ASSET PURCHASE AGREEMENT

Exhibit 10.45

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into to be effective as of October 1, 2004, by and among Viablelinks, Inc., an Oregon corporation (the “Company” or “Seller”), and En Pointe Technologies Sales, Inc., a Delaware corporation (the “Purchaser”).

RECITALS

WHEREAS, the Company is in the business of selling personal computer products to corporate end users (the “Business”); and

WHEREAS, due to various, primarily financial, circumstances the Company has recently sought to sell various of its assets, and has entertained various prior offers for same or portions of same, and has determined that Purchaser has made a fair offer for certain assets of the Company, which offer is the best of the offers Company has previously received; and

WHEREAS, Seller therefore desires to sell to the Purchaser, and the Purchaser desires to purchase from Seller, substantially all of the Intangible Assets, as set forth in Article I, 1.1, of the Company and certain Tangible Assets all as forth on Schedule 1.1 (h), attached hereto, of Seller but excluding any and all liabilities of Seller, except as otherwise expressly set forth in Section 1.4 hereof.

NOW, THEREFORE, for and in consideration of the premises and mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties, and intending to be legally bound, the parties agree as follows:

AGREEMENT

ARTICLE I
PURCHASE AND SALE OF ASSETS AND PURCHASE PRICE

1.1 Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, on the Closing Date (as defined in Section 2.1 below), Seller shall sell, convey, transfer, assign and deliver to Purchaser, and Purchaser agrees to purchase, accept and assume, all of Seller’s right, title and interest in and to, substantially all of the intangible assets owned by Seller and used or useful in the operation of the Business (except for the Excluded Liabilities (as defined in Section 1.5 below)) and certain Tangible Assets of Seller set forth on Schedule 1.1 (h) , attached hereto, free and clear of

some Liens (as defined in Section 3.10(d) below, but subject to the Liens scheduled in Attachment 1.1, subject to Sections 2.3(a)(x) and 2.3(a)(xi) below), including, without limitation, the following and, in any case, excluding the Excluded Assets (as defined in Section 1.6 below) (collectively, the “Purchased Assets”):

(a) All customer lists and other customer information (including, without limitation, addresses, telephone numbers, web site addresses, contact person, etc.), all purchase agreements, all service and customer contracts and all rights associated therewith;

(b) All vendor lists and other vendor information (including, without limitation, addresses, telephone numbers, web site addresses, contact person, etc.), all supply agreements, all vendor contracts, all warranty and service contracts and documentation, rights and authorizations and all rights associated therewith;

(c) All copyrights, patents, trademarks, trade names, service names, service marks, trade secrets, know-how, processes, methods and procedures used in or otherwise associated with the Business and all rights and good will associated therewith, including without limitation (i) all telephone numbers (including without limitation all 1-800, 1-866, 1-877 and 1-888 numbers); and (ii) the Intellectual Property set forth on Schedule 3.12 attached hereto and all other patentable material, patent applications and issued patents, copyrightable material, copyright applications and issued copyright registrations, and all electronic and magnetic media and other documents with respect thereto, whether finished or work-in-process, and all documentation with respect thereto, and all other intellectual property materials related to the Business; and all other intellectual property rights associated with the Business (collectively, the “Company IP”);but not the content of Company’s web site pages, sub-pages and IP addresses;

(d) To the extent assignable and subject to applicable regulatory approvals, each of the Company’s valid authorizations, permits and licenses necessary to operate the Business;

(e) If requested by Purchaser, copies of all of the Company’s books, records and financial records (whether in hard copy or computer format) relating to the Business and the Purchased Assets purchased hereunder; and

(f) Any and all other intangible assets of whatever type or description, including those intangible assets that are (i) reflected in the balance sheet contained in the July 31, 2004 , financial statements described in Section 3.7 below, or (ii) used or useful in the operation of the Business, except to the extent such assets have been disposed of in the ordinary course of business since the date of such balance sheet or include any Excluded Liabilities;

(g) All insurance policies, insurance proceeds, except the possible insurance proceeds from the theft of computer hardware, and bank accounts of the Company as of the Closing Date and all accounts receivable of the Company that were invoiced prior to the Closing Date or which relate to orders in process prior to the Closing Date, including, but

not limited to marketing funds, rebates, agent fees, “big deal” fees, “select” fees, and the like.; and

(h) The Tangible Assets listed on Schedule 1.1(h) attached hereto, but excluding the items specified therein.

1.2 Purchase Price and Use; . (a) The aggregate initial purchase price to be paid for the Purchased Assets (the _Purchase Price_) to the Company shall be equal to the sum of: (x) $447,592 for intangible assets; and (y) $57,416 for the tangible fixed assets and (z) $87,997 for the cash balances and (zz) $451,226 for the Accounts Receivable described on Schedule 1.1(g); attached hereto, to be paid as follows: (I) the sum of $1,044,231 (h) attached hereto shall be paid in cash by bank cashiers check or certified check or by wire transfer to the Company at the Closing (as defined in Section 2.1 below); provided, however, that Seller is required to immediately use such portion of the cash component of the Purchase Price received at Closing as is necessary to purchase in full all indebtedness owed to (i) Xxxxxx Bank; and (ii) that portion of the indebtedness to Xxxxxx Micro with regard to the Xxxxxx Trade Account, but not the Xxxxxx Select account, (iii) those items listed on Schedule 1.2(iii) (all of which items may, at Purchaser’s option, be paid directly by Purchaser out of the cash component of the Purchase Price to be paid to Seller at Closing, as contemplated pursuant to Section 2.3(vii) below, with the remainder, if any, paid to Seller). The items listed on Schedule 1.2(iii) may be paid by Purchaser to Purchaser’s attorney’s trust account for disbursement in accord with said schedule. Company shall also deliver to Purchaser lien releases or other documentation acceptable to Purchaser to cause the release by each of such unsecured or other secured creditors of all claims, obligations, liens, encumbrances and security interests of each of such unsecured or secured creditors against any of the Purchased Assets or any other liability, subject to the exceptions described above.

1.3 Assumed Contracts. Purchaser shall assume on the Closing Date, in respect of liabilities of the Company, only (i) the performance of the obligations of the Company under those contracts, documents and agreements identified on Schedule 1.3 attached hereto (the “Assumed Contracts”) (subject to obtaining the prior written consent to such assumption by the third parties to such contracts and agreements, if required), except to the extent any such obligations are in default that has occurred as of or is continuing on the Closing Date, and (ii) the performance obligations of the Company with respect to deferred revenue balances which represent retainers paid by customers on current service revenue engagements (but only those with respect to Purchased Assets) identified on Schedule 1.3 attached hereto.

1.4 Excluded Liabilities. Except as specifically set forth in Section 1.4, Seller retains, and Purchaser shall not assume, any Liabilities (as defined in Section 3.8 below) directly or indirectly arising out of or related to the Business or the Purchased Assets (the “Excluded Liabilities”), including, but not limited to, (i) the items listed on Schedule 1.4

attached hereto, (ii) any Liabilities that are not disclosed to Purchaser on the schedules hereto, and (iii) any failure by the Company to collect any and all sales, use and other similar taxes incurred as a result of the Company’s operation of the Business or ownership of the Purchased Assets prior to the Closing Date and/or pay such sales, use and other similar taxes to the appropriate tax depositories or collecting authorities when due, or withhold or collect from each payment to each of the Company’s employees prior to the Closing Date the amount of all taxes required to be withheld or collected therefrom and/or pay such taxes to the appropriate tax depositories or collecting authorities when due.

1.5 Allocation; Cooperation with Respect to Tax and Legal Impact. The allocation of the Purchase Price shall be as follows: (1) intangible assets $447,591 and (2) other Tangible Assets $596,640 as set forth on Schedule 1.1 (g) ; .for a total of $1,044,231 The allocation of the Purchase Price shall comply with the requirements of Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”). Purchaser and the Company each agrees to file IRS Form 8594, and all federal, state, local and foreign tax returns and filings, in accordance with the allocation set forth on Schedule 1.1(h). Without in any way limiting the foregoing and subject to the requirements of applicable law, Purchaser and the Company agree to otherwise cooperate in good faith to mitigate income tax consequences and negative legal consequences to the parties arising from the consummation of this transaction, provided that there is no impact to the Purchase Price or adverse impact on any of the parties.

1.6 Consulting Agreement with Xxxxx Xxxx. Purchaser requests Xxxxx Xxxx to provide consulting services to Purchaser for a period of a month from the Closing Date. Purchaser will pay Xxxx $15,333 for said month. He is to be paid an additional $15,333 at the end of the month but only if he performs his duties in a reasonably acceptable manner and only if he remains available for the entire month. . Additionally, Xxxxx Xxxx agrees not to compete with Purchaser for a period of twenty-six months of the Closing Date, within 50 miles of any former customer of Company or of any customer of Purchaser, and agrees to execute the form attached hereto as Exhibit 1.6 and agrees to pay to Purchaser any amounts received by him under this paragraph 1.6 in the event any provision of said non-compete agreement is found to be invalid or unenforceable. Xxxx also agrees not to voluntarily cooperate with any party asserting any claim or allegation, including, but not limited to, any allegation of insolvency, against Company or its agents, employees, consultants and attorneys and against Purchaser or its agents, employees, consultants and attorneys.

1.7 Non-Competition of Xxxxxx Xxxx. In consideration of the release of Xxxxxx Xxxx from certain guarantee obligations, Xx. Xxxx agrees not to compete with Purchaser for a period of two years of the Closing Date within 50 miles of any former customer of Company or any customer of Purchaser, and agrees to execute the form attached hereto as Exhibit 1.7 and agrees to pay to Purchaser the value of the release of guarantee obligations in the event any provision of said non-compete agreement is found to be invalid or unenforceable. Xx. Xxxx also agrees not to voluntarily cooperate with any

party asserting any claim or allegation, including, but not limited to, any allegation of insolvency, against Company or its agents, employees, consultants and attorneys and against Purchaser or its agents, employees, consultants and attorneys.

ARTICLE II
CLOSING

2.1 Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement will be held on or prior to October 1, 2004 (the “Closing Date”) at 10:00 a.m. via electronic closing in Los Angeles, California, or at such other time, date or location as the parties hereto may mutually agree upon.

