Exhibit 10.3
AGREEMENT AND PLAN OF MERGER
     THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered
into as of September 12, 2007 by and among (i) netASPx, Inc., a Delaware
corporation (the “Company”), (ii) NaviSite, Inc., a Delaware corporation
(“Parent”), (iii) NSite Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent (“Merger Sub”) and (iv) for the limited
purpose of agreeing to perform the duties specified in Section 3.09, GTCR Fund
VI, L.P. (the “Representative”). Parent, Merger Sub and the Company are referred
to herein collectively as the “Parties” or individually as a “Party.”
     WHEREAS, the Board of Directors of the Company deems it advisable and in
the best interest of the Company’s stockholders to enter into this Agreement and
to consummate the transactions contemplated hereby on the terms and subject to
the conditions provided for in this Agreement;
     WHEREAS, in furtherance thereof it is proposed that the acquisition of the
Company by Parent be accomplished by the merger of Merger Sub with and into the
Company (the “Merger”), with the Company being the surviving corporation in
accordance with the DGCL, followed as an integral part of the same transaction
by a merger of the Company in accordance with the DGCL into a limited liability
company wholly-owned by Parent (the “Successor LLC”);
     WHEREAS, the Boards of Directors of each of Parent (on its own behalf and
as the sole stockholder of Merger Sub), Merger Sub and the Company have each
approved the Merger and deemed it advisable that the Parties enter into this
Agreement providing for the Merger; and
     WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and to prescribe various conditions to the Merger.
     NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the Parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
     Section 1.01 Defined Terms. When used in this Agreement, the following
terms shall have the meanings set forth below:
     “Acquisition Proposal” has the meaning set forth in Section 6.06(f).
     “Advisors” has the meaning set forth in Section 6.06(a).
     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
     “Aggregate Exercise Price” means the aggregate of the exercise prices of
the In the Money Options and Warrants outstanding immediately prior to the
Effective Time.

 

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     “Agreement” has the meaning set forth in the introductory paragraph above.
     “Ancillary Documents” means the documents, instruments and agreements to be
executed and/or delivered pursuant to this Agreement or pursuant to any
Ancillary Document.
     “Applicable Law” or “Applicable Laws” means, with respect to any Person,
any and all laws (including the common law), ordinances, constitutions,
regulations, statutes, treaties, rules, codes, licenses, requirements and
injunctions adopted, enacted, implemented, promulgated, issued, entered by or
under the authority of any Governmental Body having jurisdiction over such
Person or any of such Person’s properties or assets.
     “Broker” has the meaning set forth in Section 4.21.
     “Business Day” means any day of the year other than a Saturday, a Sunday,
or other day on which commercial banks in New York, New York are authorized or
required by law to be closed.
     “Cash Portion of the Merger Consideration” has the meaning set forth in
Section 3.01(a).
     “Cash Portion of the Per Share Closing Merger Consideration” shall be equal
to (x) the Cash Portion of the Merger Consideration divided by (y) the number of
Fully-Diluted Company Shares.
     “Certificate of Merger” has the meaning set forth in Section 2.02.
     “Certificates” has the meaning set forth in Section 3.05(b).
     “Closing” has the meaning set forth in Section 2.02.
     “Closing Date” has the meaning set forth in Section 2.02.
     “Closing Merger Consideration” has the meaning set forth in
Section 3.01(c)(iii).
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Collateral Source” has the meaning set forth in Section 10.07.
     “Common Stock” means the common stock, par value $0.0001 per share, of the
Company.
     “Common Stockholders” has the meaning set forth in Section 3.05(b).
     “Company” has the meaning set forth in the introductory paragraph above.
     “Company Balance Sheet” has the meaning set forth in Section 4.07(a).
     “Company Balance Sheet Date” has the meaning set forth in Section 4.07(a).
     “Company Certificate” means the certificate of incorporation of the
Company.

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     “Company Disclosure Schedules” has the meaning set forth in Article 4.
     “Company Financial Statements” has the meaning set forth in
Section 4.07(a).
     “Company Indemnified Parties” has the meaning set forth in Section 7.03(a).
     “Company Intellectual Property” has the meaning set forth in Section 4.12.
     “Company Restricted Stock” has the meaning set forth in Section 3.04.
     “Company Shares” means the issued and outstanding shares of Common Stock.
     “Company Stockholders” means the holders of all issued and outstanding
Company Shares at or prior to the Effective Time.
     “Company Subsidiary Securities” has the meaning set forth in
Section 4.06(b).
     “Company Transaction Expenses” has the meaning set forth in Section 11.01.
     “Comparable Benefits” has the meaning set forth in Section 7.02(b).
     “Confidential Information” means any information or compilation of
information not generally known to the public or the industry or which the
Company or any of its Subsidiaries has not disclosed to Third Parties without a
written obligation of confidentiality, which information is proprietary to the
Company or any of its Subsidiaries, relating to the Company’s or any of its
Subsidiaries’ procedures, techniques, methods, concepts, ideas, affairs,
products, processes and services, including, but not limited to, information
relating to distribution, marketing, merchandising, selling, research,
development, manufacturing, purchasing, accounting, engineering, financing,
costs, pricing and pricing strategies and methods, customers, suppliers,
creditors, employees, contractors, agents, consultants, plans, billing, needs of
customers and products and services used by customers, all lists of suppliers,
distributors and customers and their addresses, prospects, sales calls,
products, services, prices and the like as well as any specifications, formulas,
plans, drawings, accounts or sales records, sales brochures, catalogs, code
books, manuals, trade secrets, knowledge, know-how, operating costs, sales
margins, methods of operations, invoices or statements and the like; provided,
however, that the term “Confidential Information” shall not be deemed to include
information which (i) becomes generally available to the public without any
fault of Parent or Merger Sub, or (ii) becomes available to Parent or Merger Sub
on a non-confidential basis and without any breach of an agreement of
confidentiality from a source other than the Company or any of its Subsidiaries,
or (iii) is disclosed to a Governmental Body pursuant to Applicable Law, and is
publicly available as a result of such disclosure.
     “Confidentiality Agreement” has the meaning set forth in Section 6.04.
     “Contract” means any agreement, lease, license agreement (other than a
license granted by a Governmental Body), contract, consensual obligation,
promise, commitment, arrangement, understanding or undertaking (whether written
or oral and whether express or implied) of any type, nature or description. As
used herein, the word “Contract” shall be limited in scope if

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modified by an adjective specifying the type of contract to which this Agreement
or a provision hereof refers.
     “Credit Agreement” means that certain Credit Agreement among the Company,
its Subsidiaries and the lender named therein (the “Lender”).
     “Deductible Amount” has the meaning set forth in Section 10.05.
     “DGCL” means the General Corporation Law of the State of Delaware.
     “Dissenting Shares” has the meaning set forth in Section 3.02(c).
     “Dollars” and the sign “$” mean United States Dollars; any foreign currency
shall be converted into United States Dollars using the prevailing exchange
rates in effect as of the date hereof.
     “Effective Time” has the meaning set forth in Section 2.02.
     “Employee Benefit Plan” means any (x) “employee benefit plan” (as such term
is defined in ERISA Section 3(3)) that is covered by Title I of ERISA and is
maintained or sponsored by the Company or any of its ERISA Affiliates, including
all deferred compensation, pension, profit sharing, retirement, group or
individual insurance or welfare benefit plan and (y) each employment, “change in
control”, termination or severance agreement; and each other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is, or was
within the past three years, sponsored, maintained or contributed to or required
to be contributed to by the Company or any of its ERISA Affiliates.
     “Employee Transaction Bonuses” means the bonuses payable at the Closing to
the Company employees as set forth in Schedule 1.01.
     “Encumbrances” means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
     “Environment” has the meaning set forth in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
     “Environmental Claim” means administrative, regulatory, or judicial action,
suits, demands, demand letters, claims, notices of non-compliance or violation,
investigation or Proceedings, Orders or agreements, arising under any
Environmental Law or any Permit issued under any Environmental Law, including
(i) Environmental Claims by Governmental Bodies for enforcement, cleanup,
removal, response, remedial or other action or damage pursuant to any applicable
Environmental Law, and (ii) Environmental Claims by any Third Party seeking
damages or injunctive relief resulting from Environmental Conditions or arising
from alleged injury or threat of injury to health, safety or the environment.
     “Environmental Condition” means the presence or introduction into the
environment of any Hazardous Materials (and any resulting air, soil,
groundwater, or surface water contamination without regard to the location to
which such resulting contamination has migrated

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or spread) as a result of which the Company or any of its Subsidiaries has or
may become liable to any Person or by reason of which the Company or any of its
Subsidiaries or any assets of the Company or any of its Subsidiaries may suffer
or be subject to an Environmental Claim.
     “Environmental Laws” means all Applicable Laws and any Order that
(i) regulates or relates to the protection or clean-up of the environment; the
use, treatment, generation, storage, transportation, handling, disposal or
release of Hazardous Materials; or the preservation or protection of waterways,
groundwater, drinking water, air, wildlife, plants or other natural resources;
or (ii) imposes liability with respect to any of the foregoing, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; or any
other Applicable Law of similar effect, each as amended from time to time.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
     “ERISA Affiliate” means each entity that is treated as a single employer
with the Company for purposes of Code Section 414.
     “Escrow Agent” has the meaning set forth in Section 3.01(c)(ii).
     “Escrow Agreement” has the meaning set forth in Section 3.01(c)(ii).
     “Escrow Deposit” has the meaning set forth in Section 3.01(c)(ii).
     “Escrow” has the meaning set forth in the Escrow Agreement.
     “Exchange Agent” has the meaning set forth in Section 3.05(a).
     “Exchange Agent Agreement” has the meaning set forth in Section 3.05(a).
     “Financing” has the meaning set forth in Section 5.07.
     “Fully-Diluted Company Shares” is equal to, at the Effective Time (and
without duplication with respect to clauses (i) and (ii)), the sum of: (i) the
total number of Company Shares, plus (ii) the total number of additional shares
of Common Stock that would be issued assuming the exercise, conversion or
exchange, as applicable, of all outstanding Options, Warrants, or other Rights
that are “In the Money” at the Effective Time. An Option, Warrant or Right is
“In the Money” if the exercise price per share of Common Stock issuable upon
exercise, conversion or exchange of such Option, Warrant or Right is less than
the Per Share Merger Consideration.
     “GAAP” means United States generally accepted accounting principles as in
effect from time to time, consistently applied.

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     “Governmental Body” means any: (i) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (ii) federal, state,
local, municipal, foreign or other government; (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, board, commission, department, instrumentality, office or other entity,
and any court or other tribunal); (iv) multi-national organization or body;
and/or (v) government entity exercising, or entitled or purporting to exercise,
any administrative, executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature.
     “Group Return” has the meaning set forth in Section 4.10(f).
     “Hazardous Materials” means (i) any petroleum or petroleum products,
asbestos in any form, and polychlorinated biphenyls, and (ii) any chemicals,
materials or substances, whether solid, liquid or gas defined as or included in
the definition of “contaminant,” “pollutant,” “hazardous substances,” “hazardous
wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted
hazardous wastes,” “toxic substances,” or “toxic pollutants” under any
applicable Environmental Law.
     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder.
     “Indemnification Control Person” means (i) in the event of a claim by a
Stockholder Indemnified Party, Parent, and (ii) in the event of a claim by a
Parent Indemnified Party against the Escrow Deposit, the Representative.
     “Indemnified Party” means any Person entitled to seek indemnification
pursuant to Article 10.
     “Indemnified Taxes” has the meaning set forth in Section 7.05(a)(ii).
     “Indemnifying Party” means (i) any Person against whom indemnification may
be sought pursuant to Article 10 and (ii) with respect to claims made against
the Escrow Deposit, the Indemnification Control Person.
     “Insurance Policies” has the meaning set forth in Section 4.19.
     “Intellectual Property” means any and all (i) inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations, continuations in
part, revisions, extensions and reexaminations thereof, (ii) trademarks, service
marks, trade dress, logos, trade names, assumed names and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (iii) copyrightable works,
all copyrights and all applications, registrations and renewals in connection
therewith, (iv) mask works and all applications, registrations and renewals in
connection therewith, (v) trade secrets and confidential business information
(including ideas, research and development, know-how, technology, formulas,
compositions, processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information and
business and marketing plans and proposals), (vi) computer software

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(including data and related software program documentation in computer-readable
and hard-copy forms), (vii) other intellectual property and proprietary rights
of any kind, nature or description, including web sites, web site domain names
and other e-commerce assets and resources of any kind or nature, and
(viii) copies of tangible embodiments thereof (in whatever form or medium).
     “IRS” has the meaning set forth in Section 4.17(c).
     “Knowledge” means (i) with respect to the Company or any of its
Subsidiaries, the actual knowledge of John M. Whiteside, Craig D. Norman and,
with respect to Sections 4.13 (Contracts) and 4.16 (Labor Matters) only, the
Vice President of Operations, and (ii) with respect to Parent, the actual
knowledge of Arthur Becker and Jim Pluntze and the other “named executive
officers” of Parent (as such term is defined in Item 402(a)(3) of Regulation S-K
promulgated under the Securities Act).
     “Lease” has the meaning set forth in Section 4.11(b).
     “Leased Real Property” has the meaning set forth in Section 4.11(b).
     “Lender Debt” shall mean all indebtedness for borrowed money owed by the
Company and its Subsidiaries pursuant to the Credit Agreement.
     “Lender” has the meaning set forth in the definition of the Credit
Agreement in Section 1.01.
     “Loss” or “Losses” has the meaning set forth in Section 10.01.
     “Material Adverse Effect” means, with respect to any Person, any change or
event or effect that is materially adverse to the business or financial
condition of such Person and its Subsidiaries taken as a whole, excluding, in
each case, any change, event or effect arising out of or resulting from
(i) changes, events or developments in or affecting the Company’s industry in
the United States or internationally, including changes in the use, adoption or
non-adoption of technologies or industry standards (other than any such change,
event or development that is disproportionately adverse to the Company relative
to the effect of such conditions on other Persons operating in the managed
applications services industry), (ii) changes, events or developments in
financial, foreign exchange or securities markets or the economy in general in
the U.S. or internationally including any disruption thereof (other than any
such change, event or development that is disproportionately adverse to the
Company relative to the effect of such conditions on other Persons operating in
the managed applications services industry), (iii) any change, event or
development brought about through acts of war or terrorism, insurrection,
escalation of hostilities, natural disasters, acts of God or similar calamity or
crisis (other than any such change, event or development that is
disproportionately adverse to the Company relative to the effect of such
conditions on other Persons affected by such conditions), (iv) the announcement,
execution or delivery of this Agreement or the Ancillary Documents or the
consummation of the Transactions, (v) such Person’s performance of its
obligations hereunder, (vi) any change, event, or development relating to any
action taken (or any failure to take any action) by any other Party hereto,
(vii) any matter set forth in any of the Company Disclosure Schedules or
(viii) any change, event or development that has been cured prior to the
Closing.

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     “Material Contracts” has the meaning set forth in Section 4.13(a).
     “Material IP Agreements” has the meaning set forth in Section 4.12.
     “Merger” has the meaning set forth in the Recitals.
     “Merger Consideration” has the meaning set forth in Section 3.01(a).
     “Merger Sub” has the meaning set forth in the introductory paragraph above.
     “Option” has the meaning set forth in Section 3.03(a).
     “Option/Warrant Closing Cash Out Payment” means an amount in cash equal to
the value of (x) the Stock Portion of the Merger Consideration, less the Escrow
Deposit, divided by (y) the number of Fully-Diluted Company Shares.
     “Option Holders” means each holder of certificates, agreements or other
instruments evidencing Options.
     “Option Payment” has the meaning set forth in Section 3.03(a).
     “Option Plan” has the meaning set forth in Section 3.03(a).
     “Order” means any judgment, award, decision, consent decree, injunction,
ruling, writ, charge or other restriction of a Governmental Body that is binding
on any Person or its property under Applicable Law.
     “Ordinary Course of Business” means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
     “Parent” has the meaning set forth in the introductory paragraph above.
     “Parent Common Stock” means the common stock, par value $0.01 per share, of
Parent.
     “Parent Credit Agreement” has the meaning set forth in Section 5.07.
     “Parent Disclosure Schedules” has the meaning set forth in Article 5.
     “Parent Indemnified Parties” has the meaning set forth in Section 10.01.
     “Parent Lender” has the meaning set forth in Section 5.07.
     “Parent Plans” has the meaning set forth in Section 7.02(c).
     “Parent Preferred Stock” means the preferred stock, par value $0.01 per
share, of Parent.
     “Parent Return” has the meaning set forth in Section 7.05(a)(i).
     “Party” or “Parties” has the meaning set forth in the introductory
paragraph above.

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     “Payoff Amount” has the meaning set forth in Section 3.01(c)(i).
     “Per Share Merger Consideration” has the meaning set forth in
Section 3.02(a).
     “Permit” or “Permits” means any and all permits, licenses, filings,
authorizations, registrations, qualifications, consents, approvals, or indicia
of authority (and any pending applications for approval or renewal of a Permit)
issued by any Governmental Body that are required by, or issued to or on behalf
of, a Person, in order for the Company or such Person to own, construct,
operate, sell, inventory, disburse or maintain any of their assets or conduct
all or any portion of their business.
     “Permitted Encumbrances” means (a) Taxes, assessments and other
governmental levies, fees or charges that are (i) not due and payable as of the
Closing Date, or (ii) being contested by appropriate Proceedings, (b) statutory
Encumbrances, mechanics liens and similar liens for labor, materials or supplies
, in each case incurred in the Ordinary Course of Business for amounts that are
(i) not delinquent and are not, in the aggregate, material, or (ii) being
contested by appropriate Proceedings, (c) Encumbrances that are a matter of
public record, (d) present or future zoning, building codes, and other land use
Applicable Law regulating the use or occupancy of Real Property or the
activities conducted thereon that are imposed by any Governmental Body having
jurisdiction over such Real Property, (e) Encumbrances for any financing that is
an obligation of the Company or any of its Subsidiaries, that will be paid off
at Closing, (f) purchase money liens and liens securing rental payments under
capital lease arrangements, (g) restrictions on the transferability of
securities arising under Applicable Laws, (h) easements, rights of way,
covenants, conditions, restrictions and other similar matters and other title
defects and Encumbrances, none of which materially impair the use or occupancy
of Real Property or the operation of the business of the Company and its
Subsidiaries, taken as a whole.
     “Person” means an individual, a partnership, a limited partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, any other business
entity or a Governmental Body.
     “Personal Property” has the meaning set forth in Section 4.11(c).
     “Pre-Closing Tax Statement” has the meaning set forth in
Section 7.05(a)(ii).
     “Pre-Closing Taxes” has the meaning set forth in Section 7.05(b).
     “Pro Rata Share” means, with respect to each share of Common Stock, (x) the
amount of distribution or proceeds from the Escrow divided by (y) the number of
issued and outstanding shares of Common Stock as of the Effective Time.
     “Proceeding(s)” means any suit, litigation, arbitration, hearing, audit,
investigation or other action (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, any
Governmental Body or arbitrator.
     “Real Property” means land, together with all buildings, structures,
improvements, and fixtures located thereon, and easements and other rights and
interests appurtenant thereto.

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     “Representative” has the meaning set forth in the introductory paragraph
above.
     “Requisite Stockholder Approval” has the meaning set forth in Section 4.02.
     “Rights” means any and all outstanding subscriptions, warrants, options, or
other arrangements or commitments obligating or which may obligate (with or
without notice or passage of time or both) a company to issue or dispose of any
securities of a company including, without limitation, convertible securities
and debt securities.
     “Statement of Closing Cash” has the meaning set forth in Section 3.01(b).
     “Stock Portion of the Merger Consideration” has the meaning set forth in
Section 3.01(a).
     “Stock Portion of the Per Share Closing Merger Consideration” shall be a
number of shares of Parent Series A Preferred Stock equal to (x) the Stock
Portion of the Merger Consideration, less the Escrow Deposit, divided by (y) the
number of issued and outstanding shares of Common Stock as of the Effective
Time.
     “Stockholder Indemnified Parties” has the meaning set forth in
Section 10.02.
     “Subsidiary” means, with respect to any Person, (i) if a corporation, a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association, or other business entity (other than a corporation), a majority of
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof and for this purpose a Person owns a
majority ownership interest in such a business entity (other than a corporation)
if such Person shall be allocated a majority of such business entity’s gains or
losses or shall be or shall control any managing director or general partner of
such business entity (other than a corporation). The term “Subsidiary” shall
include all Subsidiaries of such Subsidiary.
     “Superior Proposal” has the meaning set forth in Section 6.06(f).
     “Surviving Corporation” has the meaning set forth in Section 2.01 and shall
also mean with respect to any period after the LLC Merger, the Successor LLC.
     “Successor LLC” has the meaning set forth in the Recitals.
     “Tax” or “Taxes” means all federal, state, local, foreign or other tax of
any kind whatsoever, including without limitation, all income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, ad valorem,
value added, inventory, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, unclaimed
property, escheat, sales, use, transfer, registration, alternative or add-on
minimum, or estimated tax, and including any interest, penalty, or addition
thereto, whether disputed or not.

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     “Tax Arbitrator” has the meaning set forth in Section 7.05(a)(iii).
     “Tax Return” means any return, declaration, report, claim for refund, or
information return or statement with respect to any Tax required to be filed or
actually filed with a Taxing Authority, including any schedule or attachment
thereto, and including any amendment thereof.
     “Tax Statement Dispute” has the meaning set forth in Section 7.05(a)(iii).
     “Taxing Authority” means the domestic or foreign Governmental Body
responsible for the administration of any Tax.
     “Third Party” or “Third Parties” shall mean any Person that is not a Party
to this Agreement, other than the Company Stockholders or any of their
Affiliates or other related parties.
     “Third Party Claim” has the meaning set forth in Section 10.03(a).
     “Third Party Interests” has the meaning set forth in Section 4.06(c).
     “Threatened” means as follows: a claim, Proceeding, dispute, action, or
other matter will be deemed to have been “Threatened” if any demand or statement
has been made in writing, or any notice has been given in writing that would
lead a reasonably prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter will, with substantial certainty, be asserted,
commenced, taken or otherwise pursued in the future; provided, however, that the
foregoing shall not include customer billing, service or warranty disputes in
the Ordinary Course of Business.
     “Transaction Expense” has the meaning set forth in Section 11.01.
     “Transactions” means the Merger and any other transactions contemplated by
or pursuant to this Agreement and the Ancillary Documents.
     “Warrant Holders” has the meaning set forth in Section 3.05(b).
     “Warrant Payment” has the meaning set forth in Section 3.03(b).
     “Warrants” has the meaning set forth in Section 3.03(b).
     “Withholdings” means the amount reasonably determined jointly by Parent and
the Company in good faith to be withheld from the Merger Consideration as
required by Applicable Law (arising from, without limitation, withholding
obligations of the Company and its Subsidiaries arising from the cancellation
and settlement of any Options or Warrants), which amount(s) shall be timely
remitted to the appropriate Governmental Body by or on behalf of the Surviving
Corporation at or after the Closing.
     “Written Consents” has the meaning set forth in Section 6.05.

