Exhibit 10.1**ASSET PURCHASE AGREEMENT****among****eFunds Corporation,****Chex Systems, Inc.,****National Check Protection Service Business Trust,****National Data Verification Service Business Trust****and****The Shareholders****made as of****May 3, 2005**
 

 
**Table of Contents**           **I. Definitions**  **2** **II. Purchase of Acquired Assets and Closing**  **2**    2.1  Purchase and Sale of Acquired Assets  2    2.2  Excluded Assets  4    2.3  Assumption of Assumed Liabilities  5    2.4  Retained Liabilities  5    2.5  Purchase Price  7    2.6  Estimated Purchase Price  7    2.7  Retained Amounts  7    2.8  The Closing  10    2.9  Post-Closing Adjustment to Purchase Price  12    2.10  Unobtained Consents  14    2.11  Sellers’ Representative  15    2.12  Further Assurances  16 **III. Representations and Warranties Regarding Sellers, NCPS and NDVS**  **16**    3.1  Incorporation; Power and Authority  16    3.2  Valid and Binding Agreement  16    3.3  No Breach; Consents  17    3.4  Capitalization  17    3.5  Subsidiaries  18    3.6  Financial Statements  18    3.7  Absence of Undisclosed Liabilities  18    3.8  Books and Records  18    3.9  Absence of Certain Developments  19    3.10  Property  21    3.11  Accounts Receivable  22    3.12  Tax Matters  22    3.13  Intellectual Property Rights  24    3.14  Material Contracts  26    3.15  Litigation  28    3.16  Insurance  28    3.17  Compliance with Laws; Governmental Authorizations  28    3.18  Environmental Matters  30    3.19  Warranties  30    3.20  Employees  30    3.21  Employee Benefits  32    3.22  Customers  34    3.23  Suppliers  34    3.24  Affiliate Transactions  34    3.25  Brokerage  34    3.26  Availability of Documents  34    3.27  Solvency  34    3.28  Disclosure  35 
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           **IV. Representations and Warranties of Buyer**  **35**    4.1  Incorporation; Power and Authority  35    4.24.3  Valid and Binding AgreementNo Breach; Consents  3536    4.4  Brokerage  36 **V. Agreements of Sellers and the Shareholders**  **36**    5.1  Conduct of the Business  36    5.2  Notice of Developments  37    5.3  Pre-Closing Access  37    5.4  Pre-Closing Mergers  37    5.5  Conditions  37    5.6  Consents and Authorizations; Regulatory Filings  38    5.7  No Sale  38    5.8  Post-Closing Access  38    5.9  Litigation Support  38    5.10  Nondisparagement  38    5.11  Non-Hire  38    5.12  Confidentiality  38    5.13  Assignment of Confidentiality Agreements  39    5.14  Covenant Not to Compete  40    5.15  Change of Business Name  40    5.16  Release of Claims  41    5.17  Termination of 401(k) Plan  41    5.18  Termination; Payment of Wages; Plans  41    5.19  COBRA  42    5.20  Tax Elections  42    5.21  Payment of Taxes by Sellers  42    5.22  Payment of Other Retained Liabilities  42    5.23  Restrictions on Seller Dissolution and Distributions  43 **VI. Agreements of Buyer**  **43**    6.1  Conditions  43    6.2  Books and Records; Access  43    6.3  Employee Matters  43 **VII. Conditions to Closing**  **45**    7.1  Conditions to Buyer’s Obligations  45    7.2  Conditions to Sellers’ Obligations  47 **VIII. Termination**  **47**    8.1  Termination  47    8.2  Effect of Termination  48 **IX. Indemnification**  **48**    9.1  Indemnification by Sellers and Shareholders  48    9.2  Indemnification by Buyer and Parent  50    9.3  Third-Party Actions  51    9.4  Sole and Exclusive Remedy  52 
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              9.5  Tax Adjustment  53    9.6  Indemnification in Case of Strict Liability or Indemnitee Negligence  53 **X. General**  **53**    10.1  Press Releases and Announcements  53    10.2  Expenses  53    10.3  Amendment and Waiver  54    10.4  Notices  54    10.5  Assignment  55    10.6  No Third-Party Beneficiaries  56    10.7  Severability  56    10.8  Complete Agreement  56    10.9  Schedules  56    10.10  Signatures; Counterparts  56    10.11  Governing Law  56    10.12  Specific Performance  57    10.13  Jurisdiction  57    10.14  Waiver of Jury Trial  57    10.15  Construction  57    10.16  Time of Essence  58  **Signatures**  59  Exhibit A—Shareholders    Exhibit B—Defined Terms    Exhibit C—Transition Services Agreement    Exhibit D—Bill of Sale    Exhibit E—Assignment and Assumption Agreement    Exhibit F—Form of Opinion of Counsel for Seller    
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**ASSET PURCHASE AGREEMENT**     This **ASSET PURCHASE AGREEMENT**(this “*Agreement*”) is made as of May 3, 2005, among ChexSystems, Inc., a Minnesota corporation (“*Buyer*”), eFunds Corporation, a Delaware corporation andthe sole shareholder of Buyer (“*Parent*”), National Check Protection Service Business Trust, aMassachusetts business trust (“*NCPS Business Trust*”), National Data Verification Service BusinessTrust, a Massachusetts business trust (“*NDVS Business Trust*”), Robert J. Zammito, Jr. (“*Sellers’Representative*”) and the shareholders of NCPS Business Trust and NDVS Business Trust listed on*Exhibit A*(the “*Shareholders*”). NCPS Business Trust and NDVS Business Trust are referred to inthis Agreement together as “*Sellers*” and each as “*Seller*.”**Recitals**     **WHEREAS**, NCPS Business Trust owns all of the outstanding capital stock of National CheckProtection Service, Inc., a Massachusetts corporation (“*NCPS*”).     **WHEREAS**, NDVS Business Trust owns all of the outstanding capital stock of National DataVerification Service, Inc., a Massachusetts corporation (“*NDVS*”).     **WHEREAS**, NCPS and NDVS are currently engaged in the business of providing new accountverification and employment screening services for financial institutions (the “*Business*”).     **WHEREAS**, the Shareholders together own all of the outstanding shares of beneficial interest inNCPS Business Trust and NDVS Business Trust.     **WHEREAS**, the trustees of Sellers have authorized the sale of substantially all of the assetsof NCPS and NDVS to Buyer pursuant to the terms of this Agreement.     **WHEREAS**, Sellers desire to sell, and Buyer desires to buy, substantially all of the assets ofNCPS and NDVS on the terms and subject to the conditions set forth in this Agreement.     **WHEREAS**, prior to closing the transactions contemplated by this Agreement, Sellers and theShareholders will procure the merger of NCPS with and into NCPS Business Trust and the merger ofNDVS with and into NDVS Business Trust.     **NOW, THEREFORE**, in consideration of the mutual representations, warranties and agreementscontained in this Agreement, and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties agree as follows:
 

 
**I. Definitions**     All capitalized terms used in this Agreement have the meanings set forth in *Exhibit B*to thisAgreement.**II. Purchase of Acquired Assets and Closing**     2.1 Purchase and Sale of Acquired Assets. At the Closing and on the terms and subjectto the conditions set forth in this Agreement, Sellers agree to sell to Buyer, and Buyer agrees tobuy from Sellers, free and clear of all Encumbrances except Permitted Encumbrances, all right,title and interest in and to all of the assets that relate to, have been developed for use inconnection with, arise from the conduct of, are used or held for use in connection with or arenecessary for the conduct of the Business as currently conducted and as currently proposed bySellers to be conducted without giving effect to the transactions contemplated by this Agreement(the “*Acquired Assets*”), including the following with respect to each Seller (but excluding theExcluded Assets):     (a) leasehold interests in all of the real property leased or otherwise used oroccupied by Seller, including the Real Property listed on *Schedule 3.10*, including allimprovements and fixtures thereon and all rights and easements appurtenant thereto;     (b) all equipment, tools, furniture, office equipment, computer hardware, supplies,materials, vehicles and other items of tangible personal property of every kind owned orleased by Seller (wherever located and whether or not carried on Seller’s books), togetherwith any express or implied warranty by the manufacturers, sellers or lessors of any item orcomponent part thereof, rights of return, rebate rights, over-payment recovery rights andany other rights of Seller relating to these items (the “*Tangible Personal Property*”);     (c) all (i) accounts receivable and other rights to payment from customers of Sellerfor goods sold or services rendered and the full benefit of all security for such accountsor rights to payment, (ii) other accounts or notes receivable of Seller and the full benefitof all security for such accounts or notes and (iii) Seller’s rights related to any of theforegoing;     (d) all rights with respect to deposits, prepaid expenses, claims for refunds andrights to offset, including rights relating to the prior payment of Taxes and interestpayable with respect to any of the foregoing;     (e) all (i) Contracts to which Seller is a party or a third party beneficiary,including Contracts that are included in the other items listed in this Section 2.1(e),Contracts under which Seller has rights with respect to any of the other Acquired Assets andContracts listed on *Schedule 3.14,*but not including the Excluded Contracts, (ii)outstanding offers or solicitations made by or to Seller to enter into any such Contract and(iii) rights of Seller related to any of the foregoing (the “*Acquired Contracts*”);     (f) all Governmental Authorizations that are held by Seller and may be assigned toBuyer, including all pending applications or renewals;
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     (g) all written materials, data and records of Seller (in whatever form or medium),including to the extent they exist: (i) client, customer, prospect, supplier, dealer anddistributor lists and records, (ii) information regarding referral sources, (iii) productcatalogs and brochures, (iv) sales and marketing, advertising and promotional materials, (v)research and development materials, reports and records, (vi) production reports andrecords, (vii) equipment logs, (viii) service, warranty and claim records, (ix) maintenancerecords and other documents relating to the Real Property and the Tangible PersonalProperty, (x) purchase orders and invoices, (xi) sales orders and sales order log books,(xii) material safety data sheets, (xiii) price lists, (xiv) quotations and bids, (xv)operating guides and manuals, (xvi) correspondence, (xvii) books, records, journals andledgers, (xviii) product ideas and developments and (xix) plans and specifications, plats,surveys, drawings, blueprints and photographs;     (h) all Owned Intellectual Property Rights, including the items listed on *Schedule3.13*, and all rights that Seller may have to institute or maintain any action to protect thesame and recover damages for any infringement thereof;     (i) all Software licensed to Seller, including all such items listed on *Schedule 3.13*;     (j) all Licensed-In Intellectual Property Rights (other than Software), including allsuch items listed on *Schedule 3.13*, and all rights that Seller may have to institute ormaintain any action to protect the same and recover damages for any infringement thereof(such Intellectual Property Rights, together with the Intellectual Property Rights describedin Sections 2.1(h) and 2.1(i), the “*Acquired Intellectual Property*”);     (k) all of Seller’s other intangible rights and property, including (i) going concernvalue, (ii) goodwill, (iii) directory, telecopy and e-mail names, numbers, addresses andlistings and (iv) domain names*,*and all rights that Seller may have to institute or maintainany action to protect the same and recover damages for any misappropriation or misusethereof;     (l) all insurance benefits, including rights and proceeds, arising from or relating tothe Acquired Assets or the Assumed Liabilities prior to the Closing Date;     (m) cash equal to (x) the proceeds from the sale of Tangible Personal Property, otherthan in the Ordinary Course of Business, after the date of this Agreement and prior to theClosing Date and (y) the amount of any payments received by Seller prior to the Closing Daterelated to any performance under any Contract after the Closing Date;     (n) all of Seller’s claims against third parties related to the Acquired Assets,whether choate or inchoate, known or unknown, contingent or noncontingent; and     (o) all other rights, properties and assets of every kind, character and description,tangible or intangible, of Seller, whether or not similar to the items specifically listedabove.
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The foregoing description of the Acquired Assets assumes that the Mergers will have been completedprior to the Closing in accordance with Section 5.4.     2.2 Excluded Assets. Notwithstanding anything to the contrary contained in Section2.1 or elsewhere in this Agreement, the following assets of each Seller (the “*Excluded Assets*”) arenot part of the sale and purchase contemplated by this Agreement, are excluded from the AcquiredAssets and will be retained by such Seller and remain the property of such Seller following theClosing:     (a) all rights of Seller under this Agreement and any other agreements between Sellerand Buyer entered into on or after the date of this Agreement;     (b) Seller’s records relating to the organization, maintenance, existence and goodstanding of Seller as a business trust and NCPS and NDVS as corporations, namely Seller’sand NCPS’ and NDVS’ (i) charter documents, (ii) qualifications to conduct business as aforeign corporation, (iii) taxpayer and other identification numbers, (iv) minute books, (v)stock records, (vi) tax records, (vii) books of account and (vii) corporate seals;     (c) any records that Seller is required by Law to retain in its possession (provided,that copies of any such records that are not “*Excluded Assets*” by another provision of thisSection 2.2 will, to the extent permitted by Law, be provided to Buyer at the Closing);     (d) those Governmental Authorizations and pending applications or renewals ofgovernmental obligations that are nonassignable in accordance with their terms, all of whichare listed on *Schedule 2.2(d)*;     (e) subject to Section 2.1(l), all insurance policies and rights thereunder;     (f) those Contracts listed in *Schedule 2.**2(f)* (the “*Excluded Contracts*”) and thoseContracts entered into after the date of this Agreement not in accordance with theprovisions of this Agreement other than those that Buyer expressly agrees to assume;     (g) any shares of capital stock of Seller, NCPS and NDVS;     (h) all securities owned by or on behalf of Seller;     (i) except as provided in Section 2.1(m), Seller’s cash and cash equivalents (includingmarketable securities and short-term investments);     (j) all accounts receivable from any Insider;     (k) those rights relating to deposits, prepaid expenses, claims for refunds and rightsto offset listed on *Schedule 2.2(k)*, including rights relating to the payment of interestpayable with respect to any of the foregoing;
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     (l) all rights in connection with, and with respect to the assets associated with, anyPlan;     (m) the assets listed on *Schedule 2.2(m)*; and     (n) any other assets specified by Buyer upon notice to Sellers not less than one dayprior to Closing.     2.3 Assumption of Assumed Liabilities. At the Closing and on the terms and subject tothe conditions set forth in this Agreement, Buyer agrees to assume only the following Liabilitiesof Sellers (the “*Assumed Liabilities*”):     (a) all executory Liabilities arising or to be performed after the Closing under all(i) Acquired Contracts listed on *Schedule 3.13 or 3.14*as in existence on the date of thisAgreement as the same have been provided to Buyer or counsel to Buyer, but not including theExcluded Contracts, (ii) Acquired Contracts not required to be listed pursuant to Section3.14, as in existence on the date of this Agreement and entered into in the Ordinary Courseof Business prior to the date of this Agreement, (iii) Acquired Contracts described in (i)or (ii) to the extent the same are amended after the date of this Agreement in accordancewith this Agreement, (iv) Acquired Contracts entered into after the date of this Agreementin accordance with the provisions of this Agreement and (v) those Acquired Contracts enteredinto after the date of this Agreement not in accordance with the provisions of thisAgreement that Buyer expressly agrees to assume, in each case other than any Liabilityarising out of or relating to a breach that occurred prior to the Closing; and     (b) all of Sellers’ accounts payable for goods and services incurred in the OrdinaryCourse of Business that are either reflected on the Latest Balance Sheets or relating to theBusiness and incurred by a Seller, NCPS or NDVS in the Ordinary Course of Business betweenthe date of the Latest Balance Sheets and the Closing (other than accounts payable toInsiders or Affiliates of either Seller), and that remain unpaid at the Closing withouthaving given rise to a breach.     2.4 Retained Liabilities. The parties acknowledge that Buyer is not agreeing toassume any Liability of a Seller, NCPS or NDVS, whether related to the Acquired Assets, theBusiness or otherwise, other than the Assumed Liabilities, and that nothing in this Agreement,including this Section 2.4, will be construed as an agreement otherwise. Notwithstanding anythingto the contrary contained in Section 2.3 or elsewhere in this Agreement, the following Liabilitiesof each Seller (the “*Retained Liabilities*”) are not part of the sale and purchase contemplated bythis Agreement, are excluded from the Assumed Liabilities and will be retained by such Seller andremain the sole responsibility of such Seller following the Closing:     (a) any Liability arising out of or relating to the Excluded Assets;     (b) any Liability not reflected on the Final Closing Date Balance Sheet arising out ofor relating to the operations of the Business prior to the Closing and to products orservices of Seller, NCPS or NDVS to the extent sold or rendered prior to the Closing;
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     (c) any Liability under any Contract assumed by Buyer pursuant to Section 2.3 thatarises prior to the Closing or arises after the Closing but that arises out of or relates toa Breach that occurred prior to the Closing;     (d) any Liability for Taxes, including (i) any Taxes arising as a result of theBusiness or ownership of the Acquired Assets prior to the Closing and (ii) any Taxes thatwill arise, as a Liability of Seller, NCPS or NDVS, as a result of the sale of the AcquiredAssets pursuant to this Agreement;     (e) any Liability listed on *Schedule 2.4(e)*;     (f) any Liability arising under any Environmental Law in connection with the operationof the Business prior to the Closing or leasing, ownership or operation of real property bySeller, NCPS or NDVS;     (g) any Liability under any Plan;     (h) any Liability arising out of or relating to the disposition of an application foremployment, the employment of any employee or the termination of the employment of anyemployee by Seller, NCPS or NDVS, whether or not the affected employee is hired by Buyer;     (i) any Liability of Seller, NCPS or NDVS to any Insider or Affiliate;     (j) any Liability to distribute to any of Seller’s shareholders or otherwise apply allor any part of the consideration received by Seller under this Agreement;     (k) any Liability to indemnify, reimburse or advance amounts to any officer, director,employee or agent of Seller, NCPS or NDVS;     (l) any Liability arising out of any Litigation (i) pending as of the Closing or (ii)commenced after the Closing and arising out of or relating to any occurrence, happening orsituation existing prior to the Closing, including the Litigation listed on Section 3.15 ofthe Disclosure Schedule;     (m) any Liability arising out of or resulting from the compliance or non-compliancewith any Law, Governmental Authorization or Governmental Order by Seller, NCPS or NDVS;     (n) any Liability of Seller under this Agreement, the Transition Services Agreement orany other Contract between Seller, NCPS or NDVS and Buyer;     (o) a payment obligation for goods or services provided to Seller, NCPS or NDVS beforethe Closing Date (except to the extent assumed pursuant to Section 2.3(b));     (p) except as expressly provided in Section 2.3, any obligation under any Contractrequired to be disclosed in the Disclosure Schedule that is not so disclosed;
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     (q) any Liability based upon Seller’s acts or omissions occurring after the Closing;     (r) any obligations to hire any Person as an employee, but not including Buyer’sobligations arising from any employment offer made by Buyer to any employee of a Seller,NCPS or NDVS; and     (s) any other contingent Liability not expressly assumed by Buyer.     2.5 Purchase Price. The aggregate consideration for the Acquired Assets (the“*Purchase Price*”) shall not exceed $20,000,000 plus the amount, if any, by which the Final ClosingDate Working Capital (as defined in Section 2.9(a)) exceeds zero (the “*Target Working Capital*”) orreduced by the amount, if any, by which the Final Closing Date Working Capital is less than theTarget Working Capital.     2.6 Estimated Purchase Price. At least five business days prior to the Closing Date,Sellers shall deliver to Buyer an estimated consolidated balance sheet (the “*Estimated ClosingBalance Sheet*”) for the Business as of the close of business on the Closing Date (determined on apro forma basis as though the transactions contemplated by this Agreement had not occurred and inaccordance with GAAP applied on a basis consistent with the preparation of the Latest FinancialStatements. The Estimated Closing Balance Sheet will include a determination of the EstimatedClosing Date Working Capital as of the close of business on the Closing Date. The “*EstimatedClosing Date Working Capital*” means the amount equal to (A) the current assets minus (B) thecurrent liabilities as reflected on the Estimated Closing Balance Sheet. If Buyer objects to theEstimated Closing Balance Sheet, then the Estimated Closing Date Working Capital at the Closingshall be an amount that Buyer reasonably deems appropriate after consultation with Seller and setsforth in a written notice delivered to Seller prior to the Closing Date. “*Estimated PurchasePrice*” means an amount equal to $20,000,000 plus the amount, if any, by which the Estimated ClosingDate Working Capital exceeds the Target Working Capital or minus the amount, if any, by which theTarget Working Capital exceeds the Estimated Closing Date Working Capital. For further clarity, itis contemplated by the parties that the Estimated Closing Date Working Capital will be calculatedin a manner consistent with the example set forth on *Schedule 2.6*hereto (which uses the balancesheets of NCPS and NDVS as of December 31, 2004).     2.7 Retained Amounts.     (a) Buyer will withhold from the Purchase Price and retain $2,000,000 (the “*Retained Amount*”).Buyer will keep the Retained Amount in a segregated bank account and will maintain complete andaccurate records of the account and provide statements of the account upon therequest of Sellers’ Representative. Following the Closing, in the event that Buyer isentitled to a payment under Section 2.9 or Article IX or has a claim for indemnification againstSeller pursuant to Article IX, Buyer may deduct the amount of such claim or payment from theRetained Amount. On the first Business Day following the second anniversary of the Closing Date,but in no event before the final determination of any adjustment to the Purchase Price or anyset-offs or claims by Buyer, Buyer shall deliver any remaining portion of the Retained Amount,together with simple interest at the rate of 2% per annum, to Sellers’ Representative.
