EXHIBIT 10.2
 

 
 
 
 
 
 
AGREEMENT AND PLAN OF MERGER
 
by and among
 
INTERCONTINENTALEXCHANGE, INC.,
 
COLUMBIA MERGER CORPORATION,
 
CREDITEX GROUP INC.,
 
and
 
TA ASSOCIATES, INC., as the Stockholders’ Representative
(for the limited purposes described herein)
 
June 3, 2008
 
 
 
 
 
 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                              Page ARTICLE I THE MERGER     2  
 
  Section 1.1   The Merger     2  
 
  Section 1.2   Effective Time     2  
 
  Section 1.3   Certificate of Incorporation and By-Laws     2  
 
  Section 1.4   Closing     2  
 
  Section 1.5   Directors and Officers     2  
 
                ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS     3  
 
  Section 2.1   Effect on Capital Stock     3  
 
  Section 2.2   Company Stock Options and Related Matters     9  
 
  Section 2.3   Payments at Closing for Indebtedness     11  
 
  Section 2.4   Payments at Closing for Expenses     11  
 
  Section 2.5   Closing and Post-Closing Adjustments     11  
 
  Section 2.6   Expense Amount     14  
 
  Section 2.7   Escrow Funds     14  
 
  Section 2.8   Other Adjustments     15  
 
  Section 2.9   Fractional Shares     16  
 
  Section 2.10   Private Placement; Non-Accredited Investors     16  
 
  Section 2.11   Cash Election     17  
 
                ARTICLE III EXCHANGE FOR SHARES; DISSENTING SHARES     18  
 
  Section 3.1   Cash Election Procedure     18  
 
  Section 3.2   Exchange for Shares of Buyer Stock or Cash     19  
 
  Section 3.3   Appraisal Rights     22  
 
                ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY     23
 
 
  Section 4.1   Existence; Good Standing; Authority     23  
 
  Section 4.2   Capitalization     24  
 
  Section 4.3   Subsidiaries     25  
 
  Section 4.4   No Conflict; Consents     26  
 
  Section 4.5   Financial Statements     27  
 
  Section 4.6   Absence of Certain Changes     27  
 
  Section 4.7   Litigation     28  
 
  Section 4.8   Taxes     28  
 
  Section 4.9   Employee Benefit Plans     31  
 
  Section 4.10   Real and Personal Property     33  
 
  Section 4.11   Labor and Employment Matters     35  
 
  Section 4.12   Contracts     36  
 
  Section 4.13   Intellectual Property     37  
 
  Section 4.14   Software     40  
 
  Section 4.15   Environmental Matters     41  
 
  Section 4.16   Insurance     42  
 
               

i

--------------------------------------------------------------------------------

 

                              Page
 
  Section 4.17   No Brokers     43  
 
  Section 4.18   Compliance with Laws     43  
 
  Section 4.19   Government Regulation     43  
 
  Section 4.20   Books and Records     46  
 
  Section 4.21   Related Party Transactions     46  
 
  Section 4.22   Foreign Assets Control     46  
 
  Section 4.23   AML Standards     46  
 
  Section 4.24   No Other Representations and Warranties; Knowledge     47  
 
                ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGERCO  
  47  
 
  Section 5.1   Existence; Good Standing     48  
 
  Section 5.2   Formation and Ownership of MergerCo; No Prior Activities     48
 
 
  Section 5.3   Capitalization     49  
 
  Section 5.4   Authority; Validity of Agreement; Necessary Action     49  
 
  Section 5.5   No Conflicts     49  
 
  Section 5.6   Governmental Approvals and Consents     49  
 
  Section 5.7   Buyer Reports; Financial Statements     49  
 
  Section 5.8   Absence of Certain Changes     50  
 
  Section 5.9   Compliance     50  
 
  Section 5.10   Brokers     50  
 
  Section 5.11   Litigation     50  
 
  Section 5.12   Inspection     51  
 
  Section 5.13   No other Representations and Warranties; Knowledge     51  
 
                ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER     52  
 
  Section 6.1   Conduct of Business Prior to Closing     52  
 
  Section 6.2   Communications     56  
 
                ARTICLE VII ADDITIONAL AGREEMENTS     56  
 
  Section 7.1   Stockholders Consent     56  
 
  Section 7.2   Access to Information     57  
 
  Section 7.3   Confidentiality     58  
 
  Section 7.4   Regulatory and Other Authorizations; Consents     58  
 
  Section 7.5   Press Releases     59  
 
  Section 7.6   No Solicitations     60  
 
  Section 7.7   Officers’ and Directors’ Indemnification     60  
 
  Section 7.8   Employee Benefit Arrangements     62  
 
  Section 7.9   Tax Matters     63  
 
  Section 7.10   Section 16(b) Matters     66  
 
  Section 7.11   Further Action     67  
 
                ARTICLE VIII CONDITIONS TO THE MERGER     67  
 
  Section 8.1   Conditions to the Obligations of Each Party to Effect the Merger
    67  
 
  Section 8.2   Additional Conditions to Obligations of Buyer and MergerCo    
67  
 
  Section 8.3   Additional Conditions to Obligations of the Company     69  
 
               

ii

--------------------------------------------------------------------------------

 

                              Page ARTICLE IX SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION     71  
 
  Section 9.1   Survival     71  
 
  Section 9.2   Buyer/MergerCo Indemnification     71  
 
  Section 9.3   Company Indemnification     72  
 
  Section 9.4   Limitations     72  
 
  Section 9.5   Notice; Defense of Claims     74  
 
  Section 9.6   Agreed Claims     75  
 
  Section 9.7   Remedies Exclusive     76  
 
  Section 9.8   Treatment of Indemnity Payments     76  
 
                ARTICLE X TERMINATION     76  
 
  Section 10.1   Termination     76  
 
  Section 10.2   Effect of Termination     78  
 
                ARTICLE XI STOCKHOLDERS’ REPRESENTATIVE     78  
 
  Section 11.1   Appointment     78  
 
  Section 11.2   Authorization     78  
 
  Section 11.3   Agency     79  
 
  Section 11.4   Indemnification and Exculpation     79  
 
  Section 11.5   Access to Information     80  
 
  Section 11.6   Reasonable Reliance     80  
 
  Section 11.7   Orders     80  
 
  Section 11.8   Removal of Stockholders’ Representative; Authority of
Stockholders’ Representative     81  
 
  Section 11.9   Expenses of the Stockholders’ Representative     81  
 
  Section 11.10   Irrevocable Appointment     81  
 
                ARTICLE XII GENERAL PROVISIONS     82  
 
  Section 12.1   Notices     82  
 
  Section 12.2   Disclosure Schedules     83  
 
  Section 12.3   Entire Agreement; No Third Party Beneficiaries     83  
 
  Section 12.4   Assignment     84  
 
  Section 12.5   Severability     84  
 
  Section 12.6   Interpretation     84  
 
  Section 12.7   Fees and Expenses     84  
 
  Section 12.8   Choice of Law/Consent to Jurisdiction     84  
 
  Section 12.9   Amendment     85  
 
  Section 12.10   Extension; Waiver     85  
 
  Section 12.11   Conflicts and Privilege     85  
 
  Section 12.12   Mutual Drafting     86  
 
  Section 12.13   Specific Performance     86  
 
  Section 12.14   Miscellaneous     86  

iii

--------------------------------------------------------------------------------

 

                                ANNEXES        
 
  Annex A   List of Defined Terms        
 
                EXHIBITS        
 
  Exhibit A   Form of Stockholder Written Consent        
 
  Exhibit B   Form of Registration Rights Agreement        
 
  Exhibit C   Form of Escrow Agreement        
 
  Exhibit D   Form of Certificate of Incorporation of Surviving Corporation    
   
 
  Exhibit E   Form of 16(b) Resolution        
 
                DISCLOSURE SCHEDULES        
 
  2.2(a)   Company Stock Plans        
 
  2.11   Employee Stockholders        
 
  4.1(a)   Existence; Good Standing; Authority        
 
  4.2(a)   Capitalization        
 
  4.2(b)   Company Options        
 
  4.3(a)   Company Subsidiaries        
 
  4.3(b)   Subsidiaries Good Standing        
 
  4.4(a)   No Conflicts        
 
  4.4(b)   Consents        
 
  4.4(c)   Claims        
 
  4.5(a)   Company Financial Statements        
 
  4.5(b)   Indebtedness and Liabilities        
 
  4.6   Absence of Certain Changes        
 
  4.7(a)   Litigation        
 
  4.8   Taxes        
 
  4.9(a)(1)   Employee Benefit Plans        
 
  4.9(a)(2)   Employee Benefit Plans (Company Non-U.S. Plans)        
 
  4.9(a)(3)   Employee Benefit Plans (ERISA Affiliates)        
 
  4.9(e)   Employee Benefit Plans (Changes in Benefit Plans)        
 
  4.9(f)   Employee Benefit Plans (Change of Control Consequences)        
 
  4.10(a)   Owned Real Property        
 
  4.10(b)   Leased Real Property        
 
  4.10(c)   Tangible Real Property        
 
  4.11(a)   Labor and Employment Matters        
 
  4.11(c)   UK Employees        
 
  4.12   Contracts        
 
  4.13(b)   Intellectual Property Licenses        
 
  4.13(c)   Registered Intellectual Property        
 
  4.13(d)   Intellectual Property — Unregistered and Common Law Marks        
 
  4.13(f)   Intellectual Property (Developed)        
 
  4.13(h)   Intellectual Property — Potential Infringements        
 
  4.13(i)   Confidential Information        
 
  4.14(a)   Company Licensed/Proprietary Software        

iv

--------------------------------------------------------------------------------

 

                               
 
  4.14(b)   Open Source Software        
 
  4.15   Environmental Matters        
 
  4.16   Insurance Policies        
 
  4.18   Compliance with Laws        
 
  4.19(a)   Governmental Permits        
 
  4.19(b)   Government Regulation        
 
  4.19(i)   Broker-Dealer Registration        
 
  4.20   Books and Records        
 
  4.21   Related Party Transactions        
 
  4.23   Anti Money Laundering Policies and Procedures        
 
  4.24(c)   Knowledge of the Company        
 
  6.1   Conduct of the Business Prior to Closing        
 
  7.8(b)   Benefit Plans        
 
  8.1(c)   Governmental Consents        
 
  8.2(f)(i)   United States Employees        
 
  8.2(f)(ii)   United Kingdom Employees        
 
  8.2(g)   Contract Consents        

v

--------------------------------------------------------------------------------

 

AGREEMENT AND PLAN OF MERGER
     THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of June 3,
2008, is by and among IntercontinentalExchange, Inc., a Delaware corporation
(“Buyer”), Columbia Merger Corporation, a Delaware corporation (“MergerCo”),
Creditex Group Inc., a Delaware corporation (the “Company”), and TA Associates,
Inc., solely in the capacity of Stockholders’ Representative and only for the
express purposes provided for herein and for no other purpose (the
“Stockholders’ Representative”). An index of defined terms used in this
Agreement is attached as Annex A hereto.
     WHEREAS, Buyer and the Company wish to effect a business combination
through a merger (the “Merger”) of MergerCo with and into the Company on the
terms and conditions set forth in this Agreement and in accordance with the
Delaware General Corporation Law, as amended (the “DGCL”);
     WHEREAS, it is intended that (a) the Merger shall qualify as a
“reorganization” within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”), and the rules and regulations
promulgated thereunder, by virtue of the provisions of Section 368(a)(2)(E) of
the Code, (b) this Agreement shall constitute a plan of reorganization for
purposes of Section 354 and 361 of the Code, and (c) that each of Buyer,
MergerCo and the Company shall be a “party to a reorganization” within the
meaning of Section 368(b) of the Code;
     WHEREAS, the Board of Directors of the Company (the “Company Board”) has
approved this Agreement, the Merger and the other transactions contemplated by
this Agreement and determined that this Agreement and the Merger are advisable
and in the best interest of the Company and its stockholders;
     WHEREAS, the respective Boards of Directors of Buyer and MergerCo have
determined that this Agreement, the Merger and the other transactions
contemplated by this Agreement are in the best interest of Buyer and MergerCo,
respectively;
     WHEREAS, immediately following the execution and delivery of this
Agreement, the Company shall use commercially reasonable efforts to obtain from
all of its stockholders an irrevocable and unconditional action by written
consent adopting this Agreement and approving the Merger, substantially in the
form attached hereto as Exhibit A (the “Stockholder Written Consent”); and
     WHEREAS, concurrently with the execution and delivery of this Agreement,
Buyer shall enter into a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit B (the “Registration Rights Agreement”), with
certain Stockholders of the Company, and Buyer shall enter into an Escrow
Agreement, substantially in the form attached hereto as Exhibit C (the “Escrow
Agreement”), with the Stockholders’ Representative,
     NOW THEREFORE, in consideration of the mutual agreements and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

--------------------------------------------------------------------------------

 

ARTICLE I
THE MERGER
     Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement and in accordance with the DGCL, at the Effective Time (as defined in
Section 1.2), the Company and MergerCo shall consummate the Merger pursuant to
which (a) MergerCo shall be merged with and into the Company and the separate
corporate existence of MergerCo shall thereupon cease, (b) the Company shall be
the surviving corporation in the Merger (the “Surviving Corporation”) and shall
continue to be governed by the Laws of the State of Delaware, and (c) the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall have the effects specified in the DGCL.
     Section 1.2 Effective Time. On the Closing Date (as defined in
Section 1.4), MergerCo and the Company shall duly execute a certificate of
merger (the “Certificate of Merger”) and file such Certificate of Merger with
the Secretary of State of the State of Delaware in accordance with the DGCL. The
Merger shall become effective upon the later of: (a) the date and time of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and (b) such later date and time as may be specified in the Certificate
of Merger with the consent of Buyer and the Company (the “Effective Time”).
     Section 1.3 Certificate of Incorporation and By-Laws. The certificate of
incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be amended pursuant to the Merger to read in its entirety as set
forth in Exhibit D hereto, and as so amended shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended, restated,
repealed or otherwise modified as provided by Law or the terms of such
certificate of incorporation. The by-laws of MergerCo, as in effect immediately
prior to the Effective Time, shall be the by-laws of the Surviving Corporation
until thereafter amended as provided by Law, by the terms of the certificate of
incorporation of the Surviving Corporation and by the terms of such by-laws.
     Section 1.4 Closing. The closing of the Merger (the “Closing”) shall occur
as promptly as practicable (but in no event later than the third (3rd) Business
Day (as defined below) following the day on which the last to be satisfied or
waived of the conditions set forth in Article VIII (other than those conditions
which by their nature are required to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions at the Closing) shall have
been satisfied or waived in accordance with this Agreement), and shall take
place at such time and on a date to be specified by the parties (the actual date
of such Closing, the “Closing Date”). The Closing shall take place at the
offices of Goodwin Procter LLP (“Goodwin”), 620 Eighth Avenue, New York, NY
10018, or at such other place as agreed to by the parties hereto. “Business Day”
means any day other than a day on which the office of the Secretary of State of
the State of Delaware is closed or banks in New York, New York are required to
close.
     Section 1.5 Directors and Officers. The directors of MergerCo immediately
prior to the Effective Time shall, from and after the Effective Time, be the
initial directors of the

2

--------------------------------------------------------------------------------

 

Surviving Corporation, and the officers of the Surviving Corporation immediately
prior the Effective Time shall, from and after the Effective Time, be the
initial officers of the Surviving Corporation, in each case to hold office until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the certificate
of incorporation and by-laws of the Surviving Corporation, and the DGCL.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
     Section 2.1 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holders of any shares of
the Company Stock (as defined in Section 2.1(e)(v)) (each a “Stockholder,” and
collectively, the “Stockholders”) or any shares of the capital stock of
MergerCo:
          (a) MergerCo Shares. Each share of common stock, par value $0.01 per
share, of MergerCo issued and outstanding immediately prior to the Effective
Time shall be converted into one fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation.
          (b) Cancelled Shares. Each share of Company Stock that is owned by the
Company, by Buyer or by MergerCo shall automatically be cancelled and retired
and shall cease to exist, and no cash or other consideration shall be delivered
or deliverable in exchange therefor.
          (c) Company Common Stock. Each share of the Company’s Common Stock,
par value $.001 per share (the “Common Stock”), issued and outstanding
immediately prior to the Effective Time (other than shares to be cancelled in
accordance with Section 2.1(b), the Company Restricted Stock (as defined in
Section 2.2(b)), and any Dissenting Shares (as defined in Section 3.3(a)) will
be converted into, subject to this Article II and the last sentence of
Section 3.2(c), the right to receive (i) subject to Section 2.10 and
Section 2.11, that number of shares of Common Stock, par value $.01 per share,
of the Buyer (“Buyer Stock”), equal to the Common Stock Merger Consideration per
Share (as defined in Section 2.1(e)(iv)) and (ii) a contingent right to receive
(x) in the event that the Final Closing Adjustment is a positive amount as
provided in Section 2.5(d), the portion of such Final Closing Adjustment to be
delivered in respect of a share of Common Stock in the form and at the time
determined pursuant to Section 2.5(d), (y) each time, if at all, there is a
release and distribution to the Stockholders of Escrow Shares and Escrow Cash
from the Escrow Funds, the portion of such Escrow Shares and Escrow Cash to be
delivered in respect of a share of Common Stock in the form and at the times
determined pursuant to the Escrow Agreement, and (z) in the event that there is
a release and distribution of any amount held in the Stockholders’
Representative Expense Fund, the portion of such distribution allocated in
respect of a share of Common Stock. Notwithstanding the foregoing, an Electing
Employee Stockholder (as defined in Section 2.11(a)) may, in respect of each
share of Common Stock (other than shares representing Company Restricted Stock)
owned by such Electing Employee Stockholder, elect in lieu of the Common Stock
Merger

3

--------------------------------------------------------------------------------

 

Consideration per Share provided for in clause (i) of the immediately preceding
sentence, to receive the Cash Consideration Per Share and the other contingent
consideration described in Section 2.11(a) in accordance with and subject to the
terms and conditions of Section 2.11 and Section 3.1 (such election, a “Cash
Election”). As of the Effective Time, all such shares of Common Stock shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a stock certificate which immediately prior
to the Effective Time represented any such shares of Common Stock (a “Common
Stock Certificate”) shall cease to have any rights with respect thereto, except
the right to receive, upon the surrender of such Common Stock Certificate or the
delivery of an affidavit of loss in lieu thereof as described in Section 3.2(d),
the consideration per share set forth in this Section 2.1(c) at the times set
forth in this Section 2.1(c), subject to Section 2.10 and Section 2.11.
          (d) Company Preferred Stock. Each share of the Company’s Series A
Convertible Preferred Stock, par value $.001 per share (the “Series A
Convertible Preferred Stock”), the Company’s Series C Convertible Preferred
Stock, par value $.001 per share (the “Series C Convertible Preferred Stock,”
and the Company’s Series D Convertible Preferred Stock, par value $.001 per
share (the “Series D Convertible Preferred Stock, and together with the Series A
Convertible Preferred Stock and the Series C Convertible Preferred Stock, the
“Convertible Preferred Stock”), issued and outstanding immediately prior to the
Effective Time (other than shares to be cancelled in accordance with
Section 2.1(b) and any Dissenting Shares) will be converted into, subject to
this Article II and the last sentence of Section 3.2(c), the right to receive
(i) subject to Section 2.10, that number of shares of Buyer Stock equal to the
product of (A) the Common Stock Merger Consideration per Share multiplied by
(B) the total number of shares of Common Stock (including fractional shares)
into which such share of Convertible Preferred Stock is, as of the Effective
Time, convertible pursuant to the terms of the Company’s Certificate of
Incorporation (as defined in Section 4.1(a)) (as applicable to such share of
Convertible Preferred Stock, the “Conversion Ratio”) (the product of (A) the
Common Stock Merger Consideration per Share multiplied by (B) the applicable
Conversion Ratio is hereinafter sometimes referred to as the “Preferred Stock
Merger Consideration per Share” of such shares of Convertible Preferred Stock)
and (ii) a contingent right to receive (x) in the event that the Final Closing
Adjustment is a positive amount as provided in Section 2.5(d), (A) the portion
of such Final Closing Adjustment to be delivered in respect of a share of Common
Stock multiplied by (B) the applicable Conversion Ratio, in the form and at the
time determined pursuant to Section 2.5(d), (y) each time, if any, there is a
release and distribution to the Stockholders of Escrow Shares and Escrow Cash
from the Escrow Funds, (A) the portion of such Escrow Shares and Escrow Cash to
be delivered in respect of a share of Common Stock multiplied by (B) the
applicable Conversion Ratio, in the form and at the times determined pursuant to
the Escrow Agreement, and (z) in the event that there is a release and
distribution of any amount held in the Stockholders’ Representative Expense
Fund, (A) the portion of such distribution allocated in respect of a share of
Common Stock multiplied by (B) the applicable Conversion Ratio. As of the
Effective Time, all such shares of Convertible Preferred Stock shall no longer
be outstanding and shall automatically be cancelled and retired and shall cease
to exist, and each holder of a stock certificate which immediately prior to the
Effective Time represented any such shares of Convertible Preferred Stock (a
“Convertible Preferred Stock Certificate”) shall cease to have any rights with
respect thereto, except the right to receive, upon the surrender of such
Convertible Preferred Stock Certificate or the delivery of an affidavit of loss
in lieu thereof as described in

4

--------------------------------------------------------------------------------

 

Section 3.2, the applicable consideration per share set forth in this
Section 2.1(d) at the times set forth in this Section 2.1(d), subject to
Section 2.1(d).
          (e) Certain Definitions. For purposes of this Agreement:
      (i) “Aggregate Merger Consideration” shall mean the sum of the aggregate
merger consideration provided for in Section 2.1(c) with respect to shares of
Common Stock issued and outstanding immediately prior to the Effective Time plus
the aggregate merger consideration provided for in accordance with
Section 2.1(d) with respect to shares of Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time.
      (ii) “Aggregate Promissory Note Proceeds” shall mean an amount, as
certified by the Chief Financial Officer of the Company, equal to the aggregate
outstanding principal amount and accrued interest as of immediately prior to the
Effective Time of all promissory notes in favor of the Company, which were
delivered to the Company by Stockholders as payment for shares of Company Stock.
      (iii) “Closing Price” shall mean the average of (A) the average per share
closing prices of Buyer Stock as reported on the New York Stock Exchange, Inc.
composite transactions reporting system (as reported in the Eastern Edition of
The Wall Street Journal or, if not reported thereby, another authoritative
source) for the eight (8) consecutive full trading days ending on the first
(1st) Business Day prior to the date hereof, and (B) the average per share
closing prices of Buyer Stock as reported on the New York Stock Exchange, Inc.
composite transactions reporting system (as reported in the Eastern Edition of
The Wall Street Journal or, if not reported thereby, another authoritative
source) for the eight (8) consecutive full trading days ending on the fifth
(5th) Business Day prior to the Closing.
      (iv) “Common Stock Merger Consideration per Share” shall mean a number of
shares of Buyer Stock equal to the Net Merger Consideration divided by the Fully
Diluted Shares Outstanding, rounded to six decimal points.
      (v) “Company Stock” shall mean any shares of Common Stock and Convertible
Preferred Stock of the Company.
      (vi) “Escrow Funds per Share” shall mean (A) 7.5% multiplied by the amount
of Net Merger Consideration that is the result of the calculations described in
subsections (A) through (L) of Section 2.1(e)(xv), divided by (B) the Fully
Diluted Shares Outstanding, rounded to six decimal points.
      (vii) “Estimated Reference Date Balance Sheet” shall mean the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the close
of business on March 31, 2008, prepared in accordance with GAAP and on a basis
consistent with the accounting practices and policies used to prepare the
Company’s Financial Statements.

5

--------------------------------------------------------------------------------

 

     (viii) “Estimated Reference Date Cash Amount” shall mean the aggregate
amount of cash and cash equivalents (excluding Restricted Cash) of the Company
and its Subsidiaries as of the close of business on March 31, 2008, as reflected
on the Estimated Reference Date Balance Sheet (provided, that for purposes of
such calculation, only 50.1% of the cash and cash equivalents held by QW
Holdings, LLC shall be included).
     (ix) “Estimated Reference Date Stockholders’ Equity” shall mean the amount
of the Company’s Stockholders’ Equity as of the close of business on March 31,
2008, which calculation shall be based on the Estimated Reference Date Balance
Sheet, as set forth on a certificate delivered by the Company to Buyer on the
date of this Agreement.
     (x) “Estimated Stockholders’ Equity Adjustment” shall mean an amount equal
to the Estimated Closing Date Stockholders’ Equity (as defined in Section
2.5(a)) minus the Estimated Reference Date Stockholders’ Equity.
     (xi) “Fully Diluted Shares Outstanding” shall mean the sum, as certified by
the Chief Financial Officer of the Company, of (A) the number of shares of
Common Stock issued and outstanding immediately prior to the Effective Time
(excluding all shares of Company Restricted Stock and, if the Closing Date
occurs after the ninetieth (90th) day following the date of this Agreement, all
shares that would have been Company Restricted Stock but for the lapse of
forfeiture restrictions (as a result of vesting) subsequent to the date that is
ninety (90) days after the date of this Agreement but prior to the Closing
Date), plus (B) the number of shares of Common Stock issuable upon exercise of
all Vested Company Options that remain outstanding immediately prior to the
Effective Time, plus (C) the number of shares of Common Stock issuable upon
conversion of all issued and outstanding Convertible Preferred Stock immediately
prior to the Effective Time.
     (xii) “GAAP” shall mean U.S. generally accepted accounting principles, as
applied on a consistent basis.
     (xiii) “Indebtedness for Borrowed Money” shall mean an amount equal to the
sum of:
     (A) the outstanding principal and accrued and unpaid interest (as well as
prepayment, breakage and similar charges payable) under that certain Amended and
Restated Senior Secured Revolving Credit Agreement, dated as of November 22,
2006, as amended and restated as of July 31, 2007, by and among the Company, the
Lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent;
and
     (B) any other indebtedness for money borrowed by the Company or any
Subsidiary of the Company, any indebtedness for money borrowed that is secured
by the assets of or in any manner by the

6

--------------------------------------------------------------------------------

 

Company or any Subsidiary of the Company, and all accrued and unpaid interest or
fees, penalties or other amounts due with respect to any of the foregoing.
     (xiv) “Merger Consideration” shall mean an amount equal to $625,000,000.
     (xv) “Net Merger Consideration” shall mean the number of shares of Buyer
Stock equal to the result of the calculations described in (A) through (M)
below, divided by the Closing Price: (A) the Merger Consideration, plus (B) the
Estimated Reference Date Cash Amount, plus (C) to the extent that the Company
has received the written consents provided for in Section 3.2(c) to reduce the
number of shares of Buyer Stock and/or the cash amount to be received by certain
affected Stockholders, the portion of Aggregate Promissory Note Proceeds
attributable to the holders of such notes who have provided such consents, plus
(D) if the Estimated Stockholders’ Equity Adjustment is a positive number, the
amount of the Estimated Stockholders’ Equity Adjustment, plus (E) the lesser of
(i) the sum of the Company’s investment cost for all of its equity interests in
Trade Settlement, Inc. and The Clearing Corporation and (ii) the sum of the fair
market value of such equity interests as of close of business on March 31, 2008
as established pursuant to Section 2.5(a) (to the extent such equity interests
are not sold by the Company prior to the Closing), minus (F) the amount of
Indebtedness for Borrowed Money outstanding as of the close of business on
March 31, 2008, minus (G) the amount of the Company Transaction Expenses (as
defined in Section 2.4) accrued as of March 31, 2008, minus (H) if the Estimated
Stockholders’ Equity Adjustment is a negative number, the absolute value of such
Estimated Stockholders’ Equity Adjustment, minus (I) the deferred revenue of the
Company and its Subsidiaries as of the close of business on March 31, 2008,
minus (J) the sum of the “Second Payment” and the “Tax Amount” (each as defined
in the Agreement and Plan of Merger among the Company, ICE Merger Sub Inc.,
CreditTrade Inc., ICG Holdings, Inc. dated as of July 24, 2006) relating to the
Company’s CreditTrade acquisition as of the close of business on March 31, 2008,
minus (K) the amount of the accounts receivable of the Company and its
Subsidiaries that are more than one hundred and twenty (120) days past due and
uncollected as of the close of business on March 31, 2008, minus (L) the Expense
Amount deposited into the Stockholder’s Representative Expense Fund pursuant to
Section 2.6, minus (M) an amount equal to 7.5% of Nominal Net Merger
Consideration.
     (xvi) “Nominal Net Merger Consideration” shall mean the amount that is
equal to the result of the calculations described in subsections (A) through
(K) of Section 2.1(e)(xv).
     (xvii) “Option Exchange Consideration” shall mean that number (rounded to
six decimal points) of shares of Buyer Stock as is determined by the Company
Board equal to the sum of (A) the Common Stock Merger

7

--------------------------------------------------------------------------------

 

Consideration per Share and (B) the value (measured in shares of Buyer Stock) of
the payments per Share that may be released and distributed pursuant to
subclause (ii)(y) of Section 2.1(c) determined immediately prior to the
Effective Time (after giving effect to any discount for amounts that may not be
released and distributed pursuant to subclause (y) of Section 2.1(c)). This
value determination by the Company Board shall be based on a valuation report
provided by a nationally recognized independent third party appraisal firm;
provided, however, that if the Company Board cannot obtain such a valuation
report after using its reasonable best efforts to secure such a valuation
report, after consultation with Buyer, the Company Board may make such
determination in its reasonable good faith discretion taking into account all
facts and circumstances. It is understood and agreed that the Option Exchange
Consideration shall under no circumstances (1) be less than the amount of the
Common Stock Merger Consideration per Share or (2) exceed the sum of (x) the
Common Stock Merger Consideration per Share and (y) the Escrow Funds per Share.
     (xviii) “Pro Rata Portion” shall mean, with respect to a Stockholder, the
quotient obtained by dividing (A) the aggregate number of shares of Common Stock
held by such Stockholder as of immediately prior to the Effective Time (assuming
the conversion of all outstanding shares of Convertible Preferred Stock
immediately prior to the Effective Time), but excluding all Forfeited Shares (as
defined in Section 2.2(b)) of such Stockholder as of the relevant date that Pro
Rata Portion is calculated, by (B) the aggregate number of shares of Common
Stock held by all Stockholders as of immediately prior to the Effective Time
(assuming the conversion of all outstanding shares of Convertible Preferred
Stock immediately prior to the Effective Time), but excluding all Forfeited
Shares of all Stockholders as of the relevant date that Pro Rata Portion is
calculated.
     (xix) “Restricted Cash” shall mean the sum of all cash security deposits
and cash required to collateralize outstanding letters of credit, in each case,
as required by any real property lease agreement which the Company or any of its
Subsidiaries is a lessee or sublessee under.
     (xx) “Stockholders’ Equity” shall mean the consolidated stockholders’
equity of the Company and the Subsidiaries as of a particular date, calculated
based on the applicable balance sheet for such date in accordance with GAAP;
provided, that notwithstanding the foregoing, if at the Effective Time (A) the
Company has purchased and paid for the D&O Tail Policy referred to in Section
7.7(c), then Stockholders’ Equity shall be increased by the amount paid for such
policy, but not to exceed the amount of the Premium Limit or (B) the Company has
purchased but not paid for such D&O Tail Policy, then the accrual relating to
the cost for such policy, not to exceed the amount of the Premium Limit, shall
be disregarded for purposed of calculating Stockholders’ Equity.
     (xxi) “Stock Plan” shall mean any plan, agreement or arrangement providing
for the issuance of Common Stock, or any rights of any kind,

