Document:

EX-10.1 Stock Purchase Agreement

 

EXHIBIT 10.1

STOCK PURCHASE AGREEMENT

BY AND BETWEEN

HOLLYWOOD MEDIA CORP.

AND

THE NEW YORK TIMES COMPANY

 

Dated as of August 25, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	Article I
	 	DEFINITIONS

	 	 	1	 
	 
	 	1.1	 	 	Certain Definitions

	 	 	1	 
	 	1.2	 	 	Terms Defined Elsewhere in this Agreement

	 	 	6	 
	 	1.3	 	 	Other Definitional and Interpretive Matters

	 	 	8	 
	 	 	 	 	 
	 	 	 	 
	Article II
	 	SALE AND PURCHASE OF SHARES; PURCHASE PRICE; CLOSING

	 	 	9	 
	 
	 	2.1	 	 	Sale and Purchase of Shares

	 	 	9	 
	 	2.2	 	 	Purchase Price

	 	 	9	 
	 	2.3	 	 	Payment of Purchase Price

	 	 	9	 
	 	2.4	 	 	Purchase Price Adjustment

	 	 	10	 
	 	2.5	 	 	Closing Date

	 	 	12	 
	 	2.6	 	 	Delivery of Shares

	 	 	12	 
	 	2.7	 	 	Other Closing Deliveries by the Selling Stockholder

	 	 	12	 
	 	2.8	 	 	Closing Deliveries by Purchaser

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Article III
	 	REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER RELATING TO THE
COMPANY

	 	 	14	 
	 
	 	3.1	 	 	Organization and Good Standing

	 	 	14	 
	 	3.2	 	 	Conflicts; Consents of Third Parties

	 	 	14	 
	 	3.3	 	 	Capitalization

	 	 	15	 
	 	3.4	 	 	Subsidiaries

	 	 	15	 
	 	3.5	 	 	Financial Statements

	 	 	16	 
	 	3.6	 	 	No Undisclosed Liabilities

	 	 	16	 
	 	3.7	 	 	Taxes

	 	 	17	 
	 	3.8	 	 	Real Property

	 	 	17	 
	 	3.9	 	 	Tangible Personal Property

	 	 	18	 
	 	3.10	 	 	Intellectual Property

	 	 	18	 
	 	3.11	 	 	Material Contracts

	 	 	19	 
	 	3.12	 	 	Employee Benefits Plans

	 	 	20	 
	 	3.13	 	 	Labor

	 	 	22	 
	 	3.14	 	 	Litigation

	 	 	23	 
	 	3.15	 	 	Compliance with Laws; Permits

	 	 	23	 
	 	3.16	 	 	Environmental Matters

	 	 	23	 
	 	3.17	 	 	Financial Advisors

	 	 	24	 
	 	3.18	 	 	Accounts Receivable

	 	 	24	 
	 	3.19	 	 	Adequacy of Assets and Contracts

	 	 	24	 
	 	3.20	 	 	Absence of Changes

	 	 	24	 
	 	3.21	 	 	No Other Representations or Warranties; Schedules

	 	 	24	 
	 	 	 	 	 
	 	 	 	 
	Article IV
	 	REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER RELATING TO 

THE SELLING STOCKHOLDER

	 	 	25	 
	 
	 	4.1	 	 	Organization and Good Standing

	 	 	25	 

   i   

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	 	4.2	 	 	Authorization of Agreement

	 	 	25	 
	 	4.3	 	 	Conflicts; Consents of Third Parties

	 	 	25	 
	 	4.4	 	 	Ownership and Transfer of Shares

	 	 	26	 
	 	4.5	 	 	Litigation

	 	 	26	 
	 	4.6	 	 	Financial Advisors

	 	 	26	 
	 	 	 	 	 
	 	 	 	 
	Article V
	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER

	 	 	26	 
	 
	 	5.1	 	 	Organization and Good Standing

	 	 	26	 
	 	5.2	 	 	Authorization of Agreement

	 	 	26	 
	 	5.3	 	 	Conflicts; Consents of Third Parties

	 	 	27	 
	 	5.4	 	 	Litigation

	 	 	27	 
	 	5.5	 	 	Investment Intention

	 	 	27	 
	 	5.6	 	 	Financial Advisors

	 	 	28	 
	 	5.7	 	 	Financial Capability

	 	 	28	 
	 	5.8	 	 	Condition of the Business

	 	 	28	 
	 	 	 	 	 
	 	 	 	 
	Article VI
	 	COVENANTS

	 	 	28	 
	 
	 	6.1	 	 	Access to Information

	 	 	28	 
	 	6.2	 	 	Indemnification, Exculpation and Insurance

	 	 	29	 
	 	6.3	 	 	Preservation of Records

	 	 	29	 
	 	6.4	 	 	Publicity

	 	 	30	 
	 	6.5	 	 	Use of Name

	 	 	30	 
	 	6.6	 	 	Employment and Employee Benefits

	 	 	31	 
	 	6.7	 	 	Further Assurances

	 	 	32	 
	 	6.8	 	 	Disclosure Schedules

	 	 	33	 
	 	 	 	 	 
	 	 	 	 
	Article VII
	 	SURVIVAL; INDEMNIFICATION

	 	 	33	 
	 
	 	7.1	 	 	Survival of Representations, Warranties and Covenants

	 	 	33	 
	 	7.2	 	 	Indemnification by the Selling Stockholder

	 	 	33	 
	 	7.3	 	 	Indemnification by Purchaser

	 	 	34	 
	 	7.4	 	 	Procedures

	 	 	34	 
	 	7.5	 	 	Limits on Indemnification

	 	 	35	 
	 	 	 	 	 
	 	 	 	 
	Article VIII
	 	TAX MATTERS

	 	 	36	 
	 
	 	8.1	 	 	338(h)(10) Election

	 	 	36	 
	 	8.2	 	 	Tax Indemnity

	 	 	37	 
	 	8.3	 	 	Tax Returns and Payments and Other Tax Matters

	 	 	38	 
	 	8.4	 	 	Audits

	 	 	39	 
	 	8.5	 	 	Cooperation

	 	 	39	 
	 	8.6	 	 	Termination of Tax Sharing Agreements

	 	 	39	 
	 	8.7	 	 	Sole Provision Regarding Taxes

	 	 	40	 

   ii   

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	Article IX
	 	MISCELLANEOUS

	 	 	40	 
	 
	 	9.1	 	 	Payment of Sales, Use or Similar Taxes

	 	 	40	 
	 	9.2	 	 	Expenses

	 	 	40	 
	 	9.3	 	 	Submission to Jurisdiction; Consent to Service of Process; Arbitration

	 	 	40	 
	 	9.4	 	 	Entire Agreement; Amendments and Waivers

	 	 	41	 
	 	9.5	 	 	Governing Law

	 	 	42	 
	 	9.6	 	 	Notices

	 	 	42	 
	 	9.7	 	 	Severability

	 	 	42	 
	 	9.8	 	 	Binding Effect; Assignment

	 	 	43	 
	 	9.9	 	 	Non-Recourse

	 	 	43	 
	 	9.10	 	 	Counterparts

	 	 	43	 

   iii   

 

 

Schedules

	 	 	 
	 
	 	 

	Schedule 1.1(a)
	 	Knowledge of the Selling Stockholder

	Schedule 2.4(a)(i)
	 	Reference Statement

	Schedule 3.2(a)
	 	Conflicts

	Schedule 3.2(b)
	 	Consents

	Schedule 3.3(b)
	 	Options, etc.

	Schedule 3.4(a)
	 	Subsidiaries

	Schedule 3.4(b)
	 	Ownership of Subsidiaries’ Shares

	Schedule 3.5(a)
	 	U.S. Financial Statements

	Schedule 3.5(b)
	 	Screenline Balance Sheet

	Schedule 3.5(c)
	 	GAAP Matters

	Schedule 3.6
	 	Undisclosed Liabilities

	Schedule 3.7
	 	Taxes

	Schedule 3.8
	 	Real Property

	Schedule 3.9
	 	Personal Property Leases

	Schedule 3.10
	 	Intellectual Property

	Schedule 3.11(a)
	 	Material Contracts

	Schedule 3.11(b)
	 	Material Contract Defaults

	Schedule 3.12(a)
	 	Employee Benefit Plans

	Schedule 3.13(a)
	 	Labor and Collective Bargaining Agreements

	Schedule 3.13(b)
	 	Labor

	Schedule 3.14
	 	Litigation

	Schedule 3.15(a)
	 	Violation of Laws

	Schedule 3.16
	 	Environmental Matters

	Schedule 3.17
	 	Financial Advisors

	Schedule 4.3(a)
	 	Conflicts

	Schedule 4.3(b)
	 	Consents

	Schedule 4.6
	 	Financial Advisors

	Schedule 6.5(a)
	 	Purchased Marks

	Schedule 6.5(b) 	 	Restricted Marks

   iv   

 

 

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of August 25, 2006, is by
and between The New York Times Company, a New York corporation (“Purchaser”), and Hollywood
Media Corp., a Florida corporation (the “Selling Stockholder”).

W I T N E S S E T H:

     WHEREAS, the Selling Stockholder owns an aggregate of 3,000 shares of common stock, $0.01 par
value per share, of Baseline Acquisitions Corp., a Delaware corporation (the “Company”),
which constitute all of the issued and outstanding shares of capital stock of the Company (the
“Shares”);

     WHEREAS, the Selling Stockholder desires to sell to Purchaser, and Purchaser desires to
purchase from the Selling Stockholder, the Shares for the purchase price and upon the terms and
conditions hereinafter set forth; and

WHEREAS, certain terms used in this Agreement are defined in Section 1.1;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Certain Definitions.

     (a) For purposes of this Agreement, the following terms shall have the meanings specified in
this Section 1.1:

          “Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.

          “Ancillary Agreements” means the Escrow Agreement, the Transition Services Agreement,
the Assignment, and the Non-Compete and Non-Solicit Agreement.

          “Assignment” means the assignment made on or prior to the date hereof by the Selling
Stockholder to Baseline of the Screenline Acquisition Agreement.

          “Business Day” means any day of the year on which national banking institutions in New
York are open to the public for conducting business and are not required or authorized to close.

 

 

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

          “Confidentiality Agreement” means the confidentiality agreement between Purchaser and
the Selling Stockholder, dated as of November 2, 2005.

          “Contract” means any contract, agreement, indenture, note, bond, mortgage, loan,
instrument, lease or license.

          “Escrow Agent” means the escrow agent named in the Escrow Agreement.

          “Escrow Agreement” means the escrow agreement, dated as of the date hereof, by and
among the Selling Stockholder, Purchaser and the Escrow Agent.

          “Environmental Law” means any applicable Law currently in effect relating to the
protection of the environment or natural resources, including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Water Act (33
U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et
seq.) the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), and the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), as
each has been amended, and the regulations promulgated pursuant thereto.

          “ERISA Affiliate” means any person (within the meaning of Section 3(9) of ERISA) who
is, or at any time was, a member of a controlled group (within the meaning of Section 412(n)(6)(B)
of the Code) that includes, or at any time included, the Selling Stockholder, a Company, or any
Affiliate thereof, or any predecessor of any of the foregoing.

          “GAAP” means generally accepted accounting principles in the United States as of the
date hereof.

          “Governmental Body” means any government or governmental or regulatory body thereof,
or political subdivision thereof, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).

          “Hazardous Material” means any substance, material or waste which is regulated by any
Governmental Body including petroleum and its by-products, asbestos, and any material or substance
which is defined as a “hazardous waste,” “hazardous substance,” “hazardous material,” “restricted
hazardous waste,” “industrial waste,” “solid waste,” “contaminant,” “pollutant,” “toxic waste” or
“toxic substance” under any provision of Environmental Law.

          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.

          “Indebtedness” of any Person means, without duplication, (i) the principal of, and
accreted value and accrued and unpaid interest in respect of, (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable; (ii) all obligations of

2

 

such Person issued or assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable and other accrued current liabilities and excluding any
earn-out payments arising under the Screenline Acquisition Agreement); (iii) all obligations of the
type referred to in clauses (i) through (ii) of any Persons the payment of which such Person is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise; and (iv)
all obligations of the type referred to in clauses (i) through (iii) of other Persons secured by
any Lien on any property or asset of such Person (whether or not such obligation is assumed by such
Person).

          “Intellectual Property” means all of the following: (i) all patents and applications
therefor (along with all patents issuing thereon), including continuations, divisionals,
continuations-in-part, reissues, reexaminations and extensions thereof (collectively,
“Patents”), (ii) all trade secrets, (iii) all trademarks, service marks, trade names,
service names, brand names, trade dress rights, logos, and corporate names, together with the
goodwill associated with any of the foregoing, and all applications, registrations and renewals
thereof, (collectively, “Marks”), (iv) copyrights and registrations and applications
therefor, works of authorship and mask work rights (collectively, “Copyrights”), (v)
intellectual property rights to Uniform Resource Locators, website addresses and all content on the
websites, and Internet domain names, and (vi) all intellectual property rights in Software.

          “IRS” means the United States Internal Revenue Service and, to the extent relevant,
the United States Department of Treasury.

          “Knowledge of the Selling Stockholder” means the actual knowledge of those Persons
identified on Schedule 1.1(a).

          “Law” means any foreign, federal, state, local law (including common law), statute,
code, ordinance, rule or regulation or Order.

          “Legal Proceeding” means any judicial, administrative or arbitral actions, suits or
proceedings (public or private) by or before a Governmental Body.

          “Liability” means any debt, liability or obligation (whether direct or indirect,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).

          “License Agreement” means the license agreement, dated as of the date hereof, by and
between Hollywood.com, Inc., a California corporation and wholly-owned subsidiary of the Selling
Stockholder, and the Company.

          “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement, servitude or transfer
restriction.

3

 

          “Material Adverse Effect” means a material adverse effect on (i) the business, assets,
properties, results of operations or financial condition of the Company and the Subsidiaries (taken
as a whole) or (ii) the ability of the Selling Stockholder to consummate the transactions
contemplated by this Agreement, other than an effect resulting from an Excluded Matter.
“Excluded Matter” means any one or more of the following: (i) the effect of any change in
the United States or foreign economies or securities or financial markets in general; (ii) the
effect of any change that generally affects any industry in which the Company or any of the
Subsidiaries operate; (iii) the effect of any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing
or underway as of the date hereof; (iv) the effect of any action taken by Purchaser or its
Affiliates with respect to the transactions contemplated hereby or with respect to the Company or
the Subsidiaries; (v) the effect of any changes in applicable Laws or accounting rules; (vi) the
failure of the Company and the Subsidiaries to meet any of their internal projections (for the
avoidance of doubt, this clause (vi) shall not preclude Purchaser from asserting that the
underlying cause of any such failure is a Material Adverse Effect); or (vii) any effect resulting
from the public announcement of this Agreement, compliance with terms of this Agreement or the
consummation of the transactions contemplated by this Agreement.

          “Non-Compete and Non-Solicit Agreement” means the non-compete and non-solicitation
agreement, dated as of the date hereof, by between the Selling Stockholder and Purchaser.

          “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Body.

          “Ordinary Course of Business” means the ordinary and usual course of normal day-to-day
operations of the Company and the Subsidiaries, consistent with past practice.

          “Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.

          “Permitted Exceptions” means (i) statutory liens for current Taxes, assessments or
other governmental charges not yet delinquent or the amount or validity of which is being contested
in good faith by appropriate proceedings; (ii) mechanics’, landlords’, carriers’, workers’,
repairers’ and similar Liens arising or incurred in the Ordinary Course of Business; (iii) zoning,
entitlement and other land use and environmental regulations by any Governmental Body; (iv) title
of a lessor under a capital or operating lease; and (v) such other imperfections in title, charges,
easements, or restrictions which do not materially interfere with the use of the assets of the
Company and the Subsidiaries taken as a whole.

          “Person” means any individual, corporation, partnership, limited liability company,
firm, joint venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.

4

 

          “Release” means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into the environment.

          “Remedial Action” means all actions required under Environmental Laws to clean up,
remove, treat or address any Hazardous Material in the environment at levels exceeding those
allowed by applicable Environmental Laws, including pre-remedial studies and investigations or
post-remedial monitoring and care.

          “Screenline” means Screenline Film- und Medieninformations GmbH, a limited liability
company (Gesellschaft mit beschränkter Haftung, GmbH) organized under the laws of Germany.

          “Screenline Acquisition Agreement” means the Sale and Purchase Agreement, dated as of
June 7, 2006, regarding the purchase of all outstanding capital stock of Screenline by the Selling
Stockholder.

          “Software” means any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code or object code, and
(ii) databases and compilations, including any and all data and collections of data, whether
machine readable or otherwise.

          “Subsidiary” means any Person of which a majority of the outstanding share capital,
voting securities or other voting equity interests are owned, directly or indirectly, by the
Company.

          “Tax” or “Taxes” means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment, excise, severance,
stamp, occupation, property, abandoned property, escheat and estimated taxes, customs duties, fees,
assessments and other Tax Authority charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary or combined basis, and (ii) all interest, penalties, fines, additions to tax
or additional amounts imposed by any Taxing Authority in connection with any item described in
clause (i).

          “Taxing Authority” means the IRS and any other Governmental Body responsible for the
administration of any Tax.

