exhibit10-1.htm


                            Exhibit
10.1

       

       

      ASSET
PURCHASE AGREEMENT

       

       

      dated
as of January 13, 2009

       

       

      among

       

       

      Tier
Technologies, Inc.,

       

       

      Cowboy
Acquisition Company

       

       

      and

       

       

      ChoicePay,
Inc.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
      

       

      
        	TABLE OF
      CONTENTS
	 	 
	 	Page
	 ARTICLE
      I  THE ASSET PURCHASE	
                1

              
	    1.1    Purchase and
      Sale of Assets    	
                 1

              
	    1.2    Assumption of
      Liabilities 	
                 1

              
	    1.3    Purchase
      Price 	
                 1

              
	    1.4    Escrows 	
                 1

              
	    1.5    The
      Closing 	 2
	    1.6    Allocation 	 3
	    1.7    Post-Closing
      Adjustments 	 3
	    1.8    Earn-Out
      Consideration 	 5
	    1.9    Use of
      Closing Payment 	 7
	
                    1.10        
      Further Assurances  

              	 7
	 	 
	 ARTICLE
      II  REPRESENTATIONS AND WARRANTIES OF THE SELLER 	 7
	    2.1    Organization,
      Qualification and Corporate Power 	 8
	    2.2    Capitalization 	 8
	    2.3    Authorization
      of Transaction 	 8
	    2.4    Noncontravention 	 9
	    2.5    Subsidiaries 	 9
	    2.6    Financial
      Statements 	 9
	    2.7    Absence
      of Certain Changes 	 10
	    2.8    Undisclosed Liabilities 	 10
	    2.9    Tax
      Matters 	 10
	    2.10        
      Ownership and Condition of Assets 	 11
	    2.11        
      Owned Real Property 	 12
	    2.12        
      Real Property Leases 	 12
	    2.13        
      Intellectual Property 	 12
	    2.14       
       [INTENTIONALLY LEFT BLANK] 	 16
	    2.15         Contracts 	 16
	    2.16         Accounts
      Receivable 	 18
	    2.17        
      Powers of Attorney 	 18
	    2.18        
      Insurance 	 18
	    2.19        
      Litigation 	 18
	    2.20        
      Warranties 	 18
	    2.21        
      Employees 	 18
	    2.22        
      Employee Benefits 	 19
	    2.23        
      Environmental Matters 	 21
	    2.24        
      Legal Compliance 	 21
	    2.25        
      Customers and Suppliers 	 22
	    2.26        
      Permits 	 22
	    2.27        
      Certain Business Relationships With Affiliates 	 22
	    2.28        
      Brokers' Fees 	 22
	    2.29        
      Books and Records 	22


      

       

       

      
        
          
          

        

        
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        	    2.30        
      Government Contracts 	23
	    2.31        
      Solvency 	 23
	 	 
	
                ARTICLE
      III  PRESENTATIONS AND WARRANTIES OF THE
      BUYER PARENT

                AND THE
      BUYER 

              	 24
	    3.1    Organization
      and Corporate Power 	 24
	    3.2    Authorization of
      the Transaction 	 24
	    3.3    Noncontravention 	 24
	    3.4    Brokers'
      Fees 	 25
	    3.5    Acknowledgement 	 25
	    3.6    Sufficient
      Funds 	 25
	 	 
	ARTICLE IV 
      PRE-CLOSING COVENANTS 	 25
	    4.1    Closing
      Efforts 	 25
	    4.2    Governmental
      and Third-Party Notices and Consents 	 25
	    4.3    Stockholder
      Approval 	 26
	    4.4    Operation of
      Business 	 27
	    4.5    Access
      to Information 	 28
	    4.6    Exclusivity 	 29
	    4.7    FIRPTA
      Tax Certificate 	 29
	    4.8    Notice
      of Developments 	 29
	    4.9    Confidentiality     	 30
	 	 
	ARTICLE V 
      CONDITIONS TO CLOSING 	 30
	    5.1    Conditions to
      Obligations of each Party 	 30
	    5.2    Conditions to
      Obligations of the Buyer 	 30
	    5.3    Conditions to
      Obligations of the Seller 	 32
	 	 
	ARTICLE VI 
      POST-CLOSING COVENANTS 	 33
	    6.1    Propiertary
      Information 	 33
	    6.2    Solicitation
      and Hiring 	 33
	    6.3    Non-Competition 	 33
	    6.4    Tax
      Matters 	 34
	    6.5    Sharing
      of Data 	 34
	    6.6    Use of
      Name 	 35
	    6.7    Cooperation in
      Litigation 	 35
	    6.8    Collection of
      Accounts Receivable 	 35
	    6.9    Employees 	 36
	    6.10        
      Enforcement of Insurance Claims 	 36
	 	 
	ARTICLE VII 
      INDEMNIFICATION 	 36
	    7.1    Indemnification
      by the Seller 	 36
	    7.2    Indemnification
      by the Buyer Parent and the Buyer 	 37
	    7.3    Indemnification
      Claims 	 37
	    7.4    Survival of
      Representations and Warranties 	 40
	    7.5    Limitations 	 41
	    7.6    Treatment of
      Indemnity Payments 	 42
	 	 


      

       

      
        
          
          

        

        
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        	ARTICLE VIII 
      TERMINATION 	 42
	    8.1    Termination of
      Agreement 	 42
	    8.2    Effect
      of Termination 	 42
	 	 
	ARTICLE IX 
      DEFINITIONS 	 43
	 	 
	ARTICLE X 
      MISCELLANEOUS 	 55
	    10.1         
      Press Releases and Announcements 	 55
	    10.2         
      No Third Party Beneficiaries 	 55
	    10.3         
      Entire Agreement 	 55
	    10.4         
      Succession and Assignment 	 55
	    10.5         
      Counterparts and Facsimile Signature 	 55
	    10.6         
      Headings 	 55
	    10.7         
      Notices 	 55
	    10.8         
      Governing Law 	 56
	    10.9         
      Amendments and Waivers 	 56
	    10.10       
      Severability 	 56
	    10.11       
      Expenses 	 57
	    10.12       
      Submission to Jurisdiction 	 57
	    10.13       
      Specific Performance 	 57
	    10.14       
      Construction 	 58
	    10.15       
      Buyer Parent Guaranty; Acknowledgment 	 58
	 	 
	Exhibits 	 
	 	 
	Exhibit A -   Closing
      Working Capital Escrow Agreement 	 
	Exhibit B -   Indemnification
      Escrow Agreement 	 
	Exhibit C -   Bill of
      Sale 	 
	Exhibit D -   Trademark
      Assignment 	 
	Exhibit E -    Instrument of
      Assumptions 	 
	Exhibit F -    Form of
      Non-Competition Agreement 	 
	Exhibit G -   Opinion of
      Seller's counsel 	 
	Exhibit H
      -   Form
      of Waiver 	 
	 	 
	Schedules 	 
	 	 
	Schedule 1.1(b)
      -    Excluded
      Assets 	 
	Schedule 1.6 -        Allocation
      of Purchase Price 	 
	Schedule 1.8 -        Earn-Out
      Contracts 	 
	Disclosure
      Schedule	 
	
                Schedule
      5.2(a) -    Required
      Consents 

              	 
	Schedule 6.9 -        Transferring
      Employees 	 
	 	 


      

       

       

      
        
           


        

        
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      ASSET
PURCHASE AGREEMENT

       

      This
Asset Purchase Agreement is entered into as of January 13, 2009 by and between
Tier Technologies, Inc., a Delaware corporation (the “Buyer Parent”), Cowboy
Acquisition Company, a Delaware corporation and direct, wholly-owned subsidiary
of the Buyer Parent (the “Buyer”), and ChoicePay, Inc., an Oklahoma corporation
(the “Seller”).

       

      This
Agreement contemplates a transaction in which the Buyer will purchase
substantially all of the assets and assume certain of the liabilities of the
Seller.

       

      Capitalized
terms used in this Agreement shall have the meanings ascribed to them in Article
IX.

       

      In
consideration of the representations, warranties and covenants herein contained,
the Parties agree as follows.

       

      ARTICLE
I

       

      THE
ASSET PURCHASE

               1.1  Purchase and Sale of
Assets.

       

       (a)  Upon and subject to the terms
and conditions of this Agreement, the Buyer shall purchase from the Seller, and
the Seller shall sell, transfer, convey, assign and deliver to the Buyer, at the
Closing, for the consideration specified below in this Article I, all right,
title and interest in, to and under the Acquired Assets.

       

                (b)  Notwithstanding the provisions
of Section 1.1(a), the Acquired Assets shall not include the Excluded
Assets.

       

               1.2  Assumption of
Liabilities.

       

       (a)  Upon
and subject to the terms and conditions of this Agreement, the Buyer shall
assume and become responsible for, from and after the Closing, the Assumed
Liabilities.

       

       (b)  Notwithstanding the terms of
Section 1.2(a) or any other provision of this Agreement to the contrary, the
Buyer shall not assume or become responsible for, and the Seller shall remain
liable for, the Retained Liabilities.

       

         1.3  Purchase
Price.  The Purchase Price shall consist of (i) the payment by
the Buyer to or at the direction of the Seller at the Closing of $7,500,000 (the
“Closing Payment”) and (ii) the Earn-Out Consideration.

       

               1.4  Escrows.

       

       (a)  At
the Closing, an amount equal to $300,000 otherwise payable by the Buyer to the
Seller at Closing shall be paid by the Buyer to the Escrow Agent for the purpose
of securing the post-closing adjustment set forth in Section 1.7 of this
Agreement (the “Closing 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          
Working
Capital Escrow Fund”).  The Closing Working Capital Escrow Fund shall
be held by the Escrow Agent under the Closing Working Capital Escrow Agreement
pursuant to the terms thereof.  The Closing Working Capital Escrow
Fund shall be held as a trust fund and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any creditor of any
party, and shall be held and disbursed solely for the purposes and in accordance
with the terms of the Closing Working Capital Escrow
Agreement.

      

       

      (b)  At the Closing, an amount equal
to $500,000 otherwise payable by the Buyer to the Seller at Closing shall be
paid by the Buyer to the Escrow Agent for the purpose of securing the
indemnification obligations of the Seller set forth in this Agreement (the
“Indemnification Escrow Fund”).  The Indemnification Escrow Fund shall
be held by the Escrow Agent under the Indemnification Escrow Agreement pursuant
to the terms thereof.  The Indemnification Escrow Fund shall be held
as a trust fund and shall not be subject to any lien, attachment, trustee
process or any other judicial process of any creditor of any party, and shall be
held and disbursed solely for the purposes and in accordance with the terms of
the Indemnification Escrow Agreement.

       

      1.5  The
Closing.

       

      (a)  The
Closing shall take place at the offices of the Buyer in Reston, Virginia
commencing at 9:00 a.m. local time on the Closing Date.  All
transactions at the Closing shall be deemed to take place simultaneously, and no
transaction shall be deemed to have been completed and no documents or
certificates shall be deemed to have been delivered until all other transactions
are completed and all other documents and certificates are
delivered.

       

      (b)  At
the Closing:

       

      (i)  the
Seller shall deliver to the Buyer the various certificates, instruments and
documents referred to in Section 5.2;

       

      (ii)  the
Buyer Parent and the Buyer shall deliver to the Seller the various certificates,
instruments and documents referred to in Section 5.3;

       

      (iii)  the
Seller shall execute and deliver to the Buyer a bill of sale in substantially
the form attached hereto as Exhibit C, one or
more trademark assignments in substantially the form attached hereto as Exhibit D, and such
other instruments of conveyance (such as real estate deeds, assigned
certificates or documents of title, assigned negotiable instruments and stock
transfer powers) as the Buyer may reasonably request in order to effect the
sale, transfer, conveyance and assignment to the Buyer of valid ownership of the
Acquired Assets;

       

      (iv)  the
Buyer shall execute and deliver to the Seller an instrument of assumption in
substantially the form attached hereto as Exhibit E and such
other instruments as the Seller may reasonably request in order to effect the
assumption by the Buyer of the Assumed Liabilities;

       

      (v)  the
Buyer shall pay to or at the direction of the Seller, by wire transfer of
immediately available funds to an account or accounts designated by the Seller,
the 

       

      
        
          
          

        

        
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Closing
Payment set forth in Section 1.3, less the amounts to be deposited in escrow
pursuant to Section 1.4;

      

       

      (vi)  the
Buyer, the Seller and the Escrow Agent shall execute and deliver each of the
Closing Working Capital Escrow Agreement and the Indemnification Escrow
Agreement, and the Buyer shall deposit funds with the Escrow Agent in accordance
with Section 1.4;

       

      (vii)  the
Seller shall deliver to the Buyer, or otherwise put the Buyer in possession and
control of, all of the Acquired Assets of a tangible nature; and

       

      (viii)  the
Buyer and the Seller shall execute and deliver to each other a cross-receipt
evidencing the transactions referred to above.

       

      1.6  Allocation.  The
Buyer and the Seller agree to allocate the Purchase Price and the Assumed
Liabilities, including the Assumed Severance Payments (and all other
capitalizable costs) among the Acquired Assets and the non-solicitation and
non-competition covenants set forth in Sections 6.2 and 6.3 for all purposes
(including financial accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Schedule
1.6.  If the Closing Payment or the Earn-Out Consideration is
adjusted pursuant to Section 1.7 or Section 1.8 below, the allocation of
the Purchase Price among the Acquired Assets as set forth in Schedule 1.6 shall be
appropriately modified by mutual agreement of the Buyer and the Seller, working
together in good faith, to reflect increases or decreases in the various asset
categories which give rise to such adjustments.

       

      1.7  Post-Closing
Adjustments.  The Purchase Price set forth in Section 1.3
shall be subject to adjustment after the Closing Date as follows:

       

      (a)  Within
30 days after the Closing Date, the Seller shall prepare and deliver to the
Buyer the Draft Closing Balance Sheet.  The Seller shall prepare the
Draft Closing Balance Sheet in accordance with GAAP applied on a basis
consistent with the application of GAAP to the preparation of the Financial
Statements, which shall set forth the Closing Working Capital.

       

      (b)  The
Buyer shall deliver to the Seller, by the Objection Deadline Date, either a
notice indicating that the Buyer accepts the Draft Closing Balance Sheet or a
detailed statement describing its objections (if any) to the Draft Closing
Balance Sheet.  If the Buyer delivers to the Seller a notice accepting
the Draft Closing Balance Sheet, or the Buyer does not deliver a written
objection to the Draft Closing Balance Sheet by the Objection Deadline Date,
then, effective as of either the date of delivery of such notice of acceptance
or as of the close of business on the Objection Deadline Date, the Draft Closing
Balance Sheet shall be deemed to be the Final Closing Balance
Sheet.  If the Buyer timely objects to the Draft Closing Balance
Sheet, such objections shall be resolved as follows:

       

      (i)  The
Buyer and the Seller shall first use reasonable efforts and cooperate in good
faith to resolve such objections.

       

      
        
          
          

        

        
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      (ii)  If
the Buyer and the Seller do not reach a resolution of all objections set forth
on the Buyer’s statement of objections within 15 days after delivery of such
statement of objections, the Buyer and the Seller shall, within 10 days
following the expiration of such 15-day period, engage the Accountant, pursuant
to an engagement agreement executed by the Buyer, the Seller and the Accountant,
to resolve any (and only those) remaining objections set forth on the Buyer’s
statement of objections (the “Unresolved Objections”).  The Accountant
shall not address any issues other than the Unresolved Objections.

       

      (iii)  The
Buyer and the Seller shall jointly submit to the Accountant, within 5 days after
the date of the engagement of the Accountant (as evidenced by the date of the
engagement agreement), a copy of the Draft Closing Balance Sheet, a copy of the
statement of objections delivered by the Buyer to the Seller, and a statement
setting forth the resolution of any objections agreed to by the Buyer and the
Seller.  Each of the Buyer and the Seller shall submit to the
Accountant (with a copy delivered to the other Party on the same day), within 10
days after the date of the engagement of the Accountant, a memorandum (which may
include supporting exhibits) setting forth their respective positions on the
Unresolved Objections.  Each of the Buyer and the Seller may (but
shall not be required to) submit to the Accountant (with a copy delivered to the
other Party on the same day), within 30 days after the date of the engagement of
the Accountant, a memorandum responding to the initial memorandum submitted to
the Accountant by the other Party.  Unless requested by the Accountant
in writing, neither Party may present any additional information or arguments to
the Accountant, either orally or in writing.  In the event that the
Accountant makes such a request, a Party submitting any writing to the
Accountant shall deliver a copy of such writing to the other Party on the same
day, and any oral communication by a Party with the Accountant shall take place
only in the presence (in person or telephonically) of the other
Party.  In the event that the Accountant makes such request, a Party
submitting any written material to the Accountant in response to such request
(or otherwise in connection with the Unresolved Objections) shall deliver a copy
of all such written material to the other Party on the same day, and any oral
communication with the Accountant by a Party in response to such a request shall
take place only in the presence (in person or telephonically) of the other
Party.

       

      (iv)  Within
45 days after the date of its engagement hereunder, the Accountant shall
determine whether the objections raised by the Buyer are appropriate and shall
issue a ruling which shall include a balance sheet, comprised of the Draft
Closing Balance Sheet as adjusted pursuant to any resolutions to objections
agreed upon by the Buyer and the Seller and pursuant to the Accountant’s
resolution of the Unresolved Objections.  Such balance sheet shall be
deemed to be the Final Closing Balance Sheet.

       

      (v)  The
resolution by the Accountant of the Unresolved Objections shall be conclusive
and binding upon the Buyer and the Seller.  The Buyer and the Seller
agree that the procedure set forth in this Section 1.7(b) for resolving disputes
with respect to the Draft Closing Balance Sheet shall be the sole and exclusive
method for resolving any such disputes; provided that this provision shall not
prohibit either Party from instituting litigation to enforce the ruling of the
Accountant.

       

      (vi)  The
Buyer and the Seller shall each pay one-half of the fees and expenses of the
Accountant under this Section 1.7.

       

      
        
          
          

        

        
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      (c)  If
the Closing Working Capital as shown on the Final Closing Balance Sheet is less
than zero, then the Buyer may deduct from the initial Quarterly Earn-Out Payment
and, if and to the extent necessary, from each subsequent Quarterly Earn-Out
Payment, the entirety of the amount otherwise payable to the Seller until the
entire Closing Working Capital Shortfall has been paid in full to the
Buyer.  Notwithstanding the foregoing, if the Closing Working Capital
Shortfall as shown on the Final Closing Balance Sheet is greater than $500,000,
then (i) the Buyer and the Seller shall deliver to the Escrow Agent, within
three business days after the date on which the Final Closing Balance Sheet is
finally determined pursuant to this Section 1.7, a written notice executed
by both parties instructing the Escrow Agent to (A) disburse to the Buyer from
the Closing Working Capital Escrow Fund an amount equal to the lesser of (1) the
Closing Working Capital Shortfall less $500,000 and (2) the full amount of the
Closing Working Capital Escrow Fund, and (B) disburse to the Seller any amount
remaining in the Closing Working Capital Escrow Fund, and (ii) the Buyer may
deduct the remainder of the Closing Working Capital Shortfall from the Quarterly
Earn-Out Payments as set forth in the previous sentence.

       

      (d)  If
the Closing Working Capital as shown on the Final Closing Balance Sheet is
greater than zero, the Closing Payment shall be increased by such excess amount
and the Buyer shall pay to the Seller, by wire transfer of immediately available
funds to an account or accounts designated by the Seller, within three business
days after the date on which the Final Closing Balance Sheet is finally
determined pursuant to this Section 1.7, an amount equal to such
excess.