8

--------------------------------------------------------------------------------

 

contingent or accrued, to acquire or receive shares of Common Stock or benefits
measured by the value of shares of Common Stock.
     (xxii) “Subsidiary” shall mean any corporation more than one-half (50%) of
whose outstanding voting securities, or any partnership, joint venture or other
entity more than one-half (50%) of whose total equity interest, is directly or
indirectly owned by Buyer or the Company, as the case may be.
     Section 2.2 Company Stock Options and Related Matters.
          (a) Treatment of Options.
     (i) Company Options. The Company currently has outstanding options to
purchase shares of Common Stock granted under the Stock Plans listed on Schedule
2.2(a), and each option which is outstanding and vested on or prior to the date
which is the earlier of (i) ninety (90) days after the date of this Agreement
and (ii) the Closing Date shall be deemed to be “Vested Company Option” for all
purposes of this Agreement, and any such option which is outstanding but
unvested on or prior to the date which is the earlier of (i) ninety (90) days
after the date of this Agreement and (ii) the Closing Date shall be deemed to be
an “Unvested Company Option” for all purposes of this Agreement. The aggregate
Unvested Company Options and the aggregate Vested Company Options shall
sometimes be referred to, collectively, as the “Company Options,” and each
individually, a “Company Option”. For purposes of this Agreement, a holder of
Vested Company Options shall be referred to as a “Vested Optionholder,” and the
holders of Company Options shall be referred to as “Optionholders”.
     (ii) Assumption of Company Options. At the Effective Time, each outstanding
Company Option under the Stock Plans listed on Schedule 2.2(a) shall be
converted into an option to acquire the number of shares of Buyer Stock (the
“New Option”) equal to the product of (rounded down to the nearest whole number)
(x) the number of shares of Common Stock subject to the Company Option
immediately prior to the Effective Time multiplied by (y) the Option Exchange
Consideration, at an exercise price per share (rounded up to the nearest whole
cent) equal to (A) the exercise price per share of Common Stock of such Company
Option immediately prior to the Effective Time divided by (B) the Option
Exchange Consideration; provided, however, that the exercise price applicable
and the number of shares of Common Stock purchasable pursuant to each New Option
shall be determined in a manner consistent with the requirements of
Sections 409A and 424(a) of the Code. Following the Effective Time, each New
Option shall continue to be governed by the same terms and conditions (including
vesting schedule, reacquisition rights and repurchase rights) as were applicable
to the applicable Company Option immediately prior to the Effective Time,
including but not limited to terms contained in any Notice of Grant, Stock
Option Agreement, Stock Issuance Agreement or Stock Purchase Agreement, as
appropriate, applicable to such Unvested Company Option. For

9

--------------------------------------------------------------------------------

 

the avoidance of doubt, the foregoing conversion of Company Options shall be
deemed to be an assumption of such option by Buyer and an assignment of the
Company’s repurchase rights with respect thereto, if applicable, as contemplated
by the Company’s Stock Plans.
          (b) Company Restricted Stock. At the Effective Time, each outstanding
share of Common Stock subject to any vesting restrictions, repurchase rights or
forfeiture rights, that may be held, awarded, outstanding, payable or reserved
for issuance under the Stock Plans (the “Company Restricted Stock”), shall be
converted into the right to receive the number of shares of Buyer Stock equal to
the product of (x) the number of shares of Company Restricted Stock multiplied
by (y) the Common Stock Merger Consideration per Share (“Buyer Restricted
Stock”). Following the Effective Time, each such share of Buyer Restricted Stock
will be subject to the same terms and conditions as were applicable to the
rights under the relevant Stock Plan and Company Restricted Stock agreement
immediately prior to the Effective Time, and any vesting restrictions,
repurchase rights or forfeiture rights will remain applicable to such share of
Buyer Restricted Stock and will be assigned to Buyer as applicable. Each such
share of Company Restricted Stock shall also be converted into the contingent
right to share in and receive, following the Closing Date at the applicable time
of payment, to the extent that such share of Buyer Restricted Stock has not
previously been forfeited, (x) in the event that the Final Closing Adjustment is
a positive amount as provided in Section 2.5(d), the portion of such Final
Closing Adjustment to be delivered in respect of a share of Common Stock in the
form and at the time determined pursuant to Section 2.5(d), (y) each time, if at
all, there is a release and distribution to the Stockholders of Escrow Shares
and Escrow Cash from the Escrow Funds, the portion of such Escrow Shares and
Escrow Cash to be delivered in respect of a share of Common Stock in the form
and at the times determined pursuant to the Escrow Agreement, and (z) in the
event that there is a release and distribution of any amount held in the
Stockholders’ Representative Expense Fund, the portion of such distribution
allocated in respect of a share of Common Stock. For purposes of this Agreement,
the shares of Company Restricted Stock that have been converted into Buyer
Restricted Stock and that have been forfeited following such conversion are
collectively referred to in this Agreement as “Forfeited Shares”. After the
Closing and not less than five (5) Business Days prior to the date any
contingent merger consideration may be paid to the Stockholders as contemplated
in Section 2.1(c) hereof, or otherwise promptly following the reasonable request
of the Stockholders’ Representative, the Buyer shall provide the Stockholders’
Representative with a schedule of all recipients of Buyer Restricted Stock,
which schedule shall evidence a true and correct statement on the portion of
each recipient’s Buyer Restricted Stock that have become Forfeited Shares, if
any.
          (c) Other Incentive Plan Awards. At the Effective Time, each award
outstanding under the T-Zero Long-Term Incentive Plan (“T-Zero LTIP Awards”)
will remain outstanding and will remain subject to the same terms and conditions
as were applicable to the T-Zero LTIP Awards immediately prior to the Effective
Time. At the Effective Time, each award outstanding under the Q-Wixx Long-Term
Incentive Plan (“Q-Wixx LTIP Awards”) will remain outstanding and will remain
subject to the same terms and conditions as were applicable to the Q-Wixx LTIP
Awards immediately prior to the Effective Time.

10

--------------------------------------------------------------------------------

 

          (d) Corporate Actions. At or prior to the Effective Time, the Company,
the Board of Directors and the compensation committee, as applicable, shall
adopt any resolutions and take any actions which are necessary to effectuate the
provisions of Section 2.2(a) and Section 2.2(b), including without limitation
determining the Option Exchange Consideration amount and making any associated
amendments, interpretations or valuations.
          (e) No Right to Acquire Shares. The Company shall take all actions
necessary to ensure that from and after the Effective Time neither Buyer nor the
Surviving Corporation will be required to deliver Common Stock or other capital
stock of the Company to any Person pursuant to or in settlement of Company
Options, shares of Company Restricted Stock or any similar rights.
     Section 2.3 Payments at Closing for Indebtedness. As of the Closing Date,
Buyer and MergerCo shall provide sufficient funds to the Surviving Corporation
to enable the Surviving Corporation to repay all Indebtedness for Borrowed Money
then outstanding. The Company shall, not less than two (2) Business Days prior
to the Closing, secure payoff letters with respect to all such outstanding
Indebtedness for Borrowed Money. Buyer and MergerCo will cooperate in arranging
for such repayment and shall take such reasonable actions as may be necessary to
facilitate such repayment and to facilitate the release, in connection with such
repayment, of any Encumbrance securing such Indebtedness for Borrowed Money.
     Section 2.4 Payments at Closing for Expenses. At the Closing, Buyer shall
cause the Surviving Corporation to pay all outstanding fees and expenses of the
Company, its Subsidiaries and the Stockholders’ Representative in connection
with the negotiation and the consummation of the transactions contemplated by
this Agreement, including, without limitation, those expenses which are payable
to Goodwin and to Evercore Partners Inc., and which have not been paid on or
prior to the Closing Date. All such fees and expenses, whether paid on or prior
to the Closing Date, shall be hereinafter referred to as the “Company
Transaction Expenses”.
     Section 2.5 Closing and Post-Closing Adjustments.
          (a) At least two (2) Business Days prior to the Closing Date, the
Company shall deliver to Buyer (i) an estimated unaudited consolidated balance
sheet of the Company and its Subsidiaries as of the close of business on the
Closing Date (the “Estimated Closing Balance Sheet”) prepared in accordance with
GAAP and on a basis consistent with the accounting practices and policies used
in the preparation of the Company’s Financial Statements, together with a
certificate based on such Estimated Closing Balance Sheet setting forth the
Company’s calculation of its Stockholders’ Equity as of such date (the
“Estimated Closing Date Stockholders’ Equity”), (ii) to the extent that the
Company’s equity interests in Trade Settlement, Inc. and The Clearing
Corporation have not been sold by the Company prior to the Closing, independent
appraisals or other documentation sufficient to establish to the reasonable
satisfaction of Buyer the sum of the fair market value of such equity interests
as of close of business on March 31, 2008, and (iii) a certificate setting forth
the Company’s calculation of the amount of the accounts receivable of the
Company and its Subsidiaries that are more than one hundred and twenty
(120) days past due and uncollected as of the close of business on March 31,
2008. At the Closing, the Net Merger Consideration shall be calculated to give
effect to any

11

--------------------------------------------------------------------------------

 

increase or decrease in the Company’s Stockholders’ Equity from the close of
business on March 31, 2008 through the Closing as provided in Section 2.1(e)(xv)
and the related definitions.
          (b) As promptly as practicable, but no later than one hundred and
twenty (120) days after the Closing Date, Buyer will cause to be prepared and
delivered to the Stockholders’ Representative a proposed final consolidated
balance sheet of the Company and its Subsidiaries as of the close of business on
March 31, 2008 (the “Reference Date Balance Sheet”) and on the Closing Date (the
“Closing Balance Sheet”), and a certificate based on such Reference Date Balance
Sheet and Closing Balance Sheet setting forth Buyer’s calculation of the
Company’s Stockholders’ Equity as of the close of business on March 31, 2008
(the “Reference Date Stockholders’ Equity”) and on the Closing Date (the
“Closing Date Stockholders’ Equity,” and together with the Reference Date
Balance Sheet, the Closing Balance Sheet and the Reference Date Stockholders’
Equity, the “True-up Statement”). Each of the Reference Date Balance Sheet and
the Closing Balance Sheet (i) shall be prepared in accordance with GAAP applied
on a basis that is consistent with the preparation of the Company’s Financial
Statements, including, without limitation, the use of the same accounting
principles, practices, procedures, policies and methods, with consistent
classifications, judgments, inclusions, exclusions and valuation and estimation
methodologies, that were employed in the preparation of the Estimated Reference
Date Balance Sheet, and (ii) shall include the same line items reflected in the
Estimated Reference Date Balance Sheet. The Stockholders’ Representative shall
have thirty (30) days following its receipt of the True-up Statement and all
supporting documentation requested by it (the “Review Period”) to review the
same. On or before the expiration of the Review Period, the Stockholders’
Representative shall deliver to Buyer a written statement accepting or objecting
to the True-up Statement. In the event that the Stockholders’ Representative
objects to the True-up Statement, such objection shall include an itemization of
the Stockholders’ Representative’s disputed items and the reasons therefor. If
the Stockholders’ Representative does not deliver an objection to Buyer within
the Review Period, the Stockholders’ Representative shall be deemed to have
accepted the True-up Statement, and the calculations set forth therein shall be
final and binding for purposes of making the adjustments to merger
consideration, if any, as contemplated below.
          (c) In the event that the Stockholders’ Representative objects to the
True-up Statement within the Review Period, Buyer and the Stockholders’
Representative shall promptly meet and in good faith attempt to resolve such
objections. Any such objections which cannot be resolved between Buyer and the
Stockholders’ Representative within thirty (30) days following Buyer’s receipt
of the Stockholders’ Representative’s statement of objections shall be resolved
in accordance with this Section 2.5(c). Should the Stockholders’ Representative
and Buyer not be able to resolve such objections as may be raised with respect
to the True-up Statement within the thirty (30) day period described above,
either party may submit the matter to a firm of independent certified public
accountants as to which the Company and Buyer shall mutually agree prior to the
Closing Date, (the “Accounting Referee”) for review and resolution, with
instructions to complete the same as promptly as practicable, but in any event
within thirty (30) days of its engagement, and to make any calculations strictly
in accordance with the accounting methodologies and principles provided for in
this Agreement. If following the Closing Date the agreed Accounting Referee is
unwilling or unable to act in this role, the Stockholders’ Representative and
Buyer shall cooperate and work together in good faith to mutually agree

12

--------------------------------------------------------------------------------

 

another firm of certified public accountants or another reputable and
experienced firm or person to act in this role. Based solely on such accounting
methodologies and principles, and the presentations provided to the Accounting
Referee by each of Buyer and the Stockholders’ Representative, the Accounting
Referee shall prepare and deliver to Buyer and the Stockholders’ Representative
a statement setting forth its own calculations of the Company’s Reference Date
Cash Amount, the Reference Date Stockholders’ Equity and the Closing Date
Stockholders’ Equity, which calculations, absent manifest error, shall be
binding and conclusive on the parties and not subject to appeal. The Accounting
Referee shall be instructed that in making its determination, it shall make
revised calculations only with respect to those items or amounts which are in
dispute between Buyer and the Stockholders’ Representative and, further, it must
select a position with respect to any such disputed items or amounts that is
equal to the final position of Buyer or the final position of the Stockholders’
Representative, or in between the final position of Buyer and the final position
of the Stockholders’ Representative. No appeal of the Accounting Referee’s
determination shall be permitted, except in the event of manifest error or a
failure by the Accounting Referee to comply with the principles and methods set
forth in this Agreement. The fees and costs of the Accounting Referee, if one is
required, shall be payable (i) fifty percent (50%) out of the Stockholders’
Representative Expense Fund (as defined in Section 2.6), on the one hand, and
(ii) fifty percent (50%) by Buyer, on the other hand.
          (d) In the event that the Final Closing Adjustment (as defined below)
is a negative amount, the parties shall cause the Escrow Agent to release to
Buyer (out of the Escrow Funds) the number of Escrow Shares (rounded to the
nearest whole number) and Escrow Cash having an aggregate value equal to the
absolute value of the Final Closing Adjustment (as determined in accordance with
the Escrow Agreement). In the event that the Final Closing Adjustment is a
positive amount then, subject to Section 2.9 hereof, Buyer shall deliver to the
Exchange Agent (as defined in Section 3.2(a)) the number of shares of Buyer
Stock (rounded to the next whole number) or, with respect to the entitlements of
Non-Accredited Investors and Electing Employee Stockholders among the
Stockholders, cash in lieu thereof (in the case of an Electing Employee
Stockholder, in the same proportion that the cash received by him or her
represents to the aggregate merger consideration received by such Electing
Employee Stockholder), having an aggregate value equal to such Final Closing
Adjustment (as determined in accordance with the Escrow Agreement), and the
Exchange Agent shall distribute such shares or cash proportionally to the
Stockholders based on each such Stockholder’s Pro Rata Portion of such Final
Closing Adjustment, subject to all applicable federal, state and local Tax
withholdings. Any delivery, release or distribution made under this Section
2.5(d) shall be made within five (5) Business Days of the final determination of
the True-up Statement. Such additional shares of Buyer Stock and cash, if any,
are intended to be treated for Tax purposes as consideration for the Company
Stock purchased by Buyer in the Merger and shall be treated as such
consideration (subject to any requirement to treat a portion as imputed
interest) for all Tax purposes except to the extent otherwise required by a
final determination of a Taxing Authority. For purposes of this Section 2.5(d),
the terms used herein shall be defined as follows:
     (i) “Closing Date Stockholders’ Equity Adjustment” shall mean an amount
equal to (i) the Closing Date Stockholders’ Equity, minus (ii) the Reference
Date Stockholders’ Equity, in each case, as finally determined in accordance
with the provisions of this Section 2.5 above.

13

--------------------------------------------------------------------------------

 

     (ii) “Final Cash Adjustment” shall mean an amount equal to (i) the
aggregate amount of the Company’s and its Subsidiaries’ cash and cash
equivalents as of the close of business on March 31, 2008, as reflected on the
Reference Date Balance Sheet (as finally determined in accordance with the
provisions of this Section 2.5 above), minus (ii) the Estimated Reference Date
Cash Amount.
     (iii) “Final Closing Adjustment” shall mean an amount equal to the sum of
(i) the Final Stockholders’ Equity Adjustment, plus (ii) the Final Cash
Adjustment.
     (iv) “Final Stockholders’ Equity Adjustment” shall mean an amount equal to
(i) the Closing Date Stockholders’ Equity Adjustment, minus (ii) the Estimated
Stockholders Equity Adjustment.
          (e) The parties hereto agree that normal algebraic principles shall be
applied in the case of all calculations to be made under this Agreement. By way
of example, in the event this Agreement called for a calculation that involved
the subtraction of a negative amount, such calculation would result in the
addition of the absolute value of such negative amount. For illustration
purposes only, the equation below would be computed as follows:
(A) negative $10,000,000, minus (B) negative $2,000,000 = negative $8,000,000.
     Section 2.6 Expense Amount. Notwithstanding anything herein to the
contrary, at the Closing Buyer shall deliver into an account designated by the
Stockholder’s Representative (the “Stockholders’ Representative Expense Fund”)
an amount in cash equal to $205,000 (the “Expense Amount”). The Stockholders’
Representative Expense Fund shall be held, and may be used at any time, by the
Stockholders’ Representative to fund any expenses incurred by it in the
performance of its duties and obligations hereunder, including but not limited
to, those duties and obligations listed in Section 11.2. The Stockholders’
Representative Expense Fund will be held by the Stockholders’ Representative
until the date on which no Escrow Shares or Escrow Cash remain in the Escrow
Funds. Any portion of the Stockholders’ Representative Expense Fund remaining
after such date shall be paid by the Stockholders’ Representative to each
Stockholder based on such Stockholder’s Pro Rata Portion. All of the obligations
to administer and maintain the Stockholders’ Representative Expense Fund (and
the amounts held in the Stockholders’ Representative Expense Fund), and to
distribute amounts out of the Stockholders’ Representative Expense Fund, shall
be borne exclusively by Stockholders’ Representative out of the Stockholders’
Representative Expense Fund. None of Buyer, MergerCo or the Company shall have
any obligation or liability of any nature whatsoever with respect to the
administration and maintenance of the Stockholders’ Representative Expense Fund
or the distribution of any amounts out of the Stockholders’ Representative
Expense Fund.
     Section 2.7 Escrow Funds. Immediately following the Effective Time, Buyer
shall deliver to the custody of The Bank of New York Mellon Corporation (the
“Escrow Agent”), without any act of the Stockholders, the following:

14

--------------------------------------------------------------------------------

 

     (i) a number of Shares of Buyer Stock (such shares, the “Escrow Shares”),
rounded to the nearest whole number, equal to the following product: (A) 7.5%
multiplied by (B) the Nominal Net Merger Consideration multiplied by (C) a
fraction, the numerator of which is the Nominal Net Merger Consideration, minus
the amounts of cash paid pursuant to Section 2.10 and Section 2.11 in lieu of
Buyer Stock that would have otherwise been delivered pursuant to clause (i) of
Section 2.1(c) and clause (i) of Section 2.1(d), and the denominator of which is
the Nominal Net Merger Consideration; and
     (ii) an amount in cash (such cash, the “Escrow Cash”) equal to the
following product: (A) 7.5% multiplied by (B) the Nominal Net Merger
Consideration multiplied by (C) the Closing Price multiplied by (D) a fraction,
the numerator of which is the cash paid pursuant to Section 2.10 and
Section 2.11 in lieu of shares of Buyer Stock that would have otherwise been
delivered pursuant to clause (i) of Section 2.1(c) and clause (i) of
Section 2.1(d) and the denominator of which is the Nominal Net Merger
Consideration.
          The Escrow Shares and the Escrow Cash shall comprise the “Escrow
Funds”, which shall be held by the Escrow Agent pursuant to, and shall be
governed by, the terms of the Escrow Agreement to be entered into by and among
Buyer, the Stockholders’ Representative and the Escrow Agent. The Escrow Funds
shall be held in escrow and shall be available to settle certain contingencies
as provided in Section 2.5 and compensate the Buyer Indemnified Parties for any
Losses suffered or incurred by them and for which they are entitled to recovery
under Article IX of this Agreement, and will be allocated among and released and
distributed to the Stockholders and/or Buyer in accordance with the Escrow
Agreement (the Escrow Shares and Escrow Cash released or distributed from the
Escrow Funds to the Stockholders under this Agreement, if any, being the
“Released Escrow Consideration”). The Released Escrow Consideration is intended
to be treated for Tax purposes as consideration for the Company Stock purchased
by Buyer from the Stockholders in the Merger and shall be treated as such
consideration (subject to any requirement to treat a portion as imputed
interest) for all Tax purposes except to the extent otherwise required by a
final determination of a Governmental Body. Notwithstanding anything to the
contrary in this Agreement, Buyer makes no representations or warranties to the
Company or the Stockholders regarding the Tax treatment of the transactions
contemplated in this Agreement or any of the Tax consequences to any
Stockholders relating to those transactions. Each of the Company and each
Stockholder must rely solely on his, her or its own Tax advisors in connection
with such transactions. No Stockholder may, directly or indirectly, sell,
exchange, transfer or otherwise dispose of his, her or its right to receive any
portion of the Escrow Funds (except by will or by operation of the Laws of
intestate succession). Any such purported sale, exchange, transfer or
disposition shall be null and void.
     Section 2.8 Other Adjustments. The Aggregate Merger Consideration, as well
as any New Options issuable to holders of Company Options and shares of Buyer
Stock issuable to holders of Company Restricted Stock, shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into shares of
Buyer Stock or Company Stock), reorganization, recapitalization or

15

--------------------------------------------------------------------------------

 

other like change with respect to Buyer Stock or Company Stock occurring after
the date hereof and prior to the Effective Time.
     Section 2.9 Fractional Shares. Notwithstanding anything herein to the
contrary, no fractional shares of Buyer Stock shall be issued to any Person in
the Merger. In lieu thereof, each Person entitled to a fraction of a share of
Buyer Stock (after taking into account all Certificates surrendered by such
Person in accordance with Section 3.1 and Section 3.2, the aggregate number of
shares of Company Stock represented thereby and any Company Options held by such
Person immediately prior to the Effective Time) shall receive, at the time that
the merger consideration provided for in Section 2.1(c), Section 2.1(d) or
Section 2.2(b), as applicable, is delivered to such Person, an amount in cash
equal to the Closing Price multiplied by the fraction of a share of Buyer Stock
to which such Person otherwise would be entitled. No such Person shall be
entitled to dividends, voting rights, interest on the value of, or any other
rights in respect of a fractional share. Fractional shares shall be determined
on an aggregate basis for each Person and not on a per share or per Certificate
basis.
     Section 2.10 Private Placement; Non-Accredited Investors.
          (a) The parties understand and agree that the Aggregate Merger
Consideration is intended to be issued and transferred as contemplated in this
Agreement pursuant to a “private placement” exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”) by virtue of
Regulation D thereof. The shares of Buyer Stock comprising the Aggregate Merger
Consideration will be characterized as “restricted securities” under the
Securities Act and, consequently, such shares may not be resold within first
being registered under the Securities Act, unless they are sold pursuant to an
exemption therefrom. Any book entries recording the record ownership of shares
of Buyer Stock (it being understood and agreed by the parties that the Buyer
Stock is uncertificated) shall bear such annotations as Buyer may reasonably
deem necessary and desirable in connection therewith. Each party represents and
warrants to the other parties that, as of the Closing Date, assuming the truth
of the representations and warranties made herein, such party has taken no
action without the prior written consent of the other parties hereto that would
cause the issuance and transfer of the Aggregate Merger Consideration to become
subject to the registration requirements of the Securities Act.
          (b) Notwithstanding any other provision hereof, the shares of Buyer
Stock comprising the Aggregate Merger Consideration shall only be issued to
Accredited Investors. Each Stockholder to whom shares of Buyer Stock are issued
in the Merger shall make to Buyer in writing all such representations and
warranties as may be reasonably required by Buyer in connection therewith. No
shares of Buyer Stock shall be issued in the Merger to a Non-Accredited
Investor. In lieu thereof, a Non-Accredited Investor shall be entitled, upon
surrender of the Certificate or Certificates representing (i) such Person’s
Common Stock, to receive (A) at the Effective Time an amount in cash for each
share held by such Person equal to the Common Stock Merger Consideration per
Share provided for in clause (i) of Section 2.1(c) multiplied by the Closing
Price and (B) thereafter, the contingent right to receive the consideration
provided for in clauses (x), (y) and (z) of Section 2.1(c), provided that if any
such consideration would consist of Buyer Stock, such Person will receive
instead an amount in cash in lieu thereof equal

16

--------------------------------------------------------------------------------

 

to the number of shares of Buyer Stock such Person would have received
multiplied by the Closing Price and (ii) such Person’s Convertible Preferred
Stock, to receive (A) at the Effective Time an amount in cash for each share of
Preferred Convertible Stock held by such Person equal to the applicable
Preferred Stock Merger Consideration per Share provided for in clause (i) of
Section 2.1(d) multiplied by the Closing Price and (B) thereafter, the
contingent right to receive the consideration provided for in clauses (x),
(y) and (z) of Section 2.1(d), provided that if any such consideration would
consist of Buyer Stock, such Person will receive instead an amount in cash in
lieu thereof equal to the number of shares of Buyer Stock such Person would have
received multiplied by the Closing Price. For the purposes of this Agreement,
“Non-Accredited Investor” means a Person who is not an Accredited Investor, and
“Accredited Investor” means a Person that is an “accredited investor” as such
term is defined in Rule 501 promulgated under the Securities Act, or would
otherwise be excluded under Rule 501(e)(1) under the Securities Act from any
calculation of the number of purchasers of shares of Buyer Stock in the Merger;
provided, that Buyer shall have a sole and absolute discretion to determine
whether each such Stockholder is an Accredited Investor or a Non-Accredited
Investor for the purposes of this Agreement.
     Section 2.11 Cash Election.
          (a) Notwithstanding any other provision of this Agreement, as
acknowledged in Section 2.1(c), any holder of Common Stock as of the Effective
Time that is not a Non-Accredited Investor and who is listed on Schedule 2.11
may elect, in respect of some or all of the shares of Common Stock (excluding
shares of Company Restricted Stock) held by him or her to convert each such
share of Common Stock into (i) the right to receive an amount in cash equal to
the Common Stock Merger Consideration per Share multiplied by the Closing Price,
without interest (the “Cash Consideration Per Share”) in lieu of the Common
Stock Merger Consideration per Share provided for in clause (i) of
Section 2.1(c), subject to the terms and conditions of this Section 2.11 and
Section 3.1 (the “Cash Election” referenced in Section 2.1(c)) and (ii) the
contingent right to receive the consideration provided for in clauses (x),
(y) and (z) of Section 2.1(c), which amounts, if any, would be payable in cash.
Each such holder of Common Stock that is eligible to make a Cash Election is
hereinafter referred to as an “Electing Employee Stockholder”. In order to
qualify for the Cash Election, an Electing Employee Stockholder must make a
valid election as provided for in Section 3.1 and not revoke such election
within the time period provided in Section 3.1.
          (b) The maximum aggregate amount of cash payable in respect of all
Cash Elections shall not exceed the lesser of (i) $50,000,000 and (ii) the
maximum amount of cash that may be paid in respect of Cash Elections, when
considered together with (x) all other cash that may be paid as part of the
merger consideration under this Agreement and (y) all cash that may be paid in
respect of Dissenting Shares, that would still allow Buyer to acquire control
(within the meaning of section 368(c) of the Code) of the Company with the
remainder of the Aggregate Merger Consideration that consists of Buyer Stock
(the lesser of (i) and (ii), the “Maximum Cash Consideration”). If the total
number of shares of Common Stock with respect to which Cash Elections have been
validly made and not revoked would require aggregate cash payments in excess of
the Maximum Cash Consideration, then each Electing Employee Stockholder who has
made a Cash Election shall be entitled to maintain such Cash Election with
respect to an amount

17

--------------------------------------------------------------------------------

 

equal to the lesser of (i) the amount of such Electing Employee Stockholder’s
Cash Election, or (ii) an amount equal to the Electing Employee Stockholder’s
pro rata portion (as described below) of the Maximum Cash Consideration, and
with respect to those Electing Employee Stockholders who have made Cash
Elections in amounts in excess of their respective Pro Rata Portions of the
Maximum Cash Consideration (an “Oversubscription Amount”), the Oversubscription
Amounts of such Electing Employee Stockholders shall be reduced, pro rata (based
on stock ownership relative to other Electing Employee Stockholders with
Oversubscription Amounts), until the aggregate Cash Elections for all Electing
Employee Stockholders equals the Maximum Cash Consideration. All shares of
Common Stock for which a valid Cash Election has been made, but which cannot be
converted into cash as a result of the limitations described above, shall
instead be converted into the right to receive the Common Stock Merger
Consideration per Share and contingent consideration described in
Section 2.1(c).
ARTICLE III
EXCHANGE FOR SHARES; DISSENTING SHARES
     Section 3.1 Cash Election Procedure.
          (a) As soon as reasonably practicable following the date of this
Agreement, the Company and Buyer shall agree upon a form of election to be used
in connection with a Cash Election (the “Form of Election”). The Form of
Election shall permit an Electing Employee Stockholder to specify the number of
shares of Common Stock (other than Company Restricted Stock) held by him or her
with respect to which such Electing Employee Stockholder makes a Cash Election
and shall otherwise be in such form and contain such provisions as the Company
and Buyer shall mutually agree and consistent with this Agreement. The Company
shall deliver the Form of Election to those of its Stockholders that are
Electing Employee Stockholders as soon as reasonably practicable following
agreement as to its form and content, and use commercially reasonable endeavors
to deliver the Form of Election together with the Information Statement to be
delivered by the Company pursuant to Section 7.1(b).
          (b) Any Cash Election shall be properly made by an Electing Employee
Stockholder only if the Company shall have received at its designated office, on
or before the Election Deadline, a Form of Election properly completed and
signed. For purposes of this Agreement, “Election Deadline” means 5:00 p.m.,
Eastern Standard Time, on the date that is sixty (60) days after the date the
Form of Election is mailed to the Electing Employee Stockholders (or on such
other date as the parties hereto mutually agree).
          (c) A properly made Cash Election may be revoked with respect to all
or any portion of the shares of Common Stock subject thereto (but only in whole
share amounts) by the Electing Employee Stockholder who submitted the applicable
Form of Election submitting to the Company a written notice of such revocation
received by the Company at or prior to the Election Deadline. In addition, all
Cash Elections shall automatically be revoked if this Agreement is terminated in
accordance with its terms.

