PURCHASE AND SALE AGREEMENT

by and among

_ _ HOLDING CORP.,

_ _ _,INC.

and

the STOCKHOLDERS
named herein

Dated as of - - - ' - -

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 Table of Contents

Page

ARTICLE 1 DEFINITIONS ........................................................................................................... 1

1.1 Certain Definitions .................................................................................................. 1
1.2 Definitions Cross-References ................................... ................................. ........... . 12
1.3 General Interpretive Principles .............................................................................. 14
ARTICLE 2 TRANSACTIONS AND CLOSING ........................................................................ 14
2.1 Purchase and Sale of Company Shares .................................................................. 14
2.2 Purchase Price and Payment.. ............................................ ...... .............................. 15
2.3 Pre-Closing Calculations ....................................................................................... 15
2.4 Contingent Payment .............................................................................................. 15
2.5 The Closing ............................................................................................................ 18
2.6 Deliveries at the Closing ........................................................................................ 19
2.7 Escrow Account ....................... .............................................................................. 20
2.8 Holdback Consideration ........................................................................................ 20
2.9 Stockholder Representative ................................................................................... 21
ARTICLE 3 REPRESENTATIONS AND WARRANTIES CONCERNING THE
TRANSACTION ............................................................................................................... 22
3.1 Representations And Warranties of the Stockholders ................... ........................ 22
3.2 Representations And Warranties of the Buyer Parties ................... ....................... 24
ARTICLE 4 REPRESENTATIONS AND WARRANTIES CONCERNING THE
COMPANy ....................................................................................................................... 27
4.1 Organization .......................................................................................................... 27
4.2 Non-Contravention ................................................................................................ 27
4.3 Approvals, Consents and Filings ........................................................................... 28
4.4 Capitalization ......................................................................................................... 28
4.5 Company Financial Statements; Receivables ........................................................ 29
4.6 Absence of Changes .............................................................................................. 30
4.7 No Undisclosed Liabilities ............................................. ......... .............................. 31
4.8 Legal Compliance .................................................................................................. 31
4.9 Tax Matters ............................................................................................................ 32
4.1 0 Real Property; Title; Condition and Sufficiency of Assets ................................... 33
4.11 Intellectual Property .............................................................................................. 34
4.12 Contracts ................................................................................................................ 37
4.1 3 Certain Interests ..................................................................................................... 39
4.14 Insurance ................................................................................................................ 39
4.15 No Litigation .......................................................................................................... 40
4.16 Labor; Employees .................................................................................................. 40
4.17 Employee Benefit Plans and Agreements ............................................................ .40
4.18 Environmental, Health and Safety Matters ........................................................... .42
4.19 No Brokers or Finders ................... ... ................................. ....................................43
4.20 Anti-Money Laundering ........................................................................................ 43

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 4.21 Disclaimer of Other Representations and Warranties .......................................... .43
ARTICLE 5 COVENANTS .......................................................................................................... 44
5.1 Preservation Of Business ....................................................................................... 44
5.2 Operation of Business Prior to Closing ................................................................ .44
5.3 Filings; Reasonable Best Efforts; Notices ............................................................ .46
5.4 Buyer Access ........................................................................ ............... .................. 48
5.5 Exclusivity ............................................................................................................. 48
5.6 Tax Matters ............................................................................................................ 48
' v5.7 Noncompetition Agreement Related to the Acquisition of Goodwill ................... 50
5.8 Nondisclosure ........................................................................................................ 52
5.9 Public Announcements .......................................................................................... 53
5.10 Employee Benefit Plans ......................................................................................... 53
5.11 Employee Bonuses ................................................................................................ 54
5.12 Indemnification ...................................................................................................... 56
5.13 Working Capital .................................................................................................... 57
5.14 Financing ............................................................................................................... 57
5.15 Termination of Affiliate Arrangements ................................................................. 58
5.16 Release ................................................................................................................... 58
'. 5.17 Delivery of Records ............................................................................................... 59
ARTICLE 6 CLOSING CONDITIONS ........................................................................................ 59
6.1 Conditions Precedent to Obligations of Each Party .............................................. 59
6.2 Conditions Precedent to Obligation of the Buyer Parties ...................................... 59
6.3 Conditions Precedent to Obligation of Stockholders ............................................ 60
ARTICLE 7 TERMINATION ....................................................................................................... 61
7.1 Termination of Agreement .................................................................................... 61
7.2 Effect of Termination ............................................................................................ 62
ARTICLE 8 INDEMNIFICATION .............................................................................................. 62
8.1 Survival .................................................................................................................. 62
8.2 Indemnification Provisions for the Buyer Parties' Benefit ................................... 63
8.3 Indemnification Provisions for the Stockholders' Benefit .................................... 63
8.4 Escrow Account Offset .......................................................................................... 64
8.5 Third Party Claim Procedures ............................................................................... 65
8.6 Limitations on Indemnification Liability .............................................................. 66
8.7 Other Indemnification Provisions .......................................................................... 68
ARTICLE 9 MISCELLANEOUS ........................................................................................ ......... 68
9.1 Entire Agreement. ....................................................................... ........................... 69
9.2 Successors .............................................................................................................. 69
9.3 Assignments ........................................................................................................... 69
9.4 Notices ................................................................................................................... 69
9.5 Specific Performance ............................................................................................. 70
9.6 Submission to Jurisdiction ..................................................................................... 71
9.7 Waiver of Jury Trial .............................................................................................. 71

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 9.8 Counterparts ........................................................................................................... 71
9.9 Headings ................................................................................................................ 71
9.10 Governing Law ...................................................................................................... 71
9.11 Amendments and Waivers ..................................................................................... 71
9.12 Severability ............................................................................................................ 72
9.13 Expenses ................................................................................................................ 72
9.14 Construction ........................................................................................................... 72
9.15 Incorporation of Exhibits, Schedules and Disclosure Letters ................................ 72
9.16 Dispute Resolution ................................................................................................ 72

ATTACHMENTS

Exhibits

Exhibit A Budget
Exhibit B Form of Stockholders' Agreement
Exhibit C Opinion of Counsel to the Stockholders
Exhibit D Form of Escrow Agreement
Exhibit E Form of Employee Bonus Letter

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 !~
\fl'1 ,
/'
PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement, dated as of (this "Agreement"), is

by and among (i) Holding Corp. (together with its successors and permitted assigns,
"Parent"), (ii) , Inc., a Delaware corporation and wholly owned subsidiary of Parent
("Buyer," and together with Parent, the "Buyer Parties"), and (iii) the Persons identified as
"Stockholders" on the signature page hereto (each a "Stockholder" and, collectively, the
"Stockholders"). The Stockholders and the Buyer Parties are collectively referred to herein as
the "Parties."

RECITALS:

WHEREAS, on the date hereof, the Stockholders collectively legally and beneficially
own all of the outstanding Capital Stock (as defined below) of , Inc" a _ _ __
corporation (the "Company");

WHEREAS, Buyer desires to purchase from the Stockholders, and the Stockholders
desire to sell to Buyer, all of the Capital Stock of the Company upon the terms and subject to the
conditions set forth herein;

WHEREAS, the Parties intend for the purchase and sale of all of the Company's
outstanding Capital Stock to qualify as a "9.!:!.alified stock purchase" pursuant to Section _
,338(h)(10) of the Code (as defined below); an~

WHEREAS, substantially simultaneously with the execution and delivery of this

Agreement, each of and have entered into employment agreements with
Buyer (each, an "Employment Agreement" and collectively, the "Employment Agreements").

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants contained herein
and of the mutual benefits to be derived herefrom, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1,1 Certain Definitions. The following are the definitions of certain defined terms
used in this Agreement:

"Accounting Firm" means or, if such firm is unavailable or incapable of

serving in such capacity, then a mutually agreed upon firm of national reputation, or if the Parties
are unable to agree upon a firm within 10 Business Days, a firm determined pursuant to Section
9.16.

"Action" means any action, appeal, petition, plea, charge, complaint, claim, suit,
litigation, arbitration, mediation, hearing, inquiry, investigation or similar proceeding.

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 "Additional Restriction Triggering Event" means either of the following has occurred:
(a) has ceased to be the Chief Executive Officer of Buyer or (b) no longer
reports directly to the Chief Executive Officer of Buyer, other than as a result of his termination
(1) by Buyer for Cause or with his prior written consent, (2) by other than for Good
Reason, (3) as a result of his death or Disability or (4) in any other circumstance in which during
the Interim Performance Period, the Interim Performance Threshold has not been satisfied.

"Affiliate" with respect to any specified Person, means a Person that, directly or
indirectly, through one or more intermediaries, controls or is controlled by, or is under common
control with, such specified Person. For purposes of this Agreement, "control" (and its
derivatives) means the possession, directly or indirectly, or as trustee or executor, of the power to
direct or cause the direction of the management and policies of a Person, whether through
ownership of voting Capital Stock, as trustee or executor, by Contract or credit arrangements or
otherwise.

"Budget" means the budget for the Business for the year ending _________ III
the form attached as Exhibit A to this Agreement.

"Bundled Sale" means any sales of products and services by the Buyer Parties and their
Subsidiaries (including the Company and its Subsidiaries) that includes both products and/or
services of the Business and products and/or services other than the Business.

"Business" means the business conducted by the Company and its Subsidiaries
immediately prior to the Closing, excluding (except to the extent otherwise agreed in writing by
Buyer and the Stockholder Representative) the business and results of operations of any other
business acquired by the Buyer or any of its Affiliates (including the Company or any of its
Subsidiaries) after the Closing.

"Business Day" means any day, other than a Saturday, Sunday or one on which banks are
authorized by Law to be closed in either or _ _ _ __

"Buyer Indemnified Parties" means each of Parent, Buyer, and each of their respective
Affiliates (including the Company and its Subsidiaries after the Closing) and their respective
officers, directors, managers, members, partners, employees, agents and representatives.

"Buyer Material Adverse Effect" means, any changes, events, circumstances, effects or
conditions that are materially adverse to (a) the business, assets, liabilities, condition (financial or
otherwise) or results of operations of the Buyer Parties and their Subsidiaries, taken as a whole,
except to the extent that any such change, event, circumstance, effect or condition results from
one or more of the following (for purposes of clauses (i) through (iv) below, solely to the extent
such changes, events, circumstances, effects or conditions do not adversely affect the Buyer
Parties or their Subsidiaries in a materially disproportionate manner relative to other similarly
situated participants in the industries or markets in which they operate): (i) changes in U.S. or
global general economic conditions or securities or financial markets in general; (ii) changes
affecting the industries or markets in which they operate generally; (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 or any such hostilities, acts of war, sabotage or

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 terrorism or military actions existing or underway as of the date hereof; (iv) changes in
applicable Laws or GAAP; (v) the pendency of the Transaction; or (vi) any changes as a result of
the refinancing or amendment of any existing Indebtedness of Parent or any of its Affiliates or
the incurrence of any additional Indebtedness by Parent or any of its Affiliates or (b) the ability
of the Buyer Parties to consummate the Transaction.

"Capital Stock" means (a) with respect to a corporation, any and all shares of capital
stock and any Commitments with respect thereto, (b) with respect to a partnership, limited
liability company, trust or similar Person, any and all units, interests or other partnership/limited
liability company interests, and any Commitments with respect thereto, and (c) any other equity
ownership or participation in a Person.

"Cause" means, with respect to any Person, (a) such Person fails or refuses to comply
with reasonable, direct instructions of Buyer or its Affiliates (including the Company or any of
its Subsidiaries) that are consistent with such Person's duties as an employee of Buyer or its
Affiliates (including the Company or any of its Subsidiaries) and with Law, as set forth in a
written notice to such Person, setting forth such instructions in detail, such compliance to be
within fifteen (15) Business Days following such notice, provided, however, that this clause (a)
shall not apply to such instructions to as would require to take an Additional
Restricted Action that would reasonably be expected to materially and adversely impact the
ability of the Business to achieve the Contingent Payment Target; (b) the purposeful or grossly
negligent engaging by such Person in misconduct (and acts in the nature of bad business
judgment shall not be considered "misconduct" for this purpose) which is materially injurious to
Buyer or its Affiliates (including the Company or any of its Subsidiaries); (c) perpetration by
such Person of an intentional and knowing fraud against or affecting Buyer or its Affiliates
(including the Company or any of its Subsidiaries) or any customer, client, agent or employee of
Buyer or any of its Affiliates (including the Company or any of its Subsidiaries); (d) such
Person's breach of Section 5.7 of this Agreement; (e) a material breach by such Person of any of
Buyer's or its Affiliates' (including the Company's or any of its Subsidiaries') material policies
or under such Person's Employment Agreement or confidentiality and assignment of inventions
agreement with Buyer or its Affiliates (including the Company or any of its Subsidiaries), which
breach is not cured within fifteen (15) Business Days following notice thereof; or (f) such
Person's conviction of, or pleading guilty or no contest to, a felony or a crime involving fraud,
dishonesty or moral turpitude.

"Closing Cash Consideration" means the Cash Consideration less the Holdback
Consideration.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commitment" means, with respect to any Person, (a) options, warrants, convertible
securities, exchangeable securities, sUbscription rights, conversion rights, exchange rights, or
other Contracts that could require such Person to issue any shares of its Capital Stock or to sell
any shares of Capital Stock it owns in another Person; (b) any other securities convertible into,
exchangeable or exercisable for, or representing the right to subscribe for any shares of Capital
Stock of such Person or owned by such Person; (c) statutory pre-emptive rights or pre-emptive
rights granted under such Person's Organizational Documents or any Contract; and (d) stock

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appreciation rights, phantom stock, profit participation, or other similar rights with respect to
such Person, in each case, other than such rights that arise under applicable Laws with respect to
community property between spouses.

"Company Common Stock" means the shares of the Company's common stock, no par
value per share.

"Company Compensation Payments" means all bonus, retention, incentive, severance (to
the extent such severance becomes payable as a result of the execution and delivery of this
Agreement or the consummation of the Transaction without regard to further actions by the
Buyer Parties or their controlled Affiliates after the Closing) and similar payments and costs paid
or incurred by the Company or any of its Subsidiaries in connection with the Transaction
pursuant to any Contract entered into by, or otherwise binding upon, the Company or any of its
Subsidiaries prior to the Closing Date.

"Company Employee" means any current or former employee, director or consultant of

the Company or any of its Subsidiaries.

"Company Intellectual Property" shall mean any Intellectual Property that is owned, used
by, or licensed to, the Company or any of its Subsidiaries.

"Company Material Adverse Effect" means, any changes, events, circumstances, effects
or conditions that are materially adverse to (a) the business, assets, liabilities, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole,
except to the extent that any such change, event, circumstance, effect or condition results from
one or more of the following (for purposes of clauses (i) through (iv) below, solely to the extent
such changes, events, circumstances, effects or conditions do not adversely affect the Company
or its Subsidiaries in a materially disproportionate manner relative to other similarly situated
participants in the industries or markets in which they operate): (i) changes in U.S. or global
general economic conditions or securities or financial markets in general; (ii) changes affecting
the industries or markets in which they operate generally; (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 or any such hostilities, acts of war, sabotage or terrorism or
military actions existing or underway as of the date hereof; (iv) changes in applicable Laws or
GAAP; or (v) the pendency of the Transaction or (b) the ability of the Stockholders to
consummate the Transaction.

"Company Registered Intellectual Property" means all of the following types of United
States, international and foreign Intellectual Property owned by any of the Company or any of its
Subsidiaries or the Stockholders: (i) patents and patent applications, (ii) registered trademarks
and service marks, applications to register trademarks or service marks, intent-to-use
applications, or other registrations or applications related to trademarks, and any goodwill
associated with any of the foregoing, (iii) registered Internet domain names and applications to
register Internet domain names and any goodwill associated with any of the foregoing, and (iv)
registered copyrights and applications for copyright registration.

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 "Company Transaction Expenses" means all (a) third-party fees, costs or expenses paid
or payable by the Company or any of its Subsidiaries in connection with the Transaction,
including with respect to financial, accounting, tax and legal advisors to the Company, its
Subsidiaries and the Stockholders and (b) any "run-off' directors' and officers' liability
insurance policy of the Company or any of its Subsidiaries covering acts or omissions occurring
at or prior to the Closing with respect to those persons who were previously or are currently (and
any additional persons who prior to the Closing become) members of the Company's board of
directors, officers, employees, agents or consultants.

"Confidentiality Agreement" means the mutual non-disclosure agreement between Buyer

and the Company dated , as amended from time to time (including the
amendment dated , ~.

"Consent" means any consent, approval, authorization, notification, registration, waiver

or other similar action.

"Contingent Payment Target" means each of the following have occurred: (A) Revenue
for the fiscal year ended equals or exceeds $ , (B) EBITDA for the
fiscal year ended equals or exceeds $ , (C) Revenue for the fiscal
year ended equals or exceeds $ , and (D) EBITDA for the fiscal year
ended equals or exceeds $_ __

"Contract" means any contract, agreement, arrangement, commitment, letter of intent,

memorandum of understanding, indenture, instrument, document, or other similar understanding,
whether written or oral.

"Current Assets" means, as of any date of determination, the amount of consolidated cash
and cash equivalents, accounts receivables, prepaid expenses, inventory and all other current
assets of the Company, in each case as determined in accordance with GAAP as consistently
applied.

"Current Liabilities" means, as of any date of determination, the amount of consolidated

accounts payable, accrued expenses, accrued but unpaid taxes and all other current liabilities of
the Company (other than deferred revenue, which will not be considered a "Current Liability"),
in each case as determined in accordance with GAAP as consistently applied.

"Damages" means all damages, losses, payments, amounts paid in settlement, obligations,
fines, penalties, expenses and other costs (including fees and expenses of attorneys, accountants
and other professional advisors), but excluding any corporate overhead expenses of any Person
seeking indemnification.

"Disability" means, with respect to any Person, such Person's inability, due to physical or
mental incapacity, to substantially perform his or her duties as an employee of Buyer or its
Subsidiaries for an aggregate period (whether or not consecutive) of sixty (60) days during any
consecutive six-month period.

"Disclosure Letters" means the Buyer Disclosure Letter and the Company Disclosure
Letter.

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 "EBITDA" means, for any period, the sum of Net Income plus, (x) without duplication,
and solely to the extent deducted in determining such Net Income, the sum of the following:

(i) consolidated interest Expense for such period,

(ii) income taxes for such period as set forth in the provision for income taxes
line in the Business's statement of operations,

(iii) all amounts attributable to depreciation and amortization for such period,

(iv) all fees and expenses borne by the Business in such period in connection
with the Transaction that are Expenses, but only to the extent that such fees and expenses
are included as Company Compensation Payments or Company Transaction Expenses,

(iv) any payments of Bonuses (as defined in the Employment Agreements) to

_ _ _ _ _ and under their respective Employment Agreements,

(v) all _ _ Bonus Payments (as defined in Section 5.11), and

(vi) any expenses with respect to annual, cash bonuses of the Company
Employees (except to the extent such bonuses are sales commissions or similar
performance-based incentives), solely with respect to the Business during the fiscal year
ended , _ _ provided that all such bonuses are paid prior to Closing,

minus, (y) without duplication, and solely to the extent included in determining such net income,
the sum of the following:

(i) consolidated interest income for such period,

(ii) consolidated investment income or gains,

(iii) the aggregate amount of all costs associated with the development of
software and technology that are capitalized rather than expensed in the period incurred
(without duplication of any amounts expensed in the period incurred), and

(iv) the benefit of any income taxes for such period as set forth in the income
taxes line in the Business's statement of operations,

that in the case of both clauses (x) and (y) are determined on a basis consistent with GAAP as
consistently applied in accordance with the historical accounting policies of the Company, as
modified pursuant to this Agreement. Notwithstanding anything in this Agreement to the
contrary, except to the extent otherwise agreed in writing by Buyer and the Stockholder
Representative, EBITDA shall be calculated disregarding that portion of finance, treasury,
information technology, human resources, legal and similar corporate overhead expenses that the
Buyer Parties allocate to the Business in accordance with the Buyer Parties' customary practices
with respect to such expenses.

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 "Encumbrance" means any security interest, deed of trust, mortgage, pledge, lien, charge,
claim, or other similar interest or right, equitable interest, encumbrance or restriction of any kind,
including any restriction on use, voting, transfer, receipt of income, or exercise of any other
attribute of ownership (but excluding licenses of and other agreements related to Intellectual
Property which are not intended to secure an obligation).

"Enforceable" means, with respect to a Contract, that such Contract is the legal, valid,
and binding obligation of the applicable Person, enforceable against such Person in accordance
with its terms, except as such enforceability may be subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, or other similar Laws relating to or affecting the rights
of creditors, and general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or at law.

"Environmental, Health and Safety Requirements" means all Orders and Laws
concerning or relating to public health and safety, worker/occupational health and safety, or
pollution or protection of the environment, including those relating to the presence, use,
manufacturing, refining, production, generation, handling, transportation, treatment, recycling,
transfer, storage, disposal, distribution, importing, labeling, testing, processing, discharge,
release, Threatened release, control, or other action or failure to act involving cleanup of any
hazardous materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise, or radiation, each as amended and as now in effect.

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

"ERISA Affiliate" means any trade or business (whether or not incorporated) that is or
was a member of a group of which the Company or any of its Subsidiaries is or was a member
and which is or was under common control or treated as a single employer with the Company or
any of its Subsidiaries within the meaning of Section 414 (b), (c), (m) or (0) of the Code.

"Expenses" means, for any period, the expenses of the Business for such period
determined in accordance with GAAP as consistently applied on a consolidated basis in
accordance with the historical accounting policies and practices of the Company, as modified
pursuant to this Agreement. For the avoidance of doubt, it is agreed that all costs associated with
the development of software and technology shall be expensed as incurred and shall not be
capitalized.

"Expiration Date" means ____,

"GAAP" means generally accepted accounting principles in the United States.

"Good Reason" means, with respect to any Person, the occurrence of any of the following
without such Person's consent: (a) the failure of the board of directors of the employer of such
Person to continue such Person as an executive of such employer either in the position that such
Person held immediately prior to his termination, or in a substantially equivalent position; (b) the
failure by the employer of such Person to comply with the provisions of such Person's
Employment Agreement regarding the payment of salary, bonus, stock options, expense
reimbursements, and benefits, as set forth in a written notice by such Person to such Person's

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 employer, such compliance to be within fifteen (15) Business Days following such notice; (c) the
permanent assignment to such Person of duties materially inconsistent with an executive in the
position, or substantially equivalent position, that such Person held immediately prior to his
termination, or the permanent removal of the authority which is reasonable and necessary for
such Person to carry out such duties; or (d) the relocation of such Person's principal location of
work to any location that is more than forty (40) miles from the location thereof immediately
prior to the date of such Person's notice of termination.

"Governmental Body" means any legislature, agency, bureau, branch, department,

division, commission, court, tribunal, magistrate, justice, multi-national organization, quasi-
governmental body, or other similar recognized organization or body of any federal, state, county,
municipal, local, or foreign government.

"Holdback Consideration" means $- - - - (thirteen million five hundred thousand

dollars) of the Cash Consideration. (~~, .,v-<J

"Immediate Relative" includes a Person's spouse, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, grandchildren,
grandparents and anyone (other than domestic employees) who shares such Person's home.

"Indebtedness" of any Person means, without duplication, any amounts owed, whether as
obligor or guarantor, for (a) borrowed money or advances, (b) capitalized lease obligations and
(c) obligations under interest rate agreements and currency agreements; provided, however, that
notwithstanding the foregoing, Indebtedness shall not be deemed to include any intercompany
indebtedness between and among such Person and any of its wholly owned Subsidiaries.

"Indemnified Parties" means, individually and as a group, the Buyer Indemnified Parties
and the Stockholder Indemnified Parties.

