EXECUTION
COPY
  Exhibit 2.2
 AGREEMENT
AND PLAN OF REORGANIZATION
 BY
AND AMONG
 BIOSCOPIX,
INC.
 SENSIVIDA
ACQUISITION CORP.
 AND
 SENSIVIDA
MEDICAL SYSTEMS, INC.
  Dated
as of November 5, 2008
  
  TABLE
OF CONTENTS
  PageARTICLE
      I THE MERGER
                    21.1
                    The
      Merger
                    21.2
                    Effective
      Time
                    21.3
                    Effect
      of the Merger
                    21.4
                    Organizational
      Documents
                    21.5
                    Directors
      and Officers
                    31.6
                    Effect
      of the Merger on the Capital Stock of the Constituent
      Corporations
                    31.7
                    Dissenting
      Shares
                    61.8
                    Surrender
      of Certificates
                    71.9
                    No
      Further Ownership Rights in Company Capital Stock
                    81.10
                    Lost,
      Stolen or Destroyed Certificates
                    81.11
                    Tax
      Consequences
                    81.12
                    Taking
      of Necessary Action; Further Action
                    8ARTICLE
      II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                    92.1
                    Organization
      of the Company
                    92.2
                    Company
      Capital Structure
                    92.3
                    Subsidiaries
                    102.4
                    Authority
                    112.5
                    No
      Conflict
                    122.6
                    Consents
                    122.7
                    Company
      Financial Statements
                    132.8
                    No
      Undisclosed Liabilities
                    132.9
                    No
      Changes
                    132.10
                    Accounts
      Receivable
                    132.11
                    Tax
      Matters
                    142.12
                    Restrictions
      on Business Activities
                    162.13
                    Title
      to Properties; Absence of Liens and Encumbrances; Condition of
      Equipment
                    172.14
                    Intellectual
      Property
                    182.15
                    Agreements,
      Contracts and Commitments
                    182.16
                    Interested
      Party Transactions
                    202.17
                    Governmental
      Authorization
                    202.18
                    Litigation
                    202.19
                    Minute
      Books
                    212.20
                    Environmental
      Matters
                    212.21
                    Brokers’
      and Finders’ Fees; Third Party Expenses
                    222.22
                    Employee
      Benefit Plans and Compensation
                    222.23
                    Insurance
                    222.24
                    Compliance
      with Laws
                    222.25
                    Foreign
      Corrupt Practices Act
                    222.26
                    Warranties;
      Indemnities
                    222.27
                    Complete
      Copies of Materials
                    232.28
                    Representations
      Complete
                    23
  -i-
 TABLE
OF CONTENTS
 (continued)
  PageARTICLE
      III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
SUB
                        233.1
                        Organization
      and Standing
                        233.2
                        Authority
                        233.3
                        No
      Conflict; Required Filings and Consents
                        233.4
                        Parent
      Common Stock
                        243.5
                        SEC
      Documents; Parent Financial Statements
                        243.6
                        Litigation
                        243.7
                        Brokers’
      and Finders’ Fees
                        253.8
                        Merger
      Sub
                        25ARTICLE
      IV ADDITIONAL AGREEMENTS
                        254.1
                        Parent
      Board of Directors.
                        254.2
                        Access
      to Information
                        254.3
                        Confidentiality
                        254.4
                        Public
      Disclosure
                        264.5
                        Reasonable
      Efforts
                        264.6
                        Notification
      of Certain Matters
                        264.7
                        Termination
      of Stockholders Agreement and Investor Rights Agreement
                        274.8
                        Additional
      Documents and Further Assurances
                        274.9
                        Merger
      Notification
                        284.10
                        Consents
                        294.11
                        Restrictions
      on Transfer
                        294.12
                        Proprietary
      Information and Inventions Assignment Agreement
                        294.13
                        New
      Employment Benefits
                        294.14
                        Employment
      Agreements
                        304.15
                        Resignation
      of Officers and Directors
                        304.16
                        Reorganization
                        304.17
                        Release
      of Liens
                        304.18
                        FIRPTA
      Compliance
                        30ARTICLE
      V CONDITIONS TO THE MERGER
                        305.1
                        Conditions
      to Obligations of Each Party to Effect the Merger
                        305.2
                        Conditions
      to the Obligations of Parent and Merger Sub
                        315.3
                        Conditions
      to Obligations of the Company
                        33ARTICLE
      VI SURVIVAL OF REPRESENTATIONS AND WARRANTIES
                        346.1
                        Survival
      of Representations and Warranties
                        346.2
                        Indemnification
                        356.3
                        Maximum
      Payments; Remedy
                        35ARTICLE
      VII TERMINATION, AMENDMENT AND WAIVER
                        367.1
                        Termination
                        367.2
                        Effect
      of Termination
                        377.3
                        Amendment
                        37
  -ii-
 TABLE
OF CONTENTS
 (continued)
  Page7.4
                          Extension;
      Waiver
                          37ARTICLE
      VIII GENERAL PROVISIONS
                          378.1
                          Notices
                          378.2
                          Interpretation
                          388.3
                          Counterparts
                          388.4
                          Entire
      Agreement; Assignment
                          388.5
                          Severability
                          388.6
                          Other
      Remedies
                          388.7
                          No
      Third Party Beneficiaries
                          398.8
                          Governing
      Law; Exclusive Jurisdiction
                          398.9
                          Rules
      of Construction
                          398.10
                          Waiver
      of Jury Trial
                          39
 -iii-
  INDEX
OF EXHIBITS
  Exhibit
                          
                          DescriptionExhibit
      A
                          
                          Forms
      of Employment AgreementExhibit
      B
                          
                          Form
      of Stockholder Written ConsentExhibit
      C
                          
                          Form
      of Certificate of MergerSchedulesSchedule
      A
                          
                          Stockholders
      of the CompanySchedule
      4.16(a)
                          
                          LiensSchedule
      5.2(p)
                          
                          Foreign
      Qualifications
  -iv-
  CONFIDENTIAL
  THIS
AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made and
entered into as of November 5, 2008 by and among BioScopix, Inc., a New Jersey
corporation (“Parent”),
SensiVida Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent (“SensiVida Acquisition Corp.”),
and SensiVida Medical Systems, Inc., a Delaware corporation (the “Company”).
  RECITALS
  A.           The
Boards of Directors of each of Parent, Merger Sub and the Company believe it is
advisable and in the best interests of each company and its respective
stockholders that Parent acquire the Company through the statutory merger of
Merger Sub with and into the Company, upon the terms and conditions set forth
herein, and, in furtherance thereof, have approved this Agreement and the
transactions contemplated hereby.
  B.           Pursuant
to the Merger, among other things, and subject to the terms and conditions of
this Agreement, all of the issued and outstanding capital stock of the
Company shall be converted into the right to receive the consideration set forth
herein.
  C.           The
Company, on the one hand, and Parent and Merger Sub, on the other hand, desire
to make certain representations, warranties, covenants and other agreements in
connection with the transactions contemplated hereby.
  D.           Concurrent
with the execution and delivery of this Agreement, as a material inducement to
Parent and Merger Sub to enter into this Agreement, (i) each of the Key
Employees shall have executed an employment agreement, each in substantially the
forms attached hereto as Exhibit A (each
employment agreement, an “Employment Agreement”), with
Parent to be effective as of the Effective Time, and (ii) the Company’s
Board of Directors shall have unanimously approved this Agreement and the
transactions contemplated hereby.
  E.           Promptly
after the execution and delivery of this Agreement, the Company shall submit to
each of the persons and entities identified on Schedule A( the “Stockholders”) an irrevocable
written consent in substantially the form attached hereto as Exhibit B (the “Stockholder Written
Consent”).
  F.           For
United States federal income tax purposes, the parties intend that the Merger
qualify as a tax-free “reorganization” under the provisions of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder (the “Code”),and the parties intend,
by executing this Agreement, to adopt a plan of reorganization within the
meaning of Treasury Regulations Sections 1.368-2(g) and
1.368-3.
  NOW,
THEREFORE, in consideration of the mutual agreements, covenants and other
premises set forth herein, the mutual benefits to be gained by the performance
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereby
agree as follows:
  -1-
 
 CONFIDENTIAL
  ARTICLE I
  THE
MERGER
  1.1  The
Merger . 
At the Effective Time and subject to and upon the terms and conditions of this
Agreement and the applicable provisions of the Delaware General Corporation Law
(“Delaware Law”), Merger
Sub shall be merged with and into the Company (the “Merger”), the separate
corporate existence of Merger Sub shall cease, and the Company shall continue as
the surviving corporation.  The Company as the surviving corporation
after the Merger is sometimes referred to hereinafter as the “Surviving
Corporation.”
  1.2  Effective
Time . 
Unless this Agreement is earlier terminated pursuant to Section 7.1 hereof, the
closing of the Merger (the “Closing”) will take place as
promptly as practicable, and in any event no more than three (3) Business Days,
after the conditions set forth in Article V hereof have
been satisfied or waived, at the offices of Seyfarth Shaw LLP, 620 Eighth
Avenue, New York, New York 10018 unless another time or place is mutually agreed
upon in writing by Parent and the Company. The date upon which the Closing
actually occurs shall be referred to herein as the “Closing Date.”  On
the Closing Date, the parties hereto shall cause the Merger to be consummated by
filing or causing to be filed with the Secretary of State of the State of
Delaware a certificate of merger in substantially the form attached hereto as
Exhibit C(the
“Certificate of Merger”)
in accordance with the applicable provisions of Delaware Law, the time of filing
of the Certificate of Merger by the Secretary of State of the State of Delaware
shall be referred to herein as the “Effective Time.”
  1.3  Effect of the
Merger . 
The effect of the Merger shall be as set forth in this Agreement and as provided
in the applicable provisions of Delaware Law.  Without limiting the
generality of the foregoing, and subject thereto, upon the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware,
except as otherwise agreed to pursuant to the terms of this Agreement, all of
the property, rights, privileges, powers and franchises of the Company and
Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company, and Merger shall become the debts, liabilities and
duties of the Surviving Corporation.
  1.4  Organizational
Documents .
  (a)           Unless
otherwise determined by Parent prior to the Effective Time, the certificate of
incorporation of the Surviving Corporation shall be amended and restated as of
the Effective Time to be identical to the certificate of incorporation of Merger
Sub as in effect immediately prior to the Effective Time, until thereafter
amended in accordance with Delaware Law and as provided in such certificate of
incorporation; provided,
however, that at the Effective Time, Article [__] of the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as follows: “The name of the corporation is
SensiVida Medical Systems, Inc.”
  (b)           Unless
otherwise determined by Parent prior to the Effective Time, the bylaws of the
Surviving Corporation shall be amended and restated as of the Effective Time to
be identical to the bylaws of Merger Sub as in effect immediately prior to the
Effective Time, until thereafter amended in accordance with Delaware Law and as
provided in the certificate of incorporation of the Surviving Corporation and
such bylaws.
  -2-
 CONFIDENTIAL
  1.5  Directors and
Officers .
  (a)           Directors of
Surviving Corporation.  Unless otherwise determined by Parent
prior to the Effective Time, the directors of Merger Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation
immediately after the Effective Time, each to hold the office of a director of
the Surviving Corporation in accordance with the provisions of Delaware Law, the
certificate of incorporation and bylaws of the Surviving Corporation until their
successors are duly elected and qualified, or until their earlier resignation or
removal.
  (b)           Officers of
Surviving Corporation.  Unless otherwise determined by Parent
prior to the Effective Time, the officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation immediately
after the Effective Time, each to hold office in accordance with the provisions
of the bylaws of the Surviving Corporation.
  1.6  Effect of the
Merger on the Capital Stock of the Constituent Corporations .
  (a)           Definitions.  For
all purposes of this Agreement, the following terms shall have the following
respective meanings:
  (i)                “Business
Day” shall mean each day that is not a Saturday, Sunday or other day on
which Parent is closed for business or banking institutions located in New York,
NY are authorized or obligated by law or executive order to close.
  (ii)               “Company Capital
Stock” shall mean the Company Common Stock and all other shares of
capital stock, if any, of the Company, taken together.
  (iii)              “Company Common
Stock” shall mean shares of common stock, $___ par value per share, of
the Company.
  (iv)              “Continuing
Employee” shall mean each employee of the Company who is an employee of
Parent or any of its Subsidiaries immediately following the Effective
Time.
  (v)               “Court”
shall mean any court or arbitration tribunal of the United States, any domestic
state, or any foreign country, and any political subdivision or agency
thereof.
  (vi)              “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
  (vii)             “FASB”
shall mean the Financial Accounting Standards Board.
  (viii)            “GAAP”
shall mean United States generally accepted accounting principles consistently
applied.
  (ix)               “HSR Act”
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
  (x)                “Key
Employees” shall mean the employees of Company identified on Schedule 1.6(a)(x)
hereto.
  -3-
 CONFIDENTIAL
  (xi)               “Knowledge”
or “Known”
shall mean, with respect to the Company, the actual knowledge of Kamal
Sarbadhikari, Jose Mir and [Principals of Infotonics].
  (xii)              “Law” shall
mean any law (statutory, common or otherwise), constitution, treaty, convention,
ordinance, equitable principle, code, rule, regulation, executive order, or
other similar authority enacted, adopted, promulgated, or applied by any
Governmental Entity, each as amended and now in effect.
  (xiii)             “Lien”
shall mean any lien, pledge, charge, claim, mortgage, security interest or other
encumbrance of any sort.
  (xiv)            “Merger
Consideration” shall mean 33,333,333 shares of Parent Common
Stock.
  (xv)             “Order”
shall mean any order, ruling, decision, verdict, decree, writ, subpoena,
mandate, precept, command, directive, approval, award, judgment, injunction, or
other similar determination or finding issued, granted or made by any
Governmental Entity or Court.
  (xvi)            “Parent Common
Stock” shall mean shares of the common stock, par value $.01 per share,
of Parent.