18

--------------------------------------------------------------------------------

 

          (d) The Company shall promptly provide copies of all Forms of Election
received by the Company pursuant to this Section 3.1 to Buyer. The good faith
determination of the Company and Buyer shall be conclusive and binding as to
whether or not Cash Elections shall have been properly made or revoked pursuant
to this Section 3.1 and as to when Forms of Election and notices of revocation
were received by the Company pursuant to this Section 3.1. The Company and Buyer
shall have reasonable discretion to disregard immaterial defects in the Forms of
Election. The Company and Buyer shall jointly make all computations as to the
proration contemplated by Section 2.11 and, absent manifest error, such
computations shall be conclusive and binding on the parties and all holders of
Company Stock.
     Section 3.2 Exchange for Shares of Buyer Stock or Cash.
          (a) As soon as practicable following the date of this Agreement and in
any event not less than fifteen (15) Business Days before the Closing Date,
Buyer shall appoint Computershare Trust Company, N.A. or such other national
exchange agent, bank or trust company as is reasonably acceptable to the Company
(the “Exchange Agent”) to act as exchange agent for the purposes of this
Agreement. At the Effective Time, Buyer shall (i) deposit with the Exchange
Agent, for the benefit of the holders of shares of Company Stock outstanding
immediately prior to the Effective Time, such Buyer Stock as represents the
portion of the Net Merger Consideration payable in shares of Buyer Stock and the
portion of the Net Merger Consideration consisting of cash payable pursuant to
Section 2.10 and Section 2.11 (such cash, together with the deposited Buyer
Stock, the “Exchange Fund”), and (ii) deposit with the Escrow Agent the amount
of Escrow Cash and the number of Escrow Shares to be deposited into the Escrow
Funds pursuant to Section 2.7 hereof. Subject to Section 2.5, Buyer shall also
deposit in the Exchange Fund such additional shares of Buyer Stock, if any, as
may be issuable pursuant to Section 2.5(d). The Exchange Agent shall, pursuant
to irrevocable instructions, make the payments and distributions provided for in
this Section 3.2 out of the Exchange Fund. The Exchange Fund shall not be used
for any other purpose, except as provided in this Agreement.
          (b) As soon as reasonably practicable following the date of this
Agreement and in any event not less than five (5) Business Days before the
Closing Date, Buyer shall cause the Exchange Agent to make available upon
request a form of letter of transmittal reasonably acceptable to the Company
(which shall specify that delivery shall be effected, and risk of loss and title
to the Common Stock Certificates and the Convertible Preferred Stock
Certificates (each, “Certificates”) shall pass, only upon proper delivery of the
Certificates to the Exchange Agent, and which shall include all such
representations and warranties as may be reasonably required by Buyer in
connection with a Stockholder’s qualification as an Accredited Investor) and
instructions for use in effecting the surrender of a Certificate in exchange
for, subject to Section 2.10 and Section 2.11, the merger consideration provided
for in Section 2.1(c), Section 2.1(d) or Section 2.2(b), as applicable, with
respect to each share formerly represented by such Certificate. As soon as
reasonably practicable after the Effective Time, Buyer shall, or shall cause the
Surviving Corporation to, cause the Exchange Agent to mail to each record
holder, as of the Effective Time, of an outstanding Certificate, who has not
previously submitted a duly executed letter of transmittal, such form of letter
of transmittal and instructions.

19

--------------------------------------------------------------------------------

 

          (c) Upon the surrender of a Certificate (or an affidavit of loss in
lieu of such Certificate as provided in Section 3.2(d)) to the Exchange Agent in
accordance with the terms of the letter of transmittal and instructions provided
by the Exchange Agent, the holder of such Certificate shall be entitled to
receive in exchange therefor (i) subject to Section 2.10 and Section 2.11, the
merger consideration provided for in Section 2.1(c), Section 2.1(d) or
Section 2.2(b), as applicable (after giving effect to required Tax withholdings
as provided in Section 3.2(f)) that such holder is entitled to receive pursuant
to this Agreement and (ii) a check in the amount (after giving effect to
required Tax withholdings as provided in Section 3.2(f), including with respect
to the entitlements of Non-Accredited Investors to cash in lieu of any shares of
Buyer Stock) of (A) any cash in lieu of fractional shares thereof plus (B) any
unpaid non-stock dividends and any other dividends or other distributions that
such holder has the right to receive pursuant to this Agreement, and the
Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on any amount payable upon due surrender of a Certificate. If a
delivery or payment is to be made to a Person other than the Person in whose
name a Certificate surrendered is registered, it shall be a condition of
delivery or payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and delivered to the Exchange
Agent with all documents required to evidence and effect such transfer and that
the Person requesting such delivery or payment pay any transfer or other Taxes
required by reason of the delivery or payment to a Person other than the
registered holder of the Certificate surrendered or establish to the
satisfaction of the Exchange Agent that such Tax has been paid or is not
applicable. All shares of Buyer Stock to be issued pursuant to the Merger
(including the Escrow Shares) shall be deemed issued and outstanding as of the
Effective Time and whenever a dividend or other distribution is declared by
Buyer in respect of Buyer Stock, the record date for which is at or after the
Effective Time, that declaration shall include dividends or other distributions
in respect of all shares issuable pursuant to this Agreement. No dividends or
other distributions in respect of Buyer Stock shall be paid to any holder of any
unsurrendered Certificate until such Certificate (or an affidavit of loss in
lieu of the Certificate as provided in Section 3.2(d)) is surrendered for
exchange in accordance with this Section 3.2. Subject to the effect of
applicable Laws, following surrender of any such Certificate (or affidavits of
loss in lieu of the Certificate as provided in Section 3.2(d)), there shall be
issued and/or paid to the holder of the whole shares of Buyer Stock issued in
exchange therefor, without interest, (x) at the time of such surrender, the
dividends or other distributions with a record date after the Effective Time
theretofore payable with respect to such whole shares of Buyer Stock and not
paid and (y) at the appropriate payment date, the dividends or other
distributions payable with respect to such whole shares of Buyer Stock with a
record date after the Effective Time but with a payment date subsequent to
surrender. Until surrendered as contemplated by this Section 3.2(c), each
Certificate (other than Certificates representing shares of Company Stock to be
cancelled in accordance with Section 2.1(b) and Dissenting Shares) shall at any
time after the Effective Time represent solely the right to receive upon such
surrender, subject to Section 2.10 and 2.11, the merger consideration provided
for in Section 2.1(c), Section 2.1(d) or Section 2.2(b), as applicable,
allocable to the shares represented by such Certificate, as contemplated by
Article II and this Article III. Notwithstanding any provision of this Agreement
to the contrary, the number of shares of Buyer Stock comprised in the portion of
the Aggregate Merger Consideration to be received by any Stockholder pursuant to
the Merger, and/or any cash amount to be received by each Stockholder pursuant
to this Agreement (with such Buyer Stock being valued at the Closing Price),
shall be reduced by the outstanding principal and accrued interest

20

--------------------------------------------------------------------------------

 

payable by such Stockholder to the Company pursuant to the terms of such
Stockholder’s promissory notes in favor of the Company, and the Company shall
deliver to Buyer at least five (5) Business Days prior to the Closing a schedule
providing correct and complete details of all such promissory notes and all such
amounts payable by any Stockholder as of the Closing; provided, that such
Stockholder has delivered to the Company prior to the Closing a written consent,
in form reasonably satisfactory to Buyer, authorizing such reduction.
          (d) If any Certificate shall have been lost, stolen or destroyed, upon
the making and delivery of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed, the Exchange Agent will deliver in
exchange for such lost, stolen or destroyed Certificate, subject to Section 2.10
and Section 2.11, the merger consideration provided for in Section 2.1(c),
Section 2.1(d) or Section 2.2(b), as applicable, with respect to the shares
formerly represented thereby. No Stockholder shall be required to deliver any
bond or other security in connection with the delivery of an affidavit as
contemplated by this Section 3.2(d).
          (e) To the extent permitted by applicable Law, none of Buyer,
MergerCo, the Company, the Surviving Corporation or the Exchange Agent shall be
liable to any Person in respect of any Common Stock Consideration per Share or
Preferred Stock Merger Consideration per Share or any cash amounts to be paid in
lieu thereof from the Exchange Fund properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law. If any
Certificate shall not have been surrendered prior to six (6) months after the
Effective Time, any such shares, cash, dividends or distributions in respect of
such Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any Person previously entitled thereto.
          (f) Each of the Exchange Agent, the Surviving Corporation,
Stockholders’ Representative and Buyer shall deduct and withhold from any
amounts payable or consideration deliverable by them pursuant to this Agreement
to any holder of Company Stock, such amounts or such consideration as are
required to be withheld by them with respect to the making of such payment or
delivery of such consideration under the Code and the rules and regulations
promulgated thereunder, or any provision of United States federal, state or
local Tax Laws. To the extent that amounts or consideration are so withheld,
such withheld amounts (or the cash equivalent of such consideration) shall be
(i) remitted by the Exchange Agent, the Surviving Corporation, Stockholders’
Representative or Buyer, as the case may be, to the applicable governmental
agency and (ii) treated for all purposes of this Agreement as having been paid
or delivered to the holder of the Company Stock in respect of which such
deduction and withholding was made.
          (g) All the merger consideration provided for in Section 2.1(c),
Section 2.1(d) or Section 2.2(b), as applicable, or cash paid in lieu thereof in
accordance with this Agreement, paid upon the surrender of a Certificate in
accordance with the terms of this Article III shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of Company Stock
formerly represented by such Certificate. At the Effective Time, the stock
transfer books of the Company shall be closed and no further registration of
transfers of shares shall thereafter be made on the records of the Company. If,
after the Effective Time, Certificates are presented

21

--------------------------------------------------------------------------------

 

to the Surviving Corporation for transfer, they shall be cancelled and exchanged
for the merger consideration provided for in Section 2.1(c), Section 2.1(d) or
Section 2.2(b), as applicable, or cash paid in lieu thereof, as provided in this
Article III, subject to applicable Law in the case of Dissenting Shares.
          (h) The Exchange Agent shall invest any cash included in the Exchange
Fund as directed by Buyer in direct obligations of the U.S. Treasury, on a daily
basis. Any interest and other income resulting from such investments shall be
the property of and will be promptly paid to Buyer. If for any reason (including
losses) the cash in the Exchange Fund shall be insufficient to fully satisfy all
of the payment obligations to be made by the Exchange Agent hereunder, Buyer
shall promptly deposit cash into the Exchange Fund in an amount that is equal to
the deficiency in the amount of cash required to fully satisfy such payment
obligations.
          (i) Promptly following the date that is thirty (30) months after the
Effective Time, the Exchange Agent shall deliver to the Surviving Corporation
all cash, Certificates and other documents in its possession relating to the
Merger. Any former Stockholders who have not complied with this Section 3.2
prior to the end of such thirty (30) month period shall thereafter look only to
the Surviving Corporation (subject to abandoned property, escheat or other
similar Laws) for payment of their claim for the merger consideration provided
for in Section 2.1(c), Section 2.1(d) or Section 2.2(b), as applicable, or any
cash or cash paid in lieu thereof, without any interest thereon. If any
Certificates shall not have been surrendered immediately prior to the date that
such unclaimed funds would otherwise become subject to any abandoned property,
escheat or similar Law unclaimed funds payable with respect to such Certificates
shall, to the extent permitted by applicable Law, become the property of
Surviving Corporation, free and clear of all claims or interest of any Person
previously entitled thereto.
     Section 3.3 Appraisal Rights.
          (a) Notwithstanding anything in this Agreement to the contrary, any
shares of Company Stock that are issued and outstanding immediately prior to the
Effective Time and that are held by Stockholders who, in accordance with
Section 262 of the DGCL (the “Appraisal Rights Provisions”) (i) have not
consented in the Stockholder Written Consent (as defined in the Recitals) to
adopt and approve this Agreement and (ii) shall have demanded properly in
writing on or before the Demand Date appraisal for such shares and complied in
all respects with the Appraisal Rights Provisions and (iii) shall not have
effectively withdrawn, lost or failed to perfect their rights to appraisal
(collectively, the “Dissenting Shares”), will not be converted as described in
Section 2.1, but at the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, shall be cancelled and shall cease to
exist and shall represent the right to receive only those rights provided under
the Appraisal Rights Provisions; provided, however, that all shares of Company
Stock held by Stockholders who shall have failed to perfect or who effectively
shall have withdrawn or lost their rights to appraisal of such shares of Company
Stock under the Appraisal Rights Provisions shall thereupon be deemed to have
been cancelled and retired and to have been converted, as of the Effective Time,
into the right to receive, subject to Section 2.10 and Section 2.11, the merger
consideration provided for in Section 2.1(c), Section 2.1(d) or Section 2.2(b),
as applicable, or any cash in lieu of fractional shares, without interest, in
the manner provided in Article II. For purposes of this Agreement,

22

--------------------------------------------------------------------------------

 

the “Demand Date” shall be the twentieth (20th) day after the date of the
mailing by the Company to the Stockholder of notice of the approval of the
Merger and of such Stockholder’s rights to appraisal in accordance with the
Appraisal Rights Provisions. Persons who have perfected statutory rights with
respect to Dissenting Shares as aforesaid will not be paid by the Surviving
Corporation as provided in this Agreement and will have only such rights as are
provided by the Appraisal Rights Provisions with respect to such Dissenting
Shares. The Company shall give Buyer and MergerCo prompt notice of any demands
received by the Company for the exercise of appraisal rights with respect to
shares of Company Stock and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Buyer (which consent may be
withheld by Buyer for any reason whatsoever or for no reason, in Buyer’s sole
and absolute discretion), make any payment with respect to, or settle or offer
to settle, any such demands.
          (b) Each dissenting Stockholder who becomes entitled under the
Appraisal Rights Provisions to payment for Dissenting Shares shall receive
payment therefor after the Effective Time from the Surviving Corporation (but
only after the amount thereof shall have been agreed upon or finally determined
pursuant to the Appraisal Rights Provisions), and such shares of Company Stock
shall be cancelled.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
          The Company hereby makes to Buyer and MergerCo the representations and
warranties contained in this Article IV.
     Section 4.1 Existence; Good Standing; Authority.
          (a) The Company is a corporation duly incorporated, validly existing
and in good standing under the Laws of the State of Delaware. The Company has
all requisite corporate power and authority to own, operate and lease its
properties and assets and carry on its business as currently conducted. The
Company is duly licensed or qualified to do business as a foreign corporation
under the Laws of each jurisdiction listed on Schedule 4.1(a) and each other
jurisdiction in which the character of its properties or assets or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so licensed or qualified, individually or in the aggregate, has
not had and would not reasonably be expected to result in a Company Material
Adverse Effect (as defined below). The Company has made available to Buyer’s
counsel a complete and correct copy of the Company’s Amended and Restated
Certificate of Incorporation (the “Certificate of Incorporation”) and by-laws
(the “By-laws”), each as amended to date, and each of the Certificate of
Incorporation and the By-laws is in full force and effect and no amendments
thereto are pending.
          For the purposes hereof, “Company Material Adverse Effect” means a
material adverse effect on the business, financial condition, assets,
properties, liabilities or results of operations of the Company and its
Subsidiaries, taken as a whole; provided, however, that none

23

--------------------------------------------------------------------------------

 

of the following shall constitute, or will be considered in determining whether
there has occurred, a Company Material Adverse Effect: (i) any change, effect or
circumstance that the Company establishes was the proximate result of any action
or omission of a party required under this Agreement or the pendency or
announcement of the transactions contemplated by this Agreement; (ii) any effect
arising from or relating to any change in GAAP or any change in applicable Laws
unrelated to the Merger, or the interpretation thereof, and of general
applicability after the date of this Agreement; (iii) any failure of the Company
to meet any financial projection or forecast, other than by reason of a breach
or violation of any representation or warranty of the Company pursuant to this
Agreement (provided that for the avoidance of doubt, and as provided in Section
4.24, no representations or warranties are being made by the Company with
respect to financial projections or forecasts); and (iv) any change or
development in economic, political, business or credit derivative market
conditions generally (whether as a result of acts of terrorism, war (whether or
not declared), armed conflicts or otherwise); provided, however, that (ii) and
(iv) above shall operate only to the extent that such effect, change or
development does not affect the Company and its Subsidiaries, taken as a whole,
in a disproportionate manner.
          (b) The Company has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby, subject only to receipt of the Stockholder
Written Consent from holders of Company Stock constituting (i) at least a
majority of the outstanding shares of the voting capital stock of the Company
representing at least a majority of the outstanding voting power of the Company
and (ii) at least a majority of the outstanding shares of the Series D
Convertible Preferred Stock (collectively, the “Required Stockholder Approval”).
This Agreement has been duly executed and delivered by the Company and, assuming
the due authorization, execution and delivery of this Agreement by each of Buyer
and MergerCo, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
     Section 4.2 Capitalization.
          (a) The authorized capital stock of the Company consists of
(i) 382,630 shares of Series A Convertible Preferred Stock, par value $.001 per
share, of which 153,400 shares are issued and outstanding; (ii) 2,000,000 shares
of Series C Convertible Preferred Stock, par value $.001 per share, of which
1,200,000 shares are issued and outstanding; (iii) 35,000,000 shares of Series D
Convertible Preferred Stock, par value $.001 per share, of which 19,035,560
shares are issued and outstanding; and (iv) 65,000,000 shares of Common Stock,
par value $.001 per share, of which 20,101,514 shares are issued and
outstanding. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued, and are fully paid and
non-assessable. Schedule 4.2(a) sets forth a correct and complete list as of the
date of this Agreement of (i) the number of shares of Common Stock and
Convertible Preferred Stock that each current Stockholder of the Company holds
of record, (ii) each outstanding Vested Company Option, Unvested Company Option
and share of Company Restricted Stock, including the holder, date of grant
exercise price (if applicable), number of shares of Common Stock subject
thereto, number of shares of Common Stock vested of such date, vesting schedule,
the type of Company Option, share of Company Restricted Stock and the Stock Plan
under which such

24

--------------------------------------------------------------------------------

 

Company Option or share of Company Restricted Stock was granted, and (iii) each
outstanding T-Zero LTIP Award and Q-Wixx LTIP Award (together, the “LTIP
Awards”), including the holder, date of grant exercise price (if applicable),
number of shares of Common Stock (if applicable) subject thereto, number of such
LTIP Awards vested of such date, vesting schedule, the type of LTIP Award the
Stock Plan under which such LTIP Award was granted. Except as set forth on
Schedule 4.2(a), there are no outstanding subscriptions, options, warrants,
commitments, preemptive rights, deferred compensation rights, agreements,
arrangements or commitments of any kind to which the Company is a party relating
to the issuance of, or outstanding securities convertible into or exercisable or
exchangeable for, any shares of capital stock of any class or other equity
interests of the Company. The Company does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the Stockholders on any matter. Except as set forth on
Schedule 4.2(a), there are no agreements to which the Company is a party with
respect to the voting of any shares of capital stock of the Company or which
restrict the transfer of any such shares. Except as set forth on
Schedule 4.2(a), there are no outstanding contractual obligations of the Company
to repurchase, redeem or otherwise acquire any shares of capital stock, other
equity interests or any other securities of the Company.
          (b) Each Company Option and share of Company Restricted Stock (i) was
granted in compliance in all material respects with all applicable Laws and all
of the terms and conditions of the Stock Plan pursuant to which it was issued,
(ii) except as set forth on Schedule 4.2(b), has an exercise price (if
applicable) per share of Common Stock equal to or greater than the fair market
value of a share of Common Stock on the grant date, (iii) has a grant date
identical to the date on which the Company Board or compensation committee
actually awarded such Company Option and share of Company Restricted Stock, and
(iv) qualifies for the Tax and accounting treatment afforded to such Company
Option and share of Company Restricted Stock in the Company’s Tax returns and
the Company’s Financial Statements, respectively, and (v) except as set forth on
Schedule 4.2(b), is exempt from Section 409A of the Code.
     Section 4.3 Subsidiaries.
          (a) The Company’s Subsidiaries are listed on Schedule 4.3(a). Except
as set forth on Schedule 4.3(a), the Company owns directly or indirectly all of
the outstanding shares of capital stock or other equity interest of each of the
Company’s Subsidiaries. Except as set forth on Schedule 4.3(a), neither the
Company nor any of its Subsidiaries owns, directly or indirectly, any capital
stock, equity or other ownership interest in any other Person. Each of the
outstanding shares of capital stock or other securities of each of the Company’s
Subsidiaries is duly authorized, validly issued, fully paid and non-assessable.
          (b) Each of the Company’s Subsidiaries is an entity of the type set
forth on Schedule 4.3(b), duly incorporated, organized or otherwise formed,
validly existing and in good standing under the Laws of its jurisdiction of
organization and has all requisite corporate or similar power and authority to
own, operate and lease its properties and assets and to carry on its business as
currently conducted. Each such Subsidiary is duly licensed or qualified to do
business as a foreign corporation under the Laws of each jurisdiction listed on
Schedule 4.3(b)

25

--------------------------------------------------------------------------------

 

and each other jurisdiction in which the character of its properties or assets
or in which the transaction of its business makes such qualification necessary,
except where the failure to be so licensed or qualified, individually or in the
aggregate, has not had and would not reasonably be expected to result in a
Company Material Adverse Effect. The Company has made available to Buyer’s
counsel a complete and correct copy of the organizational documents of each such
Subsidiary, in each case as amended to date, and each of those organizational
documents is in full force and effect and no amendments thereto are pending.
     Section 4.4 No Conflict; Consents.
          (a) Subject to the adoption and approval of the Merger by the
Stockholders, the execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby in accordance with the terms hereof, will not, except as set forth on
Schedule 4.4(a), (i) violate, conflict with or result in a default (whether
after the giving of notice, lapse of time or both) under, give rise to a right
of termination of or acceleration of any obligations under or the creation of an
Encumbrance on any of the assets of the Company or any of its Subsidiaries
pursuant to any agreement, lease, license, contract, note, mortgage, indenture,
arrangement or other obligation (each a “Contract”) to which the Company or any
of its Subsidiaries is a party or by which the Company’s or any of its
Subsidiaries’ assets are bound, (ii) conflict with, or result in, any violation
of any provision of the Certificate of Incorporation or By-laws or the
comparable organizational documents of any of the Company’s Subsidiaries; or
(iii) violate or result in a violation of, or constitute a default (whether
after the giving of notice, lapse of time or both) under, any provision of any
Law, or any order of, or any restriction imposed by, any court or other
Governmental Body applicable to the Company or any of its Subsidiaries, except,
in the case of clauses (i) and (iii) of this Section 4.4(a), for any such
conflicts, defaults, violations, terminations and any waivers if not obtained
that would not, individually or in the aggregate, reasonably be expected to
result in a Loss that would exceed $1,000,000 or otherwise reasonably be
expected to result in a Company Material Adverse Effect.
          (b) Except as set forth in Schedule 4.4(b), no notice, or report to,
declaration or filing with, or consent or approval of (i) any United States
federal, state or local, or any supra-national or non-U.S., government,
political subdivision, governmental, regulatory or administrative authority,
instrumentality, agency body or commission, Self-Regulatory Organization, court,
tribunal or judicial or arbitral body, including the Securities and Exchange
Commission (the “SEC”), the Financial Industry Regulatory Authority, Inc.
(“FINRA”) and the FSA (each a “Governmental Body”), or (ii) any other third
party pursuant to any Material Contract, is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
by the Company of this Agreement, and the performance by the Company or any of
its Subsidiaries under, or the consummation by the Company and its Subsidiaries
of the transactions contemplated by, this Agreement in accordance with the terms
hereof, except for: (A) the filing of a pre-merger notification and report form
by the Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the “HSR Act”), and the expiration or termination of the applicable
waiting period thereunder; and (B) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware. For purposes of this Agreement,
“Self-Regulatory Organization” shall mean any U.S. or foreign commission,

26

--------------------------------------------------------------------------------

 

board, agency or body that is not a Governmental Body but is charged with the
supervision or regulation of brokers, dealers, securities underwriting or
trading, stock exchanges, commodities exchanges, ECNs, insurance companies or
agents, investment companies or investment advisers.
          (c) Schedule 4.4(c) sets forth a correct and complete list of all
claims currently held by the Company or any of its Subsidiaries, as creditors or
claimants, with respect to debtor or debtor-in-possession subject to proceedings
under Chapter 11 of Title 11 of the United States Code, together with a correct
and complete list of all orders entered by the applicable United States
Bankruptcy Court with respect to each such proceeding. None of such orders
would, individually or in the aggregate, reasonably be expected to involve
$1,000,000 or more or otherwise result in a Company Material Adverse Effect.
     Section 4.5 Financial Statements.
          (a) The Company has delivered to Buyer the following financial
statements, copies of which are attached hereto as Schedule 4.5(a)
(collectively, the “Company’s Financial Statements”):
     (i) the audited consolidated balance sheets of the Company and its
Subsidiaries as of December 31, 2006 and December 31, 2007, and consolidated
statements of income and cash flows for each of the years then ended (such
December 31, 2007 audited consolidated balance sheet being hereinafter referred
to as the “Latest Audited Balance Sheet”); and
     (ii) the Estimated Reference Date Balance Sheet, and the unaudited,
unconsolidated statements of income and cash flows for the three-month period
then ended.
Subject to, in the case of any of the Company’s Financial Statements that are
unaudited, the absence of footnotes and the need to make normal, recurring
year-end adjustments with respect to any of the Company’s Financial Statements
that are unaudited, the Company’s Financial Statements have been prepared in
accordance with GAAP consistently applied and present fairly in all material
respects the consolidated financial condition of the Company and consolidated
results of the Company’s operations, changes in stockholders’ equity and cash
flows, respectively, at and for the periods presented.
          (b) Neither the Company nor any of its Subsidiaries has any
indebtedness or liabilities of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether due or to become due) that would,
individually or in the aggregate, reasonably be expected to result in a Loss
that would exceed $1,000,000 or otherwise reasonably be expected to result in a
Company Material Adverse Effect, other than those (i) fully reflected in or
reserved against in the Latest Audited Balance Sheet, or (ii) set forth on
Schedule 4.5(b).
     Section 4.6 Absence of Certain Changes. Except as set forth on
Schedule 4.6, since the date of the Latest Audited Balance Sheet, the Company
and its Subsidiaries have operated their business only in the ordinary course of
business consistent with past practices, and, without limiting the generality of
the foregoing, (i) there has not been any change, event or effect that,

27

--------------------------------------------------------------------------------

 

individually or in the aggregate, would reasonably be expected to result in a
Company Material Adverse Effect, and (ii) the Company and its Subsidiaries have
not taken any action that would be prohibited by Section 6.1, if such provisions
had been in effect since the date of the Latest Audited Balance Sheet.
     Section 4.7 Litigation. Except as set forth on Schedule 4.7(a), as of the
date hereof (a) there is no litigation, action, suit, claim, arbitration,
investigation or other proceeding pending or, to the Knowledge of the Company,
threatened, against the Company or any of its Subsidiaries, and (b) neither the
Company nor any of its Subsidiaries is a party to or subject to any provision of
any outstanding writ, order, judgment, injunction, decree or award of any
Governmental Body. Neither the Company nor any of its Subsidiaries is a party to
any litigation, action, suit, claim, arbitration, investigation or other
proceeding, or subject to any provision of any outstanding writ, order,
judgment, injunction, decree or award of any Governmental Body that would,
individually or in the aggregate, reasonably be expected to result in a Loss
that would exceed $1,000,000 or otherwise reasonably be expected to result in a
Company Material Adverse Effect.
     Section 4.8 Taxes.
          (a) Except as set forth on Schedule 4.8 :
     (i) Neither the Company nor any of its Subsidiaries has taken or agreed to
take any action to, nor to the Knowledge of the Company is there any fact or
circumstance that would, prevent the Merger and other transactions contemplated
by this Agreement from qualifying as a “reorganization” within the meaning of
Section 368(a) of the Code; provided, that the representations and warranties in
this Section 4.8(a)(i) shall not be considered breached if the Merger and other
transactions contemplated by this Agreement do not qualify as a “reorganization”
within the meaning of Section 368(a) of the Code because of cash paid to the
Stockholders with respect to Dissenting Shares;
     (ii) The Company and its Subsidiaries have timely filed or been included
in, or will timely file or be included in, all Tax Returns (as defined below)
required to be filed by them or in which they are to be included, taking into
account any extension of time to file granted to or obtained on behalf of the
Company or any of its Subsidiaries, and all such Tax Returns are or will be
true, correct and complete in all material respects;
     (iii) The Company and its Subsidiaries have timely paid or caused to be
timely paid all Taxes due and owing or have made provision, in accordance with
GAAP, for all Taxes owed or accrued, whether current or deferred;
     (iv) Neither the Internal Revenue Service (the “IRS”) nor any other Taxing
Authority has proposed, asserted or assessed any deficiency or claim for any
amount of additional Taxes with respect to the Company or any of its
Subsidiaries;

28

--------------------------------------------------------------------------------

 

     (v) No waiver, extension or comparable consent regarding the application of
the statute of limitations with respect to any Taxes of the Company or any
Subsidiary is outstanding, nor is any request for any such waiver or consent
pending. To the Knowledge of the Company, no federal, state, local or foreign
audits or other administrative proceedings or court proceedings are pending with
regard to any Taxes or Tax Returns of the Company or any of its Subsidiaries and
neither the Company nor any of its Subsidiaries has received a written notice of
any actual or threatened audits or proceedings or is otherwise aware of any such
audits or proceedings;
     (vi) The Company and its Subsidiaries have complied with all applicable
Laws relating to the withholding of Taxes, the payment thereof and any
information reporting requirements;
     (vii) Neither the Company nor any of its Subsidiaries has ever been a
member of an affiliated group of corporations filing a consolidated federal
income Tax Return (other than a group the common parent of which is or was the
Company) nor does the Company or any of its Subsidiaries have any liability for
Taxes of any other Person (other than the Company or any of its Subsidiaries)
under Treasury Regulations Section 1.1502-6 (or any similar provision of
foreign, state or local Law) or otherwise. Neither the Company nor any of its
Subsidiaries is a party to any agreement or arrangement requiring the
indemnification, sharing or allocation of Taxes;
     (viii) Neither the Company nor any of its Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any:
     (A) Change in method of accounting for a taxable period ending on or prior
to the Closing Date;
     (B) “Closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date;
     (C) Intercompany transaction or excess loss account described in Treasury
Regulations under Section 1502 of the Code (or any corresponding or similar
provision of state, local or foreign income Tax law);
     (D) Installment sale or open transaction disposition made on or prior to
the Closing Date; or
     (E) Prepaid amount received on or prior to the Closing Date;

29

--------------------------------------------------------------------------------

 

     (ix) Neither the Company nor any of its Subsidiaries has distributed the
stock of another entity or had its stock distributed by another entity in a
transaction that was purported or intended to be governed in whole or in part by
Code Sections 355 or 361;
     (x) Neither the Company nor any of its Subsidiaries has participated in a
reportable transaction within the meaning of Treasury
Regulation Section 1.6011-4(b) or (c)(3);
     (xi) Neither the Company nor any of its Subsidiaries has participated in a
transaction for which disclosure was provided in order to avoid penalties;
     (xii) Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code;
     (xiii) Neither the Company nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or could result,
separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of Section 280G of the Code (or any corresponding or similar
provision of state, local or foreign Tax law);
     (xiv) There are no liens for Taxes upon the assets of the Company or its
Subsidiaries, except for Permitted Liens and for which adequate reserves have
been established in accordance with GAAP; and
     (xv) To the Knowledge of the Company, there are no unresolved questions,
claims or disputes concerning the liability for Taxes of the Company or any
Subsidiary that would exceed the estimated reserves therefor established on its
books and records. No written claim has ever been made by a Taxing Authority in
a jurisdiction where the Company or a Subsidiary does not file Tax Returns that
the Company or such Subsidiary may be subject to taxation by that jurisdiction.
          (b) For the purposes of this Agreement:
     (i) “Taxes” shall mean any and all taxes, charges, fees, levies or other
assessments, imposed by the IRS or any other Taxing Authority, including,
without limitation, all federal, state, local and foreign income, profits,
franchise gross receipts, environmental, customs duty, capital stock,
severances, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, or other amounts payable under unclaimed property, escheatment or similar
common law concepts, and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments, whether disputed or not and

