Document:

Exhibit 10.2

 

 

March 6, 2007

The Estée Lauder
Companies Inc.

767 Fifth Avenue

New York, NY 10153

Re:                               Enhanced  Overnight Share
Repurchase

Ladies and Gentlemen:

SECTION 1.  Initial Shares; Condition to
Effectiveness; Supplemental Terms Notice.

(a)                                  Subject
to satisfaction by The Estée Lauder Companies Inc., a Delaware corporation (the
“Company”), of the condition set forth
in Section 1(b), Bank of America, N.A. (the “Seller”)
will sell to the Company, and the Company will purchase from the Seller for
settlement on March 8, 2007 (the “Initial Settlement Date”),
at a purchase price (the “Purchase Price”)
equal to $750,000,000, a number of shares (the “Initial Shares”) of Class A common stock, par value $0.01 per
share, of the Company (the “Common Stock”)
equal to the Purchase Price divided by the official closing price on the New
York Stock Exchange per share of Common Stock (the “Relevant Closing Price”) on March 7, 2007 (the “Pricing Date”); provided that if the number of Initial Shares so determined
exceeds 20,000,000 (the “Maximum Initial
Shares”), then the Initial Shares shall be equal to the Maximum
Initial Shares, and the Purchase Price shall be the product of the Maximum
Initial Shares and the Relevant Closing Price. The Seller shall determine the
Initial Shares, the Relevant Closing Price and, if applicable, the Purchase
Price in the manner set forth above and shall deliver to the Company a closing
pricing supplement substantially in the form of Appendix C hereto (the “Closing Pricing Supplement”) no later than
10 a.m. New York City time on the Initial Settlement Date. Such sale shall be
effected in accordance with the Seller’s customary procedures.

(b)                                  The
effectiveness of the transactions contemplated by this Letter Agreement is
conditioned on the delivery by the Company to the Seller no later than the time
of the close of trading of the Common Stock on the New York Stock Exchange on
the Pricing Date of a representation letter substantially in the form of
Appendix D hereto (the “Representation Letter”).  If the Company does not so timely deliver
such a letter, this agreement (this “Letter
Agreement”) shall be cancelled and shall be of no further effect,
without any obligation by either party to the other except for the Seller’s
confidentiality obligation under Section 10(b).

(c)                                  Following
the Initial Period End Date, the Seller shall determine the Scheduled Final
Averaging Date, the Scheduled Earliest Acceleration Date, the Cap Price, and
the Initial Price in the manner set forth below and shall deliver to the
Company a supplemental terms notice substantially in the form of Appendix E
hereto, together with information detailing the data used 

in making such determinations (the “Supplemental
Terms Notice,” and together with the Closing Pricing Supplement, the
“Supplemental Documents”) within
two Business Days following the Initial Period End Date.

(d)                                  This
Letter Agreement, the Representation Letter, the Closing Pricing Supplement and
the Supplemental Terms Notice shall constitute a single agreement.

SECTION 2.  Definitions.

As
used in this Letter Agreement, the following terms shall have the following
meanings:

“Announcement Date” means the date of first public
announcement of any corporate event involving the Company or the Common Stock
that, in the determination of the Calculation Agent, is, as of such date, or
becomes at any date subsequent to such date but on or prior to the last day of
the Averaging Period, a Friendly Transaction, or the first date of public
announcement by the Company that the Company is engaged in discussions with
another party concerning a potential Friendly Transaction or is considering
strategic alternatives that, if consummated, would be or include a Friendly
Transaction (as determined by the Calculation Agent in its reasonable discretion).

“Averaging Period” means the period of
consecutive Trading Days commencing on the first Trading Day immediately
following the Initial Period End Date and ending on the Scheduled Final
Averaging Date; provided that the Seller may, in
its absolute discretion, accelerate the last day of the Averaging Period to any
Trading Day on or after the Scheduled Earliest Acceleration Date upon written
notice to the Company (it being understood that such notice may be given on the
same date that the Seller elects to be the last day of the Averaging Period,
but, for the avoidance of doubt, may not be given after such date).

“Average Purchase Price” means the arithmetic average of the
Daily Average Prices for all Trading Days during the Averaging Period.

“BAS” means Banc of America Securities LLC.

“Business Day” means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in The City of New
York.

“Calculation Agent” means BAS.

“Cap Fair Market Value” means the fair market value on the
Measurement Date, as determined by the Calculation Agent, of a call option,
written by the Seller, with a settlement amount equal to the excess, if any, of
(x) 2/3 multiplied by the
Repurchase Cost (calculated without regard to the proviso to the definition
thereof) over (y) 2/3 multiplied
by the Initial Shares multiplied
by the Cap Price, and a settlement date equal to the date that the Calculation
Agent, in its good faith reasonable discretion, as of the Measurement Date,
expects will be the last day of the Averaging Period.

“Cap Price” means the price per share specified as such in
the Supplemental Terms Notice, which shall be equal to 112.5% of the Initial
Price.

“Closing Pricing Supplement” has the meaning specified in
Section 1(a).

“Common Stock” has the meaning specified in
Section 1(a).

 2
 

“Company” has the meaning specified in
Section 1(a).

“Daily Average Price” means for any Trading
Day in the Initial Averaging Period, the Reported VWAP for such Trading Day,
and, for any Trading Day in the Averaging Period, the Reported VWAP for such
Trading Day minus the Daily Discount.

“Daily Discount” means the product of ***  basis points and the Relevant Closing Price.

“Designee” has the meaning specified in Section 16.

“Effectiveness Period” has the meaning
specified in Section 12(a).

“Exchange” means, at any time, the principal
national securities exchange or automated quotation system, if any, on which
the Common Stock is listed or quoted at such time.

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

“Federal Funds Rate” means, for any day, the rate on such day
for Federal Funds, as published by Bloomberg and found by pressing the
following letters “FEDSOPEN” followed by pressing the <Index> key and
pressing the following letters “HP” followed by pressing the <Go> key; provided that if any such day is not a New York Banking Day,
the Federal Funds Rate for such day shall be the Federal Funds Rate for the
immediately preceding New York Banking Day.

“Friendly Transaction” means any Merger Event or Tender Offer
that is approved, agreed to or recommended by the Company or its board of
directors, or negotiated by the Company or any authorized representative of the
Company, including without limitation (i) any transaction involving the merger
of the Company with or into any third party and (ii) any transaction in which
the Company or its board of directors has a legal obligation to make a
recommendation to its shareholders in respect of such transaction (whether
pursuant to Rule 14e-2 under the Exchange Act or otherwise) and does not
recommend that its shareholders reject such transaction.

“Initial Averaging Period” means the period
of consecutive Trading Days commencing on the Initial Settlement Date and
ending on March 29, 2007 (or if such date is not a Trading Day, the next
following Trading Day); provided that
the Seller may, in its absolute discretion, accelerate the last day of the
Initial Averaging Period to any Trading Day on or after March 23, 2007 upon
written notice to the Company (it being understood that such notice may be
given on the same date that the Seller elects to be the last day of the Initial
Averaging Period, but, for the avoidance of doubt, may not be given after such
date).

“Initial Period End Date” means the last day
of the Initial Averaging Period.

“Initial Price” means
the arithmetic average of the Daily Average Prices for all Trading Days during
the Initial Averaging Period.

“Initial Settlement Date” has the meaning
specified in Section 1(a).

“Initial Shares” has the meaning specified
in Section 1(a).

“ISDA Definitions” means the 2002 ISDA Equity Derivatives
Definitions, as published by the International Swaps and Derivatives
Association, Inc.

“Letter Agreement” has the meaning specified inSection 1(b).

 3
 

“Make-Whole Payment Shares” has the meaning
specified in Section 5(c).

“Maximum Deliverable Number” means 25
million shares, subject to adjustment to account for any subdivision or
consolidation of the Common Stock by way of stock dividend or otherwise (or any
similar event having a dilutive or concentrative effect on the Common Stock).

“Maximum Initial Shares” has the meaning specified in Section
1(a).

“Measurement Date” means the tenth Business Day prior to the
Announcement Date.

“Merger Event” has the meaning specified in the ISDA
Definitions.  For purposes of the ISDA
Definitions, the Shares are shares of Common Stock, the Issuer is the Company,
the Merger Date shall be deemed to be the Announcement Date and the final
Valuation Date shall be deemed to be the last day of the Averaging Period.

“New York Banking Day” means any day except for a Saturday,
Sunday or a day on which the Federal Reserve Bank of New York is closed.

“Payment Shares” means Registered Payment
Shares, Restricted Payment Shares or Make-Whole Payment Shares.

“Potential Adjustment Event” has the meaning
specified in the ISDA Definitions. For purposes of the ISDA Definitions, the
Shares are shares of Common Stock, the Issuer is the Company, Section
11.2(e)(iii) is deemed to be deleted.

“Pricing Date” has the meaning specified in Section 1(a).

“Private Placement Agreement” has the
meaning specified in Section 6(b)(iii).

 “Purchase
Price” has the meaning specified in Section 1(a).

“Refund Shares” has the meaning specified in
Section 5(a)(i).

“Registered Payment Shares” has the meaning
specified in Section 5(a)(ii).

“Registration Statement” has the meaning
specified in Section 6(a)(i).

“Regulation M” means Regulation M under the
Exchange Act.

“Relevant Closing Price” has the meaning specified in Section
1(a).

“Relevant Period” means the period from the
date of this Letter Agreement to the last day of the Averaging Period.

“Remaining Scheduled Days” means the
scheduled number of Trading Days remaining in the Initial Averaging Period or
the Averaging Period as of the time of any suspension of the Initial Averaging
Period or Averaging Period, as the case may be.

“Reported VWAP” means, for any Trading Day, the Rule 10b-18
dollar volume weighted average price per share of Common Stock traded on the
New York Stock Exchange under the EL ticker for that Trading Day as reported on
Bloomberg Page “EL.N <Equity> AQR SEC” (or any successor thereto), or, in
the event such price is not so reported on such Trading Day for any reason, as
reasonably determined by the Calculation Agent.

 4
 

“Representation Letter”
has the meaning specified inSection 1(b).

“Repurchase Cost” means the product of (i) the Average
Purchase Price multiplied by (ii) the number of
Initial Shares; provided that if such product is
greater than the product of the Cap Price and the number of Initial Shares,
then the Repurchase Cost shall be the sum of (x) the Cap Price multiplied by 2/3 multiplied by the Initial Shares plus (y) the Repurchase Cost calculated
without regard to this proviso multiplied by
1/3.

“Requirements” has the meaning specified in Section 3(b).

“Restricted Payment Shares” has the meaning
specified in Section 5(a)(ii).

“Restricted Share Amount” means the quotient
of (i) the absolute value of the Settlement Amount divided by
(ii) the Restricted Share Value of a Restricted Payment Share.

“Restricted Share Value” means, with respect
to any Restricted Payment Shares or Make-Whole Payment Shares, 98% of the value
thereof per share to the Seller, determined by the Calculation Agent by
commercially reasonable means.

“Rule 10b-18” means Rule 10b-18 under the
Exchange Act.

“Scheduled Earliest Acceleration Date” means
the date specified as such in the Supplemental Terms Notice, which shall be the
date four months following the Initial Period End Date (or if such date is not
a Business Day, the next following Business Day).

“Scheduled Final Averaging Date” means the
date specified as such in the Supplemental Terms Notice, which shall be the
date seven months following the Initial Period End Date (or if such date is not
a Business Day, the next following Business Day).

“Securities Act” means the Securities Act of
1933, as amended.

“Seller” has the meaning specified in
Section 1(a).

“Seller’s Short Position” means, at any time, the number of
shares of Common Stock constituting the Seller’s theoretical net short position
in relation to the transactions contemplated by this Letter Agreement at such
time, as commercially reasonably determined by the Calculation Agent.

“Settlement Amount” means an amount equal to
(i) the Purchase Price minus (ii) the
Repurchase Cost.

“Settlement Balance” has the meaning
specified in Section 5(c).

“Settlement Day” means any day that is not a
Saturday, a Sunday or a day on which banking institutions or trust companies in
The City of New York are authorized or obligated by law or executive order to
close.  A Settlement Day “corresponds” to
a Trading Day if it is the day for settlement of regular way transactions for
equity securities entered into on the Exchange on that Trading Day.

“Share Amount” means, for any Trading Day, the quotient of
(i) the product of (A) the Valuation Fraction multiplied by (B) the absolute
value of the Settlement Amount, divided by (ii) 98% of the Daily Average Price
for that Trading Day.

 5
 

“Supplemental Document” has the meaning specified in Section
1(c).

“Supplemental Terms Notice” has the meaning specified in
Section 1(c).

“Tender Offer” has the meaning specified in the ISDA
Definitions.  For purposes of the ISDA
Definitions, the Issuer is the Company.

“Trading Day” means any day (i) other than a
Saturday, a Sunday or a day on which the Exchange is not open for business,
(ii) during which trading of any securities of the Company on any national
securities exchange has not been suspended and (iii) during which there has not
been, in the Calculation Agent’s commercially reasonable judgment, a material
limitation in the trading of Common Stock; provided
that, notwithstanding anything to the contrary in this Letter Agreement, if any
of the events enumerated in (ii) or (iii) above occurs during the Initial
Averaging Period or the Averaging Period, the Calculation Agent shall, if
appropriate in light of the time or times during the regular trading day that
such event occurred and was continuing, determine that such date is a Trading
Day only in part, in which case the Calculation Agent shall make commercially
reasonable adjustments to the number of Shares for which such day shall be a
Trading Day for purposes of determining the Initial Price or the Average
Purchase Price, as the case may be, and shall determine the Initial Price or
the Average Purchase Price, as the case may be, based on an appropriately
weighted average, determined in good faith and in a commercially reasonable
manner, instead of the arithmetic average described under “Initial Price” or
“Average Purchase Price” above.  Such
determination and adjustments will be based on, among other factors, the duration
of any such event described in (ii) or (iii) above and the trading volume,
historical trading patterns and price of the Common Stock.

“Valuation Fraction” means a fraction, the
numerator of which is one and the denominator of which is the number of Trading
Days in the Valuation Period.

“Valuation Period” means, in the case of settlement pursuant
to Section 5(a)(ii)(A), the period commencing on the first Trading Day
immediately following the final day of the Averaging Period or, if the Seller
determines that resale by it of Registered Payment Shares would constitute a
distribution for purposes of Regulation M, on the first Trading Day immediately
following the applicable “restricted period” (as defined under Regulation M),
measuring such restricted period from the final day of the Averaging Period
(provided that this delay in commencement of the Valuation Period shall not
apply in the event that the Registered Payment Shares constitute “excepted
securities” as defined in Rule 101(c) of Regulation M); or, in the case of
settlement pursuant to Section 5(a)(ii)(B), the period commencing on the first
Trading Day immediately following the final day of the Averaging Period and
ending on the date on which either the Settlement Balance is reduced to zero or
the aggregate number of Restricted Payment Shares and Make-Whole Payment Shares
equals the Maximum Deliverable Number. 
In the case of settlement pursuant to Section 5(a)(ii)(A), the number of
Trading Days in the Valuation Period shall be determined by the Seller in its
discretion and notified to the Company by the Seller prior to the commencement
of the Valuation Period.  For the
avoidance of doubt, if the Settlement Amount is greater than zero or if the
Company elects to make a cash payment pursuant to Section 5(a)(ii)(C), there
will be no Valuation Period.

SECTION 3.  Seller Purchases.

(a)                                  The
Initial Shares may be sold short to the Company.  It is understood that during the period from
the first Trading Day immediately following the Initial Settlement Date to the
last day of the Averaging Period the Seller may purchase shares of Common Stock
in connection with this Letter Agreement, which shares may be used to cover all
or a portion of such short sale.  Such
purchases will be conducted independently of the Company.  The timing of such purchases by the 

 6
 

Seller, the number of shares purchased by the Seller
on any day, the price paid per share of Common Stock pursuant to such purchases
and the manner in which such purchases are made, including without limitation
whether such purchases are made on any securities exchange or privately, shall
be within the absolute discretion of the Seller.  It is the intent of the parties that this
transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the
Exchange Act, and the parties agree that this Letter Agreement shall be
interpreted to comply with the requirements of Rule 10b5-1(c), and the Company
shall take no action that results in this transaction not so complying with
such requirements. Without limiting the generality of the preceding sentence,
the Company acknowledges and agrees that (A) the Company does not have, and
shall not attempt to exercise, any influence over how, when or whether the
Seller effects any purchases of Common Stock in connection with this Letter
Agreement, (B) during the Relevant Period, if any, neither the Company nor its
officers or employees shall, directly or indirectly, communicate any material
nonpublic information regarding the Company or the Common Stock that is not
publicly disclosed at or prior to 8 a.m. New York City time on the Pricing Date
to any employee of the Seller or its affiliates responsible for trading the
Common Stock in connection with the transactions contemplated hereby, (C) the
Company is entering into this Letter Agreement in good faith and not as part of
a plan or scheme to evade compliance with federal securities laws including,
without limitation, Rule 10b-5 promulgated under the Exchange Act and (D)
the Company will not alter or deviate from this Letter Agreement or enter into
or alter a corresponding hedging transaction with respect to the Common
Stock.  The Company also acknowledges and
agrees that any amendment, modification, waiver or termination of this Letter
Agreement must be effected in accordance with the requirements for the
amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the
Exchange Act.  Without limiting the
generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such
amendment, modification, waiver or termination shall be made at any time at
which the Company or any officer or director of the Company is aware of any
material nonpublic information regarding the Company or the Common Stock.

(b)                                  In
the event that the Seller, in its reasonable discretion, determines that it is
appropriate with regard to any legal, regulatory or self-regulatory
requirements or related policies and procedures (whether or not such
requirements, policies or procedures are imposed by law or have been
voluntarily adopted by the Seller, and including without limitation Rule
10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Exchange Act,
and Regulation M, “Requirements”),
for the Seller to refrain from purchasing Common Stock or to purchase fewer
than the number of shares of Common Stock that the Seller would otherwise
purchase on any Trading Day during the Initial Averaging Period or the
Averaging Period, as the case may be, then the Seller may, in its discretion,
elect that the Initial Averaging Period or the Averaging Period, as the case
may be, be suspended as appropriate with regard to any Requirements, or that
any Trading Day in the Initial Averaging Period or the Averaging Period, as the
case may be, be deemed a Trading Day only in part, in which case the proviso to
the definition of “Trading Day” in Section 2 shall apply.  The Seller shall notify the Company upon the
exercise of the Seller’s rights pursuant to this Section 3(b) and shall
subsequently notify the Company on the day the Seller believes that the
circumstances giving rise to such exercise have changed.  If the Initial Averaging Period or the
Averaging Period is suspended by the Seller pursuant to this Section 3(b), at
the end of such suspension the Seller shall determine the number of Trading
Days remaining in the Initial Averaging Period or the Averaging Period, as the
case may be, which number shall not exceed the Remaining Scheduled Days as of
the time of such suspension.

(c)                                  The
Company agrees that neither the Company nor any of its affiliates or agents
shall take any action that would cause Regulation M to be applicable to any
purchases of Common Stock, or any security for which the Common Stock is a
reference security (as defined in Regulation M), by the Company or any of its
affiliated purchasers (as defined in Regulation M) 

 7
 

during the Relevant Period, unless the Company has
provided written notice to Seller of a planned “distribution” (as defined in
Regulation M) of shares of Common Stock or any security for which the Common
Stock is a reference security not later than the Trading Day immediately
preceding the first day of the relevant “restricted period” (as defined in
Regulation M); the Company acknowledges that the Seller has informed it that
any such notice is likely to cause a suspension of the Initial Averaging Period
or Averaging Period, as the case may be, pursuant to Section 3(b); accordingly,
the Company acknowledges that its delivery of such notice must be made in
accordance with the last two sentences of Section 3(a).

(d)                                  The
Company shall, no later than the Initial Settlement Date, notify the Seller of
the total number of shares of Common Stock purchased in Rule 10b-18 purchases
of blocks pursuant to the once-a-week block exception contained in Rule
10b-18(b)(4) by or for the Company or any of its affiliated purchasers during
each of the four calendar weeks preceding the Initial Settlement Date and
during the calendar week in which the Initial Settlement Date occurs (“Rule
10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as
defined in Rule 10b-18), which notice shall be substantially in the form set
forth as Appendix B hereto.

(e)                                  During
the Relevant Period, the Company shall (i) notify the Seller prior to the
opening of trading in the Common Stock on any day on which the Company makes,
or expects to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any merger, acquisition, or similar transaction
involving a recapitalization relating to the Company (other than any such
transaction in which the consideration consists solely of cash and there is no
valuation period), (ii) promptly notify the Seller following any such
announcement that such announcement has been made, and (iii) promptly deliver
to the Seller following the making of any such announcement a certificate
indicating (A) the Company’s average daily Rule 10b-18 purchases (as defined in
Rule 10b-18) during the three full calendar months preceding the date of the
announcement of such transaction and (B) the Company’s block purchases (as
defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18
during the three full calendar months preceding the date of the announcement of
such transaction.  In addition, the
Company shall promptly notify the Seller of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders.  The Company acknowledges
that any such public announcement may cause the Initial Averaging Period or the
Averaging Period, as the case may be, to be suspended pursuant to Section
3(b).  Accordingly, the Company
acknowledges that its actions in relation to any such announcement or
transaction must comply with the standards set forth in Section 3(a).

SECTION 4.  Company Purchases.

Without
the prior written consent of the Seller, the Company shall not, and shall cause
its affiliates and affiliated purchasers not to, directly or indirectly
(including, without limitation, by means of a cash-settled or other derivative
instrument), purchase, offer to purchase, place any bid or limit order that
would effect a purchase of, or commence any tender offer relating to, any
shares of Common Stock (or an equivalent interest, including a unit of
beneficial interest in a trust or limited partnership or a depository share) or
any security convertible into or exchangeable for shares of Common Stock during
the Relevant Period.  During such time,
any purchases of Common Stock (or any security convertible into or exchangeable
for shares of Common Stock) by the Company shall be made through BAS, which is
an affiliate of the Seller, pursuant to a letter substantially in the form of
Appendix A hereto and subject to such conditions as the Seller shall impose,
and shall be in compliance with Rule 10b-18 or otherwise in a manner that the
Company and the Seller believe is in compliance with applicable requirements
(including, without limitation, Rule 10b-5, Regulation 13D-G and Regulation 14E
under the Exchange Act); provided that
this Section 4 shall not apply to (i) privately negotiated purchases of Common
Stock (or any security convertible into or exchangeable for shares of Common
Stock) by an affiliate or affiliated 

 8
 

purchaser of the Company from another such affiliate
or affiliated purchaser; (ii) purchases of Common Stock pursuant to exercises
of stock options granted to affiliates or affiliated purchasers of the Company;
or (iii) purchases of Common Stock from holders of restricted stock units
granted by the Company to satisfy tax withholding requirements in connection
with vesting of those restricted stock units. 
For the avoidance of doubt, the receipt by affiliates or affiliated
purchasers of the Company of grants under any Company share plan shall not
constitute a purchase of Common Stock governed by this Section 4.  For purposes of this Section 4 the terms
“affiliate” and “affiliated purchaser” shall each be defined as in Rule 10b-18.

SECTION 5.  Purchase Price Adjustment and
Settlement.

