Exhibit 10.1

 

EXECUTION COPY

 

AMENDED AND RESTATED

ACQUISITION AGREEMENT AND PLAN OF MERGER

 

among

 

ENVESTNET, INC.,

 

POSEIDON MERGER CORP.,

 

PLACEMARK HOLDINGS, INC.,

 

THE SELLING SECURITYHOLDERS

 

and

 

FORTIS ADVISORS, LLC,

as Securityholder Representative

 

Dated as of August 11, 2014

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

2

Section 1.1

Certain Defined Terms

2

Section 1.2

Table of Definitions

12

 

 

 

ARTICLE II THE INITIAL STOCK SALE AND THE MERGER

14

Section 2.1

The Initial Stock Sale

14

Section 2.2

The Merger

15

Section 2.3

Effective Time; Effect of the Merger

15

Section 2.4

Certificate of Incorporation and Bylaws

15

Section 2.5

Closing

16

Section 2.6

Board Representatives and Officers

16

Section 2.7

Effect on Capital Stock

16

Section 2.8

Treatment of Company Options and Company Stock Option Plans

17

Section 2.9

Treatment of Company Warrants

18

 

 

 

ARTICLE III PAYMENT FOR SECURITIES

19

Section 3.1

Payment for Company Capital Stock and Company Options

19

Section 3.2

Exchange of Certificates, etc.

20

Section 3.3

Appraisal Rights

22

Section 3.4

Payments at Closing for Indebtedness of the Company

22

Section 3.5

Payments at Closing for Transaction Expenses of the Company

22

Section 3.6

Transaction Consideration Adjustment

23

Section 3.7

Distribution of Securityholder Representative Expense Fund

25

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

25

Section 4.1

Organization and Qualifications

25

Section 4.2

Authorization; Power; Enforceability

26

Section 4.3

Authorized Capital Stock

27

Section 4.4

No Conflict; Required Filings and Consents

28

Section 4.5

Financial Statements; No Undisclosed Liabilities; Financial Controls

29

Section 4.6

Events Subsequent to the Date of the Balance Sheet

30

Section 4.7

Litigation; Compliance with Law; Permits

32

Section 4.8

Proprietary Information of Third Parties

33

Section 4.9

Intellectual Property

33

Section 4.10

Title to Properties

36

Section 4.11

Leasehold Interests

36

Section 4.12

Insurance

37

Section 4.13

Taxes

38

Section 4.14

Other Agreements

40

Section 4.15

Significant Customers, Suppliers and Managers

42

Section 4.16

Brokers

43

Section 4.17

Transactions With Affiliates

43

 

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Section 4.18

Employees

43

Section 4.19

Environmental Laws

44

Section 4.20

Employee Benefit Programs

45

Section 4.21

Foreign Corrupt Practices Act

47

Section 4.22

Capital Improvements

47

Section 4.23

Bank Accounts; Powers of Attorney

47

Section 4.24

Registration

47

Section 4.25

Reports

48

Section 4.26

Specified Litigation; Portfolio Management System Patent

48

Section 4.27

No Additional Representations

49

 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB

50

Section 5.1

Organization

50

Section 5.2

Authority and Enforceability

50

Section 5.3

No Conflict; Required Filings and Consents

50

Section 5.4

Brokers

51

Section 5.5

Litigation

51

Section 5.6

Financing

51

Section 5.7

Registration

51

Section 5.8

Formation and Ownership of Merger Sub; No Prior Activities

52

Section 5.9

Inspection; No Other Representations

52

Section 5.10

No Other Representations

53

 

 

 

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE SELLING SECURITYHOLDERS

53

Section 6.1

Organization

53

Section 6.2

Authorization

53

Section 6.3

Holdings

54

Section 6.4

No Conflict; Required Filings and Consents

54

Section 6.5

Brokers

54

Section 6.6

Advice

55

 

 

 

ARTICLE VII COVENANTS

55

Section 7.1

Conduct of Business Prior to the Closing

55

Section 7.2

No Solicitations

57

Section 7.3

Notification of Certain Matters; Supplements to Disclosure Schedule

58

Section 7.4

Takeover Statutes

59

Section 7.5

Confidentiality

59

Section 7.6

Commercially Reasonable Efforts

60

Section 7.7

Public Announcements

60

Section 7.8

Indemnification

60

Section 7.9

Closing Efforts

61

Section 7.10

Conflicts and Privilege

62

Section 7.11

Employment Benefits

64

Section 7.12

Financial Statements

66

 

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Section 7.13

Further Assurances

67

Section 7.14

Company Stockholder Meeting; Short Form Merger

67

Section 7.15

Release

67

Section 7.16

Non-Solicitation

68

Section 7.17

Certain Additional Covenants

69

 

 

 

ARTICLE VIII TAX MATTERS

69

Section 8.1

Tax Returns

69

Section 8.2

Controversies

71

Section 8.3

Post-Closing Access and Cooperation

71

Section 8.4

Post-Closing Actions

72

Section 8.5

Refunds

72

Section 8.6

Certain Taxes and Fees

72

Section 8.7

Straddle Period Tax Allocation

72

Section 8.8

Closing Date Course of Business

73

Section 8.9

End of Tax Year

73

Section 8.10

Tax Treatment of Escrow Fund

73

 

 

 

ARTICLE IX CONDITIONS TO CLOSING

73

Section 9.1

General Conditions

73

Section 9.2

Conditions to Obligations of the Company

74

Section 9.3

Conditions to Obligations of Buyer and Merger Sub

74

Section 9.4

Conditions to Obligations of Buyer, Merger Sub and the Company to Effect the
Merger

76

 

 

 

ARTICLE X INDEMNIFICATION

76

Section 10.1

Survival

76

Section 10.2

Indemnification by Securityholders

77

Section 10.3

Indemnification by the Selling Securityholders

77

Section 10.4

Indemnification by Buyer

78

Section 10.5

Third Party Claims

78

Section 10.6

Limitations on Indemnification

79

Section 10.7

Escrow Fund

81

Section 10.8

Materiality

81

Section 10.9

Exclusive Remedy

81

Section 10.10

Tax Treatment of Indemnity Payments

81

 

 

 

ARTICLE XI TERMINATION

81

Section 11.1

Termination

81

Section 11.2

Effect of Termination

82

 

 

 

ARTICLE XII GENERAL PROVISIONS

83

Section 12.1

Securityholder Representative

83

Section 12.2

Fees and Expenses

85

Section 12.3

Amendment and Modification

85

Section 12.4

Waiver

85

Section 12.5

Notices

85

 

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Section 12.6

Interpretation

87

Section 12.7

Entire Agreement

87

Section 12.8

No Third-Party Beneficiaries

87

Section 12.9

Governing Law

88

Section 12.10

Submission to Jurisdiction

88

Section 12.11

Assignment; Successors

88

Section 12.12

Enforcement

89

Section 12.13

Currency

89

Section 12.14

Severability

89

Section 12.15

Waiver of Jury Trial

89

Section 12.16

Counterparts

89

Section 12.17

Electronic Signature

89

Section 12.18

Time of Essence

89

Section 12.19

No Presumption Against Drafting Party

89

Section 12.20

Effectiveness of Amendment and Restatement

90

 

iv

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EXHIBITS

 

 

 

Exhibit A

Form of Escrow Agreement

 

 

Exhibit B

Form of Certificate of Merger

 

 

Exhibit C

Merger Sub Certificate of Incorporation

 

 

Exhibit D

Form of Paying Agent Agreement

 

 

SCHEDULES

 

 

 

Schedule I

Selling Securityholders

 

 

Schedule 1.1(a)

Working Capital

 

 

Schedule 1.1(b)

Specified Litigation

 

 

Schedule 1.1(c)

Data Security Matter

 

 

Schedule 1.1(d)

Identified Matter

 

 

Schedule 7.16

Excluded Employees

 

 

Schedule 7.17

Certain Additional Covenants

 

 

Schedule 9.3(f)

Required Third Party Consents

 

 

Schedule 9.3(g)(ii)

Advisory Contracts

 

 

Schedule 10.2(h)

Indemnification Matters

 

 

Schedule 10.6(i)

Certain Fees and Costs

 

v

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AMENDED AND RESTATED

ACQUISITION AGREEMENT AND PLAN OF MERGER

 

THIS AMENDED AND RESTATED ACQUISITION AGREEMENT AND PLAN OF MERGER, dated as of
August 11, 2014 (this “Agreement”), is among Envestnet, Inc., a Delaware
corporation (“Buyer”), Poseidon Merger Corp., a Delaware corporation and wholly
owned subsidiary of Buyer (“Merger Sub”), Placemark Holdings, Inc., a Delaware
corporation (the “Company”), the Persons named in the attached Schedule I (each
a “Selling Securityholder” and collectively, the “Selling Securityholders”), and
Fortis Advisors LLC, a Delaware limited liability company in its capacity as the
“Securityholder Representative.”

 

RECITALS

 

WHEREAS, Buyer, Merger Sub, the Company, the Selling Securityholders and the
Securityholder Representative have previously entered into that certain
Acquisition Agreement and Plan of Merger, dated as of June 30, 2014 (the
“Effective Date” and, such agreement, the “Original Agreement”), which they
desire to amend and restate to effect certain changes with respect thereto;

 

WHEREAS, the Selling Securityholders collectively own 35,327,780 shares of
Series A Preferred Stock, 31,262,917 shares of Series B Preferred Stock and
15,082,530 shares of Common Stock (collectively, the “Acquired Stock”);

 

WHEREAS, Buyer desires to purchase or cause the Stock Sale Purchaser to purchase
from the Selling Securityholders all of the Acquired Stock and the Selling
Securityholders desire to sell to Buyer or the Stock Sale Purchaser all of the
Acquired Stock in accordance with the terms and conditions of this Agreement
(the “Initial Stock Sale”);

 

WHEREAS, immediately after the consummation of the Initial Stock Sale, Buyer,
Merger Sub and the Company wish to effect a business combination through a
merger (the “Merger”) of Merger Sub with and into the Company on the terms and
conditions set forth in this Agreement and in accordance with the Delaware
General Corporation Law (the “DGCL”);

 

WHEREAS, the Board of Directors of the Company (the “Company Board”) has
approved this Agreement, the Initial Stock Sale, the Merger and the other
transactions contemplated by this Agreement and determined that this Agreement,
the Initial Stock Sale, the Merger and the other transactions contemplated by
this Agreement are advisable;

 

WHEREAS, the Boards of Directors of Buyer and Merger Sub have approved this
Agreement, the Initial Stock Sale, the Merger and the other transactions
contemplated by this Agreement;

 

WHEREAS, concurrently with the execution and delivery of the Original Agreement,
each Key Employee has entered into an Employment Agreement, which shall be
effective as of (and contingent upon) the Stock Sale Closing Time; and

 

WHEREAS, the Securityholder Representative, Buyer and the Escrow Agent shall
enter into an Escrow Agreement to be effective at, and subject to the occurrence
of, the Stock Sale Closing Time.

 

AGREEMENT

 

In consideration of the foregoing and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the parties agree as
follows:

 

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ARTICLE I
DEFINITIONS

 

Section 1.1                  Certain Defined Terms.  For purposes of this
Agreement:

 

“Acquired Companies” means the Company and its Subsidiaries.

 

“Acquisition Proposal” means any bona fide offer or proposal for, or any
indication of interest in, any of the following (other than the Transactions):
(i) any direct or indirect acquisition or purchase of more than ten percent
(10%) of the capital stock of the Company or all or substantially all of assets
of the Company; (ii) any merger, consolidation or other business combination
relating to the Company; or (iii) any recapitalization, reorganization or any
other extraordinary business transaction involving or otherwise relating to the
Company.

 

“Action” means any claim, action, suit, inquiry, proceeding, audit or
investigation by, before or otherwise involving any Governmental Authority, or
any other arbitration, mediation or similar proceeding.

 

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person.

 

“Aggregate Exercise Price” means the aggregate exercise price of all shares of
Common Stock subject to all Company Options that are unexercised as of
immediately prior to the Effective Time.

 

“Aggregate Upfront Transaction Consideration” means an amount equal to (A) the
Transaction Consideration minus (B) the Aggregate Exercise Price minus (C) the
Escrow Amount minus (D) the Expense Fund.

 

“Ancillary Agreements” means the Escrow Agreement and Paying Agent Agreement.

 

“Base Common Stock Per Share Price” means (x) $0.349212312265023 plus (y) the
quotient obtained by dividing the Aggregate Exercise Price by the Fully Diluted
Shares.

 

“Base Series A Per Share Price” means (x) $0.873008383171642 plus (y) the
quotient obtained by dividing the Aggregate Exercise Price by the Fully Diluted
Shares.

 

“Base Series B Per Share Price” means (x) $0.514782215460029 plus (y) the
quotient obtained by dividing the Aggregate Exercise Price by the Fully Diluted
Shares.

 

“Base Transaction Consideration” means Sixty-Six Million Dollars ($66,000,000).

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks in New York City, New York or Chicago Illinois or the New York Stock
Exchange are required or authorized by Law to be closed.

 

2

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“Cause” with respect to each holder of Unvested Company Options shall have the
meaning set forth in the Equity Incentive Plan.

 

“Capital Stock” means the Common Stock and the Preferred Stock.

 

“Certificate” means a stock certificate which, immediately prior the Stock Sale
Closing Time, represents the Acquired Stock and, at any time after the Stock
Sale Closing Time but prior to the Effective Time, represents any shares of
Capital Stock other than the Acquired Stock, as applicable.

 

“Closing Indebtedness” means all outstanding Indebtedness of the Acquired
Companies as of the close of business on the Business Day immediately preceding
the Closing Date, other than Excluded Trade Obligations.

 

“Closing Working Capital” means the Working Capital, as of the close of business
on the Business Day immediately preceding the Closing Date.

 

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

 

“Common Stock” means any of the common stock of the Company, par value $0.001
per share.

 

“Company Option” means an option (whether or not vested or exercisable) to
purchase Common Stock that has been granted under the Equity Incentive Plan.

 

“Company Warrants” means the warrants issued by the Company to purchase shares
of Common Stock.

 

“Contingent Converted Shares” means, at any time, (a) the number of shares of
Common Stock issuable pursuant to Unvested Company Options that, at such time,
are not Converted Awards minus (b) the number of Ineligible Option Shares.

 

“Contract” means any contract, agreement or binding arrangement, whether written
or oral.

 

“Control,” including the terms “Controlled by” and “under common Control with,”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, as trustee or executor, as general partner or
managing member, by Contract or otherwise, including the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.

 

“Converted Award Escrow Amount” means the aggregate Per Option Share
Consideration for all Unvested Company Options.

 

“Data Security Matter” has the meaning set forth in Schedule 1.1(c).

 

3

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“Employee Plan” means: (a) an employee benefit plan within the meaning of
Section 3(3) of ERISA whether or not subject to ERISA; (b) stock option plans,
stock purchase plans, bonus or incentive award plans, severance pay plans,
programs or arrangements, deferred compensation arrangements or agreements,
employment agreements, consulting agreements, executive compensation plans,
programs, agreements or arrangements, change in control plans, programs or
arrangements, supplemental income arrangements, vacation plans, unemployment
compensation plan, insurance or hospitalization program or any fringe benefit
arrangements, and all other employee benefit plans, agreements, and
arrangements, not described in (a) above; and (c) plans or arrangements
providing compensation to employee and non-employee directors.

 

“Encumbrance” means any charge, claim, limitation, condition, equitable
interest, mortgage, lien, option, pledge, security interest, deed of trust,
encumbrance, easement, encroachment, right of first refusal, title retention,
restriction (including restriction on use), license or any adverse claim of
title, ownership or use, or agreement of any kind restricting transfer, or other
right of any Person or encumbrance of any kind or nature whatsoever..

 

“Environmental Laws” means: any Laws of any Governmental Authority relating to:
(i) releases or threatened releases of Hazardous Substances or materials
containing Hazardous Substances; (ii) the manufacture, handling, transport, use,
treatment, storage or disposal of Hazardous Substances or materials containing
Hazardous Substances; or (iii) pollution or protection of the environment,
health, safety or natural resources.

 

“Equity Incentive Plan” means the Company’s 2009 Stock Option and Grant Plan (as
amended and in effect).

 

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

 

“ERISA Affiliate” means, with respect to the Acquired Companies, any
corporation, trade or business which, together with the Acquired Companies, is a
member of a controlled group of corporations or a group of trades or businesses
under common control within the meaning of section 414 of the Code.

 

“Escrow Agent” means Wells Fargo Bank, National Association, or its successor
under the Escrow Agreement.

 

“Escrow Agreement” means the Escrow Agreement to be entered into by Buyer, the
Securityholder Representative and the Escrow Agent, substantially in the form of
Exhibit A.

 

“Escrow Amount” means Nine Million, Nine Hundred Thousand Dollars ($9,900,000).

 

“Escrow Fund” means the escrow fund established pursuant to the Escrow Agreement
through the deposit of the Escrow Amount.

 

“Estimated Adjustment Amount” means Estimated Net Working Capital minus Target
Working Capital minus Estimated Closing Indebtedness.  For the avoidance of
doubt, the Estimated Adjustment Amount may be positive or negative.

 

4

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“Excluded Trade Obligations” means trade payables, accrued expenses and
obligations to creditors for inventory, services and supplies, in each case, to
the extent incurred in the ordinary course of business.

 

“Final Adjustment Amount” means Final Closing Net Working Capital minus Target
Working Capital minus Final Closing Indebtedness.  For the avoidance of doubt,
the Final Adjustment Amount may be positive or negative.

 

“Fully Diluted Shares” shall mean the sum of (i) the number of shares of Common
Stock issued and outstanding immediately prior to the Stock Sale Closing Time,
plus (ii) the number of shares of Common Stock issuable upon conversion of all
issued and outstanding shares of Series A Preferred Stock immediately prior to
the Stock Sale Closing Time, plus (iii) the number of shares of Common Stock
issuable upon conversion of all issued and outstanding shares of Series B-1
Preferred Stock immediately prior to the Stock Sale Closing Time, plus (iv) the
number of shares of Common Stock issuable upon conversion of all issued and
outstanding shares of Series B-2 Preferred Stock immediately prior to the Stock
Sale Closing Time, plus (v) the number of shares of Common Stock issuable upon
exercise of all Company Options outstanding immediately prior to the Stock Sale
Closing Time.

 

“Fundamental Representations” means the representations and warranties set forth
in Section 4.1 (Organization and Qualification), Section 4.2 (Authorization,
Power and Enforceability), Section 4.3 (Authorized Capital Stock), Section 4.16
(Brokers), Section 4.17 (Transactions With Affiliates), Section 5.1
(Organization), Section 5.2 (Authority and Enforceability),  Section 5.4
(Brokers) Section 6.1 (Organization), Section 6.2 (Authorization) and Section
6.3 (Holdings).

 

“GAAP” means United States generally accepted accounting principles and
practices as in effect from time to time.

 

“Governmental Authority” means any United States or foreign federal, national,
state, provincial, local or similar government, governmental, regulatory or
administrative authority, branch, agency or commission or any court, tribunal or
arbitral or judicial body.

 

“Hazardous Substances” means: (i) those substances defined in or regulated under
the Hazardous Materials Transportation Act, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic
Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the
Clean Air Act, and their state counterparts, as each may be amended from time to
time, and all regulations thereunder; (ii) petroleum and petroleum products,
including crude oil and any fractions thereof; (iii) natural gas, synthetic gas,
and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and radon;
(v) any other pollutant or contaminant; and (vi) any substance, material or
waste regulated by any Governmental Authority pursuant to any Environmental Law.

 

“Identified Matter” has the meaning set forth in Schedule 1.1(d).

 

“Immediate Family” of a Person means such Person’s spouse, children and
siblings, including adoptive relationships and relationships through marriage.

 

5

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“Indebtedness” means with respect to a Person, without duplication, (i) any
obligations of such Person to third parties for borrowed money, (ii) any
obligations of such Person evidenced by any note, bond, debenture or other debt
security, (iii) any obligations of such Person under leases required to be
capitalized in accordance with GAAP, (iv) any obligations of such Person under
conditional sale or other title retention agreements related to purchased
property, (v) any obligations of such Person for deferred purchase price of
property, (vi) any obligations of such Person under hedging transactions (valued
at the termination value thereof), (vii) any obligation with respect to any
amount drawn on a letter of credit, (viii) any interest or prepayment penalties
due on any of the foregoing and (ix) any guarantees of or other assurances of
payment by such Person with respect to any obligations of another Person of the
type described in clauses (i) through (viii).

 

“Indemnified Taxes” means (i) all Taxes of the Acquired Companies for all
Pre-Closing Tax Periods, (ii) all Straddle Period Taxes allocable pursuant to
Section 8.7 to the portion of any Straddle Period ending on the Closing Date,
(iii) all Taxes of any member of an affiliated, consolidated, combined or
unitary group of which any Acquired Company (or any predecessor of any of the
foregoing) is or was a member on or prior to the Closing Date, including
pursuant to Treasury Regulations section 1.1502-6 or any analogous or similar
state, local, or foreign Tax Laws, (iv) any and all Taxes of any Person (other
than the Acquired Companies) imposed on the Acquired Companies (or any
predecessor of any of the foregoing) as a transferee or successor, by contract
or otherwise, which Taxes relate to an event or transaction occurring before the
Closing and (v) the Securityholders’ allocable portion of any Transfer Taxes as
determined under Section 8.6; provided, however, in no event will Indemnified
Taxes include (y) any Taxes to the extent specifically included in the
computation of Final Closing Net Working Capital or Transaction Expenses, as
finally determined or (z) Buyer’s allocable share of any Transfer Taxes as
determined under Section 8.6.

 

“Independent Accountants” means PricewaterhouseCoopers LLP.

 

“Ineligible Option Shares” means the number of shares issuable pursuant to
Unvested Company Options that are no longer eligible to become Converted Awards
pursuant to Section 2.8(b) as a result of the termination of the employment or
other service relationship of the holder of such Unvested Company Option, other
than a termination by Buyer, the Company or any of their respective Subsidiaries
or Affiliates (or other applicable successor entity of the Company) without
Cause or as a result of such holder’s death or disability (as such terms are
defined in Section 22(e) of the Code).

 

“Intellectual Property” means any intellectual property rights, including: (i)
patents and patent applications, including reissues, provisionals, divisions,
continuations, continuations in part, renewals, extensions, substitutions and
reexaminations thereof, all patents that may issue on such applications, and all
rights therein provided by applicable Law; (ii) trademarks, service marks, trade
names, trade dress, logos, slogans, Facebook and other social media pages,
Twitter accounts and other online or electronic identifiers, other similar
designations of source, and registrations and applications for registration
thereof (and any extensions, modifications, divisions and renewals of such
registrations and applications), goodwill associated with or symbolized by any
of the foregoing, and all rights therein provided by applicable Law; (iii)
copyrighted works, works of authorship, databases and data collections, whether
or not

 

6

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registered, and registrations and applications for registration of any of the
foregoing, including all such rights in software, and all rights therein
provided by applicable Law; (iv) moral and economic rights of authors and
inventors, however denominated; (v) domain names, uniform resource locators and
other names and locators associated with the Internet; (vi) trade secrets, and
all rights provided by applicable law therein and in and to other confidential
information, including customer lists, customer information and databases; (vii)
rights of publicity and (viii) rights and remedies against past, present and
future infringement of any of the foregoing.

 

“Investor Agreements” means Fifth Amended and Restated Investor Rights Agreement
by and among the Company, the Investors (as defined therein) and any party
listed as a signatory or any party that has executed and delivered an Instrument
of Accession to the Company, dated as of July 22, 2009 and the Stockholder
Agreement by and among the Company and the Investors (as defined therein) and
any party that has executed and delivered and Instrument of Accession to the
Company, dated as of July 22, 2009 (each, as amended and in effect).

 

“IRS” means the United States Internal Revenue Service.

 

“Key Employees” means Lee Chertavian, Richard Dion and Ron Pruitt.

 

“Knowledge” means (i) in the case of an individual, the actual or constructive
knowledge of such individual after reasonable investigation, (ii) in the case of
the Company, the actual or constructive knowledge, after reasonable
investigation, of Lee Chertavian, Richard Dion, Matt Lombardi, John Ehinger, Jr.
and Ron Pruitt and (iii) in the case of Buyer, the actual or constructive
knowledge of the chief legal officer of Buyer, after reasonable investigation.

 

“Law” means any statute, law, ordinance, regulation, rule, code, common law,
Order, settlement agreement or governmental requirement enacted, promulgated,
entered into or imposed by any Governmental Authority.

 

“Leased Real Property” means all real property leased, subleased or licensed to
an Acquired Company or which an Acquired Company otherwise has a right or option
to use or occupy, together with all structures, facilities, fixtures, systems,
improvements and items of property previously or hereafter located thereon, or
attached or appurtenant thereto, and all easements, rights and appurtenances
relating to the foregoing.

 

“Manager” means a Person that provides investment advice to an Acquired Company
for use by the Acquired Companies in managing and advising accounts.

 

“Material Adverse Effect” means any event, change or effect that would
reasonably be expected to be materially adverse to (a) the business, operations,
assets, financial condition, results of operations or liabilities of the
Acquired Companies, taken as a whole or (b) the ability of the Company to
perform its obligations under this Agreement and the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby; provided, however,
that none of the following constitute, or will be considered in determining
whether there has occurred, a Material Adverse Effect: (i) changes or conditions
generally affecting the industries in which the Acquired Companies operate, (ii)
changes in economic, capital market, regulatory or political conditions
generally, (iii) any failure by any Acquired Company to meet any internal
projections or forecasts or revenue or earnings predictions for any past,
current or future period

 

7

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(but not the underlying causes thereof), (iv) any change in Laws, (v) actions
taken at the direction or request of Buyer and (vi) changes that are the result
of economic factors affecting the national, regional or world economy or acts of
war or terrorism, except, (x) in the case of clauses (i), (ii) and (iv), to the
extent such events, changes or effects have a disproportionate impact on the
business, condition, assets , operations or financial condition of the Acquired
Companies relative to other participants of similar size in the industries in
which the Acquired Companies conduct business and (y) the failure to obtain any
consent should not be deemed a Material Adverse Effect if the conditions set
forth in Section 9.3(f) and Section 9.3(g) have been satisfied.

 

“Multiemployer Plan” means an employee pension or welfare benefit plan within
the meaning of Section 3(37) of ERISA.

 

“NOL Shortfall” means (i) $31.6 million minus (ii) the amount of net operating
losses of the Acquired Companies, as determined for U.S. federal income tax
purposes, as of the end of the taxable year of the Acquired Companies ending on
the Closing Date.  For purposes of the foregoing sentence, any limitation or
reduction in net operating losses caused by the transactions contemplated by
this Agreement, including by reason of Section 382 of the Code, shall not be
taken into account.

 

“NOL Tax Loss” means the product of (i) 0.30 multiplied by (ii) the NOL
Shortfall; provided, however that NOL Tax Loss shall not be more than $300,000.

 

“Order” means any order, judgment, decree, injunction, stipulation or consent
order of or with any Governmental Authority.

 

“Other Securityholders” means all of the holders of Capital Stock or Vested
Company Options other than (i) Buyer, Merger Sub and any of their respective
Affiliates, and (ii) the Selling Securityholders.

 

“Owned Real Property” means all real property owned by the Acquired Companies,
together with all structures, facilities, fixtures, systems, improvements and
items of property previously or hereafter located thereon, or attached or
appurtenant thereto, and all easements, rights and appurtenances relating to the
foregoing.

 

“Per Common Share Consideration” means, with respect to each share of Common
Stock, (a) the Base Common Stock Per Share Price plus (b) the quotient obtained
by dividing (1) the Estimated Adjustment Amount minus the Transaction Expenses
by (2) the Fully Diluted Shares.

 

“Per Option Share Consideration” means, with respect to each share of Common
Stock subject to a Company Option effective as of immediately prior to the
Effective Time, an amount equal to the excess of the Per Common Share
Consideration over the exercise price per share of such Company Option.

 

“Person” means an individual, corporation, partnership, limited liability
company, limited liability partnership, syndicate, person, trust, association,
organization or other entity, including

 

8

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any Governmental Authority, and including any successor, by merger or otherwise,
of any of the foregoing.

 

“Portfolio Management System Patent” means United States Patent No. 7,668,773.

 

“Pre-Closing Tax Period” means any taxable period ending on or before the
Closing Date.

 

“Preferred Stock” shall mean the Series A Preferred Stock, the Series B-1
Preferred Stock and the Series B-2 Preferred Stock.

 

“Pro Rata Share” means, for each Securityholder, (i) the number of shares of
Common Stock held by such Securityholder (including (x) all Common Stock
issuable upon conversion or exercise of all shares of Preferred Stock, Vested
Company Options held by such Securityholder and (y) all Common Stock issuable
upon conversion or exercise of Unvested Company Options that have become
Converted Awards) divided by (ii) the Fully Diluted Shares minus the number of
shares of Common Stock issuable upon conversion or exercise of Unvested Company
Options that have not become Converted Awards.

 

“Proceedings” means any judicial or administrative action, investigation, audit,
claim, suit, arbitration, proceeding or other litigation.

 

“Related Party,” with respect to any specified Person, means: (i) any director,
officer, general partner or managing member of such Person; (ii) any Immediate
Family member of a Person described in clause (i); or (iii) any other Person who
holds, individually or together with any Affiliate of such other Person and any
member(s) of such Person’s Immediate Family, more than fifteen percent (15%) of
the outstanding equity or ownership interests of such specified Person.

 

“Securityholders” means, collectively, the Selling Securityholders and the Other
Securityholders.

 

“Series A Preferred Stock” means the Series A Preferred Stock, par value $0.001
per share, of the Company.

 

“Series B Preferred Stock” means the Series B-1 Preferred Stock and the Series
B-2 Preferred Stock.

 

“Series B-1 Preferred Stock” means the Series B-1 Preferred Stock, par value
$0.001 per share, of the Company.

 

“Series B-2 Preferred Stock” means the Series B-2 Non-Voting Preferred Stock,
par value $0.001 per share, of the Company.

 

“Specified Litigation” means the litigation disclosed on Schedule 1.1(b) hereto.

 

“Straddle Period” means any taxable period beginning on or before the Closing
Date and ending after the Closing Date.

 

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“Subsidiary” means, with respect to the Company, any Person of which more than
fifty percent (50%) of the total voting power, whether by way of contract or
otherwise, of shares of capital stock or other equity interests (including
limited liability company or partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or Controlled, directly or
indirectly (e.g., through another Subsidiary), by (a) the Company, (b) the
Company and one or more of its Subsidiaries, or (c) one or more Subsidiaries of
the Company.  For the avoidance of doubt, a Subsidiary of the Company includes
direct and indirect Subsidiaries (e.g., a Subsidiary of a Subsidiary).

 

“Superior Proposal” means any bona fide written Acquisition Proposal which the
Company Board determines in its good faith judgment (after receiving advice from
its outside legal counsel and financial advisor and taking into account all the
terms and conditions of such proposal and the Merger including any conditions to
consummation and the likelihood of such transaction being consummated) is more
favorable to the holders of Capital Stock from a financial point of view than
the Merger, taking into account (a) all financial considerations, (b) the
identity of the third party making such Acquisition Proposal, (c) the
anticipated timing, conditions (including any financing condition or the
reliability of any debt or equity funding commitments) and prospects for
completion of such Acquisition Proposal, (d) the other terms and conditions of
such Acquisition Proposal and the implications thereof on the Company, including
relevant legal, regulatory and other aspects of such Acquisition Proposal deemed
relevant by the Company Board and (e) any revisions to the terms of this
Agreement and the Merger proposed by Buyer during the Notice Period set forth in
Section 7.2(b).

