Document:

exv10w3

 

Exhibit 10.3

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of
September 12, 2007 by and among (i) netASPx, Inc., a Delaware corporation (the “Company”),
(ii) NaviSite, Inc., a Delaware corporation (“Parent”), (iii) NSite Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) and (iv) for
the limited purpose of agreeing to perform the duties specified in Section 3.09, GTCR Fund VI, L.P.
(the “Representative”). Parent, Merger Sub and the Company are referred to herein
collectively as the “Parties” or individually as a “Party.”

     WHEREAS, the Board of Directors of the Company deems it advisable and in the best interest of
the Company’s stockholders to enter into this Agreement and to consummate the transactions
contemplated hereby on the terms and subject to the conditions provided for in this Agreement;

     WHEREAS, in furtherance thereof it is proposed that the acquisition of the Company by Parent
be accomplished by the merger of Merger Sub with and into the Company (the “Merger”), with
the Company being the surviving corporation in accordance with the DGCL, followed as an integral
part of the same transaction by a merger of the Company in accordance with the DGCL into a limited
liability company wholly-owned by Parent (the “Successor LLC”);

     WHEREAS, the Boards of Directors of each of Parent (on its own behalf and as the sole
stockholder of Merger Sub), Merger Sub and the Company have each approved the Merger and deemed it
advisable that the Parties enter into this Agreement providing for the Merger; and

     WHEREAS, Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and to prescribe various
conditions to the Merger.

     NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement and intending to be legally bound
hereby, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

     Section 1.01 Defined Terms. When used in this Agreement, the following terms shall
have the meanings set forth below:

     “Acquisition Proposal” has the meaning set forth in Section 6.06(f).

     “Advisors” has the meaning set forth in Section 6.06(a).

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Exchange Act.

     “Aggregate Exercise Price” means the aggregate of the exercise prices of the In the
Money Options and Warrants outstanding immediately prior to the Effective Time.

 

 

     “Agreement” has the meaning set forth in the introductory paragraph above.

     “Ancillary Documents” means the documents, instruments and agreements to be executed
and/or delivered pursuant to this Agreement or pursuant to any Ancillary Document.

     “Applicable Law” or “Applicable Laws” means, with respect to any Person, any
and all laws (including the common law), ordinances, constitutions, regulations, statutes,
treaties, rules, codes, licenses, requirements and injunctions adopted, enacted, implemented,
promulgated, issued, entered by or under the authority of any Governmental Body having jurisdiction
over such Person or any of such Person’s properties or assets.

     “Broker” has the meaning set forth in Section 4.21.

     “Business Day” means any day of the year other than a Saturday, a Sunday, or other day
on which commercial banks in New York, New York are authorized or required by law to be closed.

     “Cash Portion of the Merger Consideration” has the meaning set forth in Section
3.01(a).

     “Cash Portion of the Per Share Closing Merger Consideration” shall be equal to (x) the
Cash Portion of the Merger Consideration divided by (y) the number of Fully-Diluted Company Shares.

     “Certificate of Merger” has the meaning set forth in Section 2.02.

     “Certificates” has the meaning set forth in Section 3.05(b).

     “Closing” has the meaning set forth in Section 2.02.

     “Closing Date” has the meaning set forth in Section 2.02.

     “Closing Merger Consideration” has the meaning set forth in Section 3.01(c)(iii).

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Collateral Source” has the meaning set forth in Section 10.07.

     “Common Stock” means the common stock, par value $0.0001 per share, of the Company.

     “Common Stockholders” has the meaning set forth in Section 3.05(b).

     “Company” has the meaning set forth in the introductory paragraph above.

     “Company Balance Sheet” has the meaning set forth in Section 4.07(a).

     “Company Balance Sheet Date” has the meaning set forth in Section 4.07(a).

     “Company Certificate” means the certificate of incorporation of the Company.

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     “Company Disclosure Schedules” has the meaning set forth in Article 4.

     “Company Financial Statements” has the meaning set forth in Section 4.07(a).

     “Company Indemnified Parties” has the meaning set forth in Section 7.03(a).

     “Company Intellectual Property” has the meaning set forth in Section 4.12.

     “Company Restricted Stock” has the meaning set forth in Section 3.04.

     “Company Shares” means the issued and outstanding shares of Common Stock.

     “Company Stockholders” means the holders of all issued and outstanding Company Shares
at or prior to the Effective Time.

     “Company Subsidiary Securities” has the meaning set forth in Section 4.06(b).

     “Company Transaction Expenses” has the meaning set forth in Section 11.01.

     “Comparable Benefits” has the meaning set forth in Section 7.02(b).

     “Confidential Information” means any information or compilation of information not
generally known to the public or the industry or which the Company or any of its Subsidiaries has
not disclosed to Third Parties without a written obligation of confidentiality, which information
is proprietary to the Company or any of its Subsidiaries, relating to the Company’s or any of its
Subsidiaries’ procedures, techniques, methods, concepts, ideas, affairs, products, processes and
services, including, but not limited to, information relating to distribution, marketing,
merchandising, selling, research, development, manufacturing, purchasing, accounting, engineering,
financing, costs, pricing and pricing strategies and methods, customers, suppliers, creditors,
employees, contractors, agents, consultants, plans, billing, needs of customers and products and
services used by customers, all lists of suppliers, distributors and customers and their addresses,
prospects, sales calls, products, services, prices and the like as well as any specifications,
formulas, plans, drawings, accounts or sales records, sales brochures, catalogs, code books,
manuals, trade secrets, knowledge, know-how, operating costs, sales margins, methods of operations,
invoices or statements and the like; provided, however, that the term “Confidential
Information” shall not be deemed to include information which (i) becomes generally available to
the public without any fault of Parent or Merger Sub, or (ii) becomes available to Parent or Merger
Sub on a non-confidential basis and without any breach of an agreement of confidentiality from a
source other than the Company or any of its Subsidiaries, or (iii) is disclosed to a Governmental
Body pursuant to Applicable Law, and is publicly available as a result of such disclosure.

     “Confidentiality Agreement” has the meaning set forth in Section 6.04.

     “Contract” means any agreement, lease, license agreement (other than a license granted
by a Governmental Body), contract, consensual obligation, promise, commitment, arrangement,
understanding or undertaking (whether written or oral and whether express or implied) of any type,
nature or description. As used herein, the word “Contract” shall be limited in scope if

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modified by an adjective specifying the type of contract to which this Agreement or a
provision hereof refers.

     “Credit Agreement” means that certain Credit Agreement among the Company, its
Subsidiaries and the lender named therein (the “Lender”).

     “Deductible Amount” has the meaning set forth in Section 10.05.

     “DGCL” means the General Corporation Law of the State of Delaware.

     “Dissenting Shares” has the meaning set forth in Section 3.02(c).

     “Dollars” and the sign “$” mean United States Dollars; any foreign currency
shall be converted into United States Dollars using the prevailing exchange rates in effect as of
the date hereof.

     “Effective Time” has the meaning set forth in Section 2.02.

     “Employee Benefit Plan” means any (x) “employee benefit plan” (as such term is defined
in ERISA Section 3(3)) that is covered by Title I of ERISA and is maintained or sponsored by the
Company or any of its ERISA Affiliates, including all deferred compensation, pension, profit
sharing, retirement, group or individual insurance or welfare benefit plan and (y) each employment,
“change in control”, termination or severance agreement; and each other employee benefit plan,
fund, program, agreement or arrangement, in each case, that is, or was within the past three years,
sponsored, maintained or contributed to or required to be contributed to by the Company or any of
its ERISA Affiliates.

     “Employee Transaction Bonuses” means the bonuses payable at the Closing to the Company
employees as set forth in Schedule 1.01.

     “Encumbrances” means any mortgage, pledge, assessment, security interest, lease, lien,
adverse claim, levy, charge or other encumbrance of any kind.

     “Environment” has the meaning set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

     “Environmental Claim” means administrative, regulatory, or judicial action, suits,
demands, demand letters, claims, notices of non-compliance or violation, investigation or
Proceedings, Orders or agreements, arising under any Environmental Law or any Permit issued under
any Environmental Law, including (i) Environmental Claims by Governmental Bodies for enforcement,
cleanup, removal, response, remedial or other action or damage pursuant to any applicable
Environmental Law, and (ii) Environmental Claims by any Third Party seeking damages or injunctive
relief resulting from Environmental Conditions or arising from alleged injury or threat of injury
to health, safety or the environment.

     “Environmental Condition” means the presence or introduction into the environment of
any Hazardous Materials (and any resulting air, soil, groundwater, or surface water contamination
without regard to the location to which such resulting contamination has migrated

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or spread) as a result of which the Company or any of its Subsidiaries has or may become
liable to any Person or by reason of which the Company or any of its Subsidiaries or any assets of
the Company or any of its Subsidiaries may suffer or be subject to an Environmental Claim.

     “Environmental Laws” means all Applicable Laws and any Order that (i) regulates or
relates to the protection or clean-up of the environment; the use, treatment, generation, storage,
transportation, handling, disposal or release of Hazardous Materials; or the preservation or
protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural
resources; or (ii) imposes liability with respect to any of the foregoing, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq.; or any other Applicable Law of similar effect, each as
amended from time to time.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “ERISA Affiliate” means each entity that is treated as a single employer with the
Company for purposes of Code Section 414.

     “Escrow Agent” has the meaning set forth in Section 3.01(c)(ii).

     “Escrow Agreement” has the meaning set forth in Section 3.01(c)(ii).

     “Escrow Deposit” has the meaning set forth in Section 3.01(c)(ii).

     “Escrow” has the meaning set forth in the Escrow Agreement.

     “Exchange Agent” has the meaning set forth in Section 3.05(a).

     “Exchange Agent Agreement” has the meaning set forth in Section 3.05(a).

     “Financing” has the meaning set forth in Section 5.07.

     “Fully-Diluted Company Shares” is equal to, at the Effective Time (and without
duplication with respect to clauses (i) and (ii)), the sum of: (i) the total number of Company
Shares, plus (ii) the total number of additional shares of Common Stock that would be issued
assuming the exercise, conversion or exchange, as applicable, of all outstanding Options, Warrants,
or other Rights that are “In the Money” at the Effective Time. An Option, Warrant or Right is
“In the Money” if the exercise price per share of Common Stock issuable upon exercise,
conversion or exchange of such Option, Warrant or Right is less than the Per Share Merger
Consideration.

     “GAAP” means United States generally accepted accounting principles as in effect from
time to time, consistently applied.

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     “Governmental Body” means any: (i) nation, state, county, city, town, village,
district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or
other government; (iii) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, board, commission, department, instrumentality, office or other
entity, and any court or other tribunal); (iv) multi-national organization or body; and/or (v)
government entity exercising, or entitled or purporting to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any nature.

     “Group Return” has the meaning set forth in Section 4.10(f).

     “Hazardous Materials” means (i) any petroleum or petroleum products, asbestos in any
form, and polychlorinated biphenyls, and (ii) any chemicals, materials or substances, whether
solid, liquid or gas defined as or included in the definition of “contaminant,” “pollutant,”
“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,”
“restricted hazardous wastes,” “toxic substances,” or “toxic pollutants” under any applicable
Environmental Law.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.

     “Indemnification Control Person” means (i) in the event of a claim by a Stockholder
Indemnified Party, Parent, and (ii) in the event of a claim by a Parent Indemnified Party against
the Escrow Deposit, the Representative.

     “Indemnified Party” means any Person entitled to seek indemnification pursuant to
Article 10.

     “Indemnified Taxes” has the meaning set forth in Section 7.05(a)(ii).

     “Indemnifying Party” means (i) any Person against whom indemnification may be sought
pursuant to Article 10 and (ii) with respect to claims made against the Escrow Deposit, the
Indemnification Control Person.

     “Insurance Policies” has the meaning set forth in Section 4.19.

     “Intellectual Property” means any and all (i) inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto, and all patents,
patent applications and patent disclosures, together with all reissuances, continuations,
continuations in part, revisions, extensions and reexaminations thereof, (ii) trademarks, service
marks, trade dress, logos, trade names, assumed names and corporate names, together with all
translations, adaptations, derivations and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in connection therewith,
(iii) copyrightable works, all copyrights and all applications, registrations and renewals in
connection therewith, (iv) mask works and all applications, registrations and renewals in
connection therewith, (v) trade secrets and confidential business information (including ideas,
research and development, know-how, technology, formulas, compositions, processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), (vi) computer software

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(including data and related software program documentation in computer-readable and hard-copy
forms), (vii) other intellectual property and proprietary rights of any kind, nature or
description, including web sites, web site domain names and other e-commerce assets and resources
of any kind or nature, and (viii) copies of tangible embodiments thereof (in whatever form or
medium).

     “IRS” has the meaning set forth in Section 4.17(c).

     “Knowledge” means (i) with respect to the Company or any of its Subsidiaries, the
actual knowledge of John M. Whiteside, Craig D. Norman and, with respect to Sections 4.13
(Contracts) and 4.16 (Labor Matters) only, the Vice President of Operations, and (ii) with respect
to Parent, the actual knowledge of Arthur Becker and Jim Pluntze and the other “named executive
officers” of Parent (as such term is defined in Item 402(a)(3) of Regulation S-K promulgated under
the Securities Act).

     “Lease” has the meaning set forth in Section 4.11(b).

     “Leased Real Property” has the meaning set forth in Section 4.11(b).

     “Lender Debt” shall mean all indebtedness for borrowed money owed by the Company and
its Subsidiaries pursuant to the Credit Agreement.

     “Lender” has the meaning set forth in the definition of the Credit Agreement in
Section 1.01.

     “Loss” or “Losses” has the meaning set forth in Section 10.01.

     “Material Adverse Effect” means, with respect to any Person, any change or event or
effect that is materially adverse to the business or financial condition of such Person and its
Subsidiaries taken as a whole, excluding, in each case, any change, event or effect arising out of
or resulting from (i) changes, events or developments in or affecting the Company’s industry in
the United States or internationally, including changes in the use, adoption or non-adoption of
technologies or industry standards (other than any such change, event or development that is
disproportionately adverse to the Company relative to the effect of such conditions on other
Persons operating in the managed applications services industry), (ii) changes, events or
developments in financial, foreign exchange or securities markets or the economy in general in the
U.S. or internationally including any disruption thereof (other than any such change, event or
development that is disproportionately adverse to the Company relative to the effect of such
conditions on other Persons operating in the managed applications services industry), (iii) any
change, event or development brought about through acts of war or terrorism, insurrection,
escalation of hostilities, natural disasters, acts of God or similar calamity or crisis (other than
any such change, event or development that is disproportionately adverse to the Company relative to
the effect of such conditions on other Persons affected by such conditions), (iv) the announcement,
execution or delivery of this Agreement or the Ancillary Documents or the consummation of the
Transactions, (v) such Person’s performance of its obligations hereunder, (vi) any change, event,
or development relating to any action taken (or any failure to take any action) by any other Party
hereto, (vii) any matter set forth in any of the Company Disclosure Schedules or (viii) any change,
event or development that has been cured prior to the Closing.

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     “Material Contracts” has the meaning set forth in Section 4.13(a).

     “Material IP Agreements” has the meaning set forth in Section 4.12.

     “Merger” has the meaning set forth in the Recitals.

     “Merger Consideration” has the meaning set forth in Section 3.01(a).

     “Merger Sub” has the meaning set forth in the introductory paragraph above.

     “Option” has the meaning set forth in Section 3.03(a).

     “Option/Warrant Closing Cash Out Payment” means an amount in cash equal to the value
of (x) the Stock Portion of the Merger Consideration, less the Escrow Deposit, divided by
(y) the number of Fully-Diluted Company Shares.

     “Option Holders” means each holder of certificates, agreements or other instruments
evidencing Options.

     “Option Payment” has the meaning set forth in Section 3.03(a).

     “Option Plan” has the meaning set forth in Section 3.03(a).

     “Order” means any judgment, award, decision, consent decree, injunction, ruling, writ,
charge or other restriction of a Governmental Body that is binding on any Person or its property
under Applicable Law.

     “Ordinary Course of Business” means the ordinary course of business consistent with
past custom and practice (including with respect to quantity and frequency).

     “Parent” has the meaning set forth in the introductory paragraph above.

     “Parent Common Stock” means the common stock, par value $0.01 per share, of Parent.

     “Parent Credit Agreement” has the meaning set forth in Section 5.07.

     “Parent Disclosure Schedules” has the meaning set forth in Article 5.

     “Parent Indemnified Parties” has the meaning set forth in Section 10.01.

     “Parent Lender” has the meaning set forth in Section 5.07.

     “Parent Plans” has the meaning set forth in Section 7.02(c).

     “Parent Preferred Stock” means the preferred stock, par value $0.01 per share, of
Parent.

     “Parent Return” has the meaning set forth in Section 7.05(a)(i).

     “Party” or “Parties” has the meaning set forth in the introductory paragraph
above.

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     “Payoff Amount” has the meaning set forth in Section 3.01(c)(i).

     “Per Share Merger Consideration” has the meaning set forth in Section 3.02(a).

     “Permit” or “Permits” means any and all permits, licenses, filings,
authorizations, registrations, qualifications, consents, approvals, or indicia of authority (and
any pending applications for approval or renewal of a Permit) issued by any Governmental Body that
are required by, or issued to or on behalf of, a Person, in order for the Company or such Person to
own, construct, operate, sell, inventory, disburse or maintain any of their assets or conduct all
or any portion of their business.

     “Permitted Encumbrances” means (a) Taxes, assessments and other governmental levies,
fees or charges that are (i) not due and payable as of the Closing Date, or (ii) being contested by
appropriate Proceedings, (b) statutory Encumbrances, mechanics liens and similar liens for labor,
materials or supplies , in each case incurred in the Ordinary Course of Business for amounts that
are (i) not delinquent and are not, in the aggregate, material, or (ii) being contested by
appropriate Proceedings, (c) Encumbrances that are a matter of public record, (d) present or future
zoning, building codes, and other land use Applicable Law regulating the use or occupancy of Real
Property or the activities conducted thereon that are imposed by any Governmental Body having
jurisdiction over such Real Property, (e) Encumbrances for any financing that is an obligation of
the Company or any of its Subsidiaries, that will be paid off at Closing, (f) purchase money liens
and liens securing rental payments under capital lease arrangements, (g) restrictions on the
transferability of securities arising under Applicable Laws, (h) easements, rights of way,
covenants, conditions, restrictions and other similar matters and other title defects and
Encumbrances, none of which materially impair the use or occupancy of Real Property or the
operation of the business of the Company and its Subsidiaries, taken as a whole.

     “Person” means an individual, a partnership, a limited partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity or a Governmental Body.

     “Personal Property” has the meaning set forth in Section 4.11(c).

     “Pre-Closing Tax Statement” has the meaning set forth in Section 7.05(a)(ii).

     “Pre-Closing Taxes” has the meaning set forth in Section 7.05(b).

     “Pro Rata Share” means, with respect to each share of Common Stock, (x) the amount of
distribution or proceeds from the Escrow divided by (y) the number of issued and outstanding shares
of Common Stock as of the Effective Time.

     “Proceeding(s)” means any suit, litigation, arbitration, hearing, audit, investigation
or other action (whether civil, criminal, administrative or investigative) commenced, brought,
conducted, or heard by or before, any Governmental Body or arbitrator.

     “Real Property” means land, together with all buildings, structures, improvements, and
fixtures located thereon, and easements and other rights and interests appurtenant thereto.

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     “Representative” has the meaning set forth in the introductory paragraph above.

     “Requisite Stockholder Approval” has the meaning set forth in Section 4.02.

     “Rights” means any and all outstanding subscriptions, warrants, options, or other
arrangements or commitments obligating or which may obligate (with or without notice or passage of
time or both) a company to issue or dispose of any securities of a company including, without
limitation, convertible securities and debt securities.

     “Statement of Closing Cash” has the meaning set forth in Section 3.01(b).

     “Stock Portion of the Merger Consideration” has the meaning set forth in Section
3.01(a).

     “Stock Portion of the Per Share Closing Merger Consideration” shall be a number of
shares of Parent Series A Preferred Stock equal to (x) the Stock Portion of the Merger
Consideration, less the Escrow Deposit, divided by (y) the number of issued and outstanding
shares of Common Stock as of the Effective Time.

     “Stockholder Indemnified Parties” has the meaning set forth in Section 10.02.

     “Subsidiary” means, with respect to any Person, (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more other Subsidiaries of
that Person or a combination thereof, or (ii) if a limited liability company, partnership,
association, or other business entity (other than a corporation), a majority of partnership or
other similar ownership interest thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and
for this purpose a Person owns a majority ownership interest in such a business entity (other than
a corporation) if such Person shall be allocated a majority of such business entity’s gains or
losses or shall be or shall control any managing director or general partner of such business
entity (other than a corporation). The term “Subsidiary” shall include all Subsidiaries of such
Subsidiary.

     “Superior Proposal” has the meaning set forth in Section 6.06(f).

     “Surviving Corporation” has the meaning set forth in Section 2.01 and shall also mean
with respect to any period after the LLC Merger, the Successor LLC.

     “Successor LLC” has the meaning set forth in the Recitals.

     “Tax” or “Taxes” means all federal, state, local, foreign or other tax of any
kind whatsoever, including without limitation, all income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal property, unclaimed
property, escheat, sales, use, transfer, registration, alternative or add-on minimum, or estimated
tax, and including any interest, penalty, or addition thereto, whether disputed or not.

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     “Tax Arbitrator” has the meaning set forth in Section 7.05(a)(iii).

     “Tax Return” means any return, declaration, report, claim for refund, or information
return or statement with respect to any Tax required to be filed or actually filed with a Taxing
Authority, including any schedule or attachment thereto, and including any amendment thereof.

     “Tax Statement Dispute” has the meaning set forth in Section 7.05(a)(iii).

     “Taxing Authority” means the domestic or foreign Governmental Body responsible for the
administration of any Tax.

     “Third Party” or “Third Parties” shall mean any Person that is not a Party to
this Agreement, other than the Company Stockholders or any of their Affiliates or other related
parties.

     “Third Party Claim” has the meaning set forth in Section 10.03(a).

     “Third Party Interests” has the meaning set forth in Section 4.06(c).

     “Threatened” means as follows: a claim, Proceeding, dispute, action, or other matter
will be deemed to have been “Threatened” if any demand or statement has been made in
writing, or any notice has been given in writing that would lead a reasonably prudent Person to
conclude that such a claim, Proceeding, dispute, action, or other matter will, with substantial
certainty, be asserted, commenced, taken or otherwise pursued in the future; provided,
however, that the foregoing shall not include customer billing, service or warranty
disputes in the Ordinary Course of Business.

     “Transaction Expense” has the meaning set forth in Section 11.01.

     “Transactions” means the Merger and any other transactions contemplated by or pursuant
to this Agreement and the Ancillary Documents.

     “Warrant Holders” has the meaning set forth in Section 3.05(b).

     “Warrant Payment” has the meaning set forth in Section 3.03(b).

     “Warrants” has the meaning set forth in Section 3.03(b).

