Membership Interest Purchase Agreement by and among ShoreTel, Parent and Seller, dated as of December 21, 2015

(xiv)      any Company Product warranty, other than standard warranties of Company or any Subsidiary included in the packaging of Company Products and warranties granted under Standard Outbound IP Agreements and Contracts listed in Schedule 2.17(a)(ix) of the Disclosure Letter;

(xv)        any Contract under which the Company or any Subsidiary provides any advice or services, consulting, professional services, software implementation, deployment or development services, or support services to any third party, other than standard technical support services for Company Products;

(xvi)       any Contract with any investment banker, broker, advisor or similar party retained by the Company, in connection with this Agreement and the transactions contemplated hereby;

(xvii)     any Contract pursuant to which the Company or any Subsidiary has acquired a business or entity, or material assets of a business or entity, whether by way of merger, consolidation, purchase of stock, purchase of assets, license or otherwise;

(xviii)    any Contract with any Governmental Entity, any Company Authorization, or any Contract with a government prime contractor, or higher-tier government subcontractor (each a “Government Contract”);

(xix)       any confidentiality, secrecy or non-disclosure Contract other than Standard NDAs;

(xx)         any settlement agreement with respect to any Legal Proceeding entered into within the past three years;

(xxi)       any Contract with any labor union or any collective bargaining agreement or similar agreement with its employees; any Contract (A) with any of its officers, directors, employees or any member of their immediate families (B) with any Person with whom the Company or any Subsidiary does not deal at arm’s length;

(xxii)      any Contract to license or authorize any third party to manufacture or reproduce any of the Company Products or Intellectual Property of the Company or any Subsidiary;

(xxiii)     any Contract for the employment of any director, officer, employee or consultant of the Company or any other type of Contract with any officer, employee or consultant of the Company or any Subsidiary, in each case that is not immediately terminable by the Company or such Subsidiary without cost or Liability, including any Contract requiring it to make a payment to any director, officer, employee or consultant on account of the Purchase, any transaction contemplated by this Agreement or any Contract that is entered into in connection with this Agreement;

(xxiv)     any Contract with any employment agency, recruiter, “headhunter” or similar party with respect to the hiring or retention of any employee, consultant or contractor;

(xxv)      any Contract pursuant to which rights of any third party are triggered or become exercisable, or under which any other consequence, result or effect arises, in connection with or as a result of the execution of this Agreement or the consummation of the Purchase or other transactions contemplated hereunder, either alone or in combination with any other event; or

(xxvi)        any other Contract or obligation not listed in clauses (i) through (xxv) that (A) is otherwise material to the Company or the Subsidiaries or their respective businesses, operations, financial condition, properties or assets, (B) involves the payment to or from the Company or any of the Subsidiaries of an individual amount of $25,000 or more or $100,000 or more in the aggregate and is not cancellable without penalty within 30 days, (C) involves minimum purchase commitments by the Company or any of the Subsidiaries with aggregate remaining payments of $12,000 or more, (D) involves ongoing service or support obligations that are not cancellable without penalty within 30 days or (E) involves the development or delivery of any customer specified product enhancement or upgrades.

(b)           All Material Contracts are in written form.  The applicable Group Company has performed all of the obligations required to be performed by it and is entitled to all benefits under, and is not alleged to be in default in respect of, any Material Contract.  Each of the Material Contracts is in full force and effect, subject only to the effect, if any, of applicable bankruptcy and other similar laws affecting the rights of creditors generally and rules of law governing specific performance, injunctive relief and other equitable remedies.  There exists no default or event of default or event, occurrence, condition or act, with respect to the applicable Group Company or to Parent’s knowledge, with respect to any other contracting party, which, with the giving of notice, the lapse of time or the happening of any other event or condition, would reasonably be expected to (i) become a default or event of default under any Material Contract or (ii) give any third party (A) the right to declare a default or exercise any remedy under any Material Contract, (B) the right to a rebate, chargeback, refund, credit, penalty, termination fee, or change in delivery schedule under any Material Contract, (C) the right to accelerate the maturity or performance of any obligation of the Company or any of the Subsidiaries under any Material Contract or (D) the right to cancel, terminate or modify any Material Contract.  No Group Company has received any notice or other communication regarding any actual or possible violation or breach of, default under or intention to cancel or modify any Material Contract.  No Group Company has any Liability for renegotiation of any Government Contracts.  Correct and complete copies of all Material Contracts (including all amendments thereto) have been made available to Acquirer prior to the Agreement Date.

2.18        Transaction Fees.  Neither the Company nor any Affiliate of the Company is obligated for the payment of any fees or expenses of any investment banker, broker, advisor, finder or similar party in connection with the origin, negotiation or execution of this Agreement or in connection with the Purchase or any other transaction contemplated by this Agreement.

2.19        Customers and Suppliers.

(a)          Neither the Company nor any Subsidiary has any outstanding material disputes concerning its products and/or services with any customer or distributor who, in the year ended December 31, 2014, was one of the 20 largest sources of revenues for the Company and the Subsidiaries, based on amounts paid or payable (each, a “Significant Customer”), and Parent has no knowledge of any material dissatisfaction on the part of any Significant Customer.  Each Significant Customer is listed on Schedule 2.19(a) of the Disclosure Letter.  No Group Company has received any information from any Significant Customer that such customer shall not continue as a customer of the Company or such Subsidiary (or Acquirer) after the Closing or that such customer intends to terminate or materially modify existing Contracts with the Company or such Subsidiary (or Acquirer).  The Company has not had any of its products returned by a purchaser thereof except for normal warranty returns consistent with past history and those returns that would not result in a reversal of any revenue by the Company.

(b)           Neither the Company nor any Subsidiary has any outstanding material dispute concerning products and/or services provided by any supplier who, in the year ended December 31, 2014, was one of the 20 largest suppliers of products and/or services to the Company and the Subsidiaries, based on amounts paid or payable (each, a “Significant Supplier”), and Parent has no knowledge of any material dissatisfaction on the part of any Significant Supplier.  Each Significant Supplier is listed on Schedule 2.19(b) of the Disclosure Letter.  No Group Company has received any information from any Significant Supplier that such supplier shall not continue as a supplier to the Company or such Subsidiary (or Acquirer) after the Closing or that such supplier intends to terminate or materially modify existing Contracts with the Company or such Subsidiary (or Acquirer).  The Company and the Subsidiaries have access, on commercially reasonable terms, to all products and services reasonably necessary to carry on their respective businesses, and the Company has no knowledge of any reason why they will not continue to have such access on commercially reasonable terms.

2.20        Accounts Receivable.  The accounts receivable as reflected on the Company Balance Sheet and as will be reflected in the Company Closing Financial Certificate arose in the ordinary course of business, consistent with past practices, represented bona fide claims against debtors for sales and other charges, and have been collected or are collectible in the book amounts thereof, less an amount not in excess of the allowance for doubtful accounts provided for in the Company Balance Sheet, or in the Company Closing Financial Certificate, as the case may be.  Allowances for doubtful accounts, sales return reserves and warranty returns have been prepared in accordance with GAAP consistently applied and in accordance with the Company’s and the Subsidiaries’ past practices and are sufficient to provide for any losses which may be sustained on realization of the receivables as reflected on the Company Balance Sheet and as will be reflected in the Company Closing Financial Certificate.  The accounts receivable of the Company and the Subsidiaries arising after the Company Balance Sheet Date and before the Closing Date as will be reflected in the Company Closing Financial Certificate arose or shall arise in the ordinary course of business, consistent with past practices, represented or shall represent bona fide claims against debtors for sales and other charges, less allowances for doubtful accounts, sales return reserves and warranty returns determined in accordance with GAAP consistently applied and the Company’s and the Subsidiaries’ past practices which are or shall be sufficient to provide for any losses which may be sustained on realization of the receivables.  None of the accounts receivable of the Company and the Subsidiaries is subject to any claim of offset, recoupment, setoff or counter-claim, and the Company has no knowledge of any specific facts or circumstances (whether asserted or unasserted) that could give rise to any such claim.  No material amount of accounts receivable is contingent upon the performance by the Company or any Subsidiary of any obligation or Contract other than normal warranty repair and replacement.  No Person has any lien on any of such accounts receivable, and no agreement for deduction or discount has been made with respect to any of such accounts receivable.  Schedule 2.20 of the Disclosure Letter sets forth an aging of the Company’s and the Subsidiaries’ accounts receivable in the aggregate and by customer, and indicates the amounts of allowances for doubtful accounts, sales return reserves and warranty returns.  Schedule 2.20 of the Disclosure Letter sets forth such amounts of accounts receivable of the Company and the Subsidiaries which are subject to asserted warranty claims by customers and reasonably detailed information regarding asserted warranty claims made within the last year, including the type and amounts of such claims.