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     (b) Contract Retained Amount.     (i) Buyer will withhold from the Purchase Price and retain an additional $2,500,000(the “*Contract Retained Amount*”). Buyer will keep the Contract Retained Amount in asegregated bank account and will maintain complete and accurate records of the account andprovide statements of the account upon the request of Sellers’ Representative.     (ii) Recognizing that both Buyer and Sellers provide new account verification servicesto Bank of America, N.A. (“*B of A*”) and that the intent of the Contract Retained Amount isto compensate Sellers to the extent that B of A account verification transaction volumes forthe Buyer after the Closing are the same as Sellers experienced in an equivalent periodbefore Closing, the amount of the Contract Retained Amount to be paid by Buyer to Sellers(the “*Contract Retained Amount Payment*”) shall be determined by multiplying (A) the ContractRetained Amount by the lesser of (B) one and (C) a fraction (1) the numerator of which isequal to the sum of (i) the number of account verification transactions performed by Sellersfor B of A during the period from May 1, 2005 to the Closing Date plus (ii) thenumber of account verification transactions performed by Buyer for B of A at the B of Alocations (the “*B of A Locations*”) serviced by Seller prior to the Closing Date during theperiod beginning on the Closing Date and ending on April 30, 2006 and (2) the denominator ofwhich is equal to 1,296,204 (such amount being equal to the number of account verificationtransactions performed by both Sellers and Buyer in respect of the B of A Locations duringthe period beginning on May 1, 2004 and ending on April 30, 2005). Notwithstanding theforegoing, if there is a decline in B of A transaction volume greater than 30 percent overthe reference periods described above, the Contract Retained Amount will be retained byBuyer and will not be paid to Sellers. The amount to be distributed under this Section2.7(b) shall in no event exceed the Contract Retained Amount.     (iii) Within 30 days of each of July 31, 2005, October 31, 2005 and January 31, 2006,Buyer shall deliver to Sellers a list setting forth the number of those transactions that itbelieves qualify as account verification transactions in respect of the B of A Locationsthat will be included in calculating the Contract Retained Amount Payment.     (iv) As a material inducement to Buyer to enter into the Agreement, Sellers and Buyeragree that from and after the Closing Date, the Business shall be operated and managed incompliance with the ordinary and customary policies and procedures of Buyer. Sellersfurther understand and agree that the transactions contemplated by thisAgreement constitute a transfer of control to Buyer, and accordingly, Buyer and itsrepresentatives will exercise its and their business judgment regarding the operations ofthe Business or its successors in a manner consistent with its and their duties to theshareholders of Buyer. From and after the Closing Date, Buyer, consistent with its dutiesand obligations set forth in the preceding sentence, shall use commercially reasonableefforts to operate and manage the Business in such a manner as to provide a reasonableopportunity for the Business to maintain the level of transactions with Bank of America,N.A.
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     (v) On or before June 30, 2006, Buyer shall deliver a statement (the “*Statement*”) toSellers setting forth the amount of the Contract Retained Amount Payment payable to Sellers.Buyer will make the work papers and back-up materials used in preparing the Statementavailable to Sellers’ Representative and Sellers’ Representative’s accountants and otherrepresentatives at reasonable times and upon reasonable notice during (i) the review bySellers’ Representative of the Statement and (ii) the resolution by Buyer and Sellers’Representative of any objections to the Statement.     (vi) Sellers’ Representative may object to the Statement on the basis that the numberof transactions with Bank of America, N.A. was not calculated in accordance with the termsof this Agreement or that the calculation contains mathematical errors. If Sellers’Representative has any objections to the Statement, Sellers’ Representative will deliver adetailed statement describing such objections to Buyer within 30 days after receiving theStatement. Buyer and Sellers’ Representative will attempt in good faith to resolve any suchobjections. If Buyer and Sellers’ Representative do not reach a resolution of allobjections within 30 days after Buyer has received the statement of objections, Buyer andSellers’ Representative will retain BDO Seidman, LLP to resolve any remaining objections.If BDO Seidman, LLP is unavailable, Buyer and Sellers’ Representative will select anationally recognized accounting firm by lot (after excluding the regular outside accountingfirms of Parent and Sellers). The accounting firm (whether BDO Seidman, LLP or a substituteaccounting firm selected by lot) will resolve any such objections and determine on a proforma basis the number of account verification transactions to be included in thecalculation of the Contract Retained Amount Payment and the amount of the Contract RetainedAmount Payment. The parties will provide the accounting firm, within 30 days of itsselection, with a definitive statement of the position of each party with respect to eachunresolved objection and will advise the accounting firm that the parties accept theaccounting firm as the appropriate Person to interpret this Agreement for all purposesrelevant to the resolution of the unresolved objections. Buyer will provide the accountingfirm access to the books and records of NCPS and NDVS. The accounting firm will have 30days to carry out a review of the unresolved objections and prepare a written statement ofits determination regarding each unresolved objection. The determination of any accountingfirm so selected will be set forth in writing and will be conclusive and binding upon theparties.     (vii) If Buyer and Sellers’ Representative submit any unresolved objections to anaccounting firm for resolution as provided in Section 2.7(b)(vi), the party whosedetermination of the Contract Retained Amount Payment (calculated based on suchparty’s position regarding the Statement) is furthest from the Contract Retained AmountPayment determined by the accounting firm (based on its resolution of the parties’objections submitted for determination) will bear its own costs and expenses, the fees andexpenses of the accounting firm and the reasonable out-of-pocket costs and expenses(including legal fees and costs) of the other party.     (viii) Within 10 business days after the date on which the Contract Retained AmountPayment is finally determined pursuant to this Section 2.7(b), Buyer shall pay to Sellersthe Contract Retained Amount Payment, together with simple interest at the rate
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of 2% perannum, by wire transfer of immediately available funds to the account designated by Sellers’Representative.     (ix) Judgment upon the award rendered by the accounting firm may be entered in anycourt of competent jurisdiction.     2.8 The Closing.     (a) The closing of the transactions contemplated by this Agreement (the “*Closing*”) will takeplace at the offices of Dorsey & Whitney LLP, 50 South Sixth Street, Minneapolis, Minnesota at 9:00a.m. on Friday, May 6, 2005 or as soon thereafter as reasonably possible following satisfaction ofthe conditions set forth in Article VII (the “*Closing Date*”) or at such other place and on suchother date as may be mutually agreed by Buyer and Sellers’ Representative, in which case ClosingDate means the date so agreed. The failure of the Closing will not *ipso facto*result intermination of this Agreement and will not relieve any party of any obligation under thisAgreement.     (b) Subject to the conditions set forth in this Agreement, on the Closing Date:     (i) Sellers will deliver to Buyer:     (A) a certificate of each Seller dated the Closing Date stating that theconditions set forth in subsections (a) and (b) of Section 7.1 have been satisfied;     (B) the text of the resolutions adopted by the trustees of each Sellerauthorizing the execution, delivery and performance of this Agreement, certified byan appropriate officer of such Seller;     (C) a copy of the certificates of merger from the Secretary of State of theState of Massachusetts and such other documentation as shall reasonably be requestedby Buyer to confirm that the Mergers have been consummated in accordance withSection 5.4;     (D) a transition services agreement in the form of *Exhibit C*(the “*TransitionServices Agreement*”), duly executed by Sellers;     (E) all Required Consents, duly executed by all appropriate parties;     (F) a bill of sale for the Acquired Assets that are Tangible Personal Propertyin the form of *Exhibit D*, duly executed by each Seller;     (G) an assignment of the Acquired Assets that are intangible rights andproperty (including Contracts) in the form of *Exhibit E*, duly executed by eachSeller, which assignment shall also contain Buyer’s assumption of the AssumedLiabilities (the “*Assignment and Assumption Agreement*”);     (H) appropriate instruments of transfer for the Acquired Assets subject tocertificate of title, duly executed by each Seller;
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     (I) assignments and assumptions or other appropriate documents for the RealProperty and other Acquired Assets under leases accompanied by estoppel certificatesacceptable to Buyer, duly executed by each Seller and any other appropriate parties;     (J) funds sufficient to pay all Taxes necessary for the transfer, filing orrecording of the Acquired Assets or otherwise required by this Agreement;     (K) any other instruments of transfer reasonably requested by Buyer, dulyexecuted by the appropriate Seller;     (L) executed copies of all agreements, instruments, certificates and otherdocuments necessary or appropriate, in the reasonable opinion of Buyer’s counsel, torelease any and all Encumbrances against the assets of Seller, NCPS or NDVS, otherthan Permitted Encumbrances;     (M) an amendment to the Organizational Documents of each Seller changing itsname in accordance with Section 5.15;     (N) such other certificates, documents and instruments that Buyer reasonablyrequests for the purpose of (1) evidencing the accuracy of Sellers’ representationsand warranties, (2) evidencing the performance and compliance by each Seller withthe agreements contained in this Agreement, (3) evidencing the satisfaction of anycondition referred to in Section 7.1 or (4) otherwise facilitating the consummationof the transactions contemplated by this Agreement; and     (O) a written opinion from Sellers’ counsel, dated as of the Closing Date andaddressed to Buyer in the form set forth in *Exhibit F*.   All actions to be taken by each Seller in connection with the consummation of thetransactions contemplated by this Agreement and all certificates, opinions, instruments andother documents required to effect the transactions contemplated by this Agreement will bein form and substance satisfactory to Buyer and Buyer’s counsel in their reasonabledetermination.     (ii) Buyer will deliver to Sellers:     (A) the Estimated Purchase Price less (i) the Retained Amount and (ii) theContract Retained Amount by wire transfer of immediately available funds to theaccount designated by Sellers’ Representative to Buyer prior to the Closing;     (B) a certificate of an appropriate officer of Buyer dated the Closing Datestating that the conditions set forth in subsections (a) and (b) of Section 7.2 havebeen satisfied;
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     (C) the text of the resolutions adopted by the board of directors of Buyerauthorizing the execution, delivery and performance of this Agreement, certified byan appropriate officer of Buyer;     (D) the Assignment and Assumption Agreement, duly executed by Buyer;     (E) if not contained in the Assignment and Assumption Agreement, assumptions ofleases or other appropriate documents for Real Property, computer equipment andother Acquired Assets under leases, duly executed by Buyer;     (F) the Transition Services Agreement, duly executed by Buyer; and     (G) such other certificates, documents and instruments that Seller reasonablyrequests for the purpose of (1) evidencing the accuracy of Buyer’s representationsand warranties, (2) evidencing the performance and compliance by Buyer with theagreements contained in this Agreement, (3) evidencing the satisfaction of anycondition referred to in Section 7.2 or (4) otherwise facilitating the consummationof the transactions contemplated by this Agreement.     (c) All items delivered by the parties at the Closing will be deemed to have been deliveredsimultaneously, and no items will be deemed delivered or waived until all have been delivered.     (d) Notwithstanding any investigation made by or on behalf of any of the parties to thisAgreement or the results of any such investigation and notwithstanding the fact of, or theparticipation of such party in, the Closing, the representations, warranties and agreements in thisAgreement will survive the Closing.     (e) The Confidentiality Agreement will terminate effective as of the Closing Date.     (f) Any sales, use, transfer, vehicle transfer, stamp, conveyance, value added or othersimilar Tax that may be imposed by any Governmental Entity, and all recording or filing fees,notarial fees and other similar costs of Closing with respect to the purchase and sale of theAcquired Assets, or otherwise on account of this Agreement or the transactions contemplated by thisAgreement, will be paid by Seller and will not be part of the Assumed Liabilities or shown on theClosing Date Balance Sheet.     2.9 Post-Closing Adjustment to Purchase Price.     (a) Buyer will promptly prepare and deliver within 60 days after the Closing Date, to Sellers’Representative a balance sheet (the “*Final Closing Date Balance Sheet*”) for the Business as of theclose of business on the Closing Date (determined on a pro forma basis as though the transactionscontemplated by this Agreement had not occurred and in accordance with GAAP applied on a basisconsistent with the preparation of the Latest Financial Statements). The Final Closing DateBalance Sheet will include a determination of the Closing Date Working Capital of the Business asof the close of business on the Closing Date. “*Closing Date Working Capital*” means the excess ofthe current assets over current liabilities shown on the Final Closing Date Balance Sheet. Buyerwill make the work papers and back-up materials
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used in preparing the Final Closing Date BalanceSheet available to Sellers’ Representative and Sellers’ Representative’s accountants and otherrepresentatives at reasonable times and upon reasonable notice during (i) the review by Sellers’Representative of the Final Closing Date Balance Sheet and (ii) the resolution by Buyer andSellers’ Representative of any objections to the Final Closing Date Balance Sheet.     (b) Sellers’ Representative may object to the Final Closing Date Balance Sheet on the basisthat it was not prepared in accordance with GAAP applied on a basis consistent with the preparationof the Latest Financial Statements or that the calculation of Closing Date Working Capital containsmathematical errors. If Sellers’ Representative has any objections to the Final Closing DateBalance Sheet or the Closing Date Working Capital, Sellers’ Representative will deliver a detailedstatement describing such objections to Buyer within 30 days after receiving the Final Closing DateBalance Sheet. Buyer and Sellers’ Representative will attempt in good faith to resolve any suchobjections. If Buyer and Sellers’ Representative do not reach a resolution of all objectionswithin 30 days after Buyer has received the statement of objections, Buyer and Sellers’Representative will retain BDO Seidman, LLP to resolve any remaining objections. If BDO Seidman,LLP is unavailable, Buyer and Sellers’ Representative will select a nationally recognizedaccounting firm by lot (after excluding the regular outside accounting firms of Parent andSellers). The accounting firm (whether BDO Seidman, LLP or a substitute accounting firm selectedby lot) will resolve any such objections and determine on a pro forma basis as though thetransactions contemplated by this Agreement had not occurred and, in accordance with GAAP appliedon a basis consistent with the preparation of the Latest Financial Statements, the amounts to beincluded in the Final Closing Date Balance Sheet and the Closing Date Working Capital. The partieswill provide the accounting firm, within 30 days of its selection, with a definitive statement ofthe position of each party with respect to each unresolved objection and will advise the accountingfirm that the parties accept the accounting firm as the appropriate Person to interpret thisAgreement for all purposes relevant to the resolution of the unresolved objections. Buyer willprovide the accounting firm access to the books and records of NCPS and NDVS. The accounting firmwill have 30 days to carry out a review of the unresolved objections and prepare a writtenstatement of its determination regarding each unresolved objection. The determination of anyaccounting firm so selected will be set forth in writing and will be conclusive and binding uponthe parties. Buyer will revise the Final Closing Date Balance Sheet and the determination of theClosing Date Working Capital asappropriate to reflect the resolution of any objections to the Final Closing Date BalanceSheet pursuant to this Section 2.9(b).     (c) If Buyer and Sellers’ Representative submit any unresolved objections to an accountingfirm for resolution as provided in Section 2.9(b), the party whose determination of Closing DateWorking Capital (calculated based on such party’s position regarding the Closing Date BalanceSheet) is furthest from the Closing Date Working Capital determined by the accounting firm (basedon its resolution of the parties’ objections submitted for determination) will bear its own costsand expenses, the fees and expenses of the accounting firm and the reasonable out-of-pocket costsand expenses (including legal fees and costs) of the other party.