     “Withholdings” means the amount reasonably determined jointly by Parent and the
Company in good faith to be withheld from the Merger Consideration as required by Applicable Law
(arising from, without limitation, withholding obligations of the Company and its Subsidiaries
arising from the cancellation and settlement of any Options or Warrants), which amount(s) shall be
timely remitted to the appropriate Governmental Body by or on behalf of the Surviving Corporation
at or after the Closing.

     “Written Consents” has the meaning set forth in Section 6.05.

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ARTICLE 2

THE MERGER

     Section 2.01 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub shall be merged
with and into the Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease, and the Company shall continue as the surviving corporation and as a wholly-owned
subsidiary of Parent immediately following the Merger (the “Surviving Corporation”).

     Section 2.02 Closing and Effective Time. Unless this Agreement is earlier terminated
pursuant to the provisions of Section 9.01 hereof, the closing of the Merger (the
“Closing”) shall take place at the offices of Morrison & Foerster LLP, 1650 Tysons
Boulevard, Suite 400, McLean, Virginia 22102, at 10:00 a.m. (Eastern time) no later than two (2)
Business Days after the satisfaction or, if permissible, waiver of all of the conditions set forth
in Article 8 (other than those conditions that by their nature are to be fulfilled at the Closing,
but subject to the fulfillment of such conditions), or at such later time as the Parties may agree.
The date upon which the Closing actually occurs is herein referred to as the “Closing
Date.” Subject to the provisions of this Agreement, on the Closing Date, the Parties shall
cause the Merger to be consummated by filing a certificate of merger (the “Certificate of
Merger”) with the Secretary of State of the State of Delaware, in such form as required by, and
executed in accordance with, the relevant provisions of the DGCL (the date and time of acceptance
by the Secretary of State of Delaware of such filing, or, if another date and time is specified in
such filing, such specified date and time, being the “Effective Time”).

     Section 2.03 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all
the property, assets, rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities, duties and obligations of the
Company and Merger Sub shall become the debts, liabilities, duties and obligations of the Surviving
Corporation.

     Section 2.04 Certificate of Incorporation; Bylaws.

          (a) At the Effective Time, the Company shall amend the Company Certificate so as to be in the
form attached hereto as Exhibit A and, as so amended, such certificate of incorporation
shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as
provided therein or by the DGCL.

          (b) At the Effective Time, the Company shall amend the Company’s bylaws so as to be in the
form attached hereto as Exhibit B and, as so amended, such bylaws shall be the bylaws of
the Surviving Corporation until thereafter amended as provided therein, in the Surviving
Corporation’s certificate of incorporation or by the DGCL.

     Section 2.05 Directors and Officers. The directors of the Company immediately prior
to the Effective Time shall submit their resignations, which shall be effective as of the Effective

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Time. The directors of Merger Sub immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation. The officers of Merger Sub immediately
prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to
hold office in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation.

     Section 2.06 The LLC Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL, following the Effective Time, the Surviving
Corporation shall be merged with and into the Successor LLC. As a result of the LLC Merger, the
separate corporate existence of the Surviving Corporation shall cease, and the Successor LLC shall
continue as the surviving entity in the LLC Merger and as a wholly-owned subsidiary of Parent
immediately following the LLC Merger.

     Section 2.07 Second Effective Time. Subject to the provisions of this Agreement,
reasonably promptly after the Closing Date, the Parties shall cause the LLC Merger to be
consummated by filing a certificate of merger (the “Certificate of LLC Merger”) with the
Secretary of State of the State of Delaware, in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL (the date and time of acceptance by the
Secretary of State of the State of Delaware of such filing, or, if another date and time is
specified in such filing, such specified date and time, being the “Second Effective Time”).

     Section 2.08 Effect of the LLC Merger. At the Second Effective Time, the effect of
the LLC Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Second Effective Time, except as otherwise
provided herein, all the property, assets, rights, privileges, powers and franchises of the
Surviving Corporation and the Successor LLC shall vest in the Successor LLC, and all debts,
liabilities, duties and obligations of the Surviving Corporation and Successor LLC shall become the
debts, liabilities, duties and obligations of the Successor LLC.

     Section 2.09 Certificate of Formation. At the Second Effective Time, the Successor
LLC shall amend the Company Certificate so as to be in an appropriate form reasonably agreed to by
Parent and the Representative, and as so amended, such certificate of formation shall be the
certificate of formation of the Successor LLC until thereafter amended as provided therein or by
the DGCL.

     Section 2.10 Effect of LLC Merger on Stock of Surviving Corporation. At the Second Effective
Time, by virtue of the LLC Merger and without any further action on the part of the Surviving
Corporation, Parent, the Successor LLC, or any stockholder of Parent, each share of the stock of
the Surviving Corporation issued and outstanding immediately prior to the Second Effective Time,
shall be converted into membership interests in the Successor LLC. No
stock of the Surviving Corporation shall be deemed to be outstanding or to have any rights
other than those set forth in this Section 2.10 after the LLC Effective Time.

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ARTICLE 3

MERGER CONSIDERATION; CONVERSION OF SECURITIES;

EXCHANGE OF CERTIFICATES

     Section 3.01 Calculation and Payment of the Merger Consideration.

          (a) Calculation of Merger Consideration. The aggregate amount to be paid with respect
to the Fully-Diluted Company Shares (the “Merger Consideration”) shall consist of: (A) the
payment or delivery by Parent and Merger Sub of (i) Three Million One Hundred Twenty Five Thousand
Shares (3,125,000) shares of Parent Series A Preferred Stock (the “Stock Portion of the Merger
Consideration”) and Fifteen Million Dollars ($15,000,000) in cash (the “Cash Portion of the
Merger Consideration”), subject to adjustment as set forth in Section 3.01(b) below,
plus (ii) the Aggregate Exercise Price, minus (iii) the amount by which the unpaid
Company Transaction Expenses as of the Closing Date exceed Five Hundred Thousand Dollars
($500,000), minus (iv) the Payoff Amount and (B) the payment of the Closing Cash by the
Company to the Exchange Agent pursuant to Section 3.01(b). Remittance and delivery of the Merger
Consideration by Parent and Merger Sub shall be made by Parent or Merger Sub in accordance with the
provisions of Section 3.01(c). The maximum aggregate Merger Consideration payable by Parent and
Merger Sub to the Company Stockholders, Option Holders and Warrant Holders in the Merger pursuant
to this Agreement shall be Forty Million Five Hundred Thousand Dollars ($40,500,000), subject to
adjustment as set forth in Section 3.01(b). The parties agree that the Stock Portion of the Merger
Consideration is valued at $25,000,000.

          (b) Closing Cash Adjustment. On the Closing Date, the Company shall deliver to Parent
and Merger Sub a statement setting forth the amount of the Company’s immediately available cash
(minus the amount of cash required to satisfy outstanding checks) as of the Closing Date (the
“Statement of Closing Cash”) determined in accordance with the principles, policies,
estimates and procedures set forth on Schedule 3.01 of the Company Disclosure Schedules (the
“Closing Cash”). At the Closing, the Company shall remit the Closing Cash by wire transfer
of immediately available funds to the Exchange Agent. To the extent that the Closing Cash is
greater than Five Million Dollars ($5,000,000), the Cash Portion of the Merger Consideration shall
be decreased by such amount. To the extent that the Closing Cash is less than Five Million Dollars
($5,000,000), the Cash Portion of the Merger Consideration shall be increased by such amount.

          (c) Payment of Merger Consideration and the Payoff Amount. At the Closing, Parent
shall remit the Merger Consideration and the Payoff Amount by wire transfer of immediately
available funds as follows:

               (i) Parent shall remit an amount by wire transfer of immediately available funds as directed
in writing by the Lender necessary to repay the Lender Debt and all interest accrued thereunder up
to and including the Closing Date (the “Payoff Amount”);

               (ii) On the Closing Date, the Representative, Parent and Branch Banking and Trust Company (the
“Escrow Agent”) shall enter into an Escrow Agreement in the form attached hereto as
Exhibit C (the “Escrow Agreement”). Parent shall withhold Three Hundred
Ninety-Three Thousand Seven Hundred Fifty (393,750) shares of Parent Series A

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Preferred Stock out
of the Stock Portion of the Merger Consideration (the “Escrow Deposit”) and deposit such
shares into escrow at the Closing pursuant to the terms of the Escrow Agreement. The Escrow
Agreement shall provide that any shares held by the Escrow Agent shall be released by the Escrow
Agent to the Company Stockholders pursuant to the terms of the Escrow Agreement, less any pending
or paid indemnification claims asserted pursuant to Article 10 on or prior to such date, on the
nine (9) month anniversary of the Closing Date; and

               (iii) The Merger Consideration, less the Escrow Deposit, shall be referred to herein as the
“Closing Merger Consideration.” Parent shall remit the Closing Merger Consideration, less
the Closing Cash and the aggregate Option Payments to be paid at Closing, to the Exchange Agent at
the Closing (as described in Section 3.05).

     Section 3.02 Effect on Capital Stock. At the Effective Time, by virtue of the Merger
and without any further action on the part of the Company, Parent, Merger Sub or any Company
Stockholder or any stockholder of Parent:

          (a) Conversion of Common Stock. Each share of the Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of Common Stock cancelled pursuant to
Section 3.02(b) and Dissenting Shares whose appraisal rights are being exercised pursuant to
Section 3.02(c)), shall be converted into the right to receive, upon surrender of a Certificate
formerly representing such share in the manner provided in Section 3.05, (i) an amount in cash
equal to the Cash Portion of the Per Share Closing Merger Consideration, plus (ii) a number of
shares of Parent Series A Preferred Stock equal to the Stock Portion of the Per Share Closing
Merger Consideration, plus (iii) a right to receive a Pro Rata Share of any proceeds or
distributions from the Escrow (collectively, the “Per Share Merger Consideration”). The
Cash Portion of the Per Share Closing Merger Consideration payable with respect to each share of
the Common Stock hereunder shall be reduced by (x) the aggregate amount of the Option/Warrant
Closing Cash Out Payment, the Option Escrow Cash Out Payments and the Warrant Escrow Cash Out
Payments divided by (y) the number of issued and outstanding shares of Common Stock immediately
prior to the Effective Time. No Common Stock shall be deemed to be outstanding or to have any
rights other than those set forth in this Section 3.02 after the Effective Time.

          (b) Cancellation of Treasury Stock. Each share of Common Stock held in treasury by
the Company and each share of Common Stock owned or held, directly or indirectly, by the Company or
its Subsidiaries, or Parent, Merger Sub or their respective Subsidiaries, in each case, immediately
prior to the Effective Time, shall be automatically cancelled without any conversion thereof and
shall cease to exist and no payment of cash or any other distribution shall be made with respect
thereto.

          (c) Appraisal Rights. Notwithstanding anything to the contrary herein, shares of
Common Stock issued and outstanding immediately prior to the Effective Time and held by a
Common Stockholder who is entitled to and has properly exercised and perfected appraisal
rights pursuant to Section 262 of the DGCL (collectively, the “Dissenting Shares”) shall
not be converted as of the Effective Time into the right to receive the Per Share Merger
Consideration, but instead shall have such rights as may be available under the DGCL. At the
Effective Time, all Dissenting Shares shall no longer be outstanding and shall be cancelled and
each holder of

15

 

Dissenting Shares shall cease to have any rights with respect thereto, except the
right to receive the fair value of such Dissenting Shares in accordance with Section 262 of the
DGCL; provided, however, that if any such Common Stockholder shall have failed to
perfect or shall effectively withdraw or lose its right to appraisal and payment under the DGCL, or
a court of competent jurisdiction shall determine that such holder is not entitled to the relief
provided by Section 262, such stockholder’s shares of Common Stock shall thereupon be deemed to
have been converted as of the Effective Time into the right to receive the Per Share Merger
Consideration and such shares of Common Stock shall no longer be Dissenting Shares. The Company
shall give Parent prompt notice of all written demands received by the Company for appraisal rights
and Parent shall have the right to participate in all negotiations and proceedings with respect to
such demand. The Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.

          (d) Conversion of Merger Sub Common Stock. Each issued and outstanding share of
common stock, $0.01 par value, of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into and become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.

     Section 3.03 Options and Warrants.

          (a) Options. Prior to the Effective Time, the Board of Directors of the Company (or,
if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other
actions necessary to (i) provide for the cancellation of all outstanding, unexercised and unexpired
stock option or similar Rights to purchase Common Stock (each, an “Option”) granted under
the Company’s Third Amended and Restated 1999 netASPx, Inc. Stock Incentive Plan (the “Option
Plan”), effective at the Effective Time, without any payment therefor except as otherwise
provided in this Section 3.03(a) and (ii) terminate the Option Plan as of the Effective Time. Each
In the Money Option, to the extent unexercised as of the Effective Time, shall thereafter no longer
be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to
an amount (the “Option Payment”) equal to (1) a payment in cash equal to (x) the amount of
the excess (if any) of (A) the Cash Portion of the Per Share Closing Merger Consideration and the
Option/Warrant Closing Cash Out Payment over (B) the exercise price per share of Common Stock
subject to such Option, multiplied by (y) the total number of shares of Common Stock subject to
such Option immediately prior to its cancellation (such payment to be net of Withholdings, if any,
and without interest), payable at the same time, in the same manner, and subject to the same
conditions under which the Common Stockholders receive the Cash Portion of the Per Share Closing
Merger Consideration plus (2) a payment in cash (the “Option Escrow Cash Out Payment”)
equal to the total number of shares of Common Stock subject to such Option immediately prior to its
cancellation multiplied by the value of the Escrow Deposit divided by the Fully-Diluted Share
Number. At the Closing, the Parent shall deliver to the Company the aggregate Option Payments and
the Company shall pay, or arrange for the
Company’s payroll processor to pay, to each Option Holder, subject to any applicable
Withholdings, the Option Payment due under this Section 3.03(a) with respect to such Option. No
diminution in the Closing Cash as a result of making the Option Payments on behalf of Parent shall
be reflected in the Merger Consideration. For purposes of this Section 3.03(a), the

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value of each
share of Parent Series A Preferred Stock shall be deemed to be Eight Dollars ($8.00).

          (b) Warrants. Prior to the Effective Time, the Board of Directors of the Company (or,
if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other
actions necessary to provide for the cancellation, effective at the Effective Time, of all
outstanding warrants to purchase Common Stock (the “Warrants”), without any payment
therefor except as otherwise provided in this Section 3.03(b). Each In the Money Warrant, to the
extent unexercised as of the Effective Time, shall thereafter no longer be exercisable but shall
entitle each Warrant Holder, in cancellation and settlement therefor, to an amount (the
“Warrant Payment”) equal to (i) a payment in cash equal to (x)(A) the Cash Portion of the
Per Share Closing Merger Consideration and the Option/Warrant Closing Cash Out Payment minus (B)
the exercise price per share of Common Stock subject to such Warrant, multiplied by (y) the total
number of shares of Common Stock as to which that Warrant remains unexercised immediately prior to
its cancellation (such payment to be net of Withholdings, if any, and without interest), payable at
the same time, in the same manner, and subject to the same conditions under which the Common
Stockholders receive the Cash Portion of the Per Share Closing Merger Consideration plus (ii) a
payment in cash (the “Warrant Escrow Cash Out Payment”) equal to the total number of shares
of Common Stock subject to such Warrant immediately prior to its cancellation multiplied by the
value of the Escrow Deposit divided by the Fully-Diluted Share Number. Upon surrender of a
Certificate evidencing an In the Money Warrant by the Warrant Holder to the Exchange Agent,
pursuant to Section 3.05, the Exchange Agent shall pay to such Warrant Holder, subject to any
applicable Withholdings, the Warrant Payment due under this Section 3.03(b) with respect to such
Warrant. For purposes of this Section 3.03(b), the value of each share of Parent Series A
Preferred Stock shall be deemed to be Eight Dollars ($8.00).

     Section 3.04 Restricted Stock. If any share of Company Common Stock outstanding
immediately prior to the Effective Time is unvested or subject to a repurchase option or forfeiture
in favor of the Company (any such shares, “Company Restricted Stock”), then, effective
immediately prior to the Effective Time, such Company Restricted Stock shall be fully vested and
any repurchase option or forfeiture restriction shall lapse.

     Section 3.05 Payment of Merger Consideration.

          (a) Pursuant to an Exchange Agent Agreement in the form attached hereto as Exhibit D
(the “Exchange Agent Agreement”) to be entered into prior to the Closing between
Representative, Parent and Branch Banking and Trust Company (the “Exchange Agent”), at the
Closing, and subject to the terms and conditions set forth in this Agreement, Parent shall remit to
the Exchange Agent the amount of cash equal to the Cash Portion of the Merger Consideration and the
number of shares of Parent Series A Preferred Stock constituting the Stock Portion of the Merger
Consideration less the Escrow Deposit. All payments for shares of Common Stock, Options and the
Warrants which are made in accordance with the terms hereof shall be deemed
to have been made in full satisfaction of all rights pertaining to such Common Stock, Options
and Warrants, as the case may be.

          (b) Promptly after entering into the Exchange Agent Agreement and before the Effective Time,
the Company shall send or cause the Exchange Agent to send a notice and a

17

 

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

          (c) If any portion of the Per Share Merger Consideration or Warrant Payment is to be paid to a
Person other than the Person in whose name the surrendered Certificate is registered, it shall be a
condition to such payment that (i) such Certificate shall be properly endorsed and (ii) the Person
requesting such payment shall pay to the Exchange Agent any transfer or other Taxes required as a
result of such payment to a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is
not payable.

          (d) Notwithstanding the other provisions of this Section 3.05, any Company Stockholder that
shall have surrendered its Certificates together with a duly executed Letter of
Transmittal and any other required documents of transfer to Parent at least one (1) day prior
to the Closing shall be entitled to receive at the Closing the applicable consideration directly
from Parent and/or the Company.

18

 

          (e) To the extent any Company Stockholder is indebted to the Company for borrowed money as of
the Closing, such amount shall be described on the Letter of Transmittal with respect to such
Company Stockholder and, if Parent and the Representative shall have received evidence reasonably
satisfactory to each of them that the Merger Consideration payable to such Company Stockholder has
been offset by such amount, then Parent and the Representative shall promptly deliver joint written
instructions to the Exchange Agent instructing the Exchange Agent to deliver such amount to the
Surviving Corporation from the exchange fund established by the Exchange Agent Agreement.

     Section 3.06 No Liability. None of Parent, Merger Sub, the Representative or the
Surviving Corporation shall be liable to any Company Stockholder in respect of any Per Share Merger
Consideration, Option Payment or Warrant Payment delivered to a public official as required by and
pursuant to any applicable abandoned property, escheat or similar Applicable Law.

     Section 3.07 Lost, Stolen and Destroyed Certificates. If any Certificate is lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed, the Surviving Corporation shall issue in exchange for
such lost, stolen or destroyed Certificate, the Per Share Merger Consideration, Option Payment or
Warrant Payment, as may be the case, deliverable in respect thereof pursuant to this Agreement.

     Section 3.08 Return of Merger Consideration. If, one (1) year after the Effective
Time, there remains any Certificate, Option or Warrant which has not been surrendered or exercised
for payment of the applicable Per Share Merger Consideration, Option Payment, or Warrant Payment,
as may be the case, the Exchange Agent shall mail notices to the holder thereof at the address set
forth in the records of the Company notifying such holder of the right to receive the Per Share
Merger Consideration, Option Payment or Warrant Payment, as may be the case. To the extent that
any holder has not tendered his, her or its Certificate, Option or Warrant within ninety (90) days
after the mailing of such notice, the Exchange Agent shall return, to the extent permitted by
Applicable Law, to Parent any funds held by it for the benefit of such holder and deliver to Parent
any Certificates or other documents received by it from any holder after such time. Upon receipt,
Parent shall hold the remaining funds for the benefit of such holders and shall deliver to any such
holder who has properly surrendered or exercised Certificates, Options or Warrants, the Per Share
Merger Consideration, Option Payment, or Warrant Payment, as may be the case, to which such holder
is entitled pursuant to this Agreement with respect to the Certificates, Options or Warrants
surrendered or exercised by such holder.

     Section 3.09 The Representative.

          (a) Appointment of the Representative. By virtue of the adoption of this Agreement
and approval of the Merger and the Transactions by the Common Stockholders, each Company
Stockholder (regardless of whether or not such Company Stockholder votes in favor of the adoption
of the Agreement and the approval of the Merger and the Transactions, whether at a meeting or by
written consent in lieu thereof) shall be deemed to have appointed, effective from and after the
approval of the Merger, Representative to act as his, her or its representative and true and lawful
attorney-in-fact, with full power of substitution, in such holder’s name and on such holder’s
behalf, under this Agreement in the absolute discretion of the Representative in

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accordance with
the terms of this Section 3.09, the Registration Rights Agreement and the Escrow Agreement. This
power of attorney and all authority hereby conferred is irrevocable and shall not be terminated by
any act of any such holder, by operation of law, by such holder’s death or disability or by any
other event, except as expressly set forth herein. The Representative may be replaced upon the
affirmative vote of the holders of a majority of the Common Stock as of the Closing. Any Person or
entity appointed to replace a former Representative shall execute a statement agreeing to perform
the duties set forth in this Agreement. The appointment of a replacement Representative shall
become effective upon delivery of such statement to Parent and the Surviving Corporation.

          (b) Authority After the Effective Time. From and after the Effective Time, the
Representative shall be authorized to: (i) take all actions required by, and exercise all rights
granted to, the Representative in this Agreement, the Registration Rights Agreement and the Escrow
Agreement; (ii) receive all notices or other documents given or to be given to the Representative
by Parent pursuant to this Agreement, the Registration Rights Agreement and the Escrow Agreement;
(iii) negotiate, undertake, compromise, defend, resolve and settle any suit, proceeding or dispute
under this Agreement, the Registration Rights Agreement and the Escrow Agreement; (iv) execute and
deliver all agreements, certificates and documents required by the Representative in connection
with any of the Merger and the Transactions; (v) engage special counsel, accountants and other
advisors and incur such other expenses in connection with any of the Transactions; and (vi) take
such other action as is necessary on behalf of the Company Stockholders in connection with this
Agreement, the Registration Rights Agreement and the Escrow Agreement and the Merger and the
Transactions, including, without limitation, all such other matters as the Representative may deem
necessary or appropriate to carry out the intents and purposes of this Agreement and the Ancillary
Documents.

          (c) Expenses. The Representative shall be entitled to receive advances or
reimbursement for any and all reasonable expenses, charges, liabilities and debts, including
reasonable attorneys’ fees, incurred by the Representative in the performance or discharge of its
rights and obligations under this Agreement but only in connection with a Third Party Claim. The
Representative shall be entitled to collect such advances or reimbursement from the Escrow (up to
$250,000) in shares of Parent Series A Preferred Stock (or Parent Common Stock issued upon
conversion of Parent Series A Preferred Stock) pursuant hereto and pursuant to the Escrow
Agreement. For purposes of the foregoing, the value of each share of Parent Series A Preferred
Stock as of any particular time shall be deemed to be the “Redemption Price” of such share as such
term is defined in the Certificate of Designations and the value of each share of Parent
Common Stock issued upon conversion of Parent Series A Preferred Stock shall be deemed to be
Eight Dollars ($8.00), plus any accrued but unpaid dividends (as appropriately adjusted to reflect
fully the effect of any stock split, reverse stock split, stock dividend (including any dividend or
general distribution of securities convertible into or exchangeable or exercisable for any capital
stock of Parent), reclassification, reorganization, recapitalization or other like change occurring
after the date hereof).