2.21        Representations Complete.  None of the representations or warranties made by Parent or Seller herein or in any exhibit or schedule hereto, including the Disclosure Letter, or in any certificate furnished by Parent or Seller pursuant to this Agreement, when all such documents are read together in their entirety, contains any untrue statement of a material fact, or omits to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading.

Acquirer represents and warrants to Parent and Seller as follows:

3.1           Organization and Standing.  Acquirer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Acquirer is not in violation of any of the provisions of its Restated Certificate of Incorporation or Bylaws.

(a)           Acquirer has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action, as applicable, on the part of Acquirer.  This Agreement has been duly executed and delivered by Acquirer and constitutes the valid and binding obligation of Acquirer enforceable against Acquirer in accordance with its terms, subject only to the effect, if any, of (i) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(b)           The execution and delivery of this Agreement by Acquirer do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or require any consent, approval or waiver from any Person pursuant to, (i) any provision of the Restated Certificate of Incorporation or Bylaws of Acquirer, in each case as amended to date, or (ii) any applicable Legal Requirement, except where such conflict, violation, default, termination, cancellation or acceleration, individually or in the aggregate, would not be material to Acquirer’s ability to consummate the Purchase or to perform its obligations under this Agreement.

(c)           No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity, is required by or with respect to Acquirer in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except such consents, authorizations, filings, approvals, notices and registrations which, if not obtained or made, would not be material to Acquirer’s ability to consummate the Purchase or to perform its obligations under this Agreement and would not prevent, materially alter or delay any of the transactions contemplated by this Agreement.

4.1           Conduct of Business of the Company and the Subsidiaries.  During the period from the Agreement Date and continuing until the earlier of the termination of this Agreement and the Closing, Parent shall cause the Company to:

(a)           conduct the Company’s business solely in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Acquirer) and in compliance with all applicable Legal Requirements;

(b)           (A) pay all of the Company’s debts and Taxes when due, subject to good faith disputes over such debts or Taxes, (B) pay or perform the Company’s other obligations when due, (C) use commercially reasonable efforts consistent with past practice and policies to collect the Company’s accounts receivable when due and not extend credit outside of the ordinary course of business consistent with past practices, (D) sell the Company’s products consistent with past practices as to license, service and maintenance terms, incentive programs, and in accordance with GAAP requirements as to revenue recognition and (E) use its commercially reasonable efforts consistent with past practice and policies to preserve intact the Company’s present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing;

(c)           promptly notify Acquirer of any change, occurrence or event not in the ordinary course of its or any Subsidiary’s business, or of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to cause any of the conditions to closing set forth in Article 6 not to be satisfied;

(d)          assure that each of the Company’s Contracts (other than with Acquirer) entered into after the Agreement Date will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Purchase, and shall give reasonable advance notice to Acquirer prior to allowing any material Contract to lapse or terminate by its terms; and

(e)           maintain each of the Company’s leased premises in accordance with the terms of the applicable lease.

4.2           Restrictions on Conduct of Business of the Company and the Subsidiaries.  Without limiting the generality or effect of the provisions of Section 4.1, during the period from the Agreement Date and continuing until the earlier of the termination of this Agreement and the Closing, Parent shall cause the Company not to, do, cause or permit any of the following (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Acquirer):

(a)           Charter Documents.  Cause or permit any amendments to the Company’s Articles of Organization or Operating Agreement or equivalent organizational or governing documents;

(b)          Dividends and Distributions.  Declare or pay any dividends on or make any other distributions or payments (whether in cash, equity or property) in respect of any Company Membership Interests, or split, combine or reclassify any of the Company’s equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its equity interests, or repurchase or otherwise acquire, directly or indirectly, any of its equity interests;

(c)           Material Contracts.  (i) Other than with respect to customer Contracts entered into in the ordinary course of business and consistent with past practice that do not deviate materially from the Company’s standard form with respect to limitation of liability, warranty, most favored nation clauses or indemnity, enter into any Contract that would constitute a Material Contract, (ii) enter into any Contract requiring a novation or consent in connection with the Purchase or (iii) violate, terminate, amend, or otherwise modify or waive any of the terms of any existing Material Contract that would be covered by clause (i) if newly entered into; provided, however, that this provision shall not require Parent to seek or obtain Acquirer’s consent in order to set or change the prices at which the Company sells products or provides services to current customers in the ordinary course of business;

(d)          Issuance of Securities.  Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any Company Voting Debt or Company Membership Interests, securities convertible into, or subscriptions, rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such Company Membership Interests other convertible securities;

(e)           Employees; Consultants; Independent Contractors.  (i) Hire any additional officers or other employees, or any consultants or independent contractors, (ii) terminate the employment, change the title, office or position, or materially reduce the responsibilities of any management, supervisory or other key personnel of the Company or any Subsidiary, (iii) enter into, amend or extend the term of any employment or consulting agreement with any officer, employee, consultant or independent contractor or (iv) enter into any Contract with a labor union or collective bargaining agreement (unless required by applicable Legal Requirements);

(f)            Loans and Investments.  (A) Make any loans or advances (other than routine expense advances to employees of the Company or any Subsidiary consistent with past practice) to, or any investments in or capital contributions to, any Person (other than ordinary course funding to its existing Subsidiaries in order to fund operations in amounts consistent with past practice), or forgive or discharge in whole or in part any outstanding loans or advances, or prepay any indebtedness for borrowed money or (B) incur any indebtedness for borrowed money or guarantee any such indebtedness;

(g)          Intellectual Property.  Transfer or license from any Person any rights to any Intellectual Property, or transfer or license to any Person any rights to any Company Intellectual Property (other than under Standard Inbound IP Agreements or Standard Outbound IP Agreements), or transfer or provide a copy of any Company Source Code to any Person (including any current or former employee or consultant of the Company or any contractor or commercial partner of the Company) (other than providing access to Company Source Code to current employees and consultants of the Company or the Subsidiaries involved in the development of the Company Products on a need to know basis, consistent with past practices);

(h)          Exclusive Rights and Most Favored Party Provisions.  Enter into or amend any agreement pursuant to which any other party is granted exclusive rights or “most favored party” rights of any type or scope with respect to any of its products, technology, Intellectual Property or business, or containing any non-competition covenants or other restrictions relating to its or Acquirer’s business activities;

(i)            Dispositions; Acquisitions.  (A) Sell, lease, license or otherwise dispose of any of its properties or assets, other than sales and nonexclusive licenses of Company Products in the ordinary course of business consistent with its past practice, or enter into any Contract with respect to the foregoing, or (B) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to its and the Subsidiaries’ business, or enter into any Contract with respect to a joint venture, strategic alliance or partnership;

(k)          Payment of Obligations.  Pay, discharge or satisfy any claim or Liability arising otherwise than in the ordinary course of business, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in the Financial Statements and Transaction Expenses, or defer payment of any accounts payable other than in the ordinary course of business consistent with past practice;

(l)            Capital Expenditures.  Make any capital expenditures, capital additions or capital improvements in excess of $25,000 individually or $100,000 in the aggregate;