"Intellectual Property" shall mean any or all rights in, arising out of, or associated with
any or all of the following: (i) all United States, international and foreign patents and
applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations
and continuations-in-part thereof; (ii) all inventions (whether patentable or not), invention
disclosures, discoveries, improvements, trade secrets, proprietary information, confidential
information, know how, technology, processes, designs, and all documentation relating to any of
the foregoing; (iii) works of authorship in any media, and all copyrights, copyrights registrations
and applications therefor, and all other rights, including authors' or moral rights, corresponding
thereto throughout the world; (iv) all computer software, including all source code, object code,
firmware, development tools, files, records and data, and all media on which any of the
foregoing is recorded; (v) all trade names, logos, common law trademarks and service marks,
Internet domain names, corporate names, brand names, logos and other source indicators,
trademark and service mark registrations and applications therefor throughout the world, and any
goodwill associated with any of the foregoing; (vi) with respect to all of the foregoing, the right
to bring an Action in Law for infringement or other impairment of rights, including the right to
receive damages, proceeds or any other legal or equitable protections; and (vii) any similar or
equivalent rights to any of the foregoing anywhere in the world.

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 "Interim Performance Threshold" means, with respect to the Interim Performance Period,
(A) Revenue equals or exceeds the product of (x) $ , multiplied by (y) the quotient of
the total number of days during such Interim Performance Period divided by 365, and (B)
EBITDA equals or exceeds the product of (x) $ , multiplied by (y) the quotient of the
total number of days during such Interim Performance Period divided by 365.

"Knowledge" or "knowledge" means the actual knowledge of (i) with respect to any of
the representations and warranties set forth in Article 4, the Persons identified in Section 1.1 of
the Company Disclosure Letter, and (ii) with respect to any other representation or warranty, the
relevant Person making such representation or warranty under this Agreement.

"Law" means any law (statutory, common, or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, restriction, requirement, writ, judicial order, judgment,
injunction, decree, administrative order, executive order, or other similar authority enacted,
adopted, promulgated, or applied by any Governmental Body, each as amended.

"Liability" or "Liable" means any liability or obligation, whether known or unknown,

asserted or unasserted, absolute or contingent, matured or unmatured, conditional or
unconditional, latent or patent, accrued or unaccrued, liquidated or unliquidated, or due or to
become due.

"Net Income" means, for any period, Revenue less Expenses determined on a
consolidated basis in accordance with GAAP as consistently applied in accordance with the
historical accounting policies of the Company, as modified pursuant to this Agreement.

"Order" means any order, ruling, decision, verdict, decree, writ, subpoena, mandate,
precept, command, directive, consent, approval, award, judgment, injunction, settlement,
stipulation or other similar determination or finding by, before, or under the supervision of any
Governmental Body, arbitrator or mediator.

"Ordinary Course of Business" means the ordinary course of business consistent with
past practice of the Company and its Subsidiaries ..

"Organizational Documents" means the articles of incorporation, certificate of

incorporation, charter, bylaws, articles of formation, articles of association, regulations,
operating agreement, certificate of limited partnership, partnership agreement, limited liability
company agreement and all other similar documents, instruments or certificates executed,
adopted, or filed in connection with the creation, formation, or organization of a Person,
including any amendments thereto.

"Outstanding Claim" means the amount, as reasonably estimated by any Buyer

Indemnified Party of any indemnification claim in dollars made in good faith by such Buyer
Indemnified Party pursuant to Article 8 that shall be outstanding and unresolved, or resolved in
whole or in part in favor of such Buyer Indemnified Party but not yet paid.

"Parent Common Stock" means the common stock, par value $0.01, of Parent.

9
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 "Payment Triggering Event" means both of the following have occurred: (A) the
termination of the employment of (x) by Buyer, other than (i) for Cause or (ii) with
his prior written consent, (y) by for Good Reason or (z) as a result of his death or
Disability, and (B) between (x) , __ (inclusive) and (y) the later of the date of such
termination and , __ (inclusive) (such period, the "Interim Performance Period"), the
Interim Performance Threshold is satisfied.

"Permit" means any permit, license, certificate, approval, consent, notice, waiver,
franchise, registration, filing, accreditation, or other similar authorization required by any Law or
Governmental Body (but excluding patents, patent applications and other registrations of and
applications for registration of Intellectual Property).

"Permitted Encumbrance" means any of the following: (i) liens for Taxes, assessments,
governmental charges, or claims that are being contested in good faith and an appropriate reserve
has been established therefor, (ii) statutory liens oflandlords and warehousemen's, carriers',
mechanics', suppliers', materialmen's, repairmen's, or other like liens (including contractual
landlords ' liens) arising in the Ordinary Course of Business; and (iii) liens incurred or deposits
made in the Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other similar types of social security.

"Person" means any individual, partnership, limited liability company, corporation,

association, joint stock company, trust, entity, joint venture, labor organization, unincorporated
organization or Governmental Body, or any unit or division of any of the foregoing.

"Pre-Closing Tax Period" means with respect to income Taxes all taxable periods ending
on or before the Closing Date and the portion of any Straddle Period ending on but excluding the
Closing Date and with respect to all other Taxes all taxable periods ending on or before the
Closing Date and the portion of any Straddle Period to the Closing Date.

"Pro Rata Share" means, with respect to any Stockholder, the quotient obtained by
dividing (i) the total number of shares of Company Common Stock owned of record by such
Stockholder immediately prior to the Closing by (ii) the total number of shares of outstanding
Company Common Stock immediately prior to the Closing.

"Receivables" means all receivables of the Company and its Subsidiaries, including all
Contracts in transit, manufacturers warranty receivables, notes receivable, accounts receivable,
trade account receivables, and insurance proceeds receivable.

"Records" means all of a Person's books, records, files, documents and agreements,
whether in tangible, electronic or digital media.

"Related Person" means any Affiliate, officer, director, shareholder or member of the
Company or any of its Subsidiaries and any relative Immediate Relative or spouse (or relative
Immediate Relative of such spouse) of any such Affiliate, officer, director, shareholder or
member thereof.

"Restrictive Term" means the period beginning as of the Closing and ending on the third
anniversary of the Closing Date.

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 "Revenue" means, for any period, the revenue of the Business for such period determined
on a consolidated basis in accordance with GAAP as consistently applied in accordance with the
historical accounting policies of the Company, as modified pursuant to this Agreement. Revenue
included in Net Income shall be determined for software sales, installation and training when
billed, but only if billed in accordance with binding, contractual terms providing for such billing
and only with respect to amounts billed in the proper period.

In determining Revenue, in connection with any Bundled Sale, the revenue with respect
to the products and/or services of the Business included in such Bundled Sale will be determined
as if such products and/or services of the Business had not been sold together with any products
and/or services other than the Business. For example, if the pricing of a Bundled Sale includes a
discount to the customer, such discount will not apply to the products and/or services of the
Business sold in such Bundled Sale unless such discount otherwise would have applied if such
sale had not been a Bundled Sale.

"Section 1374 Tax Amount" shall mean any Tax Liability of the Company and any of its
Subsidiaries with respect to net recognized built-in gain pursuant to Section 1374(a) of the Code
(or any similar provision of state, local or foreign law) arising from the transactions
contemplated by this Agreement, including the Section 338(h)(l0) Election.

"Securities Act" means the Securities Act of 1933, as amended.

"Sharing Percentage" means the percentages set forth in Schedule 2.8 hereto.

"Stockholders' Agreement" means the Amended and Restated Stockholders' Agreement

among Parent, the Stockholders and the other stockholders of Parent in the form set forth as
Exhibit B hereto.

"Stockholder Indemnified Parties" means the Stockholders and their respective Affiliates
(excluding the Company and its Subsidiaries) and each of their respective officers, directors,
managers, members, partners, employees, agents and representatives.

"Subsidiary" means, with respect to any Person: (a) any corporation of which more than
50% of the total voting power of all classes of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors is owned by such Person
directly or through one or more other Subsidiaries of such Person and (b) any Person other than a
corporation of which at least a majority of any class of Capital Stock (however designated)
entitled (without regard to the occurrence of any contingency) to vote in the election of the
governing body, partners, managers or others that will control the management of such entity is
owned by such Person directly or through one or more other Subsidiaries of such Person.

"Tax" means any federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Section 59A), customs, ad valorem, duties, capital stock, franchise,
profits, withholding, social security, unemployment, Disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed

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099999-0968-02806-PaloAlto.2110456.1
 or not, and will include any liability in respect of Taxes as a transferee and any liability in
respect of Taxes which is payable by operation of Law.

"Tax Return" means any report, return, statement, estimate, declaration, information
return or other information required to be supplied to a Governmental Body in connection with
Taxes (including any attachment thereto or amendment thereof), including any claim for refund,
declaration of any estimated Tax and combined or consolidated return for the Company or any of
its Subsidiaries.

"Termination Date" means the earlier to occur of (a) the Expiration Date and (b) the date
on which this Agreement is terminated pursuant to Section 7.1 (other than Section 7 .1 (b)).

"Threatened" means a demand or statement has been made (in writing or as an overt
verbal threat) or a notice has been given (in writing or an overt verbal notice), or any other event
has occurred that would lead a prudent person to conclude that a cause of Action or other matter
is reasonably likely to be asserted, commenced, taken, or otherwise initiated.

"Transaction" means the purchase and sale of all of the Company's Capital Stock
pursuant to the terms and subject to the conditions set forth in this Agreement.

"Treas. Reg." means the proposed, temporary and final regulations promulgated under
the Code.

"Working Capital" means, on a consolidated basis for the Company, an amount equal to
the difference at such time of: (A) the sum of Current Assets; minus (B) the sum of Current
Liabilities, in each case determined in accordance with GAAP as consistently applied. However,
Working Capital shall be determined net of any Current Assets or Current Liabilities resulting
from inter-company transactions between the Company and any Subsidiary of the Company (e.g.,
the assets shown on the Company's balance sheet related to its investment in ImageRight UK
Limited are not included as Current Assets).

1.2 Definitions Cross-References. The following defined terms used in this

Agreement not defined in Section 1.1 are defined in the corresponding Sections of this
Agreement:

Terms Section

280G Approval ...................................................................................................................... 5 .11 (b)

Additional Restricted Actions ............................................................................................. .2.4( e)(i)
Agreement .......................................................................................................................... Preamble
Alternative Remedy ................................................................................................................. 8.6(a)
Available Holdback Consideration .......................................................................................... 8.6(a)
Balance Sheet .......................................................................................................................... 4.6(c)
Bank .......................................................................................................................................... 3.2(i)
Buyer Disclosure Letter ................................................................................................................ 3.2
Buyer Officers Certificate ....................................................................................................... 6.3(c)
Calculation ........................................................................................................................... 2.4(b)(i)
Calculation Review Period ................................................................................................. 2.4(b)(ii)

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099999-0968-02806-PaloAlto.2110456.1
 Section

Carve-Out Representations ........................................................................................................... 8.1

Cash Consideration ................................................................................................... .................... 2.2
Closing .......................................................................................................................................... 2.5
Closing Date ................................................................................................................................. 2.5
Commitment Letter ................................................................................................................... 3 .2(i)
Company 401 (k) Plans .......................................................................................................... 5.1 O(b)
Company Disclosure Letter ............................................................................................................. 4
Company Financial Statements ............................................................................................... 4.5(a)
Company Officers Certificate .................................................................................................. 6.2(c)
Competitive Activity ............................................................................................................... 5.7(a)
Consideration ................................................................................................................................ 2.2
Contingent Payment ................................................................................................................ 2.4(b)
Contingent Payment Date ........................................................................................................ 2.4(b)
Continuing Employees .......................................................................................................... 5.10(a)
Covered Payments ................................................................................................................. 5.11(b)
Current Employees ................................................................................................................ 5.10(a)
D&O Indemnified Parties ...................................................................................................... 5.12(a)
Disagreement Notice .......................................................................................................... 2.4(b )(ii)
Disagreement Reconciliation Period ................................................................................. 2.4(b)(iii)
Dispute ........................................................................................................................................ 9.16
Employee Bonus Letter ......................................................................................................... 5.11(a)
Escrow Account ............................................................................................................................ 2.7
Escrow Agent ............................................................................................................................... 2.7
Financing .................................................................................................................................. 3.2(i)
Holdback Claim ....................................................................................................................... 8.6(a)
In-Bound Licenses ................................................................................................................. 4.11(e)
Indemnification Notice ................................................................................................................. 8.4
Indemnifying Party ....................................................................................................................... 8.5
Initial Holdback Release Date ................................................................................................. 2.8(a)
Interim Calculation .............................................................................................................. 2.4(e)(v)
IP Contracts ........................................................................................................................... 4.11 (g)
JAMS .......................................................................................................................................... 9.16
Leases .................................................................................................................................... 4.10(a)
Material Contract ................................................................................................................... 4.12(a)
Noncompetition Covenants ..................................................................................................... 5.7(a)
Non-Holdback Claim ............................................................................................................... 8.6(a)
OFAC .......................................................................................................................................... 4.20
Out-Bound Licenses ............................................................................................................... 4.11 (f)
Parent Financial Statements ..................................................................................................... 3.2(h)
Parent Option Plan .................................................................................................................... 3.2(f)
Parent Options .......................................................................................................................... 3.2(f)
Plans ....................................................................................................................................... 4.16(a)
Pre-Closing Certificate ................................................................................................................. 2.3
Purchase Price Allocation ........................................................................................................ 5.6(e)

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 Terms Section

Releasees ............................................................................................................................... 5.16(a)

Releasor ................................................................................................................................. 5.16(a)
Remaining Holdback Consideration ................................................................................... 2.8(a)(ii)
Remaining Holdback Consideration Notice ....................................................................... 2.8(a)(ii)
Resolved Claim Notice ................................................................................................................. 8.4
Restriction .............................................................................................................................. 4.11(b)
Retained Holdback Consideration ....................................................................................... .2.8(a)(i)
Retained Holdback Excess ...................................................................................................... 2.8(b)
Section 338(h)(10) Election ..................................................................................................... 5.6(e)
Stock Consideration ...................................................................................................................... 2.2
Stockholder Favorable Outcome ............................................................................................. 2.8(b)
Stockholder Representative ..................................................................................................... 2.9(a)
Stockholders Certificate .......................................................................................................... 6.2(c)
Straddle Period ........................................................................................................................ 5.6(g)
Tax Claim ................................................................................................................................ 5.6(b)
Third-Party Claim ......................................................................................................................... 8.5
Threshold ................................................................................................................................. 8.6(b)
Unilateral Resolved Claim Notice ................................................................................................ 8.4

1.3 General Interpretive Principles. The name assigned to this Agreement and the
article, section and subsection captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof. The terms defined in
the singular shall have a comparable meaning when used in the plural, and vice versa. Unless
otherwise specified, the terms "hereof," "herein" "hereby," "hereunder," and words of similar
import refer to this Agreement as a whole (including the Disclosure Letters and Exhibits hereto)
and not to any particular subdivision unless expressly so limited, and references herein to
Articles or Sections refer to Articles or Sections of this Agreement. For purposes of this
Agreement, the words, "include," "includes" and "including," when used herein, shall be deemed
in each case to be followed by the words "without limitation." Unless stated otherwise, the terms
"dollars" and "$" shall mean United States dollars. Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise requires.

ARTICLE 2

/~ TRANSACTIONS AND CLOSING

Ui'IqJ'''
SO ~ 2.1 Purchase and Sale of Company Shares. Subject to the terms and conditions set
cfP rJ'1\) forth in this Agreement R d in reliance on the representations and warranties contained herei,!1 at
\"'1'0 the Closing, each Stockholder severally agrees to sell to Buyer, an · -uyer agrees to purchase
from each such Stockholder, the umber of shares of Com an~k owned by such
Stockholder as set forth opposite such Stoc older's name on Schedule 2.1 hereto under the
heading "Company Common Stock to be Sold," for the purchase price set forth in Section 2.2
below.

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099999-0968-02806-PaloAlto.2110456.1
 ~\
2.2 Purchase Price and Payment. The aggregate purchase price for all shares of the
Company Common Stock shall be (i) an amount of cash equal to (A) $ , minus (B) all
C2mpany Transaction Expens~, minus (C) all ~mpany Compensation Payments, minus (D)
the ~ 1374 Tax Amount,(such subtotal, the "Cash Consideration"), and (ii) one million
shares of Parent Common Stock (the "Stock Consideration," and together with the Cash
Consideration, the "Consideration"). The Closing Cash Consideration shall be delivered by
Buyer to the Stockholders, the Stock Consideration shall be delivered by Parent to the
Stockholders and the Holdback Consideration shall be delivered by Buyer to the Escrow Agent,
in each case at the Closing as provided in Section 2.5 through Section 2.7.

2.3 Pre-Closing Calculations. Not less than five (5) Business Days prior to the
Closing, the Stockholders shall cause the Company to prepare and deliver to the Buyer a
schedule, in reasonable detail and certified by the chief executive officer and the president of the
Comp~. setting forth each of the Company Transaction Expenses, the Company Compensation
Payments and the Section 1374 Tax Amount and the calculation thereof (the "Pre-Closing
Certificate").

2.4 Contingent Payment. Buyer shall make an additional payment to the

Stockholders upon the terms and subject to the conditions set forth in this Section 2.4.

(a) Payment. Subject to Section 2.4(c), within five (5) Business Days after
the Calculation becomes final and binding in accordance with Section 2.4(b)(ii) (the
"Contingent Payment Date"), if the final and binding Calculation indicates that the
Contingent Payment Target has been satisfied, then Buyer shall deliver, or cause to be
delivered, to the Stockholder Representative, by wire transfer in immediately available
funds to an account designated to Buyer in writing by the Stockholder Representative, the
amount equal to the product of (x) five (5) multiplied by (y) the difference between (A)
EBITDA for the fiscal year ended , _ _ and (B) $ (such product,
the "Contingent Payment"); provided, however, that in no event shall the Contingent
Payment be greater than $ or less than $0. The Contingent Payment shall be
allocated by the Stockholder Representative among the Stockholders pursuant to their
respective Pro Rata Shares.

(b) Calculation.

(i) In each case, promptly after the independent accountants of the

Buyer Parties have completed their audit of the financial statements of Buyer for
the fiscal years ended , _ _ and _ _ (and, in any event, with
respect to the fiscal year ended _ _, no later than _ _ _ __
-,>, Buyer shall deliver to the Stockholder Representative a calculation of
Revenue and EBITDA for such fiscal years ended and
(the "Calculation," which shall be complete (subject to final determination
pursuant to this Section 2.4(b)) upon delivery of the Calculation with respect to
the fiscal year ended , -'>; provided, however, that Buyer shall not
be in breach of its obligation to timely deliver the Calculation in the event any
delay with respect to the delivery thereof is due to the failure of management of
the Business to provide necessary information related to the preparation of the

15
099999·0968-02806-PaloAlto.2110456.1
 Calculation. The Calculation shall be certified by the chief financial officer of
Buyer, and shall include reasonably sufficient detail to enable the Stockholder
Representative to review the factors included in the Calculation.

(ii) During the 20-Business Day period following the Stockholder

Representative's receipt of the Calculation (the "Calculation Review Period"), the
Stockholder Representative and his representatives shall, upon one (1) Business
Day's prior notice, at the Stockholder Representative's sole cost and expense, be
permitted full access during normal working hours to review the books and
records of the Business related to the Calculation (including the working papers of
Buyer and its Subsidiaries relating thereto) and shall be permitted to discuss the
Calculation with the senior officers and financial management of Buyer; provided,
however, that such access and discussions shall be conducted in a manner that
will not unreasonably disrupt the operation of the Buyer and its Subsidiaries
(including the Company and its Subsidiaries).

(iii) The Calculation shall become final and binding upon the Parties at
the end of the Calculation Review Period, unless the Stockholder Representative
delivers to Buyer a written notice of disagreement with the Calculation (a
"Disagreement Notice") prior to the end of the Calculation Review Period. Any
Disagreement Notice shall specify in reasonable detail the nature of any
disagreement so asserted. If a Disagreement Notice is received by Buyer in a
timely manner, then the Calculation (as revised pursuant to clause (x) or (y)
below) shall become final and binding upon the Parties on the earlier of (x) the
date the Stockholder Representative and Buyer resolve in writing any differences
they have with respect to the matters specified in the Disagreement Notice or
(y) the date any disputed matters are finally resolved in writing by the Accounting
Firm.

(iv) During the Calculation Review Period and for an additional ten
(10) Business Days immediately thereafter (collectively, the "Disagreement
Reconciliation Period"), the Stockholder Representative and Buyer shall seek in
good faith to resolve in writing any differences that they may have with respect to
the matters specified in the Disagreement Notice. If, at the end of the
Disagreement Reconciliation Period, the Stockholder Representative and Buyer
have not so resolved such differences, either the Stockholder Representative or
the Buyer may submit in writing (a copy of which shall be delivered to the non-
delivering party) to the Accounting Firm for arbitration all matters that were
included in the Disagreement Notice and that remain in dispute. The Accounting
Firm shall be instructed to render a decision resolving the matters in dispute
within twenty (20) Business Days following the submission thereto. Such
decision shall be final and binding on the Parties as an arbitral award. The fees
and disbursements of Buyer's counsel and accountants and incurred in connection
with the preparation of the Calculation and in any arbitration shall be borne by
Buyer, and the fees and disbursements of the Stockholder Representative's
counsel and accountants incurred in connection with their review of the
Calculation and in any arbitration shall be borne by the Stockholder

16
099999-0968·02806-PaloAlto.2110456.1
 Representative. The fees and disbursements of the Accounting Firm in
connection with any arbitration pursuant to this Section 2.4(b)(iii) shall be split
evenly between Buyer and the Stockholder Representative.

(v) Solely for purposes of Section 2.4(b)(ii), the term "Calculation"

shall, when used in connection with any Interim Calculation, mean such Interim
Calculation.

(c) Payment Triggering Event. Notwithstanding the provisions of Section

2.4(a), if a Payment Triggering Event shall have occurred prior to , _ _,
then (i) Buyer shall provide notice of a Payment Triggering Event reasonably promptly
following the occurrence thereof and (ii) the Contingent Payment shall then equal
$ and, promptly after the independent accountants of the Buyer Parties have
completed their audit of the financial statements of Buyer for the fiscal year ended
_____, _ _ (and, in any event, no later than , ~, Buyer shall
deliver, or cause to be delivered, to the Stockholder Representative, by wire transfer in
immediately available funds to an account designated to Buyer in writing by the
Stockholder Representative, such Contingent Payment. The Contingent Payment shall be
allocated by the Stockholder Representative among the Stockholders pursuant to their
respective Pro Rata Shares. Notwithstanding anything to the contrary set forth in this
Agreement, after the occurrence of a Payment Triggering Event, Buyer shall have no
other obligations under this Section 2.4 other than as set forth in this Section 2.4(c).

(d) General Covenants. Subject to Section 2.4(c) and Section 2.4(f), the
Buyer Parties covenant and agree that, from the Closing Date through _ _ _ __

(i) other than with respect to sales of inventory in the Ordinary Course
of Business and sales of obsolete or unused assets, Buyer will use its
commercially reasonable efforts to retain substantially all of the Business's
material assets, as they exist immediately after the Closing, including all contracts,
agreements, commitments and any renewals, modifications or amendments to the
same (for the avoidance of doubt, it is understood that in no event shall any direct
or indirect sale of all or substantially all of the assets of Buyer (whether by merger,
consolidation, sale or otherwise) be deemed a breach of this clause (i) by Buyer
provided that proper provision is made so that such acquiring party shall assume
the obligations set forth in this Section 2.4);

(ii) Buyer shall keep adequate records and books of account with
respect to the Company in which complete entries will be made to the extent
necessary to enable the Stockholder Representative to fully review the Calculation
for the fiscal years ended and

(iii) Buyer shall cause the Business to be funded after the Closing in
accordance with the Budget;

(iv) neither of the Buyer Parties nor any of their stockholders will
charge any management or similar fee to the Business;

17
099999-0968-02806-PaloAlto.2110456.1
 (v) within 45 days after the end of each fiscal quarter of the fiscal year
ended , _ _ beginning with the period ending _ _,
Buyer shall prepare and deliver to the Stockholder Representative a calculation of
Revenue and EBITDA for such fiscal quarter (each, an "Interim Calculation");
and

(vi) each delivery of an Interim Calculation pursuant to Section

2.4(e)(v) shall be accompanied by a certification of the Chief Financial Officer of
Buyer.

