Document:

Exhibit
10.1

 

November 30, 2007

 

Kleanthis
Xanthopoulos

6305
El Camino Del Teatro

La
Jolla, CA  92037

 

Dear
Kleanthis,

 

It
is my pleasure to extend to you an offer to join Regulus Therapeutics, a joint
venture between Isis Pharmaceuticals, Inc. and Alnylam Pharmaceuticals, as President
and CEO reporting to me. In this position, you will receive an annualized
salary of $400,000 and be eligible for an incentive bonus targeted at 30% of
your base salary (established by your Isis Senior Vice President Level). You
will also receive $25,000 annually as a consultant to Alnylam. In addition, you
will receive a one-time signing bonus of $200,000 ($100,000 to be paid by
Regulus and $100,000 to be paid by Alnylam) payable your first week of employment.

 

As additional incentive,
the management of Isis Pharmaceuticals and Alnylam Pharmaceuticals will each grant you an option to purchase 60,000 shares of common
stock. The exercise price for the Isis options will be the fair market value on
your first day of employment. Isis’ options will be non-qualified options and vest
over a four-year period and contain the other terms described in Isis’ Stock
Option Plan. Alnylam’s stock options will be non-qualified options and will be
subject to the standard terms and conditions of the 2004 Alnylam Stock Option
Plan, and the exercise price will be equal to the closing price of the common
stock on your first day of employment at Isis. These options will vest over
four years at the rate of 25% after twelve months of full-time active employment
and then an additional 6.25% for each additional quarter of full-time active
employment until after four full years when the option is fully vested.

 

Vesting of both Isis and Alnylam options will terminate December 31,
2009 (one year after Regulus becomes a C Corporation) as long as you continue
to be an employee of Isis or Regulus.

 

Provided you are still an
employee of Isis or Regulus on January 1, 2009, you will receive an option to
purchase 5% ownership in Regulus based on a mutually agreed upon valuation at
that time, exercisable at a price reflecting such valuation. If we cannot mutually agree on a valuation we will engage a mutually
acceptable outside expert to do so.

 

Additionally, you will be provided the opportunity to enter into a
severance agreement having the following terms: 
18 months of salary continuation in “change of
control” (e.g. Regulus is bought
by Isis, Alnylam or a 3rd party) resulting in
loss of job, elimination of the job or

 

 

constructive termination. The severance agreement will also provide for
18 months of salary continuation if Isis or Alnylam is bought and you suffer a
job loss, elimination of the job or constructive termination. The severance
agreement will also provide for 18 months of salary continuation
if fired for no cause. The
severance agreement will contain a customary provision releasing Isis, Alnylam
and Regulus from liability. Pending approval of the Isis, Alnylam and Regulus
Boards of Directors, we will provide that your options immediately vest, if one
of the above mentioned salary continuation events occur.

 

While you are an employee of Isis you will have the opportunity to
participate in Isis’ employee benefits program, which includes medical, dental,
life insurance and our 401(k) Retirement Plan and your vacation will begin
accruing at the rate of three (3) weeks per year based on your anniversary date.
If you have any questions, please feel free to contact Shannon Devers at (760)
603-3848.

 

On your first day of employment, please complete and
bring with you the enclosed Employee Confidential Information and Inventions
Agreement. You will also need to bring identification as listed on the back of
the enclosed I-9 form, which is required as proof of eligibility-to-work.

 

If you accept this offer and the terms herein, please sign below and
return the original as soon as possible. You may retain the enclosed signed
copy for your records. We are anticipating a start date of Monday, December 3,
2007.

 

Sincerely,

 

	
  /s/
  Stanley T. Crooke

  	
   

  
	
   

  
	
  Stanley
  T. Crooke

  
	
  Chairman
  and CEO

  
	
  Isis
  Pharmaceuticals, Inc.

  
	
   

  
	
   

  
	
  Accepted
  and agreed:

  
	
   

  
	
  /s/
  Kleanthis Xanthopoulos, PhD

  	
   

  
	
  Kleanthis
  Xanthopoulos, PhDEXHIBIT
10.1

 

 

INTEREST PURCHASE AGREEMENT

By and Among

SHEA DEVELOPMENT CORP.

a Nevada corporation

WOW GLOBAL CORPORATION, LLC

a Pennsylvania limited liability company

SUBHASH CHANDER

and

SARITA
KHATRI

Dated as of November 28, 2007

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1

  	
   

  	
  PURCHASE OF INTERESTS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Purchase of Interests

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Closing Estimates; Closing
  Working Capital Adjustments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
   

  	
  Post-Closing Working
  Capital Adjustments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Closing

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  EBITDA Milestones for
  Escrow Shares; Method Of Payment

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Exemption from
  Registration; Restricted Securities

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  1.7

  	
   

  	
  Legends

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES OF THE COMPANY AND MEMBERS

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Organization and
  Qualification

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Authority Relative to this
  Agreement

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Capitalization

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  No Conflicts

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Books and Records;
  Organizational Documents

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Company Financial
  Statements

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Absence of Changes

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
   

  	
  No Undisclosed Liabilities

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
   

  	
  [Reserved]

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
   

  	
  Taxes

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
   

  	
  Legal Proceedings

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
   

  	
  Compliance With Laws and
  Orders

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
   

  	
  Benefit Plans

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
   

  	
  Title to Property

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  2.15

  	
   

  	
  Intellectual Property

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
   

  	
  Customer Contracts

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  2.17

  	
   

  	
  Insurance

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  2.18

  	
   

  	
  Affiliate Transactions

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  2.19

  	
   

  	
  Employees; Labor Relations

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  2.20

  	
   

  	
  Environmental Matters

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  2.21

  	
   

  	
  Key Suppliers of
  Independent Contractors

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  2.22

  	
   

  	
  Accounts Receivable

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  2.23

  	
   

  	
  Brokers

  	
  21

  

 

i

 

	
  2.24

  	
   

  	
  Foreign Corrupt Practices
  Act

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.25

  	
   

  	
  Approvals

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.26

  	
   

  	
  Leases

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.27

  	
   

  	
  Patriot Act

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.28

  	
   

  	
  Disclosure

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.29

  	
   

  	
  Compliance with Regulation
  D; Shareholders

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  2.30

  	
   

  	
  Certifications

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  2.31

  	
   

  	
  Sufficiency of Assets

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES OF BUYER

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Organization, Standing and
  Power

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Capital Structure of Buyer

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Authority

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  No Conflicts

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Finders and Brokers

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Buyer Consents

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  3.7

  	
   

  	
  SEC Filings

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  3.8

  	
   

  	
  Financial Statements of
  Buyer

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  3.9

  	
   

  	
  Litigation

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  3.10

  	
   

  	
  Disclosure

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  3.11

  	
   

  	
  No Representation

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  CONDUCT PRIOR TO THE
  CLOSING

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Conduct of Business of the
  Company

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  No Solicitation

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  ADDITIONAL AGREEMENTS

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Access to Information

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Confidentiality

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
   

  	
  Expenses

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
   

  	
  Public Disclosure

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  5.5

  	
   

  	
  Approvals

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  5.6

  	
   

  	
  Notification of Certain
  Matters

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  5.7

  	
   

  	
  Additional Documents and
  Further Assurances

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  5.8

  	
   

  	
  Company’s Accountants

  	
  29

  

 

 

	
  5.9

  	
   

  	
  Commercially Reasonable
  Efforts

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  5.10

  	
   

  	
  Agreement to Defend and
  Indemnify

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  5.11

  	
   

  	
  Employment Matters

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  5.12

  	
   

  	
  Certain Tax Matters

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  5.13

  	
   

  	
  Conversion of Shares

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  5.14

  	
   

  	
  Buyer Required Consent

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  5.15

  	
   

  	
  Company Operations

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  5.16

  	
   

  	
  Registration

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  CONDITIONS TO THE
  ACQUISITION

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Conditions to Obligations
  of Each Party to Effect the Transaction

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Additional Conditions to
  Obligations of the Company and Members

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Additional Conditions to
  the Obligations of Buyer

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  INDEMNIFICATION

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Survival of
  Representations, Warranties, Covenants and Agreements

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Indemnification

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Third-Party Claims

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Earn-Out Escrow Offset

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Limitations

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Calculation of Losses

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  TERMINATION, AMENDMENT AND
  WAIVER

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Termination

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
   

  	
  Effect of Termination

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
   

  	
  Non-Solicit

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  MISCELLANEOUS PROVISIONS

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Notices

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Entire Agreement

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
   

  	
  No Acceleration

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
   

  	
  Further Assurances;
  Post-Closing Cooperation

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Amendment

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Extension

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  9.7

  	
   

  	
  Waiver

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  9.8

  	
   

  	
  Third Party Beneficiaries

  	
  42

  

 

 

	
  9.9

  	
   

  	
  Members’ Representative

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  9.10

  	
   

  	
  No Assignment; Binding
  Effect

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.11

  	
   

  	
  Headings

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.12

  	
   

  	
  Invalid Provisions

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.13

  	
   

  	
  Governing Law

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.14

  	
   

  	
  Construction

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.15

  	
   

  	
  Counterparts

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  9.16

  	
   

  	
  Specific Performance

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  DEFINITIONS

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Definitions

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
   

  	
  Construction

  	
  52

  

 

	
  Exhibits

  
	
   

  
	
  Exhibit A — Non-Competition Agreements

  
	
   

  
	
  Exhibit B — General Releases

  
	
   

  
	
  Exhibit C — Escrow Agreement

  
	
   

  
	
  Exhibit D — Employment Agreement

  

 

 

INTEREST PURCHASE AGREEMENT

This
INTEREST PURCHASE AGREEMENT (this “Agreement”) is
made and entered into as of November 28, 2007, by and among Shea Development
Corp., a Nevada corporation (“Buyer”), WOW
Global Corporation, LLC, a Pennsylvania limited liability company (the “Company”), and Subhash Chander (“Chander”)
and Sarita Khatri (“Khatri”)
constituting the holders of all outstanding equity interests of the Company
(Chander and Khatri are each a “Member” and,
collectively, the “Members”).  Capitalized terms used and not otherwise
defined herein have the meanings set forth in Article 10.

RECITALS

A.            WHEREAS, Buyer desires to acquire
all of the outstanding equity interests of the Company (the “Interests”);

B.            WHEREAS, in connection with the
foregoing, the parties hereto desire that each Member enter into a
Non-competition and Non-solicitation Agreement in substantially the forms
attached hereto as Exhibit A (a “Non-Competition
Agreement”) and a General Release Agreement in substantially the
forms attached hereto as Exhibit B (the “General
Release”); and

C.            WHEREAS, in connection with the
purchase and sale of the Interests, the parties desire to make certain
representations, warranties, covenants and agreements and also to prescribe
various conditions to the closing of the purchase and sale of the Interests,
upon the terms and subject to the conditions contained herein.

NOW,
THEREFORE, in consideration of the covenants, promises, representations and
warranties set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:

ARTICLE 1

PURCHASE OF INTERESTS

 

1.1           Purchase of Interests.

(a)           Purchase
of Interests.  Upon the terms and
subject to the conditions set forth in this Agreement, the Members shall sell
to the Buyer and the Buyer shall purchase from the Members all of the Interests
of the Company held by the Members (with 52% of the outstanding Interests held
by Khatri and 48% of the Interests held by Chander), and the Members shall
surrender all incidences of ownership of the outstanding Interests held by the
Members at the Closing, and shall execute appropriate instruments of conveyance
with respect thereto.

(b)           Certain
Definitions.  For purposes of the
Agreement, the following terms shall have the following meanings:

(i)            “Audit Fees” shall mean the reasonable fees and expenses
incurred by Company in connection with the financial review and audits
contemplated by Section 5.8.

(ii)           “Closing Cash Consideration” shall mean an amount equal to
(i) $5,350,000 less (ii) the sum of (a) the Estimated Company Debt, (b)
the Estimated Working Capital Deficit, if applicable, (c) the Closing Date
Payment and (d) the Company Transaction Costs accrued and not paid as of the
Closing and plus (iii) the Estimated Working Capital Surplus, if applicable,
with such Closing Cash Consideration to be held in the Closing Payment Escrow
until the Payment Date.

 

 

(iii)          “Closing Payment Escrow” shall mean that certain escrow
account into which the Closing Cash Consideration and Closing Shares shall be
paid to be held until the Payment Date.

(iv)          “Closing Date Payment” shall mean an aggregate of $100,000
to be paid to the Members at Closing.

(v)           “Payment Date” shall mean January 2, 2008.

(vi)          “Company Debt” shall mean the amount payable by the Company
as debtor, borrower, issuer, guarantor, or surety pursuant to an agreement or
instrument involving or evidencing money borrowed, the advance of credit, or
pursuant to a lease that is required to be capitalized in accordance with GAAP,
including, without limitation, those certain Notes payable to Denice Stokes and
James A. Stokes, Jr.  For the avoidance
of doubt, Company Debt shall not include accounts payable or payroll-related
liabilities.

(vii)        
“Company
Transaction Costs” shall mean all fees, costs and expenses payable
to any brokers, financial advisors, consultants, accountants, attorneys or
other professionals engaged by the Company in connection with negotiation or
consummation of the transactions contemplated by this Agreement and any sales
process undertaken by the Company prior to the Closing, with the exception of
the Audit Fees.

(viii)        “Chander Closing Cash Amount” shall mean a cash amount equal
to the product of (i) 48 percent and (ii) the Closing Cash Consideration.

(ix)           “Khatri Closing Cash Amount” shall mean a cash amount equal
to the product of (i) 52 percent and (ii) the Closing Cash Consideration.

(x)            “Closing Shares” shall mean an aggregate of 4,000,000 shares
of Buyer Common Stock issued to the Members at Closing, to be held in the
Closing Payment Escrow until the Payment Date.

(xi)           “Escrow Shares” shall mean an aggregate of 4,000,000 shares
of Buyer Common Stock issued to the Members at Closing and held in the Earn-Out
Escrow, to be delivered to the Members upon satisfaction of the conditions set
forth in Section 1.5 and subject to the indemnification provisions of Article
7.

(xii)          “Earn-Out Escrow” shall mean that certain escrow account with
the Escrow Agent established by mutual agreement of the parties to hold the
Escrow Shares, subject to delivery to the Members upon satisfaction of the
conditions set forth in Section 1.5 and subject to the indemnification
provisions of Article 7.

(xiii)         “Total Closing Consideration” shall mean the Closing Cash
Amount and the Closing Shares.

(xiv)        “Working Capital Reserve” shall mean $100,000, which amount
shall be placed in the Working Capital Escrow and shall be distributed in
accordance with Section 1.3(c).

 

2

 

(xv)         “Working
Capital Escrow” shall mean that certain escrow account with the Escrow
Agent established by mutual agreement of the parties to hold the Working
Capital Reserve, subject to distribution in accordance with Section 1.3(c).

(xvi)        “Escrow
Agreement” shall mean that certain escrow agreement, in
substantially the form attached hereto as Exhibit C, entered by mutual
agreement of the parties, with the Escrow Agent governing the rights of the
parties hereto with respect to the Closing Payment Escrow, Earn-Out Escrow and
Working Capital Escrow and the distribution of the Closing Payment, Earn-Out
Shares and Working Capital Reserve therefrom.

(xvii)       “Escrow Agent” shall mean U.S. Bank National Association.

(c)           Purchase
Price.  As consideration for the
Interests, subject to the terms and conditions of this Agreement, Buyer shall
pay to the Members the following amounts and forms of consideration
(collectively, the “Purchase Price”):

(i)            At
Closing, by wire transfer of immediately available funds, Buyer shall pay to
the account(s) designated by the Members, $52,000 to Khatri and $48,000 to
Chander, such amounts representing the Members pro rata share of the Closing
Date Payment.

(ii)           At Closing, Buyer shall pay into the Closing Payment
Escrow, by wire transfer of immediately available funds, the Closing Cash
Consideration, with the Escrow Agent to be directed to pay Chander the Chander
Closing Cash Amount and Khatri the Khatri Closing Cash Amount on, and in no
event before, the Payment Date.

(iii)          At Closing, Buyer
shall deliver into the Closing Payment Escrow, the Closing Shares as follows,
with the Escrow Agent to be directed to deliver the Closing Shares to the
Members in such proportion on, and in no event before the Payment Date:

Chander:                        1,920,000
shares

Khatri:                            2,080,000
shares

(iv)          At Closing, Buyer shall deliver the Escrow Shares to the
Earn-Out Escrow, as set forth below, to be held in escrow subject to
satisfaction of the conditions in Section 1.5 and subject to the
indemnification provisions of Article 7:

Chander:                        1,920,000
shares

Khatri:                            2,080,000
shares

(v)           At Closing, by
wire transfer of immediately available funds, Buyer shall deposit the Working
Capital Reserve into the Working Capital Escrow, as set forth below, to be held
in escrow subject to Section 1.3.

(d)           Other Closing
Payments.  At Closing, Buyer shall
pay the Company Debt and the Company Transaction Costs in accordance with a
schedule to be provided to Buyer by Company not later than 3 Business Days
prior to the Closing Date.

 

3

 

1.2           Closing Estimates; Closing Working Capital
Adjustments.

(a)           The parties have contemplated that the
Working Capital of the Company as of the Closing Date (the “Closing Working Capital”) will be Two Hundred
Sixty Thousand Dollars ($260,000) (the “Working Capital Target”).  “Working Capital”
shall mean an amount (which may be positive or negative) equal to the
current assets of the Company less the current liabilities of the Company; provided,
however, that (i) the amount of current liabilities will not include the
Company Debt or the Company Transaction Costs, and (ii) for the avoidance of
doubt, the amount of current liabilities will include the Audit Fees that
remain payable at the Closing and Member’s Portion of Accounting Transition
Taxes.  For purposes of this Agreement, Working
Capital shall be calculated in accordance with the Estimated Closing Balance
Sheet and in accordance with GAAP applied using the same accounting methods,
policies, practices and procedures, with consistent classifications, judgments
and estimation methodology, as were used in preparation of the Audited
Financial Statements.

(b)           No later than three (3) Business Days
prior to the Closing, Company shall cause to be prepared and delivered to Buyer
a certificate signed by the Chief Financial Officer of the Company attaching (i)
a consolidated balance sheet of the Company as of the Closing Date (the “Estimated Closing Balance Sheet”), which shall be
prepared in
accordance with GAAP, applied on a basis consistent with and using the same
practices and methods used in the preparation of the Audited Financial
Statements; (ii) a reasonable and good faith estimate of the Closing Working
Capital (the “Estimated Working Capital”), which
shall be determined so as to be consistent with the Estimated Closing Balance
Sheet; and (iii) a reasonable and good faith estimate of the Company Debt as of
the Closing Date (the “Estimated Company Debt”
and, collectively with the Estimated Closing Balance Sheet and Estimated
Working Capital, the “Closing Estimates”),
which shall be determined so as to be consistent with the Estimated Closing
Balance Sheet.  The Closing Estimates
shall be prepared by the same accounting firm that prepared the Company’s
Nine Month Financial Statements (as defined below) and certified and delivered
by the Company’s Chief Financial Officer. 
Upon delivery
of the Closing Estimates, Company shall provide Buyer and its representatives
with reasonable access to the officers, accounting firm personnel, employees,
agreements and books and records of Company to verify the accuracy of such
amounts.  In the event that Buyer does
not agree with Company’s estimates, Company and Buyer shall negotiate in good
faith to mutually agree as promptly as practicable on acceptable estimates of
the Estimated Working Capital and Estimated Closing Debt.

(c)           Any amount by which the Estimated Working
Capital is less than the Working Capital Target shall be deemed the “Estimated Working Capital Deficit.”  Any amount by which the Estimated Working
Capital is greater than the Working Capital Target shall be deemed the “Estimated Working Capital Surplus.”