       

      1.8  Earn-Out
Consideration.  Subject to Section 1.7(c), the Seller shall be
entitled to additional consideration in the form of Earn-Out Consideration as
follows:

       

      (a)  Except
as provided in Section 1.8(b), for each fiscal quarter commencing on the Closing
and ending on December 31, 2013 (the “Earn-Out Period”), the Buyer shall pay to
the Seller an amount equal to 20% of the Gross Profit generated by the Earn-Out
Contracts during such fiscal quarter, or, with respect to the first such period,
the portion of the fiscal quarter after the Closing (each, a “Quarterly Earn-Out
Payment”).  The “Gross Profit generated by the Earn-Out Contracts” for
any quarter shall be equal to the revenue recognized by the Buyer under the
Earn-Out Contracts for that quarter minus the direct costs associated with
performing those contracts, without any allocation of indirect costs, all
calculated in accordance with GAAP.  For the avoidance of doubt, any
references in this Section 1.8 to a “quarter” or “fiscal quarter” shall mean,
with respect to the fiscal quarter ending March 31, 2009, only the portion of
the fiscal quarter after the Closing.

       

      (b)  Notwithstanding
the foregoing, the sum of (i) the aggregate Earn-Out Consideration actually paid
to the Seller plus (ii) all amounts deducted from any Quarterly Earn-Out
Payments pursuant to Section 1.7(c) (such sum, the “Total Earn-Out Amount”),
shall not exceed $2,000,000.  If, for any fiscal quarter during the
Earn-Out Period, the Quarterly Earn-Out Payment would cause the Total Earn-Out
Amount to exceed $2,000,000, then (A) such Quarterly Earn-Out Payment shall be
reduced to an amount that will cause the Total Earn-Out Amount to equal
$2,000,000, (B) no further Quarterly Earn-Out Payments shall be made (including
without limitation any Quarterly Earn-Out Payments that are then being disputed
pursuant to Section 1.8(d)).

       

      
        
          
          

        

        
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      (c)  No
later than 30 days after the end of each fiscal quarter during the Earn-Out
Period (unless pursuant to Section 1.8(b) no further Quarterly Earn-Out Payments
shall be made), the Buyer shall at its expense prepare (or cause to be prepared)
and deliver to the Seller a calculation of the Gross Profit generated by the
Earn-Out Contracts for such fiscal quarter and a statement (each, a “Quarterly
Earn-Out Statement”) of the amount, if any, of Quarterly Earn-Out Payment to be
delivered to the Seller for such fiscal quarter.  Unless the Seller
shall, in accordance with the provisions of subsection (d) below, challenge the
Buyer’s determination of the Quarterly Earn-Out Payment for such fiscal quarter
within 15 days after the delivery of the Quarterly Earn-Out Statement, the
Buyer’s determination shall be conclusive and binding upon the
Seller.  During such 15-day period after delivery of the Quarterly
Earn-Out Statement, the Buyer shall make its relevant books and records and
accounting personnel available to the Seller during normal business hours as
reasonably requested by the Seller so as to enable the Seller to assess the data
and methodology used in the calculations underlying the Quarterly Earn-Out
Statement.

       

      (d)  In
the event that the Seller disputes the calculation of the Quarterly Earn-Out
Payment for any fiscal quarter (an “Earn-Out Dispute”), the Seller shall notify
the Buyer in writing by delivery of a notice (an “Earn-Out Dispute Notice”)
within 15 days after delivery of the Quarterly Earn-Out Statement for such
fiscal quarter, which Earn-Out Dispute Notice shall set forth in reasonable
detail the Seller’s objections to the Quarterly Earn-Out
Statement.  If the Seller timely delivers an Earn-Out Dispute Notice,
such objections shall be resolved as follows:

       

      (i)  The
Buyer and the Seller shall first use reasonable efforts and cooperate in good
faith to resolve such objections.

       

      (ii)  If
the Buyer and the Seller do not reach a resolution of all objections set forth
in the Earn-Out Dispute Notice within 15 days after delivery of such Earn-Out
Dispute Notice, the Buyer and the Seller shall, within 10 days following the
expiration of such 15-day period, engage the Accountant, pursuant to an
engagement agreement executed by the Buyer, the Seller and the Accountant, to
resolve any remaining objections set forth in the Earn-Out Dispute Notice (the
“Remaining Earn-Out Objections”).

       

      (iii)  The
Buyer and the Seller shall jointly submit to the Accountant, within 5 days after
the date of the engagement of the Accountant (as evidenced by the date of the
engagement agreement), a copy of the Quarterly Earn-Out Statement, a copy of the
Earn-Out Dispute Notice delivered by the Seller to the Buyer, and a statement
setting forth the resolution of any objections agreed to by the Buyer and the
Seller.  Each of the Buyer and the Seller shall submit to the
Accountant (with a copy delivered to the other Party on the same day), within 10
days after the date of the engagement of the Accountant, a memorandum (which may
include supporting exhibits) setting forth their respective positions on the
Remaining Earn-Out Objections.  Each of the Buyer and the Seller may
(but shall not be required to) submit to the Accountant (with a copy delivered
to the other Party on the same day), within 30 days after the date of the
engagement of the Accountant, a memorandum responding to the initial memorandum
submitted to the Accountant by the other Party.  Unless requested by
the Accountant in writing, neither Party may present any additional information
or arguments to the Accountant, either orally or in writing.  In the
event that the Accountant makes such request, a Party submitting any written
material to the Accountant in response to such request shall deliver


       

      
        
          
          

        

        
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a
copy of all such written material to the other Party on the same day, and any
oral communication with the Accountant by a Party in response to such a request
(or otherwise in connection with the Earn-Out Dispute) shall take place only in
the presence (in person or telephonically) of the other
Party.

      

       

      (iv)  Within
45 days after the date of its engagement hereunder, the Accountant shall
determine whether the objections raised by the Seller are appropriate and shall
issue a ruling which shall include a statement of the Quarterly Earn-Out Payment
for such fiscal quarter.

       

      (v)  The
resolution by the Accountant of the Remaining Earn-Out Objections shall be
conclusive and binding upon the Buyer and the Seller.  The Buyer and
the Seller agree that the procedure set forth in this Section 1.8(d) for
resolving disputes with respect to the Quarterly Earn-Out Payments shall be the
sole and exclusive method for resolving any such disputes; provided that this
provision shall not prohibit either Party from instituting litigation to enforce
the ruling of the Accountant.

       

      (vi) The
Buyer and the Seller shall each pay one-half of the fees and expenses of the
Accountant under this Section 1.8.

       

      (e)  Within
15 days after the earlier of (i) the Seller’s failure to deliver an Earn-Out
Dispute Notice with respect to a Quarterly Earn-Out Statement on a timely basis
or (ii) the resolution of any Earn-Out Dispute, the Buyer shall pay to the
Seller the conclusive and binding Quarterly Earn-Out Payment as determined
pursuant to Section 1.8(c) or 1.8(d), as applicable.  Each such
Quarterly Earn-Out Payment shall be delivered by wire transfer of immediately
available funds to an account or accounts designated in writing by the
Seller.

       

      1.9  Use of Closing
Payment.  The Seller shall use the Closing Payment to (i) pay
off all short- and long-term debt (including capital leases) of the Seller and
(ii) pay off all other short- and long-term liabilities of the
Seller.  The Seller may distribute any remaining funds as permitted by
its governing documents and applicable law.

       

      1.10  Further
Assurances.  At any time and from time to time after the
Closing, at the request of the Buyer and without further consideration, the
Seller shall execute and deliver such other instruments of sale, transfer,
conveyance and assignment and take such actions as the Buyer may reasonably
request to more effectively transfer, convey and assign to the Buyer, and to
confirm the Buyer’s rights to, title in and ownership of, the Acquired Assets
and to place the Buyer in actual possession and operating control
thereof.

       

      ARTICLE
II

       

      REPRESENTATIONS
AND WARRANTIES OF THE SELLER

       

      The
Seller represents and warrants to the Buyer that, except as set forth in the
Disclosure Schedule, the statements contained in this Article II are true
and correct as of the date of this Agreement and will be true and correct as of
the Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date (in
which case such representations and warranties will be true and correct as of
such date).  

       

      
        
          
          

        

        
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The
Disclosure Schedule shall be arranged in sections and subsections corresponding
to the numbered and lettered sections and subsections contained in this Article
II.  The disclosures in any section or subsection of the Disclosure
Schedule shall qualify other sections and subsections in this Article II only to
the extent it is clear from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections.  For purposes of
this Article II, the phrase “to the knowledge of the Seller” or any phrase of
similar import shall be deemed to refer to the actual knowledge of Roger
Marshall, Benjamin Peters, Keith Fulton and Robert Kirk.

      

       

      2.1  Organization, Qualification
and Corporate Power.  The Seller is a corporation duly
organized, validly existing and in corporate and tax good standing under the
laws of the State of Oklahoma.  The Seller is duly qualified to
conduct business and is in corporate and tax good standing under the laws of
each jurisdiction listed in Section 2.1 of the Disclosure Schedule, which
jurisdictions constitute the only jurisdictions in which the nature of the
Seller’s businesses or the ownership or leasing of its properties requires such
qualification except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, would not have a Seller Material
Adverse Effect.  The Seller has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.  The Seller has furnished to the
Buyer complete and accurate copies of its Certificate of Incorporation and
by-laws.  The Seller is not in default under or in violation of any
provision of its Certificate of Incorporation or by-laws.

       

      2.2  Capitalization.  The
authorized capital stock of the Seller consists of (a) 75,000,000 shares of
common stock, $0.0007 par value per share, of which, as of the date of this
Agreement, 1,800,239 shares were issued and outstanding and 4,000 shares were
held in the treasury of the Seller, and (b) 15,000,000 shares of Preferred
Stock, $0.0007 par value per share, of which (i) 70,000 shares have been
designate as Series A 12% Preferred Stock, of which, as of the date of this
Agreement, 58,130 shares were issued and outstanding, and (ii) 40,000
shares have been designated as Series B 16% Preferred Stock, of which, as of the
date of this Agreement, 10,000 shares were issued and outstanding.
Section 2.2 of the Disclosure Schedule sets forth a complete and accurate
list, as of the date of this Agreement, of (i) all stockholders of the
Seller, indicating the number and class or series of shares of capital stock of
the Seller held by each stockholder and (for shares other than common stock) the
number of shares of common stock (if any) into which such shares are
convertible, (ii) all outstanding options, warrants or other instruments
giving any party the right to acquire any of capital stock of the Seller,
indicating (A) the holder thereof, (B) the number and class or series
of capital stock of the Seller subject thereto and (for shares other than common
stock) the number of shares of common stock (if any) into which such shares are
convertible, (C) the exercise price, date of grant, vesting schedule and
expiration date for each such option, warrant or other
instrument.  There are no outstanding agreements or commitments to
which the Seller is a party or which are binding upon the Seller providing for
the redemption of any of its capital stock.

       

      2.3  Authorization of
Transaction.  The Seller has all requisite power and authority
to execute and deliver this Agreement and the Ancillary Agreements and to
perform its obligations hereunder and thereunder.  The execution and
delivery by the Seller of this Agreement and, subject to obtaining the Requisite
Stockholder Approval, which is the only approval required from the Seller’s
stockholders, the performance by the Seller of this Agreement and the Ancillary
Agreements and the consummation by the Seller of the transactions contemplated


       

      
        
          
          

        

        
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hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of the Seller.  Without limiting the generality of
the foregoing, the Board of Directors of the Seller, at a meeting duly called
and held, by the unanimous vote of all directors determined that the sale of
assets contemplated by this Agreement is fair to, expedient and in the best
interests of the Seller, approved this Agreement in accordance with the Oklahoma
General Corporation Act, directed that such asset sale be submitted for approval
to the stockholders of the Seller entitled to vote thereon and holding not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting of stockholders of the Seller at which all shares
entitled to vote thereon were present and voted, and resolved to recommend that
the stockholders of the Seller vote in favor of the approval of such asset
sale.  This Agreement has been duly and validly executed and delivered
by the Seller and constitutes, and each of the Ancillary Agreements, upon its
execution and delivery by the Seller, will constitute, a valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as such enforceability may be subject to the effects of
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting the rights of creditors and general principles of equity (the
“Enforceability Exception”).

      

       

      2.4  Noncontravention.  Except
as set forth at Section 2.4 of the Disclosure Schedule, neither the execution
and delivery by the Seller of this Agreement or the Ancillary Agreements, nor
the consummation by the Seller of the transactions contemplated hereby or
thereby, will (a) conflict with or violate any provision of the Certificate
of Incorporation or by-laws of the Seller, (b) require on the part of the
Seller any notice to or filing with, or any permit, authorization, consent or
approval of, any Governmental Entity, (c) conflict with, result in a breach
of, constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which the Seller is a party or by which the
Seller is bound or to which any of their respective assets is subject, except
for (i) any conflict, breach, default, acceleration, termination, modification
or cancellation which, individually or in the aggregate, would not have a Seller
Material Adverse Effect and would not adversely affect the consummation of the
transactions contemplated hereby or (ii) any notice, consent or waiver the
absence of which, individually or in the aggregate, would not have a Seller
Material Adverse Effect and would not adversely affect the consummation of the
transactions contemplated hereby, (d) result in the imposition of any
Security Interest upon any assets of the Seller or (e) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Seller
or any of its properties or assets.

       

      2.5  Subsidiaries.  The
Seller has no Subsidiaries.

       

      2.6  Financial
Statements.  The Seller has provided to the Buyer the Financial
Statements.  The Financial Statements (i) were prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered thereby
(except as may be indicated in the notes to such Financial Statements) and (ii)
fairly present the financial position of the Seller as of the dates thereof and
the results of its operations and cash flows for the periods indicated,
consistent with the books and records of the Seller, except that the unaudited
interim financial statements are subject to normal and recurring year-end
adjustments which will not be material in amount or effect and do not include
footnotes.

       

      
        
          
          

        

        
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      2.7  Absence of Certain
Changes.  Since the Most Recent Balance Sheet Date,
(a) there has occurred no event or development which, individually or in
the aggregate, has had, or would reasonably be expected to have in the future, a
Seller Material Adverse Effect, and (b) the Seller has not taken any of the
actions set forth in paragraphs (a) through (n) of
Section 4.4.

       

      2.8  Undisclosed
Liabilities.  The Seller has no liability (whether known or
unknown, whether absolute or contingent, whether liquidated or unliquidated and
whether due or to become due), except for (a) liabilities shown on the Most
Recent Balance Sheet, (b) liabilities which have arisen since the Most
Recent Balance Sheet Date in the Ordinary Course of Business and which are
reflected on the Final Closing Balance Sheet and (c) contractual and other
liabilities incurred in the Ordinary Course of Business which are not required
by GAAP to be reflected on a balance sheet.

       

      2.9  Tax
Matters.

       

      (a)  The
Seller has properly filed on a timely basis all Tax Returns that it was required
to file, and all such Tax Returns were true, correct and
complete.  The Seller is not and has never been a member of a group of
corporations with which it has filed (or been required to file) consolidated,
combined or unitary Tax Returns.  The Seller has paid on a
timely basis all Taxes that were due and payable.  The unpaid Taxes of
the Seller for Tax periods through the Most Recent Balance Sheet Date do not
exceed the accruals and reserves for Taxes (excluding accruals and reserves for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the Most Recent Balance Sheet and all unpaid Taxes of the
Seller for all Tax periods commencing after the Most Recent Balance Sheet Date
arose in the Ordinary Course of Business and are of a type and amount
commensurate with Taxes attributable to prior similar periods.  The
Seller (i) has no actual or potential liability under Treasury Regulations
Section 1.1502-6 (or any comparable or similar provision of federal, state,
local or foreign law), as a transferee or successor, pursuant to any contractual
obligation, or otherwise for any Taxes of any person other than the Seller and
(ii) is not a party to or bound by any Tax indemnity, Tax sharing, Tax
allocation or similar agreement.  All Taxes that the Seller was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been properly paid to the appropriate Governmental
Entity.

       

      (b)  The
Seller has delivered or made available to the Buyer (i) complete and correct
copies of all Tax Returns of the Seller relating to Taxes for the Seller’s prior
three taxable years and (ii) complete and correct copies of all private letter
rulings, revenue agent reports, information document requests, notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents submitted by, received by, or agreed to by or on behalf of the Seller
relating to Taxes for all taxable periods for which the statute of limitations
has not yet expired.  The federal income Tax Returns of the Seller
have been audited by the Internal Revenue Service or are closed by the
applicable statute of limitations for all taxable years through the taxable year
specified in Section 2.9(b) of the Disclosure Schedule.  No
examination or audit of any Tax Return of the Seller by any Governmental Entity
is currently in progress or, to the knowledge of the Seller, threatened or
contemplated.  The Seller has not been informed by any jurisdiction
that the jurisdiction believes that the Seller was required to file any Tax
Return that was not filed.  The Seller has not (x) waived any statute
of limitations with respect to Taxes or agreed to extend 

       

      
        
          
          

        

        
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the
period for assessment or collection of any Taxes, (y) requested any extension of
time within which to file any Tax Return, which Tax Return has not yet been
filed, or (z) executed or filed any power of attorney with any taxing
authority.

      

       

      (c)  The
Seller has not made any payment, is not obligated to make any payment, and is
not a party to any agreement that could obligate it to make any payment that may
be treated as an “excess parachute payment” under Section 280G of the Code
(without regard to Sections 280G(b)(4) and 280G(b)(5) of the Code).

       

      (d)  None
of the assets of the Seller (i) is property that is required to be treated as
being owned by any other person pursuant to the provisions of former Section
168(f)(8) of the Internal Revenue Code of 1954, (ii) is “tax-exempt use
property” within the meaning of Section 168(h) of the Code, or (iii) directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code.

       

      (e)  The
Seller does not own any interest in an entity that is characterized as a
partnership for federal income Tax purposes.

       

      (f)  Section
2.9(f) of the Disclosure Schedule sets forth each jurisdiction (other than
United States federal) in which the Seller files, is required to file or has
been required to file a Tax Return or is or has been liable for any Taxes on a
“nexus” basis and each jurisdiction that has sent notices or communications of
any kind requesting information relating to the Seller’s nexus with such
jurisdiction.

       

      (g)  There
are no liens or other encumbrances with respect to Taxes upon any of the assets
or properties of the Seller, other than with respect to Taxes not yet due and
payable.

       

      2.10  Ownership and Condition of
Assets.

       

      (a)  The
Seller is the true and lawful owner and has good title to all of the Acquired
Assets, free and clear of all Security Interests, except as set forth in Section
2.10(a)(i) of the Disclosure Schedule.  Upon execution and delivery by
the Seller to the Buyer of the instruments of conveyance referred to in Section
1.5(b)(iii), the Buyer will become the true and lawful owner of and will receive
good title to the Acquired Assets, free and clear of all Security Interests
other than those set forth in Section 2.10(a)(ii) of the Disclosure
Schedule.

       

      (b)  The
Acquired Assets are sufficient for the conduct of the Seller’s businesses as
presently conducted and as presently proposed to be conducted by the Seller and,
except as set forth in Section 2.10(b) of the Disclosure Schedule, constitute
all assets used by the Seller in such businesses.  Each tangible
Acquired Asset is free from material defects, has been maintained in accordance
with normal industry practice, is in good operating condition and repair
(subject to normal wear and tear) and is suitable for the purposes for which it
presently is used.

       

      (c)  Section
2.10(c) of the Disclosure Schedule lists individually (i) all Acquired
Assets which are fixed assets (within the meaning of GAAP), indicating the cost,
accumulated book depreciation (if any) and the net book value of each such fixed
asset as of the 

       

      
        
          
          

        

        
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Most
Recent Balance Sheet Date, and (ii) all other Acquired Assets of a tangible
nature (other than inventories) whose book value exceeds
$5,000.

      

       

      (d)  Each
item of equipment, motor vehicle and other asset that is being transferred to
the Buyer as part of the Acquired Assets and that the Seller has possession of
pursuant to a lease agreement or other contractual arrangement is in such
condition that, upon its return to its lessor or owner under the applicable
lease or contract (the other terms of such lease or contract having been
satisfied), the obligations of the Seller to such lessor or owner will have been
discharged in full.

