Exhibit 10.2

 
ASSET PURCHASE AGREEMENT
 
INTERNET BROADCASTING SYSTEMS, INC.
 
AND
 
NEXSTAR BROADCASTING, INC.
 

 

 
 
 

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

 

TABLE OF CONTENTS
 
ARTICLE 1 ASSETS TO BE CONVEYED
1
1.1
Purchase and Sale of Assets
1
1.2
Excluded Assets
2
1.3
Assumption of Liabilities; Retained Liabilities
3
ARTICLE 2 PURCHASE PRICE
5
2.1
Purchase Price
5
2.2
Estimated Net Working Capital Statement; Closing Statement
5
2.3
Allocation
7
2.4
Accounts Receivable
7
2.5
Further Purchase Price Adjustments
7
ARTICLE 3 CLOSING
 
7
3.1
General Closing Procedures
7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER
7
4.1
Organization and Standing; Capitalization
8
4.2
Authorization and Binding Obligation
8
4.3
Absence of Conflicting Agreements; Consents
8
4.4
Litigation
8
4.5
Real Property
9
4.6
Contracts
9
4.7
Compliance with Laws
10
4.8
Governmental Consents
11
4.9
Taxes
11
4.1
Environmental Matters
11
4.11
Broker’s Fees
12
4.12
Insurance
12
4.13
Personal Property
12
4.14
Sufficiency of Assets
12
4.15
Financial Statements
13
4.16
Absence of Certain Changes
13
4.17
Absence of Undisclosed Liabilities
13
4.18
Employment Matters
13
4.19
Permits
16
4.2
Accounts Receivable
16
4.21
Accounts Payable
17
4.22
Claims Against Third Parties
16
4.23
Intellectual Property
16
4.24
Transactions with Affiliates
20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
20
5.1
Organizational and Standing
20
5.2
Authorization and Binding Obligation
20
5.3
No Conflicting Agreements or Required Consents
20
5.4
Litigation
20
5.5
Broker’s Fees
20
5.6
Financing
21
ARTICLE 6 COVENANTS
 
21
6.1
Certain Covenants
21
6.2
Pre-Closing Access
23
6.3
No Inconsistent Action
23
6.4
Exclusivity
24
6.5
Confidentiality
24
6.6
Further Assurances
24
6.7
Consents; Benefit of Agreements
24
6.8
Risk of Loss
25
6.9
Financing
25
6.1
Bulk Transfers
25
6.11
Conveyance Free and Clear of Encumbrances
25
ARTICLE 7 CONDITIONS PRECEDENT
25
7.1
To Buyer’s Obligations Regarding Closing
25
7.2
To Seller’s Obligations
26
ARTICLE 8 DOCUMENTS TO BE DELIVERED AT THE CLOSING
27
8.1
Documents to be Delivered by Seller
27
8.2
Documents to be Delivered by Buyer
29
ARTICLE 9 INDEMNIFICATION
29
9.1
Seller’s Indemnities
29
9.2
Buyer’s Indemnities
30
9.3
Procedure for Indemnification
30
9.4
Limitations
32
9.5
Certain Limitations
32
9.6
Survival
32
9.7
Exclusive Remedy following the Closing
32
9.8
Mitigation of Damages
33
9.9
Shareholder Representative
33
ARTICLE 10 TERMINATION RIGHTS
33
10.1
Termination
33
10.2
Termination Fee
34
10.3
Other Effects of Termination
35
ARTICLE 11 EMPLOYEES AND EMPLOYEE PLANS
35
11.1
Employees
35
11.2
Offer of Employment
35
11.3
No Assumption of Company Plans
36
11.4
Benefits Generally
36
11.5
Health & Welfare Benefits
36
11.6
401(k) Plan
36
11.7
Vacation and Sick Leave
37
11.8
Workers’ Compensation
37
11.9
COBRA Obligations
37
11.1
Past Service Credit
38
11.11
No Third Party Beneficiaries
39
11.12
Releases
39
ARTICLE 12 OTHER AGREEMENTS
39
12.1
Access to Books and Records and Records Retention
39
ARTICLE 13 OTHER PROVISIONS
40
13.1
Transfer Taxes and Expenses
40
13.2
Benefit and Assignment
40
13.3
Additional Documents
40
13.4
Entire Agreement; Schedules; Amendment; Waiver
40
13.5
Headings
41
13.6
Computation of Time
41
13.7
Governing Law
41
13.8
Venue
41
13.9
Attorneys’ Fees
41
13.1
Severability
41
13.11
Neutral Construction
41
13.12
Notices
41
13.13
No Recourse
42
13.14
Counterparts
42
13.15
Facsimile or PDF Signatures
42
ARTICLE 14 DEFINITIONS
43
14.1
Defined Terms
43
14.2
Miscellaneous Terms
53

 
 
 
 

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

 

SCHEDULES
 
Schedule 1.1(a)                                           Leased Real Property
Schedule 1.1(b)                                           Personal Property
Schedule 1.1(c)                                           Assumed Contracts
Schedule 2.2(a)                                           Net Working Capital
Example
Schedule 4.1                                           Seller’s Organization and
Standing
Schedule 4.3                                           Certain Seller Consents
Schedule 4.4                                           Litigation
Schedule 4.5(a)                                           Real Estate Leases –
Oral Agreements
Schedule 4.7                                           Compliance with Laws
Schedule 4.9(a)                                           Tax Filing Exceptions
Schedule 4.9(b)                                           Raised Tax Matters
Schedule 4.12                                           Insurance
Schedule 4.15                                           Financial Statements
Schedule 4.16                                           Absence of Certain
Changes
Schedule 4.17                                           Undisclosed Liabilities
Schedule 4.18(a)                                           Company Plans
Schedule 4.18(c)                                           Employment
Proceedings
Schedule 4.18(l)                                           Employee Payments
Schedule 4.18(o)                                           Recently Terminated
Employees
Schedule 4.20                                           Accounts Receivable
Exceptions
Schedule 4.21                                           Accounts Payable
Schedule 4.22                                           Claims Against Third
Parties
Schedule 4.23(a)                                           Excepted Intellectual
Property
Schedule 4.23(b)                                           Seller Owned
Intellectual Property
Schedule 4.23(d)                                           Customer Information
Exceptions
Schedule 4.23(k)                                           Public Software
Schedule 4.23(l)                                           Software Obligations
to Third Parties
Schedule 4.24                                           Affiliate Transactions
Schedule 6.1(a)                                           Capital Expenditures
Schedule 7.1(c)                                           Material Consents
Schedule 11.1                                           Employees
Schedule 11.9                                           COBRA Beneficiaries

 

 
 
 

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

 

ASSET PURCHASE AGREEMENT
 
This Asset Purchase Agreement (“Agreement”) is made as of the 12th day of March,
2014, between Internet Broadcasting Systems, Inc., a Delaware corporation
(“Seller”), and Nexstar Broadcasting, Inc., a Delaware corporation
(“Buyer”).  Reference herein to a “Party” shall refer to Buyer or Seller, as
appropriate, and reference to the “Parties” shall refer to Buyer and Seller
collectively.  Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in Article 14 of this Agreement.
 
RECITALS
 
WHEREAS, Seller is in the business of providing professional services and
licensed products for use in the operation, maintenance and monetization of web
sites and other digital properties for third parties (the “Business”); and
 
WHEREAS, subject to the terms and conditions of this Agreement, Seller desires
to sell, and Buyer desires to purchase, all of Seller’s assets and properties
used or held for use in the Business;
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Buyer, intending to be legally bound, hereby agree as follows:
 
ARTICLE 1
 
ASSETS TO BE CONVEYED
 
1.1 Purchase and Sale of Assets.  On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date, Seller shall sell, assign,
transfer, convey and deliver, free and clear of all Liens, other than Permitted
Liens, and Buyer will purchase from Seller, all of the assets, property and
rights of Seller, real and personal, tangible and intangible used or held for
use in the Business (collectively, the “Assets”), but excluding the Excluded
Assets.  The Assets shall include, but not be limited to:
 
(a) all right, title and interest held by Seller in and to the lease for
property set forth on Schedule 1.1(a) (the “Leased Real Property”) including
Seller’s interests, if any, in all improvements on such Leased Real Property,
and all easements or other appurtenances for the benefit of such Leased Real
Property;
 
(b) all equipment, furniture, fixtures, materials and supplies, fixed assets,
production equipment, Computer Hardware, computer servers, telephone systems,
cell phones, smart phones, personal data assistants, computers and similar
devices, tablets, leasehold improvements, inventories, spare parts, vehicles,
and other tangible personal property of every kind and description used in the
Business, including those fixed assets listed on Schedule 1.1(b), excluding any
such property disposed of or replaced in the Ordinary Course of Business
pursuant to the terms of this Agreement prior to the Closing Date (the “Personal
Property”);
 
(c) all Contracts (the “Assumed Contracts”), including those listed on Schedule
1.1(c), provided that, Buyer shall only assume the Assumed Contracts as in
effect on the date hereof;
 
(d) all of Seller’s right, title and interest in and to all Intellectual
Property, used in the operation of, used by, or related to the Business, in
whatever form or medium, including all goodwill associated therewith, including,
without limitation, the Material Intellectual Property, excepting only the
Excepted Intellectual Property;
 
(e) all Current Assets of Seller;
 
(f) all electronic or paper copies of all books and records related to the
Business, including without limitation proprietary information, financial data
and information, technical information and engineering data, operating manuals,
marketing and sales information, data, studies, records, reports, logs, ledgers,
files, correspondence, computer files, plans, diagrams, blueprints and
schematics for the Business and including computer readable disk or tape copies
of any items stored on computer files;
 
(g) all Permits of Seller used to conduct the Business, to the extent
transferable;
 
(h) all relationships with vendors, distributors, contractors, partners, agents,
and customers related to the Business;
 
(i) all claims (including, without limitation, warranty claims, remedies against
infringements of Intellectual Property and rights to protection of interests in
the Intellectual Property), deposits and prepaid expenses; and
 
(j) all goodwill associated with, and the going concern value of, the Assets and
the Business.
 
At the Closing, Seller shall use commercially reasonable efforts to cause
Seller’s Employees or agents who are the account holders for social media
accounts (including, but not limited to, Facebook, Twitter, and Instagram)
related to, or used in connection with, the Business to convey title, user names
and passwords to such accounts to individuals designated by Buyer.
 
1.2 Excluded Assets.  The Assets shall not include the following assets and any
rights, title and interest of Seller therein shall not be transferred to Buyer
hereunder (collectively, the “Excluded Assets”):
 
(a) all cash and cash equivalents of Seller;
 
(b) any insurance policies, and any cash surrender value in regard thereto, of
Seller;
 
(c) all Contracts that are terminated in compliance with the terms of this
Agreement or expire prior to the Closing;
 
(d) all Personal Property consumed or disposed of in the Ordinary Course of
Business between the Agreement Date and the Closing Date in compliance with the
terms of this Agreement;
 
(e) all Company Plans and the assets thereof (to the extent not assets owned by
any Employee);
 
(f) any interest in and to any refunds of Taxes of Seller for periods prior to
the Closing Date;
 
(g) the corporate records of Seller, including charters or other governance
documents, minute books and all books and records relating to the organization,
existence or ownership of Seller, and all books and records relating to Taxes,
including without limitation Tax Returns for periods prior to the Effective Date
and all supporting documentation therefor;
 
(h) all rights of Seller under this Agreement; and
 
(i) all rights, claims and causes of action relating to any of the foregoing or
any Retained Liability.
 
1.3 Assumption of Liabilities; Retained Liabilities.
 
(a) Subject to the terms and upon the conditions set forth in this Agreement, on
the Closing Date, Seller shall assign to Buyer and Buyer shall assume from
Seller, and thereafter pay or perform when due all liabilities and obligations
of Seller, other than Retained Liabilities, including without limitation (i) the
Accounts Payable and other Liabilities of Seller assumed pursuant to this
Agreement from and after the Effective Time, except those relating to the
Excluded Assets or Retained Liabilities, (ii) all Liabilities under the Assumed
Contracts, including the Assigned Employment Agreements, arising after the
Effective Time, (iii) any and all Tax with respect to the operation of the
Business arising out of, or attributable to, any period of time after the
Effective Time, and (iv) any Liabilities to the extent of the amount of credit
received by Buyer under Section 2.2 (collectively, the “Assumed
Liabilities”).  For avoidance of doubt, all performance and stay bonuses and
other compensation payable by Seller in connection with the Transaction will not
constitute Assumed Liabilities.
 
(b) Buyer does not assume, and will not be deemed by the execution and delivery
of this Agreement or the consummation of the Transaction to have assumed, the
Liabilities set forth in this Section 1.3(b), which shall have occurred, arisen
or existed on or before the Closing Date, which Liabilities, if ever in
existence, shall continue to be Liabilities of Seller (individually, a “Retained
Liability” and collectively, the “Retained Liabilities”):
 
(i) the debts, obligations or Liabilities of Seller arising out of any
Proceeding pending as of the Closing Date or arising out of or relating to
matters or events occurring on or prior to the Closing Date (whether or not such
claim is then asserted), including, without limitation, any claims for personal
injury (including worker’s compensation or otherwise) or property damage;
 
(ii) the contingent Liabilities of Seller of any kind arising or existing on or
prior to the Closing Date, including, but not limited to, claims or Proceedings,
which are currently or hereafter become, the subject of claims or Proceedings;
 
(iii) the debts, obligations or Liabilities of Seller for Taxes or assessments
(including interest and penalties thereon, if any) of any kind whatsoever
arising from, based upon or related to the sale, transfer or delivery of the
Assets pursuant to this Agreement;
 
(iv) the debts, obligations or Liabilities of Seller, whether absolute, accrued,
contingent or otherwise, for all Taxes arising or occurring prior to the Closing
Date, including, but not limited to any debts, obligations or Liabilities
arising out of, relating to, or resulting from and the Minnesota Department of
Revenue Audit disclosed on Schedule 4.9(b);
 
(v) except as expressly provided for herein or by Law, the debts, obligations or
Liabilities of Seller (A) to Solbright, Inc., (B) relating to the employment or
termination of employment of any Person by Seller, (C) relating to all amounts
accrued and payable to Transferred Employees as of the Closing Date by Seller in
accordance with Section 11.7, (D) at any time arising under or pursuant to or in
connection with any Company Plans at any time maintained, sponsored or
contributed to or required to be contributed to by Seller or any of its
Affiliates or with respect to which Seller or any of its Affiliates has or could
have any liability or obligation, including but not limited to (1) the Seller
2007 Amended and Restated Stock Option Plan, and (2) any payments for bonuses
under any Seller bonus plan that may be accrued and payable as of the Closing
Date, including the Internet Broadcasting Systems, Inc. Management Incentive
Plan adopted August 8, 2013, and (E) relating to Seller’s agreement with Doherty
for human resources services;
 
(vi) any debts, obligations or Liabilities in respect of the borrowing of money
or issuance of any note, bond, indenture, loan, credit agreement or other
evidence of indebtedness or direct or indirect guaranty or assumption of
indebtedness, liabilities or obligations of others, whether or not disclosed in
this Agreement or otherwise of Seller, including, without limitation, any
obligations or liabilities of Seller, to any of its Affiliates or to any Person
affiliated therewith, if any;
 
(vii) any Liabilities or obligations of Seller arising out of any violation of
Laws occurring on or before the Closing Date, including but not limited to
liabilities arising under Environmental Laws, to the extent arising from or
relating to facts, events or conditions which were in existence or occurred on
or prior to the Closing Date, irrespective of whether such Liabilities attach to
Seller or Buyer or any other Person in the first instance;
 
(viii) Liabilities in respect of Seller Transaction Expenses;
 
(ix) Seller’s obligations under this Agreement and the Related Documents; and
 
(x) any Liabilities or obligations arising out of or relating to the Excluded
Assets or Retained Liabilities.
 
Seller shall timely perform and discharge in accordance with their respective
terms all Retained Liabilities and shall, subject to Article 9 hereof (except
with respect to the Minnesota Department of Revenue Audit which shall not be
subject to Article 9), indemnify and hold Buyer harmless against all such
Liabilities.
 
ARTICLE 2                      
 
PURCHASE PRICE
 
2.1 Purchase Price.  In consideration for the sale of the Assets to Buyer, the
purchase price for the Assets shall be Twenty Million Dollars ($20,000,000.00),
subject to adjustment pursuant to Section 2.2 (the “Purchase Price”).  The
Purchase Price shall be paid at Closing by wire transfer pursuant to the written
instructions of Seller delivered to Buyer at least three (3) business days prior
to the Closing, as follows:
 
(a) Pursuant to the terms and conditions of a mutually agreeable Escrow
Agreement (the “Escrow Agreement”) among Buyer, Seller and either U.S. Bank or
Wells Fargo, as selected by Seller (the “Escrow Agent”), Buyer shall deposit in
escrow with the Escrow Agent in cash an amount equal to $2,500,000.00 (the
“Escrow Deposit”) to be held by the Escrow Agent in an escrow fund (the “Escrow
Deposit Fund”) pursuant to the terms of this Agreement and the Escrow
Agreement.  The Escrow Agreement shall provide that, if no claim has been made
by the six (6) month anniversary of the Closing, $500,000 of the Escrow Deposit
shall be immediately released to the Seller (or distributed to Seller’s
shareholders if the Seller so directs the Escrow Agent).  All amounts, including
accrued interest, remaining in the Escrow Deposit Fund shall be distributed to
Seller on the first anniversary of the Closing Date, except for amounts required
to satisfy Buyer’s claims, which shall be retained in the Escrow Deposit Fund
until such claims have been paid or settled.  The Escrow Deposit Fund and all
interest on, or other proceeds (the “Earnings”) of, the Escrow Deposit Fund
shall be available to satisfy any amounts owed by Seller to Buyer or the Buyer
Indemnified Parties pursuant to Article 9 of this Agreement and will be paid
pursuant to the terms of the Escrow Agreement.  The Escrow Deposit Fund shall be
released and applied in accordance with the terms of this Agreement and the
Escrow Agreement.  The parties agree that any Taxes related to the Earnings
shall be paid by Seller.
 
