ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is entered into as of April 24, 2007, by and between VA Software Corporation ,   a Delaware corporation (the " Seller "), and CollabNet, Inc. , a Delaware corporation (the " Purchaser "). Certain capitalized terms used in this Agreement are defined in Exhibit A .

WHEREAS , the Seller, through its enterprise software division, is engaged in the business of developing, licensing, supporting and maintaining the SFEE Software   (the " Business "); and

WHEREAS , upon and subject to the terms and conditions set forth herein, the Seller proposes to sell to the Purchaser, and the Purchaser proposes to purchase from the Seller, substantially all of the assets used or held for use by the Seller in the conduct of the Business and all of the assets needed to conduct the Business after the Closing, and the Purchaser proposes to assume certain of the liabilities and obligations of the Seller related to the Business.

NOW, THEREFORE , in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, each party hereby agrees as follows:

1.1    Sale of Transferred Assets; Excluded Assets . The Seller shall sell, assign, transfer, convey and deliver to the Purchaser at the Closing (as defined in Section 1.8), good and valid title to the Transferred Assets (as defined below), free of any Encumbrances, on the terms and subject to the conditions set forth in this Agreement. For purposes of this Agreement, " Transferred Assets " means the following assets, provided , however , that the Transferred Assets shall not include any assets identified on Part 1.1 of the Disclosure Schedule (" Excluded Assets "):

(a)    all development, test/build, and personal computer and storage devices and other associated electronic equipment identified in Part 2.8 of the Disclosure Schedule;

(b)    all marketing contact and lead databases data possessed by the Seller that primarily relates to the Business;

(c)    all Intellectual Property and Intellectual Property Rights identified in Part 1.1(c) of the Disclosure Schedule, all Intellectual Property Rights in the Intellectual Property identified in Part 1.1(c) of the Disclosure Schedule, and all goodwill of the Seller related to any of the foregoing;  

(d)    all rights of the Seller under those Seller Contracts and Seller IP Contracts identified in Part 1.1(d) of the Disclosure Schedule;

(e)    all rights of the Seller under the Third Party Software licenses identified in Part 1.1(e) of the Disclosure Schedule;

(f)    all rights of the Seller in those Seller Contracts for marketing, PR relationships, tradeshow space and booths, analyst relationships and other fully or partially paid for marketing activities that primarily relate to the Business identified in Part 1.1(f) of the Disclosure Schedule;

(g)    all historical support and other related CRM data exclusively pertaining to the Business identified in Part 1.1(g) of the Disclosure Schedule;

(h)    all Governmental Authorizations identified in Part 2.11(b) of the Disclosure Schedule;

(i)    all claims (including claims for past infringement or misappropriation of Intellectual Property or Intellectual Property Rights and claims for breach or other violation of any Seller Contract) 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) to the extent that they pertain to the Business, and all rights of indemnity, warranty rights, rights of contribution, deposits, prepayments, rights to refunds, rights of reimbursement and other rights of recovery possessed by the Seller (regardless of whether such rights are currently exercisable) to the extent that they relate to the Business; however, notwithstanding the foregoing, the Seller retains its rights to such claims and causes of action described above that (a) arise prior to Closing and affect the Seller’s business and (ii) arise post-Closing (solely to the extent they are required to protect any of the Seller’s rights in its ongoing business operations);

(j)    all proceeds under any insurance policies (other than any director and officer policies) payable with respect to Claims arising out of, or in connection with, the Transferred Assets or the Assumed Liabilities (as defined in Section 1.5(a)), to the extent such Claims pertain to matters which arose prior to the Closing;

(k)    all books, records, files and data of the Seller that exclusively pertain to the Business, including any files relating to the Transitioning Employees; and

(l)    all goodwill of the Business.

1.2    Agreements Relating to Transfer of Transferred Assets . The Seller and the Purchaser agree that all of the Transferred Assets (including software and any related documentation) that can be transmitted to the Purchaser electronically will be so delivered to the Purchaser promptly following the Closing and will not be delivered to the Purchaser on any tangible medium.

1.3    Purchase Price .

(a)    As consideration for the sale, assignment, transfer, conveyance and delivery of the Transferred Assets to the Purchaser:

(i)    at the Closing, the Purchaser shall pay or cause to be paid to the Seller $19,404 in cash by check or wire transfer of immediately available funds to an account provided to the Purchaser by the Seller, which amount constitutes (i) the remaining balance of $59,404 owed by Seller on the license agreement with Stellent, Inc., less (ii) the $40,000 payable by Purchaser to Seller pursuant to Section 7.8 hereof;

(ii)    the Purchaser shall issue and deliver to the Seller on the Closing date 11,733,777 shares of Purchaser’s Series C-1 Preferred Stock (the “ Stock Consideration ”), provided , that 2,933,444 of such shares (such portion of the Stock Consideration being the “ Escrowed Shares ”) shall be deposited with U.S. Bank, N.A. (the “ Escrow Agent ”) and held in escrow until April 24, 2008 to be released to the Seller in accordance with Article 6 hereto; and

(iii)    at the Closing, the Purchaser shall assume the Assumed Liabilities (as defined in Section 1.5(a)).