          “Tax Return” means any return, report or statement required to be filed with respect
to any Tax (including any attachments thereto, and any amendment thereof), including any
information return, claim for refund, amended return or declaration of estimated Tax, and
including, where permitted or required, combined, consolidated or unitary returns for any group of
entities that includes the Selling Stockholder, the Company, any of the Subsidiaries, or any of
their Affiliates.

5

 

          “Transition Services Agreement” means the transition services agreement, dated as of
the date hereof, by and between the Selling Stockholder and Purchaser.

          “WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as
amended, and the rules and regulations promulgated thereunder.

     1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the
following terms have meanings set forth in the sections indicated:

	 	 	 
	Term	 	Section
	 
	 	 
	AAA
	 	9.3(b)
	Agreement
	 	Preamble
	Allocation Statement
	 	8.1(d)
	Balance Sheet Date
	 	3.5(a)
	Balance Sheet Liabilities
	 	3.6
	Baseline
	 	Recitals
	Benefit Plans
	 	3.12(a)
	Closing
	 	2.5
	Closing Date
	 	2.5
	Closing Net Debt
	 	2.4(a)
	Closing Statement
	 	2.4(a)
	Closing Working Capital
	 	2.4(a)
	COBRA
	 	6.6(b)(iii)
	Common Stock
	 	3.3(a)
	Company
	 	Recitals
	Company Benefit Plans
	 	3.12(a)
	Company Documents
	 	3.2
	Company Property
	 	3.9(a)
	Company Properties
	 	3.9(a)
	Continuing Employees
	 	6.6(a)
	Copyrights
	 	1.1 (in Intellectual Property definition)
	Environmental Permits
	 	3.17(a)
	ERISA
	 	3.12(a)
	Excluded Matter
	 	1.1 (in definition of Material Adverse Effect)
	Final Net Debt
	 	2.4(e)
	Final Working Capital
	 	2.4(e)
	Financial Statements
	 	3.5(c)
	Fundamental Representation
	 	7.1
	Indemnitees
	 	6.2(a)
	Indemnified Party
	 	7.4(a)

6

 

	 	 	 
	Term	 	Section
	 
	 	 
	Indemnifying Party
	 	7.4(a)
	Independent Accountant
	 	2.4(c)
	Losses
	 	7.2
	Marks
	 	1.1 (in Intellectual Property definition)
	Material Contracts
	 	3.11(a)
	Net Debt
	 	2.4(a)
	Net Purchase Price
	 	2.3
	Net Working Capital
	 	2.4(a)
	Owned Property
	 	3.9(a)
	Owned Properties
	 	3.9(a)
	Patents
	 	1.1 (in Intellectual Property definition)
	Pension Plan
	 	3.12(b)
	Personal Property Leases
	 	3.10(a)
	Purchase Price
	 	2.2
	Purchased Marks
	 	6.5
	Purchaser
	 	Preamble
	Purchaser Documents
	 	5.2
	Purchaser Indemnified Parties
	 	7.2
	Real Property Lease
	 	3.9(a)
	Real Property Leases
	 	3.9(a)
	Reference Statement
	 	2.4(a)
	Restricted Marks
	 	6.5
	Retained Marks
	 	6.5
	Revised Statements
	 	8.1(d)
	Screenline Balance Sheet
	 	3.5(b)
	Screenline Capital
	 	3.3(c)
	Section 338(h)(10) Election
	 	8.1(a)
	Securities Act
	 	5.5
	Seller Indemnified Parties
	 	7.3(a)
	Selling Stockholder
	 	Preamble
	Selling Stockholder Documents
	 	4.2
	Selling Stockholder Plans
	 	3.12(a)
	Shares
	 	Recitals
	Subsidiary
	 	3.4(a)
	Target Working Capital
	 	2.4(a)

7

 

	 	 	 
	Term	 	Section
	 
	 	 
	Tax Claim
	 	8.4(a)
	Third Party Claim
	 	7.4(a)
	U.S. Balance Sheet
	 	3.5(a)
	U.S. Companies
	 	3.5(a)
	U.S. Financial Statements
	 	3.5(a)
	U.S. Interim Financial
Statements
	 	3.5(a)

     1.3 Other Definitional and Interpretive Matters.

     (a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules
of interpretation shall apply:

          Calculation of Time Period. When calculating the period of time before which, within
which or following which any act is to be done or step taken pursuant to this Agreement, the date
that is the reference date in calculating such period shall be excluded. If the last day of such
period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

          Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

          Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and
Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any matter or item disclosed on one Schedule shall be
deemed to have been disclosed on each other Schedule with respect to other representations and
warranties relating to such matter or item to the extent its relevance to such other Schedule is
reasonably apparent. Disclosure of any item on any Schedule shall not constitute an admission that
such item or matter is material or would have a Material Adverse Effect. No disclosure on a
Schedule relating to a possible breach or violation of any Contract, Law or Order shall be
construed as an admission that breach or violation exists or has actually occurred. Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be
defined as set forth in this Agreement.

          Gender and Number. Any reference in this Agreement to gender shall include all
genders, and words imparting the singular number only shall include the plural and vice versa.

          Headings. The provision of a Table of Contents, the division of this Agreement into
Articles, Sections and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting this Agreement.
All references in this Agreement to any “Section” are to the corresponding Section of this
Agreement unless otherwise specified.

8

 

          Herein. The words such as “herein,” “hereinafter,” “hereof,”
and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which
such words appear unless the context otherwise requires.

          Including. The word “including” or any variation thereof means (unless the
context of its usage otherwise requires) “including, without limitation” and shall not be
construed to limit any general statement that it follows to the specific or similar items or
matters immediately following it.

          Reflected On or Set Forth In. An item arising with respect to a specific
representation or warranty shall be deemed to be “reflected on” or “set forth in” a
balance sheet or financial statements, to the extent any such phrase appears in such representation
or warranty, if (a) there is a reserve, accrual or other similar item underlying a number on such
balance sheet or financial statements that related to the subject matter of such representation,
(b) such item is otherwise specifically set forth on the balance sheet or financial statements or
(c) such item is
reflected on the balance sheet or financial statements and is specifically set forth in the
notes thereto.

     (b) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

ARTICLE II

SALE AND PURCHASE OF SHARES; PURCHASE PRICE; CLOSING

     2.1 Sale and Purchase of Shares. Upon the terms and subject to the conditions
contained herein, on the Closing Date, the Selling Stockholder agrees to sell to Purchaser, and
Purchaser agrees to purchase from the Selling Stockholder, the Shares.

     2.2 Purchase Price. The aggregate consideration for the Shares shall be an amount in
cash equal to $35,000,000 (the “Purchase Price”).

     2.3 Payment of Purchase Price. On the Closing Date, Purchaser shall (i) pay the Net
Purchase Price to the Selling Stockholder, which shall be paid by one or more wire transfers of
immediately available funds in such amounts aggregating the Net Purchase Price and into such
accounts designated by the Selling Stockholder prior to the Closing, and (ii) pay $3,500,000 of the
Purchase Price on behalf of the Selling Stockholder to the Escrow Agent pursuant to the Escrow
Agreement, such funds to be held in accordance with the terms of the Escrow Agreement. For
purposes of this Section 2.3, “Net Purchase Price” shall mean $31,500,000.

9

 

     2.4 Purchase Price Adjustment.

     (a) As promptly as practicable, but no later than ninety (90) days after the Closing Date,
Purchaser shall cause to be prepared and delivered to the Selling Stockholder the Closing Statement
(as defined below) and a certificate based on such Closing Statement setting forth Purchaser’s
calculation of (i) Closing Working Capital and (ii) Closing Net Debt. The closing statement (the
“Closing Statement”) shall present the Net Working Capital as of the close of business on
the Closing Date (“Closing Working Capital”) and Net Debt as of the close of business on
the Closing Date (“Closing Net Debt”) and shall be prepared in accordance with GAAP.
“Net Working Capital” means the consolidated current assets of each of the Company and the
Subsidiaries (exclusive of cash), reduced by the consolidated current liabilities of the Company
and the Subsidiaries, in each case as determined in accordance with GAAP. “Net Debt” shall
mean the amount of Indebtedness of the Company and the Subsidiaries on a consolidated basis less
the amount of cash held by the Company and the Subsidiaries. For the avoidance of doubt, any asset
or liability included in the calculation of Net Working Capital will not be included in the
calculation of Net Debt so that the calculation of Net Working Capital and Net Debt do not double
count any asset or liability. The preparation of the Closing Statement
shall be for the purpose of determining the difference between the target Net Working Capital
of negative Three Hundred and Eight Thousand, Fifty-Five Dollars (-$308,055) (the “Target
Working Capital”) and the sum of the Final Working Capital and Final Net Debt (each, as defined
below) and for calculating the payment to be made pursuant to Section 2.4(e). Attached
hereto as Schedule 2.4(a)(i) is a schedule showing the calculation of the Target Working
Capital after giving effect to the pro forma adjustments in accordance with GAAP (“Reference
Statement”).

     (b) If the Selling Stockholder disagrees with Purchaser’s calculation of Closing Working
Capital or Closing Net Debt delivered pursuant to Section 2.4(a), the Selling Stockholder
may, within thirty (30) days after delivery of the Closing Statement, deliver a notice to Purchaser
stating that the Selling Stockholder disagrees with such calculation and specifying in reasonable
detail those items or amounts as to which the Selling Stockholder disagrees and the basis therefor
and reasonable documentation and evidence of such basis. The Selling Stockholder shall be deemed
to have agreed with all other items and amounts contained in the Closing Statement and the
calculation of Closing Net Debt and Closing Working Capital delivered pursuant to Section
2.4(a). Prior to the delivery of any such notice by the Selling Stockholder, the Selling
Stockholder and Purchaser shall cooperate in good faith to resolve any disputed items or amounts
set forth in the Closing Statement.

     (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.4(b),
the Selling Stockholder and Purchaser shall, during the fifteen (15) days following such delivery,
use their commercially reasonable efforts to reach agreement on the disputed items or amounts in
order to determine, as may be required, the amount of Closing Working Capital or Closing
Net Debt,
as applicable. If during such period, the Selling Stockholder and Purchaser are unable to reach
such agreement, they shall promptly thereafter cause the Miami, Florida office of
PricewaterhouseCoopers or such other independent accounting firm they agree to select, as the case
may be, the “Independent Accountant”) to review this Agreement and the disputed items or
amounts for the purpose of calculating Closing Working Capital and Closing 

10

 

Net Debt (it being
understood that in making such calculation, the Independent Accountant shall be functioning as an
expert and not as an arbitrator). Each of Purchaser and the Selling Stockholder agree that it
shall not engage, or agree to engage the Independent Accountant to perform any services other than
as the Independent Accountant pursuant hereto until the Closing Statement and Final Working Capital
and Final Net Debt have been finally determined pursuant to this Section 2.4. Each party
agrees to execute, if requested by the Independent Accountant, a reasonable engagement letter.
Purchaser and the Selling Stockholder shall cooperate with the Independent Accountant and promptly
provide all documents and information requested by the Independent Accountant. In making such
calculation, the Independent Accountant shall consider only those items or amounts in the Closing
Statement and Purchaser’s calculation of Closing Working Capital and Closing Net Debt as to which
the Selling Stockholder has disagreed as permitted in its notice of disagreement duly delivered
pursuant to Section 2.4(b). The Independent Accountant shall deliver to the Selling
Stockholder and Purchaser, as promptly as practicable (but in any case no later than thirty (30)
days from the date of engagement of the Independent Accountant), a report setting forth its
calculation of Closing Working Capital and Closing Net Debt, including the basis for and
explanation of any difference from Purchaser’s
Closing Statement. Such report shall be final and binding upon the Selling Stockholder and
Purchaser, shall be deemed a final arbitration award that is binding on Purchaser and the Selling
Stockholder, and neither Purchaser nor the Selling Stockholder shall seek further recourse to
courts or other tribunals, other than to enforce such report. Judgment may be entered to enforce
such report in any court of competent jurisdiction. The Independent Accountant will determine the
allocation of the cost of its review and report based on the inverse of the percentage its
determination (before such allocation) bears to the total amount of the total items in dispute as
originally submitted to the Independent Accountant. For example, should the items in dispute total
in amount to $1,000 and the Independent Accountant awards $600 in favor of the Selling
Stockholder’s position, 60% of the costs of its review would be borne by Purchaser and 40% of the
costs would be borne by the Selling Stockholder.

     (d) The Selling Stockholder, Purchaser and each of the Company shall, and shall cause their
respective representatives to, cooperate and assist in the preparation of the Closing Statement and
the calculation of Closing Working Capital and Closing Net Debt and in the conduct of the review
referred to in this Section 2.4, including the making available to the extent necessary of
books, records, work papers and personnel.

     (e) If the sum of Final Working Capital and Final Net Debt (each as defined below) exceeds the
Target Working Capital, Purchaser shall pay to the Selling Stockholder, in the manner and with
interest as provided in Section 2.4(f), the amount of such excess and, if the Target
Working Capital exceeds the sum of Final Working Capital and Final Net Debt, the Selling
Stockholder shall pay to Purchaser, the amount of such excess as an adjustment to the Purchase
Price, in the manner and with interest as provided in Section 2.4(f). “Final Working
Capital” and “Final Net Debt” mean Closing Working Capital and Closing Net Debt,
respectively, (i) as shown in Purchaser’s calculation delivered pursuant to Section 2.4(a)
if no notice of disagreement with respect thereto is duly delivered pursuant to Section
2.4(b); or (ii) if such a notice of disagreement is delivered, (A) as agreed by the Selling
Stockholder and Purchaser pursuant to Section 2.4(c) or (B) in the absence of such
agreement, as shown in the

11

 

Independent Accountant’s calculation delivered pursuant to Section
2.4(c); provided, however, that in no event shall (A) Final Working Capital be
more than the Selling Stockholder’s calculation of Closing Working Capital delivered pursuant to
Section 2.4(b) or less than Purchaser’s calculation of Closing Working Capital delivered
pursuant to Section 2.4(a) nor (B) Final Net debt be less than the Selling Stockholder’s
calculation of Closing Net Debt delivered pursuant to Section 2.4(b) or more than
Purchaser’s calculation of Closing Net Debt delivered pursuant to Section 2.4(a).

     (f) Any payment pursuant to Section 2.4(e) shall be made at a mutually convenient time
and place within five (5) Business Days after Final Working Capital and Final Net Debt has been
determined by wire transfer by Purchaser or the Selling Stockholder, as the case may be, of
immediately available funds to the account of such other party as may be designated in writing by
such other party. The amount of any payment to be made pursuant to this Section 2.4 shall
bear interest from and including the Closing Date to but excluding the date of payment at a rate
per annum equal to the rate of interest published from time to time by The Wall Street Journal,
Eastern Edition, as the “prime rate” during the period from the Closing Date to the date of
payment. Such interest shall be payable at the same time as the payment to which
it relates and shall be calculated daily on the basis of a year of 365 days and the actual
number of days elapsed.

     (g) For the avoidance of doubt, the parties acknowledge that there is an item labeled
“intercompany accounts” on the U.S. Balance Sheets and the Screenline Balance Sheet and agree that
such item shall not be included in the calculation of Net Working Capital or Net Debt. In no event
shall the Company, its Subsidiaries or Purchaser be liable to the Selling Stockholder or its
Affiliates for payment of such item.

     2.5 Closing Date. The consummation of the sale and purchase of the Shares provided
for in Section 2.1 hereof (the “Closing”) shall take place simultaneously with the
execution and delivery of this Agreement at the offices of Weil, Gotshal & Manges LLP located at
767 Fifth Avenue, New York, New York, 10153 (the date hereof being referred to as the “Closing
Date”), unless another time, date or place is agreed to in writing by the parties hereto.

     2.6 Delivery of Shares. At the Closing, the Selling Stockholder shall transfer or
cause to be transferred to Purchaser, against payment of the Purchase Price therefor as provided in
Section 2.3, good and valid title to the Shares, free and clear of any Liens (other than
transfer restrictions on subsequent transfers that may apply under applicable law) by causing to be
delivered to Purchaser stock certificates representing the Shares, duly endorsed in blank or
accompanied by a stock transfer powers, or such other documents and instruments as may be
reasonably necessary.

     2.7 Other Closing Deliveries by the Selling Stockholder. At the Closing, the Selling
Stockholder shall deliver or cause to be delivered to Purchaser:

     (a) a certificate of a duly authorized officer of the Selling Stockholder certifying as to the
following matters:

12

 

     (i) the representations and warranties of the Selling Stockholder set forth in this
Agreement qualified as to materiality are true and correct, and those not so qualified shall
be true and correct in all material respects, as of the date hereof, except to the extent
such representations and warranties relate to an earlier date (in which case such
representations and warranties qualified as to materiality are true and correct, and those
not so qualified are true and correct in all material respects, as of such earlier date);
provided, however, that in the event of a breach of a representation or
warranty, the obligation set forth in this Section 2.7(a) shall be deemed satisfied
unless the effect of all such breaches of representations and warranties taken together
result in a Material Adverse Effect; and

     (ii) the Selling Stockholder has performed and complied in all material respects with
all obligations and agreements required by this Agreement to be performed or complied with
by them on or prior to the date hereof;

     (b) all minute books, stock certificates, stock books, ledgers and registers, corporate seals,
if any, and other corporate record and tax records relating to the organization,
ownership and maintenance of each of the Company and the Subsidiaries, if not already located
on the premises of the Company or the Subsidiaries;

     (c) signed resignations, effective as of the Closing, of each member of the Boards of
Directors of the Company;

     (d) a certificate of good standing of the Company and the Subsidiaries (other than Screenline)
issued by the jurisdiction of such entity’s incorporation or formation; and

     (e) the License Agreement, the Assignment, the Escrow Agreement, the Non-Compete and
Non-Solicit Agreement and the Transition Services Agreement, in each case duly executed on behalf
of the Selling Stockholder, and in the case of the License Agreement and the Assignment, duly
executed on behalf of the Company.

