Document:

Execution Version

 

AGREEMENT AND PLAN OF MERGER

 

BY AND AMONG

 

XORA, INC.

 

AJAX ACQUISITION CORPORATION

 

CLICKSOFTWARE, INC.

 

NED CARLSON,

 

AS STOCKHOLDER REPRESENTATIVE, AND
THE

 

SIGNING STOCKHOLDERS PARTY HERETO

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE I thE MERGER	2
	1.1	The Merger	2
	1.2	Effective Time	2
	1.3	Effect of the Merger	2
	1.4	Certificate of Incorporation and Bylaws	3
	1.5	Directors and Officers	3
	1.6	Final Purchase Price	3
	1.7	Effect of Merger on the Capital Stock of the Constituent Corporations	4
	1.8	Dissenting Shares	5
	1.9	Mechanics of Exchange	6
	1.10	No Further Ownership Rights in Company Capital Stock	7
	1.11	Lost, Stolen or Destroyed Certificates	7
	1.12	Taking of Necessary Action; Further Action	8
	1.13	Closing Calculations	8
	1.14	Closing Net Working Capital Calculation	9
	1.15	Post-Closing Adjustment Payment	10
	1.16	Payment of Third-Party Expenses	10
	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY	10
	2.1	Organization	11
	2.2	Company Capital Structure	11
	2.3	Subsidiaries	13
	2.4	Authority	13
	2.5	No Conflict	14
	2.6	Governmental Consents	14
	2.7	Company Financial Statements	15
	2.8	No Undisclosed Liabilities	15
	2.9	No Changes	15
	2.10	Tax Matters	18
	2.11	Restrictions on Business Activities	21
	2.12	Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment and IT Systems	22
	2.13	Intellectual Property	23
	2.14	Contracts	27
	2.15	No Defaults	29
	2.16	Interested Person Transactions	29
	2.17	Governmental Authorization	29
	2.18	Litigation	30
	2.19	Accounts Receivable	30
	2.20	Minute Books	30
	2.21	Environmental Matters	30
	2.22	Fees and Expenses	31

 

    	i

    	 

    

 

	2.23	Employee Benefit Plans and Compensation	31
	2.24	Insurance and Bonds	35
	2.25	Compliance with Laws	36
	2.26	Foreign Corrupt Practices Act	36
	2.27	Warranties; Indemnities	36
	2.28	Complete Copies of Materials	36
	2.29	Stockholder Loans	36
	2.30	Suppliers and Customers	37
	2.31	Privacy	37
	2.32	Compliance with the Immigration Reform and Control Act	37
	2.33	Bank Accounts; Letters of Credit; Powers of Attorney	38
	2.34	Data Room	38
	2.35	Representations Complete	38
	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF EACH SIGNING STOCKHOLDER	38
	3.1	Authority	38
	3.2	No Conflict; Required Filings and Consents	39
	3.3	Proceedings; Orders	39
	3.4	Title to Shares	40
	3.5	Brokers	40
	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF CS AND SUB	40
	4.1	Organization and Standing	40
	4.2	Authority	40
	4.3	No Conflict	41
	4.4	Consents	41
	4.5	Cash Resources	41
	 	 	 
	ARTICLE V CONDUCT AND OTHER AGREEMENTS PRIOR TO THE EFFECTIVE TIME	41
	5.1	Conduct of Business of the Company and its Subsidiaries	41
	5.2	No Solicitation	44
	5.3	Stockholder Notice	45
	5.4	Access to Information	47
	5.5	Confidentiality	47
	5.6	Expenses	48
	5.7	Public Disclosure	48
	5.8	Consents	48
	5.9	FIRPTA Compliance	48
	5.10	Reasonable Efforts	49
	5.11	Notification of Certain Matters	49
	5.12	Additional Documents and Further Assurances	49
	5.13	Company Options and Warrants	49
	5.14	Information Technology Security	49
	5.15	Resignation of Officers and Directors; Subsidiary Matters	49
	5.16	Supplying Financial Statements	50

 

    	ii

    	 

    

 

	5.17	Destruction of Confidential Information	50
	5.18	Tax Matters	50
	 	 	 
	ARTICLE VI CONDITIONS TO THE MERGER	51
	6.1	Conditions to the Obligations of Each Party to Effect the Merger	51
	6.2	Additional Conditions to the Obligations of CS and Sub	52
	6.3	Additional Conditions to the Obligations of the Company and the Signing Stockholders	56
	 	 	 
	ARTICLE VII INDEMNIFICATION AND ESCROW	56
	7.1	Survival of Representations and Warranties	56
	7.2	Indemnification by the Indemnifying Parties	57
	7.3	Claims for Indemnification	59
	7.4	Escrow Funds	61
	7.5	Stockholder Representative	61
	7.6	Additional Indemnification	63
	 	 	 
	ARTICLE VIII .  TERMINATION, AMENDMENT AND WAIVER	63
	8.1	Termination	63
	8.2	Effect of Termination	64
	8.3	Amendment	64
	8.4	Extension; Waiver	65
	 	 	 
	ARTICLE IX GENERAL PROVISIONS	65
	9.1	Notices	65
	9.2	Interpretation	66
	9.3	Counterparts	66
	9.4	Entire Agreement; Assignment	66
	9.5	Severability	67
	9.6	Other Remedies	67
	9.7	Governing Law	67
	9.8	Rules of Construction	67
	9.9	Specific Performance	67
	9.10	Attorneys’ Fees	68
	9.11	Release	68
	9.12	WAIVER OF JURY TRIAL	68
	9.13	Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege	68
	 	 	 
	ARTICLE X DEFINITIONS	69

 

    	iii

    	 

    

 

INDEX OF EXHIBITS AND SCHEDULES

 

	Exhibit	Description
	 	 
	Exhibit A	Form of Voting Agreement
	 	 
	Exhibit B	Form of Escrow Agreement
	 	 
	Exhibit C	Form of Certificate of Merger
	 	 
	Exhibit D	Form of Legal Opinion of Counsel to the Company
	 	 
	Exhibit E	Example Net Working Capital Calculation
	 	 
	Exhibit F	Form of Carve-Out Participant Agreement
	 	 
	Schedule	Description
	 	 
	1	Signing Stockholders
	 	 
	1.7(a)(i)	Estimated Merger Consideration Per Share
	 	 
	1.7(c)-1	Option Termination Documents
	 	 
	1.7(c)-2	Warrant Termination Documents
	 	 
	2.2(a)(i)	Owners of Record of Series AA Preferred Stock
	 	 
	6.2(d)	Mandatory Third-Party Consents
	 	 
	6.2(e)	Agreements to be Terminated
	 	 
	6.2(r)	Key Employees
	 	 
	6.2(u)	Certain Unsettled Disputes
	 	 
	7.2(a)(vi)	Subsidiary Losses
	 	 
	7.2(b)	Deemed Losses
	 	 
	7.6	Indemnification Schedule
	 	 
	10	Escrow Pro Rata Portion and Indemnity Pro Rata Portion Schedule

 

    	iv

    	 

    

 

THIS AGREEMENT AND PLAN OF MERGER (this
“Agreement”) is made and entered into as of February 17, 2014 by and among ClickSoftware, Inc., a California
corporation (“CS”), Ajax Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of CS
(“Sub”), Xora, Inc., a Delaware corporation (such corporation and any predecessor entity thereto, the “Company”),
Ned Carlson as Stockholder Representative (the “Stockholder Representative”), and the stockholders listed on
Schedule 1 hereto (the “Signing Stockholders”). Certain capitalized terms used but not otherwise defined
herein are defined in Article X hereof.

 

RECITALS

 

A.          Each
of CS, Sub and the Company believe it is in the best interests of each such company and its respective stockholders that CS acquire
the Company through the statutory merger of Sub with and into the Company (the “Merger”).

 

B.           The
Signing Stockholders own, in the aggregate, approximately ninety-five percent (95%) of the outstanding Preferred Stock of the Company.

 

C.           Pursuant
to the Merger, among other things, all of the issued and outstanding Company Capital Stock shall be converted into the right to
receive the consideration set forth herein, and all Company Options, Company Warrants and any other rights to acquire Company Capital
Stock shall be terminated for no consideration.

 

D.           A
portion of the consideration payable by CS in connection with the Merger shall be placed in escrow by CS as security for the indemnification
obligations set forth in this Agreement and the obligation to offset a shortfall in the net working capital of the Company as set
forth in this Agreement, and the Company shall use available cash to fund a portion of such escrow otherwise payable to the Carve-Out
Participants.

 

E.           The
Company and the Signing Stockholders, on the one hand, and CS and Sub, on the other hand, desire to make certain representations,
warranties, covenants and other agreements in connection with the Merger.

 

F.           Simultaneously
with the execution of this Agreement, and as a material inducement to CS to enter into this Agreement, the Signing Stockholders
are entering into a Voting Agreement with CS in the form of Exhibit A attached hereto (the “Voting Agreement”),
pursuant to which each such Signing Stockholder has, among other things, agreed, upon the terms and subject to the conditions thereof,
to vote his, her or its shares of Company Capital Stock in favor of the Merger.

 

G.           As
a material inducement to CS to enter into this Agreement, certain employees of the Company will be required to be employed with
the Company at the Effective Time of the Merger as provided herein.

 

H.           As
soon as practical following the execution and delivery of this Agreement, the Company shall use commercially reasonable efforts
to promptly obtain the approval of the Merger, this Agreement and the transactions contemplated by this Agreement, including each
of the matters set forth in Section 5.1(a) hereof, pursuant to stockholder action by written consent (the “Stockholder
Written Consents”), signed by the holders of the Requisite Stockholder Vote, pursuant to and in strict accordance with
the applicable provisions of Delaware Law and the Company Charter Documents.

 

    	1

    	 

    

 

NOW, THEREFORE, in consideration of the
mutual agreements, covenants and other promises set forth herein, the mutual benefits to be gained by the performance thereof,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties
hereby agree as follows:

 

ARTICLE I

thE MERGER

 

1.1           The
Merger. At the Effective Time and subject to and upon the terms and conditions of this Agreement and applicable provisions
of the General Corporation Law of the State of Delaware (“Delaware Law”), Sub shall be merged with and into
the Company, the separate corporate existence of Sub shall cease, and the Company shall continue as the surviving corporation and
as a wholly-owned subsidiary of CS. The surviving corporation after the Merger is sometimes referred to herein as the “Surviving
Corporation.”

 

1.2           Effective
Time. Unless this Agreement is earlier terminated pursuant to Section 8.1 hereof, the closing of the Merger (the
“Closing”) will take place, unless another time and/or place is mutually agreed upon in writing by CS and the
Company, at the offices of Sullivan & Worcester LLP (and/or remotely via the electronic exchange of documents and signatures)
on the date which is the later of (a) February 28, 2014, provided that prior to such date the conditions set forth
in Article VI hereof have been satisfied or waived or (b) not more than five (5) Business Days following satisfaction
or waiver of the conditions set forth in Article VI hereof have been satisfied or waived (in each case, other than
those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions);
provided, further, that if any part of the foregoing five (5) Business Day period falls during the last five (5)
Business Days of a month, CS may elect to defer the Closing to the last Business Day of such month. The date upon which the Closing
actually occurs shall be referred to herein as the “Closing Date”. On the Closing Date, the parties hereto shall
cause the Merger to be consummated by filing a Certificate of Merger, substantially in the form attached hereto as Exhibit C,
with the Secretary of State of the State of Delaware (the “Certificate of Merger”), in accordance with the applicable
provisions of Delaware Law (the effective time specified in the Certificate of Merger with the Secretary of State of the State
of Delaware shall be referred to herein as the “Effective Time”). All deliveries, payments and other transactions
and documents relating to the Closing (a) shall be interdependent and none shall be effective unless and until all are effective
(except to the extent that the party entitled to the benefit thereof has waived satisfaction or performance thereof as a condition
precedent to the Closing), and (b) shall be deemed to be consummated simultaneously.

 

1.3           Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, at the Effective Time, except as otherwise agreed pursuant to the terms
of this Agreement, all of the property, rights, privileges, powers and franchises of the Company and Sub shall vest in the Surviving
Corporation, and all debts, Liabilities and duties of the Company and Sub shall become the debts, Liabilities and duties of the
Surviving Corporation.

 

    	2

    	 

    

 

1.4         Certificate
of Incorporation and Bylaws.

 

(a)          Unless
otherwise determined by CS prior to the Effective Time, the certificate of incorporation of the Sub as in effect immediately prior
to the Effective Time shall be the certificate of incorporation of the Surviving Corporation at and as of the Effective Time, until
thereafter amended in accordance with Delaware Law and as provided in such certificate of incorporation; provided, however, that
at the Effective Time, Article I of such certificate of incorporation of the Surviving Corporation shall be amended and restated
in its entirety to read as follows: “The name of the corporation is Xora, Inc.”

 

(b)          Unless
otherwise determined by CS prior to the Effective Time, the bylaws of Sub, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation at and as of the Effective Time, except that the name of the Surviving Corporation
shall be “Xora, Inc.” until thereafter amended in accordance with Delaware Law and as provided in the certificate of
incorporation of the Surviving Corporation and such bylaws.

 

1.5         Directors
and Officers.

 

(a)          Directors.
Unless otherwise determined by CS prior to the Effective Time, the directors of Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation immediately after the Effective Time, each to hold the office of a director of the
Surviving Corporation in accordance with the provisions of Delaware Law, the certificate of incorporation and bylaws of the Surviving
Corporation until their successors are duly elected and qualified, or until their earlier resignation or removal.

 

(b)          Officers.
Unless otherwise determined by CS prior to the Effective Time, the officers of Sub immediately prior to the Effective Time shall
be the officers of the Surviving Corporation immediately after the Effective Time, each to hold office in accordance with the provisions
of the bylaws of the Surviving Corporation.

 

1.6         Final
Purchase Price. For purposes of this Agreement, the “Final Purchase Price” shall be that amount, in cash
and without interest, equal to the Initial Purchase Price, plus (a) the amount of Company Cash, minus (b) half of
the fees and expenses of the Escrow Agent in accordance with the Escrow Agreement and half of the fees and expenses of the Paying
Agent in accordance with Section 1.9(a), minus (c) the sum of (i) the Closing Debt to the extent not paid by the Company
prior to the Closing and (ii) Indebtedness to the extent not paid by the Company prior to the Closing, plus or minus
(as the case may be) (d) the Net Working Capital Adjustment. Notwithstanding anything to the contrary contained herein, in no event
shall the aggregate amount paid or payable by CS under this Article I exceed the Final Purchase Price.

 

    	3

    	 

    

 

1.7         Effect
of Merger on the Capital Stock of the Constituent Corporations.

 

(a)          Consideration
to be Paid at the Effective Time.

 

(i)          At
and as of the Effective Time, by virtue of the Merger and without any action on the part of Sub, the Company or the holders of
shares of Company Capital Stock, upon the terms and subject to the conditions set forth in this Section 1.7 and throughout
this Agreement, including the escrow provisions set forth in Article VII hereof, (A) each outstanding share of
Company Series AA Preferred Stock (other than any Dissenting Shares) shall be cancelled and extinguished and be converted
automatically into the right to receive an amount in cash (without interest) equal to the Per Share Series AA Merger Consideration,
(B) each outstanding share of Common Stock (other than any Dissenting Shares) shall be cancelled and extinguished and be converted
automatically into the right to receive an amount in cash (without interest) equal to the Per Share Common Merger Consideration,
and (C) each Dissenting Share shall be cancelled and extinguished and be converted automatically into the right to receive payment
from the Surviving Corporation with respect thereto in accordance with applicable state Law, unless and until any holder of Dissenting
Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such holder’s appraisal rights under
Delaware Law. Notwithstanding the foregoing in this Section 1.7(a)(i), at the Closing the amount to be paid with respect
to each share of Company Capital Stock shall be based upon the Estimated Purchase Price (as defined below). Attached as Schedule
1.7(a)(i) is a schedule setting forth the Per Share Merger Consideration applicable to each share of Company Common Stock and
Company Series AA Preferred Stock. The Company shall deliver an updated Schedule 1.7(a)(i) to CS at Closing to reflect any
changes required to correctly compute the amount of Per Share Merger Consideration applicable to each share of Company Common Stock
and Company Series AA Preferred Stock. CS and the Paying Agent shall be entitled to rely on Schedule 1.7(a)(i) in making
distributions to Stockholders pursuant to Section 1.9(c).

 

(ii)         No
share of Company Capital Stock shall be deemed to be outstanding or to have any rights other than those set forth in Section 1.7(a)(i)
hereof after the Effective Time.

 

(b)          Cancellation
of Company-Owned Stock. Each share of Company Capital Stock held by the Company or held by any direct or indirect Subsidiary
of the Company immediately prior to the Effective Time shall be cancelled and extinguished as of the Effective Time.

 

(c)          Termination
of Company Options and Company Warrants. Each Company Option, to the extent not exercised as of the Effective Time, shall be
terminated in accordance with Section 16.1 of each Plan and the documents attached as Schedule 1.7(c)-1, including an acknowledgement
by each holder thereof who is an employee of the Company as of the date of this Agreement and a notice by registered mail to each
holder thereof who is not such an employee. To the extent not exercised as of the Effective Time, the Company shall cause each
Company Warrant to be terminated as of the Effective Time in accordance with the documents attached as Schedule 1.7(c)-2,
including a release by the holder thereof as to such Company Warrant and the shares issuable thereunder. CS shall not assume or
convert any Company Option or Company Warrant into any other security or cash.

 

    	4

    	 

    

 

(d)          Withholding
Taxes. The Company, and on its behalf, CS and the Surviving Corporation shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Capital Stock, Company Warrant
or holder of Closing Debt such amounts as may be required to be deducted or withheld therefrom under the Code, or any provision
of state, local or foreign Tax Law. To the extent that amounts are so deducted or withheld, such amounts shall be timely paid to
the appropriate Tax authority and shall be treated for all purposes of this Agreement as having been paid to the Stockholders or
holder of Closing Debt in respect of whom such deduction, withholding and payment were made.

 

(e)          Stockholder
Loans. In the event that any Stockholder has outstanding loans from the Company or any of its Subsidiaries as of the Effective
Time, any consideration payable to such Stockholder pursuant to this Section 1.7 shall be reduced by an amount equal
to the sum of the outstanding principal plus accrued interest of such Stockholder’s loans as of the Effective Time. Such
loans shall be satisfied as to the amount by which the consideration is reduced pursuant to this Section 1.7(e). To
the extent the consideration payable to such Stockholder is so reduced, such amount shall be treated for all purposes under this
Agreement as having been paid to such Stockholder.

 

(f)          Capital
Stock of Sub. Each share of common stock of Sub issued and outstanding immediately prior to the Effective Time shall be converted
into and exchanged for one (1) validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.
Each stock certificate of Sub evidencing ownership of any such shares of common stock of Sub shall thereafter evidence ownership
of such shares of common stock of the Surviving Corporation.

 

(g)          Adjustments
to Per Share Merger Consideration. The Per Share Merger Consideration and any other applicable numbers or amounts shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Company Capital Stock), reorganization, recapitalization, reclassification or other
like change with respect to Company Capital Stock occurring or having a record date on or after the date hereof and prior to the
Effective Time.

 

1.8         Dissenting
Shares.

 

(a)          Notwithstanding
any other provisions of this Agreement to the contrary, any shares of Company Capital Stock held by a holder who has not effectively
withdrawn or lost such holder’s appraisal rights under Delaware Law (“Dissenting Shares”) shall not be
converted into or represent a right to receive the consideration for Company Capital Stock set forth in Section 1.7
hereof (and subject to the provisions of Article VII hereof), but the holder thereof shall only be entitled to such
rights as are provided by Delaware Law.

 

(b)          Notwithstanding
the provisions of Section 1.8(a) hereof, if any holder of Dissenting Shares shall effectively withdraw or lose (through
failure to perfect or otherwise) such holder’s appraisal rights under Delaware Law, then, as of the later of the Effective
Time and the occurrence of such event, such holder’s shares shall automatically be converted into and represent only the
right to receive the consideration for Company Capital Stock, as applicable, set forth in Section 1.7 hereof, without
interest thereon, and subject to the provisions of Section 1.9 and Article VII, upon surrender of the certificate
representing such shares.

 

    	5

    	 

    

 

(c)          The
Company shall give CS (i) prompt notice of any written notice of intent to demand appraisal under Delaware Law or demand for
appraisal under Delaware Law received by the Company, and (ii) the opportunity to participate in all negotiations and proceedings
with respect to such demands. The Company shall not, except with the prior written consent of CS, voluntarily make any payment
with respect to any such demands or offer to settle or settle any such demands and shall not use an estimate of fair value in an
amount greater than the applicable Per Share Merger Consideration in any offer of payment without CS’s prior written consent.
Notwithstanding the foregoing, to the extent that CS or the Company (A) makes any payment or payments in respect of any Dissenting
Shares in excess of the consideration that otherwise would have been payable in respect of such shares in accordance with this
Agreement or (B) incurs any other costs or expenses in respect of any Dissenting Shares or claims brought by one or more Stockholders
(excluding payments for such shares) (together “Dissenting Share Payments”), CS shall be entitled to recover
under the terms of Article VII hereof the amount of such Dissenting Share Payments.

 

1.9         Mechanics
of Exchange.

 

(a)          Paying
Agent. People’s United Bank shall serve as the paying agent (in such capacity, the “Paying Agent”)
for the Merger. Half of the fees and expenses of the Paying Agent shall be subtracted from the Final Purchase Price, and half of
the fees and expenses of the Paying Agent shall be paid by CS.

 

(b)          CS
to Provide Cash. As promptly as practicable after the Effective Time (but in any event within one Business Day after the Effective
Time), CS shall make available to the Paying Agent for exchange in accordance with this Article I, the Estimated Purchase
Price (less the Escrow Amount, plus the Carve-Out Escrow Amount to the extent paid by the Company from its available cash in connection
with the Closing) payable to the Stockholders in exchange for their shares of Company Capital Stock pursuant to Section 1.7(a)
hereof. In accordance with Article VII hereof, as promptly as practicable after the Effective Time, CS shall deposit
(out of the Estimated Purchase Price) the Indemnity Escrow Amount and Net Working Capital Adjustment Escrow Amount into the applicable
Escrow Fund, less the Carve-Out Escrow Amount, which the Company shall deposit into the applicable Escrow Fund in connection with
the Closing. Each Indemnifying Party shall be deemed to have contributed his or her Escrow Pro Rata Portion of the Indemnity Escrow
Amount and Net Working Capital Adjustment Escrow Amount to the Escrow Fund.

 

    	6

    	 

    

 

(c)          Exchange
Procedures. On or following the Closing Date, each Stockholder may surrender the certificate(s) representing such Stockholder’s
shares of Company Capital Stock (the “Company Stock Certificates”) to the Paying Agent for cancellation, together
with a duly completed and validly executed letter of transmittal in such customary form and having such customary provisions that
CS and the Paying Agent may reasonably request, including without limitation: (i) instructions for effecting the surrender
of the Company Stock Certificates in exchange for the right to receive the Initial Purchase Price as of the Closing, (ii) a
release of such Stockholder’s claims against the Company and the Company’s directors, officers and controlling persons
(in their capacity as such), any Subsidiaries, CS and Sub, (iii) a requirement for a completed W-9 (or applicable form W-8,
if any), and (iv) an acknowledgement by such Stockholder that delivery of the Company Stock Certificates shall be effected,
and risk of loss and title to the Company Stock Certificates shall pass, only upon delivery of the Company Stock Certificates to
the Paying Agent. Until so surrendered, each outstanding Company Stock Certificate will be deemed for all corporate purposes to
evidence only the right to receive the amount of cash into which such shares of Company Capital Stock shall be so exchanged. Upon
the surrender of a Company Stock Certificate (or compliance with Section 1.11 hereof) for cancellation to the
Paying Agent, or such other agent or agents as may be appointed by CS, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, the holder of such Company Stock Certificate shall be entitled
to receive from the Paying Agent in exchange therefor, the amount equal to the cash to which such holder is entitled pursuant to
Section 1.7(a)(i) hereof, less the amount of cash to be deposited by CS in the Escrow Fund on such holder’s behalf
pursuant to Section 1.9(b) hereof and Article VII hereof and the Company Stock Certificate so surrendered
shall be cancelled.

 

(d)          Transfers
of Ownership. From and after the Effective Time, there shall be no transfers on the stock transfer books of the Company of
Company Capital Stock that was outstanding prior to the Effective Time.

 

(e)          No
Liability. Notwithstanding anything to the contrary in this Section 1.9, none of the Paying Agent, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of Company Capital Stock for any amount properly paid to
a public official pursuant to any applicable abandoned property, escheat or similar Law. In addition, in the event that any amount
of cash (other than the cash held in the Escrow Fund in accordance with Article VII hereof) shall not have been distributed
by the Paying Agent within 180 days following the Effective Time, then the Paying Agent may, but only upon CS’s written request,
surrender such undistributed funds to CS. After the end of such 180-day period, any Stockholder who has not theretofore delivered
or surrendered such Stockholder’s Company Stock Certificate(s) to the Paying Agent, subject to applicable Law, shall look
as a general creditor only to CS for payment of such Stockholder’s entitlement to the applicable Per Share Merger Consideration
and shall be obligated to follow procedures equivalent to those set forth in Section 1.9(c).

 

1.10       No
Further Ownership Rights in Company Capital Stock. The amount of cash payable for shares of Company Capital Stock in accordance
with the terms hereof shall be deemed to be in full satisfaction of all rights pertaining to such shares of Company Capital Stock.
After the Effective Time, each Company Stock Certificate presented to the Surviving Corporation for any reason shall be cancelled
and exchanged as provided in this Article I.

 

1.11       Lost,
Stolen or Destroyed Certificates. In the event any certificates evidencing shares of Company Capital Stock shall have been
lost, stolen or destroyed, the Paying Agent shall issue replacement certificates in exchange for such lost, stolen or destroyed
certificates, upon delivery to or at the direction of CS and the Paying Agent of a bond, reasonably acceptable to CS and the Paying
Agent, in the amount of such Stockholder’s entitlement to the applicable Per Share Merger Consideration; provided, however,
that CS and the Paying Agent may, in their discretion, accept in the place of such a bond an affidavit by the owner of such lost,
stolen or destroyed certificate as to the facts thereof.

 

    	7

    	 

    

 

1.12       Taking
of Necessary Action; Further Action. If at any time after the Effective Time, any further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all
assets, property, rights, privileges, powers and franchises of the Company, then the officers and directors of the Surviving Corporation
are hereby authorized, empowered and directed in the name of and on behalf of the Company to execute and deliver any and all things
and to take such action as is necessary or desirable to vest or to perfect or confirm title to such property or rights in the Surviving
Corporation, and otherwise to carry out the purposes and provisions of this Agreement.

 

1.13       Closing
Calculations. The Company shall prepare, and deliver to CS at least three (3) Business Days prior to the Closing, a spreadsheet
(the “Spreadsheet”) in a form reasonably acceptable to the Paying Agent and CS, which Spreadsheet shall be certified
by the Company (and signed by the Chief Executive Officer of the Company on its behalf), as complete and correct as of the Closing
and which shall separately list, as of the close of business on the Closing Date, (a) the amounts of (i) Company Cash, (ii)
Closing Debt to the extent not paid by the Company prior to the Closing and, separately, Third-Party Expenses (the “Estimated
Third-Party Expenses”), (iii) Indebtedness to the extent not paid by the Company prior to the Closing, (iv) Net Working
Capital and the estimated Net Working Capital Adjustment (the “Estimated Net Working Capital Adjustment”), and
(v) half of the fees and expenses of the Escrow Agent in accordance with the Escrow Agreement and half of the fees and expenses
of the Paying Agent in accordance with Section 1.9(a), itemized and detailed to CS’s reasonable satisfaction, together
with all necessary wire transfer information for each person to whom the Closing Debt is owed, (b) all Stockholders and their
respective last-known addresses, the number of shares of Company Capital Stock held by such persons (including the respective certificate
numbers), the amount of cash payable to each holder pursuant to Section 1.7(a) hereof, the amount of cash to be deposited
into the Indemnity Escrow Fund on behalf of each Indemnifying Party pursuant to Section 7.4 hereof, and the amount
of cash to be deposited into the Net Working Capital Adjustment Escrow Fund on behalf of each Indemnifying Party pursuant to Section 7.4
hereof, and (c) and such other information relevant thereto or which the Paying Agent or CS may reasonably request. Using these
estimates and information, CS shall calculate an estimate of the Final Purchase Price (the “Estimated Purchase Price”)
and deliver to the Stockholder Representative its good faith calculation, in reasonable detail, of the Estimated Purchase Price,
each Indemnifying Party’s Escrow Pro Rata Portion and each Series AA Stockholder’s Indemnity Pro Rata Portion.

 

    	8

    	 

    

 

1.14         Closing
Net Working Capital Calculation. Within 90 days after the Closing Date, CS will deliver to the Stockholder Representative a
spreadsheet (the “Net Working Capital Calculation”) showing the calculations, as of the close of business on
the Closing Date, of Net Working Capital and the Net Working Capital Adjustment, together with supporting documentation and information.
After delivery of the Net Working Capital Calculation, the Stockholder Representative and its accountants and other representatives
shall be permitted reasonable access to review the Surviving Corporation’s and its Subsidiaries’ books and records
and work papers related to the preparation of the Net Working Capital Calculation. The Stockholder Representative and its accountants
and other representatives may make inquiries of CS and its accountants regarding questions concerning or disagreements with the
Net Working Capital Calculation arising in the course of their review thereof, and CS shall use its, and shall cause the Surviving
Corporation and its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to cooperate with
and respond to such inquiries. If the Stockholder Representative has any objections to the Net Working Capital Calculation, the
Stockholder Representative shall deliver to CS a statement setting forth its objections thereto (an “Objections Statement”).
If an Objections Statement is not delivered to CS within 30 days after delivery of the Net Working Capital Calculation, the Net
Working Capital Calculation shall be final, binding and non-appealable by the parties hereto. The Stockholder Representative and
CS shall negotiate in good faith to resolve any such objections, but if they do not reach a final resolution within 15 days after
the delivery of the Objections Statement, the Stockholder Representative and CS shall submit such dispute to Blum Shapiro LLP (the
“Dispute Resolution Auditor”). Any further submissions to the Dispute Resolution Auditor must be written and
delivered to each party to the dispute. The Dispute Resolution Auditor shall consider only those items and amounts which are identified
in the Objections Statement as being items which the Stockholder Representative and CS are unable to resolve. The Dispute Resolution
Auditor’s determination will be based solely on the definitions contained herein and the provisions of this Section 1.14.
The Stockholder Representative and CS shall use their commercially reasonable efforts to cause the Dispute Resolution Auditor to
resolve all such disagreements as soon as practicable. Further, the Dispute Resolution Auditor’s determination shall be based
solely on the presentations by CS and the Stockholder Representative which are in accordance with the terms and procedures set
forth in this Agreement (i.e., not on the basis of an independent review). The resolution of the dispute by the Dispute Resolution
Auditor shall be final, binding and non-appealable. The costs and expenses of the Dispute Resolution Auditor shall be allocated
between CS, on the one hand, and the Indemnifying Parties, on the other hand, based upon the percentage which the portion of the
contested amount not awarded to each party bears to the amount actually contested by such party (with each Indemnifying Party responsible
for its portion of such costs and expenses (determined on a pro rata basis according to each Indemnifying Party’s Escrow
Pro Rata Portion)). For example, if the Stockholder Representative claims the appropriate adjustments are $1,000 greater than the
amount determined by CS’s accountants, and CS contests only $500 of the amount claimed by the Stockholder Representative,
and if the Dispute Resolution Auditor ultimately resolves the dispute by awarding to the Indemnifying Parties (to the extent of
each Indemnifying Party’s Escrow Pro Rata Portion) $300 of the $500 contested, then the costs and expenses of arbitration
will be allocated 60% (i.e., 300 ÷ 500) to CS and 40% (i.e., 200 ÷ 500) to the Indemnifying Parties (to the extent
of each Indemnifying Party’s Escrow Pro Rata Portion). If there are any expenses that become payable to CS by the Indemnifying
Parties pursuant to this Section 1.14, then each Indemnifying Party (to the extent of each such Indemnifying Party’s
Escrow Pro Rata Portion) shall promptly (but in any event within five Business Days) pay to CS such Indemnifying Party’s
portion of such shortfall by wire transfer of immediately available funds to one or more accounts designated by CS to the Stockholder
Representative.

 

    	9

    	 

    

 

1.15         Post-Closing
Adjustment Payment. If, after following the procedures set forth in Section 1.14 above, the Net Working Capital Adjustment
is an amount that should have resulted in a greater increase (or less of a decrease) to the Initial Purchase Price than resulted
by application of the Estimated Net Working Capital Adjustment, then the amount of the differential shall promptly (but in any
event within five Business Days) be paid by CS to the Paying Agent by wire transfer of immediately available funds to one account
designated by the Paying Agent for payment to the Indemnifying Parties to the extent of each such Indemnifying Party’s Escrow
Pro Rata Portion, and CS and the Stockholder Representative shall jointly instruct the Escrow Agent to release the Net Working
Capital Adjustment Escrow Amount to the Paying Agent to be paid accordingly. If, after following the procedures set forth in Section
1.14 above, the Net Working Capital Adjustment is an amount that should have resulted in a lesser increase (or more of a decrease)
to the Initial Purchase Price than resulted by application of the Estimated Net Working Capital Adjustment, then CS and the Stockholder
Representative shall jointly instruct the Escrow Agent to release the amount of the differential from the Net Working Capital Adjustment
Escrow Fund to CS, provided that (a) any remainder in the Net Working Capital Adjustment Escrow Fund shall be released to the Paying
Agent for payment to the Indemnifying Parties as provided in the preceding sentence and (b) to the extent the Net Working Capital
Adjustment Escrow Amount is insufficient to satisfy the full amount of such differential, then CS and the Stockholder Representative
shall jointly instruct the Escrow Agent to release the amount of such shortfall from the Indemnity Escrow Fund to CS.