(a)                                  After
the expiration of the Averaging Period,

(i)             if the Settlement
Amount is greater than zero, as an adjustment to the Purchase Price, the Seller
shall transfer to the Company, for no additional consideration, a number of
shares of Common Stock equal to the Settlement Amount divided by the Average
Purchase Price (the “Refund Shares”)
in the manner provided in Section 5(b), or

(ii)          if the Settlement Amount
is less than zero, as an adjustment to the Purchase Price, the Company shall
elect to

(A)      transfer to the Seller, for
no additional consideration, a number of shares of Common Stock, which will be
registered for resale in the manner set forth in Section 6(a), equal to the sum
of the Share Amounts for each of the Trading Days in the Valuation Period (the
“Registered Payment Shares”) in
the manner provided in Section 5(b),

(B)        transfer to the Seller,
for no additional consideration, a number of shares of Common Stock, which will
not be registered for resale, equal to the Restricted Share Amount (the “Restricted Payment Shares”) on the Settlement Day
corresponding to the last Trading Day of the Averaging Period in the manner
provided in Section 5(b), and any Make-Whole Payment Shares as provided in
Section 5(c), or

(C)        make a cash payment to the
Seller in immediately available funds in an amount equal to the absolute value
of the Settlement Amount on the Settlement Day corresponding to the last
Trading Day of the Averaging Period.

The Company shall give written notice to the Seller not later than the
later of (i) three Trading Days prior to the then scheduled last Trading Day of
the Averaging Period or (ii) the third Trading Day after receiving notice of
acceleration of the Averaging Period from the Seller, of the Company’s
election, if the Settlement Amount is less than zero, for the Company to
deliver Registered Payment Shares, to deliver Restricted Payment Shares, or to
make a cash payment.  Once made, such
election will be irrevocable.  If the
Company fails to make such an election by the election deadline, the Company
shall have been deemed to have elected to make a cash payment.  If the Company elects to deliver Registered
Payment Shares or Restricted Payment Shares pursuant to this Section 5(a)(ii), the
Calculation Agent shall have the right to adjust the Settlement Amount to
compensate the Seller for its cost of funds at a rate of 5.50% per annum with
respect to such costs during the Valuation Period.

 9
 

(b)                        Delivery
of Refund Shares, Registered Payment Shares or Restricted Payment Shares shall
be made as follows:

(i)             if Refund Shares are
to be transferred to the Company, the Seller shall deliver the shares to the
Company on the Settlement Day corresponding to the last Trading Day of the
Averaging Period,

(ii)          if Registered Payment
Shares are to be transferred to the Seller, on each Settlement Day
corresponding to each Trading Day in the Valuation Period, the Company shall
deliver to the Seller a number of Registered Payment Shares equal to the Share
Amount for such Trading Day and

(iii)       if Restricted Payment
Shares are to be transferred to the Seller, on the Settlement Day corresponding
to the last Trading Day of the Averaging Period, the Company shall deliver to
the Seller a number of Restricted Payment Shares equal to the Restricted Share Amount,
and the Company shall deliver any additional Make-Whole Payment Shares as
provided in Section 5(c).

(c)                        If
Restricted Payment Shares are delivered in accordance with Section 5(b)(ii), on
the last Trading Day of the Averaging Period a balance (the “Settlement Balance”) shall be established
with an initial balance equal to the absolute value of the Settlement
Amount.  Following the delivery of
Restricted Payment Shares or any Make-Whole Payment Shares, Seller shall sell
all such Restricted Payment Shares or Make-Whole Payment Shares in a
commercially reasonable manner.  At the
end of each Trading Day upon which sales have been made, the Settlement Balance
shall be reduced by an amount equal to 98% of the aggregate proceeds received
by Seller upon the sale of such Restricted Payment Shares or Make-Whole Payment
Shares.  If, on any Trading Day, all
Restricted Payment Shares and Make-Whole Payment Shares have been sold and the
Settlement Balance has not been reduced to zero, the Company shall (i) deliver
to Seller or as directed by Seller on the Settlement Day corresponding to such
Trading Day an additional number of Shares (the “Make-Whole Payment Shares”) equal to (x) the Settlement
Balance as of such Trading Day divided by (y) the Restricted Share Value of the
Make-Whole Payment Shares or (ii) promptly deliver to Seller cash in an amount
equal to the then remaining Settlement Balance. 
This provision shall be applied successively until either the Settlement
Balance is reduced to zero or the aggregate number of Restricted Payment Shares
and Make-Whole Payment Shares equals the Maximum Deliverable Number.  Seller shall not reduce the Settlement
Balance below zero, and shall return to the Company any Restricted Payment Shares
or Make-Whole Payment Shares that remain after the Settlement Balance has been
reduced to zero.

SECTION 6.  Payment Shares.

(a)                        The
Company may only deliver Registered Payment Shares pursuant to Section
5(a)(ii)(A) subject to satisfaction of the following conditions:

(i)             a registration statement
covering public resale of the Registered Payment Shares by the Seller (the “Registration Statement”) shall have been
filed with, and declared effective by, the Securities and Exchange Commission
under the Securities Act on or prior to the last Trading Day of the Averaging
Period, and no stop order shall be in effect with respect to the Registration
Statement; a printed prospectus relating to the Registered Payment Shares
(including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to the Seller, in such
quantities as the Seller shall reasonably have requested, on or prior to the
last Trading Day of the Averaging Period;

 10
 

(ii)          the form and content of
the Registration Statement and the Prospectus (including, without limitation,
any sections describing the plan of distribution) shall be reasonably
satisfactory to the Seller;

(iii)       the Seller and its agents,
including BAS, shall have been afforded a reasonable opportunity to conduct a
due diligence investigation with respect to the Company customary in scope for
underwritten offerings of equity securities and the results of such
investigation are reasonably satisfactory to the Seller, in its discretion; and

(iv)      as of the last Trading Day
of the Averaging Period, an agreement (the “Transfer
Agreement”) shall have been entered into with the Seller in
connection with the public resale of the Registered Payment Shares by the
Seller substantially similar to underwriting agreements customary for
underwritten offerings of equity securities, in form and substance commercially
reasonably satisfactory to the Seller, which Transfer Agreement shall include,
without limitation, provisions substantially similar to those contained in such
underwriting agreements relating to the indemnification of, and contribution in
connection with the liability of, the Seller and its affiliates and shall
provide for the payment by the Company of all reasonable fees and expenses in
connection with such public resale, including all reasonable fees and expenses of
counsel for the Seller.

If the Settlement Amount is less than zero and the Company has elected
to deliver Registered Payment Shares and any of the above conditions is not
satisfied as of the last Trading Day of the Averaging Period, the Company
shall, in lieu of delivery of Registered Payment Shares, make a cash payment to
the Seller in immediately available funds in an amount equal to the absolute
value of the Settlement Amount on the second Settlement Day following the end
of the Averaging Period and shall reimburse the Seller for all reasonable
out-of-pocket expenses it incurs in connection with due diligence and otherwise
in connection with the anticipated delivery of the Registered Payment Shares,
including, without limitation, the reasonable fees and expenses of outside
counsel to the Seller incurred in connection thereof.

(b)                        The
Company may only deliver Restricted Payment Shares pursuant to Section
5(a)(ii)(B) and Make-Whole Payment Shares pursuant to Section 5(c) subject to
satisfaction of the following conditions:

(i)             all Restricted
Payment Shares and Make-Whole Payment Shares shall be delivered to the Seller
(or any affiliate of the Seller designated by the Seller) pursuant to the
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof;

(ii)          BAS, the Seller and any
potential purchaser of any such shares from the Seller (or any affiliate of the
Seller designated by the Seller) identified by BAS or the Seller shall have
been afforded a commercially reasonable opportunity to conduct a due diligence
investigation with respect to the Company customary in scope for private
placements of equity securities (including, without limitation, the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them); and

(iii)       an agreement (a “Private Placement Agreement”) shall have
been entered into between the Company and the Seller (or any affiliate of the
Seller designated by the Seller) in connection with the private placement of
such shares by the Company to the Seller (or any 

 11
 

such affiliate) and the
private resale of such shares by the Seller (or any such affiliate),
substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially
reasonably satisfactory to the Seller, which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those contained
in such private placement purchase agreements relating to the indemnification
of, and contribution in connection with the liability of, the Seller and its
affiliates, and shall provide for the payment by the Company of all reasonable
fees and expenses in connection with such resale, including all fees and
expenses of counsel for the Seller, and shall contain representations,
warranties and agreements of the Company reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales. For the avoidance of
doubt, the Seller will enter into such a Private Placement Agreement with the
Company on commercially reasonable terms.

If the Settlement Amount
is less than zero and the Company has elected to deliver Restricted Payment
Shares and any of the above conditions is not satisfied as of the last Trading
Day of the Averaging Period and on each date when any Make-Whole Payment Shares
are to be delivered, the Company shall, in lieu of delivery of the Restricted
Payment Shares or such Make-Whole Payment Shares, as the case may be, make a
cash payment to the Seller in immediately available funds in an amount equal to
the absolute value of the Settlement Amount or the then remaining Settlement
Balance, as the case may be, in either case on the second Settlement Day
following the date when such delivery would have otherwise been required and
shall reimburse the Seller for all reasonable out-of-pocket expenses it incurs
in connection with the anticipated delivery of the Restricted Payment Shares or
the Make-Whole Payment Shares, including, without limitation, the reasonable
fees and expenses of outside counsel to the Seller incurred in connection
thereof.

(c)                        If the
Company elects to deliver Restricted Payment Shares pursuant to Section
5(a)(ii)(A) above, the Company shall not take or cause to be taken any action
that would make unavailable either (i) the exemption set forth in Section 4(2)
of the Securities Act for the sale of any Restricted Payment Shares or
Make-Whole Payment Shares by the Company to the Seller or (ii) an exemption
from the registration requirements of the Securities Act reasonably acceptable
to the Seller for resales of Restricted Payment Shares and Make-Whole Payment
Shares by the Seller.

(d)                        If the
Settlement Amount is less than zero and the Company elects to deliver
Registered Payment Shares pursuant to Section 5(a)(ii)(A) or Restricted Payment
Shares pursuant to Section 5(a)(ii)(A), then, if necessary, the Company shall
use its commercially reasonable efforts to cause the number of authorized but
unissued shares of Common Stock to be increased to an amount sufficient to
permit the Company to fulfill its obligations under Section 5 above.

(e)                        The
Company expressly acknowledges that the Company has the ability to publicly
disclose all material information relating to the Company.

(f)                          Notwithstanding
the provisions of Section 5(a) above, if the Company has elected to deliver any
Payment Shares hereunder, the Company shall not be required to deliver more
than the Maximum Deliverable Number of shares of Common Stock as Payment Shares
hereunder.

SECTION 7.  Adjustment of Terms.

(a)                        In the
event (i) of a Potential Adjustment Event, Merger Event or Tender Offer, (ii)
the Seller determines, in its commercially reasonable discretion, that it is
unable or it is impracticable, due to market illiquidity or illegality (as
determined in either case by the Seller in 

 12
 

good faith and a commercially reasonable manner), to establish,
re-establish, substitute or maintain a hedge of its position in respect of the
transactions contemplated by this Letter Agreement when such hedge is necessary
or customary in the normal course of the Seller’s business to hedge the price
and market risk of performance under this Letter Agreement, or (iii) the Seller
determines, in its commercially reasonable discretion, that it is unable to
borrow Common Stock at a rebate rate greater than or equal to the Federal Funds
Rate minus 50 basis points per
annum, then, in each case, the terms of the transaction (including, without
limitation, the number of Trading Days in the Averaging Period, any Daily
Average Price, the Cap Price and the Settlement Amount) described herein shall
be subject to adjustment by the Calculation Agent as in the exercise of its
good faith and commercially reasonable judgment it deems appropriate under the
circumstances (including, without limitation, adjustments to account for
changes in the price or volatility of the Common Stock following the
announcement of any such corporate event), provided that
no adjustment pursuant to this Section 7 shall eliminate any of the settlement
methods available to the Company in Section 5.

(b)                        In the
event that the Calculation Agent determines that an Announcement Date has
occurred, then, in addition to any adjustments effected pursuant to Section
7(a), (i) the definition of Repurchase Cost shall be amended by deleting the
proviso thereto, effective as of the Announcement Date, and (ii) if the Announcement
Date occurs during the Averaging Period, the Settlement Amount shall be
increased by an amount equal to the forward value on the last day of the
Averaging Period of the Cap Fair Market Value, as determined by the Calculation
Agent.

(c)                        Notwithstanding
the authority provided to the Calculation Agent in subsections (a) or (b)of
this Section 7, in the event of a corporate event (such as certain
reorganizations, mergers, or other similar events) in which all holders of
Common Stock may receive consideration other than the common equity securities
of the continuing or surviving entity, the adjustments referred to in such
subsection shall permit the Company to satisfy its settlement obligations
hereunder by delivering the consideration received by holders of Common Stock
upon such corporate event, in such proportions as in the exercise of its good
faith and commercially reasonable judgment the Calculation Agent deems
appropriate under the circumstances.

(d)                        In
making any adjustment pursuant to this Section 7, the Calculation Agent shall
not take into account (i) any dividend payments made by the Company for which
the ex-dividend date occurs or would have occurred during the Relevant Period
or (ii) Seller’s actual cost of funds or stock loan costs (it being understood
that the Calculation Agent may, however, consider prevailing interest rates,
stock loan rates and dividend rates as inputs for pricing models for the
purpose of calculating appropriate adjustments).

SECTION 8.  Governing Law; Waiver of Jury
Trial.

(a)                                  THIS LETTER AGREEMENT SHALL BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.  The parties hereto irrevocably submit to the
non-exclusive jurisdiction of the Federal and state courts located in the
Borough of Manhattan, in the City of New York in any suit or proceeding arising
out of or relating to this Letter Agreement or the transactions contemplated
hereby.

(b)                                 EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS LETTER AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 13
 

SECTION 9.  Assignment and Transfer.

The
rights and duties under this Letter Agreement may not be assigned or
transferred by the Company or the Seller without the prior written consent of
the other party, such consent not to be unreasonably withheld.

SECTION 10.  Confidentiality.

(a)                        The
Seller and the Company hereby acknowledge and agree that the Seller has
authorized the Company to disclose this Letter Agreement and the transactions
contemplated hereby to any and all persons, and there are no express or implied
agreements, arrangements or understandings to the contrary, and the Seller
hereby waives any and all claims to any proprietary rights with respect to this
Letter Agreement and the transactions contemplated hereby, and authorizes the
Company to use any information that the Company receives or has received with
respect to this Letter Agreement and the transactions contemplated hereby in
any manner.

(b)                        Seller
agrees to treat the amount of the Daily Discount confidential and not disclose
such amount to another party except as required by law (in which case Seller
shall inform the Company of such disclosure, to the extent that such a
notification is permitted by law).  The
provisions of this section 10(b) shall remain in effect until the seventh
anniversary of the date of this Letter Agreement.

SECTION 11.  Calculations.

The
Calculation Agent shall make all calculations, applying commercially reasonable
standards, in respect of this Letter Agreement.

SECTION 12.  Representations, Warranties
and Agreements of the Company.

The
Company represents and warrants to, and agrees with, the Seller as follows:

(a)                        The
Company shall cause the Registration Statement to remain effective under the
Securities Act for a period of time (the “Effectiveness
Period”) ending on the earlier of (i) 30 days immediately following
the date any Registered Payment Shares are delivered to the Seller pursuant to
Section 5(a)(ii)(A) and (ii) the date all such Registered Payment Shares have
been resold by the Seller pursuant to the Registration Statement.

(b)                        The
Company acknowledges and agrees that it is not relying, and has not relied,
upon the Seller or any affiliate of the Seller with respect to the legal,
accounting, tax or other implications of this Letter Agreement and that it has
conducted its own analyses of the legal, accounting, tax and other implications
hereof.  The Company further acknowledges
and agrees that neither the Seller nor any affiliate of the Seller has acted as
its advisor in any capacity in connection with this Letter Agreement or the
transactions contemplated hereby.  The
Company is entering into this Letter Agreement with a full understanding of all
of the terms and risks hereof (economic and otherwise), has adequate expertise
in financial matters to evaluate those terms and risks and is capable of
assuming (financially and otherwise) those risks. Without limiting the
generality of the foregoing, the Company acknowledges that the Seller is not
making any representations or warranties with respect to the treatment of the
transactions contemplated by this Letter Agreement under FASB Statements 133,
as amended, or 150, EITF Issue No. 00-19 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project.

 14
 

(c)                        The
Company has all corporate power and authority to enter into this Letter
Agreement and to consummate the transactions contemplated hereby.  This Letter Agreement has been duly
authorized and validly executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general equitable principles.

(d)                        If
Payment Shares are delivered pursuant to Section 5(a)(ii) or Section 5(c), such
Payment Shares, when delivered, shall have been duly authorized and shall be
duly and validly issued, fully paid and nonassessable and free of preemptive or
similar rights, and such delivery shall pass title thereto free and clear of
any liens or encumbrances.

(e)                        The
Company is not entering into this Letter Agreement to facilitate a distribution
of the Common Stock (or any security convertible into or exchangeable for Common
Stock) or in connection with a future issuance of securities, and the
transactions contemplated by this Letter Agreement will not violate Rule 13e-1
or 13e-4 under the Exchange Act.

(f)                          The
Company is not entering into this Letter Agreement to create actual or apparent
trading activity in the Common Stock (or any security convertible into or
exchangeable for Common Stock) or to raise or depress or otherwise manipulate
the price of the Common Stock (or any security convertible into or exchangeable
for Common Stock).

(g)                       The
execution and delivery by the Company of, and the compliance by the Company
with all of the provisions of, this Letter Agreement and the consummation of
the transactions herein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or any other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the Certificate
of Incorporation or By-laws or other constitutive documents of the Company or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties.

(h)                       The
Company is not, and after giving effect to the transactions contemplated
hereby, will not be, and “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

(i)                          On
the date of this Letter Agreement, the Initial Settlement Date and on each day
to and including the final day of the Averaging Period or Valuation Period, if
applicable, (i) the assets of the Company at their fair valuation exceed the
liabilities of the Company, including contingent liabilities, (ii) the capital
of the Company is adequate to conduct the business of the Company and (iii) the
Company has the ability to pay its debts and obligations as such debts mature
and does not intend to, or does not believe that it will, incur debt beyond its
ability to pay as such debts mature.

(j)                          Except
as contemplated by clause (j) below, no consent, approval, authorization,
order, registration, qualification or filing of or with any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties is required for the
execution and delivery by the Company of, and the compliance by the Company
with all the terms of, this Letter Agreement or the consummation by the Company
of the transactions contemplated hereby.

 15
 

(k)                      The
Company has made, and shall use its best efforts during the Averaging Period
and the Valuation Period (if any) to make, all filings, if any, required to be
made by it with the Securities and Exchange Commission, any securities exchange
or any other regulatory body with respect to the transactions contemplated
hereby.

(l)                          As
of the date, if any, that the Company elects to transfer any Payment Shares to
the Seller, (i) none of the Company and its executive officers and directors
will be aware of any material nonpublic information regarding the Company or
the Common Stock and (ii) all reports and other documents filed by the Company
with the Securities and Exchange Commission pursuant to the Exchange Act when
considered as a whole (with the more recent such reports and documents deemed
to amend inconsistent statements contained in any earlier such reports and
documents), do not or will not, as the case may be, contain any untrue
statement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.

(m)                    The
Company will disclose prior to the Initial Settlement Date its intention to
institute a program for the acquisition of shares of Common Stock.

(n)                       In the
event that the Seller or the Calculation Agent or any of their affiliates
becomes involved in any capacity in any action, proceeding or investigation
brought by or against any person in connection with the transactions by the
Company contemplated by this Letter Agreement, or any breach by the Company of
any representation, warranty, covenant or agreement included herein, the
Company shall reimburse the Seller or the Calculation Agent or such affiliate
for its reasonable legal and other out-of-pocket expenses (including the cost
of any investigation and preparation) incurred in connection therewith within
30 days of receipt of notice of such expenses, and shall indemnify and hold the
Seller or the Calculation Agent or such affiliate harmless on an after-tax
basis against any losses, claims, damages or liabilities to which the Seller or
the Calculation Agent or such affiliate may become subject in connection with
any such action, proceeding or investigation, except to the extent that any such
expenses, losses, claims, damages or liabilities result from the gross
negligence, willful misconduct bad faith or breach of the Seller or the
Calculation Agent of any of the representations, warranties, covenants or
agreements hereunder.  If for any reason
the foregoing indemnification is unavailable to the Seller or the Calculation
Agent or such affiliate or insufficient to hold it harmless, then the Company
shall contribute to the amount paid or payable by the Seller or the Calculation
Agent or such affiliate as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Seller or the
Calculation Agent or such affiliate on the other hand in the matters
contemplated by this Letter Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
on the one hand and the Seller or the Calculation Agent or such affiliate on
the other hand in the matters contemplated by this Letter Agreement but also
the relative fault of the Company and the Seller or the Calculation Agent or
such affiliate with respect to such losses, claims, damages or liabilities and
any other relevant equitable considerations. 
The relative benefits received by the Company, on the one hand, and the
Seller or the Calculation Agent or such affiliate, on the other hand, shall be
in the same proportion as the Purchase Price bears to any fees paid to Seller
hereunder.  The reimbursement, indemnity
and contribution obligations of the Company under this Section 12(n) shall be
in addition to any liability that the Company may otherwise have, shall extend
upon the same terms and conditions to the partners, directors, officers,
agents, 

 16
 

employees and controlling persons (if any), as the
case may be, of the Seller or the Calculation Agent and their affiliates and
shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Seller or the
Calculation Agent, any such affiliate and any such person.  The Company also agrees that neither the
Seller, the Calculation Agent nor any of such affiliates, partners, directors,
officers, agents, employees or controlling persons shall have any liability to
the Company for or in connection with any matter referred to in this Letter
Agreement except to the extent that any losses, claims, damages, liabilities or
expenses incurred by the Company result from the gross negligence, willful
misconduct or bad faith of the Seller or the Calculation Agent or a breach by
the Seller or the Calculation Agent of any of its covenants or obligations
hereunder.  The foregoing provisions
shall survive any termination or completion of this Letter Agreement.

(o)                        For
the avoidance of doubt, the parties agree that the commissions incorporated in
the definitions of Restricted Share Amount and Restricted Share Value and in Section
5(c) above are commercially reasonable fees for BAS’s activities in connection
with Settlement under Section 5.

(p)                        The
parties hereto agree and acknowledge that the Seller is a “financial
institution,”  “swap participant” and
“financial participant”  within the
meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United
States Code (the “Bankruptcy Code”).  The parties hereto further agree and
acknowledge that (A) this Letter Agreement is (i) a “securities contract,” as
such term is defined in Section 741(7) of the Bankruptcy Code, with respect to
which each payment and delivery hereunder or in connection herewith is a
“settlement payment” within the meaning of Sections 362 and 546 of the
Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in Section
101(53B) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “transfer” and a “payment or
other transfer of property” within the meaning of Sections 362 and 546 of the
Bankruptcy Code, and (B) the Seller is entitled to the protections afforded by,
among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 546(g),
555, 560 and 561 of the Bankruptcy Code.

(q)                        The
Company shall not declare or pay any dividend for which the ex-dividend date
occurs at any time during the Relevant Period.

(r)                        The
Company accepts and agrees to be bound by the contractual terms and conditions
as set forth in the Supplemental Documents. 
Upon receipt of a Supplemental Document, the Company shall promptly
review such Supplemental Document for accuracy and, if such Supplemental
Document is accurate, shall promptly execute and return such Supplemental
Document to the Seller; provided that
the Company’s failure to so execute and return such Supplemental Document shall
not affect the binding nature of such Supplemental Document, and the terms set
forth therein shall be binding on the Company to the same extent, and with the
same force and effect, as if the Company had executed a written version of such
Supplemental Document.