1.4    Media Access Payment. For Media Access Services as set forth in Exhibit B hereto, Purchaser shall pay a total of $2,000,000, payable as to (i) $500,000 on June 30, 2007, and (ii) the remaining $1,500,000 paid in seven (7) equal successive quarterly installments beginning September 30, 2007; provided , however , that Seller may invoice against such payment schedule on a monthly basis.

1.5    Assumption of Liabilities .

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

(i)    all customer service, support, maintenance and warranty obligations of the Seller under each of the Contracts identified on Part 1.1(d) of the Disclosure Schedule for the period commencing on the Closing Date (as further set forth in Section 3.1 of the Transition Services Agreement attached hereto as Exhibit C (the " Transition Services Agreement "), until such time as such a Contract is subject to a valid consent to assignment to Purchaser, in which case all obligations of the Seller under such Contract shall constitute “Assumed Liabilities” hereunder without further action; for the purpose of clarification, such obligations shall not include those obligations of Seller under such Contracts for the period prior to the Closing Date;

(ii)    the obligations or liabilities of the Seller as of the Closing Date for accrued paid time off of the Transitioning Employees who elect to have such amounts transition to the Purchaser, in amounts (with respect to each Transitioning Employee) not to exceed the amounts set forth in Part 1.5(a) of the Disclosure Schedule; provided , further , that such amounts do not exceed the maximum amounts allowable under the current vacation policies of the Purchaser (it being understood that any accrued paid time off in excess of such maximums will be paid out by Seller upon such employee’s termination of employment with Seller); and

(iii)    subject to the limitations set forth above in subsection (a)(i), all obligations and liabilities of the Business arising after the Closing.

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

(i)    any Liability of any other Person, except for the Liabilities of the Seller as specified in Section 1.5(a);

(ii)    any Liability of the Seller arising from or relating to the period prior to the Closing, including without limitation any Claim or Legal Proceeding against the Seller relating to Claims arising prior to the Closing;

(iii)    any Liability of Seller that does not pertain exclusively to the Business,

(iv)    any Liability of the Seller for the payment of any Tax, including Transfer Taxes allocated to the Seller as provided in Section 1.7);

(v)    any Liability of the Seller arising from or related to the pre-Closing employment of any Transitioning Employee (other than the Liabilities assumed pursuant to Section 1.5(a)(ii) (relating to accrued paid time off for certain Transitioning Employees);

(vi)    any Liability of the Seller arising from or related to the employment or termination of any Seller Employee who is not a Transitioning Employee; or

(vii)    Any Liability that is an obligation that may not be deductible under Section 280G of the Code or that could result in the imposition of additional Taxes under Section 409A of the Code.

1.6    Allocation . Within thirty (30) days following the Closing and subject to the reasonable approval of the Seller, the Purchaser shall prepare an allocation of the consideration referred to in Sections 1.3 and 1.4 among the Transferred Assets. The allocation referred to in the preceding sentence shall be made in accordance with: (a) the reasonable fair market values of the respective Transferred Assets and (b) the provisions of Section 1060 of the Internal Revenue Code of 1986, as amended (the " Code "), and the rules and regulations thereunder, and shall be binding, to the extent not in conflict with applicable Legal Requirements, upon the Purchaser and the Seller for all Tax purposes. The Purchaser and the Seller each further agrees to file, as applicable, its respective U.S. federal income tax returns and, to the extent not in conflict with applicable law, its respective other Tax Returns reflecting such allocation, Form 8594 and any other required reports by Section 1060 of the Code, in accordance with said allocation.

1.7    Transfer Taxes . All sales, use, value-added, gross receipts, excise, registration, stamp duty, transfer or other similar taxes or governmental fees (" Transfer Taxes ") imposed or levied by reason of, in connection with or attributable to this Agreement and the transactions contemplated hereby shall be borne 50% by the Purchaser and 50% by the Seller. The parties hereto shall cooperate, to the extent reasonably requested and permitted by applicable Legal Requirements, in minimizing any such Transfer Taxes, including but not limited to the transfer by remote electronic transmission of all Transferred Assets capable of being so transmitted in accordance with Section 1.2.

1.8    Closing . The execution, delivery and closing of the transactions contemplated by this Agreement (the " Closing ") shall take place at the offices of Perkins Coie LLP at 101 Jefferson Drive, Menlo Park, California 94025, at a time to be agreed upon by the Purchaser and the Seller on the date hereof. The date on which the Closing actually takes place is referred to in this Agreement as the " Closing Date ." At the Closing, the Purchaser shall have delivered to the Seller those documents specified in Section 5.1 hereof, and the Seller shall have delivered to the Purchaser those documents specified in Section 5.2 hereof.