(b) Buyer shall pay to Seller the sum of Seventeen Million Five Hundred Thousand
Dollars and No Cents ($17,500,000.00) (the “Closing Payment”) plus or minus the
Net Working Capital Adjustment determined in accordance with Section 2.2.
 
2.2 Estimated Net Working Capital Statement; Closing Statement.
 
(a) The Net Working Capital as of the Closing Date shall be determined in
conformance with Schedule 2.2(a) hereto (the “Example Net Working Capital
Statement”).  At least five (5) business days prior to the Closing Date, Seller
shall deliver to Buyer a statement (the “Estimated Net Working Capital
Statement”) setting forth in reasonable detail Seller’s good faith estimate of
the Net Working Capital (the “Estimated Net Working Capital”), which statement
shall set forth in reasonable detail the basis for the estimate.  The Estimated
Net Working Capital Statement shall be prepared on a basis consistent with the
preparation of, and shall be substantially identical in form to, the Example Net
Working Capital Statement.  The Closing Payment shall be increased to the extent
the Estimated Net Working Capital exceeds the Net Working Capital Target or
reduced to the extent Net Working Capital Target exceeds the Estimated Net
Working Capital (the “Net Working Capital Adjustment”); provided, that no
adjustment shall be made if the difference between Estimated Net Working Capital
and the Net Working Capital Target does not exceed $50,000 (the “Working Capital
Cushion”).
 
(b) Within sixty (60) days after the Closing, Buyer shall deliver to Seller a
statement (the “Closing Statement”) setting forth in reasonable detail Buyer’s
good faith determination of Net Working Capital as of the Closing Date (the
“Closing Date Net Working Capital”) and a calculation of any further adjustment
to the Purchase Price, based upon the difference between the Estimated Net
Working Capital Statement and the Closing Statement.  The Closing Statement
shall be prepared on a basis consistent with the preparation of, and shall be
substantially identical in form to, the Example Net Working Capital
Statement.  No later than the close of business on the tenth (10th) business day
after the delivery of the Closing Statement (the “Payment Date”), (i) in the
event that the Closing Date Net Working Capital is less than the Estimated Net
Working Capital, Seller shall pay Buyer an amount equal to the deficiency (or,
if there is any good faith dispute, the undisputed amount), or (ii) in the event
that the Closing Date Net Working Capital is more than the Estimated Net Working
Capital, Buyer shall pay Seller an amount equal to the excess (or, if there is
any good faith dispute, the undisputed amount); provided, that no payment shall
be made if the difference between Closing Date Net Working Capital and the Net
Working Capital Target does not exceed the Working Capital Cushion.  During the
first sixty (60) days after Closing, each of Buyer and Seller agrees to provide
representatives of the other party with prompt reasonable access to its related
books, records and employees during regular business hours (or in lieu of such
access, copies of reasonably requested materials and telephonic access to such
employees shall be provided upon two (2) business days’ prior written notice to
such party) for the purpose of preparing the Closing Statement.
 
(c) Except with respect to items that Seller notifies Buyer that it objects to
prior to the close of business on the date that is at least one (1) business day
prior to the Payment Date, the adjustments set forth in the Closing Statement
shall be final and binding on the Parties effective at the close of business on
the Payment Date.  If Seller disputes Buyer’s determinations set forth in the
Closing Statement or Buyer disputes Seller’s determinations set forth in any
such objection notice, the parties shall consult with regard to the matter and
an appropriate adjustment and payment shall be made as agreed upon by the
Parties within thirty (30) days after the Payment Date.  If such thirty (30) day
consultation period expires and the dispute has not been resolved, then the
Parties shall retain a mutually acceptable, nationally recognized independent
accounting firm that does not then have a relationship with Seller or Buyer (the
“Independent Accountant”), to resolve the disagreement and make a determination
with respect thereto as promptly as practicable.  The determination by the
Independent Accountant on the matter shall be made in accordance with the
Example Net Working Capital Statement and shall be binding on the Parties.  If
an Independent Accountant is engaged pursuant to this Section 2.2, the fees and
expenses of the Independent Accountant shall be borne by Seller and Buyer in
inverse proportion as such Party may prevail on the resolution of the
disagreement which proportionate allocation also will be determined by the
Independent Accountant and be included in the Independent Accountant’s written
report, and an appropriate adjustment and payment shall be made within three (3)
business days of the resolution by the Independent Accountant, which resolution
the parties will request the Independent Accountant to render within thirty (30)
days after such retention.
 
(d) The Example Net Working Capital Statement, the Estimated Net Working Capital
Statement, and the Closing Statement and the estimates, determinations and
calculations contained therein will be prepared and calculated for in this
Section 2.2 without duplication and in accordance with GAAP, except that accrued
PTO shall not be included in any computation of Net Working Capital and will be
paid by Seller as of the Closing Date in accordance with Section 11.7.  In
addition, none of the adjustments provided for in this Section 2.2 will be made
with respect to any Excluded Asset, Retained Liability or with respect to any
item of income or expense related to an Excluded Asset or Retained Liability.
 
2.3 Allocation.  All amounts constituting consideration within the meaning of
and for the purposes of Section 1060 of the Code and the regulations thereunder
shall be allocated among the Assets and any other rights acquired by Buyer
hereunder, as applicable, in the manner required by Section 1060 of the
Code.  The Purchase Price shall be allocated among the Assets in accordance with
an appraisal which shall be completed within ninety (90) days after the Closing
by a qualified appraiser selected by Buyer.  All costs associated with such
appraisal will be borne by Buyer.  Buyer and Seller shall each file its federal
income tax returns and its other Tax Returns reflecting such allocation.
 
2.4 Accounts Receivable.  Effective as of the Closing Date, Seller will assign
to Buyer all of the Accounts Receivable.  On or as soon as practicable after the
Closing Date, but in no event later than five (5) business days after the end of
the month in which the Closing occurs, Seller will deliver to Buyer a statement
setting forth the outstanding Accounts Receivables.
 
2.5 Further Purchase Price Adjustments.
 
(a) In the event Buyer does not pay to Transferred Employees (as defined herein)
within one year after the Closing Date the amount of their respective bonuses
accrued as of the Closing Date by Seller, Buyer shall promptly pay to Seller the
unpaid amount as an adjustment to the Purchase Price.
 
(b) In the event the Closing does not occur by April 1, 2014, the parties shall
negotiate in good faith a revision to the Net Working Capital Target, such that
Seller does not suffer any adverse financial consequences as a result of
delaying the Closing beyond April 1, 2014.
 
ARTICLE 3
 
CLOSING
 
3.1 General Closing Procedures.  The consummation of the sale and purchase of
the Assets pursuant to this Agreement (the “Closing”) shall take place as soon
as practicable, at a mutually agreeable location or by electronic exchange of
signatures, with required deliveries and payments, but in no event later than
April 16, 2014 (the “Closing Date”).
 
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller hereby represents and warrants to Buyer that, subject to the disclosures
in the Schedules referenced in this Article 4 (the “Schedule of Exceptions”),
the following representations and warranties are true and correct as of the date
of this Agreement and as of the Closing:
 
4.1 Organization and Standing; Capitalization. Seller (i) is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, (ii) is qualified to do business in all jurisdictions where failure to
do so would have a Material Adverse Effect on the Business, and (iii) has all
necessary corporate power and authority to own, operate and lease its Assets and
carry on the Business as now conducted.  Schedule 4.1 lists each state where
Seller is qualified to do business.
 
4.2 Authorization and Binding Obligation. Seller has all necessary corporate
power and authority to enter into, deliver and perform its obligations under
this Agreement and the Related Documents and to consummate the
Transaction.  This Agreement and the Related Documents (i) have been, and each
of the other documents contemplated hereby at or prior to Closing will be, duly
executed and delivered by Seller, (ii) have been duly approved by all necessary
action of Seller’s board of directors and do not require any further
authorization or consent of Seller’s board of directors and, (iii) subsequent to
the Special Meeting of Seller’s Shareholders, will have been approved by all
necessary corporate action and will not require any further authorization or
consent of Seller’s Shareholders. This Agreement constitutes (and each of the
other Related Documents, when executed and delivered, will constitute) valid,
legal and binding obligations enforceable against Seller in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally or the availability of equitable
remedies.
 
4.3 Absence of Conflicting Agreements; Consents.
 
(a) Except as set forth on Schedule 4.3, the execution, delivery and performance
of this Agreement and the Related Documents contemplated hereby by Seller and
the consummation by Seller of the Transaction hereby and thereby does not and
will not: (i) violate any provision of the Organizational Documents of Seller;
(ii) violate any applicable Law or Order; (iii) either alone or with the giving
of notice or the passage of time or both, conflict with, constitute a material
default under, or grounds for termination or  acceleration of, or result in a
breach of the terms, conditions or provisions of any Assumed Contracts, assuming
any necessary consents are obtained; and (iv) create any Lien upon any of the
Assets other than Permitted Liens.
 
(b) Except as listed on Schedule 4.3, no approval or consent of any Person or
Governmental Authority is or was required to be obtained by Seller for the
authorization of this Agreement or the Related Documents or the execution,
delivery, performance and consummation by Seller of the transactions
contemplated by this Agreement and the Related Documents.
 
4.4 Litigation.  (i) Except as disclosed on Schedule 4.4, there are no
Proceedings pending against Seller that have been served on Seller or, to the
Knowledge of Seller, pending but not served on Seller or threatened against
Seller with respect to the Assets or operation of the Business and (ii) there
are no Proceedings pending or, to the Knowledge of Seller, threatened, before or
by any court, Governmental Authority or arbitrator relating to Seller that seeks
to enjoin or prohibit, or that could hinder or impair, Seller’s performance of
its obligations under this Agreement and the Related Documents.
 
4.5 Real Property.
 
(a) Lease.  Seller has furnished to Buyer a true and complete copy of all
written lease agreements and all related documentation for the Leased Real
Property (collectively, the “Real Estate Leases”), along with all modifications
and amendments thereto.  Except as set forth on Schedule 4.5(a), there are no
material oral agreements between Seller and any landlord or lessor under the
Real Estate Leases.  The Leased Real Property constitutes all of the real
property used or held for use in the conduct of the Business.  There is legal
and practical access to the Leased Real Property and the Leased Real Property is
served by all utilities and services necessary for the proper and lawful conduct
and operation of the Business as currently conducted.  The Real Property Leases
are in full force and effect.
 
(b) Leased Real Property.  With respect to the real property and improvements
subject to the Real Estate Leases: (i) Seller is the owner and holder of the
entire interest in the leasehold estate granted by the Real Estate Leases; (ii)
the Real Estate Leases constitute legal, valid and binding obligations of Seller
and, to Seller’s Knowledge, the landlords thereto, enforceable in accordance
with their terms; and (iii) there are no defaults currently existing by Seller
under the Real Estate Leases, and no written notices of default have been
received by Seller which have not been cured, and no events have occurred that
with the lapse of time, notice, or otherwise would constitute a default under
the Real Estate Leases.  Seller has not subleased, licensed or otherwise granted
any Person the right to use or occupy any of the leased real property which is
the subject of any Real Property Lease and has not collaterally assigned or
granted any other security interest in any Real Property Lease.  
 
(c) Improvements.  Seller has not received any written notice from any
Governmental Authority claiming any improvements (including buildings and other
structures) on the Leased Real Property are in material violation of applicable
Laws.  All improvements (including buildings and other structures) on the Leased
Real Property are in good operating condition and repair, normal wear and tear
excepted and adequate to operate such facilities as currently used.
 
(d) To Seller’s Knowledge, there are no assessments, general or special, which
have been or are in the process of being levied against the Leased Real Property
and Seller has no knowledge of any contemplated assessments.
 
4.6 Contracts.
 
(a) Schedule 1.1(c) sets forth a true and complete list of all material Assumed
Contracts, including agreements, licenses and leases that relate to the Business
or the ownership of the Assets, such as the following:
 
(i) any mortgage, pledge or security agreement, deed of trust or other
instrument granting a Lien (other than Permitted Liens) upon any Asset used in
the Business;
 
(ii) any Contract involving a partnership, joint venture or similar agreement
with another party;
 
(iii) any Client Contract;
 
(iv) any Contract involving compensation to (A) any Employee, or (B) any
Consulting Agreement, including the Assigned Employment Agreements;
 
(v) any Contract involving any labor agreement or collective bargaining
agreement of the Seller;
 
(vi) any capital lease;
 
(vii) any Contract that contains a covenant restricting the ability of Seller to
compete in any business or with any Person or in any geographic area;
 
(viii) any Contract with Affiliates of Seller;
 
(ix) any Contract with a Governmental Authority;
 
(x) any Contract pursuant to which any Indebtedness for borrowed money is
outstanding or may be incurred or pursuant to which Seller has guaranteed any
Indebtedness for borrowed money of any other Person;
 
(xi) any material Contract involving Intellectual Property, including Client
Intellectual Property and Seller Licensed Intellectual Property; and
 
(xii) all other Contracts that involve the cash payment or potential cash
payment, pursuant to the terms of any such Contract, by or to Seller of more
than $5,000 per year that cannot be terminated within thirty (30) days after
giving notice of termination without resulting in any material cost or penalty
to the Seller.
 
(b) The contracts set forth on Schedule 1.1(c) constitute all of the material
Assumed Contracts to which Seller is a party that relate to the Business.  Each
of the Assumed Contracts is in full force and effect and constitutes a legal,
valid and binding obligation of Seller and, to Seller’s Knowledge, each other
party thereto, and enforceable by Seller in accordance with its terms, except as
limited by Laws affecting creditor’s rights or equitable principles
generally.  Neither Seller nor, to the Knowledge of Seller, any other party
thereto, is in any material respect in default under the Assumed
Contracts.  Copies of the Assumed Contracts have been made available to Buyer,
including all amendments, modifications and supplements thereto.
 
(c) None of the Assumed Contracts provide for delayed or deferred payments,
other than increases or delays in payments as set forth in such Assumed
Contracts, and no payments to Seller have been accelerated other than in
accordance with the terms set forth in the Assumed Contracts, in each case, in a
manner that would give rise to any liability that would not be treated as a
current liability under GAAP.
 
4.7 Compliance with Laws.  Except as set forth in Schedule 4.7, since January 1,
2013, Seller has complied with, and is not in violation of, any Laws or
Order.  Seller has not received any notice asserting any material noncompliance
with any Law or Order relating to the Assets or in connection with the
Business.  There is no pending or, to Seller’s Knowledge, threatened,
investigation, audit, review or other examination of the Business, and Seller is
not subject to any Order, agreement, memorandum of understanding or other
regulatory enforcement action or proceeding with or by any Governmental
Authority.
 
4.8 Governmental Consents.  The execution, delivery and performance by Seller of
this Agreement and the Related Documents, and the consummation by Seller of the
transactions contemplated hereby and thereby, do not and will not require the
authorization, consent, approval, exemption, clearance or other action by or
notice or declaration to, or filing with, any court, administrative or other
Governmental Authority.
 
4.9 Taxes.
 
(a) Except as set forth on Schedule 4.9(a), all federal, state, local and other
Tax Returns required to be filed by Seller have been timely filed or caused to
be filed, and all Taxes shown on such Tax Return as being due and payable or due
and payable pursuant to any assessment received in connection with such Tax
Returns have been paid; no extensions of time with respect to the date any Tax
Return was or is due to be filed is now in force; no waiver or extension has
been granted with respect to any period of limitations affecting assessment of
any Tax; and all of such Tax Returns were prepared in compliance in all material
respects with all Law.  All such Tax Returns are true, complete and correct in
all material respects; no deficiency in payment of any Taxes related to the
Assets or the Business for any period has been asserted by any taxing authority
which remains unsettled as of the date hereof, and Seller has not received any
written inquiries from any taxing authority with respect to possible claims for
Taxes or assessments on the Assets or the Business.
 
(b) Except as set forth in Schedule 4.9(b), no issues that have been raised by
the relevant taxing authority in connection with the examination of any of the
Tax Returns referred to in clause (a) are currently pending.
 
(c) There is no lien for Taxes upon any of the Assets nor is any taxing
authority in the process of imposing any lien for Taxes on any such assets,
other than liens for Taxes that are not yet due and payable.
 
(d) Seller has withheld all Taxes required to be withheld under Law, and such
withholdings have been paid to the proper Governmental Authority or set aside in
accounts for such purpose, or accrued, reserved against and entered upon the
books of Seller.
 
4.10 Environmental Matters.
 
(a) Seller is conducting and at all times has conducted the Business, and has
occupied, used and operated the Leased Real Property in material compliance with
all applicable Environmental Laws, which compliance includes obtaining,
maintaining and complying in all material respects with all Permits required by
Environmental Law for the operation of the Business.  Seller has not received
any notice from any Governmental Authority, with respect to the Leased Real
Property, of any material violation or alleged violation of any Environmental
Laws.
 
(b) There are no (i) current, pending or, to Seller’s Knowledge, threatened
Proceedings of any kind against Seller concerning the Business or the Leased
Real Property under any Environmental Law, (ii) claims, actions, suits or
administrative, arbitral or other proceedings pending or, to Seller’s Knowledge,
threatened against or affecting Seller at law or in equity with respect to the
Business or the Leased Real Property under any Environmental Laws, or (iii) to
the Seller’s Knowledge, existing grounds on which any such Proceedings might
reasonably be commenced.
 
(c) No portion of the Leased Real Property has been used by Seller or, to
Seller’s Knowledge, any other Person, for the handling, manufacturing,
processing, storage or disposal of Hazardous Substances in material violation of
applicable Environmental Laws.
 
(d) Seller has not and, to Seller’s Knowledge, no other person has, released
(i.e., any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping) or
threatened to release Hazardous Substances on, upon, into or from the Leased
Real Property, in material violation of applicable Environmental Laws.
 