(m)         Insurance.  Materially change the amount of any insurance coverage;

(n)          Termination or Waiver.  Cancel, release or waive any material claims or rights held by it;

(o)          Employee Benefit Plans; Pay Increases.  Adopt or amend any Company Employee Plan with respect to the Company’s employees, or amend any compensation, benefit, entitlement, grant or award provided or made under any such plan, except in each case as required under ERISA, applicable Legal Requirements or as necessary to maintain the qualified status of such plan under the Code, materially amend any deferred compensation plan within the meaning of Section 409A of the Code and the regulations thereunder except to the extent necessary to meet the requirements of such Section, pay any special bonus or special remuneration to any employee or non-employee director or consultant of the Company or increase the salaries, wage rates or fees of the Company’s employees or consultants (other than pursuant to preexisting plans, policies or Contracts which have been disclosed to Acquirer and are set forth on Schedule 4.2(o) of the Disclosure Letter);

(p)          Severance Arrangements.  Grant or pay, or enter into any Contract providing for the granting of any severance, retention or termination pay, or the acceleration of vesting or other benefits, to any employee (current or former) or service provider of the Company (other than payments or acceleration made pursuant to preexisting plans, policies or Contracts which have been disclosed to Acquirer and are set forth on Schedule 4.2(p) of the Disclosure Letter);

(q)          Lawsuits; Settlements.  (i) Commence a lawsuit other than for the routine collection of bills or for a breach of this Agreement or (ii) settle or agree to settle any pending or threatened lawsuit or other dispute;

(r)            Accounting; Taxes.  (A) Change accounting methods or practices (including any change in depreciation or amortization policies) or revalue any of its assets (including writing down the value of inventory or writing off notes or accounts receivable otherwise than in the ordinary course of business), except in each case as required by changes in GAAP as concurred with its independent accountants and after notice to Acquirer, or (B) make or change any election in respect of Taxes, file any federal, state, or foreign income Tax Return or any other material Tax Return, file any amendment to a federal, state, or foreign income Tax Return or any other material Tax Return, adopt or change any accounting method in respect of Taxes, enter into any Tax sharing or similar agreement or closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or enter into intercompany transactions giving rise to deferred gain or loss of any kind (provided, that if the Company or a Subsidiary is required by law to file a federal, state or foreign income Tax Return or other material Tax Return, the Company or such Subsidiary shall be permitted to do so following reasonable consultation with Acquirer);

(s)           Real Property; Encumbrances.  Enter into any agreement for the purchase, sale or lease of any real property, or place or allow the creation of any Encumbrance (other than Permitted Encumbrances) on any of its properties;

(t)            Warranties, Discounts.  Materially change the manner in which it provides warranties, discounts or credits to customers, or give any discount, accommodation or other concession other than in the ordinary course of business consistent with past practice, in order to accelerate or induce the collection of any receivable;

(u)          Interested Party Transactions.  Enter into any Contract in which any officer, director or agent of the Company or Seller or any Specified Individual (or any member of their immediate families) has an interest under circumstances that, if entered immediately prior to the Agreement Date, would require that such Contract be listed on Schedule 2.14 of the Disclosure Letter; and

(v)          Other.  Take or agree in writing or otherwise to take, any of the actions described in clauses (a) through (u) in this Section 4.2(b), or any action which would reasonably be expected to make any of the Company’s representations or warranties contained in this Agreement untrue or incorrect (such that the condition set forth in the first sentence of Section 6.3(a) would not be satisfied) or prevent the Company from performing or cause the Company not to perform one or more covenants required hereunder to be performed by the Company (such that the condition set forth in the second sentence of Section 6.3(a) would not be satisfied).

(a)           From and after the date of this Agreement until the Closing or termination of this Agreement pursuant to Article 7, no Group Company will, nor will any of them authorize or permit any of their respective officers, directors, affiliates, members, stockholders (other than stockholders of Parent) or employees or any investment banker, attorney or other advisor or representative retained by any of them (all of the foregoing collectively being the “Company Representatives”) to, directly or indirectly, (i) solicit, initiate, seek, knowingly entertain, knowingly encourage, facilitate, support or induce the making, submission or announcement of any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal (as hereinafter defined), (ii) enter into, participate in, maintain or continue any communications (except solely to provide written notice as to the existence of these provisions) or negotiations regarding, or deliver or make available to any Person any non-public information with respect to, or take any other action regarding, any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (iii) agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) any Acquisition Proposal, (iv) enter into any letter of intent or any other Contract contemplating or otherwise relating to any Acquisition Proposal or (v) enter into any other transaction or series of transactions not in the ordinary course of the Company’s business, the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Closing.  Each Group Company will immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any Persons conducted prior to or on the Agreement Date with respect to any Acquisition Proposal.  If any Company Representative, whether in his or her capacity as such or in any other capacity, takes any action that the Company is obligated pursuant to this Section 5.1 not to authorize or permit such Company Representative to take, then Parent shall be deemed for all purposes of this Agreement to have breached this Section 5.1.

“Acquisition Proposal” shall mean any agreement, offer, proposal or bona fide indication of interest (other than this Agreement or any other offer, proposal or indication of interest by Acquirer), or any public announcement of intention to enter into any such agreement or of (or intention to make) any offer, proposal or bona fide indication of interest, relating to, or involving: (A) any acquisition or purchase from the Company or any of the Subsidiaries, or from Seller, by any Person or Group (as hereinafter defined) of more than a 10% interest in the total outstanding voting securities of Company or any of the Subsidiaries or any tender offer or exchange offer that if consummated would result in any Person or Group beneficially owning 10% or more of the total outstanding voting securities of the Company or any of the Subsidiaries or any merger, consolidation, business combination or similar transaction involving the Company or any of the Subsidiaries, (B) any sale, lease, mortgage, pledge, exchange, transfer, license (other than in the ordinary course of business), acquisition, or disposition of more than 10% of the assets of the Company and the Subsidiaries in any single transaction or series of related transactions or (C) any liquidation, dissolution, recapitalization or other significant corporate reorganization of the Company or any of the Subsidiaries, or any extraordinary dividend, whether of cash or other property.

“Group” shall have the definition ascribed to such term under Section 13(d) of the Exchange Act, the rules and regulations thereunder and related case law.

(b)          Parent shall immediately (but in any event, within 24 hours) notify Acquirer orally and in writing after receipt by a Group Company (or, to the knowledge of Parent, by any of Representatives of a Group Company), of (i) any Acquisition Proposal, (ii) any inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal, (iii) any other notice that any Person is considering making an Acquisition Proposal or (iv) any request for nonpublic information relating to the Company or any Subsidiary or for access to any of the properties, books or records of the Company or any Subsidiary by any Person or Persons other than Acquirer other than, with respect to clause (iv) only, in the ordinary course of business and not related to an Acquisition Proposal.  Such notice shall describe (1) the material terms and conditions of such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request and (2) the identity of the Person or Group making any such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request.  Parent shall keep Acquirer fully informed of the status and details of, and any modification to, any such inquiry, expression of interest, proposal or offer and shall provide to Acquirer a true, correct and complete copy of such inquiry, expression of interest, proposal or offer and any amendments thereto, if it is in writing, or a reasonable written summary thereof, if it is not in writing.

(a)           The parties hereto acknowledge that Acquirer and the Company have previously executed a mutual confidentiality agreement dated July 17, 2015 (the “Confidentiality Agreement”) which shall continue in full force and effect in accordance with its terms.  Parent hereby agrees to be bound by the terms and conditions of the Confidentiality Agreement to the same extent as though Parent were a party thereto.