  (xvii)           “Per Share Merger
Consideration” shall mean that amount obtained by dividing (A) the
Merger Consideration, by (B) the Total Outstanding Shares.
  (xviii)          “Person”
shall mean an individual or entity, including a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a Governmental Entity (or any
department, agency, or political subdivision thereof).
  (xix)             “Principal
Stockholders” shall mean, collectively, Kamal Sarbadhikari, Jose Mir and
Infotonics Technology Center Inc.
  (xx)              “Pro Rata
Portion” shall mean, with respect to each Stockholder (other than a
Stockholder holding Dissenting Shares who does not effectively withdraw or lose
such Stockholder’s dissenter’s rights as contemplated by Section 1.7(b) hereof),
an amount equal to the quotient obtained by dividing (A) the number of
shares of Company Common Stock owned by such Stockholder as of immediately prior
to the Effective Time by (B) the total number of shares of Company Common
Stock issued and outstanding as of immediately prior to the Effective Time
(other than Dissenting Shares held by Stockholders who do not effectively
withdraw or lose such holders’ dissenters’ rights as contemplated by Section 1.7(b)hereof).
  (xxi)             “Related
Agreements” shall mean the Certificate of Merger, the Employment
Agreements by and between Parent and the Key Employees, and all other agreements
and certificates entered into by Parent or the Company in connection with the
transactions contemplated herein.
  (xxii)            “Requisite
Stockholder Vote” shall mean the affirmative vote of the holders of at
least 90% of the outstanding Company Capital Stock.
  -4-
 CONFIDENTIAL
  (xxiii)           “SEC” shall
mean the United States Securities and Exchange Commission.
  (xxiv)           “Securities
Act” shall mean the Securities Act of 1933, as amended.
  (xxv)            “Stockholder”
shall mean any holder of any Company Capital Stock immediately prior to the
Effective Time and as listed on Schedule A to this Agreement.
  (xxvi)           “Subsidiary”shall have the
meaning set forth in Section 2.3(b) of this Agreement.
  (xxvii)          “Total Outstanding
Shares” shall mean the aggregate number of shares of Company Capital
Stock issued and outstanding immediately prior to the Effective
Time.
  (b)           Effect on Capital
Stock.  At the Effective Time, by virtue of the Merger and
without any action on the part of Merger Sub, the Company or the holders of
shares of Company Capital Stock, each share of Company Capital Stock issued and
outstanding immediately prior to the Effective Time, upon the terms and subject
to the conditions set forth in this Section 1.6 and
throughout this Agreement will be cancelled and extinguished and will be
converted automatically into the right to receive upon surrender of the
certificate representing such shares of Company Capital Stock in the manner
provided in Section 1.8 hereof, such
portion of the Merger Consideration as set forth below:
  (i)                each
outstanding share of Company Common Stock will be converted automatically into
the right to receive the Per Share Merger Consideration;
  (ii)               for
purposes of calculating the number of shares of Parent Common Stock issuable to
each Stockholder pursuant to this Section 1.6(b), all
shares of the Company Capital Stock held by each Stockholder shall be aggregated
on a certificate-by-certificate basis.  The aggregate number of shares
of Parent Common Stock issuable to each Stockholder for each share certificate
shall be rounded down to the nearest whole number of shares of Parent Common
Stock; provided,
however, that the maximum number of shares of Parent Common Stock
issuable to Stockholders;and
  (iii)              notwithstanding
anything set forth in this Section 1.6, any
Dissenting Shares will be treated as set forth in Section 1.7
hereof.
  (c)           Necessary
Actions.  Prior to the Effective Time, and subject to the
review and approval of Parent, the Company shall take all actions necessary to
effect the transactions anticipated by this Section 1.6 under all
agreements related to Company Common Stock and any other plan or arrangement of
the Company (whether written or oral, formal or informal), including delivering
all required notices or obtaining any required consents.
  (d)           Cancellation of
Company Owned Stock.  Each share of Company Capital Stock held
by the Company or any direct or indirect Subsidiary of the Company immediately
prior to the Effective Time shall be cancelled and extinguished as of the
Effective Time.
  -5-
 CONFIDENTIAL
  (e)           Adjustments to
Parent Common Stock.  If, after the date of this Agreement and
prior to the Effective Time, the outstanding shares of Parent Common Stock shall
have been changed into or exchanged for a different number of shares or kind of
shares and/or other securities of Parent or another corporation or entity by
reason of any reclassification, split-up, stock dividend or stock combination or
any arrangement, amalgamation or similar statutory procedure (an “Adjustment Event”), then the
number of shares of Parent Common Stock to be delivered as consideration
hereunder shall be appropriately adjusted so that each holder of Company Stock
Certificates shall be entitled to receive at the Effective Time, in lieu of the
number of shares of Parent Common Stock provided for in this Section 1.6, such number
and kind of shares and/or other securities as such holder would have received if
the record date and payment date for such Adjustment Event had been immediately
after the Effective Time.
  (f)           Withholding
Taxes.  The Company, and on its behalf Parent and the Surviving
Corporation, shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any Person such
amounts as may be required to be deducted or withheld therefrom under any
provision of federal, state, local or foreign tax law or under any applicable
legal requirement.  The number of shares of Merger Consideration to be
used to satisfy the amount required to be so deducted or withheld, if any, shall
be determined by dividing such amount by fair market value of the Parent Common
Stock at the Effective Time, rounded to the nearest whole share (with 0.5 of a
share rounded up).  To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
  (g)           Capital Stock of
Merger Sub.  Each share of Common Stock of Merger Sub issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
Common Stock of the Surviving Corporation.  Each stock certificate of
Merger Sub evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the Surviving
Corporation.
  1.7 
Dissenting
Shares .
  (a)           Notwithstanding
any other provisions of this Agreement to the contrary, any shares of Company
Capital Stock held by a holder who has not effectively withdrawn or lost such
holder’s appraisal, dissenters’ or similar rights for such shares under Delaware
Law, as applicable (collectively, the “Dissenting Shares”), shall not
be converted into or represent a right to receive the applicable consideration
for Company Capital Stock set forth in Section 1.6 hereof, but
the holder thereof shall only be entitled to such rights as are provided by
Delaware Law.
  (b)           Notwithstanding
the provisions of Section 1.7(a)hereof, if
any holder of Dissenting Shares shall effectively withdraw or lose (through
failure to perfect or otherwise) such holder’s appraisal or dissenters’ rights
under Delaware Law, as applicable, then, as of the later of the Effective Time
and the occurrence of such event, such holder’s shares shall automatically be
converted into and represent only the right to receive the consideration for
Company Capital Stock, as applicable, set forth in Section1.6 hereof, without interest
thereon upon surrender of the certificate representing such shares.
  (c)           The
Company shall give Parent (i) prompt notice of any written demand for
appraisal received by the Company pursuant to the applicable provisions of
Delaware Law, and (ii) the opportunity to participate in all negotiations
and proceedings with respect to such demands.  The Company shall not,
except with the prior written consent of Parent (which consent shall not be
unreasonably withheld, conditioned or delayed) make any payment with respect to
any such demands or offer to settle or settle any such
demands.  Notwithstanding the foregoing, to the extent that Parent,
the Surviving Corporation or the Company (i) makes any payment or payments
in respect of any Dissenting Shares in excess of the consideration that
otherwise would have been payable in respect of such shares in accordance with
this Agreement or (ii) incurs any Losses, (including attorneys’ and
consultants’ fees, costs and expenses and including any such fees, costs and
expenses incurred in connection with investigating, defending against or
settling any action or proceeding) in respect of any Dissenting Shares
(excluding payments for such shares) ((i) and (ii) together, “Dissenting Share Payments”),
Parent shall be entitled to recover under the terms of Article VI hereof the
amount of such Dissenting Share Payments.
  -6-
 CONFIDENTIAL
 1.8 
Surrender
of Certificates .
  (a)           Exchange
Agent.  Parent shall serve as the exchange agent for the
Merger.
  (b)           Exchange
Procedures.  As soon as practicable, but in no event more than
three (3) Business Days, following the Closing Date, Parent shall mail a letter
of transmittal in Parent’s standard form to each Stockholder at the address set
forth opposite each such Stockholder’s name on Schedule A to this
Agreement.  After receipt of such letter of transmittal and any other
documents that Parent may require in order to effect the exchange (the “Exchange Documents”), the
Stockholders will surrender the certificates representing their shares of
Company Capital Stock (the “Company Stock Certificates”)
to the Exchange Agent for cancellation together with duly completed and validly
executed Exchange Documents.  Upon surrender of a Company Stock
Certificate for cancellation to Parent, or such agent or agents as may be
appointed by Parent, together with such Exchange Documents, duly completed and
validly executed in accordance with the instructions thereto, subject to the
terms of Section 1.8(d) hereof,
the holder of such Company Stock Certificate shall be entitled to receive from
the Exchange Agent in exchange therefor, a certificate representing the number
of whole shares of Parent Common Stock to which such holder is entitled pursuant
to Section 1.6
hereof, and the Company Stock Certificate so surrendered shall be cancelled.
Until so surrendered, each Company Stock Certificate outstanding after the
Effective Time will be deemed, for all corporate purposes thereafter, to
evidence only the right to receive the number of full shares of Parent Common
Stock into which such shares of Company Capital Stock shall have been so
converted.  No portion of the Merger Consideration will be paid to the
holder of any unsurrendered Company Stock Certificate with respect to shares of
Company Capital Stock formerly represented thereby until the holder of record of
such Company Stock Certificate shall surrender such Company Stock Certificate
and the Exchange Documents pursuant hereto.
  (c)           Distributions
With Respect to Unexchanged Shares.  No dividends or other
distributions declared or made after the Effective Time with respect to Parent
Common Stock with a record date after the Effective Time will be paid to the
holder of any unsurrendered Company Stock Certificate with respect to the shares
of Parent Common Stock represented thereby until the holder of record of such
Company Stock Certificate shall surrender such Company Stock
Certificate.  Subject to applicable law, following surrender of any
such Company Stock Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Parent Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Parent Common
Stock.
  -7-
 CONFIDENTIAL
  (d)           Transfers of
Ownership.  If any certificate for shares of Parent Common
Stock is to be issued in a name other than that in which the Company Stock
Certificate surrendered in exchange therefor is registered it will be a
condition of the issuance or delivery thereof that the certificate so
surrendered will be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange will have paid to Parent or any
agent designated by it any transfer or other taxes required by reason of the
issuance of a certificate for shares of Parent Common Stock in any name other
than that of the registered holder of the certificate surrendered, or
established to the satisfaction of Parent or any agent designated by it that
such tax has been paid or is not payable.
  (e)           No
Liability.  Notwithstanding anything to the contrary in this
Section 1.8,
neither Parent, the Surviving Corporation, nor any party hereto shall be liable
to a holder of shares of Company Capital Stock for any amount paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
  1.9 
No Further
Ownership Rights in Company Capital Stock . 
The shares of Parent Common Stock issued in respect of the surrender for
exchange of shares of Company Capital Stock in accordance with the terms hereof
shall be deemed to be full satisfaction of all rights pertaining to such shares
of Company Capital Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of Company
Capital Stock which were outstanding immediately prior to the Effective
Time.  If, after the Effective Time, Company Stock Certificates are
presented to the Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this Article I.
  1.10  Lost, Stolen or
Destroyed Certificates . 
In the event any Company Stock Certificates shall have been lost, stolen or
destroyed, Parent shall issue in exchange for such lost, stolen or destroyed
certificates, upon the making of an affidavit of that fact by the holder
thereof, such amount, if any, as may be required pursuant to Section 1.6 hereof; provided, however, that
Parent may, in its discretion and as a condition precedent to the issuance
thereof, require the Stockholder who is the owner of such lost, stolen or
destroyed certificates to either (i) deliver a bond in such amount as it
may direct or (ii) provide an indemnification agreement in form and
substance acceptable to Parent, against any claim that may be made against
Parent with respect to the certificates alleged to have been lost, stolen or
destroyed.
  1.11 
Tax
Consequences . 
Parent, Merger Sub and Company (i) intend that the Merger shall constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Code, (ii)
shall report the Merger (if such Person has tax reporting obligations in respect
thereof) as a single statutory merger of the Company with and into Parent
qualifying as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code for federal income tax purposes, and (iii) by executing this Agreement,
adopt a plan of tax-free reorganization within the meaning of Treasury
Regulations Sections 1.368 2(g) and 1.368 3.  However, no party hereto
makes any representations or warranties regarding the tax treatment of
the  Merger, or any of the tax consequences relating to the Merger,
this Agreement, or any of the other transactions or agreements contemplated
hereby.  Each party hereto acknowledges that it is relying solely on
its own tax advisors in connection with the Merger, this Agreement and the other
transactions and agreements contemplated hereby.
  1.12 
Taking of
Necessary Action; 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 the Company, Parent and the
Surviving Corporation and the officers and directors of Parent and the Surviving
Corporation are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary
action.
  -8-
 CONFIDENTIAL
 ARTICLE II
  REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
  Subject
to such exceptions as are specifically disclosed in the disclosure schedule
dated as of the date hereof (each of which disclosures, in order to be
effective, shall clearly reference the appropriate section and, if applicable,
subsection of this Article II to which it
relates and each of which disclosures shall be deemed to be incorporated by
reference into the representations and warranties made in this Article II;provided, however, that any
information disclosed under any section of the disclosure schedule shall be
deemed disclosed and incorporated into any other section of the disclosure
schedule where it is reasonably apparent that such disclosure, without reference
to extrinsic documentation, is relevant to such other section)delivered by the Company
to Parent concurrently with the execution of this Agreement (the “Disclosure Schedule”) the
Company hereby represents and warrants to Parent and Merger Sub on the date
hereof and as of the Effective Time, as follows:
  2.1 
Organization of
the Company .