30

--------------------------------------------------------------------------------

 

including any obligations to indemnify or otherwise assume or succeed to any
such liabilities of any other person;
     (ii) “Taxing Authority” shall mean any Governmental Body, or any lawfully
authorized third-party, responsible for the audit, assessment, collection,
adjudication, arbitration, competent authority or other dispute resolution, or
other administration of Taxes, including without limitation the legislation of
Laws, or promulgation of rules or regulations, with respect to Taxes; and
     (iii) “Tax Returns” shall mean any report, return, estimate, information
return, statement, document or other filing (together with all schedules and
other information included therewith) required to be supplied to any Taxing
Authority with respect to Taxes.
     Section 4.9 Employee Benefit Plans.
          (a) Schedule 4.9(a)(1) sets forth all benefit and compensation plans,
contracts, policies or arrangements covering current or former employees (to the
extent there are any continuing obligations with respect thereto) of the Company
and its Subsidiaries, including but not limited to, “employee benefit plans,” as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), currently maintained by the Company or any of its
Subsidiaries, and deferred compensation, severance, change in control,
termination stock option, stock purchase, stock appreciation rights, stock
based, incentive and bonus plans (the “Company Plans”), other than plans
maintained outside of the United States primarily for the benefit of Employees
working outside of the United States (the “Company Non-U.S. Plans”, which are
set forth on Schedule 4.9(a)(2) (the Company Plans and Company Non-U.S. Plans,
together, the “Benefit Plans”). True and complete copies of all Benefit Plans
listed on Schedules 4.9(a)(1) and 4.9(a)(2), including but not limited to, any
trust instruments, insurance contracts and loan agreements forming a part of any
Company Plans, and all amendments thereto have been provided or made available
to Buyer. Neither the Company nor any of its Subsidiaries nor any entity which
is considered one employer with the Company under Section 4001 of ERISA or
Section 414 of the Code (an “ERISA Affiliate”), sponsors, maintains or
contributes to (or is obligated to contribute to) or has within the past six
years sponsored, maintained or contributed to any “employee pension plan,” as
defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA or
Section 412 of the Code (a “Pension Plan”), or any “multiemployer plan,” as
defined in Section 3(37) of ERISA, or any “multiple employer” plan within the
meaning of Sections 210(a), 4063 or 4064 of ERISA. Except as set forth on
Schedule 4.9(a)(3), none of the Company Plans provides for post-employment life
or health insurance benefits for any participant or any beneficiary of a
participant, except as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (or similar state law), and at the
expense of the participant or the participant’s beneficiary, and the Company or
its Subsidiaries may amend or terminate any such plan at any time without
incurring any liability thereunder other than in respect of claims incurred
prior to such amendment or termination.
          (b) The Company Plans have been administered substantially in
accordance with and are in substantial compliance with the applicable provisions
of ERISA and the Code,

31

--------------------------------------------------------------------------------

 

including but not limited to the Pension Protection Act of 2006, Section 502(i)
of ERISA and Section 4975 of the Code, and neither the Company nor any of its
Subsidiaries has incurred or reasonably expects to incur a material Tax or
material penalty imposed by Section 502 of ERISA or Section 4980F of the Code.
Each Company Plan that is intended to qualify under Section 401(a) of the Code
has received a favorable determination or opinion letter from the IRS regarding
its qualification thereunder, covering all Tax Law changes through and including
the Economic Growth and Tax Relief Reconciliation Act of 2001, or has applied to
the IRS for such favorable determination letter within the applicable remedial
amendment period under Section 401(b) of the Code, such plan was timely adopted
and no circumstances exist that could reasonably be expected to result in loss
of the qualification of such Company Plan under Section 401(a) of the Code. All
Company Plans that are “nonqualified deferred compensation plans” (within the
meaning of Section 409A of the Code) have been maintained and administered in
good faith compliance with the requirements of Section 409A of the Code and any
regulations or other guidance issued thereunder. As of the date hereof, there is
no pending or, to the Company’s knowledge threatened, litigation relating to the
Company Plans that would, individually or in the aggregate, reasonably be
expected to result in a Loss that would exceed $1,000,000 or that would
otherwise have a Company Material Adverse Effect.
          (c) All contributions required to be made under each Benefit Plan, as
of the date hereof, have been timely made and all obligations in respect of each
Benefit Plan have been, in all material respects, properly accrued and reflected
in the Company’s Financial Statements.
          (d) All Company Non-U.S. Plans comply in all material respects with
applicable local Law. The Company and its Subsidiaries have no unfunded
liabilities with respect to any such Company Non-U.S. Plan that would,
individually or in the aggregate, reasonably be expected to result in a Loss
that would exceed $1,000,000 or that would otherwise have a Company Material
Adverse Effect. As of the date hereof, there is no pending or, to the Knowledge
of the Company, threatened litigation relating to Company Non-U.S. Plans that
would, individually or in the aggregate, reasonably be expected to result in a
Loss that would exceed $1,000,000 or that would otherwise have a Company
Material Adverse Effect.
          (e) Except as set forth in Schedule 4.9(e), there has been no
amendment to, announcement by the Company or any of its Subsidiaries relating
to, or change in employee participation or coverage under, any Benefit Plan
which would increase materially the expense of maintaining such plan above the
level of the expense incurred therefor for the most recent fiscal year.
          (f) Except as expressly contemplated by this Agreement or as set forth
on Schedule 4.9(f), neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due or result in an increase in any payment to any employee of
the Company or any of its Subsidiaries, (ii) increase any compensation or
benefits (including without limitation severance or termination pay) otherwise
payable under any Benefit Plan, (iii) result in the acceleration of the time of
payment or vesting or result in any payment or funding (through a grantor trust
or otherwise) of any such compensation or benefits or increase the amount
payable or result in any other obligation pursuant to any such plan, (iv) limit
or restrict the right of the Company or, after the

32

--------------------------------------------------------------------------------

 

consummation of the transactions contemplated hereby, Buyer to merge, amend or
terminate any of the Company Plans, (v) result in payments under any of the
Company Plans which would not be deductible under Section 280G of the Code,
(vi) result in any actual or potential obligation to reimburse or otherwise
“gross up” any Person for the interest or additional Tax set forth under
Section 409A(a)(1)(B) of the Code or (vii) result in any obligation on the
Company or any of its Subsidiaries to account to Her Majesty’s Revenue & Customs
for income Tax on behalf of any employee or former employee or pay National
Insurance contributions (either employer or employee) pursuant to Chapter 2 of
Part 7 of the Income Tax (Earnings and Pensions) Act 2003.
          (g) The Company undertakes that all holders of Company Restricted
Stock (as defined in clause 2.2(b) of this Agreement) who are subject to
taxation in the United Kingdom will join with their relevant employing company
in executing valid taxation elections pursuant to section 431(1) of Chapter 2 of
Part 7 of the Income Tax (Earnings and Pensions) Act 20 within the relevant time
limit set by such section in respect of their acquisition of Buyer Stock if no
election has previously been entered into in respect of the related Company
Restricted Stock.
          (h) The Company undertakes that it shall procure the assignment of its
rights to Buyer pursuant to all deeds of indemnities and undertakings entered
into by employees or former employees in relation to indemnification for
secondary class 1 National Insurance liabilities arising in the United Kingdom
in respect of Company Restricted Stock and Company Options awarded pursuant to
the Stock Plan and shall if necessary to give effect to the continuation and
survival of such indemnities and undertakings with respect to New Options or
Buyer Stock issued to such employee or former employee in relation to their
Company Restricted Stock, procure that new deeds or amendments to the existing
deeds are entered into by the relevant parties.
     Section 4.10 Real and Personal Property.
          (a) Except as set forth on Schedule 4.10(a), neither the Company nor
any of its Subsidiaries owns any real property.
          (b) Schedule 4.10(b) sets forth a list of all real property leased or
sub-leased by the Company or any of its Subsidiaries (the “Leased Real
Property”). All leases or sub-leases relating to Leased Real Property are
identified on Schedule 4.10(b) (each a “Lease” and collectively, the “Leases”)
and the Company has made available to Buyer’s counsel a correct and complete
copy of each Lease, as amended to date. With respect to each Lease listed on
Schedule 4.10(b ):
     (i) such Lease is legal, valid, binding and enforceable against each party
thereto, subject to applicable bankruptcy, insolvency, moratorium or other
similar Laws relating to creditors’ rights and general principles of equity;
     (ii) each Lease listed on Schedule 4.10(b) has been duly authorized and
executed by the Company or such Subsidiary, as applicable;
     (iii) neither the Company nor any Subsidiary, nor any other party to any
Lease, is in default in any material respect under any of said Leases, and no

33

--------------------------------------------------------------------------------

 

event has occurred which, with notice or lapse of time, would constitute a
material default or permit termination, material modification or acceleration
under any of said Leases;
     (iv) neither the Company nor any Subsidiary has any obligation or right to
purchase or acquire the property subject to said Lease or any other real estate
interest; and
     (v) neither the Company nor any Subsidiary has granted to any Person or
entity, and, to the Knowledge of the Company, no Person or entity has, any
option, right of first refusal or other contractual right or obligation to
acquire title to any of such property or any portion thereof or interest
therein.
          (c) Except as set forth on Schedule 4.10(c ) or as specifically
disclosed in the Latest Audited Balance Sheet, and except with respect to leased
personal property, the Company and each of its Subsidiaries have good title to
all of the tangible personal property and assets shown on the Latest Audited
Balance Sheet or acquired after the date of the Latest Audited Balance Sheet,
free and clear of any Encumbrances, except for Permitted Liens. For the purposes
of this Agreement, (i) “Encumbrance” shall mean any lien, pledge, charge,
mortgage, easement, encroachment, imperfection of title, title exception, title
defect, right of possession, lease, security interest, encumbrance, adverse
claim, interference or restriction on transfer (except for restrictions arising
under applicable securities Laws), including a Permitted Lien; and (ii)
“Permitted Lien” shall mean (A) Encumbrances securing Indebtedness for Borrowed
Money that is specifically disclosed in the Latest Audited Balance Sheet,
(B) Encumbrances for Taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty or which are being
contested in good faith and which in any event do not exceed $1,000,000,
individually or in the aggregate, (C) carriers’, warehousemens’, mechanics’,
landlords’, materialmens’, repairmens’ or other similar Encumbrances arising in
the ordinary course of business relating to obligations as to which there is no
default on the part of Company and which in any event do not exceed $1,000,000,
individually or in the aggregate, (D) Encumbrances consisting of pledges or
deposits required in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation or to
secure liability to insurance carriers and which in any event do not exceed
$1,000,000, individually or in the aggregate, (E) Encumbrances set forth on
Schedule 4.10(c) and (F) Encumbrances of record or imperfections of title which
are not material in character, amount or extent and which do not materially
detract from the value or materially interfere with the present use of the
assets or specific parcel of Leased Real Property to which they relate.
          (d) The Company and its Subsidiaries are the lessees of, and hold
valid leasehold interests in all material assets shown as leased on the Latest
Audited Balance Sheet and all Leased Real Property disclosed on
Schedule 4.10(b). Except as would not be material to the Company and its
Subsidiaries as a whole, the assets owned, licensed or leased by the Company and
its Subsidiaries constitute all the assets used in the business of the Company
and its Subsidiaries (including all books, records, computers and computer
programs and data processing systems), are in good condition (subject to normal
wear and tear and immaterial impairments of value and damage) and are generally
suitable for the uses for which they are used

34

--------------------------------------------------------------------------------

 

in the operation of the business of such Persons. As of the Effective Time, the
Company and its Subsidiaries will have sufficient property, assets and rights to
engage in the business of the Company and its Subsidiaries in substantially the
same manner as on the date hereof.
     Section 4.11 Labor and Employment Matters.
          (a) Except as set forth on Schedule 4.11(a), (i) the Company and each
of its Subsidiaries are in compliance in all material respects with all
applicable Laws relating to employment and employment practices including,
without limitation, all applicable Laws relating to taxation, employment
standards, workers’ compensation, terms and conditions of employment,
occupational health and safety, disability benefits, wages and hours,
termination of employment, human rights, immigration, pay equity, employment
equity, and, where applicable, the Worker Adjustment and Retraining Notification
Act, (ii) in the three (3) years before the date of this Agreement, there has
been no harassment, discrimination, retaliatory act or similar claim, action or
proceeding against the Company or any of its Subsidiaries or any of their
officers, directors or employees (in their capacities as such), and (iii) no
employee of the Company or any of its Subsidiaries is owed or has filed an
administrative complaint or action alleging the employee is owed any material
wages, benefits or other compensation for past services (other than wages,
benefits and compensation accrued in the ordinary course of business during the
current pay period and accrued vacation). None of the matters identified on
Schedule 4.11(a) would, individually or in the aggregate, reasonably be expected
to result in a Loss that would exceed $1,000,000 or otherwise reasonably be
expected to result in a Company Material Adverse Effect.
          (b) None of the employees of the Company or any Subsidiary is
represented by a labor union and neither the Company nor any Subsidiary of the
Company is a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization. There is no organizational effort currently being made or, to the
Knowledge of the Company, threatened by or on behalf of any labor organization
or trade union to organize any employees of the Company or any Subsidiary, and
neither the Company nor any Subsidiary of the Company is subject to any charge,
demand, petition or representation proceeding seeking to compel, require or
demand it to bargain with any labor union or labor organization; nor is there
pending or, to the Knowledge of the Company, threatened in writing, any material
labor dispute, picketing, strike, walkout, work stoppage, slow-down or lockout
involving the Company or any Subsidiary of the Company, nor has there been any
such action, dispute or proceeding within the last three years.
          (c) Schedule 4.11(c) contains in respect of each employee of any UK
Subsidiary of the Company at the date of this Agreement, details of name, age,
position, gender, length of employment, annual salary, annual bonus, other
remuneration or benefits and notice period required to be served by the
employing company to terminate the employment. Such information is correct and
complete is all respects.
          (d) The data room maintained by the Company in connection with the
transactions contemplated by this Agreement contains true, up-to-date and
complete copies of

35

--------------------------------------------------------------------------------

 

standard contracts of employment between any UK Subsidiary of the Company and
any employees.
     Section 4.12 Contracts. Except as set forth in Schedule 4.12, neither the
Company nor any Subsidiary of the Company is a party to:
          (a) any partnership, joint venture or other similar Contract relating
to the formation, operation, management or control of any partnership or joint
venture;
          (b) any Contract that is reasonably likely to require annual payments
to or from the Company or any of its Subsidiaries in excess of $500,000 in any
calendar year;
          (c) any employment, severance or consulting Contract with any
director, officer or employee requiring an annual payment of cash compensation
in excess of $200,000 for each Person;
          (d) any Contract that (i) purports to limit or restrict in any
material respect the ability of the Company or any Subsidiary or Affiliate (as
defined below in subsection (e)) of the Company to enter into or engage in any
market or line of business, (ii) could require the disposition of any material
assets or line of business of the Company or any Subsidiary of the Company or,
after the Effective Time, Buyer or its Subsidiaries, (iii) grants “most favored
nation” status that, after the Effective Time, would apply to Buyer and its
Subsidiaries, including the Company and its Subsidiaries, or (iv) prohibits or
limits the rights of the Company or any of its Subsidiaries to make, sell,
perform or distribute any products or services or use, transfer, license,
distribute or enforce any of their respective Intellectual Property rights;
          (e) any Contract with any current officer, director or Affiliate of
the Company or any of its Subsidiaries (an “Affiliate” of any Person means
another Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such first Person)
or any Person owning of record or, to the Knowledge of the Company, beneficially
owning five percent or more of the outstanding shares of Common Stock or, to the
Knowledge of the Company, any family member of any of the foregoing or any
entity that is an Affiliate of any such family member;
          (f) any Contract for the sale of any of the assets of the Company or
any of its Subsidiaries other than in the ordinary course of business consistent
with past practice;
          (g) any Contract relating to the incurrence, assumption, surety or
guarantee of any indebtedness (excluding any agreement to guarantee lease
payments);
          (h) any Contract under which the Company or any of its Subsidiaries
has made advances or loans to any other Person (which shall not include routine
travel advances, not to exceed $10,000, made to an employee of the Company or
any of its Subsidiaries in the ordinary course of business consistent with past
practice);

36

--------------------------------------------------------------------------------

 

          (i) any Contract providing for indemnification by the Company or any
of its Subsidiaries of any Person, except for any such Contract that is (x) not
material to the Company or any of its Subsidiaries and (y) entered into in the
ordinary course of business;
          (j) any Contract that contains a put, call or similar right pursuant
to which the Company or any of its Subsidiaries could be required to purchase or
sell, as applicable, any assets that have a fair market value or purchase price
of more than $500,000 or any equity securities of any Person; and
          (k) any other material Contract (or group of related Contracts) not
described (or required to be disclosed on Schedule 4.12 ) pursuant to
Section 4.12(a) through Section 4.12(j) and the performance of which requires
aggregate payments to or from the Company in excess of $500,000 in any instance,
other than Contracts entered into in the ordinary course of business consistent
with past practice.
     A correct and complete copy of each of the Contracts set forth on
Schedule 4.12 (together with each Lease, each Intellectual Property License and
each license with respect to Company Software, collectively, the “Material
Contracts”) has been made available to Buyer’s counsel and each such Material
Contract is in full force and effect and represents legally valid and binding
obligations of the Company and/or its Subsidiaries party thereto and of each
other counterparty thereto, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally and by general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity). Except as
expressly stated on Schedule 4.12, each of the agreements listed on
Schedule 4.12 is in full force and effect, and neither the Company nor any of
its Subsidiaries is and no other party thereto is, in default or breach in any
material respect under the terms of any such Contract.
     Section 4.13 Intellectual Property.
          (a) The Company or its Subsidiaries solely own all right and title to,
free and clear of any lien, or, has licenses (sufficient for the conduct of its
business as currently conducted) to each item of Company Intellectual Property
used in connection with the operation or conduct of its business as currently
conducted, including in connection with the sale of any products or the
provision of any services by the Company or its Subsidiaries. Neither the
Company nor its Subsidiaries are subject to any proceeding or outstanding
decree, order, judgment or stipulation resulting from the resolution of a
dispute restricting in any manner the use, enforceability, transfer or licensing
by the Company or its Subsidiaries of any of the Company Intellectual Property.
          (b) Schedule 4.13(b) contains a list of all Intellectual Property
Licenses. All Intellectual Property Licenses are valid, binding and in full
force and effect. The Company or its Subsidiaries have taken all necessary
action to maintain each Intellectual Property License. No loss or expiration of
any Intellectual Property License is pending or threatened (other than
expiration upon the expiration of any term thereof).
          (c) Schedule 4.13(c) contains a list of all Registered Intellectual
Property owned by, or filed by or on behalf of, the Company or its Subsidiaries.
Each item of Registered

37

--------------------------------------------------------------------------------

 

Intellectual Property owned by, or filed on behalf of, the Company or its
Subsidiaries is valid and subsisting. All necessary registration, maintenance
and renewal fees currently due in connection with said Registered Intellectual
Property have been paid and all necessary documents, recordations and
certifications in connection with such Registered Intellectual Property have
been filed with the relevant patent, copyright, trademark or other authorities
in the United States or foreign jurisdictions, as the case may be, for the
purpose of maintaining such Registered Intellectual Property, except for such
Registered Intellectual Property which the Company has permitted to expire or
has cancelled or abandoned in its reasonable business judgment prior to the
Effective Date.
          (d) The Company’s or its Subsidiaries’ licensing of any of their
trademarks, trade names, and service marks has been subject to commercially
reasonable quality control by the Company or its Subsidiaries and the Company or
its Subsidiaries have exercised such quality control in a consistent and
commercially reasonable manner. Schedule 4.13(d) lists all unregistered and
common law trademarks, service marks and trade names of the Company or its
Subsidiaries currently used in the conduct of the business of the Company or its
Subsidiaries and recognized by the Company or its Subsidiaries as marks or trade
names.
          (e) All Registered Intellectual Property that the Company or its
Subsidiaries purport to own, which was developed by an employee of a Company or
its Subsidiaries, (i) has been assigned to the Company or its Subsidiaries by
said employee through a valid assignment document or (ii) was developed by said
employee working within the scope of his or her employment at the time of such
development so that such Registered Intellectual Property became the exclusive
property of Company or its Subsidiaries pursuant to a valid, executed agreement.
All Company Intellectual Property (excluding any Registered Intellectual
Property) that the Company or its Subsidiaries purport to own, which was
developed by an employee of a Company or its Subsidiaries, was (A) developed by
said employee working within the scope of his or her employment at the time of
such development or (B) assigned to the Company or its Subsidiaries by said
employee through a valid assignment document. All employees working for the
Company or its Subsidiaries as of the date of this Agreement, or employees who
have previously worked for the Company or its Subsidiaries, are or were under an
obligation, pursuant to a valid executed employment agreement, to assign all
rights and interest in any Intellectual Property, developed by said employee
while working within the scope of his or her employment at the time of such
development, to the Company or appropriate Subsidiary.
          (f) Schedule 4.13(f) lists all agreements pursuant to which Company
Intellectual Property has been developed or created by a third party for the
Company or its Subsidiaries. To the extent that any Company Intellectual
Property has been developed or created by a third party for the Company or its
Subsidiaries, the Company or its Subsidiaries either (i) have obtained ownership
of and are the exclusive owner of, or (ii) have obtained a license (sufficient
for the conduct of the business of the Company or its Subsidiaries as currently
conducted) to, all of such third party’s Intellectual Property developed or
created for the Company or its Subsidiaries, by operation of Law or through
execution of a valid assignment or license agreement.

38

--------------------------------------------------------------------------------

 

          (g) The operation of the business of the Company or its Subsidiaries
including the design, development, marketing and sale of the products or
services (including products currently under development), has not and does not
infringe or misappropriate in any manner the Intellectual Property of any third
party or constitute unfair competition or trade practices under the Laws of any
jurisdiction.
          (h) Neither the Company nor its Subsidiaries have received written
notice of any claim from any third party that either the Company Intellectual
Property or the operation of the business of the Company or its Subsidiaries or
any act, product or service of the thereof, infringes or misappropriates the
Intellectual Property of any third party or constitutes unfair competition or
trade practices under the Laws of any jurisdiction. Except as set forth in
Schedule 4.13(h), to the Knowledge of the Company, no Person has or is currently
infringing or misappropriating any Company Intellectual Property. Except as set
forth in Schedule 4.13(h), as of the date of this Agreement, neither the Company
nor any of its Subsidiaries is a party to any suit, action or proceeding which
involves a claim of infringement, unauthorized use, or violation of any
Intellectual Property used or owned by any Person against the Company or its
Subsidiaries, or challenging the ownership, use, validity or enforceability of
any Intellectual Property owned or used by the Company or its Subsidiaries.
          (i) Except as set forth in Schedule 4.13(i), the Company has taken
reasonable steps to protect the rights of the Company or its Subsidiaries in the
Confidential Information used by the Company or its Subsidiaries of any
Confidential Information which has not been intentionally dedicated to the
public domain through the commercially reasonable conduct of the business of the
Company and its Subsidiaries.
          (j) For the purposes of this Agreement:
     (i) “Company Intellectual Property” means any Intellectual Property that is
owned by or licensed to the Company or any of its Subsidiaries, including the
Company Software.
     (ii) “Confidential Information” means any data or information concerning
the Company or its Subsidiaries (including trade secrets), without regard to
form, regarding (for example and including) (a) business process models; (b)
proprietary software, including source code; (c) research, development,
products, services, marketing, selling, business plans, budgets, unpublished
financial statements, licenses, prices, costs, contracts, suppliers, customers,
and customer lists; (d) the identity, skills and compensation of employees,
contractors, and consultants; (e) specialized training; and (f) discoveries,
developments, trade secrets, processes, formulas, data, lists, and all other
works of authorship, mask works, ideas, concepts, know how, designs, and
techniques, whether or not any of the foregoing is or are patentable,
copyrightable, or registrable under any intellectual property Laws or industrial
property Laws in the United States or elsewhere.
     (iii) “Intellectual Property” means any and all of the following,
throughout the world, and all rights arising out of or associated therewith:
(a) all

39

--------------------------------------------------------------------------------

 

patents and applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations in part thereof
(“Patents”); (b) all inventions (whether patentable or not), invention
disclosures, improvements, proprietary information, know how, technology,
technical data and customer lists, and all documentation relating to any of the
foregoing; (c) all copyrights, copyright registrations and applications
therefor, and all derivative works thereof; (e) all rights in internet uniform
resource locators, domain names, trade names, logos, slogans, designs, common
law trademarks and service marks, trademark and service mark registrations and
applications therefor; (f) all software; (g) all rights in databases and data
collections; and (h) all moral and economic rights of authors and inventors,
however denominated.
     (iv) “Intellectual Property Licenses” shall mean licenses (i) with respect
to Company Intellectual Property licensed to any third party (other than end
user licenses in the ordinary course of business) (“Intellectual Property
License Out”) or (ii) pursuant to which a third party has licensed any Company
Intellectual Property to the Company or its Subsidiaries (other than licenses of
commercially available shrink wrap software or off the shelf software (by way of
example only, Adobe Acrobat or Microsoft Word) have a per user license fee of
less than $2,000 or a total acquisition cost of less than $10,000).
     (v) “Registered Intellectual Property” means, throughout the world, any and
all: (a) patents and patent applications (including provisional applications);
(b) registered trademarks and service marks, applications to register trademarks
and service marks, and intent to use applications to register trademarks and
service marks; (c) registered copyrights and applications for copyright
registration; (d) domain name registrations; and (e) any other Intellectual
Property that is the subject of an application, registration or corresponding
right issued by, filed with, or recorded with any Governmental Body.
     Section 4.14 Software.
          (a) Schedule 4.14(a) sets forth a true, correct and complete list of:
(i) the Company Proprietary Software and (ii) the Company Licensed Software
(other than commercially available shrink wrap software or off the shelf
software (by way of example only, Adobe Acrobat or Microsoft Word) having a per
user license fee of less than $2,000 or a total acquisition cost of less than
$10,000).
          (b) Neither the Company nor its Subsidiaries use open source software,
freeware, GNU or Linux systems, or any modification thereof that has resulted in
any (i) restriction on the use, licensing or disclosure of any Software, that
would prevent the operation of the business of the Company or its Subsidiaries;
or (ii) requirement that the Company or its Subsidiaries deliver or otherwise
disclose to any third party any source code for any Company Proprietary Software
or permit any licensee to modify any such source code. Any open source

40

--------------------------------------------------------------------------------

 

software, freeware, GNU or Linux systems, used in connection with or embedded in
the products of the Company or its Subsidiaries, or any modification thereof is
set forth on Schedule 4.14(b).
          (c) To the extent that the Company Proprietary Software was developed
by consultants, contractors or other Persons other than employees of the Company
or its Subsidiaries, such Persons have executed appropriate instruments of
assignment in favor of the Company or its Subsidiaries that have conveyed to the
Company or its Subsidiaries ownership of all of its Intellectual Property rights
in the Company Proprietary Software. The Company or its Subsidiaries have not
received written notice from any third party claiming any right, title or
interest in the Company Proprietary Software.
          (d) Except as detailed in the agreements listed in Schedule 4.14(b),
the Company has not granted any rights in the Company Software to any third
party (other than end user licenses in the ordinary course of business).
          (e) For the purposes of this Agreement:
     (i) “Company Licensed Software” means all Software licensed to the Company
or any of its Subsidiaries.
     (ii) “Company Proprietary Software” means all Software owned by the Company
or its Subsidiaries, including, all current and prior versions of any Software
owned by the Company or its Subsidiaries used to operate the internal computers
and systems of the Company or its Subsidiaries or used in products and services
marketed, licensed, sold or distributed to customers of the Company or its
Subsidiaries.
     (iii) “Company Software” means the Company Licensed Software and the
Company Proprietary Software.
     (iv) “Software” means any computer software program, together with any
error corrections, updates, modifications, or enhancements thereto, in both
machine readable form and human readable form, including all comments and any
procedural code.
     Section 4.15 Environmental Matters. Except as set forth on Schedule 4.15 :
          (a) the Company and its Subsidiaries have at all times been in
material compliance with all applicable Environmental Laws (as defined below)
including with respect to their operations and use of the Leased Real Property;
          (b) neither the Company nor any of its Subsidiaries generates,
transports, treats, stores, or disposes of any Hazardous Material (as defined
below), except in material compliance with all applicable Environmental Laws,
and there has been no Release (as defined below) of any Hazardous Material by
the Company or the Subsidiaries at or on the Leased Real Property or at any
other location that requires remediation by or would result in liability to the
Company or any of its Subsidiaries pursuant to any applicable Environmental Law;

41

--------------------------------------------------------------------------------

 

          (c) neither the Company nor the Subsidiaries have (i) received written
notice under the citizen suit provisions of any Environmental Law; (ii) received
any written request for information, notice, demand letter, administrative
inquiry or written complaint or claim under any Environmental Law; (iii) been
subject to or threatened in writing with any governmental or private action with
respect to any Environmental Law or (iv) received written notice of any
unsatisfied liability under any Environmental Law and to the Knowledge of the
Company there is no such liability;
          (d) the Company has made available to Buyer’s counsel copies of all
environmental reports, studies, assessments, sampling data and memoranda in its
or its Subsidiary’s possession relating to the Company and its Subsidiaries or
any of their current or former properties or operations.
          For the purposes of this Agreement:
     (i) “Environment” means soil, surface waters, groundwater, land, stream
sediments, surface or subsurface strata and ambient air.
     (ii) “Environmental Laws” means all Laws relating to protection of the
Environment or health or safety, including, without limitation, the federal
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act,
the Toxic Substances Control Act, the Endangered Species Act, the Occupational
Safety and Health Act and similar federal, state and local Laws as in effect on
the Closing Date.
     (iii) “Hazardous Material” means any pollutant, toxic substance, hazardous
waste, hazardous materials, hazardous substances, petroleum or
petroleum-containing products regulated under or as defined in, or listed under,
any Environmental Law.
     (iv) “Release” means any releasing, disposing, discharging, injecting,
spilling, leaking, pumping, dumping, emitting, escaping or emptying of a
Hazardous Material into the Environment.
     Section 4.16 Insurance. Schedule 4.16 sets forth a correct and complete
list of all the insurance policies held by, or for the benefit of, the Company
and its Subsidiaries (the “Insurance Policies”), and any pending and unresolved
claims made against the Insurance Policies. Except as set forth on
Schedule 4.16, the Insurance Policies are sufficient for the Company’s
compliance in all material respects with all applicable Laws, all Contracts to
which the Company or its Subsidiary is a party or by which it is bound, and
generally for the Company and its Subsidiaries to conduct their business in the
normal and ordinary course consistent with prevailing industry practices. With
respect to any pending claims, neither the Company nor any of its Subsidiaries
has been advised in writing of any defense to coverage in connection with any
claim to coverage asserted under or in connection with any of the Insurance
Policies. Each of the Company and its Subsidiaries is in compliance with the
provisions of each Insurance Policy under which it is the insured party, except
where any failure to comply would not, individually or

