**TABLE OF CONTENTS**     **ARTICLE I PURCHASE AND SALE OF ASSETS**  **1**      1.1 Purchase and Sale of Assets  1 1.2 Excluded Assets  3 1.3 Assumption of Liabilities  4 1.4 Excluded Liabilities  4 1.5 Closing  6 1.6 Consent of Third Parties  6 1.7 Further Assurances  7 1.8 Withholding Rights  7 1.9 Transfer Taxes  7      **ARTICLE II PURCHASE PRICE; CONTINGENT PAYMENTS**  **7**      2.1 Purchase Price  7 2.2 Contingent Payments  7 2.3 Closing Prorations and Adjustments  10 2.4 Allocation of Purchase Price  10      **ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBER**  **10**      3.1 Organization, Good Standing and Qualification  11 3.2 Subsidiaries and Investments  11 3.3 Ownership of the Company  11 3.4 Authorization; Binding Obligation  12 3.5 Consents and Approvals  12 3.6 No Violation  12 3.7 Business Licenses  13 3.8 Title to and Condition of Properties; Sufficiency of Assets; Ownership of Assets  13 3.9 Real Property  14 3.10 Personal Property Leases  15 3.11 Environmental Matters  15 3.12 Financial Statements; No Undisclosed Liabilities  16 3.13 Absence of Certain Events  17 3.14 Legal Proceedings  18 3.15 Compliance with Laws  19 3.16 Employment Matters  19 3.17 No Brokers  21 3.18 Taxes  21 3.19 Contracts  21 3.20 Transactions With Affiliates  23 3.21 Insurance  24 3.22 Intellectual Property  24 3.23 [Reserved.]  27 3.24 Absence of Restrictions on Business Activities  27 3.25 Certain Business Practices  27 3.26 Anti-Terrorism Laws; Trading with the Enemy  27 3.27 Books and Records  28 3.28 [Reserved*.*]  28 3.29 Relationships with Clients and Vendors  28 3.30 Solvency  28 3.31 Disclosure  29 
 
 

 
     **ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE MEMBER**  **29**      4.1 Organization; Good Standing and Qualification  29 4.2 Authority; Execution; Enforceability  29 4.3 Title to Company Membership Percentages  29 4.4 Consents and Approvals  29 4.5 No Violation  30 4.6 Legal Proceedings  30      **ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER AND HSCC**  **30**      5.1 Organization; Good Standing and Qualification  30 5.2 Authorization; Binding Obligation  30 5.3 Consents and Approvals  31 5.4 No Conflict  31 5.5 No Brokers  31 5.6 Legal Proceedings  31      **ARTICLE VI PRE-CLOSING COVENANTS**  **31**      6.1 Access and Investigation  31 6.2 Conduct of Business  32 6.3 Consents and Approvals; Regulatory Filings  33 6.4 Commercially Reasonable Efforts  33 6.5 Update Schedules  33 6.6 Exclusivity  34 6.7 Confidentiality  34      **ARTICLE VII ADDITIONAL COVENANTS**  **35**      7.1 Public Announcements  35 7.2 Retention of and Access to Books and Records  35 7.3 Litigation Cooperation  35 7.4 Use of Names  35 7.5 Transition Matters  36 7.6 Accounts Receivable/Collections  36 7.7 Employment Matters  36      **ARTICLE VIII CONDITIONS TO CLOSING**  **38**      8.1 Conditions to Obligation of Each Party  38 8.2 Conditions to Obligations of the Buyer  39 8.3 Conditions to Obligations of the Company and the Member  40      **ARTICLE IX SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION**  **41**      9.1 Survival of Representations, Warranties and Covenants  41 9.2 Indemnification by the Company and the Member  42 9.3 Indemnification by the Buyer and HSCC  43 9.4 Limitations on Indemnification  43 9.5 Indemnification Process  44 9.6 Other Claims  46 9.7 Fraud and Related Claims; Exclusive Remedy  46 9.8 Characterization of Payments  46 9.9 Calculation of Losses  46 
 
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     **ARTICLE X TERMINATION**  **47**      10.1 Termination  47 10.2 Effect of Termination  48      **ARTICLE XI MISCELLANEOUS**  **48**      11.1 Entire Agreement  48 11.2 Successors and Assigns; No Third Party Beneficiaries  48 11.3 Amendment and Waiver  49 11.4 Expenses  49 11.5 Execution of Agreement  49 11.6 Governing Law; Venue  49 11.7 Specific Performance  49 11.8 Interpretation  50 11.9 Severability  50 11.10 Notices  50 11.11 Representation by Counsel  51 11.12 Construction  52 11.13 Waivers  52 11.14 Third Party Beneficiaries  52 11.15 Bulk Sales Law  52 11.16 Waiver of Jury Trial  52 
 
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**EXHIBITS AND SCHEDULES****EXHIBITS****:**   Exhibit A Form of Non-Competition AgreementExhibit B Form of Bill of SaleExhibit C Form of Legal Opinion**SCHEDULES**:   Schedule I Index of Defined Terms; Table of Definitions   Schedule 1.1(a) Assigned ContractsSchedule 1.1(b) Tangible Personal PropertySchedule 1.1(c) Approvals and OrdersSchedule 1.1(d) Credits, Refunds, Prepaid Expenses Etc.Schedule 1.1(h) Telephone and Facsimile NumbersSchedule 1.1(i) Real and Personal PropertySchedule 1.2(i) Certain Excluded AssetsSchedule 1.3(b) Accrued VacationSchedule 1.4(p) Certain Excluded Liabilities   Company Disclosure ScheduleMember Disclosure Schedule
 
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**ASSET PURCHASE AGREEMENT**THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 22, 2011, is madeby and among Homeland Security Capital Corporation, a Delaware corporation (“HSCC”),Default Servicing USA, Inc., a Delaware corporation (“Buyer”), Default Servicing, LLC, aDelaware limited liability company (the “Company”), DAL Group, LLC, a Delaware limitedliability company, and the sole member of the Company (the “Member”), and Timios, Inc.,solely for purposes of Section 10.1(b) hereof.WHEREAS, the Company is engaged in the business of providing real estate owned liquidationrelated services, including property inspection, eviction, and broker assignment services (the“Business”);WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company wishesto sell, assign and transfer to the Buyer, and the Buyer wishes to purchase from the Company, allof the assets and properties owned, used or held for use by the Company, and the Buyer is willingto assume from the Company certain Liabilities;WHEREAS, the Member owns the entire membership percentage of the Company;WHEREAS, as a condition and material inducement to the Buyer entering into this Agreement,concurrently with the execution and delivery of this Agreement, Mrs. Jenny Johnson (the“Designated Employee”) has entered into an employment agreement with the Company, dated asof the date hereof, which agreement shall become effective as of the Closing Date (the“Employment Agreement”);WHEREAS, as a condition and material inducement to the Buyer consummating the transactionscontemplated by this Agreement, each of the Company and the Member shall enter into, prior to theClosing, a non-competition, non-solicitation and confidentiality agreement with the Buyer insubstantially the form attached hereto as Exhibit A (each, a “Non-CompetitionAgreement”); andWHEREAS, capitalized terms used and not otherwise defined herein shall have the meanings setforth in Schedule I attached hereto.NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,covenants and agreements herein contained, and intending to be legally bound hereby, the partieshereto hereby agree as follows:**ARTICLE I****PURCHASE AND SALE OF ASSETS**1.1 Purchase and Sale of Assets. At the Closing, on the terms and subject to theconditions set forth in this Agreement, the Company shall sell, assign, transfer and deliver to theBuyer, and relinquish to the Buyer (together with its successors and assigns) in perpetuity, freeand clear of all Liens, all right, title and interest in and to all of the Acquired Assets. Asused inthis Agreement, the term “Acquired Assets” means all of the assets, properties, rights,interests and goodwill of the Company of every kind and nature whatsoever, whether real, personalor mixed, tangible or intangible, wherever located, owned, used or held for use by the Company,including the following, but excluding the Excluded Assets:(a) all sales Contracts pursuant to which the Company has agreed to provide services tocustomers and (ii) all other Contracts listed on Schedule 1.1(a) attached hereto(collectively, the “Assigned Contracts”);
 
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(b) all tangible personal property of the Company, including, all equipment, machinery, tools,molds, furniture, fixtures, office equipment, computers, communications equipment, supplies, spareand replacement parts and other physical assets of the Company (including the tangible personalproperty listed on Schedule 1.1(b) attached hereto);(c) all rights of the Company, to the extent transferable, under all Approvals and Ordersrelating to the operation of the Business, including those listed on Schedule 1.1(c)attached hereto;(d) all rights of the Company with respect to all credits, refunds, prepaid expenses, deferredcharges, advance payments, security deposits and prepaid items, including those listed onSchedule 1.1(d) attached hereto;(e) all accounts receivable, notes receivable, Indebtedness, and other rights to paymentpayable or otherwise owed to the Company (collectively, the “Accounts Receivable”);(f) all Company Intellectual Property, including the business name “Default Servicing, LLC”and derivations thereof, and all goodwill associated therewith, licenses and sublicenses granted inrespect thereto and rights thereunder, together with all claims against third parties for profitsand all costs, losses, claims, liabilities, fines, penalties, damages and expenses (includinginterest which may be imposed in connection therewith), court costs and reasonable fees anddisbursements of counsel, consultants and expert witnesses incurred by reason of the pastinfringement, alleged infringement, unauthorized use or disclosure or alleged unauthorized use ordisclosure of any Company Intellectual Property, together with the right to sue for, and collectthe same, or to sue for injunctive relief, for the Buyer’s own use and benefit, and for the use andbenefit of its successors, assigns or other legal representatives;(g) all Books and Records of the Company located in Louisville, Kentucky or accessible usingthe Res.Net online real estate systems, access to all financial Books and Records located inPlantation, Florida, and all human resources Books and Records for the Transferred Employees, tothe extent permissible by law (collectively, the “Transferred Books and Records”);(h) all telephone numbers and facsimile numbers, including those listed on Schedule1.1(h) attached hereto;(i) all real and personal property interests and rights hereunder (including leaseholdinterests, licenses, and occupancy rights, collocation rights, easements, servitudes andaccess to rights-of-way) relating to real or personal property, including the real andpersonal property listed on Schedule 1.1(i) attached hereto;
 
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(j) all claims, demands, causes of action, rights of recovery, rights of set-off, rights ofrecoupment, guarantees, warranties, indemnities and similar rights of the Company relating to theAcquired Assets or the Business and all rights to proceeds under insurance policies and indemnityagreements relating to the Acquired Assets or the Business, except to the extent related to theExcluded Assets or the Excluded Liabilities;(k) all improvements and fixtures to the real property leased by the Company; and(l) all goodwill of the Company.1.2 Excluded Assets. Notwithstanding anything to the contrary in Section 1.1above, the following assets and property of the Company are to be retained by the Company and shallnot constitute Acquired Assets (collectively, the “Excluded Assets”):(a) all Contracts to which the Company is a party or by which the Company or any of its assetsor properties are bound, other than the Assigned Contracts (the “Excluded Contracts”);(b) all rights of the Company under this Agreement and the Related Agreements;(c) all cash and bank accounts of the Company;(d) all minute books and equity records of the Company;(e) subject to the provisions of Section 1.1(j), all insurance policies of theCompany;(f) all personnel records of all Company Employees other than Transferred Employees and allmedical records and other medical information of Transferred Employees that the Company isprohibited by Law from transferring to the Buyer;(g) all Employee Benefit Plans of the Company and all assets related thereto;(h) all payments from closings on properties listed by the Company that occur prior to theClosing Date; and(i) those assets specifically set forth in Schedule 1.2(i) attached hereto.
 