(b)          Each party shall not, and shall ensure that its respective officers, directors, affiliates, members or employees or any investment banker, attorney or other advisor or representative retained by any of them shall not, issue any press release or other public statement relating to the terms of this Agreement or the transactions contemplated hereby without consulting with the other party as to the content thereof, unless required by law.  Notwithstanding anything herein or in the Confidentiality Agreement, Acquirer and Parent shall mutually agree on the content of the press releases to be issued by Acquirer and Parent, respectively, announcing the Purchase.  Each of the parties hereto acknowledges that Parent and Acquirer are permitted to make filings with the Securities and Exchange Commission (including a Current Report on Form 8-K) disclosing the terms of this Agreement and the transactions contemplated hereby, following consultation with the other party as to the content thereof.

5.3           Reasonable Efforts.  Each of the parties hereto agrees to use its commercially reasonable efforts, and to cooperate with each other party hereto, to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, appropriate or desirable to consummate and make effective, in the most expeditious manner practicable, the Purchase and the other transactions contemplated hereby, including the satisfaction of the respective conditions set forth in Article 6, and including to execute and deliver such other instruments and do and perform such other acts and things as may be necessary  or reasonably desirable for effecting completely the consummation of the Purchase and the other transactions contemplated hereby.

5.4           Third Party Consents; Notices.

(a)           Parent shall use reasonable efforts to obtain prior to the Closing, and deliver to Acquirer at or prior to the Closing, all consents, waivers and approvals under each Contract listed or described on Schedule 2.3(b) of the Disclosure Letter (and any Contract entered into after the Agreement Date that would have been required to be listed or described on Schedule 2.3(b) of the Disclosure Letter if entered into prior to the Agreement Date).  Parent shall assign to the Company, prior to the Closing, and deliver evidence of such assignment to Acquirer at or prior to the Closing, all of the Contracts listed or described on Exhibit F-2 hereto and to amend prior to the Closing, and deliver evidence of such amendment to Acquirer at or prior to the Closing, all of the Contracts listed or described on Exhibit F-3 hereto.

(b)          Parent and/or the Company shall give all notices and other information required to be given to the employees of the Company or any Subsidiary, any collective bargaining unit representing any group of employees of the Company or any Subsidiary, and any applicable government authority under the WARN Act, the National Labor Relations Act, as amended, the Code, COBRA and other applicable Legal Requirements in connection with the transactions contemplated by this Agreement.

5.5           Litigation.  Parent will (a) notify Acquirer in writing promptly after learning of any Company Legal Proceeding or any Legal Proceeding initiated by the Company or any of the Subsidiaries (a “New Litigation Claim”), (b) notify Acquirer of ongoing material developments in any New Litigation Claim and (c) consult in good faith with Acquirer regarding the conduct of the defense of any New Litigation Claim.

5.6           Access to Information.  During the period commencing on the date hereof and continuing until the earlier of the termination of this Agreement and the Closing, Parent shall cause the Company to afford Acquirer and its accountants, counsel and other representatives, reasonable access during business hours to (a) all of the Company’s and each of the Subsidiaries’ properties, books, Contracts and records and (b) all other information concerning the business, properties and personnel of the Company or any of the Subsidiaries as Acquirer may reasonably request.  No information or knowledge obtained by Acquirer during the pendency of the transactions contemplated by this Agreement in any investigation pursuant to this Section 5.6 shall affect or be deemed to modify any representation, warranty, covenant, condition or obligation under this Agreement.

5.7           Expenses.  Whether or not the Purchase is consummated, except as set forth on Schedule 5.7, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense.

5.8           Employees and Contractors.

(a)            With respect to any Offered Employee, Parent shall, and shall cause the Company to, assist Acquirer with its efforts to enter into Employment Documents with such employee as soon as practicable after the date hereof and in any event prior to the Closing Date.  Notwithstanding any of the foregoing, Acquirer shall not have any obligation to make an offer of employment to any employee of the Company (other than the Employment Documents previously extended to and executed by the Key Employees on the Agreement Date).  With respect to matters described in this Section 5.8(a), none of the Group Companies shall send any notices or other communication materials to any of their respective employees that is reasonably expected to adversely affect Acquirer’s attempt to hire or retain the Company’s employees without Acquirer’s prior written consent.  However, the foregoing shall not preclude Parent and/or any Group Company from providing notice of termination to Designated Employees (as defined below).  Parent shall cause the Company and the Subsidiaries to terminate the employment of each of those Company and Subsidiary employees who (i) have not received an offer of continued employment with the Company or Acquirer prior to the Agreement Date or are listed on Schedule 5.8 hereto, effective no later than three Business Days after the Agreement Date, (ii) have notified Acquirer that they will not accept an offer of continued employment with the Company or Acquirer on or after the Agreement Date and prior to the Closing Date, effective no later than three Business Days following Parent’s receipt of written notification from Acquirer of such employee’s decision not to accept such offer or (iii) have otherwise not accepted an offer of continued employment with the Company or Acquirer as of one Business Day prior to the Closing Date, effective no later than one Business Day prior to the Closing Date (each employee in (i), (ii) or (iii), a “Designated Employee”).

(b)           Parent shall use commercially reasonable efforts to retain each Person specified on Schedule 5.8(b) (the “Specified Contractors”) and to cause such Specified Contractors to enter into a contractor agreement with Acquirer (or its designee) prior to the Closing.  Unless otherwise agreed to in writing by Acquirer, Parent and/or the Company shall cause the relationships of each consultant or independent contractor with the Company and each Subsidiary who are not Specified Contractors to be terminated at or prior to the Closing.

(c)           Parent will be solely responsible for any and all Liabilities arising from or relating to any Designated Employee and any consultant or independent contractor of the Company who is not a Specified Contractor (or who is a Specified Contractor, but who declines to enter into a contractor agreement with Acquirer (or its designee) prior to the Closing) (collectively, the “Designated Service Providers”), including but not limited to Liabilities relating to wrongful discharge, employment discrimination, severance, the termination of such Designated Service Provider’s employment or other services with the Company, the WARN Act, the National Labor Relations Act, as amended, the Code, COBRA and other applicable Legal Requirements, whether or not in connection with the transactions contemplated by this Agreement, and all withholding and reporting tax Liabilities in connection therewith.

(d)           Parent will be solely responsible for any and all Liabilities arising from or relating to (i) any Offered Employee who accepts an offer of continued employment with Acquirer or the Company, (ii) any Specified Contractor that enters into a contractor agreement with Acquirer (or its designee) prior to the Closing and (iii) any Scheduled Employee (as defined below) to whom Acquirer does not make an offer of employment, within 10 Business Days following the Agreement Date, at substantially the same base salary as such Scheduled Employee’s current base salary, in each case if, and only to the extent that, the causes of action related to such Liabilities arose prior to the Closing Date, including but not limited to Liabilities relating to wrongful discharge, employment discrimination, severance, the termination of such individual’s employment or other services with the Company, the WARN Act, the National Labor Relations Act, as amended, the Code, COBRA and other applicable Legal Requirements, whether or not in connection with the transactions contemplated by this Agreement, and all withholding and reporting tax Liabilities in connection therewith (the Liabilities described in subsections (c) and (d) of this Section 5.8, the “Excluded Employment Liabilities”).  For the avoidance of doubt, any Liabilities relating to wrongful discharge, severance, the termination of an Offered Employee’s employment or other services with the Company, the WARN Act or COBRA shall not be Excluded Employment Liabilities if, and to the extent that, they arise as a result of a termination of such Offered Employee’s employment with the Company following the Closing Date.

(e)            Acquirer agrees to offer employment, within 10 Business Days following the Agreement Date, to each of the employees listed on Schedule 5.8(e) (collectively, the “Scheduled Employees”) at substantially the same base salary as such Scheduled Employee’s current base salary.  With respect to any Scheduled Employee who does not so receive an offer of employment from Acquirer, within 10 Business Days following the Agreement Date, Acquirer will be solely responsible for any and all Liabilities arising from or relating to the termination of such Scheduled Employee, including but not limited to Liabilities relating to wrongful discharge, severance, failure to provide notice under the WARN Act or corollary state law or COBRA, and all withholding and reporting tax Liabilities in connection therewith.