The Seller represents and warrants to the Purchaser, subject to the exceptions set forth in the Disclosure Schedule, as follows:

2.1    Incorporation, Power and Authority.

(a)    The Seller has been duly incorporated, and is validly existing and in good standing, under the laws of the jurisdiction of its incorporation. The Seller has full power and authority: (i) to execute, deliver and perform this Agreement and the other Transactional Agreements; (ii) conduct the Business as of the date hereof in the manner in which it is currently being conducted; and (iii) to own and use the Transferred Assets in the manner in which such assets are currently owned and used.

(b)    The Seller is qualified, licensed or admitted to do business as a foreign corporation in the State of California and under the laws of all other jurisdictions where the property owned, leased or operated by it or the nature of its business requires such qualification, license or admission and where the failure to be so qualified, licensed or admitted would have a Material Adverse Effect.

2.2    Records . The books of account and other records of the Business of the Seller, including the historical data contained in the SFEE Business Report, that have provided to Purchaser (the " Financial Records ") are accurate, up to date and complete in all material respects, and have been maintained in accordance with prudent business practices. The Financial Records fairly present the results of operations of the Business in all material respects over the periods reflected therein.

2.3    SEC Documents . With respect to the Annual Report on Form 10-K filed by the Seller on October 17, 2006 and the Quarterly Reports on Form 10-Q filed by the Seller on March 12, 2007 and December 11, 2006, including all financial statements or schedules included therein, in each case, only to the extent they primarily relate to "Software Revenue" as set forth on the Consolidated Statements of Operations and Other Comprehensive Income/(Loss) and the description of the Business disclosed therein (the " SEC Documents "), as of the time such SEC Document was filed with the SEC (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, then on the date of such filing): (a) each of the SEC Documents complied in all material respects with the applicable requirements of the Securities Exchange Act of 1934, as amended; and (b) none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

2.4    Financial Controls . The Seller maintains accurate books and records relating to the Business that reflect its assets and liabilities and maintains proper and adequate internal accounting controls which provide assurance that (i) transactions are executed with management's authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements of the Business and to maintain accountability for the Business' consolidated assets; (iii) access to the Business' assets is permitted only in accordance with management's authorization; and (iv) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

2.5    Absence of Changes . Except as set forth in Part 2.5 of the Disclosure Schedule and since January 31, 2007: (a) there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances that have occurred or arisen, could reasonably be expected to have or result in a Material Adverse Effect; (b) there has not been any material loss, damage or destruction to any of the assets of the Business (whether or not covered by insurance); (c)  the Seller has not made any capital expenditure primarily relating to the Business that exceeds $100,000; (d) the Seller has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other Indebtedness relating to the Business; (e) other than the Transactions contemplated by this Agreement, the Seller has not entered into any material transaction outside the ordinary course of business or inconsistent with past practices with respect to the Business; (f) other than as contemplated by this Agreement, Seller has not sold or licensed any portion of the Business (including any tangible or intangible assets) other than in the ordinary course of business; (g) other than the Transactional Agreements, the Seller has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases and licenses) primarily related to the Business and outside the ordinary course of business; (h) no party to any contract involving the Business has accelerated, terminated, modified, or cancelled any agreement, contract, lease or license (or series of related agreements, contracts, leases, and licenses) involving more than $15,000; (i) Seller has not delayed or postponed the payment of accounts payable or other Liabilities pertaining to the Business; (j) other than as contemplated by this Agreement, Seller has not transferred, assigned or granted any license or sublicense with respect to Intellectual Property Rights pertaining to the Business, except in the ordinary course of business; (k) other than as contemplated by this Agreement, Seller has not granted any increase in the base compensation of any of the officers or managers of the Business who are Transitioning Employees or made any other material change in the terms of their employment, except in the ordinary course of business; (l) the Seller has not discharged a material Liability or Encumbrance pertaining to the Business outside of the ordinary course of business; (m) Seller has not paid any amount to any third party with respect to any Liability pertaining to the Business that would not constitute an Assumed Liability if in existence as of the Closing; and (n) the Seller has not agreed or committed to take any of the actions referred to in clauses "(c)" through "(m)" of this sentence with respect to the Business.

2.6    Title to Assets . Other than with respect to Seller IP, which is addressed in Section 2.9, the Seller owns, and has good and valid title to the Transferred Assets. All of said assets are owned by the Seller free and clear of any Encumbrances, except for (i) any lien for current Taxes not yet due and payable and (ii) Encumbrances described in Part 2.6 of the Disclosure Schedule, which Encumbrances will be released at the Closing.