1.3           Post-Closing Working Capital Adjustments.

(a)           The
extent by which the Closing Working Capital is less than the Estimated Working
Capital, shall be deemed the “Working Capital Deficit,”  and the extent by which the Closing Working
Capital is greater than the Estimated Working Capital shall be deemed the “Working Capital Surplus.” 
Any Working Capital Deficit or Working Capital Surplus, as the case may
be, shall be paid to the Buyer or the Members, as applicable, in accordance
with Section 1.3(c), below.

 

4

 

(b)           Within
fifteen (15) Business Days following the Closing, the Company shall prepare in
good faith and deliver to the Members’ Representative, as defined below, its
calculation of the Company’s Closing Working Capital.  If the Members’ Representative approves in
writing such calculation of Closing Working Capital (which approval shall not
be unreasonably withheld, or fails to object to such calculation within the
fifteen (15) Business Day period set forth below), such amount shall become the
“Closing Working Capital” for purposes hereof. 
If the Members’ Representative does not approve such calculation, then,
within fifteen (15) Business Days following receipt by the Members’
Representative of the Company’s calculation of Closing Working Capital, the
Members’ Representative shall submit in writing to the Company his calculation
of Closing Working Capital prepared in good faith along with supporting documentation
provided in reasonable detail, and the parties shall cooperate in good faith
until a mutually acceptable calculation of Closing Working Capital is
determined, which shall then become the “Closing Working Capital” for purposes
hereof.  In the event that the parties
are unable to agree on the Closing Working Capital within five (5) Business
Days following notice from the Members’ Representative that he objects to the
Company’s calculation, and the difference between the Members’ Representative’s
calculation and the Company’s calculation is $50,000 or less, then the “Closing
Working Capital” for purposes hereof shall be the average of the Company’s
Closing Working Capital calculation and the Members’ Representative’s Closing
Working Capital calculation.  In the
event that the difference between the Company’s and the Members’ Representative’s
Closing Working Capital estimates exceeds $50,000, the parties shall jointly
select and retain a nationally recognized independent firm of certified public
accountants (the “Accounting Firm”)
to determine the Closing Working Capital for purposes hereof; provided, however,
that the Accounting Firm shall not determine Closing Working Capital to be less
than the Company’s Closing Working Capital estimate pursuant to this paragraph.  The cost of such review by the Accounting
Firm shall be borne equally by Buyer on the one hand and the Members on the
other.  All Closing Working Capital
calculations shall be prepared using the same accounting methods, standards,
policies, practices, classifications and estimation methodologies as were used
to prepare the Audited Financial Statements. 
The Company will consult with the Members’ Representative in the
preparation of its calculation of Closing Working Capital.  Prior to and following the delivery by the
Company of its calculation of Closing Working Capital, the Company shall
provide the Members’ Representative and his advisors reasonable access to the
books and records of the Company, including work papers of its accountants, and
to any employees to the extent necessary for Members’ Representative to prepare
his calculation of Closing Working Capital and to evaluate the Company’s
calculation of Closing Working Capital.

(c)             Following the determination of Closing
Working Capital in accordance with the procedures set forth above, (i) the
Escrow Agent shall be directed by joint written instruction of the Members’
Representative and the Buyer to pay the amount of the Working Capital Deficit,
if any, to the Buyer  out of the Working
Capital Reserve within five (5) Business Days of such determination, and, to
the extent the Working Capital Deficit exceeds the Working Capital Reserve (the
“Deficit Shortfall”), the Members shall
forfeit, and the Escrow Agent shall return to Buyer to retire and cancel, that
number of Escrow Shares equal in value on the date of such determination, to
the Deficit Shortfall; and (ii) the Buyer shall pay the amount of the Working
Capital Surplus, if any, to the Members on a pro rata basis in accordance with
their respective equity interests in the Company within five (5) Business Days
of such determination.  Following the
deduction of the Working Capital Deficit, if any, from the Working Capital
Reserve, any remaining amount, or the entire Working Capital Reserve in the
event there is no Working Capital Deficit, shall be distributed by the Escrow
Agent to the Members on a pro rata basis in accordance with their respective
former equity interests in the Company within five (5) Business Days from the
Working Capital Escrow.

1.4           Closing.  Subject to the terms and conditions of this
Agreement, the closing of the purchase and sale of the Interests (the “Closing”) will take place at the offices of O’Melveny &
Myers LLP, 2765 Sand Hill Road, Menlo Park, CA 94025 or at such other place as
parties mutually agree, at 10:00 a.m. local time on the second Business Day
after the day on which the last of the closing conditions set forth in Article
6 below has been satisfied or waived, or such other date as parties
mutually agree upon in writing (the “Closing Date”);
provided, however, that the effective time of the Closing shall
be deemed to be 11:59:59 p.m on the Closing Date.  On the Closing Date, Buyer will deliver the
Total Closing Consideration to the Members in accordance with Section 1.1(c);
and Company, Buyer and the Members will cross-deliver the certificates and
other documents and instruments to be cross-delivered pursuant to Article 6
below.

 

5

 

1.5           EBITDA
Milestones for Escrow Shares; Method Of Payment.  In accordance with Section 1.1(c), the
Escrow Agent shall, if earned by the Company pursuant to the terms of this Section
1.5, be directed by joint written instruction of the Members’
Representative and Buyer to deliver to the Members, on a pro rata basis, the
applicable number of Escrow Shares, if any, subject in all cases to Article
7.  The Escrow Shares shall be
delivered by the Escrow Agent to Members or Buyer subject to and conditioned
upon satisfaction of the following events:

(a)           For
the twelve-month period ending December 31, 2008 (“Calendar
Year 1”):

(i)            If
the Company achieves EBITDA in an amount of at least $2,000,000 (the “2008 EBITDA Target”) during Calendar Year 1, then the Escrow
Agent shall be directed to deliver, pursuant to the terms of the Escrow
Agreement, 1,333,334 of the Escrow Shares (as adjusted for any stock splits,
stock dividends, reverse splits, reorganization or otherwise) (the “2008 Escrow Shares”) to the Members, on a pro rata basis, in
accordance with the terms of this Section 1.5.

(ii)           If
the Company’s EBITDA for Calendar Year 1 is at least $1,500,000 (the “2008 EBITDA Floor”) but is less
than the 2008 EBITDA Target, for each $1.00 by which the Company’s Calendar
Year 1 EBITDA falls below the 2008 EBITDA Target two (2) shares of the 2008
Escrow Shares shall be forfeited by the Members and shall be returned by the
Escrow Agent to the Buyer to be retired and canceled.  Any remaining portion of the 2008 Escrow Shares
shall be delivered by the Escrow Agent to the Members, on a pro rata basis, in
accordance with the terms of this Section 1.5 and the Escrow Agreement.

(iii)          If
the Company fails to achieve the 2008 EBITDA Floor, the  2008 Escrow Shares shall be forfeited by the
Members and shall be returned by the Escrow Agent to the Buyer to be retired
and canceled.

(b)           For the twelve-month period ending December 31, 2009 (“Calendar Year 2”):

(i)            If
the Company achieves EBITDA in an amount of at least $2,500,000 (the “2009 EBITDA Target”) during Calendar Year 2, then the Escrow
Agent shall be directed to deliver, pursuant to the terms of the Escrow
Agreement, 1,333,333 of the Escrow Shares (as adjusted for any stock splits,
stock dividends, reverse splits, reorganization or otherwise) (the “2009 Escrow Shares”) to the Members, on a pro rata basis, in
accordance with the terms of this Section 1.5.

(ii)           If
the Company’s EBITDA for Calendar Year 2 is at least $2,000,000 (the “2009 EBITDA Floor”) but is less
than the 2009 EBITDA Target, for each $1.00 by which the Company’s Calendar
Year 2 EBITDA falls below the 2009 EBITDA Target two (2) shares of the 2009
Escrow Shares shall be forfeited by the Members and shall be returned by the
Escrow Agent to the Buyer to be retired and canceled.  Any remaining portion of the 2009 Escrow
Shares shall be delivered by the Escrow Agent to the Members, on a pro rata
basis, in accordance with the terms of this Section 1.5 and the Escrow
Agreement.

(iii)          If the Company
fails to achieve the 2009 EBITDA Floor, the 
2009 Escrow Shares shall be forfeited by the Members and shall be
returned by the Escrow Agent to the Buyer to be retired and canceled.

 

6

 

(c)           For the twelve-month period ending December 31, 2010 (“Calendar Year 3”):

(i)            If
the Company achieves EBITDA in an amount of at least $3,000,000 (the “2010 EBITDA Target”) during Calendar Year 3, then the Escrow
Agent shall be directed to deliver, pursuant to the terms of the Escrow
Agreement, 1,333,333 of the Escrow Shares (as adjusted for any stock splits,
stock dividends, reverse splits, reorganization or otherwise) (the “2010 Escrow Shares”) to the Members, on a pro rata basis, in
accordance with the terms of this Section 1.5.

(ii)           If
the Company’s EBITDA for Calendar Year 3 is at least $2,500,000 (the “2010 EBITDA Floor”) but is less
than the 2010 EBITDA Target, for each $1.00 by which the Company’s Calendar
Year 3 EBITDA falls below the 2010 EBITDA Target two (2) shares of the 2010
Escrow Shares shall be forfeited by the Members and shall be returned by the
Escrow Agent to the Buyer to be retired and canceled.  Any remaining portion of the 2010 Escrow
Shares shall be delivered by the Escrow Agent to the Members, on a pro rata
basis, in accordance with the terms of this Section 1.5 and the Escrow
Agreement.

(iii)          If the Company fails to achieve the 2010
EBITDA Floor, the 2010 Escrow Shares shall be forfeited by the Members and
shall be returned by the Escrow Agent to the Buyer to be retired and canceled.

(d)           Determination of
Company EBITDA; Dispute Resolution. 
Within 45 days following the end of each Calendar Year that is subject
to the Company EBITDA targets above, the Company shall deliver to the Members’
Representative, a worksheet setting forth the computation of the Company’s total
EBITDA for the prior year, which computations shall be made using the Buyer’s
then existing accounting policies and methodologies in accordance with GAAP,
consistently applied.  Prior to and
following the delivery by the Company of its computation of total EBITDA for
the prior year, the Company shall provide the Members’ Representative and his
advisors reasonable access to the books and records of the Company, including
work papers of its accountants, and to any employees to the extent necessary
for Members’ Representative to prepare his calculation of such EBITDA and to
evaluate the Company’s calculation of such EBITDA.  If the Members’ Representative approves in writing
such EBITDA calculation or if the Members’ Representative does not notify the
Company in writing that he disagrees with the Company’s computation of EBITDA,
and the extent of such disagreement, within thirty (30) days of his receipt of
such worksheet, such amount shall become the applicable EBITDA calculation for
purposes hereof, and shall be conclusive and binding upon the parties
hereto.  Any such notice of disagreement
from the Members’ Representative shall include a worksheet setting forth the
Members’ Representative’s computation of EBITDA together with a copy of any
information used in making such computation. 
If the Company disagrees with the Members’ Representative’s computation,
an officer of the Company shall promptly meet with the Members’ Representative
and the parties shall attempt in good faith to reach a resolution of such disagreement.  If such disagreement is not resolved within
fifteen (15) days after the Company’s receipt of the Members’ Representative’s
notice of dispute, the parties shall request the Accounting Firm to compute the
amount of EBITDA in accordance with this Section 1.5(d) for the
applicable period as promptly as practicable and such computation shall be
binding upon the parties hereto.  The
expenses of the Audit Firm shall be borne equally by the Company and the
Members.  The Escrow Agent shall not be
directed to deliver any Escrow Shares, until the period during which the
Members’ Representative may object to the amount of Company EBITDA has lapsed
or, if properly contested in accordance with the provisions hereof, the amount
of EBITDA has been agreed upon by the parties or calculated by the Audit Firm.

 

7

 

(e)           For purposes hereof,
“EBITDA” means, for any specified
period, earnings before interest expense, interest income, income taxes,
depreciation, amortization and all non-cash charges and non-cash credits
required by GAAP (including, without limitation, stock compensation and fair
value adjustments); provided, however, the amount of the costs
of Buyer’s Corporate Management Team and Merger & Acquisitions Team
allocated to the Company shall be added back to increase such earnings; and
provided, further, that the costs of general insurance, employee benefit plans,
employee payroll directly associated with the Company employees and audit,
consulting or legal services directly associated with the operation
Company will be included among the costs used to determine such earnings so
long as the Company is operated in accordance with Section 1.5(g) hereof.

(f)            Rights Not Transferable. 
The contingent rights of the Members to the Escrow Shares are personal
to each Member and shall not be transferable for any reason other than by
operation of Law, will or the Laws of descent and distribution.  Any attempted transfer of such right by any
holder thereof (other than as permitted by the immediately preceding sentence)
shall be null and void.

(g)           Operations during the Calculation Period. 
During each Calendar Year, as long as Chander continues to be employed
by the Buyer or the Company, Buyer shall operate the business of the Company
subject to Buyer’s and Members’ Representative’s agreement to cooperate in good
faith with respect to the operations of the Company and the Members’ ability to
earn the Escrow Shares in accordance with Section 1.5(a), (b) and (c).  If Buyer and Members’ Representative do not
mutually agree with regard to the operation of a material aspect of the Company’s
business, such matter shall be submitted to the Board of Directors of Buyer to
be resolved in good faith, which resolution shall be accepted by Buyer and the
Members.

1.6           Exemption
from Registration; Restricted Securities. 
The shares of Buyer Common Stock to be issued pursuant to this Agreement
(including the Closing Shares and the Escrow Shares) will be issued in a
transaction exempt from registration under the Securities Act, by reason of
Section 4(2) thereof and/or Regulation D promulgated thereunder and may not be
re-offered or resold other than in conformity with the registration
requirements of the Securities Act and such other laws or pursuant to an
exemption therefrom.  The certificates
issued by Buyer with respect to the shares of Buyer Common Stock shall include
the legend set forth in Section 1.7 and such other such legends as may
be reasonably necessary to comply with applicable U.S. federal securities laws
and applicable Blue Sky laws.  The
Members understand that Buyer Common Stock issued or issuable hereunder are
characterized as “restricted securities” under applicable U.S. federal and
state securities laws in as much as they are being acquired from Buyer in a
transaction not involving a public offering and that, pursuant to these laws
and applicable regulations such shares may be resold without registration under
the Securities Act only in if Buyer has received an opinion of counsel or other
evidence, reasonably satisfactory to Buyer and its counsel, that such
registration is not required.  In the
absence of an effective registration statement covering the shares of Buyer
Common Stock or an available exemption from registration under the Act, such
shares must be held indefinitely. In this connection, each Member represents
that he or she is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.

1.7           Legends.  Members understand that Buyer Common Stock,
and any securities issued in respect thereof or exchange therefor, may bear the
following legends:

(a)           “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.”

 

8

 

(b)           Any
legend required by the Blue Sky laws of any state to the extent such laws are
applicable to the shares represented by the certificate so legended.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE

COMPANY AND MEMBERS

The
Company and each Member hereby, jointly and severally, represent and warrant,
on behalf of themselves and the Company, to Buyer at and as of the date hereof,
subject solely to the corresponding Schedules with respect to specific sections
of this Article 2 as follows.

2.1           Organization
and Qualification.

(a)           The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania, and has full limited
liability company power and authority to conduct its business as now conducted
and to own, use, license and lease its Assets and Properties.  The Company wholly owns the Subsidiaries
listed in Schedule 2.1 and the does not otherwise hold any equity,
membership, partnership, joint venture or other ownership interest in any
Person.  The Company has not agreed nor
is it obligated to make, nor is it bound by any written agreement or contract
as in effect as of the date hereof to make any future investment in or capital
contribution to any other Person.  The
Company has not guaranteed any obligation of any Subsidiary or any other Persons
in which it owns or has owned any equity or other financial interest.  The Company is duly qualified, licensed or
admitted to do business and is in good standing in each jurisdiction in which
the ownership, use, licensing or leasing of its Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for such jurisdictions in which the failure to be
so qualified would not have a Material Adverse Effect on the Company.  Schedule 2.1 sets forth each
jurisdiction where the Company is so qualified, licensed or admitted to do
business.

(b)           The Company has no
Subsidiaries, except as contemplated by Section 5.15.

2.2           Authority
Relative to this Agreement.  The
Company has full limited liability company power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. 
The execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby, and the
performance by the Company of its obligations hereunder, have been duly and
validly authorized by all necessary action by the Company and the Members, and
no other action is required to authorize the execution, delivery and
performance of this Agreement and the consummation by the Company of the
transactions contemplated hereby.  This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery hereof by Buyer,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

2.3           Capitalization.  As of the date hereof, all Interests of the Company
are owned by the Members in the amounts set forth in Schedule 2.3 hereto,
each Member has good and valid legal title to his or her Interests free and
clear of all Liens, and all such Interests have been issued in compliance with
all applicable federal, state and foreign securities Laws. No person or entity
other than the Members has a beneficial or other interest in, or a right to
acquire, any securities or ownership interests (including any interest in the
Company’s profits or losses) of the Company (whether pursuant to statute, the
Operating Agreement, or any agreement or otherwise) to which the Company or any
Member is a party or by which it or they are bound, or obligating the Company
or any Member to grant, extend, accelerate the vesting of, change the price or
otherwise amend or enter into any option, warrant, call, right, or other
commitment or agreement to acquire securities or ownership interests of the
Company.  Neither the Company nor any
Member is a party or subject to any agreement or understanding, and, to the
Company’s and each Member’s knowledge, there is no agreement, arrangement or
understanding between or among any other Persons, which affects, restricts or
relates to voting or transferability of the Interests.

 

9

 

2.4           No Conflicts.  Except as set forth in Schedule 2.4,
the execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not:

(a)           conflict
with or result in a violation or breach of any terms, conditions or provisions
of the Operating Agreement;

(b)           conflict
with or result in a violation or breach of any Law or Order applicable to the
Company or by which any of its Assets and Properties is bound or affected; or

(c)           (i) conflict with or
result in a violation or breach of, (ii) constitute a default (or an event
that, with or without notice or lapse of time or both, would constitute a
default) under, (iii) require the Company to obtain any consent, approval
or action of, make any filing with or give any notice to any Person as a result
or under the terms of, (iv) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect to,
(v) result in or give to any Person any additional rights or entitlement
to increased, additional, accelerated or guaranteed payments or performance
under, (vi) result in the creation or imposition of (or the obligation to
create or impose) any Lien upon the Company or any of its Assets and Properties
under or (vii) result in the loss of a material benefit under, any of the
terms, conditions or provisions of any Contract 
or License to which the Company is a party or by which the Company or
its Assets and Properties is bound or affected.

2.5           Books
and Records; Organizational Documents. 
Any minute books, including any 
register of the Interests, and other similar records of the Company that
have been provided or made available to Buyer, its representatives or its
counsel prior to the execution of this Agreement, are complete and correct in
all material respects and have been maintained in accordance with sound
business practices.  To the extent there
are any, such minute books contain a true and complete record of all material
actions taken at all meetings through the date hereof.  The Company has delivered to Buyer a true,
correct and complete copy of its operating agreement, certificate of formation
and other charter documents, each as amended to date, of the Company.  To Company’s knowledge, the Company is not in
violation of any provisions of its certificate of formation, operating
agreement or other charter documents.

2.6           Company Financial Statements.

(a)           The
Company has delivered to Buyer copies of the Company Financial Statements,
which have been prepared in accordance with accounting principles consistently
applied and maintained throughout the periods indicated.  When delivered, the Company Financial
Statements will present fairly and accurately the financial condition and
operating results of the Company as of the dates and during the periods
indicated therein (subject to normal year-end adjustments and except that
unaudited financial statements do not contain all required footnotes).  The statements of income and cash flow
included in the Company Financial Statements do not contain any items of
special or nonrecurring revenue or any other income not earned in the ordinary
course of business except as expressly specified therein, and such Financial
Statements include all adjustments, which consist only of normal recurring
accruals, necessary for a fair presentation in all material respects.  Except as set forth in Schedule 2.6(a),
since the Financial Statement Date, there has been no change in any accounting
policies, principles, methods or practices, including any change with respect
to reserves (whether for bad debts, contingent liabilities or otherwise), of
the Company.