(e) Additional Covenants Upon Occurrence of an Additional Restriction

Triggering Event. Subject to Section 2.4Cc) and Section 2.4(£), if an Additional
Restriction Triggering Event occurs prior to _ _, then between the date of
such Additional Restriction Triggering Event and - - - - _ .

(i) Buyer shall not take, or permit any of its Subsidiaries (including
the Company and its Subsidiaries) to take, any of the following actions without
the prior written consent of the Stockholder Representative, to the extent that such
actions would reasonably be expected to materially and adversely impact the
ability of the Business to achieve the Contingent Payment Target (the "Additional
Restricted Actions"): (A) modify the pricing of products and services of the
Business, (B) alter the base and incentive compensation of sales personnel for the
Business, (C) change staffing levels and senior management personnel of the
Business, and (D) change the timing of delivery, installation and maintenance of
products and services of the Business (for the avoidance of doubt, it is understood
that this clause (i) shall not restrict the Buyer Parties or any of their Affiliates
(including the Company and its Subsidiaries) with respect to the conduct of their
businesses and operations other than the Business; and

(ii) to the extent Buyer or any of its Subsidiaries (including the

Company and its Subsidiaries) contracts with or exploits the Business in any
manner, such transaction will be accounted for using terms and conditions that are
arm's length in all material respects.

(f) Limitation on Covenants. Notwithstanding any other provision of this

Agreement, at no time shall the Buyer Parties or any of their Affiliates (including the
Company and its Subsidiaries) engaged in the operation or conduct of the Business be
under any obligation whatsoever to take any action outside of the Ordinary Course of
Business to seek to maximize the value or amount of the Contingent Payment, including
by delaying expenses or accelerating revenue.

2.5 The Closing. The closing of the Transaction (the "Closing") will take place at the
offices of at , commencing at 9:00 a.m., local time,
(or such other location and time as Buyer and the Stockholder Representative may mutually
determine) on the date that is two (2) Business Days following the date on which all conditions
to the obligations of the Parties to consummate the Transaction have been satisfied or waived

18
099999-0968-02806-PaloAlto.2110456.1
 (other than those that by their terms are to be satisfied or waived at the Closing) or such other
date as Buyer and the Stockholder Representative may mutually determine (the "Closing Date").

2.6 Deliveries at the Closing. At the Closing:

(a) Stockholder Deliveries. Each of the Stockholders will deliver to the Buyer
Parties:

(i) instruments of assignment, in form and substance acceptable to

Buyer, evidencing the valid transfer to Buyer of all of the Company Common
Stock of such Stockholder, free and clear of all Encumbrances;

(ii) a receipt for the Closing Cash Consideration and the Stock
Consideration received by such Stockholder at the Closing;

(iii) the Stockholder Certificate for such Stockholder;

(iv) a certificate or certificates in form and substance reasonably

acceptable to Buyer establishing that the transactions contemplated hereby are not
subject to withholding under Section 1445 of the Code; and

(v) such Stockholder's signature to the Stockholders' Agreement.

(b) Company Deliveries. The Stockholders will cause the Company to deliver
to the Buyer Parties:

(i) the Company Officer's Certificate;

(ii) certificates of good standing as to the Company and each of its

Subsidiaries from the Secretary of State (or equivalent office) of its jurisdiction of
domicile;

(iii) a signed opinion dated the Closing Date, in the form of Exhibit C,
from , outside counsel to the Company and the Stockholders.

(c) Buyer Party Deliveries to the Stockholders. The Buyer Parties will deliver
or cause to be delivered to each of the Stockholders:

(i) the percentage of the Closing Cash Consideration set forth

opposite such Stockholder's name on Schedule 2.6 hereto under the heading
"Closing Cash Consideration," by wire transfer in immediately available funds, to
the accounts specified by such Stockholder to the Buyer Parties at least two (2)
Business Days prior to the Closing;

(ii) a stock certificate registered with Parent in the name of such

Stockholder representing the amount of Stock Consideration set forth opposite
such Stockholder's name on Schedule 2.6 hereto under the heading "Number of
Shares of Stock Consideration";

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099999·0968·02806·PaloAito.2110456.1
 (iii) a receipt for the Company Common Stock purchased from such
Stockholder; and

(iv) the Buyer Officer's Certificate.

(d) Buyer Deliveries to Escrow Agent. The Buyer will deliver, or cause to be
delivered, to the Escrow Agent the Holdback Consideration.

2.7 Escrow Account. At the Closing, Buyer shall deliver, or cause to be delivered,
and each Stockholder shall be deemed to have received and deposited, the Holdback
Consideration listed opposite such Stockholder's name on Schedule 2.7 hereto to an escrow
account that is interest bearing (the "Escrow Account") to be established by Buyer with an
escrow agent to be designated by Buyer and approved by the Stockholder Representative (which
approval shall not be unreasonably withheld) prior to the Closing (the "Escrow Agent") to be
held by the Escrow Agent, pursuant to the terms of an escrow agreement, in substantially the
form attached hereto as Exhibit D together with such other modifications as shall be reasonably
satisfactory to Buyer and the Stockholder Representative (the "Escrow Agreement"), to provide
for the satisfaction of certain claims for indemnification made by the Buyer Indemnified Parties
pursuant to Article 8 of this Agreement. Any accrued interest on the Holdback Consideration of
each Stockholder deposited into the Escrow Account shall inure to the benefit of such
Stockholder and shall be delivered by the Escrow Agent to such Stockholder by check promptly
after the end of each fiscal quarter of Buyer. Any fees and expenses of the Escrow Agent shall
be paid by Buyer. The Holdback Consideration shall be retained in the Escrow Account until
released pursuant to Section 2.8 or Section 8.4. During the period in which the Holdback
Consideration is retained in the Escrow Account, it will be held for the benefit of the
Stockholders, unless, until and to the extent it has been determined that any of the Buyer
Indemnified Parties is entitled to retain any of the Holdback Consideration in respect of
indemnification claims pursuant to Article 8.

2.8 Holdback Consideration.

(a) Within two (2) Business Days following , __ (the "Initial

Holdback Release Date"), Buyer and the Stockholder Representative shall each instruct
the Escrow Agent in writing to take the following actions:

(i) The Escrow Agent shall be instructed to retain aggregate Holdback

Consideration equal to the sum of the aggregate Outstanding Claims at such time,
if any (or such lesser amount of Holdback Consideration as shall be remaining in
the Escrow Account at such time) (collectively, the "Retained Holdback
Consideration").

(ii) The Escrow Agent shall be instructed to provide Buyer and the
Stockholder Representative with a written notice of the amount of Holdback
Consideration (after giving effect to any Holdback Consideration previously
delivered to the Buyer Indemnified Parties pursuant to Section 8.4), if any, that is
in excess of the sum of the Retained Holdback Consideration (the "Remaining
Holdback Consideration"). The Remaining Holdback Consideration, if any, shall

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 be allocated among the Stockholders pursuant to their respective Sharing
Percentages and Buyer and the Stockholder Representative shall promptly provide
the Escrow Agent a written notice (the "Remaining Holdback Consideration
Notice") of the amount of each Stockholder's respective allocation of the
Remaining Holdback Consideration, which notice shall further instruct the
Escrow Agent to deliver the amount of each Stockholder's allocation of the
Remaining Holdback Consideration to each Stockholder promptly and in no event
longer than two (2) Business Days after the Escrow Agent's receipt of the
Remaining Holdback Consideration Notice.

(b) In the event and to the extent that after the Initial Holdback Release Date
(i) any Outstanding Claim notice of which is delivered prior to the Initial Holdback
Release Date is resolved against the relevant Buyer Indemnified Party(ies) (such amount,
a "Stockholder Favorable Outcome") and (ii) the Retained Holdback Consideration at
such time exceeds the aggregate Outstanding Claims after giving effect to such
Stockholder Favorable Outcome (such excess, if any, the "Retained Holdback Excess"),
each of Buyer and the Stockholder Representative shall promptly instruct the Escrow
Agent in writing to forthwith promptly deliver to the Stockholder Representative such
amount of Retained Holdback Excess. Such Retained Holdback Excess shall be allocated
by the Stockholder Representative among the Stockholders pursuant to their respective
Sharing Percentages.

(c) In the event and to the extent that after the Initial Holdback Release Date
any Outstanding Claim notice of which is delivered prior to the Initial Holdback Release
Date is resolved in favor of the relevant Buyer Indemnified Party(ies), each of Buyer and
the Stockholder Representative shall promptly instruct the Escrow Agent in writing to
promptly deliver Retained Holdback Consideration to such Buyer Indemnified Party(ies)
in the manner set forth in Section 8.4.

2.9 Stockholder Representative.

(a) is hereby constituted and appointed as agent ("Stockholder

Representative"), for and on behalf of the Stockholders, to act on behalf of the
Stockholders as provided in this Agreement, including giving and receiving notices and
communications, authorizing delivery to the Buyer Indemnified Parties of the Holdback
Consideration in satisfaction of indemnification claims by the Buyer Indemnified Parties
as contemplated by Section 8.4, objecting to such deliveries, agreeing to, negotiating,
entering into settlements and compromises of, and demanding arbitration and complying
with Orders of courts and awards of arbitrators with respect to such claims, and taking all
actions necessary or appropriate in the judgment of the Stockholder Representative for
the accomplishment of the foregoing. No bond shall be required of the Stockholder
Representative, and the Stockholder Representative shall receive no compensation for
services rendered. Notices or communications to or from the Stockholder Representative
shall constitute notice to or from each of the Stockholders.

(b) The Stockholder Representative shall not be liable for any act done or
omitted hereunder in his capacity as Stockholder Representative, except to the extent he

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 has acted with gross negligence or willful misconduct, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence that he did not act with
gross negligence or willful misconduct. The other Stockholders shall severally indemnify
the Stockholder Representative and hold him harmless against any loss, liability or
expense incurred without gross negligence or bad faith on the part of the Stockholder
Representative and arising out of or in connection with the acceptance or administration
of the duties hereunder, including any out-of-pocket costs and expenses and legal fees
and other legal costs reasonably incurred by the Stockholder Representative.

(c) A decision, act, consent or instruction of the Stockholder Representative

shall constitute a decision of all the Stockholders and shall be final, binding and
conclusive upon each of the Stockholders, and the Escrow Agent and both Buyer Parties
may rely upon any decision, act, consent or instruction of the Stockholder Representative
as being the decision, act, consent or instruction of each of the Stockholders. The Escrow
Agent and the Buyer Parties are hereby relieved from any liability to any person for any
acts done by them in accordance with such decision, act, consent or instruction of the
Stockholder Representative.

ARTICLE 3

REPRESENTA TIONS AND WARRANTIES CONCERNING THE TRANSACTION

3.1 Representations And Warranties of the Stockholders. Each of the Stockholders,

severally and not jointly, represents and warrants to Buyer as follows:

(a) Status, Power and Enforceability. Such Stockholder is an individual and

is competent to execute and deliver this Agreement and the Stockholders' Agreement,
and to perform his or her obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. All acts and other proceedings required to
be taken by such Stockholder to authorize the execution, delivery and performance of this
Agreement and the Stockholders' Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and properly taken. This Agreement
has been duly authorized, executed and delivered by such Stockholder and constitutes a
legal, valid, binding and Enforceable obligation of such Stockholder. At or prior to the
Closing, such Stockholder shall have duly executed and delivered the Stockholders'
Agreement and the Stockholders' Agreement shall constitute a legal, valid, binding and
Enforceable obligation of such Stockholder.

(b) Non-Contravention. The execution, delivery and performance by such

Stockholder of this Agreement and the Stockholders' Agreement and the consummation
of the transactions contemplated hereby and thereby and compliance with the provisions
hereof and thereof by such Stockholder does not and will not (i) conflict with or violate
any Law or Order applicable to such Stockholder or any of the assets or properties of
such Stockholder or (ii) conflict with, result in any breach of, constitute a default (or
event which with the giving of notice or lapse of time, or both, would become a default)
under, require any Consent or the giving of notice under, or give to others any right to
purchase or sell assets or securities or to exercise any additional remedy or create any

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 additional obligation under, or any rights of termination, amendment or acceleration of,
or result in the creation of any Encumbrance on the shares of Company Common Stock
pursuant to, any Contract to which such Stockholder is a party or by which such
Stockholder's properties or assets is bound or affected, except for any such conflicts,
breaches or defaults as has not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

(c) Approvals, Consents and Filings. The execution, delivery and

performance by such Stockholder of this Agreement and the Stockholders' Agreement do
not and will not require any Consent or other Order of, action by, filing with or
notification to, any Governmental Body or any other Consent from a Governmental Body.
Such Stockholder, taken together with his or her spouse, (i) is an "ultimate parent entity"
of the Company as defined in Section 801.1 of the Premerger Notification Rules (the
"Rules") promulgated under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and (ii) as of the date hereof, has total assets ofless than $12 million.
Neither such Stockholder nor any Persons such Stockholder controls are engaged in
manufacturing activities (as defined in Section 801.1 of the Rules).

(d) Litigation. There is no Action pending against, or, to the Knowledge of

such Stockholder, Threatened against such Stockholder that, individually or in the
aggregate, would be reasonably likely to result in a Company Material Adverse Effect.

(e) Company Capital Stock. Such Stockholder owns beneficially and of

record, free and clear of any Encumbrances, the shares of Company Common Stock set
forth opposite the name of such Stockholder in Schedule 2.1 and such shares of Company
Common Stock constitute all of the Company Capital Stock owned beneficially or of
record by such Stockholder and its Affiliates. Upon delivery of the Closing Cash
Consideration and the Stock Consideration to such Stockholder, good and valid title to
the Company Common Stock of such Stockholder will pass to Buyer, free and clear of
any Encumbrances (including, for the avoidance of doubt, any purchase option, call, right
of first refusal, preemptive right, subscription right, registration right or similar rights
(whether under any provision of applicable Law, the Organizational Documents of the
Company and its Subsidiaries or any Contract to which the Company or any of its
Subsidiaries is subject, bound or a party or otherwise». Except for this Agreement, such
Stockholder (i) is not party to any, and has not granted to any other Person any, and there
are no, outstanding options, warrants, subscription rights, rights of first refusal or any
other rights providing for, or restricting, the acquisition or disposition of the Company
Common Stock of such Stockholder and (ii) is not a party to any (x) stockholder
agreement, voting trust, proxy or other agreement or understanding with respect to the
voting of the Company Common Stock of such Stockholder or (y) registration rights
agreement or similar agreement with respect to the registration or qualification under
Law of the transfer or sale of any Company Capital Stock.

(f) No Brokers or Finders. Such Stockholder has no liability or obligation to

pay any fees or commissions to any broker, finder or agent with respect to the
Transaction or any other transaction contemplated by this Agreement or the
Stockholders' Agreement.

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 (g) Additional Representations Regarding Such Stockholder.

(i) Such Stockholder is an "accredited investor" as that term is defined

in Rule 501 of Regulation D under the Securities Act.

(ii) Except as provided by this Agreement, such Stockholder is

acquiring the Stock Consideration for investment and not with a view toward, or
for sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling such Stock Consideration.

(iii) Such Stockholder agrees that the Stock Consideration may not be
sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of
(a) without registration under the Securities Act and any applicable state securities
Laws, except pursuant to an exemption from such registration under such act and
such Laws, and (b) unless in compliance with the Stockholders' Agreement.

(iv) Such Stockholder is an informed and sophisticated party. Such

Stockholder has undertaken such investigation and has been provided with and
has evaluated such documents and information as such Stockholder has deemed
necessary to enable such Stockholder to make an informed decision with respect
to the execution, delivery and performance of this Agreement and the
Stockholders' Agreement and the transactions contemplated hereby and thereby.
Such Stockholder has received all materials relating to the business of Parent and
its Subsidiaries which such Stockholder has requested and has been afforded the
opportunity to obtain any additional information necessary to verify the accuracy
of any such information or of any representation or warranty made by Parent and
Buyer hereunder or to otherwise evaluate the merits of the Transaction, including
an investment in Parent Common Stock. Parent and Buyer and their
representatives have answered to such Stockholder's satisfaction all inquiries that
such Stockholder or such Stockholder's representatives have made concerning the
business of Parent and its Subsidiaries or otherwise relating to the Transaction.
Such Stockholder is acquiring the Parent Common Stock without reliance upon
any express or implied representations or warranties of any nature, whether in
writing, orally or otherwise, made by or on behalf of or imputed to Parent or
Buyer, except as expressly set forth in this Agreement.

3.2 Representations And Warranties of the Buyer Parties. Subject to the exceptions
and disclosures set forth in the disclosure letter delivered by the Buyer Parties to the
Stockholders on the date hereof (the "Buyer Disclosure Letter"), each of the Buyer Parties
represents and warrants to the Stockholders as follows:

(a) Status, Power and Enforceability. Such Buyer Party is duly organized,
validly existing, and in good standing under the Laws of the State of Delaware and has all
requisite power and authority to execute and deliver this Agreement and, if a party
thereto, the Stockholders' Agreement and to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby. All
acts and other proceedings required to be taken by such Buyer Party to authorize the

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099999·0968·02806·PaloAlto.2110456.1
 execution, delivery and performance of this Agreement and, if a party thereto, the
Stockholders' Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and properly taken. This Agreement has been duly
authorized, executed and delivered by each of the Buyer Parties and constitutes a legal,
valid, binding and Enforceable obligation of each Buyer Party. At or prior to the Closing,
Parent shall have duly executed and delivered the Stockholders' Agreement, and such
Stockholders' Agreement shall constitute a legal, valid, binding and Enforceable
obligation of Parent. True and complete copies of the Organizational Documents of
Parent, as amended to date, have been made available to the Stockholders prior to the
date hereof, and each of such Organizational Documents is in full force and effect.

(b) Non-Contravention. The execution, delivery and performance by each of

the Buyer Parties of this Agreement and, if a party thereto, the Stockholders' Agreement
and the consummation of the transactions contemplated hereby and thereby and
compliance with the provisions hereof and thereof by such Buyer Party does not and will
not (i) conflict with or violate such Buyer Party's Organizational Documents, (ii) conflict
with or violate any Law or Order applicable to such Buyer Party or any of its assets or
properties or (iii) conflict with, result in any breach of, constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a default) under,
require any Consent or the giving of notice under or any rights of termination,
amendment or acceleration of, or other than as set forth in Section 3.2(b) of the Buyer
Disclosure Letter, result in the creation of any Encumbrance on the shares of Parent
Common Stock pursuant to any Contract to which such Buyer Party is a party or by
which any of its properties or assets is bound or affected, except, in the case of each of
clause (ii) and (iii), for any such conflict, violation, breaches or defaults as has not had
and would not reasonably be expected to have, individually or in the aggregate, a Buyer
Material Adverse Effect.

(c) Approvals, Consents and Filings. Assuming the accuracy of Section

J.J..(0, the execution, delivery and performance by the Buyer Parties of this Agreement
and, if a party thereto, the Stockholders' Agreement, do not and will not require any
Consent or other Order of, action by, filing with or notification to, any Governmental
Body.

(d) Litigation. There is no Action pending against, or, to the Knowledge of

such Buyer Party, Threatened against such Buyer Party, except for such Actions as would
not be expected to result, individually or in the aggregate, in a Buyer Material Adverse
Effect. No Action is pending by the Buyer Parties against any other Person.

(e) Legal Compliance. Each of the Buyer Parties has complied with all
applicable Laws, and no Action is pending or, to the Knowledge of such Buyer Party,
Threatened against such Buyer Party alleging any failure to so comply, except for such
non-compliance or Actions as has not had and would not reasonably be expected to result,
individually or in the aggregate, in a Buyer Material Adverse Effect.

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099999-0968-02806-PaloAlto.2110456.1
 (f) Capitalization. As of the date hereof, the authorized Capital Stock of
Parent consists of shares of common stock, par value $0.001 per share,
the Parent Common Stock. As of the date hereof, the outstanding Capital Stock of Parent
consist of shares of Parent Common Stock and options to purchase
_____ shares of Parent Common Stock (the "Parent Options") granted pursuant to
the _ _ Stock Incentive Plan of Parent (the "Parent Option Plan"). Except as set forth in
the immediately foregoing sentences, there are no authorized, issued or outstanding
shares of Capital Stock of Parent as of the date hereof, and there are no outstanding
warrants, options, rights, "phantom" stock rights, agreements, convertible or
exchangeable securities or other commitments or obligations (contingent or otherwise)
(other than this Agreement and the Stockholders' Agreement) pursuant to which Parent
or any of its Subsidiaries is or may become obligated to issue, sell, purchase, return or
redeem any shares of Capital Stock.

(g) Valid Issuance of Stock Consideration. At the Closing, the Stock

Consideration shall have been duly and validly authorized and when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed herein, will
be fully paid and non-assessable.

(h) Financial Statements. Section 3.2(g) of the Buyer Disclosure Letter sets
forth the following financial statements of Parent (the "Parent Financial Statements"): (1)
the audited consolidated balance sheet of Parent at _ _, and the related
audited consolidated statements of operations, stockholders' equity and cash flows for the
fiscal year ended , _ _ ; and (2) the unaudited consolidated balance sheet of
Parent as of _ _, and the related unaudited consolidated statements of
operations and cash flows for the fiscal year ended ' _ _. Except as set
forth in the notes thereto, the Parent Financial Statements (i) are complete in all material
respects, have been prepared in accordance with GAAP consistently applied, (ii) are
consistent with the books and records of Parent and its Subsidiaries and (iii) fairly present,
in all material respects, the consolidated financial condition, results of operations and
cash flows of Parent and its Subsidiaries as of the dates and for the periods indicated
therein; provided, however, that the unaudited portions of the Parent Financial Statements
are subject to normal year-end audit adjustments and lack footnotes and other
presentation items.

(i) Financing. Parent has previously delivered to the Stockholder

Representative a true and complete copy of the executed a Commitment and Engagement
Letter dated as of the date hereof (the "Commitment Letter") from and
_ _ _ _ (the "Banks") and accepted by Buyer. The Commitment Letter is in full
force and effect as of the date hereof. The obligation to fund the debt financing
contemplated by the Commitment Letter (the "Financing") is not subject to any
conditions other than as set forth in the Commitment Letter. All commitment and other
fees required to be paid under the Commitment Letter on or prior to the date hereof have
been paid. Assuming satisfaction of all applicable conditions set forth in the
Commitment Letter and this Agreement and full funding thereunder of all amounts
available under the terms of the Commitment Letter, Buyer shall have sufficient funds to
pay the Cash Consideration.

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 (j) No Brokers or Finders. Neither of the Buyer Parties has any liability or
obligation to pay any fees or commissions to any broker, finder or agent with respect to
the Transaction or any other transaction contemplated by this Agreement.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

Subject to the exceptions and disclosures set forth in the disclosure letter delivered by the
Stockholders to the Buyer Parties in respect of the Company on the date hereof (the "Company
Disclosure Letter"), each of the Stockholders, severally and not jointly, represents and warrants
to each of the Buyer Parties as follows:

4.1 Organization. Each of the Company and its Subsidiaries is (a) duly organized,
validly existing and in good standing (if applicable) under the Laws of its jurisdiction of
organization and has the requisite power to own its properties and to carryon its business as it is
now being conducted and to perform all of its respective obligations under all Contracts to which
it is party, (b) not in violation of its Organizational Documents and (c) duly qualified or
otherwise authorized to do business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary (a list of the
jurisdictions in which the Company and its Subsidiaries are so qualified is set forth in Section 4.1
of the Company Disclosure Letter), except where the failure to be so qualified or authorized has
not had and would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. True and complete copies of the Organizational Documents,
each as amended to date, of the Company and each of its Subsidiaries have been made available
to Buyer prior to the date hereof, and each of such Organizational Documents is in full force and
effect. There is no pending or Threatened Action for the dissolution, liquidation or insolvency of
Company or any of its Subsidiaries.