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ARTICLE 2
THE MERGER
     Section 2.01 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, at the Effective Time,
Merger Sub shall be merged with and into the Company. As a result of the Merger,
the separate corporate existence of Merger Sub shall cease, and the Company
shall continue as the surviving corporation and as a wholly-owned subsidiary of
Parent immediately following the Merger (the “Surviving Corporation”).
     Section 2.02 Closing and Effective Time. Unless this Agreement is earlier
terminated pursuant to the provisions of Section 9.01 hereof, the closing of the
Merger (the “Closing”) shall take place at the offices of Morrison & Foerster
LLP, 1650 Tysons Boulevard, Suite 400, McLean, Virginia 22102, at 10:00 a.m.
(Eastern time) no later than two (2) Business Days after the satisfaction or, if
permissible, waiver of all of the conditions set forth in Article 8 (other than
those conditions that by their nature are to be fulfilled at the Closing, but
subject to the fulfillment of such conditions), or at such later time as the
Parties may agree. The date upon which the Closing actually occurs is herein
referred to as the “Closing Date.” Subject to the provisions of this Agreement,
on the Closing Date, the Parties shall cause the Merger to be consummated by
filing a certificate of merger (the “Certificate of Merger”) with the Secretary
of State of the State of Delaware, in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL (the date and time of
acceptance by the Secretary of State of Delaware of such filing, or, if another
date and time is specified in such filing, such specified date and time, being
the “Effective Time”).
     Section 2.03 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, assets, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities, duties and obligations of
the Company and Merger Sub shall become the debts, liabilities, duties and
obligations of the Surviving Corporation.
     Section 2.04 Certificate of Incorporation; Bylaws.
          (a) At the Effective Time, the Company shall amend the Company
Certificate so as to be in the form attached hereto as Exhibit A and, as so
amended, such certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by the DGCL.
          (b) At the Effective Time, the Company shall amend the Company’s
bylaws so as to be in the form attached hereto as Exhibit B and, as so amended,
such bylaws shall be the bylaws of the Surviving Corporation until thereafter
amended as provided therein, in the Surviving Corporation’s certificate of
incorporation or by the DGCL.
     Section 2.05 Directors and Officers. The directors of the Company
immediately prior to the Effective Time shall submit their resignations, which
shall be effective as of the Effective

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Time. The directors of Merger Sub immediately prior to the Effective Time shall
be the initial directors of the Surviving Corporation, each to hold office in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation. The officers of Merger Sub immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation.
     Section 2.06 The LLC Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, following the
Effective Time, the Surviving Corporation shall be merged with and into the
Successor LLC. As a result of the LLC Merger, the separate corporate existence
of the Surviving Corporation shall cease, and the Successor LLC shall continue
as the surviving entity in the LLC Merger and as a wholly-owned subsidiary of
Parent immediately following the LLC Merger.
     Section 2.07 Second Effective Time. Subject to the provisions of this
Agreement, reasonably promptly after the Closing Date, the Parties shall cause
the LLC Merger to be consummated by filing a certificate of merger (the
“Certificate of LLC Merger”) with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with, the
relevant provisions of the DGCL (the date and time of acceptance by the
Secretary of State of the State of Delaware of such filing, or, if another date
and time is specified in such filing, such specified date and time, being the
“Second Effective Time”).
     Section 2.08 Effect of the LLC Merger. At the Second Effective Time, the
effect of the LLC Merger shall be as provided in the applicable provisions of
the DGCL. Without limiting the generality of the foregoing, and subject thereto,
at the Second Effective Time, except as otherwise provided herein, all the
property, assets, rights, privileges, powers and franchises of the Surviving
Corporation and the Successor LLC shall vest in the Successor LLC, and all
debts, liabilities, duties and obligations of the Surviving Corporation and
Successor LLC shall become the debts, liabilities, duties and obligations of the
Successor LLC.
     Section 2.09 Certificate of Formation. At the Second Effective Time, the
Successor LLC shall amend the Company Certificate so as to be in an appropriate
form reasonably agreed to by Parent and the Representative, and as so amended,
such certificate of formation shall be the certificate of formation of the
Successor LLC until thereafter amended as provided therein or by the DGCL.
     Section 2.10 Effect of LLC Merger on Stock of Surviving Corporation. At the
Second Effective Time, by virtue of the LLC Merger and without any further
action on the part of the Surviving Corporation, Parent, the Successor LLC, or
any stockholder of Parent, each share of the stock of the Surviving Corporation
issued and outstanding immediately prior to the Second Effective Time, shall be
converted into membership interests in the Successor LLC. No stock of the
Surviving Corporation shall be deemed to be outstanding or to have any rights
other than those set forth in this Section 2.10 after the LLC Effective Time.

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ARTICLE 3
MERGER CONSIDERATION; CONVERSION OF SECURITIES;
EXCHANGE OF CERTIFICATES
     Section 3.01 Calculation and Payment of the Merger Consideration.
          (a) Calculation of Merger Consideration. The aggregate amount to be
paid with respect to the Fully-Diluted Company Shares (the “Merger
Consideration”) shall consist of: (A) the payment or delivery by Parent and
Merger Sub of (i) Three Million One Hundred Twenty Five Thousand Shares
(3,125,000) shares of Parent Series A Preferred Stock (the “Stock Portion of the
Merger Consideration”) and Fifteen Million Dollars ($15,000,000) in cash (the
“Cash Portion of the Merger Consideration”), subject to adjustment as set forth
in Section 3.01(b) below, plus (ii) the Aggregate Exercise Price, minus
(iii) the amount by which the unpaid Company Transaction Expenses as of the
Closing Date exceed Five Hundred Thousand Dollars ($500,000), minus (iv) the
Payoff Amount and (B) the payment of the Closing Cash by the Company to the
Exchange Agent pursuant to Section 3.01(b). Remittance and delivery of the
Merger Consideration by Parent and Merger Sub shall be made by Parent or Merger
Sub in accordance with the provisions of Section 3.01(c). The maximum aggregate
Merger Consideration payable by Parent and Merger Sub to the Company
Stockholders, Option Holders and Warrant Holders in the Merger pursuant to this
Agreement shall be Forty Million Five Hundred Thousand Dollars ($40,500,000),
subject to adjustment as set forth in Section 3.01(b). The parties agree that
the Stock Portion of the Merger Consideration is valued at $25,000,000.
          (b) Closing Cash Adjustment. On the Closing Date, the Company shall
deliver to Parent and Merger Sub a statement setting forth the amount of the
Company’s immediately available cash (minus the amount of cash required to
satisfy outstanding checks) as of the Closing Date (the “Statement of Closing
Cash”) determined in accordance with the principles, policies, estimates and
procedures set forth on Schedule 3.01 of the Company Disclosure Schedules (the
“Closing Cash”). At the Closing, the Company shall remit the Closing Cash by
wire transfer of immediately available funds to the Exchange Agent. To the
extent that the Closing Cash is greater than Five Million Dollars ($5,000,000),
the Cash Portion of the Merger Consideration shall be decreased by such amount.
To the extent that the Closing Cash is less than Five Million Dollars
($5,000,000), the Cash Portion of the Merger Consideration shall be increased by
such amount.
          (c) Payment of Merger Consideration and the Payoff Amount. At the
Closing, Parent shall remit the Merger Consideration and the Payoff Amount by
wire transfer of immediately available funds as follows:
               (i) Parent shall remit an amount by wire transfer of immediately
available funds as directed in writing by the Lender necessary to repay the
Lender Debt and all interest accrued thereunder up to and including the Closing
Date (the “Payoff Amount”);
               (ii) On the Closing Date, the Representative, Parent and Branch
Banking and Trust Company (the “Escrow Agent”) shall enter into an Escrow
Agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”).
Parent shall withhold Three Hundred Ninety-Three Thousand Seven Hundred Fifty
(393,750) shares of Parent Series A

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Preferred Stock out of the Stock Portion of the Merger Consideration (the
“Escrow Deposit”) and deposit such shares into escrow at the Closing pursuant to
the terms of the Escrow Agreement. The Escrow Agreement shall provide that any
shares held by the Escrow Agent shall be released by the Escrow Agent to the
Company Stockholders pursuant to the terms of the Escrow Agreement, less any
pending or paid indemnification claims asserted pursuant to Article 10 on or
prior to such date, on the nine (9) month anniversary of the Closing Date; and
               (iii) The Merger Consideration, less the Escrow Deposit, shall be
referred to herein as the “Closing Merger Consideration.” Parent shall remit the
Closing Merger Consideration, less the Closing Cash and the aggregate Option
Payments to be paid at Closing, to the Exchange Agent at the Closing (as
described in Section 3.05).
     Section 3.02 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any further action on the part of the Company, Parent,
Merger Sub or any Company Stockholder or any stockholder of Parent:
          (a) Conversion of Common Stock. Each share of the Common Stock issued
and outstanding immediately prior to the Effective Time (other than shares of
Common Stock cancelled pursuant to Section 3.02(b) and Dissenting Shares whose
appraisal rights are being exercised pursuant to Section 3.02(c)), shall be
converted into the right to receive, upon surrender of a Certificate formerly
representing such share in the manner provided in Section 3.05, (i) an amount in
cash equal to the Cash Portion of the Per Share Closing Merger Consideration,
plus (ii) a number of shares of Parent Series A Preferred Stock equal to the
Stock Portion of the Per Share Closing Merger Consideration, plus (iii) a right
to receive a Pro Rata Share of any proceeds or distributions from the Escrow
(collectively, the “Per Share Merger Consideration”). The Cash Portion of the
Per Share Closing Merger Consideration payable with respect to each share of the
Common Stock hereunder shall be reduced by (x) the aggregate amount of the
Option/Warrant Closing Cash Out Payment, the Option Escrow Cash Out Payments and
the Warrant Escrow Cash Out Payments divided by (y) the number of issued and
outstanding shares of Common Stock immediately prior to the Effective Time. No
Common Stock shall be deemed to be outstanding or to have any rights other than
those set forth in this Section 3.02 after the Effective Time.
          (b) Cancellation of Treasury Stock. Each share of Common Stock held in
treasury by the Company and each share of Common Stock owned or held, directly
or indirectly, by the Company or its Subsidiaries, or Parent, Merger Sub or
their respective Subsidiaries, in each case, immediately prior to the Effective
Time, shall be automatically cancelled without any conversion thereof and shall
cease to exist and no payment of cash or any other distribution shall be made
with respect thereto.
          (c) Appraisal Rights. Notwithstanding anything to the contrary herein,
shares of Common Stock issued and outstanding immediately prior to the Effective
Time and held by a Common Stockholder who is entitled to and has properly
exercised and perfected appraisal rights pursuant to Section 262 of the DGCL
(collectively, the “Dissenting Shares”) shall not be converted as of the
Effective Time into the right to receive the Per Share Merger Consideration, but
instead shall have such rights as may be available under the DGCL. At the
Effective Time, all Dissenting Shares shall no longer be outstanding and shall
be cancelled and each holder of

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Dissenting Shares shall cease to have any rights with respect thereto, except
the right to receive the fair value of such Dissenting Shares in accordance with
Section 262 of the DGCL; provided, however, that if any such Common Stockholder
shall have failed to perfect or shall effectively withdraw or lose its right to
appraisal and payment under the DGCL, or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by
Section 262, such stockholder’s shares of Common Stock shall thereupon be deemed
to have been converted as of the Effective Time into the right to receive the
Per Share Merger Consideration and such shares of Common Stock shall no longer
be Dissenting Shares. The Company shall give Parent prompt notice of all written
demands received by the Company for appraisal rights and Parent shall have the
right to participate in all negotiations and proceedings with respect to such
demand. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to, or settle or offer to settle, any such
demands.
          (d) Conversion of Merger Sub Common Stock. Each issued and outstanding
share of common stock, $0.01 par value, of Merger Sub outstanding immediately
prior to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation with the same rights, powers and
privileges as the shares so converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation.
     Section 3.03 Options and Warrants.
          (a) Options. Prior to the Effective Time, the Board of Directors of
the Company (or, if appropriate, any committee thereof) shall adopt appropriate
resolutions and take all other actions necessary to (i) provide for the
cancellation of all outstanding, unexercised and unexpired stock option or
similar Rights to purchase Common Stock (each, an “Option”) granted under the
Company’s Third Amended and Restated 1999 netASPx, Inc. Stock Incentive Plan
(the “Option Plan”), effective at the Effective Time, without any payment
therefor except as otherwise provided in this Section 3.03(a) and (ii) terminate
the Option Plan as of the Effective Time. Each In the Money Option, to the
extent unexercised as of the Effective Time, shall thereafter no longer be
exercisable but shall entitle each holder thereof, in cancellation and
settlement therefor, to an amount (the “Option Payment”) equal to (1) a payment
in cash equal to (x) the amount of the excess (if any) of (A) the Cash Portion
of the Per Share Closing Merger Consideration and the Option/Warrant Closing
Cash Out Payment over (B) the exercise price per share of Common Stock subject
to such Option, multiplied by (y) the total number of shares of Common Stock
subject to such Option immediately prior to its cancellation (such payment to be
net of Withholdings, if any, and without interest), payable at the same time, in
the same manner, and subject to the same conditions under which the Common
Stockholders receive the Cash Portion of the Per Share Closing Merger
Consideration plus (2) a payment in cash (the “Option Escrow Cash Out Payment”)
equal to the total number of shares of Common Stock subject to such Option
immediately prior to its cancellation multiplied by the value of the Escrow
Deposit divided by the Fully-Diluted Share Number. At the Closing, the Parent
shall deliver to the Company the aggregate Option Payments and the Company shall
pay, or arrange for the Company’s payroll processor to pay, to each Option
Holder, subject to any applicable Withholdings, the Option Payment due under
this Section 3.03(a) with respect to such Option. No diminution in the Closing
Cash as a result of making the Option Payments on behalf of Parent shall be
reflected in the Merger Consideration. For purposes of this Section 3.03(a), the

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value of each share of Parent Series A Preferred Stock shall be deemed to be
Eight Dollars ($8.00).
          (b) Warrants. Prior to the Effective Time, the Board of Directors of
the Company (or, if appropriate, any committee thereof) shall adopt appropriate
resolutions and take all other actions necessary to provide for the
cancellation, effective at the Effective Time, of all outstanding warrants to
purchase Common Stock (the “Warrants”), without any payment therefor except as
otherwise provided in this Section 3.03(b). Each In the Money Warrant, to the
extent unexercised as of the Effective Time, shall thereafter no longer be
exercisable but shall entitle each Warrant Holder, in cancellation and
settlement therefor, to an amount (the “Warrant Payment”) equal to (i) a payment
in cash equal to (x)(A) the Cash Portion of the Per Share Closing Merger
Consideration and the Option/Warrant Closing Cash Out Payment minus (B) the
exercise price per share of Common Stock subject to such Warrant, multiplied by
(y) the total number of shares of Common Stock as to which that Warrant remains
unexercised immediately prior to its cancellation (such payment to be net of
Withholdings, if any, and without interest), payable at the same time, in the
same manner, and subject to the same conditions under which the Common
Stockholders receive the Cash Portion of the Per Share Closing Merger
Consideration plus (ii) a payment in cash (the “Warrant Escrow Cash Out
Payment”) equal to the total number of shares of Common Stock subject to such
Warrant immediately prior to its cancellation multiplied by the value of the
Escrow Deposit divided by the Fully-Diluted Share Number. Upon surrender of a
Certificate evidencing an In the Money Warrant by the Warrant Holder to the
Exchange Agent, pursuant to Section 3.05, the Exchange Agent shall pay to such
Warrant Holder, subject to any applicable Withholdings, the Warrant Payment due
under this Section 3.03(b) with respect to such Warrant. For purposes of this
Section 3.03(b), the value of each share of Parent Series A Preferred Stock
shall be deemed to be Eight Dollars ($8.00).
     Section 3.04 Restricted Stock. If any share of Company Common Stock
outstanding immediately prior to the Effective Time is unvested or subject to a
repurchase option or forfeiture in favor of the Company (any such shares,
“Company Restricted Stock”), then, effective immediately prior to the Effective
Time, such Company Restricted Stock shall be fully vested and any repurchase
option or forfeiture restriction shall lapse.
     Section 3.05 Payment of Merger Consideration.
          (a) Pursuant to an Exchange Agent Agreement in the form attached
hereto as Exhibit D (the “Exchange Agent Agreement”) to be entered into prior to
the Closing between Representative, Parent and Branch Banking and Trust Company
(the “Exchange Agent”), at the Closing, and subject to the terms and conditions
set forth in this Agreement, Parent shall remit to the Exchange Agent the amount
of cash equal to the Cash Portion of the Merger Consideration and the number of
shares of Parent Series A Preferred Stock constituting the Stock Portion of the
Merger Consideration less the Escrow Deposit. All payments for shares of Common
Stock, Options and the Warrants which are made in accordance with the terms
hereof shall be deemed to have been made in full satisfaction of all rights
pertaining to such Common Stock, Options and Warrants, as the case may be.
          (b) Promptly after entering into the Exchange Agent Agreement and
before the Effective Time, the Company shall send or cause the Exchange Agent to
send a notice and a

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letter of transmittal in the form attached hereto as Exhibit E (a “Letter of
Transmittal”) (which shall (x) specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent, (y) expressly ratify and confirm the
appointment of the Representative as attorney-in-fact and agent for and on
behalf of the applicable former Common Stockholders in accordance with Article 3
of this Agreement and (z) otherwise be in customary form), to each holder of
certificates, agreements, or other instruments formerly evidencing (i) shares of
Common Stock (other than certificates representing Dissenting Shares) (such
holders, “Common Stockholders”) and (ii) Warrants (such holders, “Warrant
Holders”) (such instrument evidencing shares of Common Stock and Warrants,
collectively, the “Certificates”) advising such holders of such Certificates of
the procedure for surrendering to the Exchange Agent their Certificates for
exchange into the Per Share Merger Consideration or the Warrant Payment, as the
case may be, and that delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery to the Exchange Agent of the Certificates
and a duly executed Letter of Transmittal and any other required documents of
transfer. Upon surrender of their Certificates to the Exchange Agent together
with such Letter of Transmittal (duly executed) and any other required documents
of transfer, and no earlier than the Closing, each Common Stockholder and
Warrant Holder shall be entitled to receive in exchange therefore the Per Share
Merger Consideration or the Warrant Payment, respectively. Upon such surrender,
and no earlier than the Closing, the Exchange Agent shall promptly deliver to
each such holder the applicable consideration due pursuant to this
Section 3.05(b) in accordance with the instructions set forth in the related
Letter of Transmittal, and the Certificates so surrendered shall promptly be
cancelled. Until surrendered, the Certificates (other than those evidencing
Dissenting Shares) shall be deemed for all purposes to evidence only the right
to receive the consideration due pursuant to this Section 3.05(b), or, in the
case of Dissenting Shares, the fair value of such Dissenting Shares in
accordance with Section 262 of the DGCL. No interest shall accrue or be paid on
any amount payable upon the surrender of the Certificates (other than Dissenting
Shares to the extent required by the DGCL). Notwithstanding the foregoing or
Sections 3.02, 3.03 or 3.04, the Exchange Agent shall not pay to any Common
Stockholder or Warrant Holder that portion of the Per Share Merger Consideration
or Warrant Payment held in the Escrow until such times as such shares or other
proceeds or distributions are distributable pursuant to the terms and conditions
of the Escrow Agreement.
          (c) If any portion of the Per Share Merger Consideration or Warrant
Payment is to be paid to a Person other than the Person in whose name the
surrendered Certificate is registered, it shall be a condition to such payment
that (i) such Certificate shall be properly endorsed and (ii) the Person
requesting such payment shall pay to the Exchange Agent any transfer or other
Taxes required as a result of such payment to a Person other than the registered
holder of such Certificate or establish to the reasonable satisfaction of the
Exchange Agent that such Tax has been paid or is not payable.
          (d) Notwithstanding the other provisions of this Section 3.05, any
Company Stockholder that shall have surrendered its Certificates together with a
duly executed Letter of Transmittal and any other required documents of transfer
to Parent at least one (1) day prior to the Closing shall be entitled to receive
at the Closing the applicable consideration directly from Parent and/or the
Company.

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          (e) To the extent any Company Stockholder is indebted to the Company
for borrowed money as of the Closing, such amount shall be described on the
Letter of Transmittal with respect to such Company Stockholder and, if Parent
and the Representative shall have received evidence reasonably satisfactory to
each of them that the Merger Consideration payable to such Company Stockholder
has been offset by such amount, then Parent and the Representative shall
promptly deliver joint written instructions to the Exchange Agent instructing
the Exchange Agent to deliver such amount to the Surviving Corporation from the
exchange fund established by the Exchange Agent Agreement.
     Section 3.06 No Liability. None of Parent, Merger Sub, the Representative
or the Surviving Corporation shall be liable to any Company Stockholder in
respect of any Per Share Merger Consideration, Option Payment or Warrant Payment
delivered to a public official as required by and pursuant to any applicable
abandoned property, escheat or similar Applicable Law.
     Section 3.07 Lost, Stolen and Destroyed Certificates. If any Certificate is
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed, the Surviving
Corporation shall issue in exchange for such lost, stolen or destroyed
Certificate, the Per Share Merger Consideration, Option Payment or Warrant
Payment, as may be the case, deliverable in respect thereof pursuant to this
Agreement.
     Section 3.08 Return of Merger Consideration. If, one (1) year after the
Effective Time, there remains any Certificate, Option or Warrant which has not
been surrendered or exercised for payment of the applicable Per Share Merger
Consideration, Option Payment, or Warrant Payment, as may be the case, the
Exchange Agent shall mail notices to the holder thereof at the address set forth
in the records of the Company notifying such holder of the right to receive the
Per Share Merger Consideration, Option Payment or Warrant Payment, as may be the
case. To the extent that any holder has not tendered his, her or its
Certificate, Option or Warrant within ninety (90) days after the mailing of such
notice, the Exchange Agent shall return, to the extent permitted by Applicable
Law, to Parent any funds held by it for the benefit of such holder and deliver
to Parent any Certificates or other documents received by it from any holder
after such time. Upon receipt, Parent shall hold the remaining funds for the
benefit of such holders and shall deliver to any such holder who has properly
surrendered or exercised Certificates, Options or Warrants, the Per Share Merger
Consideration, Option Payment, or Warrant Payment, as may be the case, to which
such holder is entitled pursuant to this Agreement with respect to the
Certificates, Options or Warrants surrendered or exercised by such holder.
     Section 3.09 The Representative.
          (a) Appointment of the Representative. By virtue of the adoption of
this Agreement and approval of the Merger and the Transactions by the Common
Stockholders, each Company Stockholder (regardless of whether or not such
Company Stockholder votes in favor of the adoption of the Agreement and the
approval of the Merger and the Transactions, whether at a meeting or by written
consent in lieu thereof) shall be deemed to have appointed, effective from and
after the approval of the Merger, Representative to act as his, her or its
representative and true and lawful attorney-in-fact, with full power of
substitution, in such holder’s name and on such holder’s behalf, under this
Agreement in the absolute discretion of the Representative in

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accordance with the terms of this Section 3.09, the Registration Rights
Agreement and the Escrow Agreement. This power of attorney and all authority
hereby conferred is irrevocable and shall not be terminated by any act of any
such holder, by operation of law, by such holder’s death or disability or by any
other event, except as expressly set forth herein. The Representative may be
replaced upon the affirmative vote of the holders of a majority of the Common
Stock as of the Closing. Any Person or entity appointed to replace a former
Representative shall execute a statement agreeing to perform the duties set
forth in this Agreement. The appointment of a replacement Representative shall
become effective upon delivery of such statement to Parent and the Surviving
Corporation.
          (b) Authority After the Effective Time. From and after the Effective
Time, the Representative shall be authorized to: (i) take all actions required
by, and exercise all rights granted to, the Representative in this Agreement,
the Registration Rights Agreement and the Escrow Agreement; (ii) receive all
notices or other documents given or to be given to the Representative by Parent
pursuant to this Agreement, the Registration Rights Agreement and the Escrow
Agreement; (iii) negotiate, undertake, compromise, defend, resolve and settle
any suit, proceeding or dispute under this Agreement, the Registration Rights
Agreement and the Escrow Agreement; (iv) execute and deliver all agreements,
certificates and documents required by the Representative in connection with any
of the Merger and the Transactions; (v) engage special counsel, accountants and
other advisors and incur such other expenses in connection with any of the
Transactions; and (vi) take such other action as is necessary on behalf of the
Company Stockholders in connection with this Agreement, the Registration Rights
Agreement and the Escrow Agreement and the Merger and the Transactions,
including, without limitation, all such other matters as the Representative may
deem necessary or appropriate to carry out the intents and purposes of this
Agreement and the Ancillary Documents.
          (c) Expenses. The Representative shall be entitled to receive advances
or reimbursement for any and all reasonable expenses, charges, liabilities and
debts, including reasonable attorneys’ fees, incurred by the Representative in
the performance or discharge of its rights and obligations under this Agreement
but only in connection with a Third Party Claim. The Representative shall be
entitled to collect such advances or reimbursement from the Escrow (up to
$250,000) in shares of Parent Series A Preferred Stock (or Parent Common Stock
issued upon conversion of Parent Series A Preferred Stock) pursuant hereto and
pursuant to the Escrow Agreement. For purposes of the foregoing, the value of
each share of Parent Series A Preferred Stock as of any particular time shall be
deemed to be the “Redemption Price” of such share as such term is defined in the
Certificate of Designations and the value of each share of Parent Common Stock
issued upon conversion of Parent Series A Preferred Stock shall be deemed to be
Eight Dollars ($8.00), plus any accrued but unpaid dividends (as appropriately
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or general distribution of securities
convertible into or exchangeable or exercisable for any capital stock of
Parent), reclassification, reorganization, recapitalization or other like change
occurring after the date hereof).
          (d) Release from Liability; Indemnification; Authority of
Representative. By virtue of the adoption of this Agreement and the approval of
the Merger and the Transactions by the Common Stockholders, each Company
Stockholder shall be deemed to have (i) released the Representative from, and
agreed to indemnify the Representative against, liability for any action