4.11 Broker’s Fees.  Neither Seller, nor any Person acting on Seller’s behalf,
has agreed to pay a commission, finder’s fee or similar payment in connection
with this Agreement or any matter related hereto to any Person, and no Person is
entitled to any such payment from Seller in connection with the transactions
contemplated by this Agreement, except for fees owed by Seller to Green Holcomb
and Fisher LLC, which will be paid by Seller.  Seller shall indemnify and hold
harmless Buyer for any payment due to any broker or agent based on any agreement
made by Seller.
 
4.12 Insurance.  Seller maintains insurance policies or other arrangements with
respect to the Assets and the Business consistent with industry practice, and
will maintain such policies or arrangements until the Closing.  Except as set
forth in Schedule 4.12, Seller has not received notice from any issuer of any
material policy of its intention to cancel, terminate or refuse to renew any
such policy issued by it with respect to the Business and/or the
Assets.  Schedule 4.12 sets forth a true and correct summary of the insurance
policies or arrangements with respect to the Assets and the Business, setting
forth for each such policy (i) the insurer, (ii) the insured, (iii) amount of
coverage, (iv) type of insurance, and (v) the expiration date of such policy.
 
4.13 Personal Property.  Schedule 1.1(b) contains Seller’s fixed asset list for
all Personal Property included in the Assets that individually has a book value
in excess of $1,000.  Seller has good and marketable title to the Assets free
and clear of all Liens, other than Permitted Liens.  All Personal Property is
suitable for the purpose for which such items are presently used.  All material
Personal Property used in the day-to-day operations of the Business is in good
operating condition and repair, subject only to ordinary wear and tear and
routine maintenance, and, to Seller’ Knowledge, is in conformity with all
applicable Laws.  All tangible Assets are in the possession or control of
Seller.
 
4.14 Sufficiency of Assets. The Assets are sufficient for the continued
operation of the Business after the Closing in substantially the same manner as
operated prior to the Closing and constitute all of the rights, properties and
assets necessary to the operation of the Business as currently operated.
 
4.15 Financial Statements. Schedule 4.15 sets forth copies of the (i) audited
balance sheet of Seller as of December 31, 2012 and 2011, and the related
statements of retained earnings, income and cash flows for the years then ended
(the “Audited Financial Statements”), and (ii) unaudited balance sheets of
Seller as of December 31, 2013 and the related statements of income for the
twelve-month period then ended (the “Interim Financial Statements” and together
with the Audited Financial Statements, the “Financial Statements”).  The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved, subject, in the case of the
Interim Financial Statements, to normal and recurring year-end adjustments and
the absence of notes.  The Financial Statements fairly present in all material
respects the financial condition of Seller as of the respective dates they were
prepared and the results of the operations thereof for the periods indicated.
 
4.16 Absence of Certain Changes.  From January 1, 2013 to the date hereof,
Seller has conducted the Business in the Ordinary Course of Business and there
have not been any events, changes or occurrences or state of facts that,
individually or in the aggregate, have had or would reasonably be expected to
have, a Material Adverse Effect.
 
4.17 Absence of Undisclosed Liabilities. Except as set forth in the Financial
Statements, continuing obligations of performance under terms of Assumed
Contracts, or as set forth on Schedule 4.17, Seller is not obligated for, nor
are the Assets subject to, any Liabilities or adverse claims or obligations of
any kind that materially affect the Assets or that comprise part of the Assumed
Liabilities, whether a direct or indirect Liability, indebtedness, guaranty,
endorsement, or obligation, whether accrued, absolute, contingent, mature,
unmature or otherwise and whether known or unknown, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, except for any that
would not a have a Material Adverse Effect.
 
4.18 Employment Matters.
 
(a) Schedule 4.18(a) sets forth a complete and correct list of each deferred
compensation, incentive compensation, stock purchase, stock option, retention,
severance or termination pay, hospitalization or other medical, life, or other
insurance, supplemental unemployment benefits, profit-sharing, 401(k), pension
or retirement plan, program, agreement, or arrangement, and each other benefit
or compensation plan, program, agreement, or arrangement, that currently is
sponsored, maintained, or contributed to or required to be contributed to by
Seller or any of its Affiliates for the benefit of any Employee (collectively,
the “Company Plans”).  Schedule 4.18(a) identifies each of the Company Plans
that is an “employee welfare benefit plan” or “employee pension benefit plan” as
such terms are defined in Sections 3(1) and 3(2) of the Employee Retirement
Income Security Act of 1974 (“ERISA”).
 
(b) Except as set forth on Schedule 4.18(b), the employment by Seller of any
Person is at-will employment, meaning that such Person may be terminated at any
time, without penalty or Liability of any kind (other than accrued vacation pay,
COBRA benefits and other benefits required by applicable Law).  Schedule 4.18(b)
sets forth all Assigned Employment Agreements and agreements with independent
contractors providing personal services (“Consulting Agreements”), including
total compensation payable to each consultant.
 
(c) Except as set forth on Schedule 4.18(c), there are no active, pending or, to
Seller’s Knowledge, threatened administrative or judicial Proceedings under
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, the
Family and Medical Leave Act, ERISA, the Americans with Disabilities Act, the
Worker Adjustment and Retraining Notification Act of 1988 or any similar state
or local Law (collectively, the “WARN Act”), the National Labor Relations Act or
any other foreign, federal, state, county or local Law (including common Law),
ordinance or regulation relating to Employees of Seller, nor are there any
internal company investigations concerning alleged violations of the same.
 
(d) Seller has paid in full or accrued, with respect to all of its Employees,
all wages, salaries, commissions, bonuses, fringe benefit payments and all other
direct and indirect compensation of any kind for all services performed by them
and each of them to the date hereof; provided, however, that compensation
accrued, but not earned by its Employees (such as year-end bonuses for 2014)
will not be paid to Employees and any accruals with respect thereto shall be
included in the Net Working Capital.
 
(e) There is not presently pending or existing and, to the Knowledge of Seller,
there is not threatened (i) any labor dispute, strike, slowdown, picketing, or
work stoppage, or (ii) any substantial effort to organize any Employees into a
new or modified collective bargaining unit, or (iii) to Seller’s Knowledge, any
material employee grievance under any company policy or employment agreement;
and for the past three (3) years has been, no strike, labor dispute, request for
representation, slowdown or stoppage pending or, to Seller’s Knowledge,
threatened in respect of the Business.  There is, and since January 1, 2012,
there has been, no unfair labor practice charge against Seller in respect of the
Business pending or, to Seller’s Knowledge, threatened before the National Labor
Relations Board, any state labor relations board or any court or tribunal, nor
has any written complaint pertaining to any such charge or potential charge been
filed against Seller.
 
(f) There is no material dispute, claim, or Proceeding pending with or, to
Seller’s Knowledge, threatened by the U.S. Citizenship and Immigration Services
with respect to Seller.  To Seller’ Knowledge, there are no Employees who are
not in lawful status pursuant to the immigration laws of the United States.
 
(g) Seller does not contribute to, nor has it in the past contributed to, (i)
any multiemployer plan, as defined in Section 3(37) of ERISA, (ii) any plan
subject to Title IV of ERISA; or (iii) an employee stock ownership plan within
the meaning of Section 4975(e)(7) of the Code.  “ERISA Affiliate” of any entity
means any other entity that, together with such entity, would be treated as a
single employer under Section 414 of the Code.
 
(h) To Seller’s Knowledge, each of the Company Plans has been established,
operated and administered in material compliance with its terms and applicable
Law, including but not limited to ERISA and the Code and may, in accordance with
its terms, be amended or terminated at any time.  To Seller’s Knowledge, no
event has occurred and no condition exists that would subject any of the Assets
being sold to any Tax, fine, Lien, penalty or other Liability (other than
Liabilities incurred in the ordinary course of the plan’s operations that are
reflected in the Financial Statements).  Each Company Plan intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service (the “IRS”) that it is so
qualified or is permitted to rely on the opinion letter of a prototype plan or
volume submitter sponsor, and to Seller’s Knowledge, nothing has occurred since
the date of such letter that is reasonably likely to affect the qualified status
of such Company Plan.
 
(i) Schedule 11.1 sets forth a true and complete list of each Employee as of
February 28, 2014, together with such Employee’s name, position, department, and
date of hire, including any employee who is an inactive employee on paid or
unpaid leave of absence.  For each such Employee, the aforementioned list
includes the location of the Employee, current compensation rate, and any other
compensation arrangement as of the date of delivery, including bonuses, accrued
PTO, vehicle usage, severance or other perquisites.  Cash payments due and
payable to Employees by Seller with respect to accrued and unused PTO pay are
set forth in Schedule 11.1.
 
(j) Seller does not provide continuation of any benefit to current or future
retired employees, Employees or directors of Seller (or any spouse or dependent
thereof) after termination of employment other than as required under Section
4980B of the Code, or similar provision of applicable state Law.  Seller has
complied and is in compliance with the requirements of Section 4980B of the
Code.
 
(k) To Seller’s Knowledge, no default, violation, error or omission has occurred
on or prior to the Closing Date with respect to any of the Company Plans for
which Buyer could be liable as a result of the consummation of the transactions
contemplated by this Agreement.  No Company Plan has terms requiring assumption
by Buyer.  No Company Plan is subject to any Lien under any provision of ERISA
or the Code.
 
(l) Except as set forth in Schedule 4.18(l), neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any material payment (including, without limitation,
severance pay or unemployment compensation) becoming due to any director or
employee of Seller; (ii) result in the acceleration of vesting under any Company
Plan; or (iii) materially increase any benefits otherwise payable under any
Company Plan; and any such payment or increase in benefits is fully deductible
under the Code, including but not limited to Sections 162, 280G and 404.  Seller
has not announced any plan or commitment to create any additional Company Plan
or to amend or modify any Company Plan.
 
(m) Seller is not, nor has Seller been in the past five years, a party to, bound
by, or negotiating any collective bargaining agreement or other contract or
agreement with a union, works council or labor organization (collectively,
“Union”), and there is not, and has not been for the past five years, any Union
representing or purporting to represent any employee of Seller, and no Union or
group of Seller’s employees is seeking or has sought to organize employees for
the purpose of collective bargaining.  Since January 1, 2012, there has not
been, nor has there been any threat of, any strike, slowdown, work stoppage,
lockout, concerted refusal to work overtime or other similar labor disruption or
dispute affecting any Seller or any of their employees. Seller does not have any
duty to bargain with any Union.
 
(n) To Seller’s Knowledge, and except as otherwise set forth in one or more
Schedules for this Section, no event has occurred, and no condition exists, as
of, or prior to the Closing Date, with respect to any Company Plan for or with
respect to which Buyer could incur any liability, tax, penalty or assessment,
regardless of whether any such event or condition is known or unknown,
contingent or otherwise, including without limitation, as a result of any matter
that could adversely affect the tax-qualified status of a Company Plan (or the
tax-exempt status of a related trust), as a result of any act or omission of any
fiduciary, actuary or administrator of any Company Plan, or as a result of any
claim by a participant or beneficiary.
 
(o) Seller has operated the Business in material compliance with all applicable
Law relating to employment and the employment of labor, including (without
limitation) those relating to equal employment, affirmative action,
discrimination in employment, collective bargaining, wages and hours, vacations,
workplace safety, immigration, layoffs, disability, workers’ compensation,
unemployment compensation and the withholding and payment of employment
taxes.  Within the past three (3) years, no employee layoffs have occurred that
could implicate the WARN Act, and no such layoffs will be implemented without
advance notice to Buyer.  Schedule 4.18(o) lists, by date and location, all
former employees of the Business whose employment was terminated in the 90 days
preceding the date of this Agreement.
 
(p) No Company Plan is (i) a “defined benefit plan” (within the meaning of
Section 3(35) of ERISA) or (ii) subject to the minimum funding requirements of
Section 412 of the Code or Part 3 of Title I of ERISA, and Seller does not
otherwise have any Liabilities relating to any “defined benefit plan” (within
the meaning of Section 3(35) of ERISA) that could become Liabilities of Buyer or
any of its Affiliates.
 
4.19 Permits.  Seller possesses and holds all Permits that are necessary to
permit Seller to engage in the Business as presently conducted in and at all
locations and places where Seller is presently operating and conducting the
Business; all such Permits are valid and in full force and effect; and Seller is
in material compliance with the terms of all Permits and, to Seller’s Knowledge,
there is no Action pending or threatened regarding the suspension, revocation,
or cancellation of any Permits.
 
4.20 Accounts Receivable.  The Accounts Receivable reflected on the Financial
Statements represent sales actually made or amounts related to services actually
performed in the Ordinary Course of Business or valid claims as to which
performance has been rendered, except as set forth on Schedule 4.20.   To
Seller’s Knowledge, no counterclaims or offsetting claims with respect to the
accounts receivable are pending or, to the Knowledge of Seller, threatened.
 
4.21 Accounts Payable.  The Accounts Payable reflected on the Financial
Statements arose from bona fide transactions in the Ordinary Course of Business
of the Business.  Except as set forth on Schedule 4.21, all outstanding Accounts
are not yet due and payable either under Seller’s payment policies and
procedures, the terms for payment, or applicable Law, or are being contested by
Seller in good faith.
 
4.22 Claims Against Third Parties. Schedule 4.22 sets forth a list and brief
description of all of Seller’s known breach of contract, tort, and/or other
causes of action or claims against any Person, if any, related to the Assets or
the conduct of the Business.
 
4.23 Intellectual Property.
 
(a) Except for the items set forth on Schedule 4.23(a) (such listed items, the
“Excepted Intellectual Property”), Seller is the owner or licensee of, with all
right, title and interest in and to (free and clear of any Liens), or otherwise
possesses, the right to use the Intellectual Property used in the Business, as
currently operated, and as currently contemplated before the Closing Date to be
operated, by Seller.
 
(b) Schedule 4.23(b) sets forth a list of all registrations and applications for
registration of Seller Owned Intellectual Property and specifies, where
applicable, the jurisdictions in which each such item of Intellectual Property
has been issued or registered or in which an application for such issuance or
registration has been filed, including the respective registration or
application numbers and the names of all registered owners, and any filing
deadlines for responses, affidavits or renewals applicable to the Intellectual
Property that occur within three months of the Closing Date (collectively, the
“Registrable Intellectual Property”).  Except as set forth on Schedule 4.23(a),
no Registrable Intellectual Property has been abandoned, canceled or adjudicated
invalid (excepting any expirations, or abandonments that have been revived, in
the ordinary course and excepting any registered trademarks, excluding those
registered trademarks identified on Schedule 4.23(a), that were canceled,
abandoned or lapsed), or is subject to any outstanding Order restricting its use
or adversely affecting or reflecting Seller’s rights thereto.  Schedule 4.23(b)
sets forth a list of all material licenses, sublicenses and other agreements to
use Seller Owned Intellectual Property.  Except as set forth in Schedule
4.23(b), the execution and delivery of this Agreement by Seller, and the
consummation of the transactions contemplated by this Agreement, will not cause
Seller to be in violation or default under any such license, sublicense or
agreement, nor entitle any other Person to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement, except
as would not have a Material Adverse Effect.  To Seller’s Knowledge, all
Material Intellectual Property (excluding pending patent applications identified
on Schedule 4.23(b)) is valid, subsisting and enforceable.
 
(c) No written claims with respect to any Material Intellectual Property have
been received by Seller or, to Seller’s Knowledge, have been threatened in
writing by any Person (i) to the effect that the Business infringes on any
Intellectual Property of other Persons, (ii) against the use by Seller of any
Material Intellectual Property used in the Business as currently conducted or
under development for use in the Business or (iii) challenging the ownership by
Seller, or the validity or effectiveness, of any Material Intellectual Property
used in the Business as currently conducted or under development for use in the
Business.  To Seller’s Knowledge, there has not been and there is not currently
ongoing any unauthorized use, infringement or misappropriation of any of Seller
Intellectual Property by any Person, including, to Seller’s Knowledge, any
employee or former employee of Seller.
 
(d) Except as set forth in Schedule 4.23(d), Seller is in material compliance
with all applicable Law and contractual obligations of Seller governing the
collection, interception, storage, receipt, purchase, sale, transfer and use
(“Collection and Use”) of personal, consumer, or customer information,
including, but not limited to, name, address, telephone number, electronic mail
address, social security number, bank account number or credit card numbers
(collectively, “Customer Information”).   To Seller’s Knowledge, the Collection
and Use of such Customer Information is in accordance in all material respects
with Seller’s privacy policies (or applicable terms of use) as published on
their respective websites or any other privacy policies (or applicable terms of
use) presented to consumers or customers (actual or potential) and to which
Seller is bound or otherwise subject and any contractual obligations of Seller
to its customers (actual or potential) regarding privacy.  Seller takes
commercially reasonable steps to protect the confidentiality, integrity and
security of its software, databases, systems, networks and Internet sites and
all information stored or contained therein or transmitted thereby from
unauthorized or improper Collection and Use including appropriate backup,
security, and disaster recovery technology, and to Seller’s Knowledge no Person
has gained unauthorized access to any of Seller’s software, data, systems, or
networks.  To Seller’s Knowledge, Seller has not collected, received or used any
Customer Information in violation of Seller’s privacy policies, nor does it use
any of the Customer Information in a manner that violates its privacy
policies.  To Seller’s Knowledge, no person has gained unauthorized access to or
made any unauthorized use of any Customer Information.
 
(e) No suit is pending, has been served on Seller, has been decided, or, to
Seller’s Knowledge, has been threatened. To Seller’s Knowledge, the Business
does not infringe or violate any Intellectual Property of other Persons.  To
Seller’s Knowledge, the execution or delivery of this Agreement or any Related
Document, or the performance of Seller’s obligations hereunder or thereunder,
will not violate any such applicable Law or any of Seller’s privacy policies (or
applicable terms of use) or any other contractual obligation of Seller governing
the Collection and Use of Customer Information.  No suit, action, reissue,
reexamination, public protest, interference, arbitration, mediation, opposition,
cancellation, Internet domain name dispute resolution or other proceeding is
pending and has been served or has been decided, to Seller’s Knowledge,
threatened, or asserted in writing, concerning Seller Owned Intellectual
Property, including any suit concerning a claim or position that Seller Owned
Intellectual Property has been infringed, misappropriated or otherwise violated
or is invalid, unenforceable, unpatentable, unregisterable, cancelable, not
owned or not owned exclusively by Seller.  To Seller’s Knowledge, no valid basis
for any such suits or claims exists.  Seller has not obtained or received any
opinions regarding the risk of infringement of any patent or patent application
assigned to or owned by Seller.
 
