STOCK PURCHASE AGREEMENT

 

                                                                     EXHIBIT 2.1

 

                            STOCK PURCHASE AGREEMENT

 

 

     STOCK PURCHASE AGREEMENT (this "Agreement") dated as of March 3, 2004 by

and between ITO HOLDINGS, LLC, a California limited liability company ("Seller")

and INFOCROSSING, INC., a Delaware corporation ("Purchaser").

 

 

                              W I T N E S S E T H:

 

 

     WHEREAS, Seller owns 1,000,000 shares (the "Shares") of common stock of ITO

Acquisition Corporation, a California corporation (the "Company"), such Shares

being all of the outstanding shares of capital stock of the Company;

 

     WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the

Shares pursuant to this Agreement; and

 

     WHEREAS, it is the intention of the parties hereto that, upon consummation

of the purchase and sale of the Shares pursuant to this Agreement, Purchaser

shall own all of the outstanding shares of capital stock of the Company.

 

     NOW, THEREFORE, in consideration of the premises and the mutual covenants

and promises hereinafter contained, and other good and valuable consideration,

the sufficiency of which is hereby acknowledged, the parties hereto intending to

be legally bound hereby agree as follows:

 

                                    ARTICLE I

 

                                   DEFINITIONS

 

     1.1   Definitions.

 

     (a) Defined Terms. When used in this Agreement, the following terms shall

have the respective meanings specified therefor below.

 

     "Affiliate" shall mean, with respect to any Person, any other Person

directly or indirectly controlling, controlled by, or under common control with,

such Person; provided that, for the purposes of this definition, "control"

(including, with correlative meanings, the terms "controlled by" and "under

common control with"), as used with respect to any Person, shall mean the

possession, directly or indirectly, of the power to direct or cause the

direction of the management and policies of such Person, whether through the

ownership of voting securities, by contract or otherwise and provided, further,

that an Affiliate of any Person shall also include (i) any Person that directly

or indirectly owns more than five percent (5%) of any class of capital stock or

other equity interest of such Person, (ii) any officer, director, trustee or

beneficiary of such Person, (iii) any spouse, parent, sibling or descendant of

any Person described in clauses (i) or (ii) above, and (iv) any trust for the

benefit of any Person described in clauses (i) through (iii) above or for any

spouse, issue or lineal descendant of any Person described in clauses (i)

through (iii) above.

 

     "Asset Transactions" shall mean each of the transactions consummated

pursuant to (i) that certain Asset Purchase Agreement, dated as of October 1,

2002, between the Company and Systems Management Specialists, Inc., a Delaware

corporation, as amended, (ii) that certain Asset Purchase Agreement, dated as of

June 27, 2003, between the Company and Acxiom Corporation, a Delaware

corporation and (iii) each other agreement to which the Company is a party

entered into in connection with either of the Asset Purchase Agreements

described in clauses (i) and (ii) above.

 

     "Books and Records" shall mean any and all of the books, records,

contracts, agreements and files of a Person, existing on or after the date of

this Agreement, including computer records and electronic copies of such

information.

 

     "Brea Facility" shall mean the real estate facility located at 3300 Birch

Street, Brea, California 92821 as more particularly described in the Brea

Facility Lease.

 

     "Brea Facility Lease" shall mean that certain Lease Agreement, dated as of

December 19, 2002, with respect to the Brea Facility, between Global Brea LLC,

as successor-in-interest to Birch Windell, LLC, as lessor, and the Company as

lessee, as amended as of January 1, 2004.

 

     "Business Day" shall mean any day, other than a Saturday, Sunday or a day

on which banks located in New York, New York or Los Angeles, California shall be

authorized or required by law to close.

 

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time

to time and the regulations promulgated and the rulings issued thereunder.

Section references to the Code are to the Code, as in effect at Closing Date and

any subsequent provisions of the Code, amendatory thereof, supplemental thereto

or substituted therefor.

 

     "Company Intellectual Property" shall mean any Intellectual Property or

rights thereto used by the Company in connection with its business and owned by

or under license to the Company.

 

     "Company Property" shall mean any real property and improvements owned

(directly, indirectly, or beneficially), leased, used, held for use, operated or

occupied by the Company.

 

     "Environmental Law" shall mean any Law, Order or other requirement of Law,

including any principle of common Law, relating to pollution or the protection

of human health or the environment, or to the identification, manufacture, use,

transport, treatment, storage or Release of Hazardous Substances, including (i)

CERCLA, (ii) the Toxic Substances Control Act, (iii) the Hazardous Materials

Transportation Act, (iv) the Resource Conservation and Recovery Act, (v) the

Clean Water Act, (vi) the Safe Drinking Water Act, (vii) the Clean Air Act,

(viii) the Occupational Safety and Health Act, (ix) the Federal Insecticide,

Fungicide, Rodenticide Act, (x) the Atomic Energy Act, and (xi) the Emergency

Planning and Community Right-to-Know Act.

 

     "Escrow Agent" shall mean the Escrow Agent named in the Escrow Agreement.

 

     'Escrow Agreement" shall mean the duly executed escrow agreement among

Purchaser, Seller and the escrow agent named therein substantially in the form

attached hereto as Exhibit D, subject to any modifications required by the

Escrow Agent and agreed upon by Purchaser and Seller.

 

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,

and the rules and regulations promulgated thereunder.

 

     "Facilities" shall mean each of the Brea Facility and the Woodland Hills

Facility.

 

     "Facility Leases" shall mean each of the Brea Facility Lease and the

Woodland Hills Facility Lease.

 

     "GAAP" shall mean U.S. generally accepted accounting principles.

 

     "Governmental or Regulatory Authority" shall mean any instrumentality,

subdivision, court, administrative agency, commission, official or other

authority of the United States or any other country or any state, province,

prefect, municipality, locality or other government or political subdivision

thereof, or any quasi-governmental or private body exercising any regulatory,

taxing, importing or other governmental or quasi-governmental authority.

 

     "Hazardous Substance" shall mean (a) any material, substance or waste

(whether liquid, gaseous or solid) that: (i) requires removal, remediation or

reporting under any Environmental Law, or is listed, classified or regulated as

a "hazardous waste" or "hazardous substance" (or other similar term) pursuant to

any applicable Environmental Law or (ii) is regulated under applicable

Environmental Laws as being, toxic, explosive, corrosive, flammable, infectious,

radioactive, carcinogenic, mutagenic or otherwise hazardous and (b) any

petroleum product or by-product, petroleum-derived substances wastes or

breakdown products, asbestos or polychlorinated biphenyls.

 

     "Hosted Materials" shall mean any software applications, databases or other

materials that are (i) owned by a customer of the Company, or licensed by such

customer from a third party, and (ii) provided to the Company by or on behalf

of, and hosted by the Company for, such customer. For the purposes of clarity,

any software applications, databases or other materials that the Company owns or

licenses from a third party and hosts or uses for its customers shall be deemed

to be Company Intellectual Property, and not Hosted Materials.

 

     "Indebtedness" of any Person shall mean and include (i) indebtedness for

borrowed money, whether or not contingent, or indebtedness issued or incurred in

substitution or exchange for indebtedness for borrowed money, (ii) amounts owing

as deferred purchase price for property or services, including all Seller notes

and "earn-out" payments, (iii) indebtedness evidenced by any note, bond,

debenture, mortgage or other debt instrument or debt security, (iv) obligations

or commitments to repay deposits or other amounts advanced by and owing to third

parties, (v) obligations under any interest rate, currency or other hedging

agreement, (vi) any obligation to pay rent or other amounts under any lease of

(or other arrangement conveying the right to use) real or personal property,

which such obligation is required to be treated as a capitalized lease under

GAAP, or (vii) guarantees or other contingent liabilities (including so called

take-or-pay or keep-well agreements) with respect to any indebtedness,

obligation, claim or liability of any other Person of a type described in

clauses (i) through (vi) above. Indebtedness shall not, however, include

accounts payable to trade creditors and accrued expenses arising in the ordinary

course of business consistent with past practice and shall not include the

endorsement of negotiable instruments for collection in the ordinary course of

business.

 

     "Intellectual Property' shall mean all intellectual property or other

proprietary rights of every kind, foreign or domestic, including all: (i)

inventions (whether or not patentable), patents, patent applications, invention

disclosures, and other rights of invention; (ii) trademarks, service marks,

trade names, trade dress, logos, domain names, product names and slogans,

including any common law rights, registrations, and applications for

registration for any of the foregoing, and the goodwill associated with all of

the foregoing; (iii) copyrights and other rights of authorship, and any

applications, registrations and renewals in connection therewith; (iv) trade

secrets, know-how and confidential and proprietary business or technical

information, including, without limitation, customer and supplier lists and

related information, pricing and cost information, business and marketing plans,

any other financial, marketing and business data, technical data, processes,

formulations, specifications and schematics; (v) computer applications,

operating systems, electronic data and databases, web sites (including all

related computer code and content) and any other software (including source code

and object code) or documentation for any of the foregoing; (vi) rights to

exclude others from appropriating any of such intellectual property including

the rights to sue for and remedies against past, present and future

infringements of any or all of the foregoing and rights of priority and

protection of interests therein under the laws of the United States and abroad;

and (vii) any licenses and other proprietary, intellectual property and other

rights relating to any or all of the foregoing.

 

     "IRS" shall mean the United States Internal Revenue Service.

 

     "Key Employees" shall mean the individuals set forth in Schedule 1.1(a).

 

     "Law" shall mean any statute, law, ordinance, rule or regulation of or by

any Governmental or Regulatory Authority.