  (a)           The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.  The Company has the
corporate power to own its properties and to carry on its business as currently
conducted.  The Company is duly qualified or licensed to do business
and in good standing as a foreign corporation in each jurisdiction in which the
character or location of its assets or properties (whether owned, leased or
licensed) or the nature of its business make such qualifications necessary,
except where the failure to so qualify would not be material to the Company and
its Subsidiaries, taken as a whole.  The Company has delivered a true
and correct copy of its Certificate of Incorporation, as amended to date (the
“Certificate of
Incorporation”) and bylaws, as amended to date, each in full force and
effect on the date hereof (collectively, the “Charter Documents”), to
Parent.  The Board of Directors of the Company has not approved or
proposed any amendment to any of the Charter Documents.
  (b)           Section 2.1(b) of the
Disclosure Schedule lists the directors and officers of the Company as of
the date hereof, separately noting which of such directors and officers has any
rights to indemnification from the Company and the scope and duration of such
rights.
  (c)           Section 2.1(c) of the
Disclosure Schedule lists every state or foreign jurisdiction in which the
Company has Employees, facilities or assets.
  2.2 
Company
Capital Structure
  (a)           The
authorized Company Capital Stock consists of 300,000 shares of common stock, par
value $.001 per share and 500,000 shares of preferred stock, par value $.001 per
share.  As of the date hereof, 88,000 shares of common stock of the
Company were the only issued and outstanding shares of Company Capital
Stock.  The Company Capital Stock is held by the Persons and in the
amounts set forth in Schedule
A.  All outstanding shares of Company Capital Stock are duly
authorized, validly issued, fully paid and non-assessable and are not subject to
preemptive rights created by statute, the Charter Documents, or any agreement to
which the Company is a party or by which it is bound.  All outstanding
shares of Company Capital Stock have been issued or repurchased (in the case of
shares that were outstanding and repurchased by the Company or any Stockholder
of the Company) in compliance with all applicable federal, state, foreign, or
local statutes, laws, rules, or regulations, including federal and state
securities laws, and were issued, transferred and repurchased (in the case of
shares that were outstanding and repurchased by the Company or any Stockholder
of the Company) in accordance with any right of first refusal or similar right
or limitation, including those in the Charter Documents.  There are no
declared or accrued but unpaid dividends with respect to any shares of Company
Capital Stock. No shares of Company Capital Stock are unvested.  For
purposes of this Agreement, a share of Company Capital Stock shall be deemed
“unvested” if such share is not vested or is subject to a risk of forfeiture or
other condition under any applicable stock restriction agreement or other
agreement with the Company. The Company has no other capital stock authorized,
issued or outstanding.
  -9-
 CONFIDENTIAL
  (b)           There
are no options, warrants, calls, rights, convertible securities, commitments or
agreements of any character, written or oral, to which the Company or any of its
Subsidiaries is a party or by which the Company is bound obligating the Company
to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of Company Capital Stock or obligating
the Company to grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar rights with respect to the equity
of the Company or any of its Subsidiaries (whether payable in equity, cash or
otherwise).  Except as contemplated hereby, there are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting stock of the Company or any of its Subsidiaries.  There are no
agreements to which the Company or any of its Subsidiaries is a party relating
to the registration, sale or transfer (including agreements relating to rights
of first refusal, co-sale rights or “drag-along” rights) of any Company Capital
Stock.  As a result of the Merger, Parent will be the sole record and
beneficial holder of all issued and outstanding Company Capital Stock and all
rights to acquire or receive any shares of Company Capital Stock, whether or not
such shares of Company Capital Stock are outstanding.
  (c)           There
are no loans from the Company to any Stockholder.
  (d)           The
allocation of the Merger Consideration set forth in Section 1.6(b) hereof is
consistent with the certificate of incorporation of the Company as amended as of
immediately prior to the Effective Time.
  (e)           The
information contained in Schedule A will be complete
and correct as of the Closing Date.
  2.3 
Subsidiaries .
  (a)           Section 2.3(a) of the
Disclosure Schedule lists each entity in which the Company owns any shares
of capital stock or any interest in, or controls, directly or indirectly, any
other corporation, limited liability company, partnership, association, joint
venture or other business entity.
  (b)           Section 2.3(b) of the
Disclosure Schedule lists each corporation, limited liability company,
partnership, association, joint venture or other business entity of which the
Company owns or has owned, directly or indirectly, more than 50% of the stock or
other equity interest entitled to vote on the election of the members of the
board of directors or similar governing body (each, a “Subsidiary”).
  -10-
 CONFIDENTIAL
 (c)           Each
Subsidiary is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation or
organization.
  (d)           Each
Subsidiary has the corporate, limited liability company, or partnership power,
as applicable, to own its properties and to carry on its business as currently
conducted.
  (e)           Each
Subsidiary is duly qualified or licensed to do business and in good standing as
a foreign corporation in each jurisdiction in which the character or location of
its assets or properties (whether owned, leased or licensed) or the nature of
its business make such qualifications necessary, except where the failure to so
qualify would not be material to the Subsidiary.  A true and correct
copy of each Subsidiary’s organizational documents, each as amended to date and
in full force and effect on the date hereof, has been delivered to
Parent.
  (f)           Section 2.3(f) of the
Disclosure Schedule lists the directors and officers of each Subsidiary as
of the date of this Agreement.
  (g)           No
Subsidiary has conducted its business under any other name.
  (h)           All
of the outstanding equity of each Subsidiary is owned of record and beneficially
by the Company.  All outstanding equity of each Subsidiary is duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the charter documents or bylaws of such
Subsidiary, or any agreement to which such Subsidiary is a party or by which it
is bound, and have been issued in compliance with all applicable legal
requirements.  There are no options, warrants, calls, rights,
commitments or agreements of any character, written or oral, to which any
Subsidiary is a party or by which any Subsidiary is bound obligating the
Subsidiary to issue, deliver, sell, repurchase or redeem, or cause to be issued,
sold, repurchased or redeemed, any equity of such Subsidiary or obligating such
Subsidiary to grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such option, warrant, call right, commitment
or agreement.  There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or other similar rights with
respect to any of the Subsidiaries.  Neither the Company nor any
Subsidiary has agreed or is obligated to make any future investment in or
capital contribution to any Person, other than agreements between the Company
and any Subsidiary.
  2.4 
Authority . 
The Company has all requisite power and authority to enter into this Agreement
and any Related Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.  The execution and
delivery by the Company of this Agreement and any Related Agreements to which
the Company is a party and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Company and no further action is required on
the part of the Company to authorize the Agreement and any Related Agreements to
which it is a party and the transactions contemplated hereby and thereby,
subject only to the approval of this Agreement and the transactions contemplated
hereby by the Stockholders. This Agreement and the transactions contemplated
hereby have been unanimously approved by the Board of Directors of the
Company.  This Agreement and each of the Related Agreements to which
the Company is a party have been duly executed and delivered by the Company and
assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligations of the Company
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium and other
similar laws affecting creditors’ rights generally and by general principles of
equity.
  -11-
 CONFIDENTIAL
  2.5 
No
Conflict . 
Except as set forth in Section 2.5 of the Disclosure
Schedule, the execution and delivery by the Company of this Agreement and any
Related Agreement to which the Company is a party, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with or result
in any violation of or default under (with or without notice or lapse of time,
or both) or give rise to a right of first refusal, termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under (any
such event, a “Conflict”) (i) any
provision of the Charter Documents or the organizational documents of any of its
Subsidiaries, as amended, (ii) any material mortgage, indenture, lease
(including, without limitation, all Lease Agreements), contract, covenant, plan,
insurance policy or other agreement, instrument or commitment, permit,
concession, franchise or license (each a “Contract” and collectively the
“Contracts”) to which
the Company is a party or by which any of its properties or assets (whether
tangible or intangible) are bound, or (iii) any material judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries or any of their respective properties or
assets (whether tangible or intangible), except with respect to clauses (ii) and
(iii) for any such Conflicts that would not individually or in the aggregate
prevent or materially delay consummation of the Merger or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement.  The terms and conditions of the Contracts do not require
the payment of any additional amounts or consideration as a result of the
consummation of the Merger, other than ongoing fees, royalties or payments which
the Company or any of its Subsidiaries, as the case may be, would otherwise be
required to pay pursuant to the terms of such Contracts had the transactions
contemplated by this Agreement not occurred.
  2.6 
Consents . 
No consent, notice, waiver, approval, order or authorization of, or
registration, declaration or filing with any court, tribunal, administrative
agency or commission or other federal, state, county, local or other foreign
governmental authority, instrumentality, agency or commission, or regional or
international organization (each, a “Governmental Entity”) or any
third party, including a party to any agreement with the Company or any of its
Subsidiaries (so as not to trigger any Conflict), is required by, or with
respect to, the Company or any of its Subsidiaries in connection with the
execution and delivery by the Company of this Agreement and any Related
Agreement to which the Company or any of its Subsidiaries is a party or the
consummation of the transactions contemplated hereby and thereby, except for
(i) such consents, notices, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
securities laws, (ii)  the filing of the Notification and Report Forms with
the United States Federal Trade Commission (“FTC”) and the Antitrust
Division of the United States Department of Justice (“DOJ”) required by the HSR Act
and the expiration or termination of the applicable waiting period under the HSR
Act and such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under U.S. or foreign
laws or regulations applicable to mergers or acquisitions involving foreign
parties, (iv) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, and (v) the adoption of this Agreement and
approval of the transactions contemplated by this Agreement by the
Stockholders.
  -12-
 CONFIDENTIAL
  2.7 
Company
Financial Statements . 
Section 2.7 of the
Disclosure Schedule sets forth the Company’s (i) Annual unaudited
financials (the “Year-End
Financials”), (ii) the unaudited consolidated balance sheet as December
31, 2007 (the “Current Balance
Sheet Date”), and interim financials for the period ended October 31,
2008 (the “Interim
Financials”).  The Year-End Financials and the Interim
Financials (collectively referred as the “Financials”) are true and
correct in all material respects and have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods indicated and consistent
with each other (except that the Interim Financials do not contain footnotes and
other presentation items that may be required by GAAP).  The
Financials present fairly the Company’s consolidated financial condition,
operating results and cash flows as of the dates and during the periods
indicated therein, subject in the case of the Interim Financials to normal
year-end adjustments, which are not material in amount or significance in any
individual case or in the aggregate.  The Company’s unaudited
consolidated balance sheet as of the Current Balance Sheet Date is referred to
hereinafter as the “Current
Balance Sheet.”  The Company has not had any disagreement (as
such term is defined in Item 304 of Regulation S-K promulgated under
the Securities Act) with any of its auditors regarding accounting matters or
policies during any of its past three full fiscal years or during the current
fiscal year-to-date.  The books and records of the Company and each
Subsidiary have been, and are being maintained in all material respects in
accordance with applicable legal and accounting requirements and the Financials
are consistent with such books and records.  Neither the Company nor
any of its Subsidiaries is a party to, or has any commitment to become a party
to, any joint venture, off-balance sheet partnership or any similar Contract
relating to any transaction or relationship between or among the Company or any
of its Subsidiaries, on the one hand, and any unconsolidated affiliate,
including any structured finance, special purpose or limited purpose Person on
the other hand, or any “off-balance sheet arrangement” (as defined in Item
303(a) of Regulation S-K of the SEC).  As of the Closing Date,
the Financials (x) will be true and correct in all material respects and will
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated, and (y) will present fairly, in all material
respects, the Company’s consolidated financial condition, operating results and
cash flows as of the dates and during the periods indicated
therein.
  2.8 
No
Undisclosed Liabilities . 
Neither the Company nor any of its Subsidiaries has any liability, indebtedness,
obligation, expense, claim, deficiency, guaranty or endorsement of any type,
whether accrued, absolute, contingent, matured, unmatured or other (whether or
not required to be reflected in financial statements in accordance with GAAP) in
excess of $10,000 individually or $50,000 in the aggregate, except for those
which (i) have been reflected in the unaudited consolidated balance sheet
of the Company as of the Current Balance Sheet Date, (ii) have arisen in
the ordinary course of business consistent with past practices since the Current
Balance Sheet Date, or (iii) are liabilities or obligations incurred in
connection with the transactions contemplated hereby.
  2.9 
No
Changes . 
From the Current Balance Sheet Date through the date hereof, (a) the
business of the Company and each of its Subsidiaries has been conducted in the
ordinary course of business consistent with past practice; and (b) there
has not been any event, change, development or set of circumstances that has had
or would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the financial condition or results of operations of
the Company.
  2.10 
Accounts
Receivable . 
[TBD If
appropriate]
  (a)           The
Company has made available to Parent a list of all accounts receivable of the
Company and its Subsidiaries as of the Current Balance Sheet Date, together with
an aging schedule indicating a range of days elapsed since invoice.
  -13-
 CONFIDENTIAL
  (b)           All
of the accounts receivable of the Company and its Subsidiaries arose in the
ordinary course of business, are carried at values determined in accordance with
GAAP consistently applied to the Company’s Knowledge, are not subject to any
valid set-off or counterclaim, do not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement.  No person has any Lien on any
accounts receivable of the Company and its Subsidiaries and no request or
agreement for deduction or discount has been made with respect to any accounts
receivable of the Company and its Subsidiaries, other than in the ordinary
course of business consistent with past practices.
  2.11 Tax
Matters .
  (a)           Definition of
Taxes.  For the purposes of this Agreement, the term “Tax” or, collectively, “Taxes” shall mean (i) any
and all U.S. federal, state, local and non-U.S. taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes as well as public imposts, fees
and social security charges (including health, unemployment, workers’
compensation and pension insurance), together with all interest, penalties and
additions imposed with respect to such amounts, (ii) any liability for the
payment of any amounts of the type described in clause (i) of this Section 2.11(a) as a
result of being a member of an affiliated, consolidated, combined or unitary
group for any period (including any arrangement for group or consortium relief
or similar arrangement), and (iii) any liability for the payment of any
amounts of the type described in clauses (i) or (ii) of this Section 2.11(a) as a
result of any express or implied obligation to indemnify any other person or as
a result of any obligation under any agreement or arrangement with any other
person with respect to such amounts and including any liability for taxes of a
predecessor or transferor or otherwise by operation of law.