       

      2.11  Owned Real
Property.  The Seller owns no real property.

       

      2.12  Real Property
Leases.  Section 2.12 of the Disclosure Schedule lists all
Leases.  The Seller has delivered or made available to the Buyer
complete and accurate copies of the Leases.  With respect to each
Lease:

       

      (a)  such
Lease is legal, valid, binding, enforceable, subject to the Enforceability
Exception, and in full force and effect;

       

      (b)  such
Lease is assignable by the Seller to the Buyer without the consent or approval
of any party (except as set forth in Section 2.4 of the Disclosure
Schedule) and such Lease will continue to be legal, valid, binding, enforceable,
subject to the Enforceability Exception, and in full force and effect
immediately following the Closing in accordance with the terms thereof as in
effect immediately prior to the Closing;

       

      (c)  neither
the Seller nor, to the knowledge of the Seller, any other party, is in breach or
violation of, or default under, any such Lease, and no event has occurred, is
pending or, to the knowledge of the Seller, is threatened, which, after the
giving of notice, with lapse of time, or otherwise, would constitute a breach or
default by the Seller or, to the knowledge of the Seller, any other party under
such Lease;

       

      (d)  there
are no disputes, oral agreements or forbearance programs in effect as to such
Lease;

       

      (e)  the
Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold;

       

      (f)  to
the knowledge of the Seller, all facilities leased or subleased thereunder are
supplied with utilities and other services adequate for the operation of said
facilities; and

       

      (g)  the
Seller is not aware of any Security Interest, easement, covenant or other
restriction applicable to the real property subject to such Lease which would
reasonably be expected to materially impair the current uses or the occupancy by
the Seller of the property subject thereto.

       

      2.13 Intellectual
Property.

       

      
        
          
          

        

        
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      (a)  Seller
Registrations.  Section 2.13(a) of the Disclosure Schedule
lists (i) all Seller Registrations, in each case enumerating specifically the
applicable filing or registration number, title, jurisdiction in which filing
was made or from which registration issued, date of filing or issuance, names of
all current applicant(s) and registered owners(s), as applicable and (ii) all
Unregistered Seller Intellectual Property.  All assignments of Seller
Registrations to the Seller have been properly executed and
recorded.  To the knowledge of the Seller, all Seller Registrations
are valid and enforceable and all issuance, renewal, maintenance and other
payments that are or have become due with respect thereto have been timely paid
by or on behalf of the Seller.

       

      (b)  Prosecution
Matters.  There are no inventorship challenges, opposition or
nullity proceedings or interferences declared, commenced or provoked, or to the
knowledge of the Seller threatened, with respect to any Patent Rights included
in the Seller Registrations.  The Seller has complied with their duty
of candor and disclosure to the United States Patent and Trademark Office and
any relevant foreign patent office with respect to all patent and trademark
applications filed by or on behalf of the Seller and have made no material
misrepresentation in such applications.  The Seller has no knowledge
of any information that would preclude the Seller from having clear title to the
Seller Registrations or affecting the patentability or enforceability of any
Seller Registrations.

       

      (c)  Ownership;
Sufficiency.  Each item of Seller Intellectual Property will be
owned or available for use by the Buyer immediately following the Closing on
substantially identical terms and conditions as it was immediately prior to the
Closing.  Except as listed on Section 2.13(c) of the Disclosure
Schedule, the Seller is the sole and exclusive owner of all Seller Owned
Intellectual Property, free and clear of any Security Interests, and all joint
owners of the Seller Owned Intellectual Property are listed in Section 2.13(c)
of the Disclosure Schedule.  The Seller Intellectual Property
constitutes all Intellectual Property necessary (i) to Exploit the Customer
Offerings in the manner so done currently and contemplated to be done in the
future by the Seller, (ii) to Exploit the Internal Systems as they are currently
used and contemplated to be used in the future by the Seller, and (iii)
otherwise to conduct the Seller’s business in all material respects in the
manner currently conducted and contemplated to be conducted in the future by the
Seller.

       

      (d)  Protection
Measures.  The Seller has taken reasonable measures to protect
the proprietary nature of each item of Seller Owned Intellectual Property, and
to maintain in confidence all trade secrets and confidential information
comprising a part thereof.  The Seller has complied with all
applicable contractual and legal requirements pertaining to information privacy
and security.  No complaint relating to an improper use or disclosure
of, or a breach in the security of, any such information has been made or, to
the knowledge of the Seller, threatened against the Seller.  To the
knowledge of the Seller, there has been no: (i) unauthorized disclosure of any
third party proprietary or confidential information in the possession, custody
or control of the Seller or (ii) breach of the Seller’s security procedures
wherein confidential information has been disclosed to a third
person.  The Seller has actively policed the quality of all goods and
services sold, distributed or marketed under each of its Trademarks and has
enforced adequate quality control measures to ensure that no Trademarks that it
has licensed to others shall be deemed to be abandoned.

       

      
        
          
          

        

        
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      (e)  Infringement by
Seller.  None of the Customer Offerings, or the Exploitation
thereof by the Seller or by any reseller, distributor, customer or user thereof,
or any other activity of the Seller, infringes or violates, or constitutes a
misappropriation of, any Intellectual Property rights of any third
party.  None of the Internal Systems, or the Seller’s past, current or
currently contemplated Exploitation thereof, or any other activity undertaken by
them in connection with their respective businesses, infringes or violates, or
constitutes a misappropriation of, any Intellectual Property rights of any third
party.  No complaint, claim or notice of any of the foregoing
(including any notification that a license under any patent is or may be
required) has been made, or, to the knowledge of the Seller, threatened against
the Seller, and no request or demand for indemnification or defense has been
received by the Seller from any reseller, distributor, customer, user or any
other third party; and the Seller has provided to the Buyer copies of all such
complaints, claims, notices, requests, demands or threats, as well as any legal
opinions, studies, market surveys and analyses relating to any alleged or
potential infringement, violation or misappropriation.

       

      (f)  Infringement of
Rights.  To the knowledge of the Seller, no person (including,
without limitation, any current or former employee or consultant of Seller) is
infringing, violating or misappropriating any of the Seller Owned Intellectual
Property or any Seller Licensed Intellectual Property which is exclusively
licensed to the Seller.  The Seller has provided to the Buyer copies
of all correspondence, analyses and legal opinions concerning the infringement,
violation or misappropriation of any Seller Owned Intellectual Property, and, to
the knowledge of the Seller, no complaints, claims, notices or threats have been
made concerning the infringement, violation or misappropriation of any Seller
Owned Intellectual Property.

       

      (g)  Outbound IP
Agreements.  Section 2.13(g) of the Disclosure Schedule
identifies each license, covenant or other agreement pursuant to which the
Seller has assigned, transferred, licensed, distributed or otherwise granted any
right or access to any person, or covenanted not to assert any right, with
respect to any past, existing or future Seller Intellectual
Property.  Except for the agreements listed in Section 2.13(g) of the
Disclosure Schedule, the Seller has not agreed to indemnify any person against
any infringement, violation or misappropriation of any Intellectual Property
rights with respect to any Customer Offerings or any third party Intellectual
Property rights.  The Seller is not a member of or party to any patent
pool, industry standards body, trade association or other organization pursuant
to the rules of which it is obligated to license any existing or future
Intellectual Property to any person.

       

      (h)  Inbound IP
Agreements.  Section 2.13(h) of the Disclosure Schedule
identifies (i) each item of Seller Licensed Intellectual Property and the
license or agreement pursuant to which the Seller Exploits it (excluding
currently-available, off the shelf software programs that are part of the
Internal Systems and are licensed by the Seller pursuant to “shrink wrap”
licenses, the total fees associated with which are less than $5,000) and (ii)
each agreement, contract, assignment or other instrument pursuant to which the
Seller has obtained any joint or sole ownership interest in or to each item of
Seller Owned Intellectual Property.  No third party inventions,
methods, services, materials, processes or Software are included in or required
to Exploit the Customer Offerings or Internal Systems.  Other than
pursuant to the license agreements listed in Section 2.13(h) of the Disclosure
Schedule, none of the Customer Offerings or Internal Systems includes
“shareware,” “freeware” or other Software or other material that was obtained by
the Seller from third parties  (excluding currently available, off the
shelf 

       

      
        
          
          

        

        
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software
programs that are licensed by the Seller pursuant to “shrink wrap” or Open
Source Materials, the total fees associated with which are less than $5,000)
other than pursuant to the license agreements listed in Section 2.13(h) of the
Disclosure Schedule.

      

       

      (i)  Source Code.  The
Seller has not licensed, distributed or disclosed, and knows of no distribution
or disclosure by others (including its employees and contractors) of, the Seller
Source Code to any person, except pursuant to the agreements listed in Section
2.13(i) of the Disclosure Schedule, and the Seller has taken all reasonable
physical and electronic security measures to prevent disclosure of such Seller
Source Code.  No event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time, or both) will, or would
reasonably be expected to, nor will the consummation of the transactions
contemplated hereby, result in the disclosure or release of such Seller Source
Code by the Seller or its escrow agent(s) or any other person to any third
party.

       

      (j)  Authorship.  Other
than as identified in Section 2.13(j) of the Disclosure Schedule and excluding
any Software identified in Section 2.13(h) of the Disclosure Schedule and any
currently available off the shelf software programs that are licensed by the
Seller pursuant to “shrink wrap” or Open Source Materials, the total fees
associated with which are less than $5,000, all of the Software and
Documentation comprising, incorporated in or bundled with the Customer Offerings
or Internal Systems have been designed, authored, tested and debugged by regular
employees of the Seller within the scope of their employment or by independent
contractors of the Seller who have executed valid and binding agreements
expressly assigning all right, title and interest in such copyrightable
materials to the Seller, waiving their non-assignable rights (including moral
rights) in favor of the Seller and its permitted assigns and licensees, and have
no residual claim to such materials.

       

      (k)  Open Source
Code.  Section 2.13(k) of the Disclosure Schedule lists all
Open Source Materials that the Seller has utilized in any way in the
Exploitation of the Customer Offerings or Internal Systems and describes the
manner in which such Open Source Materials have been utilized, including,
without limitation, whether and how the Open Source Materials have been modified
and/or distributed by the Seller.  Except for the agreements listed in
Section 2.13(k) of the Disclosure Schedule, the Seller has not (i) incorporated
Open Source Materials into, or combined Open Source Materials with, the Customer
Offerings; (ii) distributed Open Source Materials in conjunction with any other
software developed or distributed by the Seller; or (iii) used Open Source
Materials that create, or purport to create, obligations for the Seller with
respect to the Customer Offerings or grant, or purport to grant, to any third
party, any rights or immunities under Intellectual Property rights (including,
but not limited to, using any Open Source Materials that require, as a condition
of Exploitation of such Open Source Materials, that other Software incorporated
into, derived from or distributed with such Open Source Materials be (x)
disclosed or distributed in source code form, (y) licensed for the purpose of
making derivative works, or (z) redistributable at no charge or minimal
charge).

       

      (l)  Employee and Contractor
Assignments.  Each current employee of
the Seller and, to the Seller’s knowledge, each past employee of the Seller
hired after March 2007 has executed a “receipt and acknowledgment” of the
Seller’s “HR Policy Manual” (a copy of which manual the Seller has made
available to the Buyer).

       

      
        
          
          

        

        
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      (m)  Quality.  The
Customer Offerings and the Internal Systems are free from significant defects in
design, workmanship and materials and conform in all material respects to the
written Documentation and specifications therefor.  The Customer
Offerings and the Internal Systems do not contain any disabling device, virus,
worm, back door, Trojan horse or other disruptive or malicious code that may or
are intended to impair their intended performance or otherwise permit
unauthorized access to, hamper, delete or damage any computer system, software,
network or data.  The Seller has not received any warranty claims,
contractual terminations or requests for settlement or refund due to the failure
of the Customer Offerings to meet its specifications or otherwise to satisfy end
user needs or for harm or damage to any third party.

       

      (n)  Support and
Funding.  The Seller has neither sought, applied for nor
received any support, funding, resources or assistance from any federal, state,
local or foreign governmental or quasi-governmental agency or funding source in
connection with the Exploitation of the Customer Offerings, the Internal Systems
or any facilities or equipment used in connection therewith.

       

      2.14  [INTENTIONALLY
LEFT BLANK]

       

      2.15  Contracts.

       

      (a)  Section 2.15
of the Disclosure Schedule lists the following agreements (written or oral) to
which the Seller is a party as of the date of this Agreement:

       

      (i)  any
agreement (or group of related agreements) for the lease of personal property
from or to third parties providing for lease payments in excess of $25,000 per
annum or having a remaining term longer than twelve months;

       

      (ii)  any
agreement (or group of related agreements) for the purchase or sale of products
or for the furnishing or receipt of services (A) which calls for performance
over a period of more than one year, (B) which involves more than the sum of
$25,000, or (C) in which the Seller has granted manufacturing rights, “most
favored nation” pricing provisions or marketing or distribution rights relating
to any products or territory or has agreed to purchase a minimum quantity of
goods or services or has agreed to purchase goods or services exclusively from a
certain party;

       

      (iii)  any
agreement concerning the establishment or operation of a partnership, joint
venture or limited liability company;

       

      (iv)  any
agreement (or group of related agreements) under which it has created, incurred,
assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness
(including capitalized lease obligations) involving more than $25,000 or under
which it has imposed (or may impose) a Security Interest on any of its assets,
tangible or intangible;

       

      (v)  any
agreement for the disposition of any significant portion of the assets or
business of the Seller (other than sales of products in the Ordinary Course of
Business) 

       

      
        
          
          

        

        
          - 16
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or
any agreement for the acquisition of the assets or business of any other entity
(other than purchases of inventory or components in the Ordinary Course of
Business);

      

       

      (vi)  any
agreement concerning exclusivity or confidentiality;

       

      (vii)  any
employment or consulting agreement;

       

      (viii)  any
agreement involving any current or former officer, director or stockholder of
the Seller or an Affiliate thereof;

       

      (ix)  any
agreement under which the consequences of a default or termination would
reasonably be expected to have a Seller Material Adverse Effect;

       

      (x)  any
agreement which contains any provisions requiring the Seller to indemnify any
other party (excluding indemnities contained in agreements for the purchase,
sale or license of products entered into in the Ordinary Course of
Business);

       

      (xi)  any
agreement that could reasonably be expected to have the effect of prohibiting or
impairing the conduct of the business of the Seller or any of its subsidiaries
as currently conducted and as currently proposed to be conducted by the
Seller;

       

      (xii)  any
agreement under which the Seller is restricted from selling, licensing or
otherwise distributing any of its technology or products, or providing services
to, customers or potential customers or any class of customers, in any
geographic area, during any period of time or any segment of the market or line
of business;

       

      (xiii)  any
agreement which would entitle any third party to receive a license or any other
right to Intellectual Property of the Buyer or any of the Buyer’s Affiliates
following the Closing; and

       

      (xiv)  any
other agreement (or group of related agreements) either involving more than
$25,000 or not entered into in the Ordinary Course of Business.

       

      (b)  The
Seller has delivered or made available to the Buyer a complete and accurate copy
of each agreement listed in Section 2.13 or Section 2.15 of the Disclosure
Schedule.  With respect to each agreement so
listed:  (i) the agreement is legal, valid, binding and
enforceable subject to the Enforceability Exception and in full force and
effect; (ii) for those agreements to which the Seller is a party, the
agreement is assignable by the Seller to the Buyer without the consent or
approval of any party (except as set forth in Section 2.4 of the Disclosure
Schedule) and will continue to be legal, valid, binding and enforceable subject
to the Enforceability Exception and in full force and effect immediately
following the Closing in accordance with the terms thereof as in effect
immediately prior to the Closing; and (iii) neither the Seller nor, to the
knowledge of the Seller, any other party, is in breach or violation of, or
default under, any such agreement, and no event has occurred, is pending or, to
the knowledge of the Seller, is threatened, which, after the giving of notice,
with lapse of time, or otherwise, would constitute a breach or default by the
Seller or, to the knowledge of the Seller, any other party under such
agreement.

       

      
        
          
          

        

        
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      2.16  Accounts
Receivable.  All accounts receivable of the Seller reflected on
the Most Recent Balance Sheet (other than those paid since such date) are valid
receivables subject to no setoffs or counterclaims and are current and
collectible (within 90 days after the date on which it first became due and
payable), net of the applicable reserve for bad debts on the Most Recent Balance
Sheet.  A complete and accurate list of the accounts receivable
reflected on the Most Recent Balance Sheet, showing the aging thereof, is
included in Section 2.16 of the Disclosure Schedule.  All accounts
receivable of the Seller that have arisen since the Most Recent Balance Sheet
Date are valid receivables subject to no setoffs or counterclaims and are
collectible (within 90 days after the date on which it first became due and
payable), net of a reserve for bad debts in an amount proportionate to the
reserve shown on the Most Recent Balance Sheet.  The Seller has not
received any written notice from an account debtor stating that any account
receivable in an amount in excess of $5,000 is subject to any contest, claim or
setoff by such account debtor.

       

      2.17  Powers of
Attorney.  There are no outstanding powers of attorney executed
on behalf of the Seller.

       

      2.18  Insurance.  Section 2.18
of the Disclosure Schedule lists each insurance policy (including fire, theft,
casualty, comprehensive general liability, workers compensation, business
interruption, environmental, product liability and automobile insurance policies
and bond and surety arrangements) to which the Seller is a party, all of which
are in full force and effect.  There is no material claim pending
under any such policy as to which coverage has been questioned, denied or
disputed by the underwriter of such policy.  All premiums due and
payable under all such policies have been paid and the Seller is otherwise in
compliance in all material respects with the terms of such
policies.

       

      2.19  Litigation.  There
is no Legal Proceeding which is pending or, to the knowledge of the Seller, has
been threatened in writing against the Seller which (a) seeks either damages in
excess of $1,000 or equitable relief or (b) in any manner challenges or seeks to
prevent, enjoin, alter or delay the transactions contemplated by this
Agreement.  There are no judgments, orders or decrees outstanding
against the Seller.

       

      2.20  Warranties.  No
product or service manufactured, sold, leased, licensed or delivered by the
Seller is subject to any guaranty, warranty, right of return, right of credit or
other indemnity other than (i) the applicable standard terms and conditions of
sale or lease of the Seller, which are set forth in Section 2.20 of the
Disclosure Schedule, and (ii) manufacturers’ warranties for which the Seller has
no liability.  Section 2.20 of the Disclosure Schedule sets forth
the aggregate expenses incurred by the Seller in fulfilling its obligations
under its guaranty, warranty, right of return and indemnity provisions during
each of the fiscal years and the interim period covered by the Financial
Statements; and the Seller does not know of any reason why such expenses should
significantly increase as a percentage of sales in the future.

       

      2.21  Employees.

       

      (a)  Section
2.21 of the Disclosure Schedule contains a list of all employees of the Seller,
along with the position and the annual rate of compensation of each such
person.  No employee of the Seller has executed a non-competition
agreement with the Seller.  Section 2.21 of the Disclosure Schedule
contains a list of all employees of the Seller who are not citizens of


       

      
        
          
          

        

        
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the
United States.  To the knowledge of the Seller, as of the date of this
Agreement, no Transferring Employee has any plans to terminate employment with
the Seller (other than for the purpose of accepting employment with the Buyer
following the Closing) or not to accept employment with the
Buyer.  The Seller is in compliance in all material respects with all
applicable laws relating to the hiring and employment of
employees.

      

       

      (b)  The
Seller is not a party to or bound by any collective bargaining agreement, nor
has any of them experienced any strikes, grievances, claims of unfair labor
practices or other collective bargaining disputes.  The Seller has no
knowledge of any organizational effort made or threatened, either currently or
within the past two years, by or on behalf of any labor union with respect to
employees of the Seller.

       

      2.22  Employee
Benefits.

       

      (a)  Section
2.22(a) of the Disclosure Schedule contains a complete and accurate list of all
Seller Plans.  Complete and accurate copies of (i) all Seller
Plans which have been reduced to writing, (ii) written summaries of all
unwritten Seller Plans, (iii) all related trust agreements, insurance
contracts and summary plan descriptions, and (iv) all annual reports filed
on IRS Form 5500, 5500C or 5500R and (for all funded plans) all plan financial
statements for the last five plan years for each Seller Plan, have been
delivered to the Buyer.