 

     "Liens" shall mean liens, security interests, options, rights of first

refusal, claims, easements, mortgages, charges, indentures, deeds of trust,

rights of way, restrictions on the use of real property, encroachments, licenses

to third parties, leases to third parties, security agreements, or any other

encumbrances and other restrictions or limitations of any kind, including any

Lien under ERISA or the Code.

 

     "Material Adverse Effect" shall mean, (i) when used with respect to the

Company, any effect, event, occurrence, development, circumstance, change or

condition that, individually or in the aggregate with other effects, events,

occurrences, developments, circumstances, changes or conditions is, or would

reasonably be expected to be, materially adverse to the business, property,

assets, liabilities, results of operation, condition (financial or otherwise) of

the Company, other than changes or effects relating to general economic

conditions, which do not disproportionately affect the Company, or (ii) when

used with respect to Purchaser or Seller, as the case may be, any materially

adverse change in or effect on (including any material delay) the ability of

Purchaser or Seller, as the case may be, to perform their respective obligations

hereunder or under the Transaction Documents.

 

     "Order" shall mean any judgment, order, consent order, injunction, decree,

writ, permit, demand letter or license of any Governmental or Regulatory

Authority or any arbitrator.

 

     "Organizational Documents" means, with respect to any corporation, its

charter, by-laws and any agreements with shareholders; with respect to any

partnership, its certificate of partnership and partnership agreement; with

respect to any limited liability company, its certificate of formation and

limited liability company or operating agreement; with respect to any trust, its

declaration or agreement of trust; and with respect to each other Person, its

comparable constitutional instruments or documents; together, in each case, with

any and all amendments thereto and all material consents and other instruments

delegating authority pursuant to such Organizational Documents.

 

     "Permit" shall mean any permit (including occupancy permit), certificate,

license, consent or authorization of any Governmental or Regulatory Authority.

 

     "Permitted Liens" shall mean (i) Liens consisting of zoning or planning

restrictions or regulations, easements, Permits, restrictive covenants,

encroachments and other restrictions or limitations on the use of real property

or irregularities in, or exceptions to, title thereto which, individually or in

the aggregate, do not materially detract from the value of, or impair the use

of, such property by the Company, (ii) Liens for current Taxes, assessments or

governmental charges or levies not yet due and payable or (iii) those Liens set

forth on Schedule 1.1(b) hereto.

 

     "Person" shall mean and include an individual, a partnership, a joint

venture, a corporation, a limited liability company, a limited liability

partnership, a trust, an incorporated organization and a Governmental or

Regulatory Authority.

 

     "Purchaser Common Stock" shall mean the common stock of Purchaser, par

value $0.01 per share.

 

     "Release" shall mean the release, spill, emission, leaking, pumping,

pouring, emptying, escaping, dumping, injection, deposit, disposal, discharge,

dispersal, leaching or migrating of any Hazardous Substance into the indoor or

outdoor environment.

 

     "Representatives" of a Person shall mean the directors, officers,

employees, agents, advisors and other representatives, including financial

advisors, consultants, accountants and counsel of such Person.

 

     "Securities Act" shall mean the Securities Act of 1933, as amended, and the

rules and regulations promulgated thereunder.

 

     "Subsidiary" shall mean, with respect to any Person, (i) any corporation

more than 50% of whose stock of any class or classes having by the terms thereof

ordinary voting power to elect a majority of the directors of such corporation

(irrespective of whether or not at the time stock of any class or classes of

such corporation shall have or might have voting power by reason of the

happening of any contingency) is owned by such Person directly or indirectly

through one or more Subsidiaries of such Person and (ii) any partnership,

association, joint venture or other entity in which such Person directly or

indirectly through one or more Subsidiaries of such Person has more than a 50%

equity interest.

 

     "Taxes" shall mean all federal, state, local, foreign and other income,

franchise, profits, gross receipts, capital gains, capital stock, transfer,

sales, use, value added, occupation, property, excise, severance, windfall

profits, stamp, license, payroll, social security, withholding and other taxes,

assessments, charges, duties, fees, levies or other similar governmental charges

(whether payable directly or by withholding and whether or not requiring the

filing of a Return (as defined below)), all estimated taxes, deficiency

assessments, additions to tax, penalties and interest and shall include any

liability for such amounts as a result (i) of transferee liability, (ii) of

being a member of a combined, consolidated, unitary or affiliated group or

(iii) of a contractual obligation to indemnify any Person or other entity.

 

     "Transaction Documents" shall mean the Escrow Agreement and all other

instruments, certificates and documents required to be delivered by the parties

hereto pursuant to this Agreement.

 

     "Woodland Hills Facility" shall mean the real estate facility located at

21051 Warner Center Lane, Suite 200, Woodland Hills, California, 91367, as more

particularly described in the Woodland Hills Facility Lease.

 

     "Woodland Hills Facility Lease" shall mean that certain Lease, dated as of

March 27, 2003, with respect to the Woodland Hills Facility, between CarrAmerica

Realty Corporation and Acxiom Corporation.

 

     (b) Additional Defined Terms. In addition to the terms defined in Section

1.1(a), the following terms shall have the respective meanings assigned thereto

in the sections indicated below.

 

 

 

Defined Term                                                   Section

Acquisition Proposal                                           5.9(a)(i)

Acxiom Business                                                5.7(l)(ii)

Agreed Claims                                                   8.3(c)

Agreement                                                      Preamble

Appraisals                                                     5.7(l)

Balance Sheet                                                  3.7(a)

Balance Sheet Date                                             3.7(a)

BDO                                                            5.7(l)

Bingham Agreement                                              2.7

Cash Consideration                                             2.1

Certificate                                                    8.3(a)

Claims                                                         5.12(a)

Closing                                                        2.3

Closing Cash Consideration                                      2.2(a)(i)

Closing Date                                                   2.3

Common Stock                                                   3.5

Company                                                        First Recital

Confidential Information                                        5.2(b)

Confidentiality Agreement                                      5.2(a)

Contract                                                       3.3(a)(iii)

Controlled Group                                               3.21(i)

Cut-off Time                                                   9.1(d)

Draft Financial Statements                                     3.7(a)

Employee Benefit Plans                                         3.21(a)(iv)

ERISA                                                           3.21(a)(i)

Escrow Amount                                                  2.2(a)(i)

Financial Statements Consents                                  5.7(l)(v)

Financial Statements Deliveries                                5.7(l)(v)

Historical Financial Statements                                5.7(l)(iii)

Historical Financial Statements Auditor's Report               5.7(l)(iv)

Indemnified Party                                              8.3(a)

Indemnifying Party                                              8.3(a)

Insurance Policies                                             3.16

Losses                                                         8.2(a)

Moore Stephens                                                 5.7(l)

Material Customers                                              3.19

Material Suppliers                                             3.19

Multiemployer Plan                                             3.21(c)(i)

Proposed Debt Financing                                        4.7

Proposed Equity Financing                                      4.7

Proposed Financing Transactions                                4.7

Purchase Price                                                 2.1

Purchaser                                                      Preamble

Purchaser Indemnitee                                           8.2(a)

Purchaser SEC Reports                                          4.3

Purchaser's Unlimited Warranty                                 8.1(b)

Returns                                                         3.15

Seller                                                         Preamble

Seller Claims                                                  5.11

Seller Indemnitee                                              8.2(b)

Seller's Expenses                                               2.7

Seller's Expenses Certificate                                  2.7

Seller's Unlimited Warranties                                  8.1(b)

Shares                                                         First Recital

SMS Business                                                    5.7(l)(i)

Stock Consideration                                            2.1

Unaudited Balance Sheet                                        3.7(a)

Unaudited Balance Sheet Date                                   3.7(a)

WARN                                                           3.20(j)

Warranty Claim                                                 3.28

 

     1.2 Construction. In this Agreement, unless the context otherwise

requires:

 

     (a) any reference in this Agreement to "writing" or comparable expressions

includes a reference to facsimile transmission or comparable means of

communication;

 

     (b) words expressed in the singular number shall include the plural and

vice versa, words expressed in the masculine shall include the feminine and

neuter gender and vice versa;

 

     (c) references to Articles, Sections, Exhibits, Schedules and Recitals are

references to articles, sections, exhibits, schedules and recitals of this

Agreement;

 

     (d) reference to "day" or "days' are to calendar days;

 

     (e) this "Agreement" or any other agreement or document shall be construed

as a reference to this Agreement or, as the case may be, such other agreement or

document as the same may have been, or may from time to time be, amended,

varied, novated or supplemented; and

 

     (f) "include," "includes," and "including" are deemed to be followed by

"without limitation" whether or not they are in fact followed by such words or

words of similar import.

 

     1.3 Schedules and Exhibits. The Schedules and Exhibits to this Agreement

are incorporated into and form an integral part of this Agreement. If an Exhibit

is a form of agreement, such agreement, when executed and delivered by the

parties thereto, shall constitute a document independent of this Agreement.

 

     1.4 Knowledge. (a) Where any representation or warranty contained in this

Agreement is expressly qualified by reference to the knowledge of Seller, it

means the actual knowledge of the Key Employees after having made reasonable

inquiry of Seller and the Company as to the matters that are the subject of such

representations and warranties.

 

     (b) Where any representation or warranty contained in this Agreement is

expressly qualified by reference to the knowledge of Purchaser, it means the

actual knowledge of Zach Lonstein and Robert Wallach after having made

reasonable inquiry of Purchaser as to the matters that are the subject of such

representations and warranties.

