EXECUTION COPY
 
Agreement and Plan of Merger
dated as of July 21, 2009
among
Energy Conversion Devices, Inc.
SIT Acquisition Co.
and
Solar Integrated Technologies, Inc.
 

 

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Table of Contents

              Page
ARTICLE 1 DEFINITIONS
    1  
 
       
ARTICLE 2 THE MERGER
    10  
 
       
SECTION 2.1.   The Merger
    10  
SECTION 2.2.   Effects of the Merger
    10  
SECTION 2.3.   Closing
    10  
SECTION 2.4.   Consummation of the Merger
    10  
SECTION 2.5.   Organizational Documents; Directors and Officers
    10  
 
       
ARTICLE 3 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
    11  
 
       
SECTION 3.1.   Conversion of Merger Sub Capital Stock
    11  
SECTION 3.2.   Conversion of Company Common Stock
    11  
SECTION 3.3.   Exchange of Certificates
    12  
SECTION 3.4.   Company Options
    14  
SECTION 3.5.   Warrants
    14  
SECTION 3.6.   Further Action
    14  
SECTION 3.7.   Adjustments to Prevent Dilution
    14  
 
       
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    15  
 
       
SECTION 4.1.   Organization
    15  
SECTION 4.2.   Capitalization
    15  
SECTION 4.3.   Authorization; No Conflict
    17  
SECTION 4.4.   Subsidiaries
    18  
SECTION 4.5.   Financial Statements
    19  
SECTION 4.6.   Absence of Undisclosed Liabilities
    19  
SECTION 4.7.   No Material Changes
    20  
SECTION 4.8.   Litigation
    20  
SECTION 4.9.   Broker’s or Finder’s Fees; Opinion of Company Financial Advisor
    20  
SECTION 4.10. Employee Plans
    21  
SECTION 4.11. Warranties
    23  
SECTION 4.12. Taxes
    24  
SECTION 4.13. Environmental Matters
    25  
SECTION 4.14. Compliance with Laws
    26  
SECTION 4.15. Intellectual Property
    27  
SECTION 4.16. Material Contracts
    30  
SECTION 4.17. Employment Matters
    32  

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SECTION 4.18. Real Property
    34  
SECTION 4.19. Insurance
    35  
SECTION 4.20. Affiliate Transactions
    35  
SECTION 4.21. Takeover Statutes
    35  
SECTION 4.22. Assets
    36  
SECTION 4.23. Foreign Corrupt Practices Act
    36  
SECTION 4.24  Customers and Suppliers
    36  
SECTION 4.25  Disclosure
    36  
 
       
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
    37  
 
       
SECTION 5.1.   Organization
    37  
SECTION 5.2.   Merger Sub
    37  
SECTION 5.3.   Authorization; No Conflict
    37  
SECTION 5.4.   Available Funds
    38  
 
       
ARTICLE 6 CONDUCT OF BUSINESS PENDING THE MERGER
    38  
 
       
SECTION 6.1.   Conduct of Business by the Company Pending the Merger
    38  
 
       
ARTICLE 7 ADDITIONAL AGREEMENTS
    42  
 
       
SECTION 7.1.   Preparation of Proxy Circular; Stockholders Meeting
    42  
SECTION 7.2.   Public Statements
    43  
SECTION 7.3.   Standard of Efforts
    43  
SECTION 7.4.   Notification of Certain Matters
    44  
SECTION 7.5.   Access to Information; Confidentiality
    44  
SECTION 7.6.   No Solicitation
    45  
SECTION 7.7.   Indemnification and Insurance; Employment Agreements
    47  
SECTION 7.8.   Stockholder Litigation
    48  
SECTION 7.9.   De-listing of Company Common Stock
    48  
SECTION 7.10. Merger Sub Compliance
    48  
 
       
ARTICLE 8 CONDITIONS
    48  
 
       
SECTION 8.1.   Conditions to Each Party’s Obligation To Effect the Merger
    48  
SECTION 8.2.   Conditions to Obligations of Parent and Merger Sub
    49  
SECTION 8.3.   Conditions to Obligation of the Company
    50  
 
       
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER
    51  
 
       
SECTION 9.1.   Termination
    51  
SECTION 9.2.   Effect of Termination
    53  
SECTION 9.3.   Fees and Expenses
    53  
SECTION 9.4.   Amendment
    54  
SECTION 9.5.   Waiver
    55  
 
       
ARTICLE 10 GENERAL PROVISIONS
    55  
 
       
SECTION 10.1. Notices
    55  

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SECTION 10.2.   Representations and Warranties
    56  
SECTION 10.3.   Knowledge Qualifiers
    56  
SECTION 10.4.   Interpretations
    56  
SECTION 10.5.   Governing Law; Jurisdiction
    56  
SECTION 10.6.   Counterparts; Facsimile Transmission of Signatures
    57  
SECTION 10.7.   Assignment; No Third Party Beneficiaries
    57  
SECTION 10.8.   Severability
    57  
SECTION 10.9.   Entire Agreement
    58  
SECTION 10.10. Enforcement
    58  

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Agreement and Plan of Merger (this “Agreement”), dated as of July 21, 2009,
among Energy Conversion Devices, Inc., a Delaware corporation (“Parent”), SIT
Acquisition Co., a Delaware corporation and wholly-owned subsidiary of Parent
(“Merger Sub”), and Solar Integrated Technologies, Inc., a Delaware corporation
(the “Company”).
Introduction
          The respective Boards of Directors of Parent, Merger Sub and the
Company have unanimously approved the acquisition of the Company by Parent on
the terms and subject to the conditions set forth in this Agreement.
          In furtherance of such acquisition, the respective Boards of Directors
of Parent, Merger Sub and the Company have approved and declared advisable the
merger (the “Merger”) of Merger Sub into the Company, on the terms and subject
to the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $0.0001 per share, of the Company
(the “Company Common Stock”) not owned by Parent, Merger Sub or the Company as
of the Effective Time shall be converted into the right to receive the Merger
Consideration.
          Concurrently with the execution of this Agreement and as an inducement
to and condition of Parent’s willingness to enter into this Agreement, each of
the stockholders of the Company listed on Schedule I is entering into a Voting
Agreement, dated as of the date hereof (the “Voting Agreement”), the form of
which is attached as Exhibit A, pursuant to which, among other things, each such
stockholder agrees to vote its shares of Company Common Stock in favor of this
Agreement, the Merger and the other transactions contemplated by this Agreement.
          In consideration of the foregoing and of the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
agree as follows:
ARTICLE 1
DEFINITIONS
          SECTION 1.1. Definitions.
          (a) As used in this Agreement, the following terms have the respective
meanings set forth below:
          “Affiliate” means, as to any Person, any other Person that, directly
or indirectly, controls, or is controlled by, or is under common control with,
such Person. For this purpose, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through the ownership
of securities or partnership or other ownership interests, by contract or
otherwise.
          “AIM” means AIM, the market of that name operated by the London Stock
Exchange.

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          “AIM Rules for Companies” means the AIM Rules for Companies
(including, without limitation, any guidance or notes or statements of practice)
published by the London Stock Exchange which govern the rules and
responsibilities of companies whose shares are admitted to trading on AIM, as
amended from time to time.
          “Business Day” means any day other than Saturday, Sunday or any day on
which commercial banks in New York, New York are authorized or required to
close.
          “Code” means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
          “Company Board” means the Board of Directors of the Company.
          “Company Charter Documents” means the Amended and Restated Certificate
of Incorporation and the Amended and Restated By-laws of the Company.
          “Company Employee Benefit Plan” means any plan, program, policy,
practice, agreement or arrangement that is not required by Law and provides
compensation or benefits in any form to any current or former employee, officer,
director, independent contractor or consultant of the Company or any of the
Company Subsidiaries (or any ERISA Affiliate of the Company or a Company
Subsidiary) or any beneficiary or dependent thereof, whether written or
unwritten, formal or informal, including any other pension, profit-sharing,
bonus, incentive compensation, deferred compensation, vacation, sick pay, stock
purchase, stock option, phantom equity, severance, employment, consulting,
independent contractor, unemployment, hospitalization or other medical, dental,
vision, life, or other insurance, long- or short-term disability, change of
control, fringe benefit, cafeteria plan or any other plan, program, policy,
agreement or arrangement.
          “Company Financial Advisor” means Thomas Weisel Partners LLC.
          “Company Intellectual Property” means all Intellectual Property owned
by or licensed to the Company or any Company Subsidiary.
          “Company Material Adverse Effect” means (a) any event, condition,
change or occurrence that, individually or in the aggregate with all other
events, conditions, changes, occurrences or developments of a state of facts, is
materially adverse to (i) the business, operations, properties, assets,
liabilities (contingent or otherwise), long-term condition (financial or
otherwise) or results of operations of the Company and the Company Subsidiaries
considered as a single enterprise or (ii) the ability of the Company to perform
its obligations under this Agreement in compliance with its terms or to
consummate the Transactions or (b) the Company’s incurrence, after the date
hereof, of liabilities that in the aggregate are greater than $2,000,000
(excluding liabilities knowingly incurred by the Company from actions that are
permitted by Section 6.1(b)) and that the Company would be required under GAAP
to record on its balance sheet because it is “probable” and its amount is
“reasonably estimable” (in each within the meaning of Statement of Financial
Accounting Standards No. 5); provided, however, that no such event, condition,
change, occurrence or liability that is caused by any of the following shall be
deemed in and of itself, either alone or in combination, to constitute, and no
such event, condition, change, occurrence or liability shall be considered in
determining whether

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there is a Company Material Adverse Effect: (A) changes in any applicable Law or
GAAP, (B) natural disasters or acts of terrorism or war occurring after the date
hereof (and in each case to the extent that such acts do not have a materially
disproportionate effect on the Company and the Company Subsidiaries, considered
as a single enterprise), (C) changes or developments in financial, credit or
securities markets, general economic or business conditions, or political or
regulatory conditions, in each case globally or in the United States, United
Kingdom or Europe (and in each case to the extent that such changes or
developments do not have a materially disproportionate effect on the Company and
the Company Subsidiaries, considered as a single enterprise), (D) changes
affecting any of the industries in which the Company and the Company
Subsidiaries operate (and in each case to the extent that such changes do not
have a materially disproportionate effect on the Company and the Company
Subsidiaries, considered as a single enterprise), (E) any change in the market
price or trading volume of the Company Common Stock, in and of itself (it being
understood that any event, condition, change or occurrence that may have caused
or contributed to any such change may be deemed to constitute, in and of itself,
a Company Material Adverse Effect and may be taken into consideration when
determining whether a Company Material Adverse Effect has occurred, except to
the extent such event, condition, change or occurrence is within the scope of
any other clause of this proviso), (F) any cancellations of or delays in
customer orders, any reduction in sales, any disruption in (or loss of)
supplier, distributor, partner or similar relationships or any loss of employees
or any claims made or any litigation filed or announced that challenges any of
the Transactions or any actions taken by the Board or the Company in connection
therewith, in each case that is caused by the pendency or announcement of the
Transactions (provided, however, that any direct legal or contractual
consequence of the execution of this Agreement or the consummation of the
Transactions existing as of the date hereof that has not been disclosed to
Parent in this Agreement or the Company Disclosure Letter shall not be excluded
under this clause (F)), (G) the taking by the Company of any action expressly
required by this Agreement, (H) the forbearance by the Company from any taking
any action expressly prohibited by this Agreement, (I) any failure of the
Company to meet, with respect to any period or periods, any internal or industry
analyst projections, forecasts, estimates of earnings or revenues, or business
plans (it being understood that any event, condition, change or occurrence that
may have caused or contributed to any such failure may be deemed to constitute,
in and of itself, a Company Material Adverse Effect and may be taken into
consideration when determining whether a Company Material Adverse Effect has
occurred, except to the extent such event, condition, change or occurrence is
within the scope of any other clause of this proviso), or (J) or any of the
specific events or circumstances described on Schedule II.
          “Company Subsidiaries” means the Subsidiaries of the Company.
          “Confidentiality Agreement” means the confidentiality letter
agreement, dated November 3, 2008, between Parent and the Company.
          “Constituent Corporations” means, collectively, the Company and Merger
Sub.
          “Contract” means any loan or credit agreement, debenture, note, bond,
mortgage, indenture, deed of trust, license, lease, contract, purchase order or
other agreement, instrument or obligation, excluding in each case any of the
foregoing that have been terminated or fully performed.

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          “Convertible Notes” means the $8 million of 6.5% Convertible Notes Due
November 1, 2010, issued by the Company pursuant to the Note Purchase Agreement,
dated as of November 4, 2005, by and among, inter alia, the Company and Goldman
Sachs International, as amended by the First Amendment to Note Purchase
Agreement, dated as of December 20, 2007.
          “Copyrights” means (i) all copyrights (including copyrights in any
package inserts, marketing or promotional materials, labeling information or
other text provided to consumers), whether registered or unregistered throughout
the world, (ii) any registrations and applications therefor, (iii) all rights
and priorities with respect to the foregoing afforded under any international
treaty, convention, or the like, (iv) all extensions and renewals of any of the
foregoing, and (v) any rights similar to the foregoing in any country, including
moral rights.
          “DGCL” means the Delaware General Corporation Law.
          “Environmental Laws” means any federal, foreign, state or local
statute, law, code, or legal requirement, including regulations, rules, orders,
judgments, judicial decisions, permits, licenses, approvals, ordinances,
injunctions, directives and the common law, pertaining or relating to pollution,
the environment, natural resources, the protection of the environment, or human
health and safety, including any of the foregoing pertaining to (i) the
presence, receipt, manufacture, processing, generation, use, distribution,
transport, shipment, treatment, handling, storage, disposal, removal or
remediation of any Hazardous Substance, (ii) air, water (including ground,
surface and drinking water), land surface or subsurface strata, sediment, noise,
or odor pollution, (iii) the release or threatened release into the environment
of any Hazardous Substance, including emissions, discharges, injections, spills,
escapes, dumping or leaching of any Hazardous Substance, (iv) the protection of
natural resources, including wildlife, marine sanctuaries, wetlands and all
endangered and threatened species, (v) storage tanks, vessels and containers
whether above- or underground, abandoned, disposed or discarded barrels,
containers and other closed receptacles, or (vi) the protection of humans from
harmful exposure to environmental hazards.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
          “Expenses” means all out-of-pocket fees and expenses (including all
fees and expenses of counsel, accountants, financial advisors and investment
bankers) incurred by Parent or on its behalf in connection with or related to
the authorization, preparation, negotiation, execution and performance of this
Agreement, the Voting Agreement and the Transactions.
          “GAAP” means United States generally accepted accounting principles.
          “Governmental Authority” means any Federal, state, local or foreign
governmental or regulatory (including the London Stock Exchange and any other
stock exchange) authority.

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          “Hazardous Substance” means, whether alone or in combination and
whether solid, liquid or gaseous, (i) any “hazardous substance,” as defined by
the Comprehensive Environmental Response, Compensation, and Liability Act,
(ii) any “hazardous waste,” as defined by the Resource Conservation and Recovery
Act, and (iii) any chemical, pollutant, contaminant, waste, or hazardous,
dangerous or toxic material or substance, special waste, mutagenic or
carcinogenic material or substance, or terms of similar import including
asbestos and asbestos containing material, buried contaminants, regulated
chemicals, flammable explosives, radiation and radioactive materials,
polychlorinated biphenyls, oil, petroleum and petroleum products and
by-products, lead and lead-based paint, pesticides, natural or synthetic gas,
nuclear fuel, nuclear material, urea formaldehyde, bacteria, fungi, mold or any
material subject to regulation, investigation, control or remediation under any
applicable Law or could give rise to liability or an obligation to remediate
under any Law, all as amended or hereafter amended.
          “Intellectual Property” means Trademarks, Internet Property, Software,
Copyrights, Patents, Know-How and Trade Secrets.
          “Internet Property” means all URLs, internet protocol addresses and
corresponding domain names, including all registrations and applications
therefor.
          “Know-How” means any proprietary or nonproprietary information related
to the manufacture, preparation, development, or commercialization of a product,
including data, product specifications, processes, product designs, plans,
inventions, formulae, physical, analytical, stability, safety, quality
assurance, quality control information, technical information, research
information, and all other confidential or proprietary technical and business
information, whether or not embodied in any documentation or other tangible
materials.
          “Lien” means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
          “London Stock Exchange” means London Stock Exchange plc.
          “Non-Owned Company Intellectual Property” means Company Intellectual
Property licensed to the Company or any Company Subsidiary or in which the
Company or any Company Subsidiary otherwise possesses sufficient legal
enforceable rights to use, but not including Owned Company Intellectual
Property.
          “Option Consideration” means, with respect to any share of Company
Common Stock issuable under a particular Option, an amount equal to (i) the
Merger Consideration per share of Company Common Stock less (ii) the exercise
price payable in respect of each share of Company Common Stock issuable under
such Option.
          “Options” means any option granted, and, immediately before the
Effective Time not exercised, expired or terminated, to a current or former
employee, director or independent contractor of the Company or any of the
Company Subsidiaries or any former Subsidiary of the Company or predecessor
thereof to purchase shares of Company Common Stock pursuant to the Stock Plans.

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          “OTS Software License” means a license for off-the-shelf personal
computer software that is commercially available under non-discriminatory
pricing terms on a retail basis.
          “Owned Company Intellectual Property” means Company Intellectual
Property in which the Company or any Company Subsidiary has or purports to have
an ownership interest.
          “Parent Material Adverse Effect” means a material adverse effect on
the ability of either Parent or Merger Sub to perform its obligations under this
Agreement or to consummate the Merger and the other Transactions.
          “Patents” means (i) all national, regional and international patents
and patent applications, including provisional patent applications, (ii) all
patent applications filed either from such patents, patent applications or
provisional applications or from an application claiming priority from either of
these, including divisionals, continuations, continuations-in-part,
substitutions, provisionals, converted provisionals, and continued prosecution
applications, (iii) any and all patents that have issued or in the future issue
from the foregoing patent applications described in clauses (i) and (ii),
including utility models, petty patents and design patents and certificates of
invention, and (iv) any and all extensions or restorations by existing or future
extension or restoration mechanisms, including revalidations, reissues,
re-examinations and extensions (including any supplementary protection
certificates and the like) of the foregoing patents or patent applications
described in clauses (i), (ii) and (iii).
          “Permitted Lien” means (i) Liens for Taxes, assessments or similar
charges incurred in the ordinary course of business that are not yet due and
payable or the amount of which is being contested in good faith, (ii) deposits
made in the ordinary course of business, (iii) Liens of mechanics, materialmen,
warehousemen or similar Liens securing obligations incurred in the ordinary
course of business that are not yet due and payable, (iv) purchase money Liens
and Liens securing rental payments under capital lease arrangements or similar
Liens securing obligations incurred in the ordinary course of business that are
not yet due and payable, and (v) Liens and encumbrances which are incurred in
the ordinary course of business and which do not in the aggregate materially
detract from the value of the related assets or properties or materially impair
the use thereof in the operation of such business.
          “Person” means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization, limited liability company or
other entity.
          “Section 262” means Section 262 of the DGCL.
          “Software” means computer software programs, including all source
code, object code, specifications, databases, screen designs and documentation
related to such programs.
          “Stock Plans” means the Company’s 2004 Amended and Restated Stock
Option Plan, as amended.
          “Subsidiary” means, with respect to any Person, another Person, an
amount of the voting securities or other voting ownership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.