     2.8 Closing Deliveries by Purchaser. At the Closing, Purchaser shall deliver to the
Selling Stockholder:

     (a) the Purchase Price in the manner set forth in Section 2.3;

     (b) a certificate of a duly authorized officer of the Purchaser certifying as to the following
matters:

     (i) the representations and warranties of Purchaser set forth in this Agreement
qualified as to materiality shall be true and correct, and those not so qualified shall be
true and correct in all material respects, at and as of the date hereof as though made on
the date hereof, except to the extent such representations and warranties relate to an
earlier date (in which case such representations and warranties qualified as to materiality
shall be true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date); and

13

 

     (ii) Purchaser has performed and complied in all material respects with all obligations
and agreements required by this Agreement to be performed or complied with by Purchaser on
or prior to the date hereof;

     (c) the Escrow Agreement, the Non-Compete and Non-Solicit Agreement and the Transition
Services Agreement, in each case duly executed on behalf of Purchaser.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLING

STOCKHOLDER RELATING TO THE COMPANY

     The Selling Stockholder hereby represents and warrants to Purchaser, with respect to the
Company, that:

     3.1 Organization and Good Standing.

     (a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation as set forth above and has all requisite
corporate power and authority to own, lease and operate its properties and to carry on its business
as now conducted. The Company is duly qualified or authorized to do business and is in good
standing under the laws of each jurisdiction in which it owns or leases real property and each
other jurisdiction in which the conduct of its business or the ownership of its properties requires
such qualification or authorization, except where the failure to be so qualified, authorized or in
good standing would not have a Material Adverse Effect.

     (b) The Selling Stockholder has heretofore furnished to Purchaser a complete and correct copy
of the Company’s articles of incorporation and bylaws, each as amended to date. Such articles of
incorporation and bylaws, or similar documents, are in full force and effect.

     3.2 Conflicts; Consents of Third Parties.

     (a) Except as set forth on Schedule 3.2(a), neither the consummation of the
transactions contemplated hereby or thereby, nor compliance by the Company with any of the
provisions hereof or thereof will conflict with, violate, result in any breach of, constitute a
default (with or without notice or lapse of time, or both) under, give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a material benefit under,
or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under,
or result in the creation of any encumbrance, upon any of the properties or assets of any Company
or Subsidiary under, any provision of (i) the certificate of incorporation and by-laws or
comparable organizational documents of the Company or any of its Subsidiaries; (ii) any material
Contract or Permit to which the Company or any of its Subsidiaries is a party or by which any of
the properties or assets of the Company or any of its Subsidiaries are bound; (iii) any Order of
any Governmental Body applicable to the Company or any Subsidiary or by which any of the properties
or assets of the Company or any of its Subsidiaries are bound; or (iv) any

14

 

applicable Law, other
than, in the case of clauses (iii) and (iv), such conflicts, violations, defaults, terminations or
cancellations, that, individually or in the aggregate, would not have a Material Adverse Effect.

     (b) Except as set forth on Schedule 3.2(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Governmental
Body is required on the part of the Company or any of its Subsidiaries in connection with the
compliance by the Company with any of the provisions hereof or thereof, or the consummation of the
transactions contemplated hereby or thereby, except for (i) compliance with the applicable
requirements of the HSR Act, and (ii) such other consents, waivers, approvals, Orders, Permits or
authorizations the failure of which to obtain would not have a Material Adverse Effect.

     3.3 Capitalization.

     (a) The authorized capital stock of Baseline consists of 3,000 shares of common stock, $0.01
par value per share (the “Common Stock”), all of which are issued and outstanding and held
beneficially and of record by the Selling Stockholder, and no shares of Common Stock are held by
Baseline as treasury stock. All of the issued and outstanding shares of Common Stock were duly
authorized for issuance and are validly issued, fully paid and non-assessable and have not been
issued in violation of, and are not subject to, any preemptive or subscription rights. The shares
of Common Stock were issued in compliance with all applicable Laws.

     (b) Except as set forth on Schedule 3.3(b), there is no existing option, warrant,
call, right, or Contract of any character to which the Company is a party requiring, and there are
no securities of the Company outstanding which upon conversion or exchange would require, the
issuance of any shares of capital stock of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock of
the Company. The Company is not party to any voting trust or other Contract with respect to the
voting, redemption, sale, transfer or other disposition of the Common Stock.

     3.4 Subsidiaries.

     (a) Schedule 3.4(a) sets forth the name of each subsidiary of the Company (each a
“Subsidiary”), and, with respect to each Subsidiary, the jurisdiction in which it is
incorporated or organized, the jurisdictions, if any, in which it is qualified to do business, the
number of shares of its authorized capital stock, the number and class of shares thereof duly
issued and outstanding, the names of all stockholders or other equity owners and the number of
shares of stock owned by each stockholder or the amount of equity owned by each equity owner. Each
Subsidiary is a duly organized and validly existing corporation or other entity in good standing
under the laws of the jurisdiction of its incorporation or organization and is duly qualified or
authorized to do business as a foreign corporation or entity and is in good standing under the laws
of each jurisdiction in which the conduct of its business or the ownership of its properties
requires such qualification or authorization, except where the failure to be so qualified,
authorized or in good standing would not have a Material Adverse Effect. Each

15

 

Subsidiary has all
requisite corporate or entity power and authority to own, lease and operate its properties and
carry on its business as now conducted.

     (b) The outstanding shares of capital stock of each Subsidiary are validly issued, fully paid
and non-assessable, and all such shares or other equity interests represented as being owned by a
Company are owned by it free and clear of any and all Liens except as set forth on Schedule
3.4(b). No shares of capital stock are held by any Subsidiary as treasury stock. There is no
existing option, warrant, call, right or Contract to which any Subsidiary is a party requiring, and
there are no convertible securities of any Subsidiary outstanding which upon conversion would
require, the issuance of any shares of capital stock or other equity interests of any Subsidiary or
other securities convertible into shares of capital stock or other equity interests of any
Subsidiary.

     3.5 Financial Statements.

     (a) For purposes hereof, the term “U.S. Companies” means the Company and the
Subsidiaries other than Screenline. Schedule 3.5(a) sets forth (i) the respective
unaudited balance sheets of the U.S. Companies at December 31, 2005 and the related unaudited
statements of income of the respective U.S. Companies for the year then ended and (ii) the
respective unaudited balance sheets of the U.S. Companies at June 30, 2006 and the related
unaudited statements of income of the respective U.S. Companies for the three (3) and six (6) month
periods then ended (the “U.S. Interim Financial Statements”) (such unaudited statements
listed in clauses (i) and (ii) of this paragraph (a), including any related notes and schedules
thereto, are referred to herein as the “U.S. Financial Statements”). For the purposes
hereof, the unaudited balance sheets of the U.S. Companies as of June 30, 2006 included in the U.S.
Interim Financial Statements are referred to as the “U.S. Balance Sheets” and June 30, 2006
is referred to as the “Balance Sheet Date”.

     (b) Schedule 3.5(b) sets forth the unaudited balance sheet of Screenline at June 30,
2006 (the “Screenline Balance Sheet”).

     (c) For purposes hereof, the U.S. Financial Statements and the Screenline Balance Sheet are
referred to as the “Financial Statements”. Except as set forth in the notes thereto or as
disclosed in Schedule 3.5(c) or to the extent that they have incomplete notes or do not
contain footnotes and other presentation items that may be required by GAAP, the Financial
Statements have been prepared in accordance with GAAP consistently applied in accordance with past
practice and present fairly in all material respects the respective financial position and results
of operations of the Company and the Subsidiaries as of the dates and for the periods indicated
therein (except that the U.S. Interim Financial Statements and the Screenline Balance Sheet are
subject to normal year-end adjustments).

     3.6 No Undisclosed Liabilities. Except as disclosed on Schedule 3.6, the
Company and the Subsidiaries do not have any material Liabilities as of the date of this Agreement
of the type required to be reflected on, or reserved in the preparation of, a balance sheet
prepared in accordance with GAAP consistently applied in accordance with past practice
(“Balance Sheet Liabilities”), other than (i) Liabilities reflected in the Financial
Statements

16

 

(including notes and supplemental materials thereto) or the Schedules to this Agreement,
(ii) Liabilities incurred after the Balance Sheet Date in the Ordinary Course of Business or as
permitted or contemplated under this Agreement and (iii) Liabilities incurred in connection with
the transactions contemplated hereby.

     3.7 Taxes. Except as set forth on Schedule 3.7, the Company and its
Subsidiaries has duly and timely filed all Federal, state, local and foreign Tax Returns and
reports required to be filed by it, and all Taxes required to be paid by it (whether or not
reflected on such Tax Returns) have either been timely paid or are not yet due, and all such Tax
Returns and reports are correct and complete in all material respects, or requests for extensions
to file such returns or reports have been timely filed, granted and have not expired, except to the
extent that such failures to file, to pay or to have extensions granted that remain in effect
individually or in the aggregate have not had a Material Adverse Effect, and the provision for
Taxes due (as
opposed to any reserve for deferred Taxes established to reflect temporary differences between
book and Tax income) in the Financial Statements of the Company and its Subsidiaries is sufficient
for all unpaid Taxes, being current Taxes not yet due and payable by the Company and its
Subsidiaries, for all taxable periods and portions thereof through the respective dates of such
financial statements. All material Taxes required to be withheld by the Company or any of its
Subsidiaries have been withheld and have been (or will be) duly and timely paid to the proper
taxing authority. No deficiencies for any Taxes have been proposed, asserted or assessed against
the Company or any of its Subsidiaries that are still pending. No requests for waivers of the time
to assess any such Taxes have been made that are still pending. The Federal income Tax Returns of
the Company and its Subsidiaries consolidated in such returns have not been examined for any year
after 1993. There are no accounting method changes, or proposed or threatened accounting method
changes, of the Company or its Subsidiaries that could give rise to an adjustment under Section 481
of the Code (or any similar provision of state, local or foreign Tax Law) for periods after the
Closing Date. There are no ongoing federal, state, local or foreign Tax audits or examinations
with respect to the Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is liable for the Taxes of any other Person (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local or foreign Law), (ii) as a transferee or
successor, or (iii) as a result of any indemnification provision or other contractual obligation.

     3.8 Real Property. Schedule 3.8 sets forth a complete list of (i) all
material real property and interests in real property owned in fee by the Company and its
Subsidiaries (individually, an “Owned Property” and collectively, the “Owned
Properties”), and (ii) all leases of real property by the Company or its Subsidiaries involving
annual payments in excess of $100,000 (individually, a “Real Property Lease” and
collectively, the “Real Property Leases” and, together with the Owned Properties, being
referred to herein individually as a “Company Property” and collectively as the
“Company Properties”) as lessee or lessor. The Company or its Subsidiaries have fee title
to all Owned Property, free and clear of all Liens of any nature whatsoever except (A) Liens set
forth on Schedule 3.8 and (B) Permitted Exceptions. To the Knowledge of the Selling
Stockholder, neither the Company nor any of its Subsidiaries has received any written notice of any
default or event that with notice or lapse of time, or both,

17

 

would constitute a default by the
Company or any of its Subsidiaries under any of the Real Property Leases.

     3.9 Tangible Personal Property. Schedule 3.9 sets forth all leases of
personal property by the Company or its Subsidiaries (“Personal Property Leases”) involving
annual payments in excess of $100,000. To the Knowledge of the Selling Stockholder, neither the
Company nor any of its Subsidiaries has received any written notice of any default or any event
that with notice or lapse of time, or both, would constitute a default, by the Company or any of
its Subsidiaries under any of the Personal Property Leases.

     3.10 Intellectual Property.

     (a) Schedule 3.10 sets forth (a) a list of all Patents owned by the Company or its
Subsidiaries and all Marks and Copyrights owned by the Company or its Subsidiaries that are
registered or the subject of an application for registration and (b) a list of (i) all Internet
domain
names owned by or registered in the name of the Company or its Subsidiaries and (ii) certain
other specified Internet domain names identified by agreement of the parties which domain names the
parties agree shall be assigned and transferred to one of the Subsidiaries at or before Closing as
specified in Schedule 3.10, it being understood that such domain names listed under this
clause (ii) consist of certain Internet domain names which are currently owned by or registered in
the name of the Selling Stockholder or one of its subsidiaries other than the Company and its
Subsidiaries as indicated in Schedule 3.10; it being further understood that the nature of
the ownership or registration of the domain names is as described in Schedule 3.10. Except
as set forth on Schedule 3.10, to the Knowledge of the Selling Stockholder, the Company and
its Subsidiaries own or have licenses to use all material Intellectual Property used by them in the
Ordinary Course of Business. Except as set forth on Schedule 3.10 or would not otherwise
have a Material Adverse Effect: (i) to the Knowledge of the Selling Stockholder, no Person is
infringing upon or misappropriating any material Intellectual Property owned by the Company or its
Subsidiaries, (ii) there are no pending, or to the Knowledge of the Selling Stockholder,
threatened, Legal Proceedings with respect to any such infringement or misappropriation, and (iii)
neither the Company nor any of its Subsidiaries has received written notice that it is infringing
or misappropriating any Intellectual Property of any third Person.

     (b) To the Knowledge of the Selling Stockholder, each employee, consultant and independent
contractor of the Company and its Subsidiaries has entered into a written non-disclosure and
assignment agreement with the Company or its Subsidiary, as applicable, regarding ownership of
Intellectual Property and treatment of confidential information (including proprietary and customer
information) and trade secrets in a form reasonably satisfactory to the Company or its Subsidiary,
as applicable.

     (c) To the Knowledge of the Selling Stockholder, all Software used internally by the Company
or its Subsidiaries is owned by the Company or its Subsidiaries or used pursuant to a valid license
or other right. To the Knowledge of the Selling Stockholder, the Company and its Subsidiaries have
taken commercially reasonable steps with respect to all material Software used in the Company’s or
its Subsidiaries’ Ordinary Course of Business to ensure that such

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Software
(i) is in satisfactory working order; and (ii) is not configured or designed to include viruses, trojan horses, and other
malicious code.

     3.11 Material Contracts.

     (a) Schedule 3.11(a) sets forth all of the following Contracts to which the Company or
any of its Subsidiaries is a party or by which it is bound (collectively, the “Material
Contracts”):

     (i) Contracts with the Selling Stockholder or an Affiliate thereof, or any officer or
director of the Selling Stockholder or any Affiliate thereof;

     (ii) Contracts with any labor union or association representing any employee of the
Company or any of its Subsidiaries;

     (iii) Contracts for the sale of any of the assets of the Company or any of its
Subsidiaries, for consideration in excess of $50,000 (individually or in the aggregate);

     (iv) Contracts relating to any acquisition to be made by the Company or any of its
Subsidiaries of any operating business or the capital stock of any other Person, in each
case for consideration in excess of $100,000 (individually or in the aggregate);

     (v) Contracts relating to the incurrence of Indebtedness of the Company or any of its
Subsidiaries;

     (vi) Contracts relating to the lending of money by the Company or any of its
Subsidiaries (but excluding trade accounts receivable) evidenced by notes, debentures, bonds
or other similar instruments; and

     (vii) Contracts relating to any the Company’s or Subsidiary’s granting to any Person a
Lien on any of the assets of any the Company or Subsidiary, in whole or in part (other than
Permitted Exceptions or Liens granted in the Ordinary Course of Business);

     (viii) Contracts relating to any the Company’s or Subsidiary’s capital expenditures,
capitalized lease obligations, or its acquisition or construction of fixed assets for or in
respect of any real property, involving payments in excess of $50,000 (individually or in
the aggregate);

     (ix) Contracts relating to the Company’s or any Subsidiary’s purchase, lease or
maintenance of equipment, vehicles, inventory, materials, supplies, machinery, equipment,
parts or any other property or services (excluding any such Contract (A) which involves
expenditures of less than $100,000, or less than $50,000 annually, (B) made in the Ordinary
Course of Business, or (C) that is terminable by the Company or any of its Subsidiaries
without penalty on notice of one hundred eighty (180) days or less);

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     (x) Contracts under which any Company or Subsidiary has granted or received a material
license or sublicense (other than generally available off-the-shelf software licenses) under
which any Company or Subsidiary is obligated to pay or has the right to receive a royalty or
license fee in excess of $50,000 per annum;

     (xi) Contracts relating to any the Company’s or Subsidiary’s obligation for employment,
compensation for employment or severance of employment, or consulting services with (A) any
the Company’s or Subsidiary’s officers or directors, or (B) any other employee or consultant
of any the Company or Subsidiary who is entitled to base compensation thereunder in excess
of $100,000 per annum;

     (xii) any Contract that obligates any the Company or any Subsidiary not to compete with
any business;

     (xiii) any Contract that is a joint venture or partnership contract or a limited
liability company operating agreement;

     (xiv) Any Contract which requires the expenditure by the Company and/or any of its
Subsidiaries of more than $100,000 individually or in the aggregate after the date of this
Agreement; and

     (xv) Contracts that require the Company or its Subsidiaries to purchase their total
requirements of any product or service from a single third party or that contain “take or
pay” provisions.