(f) Seller holds good and marketable title to the Seller Owned Intellectual
Property, except where the failure to do so would not have a Material Adverse
Effect, free and clear of all Liens other than Permitted Liens.  Seller has made
all filings and payments with the appropriate foreign and domestic agencies
required to maintain in subsistence all Seller Owned Intellectual Property that
is the subject of a registration or application with a Governmental Authority.
 
(g) Seller has taken reasonable measures to protect the secrecy, confidentiality
and value of all Seller Intellectual Property (except for such Seller
Intellectual Property whose value would be unimpaired in any material respect by
disclosure) or information required to be kept confidential.  No Seller
Intellectual Property has been, to Seller’s Knowledge, disclosed or has been
authorized to be disclosed to any Person other than to employees or agents of
Seller for use in connection with the Business or pursuant to a confidentiality
or non-disclosure agreement that reasonably protects the interest of Seller in
and to such matters.  To Seller’s Knowledge, no unauthorized disclosure of any
Seller Intellectual Property or information has been made within the last five
(5) years.
 
(h) Seller has a policy of requiring all employees, agents, consultants or
contractors who have contributed to or participated in the creation,
development, improvement or modification of Intellectual Property for Seller to
assign all of their rights therein to Seller.  To Seller’s Knowledge, no Person
(other than Seller) has any reasonable basis for claiming any right, title or
interest in and to any Developed Intellectual Property.
 
(i) Seller owns or has rights to access and use all IT Systems used to process,
store, maintain and operate Data, information and functions used in connection
with Seller’s conduct of the Business or otherwise necessary for Seller’s
conduct of the Business, including systems to operate payroll, accounting,
billing/receivables, payables, inventory, asset tracking, customer service and
human resources functions.  Seller has taken all reasonable steps in accordance
with industry standards to: (i) secure the IT Systems from unauthorized access
or use by any Person, and (ii) ensure the continued, uninterrupted and
error-free operation of the IT Systems.  The IT Systems used by Seller in the
operation of the Business are adequate in all material respects for their
intended use and for Seller’s operation of the Business as currently operated,
and as currently contemplated before the Closing Date to be operated, by Seller,
and are in good working condition (normal wear and tear excepted).  There has
not been any material malfunction with respect to any such IT Systems that has
not been remedied or replaced in all material respects.
 
(j) All Software that is owned by Seller does not contain any viruses or
disabling devices introduced by Seller, and, to Seller’s Knowledge, does not
otherwise contain any viruses or disabling devices.  The source code for all
material Software will compile into object code or otherwise be capable of
performing the functions described in the documentation pertaining thereto and
is sufficiently documented to enable a computer software developer of reasonable
skill to understand, modify, repair, maintain, compile and otherwise utilize all
aspects of such computer software without reference to other sources of
information.
 
(k) To the Knowledge of Seller, Schedule 4.23(k) sets forth all Public Software
used in connection with the operation of the Business.  To the Knowledge of
Seller, (1) Seller is in compliance with all agreements and other terms and
conditions governing the use of Public Software and (2) there exists no event,
condition or occurrence which, with the giving of notice or lapse of time, or
both, would constitute a breach or default by Seller of such agreements, terms
and conditions.  Seller has not received any notice of any alleged breach or
other violation of any such agreement, term or condition.
 
(l) Except as set forth on Schedule 4.23(l), to the Knowledge of Seller, no
Software used in connection with the Business is required to be (i) disclosed or
distributed in source code form; (ii) licensed for the purpose of making
derivative works; or (iii) redistributable at no charge, in each case, as a
result of Seller’s use, modification or distribution of Public Software.
 
(m) Notwithstanding any other provision of this Section 4.23, any representation
and warranty made with respect to Client Intellectual Property is made solely
with respect to Seller’s Knowledge.
 
4.24 Transactions with Affiliates.  Schedule 4.24 sets forth a true, complete
and correct list of all Contracts between Seller and any of its
Affiliates.  Except as set forth in Schedule 4.24, since January 1, 2013 Seller
has not: (a) furnished services to or received services from any of its
Affiliates, (b) rented or leased equipment or Real Property to or from any of
its Affiliates, (c) provided or received the benefit of properties or assets of
any of its Affiliates without compensation from or to such Affiliates, or (d)
except for cash dividends, otherwise made or received payments to or from any of
its Affiliates.
 
ARTICLE 5                      
 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer hereby represents and warrants to Seller that the following
representations and warranties are true and correct as of the date of this
Agreement and the Closing:
 
5.1 Organizational and Standing.  Buyer (i) is a corporation duly formed,
validly existing and in good standing under the laws of the State of Delaware,
(ii) is or at the time of Closing will be qualified to do business in all
jurisdictions where failure to do so would have a material adverse effect on the
Business after Closing, and (iii) has all necessary power and authority to own,
operate and lease the Assets and carry on the Business.
 
5.2 Authorization and Binding Obligation.  Buyer has all necessary power and
authority to enter into and perform its obligations under this Agreement and the
Related Documents to which it is a party and to consummate the
Transaction.  This Agreement and the Related Documents have been, and each of
the other documents contemplated hereby at or prior to Closing will be, duly
executed and delivered by Buyer, and have been approved by all necessary
corporate action of Buyer no other corporate proceeding or other action on the
part of Buyer is necessary to authorize this Agreement.  This Agreement
constitutes (and each of the Related Documents, when executed and delivered,
will constitute) valid and binding obligations enforceable against Buyer in
accordance with their terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally or the
availability of equitable remedies.
 
5.3 No Conflicting Agreements or Required Consents.  The execution, delivery and
performance of this Agreement by Buyer does not and will not: (i) violate any
provision of Buyer’s Organizational Documents; (ii) require the consent of any
Governmental Authority; (iii) violate any applicable Law or Order; and (iv)
either alone or with the giving of notice or the passage of time or both,
conflict with, constitute grounds for termination or acceleration of, or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any Contract to which Buyer is now subject.
 
5.4 Litigation.  There are no Proceedings pending or, to the knowledge of Buyer,
threatened, before or by any court, Governmental Authority or arbitrator
relating to Buyer that seeks to enjoin or prohibit, or that could hinder or
impair, Buyer’s performance of its obligations under this Agreement.
 
5.5 Broker’s Fees.  Neither Buyer nor any Person acting on its behalf has agreed
to pay a commission, finder’s fee or similar payment in connection with this
Agreement or any matter related hereto to any person or entity, and no other
person or entity is entitled to any such payment from Buyer in connection with
the transactions contemplated by this Agreement.  Buyer shall indemnify and hold
harmless Seller for any payment due to any broker or agent based on any
agreement made by Buyer.
 
5.6 Financing.  Buyer has and will maintain until Closing sufficient cash on
hand and/or access to existing lines of credit and commitments to pay the
Purchase Price on the Closing Date.
 
ARTICLE 6
 
COVENANTS
 
6.1 Certain Covenants.
 
(a) Affirmative Covenants of Seller. Between the date of this Agreement and the
Closing Date:
 
(i) Seller shall promptly notify Buyer in writing if Seller has knowledge prior
to such Closing of: (1) any representations or warranties contained in Article 4
that are no longer true and correct in any material respect or of any fact or
condition that would constitute a material breach of any such representation or
warranty as of such Closing, (2) the occurrence of any event, fact or
development that would require any material changes or amendments to the
Schedules, (3) of the occurrence of any event that may make the satisfaction of
the conditions in Article 7 impossible or unlikely, or (4) the occurrence of any
other event that violates any material covenants, conditions or agreements to be
complied with or satisfied by Seller under this Agreement;
 
(ii) Seller will comply in all material respects with all Laws applicable to
Seller’s use of the Assets and conduct of the Business;
 
(iii) Seller will maintain the Assets in customary repair, maintenance and
condition, except for wear and tear incurred in the Ordinary Course of Business,
and Seller will continue to make capital expenditures in the Ordinary Course of
Business as contemplated in the current capital expenditure plan of Seller set
forth on Schedule 6.1(a);
 
(iv) Seller will maintain in full force and effect reasonable property damage
and liability insurance on the Assets in at least the amount provided for by the
policies currently maintained by Seller;
 
(v) Seller shall conduct the Business in the Ordinary Course of Business;
 
(vi) Seller shall use commercially reasonable efforts to preserve intact the
Business and maintain the relations and goodwill with Clients, suppliers,
vendors, distributors, consultants, customers, landlords, creditors, Employees,
agents and others having business relationships with the Business, but shall not
be responsible for any adverse effect on the Business as a result of any Buyer
communications with such Persons;
 
(vii) Seller shall pay Accounts Payable and collect Accounts Receivable of the
Business in the ordinary course of the business;
 
(viii) Seller shall use commercially reasonable efforts to cause the conditions
set forth in Article 7 to be satisfied promptly; and
 
(ix) Seller shall maintain all books and records relating to the Business.
 
(b) Negative Covenants of Seller.  Between the date of this Agreement and the
Closing Date, except as expressly permitted by this Agreement or with the prior
written consent of Buyer:
 
(i) Seller shall not enter into any employment agreements or consulting
agreements, severance agreement, labor or union agreement or any other employee
plan or agreement that will be binding upon Buyer or the Business after Closing;
 
(ii) Seller shall not (A) terminate, modify or amend any Assumed Contract except
as reasonably necessary to transfer such Assumed Contract to Buyer, or (B)
knowingly take or fail to take any action that would cause a breach of any
Assumed Contract;
 
(iii) except for Contracts which will be terminable by Buyer without penalty
upon notice of sixty (60) days or less, not (i) enter into any Contract that
would have been an Assumed Contract were Seller a party to or subject thereto on
the date of this Agreement unless such Contract (A) is entered into in the
Ordinary Course of Business and (B) does not involve payments by Seller of
greater than $10,000 during any twelve (12) month period;
 
(iv) Seller shall not create any Lien on the Assets, other than Permitted Liens;
 
(v) Seller shall not sell, assign, lease or otherwise transfer or dispose of any
of the Assets, except for Assets consumed or disposed of in the Ordinary Course
of Business;
 
(vi) Seller shall not (i) increase the compensation or benefits of any Employee,
except as required pursuant to Assigned Employment Agreements or Law, or (ii)
modify an severance policy applicable to any employee that would result in any
increase in the amount of severance payable to any such employee (or would
expand the circumstances in which such severance so payable) except as is
payable solely by Seller;
 
(vii) Seller shall not materially change any accounting practices, procedures or
methods relating to the Business (except for any change required under GAAP or
applicable Law) or maintain its books and records relating to the Business in a
manner other than in the Ordinary Course of Business;
 
(viii) Seller shall not communicate to any Employee any information regarding
the prospective terms and conditions of his or her employment with Buyer which
is not expressly stated in this Agreement;
 
(ix) Seller shall not make any acquisition (including by merger, consolidation
or acquisition of stock) of the capital stock or a material portion of the
assets of any third party, excluding such acquisitions the capital stock or
assets of which shall not constitute Assets;
 
(x) Seller shall not dissolve, liquidate, merge or consolidate with another
entity;
 
(xi) Seller shall not make any material change in its cash management policies,
including any changes to their historical payment of accounts payable and
collections of accounts receivable; and
 
(xii) Seller shall not authorize agree, commit or resolve to take any actions
inconsistent with the foregoing.
 
(c) Promptly following the execution and delivery of this Agreement, Seller
shall (i) give notice of, convene and hold a meeting of its Shareholders to
approve the transactions contemplated by this Agreement (the “Special Meeting”),
and (ii) use all reasonable efforts to obtain such approval, including all
actions set forth in Section 7.1(g).  Seller shall give Buyer prompt written
notice when such approval has been obtained or denied.
 
(d) Covenants of Buyer.  Buyer shall promptly notify Seller in writing if Buyer
has knowledge prior to the Closing of: (1) any representations or warranties
contained in Article 5 that are no longer true and correct in any material
respect, (2) the occurrence of any event, fact or development that would require
any changes or amendments to the schedules or exhibits attached to this
Agreement, or (3) the occurrence of any other event that may result in a
violation of any covenants, conditions or agreements to be complied with or
satisfied by Buyer under this Agreement.
 
(e) Covenants of Seller’s Board of Directors.  The members of Seller’s board of
directors covenant and agree that they will recommend that Seller’s shareholders
vote in favor of, and approve, the Transaction at the Special Meeting of
Seller’s Shareholders.
 
6.2 Pre-Closing Access.  Between the date of this Agreement and the Closing
Date, Seller will provide Buyer, its counsel, accountants, environmental
consultants, appraisers and other advisers and representatives, (i) such books
and records, including copies of all Assumed Contracts, environmental and
engineering studies and reports, and other documents and contracts pertaining to
the Assets that are in Seller’s possession, custody or control and (ii) access
to Seller’s properties and Assets.  Buyer and its consultants and agents shall
not contact employees, vendors or customers of Seller without Seller’s prior
express approval, which shall not be unreasonably withheld.  Seller shall
provide such reasonable assistance and cooperation as may be requested by Buyer
from time to time prior to the Closing Date to reasonably facilitate the
transition of the Business, including facilities, operations and applicable
Business data, to Buyer upon and effective as of the Closing Date, including
providing Buyer with access to the Employees immediately upon execution of this
Agreement.
 
6.3 No Inconsistent Action.  Between the date of this Agreement and the Closing
or termination of this Agreement, each Party shall use its commercially
reasonable efforts to cause the fulfillment at the earliest practicable date of
all of the conditions to the obligations of such Party to consummate the sale
and purchase of the Assets.
 
6.4 Exclusivity.  Neither Seller, nor any of its respective owners,
shareholders, employees, officers or directors, or any agent or any
representative thereof shall, during the period commencing on the date of this
Agreement and ending with the earlier to occur of the Closing hereunder or the
termination of this Agreement, directly or indirectly (i) initiate, solicit,
entertain, negotiate, accept or discuss with any third party any proposal or
offer (an “Acquisition Proposal”) to acquire all or any substantial part of
Seller’s capital stock or assets, whether by merger, recapitalization,
arrangement, amalgamation, purchase of equity interests, purchase of assets, or
otherwise, or (ii) provide any information to any third party in connection with
an Acquisition Proposal or (iii) enter into any agreement, arrangement or
understanding with any third party requiring Seller to abandon, terminate or
fail to consummate the Transaction.
 
6.5 Confidentiality.  Each Party shall keep confidential all information
obtained by it with respect to the other Party in connection with this
Agreement, except where such information is known through other lawful sources
or where its disclosure is required in accordance with applicable Law, including
requirements of Governmental Authorities, and provided that the Parties shall be
free to disclose such information to their respective legal and financial
advisers in connection with the consummation of the Transactions.  If the
Transaction is not consummated for any reason, Buyer and Seller shall return to
each other, without retaining a copy thereof in any medium whatsoever, any
schedules, documents or other written information, including all financial
information, obtained from the other in connection with this Agreement and the
Transactions.
 
6.6 Further Assurances.  Seller and Buyer shall cooperate and take such actions,
and execute such other documents, at the Closing or thereafter, as may be
reasonably requested by the other in order to carry out the provisions and
purposes of this Agreement.  In furtherance of this covenant and obligation,
Seller or the Shareholder Representative, as applicable, agrees to provide
Buyer, at Buyer’s sole cost and expense, with Seller’s audited financial
statements for 2013 as promptly as possible but, in all events, no later than
sixty (60) days after the Closing Date.
 
6.7 Consents; Benefit of Agreements.  Seller will use all commercially
reasonable efforts to obtain the consents required from third Persons with
respect to all Assumed Contracts which require consent to assignment.  In the
event there are counterparties which require a payment to provide their consent,
and Buyer in good faith believes that such consents are material to the
operation of the Business after Closing, Buyer and Seller will jointly agree on
an approach with respect to such counterparties.  In the event counterparties
continue to require a payment, Seller will bear the first $5,000 of any such
payments and, thereafter, Buyer and Seller shall split equally the required
consent payments.  If, with respect to any Assumed Contract, other than the
Assigned Employment Agreements or the Real Property Lease, a consent is required
to the assignment of such Assumed Contract or the Real Property Lease and such
consent is not obtained prior to the Closing, following the Closing Seller shall
use all commercially reasonable efforts to keep such Assumed Contract or the
Real Property Lease in effect and to give Buyer the benefit of such Contract to
the same extent as if it had been assigned, and Buyer shall perform Seller’s
obligations under the agreement relating to the benefit obtained by
Buyer.  Nothing in this Agreement shall be construed as an attempt to assign any
agreement or other instrument that is by its terms non-assignable without the
consent of the other party.
 
6.8 Risk of Loss.  Seller shall bear the risk of any loss of or damage to any of
the Assets at all times from the date hereof until the Effective Time, and Buyer
shall bear the risk of any such loss or damage thereafter.
 
6.9 Financing.  Seller agrees to provide, and shall cause its officers,
employees, counsel, auditors and representatives to provide, such cooperation
(including with respect to timeliness) in connection with the arrangement of any
financing of Buyer, the proceeds of which may be used to consummate the
transactions contemplated hereby (the “Financing”) as may be reasonably
requested by Buyer, including (i) furnishing Buyer and its financing sources
with the financial information of the Business and any other pertinent
information regarding the Business, the Assets, and Assumed Liabilities as may
be reasonably requested by Buyer with respect to any such Financing, (ii)
assisting Buyer and its financing sources in the preparation of business
projections, pro forma financial information, bank information, memoranda and
similar documents for any portion of the Financing, and (iii) providing all such
other reasonable assistance as necessary to satisfy any conditions to the
Financing; provided, that Seller shall not be required to: (a) pay any
commitment or other similar fee or incur any other Liabilities in connection
with the Financing, (b) waive or amend any terms of this Agreement or incur any
out-of-pocket costs or expenses for which it has not received prior
reimbursement, or (c) take any action which would unreasonably interfere with
the ongoing operations of Seller or its Affiliates.
 