          (d) Release from Liability; Indemnification; Authority of Representative. By virtue
of the adoption of this Agreement and the approval of the Merger and the Transactions by the Common
Stockholders, each Company Stockholder shall be deemed to have (i) released the Representative
from, and agreed to indemnify the Representative against, liability for any action

20

 

taken or not
taken by the Representative in its capacity as such Representative, except for the liability of the
Representative to a Company Stockholder for loss which such holder may suffer from fraud committed
by the Representative in carrying out its duties hereunder, and (ii) appointed, as of such
approval, the Representative as such Company Stockholder’s true and lawful agent and
attorney-in-fact to enter into any agreement in connection with the Merger and the Transactions, to
exercise all or any of the powers, authority and discretion conferred on such Company Stockholder
under any such agreement, to give and receive notices on such Company Stockholder’s behalf and to
be such Company Stockholder’s exclusive representative with respect to any matter, suit, claim,
action or proceeding arising with respect to any transaction contemplated by such agreement,
including, without limitation, the defense, settlement or compromise of any claim, action or
Proceeding for which Parent or the Surviving Corporation may be entitled to indemnification. All
actions, decisions and instructions of the Representative shall be conclusive and binding upon all
of the Company Stockholders.

          (e) Acceptance. By executing this Agreement, the Representative agrees to act as, and
to undertake the duties and responsibilities of, the Representative as set forth in this Agreement.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in the disclosure schedules delivered by the Company to Parent on the date
hereof, which shall be arranged in sections and subsections corresponding to the numbered and
lettered sections and subsections contained in this Article 4 (the “Company Disclosure
Schedules”), the Company represents and warrants as of the date hereof to Parent and Merger Sub
as follows:

     Section 4.01 Corporate Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State of Delaware. The
Company is duly qualified to do business as a foreign corporation and is in good standing in each
other jurisdiction where the transaction of its business requires such qualification, except where
the lack of such qualification would not have, individually or in the aggregate, a Material Adverse
Effect on the Company. The Company has heretofore made available to Parent true and complete
copies of the Company Certificate and bylaws of the Company as currently in effect.

     Section 4.02 Corporate Authorization. The execution, delivery and performance by the
Company of this Agreement and any Ancillary Document to which the Company is a party and the
consummation by the Company of the Merger and the Transactions are within the Company’s corporate
powers and, except for the approval of the Merger (x) by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock in accordance with the terms of the DGCL, the
Company Certificate and the bylaws of the Company and (y) by netASPx Holdings, Inc. in accordance
with the terms of the Purchase Agreement, dated May 6, 1999, as amended, by and among the Company
and certain stockholders of the Company named therein (collectively, the “Requisite Stockholder
Approval”), have been duly authorized by all necessary corporate action on the part of the
Company. The Requisite Stockholder Approval is the only vote of the holders of any of the
Company’s capital stock necessary in connection with the consummation of the Merger and the
Transactions. This Agreement constitutes a valid and

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legally binding agreement of the Company,
enforceable in accordance with its terms and conditions, subject to Applicable Laws of general
application relating to public policy, bankruptcy, insolvency and the relief of debtors and
Applicable Laws governing specific performance, injunctive relief and other equitable remedies.

     Section 4.03 Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of 60,000,000 shares of Common Stock, of which there were 47,818,220 shares of
Common Stock issued and outstanding. All outstanding shares of Common Stock of the Company are
duly authorized, validly issued, fully paid and nonassessable. The Company does not have any
outstanding bonds, debentures, notes or other obligations, the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the right to vote) with
the Company Stockholders on any matter, and except as set forth on Schedule 4.03 of the Company
Disclosure Schedules, there are no options, warrants, or other rights (including preemptive rights)
or agreements, arrangements, or commitments of any character, whether or not contingent, relating
to issued or unissued Common Stock or obligating the Company to issue, redeem, repurchase or
otherwise acquire any share of Common Stock, or other equity interest in, the Company. Schedule
4.03 of the Company Disclosure Schedules sets forth, as of the date hereof, each of the Company
Stockholders and the number of shares of Common Stock owned by, and the number of shares of Common
Stock subject to Options and Warrants owned by, such Company Stockholder and the exercise price per
share of any such Options or Warrants. No Subsidiary of the Company owns any shares of Common
Stock of the Company. The per share exercise price of each Option was equal to or greater than the
fair market value of one share of Common Stock on the grant date of such Option.

     Section 4.04 Governmental Authorization. The execution, delivery and performance by
the Company of this Agreement and any Ancillary Document to which the Company is party and the
consummation by the Company of the Merger and the Transactions require no action by or in respect
of, or filing with, any Governmental Body, other than (i) the filing of the Certificate of Merger
with the Delaware Secretary of State pursuant to the DGCL, (ii) compliance with any applicable
requirements of the HSR Act, (iii) compliance with any applicable requirements of any applicable
securities laws, whether federal, state or foreign and, (iv) any actions or filings the absence of
which would not have, individually or in the aggregate, a Material Adverse Effect on
the Company or materially impair the ability of the Company to consummate the Merger and the
Transactions.

     Section 4.05 Noncontravention. Assuming that all filings, registrations, Permits,
authorizations, consents and approvals contemplated by Section 4.04 have been duly made or
obtained, as applicable, neither the execution and delivery of this Agreement or any other
Ancillary Document to which the Company is party, nor the consummation of the Merger and the
Transactions through the Effective Time, will (i) assuming the Requisite Stockholder Approval is
obtained, violate any provision of the charter, bylaws or other governing documents of the Company
or any of its Subsidiaries, (ii) assuming the approvals set forth on Schedule 4.05 of the Company
Disclosure Schedules are obtained, result in a material violation or material breach of, or
constitute (with or without due notice or lapse of time or both) a material default (or give rise
to any material right of termination, amendment, cancellation or acceleration) under any of the
terms of any note, bond, mortgage, indenture, license, contract, lease, or other instrument or
obligation to which the Company or any of its Subsidiaries is a party (or result in the

22

 

imposition
of any Encumbrance (other than Permitted Encumbrances) upon any of its assets) or (iii) violate any
Applicable Law or Order applicable to the Company or any of its Subsidiaries; other than in the
case of (iii) above, any violation, conflict, breach, default, acceleration, termination,
modification, cancellation or notice that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company.

     Section 4.06 Subsidiaries.

          (a) Each Subsidiary of the Company is duly formed, validly existing and, to the extent
applicable, in good standing under the laws of its jurisdiction of formation. Each such Subsidiary
is duly qualified to do business as a foreign company and is in good standing in each other
jurisdiction where the transaction of its business requires such qualification, except where the
lack of such qualification would not have, individually or in the aggregate, a Material Adverse
Effect on the Company. All Subsidiaries of the Company, the Company’s ownership interests therein,
and their respective jurisdictions of formation are identified in Schedule 4.06(a) of the Company
Disclosure Schedules.

          (b) Except as set forth on Schedule 4.06(b) of the Company Disclosure Schedules, all of the
outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary
of the Company is owned by the Company or by one of its Subsidiaries, free and clear of any
Encumbrance (other than Permitted Encumbrances). Except as set forth on Schedule 4.06(b) of the
Company Disclosure Schedules, there are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary of the Company or (ii) options or other rights
to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any
of its Subsidiaries to issue, any capital stock or other voting securities or ownership interests
in, or any securities convertible into or exchangeable for any capital stock or other voting
securities or ownership interests in, any of its Subsidiaries (the items in clauses (i) and (ii)
being referred to collectively as the “Company Subsidiary Securities”). There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Subsidiary Securities.

          (c) Other than the Subsidiaries of the Company, neither the Company nor any Subsidiary of the
Company owns, directly or indirectly, any shares of capital stock or other equity or ownership
interests in, any other Person (collectively, “Third Party Interests”). Neither the
Company nor any Subsidiary of the Company has any rights to, or is bound by any commitment or
obligation to, acquire by any means, directly or indirectly, any Third Party Interests or to make
any investment in, or contribution or advance to, any Person.

     Section 4.07 Financial Statements.

          (a) Attached to Schedule 4.07(a) of the Company Disclosure Schedules are true and correct
copies of (i) the audited consolidated balance sheet as of December 31, 2006 and the related
audited consolidated statements of income and cash flows for the year ended December 31, 2006 and
(ii) the unaudited interim consolidated balance sheet (the “Company Balance Sheet”) as of
July 31, 2007 (the “Company Balance Sheet Date”) and the related unaudited interim
consolidated statements of income and cash flows for the seven (7) month

23

 

period ended July 31, 2007
of the Company and its Subsidiaries (collectively, the “Company Financial Statements”).

          (b) Except as indicated on Schedule 4.07(b) of the Company Disclosure Schedules or in the
Company Financial Statements (including any notes thereto), the Company Financial Statements were
prepared in accordance with GAAP as of the dates or during the periods covered thereby (except, in
the case of unaudited statements, for the absence of footnotes thereto and normal year end
adjustments) and, in the case of any balance sheet included in the Company Financial Statements,
fairly present in all material respects the consolidated financial position of the Company and its
Subsidiaries as of the date thereof and, in the case of any income statement or statement of cash
flows included in the Company Financial Statements, fairly present in all material respects the
consolidated results of operations or cash flows, as applicable, of the Company and its
Subsidiaries for the periods then ended (subject, in the case of any unaudited Company Financial
Statements, to the absence of footnotes thereto and normal year-end adjustments).

     Section 4.08 Events Subsequent.

          (a) Except as set forth in Schedule 4.08, since the Company Balance Sheet Date through the
date hereof, there has not been any Material Adverse Effect on the Company, and, except for the
Transactions, the Company and its Subsidiaries have been operated only in the Ordinary Course of
Business.

          (b) Except as set forth in Schedule 4.08, since the Company Balance Sheet Date through the
date hereof, there has not been any;

               (i) damage, destruction or other casualty, whether or not covered by insurance, materially
affecting the Company and its Subsidiaries or any assets material to the business owned, held or
used by the Company and its Subsidiaries;

               (ii) transaction or commitment made, or Contract entered into, by the Company or any
Subsidiary, or termination or amendment by the Company or any Subsidiary of any Contract, in either
case, which is material to the Company and its Subsidiaries, other than transactions, commitments,
Contracts, terminations or amendments made in the Ordinary Course of Business;

               (iii) sale or other disposition of assets that are owned, held or used by the Company or any
Subsidiary other than in the Ordinary Course of Business;

               (iv) cancellation, compromise, settlement, waiver or release by the Company or any Subsidiary
(x) other than in the Ordinary Course of Business of any Proceeding (or a series of related
Proceedings) or (y) involving an amount in excess of Fifty Thousand Dollars ($50,000) in the
aggregate;

               (v) (A) increase in the compensation or fringe benefits of any present or former director,
officer, employee or consultant of the Company or any Subsidiary (except for increases in salary or
wages in the Ordinary Course of Business), (B) grant of any severance or termination pay to any
present or former director, officer or employee of the Company or any

24

 

Subsidiary, (C)
establishment, adoption, entrance into, amendment or termination of any Employee Plan or collective
bargaining agreement (other than as may be required by the terms of an existing Employee Plan or
collective bargaining agreement, or as may be required by Applicable Law or in order to maintain
its qualification under Section 401 and 501 of the Code or to provide for the effects of Section
409A of the Code), or (D) grant of any equity or equity-based awards, in the case of each of
clauses (A), (B), (C) or (D) above, other than in the Ordinary Course of Business or as may be
required under Applicable Law;

               (vi) action taken by the Company or any Subsidiary during the period from July 31, 2007
through the date of this Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 6.02; or

               (vii) agreement, whether in writing or otherwise, to do any of the foregoing.

     Section 4.09 No Undisclosed Liabilities. There are no liabilities or obligations of
the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, other than (i) the liabilities, obligations,
conditions or circumstances disclosed and provided for in the Company Balance Sheet, (ii) the
liabilities, obligations, conditions or circumstances, which are of a nature that are not required
by GAAP to be reflected in the Company Financial Statements, (iii) liabilities or obligations
incurred or arising in the Ordinary Course of Business since the Company Balance Sheet Date or in
connection with the consummation of Transactions, (iv) the liabilities, obligations, conditions or
circumstances which are of a subject matter covered by any of the other representations and
warranties of the Company set forth in this Agreement, (v) the liabilities or obligations disclosed
in Schedule 4.09 of the Company Disclosure Schedules or (vi) any other liabilities or obligations,
which individually or in the aggregate would not reasonably be expected to be material to the
Company. Neither the Company nor any of its Subsidiaries has entered into any off-balance
sheet financing or has any off-balance sheet indebtedness for borrowed money through a special
purpose vehicle or otherwise. Schedule 4.09 of the Company Disclosure Schedules sets forth a list
of all of the operating leases to which the Company or any of its Subsidiaries is a party.

     Section 4.10 Taxes.

          (a) The Company and each of its Subsidiaries have filed (or have had filed on their behalf)
all Tax Returns required to have been filed, except for Tax Returns the non-filing of which would
not have, individually or in the aggregate, a Material Adverse Effect on the Company. The Company
and its Subsidiaries have not requested or obtained any extension of time within which to file any
Tax Return, which Tax Return has not since been filed. All Taxes required to have been paid by the
Company and its Subsidiaries (whether or not shown on any Tax Return) have been paid or are
currently being disputed in good faith and have been fully reserved against in the Company
Financial Statements.

          (b) There is no audit or other proceeding presently pending or, to the Knowledge of the
Company, Threatened with regard to any Tax matter concerning the Company and its Subsidiaries.
Neither the Company nor any of its Subsidiaries has received a written ruling from any Taxing
Authority relating to any Tax or entered into a written agreement with a

25

 

Taxing Authority relating
to any Tax that would have continuing effect with respect to any taxable period for which the
Company or any of its Subsidiaries, respectively, has not filed a Tax Return, and there are no
requests for issuance of such a ruling pending on behalf of the Company or any of its Subsidiaries.

          (c) Neither the Company nor any of its Subsidiaries, nor any person on behalf of the Company
or its Subsidiaries, has waived any statute of limitations or agreed to any extension of time that
has continuing effect with respect to assessment or collection of any Tax for which the Company or
its Subsidiaries may be held liable.

          (d) Except as set forth on Schedule 4.10(d) of the Company Disclosure Schedules, neither the
Company nor any of its Subsidiaries is a party to any contract or arrangement covering any current
or former employee or consultant of the Company or any of its Subsidiaries that would require it to
make or give rise to any payment in connection with the Merger and the Transactions that would
constitute an “excess parachute payment” within the meaning of Section 280G of the Code.
Schedule 1.01 lists all bonuses payable to current and former employees and consultants of the
Company and each of its Subsidiaries as a result of the consummation of the Merger.

          (e) Neither the Company nor any of the Subsidiaries has made or agreed to make, or is required
to make, any change in method of accounting which would require it to make any material positive
adjustment to its taxable income pursuant to Section 481(a) of the Code (or any similar provision)
in any taxable period for which the Company or any Subsidiary has not filed a Tax Return, and no
application is pending with any Taxing Authority requesting permission for the Company or any of
its Subsidiaries to make any change in any accounting method which would require such an
adjustment, nor has the Company or any of its Subsidiaries received any written notice that a
Taxing Authority proposes to require a change in method of accounting that would require such an
adjustment.

          (f) Neither the Company nor any of its Subsidiaries has been a party to any Tax allocation,
Tax sharing or similar agreement or arrangement the principal purpose of which is or was the
allocation of Tax liabilities computed on a consolidated, combined, unitary or similar basis (a
“Group Return”) among entities that have been or will be required to compute their Tax
liability by filing on such a basis. Neither the Company nor any of its Subsidiaries (i) has been
a member of an “affiliated group” (within the meaning of Section 1504 of the Code) filing a
consolidated federal income Tax Return, or included or required to be included in any other group
of entities filing or required to file any other type of Group Return, other than a group of which
the Company is the common parent, that would cause the Company or any of its Subsidiaries to be
liable for Taxes under Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local, or foreign law), or (ii) is liable for Taxes of another Person having liability on the basis
described in (i) either by contract or by reason of being a transferee or successor of such a
Person.

          (g) Neither the Company nor any of its Subsidiaries has any deferred income for Tax purposes
the recognition of which would give rise to a material Tax liability of the Company or any of its
Subsidiaries that is attributable to (i) any intercompany transaction (as defined in Treasury
Regulation Section 1.1502-13), or (ii) the disposal of any property in a

26

 

transaction accounted for
under the installment method pursuant to Section 453 of the Code, except to the extent, in either
case, reserved for in the Company Financial Statements.

          (h) Neither the Company nor any of its Subsidiaries has, in the two (2) years preceding the
date of this Agreement, constituted (or has been included, or is required to be included, in a Tax
Return for a group of entities filing income Tax Returns on a consolidated, combined, unitary or
similar basis during a taxable period that included another corporation which constituted during
such taxable period) either a “distributing corporation” or a “controlled
corporation” within the meaning of Section 355(a)(1)(A) of the Code in a distribution
qualifying (or intended to qualify) under Section 355 of the Code (or so much of Section 356 as
relates to Section 355).

          (i) Schedule 4.10(i) of the Company Disclosure Schedules identifies all material Tax Returns
that each of the Company and its Subsidiaries has filed for taxable periods ending after December
31, 2003 and the taxable period covered by each such Tax Return, and identifies those Tax Returns
or periods that have been audited by a Taxing Authority. The Company has made available to Parent
complete and accurate copies of all of the following materials: (i) all income Tax Returns filed
by or with respect to the Company and its Subsidiaries that relate to taxable periods ending after
December 31, 2003, (ii) all examination reports relating to Taxes of the Company and its
Subsidiaries issued after December 31, 2003, and (iii) all statements of Taxes assessed after
December 31, 2003, against the Company and its Subsidiaries in excess of amounts shown on Tax
Returns filed for the relevant taxable period before such assessment.

          (j) Neither the Company nor any Subsidiary is a party to, is bound by, or has any obligation
under, any Tax indemnification agreement or similar contract or arrangement which obligates the
Company or any Subsidiary to make payments to another person determined with respect to Tax
obligations of such person (other than, pursuant to contracts that do not have
a principal purpose to provide indemnification for Tax obligations and in which such
Tax-related obligations are customarily included in commercial agreements of a similar character).

     Section 4.11 Properties.

          (a) Neither the Company nor any of its Subsidiaries own any Real Property.

          (b) Schedule 4.11(b) of the Company Disclosure Schedules lists the addresses of all Real
Property leased (the “Leased Real Property”) by the Company or any of its Subsidiaries as
of the date hereof and lists each lease agreement to which the Company or any of its Subsidiaries
is a party with respect to the Leased Real Property (each, a “Lease”). The Company has
made available to Parent copies of all of the Leases, and all written modifications, amendments and
supplements thereto which copies are true and complete in all material respects. Except as
disclosed on Schedule 4.11(b) of the Company Disclosure Schedules:

               (i) each of the Leases was made in the Ordinary Course of Business and is valid, binding and
currently in full force and effect;

27

 

               (ii) to the Knowledge of the Company, no material default or material preemptive right by any
landlord under any Lease, after applicable grace periods, if any, exists as of the date hereof;

               (iii) the Company has not received any written notice alleging a material default by the
Company or any of its Subsidiaries under any Lease and (A) there are no material defaults by the
Company or any of its Subsidiaries under any Lease that would entitle a landlord thereunder to
terminate such Lease, and (B) to the Knowledge of the Company, no event has occurred which, through
the passage of time or the giving of notice, or both, would constitute a material default by the
Company or any of its Subsidiaries;

               (iv) neither the Company nor any of its Subsidiaries is obligated to pay any leasing or
brokerage commission relating to any Lease or upon the renewal of any Lease; and

               (v) no construction, alteration or other leasehold improvement work with respect to any of the
Leases remains to be paid for or to be performed by the Company or any of its Subsidiaries.

          (c) Schedule 4.11(c) of the Company Disclosure Schedules attached hereto sets forth a true,
correct and complete list of all items of tangible personal property owned by the Company or any of
its Subsidiaries as of the date hereof having either a net book value per unit or an estimated book
value per unit in excess of Five Thousand Dollars ($5,000); or not owned by the Company or any of
its Subsidiaries but in the possession of or used or useful in the business of the Company or any
of its Subsidiaries and having rental payments therefor in excess of One Thousand Dollars ($1,000)
per month or Twelve Thousand Dollars ($12,000) per year (collectively, the “Personal
Property”). The Company and each of its Subsidiaries have good and marketable title to, or a
valid leasehold interest in, all of their Personal Property and assets shown on the Company Balance
Sheet or acquired by any of them after the date of the Company Balance Sheet, free and clear of any
Encumbrances, except for (i) assets which have been
disposed of since the date of the Company Balance Sheet in the Ordinary Course of Business,
(ii) Encumbrances reflected in the Company Balance Sheet, (iii) Encumbrances related to the Lender
Debt, all of which will be released or extinguished as of the Effective Time, and (iv) Permitted
Encumbrances or other Encumbrances which would not have, individually or in the aggregate, a
Material Adverse Effect on the Company.

          (d) The continued use, occupancy and operation of the Leased Real Property as currently used,
occupied and operated by the Company or any of its Subsidiaries, do not, to the Knowledge of the
Company, violate any material applicable building, zoning, subdivision, other land use and similar
laws, regulations and ordinances or any material license, franchise, permit, certificate, approval
or other similar authorization of a Governmental Body.

          (e) No representation or warranty is made in this Section 4.11 with respect to any Company
Intellectual Property that is the subject of Section 4.12.

     Section 4.12 Intellectual Property. Schedule 4.12 of the Company Disclosure Schedules
hereto contains a correct and complete list of all issued patents, registered trademarks

28

 

and
registered copyrights and pending applications for patents, trademarks and copyrights owned by (as
opposed to licensed to) the Company or any of its Subsidiaries and all material agreements
(“Material IP Agreements”) pursuant to which the Company or any of its Subsidiaries has
received a license or sub-license with respect to any material item of Intellectual Property
(excluding any off-the-shelf software products). Except as set forth in Schedule 4.12 of the
Company Disclosure Schedules, (i) each of the Company and its Subsidiaries owns or has the right to
use all Intellectual Property material to or necessary for the operation of the business of the
Company and its Subsidiaries (the “Company Intellectual Property”), (ii) to the Knowledge
of the Company, no Person is infringing, misappropriating or diluting any material items of Company
Intellectual Property owned by the Company, (iii) none of the material items of Company
Intellectual Property owned by the Company has been misappropriated or is infringing upon the
Intellectual Property of any Third Party, (iv) all of the Material IP Agreements are valid, binding
and currently in full force and effect, (v) neither the Company nor any of its Subsidiaries is in
material default under any Material IP Agreement, and (vi) immediately after the Closing and to the
Knowledge of the Company, the Company Intellectual Property will be owned by or available for use
by the Company and its Subsidiaries on terms and conditions substantially identical to those under
which the Company and its Subsidiaries owned or used the Company Intellectual Property immediately
prior to the Closing. The Company and its Subsidiaries have taken all material steps customary and
reasonable in their industries to protect and preserve the confidential nature of all Confidential
Information of the Company or its Subsidiaries.