 

10

 

(b)           Neither
the Company nor the Members has identified or been made aware of (i) any
fraud, whether or not material, that involves the management of the Company or
other employees of the Company who have a role in the preparation of financial
statements or the internal accounting controls utilized by the Company or
(ii) any claim or allegation regarding any of the foregoing.

(c)           Other
than as listed in Schedule 2.6(c), the Company has no Indebtedness.

2.7           Absence
of Changes.  Since the Financial
Statement Date, (i) there has not been any occurrence or event with respect to
the Company, which, individually or in the aggregate, could be reasonably
expected to have any Material Adverse Effect on the Company and (ii) there has
not been any of the following, with respect to the Company:

(a)           the entering into of a material Contract,
commitment or transaction, the material amendment or other material
modification of any material Contract, commitment or transaction, or the
incurrence of any Liabilities, in each case outside of the ordinary course of
business consistent with the Company’s past practice;

(b)           except as set forth
on Schedule 2.7(b), the making of any distribution (whether in cash,
equity or property) in respect of any Interests or issuance or authorization of
the issuance of any other securities in respect of, in lieu of or in
substitution for Interests;

(c)           to the Company’s and
each Member’s knowledge, any disposition or sale of, waiver of rights to, lease
of, or incurrence of any Lien on, any Assets and Properties of the Company,
other than in the ordinary course of business consistent with the Company’s
past practice;

(d)           except as set forth
on Schedule 2.7(d), the making of any capital expenditures, lease
commitments or other capital commitments by the Company in an amount in excess,
individually or in the aggregate, of fifty thousand dollars ($50,000) except in
the ordinary course of business consistent with the Company’s past practice ;

(e)           the failure to pay
or otherwise satisfy material Liabilities of the Company when due;

(f)             the incurrence of
any Company Debt, except in the ordinary course of business consistent with the
Company’s past practice;

(g)           change
in the Company’s authorized or issued equity; grant of any option or right to
purchase equity of the Company; issuance of any security convertible into such
equity; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by the Company of such equity or amendment or modification of
the rights of either Member;

(h)           amendment to the Certificate of
Organization and Operating Agreement of the Company;

(i)            except
in the ordinary course of business consistent with the Company’s past practice,
payment or increase by the Company of any bonuses, salaries, or other
compensation to any equity holder, director, officer, or employee or entry into
any employment, retention, severance, or similar contract with any director,
officer, or employee;

 

11

 

(j)            adoption
of, or increase in the payments to or benefits under, any profit-sharing,
bonus, deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of the Company;

(k)           damage to or
destruction or loss of any Assets and Properties of the Company, whether or not
covered by insurance, materially and adversely affecting the properties,
assets, business or financial condition of the Company;

(l)            entry
into, termination of, or receipt of notice of termination of (i) any
license, distributorship, dealer, sales representative, joint venture, credit,
or similar agreement, or (ii) any Contract or transaction involving a
total remaining commitment by or to the Company of at least Fifty Thousand
Dollars ($50,000);

(m)          except
as set forth in Schedule 2.7(m), receipt of any oral or written notice by a Major Customer of its
termination of any Contract or other agreement between the Company and such
Major Customer, of
its intent to terminate or not to renew such an agreement, or of its intent to
reduce the amount of business conducted with or fees paid to the Company ;

(n)           sale (other than sales of inventory in
the ordinary course of business consistent with the Company’s past practice),
lease, or other disposition of any Assets and Properties of the Company or
incurring any mortgage, pledge, or imposition of any lien or other encumbrance
on any material Assets and Properties of the Company;

(o)           cancellation or waiver of any claims or
rights with a value to the Company in excess of Fifty Thousand Dollars
($50,000);

(p)           material
change in the accounting methods used by the Company; or

(q)           agreement
by the Company to do any of the foregoing.

2.8           No
Undisclosed Liabilities.  Except as
set forth in Schedule 2.8, the Company has no material obligations or
liabilities of any nature (matured or unmatured, fixed or contingent) other
than (i) those disclosed or recorded in the Company Financial Statements, and Schedule
2.8 includes all contingent liabilities, including pending or threatened
litigation, not required to be disclosed or recorded in the Company Financial
Statements, (ii) those incurred in connection with this Agreement or the
transactions contemplated hereby or (iii) those incurred in the ordinary course
of business consistent with the Company’s past practice.

2.9           [Reserved].

2.10         Taxes.

(a)           The Company and each of its Subsidiaries
have (i) prepared or caused to be prepared and timely filed or caused to
be timely filed all required federal, state, local and foreign Tax Returns
relating to any and all Taxes concerning or attributable to the Company or any
of its Subsidiaries or their respective operations and such Tax Returns are
true and correct and have been completed in accordance with applicable law and
(ii) timely paid all Taxes required to be paid on or prior to the date
hereof (whether or not shown to be due on such Tax Returns).

 

12

 

(b)           The Company is a validly electing S
corporation within the meaning of Sections 1361 and 1362 of the Code and
Company will be an S corporation up to and including the Closing Date.  In addition, the Company is properly
characterized as a S corporation under the income Tax laws of every state or
local jurisdiction in which the Company does business.

(c)           The Company will not be liable for any
Tax under Section 1374 of the Code in connection with the deemed sale of
Company’s assets caused by a Section 338(h)(10) Election (if made),

(d)           The Company has not, in the past ten (10)
taxable years, (i) acquired assets from another corporation in a transaction in
which Company’s Tax basis for the acquired assets was determined, in whole or
in part, by reference to the Tax basis of the acquired assets (or any other
property) in the hands of the transferor or (ii) acquired the stock of any
corporation which is a qualified subchapter S subsidiary.

(e)           The Company and each of its Subsidiaries
have withheld or collected and paid over to the appropriate Tax Authorities (or
are properly holding for such timely payment) all Taxes required by law to be
withheld or collected.

(f)            To the knowledge of the Members, neither
the Company nor any of its Subsidiaries has been informed by any jurisdiction
that the jurisdiction believes that the Company, any of its Subsidiaries or the
Affiliated Company was required to file any Tax Return that was not filed.

(g)           Neither the Company nor any of its
Subsidiaries has been delinquent in the payment of any Tax, nor is there any
Tax deficiency outstanding, assessed or proposed in writing against the Company
or any of its Subsidiaries, nor has the Company or any of its Subsidiaries
executed any waiver of any statute of limitations on or extending the period
for the assessment or collection of any Tax.

(h)           To the knowledge of the Members, no audit
or other examination of any Tax Return of the Company or any of its
Subsidiaries is presently in progress, nor has the Company or any of its
Subsidiaries been notified in writing of any request for such an audit or other
examination.

(i)            The unpaid Taxes of the Company and its
Subsidiaries (i) did not, as of the most recent fiscal month end, exceed
the reserve for tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set
forth on the face of the Company Financial Statements and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing in
accordance with the past custom and practice of the Company or any of its
Subsidiaries in filing their respective Tax Returns.

(j)            Schedule 2.10(j) lists all income, franchise and similar
Tax Returns (federal, state, local and foreign) filed with respect to each of
the Company and its Subsidiaries for taxable periods ended on or after
January 1, 2004, indicates the most recent income, franchise or similar
Tax Return for each relevant jurisdiction for which an audit has been completed
or the statute of limitations has lapsed and indicates all Tax Returns that, to
the knowledge of the Members, currently are the subject of audit.

(k)           The Members have delivered or made
available to Buyer copies of all federal, state and foreign income, franchise
and similar Tax Returns, examination reports, and statements of deficiencies
assessed against or agreed to by the Company or any of its Subsidiaries since
January 1, 2004.

 

13

 

(l)            There are (and immediately following the
date hereof there will be) no liens on the assets of the Company or any of its
Subsidiaries relating to or attributable to Taxes other than liens for Taxes
not yet due and payable.

(m)          Neither the Company’s nor any of its
Subsidiaries’ assets is (i) property that is required to be treated as being
owned by any other person in accordance with the provisions of former Section
168(f)(8) of the Internal Revenue Code of 1954, or (ii) treated as “tax-exempt
use property,” within the meaning of Section 168(h) of the Code.

(n)           Neither the Company nor any of its
Subsidiaries has (i) ever been a member of an affiliated group (within the
meaning of Section 1504(a) of the Code) filing a consolidated federal income
Return, (ii) ever been a party to any Tax sharing, indemnification or allocation
agreement other than standard commercial agreements with third parties entered
into in the ordinary course of business, (iii) any liability for the Taxes
of any person under Treasury Regulation § 1.1502-6 (or any similar
provision of state, local or foreign law including any arrangement for group or
consortium relief or similar arrangement), as a transferee or successor, by
contract or agreement, or otherwise and (iv) ever been a party to any
joint venture, partnership or other arrangement that is properly treated as a
partnership for Tax purposes.

(o)           Neither the Company nor any of its
Subsidiaries has been, at any time during the applicable period specified in
Section 897(c)(1)(A)(i), a “United States Real Property Holding Corporation”
within the meaning of Section 897(c)(2) of the Code.

(p)           Neither the Company nor any of its
Subsidiaries has been the “distributing corporation” or the “controlled
corporation” (in each case, within the meaning of Section 355(a)(1) of the
Code) with respect to a transaction described in Section 355 of the Code (i)
within the three (3) year period ending as of the date of this Agreement, or
(ii) in a distribution that could otherwise constitute part of a “plan” or “series
of related transactions” (within the meaning of Section 355(e) of the Code)
that includes the transactions contemplated by this Agreement.

(q)           Neither the Company nor any of its
Subsidiaries has engaged in a “reportable transaction” within the meaning of
Treasury Regulations Section 1.6011-4(b), including any transaction that is the
same or substantially similar to one of the types of transactions that the
Internal Revenue Service has determined to be a Tax avoidance transaction and
identified by notice, regulation, or other form of published guidance as a
listed transaction, as set forth in Treasury Regulations Section 1.6011-4(b)(2).

(r)            The Company or any of its Subsidiaries
will not be required to include any income or gain or exclude any deduction or
loss from taxable income for any taxable period ending after the date hereof as
a result of (i) any change in method of accounting for a Pre-Closing Tax
Period, (ii) closing agreement under Section 7121 of the Code
executed on or prior to the date hereof, (iii) deferred intercompany gain or
excess loss account under Treasury Regulations under Section 1502 of the
Code (or in the case of each of (i), (ii) and (iii), under any similar
provision of applicable law), (iv) installment sale or open transaction
disposition made on or prior to the date hereof or (v) prepaid amount
received on or prior to the date hereof.

(s)           Each of the Company and its Subsidiaries
is and has at all times been resident for Tax purposes in its country of
incorporation or formation and is not and has not at any time been treated as a
resident in any other country for any Tax purpose (including any arrangement
for the avoidance of double taxation). 
Neither the Company nor any of its Subsidiaries is subject to Tax in any
country other than its country of incorporation or formation by virtue of
having a source of income in that jurisdiction. 
Neither the Company nor any of its Subsidiaries is liable for any Tax as
the agent of any other person or business or constitutes a permanent
establishment or other place of business of any other person, business or
enterprise for any Tax purpose.

 

14

 

(t)            The prices for any property or services
(or for use of any property) provided by or to the Company or any of its
Subsidiaries are arm’s length prices for purposes of any applicable transfer
pricing laws, including Treasury Regulations promulgated under Section 482 of
the Code.

(u)           Each Member has reviewed with its own tax
and other advisors the federal, state, and local and foreign, if applicable,
Tax consequences of the sale of the Interests and the transactions contemplated
by this Agreement and related transaction agreements.  Each Member is relying solely on such
advisors and not on any statements or representations of the Buyer or any of
its agents.  Each Member understands that
he or she (and not the Buyer) shall be responsible for his or her own Tax
liability that may arise as a result of the transactions contemplated by this
Agreement.

2.11         Legal Proceedings.

(a)           Except as set forth in Schedule 2.11(a):

(i)            there
are no Actions or Proceedings brought or, to the knowledge of the Company or
the Members, pending or threatened against the Company or the Assets and
Properties of the Company;

(ii)           there
are no facts or circumstances known to the Company that would reasonably be
expected to give rise to any material Action or Proceeding against the Company;
and

(iii)          the
Company has not received written notice of, and does not otherwise have
knowledge of, any Orders outstanding against the Company.

(b)           Schedule
2.11(b) sets forth all Actions or Proceedings against or by the Company
during the last three (3) years.

2.12         Compliance
With Laws and Orders.  To the Company’s
and each Member’s knowledge, the Company has not violated, and is not currently
in violation in any material respect of any Law applicable to the Company or
any of its Assets and Properties.

2.13         Benefit Plans.

(a)           Schedule
2.13(a) sets forth a true and complete list of each “employee benefit plan,”
as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and
each and every written, unwritten, formal or informal plan, agreement, program,
policy or other arrangement involving direct or indirect compensation (other
than workers’ compensation, unemployment compensation and other government
programs), employment, severance, consulting, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, other forms of incentive compensation, post-retirement insurance
benefits, or other benefits, entered into, maintained or contributed to by the
Company or with respect to which the Company has or may in the future have any
liability (contingent or otherwise). 
Each plan, agreement, program, policy or arrangement required to be set
forth on Schedule 2.13(a) pursuant to the foregoing is referred to
herein as a “Benefit Plan.”

 

15

 

(b)           The
Company has delivered the following documents to the Buyer with respect to each
Benefit Plan:  (1) correct and complete
copies of all documents embodying such Benefit Plan, including (without
limitation) all amendments thereto, and all related trust documents, (2) a
written description of any Benefit Plan that is not set forth in a written
document, (3) the most recent summary plan description together with the
summary or summaries of material modifications thereto, if any, (4) the three
most recent annual actuarial valuations, if any, (5) all Internal Revenue
Service (“IRS”) or Department of Labor (“DOL”) determination, opinion, notification and advisory
letters, (6) the three most recent annual reports (Form Series 5500 and all
schedules and financial statements attached thereto), if any, (7) all material
correspondence to or from any Governmental or Regulatory Authority received in
the last three years, (8) all discrimination tests for the most recent three
plan years, and (9) all material written agreements and contracts currently in
effect, including (without limitation) administrative service agreements, group
annuity contracts, and group insurance contracts.

(c)           Except
as set forth on Schedule 2.13(c), each Benefit Plan has been maintained
and administered in all respects in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
(foreign and domestic), including (without limitation) ERISA and the Code,
which are applicable to such Benefit Plans. 
All contributions, reserves or premium payments required to be made or
accrued as of the date hereof to the Benefit Plans have been timely made or
accrued.  Each Benefit Plan intended to
be qualified under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is so qualified and either: (1) has
obtained a currently effective favorable determination notification, advisory
and/or opinion letter, as applicable, as to its qualified status (or the
qualified status of the master or prototype form on which it is established)
from the IRS covering the amendments to the Code effected by the Tax Reform Act
of 1986 and all subsequent legislation for which the IRS will currently issue
such a letter, and no amendment to such Benefit Plan has been adopted since the
date of such letter covering such Benefit Plan that would adversely affect such
favorable determination; or (2) still has a remaining period of time in which
to apply for or receive such letter and to make any amendments necessary to
obtain a favorable determination.

(d)           No
plan currently or ever in the past maintained, sponsored, contributed to or
required to be contributed to by the Company, any of its Subsidiaries, or any
of their respective current or former ERISA Affiliates is or ever in the past
was (1) a “multiemployer plan” as defined in Section 3(37) of ERISA, (2) a plan
described in Section 413 of the Code, (3) a plan subject to Title IV of ERISA,
(4) a plan subject to the minimum funding standards of Section 412 of the Code
or Section 302 of ERISA, or (5) a plan maintained in connection with any trust
described in Section 501(c)(9) of the Code. 
The term “ERISA Affiliate” means any Person
that, together with the Company or any Company Subsidiary, would be deemed a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

(e)           To
the Company’s knowledge, the Company is not subject to any liability or penalty
under Sections 4975 through 4980B of the Code or Title I of ERISA.  The Company has complied with all applicable
health care continuation requirements in Section 4980B of the Code and in
ERISA.  No “Prohibited Transaction,”
within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA
and not otherwise exempt under Section 408 of ERISA, has occurred with respect
to any Benefit Plan.

(f)            No
Benefit Plan provides, or reflects or represents any liability to provide,
benefits (including, without limitation, death or medical benefits), whether or
not insured, with respect to any former or current employee, or any spouse or
dependent of any such employee, beyond the employee’s retirement or other
termination of employment with the Company other than (1) coverage mandated by
Part 6 of Title I of ERISA or Section 4980B of the Code, (2) retirement or
death benefits under any plan intended to be qualified under Section 401(a) of
the Code, (3) disability benefits that have been fully provided for by
insurance under a Benefit Plan that constitutes an “employee welfare benefit
plan” within the meaning of Section (3)(1) of ERISA, or (4) benefits in the
nature of severance pay with respect to one or more of the employment contracts
set forth on Schedule 2.13(a).

 

16

 

(g)           There
is no contract, plan or arrangement covering any employee or former employee of
the Company that, individually or collectively, could give rise to the payment
as a result of the transactions contemplated by this Agreement of any amount
that would not be deductible by the Company by reason of Section 280G of the
Code.  For purposes of the foregoing
sentence, the term “payment” shall include (without limitation) any payment,
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits. 
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement (alone or together with any other event which,
standing alone, would not by itself trigger such entitlement or acceleration)
will not (1) entitle any Person to any payment, forgiveness of indebtedness,
vesting, distribution, or increase in benefits under or with respect to any
Benefit Plan, (2) otherwise trigger any acceleration (of vesting or payment of
benefits or otherwise) under or with respect to any Benefit Plan, or (3)
trigger any obligation to fund any Benefit Plan.

(h)           No
action, suit or claim (excluding claims for benefits incurred in the ordinary
course) has been brought or is pending or, to the Company’s knowledge, is threatened
against or with respect to any Benefit Plan or the assets or any fiduciary
thereof (in that Person’s capacity as a fiduciary of such Benefit Plan).  To the Company’s knowledge, there are no
audits, inquiries or proceedings pending or threatened by the IRS, DOL, or
other Governmental or Regulatory Authority with respect to any Benefit Plan.

(i)            Each
Benefit Plan that is a “nonqualified deferred compensation plan” (as defined
for purposes of Section 409A(d)(1) of the Code) (1) has been operated since January
1, 2005 in good faith compliance with Section 409A of the Code and all
applicable IRS guidance promulgated thereunder to the extent such plan is
subject to Section 409A of the Code, and (2) as to any such plan in existence
prior to January 1, 2005 and not subject to Section 409A of the Code, has not
been “materially modified” (within the meaning of IRS Notice 2005-1) at any
time after October 3, 2004.  No option to
acquire equity interests in the Company (whether currently outstanding or
previously exercised) is, has been or would be, as applicable, subject to any
tax, penalty or interest under Section 409A of the Code.

(j)            Except
as set forth on Schedule 2.13(j), no Benefit Plan is maintained outside
the jurisdiction of the United States, or covers any employee residing or
working outside the United States (any such Benefit Plan, a “Foreign Benefit Plan”).  With respect to any Foreign Benefit Plans,
(A) all Foreign Benefit Plans have been established, maintained and
administered in compliance in all material respects with their terms and all
applicable statutes, laws, ordinances, rules, orders, decrees, judgments,
writs, and regulations of any controlling Governmental or Regulatory Authority,
(B) all Foreign Benefit Plans that are required to be funded are fully
funded, and with respect to all other Foreign Benefit Plans, adequate reserves
therefor have been established on the Company Financial Statements, and
(C) no material liability or obligation of the Company exists with respect
to such Foreign Benefit Plans that has not been disclosed on Schedule
2.13(j).