 

                                   ARTICLE II

 

                                  SALE OF SHARES

 

     2.1 Sale of Shares. On the terms and subject to the conditions set forth

in this Agreement, Seller agrees to sell, assign, transfer and deliver to

Purchaser at the Closing, and Purchaser agrees to purchase from Seller at the

Closing, the Shares, free and clear of any and all Liens (other than

restrictions or limitations on transfer under the Securities Act and other

applicable securities Laws). The purchase price (the "Purchase Price") for the

Shares is $35,034,265 in cash (the "Cash Consideration"), subject to adjustment

as provided in Section 2.2, and the Stock Consideration.

 

     2.2 Determination and Payment of Closing Payment. (a) In consideration for

the sale of the Shares by Seller to Purchaser, Purchaser shall deliver to Seller

at the Closing (i) an amount in cash (the "Closing Cash Consideration") equal to

the Cash Consideration less $3,650,000 (the "Escrow Amount") and the aggregate

amount of any Seller's Expenses that have been paid by the Company on or prior

to the Closing Date as set forth on the Seller's Expenses Certificate and

(ii) 135,892 shares of Purchaser Common Stock (such shares, the "Stock

Consideration"). Purchaser shall deliver the Closing Cash Consideration by wire

transfer of immediately available funds to the account notified by Seller in

writing to Purchaser at least two (2) Business Days prior to the Closing Date.

 

     (b) Notwithstanding the foregoing, Purchaser shall be entitled to deduct

and withhold from the Closing Cash Consideration such amounts as Purchaser is

required to deduct and withhold under the Code with respect to the payment of

the Purchase Price; provided, however, that Purchaser shall not deduct and

withhold from the Closing Cash Consideration any amount if Purchaser has

received the certificate described in Section 2.4(d) at least two (2) Business

Days prior the Closing Date. To the extent amounts are so withheld by Purchaser,

such withheld amounts shall be treated for all purposes of this Agreement as

having been paid to Seller. If Purchaser intends to deduct and withhold from the

Closing Cash Consideration any amount as required with respect to the preceding

sentence, Purchaser shall, not less than two (2) Business Days prior to the

Closing Date, notify Seller of such intent and requirement based on the receipt

by Purchaser of a legal opinion from legal counsel.

 

     2.3 Closing. Subject to the terms and conditions of this Agreement, except

as otherwise agreed by the parties, the sale of the Shares referred to in

Section 2.1 (the "Closing") shall take place within three Business Days

following the date on which all of the conditions to the obligations of the

parties set forth in Article VI have been satisfied or waived (other than the

delivery of the certificates, opinions and documents that are to be delivered at

the Closing pursuant hereto); provided, however, that in no event shall the

Closing take place prior to April 1, 2004. The Closing shall take place at such

place as the parties hereto shall agree. Such date is referred to herein as the

"Closing Date".

 

     2.4 Closing Date Deliveries by Seller. At the Closing, Seller shall

deliver or cause to be delivered to Purchaser the following:

 

     (a) the certificates representing the Shares duly endorsed in blank, or

accompanied by either stock powers duly executed in blank by Seller or such

other instruments of transfer as are reasonably acceptable to Purchaser in each

case, with all necessary transfer tax and other revenue stamps, acquired at

Seller's expense, affixed and canceled;

 

     (b) (i) copies of the Company's articles of incorporation as in effect on

the Closing Date, including all amendments thereto, in each case certified by

the Secretary of State or other appropriate official of its jurisdiction of

incorporation, (ii) a certificate from the Secretary of State or other

appropriate official of the jurisdiction of incorporation of the Company to the

effect that the Company is in good standing or subsisting in such jurisdiction

and listing all charter documents of the Company on file, (iii) a certificate

from the Secretary of State or other appropriate official of each state in which

the Company is qualified to do business to the effect that the Company is in

good standing in such state, and (iv) a copy of the by-laws of the Company,

certified by the Secretary of the Company as being true and correct as of the

Closing Date;

 

     (c) resignation letters, effective on the Closing Date, executed by each of

the members of the Board of Directors of the Company, pursuant to which each of

them has resigned as a member of the Board of Directors of the Company;

 

     (d) an affidavit, stating under penalty of perjury, that the indicated

number is Seller's United States taxpayer identification number and that Seller

is not a foreign person, pursuant to Section 1445(b)(2) of the Code;

 

     (e) the Seller's Expenses Certificate and the Bingham Agreement;

 

     (f) a receipt for the Closing Cash Consideration and the Stock

Consideration;

 

     (g) the certificates, opinions and other documents required to be delivered

by Seller pursuant to Section 6.1; and

 

     (h) such other instruments, agreements, certificates and documents as shall

be reasonably requested by Purchaser to make effective the transactions

contemplated hereby.

 

     2.5 Closing Date Deliveries by Purchaser. (a) At the Closing, Purchaser

shall deliver or cause to be delivered to Seller the following:

 

     (i) the Closing Cash Consideration in accordance with Section 2.2;

 

     (ii) a stock certificate duly registered in the name of Seller representing

the Stock Consideration;

 

     (iii) a receipt for the Shares;

 

     (iv) the certificates, opinions and other documents required to be

delivered by Purchaser pursuant to Section 6.2; and

 

     (v) such other instruments, agreements, certificates and documents as shall

be reasonably requested by Seller to make effective the transactions

contemplated hereby.

 

     (b) At the Closing, Purchaser shall wire transfer in immediately available

funds the Escrow Amount to an account designated in writing to Purchaser at

least two (2) Business Days prior to the Closing Date by the Escrow Agent.

 

     2.6 Purchaser Stock. The certificate representing the Stock Consideration

issued to Seller shall bear the following legend:

 

      "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE

     SECURITIES AND EXCHANGE COMMISSION OR SECURITIES REGULATORS OF ANY STATE IN

     RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF

     1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE, NOR

     MAY ANY INTEREST THEREIN BE, OFFERED OR SOLD EXCEPT PURSUANT TO AN

     EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN

     AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE

     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH

     APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY, SUBJECT TO CERTAIN

     EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, IN

      FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO INFOCROSSING,

     INC."

 

     2.7 Transaction Costs of the Company. Except as provided in Section 10.1,

Seller shall be responsible for, all fees and expenses of counsel and other

professional advisors incurred by Seller or the Company in connection with the

negotiation, preparation and performance of this Agreement and the transactions

contemplated hereby ("Seller's Expenses"). No later than two (2) Business Days

prior to the Closing Date, Seller shall deliver to Purchaser a certificate of

Seller (the "Seller's Expenses Certificate"), along with such supporting

documentation as may reasonably be required by Purchaser, signed by a duly

authorized officer of Seller certifying (i) that the only fees and expenses that

constitute Seller's Expenses are the fees and expenses of Bingham McCutchen LLP

and (ii) as to the aggregate amount of any Seller's Expenses that have been paid

or will be paid by the Company at or prior to the Closing Date. Seller will also

deliver to Purchaser a letter agreement among Seller, Bingham McCutchen LLP and

the Company (the "Bingham Agreement"), pursuant to which Bingham McCutchen LLP

(i) agrees that Seller shall be solely responsible for any Seller's Expenses not

paid at or prior to the Closing Date and (ii) waives, and releases the Company

from, any demand, right, claim or other entitlement Bingham McCutchen LLP may

have against the Company for any Seller's Expenses.

 

                                  ARTICLE III

 

                             REPRESENTATIONS OF SELLER

 

     3. Representations of Seller. Seller represents and warrants on the date

hereof and on the Closing Date as follows:

 

     3.1 Ownership of Shares; Existence and Good Standing of Seller. (a) Seller

is the sole lawful owner, beneficially and of record, of all of the Shares, free

and clear of all Liens or other restrictions or limitations on transfer (other

than any restrictions under the Securities Act and other applicable securities

Laws). The delivery to Purchaser of the Shares pursuant to this Agreement will

transfer to Purchaser good and valid title to all of the outstanding capital

stock of the Company, free and clear of all Liens.

 

     (b) Seller is a limited liability company duly organized, validly existing

and in good standing under the laws of the State of California and has all

requisite limited liability company power and authority to own, lease, operate

and use the assets and properties currently owned, leased, operated and used by

it and to own and operate its business as now conducted.

 

     3.2 Authority and Enforceability. Seller has the limited liability company

power and authority to execute and deliver this Agreement and the other

instruments and agreements to be executed and delivered by Seller as

contemplated hereby. Seller has the limited liability company power and

authority to consummate the transactions contemplated hereby and by the other

instruments and agreements to be executed and delivered by Seller as

contemplated hereby, including the sale, assignment, transfer and conveyance of

the Shares pursuant to this Agreement. The execution, delivery and performance

of this Agreement, and all other instruments and agreements to be executed and

delivered by Seller as contemplated hereby, and the consummation of the

transactions contemplated hereby and thereby, have been duly authorized by all

requisite limited liability company and member action on the part of Seller and

its members and no other limited liability company proceedings or approvals on

the part of Seller or its members is necessary to authorize the execution,

delivery and performance of this Agreement and such other instruments and

agreements by Seller or the consummation of the transactions contemplated hereby

and thereby. This Agreement and all other instruments and agreements to be

executed and delivered by Seller as contemplated hereby, when delivered in

accordance with the terms hereof, assuming the due execution and delivery of

this Agreement and each such other document by the other parties hereto and

thereto, shall have been duly executed and delivered by Seller and shall be

legal, valid and binding obligations of Seller, enforceable against Seller in

accordance with their terms, except to the extent that their enforceability may

be subject to applicable bankruptcy, insolvency, reorganization, moratorium or

similar Laws affecting the enforcement of creditors' rights generally and to

general equitable principles.