5.9           Termination of Financing Statements.  Parent shall, or cause the Company to, take all actions necessary such that (i) UCC-2 or UCC-3 termination statements, as applicable, have been filed with respect to each of the UCC-1 financing statements filed in order to perfect security interests in assets of the Company that have not yet expired and (ii) all Encumbrances (other than Permitted Encumbrances) on assets of the Company shall be released prior to or simultaneously with the Closing.

5.10        Insurance.  Prior to the Closing, the Company may obtain up to a six year prepaid “tail policy” for its directors and officers with coverage amounts as the Company may determine in its sole discretion prior to the Closing; provided, that the fees and expenses associated with such “tail policy”, for the term of such “tail policy”, shall be included as a liability in the calculation of the Company Net Working Capital and shall be reflected in the Company Closing Financial Certificate.  Acquirer shall cause the Company to cause to be maintained in effect such “tail policy” during such six year period.

5.11        Director and Officer Indemnification.  For a period of six years following the Closing, Acquirer shall, or shall cause the Company to, fulfill the obligations of the Company to indemnify each Person who is or was a director or officer of the Company as of the Agreement Date against any losses such Person may incur based upon matters existing or occurring prior to the Closing pursuant to any applicable indemnification agreement as in effect on the Agreement Date.

5.12        Tax Matters.

(a)           Acquirer, Parent, Seller and the Company shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information reasonably relevant to any such audit, litigation, or other proceeding for a period of six years.

(b)           As soon as practicable after the Closing, Acquirer shall deliver to Parent a statement (the “Allocation Statement”), which shall allocate the Total Consideration among the assets of the Company and the Subsidiaries in accordance with the allocation requirements of Section 1060 of the Code.  If within 15 Business Days after the delivery of the Allocation Statement Parent notifies Acquirer that Parent objects to the allocation set forth in the Allocation Statement, Acquirer and Parent shall use commercially reasonable efforts to resolve such dispute within 20 days.  In the event that Acquirer and Parent are unable to resolve such dispute within such 20-day period, Acquirer and Parent shall jointly retain a nationally recognized accounting firm to resolve the disputed items.  Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall be adjusted to reflect such resolution.  The costs, fees and expenses of the accounting firm shall be borne equally by Acquirer and Parent.  For all Tax purposes, Acquirer and Parent agree to report the transactions contemplated by this Agreement in a manner consistent with the Allocation Statement, and will not take any position inconsistent therewith in any Tax Return, in any audit or refund claim, in any litigation or otherwise, unless required to do so by a Tax Authority.  Acquirer and Parent shall each be responsible for the preparation of their own Section 1060 statements and forms in accordance with applicable Tax laws, and each shall execute and deliver to each other such statements and forms as are reasonably requested by the other parties hereto.

(c)           All transfer, documentary, sales, use, stamp, registration, value added and other similar taxes and fees (including any penalties and interest) incurred in connection with transactions contemplated by this Agreement (including any real property transfer tax and any similar tax) (“Transfer Taxes”) shall be paid by Parent when due.  Parent will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such taxes and fees, and, if required by applicable Legal Requirements, Acquirer will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.

5.13        Closing Financial Certificate.  Parent shall prepare and deliver to Acquirer, not later than three Business Days prior to the Closing Date, a draft of the Company Closing Financial Certificate (which certificate shall be accompanied by such supporting documentation, information and calculations as are necessary for Acquirer to verify and determine the amounts set forth therein).  The draft of the Company Closing Financial Certificate shall set forth the Company’s good faith estimate, as of three Business Days prior to the Closing Date, of items (i) through (iv) set forth in the definition of “Company Closing Financial Certificate” on Exhibit A hereto.

6.1           Conditions to Obligations of Each Party at or prior to the Closing.  The respective obligations of each party hereto to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions:

(a)          No Order; Illegality.    No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition shall be in effect which (i) prevents the consummation of the Purchase, (ii) prohibits Acquirer’s ownership or operation of any portion of the Business or (iii) compels Acquirer or the Company to dispose of or hold separate all or any material portion of the business or assets of Acquirer, the Company or any of their respective Subsidiaries or Affiliates as a result of the Purchase.  No any action shall have been taken by any Governmental Entity seeking any of the foregoing restraints or limitations referred to in clauses (i) through (iii) above, and no statute, rule, regulation or order shall have been enacted, entered, enforced or deemed applicable to the Purchase, which would result in any of the foregoing restraints or limitations referred to in clauses (i) through (iii) above.

6.2           Additional Conditions to Obligations of Parent.  The obligations of Parent to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions (it being understood that each such condition is solely for the benefit of Parent and may be waived by Parent in writing in its sole discretion without notice or Liability to any Person):

(a)           Representations, Warranties and Covenants.  The representations and warranties of Acquirer in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality, which representations and warranties as so qualified shall be true and correct in all respects) on and as of the date hereof and on and as of the Closing Date as though such representations and warranties were made on and as of such date (except for representations and warranties which address matters only as to a specified date, which representations and warranties shall be true and correct with respect to such specified date).  Acquirer shall have performed and complied in all material respects with all covenants and obligations of this Agreement required to be performed and complied with by it at or prior to the Closing.

(b)          Receipt of Closing Deliveries.  Parent shall have received each of the agreements, instruments and other documents set forth in Section 1.3(a).

6.3           Additional Conditions to the Obligations of Acquirer.  The obligations of Acquirer to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions (it being understood that each such condition is solely for the benefit of Acquirer and may be waived by Acquirer in writing in its sole discretion without notice or Liability to any Person):

(a)           Representations, Warranties and Covenants.  (i) The representations and warranties of Parent herein (including the representations and warranties contained in Section 2.2 (Capital Structure) but otherwise excluding the Fundamental Representations) shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality, which representations and warranties shall be true and correct in all respects) on and as of the date hereof and on and as of the Closing Date as though such representations and warranties were made on and as of such date (except for representations and warranties which address matters only as to a specified date, which representations and warranties shall be true and correct in all material respects with respect to such specified date) and (ii) the Fundamental Representations (excluding the representations and warranties contained in Section 2.2 (Capital Structure)) shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date as though such representations and warranties were made on and as of such date (except for representations and warranties which address matters only as to a specified date, which representations and warranties shall be true and correct with respect to such specified date).  Parent shall, and shall cause the Company to, have performed and complied in all material respects with all covenants and obligations of this Agreement required to be performed and complied with by Parent or the Company at or prior to the Closing.

(b)          Receipt of Closing Deliveries.  Acquirer shall have received each of the agreements, instruments and other documents set forth in Section 1.3(b).

(c)           No Legal Proceedings.  No Governmental Entity shall have commenced or threatened to commence any Legal Proceeding (i) challenging or seeking the recovery of a material amount of damages in connection with the Purchase or seeking to prohibit or limit the exercise by Acquirer of any material right pertaining to ownership of equity interests of the Company or (ii) that could, if adversely determined or settled against the Company or any of the Subsidiaries, reasonably be expected to result in a Material Adverse Effect on the Company and the Subsidiaries, taken as a whole.

(d)          No Material Adverse Effect.   No Material Adverse Effect shall have occurred with respect to the Company and the Subsidiaries, taken as a whole.

(e)           Employment Documents; Non-Competition Agreements.  (i) Each of the Key Employees shall have executed and delivered each of the Employment Documents required to be signed by such Key Employees, and such Employment Documents shall continue to be in full force and effect and no action shall have been taken by any such individual to rescind such Employment Documents and (ii) 80% of the Offered Employees shall have executed and delivered each of the Employment Documents required to be signed by such Offered Employees, and Employment Documents of such percentage of the Offered Employees shall continue to be in full force and effect.

(f)           Certain Payments.  The Company shall have made all 2015 annual bonus and commission, to the extent known or billed, payments payable to employees, consultants and contractors of the Company.

(g)          Audited Financial Statements.  Acquirer shall have received from Parent the audited financial statements of the Company for the fiscal year ending December 31, 2014 and the nine months ended September 30, 2015.