6.10 Bulk Transfers.  Buyer and Seller hereby waive compliance with the bulk
transfer provisions of the Uniform Commercial Code and all similar laws.  Seller
hereby agrees to indemnify, defend and hold Buyer harmless from and against any
and all Losses arising out of or relating to Proceedings asserted against Buyer
pursuant to the bulk transfer provisions of the Uniform Commercial Code or any
similar law.
 
6.11 Conveyance Free and Clear of Encumbrances.   Except for Permitted Liens, at
or prior to the Closing, Seller shall obtain the release of all Liens disclosed
in the Schedules hereto and any other Liens on the Assets, and shall duly file
releases of all such Liens with each Governmental Authority or office in which
any such Lien or evidence thereof shall have been previously filed, and Seller
shall transfer and convey, or cause to be transferred and conveyed, to Buyer at
Closing good and marketable title to all of the Assets free and clear of all
Liens, except for Permitted Liens.  Seller shall deliver to Buyer lien search
reports prepared by an independent, nationally recognized reporting service
dated no earlier than 15 days prior to the Closing, reflecting the results of
UCC, tax and judgment lien searches conducted by Seller.
 
ARTICLE 7                      
 
CONDITIONS PRECEDENT
 
7.1 To Buyer’s Obligations Regarding Closing.  The obligations of Buyer
hereunder to complete the transactions contemplated by this Agreement are
subject to the satisfaction or to the waiver by Buyer in its sole discretion at
or prior to the Closing of the following (“Buyer’s Closing Conditions”):
 
(a) Representations, Warranties and Covenants.
 
(i) All representations and warranties made by Seller contained in this
Agreement shall be true and correct as of the date of this Agreement and on the
Closing Date as if made on the Closing Date except (i) where the failure of any
representations and warranties to be true and correct (without regard to any
materiality or Material Adverse Effect qualification) would not reasonably be
expected to have individually or in the aggregate a Material Adverse Effect, and
(ii) representations and warranties that are made as of a specific date shall
only be tested as of such date.
 
(ii) All of the terms, covenants and conditions to be complied with or performed
by Seller under this Agreement on or prior to the Closing Date shall have been
complied with or performed by Seller in all material respects.
 
(b) No Injunction.  No Order of any court or Governmental Authority shall be in
effect which restrains or prohibits the transactions contemplated by this
Agreement in accordance with its terms.  No Proceeding by or before any
Governmental Authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which would (i)
restrain, prohibit or invalidate the transactions contemplated by this
Agreement, or (ii) impose material restrictions, limitations or conditions with
respect to Buyer’s ownership of the Assets.
 
(c) Material Consents. Buyer shall have received the consents set forth on
Schedule 7.1(c) in form and substance reasonably satisfactory to Buyer
(collectively “Material Consents”).
 
(d) Deliveries. Seller shall have made all deliveries required under
Section 8.1.
 
(e) No Material Adverse Effect.  There shall not have occurred a Material
Adverse Effect on the Business or with respect to the Assets since the date of
this Agreement.
 
(f) Release of Liens and Tax Clearance Certificates.  Buyer shall have received
evidence in form and substance reasonably satisfactory to it that all Liens,
other than Permitted Liens, affecting the Assets have been terminated and
released.
 
(g) Shareholder Approvals.  Holders of a majority of the outstanding voting
stock of Seller shall (x) have approved the transaction contemplated by this
Agreement and (y) have terminated Seller’s obligation, pursuant to that certain
Restructuring Agreement, dated December 2, 2005, to make Tender Offers (as
defined therein) to Seller’s shareholders.
 
(h) Hearst and Post-Newsweek.  Buyer shall have reached agreement with each of
Hearst Television Inc. and Post-Newsweek Stations, Inc. regarding modifications
to their respective Contracts with Seller which will be assigned to and assumed
by Buyer.
 
7.2 To Seller’s Obligations.  The obligations of Seller hereunder to complete
the transactions contemplated by this Agreement are subject to the satisfaction
or to the waiver by Seller in its sole discretion, at or prior to the Closing of
the following (“Seller’s Closing Conditions”):
 
(a) Representations, Warranties and Covenants.
 
(i) All representations and warranties made by Buyer in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
on the Closing Date as if made on and as of that date, except those made as of a
specific date, which shall have been true and correct on and as of such date.
 
(ii) All of the terms, covenants and conditions to be complied with or performed
by Buyer under this Agreement on or prior to the Closing Date shall have been
complied with or performed by Buyer in all material respects.
 
(b) No Injunction.  No Order of any court or Governmental Authority shall be in
effect which restrains or prohibits the transactions contemplated by this
Agreement in accordance with its terms.  No Proceeding by or before any
Governmental Authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which would restrain,
prohibit or invalidate the transactions contemplated by this Agreement.
 
(c) Deliveries.  Buyer shall have made all the deliveries required under Section
8.2 and shall be prepared to pay the Purchase Price as provided in Section 2.1.
 
(d) Shareholder Approvals.  Holders of a majority of the outstanding voting
stock of Seller shall (x) have approved the transaction contemplated by this
Agreement and (y) have terminated Seller’s obligation, pursuant to that certain
Restructuring Agreement, dated December 2, 2005, to make Tender Offers (as
defined therein) to Seller’s shareholders.
 
(e) Hearst and Post-Newsweek.  Buyer shall have reached agreement with each of
Hearst Television Inc. and Post-Newsweek Stations, Inc. regarding modifications
to their respective Contracts with Seller which will be assigned to and assumed
by Buyer.
 
ARTICLE 8
 
DOCUMENTS TO BE DELIVERED AT THE CLOSING
 
8.1 Documents to be Delivered by Seller.  At the Closing, Seller shall deliver
to Buyer the following items:
 
(a) Good standing certificates issued by the Secretary of State of Seller’s
jurisdiction of formation and each of the jurisdictions in which Seller is
required by law to be qualified as a result of its ownership of the Assets or
operation of the Business dated no earlier than ten days prior to the Closing
Date;
 
(b) Copies of resolutions of the board of directors and shareholders of Seller,
authorizing the execution, delivery and performance of this Agreement and the
Related Documents and the consummation of the transactions contemplated by this
Agreement, and copies of Seller’s Organizational Documents, in each case
certified on behalf of Seller by a duly authorized officer of Seller, as being
true, correct, in full force and effect and complete as of the Closing Date;
 
(c) A certificate for Seller, dated as of the Closing Date, executed by an
officer of Seller, certifying on behalf of Seller that the closing conditions
specified in Section 7.1(a) and 7.1(b) have been satisfied;
 
(d) Duly executed instruments of conveyance and transfer effecting the sale,
transfer, assignment and conveyance of the Assets to Buyer as contemplated
herein and mutually agreed upon by Buyer and Seller, including the following:
 
(i) a general bill of sale from Seller for all Assets, in customary form
reasonably satisfactory to Buyer and Seller;
 
(ii) intellectual property assignments duly executed by the Seller assigning the
Intellectual Property to Buyer, in customary form reasonably satisfactory to
Buyer and Seller;
 
(iii) domain name transfers duly executed by Seller assigning the Business’
domain names included in the Material Intellectual Property, including the
domain names listed on Schedule 4.23(b) to Buyer;
 
(iv) assignment and assumption agreement assigning the Leased Real Property from
Seller to Buyer, in customary form reasonably satisfactory to Buyer and Seller;
 
(v) assignments and assumptions of contracts assigning the Assumed Contracts to
Buyer, in customary form reasonably satisfactory to Buyer and Seller;
 
(vi) assignment of the Accounts Receivable; and
 
(vii) an estoppel certificate, in form and substance reasonably satisfactory to
Seller and Buyer, confirming the material terms of the Real Estate Lease duly
executed by Seller and the landlord.
 
(e) An affidavit of non-foreign status of Seller that complies with Section 1445
of the Code, in customary form reasonably satisfactory to Buyer and Seller;
 
(f) Duly executed UCC releases, lien terminations, or other similar documents or
instruments required to transfer the Assets free and clear of Liens, other than
Permitted Liens, along with evidence in form and substance satisfactory to
Buyer, acting reasonably, that all such Liens affecting the Assets have been
terminated and released;
 
(g) Endorsed motor vehicle title certificates;
 
(h) The Material Consents and all other consents received by Seller prior to the
Closing Date;
 
(i) Physical possession of the tangible Assets to Buyer, and keys and security
access codes to all Leased Real Property.  Seller shall also make available to
Buyer all books and records of Seller relating to or reasonably required for the
operation of the Business, including copies of all Assumed Contracts, financial
and accounting records, files and records relating to Transferred Employees and
all related correspondence, and all log-in credentials for all websites, domain
names, and social media accounts relating to the Business;
 
(j) The Escrow Agreement; and
 
(k) Such other documents, information, certificates and materials as may be
reasonably required by Buyer.
 
8.2 Documents to be Delivered by Buyer.  At the Closing, Buyer shall deliver to
Seller the following items:
 
(a) A certificate for Buyer, dated as of the Closing Date, executed on behalf of
Buyer by duly authorized representatives of Buyer, certifying that the closing
conditions specified in Sections 7.2(a) and 7.2(b) have been satisfied;
 
(b) An assumption agreement assuming the Assumed Contracts, in customary form
reasonably satisfactory to Buyer and Seller;
 
(c) The Purchase Price pursuant to Section 2.1(a) in immediately available wire
transferred funds;
 
(d) The Escrow Agreement;
 
(e) the assignment and assumption agreement assigning the Leased Real Property
from Seller to Buyer; and
 
(f) Such other documents, information, certificates and materials as may be
required by this Agreement.
 
ARTICLE 9
 
INDEMNIFICATION
 
9.1 Seller’s Indemnities.  Seller shall indemnify, defend, and hold harmless
Buyer, its Affiliates, and their respective shareholders, directors, officers,
employees, agents and representatives and all of their successors and assigns
(collectively, “Buyer Indemnified Parties”) from and against, and reimburse them
for, any and all claims, damages, liabilities, losses, judgments, fines,
penalties, costs, taxes and expenses, including interest, penalties, court costs
and reasonable attorneys’ fees and expenses (each, a “Loss” and together,
“Losses”), resulting from, related to, or in connection with:
 
(a) Any breach or misrepresentation by Seller of any of its representations or
warranties in this Agreement, in any Related Documents or in the certificate
delivered pursuant to Section 8.1(c) (in each case, without giving effect to any
materiality or Material Adverse Effect qualifiers);
 
(b) Any breach or other violation by Seller of any of its covenants or
agreements in this Agreement or in any Related Documents;
 
(c) Any Excluded Assets and Retained Liabilities;
 
(d) The ownership, business or operations of the Business before the Closing
Date;
 
(e) Without limiting the generality of the foregoing, except to the extent
included in the Assumed Liabilities, the failure of Seller to timely withhold,
collect, pay or remit any sales or use Tax or payroll or employment Tax imposed
by any federal, state or local Taxing authority in connection with Seller’s
operations or the payment of any wages or compensation or the employment of any
Persons by Seller on or before the Closing Date;
 
(f) Any action or inaction taken by the Shareholder Representative;
 
(g) Any claim made by a COBRA Beneficiary pursuant to the coverage such COBRA
Beneficiary is receiving from the Seller or its Affiliates under COBRA for
health care claims incurred by such COBRA Beneficiary during the period from the
Closing Date to the first (1st) anniversary of the Closing Date, reduced by any
stop-loss insurance coverage applicable and employee insurance premiums paid
with respect to such claims; or
 
(h) Any fees or expenses (including without limitation, reasonable attorneys’
fees) incurred by Buyer in enforcing its rights hereunder; provided Buyer is the
prevailing party.
 
9.2 Buyer’s Indemnities.  Buyer shall indemnify, defend and hold harmless
Seller, its Affiliates, and their respective shareholders, directors, officers,
employees, agents and representatives and all of their successors and assigns
(collectively, “Seller Indemnified Parties”) from and against, and reimburse
them for, all Losses resulting from:
 
(a) Any breach or other violation by Buyer of any of its representations or
warranties in this Agreement, in any Related Documents or in the certificate
delivered pursuant to Section 8.2(a) (in each case, without giving effect to any
materiality qualifiers);
 
(b) Any breach, misrepresentation, or other violation by Buyer of any of its
covenants or agreements in this Agreement or in any Related Documents;
 
(c) Any Assumed Liability;
 
(d) The ownership, business or operations of the Business subsequent to the
Closing Date; or
 
(e) Any fees or expenses (including without limitation, reasonable attorneys’
fees) incurred by Seller in enforcing its rights hereunder; provided Seller is
the prevailing party.
 
9.3 Procedure for Indemnification.  The procedure for indemnification shall be
as follows:
 
(a) The Party seeking indemnification under this Article 9 (the “Claimant”)
shall give notice to the Party from whom indemnification is sought (the
“Indemnitor”) of any claim or liability that might result in an indemnified Loss
(an “Indemnified Claim”), specifying in reasonable detail (i) the factual basis
for and circumstances surrounding the Indemnified Claim, together with
supporting documentation; and (ii) the amount of the potential Loss pursuant to
the Indemnified Claim if then known.  If the Indemnified Claim relates to a
Proceeding filed by a third party against Claimant, notice shall be given by
Claimant as soon as practical, but in all events within twenty (20) business
days of the later of (i) the Claimant learning of the Proceeding, or (ii) the
Claimant receiving written notice of the Proceeding. In all other circumstances,
notice shall be given by Claimant as soon as practical, but in all events within
twenty-five (25) business days after Claimant becomes aware of the facts giving
rise to the potential Loss; provided, however, that should the Claimant fail to
notify the Indemnitor in the time required above, the Indemnitor shall only be
relieved of its obligations pursuant to this Article 9 to the extent the
Indemnitor is materially prejudiced by such delay or failure to timely give
notice of an Indemnified Claim or potential Loss.
 
(b) The Claimant shall make available to Indemnitor and/or its authorized
representatives the information relied upon by the Claimant to substantiate the
Indemnified Claim or Loss and shall make available any information or
documentation in Claimant’s possession, custody or control that is or may be
helpful in defending or responding to the Indemnified Claim or Loss.
 
(c) The Indemnitor shall have thirty (30) days after receipt of the
indemnification notice referred to in sub-section (a) to notify the Claimant in
writing that it elects to conduct and control the defense of any such
Indemnified Claim; provided, however, such thirty (30) day period shall be
reduced to such shorter period of time set forth in the applicable
indemnification notice if the Indemnified Claim or Loss is based upon a
third-party claim requiring a response in fewer than thirty (30) days.
 
(d) If the Indemnitor does not advise the Claimant of its intent to conduct and
control the defense of the Indemnified Claim or Proceeding within the time
period specified above, the Claimant shall have the right to defend, contest,
settle, or compromise such Indemnified Claim or Proceeding.  If the Indemnitor
properly advises the Claimant that it will conduct and control the
Indemnification Claim or Proceeding, the Indemnitor shall have the right to
undertake, conduct, defend, and control, through counsel of its own choosing and
at its sole expense, the conduct, defense, and settlement of the Indemnified
Claim or Proceeding, and the Claimant shall cooperate with the Indemnitor in
connection therewith.  Notwithstanding the foregoing or anything else herein to
the contrary, (i) the Indemnitor shall not consent to the imposition of any
injunction against the Claimant without the prior written consent of the
Claimant, which consent shall not be unreasonably withheld; (ii) the Indemnitor
shall permit the Claimant to participate in such conduct or settlement through
counsel chosen by the Claimant, but the fees and expenses of such counsel shall
be borne by the Claimant; (iii) upon a final determination of Proceeding, the
Indemnitor shall promptly reimburse the Claimant for the full amount of any
indemnified Loss or indemnified portion of any Loss resulting from the
Indemnified Claim or Proceeding and all reasonable expenses related to such
indemnified Loss incurred by the Claimant, except (A) fees and expenses of
counsel for the Claimant in the event that Indemnitor has conducted or
controlled the Proceeding and (B) any Loss not indemnifiable by Indemnitor; and
(iv) no Indemnitor may, without the prior written consent of the Claimant,
settle or compromise, or consent to the entry of any judgment in connection
with, any Proceeding with respect to the claim described in the indemnification
notice unless (A) such settlement or compromise involves only the payment of
money; (B) there is no finding or admission of liability, any violation of any
Law or any violation of the rights of any Person by the Claimant; and (C) the
Indemnitor obtains an unconditional release of each Claimant from all
Indemnified Claims or potential Loss arising out of the claim described in the
indemnification notice and any Indemnified Claim or Proceeding related thereto.
 
9.4 Limitations.
 
(a) Seller shall only be required to indemnify Buyer under this Article 9 up to
a maximum aggregate liability of (i) Two Million Five Hundred Thousand Dollars
($2,500,000) provided that a claim is made prior to the six (6) month
anniversary of the Closing Date; or Two Million Dollars ($2,000,000) if no such
claim is so made (as applicable, the “Cap”) for any claim or claims for Losses,
and (ii) the maximum aggregate liability of Buyer shall not exceed the
Cap.  There is no deductible which must be satisfied before Buyer may seek
recovery under this Agreement.
 
(b) Claims for fraud with scienter or breaches of Sections 4.1, 4.2, 5.1 and 5.2
shall not be subject to the limitations of this Section 9.4.
 
9.5 Certain Limitations.  In calculating the amount of Losses of a Claimant
under this Article 9 any claim for indemnification under this Agreement shall be
reduced and offset dollar-for-dollar by any insurance payment with respect to
the matter for which indemnification is sought, in each case as and when
actually received by the Party claiming indemnification.
 
9.6 Survival.  Unless otherwise specified herein, each covenant and agreement
contained in this Agreement, the Schedule of Exceptions or in any Related
Document and required to be performed after the Closing shall survive the
Closing Date and all representations and warranties contained in this Agreement
and each covenant or agreement contained in this Agreement that is required to
be performed at or prior to the Closing shall survive the Closing and will
remain in full force and effect for a period of twelve (12) months after the
Closing Date; provided that claims for fraud shall not be subject to such
limitations.
 