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taken or not taken by the Representative in its capacity as such Representative,
except for the liability of the Representative to a Company Stockholder for loss
which such holder may suffer from fraud committed by the Representative in
carrying out its duties hereunder, and (ii) appointed, as of such approval, the
Representative as such Company Stockholder’s true and lawful agent and
attorney-in-fact to enter into any agreement in connection with the Merger and
the Transactions, to exercise all or any of the powers, authority and discretion
conferred on such Company Stockholder under any such agreement, to give and
receive notices on such Company Stockholder’s behalf and to be such Company
Stockholder’s exclusive representative with respect to any matter, suit, claim,
action or proceeding arising with respect to any transaction contemplated by
such agreement, including, without limitation, the defense, settlement or
compromise of any claim, action or Proceeding for which Parent or the Surviving
Corporation may be entitled to indemnification. All actions, decisions and
instructions of the Representative shall be conclusive and binding upon all of
the Company Stockholders.
          (e) Acceptance. By executing this Agreement, the Representative agrees
to act as, and to undertake the duties and responsibilities of, the
Representative as set forth in this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
     Except as set forth in the disclosure schedules delivered by the Company to
Parent on the date hereof, which shall be arranged in sections and subsections
corresponding to the numbered and lettered sections and subsections contained in
this Article 4 (the “Company Disclosure Schedules”), the Company represents and
warrants as of the date hereof to Parent and Merger Sub as follows:
     Section 4.01 Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each other jurisdiction where the
transaction of its business requires such qualification, except where the lack
of such qualification would not have, individually or in the aggregate, a
Material Adverse Effect on the Company. The Company has heretofore made
available to Parent true and complete copies of the Company Certificate and
bylaws of the Company as currently in effect.
     Section 4.02 Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and any Ancillary Document to which
the Company is a party and the consummation by the Company of the Merger and the
Transactions are within the Company’s corporate powers and, except for the
approval of the Merger (x) by the affirmative vote of the holders of a majority
of the outstanding shares of Common Stock in accordance with the terms of the
DGCL, the Company Certificate and the bylaws of the Company and (y) by netASPx
Holdings, Inc. in accordance with the terms of the Purchase Agreement, dated
May 6, 1999, as amended, by and among the Company and certain stockholders of
the Company named therein (collectively, the “Requisite Stockholder Approval”),
have been duly authorized by all necessary corporate action on the part of the
Company. The Requisite Stockholder Approval is the only vote of the holders of
any of the Company’s capital stock necessary in connection with the consummation
of the Merger and the Transactions. This Agreement constitutes a valid and

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legally binding agreement of the Company, enforceable in accordance with its
terms and conditions, subject to Applicable Laws of general application relating
to public policy, bankruptcy, insolvency and the relief of debtors and
Applicable Laws governing specific performance, injunctive relief and other
equitable remedies.
     Section 4.03 Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 60,000,000 shares of Common Stock, of which
there were 47,818,220 shares of Common Stock issued and outstanding. All
outstanding shares of Common Stock of the Company are duly authorized, validly
issued, fully paid and nonassessable. The Company does not have any outstanding
bonds, debentures, notes or other obligations, the holders of which have the
right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the Company Stockholders on any matter, and
except as set forth on Schedule 4.03 of the Company Disclosure Schedules, there
are no options, warrants, or other rights (including preemptive rights) or
agreements, arrangements, or commitments of any character, whether or not
contingent, relating to issued or unissued Common Stock or obligating the
Company to issue, redeem, repurchase or otherwise acquire any share of Common
Stock, or other equity interest in, the Company. Schedule 4.03 of the Company
Disclosure Schedules sets forth, as of the date hereof, each of the Company
Stockholders and the number of shares of Common Stock owned by, and the number
of shares of Common Stock subject to Options and Warrants owned by, such Company
Stockholder and the exercise price per share of any such Options or Warrants. No
Subsidiary of the Company owns any shares of Common Stock of the Company. The
per share exercise price of each Option was equal to or greater than the fair
market value of one share of Common Stock on the grant date of such Option.
     Section 4.04 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and any Ancillary Document to which
the Company is party and the consummation by the Company of the Merger and the
Transactions require no action by or in respect of, or filing with, any
Governmental Body, other than (i) the filing of the Certificate of Merger with
the Delaware Secretary of State pursuant to the DGCL, (ii) compliance with any
applicable requirements of the HSR Act, (iii) compliance with any applicable
requirements of any applicable securities laws, whether federal, state or
foreign and, (iv) any actions or filings the absence of which would not have,
individually or in the aggregate, a Material Adverse Effect on the Company or
materially impair the ability of the Company to consummate the Merger and the
Transactions.
     Section 4.05 Noncontravention. Assuming that all filings, registrations,
Permits, authorizations, consents and approvals contemplated by Section 4.04
have been duly made or obtained, as applicable, neither the execution and
delivery of this Agreement or any other Ancillary Document to which the Company
is party, nor the consummation of the Merger and the Transactions through the
Effective Time, will (i) assuming the Requisite Stockholder Approval is
obtained, violate any provision of the charter, bylaws or other governing
documents of the Company or any of its Subsidiaries, (ii) assuming the approvals
set forth on Schedule 4.05 of the Company Disclosure Schedules are obtained,
result in a material violation or material breach of, or constitute (with or
without due notice or lapse of time or both) a material default (or give rise to
any material right of termination, amendment, cancellation or acceleration)
under any of the terms of any note, bond, mortgage, indenture, license,
contract, lease, or other instrument or obligation to which the Company or any
of its Subsidiaries is a party (or result in the

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imposition of any Encumbrance (other than Permitted Encumbrances) upon any of
its assets) or (iii) violate any Applicable Law or Order applicable to the
Company or any of its Subsidiaries; other than in the case of (iii) above, any
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or notice that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company.
     Section 4.06 Subsidiaries.
          (a) Each Subsidiary of the Company is duly formed, validly existing
and, to the extent applicable, in good standing under the laws of its
jurisdiction of formation. Each such Subsidiary is duly qualified to do business
as a foreign company and is in good standing in each other jurisdiction where
the transaction of its business requires such qualification, except where the
lack of such qualification would not have, individually or in the aggregate, a
Material Adverse Effect on the Company. All Subsidiaries of the Company, the
Company’s ownership interests therein, and their respective jurisdictions of
formation are identified in Schedule 4.06(a) of the Company Disclosure
Schedules.
          (b) Except as set forth on Schedule 4.06(b) of the Company Disclosure
Schedules, all of the outstanding capital stock of, or other voting securities
or ownership interests in, each Subsidiary of the Company is owned by the
Company or by one of its Subsidiaries, free and clear of any Encumbrance (other
than Permitted Encumbrances). Except as set forth on Schedule 4.06(b) of the
Company Disclosure Schedules, there are no outstanding (i) securities of the
Company or any of its Subsidiaries convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any
Subsidiary of the Company or (ii) options or other rights to acquire from the
Company or any of its Subsidiaries, or other obligation of the Company or any of
its Subsidiaries to issue, any capital stock or other voting securities or
ownership interests in, or any securities convertible into or exchangeable for
any capital stock or other voting securities or ownership interests in, any of
its Subsidiaries (the items in clauses (i) and (ii) being referred to
collectively as the “Company Subsidiary Securities”). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Subsidiary Securities.
          (c) Other than the Subsidiaries of the Company, neither the Company
nor any Subsidiary of the Company owns, directly or indirectly, any shares of
capital stock or other equity or ownership interests in, any other Person
(collectively, “Third Party Interests”). Neither the Company nor any Subsidiary
of the Company has any rights to, or is bound by any commitment or obligation
to, acquire by any means, directly or indirectly, any Third Party Interests or
to make any investment in, or contribution or advance to, any Person.
     Section 4.07 Financial Statements.
          (a) Attached to Schedule 4.07(a) of the Company Disclosure Schedules
are true and correct copies of (i) the audited consolidated balance sheet as of
December 31, 2006 and the related audited consolidated statements of income and
cash flows for the year ended December 31, 2006 and (ii) the unaudited interim
consolidated balance sheet (the “Company Balance Sheet”) as of July 31, 2007
(the “Company Balance Sheet Date”) and the related unaudited interim
consolidated statements of income and cash flows for the seven (7) month

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period ended July 31, 2007 of the Company and its Subsidiaries (collectively,
the “Company Financial Statements”).
          (b) Except as indicated on Schedule 4.07(b) of the Company Disclosure
Schedules or in the Company Financial Statements (including any notes thereto),
the Company Financial Statements were prepared in accordance with GAAP as of the
dates or during the periods covered thereby (except, in the case of unaudited
statements, for the absence of footnotes thereto and normal year end
adjustments) and, in the case of any balance sheet included in the Company
Financial Statements, fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the date thereof
and, in the case of any income statement or statement of cash flows included in
the Company Financial Statements, fairly present in all material respects the
consolidated results of operations or cash flows, as applicable, of the Company
and its Subsidiaries for the periods then ended (subject, in the case of any
unaudited Company Financial Statements, to the absence of footnotes thereto and
normal year-end adjustments).
     Section 4.08 Events Subsequent.
          (a) Except as set forth in Schedule 4.08, since the Company Balance
Sheet Date through the date hereof, there has not been any Material Adverse
Effect on the Company, and, except for the Transactions, the Company and its
Subsidiaries have been operated only in the Ordinary Course of Business.
          (b) Except as set forth in Schedule 4.08, since the Company Balance
Sheet Date through the date hereof, there has not been any;
               (i) damage, destruction or other casualty, whether or not covered
by insurance, materially affecting the Company and its Subsidiaries or any
assets material to the business owned, held or used by the Company and its
Subsidiaries;
               (ii) transaction or commitment made, or Contract entered into, by
the Company or any Subsidiary, or termination or amendment by the Company or any
Subsidiary of any Contract, in either case, which is material to the Company and
its Subsidiaries, other than transactions, commitments, Contracts, terminations
or amendments made in the Ordinary Course of Business;
               (iii) sale or other disposition of assets that are owned, held or
used by the Company or any Subsidiary other than in the Ordinary Course of
Business;
               (iv) cancellation, compromise, settlement, waiver or release by
the Company or any Subsidiary (x) other than in the Ordinary Course of Business
of any Proceeding (or a series of related Proceedings) or (y) involving an
amount in excess of Fifty Thousand Dollars ($50,000) in the aggregate;
               (v) (A) increase in the compensation or fringe benefits of any
present or former director, officer, employee or consultant of the Company or
any Subsidiary (except for increases in salary or wages in the Ordinary Course
of Business), (B) grant of any severance or termination pay to any present or
former director, officer or employee of the Company or any

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Subsidiary, (C) establishment, adoption, entrance into, amendment or termination
of any Employee Plan or collective bargaining agreement (other than as may be
required by the terms of an existing Employee Plan or collective bargaining
agreement, or as may be required by Applicable Law or in order to maintain its
qualification under Section 401 and 501 of the Code or to provide for the
effects of Section 409A of the Code), or (D) grant of any equity or equity-based
awards, in the case of each of clauses (A), (B), (C) or (D) above, other than in
the Ordinary Course of Business or as may be required under Applicable Law;
               (vi) action taken by the Company or any Subsidiary during the
period from July 31, 2007 through the date of this Agreement that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 6.02; or
               (vii) agreement, whether in writing or otherwise, to do any of
the foregoing.
     Section 4.09 No Undisclosed Liabilities. There are no liabilities or
obligations of the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
other than (i) the liabilities, obligations, conditions or circumstances
disclosed and provided for in the Company Balance Sheet, (ii) the liabilities,
obligations, conditions or circumstances, which are of a nature that are not
required by GAAP to be reflected in the Company Financial Statements,
(iii) liabilities or obligations incurred or arising in the Ordinary Course of
Business since the Company Balance Sheet Date or in connection with the
consummation of Transactions, (iv) the liabilities, obligations, conditions or
circumstances which are of a subject matter covered by any of the other
representations and warranties of the Company set forth in this Agreement,
(v) the liabilities or obligations disclosed in Schedule 4.09 of the Company
Disclosure Schedules or (vi) any other liabilities or obligations, which
individually or in the aggregate would not reasonably be expected to be material
to the Company. Neither the Company nor any of its Subsidiaries has entered into
any off-balance sheet financing or has any off-balance sheet indebtedness for
borrowed money through a special purpose vehicle or otherwise. Schedule 4.09 of
the Company Disclosure Schedules sets forth a list of all of the operating
leases to which the Company or any of its Subsidiaries is a party.
     Section 4.10 Taxes.
          (a) The Company and each of its Subsidiaries have filed (or have had
filed on their behalf) all Tax Returns required to have been filed, except for
Tax Returns the non-filing of which would not have, individually or in the
aggregate, a Material Adverse Effect on the Company. The Company and its
Subsidiaries have not requested or obtained any extension of time within which
to file any Tax Return, which Tax Return has not since been filed. All Taxes
required to have been paid by the Company and its Subsidiaries (whether or not
shown on any Tax Return) have been paid or are currently being disputed in good
faith and have been fully reserved against in the Company Financial Statements.
          (b) There is no audit or other proceeding presently pending or, to the
Knowledge of the Company, Threatened with regard to any Tax matter concerning
the Company and its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received a written ruling from any Taxing Authority relating to
any Tax or entered into a written agreement with a

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Taxing Authority relating to any Tax that would have continuing effect with
respect to any taxable period for which the Company or any of its Subsidiaries,
respectively, has not filed a Tax Return, and there are no requests for issuance
of such a ruling pending on behalf of the Company or any of its Subsidiaries.
          (c) Neither the Company nor any of its Subsidiaries, nor any person on
behalf of the Company or its Subsidiaries, has waived any statute of limitations
or agreed to any extension of time that has continuing effect with respect to
assessment or collection of any Tax for which the Company or its Subsidiaries
may be held liable.
          (d) Except as set forth on Schedule 4.10(d) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries is a party to any
contract or arrangement covering any current or former employee or consultant of
the Company or any of its Subsidiaries that would require it to make or give
rise to any payment in connection with the Merger and the Transactions that
would constitute an “excess parachute payment” within the meaning of
Section 280G of the Code. Schedule 1.01 lists all bonuses payable to current and
former employees and consultants of the Company and each of its Subsidiaries as
a result of the consummation of the Merger.
          (e) Neither the Company nor any of the Subsidiaries has made or agreed
to make, or is required to make, any change in method of accounting which would
require it to make any material positive adjustment to its taxable income
pursuant to Section 481(a) of the Code (or any similar provision) in any taxable
period for which the Company or any Subsidiary has not filed a Tax Return, and
no application is pending with any Taxing Authority requesting permission for
the Company or any of its Subsidiaries to make any change in any accounting
method which would require such an adjustment, nor has the Company or any of its
Subsidiaries received any written notice that a Taxing Authority proposes to
require a change in method of accounting that would require such an adjustment.
          (f) Neither the Company nor any of its Subsidiaries has been a party
to any Tax allocation, Tax sharing or similar agreement or arrangement the
principal purpose of which is or was the allocation of Tax liabilities computed
on a consolidated, combined, unitary or similar basis (a “Group Return”) among
entities that have been or will be required to compute their Tax liability by
filing on such a basis. Neither the Company nor any of its Subsidiaries (i) has
been a member of an “affiliated group” (within the meaning of Section 1504 of
the Code) filing a consolidated federal income Tax Return, or included or
required to be included in any other group of entities filing or required to
file any other type of Group Return, other than a group of which the Company is
the common parent, that would cause the Company or any of its Subsidiaries to be
liable for Taxes under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), or (ii) is liable for Taxes of
another Person having liability on the basis described in (i) either by contract
or by reason of being a transferee or successor of such a Person.
          (g) Neither the Company nor any of its Subsidiaries has any deferred
income for Tax purposes the recognition of which would give rise to a material
Tax liability of the Company or any of its Subsidiaries that is attributable to
(i) any intercompany transaction (as defined in Treasury
Regulation Section 1.1502-13), or (ii) the disposal of any property in a

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transaction accounted for under the installment method pursuant to Section 453
of the Code, except to the extent, in either case, reserved for in the Company
Financial Statements.
          (h) Neither the Company nor any of its Subsidiaries has, in the two
(2) years preceding the date of this Agreement, constituted (or has been
included, or is required to be included, in a Tax Return for a group of entities
filing income Tax Returns on a consolidated, combined, unitary or similar basis
during a taxable period that included another corporation which constituted
during such taxable period) either a “distributing corporation” or a “controlled
corporation” within the meaning of Section 355(a)(1)(A) of the Code in a
distribution qualifying (or intended to qualify) under Section 355 of the Code
(or so much of Section 356 as relates to Section 355).
          (i) Schedule 4.10(i) of the Company Disclosure Schedules identifies
all material Tax Returns that each of the Company and its Subsidiaries has filed
for taxable periods ending after December 31, 2003 and the taxable period
covered by each such Tax Return, and identifies those Tax Returns or periods
that have been audited by a Taxing Authority. The Company has made available to
Parent complete and accurate copies of all of the following materials: (i) all
income Tax Returns filed by or with respect to the Company and its Subsidiaries
that relate to taxable periods ending after December 31, 2003, (ii) all
examination reports relating to Taxes of the Company and its Subsidiaries issued
after December 31, 2003, and (iii) all statements of Taxes assessed after
December 31, 2003, against the Company and its Subsidiaries in excess of amounts
shown on Tax Returns filed for the relevant taxable period before such
assessment.
          (j) Neither the Company nor any Subsidiary is a party to, is bound by,
or has any obligation under, any Tax indemnification agreement or similar
contract or arrangement which obligates the Company or any Subsidiary to make
payments to another person determined with respect to Tax obligations of such
person (other than, pursuant to contracts that do not have a principal purpose
to provide indemnification for Tax obligations and in which such Tax-related
obligations are customarily included in commercial agreements of a similar
character).
     Section 4.11 Properties.
          (a) Neither the Company nor any of its Subsidiaries own any Real
Property.
          (b) Schedule 4.11(b) of the Company Disclosure Schedules lists the
addresses of all Real Property leased (the “Leased Real Property”) by the
Company or any of its Subsidiaries as of the date hereof and lists each lease
agreement to which the Company or any of its Subsidiaries is a party with
respect to the Leased Real Property (each, a “Lease”). The Company has made
available to Parent copies of all of the Leases, and all written modifications,
amendments and supplements thereto which copies are true and complete in all
material respects. Except as disclosed on Schedule 4.11(b) of the Company
Disclosure Schedules:
               (i) each of the Leases was made in the Ordinary Course of
Business and is valid, binding and currently in full force and effect;

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               (ii) to the Knowledge of the Company, no material default or
material preemptive right by any landlord under any Lease, after applicable
grace periods, if any, exists as of the date hereof;
               (iii) the Company has not received any written notice alleging a
material default by the Company or any of its Subsidiaries under any Lease and
(A) there are no material defaults by the Company or any of its Subsidiaries
under any Lease that would entitle a landlord thereunder to terminate such
Lease, and (B) to the Knowledge of the Company, no event has occurred which,
through the passage of time or the giving of notice, or both, would constitute a
material default by the Company or any of its Subsidiaries;
               (iv) neither the Company nor any of its Subsidiaries is obligated
to pay any leasing or brokerage commission relating to any Lease or upon the
renewal of any Lease; and
               (v) no construction, alteration or other leasehold improvement
work with respect to any of the Leases remains to be paid for or to be performed
by the Company or any of its Subsidiaries.
          (c) Schedule 4.11(c) of the Company Disclosure Schedules attached
hereto sets forth a true, correct and complete list of all items of tangible
personal property owned by the Company or any of its Subsidiaries as of the date
hereof having either a net book value per unit or an estimated book value per
unit in excess of Five Thousand Dollars ($5,000); or not owned by the Company or
any of its Subsidiaries but in the possession of or used or useful in the
business of the Company or any of its Subsidiaries and having rental payments
therefor in excess of One Thousand Dollars ($1,000) per month or Twelve Thousand
Dollars ($12,000) per year (collectively, the “Personal Property”). The Company
and each of its Subsidiaries have good and marketable title to, or a valid
leasehold interest in, all of their Personal Property and assets shown on the
Company Balance Sheet or acquired by any of them after the date of the Company
Balance Sheet, free and clear of any Encumbrances, except for (i) assets which
have been disposed of since the date of the Company Balance Sheet in the
Ordinary Course of Business, (ii) Encumbrances reflected in the Company Balance
Sheet, (iii) Encumbrances related to the Lender Debt, all of which will be
released or extinguished as of the Effective Time, and (iv) Permitted
Encumbrances or other Encumbrances which would not have, individually or in the
aggregate, a Material Adverse Effect on the Company.
          (d) The continued use, occupancy and operation of the Leased Real
Property as currently used, occupied and operated by the Company or any of its
Subsidiaries, do not, to the Knowledge of the Company, violate any material
applicable building, zoning, subdivision, other land use and similar laws,
regulations and ordinances or any material license, franchise, permit,
certificate, approval or other similar authorization of a Governmental Body.
          (e) No representation or warranty is made in this Section 4.11 with
respect to any Company Intellectual Property that is the subject of
Section 4.12.
     Section 4.12 Intellectual Property. Schedule 4.12 of the Company Disclosure
Schedules hereto contains a correct and complete list of all issued patents,
registered trademarks

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and registered copyrights and pending applications for patents, trademarks and
copyrights owned by (as opposed to licensed to) the Company or any of its
Subsidiaries and all material agreements (“Material IP Agreements”) pursuant to
which the Company or any of its Subsidiaries has received a license or
sub-license with respect to any material item of Intellectual Property
(excluding any off-the-shelf software products). Except as set forth in
Schedule 4.12 of the Company Disclosure Schedules, (i) each of the Company and
its Subsidiaries owns or has the right to use all Intellectual Property material
to or necessary for the operation of the business of the Company and its
Subsidiaries (the “Company Intellectual Property”), (ii) to the Knowledge of the
Company, no Person is infringing, misappropriating or diluting any material
items of Company Intellectual Property owned by the Company, (iii) none of the
material items of Company Intellectual Property owned by the Company has been
misappropriated or is infringing upon the Intellectual Property of any Third
Party, (iv) all of the Material IP Agreements are valid, binding and currently
in full force and effect, (v) neither the Company nor any of its Subsidiaries is
in material default under any Material IP Agreement, and (vi) immediately after
the Closing and to the Knowledge of the Company, the Company Intellectual
Property will be owned by or available for use by the Company and its
Subsidiaries on terms and conditions substantially identical to those under
which the Company and its Subsidiaries owned or used the Company Intellectual
Property immediately prior to the Closing. The Company and its Subsidiaries have
taken all material steps customary and reasonable in their industries to protect
and preserve the confidential nature of all Confidential Information of the
Company or its Subsidiaries.
     Section 4.13 Contracts.
          (a) Schedule 4.13(a) of the Company Disclosure Schedules lists all of
the following written Contracts to which the Company or any of its Subsidiaries
is a party (other than Leases): (i) any Contract the performance of which
requires payment by or to the Company or any of its Subsidiaries in excess of
Fifty Thousand Dollars ($50,000), (ii) any Contract concerning the establishment
by the Company or any Subsidiary of a partnership, joint venture or similar
arrangement, including any Subsidiary, and any Contract between the Company or
any Subsidiary of the Company, on the one hand, and any Subsidiary of the
Company on the other hand, (iii) any Contract containing a non-competition,
non-solicitation or similar covenant which restricts the Company’s operations in
any geographic area, in any line of business or with any Third Party, (iv) any
Contract for the acquisition of capital stock or all or substantially all assets
of another Person or a division thereof (whether by merger, stock or asset
purchase), (v) any Contract regarding dispositions of any assets of the Company
or any Subsidiary other than the sale of inventory in the Ordinary Course of
Business or with a value less than Fifty Thousand Dollars ($50,000), (vi) any
employment agreements or employment-related agreements with any employee that
results in any severance pay or the acceleration or triggering of benefits or
rights thereunder as a result of the transactions contemplated by this
Agreement, and (vii) any Contract involving any resolution or settlement of any
actual or threatened Proceeding with a value of greater than Fifty Thousand
Dollars ($50,000). All of the Contracts required to be listed in
Schedule 4.13(a) of the Company Disclosure Schedules hereto are referred to in
this Agreement as the “Material Contracts.” The Company has made available to
Parent a correct and complete copy of each Material Contract which copies are
true and complete in all material respects.