 

1.16         Payment
of Third-Party Expenses. Immediately prior to the Closing, the Company shall pay
the Estimated Third-Party Expenses against statements from each of the providers of products or services giving rise thereto that
payment for such products or services has been made in full.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to CS
that, except as set forth in the Schedule of Exceptions delivered by the Company to CS (the “Schedule of Exceptions”),
the statements contained in this Article II are true and correct as of the date of this Agreement, except to the extent
such representations and warranties are specifically made as of a particular date (in which case such representations and warranties
will be true and correct as of such date). The Schedule of Exceptions shall be arranged in sections and subsections corresponding
to the numbered and lettered sections and subsections contained in this Article II, and any reference in this Article II
to items “set forth in the Schedule of Exceptions” or “the Schedule of Exceptions contains” or words of
similar effect shall be deemed to mean the section or subsection of the Schedule of Exceptions corresponding to the section or
subsection of this Agreement where such reference appears. Any exception set forth in a section or subsection of the Schedule of
Exceptions shall also qualify other sections or subsections of this Agreement, if and to the extent it is reasonably apparent on
the face of an exception that such exception is applicable to such other section or subsection.

 

    	10

    	 

    

 

2.1         Organization.
The Company and each of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the Laws
of the respective jurisdiction of its incorporation. The Company and each of its Subsidiaries has the corporate power to own its
properties and to carry on its business as currently conducted. The Company and each of its Subsidiaries is duly qualified or licensed
to do business and in good standing as a foreign corporation (if applicable) in each jurisdiction in which it conducts business,
except in those jurisdictions where the failure to be so qualified would not have a Company Material Adverse Effect. The Company
has delivered or made available to CS (i) a true and correct copy of its certificate of incorporation and bylaws (collectively,
the “Company Charter Documents”), (ii) a true and correct copy of the certificate of incorporation and bylaws,
or like organizational documents (collectively, the “Subsidiary Charter Documents”), of each of its Subsidiaries,
and (iii) a true and correct copy of the minutes of meetings and other actions of the board of directors, including any committees
of the board of directors, and the stockholders of the Company and each of its Subsidiaries, and each such instrument reflects
all actions of the stockholders, the board of directors and any committees of the board of directors up to the date hereof and
is in full force and effect on the date hereof. Section 2.1 of the Schedule of Exceptions lists the directors and officers
of the Company and each of its Subsidiaries. The Company is not in violation of any of the provisions of the Company Charter Documents,
and no Subsidiary is in violation of any of its applicable Subsidiary Charter Documents.

 

2.2         Company
Capital Structure.

 

(a)          The
authorized capital stock of the Company consists of 197,500,000 shares of Common Stock, 22,723,169 shares of which are issued and
outstanding as of the date of this Agreement, and 140,500,000 shares of Preferred Stock, all of which are designated Series AA
Preferred Stock, 133,638,995 of which are issued and outstanding as of the date of this Agreement and owned of record by the holders
and in the amounts set forth on Schedule 2.2(a)(i). The Company shall notify CS in writing promptly upon becoming aware
of any changes arising after the date hereof in the holders of Company Capital Stock, and the number and class or series of shares
of Company Capital Stock held by any such holder. All outstanding shares of Company Capital Stock are duly authorized, validly
issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the Company Charter Documents, or
any agreement to which the Company is a party or by which it is bound, and have been issued in compliance in all material respects
with applicable federal, state and foreign securities Laws. The Company has not repurchased any shares of Company Capital Stock
except in compliance in all material respects with all applicable federal, state, foreign and local Laws, including federal, state
and foreign securities Laws, and any agreements applicable thereto. The Company has no reasonable expectation that it will suffer
or incur any other Liability or Loss relating to or arising out of the issuance or repurchase of any shares of Company Capital
Stock, Company Options or Company Warrants, or out of any agreements or arrangements relating thereto. Except as set forth in Section 2.2(a)
of the Schedule of Exceptions, there are no declared or accrued but unpaid dividends with respect to any shares of Company Capital
Stock. The Company has no other capital stock authorized, issued or outstanding. Except as set forth in Section 2.2(a)
of the Schedule of Exceptions, no vesting provisions applicable to any shares of Company Restricted Stock, Company Options, Company
Warrants, or to any other rights to purchase Company Capital Stock will accelerate as a result of the transactions contemplated
by this Agreement.

 

    	11

    	 

    

 

(b)          Except
for the Plan, neither the Company nor any of its Subsidiaries has ever adopted or maintained any stock option plan or other plan
or arrangement providing for equity compensation to any Company Personnel. Except as set forth in Section 2.2(a) of
the Schedule of Exceptions, neither the Company nor any of its Subsidiaries has granted any options to purchase Company Capital
Stock or any other type of stock award other than pursuant to the Plan. The Company has reserved 48,271,695 shares of Company Common
Stock for issuance to employees and directors of, and consultants to, the Company under the Plan, (i) 1,922,426 shares
of which are issuable, as of the date hereof, upon the exercise of outstanding, unexercised options granted under the Plan, (ii) 32,239,880
shares of which have been issued, and not cancelled or exercised, as of the date hereof, upon the exercise of options granted
under the Plan and (iii) no shares of which have been issued, as of the date hereof, pursuant to stock restriction agreements under
the Plan. The Company has reserved 3,240,000 shares of Company Common Stock and 1,587,259 shares of Series AA Preferred Stock for
issuance upon the exercise of Company Warrants, (i) all shares of which are issuable, as of the date hereof, upon the exercise
of outstanding, unexercised warrants, and (ii) no shares of which have been issued, as of the date hereof, upon the
exercise of warrants. For each outstanding Company Option, Company Warrant, Company Restricted Stock or other stock award granted
under the Plan or otherwise, Section 2.2(b) of the Schedule of Exceptions sets forth, as of the date of this Agreement,
the name of the holder of such option, warrant or stock award, the grant date, the vesting commencement date (if different from
the grant date), the number of shares of Company Common Stock issuable upon the exercise of such option or warrant, the exercise
price of such option or warrant or the value at which such stock award was granted, the vesting schedule for such option, warrant
or stock award, including the extent vested to date, the type of option, warrant or stock award (including, in the case of options,
whether an option is intended to qualify as an incentive stock option as defined in Section 422 of the Code), whether or not
an election under Section 83(b) of the Code was filed in the case of a stock award (copies of which, if filed, have been provided
or made available to CS), the extent vested and to be vested as of the Effective Time (reflecting the passage of time and any acceleration
of vesting for such option, warrant or stock award that would result upon the consummation of the transactions contemplated by
this Agreement). All such Company Options, Company Warrants, Company Restricted Stock and other stock awards have been issued in
compliance in all material respects with all applicable federal, state and foreign Laws. Except for the Company Options, Company
Warrants, Company Restricted Stock and other stock awards identified in Section 2.2(b) of the Schedule of Exceptions,
there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which the Company
or any of its Subsidiaries is a party or by which it is bound, obligating the Company or any of its Subsidiaries to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of
the Company or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter
into any such option, warrant, call, right, commitment or agreement. The form(s) of agreement pursuant to which such Company Options
have been issued are attached to the Schedule of Exceptions as Section 2.2(b)(1), the form(s) of agreement pursuant
to which such Company Warrants have been issued are attached to the Schedule of Exceptions as Section 2.2(b)(2), and
the form(s) of agreement pursuant to which such Company Restricted Stock have been issued are attached to the Schedule of Exceptions
as Section 2.2(b)(3). Section 2.2(b) of the Schedule of Exceptions also indicates which holders of Company Options,
Company Warrants or Company Restricted Stock have executed which form of agreement as to which of such securities. There are no
outstanding or authorized stock appreciation, stock unit, phantom stock, profit participation or other similar rights with respect
to the Company. Except as contemplated hereby, the Company is not a party to, and as of the date hereof, there are no other voting
trusts, proxies, or other agreements or understandings with respect to the voting stock of the Company. As a result of the Merger,
CS will be the sole record and beneficial holder of all issued and outstanding Company Capital Stock and all rights to acquire
or receive any shares of Company Capital Stock.

 

    	12

    	 

    

 

(c)          Each
Company Option or other right to acquire Company Capital Stock or other equity of the Company (i) has an exercise price that was
at least equal to the fair market value of the underlying equity as of the date such Company Option or other right was granted
in accordance with all governing documents and in compliance with all applicable Law, (ii) has no feature for the deferral of compensation
other than the deferral of recognition of income until the later of exercise or disposition of such Company Option or other right,
(iii) to the extent it was granted after December 31, 2004, was granted with respect to a class of stock of the Company that is
“service recipient stock” (within the meaning of applicable regulations under Code Section 409A), and (iv) has in all
material respects been properly accounted for in accordance with GAAP in the Company’s Financial Statements provided to CS.

 

2.3         Subsidiaries.
Except as set forth in Section 2.1 of the Schedule of Exceptions, the Company (i) does not have, and has never had, any Subsidiaries,
(ii) does not otherwise own, and has never otherwise owned, any shares of capital stock or any interest in, or control, directly
or indirectly, any other corporation, partnership, association, joint venture or other business entity, and (iii) does not have
any ongoing obligation to purchase any shares of capital stock, or make any capital contribution to or other investment in, with
respect thereto. Except as set forth in Section 2.1 of the Schedule of Exceptions, all of the outstanding shares of capital stock
of, or other equity or voting interests in, each such Subsidiary have been validly issued and are fully paid and nonassessable
and are owned directly by the Company, free and clear of all Liens, including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests, except for restrictions imposed by applicable securities Laws. All
required capital contributions to the Subsidiaries have been made and have not been reduced or impaired. All applicable provisions
under applicable Law and the Subsidiary Charter Documents regarding the increase or the decrease of the share capital of the Subsidiaries
have been duly observed in all material respects. Any facts and other documents required by applicable Law to be filed with the
competent commercial register or other comparable authorities have been completed, duly and timely filed in all material respects.
Neither the Company nor any of its Subsidiaries have any permanent establishments, branches, agencies or similar affiliates. Gearworks,
Inc. is presently inactive and has no business operations.

 

2.4         Authority.

 

(a)          The
Company has all requisite corporate power and authority to enter into this Agreement and, subject to the adoption of this Agreement
by the Stockholders under Delaware Law and the Company Charter Documents, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and, subject to the adoption of this Agreement by the Stockholders
under Delaware Law and the Company Charter Documents prior to the Effective Time, no further action is required on the part of
the Company to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery by CS and Sub, constitutes the valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be subject to the
Laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of Law governing specific performance,
injunctive relief or other equitable remedies.

 

    	13

    	 

    

 

(b)          The
Board of Directors of the Company has validly (i) adopted the plan of merger set forth in this Agreement and approved this
Agreement, the Merger and the other transactions contemplated by this Agreement; (ii) declared that this Agreement, the Merger
and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and the Stockholders;
and (iii) recommended adoption and approval of this Agreement, the Merger and the other transactions contemplated by this
Agreement to the Stockholders.

 

2.5         No
Conflict. The execution and delivery by the Company of this Agreement, and the consummation of the transactions contemplated
hereby, will not conflict with or result in any violation of or default under (with or without notice or lapse of time, or both)
or give rise to a right of termination, cancellation, modification or acceleration of any obligation, payment of any benefit, or
loss of any benefit (any such event, a “Conflict”) under (i) any provision of the Company Charter Documents
or the Subsidiary Charter Documents; (ii) any mortgage, indenture, lease, contract (whether written or oral), covenant or
other agreement, instrument or commitment, permit, concession, franchise or license (each a “Contract” and collectively
the “Contracts”) to which the Company or any of its Subsidiaries is a party ; or (iii) any Law applicable
to the Company or any of its Subsidiaries or any of their properties (whether tangible or intangible) or assets. As a result of
the consummation of the transactions contemplated by this Agreement, the Surviving Corporation will not be prohibited from exercising
any of its rights under the Contracts (other than any Contracts identified on Schedule 6.2(e) required to be terminated hereby),
and neither CS nor the Surviving Corporation will be required to pay any additional amounts or consideration other than ongoing
fees, royalties or payments, which the Company or any of its Subsidiaries would otherwise be required to pay pursuant to the terms
of such Contracts had the transactions contemplated by this Agreement not occurred.

 

2.6         Governmental
Consents. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with any court, administrative
agency or commission or other federal, state, county, local or foreign governmental authority, instrumentality, agency or commission
(each, a “Governmental Entity”), is required by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except
for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.

 

    	14

    	 

    

 

2.7         Company
Financial Statements.

 

(a)          Section 2.7
of the Schedule of Exceptions sets forth (1) the Company’s consolidated audited balance sheet as of December 31 for each
of 2010, 2011 and 2012, and the related audited statements of income, cash flows and stockholders’ equity for the twelve
month period then ended and (2) the Company’s consolidated reviewed balance sheet as of December 31, 2013 and the related
reviewed statements of income, cash flows and stockholders’ equity for the twelve months then ended (all of the foregoing
financial statements of the Company and the notes thereto are hereinafter collectively referred to as the “Financial Statements”).
The Financial Statements are correct in all material respects and have been prepared in accordance with GAAP consistently applied
on a basis consistent throughout the periods indicated and consistent with each other. The Financial Statements present fairly,
in all material respects, the Company’s (including any consolidated Subsidiaries) financial condition and operating results
as of the dates and during the periods indicated therein. The Company maintains a standard system of accounting established and
administered in accordance with GAAP. The Company’s reviewed balance sheet as of December 31, 2013 is referred to hereinafter
as the “Current Balance Sheet.”

 

(b)          The
Company maintains a system of internal accounting controls and procedures that are sufficient to provide reasonable assurance that
(i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation
of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management’s authorization, and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any differences. Neither the Company (including
any Company Personnel) nor its independent accountants has identified or been made aware of (A) any significant deficiency or material
weakness in the system of internal accounting controls utilized by the Company, (B) any fraud, whether or not material, that involves
the management of the Company or any Company Personnel who have a role in the preparation of financial statements or the internal
accounting controls utilized by the Company or (C) any claim or allegation regarding any of the foregoing.

 

(c)          Section
2.7(c) of the Schedule of Exceptions sets forth a complete and accurate list of all Closing Debt incurred as of the date hereof.

 

2.8         No
Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any obligation, expense, claim, deficiency, guaranty
or endorsement of any type, whether constructive, accrued, absolute, contingent, matured, unmatured or other (whether or not required
to be reflected in financial statements in accordance with GAAP) that is material, either individually or in the aggregate, except
Liabilities which individually or in the aggregate (a) have been reflected in the Current Balance Sheet or disclosed in the
notes thereto (to the extent of such reflection or disclosure) or in Section 2.7(c) of the Schedule of Exceptions, (b) have
arisen in the ordinary course of business consistent with past practices since the date of the Current Balance Sheet, or (c) are
executory obligations arising in the ordinary course of business (and not as a result of the breach of any Contract identified
in Sections 2.13 or 2.14 hereof).

 

2.9         No
Changes. Since the date of the Current Balance Sheet, and except as expressly permitted by Section 5.1 hereof, there has
or have not been, occurred or arisen any:

 

(a)          transaction
by the Company or any of its Subsidiaries, which is material to the Company and its Subsidiaries taken as a whole, except in the
ordinary course of business and consistent with past practices;

 

(b)          amendments
or changes to the Company Charter Documents or the Subsidiary Charter Documents;

 

    	15

    	 

    

 

(c)          capital
expenditure or commitment by the Company or any of its Subsidiaries exceeding $10,000 individually or $50,000 in
the aggregate;

 

(d)          payment,
discharge or satisfaction, in any amount in excess of $10,000 in any one case, or $50,000 in the aggregate, of any claim
or Liability, other than payment, discharge or satisfaction of claims, Liabilities and obligations in the ordinary course of business
or of Liabilities reflected or reserved against in the Current Balance Sheet;

 

(e)          destruction
of, damage to, or loss of any assets (whether tangible or intangible) of the Company or any of its Subsidiaries with a book value
in excess of $10,000 in any one case or $50,000 in the aggregate, whether or not covered by insurance;

 

(f)          labor
disputes or claim of wrongful discharge or other unlawful labor practice or action with respect to the Company or any of its Subsidiaries;

 

(g)          change
in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company or any
of its Subsidiaries other than as required by GAAP;

 

(h)          change
by the Company or any of its Subsidiaries in any written election in respect of Taxes, adoption or change by the Company or any
of its Subsidiaries in any accounting method which would alter the historic treatment of an item on a Return, amendment to any
Return, agreement or settlement by the Company or any of its Subsidiaries of any claim or assessment in respect of any Taxes, or
extension or waiver by the Company or any of its Subsidiaries of the limitation period applicable to any claim or assessment in
respect of any Taxes;

 

(i)          revaluation
by the Company of any of its or its Subsidiaries’ assets (whether tangible or intangible);

 

(j)          declaration,
setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital
Stock or any stock or securities of its Subsidiaries, or any split, combination or reclassification in respect of any shares of
Company Capital Stock or any stock or securities in its Subsidiaries, or any issuance or authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of Company Capital Stock or any stock or securities in its Subsidiaries,
or any direct or indirect repurchase, redemption or other acquisition by the Company of any shares of Company Capital Stock or
any stock or securities in its Subsidiaries (or options, warrants or other rights convertible into, exercisable or exchangeable
therefor), except in accordance with the agreements evidencing Company Options and Company Restricted Stock;

 

(k)          a
material increase in the base salary or other compensation payable or to become payable by the Company or any of its Subsidiaries
to any Company Personnel, or the declaration, payment, commitment or obligation of any kind for the payment by the Company or any
of its Subsidiaries of a severance payment, termination payment, bonus or other additional salary or material compensation to any
such person, except payroll and fees to employees and consultants in the ordinary course of business and in accordance with existing
compensation or similar plans;

 

    	16

    	 

    

 

(l)          entering
into of any Contract to which the Company or any of its Subsidiaries is a party or by which they or any of their assets (whether
tangible or intangible) are bound or any termination, extension, amendment or modification of the terms of any Contract to which
the Company or any of its Subsidiaries is a party or by which they or any of their assets are bound, except in the ordinary course
of business and consistent with past practices;

 

(m)          sale,
lease, license (except for non-exclusive licenses of the Company Products in the ordinary course of business) or other disposition
of any of the material assets (whether tangible or intangible) or material properties of the Company or any of its Subsidiaries
taken as a whole, including the sale of any accounts receivable of the Company or any of its Subsidiaries, or any creation of any
security interest in any such assets or properties;

 

(n)          outstanding
loan by the Company or any of its Subsidiaries to any person or entity, incurring by the Company or any of its Subsidiaries of
any Indebtedness, guaranteeing by the Company or any of its Subsidiaries of any Indebtedness, issuance or sale of any debt securities
of the Company or any of its Subsidiaries or guaranteeing of any debt securities of others, except for advances to Company Personnel
for travel and business expenses in the ordinary course of business;

 

(o)          the
granting of any waiver or release by the Company or any of its Subsidiaries of any right or claim, including any write-off or other
compromise of any account receivable of the Company or any of its Subsidiaries;

 

(p)          the
commencement, settlement, notice or, to the Knowledge of the Company, threat, of any lawsuit or proceeding or other investigation
against the Company or any of its Subsidiaries;

 

(q)          notice
of any claim or potential claim of ownership by any person other than the Company or any of its Subsidiaries of the intellectual
property owned, developed or created by the Company or any of its Subsidiaries, or of any claim or potential claim of infringement
by the Company or any of its Subsidiaries of any other person’s intellectual property;

 

(r)          issuance
or sale, or contract to issue or sell, by the Company or any of its Subsidiaries of any shares of Company Capital Stock or any
stock or securities in its Subsidiaries or securities convertible into, or exercisable or exchangeable for, shares of Company Capital
Stock or any stock or securities in its Subsidiaries, or any securities, warrants, options or rights to purchase any of the foregoing,
except for issuances of Company Capital Stock or any stock or securities in its Subsidiaries upon the exercise thereof;

 

(s)          (i) sale
or license by the Company or any of its Subsidiaries of any Company Intellectual Property or execution of any agreement with respect
to any Company Intellectual Property, (ii) purchase or license by the Company or any of its Subsidiaries of any Intellectual
Property or execution of any agreement with respect to the Intellectual Property of any person or entity, (iii) agreement
by the Company or any of its Subsidiaries with respect to the development of any Intellectual Property with a third party, or (iv) material
change in pricing or royalties set or charged by the Company or any of its Subsidiaries to their customers or licensees or in pricing
or royalties set or charged by persons who have licensed Intellectual Property to the Company or any of its Subsidiaries, except,
in each case, in the ordinary course of business and consistent with past practices;

 

    	17

    	 

    

 

(t)          agreement
or material modification to any agreement pursuant to which any other party was granted marketing, distribution, development or
similar rights of any type or scope with respect to any products or technology of the Company or any of its Subsidiaries;

 

(u)          any
event or condition of any character that has had or would reasonably be expected to have a Company Material Adverse Effect; or

 

(v)         agreement
by the Company or any of its Subsidiaries, or any officer or employee on behalf of the Company or any of its Subsidiaries, to do
any of the things described in the preceding clauses (a) through (u) of this Section 2.9.

 

2.10       Tax
Matters.

 

(a)          Tax
Returns and Audits.

 

(i)          The
Company and each of its Subsidiaries has prepared and timely filed all required federal, state, local and foreign returns, estimates,
information statements and reports relating to any and all Taxes concerning or attributable to the Company or its Subsidiaries
(“Returns”), and such Returns are true, correct and complete in all material respects.

 

(ii)         Except
as properly reserved on the Current Balance Sheet, the Company and each of its Subsidiaries has paid or caused to be paid all Taxes
it is required to pay for which payment was due and has withheld with respect to Company Personnel and other persons (and timely
paid over to the appropriate Tax authority) all federal, state and foreign income taxes and social security charges and similar
fees, Federal Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes required to be withheld.

 

(iii)        There
is no Tax deficiency outstanding, assessed or proposed 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.

 

(iv)        None
of the Company, or any of its Subsidiaries or any other person on behalf of the Company or any of its Subsidiaries have granted
to any person any power of attorney that is currently in force with respect to any Tax matter.

 

(v)         Neither
the Company nor the Company Subsidiary has applied for or claimed, or is subject to any terms and conditions of, any Tax exemption,
Tax holiday or other Tax reduction agreement or order.

 

(vi)        The
Company and its Subsidiaries have disclosed on their federal income Returns all positions that would (if not disclosed) give rise
to a substantial understatement penalty under Section 6662 of the Code.

 

    	18

    	 

    

 

(vii)       Except
as set forth on Section 2.10(a)(vii) of the Schedule of Exceptions, to the Knowledge of the Company, there is no audit or
other examination of any 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 by any Tax authority that any such an audit or other examination is pending.

 

(viii)      Neither
the Company nor any of its Subsidiaries had, as of the date of the Current Balance Sheet, any Liabilities for unpaid federal, state,
local or foreign Taxes which have not been accrued or reserved on the Current Balance Sheet, whether asserted or unasserted, contingent
or otherwise, and neither the Company nor any of its Subsidiaries has incurred any Liability for Taxes since the date of the Current
Balance Sheet other than in the ordinary course of business.

 

(ix)         Neither
the Company nor any of its Subsidiaries is or has been a "reporting corporation" subject to the information reporting
and record maintenance requirements of Section 6038A of the Code and the Treasury Regulations promulgated thereunder. Neither the
Company nor its Subsidiaries is a party to any cost-sharing agreement or similar arrangement which is not a "qualified cost
sharing arrangement" within the meaning of Treasury Regulations Section 1.482-7.

 

(x)          The
Company has made available to CS in the Data Room copies of all foreign, federal, state and local income and all state and local
sales and use Returns for the Company and each of its Subsidiaries filed for all periods beginning on the date of their inception.

 

(xi)         There
are no liens, pledges, charges, claims, restrictions on transfer, mortgages, security interests or other encumbrances of any sort
(collectively, “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 or being contested in good faith.

 

(xii)        Neither
the Company nor any of its Subsidiaries has (A) ever been a member of an affiliated group (within the meaning of Section 1504(a)
of the Code) filing a consolidated federal income Return (other than a group the common parent of which was the Company), (B) ever
been a party to any Tax sharing, indemnification or allocation agreement (other than between or among the Company and its Subsidiaries),
or (C) any Liability for the Taxes of any person (other than Company or any of its Subsidiaries) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or agreement, or
otherwise, or is a party to any joint venture, partnership or other arrangement that is treated as a partnership for federal income
Tax purposes.

 

(xiii)      The
Company has not been, at any time within the last five years, a “United States Real Property Holding Corporation” within
the meaning of Section 897(c)(2) of the Code.

 

(xiv)      No
adjustment to Taxes relating to any Return filed by the Company or any of its Subsidiaries has been proposed in writing by any
Tax authority to the Company or any of its Subsidiaries.

 

    	19

    	 

    

 

(xv)       There
are no Tax rulings, requests for rulings, or “closing agreements” (as described in Section 7121 of the Code or any
corresponding provision of state, local or foreign Tax Law) relating to the Company or any of its Subsidiaries which would affect
the Company’s or any Company Subsidiary’s Liability for Taxes for any period ending after the Closing Date. Neither
the Company nor any Subsidiary will be required to include for any period ending after the Closing Date taxable income attributable
to (A) any prepaid amount received prior to the Closing, (B) an election under Section 108(i) of the Code, (C) any distributions
received prior to the Closing Date from an entity that is fiscally transparent for Tax purposes, or (D) any installment sale or
open transaction disposition made on or prior to the Closing Date. Neither the Company nor any Subsidiary has changed any method
of accounting that will require it to make any adjustment under Section 481 of the Code (or any corresponding provision of state,
local or foreign Tax Law) for any period ending after the Closing Date.

 

(xvi)      Neither
the Company nor any of its Subsidiaries has participated in an international boycott within the meaning of Section 999 of the Code.

 

(xvii)     The
Company is not and has never been an “S Corporation” within the meaning of Section 1361 of the Code.

 

(xv)       No
person holds any Company Stock that is subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code)
with respect to which a copy of an election under Section 83(b) of the Code has not been received by the Company.

 

(xviii)    Neither the
Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation”
in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code during the two-year period preceding
the date of this Agreement.

 

(xix)       Neither
the Company nor any of its Subsidiaries has engaged in a transaction that is the same as or substantially similar to one of the
types of transactions that the IRS 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 Regulation Section 1.6011-4(b)(2).

 

(xx)        The
Company and each of its Subsidiaries are and have at all times been resident for Tax purposes in its country of incorporation or
formation and are not and have not at any time been treated as a resident in any other country for any Tax purpose (including any
double taxation arrangement). 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 permanent establishment in such other country (within the meaning of any applicable
double taxation agreement).

 

(xxi)       No
claim has been made by any Tax authority in a jurisdiction where the Company does not file Returns that the Company is subject
to taxation by, or required to file any Return in, that jurisdiction.

 

    	20

    	 

    

 

(xxii)      The
prices and terms for the provision of any property or services by or to the Company and its Subsidiaries are arm’s length
for purposes of the relevant transfer pricing laws, and the Company and its Subsidiaries has properly and in a timely manner documented
its transfer pricing methodology in compliance with Sections 482 and 6662 (and any related sections) of the Code, any Treasury
Regulations, and any corresponding or similar provision of state, local, or applicable foreign Law.

 

(xxiii)     The
Company does not have an overall foreign loss within the meaning of Section 904(f) of the Code.

 

(xxiv)    There are
no requests for rulings or determinations in respect of any Taxes pending between the Company or its Subsidiaries and any Tax authority
and neither the Company nor its Subsidiaries have received any written tax opinions with respect to any material transaction relating
to the Company or its Subsidiaries.

 

(b)         Executive
Compensation Tax. There is no contract, agreement, plan or arrangement to which the Company or any of its Subsidiaries is a
party, including the provisions of this Agreement which, individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Code.

 

(c)         Section
409A. Each Contract, agreement, plan or arrangement between the Company or any ERISA Affiliate and any Company Personnel that
is a “nonqualified deferred compensation plan” (as such term is defined in Section 409A(d)(1) of the Code) subject
to Section 409A of the Code (or any state law equivalent) and the regulations and guidance thereunder (“Section 409A”),
if any, has been since January 1, 2005 maintained and operated in good faith compliance with Section 409A and since January 1,
2009, each such nonqualified deferred compensation plan has been in documentary compliance with Section 409A. No nonqualified deferred
compensation plan that was originally exempt from application of Section 409A has been “materially modified” (within
the meaning of IRS Notice 2005-1) at any time after October 3, 2004. There is no Contract, agreement, plan or arrangement to which
the Company or any of its ERISA Affiliates is a party, including the provisions of this Agreement, covering any Company Personnel,
which individually or collectively could require the Company or any of its ERISA Affiliates to pay a Tax gross up payment to, or
otherwise indemnify or reimburse, any Company Personnel for Tax-related payments under Section 409A.

 

2.11       Restrictions
on Business Activities. There is no agreement (non-competition or otherwise), commitment or Order to which the Company or any
of its Subsidiaries is a party or otherwise binding upon the Company or any of its Subsidiaries, which has or may reasonably be
expected to have the effect of prohibiting or impairing any present business practice of the Company or any of its Subsidiaries,
any acquisition of property (tangible or intangible) by the Company or any of its Subsidiaries, the conduct of business by the
Company or any of its Subsidiaries, in each case, as presently conducted by the Company or any of its Subsidiaries, or otherwise
limiting the freedom of the Company or any of its Subsidiaries to engage in any line of business or to compete with any person.
Without limiting the generality of the foregoing, neither the Company nor any of its Subsidiaries has entered into any agreement
under which the Company or any of its Subsidiaries is restricted from selling, licensing or otherwise distributing any of its technology
or products or from providing services to customers or potential customers in any geographic area, during any period of time or
in any segment of the market.

 

    	21

    	 

    

 

2.12       Title
to Properties; Absence of Liens and Encumbrances; Condition of Equipment and IT Systems.

 

(a)         Neither
the Company nor any of its Subsidiaries owns any real property, nor has the Company or any of its Subsidiaries ever owned any real
property. Section 2.12(a) of the Schedule of Exceptions sets forth a list of all real property currently leased by
the Company or any of its Subsidiaries or otherwise used or occupied by the Company or any of its Subsidiaries for the operation
of the Company’s or its Subsidiaries’ businesses (the “Leased Real Property”), together with the
name of the lessor, the date of the lease and each amendment thereto and, with respect to any current lease, the aggregate annual
rental payable under any such lease. All such current leases are in full force and effect, are valid and effective in accordance
with their respective terms, and there is not, under any of such leases, any existing default or event of default (or event which
with notice or lapse of time, or both, would constitute a default) by the Company or any of its Subsidiaries or, to the Knowledge
of the Company, by any other party thereto.

 

(b)         The
Company has delivered or made available to CS true, correct and complete copies of all leases, lease guaranties, subleases, agreements
for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property, including all amendments,
terminations and modifications thereof (the “Lease Agreements”); and there are no other Lease Agreements affecting
the real property or to which the Company or any of its Subsidiaries is bound, other than those identified in Section 2.12(a)
of the Schedule of Exceptions. Neither the Company nor any of its Subsidiaries has received any notice of a default, alleged failure
to perform, or any offset or counterclaim with respect to any such Lease Agreement, which has not been fully remedied and withdrawn.
The consummation of the transactions contemplated by this Agreement will not affect the enforceability against any person of any
such Lease Agreement or the rights of the Company, any of its Subsidiaries or the Surviving Corporation to the continued use and
possession of the Leased Real Property for the conduct of business as presently conducted.

 

(c)         The
Leased Real Property and any improvements thereon are in good operating condition and repair and are otherwise suitable for the
conduct of the business as presently conducted. To the Knowledge of the Company, the Leased Real Property and any improvements
thereon are structurally sufficient and free from structural, physical and mechanical defects, and are maintained in a manner consistent
with standards generally followed with respect to similar properties.

 

(d)         The
Company and each of its Subsidiaries has good and valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of its tangible properties and assets, real, personal and mixed, used or held for use in its business, free and
clear of any judgments or Liens, except (i) as reflected in the Current Balance Sheet or the notes thereto, (ii) Liens
for Taxes, assessments and similar charges which are not yet due and payable, and (iii) such imperfections of title and encumbrances,
if any, that do not materially detract from the value or materially interfere with the present use of the property subject thereto
or affected thereby.

 

    	22

    	 

    

 

(e)          Section 2.12(e)
of the Schedule of Exceptions lists all items of equipment, including IT Systems (the “Equipment”) with a book
value in excess of $5,000 and owned or leased by the Company or any of its Subsidiaries, and such Equipment is (i) adequate
for the conduct of the business of the Company and each of its Subsidiaries as currently conducted, and (ii) in good operating
condition, regularly and properly maintained, subject to normal wear and tear. The Company has taken commercially reasonable actions
to protect the confidentiality, integrity and security of the IT Systems (and all information and transactions stored or contained
therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption. To the Knowledge
of the Company, there has been no unauthorized use, access, material interruption or corruption to the IT Systems.

 

(f)          The
Company and its Subsidiaries have either (i) sole and exclusive ownership, free and clear of any judgments or Liens, or (ii) the
valid right to use all customer lists, customer contact information, customer correspondence and customer licensing and purchasing
histories relating to their current and former customers (the “Customer Information”).