4.2 Non-Contravention. The execution and delivery by the Stockholders and the
performance by the Company, its Subsidiaries and the Stockholders of this Agreement, and the
consummation of the transactions contemplated hereby and the compliance by the Company, its
Subsidiaries and the Stockholders with the provisions hereof will not, (i) conflict with or violate
any of the Organizational Documents of the Company or any of its Subsidiaries, (ii) conflict with
or violate any Law or Order applicable to the Company or any of its Subsidiaries or any of the
assets or properties of the Company or any of its Subsidiaries or (iii) conflict with, result in any
breach of, constitute a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, require any Consent or the giving of notice under, or give to
others any right to purchase or sell assets or securities or to exercise any additional remedy or
create any additional obligation under, or any rights of termination, amendment or acceleration
of, or result in the creation of any Encumbrance on any of the Capital Stock of the Company or
any of the assets or properties of the Company or any of its Subsidiaries pursuant to, any
Contract to which the Company or any of its Subsidiaries is a party or by which any of the
Company's or its Subsidiaries' properties or assets is bound or affected, except, in the case of
clause (ii) and clause (iii) taken together, for any such conflicts, breaches or defaults that has not
had and would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.

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 4.3 Approvals, Consents and Filings. The execution, delivery and performance by the
Stockholders of this Agreement and the Stockholders' Agreement do not and will not require that
the Company or any of its Subsidiaries obtain any Consent or other Order of, action by, filing
with or notification to, any Governmental Body.

4.4 Capitalization.

(a) As of the date hereof, the authorized Capital Stock of the Company
consists of shares of the Company Common Stock. As of the date hereof the
issued and outstanding Company Capital Stock consists of shares of
Company Common Stock. Except as set forth in the immediately foregoing sentences,
there is no authorized, issued or outstanding Company Capital Stock as of the date hereof,
and there are no outstanding warrants, options, rights, "phantom" stock rights,
agreements, convertible or exchangeable securities or other commitments or obligations
(contingent or otherwise) (other than this Agreement or the Stockholders' Agreement)
pursuant to which the Company or any of its Subsidiaries is or may become obligated to
issue, sell, purchase, return, redeem or register any Capital Stock. The Company is not a
party to, or otherwise subject to, any voting agreement, trust or proxy or other Contract
with respect to the redemption, purchase, sale, transfer, registration or other disposition of
the Company's Capital Stock.

(b) Schedule 2.1 sets forth as of the date hereof the record and beneficial
owner of each of the outstanding shares of Company Common Stock.

(c) The Company owns of record and beneficially all shares of Capital Stock
of each of the Subsidiaries of the Company, and Section 4.4(c) of the Company
Disclosure Letter sets forth with respect to each such Subsidiary: (i) its name and
jurisdiction of organization, (ii) its entire authorized Capital Stock and (iii) the number of
issued and outstanding shares of Capital Stock of such Subsidiary and the record and
beneficial owners thereof.

(d) All of the issued and outstanding shares of Company Common Stock have
been duly authorized, validly issued, are fully paid and nonassessable, have not been
issued in violation of any Contract or preemptive or similar rights, the Securities Act or
other applicable Law, and are owned of record and beneficially by the Stockholders, and
to the Knowledge of the Company, are free and clear of any Encumbrances (including,
for the avoidance of doubt, any purchase option, call, right of first refusal, preemptive
right, subscription right, registration right or similar rights (whether under any provision
of applicable Law, the Organizational Documents of the Company and its Subsidiaries or
any Contract to which the Company or any of its Subsidiaries is subject, bound or a party
or otherwise)). All of the issued and outstanding Capital Stock of each of the
Subsidiaries of the Company have been duly authorized, validly issued, are fully paid and
nonassessable, have not been issued in violation of any Contract or preemptive or similar
rights, the Securities Act or other applicable Law, and are owned of record and
beneficially by the Company and/or its other Subsidiaries free and clear of any
Encumbrances (including, for the avoidance of doubt, any purchase option, call, right of
first refusal, preemptive right, subscription right, or similar rights (whether under any

28
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 provision of applicable Law, the Organizational Documents of the Company and its
Subsidiaries, any Contract to which the Company or any of its Subsidiaries is subject,
bound or a party or otherwise». There is no Capital Stock of the Company or any of its
Subsidiaries reserved for issuance for any purpose. There are no outstanding bonds,
debentures, notes or other Indebtedness having the right to vote on any matters on which
holders of Capital Stock of the Company or any of its Subsidiaries may vote.

(e) Other than with respect to the Subsidiaries of the Company set forth in
Section 4.4(c) of the Company Disclosure Letter, none of the Company or its
Subsidiaries directly or indirectly owns any Capital Stock in, or any interest convertible
or exchangeable or exercisable for any Capital Stock in, any other Person. There are no
obligations, contingent or otherwise, of the Company or any of its Subsidiaries to provide
funds to, or make any investment (in the form of a loan, capital contribution or otherwise)
in or to, any other Person.

(f) Neither of the Company or any of its Subsidiaries has any Indebtedness
outstanding.

4.5 Company Financial Statements; Receivables.

(a) Company Financial Statements. Section 4.5(a) of the Company

Disclosure Letter sets forth the following financial statements of the Company (the
"Company Financial Statements"): (1) the audited consolidated balance sheet of the
Company at , _ _ , _ _ and _ _, and the related audited consolidated
statements of operations, stockholders' equity and cash flows for the fiscal years ended
_ _ _ _ , _ _, _ _ and _ _; and (2) the audited consolidated balance sheet of the
Company as of _ _, and the related audited consolidated statements of
operations, stockholders' equity and cash flows for the fiscal year ended _ _ __
_ _. Except as set forth in the notes thereto, the Company Financial Statements (i) have
been prepared in accordance with GAAP consistently applied, (ii) are consistent with the
books and records of the Company and its Subsidiaries and (iii) fairly present, in all
material respects, the consolidated financial condition, results of operations and cash
flows of the Company and its Subsidiaries as of the dates and for the periods indicated
therein.

(b) Since , _ _, neither the Company nor any of its Subsidiaries

has received or otherwise had or obtained Knowledge of any written complaint,
allegation, assertion or claim regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any its Subsidiaries or their respective
internal accounting controls, including any written complaint, allegation, assertion or
claim that the Company or any of its Subsidiaries has engaged in questionable accounting
or auditing practices.

(c) All of the Receivables reflected on the balance sheet as of _ _ __

_ _ (the "Balance Sheet"), and all Receivables arising between and
the date hereof, represent bona fide transactions, arose from transactions in the Ordinary
Course of Business, and the goods or services involved have been sold and delivered to

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 the account obligor, or are in transit, and no further goods or services are required to be
provided in order to complete the sales. No such Receivable has been pledged or
assigned to any other Person. Subject to any reserves set forth on the Balance Sheet, no
defense or set off to any such Receivable has been asserted in writing by the receivable
obligor, or, to the Knowledge of the Company, exists. All of the Receivables are
reflected properly in all material respects in the books and records of the Company and
its Subsidiaries.

4.6 Absence of Changes. Since , __ there has not been any material
damage, destruction, impairment or loss (whether or not covered by any insurance) to any
material assets of the Company or any of its Subsidiaries and since and
through the date hereof:

(a) the Company and its Subsidiaries have operated in the Ordinary Course of
Business;

(b) there have been no events, circumstances or conditions, or series of events,

circumstances or conditions or the lack of occurrence thereof, which has had or would
reasonably be expected to have, in each case, individually or in the aggregate, a Company
Material Adverse Effect;

(c) none of the Company or any of its Subsidiaries has taken any of the
following actions:

(i) (A) made any distributions in respect of any of its Capital Stock
(except distributions by any wholly owned Subsidiary of the Company to the
Company), (B) redeemed or otherwise acquired any of its Capital Stock or (C)
issued any Capital Stock or any Commitments;

(ii) (A) granted any increase in the compensation or fringe benefits of

any present or former Company Employee (except for increases in salary or
wages of Company Employees (other than any Related Person) in the Ordinary
Course of Business), or (B) paid any severance or termination pay to any present
or former Company Employee;

(iii) established, adopted, entered into, amended or terminated any Plan

or collective bargaining agreement (other than as may be required by the terms of
an existing Plan or collective bargaining agreement or as may be required by
applicable Law or in order to qualify under Sections 401 and 501 ofthe Code);

(iv) incurred or assumed any obligation for borrowed money or

guaranteed any such obligation;

(v) canceled any indebtedness or waived any claims or rights of

substantial value;

(vi) made any change in any method of accounting or accounting

practice or policy, except as may be required by applicable Law;

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 (vii) made or incurred any capital expenditure, other than in the
Ordinary Course of Business;

(viii) sold, leased, licensed or otherwise disposed of any of its assets,

rights or properties, other than (a) the disposition of unused and obsolete
equipment in immaterial amounts and (b) the sale of its products and services and
non-exclusive licensing of Company Intellectual Property to its customers in the
Ordinary Course of Business;

(ix) made any loan, advance, or capital contribution to or investment in

any Person (other than routine travel and business expense advances to Company
Employees in the Ordinary Course of Business);

(x) created or incurred any Encumbrance (other than Permitted

Encumbrances) on any of the assets or properties (whether tangible or intangible)
of the Company or any of its Subsidiaries;

(xi) discharged or otherwise obtained the release of any Encumbrance

or paid or otherwise discharged any Liability, other than current Liabilities
incurred in the Ordinary Course of Business;

(xii) made any loan, guaranty or other extension of credit, or entered

into any commitment to make any loan, guaranty or other extension of credit, to
or for the direct or indirect benefit of, or entered into any other agreement,
arrangement or transaction (whether in writing or otherwise) with any Related
Person;

(xiii) merged with, entered into a consolidation with or acquired an

interest in any Person or acquired by merging or consolidating with, or by
purchasing a substantial portion of the stock or assets of, or by any other manner,
any business or any corporation, partnership, association, limited liability
company, trust or other business organization or division thereof; or

(xiv) agreed, whether in writing or otherwise, to do any of the foregoing,

except as expressly contemplated by this Agreement.

4.7 No Undisclosed Liabilities. The Company and its Subsidiaries have no Liabilities
other than (a) Liabilities quantified on the face of the Balance Sheet (or in any notes thereto) and
not heretofore paid or discharged, (b) Liabilities that have arisen after in the
Ordinary Course of Business that are of the same character and nature as the Liabilities
quantified on the face of the Balance Sheet and have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect and (c)
Company Transaction Expenses. Neither the Company nor any of its Subsidiaries is a party to,
or has any commitment to become a party to, any Contract associated with off-balance sheet
financing, including any arrangement for the sale of Receivables.

4.8 Legal Compliance. Each of the Company and its Subsidiaries has complied in all
material respects with all applicable Laws, and no Action is pending or, to the Knowledge of the

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 Company, Threatened against it alleging any failure to so comply. The Company and its
Subsidiaries hold all material Permits that are required to operate their businesses as currently
conducted, and such Permits are in full force and effect and no proceeding is pending or, to the
Knowledge of the Company, Threatened, to revoke or limit any thereof.

4.9 Tax Matters.

(a) All material Tax Returns required to be filed by, or on behalf of, the
Company and its Subsidiaries have been filed, and all such Tax Returns were true, correct
and complete in all material respects. All Taxes of the Company and its Subsidiaries due
and payable (whether or not shown on any Tax Return) have been fully paid or the
Company has made due and sufficient accruals for such Taxes in the Balance Sheet.

(b) Each of the Company and it Subsidiaries has duly withheld and paid over
to the appropriate Governmental Bodies all material Taxes and other amounts required to
be so withheld and paid over for all periods under all applicable Laws in connection with
amounts paid or owing to any Company Employee, independent contractor, subcontractor,
lender, stockholder or other third party.

(c) (i) Neither the Company nor any of its Subsidiaries has received any
written notice, or to the Company's Knowledge, any other notice, of any audit,
investigation, other proceeding, or any assessment or intent to make any audit,
investigation, other proceeding, or any assessment by any Governmental Body regarding
any material Taxes for which the Company or any of its Subsidiaries may be liable and to
the Knowledge of the Company, no audits, investigations or other proceedings are
pending or currently ongoing with respect to Taxes of the Company of any of its
Subsidiaries; (ii) no written claim or, to the Company's Knowledge, any other claim, has
been made by a Governmental Body in a jurisdiction where the Company or any of its
Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries is or
may be subject to taxation by that jurisdiction or is obliged to act as withholding agent
under the laws of that jurisdiction; and (iii) no waiver or extension of any statute of
limitations has been given or requested with respect to the Company or any of its
Subsidiaries in connection with any material Tax Returns, in each of (i), (ii) and (iii), that
has not been previously resolved.

(d) There are no Encumbrances (other than for Taxes not yet due and payable)
on any of the assets of the Company or any of its Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Tax.

(e) Neither the Company nor any of its Subsidiaries is a party to or bound by
any agreement providing for the allocation, sharing or indemnification of Taxes with a
third party under which the Company or its Subsidiaries would have continuing Liability
after the Closing.

(f) Neither the Company nor any of its Subsidiaries has executed or entered
into a closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof or any similar provision of Law.

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 (g) The Company (i) has not been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group the common parent of which
is the Company) and (ii) has no material liability for the Taxes of any person under Treas.
Reg. Section 1. 1502-6(a) (or any similar provision of state, local or foreign Law), as a
transferee or successor, by contract, or otherwise.

(h) The Company has not entered into any transaction that is the same or
substantially similar to a "listed transaction" as described in Treasury regulation Section
1.60 11-4(b)(2).

(i) Each of the Company and its Subsidiaries has been a validly electing S
corporation or qualified subchapter S subsidiary within the meaning of Sections 1361 and
1362 of the Code at all times during its existence and will be an S corporation or
qualified subchapter S subsidiary up to and including the Closing Date.

G) Each of the Company or any Subsidiary has no potential liability for any
Tax under Section 1374 of the Code. Each of the Company or any Subsidiary has not, in
the past 10 years, (A) acquired assets from another corporation in a transaction in which
the Company's basis (or Subsidiary's basis) for the acquired assets was determined, in
whole or in part, by reference to the Tax basis of the acquired assets (or any other
property) in the hands of the transferor or (B) acquired the stock of any corporation that is
a qualified subchapter S subsidiary.

4.10 Real Property; Title; Condition and Sufficiency of Assets.

(a) Neither the Company nor any of its Subsidiaries owns any real property.
Section 4.10 of the Company Disclosure Letter sets forth all leases, subleases and other
agreements under which the Company or any of its Subsidiaries uses or occupies or has
the right to use or occupy, now or in the future, any real property (the "Leases"). Each of
the Company and its Subsidiaries has good title to, or in the case of leased property and
assets, have valid leasehold interests in, all property and assets (whether real, personal,
tangible or intangible) owned, leased, used or held for use by it, in each case free and
clear of all Encumbrances (other than, solely with respect to assets other than Capital
Stock of any Subsidiary, Permitted Encumbrances). For purposes of this Section 4.10
only, the terms "property" and "assets" do not include Intellectual Property.

(b) Each Lease is in full force and effect and is Enforceable against the
landlord that is party thereto in accordance with its terms. There exists no material
breach, default or event of default on the part of the Company or any of its Subsidiaries
under any of the Leases. Neither the Company nor any of its Subsidiaries is currently in
receipt of any written notice, or to the Knowledge of any Stockholder, any non-written
notice of any unresolved breach or default under any Lease or any other written
termination notice with respect thereto.

(c) Except for normal wear and tear in the Ordinary Course of Business, all of
the buildings, facilities, leasehold improvements, fixtures, structures and other real

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 property and tangible assets of the Company and its Subsidiaries are in good condition
and repair.

(d) The assets and rights of the Company and its Subsidiaries constitute all the
assets and rights necessary to conduct the business of the Company and its Subsidiaries
as currently conducted; provided, however, that no representation or warranty is made in
this Section 4.10 as to non-infringement ofIntellectual Property.

4.11 Intellectual Property.

(a) Registered Intellectual Property; Proceedings. Section 4.11(a) of the

Company Disclosure Letter sets forth as of the date hereof all (i) Company Registered
Intellectual Property and specifies, where applicable, the jurisdictions in which each such
item of Company Registered Intellectual Property has been issued or registered and
(ii) inter partes proceedings or actions before any Governmental Body (including the
United States Patent and Trademark Office or equivalent authority anywhere else in the
world) related to any of the Company Registered Intellectual Property, including any
(x) interference, reissue, reexamination or similar proceedings pertaining to the scope,
validity and/or ownership of any of the patents of the Company and its Subsidiaries,
(y) trademark opposition proceedings, or (z) proceedings relating to Internet domain
names, and (iii) all material unregistered trademarks.

(b) No Order. None of the Intellectual Property owned by the Company and
its Subsidiaries, or, to the Knowledge of the Company, any Company Intellectual
Property exclusively licensed to the Company, is subject to any outstanding Order,
injunction, stipulation or compulsory or confirmatory licensing terms entered or imposed
by any Governmental Body or other administrative or arbitration tribunal ("Restriction")
to which the Company is a party, or to the Knowledge of the Company, any other
Restriction, in each case restricting in any manner the use, transfer, exploitation or
licensing thereof by the Company or any of its Subsidiaries, or which is reasonably
expected to negatively affect in any material respect the validity, use or enforceability of
such Intellectual Property.

(c) Registration. The Company Registered Intellectual Property has not been
abandoned, cancelled or expired and, to the Knowledge of the Company, is valid and
Enforceable in all material respects.

(d) Absence of Encumbrances. The Company Intellectual Property (other

than Company Intellectual Property licensed to the Company) is free and clear of any
Encumbrances.

(e) In-Bound Licenses. Section 4.ll(e) of the Company Disclosure Letter

sets forth a list as of the date hereof of all Contracts to which the Company or any of its
Subsidiaries is a party pursuant to which material Intellectual Property has been licensed
by a third party to the Company or any of its Subsidiaries (including all license
agreements concerning third party Intellectual Property that is used or incorporated into
any products of the Company or any of its Subsidiaries, but not including any shrinkwrap

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 or clickwrap agreements or any license agreements concerning off-the-shelf,
commercially available software having a replacement value of less than $50,000), a
copy of each of which has been made available to the Buyer Parties ("In-Bound
Licenses").

(f) Out-Bound Licenses. Section 4.11(f) of the Company Disclosure Letter

sets forth a list as of the date hereof of all Contracts to which the Company or any of its
Subsidiaries is a party pursuant to which Company Intellectual Property has been
licensed to any third party (including any Contracts pursuant to which Company
Intellectual Property is tied, bundled or co-branded with any third-party Intellectual
Property), other than any standard end-user license agreements the Company or its
Subsidiaries uses in licensing the products of the Company or any of its Subsidiaries to
end-users of a commercially available products of the Company and its Subsidiaries,
copies of which have been made available to the Buyer Parties ("Out-Bound Licenses").

(g) No Conflict. All material Contracts relating to Company Intellectual

Property (including In-Bound Licenses and material Out-Bound Licenses) (the "IP
Contracts"), are in effect in accordance with their terms, except to the extent they have
previously expired in accordance with their terms. Each of the Company and its
Subsidiaries is in compliance in all material respects with, and has not breached any term
of any IP Contracts and, to the Knowledge of the Company, all other parties to IP
Contracts are in compliance in all material respects with, and have not breached any term
thereof. Immediately following the Closing, the Company and its Subsidiaries will be
permitted to exercise their respective rights under the IP Contracts to the same extent the
Company and its Subsidiaries would have been able to had the Transaction not occurred
and without the payment of any material additional amounts or consideration other than
ongoing fees, royalties or payments which the Company, any of its Subsidiaries or Buyer
would otherwise be required to pay, except for the inability to exercise such rights as a
result of the business currently conducted by Buyer and its Subsidiaries.

(h) No Infringement. The operation of the business of the Company and its
Subsidiaries, as such business is currently conducted and as currently anticipated to be
conducted in connection with the products and services in development set forth at
Section 4.11(h) of the Company Disclosure Letter, including the development, use,
manufacture, marketing, sale, licensing, implementation, maintenance, service and
distribution of any Company product or the provision of any Company service, does not
infringe or misappropriate the Intellectual Property of any third party in any material
respect; provided, that, solely with respect to patents that have not been issued on or prior
to the date hereof, the foregoing representation of non-infringement is limited to the
Knowledge of the Company.

(i) No Notice of Infringement. Neither the Company nor any of its

Subsidiaries within the three (3) years prior to the date hereof has received notice from
any third party that the operation of the business of the Company or any of its
Subsidiaries or any act, product or service of the Company or any of its Subsidiaries,
infringes or misappropriates or otherwise violates the Intellectual Property of any third
party (including cease and desist letters or any requests by a third party that the Company

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 or any of its Subsidiaries license such third party's Intellectual Property so as to not
infringe such third party's Intellectual Property. To the Knowledge of the Company, no
Person is infringing or misappropriating any Company Intellectual Property in any
material respect.

0) Information Privacy and Security. Each of the Company and each of its
Subsidiaries have taken and takes commercially reasonable actions to protect the
confidentiality, integrity and security of its software, databases, systems, networks and
Internet sites and all information stored or contained therein or transmitted thereby from
any unauthorized use, access, interruption or modification by third parties and complies
in all material respects with all relevant Laws with regards to the transmission and
storage of such information. The Company and the Subsidiaries have taken
commercially reasonable steps and have implemented commercially reasonable
procedures intended to ensure that the software, databases, systems, networks and
Internet sites used in connection with the operations of the Company and its Subsidiaries
are free from any malicious computer code or programs that can cause harm to computer
systems or other software, including any material worms, bugs, viruses, Trojan horses,
malware or any "spyware", and anything similar to the foregoing. The Company and its
Subsidiaries comply in all material respects with all relevant Laws and with the
Company's own written policies with respect to the privacy of all users and customers
and any of their personally identifiable information, and no claims have been asserted or,
to the Knowledge of the Company, Threatened against the Company or any Subsidiary
by any person alleging a violation of any of the foregoing.

(k) Open Source Software. None ofthe Company Intellectual Property that is
distributed by the Company uses, incorporates or has embedded in it any source, object or
other software code subject to an "open source," "copy left" or other similar types of
license terms (including, without limitation, any GNU General Public License, Library
General Public License, Lesser General Public License, Mozilla License, Berkeley
Software Distribution License, Open Source Initiative License, MIT, Apache or public
domain licenses, and the like) in a manner that requires or would reasonably be expected
to require, or conditions, or would reasonably be expected to condition, the use or
distribution of any Company Intellectual Property on, the disclosure, licensing or
distribution of any source code of the Company or any of its Subsidiaries.

(I) Escrow of Company Intellectual Property. Except for the Contracts set
forth on Section 4.11(1) of the Company Disclosure Letter, no Company Intellectual
Property is subject to any agreement with any third party pursuant to which the Company
or any of its Subsidiaries has, or would be required to, in any circumstances, deposit into
escrow such Company Intellectual Property or pursuant to which access to the source
code of the Company Intellectual Property is granted to a third party.