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          (b) All of the Material Contracts are valid, binding and currently in
full force and effect. Neither the Company nor any of its Subsidiaries is in
material default under any of the Material Contracts, and, to the Knowledge of
the Company, no event has occurred which, through the passage of time or the
giving of notice, or both, would constitute a default by the Company or any of
its Subsidiaries or give rise to a right of termination or cancellation by
another party under any of the Material Contracts. To the Knowledge of the
Company, no other Person is in default under any of the Material Contracts.
Except as described in Schedule 4.13(a) of the Company Disclosure Schedules
hereto, none of the Material Contracts has been cancelled, terminated, amended
or modified. Except as set forth in Schedule 4.05 of the Company Disclosure
Schedules, neither the execution and delivery of this Agreement by the Company,
the performance by it of its obligations hereunder, nor the consummation by it
of the transactions contemplated hereby, will require any consent of any party
or written notice to any party, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default), or give rise to
any right of termination, change of control rights, cancellation, modification,
revocation or acceleration of any right or obligation of the Company or any of
its Subsidiaries.
     Section 4.14 Legal Compliance. Except as set forth in Schedule 4.14 of the
Company Disclosure Schedules, the Company and each of its Subsidiaries have
complied with all Applicable Laws and Orders of any Governmental Body except
where the failure to comply would not have a Material Adverse Effect on the
Company. Except as set forth in Schedule 4.14 of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries has received any
written notice of, and the Company has no Knowledge of, any violation of a
material nature of any Applicable Laws and/or Orders applicable to the Company
or any of its Subsidiaries. None of the Company nor any of its Subsidiaries has
outstanding securities that are required to be registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
     Section 4.15 Proceedings and Orders. Except as set forth in Schedule 4.15
of the Company Disclosure Schedules, neither the Company nor any of its
Subsidiaries (i) are subject to or affected by any outstanding Order, or
(ii) are parties to any pending Proceeding or, to the Knowledge of the Company,
Threatened Proceeding, which, in each case, is material to the Company.
     Section 4.16 Labor Matters. Except as set forth on Schedule 4.16 of the
Company Disclosure Schedules, the Company and its Subsidiaries are in compliance
with all Applicable Laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and are not engaged in any
unfair labor practice, failure to comply with which or engagement in which, as
the case may be, would have a Material Adverse Effect on the Company. There is
no unfair labor practice complaint pending or, to the Knowledge of the Company,
Threatened against the Company or any of its Subsidiaries before the National
Labor Relations Board. Schedule 4.16 of the Company Disclosure Schedules
contains a list of all employees of the Company and each Subsidiary as of the
date hereof whose annual rate of compensation exceeds $50,000 per year, along
with the position and the annual rate of compensation of each such person. Each
such employee has entered into an Employee Agreement containing confidentiality,
assignment of inventions and non-solicitation provisions with the Company or a
Subsidiary, a form of which has previously been delivered to the Buyer.

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To the Knowledge of the Company, prior to the date hereof, no key employee or
group of employees has notified the Company in writing that he or she intends to
terminate employment with the Company or any Subsidiary as a result of the
Merger. Neither the Company nor any Subsidiary is a party to or bound by any
collective bargaining agreement, nor has any of them experienced any strikes,
grievances, claims of unfair labor practices or other collective bargaining
disputes. The Company has no Knowledge of any organizational effort made or
Threatened, either currently or within the past two years, by or on behalf of
any labor union with respect to employees of the Company or any Subsidiary.
Except as set forth in Schedule 4.16 of the Company Disclosure Schedules, during
the past three years, neither the Company nor any of its Subsidiaries have
effectuated (i) a “plant closing” (as defined in the WARN Act) affecting any
site of employment or one or more facilities or operating units within any site
of employment or facility of the Company or its Subsidiaries; or (ii) a “mass
layoff” (as defined in the WARN Act) affecting any site of employment or
facility of the Company or its Subsidiaries; nor has the Company or its
Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state, local or foreign Law. Except as set forth in Schedule 4.16 of the
Company Disclosure Schedules, the employees of the Company or its Subsidiaries
have not suffered an “employment loss” (as defined in the WARN Act) since three
months prior to the date of this Agreement. The Company and its Subsidiaries
have at all times and in all material respects properly classified each of their
respective employees as employees and each of their independent contractors as
independent contractors, as applicable, and no written indication has been
received by the Company from any Governmental Authority that such contractors
would be considered employees for employment law or tax purposes at any time.
The Company and its Subsidiaries have at all times and in all material respects
paid their respective employees in conformance with applicable federal, state,
local and foreign wage and hour laws. There are not presently pending, or the
Knowledge of the Company Threatened, any claims with respect to working hours or
the payment of wages, overtime or any other form of employee compensation.
     Section 4.17 Employee Benefit Plans.
          (a) Schedule 4.17(a) of the Company Disclosure Schedules contains a
correct and complete list identifying each Employee Benefit Plan and each other
material employment, severance or similar contract with respect to which the
Company or any of its Subsidiaries has any liability. Copies of such plans (and,
if applicable, related trust or funding agreements or insurance policies) and
all amendments thereto and all current summary plan descriptions and summaries
of material modifications have been made available for review by Parent together
with the most recent annual report (Form 5500 including any applicable schedules
and attachments thereto) prepared in connection with any such plan or trust.
          (b) Neither the Company nor any ERISA Affiliate sponsors, maintains or
contributes to, or has, in the past six (6) years, sponsored, maintained or
contributed to, any Employee Benefit Plan subject to Title IV of ERISA or that
is a “multiemployer plan” (within the meaning of Section 3(37) of ERISA).
          (c) Each Employee Benefit Plan which is intended to be qualified under
Section 401(a) of the Code is the subject of a favorable determination letter
from the Internal Revenue Service (“IRS”), or the plan sponsor is entitled to
rely on a favorable advisory or

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opinion letter issued with respect to such plan document in accordance with IRS
Announcement 2001-77. Each Employee Benefit Plan has been maintained in material
compliance with its terms and with Applicable Law, and all contributions
required to be made under each Employee Benefit Plan have been made or accrued
in accordance with past custom and practice.
          (d) Except as otherwise provided in this Agreement or set forth in
Schedule 4.17(d) of the Company Disclosure Schedules, the consummation of the
Merger and the Transactions will not by itself entitle any employee or
independent contractor of the Company or any of its Subsidiaries to any material
severance pay or material acceleration of the time of payment or vesting or
trigger any payment of funding (through a grantor trust or otherwise) of
material compensation or benefits under, increase the amount payable or trigger
any other material obligation pursuant to, any Employee Benefit Plan.
          (e) Except as set forth in Schedule 4.17(e) of the Company Disclosure
Schedules, no Employee Benefit Plan provides post-retirement health, medical or
life insurance benefits for retired, former or current employees of the Company
or its ERISA Affiliates.
          (f) Except as set forth in Schedule 4.17(f) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries is a party to or
subject to, or is currently negotiating in connection with entering into, any
collective bargaining agreement or other contract or understanding with a labor
union or organization.
          (g) Excluding routine claims for benefits, there is no action, suit,
audit, proceeding or, to the Knowledge of the Company, investigation pending
against or involving or, to the Knowledge of the Company, Threatened against or
involving any Employee Benefit Plan before any court or arbitrator or any
Governmental Body, or state, federal or local official.
     Section 4.18 Environmental Matters. Except as set forth in Schedule 4.18 of
the Company Disclosure Schedules, to the Knowledge of the Company, (i) the
Company and its Subsidiaries have transported, stored, and/or disposed of any
Hazardous Materials handled by the Company and its Subsidiaries in compliance in
all material respects with all Environmental Laws, (ii) the Company and its
Subsidiaries have operated their respective businesses with all material Permits
required under Environmental Law, (iii) the Company and its Subsidiaries have
not received any written notice of any investigation, Proceeding or Order
concerning any material Environmental Condition or material Environmental Claim,
and (iv) no asbestos, polychlorinated biphenyls or urea formaldehyde in amounts
or conditions in violation of Environmental Law has been placed, stored or
located on the Leased Real Property. To the Company’s Knowledge, there have been
no Releases of any Hazardous Materials into the Environment by the Company or
any of its Subsidiaries, or, with respect to any such Releases of Hazardous
Materials, the Company or such Subsidiary has given all required notices to
Governmental Bodies (copies of which have been provided to Parent).
     Section 4.19 Insurance. Schedule 4.19 of the Company Disclosure Schedules
sets forth a true, correct and complete list of all fire, theft, casualty,
general liability, workers compensation, business interruption, environmental
impairment, product liability, automobile and other insurance policies
(excluding any insurance policies relating to any Employee Benefit Plan)
maintained by the Company or any of its Subsidiaries, specifying the insurer and
the

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effective date of each such policy (collectively, the “Insurance Policies”) and
all claims made under such Insurance Policies since January 1, 2004. True,
correct and complete copies of all Insurance Policies have been previously
delivered, or will be delivered or made available prior to Closing, by the
Company to Parent. All premiums due on the Insurance Policies or renewals
thereof have been paid, and there is no default under the Insurance Policies.
Except as set forth on Schedule 4.19 of the Company Disclosure Schedules,
neither the Company nor any of the Subsidiaries has any material outstanding
claims or any material dispute with any insurance carrier regarding claims,
settlements or premiums. To the Knowledge of the Company, each such policy will
continue to be enforceable and in full force and effect immediately following
the Closing in accordance with the terms thereof as in effect immediately prior
to the Closing.
     Section 4.20 Affiliate Transactions. Except (i) as set forth in
Schedule 4.20 of the Company Disclosure Schedules and (ii) for any arrangements,
relationships or interests that will not continue after the Closing (including
the Common Stock, Options and/or Warrants owned by any Company Stockholder), no
Company Stockholder and no Affiliate of any Company Stockholder or of the
Company or its Subsidiaries has, or has had since the Company Balance Sheet
Date, any (A) material business arrangement or relationship with the Company or
any of its Subsidiaries, or (B) interest in any material asset, real or
personal, tangible or intangible, of the Company or any of its Subsidiaries.
Since the Company Balance Sheet Date, through the date hereof, there has been no
material change in the intercompany agreements between the Company or its
Subsidiaries, on the one hand, and any of their Affiliates, on the other hand.
There are no assets owned by any Affiliate of the Company or its Subsidiaries
that are used in the business of the Company and its Subsidiaries.
     Section 4.21 Brokers. Except as set forth in Schedule 4.21 of the Company
Disclosure Schedules, no broker, finder or investment banker (collectively, a
“Broker”) is entitled to any brokerage, finder’s or other fee or commission in
connection with the Merger and the Transactions based upon arrangements made by
or on behalf of the Company.
     Section 4.22 Customers and Suppliers. Schedule 4.22(a) of the Company
Disclosure Schedules sets forth a list of the Company’s top twenty
(20) customers and suppliers as of December 31, 2006 (determined by the amount
of total sales or purchases, as applicable). Except as set forth on
Schedule 4.22(b) of the Company Disclosure Schedules, no such customer or
supplier has indicated in writing to the Company or any Subsidiary within the
past year that it will stop, or decrease the rate of, buying products or
services or supplying products or services, as applicable. Schedule 4.22(b) of
the Company Disclosure Schedules sets forth a list of all material, unresolved
customer billing, service or warranty disputes pursued in writing by such
customers or suppliers.
     Section 4.23 Accounts Receivable. All accounts receivable of the Company
and the Subsidiaries reflected on the Company Balance Sheet were valid
receivables as of the date thereof, arising from sales actually made or services
actually provided, net of the applicable reserve for doubtful accounts on the
Company Balance Sheet or in the notes thereto. All such accounts receivable are
reflected on the Company Balance Sheet or in the notes thereto in accordance
with GAAP as of the date thereof. To the Company’s Knowledge, there is no
contest, counterclaim or right of setoff under any Contract with any obligor of
any such account receivable relating to the amount or validity of such account
receivable. No such obligor has

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been released in whole or in part by the Company from paying the full value of
its obligation to the Company and the Company has not agreed to do so. No such
account receivable has been subordinated or assigned by the Company and the
Company has not agreed to do so.
     Section 4.24 Permits. Schedule 4.24 of the Company Disclosure Schedules
sets forth a list of all Permits issued to or held by the Company or any
Subsidiary. Such listed Permits are the only Permits that are required for the
Company and the Subsidiaries to conduct their respective businesses as presently
conducted, except for those the absence of which would not have a Material
Adverse Effect on the Company and its Subsidiaries. Each such Permit is in full
force and effect and, to the Knowledge of the Company, no suspension or
cancellation of such Permit is Threatened. To the Knowledge of the Company, each
such Permit will continue in full force and effect immediately following the
Closing.
     Section 4.25 Purchase for Own Account; Accredited Investor. To the
Knowledge of the Company, each of the Company Stockholders is acquiring the
Stock Portion of the Merger Consideration pursuant to the terms and conditions
of this Agreement for its own account and for investment purposes only and not
with a view towards, and has no present intention, agreement or arrangement
regarding, the distribution, transfer, assignment, resale or subdivision of the
Stock Portion of the Merger Consideration. The Company has conducted and is
relying solely upon its own independent review and analysis of the businesses,
assets, condition, operations and prospects of Parent and acknowledges that it
has been provided access to the properties, premises and records of Parent and
its subsidiaries for this purpose. To the Knowledge of the Company, each of the
Company Stockholders listed on Schedule 4.25 of the Company Disclosure Schedules
is experienced in investment matters, fully understands the Merger and the
Transactions, has the knowledge and experience in financial matters as to be
capable of evaluating the merits and risks of its investment in the Stock
Portion of the Merger Consideration and has the financial ability and resources
to bear the economic risks of its investment in the Stock Portion of the Merger
Consideration. To the Knowledge of the Company, each of the Company Stockholders
listed on Schedule 4.25 of the Company Disclosure Schedules is an “Accredited
Investor” as that term is defined in Rule 501 of Regulation D of the Securities
Act of 1933 (the “Securities Act”).
     Section 4.26 Disclaimer of Other Representations and Warranties. Except as
expressly set forth in Article 4 or in the Company Disclosure Schedules or any
certificate furnished or to be furnished to Parent pursuant hereto, neither the
Company nor any of its Affiliates nor any Person acting on their behalf makes,
or shall be deemed to have made, any representation or warranty, express or
implied, relating to the Company, its Subsidiaries, the Company’s business or
any other matter, including any representation or warranty as to
merchantability, habitability, workmanship, profitability, future performance,
fitness for a particular purpose or non-infringement, whether or not contained
in any document or other communication provided or otherwise made available to
Parent or any Person acting on behalf of Parent during the course of due
diligence or otherwise (including, without limitation, in any management
presentations, information or offering memorandum, supplemental information,
data room, estimate, projection, forecast, budget or other forward-looking
information or other materials or information with respect to any of the above).

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
     Except as set forth in the disclosure schedules delivered by Parent to the
Company on the date hereof (the “Parent Disclosure Schedules”), each of Parent
and Merger Sub represents and warrants as of the date hereof to the Company as
follows:
     Section 5.01 Corporate Existence and Power. Each of Parent, Merger Sub and
each of Parent’s Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of incorporation. Each
of Parent, Merger Sub and each of Parent’s Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each other
jurisdiction where the transaction of its business requires such qualification,
except where the lack of such qualification would not have, individually or in
the aggregate, a Material Adverse Effect on Parent, Merger Sub or any of
Parent’s Subsidiaries, as applicable. Parent has heretofore delivered to the
Company true and complete copies of the certificates of incorporation and bylaws
of Parent, Merger Sub and each of Parent’s Subsidiaries as currently in effect.
     Section 5.02 Ownership of Merger Sub; No Prior Activities. Merger Sub is a
direct, wholly-owned subsidiary of Parent, was formed solely for the purpose of
engaging in the Merger and the Transactions and has engaged in no business
activity other than as contemplated by this Agreement. Except for obligations or
liabilities incurred in connection with its incorporation, the Merger and the
Transactions, Merger Sub has not incurred, and will not incur, directly or
indirectly, through any Subsidiary or Affiliate, any obligations or liabilities
and has not engaged in, and will not engage in, any business activities of any
type or kind whatsoever or entered into any agreements or arrangements with any
Person.
     Section 5.03 Corporate Authorization. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement and any Ancillary
Documents to which either is a party and the consummation by each of Parent and
Merger Sub of the Merger and the Transactions are within its corporate powers
and have been duly authorized by all necessary corporate action on the part of
each of Parent and Merger Sub. This Agreement constitutes a valid and legally
binding agreement of each of Parent and Merger Sub, enforceable in accordance
with its terms and conditions, subject to Applicable Laws of general application
relating to public policy, bankruptcy, insolvency and the relief of debtors and
Applicable Laws governing specific performance, injunctive relief and other
equitable remedies.
     Section 5.04 Governmental Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and any Ancillary
Document to which either is a party and the consummation by Parent and Merger
Sub of the Merger and the Transactions require no action by or in respect of, or
filing with, any Governmental Body, other than (i) the filing of the Certificate
of Merger and the Certificate of Designations with the Delaware Secretary of
State pursuant to the DGCL, (ii) compliance with any applicable requirements of
the HSR Act and (iii) compliance with any applicable requirements of any
applicable securities laws, whether federal, state or foreign.
     Section 5.05 Noncontravention. Except for the consents, approvals,
authorizations, permits and Material Contracts described in Schedule 5.05 of the
Parent Disclosure Schedules,

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neither the execution and delivery of this Agreement, nor the consummation of
the Merger and the Transactions, will (i) violate any provision of the charter,
bylaws or other governing documents of each of Parent, Merger Sub or any of
Parent’s Subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under any of
the terms of any note, bond, mortgage, indenture, license, contract, lease, or
other instrument or obligation to which Parent, Merger Sub or any of Parent’s
Subsidiaries is a party (or result in the imposition of any Encumbrance (other
than Permitted Encumbrances) upon assets of Parent, Merger Sub or any of
Parent’s Subsidiaries), or (iii) violate any Applicable Law or any Order of any
Governmental Body applicable to Parent, Merger Sub or any of Parent’s
Subsidiaries.
     Section 5.06 Proceedings and Orders. Except as set forth in Schedule 5.06
of the Parent Disclosure Schedules, none of Parent, Merger Sub nor any of
Parent’s Subsidiaries (i) is subject to or affected by any outstanding Order, or
(ii) is a party to any pending Proceeding or, to the Knowledge of Parent,
Threatened Proceeding, which would, in each case, be material to Parent or
prohibit or materially impair Parent’s and Merger Sub’s ability to perform their
obligations under this Agreement or to complete the Merger or the Transactions
in accordance with the terms of this Agreement and the Ancillary Documents.
     Section 5.07 Financing. Parent has available, and on the Closing Date will
have available, sufficient funds, available lines of credit or other sources of
immediately available funds to enable Parent, Merger Sub and the Surviving
Corporation to pay the Merger Consideration, the Payoff Amount and all of its
fees and expenses related to the Transactions. Section 5.07 of the Parent
Disclosure Schedules sets forth true, accurate and complete copies of an
executed Credit Agreement between Parent, Merger Sub and Canadian Imperial Bank
of Commerce (the “Parent Lender”) (as the same may be amended and replaced in
accordance with Section 6.08, the “Parent Credit Agreement”), pursuant to which,
and subject to the terms and conditions thereof, the Parent Lender has agreed to
lend the amount set forth therein to Parent and Merger Sub for the purpose of
funding the Merger Consideration, the Payoff Amount and of its fees and expenses
related to the Transactions (the “Financing”). The Parent Credit Agreement, in
the form so delivered, is a legal, valid and binding obligation of Parent and
Merger Sub and, to the knowledge of Parent, the other parties thereto. The
Parent Credit Agreement has not been amended, modified or terminated in any
respect. No event has occurred which, with or without notice, lapse of time or
both, would constitute a default or breach on the part of Parent or Merger Sub
under any term or condition of the Parent Credit Agreement. Neither Parent nor
Merger Sub has any reason to believe that it will be unable to satisfy on a
timely basis any term or condition of the Closing to be satisfied by it
contained in the Parent Credit Agreement. Parent or Merger Sub has fully paid
any and all commitment fees or other fees required by the Parent Credit
Agreement to be paid on or before the date of this Agreement. The Financing,
plus other cash available to Parent for purposes of the Merger and the
Transactions, is sufficient to pay the aggregate Merger Consideration, the
Payoff Amount and all of the Transaction Expenses of Parent and the Merger Sub
and to allow Parent and Merger Sub to perform all of their other obligations
under this Agreement and to consummate the Merger and the Transactions. There
are no contractual contingencies, side letters or similar arrangements under any
agreement relating to the Transactions to which Parent, Merger Sub or any of
their Affiliates is a party that would permit the Parent Lender to reduce the
total amount of the Financing or impose any additional condition precedent to
the availability of the Financing.

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     Section 5.08 Purchase for Own Account: Accredited Investor. Parent and
Merger Sub represent and warrant that each is acquiring the Shares pursuant to
the terms and conditions of this Agreement for their own account and for
investment purposes only and not with a view towards, and neither has any
present intention, agreement or arrangement regarding, the distribution,
transfer, assignment, resale or subdivision of the Shares. Parent and Merger Sub
have conducted and are relying solely upon their own independent review and
analysis of the businesses, assets, condition, operations and prospects of the
Company and its Subsidiaries and acknowledge that each has been provided access
to the properties, premises and records of the Company and its Subsidiaries for
this purpose. Parent and Merger Sub represent that each is experienced in
investment matters, fully understands the Merger and the Transactions, has the
knowledge and experience in financial matters as to be capable of evaluating the
merits and risks of its investment in the Shares and has the financial ability
and resources to bear the economic risks of its investment in the Shares. Parent
and Merger Sub represent that each is an “Accredited Investor” as that term is
defined in Rule 501 of Regulation D of the Securities Act.
     Section 5.09 Brokers. Except as set forth in Schedule 5.09 of the Parent
Disclosure Schedules, no Broker is entitled to any brokerage, finder’s or other
fee or commission in connection with the Merger and the Transactions based upon
arrangements made by or on behalf of Parent or Merger Sub.
     Section 5.10 Capitalization.
          (a) As of the date hereof, the authorized capital stock of Parent
consists of 395,000,000 shares of Parent Common Stock, of which there were
33,632,444 shares of Parent Common Stock issued and outstanding, and 5,000,000
shares of Parent Preferred Stock, none of which is outstanding and 5,000,000
shares of which is designated as Series A Convertible Preferred Stock (the
“Parent Series A Preferred Stock”). All outstanding shares of Parent Common
Stock and Parent Preferred Stock are duly authorized, validly issued, fully paid
and nonassessable. Parent does not have any outstanding bonds, debentures, notes
or other obligations, the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
Parent’s stockholders on any matter, and there are no options, warrants, or
other rights (including preemptive rights) or agreements, arrangements, or
commitments of any character, whether or not contingent, relating to issued or
unissued Parent Common Stock or Parent Preferred Stock or obligating Parent to
issue, redeem, repurchase or otherwise acquire any share of Parent Common Stock
or Parent Preferred Stock, or other equity interest in, Parent. No Subsidiary of
Parent owns any shares of Parent Common Stock or Parent Preferred Stock. The per
share exercise price of each stock option granted by Parent was equal to or
greater than the fair market value of one share of Parent Common Stock on the
grant date of such stock option.
          (b) Except as set forth on Schedule 5.10(b) of the Parent Disclosure
Schedules, all of the outstanding capital stock of, or other voting securities
or ownership interests in, each Subsidiary of Parent is owned by Parent or by
one of its Subsidiaries, free and clear of any Encumbrance (other than Permitted
Encumbrances). Except as set forth on Schedule 5.10(b) of the Parent Disclosure
Schedules, there are no outstanding (i) securities of Parent or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of Parent or
(ii) options or other rights to acquire from

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Parent or any of its Subsidiaries, or other obligation of Parent or any of its
Subsidiaries to issue, any capital stock or other voting securities or ownership
interests in, or any securities convertible into or exchangeable for any capital
stock or other voting securities or ownership interests in, any of its
Subsidiaries (the items in clauses (i) and (ii) being referred to collectively
as the “Parent Subsidiary Securities”). There are no outstanding obligations of
Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
of the Parent Subsidiary Securities.
          (c) Other than the Subsidiaries of Parent, neither Parent nor any
Subsidiary of Parent owns, directly or indirectly, any shares of capital stock
or other equity or ownership interests in, any other Person (collectively,
“Parent Third Party Interests”). Neither Parent nor any Subsidiary of Parent has
any rights to, or is bound by any commitment or obligation to, acquire by any
means, directly or indirectly, any Parent Third Party Interests or to make any
investment in, or contribution or advance to, any Person.
     Section 5.11 Parent Series A Preferred Stock. The Parent Series A Preferred
Stock that constitutes the Stock Portion of the Merger Consideration has been
duly authorized, and upon consummation of the transactions contemplated by this
Agreement, will be validly issued, fully paid and nonassessable and will be
issued without violation of applicable Laws.
     Section 5.12 Financial Statements.
          (a) (i) Filed with the Securities and Exchange Commission are true and
correct copies of (x) the audited consolidated balance sheet as of July 31, 2006
and the related audited consolidated statements of income and cash flows for the
year ended July 31, 2006, and (y) the unaudited interim consolidated balance
sheet as of April 30, 2007 and the related unaudited interim consolidated
statements of income and cash flows for the nine (9) month period ended
April 30, 2007 and (ii) attached hereto as Schedule 5.12(a) of the Parent
Disclosure Schedules are the unaudited consolidated balance sheet as of July 31,
2007 and the related unaudited consolidated statements of income and cash flows
for the year ended July 31, 2007, of Parent and its Subsidiaries (collectively,
(i) and (ii) are referred to herein as the “Parent Financial Statements”).
          (b) Except as indicated on Schedule 5.12(b) of the Parent Disclosure
Schedules or in the Parent Financial Statements (including any notes thereto),
the Parent Financial Statements (i) complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the U.S. Securities and Exchange Commission (the “SEC”) with respect thereto
when filed, (ii) were prepared in accordance with GAAP as of the dates or during
the periods covered thereby (except, in the case of unaudited statements, for
the absence of footnotes thereto and normal year end adjustments) and (iii) in
the case of any balance sheet included in the Parent Financial Statements fairly
present in all material respects the consolidated financial position of Parent
and its Subsidiaries as of the date thereof and, in the case of any income
statement or statement of cash flows included in the Parent Financial
Statements, fairly present in all material respects the consolidated results of
operations or cash flows, as applicable, of Parent and its Subsidiaries for the
periods then ended (subject, in the case of any unaudited Parent Financial
Statements to normal year-end adjustments).