 

(g)          All
improvements on the Leased Real Property (i) substantially conform to all applicable Laws, including zoning and building ordinances
and health and safety ordinances, and such Leased Real Property is zoned for the various purposes for which the leased Real Property
and improvements thereon are presently being used, and (ii) are adequate and sufficient for the operation of the business of the
Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries has received notice from any Governmental Entity
or lessor requiring material work to be done or material improvements to be made upon any of the Leased Real Property and to the
Knowledge of the Company no such work or improvements has been or will be requested by any other person.

 

2.13       Intellectual
Property.

 

(a)          Section
2.13(a)(i) and Section 2.13(a)(ii) of the Schedule of Exceptions contain, respectively, a complete and accurate list
of (i) all products and services currently marketed, warranted or supported by the Company or any of its Subsidiaries and in use
by customers of the Company or any of its Subsidiaries and (ii) all products and service offerings that are in development as of
the date hereof (other than updates or upgrades to existing products) and that the Company expects or intends to make generally
available commercially within six months of the date of this Agreement (such products described in clauses (i) and (ii), the “Company
Products”).

 

    	23

    	 

    

 

(b)          Section
2.13(b) of the Schedule of Exceptions contains a complete and accurate list, as of the date hereof, of the following Owned
Company Intellectual Property: (i) all registered Trademarks; (ii) all Patents and (iii) all registered Copyrights and applications
therefor, in each case listing, as applicable, (A) the name of the applicant/registrant and current owner, (B) the jurisdiction
where the application/registration is located and (C) the application or registration number. All of the Owned Company Intellectual
Property is valid to the Knowledge of the Company (without any duty of inquiry) and subsisting (except in each case with respect
to applications). All material logbooks, documents and records supporting the creation and ownership of Intellectual Property have
been confidentially retained by the Company and its Subsidiaries. All necessary documents and certificates in connection with such
Owned Company Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the
United States and in such non-United States jurisdictions where the Company has sought such protection, as the case may be, for
the purposes of perfecting, prosecuting and maintaining such Owned Company Intellectual Property. Except as set forth on Section
2.13(b) of the Schedule of Exceptions, there are no actions that must be taken by the Company or any of its Subsidiaries within
90 days of the date of this Agreement, including the payment of any registration, maintenance or renewal fees or the filing of
any responses to Governmental Entity office actions, documents, applications or certificates for the purposes of obtaining, maintaining,
perfecting or preserving or renewing any Owned Company Intellectual Property. Neither the Company nor any of its Subsidiaries has
claimed “small business status,” in the application for or registration of any Owned Company Intellectual Property.

 

(c)          Section
2.13(c) of the Schedule of Exceptions contains a complete and accurate list, as of the date hereof, of the Domain Name registrations
of the Company and its Subsidiaries. Section 2.13(c) of the Schedule of Exceptions identifies, for each Domain Name registration,
the named owner, and the registrar or equivalent person with whom that Domain Name is registered. In the case in which the Company
or any of its Subsidiaries has acquired ownership of a Domain Name registration from another party, the Company or such Subsidiary
has made or procured a transfer of the Domain Name in accordance with the procedure of the registrar.

 

(d)          In
each case in which the Company or any of its Subsidiaries has acquired ownership of any Trademark, Copyright, or Patent currently
included in the Owned Company Intellectual Property from another person (each of which are identified in Section 2.13(d)
of the Schedule of Exceptions ), the Company or one of its Subsidiaries has obtained a valid and enforceable assignment sufficient
to irrevocably transfer all such person’s rights in and to all such Intellectual Property to the Company or such Subsidiary
and has, in the case of a Patent, registered Trademark or registered Copyright, recorded or had recorded each such assignment with
the U.S. Patent and Trademark Office, the U.S. Copyright Office, or their respective equivalents in the applicable jurisdiction,
in each case in accordance with applicable Laws.

 

(e)          Section
2.13(e) of the Schedule of Exceptions contains a complete and accurate list of all Contracts as of the date hereof (such agreements,
the “Company Intellectual Property Agreements”) (i) under which the Company or any of its Subsidiaries uses
or has the right to use any Licensed Company Intellectual Property, other than licenses and related services agreements for commercially
available software that is used by the Company or its Subsidiaries but not incorporated into any Company Products and that has
not been substantially customized solely for use by Company and its Subsidiaries or (ii) under which the Company or any of its
Subsidiaries has licensed to others the right to use or agreed to transfer to others any of the Company Intellectual Property,
other than non-exclusive end user licenses granted in the ordinary course of business, in each case specifying the parties to the
agreement. Except as set forth in Section 2.13(e) of the Schedule of Exceptions, neither the Company nor any of its Subsidiaries
has granted any exclusive license under any Owned Company Intellectual Property or any licenses to use any Company Source Code.
There are no pending disputes regarding the scope of any Company Intellectual Property Agreements, performance under any Company
Intellectual Property Agreements, or with respect to payments made or received under any Company Intellectual Property Agreements.

 

    	24

    	 

    

 

(f)          The
Company Intellectual Property is sufficient for the conduct of the business of the Company and its Subsidiaries as it is currently
conducted. Without limiting the foregoing, the Company or its Subsidiaries have the right to use all software development tools,
library functions or compilers that the Company or its Subsidiaries (i) use to create, modify, compile, or support any Company
Product or (ii) use to provide any services provided by the Company and its Subsidiaries.

 

(g)          The
Company and its Subsidiaries own all right, title and interest in the Owned Company Intellectual Property, free and clear of all
Liens other than encumbrances, restrictions or other obligations expressly set forth in any of the Company Intellectual Property
Agreements. All Owned Company Intellectual Property was written and created solely by either (i) employees of the Company or its
Subsidiaries acting within the scope of their employment or (ii) by third parties who have validly and irrevocably assigned all
of their rights therein to the Company, and no such third party owns or has any rights to any of the Owned Company Intellectual
Property. No Company Personnel owns or has a license to any Company Intellectual Property.

 

(h)          The
Company and each of its Subsidiaries has taken reasonable and appropriate steps to protect and preserve the confidentiality of
the Trade Secrets that comprise any part of the Company Intellectual Property, and, to the Knowledge of the Company, there have
not occurred any unauthorized uses, disclosures or infringements of any such Trade Secrets by any person. Without limiting the
foregoing, the Company and its Subsidiaries have a confidentiality and assignment agreement, substantially in the Company’s
standard form previously delivered or made available to CS, in place with each employee and contractor who has ever created Intellectual
Property on behalf of the Company. To the Knowledge of the Company there has been no breach of any such agreement.

 

(i)          None
of the Company or any of its Subsidiaries or any of its or their current products or services or other operation of the Company’s
or its Subsidiaries’ business has infringed upon or otherwise violated, or is infringing upon or otherwise violating, in
any respect the Intellectual Property Rights of any third party. To the Knowledge of the Company (without any duty of inquiry),
no person or any of such person’s products or services or other operation of such person’s business is infringing upon
or otherwise violating any Company Intellectual Property. This Section 2.13(i) shall be the only representation or warranty in
this Agreement with respect to matters of infringement, misappropriation or other violation of any third party Intellectual Property
Rights, and no other provision in this Agreement will be construed as such.

 

(j)          There
is no suit, claim, action, investigation or proceeding pending or, to the Knowledge of the Company, threatened with respect to,
and the Company and its Subsidiaries have not been notified in writing of, any alleged infringement or other violation by the Company
or any of its Subsidiaries or any of its or their current products or services or other operation of the Company’s or its
Subsidiaries’ business of the Intellectual Property Rights of such third party. There is no pending or, to the Knowledge
of the Company, threatened claim challenging the validity or enforceability of, or contesting the Company’s or any of its
Subsidiaries’ rights with respect to, any of the Company Intellectual Property. Neither the Company nor any of its Subsidiaries
has received any opinion of counsel regarding (i) any potential allegation of infringement, (ii) the application of any Patent
to the Company Products, or (iii) the operation of the Company’s and its Subsidiaries’ business with respect to the
foregoing. The Company and its Subsidiaries are not subject to any Order of any Governmental Entity that restricts or impairs the
use, transfer or licensing of any Company Intellectual Property.

 

    	25

    	 

    

 

(k)          The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including the Merger) will
not result in (i) the Company or its Subsidiaries granting to any third party any rights or licenses to any Intellectual Property
or Intellectual Property Rights, (ii) any right of termination or cancellation under any Company Intellectual Property Agreement,
(iii) the imposition of any Lien on any Owned Company Intellectual Property, or (iv) after the Merger, CS or any of its Subsidiaries
being required, under the terms of any agreement to which the Company or any of its Subsidiaries is a party, to grant any third
party any rights or licenses to any of CS’s or any of its Subsidiaries’ Intellectual Property or Intellectual Property
Rights or to pay any royalties or other amounts in excess of those that would have, in any event, been payable by the Company or
any of its Subsidiaries had the transactions contemplated by this Agreement not occurred.

 

(l)          As
of the date hereof, to the Knowledge of the Company, there are no design or other errors in the Company Products that permit unauthorized
access to computers or systems of users through those Company Products. The Company and its Subsidiaries have implemented procedures
consistent with standard industry practices to protect the Company Products from viruses, disabling codes or other malicious code.

 

(m)         Section
2.13(m) of the Schedule of Exceptions contains a complete and accurate list as of the date hereof of all software that is distributed
as “open source software” or under a similar licensing or distribution model (including but not limited to the GNU
General Public License) (“Open Source Materials”) incorporated in or embedded in any Company Product. Except
as expressly set forth in Section 2.13(m) of the Schedule of Exceptions, neither the Company nor any of its Subsidiaries
has (i) incorporated Open Source Materials into, or combined Open Source Materials with, any Company Product, (ii) distributed
Open Source Materials in conjunction with any Company Product, or (iii) used Open Source Materials that create, or purport to create,
obligations for the Company or any Subsidiary with respect to Company Intellectual Property or grant, or purport to grant, to any
third party, any right or immunity with respect to any Company Intellectual Property (including but not limited to using any requirement
that other software incorporated into, derived from (if the Company currently distributes such software) or distributed with such
Open Source Materials be (A) disclosed or distributed in source code form, (B) licensed for the purpose of making derivative works
or (C) redistributable at no charge).

 

(n)         Neither
the Company nor any Subsidiary has experienced any defects, to the extent material and outside the ordinary course of business,
in the software and hardware used in their business as it is currently conducted that have not been fully resolved, including any
error or omission in the processing of any data.

 

    	26

    	 

    

 

(o)          None
of the Company Source Code for the Company Products, or Trade Secrets the Company wished to continue maintaining as confidential,
have been published or disclosed by the Company or any of its Subsidiaries, except to its employees or advisers or pursuant to
non-disclosure agreements or pursuant to source code escrow agreements, or, to the Knowledge of the Company, by any other person,
except as authorized by the Company under a non-disclosure agreement enforceable by the Company. No condition has occurred that
would be sufficient to entitle the beneficiary under any escrow arrangement under which the Company or any of its Subsidiaries
has deposited any Company Source Code for any Company Product or Trade Secret to require release of such Company Source Code. Section
2.13(o) of the Schedule of Exceptions identifies each Contract pursuant to which the Company or any of its Subsidiaries has
deposited, or is or may be required to deposit, with an escrow agent or any other person or entity, any Company Source Code. The
consummation of the transactions contemplated hereby (including the Merger) will not constitute a condition sufficient to entitle
the beneficiary under any escrow arrangement under which the Company or any of its Subsidiaries has deposited any Company Source
Code or Trade Secret to require release of such Company Source Code or Trade Secret.

 

(p)          No
government funding, facilities of a university, college, other educational institution or research center was used in the development
of any Owned Company Intellectual Property. To the Knowledge of the Company, no Company Personnel who was involved in, or who contributed
to, the creation or development of any Owned Company Intellectual Property, has performed services for the government, university,
college, or other educational institution or research center with respect to technology or inventions that have been or may be
incorporated into a Company Product or related to Company Intellectual Property during a period of time during which such Company
Personnel was also performing services for the Company or any of its Subsidiaries.

 

(q)          Neither
the Company nor any of its Subsidiaries has any commitment to any standards body to license any Owned Company Intellectual Property,
to any person or entity by virtue of that person or entity being a member of a standards body, or to any person or entity by virtue
of that person or entity having implemented a standard administered or promulgated by a standards body.

 

(r)          If
the Company or any of its Subsidiaries has exported the Company Products, or any technical information or other technology within
its control, it has done so in all respects as required by the U.S. export Laws and rules promulgated and enforced by the Bureau
of Export Administration. The Company or its Subsidiaries have made no representation or warranty to any customer that any Company
Product is compliant with HIPAA.

 

(s)          Except
as set forth in Section 2.13(s) of the Schedule of Exceptions, all licenses to end users of the Owned Company Intellectual
Property during the prior three (3) years were granted by the Company using the form of the Company’s end user license agreement
that is attached to Section 2.13(s) of the Schedule of Exceptions.

 

2.14       Contracts.
Except as set forth in Section 2.14 of the Schedule of Exceptions, as of the date hereof, neither the Company nor any of its Subsidiaries
is currently a party to, nor are they bound by:

 

    	27

    	 

    

 

(a)         any
agreement or plan, including any stock option plan, stock appreciation rights plan, phantom stock plan stock purchase plan or other
form of equity compensation arrangement (other than any agreement governing a Company Option, the form of which is attached to
the Schedule of Exceptions as Section 2.2(b)(1)), any of the benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of
the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

 

(b)         any
fidelity or surety bond or completion bond;

 

(c)         any
lease of personal property having a value in excess of $10,000 individually or $50,000 in the aggregate;

 

(d)         any
Contract relating to capital expenditures and involving future payments in excess of $10,000 individually or $50,000
in the aggregate;

 

(e)         any
Contract relating to the disposition or acquisition of assets or any interest in any business enterprise outside the ordinary course
of the Company’s or any of its Subsidiaries’ businesses;

 

(f)          any
mortgage, indenture, guarantee, loan or credit agreement, security agreement or other agreement or instrument relating to the borrowing
of money or extension of credit;

 

(g)         any
purchase order or Contract for the purchase of materials involving in excess of $10,000 individually or $50,000 in
the aggregate;

 

(h)         any
joint marketing or development Contract;

 

(i)          any
Carrier Agreement or any sales representative, original equipment manufacturer, value added, remarketer, reseller, dealer, distribution
or independent software vendor, or other Contract for distribution of the Company’s or any of its Subsidiaries’ products,
technology or services, in each case involving more than $100 paid to or payable by the Company;

 

(j)          any
other Contract that involves (i) $10,000 individually or $50,000 in the aggregate or more payable by the Company
or any of its Subsidiaries and is not cancelable without penalty within thirty (30) days, (ii) minimum purchase commitments by
the Company or any of its Subsidiaries, or (iii) the development or delivery of any customer-specified product enhancements or
upgrades; or

 

(k)         any
most-favored nations undertakings or price protection mechanisms.

 

    	28

    	 

    

 

2.15       No
Defaults. The Company and each of its Subsidiaries is in compliance with and has not materially breached, violated or defaulted
under, or received notice that it has materially breached, violated or defaulted under, any of the terms or conditions of any Contract
required to be disclosed under Sections 2.13 or 2.14 hereof, nor is the Company aware of any event that would constitute such
a breach, violation or default with the lapse of time, giving of notice or both. Each Contract required to be disclosed under Sections 2.13
or 2.14 hereof is in full force and effect, and neither the Company nor any of its Subsidiaries is in default thereunder, nor to
the Knowledge of the Company is any other party to any such Contract in default thereunder. Except as set forth in Section 2.15
of the Schedule of Exceptions, the consummation of the transactions contemplated by this Agreement will neither violate nor result
in the breach, modification, cancellation, termination or suspension (with the lapse of time, giving of notice or both) of any
Contract required to be disclosed under Sections 2.13 or 2.14 hereof. Except as set forth in Section 2.15 of the Schedule
of Exceptions, the consummation of the transactions contemplated by this Agreement will not require the consent of any party to
the Contracts required to be disclosed under Sections 2.13 or 2.14 hereof. Following the Closing Date, both CS and the Surviving
Corporation will be permitted to exercise all of the Company’s and its Subsidiaries’ rights under the Contracts required
to be disclosed under Sections 2.13 or 2.14 hereof to the same extent the Company and its Subsidiaries would have been able
to had the transactions contemplated by this Agreement not occurred and without being required to pay any additional amounts or
consideration other than fees, royalties or payments which the Company or any of its Subsidiaries would otherwise be required to
pay had such transactions contemplated hereby not occurred.

 

2.16       Interested
Person Transactions.

 

(a)          No
officer or director or, to the Knowledge of the Company, holder of more than five percent (5%) of the outstanding shares of Company
Capital Stock, nor any immediate family member of any of such persons, or any trust, partnership, corporation or other entity in
which any of such persons has or has had an interest, (an “Interested Person”), has or has had, directly or
indirectly, (i) an economic interest in any entity which furnished or sold, or furnishes or sells, services, products or technology
that the Company or any of its Subsidiaries furnishes or sells, or proposes to furnish or sell, or (ii) any economic interest
in any entity that purchases from or sells or furnishes to the Company or any of its Subsidiaries, any services, products or technology,
or (iii) a direct or indirect economic interest in any Contract to which the Company or any of its Subsidiaries is a party,
except in the case of clause (iii) in any such person’s capacity as an officer, director or stockholder of the Company or
its Subsidiaries; provided, however, that ownership of no more than five percent (5%) of the outstanding voting stock of a private
corporation, or one percent (1%) of the outstanding voting stock of a publicly traded corporation, shall not be deemed to be an
“interest in any entity” for purposes of this Section 2.16.

 

(b)          All
transactions pursuant to which any officer, director or stockholder of the Company or any of its Subsidiaries or any Interested
Person has purchased any services, products or technology from, or sold or furnished any services, products or technology to, the
Company or any of its Subsidiaries, have been on an arms’ length basis on terms no less favorable to the Company or such
Subsidiary than would be available from an unaffiliated party.

 

(c)          To
the Knowledge of the Company, there are no Contracts with regard to contribution or indemnification between or among any of the
Stockholders.

 

2.17       Governmental
Authorization. Each consent, license, permit, grant or other authorization (i) pursuant to which the Company and each
of its Subsidiaries currently operates or holds any interest in any of its properties, or (ii) which is required for the operation
of the Company’s or any of its Subsidiaries’ business as currently conducted has been issued or granted to the Company
or such Subsidiary and is in full force and effect.

 

    	29

    	 

    

 

2.18       Litigation.
Except as set forth in Section 2.18 of the Schedule of Exceptions, there is no action, suit, claim or proceeding of any nature
pending or, to the Knowledge of the Company, threatened against the Company, any of its Subsidiaries, any of their properties (tangible
or intangible) or any of their officers or directors in their respective capacities as such. There is no investigation, inquiry
or other proceeding pending or, to the Knowledge of the Company, threatened against the Company, any of its Subsidiaries, any of
their properties (tangible or intangible) or any of their officers or directors in their respective capacities as such by or before
any Governmental Entity. No Governmental Entity has provided the Company or any of its Subsidiaries with notice challenging or
questioning the legal right of the Company or any of its Subsidiaries to conduct its operations as conducted at that time or as
presently conducted. There is no Order to which the Company or any Subsidiary, or any of the assets owned or used by the Company
or any Subsidiary, is subject; and to the Company’s Knowledge, none of the Stockholders are subject to any Order that relates
to the Company’s or any Subsidiary’s business or to any of the assets owned or used by the Company or any Subsidiary.
To the Knowledge of the Company, no officer or employee of the Company or any Subsidiary is subject to any Order that prohibits
such officer or employee from engaging in or continuing any conduct, activity or practice relating to the Company’s or such
Subsidiary’s business.

 

2.19       Accounts
Receivable.

 

(a)          The
Company has delivered or made available to CS a list of all accounts receivable of the Company and its Subsidiaries as of the Current
Balance Sheet date, together with the respective range of days elapsed since each invoice.

 

(b)          All
of the Company’s and its Subsidiaries’ accounts receivable are bona fide, arose in the ordinary course of business
and are carried at values determined in accordance with GAAP, consistently applied, less any reserves for doubtful accounts set
forth on the Current Balance Sheet. No person has any Lien on any of the Company’s or its Subsidiaries’ accounts receivable,
and no request or agreement for deduction or discount has been made with respect to any of the Company’s or its Subsidiaries’
accounts receivable.

 

2.20      Minute
Books. The minutes of the proceedings of meetings and written actions of the Board of Directors and Stockholders of the Company
and each of its Subsidiaries provided or made available to CS are the only minutes of the Company and its Subsidiaries as of the
date of this Agreement and contain accurate summaries of all meetings and actions by written consent of the Board of Directors
(or committees thereof) of the Company and its Subsidiaries and of all meetings and actions by written consent of the stockholders
of the Company and its Subsidiaries, since the time of incorporation of the Company or such Subsidiary.

 

2.21      Environmental
Matters. Without limiting the generality of any other representations and warranties contained in this Article II:

 

    	30

    	 

    

 

(a)          Environmental
Compliance. The Company and each of its Subsidiaries are currently in compliance with and has for the five (5) years prior
to the date hereof complied in all respects with, and has not received any written or oral notice or other communication asserting
or alleging a violation of, Environmental Laws or Environmental Orders. Neither the Company, any of its Subsidiaries nor any of
its respective predecessors has generated, transported, stored, used, managed, manufactured, sold, reclaimed, recycled or disposed
of any Hazardous Materials, or any product containing a Hazardous Material, except in compliance with Environmental Laws.

 

(b)          Environmental
Liabilities and Costs. None of the Company or any of its Subsidiaries or the Company’s or any of its Subsidiaries’
real properties, assets, equipment or facilities is subject to any existing, pending or, to the Knowledge of the Company, threatened,
Liability under or relating to Environmental Laws or Environmental Orders (including without limitation Liabilities arising out
of the manufacture, processing, distribution, use or sale of any Company Products).

 

(c)          Environmental
Permits. The Company and each of its Subsidiaries currently holds, and has for the five (5) years prior to the Closing Date
held, all Environmental Permits necessary for the conduct of its respective activities and businesses (including, for the avoidance
of doubt, those which relate to the generation, transportation, manufacture, disposal of, or sale of any product containing, a
Hazardous Material) as such activities and businesses are currently being conducted, were conducted in the past, and are currently
contemplated to be conducted.

 

2.22       Fees
and Expenses.

 

(a)          Neither
the Company nor any of its Subsidiaries has incurred, nor will any of them incur, directly or indirectly, any Liability for investment
banking fees or for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby, other than those listed on Section 2.22(b) of the Schedule of Exceptions.

 

(b)          Section 2.22(b)
of the Schedule of Exceptions sets forth a good faith estimate of the Third-Party Expenses as of the date of this Agreement.

 

2.23       Employee
Benefit Plans and Compensation.

 

(a)          Schedule.
Section 2.23(a)(i) of the Schedule of Exceptions contains an accurate and complete list of each Company Employee Plan
and each Employee Agreement (whether or not under a Company Employee Plan). Neither the Company nor any of its Subsidiaries or
ERISA Affiliates has made any plan or commitment to establish, adopt or enter into any new Company Employee Plan or Employee Agreement,
or to modify any Company Employee Plan or Employee Agreement (except to the extent required by Law). Section 2.23(a)(ii)
of the Schedule of Exceptions sets forth a table listing the name and salary of each exempt employee of the Company and/or each
of its Subsidiaries and the name and compensation arrangement for each consultant of the Company and/or each of its Subsidiaries.

 

    	31

    	 

    

 

(b)          Documents.
The Company has delivered, or made available, to CS (i) correct and complete copies of all documents embodying each Company
Employee Plan and each Employee Agreement, including all amendments, summary plan descriptions, and trust documents, (ii) the
three (3) most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any,
required under ERISA for any Company Employee Plan, (iii) if any Company Employee Plan is funded, the most recent annual and
periodic accounting of such Company Employee Plan’s assets, (iv) all material written agreements and contracts relating
to each Company Employee Plan, including administrative service agreements and group insurance contracts, (v) all material
written communications relating to any established or proposed Company Employee Plan that relates to any material amendments, terminations,
increases or decreases in benefits, acceleration of payments or vesting schedules or other events that would result in any material
Liability to the Company or any of its Subsidiaries or ERISA Affiliates, (vi) all material correspondence to or from any Governmental
Entity relating to any Company Employee Plan, (vii) all policies pertaining to fiduciary Liability insurance covering the
fiduciaries for each Company Employee Plan, (viii) discrimination test results for each Company Employee Plan, if applicable, for
the three (3) most recent plan years, (ix) the most recent IRS determination letter (or opinion letter in the case of a prototype
or volume submitter plan) issued with respect to each Company Employee Plan, and (x) visa and work permit information with respect
to current Company Personnel. With respect to any Company Employee Plan that is maintained in any non-U.S. jurisdiction (an “International
Plan”), the Company has delivered, or made available, to CS correct and complete copies of, to the extent applicable,
(i) copies of such International Plan, including all amendments, supplements and modifications to such International Plan, (ii)
the most recent annual report or similar compliance documents required to be filed with any Governmental Entity with respect to
such International Plan, and (iii) any document with respect to such International Plan comparable to the IRS determination letter
referenced above.

 

(c)          Employee
Plan Compliance. Each Company Employee Plan has been established and maintained in accordance with its terms and in material
compliance with all applicable Laws. The Company and each of its Subsidiaries and ERISA Affiliates has performed all obligations
required to be performed by them under each Company Employee Plan. Each Company Employee Plan intended to be qualified under Section 401(a)
of the Code has timely obtained a favorable determination letter from the IRS or is entitled to rely on an opinion letter issued
to the Plan’s prototype or volume submitter sponsor, and to the Knowledge of the Company, nothing has occurred since the
date of that letter that could reasonably be expected to cause any such Company Employee Plan to fail to qualify under Section 401(a)
of the Code. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406
and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA or Section 4975 of the Code, has occurred with
respect to any Company Employee Plan. There are no material actions, suits or claims pending or, to the Knowledge of the Company,
threatened or reasonably anticipated (other than routine claims for benefits) against any Company Employee Plan or against the
assets of any Company Employee Plan. Each Company Employee Plan that is not an Employee Agreement can be amended, terminated or
otherwise discontinued prior to the Effective Time in accordance with its terms, without material Liability to CS, the Company,
any Subsidiary of the Company or any ERISA Affiliate (other than ordinary administration expenses). There are no audits, inquiries
or proceedings pending or to the Knowledge of the Company or any of its Subsidiaries or ERISA Affiliates, threatened by the IRS,
U.S. Department of Labor or any other Governmental Entity with respect to any Company Employee Plan. The Company and its Subsidiaries
and ERISA Affiliates are not subject to any penalty or tax with respect to any Company Employee Plan under Section 502(i)
of ERISA or Sections 4975 through 4980 of the Code, nor is any employee or former employee of the Company subject to penalty
under Section 409A of the Code. The Company and each of its Subsidiaries and ERISA Affiliates has timely made all contributions
and other payments required by and due under the terms of each Company Employee Plan or has properly accrued all such contributions
and other payments to the extent such payments and contributions are not yet due. Where applicable, each International
Plan has been approved by the relevant Governmental Entity so as to enable the Company and/or its Subsidiaries or ERISA Affiliates
to enjoy the most favorable taxation status possible, and the Company is not aware of any basis on which such approval may cease
to apply.

 

    	32

    	 

    

 

(d)          No
Pension Plans or Welfare Plans. Neither the Company nor any of its Subsidiaries nor any ERISA Affiliates has ever maintained,
established, sponsored, participated in, or contributed to, any (i) employee benefit plan subject to Section 412 of the Code
or Title IV of ERISA, (ii) “multiemployer plan” within the meaning of Section 3(37) of ERISA, (iii) “multiple
employer plans” for purposes of ERISA, (iv) a “welfare benefit fund” within the meaning of Section 419 of the
Code, or (v) an International Plan that is a defined benefit pension plan. No Company Employee Plan provides health or disability
benefits that are not fully insured through an insurance contract. No International Plan has any unfunded Liabilities that, as
of the Effective Time, will not be offset by insurance or fully accrued.

 

(e)          No
Post-Employment Obligations. No Company Employee Plan provides, or reflects or represents any material Liability to provide,
post-termination or retiree life insurance, health or other retiree employee welfare benefits to any person for any reason, except
as may be required by COBRA or other applicable statute, and neither the Company nor any of its Subsidiaries or ERISA Affiliates
has ever represented, promised or contracted (whether in oral or written form) to any Company Personnel (either individually or
to Company Personnel as a group) or any other person that such Company Personnel or other person would be provided with post-termination
or retiree life insurance, health or other employee welfare benefit, except to the extent required by statute.

 

(f)          COBRA;
FMLA; HIPAA. The Company, each of its Subsidiaries and ERISA Affiliates has, prior to the Effective Time, complied in all material
respects with the health care continuation requirements of COBRA, Family Medical Leave Act of 1993, HIPAA, the Women’s Health
and Cancer Rights Act of 1998, the Newborns’ and Mothers’ Health Protection Act of 1996, the Genetic Information Nondiscrimination
Act of 2008, the Affordable Care Act of 2010 and any similar provisions of state or foreign Law applicable to Company Personnel.
Neither the Company nor any of its Subsidiaries or ERISA Affiliates has any material unsatisfied obligations to any Company Personnel
or qualified beneficiaries pursuant to COBRA, HIPAA or any state or foreign Law governing health care coverage or extension.

 

(g)          Effect
of Transaction. The execution of this Agreement and the consummation of the transactions contemplated hereby will not (either
alone or upon the occurrence of any additional or subsequent events) constitute an event under any Company Employee Plan, Employee
Agreement, trust or loan or other arrangement that will or may result in, (i) any payment (whether of severance pay or otherwise),
acceleration, forgiveness of Indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits or (ii) the
payment of any amount that may be deemed a “parachute payment” under Section 280G of the Code with respect to
any Company Personnel (a “Section 280G Payment”). The Company has provided to CS its analysis regarding
Section 280G Payments prepared in connection with this Agreement, which analysis was prepared in good faith. There is no contract,
agreement, plan or arrangement to which the Company or any of its Subsidiaries or ERISA Affiliates is a party or by which any of
them is bound to compensate any Company Personnel for excise taxes paid pursuant to Section 4999 of the Code.

 

    	33

    	 

    

 

(h)          Employment
Matters. The Company and each of its Subsidiaries and ERISA Affiliates: (i) has complied in all material respects with
all applicable foreign, federal, state and local Laws, collective agreements, works agreements, rules and practices respecting
employment, employment practices, terms and conditions of employment and wages and hours including, without limitation, orders
and awards relevant to terms and conditions of service, health and safety, labor leasing, use of fixed-term contracts, supply of
temporary staff, social security filings and payments, secondment and expiration rules, applicable requirements in respect of staff
representation and paid vacations, in each case, with respect to Company Personnel, (ii) has withheld and reported all amounts
required by Law or agreement to be withheld and reported with respect to wages, salaries and other payments to Company Personnel,
(iii) is not liable for any arrears of wages, taxes or penalties for failure to comply with any of the foregoing, and (iv) is
not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity, with
respect to unemployment compensation benefits, social security or other benefits or obligations for Company Personnel (other than
routine payments to be made in the normal course of business and consistent with past practice). There are no pending or, to the
Knowledge of the Company, threatened or reasonably anticipated claims or actions against the Company or any of its Subsidiaries
or ERISA Affiliates under any worker’s compensation policy or long-term disability policy. Neither the Company nor any of
its Subsidiaries or ERISA Affiliates has or reasonably anticipates any direct or indirect material Liability of the Company or
any of its Subsidiaries with respect to any misclassification of any person as an independent contractor rather than as an employee,
or with respect to any employee leased from another employer. The Company and its Subsidiaries and its ERISA Affiliates have not
undergone any, and there is no pending, audit by a Governmental Entity related to any of their employees or independent contractors
related to compensation, classification or otherwise.

 

(i)          Labor.
No work stoppage or labor strike against the Company or any of its Subsidiaries is pending or, to the Knowledge of the Company,
threatened or reasonably anticipated. The Company does not know of any activities or proceedings of any labor union to organize
any Company Personnel. There are no actions, suits, claims, labor disputes or grievances pending or, to the Knowledge of the Company,
threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Company Personnel, including
charges of unfair labor practices or discrimination complaints. Neither the Company nor any of its Subsidiaries has engaged in
any unfair labor practices within the meaning of the National Labor Relations Act or other applicable similar Laws. The Company
and each of its Subsidiaries presently is not, nor has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Company Personnel, and no collective bargaining agreement is being negotiated by the
Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries are or have been a party to any redundancy
agreements (including social plans or job protection plans). The employment of all Employees is “at will”.

 

    	34

    	 

    

 

(j)          No
Interference or Conflict. To the Knowledge of the Company, no Company Personnel is obligated under any contract or agreement
or subject to any judgment, decree or order of any court or administrative agency that would interfere with such person’s
efforts to promote the interests of the Company or any of its Subsidiaries, or that would, in the case of any Employee, officer
or consultant, interfere with the Company’s or any of its Subsidiaries’ businesses as presently conducted, or that
would, in the case of any director, interfere in the discharge of such director’s fiduciary duties. Neither the execution
nor delivery of this Agreement, nor the carrying on of the Company’s or any of its Subsidiaries’ businesses as presently
conducted, nor any activity of such Company Personnel in connection with the carrying on of the Company’s or any of its Subsidiaries’
businesses as presently conducted, will, to the Knowledge of the Company, conflict with or result in a breach of the terms, conditions
or provisions of, or constitute a default under, any contract or agreement under which any of such Company Personnel is now bound.

 

(k)          Certain
Compensation Arrangements. The Company and each of its Subsidiaries have paid in full all wages, salary, severance payments,
termination payments, bonuses or other compensation payable to any Company Personnel, except to the extent accrued in full on the
Current Balance Sheet with respect to current Employees of the Company and its Subsidiaries in material compliance with Law.

