow Agent may record such calls according to the Escrow Agent’s standard
operating procedures or as the Escrow Agent deems appropriate for security
and/or service purposes. The Escrow Agent shall process all wire transfers based
on bank identification and account numbers rather than the names of the intended
recipient of the funds, even if such numbers pertain to a recipient other than
the

 

4

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recipient identified in the payment instructions. The Escrow Agent shall have no
duty to detect any such inconsistencies and shall resolve any such
inconsistencies by using the account number. Attached as Exhibit B is the wire
transfer information for the Escrow Parties. The Escrow Parties shall promptly
notify the Escrow Agent of any changes to their wire transfer information
contained in Exhibit B and the Escrow Agent may rely on the wire transfer
information contained in Exhibit B until notified of a change in writing.

7. Responsibilities and Liability of Escrow Agent.

(a) Duties Limited. The Escrow Agent undertakes to perform only such duties as
are expressly set forth in this Agreement. The Escrow Agent’s duties shall be
determined only with reference to this Agreement and applicable laws and it
shall have no implied duties. The Escrow Agent shall not be bound by, deemed to
have knowledge of, or have any obligation to make inquiry into or consider, any
term or provision of any agreement between any of the Escrow Parties and/or any
other third party or as to which the escrow relationship created by this
Agreement relates, including without limitation any documents referenced in this
Agreement.

(b) Limitations on Liability of Escrow Agent.

 

  (i) Except in cases of the Escrow Agent’s bad faith, willful misconduct or
gross negligence, the Escrow Agent shall be fully protected (x) in acting in
reliance upon any certificate, statement, request, notice, advice, instruction,
direction, other agreement or instrument or signature reasonably and in good
faith believed by the Escrow Agent to be genuine, (y) in assuming that any
person purporting to give the Escrow Agent any of the foregoing in connection
with either this Agreement or the Escrow Agent’s duties, has been duly
authorized to do so, and (z) in acting or failing to act in good faith on the
advice of any counsel retained by the Escrow Agent. The Escrow Agent shall not
be liable for any mistake of fact or law or any error of judgment, or for any
act or omission, except as a result of its bad faith, willful misconduct or
gross negligence. The Escrow Agent shall not be responsible for any loss
incurred upon any action taken under circumstances not constituting bad faith,
willful misconduct or gross negligence.

 

  (ii) In connection with any payments that the Escrow Agent is instructed to
make by wire transfer, the Escrow Agent shall not be liable for the acts or
omissions of (y) any Escrow Party or other person providing such instructions,
including without limitation errors as to the amount, bank information or bank
account number; or (z) any other person or entity, including without limitation
any Federal Reserve Bank, any transmission or communications facility, any funds
transfer system, any receiver or receiving depository financial institution, and
no such person or entity shall be deemed to be an agent of the Escrow Agent.

 

5

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  (iii) Without limiting the generality of the foregoing, it is agreed that in
no event will the Escrow Agent be liable for any lost profits or other indirect,
special, incidental or consequential damages which the parties may incur or
experience by reason of having entered into or relied on this Agreement or
arising out of or in connection with the Escrow Agent’s services, even if the
Escrow Agent was advised or otherwise made aware of the possibility of such
damages; nor shall the Escrow Agent be liable for acts of God, acts of war,
breakdowns or malfunctions of machines or computers, interruptions or
malfunctions of communications or power supplies, labor difficulties, actions of
public authorities, or any other similar cause or catastrophe beyond the Escrow
Agent’s reasonable control.

 

  (iv) In the event that the Escrow Agent shall be uncertain as to its duties or
rights under this Agreement, or shall receive any certificate, statement,
request, notice, advice, instruction, direction or other agreement or instrument
from any other party with respect to the Escrow Fund which, in the Escrow
Agent’s reasonable and good faith opinion, is in conflict with any of the
provisions of this Agreement, or shall be advised that a dispute has arisen with
respect to the Escrow Fund or any part thereof, the Escrow Agent shall be
entitled, without liability to any person, to refrain from taking any action
other than to keep safely the Escrow Fund until the Escrow Agent shall be
directed otherwise in accordance with Joint Direction or an order of a court
with jurisdiction over the Escrow Agent. The Escrow Agent shall be under no duty
to institute or defend any legal proceedings, although the Escrow Agent may, in
its discretion and at the expense of the Escrow Parties as provided in
subsections (c) or (d) immediately below, institute or defend such proceedings.