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          “Subsidiary Documents” means the certificate of incorporation and
by-laws (or comparable organizational documents) of each of the Company
Subsidiaries.
          “Superior Proposal” means any bona fide written offer obtained after
the date hereof and not in breach of this Agreement to acquire, in exchange for
cash, stock or other property, directly or indirectly, more than 50% of the
outstanding voting equity securities of the Company (by purchase, merger,
consolidation or otherwise) or all or substantially all of the assets of the
Company and the Company Subsidiaries on a consolidated basis, and is on terms
that the Company Board determines in its good faith judgment (after consultation
with outside counsel and receiving the advice of the Company Financial Advisor
or another financial advisor of nationally recognized reputation), taking into
account all relevant factors, (i) would, if consummated, result in a transaction
that is more favorable to the holders of Company Common Stock from a financial
point of view than the Transactions (including the terms of any proposal by
Parent to modify the terms of the Transactions) because the value of the
consideration provided to the holders of the Company Common Stock in such offer
is superior to the consideration provided to the holders of the Company Common
Stock in the Transactions (including the terms of any proposal by Parent to
modify the terms of the Transactions) and (ii) is reasonably capable of being
completed on the terms proposed.
          “Surviving Corporation” means the corporation surviving the Merger
after the Effective Time.
          “Takeover Proposal” means any inquiry, proposal or offer from any
Person (other than Parent, Merger Sub or any of their Affiliates) or “group” (as
defined in Section 13(d) of the Exchange Act) relating to (i) the direct or
indirect acquisition (including by way of a license) (whether in a single
transaction or a series of related transactions) of assets of the Company and
the Company Subsidiaries (including securities of Company Subsidiaries) equal to
15% or more of the Company’s consolidated assets or to which 15% or more of the
Company’s revenues or earnings on a consolidated basis are attributable,
(ii) the direct or indirect acquisition (whether in a single transaction or a
series of related transactions) of 15% or more of any class of equity securities
of the Company, (iii) a tender offer or exchange offer that if consummated would
result in any Person or “group” (as defined in Section 13(d) of the Exchange
Act) beneficially owning 15% or more of any class of equity securities of the
Company, or (iv) a merger, consolidation, share exchange, business combination,
liquidation, dissolution, restructuring, recapitalization, reorganization or
similar transaction involving the Company or any of the Company Subsidiaries, in
each case, other than the Transactions.
          “Tax Return” means any report, return, statement, declaration or other
written information required to be supplied to a taxing or other Governmental
Authority in connection with Taxes.
          “Taxes” means all taxes, levies or other like assessments, charges or
fees (including estimated taxes, charges and fees), including income, franchise,
profits, corporations, advance corporation, gross receipts, transfer, excise,
property, sales, use value-added, ad valorem, license, capital, wage,
employment, payroll, withholding, social security, severance, occupation,
import, custom, stamp, alternative, add-on minimum, environmental or other
governmental taxes or charges, imposed by the United States or any state,
county, local or

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foreign government or subdivision or agency thereof, including any interest,
penalties or additions to tax applicable or related thereto.
          “Trade Secrets” means trade secrets (as defined in the Uniform Trade
Secrets Act and under corresponding foreign statutory and common law), Know-How,
business and technical information, other non-public information and
confidential information and rights to limit the use or disclosure thereof by
any Person.
          “Trademark” means (i) all trademarks, trade names, trade dress,
service marks, logos, trade styles, certification marks, collective marks,
designs, industrial designs and other identifiers of source and all other
general intangibles of a like nature, whether registered or unregistered, (ii)
all registrations and applications for any of the foregoing, (iii) all
extensions or renewals of any of the foregoing, (iv) all of the goodwill
connected with the use of and symbolized by the foregoing, (v) all rights and
priorities afforded under the United States “common law,” under the “common law”
of any other country or jurisdiction, or under any international treaty,
convention, or the like, and (vii) any rights similar to the foregoing in any
country.
          “Transactions” means the Merger and the other transactions
contemplated by this Agreement.
          “WARN Act” means the Worker Adjustment and Retraining Notification Act
of 1988, as amended, and any similar provision of state law that applies to the
Company or the Company Subsidiaries.
          “Warrant” means a Common Stock Purchase Warrant issued by the Company
pursuant to (i) the Warrant issued December 20, 2006, to Mirabaud Securities
Limited, (ii) the Warrant issued December 20, 2006, to KBC Peel Hunt Ltd,
(iii) the Warrant issued December 20, 2006 (as amended), to Wind City, Inc.,
(iv) the Warrant issued December 30, 2005 (as amended), to General Electric
Capital Corporation and (v) the Warrant issued May 7, 2004, to KBC Peel Hunt
Ltd.
          (b) The following terms are defined in the following sections of this
Agreement:

          Term   Section
Agreement
  Preamble
AIM Enforcement Procedure
    4.14 (b)
Appraisal Shares
    3.2 (c)
Balance Sheet Date
    4.5 (a)
Bankruptcy and Equity Exception
    4.3 (a)
Certificate of Merger
    2.4  
Certificates
    3.3 (b)
Closing
    2.3  
Closing Date
    2.3  
Company
  Preamble
Company Adverse Recommendation Change
    7.6 (c)

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          Term   Section
Company Common Stock
  Introduction
Company Disclosure Letter
    4  
Company ERISA Affiliates
    4.10 (a)
Company Financial Statements
    4.5 (a)
Company Recommendation
    7.1 (b)
Company Stockholders Meeting
    7.1 (b)
D&O Insurance
    7.7 (b)
Effective Date
    2.4  
Effective Time
    2.4  
Environmental Permits
    4.13 (a)
Exchange Fund
    3.3 (a)
Indemnified Party
    7.7 (a)
Interim Balance Sheet
    4.5 (a)
Interim Financial Statements
    4.5 (a)
Judgment
    4.3 (c)
Law
    4.3 (c)
Lease
    4.16 (a)(v)
Leased Real Property
    4.18 (b)
Material Contract
    4.16 (a)
Maximum Amount
    7.7 (b)
Merger
  Introduction
Merger Consideration
    3.2 (a)
Merger Sub
  Preamble
Outside Date
    9.1 (b)
Owned Software
    4.15 (k)
Parent
  Preamble
Paying Agent
    3.3 (a)
Permits
    4.1 (a)
Proceedings
    4.8 (a)
Proxy Circular
    7.1 (a)
Representatives
    7.6 (a)
Required Company Stockholder Vote
    4.3 (a)
Superior Proposal Notice
    9.1 (h)
Termination Fee
    9.3 (b)
Third Party Beneficiaries
    10.7 (b)
UK Laws
    4.3 (e)
Voting Agreement
  Introduction

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ARTICLE 2
THE MERGER
          SECTION 2.1. The Merger. At the Effective Time, in accordance with
this Agreement and the DGCL, Merger Sub shall be merged with and into the
Company, the separate existence of Merger Sub shall cease, and the Company shall
continue as the surviving corporation.
          SECTION 2.2. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
          SECTION 2.3. Closing. The closing of the Merger (the “Closing”) shall
take place at 10:00 a.m. (East Coast time) on a date to be specified by the
parties, which shall be no later than the second Business Day after satisfaction
or (to the extent permitted by applicable Law) waiver of the conditions set
forth in Article 8 (other than any such conditions which by their nature cannot
be satisfied until the Closing Date, which shall be required to be so satisfied
or (to the extent permitted by applicable Law) waived on the Closing Date), at
the offices of Covington & Burling LLP, 1201 Pennsylvania Avenue, N.W.,
Washington, DC 20004, unless another time, date or place is agreed to in writing
by the parties hereto (such date upon which the Closing occurs, the “Closing
Date”).
          SECTION 2.4. Consummation of the Merger. As soon as practicable after
the Closing, the parties hereto shall cause the Merger to be consummated by
filing with the Secretary of State of the State of Delaware a certificate of
merger or other appropriate documents (in any such case, the “Certificate of
Merger”) in such form as required by, and executed in accordance with, the
relevant provisions of the DGCL and shall make all other filings or recordings
required under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with such Secretary of State, or at such
later time as Parent and the Company shall agree and specify in the Certificate
of Merger (the time and date the Merger becomes effective being the “Effective
Time” and “Effective Date,” respectively).
          SECTION 2.5. Organizational Documents; Directors and Officers.
          (a) The certificate of incorporation of the Surviving Corporation
shall be amended at the Effective Time to be in the form of the certificate of
incorporation of Merger Sub in effect immediately prior to the Effective Time
and, as so amended, shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided therein and under the DGCL,
except that the name of the Surviving Corporation may be changed to a name to be
specified by Parent. The By-laws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided therein and under the DGCL. The directors of
Merger Sub immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall serve until the earlier of
their resignation, removal or death or their respective successors are duly
elected or appointed and qualified, as the case may be. The officers of Merger
Sub immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation and shall serve until the earlier of their resignation,
removal or death or until their respective successors have been duly elected or
appointed and qualified, as the case may be.

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          (b) If requested by Parent prior to the Effective Time, the Company
shall use its reasonable best efforts to cause the directors of each of the
Company Subsidiaries (or certain of the Company Subsidiaries as indicated by
Parent) to tender their resignations as directors, effective as of the Effective
Time and to deliver to Parent written evidence of such resignations at or prior
to the Effective Time.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
          SECTION 3.1. Conversion of Merger Sub Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of Parent,
Merger Sub or the Company, each share of Merger Sub capital stock will be
converted into and become one fully paid and nonassessable share of common
stock, par value $0.0001 per share, of the Surviving Corporation.
          SECTION 3.2. Conversion of Company Common Stock At the Effective Time,
by virtue of the Merger and without any action on the part of Parent, Merger
Sub, the Company or any holder of shares of Company Common Stock:
          (a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than (i) any shares to be
canceled pursuant to Section 3.2(b) and (ii) any Appraisal Shares) shall be
canceled and shall be converted automatically into the right to receive 6.75
pence in cash (the “Merger Consideration”). As of the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration upon surrender of such certificate in accordance with Section 3.3,
without interest.
          (b) Each share of Company Common Stock held in the treasury of the
Company and each share of Company Common Stock owned by Merger Sub, Parent or
any wholly-owned Subsidiary of Parent or of the Company immediately prior to the
Effective Time shall be canceled without any conversion thereof and no payment
or distribution shall be made with respect thereto.
          (c) Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock that are outstanding immediately
prior to the Effective Time and that are held by any Person who is entitled to
demand and properly demands appraisal of such shares (“Appraisal Shares”)
pursuant to, and who complies in all respects with, Section 262 shall not be
converted into the right to receive Merger Consideration as provided in
Section 3.2(a), but rather the holders of Appraisal Shares shall be entitled to
payment of the fair value of such Appraisal Shares in accordance with
Section 262 (and at the Effective Time, such Appraisal Shares shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
such holders shall cease to have any right with respect thereto, except the
right to receive the fair value of such Appraisal Shares in accordance with
Section 262); provided, however, that if any such holder shall fail to perfect
or otherwise shall waive, withdraw or lose

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the right to appraisal under Section 262, then the right of such holder to be
paid the fair value of such holder’s Appraisal Shares shall cease and such
Appraisal Shares shall be deemed to have been converted as of the Effective Time
into, and to have become exchangeable solely for the right to receive, Merger
Consideration as provided in Section 3.2(a). The Company shall serve prompt
notice to Parent of any demands received by the Company for appraisal of any
shares of Company Common Stock, and Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing. Any portion of the Merger
Consideration made available by the Paying Agent pursuant to Section 3.3(a) to
pay for Appraisal Shares shall be returned to Parent upon demand.
          SECTION 3.3. Exchange of Certificates.
          (a) Paying Agent. Prior to the Effective Time, Parent shall enter into
an agreement with such bank or trust company as may be designated by Parent and
reasonably acceptable to the Company (the “Paying Agent”), which shall provide
for the payment of Merger Consideration in accordance with the terms of this
Section 3.3. Parent shall deposit with the Paying Agent in accordance with this
Article 3, the cash necessary to pay for the shares of Company Common Stock
converted into the right to receive Merger Consideration (the “Exchange Fund”).
The Exchange Fund shall not be used for any other purpose. Such Merger
Consideration deposited with the Paying Agent shall, pending its disbursement to
holders of shares of Company Common Stock, be invested by the Paying Agent as
directed by Parent. Any net profit resulting from, or interest or income
produced by, such amounts on deposit with the Paying Agent will be payable to
Parent.
          (b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the “Certificates”)
whose shares were converted into the right to receive the Merger Consideration
pursuant to Section 3.2, (i) a letter of transmittal in the form attached as
Exhibit B hereto and (ii) instructions for use in surrendering the Certificates
in exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required by the Paying
Agent, the holder of such Certificate shall receive in exchange therefor the
amount of cash which the shares of Company Common Stock theretofore represented
by such Certificate entitle such holder to receive pursuant to the provisions of
this Article 3 and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, payment may be made to a
Person other than the Person in whose name the Certificate so surrendered is
registered if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the Person requesting such issuance shall pay any
transfer or other taxes required by reason of the payment to a Person other than
the registered holder of such Certificate or establish to the satisfaction of
Parent that such tax has been paid or is not applicable. Each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon surrender in accordance with this Section 3.3 the Merger
Consideration into which the shares of Company Common Stock shall have been
converted

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pursuant to Section 3.2. No interest shall be paid or shall accrue on any cash
payable to holders of Certificates pursuant to the provisions of this Article 3.
          (c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid upon the surrender for exchange of Certificates in accordance
with the terms of this Article 3 shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
theretofore represented by such Certificates, and there shall be no further
registration of transfers on the stock transfer books of the Company of the
shares of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article 3, except as otherwise provided by
Law.
          (d) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains unclaimed by the holders of Certificates for 12 months after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Certificates who have not theretofore complied with this Article 3 shall
thereafter look only to Parent (subject to abandoned property, escheat or
similar Laws, as general creditors thereof) for payment of their claim for
Merger Consideration.
          (e) No Liability. None of Parent, Merger Sub, the Company or the
Paying Agent shall be liable to any Person in respect of any cash from the
Exchange Fund 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 five years after the Effective Time (or immediately
prior to such earlier date on which any amounts payable pursuant to this
Article 3 would otherwise escheat to or become the property of any Governmental
Authority), any such amounts 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) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such Person of a bond in such reasonable amount as Parent
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall issue in exchange for such
lost, stolen or destroyed Certificate the applicable Merger Consideration with
respect thereto pursuant to this Agreement.
          (g) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the Code or
any provision of state, local or foreign Tax law. To the extent that amounts are
so withheld by Parent and paid to the appropriate taxing authorities, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by Parent.

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          SECTION 3.4. Company Options. As soon as practicable following the
date of this Agreement, the Company Board (or, if appropriate, any committee
thereof administering the Stock Plans) shall adopt such resolutions or take such
other actions as may be required to provide that each Option granted under the
Stock Plans and outstanding immediately prior to the Effective Time (whether or
not then vested or exercisable) shall be canceled and terminated and converted
at the Effective Time into the right to receive a cash amount equal to the
Option Consideration for each share of Company Common Stock then subject to the
Option, or, if the Option Consideration shall be a negative number, no such cash
payment shall be due and owing. Except as otherwise provided below, any Option
Consideration due and owing shall be paid as soon after the Closing Date as
shall be practicable. Notwithstanding the foregoing, Parent and the Surviving
Corporation shall be entitled to deduct and withhold from any Option
Consideration otherwise payable such amounts as may be required to be deducted
and withheld with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax law. Prior to the Effective Time, the
Company shall make any amendments to the terms of the Stock Plans that are
necessary to give effect to the transactions contemplated by this Section 3.4.
Prior to the Effective Time, the Company shall take all actions necessary to
terminate all of its Stock Plans, such termination to be effective at or before
the Effective Time.
          SECTION 3.5. Warrants. Prior to the Effective Time, the Company shall
use reasonable best efforts to provide that each Warrant that is outstanding
immediately prior to the Effective Time and is not exercised prior to the
Effective Time shall cease to represent a right to acquire shares of the Company
Common Stock and shall be converted, at the Effective Time, into the right to
receive (upon surrender of the warrant certificate) an amount in cash, without
interest, equal to the product of (a) the amount, if positive, by which the
Merger Consideration exceeds the per share exercise price of such Warrant and
(b) the number of shares of Company Common Stock issuable upon exercise of such
Warrant.
          SECTION 3.6. Further Action. If at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
either of the Constituent Corporations, the officers and directors of the
Surviving Corporation are fully authorized in the name of each Constituent
Corporation or otherwise to take, and shall take, all such lawful and necessary
action.
          SECTION 3.7. Adjustments to Prevent Dilution. In the event that the
Company changes the number of shares of Company Common Stock or securities
convertible or exchangeable into or exercisable for shares of Company Common
Stock issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse stock split), stock dividend
or distribution, recapitalization, merger, issuer tender or exchange offer, or
other similar transaction, the Merger Consideration shall be equitably adjusted;
provided, however, that no such adjustment shall be made as a result of the
issuance of Company Common Stock in connection with the conversion or exercise
of any securities convertible or exchangeable into or exercisable for shares of
Company Common Stock issued and outstanding as of the date hereof or in any
transaction permitted by Section 6.1.