2.2 Purchaser Deliveries. At the Closing, the Purchaser shall deliver to the Company:

(i) cash, or by cashier’s or certified check or by wire transfer to an account which the Company has identified in writing to the Purchaser prior to the Closing Date or to the accounts authorized in 1.2 above, an amount equal to $1,044,231;

(ii) evidence that the persons set forth on Schedule 2.2(v) attached hereto have accepted employment with Purchaser;

(iii) a copy of the resolutions adopted by the Board of Directors of Purchaser (or its parent company, En Pointe Technologies, Inc.) approving, authorizing and directing the execution of this Agreement and the consummation of the transactions contemplated thereby, each certified by the Chief Financial Officer of Purchaser (who is also the Chief Financial Officer of En Pointe Technologies, Inc.) as being in full force and effect on and as of the Closing Date; and

2.3 Seller Deliveries and Actions.

(a) At the Closing, the Seller shall deliver to the Purchaser:

(i) physical possession of all of the Purchased Assets, at such place and in such manner as the Purchaser and the Company shall agree, except for any laptop or desktop personal computers and related peripheral equipment that are in the personal possession of employees of Seller that will be hired by Purchaser;

(ii) a Non-Competition and Non-Solicitation Agreement from the Company and its Shareholders/owners and Xxxxx Xxxx ,duly executed by the Company and its shareholders/owners, and Xxxxx Xxxx in the form attached hereto as Exhibit 2.3(a)ii;

(iii) the Xxxx of Sale, attached as Exhibit C hereto, duly executed by Seller;

(iv) copies of all of the Company’s books, records and financial records (whether in hard copy or computer format) relating to the Business and the Purchased Assets purchased hereunder;

(v) any and all consents, approvals, notices, filings, terminations or recordation of third parties required with respect to the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby or by any of the agreements, documents or instruments referred to herein.;

(vi) all Company IP, including all relevant documentation with respect thereto and all other documents, electronic and magnetic media and other materials with respect thereto, whether finished or work-in-process;

(vii) evidence satisfactory to Purchaser that the liens, encumbrances and security interests of each of (i) Xxxxxx Bank; (ii) Xxxxxx Micro, and (iii) any other secured creditors with respect to any of the Purchased Assets evidenced by UCC Financing Statements filed in any and all jurisdictions, together with any security agreements and other documents and instruments related thereto, and all indebtedness, obligations and liabilities of any kind or nature whatsoever associated with such liens, encumbrances and security interests and such security agreements and other documents and instruments related thereto are fully and forever either assigned to Purchaser or released and terminated (which evidence at Closing shall include, at a minimum, irrevocable letters of direction entered into by Seller with such lien holders delivered to Purchaser in which wire transfer information and pay-off amounts for such lien holders and confirmation of assignment or release of liens upon receipt of pay-off amount by such lien holders is indicated in order to permit Purchaser to pay directly to such lien holders a portion of the cash component of the Purchase Price at Closing, except to the extent that any of such lien holders has already delivered proper documentation evidencing a full release of its liens, encumbrances and security interests at or prior to the Closing Date), except that the security interest of Xxxxxx Micro in the “Select” receivables will not be released at closing;

(viii) evidence satisfactory to Purchaser that the persons set forth on Schedule 2.2(v) attached hereto have been properly terminated by Seller and delivery of letters (in form and substance mutually agreed upon by Purchaser) ) from each of the each of the persons listed on said Schedule 2.2(v) indicating that he or she is aware of this acquisition transaction and intends to become employed by the Purchaser upon consummation of the Closing and which letters includes those sales and service personnel of Seller who are collectively responsible for at least ninety percent (90%) (by revenue) of the existing customers of the Company based on sales of the Company for the twelve (12) months ended July 31, 2004, The letters must also include a statement that all sums owed to the persons by the Company have been paid in full.

(ix) evidence satisfactory to Purchaser that any and all remaining payments with respect to any and all lease agreements, understandings or commitments pertaining to any of the Purchased Assets (including without limitation those listed on Schedule 3.11 hereto) have been made by Seller and that the purchase price therefore has been paid in full by Seller (other than with respect to any real property lease).

(x) a copy of the Articles of Incorporation, as amended, and Bylaws of the Company, as amended, and the resolutions adopted by the Board of Directors of the Company approving, authorizing and directing the execution of this Agreement and the consummation of the transactions contemplated thereby, each certified by the Secretary of the Company as being in full force and effect on and as of the Closing Date;

(xi) evidence satisfactory to Purchaser that all of the shareholders of the Company have approved the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby;

(xii) a certificate of each of the Secretaries of States of Oregon, Idaho, and Washington to the effect that the Company is a validly existing corporation in good standing and duly qualified to do business under the laws of the States of Oregon, Idaho, and Washington;

(xiii) a copy of the duly executed Mutual Release Agreement between Viablelinks, Inc. and 3 MD Technologies, Inc.

(xiv) a copy of the duly executed Release Agreement between Viablelinks, Inc., En Pointe Technologies, Inc and En Pointe Technologies Sales, Inc.,

(b) Simultaneously with such deliveries, the Company shall take such other steps and actions as may be necessary to put the Purchaser in actual possession and operating control of the Purchased Assets the Company IP and the Business, as may be reasonably requested by Purchaser.

2.4 Further Assurances. From time to time after the Closing, and without further consideration, the Company shall execute and deliver such other instruments of conveyance, assignment, transfer and delivery, and take such other actions as the Purchaser may reasonably request in order more effectively to transfer to the Purchaser, and to place the Purchaser in possession or control of, the Purchased Assets, including without limitation the Company IP, intended to be transferred hereunder, to reasonably assist in the collection of any and all such Purchased Assets and all rights associated therewith, and to enable the Purchaser to exercise and enjoy all of the rights and benefits with respect thereto.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company and each of Xxxxx Xxxx, Xxxxxx Xxxx and Xxx Xxxxxxx hereby represents and warrants to the Purchaser that the following representations and warranties are true and correct on and as of the date hereof:

3.1 Corporate Existence. The Company is a corporation duly organized, validly existing and in good standing under the laws of the States of Oregon, Idaho, and Washington and has full corporate power and authority to conduct its business as it is now being conducted and to own or lease all of its properties and assets. The Company acknowledges that it is not qualified to do business in the State of Texas. The Company is not required to be qualified or licensed to do business as a foreign corporation in any other jurisdiction where the ownership of its property or assets or the conduct or nature of the Business would require such qualification or license, except where the failure to so qualify will not result in a material adverse effect on the Business or the Company’s financial condition. The Company has previously delivered to Purchaser true and complete copies of its Articles of Incorporation, as amended, and Bylaws, as amended, as in effect on the date hereof.

3.2 Capitalization; Share Ownership. The authorized capital stock of the Company consists solely of 1,000,000 shares of Common Stock, with par value of zero, of which 600,000 shares are currently issued and outstanding, all of which shares are owned of record and beneficially by Xxxxxx Xxxx (200,000 shares), Xxxxx Xxxx (200,000 shares) and Xxxxxx Xxxxxxx (200,000 shares), which shares constitute all of the issued and outstanding capital stock of the Company. All of such shares are validly issued, fully paid and nonassessable, and such shares have been so issued in material compliance with all federal and applicable state securities laws. Except as set forth on Schedule 3.2, there are no outstanding subscriptions, options, rights, warrants, convertible securities or other agreements or commitments obligating the Company to issue or to transfer from treasury any additional shares of its capital stock of any class. Except as set forth on Schedule 3.2, there are no outstanding stock appreciation rights or any similar rights entitling any person to any payment based on the value of the Company or its capital stock. Except as set forth on Schedule 3.2, no other entity or person has any right, title or interest, beneficially or of record, in or to any securities of the Company.

3.3 Authority. The Company has full power and authority to enter into this Agreement and the other agreements referred to herein to which it is a party (collectively, the “Related Agreements”), to perform its obligations hereunder and thereunder and to carry out the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Related Agreements, the performance by the Company of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all corporate, shareholder and other actions on the part of the Company required by applicable law, the Company’s Articles of Incorporation, as amended, or Bylaws, as amended, or otherwise. This

Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, except (i) as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

3.4 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Company of its obligations hereunder or under any of the Related Agreements nor the consummation of the transactions contemplated hereby will (a) contravene any provision of the Articles of Incorporation or Bylaws of the Company; (b) violate, be in conflict with, constitute a default under, permit the termination of, cause the acceleration of the maturity of any debt or obligation of the Company under, require (except as disclosed on Schedule 3.5 hereto) the consent of any other party to, constitute a breach of, create a loss of a material benefit under, or result in the creation or imposition of any Lien, upon any property or assets of the Company under, any mortgage, indenture, lease, contract, agreement, instrument or commitment to which the Company is a party or by which it or any of its assets or properties may be bound; (c) to the knowledge of the Company, after due inquiry and reasonable investigation, violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority to which the Company or the Business is subject or by which the Company or any of its assets or properties are bound; or (d) create a claim of diversion of corporate opportunity against any director of the Company that could reasonably be expected to have a material adverse effect on the Company or the Business.

3.5 Consents and Approvals. Except as set forth on Schedule 3.5 hereto, no consent, approval or authorization of, or declaration, filing or registration with, any governmental or regulatory authority or any other third party is required to be made or obtained by the Company in connection with the execution, delivery or performance of this Agreement or any of the Related Agreements by the Company.

3.6 Subsidiaries. Except as set forth on Schedule 3.6 hereto, the Company does not own, either directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, business, trust, or other entity.

3.7 Financial Statements. The Company has delivered to the Purchaser the unaudited balance sheet of the Company as of July 31, 2004 and the related statements of revenues, profit and loss and Gross Profit Dollars for the month and seven (7) months then ended, and the unaudited balance sheets of the Company as of December 31, 2003 and 2002 and the related statements of revenues, profit and loss and Gross Profit Dollars for the fiscal years of Seller then ended, and the preliminary unaudited balance sheet of the Company as of August 31, 2004 and the related statements of revenues, profit and loss and Gross Profit Dollars, all of which have been internally prepared or compiled by an outside accounting firm reasonably acceptable to Purchaser (all such financial statements are hereinafter collectively referred to as the “Financial Statements”). The Financial

Statements (i) were prepared or compiled from the books and records of the Company regularly maintained by management and used to prepare the financial statements of the Company.

