ASSET PURCHASE AGREEMENT

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Exhibit 10.8

         ASSET PURCHASE AGREEMENT

among:

YP WEB PARTNERS, LLC,
a Louisiana limited liability company;

YPSOLUTIONS.COM, INC.,
a Nevada corporation;

THE HAMMACK-JONES GROUP, LLC,
a Louisiana limited liability company;

and

APTAS, INC.,
a Delaware corporation

Dated as of March 31, 2005

1.		SALE OF ASSETS; RELATED TRANSACTIONS				1
		1.1		Sale of Assets		1
		1.2		Purchase Price		2
		1.3		Sales Taxes		4
		1.4		Allocation		4
		1.5		Closing		4
2.		REPRESENTATIONS AND WARRANTIES OF THE MEMBERS AND THE SELLER				5
		2.1		Due Organization; No Subsidiaries; Authority		5
		2.2		Organizational Documents; Records		6
		2.3		Capitalization		6
		2.4		Financial Statements		6
		2.5		Absence of Changes		7
		2.6		Title To Assets		8
		2.7		[reserved]		8
		2.8		Receivables		8
		2.9		Customers		9
		2.10		Equipment, Etc.		9
		2.11		Real Property		9
		2.12		Intellectual Property		9
		2.13		Contracts		13
		2.14		Liabilities		14
		2.15		Compliance with Legal Requirements		14
		2.16		Governmental Authorizations		15
		2.17		Tax Matters		15
		2.18		Employee And Labor Matters		16
		2.19		Employee Benefit Plans and Compensation		17
		2.20		Environmental Matters		20
		2.21		Performance of Services		20
		2.22		Insurance		20
		2.23		Related Party Transactions		21
		2.24		Certain Payments, Etc		21
		2.25		Proceedings; Orders		21
		2.26		Authority; Binding Nature of Agreements		22
		2.27		Non-Contravention; Consents		22
		2.28		Brokers		23
		2.29		Full Disclosure		23
3.		REPRESENTATIONS AND WARRANTIES OF THE PURCHASER				23
		3.1		Due Organization; No Subsidiaries; Etc		23
		3.2		Organizational Documents; Records		23
		3.3		Purchaser Financial Statements		23
		3.4		Absence of Changes		24
		3.5		Brokers		24
		3.6		Authority and Related Matters		25
		3.7		ISx Financial Statements		25
		3.8		Intellectual Property		25
		3.9		Liabilities		29
		3.10		Proceedings; Orders		29
		3.11		ISx Intellectual Property		29
		3.12		Full Disclosure		29
4.		INVESTMENT REPRESENTATIONS AND COVENANTS				30
		4.1		Exemption from Registration		30

 

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		4.2		Legends		30
		4.3		Market Stand-Off Agreement		30
		4.4		Investment Representations		31
5.		INDEMNIFICATION, ETC				32
		5.1		Survival of Representations And Covenants		32
		5.2		Indemnification By The Members And The Seller		33
		5.3		Indemnification By The Purchaser		34
		5.4		Setoff		35
		5.5		Exclusive Remedy		35
		5.6		Defense of Third-Party Claims		35
		5.7		Exercise of Remedies By Indemnitees Other Than The Purchaser		36
		5.8		Allocation		36
		5.9		Insurance and Taxes		36
		5.10		In Rem Liability		36
6.		CERTAIN COVENANTS				37
		6.1		Operation of Business		37
		6.2		Notification		37
		6.3		No Negotiation		37
		6.4		Best Efforts		38
		6.5		Confidentiality		38
		6.6		Further Actions		38
		6.7		Publicity		38
		6.8		Change of Name		38
		6.9		Payment of Liabilities; Conduct of Business		38
7.		CONDITIONS TO CLOSING AND TERMINATION				39
		7.1		General		39
		7.2		Obligation of the Purchaser		39
		7.3		Obligations of the Seller and the Members		40
		7.4		Frustration		41
		7.5		Termination		41
		7.6		Termination Procedures		41
		7.7		Effect of Termination		41
8.		MISCELLANEOUS PROVISIONS				42
		8.1		Further Assurances		42
		8.2		Fees and Expenses		42
		8.3		Attorneys' Fees		42
		8.4		Notices		42
		8.5		Time of The Essence		44
		8.6		Headings		44
		8.7		Counterparts		44
		8.8		Governing Law		44
		8.9		Successors And Assigns; Parties In Interest		44
		8.10		Specific Performance		45
		8.11		Waiver		45
		8.12		Amendments		45
		8.13		Severability		45
		8.14		Entire Agreement		46
		8.15		Construction		46
		8.16		Seller Disclosure Schedule and Purchaser Disclosure Schedule		46

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ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT is entered into as of March 31, 2005, by and among: YP WEB PARTNERS, LLC, a Louisiana limited liability company (the " Seller "); YPSOLUTIONS.COM, Inc. , a Nevada corporation, and THE HAMMACK-JONES GROUP, LLC, a Louisiana limited liability company (collectively, the " Members "); and APTAS, INC. , a Delaware corporation (the " Purchaser "). Certain capitalized terms used in this Agreement are defined in Exhibit A .

RECITALS

         A.     The Members are the sole members of the Seller.

         B.     The Members and the Seller wish to provide for the sale of substantially all of the assets of the Seller to the Purchaser, and the assumption of substantially all liabilities of the Seller by the Purchaser, each on the terms set forth in this Agreement.

AGREEMENT

        The parties to this Agreement, intending to be legally bound, agree as follows:

1.     SALE OF ASSETS; RELATED TRANSACTIONS.

         1.1   Sale of Assets.     The Seller shall, and the Members shall cause the Seller to, cause to be sold, assigned, transferred, conveyed and delivered to the Purchaser, at the Closing (as defined below), good and valid title to the Assets (as defined below), free of any Encumbrances, on the terms and subject to the conditions set forth in this Agreement. To the extent either of the Members has any interest in any of the Assets, such Member or Members shall cause to be sold, assigned, transferred, conveyed and delivered to the Purchaser, free of any Encumbrances, good and valid title to such Assets. For purposes of this Agreement, "Assets" shall mean and include: all of the properties, rights, interests and other tangible and intangible assets of the Seller (wherever located and whether or not required to be reflected on a balance sheet prepared in accordance with GAAP). Without limiting the generality of the foregoing, the Assets shall include:

         (a)    all cash and cash equivalents of the Seller as of the Closing Date, if any;

         (b)    all accounts receivable, notes receivable and other receivables of the Seller (including all accounts receivable identified in Part 2.8 of the Seller Disclosure Schedule and all accounts receivable of the Seller that have arisen since December 31, 2004);

         (c)    all inventories and work-in-progress of the Seller, and all rights to collect from customers (and to retain) all fees and other amounts payable, or that may become payable, to the Seller with respect to services performed on behalf of the Seller on or prior to the Closing Date;

         (d)    all equipment, materials, prototypes, tools, supplies, vehicles, furniture, fixtures, improvements and other tangible assets of the Seller (including the tangible assets identified in Part 2.10 of the Seller Disclosure Schedule);

         (e)    all advertising and promotional materials possessed by the Seller;

         (f)     all Intellectual Property and Intellectual Property Rights and related goodwill of the Seller (including the right to use the names "YPSolutions," "YPSolutions.com," and "YP Web Partners" and variations of each such name, and the Intellectual Property and Intellectual Property Rights identified in Part 2.12 of the Seller Disclosure Schedule);

         (g)    all rights of the Seller (and, if applicable, the Members) under the Seller Contracts (including those Contracts identified in Part 2.13 of the Seller Disclosure Schedule);

 

         (h)    all Governmental Authorizations held by the Seller (including the Governmental Authorizations identified in Part 2.16 of the Seller Disclosure Schedule);

         (i)     all claims (including claims for past infringement or misappropriation of Intellectual Property or Intellectual Property Rights) and causes of action of the Seller against other Persons (regardless of whether or not such claims and causes of action have been asserted by the Seller), and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery possessed by the Seller (regardless of whether such rights are currently exercisable); and

         (j)     all books, records, files and data of the Seller (but excluding the minute books, stock books and other internal corporate documents of the Seller).