 

“Target Working Capital” means Eight Million, Three Hundred Thousand Dollars
($8,300,000).

 

“Tax Returns” means returns, declarations, reports, estimates, claims for
refund, information returns or other documents (including any amendments,
related or supporting schedules, statements or other information) filed or
required to be filed in connection with the determination, assessment or
collection of Taxes of any party or the administration of any laws, regulations
or administrative requirements relating to any Taxes.

 

“Taxes” means all taxes, including any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, registration, license,
lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value-added, capital, capital stock,
social security, unemployment, escheat, unclaimed property, withholding,
environmental, property, windfall profits, customs, duties or other taxes or
charges, fees, imposts, levies or other assessments of a similar nature imposed
by a Tax Authority, together with all interest and any penalties, additions to
tax, fines or additional amounts with respect thereto, whether disputed or not.

 

“Taxing Authority” means the IRS and any other Governmental Authority
responsible for the administration and/or collection of any Tax.

 

10

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“Transaction Consideration” means the Base Transaction Consideration plus the
Estimated Adjustment Amount plus the Aggregate Exercise Price minus the
Estimated Transaction Expenses.

 

“Transaction Deductions” shall mean the sum of (i) any and all payments in
respect of Company Options at the Closing as contemplated by this Agreement,
including the Company portion of any employment Taxes which shall exclude any
amounts contributed to the Escrow Fund with respect to such Company Options,
plus (ii) any and all deductions of the Company resulting from the exercise of
any Company Options in connection with the transactions contemplated by this
Agreement, plus (iii) any and all payments in respect of Common Stock as
contemplated by this Agreement that results in a deduction to the Company
pursuant to Section 421(b) of the Code, including the Company portion of any
employment Taxes, plus (iv) any and all bonuses paid in connection with the
transactions contemplated by this Agreement, plus (v) any and all deductible
payments made at the Closing in respect of restricted stock of the Company
contemplated by this Agreement, plus (vi) any and all deductible amounts
incurred in connection with the retirement of Indebtedness as contemplated by
this Agreement, plus (vii) any and all deductible payments of Transaction
Expenses as contemplated by this Agreement.  For purposes of this Agreement, the
parties agree that seventy percent (70%) of success-based fees paid by the
Company shall be deductible under Rev. Proc. 2011-29 and shall be a Transaction
Deduction.

 

“Transaction Expenses” means (i)(A) all fees and expenses payable by the
Acquired Companies in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements, including fees and expenses payable to
all attorneys, accountants, financial advisors and other professionals and
bankers’, brokers’ or finders’ fees for persons engaged by the Acquired
Companies or any stockholder of the Company, (B) any bonus, severance or change
of control payment or benefit (or similar payment obligation) made or provided,
or required to be made or provided, by the Acquired Companies solely as a result
of the Transactions (for the avoidance of doubt, any bonus, severance or change
of control payment or benefit (or similar payment obligation) triggered by any
action by Buyer or any of its Affiliates shall not be included the calculation
of Transaction Expenses), (C) the premium for directors’ and officers’ liability
insurance coverage for the Company’s directors and officers for coverage during
the six (6) years following the Effective Time, in each case to the extent not
paid by the Acquired Companies as of the close of business on the Business Day
immediately preceding the Closing Date, (ii) fifty percent (50%) of the fees
payable to the Escrow Agent or the Paying Agent and (iii) all employer Taxes
associated with payment of the Transaction Consideration; provided, that,
Transaction Expenses shall only include such amounts to the extent they arise
from the Escrow Agreement, the Paying Agent Agreement or other Contracts or
arrangements entered into by or on behalf of the Acquired Companies prior to the
Stock Sale Closing Time.

 

“Transaction Percentage” means, with respect to each Securityholder, the
percentage equal to (i) the proceeds payable to such Securityholder pursuant to
Section 2.1(a)(i), Section 2.7(b)(i), Section 2.8(a)(i), Section 2.8(b), Section
2.8(d) and Section 2.9(a) divided by (ii) the Aggregate Upfront Transaction
Consideration.

 

“Transactions” means the Initial Stock Sale and the Merger.

 

11

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“Unvested Company Options” means, as of immediately prior to the Effective Time
(after giving effect to any acceleration resulting from or in connection with
the Merger), all Company Options to the extent they are not then Vested Company
Options.

 

“Vested Company Options” means, as of immediately prior to the Effective Time
(after giving effect to any acceleration resulting from or in connection with
the Merger), all Company Options to the extent they are (i) then vested and
exercisable and (ii) have an exercise price per share less than the Per Share
Consideration.

 

“Working Capital” means the working capital of the Company, calculated pursuant
to Schedule 1.1(a) hereto; provided, that in no event shall Working Capital
include any income Tax asset or any income Tax liability.

 

Section 1.2                    Table of Definitions.  The following terms have
the meanings set forth in the Sections referenced below:

 

Definition

 

Location

280G Approvals

 

Section 7.11(c)(ii)

280G Waivers

 

Section 7.11(c)(i)

Acquired Stock

 

Recitals

Advisers Act

 

Section 4.24

Advisory Contract

 

Section 7.9(c)

Agreement

 

Preamble

Allocation Schedule

 

Section 3.2(g)

Balance Sheet

 

Section 4.5(a)

Buyer

 

Preamble

Buyer Closing Balance Sheet

 

Section 3.6(b)

Buyer Closing Indebtedness

 

Section 3.6(b)

Buyer Closing Net Working Capital

 

Section 3.6(b)

Buyer Closing Statement

 

Section 3.6(b)

Buyer Indemnified Parties

 

Section 10.2

Buyer Plans

 

Section 7.11(a)

Buyer Registered Advisers

 

Section 5.7

Capitalization Schedule Update

 

Section 7.3(c)

Certificate of Merger

 

Section 2.3

Claims

 

Section 7.15

Closing

 

Section 2.5

Closing Date

 

Section 2.5

Company

 

Preamble

Company Board

 

Recitals

Company Employee Plans

 

Section 4.20(a)

Company Indemnified Parties

 

Section 10.4

Confidentiality Agreement

 

Section 7.5

Contingent Workers

 

Section 4.18(a)

Converted Award

 

Section 2.8(b)

Converted Award Escrow Fund

 

Section 2.8(c)

Counsel

 

Section 7.10(a)(iii)

 

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Covered Employees

 

Section 7.11(a)

Deductible

 

Section 10.6(a)

Determination Date

 

Section 3.6(c)

DGCL

 

Recitals

Disclosure Schedules

 

Article IV

Disputes

 

Section 7.10(a)(i)

Dissenting Shares

 

Section 3.3(a)

Effective Date

 

Recitals

Effective Time

 

Section 2.3

Estimated Closing Balance Sheet

 

Section 3.6(a)

Estimated Closing Indebtedness

 

Section 3.6(a)

Estimated Closing Statement

 

Section 3.6(a)

Estimated Net Working Capital

 

Section 3.6(a)

Estimated Transaction Expenses

 

Section 3.5

Expense Fund

 

Section 3.1(c)

FCPA

 

Section 4.21

Final Closing Indebtedness

 

Section 3.6(c)

Final Closing Net Working Capital

 

Section 3.6(c)

Goodwin

 

Section 7.10(a)

Governmental Approvals

 

Section 4.4(b)

Indemnification Obligations

 

Section 10.2

Indemnified Party

 

Section 10.5(a)

Indemnifying Party

 

Section 10.5(a)

Initial Stock Sale

 

Recitals

Insurance Policies

 

Section 4.12

Insured Party

 

Section 7.8(a)

Letter of Transmittal

 

Section 3.2(a)

Losses

 

Section 10.2

Material Contracts

 

Section 4.14(b)

Merger

 

Recitals

Merger Sub

 

Preamble

Negative Consent

 

Section 7.9(c)

NOL Objection

 

Section 8.1(c)

NOL Schedule

 

Section 8.1(c)

Notice of Objection

 

Section 3.6(c)

Optionholder

 

Section 3.1(a)

Original Agreement

 

Recitals

Owned Intellectual Property

 

Section 4.9(a)

Paying Agent

 

Section 3.1(a)

Paying Agent Agreement

 

Section 3.1(a)

Payment Fund

 

Section 3.1(a)

Payoff Letters

 

Section 9.3(d)

Permits

 

Section 4.7(c)

Permitted Encumbrances

 

Section 4.10

Personally Identifiable Information

 

Section 4.9(j)

PII

 

Section 4.24

Premises

 

Section 4.19

Privileged Communications

 

Section 7.10(a)(iii)

 

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Protected Material

 

Section 7.10(a)(iv)

Publicly Available Software

 

below

Real Property Leases

 

Section 4.11(c)

Released Claims

 

Section 7.15

Released Parties

 

Section 7.15

Releasing Parties

 

Section 7.15

Representatives

 

Section 7.2(a)

Requisite Stockholder Consent

 

Section 4.2(b)

Savings Plan

 

Section 7.11(b)

Schedule Updates

 

Section 7.3(b)

Securityholder Representative

 

Preamble

Securityholder Representative Letter Agreement

 

Section 3.1(c)

Selling Securityholder

 

Preamble

Selling Securityholder Parties

 

Section 7.10(a)

Significant Customer

 

Section 4.15

Significant Manager

 

Section 4.15

Significant Supplier

 

Section 4.15

Sponsors

 

Section 9.3(g)

Stock Sale Closing Time

 

Section 2.1(a)

Stock Sale Purchaser

 

Section 12.11(b)

Subsidiary Interests

 

Section 4.1(b)

Surviving Company

 

Section 2.2

Third Party Claim

 

Section 10.5(a)

Third Party Consents

 

Section 4.4(a)(ii)

Transition Date

 

Section 7.11(a)

Transfer Taxes

 

Section 8.6

True-Up Payment

 

Section 3.6(d)

Unresolved Items

 

Section 3.6(c)

Unresolved NOL Items

 

Section 8.1(c)

Upfront Option Payment

 

Section 2.8(a)

Year End Financial Statements

 

Section 7.12(b)

 

ARTICLE II
THE INITIAL STOCK SALE AND THE MERGER

 

Section 2.1                    The Initial Stock Sale.

 

(a)           On the Closing Date, immediately prior to the Effective Time (such
time, the “Stock Sale Closing Time”) and upon the terms and subject to the
conditions set forth herein and in reliance on the representations and
warranties made by the Company and the Selling Securityholders herein, Buyer
shall purchase (or, if Buyer has made an assignment pursuant to
Section 12.11(b), the Stock Sale Purchaser shall, and Buyer shall cause the
Stock Sale Purchaser to, purchase) from the Selling Securityholders, and the
Selling Securityholders shall sell to Buyer (or, if Buyer has made an assignment
pursuant to Section 12.11(b), to the Stock Sale Purchaser), the Acquired Stock,
free and clear of any and all Encumbrances (except for any restrictions on sales
of securities under applicable securities laws), in exchange for an amount equal
to (i) at the

 

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Stock Sale Closing Time, (A) the number of shares of Series A Preferred Stock
held by such Selling Securityholder multiplied by the Base Series A Per Share
Price plus (B) the number of shares of Series B Preferred Stock held by such
Selling Securityholder multiplied by the Base Series B Per Share Price plus (C)
the number of shares of Common Stock held by such Selling Securityholder
multiplied by the Base Common Stock Per Share Price plus (D) such Selling
Securityholder’s Pro Rata Share attributable to Capital Stock (for the avoidance
of doubt, not including any Company Options) multiplied by (1) the Estimated
Adjustment Amount minus (2) the Transaction Expenses plus (ii) such Selling
Securityholder’s Transaction Percentage attributable to Capital Stock (for the
avoidance of doubt, not including any Company Options) of (A) any cash
disbursements required to be made from the Escrow Fund to the Securityholders in
accordance with the terms of the Escrow Agreement when such disbursements, if
any, are required to be made plus (b) any cash disbursements made from the
Expense Fund, when such disbursements, if any, are required to be made, plus
(iii) such Selling Securityholder’s Pro Rata Share attributable to Capital Stock
(for the avoidance of doubt, not including any Company Options) of any
adjustment pursuant to Section 3.6(d).

 

(b)           Each Selling Securityholder shall be entitled to receive its
portion of the Transaction Consideration by exchanging the Certificate(s)
representing the Acquired Stock in accordance with Section 3.2.

 

Section 2.2                    The Merger.  Subject to the terms and conditions
of this Agreement and in accordance with the DGCL, immediately after the Initial
Stock Sale and at the Effective Time, the Company and Merger Sub shall
consummate the Merger pursuant to which (a) Merger Sub shall be merged with and
into the Company and the separate corporate existence of Merger Sub shall
thereupon cease, (b) the Company shall be the surviving company in the Merger
(the “Surviving Company”) and shall continue to be governed by the DGCL and (c)
the separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger.

 

Section 2.3                    Effective Time; Effect of the Merger.  On the
Closing Date, immediately after the Stock Sale Closing Time, Merger Sub and the
Company shall duly execute the certificate of merger substantially in the form
attached hereto as Exhibit B (the “Certificate of Merger”) and file such
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the DGCL.  The Merger shall become effective at such time as the
Certificate of Merger, accompanied by payment of the filing fee (as provided in
the DGCL), has been examined by, and received the endorsed approval of, the
Secretary of State of the State of Delaware, or at such subsequent time as Buyer
and the Company shall agree and shall specify in the Certificate of Merger (the
date and time the Merger becomes effective being the “Effective Time”).  At the
Effective Time, the effect of the Merger shall be as provided in this Agreement
and the applicable provisions of the DGCL.  Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, all rights and
property of the Company and Merger Sub shall vest in the Surviving Company, and
all debts and liabilities of the Company and Merger Sub shall become debts and
liabilities of the Surviving Company.

 

Section 2.4                    Certificate of Incorporation and Bylaws.  The
certificate of incorporation of Merger Sub, as in effect immediately prior to
the Effective Time, shall be as set forth on Exhibit C hereto and the
certificate of incorporation of the Surviving Company shall be

 

15

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amended to conform thereto as of the Effective Time, until thereafter amended as
provided by Law and by the terms of such certificate of incorporation. 
Immediately following the Effective Time, the board of directors of the
Surviving Company shall adopt bylaws of the Surviving Company that conform to
the bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
until thereafter amended as provided by Law, by the terms of the certificate of
incorporation of the Surviving Company and by the terms of such bylaws. 
Notwithstanding the foregoing, the name of the Surviving Company shall be
“Placemark Holdings, Inc.” and the certificate of incorporation and bylaws of
the Surviving Company shall so provide.

 

Section 2.5                    Closing.  The closing of the Merger (the
“Closing”) shall take place immediately after the Stock Sale Closing Time, on
the first (1st) Business Day after all of the conditions set forth in Article IX
shall have been satisfied or, if permissible, waived by the parties entitled to
the benefit of the same (other than those that by their terms are to be
satisfied or waived at the Closing), or at such other place, time and date as
may be mutually acceptable to Buyer and the Company (the “Closing Date”).  The
Closing shall take place at the offices of Goodwin Procter LLP, Exchange Place,
Boston, Massachusetts 02109, or at such other place as agreed to by Buyer and
the Company.

 

Section 2.6                    Board Representatives and Officers.  At the
Effective Time and by virtue of the Merger, the members of the board of
directors of Merger Sub and the officers of Merger Sub immediately prior to the
Effective Time shall be the initial members of the board of directors of the
Surviving Company and the officers of the Surviving Company, each to hold office
in accordance with the certificate of incorporation and bylaws of the Surviving
Company.

 

Section 2.7                    Effect on Capital Stock.  As of the Effective
Time, by virtue of the Merger and without any action on the part of any holder
of Capital Stock or any holders of capital stock of Merger Sub:

 

(a)           Each share of common stock, par value $.01 per share, of Merger
Sub issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into one (1) fully paid and nonassessable share of common stock,
par value $.01 per share, of the Surviving Company following the Merger, and
such shares shall constitute the only outstanding shares of capital stock of the
Surviving Company.

 

(b)           Each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than any Dissenting Shares and the Acquired
Stock) will, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive an amount equal to (i)
the Per Common Share Consideration plus (ii) any cash disbursements required to
be made from the Escrow Fund with respect to such share to the former holder
thereof in accordance with the terms of the Escrow Agreement when such
disbursements, if any, are required to be made, (iii) any adjustment pursuant to
Section 3.6(d), on a per share basis plus (iv) any cash disbursements made from
the Expense Fund in accordance with Section 3.7, on a per share basis.

 

(c)           At the Effective Time, all shares of Capital Stock owned by Buyer,
Merger Sub or any direct or indirect wholly-owned Subsidiary of Buyer or Merger
Sub, shall by

 

16

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virtue  of the Merger, without any action on part of such holder, be canceled
and retired for no consideration.

 

(d)           As of the Effective Time, all shares of Capital Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and subject to Section 3.3 with respect to any Dissenting
Shares, each holder of a Certificate shall cease to have any rights with respect
thereto, except the right to receive (subject to any adjustments specified
herein), upon the surrender of such Certificate or the delivery of an affidavit
as described in Section 3.2(c), the amounts specified in Section 2.7(b).

 

Section 2.8                    Treatment of Company Options and Company Stock
Option Plans.

 

(a)           At the Stock Sale Closing Time, each Vested Company Option
outstanding immediately prior to the Stock Sale Closing Time that has not been
exercised will be canceled in exchange for the right to receive per share of
Common Stock subject to such Vested Company Option as of immediately prior to
the Stock Sale Closing Time (after giving effect to any acceleration resulting
from or in connection with the Transactions) (i) the Per Option Share
Consideration (the “Upfront Option Payment”), (ii) any cash disbursements
required to be made from the Escrow Fund with respect to such share to the
former holder of such Vested Company Option in accordance with the terms of the
Escrow Agreement when such disbursements, if any, are required to be made, (iii)
any adjustment pursuant to Section 3.6(d) on a per share basis and (iv) any cash
disbursements made from the Expense Fund in accordance with Section 3.7, on a
per share basis, and such Vested Company Options thereupon shall no longer
represent the right to purchase Common Stock or any other equity security of the
Company, Buyer, the Surviving Company or any other Person or the right to
receive any other consideration other than as provided herein.

 

(b)           At the Stock Sale Closing Time, each Unvested Company Option
outstanding immediately prior to the Stock Sale Closing Time (after giving
effect to any acceleration resulting from or in connection with the
Transactions) will be canceled and such Unvested Company Option shall no longer
represent the right to purchase Common Stock or any other equity security of the
Company, Buyer, the Surviving Company or any other Person or the right to
receive any other consideration other than as provided herein; provided, that,
(i) if after the Closing but prior to the first (1st) anniversary thereof, the
employment or service relationship of the holder of such Unvested Company Option
is terminated by Buyer, the Company or any of their respective Subsidiaries or
Affiliates (or other applicable successor entity of the Company) without Cause
or as a result of such holder’s death or disability (as such terms are defined
in Section 22(e) of the Code) or (ii) if such holder is employed by, or has a
service relationship with, Buyer, the Company or any of their respective
Subsidiaries or Affiliates (or other applicable successor entity of the Company)
from the Closing through the first (1st) anniversary thereof, then (x) the
Unvested Company Option held by such holder immediately prior Stock Sale Closing
Time, shall be converted (a “Converted Award”) into the right to receive per
share of Common Stock that was subject to such Converted Award immediately prior
to the Stock Sale Closing Time (A) the Per Option Share Consideration (as
adjusted on a per share basis pursuant to Section 3.6(d) or Section 3.6(e))
payable no later than thirty (30) days after the date of such termination of
employment or other service relationship or such first anniversary date, as
applicable, (B) any cash disbursements required to be made from the Escrow Fund
with respect

 

17

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to such share to the holder of such Converted Award in accordance with the terms
of the Escrow Agreement when such disbursements, if any, are required to be made
payable at such time(s) and on the same terms and conditions as such payments
are made to the Selling Securityholders, and (C) any cash disbursements made
from the Expense Fund in accordance with Section 3.7, on a per share basis at
such time(s) and on the same terms and conditions as such payments are made to
the Selling Securityholders.  On the Closing Date, the Company shall deliver to
Buyer a Converted Award Allocation Certificate setting forth the name of each
holder of a Converted Award and the number of shares of Common Stock that could
be subject thereto as of immediately prior to the Stock Sale Closing Time.

 

(c)           In order to administer the payment of the Converted Awards, Buyer
shall establish an escrow account (the “Converted Award Escrow Fund”) to satisfy
the payment obligation with respect to the Converted Awards by depositing with
the Escrow Agent the Converted Award Escrow Amount in accordance with this
Section 2.8(c).  The Converted Award Escrow Fund shall be used exclusively to
satisfy obligations with respect to the Converted Awards and shall not be
available to satisfy any adjustments pursuant to Section 3.6 or Article X. 
Within five (5) Business Days after any Unvested Company Option becomes a
Converted Award pursuant to Section 2.8(b), (i) the Buyer shall deliver notice
to the Securityholder Representative and the Escrow Agent and (ii) the Buyer and
the Securityholder Representative shall deliver written instructions to the
Escrow Agent to release to the Surviving Company which shall in turn pay the
holder of such Converted Award an amount equal to the Per Option Share
Consideration multiplied by the number of shares of Common Stock that were
subject to the Converted Award immediately prior to the Stock Sale Closing Time
(as set forth on the Converted Award Allocation Certificate delivered pursuant
to Section 2.8(b)), as adjusted on a per share basis pursuant to Section 3.6(d)
or Section 3.6(e).

 

(d)           No later than five (5) Business Days after the first (1st)
anniversary of the Closing, Buyer and the Securityholder Representative shall
deliver written instructions to the Escrow Agent to disburse to the Paying Agent
an amount equal to the aggregate amount remaining in the Converted Award Escrow
Fund (after giving effect to any payments due to the holders of Converted Awards
pursuant to Section 2.8(c)), with such amount to be disbursed to the
Securityholders in proportion to their respective Pro Rata Shares (which
payments shall be made through the Paying Agent, in respect of Capital Stock,
and through the Surviving Company’s payroll, in respect of Company Options).

 

(e)           The Company shall take all actions necessary to terminate the
Equity Incentive Plan as of the Stock Sale Closing Time (except to the extent
necessary to give effect to the terms of this Section 2.8).

 

Section 2.9                    Treatment of Company Warrants.  Prior to the
Stock Sale Closing Time, the Company shall take all actions necessary to
terminate any Company Warrants.

 

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ARTICLE III
PAYMENT FOR SECURITIES

 

Section 3.1                    Payment for Company Capital Stock and Company
Options.

 

(a)           Prior to the Closing, the Company shall appoint Boston Financial
Data Services (the “Paying Agent”) as the paying agent pursuant to a Paying
Agent Agreement in substantially the form attached hereto as Exhibit D (the
“Paying Agent Agreement”).  At the Closing, Buyer shall deposit with the Paying
Agent, for the benefit of the Securityholders (except to the extent such
Securityholders hold Company Options) cash in an amount equal to the Aggregate
Upfront Transaction Consideration minus the Upfront Option Payment minus the
Converted Award Escrow Fund (the “Payment Fund”).  The Payment Fund shall not be
used for any other purpose, except to make the payments required by Section
2.1(a)(i), Section 2.7(b)(i), and Section 2.9(a) (if applicable) in accordance
with the terms of this Agreement.  At the Effective Time, Buyer shall deposit
with the Surviving Company, for the benefit of the holders of Vested Company
Options (in their capacity as such, each an “Optionholder” and collectively, the
“Optionholders”), for payment by the Surviving Company, cash in an amount equal
to the Upfront Option Payment.  As soon as practicable after the Effective Time
(and in any event within two (2) Business Days after the Effective Time), Buyer
shall cause the Surviving Company to pay the Upfront Option Payment (subject to
Section 3.2(d) below) in accordance with the Allocation Schedule through the
Surviving Company payroll account(s) or the payroll account(s) of its
Subsidiaries.  Buyer shall pay all fees and expenses associated with the hiring
and retention of the Paying Agent (provided that fifty percent (50%) of such
expenses shall be included in Transaction Expenses).

 

(b)           At the Effective Time, Buyer shall cause to be delivered to the
Escrow Agent the Escrow Amount.  The Escrow Amount shall be held by the Escrow
Agent in the Escrow Fund solely for purposes of adjustments to the Transaction
Consideration pursuant to Section 3.6(b) and the payment to the Buyer
Indemnified Parties in satisfaction of any indemnification claims required by
Article X.  The administration of the Escrow Fund shall be governed by the terms
of the Escrow Agreement.  Any payments to be made out of the Escrow Fund for the
benefit of the Securityholders shall be made to the Paying Agent who shall
disburse such amounts to the Securityholders in accordance with each
Securityholder’s Transaction Percentage of such payments.

 

(c)           At the Effective Time, Buyer shall deposit into an account
designated by the Securityholder Representative an amount equal to $200,000 (the
“Expense Fund”).  The Expense Fund shall be held by the Securityholder
Representative as agent and for the benefit of the Securityholders in a
segregated client account. The Expense Fund may be used at any time by the
Securityholder Representative to fund any expenses incurred by it in the
performance of its duties and obligations hereunder, under the Ancillary
Agreements (if any) and the Letter Agreement by and between the Securityholder
Representative, the Company and certain Selling Securityholders (the
“Securityholder Representative Letter Agreement”) or otherwise in connection
with the transactions contemplated hereby or thereby.

 

(d)           At the Effective Time, Buyer shall cause to be delivered to the
Escrow Agent the Converted Award Escrow Amount.  The administration of the
Converted Award Escrow Amount shall be governed by the terms of the Escrow
Agreement.

 

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Section 3.2                    Exchange of Certificates, etc.

 

(a)           Prior to the Closing Date, Buyer shall cause the Paying Agent to
mail to each of Securityholder (other than an Optionholder), including the
Selling Securityholders, a letter of transmittal in a form provided by the
Paying Agent and reasonably satisfactory to the Company and Buyer (the “Letter
of Transmittal”), which specifies that delivery shall be effected, and risk of
loss and title to shares of the Acquired Stock or Capital Stock, as applicable,
shall pass, only upon delivery of the Certificates representing such shares of
Acquired Stock or Capital Stock, as applicable, to Buyer and instructions for
use in effecting the surrender of a Certificate in exchange for the Transaction
Consideration attributable to each share represented or formerly represented by
such Certificate.  Upon surrender of a Certificate to Buyer and immediately
after the Stock Sale Closing Time (in the case of the Acquired Stock) or the
Effective Time (in the case of the Capital Stock) together with a Letter of
Transmittal (or affidavit of loss in accordance with Section 3.2(c)), duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to promptly receive (and in any
event within two (2) Business Days after delivery of the Certificate(s) and
completed Letter of Transmittal (or affidavit of loss in accordance with Section
3.2(c) in accordance with this provision) in exchange therefor pursuant to (i)
Section 2.1(a)(i) (in the case of the Acquired Stock) and (ii) Section 2.7(b)(i)
(in the case of the Capital Stock).  The Certificate (if applicable) so
surrendered shall forthwith be canceled as of the Effective Time.  Buyer shall
instruct the Paying Agent in accordance with the terms of the Paying Agent
Agreement to make payment to a Securityholder by wire transfer at the Closing to
the extent that such Securityholder complies with the delivery requirements in
this Section 3.2(a) at least three (3) Business Days prior to the Closing Date.

 

(b)           If payment is to be made to a Person other than the Person in
whose name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and delivered to the Paying Agent with all
documents required to evidence and effect such transfer, and that the Person
requesting such payment pay any transfer or other Taxes required by reason of
the payment to a Person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving Company that such
Tax has been paid or is not applicable.  Until surrendered as contemplated by
this Section 3.2(b), each Certificate (other than Certificates representing
Dissenting Shares or the Acquired Stock) shall at any time after the Effective
Time represent solely the right to receive, upon such surrender the amounts
contemplated by Section 2.7(b).  For the avoidance of doubt, all Transaction
Consideration payable with respect to the Acquired Stock shall be paid to the
Selling Securityholders and not to Buyer.  Until so surrendered, outstanding
Certificates shall be deemed from and after the Effective Time, to evidence only
the rights to receive the portion of the Transaction Consideration payable in
respect of the Capital Stock, pursuant to Section 2.7(b) (for the avoidance of
doubt, not including the Acquired Stock), as applicable.

 

(c)           If any Certificate shall have been lost, stolen or destroyed, upon
the making of a customary affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed, the Paying Agent shall deliver in
exchange for such lost, stolen or destroyed Certificate the portion of Aggregate
Upfront Transaction Consideration attributable in respect of each share of
Capital Stock formerly represented thereby by payment out of the Payment Fund.

 

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(d)           The Surviving Company, the Escrow Agent, the Securityholder
Representative and Buyer shall be entitled to deduct and withhold from any
amounts otherwise payable pursuant to this Agreement such amounts as are
required to be withheld with respect to the making of such payment under the
Code, and the rules and regulations promulgated thereunder, or any other
provision of applicable Tax Laws.  Notwithstanding anything to the contrary in
this Agreement, to the extent that amounts are so withheld and paid over to the
appropriate Taxing Authority, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder thereof in respect
of which such deduction and withholding was made.

 

(e)           At the Effective Time, the stock transfer books of the Company
shall be closed and no further registration of transfers of shares shall
thereafter be made on the records of the Company.  If, after the Effective Time,
Certificates are presented to the Surviving Company for transfer, such
Certificates shall be canceled and exchanged for the Transaction Consideration
as provided in this Article III, subject to applicable Law in the case of
Dissenting Shares.

 

(f)            To the extent permitted by applicable Law, none of Buyer, Merger
Sub, the Company, the Surviving Company nor the Paying Agent shall be liable to
any Person in respect of any portion of the Aggregate Upfront Transaction
Consideration from the Payment Fund properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law.  If any
Certificates shall not have been surrendered immediately prior to the date that
such unclaimed funds would otherwise become subject to any abandoned property,
escheat or similar Law unclaimed funds payable with respect to such Certificates
shall, to the extent permitted by applicable Law, become the property of
Surviving Company, free and clear of all claims or interest of any Person
previously entitled thereto.

 

(g)           Not more than seven (7) nor less than three (3) Business Days
prior to the Stock Sale Closing Time, the Company shall deliver to Buyer a true,
correct and complete schedule setting forth (i) the allocation of the Aggregate
Upfront Transaction Consideration among the Securityholders, (ii) a true and
complete list of the record holders of the issued and outstanding Capital Stock
as of immediately prior to the Stock Sale Closing Time, including, (A) the
number of shares of Capital Stock owned at such time, (B) the certificate
numbers and number of shares of Capital Stock represented by each such
certificate and the date of issuance of each such certificate and (B) if
reflected on the books and records of the Acquired Companies, the tax
identification number of each such holder, (iii) a true and complete list of
holders of Vested Company Options as of the Stock Sale Closing Time, including
the exercise price of each Vested Company Option and the tax identification
number of each such holder, (iv) the mailing address of each Securityholder as
set forth on the books and records of the Company, (v) the Pro Rata Share and
Transaction Percentage attributable to each Securityholder, (vi) such other
information as may be reasonably required by the Paying Agent under the Paying
Agent Agreement and (vii) such other information relating to the Securityholders
and in the possession of the Acquired Companies as Buyer may reasonably request
prior to the date that is ten (10) Business Days prior to the Stock Sale Closing
Time in connection with the payments to be made to the Securityholders pursuant
to this Agreement (the “Allocation Schedule”).  The Allocation Schedule shall be
provided by the Company in an electronic format reasonably acceptable to Buyer.