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1.3 Assumption of Liabilities. Upon the terms and subject to the conditions set forthin this Agreement, at the Closing, the Buyer shall assume from the Company only the followingliabilities and obligations (the “Assumed Liabilities”):(a) contractual obligations of the Company arising after the Closing under any of the AssignedContracts to the extent that the Company’s rights thereunder are actually (with consent whererequired) assigned to the Buyer; provided, that, the Buyer shall not assume, anddoes not hereby agree to pay, discharge or perform, (i) any Damages relating in any manner to orarising from any breach or default of the Company of any Assigned Contract occurring on or prior tothe Closing Date regardless of whether the Company discloses such breach or default pursuant tothis Agreement, or (ii) any Liability to indemnify any Person under such Assigned Contract arisingfrom or relating to any act or omission occurring prior to the Closing(b) the Accrued Vacation with respect to the Transferred Employees, as set forth onSchedule 1.3(b).1.4 Excluded Liabilities. Except as expressly assumed pursuant to Section1.3, the Buyer is not assuming and shall not have any liability or obligation whatsoever forany Liabilities of the Company or any of its predecessors or Affiliates whatsoever, whether or notarising out of the ownership or operation of the Business or the Acquired Assets, all of which willbe retained and satisfied when due by the Company (the “Excluded Liabilities”). Withoutlimiting the generality of the foregoing, the Buyer shall not assume or be deemed to assume any ofthe following Liabilities, all of which shall constitute Excluded Liabilities:(a) any Liabilities arising under or relating to any written or oral Contract to which theCompany or its assets or properties are otherwise subject or bound, other than Liabilities arisingunder the Assigned Contracts to the extent provided in Section 1.3(a);(b) any Liabilities of the Company or any of its predecessors or Affiliates in respect of anyIndebtedness, trade payables, accrued expenses or Company Transaction Expenses, except to theextent provided in Section 1.3(b);(c) any Liabilities of the Company or any of its predecessors or Affiliates to any Affiliateor current or former member, option holder or holder of other equity interests of the Company orany of its predecessors or Affiliates;(d) any Liabilities of the Company or any of its predecessors or Affiliates for or in respectof Taxes, including any sales Taxes or Taxes resulting from or relating to the consummation of thetransactions contemplated hereby (including any Taxes that may become due as a result of any bulksales or similar tax that may be assessed against the Company following the Closing);(e) any Liabilities of the Company to any present or former manager, member, officer,employee, consultant or independent contractor of the Company or any of its predecessors orAffiliates, or any of their respective spouses, children, other dependents or beneficiaries,including any and all Liabilities arising under any federal, state, local or foreign Laws or Orders(including those relating to employee health and safety);(f) any Liabilities of the Company or any of its predecessors or Affiliates for any Actionsagainst the Company or any of its predecessors or Affiliates, including any Actions pending orthreatened against the Company or any of its predecessors or Affiliates as of the Closing Date;
 
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(g) any Liabilities of the Company or any of its predecessors or Affiliates arising out of orresulting from and violation of or non-compliance with any federal, state, local or foreign Laws orOrders;(h) any Liabilities of the Company or any of its predecessors or Affiliates arising out of,relating to or resulting from any obligation to indemnify any Person (other than pursuant to anAssigned Contract to the extent assumed pursuant to Section 1.3(a));(i) any Liabilities of the Company arising under this Agreement or any of the RelatedAgreements;(j) any Liabilities resulting from or relating to products sold or services performed by theCompany or any of its predecessors or Affiliates, including any warranty Liabilities;(k) any Liabilities relating to, based in whole or in substantial part on events or conditionsoccurring or existing in connection with, or arising out of, the shutdown prior to the Closing ofany of the operations and facilities utilized by the Company in connection with the Business,including any action prior to the Closing that could be construed as a “plant closing” or “masslayoff,” as those terms are defined in WARN, or any “employment loss,” as defined in WARN, that anyCompany Employee may suffer or may be deemed to suffer prior to the Closing;(l) any Liabilities of the Company or any of its predecessors or Affiliates based upon suchPerson’s acts or omissions occurring after the Closing;(m) any Liabilities arising under or with respect to any Employee Benefit Plan or any benefit,tax or compensation Liability of any ERISA Affiliate;(n) any Liabilities of the Company arising in connection with or in any way relating to anyproperty now or previously owned, leased or operated by the Company, its predecessors orAffiliates, or any activities or operations occurring or conducted at any real property now orpreviously owned, operated or leased by the Company, its predecessors or Affiliates (includingoffsite disposal), including any Liabilities which arise under or relate to any Environmental Laws;(o) any other Liabilities attributable in any manner to the Excluded Assets; and(p) any Liabilities set forth on Schedule 1.4(p) attached hereto.The disclosure of any obligation or Liability on any schedule to this Agreement shall not create anAssumed Liability or other Liability of the Buyer, except where such disclosed obligation has beenexpressly assumed by the Buyer as an Assumed Liability in accordance with provisions of Section1.3 hereof.
 
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1.5 Closing. Subject to the terms and conditions hereof, the closing of thetransactions contemplated by this Agreement (the “Closing”) shall take place remotely viatheexchange of documents and signatures commencing at 10:00 a.m. (EDT), on the third (3rd)Business Day following the date on which all of the conditions set forth in Article VIIIhave been satisfied or waived (other than any such conditions that by their terms cannot besatisfied until the Closing Date, which conditions shall be required to be so satisfied or waivedon the Closing Date), unless another time and/or date is agreed to in writing by the Member andBuyer (such time and date being herein called the “Closing Date”). For financial andaccounting purposes, the Closing shall be deemed to have occurred as of 12:01 a.m. (EDT) on theClosing Date.1.6 Consent of Third Parties.(a) Notwithstanding anything in this Agreement or in any Related Agreement to the contrary,neither this Agreement nor any such Related Agreement shall constitute an agreement to assign orotherwise transfer, or require the Buyer to assume any obligations under, any Assigned Contract ifan attempted assignment or transfer thereof would, without the consent of a third party to suchassignment or transfer, constitute a breach thereof, would be ineffective, would affect adverselythe rights of the Buyer thereunder or would violate any applicable law. If any such consent hasnot been obtained as of the Closing Date and the Buyer nevertheless determines to proceed with theClosing, the Buyer may waive the closing condition that such consent be delivered at the Closing,and the Company shall use its best efforts to obtain such consent following the Closing, and theBuyer will provide reasonable cooperation to the Company in seeking to obtain any such consent.The Company shall pay and discharge any and all out-of-pocket costs or expenses of seeking toobtain or obtaining any such consent or approval whether before or after the Closing Date.(b) If any Assigned Contract is not transferred to the Buyer at the Closing pursuant to thisAgreement, the Company shall cooperate with the Buyer in any reasonable arrangement designed toprovide for the Buyer all of the benefits of, and to have the Buyer assume the burdens,liabilities, obligations and expenses expressly assumed by the Buyer hereunder with respect to,such Assigned Contract. In such event, until such consent has been obtained, (i) the Buyer shalluse commercially reasonable efforts to perform in the Company’s name, and, in respect of theincremental costs incurred by the Buyer in performing in the Company’s name, at the Company’sexpense, all of the Company’s obligations with respect to each Assigned Contract; provided,however, that the Company shall not be required to take any action in performing suchobligations which, in the Buyer’s reasonable judgment, would subject the Buyer to any Liability oran unreasonable risk of incurring any such Liability and (ii) the Company shall take all actionsreasonably requested by the Buyer to enforce for the benefit of the Buyer any and all rights of theCompany with respect to any such Assigned Contract.(c) The Company hereby authorizes the Buyer to perform all of its obligations after theClosing with respect to all Assigned Contracts that are not assigned to the Buyer at the Closingand the Company hereby grants to the Buyer a power of attorney to act in the name of the Companywith respect thereto. Such power of attorney shall be coupled with an interest and shall beirrevocable. The Company agrees to remit promptly to the Buyer all collections or paymentsreceived by the Company in respect of all such Assigned Contracts, and shall hold all suchcollections or payments in trust for the benefit of, and promptly pay the same over to, theBuyer; provided, however, that nothing herein shall create or provide anyrights or benefits in or to third parties.
 
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(d) Nothing in this Section 1.6 shall be deemed to modify in any respect any of theCompany’s representations or warranties set forth herein or be deemed to constitute an agreement toexclude from the Acquired Assets any assets described under Section 1.1.1.7 Further Assurances. At any time and from time to time after the Closing, at therequest of the Buyer and without further consideration, the Company will, and the Member will causethe Company to, execute and deliver such other instruments of sale, transfer, conveyance,assignment and confirmation, and will take such further action, as may be reasonably requested inorder to more effectively transfer, convey and assign to the Buyer, and to confirm the Buyer’stitle in and to, the Acquired Assets, and each of the parties shall execute such other documentsand take such further action as may be reasonably required or desirable to carry out the provisionsof this Agreement and the transactions contemplated hereby.1.8 Withholding Rights. The Buyer shall be entitled to deduct and withhold from anyamounts otherwise payable pursuant to this Agreement such amounts as are required to be deductedand withheld with respect to the making of such payments under the provisions of any applicable TaxLaws. Any such withheld amounts shall be treated for all purposes of this Agreement as having beenpaid to the Person in respect of which such deduction and withholding was made.1.9 Transfer Taxes. All sales (including bulk sales), transfer and similar Taxes, ifany, payable in connection with the transactions contemplated hereby shall be paid, jointly andseverally, by the Company and the Member.**ARTICLE II****PURCHASE PRICE; CONTINGENT PAYMENTS**2.1 Purchase Price. The aggregate purchase price (the “Purchase Price”)payable for the Acquired Assets shall be (i) Five Hundred Thousand Dollars ($500,000), reduced byan amount that is equal to one half of the Accrued Vacation (the “Base Purchase Price”),plus (ii) Contingent Payment Amount that becomes payable pursuant to Section 2.2. At theClosing, the Buyer shall pay or cause to be paid to the Company the Base Purchase Price by wiretransfer of immediately available funds to a United States bank account designated by the Companyto the Buyer in writing.2.2 Contingent Payments.(a) The Company shall be eligible to earn an aggregate of up to an additional amount equal toThree Million Two Hundred Fifty Thousand Dollars ($3,250,000) less an amount equal to (i) fiftypercent (50%) of the Pre-Closing Revenue from and including June 1, 2011 through June 17, 2011,plus (ii) forty percent (40%) of the Pre-Closing Revenue from and including June 18, 2011 throughthe day before the Closing Date (the “Maximum Contingent Payment Amount”) in contingentpayments depending upon Net Revenue during each Measurement Period, on the terms and conditions setforth in this Section 2.2 (any amountearned pursuant to this Section 2.2, a “Contingent Payment Amount”). Forpurposes of this Section 2.2(a), “Pre-Closing Revenue” shall mean the aggregate dollaramount of revenues (net of credits, discounts, refunds, rebates and returns) recognized by theCompany, calculated in accordance with GAAP and the Company’s accounting principles. Within ten(10) Business Days following the Closing, the Company shall deliver to the Buyer a certificatecertified by the President of the Company setting forth the calculation of the Maximum ContingentPayment Amount. If the Buyer objects to the calculation of the Maximum Contingent Payment Amount,the Buyer shall deliver to the Company within ten (10) Business Days following the Buyer’s receiptof the Company’s calculation of the Maximum Contingent Payment Amount a written notice settingforth in reasonable detail such objections (a “Maximum Contingent Payment Amount ObjectionNotice”), together with all supporting documentation.
 