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          (c) Parent maintains a system of accounting and internal controls and
procedures as are necessary to provide assurances that (i) the financial records
and financial statements are complete and accurate in all material respects;
(ii) transactions are executed with management’s authorization;
(iii) transactions are recorded as necessary to permit preparation of the
financial statements of Parent and to maintain accountability for Parent’s
assets; (iv) access to Parent’s assets is permitted only in accordance with
management’s authorization; (v) accounts, notes and other receivables and
inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis; and
(vi) material information regarding the operations of Parent and its financial
condition is accumulated and communicated to Parent’s management, including its
principal executive and financial officers.
     Section 5.13 Events Subsequent.
          (a) Except as set forth in Schedule 5.13, since July 31, 2007 through
the date hereof, there has not been any Material Adverse Effect on Parent, and,
except for the Transactions, Parent and its Subsidiaries have been operated only
in the Ordinary Course of Business.
          (b) Except as set forth in Schedule 5.13, since July 31, 2007 through
the date hereof, there has not been any:
               (i) damage, destruction or other casualty, whether or not covered
by insurance, materially affecting Parent and its Subsidiaries or any assets
material to the business owned, held or used by Parent and its Subsidiaries;
               (ii) transaction or commitment made, or Contract entered into, by
Parent or any Subsidiary, or termination or amendment by Parent or any
Subsidiary of any Contract, in either case, which is material to Parent and its
Subsidiaries, other than transactions, commitments, Contracts, terminations or
amendments made in the Ordinary Course of Business;
               (iii) sale or other disposition of assets that are owned, held or
used by Parent or any Subsidiary other than in the Ordinary Course of Business;
               (iv) cancellation, compromise, settlement, waiver or release by
Parent or any Subsidiary (x) other than in the Ordinary Course of Business of
any Proceeding (or a series of related Proceedings) or (y) involving an amount
in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate;
               (v) (A) increase in the compensation or fringe benefits of any
present or former director, officer, employee or consultant of Parent or any
Subsidiary (except for increases in salary or wages in the Ordinary Course of
Business), (B) grant of any severance or termination pay to any present or
former director, officer or employee of Parent or any Subsidiary,
(C) establishment, adoption, entrance into, amendment or termination of any
Employee Plan or collective bargaining agreement (other than as may be required
by the terms of an existing Employee Plan or collective bargaining agreement, or
as may be required by Applicable Law or in order to maintain its qualification
under Section 401 and 501 of the Code or to provide for the effects of
Section 409A of the Code), or (D) grant of any equity or equity-

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based awards, in the case of each of clauses (A), (B), (C) or (D) above, other
than in the Ordinary Course of Business or as may be required under Applicable
Law; or
               (vi) agreement, whether in writing or otherwise, to do any of the
foregoing.
     Section 5.14 No Undisclosed Liabilities. There are no liabilities or
obligations of Parent or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, other than
(i) the liabilities, obligations, conditions or circumstances disclosed and
provided for in the most recent audited balance sheet included in the Parent
Financial Statements, (ii) the liabilities, obligations, conditions or
circumstances, which are of a nature that are not required by GAAP to be
reflected in the Parent Financial Statements, (iii) liabilities or obligations
incurred or arising in the Ordinary Course of Business since July 31, 2007 or in
connection with the consummation of Transactions, (iv) the liabilities,
obligations, conditions or circumstances which are of a subject matter covered
by any of the other representations and warranties of Parent and Merger Sub set
forth in this Agreement, (v) the liabilities or obligations disclosed in
Schedule 5.14 of the Parent Disclosure Schedules or (vi) any other liabilities
or obligations, which individually or in the aggregate would not reasonably be
expected to be material to Parent. Neither Parent nor any of its Subsidiaries
has entered into any off-balance sheet financing or has any off-balance sheet
indebtedness for borrowed money through a special purpose vehicle or otherwise.
     Section 5.15 Legal Compliance. Parent and each of its Subsidiaries have
complied with all Applicable Laws and Orders of any Governmental Body except
where the failure to comply would not have a Material Adverse Effect on Parent.
Neither Parent nor any of its Subsidiaries has received any written notice of,
and Parent has no Knowledge of, any violation of a material nature of any
Applicable Laws and/or Orders applicable to Parent or any of its Subsidiaries.
Except as set forth on Schedule 5.15 of the Parent Disclosure Schedules, none of
Parent nor any of its Subsidiaries has outstanding securities that are required
to be registered under the Exchange Act.
     Section 5.16 Affiliate Transactions. No Parent stockholder and no Affiliate
of any Parent stockholder or of Parent or its Subsidiaries has, or has had since
July 31, 2007, any (A) material business arrangement or relationship with Parent
or any of its Subsidiaries, or (B) interest in any material asset, real or
personal, tangible or intangible, of Parent or any of its Subsidiaries. Since
July 31, 2007 through the date hereof, there has been no material change in the
intercompany agreements between Parent or its Subsidiaries, on the one hand, and
any of their Affiliates, on the other hand. There are no assets owned by any
Affiliate of Parent or its Subsidiaries that are used in the business of Parent
and its Subsidiaries.
     Section 5.17 SEC Filings; Nasdaq; Information Supplied; S-3 Eligibility.
               (a) Parent has timely filed with the SEC all forms, statements,
reports, prospectuses and other documents (including exhibits and all other
information incorporated by reference) required to be filed by it with the SEC
since August 1, 2005, (i) all of which complied when filed in all material
respects with all Applicable Law and (ii) none of which contained, when filed,
any untrue statement of material fact or omitted to state a material fact
required to be

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stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made and at the time they were made, not
misleading. Parent Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the Nasdaq Capital Market. Parent is in compliance
with the continued listing requirements of the Nasdaq Marketplace Rules and has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Parent Common Stock under the
Exchange Act or delisting the Parent Common Stock from the Nasdaq Capital
Market. Parent knows of no reason why the shares of Parent Common Stock issuable
upon conversion of the Parent Series A Preferred Stock constituting the Stock
Portion of the Merger Consideration will not be eligible for listing on the
Nasdaq Capital Market. None of Parent’s Subsidiaries is required to file any
forms, reports or other documents with the SEC.
          (b) Parent satisfies the eligibility requirements for filing a
registration statement on Form S-3, including but not limited to the “Registrant
Requirements” of General Instruction I.A. to Form S-3, and no fact, circumstance
or condition exists that could be reasonably likely to (i) cause Parent to
become ineligible to file a registration statement on Form S-3 or (ii) delay or
hinder the filing of the Registration Statement or Parent’s Annual Report on
Form 10-K for the year ending July 31, 2007.
     Section 5.18 Solvency. (i) The fair value of the properties of Parent (on a
consolidated basis with its Subsidiaries) exceeds its debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable value of
the property of Parent (on a consolidated basis with its Subsidiaries) is
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured, (iii) Parent (on a
consolidated basis with its Subsidiaries) is able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) Parent (on a consolidated
basis with its Subsidiaries) does not have unreasonably small capital with which
to conduct its business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date. No fact,
circumstance or condition exists that could be reasonably likely to render
Parent insolvent or impede Parent’s ability to redeem the Parent Series A
Preferred Stock in accordance with the Certificate of Designations.
     Section 5.19 Disclaimer of Other Representations and Warranties. Except as
expressly set forth in Article 5 or in the Parent Disclosure Schedules or any
certificate furnished or to be furnished to the Company pursuant hereto, neither
Parent nor any of its Affiliates nor any Person acting on their behalf makes, or
shall be deemed to have made, any representation or warranty, express or
implied, relating to Parent, its Subsidiaries, Parent’s business or any other
matter, including any representation or warranty as to merchantability,
habitability, workmanship, profitability, future performance, fitness for a
particular purpose or non-infringement, whether or not contained in any document
or other communication provided or otherwise made available to the Company or
any Person acting on behalf of the Company during the course of due diligence or
otherwise (including, without limitation, in any management presentations,
information or offering memorandum, supplemental information, data room,
estimate, projection, forecast, budget or other forward-looking information or
other materials or information with respect to any of the above).

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ARTICLE 6
PRE-CLOSING COVENANTS
     Section 6.01 Reasonable Best Efforts.
          (a) Subject to Section 6.01(b), the Company and Parent shall each
cooperate with the other and use (and shall cause their respective Subsidiaries
to use) their respective reasonable best efforts to promptly (i) take or cause
to be taken all necessary actions, and do or cause to be done all things,
necessary, proper or advisable under this Agreement and the Ancillary Documents
and Applicable Laws and regulations to consummate and make effective the Merger
and the Transactions as practicable, including, without limitation, preparing
and filing promptly and fully all documentation to effect all necessary filings,
notices, petitions, statements, registrations, submissions of information,
applications and other documents (including, without limitation, any required
filings under the HSR Act, (ii) obtain all approvals, consents, registrations,
permits, authorizations and other confirmations required to be obtained pursuant
to this Agreement, including from any Third Party necessary, proper or advisable
to consummate the Merger and the Transactions, and (iii) execute and deliver
such documents, certificates and other papers as a Party may reasonably request
to evidence the other Party’s satisfaction of its obligations hereunder. Subject
to Applicable Laws relating to the exchange of information and in addition to
Section 6.01(c), the Parties shall have the right to review in advance, and, to
the extent practicable, each will consult the other on, all the information
relating to the Company and its Subsidiaries or Parent and its Subsidiaries, as
the case may be, that appears in any filing made with, or written materials
submitted to, any Third Party and/or any Governmental Body in connection with
the Merger and the Transactions.
          (b) Without limiting Section 6.01(a), each Party shall:
               (i) use its reasonable best efforts to avoid the entry of, or to
have vacated or terminated, any Order that would restrain, prevent or delay the
Closing or any Transaction, including, without limitation, defending through
litigation or arbitration on the merits any claim asserted in any court by any
Person; and
               (ii) use its reasonable best efforts to avoid or eliminate each
and every impediment under the HSR Act that may be asserted by any Governmental
Body with respect to the Merger and the Transactions related thereto so as to
enable the Closing to occur as soon as reasonably possible.
          (c) Each Party shall keep the other Party reasonably apprised of the
status of matters relating to the completion of the Merger and the Transactions
and work cooperatively in connection with obtaining all required approvals or
consents of any Governmental Body (whether domestic, foreign or supranational).
In that regard, each Party shall without limitation: (i) promptly notify the
other Party of, and if in writing, furnish the other Party with copies of (or,
in the case of material oral communications, advise the other orally of) any
communications from or with any Governmental Body with respect to the Merger and
the Transactions, (ii) permit the other Party to review and discuss in advance,
and consider in good faith the views of the other Party in connection with, any
proposed written (or any material proposed oral) communication with any

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such Governmental Body, (iii) not participate in any meeting with any such
Governmental Body unless it consults with the other Party in advance and to the
extent permitted by such Governmental Body gives the other the opportunity to
attend and participate thereat, (iv) furnish the other Party with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between it and any such Governmental Body with respect to
this Agreement, the Ancillary Documents, the Merger and the Transactions, and
(v) furnish the other Party with such necessary information and reasonable
assistance as Parent or the Company may reasonably request in connection with
its preparation of necessary filings or submissions of information to any such
Governmental Body.
     Section 6.02 Operation of Business. Except (i) for the consummation of the
Transactions, (ii) as set forth on Schedule 6.02 of the Company Disclosure
Schedules or as otherwise expressly contemplated by this Agreement or any
Ancillary Document, or (iii) to the extent consented to by Parent, during the
period from the date hereof and continuing until the earlier of the termination
of this Agreement or the Effective Time, the Company shall conduct its business
in the Ordinary Course of Business. The Company agrees to pay debts and Taxes
when due unless subject to good faith dispute, to pay or perform other
obligations in the Ordinary Course of Business subject to good faith disputes
over whether payment or performance is owing, and to use all commercially
reasonable efforts, consistent with past practices and policies, to preserve its
present business organizations, keep available the services of its key employees
and preserve its relationships with key customers, suppliers, distributors,
licensors, licensees, and others having business dealings with it. The Company
shall promptly notify Parent of any event or occurrence that the Company
receives Knowledge of, and which the Company believes would have a Material
Adverse Effect on the Company. Without limiting the generality of the foregoing,
except as set forth in Schedule 6.02 of the Company Disclosure Schedules or
expressly contemplated by this Agreement or any Ancillary Documents, from the
date hereof until the Effective Time the Company shall not without the prior
written consent of Parent (which consent shall not be unreasonably withheld or
delayed):
               (i) adopt or propose any change to the Company Certificate or the
Company’s bylaws or other organizational documents;
               (ii) merge or consolidate with any other Person or acquire a
material amount of stock or assets of any other Person or effect any business
combination, recapitalization or similar transaction;
               (iii) acquire, sell, lease, license or otherwise dispose of any
material Subsidiary or any material amount of assets, securities or property
except (A) pursuant to existing Contracts or commitments or (B) in the Ordinary
Course of Business;
               (iv) except as contemplated by Section 3.01(b) of this Agreement,
declare, set aside or pay any dividend or other distribution with respect to the
capital stock of the Company;
               (v) create or incur any Encumbrance on any material asset other
than (A) in the Ordinary Course of Business or (B) Permitted Encumbrances;

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               (vi) make any material loan, advance or capital contribution to
or investment in any Person other than loans, advances or capital contributions
to, or investments in, its wholly-owned Subsidiaries in the Ordinary Course of
Business other than employee loans not in excess of One Hundred Thousand Dollars
($100,000) in the aggregate;
               (vii) change any method of accounting or accounting principles or
practice, except for any such change required by reason of a concurrent change
in GAAP;
               (viii) make any loan, advance or capital contribution to or
investment in any Person other than loans, advances or capital contributions to,
or investments in, its wholly-owned Subsidiaries in the Ordinary Course of
Business or create, incur or assume any indebtedness for borrowed money under
the Credit Agreement not currently outstanding; assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person; or make any loans, advances
or capital contributions to, or investments in, any other Person;
               (ix) amend any material term of any outstanding security of the
Company or any of its Subsidiaries;
               (x) other than pursuant to existing agreements relating to the
Options or Warrants, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of capital stock of any class or other
equity interests of, or any securities convertible into, or any rights,
warrants, calls, subscriptions or options to acquire, any such shares, equity
interests, or convertible securities;
               (xi) settle any legal proceedings;
               (xii) enter into, amend, terminate or waive any rights under any
Material Contract other than in the Ordinary Course of Business;
               (xiii) enter into or amend any operating or capital lease;
               (xiv) make or commit to make any capital expenditure in excess of
amounts set forth in the Company’s budget previously made available to Parent;
               (xv) except with respect to the Employee Transaction Bonuses,
enter into, adopt or amend any Employee Benefit Plan or increase in any manner
the compensation or fringe benefits of, or modify the employment terms of, its
directors, officers or employees, generally or individually;
               (xvi) except as contemplated by this Agreement, make any payment
or incur any liability other than in the Ordinary Course of Business; or
               (xvii) agree or commit to do any of the foregoing.
     Section 6.03 Publicity. Except as otherwise required herein, the Parties
shall use their reasonable efforts to (i) develop a joint communication plan
with respect to this Agreement, the Merger and the Transactions, (ii) ensure
that all press releases and other public statements with

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respect to this Agreement or the Transactions shall be consistent with such
joint communication plan, and (iii) consult promptly with each other prior to
issuing any press release or otherwise making any public statement with respect
to the Merger and the Transactions, provide to the other Party for review a copy
of any such press release or statement, and not issue any such press release or
make any such public statement without the other Party’s consent, unless
required by Applicable Law or any listing agreement with or rules and
regulations of a securities exchange.
     Section 6.04 Access. The Company shall permit, and shall cause each of its
Subsidiaries to permit, representatives of Parent (including legal counsel and
accountants) to have, upon prior written notice, reasonable access during normal
business hours and under reasonable circumstances, and in a manner so as not to
interfere with the normal business operations of the Company and its
Subsidiaries, to the premises, personnel, books, records (including Tax
records), Contracts, and documents of or pertaining to the Company and each of
its Subsidiaries. Neither Parent, Merger Sub nor any of their respective
representatives shall contact any employee, customer, supplier or landlord of
the Company or any of its Subsidiaries without the prior written consent of an
officer of the Company. Parent and Merger Sub shall comply with, and shall cause
their respective representatives to comply with, all of their obligations under
the Confidentiality Agreement (the “Confidentiality Agreement”) by and between
the Company and Parent with respect to the terms and conditions of this
Agreement and the Transactions and the Company information disclosed pursuant to
this Section 6.04, which agreement will remain in full force and effect until
the Effective Time, and shall survive termination of this Agreement.
     Section 6.05 Stockholder Consent. Subject to Section 6.06, (a) the Company
shall use its reasonable best efforts to solicit, and shall use its reasonable
best efforts to obtain, written consents (“Written Consents”) from all the
Company Stockholders within two (2) Business Days after the execution of this
Agreement for purposes of obtaining the Requisite Stockholder Approval and
(b) the Company’s Board shall declare the advisability of this Agreement and
recommend the adoption of this Agreement and the approval of the Merger and the
Transactions by the Common Stockholders. The Company shall mail or deliver an
information statement (the “Information Statement”) to all stockholders of the
Company as of the record date under Delaware law. Prior to the distribution of
any solicitation materials, including the Information Statement, or any
amendment or supplement thereto, Parent and its counsel shall be provided copies
of such materials not produced or provided by Parent for such purpose and shall
be provided a reasonable opportunity to review and comment thereon. The
Information Statement shall constitute a disclosure document for the offer and
issuance of the shares included in the Stock Portion of the Merger Consideration
to be received by the holders of the Company’s capital stock in the Merger.
Parent shall promptly provide all information relating to its business and
operations necessary for inclusion in the Information Statement to satisfy all
requirements of applicable federal and state securities laws. The information
supplied by Parent for inclusion in the Information Statement shall not, at the
time the Information Statement is first mailed to the holders of capital stock
of the Company and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. No
representation is made by the Company with respect to statements made in the
Information Statement regarding the Company based on information supplied by an
officer or director of Parent or Merger Sub who is at such time an officer or
director of the Company. The Company will promptly advise Parent, and Parent
will

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promptly advise the Company, in writing if at any time prior to the Effective
Time either Parent or the Company shall obtain knowledge of any facts that might
make it necessary or appropriate to amend or supplement the Information
Statement in order to make the statements contained or incorporated by reference
therein not misleading or to comply with applicable law.
     Section 6.06 No Solicitation.
          (a) The Company shall not, nor shall it authorize or permit any of its
Subsidiaries to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative (collectively, “Advisors”) of, the Company or any of its
Subsidiaries to knowingly or intentionally, (i) directly or indirectly solicit,
initiate or encourage the submission of, any Acquisition Proposal (as defined
below), (ii) enter into any agreement with respect to any Acquisition Proposal
or (iii) directly or indirectly participate in any substantive discussions or
negotiations regarding, or furnish to any Person any Confidential Information
with respect to, or take any other action to facilitate the making of an
Acquisition Proposal; provided, however, that the Company may, in response to an
unsolicited Acquisition Proposal made after the date of this Agreement which did
not result from a knowing breach of this Section 6.06(a), (x) furnish
information with respect to the Company to the Person making such Acquisition
Proposal and its Advisors pursuant to a customary confidentiality agreement not
less restrictive of the other Party than the Confidentiality Agreement, and
(y) if the Board of Directors of the Company determines, in good faith, after
consultation with outside legal counsel and financial advisors, that the
Acquisition Proposal is or would reasonably be expected to lead to a Superior
Proposal (as defined below), participate in discussions or negotiations with
such Person and its Advisors regarding such Acquisition Proposal and delay
solicitation of the Requisite Stockholder Approval and the mailing of
solicitation materials for the purposes of obtaining the Requisite Stockholder
Approval, in each case, for such time as the Board of Directors determines is
necessary to complete the actions contemplated by clauses (x) and (y) above with
respect to such Superior Proposal. For the avoidance of doubt, a Company
Stockholder shall not be considered an “Advisor” for purposes of Section 6.06 as
long as such stockholder is not acting in concert with the Company or any other
Advisor of the Company in a manner that would otherwise be prohibited under this
Section 6.06. Upon execution of this Agreement, the Company shall cease
immediately and cause to be terminated any and all existing discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal and promptly request that all confidential information with
respect thereto furnished on behalf of the Company be returned.
          (b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) approve any letter of intent, agreement in principle,
acquisition agreement or similar agreement relating to any Acquisition Proposal,
or (ii) approve or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal. Notwithstanding the foregoing, if the Board of Directors
of the Company receives a Superior Proposal that was not knowingly solicited by
the Company in violation of Section 6.06(a), and as a result thereof the Board
of Directors of the Company determines, in good faith, after consultation with
outside legal counsel, that accepting such Superior Proposal or recommending
such Superior Proposal to the Common Stockholders is consistent with their
fiduciary obligations, the Board of Directors of the Company may (A) terminate
this Agreement pursuant to Section 9.01(e), (B) change or modify its
recommendation to the Common Stockholders with respect to the Merger and the