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     (d) Within 10 business days after the date on which the Closing Date Working Capital isfinally determined pursuant to this Section 2.9:     (i) If the Closing Date Working Capital exceeds the Estimated Closing Date WorkingCapital (the amount of such excess, the “*Excess Working Capital*”), (A) Buyer will pay toSellers an aggregate amount equal to the Excess Working Capital.     (ii) If the Closing Date Working Capital is less than the Estimated Closing DateWorking Capital, an amount equal to such deficiency (the amount of such deficiency, the“*Working Capital Shortfall*”) will be deducted from the Total Retained Amount.     (e) All payments to be made to Buyer or Sellers pursuant to Section 2.9(b) will be made bywire transfer of immediately available funds to the accounts designated by Buyer or Sellers, asapplicable, no later than 10 business days after the date on which the Closing Date Working Capitalis finally determined, and all such payments (and any deductions from the Total Retained Amount)will include simple interest thereon at the annual rate of 2% from the Closing Date to the date ofpayment or deduction.     (f) Any payment made pursuant to this Section 2.9 will not preclude any remedy provided inthis Agreement or otherwise for any breach of representation, warranty or agreement, and the remedyprovided in this Agreement for any breach of representation, warranty or agreement or otherwisewill not preclude the adjustment provided in this Section 2.9.     (g) Judgment upon the award rendered by the accounting firm may be entered in any court ofcompetent jurisdiction.     2.10 Unobtained Consents. In the event that any Required Consent has not beenobtained as of the Closing and Buyer, in its sole discretion, chooses to waive the closingcondition as to the obtaining of such Required Consents, then, notwithstanding anything to thecontrary contained in Section 2.1, Section 2.3 or elsewhere in this Agreement:     (a) with respect to any Contract, Governmental Authorization or other item included inthe Acquired Assets with respect to which such Required Consent was not obtained (each a“*Restricted Asset*”), Buyer may elect either (i) to exclude such RestrictedAsset from the Acquired Assets, in which event, unless and until the applicableRequired Consent is obtained after the Closing, neither this Agreement nor any instrumentdelivered at the Closing will constitute an assignment or transfer of such Restricted Assetor any interest arising thereunder or resulting therefrom or (ii) to accept the assignmentor transfer of such Restricted Asset notwithstanding the failure to obtain the applicableRequired Consent;     (b) regardless of which election Buyer makes pursuant to Section 2.10(a), Seller willcontinue to use its best efforts to obtain all such Required Consents after the Closing;     (c) with respect to any Restricted Asset that Buyer has elected to exclude from theAcquired Assets pursuant to Section 2.10(a)(i), if the applicable Required Consent isobtained following the Closing Date, such Restricted Asset shall immediately be deemed
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to beincluded in the Acquired Assets, and an appropriate instrument of transfer substantially inthe form that would have been used to convey such Restricted Asset pursuant to Section2.8(b) had such Restricted Asset been acquired by Buyer at the Closing will be promptlyexecuted and delivered by and to the appropriate Persons; and     (d) with respect to any Restricted Asset that Buyer has elected to have transferred andassigned pursuant to Section 2.10(a)(ii), if the applicable Required Consent is subsequentlyobtained, any instrument delivered at the Closing will constitute an assignment or transferof such Restricted Asset and all interests arising thereunder or resulting therefrom intheir entirety.     2.11 Sellers’ Representative.     (a) Each Seller and Family Shareholder appoints Robert J. Zammito, Jr. (or any Personappointed as a successor Sellers’ Representative pursuant to Section 2.11(b)) as its representativeand agent under this Agreement.     (b) Until all obligations under this Agreement have been discharged (including allindemnification obligations under Article IX), Sellers may, from time to time upon written noticeto Sellers’ Representative and Buyer, remove Sellers’ Representative or appoint a new Sellers’Representative upon the death, incapacity, resignation or removal of Sellers’ Representative. If,after the death, incapacity, resignation or removal of Sellers’ Representative, a successorSellers’ Representative has not been appointed by Sellers within 15 business days after a requestby Buyer, Buyer will have the right to appoint a Sellers’ Representative to fill any vacancy socreated by written notice of such appointment to Sellers.     (c) Each Seller and Family Shareholder authorizes Sellers’ Representative to take any actionand to make and deliver any certificate, notice, consent or instrument required or permitted to bemade or delivered under this Agreement or under the documents referred to in this Agreement, towaive any requirements of this Agreement or to enter into one or more amendments or supplements tothis Agreement that Sellers’ Representative determines in Sellers’ Representative’s sole andabsolute discretion to be necessary, appropriate or advisable. The authority of Sellers’Representative includes the right to hire or retain, at the sole expense ofSellers, such counsel, investment bankers, accountants, representatives and other professionaladvisors as Sellers’ Representative determines in Sellers’ Representative’s sole and absolutediscretion to be necessary, appropriate or advisable in order to perform this Agreement. Any partywill have the right to rely upon any action taken by Sellers’ Representative, and to act inaccordance with such action without independent investigation.     (d) Buyer will have no liability to any Seller or Shareholder or otherwise arising out of theacts or omissions of Sellers’ Representative or any disputes among Sellers or with Sellers’Representative. Buyer may rely entirely on its dealings with, and notices to and from, Sellers’Representative to satisfy any obligations it might have under this Agreement or any other agreementreferred to in this Agreement or otherwise to a Seller.     (e) Each Seller and Family Shareholder covenants and agrees to indemnify, defend, protect andhold harmless Sellers’ Representative from and against all claims, damages, actions,
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suits,proceedings, demands, assessments, adjustments, costs and expenses (including specifically, butwithout limitations, reasonable attorneys’ fees and expenses of investigations) incurred bySellers’ Representative as a result of or incident to any indemnification claims brought by theBuyer, or any claim, loss, cost, damage or expenses suffered or incurred by the Sellers’Representative in the course of his status as such as contemplated herein.     (f) Sellers’ Representative accepts the appointment made by this Section 2.11 and agrees toabide by the provisions of this Section 2.11.     2.12 Further Assurances. On and after the Closing Date, each Seller will take allappropriate action and execute any documents, instruments or conveyances of any kind that may bereasonably requested by Buyer to carry out any of the provisions of this Agreement. Effective uponthe Closing, each Seller appoints Buyer, in its name, place and stead, to take all actions and todo such things as may be necessary or appropriate to carry out any of the provisions of thisAgreement.**III. Representations and Warranties Regarding Sellers, NCPS and NDVS**     Each Seller and Family Shareholder, jointly and severally, represents and warrants to Buyerthat, except as described in the Disclosure Schedule, as of the date of this Agreement and as ofthe Closing Date (as though made then and as though the Closing Date were substituted for the dateof this Agreement):     3.1 Incorporation; Power and Authority.     (a) Each Seller (i) is a business trust duly organized, validly existing and in good standingunder the laws of the State of Massachusetts; (ii) has all necessary power and authority toexecute, deliver and perform this Agreement and the Transition Services Agreement; and (iii) is infull compliance with all provisions of its Organizational Documents.     (b) Each of NCPS and NDVS is a corporation duly organized, validly existing and in goodstanding under the laws of the State of Massachusetts, and has all necessary power and authoritynecessary to own, lease and operate its assets and to carry on its business as conducted andproposed to be conducted. Each of NCPS and NDVS is duly qualified to do business as a foreigncorporation in each jurisdiction in which the nature of its business or its ownership of propertyrequires it to be so qualified except where failure could not reasonably be expected to result in aMaterial Adverse Effect. Each of NCPS and NDVS is in full compliance with all provisions of itsOrganizational Documents.     3.2 Valid and Binding Agreement. The execution, delivery and performance of this Agreementand the Transition Services Agreement by each Seller have been duly and validly authorized by allnecessary action of that Seller’s trustees or shareholders. This Agreement has been duly executedand delivered by each Seller and constitutes the valid and binding obligation of that Seller,enforceable against it in accordance with its terms, subject to the Remedies Exception. TheTransition Services Agreement, when executed and delivered by or on behalf of each Seller, willconstitute the valid and binding obligation of that Seller, enforceable against that Seller inaccordance with its terms, subject to the Remedies Exception. Each Seller’s trustees havedetermined this Agreement and the transactions contemplated by this Agreement to
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be advisable and fair to and in the best interest of that Seller and the holders of beneficial interests in thatSeller and have approved this Agreement in accordance with its Organizational Documents andapplicable Law, and no such declaration or approval has been changed, withdrawn or revoked.     3.3 No Breach; Consents. The execution, delivery and performance of this Agreementand the Transition Services Agreement will not (a) contravene any provision of its OrganizationalDocuments; (b) violate or conflict with any Law, Governmental Order or Governmental Authorization;(c) conflict with, result in any breach of any of the provisions of, constitute a default (or anyevent that would, with the passage of time or the giving of notice or both, constitute a default)under, result in a violation of, increase the burdens under, result in the termination, amendment,suspension, modification, abandonment or acceleration of payment (or any right to terminate) orrequire a Consent under any Contract that is either binding upon or enforceable against a Seller,NCPS or NDVS or any Governmental Authorization that is held by any of them; (d) result in thecreation of any Encumbrance upon the Business, a Seller, NCPS or NDVS or any of their respectiveassets; (e) require any Governmental Authorization; (f) to Sellers’ Knowledge, give anyGovernmental Entity or other Person the right to challenge any of the contemplated transactionsor to exercise any remedy or obtain any relief under any Law, Governmental Order orGovernmental Authorization; or (g) result in any shareholder of a Seller, NCPS or NDVS having theright to exercise dissenters’ appraisal rights.     3.4 Capitalization.     (a) The entire beneficial interest in NCPS Business Trust is represented by 1,000 shares ofbeneficial interest, which are evidenced by transferable share certificates without par value andknown as “*Shares of Beneficial Interest*,” all of which are issued and outstanding. NCPS BusinessTrust has no securities outstanding that would be entitled to vote on the approval of transactionscontemplated by this Agreement. *Schedule 3.**4(a)* lists the names and addresses of each recordholder of the Shares of Beneficial Interest in NCPS Business Trust and the number of shares held byeach holder.     (b) The entire beneficial interest in NDVS Business Trust is represented by 1,000 shares ofbeneficial interest, which are evidenced by transferable share certificates without par value andknown as “*Shares of Beneficial Interest*,” all of which are issued and outstanding. NDVS BusinessTrust has no securities outstanding that would be entitled to vote on the approval of transactionscontemplated by this Agreement. *Schedule 3.**4(b)* lists the names and addresses of each recordholder of the Shares of Beneficial Interest in NDVS Business Trust and the number of shares held byeach holder.     (c) The authorized capital stock of NCPS consists solely of 200,000 shares of common stock, ofwhich 100 shares are issued and outstanding, all of which are held by NCPS Business Trust. NCPShas no other securities outstanding that would be entitled to vote on the approval of transactionscontemplated by this Agreement.     (d) The authorized capital stock of NDVS consists solely of 200,000 shares of common stock, ofwhich 100 shares are issued and outstanding, all of which are held by NDVS Business
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Trust. NDVShas no other securities outstanding that would be entitled to vote on the approval of transactionscontemplated by this Agreement.     3.5 Subsidiaries. NCPS is the only Subsidiary of NCPS Business Trust. NDVS is theonly Subsidiary of NDVS Business Trust. Neither NCPS nor NDVS has any Subsidiary.     3.6 Financial Statements.     (a) The unaudited balance sheets as of January 31, 2005 (“*Latest Balance Sheet Date*”) of NCPSand NDVS (the “*Latest Balance Sheets*”) and the unaudited statements of income and cash flows ofNCPS and NDVS for the one-month period then ended (such statements and the Latest Balance Sheets,the “*Latest Financial Statements*”) and the audited balance sheet, as of December 31, 2004 (the“*Last Fiscal Year End*”) and for each of the prior fiscal year ends, ofNCPS and NDVS and the audited statements of income and cash flows, including the notes, ofNCPS and NDVS for each of the three years ended on the Last Fiscal Year End (collectively, the“*Annual Financial Statements*”) are based upon the books and records of NCPS and NDVS, have beenprepared in accordance with GAAP consistently applied during the periods indicated and presentfairly the financial position, results of operations and cash flows of NCPS and NDVS at therespective dates and for the respective periods indicated, except that the Latest FinancialStatements may not contain all notes and are subject to normal year-end adjustments, none of whichwill be material.     (b) The Latest Balance Sheets do not include any material asset or liability which is notintended to form part of the Business, the Acquired Assets or Assumed Liabilities after givingeffect to the transactions contemplated hereby. The statements of income and cash flow included inthe Latest Financial Statements do not reflect the operations of any entity or business notintended to constitute the Business after giving effect to the transactions contemplated hereby andreflect all costs that historically have been incurred by the Business.     (c) Without giving effect to the Mergers, Sellers have no assets other than the shares of NCPSand NDVS, any cash in their respective bank accounts and this Agreement, and Sellers have noLiabilities other than their respective obligations under this Agreement.     3.7 Absence of Undisclosed Liabilities. Except as reflected or expressly reservedagainst in the Latest Balance Sheets, none of Sellers, NCPS or NDVS has any Liability relating tothe Business, and to Sellers’ Knowledge, there is no basis for any present or future Litigation,charge, complaint, claim, assessment or demand against any of them giving rise to any Liability,except (a) a Liability that has been incurred after the date of the Latest Balance Sheets in theOrdinary Course of Business and that is not a Liability for breach of Contract, breach of warranty,tort, infringement, Litigation or violation of Governmental Order, Governmental Authorization orLaw or (b) obligations under any Contract listed on a schedule to this Agreement or under aContract not required to be listed on such a schedule, which, in the case of both (a) and (b),individually or in the aggregate, are not material to the financial condition of the Business.     3.8 Books and Records. The books of account of the Business are complete and correctand have been maintained in accordance with sound business practices and the Law. Each
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transaction is properly and accurately recorded on the books and records of the Business, and each documentupon which entries in the books and records of the Business are based is complete and accurate inall material respects. Sellers, NCPS and NDVS each maintain a system of internal accountingcontrols adequate to insure that it maintains no off-the-book accounts and that its assets are usedonly in accordance with its management directives. The minute books and stock or equity records ofSellers, NCPS and NDVS, all of which have been made available to Buyer, are complete and correct.The minute books of Sellers, NCPS and NDVS contain accurate records of all meetings held andactions taken by the holders of stock or equity interests, the boards of directors and committeesof the boards of directors or other governing body of Sellers, NCPS and NDVS during the last threeyears, and, to Sellers’ Knowledge, no meeting of any suchholders, boards of directors or other governing body or committees has been held for whichminutes are not contained in such minute books. At the Closing, all books and records of theBusiness will be in the possession of Sellers, NCPS and NDVS and, with the exception of books andrecords that are Excluded Assets, will be delivered to Buyer.     3.9 Absence of Certain Developments. Since the Last Fiscal Year End, there has notbeen any Material Adverse Effect and:     (a) neither of Sellers nor NCPS or NDVS has sold, leased, licensed, transferred orassigned any of their assets, tangible or intangible (including their Intellectual PropertyRights), other than for a fair consideration in the Ordinary Course of Business;     (b) neither of Sellers nor NCPS or NDVS has amended, modified or entered into anyMaterial Contract except for Contracts with vendors or customers in the Ordinary Course ofBusiness;     (c) no party (including Sellers, NCPS and NDVS) has accelerated, suspended, terminated,modified or canceled any Contract to which a Seller, NCPS or NDVS is a party or by which anyof them is bound that would have been a Material Contract at the time of any such action;     (d) no Encumbrance has been imposed on any assets of the Business except PermittedEncumbrances;     (e) neither of Sellers nor NCPS or NDVS has made any capital expenditure (or series ofrelated capital expenditures) either involving more than $25,000 or outside the OrdinaryCourse of Business;     (f) neither of Sellers nor NCPS or NDVS has any capital investment in, any loan to, orany acquisition of the securities or assets of, any other Person or acquired (by merger,exchange, consolidation, acquisition of stock or assets or otherwise) any Person, except ascontemplated by Section 5.4;     (g) neither of Sellers nor NCPS or NDVS has issued any note, bond or other debtsecurity or created, incurred, assumed or guaranteed any indebtedness for borrowed money(including advances on existing credit facilities) or Capital Lease;
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     (h) neither of Sellers nor NCPS or NDVS has delayed, postponed or accelerated thepayment of accounts payable or other Liability or the receipt of any accounts receivable, ineach case outside the Ordinary Course of Business;     (i) neither of Sellers nor NCPS or NDVS has canceled, compromised, waived or releasedany right or claim (or series of related rights or claims) outside the Ordinary Course ofBusiness;     (j) except incidental to the sale of products or services in the Ordinary Course ofBusiness, neither of Sellers nor NCPS or NDVS has granted any license or sublicense of anyrights under or with respect to any Intellectual Property Rights;     (k) there has been no change made or authorized in the Organizational Documents of aSeller, NCPS or NDVS except for purposes of completing the Mergers;     (l) neither of Sellers nor NCPS or NDVS has experienced any damage, destruction or loss(whether or not covered by insurance) to its property involving an amount greater than$25,000;     (m) neither of Sellers nor NCPS or NDVS has entered into any employment or collectivebargaining agreement, written or oral, or modified the terms of any such existing agreement;     (n) neither of Sellers nor NCPS or NDVS has granted any increase in the basecompensation or made any other change in employment terms of any of its directors, officersor employees outside of the Ordinary Course of Business;     (o) neither of Sellers nor NCPS or NDVS has adopted, amended, modified or terminatedany Plan (or taken any such action with respect to any Plan);     (p) neither of Sellers nor NCPS or NDVS has discharged or satisfied any Encumbrance orpaid any liability other than current liabilities paid in the Ordinary Course of Business;     (q) neither of Sellers nor NCPS or NDVS has disclosed to any Person other than Buyerand authorized representatives of Buyer any proprietary confidential information, other thanpursuant to a confidentiality agreement prohibiting the use or further disclosure of suchinformation, which agreement is listed on *Schedule 3.9*and is in full force and effect;     (r) neither of Sellers nor NCPS or NDVS has made any change in accounting principles orpractices from those utilized in the preparation of the Annual Financial Statements;     (s) neither of Sellers nor NCPS or NDVS has (i) made or rescinded any express or deemedelection or taken any other discretionary position relating to Taxes, (ii) amended anyReturn, (iii) settled or compromised any Litigation relating to Taxes or (iv) changed any oftheir methods of reporting income or deductions for federal or state
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income Tax purposesfrom those employed in the preparation of the last filed federal or state Returns;     (t) neither of Sellers nor NCPS or NDVS has changed any of its methods of accounting ineffect on the Latest Balance Sheet Date, other than changes required by GAAP;     (u) neither of Sellers nor NCPS or NDVS has cancelled or terminated their currentinsurance policies or allowed any of the coverage thereunder to lapse, unless simultaneouslywith such termination, cancellation or lapse replacement policies providing coverage equalto or greater than the coverage under the canceled, terminated or lapsed policies forsubstantially similar premiums were in full force and effect; and     (v) neither of Sellers nor NCPS or NDVS has committed to take any of the actionsdescribed in this Section 3.9.     3.10 Property.     (a) Neither of Sellers nor NCPS or NDVS owns any real property. The real properties demised bythe leases listed on *Schedule 3.10*constitute all of the real property leased (whether or notoccupied and including any leases assigned or leased premises sublet for which a Seller, NCPS orNDVS remains liable), used or occupied by the Business.     (b) The leases of real property listed on *Schedule 3.10*as being leased by each Seller, NCPSor NDVS (the “*Real Property*”) are in full force and effect, and a Seller, NCPS or NDVS holds avalid and existing leasehold interest under each of the leases for the term listed on *Schedule3.10*. Except as provided in the lease documentation and to Sellers’ Knowledge, the Real Propertyis not subject to any ground lease, master lease, mortgage, deed of trust or other Encumbrance orinterests that would entitle the holder thereof to interfere with or disturb use or enjoyment ofthe Real Property or the exercise by the lessee of its rights under such lease so long as thelessee is not in default under such lease.     (c) Each parcel of Real Property has access sufficient for the conduct of the business asconducted or as proposed to be conducted by the Business on such parcel of Real Property to publicroads and to all utilities, including electricity, sanitary and storm sewer, potable water, naturalgas, telephone, fiberoptic, cable television and other utilities used in the operation of thebusiness at that location. Neither of Sellers nor NCPS or NDVS is, to Sellers’ Knowledge, inviolation of any applicable zoning ordinance or other Law relating to the Real Property, andneither of Sellers nor NCPS or NDVS has received any notice of any such violation or the existenceof any condemnation or other proceeding with respect to any of the Real Property.     (d) There are no improvements made or, to Sellers’ Knowledge, contemplated to be made by anyGovernmental Entity, the costs of which are to be assessed as assessments, special assessments,special Taxes or charges against any of the Real Property, and there are no present assessments,special assessments, special Taxes or charges.     (e) Each of Sellers, NCPS and NDVS has good and marketable title to, or a valid leaseholdinterest in, the buildings, machinery, equipment and other tangible assets and
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properties used by it, located on its premises or shown in the Latest Balance Sheets or acquired after the datethereof, free and clear of all Encumbrances, except for Permitted Encumbrances, Encumbrances listedon *Schedule 3.10*and properties and assets disposed of in the Ordinary Course of Business since thedate of the Latest Balance Sheets.     (f) The buildings, improvements, building systems, machinery, equipment and other tangibleassets and properties used in the conduct of the Business are in good condition and repair,ordinary wear and tear excepted, and are usable in the Ordinary Course of Business. Each suchasset is suitable for the purposes for which it is used and is proposed to be used, is free fromdefects (patent and latent), and has been maintained in accordance with normal industry practices.     (g) The fixed asset listing attached as *Schedule 3.**10(g)* includes all buildings, machinery,equipment and other tangible assets and properties of Sellers, NCPS and NDVS as of the date of theLatest Balance Sheets.     (h) Each of Sellers, NCPS and NDVS owns or leases all of the assets, tangible and intangible,of any nature whatsoever, necessary to operate the Business as presently conducted.     (i) The Acquired Assets constitute all of the assets, tangible and intangible, of any naturewhatsoever, necessary to operate the Business in the matter operated by Sellers, NCPS and NDVS andinclude all of the operating assets of Sellers, NCPS and NDVS used in the Business.     3.11 Accounts Receivable. All notes and accounts receivable of the Business arereflected properly on its books of account, are valid, have arisen from bona fide transactions inthe Ordinary Course of Business, are subject to no setoff or counterclaim, and are current andcollectible. Such notes and accounts receivable will be collected in accordance with their terms(none of which is beyond 60 days) at their recorded amounts, subject only to the reserve for baddebts on the face of the Latest Balance Sheets as adjusted in the books of account of the Businessfor the passage of time through the Closing Date in the Ordinary Course of Business.     3.12 Tax Matters.     (a) Each Seller, NCPS, NDVS and any Tax Affiliate has (i) timely filed (or has had timelyfiled on its behalf) each Return required to be filed or sent by it in respect of any Taxes orrequired to be filed or sent by it by any Governmental Entity, each of which was correctlycompleted and accurately reflected any liability for Taxes of such Seller, NCPS, NDVS and any TaxAffiliate covered by such Return, (ii) timely and properly paid (or had paid on its behalf) allTaxes due and payable for all Tax periods or portions thereof whether or not shown on such Returns,(iii) established in the books of account of such Seller, NCPS or NDVS, in accordance with GAAP andconsistent with past practices, adequate reserves for the payment of any Taxes not then due andpayable and (iv) complied with all applicable Laws relating to the withholding of Taxes and thepayment thereof.     (b) There are no Encumbrances for Taxes upon any assets of a Seller, NCPS, NDVS or any TaxAffiliate, except Encumbrances for real estate Taxes not yet due.