         1.2   Purchase Price.

         (a)    As consideration for the sale of the Assets to the Purchaser:

           (i)   at the Closing, the Purchaser shall pay to the Seller, in cash, a total of $10,000,000;

          (ii)   at the Closing, the Purchaser shall issue to Seller a promissory note in the face amount of $10,000,000, subject to conversion, adjustment and offset upon the terms thereof, substantially in the form attached hereto as Exhibit B (the " Consideration Note ");

        (iii)   at the Closing, the Seller shall transfer all right, title and interest in and to the Assets, and the Purchaser shall assume the Assumed Liabilities by delivering to the Seller an Assignment and Assumption Agreement, in substantially the form of Exhibit C (the " Assignment Agreement ");

         (b)    For purposes of this Agreement "Assumed Liabilities" shall mean only the following liabilities of the Seller:

           (i)   all accounts payable and accrued expenses of the Seller that arose from bona fide transactions entered into in the Ordinary Course of Business that remain unpaid as of the Closing Date, but, with respect to amounts that arose or became payable prior to December 31, 2004, only to the extent and in the amount reflected in the "accounts payable" entry and the respective accrued expense account entries in the "liabilities" column of the balance sheet of the Seller as of December 31, 2004; and

          (ii)   the obligations of the Seller under the Contracts identified in Part 2.13 of the Seller Disclosure Schedule, the Intellectual Property Rights and the Governmental Authorizations, but only to the extent such obligations (A) arise after the Closing Date, (B) do not arise from or relate to any Breach by the Seller of any provision of any of such Contracts, and (C) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse of time, would constitute or result in a Breach of any of such Contracts;

        (iii)   all other Liabilities of the Seller identified in Part 2.14 of the Seller Disclosure Schedule;

         (c)     Notwithstanding the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the "Assumed Liabilities" shall not include, and the Purchaser shall not be required to assume or to perform or discharge:

           (i)   any Liability of any Member or any other Person, except for the Seller;

          (ii)   liabilities relating to (x) the promissory note payable to Yellow Magic Incorporated in face amount of $550,000 or (y) the Membership Interest Purchase Agreement between the Seller and Yellow Magic Incorporated, dated September 13, 2003;

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        (iii)   any Liability of the Seller arising out of or relating to the execution, delivery or performance of any of the Transactional Agreements or the letter agreement with Legacy Capital, dated July 20, 2004;

         (iv)   any Liability of the Seller for any fees, costs or expenses of the type referred to in Section 8.2(a) of this Agreement in excess of the Fee Cap (as defined in Section 8.2(a));

          (v)   any Liability of the Seller or any Member arising from or relating to any action taken by the Seller, or any failure on the part of the Seller to take any action, at any time after the Closing Date;

         (vi)   any Liability of the Seller arising from or relating to (x) any services performed by the Seller for any customer, or (y) any claim or Proceeding against the Seller;

        (vii)   any Liability of the Seller for the payment of any Tax;

       (viii)   any Liability of the Seller to any employee or former employee of the Seller under or with respect to any Seller Employee Plan;

         (ix)   any Liability of the Seller to any Member or any other Related Party (excluding, however, payments in the Ordinary Course of Business by the Seller to YPSolutions.com, Inc. for the City Boss license);

          (x)   any Liability under any Contract, if the Seller shall not have obtained, prior to the Closing Date, any Consent required to be obtained from any Person with respect to the assignment or delegation to the Purchaser of any rights or obligations under such Contract;

         (xi)   any Liability that is inconsistent with or constitutes an inaccuracy in, or that arises or exists by virtue of any Breach of, (x) any representation or warranty made by the Seller or any Member in any of the Transactional Agreements, or (y) any covenant or obligation of the Seller or any Member contained in any of the Transactional Agreements; or

        (xii)   any other Liability that is not referred to specifically in Section 1.2(b)(i), (b)(ii) or (b)(iii).

         (d)    On or prior to April 27, 2005, the Purchaser will prepare or cause to be prepared a balance sheet of the Seller as of the Closing Date (the " Closing Date Balance Sheet ") showing the amount of Closing Date Working Capital, along with a statement setting forth in reasonable detail the method of calculating Closing Date Working Capital, which shall be in accordance with GAAP and consistent with the methodology used in Seller's Financial Statements (as defined in Section 2.4 below), and shall deliver or cause to be delivered to the Seller such Closing Date Balance Sheet. In the event that the Seller objects to the Purchaser's calculation of the Closing Date Working Capital, then, within 30 days after the delivery to the Seller of the Closing Date Balance Sheet, the Seller shall deliver to the Purchaser a notice describing in reasonable detail the Seller's objection to the Purchaser's calculation (an " Objection Notice "), accompanied by a statement setting forth the dollar amount determined by the Seller to represent the Closing Date Working Capital or a request for additional information from the Purchaser that the Seller may require in order to determine the Closing Date Working Capital. If the Seller does not deliver an Objection Notice to the Purchaser within the 30-day period referred to in the preceding sentence, then the Purchaser's calculation of the Closing Date Working Capital shall be binding and conclusive on the Purchaser and the Seller. If the Seller delivers an Objection Notice to the Purchaser within the 30-day period referred to in this paragraph, and if the Purchaser and the Seller are unable to agree upon the calculation of the Closing Date Working Capital within 15 days after an Objection Notice is delivered to the Purchaser, the Seller and the Purchaser shall select a nationally recognized accounting firm mutually acceptable to them (the " Neutral Accountant ") to resolve any remaining objections, the cost of which shall be paid by the party

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whose assertions regarding the amount of the Closing Date Working Capital differ by the greater amount from the Closing Date Working Capital determined by the Neutral Accountant. If Purchase and Seller are unable to select the Neutral Accountant within 10 days after the commencement of such selection process, the Neutral Accountant shall be KPMG (or its successor). The Seller and the Purchaser shall jointly instruct the Neutral Accountant to resolve any unresolved objections within 30 days after referral of the matter to them, and the determination by the Neutral Accountant of the Closing Date Working Capital, shall be conclusive and binding on the Purchaser and Seller absent fraud or manifest error. During the 30-day period following the Objection Notice, Seller and Purchaser shall each have access to the other party's working papers and similar materials prepared in connection with the Closing Date Balance Sheet and the Objection Notice, as the case may be.

           (i)   If the Seller's Closing Date Working Capital (as finally determined in accordance with this Section 1.2(d)) exceeds $500,000, the Purchaser shall promptly deliver to the Seller (but in no event later than the fifth day after the date on which the Seller's Closing Date Working Capital is finally determined in accordance with section 1.2(d)) the amount by which the Closing Date Working Capital exceeds $500,000 in immediately available funds. If such payment is not timely made, such payment shall bear interest from the last day on which it was required to have been paid to the date on which it is finally paid at a rate per annum, compounded daily, equal to the rate reported as the prime rate from time to time in the Money Rate section of The Wall Street Journal plus 5%, not to exceed, however, the maximum rate allowed by the Laws of the state of Colorado.

          (ii)   If the Seller's Closing Date Working Capital (as finally determined in accordance with this Section 1.2(d)) is less than $500,000, the Seller shall promptly deliver to the Purchaser (but in no event later than the fifth day after the date on which the Seller's Closing Date Working Capital is finally determined in accordance with Section 1.2(d)) the amount by which $500,000 exceeds the Closing Date Working Capital in immediately available funds. If such payment is not timely made, such payment shall bear interest from the last day on which it was required to have been paid to the date on which it is finally paid at a rate per annum, compounded daily, equal to the rate reported as the prime rate from time to time in the Money Rate section of The Wall Street Journal plus 5%, not to exceed, however, the maximum rate allowed by the Laws of the state of Colorado.