       

      (b)  Each
Seller Plan has been administered in all material respects in accordance with
its terms and each of the Seller and the ERISA Affiliates has in all material
respects met its obligations with respect to each Seller Plan and has made all
required contributions thereto.  The Seller, each ERISA Affiliate and
each Seller Plan are in compliance in all material respects with the currently
applicable provisions of ERISA and the Code and the regulations thereunder
(including Section 4980 B of the Code, Subtitle K, Chapter 100 of the Code and
Sections 601 through 608 and Section 701 et seq. of ERISA).  All
filings and reports as to each Seller Plan required to have been submitted to
the Internal Revenue Service or to the United States Department of Labor have
been duly submitted.  No Seller Plan has assets that include
securities issued by the Seller or any ERISA Affiliate.

       

      (c)  There
are no Legal Proceedings (except claims for benefits payable in the normal
operation of the Seller Plans and proceedings with respect to qualified domestic
relations orders) against or involving any Seller Plan or asserting any rights
or claims to benefits under any Seller Plan that could give rise to any material
liability.

       

      (d)  All
the Seller Plans that are intended to be qualified under Section 401(a) of the
Code have received determination letters from the Internal Revenue Service or is
maintained pursuant to a prototype plan that has received an opinion letter from
the Internal Revenue Service issued in conjunction with the prototype plan, in
each case to the effect that such Seller Plans are qualified and the plans and
the trusts related thereto are exempt from federal income taxes under Sections
401(a) and 501(a), respectively, of the Code, no such determination letter has
been revoked and revocation has not been threatened, and no such Seller Plan has
been amended since the date of its most recent determination letter or
application therefor in any respect, and no act or omission has occurred, that
would adversely affect its qualification or materially increase its
cost.  Each Seller Plan which is required to satisfy Section


       

      
        
          
          

        

        
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401(k)(3)
or Section 401(m)(2) of the Code has been tested for compliance with, and
satisfies the requirements of Section 401(k)(3) and Section 401(m)(2) of the
Code for each plan year ending prior to the Closing Date.

      

       

      (e)  Neither
the Seller nor any ERISA Affiliate has ever maintained an Employee Benefit Plan
subject to Section 412 of the Code or Title IV of ERISA.

       

      (f)  At
no time has the Seller or any ERISA Affiliate been obligated to contribute to
any “multiemployer plan” (as defined in Section 4001(a)(3) of
ERISA).

       

      (g)  There
are no unfunded obligations under any Seller Plan providing benefits after
termination of employment to any employee of the Seller (or to any beneficiary
of any such employee), including but not limited to retiree health coverage and
deferred compensation, but excluding continuation of health coverage required to
be continued under Section 4980B of the Code or other applicable law and
insurance conversion privileges under state law.  The assets of each
Seller Plan which is funded are reported at their fair market value on the books
and records of such Seller Plan.

       

      (h)  No
act or omission has occurred and no condition exists with respect to any Seller
Plan that would subject the Seller or any ERISA Affiliate to (i) any material
fine, penalty, tax or liability of any kind imposed under ERISA or the Code or
(ii) any contractual indemnification or contribution obligation protecting any
fiduciary, insurer or service provider with respect to any Seller
Plan.

       

      (i)  No
Seller Plan is funded by, associated with or related to a “voluntary employee’s
beneficiary association” within the meaning of Section 501(c)(9) of the
Code.

       

      (j)  Each
Seller Plan is amendable and terminable unilaterally by the Seller at any time
without liability or expense to the Seller or such Seller Plan as a result
thereof (other than for benefits accrued through the date of termination or
amendment and reasonable administrative expenses related thereto) and no Seller
Plan, plan documentation or agreement, summary plan description or other written
communication distributed generally to employees by its terms prohibits the
Seller from amending or terminating any such Seller Plan.

       

      (k)  Section
2.22(k) of the Disclosure Schedule discloses each: (i) agreement with any
stockholder, director, executive officer or Transferring Employee of the Seller
(A) the benefits of which are contingent, or the terms of which are
altered, upon the occurrence of a transaction involving the Seller of the nature
of any of the transactions contemplated by this Agreement, (B) providing
any term of employment or compensation guarantee or (C) providing severance
benefits or other benefits after the termination of employment of such director,
executive officer or Transferring Employee; (ii) agreement, plan or
arrangement under which any person may receive payments from the Seller that may
be subject to the tax imposed by Section 4999 of the Code or included in the
determination of such person’s “parachute payment” under Section 280G of the
Code; and (iii) agreement or plan binding the Seller, including any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan, severance benefit plan or Seller Plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions 

       

      
        
          
          

        

        
          - 20
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contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement.

      

       

      (l)  Section
2.22(l) of the Disclosure Schedule sets forth the policy of the Seller with
respect to accrued vacation, accrued sick time and earned time off and the
amount of such liabilities as of January 3, 2009.

       

      (m)  Each
Seller Plan that is a “nonqualified deferred compensation plan” (as defined in
Code Section 409A(d)(1)) has been operated since January 1, 2005 in good faith
compliance with Code Section 409A and IRS Notice 2005-1.  No Seller
Plan that is a “nonqualified deferred compensation plan” has been materially
modified (as determined under Notice 2005-1) after October 3,
2004.  No event has occurred that would be treated by Code Section
409A(b) as a transfer of property for purposes of Code Section 83.  No
stock option or equity unit option granted under any Seller Plan has an exercise
price that has been or may be less than the fair market value of the underlying
stock or equity units (as the case may be) as of the date such option was
granted or has any feature for the deferral of compensation other than the
deferral of recognition of income until the later of exercise or disposition of
such option.

       

      2.23  Environmental
Matters.

       

      (a)  The
Seller has complied with all applicable Environmental Laws.  There is
no pending or, to the knowledge of the Seller, threatened civil or criminal
litigation, written notice of violation, formal administrative proceeding, or
investigation, inquiry or information request by any Governmental Entity,
relating to any Environmental Law involving the Seller.

       

      (b)  The
Seller has no liabilities or obligations arising from the release of any
Materials of Environmental Concern into the environment.

       

      (c)  The
Seller is not a party to or bound by any court order, administrative order,
consent order or other agreement with any Governmental Entity entered into in
connection with any legal obligation or liability arising under any
Environmental Law.

       

      (d)  Set
forth in Section 2.23(d) of the Disclosure Schedule is a list of all documents
(whether in hard copy or electronic form) that contain any environmental
reports, investigations and audits relating to premises currently or previously
owned or operated by the Seller (whether conducted by or on behalf of the Seller
or a third party, and whether done at the initiative of the Seller or directed
by a Governmental Entity or other third party) which were issued or conducted
during the past five years and which the Seller (i) has possession of or (ii)
has knowledge of and access to.  A complete and accurate copy of each
such document has been provided to the Buyer.

       

      (e)  The
Seller is not aware of any material environmental liability of any solid or
hazardous waste transporter or treatment, storage or disposal facility that has
been used by the Seller.

       

      2.24  Legal
Compliance.  The Seller is currently conducting, and has at all
times since January 1, 2004 conducted, its business in material compliance with
each applicable law (including rules and regulations thereunder) of any federal,
state, local or foreign government, or 

       

      
        
          
          

        

        
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any
Governmental Entity, except for any violations or defaults that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Seller Material Adverse Effect.  The Seller has not received any
notice or communication from any Governmental Entity alleging material
noncompliance with any applicable law, rule or regulation.

      

       

      2.25  Customers and
Suppliers.  Section 2.25 of the Disclosure Schedule sets forth
a list of (a) each customer of the Seller during the last full fiscal year or
the interim period through the Most Recent Balance Sheet Date and the amount of
revenues accounted for by such customer during each such period and (b) each
supplier that of any product or service to the Seller.  To the
Seller’s knowledge, no such customer or supplier has indicated within the year
prior to the date of this Agreement that it will stop, or decrease the rate of,
buying products or services or supplying products or services, as applicable, to
the Seller.  No unfilled customer order or commitment obligating the
Seller to process, manufacture or deliver products or perform services will
result in a loss to the Seller upon completion of performance.

       

      2.26  Permits.  Section
2.26 of the Disclosure Schedule sets forth a list of all material Permits issued
to or held by or required to be obtained for the operation of the Seller’s
business by the Seller.  Such listed Permits are the only Permits that
are required for the Seller to conduct its business as presently conducted or as
proposed to be conducted by the Seller, except for those the absence of which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Seller Material Adverse Effect.  Each such Permit
is in full force and effect; the Seller is in compliance in all material
respects with the terms of each such Permit; and, to the knowledge of the
Seller, no suspension or cancellation of such Permit is threatened and there is
no basis for believing that such Permit will not be renewable upon expiration.
Except as set forth in Section 2.26 of the Disclosure Schedule, each such Permit
is assignable by the Seller to the Buyer without the consent or approval of any
party and, to the knowledge of Seller, will continue in full force and effect
immediately following the Closing.

       

      2.27  Certain Business
Relationships With Affiliates.  Except as set forth in Section
2.27 of the Disclosure Schedule, no Affiliate of the Seller (a) owns any
property or right, tangible or intangible, which is used in the business of the
Seller, (b) has any claim or cause of action against the Seller, or
(c) owes any money to, or is owed any money by, the Seller (other than
wages or other compensation owed to employees of the Company or fees payable to
its directors in their capacity as such).  Section 2.27 of the
Disclosure Schedule describes any transactions or relationships between the
Seller and any Affiliate thereof which occurred or have existed since the
beginning of the time period covered by the Financial Statements.

       

      2.28  Brokers’
Fees.  The Seller has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.

       

      2.29  Books and
Records.  The minute books and other similar records of the
Seller contain complete and accurate records of all actions taken at any
meetings of the Seller’s stockholders, Board of Directors or any committee
thereof and of all written consents executed in lieu of the holding of any such
meeting.  The books and records of the Seller accurately reflect the
assets, liabilities, business, financial condition and results of operations of
the Seller and have been maintained in accordance with good business and
bookkeeping practices.  Section 2.29 of 

       

      
        
          
          

        

        
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the
Disclosure Schedule contains a list of all bank accounts and safe deposit boxes
of the Seller and the names of persons having signature authority with respect
thereto or access thereto.

      

       

      2.30  Government
Contracts.

       

      (a)  The
Seller has not been suspended or debarred from bidding on contracts or
subcontracts with any Governmental Entity; no such suspension or debarment has,
to the Seller’s knowledge, been threatened or initiated; and to the Seller’s
knowledge the consummation of the transactions contemplated by this Agreement
will not result in any such suspension or debarment of the Seller or the
Buyer.  To the Seller’s knowledge, the Seller has not been and is not
now being audited or investigated by the United States Government Accounting
Office, the United States Department of Defense or any of its agencies, the
Defense Contract Audit Agency, the contracting or auditing function of any
Governmental Entity with which it is contracting, the United States Department
of Justice, the Inspector General of the United States Governmental Entity, or
any prime contractor with a Governmental Entity; nor, to the knowledge of the
Seller, has any such audit or investigation been threatened.  To the
knowledge of the Seller, there is no valid basis for (i) the suspension or
debarment of the Seller from bidding on contracts or subcontracts with any
Governmental Entity or (ii) any claim (including any claim for return of funds
to the Government) pursuant to an audit or investigation by any of the entities
named in the foregoing sentence.  The Seller has no agreements,
contracts or commitments which require it to obtain or maintain a security
clearance with any Governmental Entity.

       

      (b)  To
the knowledge of the Seller, with respect to any of its contracts or
subcontracts with any Governmental Entity, no basis exists for a termination for
default, a stop work order or any similar action; and the Seller has no reason
to believe that funding may not be provided under any contract or subcontract
with any Governmental Entity in the upcoming federal fiscal year.

       

      2.31  Solvency.  Immediately
after giving effect to the transactions contemplated by this Agreement, the
Seller shall be able to pay its debts as they become due in the ordinary course
of business as proposed to be conducted by the Seller and shall have assets
reasonably calculated at fair market value greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all contingent
liabilities).  Immediately after giving effect to the transactions
contemplated by this Agreement, the Seller shall have adequate capital to carry
on its business as proposed to be conducted by the Seller.  No
transfer of property is being made and no obligation is being incurred in
connection with the transactions contemplated by this Agreement with the intent
to hinder, delay or defraud either present or future creditors of the
Seller.

       

      
        
          
          

        

        
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                  ARTICLE
III

       

                      REPRESENTATIONS AND
WARRANTIES 

                       OF THE BUYER PARENT AND THE
BUYER

       

      Each
of the Buyer Parent and the Buyer jointly and severally represents and warrants
to the Seller that the statements contained in this Article III are true and
correct as of the date of this Agreement and will be true and correct as of the
Closing as though made as of the Closing.

       

      3.1  Organization and Corporate
Power.  Each of the Buyer Parent and the Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  Each of the Buyer Parent and the Buyer has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it.

       

      3.2  Authorization of the
Transaction.  Each of the Buyer Parent and the Buyer has all
requisite power and authority to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder.  The execution and delivery by the Buyer
Parent and the Buyer of this Agreement and the Ancillary Agreements to which it
is a party and the consummation by the Buyer Parent and the Buyer of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Buyer Parent and
the Buyer.  This Agreement has been duly and validly executed and
delivered by the Buyer Parent and the Buyer and constitutes a valid and binding
obligation of the Buyer Parent and the Buyer, enforceable against each in
accordance with its terms subject to the Enforceability Exception.

       

      3.3  Noncontravention.  Neither
the execution and delivery by the Buyer Parent or the Buyer of this Agreement or
the Ancillary Agreements, nor the consummation by the Buyer Parent or the Buyer
of the transactions contemplated hereby or thereby, will (a) conflict with
or violate any provision of the Certificate of Incorporation or bylaws of the
Buyer Parent or the Buyer, (b) require on the part of the Buyer Parent or
the Buyer any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) conflict with, result in breach of, constitute
(with or without due notice or lapse of time or both) a default under, result in
the acceleration of obligations under, create in any party any right to
terminate, modify or cancel, or require any notice, consent or waiver under, any
contract or instrument to which the Buyer Parent or the Buyer is a party or by
which either is bound or to which any of their respective assets is subject,
except for (i) any conflict, breach, default, acceleration, termination,
modification or cancellation which would not adversely affect the consummation
of the transactions contemplated hereby, (ii) any notice, consent or waiver the
absence of which would not adversely affect the consummation of the transactions
contemplated hereby or (iii) the consent of City National Bank as required by
the Amended and Restated Credit and Security Agreement between the Buyer Parent,
City National Bank and the subsidiaries of the Buyer Parent named therein, dated
as of March 6, 2006, as amended (which consent shall be obtained by the Buyer
Parent prior to the Closing), or (d) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Buyer Parent or the Buyer
or any of their respective properties or assets.

       

      
        
          
          

        

        
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      3.4  Brokers’
Fees.  Neither the Buyer nor the Buyer Parent has any liability
or obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.

       

      3.5  Acknowledgement.  Each
of the Buyer and the Buyer Parent acknowledges and agrees that it has conducted
its own independent review and analysis of the business, assets, condition and
operations of the Seller.

       

      3.6  Sufficient
Funds.  The Buyer currently has and, at the Closing will have,
sufficient funds available to consummate the transactions contemplated by this
Agreement and to pay the Purchase Price and all fees and expenses related to the
transactions contemplated by this Agreement for which the Buyer and the Buyer
Parent are responsible hereunder.

       

      ARTICLE
IV

       

      PRE-CLOSING
COVENANTS

       

      4.1  Closing
Efforts.  Each of the Parties shall use its Reasonable Best
Efforts to take all actions and to do all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement, including using
its Reasonable Best Efforts to cause (i) its representations and warranties
to remain true and correct in all material respects through the Closing Date and
(ii) the conditions to the obligations of the other Parties to consummate
the transactions contemplated by this Agreement to be satisfied.  Each
of the Parties agrees that it shall not take any action or fail to take any
action permitted by this Agreement with the knowledge that such action or
failure to take action would result in (i) any of the representations and
warranties of such Party set forth in this Agreement not being true and correct
at the Closing or (ii) any of the conditions to the Closing set forth in
Article V not being satisfied.

       

      4.2  Governmental and Third-Party
Notices and Consents.

       

      (a)  Each
Party shall use its Reasonable Best Efforts to obtain, at its expense, all
waivers, permits, consents, approvals or other authorizations from Governmental
Entities, and to effect all registrations, filings and notices with or to
Governmental Entities, as may be required for such Party to consummate the
transactions contemplated by this Agreement and to otherwise comply with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.

       

      (b)  The
Seller shall use its Reasonable Best Efforts to obtain, at its expense, all such
waivers, consents or approvals from third parties, and to give all such notices
to third parties, as listed or are required to be listed in the Disclosure
Schedule.

       

      (c)  If
(i) any of the Assigned Contracts or other assets or rights constituting
Acquired Assets may not be assigned and transferred by the Seller to the Buyer
(as a result of either the provisions thereof or applicable law) without the
consent or approval of a third party, (ii) the Seller, after using its
Reasonable Best Efforts, is unable to obtain such consent or approval prior to
the Closing and (iii) the Closing occurs nevertheless, then (A) such
Assigned Contracts and/or other assets or rights shall not be assigned and
transferred by the Seller to the Buyer at the Closing and the Buyer shall not
assume the Seller’s liabilities or obligations with 

       

      
        
          
          

        

        
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respect
thereto at the Closing, (B) the Seller shall continue to use its Reasonable Best
Efforts to obtain the necessary consent or approval as soon as practicable after
the Closing, (C) upon the obtaining of such consent or approval, the Buyer and
the Seller shall execute such further instruments of conveyance (in
substantially the form executed at the Closing) as may be necessary to assign
and transfer such Assigned Contracts and/or other assets or rights (and the
associated liabilities and obligations of the Seller) to the Buyer and (D) from
and after the Closing until the assignment of each such Assigned Contract
pursuant to clause (C) above, to the extent permissible under the applicable
Assigned Contract, the Buyer shall perform and fulfill, on a subcontractor or
sublicensee basis, as applicable, the obligations of the Seller to be performed
under such Assigned Contract, and the Seller shall promptly remit to the Buyer
all payments received by it under such Assigned Contract for services performed
during such period.

      

       

      4.3  Stockholder
Approval.

       

      (a)  The
Seller shall use its Reasonable Best Efforts to obtain, as promptly as
practicable, the Requisite Stockholder Approval, either at a special meeting of
stockholders or pursuant to a written stockholder consent, all in accordance
with the applicable requirements of the Oklahoma General Corporation
Act.  In connection with such special meeting of stockholders or
written stockholder consent, the Seller shall provide the Disclosure Statement
to its stockholders entitled to vote on the sale of the Acquired
Assets.  The Buyer agrees to cooperate with the Seller in the
preparation of the Disclosure Statement.  The Seller agrees not to
distribute the Disclosure Statement until the Buyer has had a reasonable
opportunity to review and comment on the Disclosure Statement and the Disclosure
Statement has been approved by the Buyer (which approval may not be unreasonably
withheld, conditioned or delayed).  If the Requisite Stockholder
Approval is obtained by means of a written consent, the Seller shall send,
pursuant to Section 1073.F of the Oklahoma General Corporation Act, a
written notice (together with a copy of the Disclosure Statement) to all
stockholders of the Seller who have not consented in writing and who, if the
action had been taken at a meeting, would have been entitled to notice of the
meeting informing them that the sale of the Acquired Assets as contemplated by
this Agreement was approved by the stockholders of the Seller holding not less
than the minimum number of votes necessary to authorize the sale of the Acquired
Assets in accordance with the Oklahoma General Corporation Act.

       

      (b)  The
Seller, acting through its Board of Directors, shall include in the Disclosure
Statement the unanimous recommendation of its Board of Directors that the
stockholders of the Seller vote in favor of the adoption of this Agreement and
the approval of the transactions contemplated by this Agreement.

       

      (c)  The
Seller shall ensure that the Disclosure Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading (provided that the Seller shall not be responsible for the
accuracy or completeness of any information concerning the Buyer furnished by
the Buyer in writing for inclusion in the Disclosure Statement).

       

      
        
          
          

        

        
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      (d)  The
Buyer shall ensure that any information furnished by the Buyer to the Seller in
writing for inclusion in the Disclosure Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading.