(a)           by mutual written consent duly authorized by Parent and Acquirer;

(b)          by either Acquirer or Parent, if the Closing shall not have occurred on or before  the date that is 45 days after the Agreement Date or such other date that Acquirer and Parent may agree upon in writing (the “Termination Date”); provided, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose breach of any covenant or agreement hereunder will have been the principal cause of, or will have directly resulted in, the failure of the Closing to occur on or before the Termination Date;

(c)           by either Acquirer or Parent, if (i) there shall be any applicable Legal Requirements that makes consummation of the Purchase illegal or otherwise prohibited or (ii) any permanent injunction or other order of a Governmental Entity of competent authority preventing the consummation of the Purchase shall have become final and nonappealable;

(d)          by Acquirer, if (i) Parent have breached any representation, warranty, covenant or agreement contained herein and such breach shall not have been cured within ten Business Days after receipt by Parent of written notice of such breach (provided, however, that no such cure period shall be available or applicable to any such breach which by its nature cannot be cured) and if not cured within the timeframe above and at or prior to the Closing, such breach would result in the failure of any of the conditions set forth in Section 6.1 or Section 6.3 to be satisfied or (ii) there shall have been a Material Adverse Effect with respect to the Company; or

(e)           by Parent, if Acquirer shall have breached any representation, warranty, covenant or agreement contained herein and such breach shall not have been cured within ten Business Days after receipt by Acquirer of written notice of such breach (provided, however, that no such cure period shall be available or applicable to any such breach which by its nature cannot be cured) and if not cured within the timeframe above and at or prior to the Closing, such breach would result in the failure of any of the conditions set forth in Section 6.1 or Section 6.2 to be satisfied.

Any termination of this Agreement under clauses (b) through (e) of this Section 7.1 will be effective by the delivery of a written notice of the terminating party to the other party hereto.

7.2           Effect of Termination.  In the event of termination of this Agreement as provided in Section 7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Acquirer, the Company, Parent or their respective officers, directors or affiliates; provided, however, that (a) the provisions of Section 5.2 (Confidentiality; Public Disclosure), this Section 7.2 (Effect of Termination), Article 9 (General Provisions) and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement and (b) nothing herein shall relieve any party hereto from liability in connection with any willful breach of such party’s representations, warranties or covenants contained herein.

7.3           Amendment.  The parties hereto may amend this Agreement at any time prior to the Closing Date pursuant to an instrument in writing signed on behalf of each of the parties hereto.

7.4           Extension; Waiver.  At any time at or prior to the Closing, any party hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein.  At any time after the Closing, Parent and Acquirer may (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such Person contained herein.  No delay in exercising any right under this Agreement shall constitute a waiver of such right, and no waiver of any breach or default shall be deemed a waiver of any other breach or default of the same or any other provision in this Agreement.

(a)           At the Closing, the Escrow Cash shall be deposited with the Escrow Agent, such deposit, together with any interest that may be earned thereof, to constitute an escrow fund (the “Escrow Fund”) and to be governed by the provisions set forth herein and in the Escrow Agreement.  Following the Closing, the Escrow Fund shall be available to compensate Acquirer (on behalf of itself or any other Indemnified Person (as such term is defined in Section 8.2 below)) for Indemnifiable Damages (as such term is defined in Section 8.2 below) pursuant to the indemnification obligations of Parent.  No portion of the Escrow Fund, nor any beneficial interest therein, may be pledged, subjected to any Encumbrance, sold, assigned or transferred, by Parent, or be taken or reached by any legal or equitable process in satisfaction of any debt or other Liability of Parent, in each case prior to the disbursement of the Escrow Fund to Parent in accordance with Section 8.1(b) below.

(b)          Within five Business Days following the date that is 12 months after the Closing Date (the “Escrow Release Date”), the parties will issue a joint written instruction to the Escrow Agent to disburse to Parent the Escrow Fund less (i) that portion of the Escrow Fund previously paid to Acquirer in satisfaction of claims for indemnification in accordance with Article 8 of this Agreement and (ii) the total amount of all unsatisfied or disputed claims for indemnification specified in any Claim Certificate (as defined in Section 8.5 below) delivered to Parent prior to the Escrow Release Date.  Any portion of the Escrow Fund held following the Escrow Release Date with respect to pending but unresolved claims for indemnification that is not awarded to Acquirer upon the resolution of such claims shall be disbursed to Parent within 10 Business Days following resolution of such claims, in accordance with a joint written instruction to be provided by the parties or a Final Order (as defined below).

8.2           Indemnification.

(a)           Subject to the limitations set forth in this Article 8, Parent shall indemnify and hold harmless Acquirer and its officers, directors, agents and employees, and each person, if any, who controls or may control Acquirer within the meaning of the Securities Act (each of the foregoing being referred to individually as an “Indemnified Person” and collectively as “Indemnified Persons”) from and against any and all losses, Liabilities, damages, fees, interest, costs and expenses, including costs of investigation and defense and reasonable fees and expenses of lawyers, experts and other professionals, directly or indirectly, whether or not due to a third-party claim (collectively, “Indemnifiable Damages”), arising out of, resulting from or in connection with:

(i)                  any failure of any representation or warranty made by Parent or Seller in this Agreement or the Disclosure Letter (including any exhibit or schedule to the Disclosure Letter), to be true and correct as of the Agreement Date and as of the Closing Date as though such representation or warranty were made as of the Closing Date (except in the case of representations and warranties which by their terms speak only as of a specific date or dates, which representations and warranties shall be true and correct as of such date);

(ii)                 any failure of any certification, representation or warranty made by Parent in any certificate (other than the Company Closing Financial Certificate) delivered to Acquirer pursuant to this Agreement to be true and correct as of the date such certificate is delivered to Acquirer;

(iii)               any breach of or default in connection with any of the covenants, agreements or obligations made by Parent or Seller in this Agreement, including but not limited to in Section 1.4 and any of the Exhibits hereto;

(iv)               any inaccuracies in the Company Closing Financial Certificate with respect to the calculation of Transaction Expenses or Company Debt;

(v)                any claim asserted or held by any current, former or alleged holder of Company Membership Interests alleging any ownership of, interest in or right to acquire any securities of the Company or otherwise disputing the treatment of Company Membership Interests in connection with the Purchase;

(vi)               any claim or right asserted or held by any person who is or at any time was an officer, director, employee or agent of the Company involving a right or entitlement or an alleged right or entitlement to indemnification, reimbursement of expenses or any other relief or remedy (under the charter documents or under any indemnification agreement or similar Contract, under any Legal Requirement or otherwise) with respect to any act or omission on the part of such person or any event or other circumstance that arose, occurred or existed at or prior to the Closing;

(vii)              any Excluded Employment Liabilities;

(viii)            any Pre-Closing Taxes that have not specifically reduced the Total Consideration (including through the calculation of Company Net Working Capital) and any Transfer Taxes not paid by Parent; and

(ix)                the matters described on Schedule 8.2(a)(ix).

(b)          Materiality standards or qualifications, and qualifications by reference to the defined term “Material Adverse Effect” in any representation, warranty or covenant shall only be taken into account in determining whether a breach of or default in connection with such representation, warranty or covenant (or failure of any representation or warranty to be true and correct) exists, and shall not be taken into account in determining the amount of any Indemnifiable Damages with respect to such breach, default or failure to be true and correct.

(a)           Notwithstanding anything contained herein to the contrary, no Indemnified Person may make a claim against the Escrow Fund in respect of any claim for indemnification that is made pursuant to clauses (i) or (ii) of Section 8.2(a) (other than claims arising out of, resulting from, or in connection with (x) any failure of any Fundamental Representation or (y) fraud by a Group Company), unless and until a Claim Certificate (as defined below) describing Indemnifiable Damages in an aggregate amount greater than $42,500 (the “Threshold”) has been delivered, in which case the Indemnified Person may make claims for indemnification for all Indemnifiable Damages (including the amount of the Threshold), subject to applicable limitations contained herein.