 

     3.3 Consents and Approvals; No Violations. (a) Other than as set forth in

Schedule 3.3(a), the execution and delivery of this Agreement by Seller do not,

the execution and delivery by Seller of the other instruments and agreements to

be executed and delivered by Seller as contemplated hereby will not, and the

consummation by Seller of the transactions contemplated hereby and thereby will

not (with or without due notice or lapse of time or both), result in the

creation of any Lien on any of the properties or assets of Seller or the

Company, or result in a violation or breach of, conflict with, constitute (with

or without due notice or lapse of time or both) a default (or give rise to any

right of termination, cancellation, payment or acceleration) under: (i) any

provision of the Organizational Documents of Seller or the Company; (ii) subject

to obtaining and making any of the approvals, consents, notices and filings set

forth in Schedule 3.3(b), any Law or Order applicable to Seller or the Company

or by which any of their respective properties or assets may be bound; (iii) any

of the terms, conditions or provisions of any note, bond, mortgage, indenture,

guarantee, license, franchise, permit, agreement, understanding, arrangement,

contract, commitment, lease, franchise agreement or other instrument or

obligation (whether oral or written) (each, including all amendments thereto, a

"Contract") to which Seller or the Company is a party, or by which they or any

of their respective properties or assets is bound; except in the case of clause

(iii) above, for such violations, filings, permits, consents, approvals,

notices, breaches or conflicts which could not reasonably be expected to have,

individually or in the aggregate, a Material Adverse Effect with respect to

Seller or the Company.

 

     (b) Except for such filings and approvals as are set forth in Schedule

3.3(b), no consent, approval, Permit, registration, report or action of, filing

with, notice to or authorization of, any Governmental or Regulatory Authority or

any other Person is necessary or required (i) under any of the terms, conditions

or provisions of any Law or Order applicable to Seller or the Company or by

which any of Seller's or the Company's respective properties or assets may be

bound or (ii) under any material Contract to which Seller or the Company is a

party or by which any of them or any of their respective assets or properties

may be bound, in each case, in connection with the execution and delivery of

this Agreement by Seller, the performance by Seller of its obligations hereunder

or the consummation by Seller of the transactions contemplated hereby; except in

the case of clause (ii) above solely with respect to Seller, for such consents,

approvals, Permits, registrations, reports, filings or notices which could not

reasonably be expected to have, individually or in the aggregate, a Material

Adverse Effect with respect to Seller.

 

     3.4 Existence and Good Standing of the Company. (a) The Company is a

corporation duly organized, validly existing and in good standing under the laws

of the State of California. The Company has all requisite corporate power and

authority to own, lease, operate and use the assets and properties currently

owned, leased, operated and used by it and to own and operate its business as

now conducted.

 

     (b) The Company is duly qualified to do business in, and is in good

standing in, each jurisdiction in which the character or location of the

properties owned, leased or operated by the Company, or the nature of the

business conducted by the Company, makes such qualification necessary, except

for such jurisdictions where the failure to be so qualified or licensed and in

good standing could not reasonably be expected to have a Material Adverse Effect

with respect to the Company. Seller has delivered to Purchaser true and correct

copies of the Organizational Documents of the Company as in effect on the date

hereof.

 

     3.5 Capital Stock. The Company has an authorized capitalization consisting

of 1,000,000 shares of common stock ("Common Stock"), of which no shares are

issued and outstanding other than the Shares and no shares are held in the

Company's treasury. The Shares have been duly authorized and validly issued, are

fully paid and nonassessable and are not subject to, nor were they issued in

violation of, any preemptive rights. Except as described above, no shares of

capital stock of the Company are authorized, issued, outstanding or reserved for

issuance. There are no outstanding or authorized options, warrants, preemptive

or other rights, subscriptions, claims of any character, agreements,

obligations, convertible or exchangeable securities, or other commitments

contingent or otherwise, relating to the capital stock of, or other equity or

voting interest in, the Company, pursuant to which the Company is or may become

obligated to issue, deliver or sell or cause to be issued, delivered or sold,

shares of Common Stock, any other shares of the capital stock of, or other

equity or voting interest in, the Company or any securities convertible into,

exchangeable for, or evidencing the right to subscribe for or acquire, any

shares of the capital stock of, or other equity or voting interest in, the

Company. There are no outstanding or authorized stock appreciation, phantom

stock, profit participation or similar rights with respect to the capital stock

of, or other equity or voting interest in, the Company. The Company has no

authorized or outstanding bonds, debentures, notes or other Indebtedness the

holders of which have the right to vote (or that are convertible into,

exchangeable for, or evidencing the right to subscribe for or acquire securities

having the right to vote) with the shareholders of the Company on any matter.

There are no Contracts to which the Company is a party or by which the Company

is bound to (i) repurchase, redeem, retire, defease or otherwise acquire any

shares of capital stock of, or other equity or voting interest in, the Company

or any other Person or (ii) vote or dispose of any shares of capital stock of,

or other equity or voting interest in, the Company. There are no outstanding

proxies and no voting agreements with respect to any shares of capital stock of,

or other equity or voting interest in, the Company.

 

     3.6 Subsidiaries. The Company has no Subsidiaries and has never had any

Subsidiaries. The Company does not own, directly or indirectly, any capital

stock of, or other equity, ownership, proprietary or voting interest in, any

Person.

 

     3.7 Financial Statements; Accounts Receivable. (a) Seller has furnished

Purchaser with (i) a draft of the audited balance sheet of the Company (the

"Balance Sheet") as of December 31, 2003 (the "Balance Sheet Date") and the

related audited statements of operations, shareholders' equity and cash flows

for the year then ended, together with a draft certification by BDO, (ii) a

draft of the audited statements of operations, shareholders' equity and cash

flows for the one (1) month ended December 31, 2002, together with a draft

certification by BDO ((i) and (ii) collectively, the "Draft Financial

Statements"). In addition, Seller has furnished Purchaser with the unaudited

balance sheet of the Company as at January 31, 2004 and the related unaudited

statements of operations, shareholders' equity and cash flows for the one (1)

month then ended. The unaudited balance sheet of the Company as at January 31,

2004 (the "Unaudited Balance Sheet Date") is hereinafter referred to as the

"Unaudited Balance Sheet". The financial statements referred to above, including

the footnotes thereto, (i) except as described therein or, with respect to the

Draft Financial Statement, as set forth in Schedule 3.7(a), have been prepared

in accordance with GAAP consistently applied throughout the periods indicated,

subject, in the case of the Unaudited Balance Sheet and the unaudited statements

of operations, shareholder' equity and cash flows for the one (1) month ended

January 31, 2004, to normal recurring year-end adjustments (the effect of which

will not, individually or in the aggregate, be material) and the absence of

notes (that, if presented, would not differ materially from those included in

the Balance Sheet) and (ii) are consistent with the Books and Records of the

Company.

 

     (b) Except as set forth in Schedule 3.7(a), the Draft Financial Statements

fairly present, in all material respects, the financial condition of the Company

as of the dates thereof and the related statements of operations, shareholders'

equity and cash flows fairly present, in all material respects, the results of

the operations and cash flows of the Company and the changes in its financial

condition for the periods indicated.

 

     (c) The Unaudited Balance Sheet fairly presents, in all material respects,

the financial condition of the Company as of the date thereof and the related

statements of operations, shareholders' equity and cash flows fairly present, in

all material respects, the results of operations and cash flows of the Company

and the changes in its financial condition for the period indicated.

 

     (d) All of the Company's accounts and notes receivable as at the Closing

Date have arisen from bona fide sales transactions in the ordinary course of

business, are carried at values determined in accordance with GAAP consistently

applied, and, to the knowledge of Seller, are legal, valid and binding

obligations of the respective debtors. Except as set forth in Schedule 3.7(d),

to the knowledge of Seller, no Person has any Lien on, valid set-off or

counterclaim against any of the Company's accounts or notes receivable, other

than Permitted Liens. Except as otherwise reflected on the Unaudited Balance

Sheet, there has been no material adverse change since the Balance Sheet Date in

the amount of accounts and notes receivable of the Company or the allowances or

reserves with respect thereto, or accounts payable of the Company, from that

reflected in the Balance Sheet.

 

     3.8 Liabilities; Indebtedness. (a) Except as set forth in Schedule 3.8(a),

the Company has no claims, obligations or liabilities, whether absolute,

accrued, due or to become due, inchoate, contingent or otherwise, except for (i)

claims, obligations or liabilities set forth in the Balance Sheet or

specifically disclosed in the footnotes thereto, (ii) claims, obligations or

liabilities incurred subsequent to the Balance Sheet Date in the ordinary course

of business consistent with past practice and which, individually and in the

aggregate, could not reasonably be expected to have a Material Adverse Effect

with respect to the Company, (iii) obligations or liabilities arising in

connection with the performance (and not the breach by the Company) of Contracts

set forth on Schedule 3.13(a) and Contracts which are not required to be set

forth on Schedule 3.13(a), in each case, in accordance with the terms of such

Contracts (none of which obligations or liabilities results from, arises out of,

relates to, is in the nature of, or was caused by any breach of Contract, breach

of warranty, tort, infringement or violation of applicable Law) and (iv) claims,

obligations or liabilities which do not exceed $15,000 individually or $30,000

in the aggregate.