         1.3     Sales Taxes.     The Seller shall bear and pay, and shall reimburse the Purchaser and the Purchaser's affiliates for, any sales taxes, use taxes, transfer taxes or similar taxes that may become payable in connection with the sale of the Assets to the Purchaser or in connection with any of the other Transactions.

         1.4     Allocation.     At or prior to the Closing, the Purchaser shall deliver to the Seller a statement, reasonably acceptable to the Seller, setting forth the Purchaser's good faith determination of the manner in which the consideration referred to in Sections 1.2(a)(i), 1.2(a)(ii) and 1.2(a)(iii) is to be allocated among the Assets. The allocation prescribed by such statement shall be conclusive and binding upon the Members and the Seller for all purposes, and neither the Seller nor any Member shall file any Tax Return or other document with, or make any statement or declaration to, any Governmental Body that is inconsistent with such allocation.

         1.5     Closing .

         (a)    The closing of the sale of the Assets to the Purchaser (the " Closing ") shall take place at the offices of Cooley Godward llp in Broomfield, Colorado, at 10:00 a.m. on April 7, 2005, at 10:00 a.m. on such date; provided, however, that if any condition set forth in Section 6.2 has not been satisfied as of such date, then the Purchaser may, at its election, (i) unilaterally postpone the Closing Date by up to thirty (30) days, or (ii) terminate this Agreement in accordance with

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Section 6.4 hereof. For purposes of this Agreement, " Closing Date " shall mean the time and date as of which the Closing actually takes place.

         (b)    At the Closing:

           (i)   the Seller shall execute and deliver to the Purchaser such bills of sale, endorsements, assignments and other documents as may (in the reasonable judgment of the Purchaser or its counsel) be necessary or appropriate to assign, convey, transfer and deliver to the Purchaser good and valid title to the Assets free of any Encumbrances;

          (ii)   the Purchaser shall pay to the Seller $10,000,000 in cash as contemplated by Section 1.2(a)(i) and issue the Consideration Notes as contemplated by Section 1.2(a)(ii);

        (iii)   the parties hereto shall execute and deliver to each other the certificates described in Section 7.2(d)(ii) and 7.3(c)(i);

         (iv)   the Purchaser shall execute and deliver to the Seller the Assignment Agreement;

          (v)   the Seller and The Hammack-Jones Group, LLC shall execute and deliver to the Purchaser a Non-competition Agreement in the form of Exhibit D-1 hereto, and YPSolutions.com, Inc. shall execute and deliver a Non-competition Agreement in the form of Exhibit D-2 hereto (collectively, the " Non-competition Agreements ");

         (vi)   the Purchaser, the Seller and the Members shall enter into a security agreement, substantially in the form attached hereto as Exhibit E , providing a security interest in the Assets, which security interest shall support the obligations of the Purchaser with respect to the obligations evidenced by the Consideration Notes;

        (vii)   the Purchaser shall enter into Professional Services Agreement with Online Web Marketing Inc., substantially in the form attached hereto as Exhibit F ;

       (viii)   the Purchaser shall provide executed offer letters to Don Jones, Will Scott and Julius Meaux, substantially in the forms attached hereto as Exhibits G-1, G-2 and G-3 , respectively;

         (ix)   the Purchaser and the Seller shall enter into the Domain Name Assignment Agreement, substantially in the form attached hereto as Exhibit H ; and

          (x)   the Seller shall deliver to the Purchaser a fully executed Amendment to the Non-Exclusive License Agreement between Myareaguide.com, Inc. and YP Web Partners, Inc., in substantially the form attached hereto as Exhibit I (the " MAG Amendment ").

2.     REPRESENTATIONS AND WARRANTIES OF THE MEMBERS AND THE SELLER.

        The Seller and the Members represent and warrant, to and for the benefit of the Indemnitees, as follows:

         2.1     Due Organization; No Subsidiaries; Authority.     The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Louisiana. The Seller is qualified, authorized, registered or licensed to do business as a foreign limited liability company in each jurisdiction in which the failure to so qualify would have a material adverse effect on the Seller. The Seller is qualified to do business and is in good standing as a foreign limited liability company in each of the jurisdictions listed in Part 2.1 of the Seller Disclosure Schedule. The Seller does not have any subsidiaries, and does not own, beneficially or otherwise, any shares or other securities of, or any direct or indirect interest of any nature in, any other Entity. The Seller has never conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious name, assumed name, trade name or other name, other than "YPSolutions.com" and "YP Web Partners." The Seller has all requisite power and authority to enter into this Agreement and any Transactional Agreement to which

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it is or will be a party and to consummate the Transactions. The execution and delivery of this Agreement and any Transactional Agreement to which such Seller is a party and the consummation of the Transactions have been duly authorized by all necessary organizational action on the part of the Seller, and no further action is required on the part of the Seller to authorize the Agreement and any Transactional Agreement to which it is a party and the Transactions. This Agreement and any Transactional Agreement to which it is a party have been duly executed and delivered by the Seller, and assuming the due authorization, execution and delivery by the other parties to such Transactional Agreements, constitutes or will constitute a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and to rules of law governing specific performance, injunctive relief or other equitable remedies.

         2.2     Organizational Documents; Records.     The Seller has delivered to (or made available for inspection by) the Purchaser accurate and complete copies of: (i) the organizational documents of the Seller, including its articles of association and operating agreement, including all amendments thereto; (ii) the membership records of the Seller; and (iii) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the members of the Seller, the board of directors of the Seller (or equivalent body) and all committees of the board of directors (or equivalent body) of the Seller. There have been no meetings or other proceedings of the members of the Seller, the board of directors (or equivalent body) of the Seller or any committee of the board of directors (or equivalent body) of the Seller that are not reflected in such minutes or other records. The books of account, membership records, minute books and other records of the Seller are accurate, up-to-date and complete, and have been maintained in accordance with sound and prudent business practices. All of the records of the Seller are in the actual possession and direct control of the Seller.

         2.3     Capitalization.     The Members are, and will be as of the Closing Date, the sole members of the Seller. Except as set forth in Part 2.3 of the Seller Disclosure Schedule, there is no: (a) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock, membership interests or other securities of the Seller; (b) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock, membership interests or other securities of the Seller; or (c) Contract under which the Seller is or may become obligated to sell or otherwise issue any shares of its capital stock, membership interests or any other securities. No person other than the Members have any right to vote with respect to the sale of the Assets to the Purchaser or any of the other Transactions.

         2.4     Financial Statements.     The Seller has delivered to the Purchaser the following financial statements (collectively, the " Seller Financial Statements "): the audited balance sheets of the Seller as of September 30, 2004, December 31, 2003 and December 31, 2002, and the related statements of income and retained earnings and cash flows for nine month or the years then ended, as applicable, together with the notes thereto and the report of Legier & Materne, APAC with respect thereto, and the unaudited balance sheet of the Seller as of December 31, 2004, and the related statements of income and retained earnings and cash flows for the year then ended. The Seller Financial Statements have been prepared in accordance with GAAP (except that the unaudited financials statements referred to herein do not have footnotes and the write-off of goodwill reflected in the unaudited financial statements as of December 31, 2004 and for the year then ended may not be in accordance with GAAP) and present fairly in all material respects the financial position of the Seller as of the respective dates thereof and the results of operations and cash flows of the Seller for the periods covered thereby.