     Section 4.13 Contracts.

          (a) Schedule 4.13(a) of the Company Disclosure Schedules lists all of the following written
Contracts to which the Company or any of its Subsidiaries is a party (other than Leases): (i) any
Contract the performance of which requires payment by or to the Company or any of its Subsidiaries
in excess of Fifty Thousand Dollars ($50,000), (ii) any Contract concerning the establishment by
the Company or any Subsidiary of a partnership, joint venture or similar arrangement, including any
Subsidiary, and any Contract between the Company or any
Subsidiary of the Company, on the one hand, and any Subsidiary of the Company on the other
hand, (iii) any Contract containing a non-competition, non-solicitation or similar covenant which
restricts the Company’s operations in any geographic area, in any line of business or with any
Third Party, (iv) any Contract for the acquisition of capital stock or all or substantially all
assets of another Person or a division thereof (whether by merger, stock or asset purchase), (v)
any Contract regarding dispositions of any assets of the Company or any Subsidiary other than the
sale of inventory in the Ordinary Course of Business or with a value less than Fifty Thousand
Dollars ($50,000), (vi) any employment agreements or employment-related agreements with any
employee that results in any severance pay or the acceleration or triggering of benefits or rights
thereunder as a result of the transactions contemplated by this Agreement, and (vii) any Contract
involving any resolution or settlement of any actual or threatened Proceeding with a value of
greater than Fifty Thousand Dollars ($50,000). All of the Contracts required to be listed in
Schedule 4.13(a) of the Company Disclosure Schedules hereto are referred to in this Agreement as
the “Material Contracts.” The Company has made available to Parent a correct and complete
copy of each Material Contract which copies are true and complete in all material respects.

29

 

          (b) All of the Material Contracts are valid, binding and currently in full force and effect.
Neither the Company nor any of its Subsidiaries is in material default under any of the Material
Contracts, and, to the Knowledge of the Company, no event has occurred which, through the passage
of time or the giving of notice, or both, would constitute a default by the Company or any of its
Subsidiaries or give rise to a right of termination or cancellation by another party under any of
the Material Contracts. To the Knowledge of the Company, no other Person is in default under any
of the Material Contracts. Except as described in Schedule 4.13(a) of the Company Disclosure
Schedules hereto, none of the Material Contracts has been cancelled, terminated, amended or
modified. Except as set forth in Schedule 4.05 of the Company Disclosure Schedules, neither the
execution and delivery of this Agreement by the Company, the performance by it of its obligations
hereunder, nor the consummation by it of the transactions contemplated hereby, will require any
consent of any party or written notice to any party, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default), or give rise to any right of
termination, change of control rights, cancellation, modification, revocation or acceleration of
any right or obligation of the Company or any of its Subsidiaries.

     Section 4.14 Legal Compliance. Except as set forth in Schedule 4.14 of the Company
Disclosure Schedules, the Company and each of its Subsidiaries have complied with all Applicable
Laws and Orders of any Governmental Body except where the failure to comply would not have a
Material Adverse Effect on the Company. Except as set forth in Schedule 4.14 of the Company
Disclosure Schedules, neither the Company nor any of its Subsidiaries has received any written
notice of, and the Company has no Knowledge of, any violation of a material nature of any
Applicable Laws and/or Orders applicable to the Company or any of its Subsidiaries. None of the
Company nor any of its Subsidiaries has outstanding securities that are required to be registered
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

     Section 4.15 Proceedings and Orders. Except as set forth in Schedule 4.15 of the
Company Disclosure Schedules, neither the Company nor any of its Subsidiaries (i) are subject to or
affected by any outstanding Order, or
(ii) are parties to any pending Proceeding or, to the Knowledge of the Company, Threatened
Proceeding, which, in each case, is material to the Company.

     Section 4.16 Labor Matters. Except as set forth on Schedule 4.16 of the Company
Disclosure Schedules, the Company and its Subsidiaries are in compliance with all Applicable Laws
respecting employment and employment practices, terms and conditions of employment and wages and
hours, and are not engaged in any unfair labor practice, failure to comply with which or engagement
in which, as the case may be, would have a Material Adverse Effect on the Company. There is no
unfair labor practice complaint pending or, to the Knowledge of the Company, Threatened against the
Company or any of its Subsidiaries before the National Labor Relations Board. Schedule 4.16 of the
Company Disclosure Schedules contains a list of all employees of the Company and each Subsidiary as
of the date hereof whose annual rate of compensation exceeds $50,000 per year, along with the
position and the annual rate of compensation of each such person. Each such employee has entered
into an Employee Agreement containing confidentiality, assignment of inventions and
non-solicitation provisions with the Company or a Subsidiary, a form of which has previously been
delivered to the Buyer.

30

 

To the Knowledge of the Company, prior to the date hereof, no key employee
or group of employees has notified the Company in writing that he or she intends to terminate
employment with the Company or any Subsidiary as a result of the Merger. Neither the Company nor
any Subsidiary is a party to or bound by any collective bargaining agreement, nor has any of them
experienced any strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. The Company has no Knowledge of any organizational effort made or Threatened,
either currently or within the past two years, by or on behalf of any labor union with respect to
employees of the Company or any Subsidiary. Except as set forth in Schedule 4.16 of the Company
Disclosure Schedules, during the past three years, neither the Company nor any of its Subsidiaries
have effectuated (i) a “plant closing” (as defined in the WARN Act) affecting any site of
employment or one or more facilities or operating units within any site of employment or facility
of the Company or its Subsidiaries; or (ii) a “mass layoff” (as defined in the WARN Act) affecting
any site of employment or facility of the Company or its Subsidiaries; nor has the Company or its
Subsidiaries been affected by any transaction or engaged in layoffs or employment terminations
sufficient in number to trigger application of any similar state, local or foreign Law. Except as
set forth in Schedule 4.16 of the Company Disclosure Schedules, the employees of the Company or its
Subsidiaries have not suffered an “employment loss” (as defined in the WARN Act) since three months
prior to the date of this Agreement. The Company and its Subsidiaries have at all times and in all
material respects properly classified each of their respective employees as employees and each of
their independent contractors as independent contractors, as applicable, and no written indication
has been received by the Company from any Governmental Authority that such contractors would be
considered employees for employment law or tax purposes at any time. The Company and its
Subsidiaries have at all times and in all material respects paid their respective employees in
conformance with applicable federal, state, local and foreign wage and hour laws. There are not
presently pending, or the Knowledge of the Company Threatened, any claims with respect to working
hours or the payment of wages, overtime or any other form of employee compensation.

     Section 4.17 Employee Benefit Plans.

          (a) Schedule 4.17(a) of the Company Disclosure Schedules contains a correct and complete list
identifying each Employee Benefit Plan and each other material employment, severance or similar
contract with respect to which the Company or any of its Subsidiaries has any liability. Copies of
such plans (and, if applicable, related trust or funding agreements or insurance policies) and all
amendments thereto and all current summary plan descriptions and summaries of material
modifications have been made available for review by Parent together with the most recent annual
report (Form 5500 including any applicable schedules and attachments thereto) prepared in
connection with any such plan or trust.

          (b) Neither the Company nor any ERISA Affiliate sponsors, maintains or contributes to, or has,
in the past six (6) years, sponsored, maintained or contributed to, any Employee Benefit Plan
subject to Title IV of ERISA or that is a “multiemployer plan” (within the meaning of
Section 3(37) of ERISA).

          (c) Each Employee Benefit Plan which is intended to be qualified under Section 401(a) of the
Code is the subject of a favorable determination letter from the Internal Revenue Service
(“IRS”), or the plan sponsor is entitled to rely on a favorable advisory or

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opinion letter
issued with respect to such plan document in accordance with IRS Announcement 2001-77. Each
Employee Benefit Plan has been maintained in material compliance with its terms and with Applicable
Law, and all contributions required to be made under each Employee Benefit Plan have been made or
accrued in accordance with past custom and practice.

          (d) Except as otherwise provided in this Agreement or set forth in Schedule 4.17(d) of the
Company Disclosure Schedules, the consummation of the Merger and the Transactions will not by
itself entitle any employee or independent contractor of the Company or any of its Subsidiaries to
any material severance pay or material acceleration of the time of payment or vesting or trigger
any payment of funding (through a grantor trust or otherwise) of material compensation or benefits
under, increase the amount payable or trigger any other material obligation pursuant to, any
Employee Benefit Plan.

          (e) Except as set forth in Schedule 4.17(e) of the Company Disclosure Schedules, no Employee
Benefit Plan provides post-retirement health, medical or life insurance benefits for retired,
former or current employees of the Company or its ERISA Affiliates.

          (f) Except as set forth in Schedule 4.17(f) of the Company Disclosure Schedules, neither the
Company nor any of its Subsidiaries is a party to or subject to, or is currently negotiating in
connection with entering into, any collective bargaining agreement or other contract or
understanding with a labor union or organization.

          (g) Excluding routine claims for benefits, there is no action, suit, audit, proceeding or, to
the Knowledge of the Company, investigation pending against or involving or, to the Knowledge of
the Company, Threatened against or involving any Employee Benefit Plan before any court or
arbitrator or any Governmental Body, or state, federal or local official.

     Section 4.18 Environmental Matters. Except as set forth in Schedule 4.18 of the
Company Disclosure Schedules, to the Knowledge of the Company, (i) the Company and its Subsidiaries
have transported, stored,
and/or disposed of any Hazardous Materials handled by the Company and its Subsidiaries in
compliance in all material respects with all Environmental Laws, (ii) the Company and its
Subsidiaries have operated their respective businesses with all material Permits required under
Environmental Law, (iii) the Company and its Subsidiaries have not received any written notice of
any investigation, Proceeding or Order concerning any material Environmental Condition or material
Environmental Claim, and (iv) no asbestos, polychlorinated biphenyls or urea formaldehyde in
amounts or conditions in violation of Environmental Law has been placed, stored or located on the
Leased Real Property. To the Company’s Knowledge, there have been no Releases of any Hazardous
Materials into the Environment by the Company or any of its Subsidiaries, or, with respect to any
such Releases of Hazardous Materials, the Company or such Subsidiary has given all required notices
to Governmental Bodies (copies of which have been provided to Parent).

     Section 4.19 Insurance. Schedule 4.19 of the Company Disclosure Schedules sets forth
a true, correct and complete list of all fire, theft, casualty, general liability, workers
compensation, business interruption, environmental impairment, product liability, automobile and
other insurance policies (excluding any insurance policies relating to any Employee Benefit Plan)
maintained by the Company or any of its Subsidiaries, specifying the insurer and the

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effective date
of each such policy (collectively, the “Insurance Policies”) and all claims made under such
Insurance Policies since January 1, 2004. True, correct and complete copies of all Insurance
Policies have been previously delivered, or will be delivered or made available prior to Closing,
by the Company to Parent. All premiums due on the Insurance Policies or renewals thereof have been
paid, and there is no default under the Insurance Policies. Except as set forth on Schedule 4.19
of the Company Disclosure Schedules, neither the Company nor any of the Subsidiaries has any
material outstanding claims or any material dispute with any insurance carrier regarding claims,
settlements or premiums. To the Knowledge of the Company, each such policy will continue to be
enforceable and in full force and effect immediately following the Closing in accordance with the
terms thereof as in effect immediately prior to the Closing.

     Section 4.20 Affiliate Transactions. Except (i) as set forth in Schedule 4.20 of the
Company Disclosure Schedules and (ii) for any arrangements, relationships or interests that will
not continue after the Closing (including the Common Stock, Options and/or Warrants owned by any
Company Stockholder), no Company Stockholder and no Affiliate of any Company Stockholder or of the
Company or its Subsidiaries has, or has had since the Company Balance Sheet Date, any (A) material
business arrangement or relationship with the Company or any of its Subsidiaries, or (B) interest
in any material asset, real or personal, tangible or intangible, of the Company or any of its
Subsidiaries. Since the Company Balance Sheet Date, through the date hereof, there has been no
material change in the intercompany agreements between the Company or its Subsidiaries, on the one
hand, and any of their Affiliates, on the other hand. There are no assets owned by any Affiliate
of the Company or its Subsidiaries that are used in the business of the Company and its
Subsidiaries.

     Section 4.21 Brokers. Except as set forth in Schedule 4.21 of the Company Disclosure
Schedules, no broker, finder or investment banker (collectively, a “Broker”) is entitled to
any brokerage, finder’s or other fee or commission in
connection with the Merger and the Transactions based upon arrangements made by or on behalf
of the Company.

     Section 4.22 Customers and Suppliers. Schedule 4.22(a) of the Company Disclosure
Schedules sets forth a list of the Company’s top twenty (20) customers and suppliers as of December
31, 2006 (determined by the amount of total sales or purchases, as applicable). Except as set
forth on Schedule 4.22(b) of the Company Disclosure Schedules, no such customer or supplier has
indicated in writing to the Company or any Subsidiary within the past year that it will stop, or
decrease the rate of, buying products or services or supplying products or services, as applicable.
Schedule 4.22(b) of the Company Disclosure Schedules sets forth a list of all material, unresolved
customer billing, service or warranty disputes pursued in writing by such customers or suppliers.

     Section 4.23 Accounts Receivable. All accounts receivable of the Company and the
Subsidiaries reflected on the Company Balance Sheet were valid receivables as of the date thereof,
arising from sales actually made or services actually provided, net of the applicable reserve for
doubtful accounts on the Company Balance Sheet or in the notes thereto. All such accounts
receivable are reflected on the Company Balance Sheet or in the notes thereto in accordance with
GAAP as of the date thereof. To the Company’s Knowledge, there is no contest, counterclaim or
right of setoff under any Contract with any obligor of any such account receivable relating to the
amount or validity of such account receivable. No such obligor has

33

 

been released in whole or in
part by the Company from paying the full value of its obligation to the Company and the Company has
not agreed to do so. No such account receivable has been subordinated or assigned by the Company
and the Company has not agreed to do so.

     Section 4.24 Permits. Schedule 4.24 of the Company Disclosure Schedules sets forth a
list of all Permits issued to or held by the Company or any Subsidiary. Such listed Permits are
the only Permits that are required for the Company and the Subsidiaries to conduct their respective
businesses as presently conducted, except for those the absence of which would not have a Material
Adverse Effect on the Company and its Subsidiaries. Each such Permit is in full force and effect
and, to the Knowledge of the Company, no suspension or cancellation of such Permit is Threatened.
To the Knowledge of the Company, each such Permit will continue in full force and effect
immediately following the Closing.

     Section 4.25 Purchase for Own Account; Accredited Investor. To the Knowledge of the
Company, each of the Company Stockholders is acquiring the Stock Portion of the Merger
Consideration pursuant to the terms and conditions of this Agreement for its own account and for
investment purposes only and not with a view towards, and has no present intention, agreement or
arrangement regarding, the distribution, transfer, assignment, resale or subdivision of the Stock
Portion of the Merger Consideration. The Company has conducted and is relying solely upon its own
independent review and analysis of the businesses, assets, condition, operations and prospects of
Parent and acknowledges that it has been provided access to the properties, premises and records of
Parent and its subsidiaries for this purpose. To the Knowledge of the Company, each of the Company
Stockholders listed on Schedule 4.25 of the Company Disclosure Schedules is experienced in
investment matters, fully understands the Merger and the
Transactions, has the knowledge and experience in financial matters as to be capable of
evaluating the merits and risks of its investment in the Stock Portion of the Merger Consideration
and has the financial ability and resources to bear the economic risks of its investment in the
Stock Portion of the Merger Consideration. To the Knowledge of the Company, each of the Company
Stockholders listed on Schedule 4.25 of the Company Disclosure Schedules is an “Accredited
Investor” as that term is defined in Rule 501 of Regulation D of the Securities Act of 1933 (the
“Securities Act”).

     Section 4.26 Disclaimer of Other Representations and Warranties. Except as expressly
set forth in Article 4 or in the Company Disclosure Schedules or any certificate furnished or to be
furnished to Parent pursuant hereto, neither the Company nor any of its Affiliates nor any Person
acting on their behalf makes, or shall be deemed to have made, any representation or warranty,
express or implied, relating to the Company, its Subsidiaries, the Company’s business or any other
matter, including any representation or warranty as to merchantability, habitability, workmanship,
profitability, future performance, fitness for a particular purpose or non-infringement, whether or
not contained in any document or other communication provided or otherwise made available to Parent
or any Person acting on behalf of Parent during the course of due diligence or otherwise
(including, without limitation, in any management presentations, information or offering
memorandum, supplemental information, data room, estimate, projection, forecast, budget or other
forward-looking information or other materials or information with respect to any of the above).

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

     Except as set forth in the disclosure schedules delivered by Parent to the Company on the date
hereof (the “Parent Disclosure Schedules”), each of Parent and Merger Sub represents and
warrants as of the date hereof to the Company as follows:

     Section 5.01 Corporate Existence and Power. Each of Parent, Merger Sub and each of
Parent’s Subsidiaries is a corporation duly incorporated, validly existing and in good standing
under the laws of its state of incorporation. Each of Parent, Merger Sub and each of Parent’s
Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in
each other jurisdiction where the transaction of its business requires such qualification, except
where the lack of such qualification would not have, individually or in the aggregate, a Material
Adverse Effect on Parent, Merger Sub or any of Parent’s Subsidiaries, as applicable. Parent has
heretofore delivered to the Company true and complete copies of the certificates of incorporation
and bylaws of Parent, Merger Sub and each of Parent’s Subsidiaries as currently in effect.

     Section 5.02 Ownership of Merger Sub; No Prior Activities. Merger Sub is a direct,
wholly-owned subsidiary of Parent, was formed solely for the purpose of engaging in the Merger and
the Transactions and has engaged in no business activity other than as contemplated by this
Agreement. Except for obligations or liabilities incurred in connection with its incorporation,
the Merger and the Transactions, Merger Sub has not incurred, and will not incur,
directly or indirectly, through any Subsidiary or Affiliate, any obligations or liabilities
and has not engaged in, and will not engage in, any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any Person.

     Section 5.03 Corporate Authorization. The execution, delivery and performance by each
of Parent and Merger Sub of this Agreement and any Ancillary Documents to which either is a party
and the consummation by each of Parent and Merger Sub of the Merger and the Transactions are within
its corporate powers and have been duly authorized by all necessary corporate action on the part of
each of Parent and Merger Sub. This Agreement constitutes a valid and legally binding agreement of
each of Parent and Merger Sub, enforceable in accordance with its terms and conditions, subject to
Applicable Laws of general application relating to public policy, bankruptcy, insolvency and the
relief of debtors and Applicable Laws governing specific performance, injunctive relief and other
equitable remedies.

     Section 5.04 Governmental Authorization. The execution, delivery and performance by
Parent and Merger Sub of this Agreement and any Ancillary Document to which either is a party and
the consummation by Parent and Merger Sub of the Merger and the Transactions require no action by
or in respect of, or filing with, any Governmental Body, other than (i) the filing of the
Certificate of Merger and the Certificate of Designations with the Delaware Secretary of State
pursuant to the DGCL, (ii) compliance with any applicable requirements of the HSR Act and (iii)
compliance with any applicable requirements of any applicable securities laws, whether federal,
state or foreign.

     Section 5.05 Noncontravention. Except for the consents, approvals, authorizations,
permits and Material Contracts described in Schedule 5.05 of the Parent Disclosure Schedules,

35

 

neither the execution and delivery of this Agreement, nor the consummation of the Merger and the
Transactions, will (i) violate any provision of the charter, bylaws or other governing documents of
each of Parent, Merger Sub or any of Parent’s Subsidiaries, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under any of the terms of any
note, bond, mortgage, indenture, license, contract, lease, or other instrument or obligation to
which Parent, Merger Sub or any of Parent’s Subsidiaries is a party (or result in the imposition of
any Encumbrance (other than Permitted Encumbrances) upon assets of Parent, Merger Sub or any of
Parent’s Subsidiaries), or (iii) violate any Applicable Law or any Order of any Governmental Body
applicable to Parent, Merger Sub or any of Parent’s Subsidiaries.

     Section 5.06 Proceedings and Orders. Except as set forth in Schedule 5.06 of the
Parent Disclosure Schedules, none of Parent, Merger Sub nor any of Parent’s Subsidiaries (i) is
subject to or affected by any outstanding Order, or (ii) is a party to any pending Proceeding or,
to the Knowledge of Parent, Threatened Proceeding, which would, in each case, be material to Parent
or prohibit or materially impair Parent’s and Merger Sub’s ability to perform their obligations
under this Agreement or to complete the Merger or the Transactions in accordance with the terms of
this Agreement and the Ancillary Documents.

     Section 5.07 Financing. Parent has available, and on the Closing Date will have
available, sufficient funds, available lines of credit or other sources of immediately available
funds to enable Parent, Merger Sub and the Surviving Corporation to pay the Merger Consideration,
the Payoff Amount and all of its fees and expenses related to the Transactions. Section 5.07 of
the Parent Disclosure Schedules sets forth true, accurate and complete copies of an executed Credit
Agreement between Parent, Merger Sub and Canadian Imperial Bank of Commerce (the “Parent
Lender”) (as the same may be amended and replaced in accordance with Section 6.08, the
“Parent Credit Agreement”), pursuant to which, and subject to the terms and conditions
thereof, the Parent Lender has agreed to lend the amount set forth therein to Parent and Merger Sub
for the purpose of funding the Merger Consideration, the Payoff Amount and of its fees and expenses
related to the Transactions (the “Financing”). The Parent Credit Agreement, in the form so
delivered, is a legal, valid and binding obligation of Parent and Merger Sub and, to the knowledge
of Parent, the other parties thereto. The Parent Credit Agreement has not been amended, modified
or terminated in any respect. No event has occurred which, with or without notice, lapse of time
or both, would constitute a default or breach on the part of Parent or Merger Sub under any term or
condition of the Parent Credit Agreement. Neither Parent nor Merger Sub has any reason to believe
that it will be unable to satisfy on a timely basis any term or condition of the Closing to be
satisfied by it contained in the Parent Credit Agreement. Parent or Merger Sub has fully paid any
and all commitment fees or other fees required by the Parent Credit Agreement to be paid on or
before the date of this Agreement. The Financing, plus other cash available to Parent for purposes
of the Merger and the Transactions, is sufficient to pay the aggregate Merger Consideration, the
Payoff Amount and all of the Transaction Expenses of Parent and the Merger Sub and to allow Parent
and Merger Sub to perform all of their other obligations under this Agreement and to consummate the
Merger and the Transactions. There are no contractual contingencies, side letters or similar
arrangements under any agreement relating to the Transactions to which Parent, Merger Sub or any of
their Affiliates is a party that would permit the Parent Lender to reduce the total amount of the
Financing or impose any additional condition precedent to the availability of the Financing.