(s)                        The
Company and the Seller agree and acknowledge that (i) the transactions
contemplated by this Letter Agreement will be entered into in reliance on the
fact that this Letter Agreement and both Supplemental Documents form a single
agreement between the Company and the Seller, and the Seller would not
otherwise enter into such transactions, (ii) this Letter Agreement, as
supplemented by such Supplemental Documents, is a “qualified financial
contract”, as such term is defined in Section 5-701(b)(2) of the General
Obligations Law of New York (the “General Obligations Law”); (iii) each
Supplemental Document, regardless of whether such Supplemental Document is
transmitted electronically or otherwise, constitutes a “confirmation in writing
sufficient to indicate that a contract has been made between the parties”
hereto, as set forth in Section 5-701(b)(3)(b) of the General Obligations Law;
and (iv) this Letter Agreement constitutes a prior “written contract”, as set
forth in Section 5-701(b)(1)(b) of the General Obligations Law, and each party
hereto intends and agrees to be bound by this Letter Agreement, as supplemented
by the each of the Supplemental Documents.

 17
 

(t)                          The
Company and the Seller further agree and acknowledge that this Letter
Agreement, as supplemented by each Supplemental Document, constitutes a
contract “for the sale or purchase of a security”, as set forth in Section
8-113 of the Uniform Commercial Code of New York.

SECTION 13.  Representations, Warranties
and Agreements of the Seller.

The
Seller represents and warrants to, and agrees with, the Company as follows:

(a)                        The
Seller has all power and authority to enter into this Letter Agreement and to
consummate the transactions contemplated hereby.  This Letter Agreement has been duly
authorized and validly executed and delivered by the Seller and constitutes a
valid and legally binding obligation of the Seller, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general equitable principles.

(b)                        The
execution and delivery by the Seller of, and the compliance by the Seller with
all of the provisions of, this Letter Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or any other agreement or
instrument to which the Seller or any of its subsidiaries is a party or by
which the Seller or any of its subsidiaries is bound or to which any of the
property or assets of the Seller or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the constitutive
documents of the Seller or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Seller or any
of its subsidiaries or any of their respective properties.

(c)                        On the
date of this Letter Agreement, the Initial Settlement Date and on each day to
and including the final day of the Averaging Period or Valuation Period, if
applicable, (i) the assets of the Seller at their fair valuation exceed the
liabilities of the Seller, including contingent liabilities, (ii) the capital
of the Seller is adequate to conduct the business of the Seller and (iii) the
Seller has the ability to pay its debts and obligations as such debts mature
and does not intend to, or does not believe that it will, incur debt beyond its
ability to pay as such debts mature.

(d)          No consent,
approval, authorization, order, registration, qualification or filing of or
with any court or governmental agency or body having jurisdiction over the
Seller or any of its subsidiaries or any of their respective properties is
required for the execution and delivery by the Seller of, and the compliance by
the Seller with all the terms of, this Letter Agreement or the consummation by
the Seller of the transactions contemplated hereby.

SECTION 14.  Acknowledgments and Agreements
With Respect To Hedging and Market Activity.

(a)                              The Company acknowledges
and agrees that:

(i)                                 During
the Averaging Period and, if applicable, the Valuation Period, the Seller and
its affiliates may buy or sell shares of Common Stock or other securities or
buy or sell options or futures contracts or enter into swaps or other
derivative securities in order to adjust its hedge position with respect to the
transactions contemplated by this Letter Agreement;

 18
 

(ii)                              The Seller
and its affiliates also may be active in the market for the Common Stock other
than in connection with hedging activities in relation to the transactions
contemplated by this Letter Agreement;

(iii)                           The
Seller shall make its own determination as to whether, when or in what manner
any hedging or market activities in the Company’s securities shall be conducted
and shall do so in a good faith and commercially reasonable manner that it
deems appropriate to hedge its price and market risk with respect to the Daily
Average Price and Reported VWAP; and

(iv)                          Any market
activities of the Seller and its affiliates with respect to the Common Stock
may affect the market price and volatility of the Common Stock, as well as the
Daily Average Price and Reported VWAP, each in a manner that may be adverse to
the Company.

(b)                             Each of the Company and the
Seller agrees that Non-Reliance as set forth in Section 13.1 of the ISDA
Definitions, Agreements and Acknowledgments Regarding Hedging Activities as set
forth in Section 13.2 of the ISDA Definitions and Additional Acknowledgments as
set forth in Section 13.4 of the ISDA Definitions shall be deemed to be
Applicable to the transactions contemplated by this Letter Agreement as if this
Letter Agreement were a confirmation that was governed by, and incorporated,
such Sections of the ISDA Definitions.

SECTION 15.  Notices.

Unless
otherwise specified, notices under this contract may be made by telephone, to
be confirmed in writing to the address below. 
Changes to the notice information below must be made in writing.

(a)                                  If
to the Company:

The Estée Lauder
Companies Inc.

767 Fifth Avenue

New York, NY 10153

Attn:  Richard
W. Kunes

Telephone:  212-572-4429

Facsimile:  212-572-6787

and

The Estée Lauder
Companies Inc.

7 Corporate Center
Drive

Melville, NY 11747

Attn:  Terence
Stack

Telephone:  631-847-6200

Facsimile:  631-847-6215

 19
 

(b)                                 If
to the Seller:

Bank
of America, N.A

c/o
Banc of America Securities LLC

Equity
Financial Products

9 West 57th Street, 40th Floor

New
York, NY 10019

Telephone
No.:              212-583-8373

Facsimile No.:                      212-847-5124

SECTION 16.  Designation of Affiliate for
Transactions in Common Stock.

The
Seller may designate any of its affiliates (the “Designee”)
to deliver or take delivery, as the case may be, and otherwise perform its
obligations to deliver or take delivery of, as the case may be, any shares of
Common Stock in respect of the transactions contemplated by this Letter
Agreement, and the Designee may assume such obligations and the obligations of
the Seller under this Letter Agreement with respect to such shares of Common
Stock.  Such designation shall not
relieve the Seller of any of its obligations hereunder.  Notwithstanding the previous sentence, if the
Designee shall have performed the obligations of the Seller hereunder, then the
Seller shall be discharged of its obligations to the Company to the extent of
such performance.  In addition, the
parties acknowledge and agree that every time that the Seller is described in
this Letter Agreement as buying, selling or otherwise transacting with third
parties in the Common Stock, such buying, selling or transacting may be
conducted by the Seller or one or more of its affiliates.

SECTION 17.  Equity Rights.

The
Seller acknowledges and agrees that this Letter Agreement is not intended to
convey to it rights with respect to this transaction that are senior to the
claims of common stockholders in the event of the Company’s bankruptcy.  For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during the
Company’s bankruptcy to any claim arising as a result of a breach by the
Company of any of its obligations under this Letter Agreement.  For the avoidance of doubt, the parties
acknowledge that this Letter Agreement is not secured by any collateral that
would otherwise secure the obligations of the Company herein under or pursuant
to any other agreement.

 20
 

Please
confirm your agreement to the foregoing by signing and returning to us the
enclosed duplicate of this Letter Agreement.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER HUTMAKER

  
	
   

  	
   

  	
  Name: Christopher Hutmaker

  
	
   

  	
   

  	
  Title: Principal

  
	
   

  	
   

  
	
  Acknowledged and
  agreed to as of 

  the date first above written,

  	
   

  
	
   

  	
   

  
	
  THE ESTÉE LAUDER
  COMPANIES INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ TERENCE R.
  STACK

  	
   

  	
   

  
	
   

  	
  Name: Terence R. Stack

  	
   

  	
   

  
	
   

  	
  Title:Vice President—Corporate Treasurer

  	
   

  	
   

  

 

 21

APPENDIX
A

[Date]

The Estée Lauder Companies Inc.

767 Fifth Avenue

New York, NY  10153

Re:                               Enhanced  Overnight Share
Repurchase

Ladies and Gentlemen:

Reference
is made to the Overnight Share Repurchase Letter Agreement between you and Bank
of America, N.A. dated as of March 6, 2007 (the “Agreement”). 
Capitalized terms used without definition in this letter have the
definitions assigned to them in the Agreement.

In
accordance with Section 4 of the Agreement, the Seller agrees that Company may
purchase shares of Common Stock during the Relevant Period subject to the
following procedures:

(i)                       all such
purchases will be made by Banc of America Securities LLC (“BAS”) in accordance with Rule 10b-18(b) or
otherwise in a manner that Company and BAS believe is in compliance with
applicable requirements;

(ii)                    each purchase
order Company places with BAS will be an all or nothing order to purchase a
minimum of 10,000 shares;

(iii)                 Company will pay
to BAS a $0.02 per share commission for each share of Common Stock purchased;
and

(iv)                Company agrees
that, in purchasing shares of Common Stock, BAS may purchase shares of Common
Stock for the account of the Seller, which is an affiliate of BAS, other than
any single block of 10,000 or more shares of Common Stock, without your prior
consent; you acknowledge that, because any orders you place pursuant to the
above procedures will be all or nothing orders, other orders to purchase Common
Stock (including orders placed by the Seller or BAS) may reduce the number of
shares of Common Stock available for purchase and may therefore impact your
ability to obtain execution of any such all or nothing orders.

We
may terminate this letter agreement upon the effectiveness of any change in
applicable law or regulation that would cause the procedures set forth herein
to impede our ability to execute appropriate trading transactions in relation
to our obligations under the Agreement (including, without limitation, Section
3(a) of the Agreement) in a manner consistent with applicable law and regulation.

Please
indicate your agreement to, and acknowledgment of, the above by signing and
returning to us a copy of this letter.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BANC OF AMERICA
  SECURITIES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Acknowledged and
  agreed to as of

  the date first above written,

  	
   

  
	
   

  	
   

  
	
  THE ESTÉE LAUDER
  COMPANIES INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

APPENDIX
B

[Company
Letterhead]

Bank of America, N.A.

c/o Banc of America Securities LLC

9 W. 57th Street

New York, New York 10019

Attn: John Servidio

Re:                               Enhanced Overnight Share Repurchase

Ladies and Gentlemen:

In
connection with our entry into an Overnight Share Repurchase Letter Agreement
dated as of March 6, 2007 (the “Agreement”),
we hereby represent that set forth below is the total number of shares of our
common stock purchased by or for us or any of our affiliated purchasers in Rule
10b-18 purchases of blocks pursuant to the once-a-week block exception
contained in Rule 10b-18(b)(4) (all defined in Rule 10b-18 under the Securities
Exchange Act of 1934, as amended) during the four full calendar weeks
immediately preceding the Initial Settlement Date (as defined in the Agreement)
and the week during which the Initial Settlement Date occurs:

	
  

  	
   

  	
  Monday’s

  Date

  	
   

  	
  Friday’s

  Date

  	
   

  	
  Share

  Number

  	
   

  
	
  Week 4:

  	
   

  	
  02/05/07

  	
   

  	
  02/09/07

  	
   

  	
  0

  	
   

  
	
  Week 3:

  	
   

  	
  02/12/07

  	
   

  	
  02/16/07

  	
   

  	
  0

  	
   

  
	
  Week 2:

  	
   

  	
  02/19/07

  	
   

  	
  02/23/07

  	
   

  	
  0

  	
   

  
	
  Week 1:

  	
   

  	
  02/26/07

  	
   

  	
  03/02/07

  	
   

  	
  0

  	
   

  
	
  Current Week:

  	
   

  	
  03/05/07

  	
   

  	
  03/09/07

  	
   

  	
  0

  	
   

  

 

We
understand that you will use this information in calculating trading volume for
purposes of Rule 10b-18.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  THE ESTÉE LAUDER
  COMPANIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

APPENDIX
C

[Form of Closing Pricing Supplement]

Bank of America, N.A.

9 West 57th Street

New York,
New York 10019

[March 7, 2007]

The Estée Lauder Companies Inc.

767 Fifth Avenue

New York, NY  10153

Closing
Pricing Supplement – Overnight Share Repurchase

Ladies and Gentlemen:

Reference is made
to the Overnight Share Repurchase Letter Agreement dated as of March 6, 2007
(the “Agreement”) between The Estée Lauder
Companies Inc. (the “Company”) and
Bank of America, N.A. (the “Seller”).   Capitalized terms used in this Closing
Pricing Supplement and not otherwise defined shall have the meanings assigned
to them in the Agreement.

We hereby
acknowledge receipt of the Representation Letter dated [March 7], 2007 in
satisfaction of the condition set forth in Section 1(b) of the Agreement.

Please be advised
that the Calculation Agent has determined the following terms relating to the
Agreement:

	
  Relevant Closing Price:

  	
  U.S.
  $[                  ]
  per share

  
	
   

  	
   

  
	
  Initial Shares:

  	
  [                            ]

  
	
   

  	
   

  
	
  Purchase Price:

  	
  U.S.
  $[                            ]

  

 

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Receipt
  acknowledged,

  	
   

  
	
   

  	
   

  
	
  THE ESTÉE LAUDER
  COMPANIES INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

APPENDIX
D

[Company
Letterhead]

[March 7,
2007]

Bank of America, N.A.

c/o Banc of America Securities LLC

9 W. 57th Street

New York, New York 10019

Attn: John Servidio

Re:                               Enhanced Overnight Share Repurchase

Ladies and Gentlemen:

In
connection with our entry with you into an Overnight Share Repurchase Letter
Agreement dated as of March 6, 2007 (the “Agreement”),
we hereby represent that as of the date hereof, (i) none of the Company and its
officers and directors is aware of any material nonpublic information regarding
the Company or the Common Stock and (ii) all reports and other documents filed
by the Company with the Securities and Exchange Commission pursuant to the
Exchange Act when considered as a whole (with the more recent such reports and
documents deemed to amend inconsistent statements contained in any earlier such
reports and documents), do not or will not, as the case may be, contain any
untrue statement of a material fact or any omission of a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading.

This
letter is the Representation Letter referred to in Section 1(b) of the
Agreement.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  THE ESTÉE LAUDER
  COMPANIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

APPENDIX
E

[Form of Supplemental Terms Notice]

Bank of America, N.A.

9 West 57th Street

New York,
New York 10019

[date]

The Estée Lauder Companies Inc.

767 Fifth Avenue

New York, NY  10153

Supplemental
Terms Notice – Overnight Share Repurchase

Ladies and Gentlemen:

Reference is made
to the Overnight Share Repurchase Letter Agreement dated as of March 6, 2007
(the “Agreement”) between The Estée Lauder
Companies Inc. (the “Company”) and
Bank of America, N.A. (the “Seller”).   Capitalized terms used in this Supplemental
Terms Notice and not otherwise defined shall have the meanings assigned to them
in the Agreement.

Please be advised
that the Calculation Agent has determined the following terms relating to the
Agreement:

	
  Initial Period End Date:

  	
  [                              ]
  [to be the last day in the Initial Averaging Period]

  
	
   

  	
   

  
	
  Initial Price:

  	
  U.S.
  $[                  ]
  per share [to be the arithmetic average of the Daily Average Prices for all
  Trading Days in the Initial Averaging Period]

  
	
   

  	
   

  
	
  Cap Price:

  	
  U.S.
  $[                  ]
  per share [to be [   ]% of the Initial Price]

  
	
   

  	
   

  
	
  Scheduled Final
  Averaging Date:

  	
  [                              ]
  [to be the date seven months following the Initial Period End Date (or if
  such date is not a Business Day, the next following Business Day)]

  
	
   

  	
   

  
	
  Scheduled
  Earliest Acceleration Date:

  	
  [                              ]
  [to be the date four months following the Initial Period End Date (or if such
  date is not a Business Day, the next following Business Day)]

  

 

The data contained
in the attached excel spread sheets was used in determining the above.

\

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Receipt
  acknowledged,

  	
   

  
	
   

  	
   

  
	
  THE ESTÉE LAUDER
  COMPANIES INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:Exhibit
10.1

April 25,
2007

STOCK PURCHASE AGREEMENT

BY AND AMONG

OVERSTOCK.COM, INC.

(Seller)

OTRAVEL.COM, INC.

(Company)

and

CASTLES TRAVEL, INC.

(Buyer)

 

 

April 25, 2007

TABLE OF CONTENTS

	
  STOCK PURCHASE AGREEMENT

  	
   

  	
  1

  
	
  Article I Stock Purchase;
  Closing; Purchase Price

  	
   

  	
  1

  
	
  1.1.

  	
   

  	
  Stock Purchase

  	
   

  	
  1

  
	
  1.2.

  	
   

  	
  Determination of Purchase Price; Estimated Purchase
  Price

  	
   

  	
  1

  
	
  1.3.

  	
   

  	
  Definitions.

  	
   

  	
  2

  
	
  1.4.

  	
   

  	
  Determination of Final Purchase Price.

  	
   

  	
  8

  
	
  1.5.

  	
   

  	
  The Closing

  	
   

  	
  10

  
	
  Article II Representations and
  Warranties of the Company and Seller

  	
   

  	
  11

  
	
  2.1.

  	
   

  	
  Organization and Corporate Power

  	
   

  	
  11

  
	
  2.2.

  	
   

  	
  Capitalization

  	
   

  	
  12

  
	
  2.3.

  	
   

  	
  Subsidiaries; Investments

  	
   

  	
  12

  
	
  2.4.

  	
   

  	
  Authorization; No Breach

  	
   

  	
  12

  
	
  2.5.

  	
   

  	
  Governmental Authorization

  	
   

  	
  13

  
	
  2.6.

  	
   

  	
  Financial Statements

  	
   

  	
  13

  
	
  2.7.

  	
   

  	
  Absence of Undisclosed Liabilities

  	
   

  	
  13

  
	
  2.8.

  	
   

  	
  Accounts Receivable; Inventory

  	
   

  	
  14

  
	
  2.9.

  	
   

  	
  Product Warranty

  	
   

  	
  14

  
	
  2.10.

  	
   

  	
  Absence of Certain Developments

  	
   

  	
  14

  
	
  2.11.

  	
   

  	
  Assets

  	
   

  	
  16

  
	
  2.12.

  	
   

  	
  Tax Matters

  	
   

  	
  16

  
	
  2.13.

  	
   

  	
  Contracts and Commitments.

  	
   

  	
  18

  
	
  2.14.

  	
   

  	
  Intellectual Property Rights.

  	
   

  	
  20

  
	
  2.15.

  	
   

  	
  Litigation

  	
   

  	
  22

  
	
  2.16.

  	
   

  	
  Brokerage

  	
   

  	
  22

  
	
  2.17.

  	
   

  	
  Insurance

  	
   

  	
  22

  
	
  2.18.

  	
   

  	
  Labor Matters

  	
   

  	
  23

  
	
  2.19.

  	
   

  	
  Employee Benefits

  	
   

  	
  23

  
	
  2.20.

  	
   

  	
  Compliance with Laws; Permits; Prohibited Payments

  	
   

  	
  25

  
	
  2.21.

  	
   

  	
  Environmental and Safety Matters

  	
   

  	
  25

  
	
  2.22.

  	
   

  	
  Affiliate Transactions

  	
   

  	
  26

  
	
  2.23.

  	
   

  	
  Suppliers and Customers

  	
   

  	
  26

  
	
  2.24.

  	
   

  	
  Real Property.

  	
   

  	
  27

  
	
  2.25.

  	
   

  	
  Personal Property.

  	
   

  	
  27

  
	
  2.26.

  	
   

  	
  Product Liability

  	
   

  	
  28

  
	
  2.27.

  	
   

  	
  Bank Accounts

  	
   

  	
  28

  
	
  2.28.

  	
   

  	
  Disclosure

  	
   

  	
  28

  
	
  Article III Representations and
  Warranties of Seller

  	
   

  	
  28

  
	
  3.1.

  	
   

  	
  Power and Authority

  	
   

  	
  28

  
	
  3.2.

  	
   

  	
  Authorization; No Breach

  	
   

  	
  28

  
	
  3.3.

  	
   

  	
  Title to Shares

  	
   

  	
  29

  

 

 i
 

 

	
  3.4.

  	
   

  	
  Affiliate Transactions

  	
   

  	
  29

  
	
  3.5.

  	
   

  	
  Brokerage

  	
   

  	
  29

  
	
  3.6.

  	
   

  	
  Litigation, etc

  	
   

  	
  29

  
	
  Article IV Representations and
  Warranties of Buyer

  	
   

  	
  30

  
	
  4.1.

  	
   

  	
  Organization, Power and Authority

  	
   

  	
  30

  
	
  4.2.

  	
   

  	
  Authorization; No Breach

  	
   

  	
  30

  
	
  4.3.

  	
   

  	
  Brokerage

  	
   

  	
  30

  
	
  4.4.

  	
   

  	
  Litigation, etc

  	
   

  	
  30

  
	
  Article V Closing Deliveries

  	
   

  	
  31

  
	
  5.1.

  	
   

  	
  Deliveries by the Company and Seller

  	
   

  	
  31

  
	
  5.2.

  	
   

  	
  Deliveries by Buyer

  	
   

  	
  32

  
	
  Article VI Certain Covenants
  and Agreements

  	
   

  	
  32

  
	
  6.1.

  	
   

  	
  Transfer Taxes

  	
   

  	
  32

  
	
  6.2.

  	
   

  	
  Fees and Expenses

  	
   

  	
  32

  
	
  6.3.

  	
   

  	
  Non-Solicitation and Non-Competition

  	
   

  	
  33

  
	
  6.4.

  	
   

  	
  Seller Buy-Out Option.

  	
   

  	
  34

  
	
  6.5.

  	
   

  	
  Further Assurances

  	
   

  	
  34

  
	
  6.6.

  	
   

  	
  Merchant Credit Card Processing Account.

  	
   

  	
  35

  
	
  6.7.

  	
   

  	
  Employee Benefits Matters

  	
   

  	
  35

  
	
  6.8.

  	
   

  	
  Release of Company Employees.

  	
   

  	
  35

  
	
  Article VII Indemnification

  	
   

  	
  36

  
	
  7.1.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  36

  
	
  7.2.

  	
   

  	
  General Indemnification.

  	
   

  	
  36

  
	
  7.3.

  	
   

  	
  Limitations on Indemnification

  	
   

  	
  38

  
	
  7.4.

  	
   

  	
  Manner of Payment

  	
   

  	
  38

  
	
  7.5.

  	
   

  	
  Determination of Loss

  	
   

  	
  38

  
	
  7.6.

  	
   

  	
  Notice and Defense

  	
   

  	
  38

  
	
  7.7.

  	
   

  	
  Waiver

  	
   

  	
  39

  
	
  7.8.

  	
   

  	
  Purchase Price Adjustment

  	
   

  	
  39

  
	
  7.9.

  	
   

  	
  Sole Remedy

  	
   

  	
  39

  
	
  Article VIII Post-Closing
  Covenants and Agreements

  	
   

  	
  40

  
	
  8.1.

  	
   

  	
  Tax Matters

  	
   

  	
  40

  
	
  8.2.

  	
   

  	
  OTravel Mark

  	
   

  	
  41

  
	
  Article IX Miscellaneous

  	
   

  	
  41

  
	
  9.1.

  	
   

  	
  Press Release and Announcements

  	
   

  	
  41

  
	
  9.2.

  	
   

  	
  Remedies

  	
   

  	
  42

  
	
  9.3.

  	
   

  	
  Consent to Amendments; Waivers

  	
   

  	
  42

  
	
  9.4.

  	
   

  	
  Successors and Assigns

  	
   

  	
  42

  
	
  9.5.

  	
   

  	
  Severability

  	
   

  	
  42

  
	
  9.6.