 

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Section 3.3                    Appraisal Rights.

 

(a)           Notwithstanding anything in this Agreement to the contrary, but
only to the extent required by the DGCL, any shares of Capital Stock outstanding
immediately prior to the Effective Time (other than Acquired Stock) held by any
holder who has not voted in favor of the Merger and is otherwise entitled to
demand, and who properly demands, to receive payment of the fair value for such
shares of Capital Stock in accordance with Section 262 of the DGCL (such shares,
“Dissenting Shares”) shall not be converted pursuant to Section 2.7 into the
right to receive Transaction Consideration unless such holder fails to perfect
or otherwise effectively withdraws or loses such holder’s right to receive
payment of the fair value of such Dissenting Shares.  If, after the Effective
Time, such holder fails to perfect or loses its right to demand or receive such
payment, such shares of Capital Stock shall be treated as if they had been
converted as of the Effective Time into the right to receive Transaction
Consideration, without interest thereon, pursuant to Section 2.7.

 

(b)           The Company (or, after Closing, the Securityholder Representative)
shall give Buyer (i) prompt notice and a copy of any notice of any demand for
payment or objection to the Merger by a holder of Capital Stock (other than
Acquired Stock), of any request to withdraw a demand for payment and of any
other notice or instrument delivered to it pursuant to Section 262 of the DGCL
and (ii) the opportunity to participate at Buyer’s sole expense in all
negotiations and proceedings with respect to such demands, objections and
requests.  After Closing, the Securityholder Representative shall control all
proceedings with respect to the foregoing; provided that except with the prior
written consent of Buyer which consent shall not be unreasonably withheld,
delayed or conditioned, the Company (or, after Closing, the Securityholder
Representative) shall not make any payment with respect to any such demands,
objections and requests and shall not settle (or offer to settle) any such
demands, objections and requests or approve any withdrawal of the same.

 

Section 3.4                    Payments at Closing for Indebtedness of the
Company.  At least two (2) Business Days prior to the Closing, the Company shall
deliver to the Buyer a statement setting forth the Indebtedness to be repaid at
Closing and, at the Closing, Buyer shall repay in full such Indebtedness by wire
transfer of immediately available funds to the applicable lender set forth on
such statement as provided in the Payoff Letter regarding such Indebtedness.

 

Section 3.5                    Payments at Closing for Transaction Expenses of
the Company.  At least two (2) Business Days prior to the Closing, the Company
shall deliver to the Buyer a statement setting forth the Company’s good faith
estimate of the Transaction Expenses as of the end of the Closing Date (the
“Estimated Transaction Expenses”).  Such statement shall indicate the Estimated
Transaction Expenses to be paid by Buyer at Closing and at the Closing, (i)
Buyer shall pay, or cause to be paid, such Estimated Transaction Expenses of the
type described in clause (i)(B) of the definition of Transaction Expenses
through the payroll of the Surviving Company and (ii) Buyer shall pay in full
all of the other Estimated Transaction Expenses of the type described in clause
(i) of the definition of Transaction Expenses by wire transfer of immediately
available funds to the applicable Persons set forth on such statement.

 

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Section 3.6                    Transaction Consideration Adjustment.

 

(a)           At least two (2) days prior to the Closing Date, the Company shall
deliver to Buyer a written statement (the “Estimated Closing Statement”) setting
forth (i) an estimated unaudited consolidated balance sheet of the Acquired
Companies as of the close of business on the last Business Day immediately
preceding the Closing Date (the “Estimated Closing Balance Sheet”), (ii) its
good faith estimate of (A) Closing Working Capital (“Estimated Net Working
Capital”) and (B) the Closing Indebtedness (the “Estimated Closing
Indebtedness”) and (iii) the Company’s good faith calculation of the Estimated
Adjustment Amount, together with any information that Buyer has reasonably
requested to verify the amounts reflected in the Estimated Closing Statement. 
The Estimated Closing Balance Sheet shall be prepared in accordance with GAAP,
using the same accounting practices, policies and methodologies used in the
preparation of the Company’s audited balance sheet for the fiscal year ended
December 31, 2013.  Buyer shall have the right to review the Estimated Closing
Balance Sheet and object thereto, and the Company, on the one hand, and Buyer,
on the other hand, shall cooperate in good faith to resolve any such objections
prior to the Closing and update the Estimated Closing Balance Sheet accordingly;
provided, that to the extent such objections are not resolved prior to Closing,
the Estimated Closing Balance Sheet delivered by the Company in accordance with
this Section 3.6(a) shall control.

 

(b)           On or before the date that is ninety (90) calendar days following
the Closing Date, Buyer or its designee shall prepare, or cause to be prepared,
and deliver to the Securityholder Representative a written statement (the “Buyer
Closing Statement”) setting forth (i) an unaudited consolidated balance sheet of
the Acquired Companies of the close of business on the last Business Day
immediately preceding the Closing Date (the “Buyer Closing Balance Sheet”), (ii)
a calculation of (A) Closing Working Capital (“Buyer Closing Net Working
Capital”) and (B) the Closing Indebtedness (the “Buyer Closing Indebtedness”)
and (iii) Buyer’s calculation of the Final Adjustment Amount, together with any
information that the Securityholder Representative has reasonably requested to
verify the amounts reflected in the Closing Statement.  The Buyer Closing
Balance Sheet shall be prepared in accordance with GAAP, using the same
accounting practices, policies and methodologies used in the preparation of the
Company’s audited balance sheet for the fiscal year ended December 31, 2013.

 

(c)           From the delivery of the Buyer Closing Statement until the
determination of Final Closing Net Working Capital and Final Closing
Indebtedness in accordance with this Section 3.6(c), Buyer will provide, and
cause the Acquired Companies to provide, the Securityholder Representative with
reasonable access (during normal business hours and upon reasonable prior
notice) to (i) the books, records, facilities and employees of the Acquired
Companies, and (ii) the financial information, as of the Closing Date, of the
Acquired Companies, in each case, to the extent reasonably necessary for the
Securityholder Representative to evaluate the Buyer Closing Statement.  The
Securityholder Representative may dispute the calculation of Buyer Closing Net
Working Capital or Buyer Closing Indebtedness by notifying Buyer of such
disagreement in writing, setting forth in reasonable detail the particulars of
such disagreement (a “Notice of Objection”), within thirty (30) calendar days
after Securityholder Representative’s receipt of the Buyer Closing Statement. 
To the extent not set forth in the Notice of Objection, the Securityholders
shall be deemed to have agreed with Buyer’s calculation of all other items and
amounts contained in the Buyer Closing Statement.  In the event that the
Securityholder Representative does not provide a Notice of Objection within such
thirty (30) calendar day period, the Securityholders shall be deemed to have
accepted the

 

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Buyer Closing Statement delivered by Buyer and Buyer’s calculation of Buyer
Closing Net Working Capital and Buyer Closing Indebtedness set forth therein,
which shall then be final, binding and conclusive for all purposes hereunder. 
In the event any Notice of Objection is timely provided, Buyer and the
Securityholder Representative shall use their commercially reasonable efforts
for a period of thirty (30) calendar days (or such longer period as they may
agree in writing) to resolve any disagreements set forth in the Notice of
Objection.  If Buyer and the Securityholder Representative are unable to resolve
such items in dispute (the “Unresolved Items”) by the end of such period then,
at any time thereafter, either the Securityholder Representative or Buyer may
require that the Independent Accountants resolve the Unresolved Items.  For the
avoidance of doubt, the Independent Accountants shall only resolve the
Unresolved Items and not any disagreements that have been resolved by the
parties.  Buyer and the Securityholder Representative shall instruct the
Independent Accountants to determine as promptly as practicable, and in any
event within thirty (30) calendar days of the date on which such dispute is
referred to the Independent Accountants, based solely on the provisions of this
Agreement and the written presentations by the Securityholder Representative and
Buyer, and not on an independent review, whether and to what extent (if any) the
calculations of Closing Net Working Capital and/or Closing Indebtedness require
adjustment; provided, however, that in resolving any Unresolved Item, the
Independent Accountants (A) may not assign a value to any item greater than the
greatest value for such item claimed by Buyer or the Securityholder
Representative or less than the smallest value for such item claimed by either
Buyer or the Securityholder Representative and (B) may not take oral testimony
from the parties hereto or any other Person.  The fees and expenses of the
Independent Accountants shall be allocated between the parties based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party.  The determination of the
Independent Accountants shall be set forth in a written statement delivered to
the Securityholder Representative and Buyer and shall be final, conclusive and
binding on the parties.  The date on which Closing Net Working Capital and
Closing Indebtedness is finally determined in accordance with this Section
3.6(c) is hereinafter referred to as the “Determination Date.”  The Closing
Working Capital and Closing Indebtedness, each as finally determined in
accordance with this Section 3.6(c), shall be referred to as the “Final Closing
Net Working Capital” and “Final Closing Indebtedness,” respectively.

 

(d)           If the Final Adjustment Amount is greater than the Estimated
Adjustment Amount, then within five (5) Business Days after the Determination
Date, Buyer shall pay an amount in cash equal to the Final Adjustment Amount
minus the Estimated Adjustment Amount (the “True-up Payment”) as follows: (i)
Buyer shall deposit with the Escrow Agent as an addition to the Converted Escrow
Award Fund an amount equal to (A) the True-Up Payment divided by (B) the Fully
Diluted Shares minus the number of Ineligible Option Shares multiplied by (C)
the number of Contingent Converted Shares and (ii) pay the remaining True-Up
Payment to the Securityholders, pro rata in accordance with their respective Pro
Rata Shares.

 

(e)           If the Final Adjustment Amount is less than the Estimated
Adjustment Amount, then within five (5) Business Days after the Determination
Date, Buyer and the Securityholder Representative shall deliver joint written
instructions to the Escrow Agent to release to Buyer from the Escrow Fund an
amount of cash equal to the Estimated Adjustment Amount minus the Final
Adjustment Amount.

 

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(f)                                   The parties agree and acknowledge that any
payment pursuant to Section 3.6(d) or Section 3.6(e) above will be treated by
the parties as an adjustment to the Transaction Consideration.

 

Section 3.7                                                           
Distribution of Securityholder Representative Expense Fund.  The Securityholder
Representative shall deposit with Paying Agent for further distribution to each
Securityholder such Securityholder’s Transaction Percentage of the Expense Fund,
as and to the extent such amounts, if any, are no longer required to be held by
the Securityholder Representative for the performance of its duties hereunder,
as determined by the Securityholder Representative in its sole discretion.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Buyer and Merger Sub as of the Effective
Date that, except as set forth in the sections and subsections of Disclosure
Schedules attached hereto (the “Disclosure Schedules”) (facts, documents,
matters and other items disclosed in the Disclosure Schedules, once included
therein and regardless of section references in such Disclosure Schedules, shall
be deemed disclosed for purposes of any representation and warranty herein to
the extent such disclosure, on its face, is responsive or applicable to such
representation or warranty) as follows; provided, notwithstanding anything
herein to the contrary, (x) Section 4.26 contains the sole and exclusive
representations and warranties with respect to the Specified Litigation and the
Portfolio Management System Patent and (y) except as expressly set forth in
Section 4.26, (1) the Company makes no representation or warranty regarding the
Specified Litigation or the Portfolio Management System Patent and (2) no
representation or warranty herein shall be breached as a result of the Specified
Litigation or the Portfolio Management System Patent:

 

Section 4.1                                                           
Organization and Qualifications.

 

(a)                                 Each Acquired Company is (i) duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and has full power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted and (ii)
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for any such failures to be so qualified or
licensed and in good standing that would not, individually or in the aggregate,
have a Material Adverse Effect.

 

(b)                                 Section 4.1(b) of the Disclosure Schedules
contains a list of all Subsidiaries of the Company.  Except for the Subsidiaries
set forth in Section 4.1(b) of the Disclosure Schedules, the Company does not
own of record or beneficially, directly or indirectly, or have any right to
acquire or have any involvement in negotiations to acquire, any securities of
any other Person.  Except as set forth in Section 4.1(b) of the Disclosure
Schedules, all of the outstanding equity securities of each Subsidiary (the
“Subsidiary Interests”) are owned beneficially and of record by the Company, one
of its other Subsidiaries, or any combination of the Company and/or one or more
of its other Subsidiaries, in each case free and clear of any Encumbrances
(other than restrictions on transfer under applicable securities Law and
Permitted

 

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Encumbrances).  The Subsidiary Interests (i) are validly issued and outstanding
and fully paid and, for each Subsidiary that is a corporation, nonassessable and
(ii) are not subject to, or issued in violation of, any purchase option, call
option, right of first refusal, preemptive right or any similar provision under
applicable Law or any Contract.

 

(c)                                  The Company has heretofore furnished to
Buyer a true, complete and correct copy of the certificate of incorporation and
bylaws (or other similar organizational documents), each as amended as of the
Effective Date, of each of the Acquired Companies, each of which are in full
force and effect.  No Acquired Company is in violation of any of the provisions
of its certificate of incorporation or bylaws (or other similar organizational
documents).  True, complete and correct copies of the transfer books and minute
books of the Acquired Companies have been furnished to Buyer prior to the
Effective Date.

 

(d)                                 The Company has furnished to Buyer true,
complete and correct copies of the minutes of all meetings (or, in the case of
minutes that have not yet been finalized, a brief summary of the meeting) of the
stockholders of the Company, the Company Board (and any committees thereof) and
the board of directors or comparable governing body of each Subsidiary of the
Company (and any committees thereof).

 

Section 4.2                                                           
Authorization; Power; Enforceability.

 

(a)                                 Each Acquired Company has the requisite
corporate or limited liability company power and authority to own and hold its
properties and to carry on its business as now conducted.  The Company has full
corporate power and authority to execute and deliver this Agreement and each of
the Ancillary Agreements to which it will be a party and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby; provided that the Requisite Stockholder Consent
(as defined below) is required for the Company to consummate the Merger.  The
execution and delivery by the Company of this Agreement and each of the
Ancillary Agreements to which the Company will be party and the consummation by
the Company of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Company Board.  Subject to receipt of the
Requisite Stockholder Consent, no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of this Agreement
or any Ancillary Agreement or to consummate the Transactions contemplated hereby
and thereby.  This Agreement has been, and upon their execution each of the
Ancillary Agreements to which the Company will be a party will have been, duly
executed and delivered by the Company. This Agreement constitutes, and upon
their execution each of the Ancillary Agreements to which the Company will be a
party will constitute, the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general principles of equity (regardless of whether considered in a
proceeding in equity or at law).

 

(b)                                 The Company Board has (i) determined that
this Agreement, the Ancillary Agreements and the Transactions are fair to and in
the best interests of the Company and its stockholders and (ii) resolved to
recommend that the stockholders approve and adopt this Agreement and the
Transactions.  The affirmative votes of the holders of (A) a majority of the

 

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outstanding Capital Stock entitled to vote (voting together on an as-converted
basis) and (B) the holders of at least sixty percent (60%) of the outstanding
shares of Series A Preferred Stock and Series B-1 Preferred Stock (voting
together as a single class, on an as-converted basis) are the only votes of the
holders of any class or series of the Company’s Capital Stock necessary to
approve and adopt this Agreement and the Transactions (the “Requisite
Stockholder Consent”).

 

(c)                                  No “fair price”, “moratorium,” “control
share acquisition,” “business combination” or other similar anti-takeover
statute or regulation (including Section 203 of the DGCL) enacted under Laws
applicable to the Acquired Companies is applicable to this Agreement, the
Transactions or any of the other transactions contemplated by this Agreement. 
The Company Board has taken all actions so that the restrictions contained in
Section 203 of the DGCL applicable to a “business combination” (as defined in
such Section 203) will not apply to the execution, delivery or performance of
this Agreement and the consummation of the Transactions and the other
transactions contemplated hereby.

 

Section 4.3                                                           
Authorized Capital Stock.

 

(a)                                 The authorized Capital Stock of the Company
consists of (i) one hundred ten million (110,000,000) shares of Common Stock,
and (ii) seventy-nine million, eight hundred twenty-eight thousand, two hundred
thirteen (79,828,213) shares of preferred stock of the Company, forty-two
million, three hundred forty-seven thousand, six hundred sixty (42,347,660) of
which are designated as Series A Preferred Stock, thirty-six million, four
hundred eighty thousand, five hundred fifty-three (36,480,553) of which are
designated Series B-1 Preferred Stock and one million (1,000,000) of which are
designated Series B-2 Preferred Stock.  As of the Effective Date, (A) twenty-one
million, nine hundred thirty-three thousand, ninety eight (21,933,098) shares of
Common Stock are validly issued and outstanding, fully paid and nonassessable,
(B) thirty-five million, three hundred twenty-seven thousand, seven hundred
eighty (35,327,780) shares of Series A Preferred Stock are validly issued and
outstanding, fully paid and nonassessable, (C) thirty million, two hundred
sixty-two thousand, nine hundred seventeen (30,262,917) shares of Series B-1
Preferred Stock are validly issued and outstanding, fully paid and nonassessable
and (D) one million (1,000,000) shares of Series B-2 Preferred Stock are validly
issued and outstanding, fully paid and nonassessable.

 

(b)                                 Section 4.3(b) of the Disclosure Schedules
sets forth a list of (i) the holders of record of Capital Stock, including the
class and number of shares of Capital Stock held by them, (ii) the holders of
warrants to purchase Company Stock and (iii) the holders of Company Options.

 

(c)                                  Except as set forth in Section 4.3(c) of
the Disclosure Schedule, (i) no Person owns of record any shares of Capital
Stock, (ii) no subscription, warrant (including any Company Warrant), option,
convertible or exchangeable security, call, “phantom” stock right, stock
appreciation right, stock-based performance unit or other right (contingent or
other) to purchase or otherwise acquire equity securities of the Company is
authorized or outstanding, (iii) there is no Contract pursuant to which the
Company is or may become obligated to issue, deliver, transfer or sell, or
pursuant to which any Person has a right to subscribe for or acquire from the
Company, any shares, subscriptions, warrants, options, convertible or
exchangeable securities, or other such rights, equity interests or securities of
the Company, or to distribute to

 

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holders of any of the Company’s equity securities any evidence of Indebtedness
or asset and (iv) none of the Capital Stock is subject to, or was issued in
violation of, any purchase option, call option, right of first refusal,
preemptive right or any similar provision under applicable Law or Contract.

 

(d)                                 Except as provided for in the Company’s
certificate of incorporation, as set forth in Section 4.3(d) and the rights of
Buyer and Merger Sub under this Agreement, the Company has no obligation
(contingent or other) to purchase, redeem or otherwise acquire any of its equity
securities or any interest therein from any Person or to pay any dividend or
make any other distribution in respect thereof.  Except for the Investor
Agreements, no Acquired Company is party to (and there are no) voting trusts or
agreements, stockholders’ agreements, pledge agreements, buy-sell agreements,
rights of first refusal, preemptive rights or proxies relating to any equity
securities of any Acquired Company (whether or not an Acquired Company is a
party thereto).  All of the outstanding securities of the Company were issued in
compliance with all applicable federal and state securities Laws.

 

Section 4.4                                                            No
Conflict; Required Filings and Consents.

 

(a)                                 Except as set forth in Section 4.4(a) of the
Disclosure Schedules, the execution, delivery and performance by the Company of
this Agreement and each of the Ancillary Agreements to which the Company will be
a party, and the consummation of the transactions contemplated hereby and
thereby, do not and will not:

 

(i)                                     conflict with or violate the certificate
of incorporation or bylaws (or other similar organizational documents) of any of
the Acquired Companies;

 

(ii)                                  assuming that all Governmental Approvals
set forth in Section 4.4(b) of the Disclosure Schedule and any consent,
authorization, approval or wavier of any party (other than a Governmental
Authority) to any Material Contract and as set forth on Section 4.4(a)(ii) of
the Disclosure Schedules (collectively, the “Third Party Consents”) have been
obtained or made, conflict with or violate any Law applicable to any of the
Acquired Companies or by which any property or asset of any of the Acquired
Companies is bound or affected in any material respect;

 

(iii)                               result in any material breach or material
violation of, result in the termination or acceleration of, conflict with in any
material respect or constitute a material default (or an event that, with notice
or lapse of time or both, would become a material default) under, or require any
consent of any Person pursuant to, any Material Contract; or

 

(iv)                              result in the creation of any Encumbrance
(other than a Permitted Encumbrance) on any of the material assets of an
Acquired Company;

 

provided, however, that the representations in clauses (ii) and (iii) shall not
apply to Advisory Contracts to the extent that receipt of consent from a party
to such Contract is required under the Advisers Act in respect of the
transactions contemplated by this Agreement, which consents shall be governed by
Section 7.9(c).

 

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(b)                                 No Acquired Company is required to file,
seek or obtain any material notice, authorization, approval, Order, permit or
consent of or with any Governmental Authority (collectively, “Governmental
Approvals”), in connection with the execution, delivery and performance by any
Acquired Company of this Agreement and each of the Ancillary Agreements to which
the Company will be a party or the consummation of the transactions contemplated
hereby or thereby, except for (i) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware, (ii) such filings as may be
required by any applicable federal or state securities or “blue sky” laws, (iii)
the amendment of PII’s Form ADV or filing of a Form ADV-W and (iv) as described
in Section 4.4(b) of the Disclosure Schedules.

 

Section 4.5                                                            Financial
Statements; No Undisclosed Liabilities; Financial Controls.

 

(a)                                 Section 4.5 of the Disclosure Schedules
contains (i) the consolidated balance sheet of the Acquired Companies as of
December 31, 2011 and the related consolidated statements of income,
stockholders’ equity and cash flows of the Acquired Companies for the year ended
December 31, 2011, each as audited by McGladry LLP, (ii) the consolidated
balance sheet of the Acquired Companies as of December 31, 2012 and the related
consolidated statements of income, stockholders’ equity and cash flows of the
Acquired Companies for the year ended December 31, 2012, each as audited by
McGladry LLP, (iii) the consolidated balance sheet of the Acquired Companies as
of December 31, 2013 and the related consolidated statements of income,
stockholders’ equity and cash flows of the Acquired Companies for the year ended
December 31, 2013, each as audited by McGladry LLP (the “Balance Sheet”) and
(iv) the unaudited consolidated balance sheet of the Acquired Companies as of
March 31, 2014 and the related unaudited consolidated statements of income,
stockholders’ equity and cash flows of the Acquired Companies for the three (3)
months then-ended.  All such financial statements have been prepared in
accordance with GAAP consistently applied (except that such unaudited financial
statements do not contain all of the required footnotes and are subject to
normal year-end adjustments, provided such adjustments are not, individually or
in the aggregate, material) and present fairly and accurately, in all material
respects, the financial condition of the Acquired Companies and the results of
the operations of the Acquired Companies as of the date thereof and for the
periods covered thereby.  The Company maintains a standard system of accounting
established and administered in accordance with GAAP.

 

(b)                                 The Acquired Companies do not have any
liabilities (including trade payables and accrued expenses) that are of the type
that would be set forth on the consolidated balance sheet of the Acquired
Companies prepared in accordance with GAAP other than those (i) reflected in,
reserved against or otherwise described in the Balance Sheet or the notes
thereto, (ii) incurred in the ordinary course of business and consistent with
past practices since the date of the Balance Sheet (none of which constitutes
Indebtedness or arose out of or was caused by any breach of Contract, breach of
warranty, tort, infringement or violation of Law), (iii) Excluded Trade
Obligations incurred since the date of the Balance Sheet, or (iv) Transaction
Expenses or Closing Indebtedness.

 

(c)                                  Except as set forth in Section 4.5 of the
Disclosure Schedule, the Company implements policies, controls and practices to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization;

 

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(ii) transactions are recorded as necessary to permit preparation of the
consolidated financial statements of the Company in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) any
significant deficiencies or material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
materially and adversely affect the ability to record, process, summarize and
report financial information, and any fraud, whether or not material, which
involves management or other employees who have a significant role in respect of
internal control over financial reporting, are disclosed to the appropriate
member of management.  The Company has disclosed to Buyer any deficiency or
weakness described in clause (iv) of this Section 4.5(c) that has been reported
to the independent auditors or directors of the Company during the past five (5)
years.

 

Section 4.6                                                            Events
Subsequent to the Date of the Balance Sheet.  Except as set forth in Section 4.6
of the Disclosure Schedule, since the date of the Balance Sheet until the
Effective Date:

 

(a)                                 there has been no change in the condition,
assets or business of the Acquired Companies, except such changes that have not
had or would not be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect;

 

(b)                                 the Acquired Companies have conducted their
respective businesses only in the ordinary course, consistent with past
practices, and there has been no occurrence, change, event, effect, circumstance
or development that has had, or would be reasonably likely to have, a Material
Adverse Effect;

 

(c)                                  no Acquired Company has issued, sold or
delivered, or agreed or committed to issue, sell or deliver (whether through the
issuance or granting of options, warrants, convertible or exchangeable
securities, commitments, subscriptions rights to purchase or otherwise) any
stock, bond or other debt or equity security or profits interests, other than
issuances of awards pursuant to the Equity Incentive Plan or issuance of Capital
Stock upon exercise of awards issued pursuant to the Equity Incentive Plan, or
amended any of the terms thereof;

 

(d)                                 no Acquired Company has made any borrowing,
incurred any Indebtedness or issued any debt securities or assumed, guaranteed
or endorsed, or otherwise become responsible for, the Indebtedness of any
Person, or made any loans or advances, except for amounts borrowed under the
Company’s existing revolving line of credit or in the ordinary course of
business consistent with past practice;

 

(e)                                  the Company has not declared or made any
payment or distribution to Securityholders or purchased or redeemed any share of
Capital Stock or other equity security;

 

(f)                                   no Acquired Company has mortgaged,
pledged, encumbered or subjected to Encumbrance any of its assets, tangible or
intangible, other than Permitted Encumbrances;

 

(g)                                  no Acquired Company has sold, assigned,
conveyed or otherwise transferred any of its tangible assets having a book value
in excess of $100,000 or sold, assigned,

 

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transferred or licensed any Intellectual Property, in each case, except licenses
in the ordinary course of business;

 

(h)                                 no Acquired Company has amended, changed, or
terminated, or suffered any amendment, change, or termination of, any Material
Contract or waived, released or canceled any material debt owing to it or any
claim against a third party or instituted, settled, or agreed to settle any
Action;

 

(i)                                     no Acquired Company has paid any amount,
performed any obligation or agreed to pay any amount or perform any obligation,
in settlement or compromise of any Action or claims of liability against an
Acquired Company or any of their respective directors, officers, employees or
agents;

 

(j)                                    no Acquired Company has suffered any
material damage, material destruction or material Loss of its assets or
properties (whether or not covered by insurance) or waived any right of
substantial value whether or not in the ordinary course of business, other than
routine trading errors of not more $175,000 (in the aggregate) occurring in the
ordinary course of business;

 

(k)                                 no Acquired Company has amended or modified
its respective certificate of incorporation, bylaws or equivalent organizational
documents;

 

(l)                                     there has been no (i) reclassification,
combination, split, subdivision or redemption, or purchase, directly or
indirectly, of any of the Capital Stock, except for the repurchase of Capital
Stock issued under the Equity Incentive Plan, or (ii) dividend or other
distribution (whether in cash, shares or property or any combination thereof) in
respect thereof;

 

(m)                             no Acquired Company has acquired any Person or
any material assets of any Person (whether by merger, consolidation, acquisition
of securities or assets or otherwise), or entered into any joint venture,
exclusive dealing, noncompetition or similar Contract;

 

(n)                                 no Acquired Company has made any capital
improvements or purchases or other capital expenditures, or series of related
capital improvements or purchases or other capital expenditures, or entered into
any commitment for capital improvements or purchases or other capital
expenditures or series of related capital improvements or purchases or other
capital expenditures, involving more than $100,000 individually, or more than
$250,000 in the aggregate;

 

(o)                                 no Acquired Company has made any change in
its accounting systems, policies, principles, practices or methods, except as
required by GAAP;

 

(p)                                 no Acquired Company has entered into any
Contract or transaction that is required to be disclosed pursuant to Section
4.17;

 

(q)                                 no Acquired Company entered into, adopted,
amended or terminated any bonus, profit sharing, compensation, termination,
share option, share appreciation right, restricted share, performance unit,
pension, retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund or other arrangement for the

 

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benefit or welfare of any director, officer or employee, or increased in any
manner the compensation or fringe benefits of any director, officer or employee
or paid any benefit not required by any existing plan and arrangement;

 

(r)                                    no Acquired Company made, changed or
revoked any material Tax election or settled or compromised any federal,
provincial, state, local or foreign Tax liability, surrendered any right to
claim a Tax refund, entered into a Tax sharing agreement, obtained any Tax
ruling, prepared any Tax Return in a manner that is not consistent with past
practices, or filed any amended Tax Return or waived or extended the statute of
limitations in respect of any such Taxes;

 

(s)                                   no Acquired Company has, except for the
Transactions adopted a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization;
and

 

(t)                                    no Acquired Company has authorized or
entered into any commitment (contingent or otherwise) to do any of the
foregoing.

 

Section 4.7                                                           
Litigation; Compliance with Law; Permits.

 

(a)                                 Except as set forth in Section 4.7(a) of the
Disclosure Schedule, there is no Action pending or, to the Company’s Knowledge,
threatened against or affecting the Acquired Companies that would reasonably be
expected to have a Material Adverse Effect or result in a liability or loss to
the Acquired Companies of more than $250,000 individually or in the aggregate
(after giving effect to any amounts reasonably expected to be recovered from
insurance or other third parties).  Other than rules, regulations or Orders
generally applicable to any Person providing investment advisory or investment
management services issued by the U.S. Securities and Exchange Commission, the
Department of Labor or any comparable state or foreign Governmental Authority
with respect to guidelines on investment managers that have not arisen as a
direct result of the operations of an Acquired Company or as set forth in
Section 4.7(a) of the Disclosure Schedules, none of the Acquired Companies is,
and none of the Acquired Companies has been in the last three (3) years, subject
to any Order.  No Acquired Company is in default with respect to any Order known
to or served upon any of the Acquired Companies.  There is no Action by any of
the Acquired Companies pending against others.  None of the Acquired Companies
has entered into any Contract to settle or compromise any Action (including any
pending or threatened Action) that involves any obligation other than the
payment of money and under which an Acquired Company has any continuing
obligations (other than confidentiality).

 

(b)                                 The Acquired Companies are in compliance in
all material respects with all Laws applicable to it (including any registration
required under the Advisers Act).  Since January 1, 2012, no Acquired Company
has received any written notice, order, inquiry, investigation, complaint or
other communication from any Governmental Authority or any other Person that the
Company is not in compliance in all material respects with any Law applicable to
it.

 

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(c)                                  Section 4.7(c) of the Disclosure Schedules
sets forth a true and complete list of all material permits, licenses,
franchises, approvals, certificates, consents, waivers, concessions, exemptions,
orders, registrations, notices or other authorizations of any Governmental
Authority necessary for each of the Acquired Companies to own, lease and operate
its properties and to carry on its business as currently conducted (the
“Permits”).  Each Acquired Company holds, and is in compliance in all material
respects with, all such Permits and all such Permits are in full force and
effect.