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     Section 5.08 Purchase for Own Account: Accredited Investor. Parent and Merger Sub
represent and warrant that each is acquiring the Shares pursuant to the terms and conditions of
this Agreement for their own account and for investment purposes only and not with a view towards,
and neither has any present intention, agreement or arrangement regarding, the distribution,
transfer, assignment, resale or subdivision of the Shares. Parent and Merger Sub have conducted
and are relying solely upon their own independent review and analysis of the businesses, assets,
condition, operations and prospects of the Company and its Subsidiaries and acknowledge that each
has been provided access to the properties, premises and records of the Company and its
Subsidiaries for this purpose. Parent and Merger Sub represent that each is experienced in
investment matters, fully understands the Merger and the Transactions, has the knowledge and
experience in financial matters as to be capable of evaluating the merits and risks of its
investment in the Shares and has the financial ability and resources to bear the economic risks of
its investment in the Shares. Parent and Merger Sub represent that each is an “Accredited
Investor” as that term is defined in Rule 501 of Regulation D of the Securities Act.

     Section 5.09 Brokers. Except as set forth in Schedule 5.09 of the Parent Disclosure
Schedules, no Broker is entitled to any brokerage, finder’s or other fee or commission in
connection with the Merger and the Transactions based upon arrangements made by or on behalf of
Parent or Merger Sub.

     Section 5.10 Capitalization.

          (a) As of the date hereof, the authorized capital stock of Parent consists of 395,000,000
shares of Parent Common Stock, of which there were 33,632,444 shares of Parent Common Stock issued
and outstanding, and 5,000,000 shares of Parent Preferred Stock, none of which is outstanding and
5,000,000 shares of which is designated as Series A Convertible Preferred Stock (the “Parent
Series A Preferred Stock”). All outstanding shares of Parent Common Stock and Parent Preferred
Stock are duly authorized, validly issued, fully paid and nonassessable. Parent does not have any
outstanding bonds, debentures, notes or other obligations, the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the right to vote) with
Parent’s stockholders on any matter, and there are no options, warrants, or other rights (including
preemptive rights) or agreements, arrangements, or commitments of any character, whether or not
contingent, relating to issued or unissued Parent Common Stock or Parent Preferred Stock or
obligating Parent to issue, redeem, repurchase or otherwise acquire any share of Parent Common
Stock or Parent Preferred Stock, or other equity interest in, Parent. No Subsidiary of Parent owns
any shares of Parent Common Stock or Parent Preferred Stock. The per share exercise price of each
stock option granted by Parent was equal to or greater than the fair market value of one share of
Parent Common Stock on the grant date of such stock option.

          (b) Except as set forth on Schedule 5.10(b) of the Parent Disclosure Schedules, all of the
outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary
of Parent is owned by Parent or by one of its Subsidiaries, free and clear of any Encumbrance
(other than Permitted Encumbrances). Except as set forth on Schedule 5.10(b) of the Parent
Disclosure Schedules, there are no outstanding (i) securities of Parent or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or other voting securities or
ownership interests in any Subsidiary of Parent or (ii) options or other rights to acquire from

37

 

Parent or any of its Subsidiaries, or other obligation of Parent or any of its Subsidiaries to
issue, any capital stock or other voting securities or ownership interests in, or any securities
convertible into or exchangeable for any capital stock or other voting securities or ownership
interests in, any of its Subsidiaries (the items in clauses (i) and (ii) being referred to
collectively as the “Parent Subsidiary Securities”). There are no outstanding obligations
of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent
Subsidiary Securities.

          (c) Other than the Subsidiaries of Parent, neither Parent nor any Subsidiary of Parent owns,
directly or indirectly, any shares of capital stock or other equity or ownership interests in, any
other Person (collectively, “Parent Third Party Interests”). Neither Parent nor any
Subsidiary of Parent has any rights to, or is bound by any commitment or obligation to, acquire by
any means, directly or indirectly, any Parent Third Party Interests or to make any investment in,
or contribution or advance to, any Person.

     Section 5.11 Parent Series A Preferred Stock. The Parent Series A Preferred Stock
that constitutes the Stock Portion of the Merger Consideration has been duly authorized, and upon
consummation of the transactions contemplated by this Agreement, will be validly issued, fully paid
and nonassessable and will be issued without violation of applicable Laws.

     Section 5.12 Financial Statements.

          (a) (i) Filed with the Securities and Exchange Commission are true and correct copies of (x)
the audited consolidated balance sheet as of July 31, 2006 and the related audited consolidated
statements of income and cash flows for the year ended July 31, 2006, and (y) the unaudited interim
consolidated balance sheet as of April 30, 2007 and the related unaudited interim consolidated
statements of income and cash flows for the nine (9) month period ended April 30, 2007 and (ii)
attached hereto as Schedule 5.12(a) of the Parent Disclosure Schedules are the unaudited
consolidated balance sheet as of July 31, 2007 and the related unaudited consolidated statements of
income and cash flows for the year ended July 31, 2007, of Parent and its Subsidiaries
(collectively, (i) and (ii) are referred to herein as the “Parent Financial Statements”).

          (b) Except as indicated on Schedule 5.12(b) of the Parent Disclosure Schedules or in the
Parent Financial Statements (including any notes thereto), the Parent Financial Statements (i)
complied as to form in all material respects with applicable accounting requirements and the
published rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”)
with respect thereto when filed, (ii) were prepared in accordance with GAAP as of the dates or
during the periods covered thereby (except, in the case of unaudited statements, for the absence of
footnotes thereto and normal year end adjustments) and (iii) in the case of any balance sheet
included in the Parent Financial Statements fairly present in all material respects the
consolidated financial position of Parent and its Subsidiaries as of the date thereof and, in the
case of any income statement or statement of cash flows included in the Parent Financial
Statements, fairly present in all material respects the consolidated results of operations or cash
flows, as applicable, of Parent and its Subsidiaries for the periods then ended (subject, in the
case of any unaudited Parent Financial Statements to normal year-end adjustments).

38

 

          (c) Parent maintains a system of accounting and internal controls and procedures as are
necessary to provide assurances that (i) the financial records and financial statements are
complete and accurate in all material respects; (ii) transactions are executed with management’s
authorization; (iii) transactions are recorded as necessary to permit preparation of the financial
statements of Parent and to maintain accountability for Parent’s assets; (iv) access to Parent’s
assets is permitted only in accordance with management’s authorization; (v) accounts, notes and
other receivables and inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis; and (vi) material
information regarding the operations of Parent and its financial condition is accumulated and
communicated to Parent’s management, including its principal executive and financial officers.

     Section 5.13 Events Subsequent.

          (a) Except as set forth in Schedule 5.13, since July 31, 2007 through the date hereof, there
has not been any Material Adverse Effect on Parent, and, except for the Transactions, Parent and
its Subsidiaries have been operated only in the Ordinary Course of Business.

          (b) Except as set forth in Schedule 5.13, since July 31, 2007 through the date hereof, there
has not been any:

               (i) damage, destruction or other casualty, whether or not covered by insurance, materially
affecting Parent and its Subsidiaries or any assets material to the business owned, held or used by
Parent and its Subsidiaries;

               (ii) transaction or commitment made, or Contract entered into, by Parent or any Subsidiary, or
termination or amendment by Parent or any Subsidiary of any Contract, in either case, which is
material to Parent and its Subsidiaries, other than transactions, commitments, Contracts,
terminations or amendments made in the Ordinary Course of Business;

               (iii) sale or other disposition of assets that are owned, held or used by Parent or any
Subsidiary other than in the Ordinary Course of Business;

               (iv) cancellation, compromise, settlement, waiver or release by Parent or any Subsidiary (x)
other than in the Ordinary Course of Business of any Proceeding (or a series of related
Proceedings) or (y) involving an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000)
in the aggregate;

               (v) (A) increase in the compensation or fringe benefits of any present or former director,
officer, employee or consultant of Parent or any Subsidiary (except for increases in salary or
wages in the Ordinary Course of Business), (B) grant of any severance or termination pay to any
present or former director, officer or employee of Parent or any Subsidiary, (C) establishment,
adoption, entrance into, amendment or termination of any Employee Plan or collective bargaining
agreement (other than as may be required by the terms of an existing Employee Plan or collective
bargaining agreement, or as may be required by Applicable Law or in order to maintain its
qualification under Section 401 and 501 of the Code or to provide for the effects of Section 409A
of the Code), or (D) grant of any equity or equity-

39

 

based awards, in the case of each of clauses
(A), (B), (C) or (D) above, other than in the Ordinary Course of Business or as may be required
under Applicable Law; or

               (vi) agreement, whether in writing or otherwise, to do any of the foregoing.

     Section 5.14 No Undisclosed Liabilities. There are no liabilities or obligations of
Parent or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than (i) the liabilities, obligations, conditions or
circumstances disclosed and provided for in the most recent audited balance sheet included in the
Parent Financial
Statements, (ii) the liabilities, obligations, conditions or circumstances, which are of a
nature that are not required by GAAP to be reflected in the Parent Financial Statements, (iii)
liabilities or obligations incurred or arising in the Ordinary Course of Business since July 31,
2007 or in connection with the consummation of Transactions, (iv) the liabilities, obligations,
conditions or circumstances which are of a subject matter covered by any of the other
representations and warranties of Parent and Merger Sub set forth in this Agreement, (v) the
liabilities or obligations disclosed in Schedule 5.14 of the Parent Disclosure Schedules or (vi)
any other liabilities or obligations, which individually or in the aggregate would not reasonably
be expected to be material to Parent. Neither Parent nor any of its Subsidiaries has entered into
any off-balance sheet financing or has any off-balance sheet indebtedness for borrowed money
through a special purpose vehicle or otherwise.

     Section 5.15 Legal Compliance. Parent and each of its Subsidiaries have complied with
all Applicable Laws and Orders of any Governmental Body except where the failure to comply would
not have a Material Adverse Effect on Parent. Neither Parent nor any of its Subsidiaries has
received any written notice of, and Parent has no Knowledge of, any violation of a material nature
of any Applicable Laws and/or Orders applicable to Parent or any of its Subsidiaries. Except as
set forth on Schedule 5.15 of the Parent Disclosure Schedules, none of Parent nor any of its
Subsidiaries has outstanding securities that are required to be registered under the Exchange Act.

     Section 5.16 Affiliate Transactions. No Parent stockholder and no Affiliate of any
Parent stockholder or of Parent or its Subsidiaries has, or has had since July 31, 2007, any (A)
material business arrangement or relationship with Parent or any of its Subsidiaries, or (B)
interest in any material asset, real or personal, tangible or intangible, of Parent or any of its
Subsidiaries. Since July 31, 2007 through the date hereof, there has been no material change in
the intercompany agreements between Parent or its Subsidiaries, on the one hand, and any of their
Affiliates, on the other hand. There are no assets owned by any Affiliate of Parent or its
Subsidiaries that are used in the business of Parent and its Subsidiaries.

     Section 5.17 SEC Filings; Nasdaq; Information Supplied; S-3 Eligibility.

               (a) Parent has timely filed with the SEC all forms, statements, reports, prospectuses and
other documents (including exhibits and all other information incorporated by reference) required
to be filed by it with the SEC since August 1, 2005, (i) all of which complied when filed in all
material respects with all Applicable Law and (ii) none of which contained, when filed, any untrue
statement of material fact or omitted to state a material fact required to be

40

 

stated therein or
necessary to make the statements made therein, in the light of the circumstances under which they
were made and at the time they were made, not misleading. Parent Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq Capital Market. Parent
is in compliance with the continued listing requirements of the Nasdaq Marketplace Rules and has
taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Parent Common Stock under the Exchange Act or delisting the Parent Common
Stock from the Nasdaq Capital Market. Parent knows of no reason why the shares of Parent Common
Stock issuable upon conversion of the Parent Series A
Preferred Stock constituting the Stock Portion of the Merger Consideration will not be
eligible for listing on the Nasdaq Capital Market. None of Parent’s Subsidiaries is required to
file any forms, reports or other documents with the SEC.

          (b) Parent satisfies the eligibility requirements for filing a registration statement on Form
S-3, including but not limited to the “Registrant Requirements” of General Instruction I.A. to Form
S-3, and no fact, circumstance or condition exists that could be reasonably likely to (i) cause
Parent to become ineligible to file a registration statement on Form S-3 or (ii) delay or hinder
the filing of the Registration Statement or Parent’s Annual Report on Form 10-K for the year ending
July 31, 2007.

     Section 5.18 Solvency. (i) The fair value of the properties of Parent (on a
consolidated basis with its Subsidiaries) exceeds its debts and liabilities, subordinated,
contingent or otherwise, (ii) the present fair saleable value of the property of Parent (on a
consolidated basis with its Subsidiaries) is greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured, (iii) Parent (on a consolidated
basis with its Subsidiaries) is able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, and (iv) Parent (on a
consolidated basis with its Subsidiaries) does not have unreasonably small capital with which to
conduct its business in which it is engaged as such business is now conducted and is proposed to be
conducted following the Closing Date. No fact, circumstance or condition exists that could be
reasonably likely to render Parent insolvent or impede Parent’s ability to redeem the Parent Series
A Preferred Stock in accordance with the Certificate of Designations.

     Section 5.19 Disclaimer of Other Representations and Warranties. Except as expressly
set forth in Article 5 or in the Parent Disclosure Schedules or any certificate furnished or to be
furnished to the Company pursuant hereto, neither Parent nor any of its Affiliates nor any Person
acting on their behalf makes, or shall be deemed to have made, any representation or warranty,
express or implied, relating to Parent, its Subsidiaries, Parent’s business or any other matter,
including any representation or warranty as to merchantability, habitability, workmanship,
profitability, future performance, fitness for a particular purpose or non-infringement, whether or
not contained in any document or other communication provided or otherwise made available to the
Company or any Person acting on behalf of the Company during the course of due diligence or
otherwise (including, without limitation, in any management presentations, information or offering
memorandum, supplemental information, data room, estimate, projection, forecast, budget or other
forward-looking information or other materials or information with respect to any of the above).

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ARTICLE 6

PRE-CLOSING COVENANTS

     Section 6.01 Reasonable Best Efforts.

          (a) Subject to Section 6.01(b), the Company and Parent shall each cooperate with the other and
use (and shall cause their respective Subsidiaries to use) their respective reasonable best efforts
to promptly (i) take or cause to be taken all necessary actions, and do or cause to be done all
things, necessary, proper or advisable under this Agreement and the Ancillary Documents and
Applicable Laws and regulations to consummate and make effective the Merger and the Transactions as
practicable, including, without limitation, preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements, registrations,
submissions of information, applications and other documents (including, without limitation, any
required filings under the HSR Act, (ii) obtain all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained pursuant to this Agreement,
including from any Third Party necessary, proper or advisable to consummate the Merger and the
Transactions, and (iii) execute and deliver such documents, certificates and other papers as a
Party may reasonably request to evidence the other Party’s satisfaction of its obligations
hereunder. Subject to Applicable Laws relating to the exchange of information and in addition to
Section 6.01(c), the Parties shall have the right to review in advance, and, to the extent
practicable, each will consult the other on, all the information relating to the Company and its
Subsidiaries or Parent and its Subsidiaries, as the case may be, that appears in any filing made
with, or written materials submitted to, any Third Party and/or any Governmental Body in connection
with the Merger and the Transactions.

          (b) Without limiting Section 6.01(a), each Party shall:

               (i) use its reasonable best efforts to avoid the entry of, or to have vacated or terminated,
any Order that would restrain, prevent or delay the Closing or any Transaction, including, without
limitation, defending through litigation or arbitration on the merits any claim asserted in any
court by any Person; and

               (ii) use its reasonable best efforts to avoid or eliminate each and every impediment under the
HSR Act that may be asserted by any Governmental Body with respect to the Merger and the
Transactions related thereto so as to enable the Closing to occur as soon as reasonably possible.

          (c) Each Party shall keep the other Party reasonably apprised of the status of matters
relating to the completion of the Merger and the Transactions and work cooperatively in connection
with obtaining all required approvals or consents of any Governmental Body (whether domestic,
foreign or supranational). In that regard, each Party shall without limitation: (i) promptly
notify the other Party of, and if in writing, furnish the other Party with copies of (or, in the
case of material oral communications, advise the other orally of) any communications from or with
any Governmental Body with respect to the Merger and the Transactions, (ii) permit the other Party
to review and discuss in advance, and consider in good faith the views of the other Party in
connection with, any proposed written (or any material proposed oral)
communication with any

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such Governmental Body, (iii) not participate in any meeting with any
such Governmental Body unless it consults with the other Party in advance and to the extent
permitted by such Governmental Body gives the other the opportunity to attend and participate
thereat, (iv) furnish the other Party with copies of all correspondence, filings and communications
(and memoranda setting forth the substance thereof) between it and any such Governmental Body with
respect to this Agreement, the Ancillary Documents, the Merger and the Transactions, and (v)
furnish the other Party with such necessary information and reasonable assistance as Parent or the
Company may reasonably request in connection with its preparation of necessary filings or
submissions of information to any such Governmental Body.

     Section 6.02 Operation of Business. Except (i) for the consummation of the
Transactions, (ii) as set forth on Schedule 6.02 of the Company Disclosure Schedules or as
otherwise expressly contemplated by this Agreement or any Ancillary Document, or (iii) to the
extent consented to by Parent, during the period from the date hereof and continuing until the
earlier of the termination of this Agreement or the Effective Time, the Company shall conduct its
business in the Ordinary Course of Business. The Company agrees to pay debts and Taxes when due
unless subject to good faith dispute, to pay or perform other obligations in the Ordinary Course of
Business subject to good faith disputes over whether payment or performance is owing, and to use
all commercially reasonable efforts, consistent with past practices and policies, to preserve its
present business organizations, keep available the services of its key employees and preserve its
relationships with key customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it. The Company shall promptly notify Parent of any event or occurrence
that the Company receives Knowledge of, and which the Company believes would have a Material
Adverse Effect on the Company. Without limiting the generality of the foregoing, except as set
forth in Schedule 6.02 of the Company Disclosure Schedules or expressly contemplated by this
Agreement or any Ancillary Documents, from the date hereof until the Effective Time the Company
shall not without the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed):

               (i) adopt or propose any change to the Company Certificate or the Company’s bylaws or other
organizational documents;

               (ii) merge or consolidate with any other Person or acquire a material amount of stock or
assets of any other Person or effect any business combination, recapitalization or similar
transaction;

               (iii) acquire, sell, lease, license or otherwise dispose of any material Subsidiary or any
material amount of assets, securities or property except (A) pursuant to existing Contracts or
commitments or (B) in the Ordinary Course of Business;

               (iv) except as contemplated by Section 3.01(b) of this Agreement, declare, set aside or pay
any dividend or other distribution with respect to the capital stock of the Company;

               (v) create or incur any Encumbrance on any material asset other than (A) in the Ordinary
Course of Business or (B) Permitted Encumbrances;

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               (vi) make any material loan, advance or capital contribution to or investment in any Person
other than loans, advances or capital contributions to, or investments in, its wholly-owned
Subsidiaries in the Ordinary Course of Business other than employee loans not in excess of One
Hundred Thousand Dollars ($100,000) in the aggregate;

               (vii) change any method of accounting or accounting principles or practice, except for any
such change required by reason of a concurrent change in GAAP;

               (viii) make any loan, advance or capital contribution to or investment in any Person other
than loans, advances or capital contributions to, or investments in, its wholly-owned Subsidiaries
in the Ordinary Course of Business or create, incur or assume any indebtedness for borrowed money
under the Credit Agreement not currently outstanding; assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for the obligations of
any other Person; or make any loans, advances or capital contributions to, or investments in, any
other Person;

               (ix) amend any material term of any outstanding security of the Company or any of its
Subsidiaries;

               (x) other than pursuant to existing agreements relating to the Options or Warrants, issue,
deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of capital
stock of any class or other equity interests of, or any securities convertible into, or any rights,
warrants, calls, subscriptions or options to acquire, any such shares, equity interests, or
convertible securities;

               (xi) settle any legal proceedings;

               (xii) enter into, amend, terminate or waive any rights under any Material Contract other than
in the Ordinary Course of Business;

               (xiii) enter into or amend any operating or capital lease;

               (xiv) make or commit to make any capital expenditure in excess of amounts set forth in the
Company’s budget previously made available to Parent;

               (xv) except with respect to the Employee Transaction Bonuses, enter into, adopt or amend any
Employee Benefit Plan or increase in any manner the compensation or fringe benefits of, or modify
the employment terms of, its directors, officers or employees, generally or individually;

               (xvi) except as contemplated by this Agreement, make any payment or incur any liability other
than in the Ordinary Course of Business; or

               (xvii) agree or commit to do any of the foregoing.

     Section 6.03 Publicity. Except as otherwise required herein, the Parties shall use
their reasonable efforts to (i) develop a joint communication plan with respect to this Agreement,
the Merger and the Transactions, (ii) ensure that all press
releases and other public statements with

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respect to this Agreement or the Transactions shall
be consistent with such joint communication plan, and (iii) consult promptly with each other prior
to issuing any press release or otherwise making any public statement with respect to the Merger
and the Transactions, provide to the other Party for review a copy of any such press release or
statement, and not issue any such press release or make any such public statement without the other
Party’s consent, unless required by Applicable Law or any listing agreement with or rules and
regulations of a securities exchange.

     Section 6.04 Access. The Company shall permit, and shall cause each of its
Subsidiaries to permit, representatives of Parent (including legal counsel and accountants) to
have, upon prior written notice, reasonable access during normal business hours and under
reasonable circumstances, and in a manner so as not to interfere with the normal business
operations of the Company and its Subsidiaries, to the premises, personnel, books, records
(including Tax records), Contracts, and documents of or pertaining to the Company and each of its
Subsidiaries. Neither Parent, Merger Sub nor any of their respective representatives shall contact
any employee, customer, supplier or landlord of the Company or any of its Subsidiaries without the
prior written consent of an officer of the Company. Parent and Merger Sub shall comply with, and
shall cause their respective representatives to comply with, all of their obligations under the
Confidentiality Agreement (the “Confidentiality Agreement”) by and between the Company and
Parent with respect to the terms and conditions of this Agreement and the Transactions and the
Company information disclosed pursuant to this Section 6.04, which agreement will remain in full
force and effect until the Effective Time, and shall survive termination of this Agreement.

     Section 6.05 Stockholder Consent. Subject to Section 6.06, (a) the Company shall use
its reasonable best efforts to solicit, and shall use its reasonable best efforts to obtain,
written consents (“Written Consents”) from all the Company Stockholders within two (2)
Business Days after the execution of this Agreement for purposes of obtaining the Requisite
Stockholder Approval and (b) the Company’s Board shall declare the advisability of this Agreement
and recommend the adoption of this Agreement and the approval of the Merger and the Transactions by
the Common Stockholders. The Company shall mail or deliver an information statement (the
“Information Statement”) to all stockholders of the Company as of the record date under
Delaware law. Prior to the distribution of any solicitation materials, including the Information
Statement, or any amendment or supplement thereto, Parent and its counsel shall be provided copies
of such materials not produced or provided by Parent for such purpose and shall be provided a
reasonable opportunity to review and comment thereon. The Information Statement shall constitute a
disclosure document for the offer and issuance of the shares included in the Stock Portion of the
Merger Consideration to be received by the holders of the Company’s capital stock in the Merger.
Parent shall promptly provide all information relating to its business and operations necessary for
inclusion in the Information Statement to satisfy all requirements of applicable federal and state
securities laws. The information supplied by Parent for inclusion in the Information Statement
shall not, at the time the Information Statement is first mailed to the holders of capital stock of
the Company and at the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein not misleading. No representation is made by the Company with respect to statements made
in the Information Statement regarding the Company based on information supplied by an officer or
director of Parent or Merger Sub who is at such time an
officer or director of the Company. The Company will promptly advise Parent, and Parent will

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promptly advise the Company, in writing if at any time prior to the Effective Time either Parent or
the Company shall obtain knowledge of any facts that might make it necessary or appropriate to
amend or supplement the Information Statement in order to make the statements contained or
incorporated by reference therein not misleading or to comply with applicable law.