 

     (b) Except as set forth in Schedule 3.8(b), the Company has no Indebtedness

(within the meaning of clauses (i) and (iii) of the definition thereof) or any

guarantees or other contingent liabilities with respect thereto.

 

     3.9 Books and Records. Except as set forth or disclosed in Schedule 3.9,

the minute book of the Company, as previously made available to Purchaser and

its Representatives, contains accurate records of all meetings of, and corporate

action taken by (including action taken by written consent) the sole shareholder

and Board of Directors of the Company. Except as set forth or disclosed in

Schedule 3.9, none of the Company's Books and Records are recorded, stored,

maintained, operated or otherwise wholly or partly dependent on or held by any

means (including any electronic, mechanical or photographic process, whether

computerized or not) which (including all means of access thereto and therefrom)

are not under the exclusive ownership and direct control of the Company.

 

     3.10 Title to Personal Properties. Except as set forth in Schedule 3.10,

the Company has good and valid title to or, in the case of leased assets, a good

and valid leasehold interest in, free and clear of all Liens, except for

Permitted Liens, all of the tangible and intangible personal property and assets

reflected in the Balance Sheet or thereafter acquired, except for properties and

assets disposed of in the ordinary course of business, consistent with past

practice, since the date of the Balance Sheet. The Company owns or has the

exclusive right to use all of the tangible personal properties and assets

necessary for the conduct of its business as currently conducted. All of the

tangible personal property used in the business of the Company (including

furniture, fixtures, furnishing, machinery, equipment, computer hardware,

appliances and vehicles) (a) is in good operating condition and repair, subject

to normal wear and tear and (b) is useable in the ordinary course of business

consistent with past practice.

 

     3.11 Owned Real Property. The Company does not own any real property.

 

     3.12 Leased Real Property. Except as set forth in Schedule 3.12: (i) the

Company has a good and valid leasehold interest in, and enjoys peaceful and

undisturbed possession of, the Facilities pursuant to the respective Facility

Leases; (ii) each of the Facility Leases is a legal, binding and enforceable

obligation against the Company and is in full force and effect, and the Company

has not received any notice from the lessor under any Facility Lease that the

such Facility Lease is not in full force and effect; (iii) no amount payable

under any Facility Lease is past due beyond any applicable cure period; (iv) the

Company is in compliance with all covenants, commitments and obligations on its

part to be performed or observed under each of the Facility Leases and is not in

violation or default thereunder and Seller does not have knowledge of the

failure by any other party to any such lease to comply with all of its

commitments and obligations or to be in violation or default thereunder; (v) the

Company has not received any notice which has not heretofore been cured or

resolved of any breach or demand for performance under any of the Facility

Leases and is not a party to any other agreement with the lessor of any of the

Facilities which gives such lessor, as a remedy for any breach of such other

agreement, any right to terminate or alter the terms of the Facility Lease to

which such lessor is a party; (vi) all material buildings, structures, fixtures

and building systems included in the Facilities are in proper condition and

repair to operate such facilities in the manner in which they are currently

being operated; (vii) the Company has not received notice from any Governmental

or Regulatory Authority that any of such buildings, structures, fixtures and

systems are not presently used and operated in compliance with all material

covenants, easements, agreements, legal requirements, zoning and restrictions

affecting any of the Facilities; and (viii) except for the Facility Leases,

there is no real property lease or sublease to which the Company is a party, and

the Company does not have any other possessory interest in real property.

 

     3.13 Material Contracts. (a) Schedule 3.13(a) sets forth an accurate and

complete list of the following Contracts to which the Company is a party and by

which it is currently bound or pursuant to which the Company's business is

subject or in respect of which assets, rights or properties are held for use by

the Company by any other Person:

 

     (i) all Contracts which contain restrictions with respect to payment of

dividends or any other distribution in respect of the capital stock or other

equity interests of the Company;

 

      (ii) all Contracts relating to capital expenditures or other purchases of

material, supplies, equipment or other tangible assets or properties (other than

purchase orders for inventory or supplies in the ordinary course of business

consistent with past practice) in excess of $20,000 individually;

 

     (iii) all Contracts involving a loan (other than accounts receivable from

trade debtors in the ordinary course of business consistent with past practice)

or advance to (other than travel and entertainment allowances to the employees

of the Company extended in the ordinary course of business consistent with past

practice), or investment in, any Person or any Contract relating to the making

of any such loan, advance or investment;

 

     (iv) all Contracts involving Indebtedness of the Company;

 

     (v) all Contracts (including so called take-or-pay or keep-well agreements)

under which any Person (other than the Company) has directly or indirectly

guaranteed Indebtedness of the Company;

 

     (vi) all Contracts granting or evidencing a Lien on any properties or

assets of the Company, other than a Permitted Lien;

 

     (vii) all management service, consulting, financial advisory or any other

similar type Contract and any Contracts with any investment or commercial bank;

 

     (viii) all Contracts limiting the ability of the Company or any of its

Affiliates to engage in any line of business or to compete with any Person or to

operate its business in any geographic area;

 

     (ix) all Contracts (other than this Agreement and any agreement or

instrument entered into pursuant to this Agreement) between the Company and (A)

Seller, any other Affiliate of the Company or any Affiliate of Seller (other

than the Company) or (B) any current or former officer, director or shareholder

of the Company, Seller or any Affiliate of Seller;

 

     (x) all Contracts (including letters of intent) involving the disposition

or acquisition or the future disposition or acquisition of material assets or

properties, or any merger, consolidation or similar business combination

transaction, whether or not enforceable;

 

     (xi) all Contracts involving any joint venture, partnership, strategic

alliance, shareholders' agreement, co-marketing, co-promotion, co-packaging,

joint development, distribution or similar arrangement;

 

     (xii) all Contracts involving any material resolution or settlement of any

actual or threatened litigation, arbitration, claim or other dispute;

 

     (xiii) all Contracts involving a standstill or similar arrangement;

 

     (xiv) all Contracts involving leases or subleases of personal property,

including capital leases, to which the Company is a party (as lessee or lessor);

 

     (xv) all Contracts which are material to the Company and contain a "change

in control" or similar provision;

 

     (xvi) all Contracts relating to indemnification, whether the Company is the

beneficiary or the obligated party thereunder, including Contracts providing for

indemnification of any Person with respect to Liabilities relating to any

current or former business;

 

     (xvii) all Contracts which include an obligation of the Company to

indemnify any Person in connection with third party claims relating to

infringement or misappropriation of Intellectual Property (unless capped in

liability at or below $25,000);

 

     (xviii) all customer Contracts (including but not limited to Contracts with

respect to hosting services, support services, outsourcing services and other

information technology-related services) that individually account for more than

$5,000 in sales of the Company on a monthly basis (other than the Contracts with

the Company's CMS customers);

 

     (xix) all Contracts (including but not limited to network connection

agreements, data center agreements, equipment leases and disaster recovery

service agreements) pursuant to which the Company is provided equipment or

services that are material to the operation of the Company's business and

individually account for more than $25,000 in annual purchases of the Company;

 

     (xx) all Contracts not made in the ordinary course of business or under

which the consequences of a default or termination could reasonably be expected

to have, individually or in the aggregate, a Material Adverse Effect with

respect to the Company;

 

     (xxi) all Contracts involving cash (or cash equivalents), property,

services or other consideration valued at $10,000 or more which are not

cancelable by the Company without penalty on thirty (30) days or less notice;

 

     (xxii) all Contracts under which the Company has the right to use any

Intellectual Property that is material to its business;

 

     (xxiii) all Contracts pursuant to which the Company grants any Person the

exclusive right to use any Company Intellectual Property with respect to any

line of business or any geographic area;

 

     (xxiv) all other Contracts not covered by the above that are material to

the business of the Company taken as a whole; and

 

     (xxv) any guaranty with respect to the Company's obligations or performance

under any of the foregoing Contracts.

 

     (b) Except as noted on Schedule 3.13(b), each Contract set forth in

Schedule 3.13(a) (or required to be set forth in Schedule 3.13(a)) is a legal

valid and binding obligation against the Company and, to the knowledge of

Seller, each other party thereto, enforceable in accordance with its terms

against the Company, and, to the knowledge of Seller, each other party thereto,

and is in full force and effect, and each covenant of the Company and, to the

knowledge of Seller, of each other party thereto, required to have been

performed has been fully performed in all material respects, and there exists no

(i) default or event of default by the Company or, to the knowledge of Seller,

any other party to any such Contract with respect to any material term or

provision of any such Contract, or (ii) event, occurrence, condition or act

(including the consummation of the transactions contemplated hereby) which, with

the giving of notice, the lapse of time or the happening of any other event or

condition, would become a default or event of default by the Company or, to the

knowledge of Seller, any other party thereto, with respect to any material term

or provision of any such Contract. Seller has delivered to Purchaser true and

complete copies, including all material amendments, of each Contract set forth

in Schedule 3.13(a).

 

     3.14 Litigation. Except as set forth in Schedule 3.14, there is no action,

suit, proceeding at law or in equity, arbitration or administrative or other

proceeding by (or to the knowledge of Seller any investigation by) any

Governmental or Regulatory Authority or any other Person pending, or, to the

knowledge of Seller, threatened, (i) against, or that has been brought by Seller

or its Affiliates that relates to or affects, the Company or any of its rights

or business or (ii) against Seller that could reasonably be expected to have a

Material Adverse Effect on Seller. Except as set forth in Schedule 3.14, the

Company is not subject to any Order.