 

Section 4.8                                                           
Proprietary Information of Third Parties.  None of the Acquired Companies has
received any written notice from a third party claiming that any person
employed, or otherwise engaged as a consultant, by the Acquired Companies has
(a) violated or may be violating any of the terms or conditions of his
employment, non-competition or non-disclosure agreement with such third party,
(b) disclosed or may be disclosing or utilized or may be utilizing any trade
secret or proprietary information or documentation of such third party or (c)
interfered or may be interfering in the employment relationship between such
third party and any of its present or former employees.  To the Company’s
Knowledge, no person employed, or otherwise engaged as a consultant, by the
Acquired Companies has employed any trade secret or any information or
documentation proprietary to any former employer in a manner which violates the
rights of any such former employer, and to the Company’s Knowledge, no person
employed, or otherwise engaged as a consultant, by the Acquired Companies have
violated any binding confidentiality obligations which such person may have had
with any third party, in each case in connection with the development,
manufacture or sale of any product or the development or sale of any service of
the Company.

 

Section 4.9                                                           
Intellectual Property.

 

(a)                                 Section 4.9(a) of the Disclosure Schedules
contains a true and complete list of the following categories of Intellectual
Property owned by the Acquired Companies: (i) all issued patents and patent
applications; (ii) all registered and applied for trademarks/service marks;
(iii) all domain names; (iv) all registered and applied for copyrights (and
applications for such that are in the process of being prepared); and (v) all
software applications or platforms that are material to the delivery of products
and services offered by the Acquired Companies (collectively, the “Owned
Intellectual Property”). Section 4.9(a) of the Disclosure Schedules specifies as
to all such Intellectual Property the nature of the Intellectual Property and,
if registered or applied for, the applicable jurisdiction(s) in which such
Intellectual Property has been issued or registered or in which an application
for such issuance or registration has been filed, the applicable registration
numbers (or application numbers), the applicable dates issued (or dates filed)
and the registered owners or applicants thereof.  Except as set forth in Section
4.9(a) of the Disclosure Schedule, all of the Owned Intellectual Property is
free and clear of all Encumbrances (other than Permitted Encumbrances) and is in
good standing, and all material registration, maintenance, renewal and annuity
fees and Taxes have been paid, and all material documents have been filed in
connection with the Company’s registered Intellectual Property or pending
applications therefor.

 

(b)                                 Except as set forth in Section 4.9(b) of the
Disclosure Schedule, (i) there is no Action pending or, to the Company’s
Knowledge, threatened against any of the Acquired Companies that would interfere
with such Acquired Company’s right to use the Intellectual

 

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Property being used in the respective Acquired Companies’ business as now
operated, (ii) the conduct of each of the Acquired Companies’ business as now
operated does not conflict with any Intellectual Property (other than patents)
of any other Person, and (iii) to the Company’s Knowledge, the conduct of each
of the Acquired Companies’ business as now operated does not conflict with any
patents of any other Person.

 

(c)                                  Except as set forth in Section 4.9(c) of
the Disclosure Schedule, (i) no Action is pending or, to the Company’s
Knowledge, threatened to the effect that any Acquired Company’s rights to the
Intellectual Property is invalid or unenforceable by such Acquired Company and
(ii) to the Company’s Knowledge, no patents owned or used by the Company are
invalid.  All registered trademarks and issued patents identified in Section
4.9(c) of the Disclosure Schedule are in full force and effect and currently in
good standing and have not been canceled, expired or abandoned.  The Acquired
Companies exclusively own, license, or otherwise have a valid right to use the
Intellectual Property used in the business free and clear of any Encumbrances.

 

(d)                                 Except as set forth in Section 4.9(d) of the
Disclosure Schedule, no Acquired Company has any obligation to compensate any
Person for the use of any patents or rights, and no Acquired Company has granted
any Person any license or other rights to use in any manner any of the patents
or rights of the Company, whether requiring the payment of royalties or not, in
each case other than in the ordinary course of business.  No Acquired Company
has entered into any agreement to indemnify any other Person against any charge
of infringement of any patent, trademark, trade name, service mark or copyright,
other than in the ordinary course of business.

 

(e)                                  Except as set forth in Section 4.9(e) of
the Disclosure Schedule, each current and former employee of the Acquired
Companies who has contributed to or participated in the creation or development
of any Intellectual Property owned or purported to be owned by the Acquired
Companies has executed a Proprietary Information and Inventions Agreement on
substantially the applicable Acquired Company’s standard form.  No past, present
or future royalties or other fees are or will be payable to any current or
former employee, officer, director, shareholder, agent, consultant or
independent contractor with respect to any Intellectual Property used in the
business of the Acquired Companies.

 

(f)                                   The Acquired Companies have taken all
reasonable steps to protect and preserve their rights in all material
confidential information and all trade secrets that comprise any part of the
Intellectual Property owned by or licensed to the Acquired Companies and to
protect and preserve all confidential information or trade secrets provided by
any third party to the Acquired Companies that the Acquired Companies are
obligated to keep confidential, including by maintaining commercially reasonable
security programs and privacy policies.  All trade secrets developed by and
belonging to the Acquired Companies that are material to the business of the
Acquired Companies have been kept confidential.  The Acquired Companies have the
right to use, free and clear of claims or rights of others, all trade secrets,
customer lists, processes, owned computer software, patents (to the Company’s
Knowledge), copyrights and trademarks required for the business of the Acquired
Companies as they now exist or the Acquired Companies believe that they can
obtain any such rights as necessary for the conduct of its business as planned
to be conducted without having a Material Adverse Effect.  Except as set

 

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forth in Section 4.9(f) of the Disclosure Schedule, no other Person has any
right, title or interest, ownership, license or otherwise, in and to any
Intellectual Property generated, developed, or created in any manner by any
employee of the Acquired Companies while employed by the Acquired Companies. 
Except as set forth in Section 4.9(f) of the Disclosure Schedule, each current
and former consultant of the Acquired Companies who provided services to the
Acquired Companies relating to the Intellectual Property has executed an
agreement containing customary proprietary information and invention assignments
in favor of the Acquired Companies.

 

(g)                                  Except as set forth in Section 4.9(g) of
the Disclosure Schedule, the Intellectual Property owned by the Acquired
Companies does not directly or indirectly include any Publicly Available
Software and the Company has not used Publicly Available Software, in whole or
in part, in the development of any part of such Intellectual Property, in any
such case in a manner that would subject such Intellectual Property, in whole or
in part, to all or part of the license obligations of any Publicly Available
Software.  “Publicly Available Software” means any software that requires as a
condition of use, modification, and/or distribution of such software that such
software or other software incorporated into, derived from, or distributed with
such software (i) be disclosed or distributed in source code form, (ii) be
licensed for the purpose of making derivative works or (iii) be redistributable
at no or minimal charge.  Publicly Available Software includes software licensed
or distributed under any of the following licenses: (A) GNU General Public
License (GPL) or Lesser/Library GPL (LGPL), (B) the Artistic License (e.g.,
PERL), (C) the Mozilla Public License, (D) the Netscape Public License, and (E)
the Sun Community Source License (SCSL), the Sun Industry Source License (SISL),
and the Apache Server License.

 

(h)                                 Section 4.9(h) of the Disclosure Schedules
sets forth a complete and accurate list of all Contracts, indicating for each
the title and the parties thereto, (i) granting to any Acquired Company any
material right under or with respect to any Intellectual Property owned by a
third party that is material to the operation of the businesses of the Acquired
Companies as such business is currently conducted, other than rights to
Intellectual Property owned by a third party that is commercially available and
used generally in the Acquired Companies’ operations and that are licensed for a
license fee of no more than $15,000 per license pursuant to a license agreement;
and (ii) all licenses, sublicenses, consents or other Contracts pursuant to
which the Company has licensed to any third party any Intellectual Property,
other than agreements entered into in the ordinary course of operation.

 

(i)                                     To the Company’s Knowledge, no source
code of any computer software owned by the Acquired Companies has been disclosed
to another Person other than an escrow agent pursuant to the terms of a source
code escrow agreement in customary form or to an employee or independent
contractor of the Acquired Companies subject to non-disclosure obligations. 
Except as set forth in Section 4.9(i) of the Disclosure Schedules, each Acquired
Company has taken commercially reasonable steps to ensure that all software used
by such Acquired Company is free of any disabling codes or instructions, and any
virus or other intentionally created, undocumented contaminant, that is intended
to be used to, access, modify, delete, damage or disable any of internal
computer systems (including hardware, software, databases and embedded control
systems) of such Acquired Company.  Each Acquired Company has taken reasonable
steps to safeguard such systems and restrict unauthorized access thereto.

 

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(j)                                    Except in compliance with an established
corporate policy, none of the Acquired Companies have collected or used any
Personally Identifiable Information from any third parties, and in connection
with any collection or use of Personally Identifiable Information each of the
Acquired Companies, has complied in all material respects with all applicable
domestic Laws and has complied in all material respects with all foreign Laws
and its publicly available privacy policy (if any) relating to the collection,
storage, use and onward transfer of all Personally Identifiable Information
collected by such Acquired Company.  “Personally Identifiable Information” means
data used or intended to be used to identify, contact, or precisely locate a
person, such as, name, address, telephone numbers, financial account number
and/or account information, email address, or government-issued identifier.

 

Section 4.10                                                     Title to
Properties.  The Acquired Companies have good and valid title to or a valid
leasehold interest in their respective properties, rights and assets (a) used,
or held for use, by an Acquired Company in connection with the conduct of its
business or (b) reflected on the Balance Sheet or acquired by them since the
date of the Balance Sheet (other than properties and assets disposed of in the
ordinary course of business since the date of the Balance Sheet), and all such
properties, rights and assets are free and clear of Encumbrances, except for (i)
liens for Taxes not yet due and payable or that are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP, (ii) inchoate, mechanics’, workmen’s,
repairmen’s, warehousemen’s, materialmen’s and carriers’ liens or other similar
liens arising in the ordinary course of business of the Acquired Companies
consistent with past practice, in each case, for sums not yet due and payable or
due but not delinquent or being contested in good faith by appropriate
proceedings, (iii) Encumbrances incurred in the ordinary course of business,
consistent with past practice and other imperfections of title, in each case,
that are not reasonably likely to adversely interfere in a material way with the
business operations of the Acquired Companies or their use of such assets or
properties (as such assets or properties are currently used by the Acquired
Companies), (iv) non-exclusive licenses of Intellectual Property and (v) any
Encumbrances set forth in Section 4.10 of the Disclosure Schedules
(collectively, “Permitted Encumbrances”).  There are no condemnation,
environmental, zoning or other land use regulation Actions pending that would
materially adversely affect the use or operation of the Acquired Companies’
properties and assets for their respective intended uses and purposes, or the
value of such properties, and no Acquired Company received written notice of any
special assessment proceedings which would affect such properties and assets. 
All tangible assets owned or leased by the Acquired Companies have been
maintained in all material respects in accordance with generally accepted
industry practice, are in good operating condition and repair, ordinary wear and
tear excepted and are free from defects other than such minor defects as do not
interfere with the intended use thereof in the conduct of normal operations.

 

This Section 4.10 does not relate to real property or interests in real
property, such items being the subject of Section 4.11, or to Intellectual
Property, such items being the subject of Section 4.9.

 

Section 4.11                                                     Leasehold
Interests.

 

(a)                                 None of the Acquired Companies have any
Owned Real Property.  Section 4.11 of the Disclosure Schedules sets forth a
true, correct and complete list of all Leased Real

 

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Property.  The Leased Real Property constitutes all of the real property
interests held by the Acquired Companies.  Each Acquired Company has valid and
binding leasehold title to all Leased Real Property purported to be leased by
such Acquired Company, in each case, free and clear of all Encumbrances, except
Permitted Encumbrances.  No parcel of Leased Real Property is subject to any
Order to modify the zoning classification, to classify as a landmark, to impose
special assessments , to restrict in any way the right to use, develop or alter,
or to be sold or  is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor, to the
Knowledge of the Company, has any such zoning modification, classification,
restriction, condemnation, expropriation or taking been proposed.  No parcel of
Leased Real Property is subject to any Encumbrance, easement, right-of-way,
building or use restriction, exception, variance, reservation or limitation that
might interfere with or impair the present and continued use thereof in the
usual and normal conduct of the business and operations of the Acquired
Companies.

 

(b)                                 The Leased Real Property and the structures
on the Leased Real Property used by the Acquired Companies are adequately
maintained and are in good operating condition and repair, ordinary wear and
tear excepted, for the requirements of the business of the Acquired Companies as
currently conducted.  Each separate parcel included in the Leased Real Property
has adequate water supply, storm and sanitary sewer facilities, access to
telephone, gas and electrical connections, fire protection, drainage and other
public utilities, and has adequate parking facilities that meet all requirements
imposed by Laws applicable to or binding on the applicable Acquired Company or
any of its assets or properties.

 

(c)                                  All leases covering the Leased Real
Property and all amendments and modifications thereto (the “Real Property
Leases”) are in full force and effect and are the legal, valid and binding
obligations of the applicable Acquired Company, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally and by general equitable principles (regardless of
whether enforcement is sought in a proceeding at Law or in equity).  Except as
set forth in Section 4.11(c) of the Disclosure Schedules, there exists no
material default under any Real Property Lease by any Acquired Company or, to
the Company’s Knowledge, any other party thereto, nor any event which, with
notice or lapse of time or both, would constitute a material default thereunder
by an Acquired Company or, to the Company’s Knowledge, any other party thereto. 
All rent and other amounts due and payable with respect to the Real Property
Leases have been paid through the Effective Date and all rent and other amounts
due and payable with respect to the Real Property Leases on or prior to the
Closing Date shall have been paid prior to the Closing Date.  Except as set
forth in Section 4.11(c) of the Disclosure Schedules, none of the Real Property
Leases expire or terminate by their terms prior to the first (1st) anniversary
of the Effective Date.  The Company has delivered to Buyer true, correct and
complete copies of all Real Property Leases, together with copies of all reports
(if any) of any engineers, environmental consultants or other consultants in its
possession or control relating to any of the Leased Real Property.

 

Section 4.12                                                     Insurance.

 

(a)                                 Section 4.12(a) of the Disclosure Schedules
sets forth a list, as of the Effective Date, of all material insurance policies
maintained by the Company and/or its Subsidiaries

 

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(collectively, the “Insurance Policies”) and the Company has heretofore
furnished to Buyer true, correct and complete copies of all Insurance Policies. 
Such Insurance Policies are valid, in full force and effect and enforceable, and
all premiums due on such Insurance Policies have been paid.  To the Knowledge of
the Company, no notice of cancellation, termination or reduction of coverage has
been received by an Acquired Company with respect to any Insurance Policy. 
Except as set forth in Section 4.12(a) of the Disclosure Schedules, none of the
Acquired Companies has been refused any insurance with respect to its assets or
operations, and none of the Acquired Companies’ coverage has been limited by any
insurance carrier to which any of them has applied for any such insurance or
with which any of them has carried insurance.

 

(b)                                 The Company has furnished to Buyer a true,
correct and complete list of all claims which have been made by the Company
since January 1, 2012, under any workers’ compensation, general liability,
property or other insurance policy applicable to the Company or any of its
assets or its business.  Except as set forth on such list, there are no pending
or threatened claims under any insurance policy.

 

Section 4.13                                                     Taxes.  Except
as set forth in Section 4.13 of the Disclosure Schedules:

 

(a)                                 The Acquired Companies have duly and timely
filed or caused to be filed (including all applicable extensions) or will duly
and timely file or cause to be filed prior to the Closing Date all Tax Returns
required to be filed on or prior to the Closing Date and the information
provided on such Tax Returns is complete and accurate in all material respects.

 

(b)                                 The Acquired Companies have paid all
material Taxes that are due and payable by the Acquired Companies.

 

(c)                                  Each of the Acquired Companies has complied
with all applicable Laws relating to the payment and withholding of Taxes
(including withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446
of the Code or similar provisions under any foreign Law), and has timely
withheld and paid over to the appropriate Taxing Authority all amounts required
to be so withheld and paid under all applicable Laws.

 

(d)                                 No Taxing Authority is asserting as of the
Effective Date by written notice to the Acquired Companies or, to the Company’s
Knowledge, threatening in writing to assert against the Acquired Companies, any
deficiency or claim for any amount of additional Taxes.

 

(e)                                  No Proceedings are currently proposed,
threatened or pending with regard to any Taxes or Tax Returns of the Acquired
Companies.  No notice of any audit or other administrative or court Proceeding
and no notice of deficiency or proposed Tax adjustment has been received in
writing by an Acquired Company with respect to the income, assets, operations or
business of such Acquired Company.

 

(f)                                   No Acquired Company has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. There are no Encumbrances on any
assets of any Acquired Company with respect to Taxes, other than

 

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statutory liens for Taxes not yet due and payable that have been fully accrued
on the books of the Acquired Companies.

 

(g)                                  No Acquired Company is liable for Taxes of
any other Person (other than members of any combined, consolidated or unitary
group the parent of which is the Company) under Treasury Regulations Section
1.1502-6, as a transferee or successor.

 

(h)                                 No Acquired Company is a party to or bound
by any Tax allocation, indemnification, sharing or similar arrangement or
agreement (other than pursuant the customary provisions of an agreement entered
into in the ordinary course of business the primary purpose of which is not
related to Taxes, such as leases, licenses or credit agreements) pursuant to
which an Acquired Company would have an obligation to make any payments after
the Closing Date, nor does an Acquired Company owe any amount under any such
agreement.

 

(i)                                     No Acquired Company will be required to
include any item of income in, or exclude any deduction in calculating, taxable
income for any taxable period (or portion thereof) ending after the Closing
Date, as a result of any: (i) change in method of accounting for a taxable
period ending on or prior to the Closing Date; (ii) “closing agreement” as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign Tax Law) executed on or prior to the Closing Date;
(iii) installment sale or open transaction disposition made or pre-paid amount
received on or prior to the Closing Date; (iv) intercompany transaction entered
into prior to the Closing Date or excess loss account existing as of the Closing
Date; or (v) election pursuant to Section 108(i) of the Code made effective on
or prior to the Closing Date.

 

(j)                                    The Acquired Companies have not engaged
in a “listed transaction” as defined in Treasury Regulations section
1.6011-4(b).

 

(k)                                 The Acquired Companies are in compliance
with all terms and conditions of any Tax exemption, Tax holiday or other Tax
reduction agreement or order entered into between an Acquired Company and any
Governmental Authority which is currently in force or in effect.

 

(l)                                     No Acquired Company has distributed
stock of another Person, or has had its stock distributed by another Person,
within the past five (5) years in a transaction that was purported or intended
to be governed in whole or in part by Section 355 of the Code.

 

(m)                             The Company has never been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code.

 

(n)                                 The Company engaged an independent
accounting firm that prepared the income Tax Returns of the Acquired Companies
for the 2013 taxable year.

 

(o)                                 The net operating losses of the Acquired
Companies as set forth on the Balance Sheet were calculated by the Company in
good faith using reasonable assumptions; provided that the foregoing is not a
guarantee of the amount or usability of the net operating losses of the Acquired
Companies.

 

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The representations and warranties set forth in Section 4.6(r), Section 4.9(a),
Section 4.10, Section 4.18(b), Section 4.20 and this Section 4.13 shall
constitute the only representations and warranties by the Acquired Companies
with respect to Taxes.  Except as expressly set forth in Section 4.13(o), no
Acquired Company makes any representation or warranty with respect to the
amount, validity or usability of any net operating losses or other Tax
attributes of the Acquired Companies.

 

Section 4.14                                                     Other
Agreements.

 

(a)                                 Except as set forth in Section 4.14(a) of
the Disclosure Schedule, no Acquired Company is party to or otherwise bound by:

 

(i)                                     any Contract with a distributor, dealer,
manufacturer’s representative, sales representative, sales agency, advertising
agency or other Person engaged in sales, distribution or promotional activities
on behalf of an Acquired Company (other than an employee of an Acquired Company
or any Manager or Sponsor), that (A) is not terminable on less than sixty (60)
days’ notice without cost or other liability to the Company (except for
Contracts which, in the aggregate, are not material to the business of the
Company) and (B) involves payments in excess of $100,000 in any year;

 

(ii)                                  Contracts with Significant Customers,
Significant Managers and Significant Suppliers;

 

(iii)                               any collective bargaining agreement or any
other Contract with any labor union;

 

(iv)                              Contract with any supplier containing any
provision permitting any party other than the applicable Acquired Company to
renegotiate the price or other terms, containing any payback or similar
provisions, or containing any provisions that accelerate, increase or require
return of payments (excluding any reimbursements to Managers in the ordinary
course of business and consistent with past practices and the accrual of
interest on unpaid amounts), in each case, upon the occurrence of a failure by
such Acquired Company to meet its obligations under the Contract when due or the
occurrence of any other events;

 

(v)                                 Contract for the future purchase of fixed
price assets or for the future purchase of materials, supplies or equipment in
excess of its normal operating requirements;

 

(vi)                              Contract for the employment of any officer or
employee that is not terminable on notice without cost or other liability to the
Company, except normal severance arrangements and accrued vacation pay;

 

(vii)                           voting trust or agreement, stockholders’
agreement, buy-sell agreement or first refusal or preemptive rights agreement
relating to any securities of the Company other than the Investor Agreements;

 

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(viii)                        Contract under which the Company has advanced or
agreed to advance money or make loans (other than advancement of expenses to
employees in the ordinary course of business);

 

(ix)                              Contract to issue, sell or otherwise
distribute or to repurchase or otherwise redeem, acquire or retire any share of
Capital Stock or any of its other equity securities, other than this Agreement;

 

(x)                                 any Contract under which an Acquired Company
has granted any person any registration rights, other than those set forth in
the Investor Agreements;

 

(xi)                              any Contract that limits, or purports to
limit, the ability of such Acquired Company to compete in any line of business
or with any Person or in any geographic area or during any period of time, or
that restricts the right of such Acquired Company to sell to or purchase from
any Person, or that grants the other party or any third person “most favored
nation” status;

 

(xii)                           bonus, pension, profit sharing, retirement,
hospitalization, insurance, stock purchase, stock option or other plan,
agreement or understanding pursuant to which benefits are provided to any
employee of the Acquired Companies (other than group insurance plans which are
not self-insured and are applicable to employees generally);

 

(xiii)                        any Contract relating to or evidencing
Indebtedness (other than Excluded Trade Obligations) or to the mortgaging or
pledging of, or otherwise placing an Encumbrance (other than a Permitted
Encumbrance) lien or security interest on, any asset of the Acquired Companies;

 

(xiv)                       any joint venture or partnership agreement or other
agreement which involves a sharing of revenues, profits, losses, costs or
liabilities by any Acquired Company with any other Person (other than another
Acquired Company);

 

(xv)                          any Contract for the purchase by any Acquired
Company of any debt or equity security or other ownership interest of any
Person, or for the issuance or sale of any debt or equity security or other
ownership interest, or the conversion of any obligation, instrument or security
into debt or equity securities or other ownership interests of, any Acquired
Company;

 

(xvi)                       any Contract for the assignment or license of Owned
Intellectual Property, or providing for indemnification with respect to
Intellectual Property, in each case, other than pursuant to licenses entered
into by an Acquired Company in the ordinary course of business;

 

(xvii)                    any Contract with any Governmental Authority;

 

(xviii)                 Contract that requires the payment of royalties,
commissions, finders’ fees or similar payments;

 

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(xix)                       any power of attorney or other Contract pursuant to
which any Person is granted the authority to act on behalf of an Acquired
Company or an Acquired Company is granted the authority to act for or on behalf
of any Person, excluding powers of attorney granted in the ordinary course of
business pursuant to Advisory Contracts;

 

(xx)                          other than any Advisory Contract, any Contract
pursuant to which a third party agrees to perform services for the Company that
are required to be performed by the Company under any other Contract (other than
services that the Company reasonably believes it can obtain from another third
party on commercially reasonable terms);

 

(xxi)                       any Contract or group of related Contracts with the
same party (including any of such party’s Affiliates) involving more than
$100,000 in any year and not terminable by such Acquired Company without penalty
upon notice of sixty (60) days or less, other than any Contract or group of
Contracts with a customer, Manager, Sponsor or supplier entered into in the
ordinary course of business;

 

(xxii)                    any material Contract not otherwise required to be
listed on Section 4.14(a) of the Disclosure Schedules that (A) was not made in
the ordinary course of business and (B) is to be performed in whole or in part
after the Effective Date (excluding ongoing confidentiality obligations); or

 

(xxiii)                 other Contract that would be required to be filed with
the Securities and Exchange Commission as an exhibit to a registration statement
on Form S-1 if such Acquired Company were registering securities under the
Securities Act of 1933.

 

(b)                                 Each of the contracts set forth in Section
4.14(a) of the Disclosure Schedules (the “Material Contracts”) is in full force
and effect and is the legal, valid and binding obligation of the applicable
Acquired Company, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting creditors’ rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding at Law or in equity).  The Company has furnished to Buyer true and
complete copies of all written Material Contracts and a written description of
any oral Material Contract.  The applicable Acquired Company, and to the
Company’s Knowledge, each other party to a Material Contract have in all
material respects performed all the obligations required to be performed by them
as of the Effective Date (or each non-performing party has received a valid
waiver with respect to its non-performance).  As of the Effective Date, there
exists no material default under any Material Contract by any Acquired Company
or, to the Company’s Knowledge, any other party thereto, nor any event which,
with or without notice or lapse of time or both, would constitute a material
default thereunder by an Acquired Company or, to the Company’s Knowledge, any
other party thereto.  As of the Effective Date, no Acquired Company has received
any written notice of any default or breach under any Material Contract.

 

Section 4.15                                                     Significant
Customers, Suppliers and Managers.  Section 4.15 attached hereto sets forth (a)
a list of the Acquired Companies’ top ten (10) clients (on a consolidated basis)
with respect to both (i) assets under management and (ii) revenue (each a
“Significant Customer”), (b) a list of the Acquired Companies’ top ten (10)
suppliers who are not

 

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Managers (on a consolidated basis) by aggregate cost of purchases from such
suppliers (each a “Significant Supplier”) and (c) a list of the top ten (10)
Managers by assets under management (each, a “Significant Manager”), in each
case for the fiscal year ended December 31, 2013.  As of the Effective Date, the
Acquired Companies have not received any written notice, and to the Company’s
Knowledge, have not otherwise received information, from any Significant
Customer to the effect that such Significant Customer will stop, materially
decrease the rate of, or materially and adversely change the terms (whether
related to payment, price or otherwise) with respect to, buying products or
services from the Acquired Companies (whether as a result of the consummation of
the Transactions or otherwise).  The Acquired Companies have not received any
written notice, and to the Company’s Knowledge have not otherwise received
information, from any Significant Supplier or Significant Manager to the effect
that such Significant Supplier or Significant Manager will stop, materially
decrease the rate of, or materially and adversely change the terms (whether
related to payment, price or otherwise) with respect to, supplying materials,
products or services to the Acquired Companies (whether as a result of the
consummation of the Transactions or otherwise).

 

Section 4.16                                                     Brokers. 
Except as set forth in Section 4.16 of the Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder’s or other fee
or commission in connection with this Agreement, any Ancillary Agreement, or the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Acquired Companies, and neither Buyer nor any Affiliate of Buyer (including
the Company after the Closing) has or shall have any liability or otherwise
suffer or incur any Loss as a result of or in connection with any brokerage or
finder’s fee or other commission of any Person retained by the Company in
connection with any of the transactions contemplated by this Agreement or any
Ancillary Agreement.

 

Section 4.17                                                     Transactions
With Affiliates.  Except as set forth in Section 4.17 of the Disclosure
Schedule, to the Company’s Knowledge and other than interests in public
companies of less than one percent (1%) and securities held in clients’
accounts, no Related Party of the Acquired Companies: (i) owns, directly or
indirectly, any equity or other financial or voting interest in any material
supplier, licensor, lessor, distributor, independent contractor or customer of
the Acquired Companies; (ii) owns, directly or indirectly, or has any interest
in any property (real or personal, tangible or intangible) that an Acquired
Company uses in its business; or (iii) has any financial interest in any
transaction with an Acquired Company or involving any assets or property of an
Acquired Company, other than transactions in connection with a Related Party’s
employment with the Acquired Companies.

 

Section 4.18                                                     Employees.

 

(a)                                 Section 4.18(a) of the Disclosure Schedules
contains a complete and accurate list of all employees as of the Effective Date,
setting forth for each employee his or her position or title, whether classified
as exempt or non-exempt for wage and hour purposes, whether paid on a salary,
hourly or commission basis and the actual annual base salary or rates of
compensation, bonus potential, date of hire, business location, status (i.e.,
active or inactive).  Section 4.18(a) of the Disclosure Schedules also contains
a complete and accurate list of all of the independent contractors, consultants,
temporary employees, leased employees or other agents employed or used by the
Company and classified by the Company as

 

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other than employees or compensated other than through wages paid by the Company
through the Company’s payroll department and reported on a form W-4 (“Contingent
Workers”), showing for each Contingent Worker such individual’s role in the
business and fee or compensation arrangements.  Other than as set forth in
Section 4.18(a) of the Disclosure Schedule, the Acquired Companies do not have
any other current officer, employee or consultant who has access to confidential
information.  No officer or employee of the Acquired Companies has advised any
of the Acquired Companies (orally or in writing) that he intends to terminate
employment with the Company.

 

(b)                                 The Acquired Companies have complied in all
material respects with all applicable Laws relating to the employment of labor,
including provisions relating to wages, hours, equal opportunity, collective
bargaining and the payment of Social Security and other Taxes.

 

(c)                                  No Acquired Company is a party to any labor
or collective bargaining Contract that pertains to employees of the Acquired
Companies.  There is no, and since January 1, 2012 there has not been, any labor
strike, picketing of any nature, labor dispute, slowdown or any other concerted
interference with normal operations, stoppage or lockout pending or, to the
Knowledge of the Company, threatened against or affecting the business of the
Acquired Companies.

 

(d)                                 No unfair labor practice or labor charge or
complaint is pending or, to the Knowledge of the Company, threatened with
respect to any Acquired Company before the National Labor Relations Board, the
Equal Employment Opportunity Commission or any other Governmental Authority.

 

(e)                                  No Acquired Company is a party to, or
otherwise bound by, any consent decree with, or citation by, any Governmental
Authority relating to employees or employment practices.  Since January 1, 2012,
no Acquired Company has received any written notice of intent by any
Governmental Authority responsible for the enforcement of labor or employment
Laws to conduct an investigation relating to such Acquired Company and, to the
Knowledge of the Company, no such investigation is in progress.

 

Section 4.19                                                     Environmental
Laws.  The Company has not caused or allowed, or contracted with any party for,
the generation, use, transportation, treatment, storage or disposal of any
Hazardous Substances (as defined below) in connection with the operation of its
business or otherwise.  The Acquired Companies, the operation of its business
and, to the Company’s Knowledge, any real property that the Acquired Companies
owns or leases (the “Premises”) are in compliance, in all material respects,
with all applicable Environmental Laws and orders or directives of any
governmental authorities having jurisdiction under such Environmental Laws,
including any Environmental Laws or orders or directives with respect to any
cleanup or remediation of any release or threat of release of Hazardous
Substances.  The Acquired Companies have not received any written citation,
directive, letter or other communication, or any written notice of any
proceeding, claim or lawsuit, from any person arising out of the ownership or
occupation of the Premises, or the conduct of its operations, and the Acquired
Companies are not aware of any basis therefor.  The Acquired Companies have
obtained and are maintaining in full force and effect all necessary permits,
licenses and approvals required by all

 

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Environmental Laws applicable to the Premises and the business operations
conducted thereon, and is in compliance, in all material respects, with all such
permits, licenses and approvals.  The Acquired Companies have not caused or
allowed a release, or a threat of release, of any Hazardous Substance into the
Premises, and, to the Company’s Knowledge, the Premises have not ever been
subject to a release, or a threat of release, of any Hazardous Substance.