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     (c) No deficiency for any Taxes has been proposed, asserted or assessed against a Seller,NCPS, NDVS or any Tax Affiliate that has not been resolved and paid in full. No waiver,extension or comparable consent given by a Seller, NCPS, NDVS or any Tax Affiliate regardingthe application of the statute of limitations with respect to any Taxes or any Return isoutstanding, nor is any request for any such waiver or consent pending. There has been no Taxaudit or other administrative proceeding or court proceeding with regard to any Taxes or any Returnfor any Tax year subsequent to the year ended 1997, nor is any such Tax audit or other proceedingpending, nor has there been any notice to a Seller, NCPS, NDVS or any Tax Affiliate by anyGovernmental Entity regarding any such Tax, audit or other proceeding, or, to Sellers’ Knowledge,is any such Tax audit or other proceeding threatened with regard to any Taxes or Returns.     (d) Neither Seller, NCPS, NDVS nor any Tax Affiliate has any liability for Taxes in ajurisdiction where it does not file a Return, nor has a Seller, NCPS, NDVS or any Tax Affiliatereceived notice from a taxing authority in such a jurisdiction that it is or may be subject totaxation by that jurisdiction.     (e) None of the Assumed Liabilities is an obligation to make any payment that would be treatedas an “excess parachute payment” within the meaning of Section 280G of the Code.     (f) Neither of Sellers nor NCPS or NDVS has been a member of an affiliated combined or unitarygroup for purposes of Taxes and has no liability for the Taxes of any Person under TreasuryRegulations Section 1.1502-6 (or any similar provision of Law), as a transferee or successor, byContract or otherwise.     (g) Neither Seller, NCPS, NDVS nor any Tax Affiliate has engaged in any transaction that issubject to disclosure under present or former Treasury Regulations Sections 1.6011-4 or 1.6011-4T,as applicable.     (h) Each of NCPS and NDVS has validly elected to be a “qualified subchapter S subsidiary”under Section 1361(b)(3)(B) of the Code (a “*QSub*”) for all periods since January 1, 2001, and hasmaintained its status as a QSub at all times since such date. NCPS or NDVS has also validlyelected to be a QSub in all state and local jurisdictions which recognize such status and in whichit would, absent such an election, be subject to corporate income Tax, and has maintained itsstatus as a QSub in each such jurisdiction at all times since the date of such election. No factsor circumstances exist, or have existed, which would cause, or would have caused, the status ofNCPS or NDVS as a QSub under federal, state or local law to be subject to termination orrevocation.     (i) Each Seller has validly elected to be an “S corporation” within the meaning of Sections1361 and 1362 of the Code for all periods since its inception, and has maintained its status as an“S corporation” at all times since such date. Each Seller has also validly elected to be an “Scorporation” in all state and local jurisdictions which recognize such status with respect to suchSeller and in which it would, absent such an election, be subject to corporate income Tax, and hasmaintained its status as an “S corporation” in each such jurisdiction at all times since the dateof such election. No facts or circumstances exist, or have existed, which would cause, or
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would have caused, the status of a Seller as an “S corporation” under federal, state or local law to besubject to termination or revocation.     (j) Sellers, NCPS and NDVS have paid all Taxes associated with their employment of personnel,whether classified as employees or contractors.     (k) Sellers, NCPS and NDVS do not expect or anticipate the assessment of any additional Taxeson a Seller, NCPS, NDVS or any Tax Affiliate and are not aware of any unresolved questions, claimsor disputes concerning the liability for Taxes of a Seller, NCPS, NDVS or any Tax Affiliate thatwould exceed the estimated reserves established on its books and records. There is no dispute orclaim concerning any Tax liability of a Seller, NCPS, NDVS or any Tax Affiliate. Each Seller,NCPS, NDVS and each Tax Affiliate has disclosed on each federal income Tax Return all positionstaken therein that could give rise to a substantial understatement of federal income Tax within themeaning of Section 6662 of the Code.     3.13 Intellectual Property Rights.     (a) *Schedule 3.**13(a)(i)* lists and describes all Owned Intellectual Property Rights that areRegistered Intellectual Property Rights and all other Owned Intellectual Property Rights. *Schedule3.**13(a)(ii)* lists all Contracts relating to Licensed-In Intellectual Property Rights other thanSoftware and describes the Intellectual Property Rights covered by such Contracts; to the extentthere is no written Contract covering a Licensed-In Intellectual Property Right, *Schedule3.**13(a)(ii)* lists the licensor and describes the Intellectual Property Rights so licensed.*Schedule 3.**13(a)(iii)* lists all Contracts relating to Licensed-In Intellectual Property Rights thatare Software other than Off-the-Shelf Software and describes the Intellectual Property Rightscovered thereby; to the extent there is no written Contract covering any Software, *Schedule3.**13(a)(iii)* lists the licensor and describes the Software so licensed. *Schedule 3.**13(a)(iv)* listsand describes all materials otherwise protectable under Intellectual Property Rights used in theBusiness as conducted or proposed to be conducted that are in the public domain. The OwnedIntellectual Property Rights and the Licensed-In Intellectual Property Rights constitute allIntellectual Property Rights necessary for the Business as conducted.     (b) Either Seller, NCPS or NDVS owns all right, title and interest in the Owned IntellectualProperty Rights free and clear of all Encumbrances (including royalty or other payments), exceptfor those licenses of the Owned Intellectual Property Rights to Persons, payments for use of theOwned Intellectual Property Rights and other Encumbrances listed on *Schedule 3.**13(b)**.*A Seller,NCPS or NDVS is the official and sole owner of record of all Registered Intellectual PropertyRights. No Owned Intellectual Property Right has been infringed by any Person. A Seller, NCPS orNDVS owns all Intellectual Property Rights developed by its current and former employees andindependent contractors during the period of their employment or within the scope of theircontracting or consulting relationship, as the case may be, with a Seller, NCPS or NDVS. Noemployee or former employee or independent contractor of a Seller, NCPS or NDVS has any claim withrespect to any of its Intellectual Property Rights.
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     (c) The documentation relating to all trade secrets listed on *Schedule 3.**13(a)(i)* is currentaccurate and sufficient in detail and content to identify and explain such trade secrets and toallow their full and proper use without reliance on the knowledge or memory of any individual.All Owned Intellectual Property Rights are valid and enforceable, and no Person has asserted thatany Owned Intellectual Property Right is invalid or not enforceable. All Owned IntellectualProperty Rights that are Registered Intellectual Property Rights are in full force and effect, andall actions required to keep such rights pending or in effect or to provide full availableprotection, including payment of filing, examination, annuity, and maintenance fees and filing ofrenewals, statements of use or working, affidavits of incontestability and other similar actions,have been taken, and no such Registered Intellectual Property Right is the subject of anyinterference, opposition, cancellation, nullity, re-examination or other proceeding placing inquestion the validity or scope of such rights. All products covered by Owned Intellectual PropertyRights or Licensed-In Intellectual Property Rights that are Registered Intellectual Property Rightsand all usages of Owned Intellectual Property Rights or Licensed-In Intellectual Property Rightsthat are Registered Intellectual Property Rights have been marked with the appropriate patent,trademark or other marking required or desirable to maximize available damage awards.     (d) The documentation relating to all trade secrets listed on *Schedule 3.**13(a)(i)* is current,accurate and sufficient in detail and content to identify and explain such trade secrets and toallow their full and proper use without reliance on the knowledge or memory of any individual. Allreasonable precautions have been taken to protect the secrecy, confidentiality and value of thetrade secrets and all other proprietary information used in the Business including theimplementation and enforcement of policies requiring each employee or independent contractor whohas access to trade secrets to execute proprietary information and confidentiality agreementssubstantially in a standard form, and each current and former employee and independent contractorof a Seller, NCPS or NDVS has executed such an agreement. There has been no breach or otherviolation of such agreements. A Seller, NCPS or NDVS has an unqualified right to use all tradesecrets and other proprietary information currently used, subject to any Contract relating toLicensed-In Intellectual Property Rights. No such trade secret or other proprietary information ispart of the public knowledge or literature, and no trade secret or other proprietary informationhas been used, divulged or appropriated either for the benefit of any Person other than a Seller,NCPS or NDVS or to the detriment of any of them.     (e) Neither of Sellers nor NCPS or NDVS has taken action, or failed to take an action, thatmight have the effect of estopping or otherwise limiting its right to enforce Owned IntellectualProperty Rights against any Person.     (f) Neither of Sellers nor NCPS or NDVS has any present expectation or intention of not fullyperforming any obligation pursuant to any license, and there is no breach, anticipated breach ordefault by any other party to any license. There are no renegotiations of, attempts torenegotiate, demands for or outstanding rights to renegotiate any license. To Sellers’ Knowledge,all rights under each license will be fully available to Buyer after the Closing.     (g) Each Licensed-In Intellectual Property Right for which a Seller, NCPS or NDVS has anexclusive right is in full force and effect, all actions required to keep such right pending or ineffect or to provide full protection, including payment of filing, examination, annuity, and
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maintenance fees and filing of renewals, statements of use or working, affidavits ofincontestability and other similar actions, have been taken. No Licensed-In Intellectual PropertyRight that is a Registered Intellectual Property Right and for which a Seller, NCPS or NDVShas an exclusive right is the subject of any interference, opposition, cancellation, nullity,re-examination or other proceeding placing in question the validity or scope of such right.     (h) Neither of Sellers nor NCPS or NDVS has infringed, misappropriated or otherwise violatedany Third-Party Intellectual Property Right, and neither of Sellers nor NCPS or NDVS has receivedany notice of any infringement, misappropriation or violation by a Seller, NCPS or NDVS of anyThird-Party Intellectual Property Right. No infringement, misappropriation or violation of anyThird-Party Intellectual Property Right has occurred or will occur with respect to products orservices sold by the Business or with respect to the products or services currently underdevelopment or with respect to the conduct of the Business as conducted or proposed to beconducted.     (i) All Software that is used by a Seller, NCPS or NDVS or is present at any facility or onany equipment of a Seller, NCPS or NDVS is owned by it or is subject to a current license agreementthat covers all use of the Software in the Business as conducted or as proposed to be conducted. ASeller, NCPS or NDVS has the right to use the Software used in the Business as it is being used,without any conflict with the rights of others. Neither of Sellers nor NCPS or NDVS is in breachof any license to, or license of, any Software. Neither of Sellers nor NCPS or NDVS uses, relieson or contracts with any Person to provide service bureau, outsourcing or other computer processingservices to the Business, in lieu of or in addition to their respective use of the Software.Following the Closing, Buyer will have sufficient rights to all necessary Software, to operate theBusiness as it is conducted or proposed to be conducted.     3.14 Material Contracts.     (a) *Schedule 3.14*lists the following Contracts to which a Seller, NCPS or NDVS is a party orsubject or by which it is bound (with the Contracts required to be listed on *Schedule 3.13*, the“*Material Contracts*”):     (i) each employment, agency, collective bargaining or consulting Contract;     (ii) each Contract (A) with any Insider or (B) between or among any Insiders relatingin any way to the Business;     (iii) each distributor, reseller, broker, sales representative, advertising agency orfinder’s Contract;     (iv) each franchise agreement;     (v) each Contract or group of related Contracts with the same party for the purchase ofproducts or services with an undelivered balance in excess of $25,000;     (vi) each Contract or group of related Contracts with the same party for the sale ofproducts or services with an undelivered balance in excess of $25,000;
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     (vii) each lease of real or personal property with aggregate annual payments in excessof $25,000;     (viii) each Contract for the sale of any capital assets;     (ix) each Contract for capital expenditures in excess of $25,000;     (x) each Contract relating to the borrowing of money or to mortgaging, pledging orotherwise placing an Encumbrance on any of the assets of the Business;     (xi) each written warranty, guaranty or other similar undertaking with respect tocontractual performance extended by a Seller, NCPS or NDVS other than in the Ordinary Courseof Business;     (xii) each Contract relating to any surety bond or letter of credit required to bemaintained by the Business;     (xiii) each Contract that contains or provides for an express undertaking by a Seller,NCPS or NDVS to be responsible for consequential damages;     (xiv) each Contract concerning a partnership or joint venture;     (xv) each Contract providing for the development of any products, Software orIntellectual Property Rights;     (xvi) each Contract containing exclusivity, noncompetition or nonsolicitationprovisions or that would otherwise prohibit a Seller, NCPS or NDVS from freely engaging inbusiness anywhere in the world or prohibiting the solicitation of the employees orcontractors of any other entity;     (xvii) each Contract pertaining to confidentiality or non-disclosure;     (xviii) each Capital Lease;     (xix) each Contract terminable by any other party upon a change of control of a Seller,NCPS or NDVS or upon the failure of a Seller, NCPS or NDVS to satisfy financial orperformance criteria specified in such Contract;     (xx) each power of attorney that is currently in effect; and     (xxi) each other Contract of a Seller, NCPS or NDVS not entered into in the OrdinaryCourse of Business or that is material to the business, financial condition, results ofoperations or prospects of the Business taken as a whole.     (b) Each Material Contract is valid and binding, currently in force and enforceable inaccordance with its terms, subject to the Remedies Exception. A Seller, NCPS or NDVS has performedall obligations required to be performed by it in connection with each Material Contract. Neitherof Sellers nor NCPS or NDVS has received any notice of any claim of default
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by it under or termination of any Material Contract. Neither of Sellers nor NCPS or NDVS hasany present expectation or intention of not fully performing any obligation pursuant to anyMaterial Contract, and there is no breach, anticipated breach or default by Seller, NCPS or NDVS orany other party to any Material Contract. There is no renegotiation of, attempt to renegotiate oroutstanding right to renegotiate any material terms of any Material Contract and no Person has madewritten demand for such renegotiation. To Sellers’ Knowledge, Seller, NCPS or NDVS can performeach Material Contract for the sale of products or services on time, at a profit and withoutunusual expenditures of time and money. Neither of Sellers nor NCPS or NDVS has any obligation torefund payments received for work not yet performed under a Material Contract where the percentageof work completed is less than the percentage of revenues received to date.     3.15 Litigation. Except for the Litigation involving the Family Shareholders, DanLalumiere and the Healey Trust described in Section 3.15 of the Disclosure Schedule (the“*Healey/Zammito Litigation*”), no Litigation is pending or, to the Knowledge of Sellers, threatenedagainst a Seller, NCPS or NDVS and there is no reasonable basis for any Litigation against aSeller, NCPS or NDVS. Neither of Sellers nor NCPS or NDVS is subject to any outstandingGovernmental Order.     3.16 Insurance.     (a) Sellers, NCPS and NDVS have at all times since January 1, 2003, maintained insurancerelating to the Business and covering property, fire, casualty, liability and workers’compensation. Such insurance (i) is in full force and effect, (ii) is sufficient for compliancewith all requirements of applicable Law, (iii) is valid and enforceable, (iv) insures against risksof the kind customarily insured against and in amounts customarily carried by businesses similarlysituated and (v) provides adequate insurance coverage for the activities of the Business. *Schedule3.16*lists each policy of insurance in effect.     (b) *Schedule 3.16*lists by year for the current policy year and each of the two precedingpolicy years a summary of the loss experience under each policy involving any claim in excess of$25,000, setting forth (i) the name of the claimant, (ii) a description of the policy by insurer,type of insurance and period of coverage and (iii) the amount and a brief description of the claim.*Schedule 3.16*also describes the loss experience for all claims in excess of $10,000 that wereself-insured, including the aggregate cost of such claims.     3.17 Compliance with Laws; Governmental Authorizations.     (a) Each of Sellers, NCPS and NDVS has complied with all applicable Laws and GovernmentalOrders. Neither of Sellers nor NCPS or NDVS is relying on any exemption from or deferral of anyLaw, Governmental Order or Governmental Authorization that would not be available to Buyer afterthe Closing.     (b) Each of Sellers, NCPS and NDVS has in full force and effect all GovernmentalAuthorizations necessary to conduct its business and own and operate its properties, and *Schedule3.**17(b)* lists each Governmental Authorization held by it. Sellers, NCPS and NDVS have compliedwith all Governmental Authorizations applicable to them except where failure
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could not reasonably be expected to result in a Material Adverse Effect. The Governmental Authorizations (i) have notbeen violated and (ii) are not subject to any pending, or to the Knowledge of Sellers, threatenedproceeding seeking their revocation or limitation.     (c) (i) The operation of the Business as currently conducted does not violate (A) the FairCredit Reporting Act, 15 U.S.C. § 1681 et seq., the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801-6809,the Driver’s Privacy Protection Act of 1994, 18 U.S.C. § 2771 et seq., and similar state Laws, or(B) to Sellers’ Knowledge, any other credit reporting, privacy (including the solicitation ofcustomers who have elected under applicable law to prevent the sharing of personal information),data protection, publicity, advertising or similar federal, state or local Law or GovernmentalOrder of any kind, (C) nor has a Seller, NCPS or NDVS received notice of any such violation, andneither of Sellers nor NCPS or NDVS is aware of any facts that would give rise to such a violation.     (ii) Neither Seller, NCPS, NDVS nor any of their directors, officers, Affiliates,agents or employees has violated or is currently in default or violation under (A) the FairCredit Reporting Act, 15 U.S.C. § 1681 et seq., the Gramm-Leach-Bliley Act, 15 U.S.C. §6801-6809, the Driver’s Privacy Protection Act, 18 U.S.C. § 2771 et seq., and similar stateLaws, nor (B) to Sellers’ Knowledge, any other Law or Governmental Order applicable to aSeller, NCPS or NDVS or any of their assets, properties, or operations, including withoutlimitation any credit reporting, privacy (including the solicitation of customers who haveelected under applicable law to prevent the sharing of personal information), dataprotection, publicity, advertising or similar federal, state or local law of any kind.     (iii) Neither of Sellers nor NCPS or NDVS is a party to any Contract, license oragreement wherein or whereby it has agreed to, or assumed, any obligation or duty towarrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or incur anyobligation or liability, or provide a right of rescission, with respect to compliance by thecounterparty thereto with any Law or Governmental Order, including without limitation anycredit reporting, privacy (including the solicitation of customers who have elected underapplicable law to prevent the sharing of personal information), data protection, publicity,advertising or similar federal, state or local law of any kind (including the Fair CreditReporting Act, 15 U.S.C. § 1681 et seq., the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801-6809,the Driver’s Privacy Protection Act, 18 U.S.C. § 2771 et seq., and similar state Laws).     (d) Neither of Sellers nor NCPS or NDVS has offered, authorized, promised, made or agreed tomake any gifts, payments or transfers of property of any kind (other than incidental gifts ofnominal value) in connection with any actual or proposed transaction, except as required orpermitted by the Laws of each applicable jurisdiction and in each such case has complied with theU.S. Foreign Corrupt Practices Act.     (e) Neither of Sellers nor NCPS or NDVS has ever had a legal obligation to file any form,report, schedule, proxy statement or other document with the SEC, and neither of Sellers nor NCPSor NDVS has filed with the SEC any such form, report, schedule, proxy statement or other document.