     (b) Except as set forth on Schedule 3.11(b), neither the Selling Stockholder, the
Company nor any of its Subsidiaries has received any written (i) notice of termination or (ii)
notice of any default or event that with notice or lapse of time, or both, would constitute a
default by the Company and its Subsidiaries, in either case, under any Material Contract.

     3.12 Employee Benefits Plans.

     (a) Schedule 3.12(a) lists each “employee benefit plan” (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and each
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA (a
“Multiemployer Plan”), written employment or consulting agreement, termination agreement,
change in control agreement, severance agreement, retention agreement, and each bonus, incentive
compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, equity compensation, leave of
absence, layoff, vacation, dependent care, legal services, cafeteria, life, health, accident,
disability, worker’s compensation or other employee insurance, severance, separation plan or
written agreement or other employee benefit plan, practice, policy or arrangement as to which any
Company or any Subsidiary has any obligation or liability, contingent or otherwise, for the benefit
of any current or former employee, officer or director of any Company or any of its Subsidiaries
(each, a “Benefit Plan”). Section (A) of Schedule 3.12(a) identifies each Benefit
Plan that is maintained, sponsored, contributed to or required to

20

 

be contributed to solely by the
Company or any of its Subsidiaries (the “Company Benefit Plans”), and Section (B) of
Schedule 3.12(a) identifies each Benefit Plan that is maintained, sponsored, contributed to
or required to be contributed to by the Selling Stockholder or any of its Affiliates (other than
the Company and any Subsidiary of the Company) (the “Selling Stockholder Plans”). There
has been delivered to Purchaser current, correct and complete copies of (i) each Company Benefit
Plan (including any amendments thereto) (or, in the case of any such Company Benefit Plan that has
no plan document, written descriptions thereof), (ii) the three most recent annual reports on Form
5500 required to be filed with the IRS or Department of Labor with respect to each Company Benefit
Plan (if any such report was required), (iii) current summary plan descriptions for each Benefit
Plan for which such summary plan description is required and (iv) each trust agreement and
insurance or group annuity contract relating to any Company Benefit Plan. Each Company Benefit
Plan has been maintained and administered in all material respects in accordance with its terms and
with the applicable
requirements of ERISA, the Code and all other applicable Laws, except for any noncompliance
that would not have a Material Adverse Effect.

     (b) (i) Each Benefit Plan intended to be tax qualified under Section 401(a) of the Code (each,
a “Pension Plan”) has at all times since its adoption been so qualified, and each trust
which forms a part of any such plan has at all times since its adoption been tax-exempt under
Section 501(a) of the Code; and (ii) no event has occurred since the date of the most recent
determination letter or application therefor relating to any such Pension Plan that would adversely
affect the qualification of such Pension Plan, except in either case noncompliance that would not
have a Material Adverse Effect. There has been delivered to Purchaser a correct and complete copy
of the most recent determination letter received with respect to each Pension Plan, as well as a
correct and complete copy of each pending application for a determination letter, if any.

     (c) No Pension Plan has incurred an “accumulated funding deficiency” (as such term is defined
in Section 302 of ERISA or Section 412 of the Code).

     (d) No Benefit Plan is or has been a Multiemployer Plan or a multiple employer plan.

     (e) No Benefit Plan provides post-retirement coverage with respect to health, life, death or
other welfare benefit (whether or not insured) as required by Part 6 of Subtitle B of Title I of
ERISA or section 4980B of the Code or any State laws requiring continuation of benefits coverage
following termination of employment.

     (f) No suit, actions or other litigation (excluding claims for benefits incurred in the
ordinary course of plan activities) have been brought or, to the Knowledge of the Selling
Stockholder, threatened against or with respect to any Benefit Plan and there are no facts or
circumstances known to the Selling Stockholder, a Company or any Subsidiary that could reasonably
be expected to give rise to any such suit, action or other litigation.

21

 

     (g) All contributions to Benefit Plans and Multiemployer Plans that were required to be made
under such Benefit Plans or applicable Law have been timely made, except where the failure to make
such timely contribution would not have a Material Adverse Effect.

     (h) Except as set forth in Schedule 3.12(a), neither the Company nor any Subsidiary is
subject to any oral or written (i) agreement with any stockholder, director, officer or other
employee of a Company or any Subsidiary (A) the benefits of which are contingent either alone or in
combination with any other event (e.g. termination of employment), or the terms of which will be
materially altered, upon the occurrence of a transaction involving the Company of the nature of any
of the transactions contemplated by this Agreement, (B) providing any term of employment or
compensation guarantee or (C) providing severance benefits or other benefits after the termination
of employment of such director, officer or employee; or (ii) agreement or plan binding the Company
or any Subsidiary, including any stock option plan, stock appreciation right plan, restricted stock
plan, stock purchase plan, employment agreement, change in control agreement or severance benefit
plan, the benefits of which shall be triggered or
increased, or the vesting of the benefits under which shall be accelerated, by the occurrence
of any of the transactions contemplated by this Agreement, either alone or in combination with any
other event, or the value of any benefits under which shall be calculated on the basis of any of
the transactions contemplated by this Agreement.

     (i) Each individual that renders services to a Company or any Subsidiary who is classified by
the Company or such Subsidiary as having the status of (i) an independent contractor or other
non-employee status, or (ii) as an exempt or non-exempt employee, is properly so classified for all
purposes, including but not limited to (a) taxation and tax reporting, (b) eligibility to
participate in the Benefit Plans, (iii) Fair Labor Standards Act purposes, and (iv) applicable Laws
governing the payment of wages, except where the failure to be so classified would not reasonably
be expected to result in a Material Adverse Effect.

     (j) To the Knowledge of the Selling Stockholder, each Benefit Plan that is a “nonqualified
deferred compensation plan” (as defined under Section 409A(d)(1) of the Code) has been operated and
administered in good faith compliance with Section 409A of the Code from the period beginning
January 1, 2005 through the date hereof and has not been materially modified since October 2, 2004,
except where the failure to so operate or administer would not reasonably be expected to result in
a Material Adverse Effect. Any amounts paid or payable pursuant to each Benefit Plan subject to
Section 409A is not includible in the gross income of a service recipient (within the meaning of
Section 409A) until received by the service recipient and is not subject to interest or the
additional tax imposed by Section 409A of the Code, and there are no agreements in place that would
entitle a participant in any such plan to reimbursement for any such additional tax, in each case
subject to timely amendments to any such Benefit Plan to comply with Section 409A of the Code and
except as would not reasonably be expected to result in a Material Adverse Effect.

     3.13 Labor.

     (a) Except as set forth on Schedule 3.13(a), neither the Company nor any of its
Subsidiaries is a party to any labor or collective bargaining agreement.

22

 

     (b) Except as set forth on Schedule 3.13(b), there are no (i) strikes, work stoppages,
work slowdowns or lockouts pending or, to the Knowledge of the Selling Stockholder, threatened
against or involving the Company or any of the Subsidiaries, or (ii) unfair labor practice charges,
grievances or complaints pending or, to the Knowledge of the Selling Stockholder, threatened by or
on behalf of any employee or group of employees of the Company or any of its Subsidiaries, except
in each case as would not have a Material Adverse Effect.

     3.14 Litigation. Except as set forth on Schedule 3.14, there are no Legal
Proceedings pending or, to the Knowledge of the Selling Stockholder, threatened against the Company
or its Subsidiaries before any Governmental Body, which, if adversely determined, would have a
Material Adverse Effect. The Company is not subject to any Order of any Governmental Body except
to the extent the same would not reasonably be expected to have a Material Adverse Effect.

     3.15 Compliance with Laws; Permits.

     (a) Except as set forth in Schedule 3.15(a), the Company and its Subsidiaries are in
compliance with all Laws of any Governmental Body applicable to their respective businesses or
operations, except where the failure to be in compliance would not have a Material Adverse Effect.

     (b) The Company and its Subsidiaries currently have all Permits which are required for the
operation of their respective businesses as presently conducted, other than those the failure of
which to possess would not have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is in default or violation (and no event has occurred which, with notice or the lapse
of time or both, would constitute a default or violation) of any term, condition or provision of
any Permit to which it is a party, except where such default or violation would not have a Material
Adverse Effect.

     3.16 Environmental Matters. The representations and warranties contained in this
Section 3.16 are the sole and exclusive representations and warranties of the Selling
Stockholder pertaining or relating to any environmental, health or safety matters, including any
arising under any Environmental Laws. Except as set forth on Schedule 3.16 hereto and
except in each case as would not have a Material Adverse Effect:

     (a) the operations of the Company and each of its Subsidiaries are in compliance with all
applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with
any Permits required under all applicable Environmental Laws necessary to operate its business
(“Environmental Permits”);

     (b) neither the Company nor any of its Subsidiaries is subject to any pending, or to the
knowledge of the Selling Stockholder, threatened claim, proceeding or action alleging that the
Company or any of its Subsidiaries may be in violation of any Environmental Law or any
Environmental Permit or may have any liability under any Environmental Law; and

23

 

     (c) to the Knowledge of the Selling Stockholder there are no pending or threatened
investigations of the businesses of the Company or any of its Subsidiaries, or any currently or
previously owned, operated or leased property of the Company or any of its Subsidiaries under
Environmental Laws, which would reasonably be expected to result in the Company or any of its
Subsidiaries incurring any material liability pursuant to any Environmental Law.

     3.17 Financial Advisors. Except as set forth on Schedule 3.17, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the Selling Stockholder
or the Company in connection with the transactions contemplated by this Agreement and no such
Person is entitled to any fee or commission or like payment from Purchaser in respect thereof.

     3.18 Accounts Receivable. All accounts receivable of the Company and the
Subsidiaries, whether reflected on the Balance Sheet or subsequently created, have arisen from bona
fide transactions in the Ordinary Course of Business.

     3.19 Adequacy of Assets and Contracts. The Company and the Subsidiaries own, lease or
have valid rights to use all assets and properties, including real and personal property and
tangible and intangible property, and valid rights under all Contracts, necessary to conduct their
business substantially as presently conducted, except where such failure to so own, lease or have
valid rights would not, individually or in the aggregate, result in a Material Adverse Effect. All
tangible property is in reasonable condition, ordinary wear and tear excepted and suitable for its
intended use. In the case of any property held by lease, such property has been maintained in the
condition required by the terms of the applicable lease, except where such failure to so maintain
such property would not, individually or in the aggregate, result in a Material Adverse Effect.

     3.20 Absence of Changes. Since the Balance Sheet Date, there has not been any event,
change, occurrence or circumstance that, individually or in the aggregate with any such events,
changes, occurrences or circumstances, has had or would reasonably be expected to have a Material
Adverse Effect.

     3.21 No Other Representations or Warranties; Schedules. Except for the
representations and warranties contained in this Article III and Article IV (as
modified by the Schedules hereto), none of the Selling Stockholder, the Company nor any other
Person makes any other express or implied representation or warranty with respect to the Company,
any of the Subsidiaries, the Selling Stockholder or the transactions contemplated by this
Agreement, and the Selling Stockholder disclaims any other representations or warranties, whether
made by the Company, the Selling Stockholder or any of their respective
Affiliates, officers,
directors, employees, agents or representatives. Except for the representations and warranties
contained in Article III and Article IV hereof, the Company and the Selling
Stockholder hereby disclaim all liability and responsibility for any representation, warranty,
projection, forecast, statement, or information made, communicated, or furnished (orally or in
writing) to Purchaser or its Affiliates or representatives (including any opinion, information,
projection, or advice that may have been or may be provided to Purchaser by any director, officer,
employee, agent, consultant, or representative of either of the Company or the Selling Stockholder
or any of their respective

24

 

Affiliates). The Company and the Selling Stockholder make no
representations or warranties to Purchaser regarding the probable success or future profitability
of the Company. The disclosure of any matter or item in any schedule hereto shall not be deemed to
constitute an acknowledgment that any such matter is required to be disclosed.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLING

STOCKHOLDER RELATING TO THE SELLING STOCKHOLDER

     The Selling Stockholder hereby represents to Purchaser that:

     4.1 Organization and Good Standing. The Selling Stockholder is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation as set forth above and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business.

     4.2 Authorization of Agreement. The Selling Stockholder has all requisite corporate
power, authority and legal capacity to execute and deliver this Agreement, the Ancillary Agreements
and each other agreement, document, or instrument or certificate contemplated by this Agreement or
to be executed by the Selling Stockholder in connection with the consummation of the transactions
contemplated by this Agreement (together with this Agreement, the “Selling Stockholder
Documents”), and to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and each of the Selling Stockholder Documents and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by all required
corporate action on the part of such Selling Stockholder. This Agreement has been, and each of the
Selling Stockholder Documents will be at or prior to the Closing, duly and validly executed and
delivered by the Selling Stockholder, and (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes, and each Selling Stockholder
Document, when so executed and delivered will constitute, the legal, valid and binding obligation
of the Selling Stockholder, enforceable against the Selling Stockholder in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

     4.3 Conflicts; Consents of Third Parties.

     (a) Except as set forth in Schedule 4.3(a), none of the execution and delivery by the
Selling Stockholder of this Agreement or the Selling Stockholder Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Selling Stockholder with any of
the provisions hereof or thereof will conflict with, or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of termination or
cancellation under, any provision of (i) the certificate of incorporation and by-laws (or other
organizational and governing documents) of the Selling Stockholder; (ii) any

25

 

Contract, or Permit to
which the Selling Stockholder is a party or by which any of the properties or assets of the Selling
Stockholder are bound; (iii) any Order of any Governmental Body applicable to the Selling
Stockholder or by which any of the properties or assets of the Selling Stockholder are bound; or
(iv) any applicable Law, other than, in the case of clauses (ii), (iii) and (iv), such conflicts,
violations, defaults, terminations or cancellations, that would not have a Material Adverse Effect.

     (b) Except as set forth in Schedule 4.3(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Governmental
Body is required on the part of the Selling Stockholder in connection with the execution and
delivery of this Agreement or the Selling Stockholder Documents, or the compliance by the Selling
Stockholder with any of the provisions hereof or thereof, or the consummation of the transactions
contemplated hereby, except for (A) compliance with the applicable requirements of the HSR Act, and
(B) for such other consents, waivers, approvals, Orders, permits or authorizations the failure of
which to obtain would not have a Material Adverse Effect.

     4.4 Ownership and Transfer of Shares. The Selling Stockholder is the record and
beneficial owner of the Shares, free and clear of any and all Liens and the Selling Stockholder has
all requisite power and authority to sell, transfer, assign and deliver such Shares to Purchaser as
provided in this Agreement, and such delivery will convey to Purchaser good and valid title to such
Shares, free and clear of any and all Liens.

     4.5 Litigation. There are no Legal Proceedings pending or, to the knowledge of the
Selling Stockholder, threatened that are reasonably likely to prohibit or restrain the ability of
the Selling Stockholder to enter into this Agreement or consummate the transactions contemplated
hereby.

     4.6 Financial Advisors. Except as set forth in Schedule 4.6, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the Selling Stockholder
in connection with the transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser hereby represents and warrants to the Selling Stockholder that:

     5.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York and has all requisite
corporate power and authority to own, lease and operate properties and carry on its business.

     5.2 Authorization of Agreement. Purchaser has full corporate power and authority to
execute and deliver this Agreement, the Ancillary Agreements to which Purchaser is

26

 

party and each
other agreement, document, instrument or certificate contemplated by this Agreement or to be
executed by Purchaser in connection with the consummation of the transactions contemplated hereby
and thereby (the “Purchaser Documents”), and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by Purchaser of this Agreement and
each Purchaser Document have been duly authorized by all necessary corporate action on behalf of
Purchaser. This Agreement has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by Purchaser and (assuming the due authorization, execution
and delivery by the other parties hereto and thereto) this Agreement constitutes, and each
Purchaser Document when so executed and delivered will constitute, the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).

     5.3 Conflicts; Consents of Third Parties.

     (a) None of the execution and delivery by Purchaser of this Agreement or the Purchaser
Documents, the consummation of the transactions contemplated hereby or thereby, or the compliance
by Purchaser with any of the provisions hereof or thereof will conflict with, violate, result in
any breach of, constitute a default (with or without notice or lapse of time, or both) under, give
rise to a right of termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any Person, or result in the creation of any encumbrance upon any of the properties
or assets of any Company or Subsidiary under, any provision of (i) the certificate of incorporation
and by-laws of Purchaser; (ii) any Contract or Permit to which Purchaser is a party or by which
Purchaser or its properties or assets are bound; (iii) any Order of any Governmental Body
applicable to Purchaser or by which any of the properties or assets of Purchaser are bound; or (iv)
any applicable Law.

     (b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the part of Purchaser in
connection with the execution and delivery of this Agreement or the Purchaser Documents, the
compliance by Purchaser with any of the provisions hereof or thereof, the consummation of the
transactions contemplated hereby or the taking by Purchaser of any other action contemplated
hereby, except for compliance with the applicable requirements of the HSR Act.

     5.4 Litigation. There are no Legal Proceedings pending or, to the knowledge of
Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of Purchaser
to enter into this Agreement or consummate the transactions contemplated hereby.

     5.5 Investment Intention. Purchaser is acquiring the Shares for its own account, for
investment purposes only and not with a view to the distribution (as such term is used in Section
2(11) of the Securities Act of 1933, as amended (the “Securities Act”) thereof.

27

 

Purchaser
understands that the Shares have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an exemption from such registration is
available.