2.14         Title
to Property.  The Company has good
and marketable title to all of its properties, interests in properties and
assets, real and personal, reflected in the Company Financial Statements or
acquired after the Financial Statement Date (except properties, interests in
properties and assets sold or otherwise disposed of since the Financial
Statement Date in the ordinary course of business), or with respect to leased
properties and assets, valid leasehold interests in, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any kind or character,
except (i) the lien of current Taxes not yet due and payable or which are
being contested by the Company in good faith, (ii) such imperfections of
title, liens and easements as do not materially detract from or interfere with
the use of the properties subject thereto or affected thereby, or otherwise
materially impair business operations involving such properties,
(iii) liens securing debt which is reflected on the Company Financial
Statements, as applicable and (iv) Liens listed on Schedule 2.14.  The property and equipment of the Company
that are used in the operations of its business are in good operating condition
subject to normal wear and tear.  All
material properties used in the operations of the Company are reflected in the
Company Financial Statements.  The
Company owns no real property.

 

17

 

2.15         Intellectual Property.

(a)           Except
as set forth on Schedule 2.15(a), the Company owns, or is licensed or
otherwise possesses legally enforceable rights to use, all material
Intellectual Property that is used in the business of the Company, as currently
conducted.  As a result of this Agreement,
upon Closing, the Members hereby assign to Company all rights, title and
interest they possess in such Intellectual Property, if any (“Automatic Assignment”). 
For avoidance of doubt and as a condition of this Agreement, in no event
shall the Company have any obligation, or provide any additional payment, to
Members associated with such Automatic Assignment.  The Company is the sole and exclusive owner
of all Company Intellectual Property owned by the Company.

(b)           Except
as set forth in Schedule 2.15(b), the Company has not (i) licensed or
otherwise provided any Company Intellectual Property in source code form to any
third party or (ii) entered into any exclusive license relating to any Company
Intellectual Property with any third party.

(c)           Schedule
2.15(c) lists (i) all Registered Intellectual Property that is owned
by the Company or in which the Company holds any interest, including, to the
knowledge of the Company, the jurisdictions in which each item of such
Registered Intellectual Property has been issued or registered or in which any
application for such issuance or registration has been filed, (ii) all
licenses, sublicenses and other agreements as to which the Company is a party
and pursuant to which any other Person is authorized to use any Company
Intellectual Property, and (iii) all licenses, sublicenses and other
agreements as to which the Company is a party and pursuant to which the Company
is authorized to use any third-party Intellectual Property (“Third Party Intellectual Property Rights”), other than
non-exclusive licenses for off-the-shelf, generally available software programs
licensed under standard, non-negotiated terms. 
All Registered Intellectual Property of the Company are valid and
subsisting.  The Company has made
available to Buyer copies of the documents identified in Sections
2.15(c)(ii) and 2.15(c)(iii) above.

(d)           To
the Company’s knowledge, the operation of the business of the Company as
currently conducted does not infringe, misappropriate or otherwise violate the
Intellectual Property of any Person, nor has the Company ever received any
written notice thereof from any Person. 
To Company’s knowledge, no Person (including employees and former
employees of the Company) is infringing, misappropriating or otherwise
violating or making any unauthorized use or disclosure of any Intellectual
Property of the Company or any Third Party Intellectual Property Rights to the
extent licensed by or through the Company.

(e)           The
Company is not, nor will it be as a result of the execution and delivery of
this Agreement or the performance of its obligations under this Agreement, in
breach of any license, sublicense or other agreement relating to the Company
Intellectual Property or Third Party Intellectual Property Rights.

(f)            Except
as set forth on Schedule 2.15(f), the Company (i) has not been sued
in any suit, action or proceeding which involves a claim of infringement,
misappropriation or other violation of any Intellectual Property of any Person;
and (ii) has not brought any action, suit or proceeding for infringement,
misappropriation or other violation of Intellectual Property or breach of any
license or agreement involving Intellectual Property against any Person.

 

18

 

(g)           The
Company has secured valid written assignments and waiver of any moral rights
from consultants and employees who contributed to the creation or development
of Company Intellectual Property of the rights to such contributions that the
Company does not already own by operation of law, and the Company has made
available copies of such documents to Buyer.

(h)           The
Company has taken reasonably necessary and appropriate steps to protect and
preserve the confidentiality of all confidential Company Intellectual Property
(“Confidential Information”).  All use, disclosure or appropriation of
Confidential Information by the Company by or to a third party has been
pursuant to the terms of a written agreement between the Company and such third
party.

(i)            All
products and services of the Company are being and have been provided and
performed in compliance in all material respects with the terms and
requirements of all applicable agreements and warranties and with all
applicable laws.

2.16         Customer Contracts.

(a)           Schedule
2.16(a) contains a true and complete list of those Contracts with customers
that represent ninety percent (90%) of the Company’s gross revenue of the
Company based on the twelve months ended October 31, 2007, including, without
limitation all Contracts and other agreements with each Major Customer.  True and complete copies or, if none,
reasonably complete and accurate written descriptions of all such Contracts,
together with all amendments and supplements thereto and all continuing waivers
of any material terms thereof, have been made available to Buyer prior to the
execution of this Agreement.

(b)           Each
Contract disclosed in Schedule 2.16(a), is in full force and effect and
constitutes, to the Company’s and each Member’s knowledge, a legal, valid and
binding agreement, enforceable in accordance with its terms.  Neither the Company nor, to the knowledge of
the Company, any other party to such Contract (i) has received notice that it
is in violation or breach of or default under any such Contract, (ii) is in
violation or breach of or default under any such Contract (or with notice or
lapse of time or both, would be in violation or breach of or default under any
such Contract), except where such violation or default would not be expected to
cause a Material Adverse Effect on the Company or (iii) has received notice of
termination or non-renewal of such Contract.

2.17         Insurance.  Schedule 2.17 contains a true and
complete list of all insurance policies (by policy number, insurer, expiration
date and type, amount and scope of coverage) held by the Company relating to
the Assets and Properties of the Company, copies of which have been provided or
made available to the Buyer.  In the
three (3) year period ending on the date hereof, the Company has not received
any notice from, or on behalf of, any insurance carrier relating to or
involving any adverse change or any change other than in the ordinary course of
business, in the conditions of insurance, any refusal to issue an insurance
policy or non-renewal of a policy, or requiring or suggesting alteration of any
of the Assets and Properties of the Company, purchase of additional equipment
or modification of any of the Company’s methods of doing business.  The insurance coverage provided by the
policies set forth on Schedule 2.17 will not terminate or lapse by
reason of any of the transactions contemplated by this Agreement or any of the
ancillary agreements. Each policy listed on Schedule 2.17 is valid and
binding and in full force and effect, all premiums due thereunder have been
paid in accordance with their terms, and neither the Company, nor the Person to
whom such policy has been issued, has received any notice of cancellation or
termination in respect of any such policy or is in default thereunder, and the
Company has no knowledge of any reason or state of facts that would lead to the
cancellation of such policies or of any threatened termination of, or premium
increase with respect to, any of such policies. The insurance policies listed
on Schedule 2.17 are in amounts and have coverages as required by
any Contract to which the Company is a party or by which any of their
respective Assets and Properties is bound, except where the failure to have
such coverage would not result in a Material Adverse Effect on the Company. Schedule
2.17 contains a list of all claims in excess of Ten Thousand Dollars
($10,000) made under any insurance policies covering the Company in the last
three (3) years. The Company has not received notice that any insurer under any
policy listed (or required to be listed) in Schedule 2.17 is denying,
disputing or questioning liability with respect to a claim thereunder or
defending under a reservation of rights clause.

 

19

 

2.18         Affiliate
Transactions.

(a)           Except as disclosed in Schedule
2.18(a) or as otherwise contemplated herein, (i) there are no
Contracts or Liabilities between the Company, on the one hand, and (1) any
current or former officer, member, or to the knowledge of the Company and each
Member, any Affiliate or Associate of the Company, (2) any Person who, to
the knowledge of the Company, is an Associate of any such officer, member or
Affiliate, on the other hand, or (3) any Person in which Members, individually
or collectively, hold beneficial ownership of greater than 5% of such Person’s
equity securities or hold any partnership or joint venture interest,
(ii) the Company does not provide or cause to be provided any assets,
services or facilities to any current or former officer, member, Affiliate or
Associate of the Company, (iii) no current or former officer, member,
Affiliate or Associate of the Company provides or causes to be provided any
assets, services or facilities to the Company, (iv) the Company does not
beneficially own, directly or indirectly, any Investment Assets of any current
or former officer, member, Affiliate or Associate of the Company.

(b)           Each of the Contracts and Liabilities
listed in Schedule 2.18(a), if any, was entered into or incurred, as the
case may be, on terms no less favorable to the Company (in the reasonable
judgment of the Company) than if such Contract or Liability was entered into or
negotiated on an arm’s length basis on terms that were competitive at the time
such Contract or Liability was entered into or incurred.

2.19         Employees;
Labor Relations.

(a)           The Company is in
compliance in all material respects with all currently applicable laws and
regulations respecting employment, discrimination in employment, terms and
conditions of employment, wages, hours and occupational safety and health and
employment practices and is not engaged in any material respect in any unfair
labor practice, except where non-compliance, either individually or
collectively, with any of the foregoing by the Company would not result in any
material liability.  To Company’s
knowledge, the Company is not liable for any payment to any trust or other fund
or to any governmental or administrative authority, with respect to employment
insurance, social security, workers compensation, health or other benefits or
obligations for employees (other than routine payments to be made in the normal
course of business and consistent with past practice).  There are no pending claims against the
Company under any workers compensation plan or policy or for long term disability
which constitutes a Material Adverse Effect on the Company.  There are no controversies pending or, to the
knowledge of the Company, threatened, between the Company and any of its
employees, which controversies have or could reasonably be expected to result
in an action, suit, proceeding, claim, arbitration or investigation before any
agency, court or tribunal, foreign or domestic, which, in any of the foregoing
cases, constitutes a Material Adverse Effect on the Company.  The Company is not a party to any collective
bargaining agreement or other labor union Contract nor does the Company know of
any activities or proceedings of any labor union to organize any such
employees.  To the Company’s knowledge,
no employees of the Company are in violation of any term of any employment
Contract, patent disclosure agreement, non-competition agreement, or any
restrictive covenant to a former employer relating to the right of any such
employee to be employed by the Company because of the nature of the business
conducted or proposed to be conducted by the Company or to the use of trade
secrets or proprietary information of others. 
No employees of the Company have given notice to the Company, nor is the
Company otherwise aware, that any such employee intends to terminate his or her
employment with the Company.

 

20

 

(b)           Schedule 2.19(b)
sets forth, individually and by category, the name of each officer, employee
and consultant, together with such person’s position or function, annual base
salary or wage and any incentive, severance or bonus arrangements with respect
to such person.  The completion of the
transactions contemplated by this Agreement will not result in any payment or
increased payment becoming due from the Company to any officer, director, or
employee of, or consultant to, the Company other than as set forth in Article
1 hereof.  To Company’s knowledge,
the Company is not a party to any agreement for the provision of labor from any
outside agency that would result in treatment of such providers of labor as an
employee of the Company.  To Company’s
knowledge, there have been no claims by employees of such outside agencies, if
any, with regard to employees assigned to work for the Company, and no claims
by any governmental agency with regard to such employees.

(c)           Except as disclosed
on Schedule 2.19(c), during the last three (3) years, there have been no
federal or state claims based on employment equity, sex, sexual or other
harassment, age, disability, race or other discrimination or common law claims,
including claims of wrongful dismissal, severance pay, payment in lieu of
notice or bad faith termination, by any employees of the Company or by any of
the employees performing work for the Company but provided by an outside
employment agency, and there are no facts or circumstances known to the Company
that could reasonably be expected to give rise to such complaint or claim.

(d)           The Company has
complied in all material respects with its obligations: (i) relating to
overtime compensation requirements; and (ii) with regard to the compensation
owed to independent contractors.

2.20         Environmental
Matters.  Other than as listed in Schedule
2.20, the Company does not now own, and has never owned, any fee simple
interest in real property, has not violated any Environmental Laws in any
material respects and does not generate or store any Hazardous Materials at its
facilities.

2.21         Key Suppliers of Independent Contractors.  Schedule
2.21(a) lists all of the Company’s suppliers of independent contractors to
which Company has paid or accrued in excess of $100,000 during the prior
12-month period from the date hereof.  To
the knowledge of the Company, no such supplier has informed the Company, orally
or in writing, of its intention to terminate its relationship with the Company
or reduce the amount of business it conducts with the Company.

2.22         Accounts
Receivable.  To Company’s knowledge,
except as set forth in Schedule 2.22, the accounts and notes receivable
of the Company reflected on the Company Financial Statements and all accounts
and notes receivable arising subsequent to the Financial Statement Date,
(a) arose from bona fide sales transactions in the ordinary course of
business, consistent with past practice, (b) are legal, valid and binding
obligations of the respective debtors enforceable in accordance with their
respective terms, and (c) are not subject to any valid set-off or
counterclaim.

2.23         Brokers.  Except as set forth in Schedule 2.23, neither the Company Group nor the
Members, nor anyone acting on their behalf, have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the
negotiation or consummation of this Agreement or any of the transactions
contemplated hereby.

 

21

 

2.24         Foreign
Corrupt Practices Act.  Neither the
Company, nor to the knowledge of the Company, any agent, employee or other
Person acting on behalf of the Company has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made any unlawful payment to
any government official or employee or to any political party or campaign from
corporate funds, violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other similar unlawful payment which will would reasonably be
expected to give rise to a Material Adverse Effect on the Company.

2.25         Approvals.

(a)           No
Approvals of Governmental or Regulatory Authorities relating to the business
conducted by the Company are required to be given to or obtained by the Company
from any and all Governmental or Regulatory Authorities in connection with the
consummation of the transactions contemplated by this Agreement, except
where the failure to obtain such Approval would not constitute a Material
Adverse Effect on the Company.

(b)           Except
as set forth in Schedule 2.25(b), no non-Governmental or Regulatory
Authority Approvals are required to be given to or obtained by the Company from
any third parties in connection with the consummation of the transactions
contemplated by this Agreement, except where the failure to obtain such
Approvals would not constitute a Material Adverse Effect on the Company.

(c)           To the Company’s knowledge, the Company
has obtained all Approvals from Governmental or Regulatory Authorities
necessary to conduct the business conducted by the Company in the manner as it
is currently being conducted, except where the failure to obtain such Approvals
would not constitute a Material Adverse Effect on the Company, and, during the
last three (3) years, there has been no written notice received by the Company
of any violation or non-compliance with any such Approvals.  All Approvals from
Governmental or Regulatory Authorities necessary to conduct the business
conducted by the Company as it is currently being conducted are set forth in Schedule
2.25(c).

2.26         Leases.  Except as set forth on Schedule 2.26,
at Closing, the Company will not be a party to any property leases or subleases
other than the Domestic Lease and the Foreign Lease pursuant to Section
6.1(c) and (d), respectively, hereto.

2.27         Patriot
Act.  The Company, and all of its
directors, officers, Affiliates, agents and employees, at all times has been in
substantial compliance with the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA
Patriot Act), as amended, and the rules and regulations promulgated thereunder,
as applicable to the Company and its Assets and Properties.

2.28         Disclosure.  No representation or warranty contained in
this Agreement or any Schedules attached hereto or in any certificate furnished
to Buyer pursuant to any provision of this Agreement (including the Company
Financial Statements) contains any untrue statement of a material fact or omits
a material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading

2.29         Compliance
with Regulation D; Shareholders. 
Each Member is aware that the Buyer Common Stock to be issued pursuant
to this Agreement will constitute “restricted securities” within the meaning of
the Securities Act.  Each Member agrees
that at no time was such Member presented with or solicited by or through any
leaflet, public promotional meeting, television advertisement or any other form
of general advertising or solicitation in connection and concurrently with this
transaction.  Each Member is an “accredited
investor” as defined in Regulation D under the Securities Act.

 

22

 

2.30         Certifications. 
To the knowledge of the Company, it has not received notice of
termination from a customer identified in Schedule 2.16(a) with respect
to the Company’s loss of its Women’s Business Enterprises National Council
Certification as a result of the consummation of the transactions contemplated
by this Agreement.

2.31         Sufficiency of Assets. 
The Assets and Properties of the Company constitute all of the material
properties, assets, rights, Contracts and claims (other than raw materials,
supplies, merchandise and other goods purchased from time to time pursuant to
purchase orders in the ordinary course of business and leasehold interests in
any leased real properties) that would have been necessary to conduct the
business of the Company in substantially the manner in which it was conducted
as of the date hereof.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer
hereby represents and warrants to the Company and the Members, subject to such
exceptions as are disclosed in the corresponding Schedules with respect to
specific sections of this Article 3 as follows:

3.1           Organization,
Standing and Power.  Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.  Buyer has
the corporate power to own its properties and to carry on its business as now
being conducted and as proposed to be conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership,
use, licensing or leasing of its Assets and Properties, or the conduct or
nature of its business, makes such qualification, licensing or admission
necessary, except for such failures to be so duly qualified, licensed or
admitted and in good standing that could not reasonably be expected to have a
Material Adverse Effect on Buyer.  Buyer
is not in violation of any of the provisions of its Articles of Incorporation
or Bylaws or any similar governing instruments or agreements.

3.2           Capital
Structure of Buyer.

As
of the date hereof, the authorized capital stock (“Capital
Stock”) of Buyer consists of 800,000,000 shares of Buyer Common
Stock and 60,000,000 shares of Buyer Preferred Stock, all par value $0.001 per
share, 10,000,000 of which are designated Series A Preferred Stock and
20,000,000 shares of  which are
designated Series B Preferred Stock.  Of
such authorized capital stock, 60,609,441 shares of Buyer Common Stock,
2,800,000 shares of Buyer Series A Preferred Stock and 3,600,000 shares of
Buyer Series B Preferred Stock are issued and outstanding.  All outstanding shares of Buyer Common Stock,
Buyer Series A Preferred Stock and Buyer Series B Preferred Stock have been
duly authorized, validly issued, fully paid and are nonassessable and free of
any liens or encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof.  The
shares of Buyer Common Stock to be issued pursuant to the transactions
contemplated herein will, upon issuance pursuant to the terms hereof, be duly
authorized, validly issued, fully paid, and non-assessable shares of Buyer
Common Stock.

3.3           Authority.  Buyer has full corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby.  This Agreement has been duly and validly
executed and delivered by Buyer and, assuming the due authorization, execution
and delivery hereof by the Company and Members, constitutes a legal, valid and
binding obligation of Buyer enforceable against Buyer in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
Laws relating to the enforcement of creditors’ rights generally and by general
principles of equity.  The execution,
delivery and performance of each of this Agreement and any agreements
contemplated hereby to which it is a party have been duly authorized by all
necessary action on the part of Buyer and its board of directors.

 

23

 

3.4           No
Conflicts.  The execution and
delivery by the Buyer of this Agreement and the ancillary agreements to which
it is or will be a party does not, and the performance by the Buyer of its
obligations under this Agreement and the ancillary agreements to which it is or
will be a party and the consummation of the transactions contemplated hereby
and thereby do not and will not conflict with or result in a violation or
breach of any provisions of the certificate of incorporation or bylaws of the
Buyer.

3.5           Finders and 
Brokers.  Except as set forth
on Schedule 3.5, Buyer has not entered into any contract, arrangement or
understanding with any Person, and is not aware of any claim or basis for any
claim based upon any act or omission of Buyer or any of its affiliates, which
may result in the obligation of Buyer to pay any finder’s fees, brokerage or
agent’s commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.

3.6           Buyer Consents. 
Other than approval and filings as required under the federal securities
laws or state securities laws or the rules or regulations of any exchange on
which Buyer’s Common Stock is listed or quoted, and except as set forth on Schedule
3.6, no consent, order, authorization, waiver, approval or any other action
by, or registration, declaration or filing with, any third party or Government
or Regulatory Authority is required for Buyer to execute and deliver the
Agreement and consummate the transactions contemplated hereby.