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(b) Within thirty (30) days following the end of each calendar month in each of the calendaryears 2011, 2012, 2013 and 2014 (each, a “Measurement Period”) commencing with the calendarmonth in which the Closing Date occurs, the Buyer, in good faith, shall calculate the Net Revenue(which Net Revenue shall be pro-rated, if necessary, for the calendar month in which the ClosingDate occurs) for such Measurement Period and shall deliver to the Member and the Company acertificate setting forth such calculation in reasonable detail, which calculation shall be finaland binding on all parties unless the Member or the Company objects to such calculation as setforth in Section 2.2(e) below. Subject to the provisions of Section 9.2(b), withinten (10) days following the final determination of the Net Revenue for such Measurement Period, theBuyer shall pay (or, if deposited with the Escrow Agent (as defined below) pursuant to Section2.2(e), cause the Escrow Agent to pay) to the Company an amount equal to the applicable AgreedPercentage of the Net Revenue for such Measurement Period; provided, however, thatthe maximum aggregate payments to which the Company shall be entitled hereunder shall not exceedthe Maximum Contingent Payment Amount; providedfurther, however, that theBuyer shall deposit on behalf of the Company into escrow with SunTrust Bank (the “EscrowAgent”) Sixteen Thousand Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($16,666.67)(“Escrow Deposit Amount”) out of the monthly Contingent Payment Amounts that are payable tothe Company pursuant to this Section 2.2 for each calendar month commencing with thepayment for the calendar month ending July 31, 2012 and ending once the aggregate amount depositedwith the Escrow Agent pursuant to this Section 2.2(b) equals Two Hundred Fifty ThousandDollars ($250,000) (the “Escrow Amount”); provided that if any such monthly ContingentPayment Amount is less than the Escrow Deposit Amount, then such short fall in the Escrow DepositAmount for that month shall be payable into the escrow from future monthly Contingent PaymentAmounts not already required to be deposited into the escrow pursuant to this Section2.2(b). The Escrow Amount shall be held by the Escrow Agent pursuant to the terms andconditions of an escrow agreement in a form agreed to by the Parties prior to the Closing (the“Escrow Agreement”) and to be available to satisfy claims by the Buyer Indemnified Personsfor indemnification pursuant to Section 9.2(a)(viii). Upon the third (3rd) anniversary ofthe Closing Date, the Escrow Amount shall be released to the Company, less any amounts used or setaside to satisfy final or unresolved claims by the Buyer Indemnified Persons for indemnificationpursuant to Section 9.2(a)(viii), and, upon the satisfaction of such claims, any remainingamounts held in escrow shall be released to the Company.(c) Upon payment of the aggregate Contingent Payment Amounts in the amount of the MaximumContingent Payment Amount (whether such payments are placed inescrow as contemplated by Section 2.2(b) or Section 2.2(e), paid to theCompany or offset pursuant to the provisions of Section 9.2(b)), then, except with respectto the Company’s right to any amounts placed in escrow pursuant to Section 2.2(b) orSection 2.2(e), the respective rights and obligations of the Company and the Buyer pursuantto this Section 2.2 shall terminate.
 
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(d) With respect to Section 2.2(b), the Buyer shall, upon the reasonable request ofthe Company, provide the Company with reasonable evidence substantiating such calculations;provided, however, that the Company shall hold all such information in strictconfidence and shall not use any such information for any purpose whatsoever other than to verifythe calculation of Net Revenue.(e) If the Company objects to the calculation of the Net Revenue or any Contingent Payment,the Company shall deliver to the Buyer within thirty (30) days following the Company’s receipt ofthe Buyer’s calculation of the Net Revenue a written notice setting forth in reasonable detail suchobjections (a “Net Revenue Objection Notice;” each Net Revenue Objection Notice or MaximumContingent Payment Amount Objection Notice is an “Objection Notice”), together with allsupporting documentation. If the Company delivers a Net Revenue Objection Notice to the Buyer, theBuyer shall pay to the Company the amount of the applicable Contingent Payment Amount not indispute, and shall deposit any amount in dispute into escrow with the Escrow Agent to be held bythe Escrow Agent pursuant to the terms and conditions of the Escrow Agreement. If either the Buyeror the Company delivers an Objection Notice to the other, the Buyer and the Company shall attemptin good faith to resolve the matters set forth in the applicable Objection Notice within twenty(20) days after receipt of the same by the Buyer or the Company, as applicable. If the Parties areunable to do so, either the Buyer or the Company may refer all remaining disputes to a nationallyrecognized accounting firm as mutually agreed upon by the Buyer and the Company (the “DisputeAccounting Firm”) which shall be instructed to resolve such disputes within thirty (30) days ofthe referral. The Buyer and the Company shall have the right to meet jointly with the DisputeAccounting Firm during this period and to present their respective positions. The resolution ofdisputes by the Dispute Accounting Firm will be set forth in writing and will be conclusive andbinding upon the parties, upon the date of such resolution, absent manifest error. In making itsdetermination, the Dispute Accounting Firm shall consider only those items that the Company andBuyer are unable to resolve and the Dispute Accounting Firm shall be bound by the terms andconditions of this Agreement, including the definition of Net Revenue and the terms of thisSection 2.2. The Company and the Buyer will each pay their own fees and expenses(including any fees and expenses of their accountants and other representatives) in connection withthe resolution of any dispute under this Section 2.2 (excluding the fees and expenses ofthe Dispute Accounting Firm). The fees and expenses of the Dispute Accounting Firm pursuant tothis Section 2.2(e) shall be borne by the Buyer and the Company, in inverse proportion asthey may prevail on matters resolved by the Dispute Accounting Firm, which proportionateallocations shall also be determined by the Dispute Accounting Firm at the time the determinationof such firm is rendered on the merits of the matters submitted.(f) For purposes hereof, the term “Net Revenue” shall mean the aggregate dollar amountof revenues (net of credits, discounts, refunds, rebates and returns) recognized by the AcquiredBusiness during a Measurement Period, calculated in accordance with GAAP and the Buyer’s accountingprinciples; the term “Agreed Percentage” shall mean, with respect to anycalendar month in the calendar year 2011, forty-five percent (45%); any calendar month in thecalendar year 2012, thirty-five percent (35%); any calendar month in the calendar year 2013,thirty-five percent (35%); and any calendar month in the calendar year 2014, thirty percent (30%);and the term “Acquired Business” shall mean the Business as operated through the Buyer orits Affiliates, and all other business conducted by the Buyer following the Closing, which willmaintain separate financial statements through the end of the final 2014 Measurement Period. NetRevenue payable in connection with the sale of properties listed by the Company shall be recognizedat the time of the closing of such sale, not the receipt of payment of such Net Revenue.
 
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(g) Neither HSCC nor Buyer may sell the Acquired Business, or any substantial portion thereof,unless the purchaser in such transaction agrees in writing enforceable by the Company and theMember to be bound by the provisions of this Section 2.2 as though it is the Buyer. TheBuyer and HSCC shall remain liable to the Member under this Section 2.2, unless they arereleased from such liability by the Member in writing.2.3 Closing Prorations and Adjustments. The following shall be prorated (any amountowed by the Buyer as a result of such proration to be referred to as the “Buyer ProratedAmount”) between the Buyer and the Company as of 12:01 a.m. (EDT) on the Closing Date, on thebasis of the actual number of days elapsed during the month in which the Closing occurs, and theBuyer shall deliver to the Company the Buyer Prorated Amount within ten (10) Business Daysfollowing the Closing by a check payable to the Company:(a) Initial Base Rent, as defined in the Lease, dated as of July 17, 2008, by and betweenCommerce Crossings Business Centers, LLC and the Company (the “Office Lease”), paid on thefirst day of the month in which the Closing occurs; and(b) The portion of Annual Operating Costs, as defined in the Office Lease, paid on the firstday of the month in which the Closing occurs.2.4 Allocation of Purchase Price. The Purchase Price shall be allocated among theAcquired Assets as proposed by the Buyer in good faith, in accordance with Section 1060 of the Codeand the Treasury Regulations thereunder, and shall be as set forth in a schedule produced by theBuyer and delivered to the Company within one hundred twenty (120) days following the Closing Date(the “Allocation Schedule”). The parties shall, and shall cause their respectiveAffiliates to, use the allocations set forth in the Allocation Schedule (as reasonably adjusted toaccount for events occurring after the determination of the Allocation Schedule) for all Taxpurposes, file all Tax Returns in a manner consistent with such Allocation Schedule (as adjusted)and take no tax position contrary thereto unless required to do so by a change in applicable Lawsor a good faith resolution of a Tax contest.**ARTICLE III****REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBER**Except as disclosed by the Company in the disclosure schedule, dated as of the date of thisAgreement and attached hereto (the “Company Disclosure Schedule”), the Company and theMember, jointly and severally, hereby represent and warrant to the Buyer as of the date hereofand as of the Closing Date as follows. The Company Disclosure Schedule shall be arranged insections corresponding to the numbered and lettered sections and subsections contained in thisArticle III, and the disclosures in any section or subsection of the Company DisclosureSchedule shall qualify only the corresponding section or subsection of this Article III.
 