     Section 6.06 No Solicitation.

          (a) The Company shall not, nor shall it authorize or permit any of its Subsidiaries to, nor
shall it authorize or permit any officer, director or employee of, or any investment banker,
attorney or other advisor or representative (collectively, “Advisors”) of, the Company or
any of its Subsidiaries to knowingly or intentionally, (i) directly or indirectly solicit, initiate
or encourage the submission of, any Acquisition Proposal (as defined below), (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) directly or indirectly participate in
any substantive discussions or negotiations regarding, or furnish to any Person any Confidential
Information with respect to, or take any other action to facilitate the making of an Acquisition
Proposal; provided, however, that the Company may, in response to an unsolicited
Acquisition Proposal made after the date of this Agreement which did not result from a knowing
breach of this Section 6.06(a), (x) furnish information with respect to the Company to the Person
making such Acquisition Proposal and its Advisors pursuant to a customary confidentiality agreement
not less restrictive of the other Party than the Confidentiality Agreement, and (y) if the Board of
Directors of the Company determines, in good faith, after consultation with outside legal counsel
and financial advisors, that the Acquisition Proposal is or would reasonably be expected to lead to
a Superior Proposal (as defined below), participate in discussions or negotiations with such Person
and its Advisors regarding such Acquisition Proposal and delay solicitation of the Requisite
Stockholder Approval and the mailing of solicitation materials for the purposes of obtaining the
Requisite Stockholder Approval, in each case, for such time as the Board of Directors determines is
necessary to complete the actions contemplated by clauses (x) and (y) above with respect to such
Superior Proposal. For the avoidance of doubt, a Company Stockholder shall not be considered an
“Advisor” for purposes of Section 6.06 as long as such stockholder is not acting in concert
with the Company or any other Advisor of the Company in a manner that would otherwise be prohibited
under this Section 6.06. Upon execution of this Agreement, the Company shall cease immediately and
cause to be terminated any and all existing discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal and promptly request that all confidential
information with respect thereto furnished on behalf of the Company be returned.

          (b) Neither the Board of Directors of the Company nor any committee thereof shall (i) approve
any letter of intent, agreement in principle, acquisition agreement or similar agreement relating
to any Acquisition Proposal, or (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal. Notwithstanding the foregoing, if the Board of Directors of
the Company receives a Superior Proposal that was not knowingly solicited by the Company in
violation of Section 6.06(a), and as a result thereof the Board of Directors of the Company
determines, in good faith, after consultation with outside legal counsel, that accepting such
Superior Proposal or recommending such Superior Proposal to the Common Stockholders is consistent
with their fiduciary obligations, the Board of Directors of the Company may (A) terminate this
Agreement pursuant to Section 9.01(e), (B) change or
modify its recommendation to the Common Stockholders with respect to the Merger and the

46

 

Transactions, and/or (C) may recommend such Superior Proposal to the Common Stockholders and may
authorize the Company immediately thereafter to enter into an agreement with respect to such
Superior Proposal, but only (x) at a time that is not less than 48 hours after the time following
the Company’s delivery to Parent of written notice advising Parent that Board of Directors of the
Company is prepared to approve a Superior Proposal, identifying the Person making such Superior
Proposal and otherwise complying with this Section 6.06(b) and (y) after taking into full account
any proposal by Parent to amend the terms or conditions of the Merger and this Agreement.

          (c) The Company promptly (but in no event later than 24 hours after learning of an Acquisition
Proposal) shall advise Parent orally and in writing of any Acquisition Proposal and the material
terms and conditions of any such Acquisition Proposal. The Company shall keep Parent reasonably
informed of the status (including any change to the material terms thereof) of any such Acquisition
Proposal.

          (d) Nothing contained in this Section 6.06 shall prohibit the Company from complying with Rule
14e-2 or such other securities regulations promulgated under the Exchange Act, if such provisions
are applicable to the Company, with regard to an Acquisition Proposal or from making any disclosure
to the Company Stockholders if, in the good faith judgment of the Board of Directors of the
Company, after consultation with outside counsel, failure so to disclose would be inconsistent with
its obligations under Applicable Law.

          (e) Notwithstanding anything to the contrary in this Section 6.06, the fact that the Company
or any of its Subsidiaries has had discussions or negotiations with Persons prior to the date of
this Agreement regarding a possible Acquisition Proposal shall not prevent the Company from taking
any of the actions specified in this Section 6.06 with respect to a new Acquisition Proposal that
was submitted by such a Person after the date of this Agreement and was not solicited in violation
of Section 6.06(a).

          (f) For purposes of this Agreement: (i) “Acquisition Proposal” means (i) any written
proposal or offer for a merger, consolidation, dissolution, recapitalization or other business
combination involving the Company, (ii) any written proposal or offer for the issuance by the
Company of over 20% of its equity securities as consideration for the assets or securities of
another Person or (iii) any written proposal or offer to acquire in any manner, directly or
indirectly, over 20% of the equity securities or consolidated total assets of the Company, in each
case other than the Merger or the exercise of Options and Warrants outstanding on the date hereof
and in accordance with all of their respective terms and conditions on the date hereof and from a
Third Party other than Parent or Merger Sub; and (ii) “Superior Proposal” means any
Acquisition Proposal to acquire all or substantially all of the equity securities or assets of the
Company, pursuant to a tender or exchange offer, a merger, a consolidation, a liquidation or
dissolution, a recapitalization, a sale of all or substantially all its assets or otherwise, which
the Board of Directors of the Company determines in good faith, after consultation with outside
legal counsel and financial advisors, if completed on the terms proposed, would be more favorable
to the Company Stockholders than the Merger, taking into account (i) all of the terms and
conditions of such proposal and this Agreement (including any proposal by Parent to amend the terms
of the Merger) and (ii) such other factors (in addition to price) as the Board of

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Directors reasonably considers to be relevant (including, for example, legal, regulatory, and
timing factors).

     Section 6.07 Cooperation for Payoff Amount. The Company shall cooperate with and
provide Parent with the assistance necessary to obtain a written payoff letter and wire transfer
instructions from the Lender, specifying the amount required to repay the full amount of the Lender
Debt, and all accrued interest thereunder up to and including the Closing Date, and the account or
accounts to which such payments shall be made, as contemplated by Section 3.01(c)(i) above.

     Section 6.08 Financing.

          (a) Parent and Merger Sub shall use their reasonable best efforts to (i) satisfy all
conditions applicable to Parent and Merger Sub in the Parent Credit Agreement; and (ii) consummate
the Financing no later than two (2) Business Days after the date hereof. Solely in the event that
any portion of the Financing becomes unavailable on the terms and conditions contemplated in the
Parent Credit Agreement, Parent shall use its reasonable best efforts to obtain any such
unavailable portion from alternative sources on comparable or more favorable terms to Parent (as
determined in the reasonable good-faith judgment of Parent) as promptly as practicable following
the occurrence of such event but in no event later than two (2) Business Days after the date
hereof. Parent shall promptly provide the Company with the documentation evidencing the
alternative sources of financing and shall give the Company prompt notice (but in any event within
two (2) Business Days) of any material breach by any party to the Parent Credit Agreement or any
termination of the Parent Credit Agreement. Parent shall keep the Company informed on a reasonably
current basis in reasonable detail of the status of its efforts to arrange for a replacement
Financing, if necessary, and shall not permit any material amendment or modification to be made to,
or any waiver of any material provision or remedy under, the Parent Credit Agreement (or
replacement thereof) without first consulting with the Company or, if such amendment or
modification would or would be reasonably expected to prevent, delay or hinder Parent and/or Merger
Sub’s ability to consummate the transactions contemplated by this Agreement, without first
obtaining the Company’s prior written consent which shall not be unreasonably withheld, conditioned
or delayed. For the avoidance of doubt, if a replacement Financing (or any alternative financing)
has not been obtained, Parent and Merger Sub shall continue to be obligated to consummate the
Merger on the terms contemplated by this Agreement and subject only to the satisfaction or waiver
of the conditions set forth in Sections 8.01 and 8.02.

          (b) The Company shall and shall cause its Subsidiaries and their respective representatives to
provide all reasonable cooperation in connection with the arrangement of the Financing as may be
reasonably required by Parent; provided that such requested cooperation does not
unreasonably interfere with the ongoing operations of the Company and its Subsidiaries. Parent
shall, promptly upon request by the Company, reimburse the Company for all reasonable out-of-pocket
costs incurred by the Company or the Subsidiaries in connection with such cooperation. Parent and
Merger Sub shall, on a joint and several basis, indemnify and hold harmless the Company, its
Subsidiaries and their respective Representatives for and against any and all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by
them in connection with the arrangement of the Financing and

48

 

any information utilized in connection therewith. Notwithstanding anything to the contrary,
the condition set forth in Section 8.02(b) of this Agreement, as it applies to the Company’s
obligations under this Section 6.08(b), shall be deemed satisfied unless the Financing (or any
alternative financing) has not been obtained primarily as a result of the Company’s willful and
material breach of its obligations under this Section 6.08(b).

          (c) All Confidential Information regarding the Company and its Subsidiaries obtained by Parent
or its Representatives pursuant to Section 6.08(b) above shall be kept confidential in accordance
with the Confidentiality Agreement.

     Section 6.09 Parent Dividends; Changes in Stock. Except as set forth on Schedule 6.09
of the Parent Disclosure Schedules, during the period from the date hereof and continuing until the
earlier of the termination of this Agreement or the Closing, without prior written consent of the
Representative, Parent shall not, nor shall it cause or permit any of its Subsidiaries to, or
propose to, (i) declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except for dividends paid or to be paid to Parent by a wholly owned Subsidiary
of Parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance or authorization of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock or (iii) repurchase, redeem or otherwise acquire, or
permit any Subsidiary to redeem, purchase or otherwise acquire, any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital stock.

     Section 6.10 Parent Governing Documents. During the period from the date hereof and
continuing until the earlier of the termination of this Agreement or the Closing, without prior
written consent of the Representative, Parent shall not amend or propose to amend its certificate
of incorporation, bylaws or the Certificate of Designations (including by way of plan of
consolidation, merger or reorganization), or file any certificate of designations other than the
Certificate of Designations.

ARTICLE 7

POST-CLOSING COVENANTS

     Section 7.01 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties shall take such further
action (including the execution and delivery of such further instruments and documents) as the
other Party reasonably may request, all at the sole cost and expense of the requesting Party.

     Section 7.02 Employee Matters.  

          (a) The Surviving Corporation shall honor the obligations of the Company and its Subsidiaries
under the provisions of any employment agreements and other similar Contracts between the Company,
or any of its Subsidiaries and any employee of the Company or any of its Subsidiaries. At or
immediately prior to the Closing, the Company shall pay all Employee Transaction Bonuses as set
forth on Schedule 7.02(a)(i). After the Closing, at the time
and in accordance with the terms set forth on Schedule 7.02(a)(ii), Parent and the Company
shall pay all amounts payable under the Company’s performance bonus plan as set forth on Schedule
7.02(a)(ii).

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          (b) From and after the Effective Time, Parent agrees to provide, or cause the Surviving
Corporation and its Subsidiaries to provide, each employee of the Company or any of its
Subsidiaries with employee benefits plans, programs and arrangements that are substantially similar
and not materially less favorable in the aggregate than the employee benefits plans, programs and
arrangements maintained by Parent and its Subsidiaries and made available to the employees of the
Parent and its Subsidiaries (“Comparable Benefits”) (it being understood that Parent may
elect to (i) provide each employee of the Company or any of its Subsidiaries with Comparable
Benefits through coverage under Parent’s employee benefits plans, programs and arrangements, (ii)
cause the Surviving Corporation to provide each employee of the Company or any of its Subsidiaries
with Comparable Benefits through continued coverage under the Company’s and its Subsidiaries’
employee benefits plans, programs and arrangements or (iii) provide each employee of the Company or
any of its Subsidiaries with Comparable Benefits through a combination of coverage under Parent’s
employee benefits plans, programs and arrangements and continued coverage under the Company’s and
its Subsidiaries’ employee benefits plans, programs and arrangements); provided,
however, that the aggregate value of the employee benefit plans, programs and arrangements
provided by Parent to employees of the Company and any of its Subsidiaries for the one-year period
following the Effective Time shall not be materially less than the value of such benefits provided
to employees of the Company and any of its Subsidiaries in effect immediately prior to the Closing
Date, which obligation of the Parent may be satisfied, at its election, by increasing compensation
or providing bonuses to such employees. For the purpose of determining the aggregate value of the
employee benefit plans, programs and arrangements provided by Parent to employees of the Company
and any of its Subsidiaries, the value of the stock options issued under Parent’s stock option plan
shall be consistent with the values used in Parent’s audited financial statements.

          (c) Notwithstanding, and in clarification of, the foregoing, with respect to each benefit
plan, program, practice, policy or arrangement maintained by Parent or the Company and in which any
of the employees become eligible to participate (the “Parent Plans”), for purposes of
determining eligibility to participate, vesting and benefit accrual, service with the Company and
its Subsidiaries (or predecessor employers to the extent the Company provides past service credit)
shall be treated as service with Parent and/or any of its applicable Subsidiaries;
provided, however, that such service shall not be recognized to the extent that
such recognition would result in a duplication of benefits. Such service also shall apply for
purposes of satisfying any waiting periods or evidence of insurability requirements. Parent shall
use its commercially reasonable efforts to cause each of the applicable Parent Plans to (i) waive
all limitations as to pre-existing condition exclusions, evidence of insurability requirements and
waiting periods with respect to participation and coverage requirements applicable to employees
under the Parent Plans, except to the extent such limitations, evidence of insurability and waiting
periods were applicable to such employee under a comparable Employee Benefit Plan, and (ii) give
employees and their eligible dependents credit under the Parent Plans for amounts paid during the
year in which the Effective Time occurs under a corresponding Employee Benefit Plan for purposes of
satisfying any applicable deductibles, co-payments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and conditions of
the Parent Plans.

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     Section 7.03 Directors’ and Officers’ Indemnification.

          (a) From and after the Effective Time, Parent and the Surviving Corporation, jointly and
severally, shall indemnify and hold harmless each present and former director, officer, manager or
managing director of the Company and each Subsidiary of the Company and each such Person who served
at the request of the Company or any Subsidiary of the Company as a director, officer, trustee,
partner, fiduciary, employee or agent of another corporation, partnership, joint venture, trust,
pension or other Employee Benefit Plan or enterprise (collectively, the “Company Indemnified
Parties”) against all costs and expenses (including, without limitation, reasonable attorneys’
fees), judgments, fines, losses, claims, damages, liabilities and settlement amounts paid in
connection with any claim, action, suit, Proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative, criminal or investigative, arising out of
or pertaining to any action or omission solely in their capacities as directors, officers,
managers, managing directors, trustees, partners, fiduciaries, employees or agents, in each case
occurring at or before the Effective Time (including, without limitation, the Merger and the
Transactions), in each case, to the fullest extent permitted by Applicable Law. The foregoing
shall not under any circumstances apply to indemnify and hold harmless any Company Indemnified
Party against any indemnification claims that such Company Indemnified Party is otherwise obligated
to satisfy pursuant to Section 10.01.

          (b) From and after the Effective Time, Parent shall cause the certificates of incorporation
and bylaws of the Surviving Corporation and its Subsidiaries to contain provisions with respect to
exculpation, indemnification and expense reimbursement that are at least as favorable to the
Company Indemnified Parties as those contained in the Company Certificate and the bylaws of the
Company or the articles of association, bylaws or other organizational documents of any of its
Subsidiaries as in effect on the date hereof.

          (c) For a period of six (6) years after the Effective Time, Parent shall cause to be
maintained in effect directors’ and officers’ liability insurance policies that are comparable to
the directors’ and officers’ liability insurance policies currently maintained by the Company, such
policies to be paid in full by the Company prior to the Closing, with respect to claims arising
from facts or events that occurred at or prior to the Effective Time (provided that Parent may
substitute therefor policies reasonably satisfactory to the Company Indemnified Parties of at least
the same coverage containing terms and conditions that, in the aggregate, are no less
advantageous).

          (d) In the event the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and is not the continuing or surviving
corporation or entity in such consolidation or merger, or (ii) transfers all or substantially all
of its properties and assets to any Person, then, and in each case, proper provision shall be made
so that the successors and assigns of the Surviving Corporation honor the indemnification and other
obligations set forth in this Section 7.03.

          (e) Each Company Indemnified Party shall have rights as a third party beneficiary under this
Section 7.03 as separate contractual rights for his or her benefit, in addition to and not in
substitution of any other rights to indemnification or contribution that any such Company
Indemnified Party may have by contract or otherwise, and all such rights herein

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and otherwise shall
be enforceable by such Company Indemnified Party, his or her heirs and personal representatives and
shall be binding on Parent, the Surviving Corporation and their successors and assigns.

     Section 7.04 Consents and Approvals. The Company shall use its commercially
reasonable efforts to cause to be delivered to Parent all consents and approvals necessary from the
independent certified public accountants of the Company and its Subsidiaries to allow Parent to
incorporate, utilize, publish or otherwise disclose the Company Financial Statements in order to
facilitate Parent’s reporting requirements with any Governmental Body in accordance with Applicable
Law, including the United States Securities and Exchange Commission.

     Section 7.05 Tax Matters.

          (a) Post-Closing Tax Return Filings; Indemnification.

               (i) Parent shall prepare and timely file (or cause to be prepared and timely filed) with the
appropriate Taxing Authorities all Tax Returns required to be filed by the Company and its
Subsidiaries with respect to any taxable period beginning before the Closing Date that are due
after the Closing Date (each a “Parent Return”). Each such Tax Return shall be prepared in
a manner consistent with the prior practice of the Company and its Subsidiaries unless otherwise
required by applicable Tax laws or specified in Schedule 7.05.

               (ii) No liability in respect of Tax shown on any Parent Return shall be considered to
constitute a Loss subject to indemnity pursuant to Section 10.01 unless Parent shall have provided
the Representative with a copy of such Parent Return for review and comment at least twenty (20)
days prior to the filing of such Tax Return (or, if required to be filed within twenty (20) days
after the Closing or the end of the taxable period to which such return relates, as soon as
reasonably possible following the Closing or the end of such taxable period, as the case may be),
accompanied by a statement (a “Pre-Closing Tax Statement”) setting forth and calculating in
reasonable detail the Pre-Closing Taxes (as defined below) and Indemnified Taxes that are shown as
due on such Tax Return. The “Indemnified Taxes” shall mean the excess of the Pre-Closing
Taxes over the amount of such Pre-Closing Taxes that were reflected as liabilities in the Company
Financial Statements or incurred by the Company after the Company Balance Sheet Date as a result of
any transaction that was not in breach of Section 4.08 or Section 6.02; provided that Indemnified
Taxes shall not include any amount of Tax liability attributable to periods through the Company
Balance Sheet Date that was not reflected on the Company Balance Sheet, if the omission of such
amount did not cause the Company Balance Sheet to fail to be prepared in accordance with GAAP.

               (iii) If the Representative disagrees with the manner of preparation of a Parent Return or the
amount of Pre-Closing Taxes or Indemnified Taxes calculated in the Pre-Closing Tax Statement,
within fifteen (15) days of the receipt of Parent Return and Pre-Closing
Tax Statement the Representative shall provide to Parent a notice of such dispute (a “Tax
Statement Dispute”). If the Representative does not provide a notice of Tax Statement Dispute
within such 15-day period, the Representative shall be deemed to have accepted the Tax Return and
Pre-Closing Tax Statement relating thereto for purposes of Article 10. If the Representative
provides Parent with a notice of a Tax Statement Dispute, the Representative shall also provide

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Parent with a written explanation of the reasons for its disagreement. The Representative shall
have the right to review and approve (which approval shall not be unreasonably withheld or delayed)
each such Tax Return so provided. For this purpose, the Representative’s withholding of timely
approval of a Tax Return based upon Parent’s failure to adopt in such Tax Return an alternative
reporting position suggested by the Representative shall be deemed reasonable if the reporting
position proposed by the Representative on such Tax Return has a “reasonable basis,” as defined in
section 6662 of the Code. Parent and the Representative shall attempt to resolve their
disagreement within the five (5) days following the Representative’s notification to Parent of a
Tax Statement Dispute. If the Representative and Parent cannot reach complete agreement within
fifteen (15) days, they each shall select a Tax expert from their outside accounting firm or law
firm knowledgeable in the area of the dispute, and such experts shall attempt to resolve the
differences. Each Party shall be responsible for the costs and fees of its Tax expert. If Parent
and the Representative are unable to resolve their disagreement through their Tax experts, Parent
and the Representative shall jointly select an arbiter from a nationally recognized independent
public accounting firm that is not the independent auditor of any of Parent, the Company, the
Surviving Corporation or any of their Subsidiaries; if Parent and the Representative are unable to
select an arbiter within such time period, the American Arbitration Association shall make such
selection (the person so selected shall be referred to herein as the “Tax Arbitrator”).
The Tax Arbitrator so selected will only consider those matters as to which Parent and the
Representative have disagreed. Neither Parent nor the Representative shall have or conduct any
communication, either written or oral, with the Tax Arbitrator without the other of them either
being present or receiving a concurrent copy of any written communication. The Tax Arbitrator
shall resolve each item of disagreement based solely on the presentations and supporting material
provided by Parent and the Representative and not pursuant to any independent review (the
foregoing, however, shall not preclude the Tax Arbitrator from independent research of facts or
determining proper application of GAAP or the terms of this Agreement with respect to the subject
matter of the objections and disagreement between Parent and the Representative). The fees and
expenses of the Tax Arbitrator incurred in connection with the determination of the disputed items
by the Tax Arbitrator shall be borne by Parent and the Representative in an amount proportionate to
the amount contested and not awarded to such Party as it bears to the total amount contested by the
Parties, as determined by the Tax Arbitrator. Parent shall, subject to indemnification pursuant to
Section 10.01, timely pay or cause to be paid the Tax shown as due on each such Tax Return.

                  (iv) Any Loss attributable to Indemnified Taxes shall be determined by reference to actual
losses or expenses of the Parent Indemnified Parties in the same manner as other Losses pursuant to
Article 10, and, for instance, shall be reduced by any Tax benefit which is correlative to the
incurring of or payment of such Indemnified Taxes. The amount of the Loss attributable to
Indemnified Taxes shown in any Pre-Closing Tax Statement as finally determined pursuant to the
preceding paragraph, shall be treated as a “Loss” that is indemnifiable pursuant to Section
10.01.