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     3.18 Environmental Matters.     (a) Neither of Sellers nor NCPS or NDVS is in violation of any Law, Governmental Authorizationor Governmental Order relating to environmental matters (“*Environmental Laws*”), including, but notlimited to, matters related to air pollution, water pollution, noise control, on-site or off-sitehazardous substance (as defined in the Comprehensive Environmental Response, Compensation andLiability Act, as amended, and including any other dangerous waste), handling, discharge, disposalor recovery, toxic or hazardous substances or materials (whether products or waste), asbestos,PCBs, and transportation or shipping safety and no notice of violation of any Environmental Lawshave been received by a Seller, NCPS or NDVS, nor, to Sellers’ Knowledge, is any such noticethreatened.     (b) To Sellers’ Knowledge: (i) no hazardous, dangerous or toxic materials have beengenerated, contained, handled, located, used, manufactured, processed, buried, incinerated,deposited, stored or released on, under or about any part of the Real Property, (ii) the buildingsand improvements located on the Real Property do not contain asbestos, urea, formaldehyde, radon atlevels above natural background, polychlorinated biphenyls (PCBs) or pesticides and (iii) noaboveground or underground storage or fuel tanks are located on, under or about the Real Property.     (c) To Sellers’ Knowledge, no expenditure will be required following the Closing for a Seller,NCPS, NDVS or Buyer to comply with any Environmental Laws in connection with the operation orcontinued operation of the Business on the Real Property in a manner consistent with the currentoperation thereof.     (d) Each Seller, on behalf of itself and its successors and assigns, hereby waives, releasesand agrees not to bring any claim, demand, cause of action or proceeding, including withoutlimitation any cost recovery action, against Buyer under any Environmental Law.     3.19 Warranties. Except as listed on *Schedule 3.19*, no product provided or serviceperformed by a Seller, NCPS or NDVS is subject to any guaranty, warranty or other indemnity, norare any claims pending or, to the Knowledge of Sellers, threatened for product liability or breachof any warranty relating to any such product or service.     3.20 Employees.     (a) *Schedule 3.**20(a)* lists each employee of a Seller, NCPS or NDVS as of the date of thisAgreement, states the total number of employees and indicates for each such employee, and in theaggregate, full-time, part-time and temporary status.     (b) *Schedule 3.**20(b)* lists each salaried employee of a Seller, NCPS or NDVS as of the date ofthis Agreement and shows for each such employee their annual salary, any other compensation payableto them (including compensation payable pursuant to bonus, incentive, deferred compensation orcommission arrangements), date of employment and position. To the Knowledge of Sellers, noexecutive employee of a Seller, NCPS or NDVS and no group of employees has any plans to terminatehis, her or their employment. Sellers, NCPS and NDVS have complied at all times with allapplicable Laws relating to employment and employment practices and those relating to thecalculation and payment of wages (including overtime pay,
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maximum hours of work and child labor restrictions), equal employment opportunity (including Laws prohibiting discrimination and/orharassment or requiring accommodation on the basis of race, color, national origin, religion,gender, disability, age, sexual orientation or otherwise), affirmative action and other hiringpractices, occupational safety and health, workers’ compensation, unemployment compensation, thepayment of social security and other Taxes, and unfair labor practices under the National LaborRelations Act or applicable state law. Sellers, NCPS and NDVS do not have any labor relationsproblem pending or, to the Knowledge of Sellers, threatened, and their labor relations aresatisfactory. There are no workers’ compensation claims pending against a Seller, NCPS or NDVS,or, to the Knowledge of Sellers, any facts that would give rise to such a claim. No employee of aSeller, NCPS or NDVS is subject to any secrecy or noncompetition agreement or any other agreementor restriction of any kind that would impede in any way the ability of such employee to carry outfully all activities of such employee in furtherance of the Business.     (c) *Schedule 3.**20(c)**,*Part 1, lists each employee of a Seller, NCPS or NDVS as of the date ofthis Agreement who holds a temporary work authorization, including H-1B, L-1, F-1 or J-1 visas orwork authorizations (the “*Work Permits*”), and shows for each such employee the type of Work Permitand the length of time remaining on such Work Permit. With respect to each Work Permit, all of theinformation that a Seller, NCPS or NDVS provided to the Department of Labor and the Immigration andNaturalization Service or the Department of Homeland Security (collectively, the “*Department*”) inthe application for such Work Permit was true and complete. A Seller, NCPS or NDVS received theappropriate notice of approval from the Department with respect to each such Work Permit. Neitherof Sellers nor NCPS or NDVS has received any notice from the Department that any Work Permit hasbeen revoked. There is no action pending or, to the Knowledge of Sellers, threatened to revoke oradversely modify the terms of any Work Permit. Except as disclosed in *Schedule 3.20(c)*, Part 2, noemployee of a Seller, NCPS or NDVS is (a) a non-immigrant employee whose status would terminate orotherwise be affected by the transactions contemplated by this Agreement, or (b) an alien who isauthorized to work in the United States in non-immigrant status. For each employee of a Seller,NCPS or NDVS hired after November 6, 1986, that Seller, NCPS or NDVS has retained an Immigrationand Naturalization Service Form I-9, completed in accordance with applicable Law.Sellers, NCPS and NDVS have each re-verified the employment eligibility status of all of theircurrent employees by completing a new Form I-9 for each such employee.     (d) The employment of any terminated former employee of a Seller, NCPS or NDVS has beenterminated in accordance with any applicable Contract terms and applicable Law, and neither ofSellers nor NCPS or NDVS has liability under any Contract or applicable Law toward any suchterminated employee. The transactions contemplated by this Agreement will not cause a Seller, NCPSor NDVS to incur or suffer any liability relating to, or obligation to pay, severance, terminationor other payment to any Person.     (e) Neither of Sellers nor NCPS or NDVS has made any loans (except advances for businesstravel, lodging or other expenses in the Ordinary Course of Business) to any Insider.     (f) Within the last five years, neither of Sellers nor NCPS or NDVS has experienced and, tothe Knowledge of Sellers, there has not been threatened, any strike, work stoppage, slowdown,lockout, picketing, leafleting, boycott, other labor dispute, union organization attempt, demand
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for recognition from a labor organization or petition for representation under the National LaborRelations Act or applicable state law. No grievance, demand for arbitration or arbitrationproceeding arising out of or under any collective bargaining agreement is pending or, to theKnowledge of Sellers, threatened. No Litigation is pending or, to the Knowledge of Sellers,threatened respecting or involving any applicant for employment, any current employee or any formeremployee, or any class of the foregoing, including Litigation involving:     (i) the Equal Employment Opportunity Commission or any other corresponding state orlocal fair employment practices agency relating to any claim or charge of discrimination orharassment in employment;     (ii) the United States Department of Labor or any other corresponding state or localagency relating to any claim or charge concerning hours of work, wages or employmentpractices;     (iii) the Occupational Safety and Health Administration or any other correspondingstate or local agency relating to any claim or charge concerning employee safety or health;     (iv) the Office of Federal Contract Compliance or any corresponding state agency; and     (v) the National Labor Relations Board or any corresponding state agency, whetherrelating to any unfair labor practice or any question concerning representation,and, to Sellers’ Knowledge, there is no reasonable basis for any such Litigation.     (g) No employee of a Seller, NCPS or NDVS is covered by any collective bargaining agreement,and no collective bargaining agreement is being negotiated.     (h) Seller, NCPS and NDVS have each paid in full to all employees all wages, salaries, bonusesand commissions due and payable to such employees and have fully reserved in theirbooks of account all amounts for wages, salaries, bonuses and commissions due but not yetpayable to such employees.     (i) There has been no lay-off of employees or work reduction program undertaken by or onbehalf of a Seller, NCPS or NDVS in the past two years, and no such program has been adopted by aSeller, NCPS or NDVS or publicly announced.     3.21 Employee Benefits.     (a) *Schedule 3.21*lists all Plans by name.     (b) Sellers’ Representative has delivered to Buyer true, complete and up-to-date copies of allPlans and compensation policies and all amendments thereto.     (c) No fact, condition or circumstance exists that would materially affect the informationcontained in the documents provided pursuant to this Section 3.21 and, in particular, no promises
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or commitments have been made by a Seller, NCPS or NDVS to amend any Plan or compensation policy.     (d) Except as disclosed on *Schedule 3.21*, all Plans are duly registered where required by anyGovernmental Entity (including registration with the relevant tax authorities where suchregistration is required to qualify for tax exemption or other beneficial tax status) and comply inall material respects with the requirements of ERISA, the Code and any other applicable law.     (e) Neither of Sellers nor NCPS or NDVS has incurred any liabilities or obligations withrespect to any of the Plans that are not funded, insured or accrued in accordance with GAAP. Thegroup health plans, as defined in Section 4980B(g) of the Code, that benefit employees of a Seller,NCPS or NDVS are in compliance with the continuation coverage requirements of Section 4980B of theCode. There are no outstanding violations of Section 4980B of the Code with respect to any Plan,covered employees or qualified beneficiaries.     (f) Neither of Sellers nor NCPS or NDVS contributes, nor has it ever contributed, to anymulti-employer plan, as defined in Section 3(37) of ERISA. Neither of Sellers nor NCPS or NDVS hasany actual or potential liabilities under Section 4201 of ERISA for any complete or partialwithdrawal from a multi-employer plan. Neither of Sellers nor NCPS or NDVS has any actual orpotential liability to provide coverage for death or medical benefits after separation fromemployment, other than health care continuation benefits described in Section 4980B of the Code orsimilar statute.     (g) Neither Seller, NCPS, NDVS nor any of their respective directors, officers, trustees,employees or other “fiduciaries,” as such term is defined in Section 3(21) of ERISA, has committedany breach of fiduciary responsibility imposed by ERISA or any other applicable law with respect toany Plan.     (h) There has been no occurrence or development that has, and the consummation of thetransactions contemplated by this Agreement will not, subject Buyer, Buyer’s Subsidiaries or anyof their respective directors, officers or employees to any liability with respect to thePlans under ERISA or any other governmental regulation.     (i) None of the Plans provide coverage for benefits beyond retirement or other termination ofservice to employees or their beneficiaries or dependants.     (j) Neither of Sellers nor NCPS or NDVS has unsatisfied liabilities or is reasonably expectedto incur any liabilities that could become a liability of Buyer with respect to any Plan, and, withrespect to each such Plan, full payment has been made of all amounts that a Seller, NCPS or NDVS isrequired, under the terms of each such Plan, to have paid as contributions to that Plan.     (k) None of the Acquired Assets is subject to any lien under Section 412(n) of the Code orSection 4068 of ERISA.     (l) *Schedule 3.21*lists each employee of a Seller, NCPS or NDVS who is (i) absent from activeemployment due to short or long term disability, (ii) absent from active employment on a leavepursuant to the Family and Medical Leave Act or a comparable state Law, (iii) absent from
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active employment on any other leave or approved absence (together with the reason for each leave orabsence), (iv) absent from active employment due to military service (under conditions that givethe employee rights to re-employment) or (v) currently receiving severance benefits.     3.22 Customers. *Schedule 3.22*lists the eight (8) largest customers of the Businesson a consolidated basis for each of the last two fiscal years and for the interim period ended onthe Latest Balance Sheet Date and sets forth opposite the name of each such customer the percentageof net sales attributable to such customer for each such period. No customer listed on *Schedule3.22*has indicated that it will stop or decrease the rate of business done with a Seller, NCPS orNDVS. Buyer has received copies of all Contracts with such respect to such persons.     3.23 Suppliers. *Schedule 3.23*lists the 10 largest suppliers of the Business on aconsolidated basis for each of the last two fiscal years and for the interim period ended on theLatest Balance Sheet Date and sets forth opposite the name of each such supplier the approximatepercentage of purchases attributable to such supplier for each such period. No supplier listed on*Schedule 3.23*is a sole source of supply for the Business. No supplier listed on *Schedule 3.23*hasindicated that it will stop or decrease the rate of business done with a Seller, NCPS or NDVS.Buyer has received copies of all Contracts with respect to such persons.     3.24 Affiliate Transactions. No Insider has any Contract with a Seller, NCPS or NDVS(other than employment not represented by a written Contract and terminable at will), any loan toor from a Seller, NCPS or NDVS or any interest in any assets (whether real, personal or mixed,tangible or intangible) used in or pertaining to the Business. No Insider has any direct orindirect interest in any competitor, supplier or customer of a Seller, NCPS or NDVS or in anyPerson from whom or to whom a Seller, NCPS or NDVS leases any property, or in any other Person with whom Seller, NCPS orNDVS otherwise transacts business of any nature. Ownership by an Insider, as a passive investment,of less than (a) three percent of the outstanding shares of capital stock of any corporation whosestock is listed on a national securities exchange or publicly traded on The NASDAQ National Marketor (b) ten percent of a privately held entity, will not constitute a breach of this Section *3.24*.     3.25 Brokerage. Other than Daniel Lalumiere, no Person will be entitled to receiveany brokerage commission, finder’s fee, fee for financial advisory services or similar compensationin connection with the transactions contemplated by this Agreement based on any Contract made by oron behalf of a Seller, NCPS or NDVS for which Buyer is or could become liable or obligated, otherthan the amounts payable by NCPS under the agreement dated November 22, 2002 between NCPS andDaniel Lalumiere, which will be paid by Sellers.     3.26 Availability of Documents. Sellers have delivered to Buyer correct and completecopies of the items referred to in the Disclosure Schedule or in this Agreement (and in the case ofany items not in written form, a written description thereof).     3.27 Solvency.     (a) Neither of Sellers nor NCPS or NDVS is insolvent or will be rendered insolvent by any ofthe transactions contemplated by this Agreement. As used in this Section 3.27,
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“insolvent” means that the sum of the debts and other probable Liabilities of a Seller, NCPS or NDVS, respectively,exceeds the present fair saleable value of its assets.     (b) Immediately after giving effect to the consummation of the transactions contemplated bythis Agreement, (i) each Seller, NCPS and NDVS will be able to pay its Liabilities as they becomedue in the usual course of its business; (ii) neither of Sellers nor NCPS or NDVS will haveunreasonably small capital with which to conduct its present or proposed business; (iii) eachSeller, NCPS and NDVS will have assets (calculated at fair market value) that exceed itsLiabilities; (iv) taking into account all pending and threatened litigation, final judgmentsagainst a Seller, NCPS or NDVS in actions for money damages are not reasonably anticipated to berendered at a time when, or in amounts such that, a Seller, NCPS or NDVS will be unable to satisfyany such judgments promptly in accordance with their terms (taking into account the maximumprobable amount of such judgments in any such actions and the earliest reasonable time at whichsuch judgments might be rendered) as well as all other obligations of Sellers, NCPS and NDVS; and(v) the cash available to each Seller, NCPS and NDVS, after taking into account all otheranticipated uses of the cash, will be sufficient to pay all such debts and judgments promptly inaccordance with their terms.     3.28 Disclosure.     (a) This Agreement, the exhibits, the Disclosure Schedule, the Annual Financial Statements orthe Latest Financial Statements do not contain any untrue statement or omit any material factnecessary to make the statements contained herein or therein, in light of the circumstances inwhich they were made, not misleading.     (b) Except as set forth in this Agreement or the Disclosure Schedule, to Sellers’ Knowledge,there is no fact that has specific application to the Business (other than general economic orindustry conditions) and that may materially adversely affect the assets, business, prospects,financial condition or results of operations of the Business.**IV. Representations and Warranties of Buyer**     Buyer and Parent, jointly and severally, represent and warrant to Sellers that as of the dateof this Agreement and as of the Closing Date (as though made then and as though the Closing Datewere substituted for the date of this Agreement):     4.1 Incorporation; Power and Authority. Buyer and Parent are each corporations dulyorganized, validly existing and in good standing under the Laws of its jurisdiction oforganization, with all necessary power and authority to execute, deliver and perform this Agreementand the Transition Services Agreement.     4.2 Valid and Binding Agreement. The execution, delivery and performance of thisAgreement and the Transition Services Agreement by each of Buyer and Parent has been duly andvalidly authorized by all necessary corporate action. This Agreement has been duly executed anddelivered by Buyer and Parent and constitutes the valid and binding obligation of each, enforceableagainst each in accordance with its terms, subject to the Remedies Exception. The TransitionServices Agreement, when executed and delivered by Buyer and Parent will