  (b)           Tax Returns and
Audits.
  (i)                Except
as set forth in Section
2.11(b)(i) of the Disclosure Schedules, the Company and each of its
Subsidiaries have (a) prepared and timely filed all required U.S. federal,
state, local and non-U.S. returns, estimates, information statements and
reports, including attachments and amendments thereto (“Returns”) relating to any and
all Taxes concerning or attributable to the Company or any of its Subsidiaries
or their respective operations and such Returns are true and correct and have
been completed in accordance with applicable law and (b) timely paid all
Taxes they are required to pay.
  (ii)               The
Company and each of its Subsidiaries have paid or withheld with respect to their
respective Employees and other third parties, all U.S. federal, state and
non-U.S. income Taxes and social security charges and similar fees, Federal
Insurance Contribution Act amounts, Federal Unemployment Tax Act amounts and all
other Taxes required to be withheld or paid, and have timely paid any such Taxes
withheld over to the appropriate authorities.
  (iii)              Neither
the Company nor any of its Subsidiaries is delinquent in the payment of any Tax,
or has been delinquent in the payment of any material Tax, nor is there any Tax
deficiency outstanding, assessed or proposed against the Company or any of its
Subsidiaries, nor has the Company or any of its Subsidiaries executed any waiver
of any statute of limitations on or extending the period for the assessment or
collection of any Tax.
  -14-
 CONFIDENTIAL
  (iv)              No
audit or other examination of any Return of the Company or any of its
Subsidiaries is presently in progress, nor has the Company or any of its
Subsidiaries been notified of any request for such an audit or other
examination.  No adjustment relating to any Return filed by the
Company or any of its Subsidiaries has been proposed by any Tax authority to the
Company or any of its Subsidiaries or any representative thereof.  No
claim has ever been made by an authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Returns that the Company or any of its
Subsidiaries is or may be subject to taxation by that jurisdiction.
  (v)               Neither
the Company nor any of its Subsidiaries has any liabilities for unpaid Taxes
which have not been accrued or reserved on the Current Balance Sheet, whether
asserted or unasserted, contingent or otherwise, and neither the Company nor any
of its Subsidiaries has incurred any liability for Taxes since the Current
Balance Sheet Date other than in the ordinary course of business.  The
Company and each of its Subsidiaries have identified all uncertain tax positions
contained in all Returns filed by the Company or its Subsidiaries and, except as
set forth in Section
2.11(b)(v) of the Disclosure Schedule, have established adequate reserves
and made any appropriate disclosures in the Financials in accordance with the
requirements of Financial Interpretation No. 48 of FASB Statement No.
109.
  (vi)              The
Company has made available to Parent or its legal counsel, copies of all Returns
for the Company and its Subsidiaries filed for all periods since
inception.
  (vii)             There
are (and immediately following the Effective Time there will be) no Liens on the
assets of the Company or any of its Subsidiaries relating to or attributable to
Taxes other than Liens for Taxes not yet due and payable.  There is no
basis for the assertion of any claim relating or attributable to Taxes which, if
adversely determined, would result in any Lien on the assets of the Company or
any of its Subsidiaries.
  (viii)            Neither
the Company nor any of its Subsidiaries has (a) ever been a member of an
affiliated group (within the meaning of Code §1504(a)) filing a consolidated
federal income Tax Return (other than a group the common parent of which was
Company), (b) ever been a party to any Tax sharing, indemnification or
allocation agreement, nor does the Company or any of its Subsidiaries owe any
amount under any such agreement, (c) any liability for the Taxes of any
Person, under Treasury Regulation §1.1502-6 (or any similar provision of
state, local or foreign law, and including any arrangement for group or
consortium relief or similar arrangements), as a transferee or successor, by
contract or agreement, by operation of law or otherwise and (d) ever been a
party to any joint venture, partnership or other arrangement that could be
treated as a partnership for Tax purposes.
  (ix)              Section 2.11(b)(ix) of
the Disclosure Schedule sets forth the following information with respect
to the Company and each of its Subsidiaries: (1) the basis of the Company and
each of its Subsidiaries in its assets; (2) the amount of any net operating
loss, net capital loss, unused investment, foreign, or other Tax credit and the
amount of any limitation upon any of the foregoing; and (3) the amount of any
deferred gain or loss allocable to the Company and each of its Subsidiaries
arising out of any deferred intercompany transaction as defined in Treas. Reg.
§ 1.1502-13 or any similar provision of applicable law.
  (x)               Neither
the Company nor any of its Subsidiaries has been, at any time, a “United States
real property holding corporation” within the meaning of Section 897(c)(2)
of the Code.
  -15-
 CONFIDENTIAL
  (xi)              Neither
the Company nor any of its Subsidiaries has constituted either a “distributing
corporation” or a “controlled corporation” in a distribution of stock intended
to qualify for tax-free treatment under Section 355 of the
Code.
  (xii)             Neither
the Company nor any of its Subsidiaries has engaged in a “reportable
transaction” as set forth in Treas. Reg. §1.6011-4(b), including any transaction
that is the same or substantially similar to one of the types of transactions
that the Internal Revenue Service has determined to be a Tax avoidance
transaction and identified by notice, regulation, or other form of published
guidance as a “listed transaction,” as set forth in Treasury
Regulation Section 1.6011-4(b)(2).
  (xiii)            Neither
the Company nor any of its Subsidiaries is subject to Tax in any country other
than its country of incorporation or formation by virtue of having a permanent
establishment, place of business or source of income in that
jurisdiction.
  (xiv)            Neither
the Company nor any of its Subsidiaries will be required to include any income
or gain or exclude any deduction or loss from taxable income as a result of any
(a) change in method of accounting under Section 481 of the Code prior
to the Closing, (b) closing agreement under Section 7121 of the Code
entered into prior to the Closing, (c) deferred intercompany gain or excess
loss account  as of the Closing under Treasury Regulations under
Section 1502 of the Code (or in each of items (a), (b), or (c), under any
similar provision of applicable law), (d) installment sale or open
transaction disposition prior to the Closing or (e) receipt of a prepaid
amount prior to Closing.
  (xv)             The
Company and its Subsidiaries are in full compliance with all terms and
conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or
order (each, a “Tax
Incentive”) and the consummation of the transactions contemplated by this
Agreement will not have any adverse effect on the continued validity and
effectiveness of any such Tax Incentive.
  (xvi)            To
the extent required, the Company and each of its Subsidiaries has properly
reported and/or withheld and remitted on amounts deferred under any Company
nonqualified deferred compensation plan subject to Section 409A of the
Code, in good faith and pursuant to IRS Notices 2005-1, 2006-100 and 2007-89 for
the years 2005, 2006 and 2007.
  (c)           Executive
Compensation Tax.  There is no contract, agreement, plan or
arrangement to which the Company or any of its Subsidiaries is a party,
including the provisions of this Agreement, covering any Employee of the Company
or any of its Subsidiaries, which, individually or collectively, would give rise
to the payment of any amount that would not be deductible pursuant to
Sections 280G or 404 of the Code or that would give rise to an Employee
penalty and Company reporting obligations and related penalties, if any, under
Section 409A of the Code.
  2.12 
Restrictions on
Business Activities . 
Except as set forth in Section 2.12 of the
Disclosure Schedule there is no agreement (non-competition or otherwise),
commitment, judgment, injunction, order or decree to which the Company or any of
its Subsidiaries is a party or otherwise binding upon the Company or any of its
Subsidiaries which has or may reasonably be expected to have the effect of
prohibiting or impairing any business practice of the Company or any of its
Subsidiaries, any acquisition of property (tangible or intangible) by the
Company or any of its Subsidiaries, the conduct of business by the Company or
any of its Subsidiaries, or otherwise limiting the freedom of the Company or any
of its Subsidiaries to engage in any line of business or to compete with any
person.  Without limiting the generality of the foregoing, neither the
Company nor any of its Subsidiaries has entered into any agreement under which
the Company or any of its Subsidiaries is restricted from selling, licensing,
manufacturing or otherwise distributing any of its technology or products or
from providing services to customers or potential customers or any class of
customers, in any geographic area, during any period of time, or in any segment
of the market.
  -16-
 CONFIDENTIAL
  2.13 
Title to
Properties; Absence of Liens and Encumbrances; Condition of
Equipment .
  (a)           [Neither
the Company nor any of its Subsidiaries owns any real property, nor has the
Company or any of its Subsidiaries ever owned any real
property.]  Section 2.13(a) of the
Disclosure Schedule sets forth a complete and accurate list of all real
property currently leased, subleased or licensed by or from the Company or any
of its Subsidiaries or otherwise used or occupied by the Company or any of its
Subsidiaries (the “Leased Real
Property”), including the name of the lessor, licensor, sublessor, master
lessor and/or lessee, the date and term of the lease, license, sublease or other
occupancy right and each amendment thereto and, with respect to any current
lease, license, sublease or other occupancy right, the square footage of the
premises leased thereunder and the aggregate annual rental payable
thereunder.
  (b)           The
Company has provided Parent true, correct and complete copies of all leases,
lease guaranties, subleases, agreements for the leasing, use or occupancy of, or
otherwise granting a right in or relating to the Leased Real Property, including
all amendments, terminations and modifications thereof and all consents and
waivers relating thereto (“Lease Agreements”); and there
are no other Lease Agreements for real property affecting the Leased Real
Property or to which Company or any of its Subsidiaries is bound, other than
those identified in Section 2.13(a) of the
Disclosure Schedule.  All such Lease Agreements are in full force and
effect and valid and effective in accordance with their respective terms, and
there is not, under any of such Lease Agreements, any existing default, no
rentals past due, or event of default (or event which with notice or lapse of
time, or both, could constitute a default).  Neither the Company nor
any of its Subsidiaries has received any notice of a default, alleged failure to
perform, or any offset or counterclaim with respect to any such Lease Agreement,
which has not been fully remedied and withdrawn.  There are no other
parties occupying, or with a right to occupy, the Leased Real Property, except
as set forth in Section 2.13(a) of the
Disclosure Schedule.  Neither the Company nor any of its Subsidiaries
owe any brokerage commissions or finders fees with respect to any such Leased
Real Property or would owe any such fees if any existing Lease Agreement were
renewed pursuant to any renewal options contained in such Lease
Agreements.
  (c)           The
Leased Real Property is sufficient and otherwise suitable for the conduct of the
business as presently conducted.
  (d)           The
Company and its Subsidiaries have good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its material
tangible properties and material assets, real, personal and mixed, used or held
for use in its business, free and clear of any Liens, except (i) as
reflected in the Current Balance Sheet, (ii) Liens for Taxes not yet due
and payable, and (iii) such imperfections of title and encumbrances, if
any, which do not detract from the value or interfere with the present use of
the property subject thereto or affected thereby.  Each Lease
Agreement constitutes the entire agreement of the landlord and the tenant
thereunder, and no term or condition thereof has been modified, amended or
waived, except as described in Section 2.13(a) of the
Disclosure Schedule and shown in the copies of the Lease Agreements that
have previously been delivered by the Company to Parent.  The Company
and its Subsidiaries have not transferred or assigned any interest in any such
Lease Agreement, nor has the Company or any of its Subsidiaries subleased or
otherwise granted rights of use or occupancy of any of the premises described
therein to any other Person.
  -17-
 CONFIDENTIAL
  (e)           Section 2.13(e) of the
Disclosure Schedule lists, as of ________, 2008, all material items of
equipment (the “Equipment”) owned or leased by
the Company or any of its Subsidiaries, and such Equipment is (i) adequate
for the conduct of the business of the Company or any of its Subsidiaries as
currently conducted and as currently contemplated to be conducted, and
(ii) in good operating condition, regularly and properly maintained,
subject to normal wear and tear.
  2.14 
Intellectual
Property .
  (a)           [Nature and scope of IP Reps TBD
based on review of Company IP]
  2.15 
Agreements,
Contracts and Commitments . 
Except as set forth in Section 2.15 of the
Disclosure Schedule (specifying the appropriate paragraph):
  (a)           Neither
Company nor any of its Subsidiaries is a party to, or is it bound
by:
  (i)                any
(1) employment, contractor or consulting agreement, (2) contract or
commitment with an Employee or individual consultant, contractor, or
salesperson, (3) any agreement, contract or commitment to grant any
severance or termination pay (in cash or otherwise) to any Employee, or
(4) any contractor, consulting or sales agreement, contract, or commitment
with a firm or other organization;
  (ii)               any
agreement or plan, including any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement;
  (iii)              any
fidelity or surety bond or completion bond;
  (iv)              any
collective bargaining, union or works council agreements;
  (v)               any
lease of personal property having a value in excess of $50,000 individually or
$100,000 in the aggregate;
  (vi)              any
agreement that provides for surety, guaranty or indemnification
obligations;
  (vii)             any
agreement, Contract, lease or commitment relating to capital expenditures and
involving future payments in excess of $10,000 individually or $20,000 in the
aggregate;
  (viii)            any
agreement, contract or commitment relating to the disposition or acquisition of
assets or any interest in any business enterprise outside the ordinary course of
the Company’s business;
  -18-
 CONFIDENTIAL
  (ix)              any
mortgages, indentures, guarantees, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of money
or extension of credit;
  (x)               any
purchase order or contract for the purchase of materials involving in excess of
$10,000 individually or $20,000 in the aggregate;
  (xi)              any
construction contracts;
  (xii)             any
dealer, distribution, joint marketing, strategic alliance, affiliate or
development agreement;
  (xiii)            any
agreement, contract or commitment to alter the Company’s interest in any
corporation, association, joint venture, partnership or business entity in which
the Company directly or indirectly holds any interest;
  (xiv)            any
agreement, contract or commitment pursuant to which the Company or any of its
Subsidiaries has undertaken to, or pursuant to which the receipt of revenue is
contingent upon, the delivery of products or service offerings not in commercial
existence as of the date hereof, and specifically not contingent upon the
release of any new product or new version of an existing product;
  (xv)             any
other agreement, Contract, lease or commitment, including without limitation,
any service, operating or management agreement or arrangement with respect to
any of the Leased Real Property, that involves $10,000 individually or $20,000
in the aggregate or more and is not cancelable without penalty within 30 days;
or
  (b)           Except
as set forth in Section
2.15(b) of the Disclosure Schedule, each Contract to which the Company or
any of its Subsidiaries is a party or any of its properties or assets (whether
tangible or intangible) is subject is a valid and binding agreement of the
Company or any of its Subsidiaries enforceable against each of the parties
thereto in accordance with its terms, and is in full force and effect with
respect to the Company or any of its Subsidiaries and, to the Knowledge of the
Company, any other party thereto, except as such enforceability may be limited
by bankruptcy, insolvency, moratorium and other similar laws affecting
creditors’ rights generally and by general principles of equity.  The
Company is in material compliance with, and has not materially breached,
violated or defaulted under, or received notice that it has materially breached,
violated or defaulted under, any of the terms or conditions of any such
Contract, nor to the Knowledge of the Company is any party obligated to the
Company or any of its Subsidiaries pursuant to any such Contract subject to any
breach, violation or default thereunder, nor does the Company have Knowledge of
any event that with the lapse of time, giving of notice or both would constitute
such a breach, violation or default by the Company or any of its Subsidiaries or
any such other party.  True and complete copies of each Contract
disclosed in the Disclosure Schedule or required to be disclosed pursuant
to this Section 2.15 (each a
“Material Contract” and
collectively, the “Material
Contracts”) have been delivered to Parent.