3.8 No Undisclosed Liabilities. To Seller’s knowledge, the Company has, and on the Closing Date will have, no debts, liabilities, commitments or obligations of any nature, absolute, accrued, contingent or otherwise (individually, a “Liability” and, collectively, the “Liabilities”), other than those which (a) are fully reflected and reserved against in the Financial Statements, (b) have been incurred since July 31, 2004 in the ordinary course of business in amounts and for terms consistent, individually and in the aggregate, with the past practice of the Company or (c) have been specifically disclosed in the schedules hereto by reference to the specific section of this Agreement to which such disclosure relates.

3.9 Absence of Certain Changes. Except as set forth on Schedule 3.9, since July 31, 2004, the Company has conducted the Business only in the ordinary course and consistent with prior practice in all material respects and the Company has not:

(a) suffered any material adverse change in its condition (financial or otherwise), results of operations, assets, liabilities, reserves, the Business, operations or prospects;

(b) suffered any material damage, destruction or loss, whether covered by insurance or not, materially adversely affecting its Business, operations, assets, prospects or condition (financial or otherwise);

(c) paid, discharged or satisfied any material Liability or other expenses, other than the payment, discharge or satisfaction of the Liabilities described in Section 3.8 in the ordinary course of business;

(d) paid or otherwise made any contribution to any profit-sharing or pension plan or other Employee Benefit Plan (as defined in Section 3.17 below), except as may be required by the Company’s 401(k) pension and profit sharing plan consistent with past practices and procedures;

(e) mortgaged or pledged, or permitted the imposition of any Lien upon, any of its properties or assets (real, personal or mixed, tangible or intangible), other than those incurred in the ordinary course of business or otherwise listed on Schedule 3.10 hereto;

(f) other than in the ordinary course of business, cancelled or compromised any debts, or waived or permitted to lapse any material claims or rights, or sold, assigned, transferred or otherwise disposed of, any material properties or assets (real, personal or mixed, tangible or intangible);

(g) disposed of or permitted to lapse any rights to the use of any patent, registered trademark, service xxxx, trade name or copyright, or disposed of or disclosed to any

person any trade secret, formula, process or know-how material to the Business not theretofore a matter of public knowledge;

(h) except as disclosed on Schedule 3.9 or in the ordinary course of business, granted any increase in the compensation of any officer, employee or consultant of the Company (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or any increase in the compensation payable or to become payable to any officer, employee or consultant;

(i) entered into any commitment or transaction not in the ordinary course of business or made any capital expenditure or commitment for any additions to property, plant or equipment, except commitments, transactions or capital expenditures which do not in any single case exceed $25,000;

(j) made any meaningful change in any method of accounting or accounting practice (including, without limitation, any change in depreciation or amortization policies or rates);

(k) paid, loaned or advanced any amount to, or sold, transferred or leased any properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, any of its officers, directors, employees, shareholders, or any family member or Affiliate (as defined in Section 3.24 below) of any of its officers, directors, employees or shareholders, or any officer, director, employee or shareholder of any such Affiliate;

(l) incurred any material property losses or waived any material rights of value;

(m) declared, set aside, paid or made any dividend or other distribution or payment in respect of the capital stock of the Company, or any direct or indirect redemption, purchase or other acquisition of any of its shares of capital stock;

(n) suffered the loss of, or been threatened with the loss of, any material supplier or material customer or group of related suppliers or customers referred to in Section 3.16;

(o) knowingly waived or released any material right or claim of the Company;

(p) amended or terminated any contract, agreement or license to which the Company is a party, except in the ordinary course of business or except as otherwise expressly required or contemplated hereby;

(q) received a commencement notice or, to the knowledge of the Company, received any threat of commencement of any civil or criminal litigation, investigation or proceeding against the Company;

(r) to the knowledge of the Company, received any claim of wrongful discharge or workers compensation claim or any material claim under COBRA;

(s) issued or sold any shares of its capital stock or any class or any other securities of any kind, or granted any options, warrants or other rights to acquire any shares of its capital stock or any other securities of any kind (except as otherwise set forth on Schedule 3.2 hereto);

(t) except as set forth on Schedule 3.2 hereto, made any dividend or any distribution of any kind to any of the shareholders of the Company (including, without limitation, any distribution of cash, assets, property or shares of capital stock of the Company);

(u) agreed, whether in writing or otherwise, to take any action referred to in and prohibited by this Section 3.9; or

(v) to the knowledge of the Company, become aware of any other event or condition that has had a material adverse effect on the condition (financial or otherwise), results of operations, assets, liabilities, reserves, its Business, the Company IP or the operations or prospects of the Company.

3.10 Title to Properties; Encumbrances.

(a) The Company has good and marketable title to all of the Purchased Assets, free and clear of all Liens, except (i) Liens for taxes not yet due and payable, (ii) Liens for purchase money security interests, and (iii) the Liens set forth on Schedule 3.10 attached hereto, none of which (other than the Liens set forth on Schedule 3.10 attached hereto, which will be terminated at the Closing) adversely affects the Business or the continued operations of the Company.

(b) All material property (real, personal or mixed, tangible or intangible) used or required by the Company in the conduct of the Business (including, without limitation, the Company IP) are owned, leased or licensed by the Company.

(c) The Company does not own or hold, and is not obligated under or a party to, any option, right of first refusal or other contractual right to acquire any real property or interest therein.

(d) When used in this Agreement, “Lien” or “Liens” shall mean any mortgage, pledge, security interest, conditional sale or other title retention agreement, encumbrance, lien, easement, claim, right, covenant, restriction, right of way, warrant, option or charge of any kind.

3.11 Leases.

(a) Schedule 3.11 contains a true and complete list of all leases pursuant to which the Company leases or subleases any real property or any vehicles, equipment or personal property that constitutes a part of the Purchased Assets.

(b) Each such lease described on Schedule 3.11 is the legal, valid and binding obligation of the Company and, to the best knowledge of the Company, after due inquiry and reasonable investigation, the other parties thereto, enforceable in accordance with their respective terms, and is in full force and effect. The Company is not in default under any such lease, and the Company has not received any notice from any person or entity asserting that the Company is in default under any such lease, and no events or circumstances exist which, with notice or the passage of time or both, would constitute a default under any such lease.

(c) None of such leases described on Schedule 3.11 shall be transferred to the Purchaser. At or prior to the Closing, Seller shall make any and all remaining payments with respect to any and all such personal property leases as are transferred . No leases pursuant to which the Company leases or subleases any real property are being transferred).

3.12 Patents, Trademarks, Service Marks, Trade Names. The Company owns, or is licensed or otherwise has the full right to use, all intellectual property rights, both registered and at common law, relating to the Business (including, without limitation, with respect to the Company IP), irrespective of where any of the same were issued, whether pending or existing (collectively, the “Intellectual Property”), and set forth on Schedule 3.12, including, without limitation, all: United States and foreign patents or any description and applications therefore; registrations of trademarks, service marks and of other marks, registrations of trade names, labels, logos, trading styles or other trade rights, registered user entries, and applications for any such registrations or entries; United States and foreign copyrights, copyright registrations and applications therefore; United States and foreign trademarks and other marks, trade names, labels and other trade rights, whether or not registered, and applications therefore; trade secrets, know-how, inventions, discoveries, improvements, engineering or other drawings, designs, processes and formulae, whether patented or patentable or not; customer lists, technical data, marketing information and plans, software and software documentation source codes; URL addresses and all other Internet and World Wide Web addresses and designations issued or granted to the Company by Network Solutions, Inc. and any other appropriate foreign, federal, state or local entity, authority or agency; any other proprietary information or intangible rights related in any way to the Business (including, without limitation, with respect to the Company IP); shop rights, license agreements and other agreements relating in whole or in part to any of the foregoing; and all claims and causes of action on behalf of the Company or against third parties relating to any of the foregoing, including claims and causes of action for past infringement of the Intellectual Property. Schedule 3.12 contains a true and complete list of (a) the material Intellectual Property used by the Company in connection with the conduct of the Business, all

applications therefore and all licenses and other agreements relating thereto and (b) all agreements relating to technology, know-how or processes which the Company is licensed or authorized to use by others or which the Company licenses or authorizes others to use in connection with the conduct of the Business. The Company has the sole and exclusive right to use the patents, trademarks, service marks, trade names, copyrights, technology, know-how and processes described on Schedule 3.12, and except as disclosed on Schedule 3.12 or Schedule 3.5, no consent of any third party is required for the use of the Intellectual Property by the Purchaser upon the consummation of the transactions contemplated hereby or, if any such consent shall be necessary, such consent shall have been obtained prior to the Closing Date.

Except as set forth on Schedule 3.12, no claims have been asserted by any person to the use any of the items of Intellectual Property or challenging or questioning the validity or effectiveness of any such license or agreement, and the Company knows of no valid basis for any such claims. Except as set forth on Schedule 3.12, the Company has no notice that the use of the Intellectual Property by the Company infringes on the rights of any other person or entity. Each item of Intellectual Property owned by the Company is, if registered, filed or issued, then duly and properly registered, filed or issued in the appropriate office and jurisdiction for such registration, filings or issuance. Each license, contract or other agreement to which the Company is a party pertaining to any item of Intellectual Property owned, used or available for use by the Company in the conduct of the Business is in full force and effect. With respect to each such license, contract or other agreement to which the Company is a party, there is no payment past due and not paid and no default (or event which, with or without notice, lapse of time or both, would constitute a default) by any party thereto.

All of the Intellectual Property developed or solely and exclusively owned by the Company was developed solely and exclusively by employees of the Company and under the direction and supervision of Company personnel, provided, that if any of such Intellectual Property was developed by any person other than an employee of the Company, such person has executed and delivered to the Company an agreement in writing pursuant to which such person has transferred to the Company all of the rights, title and interest such person has or may have in such Intellectual Property and a copy of such written agreement will be made available to Purchaser upon request.

3.13 Litigation. Except as disclosed on Schedule 3.13 there are no actions, claims or proceedings to which the Company is a party (individually, an “Action” and, collectively, “Actions”), including, without limitation, Actions for personal injury, products liability, wrongful death or other tortious conduct, or breach of warranty arising from or relating to materials, commodities, products or goods used, transferred, processed, manufactured, sold, distributed or shipped by the Company (a) involving or relating to the Company, or any its assets, properties or rights, or (b) pending, or, to the Company’s knowledge, threatened, against the Company, or any of its assets, properties or rights, before any court, arbitrator or administrative or governmental body. There is no Action pending, or, to the Company’s knowledge, threatened, against the Company, or any of its assets,

properties or rights, before any court, arbitrator or administrative or governmental body, which questions or challenges the validity of this Agreement or any Action taken or proposed to be taken by the Company pursuant to this Agreement or in connection with the transactions contemplated hereby. To the Company’s knowledge, no state of facts exists or has existed which would reasonably be expected to constitute grounds for the institution of any Action against the Company or against any assets, properties or rights of the Company which would adversely affect the Business or the Company. The Company is not subject to any judgment, order or decree entered in any lawsuit or proceeding which has affected, or which can reasonably be expected to affect, the Company’s business practices or its ability to acquire any property or conduct the Business in any way.