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constitute its valid and binding obligation, enforceable against each of them in accordance with its terms, subject to theRemedies Exception.     4.3 No Breach; Consents. The execution, delivery and performance of this Agreementand the Transition Services Agreement by each of Buyer and Parent will not (a) contravene anyprovision of its Organizational Documents; (b) violate or conflict with any Law, Governmental Orderor Governmental Authority; (c) conflict with, result in any breach of any of the provisions of,constitute a default (or any event that would, with the passage of time or the giving of notice orboth, constitute a default) under, result in a violation of, increase the burdens under, result inthe termination, amendment, suspension, modification, abandonment or acceleration of payment (orany right to terminate) or require a Consent, including any Consent under any Contract orGovernmental Authorization that is either binding upon or enforceable against Buyer or Parent;or (d) require any Governmental Authorization.     4.4 Brokerage. No Person will be entitled to receive any brokerage commission,finder’s fee, fee for financial advisory services or similar compensation in connection with thetransactions contemplated by this Agreement based on any Contract made by or on behalf of Buyer forwhich Sellers, NCPS or NDVS is or could become liable or obligated.**V. Agreements of Sellers and the Shareholders**     5.1 Conduct of the Business. To and including the Closing Date, except with the priorconsent of Buyer or as otherwise provided in this Agreement, each Seller shall, and shall causeNCPS and NDVS to:     (a) conduct the Business only in, and will not take any action except in, the Ordinary Courseof Business and in accordance with applicable Law;     (b) not amend or modify any Material Contract or enter into any Contract that would have beena Material Contract if such Contract had been in effect on the date of this Agreement, except thata Seller, NCPS or NDVS may enter into Contracts with vendors or customers in the Ordinary Course ofBusiness;     (c) (i) use its best efforts to preserve its business organization and goodwill, keepavailable the services of its officers, employees and consultants and maintain satisfactoryrelationships with vendors, customers and others having business relationships with it, (ii)subject to applicable Laws, confer on a regular and frequent basis with representatives of Buyer toreport operational matters and the general status of ongoing operations as requested by Buyer and(iii) not take any action that would render, or that reasonably may be expected to render, anyrepresentation or warranty made by Sellers in Article III of this Agreement untrue at the Closingas though then made and as though the Closing Date had been substituted for the date of thisAgreement in such representation or warranty, including any actions referred to in Section 3.9;     (d) except in the Ordinary Course of Business, not use extraordinary selling efforts thatwould have the effect of accelerating sales prior to the time reasonably expected, through offeringof discounts, shipment of goods prior to anticipated shipping dates or otherwise;
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     (e) not change any of its methods of accounting in effect on the Latest Balance Sheet Date,other than changes required by GAAP; and     (f) not cancel or terminate its current insurance policies or allow any of the coveragethereunder to lapse, unless simultaneously with such termination, cancellation or lapse replacementpolicies providing coverage equal to or greater than the coverage under the canceled, terminated orlapsed policies for substantially similar premiums are in full force and effect.     5.2 Notice of Developments. Each Seller will promptly notify Buyer of any emergencyor other change in the Ordinary Course of Business of that Seller, NCPS or NDVS or the commencementor threat of Litigation. Each Seller will promptly notify Buyer in writing if that Seller shoulddiscover that any representation or warranty made by it, NCPS or NDVS in this Agreement was whenmade, has subsequently become or will be on the Closing Date untrue in any respect.     5.3 Pre-Closing Access. Through the Closing Date, each Seller will (and will causeNCPS and NDVS to) afford to Buyer and its authorized representatives full access at all reasonabletimes and upon reasonable notice to the facilities, offices, properties, technology, processes,books, business and financial records, officers, employees, business plans, budgets, andprojections, suppliers and other information of each Seller, NCPS and NDVS, and the work papers ofKevin P. Martin & Associates, their independent accountants, and otherwise provide such assistanceas may be reasonably requested by Buyer in order that Buyer have a full opportunity to make suchinvestigation and evaluation as it reasonably desires to make of the business and affairs of eachSeller, NCPS and NDVS. In addition, each Seller will (and will cause NCPS and NDVS to) cooperatefully (including providing introductions where necessary) with Buyer to enable Buyer to contactthird parties, including employees, suppliers, customers and prospective customers of NCPS andNDVS, and to offer employment to employees of NCPS and NDVS. Subject to Laws, Buyer will have fullaccess to the personnel records (including performance appraisals, disciplinary actions, grievancesand medical records) of NCPS and NDVS for the purpose of preparing for and conducting employmentinterviews with all Active Employees. Each Seller will provide such Plan documents and summaryplan descriptions, employee data or other information as may be reasonably required to carry outthe arrangements described in Section 6.3. The Confidentiality Agreement will apply with respectto information obtained by Buyer under this Section 5.3. Any direct contact with a Seller’scustomers shall be subject to that Seller’s prior written approval, which shall not be unreasonablywithheld.     5.4 Pre-Closing Mergers. Prior to the Closing Date, Sellers and the Shareholders willtake all action necessary under all applicable Laws to cause NCPS to merge with and into NCPSBusiness Trust, and NDVS to merge with and into NDVS Business Trust, with Sellers as the survivingentities, and to cause the assignment of all of the assets and liabilities of NCPS and NDVS to therespective Sellers by operation of law (the “*Mergers*”).     5.5 Conditions. Each Seller will use its best efforts to cause the conditions setforth in Section 7.1 to be satisfied and to consummate the transactions contemplated by thisAgreement as soon as reasonably possible and in any event prior to the Closing Date.
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     5.6 Consents and Authorizations; Regulatory Filings. Sellers will obtain, and will cause NCPS or NDVS to obtain, (at no cost or burden to Buyer)all Consents and Governmental Authorizations (the “*Required Consents*”) necessary or reasonablydesirable for the consummation of the transactions contemplated by this Agreement or that could, ifnot obtained, adversely affect the conduct of the Business as it is conducted or proposed to beconducted, including those listed on *Schedule 5.6,*as promptly as practicable. Sellers will keepBuyer reasonably advised of the status of obtaining the Required Consents.     5.7 No Sale. Each Seller will not (and will cause NCPS and NDVS not to) sell, pledge,transfer or otherwise place any Encumbrance on any of the Acquired Assets.     5.8 Post-Closing Access. After the Closing Date, each Seller will afford to Buyer,its accountants and counsel, during normal business hours, upon reasonable request, full access toits books and records and those of NCPS and NDVS pertaining to the Business.     5.9 Litigation Support. In the event and for so long as Buyer is actively contestingor defending against any Litigation in connection with any fact, situation, circumstance, status,condition, activity, practice, plan, occurrence, event, incident, action, failure to act ortransaction existing or occurring on or prior to the Closing Date involving the Acquired Assets,each Seller and Shareholder will cooperate in the contest or defense, make available its personneland provide such testimony and access to its books and records as may be reasonably necessary inconnection with the contest or defense, at the cost and expense of Buyer (unless and to the extentBuyer is entitled to indemnification therefor under Article IX).     5.10 Nondisparagement. No Seller or Shareholder will take any action that is designedor intended to have the effect of discouraging any lessor, licensor, customer, supplier or otherbusiness associate of a Seller, NCPS or NDVS from maintaining the same business relationship withBuyer after the Closing as it maintained with such Seller, NCPS or NDVS prior to the Closing. EachSeller will refer all customer inquiries relating to the Business to Buyer from and after theClosing.     5.11 Non-Hire. During the period that commences on the Closing Date and ends on thesecond anniversary of the Closing Date, no Seller or Shareholder will, and each Seller andShareholder will cause each of its Affiliates not to, employ (or attempt to employ or interferewith any employment relationship with) any employee of the Business; *provided*, *however*, that theprovisions of this Section 5.11 shall not apply to Persons terminated without cause by Buyer ifsuch Persons are hired by a business other than a Competing Business.     5.12 Confidentiality.     (a) Except as necessary and appropriate in the Ordinary Course of Business until the Closing,and in all circumstances after the Closing, and other than as necessary and appropriate to protecta party’s interests in connection with the Healey/Zammito Litigation, each Seller and Shareholderwill keep confidential and protect, and will not divulge, allow access to or use in any way, any ofthe following with respect to the Business: (i) Intellectual Property Rights, including currentand planned manufacturing and distribution methods and processes, customer lists, current andanticipated customer requirements, price lists, market studies, business plans,
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Software, databasetechnologies, systems, structures, architectures and data (and related processes, formulae,compositions, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs,methods and information), (ii) any and all information concerning the Business (includinghistorical financial statements, financial projections and budgets, historical and projected sales,capital spending budgets and plans, the names and backgrounds of key personnel, personnel trainingand techniques and materials ), however documented, and (iii) any and all notes, analyses,compilations, studies, summaries and other material containing or based, in whole or in part, onany information included in the foregoing (“*Confidential Information*”). Each Seller andShareholder acknowledges that such Confidential Information constitutes a unique and valuable assetof the Business and represents a substantial investment of time and expense, and that anydisclosure or other use of such Confidential Information other than as provided in the precedingsentence or for the sole benefit of Buyer would be wrongful and would cause irreparable harm toBuyer. Promptly after the Closing, each Seller and Shareholder will deliver promptly to Buyer ordestroy, at the request and option of Buyer, all tangible and intangible embodiments (and allcopies) of such Confidential Information that are in its possession. The foregoing obligations ofconfidentiality will not apply to any Confidential Information that is or subsequently becomesgenerally publicly known, other than as a direct or indirect result of the breach of this Agreementby any Seller or Shareholder.     (b) Each Seller and Shareholder acknowledges that Buyer has required it makes the agreementsin this Section 5.12 as a condition to Buyer’s purchase of the Acquired Assets and consummation ofthe transactions contemplated by this Agreement. Each Seller and Shareholder agrees that theagreements contained in this Section 5.12 are reasonable and necessary to protect the legitimateinterests of Buyer and that any violation or breach of this Section 5.12 will result in irreparableinjury to Buyer for which no adequate remedy would exist at law. Accordingly, in addition to anyrelief at law that may be available to Buyer for such violation or breach and regardless of anyother provision contained in this Agreement, Buyer will be entitled to injunctive and otherequitable relief restraining such violation or breach (without any requirement that Buyer provideany bond or other security).     (c) In the event that any Seller or Shareholder is requested or required (by oral question orrequest for information or documents in any legal proceeding, interrogatory, subpoena, civilinvestigative demand or similar process) to disclose any Confidential Information, other than asnecessary and appropriate to protect a party’s interests in connection with the Healey/ZammitoLitigation, Seller or Shareholder will notify Buyer promptly of the request or requirement so thatBuyer may seek an appropriate protective order or waive compliance with the provisions of thisSection 5.12. If, in the absence of a protective order or the receipt of a waiver from Buyer,Seller or any Shareholder is, on the advice of counsel, compelled to disclose any ConfidentialInformation to any tribunal or else stand liable for contempt, such Seller or Shareholder maydisclose the Confidential Information to the tribunal; *provided, however*, that the disclosingSeller or Shareholder will notify Buyer and use best efforts to cooperate with Buyer to obtain, atthe request of Buyer, an order or other assurance that confidential treatment will be accorded tosuch portion of the Confidential Information required to be disclosed as Buyer designates.     5.13 Assignment of Confidentiality Agreements. Effective upon the Closing, eachSeller will assign to Buyer all of Seller’s right, title and interest in and to any confidentialityagreement to which Seller or the agent of Seller may be a party pertaining to the confidentiality
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of information relating to the Business or the hiring of employees of the Business. Each Sellerwill request the return or destruction of information covered by any such agreement within twobusiness days of the date of this Agreement to the broadest extent permitted by suchconfidentiality agreement.     5.14 Covenant Not to Compete.     (a) As an inducement for Buyer to enter into this Agreement and as additional considerationfor the consideration to be paid to Sellers under this Agreement, for a period of five years fromthe Closing Date, no Seller or Shareholder will, directly or indirectly, engage in, acquire, own orhold a business anywhere in the United States of America or in any other geographic area in whichthe Business operates as of the Closing Date that competes with the Business as conducted prior tothe Closing Date (a “*Competing Business*”), including as a proprietor, principal, agent, partner,officer, director, shareholder, employee, member of any association, consultant or otherwise.Ownership by a Seller or a Shareholder, as a passive investment, of less than three percent of theoutstanding shares of capital stock of any corporation whose stock is listed on a nationalsecurities exchange or publicly traded on The NASDAQ National Market will not constitute a breachof this Section 5.14.     (b) Each Seller and Shareholder acknowledges that Buyer has required that it makes theagreements in this Section 5.14 as a condition to Buyer’s consummation of the transactionscontemplated by this Agreement. Each Seller and Shareholder acknowledges that the agreementscontained in this Section 5.14 are reasonable (including with respect to duration, geographicalarea and scope) and necessary to protect the legitimate interests of Buyer and the Business,including the preservation of the Business, and that any violation or breach of this Section 5.14will result in substantial and irreparable harm to Buyer for which no adequate remedy would existat law. Accordingly, in addition to any relief at law that may be available to Buyer for suchviolation or breach and regardless of any other provision contained in this Agreement, Buyer willbe entitled to injunctive and other equitable relief restraining such violation or breach (withoutany requirement that Buyer provide any bond or other security).     (c) In the event of a violation or breach by any Seller or Shareholder of any agreement setforth in this Section 5.14, the term of such agreement will be extended by the period of theduration of such violation or breach.     (d) If the final judgment of a court of competent jurisdiction declares that any term orprovision of this Section 5.14 is invalid or unenforceable, the court making the determination ofinvalidity or unenforceability will have the power to reduce the scope, duration or area of theterm or provision, to delete specific words or phrases or to replace any invalid or unenforceableterm or provision with a term or provision that is valid and enforceable and that comes closest toexpressing the intention of the invalid or unenforceable term or provision, and this Agreement willbe enforceable as so modified after the expiration of the time within which the judgment may beappealed.     5.15 Change of Business Name. On or prior to the Closing Date, each Seller shallchange its business name to a name that is not confusingly similar to National Check ProtectionService or National Data Verification Service and shall cease to use any element of either name