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         2.5     Absence of Changes.     Except as set forth in Part 2.5 of the Seller Disclosure Schedule, since December 31, 2004:

         (a)    there has not been any material adverse change in, and no event has occurred that might have a material adverse effect on, the business, condition, assets, liabilities, operations, financial performance or net income of the Seller;

         (b)    there has not been any loss, damage or destruction to, or any interruption in the use of, any of the material assets of the Seller (whether or not covered by insurance);

         (c)    the Seller has not (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any of its membership interests, or (ii) repurchased, redeemed or otherwise reacquired any of its membership interests;

         (d)    the Seller has not paid any bonus or made any loan or advance to any Member, or permitted any draws or other reductions in the capital account or accounts of the Members;

         (e)    the Seller has paid and discharged its obligations and liabilities in the Ordinary Course of Business;

         (f)     the Seller has not purchased or otherwise acquired any asset from any other Person, except for assets acquired by the Seller in the Ordinary Course of Business;

         (g)    the Seller has not leased or licensed any asset from any other Person involving an aggregate amount of in excess of $10,000;

         (h)    the Seller has not made any capital expenditure in excess of $10,000 as to any individual expenditure or in excess of $25,000 with respect to all capital expenditures;

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         (i)     the Seller has not sold or otherwise transferred, or leased or licensed, any asset to any other Person;

         (j)     the Seller has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness;

         (k)    the Seller has not made any loan or advance to any other Person (other than advances of expenses to employees in the Ordinary Course of Business);

         (l)     the Seller has not (i) established or adopted any Seller Employee Plan, or (ii) paid any bonus or made any profit-sharing or similar payment to, or increased the amount of the wages, salary, commissions, fees, fringe benefits or other compensation or remuneration payable to, any of its directors, officers, employees or independent contractors;

         (m)   no Seller Contract by which the Seller or any of the assets owned or used by the Seller is or was bound, or under which the Seller has or had any rights or interest, has been amended or terminated;

         (n)    the Seller has not incurred, assumed or otherwise become subject to any Liability, other than Liabilities incurred by the Seller in bona fide transactions entered into in the Ordinary Course of Business;

         (o)    the Seller has not discharged any Encumbrance or discharged or paid any indebtedness or other Liability, except for Encumbrances discharged or Liabilities paid in the Ordinary Course of Business;

         (p)    the Seller has not forgiven any debt or otherwise released or waived any right or claim;

         (q)    the Seller has not changed any of its methods of accounting or accounting practices in any respect;

         (r)    the Seller has not entered into any transaction or taken any other action outside the Ordinary Course of Business; and

         (s)    the Seller has not agreed, committed or offered (in writing or otherwise) to take any of the actions referred to in clauses "(c)" through "(r)" above.

         2.6     Title To Assets.     The Seller owns, and has good and valid title to, the Assets. Except as set forth in Part 2.6 of the Seller Disclosure Schedule, the Assets are owned by the Seller free and clear of any Encumbrances. Part 2.6 of the Seller Disclosure Schedule identifies the Assets that are being leased or licensed to the Seller. The Assets will collectively constitute, as of the Closing Date, all of the properties, rights, interests and other tangible and intangible assets necessary to enable the Seller to conduct its business in the manner in which such business is currently being conducted and in the manner in which such business is proposed to be conducted.

         2.7    [reserved]

         2.8     Receivables.     Part 2.8 of the Seller Disclosure Schedule provides an accurate and complete breakdown and aging of all accounts receivable, notes receivable and other receivables of the Seller as of December 31, 2004. Except as set forth in Part 2.8 of the Seller Disclosure Schedule, to the knowledge of the Seller, all existing accounts receivable of the Seller (including those accounts receivable reflected on the unaudited balance sheet of the Seller at December 31, 2004 that have not yet been collected and those accounts receivable that have arisen since December 31, 2004 and have not yet been collected): (i) represent valid obligations of customers of the Seller arising from bona fide transactions entered into in the Ordinary Course of Business and (ii) are current and will be collected in full (without any counterclaim or setoff) on or before August 31, 2005 (net of allowance for uncollectible accounts in an aggregate amount not to exceed $30,000). Part 2.8 of the Seller Disclosure

8

 

Schedule identifies all unreturned security deposits and other deposits made by, or held by any Person for the benefit of, the Seller.

         2.9     Customers.     Part 2.9 of the Seller Disclosure Schedule accurately identifies, and provides an accurate and complete breakdown of the revenues received from, each customer or other Person that (together which such customer's or other Person's affiliates) accounted for more than $100,000 of the gross revenues of the Seller in 2003 or 2004. Neither the Seller nor any Member has received any written notice indicating that any customer or other Person identified or required to be identified in Part 2.9 of the Seller Disclosure Schedule may cease dealing with the Seller or may otherwise reduce the volume of business transacted by such Person with the Seller below historical levels. To their knowledge, neither the Seller nor any Member has received any unwritten communication indicating that any customer or other Person identified or required to be identified in Part 2.9 of the Seller Disclosure Schedule may cease dealing with the Seller or may otherwise reduce the volume of business transacted by such Person with the Seller below historical levels.

         2.10   Equipment, Etc.     Part 2.10 of the Seller Disclosure Schedule accurately identifies all equipment, materials, tools, supplies, vehicles, furniture, fixtures, improvements and other tangible assets owned by the Seller that comprise the Assets, and accurately sets forth the date of acquisition, original cost and book value of each of said assets. Part 2.10 of the Seller Disclosure Schedule also accurately identifies all tangible assets leased to the Seller. Each Asset identified or required to be identified in Part 2.10 of the Seller Disclosure Schedule: (i) is structurally sound, free of defects and deficiencies and in good condition and repair (ordinary wear and tear excepted); and (ii) complies in all material respects with, and is being operated and otherwise used in full compliance with, all applicable Legal Requirements.

         2.11   Real Property.     The Seller does not own any real property or any interest in real property, except for the leaseholds created under the real property leases identified in Part 2.11 of the Seller Disclosure Schedule. Part 2.11 of the Seller Disclosure Schedule provides an accurate and complete description of the premises covered by said leases and the facilities located on such premises. The Seller enjoys peaceful and undisturbed possession of such premises.

         2.12   Intellectual Property.

         (a)    Part 2.12(a) of the Seller Disclosure Schedule accurately identifies and describes:

           (i)   in Part 2.12(a)(i) of the Seller Disclosure Schedule, each proprietary service developed, marketed, performed or sold by the Seller, and not abandoned, at any time since inception and any product or service currently under development by the Seller;

          (ii)   in Part 2.12(a)(ii) of the Seller Disclosure Schedule: (A) each item of Registered IP in which the Seller has or purports to have an ownership interest of any nature (whether exclusively, jointly with another Person or otherwise); (B) the jurisdiction in which such item of Registered IP has been registered or filed and the applicable registration or serial number; (C) any other Person that has an ownership interest in such item of Registered IP and the nature of such ownership interest; and (D) each product or service identified in Part 2.12(a)(i) of the Seller Disclosure Schedule that embodies, incorporates, or is based upon or derived from (or, with respect to products and services under development, that is expected to embody, utilize or be based upon or derived from) such item of Registered IP;

        (iii)   in Part 2.12(a)(iii) of the Seller Disclosure Schedule: (A) all Intellectual Property Rights or Intellectual Property licensed to the Seller (other than any non-customized software that: (1) is so licensed solely in executable or object code form pursuant to a nonexclusive, internal use software license, (2) is not incorporated into, or used directly in the development, manufacturing or distribution of, the products or services of the Seller and (3) is generally available on standard terms for less than $20,000); (B) the corresponding Contract or

9

 

Contracts pursuant to which such Intellectual Property Rights or Intellectual Property is licensed to the Seller; and (C) whether the license or licenses so granted to the Seller are exclusive or nonexclusive; and

         (iv)   in Part 2.12(a)(iv) of the Seller Disclosure Schedule, each Contract pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in, any Seller IP.