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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
          Except as set forth on the disclosure letter delivered by the Company
to Parent prior to the execution of this Agreement (the “Company Disclosure
Letter”), which Company Disclosure Letter identifies the Section (or, if
applicable, subsection) of this Agreement to which such exception relates
(provided, however, that any disclosure contained in any section of the Company
Disclosure Letter shall be deemed to be disclosed with respect to any other
Section of this Agreement to the extent that it is reasonably and readily
apparent that such disclosure is applicable to such other Section of this
Agreement), the Company hereby represents and warrants to Parent and Merger Sub
as follows:
          SECTION 4.1. Organization.
          (a) Each of the Company and the Company Subsidiaries is a corporation,
limited liability company or partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Each of
the Company and the Company Subsidiaries has all requisite power and authority
necessary to enable it to own, operate and lease its properties and to carry on
its business as now conducted. The Company Charter Documents and Subsidiary
Documents are in full force and effect and neither the Company nor any of the
Company Subsidiaries is in violation of any of their respective provisions. Each
of the Company and the Company Subsidiaries possesses all licenses, franchises,
permits, exemptions, clearances, certificates, approvals and authorizations, and
any applications for, and supplements or amendments to, the foregoing
(collectively, “Permits”) from Governmental Authorities, or required by
Governmental Authorities to be obtained, in each case necessary for the lawful
conduct of their respective businesses as now conducted, the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect.
          (b) The Company has delivered or made available to Parent complete and
correct copies of the Company Charter Documents and the Subsidiary Documents, in
each case, as amended to the date of this Agreement. The Company has made
available to Parent correct and complete copies of the minutes (or, in the case
of minutes that have not yet been finalized, a brief summary of the meeting) of
all meetings of stockholders, the Company Board and each committee of the
Company Board and the Company Subsidiaries since January 1, 2006; provided,
however, that the Company shall not be obligated to furnish to Parent any
minutes for meetings or portions of meetings that only discuss the Transactions
or alternative transactions considered by the Company Board.
          SECTION 4.2. Capitalization.
          (a) The authorized capital stock of the Company consists of
250,000,000 shares of Company Common Stock. As of the date of this Agreement:
(i) 101,006,802 shares of Company Common Stock were issued and outstanding;
(ii) no shares of Company Common Stock were held by the Company in its treasury;
(iii) there were outstanding Options to purchase 6,681,667 shares of Company
Common Stock out of a total of 9,800,000 shares of Company Common Stock
currently reserved for issuance under the Stock Plans (including upon exercise
of

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the Options); (iv) 4,000,000 shares of Company Common Stock were reserved for
issuance upon conversion of the Convertible Notes, and (v) there were
outstanding Warrants exercisable for 6,944,891 shares of Company Common Stock
and such number of shares of Company Common Stock were reserved for issuance
upon conversion of the Warrants. Such issued and outstanding shares of Company
Common Stock have been, and all such shares of Company Common Stock that may be
issued prior to the Effective Time will be when issued, duly authorized and
validly issued, are fully paid and nonassessable, and have not been issued in
violation of any preemptive rights granted by the Company to any holders of its
securities. Section 4.2(a) of the Company Disclosure Letter sets forth, as of
the date of this Agreement, each equity-based award and Option outstanding under
the Stock Plans indicating the applicable Stock Plan and type of award such as
an “incentive stock option” (as defined in Section 422 of the Code) or a
nonqualified stock option, the extent to which such award or option is vested
and exercisable or subject to acceleration, the date on which such award or
Option was granted, the Stock Plan under which such award or Option was granted,
the number of shares of capital stock of the Company issuable thereunder and the
expiration date and exercise or conversion price relating thereto. The treatment
of the awards and Options described in Section 3.4 shall not violate the terms
of the Stock Plans or any agreement governing the terms of such awards or
Options. All of the Options have been granted solely to employees, consultants
(who are individuals) or directors of the Company in the ordinary course of
business consistent with past practice. All Options have been granted in
accordance with the terms of the Stock Plans and applicable Law, and, with
respect to each outstanding Option, the exercise price is no less than the fair
market value of such Option on the date of grant and the Option is either exempt
from or not otherwise subject to the requirements of Section 409A of the Code.
The Company has not declared or paid any dividend, or declared or made any
distribution on, or authorized the creation or issuance of, or issued, or
authorized or effected any split-up or any other recapitalization of, any of its
capital stock, or directly or indirectly redeemed, purchased or otherwise
acquired any of its outstanding capital stock. The Company has not heretofore
agreed to take any such action, and there are no outstanding contractual
obligations of the Company of any kind to redeem, purchase or otherwise acquire
any outstanding shares of capital stock of the Company. Other than the Company
Common Stock, there are no outstanding bonds, debentures, notes or other
indebtedness or securities of the Company having the right to vote (or, other
than the outstanding Options, Warrants and Convertible Notes, convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote.
          (b) There are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company or any Company Subsidiary is a
party relating to the voting or disposition of any shares of the capital stock
of the Company or any of the Company Subsidiaries or granting to any Person or
group of Persons the right to elect, or to designate or nominate for election, a
director to the Company Board or any Company Subsidiary.
          (c) Except as set forth in Section 4.2(a), as of the date of this
Agreement, (i) no shares of capital stock or other voting securities of the
Company are issued, reserved for issuance or outstanding, and (ii) there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
of the Company Subsidiaries is a party or by which any of them is bound
(A) obligating the Company or any of the Company Subsidiaries to issue, deliver,
register or sell, or cause to be issued, delivered, registered or sold,
additional shares of capital stock or other equity

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interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in or other voting securities
of, the Company or of any Company Subsidiary, (B) obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, contract, arrangement or
undertaking, or (C) that give any Person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of capital stock of the Company. As of the date of this
Agreement, there are not any outstanding obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock or voting securities of the Company. No Company Subsidiary owns
any Company Common Stock.
          (d) There are no outstanding securities of the Company (i) registered
under the Exchange Act, (ii) listed on a U.S. national securities exchange or
quoted in a U.S. automated inter dealer quotation system, or (iii) other than
the Company Common Stock admitted for trading on AIM, listed on a foreign
securities exchange.
          SECTION 4.3. Authorization; No Conflict.
          (a) The Company has the requisite corporate power and authority to
enter into and deliver this Agreement and all other agreements and documents
contemplated hereby to which it is a party and to carry out its obligations
hereunder and thereunder and to consummate the Transactions. The execution and
delivery of this Agreement by the Company, the performance by the Company of its
obligations hereunder and the consummation by the Company of the Transactions
have been duly and validly authorized and approved by the Company Board. No
other corporate proceedings on the part of the Company or any of the Company
Subsidiaries are necessary to authorize the execution and delivery of this
Agreement, the performance by the Company of its obligations hereunder and the
consummation by the Company of the Transactions, except for the approval of this
Agreement by the holders of a majority of the issued and outstanding shares of
Company Common Stock (the “Required Company Stockholder Vote”). Other than the
Required Company Stockholder Vote, no vote of the Company’s stockholders is
necessary in connection with this Agreement, the Voting Agreement or the
consummation of any of the Transactions. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Parent and Merger Sub,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar Laws of
general application affecting or relating to the enforcement of creditors rights
generally and equitable principles of general applicability, whether considered
in a proceeding at law or in equity (the “Bankruptcy and Equity Exception”).
          (b) The Company Board, at a meeting duly called and held prior to the
execution of this Agreement, duly and unanimously adopted resolutions
(i) authorizing the execution, delivery and performance of this Agreement,
(ii) approving, adopting and declaring advisable this Agreement, the Merger and
the other transactions contemplated by this Agreement, (iii) determining that
the terms of the Merger and the other Transactions are fair to and in the best
interests of the Company and its stockholders, and (iv) authorizing the
submission

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of this Agreement to the Company’s stockholders for their approval and
recommending that the Company’s stockholders adopt this Agreement.
          (c) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the Transactions nor compliance
by the Company with any of the provisions herein will (i) result in a violation
or breach of or conflict with the Company Charter Documents or the Subsidiary
Documents, (ii) result in a violation or breach of or conflict with any
provisions of, or result in the loss of any benefit under or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination, cancellation of, or
give rise to a right of purchase under, or accelerate the performance required
by, or result in a right of termination or acceleration under, or result in the
creation of any Lien upon any of the properties or assets owned or operated by
the Company or any Company Subsidiary under any of the terms, conditions or
provisions of any Contract to which the Company or any of the Company
Subsidiaries is a party or by which the Company or any of the Company
Subsidiaries or any of their respective properties or assets may be bound, or
(iii) subject to obtaining or making the consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings referred to in paragraph
(d) below, violate any judgment, ruling, order, writ, injunction or decree of
any Governmental Authority (“Judgment”) or any statute, code, decree, law,
ordinance, rule or regulation or orders of Governmental Authorities (“Law”)
applicable to the Company or any of the Company Subsidiaries or any of their
respective properties or assets, other than any such event described in items
(ii) or (iii) which, individually or in the aggregate, has not had and would not
reasonably be expected to have a Company Material Adverse Effect.
          (d) No consent, waiver, permit, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority is
necessary to be obtained or made by the Company or any Company Subsidiary in
connection with the Company’s execution, delivery and performance of this
Agreement or the consummation by the Company of the Transactions, except for
(i) compliance with the DGCL, with respect to the filing of the Certificate of
Merger, and (ii) compliance with the AIM Rules for Companies.
          (e) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the Transactions in the manner
contemplated by this Agreement will result in a breach or violation of the AIM
Rules for Companies, the United Kingdom Financial Services and Markets Act 2000,
as amended, and the Rules of the London Stock Exchange (the “UK Laws”).
          SECTION 4.4. Subsidiaries.
          (a) The Company Subsidiaries and their respective jurisdictions of
organization are identified in Section 4.4(a) of the Company Disclosure Letter.
          (b) All of the outstanding shares of capital stock or other equity
securities of, or other ownership interests in, each Company Subsidiary are duly
authorized, validly issued, fully paid and nonassessable, and such shares,
securities or interests are owned by the Company or by a Company Subsidiary free
and clear of any Liens or limitations on voting rights. There are no
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or

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commitments of any character relating to the issuance, transfer, sales,
delivery, voting or redemption (including any rights of conversion or exchange
under any outstanding security or other instrument) for any of the capital stock
or other equity interests of, or other ownership interests in, any Company
Subsidiary. There are no agreements requiring the Company or any Company
Subsidiary to make contributions to the capital of, or lend or advance funds to,
any Company Subsidiary.
          SECTION 4.5. Financial Statements.
          (a) The Company has previously delivered to Parent (i) the audited
financial statements (balance sheet, statement of operations and statement of
cash flows) of the Company and the Company Subsidiaries for the fiscal years
ended December 31, 2007 and December 31, 2008 and the notes thereto, and
(ii) the unaudited interim consolidated balance sheet of the Company and the
Company Subsidiaries as of and for the five-month period ending May 31, 2009
(the May 31, 2009 balance sheet being referred to herein as the “Interim Balance
Sheet” and the date thereof being the “Balance Sheet Date”) and related
consolidated statements of income and cash flows for the periods then ended
(together with the Interim Balance Sheet, the “Interim Financial Statements”).
All of such financial statements referred to in this Section 4.5 are
collectively referred to herein as the “Company Financial Statements”.
          (b) All Company Financial Statements (i) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
referenced above (except as otherwise noted therein and, in the case of the
Interim Financial Statements, subject to the absence of footnotes and to normal
and recurring year-end audit adjustments that are not, individually or in the
aggregate, expected to be material in amount or significance), (ii) have been
prepared from, and are in accordance with, the books and records of the Company
and the Company Subsidiaries, and (iii) present fairly in all material respects
the financial position and the results of operations of the Company and the
Subsidiaries (taken as a whole) as of the dates and for the periods indicated.
          (c) The Company and the Company Subsidiaries maintain systems of
internal control over financial reporting that have been designed by, or under
the supervision of, their respective principal executive and principal financial
officers, or persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP,
including, but not limited to internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of the Company Financial Statements in
conformity with GAAP and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
          SECTION 4.6. Absence of Undisclosed Liabilities. As at the Balance
Sheet Date, neither the Company nor any of the Company Subsidiaries has any
liabilities of any nature, whether accrued, absolute, contingent or otherwise
(including, without limitation, liabilities as guarantor or otherwise with
respect to obligations of others or liabilities for Taxes due or then

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accrued or to become due) other than liabilities (i) adequately reflected or
reserved against on the Interim Balance Sheet, (ii) incurred since the Balance
Sheet Date in the ordinary course of business consistent with past practice,
(iii) arising under Material Contracts listed in Section 4.16(a) of the Company
Disclosure Letter or not so required to be listed in accordance with their
terms, (iv) disclosed in this Agreement, or (v) not required by GAAP to be
reflected on the Interim Balance Sheet or any notes thereto.
          SECTION 4.7. No Material Changes. From the Balance Sheet Date to the
date hereof, the Company and the Company Subsidiaries have conducted their
business in the ordinary course of business consistent with past practice and
there has not been or occurred:
          (a) any event, condition, change, occurrence or development of a state
of circumstances which, individually or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect; or
          (b) any event, condition, action or occurrence that, if taken during
the period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 6.1(b).
          SECTION 4.8. Litigation.
          (a) There are no suits, claims, actions, proceedings, arbitrations,
mediations, or, to the knowledge of the Company, governmental investigations,
informal inquiries or requests for documents, whether by subpoena or informal
letter (other than routine proceedings related to the prosecution of
applications for Patents, Copyright registrations and Trademark registrations)
(“Proceedings”), pending or, to the knowledge of the Company, threatened against
the Company or any of the Company Subsidiaries, against any of their respective
directors, officers, employees or agents or which affect the assets or
operations of the Company or the Company Subsidiaries. Neither the Company nor
the Company Subsidiaries nor any of their respective properties is or are
subject to any material Judgment.
          (b) There are no pending, and in the past three years there have been
no, claims of any director, officer or employee of the Company or any of the
Company Subsidiaries seeking indemnification from the Company or any of the
Company Subsidiaries under applicable Law, the Company Charter Documents or the
Subsidiary Documents, any insurance policy maintained by the Company or any of
the Company Subsidiaries or any Contract.
          SECTION 4.9. Broker’s or Finder’s Fees; Opinion of Company Financial
Advisor.
          (a) Except for the Company Financial Advisor, no agent, broker,
investment banker, Person or firm acting on behalf of the Company or any Company
Subsidiary or under the Company’s or any Company Subsidiary’s authority is or
will be entitled to any advisory, commission or broker’s or finder’s fee or
similar fee or commission or reimbursement of expenses from any of the parties
hereto in connection with any of the Transactions. The Company has heretofore
delivered to Parent a complete and correct copy of the Company’s engagement
letter with the Company Financial Advisor, which letter describes all fees
payable to the Company Financial Advisor in connection with the Transactions,
all agreements under which

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any such fees or any expenses are payable and all indemnification and other
agreements related to the engagement of the Company Financial Advisor.
          (b) The Company Financial Advisor has delivered to the Company Board
its written opinion (or oral opinion to be confirmed in writing), dated as of
the date hereof, that, as of such date, the Merger Consideration to be received
by holders of the Company Common Stock (other than the Company, Merger Sub,
Parent or any wholly-owned Subsidiary of Parent or the Company) pursuant to this
Agreement is fair, from a financial point of view, to the holders of the Company
Common Stock. A written copy of such opinion will be provided to Parent as soon
as practicable after the date hereof; provided, however, that Parent hereby
agrees and understands that such opinion is for the benefit of the Company Board
and may not be relied on by Parent or Merger Sub. The Company has been
authorized by the Company Financial Advisor to permit the inclusion of such
opinion in its entirety and/or references thereto in the Proxy Circular,
provided that the opinion is reproduced therein in full and any such references
are in a form reasonably acceptable to the Company Financial Advisor and its
counsel.
          SECTION 4.10. Employee Plans.
          (a) Section 4.10 of the Company Disclosure Letter sets forth all
Company Employee Benefit Plans established, maintained, adopted, participated
in, sponsored, contributed or required to be contributed to, or provided by, the
Company, any Company Subsidiary or any entity with which the Company is a single
employer under Section 414(b), (c) or (m) of the Code (“Company ERISA
Affiliates”) and under which the Company or any Company ERISA Affiliate would
reasonably be expected to have any liability.
          (b) With respect to each Company Employee Benefit Plan, the Company
has made available to Parent a true, correct and complete copy of: (i) each
writing constituting a part of any written Company Employee Benefit Plan and all
amendments thereto, and all trusts or service agreements relating to the
administration and recordkeeping of the Plan, and written summaries of the
material terms of all unwritten Company Employee Benefit Plans; (ii) the three
most recent Annual Reports (Form 5500 Series or otherwise in a form in
accordance with applicable Law) including all applicable schedules, if any, for
each Company Employee Benefit Plan that is subject to such reporting
requirements; (iii) the current summary plan description and any material
modifications thereto, if any, or any written summary provided to participants
with respect to any plan for which no summary plan description exists; (iv) the
most recent determination letter (or if applicable, advisory or opinion letter)
from the Internal Revenue Service, if any, and any pending applications for a
determination or opinion letter; and (v) all material written correspondence
given to such Company Employee Benefit Plan, the Company, or any ERISA Affiliate
by the Internal Revenue Service, Department of Labor, Pension Benefit Guarantee
Corporation, or other governmental agency (including any foreign governmental
agency responsible for the regulation of such Company Employee Benefit Plan)
during the three years preceding the date of this Agreement relating to such
Company Employee Benefit Plan or provided to any such entity by the Company
Employee Benefit Plan, the Company, a Company Subsidiary or an ERISA Affiliate
during the three years preceding the date of this Agreement with respect to such
Company Employee Benefit Plan.