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ofor any trademarks of NCPS or NDVS in Seller’s business name, printed materials, signage, websitesor similar identifying materials.     5.16 Release of Claims.     (a) Each Seller and its respective successors and assigns waive, release and agree not tobring any claim, demand, cause of action or proceeding, including any cost recovery action, againstBuyer or any Affiliate of Buyer under the Comprehensive Environmental Response, Compensation andLiability Act of 1980, as amended, or any state equivalent or any similar Law now existing orhereinafter enacted.     (b) Harry W. Healey, Jr., the Healey Trust and their respective successors and assigns waive,release and agree not to bring any claim, demand, cause of action, whether known or unknown, orproceeding against Buyer, any Affiliate of Buyer or any of their respective officers, directors,employees, agents or shareholders, arising out of or in any way related to the Healey/ZammitoLitigation or any other claim, demand or cause of action, whether known or unknown, of any kind orcharacter, which either now exist, may exist, or may later exist, arising from, resulting from, orin any way growing out of any act, event, transaction, occurrence, agreement or relationshipoccurring at any time prior to the date of this Agreement. The foregoing sentence shall notconstitute a waiver or release of any claim, demand or cause of action of Harry W. Healey, Jr. orthe Healey Trust against any of the Family Shareholders, Sellers or, with respect to his acts oromissions prior to the date of this Agreement, Dan Lalumiere.     (c) Harry W. Healey, Jr. and the Healey Trust further agree not to seek injunctive relief orany other remedy against any Shareholder or Seller in connection with the Healey/Zammito Litigationthat would prevent such Shareholder or Seller from performing any of his, her or its obligations inthis Agreement or that would otherwise impair the ability of Buyer or Parent toenforce any provision of this Agreement or the Transition Services Agreement against suchShareholder or Seller.     5.17 Termination of 401(k) Plan. Prior to the Mergers, Sellers shall cause NCPS andNDVS to terminate their 401(k) plan, contingent on the Closing. Sellers shall cause thedistribution of the 401(k) plan assets and liquidation and wind-down of the 401(k) plan trust assoon as administratively feasible following the Closing. Sellers shall deliver to Buyer afavorable determination letter with respect to the 401(k) plan (or other evidence of taxqualifications satisfactory to Buyer) prior to or immediately following the termination of the401(k) plan and take such further action as is required of Sellers in Section 6.3. Nothing in thisSection shall be construed to limit liability of any Seller or Shareholder for the representationsmade under Section 3.21.     5.18 Termination; Payment of Wages; Plans. Immediately prior to the Closing, eachSeller will terminate the employment of all its then current employees and employment arrangements,including but not limited to employment, agency, collective bargaining or consulting Contractdescribed in Section 3.14(a)(i). Each Seller will be responsible for (a) the payment of all wagesand other remuneration due to Active Employees with respect to theirservices as employees of the Business through the close of business on the Closing Date,
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 including pro rata bonus payments andall vacation pay earned prior to the Closing Date, (b) the payment of any termination or severancepayments and the provision of health plan continuation coverage in accordance with the requirementsof COBRA and Sections 601 through 608 of ERISA and (c) any and all payments to employees that maybe required under the WARN Act.     5.19 COBRA. On and after the Closing Date, each Seller will maintain a group healthplan and will provide COBRA continuation coverage to all “M&A Qualified Beneficiaries,” as thatterm is defined by Treas. Reg. §54.4980B-9 (“*Final IRS COBRA Regulations*”), with respect to thesale of the Acquired Assets. Seller will maintain such group health plan for at least the maximumperiod that COBRA continuation coverage may be available to the COBRA M&A Qualified Beneficiariesunder the Final IRS COBRA Regulations (including any second COBRA qualifying events experienced bythe M&A Qualified Beneficiaries.) Buyer will not be a “Successor Employer” under the Final IRSCOBRA Regulations by virtue of a Seller’s continued maintenance of a group health plan for theentire period the M&A Qualified Beneficiaries may be entitled to COBRA continuation coverage.     5.20 Tax Elections. Neither of Sellers nor NCPS or NDVS will make any election withrespect to Taxes, change an annual accounting period, adopt or change any accounting method, takeany discretionary position with respect to Taxes, or file an amended Tax Return or any report orform with respect to Taxes of a Seller, NCPS or NDVS which affect the Acquired Assets without priorconsultation with and consent of Buyer (which shall not be unreasonably withheld), if suchelection, adoption, change, position or filing would have the effect of increasing the Taxliabilityof Buyer with respect to the Acquired Assets with respect to any period ending after theClosing Date.     5.21 Payment of Taxes by Sellers.     (a) Sellers will pay in a timely manner all Taxes resulting from or payable in connection withthe sale of the Acquired Assets pursuant to this Agreement, regardless of the Person on whom suchTaxes are imposed by Law.     (b) Sellers will pay all sales and use taxes imposed by the State of Massachusetts withrespect to the Business for all periods prior to the Closing Date and will deliver to Buyer, nolater than June 30, 2005, a tax clearance certificate or other evidence reasonably satisfactory toBuyer from the taxing authority of the State of Massachusetts evidencing payment in full of suchtaxes.     (c) Each Seller and Buyer will (i) provide the other with such assistance as may reasonably berequested by any of them in connection with the preparation of any Return, audit or otherexamination by any taxing authority or judicial or administrative proceedings relating to liabilityfor Taxes, (ii) retain and provide the other with any records or other information that may berelevant to such Return, audit or examination, proceeding or determination, and (iii) provide theother with any final determination of any such audit or examination, proceeding or determinationthat affects any amount required to be shown on any Return of the other for any period.     5.22 Payment of Other Retained Liabilities. In addition to payment of Taxes pursuantto Section 5.21, each Seller will pay, or make adequate provision for the payment, in full all of
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the Retained Liabilities and other Liabilities of that Seller under this Agreement. If any suchLiabilities are not so paid or provided for, or if Buyer reasonably determines that failure to makeany payments will impair Buyer’s use or enjoyment of the Acquired Assets or conduct of the businesspreviously conducted by that Seller, NCPS or NDVS with the Acquired Assets and the payment has notbeen reasonably disputed by such Seller, Buyer may, at any time after the Closing Date, elect tomake all such payments directly (but shall have no obligation to do so) without limiting Buyer’sright to recover such payments from that Seller or from the Retained Amount.     5.23 Restrictions on Seller Dissolution and Distributions. Neither Seller willdissolve, nor make any distribution of the proceeds received pursuant to this Agreement, other thandistributions to cover tax liabilities, of proceeds received pursuant to this Agreement, untilSeller’s payment, or adequate provision for the payment, of all of its obligations pursuant toSections 5.21 and 5.22.**VI. Agreements of Buyer**     Buyer agrees with Sellers that:     6.1 Conditions. Buyer will use its best efforts to cause the conditions set forth inSection 7.2 to be satisfied and to consummate the transactions contemplated by this Agreement assoon as reasonably possible and in any event prior to the Closing Date.     6.2 Books and Records; Access. After the Closing Date, Buyer will cause the Businessto hold all of the books and records of the Business existing on the Closing Date in accordancewith Buyer’s retention policies in effect from time to time for a period of not less than two yearsfrom the Closing Date and, if it thereafter proposes to destroy or dispose of any such books andrecords, to offer first in writing at least 60 days prior to such proposed destruction ordisposition to surrender them to Sellers’ Representative at the sole expense of Sellers. After theClosing Date, Buyer will cause the Business to afford Sellers’ Representative and its accountantsand counsel, during normal business hours, upon reasonable request, full access to such books andrecords of the Business directly related to a Seller’s Tax or Litigation matters involving theBusiness. Buyer will make available to Sellers’ Representative upon written request and at theexpense of Sellers, but consistent with Buyer’s business requirements, reasonable assistance of anyof the Business’s personnel whose assistance or participation is required by Sellers’Representative, in anticipation of, or preparation for, existing or future Litigation or Taxmatters in which a Seller is involved related to the Business.     6.3 Employee Matters.     (a) Nothing in this Agreement will be construed to create a right in any employee of theBusiness to employment with Buyer. Although Buyer will not be obligated to offer employment to anyparticular employee of the Business, Buyer agrees to offer employment to at least 75% of thecurrent employees of the Business prior to the Closing, which are contingent on the Closing andsubject to background checks and drug testing according to Buyer’s policies and procedures.Buyer’s intention to extend offers of employment as set forth in this Section 6.3 will notconstitute any commitment, Contract or understanding (express or implied) of any obligation on
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thepart of Buyer to a post-Closing employment relationship of any fixed term or duration or upon anyterms or conditions other than those that Buyer may establish pursuant to individual offers ofemployment. Subject to any agreement between an employee and Buyer, the employment of eachemployee of the Business who is hired by Buyer will be “at will” employment. Any employmentoffered by Buyer is “at will” and may be terminated by Buyer or by an employee at any time for anyreason (subject to any written commitments to the contrary made by Buyer and to Law). Buyer willnot have any responsibility, liability or obligation, whether to Active Employees, formeremployees, their beneficiaries or to any other Person, with respect to any employee benefit plans,practices, programs or arrangements (including theestablishment, operation or termination thereof and the notification and provision of COBRAcoverage extension) maintained by a Seller.     (b) Buyer may interview any Active Employee. Within five business days of the date of thisAgreement, Sellers will make available, in electronic form, such information with respect to eachActive Employee as Buyer may reasonably request. Buyer will provide Sellers with a list of ActiveEmployees to whom Buyer has made an offer of employment that has been accepted effective on theClosing Date (the “*Hired Active Employees*”). Immediately after the Closing, each Seller willterminate the employment of all its then current employees, including all Hired Active Employees.     (c) Nothing in this Agreement will be deemed to prevent or restrict in any way the right ofBuyer to terminate, reassign, promote or demote any Hired Active Employee after the Closing or tochange adversely or favorably the title, powers, duties, responsibilities, functions, locations,salaries, other compensation or terms or conditions of employment of any Hired Active Employee.Buyer will set its own initial terms and conditions of employment for the Hired Active Employeesand others it may hire, including work rules, benefits and salary and wage structure, all aspermitted by law. Buyer is not obligated to assume any collective bargaining agreements under thisAgreement. Each Seller will be solely liable for any severance payment required to be made to itsemployees due to the transactions contemplated by this Agreement.     (d) With respect to any benefit plans or policies of Buyer or Parent, no Hired Active Employeeshall be given credit for service with a Seller, NCPS or NDVS prior to the Closing for any purposeincluding, but not limited to, eligibility, vesting and benefit accrual.     (e) After the Closing, Parent and Buyer shall allow all of the Hired Active Employees who areresidents of the United States to participate in Parent’s 401(k) plan on the same terms andconditions as apply to other similarly situated employees of Buyer and its affiliates, with nocredit given for service with a Seller, NCPS or NDVS prior to Closing. As soon as practicableafter the Closing and subject to delivery by Sellers’ Representative to Buyer of a favorabledetermination letter with respect to NCPS’ or NDVS’ 401(k) plan (or other evidence of taxqualifications satisfactory to Buyer) and the satisfaction of any other applicable legalrequirements to such transfer, Sellers shall permit each such Hired Active Employee to effect a“direct rollover” (within the meaning of Section 401(a)(31) of the Code) of his or her accountbalances under the 401(k) plan in accordance with applicable Law, and Parent and Buyer shall causethe Parent’s 401(k) plan to accept such direct rollover (including promissory notes evidencingoutstanding loans with respect to Hired Active Employees who elect a direct rollover of theirentire account balances).
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     (f) Buyer will not assume any Plan and will not succeed to any Plan assets.     (g) Each Seller will (or will cause NCPS or NDVS to) give any notices required by Law and takewhatever other actions with respect to any Plan as may be necessary to carry out this Section 6.3.     (h) Each Seller will provide Buyer with completed INS Forms I-9 and attachments with respectto each Hired Active Employee, except for such employees as that Seller certifies in writing toBuyer are exempt from such requirement.     (i) The participation by each Hired Active Employee in Welfare Plans maintained by a Seller,NCPS or NDVS shall cease on the Closing Date. As of the Closing Date, Buyer shall permit HiredActive Employees immediately to commence participation in Parent’s Welfare Plans that are offeredto similarly situated employees of Buyer. Hired Active Employees may be eligible to participate inParent’s long and short-term disability plans only after such Hired Active Employees complete thewaiting period that applies to other similarly situated employees of Buyer and its Affiliates.Hired Active Employees may not participate in Parent’s severance plans. Parent’s Welfare Plans inwhich Hired Active Employees participate on and after the Closing Date shall waive any pre-existingcondition exclusion (to the extent such exclusion was waived under applicable Welfare Plans offeredby a Seller, NCPS or NDVS to its employees) and any proof of insurability for such Hired ActiveEmployees and their eligible dependents. For purposes of this Agreement, “*Welfare Plan*” shall meanany plan, fund, policy or program which provides employees with welfare benefits or similar fringebenefits.**VII. Conditions to Closing**     7.1 Conditions to Buyer’s Obligations. The obligation of Buyer to take the actionsrequired to be taken by it at the Closing is subject to the satisfaction or waiver, in whole or inpart, in Buyer’s sole discretion (but no such waiver will waive any rights or remedy otherwiseavailable to Buyer), of each of the following conditions at or prior to the Closing:     (a) The representations and warranties set forth in Article III will be true and correct(without taking into account any supplemental disclosures after the date of this Agreement by anySeller or Shareholder or the discovery of information by Buyer);     (b) Sellers and the Shareholders will have performed and complied with each of theiragreements contained in this Agreement;     (c) Each Required Consent will have been obtained and be in full force and effect;     (d) Buyer will have obtained each Governmental Authorization required to operate the Businessin the manner it was operated prior to the Closing Date, other than authorization to access theMassachusetts Criminal History Systems Board criminal offender record information system (CORI);     (e) Buyer will have received evidence satisfactory to it that no Litigation is pending orthreatened (i) challenging or seeking to prevent or delay consummation of any of the transactionscontemplated by this Agreement, (ii) asserting the illegality of or seeking to render
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unenforceableany material provision of this Agreement or the Transition Services Agreement, (iii) seeking toprohibit direct or indirect ownership, combination or operation by Buyer of any portion of theAcquired Assets, or to compel Buyer or any of its Subsidiaries to dispose of, or to holdseparately, or to make any change in any portion of the business or assets of Buyer or itsSubsidiaries, as a result of the transactions contemplated by this Agreement, or incur anyburden, (iv) seeking to require direct or indirect transfer or sale by Buyer of, or to imposematerial limitations on the ability of Buyer to exercise full rights of ownership of, any of theAcquired Assets or (v) imposing or seeking to impose material damages or sanctions directly arisingout of the transactions contemplated by this Agreement on Buyer or any of its officers or directorsor with respect to any portion of the Acquired Assets;     (f) No Law or Governmental Order will have been enacted, entered, enforced, promulgated,issued or deemed applicable to the transactions contemplated by this Agreement by any GovernmentalEntity that would reasonably be expected to result, directly or indirectly, in any of theconsequences referred to in Section 7.1(f)     (g) After the date of this Agreement, no Material Adverse Effect will have occurred;     (h) No Person will have asserted or threatened that, other than as set forth in the DisclosureSchedule, such Person (i) is the owner of, or has the right to acquire or to obtain ownership of,any of the Acquired Assets or (ii) is entitled to all or any portion of the Purchase Price;     (i) Buyer will have received from counsel for Sellers a written opinion, dated the ClosingDate, addressed to Buyer and in the form set forth in *Exhibit F*;     (j) Buyer or an Affiliate or Subsidiary of Buyer will have entered into employment,consulting, noncompete or nonsolicitation agreements with Daniel Lalumiere, Kevin Magennis andKaren Salvas, on terms and conditions satisfactory to it, such agreements will be in full force andeffect and none of such Persons will have indicated any intention of not fulfilling his or herobligations under any such agreement;     (k) Buyer will have been satisfied (in its sole discretion) with the results of its continuingbusiness, legal, environmental and accounting due diligence regarding Sellers, NCPS and NDVS;     (l) Seller will have delivered each of the agreements, certificates, instruments and otherdocuments that it is obligated to deliver pursuant to Section 2.8(b)(i), and such agreements sodelivered will be in full force and effect;     (m) Buyer will have received releases of all Encumbrances on the Acquired Assets, other thanPermitted Encumbrances; and     (n) Buyer will have received certificates dated as of a date not earlier than the fifthbusiness day prior to the Closing as to the good standing of each Seller, executed by theappropriate officials of the State of Massachusetts and each jurisdiction in which a Seller, NCPSor NDVS is licensed or qualified to do business as a foreign corporation as specified in *Schedule3.1*.