         (b)    The Seller has provided to the Purchaser a complete and accurate copy of each standard form of Seller IP Contract currently used by the Seller, including each standard form of: (i) end user license agreement; (ii) development agreement; (iii) distributor or reseller agreement; (iv) employee agreement containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision; (v) consulting or independent contractor agreement containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision; or (vi) confidentiality or nondisclosure agreement. Except for the nonexclusive licenses and rights granted in Contracts identified in Part 2.12(a)(iv) of the Seller Disclosure Schedule, the Seller is not bound by, and no Seller IP is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of the Seller to use, exploit, assert, or enforce any Seller IP anywhere in the world.

         (c)    Except as disclosed in Part 2.12(c) of the Seller Disclosure Schedule, the Seller exclusively owns all right, title and interest to and in the Seller IP (other than Intellectual Property Rights or Intellectual Property exclusively licensed to the Seller, as identified in Part 2.12(a)(iii) of the Seller Disclosure Schedule) free and clear of any Encumbrances (other than nonexclusive licenses granted pursuant to the Contracts listed in Part 2.12(a)(iv) of the Seller Disclosure Schedule). Without limiting the generality of the foregoing:

           (i)   in Part 2.12(a)(ii) of the Seller Disclosure Schedule, Seller has identified all Registered IP; all documents and instruments necessary to perfect the rights of the Seller in such Registered IP have been validly executed, delivered and filed in a timely manner with the appropriate Governmental Body;

          (ii)   each Person who is or was an employee or independent contractor of the Seller and who is or was involved in the creation or development of any Seller IP that has not been abandoned has signed an agreement containing an irrevocable assignment of Intellectual Property Rights to the Seller and confidentiality provisions protecting the Seller IP;

        (iii)   no Seller Employee has any claim, right (whether or not currently exercisable) or interest to or in any Seller IP;

         (iv)   to the best of the knowledge of the Seller and the Members, no employee or independent contractor of the Seller is: (A) bound by or otherwise subject to any Contract restricting him or her from performing his or her duties for the Seller; or (B) in breach of any Contract known to the Seller or the Members with any former employer or other Person concerning Intellectual Property Rights or confidentiality;

          (v)   no funding, facilities or personnel of any Governmental Body were used, directly or indirectly, to develop or create, in whole or in part, any Seller IP;

         (vi)   the Seller has taken all reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in all proprietary information held by the Seller, or purported to be held by the Seller, as a trade secret;

        (vii)   except as may be disclosed in Part 2.12(c)(vii) of the Seller Disclosure Schedule, since inception the Seller has never assigned or otherwise transferred ownership of, or agreed

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to assign or otherwise transfer ownership of, any Intellectual Property Right to any other Person;

       (viii)   the Seller is not now nor has ever been a member or promoter of, or a contributor to, any industry standards body or similar organization that could require or obligate the Seller to grant or offer to any other Person any license or right to any Seller IP; and

         (ix)   the Seller owns or otherwise has, and after the Closing the Purchaser will continue to have, all Intellectual Property Rights needed to conduct the business of the Seller as currently conducted and currently planned by the Seller to be conducted.

         (d)    All Seller IP is valid, subsisting and enforceable. Without limiting the generality of the foregoing:

           (i)   Seller holds no U.S. patents and has made no patent applications in the U.S.;

          (ii)   Seller holds no foreign patents and has made no foreign patent applications;

        (iii)   to the best of the knowledge of the Seller and the Members no trademark (whether registered or unregistered) or trade name owned, used, or applied for by the Seller conflicts or interferes with any trademark (whether registered or unregistered) or trade name owned, used or applied for by any other Person;

         (iv)   each item of Seller IP that is Registered IP is and at all times has been in compliance with all Legal Requirements, and all filings, payments and other actions required to be made or taken to maintain such item of Seller IP in full force and effect have been made by the applicable deadline;

          (v)   no application for a patent or for a copyright, mask work or trademark registration or any other type of Registered IP filed by or on behalf of the Seller has been abandoned, allowed to lapse or rejected;

         (vi)   Part 2.12(d)(vi) of the Seller Disclosure Schedule accurately identifies and describes each filing, payment, and action that must be made or taken on or before the date that is 120 days after the date of this Agreement in order to maintain each such item of Registered IP in full force and effect;

        (vii)   the Seller has provided to the Purchaser complete and accurate copies of all applications, correspondence and other material documents related to each such item of Registered IP;

       (viii)   no interference, opposition, reissue, reexamination or other Proceeding of any nature is or has been pending or, to the best of the knowledge of the Seller and the Members, threatened, in which the scope, validity or enforceability of any Seller IP is being, has been or could reasonably be expected to be contested or challenged; and

         (ix)   to the best of the knowledge of the Seller and the Members, there is no basis for a claim that any Seller IP is invalid or unenforceable.

         (e)    Except as disclosed in Part 2.12(e) of the Seller Disclosure Schedule, neither the execution, delivery or performance of any of the Transactional Agreements by the Seller nor the consummation of any of the Transactions will, with or without notice or the lapse of time, result in or give any other Person the right or option to cause or declare: (i) a loss of, or Encumbrance on, any Seller IP; (ii) a Breach of any Contract listed or required to be listed in Part 2.12(a)(iii) of the Seller Disclosure Schedule; (iii) the release, disclosure or delivery of any Seller IP by or to any escrow agent or other Person; or (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Seller IP.

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         (f)     To the best of the knowledge of the Seller and the Members, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any Seller IP. Part 2.12(f) of the Seller Disclosure Schedule accurately identifies (and the Seller has provided to the Purchaser a complete and accurate copy of) each letter or other written or electronic communication or correspondence that has been sent or otherwise delivered by or to the Seller or any Representative of the Seller regarding any actual, alleged or suspected infringement or misappropriation of any Seller IP and provides a brief description of the current status of the matter referred to in such letter, communication or correspondence.

         (g)    Except as disclosed in Part 2.12(g) of the Seller Disclosure Schedule, the Seller has never infringed (directly, contributorily, by inducement or otherwise), misappropriated or otherwise violated any Intellectual Property Right of any other Person. Without limiting the generality of the foregoing:

           (i)   no product, information or service ever manufactured, produced, distributed, published, used, provided or sold by or on behalf of the Seller, and no Intellectual Property ever owned, used or developed by the Seller, has ever infringed, misappropriated or otherwise violated any Intellectual Property Right of any other Person;

          (ii)   no infringement, misappropriation or similar claim or Proceeding is pending, or to the best of the knowledge of Seller or the Members has been threatened, against the Seller or against any other Person who may be entitled to be indemnified, defended, held harmless or reimbursed by the Seller with respect to such claim or Proceeding (other than as described in Parts 2.12(g), 2.14(a) and 2.25 of the Seller Disclosure Schedule);

        (iii)   to its knowledge, the Seller has never received any notice relating to any actual, alleged or suspected infringement, misappropriation or violation of any Intellectual Property Right of another Person (other than as described in Parts 2.12(g), 2.14(a) and 2.25 of the Seller Disclosure Schedule);

         (iv)   the Seller is not bound by any Contract to indemnify, defend, hold harmless or reimburse any other Person with respect to any intellectual property infringement, misappropriation or similar claim (other than pursuant to the standard forms of Seller IP Contracts described in Section 2.12(b) or Contracts described in Part 2.12(g) of the Seller Disclosure Schedule);

          (v)   the Seller has never assumed, or agreed to discharge or otherwise take responsibility for, any existing or potential liability of another Person for infringement, misappropriation or violation of any Intellectual Property Right (other than pursuant to the standard forms of Seller IP Contracts described in Section 2.12(b)); and

         (vi)   no claim or Proceeding involving any Intellectual Property or Intellectual Property Right licensed to the Seller is pending or, to the best of the knowledge of the Seller and the Members, has been threatened, except for any such claim or Proceeding that, if adversely determined, would not adversely affect: (A) the use or exploitation of such Intellectual Property or Intellectual Property Right by the Seller; or (B) the manufacturing, distribution or sale of any product or service being developed, offered, manufactured, distributed or sold by the Seller.