          (b) Taxable Year Closing; Allocation of Taxes. Parent shall, unless prohibited by
applicable law, cause the taxable periods of the Company and its Subsidiaries to end as of the
close of the Closing Date. Parent shall not permit the Company or any of its Subsidiaries to take
any actions after Closing on the Closing Date that are out of the Ordinary Course of Business,
except as required by this Agreement or consented to by the Representative. For purposes of this
Agreement, Taxes incurred by the Company or any of its Subsidiaries with

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respect to a taxable
period that includes but does not end on the Closing Date, shall be allocated to the portion of the
taxable period ending on the Closing Date: (i) except as provided in (ii) and (iii) below, to the
extent feasible, on a specific identification basis, according to the date of the event or
transaction giving rise to the Tax, and (ii) except as provided in (iii) below, with respect to
periodically assessed ad valorem Taxes and Taxes not otherwise reasonably allocable to specific
transactions or events, in proportion to the number of days in such period occurring through the
Closing Date compared to the total number of days in such taxable period, and (iii) in the case of
any Tax based upon or related to income or receipts, in an amount equal to the Tax which would be
payable if the relevant taxable period ended on the Closing Date. Any credits relating to a
taxable period that begins before and ends after the Closing Date shall be taken into account as
though the relevant taxable period ended on the Closing Date. All determinations necessary to give
effect to the foregoing allocations shall be made in a manner consistent with prior practices of
the Company and its Subsidiaries. For purposes of this Agreement, “Pre-Closing Taxes”
means all Taxes of the Company and its Subsidiaries attributable to taxable periods ending on or
before the Closing Date, and the Taxes allocable to the portion of a taxable period ending on the
Closing Date.

          (c) Tax Elections; Amended Returns. Except in connection with an audit resolved
pursuant to Section 7.05(e) (including consistent correlative adjustments to Tax Returns for
non-audited taxable periods), no Party or Affiliate of a Party may amend or cause the amendment of
a Tax Return of the Company or any of its Subsidiaries, or file or amend any Tax election, or file
a Tax Return after the due date thereof, concerning the Company or any of its Subsidiaries, in each
case, with respect to any taxable period that would affect the computation of Pre-Closing Taxes
without the written consent of the Representative, which consent shall not be unreasonably withheld
or delayed. Parent shall, upon request by the Representative, cooperate in the preparation of and
submission to the proper Taxing Authority of any amended Tax Return with respect to the Company or
any of its Subsidiaries for any taxable period beginning before the Closing Date which is necessary
to cause such Tax Return to be consistent with adjustments to a Tax Return for any other taxable
period proposed by a Taxing Authority, or which is otherwise required by law to be filed.

          (d) Overpayments of Pre-Closing Taxes. To the extent that any determination of Tax
liability, whether as the result of an audit or examination, a claim for refund, the filing of an
amended Tax Return or otherwise, results in a determination of an overpayment of Taxes related to
Taxes that were either (i) paid by the Company on or before the Closing Date, (ii) reflected as a
liability in the Company Financial Statements or (iii) paid from the Escrow Deposit pursuant to a
claim for indemnification under Section 10.01, Parent shall promptly pay an amount equal to such
overpayment or overaccrual, and any interest actually received thereon, to the Exchange Agent upon
receipt by (or crediting for the benefit of) Parent or its Affiliates (in the case of an
overpayment of Taxes), or upon a determination that such Tax is not required to be paid (in the
case of an overaccrual of Tax liability that was not yet paid at the time of such
determination), unless and to the extent that the entitlement to any refund or credit of such
overpayment was (x) taken into account in computing the amount of indemnified Loss in respect of
such Taxes, or (y) reflected as an asset in the Company Financial Statements. For the avoidance of
doubt, Parent shall not offset any Tax refunds from any Losses except with the prior written
consent of the Representative.

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          (e) Audits and Contests Regarding Taxes. Any Party who receives, or whose Affiliate
receives, any notice of a pending or Threatened Tax audit, assessment, or adjustment against or
with respect to the Company or any of its Subsidiaries which may give rise to a right to
indemnification from the Escrow Deposit pursuant to the terms of Article 10 shall promptly notify
the Representative of the receipt of such notice, and in no event in not more than ten (10)
Business Days from the receipt of such notice. Parent and the Representative each agree to consult
with and to keep the other informed on a regular basis regarding the status of any Tax audit or
proceeding to the extent that such audit or proceeding could affect a liability of the Parties or
the Company Stockholders (including indemnity obligations hereunder). The Representative shall
have the right to represent the Company’s or any of its Subsidiaries’ interests in any Tax audit or
administrative or judicial proceeding pertaining to taxable periods ending on or before the Closing
Date and to employ counsel of his choice, but reasonably satisfactory to Parent, at his expense,
and control the disposition of any issue involved in such proceeding; provided that Parent
shall have the right to participate in such proceeding at its own expense, and shall be entitled to
control the disposition of any issue involved in such proceeding which does not affect either a
potential liability of the Company Stockholders or claim for indemnity under Section 10.01. Both
Parent and the Company Stockholders (through the Representative) shall be entitled to represent
their own interests in light of their responsibilities (including indemnity obligations) for the
related Taxes, at their own expense, in any audit or administrative or judicial proceedings
involving a taxable period of the Company or any of its Subsidiaries that includes but does not end
on the Closing Date or involving both a taxable period of the Company or any of its Subsidiaries
ending on or before the Closing Date and a taxable period ending after the Closing Date, and no
such audit or proceeding may be settled or compromised by the Representative or Parent without the
consent of both the Representative and Parent, which consent shall not be unreasonably withheld.
Except as provided in this Section 7.05(e), the provisions of Article 10, including the provisions
therein addressing settlement authority, shall govern the manner in which Tax audit or
administrative or judicial proceedings are resolved.

          (f) Cooperation, Access to Information, and Records Retention. The Representative and
Parent shall cooperate as and to the extent reasonably requested by the other in connection with
the preparation and filing of Tax Returns as provided herein and any audit, litigation or other
proceeding with respect to Taxes relating to the Company or any of its Subsidiaries. Such
cooperation shall include the provision of records and information which are reasonably relevant to
any such Tax Return, audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of any material
provided hereunder. Parent agrees (i) to retain all books and records relevant to Taxes of the
Company and its Subsidiaries (including Tax Returns) relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations for assessment of Taxes
for such respective taxable period, and (ii) to give the Representative reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the Representative so requests, Parent shall allow the Representative to take
possession or copy of such books and records.

          (g) Tax Certificates. Parent and the Representative agree, upon request of the other,
to use all reasonable efforts to obtain any certificate or other document from any

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Governmental
Body as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including,
but not limited to, with respect to the Merger and the Transactions).

          (h) Tax Treatment of Merger. The Parties intend the Merger and LLC Merger
(collectively, the “Mergers”) together to qualify as a reorganization under Section
368(a)(1)(A) of the Code, and hereby adopt this Agreement as a “plan of reorganization” within the
meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a). In support of such Tax
treatment, the Parties hereto represent and covenant as follows:

               (i) Each of the Parties will report in their respective federal income Tax Returns for the
taxable period including the Closing Date that the Mergers together qualified as a reorganization
under Section 368(a)(1)(A) of the Code, and will properly file with their federal income Tax
Returns all information required by Treasury Regulations Section 1.368-3. No party hereto, unless
required by law, will take any Tax reporting position inconsistent with the characterization of the
Mergers as a reorganization within the meaning of Section 368(a) of the Code.

               (ii) Parent represents that it intends to continue at least one significant historic business
line of the Company, or use at least a significant portion of the Company’s historic business
assets in a business, so that the Mergers shall satisfy the continuity of business enterprise
requirement, in each case within the meaning of Treasury Regulations Section 1.368-1(d)

               (iii) Parent and Merger Sub represent that they have not taken and will not take any action,
either before or after the Closing, which could cause Mergers, taken together, to fail to qualify
as a reorganization within the meaning of Section 368(a)(1)(A) of the Code.

               (iv) Parent warrants that it will own all of the interests in the Successor LLC as of the
Second Effective Time, and that the Successor LLC, as of immediately after the Second Effective
Time, will have been treated as an entity disregarded as separate from its owner pursuant to
Treasury Regulations Section 301.7701-3(b)(1)(ii) at all times since the date of its formation, and
will have never made any election effective in any other taxing jurisdiction to be treated
differently than its federal tax status.

     Section 7.06 Integration. Parent shall not, and shall use its best efforts to ensure
that no Affiliate of Parent shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any securities (as defined in Section 2 of the Securities Act) of Parent or
any of its Affiliates that would be integrated with the offer or sale of the Parent Series A
Preferred Stock constituting the Stock Portion of the Merger Consideration in a manner that would
require the registration under the Securities Act of the sale of the Parent Series A Preferred
Stock constituting the Stock Portion of the Merger Consideration to the Company Stockholders
pursuant to this Agreement, or that would be integrated with the offer or sale of the Parent
Series A Preferred Stock constituting the Stock Portion of the Merger Consideration for purposes of
the Nasdaq Marketplace Rules.

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     Section 7.07 Furnishing of Information; Securities Laws Disclosure.

          (a) As long as any Company Stockholder owns any shares of Parent Series A Preferred Stock or
Parent Common Stock that was converted from Parent Series A Preferred Stock, Parent covenants to
timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by Parent after the Closing Date pursuant to the Exchange Act. As
long as any Company Stockholder owns any shares of Parent Series A Preferred Stock or Parent Common
Stock that was converted from Parent Series A Preferred Stock, if Parent is not required to file
reports pursuant to the Exchange Act, it will prepare and furnish to such Company Stockholders and
make publicly available in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the shares of Parent Series A Preferred Stock or Parent Common Stock, as
applicable, under Rule 144. Parent further covenants that it will take such further action as any
holder of Parent Series A Preferred Stock or Parent Common Stock that was converted from Parent
Series A Preferred Stock may reasonably request, to the extent required from time to time to enable
such Person to sell such securities without registration under the Securities Act within the
requirements of the exemption provided by Rule 144.

          (b) Parent shall issue a press release disclosing all material terms of the Merger and the
Transactions and file a Current Report on Form 8-K with the SEC disclosing all material terms of
the Merger and the Transactions (and attach as an exhibit thereto this Agreement) in accordance
with Applicable Law. Parent shall provide the Representative with a draft of such press release
prior to filing and provide an opportunity for comments. In addition, Parent will make such other
filings and notices related to the Merger and the Transactions in the manner and time required by
the SEC and the Nasdaq Marketplace Rules.

     Section 7.08 Conduct of Business. The business of Parent and its Subsidiaries shall
not be conducted in violation of Applicable Law, except where such violations would not result,
either individually or in the aggregate, in a Material Adverse Effect.

     Section 7.09 Reservation and Listing of Parent’s Stock. Parent has reserved out of
its authorized and unissued shares, and Parent shall continue to reserve out of its authorized and
unissued shares and keep available until the Closing Date, free of preemptive rights, the number of
shares of Parent Series A Preferred Stock that constitute the Stock Portion of the Merger
Consideration. Parent has reserved out of its authorized and unissued shares, and subject to the
terms and conditions set forth in Section 4(c) of the Certificate of Designations, Parent shall
continue to reserve out of its authorized and unissued shares and keep available at all times, free
of preemptive rights, (i) the maximum number of shares of payment-in-kind interest payments with
respect to the Parent Series A Preferred Stock (“PIK Shares”) that may be required to be
paid to holders of Parent Series A Preferred Stock in the subsequent ninety (90) day period and
(ii) a sufficient number of shares of Parent Common Stock for the purpose of effecting the
conversion of Parent Series A Preferred Stock into the requisite number of shares of Parent Common
Stock ((i) and (ii) together, the “Additional Shares”). Parent shall use its best efforts
to
comply with all requirements of the Nasdaq Marketplace Rules with respect to the issuance and
listing of Parent Common Stock (including the Additional Shares).

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     Section 7.10 Indebtedness. After the date hereof and until the date that all of the
Parent Series A Preferred Stock that constitutes the Stock Portion of the Merger Consideration
(including the PIK Shares) has been redeemed in full or converted into Parent Common Stock, without
the prior consent of the Representative, (i) Parent shall not, and shall not cause or permit any of
its Subsidiaries to, fail to duly observe and perform all of the covenants, conditions and
agreements expressly contained in Sections 6.01, 6.02 and 6.03 of the Credit Agreement, dated as of
June 8, 2007, as amended on August 9, 2007, among Parent, its Affiliates named therein and Canadian
Imperial Bank of Commerce, CIBC World Markets Corp., as sole lead arranger, documentation agent and
bookrunner, CIT Lending Services Corporation, as syndication agent and certain affiliated entities
(the “Parent Credit Agreement”), such observance and performance to be determined without
regard to any amendment, waiver or consent that may be received by Parent from any of the Lenders
or the Administrative Agent (as such terms are defined in the Parent Credit Agreement) or any
termination or replacement thereof, provided, that (A) Parent shall be permitted to incur Permitted
Subordinated Indebtedness (as such term is defined in the Parent Credit Agreement) only as long as
50% of the net proceeds therefrom are used immediately to redeem the Parent Series A Preferred
Stock that constitutes the Stock Portion of the Merger Consideration (including all PIK Shares)
pursuant to the Certificate of Designations, and (B) Parent shall be permitted to incur
Indebtedness in respect of Purchase Money Obligations (excluding Equity Interests) and Capital
Lease Obligations (as such terms are defined in the Parent Credit Agreement), and refinancings and
renewals thereof, up to Ten Million Dollars ($10,000,000) in the aggregate (which is Four Million
Dollars ($4,000,000) greater than the amount permitted under Section 6.01(e) of the Parent Credit
Agreement), and (ii) Parent shall not, and shall not cause or permit any of its Subsidiaries to,
take any action that could be reasonably likely to render Parent insolvent or impede Parent’s
ability to redeem the Parent Series A Preferred Stock in accordance with the Certificate of
Designations.

     Section 7.11 Equity Interests. After the date hereof and until the date that all of
the Parent Series A Preferred Stock that constitutes the Stock Portion of the Merger Consideration
(including the PIK Shares) has been redeemed in full or converted into Parent Common Stock, without
the prior consent of the Representative, Parent shall not, and shall not cause or permit any of its
Subsidiaries to, issue or sell any Equity Interests in Parent or any of its Subsidiaries (including
by way of sales of treasury stock) or any warrants or options to purchase Equity Interests
(including any Equity Interests issued upon exercise of any warrant or option), or any securities
convertible or exchangeable into any Equity Interest, or accept any contribution to the capital of
Parent or any Subsidiary; provided, however, that the foregoing shall not prohibit
any such sale or issuance by Parent of its Equity Interests (A) to directors, officers or employees
of Parent pursuant to one or more stock option plans or agreements approved by the Board of
Directors of Parent or (B) with respect to a Permitted Acquisition (as such term is defined in the
Parent Credit Agreement) as long as the Equity Interests issued and sold are not senior to or pari
passu with the Parent Series A Preferred Stock in any respect; and provided
further, however, Parent shall be permitted to issue and sell any Equity Interests
as long as 50% of the net proceeds therefrom are used immediately to redeem the Parent Series A
Preferred Stock that constitutes the Stock Portion of the Merger Consideration (including all PIK
Shares) pursuant to the Certificate of Designations. “Equity Interest” means any and all
shares, interests, participations
or other equivalents (however designated, whether voting or nonvoting), or any other interest
or participation that confers on a person the right to receive a share of the profits and losses
of, or

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distributions of property of, such person, whether outstanding on the date hereof or issued
after the Closing Date.

     Section 7.12 Form S-3. The Registration Statement on Form S-3 (the “Registration
Statement”) to be filed with the SEC by Parent following the Closing in connection with the
resale of shares of Parent Common Stock issuable upon conversion of the Parent Series A Preferred
Stock constituting the Stock Portion of the Merger Consideration, and pursuant to the terms of the
Registration Rights Agreement, shall, at the time the Registration Statement becomes effective
under the Securities Act and, except as otherwise advised pursuant to the Registration Rights
Agreement, for so long as the Registration Statement remains effective, not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Registration Statement will comply as
to form in all material respects with the requirements of the Securities Act and the rules and
regulations thereunder.

ARTICLE 8

CONDITIONS TO OBLIGATION TO CLOSE

     Section 8.01 Conditions to Obligations of Each Party Under This Agreement. The
respective obligations of each Party to effect the Merger and the Transactions related thereto
shall be subject to the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived in writing by a party with respect only to itself, in whole or in
part, to the extent permitted by Applicable Law:

          (a) Company Stockholder Approval. The Company shall have received the Requisite
Stockholder Approval.

          (b) Proceedings. No Governmental Body of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation, or Order (whether
temporary, preliminary or permanent) which (i) is in effect and (ii) has the effect of making the
Merger illegal or otherwise prohibiting consummation of the Merger (which illegality or prohibition
would have a Material Adverse Effect on Parent and its Subsidiaries on a combined basis with the
Company and its Subsidiaries), if the Merger were consummated notwithstanding such statute, rule,
regulation, or Order; provided, however, that prior to asserting this condition,
subject to Section 6.01, each of the Parties shall have used their best efforts to prevent the
entry of any Order and to appeal as promptly as possible any such Order that may be entered.

          (c) HSR Act. The applicable waiting period, together with any extensions thereof,
including any additional waiting period required as a consequence of any supplemental request by a
Governmental Body, under the HSR Act shall have expired or been terminated.

          (d) Consents. All third party consents set forth on Schedule 8.01(d) shall have been
obtained by the Company and written evidence of such shall have been delivered to Parent. 

          (e) Registration Rights Agreement. A registration rights agreement in the form
attached hereto as Exhibit F (the “Registration Rights Agreement”) shall have been
executed by Parent and the Representative.

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     Section 8.02 Additional Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger and the Transactions are subject to
satisfaction or waiver of the following additional conditions:

          (a) Representations and Warranties. The representations and warranties of the Company
set forth in this Agreement shall be true and correct (without giving effect to any limitation as
to “materiality” or “Material Adverse Effect” set forth therein) as of the Closing
Date, as if made as of such time (except to the extent such representations and warranties
expressly speak as of another date, in which case such representations and warranties shall be true
and correct as of that date), except where the failure of such representations and warranties to be
so true and correct do not, individually or in the aggregate, have a Material Adverse Effect on the
Company. Parent shall have received a certificate signed by the Company to such effect.

          (b) Agreements and Covenants. The Company shall have performed and complied with all
of its covenants hereunder in all material respects through the Closing, and Parent shall have
received a certificate signed by the Company to such effect.

          (c) Documents. All of the documents, instruments and agreements to be executed and/or
delivered pursuant to this Agreement (including, without limitation, the Escrow Agreement) shall
have been executed by the parties thereto other than Parent and Merger Sub and delivered to Parent.

          (d) Material Adverse Effect. Since the date hereof, no Material Adverse Effect on the
Company shall have occurred.

          (e) Appraisal Rights. The aggregate number of Company Shares held by Company
Stockholders who have perfected appraisal rights under Section 262 of the DGCL shall not exceed
seven percent (7%) of the issued and outstanding Company Shares.

          (f) Certificates. The Parent shall have received good standing certificates for the
Company and its Subsidiaries from their jurisdictions of organization.

          (g) Terminations. The Termination Agreement, in the form attached hereto as
Exhibit G, shall have been executed and delivered by the Company and the other parties
named on the signature pages thereto.

     Section 8.03 Additional Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger and the Transactions is subject to satisfaction or waiver of the
following additional conditions:

          (a) Representations and Warranties. The representations and warranties of Parent and
Merger Sub set forth in this Agreement shall be true and correct (without giving
effect to any limitation as to “materiality” or “Material Adverse Effect” set
forth therein) as of the Closing Date, as if made as of such time (except to the extent such
representations and warranties expressly speak as of another date, in which case such
representations and warranties shall be true and correct as of that date), except where the failure
of such representations and warranties to be so true and correct do not, individually or in the
aggregate, have a Material

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Adverse Effect on the Parent or Merger Sub. The Company shall have
received a certificate signed by Parent to such effect.

          (b) Agreements and Covenants. Parent and Merger Sub shall have performed and complied
with all of their covenants hereunder in all material respects through the Closing. The Company
shall have received a certificate signed by Parent to such effect.

          (c) Documents. All of the documents, instruments and agreements to be executed and/or
delivered pursuant to this Agreement (including, without limitation, the Escrow Agreement) shall
have been executed by the parties thereto other than the Company and its Subsidiaries and delivered
to the Company.

          (d) Payments. Parent shall have delivered the Payoff Amount to the Lender, the Escrow
Deposit to the Escrow Agent and the Closing Merger Consideration to the Exchange Agent, as required
to be delivered pursuant to Article 3.

          (e) Certificate of Designations. Parent shall have filed a certificate of
designations in the form attached hereto as Exhibit H (the “Certificate of
Designations”) with the Secretary of State of the State of Delaware and shall have delivered to
the Company a copy of such filing certified by the Secretary of State of the State of Delaware and
specifying the date and time of acceptance.

ARTICLE 9

TERMINATION

     Section 9.01 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding adoption and approval thereof by
the stockholders of the Company:

          (a) By mutual written consent of Parent and the Company;

          (b) By either Parent or the Company if:

               (i) the Merger shall not have been consummated on or before the ninetieth (90) day after the
date hereof; provided, that the right to terminate this Agreement under this Section
9.01(b) shall not be available to any Party whose willful failure to fulfill any material
obligation under this Agreement has been the cause of, or resulted in, the failure of the Merger to
have been consummated on or before such date; or

               (ii) a Governmental Body shall have issued an Order or taken any other action, in each case
which has become final and non-appealable and which restrains, enjoins or otherwise prohibits the
Merger.

          (c) By Parent, if neither Parent nor Merger Sub is in material breach of its obligations under
this Agreement, and if (i) any of the representations and warranties of the Company herein become
untrue or inaccurate such that Section 8.02(a) would not be satisfied or (ii) there has been a
breach on the part of the Company of any of its covenants or agreements contained in this Agreement
such that Section 8.02(b) would not be satisfied, and, in both case

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(i) and case (ii), such breach
(if curable) has not been cured within fifteen (15) days after written notice to the Company;

          (d) By the Company, if it is not in material breach of its obligations under this Agreement,
and if (i) at any time that any of the representations and warranties of Parent or Merger Sub
herein become untrue or inaccurate such that Section 8.03(a) would not be satisfied or (ii) there
has been a breach on the part of Parent or Merger Sub of any of their respective covenants or
agreements contained in this Agreement such that Section 8.03(b) would not be satisfied, and, in
case of (i) or (ii), such breach (if curable) has not been cured within fifteen (15) days after
written notice to Parent;

          (e) By Parent or the Company, if the Board of Directors of the Company shall have withdrawn or
modified in a manner adverse to Parent or Merger Sub, its recommendation or approval of the Merger
or the Transactions; or

          (f) By the Parent, if the Requisite Stockholder Approval shall not have been obtained within
two (2) Business Days after the date hereof; provided that (x) the conditions precedent in
the Parent Credit Agreement have been fully satisfied and the proceeds of the Financing are
immediately available to consummate the Merger and the other Transactions and (y) neither Parent
nor Merger Sub are in material breach of their obligations under this Agreement.

          (g) By the Company if, within two (2) Business Days after the date hereof, (x) Parent has not
fully satisfied all conditions precedent under the Parent Credit Agreement or the proceeds for the
Financing are not immediately available to consummate the Merger and the other Transactions and (y)
the Company is not in material breach of its obligations under this Agreement.