3.14 Insurance. Schedule 3.14 sets forth a true and complete list and description of (a) all of the Company’s self-insurance practices and items covered by such self-insurance and (b) all policies of fire, liability, worker’s compensation and other forms of insurance owned or held by the Company. No installment premiums are due under the policies set forth on Schedule 3.14 or, if installment premiums shall be due and owing under such policies prior to the Closing Date, such premiums shall have been paid prior to the Closing Date. All such policies are in full force and effect, insure against risks and liabilities to the extent and in the manner deemed appropriate and sufficient by the Company in its reasonable business judgment, and will remain in full force and effect through the Closing Date, and the Company has not received any notice of cancellation with respect thereto. To the Company’s knowledge, the Company is not in default with respect to any provision contained in any such policy and has not failed to give any notice or present any claim under any such policy in due and timely fashion.

3.15 Contracts and Commitments.

(a) The Company has made available to Purchaser true and complete copies of all of the Assumed Contracts and shall deliver true and complete copies of all such other agreements, instruments and documents as the Purchaser may reasonably request relating to the operation, ownership or conduct of the Business.

(b) The Company is not a party to any written agreement that would restrict it from carrying on the Business anywhere in the world.

(d) Except as set forth on Schedule 3.15, the Company is not a party to any employment agreements, arrangements and commitments, including severance or termination arrangements and commitments (whether written or oral), between the Company and any employee of the Company.

(e) Each of the Assumed Contracts has been entered into in the ordinary course of business and is valid and binding, and none of such contracts contains terms or conditions which are materially adverse to the Company. The Company is not, and no other party

is, in default under or in breach or violation of, nor has the Company received notice of any asserted claim of default by the Company or by any other party under, or a breach or violation of, any of the Assumed Contracts.

(f) The Company acknowledges that it is in the final stages of fulfilling its obligations under service/product contracts with Regence and Standard, two of its major customers, and any disruption in the performance of these contract will cause severe damage to the relationship with this customer. These customers are significant to the Company and Purchaser has relied upon the Company ‘ s assurances that these contracts will be fulfilled and all costs associated with the contract will be paid in a timely manner.

3.16 Suppliers and Customers.

(a) Except as set forth in Schedule 3.16, the Company has no knowledge that any supplier or customer or group of related suppliers or customers of the Company has canceled or otherwise terminated or threatened to cancel or otherwise terminate, its relationship with the Company, which termination would have a material adverse effect on the Business or the Company, or has during the last twelve (12) months decreased materially, or threatened to decrease or limit materially, its services, supplies or materials to the Company or its usage or purchase of the services or products of the Company, as the case may be, or that any such supplier or customer or group of related suppliers or customers expects to reduce its business with the Company by reason of the transactions contemplated by this Agreement or for any other reason whatsoever.

(b) Except as set forth in Schedule 3.24, no officer, director or employee of the Company, nor any spouse or child or any of the foregoing persons, has any direct or indirect interest in any competitor, supplier or customer of the Company or in any person from whom or to whom the Company leases any real or personal property, or in any other person with whom the Company is doing business.

3.17 Employee Benefit Plans.

(a) Schedule 3.17 contains a true and complete list and description of, and the Company has made available to the Purchaser true and complete copies of, each pension, retirement, severance, welfare, profit-sharing, vacation, deferred compensation, bonus or other incentive plan, or other employee benefit program, arrangement, agreement or understanding, or medical, vision, dental or other health plan, or life insurance or disability plan, retiree medical or life insurance plan or any other employee benefit plans, including, without limitation, any “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), to which the Company contributes or is a party or by which it is bound or under which it may have liability and under which employees or former employees of the Company (or their beneficiaries) are eligible to participate or derive a benefit. Each employee benefit

plan which is a “group health plan” (as such term is defined in Section 5000(b)(i) of the Code) satisfies the applicable requirements of Section 4980B of the Code. Except as described on Schedule 3.17, the Company has no formal plan or commitment, whether legally binding or not, to create any additional plan, practice or agreement or modify or change any existing plan, practice or agreement that would affect any of its employees or terminated employees. Benefits under all employee benefit plans are as represented and have not been and will not be increased outside the ordinary course of business subsequent to the date copies of such plans have been provided.

(b) The Company does not contribute to or have any obligation to contribute to, has not at any time contributed to or had an obligation to contribute to, sponsor or maintain, and has not at any time sponsored or maintained, a “multi-employer plan” (within the meaning of Section 3(37) of ERISA) for the benefit of employees or former employees of the Company.

(c) The Company has, in all material respects, performed all obligations, whether arising by operation of law, contract, or past custom, required to be performed under or in connection with the employee benefit plans disclosed on Schedule 3.17 (individually, an “Employee Benefit Plan” and, collectively, the “Employees Benefit Plans”), and the Company has no knowledge of any default or violation by any other party with respect thereto.

(d) There are no Actions, suits or claims (other than routine claims for benefits) pending, or, to the best of the Company’s knowledge, after due inquiry and diligent investigation, threatened, against any Employee Benefit Plan or against the assets funding any Employee Benefit Plan.

(e) The Company neither maintains nor contributes to any “employee welfare benefit” (as such term is defined in Section 3(i) of ERISA) plan which provides any benefits to retirees or former employees of the Company.

(f) The Company has made available to the Purchaser and its counsel true and complete copies, if applicable, of (i) all documents governing the Employee Benefit Plans, including, without limitation, all amendments thereto which will become effective at a later date; (ii) all summary plan descriptions and each summary of material modifications relating to the Employee Benefit Plans; (iii) all employment manuals; and (iv) all insurance policies or contracts with respect to the Employee Benefit Plans.

3.18 Employment Law Matters.

(a) The Company (i) is in compliance in all material respects with all applicable laws respecting employment, employment practices, terms and conditions of employment and wages and hours; (ii) is in compliance in all material respects with all applicable laws and regulations relating to the employment of aliens or similar immigration matters; and (iii)

is not engaged in any unfair labor practice, including, but not limited to, discrimination or wrongful discharge.

(b) The Company has not at anytime during the last three (3) years had, nor to the Company’s knowledge, is there now threatened, a strike, picket, work stoppage, work slowdown or other labor trouble, against or directly affecting the Company that had or may have a material adverse effect on the Business or the Company.

(c) None of the employees of the Company is represented by a labor union, and no petition has been filed or proceedings instituted by any employee or group of employees with any labor relations board seeking recognition of a bargaining representative. The Company is not a party to any multi-employer collective bargaining agreement covering any of its employees.

(d) There are no controversies or disputes (including any union grievances or arbitration proceeding) pending, or, to the Company’s knowledge, threatened, between the Company and any employees of the Company (or any union or other representative of such employees). No unfair labor practice complaints have been filed and are pending against the Company with the National Labor Relations Board or any other governmental or administrative body, and the Company has not received any written notice or communication reflecting an intention or a threat to file any such complaint.

3.19 Environmental Matters. The Company is in compliance in all material respects with all federal, state and local environmental laws, rules, regulations, standards and requirements, including, without limitation, those respecting hazardous materials and substances (including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. sec. 9601, et. seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. sec. 6901. et. seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. sec. 1251, et. seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. sec. 9601, et. seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. sec. 11001, et. seq.; the Safe Drinking Water Act, 42 U.S.C. sec. 300f, et. seq.; the Solid Waste Disposal Act, as amended; and all comparable state and local laws; and any common law (including without limitation common law that may impose strict liability) that may impose liability or obligations for injuries or damages to, or threatened as a result of, the present of or exposure to any hazardous materials or substances) (collectively, “Environmental Laws”). There is no Action pending before any court, governmental agency or board or other forum or threatened by any person or entity (i) for noncompliance by the Company with any Environmental Law, or (ii) relating to the release into the environment by the Company of any pollutant, toxic or hazardous material or waste generated by the Company, whether or not occurring at or on a site owned, leased or operated by the Company. To the Company’s knowledge, there has been no spill, discharge, leak, emission, injection, disposal, escape, dumping or release of any kind on, beneath or above the facilities occupied or used by or leased to the Company (the “Property”) or into

the environment surrounding such Property of any hazardous materials or substances in violation of any Environmental Law or requiring any remedial action. The Company has all permits, registrations, approvals and licenses required by any governmental agency under any Environmental Law to be obtained by the Company in connection with the conduct of the Business of the Company as presently conducted.

3.20 Compliance with Laws. The Company has not been charged with, and, to the Company’s knowledge, after due inquiry and reasonable investigation, the Company is not threatened with or under any investigation with respect to, any charge concerning any violation of any provision of any federal, state, local or foreign law, regulation, ordinance, order or administrative ruling affecting the Business or the Company, and the Company is not in default with respect to any order, writ, injunction or decree of any court, agency or instrumentality affecting the Business or the Company. The Company (a) is not in violation in any material respect of any federal, state, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator applicable to the Business or the Company, or (b) would not, to the Company ‘s knowledge, after due inquiry and reasonable investigation, be in violation in any material respect of any such law, ordinance, regulation or other requirement that has been enacted or adopted but is not yet effective if it were effective at the date hereof. The Company has not made any illegal payment to officers or employees of any governmental or regulatory body or made any payment to customers of the Company for the sharing of fees or to customers or suppliers of the Company for the rebating of charges, or engaged in any other similar reciprocal practices, or made any illegal payment or given any other illegal consideration to purchasing agents or other representatives of customers of the Company in respect of sales made or to be made by the Company. Without limiting the generality of the foregoing, the Company is in compliance in all material respects with the Export Administration Act (50 U.S.C. sections 2401-2420 (1979)) and the Foreign Corrupt Practices Act of 1977, and all respective rules and regulations promulgated thereunder. Without limiting the generality of the foregoing, the Company is in compliance in all material respects with all rules and regulations promulgated by the Occupational Safety and Health Administration (“OSHA”). The Company has previously made available to the Purchaser a true and complete copy of the Company’s most recent inspection report or reports, if any, relating to compliance with OSHA rules and regulations.