     5.6 Financial Advisors. No Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.

     5.7 Financial Capability. Purchaser has, and at the Closing will have, sufficient
internal funds (without giving effect to any unfunded financing regardless of whether any such
financing is committed) available to pay the Purchase Price and any expenses incurred by Purchaser
in connection with the transactions contemplated by this Agreement.

     5.8 Condition of the Business. Notwithstanding anything contained in this Agreement
to the contrary, Purchaser acknowledges and agrees that neither the Company nor the
Selling Stockholder is making any representations or warranties whatsoever, express or
implied, beyond those expressly given by the Selling Stockholder in Article III and
Article IV. Purchaser further represents that none of the Company, the Selling Stockholder
or any of their respective Affiliates nor any other Person has made any representation or warranty,
express or implied, as to the accuracy or completeness of any information regarding the Company or
any of the Subsidiaries, the Selling Stockholder, or the transactions contemplated by this
Agreement not expressly set forth in this Agreement, and none of the Company, the Selling
Stockholder, any of their respective Affiliates or any other Person will have or be subject to any
liability to Purchaser or any other Person resulting from the distribution to Purchaser or its
representatives or Purchaser’s use of, any such information, including any confidential memoranda
distributed on behalf of the Company relating to the Company or any of the Subsidiaries or other
publications or data room information provided to Purchaser or its representatives, or any other
document or information in any form provided to Purchaser or its representatives in connection with
the sale of the Company and its Subsidiaries and the transactions contemplated hereby. Purchaser
acknowledges that it has conducted to its satisfaction, its own independent investigation of the
condition, operations and business of the Company and the Subsidiaries and, in making its
determination to proceed with the transactions contemplated by this Agreement, Purchaser has relied
on the results of its own independent investigation.

ARTICLE VI

COVENANTS

     6.1 Access to Information. For a period of two (2) years after the Closing, Purchaser
will give the Selling Stockholder reasonable access during Purchaser’s regular business hours upon
reasonable advance notice and under reasonable circumstances and shall be subject to restrictions
under applicable Law to books and records transferred to Purchaser to the extent necessary for the
preparation of financial statements, regulatory filings or Tax returns of the Company, the
Subsidiaries and the Selling Stockholder or their Affiliates in respect of periods ending on or
prior to Closing, or in connection with any Legal Proceedings. The Selling

28

 

Stockholder shall be
entitled, at its sole cost and expense, to make copies of the books and records to which it is
entitled to access pursuant to this Section 6.1. Notwithstanding anything herein to the
contrary, no such access to books and records shall be permitted to the extent that it would
require Purchaser, a Company or a Subsidiary to disclose information subject to attorney-client
privilege or conflict with any confidentiality obligations to which Purchaser, the Company or such
Subsidiary is bound.

     6.2 Indemnification, Exculpation and Insurance.

     (a) From and after the Closing Date, Purchaser shall, or shall cause the Company and the
Subsidiaries to, indemnify, defend and hold harmless, to the fullest extent permitted under
applicable Law, the individuals who on or prior to the Closing Date were directors, officers or
employees of the Company or any of the Subsidiaries (collectively, the “Indemnitees”) with
respect to all acts or omissions by them in their capacities as such or taken at the request of the
Company or any of the Subsidiaries at any time prior to the Closing Date. Purchaser agrees that
all rights of the Indemnitees to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Closing Date as provided in the
respective certificate of incorporation or by-laws or comparable organizational documents of the
Company or any of the Subsidiaries as now in effect of the Company or any of the Subsidiaries shall
survive the Closing Date and shall continue in full force and effect in accordance with their
terms. Such rights shall not be amended, or otherwise modified in any manner that would adversely
affect the rights of the Indemnitees, unless such modification is required by Law. In addition,
Purchaser shall pay any expenses of any Indemnitee under this Section 6.2, as incurred to
the fullest extent permitted under applicable Law, provided that the person to whom expenses are
advanced provides an undertaking to repay such advances to the extent required by applicable Law.

     (b) The provisions of this Section 6.2 (i) are intended to be for the benefit of, and
shall be enforceable by, each Indemnitee, his or her heirs and his or her representatives; and (ii)
are in addition to, and not in substitution for, any other rights to indemnification or
contribution that any such person may have by Contract or otherwise. The obligations of Purchaser
under this Section 6.2 shall not be terminated or modified in such a manner as to adversely
affect any Indemnitee to whom this Section 6.2 applies without the consent of the affected
Indemnitee (it being expressly agreed that the Indemnitees to whom this Section 6.2 applies
shall be third party beneficiaries of this Section 6.2).

     6.3 Preservation of Records. The Selling Stockholder and Purchaser agree that each of
them shall preserve and keep the records held by them or their Affiliates relating to the
respective businesses of the Company and the Subsidiaries for a period of seven years from the
Closing Date and shall make such records and personnel available to the other as may be reasonably
required by such party in connection with, among other things, any insurance claims by, Legal
Proceedings or tax audits against or governmental investigations of the Selling Stockholder or
Purchaser or any of their Affiliates or in order to enable the Selling Stockholder or Purchaser to
comply with their respective obligations under this Agreement and each other agreement, document or
instrument contemplated hereby or thereby. In the event the Selling Stockholder or Purchaser
wishes to destroy such records after that time, such party shall first

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give ninety (90) days prior
written notice to the other and such other party shall have the right at its option and expense,
upon prior written notice given to such party within such 90-day period, to take possession of the
records within one hundred eighty (180) days after the date of such notice.

     6.4 Publicity.

     (a) Neither the Selling Stockholder nor Purchaser shall, and the Selling Stockholder shall
cause the Company not to, issue any press release or public announcement concerning this Agreement
or the transactions contemplated hereby without obtaining the prior written approval of the other
party hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole
judgment of the Selling Stockholder, the Company or Purchaser, as applicable, disclosure is
otherwise required by applicable Law or by the applicable rules of any stock exchange on which the
Selling Stockholder, the Company or Purchaser lists securities, provided that, to the extent
required by applicable Law, the party intending to make such release
shall use its commercially reasonable efforts consistent with such applicable Law to consult
with the other party with respect to the timing and content thereof.

     (b) Each of Purchaser and the Selling Stockholder agree, and the Selling Stockholder shall
advise the Company, that the terms of this Agreement shall not be disclosed or otherwise made
available to the public and that copies of this Agreement shall not be publicly filed or otherwise
made available to the public, except where such disclosure, availability or filing is required by
applicable Law and only to the extent required by such Law.

     6.5 Use of Name. Purchaser agrees that it shall have no right, title or interest in
or to the name “Hollywood Media Corp.” or any other Marks of the Selling Stockholder or any of its
Affiliates (other than the names of the Company or its Subsidiaries and the Marks listed on
Schedule 6.5(a) and Schedule 3.10 (collectively, the “Purchased Marks”),
after the Closing) or any other Marks containing or comprising the foregoing or confusingly similar
thereto (all of the foregoing collectively, the “Retained Marks”). Purchaser agrees that
it will not, and will cause the Company and its Subsidiaries to not, at any time hold itself out as
having any affiliation with the Selling Stockholder, or any of its Affiliates. In furtherance
thereof, as promptly as practicable but in no event later than one hundred and twenty (120) days
following the Closing Date, Purchaser shall remove, strike over or otherwise obliterate all
references to the Hollywood Media Corp. name and mark and the other names and marks listed on
Schedule 6.5(b) (collectively, the “Restricted Marks”) from all materials
including, without limitation, any vehicles, business cards, schedules, stationery, packaging
materials, displays, signs, promotional materials, manuals, forms, Web sites, computer software and
other materials. Purchaser agrees that use of the Restricted Marks during the period authorized by
this Section 6.5 shall be (i) only with respect to inventories of packaging, labels, sales
literature and other hard copy materials existing as of the Closing Date, (ii) strictly the same as
existed prior to the Closing Date, and (iii) at a level of quality equal to, or greater than, the
quality of goods and services with respect to which the Restricted Marks were used by the Selling
Stockholder prior to the Closing Date. Purchaser agrees (i) not to contest the ownership or
validity of any rights of the Selling Stockholder or any of its Affiliates in or to the Retained
Marks, (ii) that the Retained Marks are the sole property of the Selling Stockholder or its
Affiliates and Purchaser will do nothing

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inconsistent with such ownership, and (iii) not to attack
the Retained Marks in any way or use, register or seek to register any Trademark which is the same
as, contains, or is confusingly similar to a Retained Mark.

     6.6 Employment and Employee Benefits.

     (a) Continuing Employment. The Purchaser shall cause the Company and the Subsidiaries,
for a period of not less than 91 days after the Closing Date, (i) to offer and continue the
employment of all or substantially all, of the persons actively employed by the Company and
Subsidiaries as of the time immediately prior to the Closing (the “Continuing Employees”),
at salary or hourly wage rates (as the case may be) not less than the salary or hourly wage rates
in effect as of the time immediately prior to the Closing, and (ii) not to effectuate any “plant
closing” or “mass layoff” with respect to “affected employees” of any Company or its “business
enterprises”, as each such term is defined in the WARN Act, and Purchaser agrees to indemnify and
hold harmless the Selling Stockholder and its subsidiaries, officers, directors, agents and
employees from and against any and all damages, costs, obligations, losses and expenses which
arise out of or in connection with any actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees or rulings relating
to occurrences following the Closing involving the employees of the Company and its Subsidiaries
arising under, pursuant to or in connection with the WARN Act or similar state laws or the failure
to offer or continue employment of employees required under this Section 6.6, including
employment discrimination claims. The Selling Stockholder shall retain each Selling Stockholder
Plan, and the Selling Stockholder shall retain, and Purchaser shall have no responsibility for any
and all liabilities that have arisen or may arise with respect to (i) any Selling Stockholder Plan,
(ii) any employee or former employee who is not a Continuing Employee, and (iii) any Continuing
Employee to the extent attributable to events or circumstances occurring or existing on or prior to
the Closing Date. Nothing contained in this Section 6.6 shall confer upon any Continuing
Employee, or legal representative or beneficiary thereof, any rights or remedies, be construed as
requiring Purchaser, the Company or any of its Subsidiaries to continue any specific employee
benefit plans or to continue the employment of any specific person, or prevent Purchaser, the
Company or any of its Subsidiaries from modifying or terminating any Company Benefit Plan, or
otherwise modifying the terms and conditions of a Continuing Employee’s employment.

     (b) Benefits.

     (i) Purchaser shall cause all its and its Affiliate’s welfare benefit plans (including
medical, dental, life insurance, and short-term and long-term disability benefit plans) in
which Continuing Employees participate following the Closing to (i) waive all limitations as
to preexisting conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Continuing Employees and their covered dependents
under such plans (except to the extent such conditions, exclusions or waiting periods would
apply under the Company’s or the Selling Stockholder’s plans as in existence prior to the
Closing) and (ii) provide each Continuing Employee and his or her covered dependents with
credit for any copayments and deductibles paid prior to Closing in satisfying any applicable
deductible or out-of-pocket

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requirements under such plans. To the extent that the
Continuing Employees become eligible to participate in any employee benefit plan, program or
arrangement maintained by Purchaser or any of its Affiliates, Purchaser shall cause the
Continuing Employees to receive credit for all periods of employment and/or service with the
Company (including service with predecessor employers, where such credit was provided by the
Company) prior to the Closing Date for purposes of determining eligibility service and
vesting service, to the extent such credit does not result in a duplication of benefits.
Purchaser shall assume (and cause the Company and Subsidiaries to assume) responsibility for
the vacation time and sick leave benefits due to the Continuing Employees as of the Closing
Date and accrued; and to take and cause the Company and Subsidiaries to take such legally
required and other appropriate actions to terminate the participation of all Continuing
Employees in the Benefit Plans following the Closing and to terminate any contributions
following the Closing by the Continuing Employees to the Selling Stockholder’s 401(k) plan.

     (ii) After the Closing Date, Purchaser and the Company and Subsidiaries shall assume
and be solely responsible for all liabilities and obligations in connection with claims made
by or on behalf of Continuing Employees in respect of severance pay, salary continuation and
similar obligations relating to the termination or alleged termination after the Closing
Date of any Continuing Employee’s employment with any Company or Subsidiary.

     (iii) The Selling Stockholder shall retain each Selling Stockholder Plan, and Purchaser
shall have no responsibility for, any and all liabilities that have arisen or may arise with
respect to any Selling Stockholder Plan. Without limiting the scope of the foregoing, the
Selling Stockholder shall assume and be responsible for (i) claims for workers compensation
or for the type of benefits described in Section 3(1) of ERISA (whether or not covered by
ERISA) that are incurred on or prior to the Closing Date by any employee or former employee
(or their beneficiaries and dependents) of a Company or any of its Subsidiaries, and (ii)
claims relating to “COBRA” (the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the regulations thereunder) coverage attributable to “qualifying events”
occurring on or prior to the Closing Date with respect to any employee or former employee
(or their beneficiaries and dependents) of the Company or any of its Subsidiaries. For
purposes of the foregoing, a medical/dental claim shall be considered incurred when the
medical services are rendered or medical supplies are provided, and not when the condition
arose; provided, that claims relating to a hospital confinement that commences on or
prior to the Closing Date but continues thereafter shall be treated as incurred on or prior
to the Closing Date. A disability or workers compensation claim shall be considered
incurred on or prior to the Closing Date if the injury or condition giving rise to the claim
occurs on or prior to the Closing Date.

     6.7 Further Assurances. Purchaser shall, and the Selling Stockholder shall and shall
cause the Company and each of the Subsidiaries to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the

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fulfillment at the
earliest practicable date of all of the conditions to their respective obligations to consummate
the transactions contemplated by this Agreement.

     6.8 Disclosure Schedules. The Selling Stockholder may, at its option, include in the
Schedules items that are not material in order to avoid any misunderstanding, and such inclusion,
or any references to dollar amounts, shall not be deemed to be an acknowledgement or representation
that such items are material, to establish any standard of materiality or to define further the
meaning of such terms for purposes of this Agreement.

ARTICLE VII

SURVIVAL; INDEMNIFICATION

     7.1 Survival of Representations, Warranties and Covenants. The representations and
warranties of the Selling Stockholder and Purchaser contained in this Agreement shall survive the
Closing and expire on the date that is twelve (12) months after the

     Closing Date. Notwithstanding the foregoing, (i) the representations and warranties of the
Selling Stockholder set forth in Section 4.4 (the “Fundamental Representation”)
shall survive without limitation or (ii) the representations and warranties of the Selling
Stockholder set forth in Sections 3.7 and 3.12 shall survive until sixty (60) days
after the expiration of the applicable statute of limitations. The covenants and agreements of the
Selling Stockholder and Purchaser contained in this Agreement shall survive the Closing and remain
in full force and effect until sixty (60) days following the date by which such covenant or
agreement is required to be performed.

     7.2 Indemnification by the Selling Stockholder. The Selling Stockholder shall save,
defend, indemnify and hold harmless Purchaser and its Affiliates (including after the Closing, the
Company and the Subsidiaries), and their respective officers, directors, employees, agents,
successors and assigns (collectively, the “Purchaser Indemnified Parties”) from and against
any and all losses, damages, liabilities, deficiencies, claims, interest, awards, obligations,
debts, fines, fees, judgments, penalties, costs and expenses (including reasonable attorneys’ fees,
costs and other out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (hereinafter collectively, “Losses”) arising out of, in connection with or
resulting from:

     (a) any breach of any representation or warranty made by the Selling Stockholder contained in
this Agreement (other than breaches of any representation or warranty contained in Section
3.7); and

     (b) any breach of or failure to perform, carry out, satisfy or discharge any covenant or
agreement of the Selling Stockholder contained in this Agreement (other than any breach of or
failure to perform, carry out, satisfy or discharge any covenant or agreement contained in
Article VIII).

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     7.3 Indemnification by Purchaser.

     (a) Purchaser shall save, defend, indemnify and hold harmless the Selling Stockholder and its
Affiliates, and their respective officers, directors, employees, agents, successors and assigns
(collectively, the “Seller Indemnified Parties”) from and against any and all Losses
arising out of, in connection with or resulting from:

     (b) any breach of any representation or warranty made by Purchaser contained in this
Agreement; and

     (c) any breach of or failure to perform, carry out, satisfy or discharge any covenant or
agreement of Purchaser contained in this Agreement.

     7.4 Procedures.

     (a) In order for a Purchaser Indemnified Party or Seller Indemnified Party (the
“Indemnified Party”) to be entitled to any indemnification provided for under this
Agreement as a result of a Loss or a claim or demand made by any Person against the Indemnified
Party (a
“Third Party Claim”), such Indemnified Party shall deliver notice thereof to the party
against whom indemnity is sought (the “Indemnifying Party”) promptly after receipt by such
Indemnified Party of written notice of the Third Party Claim, describing in reasonable detail the
facts giving rise to any claim for indemnification hereunder, the amount or method of computation
of the amount of such claim (if known) and copies of any relevant documentation evidencing such
claim. The failure to provide such notice, however, shall not release the Indemnifying Party from
any of its obligations under this Article VI except and solely to the extent that the Indemnifying
Party is prejudiced by such failure.