  (c)           The
Company and each of its Subsidiaries has fulfilled all material obligations
required pursuant to each Contract to have been performed by the Company or any
of its Subsidiaries prior to the date hereof, and, without giving effect to the
Merger, the Company will fulfill, when due, all of its obligations under the
Material Contracts that remain to be performed after the date hereof through the
Effective Time.
  -19-
 CONFIDENTIAL
  (d)           All
outstanding indebtedness of the Company or any of its Subsidiaries may be
prepaid without penalty.
  2.16 
Interested
Party Transactions . 
Except as set forth in Section
2.16(a) of the Disclosure Schedule, no officer, director or other
Stockholder of the Company or any of its Subsidiaries (nor any ancestor,
sibling, descendant or spouse of any of such persons, or any trust, partnership
or corporation in which any of such persons has or has had an interest), has or
has had, directly or indirectly, (i) an interest in any entity which
furnished or sold, or furnishes or sells, services, products, technology or
Intellectual Property that the Company or any of its Subsidiaries furnishes or
sells, or proposes to furnish or sell, or (ii) any interest in any entity
that purchases from or sells or furnishes to the Company or any of its
Subsidiaries, any goods or services, or (iii) a beneficial interest in any
Contract to which the Company or any of its Subsidiaries is a party; provided, however, that
ownership of no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation shall not be deemed to be an “interest in any
entity” for purposes of this Section 2.16. Except for
the agreements set forth in Section 2.16(b) of the
Disclosure Schedule, there are no agreements, contracts, or commitments with
regard to contribution or indemnification between or among any of the
Stockholders.
  2.17 
Governmental
Authorization . 
Each material consent, license, permit, grant or other authorization
(i) pursuant to which the Company or any of its Subsidiaries currently
operates or holds any interest in any of its properties, or (ii) which is
required for the operation of the Company’s business as currently conducted or
the holding of any such interest (collectively, “Company Authorizations”) has
been issued or granted to the Company or any of its Subsidiaries, as the case
may be.  The Company and each of its Subsidiaries is and has been at
all times in compliance, in all material respects, with all Company
Authorizations.  The Company Authorizations are in full force and
effect and constitute all Company Authorizations required to permit the Company
and its Subsidiaries to operate or conduct its business or hold any interest in
its properties or assets.
  2.18 
Litigation . 
There is no material action, suit, claim or proceeding of any nature pending, or
to the Knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, their respective properties (tangible or intangible, including,
without limitation, the Leased Real Property) or any of their respective
officers or directors, nor to the Knowledge of the Company is there any
reasonable basis therefor.  There is no material investigation or
other proceeding pending or, to the Knowledge of the Company, threatened,
against the Company or any of its Subsidiaries, any of their respective
properties (tangible or intangible, including, without limitation, the Leased
Real Property) or any of their respective officers or directors by or before any
Governmental Entity, nor to the Knowledge of the Company is there any reasonable
basis therefor.  No Governmental Entity has at any time challenged or
questioned the legal right of the Company or any of its Subsidiaries to conduct
their respective operations as presently or previously conducted or as currently
contemplated to be conducted.  There is no material action, suit,
claim or proceeding of any nature pending or, to the Knowledge of the Company,
threatened, against any Person who has a contractual right or a right pursuant
to Delaware Law to
indemnification from the Company related to facts and circumstances existing
prior to the Effective Time, nor are there, to the Knowledge of the Company, any
facts or circumstances that would give rise to such an action, suit, claim or
proceeding.
  -20-
 CONFIDENTIAL
  2.19 
Minute
Books . 
The minutes of the Company and each of its Subsidiaries delivered to Parent
contain complete and accurate records of all actions taken, and summaries of all
meetings held, by the Stockholders, the Board of Directors of the Company and
its Subsidiaries (and any committees thereof) since __________.  At
the Closing, the minute books of the Company and each of its Subsidiaries will
be in the possession of the Company.
  2.20 
Environmental
Matters .
  (a)           Neither
the Company nor any of its Subsidiaries (i) has received
any  notice or other communication of any alleged claim, violation of
or liability under any Environmental Law which has not heretofore been cured or
for which there is any remaining liability; (ii) has disposed of, emitted,
discharged, handled, stored, transported, used or released any Hazardous
Materials, distributed, sold or otherwise placed on the market Hazardous
Materials or any product containing Hazardous Materials, arranged for the
disposal, discharge, storage or release of any Hazardous Materials, or exposed
any employee or other individual to any Hazardous Materials so as to give rise
to any liability or corrective or remedial obligation under any Environmental
Laws; (iii) has entered into any agreement that may require it to
guarantee, reimburse, pledge, defend, hold harmless or indemnify any other party
with respect to liabilities arising out of Environmental Laws or the Hazardous
Materials Activities of the Company or any of its Subsidiaries; (iv) has
Knowledge of any fact or circumstance that could involve the Company or any of
its Subsidiaries in any environmental litigation or impose upon the Company or
any of its Subsidiaries any environmental liability, (v) has been and is in
compliance with all Environmental Laws, and (vi) has delivered to Parent or made
available for inspection by Parent and its agents, representatives and employees
all records in the Company’s or any Subsidiary’s possession concerning the
Hazardous Materials Activities of the Company or any of its Subsidiaries and all
environmental audits and environmental assessments of any facility owned, leased
or used at any time by the Company or any of its Subsidiaries.  To the
Knowledge of the Company, there are no Hazardous Materials in, on, or under any
properties owned, leased or used at any time by the Company or any of its
Subsidiaries such as could give rise to any liability or corrective or remedial
obligation of the Company or any of its Subsidiaries under any Environmental
Laws.
  (b)           For
the purposes of this Section 2.20,
(i) ”Environmental
Laws” means all federal, state, local and foreign laws and regulations
relating to pollution,  protection of the environment, worker health
and safety and exposure of any individual to Hazardous Materials, including laws
and regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, registration, distribution, labeling, recycling, use, treatment,
storage, disposal, transport or handling of Hazardous Materials and including
any Hazardous Materials related electronic waste, product content or product
take-back requirements, (ii) ”Hazardous Materials” means
chemicals, pollutants, contaminants, wastes, toxic substances, emissions,
discharges, radioactive and biological materials, asbestos-containing materials
(ACM), hazardous substances, petroleum and petroleum products or any fraction
thereof, and (iii) ”Hazardous Material Activity”
shall mean the transportation, transfer, recycling, disposal, storage, use,
labeling, treatment, manufacture, removal, remediation, release, exposure of
others to, sale, or distribution of any Hazardous Material or any product or
waste containing a Hazardous Material, or product manufactured with ozone
depleting substances, including, without limitation, any payment of waste fees
or charges (including so-called electronic waste fees) and compliance with any
product take-back or product content requirements.
  -21-
 CONFIDENTIAL
  2.21 Brokers’ and
Finders’ Fees; Third Party Expenses . Neither
the Company nor any of its Subsidiaries has incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders’ fees or agents’
commissions, fees related to investment banking or similar advisory services or
any similar charges in connection with the Agreement or any transaction
contemplated hereby, nor will Parent or the Surviving Corporation incur,
directly or indirectly, any such liability based on arrangements made by or on
behalf of the Company or any of its Subsidiaries.
  2.22 
Employee
Benefit Plans and Compensation .
  (i)                 [Nature and scope of Employee Benefit
reps TBD based on review of Company benefit plans, if any]
  2.23 
Insurance . 
Section 2.23 of the
Disclosure Schedule lists all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of the Company or any of its Subsidiaries or any ERISA
Affiliate, including the type of coverage, the carrier, the amount of coverage,
the term and the annual premiums of such policies.  There is no claim
by the Company or any ERISA Affiliate pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed or that the
Company or any of its Subsidiaries or any ERISA Affiliate has a reason to
believe will be denied or disputed by the underwriters of such policies or
bonds.  In addition, there is no pending claim of which its total
value (inclusive of defense expenses) will exceed the policy
limits.  All premiums due and payable under all such policies and
bonds have been paid, (or if installment payments are due, will be paid if
incurred prior to the Closing Date) and the Company and its Subsidiaries and its
ERISA Affiliates are otherwise in material compliance with the terms of such
policies and bonds (or other policies and bonds providing substantially similar
insurance coverage).  Such policies and bonds (or other policies and
bonds providing substantially similar coverage) have been in effect since five
years prior and remain in full force and effect.  The Company has no
Knowledge of threatened termination of, or premium increase with respect to, any
of such policies.  Neither the Company, any of its Subsidiaries nor
any affiliate of the Company has ever maintained, established, sponsored,
participated in or contributed to any self-insurance plan.
  2.24 
Compliance
with Laws . 
The Company and each of its Subsidiaries has materially complied and is in
material compliance with, is not in material violation of, and has not received
any notices of violation with respect to, any foreign, federal, state or local,
statute, Law or regulation with respect to the operations and all assets and
properties of the Company and each of its Subsidiaries (including, without
limitation, all Leased Real Property).
  2.25 Foreign Corrupt
Practices Act . 
Neither the Company nor any of its Subsidiaries (including any of their
respective officers, directors, agents, employees or other Person associated
with or acting on their behalf) has not, directly or indirectly, taken any
action which would cause it to be in violation of the Foreign Corrupt Practices
Act of 1977, as amended, or any rules or regulations thereunder, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made any unlawful payment to
foreign or domestic government officials or employees or made any bribe, rebate,
payoff, influence payment, kickback or other similar unlawful
payment.
  2.26 Warranties;
Indemnities . 
Except for the warranties and indemnities contained in those contracts and
agreements set forth in Section
2.26 of the Disclosure Schedule and warranties implied by law,
neither the Company nor any of its Subsidiaries has given any warranties or
indemnities relating to products or technology sold or services rendered by the
Company or any of its Subsidiaries.
  -22-
 CONFIDENTIAL
  2.27 Complete Copies
of Materials . 
The Company has delivered true and complete copies of each document (or
summaries of same) that has been requested by Parent or its counsel, including
all Contracts and other documents listed on the Disclosure
Schedule.
  2.28 Representations
Complete . 
None of the representations or warranties made by the Company (as modified by
the Disclosure Schedule) in this Agreement, and none of the statements made in
any schedule or certificate furnished by the Company pursuant to this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained herein or therein, in
the light of the circumstances under which made, not misleading.
  ARTICLE III
  REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
  Each of
Parent and Merger Sub hereby represents and warrants to the Company that on the
date hereof and as of the Effective Time, as though made at the Effective Time,
as follows:
  3.1 
Organization and
Standing . 
Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey.  Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.  Each of Parent and Merger Sub has the
corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the failure to be so qualified or
licensed would have a material adverse effect on the financial condition or
results of operations of the Parent.
  3.2  Authority . 
Each of Parent and Merger Sub has all requisite corporate power and authority to
enter into this Agreement and any Related Agreements to which it is a party and
to consummate the transactions contemplated hereby and thereby.  The
execution and delivery by each of Parent and Merger Sub of this Agreement and
any Related Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Parent and Merger Sub.  This
Agreement and any Related Agreements to which Parent and Merger Sub are parties
have been duly executed and delivered by Parent and Merger Sub and constitute
the valid and binding obligations of Parent and Merger Sub, enforceable against
each of Parent and Merger Sub in accordance with their terms.
  3.3  No Conflict;
Required Filings and Consents .
  (a)           The
execution and delivery by Parent and Merger Sub of this Agreement and each of
the other Related Agreements to which such Person is a party do not, and the
performance of this Agreement and each of the other Related Agreements to which
such Person is a party by Parent or Merger Sub will not, (i) conflict with
or violate the certificate of incorporation or bylaws of Parent or the
certificate of incorporation or bylaws of Merger Sub, or (ii) conflict with
or violate in any material respect any Law or Order in each case applicable to
Parent or Merger Sub or by which its or any of their respective properties,
rights or assets is bound or affected.
  -23-
 CONFIDENTIAL
  (b)           The
execution and delivery by Parent and Merger Sub of this Agreement do not, and
the performance by Parent and Merger Sub of this Agreement shall not, require
Parent or Merger Sub to obtain the Approval of, observe any waiting period
imposed by, or make any filing with or notification to, any Person or
Governmental Entity, except for the filing of the Certificate of Merger in
accordance with Delaware Law, the filing of notification and report forms under
the HSR Act, such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under U.S. or foreign
laws or regulations applicable to mergers or acquisitions involving foreign
parties, if applicable, compliance with applicable requirements of the
Securities Act and compliance with any applicable foreign or state securities or
“blue sky” laws, such Approvals as have already been obtained and such Approvals
as would not have a material adverse effect on the financial condition or
results of operations of Parent.