         (h)    None of the Seller Software (other than Seller Software that is (i) currently under development and (ii) is not, as of the date hereof, the subject of any license agreements or customer contract of any kind): (i) contains any bug, defect or error (including any bug, defect or error relating to or resulting from the display, manipulation, processing, storage, transmission or use of date data) that materially and adversely affects the use, functionality or performance of such

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Seller Software or any product or system containing or used in conjunction with such Seller Software; or (ii) fails to comply with any applicable warranty or other contractual commitment relating to the use, functionality or performance of such software or any product or system containing or used in conjunction with such Seller Software. The Seller has provided to the Purchaser a complete and accurate list of all known bugs, defects and errors in each version and component of the Seller Software.

         (i)     None of the Seller Software contains any "back door," "drop dead device," "time bomb," "Trojan horse," "virus," or "worm" (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii) damaging or destroying any data or file without the user's consent.

         (j)     None of the Seller Software is subject to any "copyleft" or other obligation or condition (including any obligation or condition under any "open source" license such as the GNU Public License, Lesser GNU Public License or Mozilla Public License) that: (i) could or does require, or could or does condition the use or distribution of such Seller Software on, the disclosure, licensing or distribution of any source code for any portion of such Seller Software; or (ii) could or does otherwise impose any limitation, restriction or condition on the right or ability of the Seller to use or distribute any Seller Software.

         (k)    Except as identified in Part 2.12(k) of the Seller Disclosure Schedule, no source code for any Seller Software has been delivered, licensed or made available to any escrow agent or other Person who is not, as of the date of this Agreement, an employee of the Seller. The Seller does not have any duty or obligation (whether present, contingent or otherwise) to deliver, license or make available the source code for any Seller Software to any escrow agent or other Person who is not, as of the date of this Agreement, an employee of the Seller. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, result in the delivery, license or disclosure of any source code for any Seller Software to any other Person who is not, as of the date of this Agreement, an employee of the Seller.

         2.13   Contracts.

         (a)    The Seller has delivered to the Purchaser accurate and complete copies of all Contracts identified in Part 2.13 of the Seller Disclosure Schedule, including all amendments thereto. Each Seller Contract is valid and in full force and effect.

         (b)    Except as set forth in Part 2.13 of the Seller Disclosure Schedule: (i) the Seller has not violated or breached, or declared or committed any default under, any Seller Contract; (ii) no event has occurred, and no circumstance or condition exists, that might (with or without notice or lapse of time) (A) result in a violation or breach by the Seller of any of the provisions of any Seller Contract, (B) give Seller the right to declare a default or exercise any remedy under any Seller Contract, (C) give Seller the right to accelerate the maturity or performance of any Seller Contract, or (D) give Seller the right to cancel, terminate or modify any Seller Contract; (iii) the Seller has not received any written notice regarding any actual, alleged, possible or potential violation or breach of, or default under, any Seller Contract; and (iv) the Seller has not waived any right under any Seller Contract.

         (c)    Except as set forth in Part 2.13 of the Seller Disclosure Schedule, to the best of the knowledge of the Seller and the Members, each Person against which the Seller has or may

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acquire any rights under any Seller Contract is solvent and is able to satisfy all of such Person's current and future monetary obligations and other obligations and Liabilities thereunder.

         (d)    Except as set forth in Part 2.13 of the Seller Disclosure Schedule, the Seller has never guaranteed or otherwise agreed to cause, insure or become liable for, and the Seller has never pledged any of its assets to secure, the performance or payment of any obligation or other Liability of any other Person. The performance of the Seller Contracts by the Seller will not result in any violation of or failure to comply with any Legal Requirement. No Person is renegotiating, or has the right to renegotiate, any amount paid or payable to the Seller under any Seller Contract or any other term or provision of any Seller Contract.

         (e)    The Contracts identified in Part 2.13 of the Seller Disclosure Schedule collectively constitute all of the Contracts necessary to enable the Seller to conduct its business in the manner in which such business is currently being conducted.

         2.14   Liabilities.

         (a)    Except as set forth in Part 2.14 of the Seller Disclosure Schedule, the Seller has no Liabilities, except for: (i) liabilities identified as such in the "liabilities" columns of the audited balance sheet of the Seller included in the Financial Statements; (ii) Liabilities incurred by the Seller in bona fide transactions entered into in the Ordinary Course of Business since December 31, 2004; (iii) obligations under the Contracts listed in Part 2.13 of the Seller Disclosure Schedule; and (iv) the other Liabilities of Seller listed in Part 2.14 of the Seller Disclosure Schedule.

         (b)    Part 2.14 of the Seller Disclosure Schedule: (i) provides an accurate and complete breakdown and aging of the accounts payable of the Seller as of December 31, 2004; (ii) provides an accurate and complete breakdown of any customer deposits or other deposits held by the Seller as of the date of this Agreement; and (iii) provides an accurate and complete breakdown of all notes payable and other indebtedness of the Seller as of the date of this Agreement.

         (c)    Except as set forth in Part 2.14 of the Seller Disclosure Schedule, the Seller has not paid, and the Seller is not and will not become liable for the payment of, any fees, costs or expenses of the type referred to in Section 8.2(a).

         (d)    Neither the Seller nor any Member has, at any time, (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against it, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of its assets, (iv) admitted in writing its inability to pay its debts as they become due, or (v) taken or been the subject of any action that may have an adverse effect on its ability to comply with or perform any of its covenants or obligations under any of the Transactional Agreements.

         2.15   Compliance with Legal Requirements .    Except as set forth in Part 2.15 of the Seller Disclosure Schedule: (a) the Seller is in compliance with each Legal Requirement that is applicable to it or to the conduct of its business or the ownership or use of any of its assets; (b) the Seller has at all times been in compliance with each Legal Requirement that is or was applicable to it or to the conduct of its business or the ownership or use of any of its assets; (c) no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) constitute or result directly or indirectly in a violation by the Seller of, or a failure on the part of the Seller to comply with, any Legal Requirement in all material respects; and (d) the Seller has not received, at any time, any written notice from any Governmental Body or any other Person regarding (i) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement, or (ii) any actual, alleged, possible or potential obligation on the part of the Seller to undertake, or to bear all or any portion of the cost of, any cleanup or any remedial, corrective or response action of any nature. The Members and the Seller have delivered to the Purchaser an accurate and complete copy of each report, study,

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survey or other document to which the Members or the Seller has access that addresses or otherwise relates to the compliance of the Seller with, or the applicability to the Seller of, any Legal Requirement.