 

     3.15 Taxes. (a) Tax Returns. The Company has timely filed or caused to be

timely filed with the appropriate taxing authorities all tax returns,

statements, forms and reports (including, elections, declarations, disclosures,

schedules, estimates and informational tax returns) for Taxes ("Returns") that

are required to be filed by, or with respect to, the Company on or prior to the

Closing Date. The Returns are true, correct and complete in all material

respects. An extension of time within which to file any Return that has not been

filed has not been requested or granted.

 

     (b) Payment of Taxes. All Taxes of the Company that are due and payable

have been timely paid. The unpaid Taxes of the Company as of the Unaudited

Balance Sheet Date do not exceed the reserve for Tax liability (excluding any

reserve for deferred Taxes established to reflect timing differences between

book and Tax income) set forth or included in the Unaudited Balance Sheet.

 

     (c) Other Tax Matters. (i) Except as set forth in Schedule 3.15(c)(i), the

Company has not been the subject of an audit or other examination of Taxes by

the tax authorities of any nation, state or locality (and to Seller's knowledge

no such audit is pending or contemplated) nor has the Company received any

notices from any taxing authority or other Person relating to any issue which

could result in a material Tax liability of the Company. All deficiencies

asserted or assessments made as a result of any such audit or examination have

been fully paid or are fully reflected as a liability in the Unaudited Balance

Sheet or are being contested in good faith and an adequate reserve therefore has

been established in the Unaudited Balance Sheet.

 

     (ii) Except as set forth in Schedule 3.15(c)(ii), neither Seller nor the

Company (A) has entered into an agreement or waiver or been requested to enter

into an agreement or waiver extending any statute of limitations relating to the

payment or collection of Taxes of the Company, (B) is presently contesting the

Tax liability of the Company before any court, tribunal or agency, (C) has

granted a power-of-attorney relating to Tax matters to any person or (D) has

applied for and/or received a ruling or determination from a taxing authority

regarding a past or prospective transaction of the Company.

 

      (iii) The Company has not been included in the "consolidated" Return of any

Person, as provided for under the law of the United States and any applicable

non-U.S. jurisdiction or any applicable state or locality. The Company does not

have any liability for any other Person under Treasury Regulations

Section 1.1502-6 (or any comparable Provision of state, local or foreign law or

other law or by contract).

 

     (iv) All Taxes which the Company is (or was) required by Law to withhold or

collect in connection with amounts paid or owing to any employee, independent

contractor, creditor, shareholder or other third party have been duly withheld

or collected, and have been timely paid over to the proper authorities to the

extent due and payable.

 

     (v) No written claim has ever been received from any taxing authority in a

jurisdiction where the Company does not file Returns that the Company is or may

by subject to taxation by that jurisdiction.

 

     (vi) There are no tax sharing, allocation, indemnification or similar

agreements, arrangements or undertakings in effect, written or unwritten, as

between the Company or any Affiliate thereof and any other party (including

Seller and any predecessors or Affiliates thereof) under which Purchaser or the

Company could be liable for any Taxes or other claims of any party.

 

     (vii) The Company has not applied for, been granted, or agreed to any

accounting method change for which it will be required to take into account any

adjustment under Section 481 of the Code or any similar provision of the Code or

the corresponding tax laws of any nation, state or locality.

 

     (viii) No election under Section 341(f) of the Code has been made to treat

the Company as a consenting corporation, as defined in Section 341 of the Code.

 

     (ix) The Company is not a party to any agreement that would require it to

make any payment that would constitute an "excess parachute payment" for

purposes of Sections 280G and 4999 of the Code.

 

     (x) No indebtedness of the Company consists of "corporate acquisition

indebtedness" within the meaning of Section 279 of the Code.

 

     (xi) Seller is not a "foreign person" within the meaning of Section 1445 of

the Code.

 

     (xii) None of the assets of the Company is property required to be treated

as being owned by any other Person pursuant to the "safe harbor lease"

provisions of former Section 168(f)(8) of the Code. None of the assets of the

Company directly or indirectly secures any debt the interest on which is

tax-exempt under Section 103(a) of the Code. None of the assets of the Company

is "tax-exempt use property" within the meaning of Section 168(h) of the Code.

 

     (xiii) Within the past three (3) years neither the Company nor any

predecessors by merger or consolidation has been a party to a transaction

intended to qualify under Section 355 of the Code or under so much of Section

356 of the Code as relates to Section 355 of the Code.

 

     (xiv) The Company has not entered into any transaction that is a

"reportable transaction," as defined in Treasury Regulations Section 1.6011-4(b)

or a "potentially abusive tax shelter," as defined in Treasury Regulations

Section 301.6112-1(b).

 

     3.16 Insurance. Set forth in Schedule 3.16(a) is an accurate and complete

list of each insurance policy or binder (including self-insurance) owned by the

Company or Seller which covers the Company or its business, property, assets or

employees (the "Insurance Policies"). The Insurance Policies are in the name of

the Company and are in full force and effect; all premiums thereon have been

paid; and the Company is otherwise in compliance in all material respects with

the terms and provisions of the Insurance Policies. The Company has received no

notice of cancellation or non-renewal of any such policy or arrangement and, to

the knowledge of Seller, the termination of any Insurance Policies has never

been threatened. Since the Company's formation, the Company has not received or

become aware of any notice from an insurer under the Insurance Policies

refusing, denying, disputing or disclaiming coverage or reserving rights with

respect to a particular claim or any Insurance Policy in general. Schedule

3.16(a) also sets forth a list of all pending claims and the claims history for

the Company since its formation. Seller has delivered or made available to

Purchaser true and complete copies of the Insurance Policies. The Company is not

a successor to any Insurance Policy as a result of the Asset Transactions and

none of the Company, its business, properties, assets or employees are covered

by any Insurance Policy under which the Company is not the beneficiary.

 

     3.17 Intellectual Property. (a) The Company owns and possesses all right,

title and interest in and to, or has a valid and enforceable license to use, all

Intellectual Property that is necessary for or otherwise material to the conduct

of the Company's business, free and clear of all Liens other than Permitted

Liens. Schedule 3.17(a) sets forth, a true and complete list of all (i) patents,

patent applications, trademark and service mark applications and registrations,

material common law trademarks and service marks, domain names and copyright

registrations that are owned by the Company (whether solely or jointly with

another Person) and included in the Company Intellectual Property; (ii) licenses

included in the Company Intellectual Property pursuant to which the Company has

licensed any material Intellectual Property from a third party (other than

commercially available, off the shelf desktop software for which the Company has

all required licenses); and (iii) licenses pursuant to which a license of any

Company Intellectual Property is granted to a third party (other than limited,

non-exclusive licenses granted to the Company's customers in connection with the

provision of outsourcing services to such customers).

 

     (b) The Company has not infringed, misappropriated or otherwise conflicted

with, and the operation of the Company's business as currently conducted does

not infringe, misappropriate or otherwise conflict with, any Intellectual

Property owned by any third party except where such infringement,

misappropriation or conflict would not be material to the Company. Except as set

forth on Schedule 3.17(b), the Company has not received any written notice

alleging that the Company or the operation of the Company's business currently

or at any time in the past has infringed, misappropriated or otherwise

conflicted with any Intellectual Property owned by any third party.

 

     (c) To the knowledge of Seller, no material Company Intellectual Property

is being infringed, misappropriated or otherwise is the subject of any material

conflict.

 

     (d) The Company has secured valid written assignments from all of its

consultants, contractors and employees who contributed to the creation,

conception, reduction to practice or development of any Company Intellectual

Property for any rights to such contributions that the Company does not already

own by operation of law, except where the failure to secure any such written

assignment would not be material to the Company.

 

     (e) The Company has taken reasonable steps to protect and preserve the

confidentiality of all the Company's trade secrets, customer data and software

and other proprietary and confidential information (including know-how, source

codes, databases, customer lists, schematics, ideas, algorithms and processes).

The Company has not breached any agreements of non-disclosure or

confidentiality, nor is it currently alleged or claimed to have done so in any

material respect.

 

     (f) To the knowledge of Seller, the Company's use of any Hosted Materials

as required to provide services to its customers has not, and does not,

infringe, misappropriate or otherwise conflict with the Intellectual Property or

other rights of any third party in any material respect.

 

     (g) Neither the execution, delivery or performance of this Agreement, nor

the consummation of the transactions contemplated hereby, will violate any

privacy policy or other terms of use relating to any web sites of the Company,

or violate any applicable Laws relating to the use or dissemination of

information collected in connection with the operation of such web sites or

otherwise. The Company's use and dissemination of any and all data and

information concerning users of such web sites and other persons is in

compliance in all material respects with its privacy policies and terms of use,

and all applicable Laws.

 

     (h) No former or current employee, director, officer or shareholder of the

Company has or will have, directly or indirectly, any interest in any Company

Intellectual Property, nor does or will any such Person have any rights to past

or future royalty payments or license fees deriving from licenses, technology

agreements or other agreements, whether written or oral, between any such Person

and the Company.

 

     3.18 Compliance with Laws. Except as disclosed on Schedule 3.18, the

Company has complied and is in compliance in all material respects with all

applicable Laws and Orders. The Company has received no written notice that any

violation of the foregoing is being or may be alleged.

 

     3.19 Suppliers and Customers. Schedule 3.19(a)(1) sets forth each supplier

accounting for more than $25,000 of annual purchases of the Company (the

"Material Suppliers"). Schedule 3.19(a)(2) sets forth each customer currently

accounting for more than $5,000 of monthly sales (other than CMS customers of

the Company) (the "Material Customers"). Except as set forth in Schedule

3.19(b), the relationships of the Company with each of the Material Suppliers

and each of the Material Customers are good commercial working relationships.