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3.1 Organization, Good Standing and Qualification.(a) The Company is duly organized and validly existing and in good standing under the Laws ofthe State of Delaware.(b) The Company is duly qualified or licensed as a foreign limited liability company to dobusiness and is in corporate and tax good standing under the Laws of each jurisdiction where thecharacter of the Acquired Assets or the nature of the Business makes such qualification orlicensing necessary, other than in those jurisdictions where the failure to be so qualified wouldnot have a Business Material Adverse Effect. The Company has all requisite power and authority andis in possession of all Approvals necessary, to own, lease and operate the Acquired Assets and tocarry on the Business as it is now being conducted. Set forth in Section 3.1(b) of theCompany Disclosure Schedule is a list of (i) the jurisdictions in which the Company is qualified orlicensed to transact business, (ii) every state or foreign jurisdiction in which the Company hasemployees or facilities and (iii) the sole member and officers of the Company.(c) The Company has delivered to the Buyer true and complete copies of the Company’sOrganizational Documents, as amended (if applicable) and in effect as of the date hereof.3.2 Subsidiaries and Investments. The Company has not had, nor does it currentlyhave, any Subsidiaries, nor has it ever owned, nor does it currently own, any capital stock orother proprietary interest, directly or indirectly, in any other Person.3.3 Ownership of the Company. The entire membership percentage of the Company isowned beneficially and of record by the Member, and, except as set forth in Section 3.3 ofthe Company Disclosure Schedule, no other Person has at any time held any membership or otherequity interests of the Company. Except as represented in the preceding sentence, there are nooutstanding membership or other equity interests of the Company or any options, warrants, calls,rights, agreements, arrangements or undertakings of any kind (contingent or otherwise) obligatingthe Company to issue, deliver or sell, or cause to be issued, delivered or sold, any membership orother equity interests or any other securities of the Company.
 
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3.4 Authorization; Binding Obligation. The Company has all necessary power andauthority to execute and deliver this Agreement, each Related Agreement to which it is a party andeach other instrument or document required to be executed and delivered by it pursuant to thisAgreement or any such Related Agreement, and to perform its obligations hereunder and thereunderand to consummate the transactions contemplated hereby and thereby. The execution and delivery bythe Company of this Agreement and the Related Agreement to which it is a party, the performance ofits obligations hereunder and thereunder and the consummation by theCompany of the transactions contemplated hereby and thereby have been duly and validlyauthorized by all requisite action on the part of the Company and no other proceedings on the partof the Company are necessary to authorize this Agreement or any Related Agreement to which it is aparty or to consummate the transactions so contemplated herein and therein. This Agreement hasbeen, and each of the Related Agreements to which the Company is a party, when executed anddelivered by the Company, will be, duly and validly executed and delivered by the Company andconstitute a legal, valid and binding obligation of the Company enforceable against the Company inaccordance with its terms, except (i) as limited by applicable bankruptcy, insolvency,reorganization, moratorium and other Laws of general application affecting enforcement ofcreditors’ rights generally and (ii) as limited by Laws relating to the availability of specificperformance, injunctive relief or other equitable remedies (together, the “EnforceabilityExceptions”).3.5 Consents and Approvals. Except as set forth in Section 3.5 of the CompanyDisclosure Schedule, the execution and delivery by the Company of this Agreement, the RelatedAgreements to which the Company is a party or any other instrument or document required by thisAgreement or any Related Agreement to be executed and delivered by the Company do not, and theperformance of this Agreement, the Related Agreements to which the Company is a party and any otherinstrument or document required by this Agreement or any Related Agreement to be executed anddelivered by the Company shall not, require the Company to obtain any Approval of any Person orApproval of, observe any waiting period imposed by, or make any filing with or notification to, anyGovernmental Authority.3.6 No Violation. Except as set forth in Section 3.6 of the CompanyDisclosure Schedule, the execution and delivery by the Company of this Agreement, the RelatedAgreements to which the Company is a party or any other instrument or document required by thisAgreement or any Related Agreement to be executed by the Company do not, and the performance ofthis Agreement, the Related Agreements to which the Company is a party or any other instrument ordocument required by this Agreement or any Related Agreement to be executed and delivered by theCompany will not, (a) conflict with or violate the Organizational Documents of the Company, (b)conflict with or violate any Law or Order applicable to the Company, or (c) result in any materialbreach or violation of or constitute a material default (or an event that with notice or lapse oftime or both would become a breach, violation or default) under, or impair the Company’s rights oralter the rights or obligations of any third party under, or give to others any rights oftermination, amendment, acceleration or cancellation of, or result in the creation of a Lien on anyof the Acquired Assets pursuant to, any Assigned Contract or any other material Contract to whichthe Company is a party or is otherwise bound, or any Approval to which the Company is a party or bywhich the Company or the Acquired Assets are bound or affected.
 
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3.7 Business Licenses. Section 3.7 of the Company Disclosure Schedulecontains a true and complete list of all Approvals and Orders which are necessary for the ownershipor operation of the Acquired Assets or the Business, or that have been issued, granted or otherwisemade available to the Company, including any Approvals from Governmental Authorities (the“Business Licenses”). Each Business License is valid and in full force and effect, noBusiness License is subject to any Lien, limitation, restriction, probation or other qualificationand there is no default under any Business License and, to the Knowledge of Company, no event hasoccurred which constitutes or, after notice or lapse of time or both, would constitute abreach or default under any of the Business Licenses or would permit revocation or termination ofany of the Business Licenses. Section 3.7 of the Company Disclosure Schedule specifies theholder of each Business License. There is no Action pending or, to the Knowledge of the Company,threatened that could result in the termination, revocation, limitation, suspension, restriction orimpairment of any Business License or the imposition of any fine, penalty or other sanctions forviolation of any legal or regulatory requirements relating to any Business License nor, to theKnowledge of the Company, is there any event or set of circumstances which are reasonably likely toresult therein. The Company has all Approvals that are necessary in order to enable the Company toown and operate the Acquired Assets and to conduct the Business as presently conducted. None ofthe Business Licenses shall be affected by the consummation of the transactions contemplatedhereby. All Business Licenses are validly held by the Company and the Company has complied and isin compliance, in each case in all material respects, with the terms and conditions of eachBusiness License held by it. The Company has not received notice of any Action, and no such Actionis pending, relating to the cancellation, suspension, revocation, modification or non-renewal ofany Business License.3.8 Title to and Condition of Properties; Sufficiency of Assets; Ownership of Assets.(a) Except as set forth in Section 3.8(a) of the Company Disclosure Schedule, theCompany is the sole and exclusive legal and equitable owner of all right, title and interest in,and has good, valid and marketable title to, all of the Acquired Assets purported to be owned bythe Company, and the legal and valid right to use all other Acquired Assets used or held for use bythe Company, free and clear of all Liens. The Company has the power and the right to sell, assignand transfer, the Company will sell and deliver to the Buyer, and upon consummation of thetransactions contemplated by this Agreement the Buyer will acquire, good, valid and marketabletitle to all of the Acquired Assets purported to be owned by the Company and the valid, enforceableand sufficient right to use all of the Acquired Assets, free and clear of all Liens.(b) All tangible assets included in the Acquired Assets have been maintained in accordancewith normal industry practice and are in good operating condition and repair, subject to ordinarywear and tear, and there has not been any interruption of the operations of the Business due to thecondition of any such assets or properties. The Acquired Assets comprise all assets, properties,rights and Contracts used in connection with the operation of the Business, which are all of theassets, properties, rights and Contracts necessary for the operation of the Business by the Buyerfollowing the Closing in the manner in which the Business is currently conducted. Except as setforth in Section 3.8(b) of the Company Disclosure Schedule, no other Person, including theMember or any Affiliate of the Company or the Member, owns or has the right to use any of theassets or property used in connection with the operation of the Business.
 
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3.9 Real Property.(a) The Company does not own and has never owned any real property. Section 3.9(a) ofthe Company Disclosure Schedule sets forth a complete and accurate list of: (i) all real propertythat is leased by the Company (the “Leased Real Property”) and (ii) all leases andsubleases to which the Company is a party or is otherwise bound pursuant to which theCompany leases or subleases real property (the “Real Property Leases”). All RealProperty Leases are in full force and effect and are the legal, valid and binding obligations ofthe Company and, to the Knowledge of the Company, of each other party thereto enforceable inaccordance with their respective terms, and neither the Company nor, to the Knowledge of theCompany, the other party or parties thereto is or are in breach or default thereunder and thereexists no event, condition or occurrence which (with or without due notice or lapse of time, orboth) would constitute such a breach or default by the Company thereunder or, to the Knowledge ofthe Company, by the other party or parties thereto of any of the foregoing. Except as set forth inSection 3.9(a) of the Company Disclosure Schedule, no consent of, or notice to, any thirdparty is required under any Real Property Lease as a result of or in connection with, and theenforceability of any such Real Property Lease will not be affected by, the execution, delivery andperformance of this Agreement or any Related Agreement, or the transactions contemplated hereby orthereby. The Company has delivered to the Buyer true and complete copies of all Real PropertyLeases, including all amendments thereto.(b) Except as set forth in Section 3.9(b) of the Company Disclosure Schedule, theCompany holds all Leased Real Property free and clear of all Liens, claims or rights of any thirdparties, and the possession of the Leased Real Property (collectively, the “Premises”) bythe Company has not been disturbed and no claim has been asserted against the Company adverse toits rights in such Premises. All improvements, fixtures and structures on the Premises, and thecurrent uses of the Premises, conform in all material respects to all applicable Laws, includingbuilding, zoning, health, safety and other Laws, and applicable zoning Laws permit the presentlyexisting improvements and the conduct and continuation of the Business as being conducted on thePremises. All improvements, mechanical equipment, fixtures and operating systems included in thePremises are in good operating condition and repair (ordinary wear and tear excepted) and theredoes not exist any condition which materially interferes with the use of such property andimprovements.(c) The Company has not granted any leases or licenses, nor created any tenancies, affectingthe Premises. There are no other parties in possession of any portion of the Premises astrespassers or otherwise.(d) The Company is not a party to or is not otherwise bound by, nor is any of the Premisessubject to, any Contract requiring it to pay any commissions or other compensation to any brokersor agents in connection with any of the Premises, and has had no dealings with any broker or agentwith respect to the Premises upon which any such broker or agent would be entitled to a commissionor other compensation.(e) To the Knowledge of the Company, (i) there are no Laws or Orders now in existence or, tothe Knowledge of the Company, under active consideration by any Governmental Authority which wouldrequire the tenant of any Leased Real Property to make any expenditure in excess of $10,000 tomodify or improve such Leased Real Property to bring it into compliance therewith and (ii) theCompany is not required to expend more than $10,000 in the aggregate under all Real Property Leasesto restore the Leased Real Property at the end of the term of the Real Property Leases to thecondition required under the Real Property Leases (assuming the conditions existing in such LeasedReal Property as of the date hereof).
 