         2.16   Governmental Authorizations.     Part 2.16 of the Seller Disclosure Schedule identifies: (a) each Governmental Authorization that is held by the Seller; and (b) each other Governmental Authorization that, to the best of the knowledge of each of the Members and the Seller, is held by any employee of the Seller and relates to or is useful in connection with the business of the Seller. The Members and the Seller have delivered to the Purchaser accurate and complete copies of all of the Governmental Authorizations identified in Part 2.16 of the Seller Disclosure Schedule, including all renewals thereof and all amendments thereto. Each Governmental Authorization identified or required to be identified in Part 2.16 of the Seller Disclosure Schedule is valid and in full force and effect. Except as set forth in Part 2.16 of the Seller Disclosure Schedule: (i) the Seller is and has at all times been in compliance in all material respects with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Part 2.16 of the Seller Disclosure Schedule; (ii) no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) (A) constitute or result directly or indirectly in a violation of or a failure by the Seller to comply with any term or requirement of any Governmental Authorization identified or required to be identified in Part 2.16 of the Seller Disclosure Schedule, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization identified or required to be identified in Part 2.16 of the Seller Disclosure Schedule; (iii) the Seller has never received any written notice from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or (B) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization; and (iv) all applications required to have been filed for the renewal of the Governmental Authorizations required to be identified in Part 2.16 of the Seller Disclosure Schedule have been duly filed on a timely basis with the appropriate Governmental Bodies, and each other notice or filing required to have been given or made with respect to such Governmental Authorizations has been duly given or made on a timely basis with the appropriate Governmental Body. The Governmental Authorizations identified in Part 2.16 of the Seller Disclosure Schedule constitute all of the Governmental Authorizations necessary (i) to enable the Seller to conduct its business in the manner in which such business is currently being conducted, and (ii) to permit the Seller to own and use its assets in the manner in which they are currently owned and used.

         2.17   Tax Matters.

         (a)    Each Tax required to have been paid, or claimed by any Governmental Body to be payable, by the Seller has been duly paid in full on a timely basis. Any Tax required to have been withheld or collected by the Seller has been duly withheld and collected; and (to the extent required) each such Tax has been paid to the appropriate Governmental Body.

         (b)    Part 2.17 of the Seller Disclosure Schedule accurately identifies each examination or audit of any Tax Return of the Seller that has been conducted since inception. The Members and the Seller have delivered to the Purchaser accurate and complete copies of all audit reports and similar documents (to which any Member or the Seller has access) relating to such Tax Returns.

         (c)    Except as set forth in Part 2.17 of the Seller Disclosure Schedule, no claim or other Proceeding is pending, or to the best of the knowledge of the Seller and the Members has been threatened, against or with respect to the Seller in respect of any Tax. There are no unsatisfied Liabilities for Taxes (including liabilities for interest, additions to tax and penalties thereon and related expenses) with respect to any notice of deficiency or similar document received by the

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Seller. The Seller has not entered into or become bound by any agreement or consent pursuant to Section 341(f) of the Code.

         (d)    There is no agreement, plan, arrangement or other Contract covering any Seller Employee that, individually or collectively, could give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162 of the Code.

         (e)    The Seller has delivered to (or made available for inspection by) the Purchaser accurate and complete copies of all Tax Returns that have been filed on behalf of or with respect to the Seller since inception. Except as disclosed in Part 2.17 of the Seller Disclosure Schedule, the information contained in such Tax Returns is accurate and complete in all material respects.

         2.18   Employee And Labor Matters.

         (a)    Part 2.18(a) of the Seller Disclosure Schedule accurately sets forth, with respect to each employee of the Seller who will be employed by the Purchaser on the Closing Date (including any employee of the Seller who is on a leave of absence or on layoff status):

           (i)   the name of such employee and the date as of which such employee was originally hired by the Seller;

          (ii)   such employee's title, and a description of such employee's duties and responsibilities;

        (iii)   the aggregate dollar amount of the compensation (including wages, salary, commissions, director's fees, fringe benefits, bonuses, profit-sharing payments and other payments or benefits of any type) received by such employee from the Seller with respect to services performed in 2004;

         (iv)   such employee's annualized compensation as of the date of this Agreement;

          (v)   each Seller Employee Plan in which such employee participates or is eligible to participate; and

         (vi)   any Governmental Authorization that is held by such employee and that relates to or is useful in connection with the Seller's business.

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         (b)    Except as set forth in Part 2.18(b) of the Seller Disclosure Schedule, the employment of each of the Seller's employees who will be employed by the Purchaser on the Closing Date is terminable by the Seller at will and any such termination would not result in any amount of severance or other payment owing to such employee. The Seller has delivered to the Purchaser accurate and complete copies of all employee manuals and handbooks, disclosure materials, policy statements and other materials relating to the employment of the current and former employees of the Seller.

         (c)    To the best of the knowledge of the Seller and the Members, as to each employee of the Seller who will be employed by the Purchaser on the Closing Date:

           (i)   such employee does not intend to terminate his employment with the Seller;

          (ii)   such employee has not received an offer to join a business that may be competitive with the Seller's business; and

        (iii)   such employee is not a party to or is not bound by any confidentiality agreement, noncompetition agreement or other Contract (with any Person other than the Seller) that may have an adverse effect on: (A) the performance by such employee of any of his duties or responsibilities as an employee of the Seller; or (B) the Seller's business or operations.

         (d)    Part 2.18(d) of the Seller Disclosure Schedule accurately sets forth, with respect to each independent contractor of the Seller whose services will be continued by the Purchaser after the Closing Date:

           (i)   the name of such independent contractor and the date as of which such independent contractor was originally hired by the Seller;

          (ii)   a description of such independent contractor duties and responsibilities;

        (iii)   the aggregate dollar amount of the compensation (including all payments or benefits of any type) received by such independent contractor from the Seller with respect to services performed in 2004;

         (iv)   the terms of compensation of such independent contractor; and

          (v)   any Governmental Authorization that is held by such independent contractor and that relates to or is useful in connection with the Seller's business.

         (e)    Except as set forth in Part 2.18(e) of the Seller Disclosure Schedule, the Seller is not a party to or bound by, and the Seller has never been a party to or bound by, any employment agreement or any union contract, collective bargaining agreement or similar Contract.

         (f)     There has never been any slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting the Seller, any such slowdown, work stoppage, labor dispute or union organizing activity or any similar activity or dispute. To the best of the knowledge of the Seller and the Members, no event has occurred, and no condition or circumstance exists, that might directly or indirectly give rise to or provide a basis for the commencement of any such slowdown, work stoppage, labor dispute or union organizing activity or any similar activity or dispute. There are no actions, suits, claims, labor disputes or grievances pending or, to the best of the knowledge of the Seller and the Members, threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Seller Employee, including, without limitation, charges of unfair labor practices or discrimination complaints.

         2.19   Employee Benefit Plans and Compensation.

         (a)    Part 2.19(a) of the Seller Disclosure Schedule contains an accurate and complete list as of the date hereof of each Seller Employee Plan and each Seller Employee Agreement. The Seller

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does not intend nor has it committed to establish or enter into any new Seller Employee Plan or Seller Employee Agreement, or to modify any Seller Employee Plan or Seller Employee Agreement (except to conform any such Seller Employee Plan or Seller Employee Agreement to the requirements of any applicable Legal Requirements, in each case as previously disclosed to the Purchaser in writing or as required by this Agreement).

         (b)    The Seller has delivered to the Purchaser: (i) correct and complete copies of all documents setting forth the terms of each Seller Employee Plan and each Seller Employee Agreement, including all amendments thereto and all related trust documents; (ii) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection with each Seller Employee Plan; (iii) if the Seller Employee Plan is subject to the minimum funding standards of Section 302 of ERISA, the most recent annual and periodic accounting of Seller Employee Plan assets; (iv) the most recent summary plan description together with the summaries of material modifications thereto, if any, required under ERISA with respect to each Seller Employee Plan; (v) all material written Contracts relating to each Seller Employee Plan, including administrative service agreements and group insurance contracts; (vi) all written materials provided to any Seller Employee relating to any Seller Employee Plan and any proposed Seller Employee Plans, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events that would result in any liability to the Seller or any Seller Affiliate; (vii) all correspondence to or from any Governmental Body relating to any Seller Employee Plan; (viii) all COBRA forms and related notices; (ix) all insurance policies in the possession of the Seller or any Seller Affiliate pertaining to fiduciary liability insurance covering the fiduciaries for each Seller Employee Plan; (x) all discrimination tests required under the Code for each Seller Employee Plan intended to be qualified under Section 401(a) of the Code for the three most recent plan years; and (xi) the most recent IRS determination or opinion letter issued with respect to each Seller Employee Plan intended to be qualified under Section 401(a) of the Code.