 

Section 4.20                                                     Employee
Benefit Programs.

 

(a)                                 Section 4.20(a) of the Disclosure Schedules
sets forth a true, complete and correct list of every Employee Plan that is
maintained by the Acquired Companies or with respect to which the Company or any
of its Subsidiaries have or may have any liability (the “Company Employee
Plans”).

 

(b)                                 Each Company Employee Plan is maintained in
the United States and is subject only to the Laws of the United States or a
political subdivision thereof.

 

(c)                                  None of the Company Employee Plans covers
any employee or former employee or other service provider of the Company who is
subject to the Laws in any country or jurisdiction other than the United States
or a political subdivision thereof such that the Company Employee Plan or an
Acquired Company or ERISA Affiliate is required to comply with the Laws of any
country other than Laws of the United States or a political subdivision thereof.

 

(d)                                 Each Company Employee Plan (including any
Company Employee Plan scheduled as an exception to Section 4.20(b) or Section
4.20(c)) complies in form with all requirements of applicable Law and has been
maintained in compliance, in each case, in all material respects, with its terms
and with the requirements prescribed by applicable Law(including, in the case of
any Company Employee Plan which is an employee pension benefit plan, the
requirements of Sections 401(a) and 501(a) of the Code) and, no written notice
has been issued to the Company by any governmental authority questioning or
challenging such compliance.

 

(e)                                  Copies of the following documents, with
respect to each Company Employee Plan, where applicable, have been furnished to
Buyer: (i) all documents embodying or governing such Company Employee Plan and
any funding medium for the Company Employee Plan and any material contracts
relating to the Company Employee Plans; (ii) the most recent IRS determination
or opinion letter; (iii) the most recently filed IRS Form 5500; (iv) the most
recent actuarial valuation report; (v) the most recent summary plan description
(or other descriptions provided to employees) and all modifications thereto; and
(vi) all material non-routine correspondence to and from any state or federal
agency.

 

(f)                                   Each Company Employee Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination or approval letter from the IRS with respect to such
qualification, or may rely on an opinion letter issued by the IRS with respect
to a prototype plan adopted in accordance with the requirements for such
reliance, or has time remaining for application to the IRS for a determination
of the qualified status of such Company Employee Plan for any period for which
such Company Employee Plan would not otherwise be covered by an IRS
determination, and to the Company’s Knowledge, no event has occurred

 

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which will or would reasonably be expected to give rise to disqualification of
any such plan under such sections or to a tax under section 511 of the Code.  No
material litigation or governmental administrative proceeding, audit or other
proceeding (other than those relating to routine claims for benefits) is pending
or, to the Knowledge of the Company, threatened with respect to any Company
Employee Plan, and, to the Knowledge of the Company, no facts exist which would
reasonably be expected to give rise to any such actions, suits or claims (other
than routine claims for benefits).

 

(g)                                  No Company Employee Plan is a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) with
respect to which the Company could incur liability under Section 4063 or 4064 of
ERISA or a plan maintained by more than one employer as described in Section
413(c) of the Code.  Neither the Company nor any ERISA Affiliate maintains,
contributes to, or has or would reasonably be expected to have any liability
with respect to, any Company Employee Plan that is subject to Title IV of ERISA,
Section 412 of the Code, Section 302 of ERISA or that is a Multiemployer Plan
and neither the Company nor any ERISA Affiliate has incurred any liability under
Title IV of ERISA that has not been paid in full.  None of the Company Employee
Plan provides health care or any other non-pension benefits to any employees of
the Company or any of its Subsidiaries after their employment is terminated
(other than as required by Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Code or similar state law).  None of the Company Employee Plans is
a multiple employer pension plan or a multiple employer welfare arrangement
(within the meaning of section 3(40) of ERISA).

 

(h)                                 Each Company Employee Plan that constitutes
a nonqualified deferred compensation plan within the meaning of Section 409A of
the Code has been operated and maintained, in all material respects, in
operational and documentary compliance with Section 409A of the Code and
applicable guidance thereunder.  No payment to be made under any Company
Employee Plan is, or to the Knowledge of the Company, will be, subject to the
penalties of Section 409A(a)(1) of the Code.

 

(i)                                     Except as set forth in Section 4.20(i)
of the Disclosure Schedule, none of the execution and delivery of this Agreement
or the consummation of the Transactions contemplated hereby would (either alone
or in conjunction with any other event): (i) result in, or cause the accelerated
vesting payment, funding or delivery of, or increase the amount or value of, any
payment or benefit to any employee, officer, director or other service provider
of the Acquired Companies; or (ii) result in any “parachute payment” as defined
in Section 280G(b)(2) of the Code (whether or not such payment is considered to
be reasonable compensation for services rendered) that would not be deductible
by the Company (without giving effect to any agreements or arrangements entered
into between Buyer or any of its Affiliate and any “disqualified individual”
(within the meaning of Section 280G of the Code) of any Acquired Company after
the Effective Date and not disclosed to the Company prior to the Effective
Date).

 

(j)                                    There has not been any non-exempt
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, with respect to any Company Employee Plan that would
reasonably be expected to result in a material liability to any Acquired
Company, and none of the Acquired Companies has engaged in any non-exempt
prohibited

 

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transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code or would otherwise reasonably be expected to incur any liability for any
such non-exempt prohibited transaction.

 

(k)                                 No tax under Section 4980B or 4980D of the
Code has been incurred in respect of any Employee Plan that is a group health
plan, as defined in Section 5000(b)(1) of the Code.

 

(l)                                     None of the assets of any Company
Employee Plan are invested in employer securities or employer real property.

 

(m)                             To the extent applicable, adequate accruals for
all obligations under the Company Employee Plans are reflected in the financial
statements of the Acquired Companies (as applicable) and, to the extent
applicable, such obligations include a pro rata amount of the contributions and
PBGC premiums which would otherwise have been made in accordance with past
practices and applicable law for the plan years that include the Closing Date.

 

(n)                                 There have been no acts or omissions by any
of the Acquired Companies that would impair the ability of the Acquired
Companies (or any successor thereto) to unilaterally amend or terminate any
Company Employee Plan consistent with the terms of such Company Employee Plan.

 

Section 4.21                                                     Foreign Corrupt
Practices Act.  None of the Acquired Companies nor, to the Knowledge of the
Company, any director, officer, agent, employee, Affiliate or other Person
associated with or acting on behalf of any Acquired Company has taken any action
that would cause any Acquired Company to be in violation in any material respect
of the Foreign Corrupt Practices Act of 1977, as amended, or any rules and
regulations thereunder (the “FCPA”).  To the Company’s Knowledge, there is not
now, and since January 1, 2012 there has not been, any employment by any
Acquired Company of, or beneficial ownership in any Acquired Company by, any
governmental or political official in any country in the world.  The Acquired
Companies have conducted their businesses in compliance, in all material
respects, with the FCPA.

 

Section 4.22                                                     Capital
Improvements.  Section 4.22 of the Disclosure Schedule describes all the capital
improvements or purchases or other capital expenditures which the Acquired
Companies have committed to or contracted for and which have not been completed
prior to the Effective Date and the cost and expense reasonably estimated to
complete such work and purchases.

 

Section 4.23                                                     Bank Accounts;
Powers of Attorney.  Section 4.23 of the Disclosure Schedule sets forth a true
and complete list of (a) all bank accounts or safe deposit boxes under the
control or for the benefit of the Acquired Companies and (b) the names of all
persons authorized to draw on or have access to such accounts and safe deposit
boxes (by power of attorney, a comparable delegation of authority or otherwise).

 

Section 4.24                                                     Registration. 
Placemark Investments, Inc. (“PII”) is duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (together with the rules
and regulations promulgated thereunder, the “Advisers Act”).  PII is duly

 

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registered, licensed or qualified as an investment adviser in each state or any
other jurisdiction where the conduct of PII requires such registration,
licensing or qualification, and PII is in good standing under the rules and
regulations thereof.  PII is not (taking into account any applicable exemption)
ineligible pursuant to applicable laws to act as an investment adviser under the
Advisers Act, and no employee of the Company or other Person “associated” (as
defined under the Advisers Act) with PII (x) who has performed any functions of
an investment adviser representative or (y) is associated with an investment
adviser is (taking into account any applicable exemption) ineligible under
applicable laws to serve as an investment adviser representative or a person
associated with an investment adviser. There is no proceeding or investigation
pending and served on PII or, to the Knowledge of the Company, pending and not
so served or threatened by any Governmental Authority, that would be reasonably
expected to result in (i) the ineligibility under such Laws of PII to act as an
investment adviser or (ii) the ineligibility under such applicable Laws of such
investment adviser representative or a person associated with PII to serve as an
investment adviser representative or a person associated with an investment
adviser.

 

Section 4.25                                                     Reports.  The
Acquired Companies have filed all material reports, registrations and
statements, together with any material amendments required to be made with
respect thereto, that each was required to file since January 1, 2011 with any
Governmental Authority, and have paid all fees and assessments due and payable
in connection therewith.  The Acquired Companies have filed all such reports,
registrations and statements in compliance, in all material respects, with
applicable regulatory requirements, and none of the Acquired Companies willfully
made any untrue statement of a material fact in any registration application or
report filed with the U.S. Security and Exchange Commission, including each Form
ADV filed by or on behalf of PII, or willfully omitted to state in any such
application or report any material fact which is required to be stated therein. 
The Company has furnished to Buyer true, correct and complete copies of PII’s
most recent Form ADV, as amended through the Effective Date, and all of its
other foreign and domestic registration forms, likewise as amended as of the
Effective Date.  The information contained in such forms was true and complete
in all material respects at the time of filing and PII has made all amendments
to such forms as it is required to make under the Advisers Act.

 

Section 4.26                                                     Specified
Litigation; Portfolio Management System Patent.

 

(a)                                 None of the Acquired Companies has (i)
entered into any Contract, or has otherwise agreed to enter into any Contract,
that assigns, transfers, conveys, sells or delegates, or purports to do any of
the foregoing, to any Person any cause of action, chose in action or part
thereof arising out of or in any way related to the Specified Litigation,
including the right to litigate the Specified Litigation on behalf of any of the
Acquired Companies (other than Proskauer Rose LLP and Sayles | Werbner, P.C.,
each of which has served as legal counsel to the Company) or (ii) taken any
action that would preclude Buyer from terminating the Specified Litigation
following the consummation of the transactions contemplated hereby.  The Company
has delivered a true, correct and complete copy of its engagement letter with
Proskauer Rose LLP and Sayles | Werbner, P.C. in respect of the Specified
Litigation, and none of the Acquired Companies has any other Contract with
either of Proskauer Rose LLP and Sayles | Werbner, P.C. other than such
engagement letters.

 

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(b)                                 Other than any claim or other interest
asserted by Buyer or any of its Affiliates (including cross-claims in the
Specified Litigation), (i) the Portfolio Management System Patent is exclusively
owned by an Acquired Company free and clear of all Encumbrances (other than
Permitted Encumbrances) and is in good standing, (ii) there is no Action pending
or, to the Company’s Knowledge, threatened (A) against any of the Acquired
Companies that would interfere with the Acquired Companies right to use the
Portfolio Management System Patent or (B) to the effect that any Acquired
Company’s rights to the Portfolio Management System Patent is invalid or
unenforceable by such Acquired Company, (iii) the Portfolio Management System
Patent is in full force and effect and currently in good standing and has not
been canceled, expired or abandoned and (iv) no Acquired Company has any
obligation to compensate any Person for the use of the Portfolio Management
System Patent, and no Acquired Company has granted any Person any license,
sublicense, consent or other rights to the Portfolio Management System Patent or
to use in any manner the Portfolio Management System Patent, whether requiring
the payment of royalties or not.  All material registration, maintenance,
renewal and annuity fees and Taxes have been paid relating to the Portfolio
Management System Patent, and all material documents have been filed in
connection with the Company’s application therefor.  Each current and former
employee of the Acquired Companies who has contributed to or participated in the
creation or development of the Portfolio Management System Patent has executed a
Proprietary Information and Inventions Agreement on substantially the applicable
Acquired Company’s standard form.

 

Section 4.27                                                     No Additional
Representations.

 

(a)                                 Except for the representations and
warranties contained in this Article IV, the Company expressly disclaims any
representations or warranties of any kind or nature, express or implied,
including any representations or warranties as to the Acquired Companies, their
respective businesses and affairs or the transactions contemplated by this
Agreement.

 

(b)                                 Except for the representations and
warranties contained in this Article IV and Article VI, neither the Company nor
any representative of the Company, nor any of its employees, officers, directors
or stockholders, has made, and shall not be deemed to have made, any
representations or warranties in the materials relating to the business and
affairs of the Acquired Companies that have been made available to Buyer or
Merger Sub, including due diligence materials, or in any presentation of the
business and affairs of the Acquired Companies by the management of the Company
or others in connection with the transactions contemplated hereby, and no
statement contained in any of such materials or made in any such presentation
shall be deemed a representation or warranty hereunder or otherwise or deemed to
be relied upon by Buyer or Merger Sub in executing, delivering and performing
this Agreement and the transactions contemplated hereby.  It is understood that
any cost estimates, projections or other predictions are not and shall not be
deemed to be or to include representations or warranties of the Company, and are
not and shall not be deemed to be relied upon by Buyer or Merger Sub in
executing, delivering and performing this Agreement and the transactions
contemplated hereby, except as otherwise expressly set forth in this Article IV
and Article VI.

 

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB

 

Buyer and Merger Sub hereby represent and warrant to the Company as of the
Effective Date as follows:

 

Section 5.1                                                           
Organization.  Each of Buyer and Merger Sub is (i) duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, and has full power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted and (ii)
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for any such failures to be so qualified or
licensed and in good standing that would not, individually or in the aggregate,
have a Material Adverse Effect.

 

Section 5.2                                                            Authority
and Enforceability.  Each of Buyer and Merger Sub has full corporate power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it will be a party, to perform its obligations hereunder and
thereunder and to consummate the Transactions.  The execution and delivery by
Buyer and Merger Sub of this Agreement and each of the Ancillary Agreements to
which it will be a party and the consummation by Buyer and Merger Sub of the
Transactions have been duly and validly authorized by the Boards of Directors of
Buyer and Merger Sub and by Buyer as the sole stockholder of Merger Sub.  No
other corporate proceedings on the part of Buyer or Merger Sub are necessary to
authorize this Agreement or any Ancillary Agreement or to consummate the
Transactions.  This Agreement has been, and upon their execution each of the
Ancillary Agreements to which Buyer or Merger Sub will be a party will have
been, duly and validly executed and delivered by Buyer and Merger Sub, as
applicable.  This Agreement constitutes, and upon their execution each of the
Ancillary Agreements to which Buyer or Merger Sub will be a party will
constitute, the legal, valid and binding obligations of Buyer and Merger Sub, as
applicable, enforceable against Buyer and Merger Sub, as applicable, in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors’ rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).

 

Section 5.3                                                            No
Conflict; Required Filings and Consents.

 

(a)                                 The execution, delivery and performance by
each of Buyer and Merger Sub of this Agreement and each of the Ancillary
Agreements to which it will be a party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not:

 

(i)                                     conflict with or violate the certificate
of incorporation or bylaws (or other similar organizational documents) of Buyer
or Merger Sub;

 

(ii)                                  assuming that all Governmental Approvals
have been obtained or made, conflict with or violate any Law applicable to Buyer
or Merger Sub or by which any property or asset of Buyer or Merger Sub is bound
or affected;

 

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(iii)                               result in any breach or violation of, result
in a termination or acceleration of, conflict with or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under or require any consent of any Person pursuant to, any material note, bond,
mortgage, indenture, agreement, lease, license, permit, franchise, instrument,
obligation or other Contract to which Buyer or Merger Sub is a party or by which
Buyer or Merger Sub or any of their respective properties, assets or rights are
bound or affected; or

 

(iv)                              result in the creation of any Encumbrance
(other than a Permitted Encumbrance) on any of the assets of Buyer or Merger
Sub;

 

except in the case of clauses (ii), (iii) and (iv), as to matters that would
not, individually or in the aggregate , reasonably be expected to have a
material adverse effect on the ability of Buyer or Merger Sub to perform its
obligations under this Agreement or the Ancillary Agreements to which it will be
party.

 

(b)                                 Neither Buyer nor Merger Sub is required to
file, seek or obtain any Governmental Approval in connection with the execution,
delivery and performance by Buyer and Merger Sub of this Agreement and each of
the Ancillary Agreements to which it will be party or the consummation of the
transactions contemplated hereby or thereby, except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, and
(ii) such filings as may be required by any applicable federal or state
securities or “blue sky” laws.

 

Section 5.4                                                            Brokers. 
No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of Buyer or Merger Sub.

 

Section 5.5                                                           
Litigation.  There is no Action pending against or, to the Knowledge of Buyer,
threatened against or affecting Buyer or Merger Sub before any court of
arbitrator or any governmental body, agency or official which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.

 

Section 5.6                                                           
Financing.  As of the Effective Date and as of the Closing, Buyer has and will
have sufficient cash and undrawn availability under committed lines of credit to
pay, or cause Merger Sub to pay, the Transaction Consideration pursuant to the
terms of this Agreement.

 

Section 5.7                                                           
Registration.  Each of Envestnet Asset Management, Inc., Envestnet Portfolio
Solutions, Inc., Envestnet Retirement Solutions, LLC and Portfolio Management
Consultants, Inc. (collectively, the “Buyer Registered Advisers”) is duly
registered as an investment adviser under the Advisers Act.  Each Buyer
Registered Adviser is duly registered, licensed or qualified as an investment
adviser in each state or any other jurisdiction where the conduct of such Buyer
Registered Adviser requires such registration, licensing or qualification, and
such Buyer Registered Adviser is in good standing under the rules and
regulations thereof.  No Buyer Registered Adviser is (taking into account any
applicable exemption) ineligible pursuant to applicable laws to act as an
investment adviser under the Advisers Act, and no employee of a Buyer Registered
Adviser or other Person “associated” (as

 

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defined under the Advisers Act) with a Buyer Registered Adviser (x) who has
performed any functions of an investment adviser representative or (y) is
associated with an investment adviser is (taking into account any applicable
exemption) ineligible under applicable laws to serve as an investment adviser
representative or a person associated with an investment adviser.  There is no
proceeding or investigation pending and served on any Buyer Registered Adviser
or, to the Knowledge of Buyer, pending and not so served or threatened by any
Governmental Authority, that would be reasonably expected to result in (i) the
ineligibility under such Laws of any Buyer Registered Adviser to act as an
investment adviser or (ii) the ineligibility under such applicable Laws of such
investment adviser representative or a person associated with any Buyer
Registered Adviser to serve as an investment adviser representative or a person
associated with an investment adviser.

 

Section 5.8                                                            Formation
and Ownership of Merger Sub; No Prior Activities.

 

(a)                                 Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated by this Agreement.  All of the
issued and outstanding capital stock of Merger Sub is validly issued, fully paid
and non-assessable and is owned, beneficially and of record, by Buyer free and
clear of all security interests, liens, claims, pledges, options, rights of
first refusal, stockholder agreements, limitations on Buyer’s voting rights,
charges and other encumbrances of any nature whatsoever.

 

(b)                                 As of the Effective Date and as of the
Effective Time, except for (i) obligations or liabilities incurred in connection
with its incorporation or organization and (ii) this Agreement and any other
agreements or arrangements contemplated by this Agreement or in furtherance of
the transactions contemplated hereby, Merger Sub has not incurred, directly or
indirectly, through any of its Subsidiaries or Affiliates, any obligations or
liabilities or engaged in any business activities of any type or kind whatsoever
or entered into any agreements or arrangements with any Person.

 

Section 5.9                                                           
Inspection; No Other Representations.

 

(a)                                 Each of Buyer and Merger Sub is an informed
and sophisticated Person, and has engaged expert advisors experienced in the
evaluation and acquisition of companies such as the Company as contemplated
hereunder.  Each of Buyer and Merger Sub has undertaken such investigation and
has been provided with and has evaluated such documents and information as it
has deemed necessary to enable it to make an informed and intelligent decision
with respect to the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.  Buyer and Merger Sub acknowledge and
agree that they are relying exclusively on the representations set forth in
Article IV and Article VI and their own examination and investigation of the
Company and that they are not relying on any other statements or documents.

 

(b)                                 Without limiting the generality of the
foregoing, Buyer acknowledges that, (i) except as expressly set forth in this
Agreement, neither the Acquired Companies nor any Securityholder makes any
representation or warranty with respect to (A) any projections, estimates or
budgets delivered to or made available to Buyer of future revenues, future
results of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Surviving Company and its
Subsidiaries or the future business and

 

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operations of the Surviving Company or any of its Subsidiaries or (B) any other
information or documents made available to Buyer or its counsel, accountants or
advisors with respect to the Company, its Subsidiaries or any of their
respective businesses, assets, liabilities or operations, except as expressly
set forth in this Agreement, and (ii) Buyer has not relied and will not rely
upon any of the information described in subclauses (A) and (B) of clause (i)
above in executing, delivering and performing this Agreement and the
transactions contemplated hereby or any other information, representation or
warranty except those representations or warranties set forth in Article IV and
Article VI hereof.

 

Section 5.10                                                     No Other
Representations.  Notwithstanding anything in this Agreement to the contrary,
neither Buyer nor Merger Sub, nor any of their respective employees, officers,
directors or stockholders, has made, and none of them is making, any
representation or warranty whatsoever, express or implied, with respect to Buyer
or its Affiliates or the transactions contemplated by this Agreement or any
other matter, other than those representations and warranties of Buyer and
Merger Sub expressly set forth in this Article V.

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLING SECURITYHOLDERS

 

Each Selling Securityholder, severally and not jointly, represents and warrants
to Buyer and Merger Sub as of the Effective Date as follows:

 

Section 6.1                                                           
Organization.  If such Selling Securityholder is not an individual, such Selling
Securityholder is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization and has the requisite power and
authority to execute and deliver this Agreement or any Ancillary Agreement to
which such Selling Securityholder is a party, to consummate the Transactions and
to perform its obligations under this Agreement and such Ancillary Agreements.

 

Section 6.2                                                           
Authorization.  Such Selling Securityholder has the legal capacity (in the case
of any Selling Securityholder that is an individual) or is duly authorized (in
the case of any Selling Securityholder that is an entity) to execute and deliver
this Agreement and each of the Ancillary Agreements to which such Selling
Securityholder will be a party, to perform its obligations hereunder and
thereunder and to consummate the Transactions.  The execution and delivery by
such Selling Securityholder of this Agreement and each of the Ancillary
Agreements to which such Selling Securityholder will be a party and the
consummation of the Initial Stock Sale have been duly and validly authorized. 
No other corporate proceedings on the part of such Selling Securityholder is
necessary to authorize this Agreement or any Ancillary Agreement or to
consummate the Initial Stock Sale.  This Agreement has been, and upon their
execution each of the Ancillary Agreements to which such Selling Securityholder
is a party will have been, duly and validly executed and delivered by such
Selling Securityholder.  This Agreement constitutes, and upon their execution
each of the Ancillary Agreements to which such Selling Securityholder is a party
will constitute, the legal, valid and binding obligations such Selling
Securityholder enforceable against such Selling Securityholder, in accordance
with their respective terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).

 

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Section 6.3                                                           
Holdings.  Such Selling Securityholder (a) is the sole record owner of the
Acquired Stock set forth next to its name on Schedule I free and clear of any
Encumbrances (other than limitations on transfers under applicable securities
Laws) and has good and valid title to such Acquired Stock and (b) does not own
any other shares of Capital Stock of the Company nor does it have any
preemptive, conversion, subscription or other rights warrants, options,
arrangements or agreements to issue or purchase, any Capital Stock or other
equity securities of the Company.  Except for this Agreement, there are no
outstanding preemptive, conversion, subscription or other rights, warrants,
options or agreements to purchase or with respect to such Selling
Securityholders’ Acquired Stock Company Shares.

 

Section 6.4                                                            No
Conflict; Required Filings and Consents.  The execution, delivery and
performance by such Selling Securityholder of this Agreement and each of the
Ancillary Agreements to which it will be a party, and the consummation of the
Transactions, do not and will not:

 

(i)                                     conflict with or violate the certificate
of incorporation or bylaws (or other similar organizational documents) of such
Selling Securityholder, if applicable;

 

(ii)                                  assuming that all Governmental Approvals
set forth in Section 4.4(b) of the Disclosure Schedule have been obtained or
made, conflict with or violate any Law applicable to such Selling Securityholder
or by which any of the Acquired Stock is bound or affected;

 

(iii)                               result in any breach or violation of, result
in a termination or acceleration of, conflict with or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under or require any consent of any Person pursuant to, any material note, bond,
mortgage, indenture, agreement, lease, license, permit, franchise, instrument,
obligation or other Contract to which such Selling Securityholder is a party
with respect to the sale of the Acquired Stock; or

 

(iv)                              result in the creation of any Encumbrance
(other than a Permitted Encumbrance) on the Acquired Stock;

 

except in the case of clauses (ii), (iii) and (iv), as to matters that would not
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Selling Securityholder to perform its
obligations under this Agreement or the Ancillary Agreements to which it will be
party.

 

Section 6.5                                                            Brokers. 
Except as set forth on Section 6.5 of the Disclosure Schedule, no broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with this Agreement, any Ancillary Agreement, or the
transactions contemplated hereby based upon arrangements made by or on behalf of
such Selling Securityholder, and neither Buyer nor any Affiliate of Buyer
(including the Company after the Closing) has or shall have any liability or
otherwise suffer or incur any Loss as a result of or in connection with any
brokerage or finder’s fee or other commission of any Person retained by a
Selling Securityholder in connection with any of the Transactions contemplated
by this Agreement or any Ancillary Agreement.

 

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Section 6.6                                                            Advice. 
Such Selling Securityholder represents and warrants that he, she or it is
familiar with the Acquired Company’s business affairs and financial condition
and possesses sufficient information about the Acquired Company to reach an
informed decision to sell the Acquired Stock.  Such Selling Securityholder
represents that he, she or it has had an opportunity to ask questions and
receive answers from the Acquired Companies regarding the terms and conditions
of this Agreement, the Ancillary Agreements and the transactions contemplated
herein and therein and has been advised to consult with his, her or its own
attorney regarding all legal matters concerning this Agreement, the Ancillary
Agreements and the transactions contemplated herein and therein, and has done
so, to the extent he, she or it considers necessary.

 

ARTICLE VII
COVENANTS

 

Section 7.1                                                            Conduct
of Business Prior to the Closing.  Between the Effective Date and the earlier of
the date of termination of this Agreement and the Closing Date, unless Buyer
shall otherwise consent to in writing (such consent not to be unreasonably
withheld, delayed or conditioned), the business of the Acquired Companies shall
be conducted only in the ordinary course of business consistent with past
practice.  By way of amplification and not limitation, between the Effective
Date and the earlier of the date of termination of this Agreement and the
Closing Date, none of the Acquired Companies shall, except as set forth in
Section 7.1 of the Disclosure Schedules, do, or propose to do, directly or
indirectly, any of the following without the prior written consent of Buyer
(such consent not to be unreasonably withheld, delayed or conditioned):

 

(a)                                 amend or otherwise change its certificate of
incorporation or bylaws or other applicable organizational documents;

 

(b)                                 authorize for issuance, issue, sell, pledge,
grant, dispose of or otherwise subject to any Encumbrance (other than any
Permitted Encumbrance) (i) any shares of capital stock of the Company, or any
options, warrants, convertible securities or other rights of any kind to acquire
any such shares, or any other ownership interest in the Company, except for the
issuance of shares upon the exercise of options or warrants outstanding as of
the Effective Date or (ii) any properties or assets of the Acquired Companies
having a value in excess of $100,000, other than in connection with the
incurrence of Indebtedness otherwise permitted hereunder or in connection with
sales or transfers of inventory or accounts receivable in the ordinary course of
business consistent with past practice;

 

(c)                                  reclassify, combine, split, subdivide or
redeem, or purchase or otherwise acquire, directly or indirectly, any of its
capital stock;

 

(d)                                 declare, set aside or pay any dividend or
other distribution (whether in cash, shares or property or any combination
thereof) in respect of its capital stock;

 

(e)                                  acquire any corporation, partnership,
limited liability company or other business organization or assets having a
value in excess of $100,000;

 

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(f)                                   except for the Merger, adopt or approve a
plan of, or effect any, complete or partial liquidation, or adopt resolutions
providing for or authorizing such liquidation, or adopt a plan of or effect any
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company;

 

(g)                                  incur any Indebtedness (other than in the
ordinary course of business and consistent with past practice) or otherwise
cause any of its assets or properties to become subject to a material
Encumbrance that is not a Permitted Encumbrance;

 

(h)                                 make any loans or advances to any Person
(other than advancement of expenses and commissions to employees in the ordinary
course of business);

 

(i)                                     cancel any debts, or waive or compromise
any claims or waive any material rights, in each case other than write offs of
receivables not to exceed $50,000 individually or $250,000 in the aggregate;

 

(j)                                    authorize, or make any commitment with
respect to, any single capital expenditure that is in excess of $100,000 or
capital expenditures that are, in the aggregate, in excess of $250,000 for the
Acquired Companies, or enter into any lease of real or personal property or any
renewals thereof involving a term of more than one year or rental obligation
exceeding $250,000 per year in any single case;

 

(k)                                 increase the compensation payable or to
become payable or the benefits provided to its directors, officers or employees,
except for (i) ordinary course bonuses to non-officer employees, not to exceed
$50,000 in the aggregate and (ii) retention, performance or similar bonuses not
to exceed $500,000 in the aggregate, or establish, adopt, enter into or amend
any Company Employee Plan, other than as may be required by any Governmental
Authority or to comply with any applicable Laws;

 

(l)                                     hire any employee with a base salary in
excess of $100,000, materially increase the number of persons employed by the
Acquired Companies or terminate the employment of any of the employees of the
Acquired Companies (other than for cause or in the ordinary course of business);

 

(m)                             make, change or revoke any Tax election or
settle or compromise any federal, provincial, state, local or foreign Tax
liability, surrender any right to claim a Tax refund, enter into a Tax sharing
agreement, obtain any Tax ruling or file any amended Tax Return or waive or
extend the statute of limitations in respect of such Taxes;

 

(n)                                 commence or settle any material Action other
than Actions relating to the collection of uncollected accounts receivable;

 

(o)                                 pay any material amount or agree to pay any
material amount or perform any material obligation in settlement or compromise
of any Actions or claims of liability against the Company or any of its
directors, officers, employees or agents;

 

(p)                                 change the Company’s methods of accounting,
except as required by GAAP, applicable Law or official interpretations thereof;

 

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(q)                                 enter into, authorize or permit any Contract
or transaction that would be required to be disclosed pursuant to Sections
4.14(a) and 4.17 of the Disclosure Schedules if entered into prior to the
Effective Date;

 

(r)                                    make any material modification or
amendment to any existing Material Contract;

 

(s)                                   assign, transfer, convey, sell or delegate
(or purport to do any of the foregoing) to any Person any cause of action, chose
in action or part thereof arising out of or in any way related to the Specified
Litigation;

 

(t)                                    assign, transfer, convey or sell the
Portfolio Management System Patent; or

 

(u)                                 enter into any agreement, or otherwise make
a commitment to do any of the foregoing.