3.7           SEC Filings. 
Except as set forth on Schedule 3.7:

(a)           Buyer has filed with
the SEC on a timely basis all reports required to be filed with the SEC
(collectively, the “Buyer SEC Documents”),
provided that all filings made in accordance with Rule 12b-25 shall be deemed
filed on a timely basis.

(b)           As of its filing
date, each Buyer SEC Document complied as to form in all material respects with
the applicable requirements of the Securities Act of 1933 (“1933 Act”) and the Securities and Exchange Act of 1934 (“Exchange Act”), as the case may be.

(c)           As of its filing
date, each Buyer SEC Document filed pursuant to the Exchange Act did not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.

(d)           Each Buyer SEC
Document that is a registration statement, as amended or supplemented, if
applicable, filed pursuant to the 1933 Act, as of the date of such registration
statement or amendment became effective, did not contain any untrue statement
of material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.

3.8           Financial Statements of Buyer.  Except as set forth on Schedule 3.8,
all financial statements of Buyer, on the EDGAR Database on www.sec.gov, were
prepared in accordance with GAAP on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto), are correct and
complete in all material respects and each present fairly, in all material
respects, the financial position of Buyer as at the respective dates thereof
and for the respective periods indicated therein, except as otherwise noted
therein (subject, in the case of unaudited statements, to normal and recurring
immaterial year-end adjustments).  The Buyer’s financial statements, to
the extent required under applicable U.S. Securities and Exchange Commission (“SEC”) rules  and
regulations, have been filed with the SEC.

 

24

 

3.9           Litigation.  Except as set forth in the Buyer SEC
Documents, there is no Action or Proceeding pending against, or, so far as is
known to Buyer, threatened against Buyer or any of its respective properties or
assets, nor is there any judgment outstanding against Buyer or by which Buyer
or any of its properties or assets is subject or bound, which could reasonably
be expected to prevent Buyer from consummating any of the transactions
contemplated hereby.

3.10         Disclosure.
Buyer has had full access to the Company’s officers, Members, managers,
employees, records, and facilities to the extent the Buyer has deemed necessary
to enable the Buyer to fully evaluate the merits and risks of the transactions
contemplated by this Agreement.

3.11         No
Representation.  Buyer acknowledges
that neither the Members nor the Company, nor any agents or representatives
acting on behalf thereof, have made any representations and warranties of any
type or nature whatsoever with respect to any fact or other matter relating to
the condition or value of the Interests, assets or business of the Company,
other than as specifically set forth in this Agreement, the Company
Disclosure Schedules,  or any certificate or document delivered
in connection with this Agreement.  Nothing in the preceding
sentence shall be construed to limit any remedy Buyer may have against any
Person for fraud or intentional misrepresentation on the basis of acts or
omissions in connection with the transactions contemplated by this
Agreement.    Buyer further acknowledges that it is not relying
on any financial projections that it has received from any party and that
neither the Members nor the Company have made any representations and
warranties of any type or nature whatsoever with respect to any financial
projections.

ARTICLE 4

CONDUCT PRIOR TO THE CLOSING

4.1           Conduct
of Business of the Company.  Company
and Members agree that during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement pursuant to
the provisions of Section 8.1 hereof or the Closing, the Company, each
Company Subsidiary and the Affiliated Company shall each (unless otherwise
required by this Agreement or Buyer has given its prior written consent to
Company) carry on its business in the ordinary course consistent with past
practice to pay its
Liabilities and Taxes consistent with its past practices, to pay or perform
other obligations consistent with its past practices, subject to any good faith
disputes over such Liabilities, Taxes and other obligations and to use
reasonable efforts to preserve intact its present business organization, keep
available the services of its present officers and key employees, preserve its
relationships and goodwill with customers, suppliers, distributors, licensors,
licensees, independent contractors and other Persons having business dealings
with it and to cause its Subsidiaries to do the same.

 

25

 

Except as expressly
contemplated by this Agreement or disclosed in Schedules, the Company (and each
of the Members with respect to subsection (d) below) shall not, without
the prior written consent of the Buyer, voluntarily take or agree in writing or
otherwise to:

(a)           any
of the actions described in Section 2.7 hereof; provided, however,
that the Company may distribute cash held by the Company to the Members.

(b)           any
other action that would make any of its representations or warranties contained
in this Agreement untrue or incorrect or prevent the applicable party (or
parties) from performing or cause the applicable party (or parties) not to
perform its agreements and covenants hereunder;

(c)           [Reserved];

(d)           the
Members shall not sell, assign, transfer, pledge or encumber the Interests;

(e)           enter
into any commercial relationships of any kind that are not in effect at the
date hereof with Members or their Affiliates, except as required by this
Agreement, including, without limitation, the Domestic Lease and the Foreign
Lease;

(f)            the making or changing of any election in
respect of Taxes, adoption or change in any accounting method in respect of
Taxes, the entering into of any tax allocation agreement, tax sharing
agreement, tax indemnity agreement or closing agreement, settlement or
compromise of any claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes with any Tax Authority or otherwise, except for any
of the foregoing which would not reasonably be expected to give rise to a
Material Adverse Effect on the Company; or

(g)           any action that will cause a termination
of the Company’s election to be treated an “S corporation” under Section 1362
of the Code.

4.2           No Solicitation.

(a)           From
and after the date of this Agreement until the earlier of the Closing or the
termination of this Agreement pursuant to its terms, neither the Company Group
nor the Members will, nor will they authorize or permit any of their respective
officers, managers, Affiliates or employees or any investment banker, attorney
or other consultant, advisor or representative retained by any of them to,
directly or indirectly, (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Acquisition Proposal,
(ii) participate in any discussions or negotiations regarding, or furnish
to any Person any nonpublic information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) approve, endorse or recommend any Acquisition Proposal or
(iv) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any Acquisition
Proposal.  The Company Group and the
Members will immediately cease any and all existing activities, discussions or
negotiations with any Persons conducted heretofore with respect to any
Acquisition Proposal.  Without limiting
the foregoing, it is understood that any violation of the restrictions set
forth in the preceding two sentences by the Company Group, or by any officer,
manager, affiliate or employee of the Company Group ,or any Member or any
investment banker, attorney or other consultant, advisor or representative of
the Company Group, or either Member shall be deemed to be a breach of this Section
4.2 by the Company.

 

26

 

(b)           In
addition to the obligations of the Company and the Members set forth in Section
4.2(a), each of the Company and the Members as promptly as practicable, and
in any event within 24 hours of its receipt, shall advise Buyer orally and in
writing of an Acquisition Proposal or any request for nonpublic information or
other inquiry which the Company Group or such Member reasonably believes would
lead to an Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal, request or inquiry, and the identity of the Person or
group making any such Acquisition Proposal, request or inquiry.  The Company Group and the Members will keep
Buyer informed as promptly as practicable in all material respects of any
material amendments or proposed amendments of any such Acquisition Proposal,
request or inquiry.

“Acquisition Proposal” shall mean any written offer or
proposal (other than an offer or proposal by Buyer) relating to, or
involving:  (A) any acquisition or
purchase by any Person or “group” (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) of more than 1% of the
Interests or any other equity interests of the Company; (B) any merger,
consolidation, Business Combination or similar transaction involving the
Company  pursuant to which the Members of
the Company immediately preceding such transaction hold less than 90% of the
Interests or other equity interests in the surviving or resulting entity of
such transaction; (C) any sale, lease, exchange, transfer, license (other than
in the ordinary course of business), acquisition, or disposition of any
material assets of the Company; or (D) any liquidation or dissolution of the
Company.

ARTICLE 5

ADDITIONAL AGREEMENTS

5.1           Access
to Information.  Between the date of
this Agreement and the earlier of the Closing or the termination of this
Agreement, upon reasonable advance notice given to the Company, the Company
will (i) give Buyer and its respective officers, employees, accountants,
counsel, financing sources and other agents and representatives reasonable
access during normal business hours to all buildings, offices, and other
facilities of the Company Group and to the extent permitted by law to all Books
and Records of the Company Group, regardless of where located; (ii) permit
Buyer to make such inspections as it may require; (iii) cause its officers
to furnish Buyer such financial, operating, technical and product data and
other information with respect to the business and Assets and Properties of the
Company Group as Buyer from time to time may reasonably request to verify the
representations and warranties provided herein, continue due diligence and for
integration planning purposes, including without limitation financial
statements and schedules; (iv) allow Buyer the reasonable opportunity to interview
the Members and those individuals set forth on Schedule 5.1 during normal business hours with the
Company’s prior consent, which consent will not be unreasonably withheld or
delayed; and; (v) allow Buyer the reasonable opportunity to interview
the Major Customers; and (vi) reasonably assist and cooperate with
Buyer in the development of integration plans for implementation by Buyer and
the Company following the Closing, provided, however, that no investigation pursuant to
this Section 5.1 will affect or be deemed to modify any representation
or warranty made by the Company or the Members herein, and provided
further  that such assistance
and cooperation does not materially interfere with any operations of the
Company.

5.2           Confidentiality.  Except as otherwise required by law or court
order, the parties, their agents, representatives and employees shall protect
and maintain the confidentiality of all matters related to and contemplated by
this Agreement and the agreements executed and delivered in connection
herewith, including any documents and information exchanged by the parties in
connection herewith (“Confidential Matters”),
with the same care utilized in the protection of their own confidential or
proprietary information.  Furthermore,
the parties agree to reveal the Confidential Matters only to their agents,
representatives and employees who need to know the Confidential Matters for the
purpose of consummating the transaction contemplated hereby, who are informed
of the confidential nature of the Confidential Matters, and who agree to act in
accordance with the terms and conditions of this Section 5.2. In the
event that either of the parties or any of their agents, representatives or
employees becomes compelled by court order to disclose any of the Confidential
Matters, such party shall provide timely written notice so that the other party
may seek a protective order or other appropriate remedy. This Section 5.2
shall not restrict Buyer’s right to interview the Members, Major Customers or
those individuals set forth on Schedules 5.1  provided
that no Confidential Matters shall be disclosed by Buyer in connection
therewith.  Further, information
disclosed by Buyer to Members regarding the business and plans of Buyer may
constitute or include material non-public information concerning Buyer.  The Members acknowledge that the federal
securities laws prohibit a person who has material, non-public information from
purchasing or selling securities of any company to which such information
relates, and such material non-public information may not be communicated to
any other person.

 

27

 

5.3           Expenses.  Each party hereto shall each bear the costs
and expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby (including fees and disbursements of
investment bankers, brokers, dealers, finders, other financial advisors,
attorneys and accountants), subject to Section 1.1(d).  Notwithstanding anything to the contrary
herein, in the event that the transactions contemplated by this Agreement are
not consummated or this Agreement is terminated for any reason other than (i) a
Member’s termination due to Buyer’s willful failure to fulfill any obligation
hereunder or Buyer’s failure to cure a breach in accordance with Section
8.1(d), (ii) a failure of the conditions in Sections 6.3(d) and 6.3(o)
or (iii) as a result of the termination of a Contract of a Major Customer
arising from any interview that Buyer conducts with such Major Customer (each
instance a “Forced Termination by Buyer”), the
Company shall be solely responsible for the Company Transaction Costs.  In the event of a Forced Termination by
Buyer, Buyer shall pay Members an amount equal to Company Transaction Costs
plus the Audit Fees, provided that such amount shall be capped at $250,000.

5.4           Public
Disclosure.  The parties agree that
prior to making any public announcement with respect to this Agreement or any
other matter relating to the transactions contemplated hereby, each will
consult with the other and will use reasonable efforts either to agree upon the
text of a proposed joint announcement or to obtain the other’s approval of the
text of an announcement to be made solely on behalf of such party, provided
that any party may make such disclosures or statements as it reasonably
believes, after consulting with counsel, may be required by Law or any stock
exchange, though the disclosing party will provide advance notice to the other
party of such required disclosure as far in advance as is reasonably
practicable.

5.5           Approvals.  The Company will obtain the Approvals, if
any, from Governmental or Regulatory Authorities or under any of the Contracts
or other agreements as may be required in connection with the transactions contemplated
hereby as to preserve all rights of and benefits to the Company thereunder.

5.6           Notification
of Certain Matters.  The Company and
the Members will give prompt notice to Buyer, and Buyer will give prompt notice
to the Company and the Members, of (i) the occurrence or non-occurrence of
any event, the occurrence or nonoccurrence of which would  cause any representation or warranty of the
Company, Members, or the Buyer contained in this Agreement to be untrue or
inaccurate at or prior to the Closing Date and (ii) any failure of the
Company, Members, or Buyer, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this Section
5.6 will not limit or otherwise affect any remedies available to the party
receiving such notice.

5.7           Additional Documents and Further
Assurances.  Each party hereto, at the request of the
other party hereto, will execute and deliver such other instruments and
documents and do and perform such other acts and things (including, but not
limited to, all action reasonably necessary to seek and obtain any and all
consents and approvals of any Government or Regulatory Authority or Person, if
any are necessary hereunder; provided, however, that Buyer will not be
obligated to consent to any divestitures or operational limitations or
activities in connection therewith and no party will be obligated to make a
payment of money as a condition to obtaining any such condition or approval) as
may be reasonably necessary or desirable for effecting completely the
consummation of this Agreement and the transactions contemplated hereby.

 

28

 

5.8           Company’s
Accountants.  The Company and the
Members will use commercially reasonable efforts to cause the Company’s
management and its accountants to complete on an expedited basis the
preparation of (a) the audited balance sheet and statements of operations
and cash flows in accordance with GAAP, consistently applied, of the Company as
of and for each of the fiscal years ended December 31, 2006 and 2005 (the “Audited Financial Statements”), (b) the unaudited
balance sheet and statements of operations and cash flows in accordance with
GAAP, consistently applied, of the Company as of and for the nine months ended
September 30, 2007 (the “Nine Month Financial
Statements” and, collectively with the Audited Financial Statements,
the “Closing Financial Statements”) and (c)
the Closing Estimates.  In the event the
Closing has not occurred prior to December 31, 2007, the Company and the
Members will use commercially reasonable efforts to cause the Company’s
management and its accountants to complete on an expedited basis the
preparation of (a) the audited balance sheet and statements of operations
and cash flows of the Company as of and for the fiscal year ended December 31,
2007 in lieu of the Nine Month Financial Statements.

5.9           Commercially
Reasonable Efforts.  Each party
hereto will use its commercially reasonable efforts to perform and fulfill all
obligations to be performed and fulfilled under this Agreement, and to cause
all conditions precedent to the consummation of the transactions to be timely
satisfied, to the end that the transactions contemplated by this Agreement will
be consummated substantially in accordance with its terms.

5.10         Agreement to Defend and Indemnify. 
Buyer will cause all rights to indemnification by the Company in favor
of the Members and the officers of the Company set forth on Schedule 5.10
(hereinafter referred to as the “Company Indemnified
Parties”) as provided in the Company’s operating agreement or
pursuant to other instruments or agreements set forth on Schedule 5.10
in effect on the date hereof, to survive the Closing and to continue in full
force and effect following the Closing Date until the expiration of the
applicable statute of limitations; provided, however, Buyer shall
not be liable under the foregoing indemnity for any loss, claim, damage or liability
which is finally judicially determined to have resulted primarily from the
misrepresentation, willful misconduct, gross negligence of, or fraud
perpetrated by, Company Indemnified Parties or under any other exception to
indemnification under law or the documents set forth on Schedule 5.10.  The covenants contained in this Section 5.10
will survive the Closing Date until fully discharged and are intended to
benefit each of the Company Indemnified Parties.

5.11         Employment Matters.

(a)           Buyer
agrees that each employee of the Company who continues employment with the
Company after the Closing Date shall be provided with healthcare benefit
coverage and 401K Plan participation substantially similar in the aggregate to
the healthcare benefit and 401K Plan participation provided to peer employees
of Buyer of similar position and seniority, subject in each case to the terms
of the applicable plan.

 

29

 

(b)           The
Parties acknowledge and agree that all provisions contained in this Section 5.11
are included for the sole benefit of the Parties and shall not create any right
(i) in any other Person, including any employees, any participant in any
employee benefit plan, agreement, program, policy or other arrangement or any
beneficiary thereof or (ii) to continued employment with the Company Group
and the Buyer.  After the Closing,
nothing contained in this Agreement shall interfere with the Buyer’s or any
Company Group’s rights to amend, modify or terminate any Benefit Plan or any
employee benefit plan, agreement, program, policy or other arrangement
currently or subsequently maintained by Buyer or the Company Group or to
terminate the employment of any employee of Buyer or the Company Group for any
or no reason; provided, however, that the Chander Employment Agreement shall
govern the terms of Chander’s post-Closing employment with the Company.

5.12         Certain
Tax Matters.  The Company and each Member hereby covenant
and agree with respect to certain Tax matters, as follows:

(a)           Filing of Tax Returns.

(i)            Unless Buyer otherwise elects in a timely
fashion, the Members shall prepare and file (or cause to be prepared and filed)
on a timely basis all Tax Returns with respect to the Company, its Subsidiaries
and the Affiliated Company for all taxable periods ending on or before the
Closing.  Such Tax Returns shall be
prepared in a manner consistent with and utilizing the accounting methods
utilized in the preparation of the prior Tax Returns of the Company, its
Subsidiaries and the Affiliated Company. 
The Members shall submit all such Tax Returns to Buyer for its review at
least twenty (20) business days prior to filing and shall not file such Tax
Returns without the Buyer’s prior consent, which consent shall not be
unreasonably withheld, delayed or conditioned.

(ii)           Buyer shall prepare and file (or cause to
be prepared and filed) on a timely basis all Tax Returns of the Company and any
Person included in the Company Group relating to taxable periods ending after
the Closing.

(b)           Tax Covenants.

(i)            All Tax sharing agreements or similar
agreements with respect to or involving the Company shall be terminated as of
the Closing Date and, after the Closing Date, the Company shall not be bound
thereby or have any liability thereunder.

(ii)           Except with respect to any stock transfer
or similar taxes (which shall be paid by the Members), any documentary, stamp,
transfer, sales, use, registration and other such Taxes and any conveyance
fees, recording charges and other fees and charges (collectively, “Transfer Taxes”) incurred in connection with this Agreement,
and any penalties or interest with respect to the Transfer Taxes shall be paid
by the Buyer, and the Buyer will prepare and file all necessary Tax Returns and
other documentation with respect to such Transfer Taxes and, if required by
applicable laws, the Members will, to the extent necessary, join in the
execution, and otherwise use commercially reasonable efforts to cooperate in
the preparation of, any such Tax Returns and documentation.  Buyer and the Members agree to use their best
efforts to obtain any certificate or other document from any governmental
authority or any other Person as may be necessary to negotiate, reduce or
eliminate any such Tax that could be imposed (including, but not limited to,
with respect to the transactions contemplated herein).

(iii)          Each of the Members
and Buyer will reasonably cooperate with each other in connection with the
filing of Tax Returns or amended Tax Returns, the preparation for any audit by
any taxing authority, the filing of any refund claim for Taxes, the response to
any inquiry by a Tax authority, the mailing or filing of any notice and the
prosecution or defense of any claim, suit or proceeding relating to any Tax
Return or any other filing required to be made with any Tax Authority or any
other matter, in each case, with respect to Taxes relating to the Company,
any  Subsidiary or the Affiliated
Company, as and to the extent reasonably requested by the Members or
Buyer.  The parties agree, upon
reasonable request, to use their commercially reasonable efforts to obtain any
certificate or other document from any Tax Authority or any other person as may
be necessary to mitigate, reduce or eliminate any Tax that would be imposed as
a result of the transactions contemplated by this Agreement.