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Transactions, and/or (C) may recommend such Superior Proposal to the Common
Stockholders and may authorize the Company immediately thereafter to enter into
an agreement with respect to such Superior Proposal, but only (x) at a time that
is not less than 48 hours after the time following the Company’s delivery to
Parent of written notice advising Parent that Board of Directors of the Company
is prepared to approve a Superior Proposal, identifying the Person making such
Superior Proposal and otherwise complying with this Section 6.06(b) and
(y) after taking into full account any proposal by Parent to amend the terms or
conditions of the Merger and this Agreement.
          (c) The Company promptly (but in no event later than 24 hours after
learning of an Acquisition Proposal) shall advise Parent orally and in writing
of any Acquisition Proposal and the material terms and conditions of any such
Acquisition Proposal. The Company shall keep Parent reasonably informed of the
status (including any change to the material terms thereof) of any such
Acquisition Proposal.
          (d) Nothing contained in this Section 6.06 shall prohibit the Company
from complying with Rule 14e-2 or such other securities regulations promulgated
under the Exchange Act, if such provisions are applicable to the Company, with
regard to an Acquisition Proposal or from making any disclosure to the Company
Stockholders if, in the good faith judgment of the Board of Directors of the
Company, after consultation with outside counsel, failure so to disclose would
be inconsistent with its obligations under Applicable Law.
          (e) Notwithstanding anything to the contrary in this Section 6.06, the
fact that the Company or any of its Subsidiaries has had discussions or
negotiations with Persons prior to the date of this Agreement regarding a
possible Acquisition Proposal shall not prevent the Company from taking any of
the actions specified in this Section 6.06 with respect to a new Acquisition
Proposal that was submitted by such a Person after the date of this Agreement
and was not solicited in violation of Section 6.06(a).
          (f) For purposes of this Agreement: (i) “Acquisition Proposal” means
(i) any written proposal or offer for a merger, consolidation, dissolution,
recapitalization or other business combination involving the Company, (ii) any
written proposal or offer for the issuance by the Company of over 20% of its
equity securities as consideration for the assets or securities of another
Person or (iii) any written proposal or offer to acquire in any manner, directly
or indirectly, over 20% of the equity securities or consolidated total assets of
the Company, in each case other than the Merger or the exercise of Options and
Warrants outstanding on the date hereof and in accordance with all of their
respective terms and conditions on the date hereof and from a Third Party other
than Parent or Merger Sub; and (ii) “Superior Proposal” means any Acquisition
Proposal to acquire all or substantially all of the equity securities or assets
of the Company, pursuant to a tender or exchange offer, a merger, a
consolidation, a liquidation or dissolution, a recapitalization, a sale of all
or substantially all its assets or otherwise, which the Board of Directors of
the Company determines in good faith, after consultation with outside legal
counsel and financial advisors, if completed on the terms proposed, would be
more favorable to the Company Stockholders than the Merger, taking into account
(i) all of the terms and conditions of such proposal and this Agreement
(including any proposal by Parent to amend the terms of the Merger) and
(ii) such other factors (in addition to price) as the Board of

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Directors reasonably considers to be relevant (including, for example, legal,
regulatory, and timing factors).
     Section 6.07 Cooperation for Payoff Amount. The Company shall cooperate
with and provide Parent with the assistance necessary to obtain a written payoff
letter and wire transfer instructions from the Lender, specifying the amount
required to repay the full amount of the Lender Debt, and all accrued interest
thereunder up to and including the Closing Date, and the account or accounts to
which such payments shall be made, as contemplated by Section 3.01(c)(i) above.
     Section 6.08 Financing.
          (a) Parent and Merger Sub shall use their reasonable best efforts to
(i) satisfy all conditions applicable to Parent and Merger Sub in the Parent
Credit Agreement; and (ii) consummate the Financing no later than two
(2) Business Days after the date hereof. Solely in the event that any portion of
the Financing becomes unavailable on the terms and conditions contemplated in
the Parent Credit Agreement, Parent shall use its reasonable best efforts to
obtain any such unavailable portion from alternative sources on comparable or
more favorable terms to Parent (as determined in the reasonable good-faith
judgment of Parent) as promptly as practicable following the occurrence of such
event but in no event later than two (2) Business Days after the date hereof.
Parent shall promptly provide the Company with the documentation evidencing the
alternative sources of financing and shall give the Company prompt notice (but
in any event within two (2) Business Days) of any material breach by any party
to the Parent Credit Agreement or any termination of the Parent Credit
Agreement. Parent shall keep the Company informed on a reasonably current basis
in reasonable detail of the status of its efforts to arrange for a replacement
Financing, if necessary, and shall not permit any material amendment or
modification to be made to, or any waiver of any material provision or remedy
under, the Parent Credit Agreement (or replacement thereof) without first
consulting with the Company or, if such amendment or modification would or would
be reasonably expected to prevent, delay or hinder Parent and/or Merger Sub’s
ability to consummate the transactions contemplated by this Agreement, without
first obtaining the Company’s prior written consent which shall not be
unreasonably withheld, conditioned or delayed. For the avoidance of doubt, if a
replacement Financing (or any alternative financing) has not been obtained,
Parent and Merger Sub shall continue to be obligated to consummate the Merger on
the terms contemplated by this Agreement and subject only to the satisfaction or
waiver of the conditions set forth in Sections 8.01 and 8.02.
          (b) The Company shall and shall cause its Subsidiaries and their
respective representatives to provide all reasonable cooperation in connection
with the arrangement of the Financing as may be reasonably required by Parent;
provided that such requested cooperation does not unreasonably interfere with
the ongoing operations of the Company and its Subsidiaries. Parent shall,
promptly upon request by the Company, reimburse the Company for all reasonable
out-of-pocket costs incurred by the Company or the Subsidiaries in connection
with such cooperation. Parent and Merger Sub shall, on a joint and several
basis, indemnify and hold harmless the Company, its Subsidiaries and their
respective Representatives for and against any and all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments and penalties
suffered or incurred by them in connection with the arrangement of the Financing
and

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any information utilized in connection therewith. Notwithstanding anything to
the contrary, the condition set forth in Section 8.02(b) of this Agreement, as
it applies to the Company’s obligations under this Section 6.08(b), shall be
deemed satisfied unless the Financing (or any alternative financing) has not
been obtained primarily as a result of the Company’s willful and material breach
of its obligations under this Section 6.08(b).
          (c) All Confidential Information regarding the Company and its
Subsidiaries obtained by Parent or its Representatives pursuant to
Section 6.08(b) above shall be kept confidential in accordance with the
Confidentiality Agreement.
     Section 6.09 Parent Dividends; Changes in Stock. Except as set forth on
Schedule 6.09 of the Parent Disclosure Schedules, during the period from the
date hereof and continuing until the earlier of the termination of this
Agreement or the Closing, without prior written consent of the Representative,
Parent shall not, nor shall it cause or permit any of its Subsidiaries to, or
propose to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except for dividends paid or to be paid to
Parent by a wholly owned Subsidiary of Parent, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance or
authorization of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock or (iii) repurchase, redeem or
otherwise acquire, or permit any Subsidiary to redeem, purchase or otherwise
acquire, any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock.
     Section 6.10 Parent Governing Documents. During the period from the date
hereof and continuing until the earlier of the termination of this Agreement or
the Closing, without prior written consent of the Representative, Parent shall
not amend or propose to amend its certificate of incorporation, bylaws or the
Certificate of Designations (including by way of plan of consolidation, merger
or reorganization), or file any certificate of designations other than the
Certificate of Designations.
ARTICLE 7
POST-CLOSING COVENANTS
     Section 7.01 General. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties shall take such further action (including the execution and delivery of
such further instruments and documents) as the other Party reasonably may
request, all at the sole cost and expense of the requesting Party.
     Section 7.02 Employee Matters.
          (a) The Surviving Corporation shall honor the obligations of the
Company and its Subsidiaries under the provisions of any employment agreements
and other similar Contracts between the Company, or any of its Subsidiaries and
any employee of the Company or any of its Subsidiaries. At or immediately prior
to the Closing, the Company shall pay all Employee Transaction Bonuses as set
forth on Schedule 7.02(a)(i). After the Closing, at the time and in accordance
with the terms set forth on Schedule 7.02(a)(ii), Parent and the Company shall
pay all amounts payable under the Company’s performance bonus plan as set forth
on Schedule 7.02(a)(ii).

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          (b) From and after the Effective Time, Parent agrees to provide, or
cause the Surviving Corporation and its Subsidiaries to provide, each employee
of the Company or any of its Subsidiaries with employee benefits plans, programs
and arrangements that are substantially similar and not materially less
favorable in the aggregate than the employee benefits plans, programs and
arrangements maintained by Parent and its Subsidiaries and made available to the
employees of the Parent and its Subsidiaries (“Comparable Benefits”) (it being
understood that Parent may elect to (i) provide each employee of the Company or
any of its Subsidiaries with Comparable Benefits through coverage under Parent’s
employee benefits plans, programs and arrangements, (ii) cause the Surviving
Corporation to provide each employee of the Company or any of its Subsidiaries
with Comparable Benefits through continued coverage under the Company’s and its
Subsidiaries’ employee benefits plans, programs and arrangements or
(iii) provide each employee of the Company or any of its Subsidiaries with
Comparable Benefits through a combination of coverage under Parent’s employee
benefits plans, programs and arrangements and continued coverage under the
Company’s and its Subsidiaries’ employee benefits plans, programs and
arrangements); provided, however, that the aggregate value of the employee
benefit plans, programs and arrangements provided by Parent to employees of the
Company and any of its Subsidiaries for the one-year period following the
Effective Time shall not be materially less than the value of such benefits
provided to employees of the Company and any of its Subsidiaries in effect
immediately prior to the Closing Date, which obligation of the Parent may be
satisfied, at its election, by increasing compensation or providing bonuses to
such employees. For the purpose of determining the aggregate value of the
employee benefit plans, programs and arrangements provided by Parent to
employees of the Company and any of its Subsidiaries, the value of the stock
options issued under Parent’s stock option plan shall be consistent with the
values used in Parent’s audited financial statements.
          (c) Notwithstanding, and in clarification of, the foregoing, with
respect to each benefit plan, program, practice, policy or arrangement
maintained by Parent or the Company and in which any of the employees become
eligible to participate (the “Parent Plans”), for purposes of determining
eligibility to participate, vesting and benefit accrual, service with the
Company and its Subsidiaries (or predecessor employers to the extent the Company
provides past service credit) shall be treated as service with Parent and/or any
of its applicable Subsidiaries; provided, however, that such service shall not
be recognized to the extent that such recognition would result in a duplication
of benefits. Such service also shall apply for purposes of satisfying any
waiting periods or evidence of insurability requirements. Parent shall use its
commercially reasonable efforts to cause each of the applicable Parent Plans to
(i) waive all limitations as to pre-existing condition exclusions, evidence of
insurability requirements and waiting periods with respect to participation and
coverage requirements applicable to employees under the Parent Plans, except to
the extent such limitations, evidence of insurability and waiting periods were
applicable to such employee under a comparable Employee Benefit Plan, and
(ii) give employees and their eligible dependents credit under the Parent Plans
for amounts paid during the year in which the Effective Time occurs under a
corresponding Employee Benefit Plan for purposes of satisfying any applicable
deductibles, co-payments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the Parent Plans.

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     Section 7.03 Directors’ and Officers’ Indemnification.
          (a) From and after the Effective Time, Parent and the Surviving
Corporation, jointly and severally, shall indemnify and hold harmless each
present and former director, officer, manager or managing director of the
Company and each Subsidiary of the Company and each such Person who served at
the request of the Company or any Subsidiary of the Company as a director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other Employee Benefit Plan or
enterprise (collectively, the “Company Indemnified Parties”) against all costs
and expenses (including, without limitation, reasonable attorneys’ fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, Proceeding or investigation
(whether arising before or after the Effective Time), whether civil,
administrative, criminal or investigative, arising out of or pertaining to any
action or omission solely in their capacities as directors, officers, managers,
managing directors, trustees, partners, fiduciaries, employees or agents, in
each case occurring at or before the Effective Time (including, without
limitation, the Merger and the Transactions), in each case, to the fullest
extent permitted by Applicable Law. The foregoing shall not under any
circumstances apply to indemnify and hold harmless any Company Indemnified Party
against any indemnification claims that such Company Indemnified Party is
otherwise obligated to satisfy pursuant to Section 10.01.
          (b) From and after the Effective Time, Parent shall cause the
certificates of incorporation and bylaws of the Surviving Corporation and its
Subsidiaries to contain provisions with respect to exculpation, indemnification
and expense reimbursement that are at least as favorable to the Company
Indemnified Parties as those contained in the Company Certificate and the bylaws
of the Company or the articles of association, bylaws or other organizational
documents of any of its Subsidiaries as in effect on the date hereof.
          (c) For a period of six (6) years after the Effective Time, Parent
shall cause to be maintained in effect directors’ and officers’ liability
insurance policies that are comparable to the directors’ and officers’ liability
insurance policies currently maintained by the Company, such policies to be paid
in full by the Company prior to the Closing, with respect to claims arising from
facts or events that occurred at or prior to the Effective Time (provided that
Parent may substitute therefor policies reasonably satisfactory to the Company
Indemnified Parties of at least the same coverage containing terms and
conditions that, in the aggregate, are no less advantageous).
          (d) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and is not the
continuing or surviving corporation or entity in such consolidation or merger,
or (ii) transfers all or substantially all of its properties and assets to any
Person, then, and in each case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation honor the indemnification
and other obligations set forth in this Section 7.03.
          (e) Each Company Indemnified Party shall have rights as a third party
beneficiary under this Section 7.03 as separate contractual rights for his or
her benefit, in addition to and not in substitution of any other rights to
indemnification or contribution that any such Company Indemnified Party may have
by contract or otherwise, and all such rights herein

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and otherwise shall be enforceable by such Company Indemnified Party, his or her
heirs and personal representatives and shall be binding on Parent, the Surviving
Corporation and their successors and assigns.
     Section 7.04 Consents and Approvals. The Company shall use its commercially
reasonable efforts to cause to be delivered to Parent all consents and approvals
necessary from the independent certified public accountants of the Company and
its Subsidiaries to allow Parent to incorporate, utilize, publish or otherwise
disclose the Company Financial Statements in order to facilitate Parent’s
reporting requirements with any Governmental Body in accordance with Applicable
Law, including the United States Securities and Exchange Commission.
     Section 7.05 Tax Matters.
          (a) Post-Closing Tax Return Filings; Indemnification.
               (i) Parent shall prepare and timely file (or cause to be prepared
and timely filed) with the appropriate Taxing Authorities all Tax Returns
required to be filed by the Company and its Subsidiaries with respect to any
taxable period beginning before the Closing Date that are due after the Closing
Date (each a “Parent Return”). Each such Tax Return shall be prepared in a
manner consistent with the prior practice of the Company and its Subsidiaries
unless otherwise required by applicable Tax laws or specified in Schedule 7.05.
               (ii) No liability in respect of Tax shown on any Parent Return
shall be considered to constitute a Loss subject to indemnity pursuant to
Section 10.01 unless Parent shall have provided the Representative with a copy
of such Parent Return for review and comment at least twenty (20) days prior to
the filing of such Tax Return (or, if required to be filed within twenty
(20) days after the Closing or the end of the taxable period to which such
return relates, as soon as reasonably possible following the Closing or the end
of such taxable period, as the case may be), accompanied by a statement (a
“Pre-Closing Tax Statement”) setting forth and calculating in reasonable detail
the Pre-Closing Taxes (as defined below) and Indemnified Taxes that are shown as
due on such Tax Return. The “Indemnified Taxes” shall mean the excess of the
Pre-Closing Taxes over the amount of such Pre-Closing Taxes that were reflected
as liabilities in the Company Financial Statements or incurred by the Company
after the Company Balance Sheet Date as a result of any transaction that was not
in breach of Section 4.08 or Section 6.02; provided that Indemnified Taxes shall
not include any amount of Tax liability attributable to periods through the
Company Balance Sheet Date that was not reflected on the Company Balance Sheet,
if the omission of such amount did not cause the Company Balance Sheet to fail
to be prepared in accordance with GAAP.
               (iii) If the Representative disagrees with the manner of
preparation of a Parent Return or the amount of Pre-Closing Taxes or Indemnified
Taxes calculated in the Pre-Closing Tax Statement, within fifteen (15) days of
the receipt of Parent Return and Pre-Closing Tax Statement the Representative
shall provide to Parent a notice of such dispute (a “Tax Statement Dispute”). If
the Representative does not provide a notice of Tax Statement Dispute within
such 15-day period, the Representative shall be deemed to have accepted the Tax
Return and Pre-Closing Tax Statement relating thereto for purposes of
Article 10. If the Representative provides Parent with a notice of a Tax
Statement Dispute, the Representative shall also provide

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Parent with a written explanation of the reasons for its disagreement. The
Representative shall have the right to review and approve (which approval shall
not be unreasonably withheld or delayed) each such Tax Return so provided. For
this purpose, the Representative’s withholding of timely approval of a Tax
Return based upon Parent’s failure to adopt in such Tax Return an alternative
reporting position suggested by the Representative shall be deemed reasonable if
the reporting position proposed by the Representative on such Tax Return has a
“reasonable basis,” as defined in section 6662 of the Code. Parent and the
Representative shall attempt to resolve their disagreement within the five
(5) days following the Representative’s notification to Parent of a Tax
Statement Dispute. If the Representative and Parent cannot reach complete
agreement within fifteen (15) days, they each shall select a Tax expert from
their outside accounting firm or law firm knowledgeable in the area of the
dispute, and such experts shall attempt to resolve the differences. Each Party
shall be responsible for the costs and fees of its Tax expert. If Parent and the
Representative are unable to resolve their disagreement through their Tax
experts, Parent and the Representative shall jointly select an arbiter from a
nationally recognized independent public accounting firm that is not the
independent auditor of any of Parent, the Company, the Surviving Corporation or
any of their Subsidiaries; if Parent and the Representative are unable to select
an arbiter within such time period, the American Arbitration Association shall
make such selection (the person so selected shall be referred to herein as the
“Tax Arbitrator”). The Tax Arbitrator so selected will only consider those
matters as to which Parent and the Representative have disagreed. Neither Parent
nor the Representative shall have or conduct any communication, either written
or oral, with the Tax Arbitrator without the other of them either being present
or receiving a concurrent copy of any written communication. The Tax Arbitrator
shall resolve each item of disagreement based solely on the presentations and
supporting material provided by Parent and the Representative and not pursuant
to any independent review (the foregoing, however, shall not preclude the Tax
Arbitrator from independent research of facts or determining proper application
of GAAP or the terms of this Agreement with respect to the subject matter of the
objections and disagreement between Parent and the Representative). The fees and
expenses of the Tax Arbitrator incurred in connection with the determination of
the disputed items by the Tax Arbitrator shall be borne by Parent and the
Representative in an amount proportionate to the amount contested and not
awarded to such Party as it bears to the total amount contested by the Parties,
as determined by the Tax Arbitrator. Parent shall, subject to indemnification
pursuant to Section 10.01, timely pay or cause to be paid the Tax shown as due
on each such Tax Return.
                  (iv) Any Loss attributable to Indemnified Taxes shall be
determined by reference to actual losses or expenses of the Parent Indemnified
Parties in the same manner as other Losses pursuant to Article 10, and, for
instance, shall be reduced by any Tax benefit which is correlative to the
incurring of or payment of such Indemnified Taxes. The amount of the Loss
attributable to Indemnified Taxes shown in any Pre-Closing Tax Statement as
finally determined pursuant to the preceding paragraph, shall be treated as a
“Loss” that is indemnifiable pursuant to Section 10.01.
          (b) Taxable Year Closing; Allocation of Taxes. Parent shall, unless
prohibited by applicable law, cause the taxable periods of the Company and its
Subsidiaries to end as of the close of the Closing Date. Parent shall not permit
the Company or any of its Subsidiaries to take any actions after Closing on the
Closing Date that are out of the Ordinary Course of Business, except as required
by this Agreement or consented to by the Representative. For purposes of this
Agreement, Taxes incurred by the Company or any of its Subsidiaries with

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respect to a taxable period that includes but does not end on the Closing Date,
shall be allocated to the portion of the taxable period ending on the Closing
Date: (i) except as provided in (ii) and (iii) below, to the extent feasible, on
a specific identification basis, according to the date of the event or
transaction giving rise to the Tax, and (ii) except as provided in (iii) below,
with respect to periodically assessed ad valorem Taxes and Taxes not otherwise
reasonably allocable to specific transactions or events, in proportion to the
number of days in such period occurring through the Closing Date compared to the
total number of days in such taxable period, and (iii) in the case of any Tax
based upon or related to income or receipts, in an amount equal to the Tax which
would be payable if the relevant taxable period ended on the Closing Date. Any
credits relating to a taxable period that begins before and ends after the
Closing Date shall be taken into account as though the relevant taxable period
ended on the Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior practices
of the Company and its Subsidiaries. For purposes of this Agreement,
“Pre-Closing Taxes” means all Taxes of the Company and its Subsidiaries
attributable to taxable periods ending on or before the Closing Date, and the
Taxes allocable to the portion of a taxable period ending on the Closing Date.
          (c) Tax Elections; Amended Returns. Except in connection with an audit
resolved pursuant to Section 7.05(e) (including consistent correlative
adjustments to Tax Returns for non-audited taxable periods), no Party or
Affiliate of a Party may amend or cause the amendment of a Tax Return of the
Company or any of its Subsidiaries, or file or amend any Tax election, or file a
Tax Return after the due date thereof, concerning the Company or any of its
Subsidiaries, in each case, with respect to any taxable period that would affect
the computation of Pre-Closing Taxes without the written consent of the
Representative, which consent shall not be unreasonably withheld or delayed.
Parent shall, upon request by the Representative, cooperate in the preparation
of and submission to the proper Taxing Authority of any amended Tax Return with
respect to the Company or any of its Subsidiaries for any taxable period
beginning before the Closing Date which is necessary to cause such Tax Return to
be consistent with adjustments to a Tax Return for any other taxable period
proposed by a Taxing Authority, or which is otherwise required by law to be
filed.
          (d) Overpayments of Pre-Closing Taxes. To the extent that any
determination of Tax liability, whether as the result of an audit or
examination, a claim for refund, the filing of an amended Tax Return or
otherwise, results in a determination of an overpayment of Taxes related to
Taxes that were either (i) paid by the Company on or before the Closing Date,
(ii) reflected as a liability in the Company Financial Statements or (iii) paid
from the Escrow Deposit pursuant to a claim for indemnification under
Section 10.01, Parent shall promptly pay an amount equal to such overpayment or
overaccrual, and any interest actually received thereon, to the Exchange Agent
upon receipt by (or crediting for the benefit of) Parent or its Affiliates (in
the case of an overpayment of Taxes), or upon a determination that such Tax is
not required to be paid (in the case of an overaccrual of Tax liability that was
not yet paid at the time of such determination), unless and to the extent that
the entitlement to any refund or credit of such overpayment was (x) taken into
account in computing the amount of indemnified Loss in respect of such Taxes, or
(y) reflected as an asset in the Company Financial Statements. For the avoidance
of doubt, Parent shall not offset any Tax refunds from any Losses except with
the prior written consent of the Representative.