Except as set forth in Schedule 3.19(c), no Material Supplier or Material

Customer has canceled or otherwise terminated or, to the knowledge of Seller,

threatened to cancel or otherwise terminate, its relationship with the Company,

and the Company has not received any written notice or, to the knowledge of

Seller, any other notice that any such Material Supplier or Material Customer

may cancel or otherwise materially and adversely modify its relationship with

the Company or limit its services, supplies or materials to the Company, or its

usage or purchase of the services and products of the Company either as a result

of the transactions contemplated hereby or otherwise.

 

     3.20 Employment Relations. Except as set forth in Schedule 3.20:

 

     (a) The Company has been and is in compliance in all material respects with

all applicable Laws respecting employment and employment practices, terms and

conditions of employment and wages and hours;

 

     (b) The Company has not been and is not engaged in any unfair labor

practice and no unfair labor practice complaint against the Company is pending

before the National Labor Relations Board;

 

     (c) There is no labor strike, dispute, slowdown or stoppage actually

pending or, to the knowledge of Seller, threatened against or involving the

Company or the Business and since the Company's formation, the Company has not

experienced any labor strike or material concerted labor dispute;

 

     (d) No union is currently certified, and there is no union representation

question and, to the knowledge of Seller, no union or other organizational

activity that would be subject to the National Labor Relations Act (20 U.S.C.

151 et seq.) existing or threatened with respect to the Company;

 

     (e) The Company is not subject to or bound by any collective bargaining or

labor union agreement applicable to any Person employed by the Company, and no

collective bargaining or labor union agreement is currently being negotiated by

the Company;

 

     (f) The Company has not experienced any material labor difficulty or work

stoppage since its formation;

 

     (g) The Company has no Equal Employment Opportunity Commission charges or

other claims of employment discrimination pending or, to the knowledge of

Seller, threatened against the Company;

 

     (h) To the knowledge of Seller, no wage and hour department investigation

has been made of the Company since its formation;

 

     (i) There are no occupational health and safety claims pending or, to the

knowledge of Seller, threatened against the Company or that relate to its

business or property;

 

     (j) Since its formation, the Company has not (i) engaged in layoffs or

employment terminations sufficient in timing and number to constitute (A) a

"mass layoff" (as defined in the Worker Adjustment and Retraining Notification

Act ("WARN")) or (B) an "employment loss" (as defined in WARN) or (ii) effected

a "plant closing" (as defined in WARN) affecting any site of employment or one

or more facilities or operating units within any site of employment or facility

of the Company; the Company has not been affected by any transaction or engaged

in layoffs or employment terminations sufficient in number to trigger

application of any similar Law;

 

     (k) Prior to the date hereof, an accurate and complete list showing the

names of all individuals whose compensation from the Company for services

rendered during the fiscal year ended on the Balance Sheet Date exceeded an

annualized rate of $50,000, together with a statement of the full amount paid or

payable to each such person for services rendered during such fiscal year has

been made available to Purchaser; and

 

     (l) The Company is not a governmental contractor for purposes of any

federal, state or local Law.

 

     3.21 Employee Benefit Plans. (a) List of Plans. Set forth in Schedule

3.21(a) is an accurate and complete list of all (i) "employee benefit plans,"

within the meaning of Section 3(3) of the Employee Retirement Income Security

Act of 1974, as amended, and the rules and regulations thereunder ("ERISA"),

(ii) bonus, savings, profit-sharing, stock option, stock purchase, restricted

stock, phantom stock or other equity based compensation, incentive, fringe

benefit, "voluntary employees' beneficiary associations", under Section

501(c)(9) of the Code, Code section 125 "cafeteria" or "flexible" benefit,

employee loan, educational assistance, pension, or retirement, deferred

compensation, medical, life, disability, accident, salary continuation,

severance, accrued leave, vacation, sick pay, sick leave, supplemental

retirement, group insurance, change-in-control, retention and unemployment

benefit plans, programs, arrangements, commitments and/or practices (whether or

not insured), (iii) employment, consulting, termination, and severance contracts

or agreements for active, retired or former employees or directors and (iv) any

other similar plans, programs, arrangements, commitments, contracts agreements

or practices, in each case (referred to in (i), (ii), (iii) or (iv) above),

whether or not any such plans, programs, arrangements, commitments, contracts,

agreements and/or practices (referred to in subsections (i), (ii), (iii) or (iv)

above) are in writing or are otherwise exempt from the provisions of ERISA, that

have been established, maintained or contributed to (or with respect to which an

obligation to contribute has been undertaken) or with respect to which any

potential liability (whether direct, indirect, contingent or otherwise) may be

borne by the Company (including, for this purpose and for the purpose of all of

the representations in this Section 3.21, all employers (whether or not

incorporated) that would be treated together with the Company and/or Seller as a

single employer (1) within the meaning of Section 414 of the Code or (2) as a

result of the Company and/or Seller being or having been a general partner of

any such employer), since September 2, 1974("Employee Benefit Plans").

 

      (b) Status of Plans. Each Employee Benefit Plan (including any related

trust) complies in form with the requirements of all applicable Laws, including

ERISA and the Code, and has at all times been maintained and operated in

material compliance with its terms and the requirements of all applicable Laws

and Orders, including ERISA and the Code. No complete or partial termination of

any Employee Benefit Plan has occurred or is expected to occur. The Company has

no commitment, intention or understanding to create, modify or terminate any

Employee Benefit Plan. Except as required to maintain the tax-qualified status

of any Employee Benefit Plan intended to qualify under Section 401(a) of the

Code, no condition or circumstance exists that would prevent the amendment or

termination of any Employee Benefit Plan. Each Employee Benefit Plan which is an

"employee benefit plan" within the meaning of Section 3(2) of ERISA and which is

intended to be qualified under Section 401(a) of the Code is so qualified and

has received a favorable determination letter from the IRS or has applied for

such favorable letter within the applicable remedial amendment period under

Section 401(a) of the Code, and, to the knowledge of Seller, no circumstances

exist that could reasonably be expected to result in the revocation of any such

favorable determination letter or cause any such Employee Benefit Plan or trust

to fail to be so qualified and exempt. To the knowledge of Seller, no event has

occurred and no condition or circumstance has existed that would result in a

material increase in the benefits under or the expense of maintaining any

Employee Benefit Plan from the level of benefits or expense incurred for the

most recent fiscal year ended thereof.

 

     (c) Liabilities. (i) The Company does not and has never maintained or

contributed to, or had any obligation to contribute to, or otherwise have any

liability (whether contingent or otherwise) with respect to, (A) any "employee

pension benefit plan" (within the meaning of Section 3(2) of ERISA) subject to

Section 412 of the Code or Section 302 or Title IV of ERISA, (B) any "multiple

employer plan" (within the meaning of the Code or ERISA), or (C) any

"multiemployer plan" (as defined in Sections 3(37) or 4001(a)(3) of ERISA) (a

"Multiemployer Plan"); and none of the Employee Benefit Plans is a Multiemployer

Plan or otherwise subject to Title IV of ERISA.

 

     (ii) The Company does not maintain any Employee Benefit Plan which is a

"group health plan," (as such term is defined in Section 5000(b)(1) of the Code

or Section 607(1) of ERISA) that has not been administered and operated in all

material respects in compliance with the applicable requirements of Part 6 of

Subtitle I of ERISA and Section 4980B of the Code and the Company is not subject

to any liability, including additional contributions, fines, taxes, penalties or

loss of tax deduction, as a result of such administration and operation.

 

     (iii) No Employee Benefit Plan is a "multiple employer welfare

arrangement," within the meaning of Section 3(40) of ERISA.

 

     (iv) Each Employee Benefit Plan that is intended to meet the requirements

of Section 125 of the Code meets such requirements, and each program of benefits

for which employee contributions are provided pursuant to elections under any

Employee Benefit Plan meets the requirements of the Code applicable thereto.

 

     (v) The Company does not maintain any Employee Benefit Plan which is an

"employee welfare benefit plan" (as such term is defined in Section 3(1) of

ERISA) that has provided any "disqualified benefit" (as such term is defined in

Section 4976(b) of the Code) with respect to which an excise tax could be

imposed.

 

     (vi) Except as required by Section 4980B of the Code, the Company does not

maintain any Employee Benefit Plan providing for post-employment or retiree

health, life insurance and/or other welfare benefits, and the Company has no

obligation to provide any such benefits to any retired or former employees or

active employees following such employees' retirement or termination of service.

 

     (vii) The Company has no unfunded liabilities pursuant to any Employee

Benefit Plan that is not intended to be qualified under Section 401(a) of the

Code.

 

     (viii) The Company has incurred no liability for any tax or excise tax

arising under Chapter 43 of the Code, and to the knowledge of Seller, no event

has occurred and no condition or circumstance has existed that could give rise

to any such liability.

 

     (ix) There are no actions, suits, claims or disputes pending, or, to the

knowledge of Seller, threatened, anticipated or expected to be asserted against

or with respect to any Employee Benefit Plan or the assets of any such plan

(other than routine claims for benefits and appeals of denied routine claims).

No civil or criminal action brought pursuant to the provisions of Title I,

Subtitle B, Part 5 of ERISA is pending, threatened, anticipated, or expected to

be asserted against the Company or any fiduciary of any Employee Benefit Plan,

in any case with respect to any Employee Benefit Plan. No Employee Benefit Plan

or any fiduciary thereof has been the direct or indirect subject of an audit,

investigation or examination by any governmental or quasi-governmental agency.