2.7    Customers . The Seller has not received any written notice or other written communication indicating that any customer or development partner of the Business may cease dealing with the Seller or may otherwise reduce the volume of business transacted by such Person with the Business substantially below the level of business in the most recent 12-month period.

2.8    Equipment; Leasehold . Part 2.8 of the Disclosure Schedule accurately identifies all development, test/build, and personal computers and storage devices and other associated electronic equipment used exclusively in the conduct of the Business. Part 2.8 of the Disclosure Schedule also accurately identifies all leased tangible assets used exclusively in the conduct of the Business. Each asset identified or required to be identified in Part 2.8 of the Disclosure Schedule: (i) in good condition and repair (ordinary wear and tear excepted); (ii) is being operated and otherwise used in material compliance with, all applicable Legal Requirements; and (iii) is adequate and appropriate for the uses to which it is being put. The Seller has the right under valid and existing leases or other agreements to occupy and use all leased real property which it uses in the conduct of the Business.

2.9    Intellectual Property . 

(a)    Other than the Third Party Software licenses and Open Source Software licenses, to the Seller’s Knowledge, the Seller is not a party to any inbound third party license that is necessary to run the Business as currently conducted.

(b)    Part 2.9(b) of the Disclosure Schedule accurately identifies and describes 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; and (C) any other Person that has an ownership interest in such item of Registered IP and the nature of such ownership interest;

(c)    The Seller exclusively owns all right, title and interest to and in the Seller IP and Seller Technology.

(d)    Seller either owns and possesses or has the right to use pursuant to a valid and enforceable written license, sublicense, agreement or permission all Intellectual Property used in or necessary for use in the Business as presently conducted and can either assign or license such rights to the Purchaser. Seller has taken all reasonably necessary action to maintain and protect each item of Intellectual Property that it owns or uses that is primarily related to the Business. Without limiting the generality of the foregoing:

(i)    all documents and instruments necessary to establish, secure and perfect the rights of the Seller in the Seller IP that is 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 has signed an agreement containing an irrevocable assignment of Intellectual Property Rights to the Seller for which such Person is or was an employee or independent contractor;

(iii)    no funding, facilities or personnel of any Governmental Body or college, university or other education institution were used to develop or create, in whole or in part, any Seller Technology or any Seller IP;

(iv)    the Seller has taken all reasonable steps to maintain the confidentiality of all source code for SFEE Software and all other proprietary information held by the Seller, or purported to be held by the Seller, as a trade secret, which steps are no less rigorous than the steps used by Seller to maintain the confidentiality of its other most important source code and other proprietary information, and Part 2.9(d)(iv) of the Disclosure Schedule describes the protection procedures followed and other measures taken by the Seller to maintain such confidentiality;

(v)    no Seller IP Contract limits or restricts the ability of the Seller to use, exploit, assert or enforce any of its Intellectual Property Rights pertaining to the Business, including without limitation the Seller IP anywhere in the world, other than limits or restrictions arising from license grants under End User Licenses (with respect to each such licensee); and

(vi)    except as set forth in Part 2.9(d)(vi) of the Disclosure Schedule, the Seller is not under any obligation to pay any royalty or other compensation to any third Person under any Seller IP Contract pursuant to which the Seller has licensed any Intellectual Property Rights pertaining to the Business.

(e)    Except as set forth in Part 2.9(e) of the Disclosure Schedule, Seller has the right to convey, assign and/or license, as appropriate, the Intellectual Property Rights pertaining to the Business, including without limitation the Seller IP and Seller IP Contracts as contemplated by this Agreement and the Transactional Agreements.

(f)    To the Knowledge of the Seller, the Seller IP is valid, subsisting and enforceable. In each case,

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

(ii)    Part 2.9(f)(ii) of the Disclosure Schedule accurately identifies and describes each filing, payment, and action that must be made or taken on or before the date that is 90 days after the date of this Agreement in order to maintain each item of Seller IP that is Registered IP in full force and effect; and

(iii)    no interference, opposition, reissue, reexamination or other Legal Proceeding of any nature is or has been pending or to the Knowledge of the Seller is 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.

(g)    Neither the execution, delivery or performance of this Agreement or any of the Transactional Agreements, nor the consummation of any of the transactions contemplated herein or therein 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 or Seller Technology; (ii) the release, disclosure or delivery of any source code within the SFEE Software by or to any escrow agent or other Person; (iii) 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, Seller Technology; or (iv) to the Seller's Knowledge, a violation of any third party Intellectual Property Rights.

(h)    With respect to each item of Third Party Software identified in Part 1.1(e) of the Disclosure Schedule:

(i)    the license, sublicense, agreement or permission covering the item is legal, valid, binding, enforceable and in full force and effect;

(ii)    the license, sublicense, agreement or permission will continue to be legal, valid, binding and enforceable, and in full force and effect following the consummation of the transactions contemplated in the Transactional Agreements (including the assignments contained therein); and

(iii)    no party to the license, sublicense, agreement or permission is in breach or default, and no event has occurred that with notice or lapse of time would constitute a breach or default or permit termination, modification or acceleration thereunder.