  	
   

  	
  Counterparts

  	
   

  	
  43

  
	
  9.7.

  	
   

  	
  Descriptive Headings; Interpretation

  	
   

  	
  43

  

 

 ii
 

 

	
  9.8.

  	
   

  	
  Entire Agreement

  	
   

  	
  43

  
	
  9.9.

  	
   

  	
  No Third-Party Beneficiaries

  	
   

  	
  43

  
	
  9.10.

  	
   

  	
  Schedules and Exhibits

  	
   

  	
  43

  
	
  9.11.

  	
   

  	
  Governing Law

  	
   

  	
  43

  
	
  9.12.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  43

  
	
  9.13.

  	
   

  	
  Jurisdiction

  	
   

  	
  43

  
	
  9.14.

  	
   

  	
  Notices

  	
   

  	
  44

  
	
  9.15.

  	
   

  	
  No Strict Construction

  	
   

  	
  45

  
	
  9.16.

  	
   

  	
  Specific Performance

  	
   

  	
  45

  

 

 iii
 

EXHIBITS AND SCHEDULES

Exhibits

	
  Exhibit A

  	
  —

  	
  Form of Junior Seller Note

  
	
  Exhibit B

  	
  —

  	
  Net Working Capital

  
	
  Exhibit C

  	
  —

  	
  Form of Pledge Agreement

  
	
  Exhibit D

  	
  —

  	
  Form of Senior Seller Note

  
	
  Exhibit E

  	
  —

  	
  Opinions of the Company’s and Seller’s Counsel

  
	
  Exhibit F

  	
   

  	
  Form of Employment Agreement

  
	
  Exhibit G

  	
  —

  	
  Form of Transition Services Agreement

  
	
  Exhibit H

  	
  —

  	
  Form of License Agreement

  
	
  Exhibit I

  	
  —

  	
  Form of Assignment Agreement

  

 

Schedules (and Relevant Section References)

	
  Schedule 2.1

  	
  —

  	
  Qualifications

  
	
  Schedule 2.3

  	
  —

  	
  Subsidiaries, Investments

  
	
  Schedule 2.4

  	
  —

  	
  Consents

  
	
  Schedule 2.6

  	
  —

  	
  Financial Statements

  
	
  Schedule 2.7

  	
  —

  	
  Liabilities

  
	
  Schedule 2.9(a)

  	
  —

  	
  Product Warranty

  
	
  Schedule 2.9(b)

  	
  —

  	
  Product Recalls

  
	
  Schedule 2.10

  	
  —

  	
  Developments

  
	
  Schedule 2.11

  	
  —

  	
  Assets

  
	
  Schedule 2.12

  	
  —

  	
  Taxes

  
	
  Schedule 2.13

  	
  —

  	
  Contracts

  
	
  Schedule 2.14

  	
  —

  	
  Intellectual Property

  
	
  Schedule 2.15

  	
  —

  	
  Litigation

  
	
  Schedule 2.17

  	
  —

  	
  Insurance

  
	
  Schedule 2.18

  	
  —

  	
  Labor Matters

  
	
  Schedule 2.19

  	
  —

  	
  Employee Benefits

  
	
  Schedule 2.20(a)

  	
  —

  	
  Compliance

  
	
  Schedule 2.20(b)

  	
  —

  	
  Permits

  
	
  Schedule 2.21

  	
  —

  	
  Environmental

  
	
  Schedule 2.22

  	
  —

  	
  Affiliate Transactions

  
	
  Schedule 2.23

  	
  —

  	
  Suppliers and Customers

  
	
  Schedule 2.24(b)

  	
  —

  	
  Leased Property and Landlord Consents

  
	
  Schedule 2.25

  	
  —

  	
  Liens

  
	
  Schedule 2.27

  	
  —

  	
  Bank Accounts

  
	
  Schedule 0

  	
  —

  	
  Employment Agreements

  
	
  Schedule 5.1(j)

  	
  —

  	
  Surviving Affiliate Transactions

  

 

 iv

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of April 25,  2007, is entered into by and among
Overstock.com, Inc., a Delaware corporation (“Seller”), OTravel.com, Inc., a Utah corporation (the “Company”) and Castles Travel, Inc., a
Delaware corporation (“Buyer”).  Capitalized terms used herein and not
otherwise defined herein have the meanings given to such terms in Section
1.3 below.

WHEREAS, as of the date hereof, there are 21,577
shares of Class A common stock of the Company issued and outstanding (the “Shares”), all of which are owned by the
Seller.

WHEREAS, the parties to this Agreement desire that
Buyer, or its assigns, shall purchase the Shares from the Seller in exchange
for the Purchase Price.

NOW, THEREFORE, in consideration of the mutual
covenants, agreements and understandings herein contained, the receipt and
sufficiency of which is acknowledged, the parties hereto agree as follows:

Article I

Stock Purchase; Closing; Purchase Price

1.1.
Stock Purchase.  Subject to the
terms and conditions of this Agreement, at the Closing, Seller shall sell to
Buyer, and Buyer shall purchase from Seller, the Shares free and clear of all
Liens  and, in exchange, Buyer shall pay
the Purchase Price to Seller as set forth herein.

1.2.
Determination of Purchase Price; Estimated Purchase Price.

(a)   The
“Purchase Price”
shall be the Base Amount:

(i)            (x) if the Closing
Net Working Capital exceeds $1,500,000, then increased by the amount of such
excess, or (y) if the Closing Net Working Capital is less than $1,500,000, then
decreased by the amount of such shortfall;

(ii)           decreased by an
amount equal to the Closing Indebtedness, if any; and

(iii)          decreased by an
amount equal to the Unpaid Seller Expenses, if any.

(b)   Not
later than one business day and not more than five business days prior to the
Closing Date, Seller shall prepare, in consultation with Buyer, and deliver to
Buyer a preliminary statement setting forth, in reasonable detail, based upon
the books and records of the Company, Seller’s reasonable good faith
calculation of (i) the estimated Closing Net Working Capital (the “Estimated Closing Net Working Capital”),
(ii) the estimated Closing Indebtedness (the “Estimated
Closing Indebtedness”), (iii) the estimated Unpaid Seller
Expenses (the “Estimated Unpaid Seller
Expenses”) and (iv) Seller’s estimate of the Purchase 

Price (the “Estimated
Purchase Price”) based upon such items, in all cases which must
be reasonably acceptable to Buyer.

1.3.  Definitions.

For the purposes of this Agreement, the following
terms have the meanings set forth below:

“338(h)(10)
Election” has the meaning set forth in Section 8.1(a)(i).

“Adjustment
Amount” has the meaning set forth in Section 1.4(e).

“Adjustment
Statement” has the meaning set forth in Section 1.4(a).

“Accounting Firm”
has the meaning set forth in Section 1.4(c).

“Actual Value”
has the meaning set forth in Section 1.4(d).

“Affiliate”
of any particular Person means any other Person controlling, controlled by or
under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities,
contract or otherwise.

“Affiliated Group”
means any affiliated group as defined in Code §1504 that has filed a
consolidated return for U.S. federal income tax purposes (or any consolidated,
combined or unitary group under state, local or foreign law) for a period
during which any Company was a member.

“Affiliate Transactions”
has the meaning set forth in Section 3.4.

“Agreement”
has the meaning set forth in the preamble.

“Allocation”
has the meaning set forth in Section 8.1(a)(iii).

“Balance Sheet”
means the Company’s unaudited consolidated balance sheet as of December 31,
2006.

“Base Amount”
means $17,500,000.

“Bonus Pool” means the bonus pool
described in Section 4.2 of the Prior Stock Purchase Agreement as such bonus
pool has or may be amended.

“Buyer”
has the meaning set forth in the preamble.

“Buyer
Indemnified Parties” has the meaning set forth in Section 7.2(a).

“Cash Amount”
means the Estimated Purchase Price minus, (i) Junior Amount Seller Note Amount
and (ii) the Senior Seller Note Amount.

 2
 

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

“Closing”
has the meaning set forth in Section 1.5.

“Closing Date”
has the meaning set forth in Section 1.5.

“Closing
Indebtedness” means all Indebtedness of the Company as of
immediately prior to the Closing.

“Closing Net Working Capital”
means the Net Working Capital as of immediately prior to the Closing.

“COBRA”
has the meaning set forth in Section 2.19.

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

“Company”
has the meaning set forth in the preamble.

“Company
Affiliate Transactions” has the meaning set forth in Section
2.22.

“Company
Intellectual Property Rights” means all of the Intellectual
Property Rights owned, used or held for use by  the
Company and/or the Company’s Subsidiaries.

“Company Software”
has the meaning set forth in Section 2.14(h).

“Company Systems”
has the meaning set forth in Section 2.14(f).

“Consents”
has the meaning set forth in Section 5.1(b).

“Employee Benefit
Plan” has the meaning set forth in Section 2.19.

“Environmental and
Safety Requirements” shall mean all federal, state, local and
foreign statutes, regulations, ordinances and other provisions having the force
or effect of law, all judicial and administrative orders and determinations,
all contractual obligations and all common law, in each case concerning public
health and safety, worker health and safety and pollution or protection of the
environment.

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

“ERISA Affiliate”
has the meaning set forth in Section 2.19.

“Estimated
Closing Indebtedness” has the meaning set forth in Section
1.2.

“Estimated
Closing Net Working Capital” has the meaning set forth in Section
1.2.

“Estimated
Purchase Price” has the meaning set forth in Section 1.2.

 3
 

“Estimated Unpaid
Seller Expenses” has the meaning set forth in Section 1.2.

“Financial
Statements” has the meaning set forth in Section 2.6.

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

“Government
Entity” means individually, and “Government Entities” means the United States of America or
any other nation, any state or other political subdivision thereof, or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of government, including any court, in each case having jurisdiction
over the Company.

“High Value”
has the meaning set forth in Section 1.4(d).

“Indebtedness”
means at a particular time, without duplication, (i) any indebtedness for
borrowed money or issued in substitution for or exchange of indebtedness for
borrowed money of a Person, (ii) any indebtedness evidenced by any note, bond,
debenture or other debt security of a Person, (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise, (iv) any
commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement Liability with respect to letters
of credit), (v) any indebtedness guaranteed in any manner by a Person
(including, without limitation, guarantees in the form of an agreement to
repurchase or reimburse), (vi) any Liabilities under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which Liabilities a Person assures a
creditor against loss, (vii) any indebtedness secured by a Lien on the assets
of a Person, (viii) any Liability (including increase in obligations) of a
Person arising under any contract or arrangement to which such Person is party
arising in whole or in part from the transactions contemplated by this
Agreement, (ix) any unsatisfied obligation for “withdrawal liability” to a “multiemployer
plan” as such terms are defined under ERISA of a Person, (x) any obligations or
liability, whether contingent or otherwise, owed by a Person to any other
Person under any non-competition, consulting or similar arrangements,  and (xi) any change-of-control or similar
payment or increased cost of a Person which is triggered in whole or in part by
the transactions contemplated by this Agreement, together with, in each case
for items (i) through (xi) foregoing, interest, fees, prepayment obligations,
prepayment penalties or provisions requiring payment in excess of 100% of
principal and accrued interest if paid on the Closing Date; provided that “Indebtedness” shall not include trade
payables incurred by the Company or any of the Company’s Subsidiaries in the
ordinary course of business but will include any indebtedness arising under the
Bonus Pool.

“Indemnitee”
has the meaning set forth in Section 7.6.

“Indemnitor”
has the meaning set forth in Section 7.6.

“Intellectual Property Rights”
means any and all of the following in any jurisdiction throughout the world:
(i) patents, patent applications, patent disclosures and inventions
(whether or not patentable or reduced to practice), all improvements thereto as
well as any reissues, continuations, continuations-in-part, divisions,
revisions, extensions or 

 4
 

reexaminations thereof, (ii) trademarks, service
marks, certification marks, designs, trade dress, trade names, slogans, logos,
Internet domain names, telephone numbers and corporate names together with all
translations, adaptations, derivations, and ambinations thereof, and
registrations, applications for registration and renewals thereof, together
with all of the goodwill associated with (collectively “Marks”),
(iii) works of authorship (whether or not copyrightable), copyrights,
moral rights and registrations, applications for registration and renewals
thereof, (iv) computer software, data, databases, websites, firmware,
source code, executable code and documentation thereof, (v) trade secrets
and other confidential information (including, ideas, formulas, recipes,
compositions, research and development information, drawings, specifications,
designs, molds, plans, proposals, technical data, financial and marketing plans
and customer and supplier lists and information), (vi) all other
intellectual property and propriety rights, and (vii) all copies and tangible
embodiments of any of the foregoing (in whatever form or medium).

“Investment”
as applied to any Person means (i) any direct or indirect purchase or
other acquisition by such Person of any notes, obligations, instruments, stock,
securities or ownership interest (including partnership interests and joint
venture interests) of any other Person and (ii) any capital contribution
by such Person to any other Person.

“IRS” means
the Internal Revenue Service.

“Junior Seller Note” means
the Junior Seller Note set forth as Exhibit A hereto with an initial
principal amount equal to the Junior Seller Note Amount.

“Junior Seller Note Amount” means
$3,000,000.

“Known” or “Knowledge” means,
with respect to any Person, actual knowledge of such Person.  As it relates to the Company or Seller, the
term “Known” or “Knowledge” means the actual knowledge of Jonathan Cardella,
James Moyle, Tom Raudorf, Alan Mao, Cindy Nuqui, Patrick Byrne, Jason Lindsey,
David Chidester, Jonathan Johnson, Sarah Barnes, and Jeremy Griggs.

“Laws”
means all statutes, laws, codes, ordinances, regulations, rules, orders,
judgments, writs, injunctions, acts or decrees of any Government Entity.

“Leased Property”
has the meaning set forth in Section 2.24(b).

“Leases”
has the meaning set forth in Section 2.24(b).

“Liability”
means any liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any
liability for Taxes.

“Lien”
or “Liens” means any
mortgage, pledge, security interest, encumbrance, lien or  similar charge (including any conditional sale
or other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Company or any of the Company’s
Subsidiaries, any filing or agreement to file a financing statement as debtor
under the Uniform Commercial Code or any similar statute (other than to reflect
ownership by a third party of property leased to the Company or any of the
Company’s Subsidiaries under a lease which is 

 5
 

not in the nature of a conditional sale or title
retention agreement), any subordination arrangement in favor of another Person,
any encroachment, encumbrances or any other defect in title.

“Loss”
or “Losses” have the
meaning set forth in Section 7.2(a).

“Low Value”
has the meaning set forth in Section 1.4(d)(i).

“Material Adverse Effect” means
a material and adverse effect upon (i) the business, operations,
prospects, assets, liabilities, financial condition, operating results or
customer or supplier relations of the Company and/or the Company’s Subsidiaries
(including as a result of industry and general economic changes) or
(ii) the ability of the Company and/or the Company’s Subsidiaries or
Seller to consummate the transactions contemplated hereby or perform their
respective obligations hereunder.

“Material
Contracts” has the meaning set forth in Section 2.13(b).

“Material
Representations” has the meaning set forth in Section 7.1.

“Net Working
Capital” means the current assets of the Company and the Company’s
Subsidiaries as of immediately prior to the Closing that are included in the
line item categories of current assets specifically identified on Exhibit B,
including cash and cash equivalents, less the current liabilities of the
Company and the Company’s  Subsidiaries
as of immediately prior to the Closing, in each case, without duplication of
the Company, on a consolidated basis, as of such date, as determined in
accordance with GAAP without giving effect to the transactions contemplated by
this Agreement.

“Notice of
Disagreement” has the meaning set forth in Section 1.4(a).

“O Marks”
has the meaning set forth in Section 8.2.

“O Travel Mark”
has the meaning set forth in Section 8.2.

“Permitted Liens”
means (i) Liens for Taxes or assessments and similar charges, which either
are (a) not delinquent or (b) being contested in good faith and by
appropriate proceedings, and adequate reserves (as determined in accordance
with GAAP, consistently applied) have been established on the Company’s books
with respect thereto, and (ii) with respect to Leased Property only,
(a) taxes which are a lien and not yet due and payable, (b) zoning,
building and other land use regulations imposed by governmental agencies having
jurisdiction over the Leased Property which are not violated by the current use
and operation of the Leased Property and (c) covenants, conditions,
restrictions, easements and other similar matters of record affecting title to
the Leased Property which do not materially impair (x) the value or
marketability of the parcel of Leased Property to which they pertain or
(y) the occupancy or use of the Leased Property by the Company and or the
Company’s Subsidiaries for the purposes for which it is currently used in
connection with  the business of the Company’s or
any of the Company’s Subsidiaries business.

 6

“Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

“Pledge Agreement”
means the Pledge Agreement between the Buyer and the Seller in substantially
the form attached as Exhibit C hereto.

“Pre-Closing
Taxes” means Taxes of the Company and the Company’s Subsidiaries
or for which the Company or the Company’s Subsidiaries may become liable with
respect to a Tax period ending on or before the Closing Date including, without
duplication, Taxes arising as a result of the 338(h)(10) Election and, in the
case of a Tax period that begins on or before the Closing Date and ends after
the Closing Date, the Taxes allocable to the portion of such period ending on
the Closing Date based on a deemed closing of the books in the case of income,
profits, sales, employment and other Taxes readily apportionable between
periods and, in the case of all other Taxes, in proportion to the number of
days in the Tax period that arose on and before the Closing Date.

“Prior Stock
Purchase Agreement” has the meaning set forth in Section
5.1(f).

“Proceeding”
has the meaning set forth in Section 7.6.

“Real Property”
has the meaning set forth in Section 2.24(b).

“Restricted
Business” has the meaning set forth in Section 6.3(a).

“Restricted
Period” has the meaning set forth in Section 6.3(a).

“Schedules”
has the meaning assigned to it in the preamble to Article II.

“Seller Expenses”
means all fees, commissions, costs and expenses (including, without limitation,
fees, commissions, costs and expenses of legal counsel, accountants, investment
bankers, brokers or other representatives, advisors and consultants and
appraisal fees, costs and expenses and including, without limitation any change
in control payments, bonuses or other compensation and all related payroll
taxes in connection therewith incurred by the Company or any of the Company’s
Subsidiaries on its own behalf or on behalf of Seller or its Affiliates in
connection with, related to or arising from the negotiation, execution and
preparation of this Agreement, the performance of its obligations and covenants
hereunder and thereunder, and the consummation of the transactions contemplated
hereby.

“Seller”
has the meaning set forth in the preamble.

“Seller Notes”
means Junior Seller Note and the Senior Seller Note.

“Seller
Indemnified Parties” has the meaning set forth in Section 7.2(b).

“Senior Seller
Note” means the Seller Note in substantially the form attached
as Exhibit D hereto with an initial principal amount equal to the Senior
Seller Note Amount.

 7
 

“Senior Seller
Note Amount” means $3,000,000.

“Shares”
has the meaning set forth in the preamble.

“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability
company, partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof.

“Tax”
or “Taxes” means all (i)
United States federal, state or local or non-United States taxes, assessments,
charges, duties, levies or other similar governmental charges of any nature,
including all income, franchise, profits, capital gains, capital stock,
transfer, sales, use, occupation, property, excise, severance, windfall
profits, stamp, stamp duty reserve, license, payroll, withholding, ad valorem,
value added, alternative minimum, environmental, customs, social security (or
similar), unemployment, sick pay, disability, registration and other taxes,
assessments, charges, duties, fees, levies or other similar governmental
charges of any kind whatsoever, whether disputed or not, together with all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest; (ii) any liability for the payment of any amount of a type described
in clause (i) arising as a result of being or having been a member of any
consolidated, combined, unitary or other group or being or having been included
or required to be included in any Tax Return related thereto; and (iii) any
liability for the payment of any amount of a type described in clause (i) or
clause (ii) as a result of any obligation to indemnify or otherwise assume or
succeed to the liability of any other Person.

“Tax Purchase
Price” has the meaning set forth in Section 8.1(a)(iii).

“Tax Return”
means any return, information report or filing with respect to Taxes, including
any schedules (including Schedule K-1) attached thereto and including any
amendment thereof.

“Treasury
Regulation” means the United States Treasury Regulations
promulgated under the Code, and any reference to any particular Treasury
Regulation section shall be interpreted to include any final or temporary
revision of or successor to that section regardless of how numbered or
classified.

“Unpaid Seller
Expenses” means liabilities of the Company or of the Company’s
Subsidiaries for Seller Expenses to the extent not satisfied prior to the
Closing Date.

1.4. Determination of Final Purchase
Price.

(a)   Within
120 days following the Closing Date, Buyer shall prepare, or cause the Company
to prepare, and deliver to Seller a statement setting forth (i) Closing
Net Working Capital, (ii) Closing Indebtedness, (iii) Unpaid Seller
Expenses and (iv) the Purchase Price (the 

 8
 

“Adjustment
Statement”).  During the
30 days immediately following Buyer’s delivery of the Adjustment
Statement, Seller and its advisors shall have full reasonable access to the
working papers and books and records relating to the Adjustment Statement; provided,
that any such access or furnishing of such information shall be conducted at
Seller’s expense, during normal business hours under the reasonable supervision
of the Company’s agents and in such a manner as not to interfere in any
material respect with the normal operations of the Company; and provided,
further, that Seller shall treat all such information as confidential and
waives any right to use such information for any purpose other than in
connection with the transactions contemplated by this Agreement and to execute
and deliver such customary waivers, limitations of liability and
indemnification and agreements as are requested by the Company to provide
access to such work papers and records. 
The Adjustment Statement shall become final and binding upon the parties
on the 30th day
following receipt thereof by Seller unless Seller gives written notice of its
disagreement (a “Notice of Disagreement”)
to Buyer prior to such date.  Any Notice
of Disagreement shall (x) specify in reasonable detail the nature and amount of
any disagreement so asserted (and an alternative amount for each such disputed
item) and (y) shall include a proposed calculation by Seller of the Closing Net
Working Capital, Closing Indebtedness, Unpaid Seller Expenses and Purchase
Price.

(b)   If
a timely Notice of Disagreement is received by Buyer, then the Adjustment
Statement shall become final and binding upon the parties on the earlier of
(i) the date Buyer and Seller resolve in writing any differences they have
with respect to any matter specified in the Notice of Disagreement or
(ii) the date any matters properly in dispute are finally resolved in
writing by the Accounting Firm pursuant to Section 1.4(d).  During the thirty (30) days immediately
following the delivery of a Notice of Disagreement, Buyer and Seller shall
consult in good faith to resolve in writing any differences which they may have
with respect to any matter specified in the Notice of Disagreement.  During such consultation period, Buyer shall
have full access to the working papers, books and records of Seller prepared in
connection with Seller’s preparation of the Notice of Disagreement; provided,
that any such access shall be conducted at Buyer’s expense, during normal
business hours under the reasonable supervision of Seller’s agents and in such
a manner as not to interfere in any material respect with the normal operations
of Seller; and provided, further, that Buyer shall treat all such
information as confidential and waives any right to use such information for
any purpose other than in connection with the transactions contemplated by this
Agreement and to execute and deliver to Seller’s accountants such customary
waivers, limitations of liability and indemnification and agreements as are
requested by such parties or their advisors to provide access to such work
papers and records.