 

30

 

(iv)          The Members will
consult with Buyer prior to the formation of any new Subsidiary pursuant to Section
5.15 and will allow Buyer to control the status of such Subsidiary or
Subsidiaries for U.S. Tax purposes. 
Without limiting the foregoing, Buyer shall have the right to cause any
such Subsidiary to file an election to elect its Tax status for U.S. tax
purposes, to the extent such Subsidiary is otherwise eligible to do so.

(c)           Section 338(h)(10) Election.

(i)            If so requested by Buyer upon notice to
the Members on or before the date that is four (4) months after the date
hereof, and if agreed to by the Members as hereinafter conditioned, Buyer and
the Members shall jointly make a Section 338(h)(10) Election in accordance with
applicable laws (and under any comparable provision of state, local or foreign
law for which a separate election is permissible) and as set forth herein.  In the case a Section 338(h)(10) Election is
agreed to, Buyer and the Members agree to cooperate in good faith with each
other in the preparation and timely filing of any Tax Returns required to be
filed in connection with the making of such an election, including the exchange
of information and the joint preparation and filing of Form 8023 and related
schedules.  Buyer and the Members agree
to report the transfers under this Agreement consistent with such elections, if
made, and shall take no position contrary thereto unless required to do so by
applicable Tax law or pursuant to a determination as defined in Section 1313(a)
of the Code.

(ii)           Subject to Section 5.12(c)(iii)
below, Buyer shall be responsible for the preparation and filing of all Section
338 Forms in accordance with applicable Tax laws and the terms of this
Agreement and shall deliver such Section 338 Forms to the Members at least
forty-five (45) days prior to the date such Section 338 Forms are required to
be filed.  Provided that the requirements
of Section 5.12(c)(iii), below are met, the Members shall execute and
deliver to Buyer such documents or forms (including executed Section 338 Forms)
as are requested and are required by any laws in order to properly complete the
Section 338 Forms at least twenty (20) days prior to the date such Section 338
Forms are required to be filed.  The
Members shall provide Buyer with such information as Buyer reasonably requests
in order to prepare the Section 338 Forms by the later of thirty (30) days after
Buyer’s request for such information or thirty (30) days prior to the date on
which Buyer is required to deliver such forms to Seller.

 

31

 

(iii)          Buyer shall determine the “Aggregate
Deemed Sales Price” (as defined under applicable Treasury Regulations) and the
allocation of such Aggregate Deemed Sales Price among the assets of the Company
(hereinafter, the “Allocation”), and shall deliver a statement setting
forth the Allocation to the Members at least forty-five (45) days prior to the
date on which the Section 338 Forms referred to in Section 5.12(c)(ii),
above are required to be filed.  The
Allocation shall be binding on the Members unless the Members shall, within ten
(10) days of delivery to the Members of the Allocation, conclude in good faith
that the Allocation is unreasonable. 
Such allocation of the Aggregate Deemed Sales Price shall be made in
accordance with Section 338(b) of the Code and any applicable Treasury
Regulations.  Buyer shall be under no
obligation to have such Allocation prepared by an independent appraiser.  The Members and Buyer (i) shall be bound by
such Allocation for purposes of determining any Taxes, (ii) shall prepare and
file all Tax Returns (including, but not limited to, the Section 338 Forms) to
be filed with any Tax Authority in a manner consistent with such Allocation,
and (iii) shall take no position inconsistent with such Allocation in any Tax
Return, any proceeding before any Tax Authority or otherwise, unless required
to do so by applicable law or pursuant to a determination as defined in Section
1313(a) of the Code.  In the event that
such Allocation is disputed by any Tax authority, the party receiving notice of
such dispute shall promptly notify and consult with the other party concerning
resolution of such dispute.  To the
extent that the Purchase Price is adjusted by reason of any payment under this
Agreement, (i) the Aggregate Deemed Sales Price shall be adjusted to reflect
such change, (ii) the provisions of this Section 5.12(c)(iii) shall be
followed in redetermining the Allocation, and (iii) the parties will, to the
extent required by applicable law, file amended Tax Returns consistent with
such revised allocation.  As soon as
reasonably practicable after (but in any event not more than fifteen (15) days
following) receipt of the Allocation, the Members shall prepare and submit to
Buyer a good-faith and reasonable calculation of the amount or amounts payable
by Buyer to the Members (“Members’ Estimated Incremental Tax Liability”)
pursuant to Section 5.12(c)(vi). 
Buyer shall fund the Tax Escrow on behalf of the Members in the amount
of the Members’ Estimated Incremental Tax Liability, so long as the Members
have timely delivered to Buyer the Members’ Estimated Incremental Tax
Liability, at which time Members shall return the executed Section 338 Forms to
Buyer.  In the event of a dispute between
Buyer and the Members as to the proper calculation of such amount or amounts,
the parties shall cooperate with each other to mutually resolve such dispute in
a reasonable manner; provided, however, that in the event the parties still
disagree in good faith, as soon as reasonably practicable, the disputed matter
shall be submitted to a mutually agreed upon nationally recognized Accounting
Firm (that does not have a relationship with either party) for final
determination.  Buyer shall fund the Tax
Escrow notwithstanding the possibility that there exists a dispute regarding
the proper calculation of the Members’ Estimated Incremental Tax Liability. In
this regard, the Members will provide Buyer and its designated representatives
with such assistance and such documents reasonably requested by them that are
relevant to their ability to confirm or determine the amount of any payment or
payments to be made hereunder.  The costs
of such determination shall be borne by the Buyer.  If it is determined that the Tax Escrow
contains any amounts in excess of the amount actually due under Section
5.12(c)(vi), then either (i) the Tax Escrow will be reduced in an amount
equal to such excess or (ii) the Members shall return such amount, if already
released from the Tax Escrow, no later than five (5) business days after Buyer
and the Members have agreed upon the amount due or the amount due has been
finally determined by the Accounting Firm.

(iv)          If Buyer elects to make a Section
338(h)(10) Election, the Members shall timely join such election if either (i)
Buyer has met the requirements of Section 5.12(c)(iii) by funding the
Tax Escrow on behalf of the Members or (ii) the Members fail to timely deliver
a calculation of the amount or amounts payable by Buyer to the Members as
required by Section 5.12(c)(iii).

(v)           Notwithstanding any other provision of
this Agreement to the contrary, the Members agree that any income and gain
recognized as a result of the making of the Section 338(h)(10) Election will be
included in their Tax Returns and any resulting Tax liability will be paid by
the Members.   The Members further agree
that they will pay and be responsible for, and will indemnify and save Buyer
and the Company harmless from, any Income Taxes imposed on Buyer and the
Company by any state or local Tax authority resulting from Buyer’s election to
treat the purchase of the Interests as an asset acquisition under the statutes
of any such Tax Authority (whether or not such Tax Authority provides for an
election similar in nature to the Section 338(h)(10) Election).

(vi)          In the event that a
Section 338(h)(10) Election is made with respect to the sale of the
Interests to Buyer hereunder, but except to the extent attributable to any Tax
liability resulting from the application of Section 1374 of the Code (or
corresponding provisions of state and local law), Buyer shall pay to the
Members (or there shall be released from the Tax Escrow) all such additional
amounts as are necessary to put the Members in the same after-tax position
following receipt of all payments under this Agreement as if no Section
338(h)(10) Election had been made (i.e., the Members shall be grossed-up for
their Tax liabilities), including any amounts that may result from a dispute
with a Tax authority referred to in Section 5.12(c)(iii) and any
additional payments of Purchase Price paid to the Members out of the Working
Capital Escrow or the Earn-Out Escrow.

 

32

 

5.13         Conversion of Shares.  In the event of
a  merger, reorganization, exchange of stock, or
other Business Combination between the Buyer and another Person (an “Acquiring Entity”), any Closing Shares
and Escrow Shares issued to each Member shall be exchanged for equity
securities of the Acquiring Entity in accordance with the exchange ratio
applicable to such Business Combination.

5.14         Buyer Required Consent.  Buyer
will use its commercially reasonable efforts to obtain the consent of the
Person identified on Schedule 3.6 to the transactions contemplated by
this Agreement (the “Buyer Required Consent”)
prior to the Closing.

5.15         Company Operations. 
Prior to Closing the Company shall create a new wholly-owned Subsidiary
organized in India.

5.16         Registration.  Buyer shall execute and deliver a
registration rights agreement with the Members, that will provide the Members
with customary piggyback registration rights for all Closing Shares and, to the
extent earned and issued to the Members, all Escrow Shares in the event that Buyer shall determine to register any of
its shares of Common Stock for its own account or for the account of other
shareholders, or both (other than a registration relating solely to employee stock option or purchase
plans on Form S-1, S-3 or S-8, or any successor form, or for any other
similar limited purpose).  The
registration rights agreement shall also provide that all expenses incurred in
connection with any registration shall be borne by Buyer, provided, however,
that Buyer shall not be required to pay underwriters’ fees, discounts,
commissions or transfer taxes relating to the Closing Shares and/or the Escrow
Shares. The registration rights agreement shall also provide that the Members’
rights to registration shall be subordinate to all other registration rights
that holders of Buyer’s Common Stock have as of the date hereof, and that in
the event of an underwritten offering, if marketing factors require the
reduction in the number of shares of Common Stock to be so registered, that the
Closing Shares and, to the extent earned and issued to the Members, all Escrow
Shares, shall be cut back prior to any shares of Buyer and those of any other
holder of Buyer’s Common Stock with superior rights.

ARTICLE 6

CONDITIONS TO THE ACQUISITION

6.1           Conditions to Obligations of Each Party to Effect the
Transaction.  The respective
obligations of each party to this Agreement to effect the transactions
contemplated hereby will be subject to the satisfaction at or prior to the
Closing of the following conditions:

(a)           No
Injunctions or Regulatory Restraints; Illegality.  No temporary restraining order, preliminary
or permanent injunction or other Order issued by any court of competent
jurisdiction or Governmental or Regulatory Authority or other legal or
regulatory restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; nor shall there be any
action taken, or any Law enacted, entered, enforced or deemed applicable to the
transactions contemplated hereby or the other transactions contemplated by the
terms of the Agreement that would prohibit the consummation of the transactions
contemplated hereby or which would permit consummation of the transactions
contemplated hereby only if certain divestitures were made or if Buyer were to
agree to limitations on its business activities or operations.

(b)           Legal
Proceedings.  No Governmental or
Regulatory Authority will have notified any party to this Agreement that it
intends to commence proceedings to restrain or prohibit the transactions
contemplated hereby or force rescission, unless such Governmental or Regulatory
Authority will have withdrawn such notice and abandoned any such proceedings
prior to the time which otherwise would have been the Closing Date.

 

33

 

(c)           Domestic Lease.  The Buyer and Members will have entered into
a lease that is commercially reasonable and mutually acceptable to the parties
with respect to the Domestic Real Property (the “Domestic
Lease”).

(d)           Foreign Lease. Company will
have entered into a lease that is commercially reasonable and mutually
acceptable to the parties with respect to the Foreign Real Property (the “Foreign Lease”).

(e)           Escrow
Agreement.  The Buyer,
the Company and each Member shall have executed the Escrow Agreement in a form
and on terms reasonably acceptable to each of them.

6.2           Additional
Conditions to Obligations of the Company and Members.  The obligations of the Company and Members to
effect the transactions contemplated hereby will be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by the Company and Members:

(a)           Representations
and Warranties.  Each of the
representations and warranties made by Buyer in this Agreement shall be true
and correct  in all material respects
when made and on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, except that any representation
or warranty that expressly speaks as of a specified date earlier than the
Closing Date shall have been true and correct in all material respects on and
as of such earlier date.

(b)           Performance.  Buyer shall have performed and complied in
all material respects with each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by Buyer at or before the
Closing Date.

(c)           Officers’
Certificates.  Buyer will have
delivered to the Company a certificate or certificates, dated the Closing Date
and executed by its respective President and/or its Chief Executive Officer,
certifying as to Buyer’s compliance with the condition set forth in Section
6.2(a).

(d)           [Reserved]

(e)           No Material
Adverse Effect.  There will
have occurred no Material Adverse Effect on Buyer since the date hereof.

6.3           Additional
Conditions to the Obligations of Buyer. 
The obligations of Buyer to effect the transactions contemplated hereby
will be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively
by Buyer:

(a)           Representations
and Warranties.  Each of the
representations and warranties made by the Company and Members in this Agreement
shall be true and correct in all material respects when made and on and as of
the Closing Date as though such representation or warranty was made on and as
of the Closing Date, except that any representation or warranty that expressly
speaks as of a specified date earlier than the Closing Date shall have been
true and correct in all material respects on and as of such earlier date.

 

34

 

(b)           Performance.  The Company shall have performed and complied
in all material respects with each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by the Company on or
before the Closing Date.

(c)           Officers’
Certificates.  The Company and
Members shall have delivered to Buyer a certificate or certificates, dated the
Closing Date and executed by the President and/or the Chief Executive Officer
of the Company, certifying as to the Company’s and the Members’ compliance with
the condition set forth in Section 6.3(a) and (b) above.

(d)           Acquisition Financing. 
Buyer shall have obtained the financing necessary to fund the cash
consideration pursuant to this Agreement and to satisfy all of its obligations
under this Agreement on such other terms as are customary for transactions of
such type and in a form and on terms 
acceptable to Buyer.

(e)           Third
Party Consents.  Buyer will have been
furnished with evidence reasonably satisfactory to it that the Company has
obtained the consents, approvals and waivers, if any, listed in Schedule 6.3(e).

(f)            Non-Competition
Agreement.  Each of the Members shall
have executed and delivered to Buyer a Non-Competition Agreement in
substantially the forms attached hereto as Exhibit A.

(g)           General
Release.  Each of the Members shall
have executed and delivered to Buyer a General Release in substantially the
forms attached hereto as Exhibit B.

(h)           Escrow
Agreement.  The parties will have
entered into the Escrow Agreement with the Escrow Agent in substantially the
form attached hereto as Exhibit C.

(i)            Employment
Agreement.  Chander shall have
executed and delivered to Buyer an Employment Agreement in substantially the
form attached hereto as Exhibit D (the “Chander
Employment Agreement”).

(j)            No
Material Adverse Effect.  There will
have occurred no Material Adverse Effect on the Company since the date hereof.

(k)           Proceedings
and Documents.  All corporate and
other proceedings in connection with the transactions contemplated hereby and
all documents and instruments incident to such transactions will be in form and
substance reasonably satisfactory to Buyer and its counsel, and Buyer will have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.

(l)            Audit.     Company shall have completed an audit of
Company and shall have delivered to Buyer true and complete copies of the
Closing Financial Statements.  Such
Closing Financial Statements shall each be audited and shall be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) except that the Nine
Month Financial Statements shall have been reviewed by the Company’s auditor
and are not required to contain any of the footnotes required by GAAP.  The Closing Financial Statements will present
fairly and accurately the financial condition and operating results of the
Company as of the dates and during the periods indicated therein.  In the event the Closing has not occurred
prior to December 31, 2007, the Company shall have received (a) an audited
balance sheet and statements of operations and cash flows of the Company as of
and for the fiscal year ended December 31, 2007.  The Closing Financial Statements shall not
differ materially from the Company Financial Statements. For purposes of this
paragraph, a material difference shall mean: (i) total revenue that is more
than 5% lower than the total revenue as set forth in the Company Financial
Statements, (ii) total expenses that are more than 5% higher than the total
expenses set forth in the Company Financial Statements, and (iii) net income
that are more than 5% lower than the net income set forth in the Company
Financial Statements or Affiliated Entity Financial Statements, as applicable.

 

35

 

(m)          CFO
Certificate.  The Company shall have
delivered to Buyer a certificate signed on behalf of the Company by the Company’s
Chief Financial Officer setting forth the Closing Estimates  and the Company Transaction Costs.

(n)           FIRPTA Certificate. 
Each of the Members shall have delivered to the Buyer at the Closing a
certification of non-foreign status meeting the requirements of Treasury
Regulation Section 1.1445(b)(2), duly executed and acknowledged, substantially
in the form of the sample certificates set forth in Treasury Regulation Section
1.1445-2(b)(2)(iv).

(o)           Buyer Required
Consent.  Buyer shall have obtained the
Buyer Required Consent.

(p)           Employees.  All of the employees listed in Schedule
5.1 will be employed by the Company at the Closing (and will have not given
any notice or other indication that they will not continue to be willing to be
employed or retained by the Company as a wholly-owned subsidiary of Buyer
following the transactions contemplated hereby).

ARTICLE 7

INDEMNIFICATION

7.1           Survival
of Representations, Warranties, Covenants and Agreements.  All representations and warranties made by
any party in this Agreement and in any certificate delivered pursuant to this
Agreement shall survive the Closing and remain in full force and effect until
the first anniversary of the Closing Date (the “Representation
Termination Date”); provided, however that the
representations and warranties in (i) Section 2.3 (Capitalization)
shall survive indefinitely, (ii) the representations and warranties
contained in Section 2.10 (Taxes) will survive until sixty (60) days
following the expiration of the statute of limitations applicable to claims
with respect to the matters covered thereby, and (iii) if at any time
prior to the Representation Termination Date or any later date on which any
applicable representations terminate as set forth in (i) and (ii) above (the “Later Date”) , Buyer delivers to Members’ Representative a
notice stating the existence of a breach in any of the representations and warranties
made by the Company and/or the Members, or a breach of a covenant made by the
Company and/or the Members and asserting a claim for recovery under this Article
7 based on such breach, then the claim asserted in such notice shall
survive the Representation Termination Date or the Later Date until such time
as such claim is fully and finally resolved. All obligations of the Parties
under the covenants contained herein shall survive (y) until fully
performed or fulfilled, unless non-compliance with such covenants, agreements
or obligations is waived in writing by the Party entitled to such performance
or (z) if not fully performed or fulfilled, until the expiration of the
applicable statute of limitations.  Notwithstanding
anything to the contrary herein, the limitations in this Section 7.1
shall not apply under circumstances involving fraud or willful misconduct by
the Company or the Members, in which case a limitation equal to the applicable
statute of limitations will apply.

7.2           Indemnification.

(a)           Subject to the terms
and conditions of this Article, the Members will jointly and severally
indemnify and hold harmless Buyer and its officers, directors, stockholders,
affiliates, attorneys, agents and subsidiaries, including officers and
directors of any Buyer subsidiaries (hereinafter referred to individually as a “Buyer Indemnified Person” and collectively as “Buyer Indemnified Persons”) from and against any and all
Losses arising out of (i) any misrepresentation in or breach or alleged
breach of the representations or warranties given or made by the Company or any
Member in this Agreement, or any certificate, instrument or document delivered
by the Company or any Member pursuant to this Agreement; (ii) any breach
or alleged breach of any covenant or agreement of the Company or the Members in
this Agreement; (iii) the amount of any Company Debt on the Closing Date
to the extent such amount is not deducted in calculating the Closing Cash
Consideration; (iv) the amount by which the Working Capital Deficit exceeds the
Working Capital Reserve; (v) all Pre-Closing Taxes; and (vi) the Company
Transaction Costs to the extent such amount has not been paid by the Company or
the Members prior to Closing or deducted in calculating the Closing Cash
Consideration.

 

36

 

(b)           Buyer
shall indemnify and hold harmless each of the Members and each of their
respective, affiliates, attorneys and agents 
(each, a “Member Indemnified Person” and,
collectively, “Member Indemnified Persons”) from
and against any and all Losses arising out of (i) any misrepresentation in or
breach of the representations, warranties, covenants and agreements given or
made by Buyer in this Agreement, or any certificate, instrument or document
delivered by Buyer pursuant to this Agreement; and (ii) the Working
Capital Surplus, if any.

(c)           No investigation made by or on behalf of
Buyer with respect to the Company Group or the Members shall be deemed to
affect Buyer’s reliance on the representations, warranties, covenants and
agreements made by the Company or the Members contained in this Agreement and
shall not be a waiver of Buyer’s rights to indemnity as provided herein for the
breach or inaccuracy of or failure to perform or comply with any of the Company’s
or Members’ representations, warranties, covenants or agreements under this
Agreement.