(i)    To the Knowledge of Seller, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any Seller IP.    

(j)    To the Knowledge of Seller, the operation of the Business as currently conducted by Seller, including the design, development, use, import, branding, manufacture and sale of the SFEE Software as currently conducted by the Seller, does not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third Person. Seller has not received any charge, complaint, Claim, demand, or notice alleging any infringement, misappropriation or violation of Intellectual Property Rights of a third Person (including a Claim that Seller must license or refrain from using any Intellectual Property Rights pertaining to the Business).

(k)    None of the SFEE Software 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 SFEE 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 SFEE Software.

(l)    None of the SFEE 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.

(m)    The SFEE Software and other Intellectual Property included in the Transferred Assets does not constitute open source or freeware Intellectual Property, or any modification or derivative work thereof, including any version of any software licensed pursuant to any GNU General Public License or limited general public license, or pursuant to any license (other than licenses assigned to Purchaser and listed in Part 1.1(e) of the Disclosure Schedule) that purports to restrict a party's ability to charge for distribution or use of software or requires that derivative works of the software be made available to the public or otherwise used only pursuant to specified terms (collectively, "Open Source Software"), and no Open Source Software was used in, incorporated into, integrated or bundled with, the SFEE Software or any of the other Intellectual Property included in the Transferred Assets. The Open Source Software included in the Transferred Assets, as currently used and distributed in the conduct of the Business, does not, to the Seller's Knowledge, subject the proprietary software included in the Transferred Assets to any Open Source Software licenses.

(n)    Solely for the purpose of ensuring that the Purchaser may conduct the Business after the Closing as it is currently conducted, in the event and to the extent that the Seller either owns or licenses any Intellectual Property Rights in any of the Seller Technology after the Closing (collectively, the " Seller Retained IP "), Seller shall grant Purchaser a perpetual, nonrevocable, sublicensable, fully-paid up, royalty-free, limited license under the Seller Retained IP to make, use, sell, import, export, distribute, copy, perform, reproduce, make derivatives of the Seller Technology. Such license is transferable by the Purchaser only upon a change of control or sale of the assets related to the Business.

2.10    Contracts .

(a)    Parts 2.10(a)(i) through (xii) of the Disclosure Schedule identifies each Seller Contract that constitutes a "Material Contract" (other than End User Licenses). For purposes of this Agreement, each of the following shall be deemed to constitute a " Material Contract ":

(i)    any Seller Contract (A) that relates to the employment of, or the performance of Seller IP development services by any Seller Employee, (B) pursuant to which the Seller is or may become obligated to make any severance, termination or similar payment to any Seller Employee, or (C) pursuant to which the Seller is or may become obligated to make any bonus, commission or similar payment (other than payments constituting base salary) to any Seller Employee;

(ii)    any Seller IP Contract (including End User Licenses) for the acquisition, sale, transfer or development of any Intellectual Property or Intellectual Property Right, other than any agreements related to employment with the Seller described in Section 2.10(a)(i);

(iii)    any Seller Contract relating to the acquisition, sale, spinoff or outsourcing of any business unit or operation or any product line;

(iv)    any Seller Contract imposing any material restriction on the right or ability of the Seller (A) to compete with, or solicit any customer of, any other Person, (B) to acquire any product or other asset or any services from any other Person, (C) to solicit, hire or retain any Person as an employee, consultant or independent contractor, (D) to develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person, (E) to perform services for any other Person, or (F) to transact business with any other Person;

(v)    any Seller Contract creating or involving any agency relationship (including sales representative agreements), distribution or reseller arrangement or franchise relationship;

(vi)    any Seller Contract imposing any Encumbrance with respect to any Transferred Asset;

(vii)    any Seller Contract creating any partnership or joint venture or any sharing of revenues, profits, losses or costs, other than any Seller Contracts relating to employment;

(viii)    to the extent it exclusively relates to the Business, any Seller Contract involving the lease of real or personal property;

(ix)    any Seller Contract (A)  containing "standstill" or similar provisions, or (B) providing any right of first negotiation, right of first refusal or similar right to any Person;

(x)    any Seller Contract with a term of more than 60 days and that may not be terminated by the Seller (without penalty) within 60 days after the delivery of a termination notice by the Seller (other than routine nondisclosure agreements entered into by the Seller in the ordinary course of business and other than End User Licenses);

(xi)    any Seller Contract under which the Transactions would give rise to or expand any rights in favor of, or any obligations on the part of, the Seller or any other Person;

(xii)    any Seller Contract that could reasonably be expected to have or result in a material adverse effect on (A) the assets, Intellectual Property, liabilities, results of operations or financial performance of the Business or (B) the ability of the Seller to perform any of its obligations under this Agreement or to consummate any of the Transactions.