3.21 Licenses, Permits and Authorizations. The Company has all material licenses, permits, authorizations, approvals, consents, franchises and orders required for the conduct and operation of its business as presently conducted (individually, a “Permit” and, collectively, the “Permits”) and the use and ownership or leasing of its properties and assets as currently operated, used, owned or leased. All of the Permits are valid, in full force and effect and in good standing. No violations have been recorded in respect of any such Permit. Schedule 3.21 contains a true and complete list and description of all the Permits and the Company has previously made available to the Purchaser true and complete copies of all such Permits identified in Schedule 3.21 and in effect as of the date hereof. There is no claim or Action pending, or, to the best of the Company’s

knowledge, threatened, which disputes the validity of any such Permit or threatens to revoke, cancel, suspend or limit any such Permit.

3.22 Accounts Receivable. All accounts receivable of the Company shown on the July 31, 2004 Financial Statements and all accounts receivable created after July 31, 2004, up to the Closing Date of this Agreement, including those listed on Schedule 3.22 attached hereto, are subject to reserves created in the ordinary course of business on a basis consistent with the past practices and policies of the Company and otherwise in accordance with generally accepted accounting principles, (a) have been collected, or (b) are valid and arose from bona-fide sales to third parties in the ordinary course of business, and are current and, to the knowledge of the Company, substantially all of such accounts receivable are collectible within ninety (90) days after the Closing Date at the aggregate recorded amounts thereof on the books of the Company and are not subject to any counterclaims or setoffs and have not been encumbered or sold.

3.23 Property of Others. To the Company’s knowledge, no shortage exists in (a) any inventory of raw material, work-in-process or finished goods owned by customers or suppliers of the Company and stored upon the Company ‘s premises or otherwise, or (b) any other item of personal property owned by another for which the Company is accountable to another.

3.24 Transactions with Affiliates. Schedule 3.24 describes all agreements and understandings to which the Company is or has been subject which provide for or reflect the sale by the Company to, or the purchase by the Company from, any Affiliate (as defined below) of the Company of any goods, equipment or services. The termination of any such agreement or understanding would not have a material adverse effect on the Business, operations, prospects or condition (financial or otherwise) of the Company.

When used in this Agreement, “Affiliate” or “Affiliates” shall mean, with respect to any individual, partnership, corporation, limited liability company, association, business trust, joint venture, governmental entity or other entity of any nature (“Person”), any Person that controls, is controlled by, or is under common control with, such Person.

3.25 Condition of Tangible Assets. The Purchased Assets, including, without limitation, inventory, machinery, equipment, vehicles, furniture, plants and buildings, are in good operating condition and repair (ordinary wear and tear excepted) and are adequate for the uses to which they have been put by the Company in the ordinary course of business, except for parts or repairs of an immaterial nature in the aggregate, and the Company has not received any notice that any of such facilities or assets is in need of substantial maintenance or repair.

3.26 Tax Returns and Payments. All of the tax returns and reports of the Company required by law to be filed have been duly filed and all taxes shown as due thereon have been paid. There are in effect no waivers of the applicable statutes of limitations for any federal, state, local or foreign taxes for any period. The provisions of this Section 3.26

shall include, without limiting the generality of this Section 3.26, all reports, returns and payments due under all federal, state, local or foreign laws or regulations relating to income, sales, use, payroll, franchise, withholding, real property or personal property taxes, unemployment insurance, social security, worker’s compensation and other obligations of the same or of a similar nature. To the Company’s knowledge, the Company does not have any liability for any federal, state, local or foreign income, sales, use, withholding, payroll, franchise, real property or personal property taxes, assessments, amounts, interest or penalties of any nature whatsoever other than as shown on the July 31, 2004 Financial Statements and there is no basis for any additional claim or assessment other than with respect to liabilities for taxes which may have accrued since the date of the July 31, 2004 Financial Statements in the ordinary course of business and reserved against on the books and records of the Company compiled in accordance with accounting principles generally accepted in the United States of America which have been consistently applied to the Closing Date. To the knowledge of the Company, the provisions for taxes reflected in the July 31, 2004 Financial Statements are adequate for federal, state, county and local taxes for the period ended on December 31, 2003 and for all prior periods, whether disputed or undisputed. There are no present disputes about taxes of any nature payable by the Company. The Company has never filed, and will not file on or before the Closing Date, any consent under Section 341(f) of the Code. The Company’s tax returns have never been audited by any taxation authority. The Company has paid to the proper authorities all customs, duties and similar or related charges required to be paid by it with respect to the importation or exportation of goods into or out of the United States.

3.27 Broker’s and Finder’s Fees. The Company is not a party to, or in any way obligated to make any payment relating to, any contract or outstanding claim for the payment of any broker’s or finder’s fee in connection with the origin, negotiation, execution or performance of this Agreement or the consummation of the transactions contemplated hereby for which the Purchaser could become liable.

3.28 Disclosure of Confidential Information. The Company has fully disclosed, or will disclose on or before the Closing Date, to the Purchaser, all processes, inventions, methods, formulae, plans, drawings, customer lists, secret information and know-how (whether secret or not) known to it or usable by it in connection with the Business (including, without limitation, with respect to the Company IP).

3.29 Disclosure. No representation or warranty in this Agreement (including, without limitation, the Schedules hereto) contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make the statements herein or therein not misleading.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Company as follows:

4.1 Existence. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as it is now being conducted.

4.2 Power and Authority. The Purchaser has full power and authority to enter into this Agreement, perform its obligations hereunder and carry out the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all corporate action on the part of the Purchaser required by applicable law, its Certificate of Incorporation, as amended, or Bylaws, as amended, or otherwise. This Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (i) as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

4.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Purchaser of its obligations hereunder nor the consummation of the transactions contemplated hereby will contravene any provision of the Articles of Incorporation, as amended, or Bylaws, as amended, of the Purchaser or violate, or be in material conflict with, or constitute a material default under, permit the termination of, constitute a material breach of, create a loss of a material benefit under or upon any property or assets of the Purchaser under, any material agreement, instrument or commitment to which the Purchaser is a party.

4.4 Litigation. Except as otherwise described in any filings made by Purchaser with the Securities and Exchange Commission pursuant to the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended, there is no Action pending, or, to Purchaser’s knowledge, threatened, against Purchaser, or any of its assets, properties or rights, before any court, arbitrator or administrative or governmental body, which questions or challenges the validity of this Agreement or any Action taken or proposed to be taken by Purchaser pursuant to this Agreement or in connection with the transactions contemplated hereby. To Purchaser’s knowledge, no state of facts exists or has existed which would reasonably be expected to constitute grounds for the institution of any Action against Purchaser or against any assets, properties or rights of Purchaser which would materially and adversely affect the Business. Purchaser is not subject to any judgment, order or decree entered in any lawsuit or proceeding which has materially affected, or which can reasonably be expected to materially affect, the Business or its ability to conduct the Business in any way.

4.5 Broker’s and Finder’s Fees. Purchaser is not a party to, or in any way obligated to make any payment relating to, any contract or outstanding claim for the payment of any broker’s or finder’s fee in connection with the origin, negotiation, execution or performance of this Agreement or the consummation of the transactions contemplated hereby.

ARTICLE V
CERTAIN OBLIGATIONS OF THE PARTIES PRIOR TO CLOSING

The Company and the Purchaser hereby covenant as follows:

5.1 Access Prior to the Closing. The Company shall afford the Purchaser and its counsel, accountants, investment bankers, investors and other authorized agents and representatives (its “Advisors”) reasonable access during normal business hours upon reasonable prior notice to the Company ‘s properties, books, records and personnel in order that the Purchaser and its Advisors may have the opportunity to make such reasonable investigations as they shall desire to make of the affairs of the Company. The Company shall furnish, or shall cause its accountants to furnish, such additional financial and operating data and other information as the Purchaser or its Advisors shall from time to time reasonably request, including, without limitation, all financial and operating data as shall be necessary for verification of the accuracy of the Financial Statements. The Company shall, upon the reasonable request of the Purchaser, assist the Purchaser and its Advisors in contacting and communicating with suppliers, customers, employees and Advisors of the Company.

5.2 Confidentiality Prior to the Closing. Except as required by law or any securities exchange, each party hereto shall, and shall cause its officers and Advisors to, hold in strict confidence, and not disclose to others (except its Advisors) for any reason whatsoever, without the prior written consent of the other party, any nonpublic information received by it from the other party in connection with the transactions contemplated hereby and will not use such information for any purpose in the event that no Closing occurs under this Agreement. No party hereto shall communicate, directly or indirectly, to any third party other than their respective employees, agents and Advisors any of the terms, conditions and other aspects of this Agreement and the negotiation and preparation hereof until the Closing has occurred or the negotiations between the parties have terminated.

5.3 Conduct Prior to Closing Date. Except as otherwise contemplated by this Agreement or permitted by the prior written consent of the Purchaser, but without making any commitment on the Purchaser ‘s behalf, prior to the Closing Date the Company shall:

(a) conduct the Business and operations of the Company only in the ordinary course, including, without limitation, maintaining inventories at levels not in excess of those consistent with past practices;

(b) maintain the properties and assets of the Company in good condition and repair, perform its obligations under all agreements to which it is a party or by which it or any of its assets or properties are bound and maintain all of its Permits in good standing;

(d) use reasonable efforts to preserve the business organization, including the present work force, of the Company intact;

(e) use reasonable efforts to keep available the services of the present employees of the Company;

(f) use reasonable efforts to maintain and preserve the goodwill of the suppliers, customers and others having business relations with the Company; and

(g) consult with the Purchaser from time to time, upon the reasonable request of the Purchaser, with respect to any actual or proposed conduct of business by the Company.

5.4 Prohibited Transactions Prior to Closing Date. Except as otherwise contemplated by this Agreement or permitted by the prior written consent of the Purchaser, prior to the Closing Date the Company shall not:

(a) become a party to any agreement which, if it existed on the date hereof, would be required to be listed in the Schedules pursuant to Sections 3.10, 3.11, 3.12, 3.14, 3.15, 3.17 or 3.24;

(b) do or permit to occur any of the things referred to in Section 3.9;

(d) enter into any compromise or settlement of any Action relating to any of the Purchased Assets.