(m) Protection ofIntellectual Property Assets. Each of the Company and its
Subsidiaries requires each Company Employee, contractor, consultant and third party
software developer involved in proprietary aspects of the business of the Company or any
of its Subsidiaries or Company Intellectual Property, including any trade secrets or other
proprietary or confidential information, to execute nondisclosure or proprietary

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 information and confidential information agreements, and each of the Company and its
Subsidiaries has obtained such valid written agreements from each such Company
Employee, consultant, contractor and third party software developer, in each case,
pursuant to the form of such agreement made available to the Buyer Parties or pursuant to
a substantially similar form of agreement and, in any event, without any exceptions set
forth therein. Each of the Company and its Subsidiaries has taken commercially
reasonable steps to protect and preserve its ownership of and the confidentiality of any
trade secrets and other material proprietary Company Intellectual Property. To the
Knowledge of the Company, there have been no unauthorized disclosures by the
Company or any Subsidiary of any trade secrets, and no party to any confidentiality
agreement with the Company or any of its Subsidiaries is in breach thereof.

(n) Sufficiency of Assets. Immediately following the Closing, the Company

and its Subsidiaries will either own or have the right to use Company Intellectual
Property substantially in the same manner such Intellectual Property is currently being
utilized by the Company and its Subsidiaries, and which shall be sufficient for the
continued operation and conduct of its business as presently conducted in all material
respects, provided that no representation or warranty is made in this Section 4.1l(n) as to
non-infringement oflntellectual Property.

4.12 Contracts.

(a) Section 4.12(a) of the Company Disclosure Letter lists each of the
following Contracts (each a "Material Contract" and collectively the "Material
Contracts") to which the Company or any of its Subsidiaries is a party or to which the
Company or any of its Subsidiaries or any of their respective assets, rights or properties
are subject:

(i) any Contract (or group of related Contracts) with customers of the
Company and its Subsidiaries generating aggregate revenues or expenditures in
excess of $ in the fiscal year ended , __ , or is expected to
generate aggregate revenues or expenditures in excess of such amount for the
fiscal year ending _ _ __

(ii) any Lease;

(iii) any Contract creating or governing a partnership, joint venture or

similar arrangement;

(iv) any Contract under which it has created, incurred, assumed, or

guaranteed any Indebtedness or under which it has imposed or suffered to exist an
Encumbrance on any of its assets;

(v) any profit sharing, stock option, stock purchase, stock appreciation,
deferred compensation, severance, or other similar Contract for the benefit of its
current or former directors, officers, and employees;

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 (vi) any Contract (or group of related Contracts) for the employment or
engagement of any individual on a full-time, part-time, consulting, or other basis
providing (x) annual compensation or severance benefits in excess of $_ __
or (y) any severance benefit;

(vii) any Contract under which the Company or any of its Subsidiaries
has, directly or indirectly (other than routine travel and business expense advances
made to Company Employees in the Ordinary Course of Business (i) made any
advance, loan, extension of credit or capital contribution to, or other investment in,
any Person (other than the Company or any of its Subsidiaries) or (ii) agreed to
make after the date of this Agreement any advance, loan, extension of credit or
capital contribution to, or other investment in, any Person (other than the
Company or any of its Subsidiaries);

(viii) any Contract containing a covenant limiting the freedom of the

Company or any of its Subsidiaries (or that would limit the freedom of Buyer and
its other subsidiaries after the Closing) to engage in any line of business in any
geographic area or to compete with any Person or limiting the ability of the
Company or any of its Subsidiaries to incur Indebtedness or to create
Encumbrances;

(ix) any Contract which grants a power of attorney, agency or similar

authority to another Person;

(x) any Contract (other than this Agreement) for the sale of any of the
assets (including Capital Stock) of the Company or any of its Subsidiaries after
the date hereof;

(xi) any Contract pursuant to which the Company or any of its

Subsidiaries agreed to merge with, enter into a consolidation with or acquire an
interest in any Person or acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association, limited liability company,
trust or other business organization or division thereof providing for
indemnification by the Company or any of its Subsidiaries of any Person with
respect to Liabilities relating to any current or former business;

(xii) except for Contracts with customers entered into in the Ordinary
Course of Business, any other Contract (or group of related Contracts) the
performance of which involves receipt or payment of consideration in excess of
$ individually or $ in the aggregate; or

(xiii) any Contract that was not made in the Ordinary Course of Business.

(b) Delivery and Compliance. The Company has made available to the Buyer
Parties prior to the date hereof a correct and complete copy of each written Material
Contract (as amended and supplemented to date) listed in the Company Disclosure Letter,

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 together with complete and accurate descriptions of all oral Material Contracts. With
respect to each Material Contract:

(i) such Contract is Enforceable against the other parties thereto;

(ii) the Company and its Subsidiaries have duly performed all their
obligations under such Contract in all material respects to the extent that such
obligations to perform have accrued, and no breach or default or event which
would (with the passage of time, notice or both) constitute a breach or default
thereunder by the Company, or, to the Knowledge of the Stockholders, any other
party or obligor with respect thereto, has occurred; and

(iii) neither the Company, any of its Subsidiaries, nor, to the

Knowledge of the Company, any other party to such Contract has repudiated any
provision of such Contract.

(c) Customers and Suppliers. There exists no actual, or to the Company's

Knowledge, Threatened termination or cancellation of, or any adverse modification in,
the business relationship between the Company or any of its Subsidiaries and any (i)
material supplier of the Company or any of its Subsidiaries; or (ii) any customer of
Company or any of its Subsidiaries that is reasonably likely to result in a loss of greater
than $ in Revenue in the next twelve (12) months.

4.13 Certain Interests. Except as set forth on Section 4.17 of the Company Disclosure
Letter, since _ _, no Related Person:

(a) is or has been an employee or consultant of, or provided any services to,
the Company or any of its Subsidiaries;

(b) has or has had any direct or indirect financial interest in any competitor,
supplier or customer of the Company or any of its Subsidiaries;

(c) owns or has owned, directly or indirectly, in whole or in part, or has any
other interest in any tangible or intangible assets or rights that are used in, or are
necessary for, the conduct of the business of the Company or any of its Subsidiaries;

(d) directly or indirectly owes or has owed any outstanding Indebtedness to

the Company or any of its Subsidiaries; or

(e) is or has been party to, or has a direct or indirect material interest in, any
transaction, agreement or arrangement (whether written or oral) with the Company or any
of its Subsidiaries.

4.14 Insurance. Section 4.14 of the Company Disclosure Letter lists as of the date
hereof all insurance policies and bonds carried by, or on behalf of, the Company and its
Subsidiaries. Neither the Company nor any of its Subsidiaries is in material default under any
such policy or bond or received written or, to the Knowledge of the Company, verbal notice of
cancellation of any such policy or bond. Section 4.14 of the Company Disclosure Letter contains

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 a true and complete list, as of the date hereof, of all pending claims made pursuant to each such
insurance policy carrier (including any predecessor policy) and there is no claim pending under
any of such policies or bonds as to which coverage has been questioned, denied or disputed by
the underwriters of such policies or bonds. The Company has no Knowledge of any Threatened
termination of, or material premium increase with respect to, any of such policies.

4.15 No Litigation. As of the date hereof, there is no material Action pending against,
or, to the Knowledge of the Company, Threatened against the Company or any of its
Subsidiaries. No Action is pending by the Company or any of its Subsidiaries against any other
Person.

4.16 Labor; Employees. To the Knowledge of the Company, as of the date hereof, no
Company Employee has Threatened to terminate employment with the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is delinquent in any material
respect in payments of wages, salaries, commissions, bonuses or other compensation to any
Company Employees. Neither the Company nor any of its Subsidiaries is a party to or bound by
any collective bargaining Contract with any labor organization or other representative of
Company Employees nor is any such Contract presently being negotiated. Neither the Company
nor any of its Subsidiaries has experienced any strikes, grievances, or other material labor
disputes within the past three (3) years nor is any such labor controversy in effect or, to the
Knowledge of the Company, Threatened. Neither the Company nor any of its Subsidiaries has
committed any material unfair labor practice (as determined under any Law) nor is any material
unfair labor practice charge or complaint pending or, to the Knowledge of the Stockholders,
Threatened against the Company or any of its Subsidiaries. No Stockholder has any Knowledge
of any organizational effort currently being made or Threatened by or on behalf of any labor
union with respect to the employees of the Company or any of its Subsidiaries. The Company is
not a party, or otherwise bound by, any consent decree with, or citation by, any Government
Body relating to employees or employment practices.

4.17 Employee Benefit Plans and Agreements.

(a) Section 4.17(a) of the Company Disclosure Letter contains a true and
complete list of each "employee benefit plan" (within the meaning of Section 3(3) of
ERISA), including, without limitation, multiemployer plans within the meaning of
Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred
compensation, employee loan and all other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA (including
any funding mechanism therefor now in effect or required in the future as a result of the
Transaction or otherwise), whether formal or informal, funded or unfunded, oral or
written, that are legally binding under which (i) any Company Employee has any present
or future right to benefits and which are contributed to, sponsored by or maintained by
the Company or its Subsidiaries or (ii) the Company or any of its Subsidiaries has had or
has any present or future liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "Plans".

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 (b) Section 4.17(b) of the Company Disclosure Letter sets forth a complete
list, as of the date hereof, of the current Company Employees on a per employee basis,
including (1) name, (2) job title and seniority level, (3) hire date, (4) accrued vacation pay
and sick days, (5) base salary or hourly rate of compensation and incentive compensation
(including bonuses) for _ _ , _ _ and _ _ , (6) royalties payable to each such
Company Employee (if any), and (7) indicates which such Company Employees have
written employment agreements with the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has any agreements or understandings with any
Company Employees or any policies or practices requiring payment by the Company or
any of its Subsidiaries to the Company Employee in the event he or she is terminated
from employment by the Company or any of its Subsidiaries.

(c) With respect to each Plan, the Company has made available to the Buyer a
current, accurate and complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable: (i) any related trust agreement or other
funding instrument; (ii) the most recent determination letter, if applicable; (iii) any
summary plan description and other written communications (or a description of any oral
communications) by the Company or its Subsidiaries to the Company Employees
concerning the extent of the benefits provided under a Plan and (iv) for the two most
recent years (A) the Form 5500 and attached schedules, (B) audited financial statements
and (C) actuarial valuation reports, if any.

(d) (i) Each Plan has been established and administered in accordance with its
terms, and in compliance in all material respects with the applicable provisions of ERISA,
the Code and other applicable Laws; (ii) each Plan which is intended to be qualified
within the meaning of Section 401(a) of the Code is so qualified and has received a
favorable determination letter as to its qualification, and nothing has occurred, whether
by action or failure to act, that could reasonably be expected to cause the loss of such
qualification; (iii) no event has occurred and no condition exists that would subject the
Company or its Subsidiaries, by reason of their affiliation with an ERISA Affiliate, to any
tax, fine, lien, penalty or other liability imposed by ERISA, the Code or other applicable
Laws; (iv) no "reportable event" as such term is defined in Section 4043 of the Code) that
could reasonably be expected to result in liability, no nonexempt "prohibited transaction"
(as such term is defined in Section 406 of ERISA and Section 4975 of the Code) or
"accumulated funding deficiency" (as such term is defined in Section 302 of ERISA or
Section 412 of the Code (whether or not waived)) has occurred with respect to any Plan;
and (v) neither the Company nor any of its Subsidiaries has incurred any current or
projected liability in respect of post-employment or post-retirement health, medical or life
insurance benefits for the Company Employees, except as required to avoid an excise tax
under Section 4980B of the Code or otherwise except as may be required pursuant to any
other applicable Law.

(e) Each of the Company and its Subsidiaries has classified all individuals
who perform services for it correctly under the Plans, ERISA and the Code as common
law employees, independent contractors or leased employees.

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 (f) No Plan is a "multiemployer plan" (as defined in Section 4001 (a)(3) of
ERISA) and neither the Company, its Subsidiaries, or any ERISA Affiliate has at any
time sponsored or contributed to, or has or had any liability or obligation in respect of,
any multi employer plan.

(g) With respect to any Plan, (i) no actions, suits or claims (other than routine
claims for benefits in the Ordinary Course of Business) are pending or, to the Knowledge
of the Company, Threatened, (ii) to the Knowledge of the Company, no facts or
circumstances exist that could give rise to any such actions, suits or claims; and (iii) no
administrative investigation, audit or other administrative proceeding by the Department
of Labor, the Internal Revenue Service or other governmental agencies are pending or, to
the Knowledge of the Company, Threatened.

(h) No Plan exists that, as a result of the execution of this Agreement,

shareholder approval of this Agreement, or the Transaction (whether alone or in
connection with any subsequent event(s)), could result in (i) severance payor any
increase in severance pay upon any termination of employment after the date of this
Agreement, (ii) accelerate the time of payment or vesting or result in any payment or
funding (through a grantor trust or otherwise) of compensation or benefits under, increase
the amount payable or result in any other material obligation pursuant to, any of the Plans,
(iii) limit or restrict the right of the Company to merge, amend or terminate any of the
Plans, (iv) cause the Company to record additional compensation expense on its income
statement with respect to any outstanding stock option or other equity-based award, or
(v) result in payments under any of the Plans which would not be deductible under
Section 280G of the Code.

(i) Each "nonqualified deferred compensation plan" (as defined in

Section 409A(d)(l) of the Code) has been operated since , in good faith
compliance with Section 409A of the Code and IRS Notice 2005-1. No qualified
deferred compensation plan has been "materially modified" (within the meaning ofIRS
Notice 2005-1) at any time after , . No Plan provides any Company
Employee with any amount of additional compensation if such Company Employee is
provided compensation subject to the excise taxes applicable under Section 409A or 4999
of the Code.

4.18 Environmental, Health and Safety Matters. (a) Each of the Company and its
Subsidiaries is in compliance in all material respects with all Environmental, Health and Safety
Requirements in connection with the ownership, use, maintenance or operation of its business or
assets; (b) each location at which the Company or any of its Subsidiaries operates its business is
in compliance in all material respects with all Environmental, Health and Safety Requirements;
(c) there are no pending, or to the Company's Knowledge, any Threatened allegations by any
Person that the properties or assets of the Company or any of its Subsidiaries are not, or that
either of their respective businesses has not been conducted, in compliance in all material
respects with all Environmental, Health and Safety Requirements and; (d) neither the Company
nor any of its Subsidiaries has retained or assumed by Contract or operation of Law any Liability
of any other Person under any Environmental, Health and Safety Requirements and (e) to the
Knowledge of the Company, there are no past or present facts, circumstances of conditions that

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 reasonably would be expected to give rise to any Liability of the Company or any of its
Subsidiaries with respect to Environmental, Health and Safety Requirements.

4.19 No Brokers or Finders. No broker, finder or investment banker is entitled to any

brokerage, finders or other fee or commission in connection with the transactions contemplated
by this Agreement or the Stockholders' Agreement based upon arrangements made by or on
behalf of the Company or any of its Subsidiaries.

4.20 Anti-Money Laundering. Neither the Company, its Subsidiaries or any of the
Stockholders (a) appears on the Specially Designated Nationals and Blocked persons List of the
Office of Foreign Assets Control ofthe United States Department of Treasury ("OFAC") or on
any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or
regulation; (b) is a party with whom, or has its principal place of business or the majority of its
business operations (measured by revenues) located in a country in which, transactions are
prohibited by (i) United States Executive Order 13224, Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism; (ii) the
United States Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of2001; (iii) the United States Trading with the Enemy
Act of 1917, as amended; (iv) the United States International Emergency Economic Powers Act
of 1977, as amended or (v) the foreign asset control regulations of the United States Department
of the Treasury; (c) has been convicted of or charged with a felony relating to money laundering
or (d) to the Company's Knowledge, is under investigation by any Governmental Body for
money laundering.

4.21 Disclaimer of Other Representations and Warranties.

(a) Except as set forth in this Agreement (as modified by the Company
Disclosure Letter), none of the Company or any of its Subsidiaries or any Related Person
makes any other representation or warranty, express or implied, at law, or in equity, in
respect of the Company, any of its Subsidiaries or any of their respective assets, liabilities
or operations in connection with the transactions contemplated by this Agreement, and
any such other representations or warranties are hereby expressly disclaimed.

(b) Without limiting the generality of the foregoing, except as expressly set
forth in this Agreement (as modified by the Company Disclosure Letter), none of the
Company or any of its Subsidiaries or any Related Person has made, and shall not be
deemed to have made, any representations or warranties in the materials relating to the
business of the Company or any of its Subsidiaries made available to the Buyer Parties or
their representatives, including due diligence materials, or in any presentation of the
business of the Company by its management to the Buyer Parties or their representatives
in connection with the transactions contemplated by this Agreement and no such
statement contained in any such materials or made in any such presentation shall be
deemed a representation or warranty hereunder or otherwise or deemed to be relied upon
by the Buyer Parties in executing, delivering and performing this Agreement and
consummating the transactions contemplated hereby.

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 ARTICLE 5

COVENANTS

5.1 Preservation Of Business. Without limiting Section 5.2 below, from and after the
date hereof and continuing until the earlier of the Termination Date and the Closing, each of the
Stockholders will cause each of the Company and its Subsidiaries to (a) conduct their respective
businesses in the Ordinary Course of Business and (b) use its commercially reasonable efforts to
keep the business, assets, properties and rights of the Company and its Subsidiaries substantially
intact, including its present operations, physical facilities, and relationships with lessors,
licensors, suppliers, customers, employees and independent contractors.

5.2 Operation of Business Prior to Closing. The Stockholders covenant and agree
that, except as otherwise expressly provided by this Agreement or as set forth in Schedule 5.2
hereto, they will not after the date hereof, without the prior consent of Buyer (which will not be
unreasonably withheld or delayed), cause or permit the Company or any of its Subsidiaries to do
any of the following between the date hereof and the earlier of the Termination Date and the
Closing:

(a) amend its Organizational Documents;

(b) other than Contracts (i) to be entered into by the Company and its
Subsidiaries with customers for the sale of products and services in the Ordinary Course
of Business, or (ii) that provide for aggregate expenditures less than or equal to $_ __
per year, enter into any new Contract that would be a Material Contract if entered into on
or prior to the date hereof;

(c) except as required by its terms, terminate or materially amend or modify

any Material Contract or materially default (or take or omit to take any action that, with
or without the giving of notice or passage oftime, would constitute a material default) in
any of its rights or obligations under any such Contract or take any action that would
jeopardize the continuance of its business relationships;

(d) terminate, amend or fail to renew, maintain or preserve (i) any existing
insurance coverage, (ii) Permit or (iii) Company Registered Intellectual Property;

(e) make any loan, guaranty or other extension of credit, or enter into any
commitment to make any loan, guaranty or other extension of credit, to or for the direct
or indirect benefit of, or enter into any other agreement, arrangement or transaction
(whether in writing or otherwise) with any Related Person (other than pursuant to Plans
disclosed on Section 4.17 of the Company Disclosure Letter and routine travel and
business expense advances in the Ordinary Course of Business to Related Persons that
are Current Employees);

(f) sell, license, transfer, mortgage, encumber or otherwise dispose of any

assets, rights or properties, or any liabilities other than (i) sales of products and services
by the Company and non-exclusive licensing of Company Intellectual Property to
customers in the Ordinary Course of Business or (ii) dispositions of unused and obsolete

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 equipment in immaterial amounts (and in no case sell, transfer, mortgage, encumber or
otherwise dispose of, or grant any exclusive license with respect to any Company
Intellectual Property);

(g) declare, issue, make or pay any dividend or other distribution or

guaranteed payments of assets, rights or properties, whether consisting of money, other
personal property, real property, Intellectual Property, or other thing of value or redeem
or otherwise acquire any of its Capital Stock;

(h) make any loan, advance or capital contribution to, or investment in, any
Person;

(i) make or revoke any Tax election, file any amendment to a Tax Return,
settle any Tax Claim or take any position on any Tax Return inconsistent with prior
reporting practices or that could have an adverse effect on Taxes with respect to any
taxable period ending after the Closing Date;

(j) make any change in any method or period of accounting or in any

accounting policy, practice or procedure, except as may be required by GAAP
consistently applied or by applicable Law;

(k) issue any Capital Stock;

(1) (A) increase the compensation or fringe benefits to any Company

Employee (except for (i) increases in salary or hourly wage rates of employees (other
than any Related Persons) in the Ordinary Course of Business or (ii) the payment of
accrued or earned but unpaid bonuses pursuant to any Plan); (B) grant any new severance
or termination pay to any Company Employee; (C) enter into any written employment,
deferred compensation, consulting or other similar agreement (or any amendment to any
such existing agreement) with any Company Employee (other than employment
agreements and consulting agreements in the Ordinary Course of Business in the forms of
such agreements previously made available to Buyer); (D) grant any equity or equity-
based awards or profit participation to any Company Employee or stockholder of the
Company; or (E) establish, adopt, amend or terminate in any respect any Plan or any
agreement, program, policy, trust, fund or other arrangement that would be a Plan if it
were in existence as of the date hereof;

(m) incur or assume any obligation for borrowed money or guarantee any such
Liabilities or obligation;

(n) discharge or otherwise obtain the release of any Encumbrance or payor

otherwise discharge any Liability, other than current Liabilities incurred in the Ordinary
Course of Business;

(0) create or incur any Encumbrance (other than Permitted Encumbrances) on

any asset or properties (whether tangible or intangible) of the Company or any of its
Subsidiaries;

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 (p) make capital expenditures, capital additions or capital improvements in
excess of $ individually (including any related expenditures, additions and
improvements) or $ in the aggregate;

(q) commence a lawsuit, other than (i) for the routine collection of bills, (ii) in
such cases where it in good faith determines that failure to commence suit would result in
the material impairment of a valuable aspect of its business or result in a loss of rights of
substantial value, provided that it consults with Buyer prior to the filing of such a suit, or
(iii) for a breach of this Agreement;

(r) acquire or agree to acquire by merging or consolidating with, or by

purchasing a substantial portion of the stock or assets of, or by any other manner, any
business or any corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets that are material,
individually or in the aggregate, to the business of the Company and its Subsidiaries,
taken as a whole;

(s) revalue any of its assets, including writing down the value of inventory or
writing off notes or accounts receivable other than in the Ordinary Course of Business;

(t) change or modify in any material respect its existing credit, collection and
payment policies, procedures and practices (including any acceleration in the collection
of receivables or delay in the payment of pay abies); or

(u) agree to or make any commitment, whether in writing or otherwise, to take

any actions prohibited by this Section 5.2.

5.3 Filings; Reasonable Best Efforts; Notices.

(a) Each of the Buyer Parties and the Stockholders shall coordinate and
cooperate with one another and shall each use its reasonable best efforts to comply with,
and shall each refrain from taking any action that would impede compliance with, all
Laws in connection with the Transaction, and, as promptly as practicable after the date
hereof, each of the Buyer Parties and the Stockholders shall make (or cause to be made)
all filings, notices, petitions, statements, registrations, submissions of information,
application or submission of other documents required by any Governmental Body in
connection with the Transaction, including any filings necessary to satisfy Section 6.1 (a).
Each of the Buyer Parties and the Stockholders will cause all documents that it is
responsible for filing with any Governmental Body to comply in all material respects
with all applicable Laws and will promptly supply the other with any information that
may reasonably be required in order to effectuate any such filings or any amendment or
supplement thereto.

(b) Each of the Parties agrees to use its or his reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things reasonably necessary, proper or advisable to
consummate and make effective, in the most expeditious manner reasonably practicable,
the Transaction, including using its commercially reasonable efforts to accomplish the

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 following: (i) the taking of all reasonable acts necessary to cause the conditions
precedent set forth in Article 6 to be satisfied, (ii) the obtaining of all necessary Consents
and Orders from Governmental Bodies and the making of all necessary registrations,
declarations and filings and the taking of all reasonable steps as may be necessary to
avoid any Action by any Governmental Body, (iii) the obtaining of all necessary
Consents from third parties (including those identified in the Company Disclosure Letter),
provided, however, that no party shall be obligated to pay any consideration to any third
party from whom Consent is requested and neither of the Company or any of its
Subsidiaries shall make any such payment or enter into any amendment or modification
to any Contract in connection with obtaining any such Consent that is adverse in any
material respect to either of the Buyer Parties, the Company or any of its Subsidiaries, in
each case, without the prior written consent of Buyer (such consent not to be
unreasonably withheld, (iv) the defending of any Actions challenging this Agreement or
the consummation of the transactions contemplated hereby, and (v) the execution or
delivery of any additional instruments reasonably necessary to consummate the
transactions contemplated hereby, and to carry out fully the purposes of this Agreement.