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3.10 Personal Property Leases. Section 3.10 of the Company DisclosureSchedule sets forth a complete and accurate list of all personal property that is leased by theCompany (the “Leased Personal Property” and, the leases covering the Leased PersonalProperty, collectively, the “Personal Property Leases”). The Company is the owner andholder of the leasehold interests purported to be granted by each Personal Property Lease, and allPersonal Property Leases are in full force and effect in accordance with the terms thereof and arethe legal, valid and binding obligations of the Company and, to the Knowledge of the Company, ofeach other party thereto enforceable in accordance with their respective terms, and neither theCompany nor, to the Knowledge of the Company, the other party or parties thereto is or are inmaterial breach or default thereunder and there exists no event, condition or occurrence which(with or without due notice or lapse of time, or both) would constitute such a breach or default bythe Company thereunder or, to the Knowledge of the Company, by the other party or parties theretoof any of the foregoing. Except as set forth in Section 3.10 of the Company DisclosureSchedule, no consent of, or notice to, any third party is required under any Personal PropertyLease as a result of or in connection with, and the enforceability of any such Personal PropertyLease will not be affected by, the execution, delivery and performance of this Agreement or anyRelated Agreement, or the transactions contemplated hereby or thereby. The Company has deliveredto the Buyer complete and accurate copies of all Personal Property Leases, including all amendmentsthereto.3.11 Environmental Matters.(a) The Company has materially complied and is in material compliance with all EnvironmentalLaws, which compliance includes the possession by the Company of all Approvals required underEnvironmental Laws and material compliance with the terms and conditions thereof. Section3.11(a) of the Company Disclosure Schedule includes a list of all of the Approvals requiredunder Environmental Laws necessary to own and operate the Acquired Assets or the Business ascurrently conducted and contemplated to be conducted. There are no past or present facts,circumstances, conditions, activities or incidents, including release of any Materials ofEnvironmental Concern at any facilities owned or operated by the Company, which could give rise toany material Liability or result in a claim against the Company or the Buyer under anyEnvironmental Law. There have been no releases by the Company or any of its predecessors orAffiliates of any Materials of Environmental Concern into the environment at any real property orfacility formerly or currently owned or operated by the Company or any of its predecessors, or thatis or was ever used by the Company or any of its predecessors. The Company does not have Knowledgeof any release by any other Person of any Materials of Environmental Concern into the environmentat any parcel of real property or any facility formerly or currently operated or occupied by theCompany that is or was ever used by the Company. There is no Action pending or, to the Knowledgeof the Company, threatened or other notice of violation, formal administrative proceeding orwritten information request by any Governmental Authority, nor has the Company received notice ofany investigation by any Governmental Authority relating to any Environmental Law nor any othernotice from a Governmental Authority or any other Person alleging that the Company is not incompliance with any Environmental Law or Approval required under any Environmental Law or has anyLiability under any Environmental Law or for the remediation of any Materials of EnvironmentalConcern at any property.
 
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(b) Set forth in Section 3.11(b) of the Company Disclosure Schedule is a complete andaccurate list of all environmental reports, investigations or audits (whether in hard copy orelectronic form) relating to premises currently or previously owned, operated or occupied by theCompany or any of its predecessors or Affiliates (whether conducted by or on behalf of the Companyor any of its predecessors or Affiliates or a third party, and whether done at the initiative ofthe Company or a predecessor or an Affiliate or directed by a Governmental Authority or other thirdparty) of which the Company is aware. A complete and accurate copy of each such document has beenprovided to the Buyer.3.12 Financial Statements; No Undisclosed Liabilities.(a) Section 3.12 of the Company Disclosure Schedule contains the following financialstatements (collectively, the “Financial Statements”):(i) the unaudited balance sheet of the Company as of May 31, 2011 (the“Interim Balance Sheet”) and the related statements of income for thefive-month period then ended; and(ii) the unaudited balance sheet of the Company as of December 31, 2010(including Default Servicing, Inc. from January 1, 2010 to January 15, 2010), andthe related statement of income for the respective twelve (12) month period thenended.(b) The Financial Statements were prepared in accordance with the books and records of theCompany, in accordance with GAAP, consistently applied, except for the absence of complete footnotedisclosure as required by GAAP. The Financial Statements present fairly in accordance with GAAPthe financial condition of the Company as of the dates indicated and the results of operations ofthe Company for the respective periods indicated, subject to changes resulting from normal,recurring period-end audit adjustments, which adjustments shall not be material. The FinancialStatements reflect the consistent application of GAAP throughout the periods involved.(c) Except as and to the extent the amounts are specifically accrued or disclosed in theInterim Balance Sheet, the Company does not have any Liabilities, whether or not required by GAAPto be reflected in the Interim Balance Sheet, except for (a) Liabilities under an executory portionof a Contract, (b) Liabilities for costs and expenses incurred in connection with the transactionscontemplated by this Agreement, and (c) Liabilities that were incurred in the ordinary course ofbusiness consistent with past practice since the date of the Interim Balance Sheet.(d) Except as set forth in Section 3.12(d) of the Company Disclosure Schedule, theCompany does not have any outstanding Indebtedness and as of the Closing, all Liens on the AcquiredAssets will be discharged.
 
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3.13 Absence of Certain Events. Except as set forth in Section 3.13 of theCompany Disclosure Schedule, since April 30, 2011, the Company has conducted the Business only inthe ordinary and usual course and in a manner consistent with past practice and there has not beenany change, event, loss, development, damage or circumstance affecting the Acquired Assets orthe Business which, individually or in the aggregate, has had or could reasonably be expectedto have a Business Material Adverse Effect (a “Business Material Adverse Change”). Asamplification and not in limitation of the foregoing, since April 30, 2011, the Company has not:(a) incurred any material decrease in the value of any of the Acquired Assets;(b) suffered any loss to its property or asset used in connection with or related to theoperation of the Business, or incurred any liability, damage, award or judgment for injury to theproperty or business of others or for injury to any person (in each case, whether or not covered byinsurance) in excess of $10,000 in any one case or $25,000 in the aggregate;(c) made any capital expenditure or commitment in excess of $10,000 or series of capitalexpenditures or commitments in excess of $25,000 in the aggregate;(d) made any assignment, termination, modification or amendment of any Contract to which theCompany was or is a party or which otherwise related to the Business, or any account receivablerelating thereto, whether as a security interest or otherwise;(e) made any change in the rate of compensation, commission, bonus or other direct or indirectremuneration payable or to become payable to any Company Employee, or agreed to pay any bonus orextra compensation or other employee benefit to any Company Employee;(f) paid, discharged or satisfied, in any amount in excess of $10,000 in any one case, or$25,000 in the aggregate, any Liability arising from the operation of the Business, other thanpayments made in the ordinary course of business of Liabilities reflected or reserved against inthe Interim Balance Sheet or Liabilities incurred since that date in the ordinary course ofbusiness consistent with past practice;(g) made any change in the accounting principles adopted by the Company, or any change in theCompany’s accounting policies, procedures, practices or methods with respect to applying suchprinciples, other than as required by GAAP;(h) sold, assigned, leased or transferred any assets (tangible or intangible) or properties,other than sales of inventory in the ordinary course of business;(i) amended its Organizational Documents;(j) made any Tax election, changed any annual Tax accounting period, amended any Tax Return,settled any income Tax Liability, entered into any closing agreement, settled any Tax claim orassessment, surrendered any right to claim a Tax refund or consented to any extension or waiver ofthe limitations period applicable to any Tax claim or assessment;(k) acquired or agreed to acquire by merging or consolidating with, or by purchasing asubstantial portion of the capital stock or assets of, or by any other manner, any business or anycorporation, partnership, limited liability entity, joint venture, association or other businessorganization;
 
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(l) terminated the employment (or other form of engagement) or expressed any intention toterminate the employment (or other engagement) of any employee of the Company;(m) incurred, assumed or created any Indebtedness or guaranteed any Indebtedness of any otherPerson, or made, incurred, assumed, created or guaranteed any loan or made any advance or capitalcontribution to or investment in any Person;(n) cancelled or forfeited any debts or claims, waived or released any rights or claims ofmaterial value to the Company or settled any Action;(o) granted any license or sublicense of any rights under or with respect to, or sold,transferred or permitted to lapse, any Intellectual Property;(p) entered into, terminated or received notice of termination of (1) any distributorship,sales or service representative, credit, or similar agreement to which the Company is a party, or(2) any Contract or transaction, other than purchase orders in the ordinary course of business,involving a total remaining commitment by or to the Company of at least $50,000;(q) suffered a loss of (1) a client which has purchased at least $100,000 of products orservices from the Company, or (2) a vendor which has supplied at least $100,000 of products orservices to the Company;(r) written-off any accounts receivable of the Company or any portion thereof in excess of$10,000 individually or $25,000 in the aggregate, or any sale, assignment or disposition of anyaccount receivable;(s) made any material change in the manner in which the Company extends or receives discountsor credit from customers or suppliers; or(t) entered into any agreement, understanding, authorization or proposal, whether in writingor otherwise, for the Company to take any of the actions specified in this Section 3.13.3.14 Legal Proceedings.(a) Except as set forth in Section 3.14(a) of the Company Disclosure Schedule, thereis no Action pending or, to the Knowledge of the Company, threatened against the Company or any ofits officers (in their capacities as such), and the Company has not received any claim, complaint,incident, report, threat or notice of any such Action, nor does the Company know of any event orset of circumstances which are reasonably likely to result in an Action, the result of which couldmaterially adversely affect the Company or the Acquired Assets.(b) Section 3.14(b) of the Company Disclosure Schedule sets forth all Actions that (i)involved the Company at any time during the past three (3) years and (ii) are no longer pending(the “Prior Actions”). All of the Prior Actions have been concluded in their entirety andthe Company does not have and will not have any Liability with respect to the Prior Actions.The Company has provided to the Buyer all formal written communications relating to any PriorActions between the Company and a Governmental Authority and any Orders related thereto.
 