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          (c) Each Company Employee Benefit Plan that is intended to be
“qualified” within the meaning of Section 401(a) of the Code has been the
subject of a favorable and up-to-date (through any applicable remedial amendment
period) determination, advisory or opinion letter from the Internal Revenue
Service on which the Company is entitled to rely, and no event has occurred and
no condition exists that would reasonably be expected to adversely affect the
qualified status of any such Company Employee Benefit Plan.
          (d) The Company, or any Company Subsidiary, has (i) filed or caused to
be filed all returns and reports on the Company Employee Benefit Plans that it
and/or any such plan are required to file, (ii) paid or made adequate provision
for all fees, interest, penalties, assessments or deficiencies that have become
due pursuant to those returns or reports or pursuant to any assessment or
adjustment that has been made relating to those returns or reports and (iii) has
complied in all material respects with applicable Laws pertaining to the
provision of compensation and benefits.
          (e) Each Company Employee Benefit Plan has been operated and
administered in all material respects in accordance with its provisions and in
compliance with all provisions of ERISA, the Code and all Laws and regulations
applicable to the Company Employee Benefit Plans. All contributions that are
required to be made to any Company Employee Benefit Plan (or to any person
pursuant to the terms thereof) and are currently due have been made or paid.
          (f) Neither the Company nor any Company Subsidiary has engaged in any
prohibited transaction for which there is not an exemption, within the meaning
of Section 4975 of the Code or Section 406 of ERISA, as a fiduciary or party in
interest with respect to any Company Employee Benefit Plan. To the knowledge of
the Company, no prohibited transaction has occurred with respect to any Company
Employee Benefit Plan that would be reasonably expected to result in any
liability or excise Tax under ERISA or the Code being imposed on the Company or
any Company Subsidiary. Neither the Company, any Company employee, or any
committee of which any Company employee is a member has breached his or her
fiduciary duty with respect to a Company Employee Benefit Plan or otherwise has
any liability in connection with any acts taken (or failed to be taken) with
respect to the administration or investment of the assets of any Company
Employee Benefit Plan. To the knowledge of the Company, no fiduciary, within the
meaning of Section 3(21) of ERISA, who is not the Company or any Company
employee, has breached his or her fiduciary duty with respect to a Company
Employee Benefit Plan or otherwise has any liability in connection with any acts
taken (or failed to be taken) with respect to the administration or investment
of the assets of any Company Employee Benefit Plan that would reasonably be
expected to result in any liability or excise Tax under ERISA or the Code being
imposed on the Company or any Company Subsidiary.
          (g) No Company Employee Benefit Plan is subject to Title IV of ERISA
or Section 412 of the Code, or is a “defined benefit plan” within the meaning of
Section 3(35) of ERISA, or is a “multiemployer plan” within the meaning of
Section 3(37) of ERISA, and neither the Company, a Company Subsidiary nor any
ERISA Affiliate of the Company or a Company Subsidiary has within the six years
preceding the date of this Agreement sponsored, contributed to, been required to
contribute to, or had any obligations or incurred any liability under any plan

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that is subject to Title IV of ERISA or Section 412 of the Code, or is a
“multiemployer plan” within the meaning of Section 3(37) of ERISA.
          (h) The Company and the Company Subsidiaries are not required to
provide life, health or medical benefits or insurance coverage to any
individual, or to the family members of any individual, for any period extending
beyond the termination of the individual’s employment, except to the extent
required by the COBRA provisions in ERISA and the Code or similar provisions of
state law.
          (i) Neither the execution and delivery of this Agreement nor the
consummation of the Transactions, alone or in connection with any other event
(such as a termination of employment) will (i) result in any payment becoming
due under any Company Employee Benefit Plan, (ii) increase any benefits
otherwise payable under any Company Employee Benefit Plan, or (iii) result in
the acceleration of the time of payment or vesting of any such benefits. No
benefit that is or may become payable by any Company Employee Benefit Plan as a
result of, or arising under, this Agreement shall constitute an “excess
parachute payment” (as defined in Section 280G(b)(1) of the Code) that is
subject to the imposition of an excise tax under Section 4999 of the Code or
that would not be deductible by reason of Section 280G of the Code.
          (j) Except as required by applicable Law or any applicable collective
bargaining agreement, the Company and the Company Subsidiaries have no legally
binding obligation to any individual to create any additional benefit plans,
programs, policies or arrangements or modify or change any existing Company
Employee Benefit Plan that would affect any current or former employee,
director, consultant, or independent contractor, of the Company, or any
beneficiary or alternate payee of such an individual. Except as required by
applicable Law, no events have occurred or are expected to occur as a result of
any action taken by the Company with respect to any Company Employee Benefit
Plan that would cause a material change in the cost of providing the benefits
under such plan or would cause a material change in the cost of providing for
other liabilities of such plan.
          (k) The Company has the right at any time to amend or terminate each
Company Employee Benefit Plan at any time (following a notice period of no
longer than forty five days) without incurring any liability other than with
respect to (1) benefits that have already accrued under a retirement plan or
(2) claims that have already been incurred under a welfare plan.
          SECTION 4.11. Warranties.
          (a) The Company and the Company Subsidiaries do not provide
guaranties, warranties or indemnities with respect to the performance or
integrity of any of the products or services sold by the Company or the Company
Subsidiaries, except for those written standard guaranties, warranties or
indemnities that are included in the copies of the Material Contracts that have
been previously provided to Parent.
          (b) Section 4.11(b) of the Company Disclosure Letter sets forth a
brief description of any material claims during the last three years made under
or with respect to

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guaranties, warranties and indemnities of or relating to the Company’s and the
Company Subsidiaries’ products and services.
          (c) The reserve for guaranty, warranty and indemnity costs included in
the Company Financial Statements sets forth the reasonable judgment of
management of the Company of the estimate of the aggregate liability of the
Company and the Company Subsidiaries in respect of such guaranty, warranty and
indemnity obligations as of the date of such Company Financial Statements.
          (d) Neither the Company nor any Company Subsidiary has received any
written or, to the knowledge of the Company, oral customer complaints concerning
material alleged defects in its products (or designs thereof) or services.
          SECTION 4.12. Taxes.
          (a) Each of the Company and each Company Subsidiary has timely filed
all material federal, state, local, and other Tax Returns required to be filed
by it in the manner prescribed by applicable law and all such Tax Returns are
true, complete and correct. All Taxes shown as due on such Tax Returns have been
paid in full and the Company and each Company Subsidiary has made adequate
provision (or adequate provision has been made on its behalf) for all accrued
Taxes not yet due. There are no Liens on any of the assets, rights or properties
of the Company or any Company Subsidiary with respect to Taxes, other than Liens
for Taxes not yet due and payable or for Taxes that the Company or a Company
Subsidiary is contesting in good faith through appropriate proceedings.
          (b) No deficiencies have been asserted in writing against the Company
or any Company Subsidiary as a result of examinations by any state, local,
federal or foreign taxing authority and no issue has been raised by any
examination conducted by any state, local, federal or foreign taxing authority
that, by application of the same principles, might result in a proposed
deficiency for any other period not so examined which deficiency (or
deficiencies), in either case, is not (or are not) adequately reserved for in
the most recent Company Financial Statements. Any deficiency resulting from any
audit or examination relating to Taxes of the Company or any Company Subsidiary
by any taxing authority has been paid or is being contested in good faith and in
accordance with law and is adequately reserved for on the balance sheets
contained in the Company Financial Statements in accordance with GAAP.
          (c) Neither the Company nor any Company Subsidiary has been a party to
a “listed transaction” within the meaning of Treas. Reg. Sec. 1.6011-4(b).
          (d) Neither the Company nor any Company Subsidiary is a party to any
Tax sharing agreement, Tax indemnity obligation or similar agreement,
arrangement or practice with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with any
taxing authority).
          (e) There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from the Company or
any Company Subsidiary for any taxable period and no request for any such waiver
or extension is currently pending. There are no audits

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or other examinations by any Governmental Authority currently pending against
the Company or any Company Subsidiary.
          (f) Neither the Company nor any Company Subsidiary has been a member
of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company). Except for any
liability that, individually or in the aggregate, has not had and would not
reasonably be expected to have a Company Material Adverse Effect, neither the
Company nor any Company Subsidiary has been notified in writing that it will be
required to incur any liability for Taxes of any Person (other than the Company
or a Company Subsidiary) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law) with respect to any Tax claim
that has been made by a Taxing authority with respect to such other Person.
          (g) The Company and the Company Subsidiaries have duly and timely
withheld, collected, paid and reported to the proper Governmental Authorities
all Taxes required to have been withheld, collected, paid or reported.
          SECTION 4.13. Environmental Matters.
          (a) The Company and the Company Subsidiaries are and have for the past
five years been in compliance in all material respects with all applicable
Environmental Laws, which compliance includes obtaining, maintaining and
complying with all permits, notices, licenses, consents, waivers, certificates,
registrations, approvals and authorizations (“Environmental Permits”), if any,
required under Environmental Laws in connection with the operation of the
Company’s and the Company Subsidiaries’ businesses or owned, leased or operated
real property, and no Environmental Permit is or will be subject to review,
revision, major modification or prior consent by any Governmental Authority as a
result of the consummation of the Transactions.
          (b) There are no pending or, to the knowledge of the Company,
threatened, demands, claims, investigations, proceedings, information requests,
complaints, administrative or judicial orders, or notices against the Company or
any Company Subsidiary or any property currently or formerly owned, operated or
leased by the Company or any Company Subsidiary alleging non-compliance in any
material respect with or material liability under any Environmental Law.
          (c) To the knowledge of the Company, there are no facts, circumstances
or conditions associated with the Company or any Company Subsidiary or their
respective operations or any real property currently or formerly owned, leased
or operated by the Company or any Company Subsidiary or any other property to
which the Company or any Company Subsidiary or any Person working at the request
or direction of the Company or any Company Subsidiary has arranged for the
disposal or treatment of Hazardous Substances, that would reasonably be expected
to result in the Company or any Company Subsidiary incurring any material
liability under any Environmental Law.
          (d) None of the Company or any Company Subsidiary has, in the course
of its business, sent or disposed of, otherwise had taken or transported,
arranged for the taking or

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disposal of (on behalf of itself, a customer or any other party) or in any other
manner participated or been involved in the taking of or disposal or release of
a Hazardous Substance to or at a site that is contaminated by any Hazardous
Substance and that, pursuant to any Environmental Law, (A) has been placed on
the “National Priorities List” or any similar state or federal list, or (B) is
subject to or the source of a claim, an administrative order or other request
directed to the Company or any Company Subsidiary to take removal, remedial,
corrective or any other response action under any Environmental Law or to pay
for the costs of any such action at the site.
          (e) Any storage tanks (whether above or under ground) previously
located at any real property or facility during the period such facility was
owned, operated or leased by the Company or any Company Subsidiary were at all
times maintained, operated, sealed, closed or disposed of in accordance in all
material respects with all applicable Environmental Laws.
          (f) To the knowledge of the Company, there are no circumstances or
conditions relating to the properties, assets or business of the Company or any
of the Company Subsidiaries that would reasonably be expected to prevent the
operations, when used and operated in the manner currently used and operated,
from continuing to operate in compliance in all material respects with all
applicable Environmental Laws.
          (g) Neither the Company nor any Company Subsidiary has assumed or
retained by contract (including leases) or other binding agreement or by
operation of Law, any liabilities of a third party arising under or pursuant to
any Environmental Law or has agreed to indemnify, defend or hold harmless any
third party for any liabilities arising under or pursuant to any Environmental
Law, except pursuant to hazardous substance transportation and disposal
contracts and similar commercial Contracts entered into in the ordinary course
of business.
          (h) The Company and each Company Subsidiary have made available to
Parent copies of all material environmental or health and safety assessments,
audits, investigations, or similar reports pertaining to the operation of the
Company’s and the Company Subsidiaries’ businesses and the operation or use of
any real property currently or formerly owned, leased, or operated by the
Company or any Company Subsidiary, to the extent in the possession, custody or
control of the Company or any Company Subsidiary.
          SECTION 4.14. Compliance with Laws.
          (a) Neither the Company nor any Company Subsidiary is in violation in
any material respect of any Law applicable to the Company or any Company
Subsidiary or by which any of their respective properties or other assets or any
of their businesses or operations are bound or any rule, regulation, guideline,
guidance or requirement issued under any of the foregoing or has received any
notice or other communication from any Governmental Authority of any violation
or any investigation with respect to any such Law.
          (b) The Company has at all applicable times complied in all material
respects with the UK Laws, and no action has been taken against the Company by
the London Stock Exchange to fine or censure the Company or to cancel the
admission of its securities to AIM, nor has any warning notice been issued by
the London Stock Exchange to the Company in

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accordance with the AIM Rules for Companies (each of the foregoing being an “AIM
Enforcement Procedure”). To the knowledge of the Company, no event has occurred
or is occurring that may reasonably be expected to give rise to an AIM
Enforcement Procedure.
          SECTION 4.15. Intellectual Property.
          (a) Section 4.15(a) of the Company Disclosure Letter sets forth a
complete and accurate list of all Patents and registrations and applications for
registration of any Copyrights, Internet Property and Trademarks included in the
Owned Company Intellectual Property (the “Registered Owned Company Intellectual
Property”).
          (b) To the knowledge of the Company, the issued Patents and registered
Copyrights and Trademarks included in the Registered Owned Company Intellectual
Property is enforceable and valid. To the knowledge of the Company, none of the
Registered Owned Company Intellectual Property has been or is the subject of any
pending Proceeding (including, with respect to Patents, inventorship challenges,
interferences, reissues, reexaminations and oppositions, and with respect to
Trademarks, invalidation, opposition, cancellation, abandonment or similar
Proceeding) or any order (i) restricting the use of such Company Intellectual
Property, (ii) restricting assignment or license thereof by the Company or any
Company Subsidiary, as applicable, or (iii) that cause or would reasonably be
expected to cause any Company Intellectual Property to be invalid or
unenforceable, or challenging the rights of the Company or any Company
Subsidiary in any Company Intellectual Property. To the knowledge of the
Company, none of the Company Intellectual Property has been or is the subject of
any threatened Proceeding made in writing. Section 4.15(b) of the Company
Disclosure Letter sets forth any and all settlements or agreements reached with
respect to any such Proceedings related to the Company Intellectual Property.
          (c) Either the Company or a Company Subsidiary is the sole and
exclusive owner of, and has the valid right to use, all Owned Company
Intellectual Property without payment of any royalty or fee (other than fees
payable in connection with the filing, prosecution and maintenance of Registered
Owned Company Intellectual Property), and has the valid right to use all
Non-Owned Company Intellectual Property. The Company or a Company Subsidiary, as
applicable, has the unrestricted right to assign, transfer or grant to Parent,
upon completion of the Merger, all rights in and to the Owned Company
Intellectual Property free of any rights or claims of any Person or any other
Liens (other than Permitted Liens), and without payment by any Person of any
royalties, license fees or other amounts to any other Person. All rights of the
Company and the Company Subsidiaries in and to the Company Intellectual Property
will be unaffected by the Transactions. Without limiting the foregoing, the
consummation of the Transactions will not (i) result in the loss of, or
otherwise adversely affect, any rights of the Company or any Company Subsidiary
in any Company Intellectual Property, (ii) grant or require Parent, the Company
or any Company Subsidiary to grant to any Person any rights with respect to any
Intellectual Property, (iii) subject the Parent, the Company or any Company
Subsidiary to any increase in royalties or other payments in respect of any
Non-Owned Company Intellectual Property, or (iv) diminish any royalties or other
payments the Parent, the Company or any Company Subsidiary would otherwise be
entitled to in respect of any Company Intellectual Property.

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          (d) Section 4.15(d) of the Company Disclosure Letter sets forth a
complete and accurate list of all royalty, license fee and other payment
obligations payable by or to the Company or any Company Subsidiary with respect
to the Company Intellectual Property.
          (e) Neither the Company nor any Company Subsidiary is party to any
agreements with third parties that materially limit or restrict use of the Owned
Company Intellectual Property by the Company or any Company Subsidiary or
require any payments for such use. Neither the Company nor any Company
Subsidiary has entered into any Contract (i) granting any Person the right to
bring infringement actions with respect to, or otherwise to enforce rights with
respect to, any of the Owned Company Intellectual Property or Non-Owned Company
Intellectual Property that is exclusively licensed to the Company, or
(ii) granting any Person the right to control the prosecution of any of the
Owned Company Intellectual Property or Non-Owned Company Intellectual Property
that is exclusively licensed to the Company. There are no existing agreements,
options, commitments, or rights with, of or to any Person to acquire or obtain
any rights to any of the Owned Company Intellectual Property or Non-Owned
Company Intellectual Property that is exclusively licensed to the Company or any
Company Subsidiary. Section 4.l5(e) of the Company Disclosure Letter sets forth
a complete and accurate list of all express agreements to indemnify any Person
against any charge of infringement of any of the Company Intellectual Property
other than agreements to indemnify that are part of ordinary course
transactions.
          (f) To the knowledge of the Company, there is no unauthorized use,
infringement, misappropriation or violation of any of the Owned Company
Intellectual Property or Non-Owned Company Intellectual Property that is
exclusively licensed to the Company or any Company Subsidiary by any Person. The
conduct of the business of the Company or any Company Subsidiary as currently
conducted, to the knowledge of the Company, does not infringe or misappropriate
the intellectual property rights or other proprietary rights of any Person, and
neither the Company nor any Company Subsidiary has received any written notice,
nor to the knowledge of the Company received any oral communication, from any
Person of any claim or assertion to the contrary.
          (g) All issuance, renewal, maintenance and other material payments
that are or have become due with respect to the Registered Owned Company
Intellectual Property have been timely paid. All substantive documents,
certificates and other material in connection with the Registered Owned Company
Intellectual Property have, for the purposes of maintaining such Company
Intellectual Property, been filed in a timely manner with the relevant
Governmental Authorities. No act has been done or omitted to be done by the
Company or any Company Subsidiary which has, had or could have the effect of
impairing or dedicating to the public, or entitling any Person to cancel,
forfeit, modify or consider abandoned, any Registered Owned Company Intellectual
Property. The Company or a Company Subsidiary is listed in the records of the
appropriate U.S. and/or non-U.S. Governmental Authority as the sole and
exclusive assignee of record for each registration, grant and application
included in the Registered Owned Company Intellectual Property.
          (h) The Company and the Company Subsidiaries have taken reasonable
measures to maintain in confidence and to protect the secrecy, confidentiality
and value of all Trade Secrets included within the Company Intellectual
Property.