5.5 Employee and Customer Retention.

(a) Purchaser or one of its Affiliates (e.g., En Pointe Technologies, Inc.), shall offer employment to Xxx Xxxxxxx and Xxxxx Xxxx, the terms of which employment are attached as Exhibit F, shall be subject to good faith negotiation between Purchaser and such persons and shall be an at-will employment agreement with no provisions for severance with agreements not to compete with Purchaser for a period of three years for Xxxxxxx and two years for Wood, within 50 miles of any former customer of Company or any customer of Purchaser, in the form attached hereto as Exhibit 5.5 and each will agree to pay to Purchaser any amounts received by him under this paragraph 5.5 in the event

any provision of the applicable non-compete agreement is found to be invalid or unenforceable. Each also agrees not to voluntarily cooperate with any party asserting any claim or allegation, including, but not limited to, any allegation of insolvency, against Company or against Purchaser

(b) The Company will be solely responsible for any severance, commissions and other employee-related obligations incurred or relating to services performed prior to the Closing, including without limitation, payment of all accrued vacation pay and other amounts required by applicable law to be paid to employees upon termination.

(c) Purchaser and the Company will cooperate and use reasonable good faith efforts both prior to and after the closing of this transaction to cause (i) at least ninety percent (90%) of the employees of the Company to accept employment with Purchaser or such Affiliate (including, without limitation, those employees set forth on Schedule 2.2(v) attached hereto) and (ii) at least ninety percent (90%) (by revenue) of the customers of the Company to be retained by Purchaser after the Closing.

5.6 Cooperation. Each party shall use its reasonable efforts to cause the transactions contemplated by this Agreement to be consummated. In this regard, and without limiting the generality of the foregoing, the Company shall use reasonable efforts to obtain all consents and approvals of third parties listed on Schedule 3.5, and make all filings with and give all notices to government agencies and third parties which may be necessary or reasonably required in order to consummate the transactions contemplated by this Agreement. The Company shall give prompt notice to the Purchaser, after receipt thereof by the Company, of (i) any notice of, or other communication relating to, any default or event which, with notice or the lapse of time or both, would become a default under any indenture, instrument or agreement material to the Company or the operations, condition (financial or otherwise) or prospects of the Company, to which the Company is a party or by which the Company or its assets or properties are bound, and (ii) any notice or other communication from or to any third party alleging or stating that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement.

5.7 Bulk Sales Act. The Company and Purchaser will cooperate to ensure compliance with any Bulk Sales Act or other state or federal or other jurisdiction law required to protect the interests of Purchaser.

5.8 Risk of Loss. The Company shall retain all risk of condemnation, destruction, loss or damage due to fire or other casualty with respect to the Purchased Assets from the date of this Agreement until the Closing. If the condemnation, destruction, loss or damage is such that the operation of the Business is materially interrupted or curtailed or any of the Purchased Assets are materially affected, then Purchaser shall have the right to terminate this Agreement on written notice to the Company. If Purchaser nonetheless

elects to close, the Company shall immediately remit all net condemnation proceeds or third party insurance proceeds to Purchaser and the consideration set forth in Section 1.2 shall be adjusted at Closing to reflect such condemnation, destruction, loss or damage to the extent that insurance or condemnation proceeds are not sufficient to cover such condemnation, destruction, loss or damage.

ARTICLE VI
CONDITIONS TO THE PURCHASER’S OBLIGATIONS

Each and every obligation of the Purchaser under this Agreement to be performed on or before the Closing Date shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

6.1 Representations and Warranties True. The representations and warranties of the Company contained herein, in the Schedules and Exhibits hereto and in all certificates and other documents delivered by the Company to the Purchaser pursuant hereto shall be true and accurate in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as if made on and as of the Closing Date and the Company shall have delivered to Purchaser a Certificate of the Secretary of the Company certifying to such effect. The Company shall not have done or permitted to occur any of the things referred to in Section 3.9 and the representations and warranties contained therein shall be true and accurate in all material respects on and as of the Closing Date.

6.2 Performance. The Company shall have performed and complied in all material respects with all agreements, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing Date, including, without limitation, those referred to in Articles I and V and the Company shall have delivered to Purchaser a Certificate of the Secretary of the Company certifying to such effect.

6.3 Consents. All filings with and consents from government agencies and third parties required to consummate the transactions contemplated hereby, shall have been obtained by the Company, unless the failure to obtain any such consent or make any such filing would not have an adverse effect on the assets, properties, business, condition (financial or otherwise) or prospects of the Company or the transactions contemplated hereby, or except to the extent that making any such filing or obtaining any such consent has been waived in writing by the Purchaser.

6.4 Financial Condition. In Purchaser ‘s reasonable judgment, there shall have been no material adverse affect on the business or financial condition of the Company between the date hereof and the Closing Date.

6.5 Documents and Actions. The Company shall have executed and delivered to the Purchaser this Agreement and the other Related Agreements and shall have taken the actions contemplated by Section 2.3 hereof.

6.6 Proceedings. All corporate and other proceedings in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be in form and substance reasonably satisfactory to the Purchaser and its counsel, and the Purchaser shall have received all such originals or certified or other copies of such documents as it may reasonably request.

6.7 Absence of Litigation. There shall be no Action pending or threatened before any federal, state or local court, governmental agency or regulatory body which seeks (a) to invalidate or set aside, in whole or in part, this Agreement, (b) to restrain, prohibit, invalidate or set aside, in whole or in part, the consummation of the transactions contemplated hereby or (c) to obtain substantial damages in connection therewith.

6.8 Possession of Purchased Assets. The Company shall have fully transferred to the Purchaser physical possession of all of the Purchased Assets except for any laptop or desktop personal computers and related peripheral equipment that are in the personal possession of employees of Seller that will be hired by Purchaser.

6.9 Employment by Purchaser of Certain Seller Employees. Each of the persons set forth on Schedule 2.2(v) attached hereto shall have accepted employment with Purchaser on terms mutually acceptable to Purchaser and such person and shall have executed and delivered to Purchaser a General Terms of Employment document provided to such person by Purchaser (a copy of which has previously been provided to Seller by Purchaser).

ARTICLE VII
CONDITIONS TO THE COMPANY’S OBLIGATIONS

Each and every obligation of the Company under this Agreement to be performed on or before the Closing Date shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

7.1 Representations and Warranties True. The representations and warranties of the Purchaser contained herein and in all certificates and other documents delivered by the Purchaser to the Company pursuant hereto or in connection with the transactions contemplated hereby shall be true and accurate in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as if made on and as of the Closing Date and Purchaser shall have delivered to the Company a Certificate of the Chief Financial Officer of Purchaser certifying to such effect.

7.2 Performance. The Purchaser shall have performed and complied in all material respects with all agreements, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing Date, including, without limitation, those referred to in Article V and Purchaser shall have delivered to the

Company a Certificate of the Chief Financial Officer of Purchaser certifying to such effect.

7.3 Documents and Actions. The Purchaser shall have executed and delivered to the Company this Agreement and the Related Agreements and shall have taken the actions contemplated by Section 2.2.

7.4 Absence of Litigation. There shall be no Action pending or threatened before any federal, state or local court, governmental agency or regulatory body which seeks (a) to invalidate or set aside, in whole or in part, this Agreement, (b) to restrain, prohibit, invalidate or set aside, in whole or in part, the consummation of the transactions contemplated hereby or (c) to obtain substantial damages in connection therewith.

7.5 Employment Agreements. Purchaser shall have executed and delivered an employment agreement with Xxx Xxxxxxx and Xxxxx Xxxx, in form and substance mutually acceptable to Purchaser, Xxx Xxxxxxx and Xxxxx Xxxx.

ARTICLE VIII
CERTAIN TAX MATTERS AND POST-CLOSING COVENANTS

8.1 Allocation of Tax Liability. Any personal property taxes with respect to the Purchased Assets that relate to a tax period beginning before the Closing Date and ending after the Closing Date (a “Tax Overlap Period”) shall be apportioned between the Company and Purchaser on a per diem basis. Purchaser shall cause any required tax returns with respect to such personal property taxes to be filed for any Tax Overlap Period, and Purchaser shall pay, or cause to be paid, all taxes shown as due on any such returns. The Company shall pay Purchaser the Company’s pro rata share of any such taxes due pursuant to the filing of any such return within five (5) business days after receipt of notice of such filing by Purchaser, which notice shall set forth in reasonable detail the calculations regarding the Company ‘s pro rata share of such taxes. Purchaser shall not be responsible for any taxes with respect to any real property or leases of real property.

8.2 Cessation of Company Business. From and after the Closing Date, the Company shall cease to conduct any Business that would compete with Purchaser or cause the customers and/or employees of the Company or Purchaser to discontinue a business or working relationship with Purchaser of any kind or nature. The Company may continue conducting business, other than competing business, and paying for or otherwise duly providing for the full payment or performance of any and all Excluded Liabilities, and taking such other actions as may be necessary to conduct the ongoing business and affairs of the Company. The Company agrees that it shall not make any dividends or liquidating or other distributions of all or any portion of the Company ‘s non-sold cash or other assets to or for the benefit of the shareholders of the Company until all of the Company’s

liabilities have been properly discharged, and in no event earlier than the date that is six (6) months after the Closing Date.

8.3 Collection of Accounts and Accounts Receivable. Purchaser will have the right to collect and retain any and all accounts and accounts receivable of the Company that existed or were invoiced prior to the Closing Date or which relate to orders in process and orders received prior to the Closing Date, including, but not limited to marketing funds, rebates, agent fees, “big deal” fees, “select” fees, and the like. Purchaser shall have the right to xxxx and collect all accounts receivable arising out of or related to the performance of its obligations under the agreements, contracts and commitments constituting the Purchased Assets or otherwise with respect to the Business on and after the Closing Date, including but not limited to the right to endorse and negotiate checks and other negotiable instruments payable to the order of Company and arising from invoices or orders in process prior to the Closing Date. Seller shall not xxxx or collect, or attempt to xxxx or collect, for any accounts receivable arising out of or related to the performance of the obligations under the agreements, contracts and commitments constituting the Purchased Assets or otherwise with respect to the Business on and after the Closing Date. Seller agrees to use its commercially reasonable efforts to aid Purchaser in collecting such accounts receivable (provided, that Seller shall not be required to make any material out-of-pocket expenditures in doing so) and shall hold in trust for Purchaser’s benefit, and remit promptly to Purchaser, any amounts it receives for such accounts receivable. Prior to and after the Closing Date, the Company shall direct all customers of the Company to make payments on all invoices issued by Purchaser on and after the Closing Date to an account designated by Purchaser for receipt of all accounts receivable of the Business arising on and after the Closing Date. If any checks, cash or other monies or property of any kind with respect to such accounts receivable are received by the Company on or after the Closing Date, the Company shall immediately endorse such checks and tender such cash and other monies or property to Purchaser and shall take any and all other actions and execute any and all other agreements, documents and instruments as may reasonably be requested by Purchaser in order to effectuate or facilitate such endorsement, tender or transfer. Until their endorsement, transfer or tender to Purchaser, all such checks, cash or other monies or property shall be deemed held in trust by the Company for the exclusive benefit of Purchaser.