 

2.24       Insurance
and Bonds. Section 2.24 of the Schedule of Exceptions lists all insurance policies and bonds (whether denominated as bid,
litigation, performance, fidelity, AD&D, or otherwise) covering the assets, business, equipment, properties, operations, employees,
officers and directors (in their respective capacities as such) of the Company, its Subsidiaries or any Affiliate. The Company
believes that such insurance policies and bonds are upon terms that are reasonable and adequate for and are of the type and in
amounts customarily carried by persons with businesses, operations, properties and locales similar to those of Company and its
Subsidiaries. There is no claim by the Company or any of its Subsidiaries or Affiliates pending under any of such policies or bonds.
All potentially insurable claims have been properly tendered to the appropriate insurance carrier in compliance with any applicable
insurance policy notice provisions. All premiums due and payable under all such policies and bonds have been paid, and the Company
and its Subsidiaries and Affiliates are otherwise in material compliance with the terms of such policies and bonds (or other policies
and bonds providing substantially similar insurance coverage). All such insurance policies are valid and binding in accordance
with their terms, except to the extent such enforceability may be limited by the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar Law affecting creditors’ rights generally and general principles of equity or public policy
(regardless of whether such enforceability is considered in a proceeding in equity or at law), and are in full force and effect.
To the Knowledge of the Company, there is no threat of termination of, or premium increase with respect to, any of such policies.
The bonds listed in such Schedule 2.24 of the Schedule of Exceptions satisfy all requirements for such bonds set forth in
(A) any Law applicable to the Company or any of its Subsidiaries or its respective businesses and (B) any Contract of
the Company or any of its Subsidiaries.

 

    	35

    	 

    

 

2.25       Compliance
with Laws. The Company and each of its Subsidiaries has complied in all material respects with, is not in violation of, and
has not received any notices of violation with respect to, foreign, federal, state or local Laws. Each of the Company Products
does and has complied in all material respects with all applicable Laws of each jurisdiction in which such Company Product is or
has been sold directly or indirectly by or on behalf of the Company or any of its Subsidiaries. Without limiting the foregoing,
India Subsidiary has complied with and is in compliance in all material respects of all regulations pertaining to customs and central
excise, and its registration under the Software Technology Parks of India (“STPI”) scheme is valid and subsisting.
India Subsidiary has maintained all records and filed timely and accurate returns, and otherwise complied in all material respects
with all of the rules and regulations prescribed by the STPI authorities. India Subsidiary has also complied with and is in compliance
of the (Indian) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder.

 

2.26       Foreign
Corrupt Practices Act. Neither the Company nor any of its Subsidiaries (including any of their respective officers or directors)
has taken or failed to take any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, or any rules or regulations thereunder. Neither the Company nor any of its Subsidiaries or, to the Knowledge of the Company,
any third party acting on behalf of the Company or any of its Subsidiaries, has offered, paid, promised to pay, or authorized,
or will offer, pay, promise to pay, or authorize, directly or indirectly, the giving of money or anything of value to any Official,
or to any other person while knowing or being aware of a high probability that all or a portion of such money or thing of value
will be offered, given or promised, directly or indirectly, to any Official, for the purpose of: (i) influencing any act or decision
of such Official in his, her or its official capacity, including a decision to fail to perform his, her or its official duties
or functions; or (ii) inducing such Official to use his, her or its influence with any Governmental Entity to affect or influence
any act or decision of such Governmental Entity, or to obtain an improper advantage in order to assist the Company, any of its
Subsidiaries or any third party in obtaining or retaining business for or with, or directing business to, Company or any of its
Subsidiaries. For purposes of this Agreement, an “Official” shall include any appointed or elected official,
any government employee, any political party, party official, or candidate for political office, or any officer, director or employee
of any Governmental Entity.

 

2.27       Warranties;
Indemnities. Except for (i) warranties implied by Law, (ii) industry standard indemnity provisions contained in Contracts entered
into by the Company or its Subsidiaries in the ordinary course of business (e.g., with respect to intellectual property infringement,
product defects, and breach of agreement terms/conditions) or (iii) warranties or indemnities set forth in Section 2.27 of the
Schedule of Exceptions, neither the Company nor any of its Subsidiaries has given any warranties or indemnities relating to products
or technology sold or services rendered by the Company or its Subsidiaries.

 

2.28       Complete
Copies of Materials. The Company has delivered or made available true and complete copies of each document that is referenced
in the Schedule of Exceptions or any schedule to this Agreement.

 

2.29       Stockholder
Loans. Neither the Company nor any of its Subsidiaries has loaned any money to any of their respective Company Personnel or
Stockholders, and none of such persons is indebted to the Company or any of its Subsidiaries for any amount.

 

    	36

    	 

    

 

2.30         Suppliers
and Customers. Section 2.30 of the Schedule of Exceptions sets forth the names of customers of the Company or its Subsidiaries
with fifty (50) or more end users (the “Material Customers”). Since December 31, 2012, no party to a Carrier
Agreement, no Material Customer who qualified as such as of December 31, 2012 and no licensor, vendor or supplier of the Company
or any of its Subsidiaries has cancelled its relationship with the Company or any of its Subsidiaries, and (i) no such person has
communicated (orally or in writing) to the officers, directors or other senior managers of the Company or any of its Subsidiaries
any intention to do so, and (ii) to the Knowledge of the Company (without any duty of inquiry) the Company has received no written
notice that the consummation of the transactions contemplated hereby will result in the termination of any such relationships.

 

2.31         Privacy.
The Company has delivered, or made available, to CS correct and complete copies of all current written policies maintained by the
Company or any of its Subsidiaries with respect to privacy and personal data protection relating to their respective employees,
customers, suppliers, service providers or any other third parties from or about whom the Company or any of its Subsidiaries has
obtained personal data (“Company Privacy Policies”). The Company and each of its Subsidiaries has complied in
all material respects with, is not in material violation of, and has not received any notices of violation with respect to, any
applicable Laws, contracts, Company Privacy Policies or any other commitments, obligations or representations, concerning privacy
and personal data protection relating to their employees, customers, suppliers, service providers or any other third parties from
or about whom the Company or any of its Subsidiaries has obtained personal data (“Company Privacy Obligations”).
The Company and its Subsidiaries have full right and authority to transfer to CS all personal data in the possession of the Company
or any of its Subsidiaries, including, without limitation, any such data relating to users of www.Xora.com. Except as set forth
in Section 2.31 of the Schedule of Exceptions, the consummation of the transactions contemplated by this Agreement will not violate
any Company Privacy Obligation, nor require the Company or any of its Subsidiaries to provide any notice to, or seek any consent
from, any employee, customer, supplier, service provider or other third party under any Company Privacy Policy. No Company Privacy
Obligations will impose any restrictions upon CS’s ability to use, possess, disclose or transfer such personal data in the
manner the Company and its Subsidiaries have used, possessed, disclosed or transferred such or similar personal data prior to Closing.
Neither the Company nor any of its Subsidiaries has any notice of any claims or alleged claims that the Company or any of its Subsidiaries
have violated Privacy Obligations and, to the Knowledge of the Company, no governmental agency is investigating to determine whether
the Company or any of its Subsidiaries has violated any Privacy Obligations.

 

2.32         Compliance
with the Immigration Reform and Control Act. The Company and each of its Subsidiaries is in compliance in all material respects
with and have not violated the terms and provisions of applicable Laws relating to immigration, including the Immigration Reform
and Control Act of 1986, and all related regulations promulgated thereunder (collectively, the “Immigration Laws”).
Neither the Company nor any of its Subsidiaries has been the subject of any inspection or investigation relating to its compliance
with or violation of the Immigration Laws. With respect to any employee of the Company or any of its Subsidiaries for whom compliance
with the Immigration Laws is required, the Company and each of its Subsidiaries will deliver to CS, promptly after the date of
this Agreement, such employee’s Form I-9 (Employment Eligibility Verification Form) and all other records, documents
or other papers which are retained with the Form I-9 by the Company and its Subsidiaries pursuant to the Immigration Laws.

 

    	37

    	 

    

 

2.33         Bank
Accounts; Letters of Credit; Powers of Attorney. Section 2.33 of the Schedule of Exceptions lists (a) all bank accounts,
lock boxes and safe deposit boxes relating to the business and operations of the Company and its Subsidiaries (including the name
of the bank or other institution where such account or box is located and the name of each authorized signatory thereto), (b) all
outstanding letters of credit issued by financial institutions for the account of the Company or its Subsidiaries, and (c) the
name and address of each person who has a power of attorney to act on behalf of the Company or one of its Subsidiaries. The Company
has heretofore delivered or made available to CS true, correct and complete copies of each letter of credit and each power of attorney
described in Section 2.33 of the Schedule of Exceptions.

 

2.34         Data
Room. The Company has delivered to CS an electronic copy of the Data Room, which the Company represents and warrants was not
changed during the twenty-four (24) hours prior to the date of this Agreement.

 

2.35         Representations
Complete. None of the representations or warranties made by the Company (as modified by the Schedule of Exceptions) in this
Agreement, and none of the statements made in any exhibit, schedule or certificate furnished by the Company pursuant to this Agreement,
when taken as a whole, contains, or will contain at the Effective Time, any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make the statements contained herein or therein, in
the light of the circumstances under which made, not misleading. The information furnished on or in any documents mailed, delivered
or otherwise furnished to Stockholders in connection with the solicitation of their consent to this Agreement and the Merger, will
not contain, at or prior to the Effective Time, any untrue statement of a material fact and will not omit to state any material
fact necessary in order to make the statements made therein, in light of the circumstances under which made, not misleading.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF EACH SIGNING STOCKHOLDER

 

Each of the Signing Stockholders, severally and not jointly,
represents and warrants, to and for the benefit of CS, as follows:

 

3.1           Authority.
Each Signing Stockholder, if not a natural person, is a corporation/partnership duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization/formation and has all necessary corporate/partnership power and authority to
(i) conduct its business in the manner in which its business is currently being conducted; and (ii) own, lease and use
its assets in the manner in which its assets are currently owned and used. Each Signing Stockholder has the full power and authority
to execute and deliver this Agreement and each of the Transaction Documents to which it will be a party, to perform its obligations
hereunder and thereunder and to consummate the Transactions contemplated hereby and thereby. The execution and delivery by each
Signing Stockholder that is not a natural person of this Agreement and each of the Transaction Documents to which it will be a
party and the consummation by such Signing Stockholder of the Transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate/partnership action. This Agreement has been, and upon their execution, each of the Transaction
Documents to which each Signing Stockholder will be a party will have been, duly and validly executed and delivered by each Signing
Stockholder. This Agreement constitutes, and upon their execution, each of the Transaction Documents to which each Signing Stockholder
will be a party will constitute, the legal, valid and binding obligations of each Signing Stockholder, enforceable against each
Signing Stockholder in accordance with its and their respective terms.

 

    	38

    	 

    

 

3.2           No
Conflict; Required Filings and Consents. (a) The execution, delivery and performance by each Signing Stockholder of this Agreement
and each of the Transaction Documents to which each Signing Stockholder will be a party, and the consummation of the Transactions
contemplated hereby and thereby, do not and will not:

 

(1)         result
in a Conflict with or violate the articles of organization, certificate of incorporation, partnership agreement, by-laws or other
similar constituting documents of any such Signing Stockholder that is not a natural person;

 

(2)         result
in a Conflict with or violate any Law applicable to any Signing Stockholder or by which any property or asset of any Signing Stockholder
is bound or affected; or

 

(3)         result
in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under,
require any consent of any person pursuant to, give to others any right of termination, amendment, modification, acceleration or
cancellation of, allow the imposition of any fees or penalties, require the offering or making of any payment or redemption, give
rise to any increased, guaranteed, accelerated or additional rights or entitlements of any person or otherwise adversely affect
any rights of any Signing Stockholder under, or result in the creation of any Lien on any property, asset or right of any Signing
Stockholder pursuant to, any note, bond, mortgage, indenture, agreement, lease, license, permit, franchise, instrument, obligation
or other material contract to which any Signing Stockholder is a party or by which any Signing Stockholder or any of its respective
properties, assets or rights are bound or affected.

 

(ii)         No
Signing Stockholder is required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with
any Governmental Entity in connection with the execution, delivery and performance by such Signing Stockholder of this Agreement
or any of the other Transaction Documents to which it will be a party or the consummation of the transactions contemplated hereby
or thereby or in order to prevent the termination of any right, privilege, license or qualification of any Signing Stockholder.

 

3.3           Proceedings;
Orders.

 

(i)          There
is no pending proceeding, and no person has threatened to commence any action, suit, claim or proceeding, against any Signing Stockholders
that challenges, or that could be reasonably expected to have the effect of preventing, delaying, making illegal or otherwise interfering
with, any of the transactions contemplated hereby.

 

    	39

    	 

    

 

(ii)         None
of the Signing Stockholders are subject to any Order, and no Order has been threatened against any Signing Stockholders, that challenges,
or that could be reasonably expected to have the effect of preventing, delaying, making illegal or otherwise interfering with,
any of the transactions.

 

3.4           Title
to Shares. As of the Closing Date, each Signing Stockholder will own, beneficially and of record, the type and number of shares
of Company Capital Stock respectively set forth opposite each Signing Stockholder’s name on Schedule 2.2(a)(i), free
and clear of any Liens.

 

3.5           Brokers.
Except as set forth on Section 2.22(b) of the Schedule of Exceptions, none of the Signing Stockholders have agreed or become obligated
to pay, or has taken any action that might result in any person claiming to be entitled to receive, any brokerage commission, finder’s
fee or similar commission or fee in connection with any of the transactions contemplated hereby.

 

ARTICLE IV

REPRESENTATIONS AND
WARRANTIES OF CS AND SUB

 

As of the date hereof CS and Sub hereby
represent and warrant to the Company and the Signing Stockholders:

 

4.1           Organization
and Standing. CS and Sub are each corporations duly organized, validly existing and in good standing under the Law of their
respective jurisdictions of incorporation. Each of CS and Sub has the corporate power to own its properties and to carry on its
business as currently being conducted. Each of CS and Sub is duly qualified or licensed to do business and in good standing as
a foreign corporation in each jurisdiction in which it conducts business, except in those jurisdictions where the failure to be
so qualified would not have an CS Material Adverse Effect. Sub has been organized solely for the purpose of consummating the transactions
contemplated herein and does not, and has never, conducted any business or other operations

 

4.2           Authority.
Each of CS and Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of CS and Sub, and no further action is required on the
part of CS or Sub to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and
delivered by CS and Sub and constitutes the valid and binding obligations of CS and Sub, enforceable against CS and Sub in accordance
with its terms, except as such enforceability may be subject to the Laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of Law governing specific performance, injunctive relief or other equitable remedies.

 

    	40

    	 

    

 

4.3           No
Conflict. The execution and delivery of this Agreement by CS and Sub does not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both),
or give rise to a Conflict under (i) any provision of the certificate of incorporation and bylaws of CS or Sub or (ii) any
Law applicable to CS or Sub or their respective properties or assets (whether tangible or intangible), except in each case where
such Conflict will not have an effect upon the ability of CS or Sub to consummate the transactions contemplated hereby.

 

4.4           Consents.
No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is
required by or with respect to CS or Sub in connection with the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, except for (a) such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings which, if not obtained or made, would not have an effect on the legality, validity or enforceability of
this Agreement, and (b) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.

 

4.5           Cash
Resources. CS and Sub have sufficient cash resources to pay the Final Purchase Price pursuant to this Agreement.

 

ARTICLE V

CONDUCT AND OTHER AGREEMENTS PRIOR TO THE EFFECTIVE TIME

 

5.1           Conduct
of Business of the Company and its Subsidiaries. During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, the Company agrees to operate the business of the Company and
each of its Subsidiaries in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, except
as expressly contemplated by this Agreement or otherwise consented to by CS in writing. The Company further agrees to pay the debts
and Taxes of the Company and each of its Subsidiaries when due, to pay or perform all other obligations when due (including, without
limitation, pay accounts payable without extension). The Company further agrees to use commercially reasonable efforts to preserve
intact the Company’s and its Subsidiaries’ present business organizations, to preserve the Company’s and its
Subsidiaries’ cash in accordance with past practice, to collect all receivables in the ordinary course without acceleration,
keep available the services of the Company’s and its Subsidiaries’ present officers and employees (other than termination
for cause following notice to and consultation with CS) and to preserve the Company’s and its Subsidiaries’ relationships
with customers, suppliers, distributors, licensors, licensees and others having business dealings with it. The Company shall promptly
notify CS of any event or occurrence or emergency not in the ordinary course of business of the Company or any of its Subsidiaries
and any material event involving the Company or any of its Subsidiaries. In addition, without limiting the generality of the foregoing,
except as expressly contemplated by this Agreement or as expressly set forth in Section 5.1 of the Schedule of Exceptions,
neither the Company nor any of its Subsidiaries shall, without the prior written consent of CS:

 

(a)          make
any expenditures or enter into any commitment or transaction not in the ordinary course of business consistent with past practice
that exceeds $15,000 individually or $50,000 in the aggregate or make any commitment or enter into any transaction
of the type described in Section 2.9 hereof, other than (i) bonuses or “management carve out” payments
to Carve-Out Participants in connection with the transactions contemplated by this Agreement and (ii) Third-Party Expenses;

 

    	41

    	 

    

 

(b)          (i)
sell, license (other than non-exclusive end user licenses of object code in the ordinary course of business consistent with past
practice and on terms and conditions substantially similar to the Company’s standard terms and conditions) or otherwise assign
or convey to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to any
of the foregoing with any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with
respect to the Intellectual Property of any person or entity other than generally available commercial software for word processing
or corporate administrative purposes priced at under $500 per copy, (iii) enter into any agreement with respect to the development
of any Intellectual Property with a third party, or (iv) materially change pricing or royalties charged by the Company to its customers
or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company or any
of its Subsidiaries;

 

(c)          enter
into or materially amend any Carrier Agreement or any other Contract pursuant to which any other party is granted marketing, distribution,
development or similar rights of any type or scope with respect to any products, technology or services of the Company or any of
its Subsidiaries or enter into any other Contract that would have been required to have been disclosed on Section 2.14
of the Schedule of Exceptions had such Contract been entered into prior to the date hereof;

 

(d)          amend
or otherwise modify (or agree to do so), except as required by Law, or violate the terms of, any Contract required to be set forth
or described in the Schedule of Exceptions (or that would have been required to be set forth or described in the Schedule of Exceptions
if it had existed prior to the date hereof);

 

(e)          commence
or settle any litigation;

 

(f)          declare,
set aside, or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any Company
Capital Stock other than a dividend of Company Cash immediately prior to the Closing to the extent required by CS in lieu of a
positive adjustment to the Initial Purchase Price under Section 1.6 hereof (the “Pre-Closing Dividend”);

 

(g)          split,
combine or reclassify any Company Capital Stock or issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly,
any shares of Company Capital Stock (or options, warrants or other rights exercisable therefor) except in accordance with the agreements
evidencing Company Options, Company Warrants and Company Restricted Stock outstanding as of the date of this Agreement;

 

    	42

    	 

    

 

(h)          issue,
grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of capital stock of the Company or any of its Subsidiaries or any securities convertible into such shares, or subscriptions,
rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue or purchase
any such shares or other convertible securities, other than (i) issuances of Company Capital Stock pursuant to exercises of Company
Options and Company Warrants currently outstanding, and (ii) the repurchase by the Company of shares of Company Restricted Stock
upon the termination of employment or other relationship triggering a right of repurchase by the Company or of forfeiture pursuant
to the agreement relating to such Company Restricted Stock;

 

(i)          cause
or permit any amendments to any Company Charter Documents or Subsidiary Charter Documents;

 

(j)          acquire
or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner,
any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire
or agree to acquire any assets other than in the ordinary course of business consistent with past practice;

 

(k)          sell,
lease, license or otherwise dispose of any of its properties or assets, including the sale of any accounts receivable of the Company
or any of its Subsidiaries, other than the sale or license of Company Products in the ordinary course of business consistent with
past practice;

 

(l)          incur
any Indebtedness, other than trade payables and other current Liabilities (normal in type and amount) incurred in the ordinary
course of business consistent with past practice, or guarantee any Indebtedness or issue or sell any debt securities or guarantee
any debt securities of others;

 

(m)          grant
any loans to others or purchase debt securities of others or amend the terms of any outstanding loan agreement;

 

(n)          grant
any severance or termination pay (in cash or otherwise) to any Company Personnel, including any officer, except pursuant to a contract
or agreement disclosed in Section 2.14 of the Schedule of Exceptions and identified as a severance agreement;

 

(o)          adopt,
amend (except amendments required by applicable law) or modify any Company Employee Plan (including any underlying agreements),
enter into, amend or modify any Employee Agreement or equity award agreement (except amendments or modifications required by applicable
law), pay or agree to pay any bonus or special remuneration (including payment of Taxes or Tax gross up) to any Company Personnel
or other service provider (except pursuant to an agreement entered into prior to the date of this Agreement), or increase the salaries,
wage rates, or other compensation of Company Personnel (except as required by Law);

 

(p)          except
as required by GAAP, revalue any of its assets (whether tangible or intangible), including writing down the value of inventory
or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice;

 

    	43

    	 

    

 

(q)          pay,
discharge or satisfy, in an amount in excess of $5,000 in any one case, or $25,000 in the aggregate, any claim, Indebtedness
or other Liability, other than in the ordinary course of business consistent with past practice;

 

(r)          make
or change any written election in respect of Taxes, amend any Return, adopt or change any accounting method which would materially
alter the historic treatment of a material item on a Return, enter into any closing agreement, or settle 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;

 

(s)          enter
into any licensing (other than non-exclusive end user licenses in the ordinary course of business consistent with past practice
and on the Company’s standard terms and conditions), distribution, joint venture, strategic alliance or joint marketing or
any similar arrangement or agreement;

 

(t)          hire
or terminate any Company Personnel (other than the termination of any Company Personnel for cause after written notice to and consultation
with CS), or encourage any Company Personnel to resign from the Company or any of its Subsidiaries; or

 

(u)          take,
or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through 5.1(u) hereof,
or any other action that would (i) prevent the Company or any of its Subsidiaries from performing, or cause the Company or
any of its Subsidiaries not to perform, its covenants hereunder or (ii) cause or result in any of its representations and
warranties contained herein being untrue or incorrect in any material respect.

 

5.2         No
Solicitation. Until the earlier of (a) the Effective Time or (b) the date of termination of this Agreement pursuant
to the provisions of Section 8.1 hereof, the Company and the Signing Stockholders shall not, nor shall the Company or Signing
Stockholders permit, encourage, authorize or direct, as applicable, any of its or their officers, directors, employees, agents,
representatives or affiliates (any of such persons a “Representative”) (or knowingly encourage, authorize or
direct any of its Stockholders who are not a Representative), to, directly or indirectly, take any of the following actions with
any party other than CS and its designees (“Acquisition Activities”): (i) solicit, encourage, initiate or participate
in any inquiry, negotiations or discussions, or enter into any agreement, in each case with respect to any offer or proposal to
acquire or license all, substantially all, or a significant portion of the Company’s or its Subsidiaries’ businesses,
technologies or properties, or any amount of Company Capital Stock (whether or not outstanding), whether by merger, purchase of
assets, equity purchase (including convertible securities), license, tender offer or otherwise (including any option or right with
respect to any of the foregoing), or enter into any agreement providing for, or effect any such transaction; (ii) disclose
any information not customarily disclosed in the ordinary course of business to any person concerning the Company’s or any
of its Subsidiaries’ businesses, technologies or properties, or afford to any person or entity access to its properties,
technologies, books or records or other information, not customarily afforded such access; (iii) assist or cooperate with
any person to make any proposal to (x) purchase all or any part of the Company Capital Stock or all or substantially all of the
assets of the Company or any of its Subsidiaries or (y) license all or any material portion of the Company’s or its Subsidiaries’
assets; or (iv) enter into any agreement or arrangement with any person providing for the acquisition of the Company or any
of its Subsidiaries, whether by merger, purchase of all or substantially all of the assets, license, tender offer or otherwise.
In the event that the Company or any of its Subsidiaries or Affiliates or a Signing Stockholder shall receive or become aware of,
prior to the Effective Time or the termination of this Agreement in accordance with Section 8.1 hereof, any offer, proposal,
or request, directly or indirectly, of the type referenced in clause (i), (iii) or (iv) above, or any request for disclosure
or access as referenced in clause (ii) above, the Company and the Signing Stockholders shall immediately (A) suspend any discussions
with such offeror or party with regard to such offers, proposals or requests (including any of the foregoing undertaken by Representatives)
and (B) notify CS thereof, including information as to the identity of the offeror or the party making any such offer or proposal
and the specific terms of such offer or proposal, as the case may be, and such other information related thereto as CS may reasonably
request. Any breach of this Section 5.2 by any Subsidiary or Representative shall be deemed to be a breach of this Section 5.2
by the Company or the relevant Signing Stockholder. The parties hereto agree that irreparable damage would occur in the event that
the provisions of this Section 5.2 were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed by the parties hereto that CS shall be entitled to seek an injunction or injunctions to prevent breaches of
the provisions of this Section 5.2 and to enforce specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to which CS may be entitled at law or in equity.

 

    	44

    	 

    

 

5.3         Stockholder
Notice.

 

(a)          As
soon as practical following the execution of this Agreement, the Company will use commercially reasonable efforts to deliver to
CS the duly and validly executed Stockholder Written Consents constituting approval and adoption by the Requisite Stockholder Vote
of (i) this Agreement, the Merger and the transactions contemplated by this Agreement, (ii) the escrow and indemnification
obligations of the Indemnifying Parties set forth in Article VII hereof and the Escrow Agreement and the deposit of
cash equal to the Indemnity Escrow Amount and the Net Working Capital Adjustment Escrow Amount into the applicable Escrow Fund,
and (iii) the appointment of Ned Carlson, as the Stockholder Representative (the “Stockholder Approval”).

 

(b)          As
soon as practical following the execution of this Agreement:

 

(i)          deliver
notice to its Stockholders of the Stockholder Approval and the availability of appraisal rights, pursuant to and in accordance
with the applicable provisions of Delaware Law and the Company Charter Documents (the “Stockholder Notice”);

 

(ii)         solicit
the Stockholders who have not already executed Stockholder Written Consents to waive their appraisal rights and approve the matters
set forth in Section 5.3(a) hereof; and

 

    	45

    	 

    

 

(iii)        submit
to the Stockholders for approval (in a manner reasonably satisfactory to CS), by such number of Stockholders as is required by
the terms of Section 280G(b)(5)(B) of the Code, any payments and/or benefits that may separately or in the aggregate, constitute
Section 280G Payments (which determination shall be made by the Company and shall be subject to reasonable review and approval
by CS), such that such payments and benefits shall not be deemed to be Section 280G Payments, and, if applicable, prior to the
Effective Time, the Company shall deliver to CS evidence reasonably satisfactory to CS that (A) a Stockholder vote was solicited
in conformance with Section 280G and the regulations promulgated thereunder and the requisite Stockholder approval was obtained
with respect to any Section 280G Payments that were subject to the Stockholder vote, or (B) that the 280G Stockholder approval
was not obtained and, as a consequence, that such payments and/or benefits shall not be made or provided to the extent they would
cause any amounts to constitute Section 280G Payments, pursuant to the waivers of those payments and/or benefits, which were executed
by the affected individuals prior to the Stockholder vote.

 

(c)        Notwithstanding
the foregoing and subject to Section 5.1, Section 5.8 and Section 5.11 hereof, the Company
shall use commercially reasonable efforts following the delivery of materials contemplated by Section 5.3(b)(i) hereof
to ensure that no Stockholder will be able to exercise appraisal or similar rights if such Stockholder has not perfected such rights
prior to Closing.

 

(d)        The
Company shall promptly provide such notice to the holders of Company Options as reasonably required by the terms of the Plan in
connection with the Merger and to the holders of Company Warrants, including, without limitation, any such notice as may be required
to cause each Company Option and Company Warrant to terminate, to the extent not exercised, as of the Effective Time.

 

(e)        Each
of the Stockholder Notice, any materials to be submitted to the Stockholders in connection with the solicitation of their approval
of any Section 280G Payment or any of the other matters set forth in Section 5.3(b) hereof and any of the materials to be
submitted to the holders of Company Options pursuant to Section 5.3(d) hereof (collectively, the “Soliciting Materials”)
shall be pursuant to and in accordance with all applicable provisions of Delaware Law, the Company Charter Documents and the terms
of the Plan, as appropriate. The Soliciting Materials shall be subject to prior review and approval by CS, which approval shall
not be unreasonably withheld. Soliciting Materials sent to Stockholders shall include, without limitation, (i) information
regarding the Company, the terms of this Agreement, the Merger, the transactions contemplated by this Agreement and any Section 280G
Payment, (ii) the recommendation of the Board of Directors of the Company in favor of this Agreement, the Merger, the transactions
contemplated by this Agreement and any Section 280G Payment, (iii) a statement to the effect that this Agreement, the
Merger and the transactions contemplated by this Agreement have been adopted and approved by the Requisite Stockholder Vote under
Delaware Law and the Company Charter Documents, (iv) notice in accordance with Section 262 of Delaware Law that the recipient
may be entitled to appraisal rights, (v) a copy of this Agreement, and (vi) a copy of Section 262 of Delaware Law.
Anything to the contrary contained herein notwithstanding, the Company shall not include in the Soliciting Materials any information
with respect to CS or its affiliates or associates, the form and content of which shall not have been consented to in writing by
CS prior to such inclusion.

 

(f)          The
Board of Directors of the Company shall not revoke or modify its approval of this Agreement, the Merger, the transactions contemplated
by this Agreement and any Section 280G Payment, including its recommendation in favor of this Agreement, the Merger, the transactions
contemplated by this Agreement and any Section 280G Payment, in each case except for such actions that counsel has advised
may violate the fiduciary duties of the Board of Directors.

 

    	46

    	 

    

 

5.4         Access
to Information. The Company shall afford CS and its accountants, counsel and other representatives, reasonable access during
the period from the date hereof and prior to the Effective Time to (i) all of the Company’s and its Subsidiaries’
properties, books, contracts, commitments and records, including the Company’s and its Subsidiaries’ source code, (ii)
other information concerning the business, properties and personnel (subject to restrictions imposed by applicable Law) of the
Company and its Subsidiaries as CS may reasonably request, and (iii) all Company Personnel identified by CS. The Company agrees
to make available to CS and its accountants, counsel and other representatives copies of internal financial statements (including
Returns and supporting documentation) promptly upon request. No information or knowledge obtained in any investigation pursuant
to this Section 5.4 shall affect or be deemed to modify any representation or warranty contained herein or the conditions
to the obligations of the parties to consummate the Merger in accordance with the terms and provisions hereof.

 

5.5         Confidentiality.
Each of the parties hereto will (and will instruct each of their respective Representatives to) treat and hold as confidential
all exhibits and schedules hereto, and any information obtained in any investigation pursuant to Section 5.4 hereof, or pursuant
to the negotiation and execution of this Agreement or the effectuation of the transactions contemplated hereby (“Confidential
Information”), refrain from disclosing any of the Confidential Information except to Representatives in connection with
this Agreement, and, in the event of the termination of this Agreement, deliver promptly to disclosing party or destroy, at the
written request and option of disclosing party, all tangible embodiments (and all copies) of the Confidential Information which
are in its or its Representative’s possession; provided, however, that (a) the term “Confidential Information”
does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure in
violation of this Section 5.5, (ii) becomes available to the receiving party from a source who is not known to the receiving
party to be prohibited from disclosing such information pursuant to a legal binding obligation, or (iii) has been or becomes independently
developed or derived by the receiving party and (b) the receiving party may retain any Confidential Information (i) such party
reasonably believes is necessary to comply with legal, regulatory or data protection requirements or (ii) which is contained
in an archived computer backup system in accordance with such party’s security and/or disaster recovery procedures. In the
event that any receiving party is requested or required to disclose any Confidential Information (by oral question or request for
information or documents pursuant to any law, regulation, securities or exchange rule or otherwise in connection with any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar process), such receiving party will notify the disclosing
party promptly of the request or requirement so that the disclosing party may seek an appropriate protective order or waive compliance
with the provisions of this Section 5.5. If, in the absence of a protective order or the receipt of a waiver hereunder, any receiving
party (or Representative thereof) is, on the advice of counsel, required to disclose any Confidential Information to any Governmental
Entity, such receiving party (or any Representative thereof) may disclose the Confidential Information to such person; provided,
however, that such receiving party (or any Representative thereof) shall use his, her or its commercially reasonable efforts to
obtain, at the reasonable request and sole expense of the disclosing party, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be disclosed as disclosing party shall reasonably
designate. In no event shall CS or the Company be restricted from using or disclosing any Confidential Information of the Company
or its Subsidiaries after the Closing.

 

    	47

    	 

    

 

5.6           Expenses.
Whether or not the Merger is consummated, all fees and expenses incurred in connection with the Merger, including all legal, accounting,
investment banking, financial advisory, consulting and all other fees and expenses of third parties (“Third-Party Expenses”)
incurred by a party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the transactions
contemplated hereby, shall be the obligation of the respective party incurring such fees and expenses; provided, however, that
any Third-Party Expenses incurred by the Company and its Subsidiaries and not paid by it prior to Closing or deducted as Closing
Debt from the Initial Purchase Price as contemplated by Section 1.6 above may, at the discretion of CS, be paid out of the Escrow
Fund and, if so paid, shall be deemed authorized by the Stockholder Representative for purposes of Article VII.