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          (i) All personnel of the Company or any Company Subsidiary who have
contributed to or participated in the conception or development of any Owned
Company Intellectual Property have executed and delivered to the Company or a
Company Subsidiary a confidentiality agreement restricting such Person’s right
to disclose proprietary information of the Company and the Company Subsidiaries.
To the knowledge of the Company, no personnel of the Company or any Company
Subsidiary have any claim against the Company in connection with such Person’s
involvement in the conception and development of any Owned Company Intellectual
Property and no such claim has been asserted or threatened in writing. To the
knowledge of the Company, none of the personnel of the Company or any Company
Subsidiary has any ownership interest in any Patents for any device, process,
design or invention of any kind now used or needed by the Company or a Company
Subsidiary in the furtherance of its business operations, which Patents have not
been assigned to the Company or a Company Subsidiary. All personnel of the
Company or any Company Subsidiary who have contributed to or participated in the
conception and development of any Intellectual Property conceived and/or reduced
to practice in the course of such personnel’s employment at the Company or a
Company Subsidiary, either (i) have been party to a “work-for-hire” arrangement
or agreement with the Company or a Company Subsidiary, whether in accordance
with applicable federal and state law, domestic or foreign, or otherwise, that
has accorded the Company or a Company Subsidiary ownership of all tangible and
intangible property rights thereby arising (other than moral and other rights
which cannot be assigned pursuant to applicable law), or (ii) have executed
general instruments of assignment to the Company or a Company Subsidiary as
assignee that convey to the Company or a Company Subsidiary ownership of all
tangible and intangible property thereby arising (other than moral and other
rights which cannot be assigned pursuant to applicable law) throughout the
period of such employment and for a reasonable period thereafter and that
require disclosure of such property to the Company or a Company Subsidiary.
          (j) To the knowledge of the Company there are no domain names that
consist of or include Trademarks of the Company or of the Company Subsidiaries
that are owned or registered by any Person other than the Company or the Company
Subsidiaries.
          (k) Section 4.15(k) of the Company Disclosure Letter sets forth a
complete and accurate list and description of all material Software used by the
Company or any Company Subsidiary in connection with the development, marketing
or sale of any product or service offered by the Company or any Company
Subsidiary, other than Software Licensed under OTS Software Licenses. Software
used by Company or any Company Subsidiary is (i) owned by the Company or such
Company Subsidiary, (ii) currently in the public domain or otherwise available
to the Company or such Company Subsidiary without the approval or consent of any
Person, or (iii) licensed or otherwise used by the Company or such Company
Subsidiary pursuant to terms of valid, binding written agreements. Neither the
Company nor any of the Company Subsidiaries have experienced within the past
12 months any material disruption to, or material interruption in, the conduct
of its business attributable to a defect, bug, breakdown or other failure or
deficiency on the part of the Software used by the Company or such Company
Subsidiary. The Company and each Company Subsidiary has taken reasonable steps
to provide for the backup and recovery of the data and information critical to
the conduct of the business (including such data and information that is stored
on magnetic or optical media in the ordinary course) without material disruption
to, or material interruption in, the conduct of the business. With respect to
each item of Software which is included in the Owned Company Intellectual
Property (“Owned

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Software”), the Company or a Company Subsidiary is in possession and control of
the applicable source code, object code, documentation, and know-how to the
extent required for use, distribution, maintenance and support of the Owned
Software as used, distributed, maintained, or supported in the business of the
Company or such Company Subsidiary. To the knowledge of the Company, the Owned
Software has not materially failed to conform to the technical specifications
for its performance or operation, whether such technical specifications were
developed by the Company, a Company Subsidiary or third person. No Person other
than the Company or any Company Subsidiary has any rights to use, sell, license,
transfer or otherwise exploit the Owned Software (except for portions thereof
that may consist of embedded third party products licensed from others and for
licenses of Software to customers in the ordinary course of business). Neither
the Company nor any Company Subsidiary has disclosed Owned Software source code
to any other Person other than pursuant to an enforceable confidentiality
agreement that reasonably protects the rights of the Company or such Company
Subsidiary in the Owned Software. To the knowledge of the Company, the Owned
Software is free of viruses, worms, Trojan horses, trap doors, time bombs,
spyware, other malicious or debilitating software (“Malware”), and the Company
and Company Subsidiaries have installed software and firewalls and have adopted
other measures to prevent the introduction of Malware in and to prevent the
intrusion or hacking of unauthorized users into their personal computers,
servers and other information technology systems.
          SECTION 4.16. Material Contracts.
          (a) Set forth in Section 4.16(a) of the Company Disclosure Letter is a
complete and accurate list of the following Contracts (other than the Company
Employee Benefit Plans) to which the Company or any Company Subsidiary is a
party or by which it is bound as of the date hereof (each such Contract, whether
or not set forth in such section of the Company Disclosure Letter, a “Material
Contract”):
     (i) (A) employment Contract or independent contractor or consulting
Contract (other than offer letters providing for at-will employment),
(B) severance Contract or change of control Contract or (C) any employee
collective bargaining agreement or other Contract with any labor union;
     (ii) Contract not to compete or otherwise restricting in any material
respect the development, manufacture, marketing, distribution or sale of any
products or services (including any Contract that requires the Company or any of
the Company Subsidiaries to work exclusively with any Person in any particular
area) or any other similar limitation on the ability of the Company or any of
the Company Subsidiaries to transact or compete in any line of business, with
any Person, in any geographic area or during any period of time;
     (iii) Contract with (A) any current holder of capital stock of the Company
or any Affiliate (other than any director, officer or employee or former
employee holding incentive awards under any Stock Plan), or (B) any director or
officer of the Company or a Company Subsidiary (other than any Contracts of the
type described in Section 4.16(a)(i) or indemnification agreements);

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     (iv) each lease, license, sublease or other occupancy right or similar
Contract with any Person (together with any amendments or supplements thereto)
(each, a “Lease”) under which the Company or any of the Company Subsidiaries are
a lessee, lessor or sublessor of, or makes available for use, to any Person
(other than the Company), any real property or any portion or any premises
otherwise occupied by or owned by the Company or any of the Company
Subsidiaries;
     (v) Contract (A) requiring or otherwise involving the potential payment by
or to the Company or any of the Company Subsidiaries of more than an aggregate
of $100,000, other than purchase orders issued by the Company to suppliers,
purchase orders issued by customers to the Company or customer Contracts, in
each case in the ordinary course of business, (B) in which the Company or any of
the Company Subsidiaries have granted “most favored nation” pricing provisions
relating to any product or (C) in which the Company or any of the Company
Subsidiaries have agreed to purchase a minimum quantity of goods relating to any
product or has agreed to purchase goods relating to any product exclusively from
a certain party;
     (vi) Contract for the disposition of any significant portion of the assets
or business of the Company or any of the Company Subsidiaries or any agreement
for the acquisition, directly or indirectly, of a material portion of the assets
or business of any other Person, in each case within the last three years;
     (vii) Contract for any joint venture, partnership, material research and
development project or similar arrangement;
     (viii) Contract granting any Person any license from the Company or any of
the Company Subsidiaries to any Company Intellectual Property, or pursuant to
which the Company or any of the Company Subsidiaries has been granted by any
Person any license to any Intellectual Property, or any other license, option,
freedom from suit, release, transfer, or other Contract to which the Company or
any of the Company Subsidiaries is a party relating in whole or in part to the
Company Intellectual Property or the Intellectual Property of any other Person
(provided, however, that the foregoing need not include OTS Software Licenses);
     (ix) Contract (other than trade debt incurred in the ordinary course of
business) under which the Company or any of the Company Subsidiaries have
borrowed any money from, or issued any note, bond, debenture or other evidence
of indebtedness for borrowed money to, any Person;
     (x) Contract under which (A) any Person has directly or indirectly
guaranteed indebtedness for borrowed money, liabilities or obligations of the
Company or any of the Company Subsidiaries or (B) the Company or any of the
Company Subsidiaries have directly or indirectly guaranteed indebtedness for
borrowed money, liabilities or obligations of any Person (other than a Company
Subsidiary);
     (xi) except for Contracts covered by clause (x) above, Contract under which
the Company or any of the Company Subsidiaries have, directly or indirectly,
made any

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advance, loan, extension of credit or capital contribution to, or other
investment in, any Person other than a Company Subsidiary, in each case other
than to employees of the Company or the Company Subsidiaries for business
expenses in the ordinary course of business and not exceeding $5,000 in the
aggregate with respect to any individual employee;
     (xii) Contract providing for any mortgage or security interest in material
property of the Company and the Company Subsidiaries;
     (xiii) confidentiality agreements with any full time employee of the
Company or any of the Company Subsidiaries that is not substantially in the
forms of the Company’s or a Company Subsidiary’s form of confidentiality
agreement;
     (xiv) Contract involving a standstill or similar obligation of the Company
or any of the Company Subsidiaries to a third party or of a third party to the
Company or any of the Company Subsidiaries;
     (xv) to the knowledge of the Company, Contract not otherwise required to be
disclosed in response to any other subparagraph of this Section 4.16(a) that, if
terminated by the Company or the Company Subsidiaries, would result in a penalty
to the Company or the Company Subsidiaries in excess of $100,000; and
     (xvi) Contract not entered into in the ordinary course of business that is
material to the Company and the Company Subsidiaries taken as a whole and not
otherwise required to be disclosed in response to any other subparagraph of this
Section 4.16(a).
          (b) Each of the Material Contracts is valid, binding and in full force
and effect and is enforceable in accordance with its terms against the Company
and the Company Subsidiaries party thereto, subject to the Bankruptcy and Equity
Exception. Neither the Company nor any of the Company Subsidiaries is in default
under any Material Contract, nor, to the knowledge of the Company, does any
condition exist that, with notice or lapse of time or both, would constitute a
material default thereunder by the Company and the Company Subsidiaries party
thereto. To the knowledge of the Company, no other party to any Material
Contract is in default thereunder, nor does any condition exist that, with
notice or lapse of time or both, would constitute a default thereunder of such
other party. Neither the Company nor any of the Company Subsidiaries has
received any written notice (or to the knowledge of the Company any oral notice)
of termination or cancellation under any Material Contract or received any
written notice (or to the knowledge of the Company any oral notice) of breach or
default in any material respect under any Material Contract which breach has not
been cured. Except as separately identified in Section 4.16(b) of the Company
Disclosure Letter, no approval, consent or waiver of any Person is needed in
order that any Material Contract continue in full force and effect following the
consummation of the Transactions. The Company has provided, or otherwise made
available to Parent, complete and accurate copies of all of the Material
Contracts currently in effect.
          SECTION 4.17. Employment Matters.

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          (a) Neither the Company nor any Company Subsidiary is or has ever been
a party to or otherwise bound by any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor organization, or
works council or similar body, nor is any such contract or agreement presently
being negotiated, nor, to the knowledge of the Company, is there, nor has there
been in the last five years, a representation campaign with respect to any of
the employees of the Company or any of the Company Subsidiaries. As of the date
of this Agreement, there is no pending or, to the knowledge of the Company,
threatened, labor strike, dispute, walkout, work stoppage, slow-down or lockout
involving the Company or any of the Company Subsidiaries.
          (b) Section 4.17(b) of the Company Disclosure Letter sets forth a
complete and accurate list of (i) the name of each officer and employee of the
Company or any Company Subsidiary, (ii) each other person who has accepted an
offer of employment made by the Company or any Company Subsidiary but whose
employment has not yet commenced and (iii) the names of each other person to
whom an offer of employment is outstanding by the Company or any Company
Subsidiary, in each case at the date hereof, together with each such person’s
actual or offered position or function, date of hire, seniority recognized to
the extent preceding hire dates, status as active or non-active and as a U.S.
citizen or lawful permanent resident, annual base salary or wages and any
incentive or bonus arrangement with respect to such person in effect on such
date and the amounts expected to be earned under those arrangements for the
current fiscal year. The Company has not received any information that would
lead it to believe that such persons will or may cease to be employees, or will
refuse offers of employment from Parent, because of the consummation of the
Transactions.
          (c) All employees employed by the Company or any Company Subsidiary in
the United States are employed on an “at-will” basis and their employment can be
terminated at any time for any reason without any amounts being owed to such
individual other than with respect to wages accrued before the termination. The
Company’s or the Company Subsidiaries’ relationships with all individuals who
act on their own as contractors or as other service providers can be terminated
at any time for any reason without any amounts being owed to such individuals,
other than with respect to compensation or payments accrued before the notice of
termination. No employee is on disability or other leave of absence, other than
short term absences of less than three weeks. The Company and the Company
Subsidiaries have complied, in all material respects, with all Laws governing
the employment of personnel by U.S. companies and the employment of non-U.S.
nationals in the United States, including those relating to wages, hours,
benefits, labor and the Immigration and Nationality Act 8 U.S.C. Sections 1101
et seq. and its implementing regulations. Neither the Company nor the Company
Subsidiaries have sponsored any employee for, or otherwise engaged any employee
working pursuant to, a non-immigrant visa.
          (d) The Company and the Company Subsidiaries have complied in all
material respects with their obligations under the WARN Act and other similar
applicable Law. Section 4.17(d) of the Company Disclosure Letter sets forth a
complete and accurate list of all employees whose employment has been terminated
within 90 calendar days preceding the Closing Date, or whose work hours have
been reduced within six months preceding the Closing Date, and such list
indicates the employee’s name, site of employment, position or job title,
starting date of employment, and date of employment loss, termination or layoff,
and, if

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applicable, the amount of hour reduction for each calendar month during the six
month period preceding the Closing Date.
          (e) All source deductions and other amounts required by applicable Law
to be deducted or withheld from remuneration payable to employees of the Company
and the Company Subsidiaries, and all employer premiums, contributions or
amounts payable by the Company or the Company Subsidiaries thereon or in respect
thereof, have been so deducted and withheld and remitted, paid or contributed in
material compliance with applicable Law to the appropriate governmental or
regulatory authority.
          (f) Neither the Company nor any Company Subsidiary has used the
services of temporary employees or “leased employees” (as that term is defined
in Section 414(n) of the Code). Neither the Company nor any Company Subsidiary
has used the services of individuals who have provided services while classified
as independent contractors to an extent that they would be eligible to
participate in any Company Employee Benefit Plan. All individuals who perform
services for the Company or a Company Subsidiary and who have been classified as
other than employees have been properly classified. All employees of the Company
and Company Subsidiaries who are employed in the United States, and all of the
terms and conditions of their employment are governed exclusively by United
States law and not the law of any other jurisdiction.
          (g) The Company has made available to Parent prior to the date of this
Agreement a current, accurate and complete copy of each material personnel
policy, rule, or procedure applicable to employees of the Company and the
Company Subsidiaries.
          (h) Neither the Company nor any Company Subsidiary is a party to, or
otherwise bound by, any consent decree or settlement agreement with, or citation
by, any Governmental Authority relating to employees or employment practices.
          (i) The Company and the Company Subsidiaries that employ personnel
outside the United States have complied, in all material respects, with all
applicable Laws governing the employment of such personnel including those
relating to wages, hours, benefits, labor, the provisions of information to and
consultation with employees and their representatives, redundancy, and
immigration and nationality.
          SECTION 4.18. Real Property.
          (a) Neither the Company nor any Company Subsidiary owns any real
property, nor has the Company or any Company Subsidiary ever owned any real
property.
          (b) Section 4.18 of the Company Disclosure Letter sets forth a
complete and accurate list of all real property that is as of the date hereof
leased, subleased or licensed by or from the Company or any Company Subsidiary
or otherwise used or occupied by the Company or any Company Subsidiary (the
“Leased Real Property”), the name of the lessor, licensor, sublessor, master
lessor and/or lessee, the date and term of the Lease. The Company, or any of the
Company Subsidiaries, is the sole owner and holder of a valid leasehold interest
in each Lease free and clear of Liens other than those Liens permitted under
this Agreement. The Company has delivered or otherwise made available to Parent
and Merger Sub true, correct and

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complete copies of all Leases and other written agreements and documents
pertaining to such Leases in the possession or under the control of the Company
or any of the Company Subsidiaries. The Company or any of the Company
Subsidiaries has peaceful and undisturbed possession under each Lease. There are
no leasing commissions or similar payments due, arising out of, resulting from
or with respect to any Leases that are owned by the Company or any of the
Company Subsidiaries. No party has a right to occupy any of the premises subject
to a Lease except for the Company or any of the Company Subsidiaries. There are
not pending or, to the knowledge of the Company, threatened condemnation or
eminent domain actions or proceedings, or any special assessments or other
activities of any public or quasi-public body that are reasonably likely to
adversely affect the Company’s rights pursuant to any Lease. No current use by
the Company nor any of the Company Subsidiaries of the Leased Real Property or
any improvements thereon is dependent on a nonconforming use or other approval
from a Governmental Authority, the absence of which would significantly limit
the use of any of the properties or assets in the operation of the business of
the Company. Each parcel of Leased Real Property is located on public roads and
streets with adequate and legal ingress available between such streets and such
parcel of Leased Real Property. With respect to each Lease under which the
Company or any of the Company Subsidiaries is a lessee, the lessee under such
Lease has obligation to remove any tenant improvements, alterations or
installations existing at the Leased Real Property as of the date hereof, prior
to expiration or the earlier termination of such Lease. With respect to each
Lease under which the Company or any of the Company Subsidiaries is a lessee,
the landlord under such Lease does not have the right to recapture or terminate
the Lease or any portion thereof upon receipt of a request to assign the Lease
or sublease any portion of the Leased Premises that is the subject of such
Lease.
          SECTION 4.19. Insurance. Section 4.19 of the Company Disclosure Letter
sets forth a complete and accurate list of all material insurance policies of
the Company and the Company Subsidiaries. There is no claim by the Company or
any Company Subsidiary pending under any of such policies. All insurance
policies of the Company and the Company Subsidiaries are in full force and
effect and provide insurance in such amounts and against such risks as is
customary in the industry in which they operate. Neither the Company nor any
Company Subsidiary is in breach or default, and neither the Company nor any
Company Subsidiary has taken any action or failed to take any action which, with
notice or the lapse of time, would constitute such a breach or default, or
permit termination or modification of, any of such insurance policies. No notice
of cancellation or termination has been received with respect to any such policy
except customary notices of cancellation in advance of scheduled expiration.
          SECTION 4.20. Affiliate Transactions. No present or former officer or
director of the Company or any Company Subsidiary or any Person owning 5% or
more of the shares of Company Common Stock or any other Affiliate, and no family
member of any such Person, is a party to any loan, lease or other Contract with
or binding upon the Company or any Company Subsidiary or any of their respective
properties or assets or has any interest in any property owned by the Company or
any Company Subsidiary or has engaged in any transaction with any of the
foregoing within the last three years preceding the date of this Agreement.
          SECTION 4.21. Takeover Statutes. No “fair price”, “moratorium”,
“control share acquisition” or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States (with the exception of
Section 203 of the DGCL) or in the

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United Kingdom applicable to the Company is applicable to the Merger or any of
the other Transactions. The action of the Company Board in approving this
Agreement, the Voting Agreement and the Transactions is sufficient to render
inapplicable to this Agreement, the Voting Agreement and the Transactions the
restrictions on “business combinations” (as defined in Section 203 of the DGCL)
as set forth in Section 203 of the DGCL.
          SECTION 4.22. Assets. The material property, plant and equipment of
the Company and the Company Subsidiaries has been maintained in all material
respects in reasonable operating condition and repair, ordinary wear and tear
excepted, and constitutes in all material respects property, plant and equipment
sufficient to permit the Company and each Company Subsidiary to conduct their
operations in the ordinary course of business in a manner consistent with their
past practices.
          SECTION 4.23. Foreign Corrupt Practices Act. Neither the Company nor
any Company Subsidiary, and no director, officer, agent or employee of the
Company or any Company Subsidiary, has (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity or (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or any other federal, foreign or state anti-corruption or
anti-bribery Law or requirement applicable to the Company or the Company
Subsidiaries.
          SECTION 4.24. Customers and Suppliers. Section 4.24 of the Company
Disclosure Letter sets forth a complete and accurate list of the 10 largest
suppliers to, and customers of, the Company and the Company Subsidiaries, taken
as a whole, for the fiscal year ended December 31, 2008 (determined on the basis
of the total dollar amount of purchases or sales, as the case may be). From
January 1, 2009 through the date of this Agreement, there has been no
termination or cancellation of the business relationship of the Company or any
Company Subsidiary with any such customer or supplier nor, to the knowledge of
the Company, has any such customer or supplier indicated an intent to so
terminate, cancel or materially curtail its business relationship with the
Company or any Company Subsidiary.
          SECTION 4.25. Disclosure. The representations and warranties of the
Company contained herein (as modified by the Company Disclosure Letter), taken
together with all announcements and other publications issued by the Company
pursuant to the UK Laws up to the date hereof and posted under the “Investors”
tab of the Company’s website (www.solarintegrated.com) under the headings “AIM
Rule 26” and “Financial Data”, do not contain as of the date hereof any untrue
statement of a material fact, and do not omit as of the date hereof to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. All projections
and expressions of opinion or predictions relating to future sales and financial
performance of the Company and the Company Subsidiaries previously delivered to
Parent by the Company were made in good faith by the Company; provided, however,
that the Company cannot and does not guaranty the attainment of any such
projections and expressions of opinion or predictions.