         (c)    The Seller and each of the Seller Affiliates have performed all material obligations required to be performed by them under each Seller Employee Plan and are not in material default or material violation of, and neither the Seller nor any of the Members have knowledge of any material default or material violation by any other party to, the terms of any Seller Employee Plan, and each Seller Employee Plan has been established and maintained substantially in accordance with its terms and in substantial compliance with all applicable Legal Requirements, including ERISA and the Code. Any Seller Employee Plan intended to be qualified under Section 401(a) of the Code has obtained a favorable determination letter (or opinion letter, if applicable) as to its qualified status under the Code. No "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Seller Employee Plan. There are no claims or Proceedings pending, or, to the best of the knowledge of the Seller and the Members threatened or reasonably anticipated (other than routine claims for benefits), against any Seller Employee Plan or against the assets of any Seller Employee Plan. Each Seller Employee Plan (other than any Seller Employee Plan to be terminated prior to the Closing in accordance with this Agreement) can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without liability to the Purchaser, the Seller or any Seller Affiliate (other than ordinary administration expenses). There are no audits, inquiries or Proceedings pending or, to the best of the knowledge of the Seller and the Members threatened, by the IRS, DOL, or any other Governmental Body with respect to any Seller Employee Plan. Neither the Seller nor any Seller Affiliate has ever incurred any penalty or tax with respect to any Seller Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code. The

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Seller and each Seller Affiliates have made all contributions and other payments required by and due under the terms of each Seller Employee Plan.

         (d)    Neither the Seller nor any Seller Affiliate has ever maintained, established, sponsored, participated in, or contributed to any: (i) Seller Pension Plan subject to Title IV of ERISA; or (ii) "multiemployer plan" within the meaning of Section (3)(37) of ERISA. Neither the Seller nor any Seller Affiliate has ever maintained, established, sponsored, participated in or contributed to, any Seller Pension Plan in which stock of the Seller or any Seller Affiliate is or was held as a plan asset. The fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide in full for the accrued benefit obligations, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to and obligations under such Foreign Plan, and no transaction contemplated by this Agreement shall cause any such assets or insurance obligations to be less than such benefit obligations.

         (e)    No Seller Employee Plan provides (except at no cost to the Seller or any Seller Affiliate), or reflects or represents any liability of the Seller or any Seller Affiliate to provide, retiree life insurance, retiree health benefits or other retiree employee welfare benefits to any Person for any reason, except as may be required by COBRA or other applicable Legal Requirements. Other than commitments made that involve no future costs to the Seller or any Seller Affiliate, neither the Seller nor any Seller Affiliate has ever represented, promised or contracted (whether in oral or written form) to any Seller Employee (either individually or to Seller Employees as a group) or any other Person that such Seller Employee(s) or other person would be provided with retiree life insurance, retiree health benefit or other retiree employee welfare benefits, except to the extent required by applicable Legal Requirements.

         (f)     Except as set forth in Part 2.19(f) of the Seller Disclosure Schedule, and except as expressly required or provided by this Agreement, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Employee Plan, Seller Employee Agreement, trust or loan that will or may result (either alone or in connection with any other circumstance or event) in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Seller Employee.

         (g)    Except as set forth in Part 2.19(g) of the Seller Disclosure Schedule, the Seller and each of the Seller Affiliates: (i) are, and at all times have been, in substantial compliance with all applicable Legal Requirements respecting employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to Seller Employees, including the health care continuation requirements of COBRA, the requirements of FMLA, the requirements of HIPAA and any similar provisions of state law; (ii) have withheld and reported all amounts required by applicable Legal Requirements or by Contract to be withheld and reported with respect to wages, salaries and other payments to Seller Employees; (iii) are not liable for any arrears of wages or any taxes or any penalty for failure to comply with the Legal Requirements applicable of the foregoing; and (iv) are not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Body with respect to unemployment compensation benefits, social security or other benefits or obligations for Seller Employees (other than routine payments to be made in the normal course of business and consistent with past practice). Except as disclosed in Part 2.19(g) of the Seller Disclosure Schedule, there are no pending or, to the best of the knowledge of the Seller and the Members, threatened

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or reasonably anticipated claims or Proceedings against the Seller or any Seller Affiliate under any worker's compensation policy or long-term disability policy.

         (h)    To the best of the knowledge of the Seller and the Members, no Seller Employee is obligated under any Contract or subject to any judgment, decree, or order of any court or other Governmental Body that would interfere with such Person's efforts to promote the interests of the Seller or that would interfere with the business of the Seller or any Seller Affiliate. Neither the execution nor the delivery of this Agreement, nor the carrying on of the business of the Seller or any Seller Affiliate as presently conducted nor any activity of such shareholder or Seller Employees in connection with the carrying on of the business of the Seller or any Seller Affiliate as presently conducted will, to the best of the knowledge of the Seller and the Members, conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default under, any Contract under which any of such shareholders or Seller Employees is now bound.

         2.20   Environmental Matters.

         (a)    The Seller is not liable or potentially liable for any response cost or natural resource damages under Section 107(a) of CERCLA, or under any other so-called "superfund" or "superlien" law or similar Legal Requirement, at or with respect to any site.

         (b)    The Seller has never received any notice from any Governmental Body or other Person regarding any actual, alleged, possible or potential Liability arising from or relating to the presence, generation, manufacture, production, transportation, importation, use, treatment, refinement, processing, handling, storage, discharge, release, emission or disposal of any Hazardous Material. No Person has ever commenced or threatened to commence, any contribution action or other Proceeding against the Seller in connection with any such actual, alleged, possible or potential Liability; and no event has occurred, and no condition or circumstance exists, that may directly or indirectly give rise to, or result in the Seller becoming subject to, any such Liability.

         (c)    The Seller has never generated, manufactured, produced, transported, imported, used, treated, refined, processed, handled, stored, discharged, released or disposed of any Hazardous Material (whether lawfully or unlawfully), nor permitted (knowingly or otherwise) any Hazardous Material to be generated, manufactured, produced, used, treated, refined, processed, handled, stored, discharged, released or disposed of (whether lawfully or unlawfully): (i) on or beneath the surface of any real property that is, or that has at any time been, owned by, leased to, controlled by or used by the Seller; (ii) in or into any surface water, groundwater, soil or air associated with or adjacent to any such real property; or (iii) in or into any well, pit, pond, lagoon, impoundment, ditch, landfill, building, structure, facility, improvement, installation, equipment, pipe, pipeline, vehicle or storage container that is or was located on or beneath the surface of any such real property or that is or has at any time been owned by, leased to, controlled by or used by the Seller.

         2.21   Performance of Services.     All services that have been performed on behalf of the Seller were performed in all material respects in full conformity with the terms and requirements of all applicable warranties and other Contracts and with all applicable Legal Requirements. The Purchaser will not incur or otherwise become subject to any Liability arising directly or indirectly from any services performed by the Seller. There is no claim pending or, to the best knowledge of the Seller and the Members being threatened, against the Seller relating to any services performed by the Seller, and, to the best of the knowledge of the Members and the Seller, there is no basis for the assertion of any such claim.

         2.22   Insurance .    Part 2.22 of the Seller Disclosure Schedule identifies each insurance claim made by the Seller since December 31, 2002. No event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) directly or indirectly give rise to or serve as a basis

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for any such insurance claim. The Seller has not received: (i) any written notice regarding the actual or possible cancellation or invalidation of any of the Seller's insurance policies or regarding any actual or possible adjustment in the amount of the premiums payable