 

5.7           Public
Disclosure. Neither the Company nor any of its Subsidiaries shall issue, nor shall any such party permit, as applicable, any
of its Representatives to issue, any statement or communication to any third party (other than to its respective agents) regarding
the subject matter of this Agreement or the transactions contemplated hereby, including, if applicable, the termination of this
Agreement and the reasons therefor, without the prior written consent of CS. Neither CS nor Sub shall issue, nor shall either such
party permit, as applicable, any of its Representatives to issue, any statement or communication to any third party (other than
to its respective agents) regarding the subject matter of this Agreement or the transactions contemplated hereby, including, if
applicable, the termination of this Agreement and the reasons therefor, without the prior written consent of the Company except
as may be required by applicable Law or pursuant to the rules of any stock exchange; provided that CS shall be entitled to issue
any press release upon the signing of this Agreement, after giving the Company a period of at least two (2) Business Days to review
and request changes to such press release (which period may be given prior to the date hereof), and after the Closing, and, to
the extent that it determines necessary or advisable, file this Agreement in accordance with the rules of any stock exchange.

 

5.8           Consents.
The Company and its Subsidiaries shall use commercially reasonable efforts to obtain the consents, waivers and approvals, and to
timely provide notices of assignment, under those Contracts listed on Schedule 5.8.

 

5.9           FIRPTA
Compliance. On the Closing Date, the Company shall deliver to CS a properly executed statement (a “FIRPTA Compliance
Certificate”) in a form reasonably acceptable to CS for purposes of satisfying CS’s obligations under Treasury
Regulation Section 1.1445-2(c)(3).

 

    	48

    	 

    

 

5.10       Reasonable
Efforts. Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall use commercially
reasonable efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, to obtain all
necessary waivers, consents and approvals and to effect all necessary registrations and filings and to remove any injunctions or
other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this
Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement; provided, however, that
CS shall not be required to agree to any divestiture by CS, the Company or any of their respective Subsidiaries or Affiliates,
of any shares of capital stock or of any business, assets or property, or the imposition of any material limitation on the ability
of any of them to conduct their businesses or to own or exercise control of such assets, properties or stock.

 

5.11       Notification
of Certain Matters. Each party hereto shall give prompt notice to the other party hereto (either to CS or to the Company, as
appropriate) of the occurrence or non-occurrence of any event which has caused any representation or warranty of such party contained
in this Agreement to be materially untrue or inaccurate at or prior to the Effective Time; provided, however, that the delivery
of any notice pursuant to this Section 5.11 shall not (i) limit or otherwise affect any remedies available to the party
receiving such notice or (ii) constitute an acknowledgment or admission of a breach of this Agreement. No disclosure pursuant
to this Section 5.11, however, shall be deemed to amend or supplement the Schedule of Exceptions or prevent or cure any misrepresentations,
breach of warranty or breach of covenant.

 

5.12       Additional
Documents and Further Assurances. Each party hereto, at the request of another party hereto, shall execute and deliver such
other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation
of the Merger and the transactions contemplated hereby.

 

5.13       Company
Options and Warrants. The Company shall cause all unexercised Company Options and Company Warrants to be terminated at or immediately
prior to the Effective Time.

 

5.14       Information
Technology Security. Prior to the Closing, the Company will promptly notify CS of any security incident relating to its IT
Systems, including without limitation, any incidents involving loss or potential loss of Intellectual Property or personally identifiable
information. The Company shall cooperate and work with CS to (i) mitigate any identified network, operating system, and application
security vulnerabilities, (ii) apply and validate security patches, (iii) deploy and validate security tools, and (iv) migrate
non-supported versions of operating systems to supported versions with patches.

 

5.15       Resignation
of Officers and Directors; Subsidiary Matters.

 

(a)          The
Company shall obtain the resignations of all officers and directors of the Company and each of its Subsidiaries effective as of
the Effective Time.

 

(b)          The
Company shall, and shall cause the India Subsidiary to take all actions contemplated by Section 6.2(f)(ii).

 

    	49

    	 

    

 

5.16       Supplying
Financial Statements. Within twenty (20) days following the end of each month prior to the Closing, the Company shall
deliver to CS, certified by the Company and executed on its behalf by an executive officer of the Company, true and complete copies
of an unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of each calendar month,
quarter or year (as applicable) ending subsequent to the date hereof and prior to the Closing Date, the related statements of income,
operations, cash flows and stockholders’ equity for each such period then ended, and a reasonably detailed calculation of
Company Cash, Closing Debt, Indebtedness, and Net Working Capital, based upon the respective balance sheet (and not, for such purposes,
as of the close of business on the Closing Date). All of such balance sheets, statements and calculations shall have been prepared
in accordance with GAAP on a basis consistent with past practice (except that such financial statements will not have notes thereto
and shall be subject to normal year-end adjustments in accordance with GAAP and past practice).

 

5.17       Destruction
of Confidential Information. No later than ten (10) Business Days after the date hereof, the Company shall distribute
a written notice to all third parties who received confidential information from Oppenheimer & Co. Inc. relating to the Company
and its Subsidiaries in connection with discussions about any potential Acquisition Activity to: (i)  in accordance with the
terms of the non-disclosure agreements executed by such third parties, return or destroy the Company’s confidential information
furnished to such third parties; and (ii) confirm in writing that all such confidential information has been either returned
or destroyed; provided, however, that the Company shall not be responsible for the return of any such materials or confirmations.

 

5.18       Tax
Matters.

 

(a)          The
Company and its Subsidiaries shall prepare or cause to be prepared, and file or cause to be filed, all Returns for the Company
and its Subsidiaries that are due (giving effect to any permitted extensions) on or before the Closing Date. CS and the Surviving
Corporation shall prepare or cause to be prepared, and file or cause to be filed, all Returns for the Company and its Subsidiaries
that are due (giving effect to any permitted extensions) after the Closing Date. Such Returns with respect to a Pre-Closing Tax
Period shall be prepared by treating items on such Returns in a manner consistent with the past practices of the Company with respect
to such items, except as required by applicable Law. CS shall permit the Stockholder Representative to review and comment on each
such Return at least thirty (30) days prior to filing and shall make such revisions to such Returns as are reasonably requested
by the Representative.

 

(b)          all
Taxes of the Company and its Subsidiaries that relate to any Straddle Period shall be apportioned between the Signing Stockholders
and CS as follows: (i) in the case of Taxes other than income, sales and use and withholding Taxes, on a per diem basis, and (ii)
in the case of income, sales and use and withholding Taxes, as determined from the books and records of the Company and its Subsidiaries
as though the taxable year of the Company and its Subsidiaries terminated at the close of business on the Closing Date.

 

(c)          CS,
the Surviving Corporation, each Company Subsidiary and the Stockholder Representative (on behalf of the Stockholders) will provide
each other with such assistance as may reasonably be requested by any of them in connection with the preparation or review of any
Return, any audit or other examination by any Tax authority, or any judicial or administrative proceedings relating to Liability
for Taxes. Such assistance shall include making employees available on a mutually convenient basis to provide additional information
and explanation of any material provided hereunder and shall include providing copies of any relevant Returns and supporting work
schedules, which assistance shall be provided without charge except for reimbursement of reasonable out-of-pocket expenses.

 

    	50

    	 

    

 

(d)          CS
shall not amend, refile, revoke or otherwise modify any Return or Tax election of the Company with respect to a Pre-Closing Tax
Period without the prior written consent of the Stockholder Representative, which consent shall not be unreasonably withheld.

 

(e)          CS
shall promptly notify the Stockholder Representative upon receipt by CS or any Affiliate of CS (including the Company after the
Closing Date) of written notice of any inquiries, claims, assessments, audits or similar events with respect to Taxes relating
to Pre-Closing Tax Period for which any of the Indemnifying Parties may be liable under this Agreement (any such inquiry, claim,
assessment, audit or similar event, a “Tax Matter”). Following the Closing, CS shall control the conduct of
any such Tax Matter; provided, however, CS shall not enter into any settlement of or otherwise compromise any Tax Matter that may
increase the Tax Liability of the Indemnifying Parties or that would give rise to an indemnification claim pursuant to this Agreement
without the consent of the Stockholder Representative, which consent shall not be unreasonably withheld or delayed. CS shall keep
the Stockholder Representative fully and timely informed with respect to the commencement, status and nature of any Tax Matter.
CS shall, in good faith, allow the Stockholder Representative to make comments to CS regarding the conduct of or positions taken
in any such proceeding.

 

ARTICLE VI

CONDITIONS TO THE MERGER

 

6.1         Conditions
to the Obligations of Each Party to Effect the Merger. The respective obligations of the Company, CS and Sub to effect the
Merger shall be subject to the satisfaction, at or prior to the Closing, of the following conditions:

 

(a)          No
Order. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect
of making the Merger illegal or otherwise prohibiting the consummation of the Merger.

 

(b)          No
Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition (i) preventing the consummation of the Merger, (ii)
prohibiting CS’s ownership or operation of any portion of the business of the Company or any of its Subsidiaries, or (iii) compelling
CS or the Company to dispose of or hold separate all or any material portion of the business or assets of CS, the Company or any
of their respective Subsidiaries or Affiliates as a result of the Merger, shall be in effect, nor shall any proceeding brought
by an administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any
of the foregoing be threatened or pending.

 

    	51

    	 

    

 

(c)          Stockholder
Approval. The Stockholder Approval shall have been obtained such that the Stockholders shall have validly adopted and approved
this Agreement, the Merger, the transactions contemplated hereby and thereby, including the appointment of the Stockholder Representative,
the deposit of cash into the Escrow Fund, the indemnification provisions set forth herein and the escrow provisions set forth in
the Escrow Agreement.

 

(d)          Escrow
Agreement. The Escrow Agent shall have executed and delivered to CS the Escrow Agreement substantially in the form attached
hereto as Exhibit B, or another mutually-agreeable escrow arrangement shall have been established by the parties.

 

(e)          Foreign
Filings. All foreign anti-trust and other required filings will be completed and approvals received.

 

6.2         Additional
Conditions to the Obligations of CS and Sub. The obligation of CS and Sub to effect the Merger also shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively
by CS and Sub:

 

(a)          Representations,
Warranties and Covenants. (i) Each representation and warranty of the Company and the Signing Stockholders contained in
this Agreement (1) shall have been true and correct on and as of the date of this Agreement and (2) shall be true and correct in
all material respects on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date (except
for those representations and warranties which address matters only as of a particular date, which shall have been true and correct
in all material respects as of such particular date), it being understood that, for purposes of determining the accuracy of representations
and warranties on and as of the Closing Date, (x) representations and warranties qualified by “Material Adverse Effect”
shall be true and correct in all respects and (y) any update of or modification to the Schedule of Exceptions made or purported
to have been made after the date of this Agreement shall be disregarded unless agreed to in writing by CS, and (ii) the Company
shall have performed and complied in all material respects with all covenants and obligations under this Agreement required to
be performed and complied with by the Company prior to or as of the Closing.

 

(b)          Governmental
Approval. The Company shall have obtained all Governmental Entity approvals required to legally consummate the Merger and those
required so that the consummation of those transactions contemplated by this Agreement will not trigger any Conflict with any of
the items set forth in Section 2.5 hereof.

 

(c)          Litigation.
There shall be no action, suit, claim or proceeding of any nature pending, or overtly threatened, against CS or the Company, their
respective Subsidiaries or properties or any of their respective officers or directors, arising out of, or in any way connected
with, the Merger or the other transactions contemplated by the terms of this Agreement.

 

(d)          Mandatory
Third-Party Consents. The Company and its Subsidiaries shall have obtained all necessary consents to assignment, waivers and
approvals, and timely provided all notifications, with respect to the transactions contemplated by this Agreement under those Contracts
listed on Schedule 6.2(d).

 

    	52

    	 

    

 

(e)          Termination
of Agreements. The Company and its Subsidiaries shall have terminated each of those agreements listed on Schedule 6.2(e),
and each such agreement shall be of no further force or effect.

 

(f)          Resignation
of Officers and Directors; India Subsidiary.

 

(i)          CS
shall have received a written resignation from each of the officers and directors of the Company and each of its Subsidiaries effective
as of the Effective Time.

 

(ii)         On
or before the Closing Date, the board of directors of the India Subsidiary shall have been reconstituted in the following manner:

 

(A)  the
India Subsidiary shall pass a board resolution at a duly convened meeting of its board of directors to accept the appointment of
Mr. Moshe BenBassat, Mr. Shmuel Arvatz and Mr. Atul Gupta as directors on the Board of India Subsidiary;

 

(B)   complete
filings in respect of appointment of new directors as required under the applicable Law;

 

(C)   upon
the Closing, the Indian Subsidiary shall accept and formally place on record the undated resignation letters received from all
the existing directors of the Company (excluding the newly appointed directors named above); and

 

(D)   any
shares of capital stock of the Indian Subsidiary that are not held by the Company shall have been transferred to a designee of
CS.

 

(g)          Legal
Opinion. CS shall have received a legal opinion from outside legal counsel to the Company, substantially in the form attached
hereto as Exhibit D.

 

(h)          No
Material Adverse Effect. There shall not have occurred any event or condition of any character that has had or would reasonably
be expected to have a Company Material Adverse Effect.

 

(i)          Dissenting
Shares. The Company shall have delivered the Stockholder Notice in strict accordance with the applicable provisions of Delaware
Law, and Stockholders holding no more than thirteen percent (13%) of the Total Outstanding Shares shall have exercised appraisal
or similar rights under applicable Law with respect to their Company Capital Stock by virtue of the Merger.

 

(j)          Certificate
of the Company. CS shall have received a certificate, validly executed by the Chief Executive Officer of the Company for and
on its behalf, to the effect that, as of the Closing, (i) the conditions to the obligations of CS and Sub set forth in Section
6.2(a) hereof has been satisfied, and (ii) each and every one of the other conditions to the obligations of CS and Sub set
forth in this Section 6.2 have been satisfied (unless otherwise waived in accordance with the terms hereof).

 

    	53

    	 

    

 

(k)          Certificate
of Secretary of Company. CS shall have received a certificate, validly executed by the Secretary of the Company, certifying
as to (i) the terms and effectiveness of the Company Charter Documents, (ii) the valid adoption of resolutions of the
Board of Directors of the Company (whereby the Merger and the transactions contemplated by this Agreement were approved by the
Board of Directors of the Company), (iii) the Stockholder Approval by the Stockholders, and (iv) the incumbency of the executive
officers of the Company.

 

(l)          Certificate
of Good Standing. CS shall have received a long-form certificate of good standing for the Company from the Secretary of State
of the State of Delaware, dated within five (5) days prior to the Closing Date.

 

(m)          Certificate
of Legal Existence. CS shall have received a certificate of good standing or similar certificate of the Company issued by the
Secretary of the State of California dated within five (5) days prior to the Closing certifying as to the good standing of the
Company in the State of California.

 

(n)          FIRPTA
Certificate. CS shall have received the FIRPTA Compliance Certificate, validly executed by a duly authorized officer of the
Company.

 

(o)          Spreadsheet.
CS shall have received the Spreadsheet at least three (3) Business Days prior to the Closing Date, which shall have been certified
as true and correct by the Company in a certificate signed on its behalf by its Chief Executive Officer.

 

(p)          Termination
of Company Options, Warrants and Other Equity Arrangements.

 

(i)          All
Company Options and Company Warrants have been exercised or terminated, and there shall be no further obligation after the Effective
Time on the part of CS, the Surviving Corporation or any other person with respect to any such vested portion of such Company Option
or Company Warrant; and

 

(ii)         Except
as specifically provided in this Agreement, all other agreements and arrangements related to Company Capital Stock shall have been
terminated.

 

(q)        Employment
Arrangements. Ninety percent (90%) of the employees of the Company or its Subsidiaries listed on Schedule 6.2(q)
(the “Key Employees”), including in any event each of the Key Employees identified on Schedule 6.2(q)
as necessary, shall have agreed to be employees of the Surviving Corporation or the applicable Subsidiary after the Closing.

 

(r)        Certain
Employees. Carve-Out Participants shall have executed and delivered to the Company an agreement substantially in the form attached
hereto as Exhibit F, containing a release and agreement to comply with the obligations of the Indemnifying Parties hereunder,
effective upon the making of such payment, which may be done, at CS’s option, through the Surviving Corporation’s first
payroll following the Closing or a special payroll.

 

    	54

    	 

    

 

(s)          Escrow
Agreement. The Stockholder Representative shall have executed and delivered to CS the Escrow Agreement substantially in the
form attached hereto as Exhibit B, and such Escrow Agreement shall be in full force and effect.

 

(t)          Board
Approval. The board of directors of the Company shall have approved the Merger and the transactions contemplated by this Agreement.

 

(u)          Settlement
of Claims and Liabilities. Except for the matters set forth on Schedule 6.2(u) or as otherwise may be agreed between
the Company and CS, the Company and its Subsidiaries shall have fully settled and paid (i) any claims by any vendors or suppliers
to the Company and its Subsidiaries that have been asserted against the Company or its Subsidiaries in writing, or that otherwise
exist or would reasonably be expected to come into existence, and (ii) any claims by, or obligations relating to, current or prior
directors or employees of the Company or its Subsidiaries that have been asserted against the Company or its Subsidiaries in writing,
or that otherwise exist or would reasonably be expected to come into existence, and (iii) all Liabilities existing to the Knowledge
of the Company immediately prior to the Effective Time; provided, however, that the following obligations are not required to be
so settled and paid: (A) all trade payables that have associated invoices with dates no older than fifteen (15) days prior to the
Closing Date; (B) deferred revenues; (C) payroll Liabilities accrued solely in the ordinary course for the period (less than one
half month) following the most recently scheduled regular payroll payment date prior to the Closing Date; and (D) the items listed
on Schedule 2.22(b) of the Schedule of Exceptions.

 

(v)         Payoff
Letters. The Company shall have provided to CS Payoff Letters from each party that is owed Third Party Expenses or, as requested
by CS, Indebtedness in a form reasonably satisfactory to CS, together with all necessary wire transfer information for each person
to whom the Third Party Expenses or such Indebtedness are owed.

 

(w)          Pre-Closing
Dividend. The Company shall have paid the relevant Stockholders the Pre-Closing Dividend to the extent required by CS.

 

(x)          Data
Room. The Company shall have provided to CS an electronic copy of the Data Room as of the date of this Agreement pursuant to
Section 2.34, and shall have provided to CS a second electronic copy as of the Closing Date, together with all records of
access and use thereof.

 

(y)          Voting
Agreement. The Signing Stockholders shall have executed and delivered to CS the Voting Agreement.

 

(z)          Office
Lease. The Company shall have provided to CS relevant documents evidencing the facts (i) that the India Subsidiary has entered
into a new lease with a term ending approximately in April 2017, with the mandatory portion of the term ending after eighteen (18)
months, following which time the lease may be terminated upon three (3) months’ notice and (ii) that such lease has been
duly registered with the local Sub-Registrar of Assurances and that all stamp duty thereon has been paid.

 

    	55

    	 

    

 

6.3           Additional
Conditions to the Obligations of the Company and the Signing Stockholders. The obligation of the Company to effect the Merger
and of the Signing Stockholders to consummate the other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by the Company:

 

(a)          Representations
and Warranties. Each representation and warranty of CS and Sub contained in this Agreement (i) shall have been true and correct
on and as of the date of this Agreement and (ii) shall be true and correct in all material respects on and as of the Closing Date
as if made on and as of the Closing Date (except for those representations and warranties which address matters only as of a particular
date, which shall have been true and correct in all material respects as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties on and as of the Closing Date, all “Material
Adverse Effect” qualifications and other qualifications based on the word “material” or similar phrases contained
in such representations and warranties shall be disregarded).

 

(b)          Certificate
of CS. The Company shall have received a certificate, validly executed on behalf of CS by a duly authorized officer of CS to
the effect that, as of the Closing, the conditions to the obligations of the Company set forth in this Section 6.3
have been satisfied.

 

ARTICLE VII

INDEMNIFICATION AND ESCROW

 

7.1         Survival
of Representations and Warranties.

 

(a)          By
the Company and Signing Stockholders. The representations and warranties of the Company and Signing Stockholders contained
in this Agreement, or in any certificate or instrument delivered pursuant to this Agreement, shall survive for a period of twenty-four
(24) months following the Closing Date (the expiration of such twenty-four (24) month period, the “Survival Date”);
provided, however, that the representations and warranties of the Company in Section 2.1 (Organization), Section 2.2
(Company Capital Structure), Section 2.4 (Authority), and Section 2.10 (Tax Matters) (the “Special
Representations”) shall survive until the expiration of the applicable statute of limitations. If an indemnification
claim is properly asserted in writing pursuant to Section 7.3 prior to the expiration (as provided in this Section 7.1(a))
of the representation or warranty that is the basis for such claim, then such representation or warranty shall survive beyond such
survival date until, but only for the purpose of, the resolution of such claim.

 

(b)          By
CS and Sub. The representations and warranties of CS and Sub contained in this Agreement, or in any certificate or other instrument
delivered pursuant to this Agreement, shall terminate at the Closing.

 

    	56

    	 

    

 

7.2         Indemnification
by the Indemnifying Parties.

 

(a)          Incurred
Losses. Subject to the terms and conditions of this Article VII, from and after the Closing, the Series AA Stockholders
and the Carve-Out Participants (each, an “Indemnifying Party” and collectively, the “Indemnifying Parties”)
shall indemnify CS and its officers, directors and Affiliates, including the Surviving Corporation (any, an “Indemnified
Party” and collectively, the “Indemnified Parties”), for any claims, losses, Liabilities, damages,
costs, interests, awards, judgments, penalties and expenses, including reasonable attorneys’ fees and expenses of investigation
and defense (hereinafter individually a “Loss” and collectively “Losses”) paid, incurred,
accrued or sustained by such Indemnified Parties, or any of them (including the Surviving Corporation), directly or indirectly,
as a result of:

 

(i)          any
breach or inaccuracy of a representation or warranty of the Company or Signing Stockholders contained in this Agreement or in any
certificate or other instruments delivered pursuant to this Agreement, giving effect to the Schedule of Exceptions as of the date
of this Agreement (and without giving effect to any amendment or supplement);

 

(ii)         any
failure by the Company to perform or comply with any covenant or other agreement applicable to it contained in this Agreement or
in any certificate or other instruments delivered pursuant to this Agreement or any breach of a Signing Stockholder under this
Agreement or any other Transaction Document;

 

(iii)        any
Dissenting Share Payments;

 

(iv)        any
Pre-Closing Taxes (except to the extent (A) such Taxes are taken into account in the calculation of Net Working Capital, or (B)
such Taxes are incurred in connection with an election made under Section 338 of the Code (or any similar provision of state, local
or foreign Law));

 

(v)         any
Deemed Loss under Section 7.2(b) hereof; or

 

(vi)        any
Subsidiary Losses.

 

(b)          Deemed
Losses. For the purposes of this Article VII, each of the following shall also be deemed to be a Loss (“Deemed
Losses”), regardless of whether any of such matters is otherwise identified in the Schedule of Exceptions:

 

(i)          The
net amount of any error or misstatement of the Company leading to a miscalculation of the Estimated Purchase Price as contemplated
by Section 1.13 above in respect of Closing Debt, Indebtedness and Company Cash, and, with respect to claims relating
thereto, CS shall be entitled to proceed against the Net Working Capital Adjustment Escrow Fund in addition to the Indemnity Escrow
Fund; and

 

(ii)         any
of the matters specified on Schedule 7.2(b).

 

(c)          Indemnification
As Exclusive Remedy. The rights of the Indemnified Parties under this Article VII shall be the sole and exclusive
post-Closing remedies of the Indemnified Parties and their respective Affiliates with respect to claims under, or otherwise relating
to the transactions that are the subject of, this Agreement, except with respect to claims for fraud or knowing or willful breach
or claims related to the Special Representations, Dissenting Share Payments, Deemed Losses or Pre-Closing Taxes which indemnification
shall be limited as provided in Section 7.2(i). The Escrow Agreement shall be the sole and exclusive means for the Indemnified
Parties to collect any Losses for which they are entitled to indemnification under this Article VII, except with respect
to claims for fraud or knowing or willful breach or claims related to the Special Representations, Dissenting Share Payments, Deemed
Losses or Pre-Closing Taxes, for which the Escrow Fund shall be the initial source of indemnification, but not the exclusive source
of indemnification.

 

    	57

    	 

    

 

(d)          Materiality;
Knowledge; No Right of Contribution. For the purpose of quantifying an Indemnified Party’s Losses under this Article VII
only, any representation or warranty given or made by the Company that is qualified in scope as to materiality (including the Company
Material Adverse Effect) or as to Knowledge shall be deemed to be made or given without such qualification. There shall be no right
of contribution from the Surviving Corporation or CS with respect to any Loss claimed by an Indemnified Party, and any Indemnifying
Party with Liability pursuant to this Section 7.2 shall not have a right of contribution from any other Indemnifying Party
for amounts in excess of the Escrow Amount (which shall not limit the ability of CS to recover such Losses to the full extent of
the Escrow Amount).

 

(e)          Knowledge
of CS. Any due diligence review, audit or other investigation or inquiry undertaken or performed by or on behalf of CS shall
not limit, qualify, modify or amend the representations, warranties or covenants of, or indemnities by the Company or the Stockholders
made or undertaken pursuant to this Agreement, irrespective of the knowledge and information received (or which should have been
received) therefrom by CS other than as expressly reflected on the Schedule of Exceptions or the other Exhibits or Schedules to
this Agreement.

 

(f)          Treatment
of Indemnification Payments. All indemnification payments under this Agreement shall be treated as an adjustment to the Purchase
Price for all Tax purposes unless otherwise required by Law.

 

(g)          Insurance.
In the event that an insurance recovery is obtained by any Indemnified Party with respect to any Loss for which any such Indemnified
Party is seeking indemnification hereunder, then such Loss shall be reduced by the amount of such recovery actually received by
such Indemnified Party (net of any applicable premiums, collection costs, expenses and reserves, deductibles, premium adjustments,
retrospectively rated premiums and other Losses incurred in collecting such recovery). Notwithstanding the foregoing, the parties
agree that no Indemnified Party shall have any obligation to make insurance claims relating to any Loss for which it is seeking
indemnification or has obtained indemnification pursuant to this Article VII, and if an Indemnified Party elects not to
make any such insurance claim, such Loss shall in no way be reduced and the right of such Indemnified Party to pursue indemnification
for such Loss from the Indemnifying Parties hereunder shall not be limited in any respect.

 

(h)          Threshold.
There shall be no recovery for claims under Section 7.2(a)(i) unless and until the aggregate amount of Losses of the Indemnified
Parties that may be claimed thereunder exceeds $100,000 (the “Threshold”), and once such Threshold has been
reached, the Indemnifying Parties shall be liable to the Indemnified Parties for the full amount of all Losses, including those
which comprised any portion of the Threshold; provided that the Threshold shall not apply to claims for fraud or knowing
or willful breach or claims related to the Special Representations or, for the avoidance of doubt, Deemed Losses, Dissenting Share
Payments, Pre-Closing Taxes or Subsidiary Losses.

 

    	58

    	 

    

 

(i)          Several
Liability; Maximum. No Indemnifying Party shall be liable, or required to indemnify an Indemnified Party, for a breach of representation,
warranty or covenant of another Indemnifying Party in this Agreement or any other Transaction Document. In no event shall a Carve-Out
Participant be liable for an amount in excess of such Carve-Out Participant’s Escrow Pro Rata Portion of any particular Loss,
and in no event shall a Series AA Stockholder be liable for an amount in excess of such Series AA Stockholder’s Indemnity
Pro Rata Portion of any particular Loss. In no event shall an Indemnifying Party be liable for an aggregate amount in excess of
the aggregate cash dollar amount actually received by such Indemnifying Party hereunder (including deemed receipt of such Indemnifying
Party’s Escrow Pro Rata Portion of the Escrow Amount).

 

7.3         Claims
for Indemnification.

 

(a)          Procedure
for Claims. An Indemnified Party wishing to assert a claim for indemnification under this Article VII (other than
a third-party claim covered by Section 7.3(b) below) shall deliver to the Stockholder Representative a certificate
(an “Officer’s Certificate”) signed by any officer of CS (or another Indemnified Party) (A) stating
that CS (or such other Indemnified Party) has paid, sustained, incurred or accrued, or reasonably anticipates that it will have
to pay, sustain, incur, or accrue Losses (the aggregate amount of such Losses being referred to as the “Claimed Amount”),
(B) specifying in reasonable detail the facts pertinent to such claim(s), the individual items of Losses included in the amount
so stated and the nature of basis for indemnification to which such item is related, and (C) demanding payment of the Claimed
Amount. Within fifteen (15) days after delivery of such Officer’s Certificate, the Stockholder Representative shall deliver
to the Indemnified Party a written response in which the Stockholder Representative shall: (I) agree that the Indemnified Party
is entitled to receive all of the Claimed Amount (in which case the Stockholder Representative and the Indemnified Party shall
deliver to the Escrow Agent, within three (3) Business Days following delivery of the response, a written notice executed by both
such parties instructing the Escrow Agent to distribute to the Indemnified Party, out of the Indemnity Escrow Fund, an amount equal
to the Claimed Amount), (II) agree that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount (the
“Agreed Amount”) (in which case the Stockholder Representative and the Indemnified Party shall deliver to the
Escrow Agent, within three (3) Business Days following delivery of the response, a written notice executed by both such parties
instructing the Escrow Agent to distribute to the Indemnified Party, out of the Indemnity Escrow Fund, an amount equal to the Agreed
Amount), or (III) contest that the Indemnified Party is entitled to receive any of the Claimed Amount. If the Stockholder Representative
in such response contests the payment of all or part of the Claimed Amount, then the Stockholder Representative and the Indemnified
Party shall use good faith efforts to resolve such dispute in accordance with Section 7.3(c) below. Failure of the
Stockholder Representative to timely respond in writing shall be treated as agreement that the Indemnified Party is entitled to
the Claimed Amount, which Indemnified Party may then recover unilaterally from the Indemnity Escrow Fund.

 

    	59

    	 

    

 

(b)          Procedure
for Third-Party Claims. All claims for indemnification made under this Agreement resulting from, related to or arising out
of a third-party claim against an Indemnified Party (other than Tax Matters) shall be made in accordance with the following procedures.
In the event an Indemnified Party becomes aware of a third party claim which such Indemnified Party reasonably believes may result
in a Loss, such Indemnified Party shall promptly notify the Stockholder Representative of such claim by delivery of an Officer’s
Certificate to such Stockholder Representative. Delay or failure in so notifying the Stockholder Representative shall relieve the
Stockholders of their obligations under this Article VII only to the extent, if at all, that such Stockholders are
prejudiced by reason of such delay or failure. If there is a third party claim that, if adversely determined would give rise to
a right of recovery for Losses hereunder, then any amounts incurred or accrued in defense of such third party claim, regardless
of the outcome of such claim, shall be deemed Losses hereunder. Within thirty (30) days after delivery of such Officer’s
Certificate, the Stockholder Representative may, upon written notice thereof to the Indemnified Party, assume control of the defense
of such action, suit, proceeding or claim if (1) the Stockholder Representative provides written notice to such Indemnified
Party that the Stockholder Representative intends to undertake such defense and that the Stockholders will indemnify the Indemnified
Parties against all Losses resulting from or relating to such third-party claim; (2) the Stockholder Representative provides
such Indemnified Party with evidence reasonably acceptable to such Indemnified Party that the Stockholders will have the financial
resources to defend against the third-party claimant and fulfill their indemnification obligations hereunder; (3) the third-party
claim involves only monetary damages that will be fully covered by the Indemnity Escrow Fund (taking into account all other pending
claims against the Indemnity Escrow Fund) and does not seek an injunction or other equitable relief; (4) settlement of or
an adverse judgment with respect to the third-party claim is not, in the good faith judgment of CS, likely to establish a precedent
adverse to the continuing business of CS, and (5) the defense of the third-party claim is conducted actively and diligently
by legal counsel reasonably acceptable to such Indemnified Party. If the Stockholder Representative does not assume control of
such defense, the Indemnified Party shall control such defense. The party not controlling such defense may participate therein
at its own expense; provided, however, that if the Stockholder Representative assumes control of such defense and
the Indemnified Party reasonably concludes, based on advice of counsel, that the Stockholder Representative and the Indemnified
Party have conflicting interests with respect to such action, suit, proceeding or claim, the reasonable fees and expenses of counsel
to the Indemnified Party solely in connection therewith shall be considered “Losses” for purposes of this Agreement;
provided, however, that in no event shall the Stockholder Representative be responsible for the fees and expenses
of more than one counsel per jurisdiction for all Indemnified Parties. The party controlling such defense shall keep the other
party reasonably advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider recommendations
made by the other party with respect thereto. The Indemnified Party shall not agree to any settlement of such action, suit, proceeding
or claim without the prior written consent of the Stockholder Representative, not to be unreasonably withheld, delayed or conditioned.
The Stockholder Representative shall not agree to any settlement of such action, suit, proceeding or claim that does not include
a complete release of all potential Indemnified Parties from all Liability with respect thereto or that imposes any Liability on
any potential Indemnified Party without the prior written consent of such Indemnified Party.

 

    	60

    	 

    

 

(c)          Resolution
of Conflicts. In case the Stockholder Representative shall object in writing to any claim or claims made in any Officer’s
Certificate, the Stockholder Representative and Indemnified Party shall attempt in good faith to agree upon the rights of the respective
parties with respect to each of such claims within forty-five (45) days following the delivery by the Stockholder Representative
of its response to such Officer’s Certificate. If the Stockholder Representative and Indemnified Party should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both parties and, in the case of a claim against the Escrow
Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum and make distributions
from the Escrow Fund in accordance with the terms thereof.