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
          Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
          SECTION 5.1. Organization. Each of Parent and Merger Sub is a
corporation organized, validly existing and in good standing under the laws of
the State of Delaware. Each of Parent and Merger Sub has all requisite power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, operate and lease
its properties and to carry on its business as now conducted, except for such
franchises, licenses, permits, authorizations and approvals, the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
          SECTION 5.2. Merger Sub. Merger Sub is a direct, wholly owned
Subsidiary of Parent that was formed solely for the purpose of engaging in the
Transactions. Since the date of its incorporation, Merger Sub has not carried on
any business or conducted any operations other than the execution of this
Agreement, the performance of its obligations hereunder and matters ancillary
thereto.
          SECTION 5.3. Authorization; No Conflict.
          (a) Each of Parent and Merger Sub has the requisite corporate power
and authority to enter into and deliver this Agreement and all other agreements
and documents contemplated hereby to which it is a party and to carry out its
obligations hereunder and thereunder and to consummate the Transactions. The
execution and delivery of this Agreement and the Voting Agreement by Parent and
Merger Sub (to the extent a party), the performance by Parent and Merger Sub of
their respective obligations hereunder and thereunder and the consummation by
Parent and Merger Sub of the Transactions have been duly and validly authorized
by the respective Boards of Directors of Parent and Merger Sub. No other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize the execution and delivery of this Agreement and the Voting Agreement,
the performance by Parent and Merger Sub of their respective obligations
hereunder and thereunder and the consummation by Parent and Merger Sub of the
Transactions, except for the approval of the Merger by Parent as the owner of
all the outstanding capital stock of Merger Sub. Each of this Agreement and the
Voting Agreement has been duly and validly executed and delivered by Parent and
Merger Sub (to the extent a party) and, assuming the due authorization,
execution and delivery thereof by the Company (to the extent a party) and the
other parties thereto, constitutes a legal, valid and binding obligation of
Parent and Merger Sub, enforceable against Parent and Merger Sub (to the extent
a party) in accordance with their respective terms, subject in each case to the
Bankruptcy and Equity Exception.
          (b) Neither the execution and delivery of this Agreement and the
Voting Agreement by Parent or Merger Sub (to the extent a party), nor the
consummation by Parent or Merger Sub of the Transactions nor compliance by
Parent or Merger Sub with any of the provisions herein or therein will
(i) result in a violation or breach of or conflict with the

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certificate of incorporation or by-laws of Parent or Merger Sub or (ii) subject
to obtaining or making the consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (c) below,
violate any Judgment or Law applicable to Parent or Merger Sub or any of their
respective properties or assets or result in a violation or breach of or
conflict with any provisions of any Contract to which Parent or Merger Sub is a
party or bound, other than any such event described in this clause (ii) which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
          (c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authority is necessary to be
obtained or made by Parent or Merger Sub in connection with Parent’s or Merger
Sub’s (to the extent a party) execution, delivery and performance of this
Agreement and the Voting Agreement, or the consummation by Parent or Merger Sub
of the Transactions, except for (i) compliance with the DGCL, with respect to
the filing of the Certificate of Merger, and (ii) any such consent, approval,
order, authorization, registration, declaration or filing, the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
          SECTION 5.4. Available Funds. Parent has sufficient funds available to
consummate the Transactions and to discharge the indebtedness of the Company
reflected on the Interim Balance Sheet in accordance with the terms of such
indebtedness or incurred by the Company in the ordinary course of business under
that certain Loan and Security Agreement, dated as of December 30, 2005, among
the Company, General Electric Capital Corporation and the other credit parties
signatory thereto (as amended, restated, supplemented or otherwise modified
through the date of this Agreement).
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE MERGER
          SECTION 6.1. Conduct of Business by the Company Pending the Merger.
The Company covenants and agrees that, during the period from the date of this
Agreement until the earlier of the Effective Time and the termination of this
Agreement in accordance with its terms, unless Parent shall otherwise consent in
writing or except as expressly permitted or required pursuant to this Agreement:
          (a) The Company and the Company Subsidiaries shall (i) conduct their
business only in the ordinary and usual course of business and consistent with
past practices, and (ii) use reasonable best efforts (consistent with the
Company’s past practices from May 5, 2009 to the date of this Agreement) to
maintain and preserve intact their respective business organizations, to
maintain their significant beneficial business relationships with suppliers,
contractors, distributors, customers, licensors, licensees and others having
material business relationships with them, to retain the services of their
present officers and key employees and to comply in all material respects with
all applicable Laws and the requirements of all Contracts that are material to
the Company and the Company Subsidiaries, taken as a whole, in each case, to the
end that their goodwill and ongoing business shall be materially unimpaired at
the Effective Time; provided, however, that the failure of the Company to take
any action requiring the consent of Parent under Section 6.1(b), after the
Company has requested Parent’s consent to

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such action pursuant to this Section 6.1 and Parent has failed to consent within
five Business Days of such request, shall not constitute a breach by the Company
of this Section 6.1(a).
          (b) Without limiting the generality of the foregoing Section 6.1(a),
except as contemplated by Section 3.4 and Section 3.5 or otherwise hereby, the
Company shall not directly or indirectly, and shall not permit any of the
Company Subsidiaries to, do any of the following without the prior written
consent of Parent:
     (i) (A) acquire, sell, lease, transfer, encumber or permit to be subject to
any Lien or dispose of any assets, rights or securities that are material to the
Company and the Company Subsidiaries, taken as a whole, except for the sale or
transfer of inventory of the Company or the Company Subsidiaries in the ordinary
course of business, or (B) terminate, cancel or materially modify in a manner
adverse to the Company and the Company Subsidiaries, taken as a whole, any
Material Contract (other than extensions of existing credit facilities on terms
reasonably consistent with prior extensions) or enter into any Contract that
would have been a Material Contract if entered into prior to the date hereof;
     (ii) acquire by merging or consolidating with or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business, corporation, partnership, joint venture,
association or other business organization or division thereof;
     (iii) amend or propose to amend the Company Charter Documents or the
Subsidiary Documents, except as may be required in connection with the
consummation of the Transactions;
     (iv) declare, set aside, make or pay any dividend or other distribution
payable in cash, capital stock, property or otherwise with respect to any shares
of its capital stock;
     (v) purchase, redeem or otherwise acquire, or offer to purchase, redeem or
otherwise acquire, any shares of its capital stock, other equity securities,
other ownership interests or any options, warrants or rights to acquire any such
stock, securities or interests, except pursuant to the terms of such options,
warrants or other rights (including the Convertible Notes) that are outstanding
as of the date hereof;
     (vi) adjust, recapitalize, split, combine, subdivide or reclassify any
outstanding shares of its capital stock;
     (vii) issue, sell, encumber, dispose of or authorize, propose or agree to
the issuance, sale, encumbrance or disposition by the Company or any of the
Company Subsidiaries of, any shares of, or any options, warrants, convertible
notes or other rights of any kind to acquire any shares of, or any securities
convertible into or exchangeable for any shares of, its capital stock of any
class, or any other securities in respect of, in lieu of, or in substitution for
any class of its capital stock outstanding on the date hereof, except pursuant
to the terms of any options, warrants or rights of any kind to acquire any
shares of, or any securities convertible into or exchangeable for any shares of,
its capital stock that are outstanding as of the date hereof;

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     (viii) incur, or modify in any material respect the terms of, any
indebtedness for borrowed money, or assume, guarantee or endorse any such
indebtedness of another Person, except for any incurrence, assumption, guarantee
or endorsement of indebtedness in the ordinary course of business pursuant to
any credit facility of the Company existing on the date hereof;
     (ix) make any loans or advances, except to or for the benefit of the
Company Subsidiaries or to employees of the Company or the Company Subsidiaries
for business expenses in the ordinary course of business and not to exceed
$5,000 in the aggregate with respect to any individual employee;
     (x) other than to the extent required by a Company Employee Benefit Plan or
in a written contract or agreement in existence as of the date of this Agreement
and disclosed in Section 4.10 of the Company Disclosure Letter or as required by
applicable Law: (A) grant any awards under any Company Employee Benefit Plan
(including the grant of stock options, stock appreciation rights, stock based or
stock related awards, performance units or restricted stock or the removal of
existing restrictions in any Company Employee Benefit Plan or awards made
thereunder), (B) grant or increase any severance or termination pay to any
current or former director, executive officer, employee, consultant or
independent contractor of the Company or any Company Subsidiary, (C) execute any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any such individual, except for
(1) standard offer letters offering at-will employment and (2) employment
agreements in the Company’s customary form and providing for compensation not
exceeding the equivalent of $100,000 annually with employees outside the United
States, in each case in the ordinary course of business, (D) increase the
benefits payable under any existing severance or termination pay policies or
employment agreements, (E) hire any officers (or promote an employee into an
officer position) or increase the compensation, bonus or other benefits of
current or former directors, executive officers, employees, consultants or
independent contractors of the Company or any Company Subsidiary, (F) adopt or
establish any plan, policy, program or arrangement that would be considered a
Company Employee Benefit Plan if such plan, policy, program or arrangement were
in effect as of the date of this Agreement, or amend in any material respect any
existing Company Employee Benefit Plan, except for (1) standard offer letters
offering at-will employment and (2) employment agreements in the Company’s
customary form and providing for compensation not exceeding the equivalent of
$100,000 annually with employees outside the United States, in each case in the
ordinary course of business, (G) provide any material financial benefit to a
current or former director, executive officer, employee, consultant or
independent contractor of the Company or any Company Subsidiary not required by
any existing agreement or Company Employee Benefit Plan, except for compensation
or other benefits provided to newly hired employees or newly retained
consultants in the ordinary course of business, or (H) take any action to
accelerate the vesting or payment of any compensation or benefit under any
Company Employee Benefit Plan or to fund or in any other way secure the payment
of compensation or benefits under any Company Employee Benefit Plan or make any
material determinations not in the ordinary course of business under any Company
Employee Benefit Plan;

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     (xi) execute or amend (other than as required by existing employee benefit
plans or employment agreements or by applicable Law) in any material respect any
employment, consulting, severance, termination or indemnification agreement
between the Company or any of the Company Subsidiaries and any of their
respective directors, officers, agents, consultants, independent contractors or
employees, except for (1) standard offer letters offering at-will employment and
(2) employment agreements in the Company’s customary form and providing for
compensation not exceeding the equivalent of $100,000 annually with employees
outside the United States, in each case in the ordinary course of business, or
any collective bargaining agreement or other obligation to any labor
organization or employee incurred or entered into by the Company or any of the
Company Subsidiaries;
     (xii) make any changes in its reporting for Taxes or accounting methods
other than as required by GAAP or applicable Law; make or rescind any Tax
election; file any amended Tax Return with respect to any material Tax; make any
change to its method or reporting income, deductions, or other Tax items for Tax
purposes; settle or compromise any Tax liability or enter into any transaction
with an Affiliate outside the ordinary course of business if such transaction
would give rise to a material Tax liability;
     (xiii) settle, compromise or otherwise resolve any litigation or other
legal proceedings material to the Company and the Company Subsidiaries taken as
a whole or as would result in any liability in excess of the amount reserved
therefor or reflected on the balance sheets included in the Company Financial
Statements;
     (xiv) pay or discharge any claims, Liens or liabilities which are not
reserved for or reflected on the balance sheets included in the Company
Financial Statements, other than any claims, Liens or liabilities that are
reserved for or incurred in the ordinary course of business after the Balance
Sheet Date;
     (xv) adopt a plan of complete or partial liquidation (or resolutions
providing for or authorizing such liquidation), dissolution, merger,
consolidation, restructuring, recapitalization or reorganization of the Company
or any of the Company Subsidiaries (other than the Merger);
     (xvi) abandon, cease to prosecute, fail to maintain, sell, license, assign
or encumber any material Permit or other material assets;
     (xvii) with respect to Intellectual Property, except in the ordinary course
of business, (A) sell, assign, license, sublicense, encumber, impair, abandon,
fail to maintain, transfer or otherwise dispose of any right, title or interest
of the Company or any of the Company Subsidiaries in any Company Intellectual
Property, (B) grant, extend, amend, waive, cancel or modify any rights in or to
the Company Intellectual Property, or (C) divulge, furnish to or make accessible
any Trade Secrets within Company Intellectual Property to any Person who is not
subject to an enforceable written agreement to maintain the confidentiality of
such Trade Secrets;

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     (xviii) enter into any Contract that would result in the grant to the
Company or any of the Company Subsidiaries of any right or license in the
Intellectual Property of any Person, or amend, assign, terminate or fail to
exercise a right of renewal or extension under Contract related to Company
Intellectual Property, except in the ordinary course of business;
     (xix) authorize any new capital expenditures, except (A) for the
replacement of broken but necessary equipment of the Company and the Company
Subsidiaries and not to exceed $100,000 in the aggregate and (B) for other new
capital expenditures not to exceed $50,000 in the aggregate;
     (xx) fail to use reasonable best efforts to keep in full force and effect
all insurance policies maintained by the Company and the Company Subsidiaries;
     (xxi) enter into any agreement, arrangement or commitment that materially
limits or otherwise materially restricts the Company or any Company Subsidiary,
or that would reasonably be expected to, after the Effective Time, materially
limit or restrict Parent or any of its Subsidiaries or any of their respective
Affiliates or any successor thereto, from engaging or competing in any line of
business in which it is currently engaged or in any geographic area material to
the business or operations of Parent or any of its Subsidiaries; or
     (xxii) take or agree in writing or otherwise to take any of the actions
precluded by Section 6.1(b).
ARTICLE 7
ADDITIONAL AGREEMENTS
          SECTION 7.1. Preparation of Proxy Circular; Stockholders Meeting.
          (a) The Company shall, as soon as practicable following the date
hereof (and in any event within 10 days after the date of this Agreement),
prepare and mail to the stockholders of the Company a proxy circular in
connection with the Company Stockholders Meeting (the “Proxy Circular”). Parent,
Merger Sub and the Company shall cooperate and consult with each other and their
respective counsel in the preparation of the Proxy Circular. The Company shall
ensure that the Proxy Circular does not, as of the date on which it is
distributed to the stockholders of the Company, and as of the date of the
Company Stockholders Meeting, 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.
          (b) As soon as practicable following the date hereof, the Company
shall take all action necessary to establish a record date for, duly call, give
notice of, convene and hold a meeting of its stockholders (the “Company
Stockholders Meeting”) for the purpose of seeking the Required Company
Stockholder Vote, regardless of whether a Company Adverse Recommendation Change
shall have occurred. The Company shall, through the Company Board, recommend to
its stockholders that they adopt this Agreement and give the Required Company
Stockholder Vote (the “Company Recommendation”) until and unless a Company

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Adverse Recommendation Change shall have occurred. Unless a Company Adverse
Recommendation Change shall have occurred, the Company shall include the Company
Recommendation in the Proxy Circular and use its reasonable best efforts to
(i) solicit from stockholders of the Company proxies in favor of the adoption of
this Agreement and (ii) secure the Required Company Stockholder Vote. Once the
Company Stockholders Meeting has been called and noticed, the Company shall not
postpone or adjourn the Company Stockholders Meeting without the consent of
Parent, other than (i) for the absence of a quorum or (ii) to allow reasonable
additional time for the filing and mailing of any supplemental or amended
disclosure which it believes in good faith is necessary under applicable Law and
for such supplemental or amended disclosure to be disseminated and reviewed by
the Company’s stockholders prior to the Company Stockholders Meeting; provided,
however, that in the event that the Company Stockholders Meeting is delayed to
or after the second Business Day before the Outside Date as a result of either
(i) or (ii) above, then the Outside Date shall be extended to the fifth Business
Day after such date.
          (c) Notwithstanding the foregoing, Parent shall have the right to
require the Company to postpone or adjourn the Company Stockholders Meeting to a
later date if, in Parent’s sole and absolute discretion, such postponement or
adjournment is advisable in order to solicit additional stockholder support in
favor of the adoption of this Agreement and to obtain the Required Company
Stockholder Vote. Any such postponement or adjournment shall not affect the
Company Recommendation; provided, however, that such postponement or adjournment
shall not extend beyond September 30, 2009.
          (d) Parent shall cause all shares of Company Common Stock owned by
Parent or Merger Sub, if any, to be voted in favor of the adoption of the
Agreement.
          SECTION 7.2. Public Statements. Each of the Company, Parent and Merger
Sub agrees that no public release or announcement concerning the Transactions
shall be issued by any party without the prior written consent of the Company
and Parent (which consent shall not be unreasonably withheld or delayed), except
as such release or announcement may be required by Law or the rules or
regulations of any applicable Governmental Authority to which the relevant party
is subject or submits, wherever situated, in which case the party required to
make the release or announcement shall use its reasonable best efforts to allow
each other party reasonable time to comment on such release or announcement in
advance of such issuance, it being understood that the final form and content of
any such release or announcement, to the extent so required, shall be at the
final discretion of the disclosing party. The parties agree that the initial
press release to be issued with respect to the Transactions shall be in the form
agreed by the parties.
          SECTION 7.3. Standard of Efforts. Subject to the terms and conditions
provided herein, each of the Company, Parent and Merger Sub agrees to use its
reasonable best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective as
promptly as commercially practicable, the Merger and the other Transactions,
including (i) obtaining all permits, consents, waivers, approvals,
authorizations and actions or nonactions required for or in connection with the
consummation by the parties hereto of the Merger and the other Transactions,
(ii) the taking of all steps as may be