(c)   At
the end of such 30-day consultation period, if Buyer and Seller have not resolved
their disputes, Buyer and Seller shall submit any and all matters which remain
in dispute to an independent auditing firm of national recognition mutually
selected by Buyer and Seller or if they fail to agree on such a firm, then to
KPMG, LLP (the “Accounting Firm”).  The Accounting Firm shall work to resolve
such dispute promptly and, in any event, within thirty (30) days from the date
the dispute is submitted to the Accounting Firm.  Any item not specifically referred to the
Accounting Firm for evaluation shall be deemed final and binding on the
parties.  The Accounting Firm shall
finalize the Closing Net Working Capital, Closing Indebtedness, Unpaid Seller
Expenses and the Purchase Price by selecting with respect to each item in
dispute an amount between or equal to Buyer’s position as set forth in the
Adjustment 

 9
 

Statement or Seller’s position as set forth in the
Notice of Disagreement.  The Accounting
Firm shall act as an arbitrator to determine the Closing Net Working Capital,
Closing Indebtedness, Unpaid Seller Expenses and the Purchase Price, based
solely on presentations by Buyer and Seller (and not by independent
review).  The determination of the
Closing Net Working Capital, Closing Indebtedness, Unpaid Seller Expenses and
the Purchase Price by the Accounting Firm shall be binding on the parties.

(d)   In
the event Buyer and Seller submit any matters to the Accounting Firm for
resolution as provided in Section 1.4(c) above, Buyer and Seller will
share responsibility for the fees and expenses of the Accounting Firm as
follows:

(i)            if the Accounting
Firm resolves all of the remaining objections in favor of Buyer’s position (the
Purchase Price so determined is referred to herein as the “Low Value”), then Seller will be
responsible for all of the fees and expenses of the Accounting Firm;

(ii)           if the Accounting
Firm resolves all of the remaining objections in favor of Seller’s position
(the Purchase Price so determined is referred to herein as the “High Value”), then the Company will
be responsible for all of the fees and expenses of the Accounting Firm; and

(iii)          if the Accounting
Firm neither resolves all of the remaining objections in favor of Buyer’s
position nor resolves all of the remaining objections in favor of Seller’s
position (the Purchase Price so determined is referred to herein as the “Actual Value”), then Seller will be
responsible for that fraction of the fees and expenses of the Accounting Firm
equal to (x) the difference between the High Value and the Actual Value
over (y) the difference between the High Value and the Low Value, and the
Company will be responsible for the remainder of the fees and expenses of the
Accounting Firm.

(e)   for
purposes of this Agreement, the “Adjustment
Amount” shall equal (i) the Purchase Price (as finally
determined pursuant to this Section 1.4) minus (ii) the
Estimated Purchase Price.

(f)    If
the Adjustment Amount is a positive amount, the Company will make a payment by
wire transfer or delivery of other immediately available funds in the amount
equal to such positive amount to Seller within 10 days of the final
determination of the Purchase Price pursuant to this Section 1.4.  If the Adjustment Amount is a negative
amount, Seller will make a payment by wire transfer or delivery of other
immediately available funds in the amount of such negative amount to Buyer
within 10 days of the final determination of the Purchase Price pursuant to
this Section 1.4.

1.5.
The Closing.

(a)   Time
and Place of Closing.  Subject to the
satisfaction or waiver of each of the conditions set forth herein the
consummation of the transactions contemplated by this Agreement (collectively,
the “Closing”)
will take place at the offices of Kirkland & Ellis LLP, 153 East 53rd
Street, New York, NY 10022, on the
date hereof, or such other date as may be agreed upon by the parties.
The date and time of the Closing are referred to as the “Closing
Date”.

 10
 

(b)   Deliveries
and Proceedings at the Closing.  At
the Closing, subject to the satisfaction or waiver of each of the conditions
specified in Article V below:

(i)            Deliveries by
Seller to Buyer.  Seller shall
deliver to Buyer certificate(s) representing the Shares duly endorsed in blank
or accompanied by stock powers or other proper instrument of assignment
endorsed in blank in proper form for transfer.

(ii)           Deliveries by
Buyer to Seller.  Buyer (or its
assigns) shall (A) deliver the Seller Notes and the Pledge Agreement to Seller,
and (B) pay the Cash Amount to Seller, by wire transfer of immediately
available funds to one or more accounts as designated by Seller, such account
or accounts to be designated by written notice to Buyer not less than two
business days prior to the Closing Date.

(iii)          Other Deliveries.  The closing certificates, opinion of counsel
and other documents and agreements required to be delivered pursuant to this
Agreement with respect to the Closing shall be delivered.

Article II

Representations and Warranties of the Company and Seller

As a material inducement to Buyer to enter into this
Agreement and to consummate the transactions contemplated hereby, the Company
and Seller, jointly and severally, represent and warrant to Buyer as set forth
in this Article II, except as otherwise set forth in written disclosure
schedules (the “Schedules”)
delivered to Buyer prior to the execution hereof, a copy of which is attached
hereto.  The Schedules are numbered to
correspond to the various sections of this Article II setting forth certain
exceptions to the representations and warranties contained in this Article II
and certain other information called for by this Agreement.  No disclosure of a particular matter made in
any particular Schedule shall be deemed made in any other Schedule unless
expressly made therein (by cross-reference or otherwise) or unless a reasonable
person reading the disclosure on one Schedule would clearly be expected to
recognize that the facts disclosed therein would constitute a responsive
disclosure to such other Schedule.  The disclosure of
information in a Schedule hereto shall not be construed as an admission that
the matter so disclosed is material or is required to be disclosed in response
to the referenced representation or warranty.

2.1.
Organization and Corporate Power. 
The Company is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation and is
licensed or qualified to conduct its business as it is presently being
conducted and is in good standing in every jurisdiction where the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect.  Each jurisdiction in which the Company is
qualified to do business is set forth on Schedule 2.1.  The Company possesses all requisite corporate
power and authority necessary to own and operate its properties, to carry on
its businesses as presently conducted, to execute and deliver this Agreement
and to carry out the transactions contemplated by this Agreement.  The copies of  the
Company’s charter documents and bylaws which have been furnished to Buyer
reflect all amendments made thereto at any time prior to the date of this
Agreement and are true, complete 

 11
 

and correct. 
The minute books of the Company (containing the records of meetings of
the stockholders, the Company’s board of directors and any committees of the
Company’s board of directors) are true, complete and correct.  The stock certificate books and the stock
record books, if any, of  the Company
are true, complete and correct.

2.2.
Capitalization.  The authorized
capital stock of the Company consists of 50,000 shares of Class A common stock,
no par value, 21,577 shares of which are issued and outstanding and are held
beneficially and of record by Seller free and clear of any Liens and 50,000
shares of Class B common stock, no par value, of which none are issued and
outstanding.  Upon delivery to Buyer at
the Closing of certificates representing the Shares, duly endorsed by Seller
for transfer to Buyer, and upon Seller’s receipt of payment therefore, valid
title to the Shares will pass to Buyer, free and clear of any Liens.  As of the Closing and immediately thereafter,
the Shares shall constitute all of the issued and outstanding shares of the
Company’s capital stock, will be duly authorized, validly issued and
non-assessable and will have been issued free and clear of any preemptive or
similar rights.  The Company has no
outstanding (i) stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit participation features,
nor any rights or options to subscribe for or to purchase its capital stock, or
(ii) any stock appreciation rights or phantom stock or similar plans or
rights.  There are no
(i) outstanding obligations of the Company (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or
any warrants, options or other rights to acquire its capital stock, or
(ii) voting trusts, proxies or other agreements among the Company’s
stockholders with respect to the voting or transfer of the Company’s capital
stock.

2.3.
Subsidiaries; Investments.  Schedule 2.3 sets forth each of the Company’s
Subsidiaries and each jurisdiction in which such Subsidiaries are qualified to
do business.  Neither the Company nor any of the Company’s
Subsidiaries owns or holds the right to acquire any stock, membership interest,
partnership interest, joint venture interest or other equity ownership interest
in any other Person.  Each of the Company’s
Subsidiaries is either wholly owned by the Company or a Subsidiary of the
Company as indicated in Schedule 2.3. 
Each of the Company’s Subsidiaries identified in Schedule 2.3 is
qualified to conduct business and is in good standing or is active, as the case
may be, under the laws of each jurisdiction wherein the nature of its business
or its ownership of property requires it to be so qualified, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect.

2.4.
Authorization; No Breach.

(a)   The
Company’s execution, delivery and performance of this Agreement and all other
agreements and instruments contemplated hereby to which it is a party have been
duly authorized by the Company.  Assuming
that Buyer has duly authorized, executed and delivered this Agreement and all
other agreements and instruments contemplated hereby to which it is a party,
this Agreement constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, and all other agreements and
instruments contemplated hereby to which the Company is a party, when executed
and delivered by the Company in accordance with the terms hereof, shall each
constitute a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by (i) applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or 

 12
 

similar laws in effect which affect the enforcement of
creditors’ rights generally or (ii) general principles of equity, whether
considered in a proceeding at law or in equity.

(b)   Except
as set forth on Schedule 2.4, the execution and delivery by the
Company of this Agreement and all other agreements and instruments contemplated
hereby to which it is a party, and the fulfillment of and compliance with the
respective terms hereof and thereof by the Company does not and shall not
(i) conflict with or result in a breach of the terms, conditions or provisions
of, (ii) constitute a default under (whether with or without the passage
of time, the giving of notice or both), (iii) result in the creation of
any Lien upon the Company’s capital stock or assets, including without
limitation, the Shares, pursuant to, (iv) give any third party the right
to modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any third
party or any Government Entity pursuant to (A) the articles of
incorporation or bylaws or similar organizational documents of the Company or
any of the Company’s Subsidiaries, (B) any Law to which the Company is
subject, or any order, judgment or decree or (C) any agreement or
instrument to which the Company is subject, except in the case of subclause (B)
and (C) above, for any conflict, breach, default, creation, modification,
termination, acceleration, violation or requirement that would not be material
in any respect.

2.5.
Governmental Authorization.  The
execution, delivery and performance by the Company and Seller of this Agreement
and the consummation by Company and Seller of the transactions contemplated
hereby require no consent, waiver, agreement, approval, permit or authorization
of, or declaration, filing, notice or registration to or with, any Government
Entity other than (a)  compliance with any applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder or (b) state securities or “blue sky” laws.

2.6.
Financial Statements.  Attached
hereto as Schedule 2.6 are (a) unaudited consolidated balance
sheets and related statements of income and cash flows of the Company and
Company’s Subsidiaries for each of the fiscal years ended
December 31, 2006 and for the period starting July 1, 2005 and ending
December 31, 2005, and (b) an unaudited consolidated balance sheet and related
statements of income and cash flow for the Company and Company’s Subsidiaries
for the three  month  period ended as of March 31, 2007
(collectively, the “Financial Statements”).  The Financial Statements (including, if
applicable, the notes thereto, if any) have been prepared from, and are in
accordance with, the books and records of  the Company
(which are correct and complete in all material respects), and fairly present
the financial condition as of the dates thereof, operating results and cash
flows for the periods of the Company then ended.  None of the Financial Statements have been
prepared in accordance with GAAP. 
However, each of the Financial Statements have been prepared in a method
consistently applied throughout the periods covered thereby in accordance with
past custom and practice of the Company (subject to normally-recurring
adjustments).

2.7.
Absence of Undisclosed Liabilities. 
Except as set forth on Schedule 2.7, neither the Company nor
any of the Company’s Subsidiaries have any material obligation or Liability,
other than (i) Liabilities set forth on the liabilities side of the
Balance Sheet (rather than any notes thereto), or (ii) Liabilities and
obligations which have arisen after the date of the Balance Sheet 

 13
 

in the ordinary course of business (none of which is a
Liability resulting from breach of contract, breach of warranty, tort,
infringement, claim, lawsuit, violation of law or environmental Liability or
clean-up obligation and none of which is material either individually or in the
aggregate).

2.8.
Accounts Receivable; Inventory.  All notes and accounts
receivable reflected on the Balance Sheet are valid notes and accounts
receivables (subject only to ordinary set-offs and counterclaims, in the
ordinary course, such as credit card charge-backs, but none of which either
individual or the aggregate will result in a Material Adverse Effect) have been
prepared from, and are in accordance with, the books and records of the Company
and arose solely out of bona fide sales and delivery of goods and performance
of services.

2.9.
Product Warranty.  All products
sold or delivered by  the Company or
any of the Company’s Subsidiaries have been in conformity in all material
respects with all applicable contractual commitments and all express and
implied warranties, and neither the Company nor any of the Company’s
Subsidiaries has any Liability (and has not received written notice of any
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against it giving rise to any such Liability) for replacement thereof or
other damages in connection therewith, other than replacements or damages in
the ordinary course of business consistent with past custom and practice.  No products sold or delivered by the Company
or any of the Company’s Subsidiaries and no services rendered by the Company or
any of the Company’s Subsidiaries are subject to any guarantee, warranty or
other indemnity beyond the applicable industry standard terms and conditions of
such sale or service.

2.10.
Absence of Certain Developments. 
Since March 31, 2006, there has occurred no fact, event or
circumstance which has had or would reasonably be expected to have a Material
Adverse Effect.  Except as expressly
contemplated by this Agreement and as set forth on Schedule 2.10,
since March 31, 2006,  the Company
and the Company’s Subsidiaries have conducted business only in the ordinary
course consistent with past custom and practice, and the Company nor the
Company’s Subsidiaries have:

(a)   authorized
for issuance, issued, sold, delivered, or granted any notes, bonds or other
debt securities or any capital stock or other equity securities or any
securities or rights convertible, exchangeable or exercisable into any capital
stock or other equity securities;

(b)   incurred
any Indebtedness not disclosed in the Financial Statements, other than
Indebtedness in the ordinary course of business not exceeding $50,000;

(c)   discharged
or satisfied any Lien or paid any material obligation or Liability, other than
current Liabilities paid in the ordinary course of business consistent with past
custom and practice;

(d)   declared,
set aside or made any payment or distribution of cash or other property with
respect to its capital stock or other equity securities or purchased, redeemed
or otherwise acquired any shares of its capital stock or other equity
securities (including any warrants, options or other rights to acquire its
capital stock or other equity securities);

(e)   mortgaged
or pledged any of its properties or assets or subjected them to any Lien,
except Permitted Liens;

 14

(f)    sold,
assigned, transferred, leased, licensed or permitted the loss, lapse or
abandonment of, or failed to take steps to maintain, enforce and protect any of
its assets (including any Company Intellectual Property Rights), except in the
ordinary course of business consistent with past custom and practice, provided
that no such representation is made with respect to the “O Travel” Mark;

(g)   made
or granted any bonus or any wage or salary increase to any employee or group of
employees (other than bonuses and wage increases in the ordinary course of
business consistent with past custom and practice) or made or granted any
increase in any employee benefit plan or arrangement, or amended or terminated
any existing employee benefit plan or arrangement or adopted any new employee
benefit plan or arrangement, or entered into, modified or terminated any
collective bargaining agreement or relationship;

(h)   made
capital expenditures or commitments therefore in excess of $50,000
individually, or $100,000 in the aggregate;

(i)    made
any loans or advances (other than for ordinary course business travel and
other ordinary course business expenses) to, guarantees for the benefit
of, or any Investments in, any Persons or formed any Subsidiary;

(j)    suffered
any damage, destruction or casualty loss exceeding $10,000 in the aggregate,
whether or not covered by insurance, or experienced any material changes in the
amount and scope of insurance coverage;

(k)   made
any change in its cash management practices or in any method of accounting or
accounting policies, or made any write-down in the value of its inventory that
is material or out of the ordinary course of business consistent with past
custom and practice;

(l)    other
than compensation, employee benefits, employee bonuses and rent paid
in the ordinary course of business, consistent with past custom and practice,
directly or indirectly engaged in any transaction or entered into, amended or
terminated, any arrangement with any of its officers, directors, shareholders
or other Affiliates;

(m)  amended
its charter, bylaws or other organizational documents;

(n)   taken
any action or omitted to take any action which act or omission would reasonably
be expected to have a Material Adverse Effect;

(o)   been
involved in any labor dispute, other than routine non-material grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any of its employees, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to such employees;

(p)   entered
into any new line of business, or incurred or committed to incur any capital
expenditures, obligations or Liabilities in connection therewith;

 15
 

(q)   entered
into any acquisition agreement or agreement to acquire by merger, consolidation
or otherwise, or agreement to acquire a substantial portion of the assets of,
or in any other manner, any business of any other Person;

(r)    cancelled
or waived (i) any right material to the operation of its business or
(ii) any debts or claims against any of its Affiliates;

(s)   accelerated,
terminated, modified or cancelled any agreement, contract, lease or license
involving more than $50,000;

(t)    delayed,
postponed or canceled the payment of accounts payable or any other Liability;

(u)   agreed,
whether orally or in writing, to do any of the foregoing.

2.11         Assets.  The Company has good and valid title to, or a
valid leasehold interest in, the properties and assets, tangible or intangible,
shown on the Balance Sheet or acquired thereafter, free and clear of all Liens,
except for (a) properties and assets disposed of in the ordinary course of
business since December 31, 2006 and (b) Permitted Liens.  The Company owns or possesses all right,
title or interest in, has a valid leasehold interest in, or has a valid license
to use, all of the assets, properties and rights, whether tangible or
intangible, necessary for the conduct of its business and the business of any
of the Company’s Subsidiaries as presently conducted and as proposed to be
conducted.

2.12.        Tax
Matters

(a)   Except
as set forth on Schedule 2.12:

(i)            the Company and
each of the Company’s Subsidiaries has filed all Tax Returns which it is
required to file under applicable laws and regulations, and all such Tax
Returns are true, complete and correct in all material respects and have been
prepared in compliance with all applicable laws and regulations;

(ii)           the Company and
each of the Company’s Subsidiaries has paid all Taxes due and owing by it
(whether or not such Taxes are shown or required to be shown on a Tax Return)
and has withheld and paid over to the appropriate taxing authority all Taxes
which it is required to withhold from amounts paid or owing to any employee,
shareholder, creditor or other third party;

(iii)          neither the
Company, any of the Company’s Subsidiaries, nor any Affiliated Group of which
the Company or any of the Company’s Subsidiaries is a member, has waived any
statute of limitations with respect to any Taxes or agreed to any extension of
time for filing any Tax Return which has not been filed and neither the
Company, any of the Company’s Subsidiaries, nor any Affiliated Group of which
the Company or any of the Company’s Subsidiaries is a member, has consented to
extend to a date later than the date hereof the period in which any Tax may be
assessed or collected by any Tax authority;

 16
 

(iv)          the unpaid Taxes of
the Company and the Company’s Subsidiaries (A) did not, as of the date of
the Balance Sheet, exceed the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the Balance Sheet (rather than in
any notes thereto) and (B) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company in filing its Tax Returns;

(v)           no foreign, federal,
state or local tax audits or assessments or administrative or judicial
proceedings are pending or being conducted with respect to the Company, any of
the Company’s Subsidiaries, or any Affiliated Group of which the Company or any
of the Company’s Subsidiaries is a member;

(vi)          there are no
unresolved questions or claims concerning the Tax Liability  of the Company, any of the Company’s
Subsidiaries, or any Affiliated Group of which the Company or any of the
Company’s Subsidiaries is a member; there are no Liens on any of the assets of
the Company, of any of the Company’s Subsidiaries, or of any Affiliated Group
of which the Company or any of the Company’s Subsidiaries is a member, that
arose in connection with any failure (or alleged failure) to pay any Tax;

(vii)         no claim has ever
been made by a taxing authority in a jurisdiction where the Company or any of
the Company’s Subsidiaries do not file Tax Returns that the Company or any of
the Company’s Subsidiaries is or may be subject to Taxes assessed by such
jurisdiction;

(viii)        neither the Company
nor any of the Company’s Subsidiaries is or has been a member of an Affiliated
Group or filed or been included in a combined, consolidated or unitary income
Tax Return other than the Affiliated Group of which Seller is the parent;

(ix)           neither the Company
nor any of the Company’s Subsidiaries is a party to or bound by any Tax
allocation or Tax sharing agreement;

(x)            except as may be
caused by this Agreement or the transactions contemplated hereby or as
disclosed in the Financial Statements, neither the Company nor any of the
Company’s Subsidiaries shall be required (i) as a result of a change in
method of accounting for a taxable period ending on or prior to the Closing
Date, to include any adjustment in taxable income for any taxable period (or
portion thereof) ending after the Closing Date, (ii) as a result of any “closing
agreement,” as described in Section 7121 of the Code (or any corresponding
provision of state, local or foreign income Tax law), to include any item of
income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date,
(iii) as a result of any sale reported on the installment method where
such sale occurred on or prior to the Closing Date, to include any item of
income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date, or
(iv) as a result of any prepaid amount received on or prior to the Closing
Date (other than amounts prepaid in the ordinary course of business consistent
with past custom and practice), to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date;

 17
 

(xi)           neither the Company
nor any of the Company’s Subsidiaries has requested or received a ruling from
any taxing authority or signed any binding agreement with any taxing authority
that can reasonably be anticipated to increase the amount of Tax imposed on the
Company or any of the Company’s Subsidiaries after the Closing Date; and

(b)   Neither
the Company nor any of the Company’s Subsidiaries,

(i)            has been a United
States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code;

(ii)           is liable for the
Taxes of another Person (A) under Treasury Regulation § 1.1502-6 (or
comparable provisions of state, local or foreign law), (B) as a transferee
or successor, or (C) by contract or indemnity or similar arrangement;

(iii)          has made any
payments, is obligated to make any payments, or is a party to any agreement
that under certain circumstances could obligate it to make any payments that
will not be deductible under Section 280G of the Code;

(c)   Neither
the Company nor any of the Company’s Subsidiaries has distributed the stock of
another Person, or it had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part
by Sections 355 or 361 of the Code.

(d)   Neither
the Company nor any of the Company’s Subsidiaries has engaged in any listed or
reportable transaction within the meaning of Sections 6011 and 6012 of the
Code.

2.13.        Contracts
and Commitments.

(a)   Except
as expressly contemplated by this Agreement or as set forth on Schedule 2.13,
neither the Company nor any of the Company’s Subsidiaries is a party to or
bound by (whether written or oral) any:

(i)            pension, profit
sharing, stock option, employee stock purchase or other plan or arrangement
providing for deferred or other compensation to employees;

(ii)           collective
bargaining agreement or any other contract with any labor union, or severance
agreements, programs, policies or arrangements;

(iii)          management
agreement or contract for the employment of any officer, individual employee or
other Person on a full-time, part-time, consulting or other basis
(i) providing annual cash or other compensation in excess of $50,000,
(ii) providing for the payment of any cash or other compensation or
benefits upon the consummation of the transactions contemplated hereby or
(iii) otherwise restricting its ability to terminate the employment of any
employee at any time for any lawful reason or for no reason without penalty or
Liability;

(iv)          contract or
agreement involving any Government Entity;

 18
 

(v)           agreement or
indenture relating to borrowed money or other Indebtedness or the mortgaging,
pledging or otherwise placing a Lien on any material asset or material group of
assets of the Company or any letter of credit arrangements, or any guarantee
therefore;

(vi)          lease or agreement
under which the Company or any of the Company’s Subsidiaries is (x) lessee
of or holds or operates any personal property, owned by any other party, except
for any lease of personal property under which the aggregate annual rental
payments do not exceed $25,000 or (y) lessor of or permits any third party
to hold or operate any property owned or controlled by the Company or any of
the Company’s Subsidiaries;

(vii)         contract or group of
related contracts with the same party or group of affiliated parties continuing
over a period of more than six months from the date or dates thereof, not
terminable by the Company or any of the Company’s Subsidiaries, as applicable,
upon 30 days’ or less notice without penalty or involving more than $50,000;

(viii)        agreements relating
to the ownership of, Investments in or loans and advances to any Person,
including Investments in joint ventures and minority equity investments;

(ix)           license, royalty,
indemnification or other agreement with respect to any (Intellectual Property
Rights other than mass-marketed software with a replacement cost and/or annual
license fee of less than $25,000);

(x)            agent, sales
representative, sales or distribution agreement;

(xi)           power of attorney
or other similar agreement or grant of agency;

(xii)          contract or
agreement prohibiting it from freely engaging in any business or competing
anywhere in the world, including, without limitation, any nondisclosure or
confidentiality agreements;

(xiii)         agreement under
which it has granted any Person any registration rights;

(xiv)        agreement under which
the consequences of a default or termination could reasonably be expected to
have a Material Adverse Effect; or

(xv)         agreement which is
material to its operations and business or involves a consideration in excess
of $50,000 annually, whether or not in the ordinary course of business.