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          (e) Audits and Contests Regarding Taxes. Any Party who receives, or
whose Affiliate receives, any notice of a pending or Threatened Tax audit,
assessment, or adjustment against or with respect to the Company or any of its
Subsidiaries which may give rise to a right to indemnification from the Escrow
Deposit pursuant to the terms of Article 10 shall promptly notify the
Representative of the receipt of such notice, and in no event in not more than
ten (10) Business Days from the receipt of such notice. Parent and the
Representative each agree to consult with and to keep the other informed on a
regular basis regarding the status of any Tax audit or proceeding to the extent
that such audit or proceeding could affect a liability of the Parties or the
Company Stockholders (including indemnity obligations hereunder). The
Representative shall have the right to represent the Company’s or any of its
Subsidiaries’ interests in any Tax audit or administrative or judicial
proceeding pertaining to taxable periods ending on or before the Closing Date
and to employ counsel of his choice, but reasonably satisfactory to Parent, at
his expense, and control the disposition of any issue involved in such
proceeding; provided that Parent shall have the right to participate in such
proceeding at its own expense, and shall be entitled to control the disposition
of any issue involved in such proceeding which does not affect either a
potential liability of the Company Stockholders or claim for indemnity under
Section 10.01. Both Parent and the Company Stockholders (through the
Representative) shall be entitled to represent their own interests in light of
their responsibilities (including indemnity obligations) for the related Taxes,
at their own expense, in any audit or administrative or judicial proceedings
involving a taxable period of the Company or any of its Subsidiaries that
includes but does not end on the Closing Date or involving both a taxable period
of the Company or any of its Subsidiaries ending on or before the Closing Date
and a taxable period ending after the Closing Date, and no such audit or
proceeding may be settled or compromised by the Representative or Parent without
the consent of both the Representative and Parent, which consent shall not be
unreasonably withheld. Except as provided in this Section 7.05(e), the
provisions of Article 10, including the provisions therein addressing settlement
authority, shall govern the manner in which Tax audit or administrative or
judicial proceedings are resolved.
          (f) Cooperation, Access to Information, and Records Retention. The
Representative and Parent shall cooperate as and to the extent reasonably
requested by the other in connection with the preparation and filing of Tax
Returns as provided herein and any audit, litigation or other proceeding with
respect to Taxes relating to the Company or any of its Subsidiaries. Such
cooperation shall include the provision of records and information which are
reasonably relevant to any such Tax Return, audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Parent agrees (i) to retain all books and records relevant to Taxes
of the Company and its Subsidiaries (including Tax Returns) relating to any
taxable period beginning before the Closing Date until the expiration of the
statute of limitations for assessment of Taxes for such respective taxable
period, and (ii) to give the Representative reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
Representative so requests, Parent shall allow the Representative to take
possession or copy of such books and records.
          (g) Tax Certificates. Parent and the Representative agree, upon
request of the other, to use all reasonable efforts to obtain any certificate or
other document from any

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Governmental Body as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with respect to the Merger
and the Transactions).
          (h) Tax Treatment of Merger. The Parties intend the Merger and LLC
Merger (collectively, the “Mergers”) together to qualify as a reorganization
under Section 368(a)(1)(A) of the Code, and hereby adopt this Agreement as a
“plan of reorganization” within the meaning of Treasury Regulations
Sections 1.368-2(g) and 1.368-3(a). In support of such Tax treatment, the
Parties hereto represent and covenant as follows:
               (i) Each of the Parties will report in their respective federal
income Tax Returns for the taxable period including the Closing Date that the
Mergers together qualified as a reorganization under Section 368(a)(1)(A) of the
Code, and will properly file with their federal income Tax Returns all
information required by Treasury Regulations Section 1.368-3. No party hereto,
unless required by law, will take any Tax reporting position inconsistent with
the characterization of the Mergers as a reorganization within the meaning of
Section 368(a) of the Code.
               (ii) Parent represents that it intends to continue at least one
significant historic business line of the Company, or use at least a significant
portion of the Company’s historic business assets in a business, so that the
Mergers shall satisfy the continuity of business enterprise requirement, in each
case within the meaning of Treasury Regulations Section 1.368-1(d)
               (iii) Parent and Merger Sub represent that they have not taken
and will not take any action, either before or after the Closing, which could
cause Mergers, taken together, to fail to qualify as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code.
               (iv) Parent warrants that it will own all of the interests in the
Successor LLC as of the Second Effective Time, and that the Successor LLC, as of
immediately after the Second Effective Time, will have been treated as an entity
disregarded as separate from its owner pursuant to Treasury Regulations
Section 301.7701-3(b)(1)(ii) at all times since the date of its formation, and
will have never made any election effective in any other taxing jurisdiction to
be treated differently than its federal tax status.
     Section 7.06 Integration. Parent shall not, and shall use its best efforts
to ensure that no Affiliate of Parent shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any securities (as defined in
Section 2 of the Securities Act) of Parent or any of its Affiliates that would
be integrated with the offer or sale of the Parent Series A Preferred Stock
constituting the Stock Portion of the Merger Consideration in a manner that
would require the registration under the Securities Act of the sale of the
Parent Series A Preferred Stock constituting the Stock Portion of the Merger
Consideration to the Company Stockholders pursuant to this Agreement, or that
would be integrated with the offer or sale of the Parent Series A Preferred
Stock constituting the Stock Portion of the Merger Consideration for purposes of
the Nasdaq Marketplace Rules.

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     Section 7.07 Furnishing of Information; Securities Laws Disclosure.
          (a) As long as any Company Stockholder owns any shares of Parent
Series A Preferred Stock or Parent Common Stock that was converted from Parent
Series A Preferred Stock, Parent covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports
required to be filed by Parent after the Closing Date pursuant to the Exchange
Act. As long as any Company Stockholder owns any shares of Parent Series A
Preferred Stock or Parent Common Stock that was converted from Parent Series A
Preferred Stock, if Parent is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to such Company Stockholders and make
publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the shares of Parent Series A Preferred
Stock or Parent Common Stock, as applicable, under Rule 144. Parent further
covenants that it will take such further action as any holder of Parent Series A
Preferred Stock or Parent Common Stock that was converted from Parent Series A
Preferred Stock may reasonably request, to the extent required from time to time
to enable such Person to sell such securities without registration under the
Securities Act within the requirements of the exemption provided by Rule 144.
          (b) Parent shall issue a press release disclosing all material terms
of the Merger and the Transactions and file a Current Report on Form 8-K with
the SEC disclosing all material terms of the Merger and the Transactions (and
attach as an exhibit thereto this Agreement) in accordance with Applicable Law.
Parent shall provide the Representative with a draft of such press release prior
to filing and provide an opportunity for comments. In addition, Parent will make
such other filings and notices related to the Merger and the Transactions in the
manner and time required by the SEC and the Nasdaq Marketplace Rules.
     Section 7.08 Conduct of Business. The business of Parent and its
Subsidiaries shall not be conducted in violation of Applicable Law, except where
such violations would not result, either individually or in the aggregate, in a
Material Adverse Effect.
     Section 7.09 Reservation and Listing of Parent’s Stock. Parent has reserved
out of its authorized and unissued shares, and Parent shall continue to reserve
out of its authorized and unissued shares and keep available until the Closing
Date, free of preemptive rights, the number of shares of Parent Series A
Preferred Stock that constitute the Stock Portion of the Merger Consideration.
Parent has reserved out of its authorized and unissued shares, and subject to
the terms and conditions set forth in Section 4(c) of the Certificate of
Designations, Parent shall continue to reserve out of its authorized and
unissued shares and keep available at all times, free of preemptive rights,
(i) the maximum number of shares of payment-in-kind interest payments with
respect to the Parent Series A Preferred Stock (“PIK Shares”) that may be
required to be paid to holders of Parent Series A Preferred Stock in the
subsequent ninety (90) day period and (ii) a sufficient number of shares of
Parent Common Stock for the purpose of effecting the conversion of Parent
Series A Preferred Stock into the requisite number of shares of Parent Common
Stock ((i) and (ii) together, the “Additional Shares”). Parent shall use its
best efforts to comply with all requirements of the Nasdaq Marketplace Rules
with respect to the issuance and listing of Parent Common Stock (including the
Additional Shares).

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     Section 7.10 Indebtedness. After the date hereof and until the date that
all of the Parent Series A Preferred Stock that constitutes the Stock Portion of
the Merger Consideration (including the PIK Shares) has been redeemed in full or
converted into Parent Common Stock, without the prior consent of the
Representative, (i) Parent shall not, and shall not cause or permit any of its
Subsidiaries to, fail to duly observe and perform all of the covenants,
conditions and agreements expressly contained in Sections 6.01, 6.02 and 6.03 of
the Credit Agreement, dated as of June 8, 2007, as amended on August 9, 2007,
among Parent, its Affiliates named therein and Canadian Imperial Bank of
Commerce, CIBC World Markets Corp., as sole lead arranger, documentation agent
and bookrunner, CIT Lending Services Corporation, as syndication agent and
certain affiliated entities (the “Parent Credit Agreement”), such observance and
performance to be determined without regard to any amendment, waiver or consent
that may be received by Parent from any of the Lenders or the Administrative
Agent (as such terms are defined in the Parent Credit Agreement) or any
termination or replacement thereof, provided, that (A) Parent shall be permitted
to incur Permitted Subordinated Indebtedness (as such term is defined in the
Parent Credit Agreement) only as long as 50% of the net proceeds therefrom are
used immediately to redeem the Parent Series A Preferred Stock that constitutes
the Stock Portion of the Merger Consideration (including all PIK Shares)
pursuant to the Certificate of Designations, and (B) Parent shall be permitted
to incur Indebtedness in respect of Purchase Money Obligations (excluding Equity
Interests) and Capital Lease Obligations (as such terms are defined in the
Parent Credit Agreement), and refinancings and renewals thereof, up to Ten
Million Dollars ($10,000,000) in the aggregate (which is Four Million Dollars
($4,000,000) greater than the amount permitted under Section 6.01(e) of the
Parent Credit Agreement), and (ii) Parent shall not, and shall not cause or
permit any of its Subsidiaries to, take any action that could be reasonably
likely to render Parent insolvent or impede Parent’s ability to redeem the
Parent Series A Preferred Stock in accordance with the Certificate of
Designations.
     Section 7.11 Equity Interests. After the date hereof and until the date
that all of the Parent Series A Preferred Stock that constitutes the Stock
Portion of the Merger Consideration (including the PIK Shares) has been redeemed
in full or converted into Parent Common Stock, without the prior consent of the
Representative, Parent shall not, and shall not cause or permit any of its
Subsidiaries to, issue or sell any Equity Interests in Parent or any of its
Subsidiaries (including by way of sales of treasury stock) or any warrants or
options to purchase Equity Interests (including any Equity Interests issued upon
exercise of any warrant or option), or any securities convertible or
exchangeable into any Equity Interest, or accept any contribution to the capital
of Parent or any Subsidiary; provided, however, that the foregoing shall not
prohibit any such sale or issuance by Parent of its Equity Interests (A) to
directors, officers or employees of Parent pursuant to one or more stock option
plans or agreements approved by the Board of Directors of Parent or (B) with
respect to a Permitted Acquisition (as such term is defined in the Parent Credit
Agreement) as long as the Equity Interests issued and sold are not senior to or
pari passu with the Parent Series A Preferred Stock in any respect; and provided
further, however, Parent shall be permitted to issue and sell any Equity
Interests as long as 50% of the net proceeds therefrom are used immediately to
redeem the Parent Series A Preferred Stock that constitutes the Stock Portion of
the Merger Consideration (including all PIK Shares) pursuant to the Certificate
of Designations. “Equity Interest” means any and all shares, interests,
participations or other equivalents (however designated, whether voting or
nonvoting), or any other interest or participation that confers on a person the
right to receive a share of the profits and losses of, or

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distributions of property of, such person, whether outstanding on the date
hereof or issued after the Closing Date.
     Section 7.12 Form S-3. The Registration Statement on Form S-3 (the
“Registration Statement”) to be filed with the SEC by Parent following the
Closing in connection with the resale of shares of Parent Common Stock issuable
upon conversion of the Parent Series A Preferred Stock constituting the Stock
Portion of the Merger Consideration, and pursuant to the terms of the
Registration Rights Agreement, shall, at the time the Registration Statement
becomes effective under the Securities Act and, except as otherwise advised
pursuant to the Registration Rights Agreement, for so long as the Registration
Statement remains effective, not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Registration Statement will
comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations thereunder.
ARTICLE 8
CONDITIONS TO OBLIGATION TO CLOSE
     Section 8.01 Conditions to Obligations of Each Party Under This Agreement.
The respective obligations of each Party to effect the Merger and the
Transactions related thereto shall be subject to the satisfaction at or prior to
the Effective Time of the following conditions, any or all of which may be
waived in writing by a party with respect only to itself, in whole or in part,
to the extent permitted by Applicable Law:
          (a) Company Stockholder Approval. The Company shall have received the
Requisite Stockholder Approval.
          (b) Proceedings. No Governmental Body of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, or Order (whether temporary, preliminary or permanent) which (i) is
in effect and (ii) has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger (which illegality or prohibition would
have a Material Adverse Effect on Parent and its Subsidiaries on a combined
basis with the Company and its Subsidiaries), if the Merger were consummated
notwithstanding such statute, rule, regulation, or Order; provided, however,
that prior to asserting this condition, subject to Section 6.01, each of the
Parties shall have used their best efforts to prevent the entry of any Order and
to appeal as promptly as possible any such Order that may be entered.
          (c) HSR Act. The applicable waiting period, together with any
extensions thereof, including any additional waiting period required as a
consequence of any supplemental request by a Governmental Body, under the HSR
Act shall have expired or been terminated.
          (d) Consents. All third party consents set forth on Schedule 8.01(d)
shall have been obtained by the Company and written evidence of such shall have
been delivered to Parent.
          (e) Registration Rights Agreement. A registration rights agreement in
the form attached hereto as Exhibit F (the “Registration Rights Agreement”)
shall have been executed by Parent and the Representative.

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     Section 8.02 Additional Conditions to Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to effect the Merger and the
Transactions are subject to satisfaction or waiver of the following additional
conditions:
          (a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct (without
giving effect to any limitation as to “materiality” or “Material Adverse Effect”
set forth therein) as of the Closing Date, as if made as of such time (except to
the extent such representations and warranties expressly speak as of another
date, in which case such representations and warranties shall be true and
correct as of that date), except where the failure of such representations and
warranties to be so true and correct do not, individually or in the aggregate,
have a Material Adverse Effect on the Company. Parent shall have received a
certificate signed by the Company to such effect.
          (b) Agreements and Covenants. The Company shall have performed and
complied with all of its covenants hereunder in all material respects through
the Closing, and Parent shall have received a certificate signed by the Company
to such effect.
          (c) Documents. All of the documents, instruments and agreements to be
executed and/or delivered pursuant to this Agreement (including, without
limitation, the Escrow Agreement) shall have been executed by the parties
thereto other than Parent and Merger Sub and delivered to Parent.
          (d) Material Adverse Effect. Since the date hereof, no Material
Adverse Effect on the Company shall have occurred.
          (e) Appraisal Rights. The aggregate number of Company Shares held by
Company Stockholders who have perfected appraisal rights under Section 262 of
the DGCL shall not exceed seven percent (7%) of the issued and outstanding
Company Shares.
          (f) Certificates. The Parent shall have received good standing
certificates for the Company and its Subsidiaries from their jurisdictions of
organization.
          (g) Terminations. The Termination Agreement, in the form attached
hereto as Exhibit G, shall have been executed and delivered by the Company and
the other parties named on the signature pages thereto.
     Section 8.03 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger and the Transactions is subject
to satisfaction or waiver of the following additional conditions:
          (a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub set forth in this Agreement shall be true and correct
(without giving effect to any limitation as to “materiality” or “Material
Adverse Effect” set forth therein) as of the Closing Date, as if made as of such
time (except to the extent such representations and warranties expressly speak
as of another date, in which case such representations and warranties shall be
true and correct as of that date), except where the failure of such
representations and warranties to be so true and correct do not, individually or
in the aggregate, have a Material

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Adverse Effect on the Parent or Merger Sub. The Company shall have received a
certificate signed by Parent to such effect.
          (b) Agreements and Covenants. Parent and Merger Sub shall have
performed and complied with all of their covenants hereunder in all material
respects through the Closing. The Company shall have received a certificate
signed by Parent to such effect.
          (c) Documents. All of the documents, instruments and agreements to be
executed and/or delivered pursuant to this Agreement (including, without
limitation, the Escrow Agreement) shall have been executed by the parties
thereto other than the Company and its Subsidiaries and delivered to the
Company.
          (d) Payments. Parent shall have delivered the Payoff Amount to the
Lender, the Escrow Deposit to the Escrow Agent and the Closing Merger
Consideration to the Exchange Agent, as required to be delivered pursuant to
Article 3.
          (e) Certificate of Designations. Parent shall have filed a certificate
of designations in the form attached hereto as Exhibit H (the “Certificate of
Designations”) with the Secretary of State of the State of Delaware and shall
have delivered to the Company a copy of such filing certified by the Secretary
of State of the State of Delaware and specifying the date and time of
acceptance.
ARTICLE 9
TERMINATION
     Section 9.01 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding
adoption and approval thereof by the stockholders of the Company:
          (a) By mutual written consent of Parent and the Company;
          (b) By either Parent or the Company if:
               (i) the Merger shall not have been consummated on or before the
ninetieth (90) day after the date hereof; provided, that the right to terminate
this Agreement under this Section 9.01(b) shall not be available to any Party
whose willful failure to fulfill any material obligation under this Agreement
has been the cause of, or resulted in, the failure of the Merger to have been
consummated on or before such date; or
               (ii) a Governmental Body shall have issued an Order or taken any
other action, in each case which has become final and non-appealable and which
restrains, enjoins or otherwise prohibits the Merger.
          (c) By Parent, if neither Parent nor Merger Sub is in material breach
of its obligations under this Agreement, and if (i) any of the representations
and warranties of the Company herein become untrue or inaccurate such that
Section 8.02(a) would not be satisfied or (ii) there has been a breach on the
part of the Company of any of its covenants or agreements contained in this
Agreement such that Section 8.02(b) would not be satisfied, and, in both case

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(i) and case (ii), such breach (if curable) has not been cured within fifteen
(15) days after written notice to the Company;
          (d) By the Company, if it is not in material breach of its obligations
under this Agreement, and if (i) at any time that any of the representations and
warranties of Parent or Merger Sub herein become untrue or inaccurate such that
Section 8.03(a) would not be satisfied or (ii) there has been a breach on the
part of Parent or Merger Sub of any of their respective covenants or agreements
contained in this Agreement such that Section 8.03(b) would not be satisfied,
and, in case of (i) or (ii), such breach (if curable) has not been cured within
fifteen (15) days after written notice to Parent;
          (e) By Parent or the Company, if the Board of Directors of the Company
shall have withdrawn or modified in a manner adverse to Parent or Merger Sub,
its recommendation or approval of the Merger or the Transactions; or
          (f) By the Parent, if the Requisite Stockholder Approval shall not
have been obtained within two (2) Business Days after the date hereof; provided
that (x) the conditions precedent in the Parent Credit Agreement have been fully
satisfied and the proceeds of the Financing are immediately available to
consummate the Merger and the other Transactions and (y) neither Parent nor
Merger Sub are in material breach of their obligations under this Agreement.
          (g) By the Company if, within two (2) Business Days after the date
hereof, (x) Parent has not fully satisfied all conditions precedent under the
Parent Credit Agreement or the proceeds for the Financing are not immediately
available to consummate the Merger and the other Transactions and (y) the
Company is not in material breach of its obligations under this Agreement.
     Section 9.02 Effect of Termination.
          (a) In the event of the termination of this Agreement pursuant to
Section 9.01, this Agreement (other than this Section 9.02, Section 6.03, the
last sentence of Section 6.04 and Sections 11.01, 11.03 11.05, 11.07, 11.08,
11.09 and 11.10, which shall survive such termination) shall forthwith become
void, and, except as set forth in this Section 9.02, there shall be no liability
on the part of any Party or any of their respective officers or directors to the
other and all rights and obligations of any Party shall cease, except that
nothing herein shall relieve any Party from liability for any material breach,
prior to termination of this Agreement in accordance with its terms, of any
covenant or agreement contained in this Agreement nor from liability for any
material and willful breach, prior to termination of this Agreement in
accordance with its terms, of any representation or warranty contained in this
Agreement.
          (b) In the event that this Agreement is terminated by Parent pursuant
to Section 9.01(e) or (f), then the Company shall pay to Parent, by wire
transfer in immediately available funds, within five (5) Business Days after
such termination, a termination fee equal to One Million Four Hundred Thousand
Dollars ($1,400,000); provided that such termination fee shall not be payable
unless at the time of termination (x) the conditions precedent in the Parent
Credit Agreement have been fully satisfied and the proceeds of the Financing are
immediately

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available to consummate the Merger and the other Transactions and (y) neither
Parent nor Merger Sub are in material breach of their obligations under this
Agreement.
          (c) In the event that this Agreement is terminated by the Company
pursuant to Section 9.01(g), then Parent or the Merger Sub shall pay to the
Company, by wire transfer in immediately available funds, within five
(5) Business Days after such termination, a termination fee equal to One Million
Four Hundred Thousand Dollars ($1,400,000).
ARTICLE 10
INDEMNIFICATION
     Section 10.01 Indemnification of Parent by Resort to Escrow. Subject to the
limitations set forth in Section 10.05, from and after the Effective Time,
Parent and the Surviving Corporation and their respective officers, directors,
employees, Affiliates, and agents (the “Parent Indemnified Parties”), shall be
entitled to indemnification by recovery from the Escrow Deposit, (A) any and all
losses, costs, expenses (including, without limitation, reasonable attorneys’
and independent accountants’ fees and disbursements), liabilities, damages
(excluding incidental, special, consequential or punitive damages), fines,
penalties, charges, assessments, judgments and settlements (individually, a
“Loss” and collectively, “Losses”) that the Parent Indemnified Parties incur
arising out of (i) any inaccuracy of any representation or the breach of any
warranty made by the Company in Article 4 of this Agreement, (ii) any
nonfulfillment of any covenant or agreement made by the Company in this
Agreement, which has not been cured (to the extent reasonably capable of being
cured) within fifteen (15) days after written notice thereof to the Company and
the Representative and/or (iii) the Indemnified Taxes and (B) one-half of any
and all Losses (x) reasonably incurred in obtaining the consent listed in
Schedule 10.01 or in obtaining any license acquired as a result of failing to
obtain the consent listed in Schedule 10.01 or (y) from any breach of contract
claim against the Surviving Corporation resulting from the failure to obtain
such consent.
     Section 10.02 Indemnification by Parent. From and after the Effective Time,
Parent shall defend, indemnify and hold the Company Stockholders and their
respective officers, directors, employees, Affiliates, and agents (the
“Stockholder Indemnified Parties”), harmless from and against any and all Losses
that the Stockholder Indemnified Parties incur arising out of (i) any inaccuracy
of any representation or the breach of any warranty made by Parent or Merger Sub
in Article 5 of this Agreement, and/or (ii) any nonfulfillment of any covenant
or agreement made by Parent or Merger Sub in this Agreement, which has not been
cured (to the extent reasonably capable of being cured) within fifteen (15) days
after written notice thereof to Parent.
     Section 10.03 Third Party Claims.
          (a) In the event that any Parent Indemnified Party desires to make a
claim against the Escrow Deposit or any Stockholder Indemnified Party desires to
make a claim against Parent, in each case in connection with any third party
litigation, arbitration, action suit, proceeding, claim, investigation or demand
at any time instituted against or made upon it for which it may seek
indemnification hereunder (a “Third Party Claim”), the Indemnified Party shall
promptly notify the Indemnification Control Person of such Third Party Claim and
the Indemnified Party’s claim for indemnification with respect thereto after
obtaining notice of such

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Third Party Claim; provided, that failure to promptly give such notice will not
relieve the Indemnifying Party of its indemnification obligations under this
Article 10, except to the extent, if any, that the Indemnifying Party has
actually been prejudiced thereby.
          (b) The Indemnification Control Person will have the right to assume
the defense of the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party by written notice to the Indemnified Party
within twenty (20) days after the Indemnification Control Person has received
notice of the Third Party Claim; provided, however, that the Indemnified Party
shall not be required to permit such an assumption of the defense of any Third
Party Claim that, if not first paid, discharged or otherwise complied with,
would result in a Material Adverse Effect on the Indemnified Party.
          (c) The assumption of the defense of any Third Party Claim by the
Indemnification Control Person shall not constitute an admission of
responsibility to indemnify the Indemnified Party or in any manner impair or
restrict the Indemnifying Party’s rights to later be reimbursed its costs and
expenses if indemnification under this Agreement with respect to such claim,
investigation or proceeding was not required. The Indemnification Control Person
shall not, in the defense of such claim, consent to the entry of any judgment
(other than a judgment of dismissal on the merits without costs) or enter into
any settlement without the written consent of the Indemnified Party (which
consent shall not be unreasonably withheld, delayed or conditioned), except that
no such consent shall be required if (i) there is no finding or admission of any
violation of any Applicable Law, (ii) the sole relief provided is monetary
damages that are reimbursed in full as Losses (subject to, with respect to
claims by the Parent Indemnified Parties, the remaining Deductible Amount, if
any, which will be paid by the Parent Indemnified Party, and the indemnification
limits set forth in this Agreement), and (iii) (except in respect of any claim
relating to Taxes) the settlement shall include the giving by the claimant or
the plaintiff to the Indemnified Party a release from all liability in respect
to such claim or litigation.
          (d) If the Indemnification Control Person assumes the defense of a
Third Party Claim, the Indemnified Party shall be entitled to participate in the
defense of the claim, but solely by observation and comment to the
Indemnification Control Person, and any counsel selected by the Indemnified
Party shall not appear on its behalf in any Proceeding arising hereunder. The
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it to participate in its defense.
          (e) If the Indemnification Control Person does not assume the defense
of a Third Party Claim or any litigation resulting therefrom after receipt of
notice of such Third Party Claim from the Indemnified Party under (a) or
(b) above, the Indemnified Party may defend against such claim in such manner as
it reasonably deems appropriate. The Indemnified Party may not settle such claim
without the written consent of the Indemnification Control Person, which consent
shall not be unreasonably withheld, delayed, or conditioned.
          (f) The Parent Indemnified Parties and the Stockholder Indemnified
Parties shall cooperate in good faith and in all respects with the
Indemnification Control Person and its representatives (including, without
limitation, its counsel) in the investigation, negotiation, settlement, trial
and/or defense of any Third Party Claim (and any appeal arising therefrom).