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(c) There are no outstanding Orders against or involving or affecting the Company, theBusiness or the Acquired Assets, and the Company is not in default with respect to any such Orderof which it has Knowledge or which has been served upon it.(d) Except as set disclosed to the Buyer in connection with this Agreement, the Company hasnot received any material, written communication or advice from outside legal counsel to the effectthat it is exposed, from a legal standpoint, to any Liability relating to the ownership oroperation of the Acquired Assets or the Business.3.15 Compliance with Laws. Except as set forth in Section 3.15 of the CompanyDisclosure Schedule, the Company has complied and is in compliance, in each case in all materialrespects, with all Laws applicable to it, the Acquired Assets and the Company’s ownership, use oroperation thereof, and to the operation of the Business. The Company has not received any notice,citation, summons or order to the effect that it is not in compliance with any such Laws. Noinvestigation or review by any Governmental Authority with respect to the Company or the Business,or, to the Knowledge of the Company, the Company’s sales agents or other representatives is pendingor, to the Knowledge of the Company, threatened, nor has any Governmental Authority indicated tothe Company or its Affiliates an intention to conduct the same.3.16 Employment Matters.(a) Section 3.16(a) of the Company Disclosure Schedule sets forth a complete andaccurate list of all current Company Employees as of the date hereof and each such CompanyEmployee’s (i) rate of pay or annual compensation (including actual or potential bonus payments andthe terms of any commission payments or programs), (ii) title(s), and (iii) status and location ofemployment or engagement. Section 3.16(a) of the Company Disclosure Schedule sets forthall employment, consulting, independent contractor, severance pay, continuation pay, termination orindemnification Contracts between the Company and any current or former Company Employee or underwhich the Company may have any Liability (each, an “Employee Agreement”).(b) The Company is not and, as of the Closing Date, will not be delinquent in payments to anyCompany Employee for any wages, salaries, commissions, bonuses, benefits or other compensation forany services performed by them to date or through the Closing Date. Section 3.16(b) of theCompany Disclosure Schedule sets forth a list of all outstanding loans or advances to CompanyEmployees.(c) Neither the Company nor, to the Knowledge of the Company, any Company Employee, is inviolation of any term of any employment, consulting, independent contractor, non-disclosure,non-competition, inventions assignment or any other Contract (or any other legal obligation such asa trade secrets statute or common law duty of loyalty) relating to the relationship of such CompanyEmployee with the Company or any other Person or has beennotified that such Company Employee may be in violation of any such Contract or other legalobligation.
 
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(d) The Company is not, and has never been, party to any collective bargaining Contract orother Contract with any labor unions or other representatives of the Company Employees nor is itunder any obligation to bargain with any bargaining agent on behalf of any Company Employees. Tothe Knowledge of the Company, there have not been any organization campaigns, petitions or otherunionization activities seeking recognition of a collective bargaining unit which could affect theBusiness.(e) Section 3.16(e) of the Company Disclosure Schedule sets forth a complete andaccurate list of each Employee Benefit Plan under which current or former Company Employees (ortheir beneficiaries) are eligible to participate or derive a benefit or for which the AcquiredAssets may be subject to any Liability. Neither the Company nor any ERISA Affiliate has any planor commitment to establish any new Employee Benefit Plan, to modify any Employee Benefit Plan(except to the extent required by Law or to conform any such Employee Benefit Plan to therequirements of any applicable Law, in each case as previously disclosed to the Buyer in writing,or as required by this Agreement), or to adopt or enter into any Employee Benefit Plan. Neitherthe Company nor any ERISA Affiliate has ever maintained, established, sponsored, participated in,contributed to, or otherwise incurred any obligation or liability (including contingent liability)under any “multiemployer plan” (as defined in Section 3(37) of ERISA) or an arrangement subject toSection 501(c)(9), 419 or 419A of the Code, or a “pension plan” (as defined in Section 3(2) ofERISA) subject to Title IV of ERISA or Section 412 of the Code, a self insured plan providingmedical benefits or a plan providing for medical or life insurance coverage beyond termination ofemployment (other than COBRA coverage or under similar state Laws). Neither the Company nor anyERISA Affiliate has at any time ever maintained, established, sponsored, participated in orcontributed to any multiple employer plan or to any plan described in Section 413 of the Code.Neither the Company nor any ERISA Affiliate has any actual or potential withdrawal liability(including any contingent liability) for any complete or partial withdrawal (as defined in Sections4203 and 4205 of ERISA) from any multiemployer plan.(f) The Company and its ERISA Affiliates have performed all material obligations required tobe performed by them under, are not in material breach, default or violation of, and have noKnowledge of any breach, default or violation by any other party to each Employee Benefit Plan, andall Employee Benefit Plans have been established and maintained in material compliance with theterms thereof and requirements prescribed by any and all Laws (including ERISA and the Code) andOrders currently in effect with respect thereto.(g) The Company has complied in all material respects with all its obligations under Law withrespect to the employment or engagement of all Company Employees, including with respect toemployment practices, terms and conditions of employment, wage and hours, and the health and safetyat work of their employees, and there are no claims pending or, to the Knowledge of the Company,threatened by any person in respect of employment or engagement or any accident or injury.
 
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3.17 No Brokers. Except as set forth in Section 3.17 of the CompanyDisclosure Schedule, neither the Company, or any of its employees, officers, managers or agents,nor the Member, has employed or engaged, either directly or indirectly, or incurred or will incurany Liability to, any broker, finder, investment banker or other agent in connection with thetransactions contemplated by this Agreement.3.18 Taxes.(a) All Taxes payable by the Company have been timely paid, or, to the extent not required tohave been paid, have been accrued in the Interim Balance Sheet; all federal, state, local andforeign Tax Returns required to be filed by or on behalf of the Company with respect to any suchTaxes have been timely filed, and all such Tax Returns are complete and correct and have been filedin accordance with all applicable Law; all Taxes that the Company is or was required by Law to havewithheld or collected, have been duly withheld or collected and, to the extent required, have beenpaid to the proper Governmental Authority; no unpaid Tax deficiency has been asserted against orwith respect to the Company and the Company has not received notice of any such assertion; thereare no Actions pending with respect to any Taxes for which the Company is liable; the Company hasnot been informed by any jurisdiction that such jurisdiction believes that the Company is or wasrequired to file any Tax Return that was not filed. The Company has not executed or entered intoany ruling or agreement with any Governmental Authority regarding Taxes or has agreed to make anyadjustment to its income or deductions pursuant to a change in its method of accounting.(b) The Company has not been a United States real property holding corporation within themeaning of Section 897(c)(2) of the Code during the applicable period specified in Section897(c)(1)(A)(ii) of the Code, and no withholding pursuant to Section 1445 of the Code will berequired in connection with this Agreement or the transactions contemplated hereby.(c) There are no Liens with respect to Taxes upon any of the Acquired Assets. There is nobasis for the assertion of any claims for Taxes which, if adversely determined, would result in theimposition of any Lien on the Acquired Assets.(d) The Company has not been audited by the IRS or relevant state tax authorities. No TaxReturn of the Company is currently being audited by any Governmental Authority and no examinationor audit of any such Tax Return is currently threatened in writing by any Governmental Authority.3.19 Contracts.(a) Section 3.19 of the Company Disclosure Schedule sets forth a complete and accuratelist of all of the following Contracts to which the Company is a party or is otherwise bound or towhich any of the Acquired Assets are subject (and with respect to any oral Contract provides acomplete description of the terms of such Contract) (the “Scheduled Contracts”):(i) all notes, loans, credit agreements, mortgages, indentures, securityagreements, operating leases, capital leases and other Contracts relating toIndebtedness and any Contract of suretyship or guaranty;
 
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(ii) all employee agreements, Contracts with consultants and independentcontractors, and all bonus, commission, compensation, pension, insurance,retirement, deferred compensation and other plans, Contracts and other arrangementsfor the benefit of any Company Employee;(iii) all Contracts involving an annual payment to or by the Company from or toany Person in excess of $10,00 individually or $25,000 in the aggregate with respectto all Contracts with such Person;(iv) all Contracts for capital expenditures in excess of $10,000 individuallyfor any Person or $25,000 in the aggregate for all Contracts with such Person;(v) all client Contracts for the purchase of products or services from theCompany;(vi) all Contracts with sales agents or other representatives;(vii) all Contracts for the purchase or sale of any asset or property of theCompany in excess of $10,000 individually for any Person or $25,000 in the aggregatefor all Contracts with such Person;(viii) all joint venture, partnership or other Contracts involving a share ofprofits or losses with another Person;(ix) all Contracts with any Affiliate, officer or Member of the Company or anyfamily member or Affiliate of any officer or Member;(x) all Contracts pursuant to which the Company has granted or receivedmanufacturing rights, most favored nation pricing provisions or exclusive marketing,sales or other rights relating to any product, service, technology, asset orterritory;(xi) all sales, agency, representative, distributor, franchise or similarContracts;(xii) all Contracts that limit or purport to limit the ability of the Companyto compete in any line of business or with any Person or in any geographic area orduring any period of time;(xiii) any material Contract which is terminable upon or prohibits a sale ofsubstantially all of the assets of the Company;(xiv) all Contracts granting or permitting any Lien on any of the AcquiredAssets;(xv) all Contracts with vendors, suppliers, manufacturers or contractors; and(xvi) any other Contracts that are material to the Company and have not beenpreviously disclosed pursuant to this Section 3.19.
 
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(b) The Company has delivered to the Buyer true and complete copies of all Assigned Contractsand Scheduled Contracts, including all amendments thereto. The Company is not in material breachor default under the terms of any Assigned Contract and there exists no event, condition oroccurrence which (with or without due notice or lapse of time, or both) would constitute such amaterial breach or default by the Company, nor has the Company received any notice of any materialbreach or default or alleged breach or default under any Assigned Contract. To the Knowledge ofthe Company, no other party to any Assigned Contract is in material breach or default under theterms thereof, and, to the Knowledge of the Company, there exists no event, condition or occurrencewhich (with or without due notice or lapse of time, or both) would constitute such a materialbreach or default by any such party, nor has the Company received any notice of any breach ordefault by any such party.(c) The Assigned Contracts are in full force and effect and are valid and binding obligationsof the Company and, to the Knowledge of the Company, the other parties thereto. The Company hasnot received any notice from any other party to an Assigned Contract of the termination orthreatened or anticipated termination thereof, or of any claim, dispute or controversy with respectthereto, nor does the Company Know of any event or set of circumstances which are reasonably likelyto result therein. No party to an Assigned Contract has (i) alleged any failure to perform on thepart of the Company or (ii) made any claims against, or sought indemnification from, the Company asto any matter arising under or with respect to such Assigned Contract, and, to the Knowledge of theCompany, neither the Company nor the Member or any of the Company’s officers has been advised thatany such claims may be asserted or initiated.(d) Except as set forth in Section 3.19(d) of the Company Disclosure Schedule, noconsent of, or notice to, any third party is required under any Assigned Contract as a result of orin connection with, and neither the enforceability nor any of the terms or provisions of anyAssigned Contract will be affected in any manner by, the execution, delivery and performance ofthis Agreement or any Related Agreement, or the transactions contemplated hereby or thereby.(e) With respect to any Assigned Contract, (i) the acceptance of any deliverables has not beencontested; (ii) there are no outstanding requests for the removal of any of the Company’s personnelfrom performing services under the Contract; (iii) no penalties of any type have been assessed; and(iv) there are no pending or, to the Knowledge of the Company, threatened, contract suspension,scope reduction or curtailment actions.3.20 Transactions With Affiliates. Except as set forth in Section 3.20 of theCompany Disclosure Schedule, no current or former manager, officer, member or employee of theCompany or, to the Knowledge of the Company, any member of any such Person’s family, is a party toany transaction with the Company (including any Contract providing for the employment of,furnishing of goods or services by, rental of real or personal property from, borrowing money fromor lending money to, or otherwise requiring payments to, any such Person, but excluding paymentsfor normal salary and bonuses and reimbursement of expenses)or, to the Knowledge of the Company, the direct or indirect owner of an interest in any Personwhich is a present or potential competitor, supplier or client of the Company and, to the Knowledgeof the Company, no such Person receives income from any source other than the Company which relatesto the Business of, or should properly accrue to, the Company.
 