(b)   All
of the contracts, agreements and instruments set forth or required to be set
forth on Schedule 2.13 (collectively, the “Material Contracts”) are valid,
binding and enforceable in accordance with their respective terms except as the
enforceability thereof may be limited by (A) applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar laws in effect
which affect the enforcement of creditors’ rights generally 

 19
 

or (B) general principles of equity, whether considered in a proceeding
at law or in equity.  Each of the
Material Contracts shall be in full force and effect without penalty in
accordance with its terms upon consummation of the transactions contemplated
hereby.  Neither the Company nor any of
the Company’s Subsidiaries is in default under or in breach of, or in receipt
of any claim of default or breach under, any Material Contract.  No event has occurred which with the passage
of time or the giving of notice or both would result in a default or breach by
the Company or any of the Company’s Subsidiaries under any Material Contract;
and none of the Company nor Seller has any Knowledge of any existing or
threatened breach or cancellation by the other parties to any Material Contract
to which the Company or any of the Company’s Subsidiaries is a party.  Each Material Contract will continue to be in
full force and effect on identical terms following the Closing.

(c)   Buyer
has been supplied with a true, complete and correct copy of each written
Material Contract, together with all amendments, waivers or other changes
thereto (all of which amendments, waivers or other changes thereto are
described on Schedule 2.13), and true and accurate description of
the terms and conditions of each oral Material Contract.

2.14.        Intellectual
Property Rights.

(a)   Schedule 2.14(a)
contains a true, complete and correct list of all (i) patented and
registered Intellectual Property Rights (including Internet domain names)
owned, used or held for use by the Company or any of the Company’s
Subsidiaries,  (ii) pending patent
applications and applications for registration of other Intellectual Property
Rights  owned by or filed by or on behalf
of the Company and/or any of the Company’s Subsidiaries, (iii)  computer
software owned or used by the Company and/or any of the Company’s Subsidiaries
(other than mass-marketed software with a replacement cost and/or annual
license fee of less than $25,000), (iv) trade or corporate names used by
the Company and/or any of the Company’s Subsidiaries, (v) material
unregistered Marks owned or used by the Company and/or any of the Company’s
Subsidiaries, indicating the owner of such item along with the expiration and
renewal dates for each of the foregoing, if applicable.

(b)   Except
as set forth on Schedule 2.14(b), the Company and/or the Company’s
Subsidiaries own all right, title and interest in and to, or has the right to
use pursuant to a valid, enforceable and written license set forth on Schedule
2.13, free and clear of all Liens, all of the Company Intellectual Property
Rights necessary for or used in the operation of the business of the Company
and the Company’s Subsidiaries.  The
Company Intellectual Property Rights are valid, enforceable and subsisting, and
none of the Company Intellectual Property Rights have been misused.  No loss, other than by expiration of patents
at the end of their respective statutory terms, of any of the Company
Intellectual Property Rights is threatened or pending.

(c)   Except as set forth on Schedule
2.14(c),
there are no claims (including office actions or oppositions or
cancellation actions) against the Company and/or any of the Company’s
Subsidiaries that were either made since July 1, 2005, or are presently pending
asserting the invalidity, misuse or unenforceability of any of the Company
Intellectual Property Rights or challenging ownership or use thereof and to the
Knowledge of Seller, there is no reasonable basis for the same.  Neither the Company nor any of the Company’s
Subsidiaries has infringed, misappropriated or otherwise conflicted with, and
the operation of the business of the Company 

 20
 

as currently conducted will not infringe,
misappropriate or otherwise conflict with, any Intellectual Property Rights of
other Persons and neither the Company nor any of the Company’s Subsidiaries has
received any notices regarding any of the foregoing (including any demands or
offers to license any Intellectual Property Rights from any other Person).  To the Knowledge of Seller, no third party has
infringed, misappropriated or otherwise conflicted with any of the Company
Intellectual Property Rights.

(d)   The
transactions contemplated by this Agreement shall not impair the right, title
or interest of the Company in and to the Company Intellectual Property Rights,
and the Company Systems, and all of the Company Intellectual Property Rights
shall be owned or available for use by the Company immediately after the
Closing on terms and conditions identical to those under which the Company
owned or used the Company Intellectual Property Rights and the Company Systems
immediately prior to the Closing.  The
Company Intellectual Rights and the Company Systems are not subject to any
outstanding consent,  settlement,
decree, order, injunctions, judgment or ruling restricting the use thereof.

(e)   The
computer software, firmware, hardware, networks, interfaces, and related
systems (collectively, the “Company
Systems”) that are owned, used or relied on by the Company or
any of the Company’s Subsidiaries in the conduct of its business are sufficient
for the immediate and anticipated future needs of such business, including as
to capacity and ability to process peak volumes in a timely manner.  In the past twelve (12) months, there have
been no bugs in, or failures, breakdowns, or continued substandard performance
of any Company Systems which has caused any substantial disruption,
interruption, failure, breakdown or outage 
in or to the use of such Computer Systems by the Company or any of the
Company’s Subsidiaries.  Except as set
forth in Schedule 2.14(e), all Computer Systems, other than software,
used in the business of the Company are owned and operated by and are under the
control of the Company or the Company’s Subsidiaries and are not wholly or
partly dependent on any facilities which are not under the ownership, operation
or control of the Company.

(f)    The
Company and each of the Company’s Subsidiaries takes all necessary or
commercially reasonable measures and follows practices common in the industry
to protect, maintain and enforce the Company Intellectual Property Rights,
including (i) the secrecy, confidentiality and value of its trade secrets and
other confidential information, and (ii) requiring each current and former
employee and independent contractor of the Company or any of the Company’s
Subsidiaries to enter into agreements pursuant to which he or she agrees to
protect the confidential information and trade secrets of the Company and the
Company’s Subsidiaries and assign to the Company or one of the Company’s
Subsidiaries all Intellectual Property Rights created in the course of his or
her engagement with the Company or the Company’s Subsidiaries.

(g)   The
software included in the Company Intellectual Property Rights (the “Company Software”) is not subject
to any “copyleft” or other obligation or condition (including any obligation or
condition under any “open source” license) that could (i) require, or condition
the use or distribution of such software, on the disclosure, licensing, or
distribution of any source code for any portion of such software, or (ii)
otherwise impose any limitation, restriction, or condition on the right or
ability of the Company or the Company’s Subsidiaries to use, license or
distribute any Company Software.

 21

(h)   (i)
No source code for any Company Software has been delivered, licensed, or made
available to any escrow agent or other person who is not, as of the date of
this Agreement, an employee of Company or a Company Subsidiary, (ii) neither
Company nor any Company Subsidiary has a duty or obligation (whether present,
contingent, or otherwise) to deliver, license, or make available the source
code for any Company Software to any escrow agent or other person who is not,
as of the date of this Agreement, an employee of the Company or a Company
Subsidiary, and (iii) no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will, or could
reasonably be expected to, result in the delivery, license, or disclosure of
the source code for any Company Software to any Person who is not, as of the
date of this Agreement, an employee of Company or a Company Subsidiary.

(i)    The
Company and the Company’s Subsidiaries are in compliance with all applicable
data protection or privacy laws governing the collection or use of personal
information, including obtaining from current or prospective customers express
consent to use, store, display, distribute, and transfer from any place in the
world to any other place in the world, electronically or otherwise, such
personal information, and have not received any notice of any alleged failure
to comply with the foregoing.  The
Company and its Subsidiaries are in compliance with any privacy policies or
related policies, programs or other notices that concern the Company’s or any
Subsidiary’s collection or use of personal information.

2.15.        Litigation.  Except as set forth on Schedule 2.15,
there are no actions, suits, proceedings (including any arbitration
proceedings), orders, investigations or claims pending or, to the Knowledge of
Seller, threatened against the Company or any of the Company’s Subsidiaries, or
pending or threatened by the Company or any of the Company’s Subsidiaries
against any third party, at law or in equity, or before or by any Government
Entity (including any actions, suits, proceedings or investigations with
respect to the transactions contemplated by this Agreement); neither the
Company nor any of the Company’s Subsidiaries is subject to any governmental
investigations or inquiries.  Neither the
Company nor any of the Company’s Subsidiaries is subject to any judgment, order
or decree of any Government Entity.

2.16.        Brokerage.  Except as set forth on Schedule 2.16, other
than East Peak Advisors, whose fees and expenses will be paid by Seller,
there are and shall be no claims for brokerage commissions, finders’ fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement to which the Company or any of
the Company’s Subsidiaries is a party or to which the Company or any of the
Company’s Subsidiaries is subject for which the Company or any of the Company’s
Subsidiaries (after the Closing) or Buyer could become obligated.

2.17.        Insurance.  Schedule 2.17 contains a
description of each material insurance policy maintained by  the
Company or any of the Company’s Subsidiaries 
with respect to its properties, assets and business, and each such
policy shall be in full force and effect as of the Closing or a substituted
policy shall have been obtained therefore. 
The scope and amount of each of these insurance policies are, and have
been since December 31, 2005, customary and reasonable for the
business in which the Company is and has been engaged.  Neither the Company nor any of the Company’s
Subsidiaries is in default with respect to its obligations under any material
insurance policy maintained by it, and neither the Company nor any of the
Company’s Subsidiaries has ever been denied insurance coverage.  Neither the Company nor any of the 

 22
 

Company’s Subsidiaries has any self-insurance or
co-insurance program.  All material
insurance policies shall continue to be in full force and effect immediately
after the Closing.

2.18.        Labor Matters.  Schedule 2.18 contains a true,
complete and correct list as of March 31, 2007 of (i) the employees
employed by  the Company or any of the Company’s
Subsidiaries having an annual compensation in calendar year 2006 of $40,000 or
more, (ii) the rate of all current compensation payable by the Company or
any of the Company’s Subsidiaries to each such employee, including, without
limitation, any bonus, contingent or deferred compensation, and (iii) the
directors of the Company and the Company’s Subsidiaries.  Except as set forth on Schedule 2.18,
no executive or key employee of the Company or any of the Company’s
Subsidiaries and no group of employees of the Company has informed the Company
or any of the Company’s Subsidiaries (whether orally or in writing) of any plan
to terminate employment with the Company or any of the Company’s
Subsidiaries.  Neither the Company nor
any of the Company’s Subsidiaries have (a) experienced any material labor
relations problems (including any additional union organization activities,
threatened or actual strikes or work stoppages or material grievances),
(b) engaged in any unfair labor practices within the meaning of the
National Labor Relations Act or other similar Laws in jurisdictions where the
Company or any of the Company’s Subsidiaries carry on business, (c) during
the past five years, suffered any labor strike, lockout, work stoppage or other
material labor dispute and, (d) to the Knowledge of Seller, experienced
any union organization campaign in progress with respect to any of the employees.  Neither the Company nor any of the Company’s
Subsidiaries has engaged in any employee layoff activities within the last two
(2) years that would violate or in any way implicate the Worker Adjustment
Retraining and Notification Act of 1988, as amended, or any similar foreign,
state, provincial or local plant closing or mass layoff statute, rule or
regulation.

2.19.        Employee Benefits.

(a)   Schedule
2.19 sets forth a complete and correct list of  each “employee benefit  plan” (as such term is defined in Section 3(3)
of ERISA) and  each other benefit plan,
program, agreement or arrangement (i) maintained, sponsored or contributed or
required to be contributed to by the Company or any of the Company’s
Subsidiaries, (ii) in which the Company or any of the Company’s Subsidiaries
participates, or (iii) with respect to which the Company or any of the Company’s
Subsidiaries has any  Liability (each an “Employee
Benefit Plan” and collectively, “Employee Benefit Plans”).

(b)   The
Company has delivered to Buyer complete and correct copies of the plan
documents, summary plan descriptions, IRS determination letters, annual reports
(Form 5500, with all applicable attachments), and all other material  documentation pursuant to which each Employee
Benefit Plan is maintained, funded and administered.

(c)   Each
Employee Benefit Plan (and each related trust, insurance contract or fund) has
been  maintained, funded and administered
in accordance with its terms and complies in form and in operation with all
applicable requirements of ERISA, the Code and other applicable  Laws. 
The Company, each of the Company’s Subsidiaries and  any Person that at any relevant time is or
was  treated as a single employer with
the Company or any of the Company’s Subsidiaries  under Section 414 of the Code (each, an “ERISA Affiliate”) have complied
with the requirements of Part 6 of 
Subtitle B of Title I of ERISA, Section 4980B of the 

 23
 

Code and any similar state  Law (“COBRA”).  Each Employee Benefit Plan that is intended
to meet the requirements of a “qualified plan” under Section 401(a) of the Code
has received a determination from the IRS that such Employee Benefit Plan is so
qualified, and nothing has occurred that could adversely affect the
qualification of such Employee Benefit Plan.

(d)   With
respect to each Employee Benefit Plan, all contributions or payments
(including, without limitation, all employer contributions, employee salary
reduction contributions and premium payments) that are due have been made
within the time periods prescribed by the terms of each Employee Benefit Plan,
ERISA and the Code, and all contributions or payments for any period ending on
or before the Closing Date that are not yet due shall have been made, paid or
properly accrued.

(e)   None
of the Company, any of the Company’s Subsidiaries  or any ERISA Affiliate maintains, sponsors,
contributes to, has any obligation to contribute to, or has any  Liability under or with respect to  (i) 
any “defined benefit plan” as defined in Section 3(35) of ERISA or any
other plan subject to the funding requirements of Section 412 of the Code or
Section 302  or Title IV of ERISA, (ii)
any “multiemployer plan” as defined in Section 3(37) of ERISA, (iii) any “multiple
employer welfare arrangement” as defined in Section 3(40) of ERISA, (iv) any “multiple
employer plan” within the meaning of Section 210 of ERISA or Section 413(c) of
the Code or, (v) any benefit plan, program, agreement or arrangement that
provides for post-retirement or post-termination  health or life insurance or other
welfare-type benefits.

(f)    With
respect to each Employee Benefit Plan, (i) there have been no non-exempt “prohibited
transactions” (as defined in Section 406 of ERISA or Section 4975 of the Code),
(ii) no “fiduciary” (as defined in Section 3(21) of ERISA) has any  Liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration or
investment of the assets of such Employee Benefit Plan, and (iii) no action,
proceeding, hearing, audit, investigation, suit, or claim (other than routine
claims for benefits) is pending or threatened, and, to the Knowledge of Seller,
no facts would give rise to or could reasonably be expected to give rise to any
such action, proceeding, hearing, audit, investigation, suit, or claim.

(g)   Each
Employee Benefit Plan (or any other agreement, program, policy or arrangement
by or to which the Company or any of the Company’s Subsidiaries is a party, is
bound or is otherwise liable) that constitutes a nonqualified deferred
compensation plan for purposes of Section 409A of the Code has been operated in
good faith compliance with Section 409A of the Code and all applicable guidance
from the  IRS.

(h)   Neither
the Company nor any of the Company’s Subsidiaries has any Liability (including,
without limitation, Liability under Title IV of ERISA or COBRA) with respect to
any “employee benefit plan” (as defined in Section 3(3) of ERISA) by reason of
being treated as a single employer under Section 414 of the Code with any
Person other than the Company or a Subsidiary of the Company.

(i)    The
consummation of the transactions contemplated by this Agreement will not,
either alone or in combination with another event, entitle any current or
former employee, 

 24
 

officer, director or contractor to any payment, or accelerate the time
of payment or vesting, or increase the amount of compensation due any such
employee, officer, director or contractor.

2.20.        Compliance with Laws; Permits;
Prohibited Payments.

(a)   Except
as set forth on Schedule 2.20(a), since July 1, 2005 the Company
and each of the Company’s Subsidiaries has complied in all material respects
with all applicable Laws relating to the operation of its  business. 
Except as set forth on Schedule 2.20(a), no written notices
have been received by and no claims have been filed against the Company or any
of the Company’s Subsidiaries alleging a violation of any such Laws.

(b)   The
Company and each of the Company’s Subsidiaries holds all permits, licenses,
certificates, accreditation and other authorizations of all Government Entities
required for the conduct of its business and the ownership of its properties,
and Schedule 2.20(b) sets forth a list of all of such permits,
licenses, certificates, accreditations and other authorizations.  No notices have been received by the Company
alleging the failure to hold any permit, license, certificate, accreditation or
other authorization of any Government Entity. 
The Company and each of the Company’s Subsidiaries is in compliance with
all terms and conditions of all permits, licenses, accreditations and
authorizations which it holds, other than any non-compliance that could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.  Except as
disclosed on Schedule 2.20(b), all of such permits, licenses,
accreditations and authorizations will be available for use by  the Company and each of the Company’s
Subsidiaries immediately after the Closing.

(c)   Neither
the Company  or any of the Company’s Subsidiaries has
directly or indirectly, (a) made or agreed to make any contribution,
payment or gift to any government official, employee or agent where either the
contribution, payment or gift or the purpose thereof was illegal under the laws
of any federal, state, local or foreign jurisdiction, (b) established or
maintained any unrecorded fund or asset for any purpose or made any false
entries on the books and records of the Company  or any of the
Company’s Subsidiaries  for
any reason, (c) made or agreed to make any contribution, or reimbursed any
political gift or contribution made by any other person, to any candidate for
federal, state, local or foreign public office or (d) paid or delivered
any fee, commission or any other sum of money or item of property, however
characterized, to any finder, agent, government official or other party, in the
United States or any other country, which in any manner relates to the assets,
business or operations of the Company.

2.21.        Environmental and Safety Matters.  Except as set forth on Schedule 2.21:

(a)   The
Company and each of the Company’s Subsidiaries have since July 1, 2005 complied
with and is currently in compliance with all applicable Environmental and
Safety Requirements.  Neither the Company
or any of the Company’s Subsidiaries has received any oral or written notice,
report or information since July 1, 2005 regarding any violations of or any
Liabilities or corrective, investigatory or remedial obligations arising under
Environmental and Safety Requirements which relate to the Company, any of the
Company’s Subsidiaries, or any of its properties or facilities that has not
been resolved.  Each of the Company’s and
all of the Company’s Subsidiaries has obtained and complied with, and is
currently in compliance with, all permits, licenses and other authorizations that
may be required pursuant to any Environmental 

 25
 

and Safety Requirements for the occupancy of its properties or
facilities or the operation of its business.

(b)   To
the Knowledge of Seller, none of the following exists at any property or
facility currently owned, occupied or operated by the Company or any of the
Company’s Subsidiaries:

(i)            underground storage
tanks;

(ii)           asbestos-containing
materials in any form or condition;

(iii)          materials or
equipment containing polychlorinated biphenyls; or

(iv)          landfills, surface
impoundments or other disposal areas.

(c)   Neither
the Company nor any of the Company’s Subsidiaries has treated, stored, disposed
of, arranged for or permitted the disposal of, transported, handled, exposed
persons to or released any pollutant, contaminant or other substance (including
any hazardous substance), noise or odor, 
or owned, occupied or operated any facility or property (and no such
property or facility is contaminated by any pollutant, contaminant or hazardous
substance) in a manner that has given or will give rise to any Liabilities,
including any Liability for response costs, corrective action costs, personal
injury, natural resource damages, property damage or attorneys fees or any
investigative, corrective or remedial obligations, pursuant to CERCLA or any
other Environmental and Safety Requirements.

(d)   Neither
the Company nor any of the Company’s Subsidiaries has, either expressly or by
operation of law, assumed or undertaken any Liability or corrective or remedial
obligation of any other Person relating to any Environmental and Safety
Requirements.

(e)   The
Company has furnished to Buyer all environmental audits, reports and other
material environmental documents relating to the Company, the Company’s
Subsidiaries or the Company’s predecessors or Affiliates.

2.22.        Affiliate Transactions.  Except as set forth on Schedule 2.22,
no employee, officer, director, shareholder (including Seller) or Affiliate of  the Company, or any individual related by blood, marriage
or adoption to any such individual or any entity in which any such Person or
individual owns any beneficial interest, is a party to any agreement, contract,
commitment or transaction with  the Company or
any of the Company’s Subsidiaries or has any interest in any property used by  the Company or any of the Company’s Subsidiaries
(collectively, the “Company Affiliate
Transactions”), other than agreements containing nondisclosure
and noncompetition and other similar types of agreements in the ordinary course
between employees of the Company and the Company, the substantive forms of
which are set attached to Schedule 2.22 (the “Scheduled Non Compete Agreements”).

2.23.        Suppliers and Customers.  Schedule 2.23 truly, completely
and correctly sets forth a list of the top thirty customers and suppliers of  the Company by dollar volume of sales and purchases,
respectively, for the fiscal year ended December 31, 2006, for the three  - month period
ended on March 31,2007 and for the time period of July 1, 2005 through December 31, 

 26
 

2005..  Since December 31, 2006, neither
the Company nor any of the Company’s Subsidiaries has received (i) any notice
from any supplier to the effect that any supplier will stop, materially
decrease the rate of, or materially change the terms (whether related to
payment, price or otherwise) with respect to, supplying materials, products or
services to the Company or any of the Company’s Subsidiaries (whether as a
result of the consummation of the transactions contemplated hereby or
otherwise) or (ii) any notice from any customer of the Company or any of the
Company’s Subsidiaries to the effect that any customer will stop, or materially
decrease the rate of, buying products of the Company or any of the Company’s
Subsidiaries (whether as a result of the consummation of the transactions
contemplated hereby or otherwise).

2.24.        Real
Property.

(a)   The
Company does not own any real property.

(b)   Schedule 2.24(b)
is a list of all leases, subleases and other occupancy agreements, including
all amendments, extensions and other modifications (the “Leases”) for real property (the “Leased Property” under which the
Company or any of the Company’s Subsidiaries is the “tenant,” “subtenant” or
other lessee party.  Either the Company
or the Company’s Subsidiaries has a good, legal and valid leasehold interest in
and to all of the Leased Property, subject to no Liens except for Permitted
Liens.  The Leases are in full force and
effect and are enforceable in accordance with their respective terms.  There exists no default or condition which,
with the giving of notice, the passage of time or both, could constitute a
default or permit a termination, modification or acceleration of rent under any
Lease.  The Company has previously
delivered to Buyer true, complete and correct copies of all the Leases.  Except as described on Schedule 2.24(b),
no consent, waiver, approval or authorization is required from the landlord
under any Lease as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby.

(c)   The Leased Property constitutes all of the real
property owned, leased, occupied or otherwise utilized in connection with the
business of the Company.  Other than the
Company and the Company’s Subsidiaries, there are no parties in possession or
parties having any current or future right to occupy any of the Leased
Property.  The Leased Property is in good
condition and repair (normal wear and tear excepted) and is sufficient for the
conduct of the business of the Company and the Company’s Subsidiaries.  The Leased Property and all plants, buildings
and improvements located thereon conform to all applicable building, zoning and
other laws, ordinances, rules and regulations. 
All permits, licenses and other approvals necessary to the current
occupancy and use of the Leased Property have been obtained, are in full force
and effect and have not been violated. 
There is no pending or, to the Knowledge of Seller, any threatened
condemnation proceeding, lawsuit or administrative action affecting any portion
of the Leased Property.