 

Section 7.2                                                            No
Solicitations.

 

(a)                                 Unless and until this Agreement shall have
been terminated in accordance with its terms, (i) the Company shall not, and
shall cause each other Acquired Company not to, and shall not authorize or
permit any director, officer, employee, advisor, agent or investment banker
(with respect to any Person, the foregoing Persons are referred to herein as
such Person’s “Representatives”) of an Acquired Company to, and (ii) no Selling
Securityholder shall or shall permit any of such Selling Securityholder’s
Representatives to, directly or indirectly, initiate, solicit or take any action
to facilitate or encourage any inquiries or the making or implementation of any
Acquisition Proposal or the making of any proposal that could reasonably be
expected to lead to any Takeover Proposal.

 

(b)                                 (x) The Company will not, and will cause
each other Acquired Company not to and will direct that their respective
Representatives do not, directly or indirectly, and (y) each Selling
Securityholder will not and will direct that their respective Representatives do
not, directly or indirectly (i) discuss, negotiate, undertake, authorize,
recommend, propose or enter into, either as the proposed surviving, merged,
acquiring or acquired corporation, any Acquisition Proposal, (ii) facilitate,
encourage, solicit or initiate discussions, negotiations or submissions of
proposals or offers in respect of an Acquisition Proposal, (iii) furnish or
cause to be furnished, to any Person, any information concerning the business,
operations, properties or assets of the Company in connection with an
Acquisition Proposal, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person to do or seek any of the foregoing, provided, however, that, at any time
prior to obtaining Requisite Stockholder Consent, if the Company or any Selling
Securityholder receives a bona fide written offer with respect to an Acquisition
Proposal that was unsolicited and that did not otherwise result from a breach of
this Section 7.2, the Company or any Selling Securityholder may furnish
non-public information with respect to the Company to the Person who made such
offer with respect to an Acquisition Proposal and may participate in discussions
regarding such Acquisition Proposal if (A) the Company Board determines in good
faith, after receiving advice from its outside counsel, that failure to do so
would violate its fiduciary duties

 

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to the Other Securityholders under applicable Law, (B) the Company Board
determines that such Acquisition Proposal is a Superior Proposal and (C) the
Company has delivered to Buyer a prior written notice advising Buyer that it
intends to take such action.  The Company and each Selling Securityholder shall
notify Buyer promptly (but in no event later than twenty-four (24) hours) after
it or such Selling Securityholder, as applicable, obtains Knowledge of the
receipt by the Company (or any of its Representatives) or any Selling
Securityholder (or any Selling Securityholder’s Representative) of any
Acquisition Proposal, any inquiry that would reasonably be expected to lead to
an Acquisition Proposal, any request for non-public information relating to an
Acquired Company or for access to the business, properties, assets, books or
records of the Acquired Companies by any third party.  In such notice, the
Company and each Selling Securityholder shall identify the third party making,
and details of the material terms and conditions of, any such Acquisition
Proposal, indication or request. The Company and each Selling Securityholder
shall keep Buyer fully informed, on a current basis, of the status and material
terms of any such Acquisition Proposal, indication or request, including any
material amendments or proposed amendments as to price and other material terms
thereof.  The Company shall provide Buyer with at least forty-eight (48) hours
prior notice of any meeting of the Company Board (or such lesser notice as is
provided to the members of the Company Board) at which the Company Board is
reasonably expected to consider any Acquisition Proposal.  The Company and each
Selling Securityholder (to the extent such Selling Securityholder provided
non-public information to any third party) shall promptly provide Buyer with a
list of any non-public information concerning the Company’s business, present or
future performance, financial condition or results of operations, provided to
any third party, and, to the extent such information has not been previously
provided to Buyer, copies of such information.

 

(c)                                  (x) The Company shall, and shall cause each
other Acquired Company to, immediately cease and cause to be terminated, and
shall not authorize or permit any of its or their Representatives to continue
and (y) each Selling Securityholder shall immediately cease and cause to be
terminated, and shall not permit any of its respective Representatives to
continue, any and all existing activities, discussions or negotiations with any
persons or entities (other than Buyer and Merger Sub) conducted heretofore with
respect to any Acquisition Proposal and shall use their reasonable best efforts
to cause any such persons or entities (or their agents or advisors) in
possession of non-public information in respect of any Acquired Company that was
furnished by or on behalf of the Acquired Companies or any Selling
Securityholder to return or destroy (and confirm destruction of) all such
information.  The Company and each Selling Securityholder agrees not to release
any third party from the confidentiality provisions of any agreement to which
the Company or such Selling Securityholder is a party.

 

Section 7.3                                                           
Notification of Certain Matters; Supplements to Disclosure Schedule.

 

(a)                                 The Company and each Selling Securityholder
shall give prompt written notice to Buyer of the occurrence or non-occurrence of
any event or condition that would reasonably be expected to result in the
nonfulfillment of any of the conditions to Buyer’s and Merger Sub’s obligations
hereunder as set forth in Section 9.3(a).  Buyer shall give prompt written
notice to the Company of the occurrence or non-occurrence of any event or
condition that would reasonably be expected to result in the nonfulfillment of
any of the conditions to the Company’s obligations hereunder as set forth in
Section 9.2(a).

 

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(b)                                 The Company may, from time to time prior to
the Closing Date, by written notice to Buyer, promptly supplement the Disclosure
Schedules (such supplements, collectively, the “Schedule Updates”) with respect
to any event that first arises after the Effective Date that (i) would, in the
absence of such Schedule Updates, cause a breach of any of the representations
and warranties set forth in Article IV, and/or cause a failure of the condition
set forth in Section 9.3 on the Closing Date, and (ii) did not arise as a result
of any breach by the Company or any Selling Securityholder of any of the
covenants or agreements set forth in this Agreement.  Except as provided in
Section 7.3(c), upon receipt of any Schedule Update, Buyer may, by written
notice to the Company within ten (10) Business Days following Buyer’s receipt of
such Schedule Update, elect to terminate this Agreement pursuant to Section
11.1(d).  If Buyer does not terminate this Agreement pursuant to Section 11.1(d)
below by reason of the Schedule Update within such ten (10) Business Days
period, the Schedule Update will be deemed to have amended the Disclosure
Schedules, to have qualified the representations and warranties contained in
Article IV and to have cured any misrepresentation or breach of warranty that
otherwise might have existed hereunder by reason of the development for all
purposes hereunder (including the closing conditions set forth in Article IX and
the indemnification obligations set forth in Article X).

 

(c)                                  Notwithstanding anything herein to the
contrary, (i) the Company may deliver a Schedule Update to reflect (A) the
issuance of Capital Stock after the Effective Date upon exercise of any option
or warrant outstanding as of the Effective Date, (B) the expiration after the
Effective Date of any option or warrant or (C) any transfer after the Effective
Date of Capital Stock or any option or warrant exercisable for Capital Stock by
a Securityholder that is not a Selling Securityholder and (ii) any such Schedule
Update (a “Capitalization Schedule Update”) will be deemed to have amended the
Disclosure Schedules, to have qualified the representations and warranties
contained in Article IV and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the matters
described in clause (i) of this Section 7.3(c) for all purposes hereunder. 
Buyer shall not have any right to terminate this Agreement as a result of a
Capitalization Schedule Update.

 

Section 7.4                                                            Takeover
Statutes.  If any state takeover statute or similar Law shall become applicable
to the transactions contemplated by this Agreement or the Ancillary Agreements,
the Company and the Company Board shall grant such approvals and take such
actions as are necessary so that the transactions contemplated hereby or thereby
may be consummated as promptly as practicable on the terms contemplated hereby
or thereby and otherwise act to eliminate the effects of such statute or
regulation on the transactions contemplated hereby or thereby.

 

Section 7.5                                                           
Confidentiality.  Each of the parties hereto shall hold, and shall cause its
Representatives to hold, in confidence all documents and information furnished
to it by or on behalf of any other party to this Agreement in connection with
the transactions contemplated hereby pursuant to the terms of the letter
agreement, dated January 23, 2014 between Buyer and the Company (the
“Confidentiality Agreement”), which shall continue in full force and effect
until the Closing Date.  If for any reason this Agreement is terminated prior to
the Closing Date, the Confidentiality Agreement shall nonetheless continue in
full force and effect in accordance with its terms.

 

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Section 7.6                                                           
Commercially Reasonable Efforts.  Each of the Company, Buyer and Merger Sub
shall use its commercially reasonable efforts to take, or cause to be taken, all
appropriate actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable Law or otherwise to consummate and make effective
the transactions contemplated by this Agreement and the Ancillary Agreements as
promptly as practicable, including to obtain from Governmental Authorities and
other Persons all consents, approvals, authorizations, qualifications and orders
as are necessary for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements.

 

Section 7.7                                                            Public
Announcements.  Each of the parties shall consult with one another before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statement with respect to the transactions
contemplated hereby, and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Law or listing agreement with or listing rule of a national
securities exchange or trading market or inter-dealer quotation system (in which
case, prior to making such disclosure, the disclosing party will (a) deliver a
draft of such press release or public statement to each other party, and shall
give each other party reasonable opportunity (but in no event less than
forty-eight (48) hours) to comment thereon prior to such disclosure and (b)
consider in good faith the reasonable comments of such other party).

 

Section 7.8                                                           
Indemnification.

 

(a)                                 From and after the Effective Time, the
Surviving Company shall indemnify and hold harmless the present (as of
immediately prior to the Effective Time) and former directors and officers of
the Acquired Companies (each, an “Insured Party”) against expenses (including
reasonable attorneys’ fees), judgments, penalties, fines and amounts paid in
settlement incurred by such Insured Party (and not otherwise recovered) in
connection with the investigation, preparation to defend or defense of any
action, suit, proceeding or claim based on the fact that such Insured Party is
or was a director or officer of the Company and/or any of its Subsidiaries and
arising out of or pertaining to any action or omission occurring at or prior to
the Effective Time (including the transactions contemplated hereby), in each
case, and in accordance with the provisions (including as to advancement of
expenses) of any indemnification agreement between an Acquired Company and an
Insured Party that is listed on the Disclosure Schedules as of the Effective
Date and the certificate of incorporation or bylaws (or similar organizational
documents) of each Acquired Company as in effect on the Effective Date.  Buyer
hereby acknowledges that (A) the Insured Parties may have certain rights to
indemnification, advancement of expenses and/or insurance and (B) from and after
the Effective Time, the Surviving Company shall be the indemnitor of first
resort (i.e., its obligations to the Insured Parties are primary and any
obligation of any secondary indemnitors to advance expenses or to provide
indemnification for the same expenses or liabilities incurred by the Insured
Parties are secondary).

 

(b)                                 Prior to the Effective Time, the Company
shall purchase directors’ and officers’ liability insurance coverage for the
Company’s directors and officers which shall provide such directors and officers
with coverage for six (6) years following the Effective Time of not less than
the existing coverage under, and have other terms not materially less favorable
on the whole to, the insured persons than the directors’ and officers’ liability
insurance coverage

 

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presently maintained by the Company.  Buyer shall cause the Surviving Company
and each of its Subsidiaries to refrain from taking any act that would cause
such coverage to cease to remain in full force and effect.

 

(c)                                  Each Insured Party to whom this Section 7.8
applies shall be third party beneficiaries of this Section 7.8.  The provisions
of this Section 7.8 are intended to be for the benefit of each Insured Party and
his heirs.  The obligations under this Section 7.8 shall not be terminated or
modified in such a manner as to adversely affect any such Insured Party without
his written consent.

 

(d)                                 In the event the Surviving Company or any of
its Subsidiaries (i) consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity of such consolidation
or merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any Person, then, and in each such case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
the Surviving Company or any of its Subsidiaries assume the obligations set
forth in this Section 7.8.

 

Section 7.9                                                            Closing
Efforts.

 

(a)                                 Each of the parties shall use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements as
promptly as practicable, including to obtain from Governmental Authorities and
other Persons all consents, approvals, authorizations, qualifications and orders
as are necessary for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements

 

(b)                                 The Company and Buyer will cooperate and use
their respective commercially reasonable efforts to obtain, in accordance with
applicable Law and the applicable Contract all Third Party Consents.  Subject to
Section 7.9(c), with respect to Negative Consents under Advisory Contracts, any
such approvals or consents obtained shall be in a form reasonably satisfactory
to Buyer and, upon the request of the Company, Buyer will provide reasonable
assistance to the Company in obtaining such Third Party Consents, including
providing such information as shall be reasonably requested by the other parties
to such Contracts.  Notwithstanding the foregoing, no party shall have any
obligation to pay any money or other consideration to any Person or to initiate
any claim or Action against any Person in order obtain any such Third Party
Consent.

 

(c)                                  Notwithstanding anything herein to the
contrary, Buyer expressly agrees and acknowledges that a Third Party Consent
required under the Advisers Act or any Contract pursuant to which an Acquired
Company acts as an investment advisor within the meaning of the Advisers Act
(including as a subadviser) (an “Advisory Contract”) shall be deemed obtained if
(i) the Company delivers to each party to such Advisory Contract notice of the
transactions contemplated hereby and the “assignment” of such party’s Advisory
Contract that will result from the consummation of such transactions, and shall
request the written consent of such party to such assignment of its Advisory
Contract in a form reasonably satisfactory to Buyer, (ii) after the date of the
mailing of the notice pursuant to clause (i), if such party has not returned
such

 

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notice countersigned indicating consent to the deemed assignment of the
applicable Advisory Contract resulting from the transactions contemplated hereby
within thirty (30) days of the notice described in clause (i), the Company shall
send to such party a second notice in a form reasonably satisfactory to Buyer
stating that if such party does not object in writing to the deemed assignment
of the applicable Advisory Contract within thirty (30) days after delivery of
the notice described in this clause (ii), such party will be deemed to have
consented to such assignment and (iii) such party to the applicable Advisory
Contract does not object in writing to the deemed assignment of the applicable
Advisory Contract within the thirty (30) day period described in clause (ii)
(any deemed consent pursuant to this Section 7.9(c), a “Negative Consent”).

 

Section 7.10                                                     Conflicts and
Privilege.

 

(a)                                 Recognizing that Goodwin Procter  LLP
(“Goodwin”) has acted as legal counsel to the Selling Securityholders and the
Securityholder Representative (the “Selling Securityholder Parties”) and the
Acquired Companies in connection with the negotiation of this Agreement and the
transactions contemplated hereby prior to the Closing, and that Goodwin expects
to act as legal counsel to each of the Selling Securityholder Parties after the
Closing, in connection with the transactions contemplated hereby, each of Buyer
and the Surviving Company (including on behalf of the Acquired Companies after
the Closing) hereby:

 

(i)                                     waives, and agrees to cause its
Affiliates to waive, any conflicts that may arise in connection with Goodwin
representing any of the Selling Securityholder Parties and/or their respective
Affiliates after the Closing with respect to disputes related to or arising in
connection with this Agreement and/or any of the transactions contemplated  by
this Agreement (“Disputes”);

 

(ii)                                  consents, and agrees to cause its
Affiliates to consent and agree to, the communication by Goodwin to any of the
Selling Securityholder Parties of any fact known to Goodwin arising by reason of
Goodwin’s prior representation of the Acquired Companies in connection with
Goodwin’s representation of any of the Selling Securityholder Parties and/or
their respective Affiliates after the Closing with respect to any Dispute;
provided that, except as required by law, including pursuant to subpoena or
other legal proceedings or process (including any deposition, interrogatory or
civil or regulatory action or inquiry), no Selling Securityholder Party shall
disclose or use any fact so communicated to it that it knows or reasonably
should know constitutes confidential or proprietary information of the Acquired
Companies for any purpose not related to a Dispute;

 

(iii)                               agrees that all communications between or
among Goodwin and/or John A. Ehinger, Jr., General Counsel to the Acquired
Companies (each a “Counsel”), on the one hand, and any of the Acquired Companies
and/or the Selling Securityholder Parties, on the other hand, to the extent the
same relate to the negotiation, documentation and consummation of the
transactions contemplated by this Agreement or any dispute arising under this
Agreement (collectively, the “Privileged Communications”) shall be deemed to be
protected by the attorney-client privilege; and

 

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(iv)                              agrees that, upon and after the Closing, (a)
to the extent that files maintained by Counsel related to or arising in
connection with this Agreement and/or any of the transactions contemplated by
this Agreement constitute attorney work product relating to or arising in
connection with this Agreement and/or any of the transactions contemplated by
this Agreement (“Protected Work Product,” and together with Privileged
Communications, “Protected Material”) or Privileged Communications, the Selling
Securityholder Parties (and not the Acquired Companies or the Surviving Company)
shall hold any property rights in such Protected Material, (b) the Protected
Material and the expectation of confidentiality relating thereto belong solely
to the Selling Securityholder Parties, shall be controlled by the Selling
Securityholder Parties on behalf of the Securityholders and shall not pass to or
be claimed by any of Buyer or the Acquired Companies, and (c) applicable Counsel
shall have no duty whatsoever to reveal or disclose any such Protected Material
to any of Buyer, the Acquired Companies, the Surviving Company or their
Affiliates by reason of any attorney-client relationship between such counsel
and any of the Acquired Companies or otherwise.  Upon and after the Closing, to
the extent that files maintained by Counsel constitute the property of the
Acquired Companies or the Surviving Company, but not Protected Material, the
Acquired Companies and the Surviving Company shall be entitled to such materials
upon request and, to the extent such files contain Protected Material, Counsel
shall redact only such portions as constitute Protected Material; and

 

(v)                                 agrees that it will not, and that it will
cause its Affiliates not to, (x) access or use the Protected Material, including
by way of review of any electronic data, communications or other information or
by seeking to have the Securityholder Representative waive the attorney-client
privilege, work product doctrine or other privilege, or by otherwise asserting
that any of Buyer, the Acquired Companies or any of its Affiliates has the right
to assert or waive the attorney-client privilege, the work product doctrine or
other privilege or (y) seek to obtain the Protected Material from applicable
Counsel.  For avoidance of doubt, the provisions of the preceding clause (v)(x)
shall not be deemed violated if (1) any employee of Buyer, the Surviving Company
or the Acquired Companies who is a Selling Securityholder Party accesses or uses
any Privileged Communication to which such employee was a party (including by
way of review of any electronic data, communications or other information) or
(2) the Acquired Companies, the Surviving Company or any of their Affiliates
maintain or transfer copies of any Protected Material in connection with the
storage of data and files of the Acquired Companies, the Surviving Company or
any of their Affiliates (regardless of the server, network or virtual data
location), provided that such access and use shall not result in any waiver of
the Selling Securityholder Parties’ attorney-client privilege or the work
product doctrine with respect to such Protected Material.

 

(b)                                 Notwithstanding anything in the foregoing
provisions of this Section 7.10 to the contrary: (i) in the event that Buyer or
any of the Acquired Companies or any of their respective Affiliates is required
by subpoena or other legal proceedings or process (including any deposition,
interrogatory or civil or regulatory action or inquiry) to access or obtain a
copy of all or a portion of the Protected Material, Buyer shall, as soon as
reasonably practicable and to the extent permissible under applicable law,
notify the Securityholder Representative so that the Securityholder
Representative may, at its own expense, seek a method by which the requested
information may be obtained by such regulatory or governmental entity or other
Person in a manner (including subject to a protective order, if available) which
will not jeopardize any attorney-client privilege or the work product doctrine,
and Buyer, the Surviving Company and

 

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the Selling Securityholder Parties and their Affiliates shall cooperate in good
faith to assist the Securityholder Representative in such endeavor; provided,
that if Buyer or any of the Acquired Companies or any of their respective
Affiliates are, on the advice of Buyer’s counsel, legally required to access or
obtain a copy of all or a portion of any Privileged Communication or Protected
Work Product, Buyer or any of the Acquired Companies or any of their respective
Affiliates may, without liability hereunder, access or obtain a copy of all or a
portion of such Privileged Communication or Protected Work Product which its
counsel advises is legally required, but only to the extent and for the purpose
legally required; and (ii) in the event that a dispute arises between Buyer, the
Surviving Company or any of the Acquired Companies and a third party (other than
a Selling Securityholder Party or any of its Affiliates) after the Closing, the
Surviving Company (including on behalf of the Acquired Companies) may assert the
attorney-client privilege or the work product doctrine to prevent disclosure of
confidential communications by applicable Counsel to such third party; provided,
however, that neither the Surviving Company nor any of the Acquired Companies
may waive such privilege without the prior written consent of the Securityholder
Representative, on behalf of the Selling Securityholder Parties.

 

Section 7.11                                                     Employment
Benefits.

 

(a)                                 On or after the Closing Date upon a
transition date to be selected by the Buyer in its sole discretion, which is
currently expected to be January 1, 2015 (the “Transition Date”), Buyer shall,
or shall cause the Surviving Company and/or the appropriate Subsidiaries of
Buyer to permit the employees of the Acquired Companies as of immediately prior
to the Effective Time who continue to be employed by Buyer, the Surviving
Company and/or its Subsidiaries on and after the Effective Time (the “Covered
Employees”) to enroll and participate the employee benefit or compensation
plans, programs or arrangements adopted, maintained or contributed to by Buyer
or the Surviving Company and/or their Subsidiaries in which Covered Employees
are eligible to participate (the “Buyer Plans”).  The Transition Date may be a
different date for separate Buyer Plans.  Until the applicable Transition Date
is selected for a Buyer Plan, the Buyer shall or shall cause the Surviving
Company and/or the appropriate subsidiaries of Buyer to maintain the
corresponding Company Employee Plans in which Covered Employees are eligible to
participate in accordance with their terms.  Further, if the Buyer elects to
require the Company to terminate the Savings Plan in accordance with Section
7.11(b), the Transition Date with respect to the Buyer Plan corresponding to the
Savings Plan shall be the Closing Date.  With respect to any Buyer Plans in
which the Covered Employees become eligible to participate on or after the
applicable Transition Date, Buyer shall, or shall cause the Surviving Company
and/or the appropriate Subsidiaries of Buyer to, no later than the applicable
Transition Date: (i) provide the Covered Employees with service credit for
purposes of eligibility, participation, vesting and levels of benefits (but not
for benefit accruals under any defined benefit pension plan), under each
applicable Buyer Plan for all periods of employment with the Acquired Companies
or any predecessor entity to the extent that such service was taken in to
account under the applicable plan of the Acquired Companies,  prior to the
Effective Time, and with Buyer, the Surviving Company and any of their
Subsidiaries or Affiliates on and after the Effective Time; (ii) cause any
pre-existing conditions or limitations, eligibility waiting periods or required
physical examinations under any Buyer Plan to be waived with respect to the
Covered Employees and their eligible dependents, to the extent waived under the
corresponding plan in which the applicable Covered Employee participated
immediately prior to the Effective

 

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Time; and (iii) if the Transition Date for the Buyer Plan that provides health,
dental or vision benefits occurs prior to the end of the applicable plan year,
give the Covered Employees and their eligible dependents credit for the plan
year in which the Transition Date occurs towards applicable deductibles and
annual out-of-pocket limits for expenses incurred prior to the Transition Date,
in each case, to the extent permitted under the applicable Buyer Plan and under
applicable Law.  Notwithstanding the foregoing, in no event will any service
prior to the Effective Time with the Acquired Companies or any of its Affiliates
or any predecessor count as service with Buyer for purposes of the Envestnet
Scholarship Plan.

 

(b)                                 In the event that the Buyer elects to
terminate the Company’s Automated Data Processing Prototype 401(k) and Profit
Sharing Plan, named the Placemark Investments Inc. 401(k) Profit Sharing Plan
(the “Savings Plan”), Buyer shall provide written notice to such effect to the
Company no later than five (5) business days prior to the Closing Date, and the
Company agrees to adopt resolutions to terminate the Savings Plan effective
prior to the Effective Time.

 

(c)                                  Section 280G.

 

(i)                                     Prior to or as soon as practicable
following the signing of this Agreement, the Company shall take reasonable best
efforts to obtain executed and effective “waivers,” in a form reasonably
acceptable to Buyer, from any individuals who are “disqualified individuals” (as
defined in Section 280G(c) of the Code) of the Acquired Companies and who would
reasonably be expected to receive in connection with the consummation of the
Transactions (either alone or in conjunction with any other event) any
“parachute payment” (within the meaning of Section 280G of the Code) that is
subject to the imposition of an excise Tax under Section 4999 of the Code or
that would not be deductible by reason of Section 280G of the Code of such
“disqualified individuals” right to receive or retain any such “parachute
payments” to the extent the present value of such payments exceeds three times
such “disqualified individuals” “base amount” (within the meaning of Section
280G of the Code and the regulations thereunder (the “280G Waivers”).

 

(ii)                                  Following the delivery by the Company to
Buyer of each of the executed 280G Waivers described in Section 7.11(c)(i) and
following the disclosure of any information from Buyer required pursuant to
Section 7.11(c)(iii) but prior to the Stock Sale Closing Time, Company shall
have submitted to its stockholders for approval, in a manner that is intended to
comply with the approval requirements of Section 280G(b)(5)(B) of the Code and
the regulations thereunder and is reasonably satisfactory to Buyer, any payments
and/or benefits that separately or in the aggregate, could reasonably be
expected to be deemed to constitute “parachute payments” (within the meaning of
Section 280G of the Code and the regulations promulgated thereunder) for which
an executed 280G Waiver was obtained or for which no waiver is necessary, such
that upon obtaining such approval of the Company shareholders such payments and
benefits would not be deemed to be “parachute payments” under Section 280G of
the Code.  In addition, the Company shall have delivered to Buyer evidence
reasonably satisfactory to Buyer that either (i) a vote of the Company
shareholders was solicited in conformance with the requirements Section
280G(b)(5)(B) of the Code and the regulations promulgated thereunder, and the
requisite approval of the shareholders was obtained with respect to any payments
and/or benefits that were subject to the vote of the Company shareholders (the

 

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“280G Approval”) or (ii) the 280G Approval was not obtained and as a
consequence, that such “parachute payments” shall not be made or provided
pursuant to the 280G Waivers.

 

(iii)                               Prior to the Effective Date with respect to
the Key Employees and no later than fourteen (14) days prior to the Closing Date
with respect to any other Covered Employee, Buyer has provided the Company and
its counsel, in writing, with all relevant terms of any employment contracts or
other arrangements that Company intends to enter into with the “disqualified
individuals” (as defined in Section 280G(c) of the Code) of Acquired Companies
on or around the Closing Date that, including any such terms that could
reasonably be expected to result in payments and other terms (including, rights
to severances or signing bonuses) that need to be approved (or disclosed) to
ensure the disclosure to the Company stockholders and the approval described in
Section 7.11(c)(ii) is valid.

 

(d)                                 No provision of this Section 7.11 shall
create any third-party beneficiary rights in any Covered Employee (including any
beneficiary or dependent thereof) nor is it intended to (i) amend or alter any
benefit plan of the Surviving Company, the Acquired Companies or any of their
respective Affiliates or any benefit plan of Buyer or any of its Affiliates or
(ii) create any obligation on the part of Buyer, the Surviving Company or any of
their respective Affiliates to continue the employment of any Covered Employee
for any period following the Closing.

 

Section 7.12                                                     Financial
Statements.

 

(a)                                 For each month ended after the Effective
Date but at least ten (10) days prior to the Closing Date, the Company shall
provide to Buyer, as soon as practicable after the end of such calendar month,
unaudited consolidated financial statements of the Company, consisting of a
balance sheet as of the end of each such month and an income statement for such
month and for the portion of the year then ended (such financial statements,
“Interim Financial Statements”).

 

(b)                                 As promptly as practicable after the
Effective Date, the Company shall provide to Buyer, the audited consolidated
financial statements of the Company, consisting of the audited consolidated
balance sheet at December 31, 2012 and December 31, 2013 and the related
statements of earnings and retained earnings and cash flows for the fiscal years
then ended, and audited by KPMG (the “Year End Financial Statements”).

 

(c)                                  As promptly as practicable following the
Effective Date, the Company shall deliver to Buyer an SAS100 review of financial
statements for the first, second and third fiscal quarters of calendar year 2013
and for the first and second fiscal quarters of calendar year 2014.

 

(d)                                 For each fiscal quarter ended after the
Effective Date but at least thirty (30) days prior to the Closing Date, the
Company shall deliver to Buyer an SAS100 review of financial statements for such
fiscal quarter as promptly as practicable after the end of such fiscal quarter.

 

(e)                                  The Company will cause the appropriate
officers of the Company to execute and deliver to Buyer’s independent auditors
such representation letters in customary form in respect of each audited period
and each SAS100 review period commencing with the

 

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fiscal years ended December 31, 2012 and December 31, 2013 and continuing
through the Closing Date as Buyer shall reasonably require.

 

(f)                                   No Acquired Company or Securityholder
shall be required to bear any out-of-pocket costs or expenses in connection with
the performance by the Company of its obligations pursuant to this Section
7.12(f).  Without limitation of the foregoing, (i) Buyer shall pay directly the
fees and expenses of KPMG in connection with the audit of the Year End Financial
Statements and (ii) Buyer shall reimburse the Company any out-of-pocket costs or
expenses incurred by the Company on or before the earlier of (A) the close of
business on the last Business Day preceding the Closing Date and (B) the
termination of this Agreement pursuant to Article XI.

 

(g)                                  Each of the parties agree to keep each
other informed of the status of the Year End Financial Statements and SAS100
reviews required to be delivered hereunder.

 

Section 7.13                                                     Further
Assurances.  Each party shall cooperate with the others, and execute and
deliver, or use its reasonable best efforts to cause to be executed and
delivered, all such other instruments, including instruments of conveyance,
assignment and transfer, and take all such other actions as such party may
reasonably be requested to take by the other parties hereto from time to time,
consistent with the terms of this Agreement, in order to effectuate the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

 

Section 7.14                                                     Company
Stockholder Meeting; Short Form Merger.  In the event that Buyer or Merger Sub
or any other Subsidiary of Buyer, shall acquire at least ninety percent (90%) of
the issued and outstanding Capital Stock (the “Short Form Threshold”) pursuant
to the Initial Stock Sale or otherwise, each of Buyer, Merger Sub and the
Company shall take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after the Stock Sale Closing Time,
without any stockholder meeting, in accordance with Section 253 of the DGCL.  In
the event that Buyer or Merger Sub or any other Subsidiary of Buyer does not
acquire a percentage of the issued and outstanding Capital Stock equal to the
Short Form Threshold pursuant to the Initial Stock Sale or otherwise, then Buyer
or Merger Sub or such other Subsidiary of Buyer, as applicable, shall deliver a
consent to the adoption of the Merger pursuant to Section 228 of the DGCL as
soon as is reasonably practicable after the Stock Sale Closing Time.