     (b) The Indemnifying Party shall have the right, upon written notice to the Indemnified Party
within thirty (30) days of receipt of notice from the Indemnified Party of the commencement of such
Third Party Claim, to assume the defense thereof at the expense of the Indemnifying Party with
counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party;
provided, that the Indemnifying Parties shall agree that such Third Party Claim is covered
by the indemnity set forth herein. If the Indemnifying Party assumes the defense of such Third
Party Claim, the Indemnified Party shall have the right to employ separate counsel and to
participate in the defense thereof, but the fees and expenses of such counsel shall be at the sole
cost and expense of the Indemnified Party. Regardless of whether the Indemnifying Party assumes
the defense of any Third Party Claim, each party shall cooperate with the other party in such
defense and make available all witnesses, pertinent records, materials and information in its
possession or under the its control relating thereto as is reasonably required by the other party.
Notwithstanding the foregoing, the Indemnified Party shall not be required to relinquish control of
such defense to the Indemnifying Party and the Indemnified Party may subsequently reassert control
over such defense in the event that the Indemnifying Party does not conduct the defense of the
action, suit, proceeding or claim in good faith and in a commercially reasonable manner. The party
controlling such defense shall keep the other party hereto advised of the status of such
Third-Party Claim and the defense thereof and shall consider recommendations made by the other
party hereto with respect thereto. The Indemnifying Party

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shall not agree to any settlement of
such Third-Party Claim that imposes any liability or obligation on the Indemnified Party or that
does not include a full, complete and unconditional release of the Indemnified Party from all
liability with respect thereto, in each case, without the prior written consent of the Indemnified
Party.

     (c) In the event any Indemnified Party should have a claim against any Indemnifying Party
hereunder that does not involve a Third Party Claim being asserted against or sought to be
collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim
promptly to the Indemnifying Party, describing in reasonable detail the facts giving rise to any
claim for indemnification hereunder, the amount or method of computation of the amount of such
claim (if known) and copies of any relevant documentation evidencing such claim. The failure to
provide such notice, however, shall not release the Indemnifying Party from any of its obligations
under this Article VII except to the extent and solely that the Indemnifying Party is prejudiced by
such failure. The Indemnifying Party will have thirty (30) days from receipt of such notice to
dispute the claim. If the Indemnifying Party does not give notice to the Indemnified Party that it
disputes such claim within 30 days after its receipt of such notice, the claim specified in the
notice will be conclusively deemed a Loss subject to
indemnification hereunder. The Indemnified Party shall reasonably cooperate and assist the
Indemnifying Party in determining the validity of any claim for indemnity by the Indemnified Party
and in otherwise resolving such matters. Such assistance and cooperation shall include providing
reasonable access to and copies of information, records and documents relating to such matters,
furnishing employees to assist in the investigation, defense and resolution of such matters and
providing legal and business assistance with respect to such matters.

     7.5 Limits on Indemnification.

     (a) No claim may be asserted against either party for breach of any representation, warranty
or covenant contained herein, unless written notice of such claim is received by such party
pursuant to the terms hereof on or prior to the date on which the representation, warranty or
covenant on which such claim is based ceases to survive as set forth in Section 7.1, in
which case such representation, warranty or covenant shall survive as to such claim until such
claim has been finally resolved.

     (b) Notwithstanding anything to the contrary contained in this Agreement:

     (i) the maximum aggregate amount of indemnifiable Losses that may be recovered from the
Selling Stockholder by Purchaser Indemnified Parties pursuant to Section 7.2(a)
shall be an amount equal to $3,500,000;

     (ii) the Selling Stockholder shall not be liable to any Purchaser Indemnified Party for
any claim for indemnification pursuant to Section 7.2(a) unless and until the
aggregate amount of indemnifiable Losses that may be recovered from the Seller equals or
exceeds $100,000, and thereafter the Selling Stockholder shall be liable only for the amount
of Losses that exceeds $100,000;

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     (iii) the maximum aggregate amount of indemnifiable Losses that may be recovered from
Purchaser by Seller Indemnified Parties pursuant to Section 7.3(a) shall be an
amount equal to $3,500,000;

     (iv) Purchaser shall not be liable to any Seller Indemnified Party for any claim for
indemnification pursuant to Section 7.3(a) unless and until the aggregate amount of
indemnifiable Losses that may be recovered from Purchaser equals or exceeds $100,000, and
thereafter Purchaser shall be liable only for the amount of Losses that exceeds $100,000;
and

     (v) the right to indemnification or any other remedy in favor of Purchaser Indemnified
Parties based on representations, warranties, covenants and agreements in this Agreement
shall not be affected by any investigation conducted at any time, or any knowledge acquired
(or capable of being acquired) prior to the execution and delivery of this Agreement.

     (c) The limitations contained in Section 7.5(b) shall not apply to indemnifiable
Losses in respect of a breach of the Fundamental Representation.

ARTICLE VIII

TAX MATTERS

     8.1 338(h)(10) Election.

     (a) Upon the request of Purchaser, the Selling Stockholder shall, or shall cause their
Affiliates to, join with Purchaser in making an election under Section 338(h)(10) of the Code and
the Treasury Regulations and any corresponding or similar elections under state, local or foreign
tax law (collectively, the “Section 338(h)(10) Election”) with respect to the Company and
each of the Subsidiaries. Any such request shall be made by Purchaser in writing no later than one
hundred fifty (150) days after the Closing Date. For the purpose of making the Section 338(h)(10)
Election for federal income tax purposes, on or prior to the Closing Date, the Selling Stockholder
shall deliver to Purchaser an executed original IRS Form 8023 (or successor form). If no Section
338(h)(10) Election is to be made, the Form 8023 will be returned to the Selling Stockholder within
one hundred fifty (150) days after the Closing Date. If a Section 338(h)(10) Election is to be
made, Purchaser will file the Form 8023 with the IRS at least thirty (30) days prior to the due
date of such form, and Purchaser will provide the Selling Stockholder a copy of such filing. In the
event Purchaser does not request that the Selling Stockholder join in making the Section 338(h)(10)
Election, the remainder of the provisions of this Section 8.1 shall not apply.

     (b) Purchaser shall be responsible for the preparation and filing of all forms and documents
required to effectuate the Section 338(h)(10) Election. In addition to the Form 8023, the Selling
Stockholder shall execute (or cause to be executed) and deliver to Purchaser such additional
documents or forms as are reasonably requested to complete properly the

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Section 338(h)(10) Election
at least thirty (30) days prior to the date such Section 338(h)(10) Election is required to be
filed.

     (c) Purchaser and the Selling Stockholder shall file, and shall cause their Affiliates to
file, all Tax Returns and statements, forms and schedules in connection therewith in a manner
consistent with the Section 338(h)(10) Election and shall take no position contrary thereto unless
required to do so by applicable laws.

     (d) Within (60) days after notifying the Selling Stockholder of its intent to make a Section
338(h)(10) Election, Purchaser shall provide to the Selling Stockholder a statement (the
“Allocation Statement”) allocating the Purchase Price or any other items that are treated
as additional Purchase Price for tax purposes among the Company and the Subsidiaries and among the
different items of assets of the Company and the Subsidiaries. Purchaser shall provide the Selling
Stockholder a reasonable opportunity to review and comment on the Allocation Statement and
cooperate in good faith with the Selling Stockholder to resolve any disagreement relating to the
calculations or allocations set forth in the Allocation Statement. Thereafter, Purchaser shall
provide to the Selling Stockholder from time to time revised copies of the Allocation Statement
(the “Revised Statements”) so as to report any matters on the Allocation Statement that
need updating (including Purchase Price adjustments, if any) and reflect the resolution of any
disagreements relating to the Allocation Statement between the
Selling Stockholder and Purchaser as described in the immediately preceding sentence, it being
understood that the Purchaser shall be permitted to resolve any such disagreements and reflect its
resolution on an Allocation Statement to be treated as final by the parties hereto;
provided, however, that in no event shall the allocation of the Purchase Price and
any other items that are treated as additional Purchase Price for tax purposes as set forth in the
Allocation Statement or any revised Statements be less than the adjusted tax basis of the
corresponding asset (except where the fair market value of such asset is not reasonably reflected
by its adjusted tax basis). Purchaser and the Selling Stockholder shall allocate the Purchase
Price in accordance with the Allocation Statement or, if applicable, the last Revised Statements
provided by Purchaser to the Selling Stockholder, and all Tax Returns and reports filed by
Purchaser, the Selling Stockholder, and their respective Affiliates shall be prepared consistently
with such allocation.

     8.2 Tax Indemnity. The Selling Stockholder shall save, defend, indemnify and hold
harmless the Purchaser Indemnified Parties from and against any and all Losses arising out of, in
connection with or resulting from any Taxes:

     (a) imposed on or payable by a Company or its Subsidiaries under Treasury Regulation 1.1502-6
(or any similar provision of state, local or foreign law) by reason of the Company or its
subsidiaries being included in any consolidated, affiliated, combined, unitary or similar group at
any time on or before the Closing Date,

     (b) imposed on or payable by a Company or any of its Subsidiaries with respect to any Tax
period that ends on or before the Closing Date or includes the Closing Date,

     (c) imposed as a result of or attributable to any Section 338(h)(10) Election, or

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     (d) attributable to any breach of a representation made in Section 3.7.

     8.3 Tax Returns and Payments and Other Tax Matters.

     (a) The Selling Stockholder shall prepare or cause to be prepared and file or cause to be
filed on a timely basis all Tax Returns with respect to the Company and its Subsidiaries for
Taxable periods ending on or prior to the Closing Date and pay all Tax amounts due. The parties
agree that if the Company or its Subsidiaries is permitted, but not required, under applicable Tax
laws to treat the Closing Date as the last day of a Tax Period, they will treat the Tax Period as
ending on the Closing Date. Purchaser shall provide, or shall cause the Company to provide, the
Selling Stockholder with copies of any books or records reasonably necessary for the preparation of
such Tax Returns.

     (b) Purchaser shall prepare or cause to be prepared and file or cause to be filed on a timely
basis all other Tax Returns with respect to the Company and its Subsidiaries, including Tax Returns
for Tax Periods that begin before and end after the Closing Date (a “Straddle Period”), in
a manner consistent with past practice except as otherwise required by law; provided,
however, that no Tax Returns for a Straddle Period shall be filed without the prior consent
of the Selling Stockholder, such consent not to be unreasonably withheld or delayed.
Purchaser shall cause the Company and its Subsidiaries to pay all Taxes shown on such Tax
Returns. The Selling Stockholder shall promptly reimburse Purchaser for Taxes on such returns that
would have been due by the Selling Stockholder if the Closing Date had been treated as the last
date of the taxable period. For purposes of this Section 8.3(b), in the case of Taxes
imposed on a periodic basis, the portion of the Tax that relates to the portion of the Straddle
Period ending on the Closing Date shall be deemed to be the amount of the Tax for the Straddle
Period multiplied by a fraction, the numerator of which is the number of days in the portion of the
Straddle Period ending on the Closing Date, and the denominator of which is the number of days in
the entire Straddle Period.

     (c) Other than a Section 338(h)(10) Election, or any action which would not result in
additional Tax after taking into account the effect of a Section 338(h)(10) Election, Purchaser
shall not take any action on the Closing Date other than in the ordinary course of business or
pursuant to this Agreement, including, without limitation, the sale of any assets or the
distributions of any dividend of the effectuation of any redemption, that would give rise to any
Tax liability of the Selling Stockholder or any of its affiliates or to an indemnification
obligation of the Selling Stockholder under this Agreement. On or after the Closing Date, neither
Purchaser nor the Selling Stockholder, respectively, shall amend any Tax Return, consent to the
waiver or extension of the statute of limitations relating to Taxes of a Company or its
Subsidiaries, take any Tax position on any Tax Return, or compromise or settle any Tax liability,
in each case with respect to a Pre-Closing Tax Period, if such action could have the effect of
increasing the Tax liability or reducing any Tax asset of the Selling Stockholder or Purchaser,
respectively, in each case, without the other party’s written consent, which consent shall not be
unreasonably withheld or delayed.

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     8.4 Audits.

     (a) The Selling Stockholder shall conduct any audit of or proceeding involving any Taxable
period ending on or prior to the Closing Date and, without limiting the foregoing, may in its sole
discretion pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with any Taxing authority with respect thereto and may, in its sole discretion, either
pay the Tax claimed and sue for a refund where applicable Law permits such refund suits or contest
the Tax Claim in any permissible manner; provided, however, that in the event that
the Selling Stockholder receives a claim for Taxes or a notice of a pending or threatened audit
from any Taxing authority in writing (a “Tax Claim”) with respect to a Tax Return that
relates to a Company or a Subsidiary or any such period, the Selling Stockholder shall promptly
notify Purchaser of such Tax Claim and of any action taken or proposed to be taken. In the event
that Purchaser wishes to participate in such audit or proceeding, it may do so at its own expense.

     (b) Purchaser shall, at its own expense, conduct any audit of or proceeding involving any
Taxable period ending after the Closing Date; provided, however, that in the event
that Purchaser receives a Tax Claim or a notice of a Tax Claim with respect to a Tax Return that
relates to a Company or its Subsidiaries for a Straddle Period, Purchaser shall promptly notify the
Selling Stockholder of such Tax Claim and of any action taken or proposed to be taken and shall
describe the asserted Tax liability in reasonable detail and provide to the Selling
Stockholder copies of any notice or other document received from any Taxing Authority in
respect of such asserted Tax liability. In the event that the Selling Stockholder wishes to
participate in such audit or proceeding, it may do so at its own expense. Purchaser shall not,
without the Selling Stockholder’s consent (which consent shall not be unreasonably withheld or
delayed), settle or compromise such Tax Claim if doing so could reasonably be expected to have an
adverse effect on the Selling Stockholder.

     8.5 Cooperation. The Selling Stockholder, the Company and Purchaser shall reasonably
cooperate, and shall cause their respective affiliates, officers, employees, agents, auditors and
representatives reasonably to cooperate, in preparing and filing all Tax Returns, including
maintaining and making available to each other all records necessary in connection with Taxes and
in resolving all disputes and audits relating to Taxes with respect to all Taxable periods. Each
party shall makes its employees reasonably available on a mutually convenient basis at its cost to
provide explanation of any documents or information provided.

     8.6 Termination of Tax Sharing Agreements. Any and all Tax allocation or sharing
agreements or other agreements or arrangements relating to Tax matters between a Company and its
Subsidiaries on the one hand and the Selling Stockholder or any of its Affiliates on the other hand
shall be terminated with respect to the Company and its Subsidiaries as of the day before the
Closing Date and, from and after the Closing Date, the Company shall not be obligated to make any
payment to the Selling Stockholder or any of its affiliates, any Taxing Authority or any other
Person pursuant to any such agreement or arrangement for any past or future period.

39

 

     8.7 Sole Provision Regarding Taxes. Except as expressly provided otherwise and except
for the representations contained in Section 3.7 of this Agreement, this Article VIII shall
be the sole provision governing Tax matters and indemnities therefor under this Agreement.

ARTICLE IX

MISCELLANEOUS

     9.1 Payment of Sales, Use or Similar Taxes. All sales, use, transfer, intangible,
recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable
to, or resulting from, the transactions contemplated by this Agreement shall be borne equally by
Purchaser and the Selling Stockholder, except for any such Taxes attributable to a Section
338(h)(10) Election, which shall be the sole responsibility and liability of the Selling
Stockholder.

     9.2 Expenses. Except as otherwise provided in this Agreement, each of the Selling
Stockholder and Purchaser shall bear its own expenses incurred in connection with the negotiation
and execution of this Agreement and each other agreement, document and instrument contemplated by
this Agreement and the consummation of the transactions contemplated hereby and thereby.

     9.3 Submission to Jurisdiction; Consent to Service of Process; Arbitration.

     (a) Except as provided in Section 2.4, the parties hereto hereby irrevocably submit to
the non-exclusive jurisdiction of any federal or state court located within the borough of
Manhattan of the City, County and State of New York over any dispute arising out of or relating to
this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably
agrees that all claims in respect of such dispute or any suit, action proceeding related thereto
may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest
extent permitted by applicable Law, any objection which they may now or hereafter have to the
laying of venue of any such dispute brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law.

     (b) Except as provided in Section 2.4 and as otherwise provided below regarding claims
for injunction or specific performance, any controversy, dispute or claim arising under or in
connection with this Agreement (including, without limitation, the existence, validity,
interpretation or breach hereof and any claim based on contract, tort or statute) shall be resolved
by a binding arbitration, to be held in New York, New York pursuant to the Federal Arbitration Act
and in accordance with the then-prevailing Commercial Arbitration Rules of the American Arbitration
Association (the “AAA”). Each of The Selling Stockholder and Purchaser shall select one
arbitrator and such arbitrators shall mutually agree upon the third arbitrator. Each party shall
bear its own expenses incurred in connection with arbitration and the fees and expenses of the
arbitrators shall be shared equally by the parties involved in the dispute and advanced by them
from time to time as required. It is the mutual intention and desire of the

40

 

parties that the
tribunal of three arbitrators be constituted as expeditiously as possible following the submission
of the dispute to arbitration. Once such tribunal is constituted and except as may otherwise be
agreed in writing by the parties involved in such dispute or as ordered by the arbitrators upon
substantial justification shown, the hearing for the dispute will be held within sixty (60) days of
submission of the dispute to arbitration. Each party shall have the ability to present evidence,
legal argument and witnesses to the tribunal. The tribunal shall keep a written transcript of its
proceedings. The arbitrators shall render their final award within sixty (60) days, subject to
extension by the arbitrators upon substantial justification shown of extraordinary circumstances,
following conclusion of the hearing and any required post-hearing briefing or other proceedings
ordered by the arbitrators. Any discovery in connection with arbitration hereunder shall be
limited to information directly relevant to the controversy or claim in arbitration. The
arbitrators will state the factual and legal basis for the award. The decision of the arbitrators
in any such proceeding will be final and binding and not subject to judicial review and final
judgment may be entered upon such an award in any court of competent jurisdiction, but entry of
such judgment will not be required to make such award effective. Any action against any party
hereto ancillary to arbitration pursuant to Section 9.3(a) (as determined by the
arbitrators), including any action for provisional or conservatory measures or action to enforce an
arbitration award or any judgment entered by any court in respect of any thereof may be brought in
any federal or state court of competent jurisdiction located within the State of New York, and the
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or
state court located within the State of New York over any such action. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any such action brought in such court or any
defense of inconvenient forum for the maintenance of such action. Each of the parties hereto
agrees that a judgment in any such action may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Notwithstanding the foregoing provisions of this
paragraph (b), the request by either party for specific performance or preliminary or permanent
injunctive relief to enforce this Agreement, whether prohibitive or mandatory, shall not be subject
to mandatory arbitration under this Agreement and may be adjudicated only by the courts of the
State of New York specified in the foregoing paragraph (a).