The Seller has made available to Purchaser an accurate and materially complete copy of each Seller Contract that constitutes a Material Contract.

(b)    Other than those Contracts that have expired or been terminated as of the Closing Date, each Seller Contract that constitutes a Material Contract is valid and in full force and effect, subject to (i) laws of general application relating to bankruptcy, insolvency, reorganization, moratorium and the enforcement of creditors' rights generally, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(c)    Except as set forth in Part 2.10(c) of the Disclosure Schedule: (i) the Seller is not in material violation, breach or default under any Material Contract, and, to the Knowledge of the Seller, no other party to any such Material Contract is in violation, breach or default under, any Material Contract; and (ii) to the Knowledge of the Seller, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) could reasonably be expected to (A) result in a material violation or breach of any of the provisions of any Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any Material Contract, (C) give any Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any Material Contract, (D) give any Person the right to accelerate the maturity or performance of any Material Contract, (E) result in the disclosure, release or delivery of any source code for any SFEE Software, or (F) give any Person the right to cancel, terminate or modify any Material Contract; and (iii) the Seller has not received any written notice regarding any violation or breach of, or default under, any Material Contract.

(d)    Except as set forth in Part 2.10(d) of the Disclosure Schedule, with respect to each of the Seller Contracts that is not being assigned to the Purchaser as of the Closing, such Seller Contract does not prohibit the subcontractor arrangement contemplated by Section 3.1 of the Transition Services Agreement), and such subcontractor arrangement does not result in a breach of such Seller Contract or give rise to a right for the other party to the Seller Contract to terminate such Seller Contract.

2.11    Compliance with Legal Requirements; Governmental Authorizations .

(a)    The Seller is in compliance in all material respects with all applicable Legal Requirements with respect to the Business. Except as set forth in Part 2.11(a) of the Disclosure Schedule, the Seller has not received any notice or other communication (in writing or otherwise) from any Governmental Body or other Person regarding any actual or possible violation of, or failure to comply with, any Legal Requirement with respect to the Business.

(b)    Part 2.11(b) of the Disclosure Schedule identifies each material Governmental Authorization held by the Seller related to the Business, and the Seller has made available to the Purchaser accurate and complete copies of all such Governmental Authorizations. The Governmental Authorizations identified in Part 2.11(b) of the Disclosure Schedule are valid and in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable the Seller to conduct the Business in the manner in which the Business is currently being conducted. Such Governmental Authorizations will be transferred to Purchaser upon completion of the transactions contemplated in the Transactional Documents, including the assignments contemplated therein. The Seller is in compliance in all material respects with the terms and requirements of the Governmental Authorizations identified in Part 2.11(b) of the Disclosure Schedule. The Seller has not received any notice or other communication (in writing or otherwise) from any Governmental Body regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental Authorization. No Governmental Body has at any time challenged in writing the right of the Seller to conduct the Business as currently conducted.

(c)    The Seller is in compliance in all material respects with all Legal Requirements relating to the export, re-export, import and transfer of products, commodities, services and technology from the jurisdiction of one Governmental Body to another with respect to the conduct of the Business.

2.12    Tax Matters .

(a)    The Seller (i) has timely paid all Taxes it is required to pay and (ii) has timely filed all required Tax Returns (" Seller Returns ") concerning or attributable to the Transferred Assets or the Business and such Seller Returns are true and correct and were completed in accordance with applicable Legal Requirements.

(b)    The Seller has timely paid or withheld with respect to the Seller Employees (and timely paid over any withheld amounts to the appropriate Taxing authority) all federal and state income Taxes and Federal Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes required to be withheld or paid.

(c)    The Seller does not know of any basis for the assertion of any Claim for any liabilities for unpaid Taxes for which the Purchaser would become liable as a result of the transactions contemplated by this Agreement or that would result in any Encumbrance on any of the Transferred Assets.

(d)    There are no Encumbrances with respect to any Taxes upon any of the Transferred Assets, other than with respect to Taxes not yet due and payable.

(e)    To the extent applicable to the Transferred Assets or the Purchaser’s ownership of the Transferred Assets or operation of the Business, the Seller has not been delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding, assessed or proposed against the Seller, nor has the Seller executed any outstanding waiver of any statute of limitations on or extension of the period for the assessment or collection of any Tax.