9.7 Exclusive Remedy following the Closing.  Buyer and Seller acknowledge and
agree that, if the Closing occurs, the indemnification provisions of this
Article 9 shall be the sole and exclusive remedies of Buyer and Seller for any
breach of the representations or warranties or nonperformance of or default
under any covenants or agreements of Buyer or Seller contained in this Agreement
or any Related Documents, and neither party shall have any liability to the
other party under any circumstances for special, indirect, consequential,
punitive or exemplary damages, or lost profits, provided, however, that nothing
contained in this Agreement shall relieve or limit the liability of any party
from any liability or Losses arising out of or resulting from such party’s fraud
with scienter in connection with the transactions contemplated in this Agreement
or the Related Documents.  In furtherance of the foregoing, each of Buyer and
Seller hereby waive, to the fullest extent permitted under applicable law,
except in the case of fraud with scienter, any and all rights, claims and causes
of action it may have against the other arising under or based upon any federal,
state or local law, rule or regulation (including any such rights, claims or
causes of action arising under or based upon common law, tort or otherwise and
relating to this Agreement or any Related Documents); provided, however, that
notwithstanding the foregoing any Party may pursue injunctive relief following
the Closing to enforce covenants in the Agreement that survive such Closing and
are supportable under applicable Law.
 
9.8 Mitigation of Damages.  Each of Buyer and Seller agrees to use reasonable
efforts to mitigate any Losses which form the basis for any claim for
indemnification, defense, hold harmless, payment or reimbursement hereunder
other than with respect to claims for the indemnification of Assumed Liabilities
or Excluded Liabilities. Notwithstanding anything contained in this Agreement to
the contrary, no Party will be entitled to lost profits, punitive damages or
other special or consequential damages regardless of the theory of recovery.
 
9.9 Shareholder Representative.  Seller shall provide for a representative to
represent Seller and all other shareholders (the “Shareholder Representative”)
with respect to the Escrow Deposit and all other matters which may arise under
this Agreement after the Closing or in connection with the dissolution and
winding up of Seller.  Seller shall provide Buyer with the name and contact
information for the Shareholder Representative at or prior to Closing.  The
Shareholder Representative shall have been duly appointed as agent and
attorney-in-fact of the stockholders and his or its actions shall be binding on
the stockholders.  Notwithstanding anything to the contrary in this Agreement,
including without limitation Section 11.11, the Shareholder Representative and
his or its representatives and agents shall be given all such access as it may
reasonably require to the books and records of Seller and to such personnel or
representatives of Buyer as it may reasonably require for the purposes of
resolving any disputes or responding to any matters raised with respect to any
adjustments to the Purchase Price, any claim for indemnification, or any other
matter or dispute arising under or related to this Agreement.  Buyer shall have
no obligation or liability to any shareholder for any action or inaction taken
by the Shareholder Representative with respect to the Transaction or the Closing
or any Shareholder Representative action or inaction taken after the Closing
Date.
 
ARTICLE 10
 
TERMINATION RIGHTS
 
10.1 Termination.
 
(a) This Agreement may be terminated prior to the Closing by either Buyer or
Seller upon five (5) days’ written notice to the other Party, if:
 
(i) the other Party is in material breach of this Agreement and such breach has
been neither cured or agreed to be cured in a manner reasonably acceptable to
the non-breaching Party within the cure period allowed under subsection (c)
below nor waived by the Party giving such termination notice and in each such
case such breach would give rise to the failure of a condition in Sections
7.1(a) or 7.2(a), provided that the Party seeking to terminate is not in
material breach of this Agreement;
 
(ii) a court of competent jurisdiction or Governmental Authority shall have
issued an Order, decree or ruling or taken any other action permanently
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; or
 
(iii) the Closing has not occurred by April 16, 2014.
 
(b) This Agreement may be terminated by mutual written consent of Buyer and
Seller.
 
(c) If either Party believes the other to be in breach or default of this
Agreement, the non-defaulting Party shall, prior to exercising its right to
terminate under Section 10.1(a)(i), provide the defaulting Party with notice
specifying in reasonable detail the nature of such breach or default.  Except
for a failure to pay the Purchase Price, the defaulting Party shall have fifteen
(15) days from receipt of such notice to cure such default or if such default is
not capable of being cured in fifteen (15) days of such notice, the defaulting
Party shall have agreed to cure such default in a manner reasonably acceptable
to the non-breaching Party, but not beyond the date that is five (5) business
days after the scheduled Closing Date.
 
10.2 Termination Fee.
 
(a) Payable to Seller.  In the event that Seller terminates this Agreement
pursuant to Section 10.1(a)(iii) due solely to Buyer’s breach of its
representation and warranty in Section 5.6 (Financing) and immediately prior to
any such termination Seller was not in material breach of the terms and
conditions of this Agreement, then Buyer shall pay Seller a termination fee in
an amount equal to Two Hundred Fifty Thousand Dollars ($250,000).
 
(b) Payable to Buyer.  In the event that Buyer terminates this Agreement
pursuant to Section 10.1(a)(iii) solely due to Seller’s failure to satisfy
Buyer’s Closing Condition as set forth in Section 7.1(g) and immediately prior
to any such termination, Buyer was not in material breach of the terms and
conditions of this Agreement, then Seller shall pay Buyer a termination fee in
an amount equal to Two Hundred Fifty Thousand Dollars ($250,000).  The amount
payable pursuant to this Section 10.2(a) or (b) is the “Termination Fee”.
 
(c) The Termination Fee shall be paid by wire transfer of same-day funds on the
fifth (5th) business day following the date of termination of this
Agreement.  The Parties acknowledge and agree that in the event of a termination
referenced in Section 10.2(a) or (b), that damages would be difficult or
impossible to quantify with reasonable certainty, and accordingly the payments
provided for in this Section 10.2 is a payment of liquidated damages (and not
penalties) which is based on the Parties’ estimate of the damages the other
Party will suffer or incur as a result of the event giving rise to such payment
and the resultant termination of this Agreement, and is the sole and exclusive
remedy with respect to any termination referenced in Section 10.2(a) or (b) and
is the other Party’s sole and exclusive remedy (whether at law, in equity, in
contract, in tort or otherwise) with respect to a termination referenced in
Section 10.2(a) or (b) against the other for any and all damages suffered in
connection with this Agreement (or the termination thereof), and upon payment of
the Termination Fee, none of the other Party, nor any of the other Party’s
subsidiaries nor any of their respective former, current or future stockholders,
directors, officers, Affiliates or agents shall have any further liability or
obligation relating to or arising out of this Agreement, or the transactions
contemplated hereby and the only liability, in the aggregate, of the other Party
in the event of a termination referenced in Section 10.2(a) or (b) shall be the
Termination Fee, and in no event shall the other Party or any of their
respective subsidiaries or Affiliates seek any other recovery, judgment or
damages of any kind, including consequential, indirect or punitive damages,
against the other Party, whether by or through a claim by or on behalf of the
other Party, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute, regulation or applicable Law, or
otherwise, whether at law or equity, in contract, in tort or otherwise in the
event of a termination referenced in Section 10.2(a) or (b) except for its
rights to recover the Termination Fee under and to the extent provided in this
Section 10.2.  Each Party irrevocably waives any right it may have to raise as a
defense that any such liquidated damages are excessive or punitive.
 
10.3 Other Effects of Termination.  If this Agreement is terminated other than
pursuant to Section 10.1, this Agreement shall become null and void and of no
further force and effect, except for the following provisions: 6.5
(Confidentiality), 10.2 (Termination Fee), 10.3 (Other Effects of Termination),
and the provisions in Article 13 (Other Provisions) and Article 14 (Definitions)
that by their terms would survive termination.
 
ARTICLE 11
 
EMPLOYEES AND EMPLOYEE PLANS
 
11.1 Employees.  Schedule 11.1 sets forth a true and complete list of each
employee as of February 28, 2014 (the “Employees”), together with such
Employee’s name, position department, and date of hire, including any employee
who is an inactive employee on paid or unpaid leave of absence.  For each such
Employee, the aforementioned list includes the location of the Employee, current
compensation rate, and any other compensation arrangement as of the date of
delivery, including bonuses, accrued PTO, vehicle usage, severance or other
perquisites.  Schedule 11.1 shall be updated to reflect employees hired between
the date of such Schedule and the Closing Date, as well as those employees
terminated between the date of such Schedule and the Closing Date, not more than
four (4) business days prior to the Closing and again not more than four (4)
business days after the Closing Date.  In addition, Schedule 11.1 shall be
updated not more than five (5) business days after the Closing Date to reflect
the cash payments to be paid to Employees by Seller with respect to accrued and
unused PTO.  On the Closing Date, Seller shall terminate the employment of all
of Seller’s Employees, other than (a) employees on leave as of such date
(unless, with respect to employees on leave, the Parties otherwise agree at such
Closing, the “Retained Employees”) and (b) employees with Assigned Employment
Agreements.  Seller shall retain the employment of the Retained Employees until
the end of such employee’s leave or until such employment would otherwise
terminate in accordance with Seller’s leave policies.  Buyer shall assume any
reinstatement obligations with respect to any Retained Employee and shall
promptly offer such Retained Employee employment at such time as they are able
to return to work, provided that such employees are able to return to work and
apply for reinstatement within any time period required by Law.
 
11.2 Offer of Employment.  Not later than two (2) days prior to the Closing
Date, Buyer shall (i) offer employment at will to all Employees without Assigned
Employment Agreements other than the Retained Employees, contingent and
effective upon the Closing, and (ii) assume the liabilities and obligations any
Contracts which are set forth on Schedule 1.1(c) under the heading “Employment
Agreements” (the “Assigned Employment Agreements”).  Seller and Buyer agree
that, prior to the Closing Date, they will cooperate in the preparation of any
and all communications with Employees with respect to the intent of Buyer to
offer employment to all Employees on the Closing Date consistent with this
Section 11.2.  Employees who accept or are treated by Buyer as accepting such
offers of employment (including Retained Employees who become employees of Buyer
subsequent to the Closing) or who are employees under an Assigned Employment
Agreement and actually commence employment with Buyer in accordance are referred
to collectively herein as the “Transferred Employees.”  For the avoidance of
doubt, Buyer shall not owe any obligation to, any Employee who is not a
Transferred Employee (other than any reinstatement obligation owed to Retained
Employees).  Buyer’s offers of employment shall be made to each employee at each
such employee’s current title and base compensation.
 
11.3 No Assumption of Company Plans.   Seller or its Affiliates will be
responsible for the maintenance and distribution of benefits accrued through and
including the Closing under any Company Plan, pursuant to the provisions of any
Law and of such plans.  Without limiting the generality of this Section 11.3,
Buyer will not assume any obligation or liability for any such accrued benefits
or any fiduciary or Company Plan, except as required by Law.
 
11.4 Benefits Generally.  For a period of one (1) year after Closing, provided
the applicable Transferred Employee is still employed by Buyer, and subject to
any limitations set forth in any plan of Buyer, any Assigned Employment
Agreement, or applicable Law, Buyer shall provide to each Transferred Employees
that it hires, (i) the same salary or wage paid to such employee on the date
hereof and (ii) such other employee benefits that are no less favorable in the
aggregate than the employee benefits Buyer provides to its similarly situated
employees.  Unless otherwise provided under the terms of an Assigned Employment
Agreement, each Transferred Employee shall be employed by Buyer on an at will
basis and nothing shall prohibit Buyer from terminating the employment of any
such Transferred Employees at any time after the Closing Date or changing any of
the terms and conditions of employment related to such Transferred Employees at
any time, except for such changes that are inconsistent with Buyer’s obligations
as set forth in this Section 11.4.
 
11.5 Health & Welfare Benefits.  The medical, dental and health plans of Buyer
that would be applicable to Transferred Employees shall be offered and extended
to such employees effective as of the Closing Date under the terms and
conditions of such plans then in effect.  Notwithstanding the foregoing, for
purposes of providing group health plan coverage, Buyer shall waive all
pre-existing conditions and waiting periods for each Transferred Employee (and
for the spouse and dependents of such employee) covered by the group health
plans immediately prior to the Closing, and shall provide health care coverage
under Buyer’s plans effective as of the Closing without the application of any
eligibility waiting period for coverage except to the extent such persons were
subject to such pre-existing condition limitations under Seller’s group health
plan.  In addition, Buyer shall credit all payments made by a Transferred
Employee (and the spouse and dependents of such employee) for deductible limits
and out of pocket limits (as “out of pocket limits” are defined in Buyer’s
medical plan) under the group health plans for the plan year which includes the
Closing Date, as if such payments had been made for similar purposes under the
group health plans offered to the Transferred Employees (and their spouses and
dependents) under Seller’s benefits plans. Buyer and Seller agree that Seller
will be responsible for short-term and long-term disability coverage for any
Employees who experience a disability event prior to the Closing Date.  With
respect to run-off claims under Seller’s medical plan, which will be cancelled
at Closing, Seller shall pay for such run-off claims; provided, however, Buyer
will provide Seller with $150,000 of stop loss coverage at no cost to Seller.
 
11.6 401(k) Plan.  Effective as of the Closing Date or the payroll period ending
immediately after the Closing Date, Seller shall have contributed to Seller’s
401(k) plan all elective deferral and matching contributions with respect to the
Transferred Employees’ employment service rendered prior to the Effective Time
(irrespective of any end-of-year service requirements otherwise applicable to
such contributions) and cause the matching and other employer contribution
amounts of all Transferred Employees under the Seller 401(k) plan to become
fully vested as of the Closing Date.  Following the Closing Date, Seller shall
take all actions necessary or appropriate to ensure that under the terms of the
Seller 401(k) plan, each Transferred Employee with an account balance is
eligible to receive a distribution as a result of their termination of
employment with Seller.  From and after the Closing, Buyer shall permit each
Transferred Employee who participates in Seller’s 401(k) plan to elect to make
direct rollovers of their account balances (including any outstanding loan
balances) into Buyer’s 401(k) plan as of the Closing (or as soon as practicable
thereafter when Buyer’s 401(k) plan is capable of accepting such rollovers),
subject to compliance with applicable law and subject to the reasonable
requirements of Buyer’s 401(k) plan.
 
11.7 Vacation and Sick Leave.  To the extent permitted by applicable Law, each
Transferred Employee will be credited under Buyer’s vacation and sick leave
policy in relation to similarly situated employees of Buyer (after giving credit
for past service with Seller and its predecessors and Affiliates) as follows:
 
(a) all of such Transferred Employee’s accrued and unused personal time off
under Seller’s personal time off (“PTO”) policy as of the Closing Date, not to
exceed 40 hours, will be paid to such Transferred Employee by Seller as soon as
reasonably practicable following the Closing, and
 
(b) all Transferred Employees will accrue no more than Buyer’s maximum allowable
vacation time for such Transferred Employee’s years of service in calendar year
2014 prorated from the Closing Date.
 
11.8 Workers’ Compensation.  All workers’ compensation obligations relating to,
arising out of or resulting from any claim by any Employee that results from an
injury that occurred at or prior to the Effective Time shall be retained by
Seller.  All workers’ compensation obligations relating to, arising out of or
resulting from any claim by a Transferred Employee that results from an injury
that occurs after the Effective Time shall be the responsibility of the
Buyer.  Seller further agrees that (A) any Employee, including any Transferred
Employee, who has received an offer of employment from Buyer but has not yet
commenced employment with Buyer and who as of the Closing Date is receiving or
is entitled to receive short-term or long-term disability benefits under
Seller’s short-term or long-term disability benefit plans shall receive or
continue to be paid such benefits after the Closing in accordance with the terms
of the disability plans of Seller and (B) except as provided in Section 11.8,
Buyer shall have no obligation to provide any disability or other benefits or
compensation to any such Person.
 
11.9 COBRA Obligations.
 
(a) Buyer and Seller shall cooperate with each other to develop a communication
plan to Employees, with the goal of minimizing the number of Employees who do
not accept Buyer’s offer of employment.  Buyer acknowledges that it will be
considered a successor employer under the federal Law commonly known as COBRA to
those qualified beneficiaries (including covered employees) formerly covered
under Seller’s group health plan whose rights to obtain COBRA coverage arose on
or prior to the Closing Date, but only if Seller and its ERISA Affiliates
terminate all group health plan coverage on or after the Closing Date and before
the COBRA continuation period expires with respect to such qualified
beneficiaries.  Buyer’s obligation to provide such coverage shall arise at the
termination of the last group health plan offered by Seller and its ERISA
Affiliates.
 
(b) On the Closing Date, Seller will provide Buyer with Schedule 11.9 setting
forth a list of (i) each individual who is receiving or entitled to receive
COBRA coverage from Seller as of the date thereof (or potentially entitled to
receive COBRA coverage from Seller at a later time in the case of individuals in
their COBRA election period) (or is an eligible beneficiary of any of the
foregoing) (the “COBRA Beneficiaries”), (ii) the effective date of such coverage
for each such individual, (iii) the amount of the monthly COBRA cost with
respect to such individual and (iv) the expected duration of such coverage.
 
(c) To the extent Seller ceases to provide any COBRA Beneficiary with COBRA
coverage and such liabilities transfer to Buyer in advance of the one year
anniversary of the Closing Date, Buyer shall be deemed to have an automatic
claim against the Escrow Deposit Fund for payment of any Losses incurred by
Buyer arising directly or indirectly from any claim made by a COBRA Beneficiary
pursuant to the coverage such COBRA Beneficiary is receiving from Seller or its
Affiliates under COBRA for health care claims incurred by such COBRA
Beneficiaries during the period from the Closing Date to the first (1st)
anniversary of the Closing Date.
 