(c) Each of the Buyer Parties and the Stockholders will notify the other
promptly upon the receipt of (i) any comments from any officials of any Governmental
Body in connection with any filings made pursuant hereto, (ii) any request by any
officials of any Governmental Body for amendments or supplements to any filings made
pursuant to, or information provided to comply in all material respects with, any Law,
(iii) any Action pending or, to its Knowledge, Threatened against such Party which
challenges the Transaction and (iv) any notice or other communication from any Person
alleging that the Consent of, or a payment to, such Person is or may be required in
connection with the Transaction.

(d) Each Stockholder shall give prompt notice to Buyer of any representation
or warranty made by it contained in this Agreement becoming untrue or inaccurate, or
any failure of such Stockholder to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under this
Agreement, in each case, such that the conditions set forth in Section 6.1 and Section 6.2
would not be satisfied; provided. however, that the delivery of any notice pursuant to this
Section 5.3(d) will not limit or otherwise affect the remedies available hereunder to the
Buyer Parties or the representations, warranties or covenants of such Stockholder or the
conditions to the obligations of the Buyer Parties.

(e) Each of the Buyer Parties shall give prompt notice to the Stockholders of
any representation or warranty made by it contained in this Agreement becoming untrue
or inaccurate, or any failure of the Buyer Parties to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by it under
this Agreement, in each case, such that the conditions set forth in Section 6.1 or 6.3
would not be satisfied; provided. however, that the delivery of any notice pursuant to this
Section 5.3(e) will not limit or otherwise affect the remedies available hereunder to the
Stockholders or the representations, warranties or covenants of the Buyer Parties or the
conditions to the obligations of the Stockholders.

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 5.4 Buyer Access. The Stockholders will permit (or cause to be permitted) the Buyer
Parties and their representatives to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company and its Subsidiaries, to all
premises, properties, personnel, books, records, Contracts, and documents pertaining to the
Company and its Subsidiaries and will furnish copies of all such books, records, Contracts and
documents and all financial, operating and other data, and other information as the Buyer Parties
may reasonably request; provided, however, that no investigation pursuant to this Section 5.4
will affect any representations or warranties made herein or the conditions to the Parties'
obligations to consummate the Transaction.

5.5 Exclusivity. Prior to the Termination Date, each of the Stockholders will not (and
will cause the Company and its Subsidiaries, Affiliates and representatives to not) directly or
indirectly, solicit, initiate or participate in any negotiations regarding, or take any action to
facilitate, any disposition of shares of Capital Stock or the assets of the Company or any of its
Subsidiaries, other than (i) the Transaction, (ii) any disposition of unused and obsolete
equipment in immaterial amounts, (iii) the sale of its products and services in the Ordinary
Course of Business or (iv) any transfers of shares of Company Common Stock by a Stockholder
to a trust or custodianship the beneficiaries of which may include only the Stockholder, his or her
spouse and his or her lineal descendants (including children by adoption and step children);
provided, however, that as a condition to such transfer, such trust or custodianship must become
a party to this Agreement as a Stockholder as well as the Stockholders Agreement.

5.6 Tax Matters.

(a) The Stockholder Representative shall prepare or cause to be prepared and

the Company shall file or cause to be filed all income Tax Returns for taxable periods
ending on or prior to the Closing Date for the Company and each of its Subsidiaries that
are filed after the closing consistent with Section 5.6(e). Parent shall prepare or cause to
be prepared and file or cause to be filed all other Tax Returns for taxable periods ending
on or prior to the Closing Date for the Company and each of its Subsidiaries that are filed
after the Closing Date. Stockholder Representative shall (i) provide each of such income
Tax Returns for taxable periods ending on or prior to the Closing Date to Parent no later
than thirty (30) days prior to the due date for filing such Tax Returns, (ii) permit Parent to
review and comment on each such Tax Return and (iii) make such revisions to such Tax
Returns as are reasonably requested by Parent to the extent such revisions are consistent
with past practice of the Company and its Subsidiaries and in accordance with applicable
Law.

(b) In the case of a Third Party Claim that, if successful, could result in an
indemnity payment to any Indemnified Party pursuant to Section 8.2 hereof, the
Indemnified Party shall notify the Indemnifying Party promptly of such (a "Tax
Claim"). With respect to any Tax Claim relating to any tax period ending on or before
the Closing Date, the Stockholder Representative shall, on behalf of the Company or any
Subsidiary, have the right, at its own expense, to assume the defense, control and
settlement of any Tax Claim, unless such settlement could have an adverse tax
consequence to the Company or Parent, in which case, the Stockholder Representative
shall not settle any proceeding without Parent's prior written consent, which consent shall

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 not be unreasonably delayed or withheld. In the case of a Tax Claim relating to a
Straddle Period (as defined below), Parent shall control the defense and settlement of any
such Tax Claim, but will not settle any proceeding without the Stockholder
Representative's prior written consent, which consent shall not be unreasonably delayed
or withheld.

(c) Each of the Stockholder Representative and the Buyer shall reasonably
cooperate, and shall cause its controlled 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 (including all Tax depreciation records, whether in written or
electronic form) and in resolving all disputes and audits or defending any claim or
assessment with respect to all taxable periods relating to Taxes.

(d) All transfer, documentary, sales, use, registration and other such Taxes
(including all applicable real estate transfer or gains Taxes) and related fees (including
any penalties, interest and additions to Tax) incurred in connection with this Agreement
and the Transaction shall be the joint responsibility of the Stockholders (pro rata in
accordance with each Stockholder's respective percentage ownership of the Company
Common Stock immediately prior to the Closing).

(e) At Buyer's option, the Company and the Stockholders shall join with
Buyer in making an election under Section 338(h)(1O) of the Code (and any
corresponding election under Law) with respect to the purchase and sale of the shares of
Company Common Stock hereunder (the "Section 338(h)(10) Election"). In the event
Buyer does not request that the Stockholders join in making the Section 338(h)(l0)
Election, the remainder of the provisions ofthis Section 5.6(e) shall not apply. In the
case that a Section 338(h)(l0) Election is made, Buyer and the Stockholder
Representative shall endeavor in good faith to agree within sixty (60) days after the
Closing Date, on an allocation of the Consideration and the liabilities of the Company in
a manner consistent with section 338 and 1060 of the Code and the regulations
thereunder (the "Purchase Price Allocation"). If the Buyer and the Stockholder
Representative are unable to agree on such Purchase Price Allocation within such time
period, the matter shall be submitted to the Accounting Firm, whose determination shall
be binding on the parties. The costs of the Accounting Firm shall be shared equally by
the Buyer, on the one hand, and the Stockholders, on the other hand. For the purpose of
making the Section 338(h)(l0) Election, Stockholders and the Buyer each shall execute
two copies ofInternal Revenue Service Form 8023 (or successor form) at least 30 days
prior to the date such Section 338(h)(l 0) Election is required to be filed. The
Stockholders and the Buyer shall file, and shall cause their controlled Affiliates to file, all
Tax Returns (including Form 8883) in a manner consistent with the Purchase Price
Allocation, the Section 338(h)(l0) Election and any valuations set forth therein and shall
take no position contrary thereto unless required to do so by applicable tax laws. To the
extent permitted by Law, the principles and procedures of this Section 5.6(e) shall also
apply with respect to a Section 338(h)(l0) Election or equivalent or comparable provision
under Law.

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 (t) Neither the Company, any Subsidiary nor any Stockholder shall revoke,
prior to the Closing, the Company's election to be taxed as an S corporation or any
Subsidiary's election to be taxed as a qualified subchapter S subsidiary within the
meaning of sections 1361 and 1362 of the Code. Neither the Company, any Subsidiary
nor any Stockholder shall take any action prior to the Closing that would result in the
termination of the Company's status as a validly electing S corporation or any
Subsidiary's election to be taxed as a qualified subchapter S subsidiary within the
meaning of sections 1361 and 1362 of the Code.

(g) In the case of any taxable period that includes (but does not end on) the
Closing Date (a "Straddle Period"):

(i) any Tax based on or measured by net income or gain, the portion
of such Tax which is payable (or credit or refund thereot) for the portion of such
taxable period ending on the Closing Date shall be the amount which would be
payable (or credited or refunded) if the relevant taxable period ended on the
Closing Date; and

(ii) any Taxes other than Taxes based on or measured by net income or
gain that is payable (or credit or refund thereot) for the portion of such taxable
period ending on the Closing Date shall be the amount of such Tax for the entire
taxable period multiplied by a fraction, the numerator of which is the number of
days in the portion of the taxable period ending on the Closing Date and the
denominator of which is the number of days in the whole taxable period.

(h) The Stockholders shall use their reasonable best efforts to determine the
Section 1374 Amount no later than five (5) Business Days prior to the Closing. On the
Closing Date, the Buyer shall cause the Company to pay the Section 1374 Tax Amount
set forth in the Pre-Closing Certificate to the relevant Tax authority

5.7 Noncompetition Agreement Related to the Acquisition of Goodwill. In

consideration for the Transaction, each of the Stockholders hereby covenants and agrees to the
following:

(a) Noncompetition Covenants. Each of the Stockholders agrees that for the
Restrictive Term such Stockholder will not, without the prior written consent of the
Buyer, which consent may be withheld in its sole and absolute discretion, directly or
indirectly, either alone or in association or in connection with or on behalf of any Person
now existing or hereafter created: (i) be or become engaged in, directly or indirectly,
with any Competitive Activity (as defined below), including being or becoming an
investor, lender, partner, joint venturer, stockholder (except as provided in Section 5.7(c)
below), officer, director, employee, manager, independent sales representative, consultant
or supplier with respect to any Competitive Activity; (ii) give information or financial
assistance to, or make any investment in, any Competitive Activity; or (iii) use or
authorize the use of his name or any part thereof to be used or employed in connection
with any Competitive Activity (collectively and severally, the "Noncompetition
Covenants"). For purposes of this Agreement, "Competitive Activity" is the business of

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 creating, developing, selling, licensing, marketing, distributing, implementing,
maintaining or servicing in (x) or (y) any product or service that,
directly or indirectly, is competitive with the products and services currently offered by,
or currently anticipated to be offered in the future by, the Company and its Subsidiaries.

(b) Antisolicitation.

(i) Each of the Stockholders agrees that for the Restrictive Term such
Stockholder will not, directly or indirectly, without the consent of Buyer, solicit
for hire or hire, or solicit for hire or hire on behalf of any third party, any
individual who is or has been a management employee of the Company or any of
its present or future Subsidiaries, including any of the individuals set forth on
Schedule 5.7 (each, a "Management Employee"), unless and until such
Management Employee has not been an employee of any of the Parent, the
Company and their respective Subsidiaries for at least twelve (12) months.

(ii) Each of the Stockholders agrees that for the Restrictive Term such
Stockholder will not, directly or indirectly, without the consent of Buyer, solicit
for hire or hire, or solicit for hire or hire on behalf of any third party, any
individual who is or has been an employee (other than a Management Employee)
of the Company or any of its present or future Subsidiaries ("Non-Management
Employee") unless and until such Non-Management Employee has not been an
employee of any of the Parent, the Company and their respective Subsidiaries for
at least six (6) months.

(c) Exception. Nothing in this Section 5.7 will prevent the any of the
Stockholders from (i) owning a less than 5% interest in any publicly traded company that
is a Competitive Activity or (ii) serving as an employee or consultant of any of the Buyer
Parties or any of their present or future Subsidiaries (including the Company and its
Subsidiaries).

(d) Separate Covenants. The Noncompetition Covenants will be construed to

be divided into separate and distinct Noncompetition Covenants with respect to (i) each
jurisdiction of the territory covered by the Noncompetition Covenants and (ii) each
matter or type of conduct described therein. Each such divided Noncompetition
Covenant will be separate and distinct from all such other Noncompetition Covenants
with respect to the same or any aspect of the business of the Company and its
Subsidiaries.

(e) Independence of Obligations. The covenants and obligations of the

Stockholders set forth in this Section 5.7 shall be construed as independent of any other
agreement or arrangement (other than this Agreement) between any Stockholder, on the
one hand, and the Buyer Parties, on the other hand.

(f) Acknowledgements of Stockholders. Each Stockholder acknowledges that

the promises and restrictive covenants that such Stockholder is providing in this
Agreement are reasonable and necessary to the protection of the business to be acquired

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 by Buyer pursuant to this Agreement and Buyer's legitimate interests in the Transaction
(including the Company's goodwill). Each Stockholder acknowledges that, in connection
with the consummation of the Transaction, all of such Stockholder's Capital Stock in the
Company will be purchased by Buyer. Each Stockholder further acknowledges that such
Stockholder sold all of such Stockholder's Capital Stock in the Company in connection
with the Transaction and that goodwill was a material consideration in Buyer's decision
to enter into the Transaction. Each Stockholder acknowledges that if such Stockholder
were to engage in a Competitive Activity subsequent to the consummation of the
Transaction, such competition could materially and adversely affect the value of the
business acquired by Buyer in the Transaction (including the Company's goodwill).

(g) Judicial Limitation. Notwithstanding the foregoing provisions of this

Section 5.7, if at any time a court of competent jurisdiction holds that any portion of any
Noncompetition Covenant is unenforceable by reason of its extending for too great of a
period of time or over too great of a geographical area or by reason of its being too
extensive in any other respect, such Noncompetition Covenant will be interpreted to
extend only over the maximum period of time, maximum geographical area, or maximum
extent in all other respects, as the case may be, as to which it may be enforceable all as
determined by such court in such action.

(h) Specific Performance. Each Stockholder hereby agrees that in the event of
any breach or Threatened breach by such Stockholder of any covenant, obligation or
other provision contained in this Section 5.7, Buyer shall be entitled (in addition to any
other remedy that may be available to it) to the extent permitted by applicable Law to (a)
a decree or Order of specific performance to enforce the observance and performance of
such covenant, obligation or other provision and (b) an injunction restraining such breach
or Threatened breach.

5.8 Nondisclosure.

(a) The Parties acknowledge that Buyer and the Company previously
executed the Confidentiality Agreement, which will continue in full force and effect in
accordance with its terms, and each of Buyer and the Stockholders agrees that it will hold,
and will cause its respective directors, officers, employees, agents and advisors (including
attorneys, accountants, consultants, bankers and financial advisors) to hold, any
information regarding the other Parties, the existence of this Agreement or any of the
terms and conditions of this Agreement, any other related agreement, the Transaction or
any other transaction contemplated hereby confidential in accordance with the terms of
the Confidentiality Agreement; provided, however that Parent and Buyer may disclose
the existence of this Agreement, the terms set forth herein and Confidential Information
(as defined in the Confidentiality Agreement) with respect to the Company to the
following Persons to the extent they are subject to an obligation to keep all of such
information confidential: (i) in connection with the Financing, ratings agencies and the
Buyer Parties' potential and prospective lenders, participants and assignees and their
respective representatives and advisors and (ii) Parent's stockholders.

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 (b) Each of the Stockholders agrees, and agrees to cause its representatives to
keep confidential after the Closing all nonpublic information in their possession
regarding the Company and its Subsidiaries and their respective businesses; provided,
however that the Stockholders and their representatives will not be required to maintain
as confidential any information that (i) becomes generally available to the public other
than as a result of disclosure (A) by such Stockholder or (B) to the Knowledge of such
Stockholder, by any other Person in violation of a duty to confidentiality between such
Person and the Company or any of its Subsidiaries, or (ii) is required to be disclosed
pursuant to the terms of a valid subpoena or Order or other requirement of Law, and prior
to such required disclosure, the disclosing party provides reasonable advance notice to
Buyer and reasonable assistance in obtaining confidential treatment of such information
to the extent possible.

(c) At the Closing, the Stockholders shall assign to the Company, to the extent
assignable, its rights under any confidentiality agreements between the Stockholders and
Persons other than the Buyer Parties or their Affiliates that were entered into in
connection with, or relating to, a possible sale of the Company, any of its Subsidiaries or
any of their respective businesses or assets, including, to the extent assignable, the right
to enforce all terms of such confidentiality agreements; provided, however that to the
extent such confidentiality agreements are not assignable, each of the Stockholders, at the
request of Buyer, agrees to take such action as may be reasonably necessary to enforce its
rights thereunder for the benefit of Buyer, at Buyer's cost and expense. At the Closing,
the Stockholders shall deliver to the Buyer Parties executed copies of all such
confidentiality agreements to the extent available and permitted under such agreements.
In addition, the Stockholders will immediately require the return or destruction of all
nonpublic information provided by such Stockholders, the Company, its Subsidiaries or
their representatives that is subject to such confidentiality agreements, other than by the
Buyer Parties.

5.9 Public Announcements. The Parties shall consult with each other before issuing
any press releases or otherwise making any public statements with respect to this Agreement or
the transactions contemplated hereby, and no Party shall issue any press release or make any
public statement identifying the Buyer Parties, the Company or any of the Stockholders prior to
obtaining such Party's prior written approval. For the avoidance of doubt, the Parties intend that
no public disclosure of the Transaction will be made prior to the Closing Date.

5.10 Employee Benefit Plans.

(a) Buyer agrees that all persons who were employed by the Company and its
Subsidiaries immediately preceding the Closing ("Current Employees"), will remain
employed in a comparable position on and immediately after the Closing, at not less than
the same rate of pay. Buyer agrees to provide Current Employees who subsequently
become employees of the Buyer and its Subsidiaries ("Continuing Employees") with
employee benefits that, in the aggregate, are substantially similar to the employee
benefits provided (excluding equity compensation arrangements) by Buyer to its own
similarly situated employees. Each Continuing Employee shall, to the extent permitted
by applicable Law, receive full credit for purposes of eligibility to participate, vesting and

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 benefit entitlement under the plans in which such Continuing Employee participate (other
than with respect to the vesting of equity compensation awards granted by Buyer after the
Closing, if any) for such Continuing Employee's service with the Company or any of its
Subsidiaries immediately prior to the Closing to the extent such service was taken into
account under the applicable Plan, except where such service credit would result in
duplication of benefits. With respect to any welfare benefit plans maintained by Buyer
for the benefit of Continuing Employees, subject to any applicable plan provisions,
contractual requirements or applicable Law, Buyer shall: (A) cause to be waived, as
required by applicable Law, any eligibility requirements or pre-existing condition
limitations; and (B) give effect, in determining any deductible maximum out-of-pocket
limitations, to amounts paid by such Continuing Employees under comparable plans
during the plan year in which the Closing occurs.

(b) Unless otherwise notified in writing by Buyer, the Company shall take (or
cause to be taken) all actions necessary or appropriate to terminate, effective not later
than the date immediately preceding the Closing Date, any Plan that contains a cash or
deferred arrangement intended to qualify under Section 401(k) of the Code (the
"Company 401(k) Plans") (which shall be subject to Parent's reasonable review and
approval) in accordance with their terms and applicable Law. In furtherance of the
foregoing, the Company's board of directors shall adopt resolutions authorizing the
termination of the Company 401(k) Plans effective no later than the day immediately
preceding the Closing Date and the Company shall provide Parent with evidence that
such Company 40 1(k) Plans have been terminated in accordance with such resolutions.

(c) The Parties acknowledge and agree that all provisions contained in this
Section 5.10 are included for the sole benefit of the Parties and shall not create any right
(i) in any other Person, including any Company Employees, any participant in any Plan
or any beneficiary thereof or (ii) to continued employment with the Buyer Parties, the
Company or any of their respective Subsidiaries. After the Closing, except as expressly
required by Section 5.10(a), nothing contained in this Agreement shall interfere with the
Buyer Parties' rights to amend, modify or terminate any Plan or any employee benefit
plan, agreement, program, policy or other arrangement currently maintained by the Buyer
Parties, the Company or any of their respective Subsidiaries or to terminate the
employment of any employee of the Buyer Parties, the Company or any of their
respective Subsidiaries for any reason.

5.11 Employee Bonuses.

(a) Buyer shall make available an amount equal to $ (the "_ _

Bonus Pool") to fund payment of cash bonuses to Continuing Employees and other
employees of the Business ("Eligible Employees") based on the performance of the
Business during _ _ and other factors or, to the extent not earned by Eligible Employees,
payment to the Stockholders, in each case as determined pursuant to this Section 5.1 1(a).
The determination of the Eligible Employees, the allocation of the _ _ Bonus Pool
among the Eligible Employees, the conditions required to receive payments from the
_ _ Bonus Pool (each, a " Bonus Payment") and the determination regarding
whether such conditions have been satisfied by Eligible Employees shall be determined

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 by and . If either of or is no longer an employee of the
Company, then the remaining employee shall make the determination. If neither of them
remains an employee, then the senior executive responsible for the Business shall make
such determination. All such determinations shall be made in a manner consistent with
the past practices of the Company prior to the date hereof with respect to the payment of
cash bonuses to Company Employees (excluding bonus payments to Company
Employees that are Related Persons that are not in the nature of sales commissions or
similar performance-based incentives) and shall be subject to the consent of Buyer
(which will not be unreasonably withheld or delayed). Subject to Section 5.l1(c), in the
event that an Eligible Employee does not satisfy all of the conditions to receipt of the
entire amount of a __ Bonus Payment, then on the date on which such _ Bonus
Payment (or portion thereof) would have been paid to such Eligible Employee if such
Eligible Employee had satisfied all of such conditions, such forfeited __ Bonus
Payment (or portion thereof) shall be paid to the Stockholders, with each Stockholder
receiving a portion of such forfeited _ _ Bonus Payment (or portion thereof) equal to
the product of such Stockholder's Pro Rata Share multiplied by such forfeited _ _
Bonus Payment (or portion thereof). In no event shall the aggregate amounts paid to the
Stockholders pursuant to this Section 5.1l(a) exceed $_ _ __

(b) Promptly after the Closing (or such later date as the allocation of the
Transition Bonuses shall be finalized pursuant to this Section 5.11 (b)), the Company shall
deliver to each of the Continuing Employees a letter in the form attached hereto as
Exhibit E (the "Employee Bonus Letter"), pursuant to which each such Continuing
Employee shall be eligible to receive, upon the terms and subject to the vesting and other
conditions set forth in the Employee Bonus Letter, an allocated portion of $ of
__ bonus payments and $ of __ bonus payments (the "Transition Bonus
Pool"). As promptly as reasonably practicable following the date hereof and in any
event no later than ten (10) Business Days prior to the Closing Date, and
___ shall deliver to Buyer a proposed allocation of the Transition Bonus Pool among
the Continuing Employees, which shall: (i) be made based on past and anticipated future
contributions of such Continuing Employees to the growth of the Business as a whole and
(ii) not include any allocations to Company Employees that are Related Persons other
than those allocations, if any, consistent with their position in the Company and the
criteria included in (i). Subsequent to such delivery, the final allocation of the Transition
Bonus Pool among the Continuing Employees shall be subject to the prior written
consent of Buyer, which will not be unreasonably withheld or delayed. After delivery of
the Employee Bonus Letters, none of the Stockholders in any capacity (including as
officers of the Company, if applicable) shall make any modifications to, or waive any
conditions to payment set forth in any Employee Bonus Letter, without the prior written
consent of the Chief Executive Officer of Buyer (which consent may be granted or
withheld in Buyer's sole discretion).