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     7.2 Conditions to Sellers’ Obligations. The obligation of Sellers to take the actions required to be taken by it at the Closing issubject to the satisfaction or waiver, in whole or in part, in the sole discretion of Sellers’Representative (but no such waiver will waive any right or remedy otherwise available under thisAgreement), of each of the following conditions at or prior to the Closing:     (a) The representations and warranties set forth in Article IV will be true and correct;     (b) Buyer will have performed and complied with each of its agreements contained in thisAgreement;     (c) No Law or Governmental Order will have been enacted, entered, enforced, promulgated,issued or deemed applicable to the transactions contemplated by this Agreement by any GovernmentalEntity that prohibits the Closing; and     (d) Buyer will have delivered each of the certificates, instruments and other documents thatit is obligated to deliver pursuant to Section 2.8(b)(ii).**VIII. Termination**     8.1 Termination. This Agreement may be terminated prior to the Closing:     (a) by the mutual written consent of Buyer and Sellers’ Representative;     (b) by Sellers’ Representative, if     (i) Buyer has or will have breached any representation, warranty or agreement containedin this Agreement in any material respect;     (ii) the transactions contemplated by this Agreement will not have been consummated onor before May 31, 2005; *provided*, that Sellers’ Representative will not be entitled toterminate this Agreement pursuant to this Section 8.1(b)(i) if Sellers’ failure to complyfully with their obligations under this Agreement has prevented the consummation of thetransactions contemplated by this Agreement;     (iii) a Law or Governmental Order will have been enacted, entered, enforced,promulgated, issued or deemed applicable to the transactions contemplated by this Agreementby any Governmental Entity that prohibits the Closing;     (iv) any of the conditions set forth in Section 7.2 will have become impossible tosatisfy; or     (v) after the date of this Agreement, there is a material adverse change in thefinancial condition of Buyer that significantly impairs Buyer’s ability to perform itsobligations under this Agreement.     (c) by Buyer, if
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     (i) Any Seller or Shareholder has or will have breached any representation, warranty oragreement contained in this Agreement in any material respect;     (ii) the transactions contemplated by this Agreement will not have been consummated onor before May 31, 2005; *provided*, that Buyer will not be entitled to terminate thisAgreement pursuant to this Section 8.1(c)(i) if Buyer’s failure to comply fully with itsobligations under this Agreement has prevented the consummation of the transactionscontemplated by this Agreement;     (iii) a Law or Governmental Order will have been enacted, entered, enforced,promulgated, issued or deemed applicable to the transactions contemplated by this Agreementby any Governmental Entity that would reasonably be expected to result directly orindirectly, in any of the consequences referred to in Section 7.1(d);     (iv) after the date of this Agreement, a Material Adverse Effect will have occurred;     (v) any of the conditions set forth in Section 7.1 will have become impossible tosatisfy; or     (vi) Buyer will have discovered any fact or circumstance existing as of the date ofthis Agreement that has not been previously disclosed on the Disclosure Schedule that has aMaterial Adverse Effect.     8.2 Effect of Termination. The right of termination under Section 8.1 is in additionto any other rights Buyer or a Seller may have under this Agreement or otherwise, and the exerciseof a right of termination will not be an election of remedies and will not preclude an action forbreach of this Agreement. If this Agreement is terminated, all continuing obligations of theparties under this Agreement will terminate except that Article X and the Confidentiality Agreementwill continue in force in accordance with its terms unless terminated or modified by the parties inwriting.**IX. Indemnification**     9.1 Indemnification by Sellers and Shareholders.     (a) Sellers and Shareholders (collectively, for purposes of this Article IX only, “*Sellers*”)will indemnify in full Buyer and hold it harmless against any Loss, whether or not actuallyincurred prior to the applicable date referred to in Section 9.1(e), arising from, relating to,constituting or reflected by (i) any breach or inaccuracy in any of the representations andwarranties of Sellers contained in this Agreement or in the Disclosure Schedule or any closingcertificate delivered by or on behalf of any Seller pursuant to this Agreement (any such breach orinaccuracy to be determined without regard to any qualification for “materiality,” “in all materialrespects” or similar qualification and, with respect to the representations and warranties inSection 3.11, without regard to any exception set forth on the Disclosure Schedule); (ii) theoperation of the Business on or prior to the Closing Date (except for liabilities accuratelyreflected on the Final Closing Date Balance Sheet), (iii) the Litigation disclosed in Section 3.15of the Disclosure Schedule; (iv) any liability of a Seller, NCPS or NDVS for Taxes incurred on
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orprior to the Closing Date; (v) failure of a Seller, NCPS or NDVS to pay and discharge itsobligations that Buyer has not explicitly assumed pursuant to this Agreement, including anyliability imposed on Buyer as a matter of Law; (vi) any claim by a customer of Buyer for a credit,discount or payment arising out of any sales made by a Seller, NCPS or NDVS on or prior to theClosing Date; (vii) any noncompliance with any Bulk Sales Laws or fraudulent transfer law inrespect of the contemplated transactions; (viii) any liability under the WARN Act or any similarstate or local Law that may result from an “Employment Loss,” as defined by 29 U.S.C. 2101(a)(6),caused by any action of a Seller, NCPS or NDVS prior to the Closing or by Buyer’s decision not tohire previous employees of a Seller, NCPS or NDVS; (ix) any Plan established or maintained by aSeller, NCPS or NDVS; (x) any Retained Liabilities and (xi) any breach of any of the agreements ofany Seller contained in this Agreement (collectively, “*Buyer Losses*”).     (b) Sellers will indemnify Buyer for Buyer Losses (i) resulting from breaches or inaccuraciesof Sections 3.6 through 3.28 (excluding Sections 3.11 and 3.12) and (ii) pursuant to Section9.1(a)(ii) only if the aggregate amount of all Buyer Losses attributable to this Section 9.1(b)exceeds $100,000 (the “*Basket Amount*”), in which case Sellers will be liable for all Buyer Lossesunder this Agreement; *provided*, *however*, that in determining the amount of Buyer Losses that Buyerhas incurred, in no event shall Sellers be liable for any individual Buyer Loss in an amount thatis less than $10,000, unless such Buyer Loss relates to a Buyer Claim that arises from the same orsubstantially similar set of facts or circumstances as one or more other Buyer Claims and theaggregate of Buyer Losses so arising is at least $10,000.     (c) All Buyer Claims for indemnification pursuant to this Article IX shall be satisfied firstfrom the Retained Amount. In the event that the available Retained Amount is insufficient to coverany claim for indemnification pursuant to this Article IX, Buyer Claims shall be satisfied bypayment by Sellers to Buyer via wire transfer of immediately available funds.     (d) Sellers’ Liability will not exceed $10,000,000 for Buyer Losses (i) resulting frombreaches or inaccuracies of Sections 3.6 through 3.28 (excluding Sections 3.11 and 3.12), or (ii)pursuant to Section 9.1(a)(ii).     (e) If Buyer has a claim for indemnification under this Section 9.1, Buyer will deliver toSellers one or more written notices of Buyer Losses (each a “*Buyer Claim*”), prior to the secondanniversary of the Closing Date, except for Buyer Losses arising from a breach or inaccuracy in therepresentations and warranties made in Sections 3.1 through 3.5 (Organizational Structure and Powerand Authority), 3.12 (Tax Matters), 3.13 (Intellectual Property), 3.18 (Environmental) or 3.21(Employee Benefits) or any breach of any of the agreements by any Seller contained in thisAgreement, for which Buyer will deliver a Buyer Claim prior to 30 days after the expiration of theapplicable statute of limitations. No Seller will have any liability under this Section 9.1 unlessthe written notices required by the preceding sentence are given by the date specified. Any BuyerClaim will state in reasonable detail the basis for such Buyer Losses to the extent then known byBuyer and the nature of the Buyer Loss for which indemnification is sought, and it may state theamount of the Buyer Loss claimed. If such Buyer Claim (or an amended Buyer Claim) states theamount of the Buyer Loss claimed and Sellers notify Buyer that Sellers do notdispute the claim described in such notice or fails to notify Buyer within 20 business daysafter delivery of such notice by Buyer whether Sellers dispute the claim described in such notice,the Buyer Loss in the amount specified in Buyer’s notice will be admitted by Sellers (an “*Admitted*
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*Claim*”), and Sellers will pay the amount of such Buyer Loss to Buyer. If Sellers have timelydisputed the liability of Sellers with respect to a Buyer Claim (or an amended Buyer Claim) statingthe amount of a Buyer Loss claimed, Sellers and Buyer will proceed in good faith to negotiate aresolution of such dispute. If a claim for indemnification has not been resolved within 30 daysafter delivery of Sellers’ notice, Buyer may seek judicial recourse. If a Buyer Claim does notstate the amount of the Buyer Loss claimed, such omission will not preclude Buyer from recoveringfrom Sellers the amount of the Buyer Loss described in such Buyer Claim if any such amount issubsequently provided in an amended Buyer Claim. In order to assert its right to indemnificationunder this Article IX, Buyer will not be required to provide any notice except as provided in thisSection 9.1(e).     (f) Sellers will pay the amount of any Buyer Loss to Buyer within 10 business days followingthe determination of Sellers’ liability for and the amount of a Buyer Loss (whether suchdetermination is made pursuant to the procedures set forth in this Section 9.1, by agreementbetween Buyer and Sellers, by arbitration award or by final adjudication).     (g) **For purposes of this Article IX, the liability of each of NCPS Business Trust, NDVSBusiness Trust and the Family Shareholders shall be joint and several exclusive of the HealeyTrust.**     (h) The Healey Trust’s Liability for Buyer Losses under this Agreement will not exceed thelesser of (i) 16% of the Purchase Agreement or (ii) the amount of the Purchase Price distributed bythe Sellers to the Healey Trust. The foregoing limitation of liability shall not apply to BuyerLosses resulting from a breach of any covenant of the Healey Trust in this Agreement.     9.2 Indemnification by Buyer and Parent.     (a) Buyer and Parent (collectively, for purposes of this Article IX only, “*Buyer*”) willindemnify Sellers in full and hold them harmless against any Loss, whether or not actually incurredprior to the date referred to in Section 9.2(d), arising from, relating to or constituting (i) anybreach or inaccuracy in any of the representations and warranties of Buyer contained in thisAgreement or in any certificate delivered by or on behalf of Buyer pursuant to this Agreement (anysuch breach or inaccuracy to be determined without regard to any qualification as to “materiality,”“in all material respects” or similar qualification), (ii) any breach of any of the agreements ofBuyer contained in this Agreement, (iii) the failure of Buyer to assume, pay and discharge theAssumed Liabilities and (iv) any Liability resulting exclusively from the ownership or use of theAcquired Assets after Closing (“*Sellers’ Losses*”).     (b) Buyer will indemnify Sellers for Sellers’ Losses pursuant to Section 9.2(a) only if theaggregate amount of all Sellers’ Losses attributable to Section 9.2(a) exceeds the Basket Amount,in which case Buyer will be liable for the aggregate amount of all Sellers’ Losses underthis Agreement; *provided*, *however*, that in determining the amount of Sellers’ Losses thatSellers have incurred, in no event shall Buyer be liable for any individual Sellers’ Loss in anamount that is less than $10,000, unless such Sellers’ Loss relates to a Seller Claim that arisesfrom the same or substantially similar set of facts or circumstances as one or more other SellerClaims and the aggregate of Sellers’ Losses so arising is at least $10,000.
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     (c) Buyer’s liability will not exceed $500,000 for Sellers’ Losses attributable to Section9.2(a).     (d) If Sellers have a claim for indemnification under this Section 9.2, Sellers’Representative will deliver to Buyer one or more written notices of Sellers’ Losses (each, a“*Seller Claim*”) prior to the second anniversary of the Closing Date. Buyer will have no liabilityunder this Section 9.2 unless the written notices required by the preceding sentence are given in atimely manner. Any written notice will state in reasonable detail the basis for Sellers’ Losses tothe extent then known by Sellers and the nature of Sellers’ Losses for which indemnification issought, and it may state the amount of Sellers’ Losses claimed. If such written notice (or anamended notice) states the amount of Sellers’ Losses claimed and Buyer notifies Sellers that Buyerdoes not dispute the claim described in such notice or fails to notify Sellers within 20 businessdays after delivery of such notice by Sellers whether Buyer disputes the claim described in suchnotice, Sellers’ Losses in the amount specified in Sellers’ notice will be admitted by Buyer, andBuyer will pay the amount of Sellers’ Losses to Sellers. If Buyer has timely disputed itsliability with respect to such claim, Buyer and Sellers’ Representative will proceed in good faithto negotiate a resolution of such dispute. If a claim for indemnification has not been resolvedwithin 30 days after delivery of Buyer’s notice, Sellers may seek judicial recourse. If a writtennotice does not state the amount of Sellers’ Losses claimed, such omission will not precludeSellers from recovering from Buyer the amount of Sellers’ Losses with respect to the claimdescribed in such notice if any such amount is promptly provided once determined. In order toassert its right to indemnification under this Article IX, Sellers will not be required to provideany notice except as provided in this Section 9.2.     (e) Buyer will pay the amount of any Sellers’ Losses to Sellers’ Representative within 10business days following the determination of Buyer’s liability for and the amount of Sellers’Losses (whether such determination is made pursuant to the procedures set forth in this Section9.2, by agreement between Sellers’ Representative and Buyer, by arbitration award or by finaladjudication).     9.3 Third-Party Actions.     (a) Sellers will indemnify, defend and hold harmless Buyer and its officers, directors,employees, agents, shareholders and Affiliates (collectively, the “*Buyer Indemnified Parties*”)against any Loss arising from, relating to or constituting any Litigation instituted by any thirdparty arising out of the actions or inactions of any Seller, NCPS or NDVS (or allegations thereof)whether occurring prior to, on or after the Closing Date that are or may be Buyer Losses (any suchthird party action or proceeding being referred to as a “*Third-Party Action*”). A Buyer IndemnifiedParty will give Sellers’ Representative prompt written notice of the commencementof a Third-Party Action. The complaint or other papers pursuant to which the third partycommenced such Third-Party Action will be attached to such written notice. The failure to giveprompt written notice will not affect any Buyer Indemnified Party’s right to indemnification unlesssuch failure has materially and adversely affected Sellers’ ability to defend successfully suchThird-Party Action.     (b) Sellers will contest and defend such Third-Party Action on behalf of any Buyer IndemnifiedParty that requests that they do so. Notice of the intention to so contest and defend
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will be given by Sellers’ Representative to the requesting Buyer Indemnified Party within 20 business daysafter the Buyer Indemnified Party’s notice of such Third-Party Action (but, in all events, at leastfive business days prior to the date that a response to such Third-Party Action is due to befiled). Such contest and defense will be conducted by reputable attorneys retained by Sellers. ABuyer Indemnified Party will be entitled at any time, at its own cost and expense, to participatein such contest and defense and to be represented by attorneys of its own choosing. If the BuyerIndemnified Party elects to participate in such defense, the Buyer Indemnified Party will cooperatewith Sellers in the conduct of such defense. A Buyer Indemnified Party will cooperate with Sellersto the extent reasonably requested by Sellers in the contest and defense of such Third-PartyAction, including providing reasonable access (upon reasonable notice) to the books, records andemployees of the Buyer Indemnified Party if relevant to the defense of such Third-Party Action inaccordance with the terms of Section 6.2; *provided*, that such cooperation will not unduly disruptthe operations of the business of the Buyer Indemnified Party or cause the Buyer Indemnified Partyto waive any statutory or common law privileges, breach any confidentiality obligations owed tothird parties or otherwise cause any confidential information of such Buyer Indemnified Party tobecome public.     (c) If any Buyer Indemnified Party does not request that Sellers contest and defend aThird-Party Action, or if after such request Sellers do not contest and defend a Third-Party Actionor if any Buyer Indemnified Party reasonably determines that Sellers are not adequatelyrepresenting or, because of a conflict of interest, may not adequately represent any interests ofthe Buyer Indemnified Party at any time after requesting Sellers to do so, such Buyer IndemnifiedParty will be entitled to conduct its own defense and to be represented by one attorney of its ownchoosing, all at Sellers’ cost and expense. Sellers will pay as incurred (no later than 25 daysafter presentation) the reasonable fees and expenses of the counsel retained by such BuyerIndemnified Party. Sellers will be entitled at any time, at its own cost and expense, toparticipate in such contest and defense and to be represented by attorneys of its own choosing. IfSellers elect to participate in such defense, Sellers will cooperate with the Buyer IndemnifiedParty in the conduct of such defense. Sellers will cooperate with a Buyer Indemnified Party to theextent reasonably requested by a Buyer Indemnified Party in the contest and defense of suchThird-Party Action, including providing reasonable access (upon reasonable notice) to the books,records and employees of Sellers if relevant to the defense of such Third-Party Action; provided,that such cooperation will not unduly disrupt the operations of the business of Sellers or causeSellers to waive any statutory or common law privileges, breach any confidentiality obligationsowed to third parties or otherwise cause any confidential information of such Seller to becomepublic.     (d) Neither a Buyer Indemnified Party nor Sellers may concede, settle or compromise anyThird-Party Action without the consent of the other party, which consents will not be unreasonablywithheld.     9.4 Sole and Exclusive Remedy. Prior to or in connection with the Closing, theparties will have available to them all remedies available at law or in equity, including specificperformance or other equitable remedies. After the Closing, the rights set forth in Sections 9.1,9.2 and, to the extent applicable, 9.3 will be the exclusive remedy for breach or inaccuracy of anyof the representations and warranties contained in Articles III and IV of this Agreement and willbe in lieu of contract remedies, but the parties otherwise will have available to them all other
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remedies available at law or in equity. **Notwithstanding the foregoing, nothing in this Agreementwill prevent any party from bringing an action based upon fraud or willful misconduct by the otherparty in connection with this Agreement or limit the amounts which may be recoverable upon anyfinding of the same on behalf of the other party.**In the event such action is brought, theprevailing party’s attorneys’ fees and costs will be paid by the nonprevailing party.     9.5 Tax Adjustment. Any payment to Buyer under this Article IX will be, for Taxpurposes, to the extent permitted by Law, an adjustment to the Purchase Price. In calculating anyLoss, the amount will be increased to give effect to any Tax related to the receipt of any paymentand the amount will be decreased to give effect to any benefit related to the increase of such Lossto the extent actually received by Buyer.     9.6 Indemnification in Case of Strict Liability or Indemnitee Negligence. **THEINDEMNIFICATION PROVISIONS IN THIS ARTICLE IX WILL BE ENFORCEABLE REGARDLESS OF WHETHER THELIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR LAWS (INCLUDING ANY PAST, PRESENTOR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY ANDHEALTH LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LAW) AND REGARDLESS OF WHETHER ANY PERSON(INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT,CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE ORCONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.****X. General**     10.1 Press Releases and Announcements. Any public announcement, including anyannouncement to employees, customers, suppliers or others having dealings with the Business, orsimilar publicity with respect to this Agreement or the transactions contemplated by thisAgreement, will be issued, if at all, at such time and in such manner as Buyer determines andapproves. The parties agree that the Confidentiality Agreement will not prohibit Buyer from making any such public announcement orsimilar publicity. Buyer will have the right to be present for any in-person announcement by anySeller, Shareholder, NCPS or NDVS. Unless consented to by Buyer or required by Law, each Sellerand Shareholder will keep, and each Seller and Shareholder will cause NCPS and NDVS to keep, thisAgreement and the transactions contemplated by this Agreement confidential.     10.2 Expenses. Except as otherwise expressly provided for in this Agreement, Sellersand the Shareholders, on the one hand, and Buyer, on the other hand, will each pay all expensesincurred by each of them (and, in the case of Sellers, the expenses incurred by NCPS and NDVS andSellers’ Representative) in connection with the transactions contemplated by this Agreement,including legal, accounting, investment banking and consulting fees and expenses incurred innegotiating, executing and delivering this Agreement and the other agreements, exhibits, documentsand instruments contemplated by this Agreement (whether the transactions contemplated by thisAgreement are consummated or not).
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     10.3 Amendment and Waiver. This Agreement may not be amended, nor may a provision ofthis Agreement or any default, misrepresentation or breach of warranty or agreement under thisAgreement be waived or a consent be rendered except in a writing executed by the party againstwhich such action is sought to be enforced. Neither the failure nor any delay by any Person inexercising any right, power or privilege under this Agreement will operate as a waiver of suchright, power or privilege, and no single or partial exercise of any such right, power or privilegewill preclude any other or further exercise of such right, power or privilege or the exercise ofany other right, power or privilege. In addition, no course of dealing between or among anyPersons having any interest in this Agreement will be deemed effective to modify or amend any partof this Agreement or any rights or obligations of any Person under or by reason of this Agreement.The rights and remedies of the parties to this Agreement are cumulative and not alternative.     10.4 Notices. All notices, demands and other communications to be given or deliveredunder or by reason of the provisions of this Agreement will be in writing and will be deemed tohave been given (i) when delivered if personally delivered by hand (with written confirmation ofreceipt), (ii) when received if sent by a nationally recognized overnight courier service (receiptrequested), (iii) five business days after being mailed, if sent by first class mail, returnreceipt requested, or (iv) when receipt is acknowledged by an affirmative act of the partyreceiving notice, if sent by facsimile, telecopy or other electronic transmission device (providedthat such an acknowledgement does not include an acknowledgment generated automatically by afacsimile or telecopy machine or other electronic transmission device). Notices, demands andcommunications to Buyer, Seller, Sellers’ Representative and the Shareholders will, unless anotheraddress is specified in writing, be sent to the address indicated below:          If to Buyer:Chex Systems, Inc.