42

--------------------------------------------------------------------------------

 

in the aggregate, reasonably be expected to be material and adverse to the
Company and its Subsidiaries. No insurer under any Insurance Policy has
cancelled or generally disclaimed liability under any Insurance Policy or
indicated any intent to do so or not to renew any such Insurance Policy.
     Section 4.17 No Brokers. Neither the Company nor any of its Subsidiaries or
Affiliates has entered into any contract, arrangement or understanding with any
Person or firm that may result in the obligation of such entity or Buyer or
MergerCo to pay any finder’s fees, brokerage or agent’s commissions or other
like payments in connection with the negotiations leading to this Agreement or
consummation of the Merger, except that the Company has retained and will owe
fees to Evercore Partners Inc. as its financial advisor in connection with the
Merger.
     Section 4.18 Compliance with Laws. Except as set forth in Schedule 4.18,
the businesses of the Company and each of its Subsidiaries have been, and are
currently being, conducted in compliance with all federal, state, local and
foreign Laws, statutes or ordinances, the common law and all rules, regulations,
standards, judgments, orders, writs, injunctions, decrees, arbitration awards,
agency requirements, licenses and permits of any Governmental Body
(collectively, “Laws”), except for such violations as would not, individually or
in the aggregate, reasonably be expected to result in a Loss that would exceed
$1,000,000 or otherwise reasonably be expected to result in a Company Material
Adverse Effect. Except as set forth in Schedule 4.18, no investigation or review
by any Governmental Body with respect to the Company or any of its Subsidiaries
is pending or, to the Knowledge of the Company, threatened, nor has any
Governmental Body indicated in writing an intention to conduct the same. Except
as set forth in Schedule 4.18, the Company has not received any written notice
or written communication of any material noncompliance with any such Laws that
has not been cured as of the date of this Agreement.
     Section 4.19 Government Regulation.
          (a) All licenses, registrations, qualifications, memberships, permits,
approvals and other authorizations from a Governmental Body held by the Company
and its Subsidiaries are listed in Schedule 4.19(a) (collectively, the
“Governmental Permits”). Except as would not, individually or in the aggregate,
reasonably be expected to result in a Loss that would exceed $1,000,000 or
otherwise reasonably be expected to result in a Company Material Adverse Effect,
the Governmental Permits constitute all the licenses, registrations,
certifications, qualifications, memberships, permits, consents, approvals,
exemptions, orders and other authorizations from or issued by a Governmental
Body required by the Company and its Subsidiaries to conduct their businesses in
the three years before the date of this Agreement.
          (b) Except as set forth on Schedule 4.19(b) and as would not,
individually or in the aggregate, reasonably be expected to result in a Loss
that would exceed $1,000,000 or otherwise reasonably be expected to result in a
Company Material Adverse Effect:
     (i) the Company and its Subsidiaries have timely filed (and, where
applicable, obtained approval of) all registrations, qualifications,
memberships, applications, reports and permit declarations required to be filed
by it with any Governmental Body, and all amendments or supplements to any of
the foregoing;

43

--------------------------------------------------------------------------------

 

     (ii) the Company and its Subsidiaries are not subject to any restrictions
or limitations imposed by any Governmental Body which are continuing and which
materially limit such entities’ ability to conduct their businesses, and there
are no circumstances which will cause any of the Governmental Permits to be
suspended, varied, limited, revoked or not renewed, or otherwise materially
affected, in whole or in part;
     (iii) in the three years before the date of this Agreement the business of
each Authorized Group Company (as defined in Section 7.4(b)(ii)) has been
conducted in all respects in compliance with the requirements of FSMA and the
regulatory system (as that expression is defined for the purposes of the FSA’s
Handbook of Rules and Guidance) (together, “Regulatory Requirements”);
     (iv) the current employees of the Company and its Subsidiaries have, and
the former employees, while employed by the Company and its Subsidiaries, had,
at all requisite times while employed by the Company or any Subsidiary held all
necessary regulatory, licenses, approvals and authorizations required to enable
them to carry out their respective functions within each Authorized Group
Company;
     (v) in the three years before the date of this Agreement, each Authorized
Group Company has complied with its own compliance policies and procedures, as
disclosed to Buyer;
     (vi) in the three years before the date of this Agreement, each Authorized
Group Company has ensured that all of its promotional and advertising material
complies with Regulatory Requirements;
     (vii) to the Knowledge of the Company, no investigation or enquiry is being
or has been conducted or is being contemplated by any Governmental Body with
respect to an Authorized Group Company;
     (viii) no regulatory or disciplinary proceedings or actions have been
brought and no fine or other penalty has been imposed by any Governmental Body,
whether against any Authorized Group Company, or, to the Knowledge of the
Company, a director, officer or any employee or former employee of any
Authorized Group Company;
     (ix) in the three years before the date of this Agreement, no court orders
or warrants under the United Kingdom Proceeds of Crime Act 2002, the United
Kingdom Terrorism Act 2000 or any analogous legislation or regulatory
requirement in any jurisdiction have been made in relation to any material or
information held by any Authorized Group Company;
     (x) there are valid client agreements in place between each Authorized
Group Company and its clients to the extent required by the Regulatory
Requirements;

44

--------------------------------------------------------------------------------

 

     (xi) each Authorized Group Company complies with its obligations under
Rule 2.3 of the FSA’s new Conduct of Business sourcebook in relation to the
payment and acceptance of fees, commissions and non-monetary benefits; and
     (xii) the complaints register relating to the business of each Authorized
Group Company has been maintained in accordance with Regulatory Requirements, is
up-to-date and accurate, and there are, to the Knowledge of the Company, no
material regulatory complaints or allegations concerning any Authorized Group
Company currently in existence.
          (c) Except as disclosed on SEC Form BD of any Subsidiary of the
Company filed prior to the date of this Agreement, copies of which have been
made available to Buyer, neither the Company nor any Subsidiary has been the
subject of any disciplinary proceedings or orders of any Governmental Body
arising under applicable Laws which would be required to be disclosed on such
Form BD. No such disciplinary proceeding or order is pending or, to the
Knowledge of the Company, threatened. Except as disclosed on such Form BD filed
prior to the date of this Agreement, neither the Company nor any Subsidiary has
been permanently enjoined by the order of any Governmental Body from engaging or
continuing any conduct or practice in connection with any activity or in
connection with the purchase or sale of any security.
          (d) Each Authorized Group Company materially meets the current
requirements of the FSA in relation to its Treating Customers Fairly initiative
(TCF), and has taken appropriate steps to ensure that it will meet the future
requirements of the FSA in relation to TCF as published by the FSA prior to the
date of this Agreement.
          (e) All material correspondence between each Authorized Group Company
and the FSA for the last three years has been disclosed.
          (f) All binding recommendations (if any) suggested by a Governmental
Body to which each Authorized Group Company is subject have been materially
implemented to the satisfaction of the relevant Governmental Body.
          (g) All fines and levies (if any) imposed on each Authorized Group
Company by any Governmental Body have been paid.
          (h) Each Authorized Group Company has sufficient regulatory capital to
meet the capital adequacy requirements of the FSA as at the date of this
Agreement and will have sufficient regulatory capital to meet such requirements
at all times up to 31 December 2008.
          (i) Without limiting any other provisions of this Section 4.19, except
as disclosed on Schedule 4.19(i), the Company and its Subsidiaries are not
required to be registered with the SEC as a broker-dealer or a national
securities exchange, or with the Commodity Futures Trading Commission (“CFTC”)
as a designated contract market and are not subject to the provisions of the
Commodity Exchange Act and CFTC regulations governing exempt commercial markets.

45

--------------------------------------------------------------------------------

 

     Section 4.20 Books and Records. Except as set forth on Schedule 4.20, the
books of account and other financial records of the Company and its Subsidiaries
are complete and correct in all material respects, represent actual, bona fide
transactions, as applicable, and have been maintained in accordance with sound
business practices and all applicable requirements of Law. The minute books of
the Company and its Subsidiaries contain accurate and complete records of all
meetings held, and all corporate actions taken by, the Stockholders, the Board
of Directors and committees of the Board of Directors of the Company and each of
its Subsidiaries, and no meeting of any Stockholders, Board of Directors or
committee has been held for which minutes have not been prepared or are not
contained in such minute books.
     Section 4.21 Related Party Transactions. Except for employment arrangements
(including employee benefit plan matters) conducted in the ordinary course of
business or as set forth on Schedule 4.21(a), neither the Company nor any of its
Subsidiaries is party to any contract, lease or commitment with any Stockholder,
director, officer or employee of the Company or any of its Subsidiaries or, to
the Knowledge of the Company, any member of the immediate family, grandparents,
grandchildren or first cousins of such stockholder, director, officer or
employee. Contracts, leases or commitments set forth on Schedule 4.21(a) comply
with all Laws applicable to the relevant related party transaction. Except for
this Agreement and any liability arising under this Agreement and except for
employment arrangements (including employee benefit plans) in effect as of the
date of this Agreement or entered into or established after the date of this
Agreement in compliance with Article VI, from and after the Closing, neither the
Company nor any of its Subsidiaries shall be bound by any Contract or any other
arrangement of any kind whatsoever with, or have any liability to, any of the
Stockholders. Except as set forth on Schedule 4.21(b), all Contracts concluded
between the Company and its Subsidiaries or between any of its Subsidiaries were
made at arms’ length.
     Section 4.22 Foreign Assets Control. Neither the Company nor any of its
Subsidiaries does business with, sponsors, or provides assistance or support to,
the government of, or any person located in, any country, or with any other
person, targeted by any of the economic sanctions of the United States
administered by the United States Treasury Department’s Office of Foreign Assets
Control (“OFAC”); the Company is not owned or controlled (within the meaning of
the regulations promulgating such sanctions or the Laws authorizing such
promulgation) by, any such government or person.
     Section 4.23 AML Standards. The Company has made available to Buyer copies
of the policies and procedures used by the Company and its Subsidiaries for
verification of the identity of new and existing customers of the Company and
its Subsidiaries and compliance with Title III of the United and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 and similar Laws. The Company and its Subsidiaries have
each been and are in compliance in all material respects with all such Laws and
all “know your client” Laws applicable to the Company or any of its Subsidiaries
or to their respective employees in any jurisdiction. Set forth on Schedule 4.23
is a description of the policies and procedures of the Company and its
Subsidiaries with respect to such Laws.

46

--------------------------------------------------------------------------------

 

     Section 4.24 No Other Representations and Warranties; Knowledge.
          (a) NONE OF THE COMPANY, ANY OF ITS SUBSIDIARIES OR ANY OR ITS
REPRESENTATIVES, DIRECTORS, OFFICERS, OPTIONHOLDERS OR STOCKHOLDERS, HAS MADE
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER
RELATING TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR THE BUSINESS OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES OR REPRESENTATIVES OR OTHERWISE IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THOSE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV (INCLUDING THE ACCOMPANYING
SCHEDULES) OR AS PROVIDED PURSUANT TO ARTICLE VIII.
          (b) Without limiting the generality of the foregoing, neither the
Company, nor any representative of the Company, nor any of its employees,
officers, directors, Optionholders or Stockholders, has made, and shall not be
deemed to have made, any representations or warranties in the materials relating
to the business of the Company and its Subsidiaries made available to Buyer and
MergerCo, including due diligence materials, or in any presentation of the
business of the Company and its Subsidiaries by management of the Company or
others in connection with the transactions contemplated hereby, and no statement
contained in any of such materials or made in any such presentation shall be
deemed a representation or warranty hereunder or otherwise or deemed to be
relied upon by Buyer or MergerCo in executing, delivering and performing this
Agreement and the transactions contemplated hereby. It is understood that any
cost estimates, projections or other predictions, any data, any financial
information or any memoranda or offering materials or presentations, including
but not limited to, any offering memorandum or similar materials made available
by the Company and its representatives are not and shall not be deemed to be or
to include representations or warranties of the Company, and are not and shall
not be deemed to be relied upon by Buyer or MergerCo in executing, delivering
and performing this Agreement and the transactions contemplated hereby.
          (c) Whenever a representation or warranty made by the Company herein
refers to the “Knowledge of the Company”, such knowledge shall be deemed to
consist only of the actual knowledge of the Persons listed in Schedule 4.24(c),
after due inquiry (which due inquiry the Company hereby confirms has been made).
          (d) For the avoidance of doubt, this Section 4.24 shall not apply, or
otherwise be deemed in any manner, to limit any Person from seeking any
available remedy for fraud.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGERCO
     Except as disclosed in any form, statement, certification, report or
document filed or furnished by Buyer with the SEC under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) or the Securities Act
(collectively, the “Buyer Reports”), Buyer and MergerCo

47

--------------------------------------------------------------------------------

 

hereby jointly and severally make to the Company the representations and
warranties contained in this Article V.
     Section 5.1 Existence; Good Standing. Each of Buyer and MergerCo is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. Each of Buyer and MergerCo has all requisite
corporate power and authority to own, operate, lease and encumber its properties
and assets and carry on its respective business as currently conducted. Each of
Buyer and MergerCo is duly licensed or qualified to do business as a foreign
corporation under the Laws of each jurisdiction in which the character of its
properties or assets or in which the transaction of its business makes such
qualification necessary, except where the failure to be so licensed or
qualified, individually or in the aggregate, has not had and would not
reasonably be expected to result in a Buyer Material Adverse Effect. For the
purposes hereof, “Buyer Material Adverse Effect” means a material adverse effect
on the business, financial condition, assets, properties, liabilities or results
of operations of Buyer and its Subsidiaries, taken as a whole; provided,
however, that none of the following shall constitute, or will be considered in
determining whether there has occurred, a Buyer Material Adverse Effect: (i) any
change, effect or circumstance that Buyer establishes through specific evidence
was the proximate result of any action or omission of a party required under
this Agreement or the pendency or announcement of the transactions contemplated
by this Agreement; (ii) any effect arising from or relating to any change in
GAAP or any change in applicable Laws unrelated to the Merger, or the
interpretation thereof, and of general applicability after the date of this
Agreement; (iii) any failure of Buyer to meet any financial projection or
forecast, other than by reason of a breach or violation of any representation or
warranty of Buyer pursuant to this Agreement; and (iv) any change or development
in economic, political, business or commodities trading market conditions
generally (whether as a result of acts of terrorism, war (whether or not
declared), armed conflicts or otherwise); provided, however, that (ii) and
(iv) above shall operate only to the extent that such effect, change or
development does not affect Buyer and its Subsidiaries, taken as a whole, in a
disproportionate manner.
     Section 5.2 Formation and Ownership of MergerCo; No Prior Activities.
     (i) MergerCo was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. All of the issued and outstanding
capital stock of MergerCo is validly issued, fully paid and non-assessable and
owned, beneficially and of record, by Buyer free and clear of all claims,
stockholder agreements, limitations on Buyer’s voting rights, and Encumbrances
of any nature whatsoever.
     (ii) As of the date hereof and as of the Effective Time, except for (A)
liabilities incurred in connection with its incorporation and organization, and
(B) this Agreement and any other agreements or arrangements contemplated by this
Agreement or in furtherance of the transactions contemplated pursuant to this
Agreement, MergerCo has not incurred, directly or indirectly, through any of its
Subsidiaries, any liabilities or engaged in any business activities of any type
or kind whatsoever.

48

--------------------------------------------------------------------------------

 

     Section 5.3 Capitalization. As of the date of this Agreement, the
authorized capital stock of Buyer consists of (i) 194,275,000 shares of Common
Stock, of which, as of March 31, 2008, 71,464,750 shares were issued and
70,504,211 shares were outstanding (960,539 shares being held as treasury
stock), and (ii) 25,000,000 shares of Preferred Stock of which zero shares, as
of March 31, 2008, were issued and outstanding.
     Section 5.4 Authority; Validity of Agreement; Necessary Action. Each of
Buyer and MergerCo has all requisite corporate power and authority and has taken
all corporate action necessary in order to execute and deliver this Agreement
and to perform its respective obligations hereunder and the consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Buyer and MergerCo and, assuming the due authorization,
execution and delivery of this Agreement by the Company, constitutes a legal,
valid and binding obligation of each of Buyer and MergerCo, as the case may be,
enforceable against each of them in accordance with its terms.
     Section 5.5 No Conflicts. The execution, delivery and performance by each
of Buyer and MergerCo of this Agreement, and the consummation by each of Buyer
and MergerCo of the transactions contemplated hereby in accordance with the
terms hereof, will not, (i) violate, conflict with or result in a default
(whether after the giving of notice, lapse of time or both) under, give rise to
a right of termination of or acceleration of any obligations under or the
creation of an Encumbrance on any of the assets of Buyer or any of its
Subsidiaries pursuant to any Contract to which Buyer or any of its Subsidiaries
is a party or by which Buyer or any of its Subsidiaries’ assets are bound,
(ii) conflict with, or result in, any violation of any provision of the
Certificate of Incorporation or By-laws of Buyer or the comparable
organizational documents of any of Buyer’s Subsidiaries; or (iii) violate or
result in a violation of, or constitute a default (whether after the giving of
notice, lapse of time or both) under, any provision of any Law, or any order of,
or any restriction imposed by, any court or other Governmental Body applicable
to Buyer or any of its Subsidiaries, except, in the case of clauses (i) and
(iii) of this Section 5.5, for any such conflicts, defaults, violations,
terminations and any waivers if not obtained that would not, individually or in
the aggregate, reasonably be expected to result in a Buyer Material Adverse
Effect.
     Section 5.6 Governmental Approvals and Consents. No notice or report to,
declaration or filing with, or consent or approval of any Governmental Body is
required by or with respect to Buyer or any of its Subsidiaries in connection
with the execution and delivery by Buyer and MergerCo of this Agreement, and the
performance by Buyer or any of its Subsidiaries of any of its obligations under,
and the consummation by Buyer or any of its Subsidiaries of the transactions
contemplated by, this Agreement in accordance with the terms hereof, except for:
(A) the filing of a pre-merger notification and report form by Buyer and
MergerCo under the HSR Act, and the expiration or termination of the applicable
waiting period thereunder; (B) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, and (C) such filings and notices as
may be required of Buyer or its Subsidiaries under the Exchange Act or the
Securities Act.
     Section 5.7 Buyer Reports; Financial Statements. Buyer has since
December 31, 2007 filed or furnished, as applicable, on a timely basis all Buyer
Reports required by Law. Each of

49

--------------------------------------------------------------------------------

 

such Buyer Reports filed or furnished since December 31, 2007, at the time of
its filing or being furnished complied in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and the
Sarbanes-Oxley Act of 2002 (as amended, the “Sarbanes-Oxley Act”), and any rules
and regulations promulgated thereunder applicable to such Buyer Reports. As of
their respective dates (or, if amended prior to the date hereof, as of the date
of such amendment) such Buyer Reports did not, and any Buyer Reports filed or
furnished with the SEC subsequent to the date hereof will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. Each of the
consolidated balance sheets included in the financial statements included in
such Buyer Reports (including the related notes and schedules) fairly presents
the consolidated financial position of Buyer and its Subsidiaries as of its date
and each of the consolidated statements of income, retained earnings, and cash
flows and of changes in financial position included in the financial statements
included in Buyer Reports (including any related notes and schedules) fairly
presents the results of operations, retained earnings, members’ equity, cash
flows and changes in financial position, as the case may be, of Buyer and its
Subsidiaries for the periods set forth therein, in each case in conformity with
GAAP consistently applied during the periods involved, except as may be
indicated in such statements or in the notes thereto or, in the case of
unaudited financial statements, as permitted by the regulations and rules
promulgated under the Exchange Act. Except for liabilities and obligations
incurred in the ordinary course of business since December 31, 2007, neither
Buyer nor any of its Subsidiaries has any liabilities or obligations of any
nature which, individually or in the aggregate, could reasonably be expected to
have a Buyer Material Adverse Effect.
     Section 5.8 Absence of Certain Changes. Since December 31, 2007, Buyer and
its Subsidiaries have operated their business only in the ordinary course of
business consistent with past practices, and without limiting the foregoing,
there has not been any change, event or effect that, individually or in the
aggregate, would reasonably be expected to result in a Buyer Material Adverse
Effect.
     Section 5.9 Compliance. The businesses of each of Buyer and its
Subsidiaries have been, and are being, conducted in compliance in all material
respects with all Laws. Without limiting the foregoing, Buyer is in compliance
in all material respects with the applicable listing and corporate governance
rules and regulations of the New York Stock Exchange.
     Section 5.10 Brokers. Neither Buyer nor any of its Subsidiaries or
Affiliates has entered into any contract, arrangement or understanding with any
Person or firm that may result in the obligation of such entity or the Company
to pay any finder’s fees, brokerage or agent’s commissions or other like
payments in connection with the negotiations leading to this Agreement or
consummation of the Merger, except that Buyer has retained Morgan Stanley & Co.
Incorporated to deliver a fairness opinion to Buyer’s Board of Directors and
will owe fees to Morgan Stanley & Co. Incorporated for delivering that fairness
opinion.
     Section 5.11 Litigation. There is no litigation, action, suit, claim,
arbitration, investigation or other proceeding pending or, to the knowledge of
Buyer or MergerCo, threatened, against Buyer or any of its Subsidiaries, that,
individually or in the aggregate, has had

50

--------------------------------------------------------------------------------

 

or would reasonably be expected to have a Buyer Material Adverse Effect, and
neither Buyer nor any of its Subsidiaries is a party to or subject to any
provision of any outstanding writ, order, judgment, injunction, decree or award
of any Governmental Body that, individually or in the aggregate, would
reasonably be expected to result in a Buyer Material Adverse Effect.
     Section 5.12 Inspection. Buyer is an informed and sophisticated Person, and
has engaged expert advisors experienced in the evaluation and acquisition of
companies such as the Company and its Subsidiaries as contemplated hereunder.
Buyer has undertaken such investigation and has been provided with and has
evaluated such documents and information as it has deemed necessary to enable it
to make an informed and intelligent decision with respect to the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. Buyer acknowledges that (a) the Company does not make any representation
or warranty with respect to (i) any projections, estimates or budgets delivered
to or made available to Buyer or MergerCo of future revenues, future results of
operations (or any component thereof), future cash flows or future financial
condition (or any component thereof) of the Company and its Subsidiaries or the
future business and operations of the Company and its Subsidiaries or (ii) any
other information or documents made available to Buyer or MergerCo or their
counsel, accountants or advisors with respect to the Company, its Subsidiaries
or any of their respective businesses, assets, liabilities or operations, except
as expressly set forth in Article IV of this Agreement (including the
accompanying Schedules) or made pursuant to Article VIII of this Agreement, and
(b) neither Buyer nor MergerCo has relied or will rely upon any of the
information described in subclauses (i) and (ii) of clause (a) above or any
other information, representation or warranty except those representations or
warranties set forth in Article IV of this Agreement or made pursuant to Article
VIII of this Agreement in negotiating, discussing, executing, delivering and
performing this Agreement and the transactions contemplated hereby.
     Section 5.13 No other Representations and Warranties; Knowledge.
          (a) NONE OF BUYER OR ANY OF ITS SUBSIDIARIES (INCLUDING MERGERCO) OR
ANY OF ITS REPRESENTATIVES, DIRECTORS, OFFICERS OR STOCKHOLDERS, HAS MADE ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER
RELATING TO BUYER OR ANY OF ITS SUBSIDIARIES (INCLUDING MERGERCO) OR THE
BUSINESS OF BUYER OR ANY OF ITS SUBSIDIARIES (INCLUDING MERGERCO) OR
REPRESENTATIVES OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN
THIS ARTICLE V OR AS PROVIDED PURSUANT TO ARTICLE VIII.
          (b) Without limiting the generality of the foregoing, neither Buyer,
nor MergerCo, nor any representative of Buyer or MergerCo, nor any of their
respective employees, officers, directors or stockholders, has made, and shall
not be deemed to have made, any representations or warranties in any materials
relating to the business of Buyer and its Subsidiaries (including MergerCo) and
stockholders made available to the Company and its Subsidiaries and
Stockholders, including due diligence materials, or in any presentation of the
business of Buyer and its Subsidiaries (including MergerCo) by management of
Buyer, MergerCo or others in connection with the transactions contemplated
hereby, and no statement

51

--------------------------------------------------------------------------------

 

contained in any of such materials or made in any such presentation shall be
deemed a representation or warranty hereunder or otherwise or deemed to be
relied upon by Company or the Stockholders in executing, delivering and
performing this Agreement and the transactions contemplated hereby. It is
understood that any cost estimates, projections or other predictions, any data,
any financial information or any memoranda or offering materials or
presentations, including but not limited to, any offering memorandum or similar
materials made available by Buyer, MergerCo and their representatives are not
and shall not be deemed to be or to include representations or warranties of
Buyer or MergerCo, and are not and shall not be deemed to be relied upon by
Company in executing, delivering and performing this Agreement and the
transactions contemplated hereby.
          (c) For the avoidance of doubt, this Section 5.13 shall not apply, or
otherwise be deemed in any manner, to limit any Person from seeking any
available remedy for fraud.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
     Section 6.1 Conduct of Business Prior to Closing. Except as expressly
permitted in this Section 6.1, set forth in Schedule 6.1 or as consented to in
writing by Buyer, during the period commencing on the date of this Agreement and
ending at the Effective Time or such earlier date as this Agreement may be
terminated in accordance with its terms (the “Pre-Closing Period”), the Company
shall, and shall cause each of its Subsidiaries to, (a) act and carry on its
business in the ordinary course of business consistent with past practice and
comply with all applicable Laws, (b) use commercially reasonable efforts to
maintain and preserve its and each of its Subsidiaries’ business organization,
assets and properties and existing relationships and goodwill with customers,
suppliers, creditors, lessor, sub-lessees and employees and (c) use commercially
reasonable efforts to protect, defend and maintain the ownership, validity and
registration of the Company Intellectual Property. Without limiting the
generality of the foregoing, except as expressly permitted herein or as set
forth in Schedule 6.1 and except that the Company may renew or extend its
existing revolving credit facility with JPMorgan Chase Bank N.A. (but may not
borrow under such facility without the prior written consent of Buyer), during
the Pre-Closing Period, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, do any of the following without the
prior written consent of Buyer (which consent shall not be unreasonably
withheld):
          (a) except as set forth in Schedule 6.1(a), split, subdivide, combine,
redeem or reclassify, purchase or otherwise acquire, directly or indirectly, any
of its capital stock or securities convertible or exchangeable into or
exercisable for any shares of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or any of its other securities (it being
understood that the foregoing will not apply to the forfeiture of Company
Restricted Stock or the acquisition of Company Restricted Stock for nominal or
de minimis consideration, in each case in accordance with the terms of the
applicable outstanding Company Restricted Stock agreement as in effect on the
date of this Agreement);

52

--------------------------------------------------------------------------------

 

          (b) except as set forth in Schedule 6.1(b), authorize for issuance,
issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the
issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee
or encumbrance of, any shares of its capital stock or of any its Subsidiaries
(other than the issuance of shares by its wholly-owned Subsidiary to it or
another of its wholly-owned Subsidiaries), or securities convertible or
exchangeable into or exercisable for any shares of such capital stock, or any
options, warrants or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities (other than the
issuance of shares of Common Stock upon the exercise of outstanding Company
Options, in accordance with their terms or upon the conversion of any shares of
Convertible Preferred Stock, in each case, that are outstanding on the date of
this Agreement);
          (c) make any change to the Certificate of Incorporation or By-laws or
the organizational documents of its Subsidiaries, or change the authorized
capital stock or equity interests of the Company or any Subsidiary;
          (d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends paid by any direct or indirect
wholly-owned Subsidiary to it or to any other direct or indirect wholly-owned
Subsidiary) or enter into any agreement with respect to the voting of its
capital stock;
          (e) merge or consolidate itself or any of its Subsidiaries with any
other Person, except for any such transactions among its wholly-owned
Subsidiaries, or restructure, reorganize or completely or partially liquidate;
          (f) except as set forth in Schedule 6.1(f), (i) incur any Indebtedness
for Borrowed Money, or guarantee any indebtedness of another Person, (ii) issue,
sell or amend any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another Person, or enter into any “keep well”
or other agreement to maintain any financial statement condition of another
Person, (iii) make any loans, advances (other than routine travel advances, not
to exceed $10,000, to employees of the Company and its Subsidiaries in the
ordinary course of business consistent with past practice) or capital
contributions to, or investment in, any other Person, other than the Company or
any of its direct or indirect wholly owned Subsidiaries; provided, however, that
the Company may, in the ordinary course of business and consistent with prior
practices, continue to invest in debt securities maturing not more than 365 days
after the date of investment, or (iv) mortgage, pledge or otherwise encumber any
assets, or create or suffer any material lien thereupon, except, in each case,
in the ordinary course of business and consistent with prior practices pursuant
to credit facilities in existence on the date hereof (or any extensions,
renewals or refinancings thereof);
          (g) (i) prepay any loans (if any) from its Stockholders, officers or
directors or any Person affiliated with any of the foregoing, or (ii) make any
change in its borrowing arrangements, or (iii) knowingly waive, release or
assign any rights or claims (including any write-off or other compromise of any
accounts receivable of the Company or any of its Subsidiaries), other than any
such immaterial waiver, release, assignment, write-off or compromise made in the
ordinary course of business consistent with past practice; provided,

53

--------------------------------------------------------------------------------

 

however, that, for the avoidance of doubt, the Company shall not be prohibited
from paying any Indebtedness for Borrowed Money or any expenses in connection
with the Merger and related transactions;
          (h) make any changes with respect to accounting policies or
procedures, except as required by changes in Law or by GAAP;
          (i) except as required pursuant to existing written, binding
agreements in effect prior to the date of this Agreement and set forth in
Schedule 6.1(i) or as otherwise required by applicable Law:
     (i) increase the rates of direct compensation or bonus compensation,
severance benefits, welfare benefits or any other benefits payable or to become
payable to any officer, management level employee, agent or consultant of the
Company or any Subsidiary;
     (ii) establish, adopt, amend or terminate any Benefit Plans (including but
not limited to any change in the character of any 401(k) plan from
single-employer to multiple-employer status) or amend the terms of any
outstanding equity-based awards grant or provide any severance or termination
payments or benefits to any director, officer or employee of the Company or any
of its Subsidiaries;
     (iii) forgive any loans to directors, officers or employees of the Company
or any of its Subsidiaries; and
     (iv) change any actuarial or other assumptions used to calculate funding
obligations with respect to any Benefit Plan or to change the manner in which
contributions to such plans are made or the basis on which such contributions
are determined, except as may be required by GAAP.
          (j) acquire assets other than in the ordinary course of business
consistent with past practice or as set forth in the 2008 annual forecast of the
Company that has been provided to Buyer (the “Annual Budget”) and consistent
therewith from any Person in any transaction or series of transactions;
          (k) except as set forth in the Annual Budget and consistent therewith,
make or authorize any capital expenditure in excess of $100,000 individually or
$1,000,000 in the aggregate;
          (l) transfer, sell, lease, license, mortgage, pledge, surrender,
encumber, divest, cancel, abandon or allow to lapse or expire (except in
accordance with the current terms of any agreement of the Company or any of its
Subsidiaries that is currently in effect) or otherwise dispose of any material
properties or material assets of the Company or its Subsidiaries (including
product lines or businesses and capital stock of any of its Subsidiaries),
except (i) in connection with services provided in the ordinary course of
business consistent with past practice