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3.21 Insurance. The Company, the Business and the Acquired Assets are, and willthrough the Closing Date be, insured with reputable insurers against risks normally insured againstby similar businesses under similar circumstances. Section 3.21 of the Company DisclosureSchedule lists, by type, carrier, policy number, limits, premium and expiration date, all insurancecoverage carried by the Company, together with a history of all claims made by the Companythereunder since January 15, 2010, which insurance, except as described on Section 3.21 ofthe Company Disclosure Schedule, will remain in full force and effect in accordance with policyterms, with respect to all events occurring prior to the Closing Date. Section 3.21 of theCompany Disclosure Schedule also states whether each such policy is carried on a “claims made” or“occurrence” basis. All premiums with respect to such insurance required to be paid are currentlypaid and will be paid through the Closing Date. The Company has not failed to give any notice ofany claim under any such policy in due and timely fashion, has not received notice of cancellationor non-renewal of any such policy and has no Knowledge of any threatened or proposed cancellationor non-renewal of any such policy, and the Company is otherwise in compliance with the terms ofsuch policies. The Company has never maintained, established, sponsored, participated in orcontributed to any self-insurance plan. There are no outstanding claims by the Company under anysuch policy which have gone unpaid for more than thirty (30) days, or as to which the insurer hasdisclaimed liability. The Company has not been denied or had revoked, cancelled, non-renewed orrescinded any policy of insurance.3.22 Intellectual Property.(a) Section 3.22(a) of the Company Disclosure Schedule sets forth a complete andaccurate list of all United States and foreign Trademarks (including unregistered Trademarks), andInternet domain names comprising Company Intellectual Property, indicating for each, the applicablejurisdiction, registration number (or application number) and date issued (or date filed). TheCompany has neither any registered or unregistered Patents or Copyrights, nor is in process ofapplying for any Patents or Copyrights. All registered and applied for Trademarks included in theCompany Intellectual Property are currently pending, in material compliance with all legalrequirements (including the timely filing of responses, statements or affidavits of use andincontestability and renewal applications and required fees with respect to Trademarks), are validand enforceable, and are not subject to any fees, responses or actions falling due within onehundred eighty (180) days after the Closing Date. No such Trademark or Design has been or is nowinvolved in any cancellation proceeding before the United States Patent and Trademark Office (the“USPTO”) and, to the Knowledge of the Company, no such Action is threatened with respect toany of such Trademarks. All Trademarks included in the Company Intellectual Property have been incontinuous use by the Company since they were first used by the Company. To the Knowledge of theCompany, there has been no prior use of such Trademarks by any Person which would confer upon suchPerson superior rights in such Trademarks, respectively; and the registered Trademarks have beencontinuously used in the form appearing in, and in connection with the goods and services listedin, their respective registration certificates or identified in their respective pendingapplications. To the Knowledgeof the Company, there are no Trademarks of any third party potentially conflicting with theTrademarks included in the Company Intellectual Property.
 
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(b) Section 3.22(b) of the Company Disclosure Schedule sets forth a complete andaccurate list of all license agreements granting any right to use or practice any rights under anyCompany Intellectual Property (“Licensed Intellectual Property”), whether the Company isthe licensee or licensor thereunder, and any assignments, consents, forbearances to sue, judgments,orders, settlements, indemnification or similar obligations relating to any Licensed IntellectualProperty to which the Company is a party or otherwise bound (collectively, the “LicenseAgreements”), indicating for each the title, the parties, the date executed, whether or not itis exclusive and the Licensed Intellectual Property covered thereby. The License Agreements arevalid and binding obligations of the Company and to the Company’s Knowledge, of each other partythereto enforceable in accordance with their respective terms, and neither the Company nor, to theKnowledge of the Company, the other party or parties thereto is or are in material breach ordefault thereunder, and there exists no event, condition or occurrence which (with or without duenotice or lapse of time, or both) would constitute such a breach or default by the Companythereunder or, to the Knowledge of the Company, by the other party or parties thereto of any of theforegoing. Except as set forth in Section 3.22(b) of the Company Disclosure Schedule, noconsent of, or notice to, any Person is required under any License Agreement as a result of or inconnection with, and the terms or enforceability of any License Agreement will not be affected by,the execution, delivery and performance of this Agreement or the Related Agreement, or thetransactions contemplated hereby or thereby. The Company has not received any notice oftermination or cancellation under any License Agreements.(c) The Company Intellectual Property constitutes all of the Intellectual Property used in ornecessary for the conduct of the Business as currently conducted, including all IntellectualProperty necessary to use, manufacture, market and distribute the Company Services.(d) No royalties, honoraria or other fees are payable to any third parties for the use of orright to use any Company Intellectual Property except pursuant to the License Agreements set forthin Section 3.22(d) of the Company Disclosure Schedule. All inventions, discoveries, TradeSecrets, ideas and works, whether or not patented or patentable or otherwise protectable under Law,created, prepared, developed or conceived by employees or independent contractors of the Companyare the exclusive property of the Company and were either created, prepared, developed or conceivedby (i) employees of the Company within the scope of their employment or (ii) by independentcontractors who have duly assigned their rights to the Company pursuant to enforceable writtenagreements.(e) Except as set forth in Section 3.22(e) of the Company Disclosure Schedule, theCompany (i) owns exclusively all Company Intellectual Property purported to be owned by theCompany, and (ii) has a valid, enforceable, freely transferable and sufficient right to use for thepurposes as the Company has previously used, all Licensed Intellectual Property, free and clear ofall Liens.
 
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(f) The operation of the Business as currently conducted, the sale or use of the CompanyServices, and the use of the Company Intellectual Property in connection therewith has not, doesnot and will not, when conducted in substantially the same manner following the Closing, infringeupon, violate, misappropriate or make unlawful use of any Intellectual Property or other rights ofany other Person or constitute unfair trade practices. The Company has not received notice of anyallegation that the use of any Company Intellectual Property or the conduct of the Business ascurrently conducted would infringe upon, violate, misappropriate or make unlawful use of anyIntellectual Property or other rights of any other Person, nor is the Company aware of any basisfor such a claim. To the Knowledge of the Company, no Person is misappropriating, infringing,violating or making unlawful use of any Company Intellectual Property, nor is the Company aware ofany basis for such a claim. There is no Action pending or, to the Knowledge of the Company,threatened alleging that the conduct of the Business infringes upon, violates or constitutes theunauthorized use of the Intellectual Property or other rights of any other Person, nor is theCompany aware of any basis for such a claim. The Company has not threatened to bring, and theCompany has not brought, any Action regarding the ownership, use, validity or enforceability of anyCompany Intellectual Property.(g) The consummation of the transactions contemplated hereby will not result in the loss orimpairment of any Company’s ownership or other rights in and to any of the Company IntellectualProperty or under any of the License Agreements, require the Company to grant to any third partyany right to any Company Intellectual Property or obligate the Company to pay any royalties orother amounts to any third party in excess of any amounts payable to such third parties prior tothe Closing, nor will the consummation of the transactions contemplated hereby require the approvalor consent of any Governmental Authority or other Person in respect of any Company IntellectualProperty.(h) Section 3.22(h) of the Company Disclosure Schedule lists all Software (other thanoff-the-shelf or shrink wrap software) which is owned, licensed or otherwise used by the Companyand indicates whether such Software is subject to an escrow agreement and/or license agreement and,if so, indicates where such Software is held in escrow and identifies such license agreement. Norights in the Software have been transferred to any third party.(i) Section 3.22(i) of the Company Disclosure Schedule lists all Software or othermaterial that is distributed as Open Source Software or “free software” in connection with theoperation of the Business (the “Open Source Materials”). All of the Open Source Materialsused by the Company in connection with the Acquired Assets or the Licensed Software have been usedin compliance with the terms of each respective license. The Company has not used Open SourceMaterials that create, or purport to create, obligations for the Company with respect to theAcquired Assets or the Business or grant, or purport to grant, to any third party, any rights orimmunities under any Company Intellectual Property (including, but not limited to, using any OpenSource Materials that require, as a condition of use, modification or distribution of the OpenSource Materials that other Software incorporated into, derived from or distributed with the OpenSource Materials be (x) disclosed or distributed in source code form, (y) be licensed for thepurpose of making derivative works or (z) be redistributable at no charge).
 
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(j) The Company has taken all reasonable steps in accordance with normal industry practice toprotect the Company Intellectual Property, including all rights in confidentialinformation and Trade Secrets included in the Company Intellectual Property. Except pursuantto enforceable confidentiality obligations in favor of the Company, there has been no disclosure toany third party of any confidential information or Trade Secrets included in the CompanyIntellectual Property. No current or former employee, consultant, contractor, partner or investorof the Company is in unauthorized possession of any of the Trade Secrets or Software included inthe Company Intellectual Property.(k) Section 3.22(k) of the Company Disclosure Schedule describes all databases used bythe Company (the “Databases”). Following the Closing, the Databases will have at least thesame information and functionality as exists prior to the Closing. No Person (other than theCompany) has any right, title or interest in or to any of the information contained in any of theDatabases and the Company has not sold, assigned, leased, transferred, permitted the use of orotherwise disclosed to any Person any information contained in any of the Databases, including anyPersonally Identifiable Information. The Company has complied and is in compliance with allapplicable privacy Laws, and all information contained in the Databases has been collected, usedand maintained in accordance with all applicable privacy Laws. Except as set forth in Section3.22(k) of the Company Disclosure Schedule, the Company has the right to sell and assign all ofits rights in and to the Databases and all information contained therein, and any such sale andassignment will not violate any privacy policy applicable to any Personally IdentifiableInformation contained therein at the time it was collected.3.23 [Reserved.]3.24 Absence of Restrictions on Business Activities. There is no Contract or Orderbinding upon the Company or any of the Acquired Assets which has had or could reasonably beexpected to have the effect of prohibiting or impairing any business practice of the Company or theBuyer, any acquisition of property (tangible or intangible) by the Company or the Buyer, theconduct of business by the Company or the Buyer, or otherwise limiting the freedom of the Companyto engage in any line of business or to compete with any Person. Without limiting the generalityof the foregoing, the Company has not entered into any Contract under which it is restricted, orunder which the Buyer would be restricted following the Closing, from selling, licensing,manufacturing or otherwise distributing any Company Services or from providing services tocustomers or potential customers or any class of customers, in any geographic area, during anyperiod of time, or in any segment of the market.3.25 Certain Business Practices. Neither the Company nor any officer, employee oragent of the Company on behalf of the Company, nor the Member, has: (a) used any funds for unlawfulcontributions, gifts, entertainment or other unlawful payments relating to political activity, (b)made any unlawful payment to any foreign or domestic government official or employee or to anyforeign or domestic political party or campaign or violated any provision of the Foreign CorruptPractices Act of 1977, as amended, or any similar applicable Law.3.26 Anti-Terrorism Laws; Trading with the Enemy.(a) The Company is not in violation of any Anti-Terrorism Law and has not engaged in orconspired to engage in any transaction that evades or avoids, or has the purpose ofevading or avoiding, or attempts to violate, any of the prohibitions set forth in anyAnti-Terrorism Law.(b) The Company has not engaged, nor does it intend to engage, in any business or activityprohibited by the Trading with the Enemy Act.
 