(c) Indemnification of Escrow Agent. The Escrow Parties agree jointly and
severally to indemnify the Escrow Agent for, and to hold it harmless against,
any and all claims, suits, actions, proceedings, investigations, judgments,
deficiencies, damages, settlements, liabilities and expenses (including
reasonable documented legal fees and expenses of outside counsel chosen by the
Escrow Agent) as and when incurred, arising out of or based upon any act,
omission, alleged act or alleged omission by the Escrow Agent or any other
cause, in any case in connection with the acceptance of, or performance or
non-performance by the Escrow Agent of, any of the Escrow Agent’s duties under
this Agreement, except as a result of the Escrow Agent’s bad faith, willful
misconduct or gross negligence.

(d) Authority to Interplead. The Escrow Parties authorize the Escrow Agent, if
the Escrow Agent is threatened with litigation or is sued, to interplead all
interested parties in any court of competent jurisdiction and to deposit the
Escrow Fund with the clerk of that court. In the event of any dispute under this
Agreement, the Escrow Agent shall be entitled to petition a court of competent
jurisdiction and shall perform any acts ordered by such court.

 

6

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8. Termination. This Agreement and all the obligations of the Escrow Agent under
this Agreement shall terminate upon the earlier to occur of the date the Escrow
Agent releases the entire Escrow Fund in accordance with this Agreement or the
date on which the Escrow Agent deposits the Escrow Fund in accordance with
Section 7(d) hereof.

9. Removal of Escrow Agent. The Escrow Parties acting together shall have the
right to terminate the appointment of the Escrow Agent, specifying the date upon
which such termination shall take effect. Thereafter, the Escrow Agent shall
have no further obligation to the Escrow Parties except to hold the Escrow Fund
as depository and not otherwise. The Escrow Parties agree that they will jointly
appoint a banking corporation, trust company or attorney as successor escrow
agent. The Escrow Agent shall refrain from taking any action until it shall
receive joint written instructions from the Escrow Parties designating the
successor escrow agent. The Escrow Agent shall deliver all of the then remaining
balance of the Escrow Fund to such successor escrow agent in accordance with
such instructions and upon receipt of the Escrow Fund, the successor escrow
agent shall be bound by all of the provisions of this Agreement.

10. Resignation of Escrow Agent. The Escrow Agent may resign and be discharged
from its duties and obligations hereunder at any time by giving no less than
thirty (30) days’ prior written notice of such resignation to the Escrow
Parties, specifying the date when such resignation will take effect. Thereafter,
the Escrow Agent shall have no further obligation to the Escrow Parties except
to hold the Escrow Fund as depository and not otherwise. In the event of such
resignation, the Escrow Parties agree that they will jointly appoint a banking
corporation, trust company, or attorney as successor escrow agent within thirty
(30) days of notice of such resignation. The Escrow Agent shall refrain from
taking any action until it shall receive joint written instructions from the
Escrow Parties designating the successor escrow agent. The Escrow Agent shall
deliver all of the then remaining balance of the Escrow Fund to such successor
escrow agent in accordance with such instructions and upon receipt of the Escrow
Fund, the successor escrow agent shall be bound by all of the provisions of this
Agreement.

11. Accounting. On a monthly basis, the Escrow Agent shall render a written
statement setting forth the balance of the Escrow Account, all interest earned
and all distributions made, which statements shall be delivered to the following
addresses:

CafePress Inc.

6901 Riverport Drive

Louisville, Kentucky 40258

Attn: General Counsel

Circle Graphics, Inc.