(f)    With respect to the Business, the Seller has no Tax holidays or similar Governmental Body Taxing authority incentives relating or available to the Seller. The Transactions will not have an adverse effect on the availability of any such Tax holiday or incentive prior to the Closing Date. To the extent applicable to the Transferred Assets or the Purchaser’s ownership of the Transferred Assets or operation of the Business, (i) no audit or other examination of any Seller Return is presently in progress, nor has the Seller been notified of any request for such an audit or other examination; (ii) no adjustment relating to any Seller Return has been proposed formally or, to the Knowledge of the Seller, informally by a Governmental Body to the Seller or any representative thereof; and (iii) no Claim is pending by a Governmental Body in a jurisdiction where the Seller does not file Seller Returns that it is or may be subject to taxation by that jurisdiction.

(g)    None of the Transferred Assets is (i) property required to be treated as being owned by another Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986, (ii) "tax-exempt use property" within the meaning of Section 168(h)(1) of the Code, (iii) "tax-exempt bond financed property" within the meaning of Section 168(g) of the Code, (iv) "limited use property" within the meaning of Rev. Proc. 76-30, or (v) subject to Section 168(g)(1)(A) of the Code.

(h)    None of the Assumed Liabilities is an obligation to make a payment that may not be deductible under Section 280G of the Code or that could result in the imposition of additional Taxes under Section 409A of the Code as a result of the transactions contemplated by this Agreement.

2.13    Employee and Labor Matters; Benefit Plans.

(a)    Part 2.13(a) of the Disclosure Schedule sets forth a complete and accurate list of each Transitioning Employee and independent contractor of the Seller that is currently providing services to, the Seller with respect to the Business (including any such individual who is on a leave of absence) who performs services exclusively with respect to the Business. To the extent applicable, Part 2.13(a) of the Disclosure Schedule also sets forth:

(i)    the name, title and date of hire of each individual;

(ii)    each individual's annual base salary and target bonus opportunity as of the date of this Agreement, or, in the case of an independent contractor, the terms of compensation of such independent contractor;

(iii)    each individual's accrued and unused vacation; and

(iv)    in the case of any individual that is an independent contractor, a brief description of such independent contractor's duties and responsibilities to the Seller.

(b)    To the Knowledge of the Seller: (i) no Transitioning Employee intends to terminate his or her employment with the Seller (other than by virtue of the transactions contemplated by this Agreement); (ii) no Transitioning Employee has received an offer to join a business that may be competitive with the Business; and (iii) no Transitioning Employee is a party to or is bound by any confidentiality agreement, noncompetition agreement or other Contract (with any Person) that may have a material adverse effect on: (A) the performance by such employee of any of his or her duties or responsibilities as an employee of the Seller; or (B) the Business with respect to the Transitioning Employees.

(c)    Except as set forth in Part 2.13(c) of the Disclosure Schedule, with respect to any Transitioning Employee, the Seller is not a party to or bound by any employment agreement or any union contract, collective bargaining agreement or similar Contract.

(d)    There has not been any slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting the Transitioning Employees. There is not now pending, and, to the Knowledge of the Seller, no Person has threatened to commence, any such slowdown, work stoppage, labor dispute or union organizing activity or any similar activity or dispute with respect to the Business. There are no actions, suits, Claims, labor disputes or grievances pending or, to the Knowledge of the Seller, threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Transitioning Employee, including charges of unfair labor practices or discrimination complaints.

(e)    Part 2.13(e) of the Disclosure Schedule contains an accurate and complete list as of the date hereof of each Seller Employee Plan and each Seller Employee Agreement, in each case as relates to any of the Transitioning Employees.

(f)    With respect to each Seller Employee Plan: (i) such Plan is, and at all times since inception has been, maintained, administered, operated and funded in all material respects in compliance with its terms and the requirements of any and all applicable laws, statutes, orders, rules and regulations, including, without limitation, ERISA, the Code and the regulations issued thereunder; and (ii) the Seller has in all material respects properly performed all obligations, whether arising by operation of law or contract, required to be performed by any of them in connection with such Plan.

(g)    Neither the Seller nor its ERISA Affiliates have ever maintained, established, sponsored, participated in, or contributed to any Seller Employee Plan that: (i) is subject to Title IV of ERISA; (ii) is a "multiemployer plan" within the meaning of Section 3(37) of ERISA; or (iii) promises or provides retiree medical or other retiree welfare benefits to any Person other than as required under COBRA or other applicable Legal Requirements.

2.14    Environmental Matters . The Seller possesses all permits and other Governmental Authorizations required under applicable Environmental Laws in respect of the Business, and is in material compliance with the terms and conditions thereof. The Seller has not received any notice or other communication (in writing or otherwise), whether from a Governmental Body, citizens group, employee or otherwise, that alleges that the Seller is not in compliance with any Environmental Law with respect to its operation of the Business.

2.15    Insurance . The Seller has in full force and effect insurance policies of the type and in an amount (subject to reasonable deductibles) sufficient to adequately cover the assets, business, equipment, properties and operations related to the Business.