(c) Subject to Section 5.11(d), in the event that a Continuing Employee does
not satisfy all of the conditions to receipt of any payment pursuant to his or her Employee
Bonus Letter (a "Transition Bonus Payment"), then on the date on which such Transition
Bonus Payment would have been paid to such Continuing Employee if such Continuing
Employee had satisfied all of such conditions, such forfeited Transition Bonus Payment

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 shall be paid to the Stockholders, with each Stockholder receiving a portion of such
forfeited Transition Bonus Payment equal to the product of such Stockholder's Pro Rata
Share multiplied by such forfeited Transition Bonus Payment; provided, however, that in
no event shall the aggregate amounts paid to the Stockholders pursuant to Sections
5.1 1(a) and ® exceed $_ __

(d) Any payments to the Stockholders pursuant to this Section 5.11 shall be
delivered by check to the Stockholder Representative, and the Stockholder
Representative will be responsible for the subsequent delivery of such payments to the
other Stockholders. To the extent permitted by Law, any such additional payment
received by the Stockholders will be treated as an adjustment to the Consideration
received by the Stockholders.

(e) The Company shall submit to its stockholders for approval by such
stockholders any payment in the nature of compensation, or any other benefit, payable as
a result of the Transaction (whether alone or in connection with any subsequent event(s)),
including the _ _ Bonus Payments and the Transition Bonus Payments, that would
otherwise be an "excess parachute payment" under Section 280G of the Code if paid, but
for such approval of the payments or benefits by the stockholders of the Company,
respectively, in accordance with the terms of Section 280G(b)( 5) of the Code ("Covered
Payments"). The process of submitting such Covered Payments for stockholder approval
shall be conducted in the time and manner required by Section 280G(b)(5) of the Code
and the regulations promulgated thereunder, which requires, among other things, that the
Company comply with the following requirements: (i) prior to conducting such vote, the
Company shall adequately disclose all material facts concerning the Covered Payments to
its stockholders entitled to vote by providing such stockholders with an information
statement in a form approved in writing in advance by Parent; (ii) such vote shall
determine the right of the person to receive such Covered Payments; (iii) such vote shall
be conducted in compliance with the normal voting rules of the Company, except as
otherwise required by the Code; and (iv) the Covered Payments must be approved by the
stockholders of the Company in a separate vote. Prior to the Closing Date, the Company
shall deliver to Buyer evidence reasonably satisfactory to Buyer (i) that a stockholder
vote was solicited with respect to the Covered Payments in conformance with Section
280G and the regulations promulgated thereunder and the requisite stockholder approval
was obtained (the "280G Approval"), or (ii) that the 280G Approval was not obtained
and, as a consequence, such Covered Payments shall not be made or provided.

5.12 Indemnification.

(a) During the period ending six years after the Closing Date, any provisions
of the Organizational Documents of the Company and each of its Subsidiaries concerning
the elimination of liability and indemnification of directors, managers and officers shall
not be amended or modified in any manner that would adversely affect the rights
thereunder of any Person that is as of the date hereof a current or former officer or
director of the Company or any of its Subsidiaries. From and after the Closing Date until
the sixth anniversary of the Closing Date, the Buyer Parties shall cause the Company and
each of its Subsidiaries to, (i) indemnify and hold harmless each present and former

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 director and officer of the Company and each present and former director and officer of
each the Company's Subsidiaries (collectively, the "D&O Indemnified Parties"), against
any Damages incurred or suffered by any of the D&O Indemnified Parties in their
capacity as a director or officer of the Company or any of the Company's Subsidiaries in
connection with any Action arising out of or pertaining to matters existing or occurring at
or prior to the Closing Date, whether asserted or claimed prior to, at or after the Closing
Date, to the fullest extent permitted under applicable Law and (ii) advance expenses as
incurred by any D&O Indemnified Party in connection with any matters for which such
D&O Indemnified Party is entitled to indemnification from Buyer, the Company or a
Subsidiary, as applicable, pursuant to this Section 5.12 to the fullest extent permitted
under applicable Law. Nothing in this Agreement is intended to, shall be construed to or
shall release, waive or impair any rights to directors' and officers' insurance claims under
any policy that is or has been in existence with respect to the Company, any of its
Subsidiaries or any of their respective directors or officers, it being understood and
agreed that the indemnification provided for in this Section 5.12 is not prior to or in
substitution for any such claims under such policies.

(b) The provisions of this Section 5.12 are (i) intended to be for the benefit of,
and shall be Enforceable by, each Person released or entitled to indemnification
hereunder, and each such Person's heirs, representatives, successors or assigns, it being
expressly agreed that such Persons shall be third party beneficiaries of this Section 5.12,
and (ii) in addition to, and not in substitution for, any other right to indemnification or
contribution that any such Person may have by contract or otherwise.

5.13 Working Capital. The Company shall cause the Working Capital of the Company
and the Company Subsidiaries immediately prior to the Closing to be no less than $_ __

5.14 Financing.

(a) Buyer shall use its commercially reasonable efforts to obtain the Financing
pursuant to the terms set forth in the Commitment Letter. Buyer agrees that it will not,
without the Stockholder Representative's prior consent, agree to amend the Commitment
Letter in any manner that could adversely affect Buyer's ability to complete the
Transaction in accordance with the terms hereof.

(b) Buyer shall provide prompt notice to the Stockholders of the Banks'
refusal or stated intent to refuse to provide the Financing described in the Commitment
Letter.

(c) The Company shall provide, and shall cause its Subsidiaries and the
officers, employees, accountants and advisers of the Company and its Subsidiaries to
provide, such cooperation as is reasonably necessary in connection with the arrangement
of the Financing, including (i) participation in meetings, due diligence sessions, ratings
agency presentations and road shows, (ii) the preparation of bank books, offering
memoranda and similar informational and marketing documents, (iii) the preparation and
delivery to Buyer of unaudited monthly financial statements no later than 30 days after
the completion of each month, (iv) the preparation of other unaudited financial statements,

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 pro forma financial statements and other information for inclusion with the documents
described in clause (ii) hereto, (v) the pledging of assets of the Company and its
Subsidiaries in connection with the Financing and (vi) satisfaction of all conditions
applicable to Buyer set forth in the Commitment Letter, which, in the case of clauses (ii)
and (iv), such documents, in their final forms, shall be shared with the Company, without
regard to whether the Company's assistance for the preparation thereof was required.

(d) The Company shall cause all intercompany indebtedness and all
Indebtedness of the Company and its Subsidiaries to be settled or otherwise terminated
simultaneously with the Closing with funds to be provided by the Financing and shall
cause the assets of the Company and its Subsidiaries to be released from any
Encumbrances securing such Indebtedness, and, in respect of Indebtedness, the Company
shall provide to Buyer evidence of the foregoing release and repayment in a form
reasonably satisfactory to Parent at or prior to the Closing.

5.15 Termination of Affiliate Arrangements. Other than with respect to the Plans set
forth on Section 4.17 of the Company Disclosure Letter, prior to the Closing, the Company shall,
and shall cause the counterparties thereto, to terminate all Contracts and other arrangements with
all Stockholders and Affiliates of the Company and its Subsidiaries (including the Contracts set
forth on Section 5.15(a) of the Company Disclosure Letter), without any monetary or other
liability or obligation having been incurred or satisfied by the Company or any Subsidiary under
such Contracts or other arrangements on or after the date hereof.

5.16 Release.

(a) Each of the Stockholders (each, a "Releasor") hereby releases and forever
discharges the Company and each of the other Releasors and each of their respective
Subsidiaries and Affiliates, whether direct or indirect, their present and former directors,
officers, employees, members and shareholders and the respective successors, agents and
assigns of any of the foregoing (the "Releasees") from any and all obligations liabilities,
damages, costs, claims, complaints, charges or causes of action in law or equity that such
Releasor or his or her or its heirs, administrators, successors or assigns may now have or
may ever have against any of the Releasees, whether accrued, absolute, contingent,
unliquidated or otherwise, and whether known or unknown, and which have or may have
'; arisen out of any act or omission occurring prior to the Closing; provided, however that
the foregoing shall in no way modify or otherwise limit the rights of the Releasors under
this Agreement, the Stockholders' Agreement, the Employment Agreements or any Plan
pursuant to which such Person currently qualifies for and receives benefits; provided,
further, that the foregoing release shall be effective as of the Closing and only if the
Closing actually occurs.

(b) The Company hereby releases and forever discharges each Stockholder
from any and all obligations liabilities, damages, costs, claims, complaints, charges or
causes of action in law or equity that the Company may now have or may ever have
against any of the Stockholders in their capacities as stockholders, directors or officers of
the Company or any of its Subsidiaries, whether accrued, absolute, contingent,
unliquidated or otherwise, and whether known or unknown, and which have or may have

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 arisen out of any act or omission occurring prior to the Closing; provided, however that
the foregoing shall in no way modify or otherwise limit the rights of the Company under
this Agreement, the Stockholders' Agreement, the Employment Agreements or any Plan
pursuant to which such Person currently qualifies for and receives benefits; provided,
further, that the foregoing release shall be effective as of the Closing and only if the
Closing actually occurs.

(c) Each of the Releasors and the Company acknowledges and agrees that the
releases set forth in this Section 5.16 are not be construed in any way as an admission of
any liability whatsoever by any Releasee or Stockholder under any Law, any such
liability having been expressly denied.

5.17 Delivery of Records. If any Records of the Company or any of its Subsidiaries
are prior to the Closing Date located other than at the offices of the Company and its Subsidiaries
located at , the Stockholders shall deliver, or cause to be delivered, (a)
such Records to such offices of the Company at or prior to the Closing or (b) with respect to
Records located in off-site storage locations that are not residences of the Stockholders or any of
their family members or any Company Employees, control over access to such off-site storage
locations at or prior to the Closing. At or prior to the Closing, the Stockholders shall deliver, or
cause to be delivered, to Buyer the original stock certificate(s) representing all of the outstanding
or owned securities of the Subsidiaries of the Company.

ARTICLE 6

CLOSING CONDITIONS

6.1 Conditions Precedent to Obligations of Each Party. Each Party's obligation to

consummate the Transaction is subject to the satisfaction (or waiver by such Party) of each
condition precedent listed below.

(a) Regulatory Approvals. The relevant Parties shall have timely obtained
from each Governmental Body all other Consents, if any, necessary for the
consummation of or in connection with the transactions contemplated hereby.

(b) No Order or Adverse Litigation. There shall not be issued and in effect
any Order by a Governmental Body restraining or prohibiting the transactions
contemplated hereby.

(c) Escrow Agreement. The Escrow Agreement by and among the Escrow
Agent, the Company and the Stockholder Representative, in the form set forth as Exhibit
D to this Agreement together with such other modifications as shall be reasonably
satisfactory to the Company and the Stockholder Representative, shall have been entered
into.

6.2 Conditions Precedent to Obligation of the Buyer Parties. Each Buyer Party's
obligation to consummate the Transaction is subject to the satisfaction (or waiver by such Buyer
Party) of each condition precedent listed below.

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 (a) Accuracy of Representations and Warranties. Each representation and
warranty set forth in Sections 3.1 and in Article 4 shall have been true and correct in all
material respects (except the representations and warranties qualified by Material
Adverse Effect, materiality or any similar qualification shall be true and correct in all
respects) as of the date of this Agreement (or, to the extent such representations and
warranties speak as of an earlier date, as of such earlier date), and shall be true and
correct in all material respects (except the representations and warranties qualified by
Material Adverse Effect, materiality or any similar qualification shall be true and correct
in all respects) as of the Closing Date, as if made on the Closing Date (or, to the extent
such representations and warranties speak as of an earlier date, as of such earlier date).

(b) Compliance with Obligations. Each Stockholder shall have performed and
complied, in all material respects, with all of its or his or her covenants and obligations
required by this Agreement to be performed or complied with at or prior to Closing.

(c) Delivery of Certificates. The Buyer Parties shall have received (i) from
each of the Stockholders a certificate as of the Closing Date certifying as to the matters
set forth in Section 6.2(a) and Section 6.2(b) (each such certificate, a "Stockholders
Certificate") and (ii) from the chief executive officer and the president of the Company a
certificate as of the Closing Date certifying as to the Article 4 matters set forth in Section
6.2(a) (the "Company Officers Certificate").

(d) No Material Adverse Change. There shall not have occurred any changes,
effects, events, circumstances or conditions with respect to the Company that,
individually or in the aggregate, has resulted in, or would reasonably be expected to result
in, a Company Material Adverse Effect.

(e) Delivery of Stockholders' Agreement. Each of the Stockholders shall

have executed and delivered to Parent the Stockholders' Agreement.

(f) Financing. The conditions of the Financing set forth in the Commitment
Letter shall have been satisfied in full or waived, and such financing shall have been
provided or made available to Buyer substantially on the terms set forth in the
Commitment Letter.

(g) No Litigation. There shall not be any material Action pending against, or,
to the Knowledge of the Company, Threatened against the Company or any of its
Subsidiaries.

(h) Opinion of Counsel. Buyer shall have received the opinion of outside
counsel to the Company and the Stockholders in the form of Exhibit C.

6.3 Conditions Precedent to Obligation of Stockholders. The respective obligation of

each of the Stockholders to consummate the Transaction is subject to the satisfaction (or waiver
by such Stockholder) of each condition precedent listed below.

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 (a) Accuracy of Representations and Warranties. Each representation and
warranty set forth in Section 3.2 shall have been true and correct in all material respects
(except the representations and warranties qualified by Material Adverse Effect,
materiality or any similar qualification shall be true and correct in all respects) as of the
date of this Agreement (or, to the extent such representations and warranties speak as of
an earlier date, as of such earlier date), and shall be true and correct in all material
respects (except the representations and warranties qualified by Material Adverse Effect,
materiality or any similar qualification shall be true and correct in all respects) as of the
Closing Date, as if made on the Closing Date (or, to the extent such representations and
warranties speak as of an earlier date, as of such earlier date).

(b) Compliance with Obligations. Each of the Buyer Parties shall have
performed and complied, in all material respects, with all its covenants and obligations
required by this Agreement to be performed or complied with at or prior to Closing.

(c) Delivery of Certificate. Such Stockholder shall have received from the
chief executive officer and chief financial officer of the Buyer Parties a certificate as of
the Closing Date certifying as to the matters set forth in Section 6.3(a) and Section 6.3(b)
(the "Buyer Officers Certificate").

(d) Delivery of Stockholders' Agreement. Parent shall have executed and

delivered the Stockholders' Agreement to each Stockholder.

ARTICLE 7

TERMINA TION

7.1 Termination of Agreement. This Agreement may be terminated as to all Parties

as provided below:

(a) The Buyer or the Stockholder Representative may terminate this

Agreement by mutual written consent at any time prior to the Closing;

(b) The Buyer or the Stockholder Representative may terminate this

Agreement upon delivery of notice if (i) the Closing has not occurred prior to the
Expiration Date, provided, however that the right to terminate this Agreement pursuant to
this Section 7.1(b) shall not be available to any Party whose action or failure to take any
action required to fulfill any obligation under this Agreement shall have been the cause or,
or shall have resulted in, the failure of the Closing to occur by such date, or (ii) there shall
be any Law that makes consummation of the transactions contemplated hereby (or any
component thereof) illegal or otherwise prohibited or any Order enjoining the
consummation of the transactions contemplated hereby (or any component thereof) has
been entered, such Order has become final and nonappealable and, prior to such
termination, such terminating Party shall have used its commercial reasonably efforts to
resist, resolve or lift, as applicable, such Order;

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 (c) The Buyer Parties may terminate this Agreement by giving written notice
to the Stockholder Representative at any time prior to the Closing if any Stockholder has
breached any representation, warranty, covenant or agreement contained in this
Agreement such that the conditions set forth in Section 6.2(a) or Section 6.2(b), as
applicable, would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, and such breach has not been cured
(if capable of being cured) prior to the Expiration Date; or

(d) The Stockholder Representative may terminate this Agreement by giving

notice to Buyer at any time prior to the Closing if any Buyer Party has breached any
representation, warranty, covenant or agreement contained in this Agreement such that
the conditions set forth in Section 6.3(a) or Section 6.3(b), as applicable, would not be
satisfied as of the time of such breach or as of the time such representation or warranty
shall have become untrue, and such breach has not been cured (if capable of being cured)
prior to the Expiration Date.

7.2 Effect of Termination. Other than the provisions set forth in Section 5.8, Section
5.9, this Section 7.2 and under Article 9, if this Agreement is terminated pursuant to Section 7.1,
then all further obligations of the Parties under this Agreement will terminate, and there shall be
no liability or obligation on the part of any of the Parties or any of their respective officers,
directors, equity holders or Affiliates, except such termination will not relieve any Party from
any Liability for any willful and material breach of this Agreement existing at the time of such
termination to the extent that such termination results from such willful and material breach.

ARTICLE 8

INDEMNIFICA nON

8.1 Survival. Each representation, warranty, covenant and agreement contained in

this Agreement and any certificate related to such representations, warranties, covenants and
agreements will survive the Closing and continue in full force and effect until __ ,
except each of the following will survive the Closing and continue in full force and effect until:
(i) the applicable statute of limitations expires in the case of the representations and warranties
set forth in Section 3.1 (a) (Status, Power and Enforceability), Section 3.l(e) (Company Capital
Stock), Section 3.1(f) (No Brokers or Finders), Section 3.2(a) (Status, Power and Enforceability),
Section 3.2Cf) (Capitalization), Section 3.2(g) (Valid Issuance of Stock Consideration), Section
l1ill (No Brokers or Finders), Section 4.1 (Organization), Section 4.4 (Capitalization) and
Section 4.9 (Tax Matters) (together, the "Carve-Out Representations") and (ii) indefinitely in the
case of (x) any claim for fraud; and (y) any claim in respect of those covenants and agreements
that specifically contemplate compliance after the Closing (including Section 5.6 (Tax Matters),
Section 5.7 (Noncompetition Agreement related to the Acquisition of Goodwill), Section 5.8
(Nondisclosure), Section 5.9 (Public Announcement), Section 5.11 (Employee Transaction
Bonuses), Section 5.12 (Indemnification), and Section 5.13 (Working Capital). The expiration
of representations, warranties, covenants, agreements and obligations provided herein shall not
affect the right of any Indemnified Party in respect of any claim made by such Indemnified Party
in an Indemnification Notice or a notice of a Third Party Claim that is delivered pursuant to and
in compliance with the provisions of this Article 8 prior to the expiration date(s) specified above.

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 8.2 Indemnification Provisions for the Buyer Parties' Benefit. Subject to Sections 8.1
and Section 8.6, each of the Stockholders shall indemnify, defend and hold harmless each of the
Buyer Indemnified Parties against, and reimburse any Buyer Indemnified Party for, all Damages
that such Buyer Indemnified Party may at any time suffer or incur, or become subject to, as a
result of or in connection with any of the following:

(a) any breach of any representation or warranty of such Stockholder set forth
in Section 3.1; and

(b) any breach by such Stockholder of any covenant, agreement or obligation

of such Stockholder in this Agreement, to the extent required to be performed after the
Closing

(c) any breach of any representation or warranty set forth in Article 4;

(d) any breach by the Stockholders of any covenant, agreement or obligation

of any Stockholder in this Agreement (other than Section 5.13), to the extent required to
be performed at or prior to the Closing;

(e) any breach of Section 5.13;

(f) the amount, if any, by which (A) the actual Company Transaction
Expenses exceed the amount set forth in the Pre-Closing Certificate, (B) the actual
Company Compensation Payments exceed the amount set forth in the Pre-Closing
Certificate and (C) the actual Section 1374 Tax Amount exceeds the amount set forth in
the Pre-Closing Certificate (only to the extent that such excess has not otherwise been
paid to the relevant Tax authority on behalf of the Company by the Stockholders); and

(g) (i) all liability for Taxes of the Company or any Subsidiary for the Pre-
Closing Tax Period (other than the Section 1374 Tax Amount), (ii) all liability (as a result
of Treas. Reg. § 1.1502-6 or any similar provision of Law) for Taxes of any corporation
which is or has been affiliated with the Company or any Subsidiary with respect to
taxable periods during which such corporation was affiliated with the Company or any
Subsidiary, (iii) any payments required to be made after the Closing Date under any Tax
sharing, Tax indemnity, Tax allocation or similar Contracts (whether or not written) to
which the Company or any Subsidiary was obligated or was a party, on or prior to the
Closing Date, and (iv) all liability for Taxes imposed on the Company or any Subsidiary
attributable to the making of the Section 338(h)(1 0) Election.

8.3 Indemnification Provisions for the Stockholders' Benefit. Subject to Sections 8.1
and 8.6, the Buyer Parties, jointly and severally, shall indemnify, defend and hold harmless each
of the Stockholder Indemnified Parties against and reimburse any Stockholder Indemnified Party
for all Damages, that such Stockholder Indemnified Party may at any time suffer or incur, or
become subject to, as a result of or in connection with:

(a) any breach of any representation or warranty in Section 3.2;

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 (b) any breach by the Buyer Parties of any covenant, agreement or obligation
of the Buyer Parties in this Agreement; and

(c) the amount, if any, by which (A) the actual Company Transaction
Expenses are less than the amount set forth in the Pre-Closing Certificate and (B) the
actual Section 1374 Tax Amount is less than the amount set forth in the Pre-Closing
Certificate.

8.4 Escrow Account Offset.

(a) In the event that any Buyer Indemnified Party wishes to make any
indemnification claim under Section 8.2(a), Section 8.2(c) or Section 8.2(d) (other than
with respect to any claim (i) for breach of a Carve-Out Representation or (ii) of fraud) or,
to the extent provided by Section 8.6(a), any other indemnification claim under Section
8.2, such Buyer Indemnified Party shall first provide written notice of such claim (an
"Indemnification Notice") to the Escrow Agent and the Stockholder Representative. Any
such notice shall, to the extent practicable, set forth the basis for the claim and, to the
extent known, the amount or a reasonable estimate of the claim. Thereafter, the
Stockholder Representative shall have ten (10) Business Days following such party's
receipt of the Indemnification Notice in which to deliver notice of objection to such claim
to the Buyer Indemnified Party and the Escrow Agent. If no objection notice is given,
then the claim in the amount alleged by the Buyer Indemnified Party in the
Indemnification Notice shall be deemed to be valid and indemnifiable pursuant hereto.
No offset shall be permitted if the relevant claim is timely disputed as set forth above,
unless and until its validity is finally resolved pursuant to Section 8.4(c). In the event that
the Buyer Indemnified Party is entitled to offset as a result of the final resolution of the
validity of such claim, such Buyer Indemnified Party and the Stockholder Representative
shall provide joint written notice (the "Resolved Claim Notice") of such offset to the
Escrow Agent. If the Stockholder Representative has not so provided the Resolved
Claim Notice to the Escrow Agent within ten (10) Business Days after the demand of the
Buyer Indemnified Party in writing to the Stockholder Representative, then the Buyer
Indemnified Party will be permitted to unilaterally deliver a Resolved Claim Notice (a
"Unilateral Resolved Claim Notice") to the Escrow Agent so long as the Buyer
Indemnified Party provides written notice of the delivery to the Escrow Agent of such
Unilateral Resolved Claim Notice to the Stockholder Representative within five (5) days
thereafter. Within five (5) Business Days after receipt of the Resolved Claim Notice or,
in the case of a Unilateral Resolved Claim Notice, within ten (10) Business Days, but not
less than five (5) Business Days, after receipt thereof, the Escrow Agent shall deliver to
such Buyer Indemnified Party Holdback Consideration equal to the offset set forth in the
Resolved Claim Notice or the Unilateral Resolved Claim Notice; provided, however, that
the Escrow Agent shall not make such delivery in respect of a Unilateral Resolved Claim
Notice if the Stockholder Representative has prior to the date of such delivery provided
notice to the Escrow Agent and the Buyer Indemnified Party of a written objection
asserting that the Unilateral Resolved Claim Notice was improperly given.

(b) In the event the Buyer and the Stockholder Representative shall have
instructed the Escrow Agent to deliver any Holdback Consideration to a Buyer

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 Indemnified Party pursuant to Section 8.4(a), such Holdback Consideration shall be
allocated by the Escrow Agent among the Shareholders pursuant to their respective
Sharing Percentages with respect to the claim set forth in the applicable Indemnification
Notice.