8.4 Books and Records; Audit Right. Unless otherwise consented to in writing by the Purchaser, the Company shall not destroy, alter or otherwise dispose of any original books or records of the Company prior to the Closing Date without first offering to surrender such books and records to the Purchaser and shall maintain such books and records in good condition in a reasonably accessible location. Upon reasonable prior notice, Purchaser’s employees, agents and/or Advisors shall have access, at all reasonable times, to all of the Company’s personnel, books, records, correspondence, financial information, receipts, vouchers, financial accounts, data stored in computer files or any other media, and memoranda of every description for the purpose of verifying Seller’s compliance with the terms of this Agreement (including, without limitation, Section 8.3 above). Seller shall maintain in a reasonably safe and secure manner and preserve such documents, supporting data and accounting records, etc. in a safe place for a period of

two (2) years after the Closing Date and Purchaser’s employees, agents and/or Advisors shall have the right to reproduce any of these documents.

8.5 Transfer Taxes. Purchaser and the Company shall each share equally and be equally responsible for the payment of any and all transfer or sales taxes arising in connection with the consummation of the transactions contemplated hereby. In this regard, Purchaser shall pay, or cause to be paid, all such transfer or sales taxes as due and the Company shall pay Purchaser the Company’s share of any such taxes due within five (5) business days after receipt of notice of such payment by Purchaser.

8.6 Web Domain. Upon the Closing Date the Company will maintain the web domain xxx.xxxxxxxxxxx.xxx’s existence and will not assign the web domain to any other party for a period of no less than 3 years.

8.7 Liens Against Purchased Assets. At the Closing Date, Seller shall deliver to Purchaser evidence satisfactory to Purchaser that the liens, encumbrances and security interests of each of (i) Xxxxxx Bank, (ii) Xxxxxx Micro; and (iii) any other secured creditor with respect to any of the Purchased Assets evidenced by UCC Financing Statements filed in any and all jurisdictions, together with any security agreements and other documents and instruments related thereto, and all indebtedness, obligations and liabilities of any kind or nature whatsoever associated with such liens, encumbrances and security interests and such security agreements and other documents and instruments related thereto have been either assigned to Purchaser or fully and forever released and terminated, including, but not be limited to, copies of UCC Termination Statements as filed in all jurisdictions necessary in order to terminate the UCC Financing Statements filed against Seller in any and all jurisdictions, except as specifically excepted above in 2.3(a)(vii).

ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

9.1 Survival of Representations and Warranties True. Notwithstanding (a) the making of this Agreement or any Related Agreement, (b) any examination made by or on behalf of the parties hereto and (c) the Closing hereunder, (x) the representations and warranties of the Company and the Purchaser contained in this Agreement, or in any document delivered pursuant to the provisions of this Agreement, shall survive the Closing for a period of 24 months, except for the representations and warranties made in Section 3.10 (Title to Properties; Encumbrances), Section 3.19 (Environmental Matters) and Section 3.27 (Tax Returns and Payments), which in each case shall survive until the expiration of the applicable statute of limitations for the underlying cause of action plus six months and (y) the covenants and agreements required to be performed after the Closing or pursuant to Article V of this Agreement (unless noncompliance with those covenants contained in Article V was waived in writing at the Closing) shall survive until fully performed or fulfilled. No action may be brought with respect thereto after such date; provided, however, that if, prior to such date, one party has notified the other party

of a claim for indemnity under this Article IX (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Article IX.

9.2 Indemnification.

(a) Subject to Section 9.1 above, from and after the Closing, the Company and Xxxxx Xxxxx and Xxxxxx Xxxxx and Xxx Xxxxxxxx, jointly and severally, shall indemnify and save harmless the Purchaser and its officers, directors, shareholders, successors and assigns (collectively, the “Purchaser Indemnified Party”) from and against any loss, claim, liability, damage, punitive damages, remedial costs, civil and criminal penalties or expenses or other damages of any kind or nature, including reasonable attorneys’ fees incurred by such Purchaser Indemnified Party or the Business in connection with any of the foregoing (collectively, the “Damages”), arising out of (i) the failure by the Company to perform any covenant or agreement required to be performed by it in this Agreement or in any Related Agreement (unless noncompliance with such covenant or agreement in such specific instance was waived in writing by the Purchaser at the Closing), including, but not limited to Section 8.3 Collection Of Accounts Receivable; (ii) the failure of the Company to pay, perform or satisfy any obligation under any pension, retirement, severance, welfare, deferred compensation, bonus or other incentive plan, or other employee benefit program, arrangement, agreement or understanding, or medical, vision, dental or health plan, or life insurance or disability plan, retiree medical plan or any other employee benefit plans, including, without limitation, any “employee benefit plan” (as defined in Section 3(3) of ERISA) or any “multiemployer plans” (as defined in Section 3(37) of ERISA), or any “employee welfare plan” (as defined in Section 3(i) of ERISA) or any other plans, programs or arrangements of any kind to which the Company contributes or is a party or by which it is bound or under which it may have liability and under which employees or former employees of the Company (or their beneficiaries) are eligible to participate or derive a benefit, on or before the Closing Date; (iii) any judgments, orders or decrees entered in any lawsuit or proceeding or Actions against the Company arising out of activities undertaken by the Company on or prior to the Closing Date, including, without limitation, Actions for (A) personal injury, products liability, liability for services rendered or breach of warranty arising from products or goods final-tested or shipped by the Company or services rendered by the Company involving or relating to the Company, any of its assets, properties or rights, including the Actions set forth on Schedule 3.13; (B) noncompliance by the Company with any Environmental Law; (C) the release into the environment of any pollutant, toxic or hazardous material or waste generated by the Company or the Business, whether or not occurring at or on a site owned, leased or operated by the Company; or (D) without limiting the generality of the foregoing, any Actions or threatened Actions that may be asserted against the Company and any other Actions arising out of the Company’s operations on or prior to the Closing Date; (iv) the Company’s noncompliance with any federal, state or local laws, rules, regulations, standards and requirements, on or prior to the Closing Date; (v) the failure of the Company to pay promptly any federal, state, local or foreign taxes of the Company (including, without limitation, all taxes of any kind or nature and all interest, additions to

tax and penalties thereon) claimed or assessed for any taxable period ended on or prior to the Closing Date; (vi) any Actions, claims, demands, grievances or disputes brought or initiated by third parties against the Purchaser or any of its Affiliates, employees, consultants, attorneys or agents in connection with the failure of the Company to pay any customer, supplier or vendor of the Company the value of any account payable or trade payable shown on the Financial Statements or incurred by the Company on or prior to the Closing Date in accordance with terms and conditions of payment with respect to such account payable or trade payable or any other liabilities of the Company which existed and were not disclosed to the Purchaser prior to the Closing Date; or (vii) any breach of warranty or misrepresentation in this Agreement or any Related Agreement (including the Schedules hereto) made by or on behalf of the Company and not waived in writing by the Purchaser.

(b) The Purchaser shall notify the Company within a reasonable period of time after becoming aware of, and shall provide to the Company as soon as practicable thereafter all information and documentation necessary to support and verify, any Damages which the Purchaser Indemnified Party, as the case may be, shall have determined has given or could give rise to a claim for indemnification hereunder.

(c) All claims for indemnity under this Article IX shall be paid on demand in immediately available funds in U.S. dollars. At the Purchaser’s option, in lieu of payment in cash, Purchaser shall have the absolute right in Purchaser’s sole discretion to setoff, in part or in full, against all or any portion of the payments due to the Company pursuant to the Closing Note the full amount of any claim for indemnity pursuant to the provisions of Section 9.2. Notwithstanding anything to the contrary set forth herein, the Company shall not have any liability for indemnification under this Article IX until the total of all amounts for which indemnification is sought under this Article IX exceeds Ten Thousand Dollars ($10,000).

(d) The Purchaser shall notify the indemnifying party with reasonable promptness of its discovery of any matter giving rise to a claim of indemnity or setoff pursuant to this Agreement. With respect to any third party claim or action that could give rise to indemnity under this Agreement, the indemnifying party shall be entitled to assume the defense thereof with counsel satisfactory to the Purchaser Indemnified Party, provided, that upon the request of the Purchaser Indemnified Party, the indemnifying party provides reasonable evidence of its ability to perform its obligations under this Section 9.2. After notice from indemnifying party to the Purchaser Indemnified Party, of its election so to assume the defense thereof, the indemnifying party shall not be liable to the Purchaser Indemnified Party, under the foregoing indemnity agreement for any legal or other expenses subsequently incurred by the Purchaser Indemnified Party, in connection with the defense thereof other than (i) those relating to investigation or the furnishing of documents or witnesses and (ii) all reasonable fees and expenses of separate counsel retained by such Purchaser Indemnified Party, , if (A) the indemnifying party and the Purchaser Indemnified Party, shall have agreed to the retention of such counsel or (B)

counsel to the Purchaser Indemnified Party, shall have concluded reasonably that the representation of the indemnifying party and the Purchaser Indemnified Party, by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. Promptly after receipt by the Purchaser Indemnified Party, of notice of the commencement of any action to which the indemnifying party is not a party, the Purchaser Indemnified Party, shall, if such claim in respect thereof is to be made against the indemnifying party pursuant to this Agreement, notify the indemnifying party in writing of the commencement thereof, but the failure or delay in so notifying the indemnifying party shall not relieve the indemnifying party of its obligations to indemnify the Purchaser Indemnified Party, pursuant to the terms of this Agreement. The Purchaser Indemnified Party, shall keep the indemnifying party reasonably informed of the progress of any such action and shall not enter into any settlement of any such action without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.