     (c) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by the delivery of a copy thereof in accordance with
the provisions of Section 9.6.

     9.4 Entire Agreement; Amendments and Waivers. This Agreement (including the schedules
and exhibits hereto) and the Confidentiality Agreement represent the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof and thereof. This
Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by
written instrument making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement

41

 

shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on
the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

     9.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and performed in such State
without giving effect to the choice of law principles of such state that would require or permit
the application of the laws of another jurisdiction.

     9.6 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand (with written confirmation
of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one
business day following the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other address or facsimile
number as a party may have specified by notice given to the other party pursuant to this
provision):

If to the Selling Stockholder, to:

Hollywood Media Corp.

2255 Glades Road, Suite 221A

Boca Raton, Florida 33431

Facsimile: (561) 998-2974

Attention: Mitchell Rubenstein

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

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Facsimile: (212) 833-3038

Attention: Dennis Barsky

If to Purchaser, to:

The New York Times Company

229 West 43rd Street

New York, NY 10031

Facsimile: (212) 556-4634

Attention: General Counsel

     9.7 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or

42

 

legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

     9.8 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any Person not
a party to this Agreement except as expressly stated herein or as provided below. No assignment of
this Agreement or of any rights or obligations hereunder may be made by either the Selling
Stockholder or Purchaser, directly or indirectly (by operation of law or otherwise), without the
prior written consent of the other parties hereto and any attempted assignment without the required
consents shall be void. No assignment of any obligations hereunder shall relieve the parties
hereto of any such obligations. Upon any such permitted assignment, the references in this
Agreement to Purchaser shall also apply to any such assignee unless the context otherwise requires.

     9.9 Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of the
Selling Stockholder or the Company or any of its respective Affiliates shall have any liability for
any obligations or liabilities of the Selling Stockholder or the Company under this Agreement of or
for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and
thereby.

     9.10 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **

43

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

	 	 	 	 	 
	 	THE NEW YORK TIMES COMPANY

 	 
	 	By:  	/s/ James C. Lessersohn
 	 
	 	 	Name:  	James C. Lessersohn 	 
	 	 	Title:  	Vice President
Finance & Corporate Development 	 
	 
	 	HOLLYWOOD MEDIA CORP.

 	 
	 	By:  	/s/ Mitchell Rubenstein
 	 
	 	 	Name:  	Mitchell Rubenstein 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

44EX-10.1

 

EXHIBIT 10.1

PURCHASE AGREEMENT

     This Purchase Agreement (the “Agreement”) is made and entered into as of August 25, 2006
between (i) InsCorp, Inc., a Tennessee corporation (“Purchaser”), and (ii) Civitas BankGroup, Inc.,
a Tennessee corporation (“Seller”). Insurors Bank of Tennessee, a Tennessee banking corporation
(the “Bank”), joins in this Agreement for the limited purposes set forth in paragraphs 4.5 and 4.7.

R E C I T A L S:

     WHEREAS, Purchaser and Seller each own 295,000 shares (50%) of the common stock, no par value
per share, (the “Shares”) of the Bank;

     WHEREAS, Purchaser has agreed to purchase from Seller and Seller has agreed to sell to
Purchaser all the Shares owned by Seller (the “Seller Shares”);

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations,
warranties and agreements contained herein the Parties agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

     1.1. Certain Definitions. The following terms are used in this Agreement with the meanings
set forth below:

     “Additional Consideration” means a minimum of the amount equal to the product of (i)
Ten Thousand Dollars ($10,000.00); and (ii) the number of thirty day periods (up to a
maximum of three (3) thirty day periods) after the Target Date, until the Closing occurs.

     “Agreement” means this Agreement, as amended or modified from time to time in
accordance with paragraph 7.2.

     “Business Day” means any day other than a Saturday, a Sunday, or a day on which banks in
Nashville, Tennessee, are authorized or required to close for regular banking business.

     “Closing” and “Closing Date” have the meanings set forth in paragraph 2.3(a).

     “Consideration” means the Original Consideration and the Additional Consideration, if
any.

     “Deposit Funds” means the amount of Two Hundred Twenty-Five Thousand Dollars
($225,000.00).

     “Execution Date” has the meaning set forth in paragraph 2.4(a).

 

 

     “Force Majeure” means any circumstance beyond the reasonable control of any Party which
delays or renders impossible the performance of any of its obligations under this Agreement;
events of Force Majeure shall include, without limitation, war, revolution, invasion,
insurrection, riots, mob violence, sabotage or other civil disorders, acts of terrorism,
acts of God, strikes or other labor disputes, acts, laws, regulations or rules of any
Governmental Authority. One determining factor in defining such Force Majeure shall be the
reduction in both the Dow Jones Industrial Index and the American Banker Bank Index of at
least 10% over the course of five (5) trading days which is not thereafter regained.

     “FRB” means the Board of Governors of the Federal Reserve System.

     “Government Authority” means any federal or state court, administrative agency or
commission or other governmental authority or instrumentality.

     “Joint Venture Agreement” means the Joint Venture Agreement dated as of August 26,
1999, as amended by that certain Amendment to Joint Venture Agreement dated November 30,
1999, and that certain Second Amendment to Joint Venture Agreement dated November 20, 2000.

     “Lien” means any charge, mortgage, pledge, security interest, restriction, option,
right of first refusal, limitation on voting right, claim, lien, or encumbrance.

     “Original Consideration” means the greater of (i) the amount equal to the product of
(x) 1.5 and (y) 50% of the total shareholders’ equity of the Bank on the last day of the
month prior to the month in which the Closing occurs, or (ii) $4,500,000 (such amount in
this subparagraph (ii) to be increased by an amount equal to the product of (a) $10,000 and
(b) the number of full thirty day periods (up to a maximum of three (3) thirty day periods)
after the Target Date, until the Closing occurs). To the extent that the expenses of the
Bank exceed those projected in the Bank’s approved budget, such excess shall be added back
to the Bank’s “shareholders’ equity” for purposes of calculating the Original Consideration.

     “Parties” mean Purchaser, Seller, and, where specifically applicable, the Bank.

     “Person” means any individual, corporation, company, partnership (limited or general),
joint venture, association, trust, or other entity, or similar contractual arrangement or
relationship.

     “Regulatory Delay” means a delay in the approval of the Transaction by a Government Authority
where Purchaser has filed an application or notice with a Government Authority within ten (10)
Business Days of the date hereof and responded to any questions or concerns raised by such
Government Authorities within a reasonable period of time following receipt of such questions or
concerns; provided, however, that a Regulatory Delay shall not be deemed to be occurring solely as
a result of Purchaser’s failure to obtain the financing necessary to consummate the Transaction.

     “Shares” and “Seller Shares” have the meanings set forth in the Recitals.

2

 

     “Subsequent Sale” means a merger, share exchange, acquisition, consolidation or other
similar transaction involving, or any sale, or series of sales, of all or at least 50% of
the assets or capital stock of the Bank to a party other than Purchaser or a wholly owned
subsidiary of Purchaser.

     “Subsequent Sale Consideration” means the total consideration, including any
consideration received in the form of an earnout or similar contingent or delayed
arrangement, received by the equity owners of the Bank, as applicable, in connection with a
Subsequent Sale. In the event that the Subsequent Sale Consideration paid to the then
equity owners of the Bank, as the case may be, in connection with any such Subsequent Sale,
is in the form of equity securities or some other form of ownership interests in the
acquiring entity or a related party or affiliate thereof or the surviving entity, then
Purchaser and Seller shall use their reasonable best efforts to determine the value of such
equity securities for the purpose of calculating the Subsequent Sale Consideration. If
Seller and Purchaser cannot agree to the value of the equity securities, then Seller shall
be entitled to either accept such equity securities as the Subsequent Sale Consideration or
engage, at its sole cost and expense, an independent third party valuation firm, reasonably
acceptable to Purchaser, to perform a valuation of such equity securities or other form of
ownership interest, for the purpose of determining the value of such equity securities and
receive such value in cash in lieu of such equity securities. The determination of the
value of such equity securities by the third party valuation firm shall be conclusive, final
and binding upon Seller and Purchaser.

     “Subsequent Sale Excess Amount” has the meaning set forth in paragraph 2.5(a).

     “Target Date” means December 15, 2006, or such later date as the Parties may have agreed on in
writing.

     “Termination Date” means March 15, 2007, or such later date as the Parties may have
agreed on in writing.

     “Transaction” means the purchase and sale of the Seller Shares for the Consideration
set forth in paragraph 2.2.

ARTICLE II

THE TRANSACTION

     2.1. Purchase and Sale of Seller Shares. Subject to the terms and conditions of this
Agreement, upon fulfillment or waiver of each condition to Closing (as set forth in Article V
hereof), Seller shall sell and deliver to Purchaser, and Purchaser shall purchase and accept from
Seller the Seller Shares, free and clear of all Liens. Seller shall deliver or cause to be
delivered to Purchaser on the Closing Date certificates representing the Seller Shares endorsed in
blank.

3

 

     2.2. Consideration.

             (a) Original Consideration. If the Closing occurs on or before the Target Date,
Purchaser shall pay to Seller (in cash or by wire transfer of immediately available funds) the
Original Consideration, less the Deposit Funds.

             (b) Additional Consideration. If the Closing occurs after the Target Date, other than
as a result of (i) a breach by Seller of any representation or warranty contained herein, which
breach would constitute, if occurring or continuing on the Closing Date, the failure of the
conditions set forth in paragraph 5.2, (ii) a material breach by Seller of any of the covenants or
agreements of Seller contained herein, (iii) a Force Majeure that shall have occurred prior to the
Target Date and be continuing thereafter, or (iv) a Regulatory Delay, then Purchaser shall pay to
Seller (in cash or by wire transfer of immediately available funds) the sum of the Original
Consideration and the Additional Consideration, less the Deposit Funds. If the Closing occurs
after the Target Date as a result of items (i), (ii), (iii), or (iv) of this paragraph 2.2(b), then
Purchaser shall pay to Seller (in cash or by wire transfer of immediately available funds) the
Original Consideration.

     2.3. Closing.

             (a) The closing of the Transaction (the “Closing”) will take place at the offices of the Bank,
2505 21st Avenue, South, Suite 204, Nashville, Tennessee, at such time, date and place as Purchaser
shall determine, but in no event earlier than after all conditions to Closing set forth in Article
V have been satisfied or waived by the party entitled to the benefit thereof; provided, however,
that such date shall not be later than the Termination Date (any such date, the “Closing Date”).

             (b) At the Closing, Seller shall deliver to Purchaser a certificate or certificates
representing the Seller Shares endorsed in blank and, subject to paragraph 2.5(b), Purchaser shall
deliver to Seller the Consideration described in paragraph 2.2.

     2.4. Deposit Funds.

             (a) Upon the date of full and complete execution by the Parties of this Agreement (the
“Execution Date”), Purchaser shall pay to Seller the Deposit Funds, in the form of a bank cashier’s
check or wire transfer of immediately available funds.

             (b) Purchaser and Seller acknowledge that the Deposit Funds, without regard to any interest
earned thereon, shall be applied towards payment of the Consideration if the Closing occurs, and
the Deposit Funds, and any interest earned thereon, will be held by Seller.

             (c) If the Agreement has been validly terminated by (i) Purchaser or Seller pursuant to
paragraph 6.1(a), or (ii) Purchaser pursuant to paragraph 6.1(b), Seller shall pay back to
Purchaser, immediately upon termination, an amount equal to the Deposit Funds in the form of a bank
cashier’s check or wire transfer of immediately available funds.

             (d) If the Agreement has been validly terminated by (i) Seller pursuant to paragraph 6.1(b) on
or before the Target Date, (ii) Purchaser pursuant to paragraph 6.1(c) and in

4

 

the case of a delay caused by Force Majure, such Force Majure is continuing at the time of
such termination, or (iii) by Purchaser or Seller pursuant to paragraph 6.1(e) on or before the
Target Date, Seller shall be entitled to retain one-half (1/2) of the Deposit Funds, and any
interest earned thereon, and Seller shall pay back to Purchaser, immediately upon such a
termination, an amount equal to one-half (1/2) of the Deposit Funds in the form of a bank cashier’s
check or wire transfer of immediately available funds.

             (e) If the Agreement has been validly terminated by (i) Seller pursuant to paragraph 6.1(b)
after the Target Date, or (ii) Purchaser or Seller pursuant to paragraph 6.1(d), Seller shall be
entitled to retain all of the Deposit Funds, and any interest earned thereon.

     2.5. Subsequent Sale of the Bank.

             (a) If the Bank consummates a Subsequent Sale before the first anniversary of the Closing
Date; then Purchaser shall pay to Seller (in cash or by wire transfer of immediately available
funds) the amount, if any, by which (i) one-half of the Subsequent Sale Consideration exceeds (ii)
the Consideration received by Seller pursuant to paragraph 2.2 (the “Subsequent Sale Excess
Amount”).

             (b) If the Bank consummates a Subsequent Sale on or after the first anniversary and before the
second anniversary of the Closing Date; then Purchaser shall pay to Seller (in cash or by wire
transfer of immediately available funds) an amount equal to fifty percent (50%) of the Subsequent
Sale Excess Amount, if any.

             (c) The Subsequent Sale Excess Amount owed to Seller pursuant to either paragraph 2.5(a) or
(b) shall be paid by Purchaser at or immediately before the effective time of the consummation of
the Subsequent Sale; provided, however, if any portion of the Subsequent Sale Consideration is to
be paid in the form of an earnout after the consummation of the Subsequent Sale, Purchaser shall
pay to Seller its portion of the Subsequent Sale Excess Amount that results from the earnout at or
immediately before the payment of such earnout to the equity owners of the Bank, as applicable.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     3.1. Representations and Warranties of Seller. Seller represents and warrants to Purchaser
the following, as of the date hereof:

             (a) Title of Shares and Voting Rights. Seller is the legal and beneficial owner of
the Seller Shares. Seller has good and marketable title to the Seller Shares, free and clear of
all Liens. Seller has full legal power, authority and right to vote the Seller Shares without the
consent or approval of, or any other action on the part of, any other Person. Without limiting the
generality of the foregoing, except for this Agreement or the Joint Venture Agreement, Seller has
not (a) entered into any voting agreement with any Person with respect to Seller Shares, (b)
granted any person or entity any proxy (revocable or irrevocable) or power of attorney with respect
to such shares, (c) deposited any of the Seller Shares in a voting trust or (d) entered into any
arrangement or agreement with any person or entity limiting or affecting his or her legal

5

 

power, authority or right to vote Seller Shares. The Seller Shares constitute 50% of the
outstanding Shares.

             (b) Organization and Qualification. Seller is a Tennessee corporation duly organized,
validly existing and in good standing under the laws of Tennessee.

             (c) Authorized and Effective Agreement. Seller has the full power and authority, and
is duly authorized to enter into, execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly and validly executed and delivered by Seller and is
legally binding upon and enforceable against Seller in accordance with its terms; subject to
general principles of equity, and applicable bankruptcy, insolvency, reorganization or other
similar laws of general application related to creditors’ rights and remedies.

             (d) No Conflict. Except as set forth on Schedule 3.1(d), if any, neither the
execution nor delivery of this Agreement nor the consummation of the Transaction will conflict with
or result in a breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in the creation of any Lien on the Seller Shares under any agreement, instrument,
order, judgment or decree to which Seller is a party, is bound or is subject and no further action
is required to be taken by Seller, nor is it necessary for Seller to obtain any action, approval or
consent by or from any Person or Government Authority to enable Seller to enter into or perform its
obligations under this Agreement, except for filings of applications or notices with the FRB and/or
Tennessee Department of Financial Institutions, as required.

             (e) Brokers. No broker, investment banker, financial advisor or other Person on
behalf of Seller is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the Transaction that will cause any payment obligation on the part of
Purchaser.

             (f) Litigation. No litigation, claim or other proceeding before any court or
Government Authority is pending or to Seller’s knowledge threatened against Seller, its officers or
directors, that if determined adversely to Seller, would materially impair the ability or the
obligation of Seller to perform fully on a timely basis its obligations under this Agreement.

     3.2. Representations and Warranties of Purchaser. Purchaser represents and warrants to Seller
the following as of the date hereof:

             (a) Organization and Qualification. Purchaser is a Tennessee corporation duly
organized, validly existing and in good standing under the laws of Tennessee.