2.16    Related Party Transactions . Except as set forth in Part 2.16 of the Disclosure Schedule, no Related Party has entered into, or has had any direct or indirect financial interest in, any Material Contract, transaction or business dealing involving the Seller in the conduct of the Business. For purposes of this Agreement, each of the following shall be deemed to be a " Related Party ": (i) each officer or director of the Seller; and (ii) any trust or other Entity (other than the Seller) in which any one of the Persons referred to in clause "(i)" above holds (or in which more than one of such individuals collectively hold), beneficially or otherwise, a material voting, proprietary or equity interest.

2.17    Legal Proceedings; Orders .

(a)    Except as set forth in Part 2.17(a)(i) of the Disclosure Schedule, there is no pending Legal Proceeding, and, to the Knowledge of the Seller, no Person has threatened in writing to commence any Legal Proceeding: (i) that specifically relates to the Business or the Transferred Assets; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Transactions.

(b)    There is no Order to which the Seller, or any of the Transferred Assets, is subject. To the Knowledge of the Seller, no Transitioning Employee is subject to any Order that prohibits such Transitioning Employee from engaging in or continuing any conduct, activity or practice relating to the Business.

2.18    Authority; Binding Nature of Agreement . The Seller has all requisite power and authority to enter into and to perform its obligations under each of the Transactional Agreements to which it is a party; and the execution, delivery and performance by the Seller of the Transactional Agreements to which it is a party have been duly authorized by all necessary corporate action on the part of the Seller. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar federal or state Legal Requirements affecting the rights of creditors. Upon the execution of each of the other Transactional Agreements at the Closing, each of such other Transactional Agreements to which the Seller is a party will constitute the legal, valid and binding obligation of the Seller and will be enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar federal or state Legal Requirements affecting the rights of creditors.

2.19    Non-Contravention; Consents . Except as set forth in Part 2.19 of the Disclosure Schedule, neither (i) the execution, delivery or performance of this Agreement or any of the Transactional Agreements, nor (ii) the consummation of the Transactions will directly or indirectly (with or without notice or lapse of time):

(a)    contravene, conflict with or result in a violation of (i) any of the provisions of the certificate of incorporation or bylaws of the Seller, or (ii) any resolution adopted by the stockholders, the board of directors or any committee of the board of directors of the Seller;

(b)    contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge the Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Seller, or any of the assets owned or used by the Seller, is subject;

(c)    contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by the Seller or that otherwise relates to the Business or to any of the assets owned or used by the Seller;

(d)    result in the imposition or creation of any Encumbrance upon or with respect to any Transferred Asset;

(e)    result in the disclosure or delivery to any escrow holder or other Person of any source code for any SFEE Software, or the transfer of any material asset of the Seller to any Person;

(f)    result in a breach of any contract or agreement to which Seller is a party or by which its assets may be bound, including without limitation, the Seller Contracts; or

(g)    require the Seller to make any filing with any Person in connection with (x) the execution, delivery or performance of this Agreement or any of the other Transactions, or (y) the consummation of the Transactions.

2.20    Financial Advisor . Except with respect to Updata Capital, Inc., the fees of which shall be paid entirely by the Seller, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Seller.

2.21    Sufficiency of Transferred Assets . The Transferred Assets will collectively constitute, as of the Closing Date, all of the properties, rights, interests and other tangible and intangible assets necessary and sufficient to enable the Purchaser to conduct the Business in the manner in which the Business is currently being conducted, provided that the Seller is making no representation or warranty hereby as to the adequacy of the working capital and/or cash available to fund the Business as it will operate following the Closing.

2.22    Marketing Contact and Lead Database Data . Part 1.1(g) of the Disclosure Schedule contains a true and complete listing of all marketing contact and lead database data primarily relating to the Business.

2.23    No Plans to Compete . As of the Closing Date, Seller has no plan or intention to offer any Competing Enterprise Software Product or Service.

The Purchaser represents and warrants to the Seller as follows:

3.1    Organization and Standing; Certificate and Bylaws . The Purchaser is a corporation duly organized and validly existing under, and by virtue of, the laws of the State of Delaware and is in good standing under such laws. The Purchaser has all requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted. The Purchaser is presently qualified to do business as a foreign corporation in good standing in each jurisdiction where the failure to be so qualified or in good standing would have a material adverse effect on the Purchaser’s business as now conducted.

3.2    Corporate Power . The Purchaser will have at the Closing Date all requisite legal and corporate power and authority to execute and deliver that certain Amendment No. 1 to the Purchaser’s Amended and Restated Stockholder Rights Agreement (the " Amendment to the Rights Agreement "), entered into by and among the Purchaser, the Seller and the other parties listed therein, to sell and issue the Stock Consideration to Seller, to issue the shares of the common stock of the Purchaser (the “ Common Stock ”) issuable upon conversion of the Stoc