 

Section 7.15                                                     Release. 
Effective at the Stock Sale Closing Time, each of the undersigned Selling
Securityholders, on behalf of himself, herself or itself and his, her or its
assigns, heirs, beneficiaries, representatives, agents and Affiliates (excluding
any other Selling Securityholder and any portfolio companies, the “Releasing
Parties”), hereby fully and finally releases, acquits and forever discharges the
Acquired Companies and each of their present and former officers, directors,
employees, agents, predecessors, successors, assigns, insurers and attorneys
(solely in their respective capacities as such, the “Released Parties”) (and
excluding any other Securityholders in their respective capacities as such) from
any and all claims, causes of action, liabilities, losses, costs, damages,
penalties, charges, expenses and all other forms of liability or obligation
whatsoever, in law or equity, whether asserted or unasserted, known or unknown,
foreseen or unforeseen (“Claims”), arising prior to the Stock Sale Closing Time
and relating to the Acquired Companies, the Acquired Stock, the Initial Stock
Sale or any other

 

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transactions contemplated by this Agreement (collectively, the “Released
Claims”); provided, however, that the Released Claims shall exclude any Claims
arising from or relating to or in connection with (i) rights or obligations
under this Agreement and the Ancillary Agreements or any other agreements
entered into in connection with the transactions contemplated by this Agreement,
(ii) any claim or right (A) to indemnification under (1) the certificate of
incorporation, bylaws or other organizational documents of the Acquired
Companies as in effect on the date of the Initial Stock Sale or (2) any
indemnification or similar agreement between such Selling Securityholder and any
of the Acquired Companies, or (B) under any director & officer policy or
insurance of the Acquired Companies then in effect, (iii) with respect to any
Selling Securityholders that were employed by any of the Acquired Companies
immediately prior to the Stock Sale Closing Time, any ordinary course accrued or
continuing liabilities and obligations of the Acquired Companies incurred in
connection with such Selling Securityholder’s employment by such Acquired
Company prior to the Stock Sale Closing Time (e.g., accrued salary, vacation,
expense reimbursements, benefits under Employee Plans, etc.).  Each Selling
Securityholder, for itself only, expressly acknowledges that the release
contained herein applies to all Released Claims as defined herein, whether such
Released Claims are known or unknown, and include Released Claims which if known
by the Releasing Party might materially affect its decision to effect the
settlement contained herein.  Each Selling Securityholder, for itself only, has
considered and taken into account the possible existence of such Released Claims
in determining to execute and deliver this Agreement.  Without limiting the
generality of the foregoing, solely with respect to the Released Claims, each
Selling Securityholder, for itself only, expressly waives any and all rights
conferred upon it by any statute or rule of Law that provides that a release
does not extend to claims which the Releasing Party does not know or suspect to
exist in its favor at the time of executing the release, which if known by the
Releasing Party would have materially affected the Releasing Party’s settlement
with the Released Parties.  This Agreement constitutes a complete defense of any
and all Released Claims.

 

Section 7.16                                                    
Non-Solicitation.  For a period of one (1) year from and after the Closing Date,
each Selling Securityholder (other than Royal Bank of Canada) shall not, and, if
such Selling Securityholder is not a natural Person, shall direct each of its
directors, managers, partners, officers and employees not to, directly or
indirectly on behalf of any other Person, (a) cause, solicit, induce or
encourage any customer or client of the Acquired Companies to terminate or
modify any such relationship or ( b) cause, solicit, induce or encourage any of
employees to leave his or her employment with the Acquired Companies or hire,
employ or otherwise engage any such individual; provided, that nothing contained
in clause (b) of this Section 7.16 shall prohibit a Selling Securityholder or
its directors, managers, partners, officers and employees from (i) engaging in
general solicitations for employment (whether through advertisements, the
Internet or any agent) not otherwise aimed or targeted at senior management
employees of the Acquired Companies or hiring any such individual in the event
that such individual shall have responded to such a general solicitation, (ii)
hiring or soliciting any employees listed on Schedule 7.16 (iii) hiring any such
individual terminated by the Acquired Companies, as applicable or (iv) hiring
any such individual who has not been employed by the Acquired Companies for at
least six (6) months.  Notwithstanding anything herein to the contrary, nothing
in this Section 7.16 shall be deemed to apply to the Royal Bank of Canada.

 

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Section 7.17                             Certain Additional Covenants.  The
Company shall take each of the actions described in Schedule 7.17.

 

ARTICLE VIII
TAX MATTERS

 

Section 8.1                                                            Tax
Returns.

 

(a)                                 The Buyer shall prepare or cause to be
prepared, at the Securityholder Representative’s expense (on behalf of the
Securityholders), in accordance with past practice of the Acquired Companies,
unless otherwise required by applicable Law, and consistent with Section 8.1(b),
all Tax Returns of the Acquired Companies for any Pre-Closing Tax Period that
are due after the Closing Date.  Buyer shall, at its own expense, prepare and
timely file or cause to be prepared and timely filed, in accordance with past
practice of the Acquired Companies, unless otherwise required by applicable Law,
all Tax Returns of the Acquired Companies for any Straddle Period required to be
filed after the Closing Date; provided, however, that Buyer shall prepare such
Tax Returns consistent with Section 8.1(b).  The Buyer shall provide the
Securityholder Representative with a draft of any Tax Return for the Acquired
Companies required to be prepared by Buyer pursuant to this Section 8.1(a) at
least twenty (20) days prior to the due date for filing such Tax Returns for the
Securityholder Representative’s review. Buyer shall consider in good faith all
reasonable comments proposed in writing by the Securityholder Representative at
least ten (10) days prior to the due date for filing such Tax Return with
respect to any Straddle Period Tax Return.

 

(b)                                 The parties agree with respect to certain
Tax matters as follows: (i) to file a federal income Tax Return of the Company
for the Company’s taxable year ending on the Closing Date pursuant to Treasury
Regulations Section 1.1502-76(c); (ii) to allocate all items accruing on the
Closing Date to the Company’s taxable period ending on the Closing Date pursuant
to Treasury Regulations Section 1.1502-76(b)(1)(ii)(A)(1) (and not pursuant to
the “next day” rule under Treasury Regulations Section 1.1502-76(b)(1)(ii)(B) or
pursuant to the ratable allocation method under Treasury Regulations Section
1.1502-76(b)(2)(ii) or 1.1502-

 

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76(b)(2)(iii)); (iii) not to elect to waive any carryback of net operating
losses under Section 172(b)(3) of the Code on any Tax Return of the Company
filed in respect of a Pre-Closing Tax Period; and (iv) to deduct the Transaction
Deductions on the Tax Returns of the Company for the taxable period that ends on
the Closing Date, in each case unless otherwise required by applicable Law.

 

(c)                                  Within ten (10) days of filing the federal
income Tax Return for the Acquired Companies for the year ended on the Closing
Date, the Buyer shall deliver to the Securityholder Representative a schedule
setting forth in reasonable detail (including an explanation as to the
methodology used to compute such amounts) the Buyer’s computation of the amount
(if any) of the NOL Shortfall and NOL Tax Loss (the “NOL Schedule”).  The
Securityholder Representative may dispute the calculation of the NOL Tax Loss by
notifying Buyer of such disagreement in writing, setting forth in reasonable
detail the particulars of such disagreement (an “NOL Objection”), within thirty
(30) calendar days after Securityholder Representative’s receipt of the NOL
Schedule.  To the extent not set forth in the NOL Objection, the Securityholders
shall be deemed to have agreed with Buyer’s calculation of all other items and
amounts contained in the NOL Schedule.  In the event that the Securityholder
Representative does not provide a NOL Objection within such thirty (30) calendar
day period, the Securityholders shall be deemed to have accepted the NOL
Schedule delivered by Buyer and Buyer’s calculation of the NOL Tax Loss set
forth therein, which shall then be final, binding and conclusive for all
purposes hereunder.  In the event an NOL Objection is timely provided, Buyer and
the Securityholder Representative shall use their commercially reasonable
efforts for a period of thirty (30) calendar days (or such longer period as they
may agree in writing) to resolve any disagreements set forth in the NOL
Objection.  If Buyer and the Securityholder Representative are unable to resolve
such items in dispute (the “Unresolved NOL Items”) by the end of such period
then, at any time thereafter, either the Securityholder Representative or Buyer
may require that the Independent Accountants resolve the Unresolved NOL Items.
 For the avoidance of doubt, the Independent Accountants shall only resolve the
Unresolved NOL Items and not any disagreements that have been resolved by the
parties.  Buyer and the Securityholder Representative shall instruct the
Independent Accountants to determine as promptly as practicable, and in any
event within thirty (30) calendar days of the date on which such dispute is
referred to the Independent Accountants, based solely on the provisions of this
Agreement and the written presentations by the Securityholder Representative and
Buyer, and not on an independent review, whether and to what extent (if any) the
calculation of the NOL Tax Loss; provided, however, that in resolving any
Unresolved NOL Item, the Independent Accountants (A) may not assign a value to
any item greater than the greatest value for such item claimed by Buyer or the
Securityholder Representative or less than the smallest value for such item
claimed by either Buyer or the Securityholder Representative and (B) may not
take oral testimony from the parties hereto or any other Person.  The fees and
expenses of the Independent Accountants shall be allocated between the parties
based upon the percentage which the portion of the contested amount not awarded
to each party bears to the amount actually contested by such party.  The
determination of the Independent Accountants shall be set forth in a written
statement delivered to the Securityholder Representative and Buyer and shall be
final, conclusive and binding on the parties.  If it is finally determined
pursuant to this Section 8.1(c) that there is an NOL Tax Loss, then within five
(5) Business Days after the NOL Tax Loss is finally determined pursuant to this
Section 8.1(c), Buyer and the Securityholder Representative shall deliver joint

 

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written instructions to the Escrow Agent to release to Buyer from the Escrow
Fund an amount of cash equal to the NOL Tax Loss.

 

Section 8.2                                                           
Controversies.

 

(a)                                 (i) Buyer and the Surviving Company agree to
give written notice to the Securityholder Representative of the receipt of any
written notice by Buyer or the Acquired Companies which involves the assertion
of any claim for Taxes for which the Securityholder Representative would
reasonably be expected to be responsible under this Agreement, and (ii) the
Securityholder Representative and the Securityholders agree to give written
notice to Buyer of the receipt of any written notice by the Securityholder
Representative or such Securityholder which involves the assertion of any claim
for Taxes for which Buyer or the Surviving Company could reasonably be expected
to be responsible under this Agreement; provided, that, in the case of clauses
(i) and (ii), the failure to give such notice shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
has been prejudiced as a result of such failure.

 

(b)                                 Notwithstanding anything herein to the
contrary, including Section 10.5: (i) the Securityholder Representative will
control the contest or resolution of any Tax Proceeding with respect to a
Pre-Closing Tax Period; provided, that the Securityholder Representative will
obtain the prior written consent of Buyer (which consent will not be
unreasonably withheld, delayed or conditioned) before entering into any
settlement of a claim or ceasing to defend such claim; provided, further, that
Buyer will be entitled to participate fully in the defense of such claim and to
employ counsel of its choice for such purpose, the fees and expenses of which
separate counsel will be borne by Buyer; and (ii) Buyer will control the contest
or resolution of any Tax Proceeding with respect to a Straddle Period; provided,
that Buyer will obtain the prior written consent of Securityholder
Representative (which consent will not be unreasonably withheld, delayed or
conditioned) before entering into any settlement of a claim or ceasing to defend
such claim, provided, further, that Securityholder Representative will be
entitled to fully participate in the defense of such claim and to employ counsel
of its choice for such purpose, the fees and expenses of which separate counsel
will be borne by Securityholder Representative (on behalf of the
Securityholders).

 

Section 8.3                                                           
Post-Closing Access and Cooperation.  The parties shall cooperate fully, as and
to the extent reasonably requested by any other party, in connection with the
filing of Tax Returns for a Pre-Closing Tax Period and Straddle Period,
obtaining Tax refunds (or credits), determining liability for Taxes and in
conducting any audit, litigation or other Proceeding with respect to Taxes of
the Acquired Companies.  Such cooperation shall include the retention and (upon
the other party’s request) the provision of records and information which are
reasonably relevant to any such Tax Returns, Tax refunds or Tax matters and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.  Each party
shall provide to the others, within ten (10) Business Days of the receipt
thereof, any Tax related communications and notices it receives which may impact
the other party’s Tax liability or filing responsibilities.  Notwithstanding
anything to the contrary in this Agreement, Buyer shall not be required to
disclose to the Securityholder Representative any consolidated, combined,
affiliated or unitary Tax Return which includes Buyer or any of its Affiliates
or any Tax related work papers.

 

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Section 8.4                                                           
Post-Closing Actions.  Buyer and its Subsidiaries and Affiliates shall not amend
any previously filed Tax Returns for a Pre-Closing Tax Period, file Tax Returns
for a Pre-Closing Tax Period in a jurisdiction where the Company has not
historically filed Tax Returns, initiate discussions or examinations with any
Taxing Authority regarding Taxes with respect to any Pre-Closing Tax Period,
make any voluntary disclosures with respect to Taxes for Pre-Closing Tax
Periods, change any accounting method or adopt any convention that shifts
taxable income from a period beginning (or deemed to begin) after the Closing
Date to a taxable period (or portion thereof) ending on or before the Closing
Date or shifts deductions or losses from a Pre-Closing Tax Period to a period
beginning (or deemed to begin) after the Closing Date, in each case, without the
prior written consent of the Securityholder Representative or as required by
applicable Law.  In addition, neither Buyer nor any of its Affiliates shall make
any election under Section 338 or 336(e) of the Code or any state, local or
foreign Law equivalent in respect of the transactions contemplated by this
Agreement.

 

Section 8.5                                                            Refunds. 
Any refunds (or credits for overpayment) of Taxes, including any interest
received from a Taxing Authority thereon, attributable to any Pre-Closing Tax
Period (or portion of any Straddle Period ending on the Closing Date as
determined in accordance with Section 8.7) of the Acquired Companies shall be
for the account of the Securityholders.  Promptly upon any Acquired Company’s
(or any of its Affiliates’) actual receipt of any such refund (or credit for
overpayment), Buyer shall pay over, by wire transfer of immediately available
funds, any such refund (or the amount of any such credit), including any
interest thereon, to the Securityholders pursuant to the terms of this
Agreement, with each such Securityholder being entitled to receive its Pro Rata
Share of such amounts.  At the Securityholder Representative’s request and
expense (on behalf of the Securityholders), Buyer shall take any reasonable
action necessary for the Acquired Companies to promptly claim refunds
attributable to any Pre-Closing Tax Period or Straddle Period and cause the
Acquired Companies to claim refunds attributable to any Pre-Closing Tax Period
or Straddle Period within the statutorily required time period unless Buyer
reasonably determines that such action would be detrimental to Buyer or its
Affiliates (including the Acquired Companies).

 

Section 8.6                                                            Certain
Taxes and Fees.  All transfer, documentary, sales, use, stamp, registration and
other such Taxes, and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred in connection with the
consummation of the transactions contemplated by this Agreement (“Transfer
Taxes”) shall be borne fifty percent (50%) by the Securityholders and fifty
percent (50%) by Buyer, and each party agrees to file all necessary
documentation (including all Tax Returns) with respect to such Transfer Taxes in
a timely manner, and, if required by applicable Law, the parties will, and shall
cause their Affiliates to, join in the execution of any such Tax Returns and
other documentation.

 

Section 8.7                                                            Straddle
Period Tax Allocation.  For purposes of this Agreement, where Taxes involve a
Straddle Period, such Taxes shall be calculated as though the taxable year
terminated as of the close of business on the Closing Date; provided, however,
that in the case of a Tax not based on income, receipts, payments, payroll, or
similar items, such Taxes shall be equal to the amount of Tax for the entire
Straddle Period multiplied by a fraction, the numerator of which shall be the
number of days from the beginning of the Straddle Period through to and
including the Closing Date and the denominator of which shall be the number of
days in the Straddle Period.

 

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Section 8.8                                                            Closing
Date Course of Business.  For the portion of the Closing Date after the time of
Closing, Buyer shall cause the Acquired Companies to carry on its business only
in the ordinary course in the same manner as previously conducted.

 

Section 8.9                                                            End of
Tax Year.  Buyer shall cause the tax year of the Company to close as of the end
of the Closing Date for U.S. federal income tax purposes by including the
Company on Buyer’s consolidated Tax Return after the Closing Date.

 

Section 8.10                                                     Tax Treatment
of Escrow Fund.  All parties hereto agree for all Tax purposes that: (i) if and
to the extent any portion of the Escrow Fund or the Converted Award Escrow Fund,
as applicable, is actually distributed to holders of Company Options in respect
of their Company Options, such portion shall be treated as compensation paid at
the time the portion of the Escrow Fund or the Converted Award Escrow Fund, as
applicable, is actually released to the holders of Company Options and shall be
subject to applicable withholding Tax at such time, (ii) the right of the
Securityholders (other than Optionholders) to the Escrow Fund or the Converted
Award Escrow Fund, as applicable, shall be treated as deferred contingent
purchase price eligible for installment sale treatment under Section 453 of the
Code and any corresponding provision of foreign, state or local Law, as
appropriate; (iii) Buyer shall be treated as the owner of the Escrow Fund and
the Converted Award Escrow Fund solely for Tax purposes, and all interest and
earnings earned from the investment and reinvestment of the Escrow Fund and the
Converted Award Escrow Fund, or any portion thereof, shall be allocable to
Buyer; (iv) if and to the extent any amount of the Escrow Fund or the Converted
Award Escrow Fund, as applicable, that is paid to the Securityholders (other
than Optionholders) is actually distributed to the Securityholders in respect of
their Capital Stock, interest may be imputed on such amount as required by
Section 483 or 1274 of the Code; and (v) in the event that the total amount of
any interest and earnings earned on the portion of the Escrow Fund or the
Converted Award Escrow Fund, as applicable, that is paid to the Securityholders
(other than Optionholders) exceeds the imputed interest, such interest shall be
treated as interest or other income and not as purchase price.  Clause (v) of
the preceding sentence is intended to ensure that the right of the
Securityholders (other than Optionholders) to the Escrow Fund or the Converted
Award Escrow Fund, as applicable, that is paid to the Securityholders (other
than Optionholders) and any interest and earnings earned thereon is not treated
as a contingent payment without a stated maximum selling price under Section 453
of the Code and the Treasury Regulations promulgated thereunder.  All parties
hereto shall file all Tax Returns consistently with the foregoing, unless
otherwise required by applicable Law.

 

ARTICLE IX
CONDITIONS TO CLOSING

 

Section 9.1                                                            General
Conditions.  The respective obligations of each party to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment,
at or prior to the Closing, of each of the following conditions, any of which
may, to the extent permitted by applicable Law, be waived in writing by any
party in its sole discretion (provided that such waiver shall only be effective
as to the obligations of such party):

 

(a)                                 No Injunction or Prohibition.  No
Governmental Authority shall have enacted, issued, promulgated, enforced or
entered any Law (whether temporary, preliminary or

 

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permanent), that is then in effect and that enjoins, restrains, conditions,
makes illegal or otherwise prohibits the consummation of the transactions
contemplated by this Agreement or the Ancillary Agreements.

 

Section 9.2                                                           
Conditions to Obligations of the Company.  The obligations of the Company to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, any of which may be waived in writing by the Company in its sole
discretion:

 

(a)                                 Representations, Warranties and Covenants. 
(i) The representations and warranties of Buyer and Merger Sub contained in this
Agreement shall be true and correct as of the Effective Date and as of the
Closing Date as if made as of the Closing Date (other than representations and
warranties that are made as of a specified date, which representations and
warranties shall be true and correct as of such specified date), except as would
not be reasonably likely to have a material adverse effect on the ability of
Buyer and Merger Sub to consummate the transactions contemplated hereby (without
giving effect to any “material adverse effect”, “materiality” or similar
qualifiers set forth therein); (ii) the representations and warranties of Buyer
and Merger Sub contained in Section 5.1 and Section 5.2 shall be true and
correct as of the Effective Date and as of the Closing Date as if made as of the
Closing Date (other than representations and warranties that are made as of a
specified date, which representations and warranties shall be true and correct
as of such specified date); (iii) Buyer and Merger Sub shall have performed all
obligations and agreements and complied with all covenants and conditions
required by this Agreement or the Ancillary Agreements to be performed or
complied with by them prior to or at the Closing in all material respects; and
(iv) the Company shall have received from Buyer and Merger Sub a certificate,
dated the Closing Date, to the effect set forth in the foregoing clauses (i),
(ii) and (iii), signed by a duly authorized officer thereof.

 

(b)                                 Escrow Agreement.  The Company shall have
received an executed counterpart to the Escrow Agreement, signed by each party
other than the Securityholder Representative.

 

(c)                                  Payments.  Buyer shall have made all
payments required to be made by Buyer pursuant to Section 3.1.

 

Section 9.3                                                           
Conditions to Obligations of Buyer and Merger Sub.  The obligations of Buyer and
Merger Sub to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived in writing by Buyer in its sole
discretion:

 

(a)                                 Representations, Warranties and Covenants of
the Company.  (i) The representations and warranties of the Company contained in
this Agreement shall be true and correct as of the Effective Date and as of the
Closing Date as if made as of the Closing Date (other than representations and
warranties that are made as of a specified date, which representations and
warranties shall be true and correct as of such specified date), except as would
not be reasonably likely to have a Material Adverse Effect (without giving
effect to any “Material Adverse Effect”, “materiality” or similar qualifiers set
forth therein), (ii) the representations and warranties of the Company contained
in Section 4.1 and Section 4.2 shall be true and correct as

 

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of the Effective Date and as of the Closing Date as if made as of the Closing
Date (other than representations and warranties that are made as of a specified
date, which representations and warranties shall be true and correct as of such
specified date); (iii) the Company shall have performed all obligations and
agreements and complied with all covenants and conditions required by this
Agreement or the Ancillary Agreements to be performed or complied with by it
prior to or at the Closing in all material respects (except for the covenants
set forth in Section 7.17 and Schedule 7.17, which the Company shall have
performed and complied with in all respects), and (iv) Buyer shall have received
from the Company a certificate, dated as of the Closing Date, to the effect set
forth in the foregoing clauses (i), (ii) and (iii), signed by a duly authorized
officer thereof.

 

(b)                                 Representations, Warranties and Covenants of
the Selling Securityholders.  (i) The representations and warranties of each of
the Selling Securityholders, solely with respect to itself and not to any other
Selling Securityholder, contained in this Agreement shall be true and correct as
of the Effective Date and as of the Closing Dates as if made as of the Closing
Date (other than representations and warranties that are made as of a specified
date, which representations and warranties shall be true and correct as of such
specified date), except as would not be reasonably likely to have a material
adverse  effect on the ability of such Selling Securityholder to consummate the
transactions contemplated hereby (without giving effect to any “material adverse
effect”, “materiality” or similar qualifiers set forth therein), (ii) the
representations and warranties of such Selling Securityholder contained in
Section 6.1 and Section 6.2 shall be true and correct as of the Effective Date
and as of the Closing Date (other than representations and warranties that are
made as of a specified date, which representations and warranties shall be true
and correct as of such specified date); and (iii) such Selling Securityholder
shall have performed all obligations and agreements and complied with all
covenants and conditions required by this Agreement or the Ancillary Agreements
to be performed or complied with by it prior to or at the Closing in all
material respects.

 

(c)                                  Escrow Agreement.  Buyer shall have
received an executed counterpart to the Escrow Agreement, signed by each party
other than Buyer.

 

(d)                                 Payoff Letters.  Buyer shall have received
executed payoff letters, executed by the lenders listed in the statement
delivered pursuant to Section 3.4 (the “Payoff Letters”).

 

(e)                                  Certificate.  Buyer shall have received
from the Company a certificate stating that Company is not and has not been a
United States real property holding corporation, dated as of the Closing Date
and in form and substance required under Treasury Regulations Section
1.897-2(h).

 

(f)                                   Third Party Consents.  The Company shall
have delivered to Buyer the consents listed on Schedule 9.3(f), if any.

 

(g)                                  Advisory Consents.  The Company shall have
delivered to Buyer evidence that the Company has obtained consent (including
Negative Consents) from (i) Managers representing at least ninety percent (90%)
of assets under management of all Managers as of the Effective Date and (ii)
Persons listed on Schedule 9.3(g)(ii) (“Sponsors”) representing at

 

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least ninety percent (90%) of the aggregate revenue of all Sponsors for the
twelve (12) month period ended March 31, 2014.

 

(h)                                 No Material Adverse Effect.  There shall not
have occurred any circumstance, event, change or effect that has had, or would
reasonably be expected to have, together with all other circumstances, events,
changes and effects, a Material Adverse Effect.

 

(i)                                     Cancellation of Company Warrants.  The
Company shall have delivered to Buyer evidence reasonably satisfactory to Buyer
that all Company Warrants have been cancelled at or prior to Closing.

 

Section 9.4                                                           
Conditions to Obligations of Buyer, Merger Sub and the Company to Effect the
Merger.

 

(a)                                 The obligation of Buyer and Merger Sub to
consummate the Merger shall be subject to the approval of the Merger in
accordance with the applicable provision of the DGCL (disregarding any failure
of such approval to be obtained as a result of a breach of the covenants of
Buyer and Merger Sub set forth in Section 7.14).

 

(b)                                 The obligation of Company to consummate the
Merger shall be subject to the approval of the Merger in accordance with the
applicable provision of the DGCL (disregarding any failure of such approval to
be obtained as a result of a breach of the covenants of the Company set forth in
Section 7.14).

 

ARTICLE X

INDEMNIFICATION

 

Section 10.1                                                     Survival.  The
representations and warranties made by the Company in this Agreement shall
survive the Closing until the eighteen (18) month anniversary of the Closing
Date; provided, however, that (a) the Fundamental Representations shall survive
the Closing and shall continue in full force and effect indefinitely and (b) the
representations and warranties set forth in Section 4.13 (Taxes) shall survive
and continue in full force and effect until ninety (90) days after expiration of
the applicable statute of limitations (including any applicable extensions). 
The covenants contained in this Agreement shall continue in full force and
effect indefinitely or for the shorter period explicitly referenced therein;
provided, that, with respect to the covenants of the parties contained herein
that by their terms are to be performed in whole or in part, or that prohibit
actions, prior to the Closing, claims for indemnification in respect of any
breach thereof shall survive until the date that is eighteen (18) months after
the Closing.  Notwithstanding the foregoing, if any time on or prior to the
expiration date referred to this Section 10.1, any Indemnified Party delivers a
written notice alleging the existence of an inaccuracy in or a breach of any of
such representations and warranties and asserting a claim for recovery under
Section 10.2, Section 10.3, and Section 10.4, as applicable, based on such
alleged inaccuracy or breach, then such representation or warranty shall survive
solely as to such claim until such time as such claim is fully and finally
resolved.  Solely for purposes of this Article X, the representations and
warranties contained in Article IV, Article V and Article VI are made as of the
Effective Date and as of the Closing Date.

 

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Section 10.2                                                     Indemnification
by Securityholders.  Subject to the limitations contained in this Article X,
from and after the Closing, the Securityholders, severally (and not jointly) pro
rata in proportion to their Transaction Percentage, shall indemnify and hold
harmless (such obligations to indemnify and hold harmless are referred to herein
from time to time as “Indemnification Obligations”), Buyer and the Surviving
Company (the “Buyer Indemnified Parties”) from and against any and all losses,
damages, liabilities, deficiencies, claims, interest, awards, judgments,
penalties, costs and expenses (including attorneys’ fees, costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (collectively, “Losses”), actually incurred by the Buyer Indemnified
Parties arising out of:

 

(a)                                 after giving effect to the last sentence of
Section 10.1, any breach of any representation or warranty made by the Company
contained in this Agreement;

 

(b)                                 any breach of any covenant or agreement by
the Company contained in this Agreement and required to be performed prior to
the Closing;

 

(c)                                  any Indebtedness (other than Excluded Trade
Obligations) or Transaction Expenses to the extent not included in the
determination of Transaction Consideration;

 

(d)                                 any claims by any holder of Capital Stock or
any other equity interests of the Company as a result of the exercise of such
holder’s appraisal rights (net of any amount that would otherwise have been
payable to such holder exercising any appraisal rights);

 

(e)                                  after giving effect to the last sentence of
Section 10.1, any fraud of any Acquired Company;

 

(f)                                   Indemnified Taxes;

 

(g)                                  any Third Party Claim to the extent that an
Acquired Company is liable to a third party as a result of the Data Security
Matter;

 

(h)                                 the items set forth in Schedule 10.2(h); or

 

(i)                                     the Identified Matter.

 

Section 10.3                                                     Indemnification
by the Selling Securityholders.  Subject to the limitations set forth in this
Article X; each Selling Securityholder shall have Indemnification Obligations
for any Losses suffered by a Buyer Indemnified Party based upon, arising out of
or by reason of:

 

(a)                                 after giving effect to the last sentence of
Section 10.1, any breach of, or inaccuracy in representation or warranty
contained in Article VI (solely for such Selling Securityholder and not for any
other Selling Securityholder);

 

(b)                                 any breach of a covenant or agreement by
such Selling Securityholder, whether acting on its own behalf or otherwise
(solely with respect to such Selling Securityholder and not for any other
Selling Securityholder), contained in this Agreement; or

 

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(c)                                  any fraud of such Selling Securityholder.

 

Section 10.4                                                     Indemnification
by Buyer.  Subject to the limitations contained in this Article X, from and
after the Closing, Buyer shall indemnify and hold harmless the Securityholders,
and each of their respective officers, directors, employees, agents and
representatives (the “Company Indemnified Parties”) from and against any and all
Losses incurred by the Company Indemnified Parties arising out of:

 

(a)                                 after giving effect to the last sentence of
Section 10.1, any breach of any representation or warranty made by Buyer or
Merger Sub contained in this Agreement; or

 

(b)                                 any breach of any covenant or agreement by
Buyer, Merger Sub or the Surviving Company contained in this Agreement.

 

Section 10.5                                                     Third Party
Claims.

 

(a)                                 In order for a Buyer Indemnified Party or a
Company Indemnified Party (each, an “Indemnified Party”) to be entitled to be
indemnified and held harmless as provided for under this Article X in respect of
a claim, action or demand made by any third party against the Indemnified Party
(a “Third Party Claim”), such Indemnified Party shall deliver notice thereof to
the Securityholder Representative, on behalf of the Securityholders, or to
Buyer, as applicable (the “Indemnifying Party”); provided, however, that no
delay or failure on the part of an Indemnified Party in notifying the
Securityholder Representative or Buyer, as the case may be, shall relieve an
Indemnifying Party from its obligations hereunder unless the Indemnifying Party
is thereby prejudiced (and then solely to the extent of such prejudice).