       

      (e)  Tulsa
National Bancshares, Inc. (the “Principal Stockholder”) agrees (i) to vote
all shares of capital stock of the Seller that are beneficially owned by it in
favor of the adoption of this Agreement and the approval of the transactions
contemplated by this Agreement, which is the only stockholder approval required
to approve this Agreement and the transactions contemplated thereby, and
(ii) not to vote any such shares in favor of any other acquisition (whether
by way of merger, consolidation, share, exchange, stock purchase or asset
purchase) of all or a majority of the outstanding capital stock or assets of the
Seller.

       

      4.4  Operation of
Business.  Except as contemplated by this Agreement, during the
period from the date of this Agreement to the Closing, the Seller shall conduct
its operations in the Ordinary Course of Business and in compliance with all
applicable laws and regulations and, to the extent consistent therewith, use its
Reasonable Best Efforts to preserve intact its current business organization,
keep its physical assets in good working condition, keep available the services
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
its goodwill and ongoing business shall not be impaired in any material
respect.  Without limiting the generality of the foregoing, prior to
the Closing, the Seller shall not, without the written consent of the
Buyer:

       

      (a)  issue
or sell any stock or other securities of the Seller or any options, warrants or
other rights to acquire any such stock or other securities (except pursuant to
the conversion or exercise of options, warrants or other convertible securities
outstanding on the date hereof);

       

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

       

      (c)  except
for short-term debt necessary to fund cash flow operations, not to exceed in the
aggregate $100,000, create, incur or assume any indebtedness (including
obligations in respect of capital leases); assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person or entity; or make any loans,
advances or capital contributions to, or investments in, or grant any discounts
to, any other person or entity, in each case other than in the Ordinary Course
of Business;

       

      (d)  enter
into, adopt or amend any Employee Benefit Plan or any employment or severance
agreement or arrangement of the type described in Section 2.22(k) or
(except for normal increases in the Ordinary Course of Business for employees
who are not Affiliates) increase in any manner the compensation or fringe
benefits of, or materially modify the employment terms of, its directors,
officers or employees, generally or individually, or pay any bonus or other
benefit to its directors, officers or employees (except for existing payment
obligations listed in Section 2.22 of the Disclosure Schedule) or hire any
new officers or (except 

       

      
        
          
          

        

        
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in
the Ordinary Course of Business) any new employees or terminate any current
officers or employees (except for cause in the Ordinary Course of
Business);

      

       

      (e)  acquire,
sell, lease, license or dispose of any assets or property (including real
property or any shares or other equity interests in or securities of any
corporation, partnership, association or other business organization or division
thereof), other than purchases and sales of assets in the Ordinary Course of
Business, or form any Subsidiary;

       

      (f)  mortgage
or pledge any of its securities, property or assets or subject any such
securities, property or assets to any Security Interest;

       

      (g)  discharge
or satisfy any Security Interest or pay any obligation or liability other than
in the Ordinary Course of Business;

       

      (h)  amend
its charter, by-laws or other organizational documents in a manner that could
have an adverse effect on the transactions contemplated by this
Agreement;

       

      (i)  change
its accounting methods, principles or practices, except insofar as may be
required by a generally applicable change in GAAP, or make any new elections, or
changes to any current elections, with respect to Taxes that affect the Acquired
Assets;

       

      (j)  enter
into, amend, terminate, take or omit to take any action that would constitute a
violation of or default under, or waive any rights under, any contract,
agreement or Permit of a nature listed or required to be listed in Section 2.12,
Section 2.13, Section 2.15 or Section 2.26 of the Disclosure Schedule, except in
the Ordinary Course of Business, involving payments no greater than $10,000 per
annum and having a term no longer than twelve months;

       

      (k)  make
or commit to make any capital expenditure in excess of $10,000 in the
aggregate;

       

      (l)  institute
or settle any Legal Proceeding;

       

      (m)  engage
in any transaction with any related or affiliated party, except in the Ordinary
Course of Business; or

       

      (n)  agree
in writing or otherwise to take any of the foregoing actions.

       

      4.5  Access to
Information.

       

      (a)  The
Seller shall permit representatives of the Buyer to have full access (at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Seller) to all premises, properties, financial, tax
and accounting records (including the work papers of the Seller’s independent
accountants), contracts, other records and documents, and personnel, of or
pertaining to the Seller for the purpose of performing such inspections and
tests as the Buyer deems necessary or appropriate.

       

      (b)  Within
15 days after the end of each month ending prior to the Closing (or, if later,
within five days after the date of this Agreement), beginning with October 2008,
the 

       

      
        
          
          

        

        
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Seller
shall furnish to the Buyer an unaudited income statement for such month and a
balance sheet as of the end of such month, prepared on a basis consistent with
the Financial Statements; provided, however,
that the Seller shall not be required to deliver the financial information for
December 2008 until the earlier of January 31, 2009 or the
Closing.  Such financial statements shall present fairly the financial
condition and results of operations of the Seller as of the dates thereof and
for the periods covered thereby, and shall be consistent with the books and
records of the Seller.

      

       

      4.6  Exclusivity.

       

      (a)  From
the date of this Agreement until the earlier of (i) the Closing and (ii) the
termination of this Agreement (the “Exclusivity Period”), the Seller and the
Principal Stockholder shall not, and the Seller shall require each of its
officers, directors, employees, representatives and agents not to, directly or
indirectly, (i) initiate, solicit, encourage or otherwise facilitate any
inquiry, proposal, offer or discussion with any party (other than the Buyer)
concerning any merger, reorganization, consolidation, recapitalization, business
combination, liquidation, dissolution, share exchange, sale of stock, sale of
material assets or similar business transaction involving the Seller or any
division of the Seller, (ii) furnish any non-public information concerning
the business, properties or assets of the Seller or any division of the Seller
to any party (other than the Buyer), (iii) engage in discussions or
negotiations with any party (other than the Buyer) concerning any such
transaction, or (iv) enter in any agreement with any party (other than the
Buyer) concerning any such transaction.

       

      (b)  Upon
execution of this Agreement, the Seller and the Principal Stockholder shall
immediately notify any party with which discussions or negotiations of the
nature described in paragraph (a) above were pending that the Seller or the
Principal Stockholder, as applicable, is terminating such discussions or
negotiations.  If, during the Exclusivity Period, the Seller or the
Principal Stockholder receives any inquiry, proposal or offer of the nature
described in paragraph (a) above, the Seller or the Principal Stockholder,
as applicable, shall, within two business days after such receipt, notify the
Buyer of its receipt of such inquiry, proposal or offer.

       

      4.7  FIRPTA Tax
Certificate.  Within 2 days prior to the Closing, the Seller
shall deliver or cause to be delivered to the Buyer a certification that the
Seller is not a foreign person in accordance with the Treasury Regulations under
Section 1445 of the Code.  If the Seller has not provided the
certification described above to the Buyer on or before the Closing Date, the
Buyer shall be permitted to withhold any amount required to be withheld under
Section 1445 of the Code.

       

      4.8  Notice of
Developments.  The Seller will give prompt written notice to
the Buyer of any development occurring after the date of this Agreement, or any
item about which the Seller did not have knowledge on the date of this
Agreement, which causes or reasonably would be expected to cause a breach of any
of the representations and warranties in Article 2.  The Seller will
give prompt written notice to the Buyer if, prior to the Closing, the Seller
becomes aware that any Transferring Employee has any plans to terminate
employment with the Seller (other than for the purpose of accepting employment
with the Buyer following the Closing) or not to accept employment with the
Buyer.  The Seller will give prompt written notice to the


       

      
        
          
          

        

        
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Buyer
if, prior to the Closing, any customer or supplier indicates that it will stop,
or decrease the rate of, buying products or services or supplying products or
services, as applicable, to the Seller.  The Buyer will give prompt
written notice to the Seller of any development occurring after the date of this
Agreement, or any item about which the Buyer did not have knowledge on the date
of this Agreement, which causes or reasonably would be expected to cause a
breach of any of the representations and warranties in Article 3.  No
disclosure by any Party pursuant to this Section 4.8 will be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation
or breach of any representation, warranty, or covenant by any
Party.

      

       

      4.9  Confidentiality.  Except
as may be required by law or regulation or as otherwise expressly contemplated
herein, no Party or their respective Affiliates, employees, agents and
representatives will disclose to any entity or person the existence of this
Agreement, the subject matter or terms hereof or any Confidential Information
concerning the business or affairs of any other Party that it may have acquired
from such Party in the course of pursuing the transactions contemplated hereby
without the prior written consent of the Seller or the Buyer, as the case may
be; provided, however, any Party may disclose any such Confidential Information
as follows:  (a) to such Party’s Affiliates and its or its Affiliates’
employees, lenders, counsel, or accountants, the actions for which the
applicable Party will be responsible; (b) to comply with any applicable law or
order, including without limitation the requirements of the Securities Act, the
Exchange Act and the rules promulgated thereunder, provided that prior to making
any such disclosure the Party making the disclosure notifies the other Party of
any action of which it is aware which may result in disclosure; (c) to the
extent that the Confidential Information is or becomes generally available to
the public through no fault of the Party or its Affiliates making such
disclosure; (d) to the extent that the same information is in the possession (on
a non-confidential basis) of the Party making such disclosure prior to receipt
of such Confidential Information; (e) to the extent that the Party that received
the Confidential Information independently develops the same information without
in any way relying on any Confidential Information; or (f) to the extent that
the same information becomes available to the Party making such disclosure on a
non-confidential basis from a source other than a Party or its Affiliates, which
source, to the disclosing Party’s knowledge, is not prohibited from disclosing
such information by a legal, contractual or fiduciary obligation to the other
Party.  If this Agreement is Terminated, each Party will return or
destroy as much of the Confidential Information concerning the other Party as
the Parties that have provided such information may reasonably
request.

       

      ARTICLE
V

       

      CONDITIONS
TO CLOSING

       

      5.1  Conditions to Obligations of
each Party.  The respective obligations of each Party to
consummate the transactions contemplated by this Agreement to be consummated at
the Closing are subject to the receipt of the Requisite Stockholder Approval of
the sale of the Acquired Assets by the Seller to the Buyer as contemplated by
this Agreement.

       

      5.2  Conditions to Obligations of
the Buyer.  The obligation of the Buyer to consummate the
transactions contemplated by this Agreement to be consummated at the Closing is
subject to the satisfaction of the following additional conditions:

       

      
        
          
          

        

        
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      (a)  the
Seller shall have obtained at its own expense (and shall have provided copies
thereof to the Buyer) all of the consents to assignment listed on Schedule
5.2(a);

       

      (b)  the
representations and warranties of the Seller set forth in the first sentence of
Section 2.1 and in Section 2.3 and any representations and warranties of
the Seller set forth in this Agreement that are qualified as to materiality
shall be true and correct in all respects, and all other representations and
warranties of the Seller set forth in this Agreement shall be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date (in
which case such representations and warranties shall be true and correct, or
true and correct in all material respects, as applicable, as of such
date);

       

      (c)  the
Seller shall have performed or complied with its agreements and covenants
required to be performed or complied with under this Agreement as of or prior to
the Closing;

       

      (d)  no
Legal Proceeding shall be pending or threatened wherein an unfavorable judgment,
order, decree, stipulation or injunction would (i) prevent consummation of
the transactions contemplated by this Agreement, (ii) cause the
transactions contemplated by this Agreement to be rescinded following
consummation or (iii) affect adversely the right of the Buyer to own,
operate or control any of the Acquired Assets, or to conduct the business of the
Seller as currently conducted, following the Closing, and no such judgment,
order, decree, stipulation or injunction shall be in effect;

       

      (e)  the
Seller shall have delivered to the Buyer the Seller Certificate;

       

      (f)  the
Seller shall have delivered to the Buyer a Payment Direction Letter directing
the Seller to pay a portion of the Closing Payment to pay off the capital lease
obligations with respect to the Acquired Assets;

       

      (g)  the
Seller shall have delivered to the Buyer a pro forma balance sheet estimating
the value only of the Acquired Assets and the Assumed Liabilities at the Closing
Date, together with a certificate, signed by the principal financial officer of
the Seller, that such balance sheet represents its good faith estimate of the
value of the Acquired Assets and the Assumed Liabilities at the Closing
Date;

       

      (h)  the
Seller shall have delivered to the Buyer an update, as of the date prior to the
Closing Date, of each list contained in the Disclosure Schedule that lists or
describes Acquired Assets (including the lists set forth in Sections 2.10(c),
2.12, 2.13, 2.15, 2.18, 2.22(a) and 2.26 of the Disclosure
Schedule);

       

      (i)  the
Seller shall have delivered to the Buyer documents evidencing the release or
termination of all Security Interests on the Acquired Assets, and copies of
filed UCC termination statements with respect to all UCC financing statements
evidencing Security Interests;

       

      
        
          
          

        

        
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      (j)  the
Seller shall have delivered to the Buyer a good standing certificate with
respect to the Seller issued by the Secretary of State of the State of
Oklahoma;

       

      (k)  the
Seller shall have provided to the Buyer all necessary documentation of (i)
compliance with any applicable environmental transfer statute and (ii) transfer
of all material Permits required under Environmental Laws;

       

      (l)  the
Buyer shall have received executed Non-Competition Agreements in the form
attached hereto as Exhibit F from the
following officers and employees of Seller: Keith Fulton and Daniel
Payne;

       

      (m)  the
Buyer shall have received from counsel to the Seller an opinion in substantially
the form attached hereto as Exhibit G,
addressed to the Buyer and dated as of the Closing Date;

       

      (n)  the
Buyer shall have entered into an agreement with Tulsa National Bank to provide
automated clearing house processing and other services to be mutually agreed
between the Buyer and Tulsa National Bank;

       

      (o)  the
Seller shall have delivered to the Buyer a waiver in the form attached hereto as
Exhibit H,
executed by Gary Burton; and

       

      (p)  the
Buyer shall have received such other certificates and instruments (including
certificates of good standing of the Seller in its jurisdiction of organization
and the various foreign jurisdictions in which it is qualified, certified
charter documents, certificates as to the incumbency of officers and the
adoption of authorizing resolutions, and a cross-receipt) as it shall reasonably
request in connection with the Closing.

       

      5.3  Conditions to Obligations of
the Seller.  The obligation of the Seller to consummate the
transactions contemplated by this Agreement to be consummated at the Closing is
subject to the satisfaction of the following additional conditions:

       

      (a)  the
representations and warranties of the Buyer Parent and the Buyer set forth in
the first sentence of Section 3.1 and in Section 3.2 and any
representations and warranties of the Buyer Parent and the Buyer set forth in
this Agreement that are qualified as to materiality shall be true and correct in
all respects, and all other representations and warranties of the Buyer Parent
and the Buyer set forth in this Agreement shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date (in
which case such representations and warranties shall be true and correct as of
such date);

       

      (b)  the
Buyer Parent and the Buyer shall have performed or complied with their
respective agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Closing;

       

      (c)  no
Legal Proceeding shall be pending or threatened wherein an unfavorable judgment,
order, decree, stipulation or injunction would (i) prevent consummation


       

      
        
          
          

        

        
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of
the transactions contemplated by this Agreement or (ii) cause the
transactions contemplated by this Agreement to be rescinded following
consummation, and no such judgment, order, decree, stipulation or injunction
shall be in effect;

      

       

      (d)  the
Buyer Parent shall have delivered to the Seller the Buyer Parent Certificate,
and the Buyer shall have delivered to the Seller the Buyer Certificate;
and

       

      (e)  the
Seller shall have received such other certificates and instruments (including
certificates of good standing of the Buyer in its jurisdiction of organization,
certificates as to the incumbency of officers and the adoption of authorizing
resolutions, and a cross-receipt) as it shall reasonably request in connection
with the Closing.

       

      ARTICLE
VI

       

      POST-CLOSING
COVENANTS

       

      6.1  Proprietary
Information.  From and after the Closing, the Seller shall not
disclose or make use of (except to pursue its rights under this Agreement or the
Ancillary Agreements), and shall use its reasonable best efforts to cause all of
its Affiliates not to disclose or make use of, any knowledge, information or
documents of a confidential nature or not generally known to the public with
respect to Acquired Assets, the Seller’s business or the Buyer or its business
(including the financial information, technical information or data relating to
the Seller’s products and names of customers of the Seller), as well as filings
and testimony (if any) presented in the course of any arbitration of a Dispute
pursuant to Section 7.3 and the arbitral award and the Arbitrator’s reasons
therefor relating to the same), except to the extent that such knowledge,
information or documents shall have become public knowledge other than through
improper disclosure by the Seller or an Affiliate.  For a period of
two years following the Closing Date, the Seller shall enforce, for the benefit
of the Buyer, all confidentiality, invention assignments and similar agreements
between the Seller and any other party relating to the Acquired Assets or the
business of the Seller which are not Assigned Contracts; provided that the Buyer
shall pay the reasonable expenses of the Seller in connection with such
enforcement.

       

      6.2  Solicitation and
Hiring.  For a period of two years after the Closing Date, the
Seller shall not, either directly or indirectly (including through an
Affiliate), (a) solicit or attempt to induce any Restricted Employee to
terminate his employment with the Buyer or any subsidiary of the Buyer or (b)
hire or attempt to hire any Restricted Employee; provided, that this
clause (b) shall not apply to (i) any individual whose employment with the
Buyer or a subsidiary of the Buyer has been terminated for a period of six
months or longer or (ii) any Restricted Employee who independently responded to
a general solicitation for employment by Seller not specifically targeting such
Restricted Employee.  For a period of two years following the Closing
Date, the Seller shall enforce, for the benefit of the Buyer, all
non-solicitation and non-hiring assignments and similar agreements between the
Seller and any other party which are not Assigned Contracts; provided that the
Buyer shall pay the reasonable expenses of the Seller in connection with such
enforcement.

       

      6.3  Non-Competition.


       

      
        
          
          

        

        
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      (a)  For
a period of two years after the Closing Date, the Seller shall not, either
directly or indirectly as a stockholder, investor, partner, consultant or
otherwise, (i) design, develop, manufacture, market, sell or license any
product or provide any service anywhere in the world which is competitive with
any product designed, developed (or under development), manufactured, sold or
licensed or any service provided by the Seller within the three-year period
prior to the Closing Date or (ii) engage anywhere in the world in any
business competitive with the business of the Seller as conducted immediately
prior to the Closing; provided, however,
that nothing in this Section 6.3 shall prohibit the Seller from further
developing and engaging in business with respect to the “Method & System to
Accept and Settle Transaction Payments for an Unbanked Customer” concept
currently being developed by the Seller.  For a period of two years
following the Closing Date, the Seller shall enforce, for the benefit of the
Buyer, all non-competition and similar agreements between the Seller and any
other party which are not Assigned Contracts; provided that the Buyer shall pay
the reasonable expenses of the Seller in connection with such
enforcement.

       

      (b)  The
Seller agrees that the duration and geographic scope of the non-competition
provision set forth in this Section 6.3 are reasonable.  In the
event that any court determines that the duration or the geographic scope, or
both, are unreasonable and that such provision is to that extent unenforceable,
the Parties agree that the provision shall remain in full force and effect for
the greatest time period and in the greatest area that would not render it
unenforceable.  The Parties intend that this non-competition provision
shall be deemed to be a series of separate covenants, one for each and every
county of each and every state of the United States of America and each and
every political subdivision of each and every country outside the United States
of America where this provision is intended to be effective.

       

      (c)  The
Seller shall, and shall use its reasonable best efforts to cause its controlled
Affiliates to, refer all inquiries regarding the business, products and services
of the Seller to the Buyer.

       

      6.4  Tax
Matters.  The parties hereto agree that all applicable excise,
sales, transfer, documentary, filing, recordation, ad valorem and other
similar taxes, levies, fees and charges, (including all real estate transfer
taxes and conveyance and recording fees, if any) (“Transfer Taxes”), that may be
imposed upon, or payable or collectible or incurred in connection with the
purchase and sale of the Acquired Assets pursuant to this Agreement shall be
borne by Seller.  At the Closing, the Seller shall provide
for the payment of all such Transfer Taxes.  The Seller shall timely
file all necessary Tax Returns and shall provide evidence to the Buyer of the
payment of such Transfer Taxes and filing of related Tax Returns.  The
parties shall cooperate with each other with respect to the actions set forth in
this Section 6.4 and to minimize any Transfer Tax to the extent that it is
legally permissible.