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3.27 Books and Records. The books and records of the Company delivered or madeavailable to the Buyer are complete and accurate in all material respects and reflect the assets,liabilities, prospects, business, financial condition and results of operations of the Business andhave been maintained in accordance with prudent business practices. The minute books of theCompany contain accurate and complete records, in all material respects, of all meetings held by,and actions taken by, the sole Member of the Company, and no meeting of the Members has been heldwhere material matters were approved, voted upon or acted upon for which minutes have not beenprepared and are not contained in such minute books.3.28 [Reserved*.*]3.29 Relationships with Clients and Vendors.(a) Section 3.29(a) of the Company Disclosure Schedule sets forth a list of eachclient of the Company that has generated greater than $10,000 in revenue during the Company’s 2009or 2010 fiscal year (each, a “Material Client”). There are not, and have not been, anymaterial disputes with any Material Client. Except as set forth in Section 3.29(a) of theCompany Disclosure Schedule, no Material Client has cancelled, terminated, or otherwise altered itsrelationship with the Company nor has any current client of the Company notified the Company of anyintention to do so or otherwise threatened to cancel, terminate or materially alter itsrelationship with the Company. There has been no material reduction in the rate or amount ofservices provided to and paid by any current client of the Company.(b) Section 3.29(b) of the Company Disclosure Schedule sets forth a list of the ten(10) largest vendors, by dollar volume, of the Company that has supplied to the Company any productor service relating to the Business during the Company’s 2009 or 2010 fiscal year (each, a“Vendor”). There are not, and have not been, any material disputes with any Vendor.Except as set forth in Section 3.29(b) of the Company Disclosure Schedule, no Vendor hascancelled, terminated or otherwise altered its relationship with the Company nor has any currentvendor of the Company notified the Company of any intention to do so or otherwise threatened tocancel, terminate or materially alter its relationship with the Company.3.30 Solvency. Except as set forth in Section 3.30 of the Company DisclosureSchedule, the Company (a) has sufficient capital to carry on the Business, (b) is able to pay itsdebts as they mature, and (c) is solvent, and the value of its assets, at a fair valuation, isgreater than all of its debts. The Company has not (i) made a general assignment for the benefitof creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of aninvoluntary petition by any creditor, (iii) suffered the appointment of a receiver to takepossession of all or any portion of its assets, (iv) suffered the attachment or judicial seizure ofall or any portion of its assets, (v) admitted in writing its inability to pay its debts as theycome due or (vi) made an offer of settlement, extension or composition to its creditors generally.
 
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3.31 Disclosure. Neither this Agreement (including the exhibits and schedules hereto)nor any other agreement, document or certificate delivered or to be delivered to the Buyer by or onbehalf of the Company pursuant to the terms of this Agreement contains or will contain when madeany untrue statement of a material fact or omits or will omit when made to state a material factnecessary in order to make the statements contained herein or therein not misleading in light ofthe circumstances under which they were made. There is no fact within the Knowledge of the Companythat has not been disclosed in this Agreement and which could reasonably be expected to have aBusiness Material Adverse Effect.**ARTICLE IV****REPRESENTATIONS AND WARRANTIES OF THE MEMBER**Except as disclosed by the Member in the disclosure schedule, dated as of the date of thisAgreement and attached hereto (the “Member Disclosure Schedule”), the Member herebyrepresents and warrants to the Buyer as of the date hereof and as of the Closing Date as follows.The Member Disclosure Schedule shall be arranged in sections corresponding to the numbered andlettered sections and subsections contained in this Article IV, and the disclosures in anysection or subsection of the Member Disclosure Schedule shall qualify only the correspondingsection or subsection of this Article IV.4.1 Organization; Good Standing and Qualification. The Member is a limited liabilitycompany duly formed, validly existing and in good standing under the laws of the State of Delaware.4.2 Authority; Execution; Enforceability. The Member has all necessary power andauthority to execute, deliver and perform its obligations under this Agreement and each RelatedAgreement to which it is a party and to perform all of its obligations hereunder and thereunder andto consummate the transactions contemplated hereby and thereby. The execution and delivery by theMember of this Agreement, the performance of its obligations hereunder, and the consummation by itof the transactions contemplated hereby have been duly and validly authorized by all action on thepart of the Member and, no other proceedings on the part of the Member are necessary to authorizethis Agreement or to consummate the transactions so contemplated herein. This Agreement and eachRelated Agreement to which such Member is, or will become, a party has been duly executed anddelivered by the Member and constitutes a legal, valid and binding obligation of such Member,enforceable against the Member in accordance with its respective terms, subject to EnforceabilityExceptions.4.3 Title to Company Membership Percentages. The Member is the record and beneficialowner of, and has good and marketable title to, the entire membership percentage of the Company.4.4 Consents and Approvals. Except as set forth in Section 4.4 of the MemberDisclosure Schedule, the execution and delivery by the Member of this Agreement, the RelatedAgreements to which it is a party or any instrument required by this Agreement to be executed anddelivered by the Member do not, and the performance of this Agreement, the Related Agreements towhich it is a party and any instrument required by this Agreement to be executedand delivered by the Member at the Closing, shall not, require the Member to obtain anyApproval of any Person or Approval of, observe any waiting period imposed by, or make any filingwith or notification to, any Governmental Authority, domestic or foreign.
 
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4.5 No Violation. Except as set forth in Section 4.5 of the Member DisclosureSchedule, the execution and delivery by the Member of this Agreement, the Related Agreements towhich the Member is a party or any other instrument or document required by this Agreement to beexecuted and delivered by the Member do not, and the performance of this Agreement, the RelatedAgreements to which the Member is a party or any other instrument or document required by thisAgreement to be executed and delivered by the Member, will not (a) conflict with or violate theOrganizational Documents of the Member, (b) conflict with or violate any Law or Order, in eachcase, applicable to the Member or by which any of the Acquired Assets are bound, or (c) result inany breach or violation of or constitute a default (or an event that with notice or lapse of timeor both would become a default) under any Contract or Approval to which the Member is a party or bywhich the Member or the Member’s properties are bound or affected.4.6 Legal Proceedings. Except as set forth in Section 4.6 of the MemberDisclosure Schedule, there is no Action pending or, to the Knowledge of the Member, threatenedagainst or materially affecting the Member that would (a) give any Person the right to enjoin orrescind the transactions contemplated by this Agreement or (b) otherwise prevent the Member from(i) executing and delivering this Agreement or the Related Agreements to which the Member is aparty or (ii) performing the Member’s obligations pursuant to, or observing any of the terms andprovisions of, this Agreement or the Related Agreements to which the Member is a party.**ARTICLE V****REPRESENTATIONS AND WARRANTIES OF THE BUYER AND HSCC**The Buyer and HSCC, jointly and severally, hereby represent and warrant to the Company and theMember:5.1 Organization; Good Standing and Qualification. Each of the Buyer and HSCC is acorporation duly organized, validly existing and in good standing under the laws of the State ofDelaware.5.2 Authorization; Binding Obligation. Each of the Buyer and HSCC has all necessarycorporate power and authority to execute and deliver this Agreement and to perform its obligationshereunder and to consummate the transactions contemplated hereby. The execution and delivery bythe Buyer of this Agreement, the performance of its obligations hereunder, and the consummation byit of the transactions contemplated hereby have been duly and validly authorized by all action onthe part of each of the Buyer and HSCC, and no other corporate proceedings on the part of the Buyeror HSCC are necessary to authorize this Agreement or to consummate the transactions so contemplatedherein. This Agreement has been duly and validly executed and delivered by each of the Buyer andHSCC, and this Agreement constitutes a legal, valid, and binding obligation of each of the Buyerand HSCC, enforceableagainst each of the Buyer and HSCC in accordance with its terms, except as limited by theEnforceability Exceptions.
 
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5.3 Consents and Approvals. The execution and delivery by each of the Buyer and HSCCof this Agreement does not, and the performance of this Agreement by each of the Buyer and HSCCshall not, require the Buyer or HSCC to obtain any Approval of any Person or Approval of, observeany waiting period imposed by, or make any filing with or notification to, any GovernmentalAuthority.5.4 No Conflict. The execution and delivery by each of the Buyer and HSCC of thisAgreement, the Related Agreements to which the Buyer or HSCC, as applicable, is a party or anyother instrument or document required by this Agreement to be executed and delivered by the Buyeror HSCC do not, and the performance of this Agreement, the Related Agreements to which the Buyer orHSCC, as applicable, is a party or any other instrument or document required by this Agreement tobe executed and delivered by the Buyer or HSCC will not (a) conflict with or violate the respectiveOrganizational Documents of the Buyer or HSCC, (b) conflict with or violate any Law or Orderapplicable to the Buyer or HSCC, or any of their respective properties or assets or (c) result in abreach or violation of or constitute a default (or an event that with notice or lapse of time orboth would become a default) under any material Contract to which the Buyer or HSCC is a party, inany case, except where such conflict or breach would not have a material adverse effect on theBuyer’s or HSCC’s ability to consummate the transactions contemplated hereby.5.5 No Brokers. Neither the Buyer nor HSCC has employed, either directly orindirectly, nor incurred or will incur any Liability to, any broker, finder, investment banker orother agent in connection with the transactions contemplated by this Agreement.5.6 Legal Proceedings. There is no Action pending or, to the knowledge of the Buyeror HSCC, threatened by or against or affecting the Buyer or HSCC that would (a) give any Person theright to enjoin or rescind the transactions contemplated by this Agreement, or (b) otherwiseprevent the Buyer or HSCC from (i) executing and delivering this Agreement or (ii) performing theBuyer’s or HSCC’s obligations pursuant to, or observing any of the terms and provisions of, thisAgreement.**ARTICLEVI**