(b)          If the Purchase is consummated, recovery from the Escrow Fund shall constitute the sole and exclusive remedy for the indemnification obligations under this Agreement for the matters listed in clauses (i) and (ii) of Section 8.2(a), except in the case of (A) fraud by a Group Company, (B) claims arising out of, resulting from, or in connection with any failure of any Fundamental Representation and (C) the matters listed in clauses (iii)-(ix) of Section 8.2(a) (the matters described in clauses (A), (B) and (C), collectively, the “Fundamental Matters”).  In the case of the Fundamental Matters, after Indemnified Persons have exhausted or made claims upon the Escrow Fund (after taking into account all other claims for indemnification from the Escrow Fund made by Indemnified Persons), and for all other claims, Parent shall be liable for any such Indemnifiable Damages resulting therefrom. Notwithstanding anything to the contrary contained herein, (i) the total Liability of Parent for indemnification arising out of, resulting from, or in connection with any failure of the representations and warranties of Parent in Section 2.10 (Intellectual Property) shall be limited to 75% of the Total Consideration, (ii) the total Liability of Parent for indemnification pursuant to this Article 8 for all other Fundamental Matters shall be limited to the Total Consideration and (iii) any limitation of Liability in this Section 8.3(b) shall not apply in the case of fraud by a Group Company.

(c)           Notwithstanding anything to the contrary contained herein, the amounts that an Indemnified Person recovers from the Escrow Fund pursuant to Fundamental Matters shall not reduce the amount that an Indemnified Person may recover with respect to claims that are not Fundamental Matters.  By way of illustration and not limitation, assuming there are no other claims for indemnification, compensation or reimbursement, in the event that Indemnifiable Damages resulting from a Fundamental Matter are first satisfied from the Escrow Fund and such recovery fully depletes the Escrow Fund, the maximum amount recoverable by an Indemnified Person pursuant to a subsequent claim that is not a Fundamental Matter shall continue to be the full Escrow Amount irrespective of the fact that the Escrow Fund was used to satisfy such Fundamental Matter, such that the amount recoverable for such two claims would be the same regardless of the chronological order in which they were made.

(d)          Notwithstanding anything to the contrary contained herein, (i) Parent shall not have any right of indemnification, compensation, reimbursement, contribution or right of advancement from Acquirer, the Company or any other Indemnified Person with respect to any Indemnifiable Damages claimed by any Indemnified Person or any right of subrogation against the Company with respect to any indemnification, compensation or reimbursement of an Indemnified Person by reason of any of the matters set forth in Section 8.2(a), (ii) the rights and remedies of the Indemnified Persons after the Closing shall not be limited by (x) any investigation by or on behalf of, or disclosure to (other than in the Disclosure Letter with respect to clause (i) of Section 8.2(a), subject to any limitations expressly set forth therein), any Indemnified Person at or prior to the Closing regarding any failure, breach or other event or circumstance or (y) any waiver of any condition to the Closing related thereto and (iii) if an Indemnified Person’s claim under this Article 8 may be properly characterized in multiple ways in accordance with this Article 8 such that such claim may or may not be subject to different limitations depending on such characterization, then such Indemnified Person shall have the right to characterize such claim in a manner that maximizes the recovery and time to assert such claim permitted in accordance with this Article 8; provided that nothing herein shall limit the liability of Parent for any fraud by a Group Company.

(e)           In no event shall Parent be liable pursuant to Section 8.2 for any punitive or special damages, except and to the extent that such damages are payable by an Indemnified Person to a third party.

(f)            All Indemnifiable Damages pursuant to Section 8.2(a)(vi) shall be calculated net of the amount of any actual recoveries actually received by an Indemnified Person prior to the Escrow Release Date under any existing directors and officers insurance policies (calculated net of any actual collection costs and reserves, expenses, deductibles or premium adjustments or retrospectively rated premiums (as determined in good faith by an Indemnified Person) incurred or paid to procure such recoveries) in respect of any Indemnifiable Damages suffered, paid, sustained or incurred by any Indemnified Person.

8.4           Period for Claims Against Escrow Fund.  Except with respect to Fundamental Matters, the period during which claims for Indemnifiable Damages may be made (the “Claims Period”) against the Escrow Fund for Indemnifiable Damages shall commence at the Closing and terminate at 11:59 p.m. California time on the Escrow Release Date.  The Claims Period for Indemnifiable Damages arising out of, resulting from or in connection with Fundamental Matters shall commence at the Closing and terminate upon the expiration of the applicable statute of limitations with respect to such matter; provided that the Claims Period for Indemnifiable Damages arising out of, resulting from or in connection with any breach of the representations and warranties of the Company set forth in Section 2.12 (Taxes) shall commence at the Closing and terminate at 11:59 p.m. California time on the date that is six years after the Closing Date, provided, further, that the Claims Period for any claim arising out of, resulting from or in connection with fraud by a Group Company shall commence at the Closing and survive indefinitely.

(a)           With respect to claims for Indemnifiable Damages against the Escrow Fund, on or before the last day of the applicable Claims Period, Acquirer may deliver to Parent a certificate signed by any officer of Acquirer (an “Claim Certificate”):

(i)            stating that an Indemnified Person has incurred, paid, reserved or accrued, or that it reasonably believes it will incur, pay, reserve or accrue, Indemnifiable Damages;

(ii)          stating the amount of such Indemnifiable Damages (which, in the case of Indemnifiable Damages not yet incurred, paid, reserved or accrued, may be the maximum amount reasonably believed by Acquirer to be incurred, paid, reserved, accrued or demanded by a third party); and

 

(iii)         specifying in reasonable detail (based upon the information then possessed by Acquirer) the individual items of such Indemnifiable Damages included in the amount so stated and the nature of the claim to which such Indemnifiable Damages are related.

No delay in providing such Claim Certificate within the Claims Period shall affect an Indemnified Person’s rights hereunder, unless (and then only to the extent that) Parent is materially prejudiced thereby.  At the time of delivery of any Claim Certificate to Parent, if such delivery is on or before the Escrow Release Date, a duplicate copy of such Claim Certificate shall be delivered to the Escrow Agent by or on behalf of Acquirer (on behalf of itself or any other Indemnified Person). 

(a)           If Parent does not contest, by written notice to Acquirer, any claim or claims by Acquirer made in any Claim Certificate within 20 Business Days after any such Claim Certificate is received by Parent, then Parent will be conclusively deemed to have consented to the recovery by the Indemnified Person of the full amount of Indemnifiable Damages specified in the Claim Certificate, including the forfeiture of such amount from the Escrow Fund having a value sufficient to satisfy such Indemnifiable Damages and, without further notice, to have stipulated to the entry of a final judgment for Indemnifiable Damages against Parent for such amount in any court having jurisdiction over the matter where venue is proper.

(b)          If Parent objects in writing to any claim or claims by Acquirer made in any Claim Certificate within such 20 Business Day period, Acquirer and Parent shall attempt in good faith for 30 Business Days after Acquirer’s receipt of such written objection to resolve such objection.  If Acquirer and Parent shall so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties.  The Escrow Agent shall be entitled to conclusively rely on any such memorandum and the Escrow Agent shall distribute such amount from the Escrow Fund in accordance with the terms of such memorandum.

(c)           If no such agreement can be reached during the 30 Business Day period for good faith negotiation, but in any event upon the expiration of such 30 Business Day period, Acquirer and Parent will select a mutually-acceptable mediator to mediate the dispute.  Neither party may unreasonably withhold consent to the selection of a mediator.  Upon the completion of such mediation proceeding, if no agreement has been reached, either Acquirer or Parent may bring an arbitration in accordance with the terms of Section 9.9 to resolve the matter.  The Final Award of the arbitrator as to the validity and amount of any claim in a Claim Certificate shall be non-appealable, binding and conclusive upon the parties hereto, and the parties shall be entitled act in accordance with such decision.  The Escrow Agent shall disburse the Escrow Funds as directed by any applicable Final Award or order from a court or other tribunal of competent jurisdiction (such order or Final Award, a “Final Order”).