       

      6.5  Sharing of
Data.

       

      (a)  The
Seller shall have the right for a period of seven years following the Closing
Date to have reasonable access to such books, records and accounts, including
financial and tax information, correspondence, production records, employment
records and other records that are transferred to the Buyer pursuant to the
terms of this Agreement for the limited purposes of concluding its involvement
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preparing
the Draft Closing Balance Sheet and complying with its obligations under
applicable securities, tax, environmental, employment or other laws and
regulations.  The Buyer shall have the right for a period of seven
years following the Closing Date to have reasonable access to those books,
records and accounts, including financial and accounting records (including the
work papers of the Seller’s independent accountants, to the extent the Seller is
able to provide same), tax records, correspondence, production records,
employment records and other records that are retained by the Seller pursuant to
the terms of this Agreement to the extent that any of the foregoing is needed by
the Buyer for the purpose of conducting the business of the Seller after the
Closing and complying with its obligations under applicable securities, tax,
environmental, employment or other laws and regulations.  Neither the
Buyer nor the Seller shall destroy any such books, records or accounts retained
by it without first providing the other Party with the opportunity to obtain or
copy such books, records, or accounts at such other Party’s
expense.

      

       

      (b)  Promptly
upon request by the Buyer made at any time during the seven years following the
Closing Date, the Seller shall authorize the release to the Buyer of all files
pertaining to the Seller, the Acquired Assets or the business or operations of
the Seller held by any federal, state, county or local authorities, agencies or
instrumentalities.

       

      6.6  Use of
Name.  Neither the Seller nor the Principal Stockholder shall
use or permit any controlled Affiliate to use, the name “ChoicePay” or any name
reasonably similar thereto after the Closing Date in connection with any
business related to, competitive with, or an outgrowth of, the business
conducted by the Seller on the date of this Agreement.  Within fifteen
days following the Closing, the Seller shall amend its Certificate of
Incorporation and discontinue the use or display of other materials (including
stationery, business cards and websites) using the “ChoicePay” name to comply
with this provision.

       

      6.7  Cooperation in
Litigation.  From and after the Closing Date, each Party shall
reasonably cooperate with the other in the defense or prosecution of any
litigation or proceeding already instituted or which may be instituted hereafter
against or by such other Party relating to or arising out of the conduct of the
business of the Seller or the Buyer prior to or after the Closing Date (other
than litigation among the Parties and/or their Affiliates arising out of the
transactions contemplated by this Agreement).  The Party requesting
such cooperation shall pay the reasonable out-of-pocket expenses incurred in
providing such cooperation (including reasonable legal fees and disbursements)
by the Party providing such cooperation and by its officers, directors,
employees and agents, but shall not be responsible for reimbursing such Party or
its officers, directors, employees and agents, for their time spent in such
cooperation.

       

      6.8  Collection of Accounts
Receivable.  The Seller agrees that it shall forward promptly
to the Buyer any monies, checks or instruments received by the Seller after the
Closing Date with respect to the accounts receivable purchased by the Buyer from
the Seller pursuant to this Agreement.  The Seller shall provide to
the Buyer such reasonable cooperation as the Buyer may request with respect to
the collection of any such accounts receivable, provided the Buyer pays the
reasonable out-of-pocket expenses of the Seller and its officers, directors and
employees incurred in providing such assistance.  The Seller hereby
grants to the Buyer a power of attorney to endorse and cash any checks or
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which
are received by the Buyer and which relate to accounts receivable purchased by
the Buyer from the Seller.

      

       

      6.9  Employees.  Effective
as of the Closing, the Seller shall terminate the employment of each of its
employees designated on Schedule 6.9 attached
hereto (which may be updated prior to the Closing by the mutual agreement of the
Buyer and the Seller) (the “Transferring Employees”).  The Buyer shall
offer to each Transferring Employee and be permitted to offer to each other
employee of Seller, employment terminable at the will of the Buyer, at such
employee’s current salary and with benefits substantially equivalent to the
benefits provided to current employees of the Buyer Parent.  The
Seller hereby consents to the hiring of any such employees by the Buyer and
waives, with respect to the employment by the Buyer of such employees, any
claims or rights the Seller may have against the Buyer or any such employee
under any non-competition, confidentiality or employment
agreement.  Buyer shall assume the Assumed Severance
Payments.  The Buyer shall not be required to provide any other
benefits (including without limitation health insurance or continuing coverage
under Section 4980B of the Code and the regulations thereunder) to the
Seller’s employees.

       

      6.10  Enforcement of Insurance
Claims.  The Seller hereby assigns to the Buyer the right to
pursue and enforce, and hereby irrevocably appoints the Buyer as its true and
lawful attorney-in-fact with full power in the name of and on behalf of the
Seller for the purpose of pursuing and enforcing, any and all rights of the
Seller under any insurance policies of the Seller which are not assigned to the
Buyer pursuant to this Agreement with respect to any occurrence, claim or loss
(including any product liability claim) which is the subject of an indemnity
obligation by the Seller to the Buyer under Article VII; provided that the Buyer
may not exercise such right or power unless the Seller fails to promptly and
expeditiously pursue and enforce its rights under its insurance policies with
respect to such occurrence, claim or loss.  The power of attorney
conferred upon the Buyer by the Seller pursuant to this Section 6.10 is an
agency coupled with an interest and all authority conferred hereby shall be
irrevocable, and shall not be terminated by the dissolution or the liquidation
of the Seller or any other act of the Seller.

       

      ARTICLE
VII

       

      INDEMNIFICATION

       

      7.1  Indemnification by the
Seller.  From and after the Closing, the Seller shall indemnify
the Buyer and its Affiliates in respect of, and hold the Buyer and its
Affiliates harmless against, any and all Damages incurred or suffered by the
Buyer or any Affiliate thereof resulting from, relating to or
constituting:

       

      (a)  any
breach, as of the date of this Agreement or as of the Closing Date, of any
representation or warranty of the Seller contained in this Agreement, any
Ancillary Agreement or any other agreement or instrument furnished by the Seller
to the Buyer pursuant to this Agreement;

       

      (b)  any
failure to perform any covenant or agreement of the Seller contained in this
Agreement, any Ancillary Agreement or any agreement or instrument furnished by
the Seller to the Buyer pursuant to this Agreement; or

       

      
        
          
          

        

        
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      (c)  any
Retained Liabilities.

       

      7.2  Indemnification by the Buyer
Parent and the Buyer.  From and after the Closing, each of the
Buyer Parent and the Buyer, jointly and severally, shall indemnify the Seller
and its Affiliates in respect of, and hold the Seller and its Affiliates
harmless against, any and all Damages incurred or suffered by the Seller or any
Affiliate thereof resulting from, relating to or constituting:

       

      (a)  any
breach, as of the date of this Agreement or as of the Closing Date, of any
representation or warranty of the Buyer Parent or the Buyer contained in this
Agreement, any Ancillary Agreement or any other agreement or instrument
furnished by the Buyer Parent or the Buyer to the Seller pursuant to this
Agreement;

       

      (b)  any
failure to perform any covenant or agreement of the Buyer Parent or the Buyer
contained in this Agreement, any Ancillary Agreement or any other agreement or
instrument furnished by the Buyer Parent or the Buyer to the Seller pursuant to
this Agreement; or

       

      (c)  any
Assumed Liabilities.

       

      7.3  Indemnification
Claims.

       

      (a)  An
Indemnified Party shall give written notification to the Indemnifying Party of
the commencement of any Third Party Action.  Such notification shall
be given within 15 days after receipt by the Indemnified Party of notice of
such Third Party Action, and shall describe in reasonable detail (to the extent
known by the Indemnified Party) the facts constituting the basis for such Third
Party Action and the amount of the claimed damages; provided, however, that no
delay or failure on the part of the Indemnified Party in so notifying the
Indemnifying Party shall relieve the Indemnifying Party of any liability or
obligation hereunder except to the extent of any damage or liability caused by
or arising out of such failure.  Within 20 days after delivery of such
notification, the Indemnifying Party may, upon written notice thereof to the
Indemnified Party, assume control of the defense of such Third Party Action with
counsel reasonably satisfactory to the Indemnified Party; provided that
(i) the Indemnifying Party may only assume control of such defense if
(A) it acknowledges in writing to the Indemnified Party that any damages,
fines, costs or other liabilities that may be assessed against the Indemnified
Party in connection with such Third Party Action constitute Damages for which
the Indemnified Party shall be indemnified pursuant to this Article VII and
(B) the ad damnum
is less than or equal to the amount of Damages for which the Indemnifying Party
is liable under this Article VII and (ii) the Indemnifying Party may
not assume control of the defense of Third Party Action involving criminal
liability or in which equitable relief is sought against the Indemnified
Party.  If the Indemnifying Party does not, or is not permitted under
the terms hereof to, so assume control of the defense of a Third Party Action,
the Indemnified Party shall control such defense.  The Non-controlling
Party may participate in such defense at its own expense.  The
Controlling Party shall keep the Non-controlling Party advised of the status of
such Third Party Action and the defense thereof and shall consider in good faith
recommendations made by the Non-controlling Party with respect
thereto.  The Non-controlling Party shall furnish the Controlling
Party with such information as it may have with respect to such Third Party
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copies
of any summons, complaint or other pleading which may have been served on such
party and any written claim, demand, invoice, billing or other document
evidencing or asserting the same) and shall otherwise cooperate with and assist
the Controlling Party in the defense of such Third Party Action.  The
reasonable fees and expenses of counsel to the Indemnified Party with respect to
a Third Party Action shall be considered Damages for purposes of this Agreement
if (i) the Indemnified Party controls the defense of such Third Party
Action pursuant to the terms of this Section 7.3(a) or (ii) the Indemnifying
Party assumes control of such defense and the Indemnified Party reasonably
concludes that the Indemnifying Party and the Indemnified Party have conflicting
interests or different defenses available with respect to such Third Party
Action.  The Indemnifying Party shall not agree to any settlement of,
or the entry of any judgment arising from, any Third Party Action without the
prior written consent of the Indemnified Party, which shall not be unreasonably
withheld, conditioned or delayed.  The Indemnified Party shall not
agree to any settlement of, or the entry of any judgment arising from, any such
Third Party Action without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld, conditioned or
delayed.

      

       

      (b)  In
order to seek indemnification under this Article VII, an Indemnified Party shall
deliver a Claim Notice to the Indemnifying Party.  If the Indemnified
Party is the Buyer and is seeking to enforce such claim pursuant to the
Indemnification Escrow Agreement, the Indemnifying Party shall deliver a copy of
the Claim Notice to the Escrow Agent.

       

      (c)  Within
20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver
to the Indemnified Party a Response, in which the Indemnifying Party
shall:  (i) agree that the Indemnified Party is entitled to
receive all of the Claimed Amount (in which case the Response shall be
accompanied by a payment by the Indemnifying Party to the Indemnified Party of
the Claimed Amount, by check or by wire transfer; provided that if the
Indemnified Party is the Buyer and is seeking to enforce such claim pursuant to
the Indemnification Escrow Agreement, the Indemnifying Party and the Indemnified
Party shall deliver to the Escrow Agent, within three days following the
delivery of the Response, a written notice executed by both parties instructing
the Escrow Agent to disburse the Claimed Amount from the Indemnification Escrow
Fund to the Buyer), (ii) agree that the Indemnified Party is entitled to
receive the Agreed Amount (in which case the Response shall be accompanied by a
payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount,
by check or by wire transfer; provided that if the Indemnified Party is the
Buyer and is seeking to enforce such claim pursuant to the Indemnification
Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver
to the Escrow Agent, within three days following the delivery of the Response, a
written notice executed by both parties instructing the Escrow Agent to disburse
the Agreed Amount from the Indemnification Escrow Fund to the Buyer) or
(iii) dispute that the Indemnified Party is entitled to receive any of the
Claimed Amount.

       

      (d)  During
the 30-day period following the delivery of a Response that reflects a Dispute,
the Indemnifying Party and the Indemnified Party shall use good faith efforts to
resolve the Dispute.  If the Dispute is not resolved within such
30-day period, the Indemnifying Party and the Indemnified Party shall discuss in
good faith the submission of the Dispute to binding arbitration, and if the
Indemnifying Party and the Indemnified Party agree in writing to submit the
Dispute to such arbitration, then the provisions of Section 7.3(e) shall become
effective with respect to such Dispute.  The provisions of this
Section 7.3(d) shall not 

       

      
        
          
          

        

        
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obligate
the Indemnifying Party and the Indemnified Party to submit to arbitration or any
other alternative dispute resolution procedure with respect to any Dispute, and
in the absence of an agreement by the Indemnifying Party and the Indemnified
Party to arbitrate any Dispute, such Dispute shall be resolved in a state or
federal court sitting in the State of Delaware, in accordance with Section
10.12.  If the Indemnified Party is the Buyer and is seeking to
enforce the claim that is the subject of the Dispute pursuant to the
Indemnification Escrow Agreement, the Indemnifying Party and the Indemnified
Party shall deliver to the Escrow Agent, promptly following the resolution of
the Dispute (whether by mutual agreement, arbitration, judicial decision or
otherwise), a written notice executed by both parties instructing the Escrow
Agent as to what (if any) portion of the Escrow Fund shall be disbursed from the
Indemnification Escrow Fund to the Buyer and/or the Seller (which notice shall
be consistent with the terms of the resolution of the
Dispute).

      

       

      (e)  If,
as set forth in Section 7.3(d), the Indemnified Party and the Indemnifying
Party agree to submit any Dispute to binding arbitration, the arbitration shall
be conducted by the Arbitrator in accordance with the Commercial Rules in effect
from time to time and the following provisions.

       

      (i)  In
the event of any conflict between the Commercial Rules in effect from time to
time and the provisions of this Agreement, the provisions of this Agreement
shall prevail and be controlling.

       

      (ii)  The
Parties shall commence the arbitration by jointly filing a written submission
with the Southeast Case Management Center of the AAA in accordance with
Commercial Rule 5 (or any successor provision).

       

      (iii)  No
depositions or other discovery shall be conducted in connection with the
arbitration.

       

      (iv)  Not
later than 30 days after the conclusion of the arbitration hearing, the
Arbitrator shall prepare and distribute to the parties a writing setting forth
the arbitral award and the Arbitrator’s reasons therefor.  Any award
rendered by the Arbitrator shall be final, conclusive and binding upon the
Parties, and judgment thereon may be entered and enforced in any court of
competent jurisdiction (subject to Section 10.12), provided that the Arbitrator
shall have no power or authority to grant injunctive relief, specific
performance or other equitable relief.

       

      (v)  The
Arbitrator shall have no power or authority, under the Commercial Rules or
otherwise, to (x) modify or disregard any provision of this Agreement,
including the provisions of this Section 7.3(e), or (y) address or resolve
any issue not submitted by the Parties.

       

      (vi)  In
connection with any arbitration proceeding pursuant to this Agreement, each
Party shall bear its own costs and expenses, except that the fees and costs of
the AAA and the Arbitrator, the costs and expenses of obtaining the facility
where the arbitration hearing is held, and such other costs and expenses as the
Arbitrator may determine to be directly related to the conduct of the
arbitration and appropriately borne jointly by the Parties (which 

       

      
        
          
          

        

        
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shall
not include any Party’s attorneys’ fees or costs, witness fees (if any), costs
of investigation and similar expenses) shall be shared equally by the
Indemnified Party and the Indemnifying Party.

      

       

      (f)  Notwithstanding
the other provisions of this Section 7.3, if a third party asserts (other
than by means of a lawsuit) that an Indemnified Party is liable to such third
party for a monetary or other obligation which may constitute or result in
Damages for which such Indemnified Party may be entitled to indemnification
pursuant to this Article VII, and such Indemnified Party reasonably
determines that it has a valid business reason to fulfill such obligation, then
(i) such Indemnified Party shall be entitled to satisfy such obligation,
without prior notice to or consent from the Indemnifying Party, (ii) such
Indemnified Party may subsequently make a claim for indemnification in
accordance with the provisions of this Article VII, and (iii) such
Indemnified Party shall be reimbursed, in accordance with the provisions of this
Article VII, for any such Damages for which it is entitled to
indemnification pursuant to this Article VII (subject to the right of the
Indemnifying Party to dispute the Indemnified Party’s entitlement to
indemnification, or the amount for which it is entitled to indemnification,
under the terms of this Article VII).

       

      7.4  Survival of Representations
and Warranties.  All representations and warranties that are
covered by the indemnification agreements in Section 7.1(a) and Section 7.2(a)
shall (a) survive the Closing and (b) shall expire on the date two
years following the Closing Date, except that (i) the representations and
warranties set forth in Sections 2.1, 2.3, 3.1 and 3.2 shall survive the
Closing without limitation and (ii) the representations and warranties set
forth in Sections 2.9, 2.22 and 2.23 shall survive until 30 days
following expiration of all statutes of limitation applicable to the matters
referred to therein.  If an Indemnified Party delivers to an
Indemnifying Party, before expiration of a representation or warranty, either a
Claim Notice based upon a breach of such representation or warranty, or an
Expected Claim Notice based upon a breach of such representation or warranty,
then the applicable representation or warranty shall survive until, but only for
purposes of, the resolution of the matter covered by such notice.  If
the legal proceeding or written claim with respect to which an Expected Claim
Notice has been given is definitively withdrawn or resolved in favor of the
Indemnified Party, the Indemnified Party shall promptly so notify the
Indemnifying Party; and if the Indemnified Party has delivered a copy of the
Expected Claim Notice to the Escrow Agent and funds have been retained in escrow
after the Termination Date (as defined in the Indemnification Escrow Agreement)
with respect to such Expected Claim Notice, the Indemnifying Party and the
Indemnified Party shall promptly deliver to the Escrow Agent a written notice
executed by both parties instructing the Escrow Agent to disburse such retained
funds to the Seller in accordance with the terms of the Indemnification Escrow
Agreement.  The rights to indemnification set forth in this Article
VII shall not be affected by (i) any investigation conducted by or on behalf of
an Indemnified Party or any knowledge acquired (or capable of being acquired) by
an Indemnified Party, whether before or after the date of this Agreement or the
Closing Date, with respect to the inaccuracy or noncompliance with any
representation, warranty, covenant or obligation which is the subject of
indemnification hereunder or (ii) any waiver by an Indemnified Party of any
closing condition relating to the accuracy of any representations and warranties
or the performance of or compliance with agreements and covenants.

       

      
        
          
          

        

        
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      7.5  Limitations.

       

      (a)  Notwithstanding
anything to the contrary herein, (i) the aggregate liability of the Seller
for Damages under Section 7.1(a) shall not exceed (1) with respect to Damages
arising out of a breach of the representations and warranties set forth in
Section 2.1 or 2.3, the Purchase Price, and (2) with respect to all other
Damages under Section 7.1(a), $2,500,000, (ii) the Seller shall not be
liable under this Section 7.1(a) unless and until the aggregate Damages for
which it would otherwise be liable under Section 7.1(a) exceed $75,000 (at which
point the Seller shall become liable for the aggregate Damages under Section
7.1(a) in excess of $75,000); provided that the limitations set forth in clause
(ii) of this sentence shall not apply to a claim pursuant to Section 7.1(a)
relating to a breach of the representations and warranties set forth in
Sections 2.1, 2.3, 2.9, 2.23 or 2.28.  For purposes solely of
this Article VII, all representations and warranties of the Seller in
Article II (other than Section 2.7) shall be construed as if the term
“material” and any reference to “Seller Material Adverse Effect” (and variations
thereof) were omitted from such representations and warranties.