  3.4 
Parent
Common Stock . 
The Parent Common Stock which constitutes the Merger Consideration has been duly
authorized, and upon consummation of the transactions contemplated by this
Agreement, will be validly issued, fully paid and nonassessable.
  3.5 
SEC
Documents; Parent Financial Statements .  A
true and complete copy of each annual, quarterly, current and other report,
registration statement, and definitive proxy statement filed by Parent with the
SEC since January 1, 2006 and prior to the date hereof (the “Parent SEC Documents”) is
available on the Web site maintained by the SEC at http://www.sec.gov,
other than portions in respect of which confidential treatment was granted by
the SEC.  As of their respective filing dates, the Parent SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Parent SEC
Documents, and none of the Parent SEC Documents contained on their filing dates
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except to
the extent corrected by a subsequently filed Parent SEC Document.  The
financial statements of Parent included in the Parent SEC Documents (the “Parent Financial Statements”)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto, except in the case of pro forma
statements, or, in the case of unaudited financial statements, except as
permitted under Form 10-Q under the Exchange Act) and fairly presented the
consolidated financial position of Parent and its consolidated Subsidiaries as
of the respective dates thereof and the consolidated results of Parent’s
operations and cash flows for the periods indicated (subject to, in the case of
unaudited statements, normal and recurring year-end audit
adjustments).
  3.6 
Litigation . 
There is no proceeding pending against or, to the knowledge of Parent,
threatened against or affecting, Parent or any of its Subsidiaries that has had
or would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the financial condition or results of operations of
Parent.  Neither Parent nor any of its Subsidiaries is subject to any
order against Parent or any of its Subsidiaries or naming Parent or any of its
Subsidiaries as a party that would, individually or in the aggregate, reasonably
be expected to prevent, materially delay or materially impair Parent’s or Merger
Sub’s ability to consummate the transactions contemplated by this
Agreement.
  -24-
 CONFIDENTIAL
  3.7 
Brokers’
and Finders’ Fees . 
Parent has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders’ fees or agents’ commissions, fees related to
investment banking or similar advisory services or any similar charges in
connection with the Agreement or any transaction contemplated hereby, nor will
the Company incur, directly or indirectly, any such liability based on
arrangements made by or on behalf of Parent.
  3.8 
Merger
Sub . 
Parent owns of record and beneficially all of the issued and outstanding capital
stock of Merger Sub.  Merger Sub was formed for the purpose of
facilitating the Merger and has not engaged, and will not engage, in any
activity other than facilitating the Merger.
  ARTICLE IV
  ADDITIONAL
AGREEMENTS
  4.1  Parent Board of
Directors.  At the Effective Time, the board of directors of
Parent and any applicable committee thereof shall take all necessary or
desirable actions within their control and in accordance with Article III,
Section 6 of Parent’s bylaws, to increase the authorized number of directors of
Parent from five to seven, and to nominate Kamal Sarbadhikari and Jose Mir to
fill the vacancies resulting from these newly created
directorships.  From and after the Effective Time until __________,
the board of directors of Parent and any applicable committee thereof shall take
all necessary or desirable actions within their control (including, without
limitation, calling special board and stockholder meetings), so that each of
Messrs. Sarbadhikari and Mir are nominated for election to the board of
directors of Parent.
  4.2  Access to
Information . 
The Company shall afford Parent and its accountants, counsel and other
representatives, reasonable access during the period from the date hereof
through the Effective Time to (i) all of the properties (including for the
performance of environmental tests or investigations as Parent may desire),
books, contracts, commitments and records of the Company, including all Company
Intellectual Property (including access to design processes and methodologies
and all source code, provided that each individual reviewing source code will
enter into a nondisclosure agreement with the Company in a form reasonably
acceptable to the Company, and Parent shall be liable for any breaches by any
such Persons), (ii) all other information concerning the business and
personnel (subject to restrictions imposed by applicable law) of the Company as
Parent may reasonably request, and (iii) all Employees (subject to
restrictions imposed by applicable law) of the Company as identified by
Parent.  The Company agrees to provide to Parent and its accountants,
counsel and other representatives copies of internal financial statements
(including Tax Returns and supporting documentation) promptly upon
request.  Parent will provide the Company with copies of such publicly
available information about Parent as the Company may request.  No
information or knowledge obtained in any investigation pursuant to this Section 4.2 or otherwise
shall affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the
Merger in accordance with the terms and provisions hereof.
  4.3  Confidentiality . 
Each of the parties hereto hereby agrees that the information obtained in any
investigation pursuant to Section 4.2 hereof, or
pursuant to the negotiation and execution of this Agreement or the effectuation
of the transactions contemplated hereby, shall be governed by the terms of the
[Insert description of Any prior Confidentiality Agreement(s) between the
parties] (the “Nondisclosure
Agreement”), between the Company and Parent.  Parent and the
Company agree that such information will constitute “Confidential Information”
as contemplated by the Nondisclosure Agreement, notwithstanding any failure
(i) to specifically designate such information as “Confidential,”
“Proprietary” or some similar designation and (ii) to confirm in writing
that information communicated orally is “Confidential
Information.”  The Company further acknowledges that the Parent Common
Stock is publicly traded and that any information obtained during the course of
its due diligence could be considered to be material non-public information
within the meaning of federal and state securities laws.  Accordingly,
the Company acknowledges and agrees not to engage in any discussions or
correspondence regarding or transactions in the Parent Common Stock in violation
of applicable securities laws.
  -25-
 CONFIDENTIAL
  4.4  Public
Disclosure . 
Neither Parent nor the Company (nor any of their respective representatives)
shall issue any statement or communication to any third party (other than their
agents that are bound by confidentiality restrictions) regarding the subject
matter of this Agreement or the transactions contemplated hereby, including, if
applicable, the termination of this Agreement and the reasons therefor, without
the consent of the other, except that this restriction shall be subject to
Parent’s obligation to comply with applicable securities laws.
  4.5  Reasonable
Efforts . 
Subject to the terms and conditions provided in this Agreement, each of the
parties hereto shall use its reasonable efforts to take promptly, or cause to be
taken promptly, all actions, and to do promptly, or cause to be done promptly,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated hereby, to cause
all conditions to the obligations of the other parties hereto to effect the
Merger to occur, to obtain all necessary waivers, consents, approvals and other
documents required to be delivered hereunder and to effect all necessary
registrations and filings and to remove any injunctions or other impediments or
delays, legal or otherwise, in order to consummate and make effective the
transactions contemplated by this Agreement for the purpose of securing to the
parties hereto the benefits contemplated by this Agreement; provided, however, that
Parent shall not be required to agree to (x) any license, sale or other
disposition or holding separate (through establishment of a trust or otherwise)
of any shares of capital stock or of any business, assets or properties of
Parent, its subsidiaries or affiliates or of the Company, (y) the
imposition of any limitation on the ability of Parent, its subsidiaries or
affiliates or the Company to conduct their respective businesses or own any
capital stock or assets or to acquire, hold or exercise full rights of ownership
of their respective businesses and, in the case of Parent, the business of the
Company, (z) the imposition of any impediment on Parent, its subsidiaries
or affiliates or the Company under any statute, rule, regulation, executive
order, decree, order or other legal restraint governing competition, monopolies
or restrictive trade practices; provided further,
(aa) the Company shall not be required to agree to the imposition of any
limitation on the ability of the Company to conduct its businesses or own any
capital stock or assets or to acquire, hold or exercise full rights of ownership
of its businesses (any such action described in (x), (y), (z) or (aa) an “Action of
Divestiture”).  Nothing herein shall require Parent to litigate
with any Governmental Entity.
  4.6  Notification of
Certain Matters . 
Parent and the Company shall give prompt notice to the other parties to this
Agreement of: (i) the occurrence or non-occurrence of any event, which
occurrence or non-occurrence is likely to cause any representation or warranty
of the notifying party contained in this Agreement to be untrue or inaccurate at
or prior to the Effective Time, and (ii) any failure of the notifying party
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 4.6 shall not
(a) limit or otherwise affect any remedies available to the party receiving
such notice or (b) constitute an acknowledgment or admission of a breach of
this Agreement. No disclosure by the Company pursuant to this Section 4.6 shall be
deemed to amend or supplement the Disclosure Schedule or prevent or cure
any misrepresentation, breach of warranty or breach of covenant.
  -26-
 CONFIDENTIAL
  4.7  Termination of
Stockholders Agreement and Investor Rights Agreement . 
The Company agrees that immediately prior to the Effective Time the Stockholders
Agreement among the Company, Infotonics Technology Center Inc., Kamal
Sarbadhikari and the Investor Rights Agreement between the Company and
Infotonics Technology Center Inc. shall be terminated and of no further force
and effect.
  4.8  Additional
Documents and Further Assurances . 
Each party hereto, at the request of another party hereto, shall execute and
deliver such other instruments and do and perform such other acts and things as
may be necessary or desirable for effecting completely the consummation of the
Merger and the transactions contemplated hereby.
  Stockholder
Approval.
  (a)           As
promptly as practicable after the date of this Agreement, Parent and the Company
shall prepare and make such filings as are required under applicable blue sky
laws relating to the transactions contemplated by this Agreement.  The
Company shall assist Parent as may be necessary to comply with the securities
and blue sky laws relating to the transactions contemplated by this
Agreement.
  (b)           As
promptly as practicable after the execution of this Agreement, the Company shall
submit this Agreement and the transactions contemplated hereby to the
Stockholders for approval and adoption as provided by Delaware Law and the
Charter Documents.  Such submission, and any proxy or consent in
connection therewith, shall include a solicitation of Requisite Stockholder
Vote.
  (c)           Any
materials to be submitted to the Stockholders in connection with the
solicitation of their approval of the Merger and this Agreement, including any
Information Statement and if required pursuant to Section 4.8(e)any
materials submitted to the Stockholders in connection with obtaining the 280G
Approval (the “Soliciting
Materials”), shall be subject to reasonable review and approval by Parent
and shall include information regarding the Company, the terms of the Merger and
this Agreement, and the unanimous recommendation of the Board of Directors of
the Company in favor of the Merger and this Agreement, including each of the
matters set forth in Section 4.8(b) hereof and
if required pursuant to Section
4.8(e), the 280G Approval.  Anything to the contrary
contained herein notwithstanding, the Company shall not include in the
Soliciting Materials any information with respect to Parent or its affiliates or
associates, the form and content of which shall not have been consented to in
writing by Parent prior to such inclusion.  The Company and Parent
will promptly advise the other in writing if at any time prior to the Closing
the Company or Parent, as the case may be, shall obtain knowledge of any facts
that might make it necessary or appropriate to amend or supplement the
Soliciting Materials in order to make statements contained or incorporated by
reference therein not misleading or to comply with applicable law; provided that Parent shall
only be required to provide notice of any such facts to the extent such facts
relate to information furnished in writing by Parent or Merger Sub for the
express purposes of including in such Soliciting Materials.
  (d)           The
Company shall obtain the consent of its Stockholders to enable the Closing to
occur as promptly as practicable following the date hereof.
  -27-
 CONFIDENTIAL
  (e)           In
addition, the Company shall promptly submit to the Stockholders for approval (in
a manner satisfactory to Parent), by such number of Stockholders as is required
by the terms of Section 280G(b)(5)(B) of the Code, any payment and/or
benefits that may, separately or in the aggregate, constitute an “excess
parachute payment” within the meaning of Section 280G(b)(2) of the Code (“Section 280G Payments”)
(which determination shall be made by the Company and shall be subject to review
and approval by Parent), such that all such payments and benefits shall not be
deemed to be Section 280G Payments (the “280G Approval”), and prior to
the Effective Time the Company shall deliver to Parent evidence satisfactory to
Parent that a Stockholder vote was solicited in conformance with
Section 280G and the regulations promulgated thereunder and that (x) such
requisite 280G Approval was obtained with respect to any Section 280G
Payment, or (y) that the 280G Approval was not obtained with respect to any
Section 280G Payment and as a consequence, that Section 280G Payment
shall not be made or provided, pursuant to the waivers of those payments and/or
benefits which were executed by the affected individuals prior to the
Stockholder vote.
  (f)           The
Board of Directors of the Company shall not alter, modify, change or revoke its
unanimous approval of the Merger, this Agreement and the transactions
contemplated hereby, including if required pursuant to Section 4.8(e),the 280G Approval, and
its unanimous recommendation to the Stockholders to vote in favor of the
principal terms of this Agreement, the Merger, the Certificate of Merger and the
transactions contemplated by this Agreement and the Certificate of Merger and
pursuant to Section 4.8(e), the 280G
Approval.
  4.9  Merger
Notification .
  (a)           To
the extent applicable, as soon as may be reasonably practicable, the Company and
Parent (and any applicable Stockholder of the Company) shall make all filings,
notices, petitions, statements, registrations and submissions of information,
application or submission of other documents required by any Governmental Entity
in connection with the Merger and the transactions contemplated hereby,
including: (i) Notification and Report Forms with the FTC and DOJ as
required by the HSR Act and (ii) any filings required under U.S. or foreign
laws or regulations applicable to mergers or acquisitions involving foreign
parties.  Each of Parent and the Company shall cause all documents
that it is responsible for filing with any Governmental Entity under this Section 4.9 to comply in
all material respects with applicable law.
  (b)           The
Company and Parent (and/or any applicable Stockholder of the Company) each shall
promptly (a) supply the others with any information which reasonably may be
required in order to effectuate the filings contemplated by Section 4.9(a) and
(b) supply any additional information which reasonably may be required by
the competition or merger control authorities of any other jurisdiction and
which the parties may reasonably deem appropriate.  Except where
prohibited by applicable law, the Company shall consult with Parent prior to
taking a position with respect to any such filings, shall permit Parent to
review and discuss in advance, and consider in good faith the views of Parent in
connection with, any analyses, appearances, presentations, memoranda, briefs,
white papers, other materials, arguments, opinions and proposals before making
or submitting any of the foregoing to any Governmental Entity in connection with
any investigations or proceedings in connection with this Agreement or the
transactions contemplated hereby, coordinate with Parent in preparing and
providing such information and promptly provide Parent (and its counsel) copies
of all filings, presentations and submissions (and a summary of oral
presentations) made by the Company with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.  Parent
shall have principal control over the strategy for interacting with such
Governmental Entities in connection with the matters contained in this Section 4.9.