 

     (x) The Company is in material compliance with all Laws relating to the

classification of persons as independent contractors rather than as employees

and with respect to any employees leased from another employer.

 

     (d) Contributions. Full payment has been timely made of all amounts which

the Company is required, under applicable Law or under any Employee Benefit Plan

or any agreement relating to any Employee Benefit Plan to which the Company is a

party, to have paid as contributions or premiums thereto as of the last day of

the most recent fiscal year of such Employee Benefit Plan ended prior to the

date hereof. All such contributions and/or premiums have been fully deducted for

income tax purposes and no such deduction has been challenged or disallowed by

any governmental entity, and to the knowledge of Seller no event has occurred

and no condition or circumstance has existed that would give rise to any such

challenge or disallowance. All such contributions and/or premiums have been

reflected on the Company's financial statements provided pursuant to Section 3.7

in accordance with GAAP. The Company has made adequate provision for reserves to

meet contributions and premiums and any other liabilities that have not been

paid or satisfied because they are not yet due under the terms of any Employee

Benefit Plan, applicable Law or related agreements. All such liabilities or

expenses in respect of any Employee Benefit Plan have been properly accrued on

the Company's financial statements provided pursuant to Section 3.7 in

accordance with GAAP. Benefits under all Employee Benefit Plans are as

represented and have not been increased subsequent to the date as of which

documents have been provided.

 

     (e) Transactions. Neither the Company nor any of its directors, officers,

employees or, to the knowledge of Seller, other Persons who participate in the

operation of any Employee Benefit Plan or related trust or funding vehicle, has

engaged in any transaction with respect to any Employee Benefit Plan or breached

any applicable fiduciary responsibilities or obligations under Title I of ERISA

that would subject any of them to a tax, penalty or liability for prohibited

transactions or breach of any obligations under ERISA or the Code or would

result in any claim being made under, by or on behalf of any such Employee

Benefit Plan by any party with standing to make such claim.

 

     (f) Triggering Events. The execution of this Agreement and the consummation

of the transactions contemplated hereby, do not constitute a triggering event

under any Employee Benefit Plan, policy, arrangement, statement, commitment or

agreement, whether or not legally enforceable, which (either alone or upon the

occurrence of any additional or subsequent event) will or may result in any

payment (whether of severance pay or otherwise), "parachute payment" (as such

term is defined in Section 280G of the Code), acceleration, vesting or increase

in benefits to any employee or former employee or director of the Company. No

Employee Benefit Plan provides for the payment of severance, termination, change

in control or similar-type payments or benefits.

 

     (g) Documents. Seller has made available to Purchaser true and complete

copies of all material documents in connection with each Employee Benefit Plan,

including (in each case, to the extent applicable): (i) all Employee Benefit

Plans as in effect on the date hereof, together with all amendments thereto,

including, in the case of any Employee Benefit Plan not set forth in writing, a

written description thereof; (ii) all current summary plan descriptions,

summaries of material modifications, and material communications; (iii) all

current trust agreements, declarations of trust and other documents establishing

other funding arrangements (and all amendments thereto and the latest financial

statements thereof); (iv) the most recent IRS determination letter, if any,

obtained with respect to each Employee Benefit Plan intended to be qualified

under Section 401(a) of the Code or exempt under Section 501(a) or 501(c)(9) of

the Code; (v) the annual report on IRS Form 5500-series for each of the last

three years for each Employee Benefit Plan required to file such form; (vi) the

most recently prepared financial statements; and (vii) all contracts and

agreements relating to each Employee Benefit Plan, including service provider

agreements, insurance contracts, annuity contracts, investment management

agreements, subscription agreements, participation agreements, and record

keeping agreements and collective bargaining agreements.

 

     (h) Loans. Except as set forth in Schedule 3.21(h), as of the Closing Date,

the Company will not have any outstanding loans or extensions of credit to any

employees (or their family members or dependents).

 

     (i) No Controlled Group Liabilities. Seller is the only Person that is now

a member of a "controlled group of corporations" with, under "common control"

with, or a member of an "affiliated service group" with, the Company, as such

terms are defined in Section 414(b), (c), (m) or (o) of the Code (collectively,

a "Controlled Group"). The Company has incurred no liability and has no

obligations with respect to any "employee benefit plan," as defined in Section

3(3) of ERISA, or under any other compensation or employee benefit plan,

agreement, program, policy or other arrangement (including any Incentive Unit

Plan) maintained by Seller or any other member of a Controlled Group of which

the Company has ever been a member.

 

     3.22 Environmental Laws and Regulations. Except as set forth in Schedule

3.22, (i) the Company is, and since its formation has been, in compliance with

all applicable Environmental Laws, and has obtained, and is in compliance with,

all Permits required of it under applicable Environmental Laws and each such

Permit (A) remains in full force and effect and is not subject to appeal and all

applicable time periods for filing such an appeal have expired and (B) will not

be required, as a result of the transactions contemplated by this Agreement, to

be transferred or amended or require any submissions to a Governmental or

Regulatory Authority in connection therewith; (ii) there are no pending claims,

proceedings, investigations or actions by any Governmental or Regulatory

Authority or other Person or entity pending or, to the knowledge of Seller,

threatened against the Company or its business or property under any

Environmental Law; (iii) to the knowledge of the Company, there are no facts,

circumstances or conditions relating to the past or present business or

operations of the Company or any of its business or property (including the

disposal of any wastes, hazardous substances or other materials), or to any past

or present Company Property, that could reasonably be expected to give rise to

any claim, proceeding or action, or to any liability, under any Environmental

Law; (iv) the Company has not received from any Governmental or Regulatory

Authority or any other Person any notice or allegation of violation of,

non-compliance with, liability or potential liability pursuant to, any

Environmental Law (including a Clean Air Act Section 114 notice, a CERCLA

Section 104(e) request, or a potentially responsible party or "PRP" notice) and

neither the Company nor the Business is subject to any outstanding

administrative or judicial Order, "consent order" or other agreement with regard

to any violation, noncompliance or liability under any Environmental Law; (v) no

Hazardous Substance has been Released at, on, to or from any of the Company's

current or former Company Property or into the air as a result of the Business

or other activities of the Company or into, onto or upon the soil or groundwater

at any location (A) for which the Company could be obligated to remediate

Releases of such Hazardous Substances (or reimburse any other Person for the

cost of remediation) pursuant to any Environmental Law or (B) which could

reasonably be expected to trigger an investigation of the Company or the

Business or result in claims against the Company or with respect to the Business

for liability under any Environmental Law; (vi) the Company is not a party to

any contract, lease or other agreement with any Person pursuant to which the

Company has any continuing obligations with respect to the remediation of any

condition resulting from the Release of Hazardous Substances; and (vii) all

material environmental site assessment reports (including any Phase I and Phase

II reports), remediation studies, audits, assessments or similar documents (if

any) that are within the custody or control of Seller or the Company that relate

to the investigation or remediation of environmental conditions at any current

or former Company Property, or which otherwise relate to the Company's

compliance with or liability under Environmental Laws, have been made available

to Purchaser. To the knowledge of Seller, there are no such studies, audits,

assessments or similar documents that are not within the custody or control of

Seller or the Company.

 

     3.23 Interests in Clients, Suppliers, Etc.; Affiliate Transactions. Except

as set forth in Schedule 3.23, (a) there are no Contracts, liabilities or

obligations between the Company, on the one hand, and either Seller or any or

Affiliate of Seller (other than the Company) on the other hand, and (b) neither

Seller, any Affiliate of Seller nor any shareholder, officer or director of the

Company possesses, directly or indirectly, any material financial interest in,

or is a director, officer or employee of, any Person which is a client,

supplier, customer, lessor, lessee, or competitor or potential competitor of the

Company. Ownership of securities of a company whose securities are registered

under the Exchange Act of 5% or less of any class of such securities shall not

be deemed to be a material financial interest for purposes of this Section 3.23.

 

     3.24 Bank Accounts and Powers of Attorney. Set forth in Schedule 3.24 is an

accurate and complete list showing (a) the name and address of each bank in

which the Company has an account or safe deposit box, the number of any such

account or any such safe deposit box and the names of all Persons authorized to

draw thereon or to have access thereto and (b) the names of all Persons, if any,

holding powers of attorney from the Company and a summary statement of the terms

thereof. Copies of all agreements or other writings evidencing such powers of

attorney have been made available to Purchaser.

 

     3.25 Permits. Seller has delivered or made available to Purchaser for

inspection a true and correct copy of each material Permit obtained or possessed

by the Company. The Company has obtained and possesses all Permits necessary for

the lawful conduct of its business as presently conducted, or otherwise

necessary for the lawful ownership of its properties and assets or the operation

of its business as presently operated, other than those the failure of which to

obtain, possess or make could not reasonably be expected to have, individually

or in the aggregate, a Material Adverse Effect with respect to the Company. All

such Permits are in full force and effect. The Company is in compliance with all

such Permits except for such non-compliance that could not reasonably be

expected to have, individually or in the aggregate, a Material Adverse Effect

with respect to the Company. Any applications for the renewal of any such Permit

which are due prior to the Closing Date have been timely made or filed by the

Company prior to the Closing Date. No proceeding to renew, suspend, modify,

suspend, revoke, withdraw, terminate or otherwise limit any such Permit is

pending or, to the knowledge of Seller, threatened.

 

     3.26 No Changes Since Balanc