       

      (b)  Notwithstanding
anything to the contrary herein, (i) the aggregate liability of the Buyer
for Damages under Section 7.2(a) shall not exceed (1) with respect to Damages
arising out of a breach of the representations and warranties in Section 3.1 or
3.2, the Purchase Price, and (2) with respect to all other Damages under Section
7.2(a), $2,500,000, (ii) the Buyer shall not be liable under this Section 7.2(a)
unless and until the aggregate Damages for which it would otherwise be liable
under Section 7.2(a) exceed $75,000 (at which point the Buyer shall become
liable for the aggregate Damages under Section 7.2(a) in excess of $75,000);
provided that the limitation set forth in clause (ii) of this sentence shall not
apply to a claim pursuant to Section 7.2(a) relating to a breach of the
representations and warranties set forth in Sections 3.1, 3.2 or
3.4.  For purposes solely of this Article VII, all
representations and warranties of the Buyer in Article III shall be
construed as if the term “material” were omitted from such representations and
warranties.

       

      (c)  The
Indemnification Escrow Agreement is intended to secure the indemnification
obligations of the Seller under this Agreement.  However, the rights
of the Buyer under this Article VII shall not be limited to the Escrow Fund nor
shall the Indemnification Escrow Agreement be the exclusive means for the Buyer
to enforce such rights; provided that the Buyer shall not attempt to collect any
Damages directly from the Seller unless there are no remaining funds held in
escrow pursuant to the Indemnification Escrow Agreement.  For the
avoidance of doubt, if there are no remaining funds held in escrow pursuant to
the Escrow Agreement, the Buyer’s remedies shall include a right of setoff
against any payments of Earn-Out Consideration.

       

      (d)  Except
with respect to claims based on fraud, after the Closing, the rights of the
Indemnified Parties under this Article VII, Section 10.13, 10.15 and the
Indemnification Escrow Agreement shall be the exclusive remedy of the
Indemnified Parties with respect to claims resulting from or relating to any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement contained in this Agreement.

       

      
        
          
          

        

        
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      7.6  Treatment of Indemnity
Payments.  Any payments made to an Indemnified Party pursuant
to this Article VII, pursuant to Article VIII or pursuant to the
Indemnification Escrow Agreement shall be treated as an adjustment to the
Purchase Price for tax purposes.

       

      ARTICLE
VIII

       

      TERMINATION

       

      8.1  Termination of
Agreement.  The Parties may terminate this Agreement prior to
the Closing (whether before or after Requisite Stockholder Approval), as
provided below:

       

      (a)  the
Parties may terminate this Agreement by mutual written consent;

       

      (b)  the
Buyer may terminate this Agreement by giving written notice to the Seller in the
event the Seller is in breach of any representation, warranty or covenant
contained in this Agreement, and such breach (i) individually or in
combination with any other such breach, would cause the conditions set forth in
clauses (b) or (c) of Section 5.2 not to be satisfied and (ii) is not cured
within 20 days following delivery by the Buyer to the Seller of written notice
of such breach;

       

      (c)  the
Seller may terminate this Agreement by giving written notice to the Buyer in the
event the Buyer Parent or the Buyer is in breach of any representation, warranty
or covenant contained in this Agreement, and such breach
(i) individually or in combination with any other such breach, would cause
the conditions set forth in clauses (a) or (b) of Section 5.3 not to be
satisfied and (ii) is not cured within 20 days following delivery by the Seller
to the Buyer of written notice of such breach;

       

      (d)  either
Party may terminate this Agreement by giving written notice to the other Party
at any time after the stockholders of the Seller have voted on whether to
approve the sale of the Acquired Assets contemplated by this Agreement in the
event such matter failed to receive the Requisite Stockholder
Approval;

       

      (e)  the
Buyer may terminate this Agreement by giving written notice to the Seller if the
Closing shall not have occurred on or before January 31, 2008 by reason of the
failure of any condition precedent under Section 5.1 or 5.2 (unless the
failure results primarily from a breach by the Buyer Parent or the Buyer of any
representation, warranty or covenant contained in this Agreement);
or

       

      (f)  the
Seller may terminate this Agreement by giving written notice to the Buyer if the
Closing shall not have occurred on or before January 31, 2008 by reason of the
failure of any condition precedent under Section 5.1 or 5.3 (unless the
failure results primarily from a breach by the Seller of any representation,
warranty or covenant contained in this Agreement).

       

      8.2  Effect of
Termination.  If either Party terminates this Agreement
pursuant to Section 8.1, all obligations of the Parties hereunder shall
terminate without any liability of either Party to the other Party (except for
any liability of a Party for breaches of this Agreement).

       

      
        
          
          

        

        
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      ARTICLE
IX

       

      DEFINITIONS

       

      For
purposes of this Agreement, each of the following terms shall have the meaning
set forth below.

       

      “AAA” shall mean the
American Arbitration Association.

       

      “Accountant” shall
mean Grant Thornton LLP.

       

      “Acquired
Assets”  shall mean all of the assets, properties and rights of
the Seller existing as of the Closing other than the Excluded Assets,
including:

       

      (A)  the
name “ChoicePay”;

       

      (B)  all
cash, short-term investments, deposits, bank accounts and other similar
assets;

       

      (C)  all
trade and other accounts receivable and notes and loans receivable that are
payable to the Seller, and all rights to unbilled amounts for products delivered
or services provided, together with any security held by the Seller for the
payment thereof;

       

      (D)  all
inventories of raw materials, work in process, finished goods, supplies,
packaging materials, spare parts and similar items, wherever located, including
consignment inventory and inventory held on order or in transit;

       

      (E)  all
computers, machinery, equipment, tools and tooling, furniture, fixtures,
supplies, leasehold improvements, motor vehicles and other tangible personal
property;

       

      (F)  all
real property, leaseholds and subleaseholds in real property, and easements,
rights-of-way and other appurtenants thereto;

       

      (G)  all
Intellectual Property;

       

      (H)  all
rights under Assigned Contracts;

       

      (I)  all
securities owned by the Seller;

       

      (J)  all
claims, prepayments, deposits, refunds, causes of action, choses in action,
rights of recovery, rights of setoff and rights of recoupment;

       

      (K)  all
Permits;

       

      (L)  all
books, records, accounts, ledgers, files, documents, correspondence, lists
(including customer and prospect lists), employment records, manufacturing and
procedural manuals, Intellectual Property records, sales and promotional
materials, studies, reports and other printed or written materials;
and

       

      
        
          
          

        

        
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      (M)  all
insurance policies of the Seller, as well as all proceeds which may be payable
thereunder.

       

      “Affiliate” shall mean
any affiliate, as defined in Rule 12b-2 under the Securities Exchange Act of
1934.

       

      “Agreed Amount” shall
mean part, but not all, of the Claimed Amount.

       

      “Ancillary Agreements”
shall mean the Closing Working Capital Escrow Agreement, the Indemnification
Escrow Agreement, the bill of sale and other instruments of conveyance referred
to in Section 1.5(b)(iii), and the instrument of assumption and other
instruments referred to in Section 1.5(b)(iv).

       

      “Arbitrator” shall
mean a single arbitrator selected by the Buyer and the Seller in accordance with
the Commercial Rules.

       

      “Assigned Contracts”
shall mean any contracts, agreements or instruments to which the Seller is a
party, including any agreements or instruments securing any amounts owed to the
Seller, any leases or subleases of real property, any employment contracts and
any licenses or sublicenses relating to Intellectual Property.

       

      “Assumed Liabilities”
shall mean all of the following liabilities of the Seller:

       

      (A)  all
liabilities of the Seller set forth on the face of (and not solely in any notes
to) or reserved against on the Most Recent Balance Sheet, to the extent they
have not been paid or discharged prior to the Closing;

       

      (B)  all
liabilities of the Seller which have arisen after the date of the Most Recent
Balance Sheet in the Ordinary Course of Business, including with respect to
frequency and amount, to the extent that they have not been paid or discharged
prior to the Closing; provided that this
clause (b) shall not encompass any such liabilities which relate to any breach
of contract, breach of warranty, tort, infringement or violation of law or which
arose out of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand;

       

      (C)  all
obligations of the Seller arising after the Closing under the Assigned
Contracts, including all liabilities and obligations of the Seller with respect
to the Assumed Severance Payments; and

       

      (D)  all
obligations of the Seller to its customers for the repair, replacement or return
of products manufactured or sold in the Ordinary Course of Business prior to the
Closing, but only to the extent that such obligations are not the subject of
claims or litigation required to be disclosed in Section 2.19 of the
Disclosure Schedule attached hereto.

       

      “Assumed Severance
Payments” shall mean all liabilities and obligations of the Seller with
respect to severance payments (but not any other benefits) pursuant to any
employment agreement set forth on Schedule 2.15 or the Seller’s severance policy
dated March 30, 2007 and provided to Buyer Parent; provided, however, that the
Assumed Severance Payments shall not include any liabilities and obligations
(including severance payments and benefits) under any 

       

      
        
          
          

        

        
          - 44
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employment
agreement or severance policy between the Seller and (i) Robert Kirk and (ii)
Benjamin Peters.

      

       

      “Buyer” shall have the
meaning set forth in the first paragraph of this Agreement.

       

      “Buyer Certificate”
shall mean a certificate of the Buyer to the effect that each of the conditions
specified in clauses (a) through (c) (insofar as such clauses relate to the
Buyer) of Section 5.3 is satisfied in all respects.

       

      “Buyer Parent” shall
have the meaning set forth in the first paragraph of this
Agreement.

       

      “Buyer Parent
Certificate” shall mean a certificate of the Buyer Parent to the effect
that each of the conditions specified in clauses (a) through (c) (insofar as
such clauses relate to the Buyer Parent and the Buyer) of Section 5.3 is
satisfied in all respects.

       

      “CERCLA” shall mean
the federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended.

       

      “Claim Notice” shall
mean written notification which contains (i) a description of the Damages
incurred or reasonably expected to be incurred by the Indemnified Party and the
Claimed Amount of such Damages, to the extent then known, (ii) a statement that
the Indemnified Party is entitled to indemnification under Article VII for such
Damages and a reasonable explanation of the basis therefor, and (iii) a demand
for payment in the amount of such Damages.

       

      “Claimed Amount” shall
mean the amount of any Damages incurred or reasonably expected to be incurred by
the Indemnified Party.

       

      “Closing” shall mean
the closing of the transactions contemplated by this Agreement.

       

      “Closing Date” shall
mean the date two business days after the satisfaction or waiver of all of the
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (excluding the delivery at the Closing of any of the
documents set forth in Article V), or such other date as may be mutually
agreeable to the Parties.

       

      “Closing Payment”
shall have the meaning set forth in Section 1.3.

       

      “Closing Working
Capital” shall mean Current Assets minus Current Liabilities, as shown on
the applicable balance sheet.

       

      “Closing Working Capital
Escrow Agreement” shall mean an escrow agreement in substantially the
form attached hereto as Exhibit
A.

       

      “Closing Working Capital
Escrow Fund” shall mean the fund established pursuant to the Closing
Working Capital Escrow Agreement with the amount paid by the Buyer to the Escrow
Agent at the Closing pursuant to Section 1.4(a).

       

      
        
          
          

        

        
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      “Closing Working Capital
Shortfall” shall mean the deficiency between the Closing Working Capital
as shown on the Final Closing Balance Sheet and zero.

       

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

       

      “Commercial Rules”
shall mean the Commercial Arbitration Rules of the AAA.

       

      “Controlling Party”
shall mean the party controlling the defense of any Third Party
Action.

       

      “Current Assets” shall
mean cash and cash equivalents, accounts receivable and prepaid
expenses.

       

      “Current Liabilities”
shall mean accounts payable and accrued liabilities (other than Retained
Liabilities) and accrued vacation, accrued sick time and earned time off
liability for Transferring Employees only.   For the avoidance of
doubt, Current Liabilities shall not include dividends payable, directors’ fees,
accrued salaries, wages, incentive compensation, accrued vacation, accrued sick
time or earned time off for employees other than Transferring Employees, Taxes
or the current portion of long-term debt.

       

      “Customer Offerings”
shall mean (a) the products (including Software and Documentation) that the
Seller (i) currently develops, manufactures, markets, distributes, makes
available, sells or licenses to third parties, or (ii) has developed,
manufactured, marketed, distributed, made available, sold or licensed to third
parties within the previous six years, or (iii) currently plans to develop,
manufacture, market, distribute, make available, sell or license to third
parties in the future and (b) the services that the Seller (i) currently
provides or makes available to third parties, or (ii) has provided or made
available to third parties within the previous six years, or (iii) currently
plans to provide or make available to third parties in the future.  A
true and complete list of the names of all Customer Offerings is set forth in
Section 2.13(c) of the Disclosure Schedule.

       

      “Damages” shall mean
any and all debts, obligations and other liabilities (whether absolute, accrued,
contingent, fixed or otherwise, or whether known or unknown, or due or to become
due or otherwise), diminution in value, monetary damages, fines, fees,
penalties, interest obligations, deficiencies, losses and expenses (including
amounts paid in settlement, interest, court costs, costs of investigators, fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation), other than (i) any indirect, consequential or
punitive damages (provided that this clause (i) shall not exclude such damages
in the case of a Party seeking indemnification with respect to a Third Party
Action), and (ii) those costs and expenses of arbitration of a Dispute which are
to be shared equally by the Indemnified Party and the Indemnifying Party as set
forth in Section 7.3(e)(vi).

       

      “Disclosure Schedule”
shall mean the disclosure schedule provided by the Seller to the Buyer on the
date hereof and accepted in writing by the Buyer.

       

      “Disclosure Statement
“ shall mean a written proxy or information statement which includes a summary
of this Agreement.

       

      
        
          
          

        

        
          - 46
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      “Dispute” shall mean
the dispute resulting if the Indemnifying Party in a Response disputes its
liability for all or part of the Claimed Amount.

       

      “Documentation” shall
mean printed, visual or electronic materials, reports, white papers,
documentation, specifications, designs, flow charts, code listings,
instructions, user manuals, frequently asked questions, release notes, recall
notices, error logs, diagnostic reports, marketing materials, packaging,
labeling, service manuals and other information describing the use, operation,
installation, configuration, features, functionality, pricing, marketing or
correction of a product, whether or not provided to end user.

       

      “Draft Closing Balance
Sheet” shall mean a consolidated balance sheet reflecting only the
Acquired Assets and Assumed Liabilities as of the Closing (without giving effect
to the transactions contemplated by this Agreement).

       

      “Earn-Out
Consideration” shall mean the aggregate of all Quarterly Earn-Out
Payments.

       

      “Earn-Out Contracts”
shall mean the contracts to be set forth on Schedule 1.8 by
mutual agreement of the Buyer and the Seller at or prior to the
Closing.

       

      “Earn-Out Dispute”
shall have the meaning set forth in Section 1.8(d).

       

      “Earn-Out Dispute
Notice” shall have the meaning set forth in Section 1.8(d).

       

      “Earn-Out Period”
shall have the meaning set forth in Section 1.8(a).

       

      “Employee Benefit
Plan” shall mean any “employee pension benefit plan” (as defined in
Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in
Section 3(1) of ERISA), and any other written or oral plan, agreement or
arrangement involving direct or indirect compensation, including insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock appreciation or
other forms of incentive compensation or post-retirement
compensation.

       

      “Enforceability
Exception” shall have the meaning set forth in Section 2.3.

       

      “Environmental Law”
shall mean any federal, state or local law, statute, rule, order, directive,
judgment, Permit or regulation or the common law relating to the environment,
occupational health and safety, or exposure of persons or property to Materials
of Environmental Concern, including any statute, regulation, administrative
decision or order pertaining to:  (i) the presence of or the
treatment, storage, disposal, generation, transportation, handling,
distribution, manufacture, processing, use, import, export, labeling, recycling,
registration, investigation or remediation of Materials of Environmental Concern
or documentation related to the foregoing; (ii) air, water and noise
pollution; (iii) groundwater and soil contamination; (iv) the release,
threatened release, or accidental release into the environment, the workplace or
other areas of Materials of Environmental Concern, including emissions,
discharges, injections, spills, escapes or dumping of Materials of Environmental
Concern; (v) transfer of interests in or control of real property which may be
contaminated; (vi) community or worker right-to-know disclosures with respect to
Materials of Environmental Concern; (vii) the protection of wild life,
marine life and wetlands, and endangered and threatened species;
(viii) storage tanks, vessels, containers, 

       

      
        
          
          

        

        
          - 47
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abandoned
or discarded barrels and other closed receptacles; and (ix) health and
safety of employees and other persons.  As used above, the term
“release” shall have the meaning set forth in CERCLA.

      

       

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

       

      “ERISA Affiliate”
shall mean any entity which is, or at any applicable time was, a member of
(1) a controlled group of corporations (as defined in Section 414(b) of the
Code), (2) a group of trades or businesses under common control (as defined
in Section 414(c) of the Code), or (3) an affiliated service group (as
defined under Section 414(m) of the Code or the regulations under Section 414(o)
of the Code), any of which includes or included the Seller.

       

      “Escrow Agent” shall
mean an institution to be mutually agreed upon by the Buyer and the Seller prior
to the Closing (such agreement not to be unreasonably withheld by either
Party).

       

      “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

       

      “Excluded Assets”
shall mean the following assets of the Seller:

       

      (A)  the
corporate charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books and
other documents relating to the organization and existence of the Seller as a
corporation;

       

      (B)  all
rights relating to refunds, recovery or recoupment of Taxes;

       

      (C)  any
of the rights of the Seller under this Agreement or under the Ancillary
Agreements; and

       

      (D)  those
assets listed on Schedule 1.1(b)
attached hereto.

       

      “Exclusivity Period”
shall have the meaning set forth in Section 4.6(a).

       

      “Expected Claim
Notice” shall mean a notice that, as a result of a legal proceeding
instituted by or written claim made by a third party, an Indemnified Party
reasonably expects to incur Damages for which it is entitled to indemnification
under Article VII.

       

      “Exploit” shall mean
develop, design, test, modify, make, use, sell, have made, used and sold,
import, reproduce, market, distribute, commercialize, support, maintain, correct
and create derivative works of.

       

      “Financial Statements”
shall mean:

       

      (A)  the
audited consolidated balance sheets and statements of income, changes in
stockholders’ equity and cash flows of the Seller as of the end of and for each
of the years ended December 31, 2007 and 2006; and

       

      
        
          
          

        

        
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      (B)  the
Most Recent Balance Sheet and the unaudited consolidated statements of income,
changes in stockholders’ equity and cash flows for the ten months ended as of
the Most Recent Balance Sheet Date.

       

      “Final Closing Balance
Sheet” shall mean the balance sheet determined pursuant to the procedures
set forth in Section 1.7(b).

       

      “GAAP” shall mean
United States generally accepted accounting principles.

       

      “Governmental Entity”
shall mean any court, arbitrational tribunal, administrative agency or
commission or other governmental or regulatory authority or agency.

       

      “Gross Profit generated by
the Earn-Out Contracts”  shall have the meaning set forth in
Section 1.8(a).

       

      “Indemnification Escrow
Agreement” shall mean an escrow agreement in substantially the form
attached hereto as Exhibit
B.

       

      “Indemnification Escrow
Fund” shall mean the fund established pursuant to the Indemnification
Escrow Agreement with the amount paid by the Buyer to the Escrow Agent at the
Closing pursuant to Section 1.4(b).

       

      “Indemnified Party”
shall mean a party entitled, or seeking to assert rights, to indemnification
under Article VII of this Agreement.

       

      “Indemnifying Party”
shall mean the party from whom indemnification is sought by the Indemnified
Party.

       

      “Intellectual
Property” shall mean the following subsisting throughout the
world:

       

      (A)  Patent
Rights;

       

      (B)  Trademarks
and all goodwill in the Trademarks;

       

      (C)  copyrights,
designs, data and database rights and registrations and applications for
registration thereof, including moral rights of authors;

       

      (D)  mask
works and registrations and applications for registration thereof and any other
rights in semiconductor topologies under the laws of any
jurisdiction;

       

      (E)  inventions,
invention disclosures, statutory invention registrations, trade secrets and
confidential business information, know-how, manufacturing and product processes
and techniques, research and development information, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information, whether patentable or
nonpatentable, whether copyrightable or noncopyrightable and whether or not
reduced to practice; and

       

      
        
          
          

        

        
          - 49
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      (F)  other
proprietary rights relating to any of the foregoing (including remedies against
infringement thereof and rights of protection of interest therein under the laws
of all jurisdictions).