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necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, a Governmental Authority, (iii) the obtaining of all necessary
consents or waivers from third parties, and (iv) the execution and delivery of
any additional instruments necessary to consummate the Merger and the other
Transactions and to fully carry out the purposes of this Agreement. The Company
shall have the right to review and approve in advance all characterizations of
the information relating to the Company; Parent shall have the right to review
and approve in advance all characterizations of the information relating to
Parent or Merger Sub; and each of the Company and Parent shall have the right to
review and approve in advance all characterizations of the information relating
to the Transactions, in each case which appear in any material filing (including
the Proxy Statement) made in connection with the Transactions. The Company,
Parent and Merger Sub agree that they will consult with each other with respect
to the obtaining of all such necessary permits, consents, waivers, approvals and
authorizations of all third parties and Governmental Authorities.
          SECTION 7.4. Notification of Certain Matters.
          (a) The Company shall give prompt notice to Parent and Merger Sub of
(a) any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
Transactions, (b) any Company Material Adverse Effect or the occurrence or
existence of any event which, individually or in the aggregate, would reasonably
be likely to have a Company Material Adverse Effect, or (c) the occurrence or
existence of any event that results, or with the passage of time or otherwise,
would reasonably be likely to result, in the failure of any condition set forth
in Section 8.2(a) or (b) of this Agreement; provided, however, that the delivery
of notice pursuant to this Section 7.4(a) shall not limit or otherwise affect
the remedies available hereunder to Parent.
          (b) Parent shall give prompt notice to the Company of (a) any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the Transactions, (b) any
Parent Material Adverse Effect or the occurrence or existence of any event
which, individually or in the aggregate, would reasonably be likely to have a
Parent Material Adverse Effect, or (c) the occurrence or existence of any event
that results, or with the passage of time or otherwise, would reasonably be
likely to result, in the failure of any condition set forth in Section 8.3(a) or
(b) of this Agreement; provided, however, that the delivery of notice pursuant
to this Section 7.4(b) shall not limit or otherwise affect the remedies
available hereunder to the Company.
          SECTION 7.5. Access to Information; Confidentiality.
          (a) The Company shall, and shall cause the Company Subsidiaries and
the officers, directors, employees and agents of the Company and the Company
Subsidiaries, to, afford the officers, employees and agents of Parent and Merger
Sub, at their sole cost and risk, reasonable access at all reasonable times from
the date hereof through the Effective Date to its officers, employees, agents,
properties, facilities, books, records, contracts and other assets and shall
promptly furnish Parent and Merger Sub all financial, operating and other data
and information as Parent and Merger Sub through their officers, employees or
agents, may from time to time reasonably request. Parent and Merger Sub, at
their sole cost and risk, shall have the right to make such due diligence
investigations as Parent and Merger Sub shall deem

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necessary or reasonable, upon reasonable notice to the Company and without
significant interference to Company’s operations or properties. No additional
investigations or disclosures shall affect the Company’s representations and
warranties contained herein, or limit or otherwise affect the remedies available
to Parent and Merger Sub pursuant to this Agreement.
          (b) The provisions of the Confidentiality Agreement shall remain in
full force and effect in accordance with its terms; provided, however, that the
provisions of paragraphs 3, 6, 8 and 11 of the Confidentiality Agreement shall
be superseded by the terms of this Agreement; provided further, however, that,
notwithstanding the foregoing proviso, upon the termination of this Agreement,
paragraph 6 of the Confidentiality Agreement shall have full force and effect.
          SECTION 7.6. No Solicitation.
          (a) The Company shall, and shall cause the Company Subsidiaries and
the Company’s and the Company Subsidiaries’ respective directors, officers,
employees, investment bankers, financial advisors, attorneys, accountants,
agents and other representatives (collectively, “Representatives”) to,
immediately cease and cause to be terminated any discussions or negotiations
with any Person other than Parent conducted heretofore with respect to a
Takeover Proposal, promptly request and use reasonable best efforts to obtain
the return from all such Persons or cause the destruction of all copies of
confidential information previously provided to such Persons by the Company, the
Company Subsidiaries or Representatives to the extent any confidentiality
agreement with such Person so provides. From the date of this Agreement until
the Effective Time or, if earlier, the termination of this Agreement in
accordance with its terms, the Company shall not, nor shall it permit any of the
Company Subsidiaries to, nor shall it authorize or permit any Representative to,
directly or indirectly, (i) solicit, initiate, or take any action to knowingly
facilitate or encourage (including by way of furnishing information) the
submission of, any Takeover Proposal, (ii) approve or recommend any Takeover
Proposal, enter into any agreement, agreement-in-principle or letter of intent
with respect to or accept any Takeover Proposal (or resolve to or publicly
propose to do any of the foregoing), or (iii) participate or engage in any
discussions or negotiations regarding, or furnish to any Person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Takeover Proposal; provided, however, that if in response to an
unsolicited, bona fide written Takeover Proposal made after the date hereof in
circumstances not involving a breach of this Agreement, the Company Board
reasonably determines in good faith (after consultation with outside counsel and
receiving the advice of the Company Financial Advisor or another financial
advisor of nationally recognized reputation) that such Takeover Proposal
constitutes a Superior Proposal and with respect to which the Company Board
determines in good faith, after consulting with and receiving the advice of
outside counsel, that the failure to take such action does or would constitute a
breach of the Company Board’s fiduciary duties to the Company’s stockholders
under Delaware law, then the Company may at any time prior to the receipt of the
Required Company Stockholder Vote (but in no event after such time), (x) furnish
information with respect to the Company and the Company Subsidiaries to the
Person making such Takeover Proposal and its Representatives, but only pursuant
to a confidentiality agreement in customary form that is no less favorable to
the Company than the Confidentiality Agreement; provided, however, that (1) such
confidentiality agreement may not include any provision calling for an exclusive
right to negotiate with the Company, (2) the Company provides Parent

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with not less than 24 hours prior notice of its intention to enter into such
confidentiality agreement, and (3) the Company advises Parent of all such
information delivered to such Person concurrently with its delivery to such
Person and concurrently with its delivery to such Person the Company delivers to
Parent all such information not previously provided to Parent, (y) conduct
discussions or negotiations with such Person regarding such Takeover Proposal,
and (z) to the extent permitted pursuant to and in compliance with
Section 9.1(h), enter into a binding written agreement concerning a transaction
that constitutes a Superior Proposal. The Company shall ensure that its
Representatives are aware of the provisions of this Section 7.6(a). Without
limiting the foregoing, it is agreed that any violation of the foregoing
restrictions by the Company Subsidiaries or any Representative of the Company or
any Company Subsidiary shall be deemed to be a breach of this Section 7.6 by the
Company. The Company shall provide Parent with a correct and complete copy of
any confidentiality agreement entered into pursuant to this Section 7.6(a)
within 24 hours of the execution thereof.
          (b) In addition to the other obligations of the Company set forth in
this Section 7.6, the Company shall promptly advise Parent, orally and in
writing, and in no event later than 24 hours after receipt, if any proposal,
offer or inquiry is received by, any information is requested from, or any
discussions or negotiations are sought to be initiated or continued with, the
Company in respect of any Takeover Proposal, and shall, in any such notice to
Parent, indicate the identity of the Person making such proposal, offer or
inquiry and the terms and conditions of any proposals or offers or the nature of
any inquiries (and shall include with such notice copies of any written
materials received from or on behalf of such Person relating to such proposal,
offer or inquiry), and thereafter shall promptly keep Parent informed of all
material developments affecting the status and terms of any such proposals,
offers or inquiries (and the Company shall provide Parent with copies of any
additional written materials received that relate to such proposals, offers or
inquiries) and of the status of any such discussions or negotiations.
          (c) Except as expressly permitted by this Section 7.6(c), neither the
Company Board nor any committee thereof shall (i) fail to make, withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent, the Company Recommendation or the approval or declaration of
advisability by the Company Board of this Agreement, the Merger and the other
Transactions, (ii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal or (iii) cause or permit the Company to enter
into any letter of intent, memorandum of understanding, agreement in principle,
acquisition agreement, merger agreement, option agreement, joint venture
agreement, partnership agreement or other agreement constituting or related to,
or which is intended to or is reasonably likely to lead to, any Takeover
Proposal, or resolve or agree to take any such action (any failure or action
described in clause (i), (ii) or (iii) being referred to as a “Company Adverse
Recommendation Change”). Notwithstanding the foregoing, the Company Board may,
prior to the receipt of the Required Company Stockholder Vote, (x) withdraw or
modify the Company Recommendation, (y) recommend a Takeover Proposal that
constitutes a Superior Proposal, or (z) to the extent permitted pursuant to and
in compliance with Section 9.1(h), enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal, if, in each case,
the Company Board determines in good faith, after consulting with and receiving
advice from outside counsel, that the failure of the Company Board to make such
Company Adverse Recommendation Change does or would constitute a breach of the
Company Board’s fiduciary

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duties to the Company’s stockholders under Delaware law; provided, however, that
no Company Adverse Recommendation Change may be made in the absence of a
Superior Proposal and until the fifth Business Day following Parent’s receipt of
written notice from the Company advising Parent that the Company Board intends
to take such action and specifying the reasons therefor, including the terms and
conditions of any Superior Proposal that is the basis for the proposed action by
the Company Board, and compliance by the Company with the provisions of
Section 9.1(h).
          (d) Nothing in this Section 7.6 shall prohibit the Company Board from
making any required disclosure to the Company’s stockholders if in each case the
Company Board determines in good faith, after consultation with outside counsel,
that the taking of such position or the making of such disclosure is necessary
in order for the Company Board to comply with its fiduciary duties to its
stockholders under Delaware law or other applicable Law; provided, however, that
in no event shall the Company, the Company Board or any committee thereof take,
or agree or resolve to take, any action prohibited by Section 7.6(c). Any
disclosure made pursuant to this Section 7.6(d) shall be deemed to be a Company
Adverse Recommendation Change unless the Company Board expressly reaffirms the
Company Recommendation.
          SECTION 7.7. Indemnification and Insurance; Employment Agreements.
          (a) Parent and Merger Sub agree that all rights to indemnification by
the Company now existing in favor of each Person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the Effective Time an
employee, officer or director of the Company or any Company Subsidiary (each an
“Indemnified Party”), as provided in the Company Charter Documents, in each case
as in effect on the date of this Agreement, or pursuant to any other agreements
in effect on the date hereof, copies of which have been provided to Parent,
shall be assumed by the Surviving Corporation in the Merger, without further
action, at the Effective Time and shall survive the Merger and shall remain in
full force and effect in accordance with their terms. Parent shall cause the
Surviving Corporation and any successor thereto to comply and not take any
action inconsistent with this Section 7.7(a).
          (b) Parent shall cause the Surviving Corporation and any successor
thereto to maintain the Company’s officers’ and directors’ liability insurance
policies and surety bonds procured by the Company in respect of the employees
who are licensed contractors and listed on Exhibit C hereto (complete and
accurate copies of which have been previously provided to Parent), in effect on
the date of this Agreement (the “D&O Insurance”), for a period of not less than
six years after the Effective Time, but only to the extent related to actions or
omissions prior to the Effective Time; provided, however, that (i) the Surviving
Corporation and any successor thereto may substitute therefor policies of at
least the same coverage and amounts containing terms no less advantageous to
such former directors or officers and (ii) such substitution shall not result in
gaps or lapses of coverage with respect to matters occurring prior to the
Effective Time; provided further, however, that in no event shall Parent, the
Surviving Corporation and any successor thereto be required to expend more than
an amount per year equal to 150% of current annual premiums paid by the Company
for such insurance (the “Maximum Amount”) to maintain or procure insurance
coverage pursuant hereto; provided further, however, that if the amount of the
annual premiums necessary to maintain or procure such insurance coverage exceeds
the

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Maximum Amount, Parent, the Surviving Corporation or any successor thereto shall
procure and maintain for such six-year period as much coverage as reasonably
practicable for the Maximum Amount; provided further, however, that Parent shall
offer to each beneficiary of the D&O Insurance, with reasonable notice, the
opportunity to reimburse Parent for the difference between the annual premiums
necessary to maintain or procure such insurance coverage for such beneficiary
and the Maximum Amount, and Parent shall procure such insurance coverage upon
acceptance of such offer by any beneficiary. Parent shall have the option to
cause coverage to be extended under the Company’s D&O Insurance by obtaining a
six-year “tail” policy or policies on terms and conditions no less advantageous
than the Company’s existing D&O Insurance and that are prepaid and
noncancelable, and such “tail” policy or policies shall satisfy the foregoing
provisions of this Section 7.7(b).
          (c) Parent shall cause the Surviving Corporation and any successor
thereto to comply with the Contracts set forth on Schedule 7.7(c).
          (d) The obligations of Parent, the Surviving Corporation and any
successor thereto under this Section 7.7 shall survive the consummation of the
Merger and shall not be terminated or modified in such a manner as to adversely
affect any Indemnified Party to whom this Section 7.7 applies without the
consent of such affected Indemnified Party (it being expressly agreed that the
Indemnified Parties to whom this Section 7.7 applies shall be third party
beneficiaries of this Section 7.7, each of whom may enforce the provisions of
this Section 7.7).
          SECTION 7.8. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in, but not control, the defense or settlement of any
stockholder litigation against the Company and/or its directors relating to the
Merger or any of the other Transactions, and no such settlement shall be agreed
to without Parent’s prior written consent (which consent shall not be
unreasonably withheld or delayed).
          SECTION 7.9. De-listing of Company Common Stock. The Company shall, as
soon as practicable following the date hereof, take all such steps that may be
required in accordance with the AIM Rules for Companies to give effect to the
cancellation of the admission of the Company Common Stock to trading on AIM,
conditional upon Closing and effective from the Effective Date.
          SECTION 7.10. Merger Sub Compliance. Parent shall cause Merger Sub to
comply with all of Merger Sub’s obligations under or relating to this Agreement.
Merger Sub shall not engage in any business that is not in connection with or
incident to the Transactions.
ARTICLE 8
CONDITIONS
          SECTION 8.1. Conditions to Each Party’s Obligation To Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or, to the extent permitted by applicable Law,
waiver on or prior to the Closing Date of each of the following conditions:

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          (a) Stockholder Approval. This Agreement shall have been adopted by
the Required Company Stockholder Vote.
          (b) No Injunctions. No injunction issued by a court of competent
jurisdiction shall be in effect that would make the Merger or the other
Transactions illegal or otherwise prevent the consummation thereof; provided,
however, that the party seeking to assert this condition shall have complied
with the provisions of Section 7.3.
          SECTION 8.2. Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are further subject to
the satisfaction, or to the extent permitted by applicable Law, the waiver on or
prior to the Closing Date of each of the following conditions:
          (a) Representations and Warranties. Each of the representations and
warranties made by the Company set forth herein shall be true and correct on and
as of the Closing Date as though made on and as of the Closing Date, except
     (i) for any failure to be so true and correct that, individually or in the
aggregate, has not had and would not reasonably be expected to have or
constitute a Company Material Adverse Effect (it being understood that for all
purposes of determining the accuracy of such representations and warranties, all
references to the term “Company Material Adverse Effect” and materiality
qualifications and other qualifications based on the word “material” contained
in such representations and warranties, except for the representations and
warranties set forth in Section 4.7, shall be disregarded); provided, however,
that
(A) the representations and warranties contained in Section 4.2 shall be so true
and correct except (1) in de minimis respects and (2) to the extent that such
representations and warranties are not true and correct as a result of any
action permitted by Section 6.1(b),
(B) the representations and warranties contained in the first three sentences of
Section 4.1(a), Section 4.3(a), Section 4.3(b), Section 4.3(c)(i), Section 4.4
and Section 4.21 shall be so true and correct, and
(C) the representations and warranties contained in Section 4.3(d),
Section 4.14(a) and Section 4.23 shall be so true and correct except for any
failure to be so true and correct that, individually or in the aggregate,
(x) has not had and would not reasonably be expected to have a Company Material
Adverse Effect (it being understood that for all purposes of determining the
accuracy of such representations and warranties, all references to the term
“Company Material Adverse Effect” and materiality qualifications and other
qualifications based on the word “material” contained in such representations
and warranties shall be disregarded) or (y) would be reasonably expected to be
material to Parent and its Subsidiaries, taken as a whole, after the Closing;
and

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     (ii) for those representations and warranties which address matters only as
of a particular date, which representations and warranties shall have been true
and correct in accordance with the standard described in clause (i) above as of
such particular date.
          (b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all of the obligations, and complied in all
material respects with the agreements and covenants, required to be performed by
or complied with by it under this Agreement at or prior to the Closing Date.
          (c) Certificates. Parent and Merger Sub shall have received
certificates executed on behalf of the Company by the chief executive officer or
chief financial officer of the Company, certifying that the conditions set forth
in Sections 8.2(a) and (b) have been satisfied.
          (d) Litigation. There shall not be pending or threatened (i) any
Proceeding brought by a Governmental Authority (A) seeking to restrain or
prohibit the consummation of the Transactions, (B) seeking to prohibit or limit
in any material respect the ownership or operation by the Company, Parent or any
of their respective Subsidiaries of any material portion of the business or
assets of the Company, Parent or any of their respective Subsidiaries, or to
compel the Company, Parent or any of their respective Subsidiaries to dispose of
or hold separate any material portion of the business or assets of the Company,
Parent or any of their respective Subsidiaries, as a result of any Transaction,
or (C) seeking to prohibit Parent or any of its Subsidiaries from effectively
controlling the business or operations of the Company and the Company
Subsidiaries, or (ii) any Proceeding which otherwise is reasonably likely to
have a Company Material Adverse Effect.
          (e) Absence of Material Adverse Effect. Since the date of this
Agreement, there shall not have occurred any event or events that, individually
or in the aggregate, has had or would reasonably be expected to have, a Company
Material Adverse Effect.
          (f) FIRPTA Certificate. Parent shall have received a FIRPTA
Notification Letter addressed to Parent, dated as of the Closing Date and duly
executed by the Company and satisfying each of the requirements of Treasury
Regulations Section 1.897-2(h) and stating that the Company has not been for the
relevant period set forth in Section 897(c)(1) of the Code a “United States real
property holding corporation” as defined in Section 897(c)(2) of the Code.
          SECTION 8.3. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction, or
to the extent permitted by applicable Law, the waiver on or prior to the Closing
Date of each of the following conditions:
          (a) Representations and Warranties. Each of the representations and
warranties made by Parent and Merger Sub set forth herein shall be true and
correct on and as of the Closing Date as though made on and as of the Closing
Date, except
     (i) for any failure to be so true and correct that, individually or in the
aggregate, has not had and would not reasonably be expected to have or
constitute a Parent Material Adverse Effect (it being understood that for all
purposes of determining the accuracy of such representations and warranties, all
references to the term “Parent Material Adverse Effect” and materiality
qualifications and other qualifications based on