2.25.        Personal
Property.

(a)   The
Company has good title to all personal property of any kind or nature which the
Company purports to own, free and clear of all Liens, except for
(i)  Liens for non-delinquent taxes and non-delinquent statutory
Liens arising other than by reason of default, (ii) statutory Liens of
landlords, Liens of carriers, warehousemen, mechanics and materialmen 

 27
 

incurred in the past customary practice for sums not yet due;
(iii) Liens incurred or deposits made in the past customary practice in
connection with worker’s compensation, unemployment insurance and other types
of social security; and (v) other Permitted Liens.  The Company or a Subsidiary of the Company,
as lessee, has  the right under
valid and subsisting leases to use, possess and control all personal property
leased by the Company or such Subsidiary as now used, possessed and controlled
by the Company.

(b)   All
machinery, equipment and other tangible assets currently being used by the
Company or the Company’s Subsidiaries which are owned or leased by the Company
or the Company’s Subsidiaries are in good operating condition, maintenance and
repair, ordinary wear and tear excepted, are usable in the ordinary course of
business and are reasonably adequate and suitable for the uses to which they
are being put.

2.26.        Product Liability.  To the Knowledge of Seller, neither the
Company nor any of the Company’s Subsidiaries have any Liability (and to the
Knowledge of Seller, there is no basis for any present or future action, suit,
proceeding, order, investigation or claim against the Company or any of the
Company’s Subsidiaries giving rise to any Liability) arising out of any injury
to individuals or property as a result of the ownership, possession, or use of
any product sold or delivered by the Company or any of the Company’s
Subsidiaries.

2.27.        Bank Accounts.  Schedule 2.27 hereto sets forth with
regard to each bank account, safety deposit box and lock box of the Company and
each of the Company’s Subsidiaries, the name of the institution where such
account is maintained, the account number, a list of the authorized signatories
and its purpose.  Other than the accounts
listed on Schedule 2.27 hereto, neither the Company nor any of the
Company’s Subsidiaries maintains any accounts, lockboxes or safe deposit boxes
at any bank, trust company, savings institution, brokerage firm or other
financial institution.

2.28.        Disclosure.  The representations and warranties contained
in this Article II do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and
information contained in this Article II not misleading.

Article III

Representations and Warranties of Seller

As a material inducement to Buyer to enter into this
Agreement and to consummate the transactions contemplated hereby, Seller
represents and warrants to Buyer as follows:

3.1.          Power and Authority.  Seller possesses all requisite corporate
power and authority necessary to carry out the transactions contemplated by
this Agreement.

3.2.          Authorization; No Breach.

(a)   The
execution, delivery and performance of this Agreement and all other agreements
or instruments contemplated hereby to which Seller is a party or by which
Seller is bound have been duly authorized by Seller. Assuming that Buyer has
duly authorized, executed and delivered this Agreement and all other agreements
contemplated hereby to which it is a 

 28
 

party, this Agreement and all other agreements contemplated hereby to
which Seller is a party, when executed and delivered by Seller in accordance
with the terms hereof, shall each constitute a valid and binding obligation of
Seller, enforceable in accordance with its terms, , except as the
enforceability thereof may be limited by (A) applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar laws in effect
which affect the enforcement of creditors’ rights generally or (B) general
principles of equity, whether considered in a proceeding at law or in equity.

(b)   The
execution, delivery and performance by Seller of this Agreement and all other
agreements contemplated hereby to which Seller is a party, and the fulfillment
of and compliance with the respective terms hereof and thereof by Seller, do
not and shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under (whether with
or without the passage of time, the giving of notice or both),
(iii) result in the creation of any Lien upon the Shares pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any third party that has not been obtained or
Government Entity pursuant to, (A) the organizational documents of Seller,
(B) any Law to which Seller is subject or (C) any material agreement,
instrument, order, judgment or decree to which Seller is subject.

3.3.          Title to Shares.  As of immediately prior to the Closing, all
of the Shares will be owned of record and beneficially by Seller, and Seller
will have good and valid title to the Shares, free and clear of all Liens.  Seller shall sell to Buyer good and valid
title to the Shares free and clear of all Liens.

3.4.          Affiliate Transactions  Except as set forth on Schedule 3.4,
no employee, officer, director, shareholder or Affiliate of  Seller,
or any individual related by blood, marriage or adoption to any such individual
or any entity in which any such Person or individual owns any beneficial
interest, is a party to any agreement, contract, commitment or transaction with  the Company or any of the Company’s Subsidiaries or has any
interest in any property used by  the Company or
any of the Company’s Subsidiaries (together with the Company Affiliate
Transactions, the “Affiliate Transactions”),
provided however, that some of the stockholders of the Sellers may have entered
into Scheduled Non Compete Agreements with the Company.

3.5.          Brokerage.  Except as set forth on Schedule 2.16, other than East
Peak Advisors, whose fees and expenses will be paid by Seller, there are
no claims for brokerage commissions, finders’ fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement to which Seller is a party or to which Seller is
subject for which Company or any of the Company’s Subsidiaries or Buyer could
become obligated.

3.6.          Litigation, etc.  There are no actions, suits, proceedings
(including any arbitration proceedings), orders, investigations or claims
pending or threatened against or affecting Seller in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with
the transactions contemplated hereby.

 

 29

Article IV

Representations and Warranties of Buyer

As a material inducement to Company and Seller to
enter into this Agreement and consummate the transactions contemplated hereby,
Buyer represents and warrants to the Company and Seller as follows:

4.1.  Organization,
Power and Authority.  Buyer is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of formation.  Buyer
possesses all requisite power and authority necessary to carry out the
transactions contemplated by this Agreement.

4.2.  Authorization;
No Breach

(a)   The
execution, delivery and performance of this Agreement and all other agreements
or instruments contemplated hereby to which Buyer is a party or by which Buyer
is bound have been duly authorized by Buyer. Assuming that Seller have duly
authorized, executed and delivered this Agreement and all other agreements
contemplated hereby to which Seller is a party, this Agreement and all other
agreements contemplated hereby to which Buyer is a party, when executed and delivered
by Buyer in accordance with the terms hereof, shall each constitute a valid and
binding obligation of Buyer, enforceable in accordance with its terms, , except
as the enforceability thereof may be limited by (A) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or similar laws
in effect which affect the enforcement of creditors’ rights generally or (B)
general principles of equity, whether considered in a proceeding at law or in
equity.

(b)   The
execution, delivery and performance by Buyer of this Agreement and all other
agreements contemplated hereby to which Buyer is a party, and the fulfillment
of and compliance with the respective terms hereof and thereof by Buyer, do not
and shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under (whether with
or without the passage of time, the giving of notice or both), (iii) give
any third party the right to modify, terminate or accelerate any obligation under,
(iv) result in a violation of, or (v) require any authorization,
consent, approval, exemption or other action by or notice or declaration to, or
filing with, any Government Entity pursuant to, (A) the organizational
documents of Buyer, (B) any Law to which Buyer is subject, or (C) any
material agreement, instrument, order, judgment or decree to which Buyer is
subject.

4.3.  Brokerage.  There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on arrangement or agreement
to which Buyer is a party or to which Buyer is subject for which Seller could
become liable or obligated.

4.4.  Litigation,
etc.  There are no actions, suits,
proceedings (including any arbitration proceedings), orders, investigations or
claims pending or, to the knowledge of Buyer, threatened against or affecting
Buyer in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with the transactions contemplated hereby.

 30
 

Article V

Closing Deliveries

5.1.  Deliveries
by the Company and Seller.  At the
Closing, in addition to the items specified in Section 1.5(b)(i), the
Company and Seller shall deliver to Buyer the following:  

(a)   Opinions
of the Company and Seller’s Counsel.  An opinion from Bracewell & Giuliani,
counsel for the Seller, and an opinion from Parsons Behle & Latimer,
counsel for the Company with respect to the matters set forth in Exhibit E,
which shall be addressed to Buyer, dated as of the Closing Date and permit
reliance thereon by any future lender to the Buyer.

(b)   Consents
and Approvals.  All permits,
authorizations, consents and approvals required to be obtained by the Company
and Seller to consummate the transactions contemplated by this Agreement (the “Consents”) as set forth on Schedule 2.4.

(c)   Employment
Agreements.  An employment agreement
with each of the employees set forth on Schedule 5.1(c), substantially
in the form and substance as Exhibit F (the “Employment Agreements).

(d)   Transition
Services Agreement.  A transition
services agreement between the Seller, the Company and the Buyer substantially
in the form and substance as Exhibit G (“Transition Services Agreement”).

(e)   License
Agreement.  A license agreement
between the Seller and the Company substantially in the form and substance as Exhibit
H (“License Agreement”).

(f)    Prior
Stock Purchase Agreement.  An
assignment agreement assigning the rights and benefits of the Seller pursuant
to (i) the Stock Purchase Agreement between Seller and the Company dated as
of  June 24, 2005 (the “Prior Stock Purchase Agreement”), and
(ii) each of the indemnity agreements between Seller and the Founders (as
defined in the Prior Stock Purchase Agreement) of the Company listed on Schedule
5.1(f), substantially in the form and substance as Exhibit I (“Assignment Agreement”).

(g)   Pledge
Agreement.  An executed copy of the
Pledge Agreement.

(h)   Bonus
Pool.  Buyer shall have received
evidence that all earnings, earn outs, employee bonus payoff and any similar
arrangements, under the Prior Stock Purchase Agreement, including, without
limitation, the Bonus Pool, shall have been terminated without any potential
liability of Buyer, the Company or any of the Company’s Subsidiaries.

(i)    UCC-3’s;
Payoff Letters.  Fully executed UCC-3
termination statements and other terminations, pay-offs and/or releases, or, at
Buyer’ option, assignments, necessary to terminate, release or assign, as the
case may be, all Liens on the properties  of
the Company and each of the Company’s Subsidiaries and evidence of the complete
satisfaction in full of all outstanding Indebtedness  of the Company and each of the Company’s Subsidiaries (other
than with respect to capitalized leases for equipment used in the ordinary
course of business).

 31
 

(j)    Termination
of Affiliate Transactions.  Buyer
shall have received evidence satisfactory to Buyer of the termination and an
appropriate release of all Affiliate Transactions other than those set forth on
Schedule 5.1(j).

(k)   Closing
Documents.  All of the following
documents:

(i)            physical
possession of all books and records, licenses and permits, policies, contracts,
plans or other instruments of the Company and each of the Company’s
Subsidiaries that are in the possession of the Company or Seller; provided that
all such materials other than the certificate(s) representing the Shares (which
shall be delivered to Buyer at the Closing) shall be deemed delivered to Buyer
if they are present at the Company’s corporate office;

(ii)           good standing
certificates of  the Company and
each of the Company’s Subsidiaries from the state of its formation and each
state where it is qualified to conduct business, dated within fifteen (15) days
prior to the Closing Date;

(iii)          a copy of  the Company’s and each of the Company’s
Subsidiaries formation documentation certified by the Secretary of the state of
its formation or equivalent governmental officer; and

(iv)          such other documents
relating to the transactions contemplated by this Agreement as Buyer may
reasonably request.

5.2.  Deliveries
by Buyer.  At the Closing, in
addition to the items specified in Section 1.5(b)(ii), Buyer shall deliver
to Seller the Transition Services Agreement.

Article VI

Certain Covenants and Agreements

6.1.  Transfer
Taxes. 
All transfer, documentary, sales, use, registration and other
such taxes and the related fees (including any penalties, interests and
additions to Taxes) incurred in connection with the transactions contemplated
by this Agreement shall be paid by Seller. 
The parties shall cooperate in timely preparing and filing all Tax
Returns as may be required to comply with the provisions of such Tax Laws.  Buyer shall cooperate with Seller to
minimize, to the extent permitted by law, the amount of any sales taxes,
transfer taxes or similar taxes and fees imposed with respect to the
transactions contemplated by this Agreement, including by utilizing any
applicable sales tax exemptions for occasional sales.

6.2.  Fees
and Expenses.  Buyer shall pay all
costs and expenses incurred by Buyer in connection with the negotiation,
preparation and entry into this Agreement and the consummation of the
transactions contemplated hereby.  Seller shall pay at Closing (i) all
costs and expenses incurred by Seller, the Company or any of the Company’s Subsidiaries
in connection with the negotiation, preparation and entry into this Agreement
and the consummation of the transactions contemplated hereby and (ii) any
claims for brokerage commissions, finders’ fees or similar compensation
incurred by Seller in connection with the transactions contemplated by this
Agreement.

 32
 

6.3.  Non-Solicitation
and Non-Competition.

(a)   Seller
hereby covenants and agrees that on and after the Closing until the fifth
anniversary of the Closing Date (the “Restricted
Period”), Seller and its Affiliates (including any company or other
entity controlled by or under common control with Seller (whether currently
existing or hereafter acquired or formed)) shall not, directly or indirectly,
engage (whether as principal, agent, partner, shareholder, or otherwise,
whether alone or in association with any other person, corporation or other
entity) in any transaction or other activity involving the business of the
Company or any of the Company’s Subsidiaries as currently conducted, including,
without limitation, the business of marketing, selling and brokering vacation
rentals and/or, vacation packages to or for resorts (the “Restricted
Business”).

(b)   Seller
hereby covenants and agrees that during the Restricted Period, Seller and its
Affiliates (including any company or other entity controlled by or under common
control with Seller (whether currently existing or hereafter acquired or
formed)) shall not operate or otherwise include (or cause or permit to be
included) a tab, pixel tag, web bug or other device or area on any of its
websites that measures, accumulates or otherwise collects information or data
from users of the website with respect to travel or travel-related services
(including services with respect to the Restricted Business), either for its
own purposes or for sale to a third party (this proviso to be known as the “Restricted
Proviso”)

(c)   Notwithstanding
Section 6.3(a) and Section 6.3(b) above, Seller may run standard
banner advertising of advertisers in the travel industry on its websites.

(d)           Seller hereby
covenants and agrees that during the Restricted Period, Seller and its
Affiliates (including, without limitation, any company or other entity
controlled by or under common control with Seller (whether currently existing
or hereafter acquired or formed)) shall not, directly or indirectly, (i)
solicit or induce, or attempt to solicit or induce, any employee of the Company
or of any of the Company’s Subsidiaries to leave the employ of the Company or
any of its Affiliates for any reason whatsoever, (ii) hire or employ any
employee of the Company or of any of the Company’s Subsidiaries, (iii) without
the prior written consent of Buyer, employ any employee of the Company or of
any of the Company’s Subsidiaries within one year of such Company employee
leaving the employment of the Company or any of the Company’s Subsidiaries, or
(iv) solicit or induce, or attempt to solicit or induce, any customer of the
Company or of any of the Company’s Subsidiaries to purchase any goods or
products with respect to the Restricted Business, or otherwise impede or
interfere in any way with any customer, supplier or other business relationship
of any of the Company, Buyer or any of the Company’s Subsidiaries or any of
their respective affiliates; provided  however that Seller will be
deemed not to have violated this clause merely as a result of publishing a
solicitation of general circulation.

(e)           Seller acknowledges
that the covenants contained in Sections 6.3(a), 6.3(b) and 6.3(d)
hereof are of a special, unique, unusual and extraordinary character, which
give them peculiar value, the loss of which cannot be reasonably or adequately
compensated in an action at law, and that, in the event there is a breach
thereof by Seller or any of its Affiliates, Buyer will suffer irreparable harm,
the amount of which will be impossible to ascertain.  Accordingly, Buyer, shall be entitled, if
either so elects, to institute and prosecute proceedings in 

 33
 

any court of
competent jurisdiction, either at law or in equity, to obtain damages for any
breach or to enforce specific performance of the provisions or to enjoin Seller
or any of its Affiliates from committing any act in breach of any covenant
contained in Sections 6.3(a), 6.3(b) or 6.3(d) of this
Agreement.  If Buyer is obliged to resort
to the courts for the enforcement of any of the covenants contained in this Section
6.3, each such covenant shall be extended for a period of time equal to the
period of such breach, if any, which extension shall commence on the later of (i)
the date on which the original (unextended) term of such covenant is scheduled
to terminate or (ii) the date of the final court order (without further right
of appeal) enforcing such covenant.

(f)            Notwithstanding Sections
6.3(a) or 6.3(b) hereof, nothing contained herein shall prohibit
Seller or any of its Affiliates from owning not in excess of 2% in the
aggregate of the capital stock of any corporation engaged in the Restricted
Business if such stock is publicly traded on any national or regional stock
exchange , including the NASDAQ Global Market and the Nasdaq Global Select
Market.

(g)           If, at the time of
enforcement of this Section 6.3, a court shall hold that the duration,
scope or area restrictions stated herein are unreasonable under circumstances
then existing, the parties agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.

(h)           Notwithstanding
anything else in this Section 6.3, the Restricted Period shall terminate
if all of Seller’s issued and outstanding common stock (which is currently
traded on NASDAQ) is acquired by a person in a manner that results in Seller
ceasing to be a publicly traded company.

6.4.  Seller
Buy-Out Option.  Notwithstanding
anything contained in Section 6.3(b) or Section 8.2, Seller may
elect to terminate the obligations set forth in Section 6.3(b) and Section
8.2 at an earlier date by making a one-time payment of any of the amounts (“Use
Payments”) to the Buyer as described in this Section 6.4.  If the Seller makes a Use Payment to the
Buyer of $3,000,000 anytime after the second anniversary of the date hereof,
$2,000,000 anytime after the third anniversary of the date hereof, or
$1,000,000 anytime after the fourth anniversary of the date hereof all
obligations/restrictions set forth in Section 6.3(b) and Section 8.2
shall automatically terminate.  Seller
may make a Use Payment by way of set-off against the amounts owing to the
Seller pursuant to the Junior Seller Note by delivery of written notice of such
set-off to Buyer and as described in the Junior Seller Note.  For purposes of the Junior Seller Note any
such set-off payment will be treated as if such payment were made at the date
thereof and any interest amount that would have been due and payable shall
remain payable pursuant to the terms of such Junior Seller Note.

6.5.  Further
Assurances.  Each party will execute
and deliver such further instruments of conveyance and transfer and take such
additional actions as any other party may reasonably request to effect,
consummate, confirm or evidence the transactions contemplated hereby and will
act in a good faith, reasonable manner with respect to such additional actions

 34
 

6.6.  Merchant
Credit Card Processing Account. 
Seller hereby acknowledges that after the Closing the Company will work
to establish its own merchant credit card processing account (a “Company
MCCP Account”).  Seller agrees that
if in connection therewith, it would be useful for the Buyer to provide a first
priority pledge of the Shares to the provider of such Company MCCP Account,
then Seller will (i) permit such first priority pledge of the Shares, (ii)
amend the Pledge Agreement to the extent necessary for Buyer to put in place
such first priority pledge of the Shares (with the understanding that the
Pledge Agreement will remain in place as a second priority pledge of the
Shares) and (iii) take such other actions as may be reasonably necessary for
Buyer to put in place such first priority pledge of the Shares (including,
without limitation, the delivery of the stock certificate(s) that represent the
Shares to the provider of such Company MCCP Account).    Moreover, should there be any cost or fee
associated with Seller granting a first priority pledge for a Company MCCP
Account, including, but not limited to any fee by Wells Fargo with respect to
the granting of such a pledge, Seller and Company shall equally share such
cost.

6.7.  Employee
Benefits Matters.  Except as set
forth on Schedule 6.7, the Seller shall assume, retain and be solely
responsible for all Liabilities relating to or at any time arising under or in
connection with any Employee Benefit Plan or any other “employee benefit plan”
(as defined in Section 3(3) of ERISA) or other benefit plan, program, agreement
or arrangement of any kind at any time maintained, sponsored or contributed or
required to be contributed to by the Seller, the Company, any of the Company’s
Subsidiaries, or any ERISA Affiliate, or with respect to which the Seller, the
Company, any of the Company’s Subsidiaries, or any ERISA Affiliate has or could
have any Liability.  The Seller hereby
agrees that any current or former employee of the Company or any of the Company’s
Subsidiaries who (i) as of the Closing Date is receiving or entitled to receive
short-term disability benefits and who subsequently becomes eligible to receive
long-term disability benefits, or (ii) as of the Closing Date is receiving or
entitled to receive long-term disability benefits, shall become eligible or
continue to be eligible, as applicable, to receive long-term disability
benefits under the Seller’s long-term disability plan unless and until such
individual is no longer disabled. 
Effective as of the Closing the Seller shall take all actions as may be
necessary to fully vest all employees of the Company or any of the Company’s
Subsidiaries in their account balances under the Seller’s 401(k) plan and shall
make any matching or profit sharing contributions to the Seller’s 401(k) plan
on behalf of such employees that would have been made irrespective of any
end-of-year service requirements otherwise applicable to such contributions, prorated
for the portion of the plan year ending on the Closing Date

6.8.    Release
of Company Employees..  Seller hereby
agrees and acknowledges that any employment by the Company or any of the
Company’s Subsidiaries or Affiliates after Closing of employees who are
employed by the Company, Company’s Subsidiaries or Affiliates immediately prior
to Closing (or who have been employed by the Company, Company’s Subsidiaries or
Affiliates within the two (2) months preceding the Closing) will not be a
breach of any of Seller’s rights under any Scheduled Non Compete Agreement or
similar agreement that such employee has entered into, and Seller hereby
releases any and all claims that Seller may have against either the employee or
the Company, the Company’s Subsidiaries or Affiliates for a breach of such
agreement with respect to that employee’s employment with the Company, or any
of the Company’s Subsidiaries or Affiliates after the date hereof.

 35

Article VII

Indemnification

7.1.  Survival
of Representations and Warranties. 
The representations and warranties in this Agreement shall survive the
Closing for a period of two years following the Closing Date, except that the
representations and warranties set forth in Sections 2.1 (Organization and
Corporate Power), 2.2 (Capitalization), 2.3 (Subsidiaries; Investments), 2.7
(Absence of Undisclosed Liabilities), 2.12 (Tax Matters), 2.19 (Employee
Benefits), 2.22 (Affiliate Transactions), 3.1 (Power and Authority), 3.3 (Title
to Shares), 3.4 (Affiliate Transactions), 3.5 (Brokerage), and 4.1
(Organization, Power and Authority) (collectively the “Material Representations”) shall
survive until 90 days after the end of the applicable statute of
limitations; provided, that any
representation or warranty in respect of which indemnity may be sought under
this Article VII, and the indemnity with respect thereto, shall survive the
time at which it would otherwise terminate pursuant to this Section 7.1 if
written notice of the specific inaccuracy or breach or potential inaccuracy or
breach thereof giving rise to such right or potential right of indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time.  The representations and
warranties in this Agreement or in any writing delivered by any party hereto to
another party in connection herewith shall survive for the periods set forth in
this Section 7.1 and shall in no event be affected by any investigation,
inquiry or examination made for or on behalf of any party, or the Knowledge of
any party’s officers, directors, shareholders, employees or agents or the
acceptance by any party of any certificate or opinion hereunder.