  -28-
 CONFIDENTIAL
  (c)           Each
of Parent and the Company shall notify the other promptly upon the receipt of
(i) any comments from any officials of any Governmental Entity in
connection with any filings made pursuant hereto and (ii) any request by
any officials of any Governmental Entity for amendments or supplements to any
filings made pursuant to, or information provided to comply in all materials
respect with, applicable law.  Whenever any event occurs that is
required to be set forth in an amendment or supplement to any filing made
pursuant to Section 4.9(a), Parent or
the Company, as the case may be, will promptly inform the other of such
occurrence and cooperate in filing with the applicable Governmental Entity such
amendment or supplement.
  4.10 Consents .  The
Company shall use its best efforts to obtain all necessary consents, waivers and
approvals of any parties to any Contract, and give all necessary notices to such
parties, as are required thereunder in connection with the Merger or for any
such Contracts to remain in full force and effect, all of which are required to
be listed in Section 2.5of the Disclosure Schedule, so as to preserve all rights of, and benefits
to, the Company under such Contract from and after the Effective
Time.  Such consents, waivers, approvals and notices shall be in a
form reasonably acceptable to Parent.  In the event that the other
parties to any such Contract, including any lessor or licensor of any Leased
Real Property, conditions its grant of a consent, waiver, approval (including by
threatening to exercise a “recapture” or other termination right) upon the
payment of a consent fee, “profit sharing” payment or other consideration,
including increased rent payments or other payments under the Contract, unless
otherwise agreed to by Parent and the Company, the Company shall be responsible
for making all payments required to obtain such consent, waiver or approval, and
Parent shall be entitled to indemnification for all losses, costs, claims,
liabilities and damages arising from the same.
  4.11 Restrictions on
Transfer . 
The shares of Parent Common Stock to be issued to the Stockholders as the Merger
Consideration will be restricted securities under Rule 144 of the Securities Act
and will be subject to applicable holding periods and restrictions on transfer
thereunder.
  4.12  Proprietary
Information and Inventions Assignment Agreement . 
The Company shall cause each current employee of the Company to have entered
into and executed, and each person who becomes an employee of the Company after
the date hereof and prior to the Closing shall be required by the Company to
enter into and execute, an Employee Proprietary Information Agreement with the
Company effective as of such employee’s first date of employment or
service.  The Company shall cause each current consultant or
contractor of the Company to have entered into and executed, and each person who
becomes a consultant or contractor of the Company after the date hereof and
prior to the Closing shall be required by the Company to enter into and execute,
a Consultant Proprietary Information Agreement with the Company effective as of
such consultant or contractor’s first date of service.
  4.13  New Employment
Benefits . 
As of the Effective Time, all current employees of the Company shall continue as
employees of the Surviving Corporation or Parent or any subsidiary of Parent, as
Parent directs.  Continuing Employees shall be eligible to receive
employee benefits on substantially the same basis in the aggregate as similarly
situated current employees of Parent and its subsidiaries; provided, that, in Parent’s
discretion, for a period not to exceed twelve (12) months, Parent may provide
Continuing Employees with benefits in accordance with one or more
of  the Company’s employee benefits in effect prior to the Effective
Time.  For purposes of employee benefits for Continuing Employees,
Parent shall cause its employee benefit plans to recognize service with the
Company and its subsidiaries prior to the Effective Time for eligibility,
participation, and vesting but not for benefit accruals under any defined
benefit plan, if any.  To the extent permitted by Applicable Law,
Parent shall, or shall cause the Parent sponsored plan to, use commercially
reasonable efforts to waive any pre-existing condition exclusions (if the
condition was covered under the Company’s employee benefit plans) and provide
that any expenses incurred on or before the Effective Time by a Company employee
(or such Company employee’s dependents) shall be taken into account for purposes
of satisfying applicable deductible, coinsurance and maximum out of pocket
provisions.
  -29-
 CONFIDENTIAL
  4.14  Employment
Agreements . 
Prior to or concurrent with Closing, the Company shall cause the Key Employees
to execute and deliver to Parent an Employment Agreement.
  4.15  Resignation of
Officers and Directors . 
The Company shall cause each officer and director of the Company to execute a
resignation letter effective as of the Effective Time.
  4.16  Reorganization .
  (a)           Each
of Each of Parent and Merger Sub covenants and agrees that none of Parent,
Merger Sub or Surviving Corporation shall take or permit or suffer any of their
Affiliates or related persons (within the meaning of Section 1.368-1(e)(4) of
the Income Tax Regulations) to take any action (including the failure to file
the Certificate of Merger) on or after the Closing Date which would cause the
transactions contemplated by this Agreement to fail to qualify as a
reorganization within the meaning of Section 368(a)(1)(A) of the
Code.  Neither Parent nor any related person (within the meaning of
Section 1.368-1(e)(4) of the Income Tax Regulations) has any plan or intention
to redeem or acquire any of the Parent Common Stock issued pursuant to the
Merger.  Notwithstanding the foregoing, Parent may purchase shares of
Parent Common Stock pursuant to one or more share repurchase plans satisfying
the requirements of Revenue Ruling 99-58 (1999-2 C.B. 701).  Parent or
a member of its qualified group (within the meaning of Section 1.368-1(d)(4)(ii)
of the Income Tax Regulations) intends to continue the “historic business” of
the Company or use a “significant portion” of the Company’s “historic business
assets” in a business following the Merger, within the meanings of Section
1.368-1(d) of the Income Tax Regulations.
  (b)           As
soon as reasonably practicable after the Effective Time, Parent shall effect a
ten-for-one reverse stock split of all authorized, issued and outstanding shares
of capital stock of Parent.
  4.17 Release of
Liens . 
The Company shall file, or shall have filed, all agreements, instruments,
certificates and other documents, in form and substance reasonably satisfactory
to Parent, that are necessary or appropriate to effect the release of all Liens
set forth in Schedule 4.16(a)
hereto.
  4.18 FIRPTA
Compliance . 
On the Closing Date, the Company shall deliver to Parent a properly executed
statement (a “FIRPTA Compliance
Certificate”) in a form reasonably acceptable to Parent for purposes of
satisfying Parent’s obligations under Treasury
Regulation Section 1.1445-2(c)(3).
  ARTICLE V
  CONDITIONS
TO THE MERGER
  5.1 Conditions to
Obligations of Each Party to Effect the Merger . 
The respective obligations of the Company, Parent and Merger Sub to effect the
Merger shall be subject to the satisfaction, at or prior to the Effective Time,
any of which may be waived, in writing, by the Company, Parent and Merger Sub,
of the following conditions:
  -30-
 CONFIDENTIAL
  (a)           No Order;
Injunctions; Restraints; Illegality.  No Governmental Entity
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction, order or other legal restraint
(whether temporary, preliminary or permanent) which is in effect and which has
the effect of making the Merger illegal or otherwise prohibiting or preventing
consummation of the Merger.
  (b)           Regulatory
Approvals/HSR Act.  If applicable, all waiting periods under
the HSR Act relating to the transactions contemplated hereby will have expired
or terminated early and all approvals required to be obtained under U.S. or
foreign laws or regulations applicable to mergers or acquisitions involving
foreign parties prior to the Merger in connection with the transactions
contemplated hereby have been obtained.
  5.2  Conditions to the
Obligations of Parent and Merger Sub . 
The obligations of Parent and Merger Sub to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by Parent,
Merger Sub or the Surviving Corporation:
  (a)           Representations,
Warranties and Covenants.  (i) The representations and
warranties of the Company in this Agreement  shall have been true and
correct on the date they were made and shall be true and correct in all material
respects (without giving effect to any limitation as to “materiality,” “material
adverse effect” or “Knowledge” set forth therein) on and as of the Closing Date
as though such representations and warranties were made on and as of such date
(other than the representations and warranties of the Company as of a specified
date, which shall be true and correct as of such date), and (ii) the
Company shall have performed and complied in all material respects with all
covenants and obligations under this Agreement required to be performed and
complied with by such parties as of the Closing.
  (b)           No Material
Adverse Effect.  Since the Current Balance Sheet Date, there
shall not have occurred any event or condition of any character that has had or
is reasonably likely to have, either individually or in the aggregate with all
such other events or conditions, a material adverse effect on the financial
condition or results of operations of the Company.
  (c)           Stockholder
Approval.  Stockholders constituting the Requisite Stockholder
Vote, and holding not less than 90% of the issued and outstanding shares of
Capital Stock of the Company, shall have approved this Agreement, the
Certificate of Merger, the Merger, and the transactions contemplated hereby and
thereby.
  (d)           Unanimous Board
Approval.  The Board of Directors of the Company shall have
unanimously approved this Agreement, the Certificate of Merger, the Merger and
the transactions contemplated hereby and thereby, which unanimous approval shall
not have been altered, modified, changed or revoked.
  -31-
 CONFIDENTIAL
  (e)           280G Stockholder
Approval.  With respect to any payments and/or benefits that
the Company (after consultation with Parent) reasonably determines may
constitute “excess parachute payments” under Section 280G of the Code, the
Stockholders shall have (i) approved, pursuant to the method provided for
in the regulations promulgated under Section 280G of the Code, any such
“excess parachute payments” or (ii) shall have voted upon and disapproved
such parachute payments, and, as a consequence, such “excess parachute payments”
shall not be paid or provided for in any manner and Parent and its subsidiaries
shall not have any liabilities with respect to such “parachute
payments.”
  (f)           Dissenters’
Rights.  The Company shall have delivered notice in accordance
with the applicable provisions of Delaware Law such that no Stockholder will be
able to exercise dissenters’ rights if such Stockholder has not perfected such
dissenters’ rights prior to Closing, and Stockholders holding no more than five
percent (5%) of the Total Outstanding Shares shall continue to have a right to
exercise appraisal, dissenters’ or similar rights under applicable law with
respect to their Company Capital Stock by virtue of the Merger.
  (g)           Litigation.  There
shall be no action, suit, claim, order, injunction or proceeding of any nature
pending, or overtly threatened, (i) against Parent or the Company, their
respective properties or any of their respective officers, directors or
subsidiaries arising out of, or in any way connected with, the Merger or the
other transactions contemplated by the terms of this Agreement or otherwise
seeking any of the results set forth in Section 5.1(a)hereof or
(ii) against the Company, its properties or any of its officers, directors
or subsidiaries that has had or is reasonably likely to have a material adverse
effect on the financial condition or results of operations of the
Company.
  (h)           Governmental
Approval.  All material approvals from any Governmental Entity
deemed appropriate or necessary by Parent shall have been timely obtained, and
all filings under applicable blue sky laws relating to the transactions
contemplated by this Agreement shall have been made.
  (i)           Proprietary
Information and Inventions Assignment Agreement.  The Company
shall have provided evidence satisfactory to Parent that as of the Closing each
current and, subject to the limitations set forth in this Agreement, former
employee, consultant and contractor of the Company has entered into and executed
an Employee Proprietary Information Agreement or Consultant Proprietary
Information Agreement, as applicable.
  (j)           Resignation of
Officers and Directors.  Parent shall have received a written
resignation letter from each of the officers and directors of the Company
effective as of the Effective Time in a form acceptable to Parent.
  (k)           280G Waivers.  Each
Person who is reasonably likely to receive any payments and/or benefits referred
to in Section 4.8(e) hereof
shall have executed and delivered to the Company a 280G Waiver, each in the
form attached hereto as Exhibit D (a “280G Waiver”), and such
280G Waiver shall be in effect immediately prior to the Stockholder vote
contemplated by Section 4.7.
  (l)           Release of
Liens.  Parent shall have received from the Company a duly and
validly executed copy of all agreements, instruments, certificates and other
documents, in form and substance reasonably satisfactory to Parent, that are
necessary or appropriate to evidence the release of all Liens identified on
Schedule
4.15(a).
  -32-
 CONFIDENTIAL
  (m)          Certificate of
the Company.  Parent shall have received certificates from the
Company, validly executed by the Chief Executive Officer and Chief Financial
Officer of the Company for and on the Company’s behalf, to the effect that, as
of the Closing:
  (i)                the
representations and warranties of the Company in this Agreement  were
true and correct on the date they were made and are true and correct in all
material respects (without giving effect to any limitation as to “materiality,”
“material adverse effect” or “Knowledge” set forth therein) on and as of the
Closing Date as though such representations and warranties were made on and as
of such date (other than the representations and warranties of the Company as of
a specified date, which were true and correct as of such date);
  (ii)               the
Company has performed and complied in all material respects with all covenants
and obligations under this Agreement required to be performed and complied with
by such party as of the Closing;
  (iii)              the
condition to the obligations of Parent and Sub set forth in Section 5.2(b) has been
satisfied (unless otherwise waived in accordance with the terms
hereof);
  (n)           Certificate of
Secretary of Company.  Parent shall have received a
certificate, validly executed by the Secretary of the Company, certifying as to
(i) the terms and effectiveness of the Charter Documents, (ii) the
valid adoption of resolutions of the Board of Directors of the Company (whereby
the Merger and the transactions contemplated hereunder and the additional
matters identified in Section 4.8(b) and, if
required, Section 4.8(e) hereof,
were unanimously approved by the Board of Directors) and (iii) that the
Stockholders constituting the Requisite Stockholder Vote have adopted and
approved the Merger, this Agreement and the consummation of the transactions
contemplated hereby and approval of any payments or benefits that may be deemed
to constitute a “parachute payment” within the meaning of 280G of the
Code.