(d) To the extent any COBRA Beneficiary continues to receive COBRA coverage from
the Seller or any Seller Affiliate as of the first (1st) anniversary of the
Closing Date, then as of such date, Buyer shall be deemed to have an automatic
claim against the Escrow Deposit Fund (the “COBRA Fund”) for an amount in cash
equal to the lesser of (i) the product of the number of COBRA Beneficiaries on
such date, multiplied by $75,000 or (ii) the balance of the Escrow Deposit
Fund.  The COBRA Fund shall be used by Buyer as a source for payment of any
Losses incurred by Buyer arising directly or indirectly from any claim made by a
COBRA Beneficiary pursuant to the coverage such COBRA Beneficiary is receiving
from Seller or its Affiliates under COBRA for health care claims incurred by
such COBRA Beneficiaries during the period from the first (1st) anniversary of
the Closing Date through the second (2nd) anniversary of the Closing Date (such
Losses, “COBRA Claims”).  No later than ten (10) business days after the second
(2nd) anniversary of the Closing Date, Buyer shall pay to the Shareholder
Representative by wire transfer of immediately available funds to the account of
the Shareholder Representative notified to Buyer in writing no later than two
(2) business days prior to such tenth (10th) business day an amount, if
positive, in cash equal to the COBRA Fund less the aggregate amount of all
Losses incurred by Buyer arising directly or indirectly from such COBRA Claims,
reduced by any stop-loss insurance coverage payments and employee insurance
premiums actually received by Buyer with respect to such claims.  Any amounts
paid to the Shareholder Representative under this Section 11.9 shall be treated
as adjustments to the Purchase Price for Tax purposes and such agreed treatment
shall govern for purposes of this Agreement.
 
11.10 Past Service Credit.  Buyer shall recognize and credit to the Transferred
Employees service with Seller completed prior to the Closing Date under the
benefit plans and benefit arrangements available to such Transferred Employees
after the Closing Date to the extent recognized under the plans of Seller
covering such Transferred Employees prior to the Closing Date, but only to the
extent that recognition of such service is permitted by Law and does not result
in duplicate benefits.
 
11.11 No Third Party Beneficiaries.  The parties expressly acknowledge and agree
that nothing contained in this Article 11 or any other provision of this
Agreement, shall (i) be construed to establish, amend, or modify any benefit or
compensation plan, program, agreement, contract, policy or arrangement of Seller
or Buyer, (ii) limit the ability of Buyer or any of its Affiliates to amend,
modify or terminate any benefit or compensation plan, program, agreement,
contract, policy or arrangement at any time assumed, established, sponsored or
maintained by any of them, (iii) create any third-party beneficiary rights or
obligations in any Person (including any Employee or Transferred Employee) other
than the parties to this Agreement or create a contract between Buyer, Seller,
or any of their respective Affiliates on the one hand and any employee of Seller
on the other hand, and no employee of Seller may rely on this Agreement as the
basis for any breach of contract claim against Buyer or Seller, (iv) be deemed
or construed to require Buyer or any of its Affiliates to continue to employ any
particular employee of Seller or for any period after the Closing, or (v) be
deemed or construed to limit Buyer’s or any of its Affiliates’ right to
terminate the employment of any Transferred Employee during any period after the
Closing Date or confer on any Person any right to employment or continued
employment or to a particular term or condition of employment with Buyer or any
of its Affiliates.
 
11.12 Releases.  In the event Buyer terminates the employment of any Transferred
Employee during any period after the Closing Date and is able to obtain a
release from such Transferred Employee, Buyer will use reasonable efforts to
include the Seller as a released party in the release.
 
ARTICLE 12
 
OTHER AGREEMENTS
 
12.1 Access to Books and Records and Records Retention.  In addition to and not
in limitation of the provisions of Sections 6.2 and 9.9 hereof, from and after
the Closing Date, Seller and Buyer shall (i) each provide the other (at the
requesting Party’s sole cost and expense for out-of-pocket expenses paid to
other Persons) with such assistance as may reasonably be requested by any of
them in connection with the preparation of any Tax Return, audit or other
examination by any taxing authority, or Proceeding related to Liabilities for
Tax; and (ii) each retain for a period of seven (7) years and provide the other
with any records or other information that may be necessary for such Tax Return,
audit or examination, Proceeding, or determination; provided, that upon the
dissolution of Seller, Seller shall notify Buyer of the identity of the person
who shall retain possession of such records. Without limiting the generality of
the foregoing, Seller and Buyer shall each retain, as applicable, until the
applicable statutes of limitations (including any extensions thereof) have
expired, copies of all Seller Tax Returns, supporting work schedules and other
records or information that may be relevant to such returns for all Tax periods
or portions thereof ending before or including the Closing Date and shall not
destroy or otherwise dispose of any such records without first providing the
other party with a reasonable opportunity to review and copy the same.  For a
period of sixty (60) days following the Closing Date, Buyer shall allow
representatives of Seller, including the Shareholder Representative, with
reasonable access, upon reasonable written notice and at reasonable times, to
Seller’s books and records to enable Seller and the Shareholder Representative
to close out Seller’s financial records and associated matters; provided, in no
event after the Closing Date, will Seller or the Shareholder Representative be
provided with direct access to any of Buyer’s systems; provided, further that
upon Seller’s reasonable request, Buyer shall provide Seller with copies of such
documents as may only be obtained by access  to Buyer’s systems and shall
provide Seller with access to, or copies of, paper files, as reasonably needed
by Seller for preparation of Tax Returns, reviewing the Closing Statement,
dissolving and winding up Seller, dealing with matters related to
indemnification, responding to tax audits, disputes between the parties, and
other proper purposes.
 
ARTICLE 13
 
OTHER PROVISIONS
 
13.1 Transfer Taxes and Expenses.  Except as provided otherwise in this
Agreement, all Transfer Taxes imposed on this transaction shall be evenly split
between Seller on the one hand and Buyer on the other hand.  The parties will
cooperate in the preparation, execution and filing of all Tax Returns regarding
Transfer Taxes and in seeking or perfecting any available exemption from
Transfer Taxes.  Except as otherwise provided elsewhere in this Agreement, each
Party shall be solely responsible for and shall pay all other costs and expenses
(including attorney and accounting fees) incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement.
 
13.2 Benefit and Assignment.  This Agreement shall be binding upon and shall
inure to the benefit of the Parties hereto and their respective successors and
assigns.  Neither Buyer nor Seller may assign their rights or delegate their
obligations under this Agreement without the prior written consent of the other
Party; provided, that Buyer may assign this Agreement to an Affiliate without
Seller’s consent; provided further, that Buyer shall remain liable, jointly and
severally with such Affiliate, for all Buyer’s obligations hereunder.  Except as
expressly provided in this Agreement, this Agreement is not intended to, nor
shall it, create any rights in any person other than the Parties, the Buyer
Indemnified Parties and the Seller Indemnified Parties.
 
13.3 Additional Documents.  The Parties agree to execute, acknowledge and
deliver, before, at or after the Closing Date, such further instruments and
documents as may be reasonably required to implement, consummate and effectuate
the terms of this Agreement.
 
13.4 Entire Agreement; Schedules; Amendment; Waiver.  This Agreement and the
schedules hereto and thereto and the Related Documents embody the entire
agreement and understanding of the Parties hereto relating to the matters
provided for herein and supersede any and all prior agreements, arrangements and
understandings relating to the matters provided for herein.  Any matter that is
disclosed in a Schedule hereto shall be deemed to have been included in other
pertinent schedules, notwithstanding the omission of an appropriate
cross-reference.  No amendment, waiver of compliance with any provision or
condition hereof or consent pursuant to this Agreement shall be effective unless
evidenced by an instrument in writing signed by the Party against whom
enforcement of any waiver, amendment or consent is sought.  No failure or delay
on the part of Buyer or Seller in exercising any right or power under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.
 
13.5 Headings.  The headings set forth in this Agreement are for convenience
only and shall not control or affect the meaning or construction of the
provisions of this Agreement.
 
13.6 Computation of Time.  If after making computations of time provided for in
this Agreement, a time for action or notice falls on Saturday, Sunday or a
federal holiday, then such time shall be extended to the next business day.
 
13.7 Governing Law.  The construction and performance of this Agreement shall be
governed by the laws of the State of New York without regard to any choice or
conflicts of law provision or rule (whether of the State of New York or any
other jurisdiction).
 
13.8 Venue.  Each of the Parties hereby irrevocably submits to the exclusive
jurisdiction of the state courts of the State of New York located in Manhattan
County or in the absence of jurisdiction, of any federal court sitting in
Manhattan County, New York with respect to any action or proceeding arising out
of or relating to this Agreement; agrees that all claims with respect to any
such action or proceeding may be heard and determined in such respective courts;
and waives any objection, including, any objection to the laying of venue or
based on the grounds of forum non conveniens, which it may now or hereafter have
to the bringing of such action or proceeding in such respective
jurisdictions.  Each Party represents to the other Parties that this waiver is
given voluntarily and with full knowledge and understanding of its legal effect
after consultation with legal counsel.
 
13.9 Attorneys’ Fees.  In the event of any dispute between the Parties to this
Agreement, Seller or Buyer, as the case may be, shall reimburse the prevailing
Party for its reasonable attorneys’ fees and other costs incurred in enforcing
its rights or exercising its remedies under this Agreement. Such right of
reimbursement shall be in addition to any other right or remedy that the
prevailing Party may have under this Agreement.
 
13.10 Severability.  If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be held
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
 
13.11 Neutral Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement.  If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the Parties and no presumption or burden of proof will arise favoring
or disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement.
 
13.12 Notices.  Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be addressed to the following
addresses or to such other address as any Party may request:
 
 
If to Seller:
Internet Broadcasting Systems, Inc.

 
 
355 Randolph Avenue

 
 
St. Paul, Minnesota 55102

 
 
Attention: Steven Johansen

 
 
Telephone:  651-365-4005

 
 
sjohansen@ibsys.com

 
 
with a copy to:
Stinson Leonard Street LLP

 
 
150 South Fifth Street

 
 
Suite 2300

 
 
Minneapolis, Minnesota 55402

 
 
Attention:  Mark S. Weitz

 
 
Telephone:  612-335-1517

 
 
mark.weitz@stinsonleonard.com

 
 
If to Buyer:
Nexstar Broadcasting, Inc.

 
 
545 E. John Carpenter Freeway, Suite 700

 
 
Irving, Texas  75062

 
 
Attention: Thomas O’Brien

 
 
Telephone: 972-373-8800

 
 
tobrien@nexstar.tv

 
 
with a copy to:
Nexstar Broadcasting, Inc.

545 E. John Carpenter Freeway, Suite 700
Irving, Texas 75062
Attention: Elizabeth Ryder
Telephone: 972-373-8800
eryder@nexstar.tv

Any such notice, demand or request shall be deemed to have been duly delivered
and received (i) on the date of personal delivery, (ii) on the date of
transmission if sent by facsimile, (iii) on the date of receipt if mailed by
registered or certified mail, postage prepaid and return receipt requested, or
(iv) on the date of a signed receipt if sent by an overnight delivery service.
 
13.13 No Recourse.  This Agreement may only be enforced against, and any claim
or cause of action based upon, arising out of, or related to this Agreement or
the transactions contemplated hereby may only be brought against, the entities
that are expressly named as parties hereto and then only with respect to the
specific obligations set forth herein with respect to such party.
 
13.14 Counterparts.  This Agreement may be executed in one or more counterparts,
each of which will be deemed an original and all of which together will
constitute one and the same instrument.
 
13.15 Facsimile or PDF Signatures.  The Parties agree that transmission to the
other Party of this Agreement with its facsimile or electronic “pdf” signature
shall bind the Party transmitting this Agreement thereby in the same manner as
if such Party’s original signature had been delivered. Without limiting the
foregoing, each Party who transmits this Agreement with its facsimile or “pdf”
signature covenants to deliver the original thereof to the other Party as soon
as possible thereafter.
 
ARTICLE 14
 
DEFINITIONS
 
14.1 Defined Terms.  Unless otherwise stated in this Agreement, the following
terms when used herein shall have the meanings assigned to them below (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined).
 
“Accounts Payable” shall mean the outstanding accounts payable dated not more
than 60 days prior to the Closing Date, arising out of the operation of the
Business, as determined as of the Effective Time, as determined in accordance
with GAAP.
 
“Accounts Receivable” shall mean all receivables of Seller invoiced not more
than 120 days prior to the Closing Date issued with respect to services
performed by the Company for any third party, as determined as of the Closing
Date in accordance with GAAP; provided, however, the Accounts Receivable shall
not include any account receivable that has been disputed by a customer nor any
deferred asset resulting from a straight line adjustment for revenue for
multi-year contracts as required under GAAP.
 
“Affiliate” shall mean, with respect to any specified Person, another Person
that directly or indirectly Controls, is Controlled by, or is under common
Control with such specified Person.
 
“Agreement” shall mean this Agreement together with the Schedules attached
hereto.
 
“Acquisition Proposal” shall have the meaning set forth in Section 6.4.
 
“Assets” shall have the meaning set forth in Section 1.1.
 
“Assigned Employment Agreements” shall have the meaning set forth in Section
11.2.
 
“Assumed Contracts” shall have the meaning set forth in Section 1.1(c).
 
“Assumed Liabilities” shall have the meaning set forth in Section 1.3.
 
“Audited Financial Statements” shall have the meaning set forth in Section 4.15.
 
“Business” shall have the meaning set forth in the recitals.
 
“Buyer” shall have the meaning set forth in the preamble to this Agreement.
 
“Buyer Indemnified Parties” shall have the meaning set forth in Section 9.1.
 
“Buyer’s Closing Conditions” shall have the meaning set forth in Section 7.1.
 
“Cap” shall have the meaning set forth in Section 9.4(a).
 
“Claimant” shall have the meaning set forth in Section 9.3(a).
 
“Client” shall mean any advertising, professional services, or other customer of
Seller.
 
“Client Contract” shall mean any Contract between a Client and Seller.
 
“Client Intellectual Property” shall mean all Intellectual Property that is
owned by a Client or Client is licensed or otherwise permitted by other Persons,
and Client licenses such Intellectual Property to Seller, or Intellectual
Property Seller obtains on behalf a Client or is delivered with a Product to
Client.
 
“Closing” and “Closing Date” shall have the meaning set forth in Section 3.1.
 
“Closing Date Net Working Capital” shall have the meaning set forth in Section
2.2(b).
 
“Closing Statement” shall have the meaning set forth in Section 2.2(b).
 
“COBRA” shall mean the continuation coverage requirements under Section 4980B of
the Code.
 
“COBRA Beneficiaries” shall have the meaning set forth in Section 11.9(b).
 
“COBRA Claims” shall have the meaning set forth in Section 11.9(d).
 
“COBRA Fund” shall have the meaning set forth in Section 11.9(d).
 
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, or any subsequent legislative enactment thereof, as in
effect from time to time.
 
“Collection and Use” shall have the meaning set forth in Section 4.23(d).
 
“Company Plans” shall have the meaning set forth in Section 4.18(a).
 
“Company’s 2014 Management Incentive Compensation Plan” shall mean Seller’s
annual incentive compensation plan for 2014, pursuant to which Seller’s chief
executive officer proposes potential incentive compensation for the Seller’s
management and presents it to the compensation committee of the Seller’s board
of directors for consideration and approval or modification.
 
“Company’s 2014 Individual Bonus Offers” shall mean individual incentive
compensation offers made in 2014 by Seller’s managers to certain employees
(those certain employees being set forth in Schedule 4.18(a))  and presented to
the Seller’s chief executive officer for consideration and approval or
modification.
 
“Computer Hardware” shall mean any computer hardware, equipment and peripherals
of any kind and of any platform, including desktop and laptop personal
computers, handheld computerized devices, mid-range and mainframe computers,
process control and distributed control systems, and network telecommunications
equipment, whether or not connected to any network.
 
“Consulting Agreements” shall have the meaning set forth in Section 4.18(b).
 
“Contracts” shall mean all contracts, agreements, leases, non-governmental
licenses, employment agreements, commitments, understandings, options, rights
and interests, written or oral, including any amendments, extensions,
supplements and other modifications thereto used in the Business.
 
“Control” (including the terms “controlling,” “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 or policies of a Person, whether
through the ownership of voting securities or partnership, membership, trustee,
executor or other ownership interests, by contract or otherwise.
 
“Current Assets” shall mean (i) Accounts Receivable, (ii) prepaid expenses
attributable to the Business’s operations (including, but not limited to,
prepaid taxes and assessments, prepaid rentals, license fees, and similar
items), (iii) deposits related to the operations of the Business that are held
by third parties and (iv) other current assets attributable to the
Business.  The Current Assets will not include income tax assets or any amounts
attributable to Excluded Assets.
 
“Current Liabilities” shall mean Accounts Payable, other current liabilities and
accrued expenses, Deferred Revenues, and year-end bonuses for 2014 accrued
pursuant to the Company’s 2014 Management Incentive Compensation Plan and the
Company’s 2014 Individual Bonus Offers (but excluding accrued and unused PTO
balances) as of the Effective Time.  The Current Liabilities will not include
any amounts attributable to (i) Retained Liabilities, (ii) any deferred asset or
liability balances associated with the Company’s GAAP accounting for the office
lease, (iii) any amounts to be paid as transaction bonuses, together with any
other retention, success, change in control or similar bonuses payable to
employees or directors of the Company as a result of consummation of the
transactions contemplated hereunder, in each case together with the employer’s
portion of any employment Taxes associated therewith, (iv) all third-party fees,
costs and expenses (including those related to travel, legal, accounting or
investment banking) incurred by the Company on or prior to the Closing (whether
or not invoiced) and unpaid at the Closing, related to or arising out of the
negotiation, execution and delivery and consummation of the transactions
contemplated by this Agreement.
 
“Customer Information” shall have the meaning set forth in Section 4.23(d).
 
“Data” shall mean all information and data, whether in printed or electronic
form, and whether contained in a database or otherwise, and Internet websites
and related content.
 
 “Deferred Revenue” shall mean any unearned revenues of the Business that relate
to periods beginning as of the Effective Time to the extent that cash has been
received by Seller prior to the Effective Time with respect to such revenues;
provided, however, that Deferred Revenue shall not include any deferred revenue
resulting from straight-line adjustments of revenue for multi-year contracts as
required under GAAP.
 
“Developed Intellectual Property” shall mean Intellectual Property created,
developed, improved or modified by employees, agents, consultants or contractors
for Seller.
 
“Earnings” shall have the meaning set forth in Section 2.1(a).
 