ARTICLE X
TERMINATION

10.1 Termination. This Agreement may be terminated at any time prior to the Closing Date:

(a) by the mutual consent of the Purchaser and the Company;

(b) by either the Purchaser or the Company, upon written notice, if there has been a material misrepresentation or any breach on the part of the other party hereto in the representations, warranties or covenants contained in this Agreement which is not cured within ten (10) business days after such other party has been notified of the intent to terminate this Agreement pursuant to this subsection (b); or

10.2 Effect of Termination. If this Agreement is terminated as expressly permitted under Section 10.1, such termination shall be the sole remedy and this Agreement shall forthwith become void (except for Section 5.2 and Section 11.3) and there shall be no liability on the part of the Company or the Purchaser or any of their respective Affiliates; provided, however, that if such termination shall result from the willful breach by a party hereto of its obligations under this Agreement, such party shall be fully liable for any and all damages, costs and expenses sustained or incurred by the other party as a result of such breach. If this Agreement is terminated without a Closing, the Company shall return promptly to the Purchaser all documents, work papers and other materials of the Purchaser furnished or made available to the Company or its Advisors, and all copies thereof, and no such information, documents, work papers or other materials received by the Company shall be revealed to any third party or used for the advantage of the Company or any other party; and the Purchaser shall return promptly to the Company all

documents, work papers and other material of the Company furnished or made available to the Purchaser or its Advisors, and all copies thereof, and no such information, documents, work papers or other materials received by the Purchaser shall be revealed to any third party or used for the advantage of the Purchaser or any other party.

ARTICLE XI
MISCELLANEOUS PROVISIONS

11.1 Public Announcements. Except as required by law and except as the Company and the Purchaser shall authorize in writing, the parties hereto shall not, and shall cause their respective officers, directors, employees, Affiliates and Advisors not to, disclose any matter or matters relating to this transaction to any person not an officer, director, employee, Affiliate or Advisor of such party, except for the content set forth in Schedule 11.1.

11.2 Amendment; Waiver. Neither this Agreement, nor any of the terms or provisions hereof, may be amended, modified, supplemented or waived, except by a written instrument signed by the parties hereto (or, in the case of a waiver, by the party granting such waiver). No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No failure of either party hereto to insist upon strict compliance by the other party with any obligation, covenant, agreement or condition contained in this Agreement shall operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 11.2.

11.3 Fees and Expenses. Except as otherwise provided in this Agreement, each of the parties hereto shall bear and pay its own costs and expenses incurred in connection with the origin, preparation, negotiation, execution and delivery of this Agreement and the agreements, instruments, documents and transactions referred to in or contemplated by this Agreement (whether or not such transactions are consummated) including, without limitation, any fees, expenses or commissions of any of its Advisors, attorneys, accountants, agents, finders or brokers. The Purchaser shall indemnify the Company against any claims of third parties for any brokerage, finder’s, agent’s or similar fees or commissions in connection with the transactions contemplated hereby insofar as such claims are alleged to be based on arrangements or contacts made by, to or with the Purchaser or its Advisors or representatives. The Company shall indemnify the Purchaser against all such claims insofar as they are alleged to be based on arrangements or contacts made by, to or with the Company or its Advisors or representatives.

11.4 Notices.

(a) All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing (including telefax, telegraphic, telex or cable communication) and mailed, telefaxed, telegraphed, telexed, cabled or delivered:

(i) If to the Company, to: Xxxxx Xxxx

Attn:
Facsimile no.: 000-000-0000

with a copy (which shall not constitute notice to the Company) to:

Attention: Xxxxx Xxxxxx
Xxxxxxx Shank LLP
0000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000-0000
Facsimile No.: 503-248-0130

(ii) If to the Purchaser, to:

En Pointe Technologies Sales, Inc.
000 X. Xxxxxxxxx Xxxx., 00xx Xxxxx
Xx Xxxxxxx, XX 00000
Attn: Xxx Din
Facsimile no.: (000) 000-0000

with a copy (which shall not constitute notice to the Purchaser) to:

Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000

(b) All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 11.4 (i) if delivered personally against proper receipt or by confirmed telefax or telex, shall be effective upon delivery and (ii) if delivered (A) by certified or registered mail with postage prepaid, (B) by Federal Express or similar courier service with courier fees paid by the sender or (C) by telegraph or cable, shall be effective two business days following the date when mailed, couriered, telegraphed or cabled, as the case may be. Either party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents.

11.5 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and

permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any party hereto without the prior written consent of the other parties; provided, however, that the Purchaser may assign this Agreement to any of its Affiliates or any entity who by merger, consolidation, purchase or sale subsequently acquires Purchaser or becomes an Affiliate without the prior consent of the Company if such Affiliate or entity agrees in writing to assume all of Purchaser’s obligations under this Agreement and to be subject to and bound by all of the terms and conditions hereof. Any assignment which contravenes this Section 11.5 shall be void ab initio.

11.6 Governing Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to the conflicts of laws principles thereof.

11.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

11.8 Headings. The headings contained in this Agreement are for convenience of reference only and shall not constitute a part hereof or define, limit or otherwise affect the meaning of any of the terms or provisions hereof.

11.9 Entire Agreement. This Agreement (which defined term includes the Schedules and Exhibits to this Agreement) embodies the entire agreement and understanding among the parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements, commitments, arrangements, negotiations or understandings, whether oral or written, between the parties with respect thereto. There are no agreements, covenants, undertakings, representations or warranties with respect to the subject matter of this Agreement other than those expressly set forth or referred to herein. This is an integrated agreement.

11.10 Severability. Each term and provision of this Agreement constitutes a separate and distinct undertaking, covenant, term and/or provision hereof. In the event that any term or provision of this Agreement shall be determined to be unenforceable, invalid or illegal in any respect, such unenforceability, invalidity or illegality shall not affect any other term or provision of this Agreement, but this Agreement shall be construed as if such unenforceable, invalid or illegal term or provision had never been contained herein. Moreover, if any term or provision of this Agreement shall for any reason be held to be excessively broad as to time, duration, activity or subject, it shall be construed, by limiting and reducing it, so as to be enforceable to the extent permitted under applicable law as it shall then exist.

11.11 No Third Party Beneficiaries. Nothing in this Agreement is intended, nor shall anything in this Agreement be construed, to confer any rights, legal or equitable, in any

Person (other than the parties hereto and their respective heirs, distributees, beneficiaries, executors, successors and assigns), including, without limitation, any employee of the Company or any beneficiary of such employee.

11.12 Arbitration. Any dispute arising out of this Agreement or the Closing Note, or the performance or breach hereof or thereof, shall be resolved by binding arbitration under the Commercial Arbitration Rules (the “AAA Rules”) of the American Arbitration Association (the “AAA”), except that requests for preliminary or immediate injunctive relief may be made by any party to a court having jurisdiction thereof. The parties stipulate that courts located in Los Angeles County, California, have non-exclusive jurisdiction over any request for preliminary or immediate injunctive relief made by any party). This arbitration provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-14. The parties agree that pursuant to Section 9 of the Federal Arbitration Act, a judgment of a United States District Court shall be entered upon the award made pursuant to the arbitration. A panel of three arbitrators, who shall have the authority to allocate the costs of any arbitration initiated under this Section, shall be selected according to the AAA Rules within ten (10) days of the submission to the AAA of the response to the statement of claim or the date on which any such response is due, whichever is earlier. The arbitrators shall be required to furnish to the parties to the arbitration a preliminary statement of the arbitrators’ decision that includes the legal rationale for the arbitrators’ conclusion and the calculations pertinent to any damage award being made by the arbitrators. The arbitrators shall then furnish each of the parties to the arbitration the opportunity to comment upon and/or contest the arbitrators’ preliminary statement of decision either, in the discretion of the arbitrators, through briefs or at a hearing. The arbitrators shall render a final decision following any such briefing or hearing. The arbitrators shall decide the amount and extent of pre-hearing discovery which is appropriate. The arbitrators shall have the power to enter any award of monetary and/or injunctive relief (including the power to issue permanent injunctive relief and also the power to reconsider any prior request for immediate injunctive relief by any party and any order as to immediate injunctive relief previously granted or denied by a court in response to a request therefore by any party), including the power to render an award as provided in Rule 4 5 of the AAA Rules; PROVIDED, HOWEVER, THAT ANY AWARD SHALL NOT INCLUDE CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES. The arbitrators shall award the prevailing party its costs and reasonable attorneys’ fees; provided, however, that the arbitrators shall not award attorneys’ fees to a prevailing party if the prevailing party received a settlement offer unless the arbitrators’ award to the prevailing party is greater than such settlement offer without taking into account attorneys’ fees in the case of the settlement offer or the arbitrators’ award. Any arbitration shall be held in Los Angeles County, California. In addition to the above courts, the arbitration award may be enforced in any court having jurisdiction over me parties and the subject matter of the arbitration.

11.13 Attorneys’ Fees. In the event that any action or proceeding is commenced by any party hereto for the purpose of enforcing any provision of this Agreement, the parties to such action or proceeding may receive as part of any award, judgment, decision or other

resolution of such action or proceeding their costs and reasonable attorneys’ fees as determined by the person or body making such award, judgment, decision or resolution. Should any claim hereunder be settled short of the commencement of any such action or proceeding, the parties in such settlement shall be entitled to include as part of the damages alleged to have been incurred reasonable costs of attorneys or other professionals in investigation or counseling on such claim.

11.14. Releases. By execution hereof and upon Closing, Seller hereby releases Purchaser and all Seller employees who become employed by Purchaser after Closing from any liability under any and all non solicitation and non competition agreements that Seller may have with said employees.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.


“PURCHASER”:		EN POINTE TECHNOLOGIES SALES, INC.

By:	/s/ Xxxxx Xxxxx

Xxxxx Xxxxx, CFO

“COMPANY”:		VIABLELINKS, INC.

By:	/s/ Xxxxxx Xxxx

Xxxxxx Xxxx, Shareholder and Director

By:	/s/ Xxxxx Xxxx

Xxxxx Xxxx, Shareholder and Director

By:	/s/ Xxx Xxxxxxx

Xxx Xxxxxxx, President, Shareholder and Director

	/s/ Xxxxx Xxxx

Xxxxx Xxxx, individually

	/s/ Xxxxxx Xxxx

Xxxxxx Xxxx, individually

	/s/ Xxx Xxxxxxx

Xxx Xxxxxxx, individually

Document Metadata

Table of Contents

ASSET PURCHASE AGREEMENT

Document Metadata