  (o)           Certificate of
Good Standing.  Parent shall have received a long-form
certificate of good standing from the Secretary of State of the State of
Delaware which is dated within two (2) Business Days prior to Closing with
respect to the Company.
  (p)           Certificate of
Status of Foreign Corporation.  Parent shall have received a
Certificate of Status of Foreign Corporation of the Company from the applicable
Governmental Entity in each jurisdiction listed in Schedule 5.2(p), all of which
are dated within three (3) Business Days prior to the Closing.
  (q)           FIRPTA
Certificate.  Parent shall have received a copy of the FIRPTA
Compliance Certificate, validly executed by a duly authorized officer of the
Company.
  5.3 Conditions to
Obligations of the Company . 
The obligations of the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by the
Company:
  -33-
 CONFIDENTIAL
  (a)           Representations,
Warranties and Covenants.  (i) The representations and
warranties of Parent and Merger Sub in this Agreement shall have been true and
correct when made and shall be true and correct in all material respects
(without giving effect to any limitation as to “materiality,” “material adverse
effect” or “Knowledge” set forth therein) on and as of the Closing Date as
though such representations and warranties were made on and as of such date
(other than the representations and warranties of Parent and Merger Sub as of a
specified date, which shall be true and correct as of such date), and
(ii) each of Parent and Merger Sub shall have performed and complied in all
material respects with all covenants and obligations under this Agreement
required to be performed and complied with by such parties as of the Closing
Date.
  (b)           Certificate of
Parent.  The Company shall have received a certificate from
Parent executed by its President or Chief Executive Officer for and on its
behalf to the effect that, as of the Closing:
  (i)                all
representations and warranties made by Parent and Merger Sub in this Agreement
were true and correct on the date they were made and are true and correct in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of such date (other than the representations
and warranties of Parent and Merger Sub as of a specified date, which were true
and correct as of such date);
  (ii)               Parent
and Merger Sub have performed and complied in all material respects with all
covenants and obligations under this Agreement required to be performed or
complied with by such parties as of the Closing; and
  (iii)              the
condition to the obligations of the Company set forth in Section 5.3(c) has been
satisfied (unless otherwise waived in accordance with the terms
hereof).
  (c)           No Material
Adverse Effect.  Since December 31, 2007, there shall not
have occurred any event or condition of any character that has had or is
reasonably likely to have, either individually or in the aggregate with all such
other events or conditions, a material adverse effect on the financial condition
and results of operations of Parent.
  (d)           Board
Approval.  The Board of Directors of Parent shall have approved
this Agreement, the Merger and the transactions contemplated hereby and thereby,
which approval shall not have been altered, modified, changed or
revoked.
  ARTICLE VI
  SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
  6.1 Survival of
Representations and Warranties . 
The representations and warranties of the Company contained in this Agreement or
in any certificate or other instruments delivered pursuant to this Agreement,
shall survive until the twelve (12) month anniversary of the Closing Date (such
date, the “Survival
Date”); providedthat the representations and warranties in Section 2.2hereof (under
the heading “Company Capital Structure”) and Section 2.4 hereof (under
the heading “Authority”) shall survive indefinitely and the representations and
warranties in Section 2.11 hereof
(under the heading “Tax Matters”) shall survive until the expiration of the
applicable statute of limitations (collectively with the representations and
warranties in Section 2.2 and Section 2.4, the “Specified Representations”);
provided, further, that
in the event of fraud, gross negligence or willful misconduct such
representation or warranty shall survive indefinitely with respect to the Person
or Persons committing such fraud, gross negligence or willful
misconduct.  The representations and warranties of Parent and Merger
Sub contained in this Agreement or in any certificate or other instrument
delivered pursuant to this Agreement shall terminate at the Closing; provided, further, that in
the event of fraud, gross negligence or willful misconduct such representation
or warranty shall survive indefinitely with respect to the Person or Persons
committing such fraud, gross negligence or willful misconduct.
  -34-
 CONFIDENTIAL
  6.2 Indemnification .
  (a)           The
Stockholders agree to severally and not jointly indemnify and hold harmless
Parent and its officers, directors, affiliates, employees, agents and
representatives, including the Surviving Corporation (the “Indemnified Parties”), against
all claims, losses, liabilities, damages, deficiencies, costs, interest, awards,
judgments, penalties and expenses, including attorneys’ and consultants’ fees
and expenses and including any such expenses incurred in connection with
investigating, defending against or settling any of the foregoing (hereinafter
individually a “Loss”
and collectively “Losses”) incurred or sustained
by the Indemnified Parties, or any of them (including the Surviving
Corporation), directly or indirectly, as a result of the following:
  (i)                any
breach or inaccuracy of a representation or warranty of the Company contained in
this Agreement or any certificates or other instruments delivered by or on
behalf of the Company pursuant to this Agreement (provided that, in the event of
any such breach or inaccuracy, solely for purposes of determining the amount of
any Loss no effect will be given to any qualification as to “materiality,” a
“material adverse effect” or “Knowledge” contained therein),
  (ii)               any
failure by the Company to perform or comply with any covenant applicable to any
of them contained in this Agreement or any certificates or other instruments
delivered pursuant to this Agreement,
  (iii)              any
fraud, gross negligence or willful misconduct resulting in a breach or
inaccuracy of any representation, warranty or covenant contained in this
Agreement or any certificates or other instruments delivered pursuant to this
Agreement on the part of the Company,
  (iv)              any
Dissenting Share Payments, and
  (v)               any
payment or consideration arising under any consents, waivers or approvals of any
party under any agreement as are required in connection with the Merger or for
any such agreement to remain in full force or effect following the Effective
Time.
  The
Stockholders (including any officer or director of the Company) shall not have
any right of contribution, indemnification or right of advancement from the
Surviving Corporation or Parent with respect to any Loss claimed by an
Indemnified Party; provided,
however, that any rights to which a director or officer is otherwise
entitled pursuant to the indemnification agreements disclosed on Schedule 6.2(b) or any
applicable insurance policy or Delaware law shall not be affected by this Article VI.
  6.3 Maximum Payments;
Remedy .
  (a)           Except
as set forth in Section 6.3(b) hereof,
the maximum amount an Indemnified Party may recover from a Stockholder
individually pursuant to the indemnity set forth in Section 6.2 hereof for
Losses shall be [TBD].
  -35-
 CONFIDENTIAL
  (b)           Notwithstanding
anything to the contrary set forth in this Agreement, in the event of Losses
arising out of (i) the Specified Representations, or (ii) any fraud,
gross negligence or willful misconduct by any Person (other than Parent and its
affiliates), gross negligence or willful misconduct resulting in a breach or
inaccuracy of any representation, warranty or covenant contained in this
Agreement, or any certificates or other instruments delivered pursuant to this
Agreement, each Stockholder shall be liable for all such Losses, but in the case
of (i) only up to the full amount of the Merger Consideration received by
such Stockholder, provided
further that nothing in this Agreement shall limit the liability of any
Person (including any Stockholder) for any such Losses if such Person
perpetrated such fraud, gross negligence or willful misconduct.
  (c)           Notwithstanding
anything to the contrary herein, the parties hereto agree and acknowledge that
any Indemnified Party may bring a claim for indemnification for any Loss under
this Article VInotwithstanding the fact that such Indemnified Party had knowledge of the
breach, event or circumstance giving rise to such Loss prior to the Closing,
except where Parent has waived a condition to Closing.
  (d)           Notwithstanding
anything to the contrary herein, nothing shall prohibit Parent from seeking and
obtaining recourse against the Stockholders, or any of them, in the event that
Parent issues more than the Merger Consideration to which the Stockholders, or
any of them, are entitled pursuant to Article I of this
Agreement.
  ARTICLE VII
  TERMINATION,
AMENDMENT AND WAIVER
  7.1 Termination . 
Subject to Section 7.2 hereof, this
Agreement may be terminated and the Merger abandoned at any time prior to the
Closing:
  (a)           by
mutual agreement of the Company and Parent;
  (b)           by
Parent if the Stockholder Written Consents for each Company Stockholder shall
have not been obtained by the Company and delivered to the Parent within 24
hours after the execution and delivery of this Agreement by the
Company;
  (c)           by
Parent or the Company if the Closing Date shall not have occurred by
_______________; provided,
however, that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes breach of this
Agreement;
  (d)           by
Parent if any Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction, order or other legal restraint which is in effect and which has the
effect of making the Merger illegal;
  (e)           by
Parent if there shall be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the Merger by any
Governmental Entity, which would constitute an Action of
Divestiture;
  -36-
 CONFIDENTIAL
  (f)           by
Parent if it is not in material breach of its obligations under this Agreement
and there has been a breach of any representation, warranty, covenant or
agreement of the Company contained in this Agreement such that the conditions
set forth in Section 5.2(a) or Section 5.2(b) hereof
would not be satisfied and such breach has not been cured within twenty (20)
calendar days after written notice thereof to the Company; provided, however, that no
cure period shall be required for a breach which by its nature cannot be cured;
or
  (g)           by
the Company if the Company is not in material breach of its obligations under
this Agreement and there has been a breach of any representation, warranty,
covenant or agreement of Parent contained in this Agreement such that the
conditions set forth in Section 5.3(a) or Section 5.3(c) hereof
would not be satisfied and such breach has not been cured within twenty (20)
calendar days after written notice thereof to Parent; provided, however, that no
cure period shall be required for a breach which by its nature cannot be
cured.
  7.2  Effect of
Termination . 
In the event of termination of this Agreement as provided in Section 7.1 hereof, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, the Company, or its respective officers,
directors or Stockholders, if applicable; provided, however, that each
party hereto and each Person shall remain liable for any breaches of this
Agreement prior to its termination; and provided further, however, that the provisions
of SectionsError!
Reference source not found.4.3 and 4.4hereof, Article VIII hereof and
this Section 7.2
shall remain in full force and effect and survive any termination of this
Agreement pursuant to the terms of this Article VII.  For
purposes of clarity, nothing in Article VI shall limit
the liability of the Company for any breach of any representation, warranty or
covenant contained in this Agreement or in any certificates or other instruments
delivered pursuant to this Agreement in the event of termination of this
Agreement.
  7.3  Amendment . 
This Agreement may be amended by the parties hereto at any time by execution of
an instrument in writing signed on behalf of the party against whom enforcement
is sought.
  7.4  Extension;
Waiver . 
At any time prior to the Closing, Parent, on the one hand, and the Company, on
the other hand, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to
such party contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the covenants, agreements or conditions
for the benefit of such party contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
  ARTICLE VIII
  GENERAL
PROVISIONS
  8.1 Notices . 
All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial messenger or courier
service, or mailed by registered or certified mail (return receipt requested) or
sent via facsimile (with acknowledgment of complete transmission) to the parties
at the following addresses; provided, however, that notices sent by mail will
not be deemed given until received:
  -37-
 CONFIDENTIAL
  (a)           if
to Parent or Merger Sub, to:
  with a
copy to:
  (b)           if
to the Company, to:
  with a
copy to:
  8.2  Interpretation . 
The words “include,” “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation.”  The
table of contents 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.
  8.3  Counterparts . 
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart.
  8.4  Entire Agreement;
Assignment . 
This Agreement, the Exhibits hereto, the Disclosure Schedule, the Nondisclosure
Agreement, and the documents and instruments and other agreements among the
parties hereto referenced herein: (i) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings both written and oral, among the parties with
respect to the subject matter hereof; (ii) are not intended to confer upon
any other person any rights or remedies hereunder; and (iii) shall not be
assigned by operation of law or otherwise, except that Parent may, upon two (2)
Business Days’ prior written notice to the Company assign its rights and
delegate its obligations hereunder to a wholly-owned subsidiary as long as
Parent remains primarily liable for all of Parent’s obligations hereunder and
such assignment and/or delegation does not adversely affect the characterization
of the Merger as a statutory merger of the Company with and into the Parent for
federal income tax purposes.
  8.5  Severability . 
In the event that any provision of this Agreement or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement will continue in full force
and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto.  The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
  8.6  Other
Remedies . 
Any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.  Other than as set
forth above, the indemnification provisions of Article VI,includingSection
6.3, are the sole and exclusive remedy of a party hereto or any other
person entitled to indemnification hereunder with respect to any claim made
under this Agreement.
  -38-
 CONFIDENTIAL
  8.7  No Third Party
Beneficiaries . 
This Agreement, the Exhibits and Schedules hereto, the Disclosure Schedule, and
the documents and instruments and other agreements among the parties hereto
referenced herein are not intended to, and shall not, confer upon any other
person any rights or remedies hereunder, nor create any right, claim or remedy
of any nature whatsoever, including, but not limited to, any rights of
employment for any specified period and/or any employee benefits in favor of any
Person, union, association, Continuing Employee, Key Employee, Employer, other
employee or former employee, contractor or other entity, other than the parties
hereto and their respective successors and permitted assigns.
  8.8  Governing Law;
Exclusive Jurisdiction . 
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.  Each of the
parties hereto irrevocably consents to the exclusive jurisdiction and venue of
any court within New York County, State of New York, in connection with any
matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by
the laws of the State of New York for such persons and waives and covenants not
to assert or plead any objection which they might otherwise have to such
jurisdiction, venue and such process.
  8.9  Rules of
Construction . 
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefor, waive the application
of any law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
  8.10 
Waiver of
Jury Trial . 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY
PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
HEREOF.
  [remainder
of page intentionally left blank]
 
 -39-
  IN
WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement
to be signed, all as of the date first written above.
 
 BIOSCOPIX,
      INC.By:
                          /s/
      Peter KatevatisName:
      Peter KatevatisTitle:  
      PresidentSENSIVIDA
      MEDICAL SYSTEMS, INC.By:
                          /s/
      Kamal SarbadhikariName:
      Kamal SarbadhikariTitle:  
      PresidentSENSIVIDA
      ACQUISITION CORP.By:
                          /s/
      Kamal SarbadhikariName: 
      Kamal SarbadhikariTitle:   
      President
  [Signature
Page to Agreement and Plan of Reorganization]