“Effective Time” shall mean 12:01 a.m. central time on the Closing Date.
 
“Employees” shall have the meaning set forth in Section 11.1.
 
“Environment” means surface waters, ground waters, surface water sediment, soil,
subsurface strata, buildings, indoor air, ambient air and other environmental
medium.
 
“Environmental Laws” shall mean means any and all federal, state or local laws
(including common law), statutes, rules, regulations, codes, policies,
ordinances, orders, injunctions and directives, in effect on or prior to the
Closing Date: (a) related to releases or threatened releases of any Hazardous
Substance to the Environment; (b) governing the use, treatment, storage,
disposal, transport or handling of Hazardous Substances; or (c) related to the
protection of the Environment, occupational safety, and human health.  Such
Environmental Laws include the following federal laws: the Resource Conservation
and Recovery Act, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Emergency Planning & Community Right-to-Know Act, the Clean
Air Act, the Clean Water Act, the Safe Drinking Water Act, the Occupational
Health and Safety Act, as it relates to management of or exposure to hazardous
substances and the Toxic Substances Control Act.
 
“ERISA” shall have the meaning set forth in Section 4.18(a).
 
“ERISA Affiliate” shall have the meaning set forth in Section 4.18(g).
 
“Escrow Agent” shall have meaning set forth in Section 2.1(a).
 
“Escrow Agreement” shall have the meaning set forth in Section 2.1(a).
 
“Escrow Deposit” shall have the meaning set forth in Section 2.1(a).
 
“Escrow Deposit Fund” shall have the meaning set forth in Section 2.1(a).
 
“Estimated Net Working Capital” shall have the meaning set forth in Section
2.2(a).
 
“Estimated Net Working Capital Statement” shall have the meaning set forth in
Section 2.2(a).
 
“Example Net Working Capital” shall have the meaning set forth in Section
2.2(a).
 
“Excepted Intellectual Property” shall have the meaning set forth in Section
4.23(a).
 
“Excluded Assets” shall have the meaning set forth in Section 1.2.
 
“Financial Statements” shall have the meaning set forth in Section 4.15.
 
“Financing” shall have the meaning set forth in Section 6.9.
 
“GAAP” shall mean generally accepted accounting principles set forth in opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
as applied on a consistent basis by Seller, in each case as the same are
applicable to the circumstances as of the date of determination.
 
“Governmental Authority” shall mean any: (a) nation, state, county, city, town,
village, district, or other recognized jurisdiction of any nature; (b) federal,
state, local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); (d)
multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
 
“Hazardous Substances” shall mean any material, chemical, compound, mixture,
hazardous substance, hazardous waste, toxin, noise, radiation, mold, or other
pollutant or contaminant defined, listed, classified, regulated or prohibited
under any Environmental Laws.
 
“Indebtedness” means, without duplication, any Liability of the Business, Seller
or any of Seller’s Affiliates (i) for borrowed money whether current,
short-term, long-term, secured or unsecured (including all obligations for
principal, interest, premiums, penalties, fees, expenses and breakage costs and
other obligations related thereto), (ii) evidenced by any note, bond, debenture
or other debt security, (iii)  for the reimbursement of letters of credit,
bankers’ acceptance or similar credit transactions, (iv) arising under any
currency, interest rate swap, hedge or similar instrument, (v) with respect to
“off balance sheet” financings, or (vi) arising under a guaranty or similar
obligation with the respect to Liabilities of any other Person of the types
described in clauses (i) through (v) above.
 
“Indemnified Claim” shall have the meaning set forth in Section 9.3(a).
 
“Indemnitor” shall have the meaning set forth in Section 9.3(a).
 
“Independent Accountant” shall have the meaning set forth in Section 2.2(b).
 
“Intellectual Property” shall mean any or all of the following and all rights
in, arising out of, or associated therewith (including all applications or
rights to apply for any of the following, and all registrations, renewals,
extensions, future equivalents, and restorations thereof, now or hereafter in
force and effect): all United States, international, and foreign:
(1) proprietary inventions, discoveries and ideas, whether patentable or not,
patents, utility models, and applications therefor, and all reissues, divisions,
re-examinations, provisionals, continuations and continuations-in-part thereof,
and equivalent or similar rights anywhere in the world in inventions,
discoveries, and designs, including invention disclosures; (2) all trade secrets
and other rights in know-how and confidential or proprietary information,
including without limitation, schematics, databases, formulae, drawings,
prototypes, models, designs, vendor and supplier lists, advertiser lists, sales
lists, sponsor lists, business plans and strategies, marketing materials and
plans; (3) published and unpublished works of authorship, whether copyrightable
or not (including without limitation Software), all mask works, copyrights,
formats, programming materials and concepts, on air copy, on air talent concepts
and jingles, including, but not limited, to sound recording, public performance,
mechanical, synchronization, retransmission, rights, and all other rights
corresponding thereto (including moral rights), throughout the world; (4) all
rights in telephone numbers and World Wide Web addresses and domain names
(including, without limitation, e-mail addresses) and applications and
registrations therefor, and access and use rights with respect to any social
media accounts, and contract rights therein; (5) all trade names, call letters,
logos, slogans, symbols, trademarks and service marks, trade dress and all
goodwill, if any, associated therewith throughout the world; (6) rights of
privacy, publicity and personality; (7) all Software; (8) Data; (9) Computer
Hardware; (10) IT Systems; (11) any similar, corresponding, or equivalent rights
to any of the foregoing in items (1) through (10) above, anywhere in the world,
and all defenses, claims or causes of action arising out of or related to any
infringement, misappropriation or other violation of any of the foregoing,
including without limitation rights to recover for past, present and future
violations thereof.
 
“Interim Financial Statements” shall have the meaning set forth in Section 4.15.
 
“IRS” shall have the meaning set forth in Section 4.18(h).
 
“IT Systems” shall mean electronic data processing, information, recordkeeping,
communications, telecommunications, account management, inventory management and
other computer systems (including all Data, Software, Computer Hardware, and
databases) and Internet websites and related content.
 
“Knowledge” shall mean the actual knowledge of Elmer Baldwin, Steven Johansen,
Todd Carter or any president, chief financial officer, or any similar officer of
Seller and, with respect to Section 4.23(l) only, (i) each of the aforementioned
persons and any individual reporting directly to such person, (ii) Craig Blake
and any individual reporting directly to him, and (iii) each of Seller’s
employees in its Product Development, Infrastructure Services and Client Support
Departments, as listed on Seller’s Organizational Chart, dated March 11, 2014,
as delivered to Buyer.
 
“Law” shall mean any national, federal, state, local, international or other
law, statute, rule, regulation, ordinance, code, policy, Order, decree,
judgment, consent, settlement agreement or other governmental requirement
enacted, promulgated, entered into, agreed to or imposed by any Governmental
Authority.
 
“Leased Real Property” shall have the meaning set forth in Section 1.1(a).
 
“Liabilities” shall mean any liability or obligation of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same is
required to be accrued on the financial statements of any Person or is disclosed
on any Schedule to this Agreement.
 
“Liens” shall mean any charge, claim, community property interest, condition,
equitable interest, mortgage, deeds of trust, lien, security interest, option,
pledge, collateral assignment, right of first refusal, conditional sale or other
title retention agreement, indenture, encumbrance, adverse interest,
constructive trust or other trust, lease (other than Assumed Contracts and Real
Property Lease), encumbrance, claim, exception to or defect in title or other
ownership interest (including reservations, rights of entry, possibilities of
reverter, encroachments, easements, rights-of-way, restrictive covenants, leases
and licenses), or other charge or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership, or the filing of or agreement to give any
financing statement or other lien with respect to any assets or property under
the Uniform Commercial Code of any State, but shall not include liens for
current taxes not yet due and payable and other Permitted Liens.
 
“Loss” or “Losses” shall have the meaning set forth in Section 9.1.
 
“Material Adverse Effect” shall mean any event, transaction, condition, change
or effect that (individually or in the aggregate with all other such events,
transactions, conditions, changes or effects) has had or would reasonably be
expected to have a material adverse effect on the Assets, the Business,
properties, liabilities, financial condition or results of operation of the
Seller, taken as a whole or the ability of Seller to perform its obligations
under this Agreement; provided, however, that for purposes of determining
whether any Material Adverse Effect shall have occurred, there shall be excluded
and disregarded any event, transaction, condition, change or effect resulting
from or relating to (i) general business or economic conditions, or conditions
generally affecting the industry in which the Business operates which do not
disproportionately impact the Seller or the Business, (ii) any change in
accounting requirements or principles or in any applicable Laws, (iii) the
compliance with the terms of, or the taking of any action expressly required by,
this Agreement, (iv) acts of terrorism or military action or the threat thereof
which do not disproportionately impact the Seller or the Business, (v) the
announcement, execution and performance of this Agreement and (vi) any existing
event, occurrence or circumstance expressly described on a Schedule hereto,
solely to the extent such event, occurrence or circumstance is described
therein.
 
“Material Consents” shall have the meaning set forth in Section 7.1(c).
 
“Material Intellectual Property” shall mean all material Seller Owned
Intellectual Property, Seller Licensed Intellectual Property, Client
Intellectual Property and Registrable Intellectual Property.
 
“Net Working Capital” shall mean (a) Current Assets of the Company less (b)
Current Liabilities of the Company, as determined in accordance with Schedule
2.2(a).
 
“Net Working Capital Adjustment” shall have the meaning set forth in Section
2.2(a).
 
“Net Working Capital Target” shall mean ($100,000).
 
“Order” shall mean any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Authority or by any arbitrator.
 
“Ordinary Course of Business” shall mean an action taken by a Person will be
deemed to have been taken in the “Ordinary Course of Business” only if such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
 
“Organizational Documents” means the articles of incorporation, articles of
organization, certificate of organization, or similar organizational documents,
including any certificate of designation for any capital stock, as amended to
date, and the bylaws, operating agreement, and other similar organizational
documents, as amended to date, of an entity.
 
“Party” or “Parties” shall have the meaning set forth in the preamble to this
Agreement.
 
“Payment Date” shall have the meaning set forth in Section 2.2(b).
 
“Permit” shall mean any permit, franchise, certificate, consent, clearance,
waiver, notification, authorization, approval, registration or license granted
by or obtained from any Governmental Authority in accordance with applicable
Law.
 
“Permitted Liens” shall mean:
 
(i) purchase money security interest that may arise by operation of law for
inventory and supplies purchased in the Ordinary Course of Business and on
account, provided the amounts owed on such accounts are not past due;
 
(ii) Liens for taxes, assessments, levies, fees or governmental charges on the
Personal Property if the same shall not at the time be delinquent or are
contested by appropriate proceedings;
 
(iii) Liens of carriers, warehousemen, mechanics, material men and other Liens
imposed by law arising or incurred in the Ordinary Course of Business for
amounts that are not yet due and payable or that are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
created in accordance with GAAP and that are not resulting from any breach,
violation or default by Seller of any Contract or Law;
 
(iv) in the case of the Leased Real Property, (i) the rights of any thereunder
or any Lien granted by any lessor or any Lien that the Leased Real Property is
subject to; and
 
(v) zoning, building codes, and other land use laws regulating the use or
occupancy of Leased Real Property or the activities conducted thereon that are
imposed by a Governmental Authority having jurisdiction over Leased Real
Property, which are not violated by the current use or occupancy of the Leased
Real Property or the operation of the business thereon.
 
“Person” shall mean an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
 
“Personal Property” shall have the meaning set forth in Section 1.1(b).
 
“Proceeding” shall mean any action, arbitration, assertion, audit, hearing,
investigation, inquiry, litigation, mediation or suit (whether civil, criminal,
administrative, investigative, private or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator or under any Law.
 
“PTO” shall have the meaning set forth in Section 11.7(a).
 
“Public Software” shall mean Software which creates, or purports to create,
obligations for the user or grants, or purports to grant, to any third party any
rights or immunities under the user’s intellectual property or proprietary
rights in its Software (including, without limitation, open source Software and
any other Software that requires as a condition of use, modification and/or
distribution of Software that other Software incorporated into, derived from or
distributed with that Software be (i) disclosed or distributed in source code
form, (ii) licensed for the purpose of making derivative works, or (iii)
redistributable at no charge), quasi open source, community source, freeware,
shareware, public license, or “copyleft” Software, or similar Software,
including, without limitation, any software or program licensed or distributed
under any of the following licenses or distribution models or licenses or
distribution models similar to any of the following: (a) GNU’s 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, (e) the
Sun Community Source License (SCSL), (f) the Sun Industry Source License (SISL),
(g) BSD Licenses, and (h) the Apache Software License.
 
“Purchase Price” shall have the meaning set forth in Section 2.1.
 
“Real Estate Lease” shall have the meaning set forth in Section 4.5(a).
 
“Registrable Intellectual Property” shall have the meaning set forth in Section
4.23(b).
 
“Related Documents” shall mean a bill of sale, an assumption agreement, the
Escrow Agreement and any other written agreements, instruments, affidavits,
certificates and other documents executed by Seller, Buyer or any of their
respective Affiliates, as applicable, pursuant to this Agreement or in
connection with Buyer’s purchase of the Assets or any other transactions
contemplated by this Agreement, regardless of whether such agreements,
instruments, affidavits, certificates and other documents are expressly referred
to in this Agreement.
 
“Retained Liabilities” shall have the meaning set forth in Section 1.3(b).
 
“Schedule of Exceptions” shall have the meaning set forth in Article 4.
 
“Seller” shall have the meaning set forth in the preamble to this Agreement.
 
“Seller Indemnified Parties” shall have the meaning set forth in Section 9.2.
 
“Seller Intellectual Property” shall mean Seller Owned Intellectual Property and
Seller Licensed Intellectual Property.
 
“Seller Licensed Intellectual Property” shall mean all Intellectual Property
that a Seller is licensed or otherwise permitted by other Persons to use.
 
“Seller Owned Intellectual Property” shall mean all Intellectual Property owned
by a Seller.
 
“Seller’s Closing Conditions” shall have the meaning set forth in Section 7.2.
 
“Seller’s Shareholders” shall mean any Person who holds one or more shares of
the Seller’s stock or holds any rights to vote with respect to Seller’s stock.
 
“Shareholder Representative” shall have the meaning set forth in Section 9.9.
 
“Software” shall mean all rights in and to computer programs and/or software
programs (including all user-applications, source code, object code, executable
code, systems, firmware, programming tools and/or related documentation), Public
Software, machine readable databases and compilations, including any and all
Data and collections of Data, and all content contained on internet site(s), any
of the foregoing that is installed on Computer Hardware, the licenses and
sublicenses granted and obtained with respect thereto and the rights thereunder.
 
“Special Meeting of Seller’s Shareholders” the meaning set forth in Section
6.1(c).
 
“Tax” or “Taxes” shall mean all federal, state, local and foreign taxes and
other similar charges, imposed by any Governmental or taxing authority,
including, without limitation, income, gains, transfer, unemployment, workers’
compensation, withholding, payroll, social security, real property, personal
property, stamp, transfer excise, sales, gross receipts, ad valorem, use,
franchise taxes, profits, gains, property, transfer, payroll, intangible or
other taxes, value added, alternative or add-on minimum, estimated, unclaimed
property fees, levies, assessments, imposts, duties, licenses and registration
fees and charges of any nature whatsoever, including interest, penalties and
additions with respect thereto and any interest in respect of such additions or
penalties (whether payable directly or by withholding).
 
“Tax Return” shall mean any return, filing, report, declaration, questionnaire
or other document required to be filed for any period with any taxing authority
(whether domestic or foreign) in connection with any Taxes required to be filed
with any Governmental or taxing authority (whether or not payment is required to
be made with respect to such document).
 
“Termination Fee” shall have the meaning set forth in Section 10.2(b).
 
“Transaction” means the purchase and sale of Assets and the assumption of
obligations and liabilities as contemplated by this Agreement.
 
“Transfer Taxes” shall mean all United States federal, state, local or foreign
sales, use, transfer, real property transfer, mortgage recording, stamp duty,
value-added or similar taxes, costs, or fees that may be imposed in connection
with the transfer of the Assets, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties, including without limitation sales tax payable in connection with the
transaction contemplated by this Agreement.
 
“Transferred Employees” shall have the meaning set forth in Section 11.2.
 
“Union” shall have the meaning set forth in Section 4.18(m).
 
“WARN Act” shall have the meaning set forth in Section 4.18(c).
 
14.2 Miscellaneous Terms
 
. The definitions set forth or referenced in Section 14.1 apply equally to both
the singular and plural forms of the terms defined. The term “or” is
disjunctive; the term “and” is conjunctive. The term “shall” is mandatory; the
term “may” is permissive.  Masculine terms apply to females as well as males;
feminine terms apply to males as well as females. The term “includes” or
“including” is by way of example and not limitation.  The words “herein,”
“hereof” and “hereunder” and words of similar import refer to this Agreement
(including the Schedules) in its entirety and not to any part of this Agreement
unless the context otherwise requires.  All references to Articles, Sections,
and Schedules will be deemed references to Articles and Sections of, and
Schedules to, this Agreement unless the context otherwise requires.  Any
reference to a “day” or number of “days” (without the explicit qualifications of
“business”) will be interpreted as a reference to a calendar day or number of
calendar days.  Any reference to a “business day” means any day that is not a
Saturday, Sunday or day on which banks in New York, New York, are authorized or
required by law to close.  If any action or notice is to be taken or given on or
by a particular calendar day, and such calendar day is not a business day, then
such action or notice will be deferred until, or may be taken or given on, the
next business day.  All references to dollar amounts will be references to
United States Dollars.
 
[signature pages follow]
 

 
 
 

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

 

IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Agreement
to be duly executed as of the date first written above.
 

“Seller”
INTERNET BROADCASTING SYSTEMS, INC.

 
By: /s/ Elmer Baldwin

 
Name: Elmer Baldwin

 
Its: Chief Executive Officer

“Buyer”
NEXSTAR BROADCASTING, INC.

 
By: /s/ Thomas O'Brien

 
Name: Thomas O'Brien

 
Its: Executive Vice President