54

--------------------------------------------------------------------------------

 

or (ii) pursuant to Contracts in effect prior to the date of this Agreement, and
other than the sale of the assets listed on Schedule 6.1(l) ;
          (m) except for Company Transaction Expenses and contractual
obligations in effect on the date of this Agreement and disclosed in
Schedule 6.1 that the Company and its Subsidiaries are required to perform or
discharge, expend, disburse or advance any cash or cash equivalents outside the
ordinary course of business consistent with past practice;
          (n) except in the ordinary course of business consistent with past
practice or as expressly provided in this Agreement, materially amend or
terminate any Material Contract to which the Company or any of its Subsidiaries
is party;
          (o) except as set forth in Schedule 6.1(o) and other than in the
ordinary course of business consistent with past practice, enter into any
Contract that would have been a Material Contract had it been entered into prior
to this Agreement;
          (p) make or change any Tax election, change any annual Tax reporting
period, adopt or change any Tax accounting method, file any amended Tax Return,
enter into any closing agreement, settle any Tax claim or assessment relating to
the Company or any of its Subsidiaries, surrender any right to claim a refund of
Taxes, consent to any extension or waiver of the limitation period applicable to
any Tax claim or assessment, or take any other similar action related to the
filing of any Tax Return or the payment of any Tax, if such election, adoption,
change, amendment, agreement, settlement, surrender, consent or other action
would have the effect of increasing the Tax liability of the Company or any of
its Subsidiaries for any Tax period ending after the Closing Date or decreasing
any Tax attribute of the Company or any of its Subsidiaries existing on the
Closing Date;
          (q) except as set forth in Schedule 6.1(q), settle or compromise any
litigation, investigations or other disputes (whether or not commenced prior to
the date of this Agreement) other than settlements or compromises for litigation
or other disputes where the amount paid in settlement or compromise does not
exceed $100,000 individually or $1,000,000 in the aggregate, for all such
litigation or other disputes;
          (r) take any action that could reasonably be foreseen to result in any
of the conditions to the Merger set forth in Article VIII not being satisfied;
          (s) except as set forth in Schedule 6.1(s), dispose of or permit to
lapse any ownership and/or right to the use of any patent, trademark, trade
name, service mark, or copyright owned by the Company or its Subsidiaries
(including any of the Company Intellectual Property owned by the Company or its
Subsidiaries), or dispose of or disclose to any Person, any Confidential
Information (except, for the avoidance of doubt, expiration of patents at the
end of their full statutory term), except in accordance with the terms of an
agreement in effect on the date hereof;
          (t) allow any of the Registered Intellectual Property to be abandoned,
forfeited, cancelled, expunged and/or dedicated to the public (except, for the
avoidance of doubt, expiration of patents at the end of their full statutory
term);

55

--------------------------------------------------------------------------------

 

          (u) amend, modify or supplement the Annual Budget; or
          (v) enter into any executory agreement, commitment or undertaking
(whether in writing or orally) to do any of the activities prohibited by the
foregoing provisions.
     Section 6.2 Communications. Notwithstanding the foregoing, prior to making
any written or material broad-based oral communications to the directors,
officers or employees of the Company or any of its Subsidiaries pertaining to
compensation or benefit matters that are affected by the transactions
contemplated by this Agreement, the Company shall provide Buyer with a copy of
the intended communication, Buyer shall have a reasonable period of time to
review and comment on the communication, and Buyer and the Company shall
cooperate in providing any such mutually agreeable communication.
ARTICLE VII
ADDITIONAL AGREEMENTS
     Section 7.1 Stockholders Consent.
          (a) The Company shall use its reasonable best efforts to promptly
obtain and deliver to Buyer a true, correct and complete copy of the irrevocable
and unconditional Stockholder Written Consent, executed and delivered by the
Stockholders named on Exhibit A hereto, evidencing the adoption of this
Agreement and the approval of the Merger, including (i) the deposit of the
Escrow Shares and Escrow Cash into the Escrow Funds, (ii) the right of the Buyer
Indemnified Parties, subject to the terms and conditions of this Agreement and
the Escrow Agreement, to set off the amount of any Losses with respect to which
the Indemnified Parties are entitled to indemnification against the Escrow Funds
in accordance with and subject to the limitations set forth herein, and
(iii) the appointment of the Stockholders’ Representative as the agent and
attorney-in-fact for the Stockholders, having the powers and rights to limited
liability and indemnification set forth herein.
          (b) In accordance with this Agreement, the DGCL, and the Certificate
of Incorporation, the Company shall use its commercially reasonable efforts to
obtain a written consent in the same form as the irrevocable and unconditional
Stockholder Written Consent from all of its other Stockholders who are not
signatories to the Stockholder Written Consent. In furtherance thereof, the
Company shall promptly, but in no event later than ten (10) Business Days after
the date hereof, deliver to its Stockholders a form of written consent together
with notice and a description of the adoption of this Agreement and approval of
the Merger and the other matters approved in the Stockholder Written Consent.
The document containing such information (the “Information Statement”) shall be
prepared by the Company, shall, subject to Section 7.1(c), include the Board
Recommendation (defined in Section 7.1(c)) and the notice required by
Section 228 of the DGCL, and shall be reasonably satisfactory to Buyer. The
Information Statement shall not, as of the date of mailing, contain any untrue
statement of a material fact, or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading. The Company shall also

56

--------------------------------------------------------------------------------

 

deliver such notices and take such other actions as are required prior to the
Closing to comply with the provisions of Section 262 of the DGCL, and if the
Merger is approved pursuant to Section 228 of the DGCL shall promptly give any
notice required of it under Section 262(d)(2), such that any Stockholder
entitled under the Appraisal Rights Provisions to demand appraisal for its
shares of Company Stock must do so on or before the Demand Date in order to
perfect its statutory rights to such appraisal.
          (c) The Board of Directors of the Company shall not withdraw, alter,
modify, change or revoke (i) its recommendation to the Stockholders to vote in
favor of adoption and approval of this Agreement (the “Board Recommendation”)
nor (ii) its approval of this Agreement, the Merger and the other transactions
contemplated by this Agreement.
          (d) Promptly, but in any event within one (1) Business Day following
execution of this Agreement by the parties hereto, MergerCo shall deliver to the
Company a true, correct and complete copy of an action by written consent,
executed and delivered by Buyer evidencing the adoption of this Agreement and
the approval of the Merger.
     Section 7.2 Access to Information.
          (a) Without unreasonable disruption of its or its Subsidiaries’
businesses, and subject to Section 7.2(b) below, between the date of this
Agreement and the Closing Date, the Company shall, and shall cause each of its
Subsidiaries and each of the Company’s and its Subsidiaries’ officers, employees
and agents to, give Buyer and MergerCo and their representatives reasonable
access upon reasonable notice and during times mutually convenient to Buyer and
MergerCo and senior management of the Company and its Subsidiaries to the
facilities, properties, employees, books and records of the Company and its
Subsidiaries as from time to time may be reasonably requested.
          (b) Buyer and MergerCo shall use commercially reasonable efforts so
that any such investigation does not unreasonably interfere with any of the
businesses or operations of the Company or its Subsidiaries. All requests by
Buyer or MergerCo for access or information shall be submitted or directed
exclusively to an individual or individuals to be designated by the Company. In
the event that Buyer desires to contact any partner, lender, lessor, vendor,
customer, supplier, employee or consultant of the Company or any of its
Subsidiaries with respect to the Company or its Subsidiaries or with respect to
the transactions contemplated by this Agreement, Buyer shall first inform the
Company of such fact and the Company shall cooperate reasonably with Buyer to
facilitate such contact and, if requested by the Company, to contact any of the
foregoing jointly with Buyer.
          (c) The Company will prepare and furnish to Buyer as soon as they
become available, and in any event, not later than thirty (30) days after the
end of each month (commencing with the month ended April 30, 2008; provided that
the Company shall have until June 10 to deliver the statements for the month
ended April 30, 2008) an unaudited consolidated balance sheet and unaudited
unconsolidated statements of income and cash flows for the Company and its
Subsidiaries for each such full monthly period prior to the Closing. The Company
will prepare each of the foregoing financial statements on a basis consistent
with the Estimated Reference Date Balance Sheet.

57

--------------------------------------------------------------------------------

 

     Section 7.3 Confidentiality. The parties shall adhere to the terms and
conditions of that certain confidentiality and non-disclosure agreement, by and
between the Company and Buyer, dated November 6, 2007 (the “Confidentiality
Agreement”).
     Section 7.4 Regulatory and Other Authorizations; Consents.
          (a) Prior to the Closing Date, the Company and its Subsidiaries, as
necessary, shall use commercially reasonable efforts to obtain the consent or
approval (or waiver thereof) of any Person that is necessary for the execution
and delivery, and the performance of their obligations pursuant to this
Agreement, subject to the other provisions of this Section 7.4; provided,
however, that neither the Company nor any Subsidiary shall have any obligation
to offer or pay any consideration in order to obtain any such consents or
approvals, other than filing fees and similar payments it may be required to
make and the fees and expenses of advisors and agents it engages in connection
with obtaining such consents or approvals. During the period prior to the
Closing Date, Buyer shall use commercially reasonably efforts to cooperate with
the Company and its Subsidiaries in attempting to obtain the consents, approvals
and waivers contemplated by this Section 7.4(a).
          (b) The parties hereto shall use commercially reasonable efforts, and
shall cooperate with each other, in attempting to obtain any consents and
approvals (or waivers thereof) of any Governmental Body required to permit the
consummation of the transactions contemplated by this Agreement. Buyer and the
Company (and its Subsidiaries) shall advise each other as to material
developments with respect to the status of receipt of approvals. Without
limitation of the foregoing:
     (i) each party hereto agrees to make an appropriate filing of a Pre-Merger
Notification and Report Form under the HSR Act with respect to the transactions
contemplated by this Agreement within ten (10) Business Days after the date
hereof, and to supply promptly any additional information and documentary
material that may be requested pursuant to the HSR Act. The parties hereto will
not unreasonably take any action that will have the effect of delaying,
impairing or impeding the receipt of any required approvals and shall promptly
respond to any requests for additional information from any Governmental Body or
other third party in respect thereof. Buyer shall pay all filing and related
fees in connection with any such filings that must be made by any of the parties
under the HSR Act. Subject to Section 7.4(c) below, Buyer hereby covenants and
agrees to use its commercially reasonable efforts to secure termination of any
waiting periods under the HSR Act or any other applicable Law and to obtain the
approval of the Federal Trade Commission (the “FTC”), the Antitrust Division of
the United States Department of Justice (the “DOJ”) or any other Governmental
Body, as applicable, for the Merger and the other transactions contemplated
hereby;
     (ii) the Company agrees to make, within thirty (30) days after the date
hereof, all appropriate filings with FINRA pursuant to NASD Rule 1017 in
relation to the change in ownership of Creditex Securities Corp. resulting from
the

58

--------------------------------------------------------------------------------

 

transactions contemplated by this Agreement, and each of the parties hereto
agrees to provide such information as is reasonably necessary to enable the
Company to make such filing and to cooperate with the Company and FINRA to
enable the approval of FINRA to be obtained; and
     (iii) promptly, but in no event later than 15 Business Days after the date
hereof, Buyer and MergerCo agree to make all appropriate filings with the United
Kingdom Financial Services Authority (“FSA”) in relation to the proposed
acquisition of control (as defined for the purposes of Part XII of the United
Kingdom Financial Services and Markets Act 2000 (“FSMA”)) of each of Creditex
Brokerage LLP, T-Zero International Limited and Q-Wixx International Limited
(the “Authorized Group Companies”) with a view to obtaining from the FSA an
indication, in terms satisfactory to Buyer (acting reasonably) that the FSA has
no objection to Buyer, MergerCo and each of their controllers acquiring control
of each of the Authorized Group Companies, or the relevant three month period
for consideration by the FSA having elapsed with no warning notice having been
given under Section 183(3) of FSMA, and each of the parties hereto agrees to
provide such information about the business of the parties and to co-operate
with each other and the FSA, as is reasonably necessary, to prepare and submit
such filings and to obtain any necessary consent from the FSA in relation to the
proposed acquisition of control.
          (c) Notwithstanding anything herein to the contrary, neither the
Company nor any Subsidiary nor Buyer shall be obligated to contest any final
action or decision taken by any Governmental Body challenging the consummation
of the transactions contemplated by this Agreement, and nothing in this
Agreement, including without limitation, this Section 7.4, shall require, or be
construed to require, Buyer or the Company nor any of their Affiliates to
proffer to, or agree to, sell, divest, lease, license, transfer, dispose of or
otherwise encumber or hold separate and agree to sell, divest, lease, license,
transfer, dispose of or otherwise encumber before or after the Effective Time,
any assets, licenses, operations, rights, product lines, businesses or interest
therein of Buyer, the Company or any of their respective Affiliates (or to
consent to any sale, divestiture, lease, license, transfer, disposition or other
encumberment by the Company of any of its assets, licenses, operations, rights,
product lines, businesses or interest therein or to any agreement by the Company
to take any of the foregoing actions) or to agree to any material changes
(including, without limitation, through a licensing arrangement) or restriction
on, or other impairment of Buyer’s ability to own or operate, any such assets,
licenses, product lines, businesses or interests therein or Buyer’s ability to
vote, transfer, receive dividends or otherwise exercise full ownership rights
with respect to the stock of the Surviving Corporation.
     Section 7.5 Press Releases. The initial press release regarding the Merger
shall be a joint press release. Thereafter Buyer and the Company shall use
commercially reasonable efforts to develop a joint communications plan and each
party shall use commercially reasonable efforts to ensure that all press
releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan. In
addition to the foregoing, neither Buyer or its Subsidiary on the one hand or
the Company or its Subsidiary on

59

--------------------------------------------------------------------------------

 

the other hand shall issue any press release or otherwise make any public
statement or disclosure concerning the other party or the other party’s
business, financial condition or results of operations without the consent of
the other party, which consent shall not be unreasonably withheld or delayed,
except for any such release, statement or disclosure that may be required by
applicable Law.
     Section 7.6 No Solicitations.
          (a) The Company will not, and will not permit any of its Subsidiaries
or any of the directors, officers, employees, advisors, representatives or
agents of the Company or any of its Subsidiaries to, (i) discuss, negotiate,
undertake, authorize, recommend, propose or enter into, either as the proposed
surviving, merged, acquiring or acquired corporation, any transaction involving
a merger, consolidation, business combination, purchase or disposition of any
amount of the assets of the Company (other than in the ordinary course of
business) or any of its Subsidiaries or any capital stock of the Company or any
of its Subsidiaries other than the transactions contemplated by this Agreement
(an “Acquisition Transaction”), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers in respect of an
Acquisition Transaction, (iii) furnish or cause to be furnished, to any Person
or entity, any information concerning the business, operations, properties or
assets of the Company or its Subsidiaries in connection with an Acquisition
Transaction, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person or entity to do or seek any of the foregoing.
          (b) The Company shall, and shall cause its Subsidiaries, and their
respective directors, officers, employees, advisors, representatives and agents
to, immediately cease and cause to be terminated any existing discussions or
negotiations with any Persons or entities (other than Buyer and MergerCo)
conducted heretofore with respect to any other Acquisition Transaction.
     Section 7.7 Officers’ and Directors’ Indemnification.
          (a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any Person who is now, or has been at any time prior to
the date hereof, or who becomes prior to the Effective Time, a director,
officer, employee, fiduciary or agent of the Company or any of its Subsidiaries
(the “Specified Indemnified Parties”) is, or is threatened to be, made a party
based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he or she is or was a director, officer,
employee, fiduciary or agent of the Company or any of its Subsidiaries, or is or
was serving at the request of the Company or any of its Subsidiaries as a
director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust or other enterprise or (ii) the negotiation,
execution or performance of this Agreement or any of the transactions
contemplated hereby, whether in any case asserted or arising before or after the
Effective Time, the Company agrees to defend against and respond thereto. It is
understood and agreed that the Company shall indemnify and hold harmless, and
after the Effective Time the Surviving Corporation shall indemnify and hold
harmless, as and to the full extent permitted by applicable

60

--------------------------------------------------------------------------------

 

Law, each Specified Indemnified Party against any losses, claims, damages,
liabilities, costs, expenses (including reasonable attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement in connection with
any such threatened or actual claim, action, suit, demand, proceeding or
investigation, and in the event of any such threatened or actual claim, action,
suit, proceeding or investigation (whether asserted or arising before or after
the Effective Time), (A) the Company, and the Surviving Corporation and Buyer
after the Effective Time, shall promptly pay expenses incurred by each Specified
Indemnified Party as the same are incurred in advance of the final disposition
of any claim, suit, proceeding or investigation to such Specified Indemnified
Party; provided, that the Specified Indemnified Party to whom expenses are
advanced shall first provide an undertaking to repay such advances if it is
ultimately determined that such Specified Indemnified Party is not entitled to
have its expenses paid or to be indemnified in the manner contemplated hereby,
and (B) the Company and the Surviving Corporation will cooperate in a reasonable
manner to assist in the defense of any such matter; provided, however, that none
of the Company, the Surviving Corporation or Buyer shall be liable for any
settlement effected without its prior written consent; and provided further that
the Company, Surviving Corporation and Buyer shall have no obligation hereunder
to any Specified Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final and
non-appealable, that the payment of expenses to or the indemnification of such
Specified Indemnified Party in the manner contemplated hereby is prohibited by
applicable Law. Any Specified Indemnified Party wishing to claim indemnification
under this Section 7.7, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify the Company and, after the Effective
Time, the Surviving Corporation and Buyer thereof; provided, however, that the
failure to so notify shall not affect the obligations of the Company, the
Surviving Corporation and Buyer except to the extent such failure to notify
prejudices such party.
          (b) Buyer and MergerCo agree that all rights to indemnification or
exculpation existing in favor of, and all limitations on the personal liability
of, each present and former director, officer, employee, fiduciary and agent of
the Company and its Subsidiaries provided for in their respective charters or
by-laws or otherwise in effect as of the date hereof shall continue in full
force and effect for a period of six (6) years from the Effective Time;
provided, however, that all rights to indemnification in respect of any claims
(each a “Claim”) asserted or made within such period shall continue until the
disposition of such Claim. Without limiting the general indemnification rights
of the Indemnified Parties under this Section 7.7, from and after the Effective
Time, the Surviving Corporation also agrees to indemnify and hold harmless the
present and former officers and directors of the Company and its Subsidiaries in
respect of acts or omissions occurring prior to the Effective Time to the extent
provided in any written indemnification agreements between the Company and/or
one or more of its Subsidiaries.
          (c) At the Effective Time, the Surviving Corporation shall purchase
(at Buyer’s expense) an extended reporting period endorsement under the
Company’s existing directors’ and officers’ liability insurance coverage (the
“D&O Tail Policy”) for the Company’s and its Subsidiaries’ directors and
officers in a form acceptable to the Company that shall provide such directors
and officers with coverage for six (6) years following the Effective Time of not
less than the existing coverage and have other terms not materially less
favorable to, the insured persons than the directors’ and officers’ liability
insurance coverage presently

61

--------------------------------------------------------------------------------

 

maintained by the Company; provided, however, that the aggregate cost of such
policy shall not exceed $500,000 (the “Premium Limit”), and in the event that
the Premium Limit is insufficient for such coverage, Buyer shall purchase the
maximum amount of coverage that is available for such amount. Buyer shall, and
shall cause the Surviving Corporation to, maintain such policy in full force and
effect, and continue to honor the obligations thereunder.
          (d) The obligations under this Section 7.7 shall not be terminated or
modified in such a manner as to adversely affect any Specified Indemnified Party
to whom this Section 7.7 applies without the consent of such Specified
Indemnified Party (it being expressly agreed that the Specified Indemnified
Parties to whom this Section 7.7 applies shall be third party beneficiaries of
this Section 7.7 and shall be entitled to enforce the covenants contained
herein).
          (e) In the event Buyer or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, and in each such case, to
the extent necessary proper provision shall be made so that the successors and
assigns of Buyer or the Surviving Corporation, as the case may be, assume the
obligations set forth in this Section 7.7.
     Section 7.8 Employee Benefit Arrangements.
          (a) Buyer agrees that, during the period commencing at the Effective
Time and ending on the first anniversary thereof, the employees of the Company
and its Subsidiaries will continue to be provided with pension and welfare
benefits under employee benefit plans that are substantially comparable in the
aggregate than those currently provided by the Company and its Subsidiaries to
such employees or substantially comparable in the aggregate to those provided to
similarly situated employees of Buyer and its Subsidiaries, as elected by Buyer
in its sole discretion. Buyer will cause any employee benefit plans which the
employees of the Company and its Subsidiaries are eligible to participate in to
take into account for purposes of eligibility and vesting thereunder, except for
purposes of qualifying for subsidized early retirement benefits or to the extent
it would result in a duplication of benefits, service by employees of the
Company and its Subsidiaries as if such service were with Buyer, to the same
extent such service was credited under a comparable plan of the Company and its
Subsidiaries and to the extent that such time period is recognized under the
terms of such plan of Buyer.
          (b) Each of Buyer and the Company acknowledges that, for the Benefit
Plans listed on Schedule 7.8(b), the consummation of the transactions
contemplated by this Agreement will constitute a change in control of the
Company. Each of Buyer and the Company further acknowledge that, for the
avoidance of doubt, the consummation of the transactions contemplated by this
Agreement will not constitute a “Transaction Event” for purposes of the T-Zero
Long-Term Incentive Plan and the Q-Wixx Long-Term Incentive Plan.
          (c) Prior to the Effective Time, if requested by Buyer in writing, to
the extent permitted by applicable Law and the terms of the applicable plan or
arrangement, the Company shall (1) cause to be amended the Benefit Plans and
arrangements of it and its Subsidiaries to the extent necessary to provide that
no employees of Buyer and its Subsidiaries shall commence

62

--------------------------------------------------------------------------------

 

participation therein following the Effective Time unless the Surviving
Corporation or such Subsidiary explicitly authorizes such participation and
(2) cause the Company’s 401(k) Plan to be terminated effective immediately prior
to the Effective Time.
          (d) To the same extent that such service was recognized by the Company
for purposes of the Benefit Plans, Buyer shall, and shall cause the Surviving
Corporation to, treat, and cause the applicable benefit plans to treat, the
service of Surviving Corporation employees with the Company or the Subsidiaries
of the Company attributable to any period before the Effective Time as service
rendered to Buyer or the Surviving Corporation for all purposes (except for
purposes of qualifying for subsidized early retirement benefits, for purposes of
benefit accrual under any defined benefit pension plans or to the extent that it
would result in a duplication of benefits), including but not limited to,
eligibility to participate, vesting and applicability of any minimum waiting
periods for participation. Without limiting the foregoing, to the extent
reasonably practicable under the Company’s contracts with its insurance
carrier(s), Buyer shall not, and shall cause the Surviving Corporation not to,
treat any Surviving Corporation employee as a “new” employee for purposes of any
exclusions under any health or similar plan of Buyer or the Surviving
Corporation for a pre-existing medical condition, and any deductibles and
co-pays paid under any of the Company’s or any of its Subsidiaries’ health plans
shall be credited towards deductibles and co-pays under the health plans of
Buyer or the Surviving Corporation to the extent recognized under the analogous
Benefit Plans. Notwithstanding the foregoing, nothing contained herein shall
(1) be treated as an amendment of any particular Benefit Plan, (2) give any
third party any right to enforce the provisions of this Section 7.8, or
(3) obligate Buyer, the Surviving Corporation or any of its Affiliates to
(i) maintain any particular Benefit Plan or (ii) retain the employment of any
particular employee.
     Section 7.9 Tax Matters.
          (a)   (i) Preparation and Filing of Tax Returns. Buyer shall timely
prepare and file, or shall cause to be timely prepared and filed, all Tax
Returns of the Company and its Subsidiaries with respect to any taxable year or
period that ends on or before the Closing Date, and, with respect to any taxable
year or period beginning on or before and ending after the Closing Date (each, a
“Straddle Tax Period”), the portion of such taxable year or period ending on and
including the Closing Date (each, a “Pre-Closing Tax Period”) which are due
after the Closing Date; provided, however, that Buyer shall provide each such
Tax Return to the Stockholders’ Representative for its review and comment at
least twenty (20) Business Days prior to the date on which such Tax Return is to
be filed, and Buyer shall make changes to each such Tax Return as are reasonably
requested by Stockholders’ Representative. Buyer shall cause any amounts shown
to be due on such Tax Returns to be timely remitted to the applicable Taxing
Authority. If any portion of the Taxes due with respect to such Tax Return is
allocable to a Pre-Closing Tax Period, then to the extent the applicable Tax
liability has not already been taken into account in the calculation of
Stockholders Equity through an accrual or reserve, the Buyer shall be
indemnified against such Pre-Closing Tax Period Tax liabilities pursuant to
Article IX herein.
               (ii) Apportionment of Tax Liabilities. All Taxes imposed on and
Tax liabilities with respect to the income, property or operations of the
Company or its Subsidiaries that relate to a Straddle Tax Period shall be
apportioned to the Pre-Closing Tax Period as

63

--------------------------------------------------------------------------------

 

follows: (i) in the case of Taxes that are either (A) based upon or related to
income or receipts, capital or net worth, or (B) imposed in connection with any
sale or other transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement, as provided
under Section 7.9(c)), such Taxes shall be deemed equal to the amount which
would be payable if the Tax year ended with the Closing Date (provided, however,
that exemptions, allowances or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned on a time
basis); and (ii) in the case of Taxes imposed on a periodic basis other than
those described in clause (i), including property Taxes and similar ad valorem
obligations, such Taxes shall be deemed to be the amount of such Taxes for the
entire Straddle Tax Period (or, in the case of such Taxes determined on an
arrears basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of calendar days
in the period ending on the Closing Date and the denominator of which is the
number of calendar days in the entire period. Section 7.9(c) shall control the
allocation of Transfer Taxes thereunder. Subject to the terms of this Agreement,
Buyer shall be held harmless and indemnified from the Escrow Funds for all Taxes
of the Company or any of its Subsidiaries that are attributable to any
Pre-Closing Tax Period, whether shown on any original Tax Return or amended Tax
Return for the period therein, and Buyer shall be liable for all Taxes that are
attributable to any Tax period that begins after the Closing Date, and, with
respect to any taxable period beginning on or before and ending after the
Closing Date, the portion of such taxable year or period that begins immediately
after the Closing Date (each, a “Post-Closing Tax Period”).
               (iii) Tax Return Amendments; Disputes. Buyer (and its
Subsidiaries and Affiliates) shall not amend any Tax Returns of the Company or
any Subsidiary of the Company for any Pre-Closing Tax Period without the prior
written consent of the Stockholders’ Representative, such consent not to be
unreasonably withheld. If there is a dispute with respect to whether the written
consent of the Stockholders’ Representative is being unreasonably withheld with
respect to the amendment of a Tax Return pursuant to this Section 7.9(a)(iii)
and the Buyer and the Stockholders Representative are unable to resolve such
dispute, the parties shall jointly request the Accounting Referee to resolve
such dispute as promptly as possible. The Accounting Referee will make its
determination of whether or not the Stockholder Representative’s consent was
unreasonably withheld on the basis of whether or not the relevant position on
the Tax Return with respect to which the Buyer seeks to make an amendment
satisfies the “reasonable basis” standard set forth in Treasury Regulations
Section 1.6662-3(b)(3). If the Accounting Referee is unable to make a
determination with respect to any disputed issue prior to the due date
(including extensions) for the filing of the Tax Return in question, the Buyer
may file such Tax Return without the consent of the Stockholders’
Representative, subject, however, to the obligation thereafter to file an
amended Tax Return reflecting the final decision of the Accounting Referee
(which decision shall be rendered prior to the expiration of the period during
which an amended Tax Return may validly be filed with respect to the applicable
taxable period), and provided that no claim for indemnification may be made by
the Buyer in respect of such disputed Tax Return until the Accounting Referee
has rendered its decision in respect of such dispute. Any decision rendered by
the Accounting Referee in accordance with this Section 7.9(a)(iii) shall be
binding and conclusive, and any expenses relating to the engagement of the
Accounting Referee shall be shared equally by the Stockholders and the Buyer.

64

--------------------------------------------------------------------------------

 

               (iv) Tax Contests. The Stockholders Representative shall have the
right, at its own expense, to participate in and to jointly (with the Buyer)
control and settle the portion of any audit, examination, or other
administrative or judicial proceeding, contest, assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all
Taxes (a “Tax Contest”) for which Buyer may have a right to be indemnified for
and held harmless from the Escrow Funds pursuant to this Agreement. Buyer and
Surviving Corporation shall give prompt written notice of any such Tax Contest
to the Stockholders Representative and shall execute appropriate powers of
attorney so as to allow the Stockholders Representative to participate in and
jointly control and settle any such Tax Contest as described above. In the event
of a conflict between the provisions set forth in Section 9.5 and this
Section 7.9, the provisions of this Section 7.9 shall control.
          (b) Cooperation on Tax Matters. Buyer, the Surviving Corporation and
the Stockholders’ Representative shall cooperate fully, as and to the extent
reasonably requested by the other parties, in connection with the filing of Tax
Returns, the filing of any amended Tax Return for a period prior to (or
including) the Closing Date, any Tax audits, Tax proceedings or other
Tax-related claims, and the authorization and execution of any appropriate
powers of attorney to accomplish the foregoing. Such cooperation shall include
providing records and information that are reasonably relevant to any such
matters, making employees available on a mutually convenient basis to provide
additional information, and explaining any materials provided pursuant to this
Section 7.9. Buyer, the Surviving Corporation and their respective Subsidiaries
and Affiliates shall not destroy or dispose of any Tax workpapers, schedules or
other materials and documents supporting Tax Returns of the Company and its
Subsidiaries for Pre-Closing Tax Periods until the latter of (i) the
Indemnification Cut-Off Date, or (ii) the tenth anniversary of the Closing Date,
without the prior written consent of Stockholders’ Representative, and before
any disposition or destruction of such materials at any time, Buyer shall give
thirty (30) days prior written notice of any such proposed disposition or
destruction to the Stockholders’ Representative, and the Stockholders’
Representative shall have the right, in its sole discretion, to take possession
of such materials and documents.
          (c) Transfer Taxes. The Buyer, on the one hand, and all of the
Stockholders, on the other hand, shall each be liable for fifty percent (50%) of
any transfer, value added, excise, stock transfer, stamp, recording,
registration and any similar Taxes (“Transfer Taxes”) that become payable in
connection with the Merger and other transactions contemplated hereby. The
applicable parties shall cooperate in filing such forms and documents as may be
necessary to permit any such Transfer Tax to be assessed and paid on or prior to
the Closing Date in accordance with any available pre-sale filing procedure, and
to obtain any exemption or refund of any such Transfer Tax.
          (d) Reorganization. Neither Buyer nor the Company shall take or cause
to be taken any action, whether before or after the Effective Time, that would
disqualify the Merger as a “reorganization” within the meaning of Section 368(a)
of the Code.
          (e) Tax Representation Letter. The Company shall deliver to Sullivan &
Cromwell LLP and to Goodwin Procter LLP a “Tax Representation Letter,” dated as
of the Closing Date and signed by an officer of the Company, containing
representations of the

65

--------------------------------------------------------------------------------

 

Company, and Buyer shall deliver to Sullivan & Cromwell LLP and Goodwin Procter
LLP a “Tax Representation Letter,” dated as of the Closing Date and signed by an
officer of Buyer, containing representations of Buyer, in each case as shall be
reasonably necessary or appropriate to enable Goodwin Procter LLP to render the
opinion described in Section 8.3(g) and Sullivan & Cromwell LLP to render an
opinion substantially similar to the opinion described in Section 8.3(g) to
Buyer.
          (f) Stockholder Vote Concerning Code Section 280G. On or before the
thirtieth (30th) day following the date of this Agreement, the Company shall
provide Buyer with a document stating: (i) the estimated maximum amount that
could be paid to each disqualified individual (as such term is defined in
Treasury Regulation Section 1.280G-1, and hereafter referred to as a
“Disqualified Individual”) in connection with the Merger and the other
transactions contemplated by this Agreement under all employment, severance and
termination agreements, other compensation arrangements and Benefit Plans
currently in effect, assuming that the individual’s employment with the Company
is terminated immediately after the Effective Time, (ii) the grant dates,
exercise prices and vesting schedules applicable to each Company Option granted
to the individual, (iii) the “base amount” (as defined in Section 280G(b)(3) of
the Code) for each such individual as of the date of this Agreement, and
(iv) the maximum additional amount that the Company is estimated to have an
obligation to pay to each Disqualified Individual to reimburse the Disqualified
Individual for any excise Tax imposed under Section 4999 of the Code with
respect to the Disqualified Individual’s “excess parachute payments” (as defined
in Section 280G(b)(3) of the Code) (including any Taxes, interest or penalties
imposed with respect to the excise Tax). Prior to the Effective Time and to the
extent that Buyer determines necessary prior to the date that the Company
distributes to its Stockholders the information statement relating to the 280G
Stockholder Vote (as hereinafter defined), the Company shall conduct a
Stockholder vote in a manner that complies with the stockholder vote
requirements needed to avail itself of the exemption for small business
corporations contained in Section 280G(b)(5) of the Code and the applicable
regulations promulgated thereunder (the “280G Stockholder Vote”), and shall,
prior to the 280G Stockholder Vote, use commercially reasonable efforts to cause
its Disqualified Individuals to waive any payments in respect of the Merger that
would not be deductible pursuant to Section 280G of the Code if the 280G
Stockholder Vote fails the approval requirements set out in Section 280G(b)(5)
of the Code and the applicable regulations promulgated thereunder. Prior to
providing the Company’s Stockholders with any materials necessary to comply with
such requirements, the Company shall provide a copy of such materials to Buyer
in sufficient time (but in no event less than five (5) Business Days prior to
such 280G Stockholder Vote) to allow Buyer to comment thereon and shall consider
any such comments in good faith. If the 280G Stockholder Vote fails to achieve
the requisite approval in respect of any Disqualified Individual, the Company
shall provide to Buyer the name of such Disqualified Individuals and amounts
waived.
     Section 7.10 Section 16(b) Matters. Prior to Closing, the Board of
Directors of Buyer shall adopt resolutions substantially in the form attached to
this Agreement as Exhibit E with respect to acquisitions pursuant to the Merger
and the other transactions contemplated by this Agreement of Buyer Stock and New
Options by any officer of the Company that may, at the Effective Time, be
regarded as an individual subject to the reporting requirements of Section 16(a)
of the Securities Exchange Act of 1934, as amended, by virtue of his position
with Buyer.