 

7.4         Escrow
Funds. As of the Effective Time, CS, People’s United Bank (the “Escrow Agent”), and the Stockholder
Representative shall execute and deliver the Escrow Agreement substantially in the form attached hereto as Exhibit B (the
“Escrow Agreement”), and, as promptly as practicable thereafter (but in any event within one Business Day after
the Effective Time), CS or Sub shall deposit (a) the Indemnity Escrow Amount with the Escrow Agent to be held as a fund (the “Indemnity
Escrow Fund”) for the purpose of securing the indemnification obligations set forth in Article VII of this
Agreement and (b) the Net Working Capital Adjustment Escrow Amount with the Escrow Agent to be held as a fund (the “Net
Working Capital Adjustment Escrow Fund”) for the purpose of covering any shortfall in the Net Working Capital as set
forth in Section 1.15 of this Agreement; provided that, in connection with the Closing, the Company, rather than
CS or Sub, shall deposit the Carve-Out Escrow Amount from its available cash with the Escrow Agent to be held, as appropriate,
in the applicable Escrow Fund. The Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms
thereof. The Escrow Fund shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor
of any party, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement.

 

7.5         Stockholder
Representative.

 

(a)          The
Stockholders, by the execution and/or approval and adoption of this Agreement, authorize the Stockholder Representative (i) to
take all action necessary to consummate the transactions contemplated hereby, or the defense and/or settlement of any claims for
which the Stockholders may be required to indemnify CS or any other Indemnified Party pursuant to Article VII hereof,
(ii) to give and receive all notices required to be given under this Agreement, and (iii) to take any and all additional
action as is contemplated to be taken by or on behalf of the holders of the Company Capital Stock by the terms of this Agreement.

 

(b)          All
decisions and actions by the Stockholder Representative, including, without limitation, any agreement between the Stockholder Representative
and CS relating to the defense or settlement of any claims for which the Stockholders may be required to indemnify CS pursuant
to Article VII hereof, shall be binding upon all of the Stockholders, and no Stockholder shall have the right to object,
dissent, protest or otherwise contest the same. Notwithstanding the foregoing, the Stockholder Representative shall not be empowered
to make any decisions or to take any action with respect to any claims described in Section 7.2(c).

 

    	61

    	 

    

 

(c)          The
Stockholder Representative shall not have any Liability to any of the parties hereto or to the Stockholders for any act done or
omitted hereunder as Stockholder Representative while acting in good faith, and any act done or omitted pursuant to the advice
of counsel shall be conclusive evidence of such good faith. The Stockholders shall severally indemnify the Stockholder Representative
and hold him harmless against any loss, Liability or expense incurred without bad faith on the part of the Stockholder Representative
and arising out of or in connection with the acceptance or administration of his duties hereunder, including any unreimbursed out-of-pocket
costs and expenses and legal fees and other legal costs incurred by the Stockholder Representative. If not paid directly to the
Stockholder Representative by the Stockholders, such losses, Liabilities or expenses may be recovered by the Stockholder Representative
from the cash deposited in the Escrow Fund that is otherwise distributable to Stockholders (and not distributed or distributable
to CS or subject to a pending indemnification claim of CS) pursuant to the terms hereof and of the Escrow Agreement, at the time
of distribution.

 

(d)          The
Stockholder Representative shall have full power and authority on behalf of each Stockholder to take any and all actions on behalf
of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Stockholders under this Article VII.

 

(e)          By
his, her or its approval of the Merger, this Agreement and the Escrow Agreement, each Stockholder agrees, in addition to the foregoing,
that:

 

(i)          CS
and any other Indemnified Party shall be entitled to rely conclusively on the instructions and decisions of the Stockholder Representative
as to (i) the settlement of any claims for indemnification by CS or such Indemnified Party pursuant to Article VII
hereof, or (ii) any other actions required or permitted to be taken by the Stockholder Representative hereunder or under the
Escrow Agreement, and no party hereunder shall have any cause of action against CS or such Indemnified Party for any action taken
by CS or such Indemnified Party in reliance upon the instructions or decisions of the Stockholder Representative;

 

(ii)         all
actions, decisions and instructions of the Stockholder Representative shall be conclusive and binding upon all of the Stockholders
and no Stockholder shall have any cause of action against the Stockholder Representative for any action taken, decision made or
instruction given by the Stockholder Representative under this Agreement or the Escrow Agreement, except for fraud or willful misconduct
by the Stockholder Representative in connection with the matters described in this Section 7.5;

 

(iii)        the
provisions of this Section 7.5 are independent and severable, are irrevocable and coupled with an interest and shall
be enforceable notwithstanding any rights or remedies that any Stockholder may have in connection with the transactions contemplated
by this Agreement;

 

(iv)        remedies
available at law for any breach of the provisions of this Section 7.5 are inadequate; therefore, CS shall be entitled
to seek temporary and permanent injunctive relief without the necessity of proving damages if CS brings an action to enforce the
provisions of this Section 7.5; and

 

    	62

    	 

    

 

(f)          The
individual or entity serving as the Stockholder Representative may resign (upon no less than thirty (30) days prior notice to CS,
the Escrow Agent and each holder of record of Company Capital Stock that was outstanding immediately prior to the Effective Time
(other than Dissenting Shares)). In the event of the bankruptcy, death or permanent disability of the then Stockholder Representative,
or if the then-acting Stockholder Representative shall give notice of intent to resign, the holders of a majority in interest of
Company Capital Stock (other than Dissenting Shares) outstanding as of immediately prior to the Effective Time of the Merger (on
an as-converted to Company Common Stock basis) shall, by written notice to CS and the Escrow Agent, appoint a successor Stockholder
Representative as soon as practicable, and in no event later than thirty (30) days following such bankruptcy, death, permanent
disability or notice of intent to resign. In addition, the individual serving as the Stockholder Representative may be replaced
from time to time by the holders of a majority in interest of the Company Capital Stock (other than Dissenting Shares) outstanding
as of immediately prior to the Effective Time of the Merger (on an as-converted to Company Common Stock basis) upon not less than
ten (10) days prior written notice to CS, the Escrow Agent and each holder of record of Company Capital Stock that was outstanding
immediately prior to the Effective Time (other than Dissenting Shares). Each successor Stockholder Representative shall have all
of the power, authority, rights and privileges conferred by this Agreement upon the original Stockholder Representative, and the
term “Stockholder Representative” as used herein shall be deemed to include any such successor Stockholder Representatives.

 

(g)          The
provisions of this Section 7.5 shall be binding upon the executors, heirs, legal representatives, personal representatives,
successor trustees, assigns and successors of each Stockholder, and any references in this Agreement to a Stockholder or the Stockholders
shall mean and include the successors to the rights of the Stockholders hereunder, whether pursuant to testamentary disposition,
the Laws of descent and distribution or otherwise.

 

7.6         Additional
Indemnification. For a period of five (5) years following the Closing Date, CS shall fulfill and honor in all respects the
obligations of the Company pursuant to any indemnification provisions under applicable law, the Company Charter Documents as in
effect on the date hereof or pursuant to the indemnification agreements listed in Schedule 7.6 hereto (the “Indemnification
Schedule”) insofar as such indemnification provisions relate to the directors and officers of the Company set forth in
the Indemnification Schedule (such directors and officers being herein called the “Company Indemnitees”). The
rights of each Company Indemnitee shall be enforceable by each such Company Indemnitee or his or her heirs, personal representatives,
successors or assigns. Notwithstanding the foregoing, the obligations of CS (i) shall be subject to any limitation imposed by applicable
law and (ii) shall not be deemed to release any Company Indemnitee who is also an officer or director of the Company from his or
her obligations pursuant to this Agreement , nor shall such Company Indemnitee have any right of contribution, indemnification
or right of advancement from CS with respect to any Loss claimed by any of the Indemnified Parties against such Company Indemnitee
in his or her capacity as an Indemnifying Party pursuant to this Agreement.

 

ARTICLE VIII.

TERMINATION, AMENDMENT AND WAIVER

 

8.1         Termination.
Except as provided in Section 8.2 hereof, this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:

 

    	63

    	 

    

 

(a)          by
mutual written consent of the Company and CS;

 

(b)          by
CS or the Company if: (i) the Effective Time has not occurred before 5:00 p.m. (Eastern time) on April 30, 2014 (the “End
Date”); provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not
be available to any party whose willful failure to fulfill any obligation hereunder has been the principal cause of, or resulted
in, the failure of the Effective Time to occur on or before such date;

 

(c)          by
CS or the Company if (i) there shall be a final non-appealable order of a court of competent jurisdiction in effect preventing
consummation of the Merger, or (ii) there shall be any statute, rule, regulation or order enacted, promulgated or issued or
deemed applicable to the Merger by any Governmental Entity that would make consummation of the Merger illegal;

 

(d)          by
CS if there shall be any statute, rule, regulation, order judgment or decree enacted, promulgated or issued or deemed applicable
to the Merger by any Governmental Entity, which would (i) prohibit CS’s ownership or operation of any portion of the
business of the Company or any of its Subsidiaries or (ii) compel CS or the Company to dispose of or hold separate all or
any material portion of the business or assets of CS, the Company or any of their respective Subsidiaries or Affiliates as a result
of the Merger; or

 

(e)          by
CS, if an event or change having a Company Material Adverse Effect shall have occurred after the date of this Agreement and such
Company Material Adverse Effect has not been cured within fifteen (15) days.

 

8.2         Effect
of Termination. In the event of termination of this Agreement as provided in Section 8.1 hereof, this Agreement shall
forthwith become void and there shall be no Liability on the part of CS, Sub, the Company, the Signing Stockholders or their respective
officers, directors, employees, agents, consultants, representatives or stockholders (in their respective capacities as such),
if applicable; provided, however, that each party hereto shall remain liable for any breach of this Agreement prior to its termination;
and provided further, that, the provisions of Sections 5.3 (Confidentiality), 5.4 (Expenses) and 5.6 (Public Disclosure) hereof,
Article IX (General Provisions) hereof and this Section 8.2 (Effect of Termination) shall remain in full force and effect
and survive any termination of this Agreement pursuant to the terms of this Article VIII.

 

8.3         Amendment.
This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of the
party against whom enforcement is sought. For purposes of this Section 8.3, the Stockholders (including the Signing Stockholders)
agree that any amendment of this Agreement signed by the Stockholder Representative after the Effective Time shall be binding upon
and effective against the Stockholders whether or not they have signed such amendment; provided, however, that after the adoption
of this Agreement by the Stockholders and without their further approval, no such amendment shall reduce the amount of or change
the kind of consideration to be received in exchange for any shares of Company Capital Stock.

 

    	64

    	 

    

 

8.4         Extension;
Waiver. At any time prior to the Effective Time, CS, on the one hand, and the Company and the Stockholder Representative, on
the other hand, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations of the
other party hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein
or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party. For purposes of this Section 8.4, the Stockholders
(including the Signing Stockholders) agree that any extension or waiver signed by the Stockholder Representative shall be binding
upon and effective against all Stockholders whether or not they have signed such extension or waiver. Such extension or waiver
shall not be deemed to apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance with any
agreement or condition, as the case may be, other than that which is specified in the extension or waiver. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

ARTICLE IX

GENERAL PROVISIONS

 

9.1         Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) seven (7) Business Days
after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one (1) Business Day after
being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service, or (iii) on
the first Business Day following the date of confirmation of receipt of transmission by facsimile, in each case to the intended
recipient as set forth below:

 

(a)          if
to CS or Sub, to:

 

c/o ClickSoftware Technologies, Ltd.

Azorim Park, Oren Building

94 Em Hamoshavot Road

Petach Tikva 49527

Attention:    CFO

Facsimile No.:+972-3-7659-401

 

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

 

Zysman, Aharoni, Gayer and Sullivan & Worcester
LLP

One Post Office Square

Boston, Massachusetts 02109

Attention:    Lewis N. Segall

Facsimile No.:(617) 338-2880

 

    	65

    	 

    

 

(b)          if
to the Company, to:

 

Xora, Inc.

850 N. Shoreline Boulevard

Mountain View, CA 94043

Attention:    CEO

Facsimile No.: (650) 938-8401

 

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

 

Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP

1200 Seaport Blvd.

Redwood City, CA 94063

Attention:    Scott C. Dettmer

Facsimile No.: (877) 881-6851

 

(c)          if
to the Stockholder Representative, to:

 

Ned Carlson

P.O. Box 571

Southport, CT 06890

Facsimile No.: (203) 842-4098

 

Any party to this Agreement may change the
address to which notices and other communications hereunder are to be delivered by giving the other parties to this Agreement notice
in the manner herein set forth.

 

9.2           Interpretation.
The words “include,” “includes” and “including” when used herein shall be deemed in each case
to be followed by the words “without limitation.” The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

9.3           Counterparts.
This Agreement may be executed by facsimile and in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same counterpart.

 

9.4           Entire
Agreement; Assignment. This Agreement, the other Transaction Documents, the Schedule of Exceptions, the Confidential Disclosure
Agreement, and the documents and instruments and other agreements among the parties hereto referenced herein: (i) constitute
the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings
both written and oral, among the parties with respect to the subject matter hereof; (ii) are not intended to confer upon any
other person any rights or remedies hereunder; and (iii) shall not be assigned by operation of Law or otherwise, except that
CS may assign its rights and delegate its obligations hereunder to its Affiliates so long as CS remains obligated to perform those
obligations required to be performed by CS hereunder.

 

    	66

    	 

    

 

9.5           Severability.
In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application
of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

 

9.6           Other
Remedies. Any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of
any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy.

 

9.7           Governing
Law. EXCEPT AS OTHERWISE PROVIDED HEREIN, ALL QUESTIONS AND/OR DISPUTES CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION
OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS,
OF THE STATE OF DELAWARE. THE COMPANY, THE STOCKHOLDER REPRESENTATIVE, EACH SIGNING STOCKHOLDER, AND EACH OTHER STOCKHOLDER, BY
ACCEPTANCE OF CONSIDERATION SPECIFIED HEREIN, HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS
AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND AGREES THAT ANY ACTION INVOLVING ANY EQUITABLE OR OTHER
CLAIM SHALL BE BROUGHT EXCLUSIVELY IN THE DELAWARE COURT OF CHANCERY. IN THE EVENT THAT THE DELAWARE COURT OF CHANCERY DOES NOT
ACCEPT JURISDICTION OVER ANY SUCH ACTION, THE COMPANY, THE STOCKHOLDER REPRESENTATIVE, THE ESCROW AGENT AND EACH STOCKHOLDER, BY
ACCEPTANCE OF CONSIDERATION SPECIFIED HEREIN, HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY SUCH ACTION THEN SHALL BE
BROUGHT EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE.

 

9.8           Rules
of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such agreement or document.

 

9.9           Specific
Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

 

    	67

    	 

    

 

9.10       Attorneys’
Fees. If any action or other proceeding relating to the enforcement of any provision of this Agreement is brought by any party
hereto, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs, and disbursements (in addition
to any other relief to which the prevailing party may be entitled).

 

9.11       Release.
Effective as of the Closing Date and by virtue of the Merger having been approved by the Stockholders, each Stockholder does unconditionally
and irrevocably release, waive and forever discharge, as of the Closing Date, each of CS, Sub, the Surviving Corporation, the Company,
its Subsidiaries and each of their past and present directors, officers, employees, agents, equity holders, insurers and Affiliates
(the “Company Released Parties”), from any and all Liabilities of such Stockholder of any kind or nature whatsoever,
arising directly or indirectly from any act, omission, event or transaction occurring (or any circumstances existing) on or prior
to the Closing Date (except under this Agreement and the other Transaction Documents and except in connection with the transactions
contemplated hereby and thereby), including any and all of the foregoing arising out of or relating to (i) such Stockholder’s
capacity as current or former equity holders, warrantholders, optionholders or agents of the Company or its Subsidiaries, or (ii)
any contract, agreement or other arrangement (except for this Agreement and the other Transaction Documents) entered into or established
prior to the Closing Date, including any equity holders agreements, employment agreements or previous noncompetition agreements
(with the effect that any Liability or obligation of Sub, Surviving Corporation, Company or its Subsidiaries under any such contract,
agreement or other arrangement, including any provision purporting to survive termination of such contract, agreement or other
arrangement and without regard to any notice requirement thereunder, is hereby terminated in its entirety). Each Stockholder understands
that, other than with respect to obligations of the Company Released Parties arising under this Agreement and the other Transaction
Documents, or except as provided in the preceding sentence, this is a full and final general release of all Liabilities of any
nature whatsoever, whether or not known, suspected or claimed, that could have been asserted in any legal or equitable proceeding
against the Company Released Parties prior to the date of this Agreement.

 

9.12       WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY
PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

9.13       Conflicts
Regarding Representation; Nonassertion of Attorney-Client Privilege.

 

(a)          CS
waives and will not assert, and agrees to cause the Company and its Subsidiaries to waive and not to assert, any conflict of interest
arising out of or relating to the representation, after the Closing (the “Post-Closing Representation”), of
the Company or of any stockholder, officer, employee or director of the Company or any Subsidiary of the Company (any such Person,
a “Designated Person”) (i) in any matter involving this Agreement or the transactions contemplated hereby, by
any legal counsel currently representing the Company or any Subsidiary of the Company in connection with this Agreement or the
transactions contemplated hereby (the “Transaction Representation”) or (ii) in respect of any other matters
prior to the Closing, by any legal counsel currently representing or that has represented the Company or any Subsidiary of the
Company in connection with such other matters (the “Company Representation”).

 

    	68

    	 

    

 

(b)          CS
waives and will not assert, and agrees to cause the Company and its Subsidiaries to waive and to not assert, any attorney-client
privilege with respect to any communication between any legal counsel and any Designated Person occurring or having occurred during
the Transaction Representation or the Company Representation in connection with any Post-Closing Representation, including in connection
with a dispute with CS, and following the Closing, with the Company or any of its Subsidiaries, it being the intention of the parties
hereto that all such rights to such attorney-client privilege and to control such attorney-client privilege shall be retained by
the applicable Designated Person.

 

ARTICLE X

DEFINITIONS

 

For all purposes of this Agreement, the
following terms shall have the following respective meanings:

 

“Acquisition Activities”
shall have the meaning set forth in Section 5.2 hereof.

 

“Affiliate” shall mean,
with respect to any person, any other person directly or indirectly through one or more intermediaries controlling, controlled
by or under common control with such other person.

 

“Agreed Amount” shall
have the meaning set forth in Section 7.3(a) hereof.

 

“Agreement” shall have
the meaning set forth in the preamble hereof.

 

“Business Day” shall
mean any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in New York, New
York are permitted or required by Law to remain closed.

 

“Carrier Agreement” shall
mean a Contract with a mobile phone service provider for the marketing, sale, resale or distribution of the Company Products.

 

“Carve-Out Escrow Amount”
shall mean ten percent (10%) of the Indemnity Escrow Amount and ten percent (10%) of the Net Working Capital Adjustment Escrow
Amount.

 

“Carve-Out Participants”
shall mean individuals who receive payments pursuant to the Xora, Inc. Management Carve-Out Plan in connection with the transactions
contemplated by this Agreement.

 

“Certificate of Merger”
shall have the meaning set forth in Section 1.2 hereof.

 

“Claimed Amount” shall
have the meaning set forth in Section 7.3(a) hereof.

 

“Closing” shall have
the meaning set forth in Section 1.2 hereof.

 

    	69

    	 

    

 

“Closing Date” shall
have the meaning set forth in Section 1.2 hereof.

 

“Closing Debt” shall
mean the sum, without duplication, of (a) amounts payable in connection with (i) the termination of any Company Warrants
or Company Options, (ii) the waiver of any right to accelerate vesting of any Company Options or Company Warrants, and (iii) amounts
payable as a result of the transactions contemplated by this Agreement with respect to control provisions contained in any agreements
binding upon the Company or CS, including, without limitation, payments to Carve-Out Participants (including the Carve-Out Escrow
Amount, to the extent not paid by the Company from its available cash in connection with the Closing), bonuses, severance payments,
or under executive or other employment agreements, and all Taxes related thereto payable or subject to withholding by the Company;
and (b) any Third-Party Expenses payable by the Company.

 

“COBRA” shall mean the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and as codified in Section 4980B of the Code and Section 601
et. seq. of ERISA.

 

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

 

“Company” shall have
the meaning set forth in the preamble hereof.

 

“Company 401(k) Plan”
shall mean any and all Company Employee Plans intended to include a Code Section 401(k) arrangement.

 

“Company Capital Stock”
shall mean all capital stock of the Company, whether or not issued or outstanding.

 

“Company Cash” shall
mean, with respect to the Company and its Subsidiaries, as of the close of business on the Closing Date, all cash, cash equivalents
and marketable securities held on deposit in the bank accounts of the Company or any of its Subsidiaries at such time. For avoidance
of doubt, Company Cash shall (1) be calculated net of issued but uncleared checks and drafts, (2) include checks and drafts deposited
for the account of the Company and its Subsidiaries, provided that they clear as deposits and (3) exclude the Carve-Out Escrow
Amount to the extent paid by the Company from its available cash in connection with the Closing.

 

“Company Charter Documents”
shall have the meaning set forth in Section 2.1 hereof.

 

“Company Common Stock”
shall mean shares of common stock, $0.001 par value per share, of the Company.

 

“Company Employee Plan”
shall mean any plan, program, policy, practice, contract, agreement or other material arrangement providing for compensation, severance,
termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe, welfare, retirement, death,
disability or medical benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise,
funded or unfunded (including each “employee benefit plan” within the meaning of Section 3(3) of ERISA) that is
or has been maintained, contributed to, or required to be contributed to, by the Company or any of its Subsidiaries or ERISA Affiliates
and with respect to which the Company or any of its Subsidiaries or ERISA Affiliates has or may have any Liability or obligation.

 

    	70

    	 

    

 

“Company Intellectual Property”
shall mean any and all Licensed Company Intellectual Property and Owned Company Intellectual Property.

 

“Company Intellectual Property
Agreements” shall have the meaning set forth in Section 2.13(e) hereof.

 

“Company Material Adverse Effect”
shall mean any change, event or effect that is materially adverse to (i) the business, assets (whether tangible or intangible),
condition (financial or otherwise), results of operations or capitalization of the Company and its Subsidiaries, taken as a whole,
or (ii) the Company’s ability to consummate the transactions contemplated by this Agreement; except for any such change,
event or effect solely to the extent it results from (a) the outbreak or escalation of war, hostilities or terrorist activities,
either in the United States or abroad; provided, however, that such outbreak or escalation does not have a disproportionate or
unique effect on the Company; (b) changes in GAAP or other accounting standards; provided, however, that such changes do not have
a disproportionate or unique effect on the Company; (c) general economic conditions (or changes in such conditions) in the United
States or any other country or region in the world in which the Company conducts business; provided, however, that such conditions
or changes in conditions do not have a disproportionate or unique effect on the Company; (d) earthquakes, hurricanes, tsunamis,
tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United
States or any other country or region in the world in which the Company conducts business; provided, however, that such events
do not have a disproportionate or unique effect on the Company; or (e) any actions taken or failure to take action, in each case,
which CS has approved in writing, consented to in writing or requested in writing, or compliance with the terms of, or the taking
of any action required by, this Agreement, or the failure to take any action prohibited by this Agreement.

 

“Company Options” shall
mean all issued and outstanding options or other rights (including commitments to grant options or other rights) to purchase or
otherwise acquire (by payment of consideration, conversion or otherwise) any Company Capital Stock (whether or not vested) held
by any current or former employee or consultant to the Company or any of its Subsidiaries. References to vested Company Options
shall refer to that portion of a Company Option which has vested in accordance with the terms of such Company Option, and references
to unvested Company Options shall refer to that portion of a Company Option which has not vested in accordance with the terms of
such Company Option.

 

“Company Personnel” shall
mean any current or former Employee, consultant or director of the Company or any of its Subsidiaries or Affiliates.

 

“Company Preferred Stock”
shall mean shares of Preferred Stock, $0.001 par value per share, of the Company.

 

“Company Privacy Obligations”
shall have the meaning set forth in Section 2.31 hereof.

 

“Company Privacy Policies”
shall have the meaning set forth in Section 2.31 hereof.

 

“Company Products” shall
have the meaning set forth in Section 2.13(a) hereof.

 

    	71

    	 

    

 

“Company Restricted Stock”
shall mean shares of Company Capital Stock outstanding immediately prior to the Effective Time that are unvested or are subject
to a right of repurchase by the Company, risk of forfeiture or other condition under any applicable restricted stock purchase agreement
or other agreement with the Company.

 

“Company Series AA Preferred Stock”
shall mean shares of series AA preferred stock, $0.001 par value per share, of the Company.

 

“Company Source Code”
shall mean source code for which the Intellectual Property and Intellectual Property Rights therein are part of the Owned Company
Intellectual property.

 

“Company Stock Certificates”
shall have the meaning set forth in Section 1.9(c) hereof.

 

“Company Warrants” shall
mean all issued and outstanding rights to purchase or otherwise acquire (by payment of consideration, conversion or otherwise)
shares of Company Capital Stock and other contingent rights to acquire Company Capital Stock, other than any Company Options, including
any convertible promissory notes.

 

“Confidential Information”
shall have the meaning set forth in Section 5.5 hereof.

 

“Conflict” shall have
the meaning set forth in Section 2.5 hereof.

 

“Contract” shall have
the meaning set forth in Section 2.5 hereof.

 

“CS” shall have the meaning
set forth in the preamble hereof.

 

“CS Material Adverse Effect”
shall mean any change, event or effect that is materially adverse to CS’s ability to consummate the transactions contemplated
by this Agreement.

 

“Current Balance Sheet”
shall have the meaning set forth in Section 2.7(a) hereof.

 

“Customer Information”
shall have the meaning set forth in Section 2.12(f) hereof.

 

“Data Room” shall mean
the online data room established by Merrill Corporation for “Project Ajax” in connection with the transactions contemplated
by this Agreement.

 

“Deemed Loss” shall have
the meaning set forth in Section 7.2(b) hereof.

 

“Delaware Law” shall
have the meaning set forth in Section 1.1 hereof.

 

“Dispute Resolution Auditor”
shall have the meaning set forth in Section 1.14 hereof.

 

“Dissenting Share Payments”
shall have the meaning set forth in Section 1.8(c) hereof.

 

“Dissenting Shares” shall
have the meaning set forth in Section 1.8(a) hereof.

 

“Domain Name” shall mean
any or all of the following and all worldwide rights in, arising out of, or associated therewith: domain names, uniform resource
locators (“URLs”) and other names and locators associated with the Internet.

 

    	72

    	 

    

 

“Effective Time” shall
have the meaning set forth in Section 1.2 hereof.

 

“Employee” shall mean
any current or former employee of the Company or any of its Subsidiaries or Affiliates.

 

“Employee Agreement”
shall mean each management, employment, severance, consulting, relocation, repatriation, expatriation, visas, work permit or other
agreement, or contract between the Company or any of its Subsidiaries or Affiliates and any current Company Personnel or, to the
extent the obligations thereunder are ongoing, any former Company Personnel.

 

“End Date” shall have
the meaning set forth in Section 8.1(b) hereof.

 

“Environmental Laws”
shall mean all federal, state, local and foreign Laws issued, promulgated, approved or entered relating to environmental matters,
the protection of the environment, the protection of human health and safety, or exposure to Hazardous Materials, including without
limitation workplace health and safety Laws, packaging and labeling Laws and Laws relating to the Release or threatened Release
of Hazardous Materials to the environment (including, without limitation, ambient air, surface water, ground water, land surface
or subsurface strata) or otherwise relating to the presence, manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

 

“Environmental Order”
shall mean any order, judgment, injunction, award, decree or writ relating to the environment or imposed pursuant to Environmental
Laws.

 

“Environmental Permits”
shall mean all Permits required by or issued pursuant to applicable Environmental Laws.

 

“Equipment” shall have
the meaning set forth in Section 2.12(e) hereof.

 

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

 

“ERISA Affiliate” shall
mean any other person or entity that is or has been treated as a single employer with the Company under Section 414(b), (c),
(m) or (o) of the Code, and the regulations issued thereunder or Sections 4001(a)(14) or 4001(b)(1) of ERISA, and the regulations
issued thereunder. For purposes of Section 2.10(c) of this Agreement, “ERISA Affiliate” shall mean any person or entity
required to be aggregated with the Company pursuant to Section 409A(d)(6) and the regulations issued thereunder.

 

“Escrow Agent” shall
have the meaning set forth in Section 7.4 hereof.

 

“Escrow Amount” shall
mean the Indemnity Escrow Amount plus the Net Working Capital Adjustment Escrow Amount.

 

“Escrow Agreement” shall
have the meaning set forth in Section 7.4 hereof.

 

    	73

    	 

    

 

“Escrow Fund” shall mean
the Indemnity Escrow Fund and the Net Working Capital Adjustment Escrow Fund.

 

“Estimated Net Working Capital
Adjustment” shall have the meaning set forth in Section 1.13 hereof.

 

“Escrow Pro Rata Portion”
shall mean, with respect to each Indemnifying Party, an amount equal to the quotient obtained by dividing (x) the sum of (a)
the amount of cash payable pursuant to Section 1.7(a) hereof in respect of the shares of Company Series AA Preferred
Stock owned by such Indemnifying Party as of the Effective Time and (b) the amount of cash payable to such Indemnifying Party pursuant
to the Xora, Inc. Management Carve-Out Plan in connection with the transactions contemplated by this Agreement by (y) the sum of
(a) the aggregate amount of cash payable to all Series AA Stockholders pursuant to Section 1.7(a) hereof in respect of Company
Capital Stock as of the Effective Time and (b) the aggregate amount of cash payable to all Carve-Out Participants pursuant to the
Xora, Inc. Management Carve-Out Plan in connection with the transactions contemplated by this Agreement. Each Indemnifying Party’s
Escrow Pro-Rata Portion is set forth on Schedule 10.

 

“Estimated Purchase Price”
shall have the meaning set forth in Section 1.13 hereof.

 

“Estimated Third-Party Expenses”
shall have the meaning set forth in Section 1.13 hereof.

 

“Final Purchase Price”
shall have the meaning set forth in Section 1.6 hereof.

 

“Financial Statements”
shall have the meaning set forth in Section 2.7(a) hereof.

 

“FIRPTA Compliance Certificate”
shall have the meaning set forth in Section 5.9 hereof.

 

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

 

“Governmental Entity”
shall have the meaning set forth in Section 2.6 hereof.

 

“Hazardous Materials”
shall mean all hazardous substances, wastes, extremely hazardous substances, hazardous materials, hazardous wastes, hazardous constituents,
solid wastes, special wastes, toxic substances, pollutants, contaminants, petroleum or petroleum derived substances or wastes,
and related materials, including without limitation any such materials defined, listed, regulated or identified under or described
in any Environmental Laws (including, by way of example and without limitation, spent solvents, PCBs, urea-formaldehyde, radon,
lead or lead based paints or materials, asbestos and asbestos containing materials).

 

“HIPAA” shall mean the
Health Insurance Portability and Accountability Act of 1996, as amended.

 

“Immigration Laws” shall
have the meaning set forth in Section 2.32 hereof.

 

    	74

    	 

    

 

“Indebtedness” shall
mean, with respect to any person, the sum, without duplication, of (a) all obligations of such person for borrowed money, whether
current or funded, secured or unsecured, (b) all obligations of such person for the deferred purchase price of any property or
services (other than trade accounts payable arising in the ordinary course of the business of such person), (c) all obligations
of such person secured by a purchase money mortgage or other lien to secure all or part of the purchase price of property subject
to such mortgage or lien, (d) all obligations under leases which shall have been or should be, in accordance with GAAP or other
generally accepted accounting principles as applicable to such person, recorded as capital leases in respect of which such person
is liable as lessee, (e) any obligation of such person in respect of bankers’ acceptances, (f) all obligations of a type
referred to in clauses (a), (b), (c), (d), or (e) above which is directly or indirectly guaranteed by such person or which it has
agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a credit against
loss, (g) any refinancings of any of the foregoing obligations, (h) any penalties or fees accrued under any of the foregoing, including
those resulting from the prepayment or repayment of any of the foregoing obligations and (i) all accrued interest payable on any
of the foregoing obligations.

 

“Indemnified Party” shall
have the meaning set forth in Section 7.2(a) hereof.

 

“Indemnifying Party”
shall have the meaning set forth in Section 7.2(a) hereof

 

“Indemnity Escrow Amount”
shall mean fifteen percent (15%) of the Initial Purchase Price.

 

“Indemnity Escrow Fund”
shall have the meaning set forth in Section 7.4 hereof.

 

“Indemnity Pro Rata Portion”
shall mean, with respect to each Series AA Stockholder, an amount equal to the quotient obtained by dividing (x) the amount
of cash payable pursuant to Section 1.7(a) hereof in respect of the shares of Company Series AA Preferred Stock owned
by such Series AA Stockholder as of the Effective Time by (y)  the aggregate amount of cash payable to all Series AA Stockholders
pursuant to Section 1.7(a) hereof in respect of Company Capital Stock as of the Effective Time. Each Series AA Stockholder’s
Indemnity Pro-Rata Portion is set forth on Schedule 10.

 

“India Subsidiary” shall
mean Xora Software Systems Private Ltd., an Indian company.

 

“Initial Purchase Price”
shall mean an amount equal to fourteen million seven hundred dollars ($14,700,000).