 

(b)                                 The Indemnifying Party shall have the right,
upon written notice to the Indemnified Party within thirty (30) days of receipt
of notice from the Indemnified Party of the commencement of such Third Party
Claim, to assume the defense thereof at the expense of the Indemnifying Party
with counsel selected by the Indemnifying Party; provided, that the Indemnifying
Party shall not have the right to assume the defense of a Third Party Claim if
(i) such Third Party Claim relates to or arises in connection with any criminal
proceeding, action, indictment, allegation or investigation, (ii) such Third
Party Claim relates to or arises in connection with any non-criminal Proceeding
by a Governmental Authority that would reasonably be expected to materially and
adversely affect the operations or conduct of Buyer and its Affiliates
(including the Company), (iii) such Third Party Claim seeks an injunction or
equitable relief against any Indemnified Party, (iv) upon petition by the
Indemnified Party, a court of competent jurisdiction rules that the Indemnifying
Party failed or is failing to vigorously defend such Third Party Claim, (v) the
Indemnified Party reasonably believes that the Losses relating to such Third
Party Claim could exceed the maximum amount that such Indemnified Party could
then be entitled to recover under the applicable provisions of this Article X,
or (vi) the Indemnifying Party does not provide the Indemnified Party with
reasonable evidence that the Indemnifying Party has the financial resources to
defend such Third-Party Claim and to fulfill its indemnification obligations
under this Article X.  If the Indemnifying Party does not expressly elect to
assume the defense of such Third Party Claim within the time period set forth in
this Section 10.5(b) or if the Indemnifying Party is not permitted to assume the
defense, the Indemnified Party shall have the right to assume the defense of
such Third Party Claim;

 

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provided, however, that in no event shall the Indemnified Party enter into any
settlement or compromise or consent to the entry of any judgment with respect to
such Third Party Claim without the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld or delayed) if such
settlement, compromise or consent would result in the Indemnifying Party
becoming liable for an indemnification claim hereunder.  If the Indemnifying
Party assumes the defense of any Third Party Claim, the Indemnified Party shall
be entitled to participate in such defense with counsel reasonably acceptable to
the Indemnifying Party (and at such Indemnified Party’s sole cost and expense)
and the Indemnified Party shall, at the Indemnifying Party’s sole cost and
expense, cooperate with the Indemnifying Party in such defense and make
available to the Indemnifying Party all witnesses, pertinent records, materials
and information in the Indemnified Party’s possession or under the Indemnified
Party’s control relating thereto as is reasonably required by the Indemnifying
Party.  If the Indemnifying Party assumes the defense of any Third Party Claim,
the Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (not to be unreasonably withheld, conditioned or delayed),
enter into any settlement or compromise or consent to the entry of any judgment
with respect to such Third Party Claim if such settlement, compromise or
judgment (A) involves a finding or admission of wrongdoing by the Indemnified
Party, (B) does not include an unconditional written release by the claimant or
plaintiff of the Indemnified Party from all liability in respect of such Third
Party Claim or (C) imposes equitable remedies or any obligation on the
Indemnified Party other than solely the payment of money damages for which the
Indemnified Party will be indemnified and held harmless hereunder.

 

(c)                                  This Section 10.5 shall not apply to any
controversies regarding Tax Matters, which shall be governed exclusively by
Section 8.2.

 

(d)                                 This Section 10.5 shall not apply to any
controversies regarding appraisal rights, which shall be governed exclusively by
Section 3.3.

 

Section 10.6                                                     Limitations on
Indemnification.  Notwithstanding anything to the contrary contained in this
Agreement:

 

(a)                                 The Securityholders shall have no
Indemnification Obligations and the Buyer Indemnified Parties shall have no
recourse against the Escrow Fund for a claim pursuant to Section 10.2(a) or
Section 10.3(a) until such time as the total amount of all Losses in respect of
all claims exceed $330,000 (the “Deductible”) in the aggregate, and then only in
respect of such excess; provided, however, that the limitations set forth in
this Section 10.6(a) shall not apply to claims under Section 10.2(a) and Section
10.3(a) in respect of any breach or inaccuracy of a Fundamental Representation.

 

(b)                                 Recourse by the Buyer Indemnified Parties
against the proceeds then remaining in the Escrow Fund shall be the Buyer
Indemnified Parties’ sole and exclusive remedy in respect of the
Securityholders’ Indemnification Obligations for the matters referred to in
Section 10.2(a), Section 10.2(g) and Section 10.2(i); provided, however, that
the limitation contained in this sentence shall not apply to claims under
Section 10.2(a) in respect of any breach or inaccuracy of a Fundamental
Representation.

 

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(c)                                  To the extent that the Buyer Indemnified
Parties are entitled to recovery under Section 10.2(a) in excess of proceeds
then remaining in the Escrow Fund, (i) the Buyer Indemnified Parties shall not
be entitled to recover amounts directly from the Securityholders under this
Article X in respect of the Indemnification Obligations of the Securityholders
until such time as the Escrow Fund has been fully exhausted and (ii) for each
such Loss a Securityholder shall only be liable for its Transaction Percentage
of such Loss.  In no event shall the aggregate Indemnification Obligations of a
Securityholder exceed the portion of the Transaction Consideration actually paid
to such Securityholder (with respect to the Initial Stock Sale, the Merger, or
both, as applicable and without any reduction for Taxes payable by such
Securityholder in respect of the Transaction Consideration), except solely in
the case of fraud committed by such Selling Securityholder.  No Securityholder
is liable for breach of a representation, warranty or covenant of any other
Securityholder.

 

(d)                                 Each Indemnified Party acknowledges and
agrees that, for purposes hereof, Losses shall be calculated based on the amount
of Loss that remains after deducting therefrom (i) any insurance proceeds
actually received (currently or in the future), (ii) any Tax benefits actually
recognized as a result of the Loss as a cash refund or reduction in cash Taxes
payable by the Indemnified Party, in each case, in either (x) the taxable year
that includes the incurrence of the Loss that gave rise to the claim or (y) the
taxable year immediately preceding such taxable year described in the preceding
clause (x), and (iii) any indemnity, contribution or other similar payment
received or to be received by an Indemnified Party with respect thereto.

 

(e)                                  Notwithstanding anything to the contrary
elsewhere in this Agreement, no party shall, in any event, be liable to any
other Person for any Losses pursuant to this Article X that are consequential,
incidental, indirect, special or punitive damages, including loss of future
revenue, income or profits or loss of opportunity or a multiple of revenue,
income, profits or any other amount, except (i) to the extent the same are
required to be paid to a third party pursuant to a Third Party Claim or (ii) to
the extent such Losses being measured arise from the termination or breach of a
Contract, lost revenue, income or profits directly attributable to such Contract
may be included in the determination of Losses relating thereto.

 

(f)                                   No Securityholder shall have any
Indemnification Obligations hereunder for any Losses arising out of a breach of
or inaccuracy of any representation, warranty, covenant or agreement set forth
in this Agreement (and the amount of any Losses incurred in respect of such
breach or inaccuracy shall not be included in the calculation of any limitations
on indemnification set forth herein) to the extent the matter giving rise to
such breach or inaccuracy was included in the determination of the Final
Adjustment Amount or Transaction Expenses for purposes of determining
adjustments to the Transaction Consideration.

 

(g)                                  The Indemnified Parties’ sole remedy for
Losses with respect to Taxes (including, but not limited to, any breach of a
representation or warranty contained in Section 4.13), other than Losses
incurred as a result of any breach of a representation or warranty contained in
Section 4.13(g), Section 4.13(h), Section 4.13(i), Section 4.13(m) and Section
4.20 shall be limited to Taxes of the Acquired Companies for Pre-Closing Tax
Periods (or the portion of an Straddle Period ending on the Closing Date as
determined in accordance with Section 8.7.

 

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(h)                                 If an Indemnified Party is entitled to
indemnification under more than one clause or subclause of this Agreement with
respect to Losses, then such Indemnified Party shall be entitled to only one
indemnification or recovery for such Losses to the extent it arises out of the
same set of circumstances and events; it being understood that this Section
10.6(h) is solely to preclude a duplicate recovery by an Indemnified Party.

 

(i)                                     The Securityholders shall have no
Indemnification Obligations and the Buyer Indemnified Parties shall have no
recourse against the Escrow Fund for a claim pursuant to Section 10.2(h) in
excess of (x) $100,000 minus (y) any amounts paid by the Company prior to
Closing or included as a current liability in Final Closing Net Working Capital
(other than the fees and costs set forth in Schedule 10.6(i)).

 

Section 10.7                                                     Escrow Fund. 
Subject to the last sentence of Section 10.6(c), in the event that any Buyer
Indemnified Party is entitled to receive any amount from the Securityholders
pursuant to this Article X, such Buyer Indemnified Party shall be entitled to
seek recovery from the Escrow Fund for such amounts.

 

Section 10.8                                                     Materiality. 
For purposes of determining the amount of Losses under this Article X (but, for
the avoidance of doubt, not for purposes of determining breach of any
representation or warranty), each representation or warranty in this Agreement
shall be interpreted without reference or giving effect to any materiality
qualification or limitation set forth in such representation and warranty,
including the terms “material,” “materiality,” “in all material respects,”
“Material Adverse Effect” (which instead shall be read as any adverse effect),
“immaterial” or “materially.”

 

Section 10.9                                                     Exclusive
Remedy.  Except for (a) specific performance or injunctive relief, (b)
determination of the Final Adjustment Amount (which is governed by Section
3.6(c)), or (c) determination of any NOL Tax Loss (which is governed by Section
8.1(c)), from and after the Effective Time, the rights and obligations of the
parties set forth in this Article X shall be the sole and exclusive remedy of
the Indemnified Parties (whether at law or in equity) with respect to any breach
of any representation, warranty, covenant or agreement set forth in this
Agreement; provided, that nothing contained in this Agreement shall limit the
rights of any party against any Person for fraud by such Person; provided,
further, that nothing shall give rise to any right on the part of any
Indemnified Party, after the consummation of the transactions contemplated
hereby, to rescind this Agreement or any of the transactions contemplated
hereby.

 

Section 10.10                                              Tax Treatment of
Indemnity Payments.  The parties hereto and each Indemnified Party and
Indemnifying Party agree to treat any indemnity payment made pursuant to this
Article X as an adjustment to the Transaction Consideration for federal, state,
local and foreign income tax purposes.

 

ARTICLE XI
TERMINATION

 

Section 11.1                                                     Termination. 
This Agreement may be terminated at any time prior to the Closing as follows:

 

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(a)                                 by mutual written consent of Buyer and the
Company;

 

(b)                                 (i) by the Company if Buyer or Merger Sub
breaches or fails to perform any of its representations, warranties or covenants
contained in this Agreement or any Ancillary Agreement and such breach or
failure to perform (A) would give rise to the failure of a condition set forth
in Section 9.2, (B) cannot be or has not been cured within thirty (30) days
following delivery of written notice of such breach or failure to perform and
(C) has not been waived by the Company or (ii) by Buyer, if the Company breaches
or fails to perform in any respect any of its representations, warranties or
covenants contained in this Agreement or any Ancillary Agreement and such breach
or failure to perform (x) would give rise to the failure of a condition set
forth in Section 9.3, (y) cannot be or has not been cured within thirty (30)
days following delivery of written notice of such breach or failure to perform
and (z) has not been waived by Buyer;

 

(c)                                  by the Company or Buyer if the Transactions
shall not have been consummated by October 31, 2014; provided that the right to
terminate this Agreement under this Section 11.1(c) shall not be available to
any party whose material breach of this Agreement has been a principal cause of
or resulted in the failure of the Merger to occur on or before such date and
such action or failure to act constitutes breach of this Agreement;

 

(d)                                 by Buyer providing written notice to the
Company within ten (10) Business Days after delivery of a Schedule Update
pursuant to Section 7.3(b); or

 

(e)                                  by either the Company or Buyer in the event
that any Governmental Authority (including any court of competent jurisdiction)
shall have issued an Order restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and nonappealable.

 

The party seeking to terminate this Agreement pursuant to this Section 11.1
(other than Section 11.1(a)) shall give prompt written notice of such
termination to the other parties.

 

Section 11.2                                                     Effect of
Termination.  In the event of termination of this Agreement as provided in
Section 11.1, this Agreement shall forthwith become void and of no further force
and effect, and there shall be no duties, liabilities or obligations of any kind
on the part of any party to the other parties based either upon this Agreement
or the transactions contemplated hereby, except (a) for the provisions of
Section 7.5 relating to confidentiality, Section 7.7 relating to public
announcements, Section 7.12(f) relating to reimbursement of certain expenses,
Section 12.2 relating to fees and expenses generally, Section 12.5 relating to
notices, Section 12.8 relating to third-party beneficiaries, Section 12.9
relating to governing law, Section 12.10 relating to submission to jurisdiction
and this Section 11.2 and (b) that nothing herein shall relieve any party from
liability for such party’s fraud or willful or intentional breach of this
Agreement prior to such termination.  For the avoidance of doubt, the parties
hereto confirm that the failure of the Securityholders to receive the
Transaction Consideration payable to them hereunder as a result of a willful
breach by Buyer and/or Merger Sub of this Agreement shall be taken into account
in the calculation of damages suffered by Company as a result thereof.

 

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ARTICLE XII
GENERAL PROVISIONS

 

Section 12.1                                                     Securityholder
Representative.

 

(a)                                 As of the Effective Date, each
Securityholder irrevocably appointed the Securityholder Representative as such
Securityholder’s representative, attorney-in-fact and exclusive agent, with full
power of substitution to act in the name, place and stead to act on behalf of
such Securityholder in any amendment of or litigation or arbitration involving
this Agreement, including defending, negotiating, settling or otherwise dealing
with claims under Article X hereof, and to do or refrain from doing all such
further acts and things, and to execute all such documents, as such
Securityholder Representative shall deem necessary or appropriate in conjunction
with any of the transactions contemplated by this Agreement and each Ancillary
Agreement (subject to the foregoing limitation), including the power:

 

(i)                                     to take all action necessary or
desirable in connection with the waiver of any condition to the obligations of
the Securityholders to consummate the transactions contemplated by this
Agreement and each Ancillary Agreement;

 

(ii)                                  to negotiate, execute and deliver each
Ancillary Agreement, statements, certificates, notices, approvals, extensions,
waivers, undertakings, amendments and other documents required or permitted to
given in connection with the consummation of the transactions contemplated by
this Agreement and each Ancillary Agreement (it being understood that such
Securityholder shall execute and deliver any such documents which the
Securityholder Representative agrees to execute);

 

(iii)                               to give and receive all notices and
communications to be given or received under this Agreement and to receive
service of process in connection with any claims under this Agreement and the
transactions contemplated hereby; and

 

(iv)                              to take all actions which under this Agreement
and the transactions contemplated hereby may be taken by the Securityholders and
to do or refrain from doing any further act or deed on behalf of the
Securityholder which the Securityholder Representative deems necessary or
appropriate in its sole discretion relating to the subject matter of this
Agreement and the transactions contemplated hereby as fully and completely as
such Securityholder could do if personally present.

 

Notwithstanding the foregoing, the Securityholder Representative shall have no
obligation to act on behalf of the Securityholder, except as expressly provided
herein and in  each Ancillary Agreement, and for purposes of clarity, there are
no obligations of the Securityholder Representative in any ancillary agreement,
schedule, exhibit or the Disclosure Schedule.

 

(b)                                 Certain Securityholders have entered into a
Security Representative Letter Agreement to provide direction to the
Securityholder Representative in connection with the performance of its services
under this Agreement and each Ancillary Agreement (such Securityholders,
including their individual representatives, collectively hereinafter referred to
as the “Advisory Group”). Neither the Securityholder Representative (together
with its members, managers, directors, officers, contractors, agents and
employees) nor any member of the

 

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Advisory Group (collectively, the “Securityholder Representative Group”) will be
liable to the Securityholders for any action taken or omitted by it as permitted
under this Agreement and each Ancillary Agreement and the transactions
contemplated hereby and thereby, except if such action is taken or omitted in
bad faith, by willful misconduct or due to gross negligence.  The Securityholder
Representative will also be fully protected against the Securityholders in
relying upon any signature, written notice, demand, certificate or document that
he in good faith believes to be genuine (including facsimiles thereof) and shall
be entitled to reasonably assume that a signatory has proper authorization to
sign on behalf of the applicable Securityholder or other party.

 

(c)                                  The Securityholders agree, in accordance
with their respective Transaction Percentage, to indemnify and defend the
Securityholder Representative Group for, and to hold the Securityholder
Representative Group harmless against, any loss, liability, cost, fee, claim,
damage, judgment, amount in settlement or expense (including fees, disbursements
and costs of counsel and other skilled professionals and in connection with
seeking recovery from insurers) incurred without willful misconduct, bad faith,
or gross negligence or material breach of the Securityholder Representative
Agreement on the part of the Securityholder Representative Group, arising out of
or in connection with the Securityholder Representative Group’s carrying out its
duties under this Agreement and each Ancillary Agreement and the transactions
contemplated hereby and thereby, including costs and expenses (which may be
funded first, from the Expense Fund, second, from any amount payable to the
Securityholders pursuant to Section 3.7 or any portion of the Escrow Fund
payable to the Securityholders pursuant to the terms of this Agreement and each
Ancillary Agreement, if any, in either case, solely if and to the extent not
subject to any claims for indemnification by any Buyer Indemnified Party, and
third, directly from the Securityholders based on their respective Transaction
Percentage) of successfully defending the Securityholder Representative against
any claim of liability with respect thereto.  The Securityholders acknowledge
that the Securityholder Representative shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the exercise or
performance of any of its powers, rights, duties or privileges or administration
of its duties. The Securityholder Representative may consult with counsel of its
own choice and will have full and complete authorization and protection for any
action taken and suffered by it in good faith and in accordance with the opinion
of such counsel.  The powers, immunities and rights to indemnification granted
to the Securityholder Representative and the Advisory Group  hereunder: (i) are
coupled with an interest and shall be irrevocable and survive the death,
incompetence, bankruptcy or liquidation of the respective Securityholder and
shall be binding on any successor thereto, and (ii) shall survive the delivery
of an assignment by any Securityholder of the whole or any fraction of his, her
or its interest in the Escrow Fund.

 

(d)                                 In acting hereunder, the Securityholder
Representative shall act on behalf of all Securityholders and not on behalf of
any one Securityholder.

 

(e)                                  If the Securityholder Representative
becomes unable to serve as Securityholder Representative, such other Person or
Persons as may be designated by a majority of the Securityholders, based on each
Securityholder’s Transaction Percentage, and shall succeed as the Securityholder
Representative. The immunities and rights to indemnification shall survive the
resignation or removal of the Securityholder Representative or any member of the
Advisory Group and the Closing and/or any termination of this Agreement and the
Ancillary Agreements.

 

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Section 12.2                                                     Fees and
Expenses.  Except as otherwise specifically provided herein, all fees and
expenses incurred in connection with or related to this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby shall
be paid by the party incurring such fees or expenses, whether or not such
transactions are consummated; provided, however, that if the Merger is
consummated, all Transaction Expenses not paid by the Company prior to the
Effective Time shall be paid by the Surviving Company.

 

Section 12.3                                                     Amendment and
Modification.  This Agreement may be amended, modified or supplemented in
writing by the Company, the Selling Securityholders and Buyer at any time prior
to the Closing Date (notwithstanding any stockholder approval); provided,
however, that after the approval of this Agreement by the holders of Capital
Stock in accordance with the DGCL has been obtained, no amendment shall be made
which pursuant to applicable Law requires further approval by the holders of
Capital Stock without such further approval.  After Closing, this Agreement may
be amended, modified or supplemented in writing by Buyer and the Securityholder
Representative.

 

Section 12.4                                                     Waiver.  At any
time prior to the Effective Time, Buyer may, with respect to the Company, and
the Company may, with respect to Buyer, and at any time after the Effective
Time, Buyer may, with respect to the Securityholders, and the Securityholder
Representative may, with respect to Buyer, by action taken in writing, to the
extent permitted by applicable Law, (a) waive any inaccuracies in the
representations and warranties of the other parties contained in this Agreement
or any document delivered pursuant hereto or (b) subject to applicable Law,
waive compliance with any of the agreements or conditions of the other parties
contained herein.  Any agreement on the part of a party to any such waiver shall
be valid only if set forth in a written instrument executed and delivered by a
duly authorized officer on behalf of such party.  No failure or delay of any
party in exercising any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power, or
any course of conduct, preclude any other or further exercise thereof or the
exercise of any other right or power.

 

Section 12.5                                                     Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed duly given (a) on the date of delivery if delivered personally, or if by
facsimile, upon written confirmation of receipt by facsimile, or otherwise, (b)
on the first (1st) Business Day following the date of dispatch if delivered
utilizing a next-day service by a recognized next-day courier, (c) on the
earlier of confirmed receipt or the fifth (5th) Business Day following the date
of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid or (d) when sent, if sent by electronic mail before
5:00 p.m. on a Business Day at the location of receipt and otherwise the next
following Business Day.  All notices hereunder shall be delivered to the
addresses set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:

 

(a)                                 if to Buyer, Merger Sub or the Surviving
Company, to:

 

Envestnet, Inc.

35 East Wacker Drive, Suite 2400

Chicago, IL  60601

 

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Attention:  Shelly O’Brien, Patrick Marr, and Viggy Mokkarala

Facsimile:  (312) 827-2801
Email:  shelly.obrien@envestnet.com

patrick.marr@envestnet.com

viggy.mokkarala@envestnet.com

 

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

 

Mayer Brown LLP

71 South Wacker Drive

Chicago, IL  60606

Attention:  Edward S. Best, Nina L. Flax and Kevin D. Sherlock

Facsimile:  (312) 706-2801

Email:  EBest@mayerbrown.com

NFlax@mayerbrown.com

KSherlock@mayerbrown.com

 

if to Company, to:

 

Placemark Holdings, Inc.

16633 Dallas Parkway

Suite 700

Addison, Texas 75001

Attention:  General Counsel

Facsimile:  (972) 404-4505

Email:  john.ehinger@placemark.com

 

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

 

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention:  Martin Carmichael and Amber R.E. Dolman

Facsimile:  (617) 523-1231

Email:  MCarmichael@goodwinprocter.com

ADolman@goodwinprocter.com

 

if to a Selling Securityholder, to the address for such Selling Securityholder’s
set forth on Schedule I:

 

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

 

Goodwin Procter  LLP

Exchange Place

Boston, MA 02109

Attention:  Martin Carmichael and Amber R.E. Dolman

Facsimile:  (617) 523-1231

 

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Email:  MCarmichael@goodwinprocter.com

ADolman@goodwinprocter.com

 

if to the Securityholder Representative, to:

 

Fortis Advisors LLC

Attention:  Notice Department

Facsimile:  (858) 408-1843

Email:       notices@fortisrep.com

 

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

 

Goodwin Procter  LLP

Exchange Place

Boston, MA 02109

Attention:  Martin Carmichael and Amber R.E. Dolman

Facsimile:  (617) 523-1231

Email:  MCarmichael@goodwinprocter.com

ADolman@goodwinprocter.com

 

Section 12.6                                                    
Interpretation.  When a reference is made in this Agreement to a Section,
Article or Exhibit such reference shall be to a Section, Article or Exhibit of
this Agreement unless otherwise indicated.  The table of contents and headings
contained in this Agreement or in any Exhibit are for convenience of reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.  All words used in this Agreement will be construed to be of
such gender or number as the circumstances require.  Any capitalized terms used
in any Exhibit but not otherwise defined therein shall have the meaning as
defined in this Agreement.  All Exhibits annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth
herein.  The word “including” and words of similar import when used in this
Agreement will mean “including, without limitation,” unless otherwise specified.

 

Section 12.7                                                     Entire
Agreement.  This Agreement (including the Exhibits and Schedules hereto), the
Ancillary Agreements and the Confidentiality Agreement constitute the entire
agreement, and supersede all prior written agreements, arrangements,
communications and understandings and all prior and contemporaneous oral
agreements, arrangements, communications and understandings, among the parties
with respect to the subject matter of this Agreement.  No party to this
Agreement shall be under any legal obligation to enter into or complete the
transactions contemplated hereby unless and until this Agreement shall have been
executed and delivered by each of the parties.

 

Section 12.8                                                     No Third-Party
Beneficiaries.  Except as provided in Section 7.8 and Article X, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
other than the parties and their respective successors and permitted assigns any
legal or equitable right, benefit or remedy of any nature under or by reason of
this Agreement.

 

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Section 12.9                                                     Governing Law. 
This Agreement and all disputes or controversies arising out of or relating to
this Agreement or the transactions contemplated hereby shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without regard to the laws of any other jurisdiction that might be applied
because of the conflicts of laws principles of the State of Delaware.

 

Section 12.10                                              Submission to
Jurisdiction.  Each of the parties irrevocably agrees that any legal action or
proceeding arising out of or relating to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by any other party or its
successors or assigns may be brought and determined by the Court of Chancery of
the State of Delaware, and each of the parties hereby irrevocably submits to the
exclusive jurisdiction of the aforesaid court for itself and with respect to its
property, generally and unconditionally, with regard to any such action or
proceeding arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any action, suit or proceeding
relating thereto except in such courts).  Each of the parties further agrees to
accept service of process in any manner permitted by such court.  Each of the
parties hereby irrevocably and unconditionally waives, and agrees not to assert,
by way of motion or as a defense, counterclaim or otherwise, in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure
lawfully to serve process, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such court
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by Law, that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper or (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts.

 

Section 12.11                                              Assignment;
Successors.

 

(a)                                 Except as provided in Section 12.11(b),
neither this Agreement nor any of the rights, interests or obligations under
this Agreement may be assigned or delegated, in whole or in part, by operation
of Law or otherwise, by any party without (i) prior to the Effective Time, the
prior written consent of Buyer (in the case of an assignment by the Company) or
the Company (in the case of an assignment by Buyer or Merger Sub) and (ii) after
the Effective Time, the prior written consent of Buyer (in the case of an
assignment by the Securityholder Representative) or the Securityholder
Representative (in the case of an assignment by Buyer or Merger Sub), and any
such assignment without such prior written consent shall be null and void;
provided, however, that that no assignment shall limit the assignor’s
obligations hereunder.  Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.

 

(b)                                 Notwithstanding anything in Section 12.11(a)
to the contrary, without the prior written consent of the Company, prior to the
Stock Sale Closing Time Buyer may assign to its right to purchase the Acquired
Stock pursuant to Section 2.1 to a wholly-owned subsidiary of Buyer (other than
Merger Sub) (such subsidiary, the “Stock Sale Purchaser”); provided, that, (i)
pursuant to such assignment, the Stock Sale Purchaser makes the same
representations and warranties made by Merger Sub pursuant to Article IV, which
representations and warranties

 

88

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shall be deemed representations and warranties of Merger Sub for purposes of
Section 9.2(a) and Section 10.4(a) and (ii) such assignment shall not relieve
Buyer of any of its obligations hereunder.

 

Section 12.12                                              Enforcement.  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 of the parties
shall be entitled to specific performance of the terms hereof, including an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Court of Chancery
of the State of Delaware, this being in addition to any other remedy to which
they are entitled at law or in equity.  Each of the parties further hereby
waives (a) any defense in any action for specific performance that a remedy at
law would be adequate and (b) any requirement under any Law to post security as
a prerequisite to obtaining equitable relief.

 

Section 12.13                                              Currency.  All
references to “dollars” or “$” or “US$” in this Agreement or any Ancillary
Agreement refer to United States dollars, which is the currency used for all
purposes in this Agreement and any Ancillary Agreement.

 

Section 12.14                                              Severability. 
Whenever possible, each provision or portion of any provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable Law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.

 

Section 12.15                                              Waiver of Jury
Trial.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 12.16                                              Counterparts.  This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same instrument and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.

 

Section 12.17                                              Electronic
Signature.  This Agreement may be executed by facsimile signature or any other
form of electronic transmission of signature and a facsimile or any other form
of electronically transferred signature shall constitute an original for all
purposes.

 

Section 12.18                                              Time of Essence. 
Time is of the essence with regard to all dates and time periods set forth or
referred to in this Agreement.

 

Section 12.19                                              No Presumption
Against Drafting Party.  Each of Buyer, Merger Sub, the Securityholder
Representative and the Company acknowledges that each party to this Agreement
has been represented by counsel in connection with this Agreement and the

 

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transactions contemplated by this Agreement.  Accordingly, any rule of Law or
any legal decision that would require interpretation of any claimed ambiguities
in this Agreement against the drafting party has no application and is expressly
waived.

 

Section 12.20               Effectiveness of Amendment and Restatement.  This
Agreement amends and restates certain provisions of the Original Agreement and
restates the terms of the Original Agreement in their entirety.  All amendments
to the Original Agreement effected by this Agreement, and all other covenants,
agreements, terms and provisions of this Agreement, shall have effect as of the
Effective Date unless expressly stated otherwise.  This Agreement shall be
effective as of the date that copies hereof have been executed and delivered
upon execution by each of the parties hereto.

 

[The remainder of this page is intentionally left blank.]

 

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

 

 

 

ENVESTNET, INC.

 

 

 

 

 

By:

/s/ Judson Bergman

 

Name:

Judson Bergman

 

Title:

Chairman and Chief Executive Officer

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

POSEIDON MERGER CORP.

 

 

 

 

 

By:

/s/ Judson Bergman

 

Name:

Judson Bergman

 

Title:

President

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

PLACEMARK HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Levon Chertavian, Jr.

 

Name:

Levon Chertavian, Jr.

 

Title:

Chief Executive Officer

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

FORTIS ADVISORS LLC

 

(solely in its capacity as the Securityholder Representative)

 

 

 

 

 

By:

/s/ Ryan Simkin

 

Name:

Ryan Simkin

 

Title:

Managing Director

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

ASCENT VENTURE PARTNERS IV-A, L.P.

 

 

 

 

 

 

By:

Ascent Venture Management IV-A, L.P.,

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brian Girvan

 

 

 

 

 

 

Name:

Brian J. Girvan

 

 

 

 

 

 

Title:

Member

 

 

 

 

 

 

 

 

ASCENT VENTURE PARTNERS IV, L.P.

 

 

 

 

 

By:

Ascent Venture Management IV, L.P.,

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brian Girvan

 

 

 

 

 

 

Name:

Brian J. Girvan

 

 

 

 

 

 

Title:

Managing Member

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

NORTH HILL VENTURES II, L.P.

 

 

 

 

 

By:

North Hill Ventures II, G.P., L.L.C.,

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

By:

/s/ Benjamin H. Malka

 

 

 

 

 

 

Name:

Benjamin H. Malka

 

 

 

 

 

 

Title:

General Partner

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

ROYAL BANK OF CANADA

 

 

 

 

 

 

 

 

By:

/s/ David Unsworth

 

 

 

 

 

 

Name:

David Unsworth

 

 

 

 

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Bessie Petroff

 

 

 

 

 

 

Name:

Bessie Petroff

 

 

 

 

 

 

Title:

Vice President

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

FLYBRIDGE CAPITAL PARTNERS I, L.P.

 

 

 

 

 

By:

Flybridge Capital Partners G.P. I, L.L.C.

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

By:

/s/ Charles M. Hazard, Jr.

 

 

 

 

 

 

Name:

Charles M. Hazard, Jr.

 

 

 

 

 

 

Title:

Member and Manager

 

 

 

 

 

 

 

 

FLYBRIDGE CAPITAL PARTNERS II, L.P.

 

 

 

 

 

By:

Flybidge Capital partners G.P. II, L.L.C.

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

By:

/s/ Charles M. Hazard, Jr.

 

 

 

 

 

 

Name:

Charles M. Hazard, Jr.

 

 

 

 

 

 

Title:

Member and Manager

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ Levon Chertavian, Jr,

 

 

Levon Chertavian, Jr,

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ Richard Dion

 

 

Richard Dion

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ Ronald Pruitt

 

 

Ronald Pruitt

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ Brian Bleasdell

 

 

Brian Bleasdell

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ William Webb

 

 

William Webb

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

 

 

 

/s/ Robert Mazzarella

 

 

Robert Mazzarella

 

[Signature Page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Alan Sislen

 

Alan Sislen

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Brett Rainey

 

Brett Rainey

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ John Ehinger

 

John Ehinger

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Matthew Lombardi

 

Matthew Lombardi

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Benjamin H. Malka

 

Benjamin H. Malka

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Shamez A. Kanji

 

Shamez A. Kanji

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ George Overholser

 

George Overholser

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Brett J. Rome

 

Brett J. Rome

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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

 

 

SELLING SECURITYHOLDERS:

 

 

 

 

 

/s/ Marcos Caro

 

Marcos Caro

 

[Signature page to Amended and Restated Acquisition Agreement]

 

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