7.2.  General
Indemnification.

(a)   Indemnification
Obligations of Seller.  Subject to
the limitations contained in this Article VII, after the Closing, Seller shall
indemnify Buyer, the Company and their respective Affiliates, shareholders,
partners, officers, directors, employees, agents, representatives, successors
and permitted assigns (collectively, “Buyer
Indemnified Parties”) and save and hold each of them harmless
against and pay on behalf of or reimburse such Buyer Indemnified Parties as and
when incurred for any loss, liability, action, cause of action, cost, damage,
Tax or expense, whether or not arising out of third party claims (including
interest, penalties, reasonable attorneys’, consultants’ and experts’ fees and
expenses and all amounts paid in investigation, defense or settlement of any of
the foregoing and after deducting all insurance proceeds in connection with any
of the foregoing) (collectively, “Losses”,
and each a “Loss”), which
any such Buyer Indemnified Party suffers, sustains or becomes subject to, as a
result of, in connection with, relating or incidental to or by virtue of:

(i)            any facts or
circumstances which constitute a breach of any representation or warranty of
the Company or Seller under this Agreement, or in any of the certificates or
other instruments or agreements furnished by the Company or Seller pursuant to
this Agreement; provided, that
for purposes of this Article VII, the qualifications as to materiality and
Material Adverse Effect (but not Knowledge) contained in such representations
and warranties shall not be given effect;

(ii)           any nonfulfillment
or breach of any covenant, agreement or other provision by the Company (prior
to the Closing) or Seller under this Agreement;

 36
 

(iii)          any nonfulfillment or breach of
any covenant, agreement or other provision by the Seller under Section
8.1(a) of this Agreement resulting in any inability of the Buyer to deduct,
depreciate, amortize or otherwise make use of the step up in asset basis that
would have arisen as a result of a Code Section 338(h)(10) election (any Losses
arising as a result of such nonfulfillment or breach to be calculated using the
highest marginal Federal, State and local tax rates); provided, however, that
Seller shall have no obligations under this Section 7.2(a)(iii) if Buyer
does not reasonably cooperate with Seller to timely make joint elections
pursuant to Section 8.1(a)(i) or if Buyer files a joint election in
violation of Section 8.1(a)(iii).

(iv)          to the extent the following
items are not included in the final determination of the  Purchase Price (as determined pursuant to Section
1.4): (A)  any Closing Indebtedness, (B) any Unpaid Seller
Expenses, (C) any Pre-Closing Taxes, (D) any liabilities arising from any
earnings, earn outs, employee bonus payoff and any similar arrangements, under
the Prior Stock Purchase Agreement, including, without limitation, the Bonus
Pool, and (E) ,other than (i) those liabilities specifically set forth on Schedule
7.2(a)(iv), and (ii) those liabilities which arise after the Closing Date
pursuant to the continuation of the Material Contracts in the ordinary course
of business solely with respect to the operation of the Company’s and the
Company’s Subsidiaries’ business after the Closing, any and all liabilities of
Company or of any of the Company’s Subsidiaries based upon, arising out of,
relating to or otherwise in connection with any events, actions, occurrences,
omissions, circumstances or conditions occurring or existing on or prior to the
Closing Date (whether asserted prior to, on or after the Closing Date).  For
the avoidance of doubt, except as provided in the preceding clause (ii), the
Seller indemnifies Buyer, the Company and the other Buyer Indemnified Parties
for all liabilities and obligations that are not listed on Schedule
7.2(a)(iv) but are listed on any other Schedule hereto.

If and to the extent any provision of this Section 7.2
is unenforceable for any reason, Seller hereby agrees to make the maximum
contribution to the payment and satisfaction of the Loss for which
indemnification is provided for in this Section 7.2 which is
permissible under applicable Laws. 
Notwithstanding anything contained herein, in no event shall the Company
be required to provide indemnification or contribution for any obligation of
Seller under this Section 7.2; provided, that
this sentence shall not apply as to any proceeds a director or officer would be
entitled to pursuant to and under the Company’s director and officers
insurance.

(b)   Indemnification
Obligations of Buyer.  After the
Closing, Buyer shall indemnify Seller and its Affiliates (other than the
Company) (collectively, “Seller
Indemnified Parties”) and hold them harmless against any Losses
which Seller Indemnified Parties may suffer, sustain or become subject to, as a
result of, in connection with, relating or incidental to or by virtue of:

(i)            any facts or
circumstances which constitute a breach of any representation or warranty of
Buyer under this Agreement or in any of the certificates or other instruments
or documents furnished by Buyer pursuant to this Agreement; provided, that for purposes of this
Article VIII, the qualifications as to materiality and Material Adverse Effect
(but not Knowledge) contained in such representations and warranties shall not
be given effect;  or

 37
 

(ii)           any nonfulfillment
or breach of any covenant, agreement or other provision by Buyer under this
Agreement.

If and to the extent any provision of this Section 7.2
is unenforceable for any reason, Buyer hereby agrees to make the maximum
contribution to the payment and satisfaction of the Loss for which indemnification
is provided for in this Section 7.2 which is permissible under
applicable Laws.

7.3.  Limitations
on Indemnification.  Notwithstanding
the foregoing, neither of Seller nor Buyer shall be required to indemnify Buyer
Indemnified Parties or Seller Indemnified Parties, as the case may be, in
respect of any Losses suffered by Buyer Indemnified Parties or Seller
Indemnified Parties, as the case may be, solely as a result of any facts or
circumstances which constitute a breach of any representation or warranty
listed in Article II, Article III or Article IV unless the aggregate of all
Losses (other than Losses arising out of a breach of any Material
Representation or Sections 2.12 (Tax Matters) and 2.15 (Litigation))
suffered by Buyer Indemnified Parties or Seller Indemnified Parties, as the
case may be, exceeds an amount equal to $100,000, in which case, all Losses in
excess of such amount shall be recoverable pursuant to this Article VII.

7.4.  Manner
of Payment.  Any indemnification
payments shall be made together with interest accruing thereon from the date
written notice of the indemnification claim is made to the date of payment at
the Applicable Rate.

7.5.  Determination
of Loss.  For all purposes of this
Article VII, “Loss” shall be net of any insurance or other recoveries actually
paid to the party making a claim under this Article VII or its Affiliates in
connection with the facts giving rise to the right of indemnification.

7.6.  Notice
and Defense.  Any Person making a
claim for indemnification under this Section 7.2 (an “Indemnitee”) shall notify the
indemnifying party (an “Indemnitor”)
of the claim in writing promptly after receiving written notice of any action,
lawsuit, proceeding, investigation or other claim (a “Proceeding”) against it (if by a third
party), describing the claim, the amount thereof (if known and quantifiable)
and the basis thereof; provided,
that the failure to so notify an Indemnitor shall not relieve the Indemnitor of
its obligations hereunder unless and to the extent the Indemnitor shall be
actually prejudiced by such failure to so notify.  Any Indemnitor shall be entitled to
participate in the defense of such Proceeding giving rise to an Indemnitee’s
claim for indemnification at such Indemnitor’s expense, and at its option (subject
to the limitations set forth below) shall be entitled to assume the defense
thereof by appointing a reputable counsel reasonably acceptable to the
Indemnitee to be the lead counsel in connection with such defense; provided, that prior to the Indemnitor
assuming control of such defense, Indemnitor shall (x) first demonstrate
to the Indemnitee in writing the Indemnitor’s financial ability to provide full
indemnification to the Indemnitee with respect to such Proceeding, and (y)
agree in writing to be fully responsible for all Losses relating to such
Proceeding; and provided  further, that:

(a)   the
Indemnitee shall be entitled to participate in the defense of such claim and to
employ counsel of its choice for such purpose; provided,
that the fees and expenses of such separate counsel shall be borne by the
Indemnitee (other than any fees and expenses of such 

 38
 

separate counsel (x) that are incurred prior to the date the Indemnitor
effectively assumes control of such defense or (y) retained because a conflict
of interest exists between the Indemnitor and the Indemnitee, each of which,
notwithstanding the foregoing, shall be borne by the Indemnitor);

(b)   the
Indemnitee shall be entitled to assume control of such defense and Indemnitor
shall pay the fees and expenses of counsel retained by the Indemnitee if (A)
the claim for indemnification relates to or arises in connection with any
criminal proceeding, action, indictment, allegation or investigation or
otherwise involves any Government Entity (provided, that in such event (x) the
Indemnitor shall be entitled to participate in the defense of such claim and to
employ counsel of its choice for such purpose (provided, that the fees and expenses of such
separate counsel shall be borne by the Indemnitor), and (y) the Indemnitor
shall be entitled to review the files and record relating to such defense upon
request of the Indemnitor); (B) the Indemnitee reasonably believes an adverse
determination with respect to the Proceeding giving rise to such claim for
indemnification would be detrimental to or injure the Indemnitee’s reputation
or future business prospects; (C) the claim seeks an injunction or equitable
relief against the Indemnitee; (D) a conflict of interest exists between the
Indemnitor and the Indemnitee, except that the fees and expenses of such
counsel shall be borne by the Indemnitor; or (E) the Indemnitor failed or is
failing to vigorously prosecute or defend such claim; and

(c)   if
the Indemnitor shall control the defense of any such claim, the Indemnitor shall
obtain the prior written consent of the Indemnitee before entering into any
settlement of a Proceeding or ceasing to defend such Proceeding if, pursuant to
or as a result of such settlement or cessation, injunctive or other equitable
relief will be imposed against the Indemnitee or if such settlement does not
expressly and unconditionally release the Indemnitee from all Liabilities with
respect to such claim, without prejudice.

7.7.  Waiver.  Seller agrees that Seller shall not make any
claim for indemnification hereunder against the Company or any of the Company’s
Subsidiaries by reason of the fact that Seller or one or more of its officers
was a shareholder, director, officer, employee or agent of the Company or one
of the Company’s Subsidiaries or was serving at the request of the Company or
one of the Company’s Subsidiaries as a partner, trustee, director, officer,
employee or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses
or otherwise) with respect to any Proceeding brought by any of Buyer
Indemnified Parties against Seller or any claim against Seller in connection
with this Agreement and Seller acknowledges and agrees that Seller shall have
no claims or right to contribution or indemnity from the Company or any of the
Company’s Subsidiaries with respect to any amounts paid by Seller pursuant to
this Section 7.2; provided,
that this waiver shall not apply as to any proceeds such director or officer
would be entitled to pursuant to and under the Company’s director and officer
insurance.

7.8.  Purchase
Price Adjustment.  All
indemnification payments under this Article VII shall be deemed adjustments to
the Purchase Price.

7.9.  Sole
Remedy.  Indemnification hereunder
shall be the sole remedy for breach of any representation, warranty or covenant
under this Agreement, other than any claim of fraud or intentional
misrepresentation.

 39
 

Article VIII

Post-Closing Covenants and Agreements

Each of the parties hereto agrees as follows with
respect to the period after the Closing Date:

8.1.  Tax
Matters.

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

(i)            Within 60 days of
the Closing the Seller will deliver a duly executed IRS Form 8023 authorizing a
Code Section 338(h)(10) election with respect to the Company and each of the
Company’s Subsidiaries to the Buyer.

(ii)           At the request of
Buyer, Buyer and Seller shall timely make joint elections (collectively the “338(h)(10) Election”) with respect
to the purchase of the Shares (and any resulting deemed purchase of the shares
of any Company Subsidiary) under (A) Section 338(h)(10) of the Code and (B) any
analogous election with respect to state, local or foreign income Taxes, to the
extent that such election is separately available, in each state, local and
foreign jurisdiction where the Company or any of the Company’s Subsidiaries
currently files income Tax Returns.

(iii)          Buyer and Seller
agree that, except as Buyer and Seller may otherwise agree in writing or as may
be required otherwise pursuant to a final determination within the meaning of
Section 1313(a) of the Code or corresponding provision of state, local or
foreign income Tax law, for United States federal income Tax purposes, the
amount of the adjusted deemed sale price (as determined pursuant to Treasury
Regulations §1.338-4) for the assets of the Company and the assets of any
Company Subsidiary for which a 338(h)(10) Election is made (collectively the “Tax Purchase Price”) deemed
acquired pursuant to a 338(h)(10) election shall be allocated in accordance
with Treasury Regulations §§1.338-6 and 1.338-7.  Except as Buyer and Seller may otherwise
agree or as may be required otherwise pursuant to a final determination within
the meaning of Section 1313(a) of the Code, the allocation required pursuant to
the immediately preceding sentence shall be binding on Seller and Buyer for all
Tax reporting purposes.  The allocation
of the Tax Purchase Price pursuant this Section 8.1(a), as it may be modified
by any agreement of Buyer and Seller or any final determination within the
meaning of Section 1313(a) of the Code or corresponding provision of state,
local or foreign income Tax law, is referred to herein as the “Allocation.”  Buyer may not file any 338(h)(10) Election
that does not reflect the Allocation, provided that if Buyer and Seller have
not agreed on the Allocation by September 15, 2007 that all open issues with
respect to the Allocation shall be referred to the Accounting Firm whose
determination shall be final.

(b)   Tax
Returns; Cooperation on Tax Matters. 
Buyer and Seller shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns
pursuant hereto and any audit, litigation or other proceeding with respect to
Taxes.  Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other proceeding.  Such cooperation shall
also include notification of the other party of any 

 40
 

audit or other issues, (including tax allocations and return positions)
that may affect the Tax treatment of an Item for a year relevant to that other
party.  Where such audit or other issues,
if sustained, could reasonably be expected to result in liability of Seller
under Article VII or other provisions of this Agreement, or adversely affect
the Tax position of the other party, Seller and Buyer shall jointly control and
participate in such audit and any related litigation or other proceeding, and
no settlement will be agreed upon with any taxing authority nor tax election or
return position taken without the consent of such other party, which consent
shall not be unreasonably withheld.  The
Company and Seller agree (i) to retain all books and records with respect to
the Tax matters pertinent to the Company or the Company’s Subsidiaries relating
to any taxable period beginning before the Closing Date until the expiration of
the statute of limitations (including extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (ii) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records.

8.2.  OTravel
Mark  Buyer acknowledges that all
right, title and interest in and to (i) the Mark “OTravel” and to any
derivations thereof (collectively, the “OTravel
Mark”), and (ii) any other Mark with the letter “O” as the first
letter of the Mark (including “Overstock.com” and any derivations thereof
(collectively, “O Marks”),
other than any Mark with “O” being the first letter of a the Mark as a word in
its standard usage, are exclusively owned by Seller, and that neither the
Company nor Buyer has or shall acquire pursuant to this Agreement any rights
whatsoever to the OTravel Mark or any O Mark other than as set forth in the
License Agreement.  Notwithstanding the
foregoing, Seller and its Affiliates (including any company or other entity
controlled by or under common control with Seller (whether currently existing
or hereafter acquired or formed)) shall not, directly or indirectly, use or
otherwise exploit, or permit any other Person to use or otherwise exploit
(whether as principal, agent, partner, shareholder, or otherwise, whether alone
or in association with any other Person) the OTravel Mark in any manner
whatsoever (the “Use Restriction”) during the period of five (5) years
from and after Closing.  Seller agrees to
that as a condition to the sale, assignment, or other transfer of the O Marks
by Seller to any Person (including in connection with the sale of all or
substantially all of Seller’s assets or stock) that such Person will agree in
writing to be bound by the restriction above and the terms and conditions of
the License Agreement, unless a Use Payment has been made pursuant to Section
6.4. For the avoidance of doubt, nothing in this Agreement shall be deemed
to prohibit or otherwise restrict Buyer or the Company (or their respective
Affiliates or licensees) from using in a Mark or otherwise the word “travel” or
any word beginning with the letter “O”, except in connection with (x) the word “overstock”
or any derivations thereof or (y) the words “otravel”, “ocruise” or (z) other
words with the letter “O” as the first letter of the word where “O” is used in
the word in manner other than in its standard usage.

Article IX

Miscellaneous

9.1.  Press
Release and Announcements.  None of
the parties hereto nor any of their respective representatives shall make any public
announcement with respect to this Agreement or the transactions contemplated
hereby without the prior written consent of the other parties hereto.  Notwithstanding the foregoing, any such
public announcement may be made if required by applicable Law or a securities
exchange rule; provided, that the
party required to make such 

 41
 

public announcement shall, to the extent possible,
confer with the other parties concerning the timing and content of such public
announcement before the same is made.

9.2.  Remedies.  Except as expressly provided in this
Agreement, any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by Laws; provided, however, that the indemnity
obligations under Article VII shall be the sole and exclusive remedy for any
breach of any representation, warranty or covenant (other than for a claim of
fraud or intentional misrepresentation). 
All such rights and remedies shall be cumulative and non-exclusive, and
may be exercised singularly or concurrently. 
One or more successive actions may be brought, either in the same action
or in separate actions, as often as is deemed advisable, until all of the
obligations to such Person are paid and performed in full.

9.3.  Consent
to Amendments; Waivers.  This
Agreement may be amended, or any provision of this Agreement may be waived upon
the approval, in a writing, executed by Buyer and Seller.  No course of dealing between or among the
parties hereto shall be deemed effective to modify, amend or discharge any part
of this Agreement or any rights or obligations of any such party or such holder
under or by reason of this Agreement.

9.4.  Successors
and Assigns.  This Agreement and all
covenants and agreements contained herein and rights, interests or obligations
hereunder, by or on behalf of any of the parties hereto, shall bind and inure
to the benefit of the respective successors and permitted assigns of the
parties hereto whether so expressed or not, except that neither this Agreement
nor any of the covenants and agreements herein or rights, interests or
obligations hereunder may be assigned or delegated by Seller, or assigned or
delegated by the Company prior to the Closing, without the prior written
consent of Buyer, and neither this Agreement nor any of the covenants and
agreements herein or rights, interests or obligations hereunder may be assigned
or delegated by Buyer without the prior written consent of Seller; provided, that Buyer and the Company may
assign this Agreement and its rights and obligations hereunder without such
prior written consent to any of its Affiliates, any Person which provides
financing to the Company, Buyer or any of their respective Affiliates, and any
subsequent Buyer of Buyer, the Company or any of their respective Affiliates
(whether by merger, consolidation, sale of stock, sale of assets or otherwise),
provided further that the Seller
may assign this Agreement and its rights hereunder without regard to (or
compliance with) the requirements of this Section 9.4, to any Person
which provides financing to the Seller, or any of its Affiliates, and any subsequent
successor by merger or acquisition to Seller (whether by merger, consolidation,
sale of stock, sale of assets or otherwise.

9.5.  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement or the application
of any such provision to any Person or circumstance shall be held to be
prohibited by, illegal or unenforceable under applicable law or rule in any
respect by a court of competent jurisdiction, such provision shall be
ineffective only to the extent of such prohibition, illegality or
unenforceability, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

 42

9.6.
Counterparts.  This Agreement may
be executed in counterparts (including by means of telecopied signature pages),
any one of which need not contain the signatures of more than one party, but
all such counterparts taken together shall constitute one and the same
agreement.

9.7.
Descriptive Headings; Interpretation. 
The headings and captions used in this Agreement and the table of
contents to this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.  Any capitalized terms used in any Schedule or
Exhibit attached hereto and not otherwise defined therein shall have the
meanings set forth in this Agreement. 
The use of the word “including” herein shall mean “including without
limitation.”

9.8.
Entire Agreement.  This Agreement
and the agreements and documents referred to herein contain the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
whether written or oral, relating to such subject matter in any way, including,
without limitation, the letter of intent dated
February 21, 2007, between the Company and Kinderhook Industries,
LLC, as such letter may have been amended.

9.9.
No Third-Party Beneficiaries. 
This Agreement is for the sole benefit of the parties hereto and their
permitted successors and assigns and nothing herein expressed or implied shall
give or be construed to give any Person, other than the parties hereto and such
permitted successors and assigns, any legal or equitable rights hereunder.

9.10.
Schedules and Exhibits.  All
Schedules and Exhibits attached hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full herein.

9.11.
Governing Law.  All issues and
questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the Schedules and Exhibits hereto shall be governed by,
and construed in accordance with, the laws of the State of Utah without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Utah  or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Utah.  In
furtherance of the foregoing, the internal law of the State of Utah shall
control the interpretation and construction of this Agreement (and all
Schedules and Exhibits hereto), even though under that jurisdiction’s choice of
law or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily apply.

9.12.
Waiver of Jury Trial.  Each of the
parties hereto waives any right it may have to trial by jury in respect of any
litigation based on, arising out of, under or in connection with this Agreement
or any course of conduct, course of dealing, verbal or written statement or
action of any party hereto.

9.13.
Jurisdiction.  Each of the parties
hereto submits to the jurisdiction of any state or federal court in any action
or proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in
any such court.  Each of the parties
irrevocably consent to the service of process of any of the aforementioned
courts in any such suit, action or proceeding by the mailing of copies thereof
by 

 43
 

registered or certified mail, postage prepaid, to its
address set forth in Section 9.14,
such service to become effective 10 days after such mailing.

9.14.
Notices.  All notices, demands or
other communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to have
been given when delivered personally to the recipient or when sent by facsimile
followed by delivery by reputable overnight courier service, or one day after
being sent to the recipient by reputable overnight courier service (charges
prepaid).  Such notices, demands and
other communications shall be sent to Buyer, Seller and the Company at the
addresses indicated below or to such other address or to the attention of such
other Person as the recipient party has specified by prior written notice to
the sending party.  All notices, demands
and other communications hereunder may be given by any other means (including
telecopy or electronic mail), but shall not be deemed to have been duly given
unless and until it is actually received by the intended recipient.

the
Company (following the Closing):

OTravel.com, Inc.

6350 South 3000 East

Salt Lake City, Utah  84121

Attn:  

Facsimile No.:

 

Facsimile No.:

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

Kinderhook
Industries, LLC

888 Seventh Avenue, 16th Floor

New York, NY  10106

Attn:  Corwynne Carruthers

Facsimile No.:  (212) 201-6790

and

Kirkland &
Ellis LLP

153 East 53rd Street

New York, NY 10022

Attn:  Brian Raftery

Facsimile No.:  (212) 446-4900

 44
 

Seller:

Overstock.com,
Inc.

6350 South 3000 East

Salt Lake City, Utah  84121

Attn:  Senior Vice President, Finance and
General Counsel

Facsimile No.  (801) 947-3144

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

Bracewell & Giuliani LLP

111 Congress, Suite 2300

Austin, Texas  78701

Attn:  Thomas W. Adkins

Facsimile No,:  (512) 542-2122

Buyer:

Castles Travel,
Inc.

888 Seventh Avenue, 16th Floor

New York, NY  10106

Attn:  Corwynne Carruthers

Facsimile No.:  (212) 201-6790

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

Kirkland &
Ellis LLP

153 East 53rd Street

New York, NY 10022

Attn:  Brian Raftery

Facsimile No.:  (212) 446-4900

9.15. No Strict
Construction.  The parties hereto
have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party hereto by virtue of the
authorship of any of the provisions of this Agreement.

9.16. Specific
Performance.  Seller acknowledges
that the Company, its business and operations are unique, and recognizes and
affirms that in the event of a breach of this Agreement by Seller, monetary
damages may be inadequate and Buyer may have no adequate remedy at law.  Accordingly, in the event of any such breach,
Buyer and/or successors or assigns may, in addition to any other rights and
remedies existing in their favor, enforce their rights and Seller’s obligations
hereunder by an action or actions for specific performance, injunctive and/or
other relief, without any requirement of proving actual damages or posting any
bond or other security.

*     *    
*      *     *

 45
 

IN WITNESS WHEREOF, the parties hereto have executed
this Stock Purchase Agreement on the date first written above.

	
  

  	
  OVERSTOCK.COM, INC.

  
	
   

  	
  By:
  __________________________________

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  OTRAVEL.COM, INC.

  
	
   

  	
  By:
  __________________________________

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  CASTLES TRAVEL, INC.

  
	
   

  	
  By:
  __________________________________

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 46

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]