 

“Intellectual Property”
shall mean any or all of the following: (i) proprietary inventions (whether patentable or not), invention disclosures, industrial
designs, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all
documentation relating to any of the foregoing; (ii) business, technical and know-how information, non-public information, and
confidential information including databases and data collections and all rights therein; (iii) works of authorship (including
computer programs, source code, object code, whether embodied in software, firmware or otherwise), architecture, artwork, logo
images, documentation, files, records, schematics, verilog files, netlists, emulation and simulation reports, test vectors and
hardware development tools; (iv) processes, devices, prototypes, schematics, net lists, mask works, test methodologies and hardware
development tools; (v) logos, trade names, trade dress, trademarks, service marks, World Wide Web addresses, uniform resource
locators and domain names, tools, methods and processes; and (vii) any similar or equivalent property of any of the foregoing (as
applicable).

 

    	75

    	 

    

 

“Intellectual Property Rights”
shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith:
(i) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part
thereof throughout the world (“Patents”); (ii) copyrights, copyrights registrations and applications therefor,
and all other rights corresponding thereto throughout the world including moral and economic rights of authors and inventors, however
denominated (“Copyrights”); (iii) industrial designs and any registrations and applications therefor throughout
the world; (iv) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications
therefor and all goodwill associated therewith throughout the world (“Trademarks”); (v) trade secrets (including,
those trade secrets defined in the Uniform Trade Secrets Act and under corresponding foreign statutory and common law), business,
technical and know-how information, non-public information, and confidential information and rights to limit the use or disclosure
thereof by any person; including databases and data collections and all rights therein (“Trade Secrets”); (vi)
mask works, mask work registrations and applications, and all other rights corresponding thereto throughout the world; and (vii)
any similar or equivalent rights to any of the foregoing (as applicable).

 

“Interested Person” shall
have the meaning set forth in Section 2.16(a) hereof.

 

“International Plan”
shall have the meaning set forth in Section 2.23(b) hereof.

 

“IRS” shall mean the
United States Internal Revenue Service.

 

“IT Systems” means computers,
computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines and all other
information technology equipment, and all associated documentation, used by the Company in its business as presently conducted.

 

“Key Employees” shall
have the meaning set forth in Section 6.2(r) hereof.

 

“Knowledge” shall mean
with respect to the Company, the knowledge of the Company’s officers and other senior managers after due and diligent inquiry.

 

“Law” shall mean any
law, statute, ordinance, rule, regulation, code, Order or other provision having the force or effect of law enacted, issued, promulgated,
enforced or ordered by a Governmental Entity.

 

“Lease Agreements” shall
have the meaning set forth in Section 2.12(b) hereof.

 

“Leased Real Property”
shall have the meaning set forth in Section 2.12(a) hereof.

 

    	76

    	 

    

 

“Liability” shall mean,
with respect to any person, any liability or obligation of such person of any kind, character or description, whether known or
unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured,
joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not
the same is required to be accrued on the financial statements of such person.

 

“Liens” shall have the
meaning set forth in Section 2.10(a)(viii) hereof.

 

“Licensed Company Intellectual
Property” shall mean all Intellectual Property and Intellectual Property Rights licensed to the Company or any of its
Subsidiaries by third parties.

 

“Loss” shall have the
meaning set forth in Section 7.2(a) hereof.

 

“Material Customer” shall
have the meaning set forth in Section 2.30 hereof.

 

“made available” shall
mean, with respect to a document, that such document (a) has been posted by the Company to the Data Room and that CS has been granted
unrestricted access to view such document, or (b) has been provided directly to CS in electronic or hardcopy format.

 

“Merger” shall have the
meaning set forth in Section A of the Recitals.

 

“Net Working Capital”
shall mean (as finally determined under Section 1.14) (i) accounts receivable, prepaid expenses (but in no event shall prepaid
expenses include Third Party Expenses), deposits - ST and other receivables, and employee advances (but in any event excluding
Company Cash and deferred income Tax Assets) of the Company and its Subsidiaries as of the close of business on the Closing Date
minus (ii) accounts payable, deferred revenue (whether current or long term), accrued and other current Liabilities (including
current Tax Liabilities), accrued commissions and bonuses, and accrued and unused vacation, sick leave or time off (but in any
event excluding Indebtedness or Closing Debt and deferred income Tax Liabilities) of the Company and its Subsidiaries as of the
close of business on the Closing Date, which items are set forth for illustrative purposes in the example net working capital calculation
attached hereto as Exhibit E.

 

“Net Working Capital Adjustment”
shall mean the amount, if any, by which the Target Net Working Capital Amount exceeds (or is less than) Net Working Capital.

 

“Net Working Capital Adjustment
Escrow Amount” shall mean fifty percent (50%) of the Target Net Working Capital Amount.

 

“Net Working Capital Adjustment
Escrow Fund” shall have the meaning set forth in Section 7.4 hereof.

 

“Objections Statement”
shall have the meaning set forth in Section 1.14 hereof.

 

“Officer’s Certificate”
shall have the meaning set forth in Section 7.3(a) hereof.

 

“Official” shall have
the meaning set forth in Section 2.26 hereof.

 

“Open Source Materials”
shall have the meaning set forth in Section 2.13(m) hereof.

 

    	77

    	 

    

 

“Order” shall mean any:

 

(a)          order,
judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, subpoena, writ
or award that is or has been issued, made, entered, rendered or otherwise put into effect by or under the authority of any court,
administrative agency or other Governmental Entity or any arbitrator or arbitration panel; or

 

(b)          Contract
with any Governmental Entity that is or has been entered into in connection with any Proceeding.

 

“Owned Company Intellectual Property”
shall mean all Intellectual Property and Intellectual Property Rights that are owned by the Company or any of its Subsidiaries.

 

“Paying Agent” shall
have the meaning set forth in Section 1.9(a) hereof.

 

“Payoff Letters” shall
mean letters relating to Third-Party Expenses and Indebtedness that indicate in each case the relevant and respective amount of
such Third-Party Expenses and Indebtedness and containing a statement to the effect that such Third-Party Expenses and Indebtedness
incurred with respect to products or services or Indebtedness provided with respect to the period prior the Closing Date, regardless
of when payable, have been paid and satisfied in full.

 

“Pension Plan” shall
mean each Company Employee Plan that is an “employee pension benefit plan,” within the meaning of Section 3(2)
of ERISA.

 

“Per Share Common Merger Consideration”
shall be zero ($0.00).

 

“Per Share Merger Consideration”
shall refer to the Per Share Common Merger Consideration and the Per Share Series AA Merger Consideration.

 

“Per Share Series AA Merger
Consideration” shall mean the portion of the Final Purchase Price to which each share of Company Series AA Preferred
Stock is entitled as set forth on Schedule 1.7(a)(i).

 

“Permits” shall mean
any permits, consents, licenses, certificates, registrations, certificates of occupancy or use, variances, orders, governmental
authorizations or approvals, or any other permits.

 

“Plan” shall mean the
Company’s 2000 Stock Option Plan and the Company’s 2010 Stock Option Plan.

 

“Pre-Closing Dividend”
shall have the meaning set forth in Section 5.1(f) hereof.

 

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

 

“Pre-Closing Taxes” means
any Taxes of the Company or its Subsidiaries with respect to any Pre-Closing Tax Period.

 

    	78

    	 

    

 

“Release” shall mean
any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment or out of any property, including the movement of any materials through or in the air, soil, surface water, ground
water or property.

 

“Remedial Action” shall
mean all actions to (a) abate, contain, ameliorate, clean up, remove, treat, remediate or in any other way address any Hazardous
Materials; (b) prevent the Release of Hazardous Materials so that they do not migrate or endanger or threaten to endanger human
health or welfare or the indoor or outdoor environment; or (c) perform studies, investigations, and pre- or post-remedial monitoring
and care; and (d) otherwise correct a condition of noncompliance with Environmental Laws.

 

“Representative” shall
mean, with respect to any person, such person’s officers, directors, stockholders, equity holders, members, general partners,
limited partners, consultants, employees, auditors, attorneys, advisors, lenders and other agents (including legal counsel, accountants
and financial advisors).

 

“Requisite Stockholder Vote”
shall mean approval of at least (i) a majority of the Company Common Stock and Company Preferred Stock, voting together as
a single class and on an as-converted to common stock basis and (ii) sixty-seven percent (67%) of the Series AA Preferred Stock,
voting together as a single class and on an as-converted to Company Common Stock basis.

 

“Returns” shall have
the meaning set forth in Section 2.10(a)(i) hereof.

 

“Schedule of Exceptions”
shall have the meaning set forth in preamble to Article II hereof.

 

“Section 280G Payment”
shall have the meaning set forth in Section 2.23(g) hereof.

 

“Section 409A” shall
have the meaning set forth in Section 2.10(c) hereof.

 

“Series AA Stockholder”
shall mean any holder of any Company Series AA Preferred Stock immediately prior to the Effective Time.

 

“Soliciting Materials”
shall have the meaning set forth in Section 5.3(e) hereof.

 

“Special Representations”
shall have the meaning set forth in Section 7.1(a) hereof.

 

“Spreadsheet” shall have
the meaning set forth in Section 1.13 hereof.

 

“Stockholder” shall mean
any holder of any Company Capital Stock immediately prior to the Effective Time.

 

“Stockholder Approval”
shall have the meaning set forth in Section 5.3(a) hereof.

 

“Stockholder Notice”
shall have the meaning set forth in Section 5.3(b)(i) hereof.

 

    	79

    	 

    

 

“Stockholder Representative”
shall have the meaning set forth in the preamble hereof.

 

“Stockholder Written Consents”
shall have the meaning set forth in Section H of the Recitals.

 

“Straddle Period” means
any Tax period beginning before or on the Closing Date and ending after the Closing Date.

 

“Sub” shall have the
meaning set forth in the preamble hereof.

 

“Subsidiary” shall mean,
with respect to any party, any corporation or other organization, whether incorporated or unincorporated, of which (i) such party
or any other subsidiary of such party is a general partner (excluding such partnerships where such party or any subsidiary of such
party does not have a majority of the voting interest in such partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or
by any one or more of its subsidiaries.

 

“Subsidiary Charter Documents”
shall have the meaning given in Section 2.1 hereof.

 

“Subsidiary Losses” shall
mean any Losses paid, incurred, accrued or sustained by the Indemnified Parties, or any of them (including the Surviving Corporation),
directly or indirectly, as a result of the matters specified on Schedule 7.2(a)(vi).

 

“Survival Date” shall
have the meaning set forth in Section 7.1(a) hereof.

 

“Surviving Corporation”
shall have the meaning set forth in Section 1.1 hereof.

 

“Target Net Working Capital Amount”
shall mean one million seven hundred thousand dollars ($1,700,000).

 

“Tax” For the purposes
of this Agreement, the term “Tax” or, collectively, “Taxes” shall mean any and all federal,
state, local and foreign taxes, assessments and other similar governmental charges, duties, impositions and Liabilities, including
taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts.

 

“Tax Asset” means any
net operating loss, net capital loss, investment tax credit, research and development tax credit, foreign tax credit, charitable
deduction or any other credit or tax attribute that could be carried forward or back to reduce Taxes (including deductions and
credits related to alternative minimum Taxes).

 

“Tax Matter” shall have
the meaning set forth in Section 5.19(e) hereof.

 

“Third-Party Expenses”
shall have the meaning set forth in Section 5.6 hereof.

 

    	80

    	 

    

 

“Total Outstanding Shares”
shall mean the aggregate number of shares of Company Common Stock and Company Preferred Stock, on an as-converted basis, issued
and outstanding immediately prior to the Effective Time.

 

“Total Outstanding Series AA
Shares” shall mean the aggregate number of shares of Company Series A Preferred Stock issued and outstanding immediately
prior to the Effective Time.

 

“Transaction Documents”
shall mean this Agreement, the Voting Agreement and the Escrow Agreement.

 

“Voting Agreement” shall
have the meaning set forth in Section F of the Recitals.

 

[Remainder of page intentionally left blank.]

 

    	81

    	 

    

 

IN WITNESS WHEREOF, CS, Sub, the Company,
the Signing Stockholders and the Stockholder Representative have caused this Agreement to be signed, all as of the date first written
above.

 

	 	CLICKSOFTWARE, INC.
	 	 
	 	By:	/s/Moshe BenBassat
	 	Name:  Moshe BenBassat
	 	Title:  CEO
	 	 
	 	XORA, INC.
	 	 
	 	By:	/s/Anne Bonaparte
	 	Name:  Anne Bonaparte
	 	Title: CEO & President
	 	 
	 	AJAX ACQUISITION Corporation
	 	 	 
	 	By:	/s/Moshe BenBassat
	 	Name: Moshe BenBassat
	 	Title: CEO
	 	 
	 	STOCKHOLDER REPRESENTATIVE
	 	 	 
	 	By:	/s/Ned Carlson
	 	Name: Ned Carlson

 

[Signature Page to Agreement and Plan of Merger]

 

    	 

    	 

    

 

	 	FOR PURPOSES OF ARTICLE III, ARTICLE
	 	VII, ARTICLE VIII, ARTICLE IX, ARTICLE
	 	X, SECTIONS 5.2, 5.5, 5.6, 5.7, 5.10, 5.11,
	 	5.12, 6.3 AND 9.7:
	 	 
	 	PREFERRED HOLDERS:
	 	 
	 	BLUESTREAM VENTURES, L.P.
	 	By:	BlueStream Management, L.P.
	 	Its:	General Partner
	 	By:	BlueStream Management, LLC
	 	Its:	General Partner
	 	 	 
	 	By:	/s/Raj Gollamudi
	 	Name:	Raj L. Gollamudi
	 	Its:	General Partner

 

    	2

    	 

    

 

	 	FOR PURPOSES OF ARTICLE III, ARTICLE
	 	VII, ARTICLE VIII, ARTICLE IX, ARTICLE
	 	X, SECTIONS 5.2, 5.5, 5.6, 5.7, 5.10, 5.11,
	 	5.12, 6.3 AND 9.7:
	 	 
	 	PREFERRED HOLDERS:
	 	 
	 	DAWNTREADER FUND II LP
	 	By:	Wit/DT II Advisors LLC,
	 	 	its General Partner
	 	 	 
	 	By:	/s/Ned Carlson
	 	Print Name: Ned Carlson
	 	Title: Manager
	 	 	 
	 	DAWNTREADER FUND II A LP
	 	By:	Wit/DT II Advisors LLC,
	 	 	its General Partner
	 	 	 
	 	By:	/s/Ned Carlson
	 	Print Name: Ned Carlson
	 	Title: Manager
	 	 	 
	 	DAWNTREADER FUND II OFFSHORE LP
	 	By:	Wit/DT II Advisors LLC,
	 	 	its General Partner
	 	 	 
	 	By:	/s/Ned Carlson
	 	Print Name: Ned Carlson
	 	Title: Manager
	 	 
	 	DAWNTREADER FUND II AFFILIATES LP
	 	By:	Wit/DT II Advisors LLC,
	 	 	its General Partner
	 	 	 
	 	By:	/s/Ned Carlson
	 	Print Name: Ned Carlson
	 	Title: Manager

 

    	3

    	 

    

 

	 	FOR PURPOSES OF ARTICLE III, ARTICLE
	 	VII, ARTICLE VIII, ARTICLE IX, ARTICLE
	 	X, SECTIONS 5.2, 5.5, 5.6, 5.7, 5.10, 5.11,
	 	5.12, 6.3 AND 9.7:
	 	 
	 	PREFERRED HOLDERS:
	 	 
	 	RHO VENTURES V, L.P.
	 	By:	RMV V, L.L.C., its General Partner
	 	By:	Rho Capital Partners LLC,
	 	 	its Managing Member
	 	 	 
	 	By:	/s/Jeffrey Martin
	 	Name: 	Jeffrey Martin
	 	Its:	Attorney-in-fact
	 	 	 
	 	RHO VENTURES V AFFILIATES, L.L.C.
	 	By:	RMV V, L.L.C., its General Partner
	 	By:	Rho Capital Partners LLC,
	 	 	its Managing Member
	 	 	 
	 	By:	/s/Jeffrey Martin
	 	Name: 	Jeffrey Martin
	 	Its:	Attorney-in-fact

 

    	4

    	 

    

 

	 	FOR PURPOSES OF ARTICLE III, ARTICLE
	 	VII, ARTICLE VIII, ARTICLE IX, ARTICLE
	 	X, SECTIONS 5.2, 5.5, 5.6, 5.7, 5.10, 5.11,
	 	5.12, 6.3 AND 9.7:
	 	 
	 	PREFERRED HOLDERS:
	 	 
	 	SPLIT ROCK PARTNERS, L.P.
	 	By:	Split Rock Partners Management, LLC
	 	Its:	General Partner
	 	 	 
	 	By:	/s/Michael Gorman
	 	 	Michael B. Gorman
	 	 	Managing Director

 

    	5As of April 1, 2014

 

JR Licensing, LLC

475 Tenth Avenue

New York, New York 10018

 

Ladies and Gentlemen:

 

We are pleased to advise
that Bank Hapoalim B.M. (the “Bank”) has agreed, subject to the conditions set forth below, to extend a term
loan (the “Term Loan”) to JR Licensing, LLC, a Delaware limited liability company (the “Borrower”),
in the maximum principal amount of NINE MILLION AND 00/100 DOLLARS ($9,000,000.00) (the “Term Loan”).

 

The Term Loan (1) shall
be evidenced by a Promissory Note dated as of the date hereof executed by Borrower in favor of the Bank in the amount of $9,000,000.00
(the Promissory Note, together with any riders referred to in paragraph 3 thereto, as each may be amended, restated, supplemented
or otherwise modified from time to time, shall collectively be referred to as the “Promissory Note”), (2)
shall mature on January 1, 2019, and (3) shall be repaid by Borrower in accordance with the terms and conditions of the Promissory
Note.

 

    	 

    	 

    

 

1.          Conditions
Precedent

 

The effectiveness of
the Term Loan is subject to the satisfaction, in the Bank’s sole discretion, of the following conditions: (a) the Bank’s
receipt of such documentation as it may request, including without limitation, the following, each in form and substance satisfactory
to the Bank in all respects: (i) this Letter Agreement duly executed by the Borrower; (ii) the Promissory Note; (iii) (A) a Security
Agreement executed by Borrower in favor of the Bank (as amended, restated, supplemented or otherwise modified from time to time,
the “Asset Security Agreement”) and (B) an Intellectual Property Security Agreement executed by Borrower in
favor of the Bank (as amended, restated, supplemented or otherwise modified from time to time, the “IP Security Agreement”;
the Security Agreement and the IP Security Agreement shall be collectively referred to herein as the “Security Agreement”);
(iv) a guaranty to perform the obligations of Borrower to the Bank executed on behalf of Xcel Brands, Inc.(“Parent”)
and IM Brands, LLC (“IM Brands” together with Parent each a “Guarantor” and collectively,
“Guarantors”); (v) a Pledge Agreement executed by Parent. with respect to all of the Stock of Borrower (as amended,
restated, supplemented or otherwise modified from time to time, the “Pledge Agreement”); (vi) an amendment with
respect to the loan documentation between IM Brands and the Bank (the “IM Brands Amendment”); (vii) an opinion
of the Borrower’s and Guarantors’ legal counsel, covering such issues as the Bank may reasonably request; (viii) a
resolution by Borrower’s Manager approving and authorizing the execution, delivery and performance of the Loan Documents
(as defined below) and any transaction contemplated thereby as well as the incumbency and signatures of those authorized to sign
and act with respect to the Loan Documents; (ix) a resolution by IM Brands’ Manager approving and authorizing the execution,
delivery and performance of the IM Brands Amendment and any transaction contemplated thereby; (x) a letter of direction from Borrower
to the Bank with respect to the disbursements of the proceeds of the Term Loan; (xi) a subordination agreement in favor of the
Bank with respect to the indebtedness and obligations of Borrower and Parent to Judith Ripka Berk; and (xii) any other documents
as the Bank may reasonably require; (b) the Borrower’s entering into such various collateral, security and/or control documents
designed to create and perfect the Bank’s security interest in certain assets of Borrower and any other documents or instruments
related thereto as required by the Bank and its counsel; (c) certified copies of UCC, intellectual property, tax lien and judgment
searches or other evidence satisfactory to Lender, listing all effective financing statements which name Borrower(under present
name, any previous name or any trade or doing business name) as debtor and covering all jurisdictions requested by the Bank, together
with copies of such other financing statements and recordations; (d) the Bank’s receipt of a current appraisal of the Borrower’s
Trademarks (as such term is defined in the IP Security Agreement) conducted at the Borrower’s expense in form and substance
acceptable to the Bank and performed by a firm acceptable to the Bank; (e) the Bank shall have received a fully executed payoff
letter satisfactory to Lender confirming (i) the amount of all obligations owing by Sellers to Rosenthal & Rosenthal, Inc.
will be repaid in full from the proceeds of the Term Loan, (ii) that all liens and security interests upon any property of Sellers
shall be terminated immediately upon receipt of such payment by such parties; (f) the Bank’s receipt of a field examination
with respect to the business and assets of Borrower performed by a field examiner acceptable to the Bank with results satisfactory
to the Bank; (g) the Bank’s receipt of a copy of a life insurance policy insuring the life of Judith Ripka for an amount
at least equal to $10,000,000 naming Borrower as the beneficiary thereof together with a collateral assignment of the proceeds
of such life insurance policy in the favor of the Bank; (h) Borrower shall have furnished the Bank (i) a summary of all of the
Borrower’s existing insurance coverage and (ii) evidence acceptable to the Bank that the insurance policies required by Section
4(s) hereof have been obtained and are in full force and effect (and, if requested by the Bank, copies of such policies); (i) the
Bank shall have received satisfactory evidence that Borrower and Guarantors have obtained all required consents and approvals of
all Persons including all requisite governmental authorities, to the execution, delivery and performance of this Agreement and
the other Loan Documents; (j) the Bank shall have completed its business and legal due diligence, including agreements relating
to the Trademark Licenses with results satisfactory to the Bank; (k) payment to the Bank of a commitment fee in the amount of $45,000,
such payment to be made from the proceeds of the Term Loan; (l) the Liabilities shall not exceed fifty percent (50%) of the current
fair market value of the Borrower’s Trademarks, as such value is set forth in the most recent appraisal acceptable to the
Bank of the Borrower’s Trademarks, as prepared by an independent appraisal firm acceptable to the Bank; and (m)
the Bank shall be satisfied that, subject only the funding of the Term Loan and the use of proceeds thereof, all conditions
precedent to the consummation of the Acquisition will have been satisfied or duly waived with the consent of the Bank and the Acquisition
will have been consummated in accordance with the Acquisition Agreement.

 

This Letter Agreement,
the Promissory Note, the Security Agreement, each Guaranty, the Pledge Agreement, any Rate Contract between Borrower and Bank or
an affiliate of Bank and any documents or instruments entered into in connection with any of the foregoing shall be referred to
herein as the “Loan Documents”.

 

    	2

    	 

    

 

2.          Representations
and Warranties

 

In order to induce
the Bank to enter into this Letter Agreement and to make available the Term Loan provided for herein, Borrower makes the following
representations and warranties to the Bank, all of which shall survive the execution and delivery of the Loan Documents: (a)
Organization, Good Standing and Due Qualification. Borrower is a limited liability company duly organized and existing under
the laws of the State of Delaware and has the full power, authority and legal right to own its assets and conduct its business
as it is now being conducted. (b) Company Power and Authority. Borrower has the requisite power and authority to
execute, deliver and carry out the terms of the Loan Documents and has taken all necessary limited liability company action to
authorize the execution, delivery and performance of the Loan Documents. Each of the Loan Documents constitutes its legal, valid
and binding obligation enforceable in accordance with its terms, except to the extent that enforceability of any such Loan Document
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally or limiting the right of specific performance. The execution and delivery of, the performance
of its obligations under, and compliance with the provisions of the Loan Documents by Borrower will not: (i) contravene any existing
applicable law, statute, rule or regulation or any judgment decree or permit to which Borrower is subject, the contravention of
which would have a material adverse effect on the Borrower’s operations; (ii) conflict with, or result in any breach of any
of the terms of, or constitute a default under, any material agreement or other instrument to which Borrower is a party or is subject
or by which it or any of its property is bound; (iii) contravene or conflict with any provisions of the Borrower’s Certificate
of Formation and Limited Liability Company Agreement; or (iv) result in the creation or imposition of, or oblige Borrower to create,
any lien or encumbrance on the Borrower’s assets, rights or revenues, except as provided for in the Loan Documents. (c)
Litigation. No litigation, arbitration or administrative proceeding is pending or, to the knowledge of Borrower and its
respective officers, threatened against Borrower or any other Person affiliated with Borrower, which could have a material
adverse effect on the Borrower’s intellectual property or the business, assets or financial condition of Borrower or any
other Person affiliated with Borrower, except as specifically set forth on Schedule I hereto. (d) Disputes.
There is not in existence nor to the Borrower’s knowledge is there likely to occur any dispute with any governmental or other
authority or any other dispute of any kind which in any such case may materially adversely affect it or its business or assets.
(e) Undisclosed Obligations. Except as set forth in on Schedule II hereto, there are no liabilities of any
Person of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise, which could reasonably be expected
to result in a material adverse effect, and there is no existing condition, situation or set of circumstances which could reasonably
be expected to result in such a liability, other than liabilities under the Loan Documents. (f) Immunity. To the
knowledge of the Borrower, neither Borrower nor any of its assets is entitled to immunity on the grounds of sovereignty or otherwise
from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or
other enforcement). (g) Consents, Approvals. Every consent, authorization, license or approval of, or registration
with or declaration to, governmental or public bodies or authorities or courts required by Borrower to authorize, or required by
Borrower in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Loan Documents
or the performance by Borrower of its obligations under the Loan Documents has been obtained or made and is in full force and effect
and there has been no default in the observance of the conditions or restrictions (if any) imposed in, or in connection with, any
of the same. (h) Investment Company. Borrower is not an “investment company” or a company controlled
by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. Borrower is not subject
to regulation under any federal or state statute or regulations that limit its ability to incur any indebtedness. (i) Margin
Stock. Borrower is not engaged principally in the business of extending credit for the purpose of purchasing or carrying any
“Margin Stock” as defined in Regulation U, and no part of the proceeds of any Extension of Credit will be used in a
manner that would result in the Extensions of Credit being deemed to be a “purpose credit” under Regulation U of the
Federal Reserve Board, as the same may at any time be amended or modified and in effect. (j) No Default. Borrower
is not, nor would it be with the giving of notice or lapse of time, in breach of or in default under any agreement relating to
indebtedness to which it is a party or by which it may be bound or under any material agreement binding upon it which could reasonably
be expected to have a material adverse effect on the Borrower’s business assets or financial condition. (k) Security
Documents. The Security Agreement is effective to create in favor of the Bank a legal, valid and enforceable security interest
in the collateral as defined and qualified therein. (l) Subsidiaries. Set forth on Schedule III is a true
and complete list of all of the Subsidiaries of the Borrower, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of such Subsidiary represented by such ownership interests.
(m) Financial Statements. The internally prepared financial statements of Parent and its Subsidiaries on a consolidated
basis for the fiscal quarter ending September 30, 2013 and drafts of the consolidated financial statement of Parent and its Subsidiaries
for the fiscal year ending December 31, 2013 and the most recent annual balance sheets of Guarantor and its Subsidiaries, together
(in each case) with the related statements of income and the related notes and supplemental information delivered to the Bank,
have been prepared in accordance with GAAP in effect as of such date consistently applied, except as otherwise indicated in the
notes to such financial statements. All of such financial statements fairly present the financial position or the results of operations
of Parent and its Subsidiaries at the dates or for the periods indicated, and reflect all known liabilities, contingent or otherwise,
that GAAP requires, as of such dates, to be shown or reserved against. (n) Intellectual Property. Schedules A and
B to the IP Security Agreement contain a true, correct and complete list of all of the Borrower’s registered Copyrights,
registered Trademarks and Revenue Licenses. (o) License Agreements. Borrower has provided to the Bank true, correct
and complete copies of each Revenue License, including all material amendments, schedules, exhibits and other attachments thereto,
all conditions to the effectiveness of each Revenue License have been satisfied on or prior to the date hereof, and to the knowledge
of Borrower no material defaults exist with respect to any of the Revenue Licenses except as disclosed to the Bank on Schedule
IV hereto. (p) Acquisition Agreements. As of the date of this Agreement, Borrower has delivered to the Bank a
complete and correct copy of the Acquisition Agreement (including all schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in connection therewith). Neither Borrower, any Guarantor nor
to the best of Parent’s and Borrower’s knowledge, any other Person party thereto is in default in the performance or
compliance with any provisions thereof. The Acquisition Agreement complies with, and the Acquisition has been consummated in accordance
with, all applicable laws. The Acquisition Agreement is in full force and effect as of the date of this Agreement and has not been
terminated, rescinded or withdrawn. All requisite approvals by governmental authorities having jurisdiction over Borrower, any
Guarantor or, to the best of Parent’s and Borrower’s knowledge, any Seller with respect to the transactions contemplated
by the Acquisition Agreement have been obtained, and no such approvals impose any conditions to the consummation of the transactions
contemplated by the Acquisition Agreement or to the conduct by any Guarantor or by Borrower of its business thereafter. To the
best of Borrower’s knowledge, none of any Seller’s representations or warranties in the Acquisition Agreement contain
any untrue statement of a material fact or omit any fact necessary to make the statements therein not misleading. Each of the representations
and warranties given by each of Parent and Borrower in the Acquisition Agreement is true and correct in all material respects.

 

    	3

    	 

    

 

3.          Financial
Reporting Requirements

 

(a)          Borrower
and Parent each hereby agrees that, so long as the Term Loan remains in effect and any amount is due and owing to Bank thereunder,
it shall submit to the following reporting requirements:

 

(i)          Annual
Financial Statements.  Furnish to Bank within one hundred and twenty (120) days after the close of each fiscal year
of Parent, a copy of the audited financial statement of Parent and its Subsidiaries on a consolidated basis as at the end of such
fiscal year and statements of income and of cash flows for such fiscal year, prepared by CohnReznick LLP or other independent certified
public accountants of nationally recognized standing reasonably acceptable to the Bank. In addition, no later than the delivery
of such audited financial statements, the Borrower shall furnish to the Bank the corresponding consolidating balance sheets of
Parent and each of its Subsidiaries as at the end of each fiscal year and statements of income and of cash flows for such fiscal
year.

 

(ii)         Quarterly
Financial Statements.  As soon as available and in any event within sixty (60) days after the end of each of the
first three quarterly periods of each fiscal year of Parent, a copy of internally prepared financial statement of Parent and its
Subsidiaries on a consolidated basis together with consolidating balance sheets of Parent and each of its Subsidiaries as of the
end of such quarter and the related statements of income and of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth commencing with the fiscal quarter ending June 30, 2015 in each case in comparative
form the figures as of the end of and for the corresponding period, in the previous year (subject to normal year-end audit adjustments).

 

(iii)        Covenant
Compliance Certificate. Simultaneously with the delivery of each set of financial statements referred to in clause (a)(i) and
(a)(ii) of this Section 3, provide a covenant compliance certificate of an authorized officer or Manager of Parent and Borrower
substantially in the form of Exhibit A hereto and otherwise in form and substance satisfactory to the Bank in all respects.

 

(iv)         Royalty
Collections Reports. Borrower shall furnish to the Bank within sixty (60) days after the close of each calendar quarter a copy
of its Quarterly Royalty Collections Report showing actual royalties billed and collected in the period covered thereby and setting
forth the GMR for such period. For purposes of this Letter Agreement, the term “Quarterly Royalty Collections Report”
shall mean a report substantially in the form of Exhibit B hereto and “GMR” shall mean guaranteed minimum royalties.

 

    	4

    	 

    

 

(b)          Borrower
further agrees that, so long as the Term Loan remains in effect and any amount is due and owing to Bank thereunder:

 

(i)          Complete
Statements. All financial statements required pursuant to paragraphs (a)(i) and (a)(ii) of this Section 3 shall be complete
and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein except with respect to interim financial statements the absence of footnotes and subject
to year-end adjustments.

 

(ii)         Fiscal
Year. The fiscal year of Parent and Borrower shall conclude on December 31st of each year.

 

4.          Financial
and Other Covenants

 

Borrower and Guarantor
hereby agree that, so long as the Term Loan remains in effect and any amount is due and owing to Bank thereunder, Borrower and
Parent shall submit to the following requirements:

 

(a)          Minimum
Net Worth. Net Worth of Parent and its Subsidiaries on a consolidated basis shall not be less than $31,000,000 at the end of
any fiscal quarter.

 

(b)          Minimum
Liquid Assets. Liquid Assets of Parent and its Subsidiaries on a consolidated basis shall be at least $3,000,000 at all times.

 

(c)          Fixed
Charge Coverage Ratio. The Fixed Charge Ratio of Parent and its Subsidiaries on a consolidated basis at the end of each fiscal
quarter for the twelve fiscal month period ending on such fiscal quarter shall not be less than 1.20 to 1.00 for the periods ending
on or prior to December 31, 2015 and not less than 1.10 to 1.00 for periods commencing on and after March 31, 2016.

 

(d)          Capital
Expenditures. Capital Expenditures of Parent and its Subsidiaries on a consolidated basis in any fiscal year shall not exceed
$1,300,000.

 

(e)          Minimum
EBITDA of Borrower. EBITDA of Borrower shall not be less than $3,000,000 for the fiscal year ending December 31, 2014, not
less than $4,000,000 for the fiscal year ending December 31, 2015 and not less than $5,000,000 for the fiscal year ending December
31, 2016 and each fiscal year end thereafter.

 

(f)          Minimum
EBITDA of Parent. EBITDA of Parent shall not be less than $5,500,000 for the fiscal year ending December 31, 2014, not less
than $7,500,000 for the fiscal year ending December 31, 2015, not less than $11,000,000 for the fiscal year ending on December
31, 2016 and not less than $12,000,000 for fiscal year ending December 31, 2017 and each fiscal year end thereafter.