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The Parties shall cooperate with each other in any notifications to and
information requests of any insurers. No individual representative of any
Indemnifying Party, or any Indemnifying Party’s Affiliates, shall be personally
liable for any Loss or Losses under this Agreement, except as specifically
agreed to by said individual representative.
     Section 10.04 Payment of Claims.
          (a) In the event that any Parent Indemnified Party desires to seek
indemnification under this Article 10, the Parent Indemnified Party shall give
reasonably prompt written notice to the Indemnification Control Person
specifying the facts constituting the basis for such claim and the amount, to
the extent known, of the claim asserted. If the Indemnification Control Person
disputes such claim for indemnification, it shall notify the Parent Indemnified
Party within thirty (30) days after its receipt of the notice of such claim for
indemnification, whereupon the Parent Indemnified Party and the Indemnification
Control Person shall meet and attempt in good faith to resolve their differences
with respect to such claim for indemnification. If the dispute has not been
resolved within thirty (30) days after such parties first met to attempt a
resolution, either the Indemnification Control Person or the Parent Indemnified
Party may initiate litigation in accordance with Section 11.10 of this
Agreement. If the Indemnification Control Person does not dispute such claim for
indemnification, the Escrow Agent shall, to the extent jointly requested by the
Indemnification Control Person and the Parent Indemnified Party, deliver to the
Parent Indemnified Party a number of shares of Parent Series A Preferred Stock
(or Parent Common Stock issued upon conversion of Parent Series A Preferred
Stock), the value of which (as determined in accordance with Section 10.04(c))
shall be equal to the amount of such claim, from the Escrow in accordance with
the terms of the Escrow Agreement (subject to the provisions of
Section 10.04(d)).
          (b) In the event that any Stockholder Indemnified Party desires to
seek indemnification under this Article 10, the Stockholder Indemnified Party
shall give reasonably prompt written notice to Parent specifying the facts
constituting the basis for such claim and the amount, to the extent known, of
the claim asserted. If Parent disputes such claim for indemnification, it shall
notify the Stockholder Indemnified Party within thirty (30) days after its
receipt of the notice of such claim for indemnification, whereupon Parent and
the Stockholder Indemnified Party shall meet and attempt in good faith to
resolve their differences with respect to such claim for indemnification. If the
dispute has not been resolved within thirty (30) days after such parties first
met to attempt a resolution, either the Stockholder Indemnified Party or Parent
may initiate litigation in accordance with Section 11.10 of this Agreement. If
Parent does not dispute such claim for indemnification, Parent shall pay, or
shall cause the Surviving Corporation to pay, the Stockholder Indemnified Party
an amount in cash equal to the amount of such claim.
          (c) For purposes of this Article 10, the value of each share of Parent
Series A Preferred Stock as of any particular time shall be deemed to be the
“Redemption Price” of such share, as such term is defined in the Certificate of
Designations, and the value of each share of Parent Common Stock issued upon
conversion of Parent Series A Preferred Stock shall be deemed to be Eight
Dollars ($8.00), plus any accrued but unpaid dividends (as appropriately
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or general distribution of securities
convertible into or exchangeable or exercisable

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for any capital stock of Parent), reclassification, reorganization,
recapitalization or other like change occurring after the date hereof).
          (d) Notwithstanding any other provision of this Agreement, with
respect to any claim for indemnification, the Representative shall have the
option, in its sole discretion, to pay the Parent Indemnified Party an amount in
cash equal to the number of shares of Parent Series A Preferred Stock or Parent
Common Stock that the Escrow Agent would have delivered to such Parent
Indemnified Party with respect to such claim multiplied by the value of such
shares (as determined in accordance with Section 10.04(c)), in which case the
Parent Indemnified Party and the Representative shall deliver joint written
instructions to the Escrow Agent to deliver such number of shares of Parent
Series A Preferred Stock to the applicable Company Stockholders pursuant to the
terms of this Agreement and the Escrow Agreement.
          (e) The Parties agree that the payment of any indemnity under this
Article 10 shall be treated as an adjustment to the Merger Consideration paid by
Parent hereunder for Tax purposes to the extent that it may properly be so
characterized under Applicable Law.
     Section 10.05 Limitations on Indemnification. No claim may be made against
the Escrow Deposit unless and until the Parent Indemnified Parties have
sustained aggregate Losses for which the Parent Indemnified Parties are entitled
to indemnification pursuant to this Agreement in excess of Three Hundred
Twenty-Five Thousand Dollars ($325,000) in the aggregate (the “Deductible
Amount”) and then only to the extent such aggregate amount exceeds the
Deductible Amount. Notwithstanding any other provision in this Agreement to the
contrary, the maximum aggregate recovery of all Parent Indemnified Parties shall
not exceed an amount equal to the Escrow Deposit.
     Section 10.06 Exclusive Remedy. The Parties acknowledge and agree that, the
indemnification in this Article 10 shall be the sole and exclusive remedies of
the Parties and their Affiliates for any and all Losses or any other liabilities
sustained or incurred by the Parties or their Affiliates or their successors and
assigns, in connection with, this Agreement, the Merger or otherwise arising out
of the transactions contemplated hereby and the Parties each waive any other
remedy, which they, or any other Person entitled to indemnification hereunder,
may have hereunder, at law, in equity or otherwise with respect hereto. Once any
portion of the Escrow is released to the Exchange Agent pursuant to the Escrow
Agreement, the Parent Indemnified Parties shall have no further claim to such
amounts.
     Section 10.07 Effect of Insurance, Taxes and Other Recoveries. The amount
of any Losses for which indemnification is provided under this Article 10 shall
be reduced by (a) any amounts that are recovered by the Indemnified Party or any
of its Affiliates from any Third Party, (b) any insurance proceeds or other cash
receipts or source of reimbursement that are received by the Indemnified Party
or any of its Affiliates with respect to such Losses (each source named in
clauses (a) and (b), a “Collateral Source”) and (c) an amount of any net Tax
benefit, if any, available to the Indemnified Party or its Affiliates
attributable to such Losses. The Indemnified Party shall, and shall cause its
Affiliates to, diligently pursue all available remedies and causes of action to
recover the amount of its claim as may be available from any Collateral Source.
In the event an Indemnifying Party indemnifies an Indemnified Party on any claim
referred to in the previous sentence and the Indemnified Party is not pursuing
such claim,

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the Indemnified Party shall assign to the Indemnifying Party, to the fullest
extent allowable, its rights and causes of action with respect to such claim, or
in the event assignment is not permissible, the Indemnifying Party shall be
allowed to pursue such claim in the name of the Indemnified Party or its
Affiliate, at the Indemnifying Party’s expense. The Indemnified Party shall
provide the Indemnifying Party reasonable assistance in prosecuting such claim,
including making the Indemnified Party’s books and records relating to such
claim available and making its and its Affiliates’ employees available for
interviews, depositions, testimony and similar matters. If any amount to be
reduced under this Section 10.07 from any payment required under the Article 10
is determined after the date on which the Indemnifying Party is required
pursuant to this Article 10 to pay such indemnification claim, the Indemnified
Party shall promptly reimburse the Indemnifying Party any amount that the
Indemnifying Party would not have had to pay pursuant to this Article 10 had
such determination been made at the time of such payment. For purposes of this
Article 10, the amount of the Losses relating to any item reflected as a
liability in the Company Financial Statements or incurred in the Ordinary Course
of Business prior to the Closing Date shall be calculated net of the amount so
reflected or incurred.
     Section 10.08 No Double Recovery. Notwithstanding the fact that any Person
may have the right to assert claims for indemnification under or in respect of
more than one provision of this Agreement in respect to any fact, event,
condition or circumstance, no Person will be entitled to recover the amount of
any Losses suffered by such Person more than once under both this Agreement and
the Ancillary Documents in respect of such fact, event, condition or
circumstance, and an Indemnifying Party will not be liable for indemnification
to the extent such Loss was reflected in the Company Financial Statements or
incurred in the Ordinary Course of Business prior to the Closing Date.
     Section 10.09 Survival of Representations, Warranties and Covenants. The
representations and warranties in this Agreement or any Ancillary Document
delivered by or on behalf of the Parties hereto shall survive the Closing for a
period of nine (9) months after the Closing Date. The covenants and agreements
of the Parties to be wholly performed prior to the Closing shall survive the
Closing for a period of nine (9) months after the Closing Date and the other
covenants or agreements to be performed at or after the Closing shall survive
the Closing until fully performed. No claim for breach of such representations,
warranties or covenants may be brought, and no action with respect thereto may
be commenced, and no Party shall have any liability or obligation with respect
thereto, unless the Indemnified Party gave written notice to the Indemnifying
Party, specifying with particularity the breach of the representation or
warranty claimed, on or before the expiration of the applicable survival period,
in which case the right of the Party providing such written notice to assert its
right to indemnification as to the matters so noticed shall not expire until the
dispute is resolved under the terms of this Agreement.
ARTICLE 11
MISCELLANEOUS
     Section 11.01 Expenses. All costs and expenses (including legal fees and
expenses) arising from, incurred in connection with or incident to this
Agreement, the Ancillary Documents and the Transactions (each a “Transaction
Expense”) incurred by Parent (including without limitation the commissions, fees
or other compensation of Parent’s Broker) shall be borne by Parent. All
Transaction Expenses incurred by the Company or any Company Stockholder

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(including without limitation the commissions, fees or other compensation of the
Company’s Broker) (“Company Transaction Expenses”) shall be borne by the
Company. Any amounts payable by the Company at the Closing for the Employee
Transaction Bonuses shall be deemed to be Company Transaction Expenses. At or
immediately prior to the Effective Time, the Company shall pay all of the unpaid
Company Transaction Expenses that it is obligated to pay hereunder and such
Company Transaction Expenses shall reduce the Merger Consideration in accordance
with Section 3.01(a). All transfer, documentary, sales, use, stamp, registration
and other such Taxes (including real estate transfer taxes), and all conveyance
fees, recording charges and other fees and charges (including any penalties and
interest) incurred in connection with the consummation of the Transactions shall
be a Transaction Expense of Parent and shall be paid either by Parent or the
Surviving Corporation, as applicable, when due (unless disputed by Parent in
good faith). Parent shall, at its own expense, prepare and cause to be filed all
necessary Tax Returns and other documentation with respect to all such Taxes,
fees and charges, and, if required by Applicable Law, the Parties shall, and
shall cause their Affiliates to, join in the execution of any such Tax Returns
and other documentation.
     Section 11.02 No Third-Party Beneficiaries. Except as otherwise set forth
in Article 1, Section 3.09, Section 7.03 and Article 10 herein, this Agreement
shall not confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns, except that it is
expressly agreed that the Company Stockholders, the Option Holders and the
Warrant Holders are intended beneficiaries of Sections 7.06 through 7.12
(inclusive).
     Section 11.03 Entire Agreement. This Agreement, including the Company
Disclosure Schedules, the Parent Disclosure Schedules and Exhibits attached
hereto, the Escrow Agreement, the Confidentiality Agreement and the other
documents referred to herein, constitute the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
     Section 11.04 Incorporation of Exhibits and Schedules. The Company
Disclosure Schedules and the Parent Disclosure Schedules and the Exhibits
attached hereto are incorporated herein by reference and made a part hereof. Any
information or matter disclosed in any schedule of the Company Disclosure
Schedules or Parent Disclosure Schedules shall be deemed disclosed in each and
every other schedule of such disclosure schedules regardless of whether a
specific cross-reference is made. The disclosure of a particular matter in the
Company Disclosure Schedules shall not be taken as an admission by the Company
that such disclosure is required to be made under the terms hereof. Where any
information set forth in the Company Disclosure Schedules comprises expressions
of opinion, no warranty is given as to their accuracy.
     Section 11.05 Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of Parent and the Company.
     Section 11.06 Counterparts and Facsimile Signatures. This Agreement may be
executed in two (2) or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
The counterparts of this Agreement may

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be executed and delivered by facsimile signature by any of the Parties to any
other Party and the receiving Party may rely on the receipt of such document so
executed and delivered by facsimile as if the original had been received.
     Section 11.07 Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
     Section 11.08 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given upon receipt;
provided that if delivered on a date that is not a Business Day or after 5:00
p.m. on a Business Day (in each case at the place of delivery), such notice,
request, demand, claim or other communication shall be deemed delivered on the
next succeeding Business Day; provided, further that such notice, request,
demand, claim or other communication is delivered to the applicable Party at the
Party’s address or facsimile number as set forth below,
          (a) If to Parent or Merger Sub, addressed to it at:
400 Minuteman Road
Andover, Massachusetts 01810
Facsimile: (978) 946-7803
Attention: James W. Pluntze
with a copy to:
BRL Law Group LLC
31 St. James Avenue, Suite 850
Boston, MA 02116
Facsimile: (617) 399-6930
Attention: Thomas B. Rosedale, Esq.
          (b) If to the Company prior to the Effective Time, addressed to it at:
13530 Dulles Technology Drive
Suite 110
Herndon, VA 20171
Facsimile: 703-561-0460
Attention: Craig D. Norman
with a copy to:
Morrison & Foerster LLP
1650 Tysons Boulevard
Suite 400
McLean, Virginia 22102

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Telephone: (703) 760-7318
Facsimile: (703) 760-7777
Attention: Lawrence T. Yanowitch, Esq.
          (c) If to the Representative or to the Company after the Effective
Time, addressed to it at:
c/o GTCR Golder Rauner, LLC
6100 Sears Tower
Chicago, Illinois 60606
Facsimile: (312) 382-2201
Attention: Philip A. Canfield
with a copy to:
Morrison & Foerster LLP
1650 Tysons Boulevard
Suite 400
McLean, Virginia 22102
Telephone: (703) 760-7318
Facsimile: (703) 760-7777
Attention: Lawrence T. Yanowitch, Esq.
     Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
     Section 11.09 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
     Section 11.10 Jurisdiction; Waiver of Jury Trial. Except for disputes to be
resolved under Section 7.05(a), the Parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the Transactions shall
be brought in any federal court located in the State of Delaware or any Delaware
state court with jurisdiction over Wilmington, Delaware, and each of the Parties
hereby irrevocably consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 11.08 shall be deemed effective service of
process on such party. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL

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PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
     Section 11.11 Amendments and Waivers. This Agreement may be amended by the
Parties at any time prior to or following the Company’s receipt of the Requisite
Stockholder Approval; provided, however, that there shall be no amendment that
by Applicable Law requires further approval of the Company’s Common Stockholders
without the approval of such stockholders. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Parties. No waiver by any Party of any provision of this Agreement or any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless the same shall be in writing and
signed by the Party making such waiver, nor shall such waiver be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
     Section 11.12 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
     Section 11.13 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. The words “including,” “include” or “includes”
shall mean including without limitation. The Parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time, and to the rules and regulations
promulgated thereunder.

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     Section 11.14 Acknowledgements by Parent and Merger Sub. Parent and Merger
Sub acknowledge that they have relied on the representations and warranties of
the Company expressly and specifically set forth in Article 4 of this Agreement,
including the Company Disclosure Schedules and Parent Disclosure Schedules (and
any updates thereto). SUCH REPRESENTATIONS AND WARRANTIES BY THE COMPANY
CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF THE COMPANY
TO PARENT AND MERGER SUB IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY, AND PARENT AND MERGER SUB UNDERSTAND, ACKNOWLEDGE AND AGREE THAT ALL
OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESSED OR IMPLIED
(INCLUDING, BUT NOT LIMITED TO, ANY RELATING TO THE FUTURE FINANCIAL CONDITION,
RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE COMPANY AND ANY SET FORTH IN
THE CONFIDENTIAL INFORMATION PREVIOUSLY DELIVERED TO PARENT), ARE SPECIFICALLY
DISCLAIMED BY THE COMPANY AND THE COMPANY STOCKHOLDERS.
     Section 11.15 Specific Performance. The Parties hereto agree that if, on or
prior to the Closing Date, any of the provisions of this Agreement or any other
document contemplated by this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and, therefore, prior to the Closing Date, the Parties shall be
entitled to specific performance of the terms hereof and thereof.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.

            COMPANY:

NETASPX, INC.
      By:   /s/ John M. Whiteside       Name:   John M. Whiteside      Title:  
President & CEO        PARENT:

NAVISITE, INC.
      By:   /s/ James W. Pluntze       Name:   James W. Pluntze      Title:  
Chief Financial Officer        MERGER SUB:

NSITE ACQUISITION CORP.
      By:   /s/ James W. Pluntze       Name:   James W. Pluntze      Title:  
Chief Financial Officer     

ACKNOWLEDGED AND AGREED:
REPRESENTATIVE:
GTCR FUND VI, L.P.
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Golder Rauner, L.L.C.
Its: General Partner

         
By:
  /s/ Philip A. Canfield
 
    Name: Philip A. Canfield     Title: Principal    

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AGREEMENT AND PLAN OF MERGER
by and among
NETASPX, INC.,
NAVISITE, INC.,
NSITE ACQUISITION CORP.,
and
GTCR FUND VI, L.P.
SEPTEMBER 12, 2007

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TABLE OF CONTENTS

              Page  
Article 1 DEFINITIONS
    1  
Section 1.01 Defined Terms
    1  
Article 2 THE MERGER
    12  
Section 2.01 The Merger
    12  
Section 2.02 Closing and Effective Time
    12  
Section 2.03 Effect of the Merger
    12  
Section 2.04 Certificate of Incorporation; Bylaws
    12  
Section 2.05 Directors and Officers
    12  
Section 2.06 The LLC Merger
    13  
Section 2.07 Second Effective Time
    13  
Section 2.08 Effect of the LLC Merger
    13  
Section 2.09 Certificate of Formation
    13  
Section 2.10 Effect of LLC Merger on Stock of Surviving Corporation
    13  
Article 3 MERGER CONSIDERATION; CONVERSION OF SECURITIES; EXCHANGE OF
CERTIFICATES
    14  
Section 3.01 Calculation and Payment of the Merger Consideration
    14  
Section 3.02 Effect on Capital Stock
    15  
Section 3.03 Options and Warrants
    16  
Section 3.04 Restricted Stock
    17  
Section 3.05 Payment of Merger Consideration.
    17  
Section 3.06 No Liability
    19  
Section 3.07 Lost, Stolen and Destroyed Certificates
    19  
Section 3.08 Return of Merger Consideration
    19  
Section 3.09 The Representative
    19  
Article 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    21  
Section 4.01 Corporate Existence and Power
    21  
Section 4.02 Corporate Authorization
    21  
Section 4.03 Capitalization
    22  
Section 4.04 Governmental Authorization
    22  
Section 4.05 Noncontravention
    22  

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TABLE OF CONTENTS
(continued)

              Page  
Section 4.06 Subsidiaries
    23  
Section 4.07 Financial Statements
    23  
Section 4.08 Events Subsequent
    24  
Section 4.09 No Undisclosed Liabilities
    25  
Section 4.10 Taxes
    25  
Section 4.11 Properties
    27  
Section 4.12 Intellectual Property
    28  
Section 4.13 Contracts
    29  
Section 4.14 Legal Compliance
    30  
Section 4.15 Proceedings and Orders
    30  
Section 4.16 Labor Matters
    30  
Section 4.17 Employee Benefit Plans
    31  
Section 4.18 Environmental Matters
    32  
Section 4.19 Insurance
    32  
Section 4.20 Affiliate Transactions
    33  
Section 4.21 Brokers
    33  
Section 4.22 Customers and Suppliers
    33  
Section 4.23 Accounts Receivable
    33  
Section 4.24 Permits
    33  
Section 4.25 Purchase for Own Account; Accredited Investor
    34  
Section 4.26 Disclaimer of Other Representations and Warranties
    34  
Article 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
    34  
Section 5.01 Corporate Existence and Power
    34  
Section 5.02 Ownership of Merger Sub; No Prior Activities
    35  
Section 5.03 Corporate Authorization
    35  
Section 5.04 Governmental Authorization
    35  
Section 5.05 Noncontravention
    35  
Section 5.06 Proceedings and Orders
    36  
Section 5.07 Financing
    36  

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TABLE OF CONTENTS
(continued)

              Page  
Section 5.08 Purchase for Own Account: Accredited Investor
    36  
Section 5.09 Brokers
    37  
Section 5.10 Capitalization
    37  
Section 5.11 Parent Series A Preferred Stock
    38  
Section 5.12 Financial Statements
    38  
Section 5.13 Events Subsequent
    39  
Section 5.14 No Undisclosed Liabilities
    40  
Section 5.15 Legal Compliance
    40  
Section 5.16 Affiliate Transactions
    40  
Section 5.17 SEC Filings; Nasdaq; Information Supplied; S-3 Eligibility
    40  
Section 5.18 Solvency
    41  
Section 5.19 Disclaimer of Other Representations and Warranties
    41  
Article 6 PRE-CLOSING COVENANTS
    42  
Section 6.01 Reasonable Best Efforts
    42  
Section 6.02 Operation of Business
    43  
Section 6.03 Publicity
    44  
Section 6.04 Access
    45  
Section 6.05 Stockholder Consent
    45  
Section 6.06 No Solicitation.
    45  
Section 6.07 Cooperation for Payoff Amount
    47  
Section 6.08 Financing
    47  
Section 6.09 Parent Dividends; Changes in Stock
    48  
Section 6.10 Parent Governing Documents
    49  
Article 7 POST-CLOSING COVENANTS
    49  
Section 7.01 General
    49  
Section 7.02 Employee Matters
    49  
Section 7.03 Directors’ and Officers’ Indemnification
    50  
Section 7.04 Consents and Approvals
    51  
Section 7.05 Tax Matters
    51  
Section 7.06 Integration
    56  

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TABLE OF CONTENTS
(continued)

              Page  
Section 7.07 Furnishing of Information; Securities Laws Disclosure
    56  
Section 7.08 Conduct of Business
    57  
Section 7.09 Reservation and Listing of Parent’s Stock
    57  
Section 7.10 Indebtedness
    57  
Section 7.11 Equity Interests
    58  
Section 7.12 Form S-3
    58  
Article 8 CONDITIONS TO OBLIGATION TO CLOSE
    58  
Section 8.01 Conditions to Obligations of Each Party Under This Agreement
    58  
Section 8.02 Additional Conditions to Obligations of Parent and Merger Sub
    59  
Section 8.03 Additional Conditions to Obligations of the Company
    60  
Article 9 TERMINATION
    61  
Section 9.01 Termination
    61  
Section 9.02 Effect of Termination
    62  
Article 10 INDEMNIFICATION
    62  
Section 10.01 Indemnification of Parent by Resort to Escrow
    62  
Section 10.02 Indemnification by Parent
    63  
Section 10.03 Third Party Claims
    63  
Section 10.04 Payment of Claims
    64  
Section 10.05 Limitations on Indemnification
    65  
Section 10.06 Exclusive Remedy
    66  
Section 10.07 Effect of Insurance, Taxes and Other Recoveries
    66  
Section 10.08 No Double Recovery
    66  
Section 10.09 Survival of Representations, Warranties and Covenants
    67  
Article 11 MISCELLANEOUS
    67  
Section 11.01 Expenses
    67  
Section 11.02 No Third-Party Beneficiaries
    67  
Section 11.03 Entire Agreement
    68  
Section 11.04 Incorporation of Exhibits and Schedules.
    68  
Section 11.05 Succession and Assignment
    68  
Section 11.06 Counterparts and Facsimile Signatures
    68  

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TABLE OF CONTENTS
(continued)

              Page  
Section 11.07 Headings
    68  
Section 11.08 Notices
    68  
Section 11.09 Governing Law
    70  
Section 11.10 Jurisdiction; Waiver of Jury Trial
    70  
Section 11.11 Amendments and Waivers
    70  
Section 11.12 Severability
    70  
Section 11.13 Construction
    71  
Section 11.14 Acknowledgements by Parent and Merger Sub
    71  
Section 11.15 Specific Performance
    71  

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TABLE OF CONTENTS

              Page  
Exhibits:
       
 
       
Exhibit A            Form of Certificate of Incorporation of Surviving
Corporation
       
Exhibit B            Form of Bylaws of Surviving Corporation
       
Exhibit C            Form of Escrow Agreement
       
Exhibit D            Form of Exchange Agent Agreement
       
Exhibit E            Form of Letter of Transmittal
       
Exhibit F            Form of Registration Rights Agreement
       
Exhibit G            Form of Termination Agreement
       
Exhibit H            Form of Certificate of Designations
       

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