66

--------------------------------------------------------------------------------

 

     Section 7.11 Further Action. Each of the parties hereto shall use its
respective commercially reasonable efforts to take or cause to be taken all
appropriate action, do or cause to be done all things necessary, proper or
advisable and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement.
ARTICLE VIII
CONDITIONS TO THE MERGER
     Section 8.1 Conditions to the Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the fulfillment or waiver by consent of the other party, where
permissible, at or prior to the Effective Time, of each of the following
conditions:
          (a) Stockholder Approval. This Agreement shall have been adopted and
approved by a Stockholder Written Consent representing the Required Stockholder
Approval, in accordance with the DGCL, the Certificate of Incorporation and the
By-laws, and by the stockholder of MergerCo in accordance with the DGCL, such
adoption and approval shall represent the requisite approval required by the
Company’s Stockholders to consummate the Merger, and such adoption and approval
shall remain in full force and effect.
          (b) Hart-Scott-Rodino Act. The waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
          (c) Governmental Consents. All licenses, permits, consents,
authorizations, approvals, qualifications and orders of Governmental Bodies
required to consummate the Merger or otherwise set forth in Schedule 8.1(c) of
this Agreement shall have been obtained and shall remain in full force and
effect.
          (d) No Injunctions, Orders or Restraints; Illegality. No temporary,
preliminary or permanent injunction or other order, decree or ruling issued by a
court or other Governmental Body of competent jurisdiction nor any statute,
rule, regulation or executive order promulgated or enacted by any Governmental
Body of competent jurisdiction shall be in effect which would have the effect of
(i) making the consummation of the Merger illegal or (ii) otherwise prohibiting
the consummation of the Merger, and no Governmental Body shall have instituted
any proceeding or proposed the enactment of any statute, rule, regulation or
executive order that would reasonably be expected to have any such effect.
     Section 8.2 Additional Conditions to Obligations of Buyer and MergerCo. The
obligations of Buyer and MergerCo to effect the Merger are further subject to
the satisfaction of the following conditions, any one or more of which may be
waived by Buyer and MergerCo at or prior to the Effective Time:

67

--------------------------------------------------------------------------------

 

          (a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in this Agreement shall be true and correct
as of the date of this Agreement and as of the Closing Date as though made on
and as of such date and time (except to the extent that any such representation
and warranty speaks of a specified date, in which case such representation and
warranty shall be true and correct as of such specified date), except where the
failure to be so true and correct, individually or in the aggregate, has not had
and would not reasonably be expected to have a Company Material Adverse Effect.
          (b) Performance and Obligations of the Company. The Company shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Effective Time.
          (c) Officer’s Certificate. Buyer shall have received a certificate
executed and delivered by the Company’s Chief Executive Officer or Chief
Financial Officer, dated as of the Closing Date, stating therein that the
conditions set forth in Section 8.2(a), Section 8.2(b) and Section 8.2(f) have
been satisfied.
          (d) Secretary’s Certificate. The Company shall have delivered a
certificate of an authorized officer of the Company, dated as of the Closing
Date, certifying as to (i) the incumbency of officers of the Company executing
documents executed and delivered in connection herewith, (ii) the copies of the
Certificate of Incorporation and By-laws, each as in effect from the date of
this Agreement until the Closing Date, and (iii) a copy of the resolutions of
the Company Board authorizing and approving the applicable matters contemplated
hereunder.
          (e) Escrow Agreement. The Escrow Agreement shall remain in full force
and effect as between the Stockholders’ Representative and Buyer, and the Escrow
Agent shall have executed and delivered the Escrow Agreement.
          (f) No Material Adverse Effect; Preservation of Business. Since the
date of this Agreement, there shall not have occurred any change, event,
circumstances or development that has had, or is reasonably likely to have, a
Company Material Adverse Effect. In addition, as of the Closing Date:
     (i) The Persons employed by the Company and its Subsidiaries in the United
States and identified on Schedule 8.2(f)(i), to the extent described on such
Schedule, shall be full-time employees of the Company or one of its Subsidiaries
as of the Closing Date and shall not have provided to the Company or any of its
Subsidiaries notice of their intention to terminate such employment or retire
following the Closing;
     (ii) The Persons employed by the Company and its Subsidiaries in the United
Kingdom and identified on Schedule 8.2(f)(ii), to the extent described on such
Schedule, shall be full-time employees of the Company or one of its Subsidiaries
as of the Closing Date and shall not have provided to the Company or any of its
Subsidiaries any notice of their intention to terminate such employment or
retire following the Closing; and

68

--------------------------------------------------------------------------------

 

     (iii) If there is a reduction in the aggregate trading volume in credit
derivatives generated by the Company and its Subsidiaries during the period
beginning on the first (1st) Business Day following the date of this Agreement
and continuing through, and including, the last Business Day prior to the
Closing Date, then (x) if the aggregate trading volumes in credit derivatives
generated over the same period by GFI Group, Inc., ICAP plc, Tullett Prebon plc
and Tradition (UK) Limited and their respective Subsidiaries, considered
together, and as reported by research firms, industry associations, equity
research analysts, The International Swaps and Derivatives Association, The
British Bankers Association and Fitch Ratings, Inc. for the credit derivatives
industry generally (collectively, the “Credit Derivatives Industry Group”) have
increased, such aggregate trading volumes shall not have increased in a manner
that represents a material difference in performance relative to the Company and
its Subsidiaries and (y) if such aggregate trading volumes of the Credit
Derivatives Industry Group over the same period shall have decreased, then the
reduction experienced by the Company and its Subsidiaries shall not be a
materially greater reduction, in percentage terms, than the reduction
experienced by the Credit Derivatives Industry Group.
          (g) Consents Under Contracts. The Company shall have obtained the
consents or approvals required in respect of those Contracts as set forth on
Schedule 8.2(g).
          (h) Company Financial Statements. All historical financial statements
and information regarding the Company and its Subsidiaries required to be filed
by Buyer with the SEC following the Closing pursuant to a Current Report on Form
8-K shall have been prepared and, as applicable, audited and reported on or
reviewed by the Company’s independent auditor, and all pro forma financial
statements and information regarding Buyer and the Company, and their respective
subsidiaries, required to be filed by Buyer with the SEC following the Closing
pursuant to a Current Report on Form 8-K shall have been prepared, in each of
the foregoing cases in form and substance satisfactory, in Buyer’s judgment, to
be filed with the SEC on the next Business Day immediately following the Closing
Date on which the SEC is accepting filings. Buyer acknowledges and confirms that
it will not require the Company’s or its independent auditors to re-audit or
restate the Company’s audited financial statements for the fiscal year ended
December 31, 2007, except as may be required to comply with GAAP, the rules and
regulations of the SEC, or other applicable laws, regulations or rules, or as it
may be advised to do so by Deloitte & Touche.
     Section 8.3 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is further subject to the
satisfaction of the following conditions, any one or more of which may be waived
by the Company at or prior to the Effective Time:
          (a) Representations and Warranties. Each of the representations and
warranties of Buyer and MergerCo set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as though
made on and as of such date and time (except to the extent that any such
representation and warranty speaks of a specified date, in

69

--------------------------------------------------------------------------------

 

which case such representation and warranty shall be true and correct as of such
specified date) except where the failure to be so true and correct, individually
or in the aggregate, has not had and would not reasonably be expected to have an
Buyer Material Adverse Effect.
          (b) Performance of Obligations of Buyer and MergerCo. Each of Buyer
and MergerCo shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time.
          (c) Officer’s Certificate. The Company shall have received a
certificate executed and delivered by Buyer’s Chief Executive Officer or Chief
Financial Officer, dated as of the Closing Date, stating therein that the
conditions set forth in Section 8.3(a) and Section 8.3(b) have been satisfied.
          (d) Secretary’s Certificate. Each of Buyer and MergerCo shall have
delivered a certificate of an authorized officer, dated as of the Closing Date,
certifying as to (i) the incumbency of officers executing documents executed and
delivered in connection herewith, (ii) copies of their respective incorporation
documents, each as in effect from the date of this Agreement until the Closing
Date, and (iii) a copy of the votes of their respective Boards of Directors
authorizing and approving the applicable matters contemplated hereunder.
          (e) Escrow Agreement. The Escrow Agreement shall remain in full force
and effect as between the Stockholders’ Representative and Buyer, and the Escrow
Agent shall have executed and delivered the Escrow Agreement.
          (f) Registration Rights Agreement. The Registration Rights Agreement
shall be in full force and effect.
          (g) Tax Opinion. The Company and its Stockholders shall have received
the opinion of Goodwin Procter LLP, counsel to the Company, dated the Closing
Date, to the effect that the merger will be treated for federal income Tax
purposes as a reorganization within the meaning of Section 368(a) of the Code
and that each of Buyer, MergerCo and the Company will be a party to that
reorganization within the meaning of Section 368(b) of the Code. In rendering
such opinion, counsel to the Company shall be entitled to rely upon assumptions,
representations, warranties and covenants, including those contained in this
Agreement and in the Tax Representation Letters described in Section 7.9(e) of
this Agreement
          (h) Listing of Buyer Stock. The Buyer Stock to be issued in the Merger
shall have been approved for listing on the New York Stock Exchange, subject to
official notice of issuance, prior to the Effective Time.

70

--------------------------------------------------------------------------------

 

ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
     Section 9.1 Survival. Subject to the limitations and other provisions of
this Agreement: (a) the representations and warranties of the parties hereto
contained in this Agreement or in any certificate or in any letter agreement
between Buyer and the Company delivered by or on behalf of a party hereto
pursuant to or in connection with this Agreement, as the case may be, shall
survive the Closing and shall remain in full force and effect until the eighteen
(18) month anniversary of the Closing Date, except for the representations and
warranties set forth in Section 4.8 (Taxes) which shall survive the Closing and
remain in full force and effect until the fourth (4th) anniversary of the
Closing Date, and except, in all cases, with respect to any Loss (as defined
below), claim or breach of any such representation or warranty of which any
Indemnified Party shall have provided written notice to the Stockholders’
Representative or Buyer, as applicable, prior to such expiry, in which case the
representations and warranties that are subject to such claim shall survive
solely for purposes of, and only until, the resolution of such claims; and
(b) the respective covenants, agreements and obligations of the parties hereto
contained in this Agreement or in any certificate delivered or on behalf of a
party hereto pursuant to or in connection with this Agreement, as the case may
be, shall survive the Closing and shall remain in full force and effect in
accordance with their terms. For the purposes of this Agreement, “Losses” of a
Person means any and all losses, liabilities, damages, claims, awards,
judgments, costs and expenses (including, without limitation, reasonable
attorneys’ fees) actually suffered or incurred by such Person; provided, that
“Losses” shall not include any claim by an Indemnified Party for consequential,
incidental, indirect, punitive, special or exemplary damages. Furthermore,
(i) for purposes of calculating Losses after a breach has been established, the
terms “material,” “in all material respects,” “Company Material Adverse Effect”
and any similar qualification, and any $1,000,000 qualification or threshold to
any representation or warranty, shall be disregarded, and (ii) solely for
purposes of determining if there has been a breach of any of the representations
and warranties made by the Company or the Buyer on the Closing Date (but not on
the date of this Agreement) for purposes of this Article IX, and not for
purposes of determining the satisfaction of any closing condition, the term
“Material Adverse Effect” that is used in the Officer’s Certificates delivered
pursuant to Section 8.2(c) and Section 8.3(c) shall be disregarded.
     Section 9.2 Buyer/MergerCo Indemnification. Subject to the other terms and
conditions of this Agreement, from and after the Closing, Buyer and MergerCo
(each a “Buyer Indemnified Party”) shall be held harmless and indemnified from
the Escrow Funds to the extent of any Losses (as defined in Section 9.1)
resulting from: (a) the breach or inaccuracy of any representation or warranty
of the Company contained in this Agreement or in any certificate or in any
letter agreement between Buyer and the Company delivered by or on behalf of the
Company pursuant to or in connection with this Agreement, as the case may be; or
(b) any failure of the Company to fully perform, fulfill or comply with any
covenant of the Company contained in this Agreement; (c) any and all unpaid
Company Transaction Expenses exceeding the amount accrued or reserved for in the
calculation of Stockholders Equity and which was not taken into account in
connection with the true-up procedure described in Section 2.5 herein; (d) all
costs arising from the Company’s failure to execute a valid 280G Stockholder
Vote, including, without

71

--------------------------------------------------------------------------------

 

limitation (1) the total cost of any Section 280G or Section 4999 gross-up
payments made to Disqualified Individuals (including the value of any federal,
state or local income Taxes on such gross-up payments), (2) the value of the
lost Tax deduction for any payments that become non-deductible pursuant to
Section 280G of the Code, (3) the value of any amounts that should have been
waived by Disqualified Individuals in connection with the 280G Stockholder Vote
to the extent that such amounts are treated as deductions in the calculation of
Net Merger Consideration and (4) any claims from employees arising in connection
with clauses (1) or (3) hereof, in each case as the amounts in (1) through
(4) hereof arise in connection with the transactions contemplated by this
Agreement; (e) that certain FINRA investigation referenced in paragraph number 3
of Schedule 4.5(b) ; and (f) matters set forth on Schedule 4.8 ; and
(g) Pre-Closing Tax Period Tax liabilities for which Buyer is entitled to
indemnification to the extent described in Section 7.9, except for Pre-Closing
Tax Period Tax liabilities attributable to matters set forth on Schedule 4.8,
which shall be addressed solely under Section 9.2(f).
     Section 9.3 Company Indemnification. Subject to the other terms and
conditions of this Agreement, from and after the Closing, the Stockholders, the
Vested Optionholders and their respective officers and directors (each a
“Stockholder Indemnified Party”) shall be held harmless and indemnified by Buyer
to the extent of any Losses resulting from (a) the breach or inaccuracy of any
representation or warranty of Buyer or MergerCo contained in this Agreement or
in any certificate delivered by or on behalf of Buyer or MergerCo pursuant to or
in connection with this Agreement, as the case may be; and (b) any failure of
Buyer or the Surviving Corporation to fully perform, fulfill or comply with any
covenant of Buyer or the Surviving Corporation contained in this Agreement.
     Section 9.4 Limitations.
          (a) A Buyer Indemnified Party’s indemnification rights pursuant to
Section 9.2 and a Stockholder Indemnified Party’s indemnification rights
pursuant to Section 9.3, respectively, shall be limited as follows:
     (i) Indemnified Parties shall not be entitled to indemnification pursuant
to Section 9.2(a), Section 9.2(e) or Section 9.3(a) except to the extent that
the aggregate dollar amount of all Losses that would otherwise be indemnifiable
pursuant to Section 9.2(a) or Section 9.3(a) exceeds $2,500,000 (the
“Deductible”), and then only to the extent that such Losses exceed the
Deductible.
     (ii) Buyer Indemnified Parties shall not be entitled to any indemnification
hereunder for any Losses (individually or in the aggregate) in excess of the
deemed value of the Escrow Shares (as provided in the Escrow Agreement) and
Escrow Cash constituting the Escrow Funds and the right of the Buyer Indemnified
Parties to recover for all their indemnifiable Losses shall be limited solely to
the Escrow Shares and the Escrow Cash then remaining in escrow pursuant to the
terms of the Escrow Agreement.
     (iii) Stockholder Indemnified Parties shall not be entitled to any
indemnification hereunder for any Losses (individually or in the aggregate) in

72

--------------------------------------------------------------------------------

 

excess of the value of the shares of Buyer Stock and Escrow Cash constituting
the Escrow Funds as of the date the Escrow Funds are employed to indemnify the
Stockholder Indemnified Parties for such Losses and the Stockholder Indemnified
Parties’ right to recover for all their indemnifiable Losses shall be limited
solely to that value.
     (iv) All claims for indemnification by an Indemnified Party must be made on
or before the eighteen (18) month anniversary of the Closing Date (except for
claims by Buyer Indemnified Parties for indemnification pursuant to
Section 9.2(f) and Section 9.2(g) and claims by Buyer Indemnified Parties for
indemnification with respect to the representations and warranties set forth in
Section 4.8, which claims must be made on or before the fourth (4th) anniversary
of the Closing Date) (the “Indemnification Cut-Off Date”). No indemnification
shall be payable to an Indemnified Party with respect to claims asserted by such
Indemnified Party after the applicable Indemnification Cut-Off Date, regardless
of when the claim accrued or the circumstances that resulted in the claim being
asserted after the Indemnification Cut-Off Date. In the event a claim has been
properly made on or prior to the applicable Indemnification Cut-Off Date and
such claim is unresolved as of such applicable Indemnification Cut-Off Date,
then the right to indemnification with respect to such claim shall remain in
effect until such matter shall have been finally determined.
     (v) Buyer Indemnified Parties shall not be entitled to indemnification for
any Losses pursuant to Section 9.2(f) until the aggregate amount of
indemnifiable Losses under such section exceeds $1,000,000 (“Threshold”),
whereupon Buyer Indemnified Parties shall then be entitled to be indemnified for
all indemnifiable Losses pursuant to Section 9.2(f), without regard to the
Threshold, but subject to the other terms of this Article IX.
          (b) The amount of any Losses subject to indemnification under this
Article IX shall be calculated net of (i) any insurance proceeds actually
received by the Indemnified Party on account of such Losses under insurance
policies of the Company and its Subsidiaries in effect prior to the Closing, and
(ii) any amounts actually recovered by the Indemnified Party under other
indemnity agreements (excluding insurance policies), or from any other Person
alleged to be responsible therefor, without duplication. The Indemnified Party
shall take all steps as the Indemnifying Party may reasonably request (at the
Indemnifying Party’s expense) to enforce recovery of such amounts available
under such insurance coverage or other indemnity agreement.
          (c) No Indemnified Party shall be entitled to duplicate or multiple
indemnification under this Article IX for any Loss.
          (d) The Surviving Corporation shall not be liable to any Stockholder
Indemnified Party, whether jointly, severally, pursuant to contribution or
otherwise, in respect of any matter for which a Buyer Indemnified Party may seek
indemnification pursuant to this Agreement.

73

--------------------------------------------------------------------------------

 

          (e) No Buyer Indemnified Party shall be entitled to indemnification
under this Agreement for any Loss arising from a breach of any representation,
warranty or covenant set forth herein (and the amount of any Loss incurred in
respect of such breach shall not be included in the calculation of any
limitations on indemnification set forth herein) if and to the extent such Loss
was expressly taken into account in the calculation of Stockholders’ Equity
(including, without limitation, any accruals or reserves relating to tax
liabilities) or to the extent expressly included as a liability or expense on
the Financial Statements (including the footnotes thereto).
          (f) The limitations set forth in this Section 9.4(a)(i) shall not
apply to the Buyer Indemnified Parties’ indemnification rights with respect to
Losses related to Taxes, including without limitation Losses pursuant to
Section 9.2(a) with respect to representations and warranties set forth in
Section 4.8 (Taxes) and Losses pursuant to Section 9.2(f) and Section 9.2(g).
     Section 9.5 Notice; Defense of Claims.
          (a) Any Buyer Indemnified Party or Stockholder Indemnified Party (each
individually, an “Indemnified Party”) may make claims for indemnification
hereunder by giving prompt written notice thereof to the Stockholders’
Representative, in the case of claims made against the Company, or to Buyer, in
the case of claims made against Buyer or the Surviving Corporation, prior to the
Indemnification Cut-Off Date. If indemnification is sought for a claim,
assertion, event or proceeding by or in respect of any third party (a “Third
Party Claim”), the Indemnified Party shall also give the Stockholders’
Representative or Buyer, as applicable, written notice of such Third Party Claim
as to which such Indemnified Party may request indemnification hereunder, as
soon as reasonably practicable after the time that such Indemnified Party learns
of such Third Party Claim, and in any event within thirty (30) days thereafter.
Any notice given pursuant to this Section 9.5 shall state all material
information then available regarding the amount and nature of such claim,
assertion, event or proceeding and shall specify the representation, warranty or
covenant in this Agreement under which the liability or obligation is asserted.
The failure of the Indemnified Party to give notice as provided in this
Section 9.5 shall not relieve any party with an indemnification obligation
hereunder (each an “Indemnifying Party” and collectively, the “Indemnifying
Parties”) from any liability except to the extent that it is actually prejudiced
by the failure or delay in giving such notice and then only to the extent of
such prejudice.
          (b) In the event that an Indemnifying Party shall object in good faith
to the indemnification of an Indemnified Party in respect of any claim or claims
specified in a notice given pursuant to this Section 9.5, the Indemnifying Party
shall, within thirty (30) days after receipt by the Indemnifying Party of such
notice, deliver to the Indemnified Party a notice to such effect, setting forth
in reasonable detail the basis for such objection, and the Indemnifying Party
and the Indemnified Party shall, within the thirty (30) day period beginning on
the date of receipt by the Indemnified Party of such objection, attempt in good
faith to agree upon the rights of the respective parties with respect to each of
such claims to which the Indemnifying Party shall have so objected. If the
Indemnified Party and the Indemnifying Party shall succeed in reaching agreement
on their respective rights with respect to any of such claims, the Indemnified
Party and the Indemnifying Party shall promptly prepare and sign a memorandum
setting forth

74

--------------------------------------------------------------------------------

 

such agreement and, if applicable, an instruction to the Escrow Agent. Should
the Indemnified Party and the Indemnifying Party be unable to agree as to any
particular item or items or amount or amounts, then each party shall be entitled
to pursue its available remedies for resolving the claim for indemnification.
          (c) In the event that a Third Party Claim gives rise to an
indemnification claim, the Indemnifying Party may elect to assume and control
the defense of such Third Party Claim and any litigation resulting therefrom;
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld or
delayed), and the Indemnified Party may participate in such defense at the
Indemnified Party’s expense, which shall include counsel of its choice; provided
further that the Indemnified Party shall have the right to employ, at the
Indemnifying Party’s expense, one counsel of its choice in each applicable
jurisdiction (if more than one jurisdiction is involved) to represent the
Indemnified Party if, in the Indemnified Party’s reasonable judgment, there
exists an actual or potential conflict of interest between the Indemnified Party
and the Indemnifying Party; and provided further that, if the Indemnifying Party
(i) elects not to defend, compromise or settle a Third Party Claim or
(ii) having elected to defend a Third Party Claim, fails to retain counsel to
prosecute the action within twenty (20) days of such election, then in such case
the Indemnified Party shall have the right to defend such Third Party Claim on
behalf of and for the account and risk of the Indemnifying Party. Neither the
Indemnifying Party nor the Indemnified Party shall settle or compromise any
Third Party Claim without the prior written consent of the Indemnified Party or
the Indemnifying Party, as applicable, which consent shall not be unreasonably
withheld. No Indemnified Party shall be deemed to have unreasonably withheld its
consent to any such proposed settlement or compromise that contains any term
that does not consist entirely of a monetary payment and that does not include
an unconditional release from all liability without future obligation or
liability on the part of the Indemnified Party and its Affiliates. If an
Indemnified Party refuses to consent to a bona fide offer of settlement which
the Indemnifying Party wishes to accept and which provides solely for monetary
payment and includes an unconditional release from all liability without future
obligation or prohibition on the part of the Indemnified Party and does not
contain an admission of guilt or liability on the part of the Indemnified Party
and, in the case of Buyer being the Indemnified Party, such settlement has no
adverse effect on the reputation of Buyer, the Indemnified Party may continue to
pursue such matter, free of any participation by the Indemnifying Party, at the
expense of the Indemnified Party. However, in such event, the obligation of the
Indemnifying Party shall be limited to the amount of the offer of settlement
which the Indemnified Party refused to accept plus the reasonable costs and
expenses of the Indemnified Party incurred prior to the date the Indemnifying
Party notified the Indemnified Party of the offer of settlement. The
Indemnifying Party and the Indemnified Party shall cooperate with each other in
all reasonable respects in connection with the defense of any claim, including
making available records relating to such claim and furnishing, at the expense
of the Indemnifying Party, such employees of the Indemnified Party as may be
reasonably necessary for the preparation of the defense of any such claim or for
testimony as witnesses in any proceeding relating to such claim.
     Section 9.6 Agreed Claims. Claims (i) for Losses specified in any notice of
indemnification claim to which the recipient did not object in writing within
30 days, (ii) for

75

--------------------------------------------------------------------------------

 

Losses covered by a memorandum of agreement of the nature described in
Section 9.5(b), and (iii) for Losses the validity and amount of which have been
the subject of resolution by binding arbitration or of a final non-appealable
judicial determination are hereinafter referred to, collectively, as “Agreed
Claims”. The Indemnified Party shall be entitled to payment from the
Indemnifying Party for all Agreed Claims, subject to all of the terms and
limitations set forth in this Article IX, within 10 Business Days of the
determination of the amount of any such Agreed Claims. In the case of an Agreed
Claim requiring payment to a Buyer Indemnified Party, if payment is not made by
the Indemnifying Party within such period, Buyer shall be entitled to give
notice to the Escrow Agent in accordance with the Escrow Agreement (which notice
the Stockholders’ Representative shall countersign promptly on request)
instructing the Escrow Agent, who shall promptly comply with such instruction,
to release to Buyer from the Indemnity Escrow Account the number of Escrow
Shares and amount of Escrow Cash having an aggregate value (as calculated
pursuant to the Escrow Agreement) equal to the amount of such Agreed Claim.
     Section 9.7 Remedies Exclusive. After the Closing, the rights of the
parties hereto and the Indemnified Parties to indemnification relating to this
Agreement or the transactions contemplated hereby shall be strictly limited to
those contained in this Article IX, and such indemnification rights shall be the
sole and exclusive remedies of the parties hereto and the Indemnified Parties
subsequent to the Closing Date with respect to any matter in any way relating to
this Agreement or its subject matter or arising in connection herewith. To the
maximum extent permitted by Law, the parties hereto and the Indemnified Parties
hereby waive all other rights and remedies with respect to any matter in any way
relating to this Agreement or arising in connection herewith, whether under any
Laws at common law, in equity or otherwise. Except as provided in this
Article IX, no claim, action or remedy shall be brought or maintained by any
party against any other party, and no recourse shall be brought or granted
against any of them, by virtue of or based upon any alleged misstatement or
omission respecting an inaccuracy in or breach of any of the representations,
warranties, covenants or agreements of any of the parties hereto set forth or
contained in this Agreement. However, notwithstanding anything in this
Article IX to the contrary, nothing in this Agreement shall limit any right or
remedy of a party with respect to fraud.
     Section 9.8 Treatment of Indemnity Payments. All payments made pursuant to
this Article IX are intended to be treated for Tax purposes as consideration for
the Company Stock purchased by Buyer in the Merger and shall be treated as such
consideration (subject to any requirement to treat a portion as imputed
interest) for all Tax purposes except to the extent otherwise required by a
final determination or a Taxing Authority.
ARTICLE X
TERMINATION
     Section 10.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the execution of the
Stockholder Written Consent:

76

--------------------------------------------------------------------------------

 

          (a) by the written consent of Buyer (on behalf of itself and MergerCo)
and the Company;
          (b) by either of the Company, on the one hand, or Buyer or MergerCo,
on the other hand, by written notice to the other:
     (i) if any governmental agency of competent jurisdiction shall have issued
an injunction or taken any other action (which injunction or other action the
parties hereto shall use their best efforts to lift) that permanently restrains,
enjoins or otherwise prohibits the consummation of the Merger, and such
injunction shall have become final and non-appealable; or
     (ii) if the consummation of the Merger shall not have occurred on or before
December 12, 2008 (the “Termination Date”); provided, however, that (A) the
right to terminate this Agreement under this Section 10.1(b)(ii) shall not be
available to any party whose failure to comply with any provision of this
Agreement has been the cause of, or resulted in, the failure of the Merger to
occur on or before such date; (B) if on December 12, 2008, all of the conditions
set forth in Article VIII (other than those conditions which by their nature are
required to be satisfied at Closing) have been satisfied or waived, other than
the FINRA approval for a change in control, then the Termination Date shall be
January 9, 2009 instead; and (C) the parties may mutually agree to extend the
period before termination if such failure to consummate the Merger is due to
regulatory or antitrust issues;
          (c) by the Company, if the Company is not then in material breach of
any term of this Agreement, upon written notice to Buyer, upon a material breach
of any representation, warranty or covenant of Buyer or MergerCo contained in
this Agreement, provided, however, that such breach is not capable of being
cured or has not been cured within thirty (30) days after the giving of notice
thereof by the Company to Buyer, such that the conditions set forth in Section
8.3(a) or (b) cannot be satisfied or cured prior to the date set forth in
Section 10.1(b)(ii);
          (d) by Buyer or MergerCo, if neither Buyer nor MergerCo is then in
material breach of any term of this Agreement, upon written notice to Company,
upon a material breach of any representation, warranty or covenant of the
Company contained in this Agreement, provided, however, that such breach is not
capable of being cured or has not been cured within thirty (30) days after the
giving of notice thereof by Buyer or MergerCo to the Company, such that the
conditions set forth in Section 8.2(a) or (b) cannot be satisfied or cured prior
to the date set forth in Section 10.1(b)(ii); or
          (e) by Buyer or MergerCo, if the Company fails to obtain and deliver
to Buyer the Stockholder Written Consent representing the Required Stockholder
Approval within one (1) Business Day of the date of this Agreement or if at any
time following such delivery of the Stockholder Written Consent such Stockholder
Written Consent is not in full force and effect.