(d)           In
the event the Company suffers, incurs or otherwise becomes subject to any
Losses as a result of or in connection with any breach or alleged breach of any
representation, warranty or covenant, then (without limiting any of the rights
of the Company as a Buyer Indemnified Person) Buyer shall also be deemed, by
virtue of its ownership of the outstanding equity interests of the Company, to
have incurred Losses (without duplication) as a result of and in connection
with such breach or alleged breach.

(e)           No claims
or causes of action arising out of or related to the transactions contemplated
by this Agreement may be asserted by any Indemnified Party for consequential, incidental,  punitive, exemplary, special and indirect
Losses, other than pursuant to amounts suffered or incurred in connection with
Third Party Claims.

(f)            The amount
of any Losses for which indemnification is provided under this Article 7
shall be net of any insurance proceeds (net of premium increases), tax benefits
(but only to the extent that such tax benefits are actually realized by the
indemnified party for the taxable year in which the indemnification payment is
received in the form of (i) a Tax refund or (ii) a deduction that reduces a Tax
liability for such taxable year), credits, discounts or other offsets received
by the Indemnified Party.  The
Indemnified Party agrees to use its commercially reasonable efforts to pursue
and collect on any recovery available from any insurance policy or otherwise
and to net any such recovery from the indemnification claim sought, provided,
however that all costs of pursuing and collecting any recovery (whether or not
obtained) shall be divided equally between the Company and the Members.

 

37

 

7.3           Third-Party Claims.

(a)           In
the event a Buyer Indemnified Person or Member Indemnified Person (each, an “Indemnified Party” and, collectively, the “Indemnified Parties”) becomes aware of a third-party claim
that is or may be based on any misrepresentation or breach of or default in
connection with any of the representations, warranties, covenants and
agreements given or made by the other party in this Agreement (each, an “Indemnifying Party”), which the Indemnified Party believes
may result in a claim against it (a “Third Party Claim”),
the Indemnified Party will promptly notify the Indemnifying Party (or, if the
Indemnifying Parties are the Members, the Members’ Representative) of such
Third Party Claim.  Notwithstanding the
foregoing, no delay or deficiency on the part of the Indemnified Party in so
notifying the Indemnifying Party will limit any Indemnified Party’s right to
indemnification under this Article 7 (except to the extent such failure
materially prejudices the defense of such Action or Proceeding).  By written notice to the Indemnified Party
within twenty (20) days after delivery of notice of such a claim, the
Indemnifying Party’s representative on behalf of the Indemnifying Party will be
entitled, at the Indemnifying Party’s expense, to participate in any defense of
such claim by the Indemnified Party, provided that the Indemnified Party will
direct the defense and settlement of such claims.

7.4           Earn-Out
Escrow Offset.  In the event that
there has been a final, non-appealable decision, or an agreement between Buyer
and Members’ Representative, that a Buyer Indemnified Person is entitled to
indemnification or other claim under this Agreement, the date of such decision
the “Indemnification Determination Date,”
the Buyer  shall offset, as payment for
Losses, that number of Escrow Shares having a value equal to the amount of such
Losses, and such offset shall occur at the time the amount of such Losses is
determined.  Any such offset shall be
applied against the 2008 Escrow Shares first, the 2009 Escrow Shares second,
and the 2010 Escrow Shares third.  For
purposes hereof, the value of the Escrow Shares shall be determined based on
the closing price for a share of Buyer Common Stock as of the Indemnification
Determination Date.  In the event of the
application of this Section 7.4, the number of Escrow Shares subject to
Buyer’s offset shall be reduced proportionately between the Members.  Within five (5) days after the
Indemnification Determination Date, Buyer and the Members’ Representative shall
issue joint written instructions to the Escrow Agent as to the number of Escrow
Shares forfeited by the Members to be delivered to Buyer to be retired and
canceled.  Notwithstanding anything else
in this Agreement to the contrary, this Section 7.4 shall not be the
sole and exclusive remedy for Losses (a) under Section 7.2(a)(iii), (iv),
(v) and (vi), (b) under Section 7.2(a)(i) to the extent related to a
breach of Section 2.3 (Capitalization), Section 2.10 (Taxes), (c)
to the extent such Losses are caused by fraud or willful misconduct by the
Company or the Members;
or (d) attributable to Pre-Closing Taxes ((a), (b),(c) and (d) above
shall be hereinafter referred to as the “Uncapped Losses”).

7.5           Limitations.

(a)           No
claim by a Buyer Indemnified Person for indemnity under Section
7.2(a)(i)-(ii) will be recoverable unless the aggregate amount of all
Losses exceeds Fifty Thousand Dollars ($50,000) (the “Basket”),
in which case the Member Indemnifying Persons indemnification obligation under
this Article 7 shall apply to the full amount of Losses in excess
of the Basket; provided, however, that in no event shall the
Members’ liability for any Losses pursuant to this Agreement exceed Two Million
Dollars ($2,000,000). Notwithstanding anything else in this Agreement to the
contrary, the limitations of this Section 7.5 shall not apply in respect
of Uncapped Losses.

(b)           After the Closing, the rights and
remedies provided in this Article 7 shall constitute the sole and
exclusive remedy of Buyer and any Buyer Indemnified Party with respect to
claims (monetary or otherwise) relating to this Agreement or the transactions
contemplated hereby, including any claims for Losses, in each case other than
Uncapped Losses.

 

38

 

(c)           Treatment of
Indemnification Payments.  Any
indemnification payments made with respect to this Article 7 shall be
treated as an adjustment to the Purchase Price (except as otherwise required
pursuant to a “determination” as defined in Section 1313(a) of the Code).  Any such indemnification payment treated as
an adjustment to the Purchase Price shall be reflected as an adjustment to the
consideration allocated to a specific asset, if any, giving rise to the
adjustment and if any such adjustment does not relate to a specific asset, such
adjustment shall be allocated among the assets of the business.

7.6           Calculation of Losses. 
If the Indemnified Party is liable for any additional Taxes as a result
of the payment of amounts in respect of a Loss, then the Indemnifying Party
will pay to the Indemnified Party in addition to such amounts in respect of the
Loss within ten (10) days after being notified by the Indemnified Party of the
payment of such liability (i) an amount equal to such additional Taxes
(the “Tax Reimbursement
Amount”) plus (ii) any additional amounts required to pay
additional Taxes imposed with respect to the Tax Reimbursement Amount and with
respect to amounts payable under this clause (ii), with the result that
the Indemnified Party shall have received from the Indemnifying Party, net of
the payment of Taxes, an amount equal to the Loss..

ARTICLE 8

TERMINATION, AMENDMENT AND WAIVER

8.1           Termination. 
Except as provided in Section 8.2 below, this Agreement may be
terminated and the transactions contemplated hereby abandoned at any time prior
to the Closing:

(a)           by
mutual agreement of the Company, the Members and Buyer;

(b)           by
Buyer or the Members if (i) the Closing has not occurred before 10:00 am
(Eastern Standard Time) on December 30, 2007 or on such later date as the
parties hereto may mutually agree; provided, however, that the
right to terminate this Agreement under this Section 8.1(b) will not be
available to any party whose willful failure to fulfill any obligation
hereunder has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date;

(c)           by
Buyer if there shall be any action taken, or any Law enacted, promulgated or
issued or deemed applicable to the transactions contemplated hereby, by any
Governmental or Regulatory Authority, which would: (i) prohibit Buyer’s
ownership or operation of all of the business of the Company Group or
(ii) compel Buyer to dispose of or hold separate any of the Assets and
Properties of the Company Group as a result of the transactions contemplated
hereby;

(d)           by
Buyer if there has been a breach of any representation, warranty, covenant or
agreement contained in this Agreement on the part of the Company or Members and
the Company or Members, as the case may be, have not cured such breach within
30 days following receipt by the Company or Members, as the case may be, of
written notice of such breach or earlier if the Company or the Member are not
using their reasonable efforts to cure such breach after written notice of such
breach to the Company or Members, as the case may be (provided, however, that,
no cure period will be required for a breach which by its nature cannot be
cured); and

(e)           by
the Members if there has been a breach of any representation, warranty,
covenant or agreement contained in this Agreement on the part of Buyer and
Buyer has not cured such breach within 30 days following receipt by the Company
of written notice of such breach or earlier if Buyer is not using its
reasonable efforts to cure such breach after written notice of such breach to
Buyer (provided, however, that no cure period will be required for a breach
which by its nature cannot be cured).

 

39

 

8.2           Effect
of Termination.  In the event of a
termination of this Agreement as provided in Section 8.1, this Agreement
will forthwith become void and there will be no liability or obligation on the
part of Buyer, the Members, or the Company, or their respective officers,
directors or shareholders or Affiliates or Associates or their respective
officers, directors or shareholders, except to the extent that such liability
results from the breach by a party of this Agreement; provided, however,
that the provisions of Sections 5.2, 5.3, 5.4, and 8.2
and of Articles 9 and 10 of this Agreement will remain in full
force and effect and survive any termination of this Agreement.

8.3           Non-Solicit.  In the event of a Forced Termination by
Buyer, neither Buyer nor its Affiliates shall directly or indirectly for a
period of one (1) year following such Forced Termination by Buyer
(i) induce, encourage or otherwise solicit any employee, independent
contractor, consultant or business partner of the Company to terminate his, her
or its employment relationship, contract, consulting relationship or
partnership arrangement with the 
Company; or (ii) induce, encourage or otherwise solicit any employee or
consultant of the Company to accept employment with any other entity during
such individual’s employment or engagement with the Company; provided, however,
that this Section 8.3 shall not prohibit a general solicitation to the
public of general advertising for employees so long as the advertising does not
target employees or consultants of the Company.

ARTICLE 9

MISCELLANEOUS PROVISIONS

9.1           Notices.  All notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or mailed by
prepaid first class registered or certified mail, return receipt requested, or
sent by overnight courier prepaid, to the parties at the following addresses or
facsimile numbers or electronic email addresses:

If to Buyer to:

Francis E. Wilde, Chairman & CEO

Shea Development Corp.

3452 Lake Lynda Drive, #350

Orlando, Florida 32817

Telephone: 407-282-3545

Facsimile: 407-249-0089

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

Timothy R. Curry

O’Melveny & Myers LLP

2765 Sand Hill Road

Menlo Park, CA 94095

Telephone: 650-473-2600

Facsimile: 650-473-2601

and

 

40

 

Robert T. Lincoln

Dunnington, Bartholow & Miller LLP

477 Madison Avenue, 12th Floor

New York, NY 10022

Telephone: 212-682-8811

Facsimile: 212-661-7769

If to the Company or Members to:

Mr. Subhash Chander

5168 Campbells Run Road

Pittsburgh, PA 15205

Telephone: 412-747-7744

Facsimile: 412-747-8095

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

David Grubman

Buchanan Ingersoll & Rooney PC

One Oxford Centre

301 Grant Street, 20th Floor

Pittsburgh, PA 15219

Telephone: 412-562-3983

Facsimile: 412-562-1041

All
such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section 9.1, be deemed
given upon delivery, (b) if delivered by facsimile transmission to the
facsimile number as provided for in this Section 9.1, provided there is
a written confirmation of receipt, and (c) if delivered by overnight
courier to the addresses as provided in this Section 9.1, be deemed
given on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom
a copy of such notice is to be delivered pursuant to this Section 9.1).  Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.

9.2           Entire
Agreement.  This Agreement supersedes
all prior discussions and agreements between the parties with respect to the
subject matter hereof and thereof and contains the sole and entire agreement
between the parties hereto with respect to the subject matter hereof and
thereof.  This Agreement, inclusive of
the references to all other agreements, incorporated herein by reference
(including, without limitation, the Escrow Agreement, the Chander Employment
Agreement, the Non-Competition Agreements, the General Releases, the Foreign
Lease and the Domestic Lease), constitutes the entire understanding of the
parties, and revokes and supersedes all prior agreements between the parties
and is intended as a final expression of the parties’ agreement.  Furthermore, this Agreement and the terms and
conditions contained herein, regardless of any statements to the contrary
contained within any subsequently dated agreements, shall take precedence over
any other documents or other agreements, incorporated herein by reference,
entered into by and between the parties that may conflict with this
Agreement.  Except for the
representations and warranties contained in this Agreement or in any instrument
delivered pursuant to this Agreement, each of the parties to this Agreement
acknowledges that no other representations or warranties have been relied upon
by that party or made by any other party or its officers, directors, employees,
agents, financial and legal advisors or other representatives.

 

41

 

9.3           No
Acceleration.  In no event shall any
consideration outlined in Article 1, or under any other agreements,
incorporated herein by reference, be deemed earned, accelerated or due and
payable prior to payment date as stated herein or in such other agreements.

9.4           Further
Assurances; Post-Closing Cooperation. 
At any time or from time to time after the Closing, the parties will
execute and deliver to the other party such other documents and instruments,
provide such materials and information and take such other actions as the other
party may reasonably request to consummate the transactions contemplated by
this Agreement and otherwise to cause the other party to fulfill its
obligations under this Agreement and the transactions contemplated hereby.  Each party agrees to use commercially
reasonable efforts to cause the conditions to its obligations to consummate the
transactions contemplated hereby to be satisfied.

9.5           Amendment.  This Agreement may be amended by the parties
hereto at any time before the Closing by execution of an instrument in writing
signed by the Members’ Representative, the Company  and the Buyer and after the Closing by
execution of an instrument in writing signed on behalf of Buyer, the Company
and Members’ Representative.

9.6           Extension.  At any time prior to the Closing, Buyer, the
Members’ Representative and the Company may, to the extent legally allowed,
extend the time for the performance of any of the obligations of the other
party hereto.

9.7           Waiver.  Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver will be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition.  With respect to the Members, the Members’
Representative shall have the exclusive authority to provide such a waiver on
behalf of the Members.  No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
will be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.  All remedies, either under this Agreement or
by Law or otherwise afforded, will be cumulative and not alternative.

9.8           Third
Party Beneficiaries.  The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights, and this
Agreement does not confer any such rights, upon any other Person other than any
Person entitled to indemnity as described in Article 7.

9.9           Members’
Representative.

(a)           The Members hereby constitute and
appoint Chander as their representative (“Members’ Representative”),
with full power and authority in each of their names and on behalf of each of
them:

(i)            to act on behalf of each of the
Members in the absolute discretion of the Members’ Representative with respect
to all provisions of this Agreement, including the power to act in connection
with Section 1.2, Section 1.3, Section 1.5 and Article 7
hereof and any matter as to which each or any of the Members, jointly and
severally, have obligations or are indemnified under Article 7
hereof, and with respect to any notices, instructions or directions hereunder;
and

(ii)           in general, to do all things and to
perform all acts, including executing and delivering all agreements,
certificates, receipts, instructions and other instruments contemplated by or
deemed advisable to effectuate the provisions of this Agreement.

 

42

 

(b)           Any action, request, decision or
resolution to be made by the Members under this Agreement shall only be made by
and through the Members’ Representative. 
The Members’ Representative may be replaced by the Members at any time
on five (5) days written notice to Buyer signed by each of the Members.  Any such action, request, decision or
resolution made by the Members’ Representative shall be deemed to be the
action, request, decision or resolution of the Members, individually and
collectively.

(c)           This appointment and grant of power
and authority is coupled with an interest and is in consideration of the mutual
covenants made herein and, other than as set forth above, is irrevocable and
shall not be terminated by any act of the Members or by operation of law.  Each of the Members hereby consents to the
taking of any and all actions and the making of any decisions required or
permitted to be taken or made by the Members’ Representative pursuant to this Agreement.

(d)            Buyer shall be entitled to
rely upon any document or other paper delivered by the Members’ Representative
as (i) genuine and correct and (ii) having been duly signed or sent
by the Members’ Representative, and Buyer shall not be liable to any of the
Members for any action taken or omitted to be taken by Buyer in such reliance.

9.10         No
Assignment; Binding Effect.  Neither
this Agreement nor any right, interest or obligation hereunder may be assigned
by any party without the prior written consent of the other parties and any
attempt to do so will be void.  Subject
to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.

9.11         Headings.  The headings and table of contents used in
this Agreement have been inserted for convenience of reference only and do not
define or limit the provisions hereof.

9.12         Invalid
Provisions.  If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof and (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.

9.13         Governing
Law.  This Agreement, any ancillary
agreements and any other closing documents shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision. Each party hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement or
for recognition and enforcement of any judgment in respect hereof brought by
another party hereto or its successors or assigns shall be brought and
determined by either a state court or federal court sitting in New York, New
York and each party hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each
party hereto hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any claim that it is not personally
subject to the jurisdiction of the above-named courts for any reasons other
than the failure to serve process in accordance with this Section 9.13,
(b) that it or its property is exempt or immune from jurisdiction of any
such court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attaching in aid of execution
of judgment, execution of judgment or otherwise), and (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper, and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

 

43

 

9.14         Construction.  The parties hereto agree that this Agreement
is the product of negotiation between sophisticated parties and individuals,
all of whom were represented by counsel, and each of whom had an opportunity to
participate in and did participate in, the drafting of each provision
hereof.  Accordingly, ambiguities in this
Agreement, if any, will not be construed strictly or in favor of or against any
party hereto but rather will be given a fair and reasonable construction
without regard to the rule of contra proferentum.

9.15         Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

9.16         Specific
Performance.  The parties hereto
agree that irreparable damage would occur in the event that Section 5.2
of this Agreement were not performed in accordance with its specific terms or were
otherwise breached.  It is agreed that
the parties will be entitled to an injunction or injunctions to prevent
breaches of Section 5.2 of this Agreement and to enforce specifically
the terms and provisions thereof in any court having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.

ARTICLE 10

DEFINITIONS

10.1         Definitions.

(a)           As used in this Agreement, the following defined terms
will have the meanings indicated below:

“$” means United States Dollars unless otherwise indicated.

“Accounting Transition Taxes” means the Company’s tax
liability related to the transition of the Company from cash to accrual
accounting.

“Actions or Proceedings” means any action, suit, petition,
investigation, proceeding, arbitration, litigation or Governmental or
Regulatory Authority investigation, audit or other proceeding, whether civil or
criminal, in law or in equity, or before any arbitrator or Governmental or
Regulatory Authority.

“Affiliate” means, as applied to any Person, (a) any
other Person directly or indirectly controlling, controlled by or under common
control with, that Person, (b) any other Person that owns or controls 10%
or more of any class of equity securities of that Person or any of its Affiliates
(including any equity securities issuable upon the exercise of any option or
convertible security) of that Person or any of its Affiliates, or (c) any
director, partner or officer of such Person. 
For the purposes of this definition, “control” (including with correlative
meanings, the terms “controlling”, “controlled by”, and “under common control
with”) as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by contract or
otherwise.

“Affiliated Company” means WOW Information Solutions Private
Limited.

 

44

 

 “Agreement”
means this Interest Purchase Agreement, the Schedules the Exhibits, and the
certificates and instruments delivered in connection herewith, or incorporated
by reference, as the same may be amended or supplemented from time to time in
accordance with the terms hereof.

“Approval” means any approval, authorization, consent,
permit, qualification or registration, or any waiver of any of the foregoing,
required to be obtained from or made with, or any notice, statement or other
communication required to be filed with or delivered to, any Governmental or
Regulatory Authority or any other Person.

“Assets and Properties” of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned, licensed or leased by such Person, including
cash, cash equivalents, Investment Assets, accounts and notes receivable,
chattel paper, documents, instruments, general intangibles, real estate,
equipment, inventory, goods and Intellectual Property.

“Associate” means, with respect to any Person, any
corporation or other business organization of which such Person is an officer
or partner or is the beneficial owner, directly or indirectly, of 10% or more
of any class of equity securities, any trust or estate in which such Person has
a substantial beneficial interest or as to which such Person serves as a
trustee or in a similar capacity and any relative or spouse of such Person, or
any relative of such spouse, in each case who has the same home as such Person.