       

      “Intellectual Property
Registrations” means Patent Rights, registered Trademarks, registered
copyrights and designs, mask work registrations and applications for each of the
foregoing.

       

      “Internal Systems”
shall mean the Software and Documentation and the computer, communications and
network systems (both desktop and enterprise-wide), laboratory equipment,
reagents, materials and test, calibration and measurement apparatus used by the
Seller in its business or operations or to develop, manufacture, fabricate,
assemble, provide, distribute, support, maintain or test the Customer Offerings,
whether located on the premises of the Seller or hosted at a third-party
site.  All Internal Systems that are material to the business of the
Seller are listed and described in Section 2.13(c) of the Disclosure
Schedule.

       

      “Lease” shall mean any
lease or sublease pursuant to which the Seller leases or subleases from another
party any real property.

       

      “Legal Proceeding”
shall mean any action, suit, proceeding, claim, arbitration or investigation
before any Governmental Entity or before any arbitrator.

       

      “Materials of Environmental
Concern” shall mean any:  pollutants, contaminants or hazardous
substances (as such terms are defined under CERCLA), pesticides (as such term is
defined under the Federal Insecticide, Fungicide and Rodenticide Act), solid
wastes and hazardous wastes (as such terms are defined under the Resource
Conservation and Recovery Act), chemicals, other hazardous, radioactive or toxic
materials, oil, petroleum and petroleum products (and fractions thereof), or any
other material (or article containing such material) listed or subject to
regulation under any law, statute, rule, regulation, order, Permit, or directive
due to its potential, directly or indirectly, to harm the environment or the
health of humans or other living beings.

       

      “Most Recent Balance
Sheet” shall mean the unaudited consolidated balance sheet of the Seller
as of the Most Recent Balance Sheet Date.

       

      “Most Recent Balance Sheet
Date” shall mean  October 31, 2008.

       

      “Non-controlling
Party” shall mean the party not controlling the defense of any Third
Party Action.

       

      “Objection Deadline
Date” shall mean the date 15 days after delivery by the Buyer to the
Seller of the Draft Closing Balance Sheet.

       

      “Open Source
Materials” means all Software, Documentation or other material that is
distributed as “free software”, “open source software” or under a similar
licensing or distribution model, including, but not limited to, the GNU General
Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public
License (MPL), or any other license described by the Open Source Initiative as
set forth on www.opensource.org.

       

      
        
          
          

        

        
          - 50
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      “Ordinary Course of
Business” shall mean the ordinary course of business consistent with past
custom and practice (including with respect to frequency and
amount).

       

      “Parties” shall mean
the Buyer and the Seller.

       

      “Patent Rights” shall
mean all patents, patent applications, utility models, design registrations and
certificates of invention and other governmental grants for the protection of
inventions or industrial designs (including all related continuations,
continuations-in-part, divisionals, reissues and reexaminations).

       

      “Permits” shall mean
all permits, licenses, registrations, certificates, orders, approvals,
franchises, variances and similar rights issued by or obtained from any
Governmental Entity (including those issued or required under Environmental Laws
and those relating to the occupancy or use of owned or leased real
property).

       

      “Principal
Stockholder” shall have the meaning set forth in Section
4.3(e).

       

      “Purchase Price” shall
mean the Closing Payment plus the Earn-Out Consideration, as they may be
adjusted pursuant to Sections 1.7 and 1.8.

       

      “Quarterly Earn-Out
Payment” shall have the meaning set forth in Section 1.8(a).

       

      “Quarterly Earn-Out
Statement” shall have the meaning set forth in Section
1.8(c).

       

      “Reasonable Best
Efforts” shall mean best efforts, to the extent commercially
reasonable.

       

      “Remaining Earn-Out
Objections” shall have the meaning set forth in Section
1.8(d)(ii).

       

      “Requisite Stockholder
Approval” shall mean the approval of the sale of the Acquired Assets by
the Seller to the Buyer as contemplated by this Agreement by a majority of the
votes represented by the outstanding shares of capital stock of the Seller
entitled to vote thereon.

       

      “Response” shall mean
a written response containing the information provided for in Section
7.3(c).

       

      “Restricted Employee”
shall mean any person who either (i) was an employee of the Buyer on either
the date of this Agreement or the Closing Date or (ii) was an employee of
the Seller on either the date of this Agreement or the Closing Date and received
an employment offer from the Buyer within five business days following the
Closing Date.

       

      “Retained Liabilities”
shall mean any and all liabilities or obligations (whether known or unknown,
absolute or contingent, liquidated or unliquidated, due or to become due and
accrued or unaccrued, and whether claims with respect thereto are asserted
before or after the Closing) of the Seller which are not Assumed
Liabilities.  The Retained Liabilities shall include, without
limitation, all liabilities and obligations of the Seller:

       

      (A)  for
income, transfer, sales, use or other Taxes arising in connection with the
consummation of the transactions contemplated by this Agreement 

       

      
        
          
          

        

        
          - 51
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(including
any income Taxes arising as a result of (i) the transfer by the Seller to the
Buyer of the Acquired Assets or (ii) the Seller having deferred gain on any
“deferred intercompany transaction” (within the meaning of Treasury Regulation
§1.1502-13));

      

       

      (B)  for
costs and expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated by this Agreement;

       

      (C)  under
this Agreement or the Ancillary Agreements;

       

      (D)  for
any Taxes, including deferred taxes or taxes measured by income of the Seller
earned prior to the Closing, any liabilities for federal or state income tax and
FICA taxes of employees of the Seller which the Seller is legally obligated to
withhold, any liabilities of the Seller for employer FICA and unemployment taxes
incurred, and any liabilities of the Seller for sales, use or excise taxes or
customs and duties;

       

      (E)  under
any agreements, contracts, leases or licenses which are listed on Schedule
1.1(b);

       

      (F)  arising
prior to the Closing under the Assigned Contracts, and all liabilities for any
breach, act or omission by the Seller prior to the Closing under any Assigned
Contract;

       

      (G)  for
repair, replacement or return of products manufactured or sold prior to the
Closing;

       

      (H)  arising
out of events, conduct or conditions existing or occurring prior to the Closing
that constitute a violation of or non-compliance with any law, rule or
regulation (including Environmental Laws), any judgment, decree or order of any
Governmental Entity, or any Permit or that give rise to liabilities or
obligations with respect to Materials of Environmental Concern;

       

      (I)  resulting
from the termination of employment of employees of the Seller prior to the
Closing that arose under any federal or state law or under any Employee Benefit
Plan established or maintained by the Seller;

       

      (J)  to
indemnify any person or entity by reason of the fact that such person or entity
was a director, officer, employee, or agent of the Seller or was serving at the
request of the Seller as a partner, trustee, director, officer, employee, or
agent of another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise);

       

      (K)  injury
to or death of persons or damage to or destruction of property occurring prior
to the Closing (including any workers compensation claim);

       

      (L)  for
medical, dental and disability (both long-term and short-term benefits), whether
insured or self-insured, owed to employees or former employees of the Seller
based upon (A) exposure to conditions in existence prior to the Closing or (B)


       

      
        
          
          

        

        
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disabilities
existing prior to the Closing (including any such disabilities which may have
been aggravated following the Closing); and

      

       

      (M)  for
accrued vacation, accrued sick time or earned time off for employees other than
Transferring Employees.

       

      “Securities Act” shall
mean the Securities Act of 1933, as amended.

       

      “Security Interest”
shall mean any mortgage, pledge, security interest, encumbrance, charge or other
lien (whether arising by contract or by operation of law), other than
(i) mechanic’s, materialmen’s, and similar liens, (ii) liens arising
under worker’s compensation, unemployment insurance, social security,
retirement, and similar legislation, (iii) liens on goods in transit incurred
pursuant to documentary letters of credit, (iv) liens for taxes, assessments,
governmental checks or claims that are being disputed in good faith by
appropriate actions conducted diligently and only to the extent that an
appropriate revalue has been made as reflected in the Financial Statements in
each case arising in the Ordinary Course of Business of the Seller and not
material to the Seller.

       

      “Seller” shall have
the meaning set forth in the first paragraph of this Agreement.

       

      “Seller Certificate”
shall mean a certificate to the effect that each of the conditions specified in
Section 5.1 and clauses (a) through (d) (insofar as clause (d) relates to
Legal Proceedings involving the Seller) of Section 5.2 is satisfied in all
respects.

       

      “Seller Intellectual
Property” shall mean shall the Seller Owned Intellectual Property and the
Seller Licensed Intellectual Property.

       

      “Seller Licensed Intellectual
Property” shall mean all Intellectual Property that is licensed to the
Seller by any third party.

       

      “Seller Material Adverse
Effect” shall mean any material adverse change, event, circumstance or
development with respect to, or material adverse effect on, (i) the business,
assets, liabilities, capitalization, condition (financial or other), or results
of operations of the Seller, taken as a whole, or (ii) the ability of the Buyer
to operate the business of the Seller as operated by the Seller immediately
after the Closing. For the avoidance of doubt, the Parties agree that the terms
“material”, “materially” or “materiality” as used in this Agreement with an
initial lower case “m” shall have their respective customary and ordinary
meanings, without regard to the meaning ascribed to Seller Material Adverse
Effect.

       

      “Seller Owned Intellectual
Property” shall mean all Intellectual Property owned or purported to be
owned by the Seller, in whole or in part.

       

      “Seller Plan” shall
mean any Employee Benefit Plan maintained, or contributed to, by the Seller or
any ERISA Affiliate.

       

      “Seller Registrations”
shall mean Intellectual Property Registrations that are registered or filed in
the name of the Seller, alone or jointly with others.

       

      
        
          
          

        

        
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      “Seller Source Code”
shall mean the source code for any Software included in the Customer Offerings
or Internal Systems or other confidential information constituting, embodied in
or pertaining to such Software.

       

      “Software” shall mean
computer software code, applications, utilities, development tools, diagnostics,
databases and embedded systems, whether in source code, interpreted code or
object code form.

       

      “Subsidiary” shall
mean any corporation, partnership, trust, limited liability company or other
non-corporate business enterprise in which the Seller (or another Subsidiary)
holds stock or other ownership interests representing (a) more than 50% of the
voting power of all outstanding stock or ownership interests of such entity or
(b) the right to receive more than 50% of the net assets of such entity
available for distribution to the holders of outstanding stock or ownership
interests upon a liquidation or dissolution of such entity.

       

      “Taxes” shall mean any
and all taxes, charges, fees, duties, contributions, levies or other similar
assessments or liabilities in the nature of a tax, including, without
limitation, income, gross receipts, corporation, ad valorem, premium,
value-added, net worth, capital stock, capital gains, documentary, recapture,
alternative or add-on minimum, disability, estimated, registration, recording,
excise, real property, personal property, sales, use, license, lease, service,
service use, transfer, withholding, employment, unemployment, insurance, social
security, national insurance, business license, business organization,
environmental, workers compensation, payroll, profits, severance, stamp,
occupation, windfall profits, customs duties, franchise and other taxes of any
kind whatsoever imposed by the United States of America or any state, local or
foreign government, or any agency or political subdivision thereof, and any
interest, fines, penalties, assessments or additions to tax imposed with respect
to such items or any contest or dispute thereof.

       

      “Tax Returns” shall
mean any and all reports, returns, declarations, or statements relating to
Taxes, including any schedule or attachment thereto and any related or
supporting work papers or information with respect to any of the foregoing,
including any amendment thereof.

       

      “Third Party Action”
shall mean any suit or proceeding by a person or entity other than a Party for
which indemnification may be sought by a Party under Article VII.

       

      “Total Earn-Out
Amount” shall have the meaning set forth in Section 1.8(b).

       

      “Trademarks” shall
mean all registered trademarks and service marks, logos, Internet domain names,
corporate names and doing business designations and all registrations and
applications for registration of the foregoing, common law trademarks and
service marks and trade dress.

       

      “Transfer Taxes” shall
have the meaning set forth in Section 6.4.

       

      “Transferring
Employees” shall have the meaning set forth in Section 6.9.

       

      
        
          
          

        

        
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      “Unregistered Seller
Intellectual Property” shall mean any unregistered Seller Intellectual
Property, including copyrights in software programs, proprietary processes,
formulae and algorithms that are maintained as trade secrets and unpatented
business processes.

       

      “Unresolved
Objections” shall have the meaning set forth in Section
1.7(b)(ii).

       

      ARTICLE
X

       

      MISCELLANEOUS

       

      10.1  Press Releases and
Announcements.  Neither Party shall issue any press release or
public announcement relating to the subject matter of this Agreement without the
prior written approval of the other Party; provided, however, that either
Party may make any public disclosure it believes in good faith is required by
applicable law, regulation or stock market rule.

       

      10.2  No Third Party
Beneficiaries.  Except as specifically provided in Article VII,
this Agreement shall not confer any rights or remedies upon any person other
than the Parties and their respective successors and permitted
assigns.

       

      10.3  Entire
Agreement.  This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, with respect to the subject matter hereof.

       

      10.4  Succession and
Assignment.  This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. Neither Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided that the Buyer may assign some or all of its
rights, interests and/or obligations hereunder to one or more Affiliates of the
Buyer; provided further that any such assignment by the Buyer shall not relieve
the Buyer of its obligations hereunder.  Any attempted assignment in
contravention of this provision shall be void.

       

      10.5  Counterparts and Facsimile
Signature.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  This Agreement
may be executed by facsimile or portable document file (.pdf)
signature.

       

      10.6  Headings.  The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.

       

      10.7  Notices.  All
notices, requests, demands, claims, and other communications hereunder shall be
in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered four business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery via
a reputable nationwide overnight courier service, in each case to the intended
recipient as set forth below:

       


      
        
          
             

          

           


        

        
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                If to the
      Seller:

                 

                ChoicePay,
      Inc.

                2448
      81st
      Street, Suite 3700

                Tulsa,
      OK  74137

                Attention:  Chief
      Financial Officer

                 

              	
                Copy to (which shall
      not constitute notice):

                 

                Akin
      Gump Strauss Hauer & Feld LLP

                1700
      Pacific Avenue, Suite 4100

                Dallas,
      TX  75201

                Attention:  Joseph
      L. Motes III

                 

              
	
                If to the
      Buyer:

                 

                Tier
      Technologies, Inc.

                10780
      Parkridge Boulevard, Suite 400

                Reston,
      VA 20191

                Attention:
      Chief Financial Officer

              	
                Copy
      to:

                 

                Tier
      Technologies, Inc.

                10780
      Parkridge Boulevard, Suite 400

                Reston,
      VA 20191

                Attention:
      General Counsel

              


      

       

      Either
Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended.  Either Party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set
forth.

       

      10.8  Governing
Law.  This Agreement (including the validity and applicability
of the arbitration provisions of this Agreement, the conduct of any arbitration
of a Dispute, the enforcement of any arbitral award made hereunder and any other
questions of arbitration law or procedure arising hereunder) shall be governed
by and construed in accordance with the internal laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of laws of any jurisdictions other than those of the State of
Delaware.

       

      10.9  Amendments and
Waivers.  The Parties may mutually amend any provision of this
Agreement at any time prior to the Closing; provided, however, that any
amendment effected subsequent to the Requisite Stockholder Approval shall be
subject to any restrictions contained in the Oklahoma General Corporation
Act.  No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by each of the
Parties.  No waiver by either Party of any right or remedy hereunder
shall be valid unless the same shall be in writing and signed by the Party
giving such waiver.  No waiver by either Party with respect to any
default, misrepresentation, or breach of warranty or covenant hereunder shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

       

      10.10  Severability.  Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.  If the final judgment of a court of 

       

      
        
          
          

        

        
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competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

      

       

      10.11  Expenses.  Except
as set forth in Section 1.7, Section 1.8, Article VII, the Closing Working
Capital Escrow Agreement and the Indemnification Escrow Agreement, each Party
shall bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.  The Seller agrees that none of the costs and expenses
(including legal fees and expenses) incurred by it in connection with this
Agreement or the transactions contemplated hereby will be paid until after
the Closing.

       

      10.12  Submission to
Jurisdiction.  Each Party (a) submits to the jurisdiction
of any state or federal court sitting in the State of Delaware in any action or
proceeding arising out of or relating to this Agreement or the Ancillary
Agreements (including any action or proceeding for the enforcement of any
arbitral award made in connection with any arbitration of a Dispute hereunder),
(b) agrees that all claims in respect of such action or proceeding may be
heard and determined in any such court, (c) waives any claim of
inconvenient forum or other challenge to venue in such court, (d) agrees not to
bring any action or proceeding arising out of or relating to this Agreement or
the Ancillary Agreements in any other court and (e) waives any right it may have
to a trial by jury with respect to any action or proceeding arising out of or
relating to this Agreement or the Ancillary Agreements; provided in each case
that, solely with respect to any arbitration of a Dispute, the Arbitrator shall
resolve all threshold issues relating to the validity and applicability of the
arbitration provisions of this Agreement, contract validity, applicability of
statutes of limitations and issue preclusion, and such threshold issues shall
not be heard or determined by such court.  Each Party agrees to accept
service of any summons, complaint or other initial pleading made in the manner
provided for the giving of notices in Section 10.7, provided that nothing
in this Section 10.12 shall affect the right of either Party to serve such
summons, complaint or other initial pleading in any other manner permitted by
law.

       

      10.13  Specific
Performance.  Each Party acknowledges and agrees that the other
Party would be damaged irreparably in the event any of the provisions of this
Agreement (including Sections 6.1, 6.2 and 6.3) are not performed in accordance
with their specific terms or otherwise are breached.  Accordingly,
each Party agrees that the other Party shall be entitled to an injunction or
other equitable relief to prevent breaches of the provisions of this Agreement
and to enforce specifically this Agreement and the terms and provisions hereof
in any action instituted in any court of the United States or any state thereof
having jurisdiction over the Parties and the matter, in addition to any other
remedy to which it may be entitled, at law or in equity. Notwithstanding the
foregoing, the Parties agree that if a Dispute is submitted to arbitration in
accordance with Section 7.3(d) and Section 7.3(e), then the foregoing provisions
of this Section 10.13 shall not apply to such Dispute, and the provisions of
Section 7.3(d) and Section 7.3(e) shall govern availability of injunctive
relief, specific performance or other equitable relief with respect to such
Dispute.

       

      
        
          
          

        

        
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      10.14  Construction.

       

      (a)  The
language used in this Agreement shall be deemed to be the language chosen by the
Parties to express their mutual intent, and no rule of strict construction shall
be applied against either Party.

       

      (b)  Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.

       

      (c)  Any
reference herein to “including” shall be interpreted as “including without
limitation”.

       

      (d)  Any
reference to any Article, Section or paragraph shall be deemed to refer to an
Article, Section or paragraph of this Agreement, unless the context clearly
indicates otherwise.

       

      10.15  Buyer Parent Guaranty;
Acknowledgment.  The Buyer Parent hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, the
complete and timely performance by the Buyer of its obligations under this
Agreement.  The Buyer Parent hereby acknowledges and agrees that the
Seller may proceed directly against the Buyer Parent in the event of
non-performance by the Buyer, for any reason.  The Buyer Parent hereby
waives any circumstance that might constitute a legal or equitable discharge of
a surety or guarantor.

       


      
        
          
             

             

          

           


        

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

       

      TIER
TECHNOLOGIES, INC.

       

       

      By:
/s/ Ronald L. Rossetti            

      Name:
Ronald L. Rossetti            

      Title:
Chief Executive Officer          

       

      COWBOY
ACQUISITION COMPANY

       

       

      By: /s/ Ronald L. Rossetti            

      Name:
Ronald L. Rossetti            

      Title:
Chief Executive Officer          

       

      CHOICEPAY,
INC.

       

       

      By:
/s/ Roger Marshall              

      Name:
Roger Marshall              

      Title:
Chairman                    

      


      


       

      The
following stockholder of the Seller hereby execute this Agreement for the
limited purpose of agreeing to and becoming bound by the provisions of
Sections 4.3(e), 4.6 and 6.6.

       

       

      TULSA
NATIONAL BANCSHARES, INC.

       

      


       

      By:
/s/ Roger Marshall            

      Name:
Roger Marshall                     

      Title:
Chairman                  


      
        
          
             

             

          

           


        

        
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