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the word “material”contained in such representations and warranties shall be
disregarded); and
     (ii) for those representations and warranties which address matters only as
of a particular date, which representations and warranties shall have been true
and correct in accordance with the standard described in clause (i) above as of
such particular date.
          (b) Performance of Obligations of Parent and Merger Sub. Parent and
Merger Sub shall have performed in all material respects all of the obligations,
and complied in all material respects with the agreements and covenants,
required to be performed by or complied with by them under this Agreement at or
prior to the Closing Date.
          (c) Certificates. The Company shall have received certificates
executed on behalf of Parent by the chief executive officer or chief financial
officer of Parent, certifying that the conditions set forth in Sections 8.3(a)
and (b) have been satisfied.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
          SECTION 9.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after this Agreement has been adopted by the Required Company Stockholder
Vote:
          (a) by mutual written consent of Parent, Merger Sub and the Company;
          (b) by either the Company or Parent, if the Merger has not been
consummated on or prior to October 31, 2009 (the “Outside Date”); provided,
however, that the right to terminate this Agreement pursuant to this
Section 9.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
Merger not being consummated on or prior to the Outside Date;
          (c) by either the Company or Parent, if any Judgment issued by a court
of competent jurisdiction or by a Governmental Authority, or Law or other legal
restraint or prohibition in each case making the Merger illegal or permanently
restraining, enjoining or otherwise preventing the consummation thereof shall be
in effect and shall have become final and nonappealable; provided, however, that
the party seeking the right to terminate this Agreement pursuant to this Section
9.1(c) shall have complied with the provisions of Section 7.3 and the right to
terminate pursuant to this Section 9.1(c) shall not be available if the issuance
of such legal restraint or prohibition was primarily due to the failure of such
party to perform any of its obligations under this Agreement;
          (d) by either the Company or Parent, if upon a vote at a duly held
Company Stockholders Meeting the Required Company Stockholder Vote shall not
have been obtained;
          (e) by Parent, if prior to the receipt of the Required Company
Stockholder Vote (i) a Company Adverse Recommendation Change shall have
occurred, (ii) the Company Board or any committee thereof shall not have
recommended that the Company’s stockholders reject any tender or exchange offer
that is commenced or a Takeover Proposal (replacing “15%”

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in the definition thereof with 50%) that is made in writing to the Company Board
and publicly disseminated within 10 Business Days of the commencement or public
dissemination thereof (including, for these purposes, by taking no position with
respect to the acceptance by the Company’s stockholders of a tender offer or
exchange offer within such period, which shall constitute a failure to recommend
that the Company’s stockholders reject such offer), or (iii) the Company shall
have violated or breached in any material respect any of its obligations under
Section 7.6;
          (f) by Parent, if (i) there shall have occurred any event, condition,
change, effect, occurrence or development of a state of facts that, individually
or in the aggregate, has had or would reasonably be expected to have, a Company
Material Adverse Effect that is incapable of being cured or has not been cured
by the Company within 20 calendar days after written notice has been given by
Parent to the Company of such Company Material Adverse Effect, or (ii) the
Company shall have breached any of its representations or warranties or failed
to perform in any material respect any of its covenants or other agreements in
each case contained in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section 8.2, and
(B) is incapable of being cured or has not been cured by the Company within 20
calendar days after written notice has been given by Parent to the Company of
such breach or failure to perform;
          (g) by the Company, if Parent shall have breached any of its
representations or warranties or failed to perform in any material respect any
of its covenants or other agreements in each case contained in this Agreement,
which breach or failure to perform (i) has had or would reasonably be expected
to have a Parent Material Adverse Effect, and (ii) is incapable of being cured
or has not been cured by Parent within 20 calendar days after written notice has
been given by the Company to Parent of such breach or failure to perform; or
          (h) by the Company, if prior to the receipt of the Required Company
Stockholder Vote, (i) the Company is in compliance with its obligations under
Section 7.6, (ii) the Company Board has received a Takeover Proposal that it has
determined in good faith, after consultation with the Company Financial Advisor
or another financial advisor of nationally recognized reputation and outside
counsel, constitutes a Superior Proposal, (iii) the Company has notified Parent
in writing that it intends to enter into a definitive agreement implementing
such Superior Proposal, attaching the most current version of such agreement
(including any amendments, supplements or modifications) to such notice (a
“Superior Proposal Notice”), (iv) during the five Business Day period following
Parent’s receipt of a Superior Proposal Notice, (A) the Company shall have
offered to negotiate with (and, if accepted, negotiated in good faith with), and
shall have caused its respective financial and legal advisors to offer to
negotiate with (and, if accepted, negotiate in good faith with), Parent in
making adjustments to the terms and conditions of this Agreement and (B) the
Company Board shall have determined in good faith, after the end of such five
Business Day period, and after considering the results of such negotiations and
the revised proposals made by Parent, if any, that the Superior Proposal giving
rise to such notice continues to be a Superior Proposal; provided, however, that
any amendment, supplement or modification to the financial terms or other
material terms of any Takeover Proposal shall be deemed a new Takeover Proposal
and the Company may not terminate this Agreement pursuant to this Section 9.1(h)
unless the Company has complied with the requirements of this Section 9.1(h)
with respect to such new Takeover Proposal, including

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sending a Superior Proposal Notice with respect to such new Takeover Proposal
and offering to negotiate for five Business Days from such new Superior Proposal
Notice, (v) the Company prior to, or concurrently with, such termination pays to
Parent in immediately available funds the fee required to be paid pursuant to
Section 9.3(b)(iv), and (vi) the Company Board concurrently approves, and the
Company concurrently enters into, a definitive agreement providing for the
implementation of such Superior Proposal.
The party desiring to terminate this Agreement shall give written notice of such
termination to the other party.
          SECTION 9.2. Effect of Termination. Upon the termination of this
Agreement pursuant to Section 9.1, this Agreement shall forthwith become null
and void and there shall be no liability or obligation on the part of any party
hereto, except for the provisions of (i) the provisos in Sections 7.4(a) and
7.4(b), (ii) the last sentence of Section 7.5(a), (iii) Section 7.5(b), (iv)
this Section 9.2, (v) Section 9.3, and (vi) Article 10, which shall survive such
termination; provided, however, that nothing herein shall relieve any party from
liability for any breach of this Agreement prior to such termination.
          SECTION 9.3. Fees and Expenses.
          (a) Except as set forth in this Section 9.3, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not the Merger or any of the other
Transactions are consummated.
          (b) In the event that:
    (i) (A) a Takeover Proposal shall have been made to and publicly disclosed
by the Company or shall have been made directly to its stockholders generally or
any Person shall have publicly announced an intention to make a Takeover
Proposal and thereafter, (B) this Agreement is terminated by the Company or
Parent pursuant to Section 9.1(b) or (d) and (C) the Company enters into a
definitive agreement with respect to, or consummates a transaction contemplated
by, any Takeover Proposal (replacing “15%” in the definition thereof with “50%”)
within 12 months of the date this Agreement is terminated (so long as, in the
case of a transaction that has not been consummated within such period, such
transaction is thereafter consummated);
    (ii) (A) a Takeover Proposal shall have been made to and publicly disclosed
by the Company or shall have been made directly to its stockholders generally or
any Person shall have publicly announced an intention to make a Takeover
Proposal and thereafter, (B) this Agreement is terminated by Parent pursuant to
Section 9.1(f)(ii) because the Company failed to perform in any material respect
any of its covenants contained in this Agreement and (C) the Company enters into
a definitive agreement with the Person making such Takeover Proposal (or
publicly announcing an intention to make a Takeover Proposal) with respect to,
or consummates with the Person making the Takeover Proposal referred to in
subsection (A) a transaction that is contemplated by, a Takeover Proposal
(replacing “15%” in the definition thereof with “50%”) within 12 months of the
date this Agreement is terminated (so long as, in the case of a transaction

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that has not been consummated within such period, such transaction is thereafter
consummated);
     (iii) this Agreement is terminated by Parent pursuant to Section 9.1(e) (or
by the Company pursuant to Section 9.1(b) or (d) following any time at which
Parent was entitled to terminate this Agreement pursuant to Section 9.1(e)); or
     (iv) this Agreement is terminated by the Company pursuant to
Section 9.1(h);
then in any such event under clause (i), (ii), (iii) or (iv) of this
Section 9.3(b), the Company shall pay to Parent a termination fee of $112,360
(the “Termination Fee”), plus an additional amount equal to the Expenses of
Parent; provided, however, that Parent is obligated to pay and has actually and
reasonably incurred such Expenses; provided further, however, that in no event
shall the aggregate amount payable by the Company in respect of Expenses of
Parent exceed $337,080. Any payment required to be made pursuant to clause
(i) or clause (ii) of this Section 9.3(b) shall be made to Parent promptly
following the consummation of the transaction contemplated by the Takeover
Proposal referred to therein (and in any event not later than two Business Days
after delivery to the Company of notice of demand for payment); any payment
required to be made pursuant to clause (iii) of this Section 9.3(b) shall be
made to Parent promptly following termination of this Agreement by Parent as set
forth in such clause (iii) (and in any event not later than two Business Days
after delivery to the Company of notice of demand for payment) and any payment
required to be made pursuant to clause (iv) of this Section 9.3(b) shall be made
to Parent at the time provided for in clause (v) of Section 9.1(h). In
circumstances in which Expenses are payable or reimbursable pursuant to this
Section 9.3(b), such payment shall be made to Parent not later than two Business
Days after delivery to the Company of an itemization setting forth in reasonable
detail all Expenses of Parent (which itemization may be supplemented and updated
from time to time by Parent until the 60th day after Parent delivers such notice
of demand for payment). All such payments shall be made by wire transfer of
immediately available funds to an account to be designated by Parent.
          (c) The Company acknowledges that the agreement contained in
Section 9.3(b) is an integral part of the transactions contemplated by this
Agreement, and that, without that agreement, Parent would not enter into this
Agreement. If the Company fails to make payment of such fee within the
applicable time period specified in Section 9.3(b) and Parent commences a suit
to collect such fee, the Company shall indemnify and reimburse Parent for its
fees and expenses (including attorneys fees and expenses) incurred in connection
with such suit and shall pay interest on the amount of the payment at the prime
rate as published in The Wall Street Journal in effect on the date the fee was
payable pursuant to Section 9.3(b). After payment of such fee, the Company shall
have no further liability to Parent or Merger Sub hereunder.
          SECTION 9.4. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of the respective Boards of Directors of
the Company, Parent and Merger Sub at any time prior to the Effective Time,
whether before or after approval of this Agreement and the Transactions by the
stockholders of the Company; provided, however, that after any such approval by
the stockholders of the Company, no amendment shall be made that in any way
materially adversely affects the rights of such stockholders (other than a

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termination of this Agreement in accordance with the provisions hereof) without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
          SECTION 9.5. Waiver. Any failure of any of the parties to comply with
any obligation, covenant, agreement or condition herein may be waived at any
time prior to the Effective Time by any of the parties entitled to the benefit
thereof only by a written instrument signed by each such party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement or condition shall not
operate as a waiver of or estoppel with respect to, any subsequent or other
failure.
ARTICLE 10
GENERAL PROVISIONS
          SECTION 10.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by
overnight courier or by facsimile (upon confirmation of receipt) to the parties
at the following addresses or at such other addresses as shall be specified by
the parties by like notice:

     
(a)
  if to Parent or Merger Sub:
 
   
 
  Energy Conversion Devices, Inc.
 
  2956 Waterview Drive
 
  Rochester Hills, MI 48309
 
  Attention: General Counsel
 
  Fax: (248) 844-1214
 
   
 
  with a copy to:
 
   
 
  Covington & Burling LLP
 
  1201 Pennsylvania Avenue, N.W.
 
  Washington, DC 20004
 
  Attention: W. Andrew Jack
 
  Fax: (202) 778-5232
 
   
(b)
  if to the Company:
 
   
 
  Solar Integrated Technologies, Inc.
 
  17777 Center Court Drive
 
  Suite 150
 
  Cerritos, CA 90703
 
  Attention: Chief Executive Officer
 
  Fax: (323) 231-0517
 
   
 
  with a copy to:
 
   

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  Jones Day
 
  1755 Embarcadero Road
 
  Palo Alto, CA 94303
 
  Attn: Stephen E. Gillette
 
 
Daniel R. Mitz
 
  Fax: (650) 739-3900
 
   
 
  and to
 
   
 
  Jones Day
 
  21 Tudor Street
 
  London EC4Y 0DJ
 
  United Kingdom
 
  Attention: John R. Phillips
 
  Fax: +44.20.7039.5999

     Notice so given shall (in the case of notice so given by mail) be deemed to
be given when received and (in the case of notice so given by cable, telegram,
facsimile, telex or personal delivery) on the date of actual transmission or (as
the case may be) personal delivery.
          SECTION 10.2. Representations and Warranties. The representations and
warranties contained in this Agreement shall not survive the Merger.
          SECTION 10.3. Knowledge Qualifiers. “To the knowledge of the Company”
and similar phrases mean the actual conscious knowledge of, or the knowledge
that would reasonably be expected to be obtained based upon the position or
office of, any officer or director of the Company or any of the Company
Subsidiaries.
          SECTION 10.4. Interpretations. When a reference is made in this
Agreement to Articles, Sections or Exhibits, such reference shall be to an
Article, Section or Exhibit to this Agreement unless otherwise indicated. The
words “include,” “includes” and “including” when used herein shall be deemed in
each case to be followed by the words “without limitation.” Any references in
this Agreement to “the date hereof” refers to the date of execution of this
Agreement. The word “or” shall not be exclusive. The table of contents, index of
defined terms and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
          SECTION 10.5. Governing Law; Jurisdiction.
          (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
          (b) Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any state or federal court located in the State of
Delaware or in the Court of

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Chancery of the State of Delaware in the event any dispute arises out of this
Agreement, the Merger or any of the other Transactions, (ii) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (iii) agrees that it will not bring
any action relating to this Agreement or any of the Transactions in any court
other than a state or federal court located in the State of Delaware or the
Court of Chancery of the State of Delaware.
          (c) Each of the parties to this Agreement irrevocably waives any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or any of the Transactions.
          SECTION 10.6. Counterparts; Facsimile Transmission of Signatures. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, and delivered by means of facsimile
transmission or otherwise, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement.
          SECTION 10.7. Assignment; No Third Party Beneficiaries.
          (a) This Agreement and all of the provisions hereto shall be binding
upon and inure to the benefit of, and be enforceable by, the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations set forth herein shall be
assigned by any party hereto without the prior written consent of the other
parties hereto and any purported assignment without such consent shall be void,
except that Parent and Merger Sub, upon prior written notice to the Company, may
assign, in their sole discretion, any of or all of their respective rights,
interests and obligations under this Agreement to Parent or to any Affiliate of
Parent, but no such assignment shall relieve Parent or Merger Sub of any of
their respective obligations hereunder.
          (b) Nothing in this Agreement shall be construed as giving any Person,
other than the parties hereto and their heirs, successors, legal representatives
and permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof, except that from and after the Effective Time
each Indemnified Party, each beneficiary of the D&O Insurance and each
counterparty to the Company or a Company Subsidiary under the Contracts set
forth on Schedule 7.7(c) is an intended third party beneficiary of Section 7.7,
and such Persons and his or her heirs, executors, administrators and other legal
representatives (the “Third Party Beneficiaries”) may specifically enforce such
provisions. The rights of the Third Party Beneficiaries under Section 7.7 are in
addition to, and not in substitution for, any other rights that the Third Party
Beneficiaries may have by contract or otherwise. No covenant or other
undertakings in this Agreement shall constitute an amendment to any employee
benefit plan, program, policy or arrangement, and any covenant or undertaking
that suggests that an employee benefit plan, program, policy or arrangement will
be amended shall be effective only upon the adoption of a written amendment in
accordance with the amendment procedures of such plan, program, policy or
arrangement.
          SECTION 10.8. Severability. If any provision of this Agreement shall
be held to be illegal, invalid or unenforceable under any applicable Law, then
such contravention or

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invalidity shall not invalidate the entire Agreement. Such provision shall be
deemed to be modified to the extent necessary to render it legal, valid and
enforceable, and if no such modification shall render it legal, valid and
enforceable, then this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of the parties
shall be construed and enforced accordingly.
          SECTION 10.9. Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto), the Company Disclosure Letter and the
Confidentiality Agreement contain all of the terms of the understandings of the
parties hereto with respect to the subject matter hereof or thereof.
          SECTION 10.10. Enforcement. Notwithstanding any other provision of
this Agreement (including Section 9.2 and Section 9.3), the parties hereto agree
that irreparable damage would occur, damages would be difficult to determine and
would be an insufficient remedy and no other adequate remedy would exist at law
or in equity, in each case in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached (or any party hereto threatens such a breach). It is
accordingly agreed that, prior to any valid termination of this Agreement in
accordance with Section 9.1, (a) each party shall be entitled at its election to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity, (b) the parties waive any
requirement for the securing or posting of any bond, guarantee or other
undertaking in connection with the obtaining of any specific performance or
injunctive relief and (c) the parties will waive, in any action for specific
performance, the defense of adequacy of a remedy at law. Either party’s pursuit
of specific performance at any time will not be deemed an election of remedies
or waiver of the right to pursue any other right or remedy to which such party
may be entitled, including without limitation the right to pursue remedies for
liabilities or damages incurred or suffered by such party in the case of a
breach of this Agreement involving fraud or willful or intentional misconduct.
[The remainder of this page is intentionally blank.]

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          IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be executed as of the date first written above.

            Solar Integrated Technologies, Inc.
      By:         Name:           Title:           Energy Conversion Devices,
Inc.
      By:         Name:           Title:             SIT Acquisition Co.
      By:         Name:           Title:        

[Signature Page to Merger Agreement]

 

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SCHEDULE I
Voting Agreement Stockholders
Brian E. Caffyn
Bruce M. Khouri
R. Randall MacEwen
David R.W. Potter

 

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SCHEDULE II
Company Material Adverse Effect Exclusions
1. The matters referred to as the Known Product Issue Disclosures (as defined in
the Company Disclosure Letter), excluding the first paragraph of such Known
Product Issue Disclosures.
2. Claims or defaults arising from the Supply and Cooperation Agreement, dated
as of April 28, 2008, between the Company and United Solar Ovonic LLC.

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EXHIBIT A
Voting Agreement
[See attached]

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EXHIBIT B
Form of Letter of Transmittal
[See attached]

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EXHIBIT C
Licensed Contractors
John Bernard Haley Jr.
Bruce M. Khouri

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