 

    	5

    	 

    

 

(g)          Financial
Information. Borrower and Parent shall (i) provide the Bank with such financial and other information concerning Parent, Borrower,
Guarantor and their affairs, as the Bank may from time to time reasonably request, (ii) promptly inform the Bank of any occurrence
of which it becomes aware which might adversely affect its ability to perform its obligations under the Loan Documents and of any
default under the Loan Documents forthwith upon becoming aware thereof, and (iii) promptly inform the Bank of any threatened litigation
or administrative or arbitration proceedings before or of any court, tribunal, arbitrator of other relevant authority that may
be Material to Borrower or affect a Material part of the Borrower’s assets.

 

(h)          Consents;
Taxes. Borrower and Parent shall (i) obtain or cause to be obtained, maintain in full force and effect and comply in all material
respects with the conditions and restrictions (if any) imposed in, or in connection with, every material consent, authorization,
material license or approval of governmental or public bodies or authorities or courts and do, or cause to be done, all other acts
and things, which may from time to time be necessary or desirable under applicable law for the continued due performance of all
its obligations under the Loan Documents; (ii) comply in all material respects with all applicable laws, rules, regulations and
orders of any governmental agency having jurisdiction over Borrower or Parent; (iii) pay to the appropriate governmental authorities
when due, all Federal, state, local and other Taxes required to be paid or deposited by Borrower or Parent, except that Borrower
or Parent may defer any such payment while Borrower or Parent is diligently contesting the respective Taxes in good faith by appropriate
proceedings, but any such deferment shall not extend beyond the time when such unpaid Taxes would become a lien upon any of Borrower’s
or Parent’s assets. Borrower will furnish the Bank promptly at the Bank’s request with evidence satisfactory to the
Bank establishing payment of such Taxes, assessments and contributions. In the Bank’s discretion, the Bank shall have the
right (but shall not be obligated) to pay any such Tax, assessment or contribution (including any interest or penalties thereon)
for Borrower’s or Parent’s benefit in the event Borrower or Parent shall fail timely to do so and provided the non-payment
of such Tax will result in a lien or security interest encumbering the assets which will be prior to the lien and security interest
held by the Bank; any such payment shall be deemed an advance hereunder bearing interest at the Loan Rate (as such term is defined
in the Promissory Note) and payable in the manner specified therein. Borrower shall, promptly on demand, reimburse the Bank for
any such payment and any costs and expenses (including reasonable attorneys’ fees) which the Bank may incur in connection
therewith. Notwithstanding anything in any of the Loan Documents to the contrary, Borrower and Parent shall furnish to the Bank
within twenty (20) days of when filed copies of its annual tax returns as filed with the applicable taxing authority, and to the
extent that Borrower or Parent fails to file its annual Federal tax return with the United States Internal Revenue Service by the
March 15th deadline, Borrower and Parent shall furnish to the Bank no later than three (3) Business Days after such
deadline a copy of Borrower’s and Parent’s properly filed extension request.

 

(i)          Company
Existence. Borrower will maintain its existence as a limited liability company and carry on its business in substantially the
same manner and in substantially the same fields as such business is now carried on and maintained. Parent will maintain its existence
as a corporation and carry on its business in substantially the same manner and in substantially the same fields as such business
is now carried on and maintained.

 

    	6

    	 

    

 

(j)          Encumbrances.
Borrower shall not create, effect or permit to exist any Encumbrance over all or any part of its assets except for (i) liens for
taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of Borrower or Parent in conformity with GAAP; (ii) carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like liens arising in the ordinary course of business; (iii)
pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;
(iv) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(v) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that do not
materially interfere with the ordinary conduct of the business of Borrower or Parent; (vi) liens in existence on the date hereof
listed on Schedule IV hereto, provided that no such lien is spread to cover any additional property after the date hereof
and that the amount of indebtedness secured thereby is not increased; (vii) liens securing indebtedness of Borrower or Parent incurred
to finance the acquisition of fixed or capital assets, provided that (x) such liens shall be created substantially simultaneously
with the acquisition of such fixed or capital assets, (y) such liens do not at any time encumber any property other than the property
financed by such indebtedness and (z) the amount of indebtedness secured thereby is not increased; (viii) liens created pursuant
to the Security Agreement and the Pledge Agreement; (ix) any interest or title of a lessor under any lease entered into by Parent,
Borrower or any other Subsidiary in the ordinary course of its business and covering only the assets so leased; and (x) the interests
of non-exclusive licensees under license agreements entered into in the ordinary course of business. Parent shall not create, effect
or permit to exist any Encumbrance over all or any part of any of its assets pledged as collateral security for the Liabilities.

 

(k)          Indebtedness.
Neither Borrower nor Parent shall incur, create, assume, become or be liable in any manner with respect to, or permit to exist,
any indebtedness for borrowed money, reimbursement or payment obligations or any obligation evidenced by notes, bonds, debentures
or similar instruments other than (a) pursuant to the Loan Documents; (b) indebtedness to Parent or any of its Subsidiaries; provided
that any such indebtedness to Parent or any of its Subsidiaries shall be subordinated to the Liabilities on terms and conditions
reasonably satisfactory to the Bank; (c) indebtedness (including, without limitation, capital lease obligations) secured by liens
permitted by clause (vii) of Section 4(j) in an aggregate principal amount not to exceed $750,000 at any one time outstanding;
(d) indebtedness outstanding on the date hereof and listed on Schedule II hereto and any refinancings, refundings,
renewals or extensions thereof (without any increase in the principal amount thereof and any shortening of the maturity of any
principal amount thereof) except that Borrower and Parent may amend the indebtedness listed on Schedule II to (i) modify
the manner, calculations or mechanics by which amounts thereunder are payable in capital stock of Parent and (ii) extend the maturity
of all or any portion of the indebtedness evidenced thereby; (e) unsecured indebtedness not to exceed $500,000 in the aggregate
at any time outstanding; (f) indebtedness under Rate Contracts entered in the ordinary course of business in order to mitigate
interest rate, currency or similar risks and not for speculative purposes with respect to the Term Loan; (g) guarantee obligations
of Parent with respect to the obligations of any Subsidiary of Parent; (h) guarantee obligations of Borrower with respect to the
obligations of IM Brands to the Bank; and (i) indebtedness in the amount of the Holdback Amount representing the deferred portion
of the purchase price under the Acquisition Agreement.

 

    	7

    	 

    

 

(l)          No
Merger. Neither Borrower nor Parent shall merge or consolidate with any other Person, acquire all or substantially all of the
assets or Stock of any Person except (a) any Subsidiary of Borrower may be merged or consolidated with or into Borrower provided
Borrower shall be the continuing or surviving entity; (b) any Subsidiary of Borrower may dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to Borrower only; (c) any Subsidiary of Parent (other than Borrower and IM Brands) may be merged
or consolidated with or into Parent provided Parent shall be the continuing or surviving entity; (d) any Subsidiary of Parent (other
than Borrower and IM Brands) may dispose of any or all of its assets (upon voluntary liquidation or otherwise) to Parent; (e) as
otherwise expressly permitted pursuant to the terms of the Promissory Note; and (f) Parent may acquire the assets or stock of any
Person provided that such acquisition is not financed in whole or in part from any distributions, loans or other assets of Borrower
or any Subsidiary of Borrower.

 

(m)          Dispositions.
Borrower shall not sell, transfer, lend or otherwise dispose of or cease to exercise direct control over any part of its assets,
undertakings or revenues which, in the commercially reasonably opinion of the Bank, is material, other than (a) dispositions of
obsolete, worn out or damaged equipment not used in the Borrower’s business; (b) as permitted pursuant to the terms of the
IP Security Agreement; (c) the sale of inventory in the ordinary course of business; (d) dispositions permitted by clause (b) of
Section 4(l); (e) the disposition of any or all of the assets of Borrower to any of its Subsidiaries; (f) the disposition of other
assets having a fair market value not to exceed $750,000 in the aggregate for any of the Borrower’s fiscal years; (g) any
settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any
property of Borrower, Parent or any of their respective Subsidiaries if such property is Collateral (as defined in the Security
Agreement or the Pledge Agreement); (h) non-exclusive licenses of intellectual property in the ordinary course of business; and
(i) subject to the prior written consent of the Bank, payments of an amount not to exceed the Holdback Amount with respect to the
deferred portion of the purchase price under the Acquisition Agreement.

 

(n)          Affiliate
Transactions. None of Borrower, Parent nor any of their respective subsidiaries shall enter into any transaction with any of
its affiliates, unless such transaction is on terms not materially less favorable than if the transaction had been negotiated in
good faith on an arm’s length basis with a non-affiliate; provided, however, Parent may allocate to Borrower
general administrative and other corporate expenses of Parent (“Parent Allocable Expenses”) in accordance with
Parent’s expense allocation method that is an acceptable methodology with segment reporting.

 

    	8

    	 

    

 

(o)          Distributions.
Neither Parent nor Borrower shall declare or pay any dividends on or make any other distribution with respect to any equity interests,
except that: (i) any Subsidiary of Borrower may make such payments to Borrower; (ii) Borrower may make such payments to Parent
in order to permit Parent to make Capital Expenditures and pay overhead, employment cost and expenses and similar expenses to the
extent incurred in connection with the operation of the business of Borrower and the Borrower’s Subsidiaries; provided, however,
that (x) such expenses shall not include interest expense of Parent, scheduled payments of principal on funded debt of Parent or
capital expenditures of Parent that do not relate to the business of Borrower and Borrower’s Subsidiaries and (y) to the
extent Parent has any Subsidiary other than Borrower, any such expenses which do not relate exclusively to the business and operations
of Borrower and the Borrower’s Subsidiaries or any such other Subsidiary shall be allocated ratably among Borrower and each
such other Subsidiary and Borrower shall only make such payments to Parent in an amount equal to its ratable share of such expenses
and any such expenses which relate directly to the operations of such other Subsidiary shall be paid directly or indirectly by
such other Subsidiary (such distributions, the “Expense Distributions”);
provided that Borrower must accrue and not pay to Parent the first five hundred thousand dollars ($500,000) of Expense Distributions
from the date hereof until such time as the principal amount of the Term Loan and the principal amount of the term loan made by
the Bank to IM Brands has been reduced by $1,000,000 in the aggregate (other than as a result of a scheduled amortization payment);
(iii) Borrower may make such payments to Parent in an amount equal to the estimated federal, state and local tax liability of Parent
resulting from any taxable income (net of all losses, including for prior years to the extent permitted to be deducted) of the
Borrower, which such distribution may be made on a quarterly basis not more than five (5) business days prior to the date on which
any quarterly estimated tax payment is payable by Parent; provided, however, that, upon determination of the actual tax liability
of Parent with respect to the taxable income of Borrower for any tax year, the next quarterly estimated payment shall be increased
or reduced by the difference between the estimated payments made during such tax year and such actual tax liability (such distributions,
the “Tax Distributions”); (iv) Borrower may make such payments to Parent in amount equal to the franchise and
other tax liability (other than for the tax liability covered by clause (iii) above) of Parent as respects the business of Borrower
and Borrower’s Subsidiaries; and (v) subject to compliance with Section 4(p), Borrower may make distributions on or after
January 1, 2015, in an amount not to exceed fifty percent (50%) of Excess Cash Flow.

 

(p)          Cash
Flow Recapture. On and after January 1, 2015, Borrower shall prepay the outstanding amount of the Term Loan from Excess Cash
Flow for the prior fiscal year in an amount equal to fifty percent (50%) of such Excess Cash Flow (the “Cash Flow Recapture
Requirement”). Such payments shall be received by the Bank no later than the date of delivery of the financial statements
required pursuant to Section 3(a)(i) and shall be applied by the Bank to the principal amount of the Term Loan in the reverse order
of maturity.

 

(q)          Bank
Accounts. Within sixty (60) days of the date hereof Borrower shall have established its primary operating bank accounts at
the Bank, and thereafter Parent and its Subsidiaries and Borrower shall, during the term hereof, maintain its primary deposit accounts
and operating accounts at the Bank in accordance with the standard account documents of the Bank such that at least 80% of the
aggregate amount of cash of such Persons are in deposit accounts at the Bank.

 

(r)          Subsidiaries.
Borrower shall not permit or suffer to exist the formation of additional Subsidiaries unless the Bank consents to such new Subsidiary
in writing.

 

    	9

    	 

    

 

(s)          Trademarks
and License Agreements. Borrower shall provide (i) written notice to the Bank immediately upon any occurrence described in
paragraph D(6) of the Promissory Note and (ii) within forty-five (45) days after the close of each calendar quarter a written report
summarizing all material changes to and material Defaults under any Revenue License.

 

(t)          Use
of Proceeds. Borrower shall use the proceeds of the Term Loan (i) to finance in part the Acquisition, including, without limitation,
to finance in part the satisfaction of all obligations of Sellers to Rosenthal & Rosenthal, Inc., (ii) to pay transaction fees
and expenses incurred in connection with the transactions contemplated by the Acquisition, this Letter Agreement and the other
Loan Documents and (iii) and for general working capital purposes.

 

(u)          Inspections
and Appraisals. At all times during normal business hours upon reasonable advance notice to Borrower (provided that no notice
shall be required if an Event of Default has occurred and is continuing), the Bank and/or any agent of the Bank shall have the
right to (i) have access to, visit, inspect, review, evaluate and make physical verification and appraisals of Borrower’s
properties and the collateral securing the Term Loan, (ii) inspect, audit, photograph and copy and make extracts from Borrower’s
and Parent’s Books and Records, including management letters prepared by independent accountants, and (iii) discuss with
Borrower’s and Parent’s principal officers and independent accountants Borrower’s and Parent’s business,
assets, liabilities, financial condition, results of operations and business prospects. The Bank’s inspection rights under
this clause (s) shall be at the sole cost and expense of the Bank and, except upon the occurrence and during the continuance of
an Event of Default, be limited to no more than twice in any calendar year. Borrower and Parent each will deliver to the Bank any
instrument necessary for the Bank to obtain records from any service bureau maintaining records for Borrower or Parent.

 

(v)          Exchange
Controls. To the extent that Borrower or Parent trades or purchased foreign currency, Borrower and Parent each shall obtain
any Exchange Control Permit deemed by the Bank to be necessary or appropriate; and obtain the renewal of any such Exchange Control
Permit at least thirty (30) days prior to its expiration. 

 

(w)          Insurance.
Borrower and Parent shall each (i) keep its assets which are of an insurable character insured (to the extent and for the time
periods consistent with or greater than normal industry standards) by financially sound and reputable insurers against loss or
damage by fire, explosion, theft, terrorism or other hazards which are included under extended coverage in amounts not less than
the replacement value of the property insured, and Borrower shall maintain with financially sound and reputable insurers, insurance
against other hazards and risks and liability to Persons and property (including officers and directors liability coverage) to
the extent and in the manner consistent or greater than normal industry standards, (ii) within thirty (30) days of the date hereof,
provide to the Bank copies of its insurance policies evidencing to the reasonable satisfaction of the Bank that endorsements have
been made to such policies adding the Bank as additional insured and/or lender’s loss payee, as applicable, and (iii) within
ten (10) business days of the date hereof, provide to the Bank certificates of insurance reasonably satisfactory to the Bank with
respect to all existing insurance coverage, which certificates shall name the Bank as additional insured and/or lender’s
loss payee, as applicable (including, without limitation, naming the Bank as additional insured under any umbrella policy), and
shall evidence the Borrower’s compliance with this Section 4(w) with respect to all insurance coverage existing as of the
date hereof. Borrower shall maintain at all times life insurance insuring the life of Judith Rikpa in an amount at least equal
to $10,000,000 issued by an insurer acceptable to the Bank and the proceeds of such policy shall have been assigned to the Bank.

 

    	10

    	 

    

 

(x)          Acquisition
Agreement Amendments. Neither Borrower nor Parent shall waive or otherwise modify any term of the Acquisition Agreement, except
for those that do not materially affect the rights and privileges of any of Borrower or Parent and do not materially affect the
interests of the Bank under the Loan Documents or in the Collateral.

 

(y)          Retail
Stores. Neither Borrower nor any Subsidiary of Borrower shall establish or acquire a Retail Store.

 

5.          Miscellaneous

 

Capitalized terms not
defined in this Letter Agreement shall have the meaning ascribed thereto in the Promissory Note. As used herein, the following
terms shall have the following meanings: “Acquisition” means the acquisition of all or substantially all of
the intellectual property assets of Sellers pursuant to the terms of the Acquisition Agreement. “Acquisition Agreement”
shall mean the Asset Purchase Agreement dated as of April 1, 2014 among Parent, Borrower and Sellers. “Books and Records”
shall mean all books, records, board minutes, contracts, licenses, insurance policies, environmental audits, business plans, files,
computer files, computer discs and other data and software storage and media devices, accounting books and records, financial statements
(actual and pro forma), filings with Governmental Authorities and any and all records and instruments relating to the collateral
securing the Term Loan or otherwise necessary or helpful in the collection thereof or the realization thereupon. “Capital
Expenditures” shall mean all payments or accruals (including obligations under capital leases) for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have a useful life of more than one year and that are
required to be capitalized under GAAP. “Cash Flow From Operations” shall mean as respects Borrower, cash flow
from operations as determined in accordance with GAAP. “EBITDA of Borrower” shall mean, for any period for Borrower
(without duplication), an amount equal to (a) Net Income (Loss) for Borrower for such period before Parent Allocable Expenses,
minus, (b) to the extent included in calculating Net Income (Loss) for Borrower, the sum of, without duplication, (i) interest
income (whether cash or non-cash) for such period, (ii) income tax credits for such period, (iii) gain from extraordinary
or non-recurring items for such period (including, without limitation, non-cash items related to purchase accounting) and (iv)
deferred compensation payments (regardless of when accrued), plus (c) the following to the extent deducted in calculating
such Net Income (Loss), (i)  interest charges for such period, (ii) the provision for all federal, state, local and foreign
taxes payable for such period and the amount of permitted payments in Section 4(o)(iii) deducted in calculating Net Income (Loss),
(iii) the amount of depreciation and amortization expense for such period, (iv) the transaction fees, costs and expenses incurred
in connection with the negotiation and execution of this Letter Agreement and the other Loan Documents and any amendments hereto
or thereto and in connection with the transactions contemplated by the Acquisition, (v) all other extraordinary or non-recurring
non-cash charges (including, without limitation, non-cash items related to purchase accounting), (vi) deferred management salaries
(accrued but not paid) and (vii) all non-cash compensation (including without limitation, stock or equity compensation) in such
period. “EBITDA of Parent” shall mean, for any period for Parent and its Subsidiaries on a consolidated basis
(without duplication), an amount equal to (a) Net Income (Loss) for Parent and its Subsidiaries on a consolidated basis for such
period, minus, (b) to the extent included in calculating Net Income (Loss) for Parent and its Subsidiaries on a consolidated
basis, the sum of, without duplication, (i) interest income (whether cash or non-cash) for such period, (ii) income tax credits
for such period, (iii) gain from extraordinary or non-recurring items for such period (including, without limitation, non-cash
items related to purchase accounting) and (iv) deferred compensation payments (regardless of when accrued), plus (c) the
following to the extent deducted in calculating such Net Income (Loss), (i)  interest charges for such period, (ii) the
provision for all federal, state, local and foreign taxes payable for such period and the amount of permitted payments in Section
4(o)(iii) deducted in calculating Net Income (Loss), (iii) the amount of depreciation and amortization expense for such period,
(iv) the transaction fees, costs and expenses incurred in connection with the negotiation and execution of this Letter Agreement
and the other Loan Documents and any amendments hereto or thereto and the transactions contemplated by the Acquisition, (v) all
other extraordinary or non-recurring non-cash charges (including, without limitation, non-cash items related to purchase accounting),
(vi) deferred management salaries (accrued but not paid) and (vii) all non-cash compensation (including without limitation, stock
or equity compensation) in such period. “Encumbrance” shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever (including without limitation, any conditional
sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing)
or any options or rights of first refusal with respect to securities, or any shareholders or stockholders agreement or arrangement
of any kind or nature whatsoever. “Excess Cash Flow” shall mean (without duplication), for any fiscal period,
Cash Flow from Operations for such period less (a) Capital Expenditures not made through the incurrence of indebtedness less (b)
all cash interest and principal (including indebtedness owed to the Bank) paid or payable during such period less (c) the portion
of the Holdback Amount paid or payable during such period less (d) all Tax Distributions made during such period. “Exchange
Control Permit” shall mean any permit or license issued by a Governmental Authority outside the United States under which
any Party is permitted (a) to incur and pay any of the Liabilities in the United States in any currency(ies) in which denominated
or (b) to enter into, incur and/or perform any other obligation or Loan Document. “Expense Distributions” shall
have the meaning given to such term in Section 4(o). “Fixed Charge Coverage Ratio” shall mean for any period,
as respects any Person, the ratio of (a) EBITDA of such Person for such period plus Liquid Assets minus Capital Expenditures of
such Person to (b) the Fixed Charges for such period. “Fixed Charges” shall mean for any period, as respects
any Person, the sum of (a) the cash interest expense of such Person for such period, (b) the principal amount of total debt of
such Person having a scheduled due date during such period (excluding the payment of the Holdback Amount), (c) all Tax Distributions
and (d) all other cash distributions or dividends made by such Person. “GAAP” shall mean generally accepted
accounting principles in the United States of America in effect from time to time consistently applied (except for accounting changes
in response to FASB releases or other authoritative pronouncements). “Holdback Amount” shall mean collectively,
the Initial Holdback Amount and the Second Holdback Amount. “Initial Holdback Amount” shall mean an amount equal
to $1,000,000. “JR Advance” shall mean the advance payment in the amount of $1,000,000 made to Borrower on the
date of this Agreement pursuant to the JR Agreement which amount shall be comprised of an advance payment of $800,000 toward the
payment of the guaranteed minimum royalties and an advance payment of $200,000 toward the payment of the guaranteed minimum advertisement
royalties. “JR Agreement” shall mean the Trademark License Agreement dated as of April 1, 2014 between Borrower
and JR Jewelery, LLC. “Letter Agreement” shall mean this letter agreement, as may be amended, restated, supplemented
or otherwise modified from time to time. “Licenses” shall have the meaning assigned to such term in the IP Security
Agreement. “Liquid Assets” shall mean (a) assets (which are unencumbered except as permitted pursuant to the
terms of the Loan Documents) in the form of cash and cash equivalents consisting of certificates of deposit and money market funds
issued by a commercial bank having net assets of not less than $500 million less (b) the amount of any Encumbrances thereon
and any unsatisfied judgment, writ, order of attachment, levy or garnishment entered or issued against Borrower, Parent or any
of its Subsidiaries. “Net Income (Loss)” shall mean with respect to Borrower and for any period, the aggregate
net income (or loss) after taxes for such period, determined in accordance with GAAP but excluding for all purposes (a) net income
of minority-owned Subsidiaries (except to the extent of net income distributed or representing a management fee or other similar
fee), (b) the net income of any Subsidiary to the extent that the declaration of dividends or similar distributions of such income
is not permitted by the organizational documents of such Subsidiary or by operation of law, (c) unrealized gains or losses due
solely to fluctuations in currency values, (d) earnings (or losses) resulting from my revaluation or write-up or write-down of
assets and (d) unrealized gains or losses under all interest rate or currency forwards, options, swaps, caps or collar agreements,
foreign exchange agreements, commodity contracts or similar arrangements entered into by Borrower providing for protection against
fluctuations in interest rates, currency exchange rates, commodity prices, or the exchange of nominal interest obligations, either
generally or under specific contingencies. “Net Worth” shall mean, as at any date of determination an amount
equal to (a) all of the assets of Parent and its Subsidiaries on a consolidated basis that, in accordance with GAAP, are properly
classified as assets on such date, minus (b) all liabilities of Parent and its Subsidiaries on a consolidated basis that,
in accordance with GAAP, are properly classified as liabilities at such date. “Parent Allocable Expenses” shall
have the meaning given to such term in Section 4(n). “Person” shall mean any individual, partnership, corporation
(including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust,
limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority. “QVC
Advance” shall mean the advance payment in the amount of $1,500,000 made by QVC to Borrower on the date of this Agreement
pursuant to the QVC Agreement. “QVC Agreement” shall mean the License Agreement dated as of April 1, 2014 among
QVC Inc., Borrower, Parent, Judith Ripka Berk and Beth Vogel. “Rate Contracts” shall mean swap agreements and
any other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates.
“Retail Stores” shall mean retail store locations of Borrower or any Subsidiary of Borrower, but shall not include
e-commerce retail locations. “Revenue License” shall mean each License pursuant to which Borrower is entitled
to receive revenue from the licensee party thereto. “Royalty Revenue Amount” shall mean an amount equal to the
gross royalty revenue of Borrower for the immediately preceding fiscal year. “Second Holdback Amount” shall
mean an amount equal to $1,190,247.09. “Sellers” means collectively, Judith Ripka Creations Inc., Judith Ripka
Companies, Inc., Judith Ripka Designs, Ltd., JSB Marketing Corp. and Judith Ripka. “Stock” shall mean all certificated
and uncertificated shares, options, warrants, membership interests, general or limited partnership interests, participation or
other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term
is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended). “Subsidiary” shall mean, with respect to Parent and the Borrower,
a corporation, exempted company, partnership, exempted limited partnership, joint venture, limited liability company or other business
entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors
or other governing body are at the time beneficially owned by Parent or the Borrower, as the case may be. “Tax Distributions”
shall have the meaning given to such term in Section 4(o). “Taxes” shall mean any and all present or future
taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority,
including interest, additions to tax and penalties applicable thereto. “Trademark Licenses” shall have the meaning
assigned to such term in the IP Security Agreement.

 

    	11

    	 

    

 

Until the maturity
of the Term Loan and the payment in full of all obligations thereunder and all of Borrower’s obligations under the Loan Documents,
the Bank shall retain the security interests in the collateral granted under the Security Agreement and the Pledge Agreement and
the ability to exercise any and all rights and remedies available to it pursuant to the Loan Documents and applicable law.

 

No delay on the part
of the Bank in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver
thereof. The options, powers and rights of the Bank specified in the Loan Documents are in addition to those otherwise created
by law or under any other agreement between Borrower and the Bank. No amendment, modification or waiver of any provision of the
Loan Documents, nor consent to any departure by Borrower therefrom shall be effective, unless the same shall be in writing and
signed by the Bank. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given.
No consent to or demand on Borrower in any case shall, of itself, entitle it to any other or further notice or demand in similar
or other circumstances. This Letter Agreement and the other Loan Documents embody the entire agreement and understanding between
the Bank and Borrower with respect to the Term Loan and supersedes all prior agreements and understandings relating to the subject
matter hereof. In the event of any conflict between this Letter Agreement and any other Loan Document, this Letter Agreement shall
control and govern. Borrower agrees to pay all reasonable costs and expenses incurred or payable by the Bank in connection with
the documentation, administration and interpretation of the Loan Documents, including reasonable attorneys’ fees and disbursements.
Borrower agrees to pay all costs and expenses incurred or payable by the Bank in connection with the enforcement or collection
of the Loan Documents, including court costs and reasonable attorneys’ fees and disbursements. This Letter Agreement shall
be binding on Borrower and its successors and assigns, provided that Borrower shall not have the right to assign its rights hereunder
or thereunder or any interest herein or therein without the Bank’s prior written consent. This Letter Agreement shall be
governed by, and for all purposes shall be construed in accordance with, the laws of the State of New York. For purposes of any
action, suit or proceeding in connection with this Letter Agreement or any other credit document, Borrower and the Bank hereby
irrevocably submit to the jurisdiction of the courts of the State of New York and of the United States District Court for the Southern
District of New York and irrevocably agrees that any such action, suit or proceeding may be brought by any party in any such New
York or federal court and that a service of process may be made upon any party by mailing a copy of the summons to it, by registered
or certified mail, at its address set forth in the Note. Nothing herein shall affect the Bank’s right to commence legal proceedings
or otherwise proceed against Borrower in any other jurisdiction or to serve process in any other manner permitted by applicable
law. IN ANY SUCH ACTION, SUIT OR PROCEEDING THE PARTIES HERETO MUTUALLY WAIVE TRIAL BY JURY.

 

    	12

    	 

    

 

Section headings used
herein or in any other Loan Document are for convenience only and are not to affect the construction of or be taken into consideration
in interpreting this Letter Agreement or any other Loan Document.

 

This Letter Agreement
may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Letter Agreement by signing and delivering one or more counterparts. Any signature delivered by a party by facsimile
or electronic transmission (including email transmission of a PDF image) shall be deemed an original signature page hereto.

 

[remainder of page intentionally left blank]

 

    	13

    	 

    

 

Please indicate your
acknowledgment of, and agreement to, the foregoing by signing and returning the enclosed copy of this letter to the attention of
the Bank.

 

	 	Very truly yours,
	 	 
	 	BANK HAPOALIM B.M.
	 	 	 
	 	By:  	/s/ Mitchell Barnett
	 	 	Name: Mitchell Barnett
	 	 	Title: Senior Vice President, Middle Market Lending
	 	 	 
	 	By:	/s/ John Hetsko
	 	 	Name: John Hetsko
	 	 	Title: Vice President

 

Acknowledged and Agreed to:

 

	JR LICENSING, LLC	 
	 	 
	XCEL BRANDS, INC.,	 
	Its Manager	 
	 	 
	By:	/s/ James Haran	 
	 	Name: James Haran	 
	 	Title: CFO	 
	 	 	 
	XCEL BRANDS, INC.	 
	 	 	 
	By:	/s/ Robert D’Loren	 
	 	Name: Robert D’Loren	 
	 	Title:  CEO	 

 

SIGNATURE PAGE TO

LETTER AGREEMENT

    	 

    	 

    

  

Schedule I

 

to Letter Agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

LITIGATION

 

None

 

    	 

    	 

    

  

Schedule II

 

to Letter Agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

INDEBTEDNESS

 

Borrower may incur unsecured indebtedness
for trade payables in the ordinary course of business and payable on normal trade terms.

 

Subordinated Promissory Note in the principal
amount of $3,000,000 issued by Parent dated as of April 1, 2014 in favor of Judith Ripka Berk.

 

Subordinated Promissory Note in the principal
amount of $3,000,000 issued by Parent dated as of April 1, 2014 in favor of Judith Ripka Berk.

 

    	 

    	 

    

 

Schedule III

 

to Letter Agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

SUBSIDIARIES

 

None

 

    	 

    	 

    

 

Schedule IV

 

to Letter Agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

ENCUMBRANCES

 

None

 

    	 

    	 

    

 

Exhibit A

 

to letter agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

FORM OF COMPLIANCE CERTIFICATE

 

This Compliance Certificate
(this “Certificate”) is delivered pursuant to Section 3(a)(iii) of the Letter Agreement dated as of March [__],
2014 among Bank Hapoalim B.M., Xcel Brands, Inc. and JR Licensing, LLC (as amended, restated, supplemented or otherwise modified
from time to time, the “Letter Agreement”). All capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Letter Agreement and/or the Promissory Note.

 

I, the undersigned,
an authorized officer or Manager of Xcel Brands, Inc. and JR Licensing, LLC, do hereby certify pursuant to Section 3(a)(iii) of
the Letter Agreement that:

 

		1.	As of the date hereof, no Event of Default or event which
with the giving of notice or lapse of time, or both, would constitute an Event of Default has occurred and is continuing.

 

		2.	Since _____________ there has been no material adverse
change in the business, condition (financial or otherwise) or operations of Xcel Brands, Inc. or JR Licensing, LLC, and no event
or condition has occurred that might have had a material adverse effect on the legality, validity or enforceability of any of
the Loan Documents or the ability of Xcel Brands, Inc. or JR Licensing, LLC to perform its obligations thereunder.

 

		3.	Xcel Brands, Inc. and JR Licensing, LLC are in compliance
with the financial covenants set forth in Section 4 of the Letter Agreement. Attached to this Certificate as Annex A is
a covenant compliance worksheet reflecting the computation of such financial covenants as of the date and for the period covered
by the financial statements enclosed herewith. The information contained herein and in the attached financial information is true,
correct and complete as of the last day of the period and for the period covered by the financial statements enclosed herewith.

 

    	 

    	 

    

 

IN WITNESS WHEREOF I have affixed my signature as
of ___ day of _________ 20__.

 

	 	JR LICENSING, LLC
	 	 	 
	 	By:  	Xcel Brands, Inc.,
	 	 	Manager
	 	 	 
	 	By:	/s/ James Haran
	 	 	Name: James Haran
	 	 	Title: CFO
	 	 	 
	 	XCEL BRANDS, INC.
	 	 	 
	 	By:	/s/ Robert D’Loren
	 	 	Name: Robert D’Loren
	 	 	Title: CEO

 

    	 

    	 

    

 

ANNEX A

 

to Compliance Certificate

 

1.          Net
Worth as of ____________, 201__ is $_________________.

 

2.          Liquid
Assets as of __________, 201__ are $_________________.

 

3.          Fixed
Charge Coverage Ratio as of ____________, 201__ is ___ to 1.00.

 

4.          Capital
Expenditures for the fiscal year ending _____________, 201__ are $___________.

 

5.          EBITDA
of Parent for the fiscal year ending ___________, 201_ is $___________.

 

6.          EBITDA
of Borrower for the fiscal year ending ___________, 201_ is $___________.

 

    	 

    	 

    

 

Exhibit B

 

to letter agreement between Bank Hapoalim
B.M. and JR Licensing, LLC

 

FORM OF QUARTERLY ROYALTY COLLECTIONS
REPORT

 

[See Attached]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00229-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00229-of-00352.parquet"}]]