Attn: Chief Executive Officer

120 Ninth Avenue

Longmont, Colorado 80501

12. Survival. Notwithstanding anything in this Agreement to the contrary, the
provisions of Section 7 shall survive any resignation or removal of the Escrow
Agent and any termination of this Agreement.

 

7

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13. Escrow Agent Fees, Costs, and Expenses. From the date hereof through the
termination of this Agreement in accordance with Section 8 herein, the Escrow
Agent shall charge a one-time administrative fee of $2,500.00, and the Escrow
Agent shall be entitled to be reimbursed for its customary fees and charges for
any wire transfers or other depository services rendered in connection with the
Escrow Fund and any delivery charges or other reasonable out-of-pocket expenses
incurred and actually paid by the Escrow Agent in connection the Escrow Fund.
Each of Buyer, on the one hand, and Seller, on the other hand, shall pay
one-half of the administrative fee of the Escrow Agent for the services to be
rendered by the Escrow Agent pursuant to this Agreement. The Escrow Agent shall
debit the Escrow Account for the amount of any other customary fees, charges and
expenses. As between the Buyer and the Seller, however, such other fees, charges
and expenses shall be borne one-half by each.

14. Notices. All notices under this Agreement shall be transmitted to the
respective parties, shall be in writing and shall be considered to have been
duly given or served when personally delivered to any individual party, or on
the first (1st) business day after the date of deposit with an overnight courier
for next day delivery, postage paid, or on the third (3rd) business day after
deposit in the United States mail, certified or registered, return receipt
requested, postage prepaid, or on the date of telecopy, fax or similar
transmission (the telecopy, fax or similar transmission must contain authorized
signatures(s)), during normal business hours, as evidenced by mechanical
confirmation of such telecopy, fax or similar transmission, addressed in all
cases to the party at his or its address set forth below, or to such other
address as such party may designate, provided that notices will be deemed to
have been given to the Escrow Agent on the actual date received:

If to the Seller:

CafePress Inc.

6901 Riverport Drive

Louisville, Kentucky 40258

Attn: General Counsel

Fax:

Email:

Copy to (which shall not constitute notice):

Pillsbury Winthrop Shaw Pittman LLP

2550 Hanover Street

Palo Alto, CA 94304

Attn: Jorge del Calvo

Fax: (650) 233-4545

Email: jorge@pillsburylaw.com

If to Buyer:

Circle Graphics, Inc.

Attn: Chief Executive Officer

 

8

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120 Ninth Avenue

Longmont, Colorado 80501

Email: acousin@circlegraphicsonline.com

Copy to (which shall not constitute notice):

Foley & Lardner LLP

111 Huntington Avenue

Boston, Massachusetts 02199

Email: spravda@foley.com

Attn: Susan E. Pravda, Esq.

If to the Escrow Agent:

BNY Mellon, National Association, Escrow Agent

c/o Escrow Services

Banking Services Support Center; Suite 154-0655

500 Ross Street

Pittsburgh, PA 15262

Phone: 412.234.7796 / 412.234.2350/ 412.234.8797

Fax: 732.667.4499 / 615.932.4035

Email: escrowservices@bnymellon.com

Copy (which shall not constitute notice to the Escrow Agent) to:

Bruce D. Berns, Esq.

Abendroth, Berns & Warner LLC

40 Grove Street, Suite 375

Wellesley, MA 02482

Facsimile: (781) 237-8891

Any notice, except notice by the Escrow Agent, may be given on behalf of any
party by its authorized representative. In all cases the Escrow Agent shall be
entitled to rely on a copy or a fax transmission of any document with the same
legal effect as if it were the original of such document. The Escrow Parties
shall promptly notify the Escrow Agent of any changes to the contact information
contained in this Section and the Escrow Agent may rely on the contact
information contained in this Section until notified of a change.