“Basket” has the meaning ascribed to it in Section 7.5(a)
of the Agreement.

“Benefit Plan” has the meaning ascribed to it in Section
2.13(a) of the Agreement.

“Blue Sky Laws” means United States state securities or “blue
sky” laws.

“Books and Records” means all files, documents, instruments,
papers, books and records relating to the Business or Condition of the Company,
including financial statements, internal reports, Tax Returns and related work
papers and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs (including data processing files and records), retrieval programs,
operating data and plans and environmental studies and plans.

“Business Combination” means, with respect to any Person,
(i) any merger, consolidation or other business combination to which such
Person is a party, (ii) any sale or other disposition of any capital stock
or other equity interests of such Person, (iii) any tender offer
(including a self tender), exchange offer, recapitalization, restructuring,
liquidation, dissolution or similar or extraordinary transaction, (iv) any
sale, dividend or other disposition of all or a material portion of the Assets
and Properties of such Person or (v) the entering into of any agreement or
understanding, the granting of any rights or options, or the acquiescence of
the Person, with respect to any of the foregoing.

“Business Day” means a day other than Saturday, Sunday or any
day on which banks located in the State of New York are authorized or obligated
to close.

“Business or Condition of the Company” means the business,
condition (financial or otherwise), results of operations, prospects or Assets
and Properties of the Company, taken as a whole.

“Buyer” has the meaning ascribed to it in the forepart of
this Agreement.

 

45

 

“Buyer Common Stock” means the common stock of Shea
Development Corp., par value $0.01 per share.

“Buyer Indemnified Person(s)” has the meaning ascribed to it
in Section 7.2(a) of the Agreement.

“Calculation Period” means that period beginning on the
Closing Date and ending on the date that is three (3) years after the Closing
Date.

“Calendar Year” means each of Calendar Year 1, Calendar Year
2 and Calendar Year 3.

“Chander Closing Cash Amount” has the meaning ascribed to it
in Section 1.1(b)(viii) of the Agreement.

“Chander Employment Agreement” has the meaning ascribed to it
in Section 6.3(i) of

“Closing” has the meaning ascribed to it in Section 1.4
of the Agreement.

“Closing Cash Consideration” has the meaning ascribed to it
in Section 1.1(b)(ii) of the Agreement.

“Closing Date” has the meaning ascribed to it in Section
1.4 of the Agreement.

“Closing Shares” has the meaning ascribed to it in Section 1.1(b)(x)
of the Agreement.

“Code” means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.

“Company” has the meaning ascribed to it in the forepart of
this Agreement.

“Company Debt” has the meaning ascribed to it in Section 1.1(b)(vi)
of the Agreement.

“Company Financial Statements” means the unaudited financial
statements (balance sheet and statements of operations and cash flow) of the
Company as of and for the twelve (12) month periods ended December 31, 2005 and
December 31, 2006 and the nine (9) month period ended September 30, 2007.

“Company Group” means the Company and each Company
Subsidiary, if any.

“Company Indemnified Parties” has the meaning ascribed to it
in Section 5.10 of the Agreement.

“Company Intellectual Property” means any Intellectual Property
that is (i) owned by; (ii) licensed to; or (iii) was developed or
created by or for the Company.

“Company Subsidiaries” means each Subsidiary of the Company.

“Company Transaction Costs” has the meaning ascribed to it in
Section 1.1(b)(vii) of the Agreement.

“Confidential Information” has the meaning ascribed to it in Section
2.15(h) of the Agreement.

 

46

 

“Confidential Matters” has the meaning
ascribed to it in Section 5.2 of the Agreement.

“Contract” means any material mortgage, indenture, lease,
contract, covenant or other agreement, instrument or commitment, permit,
concession, franchise or license, including without
limitation:

(i)            any distributor, sales, advertising,
agency or manufacturer’s representative contract;

(ii)           any continuing contract with any
customer or for the purchase of materials, supplies, equipment or services
involving in the case of any such contract more than $5,000 over the life of
the contract;

(iii)          any contract that expires or may be
renewed at the option of any person other than the Company so as to expire more
than one year after the date of this Agreement;

(iv)          any trust indenture, mortgage,
promissory note, loan agreement or other contract for the borrowing of money,
any currency exchange, commodities or other hedging arrangement or any leasing
transaction of the type required to be capitalized in accordance with generally
accepted accounting principles;

(v)           any contract for capital expenditures
in excess of $5,000 in the aggregate;

(vi)          any contract limiting the freedom of
the Company to engage in any line of business or to compete with any other
Person;

(vii)         any contract pursuant to which the
Company is a lessor of any machinery, equipment, motor vehicles, office
furniture, fixtures or other personal property having an original cost of more
than $25,000;

(viii)        any contract with any person with whom
the Company does not deal at arm’s length; or

(ix)           any agreement of guarantee, support,
indemnification, assumption or endorsement of, or any similar commitment with
respect to, the obligations, liabilities (whether accrued, absolute, contingent
or otherwise) or indebtedness of any other Person.

“Domestic Real Property” 
means the real property located at 5168 Campbells Run Rd Pittsburgh, PA
15205 owned by WOW Estates, LLC.

“Environmental Laws” means the Resource Conservation and
Recovery Act, as amended 42 U.S.C. Sections 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., and all other applicable
state, federal and local Laws (including common laws), binding interpretations,
binding policies, which pertain to, govern or otherwise regulate any of the
following (a) the emission, discharge, release, threat of release, or
spilling of any substance, waste, chemical, pollutant or contaminant into the
air, surface water, groundwater, soil or substrata; (b) the manufacturing,
processing, sale, generation, treatment, storage, disposal, labeling or other
management of waste, hazardous substances, toxic substances, toxic waste, or
hazardous waste as may be defined as such by any applicable Law, (c) the
protection of human health from exposure to any material referred to in Subsection
(b) of this definition, or (d) protection of the environment and
natural resources.

“Escrow Agent” has the meaning ascribed to it in Section
1.1(b)(xvii) of the Agreement.

 

47

 

“Financial Statement Date” means September 30, 2007.

“Foreign Real Property” means the real property located at 6,
Independent Electronic Module, Sector - 18, Electronic City, Gurgaon (Haryana)
owned by the Affiliated Company.

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

“Governmental or Regulatory Authority” means any court,
tribunal, arbitrator, authority, agency, bureau, board, commission, department,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city or other political subdivision.

“Hazardous Material” means any material or substance that is
regulated or controlled as or constitutes a hazardous substance, hazardous
material or hazardous waste, contaminant, special waste, toxic substance, toxic
waste, radioactive material or pollutant, or any variation thereof (as such
terms are defined or listed in any Environmental Law), including without
limitation, lead-based paint, petroleum, petroleum-based products,
polychlorinated biphenyls, urea formaldehyde or asbestos-containing material.

“Escrow Shares” has the meaning ascribed to it in Section
1.1(b)(xi) of the Agreement.

“Income Taxes” means all Taxes based upon, measured by, or
calculated with respect to (i) gross or net income or gross or net receipts or
profits (including, but not limited to, any capital gains, minimum taxes and
any Taxes on items of tax preference, but not including sales, use, goods and
services, real or personal property transfer or other similar Taxes), (ii)
multiple bases (including, but not limited to, corporate franchise, doing
business or occupation Taxes) if one or more of the bases upon which such Tax
may be based upon, measured by, or calculated with respect to, is described in
clause (i) above or (iii) withholding taxes measured by, or calculated with
respect to, any payments or distributions (other than wages).

“Indebtedness” of any Person means all obligations of such
Person (a) for borrowed money, (b) evidenced by notes, bonds,
debentures or similar instruments, (c) for the deferred purchase price of
goods or services (other than trade payables or accruals incurred in the
ordinary course of business), (d) under capital leases and (e) in the
nature of guarantees of the obligations described in clauses (a) through (d)
above of any other Person.

“Indemnified Party(ies)” has the meaning ascribed to it in Section
7.3 of the Agreement.

 “Intellectual Property”
means all trademarks and trademark rights, trade names and trade name rights,
service marks and service mark rights, patents and patent rights, utility
models and utility model rights, copyrights, mask work rights, brand names,
trade dress, product designs, product packaging, business and product names,
logos, slogans, rights of publicity, trade secrets, inventions (whether
patentable or not), invention disclosures, improvements, processes, formulae,
industrial models, processes, designs, specifications, technology, methodologies,
computer software (including all source code and object code), firmware,
development tools, flow charts, annotations, all Web addresses, sites and
domain names, all data bases and data collections and all rights therein, any
other confidential and proprietary right or information, whether or not subject
to statutory registration, and all related technical information, the
information set forth in manufacturing, engineering and technical drawings,
know-how and all pending applications for and registrations of patents, utility
models, trademarks, service marks and copyrights, and the right to sue for
past, present and future infringement, if any, in connection with any of the
foregoing.

 

48

 

“Interests” has the meaning ascribed to it in the Recitals to
this Agreement.

“Investment Assets” means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase and
securities convertible into or exchangeable for other securities), interests in
joint ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by the Company.

“Khatri Closing Cash Amount” has the meaning ascribed to it
in Section 1.1(b)(ix) of the Agreement.

“knowledge” or “known to” or
any similar phrase means, with respect to any person, the actual knowledge of
such person’s officers and directors and the actual knowledge of those
employees of such person and its subsidiaries who report directly to such
officers and whom such officers reasonably believe would have actual knowledge
of the matters represented; provided, however, that with respect
to the Company, the phrases “knowledge” or “known to,” shall be limited to the
knowledge of the Members.

“Law” or “Laws” means any
law, statute, Order, decree, consent decree, judgment, rule, regulation,
ordinance or other pronouncement having the effect of law whether in the United
States, any foreign country, or any domestic or foreign state, province,
county, city or other political subdivision or of any Governmental or
Regulatory Authority.

“Liabilities” means all Indebtedness, obligations and other
liabilities of a Person, whether absolute, accrued, contingent (or based upon
any contingency), known or unknown, fixed or otherwise, or whether due or to
become due.

“License” means any Contract that grants a Person the right
to use or otherwise enjoy the benefits of any Intellectual Property (including
without limitation any covenants not to sue with respect to any Intellectual
Property).

“Lien” or “Liens” means
any option, mortgage, pledge, assessment, security interest, lease, lien,
easement, charge or adverse claim or other encumbrance of any kind, or any
conditional sale Contract, right of first refusal, title retention Contract or
other Contract to give any of the foregoing, except for any restrictions on
transfer generally arising under any applicable federal, provincial or state
securities law.

“Losses” means any and all damages, fines, fees, Taxes,
penalties, deficiencies, losses and expenses, including interest, reasonable
expenses of investigation, court costs, reasonable fees and expenses of
attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment (such fees and
expenses to include all fees and expenses, including fees and expenses of
attorneys, incurred in connection with (i) the investigation or defense of
any Third Party Claims or (ii) asserting or disputing any rights under
this Agreement against any party hereto or otherwise).

“Major Customer” means each of the Persons identified on Schedule
2 of this Agreement.

“Material Adverse Effect on the Company” means any change,
event or development that is or would be reasonably expected to be materially
adverse to the  Assets and Properties,
Liabilities, business, financial condition or results of operations of the
Company; provided, however, that none of the following shall be
deemed in themselves, either alone or in combination, to constitute, and that
none of the following shall be taken into account in determining whether there
has been or will be, a Material Adverse Effect: 
(A) any change, event or development to the extent attributable to the
announcement or pendency of the transactions contemplated by this Agreement,
including the impact thereof on relationships, contractual or otherwise, with
customers, suppliers, partners or employees,; (B) any change, event or
development attributable to conditions affecting the industry and markets in
which the Company operates, the U.S. economy or capital or financial markets
generally; (C) any change, event or development arising from or relating to
compliance with the terms of this Agreement, or action taken, or failure to act,
to which Buyer has consented; (D) changes in Laws after the date hereof; (E)
changes in accounting rules after the date hereof; or (F)  earthquakes, hostilities, acts of war,
sabotage, terrorism or military actions or any escalation or material worsening
of any such hostilities, acts of war, sabotage, terrorism or military actions
threatened or underway as of the date hereof. 
Notwithstanding anything else to the contrary in this Agreement, the
receipt by the Company or the Members of any written notice by a Major
Customer of its termination of, its intent to terminate, or its intent not to
renew any Contract or other agreement between the Company and such Major
Customer shall be deemed a “Material Adverse Effect on the Company.”

 

49

 

“Material Adverse Effect on Buyer” means any circumstance
involving, change in or effect on (or any such circumstance, change or effect
involving a prospective change in or effect on) Buyer or any of its
subsidiaries that would reasonably be expected to prevent Buyer and Acquisition
from consummating the transactions contemplated by this Agreement.

“Members” has the meaning ascribed to it in the forepart of
this Agreement.

“Member Indemnified Person(s)” has the meaning ascribed to it
in Section 7.2(b) of the Agreement.

“Members Portion of Accounting Transition Taxes” means fifty
percent (50%) of the amount of the Accounting Transition Taxes; provided,
however, that in no event shall such amount exceed $100,000.

“Members’ Representative” has the meaning ascribed to it in Section
9.9(a) of the Agreement.

“Non-Competition Agreement” has the meaning ascribed to it in
the recitals of the Agreement.

“Officer’s Certificate” has the meaning ascribed to it in Sections
6.2(c) and 6.3(c) of the Agreement.

“Order” means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).

“Other Tax” means any sales, use, ad valorem, business
license, withholding, payroll, employment, excise, stamp, transfer, recording,
occupation, premium, property, value added, custom duty, severance, windfall
profit or license tax, governmental fee or other similar assessment or charge,
together with any interest and any penalty, addition to tax or additional by
any Taxing Authority responsible for the imposition of any such tax (domestic
or foreign).

“Operating Agreement” means that certain Operating Agreement
of WOW Global Corporation, LLC dated August 1, 2005, initially by and among the
Company, Denise Stokes, James A. Stokes, Jr., Sarita Khatri and Subhash
Chander, as amended.

 “Person” means
any natural person, corporation, general partnership, limited partnership,
limited liability company or partnership, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory
Authority.

 

50

 

“Pre-Closing Taxes”
means, without duplication (i) all liability for Taxes of the Members (except
to the extent covered by Section 5.12(c)(v) on account of a Section
338(h)(10) Election, if any) or the Affiliated Company; (ii) all liability for
Taxes of the Company or any of its Subsidiaries (including any Person included
in the Company Group) for Pre-Closing Tax Periods; (iii) all liability for
Taxes attributable to the transfer of assets to a Company Subsidiary; (iv) all
liability for Taxes attributable to any misrepresentation or breach of any
representation or warranty in Section 2.10 (determined as if each such representation,
warranty, covenant or agreement contained no qualification as to materiality or
Material Adverse Effect); (v) all liability for Taxes attributable to any
failure to comply with any of the covenants or agreements of the Members with
respect to the Company or any of its Subsidiaries under this Agreement; and
(vi) all liability of the Company for Taxes of any other Person pursuant to any
contractual agreement entered into on or before the Closing Date.

 “Pre-Closing Tax Period” means any taxable period
ending on or before the Closing Date and the portion of any Straddle Period
ending on and including the Closing Date.

“Registered Intellectual Property” will mean all United
States, international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks and service marks,
applications to register trademarks, intent-to-use applications, other
registrations or applications to trademarks or service marks, or trademarks or
service marks in which common law rights are owned or otherwise controlled;
(iii) registered copyrights and applications for copyright registration;
(iv) any mask work registrations and applications to register mask works;
and (v) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued by,
filed with, or recorded by, any state, government or other public legal
authority.

                “Section 338 Forms”
means all returns, documents, statements, and other forms that are required to
be submitted to any federal, state, county or other local Tax authority in
connection with a Section 338(h)(10) Election. 
Section 338 Forms shall include, without limitation, any “statement of
section 338 election” and IRS Form 8023 (together with any schedules or
attachments thereto) that are required pursuant to Treasury Regulation
promulgated under Section 338 of the Code.

“Section 338(h)(10) Election” means an
election described in Section 338(h)(10) of the Code with respect to Buyer’s
acquisition of the Interests pursuant to this Agreement.  A Section 338(h)(10) Election shall include
any corresponding election under state or local law pursuant to which a
separate election is permissible with respect to Buyer’s acquisition of the
Interests pursuant to this Agreement.

“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

“Straddle Period” means any taxable period that includes (but
does not end on) the Closing Date.

“Subsidiary” of any specified Person shall mean any
corporation fifty percent (50%) or more of the outstanding voting power of
which, or any partnership, joint venture, limited liability company or other
entity fifty percent (50%) or more of the total equity interest of which, is
directly or indirectly owned by such specified Person.  For the avoidance of doubt, the term “Subsidiary”
shall include any Person included in the Company Group.

“Tax” or “Taxes” means
(i) any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom duty or other
tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental entity (a “Tax
Authority”) responsible for the imposition of any such tax (domestic
or foreign), (ii) any liability for the payment of any amounts of the type
described in (i) as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group for any Taxable period, and (iii) any
liability for the payment of any amounts of the type described in (i) or (ii)
as a result of being a transferee of or successor to any person or as a result
of any express or implied obligation to indemnify any other person.

 

51

 

“Tax Escrow” means an escrow account with the Escrow Agent
established on terms substantially similar to those set forth in the Escrow
Agreement for the Closing Payment Escrow, provided (i) Buyer shall earn any
interest on the funds while in the escrow account and (ii) the release to the
Members of the funds placed in the escrow by Buyer shall be on the date that is
five (5) Business Days prior to the date Members’ Tax liability in connection
with the transactions contemplated by this Agreement becomes due and payable.

“Tax Reimbursement Amount” has the meaning ascribed to it in Section
7.6 of the Agreement.

“Tax Returns” means any and all returns,
statements, reports, or forms (including estimated tax returns and reports,
withholding tax returns and reports and information returns and reports)
required to be filed or maintained with respect to Taxes (including any and all
amendments, schedules, exhibits and attachments thereto).

“Third Party Intellectual Property Rights” has the meaning
ascribed to it in Section 2.15(c) of the Agreement.

“Total Closing Consideration” has the meaning ascribed to it
in Section 1.1(b)(xiii) of the Agreement

“Transfer Taxes” has the meaning ascribed to it in Section
5.12(b)(ii) of the Agreement.

“Working Capital Reserve” has the meaning ascribed to it in Section 1.1(b)(xiv)
of the Agreement.

10.2         Construction.  Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender and
the neuter, (ii) words using the singular or plural number also include
the plural or singular number, respectively, (iii) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement as a
whole and not to any particular Article, Section or other subdivision,
(iv) the terms “Article” or “Section” or other subdivision refer to the
specified Article, Section or other subdivision of the body of this Agreement,
(v) the phrases “ordinary course of business” and “ordinary course of
business with past practice” refer to the business and practice of the Company,
(vi) the words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation,” and (vii) when a reference is
made in this Agreement to Exhibits, such reference shall be to an Exhibit to
this Agreement unless otherwise indicated. All accounting terms used herein and
not expressly defined or qualified herein shall have the meanings given to them
under GAAP. When used herein, the terms “party” or “parties” refer to the
Buyer, on the one hand, and the Company and Members, on the other, and the
terms “third party” or “third parties” refers to Persons other than Buyer,
Company or the Members.

[Signatures on Following Page]

 

52

 

IN
WITNESS WHEREOF, Buyer, Members and the Company have caused this Agreement to
be signed by their duly authorized representatives, all as of the date first
written above.

 

	
  WOW GLOBAL CORPORATION, LLC

  	
   

  	
  SHEA DEVELOPMENT CORP.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Subhash Chander

  	
   

  	
   

  	
  Francis E. Wilde

  
	
   

  	
  President

  	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUBHASH CHANDER

  	
   

  	
  SARITA KHATRI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

53

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