77

--------------------------------------------------------------------------------

 

     Section 10.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 10.1, this Agreement shall forthwith become null
and void and have no effect, without any liability on the part of Buyer,
MergerCo, the Company, any Stockholder or any Optionholder (collectively with
the Stockholders, the “Common Equity Holders,” or each individually, a “Common
Equity Holder”) or the Stockholders’ Representative or any of their respective
directors, officers, employees, partners, managers, members or stockholders and
all rights and obligations of any party hereto shall cease, except for the
agreements contained in Section 7.3, this Article X and Article XII; provided,
however, that no such termination shall relieve any party hereto of any
liability or damage resulting from any willful or intentional breach of this
Agreement.
ARTICLE XI
STOCKHOLDERS’ REPRESENTATIVE
     Section 11.1 Appointment. TA Associates, Inc. shall have full power and
authority to take all actions under this Agreement and the Escrow Agreement that
are to be taken by the Stockholders’ Representative. The Stockholders’
Representative shall take any and all actions which it believes are necessary or
appropriate under this Agreement and the Escrow Agreement, including, without
limitation, executing the Escrow Agreement as Stockholders’ Representative,
giving and receiving any notice or instruction permitted or required under this
Agreement or the Escrow Agreement by the Stockholders’ Representative,
interpreting all of the terms and provisions of this Agreement and the Escrow
Agreement, authorizing payments to be made with respect hereto or thereto,
obtaining reimbursement as provided for herein for all out-of-pocket fees and
expenses and other obligations of or incurred by the Stockholders’
Representative in connection with this Agreement and the Escrow Agreement,
defending all indemnity claims against the Escrow Funds pursuant to Section 9.2
of this Agreement (an “Indemnity Claim”), consenting to, compromising or
settling all Indemnity Claims, conducting negotiations with Buyer, the Surviving
Corporation and their respective agents regarding such claims, dealing with
Buyer, the Surviving Corporation and the Escrow Agent under this Agreement,
taking any other actions specified in or contemplated by this Agreement and the
Escrow Agreement, and engaging counsel, accountants or other representatives in
connection with the foregoing matters. Without limiting the generality of the
foregoing, the Stockholders’ Representative shall have the full power and
authority to interpret all the terms and provisions of this Agreement and the
Escrow Agreement and to consent to any amendment hereof or thereof in its
capacity as Stockholders’ Representative.
     Section 11.2 Authorization. The Company hereby authorizes the Stockholders’
Representative to, and by accepting the merger consideration provided for in
Section 2.1(c), Section 2.1(d) or Section 2.2(b), as applicable (subject to
Section 2.10 and Section 2.11), each Common Equity Holder shall be deemed to
ratify and confirm all that the Stockholders’ Representative shall do or cause
to be done by virtue of such Stockholders’ Representative’s appointment as
Stockholders’ Representative of such Common Equity Holder and to authorize the
Stockholders’ Representative to:

78

--------------------------------------------------------------------------------

 

          (a) Receive all notices or documents given or to be given to the
Common Equity Holders pursuant hereto or to the Escrow Agreement or in
connection herewith or therewith and to receive and accept services of legal
process in connection with any suit or proceeding arising under this Agreement
or the Escrow Agreement;
          (b) Engage counsel, and such accountants and other advisors and incur
such other expenses in connection with this Agreement or the Escrow Agreement
and the transactions contemplated hereby or thereby as the Stockholders’
Representative may in its sole discretion deem appropriate; and
          (c) Take such action as the Stockholders’ Representative may in its
sole discretion deem appropriate in respect of: (i) waiving any inaccuracies in
the representations or warranties of Buyer or MergerCo contained in this
Agreement or in any document delivered by Buyer or MergerCo pursuant hereto;
(ii) taking such other action as the Stockholders’ Representative is authorized
to take under this Agreement or the Escrow Agreement; (iii) receiving all
documents or certificates and making all determinations, in its capacity as
Stockholders’ Representative, required under this Agreement or the Escrow
Agreement; and (iv) all such actions as may be necessary to carry out any of the
transactions contemplated by this Agreement and the Escrow Agreement, including,
without limitation, the defense and/or settlement of any claims for which
indemnification is sought pursuant to Article IX and any waiver of any
obligation of Buyer or the Surviving Corporation.
     Section 11.3 Agency. Notwithstanding any provision herein to the contrary,
the Stockholders’ Representative is not an agent of the Common Equity Holders,
and shall have no duties to the Common Equity Holders or liability to the Common
Equity Holders with respect to any action taken, decision made or instruction
given by the Stockholders’ Representative in connection with the Escrow
Agreement or this Agreement
     Section 11.4 Indemnification and Exculpation. The Stockholders’
Representative shall be indemnified by the Common Equity Holders for and shall
be held harmless against any loss, liability or expense incurred by the
Stockholders’ Representative or any of its Affiliates and any of their
respective partners, directors, officers, employees, agents, stockholders,
consultants, attorneys, accountants, advisors, brokers, representatives or
controlling persons, in each case relating to the Stockholders’ Representative’s
conduct as Stockholders’ Representative, other than losses, liabilities or
expenses resulting from the Stockholders’ Representative’s willful misconduct in
connection with its performance under this Agreement and the Escrow Agreement.
This indemnification shall survive the termination of this Agreement. The costs
of such indemnification (including the costs and expenses of enforcing this
right of indemnification) shall be paid exclusively from the Stockholders’
Representative Expense Fund. The Stockholders’ Representative may, in all
questions arising under this Agreement, rely on the advice of counsel and for
anything done, omitted or suffered in good faith by the Stockholders’
Representative in accordance with such advice, the Stockholders’ Representative
shall not be liable to the Common Equity Holders. Neither Buyer, MergerCo, the
Company nor the Surviving Corporation shall be in any way responsible to any
Common Equity Holder for any Loss suffered by reason of the performance by the
Stockholders’ Representative of such Stockholders’ Representative’s duties under
this Agreement or the Escrow Agreement.

79

--------------------------------------------------------------------------------

 

     Section 11.5 Access to Information. The Stockholders’ Representative shall
have reasonable access to all information of and concerning any Indemnity Claim
and which is in the possession, custody or control of Buyer or the Surviving
Corporation and the reasonable assistance of Buyer’s and the Surviving
Corporation’s officers and employees for purposes of performing the
Stockholders’ Representative’s duties under this Agreement or the Escrow
Agreement and exercising its rights under this Agreement and the Escrow
Agreement, including for the purpose of evaluating any Indemnity Claim against
the Escrow Funds by any Buyer Indemnified Party; provided, however, that the
Stockholders’ Representative shall treat confidentially and not, except in
connection with enforcing its rights under this Agreement and the Escrow
Agreement, disclose any nonpublic information from or concerning any Indemnity
Claim to anyone (except to the Stockholders’ Representative’s attorneys,
accountants or other advisers, to Stockholders and on a need-to-know basis to
other individuals who agree to keep such information confidential), and
provided, further, that the foregoing shall not require Buyer or the Surviving
Corporation (i) to permit any inspection, or to disclose any information, that
in the reasonable judgment of Buyer or the Surviving Corporation, as the case
may be, would result in the disclosure of any trade secrets of third parties or
violate any of its obligations with respect to confidentiality, (ii) to disclose
any information developed or discovered with respect to any period or date
following the Closing Date, or (iii) to disclose any privileged information of
Buyer or the Surviving Corporation, as the case may be, or any of its
Subsidiaries.
     Section 11.6 Reasonable Reliance. In the performance of its duties
hereunder, the Stockholders’ Representative shall be entitled to rely upon any
document or instrument reasonably believed to be genuine, accurate as to content
and signed by any Common Equity Holders or any party hereunder and assume that
any Person purporting to give any notice in accordance with the provisions
hereof has been duly authorized to do so. By accepting the merger consideration
provided for in Section 2.1(c), Section 2.1(d), or Section 2.2(b), as applicable
(subject to Section 2.10 and Section 2.11), each of the Common Equity Holders
hereby expressly acknowledges and agrees that Buyer, MergerCo and the Company
shall be entitled to rely on, and enforce, any and all actions, agreements,
understandings or commitments taken or entered into, as the case may be, by the
Stockholders’ Representative under this Agreement and the Escrow Agreement
without liability to, or obligation to inquire of, any of the Common Equity
Holders, and notwithstanding any dispute or disagreement among the Common Equity
Holders.
     Section 11.7 Orders. The Stockholders’ Representative is authorized, in its
sole discretion, to comply with final, nonappealable orders or decisions issued
or entered by any court of competent jurisdiction or arbitrator with respect to
the Escrow Funds. If any portion of the Escrow Funds is disbursed to the
Stockholders’ Representative and is at any time attached, garnished or levied
upon under any court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such property shall be stayed or enjoined by any
court order, or in case any order, judgment or decree shall be made or entered
by any court affecting such property or any part thereof, then and in any such
event, the Stockholders’ Representative is authorized, in its sole discretion,
but in good faith, to rely upon and comply with any such order, writ, judgment
or decree which it is advised by legal counsel selected by it is binding upon it
without the need for appeal or other action; and if the Stockholders’
Representative complies with any such order, writ, judgment or decree, he shall
not be liable to any Common Equity Holders or to any other

80

--------------------------------------------------------------------------------

 

Person by reason of such compliance even though such order, writ, judgment or
decree may be subsequently reversed, modified, annulled set aside or vacated.
     Section 11.8 Removal of Stockholders’ Representative; Authority of
Stockholders’ Representative. A majority in interest of the Stockholders, voting
together as a single class, shall have the right at any time during the term of
the Escrow Agreement to remove the then-acting Stockholders’ Representative and
to appoint a successor Stockholders’ Representative; provided, however, that
neither such removal of the then acting Stockholders’ Representative nor such
appointment of a successor Stockholders’ Representative shall be effective until
the delivery to the Escrow Agent of executed counterparts of a writing signed by
such majority in interest of the Stockholders with respect to such removal and
appointment, together with an acknowledgement signed by the successor
Stockholders’ Representative appointed in such writing that he, she or it
accepts the responsibility of successor Stockholders’ Representative and agrees
to perform and be bound by all of the provisions of this Agreement applicable to
the Stockholders’ Representative. For all purposes hereunder, a majority in
interest of the Stockholders shall be determined on the basis of each
Stockholder’s Pro Rata Portion. Each successor Stockholders’ Representative
shall have all of the power, authority, rights and privileges conferred by this
Agreement upon the original Stockholders’ Representative, and the term
“Stockholders’ Representative” as used herein and in the Escrow Agreement shall
be deemed to include any interim or successor Stockholders’ Representative.
Neither the removal of a, nor the appointment of a successor, Stockholders’
Representative shall affect in any manner the validity or enforceability of any
actions taken or agreements, understandings or commitments entered into by the
prior Stockholders’ Representative, which shall continue to be effective and
binding upon the Stockholders, and Buyer, the Surviving Corporation and any
other relevant counterparty shall continue to have the right to rely on, and
enforce, all such actions, agreements, understandings or commitments taken or
entered into, as the case may be, by the prior Stockholders’ Representative and
their rights with respect thereto shall not be affected, waived or discharged by
any such removal or appointment.
     Section 11.9 Expenses of the Stockholders’ Representative. The
Stockholders’ Representative Expense Fund shall be used to reimburse the out of
pocket fees and expenses (including legal, accounting and other advisors’ fees
and expenses, if applicable) incurred by the Stockholders’ Representative in
performing all of its duties and obligations under this Agreement and the Escrow
Agreement.
     Section 11.10 Irrevocable Appointment. Subject to Section 11.8, the
appointment of the Stockholders’ Representative hereunder is irrevocable and any
action taken by the Stockholders’ Representative pursuant to the authority
granted in this Article IX shall be effective and absolutely binding as the
action of the Stockholders’ Representative under this Agreement or the Escrow
Agreement.

81

--------------------------------------------------------------------------------

 

ARTICLE XII
GENERAL PROVISIONS
     Section 12.1 Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
if delivered personally, sent by overnight courier (providing proof of delivery)
or via facsimile (providing proof of receipt) to the parties at the following
addresses (or at such other address for a party as specified by like notice):
          if to the Company, to:
Creditex Group Inc.
875 Third Avenue, 29th Floor
New York, NY 10022
Attn: Chief Executive Officer
Facsimile: (212) 323-7466
          with copy to:
Goodwin Procter LLP
New York Times Building
620 Eighth Avenue
New York, NY 10018
Attn: John R. LeClaire, Esq. and
Stuart L. Rosenthal, Esq.
Facsimile: (212) 355-3333
          if to Buyer or MergerCo, to:
IntercontinentalExchange, Inc.
2100 RiverEdge Pkwy, 5th Floor
Atlanta, GA 30328
Attn: Johnathan Short, Senior Vice President and General Counsel
Facsimile: (770) 857-4755
          with a copy to:
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attn: John Evangelakos, Esq.
Facsimile: (212) 558-3588
          If to Stockholders’ Representative, to:
TA Associates, Inc.

82

--------------------------------------------------------------------------------

 

25 Knightsbridge, 2nd Floor
London, England
SW1X 7RZ
Attn: Jonathan W. Meeks
Facsimile: +44 0 20 7823 0201

with a copy to:

Goodwin Procter LLP
New York Times Building
620 Eighth Avenue
New York, NY 10018
Attn: John R. LeClaire, Esq. and
Stuart L. Rosenthal, Esq.
Facsimile: (212) 355-3333
     Section 12.2 Disclosure Schedules. Certain information set forth in the
schedules to this Agreement (the “Schedules”) is included solely for
informational purposes and may not be required to be disclosed pursuant to this
Agreement. The disclosure of any information in the Schedules shall not be
deemed to constitute an acknowledgment that such information is required to be
disclosed in connection with the representations and warranties made by Buyer,
MergerCo or the Company, as applicable, in this Agreement or that such
information is material, nor shall such information be deemed to establish a
standard of materiality, nor shall it be deemed an admission of any liability
of, or concession as to any defense available to, Buyer, the Company or the
Stockholders’ Representative on behalf of the Common Equity Holders, as
applicable. Further, for the avoidance of doubt, the references throughout
Article IV to $1,000,000 worth of liabilities, damages or payments shall in no
event, in and of itself, be deemed a standard for establishing the existence of
a “Material Adverse Effect” as such term is used throughout this Agreement. The
section number headings in the Schedules correspond to the section numbers in
this Agreement. Disclosures included in any Schedule shall be considered to
qualify only the corresponding Section of this Agreement which expressly
indicates that such section is to be qualified by a particular Disclosure
Schedule except to the extent that it is reasonably apparent, given the nature
and content of such disclosure, that the disclosure of such matter is intended
to qualify a further Section of this Agreement which expressly indicates that
such section is to be qualified by a particular Disclosure Schedule.
     Section 12.3 Entire Agreement; No Third Party Beneficiaries. This
Agreement, together with the Schedules and Exhibits hereto, any documents
executed by the parties simultaneously herewith or pursuant hereto and the
Confidentiality Agreement, constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
understandings, written and oral, among the parties with respect to the subject
matter hereof, other than the Confidentiality Agreement (excluding the
provisions of this Agreement), which shall survive the execution of this
Agreement and any termination of this Agreement. Buyer and the Company hereby
agree that their respective representations, warranties and covenants set forth
herein are solely for the benefit of the other party hereto or any other Person
entitled to indemnification (whether pursuant to Section 7.7 or Article IX

83

--------------------------------------------------------------------------------

 

herein), in accordance with and subject to the terms of this Agreement, and this
Agreement (with the exception of Section 7.7 and Article IX) is not intended to,
and does not, confer upon any Person other than the parties hereto any rights or
remedies hereunder, including, without limitation, the right to rely upon the
representations and warranties set forth herein.
     Section 12.4 Assignment. Except as expressly permitted by the terms hereof,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties. Any such assignment which is purported to be made without
such prior written consent shall be null and void.
     Section 12.5 Severability. If any provision of this Agreement, or the
application thereof to any Person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other Persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
     Section 12.6 Interpretation. When a reference is made in this Agreement to
an Article, Section, Schedule or Exhibit, such reference will be to an Article
or Section of, or a Schedule or Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they will be deemed to be followed by
the words “without limitation.” The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. All terms used
herein with initial capital letters have the meanings ascribed to them herein
and all terms defined in this Agreement will have such defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. For
the purposes of this Agreement, “Person” shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity or group (as defined in Section
13(d) of the Exchange Act). References to a Person are also to its permitted
successors and assigns.
     Section 12.7 Fees and Expenses. Except as otherwise expressly provided for
in this Agreement, whether or not the Merger is consummated, each of Buyer (on
behalf of Buyer and MergerCo), on the one hand, and the Company, on the other
hand, shall bear its own expenses in connection with the negotiation and the
consummation of the transactions contemplated by this Agreement.
     Section 12.8 Choice of Law/Consent to Jurisdiction. All disputes, claims or
controversies arising out of or relating to this Agreement, or the negotiation,
validity or performance of this Agreement, or the transactions contemplated
hereby shall be governed by and construed in accordance with the Laws of the
State of New York (or the Laws of the State of Delaware solely with respect to
those matters addressed herein which are, by their nature, governed by the
DGCL), without regard to its rules of conflict of Laws. Each of the Company,
Buyer, MergerCo and the Stockholders’ Representative hereby irrevocably and
unconditionally

84

--------------------------------------------------------------------------------

 

consents to submit to the sole and exclusive jurisdiction of the state or
federal courts of the State of New York located in New York County, New York
(the “Chosen Courts”) for any litigation arising out of or relating to this
Agreement, or the negotiation, validity or performance of this Agreement, or the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in the Chosen Courts and agrees not to plead or
claim in any Chosen Court that such litigation brought therein has been brought
in any inconvenient forum. The parties hereby agree that mailing of process or
other papers in connection with any such action or proceeding in the manner
provided in Section 12.1, or in such other manner as may be permitted by Law,
shall be valid to the fullest extent permitted by applicable Law and sufficient
service thereof and hereby waive any objections to service accomplished in the
manner herein provided.
     Section 12.9 Amendment. This Agreement may be amended by the parties hereto
by an instrument in writing signed on behalf of each of the parties hereto at
any time before or after any approval hereof by the Stockholders of the Company
and MergerCo; provided, however, that after the execution of the Stockholder
Written Consent, no amendment shall be made that by Law requires further
approval by the Stockholders without obtaining the approval of the Stockholders’
Representative.
     Section 12.10 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document delivered pursuant hereto, and
(c) waive compliance by the other party with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of the party against which such waiver or extension is to be
enforced. Waiver of any term or condition of this Agreement by a party shall not
be construed as a waiver of any subsequent breach or waiver of the same term or
condition by such party, or a waiver of any other term or condition of this
Agreement by such party.
     Section 12.11 Conflicts and Privilege. It is acknowledged by each of the
parties hereto that the Stockholders’ Representative has retained Goodwin to act
as its counsel in connection with the transactions contemplated hereby. Buyer
and MergerCo hereby agree that, in the event that a dispute arises after the
Closing between Buyer and its Subsidiaries on the one hand, and the
Stockholders’ Representative and the Common Equity Holders on the other hand,
Goodwin may represent the Stockholders’ Representative and Common Equity Holders
in such dispute even though the interests of the Stockholders’ Representative
and Common Equity Holders may be directly adverse to Buyer, and its
Subsidiaries, and even though Goodwin may have represented the Company or its
Subsidiaries in a matter substantially related to such dispute, or may be
handling ongoing matters for the Surviving Corporation or its Subsidiaries;
provided, however, that the foregoing waiver shall not relieve or excuse Goodwin
from its obligation to keep confidential non-public information of the Company
and its Subsidiaries and to preserve and protect all privileges or the Company
and its Subsidiaries.

85

--------------------------------------------------------------------------------

 

     Section 12.12 Mutual Drafting. The parties hereto are sophisticated and
have been represented by attorneys throughout the transactions contemplated
hereby who have carefully negotiated the provisions hereof. As a consequence,
the parties do not intend that the presumptions of Laws or rules relating to the
interpretation of contracts against the drafter of any particular clause should
be applied to this Agreement or any agreement or instrument executed in
connection herewith, and therefore waive their effects.
     Section 12.13 Specific Performance. The parties hereby acknowledge and
agree that a material breach by any party of its agreements and covenants
hereunder (including, without limitation, the failure of a party to consummate
the transactions contemplated hereby following the satisfaction or waiver of all
applicable conditions to closing, other than those conditions that by their
nature are to be performed at the Closing) will cause irreparable injury to the
other parties, for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party’s obligations and to the granting by any court of the remedy of specific
performance of such party’s obligations hereunder if it established that any
such material breach has occurred.
     Section 12.14 Miscellaneous. This Agreement shall be binding upon and inure
to the benefits of the parties hereto and their respective successors and
assigns and is not intended to confer upon any other Person any rights or
remedies hereunder and may be executed in two or more counterparts which
together shall constitute a single agreement.
[Remainder of page intentionally left blank.]

86

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.

            COMPANY:

CREDITEX GROUP INC.
      By:   /s/ Sunil Hirani         Name:   Sunil Hirani        Title:   Chief
Executive Officer        BUYER:

INTERCONTINENTALEXCHANGE, INC.
      By:   /s/ Scott A. Hill         Name:   Scott A. Hill        Title:  
Senior Vice President & CFO        MERGERCO:

COLUMBIA MERGER CORPORATION
      By:   /s/ Scott A. Hill         Name:   Scott A. Hill        Title:  
President & Treasurer   

 

--------------------------------------------------------------------------------

 

         

            STOCKHOLDERS’ REPRESENTATIVE:

TA ASSOCIATES, INC.
      By:   /s/ Johnathan Meeks         Name:   Johnathan Meeks        Title:  
Managing Director   

 

--------------------------------------------------------------------------------

 

         

ANNEX A
DEFINED TERMS

      Term   Section
280G Stockholder Vote
  Section 7.9(f)
Accounting Referee
  Section 2.5(c)
Accredited Investor
  Section 2.10(b)
Acquisition Transaction
  Section 7.6(a)
Affiliate
  Section 4.12(e)
Aggregate Merger Consideration
  Section 2.1(e)(i)
Aggregate Promissory Note Proceeds
  Section 2.1(e)(ii)
Agreed Claims
  Section 9.6
Agreement
  Preamble
Annual Budget
  Section 6.1(j)
Appraisal Rights Provisions
  Section 3.3(a)
Authorized Group Companies
  Section 7.4(b)(iii)
Benefit Plans
  Section 4.9(a)
Board Recommendation
  Section 7.1(c)
Business Day
  Section 1.4
Buyer
  Preamble
Buyer Indemnified Party
  Section 9.2
Buyer Material Adverse Effect
  Section 5.1
Buyer Reports
  Article V
Buyer Restricted Stock
  Section 2.2(b)
Buyer Stock
  Section 2.1(c)
By-laws
  Section 4.1(a)
Cash Consideration per Share
  Section 2.11(a)
Cash Election
  Section 2.1(c)
Certificate of Incorporation
  Section 4.1(a)
Certificate of Merger
  Section 1.2
Certificates
  Section 3.2(b)
CFTC
  Section 4.19(i)
Chosen Courts
  Section 12.8
Claim
  Section 7.7(b)
Closing
  Section 1.4
Closing Balance Sheet
  Section 2.5(b)
Closing Date
  Section 1.4
Closing Date Stockholders’ Equity
  Section 2.5(b)
Closing Date Stockholders’ Equity Adjustment
  Section 2.5(d)(i)
Closing Price
  Section 2.1(e)(iii)
Code
  Recitals
Common Equity Holder
  Section 10.2
Common Stock
  Section 2.1(c)
Common Stock Certificate
  Section 2.1(c)

 

--------------------------------------------------------------------------------

 

      Term   Section
Common Stock Merger Consideration per Share
  Section 2.1(e)(iv)
Company
  Preamble
Company Board
  Recitals
Company’s Financial Statements
  Section 4.5(a)
Company Intellectual Property
  Section 4.13(j)(i)
Company Licensed Software
  Section 4.14(e)(i)
Company Material Adverse Effect
  Section 4.1(a)
Company Non-U.S. Plans
  Section 4.9(a)
Company Options
  Section 2.2(a)(i)
Company Plans
  Section 4.9(a)
Company Proprietary Software
  Section 4.14(e)(ii)
Company Restricted Stock
  Section 2.2(b)
Company Software
  Section 4.14(e)(iii)
Company Stock
  Section 2.1(e)(v)
Company Transaction Expenses
  Section 2.4
Confidential Information
  Section 4.13(j)(ii)
Confidentiality Agreement
  Section 7.3
Contract
  Section 4.4(a)
Conversion Ratio
  Section 2.1(d)
Convertible Preferred Stock
  Section 2.1(d)
Convertible Preferred Stock Certificate
  Section 2.1(d)
Credit Derivatives Industry Group
  Section 8.2(f)(iii)
D&O Tail Policy
  Section 7.7(c)
Deductible
  Section 9.4(a)(i)
Demand Date
  Section 3.3(a)
DGCL
  Recitals
Disqualified Individual
  Section 7.9(f)
Dissenting Shares
  Section 3.3(a)
DOJ
  Section 7.4(b)(i)
Effective Time
  Section 1.2
Electing Employee Stockholder
  Section 2.11(a)
Election Deadline
  Section 3.1(b)
Encumbrance
  Section 4.10(c)
Environment
  Section 4.15(d)(i)
Environmental Laws
  Section 4.15(d)(ii)
ERISA
  Section 4.9(a)
ERISA Affiliate
  Section 4.9(a)
Escrow Agent
  Section 2.7
Escrow Agreement
  Section 2.7
Escrow Cash
  Section 2.7(ii)
Escrow Funds
  Section 2.7
Escrow Funds per Share
  Section 2.1(e)(vi)
Escrow Shares
  Section 2.7(i)
Estimated Closing Balance Sheet
  Section 2.5(a)
Estimated Closing Date Stockholders’ Equity
  Section 2.5(a)
Estimated Reference Date Balance Sheet
  Section 2.1(e)(vii)

 

--------------------------------------------------------------------------------

 

      Term   Section
Estimated Reference Date Cash Amount
  Section 2.1(e)(viii)
Estimated Reference Date Stockholders’ Equity
  Section 2.1(e)(ix)
Estimated Stockholders’ Equity Adjustment
  Section 2.1(e)(x)
Exchange Act
  Article V
Exchange Agent
  Section 3.2(a)
Exchange Fund
  Section 3.2(a)
Expense Amount
  Section 2.6
Final Cash Adjustment
  Section 2.5(d)(ii)
Final Closing Adjustment
  Section 2.5(d)(iii)
Final Stockholders’ Equity Adjustment
  Section 2.5(d)(iv)
FINRA
  Section 4.4(b)
Forfeited Shares
  Section 2.2(b)
Form of Election
  Section 3.1(a)
FSA
  Section 7.4(b)(iii)
FSMA
  Section 7.4(b)(iii)
FTC
  Section 7.4(b)(i)
Fully Diluted Shares Outstanding
  Section 2.1(e)(xi)
GAAP
  Section 2.1(e)(xii)
Goodwin
  Section 1.4
Governmental Body
  Section 4.4(b)
Governmental Permits
  Section 4.19(a)
Hazardous Material
  Section 4.15(d)(iii)
HSR Act
  Section 4.4(b)
Indebtedness for Borrowed Money
  Section 2.1(e)(xiii)
Indemnification Cut-Off Date
  Section 9.4(a)(iv)
Indemnified Party
  Section 9.5(a)
Indemnifying Parties
  Section 9.5(a)
Indemnifying Party
  Section 9.5(a)
Indemnity Claim
  Section 11.1
Information Statement
  Section 7.1(b)
Insurance Policies
  Section 4.16
Intellectual Property
  Section 4.13(j)(iii)
Intellectual Property Licenses
  Section 4.13(j)(iv)
Intellectual Property License Out
  Section 4.13(j)(iv)
IRS
  Section 4.8(a)(iv)
Knowledge of the Company
  Section 4.24(c)
Latest Audited Balance Sheet
  Section 4.5(a)(i)
Laws
  Section 4.18
Lease
  Section 4.10(b)
Leased Real Property
  Section 4.10(b)
Leases
  Section 4.10(b)
Losses
  Section 9.1
LTIP Awards
  Section 4.2(a)
Material Contracts
  Section 4.12
Maximum Cash Consideration
  Section 2.11(b)
Merger
  Recitals

 

--------------------------------------------------------------------------------

 

      Term   Section
Merger Consideration
  Section 2.1(e)(xiv)
MergerCo
  Preamble
Net Merger Consideration
  Section 2.1(e)(xv)
New Option
  Section 2.2(a)(ii)
Nominal Net Merger Consideration
  Section 2.1(e)(xvi)
Non-Accredited Investor
  Section 2.10(b)
OFAC
  Section 4.22
Option Exchange Consideration
  Section 2.1(e)(xvii)
Optionholders
  Section 2.2(a)(i)
Oversubscription Amount
  Section 2.11(b)
Patents
  Section 4.13(j)(iii)
Pension Plan
  Section 4.9(a)
Permitted Lien
  Section 4.10(c)
Person
  Section 12.6
Post-Closing Tax Period
  Section 7.9(a)(ii)
Pre-Closing Period
  Section 6.1
Pre-Closing Tax Period
  Section 7.9(a)(i)
Preferred Stock Merger Consideration per Share
  Section 2.1(d)
Premium Limit
  Section 7.7(c)
Pro Rata Portion
  Section 2.1(e)(xviii)
Q-Wixx LTIP Awards
  Section 2.2(c)
Reference Date Balance Sheet
  Section 2.5(b)
Reference Date Stockholders’ Equity
  Section 2.5(b)
Registered Intellectual Property
  Section 4.13(j)(v)
Regulatory Requirements
  Section 4.19(b)(iii)
Required Stockholder Approval
  Section 4.1(b)
Review Period
  Section 2.5(b)
Release
  Section 4.15(d)(iv)
Released Escrow Consideration
  Section 2.7
Restricted Cash
  Section 2.1(e)(xix)
Sarbanes-Oxley Act
  Section 5.7
Schedules
  Section 12.2
SEC
  Section 4.4(b)
Securities Act
  Section 2.10(a)
Self-Regulatory Organization
  Section 4.4(b)
Series A Convertible Preferred Stock
  Section 2.1(d)
Series C Convertible Preferred Stock
  Section 2.1(d)
Series D Convertible Preferred Stock
  Section 2.1(d)
Software
  Section 4.14(e)(iv)
Specified Indemnified Parties
  Section 7.7(a)
Stock Plan
  Section 2.1(e)(xxi)
Stockholder
  Section 2.1
Stockholder Indemnified Party
  Section 9.3
Stockholder Written Consent
  Recitals
Stockholders
  Section 2.1
Stockholders’ Equity
  Section 2.1(e)(xx)

 

--------------------------------------------------------------------------------

 

      Term   Section
Stockholders’ Representative
  Preamble
Stockholders’ Representative Expense Fund
  Section 2.6
Straddle Tax Period
  Section 7.9(a)(i)
Subsidiary
  Section 2.1(e)(xxii)
Surviving Corporation
  Section 1.1
Tax Representation Letter
  Section 7.9(e)
Tax Returns
  Section 4.8(b)(iii)
Taxes
  Section 4.8(b)(i)
Taxing Authority
  Section 4.8(b)(ii)
Tax Contest
  Section 7.9(a)(iv)
Termination Date
  Section 10.1(b)(ii)
Third Party Claim
  Section 9.5(a)
Threshold
  Section 9.4(a)(v)
Transfer Taxes
  Section 7.9(c)
True-up Statement
  Section 2.5(b)
T-Zero LTIP Awards
  Section 2.2(c)
Unvested Company Option
  Section 2.2(a)(i)
Vested Company Option
  Section 2.2(a)(i)
Vested Optionholder
  Section 2.2(a)(i)