To facilitate the performance by the Escrow Agent of its duties and obligations
hereunder, including resolving any issues arising hereunder (but not the giving
of any notice as provided above or the resolution of the amounts to be paid or
disputes related thereto), the Escrow Parties agree that the Escrow Agent may
contact the following representatives of each Escrow Party identified below, or
such other individuals as each Escrow Party may identify by written notice to
the Escrow Agent:

 

Seller:

[•] Tel: [•] E-mail: [•] Fax: [•]

 

9

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Buyer:

[•] Tel: [•] E-mail: [•] Fax: [•]

15. Modifications; Waiver. This Agreement may not be altered or modified without
the express prior written consent of all of the parties to this Agreement. No
course of conduct shall constitute a waiver of any terms or conditions of this
Agreement, unless such waiver is specified in writing, and then only to the
extent so specified. A waiver of any of the terms and conditions of this
Agreement on one occasion shall not constitute a waiver of the other terms of
this Agreement, or of such terms and conditions on any other occasion.

16. Further Assurances. If at any time the Escrow Agent shall determine or be
advised that any further agreements, assurances or other documents are
reasonably necessary or desirable to carry out the provisions of this Agreement
and the transactions contemplated by this Agreement, the Escrow Parties shall
execute and deliver any and all such agreements or other documents, and do all
things reasonably necessary or appropriate to carry out fully the provisions of
this Agreement.

17. Assignment. This Agreement shall inure to the benefit of and be binding upon
the successors, heirs, personal representatives, and permitted assigns of the
parties. This Agreement is freely assignable by the Escrow Parties; provided,
however, that no assignment by such party, or it successors or assigns, shall be
effective unless prior written notice of such assignment is given to the other
parties, including, without limitation, the Escrow Agent; and provided, further,
that any assignee satisfies the Escrow Agent’s requirements set forth in
Section 3(b) above. This Agreement may not be assigned by the Escrow Agent,
except that upon prior written notice to the Escrow Parties, the Escrow Agent
may assign this Agreement to an affiliated or successor bank or other qualified
bank entity.

18. Section Headings. The section headings contained in this Agreement are
inserted for purposes of convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.

19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law.

20. Counterparts and Facsimile Execution. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. The exchange of copies of
this Agreement and of signature pages by facsimile or other electronic
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes (and such signatures of the parties transmitted by facsimile or other
electronic transmission shall be deemed to be their original signatures for all
purposes).

 

10

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21. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION
WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY.

[Signature Page Follows]

 

11

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

 

CIRCLE GRAPHICS, INC. By:

 

Name: Title: CAFEPRESS INC. By:

 

Name: Title: BNY MELLON, NATIONAL ASSOCIATION By:

 

Name: Diana J. Kenneally Title: Vice President

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EXHIBIT A

JOINT WRITTEN INSTRUCTIONS

FOR RELEASE OF ESCROW FUNDS

Pursuant to Section 5(e) of the Escrow Agreement dated as of [•], 2015, by and
among Circle Graphics, Inc., a Delaware corporation (“Buyer”), CafePress Inc., a
Delaware corporation (“Seller”), and BNY Mellon, National Association (the
“Escrow Agent”), the Seller and Buyer each hereby instruct the Escrow Agent to
release $                     from the Escrow Account in accordance with the
following instructions:

 

Wire Instructions:

Account Name:

 

Account Number:

 

Bank Name:

 

Bank ABA Number:

 

Bank Address:

 

 

For credit to:

 

Special Instructions:

 

 

Bank Check:

Payee Name:

 

Mailing Address:

 

 

 

 

CIRCLE GRAPHICS, INC. CAFEPRESS INC. By:

 

By:

 

Name: Name: Title: Title:

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EXHIBIT B

WIRE TRANSFER INSTRUCTIONS

 

Buyer Wire Instructions: Account Name: [•] Account Number: [•] Bank Name: [•]
Bank ABA Number: [•] Bank Address: [•] Special Instructions: [•] Seller Wire
Instructions: Account Name: [•] Account Number: [•] Bank Name: [•] Bank ABA
Number: [•] Bank Address: [•] Special Instructions: [•]