(d)          Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction.

8.7           Third-Party Claims.  In the event Acquirer becomes aware of a third-party claim which Acquirer in good faith believes may result in a claim for indemnification under this Article 8 by or on behalf of an Indemnified Person, Acquirer shall have the right to conduct the defense of and to settle or resolve any such claim (and the costs and expenses incurred by Acquirer in connection with such defense, settlement or resolution (including reasonable attorneys’ fees, other professionals’ and experts’ fees and court or arbitration costs) shall be included in the Indemnifiable Damages for which Acquirer may seek indemnification pursuant to a claim made hereunder).  Parent shall have the right to receive copies of all pleadings, notices and communications with respect to the third-party claim to the extent that receipt of such documents does not affect any privilege relating to any Indemnified Person and shall be entitled, at its expense, to participate in, but not to determine or conduct, any defense of the third-party claim or settlement negotiations with respect to the third-party claim.  However, except with the consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed and which shall be deemed to have been given unless Parent shall have objected within 15 days after a written request for such consent by Acquirer, no settlement or resolution by Acquirer of any claim that gives rise to a claim against the Escrow Fund by or on behalf of an Indemnified Person shall be determinative of the existence of or amount of Indemnifiable Damages relating to such matter.  In the event that Parent has consented to any such settlement or resolution, Parent shall not have any power or authority to object under Section 8.5 or any other provision of this Article 8 to the amount of any claim by or on behalf of any Indemnified Person against the Escrow Fund or otherwise for indemnity with respect to such settlement or resolution.

9.1           Survival of Representations and Warranties and Covenants.  If the Purchase is consummated, the representations and warranties of Parent contained in this Agreement, the Disclosure Letter (including any exhibit or schedule to the Disclosure Letter), and the other certificates contemplated hereby shall survive the Closing and remain in full force and effect, regardless of any investigation or disclosure made by or on behalf of any of the parties to this Agreement, until 11:59 p.m. California time on the Escrow Release Date, or in the case of the Fundamental Representations, until the expiration of the applicable statute of limitations with respect to such Fundamental Representations; provided, that no right to indemnification pursuant to Article 8 in respect of any claim for Indemnifiable Damages that is set forth in a Claim Certificate delivered to Parent prior to the applicable expiration date of such representation or warranty shall be affected by the expiration of such representation or warranty; provided, further, that such expiration shall not affect the rights of any Indemnified Person under Article 8 or otherwise to seek recovery of Indemnifiable Damages arising out of fraud by a Group Company.  The representations and warranties of Acquirer contained in this Agreement and the other agreements, certificates and documents contemplated hereby shall expire and be of no further force or effect at 11:59 p.m. California time on the Escrow Release Date.  All covenants of the parties that by their terms contemplate performance after the Closing Date shall survive the Closing for the period contemplated by their terms or, if no such period is specified, until 11:59 p.m. California time on the Escrow Release Date.  All other covenants of the parties shall expire at the Closing.

9.2           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial overnight delivery service, or sent via facsimile (with written confirmation of receipt and a copy delivered the next Business Day personally or by commercial overnight delivery service) to the parties hereto at the following address (or at such other address for a party as shall be specified by like notice):

9.3           Interpretation.  When a reference is made in this Agreement to Articles, Sections or Exhibits, such reference shall be to an Article or Section of, or an Exhibit to this Agreement unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.”  Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms “hereof,” “herein,” “hereunder” and derivative or similar words refer to this entire Agreement and (d) the phrase “made available to” and phrases of similar import means, with respect to any information, document or other material of Acquirer or the Company, that such information, document or material was made available for review by the Company or Acquirer, respectively, and its Representatives in the virtual data room established by Acquirer or the Company, respectively, in connection with this Agreement at least 48 hours prior to the execution of this Agreement or actually delivered (whether by physical or electronic delivery) to the Company or Acquirer, respectively, or its Representatives at least 48 hours prior to the execution of this Agreement.  The symbol “$” refers to United States Dollars.  The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends and such phrase shall not mean simply “if.”  References to a Person are also to its permitted successors and assigns.  All references to “days” shall be to calendar days unless otherwise indicated as a “Business Day.”  Unless indicated otherwise, all mathematical calculations contemplated by this Agreement shall be rounded to the tenth decimal place, except in respect of payments, which shall be rounded to the nearest whole United States cent.

9.4           Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto; it being understood that all parties hereto need not sign the same counterpart.

9.5           Entire Agreement; Nonassignability; Parties in Interest.  This Agreement and the other Transaction Documents (a) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof, except for the Confidentiality Agreement, which shall continue in full force and effect, and shall survive any termination of this Agreement, in accordance with its terms, (b) are not intended to confer, and shall not be construed as conferring, upon any Person other than the parties hereto any rights or remedies hereunder (except that Article 8 is intended to benefit Indemnified Persons) and (c) shall not be assigned by operation of law or otherwise except as otherwise specifically provided herein.  This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by a written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought.  No delay in exercising any right under this Agreement shall constitute a waiver of such right, and no waiver of any breach or default shall be deemed to be a waiver of any other breach or default of the same or any other provision in this Agreement.

9.6           Assignment.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void.  Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.  Any assignment in violation of this Section 9.6 will be void.

9.7           Severability.  In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall be interpreted so as reasonably necessary to effect the intent of the parties hereto.  The parties hereto shall use all reasonable efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

9.8           Remedies Cumulative.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy shall not preclude the exercise of any other remedy and nothing in this Agreement shall be deemed a waiver by any party of any right to specific performance or injunctive relief.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity, and the parties hereby waive the requirement of any posting of a bond in connection with the remedies described herein.

9.9           Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.  Subject to Section 8.6(c) regarding mediation, the parties agree that any dispute with respect to any matter covered under this Agreement will be submitted to mandatory, final and binding arbitration before J.A.M.S./ENDISPUTE or its successor (“J.A.M.S.”), governed by the United States Arbitration Act, 9 U.S.C., Section 1 et seq. and that any such arbitration will be conducted in Santa Clara County, California.  Either Acquirer or Parent may commence the arbitration process called for by this Agreement by filing a written demand for arbitration with J.A.M.S. and giving a copy of such demand to each of the other parties to this Agreement.  The arbitration will be conducted in accordance with the provisions of J.A.M.S.'s Streamlined Arbitration Rules and Procedures in effect at the time of filing of the demand for arbitration, subject to the provisions of this Section 9.9.  The arbitration of any such dispute shall be conducted by a single arbitrator mutually agreed on by Acquirer and Parent and selected from J.A.M.S.’s panel of neutrals.   The parties will cooperate with J.A.M.S. and with each other in promptly selecting the arbitrator from J.A.M.S.'s panel of neutrals, and in scheduling the arbitration proceedings in order to fulfill the provisions, purposes and intent of this Agreement.  The parties covenant that they will participate in the arbitration in good faith, and that the parties to the arbitration will bear the expense of deposits and advances required by the arbitrator in equal proportions.  The provisions of this Section 9.9 may be enforced by any court of competent jurisdiction, and the party seeking enforcement will be entitled to an award of all costs, fees and expenses, including attorneys' fees, to be paid by the party against whom enforcement is ordered.  Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction.  If for any reason J.A.M.S. or its successor no longer is in business, then the arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association.  Upon the conclusion of any arbitration proceedings hereunder, the arbitrator will render findings of fact and conclusions of law and a final written arbitration award setting forth the basis and reasons for any decision reached (the “Final Award”) and will promptly deliver such documents to the Escrow Agent, Parent and Acquirer, together with a copy of the Final Award signed by the arbitrator.

9.10        WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEROF.

9.11        Rules of Construction.  The parties hereto have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, hereby waive, with respect to this Agreement, each Schedule and each Exhibit attached hereto, the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.