             (b) Authorized and Effective Agreement. Purchaser has the corporate power and
authority and is duly authorized to enter into, execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement has been duly and validly executed and delivered by
Purchaser and is legally binding upon and enforceable against Purchaser in accordance with its
terms.

             (c) No Conflict. Neither the execution nor delivery of this Agreement nor the
consummation of the Transaction will conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under Purchaser’s articles of incorporation,

6

 

bylaws, or other organizational document, as applicable, or result in the creation of any Lien
or any agreement, instrument, order, judgment or decree to which Purchaser is a party, is bound or
is subject and no further action is required to be taken by Purchaser, nor is it necessary for
Purchaser to obtain any action, approval or consent by or from any third persons or Government
Authority, to enable Purchaser to enter into or perform its obligations under this Agreement,
except for filings of applications or notices with the FRB and/or Tennessee Department of Financial
Institutions, as required.

             (d) Brokers. No broker, investment banker, financial advisor or other Person on
behalf of Purchaser is entitled to any broker’s, finder’s, financial advisor’s or other similar fee
or commission in connection with the transactions contemplated by this Agreement that will cause
any payment obligation on the part of Seller.

             (e) Litigation. No litigation, claim or other proceedings before any court or
Government Authority is pending, or to Purchaser’s knowledge, threatened against Purchaser, its
officers or directors, that if determined adversely to Purchaser, would materially impair the
ability or the obligations of Purchaser to perform fully on a timely basis its obligations under
this Agreement.

             (f) Investment Intent. Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the risk and merits associated with its
acquisition of the Seller Shares and is acquiring the Seller Shares for its own investment, with no
present intention of making a public distribution thereof. Purchaser will not sell or otherwise
dispose of the Seller Shares in violation of the Securities Act of 1933, as amended, or any state
securities laws.

             (g) Sufficient Funds. At the time of Closing, Purchaser will have sufficient funds
available to consummate the Transaction.

ARTICLE IV

COVENANTS

     4.1. Cooperation. Each of Seller and Purchaser agrees to use its reasonable best efforts in
good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of
the Transaction as contemplated hereunder as promptly as practicable and each of Purchaser and
Seller shall use its reasonable best efforts to cooperate with the other to that end.

     4.2. Filings with Government Authorities. Within ten (10) Business Days following the date
hereof, Purchaser shall prepare all filings required to be filed with Government Authorities to
consummate the Transaction and submit the filings for approval with the FRB, if required, and any
other Government Authority, the approval of which is required. Seller shall furnish all information
concerning it as may be reasonably requested by Purchaser in connection with the preparation of
such filings with Government Authorities. Purchaser agrees to (a) make draft copies of such
filings (except for any confidential portions thereof) available to Seller at least one (1)
business day prior to the filing thereof, (b) request confidential treatment by the

7

 

appropriate Government Authority of all information submitted in the applications entitled to
confidential treatment, (c) promptly provide Seller with a copy of the filings as filed (except for
any confidential portions thereof) and all approvals, denials, requests, notices, orders, opinions,
correspondence and other documents with respect thereto, (d) use its reasonable best efforts to
obtain all approvals of Government Authorities required to consummate the Transaction prior to
December 15, 2006.

     4.3. Notification of Certain Matters. Each of Seller and Purchaser shall give prompt written
notice to the other of any fact, event or circumstance known to it that (a) is reasonably likely,
individually or taken together with all other facts, events and circumstances known to it, to
prevent such Party from consummating the Transaction or (b) would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements contained herein.

     4.4. Transfer and Voting. Seller shall continue to own and shall not assign, transfer, or
otherwise dispose of, or in any way subject to any Lien, the Seller Shares, except as contemplated
by this Agreement and shall at all times from the date hereof, through the Closing, maintain the
full right, power and authority to vote the Seller Shares free of restrictions, arrangements or
limitations thereon.

     4.5. Capital Expenditures. From the date hereof until the Closing, the Bank shall not, and
Purchaser shall use its reasonable best efforts to cause the Bank not to, make any capital
expenditures (other than capital expenditures set forth in Schedule 4.5, if any) in excess of
$50,000 without the prior written consent of Seller, which shall not be unreasonably withheld;
provided, however, that the Bank shall be permitted to make any capital expenditure that has been
unanimously approved by the Bank’s board of directors, as applicable, or that is required by the
FRB.

     4.6. Delivery of Documents. At the Closing, each of Purchaser and Seller shall deliver
certificates and other documents required to be delivered under Article V hereof.

     4.7. Operation of the Bank Prior to Closing. From the date hereof until the Closing, or the
earlier termination of this Agreement in accordance with Article VI, the Bank shall, and each of
Purchaser and Seller shall use its reasonable best efforts to cause the Bank to, operate in the
ordinary course of business consistent with past practice and the approved budget of the Bank,
including but not limited to the calculation of the Bank’s loan loss reserves and the incurrence of
general operating expenses.

ARTICLE V

CONDITIONS TO CONSUMMATION OF THE TRANSACTION

     5.1. Conditions to Obligations of Seller. The obligation of Seller to consummate the
Transaction is subject to the fulfillment of each of the following conditions or written waiver
thereof by Seller:

             (a) Representations and Warranties. The representations and warranties of Purchaser
set forth in this Agreement shall be true and correct as of the date of this Agreement

8

 

and as of the Closing Date as though made on and as of the Closing Date (except that
representations and warranties that by their terms speak as of the date of this Agreement or some
other date shall be true and correct as of such date), and Seller shall have received a
certificate, dated the Closing Date, signed on behalf of Purchaser by the Chief Executive Officer
of Purchaser to such effect.

             (b) No Injunction. No Government Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent) which is in effect and
prohibits consummation of the Transaction.

             (c) Regulatory Approvals. All approvals from Government Authorities required to
consummate the Transaction shall have been obtained by Purchaser and such approvals shall remain in
full force and effect.

             (d) Performance of Obligations of Purchaser. Purchaser shall have performed in all
material respects all obligations required to be performed by Purchaser under this Agreement at or
before the Closing, and Seller shall have received a certificate, dated the Closing Date, signed on
behalf of Purchaser by the Chief Executive Officer of Purchaser to such effect.

             (e) General Release. Purchaser shall provide a general release to the Seller,
releasing Seller, its predecessors, successors, subsidiaries, affiliates, officers, directors,
shareholders, and agents, from and for any and all claims, demands, liability, damages, costs
(including attorney’s fees), and obligations of any kind in its favor (whether known or unknown)
which arise out of Purchaser’s ownership of Shares, except for claims arising under this Agreement.

     5.2. Conditions to Obligations of Purchaser. The obligation of Purchaser to consummate the
Transaction is subject to the fulfillment of each of the following conditions or written waiver
thereof by Purchaser:

             (a) Representations and Warranties. The representations and warranties of Seller set
forth in this Agreement shall be true and correct as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except that representations and
warranties that by their terms speak as of the date of this Agreement or some other date shall be
true and correct as of such date), and Purchaser shall have received a certificate, signed on
behalf of Seller by the Chief Executive Officer of Seller to such effect.

             (b) No Injunction. No Government Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent) which is in effect and
prohibits consummation of the Transaction.

             (c) Regulatory Approvals. All approvals from Government Authorities required to
consummate the Transaction shall have been obtained by Purchaser and such approvals shall remain in
full force and effect.

9

 

             (d) Performance of Obligations of Seller. Seller shall have performed in all material
respects all obligations required to be performed by it under this Agreement at or before the
Closing, and Purchaser shall have received a certificate, dated the Closing Date, signed on behalf
of Seller by the Chief Executive Officer of Seller to such effect.

             (e) General Release. Seller shall provide a general release to the Purchaser,
releasing Purchaser, its predecessors, successors, subsidiaries, affiliates, officers, directors,
shareholders, and agents, from and for any and all claims, demands, liability, damages, costs
(including attorney’s fees), and obligations of any kind in its favor (whether known or unknown)
which arise out of Seller’s ownership of Shares, except for claims arising under this Agreement.

ARTICLE VI

TERMINATION

     6.1. Termination. This Agreement may be terminated, and the Transaction may be abandoned:

             (a) Mutual Consent or Seller Causing Regulatory Denial. At any time before the
Closing, by (i) the mutual written consent of Purchaser and Seller, or (ii) Purchaser in the event
that Purchaser has failed to obtain all approvals from Government Authorities required to
consummate the Transaction, and such failure is the direct result of Seller’s material breach of a
representation, warranty, covenant, or agreement contained herein.

             (b) Breach. At any time before the Closing, by Purchaser on the one hand or Seller on
the other hand, in the event of: (i) a material breach by Purchaser on the one hand or Seller on
the other hand, as the case may be, of any representation or warranty contained herein, which
breach cannot be or has not been cured within the earlier of 30 days after the giving of written
notice to the breaching Party or Parties of such breach and the Termination Date; or (ii) a
material breach by Purchaser on the one hand or Seller on the other hand, as the case may be, of
any of the covenants or agreements contained herein, which breach cannot be or has not been cured
within the earlier of 30 days after the giving of written notice to the breaching Party or Parties
of such breach and the Termination Date; provided, however, that Seller shall not be entitled to
terminate this Agreement under this paragraph 6.1(b) for any breach or alleged breach of any of the
representations and warranties of Purchaser if such breach does not render Purchaser incapable of
delivering the Consideration at the Closing, or does not prevent the receipt of any requisite
approvals from Government Authorities.

             (c) Target Date Delay. At any time on or before the Target Date, by Purchaser, if the
Transaction has not been consummated by such Target Date or such later date as such period may be
extended by the Purchaser in the event of a Regulatory Delay or Force Majeure, but in no event
later than March 15, 2007.

             (d) Termination Date Delay. At any time before the Closing, by Purchaser on the one
hand or Seller on the other hand, if the Transaction has not been consummated by the Termination
Date, except to the extent that the failure of the Transaction then to be consummated arises out of
or results from (i) the material breach by the Party seeking to terminate pursuant to this
paragraph 6.1(d) of any representation, warranty, covenant, or agreement of such Party

10

 

contained, (ii) a Regulatory Delay, or (iii) a Force Majeure that occurred prior to the Target
Date and is continuing at the time of such termination.

             (e) Denial of Approval by Government Authority. At any time prior to the Closing by
Purchaser or Seller if any Government Authority shall have (i) denied by final, nonappealable
action any approval required to consummate the Transaction; (ii) requested permanent withdrawal of
any application for such approval; or (iii) entered any injunction, decree or other order
preventing consummation of the Transaction.

     6.2. Effect of Termination and Abandonment. In the event of termination of this Agreement and
the abandonment of the Transaction pursuant to this Article VI, except for paragraph 2.4 in its
entirety and this Article VI, which shall survive to the fullest extent permitted by law, (a) this
Agreement shall be void and of no further effect, and (b) other than Seller’s right to retain the
Deposit Funds and any interest earned thereon as permitted by the terms of this Agreement, there
shall be no liability by reason of this Agreement, or the termination thereof on the part of
Purchaser or Seller or the respective directors, officers, employees, agents or shareholders of any
of them, unless such termination results from a Party’s willful or reckless misrepresentation or
intentional or reckless breach of any covenant or representation or warranty contained herein. In
such event, the terminating Party shall have all remedies available to it at law or in equity.

     6.3. Seller Option. In the event of a termination by (i) Seller pursuant to paragraphs 6.1(b)
or (d), or (ii) Purchaser pursuant to paragraphs 6.1(c) or (d), within thirty (30) days after such
Termination Date, Seller has the option to notify Purchaser in writing of Seller’s intent to
purchase all Shares owned by Purchaser pursuant to the same terms and conditions described in this
Agreement as Purchaser’s right to purchase the Seller Shares from Seller, except for the
parenthetical adjustment to the minimum Original Consideration of $4,500,000 set forth in the
definition of Original Consideration contained in this Agreement and the payment of the Additional
Consideration.

ARTICLE VII

MISCELLANEOUS

     7.1. Survival. The representations, warranties, agreements and covenants contained in this
Agreement shall survive the Closing.

     7.2. Waiver; Amendment. Before the Closing, any provision of this Agreement may be (a) waived
by the Party benefited by the provision or (b) amended or modified at any time by an agreement in
writing among the parties hereto executed in the same manner as this Agreement.

     7.3. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to constitute an original.

     7.4. Governing Law. This Agreement shall be governed by, and interpreted in accordance with,
the laws of the State of Tennessee applicable to contracts made and to be performed entirely within
such State.

11

 

     7.5. Expenses. Each Party hereto will bear all expenses incurred by it in connection with
this Agreement and the transactions contemplated hereby, including fees and expenses of its own
financial consultants, accountants and counsel.

     7.6. Notices. All notices, requests and other communications hereunder to a Party shall be in
writing and shall be deemed given if personally delivered, telecopied (with confirmation) or mailed
by registered or certified mail (return receipt requested) to such party at its address set forth
below or such other address as such Party may specify by notice to the Parties hereto.

	 	 	 	 	 
	(a)

	 	If to Purchaser, to:
	 	InsCorp, Inc.
	 

	 	 	 	c/oInsurors Bank of Tennessee
	 

	 	 	 	2505 21st Avenue, South
	 

	 	 	 	Suite 204
	 

	 	 	 	Nashville, Tennessee 37212
	 

	 	 	 	Attn: Michael A. Qualls
	 

	 	 	 	Telephone No. (615) 515-2266
	 

	 	 	 	Telecopy No. (615) 515-2285
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Baker, Donelson, Bearman, Caldwell & Berkowitz
	 

	 	 	 	211 Commerce Street
	 

	 	 	 	Suite 1000
	 

	 	 	 	Nashville, Tennessee 37201
	 

	 	 	 	Attn: Steven J. Eisen
	 

	 	 	 	Telephone No. (615) 726-5718
	 

	 	 	 	Telecopy No. (615) 744-5718
	 
	 	 	 	 
	(b)

	 	If to Seller, to:
	 	Civitas BankGroup, Inc.
	 

	 	 	 	810 Crescent Centre Drive
	 

	 	 	 	Suite 320
	 

	 	 	 	Franklin, Tennessee 37067
	 

	 	 	 	Attn: Richard Herrington
	 

	 	 	 	Telephone No. (615) 263-9500
	 

	 	 	 	Telecopy No. (615) 846-5005
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Bass, Berry & Sims PLC
	 

	 	 	 	AmSouth Center, Suite 2700
	 

	 	 	 	315 Deaderick Street
	 

	 	 	 	Nashville, Tennessee 37238
	 

	 	 	 	Attn: D. Scott Holley
	 

	 	 	 	Telephone No. (615) 742-7721
	 

	 	 	 	Telecopy No. (615) 742-2813
	 

	 	 	 	                     or
	 

	 	 	 	Attn: Bob F. Thompson, Esq.
	 

	 	 	 	Telephone No. (615) 742-6262
	 

	 	 	 	Telecopy No. (615) 742-2762

12

 

     7.7. Entire Understanding; Third Party Beneficiaries. This Agreement, together with the other
documents to be delivered in connection with the Transaction, represent the entire understanding of
the parties hereto and thereto with reference to the Transaction, and this Agreement supersedes any
and all other oral or written agreements heretofore made. Nothing in this Agreement, expressed or
implied, is intended to confer upon any Person, other than the Parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

     7.8. Severability. If any provision of this Agreement or its application shall be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of all other
applications of that provision and of all other provisions and applications hereof shall not in any
way be affected or impaired. If any court shall determine that any provision of this Agreement is
in any way unenforceable, such provision shall be reduced to whatever extent is necessary to make
such provision enforceable.

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

     7.10. Interpretation. When a reference is made in this Agreement to paragraphs, Exhibits, or
Schedules, such reference shall be to a paragraph of, or Exhibit or Schedule to, this Agreement
unless otherwise indicated. The headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
Whenever the words “as of the date hereof” are used in this Agreement, they shall be deemed to mean
the day and year in the preamble of this Agreement.

     7.11. Assignment. No Party may assign either this Agreement or any of its rights, interests
or obligations hereunder without the prior written approval of the other Parties. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.

     7.12. Joint Venture Agreement. The Parties acknowledge that this Agreement has been executed
and entered into outside the terms and conditions of the Joint Venture Agreement, but upon
termination of this Agreement without consummation of the Transaction, the Joint Venture Agreement
will continue to be in full force and effect unless otherwise agreed by the Parties; provided
however, that the provisions of Article 10 of the Joint Venture Agreement shall not apply to any
purchase by Seller of the Shares owned by Purchaser in accordance with the terms of paragraph 6.3
hereof. Upon the consummation of the Transaction, Seller and Purchaser

13

 

acknowledge that the Joint Venture Agreement shall be terminated and waive all requirements
thereunder.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day
and year hereinabove first written.

	 	 	 	 	 
	 	INSCORP, INC.

 	 
	 	By:  	/s/ C. Lewis Patten, Jr.
 	 
	 	 	Name:  	C. Lewis Patten, Jr. 	 
	 	 	Title:  	Chairman 	 
	 

	 	 	 	 	 
	 	CIVITAS BANKGROUP, INC.

 	 
	 	By:  	/s/ Richard E. Herrington
 	 
	 	 	Name:  	Richard E. Herrington 	 
	 	 	Title:  	President & CEO 	 
	 

	 	 	 	 	 
	 	INSURORS BANK OF TENNESSEE

 	 
	 	By:  	/s/ Michael A. Qualls
 	 
	 	 	Name:  	Michael A. Qualls 	 
	 	 	Title:  	President/CEO 	 
	 

14

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