(c) In case the Stockholder Representative shall object in writing to any claim
or claims by the Buyer Indemnified Party made in any Indemnification Notice as
provided in Section 8.4(a), the Stockholder Representative and the Buyer Indemnified
Party shall attempt in good faith for ten (10) Business Days to agree upon the rights of
the respective parties with respect to each of such claims. If the Stockholder
Representative and the Buyer Indemnified Party should so agree, the claims set forth in
such Indemnification Notice shall be modified as necessary to reflect such agreement,
and such claims shall be deemed finally resolved. Ifno such agreement can be reached
by the end of such ten (10) Business Day period after good faith negotiation, either the
Buyer Indemnified Party or the Stockholder Representative may, by written notice to the
other, demand arbitration of the matter pursuant to Section 9.16 unless the amount of the
damage or loss is at issue in pending litigation with a third party, in which event
arbitration shall not be commenced until such amount is ascertained or both parties agree
to arbitration.

8.5 Third Party Claim Procedures. Except as set forth in Section 5.6 of this
Agreement, in order for any Indemnified Party to be entitled to any indemnification provided for
under Sections 8.2 or Section 8.3 hereof in respect of, arising out of or involving a claim made
by any Person against the Indemnified Party (a "Third-Party Claim"), such Indemnified Party
must notify the Party or Parties liable for such indemnification (the "Indemnifying Party") in
writing of the Third-Party Claim promptly following receipt by such Indemnified Party of
written notice of the Third-Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the Indemnifying
Party shall have been actually materially prejudiced as a result of such failure. Upon receipt of a
written notice of a Third Party Claim, the Indemnifying Party will have the right to promptly
assume the defense and control of any Third Party Claim; provided, however, that such right
shall be conditioned upon the Indemnified Party receiving written notice of such assumption by
the Indemnifying Party within fifteen (15) days of its receipt of notice of such Third Party Claim
from the Indemnified Party. If the Indemnifying Party timely assumes the defense and control of
such Third Party Claim, the Indemnified Party shall be allowed a reasonable opportunity to
participate in the defense of such Third Party Claim with its own counsel and at its own expense;
provided, however that the Indemnifying Party shall bear the reasonable fees and expenses of
such separate counsel for the Indemnified Party if the Indemnifying Party shall not have
employed counsel (other than counsel that is reasonably objected to by the Indemnified Party)
within a reasonable time after the Indemnified Party has given notice of the institution ofa Third
Party Claim in compliance with this Section 8.5. If the Indemnifying Party shall elect to assume
the defense of such Third Party Claim, the Indemnifying Party shall select counsel, contractors
and consultants of recognized standing that are reasonably acceptable to the Indemnified Party
and shall take all steps necessary in the defense or settlement of such Third Party Claim. The
Stockholder Representative or the Buyer Parties, as the case may be, shall, and shall cause each
of its controlled Affiliates and Representatives to, cooperate fully with the Indemnifying Party in
the defense of any Third Party Claim. The Indemnifying Party may not consent to a settlement

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of, or the entry of any judgment arising from, any Third Party Claim, without the prior written
consent of any Indemnified Party, provided that such consent will not be unreasonably withheld
if (i) the settlement does not involve any admission of Liability or wrongdoing on the part of any
Indemnified Party, and (ii) the Indemnifying Party shall (1) payor cause to be paid all amounts
arising out of such settlement or judgment concurrently with the effectiveness of such settlement,
(2) not encumber any of the assets of any Indemnified Party or agree to any restriction or
condition that would apply to any Indemnified Party or the conduct of any Indemnified Party's
business and (3) obtain, as a condition of any settlement or other resolution, a complete release
of any Indemnified Party potentially affected by such Third Party Claim. Notwithstanding the
foregoing, an Indemnified Party shall have the right to control the defense of any Third Party
Claim against such Indemnified Party in the event the potential Damages with respect to such
Third Party Claim, when aggregated with all other satisfied or pending Damages subject to
indemnification pursuant to Section 8.2 exceed the limits set forth in Section 8.6, in the case of
any Buyer Indemnified Party.

8.6 Limitations on Indemnification Liability. Any claims of any Indemnified Party

made under this Article 8 will be limited as follows:

(a) Limitation to Holdback. Except with respect to any claim (i) for breach of
a Carve-Out Representation, (ii) of fraud or (iii) with respect to the circumstances set
forth in the last sentence of this Section 8.6(a), offset against the Holdback Consideration
deposited in the Escrow Account shall be the exclusive remedy of the Buyer Indemnified
Parties for any Damages pursuant to Section 8.2(a), Section 8.2(c) or Section 8.2(d) (a
"Holdback Claim"). In the event of a claim with respect to any of clauses (i), (ii) or (iii)
in the immediately preceding sentence or a claim pursuant to any of Section 8.2(b),
Section 8.2(e), Section 8.2m or Section 8.2(g) (a "Non-Holdback Claim"), a Buyer
Indemnified Party may seek any remedy available at Law or equity with respect to such
Non-Holdback Claim other than an offset against the Holdback Consideration deposited
in the Escrow Account except to the extent set forth in the following provisos to this
sentence (an "Alternative Remedy"); provided, that (1) such Buyer Indemnified Party
cannot seek an Alternative Remedy and shall be limited to a remedy consisting of an
offset against the Holdback Consideration deposited in the Escrow Account unless the
Damages sought by such Buyer Indemnified Party with respect to such Non-Holdback
Claim exceeds the amount of the Holdback Consideration remaining in the Escrow
Account (net of any amounts subject to unresolved (x) Indemnification Notices, (y)
Resolved Claim Notices and (z) Unilateral Resolved Claim Notices) at the time of such
Non-Holdback Claim (the "Available Holdback Consideration"), (2) Buyer Indemnified
Party may only seek an Alternative Remedy for the amount that the Damages sought by
such Buyer Indemnified Party with respect to such Non-Holdback Claim exceeds the
Available Holdback Consideration and (3) with respect to such Non-Holdback Claim,
such Buyer Indemnified Party may seek an offset against the Holdback Consideration
deposited in the Escrow Account with respect to any Stockholder that fails to comply
with any final and non-appealable judgment or decision of any court or arbitral body with
respect to an Alternative Remedy regarding such Non-Holdback Claim. If (1) one or
more offsets are made against the Holdback Consideration deposited in the Escrow
Account pursuant to one or more Non-Holdback Claims pursuant to the immediately
foregoing sentence, (II) after such offsets for Non-Holdback Claims one or more

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 Holdback Claims are made and (III) after giving effect to such offsets for Non-Holdback
Claims, the amount of such Holdback Consideration remaining available for satisfaction
of such Holdback Claims is less than the amount of such Holdback Claims, then a Buyer
Indemnified Party may seek an Alternative Remedy for such Holdback Claims for an
aggregate amount of Damages with respect to such Holdback Claims that does not
exceed the amount of the Holdback Consideration previously delivered to the Buyer
Indemnified Parties as offsets with respect to Non-Holdback Claims.

(b) Threshold. Notwithstanding any other provision to the contrary, the

Stockholders shall not be required to indemnify, defend or hold harmless any Buyer
Indemnified Party against, or reimburse any Buyer Indemnified Party for, any Damages
pursuant to Sections 8.2(a) or 8.2(c) or Section 8.2(d) until the aggregate Damages of the
Buyer Indemnified Parties exceeds $ (the "Threshold"), in which event the
Stockholders shall be liable for all Damages of the Buyer Indemnified Parties including
all amounts below the Threshold; provided, however, that the limitations contemplated
by this Section 8.6(b) will not be applicable with respect to any claim (i) for breach of a
Carve-Out Representation or (ii) of fraud.

(c) Reduction for Insurance Claims. The amount of Damages required to be

paid for Damages will be reduced to the extent of any amounts an Indemnified Party
actually receives (net of (x) any costs of recovery and (y) any increases in premiums that
are reasonably determinable and proximately resulting from such claims) pursuant to the
terms of the insurance policies (if any) covering such indemnification claim. To the
extent any Damages may be recoverable pursuant to the terms of any insurance policy
covering an indemnification claim, Parent shall be obligated to pursue such recovery in
good faith. If any Buyer Indemnified Party receives any recovery pursuant to the terms
of any insurance policy covering an indemnification claim where such Buyer Indemnified
Party has previously received an indemnification payment pursuant to this Article 8
(whether as an offset from the Escrow Account pursuant to Section 8.4 or otherwise),
such Buyer Indemnified Party shall promptly (i) if such recovery is made before the
Initial Holdback Release Date, deposit such amount into the Escrow Account and (ii) if
such recovery is made after the Initial Holdback Release Date, pay the amount of such
recovery to the Stockholder Representative, on behalf of the Stockholders, in each case
the amount shall be net of the amounts identified in the first sentence of this Section
8.6(c). Notwithstanding anything to the contrary set forth herein, Parent and each of its
Subsidiaries after the Closing shall be permitted to amend, modify, replace or terminate
any insurance policy in its sole discretion.

(d) Exclusion of Certain Types of Damages. The amount of Damages

required to be paid will be reduced (or, if a Buyer Indemnified Party has previously
received an indemnification payment pursuant to this Article 8 with respect to such
Damages (whether as an offset from the Escrow Account pursuant to Section 8.4 or
otherwise), reimbursed to the Stockholder Representative, on behalf of the Stockholders)
by (i) other than with respect to Taxes, any reserves or accruals expressly set forth in the
Company Financial Statements and (ii) any payments that the Buyer Indemnified Party
actually receives from an unrelated party in respect off a claim for Damages. All
indemnification obligations will be limited to actual Damages that are a reasonably

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 foreseeable consequence of the condition or event giving rise to a claim for
indemnification and will exclude (x) punitive Damages (except to the extent such types
of Damages constitute Damages payable to a third party as a result of a Third Party
Claim) and (y) Damages calculated solely on the basis of a multiple of historical financial
results of the Company (such as EBITDA and Net Income) where such calculation does
not reasonably reflect lost profits or diminution in value of the Company and where
reimbursement of, or compensation for, out-of-pockets expenses or costs provides a
remedy to the Buyer Indemnified Parties.

(e) Limitation of Liability. Subject to Section 8.6(a), in the event of claim for
(i) breach of a Carve-Out Representation, (ii) fraud, or (iii) any Damages pursuant to
Section 8.2(b), Section 8.2(e), Section 8.2(f) or Section 8.2(g), an Indemnified Party shall
have all remedies available at law or in equity with respect to such breach; provided,
however, notwithstanding anything to the contrary contained in this Agreement, in no
event shall any Stockholder have any liability in excess of the Consideration and any
Contingent Payment received by such Stockholder.

(f) Joint and Several Obligations. The indemnification obligations of

_ _ _ and pursuant to Section 8.2 shall be joint and several, and the
indemnification obligations of and pursuant to Section 8.2 shall be
joint and several. Except as set forth in the immediately preceding sentence, the
indemnification obligations of each of the Stockholders pursuant to Section 8.2 shall be
several and not joint.

8.7 Other Indemnification Provisions.

(a) Each Indemnified Party shall use its commercially reasonable efforts to
mitigate any Damages upon becoming aware of any event that would reasonably be
expected to give rise thereto.

(b) Excluding (i) where the Buyer Parties are entitled to injunctive relief
against any of the Stockholders and (ii) breach of Section 5.7, if the Closing occurs the
indemnification provisions in this Article 8 will be the exclusive remedy with respect to
the breach of this Agreement.

(c) Solely for purposes of determining the amount of any Damages arising out
of, relating to or resulting from any breach of any representation or warranty, the
representations and warranties in this Agreement shall be considered without giving
effect to any limitation or qualifications as to "materiality," "Material Adverse Effect" or
any other derivation of the word "material."

(d) To the extent permitted by Law, any indemnification payment made

hereunder will be treated as an adjustment to the Consideration.

ARTICLE 9

MISCELLANEOUS

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 9.1 Entire Agreement. This Agreement, together with the Exhibits, Schedules and
Disclosure Letters hereto and the certificates, documents, instruments and writings that are
delivered pursuant hereto and thereto, constitutes the entire agreement and understanding of the
Parties in respect of its subject matters and supersedes all prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they relate in any way to
the subject matter hereof or the Transaction. Except as expressly contemplated by Section 5.12
and Article 8, there are no third party beneficiaries having rights under, or with respect to, this
Agreement.

9.2 Successors. All of the terms, agreements, covenants, representations, warranties,

and conditions of this Agreement are binding upon, and inure to the benefit of and are
Enforceable by, the Parties and their respective successors.

9.3 Assignments. 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, and any
attempted assignment in derogation of this sentence shall be null and void. Notwithstanding the
foregoing, (a) each of the Buyer Parties may (i) assign any or all of its rights and interests
hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases such Buyer Party nonetheless will
remain responsible for the performance of all of its obligations hereunder) and (b) Buyer (or any
such assignee pursuant to the immediately foregoing clause (a), if applicable) may pledge, assign
or grant to Buyer's (or any such assignee's, if applicable) lenders or agent thereof, for the benefit
of such lenders, a continuing security interest and lien on all of Buyer's (or any such assignee's,
if applicable) right, title and interest in and to this Agreement, as security for the payment and
performance of the obligations of Buyer (or any such assignee, if applicable) to such lenders by
reason of borrowings, the guarantee of borrowings or otherwise (provided that Buyer nonetheless
will remain responsible for the performance of all of its obligations hereunder).

9.4 Notices. All notices, requests, demands, claims and other communications
hereunder will be in writing. Any notice, request, demand, claim or other communication
hereunder will be deemed duly given (a) if it is sent by registered or certified mail, return receipt
requested, postage prepaid, upon receipt; (b) if sent designated for overnight delivery by
nationally recognized overnight air courier (such as DHL or Federal Express), two Business
Days after mailing; ( c) if sent by facsimile transmission before 5 :00 p.m. (Pacific time), when
transmitted and receipt is confirmed; (d) if sent by facsimile transmission after 5 :00 p.m. (Pacific
time) and receipt is confirmed, on the following Business Day; and (e) if otherwise actually
personally delivered, when delivered, provided that such notices, requests, demands and other
communications are delivered to the address set forth below:

If to the Stockholders (prior to Closing):

_____ , Inc.
[address]
Attention:
Tel:
Fax:

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 Copy to (which will not constitute notice pursuant to this Section 9.4):

[outside counsel]
[address]
Attention:
Tel:
Fax:

If to the Buyer Parties:

_____,Inc.
[address]
Attention:
Tel:
Fax:

Copy to (which will not constitute notice pursuant to this Section 9.4):

[outside counsel]
[address]
Attention:
Tel:
Fax:

If to the Stockholder Representative (or any of the Stockholders after Closing):

[name]
[address]
Tel:

Copy to (which will not constitute notice pursuant to this Section 9.4):

[outside counsel]
[address]
Attention:
Tel:
Fax:

Any Party hereunder may change the name of its representatives to whom (and/or the
address to which) notices should be directed, provided that such Party complies with the
provisions of this Section 9.4 regarding the methods for providing such notice and other
communications.

9.5 Specific Performance. Each Party acknowledges and agrees that the other Parties
would be damaged irreparably if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached. Accordingly, each Party agrees that the other
. Parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of

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 this Agreement and to enforce specifically this Agreement and its terms and provisions in any
Action instituted in any court of the United States or any state thereof having jurisdiction over
the Parties and the matter, subject to Sections 9.6, Section 9.7 and 9.10, in addition to any other
remedy to which they may be entitled at Law.

9.6 Submission to Jurisdiction. To the extent an Action is permitted by Section 9.16,

hereof, the parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in the Court of Chancery of the State of
Delaware, County of New Castle or the United States District Court for the District of Delaware.
Each Party also agrees not to bring any Action arising out of or relating to this Agreement in any
other court (and of the appropriate appellate courts therefrom). Each Party agrees that a final and
non-appealable judgment in any Action may be enforced by Action on the judgment or in any
other manner provided at Law or in equity. Each Party waives any defense of inconvenient
forum to the maintenance of any Action so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Each party agrees that
service of process on it by notice as provided in Section 9.4 shall be deemed effective service of
process.

9.7 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY

IRREVOCABL Y WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLA TED HEREBY.

9.8 Counterparts. This Agreement may be executed in two or more counterparts,

each of which will be deemed an original but all of which together will constitute one and the
same instrument.

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

9.10 Governing Law. This Agreement and the performance of the Transaction and
obligations of the Parties hereunder will be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to any choice of Law principles.

9.11 Amendments and Waivers. No amendment, modification, replacement,

termination or cancellation of any provision of this Agreement will be valid, unless the same will
be in writing and signed by the Stockholders holding a majority of the outstanding shares of
Company Common Stock beneficially owned (unless such amendment, modification,
replacement, termination or cancellation relates to less than all of the Stockholders, in which case,
the Stockholders holding a majority of the outstanding shares of Company Common Stock held
by such Stockholders consent thereto in writing), and the Buyer Parties.

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 9.12 Severability. The provisions of this Agreement will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or enforceability of the
other provisions hereof.

9.13 Expenses. Each Party will bear its own costs and expenses incurred in connection
with the preparation, execution and performance of this Agreement and the Transaction,
including all fees and expenses of agents, representatives, financial advisors, legal counsel and
accountants.

9.14 Construction. The Parties have participated jointly in the negotiation and drafting
of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement
will be construed as if drafted jointly by the Parties and no presumption or burden of proof will
arise favoring or disfavoring any Party because of the authorship of any provision of this
Agreement. Any reference to any Law will be deemed also to refer to such Law as amended and
all rules and regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty, and covenant contained herein will have
independent significance. If any Party has breached any representation, warranty, or covenant
contained herein in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels of specificity)
which the Party has not breached will not detract from or mitigate the fact that the Party is in
breach of the first representation, warranty, or covenant.

9.15 Incorporation of Exhibits, Schedules and Disclosure Letters. The Exhibits,

Schedules, Disclosure Letters and other attachments identified in this Agreement are
incorporated herein by reference and made a part hereof.

9.16 Dispute Resolution. Any dispute, controversy or claim (each a "Dispute" and
collectively, the "Disputes") arising out of, relating to or in connection with this Agreement,
including any Dispute regarding its validity or termination, or the performance or breach thereof
under this Agreement and disputed claims in escrow shall be settled exclusively and finally by a
panel of three arbitrators selected by the mutual agreement of the parties to such Dispute in an
arbitration proceeding administered by Judicial Arbitration and Mediation Services ("JAMS")
under its Comprehensive Arbitration Rules and Procedures in effect at the time of such
proceeding, and judgment on the award rendered by such arbitrators may be entered in any court
having jurisdiction thereof. If the parties to any such Dispute are unable to select such arbitrators
within fifteen (15) days of the first notice given by any party to such Dispute to the other party or
parties to such Dispute requesting arbitration and the selection of such arbitrators, any party to
such Dispute may request that JAMS select such arbitrators, which selection shall be binding on
the parties to such Dispute. If (i) two or more Disputes arising out of or in connection with this
Agreement are simultaneously pending, (ii) the subject matters of such Disputes involve
common questions of law or fact and (iii) the independent resolution of each such Dispute could
result in conflicting decisions or obligations, such Disputes may be consolidated in a single
proceeding. If more than one arbitration proceeding involving any such Disputes are pending,
such proceedings shall, at the request of any party to such Dispute, be consolidated and settled in
a single arbitration proceeding; provided that the determination of whether such Disputes shall
be consolidated shall be determined by the first panel of three arbitrators established to settle any
such Dispute. If such Disputes are consolidated and more than one panel of three arbitrators has

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 been established to settle any of such Disputes, the parties to such Dispute shall, within twenty
(20) days of such consolidation, select one panel of three arbitrators so established to settle the
single consolidated arbitration proceeding. Unless the parties to such Dispute otherwise agree to
conduct any arbitration proceeding pursuant to this Section 9.16 elsewhere, such proceeding
shall be conducted and any decision shall be rendered in Wilmington, Delaware, at a venue to be
selected by mutual agreement of the parties to such Dispute. Expenses and costs associated with
the submission of any Dispute to arbitration shall be the responsibility of the party against whom
a final decision is rendered with respect to that Dispute (provided that in the case of multiple
Disputes that are consolidated into a single proceeding, the costs of such proceeding shall be
borne on a Dispute-by-Dispute basis by the party against whom a final decision is rendered with
respect to each particular Dispute). The award rendered by the arbitrators shall be final and
binding on the parties to the Dispute; provided, however, that (i) by agreeing to arbitration, the
parties do not intend to deprive any court with jurisdiction of its ability to issue a preliminary
injunction, attachment or other form of provisional remedy in aid of the arbitration and a request
for such provisional remedies by a party to a court shall not be deemed a waiver of this
agreement to arbitrate, and (ii) in addition to the authority conferred upon the panel of three
arbitrators by the rules specified above, the panel of three arbitrators shall also have the authority
to grant provisional remedies, including injunctive relief. Except as required by law, or as
ordered by the arbitrator as part of a final judgment on merits of the Dispute(s), neither any party
nor the arbitrators may disclose the existence, content or results of an arbitration brought
pursuant to this Agreement (other than to the Parties and their representatives, counsel, advisers
and Affiliates on a confidential basis). In addition to the provisions for the exchange of
information set forth in the JAMS Rules, the Disputing Parties shall have the right to serve, and
the obligation to respond to, two sets of requests for the production of documents and/or things,
and shall also have the right to conduct three depositions of fact witnesses and the deposition of
any experts proffered by the opposing party. The schedule for such disclosures and depositions
shall be addressed by the arbitrators if the parties are unable to agree thereon. The arbitrators
may hear and rule on dispositive motions as part of the arbitration proceeding (e.g., motions for
judgment on the pleadings, summary judgment and partial summary judgment). Judgment upon
the award rendered by the arbitrators may be entered in any court having competent jurisdiction.
The arbitrators chosen in accordance with these provisions will not have the power to alter,
amend or otherwise affect the terms of these arbitration provisions or the provisions of this
Agreement.

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

- - - - - - HOLDING CORP.

By:
Name:
Title:

_ _ _ _ _ _,' INC.

By:
Name:
Title:

[Signature Page to Purchase and Sale Agreement]

099999-0968-02806-PaloAlto.2110456.1
 IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
above written.

STOCKHOLDERS:

Name:

Name:

Name:

Name:

2
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 FORM OF CONSENT OF SPOUSE

The undersigned, being the spouse of , who has become a signatory to

the Purchase and Sale Agreement, dated as of , _ _ (the "Agreement"), by and among
___ Holding Corp. (together with its successors and permitted assigns, "Parent"), _ _ __
Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Buyer", and together with
Parent, the "Buyer Parties") and the Stockholders (as defined in the Agreement), hereby
acknowledges that the undersigned has read the Agreement and knows its contents; that the
undersigned is aware that by the provisions of the Agreement his or her spouse agrees to sell all
of his or her direct and indirect interests in the Company, including, if applicable under Law, the
community property interest thereof of the undersigned, if any, to Buyer upon the terms, and
subject to the conditions, set forth in the Agreement; that the undersigned hereby consents to
such sale, approves of the provisions of the Agreement, and, to the extent of such community
property interest (if applicable under Law), agrees to abide by the provisions of the Agreement.

To the extent the undersigned shall succeed to any or all of the interest of the
undersigned's spouse in the direct and indirect interests in the Company or the consideration to
be received by the undersigned's spouse in respect of the direct and indirect interests in the
Company, whether by voluntary transfer or transfer by operation of law, property settlement
agreement or pursuant to a dissolution of marriage proceeding, or by decree or order of court, or
in any other manner, such interest shall be subject to all terms of the Agreement.

This Consent of Spouse shall be binding on the undersigned and on the undersigned's
successors, assigns, representatives, heirs and legatees.

This Consent of Spouse is not intended to alter and shall not alter the community
property, separate property or quasi-community property status of any property of the
undersigned or the spouse of the undersigned.

Print Name:
Spouse of:

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