     Section 9.02 Effect of Termination.

          (a) In the event of the termination of this Agreement pursuant to Section 9.01, this Agreement
(other than this Section 9.02, Section 6.03, the last sentence of Section 6.04 and Sections 11.01,
11.03 11.05, 11.07, 11.08, 11.09 and 11.10, which shall survive such termination) shall forthwith
become void, and, except as set forth in this Section 9.02, there shall be no liability on the part
of any Party or any of their respective officers or directors to the other and all rights and
obligations of any Party shall cease, except that nothing herein shall relieve any Party from
liability for any material breach, prior to termination of this Agreement in accordance with its
terms, of any covenant or agreement contained in this Agreement nor from liability for any material
and willful breach, prior to termination of this Agreement in accordance with its terms, of any
representation or warranty contained in this Agreement.

          (b) In the event that this Agreement is terminated by Parent pursuant to Section 9.01(e)
or (f), then the Company shall pay to Parent, by wire transfer in immediately available funds,
within five (5) Business Days after such termination, a termination fee equal to One Million Four
Hundred Thousand Dollars ($1,400,000); provided that such termination fee shall not be
payable unless at the time of termination (x) the conditions precedent in the Parent Credit
Agreement have been fully satisfied and the proceeds of the Financing are immediately

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available to
consummate the Merger and the other Transactions and (y) neither Parent nor Merger Sub are in
material breach of their obligations under this Agreement.

          (c) In the event that this Agreement is terminated by the Company pursuant to Section
9.01(g), then Parent or the Merger Sub shall pay to the Company, by wire transfer in
immediately available funds, within five (5) Business Days after such termination, a termination
fee equal to One Million Four Hundred Thousand Dollars ($1,400,000).

ARTICLE 10

INDEMNIFICATION

     Section 10.01 Indemnification of Parent by Resort to Escrow. Subject to the
limitations set forth in Section 10.05, from and after the Effective Time, Parent and the Surviving
Corporation and their respective officers, directors, employees, Affiliates, and agents (the
“Parent Indemnified Parties”), shall be entitled to indemnification by recovery from the
Escrow Deposit, (A) any and all losses, costs, expenses (including, without limitation, reasonable
attorneys’ and independent accountants’ fees and disbursements), liabilities, damages (excluding
incidental, special, consequential or punitive damages), fines, penalties, charges, assessments,
judgments and settlements (individually, a “Loss” and collectively, “Losses”) that
the Parent Indemnified Parties incur arising out of (i) any inaccuracy of any representation or the
breach of any warranty made by the Company in Article 4 of this Agreement, (ii) any nonfulfillment
of any covenant or agreement made by the Company in this Agreement, which has not been cured (to
the extent reasonably capable of being cured) within fifteen (15) days after written notice thereof
to the Company and the Representative and/or (iii) the Indemnified Taxes and (B) one-half of any
and all Losses (x) reasonably incurred in obtaining the consent listed in Schedule 10.01 or in
obtaining any license acquired as a result of failing to obtain the consent listed in Schedule
10.01 or (y) from any breach of contract claim against the Surviving Corporation resulting from the
failure to obtain such consent.

     Section 10.02 Indemnification by Parent. From and after the Effective Time, Parent
shall defend, indemnify and hold the Company Stockholders and their respective officers, directors,
employees, Affiliates, and agents (the “Stockholder Indemnified Parties”), harmless from
and against any and all Losses that the Stockholder Indemnified Parties incur arising out of (i)
any inaccuracy of any representation or the breach of any warranty made by Parent or Merger Sub in
Article 5 of this Agreement, and/or (ii) any nonfulfillment of any covenant or agreement made by
Parent or Merger Sub in this Agreement, which has not been cured (to the extent reasonably capable
of being cured) within fifteen (15) days after written notice thereof to Parent.

     Section 10.03 Third Party Claims.

          (a) In the event that any Parent Indemnified Party desires to make a claim against the Escrow
Deposit or any Stockholder Indemnified Party desires to make a claim against Parent, in each case
in connection with any third party litigation, arbitration, action suit, proceeding, claim,
investigation or demand at any time instituted against or made upon it for which it may seek
indemnification hereunder (a “Third Party Claim”), the Indemnified Party shall promptly
notify the Indemnification Control Person of such Third Party Claim and the Indemnified Party’s
claim for indemnification with respect thereto after obtaining notice of such

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Third Party Claim;
provided, that failure to promptly give such notice will not relieve the Indemnifying Party
of its indemnification obligations under this Article 10, except to the extent, if any, that the
Indemnifying Party has actually been prejudiced thereby.

          (b) The Indemnification Control Person will have the right to assume the defense of the Third
Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party by written
notice to the Indemnified Party within twenty (20) days after the Indemnification Control Person
has received notice of the Third Party Claim; provided, however, that the
Indemnified Party shall not be required to permit such an assumption of the defense of any Third
Party Claim that, if not first paid, discharged or otherwise complied with, would result in a
Material Adverse Effect on the Indemnified Party.

          (c) The assumption of the defense of any Third Party Claim by the Indemnification Control
Person shall not constitute an admission of responsibility to indemnify the Indemnified Party or in
any manner impair or restrict the Indemnifying Party’s rights to later be reimbursed its costs and
expenses if indemnification under this Agreement with respect to such claim, investigation or
proceeding was not required. The Indemnification Control Person shall not, in the defense of such
claim, consent to the entry of any judgment (other than a judgment of dismissal on the merits
without costs) or enter into any settlement without the written consent of the Indemnified Party
(which consent shall not be unreasonably withheld, delayed or conditioned), except that no such
consent shall be required if (i) there is no finding or admission of any violation of any
Applicable Law, (ii) the sole relief provided is monetary damages that are reimbursed in full as
Losses (subject to, with respect to claims by the Parent Indemnified Parties, the remaining
Deductible Amount, if any, which will be paid by the Parent Indemnified Party, and the
indemnification limits set forth in this Agreement), and (iii) (except in respect of any claim
relating to Taxes) the settlement shall include the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect to such claim or litigation.

          (d) If the Indemnification Control Person assumes the defense of a Third Party Claim, the
Indemnified Party shall be entitled to participate in the defense of the claim, but solely by
observation and comment to the Indemnification Control Person, and any counsel selected by the
Indemnified Party shall not appear on its behalf in any Proceeding arising hereunder. The
Indemnified Party shall bear the fees and expenses of any additional counsel retained by it to
participate in its defense.

          (e) If the Indemnification Control Person does not assume the defense of a Third Party Claim
or any litigation resulting therefrom after receipt of notice of such Third Party Claim from the
Indemnified Party under (a) or (b) above, the Indemnified Party may defend against such claim in
such manner as it reasonably deems appropriate. The Indemnified Party may not settle such claim
without the written consent of the Indemnification Control Person, which consent shall not be
unreasonably withheld, delayed, or conditioned.

          (f) The Parent Indemnified Parties and the Stockholder Indemnified Parties shall cooperate in
good faith and in all respects with the Indemnification Control Person and its representatives
(including, without limitation, its counsel) in the investigation, negotiation, settlement, trial
and/or defense of any Third Party Claim (and any appeal arising therefrom).

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The Parties shall
cooperate with each other in any notifications to and information requests of any insurers. No
individual representative of any Indemnifying Party, or any Indemnifying Party’s Affiliates, shall
be personally liable for any Loss or Losses under this Agreement, except as specifically agreed to
by said individual representative.

     Section 10.04 Payment of Claims.

          (a) In the event that any Parent Indemnified Party desires to seek indemnification under this
Article 10, the Parent Indemnified Party shall give reasonably prompt written notice to the
Indemnification Control Person specifying the facts constituting the basis for such claim and the
amount, to the extent known, of the claim asserted. If the Indemnification Control Person disputes
such claim for indemnification, it shall notify the Parent Indemnified Party within thirty (30)
days after its receipt of the notice of such claim for indemnification, whereupon the Parent
Indemnified Party and the Indemnification Control Person shall meet and attempt in good faith to
resolve their differences with respect to such claim for indemnification. If the dispute has not
been resolved within thirty (30) days after such parties first met to attempt a resolution, either
the Indemnification Control Person or the Parent Indemnified Party may initiate litigation in
accordance with Section 11.10 of this Agreement. If the Indemnification Control Person does not
dispute such claim for indemnification, the Escrow Agent shall, to the extent jointly requested by
the Indemnification Control Person and the Parent Indemnified Party, deliver to the Parent
Indemnified Party a number of shares of Parent Series A Preferred Stock (or Parent Common Stock
issued upon conversion of Parent Series A Preferred Stock), the value of which (as determined in
accordance with Section 10.04(c)) shall be equal to the amount of such claim, from the Escrow in
accordance with the terms of the Escrow Agreement (subject to the provisions of Section 10.04(d)).

          (b) In the event that any Stockholder Indemnified Party desires to seek indemnification under
this Article 10, the Stockholder Indemnified Party shall give reasonably prompt written notice to
Parent specifying the facts constituting the basis for such claim and the amount, to the extent
known, of the claim asserted. If Parent disputes such claim for indemnification, it shall notify
the Stockholder Indemnified Party within thirty (30) days after its receipt of the notice of such
claim for indemnification, whereupon Parent and the Stockholder Indemnified Party shall meet and
attempt in good faith to resolve their differences with respect to such claim for indemnification.
If the dispute has not been resolved within thirty (30) days after such parties first met to
attempt a resolution, either the Stockholder Indemnified Party or Parent may initiate litigation in accordance with Section 11.10 of this Agreement. If Parent does
not dispute such claim for indemnification, Parent shall pay, or shall cause the Surviving
Corporation to pay, the Stockholder Indemnified Party an amount in cash equal to the amount of such
claim.

          (c) For purposes of this Article 10, the value of each share of Parent Series A Preferred
Stock as of any particular time shall be deemed to be the “Redemption Price” of such share, as such
term is defined in the Certificate of Designations, and the value of each share of Parent Common
Stock issued upon conversion of Parent Series A Preferred Stock shall be deemed to be Eight Dollars
($8.00), plus any accrued but unpaid dividends (as appropriately adjusted to reflect fully the
effect of any stock split, reverse stock split, stock dividend (including any dividend or general
distribution of securities convertible into or exchangeable or exercisable

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for any capital stock of
Parent), reclassification, reorganization, recapitalization or other like change occurring after
the date hereof).

          (d) Notwithstanding any other provision of this Agreement, with respect to any claim for
indemnification, the Representative shall have the option, in its sole discretion, to pay the
Parent Indemnified Party an amount in cash equal to the number of shares of Parent Series A
Preferred Stock or Parent Common Stock that the Escrow Agent would have delivered to such Parent
Indemnified Party with respect to such claim multiplied by the value of such shares (as determined
in accordance with Section 10.04(c)), in which case the Parent Indemnified Party and the
Representative shall deliver joint written instructions to the Escrow Agent to deliver such number
of shares of Parent Series A Preferred Stock to the applicable Company Stockholders pursuant to the
terms of this Agreement and the Escrow Agreement.

          (e) The Parties agree that the payment of any indemnity under this Article 10 shall be treated
as an adjustment to the Merger Consideration paid by Parent hereunder for Tax purposes to the
extent that it may properly be so characterized under Applicable Law.

     Section 10.05 Limitations on Indemnification. No claim may be made against the Escrow
Deposit unless and until the Parent Indemnified Parties have sustained aggregate Losses for which
the Parent Indemnified Parties are entitled to indemnification pursuant to this Agreement in excess
of Three Hundred Twenty-Five Thousand Dollars ($325,000) in the aggregate (the “Deductible
Amount”) and then only to the extent such aggregate amount exceeds the Deductible Amount.
Notwithstanding any other provision in this Agreement to the contrary, the maximum aggregate
recovery of all Parent Indemnified Parties shall not exceed an amount equal to the Escrow Deposit.

     Section 10.06 Exclusive Remedy. The Parties acknowledge and agree that, the
indemnification in this Article 10 shall be the sole and exclusive remedies of the Parties and
their Affiliates for any and all Losses or any other liabilities sustained or incurred by the
Parties or their Affiliates or their successors and assigns, in connection with, this Agreement,
the Merger or otherwise arising out of the transactions contemplated hereby and the Parties each
waive any other remedy, which they, or any other Person entitled to indemnification hereunder, may
have hereunder, at law, in equity or otherwise with respect hereto. Once any portion of the Escrow
is released to the Exchange Agent pursuant
to the Escrow Agreement, the Parent Indemnified Parties shall have no further claim to such
amounts.

     Section 10.07 Effect of Insurance, Taxes and Other Recoveries. The amount of any
Losses for which indemnification is provided under this Article 10 shall be reduced by (a) any
amounts that are recovered by the Indemnified Party or any of its Affiliates from any Third Party,
(b) any insurance proceeds or other cash receipts or source of reimbursement that are received by
the Indemnified Party or any of its Affiliates with respect to such Losses (each source named in
clauses (a) and (b), a “Collateral Source”) and (c) an amount of any net Tax benefit, if
any, available to the Indemnified Party or its Affiliates attributable to such Losses. The
Indemnified Party shall, and shall cause its Affiliates to, diligently pursue all available
remedies and causes of action to recover the amount of its claim as may be available from any
Collateral Source. In the event an Indemnifying Party indemnifies an Indemnified Party on any
claim referred to in the previous sentence and the Indemnified Party is not pursuing such claim,

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the Indemnified Party shall assign to the Indemnifying Party, to the fullest extent allowable, its
rights and causes of action with respect to such claim, or in the event assignment is not
permissible, the Indemnifying Party shall be allowed to pursue such claim in the name of the
Indemnified Party or its Affiliate, at the Indemnifying Party’s expense. The Indemnified Party
shall provide the Indemnifying Party reasonable assistance in prosecuting such claim, including
making the Indemnified Party’s books and records relating to such claim available and making its
and its Affiliates’ employees available for interviews, depositions, testimony and similar matters.
If any amount to be reduced under this Section 10.07 from any payment required under the Article
10 is determined after the date on which the Indemnifying Party is required pursuant to this
Article 10 to pay such indemnification claim, the Indemnified Party shall promptly reimburse the
Indemnifying Party any amount that the Indemnifying Party would not have had to pay pursuant to
this Article 10 had such determination been made at the time of such payment. For purposes of this
Article 10, the amount of the Losses relating to any item reflected as a liability in the Company
Financial Statements or incurred in the Ordinary Course of Business prior to the Closing Date shall
be calculated net of the amount so reflected or incurred.

     Section 10.08 No Double Recovery. Notwithstanding the fact that any Person may have
the right to assert claims for indemnification under or in respect of more than one provision of
this Agreement in respect to any fact, event, condition or circumstance, no Person will be entitled
to recover the amount of any Losses suffered by such Person more than once under both this
Agreement and the Ancillary Documents in respect of such fact, event, condition or circumstance,
and an Indemnifying Party will not be liable for indemnification to the extent such Loss was
reflected in the Company Financial Statements or incurred in the Ordinary Course of Business prior
to the Closing Date.

     Section 10.09 Survival of Representations, Warranties and Covenants. The
representations and warranties in this Agreement or any Ancillary Document delivered by or on
behalf of the Parties hereto shall survive the Closing for a period of nine (9) months after the
Closing Date. The covenants and agreements of the Parties to be wholly performed prior to the
Closing shall survive the Closing for a period of nine (9) months after the Closing Date and the
other covenants or agreements to be performed at or after the Closing shall survive the Closing
until fully performed. No claim for breach of such representations, warranties or covenants may be
brought, and no action with respect thereto may be commenced, and no Party shall have any liability
or obligation with respect thereto, unless the Indemnified Party gave written notice to the
Indemnifying Party, specifying with particularity the breach of the representation or warranty
claimed, on or before the expiration of the applicable survival period, in which case the right of
the Party providing such written notice to assert its right to indemnification as to the matters so
noticed shall not expire until the dispute is resolved under the terms of this Agreement.

ARTICLE 11

MISCELLANEOUS

     Section 11.01 Expenses. All costs and expenses (including legal fees and expenses)
arising from, incurred in connection with or incident to this Agreement, the Ancillary Documents
and the Transactions (each a “Transaction Expense”) incurred by Parent (including without
limitation the commissions, fees or other compensation of Parent’s Broker) shall be borne by
Parent. All Transaction Expenses incurred by the Company or any Company Stockholder

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(including without limitation the commissions, fees or other compensation of the Company’s Broker)
(“Company Transaction Expenses”) shall be borne by the Company. Any amounts payable by the
Company at the Closing for the Employee Transaction Bonuses shall be deemed to be Company
Transaction Expenses. At or immediately prior to the Effective Time, the Company shall pay all of
the unpaid Company Transaction Expenses that it is obligated to pay hereunder and such Company
Transaction Expenses shall reduce the Merger Consideration in accordance with Section 3.01(a). All
transfer, documentary, sales, use, stamp, registration and other such Taxes (including real estate
transfer taxes), and all conveyance fees, recording charges and other fees and charges (including
any penalties and interest) incurred in connection with the consummation of the Transactions shall
be a Transaction Expense of Parent and shall be paid either by Parent or the Surviving Corporation,
as applicable, when due (unless disputed by Parent in good faith). Parent shall, at its own
expense, prepare and cause to be filed all necessary Tax Returns and other documentation with
respect to all such Taxes, fees and charges, and, if required by Applicable Law, the Parties shall,
and shall cause their Affiliates to, join in the execution of any such Tax Returns and other
documentation.

     Section 11.02 No Third-Party Beneficiaries. Except as otherwise set forth in Article
1, Section 3.09, Section 7.03 and Article 10 herein, this Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors and permitted
assigns, except that it is expressly agreed that the Company Stockholders, the Option Holders and
the Warrant Holders are intended beneficiaries of Sections 7.06 through 7.12 (inclusive).

     Section 11.03 Entire Agreement. This Agreement, including the Company Disclosure
Schedules, the Parent Disclosure Schedules and Exhibits attached hereto, the Escrow Agreement, the
Confidentiality Agreement and the other documents referred to herein, constitute the entire
agreement among the Parties and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, to the extent they relate in any way to the subject
matter hereof.

     Section 11.04 Incorporation of Exhibits and Schedules. The Company Disclosure
Schedules and the Parent Disclosure Schedules and the Exhibits attached hereto are incorporated
herein by reference and made a part hereof. Any information or matter disclosed in any schedule of
the Company Disclosure Schedules or Parent Disclosure Schedules shall be deemed disclosed in each
and every other schedule of such disclosure schedules regardless of whether a specific
cross-reference is made. The disclosure of a particular matter in the Company Disclosure Schedules
shall not be taken as an admission by the Company that such disclosure is required to be made under
the terms hereof. Where any information set forth in the Company Disclosure Schedules comprises
expressions of opinion, no warranty is given as to their accuracy.

     Section 11.05 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors and permitted
assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of Parent and the Company.

     Section 11.06 Counterparts and Facsimile Signatures. This Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The counterparts of this Agreement may

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be executed and delivered by facsimile signature by any of the Parties to any other Party and the
receiving Party may rely on the receipt of such document so executed and delivered by facsimile as
if the original had been received.

     Section 11.07 Headings. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or interpretation of this
Agreement.

     Section 11.08 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given upon receipt; provided that if delivered
on a date that is not a Business Day or after 5:00 p.m. on a Business Day (in each case at the
place of delivery), such notice, request, demand, claim or other communication shall be deemed
delivered on the next succeeding Business Day; provided, further that such notice,
request, demand, claim or other communication is delivered to the applicable Party at the Party’s
address or facsimile number as set forth below,

          (a) If to Parent or Merger Sub, addressed to it at:

400 Minuteman Road

Andover, Massachusetts 01810

Facsimile: (978) 946-7803

Attention: James W. Pluntze

with a copy to:

BRL Law Group LLC

31 St. James Avenue, Suite 850

Boston, MA 02116

Facsimile: (617) 399-6930

Attention: Thomas B. Rosedale, Esq.

          (b) If to the Company prior to the Effective Time, addressed to it at:

13530 Dulles Technology Drive

Suite 110

Herndon, VA 20171

Facsimile: 703-561-0460

Attention: Craig D. Norman

with a copy to:

Morrison & Foerster LLP

1650 Tysons Boulevard

Suite 400

McLean, Virginia 22102

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Telephone: (703) 760-7318

Facsimile: (703) 760-7777

Attention: Lawrence T. Yanowitch, Esq.

          (c) If to the Representative or to the Company after the Effective Time, addressed to it at:

c/o GTCR Golder Rauner, LLC

6100 Sears Tower

Chicago, Illinois 60606

Facsimile: (312) 382-2201

Attention: Philip A. Canfield

with a copy to:

Morrison & Foerster LLP

1650 Tysons Boulevard

Suite 400

McLean, Virginia 22102

Telephone: (703) 760-7318

Facsimile: (703) 760-7777

Attention: Lawrence T. Yanowitch, Esq.

     Any Party may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.

     Section 11.09 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect to any choice or
conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State of Delaware.

     Section 11.10 Jurisdiction; Waiver of Jury Trial. Except for disputes to be resolved
under Section 7.05(a), the Parties hereto agree that any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection with, this
Agreement or the Transactions shall be brought in any federal court located in the State of
Delaware or any Delaware state court with jurisdiction over Wilmington, Delaware, and each of the
Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. Process in any
such suit, action or proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 11.08 shall be deemed effective service of
process on such party. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL

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PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS.

     Section 11.11 Amendments and Waivers. This Agreement may be amended by the Parties at
any time prior to or following the Company’s receipt of the Requisite Stockholder Approval;
provided, however, that there shall be no amendment that by Applicable Law requires
further approval of the Company’s Common Stockholders without the approval of such stockholders. No
amendment of any provision of this Agreement shall be valid unless the same shall be in writing and
signed by the Parties. No waiver by any Party of any provision of this Agreement or any default,
misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall
be valid unless the same shall be in writing and signed by the Party making such waiver, nor shall
such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

     Section 11.12 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other jurisdiction.

     Section 11.13 Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement. The words “including,” “include” or
“includes” shall mean including without limitation. The Parties intend that each
representation, warranty and covenant contained herein shall have independent significance. Any
reference in this Agreement to a statute shall be to such statute, as amended from time to time,
and to the rules and regulations promulgated thereunder.

71

 

     Section 11.14 Acknowledgements by Parent and Merger Sub. Parent and Merger Sub
acknowledge that they have relied on the representations and warranties of the Company expressly
and specifically set forth in Article 4 of this Agreement, including the Company Disclosure
Schedules and Parent Disclosure Schedules (and any updates thereto). SUCH REPRESENTATIONS AND
WARRANTIES BY THE COMPANY CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF THE
COMPANY TO PARENT AND MERGER SUB IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, AND
PARENT AND MERGER SUB UNDERSTAND, ACKNOWLEDGE AND AGREE THAT ALL OTHER REPRESENTATIONS AND
WARRANTIES OF ANY KIND OR NATURE EXPRESSED OR IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY RELATING
TO THE FUTURE FINANCIAL CONDITION, RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE COMPANY AND
ANY SET FORTH IN THE CONFIDENTIAL INFORMATION PREVIOUSLY DELIVERED TO PARENT), ARE SPECIFICALLY
DISCLAIMED BY THE COMPANY AND THE COMPANY STOCKHOLDERS.

     Section 11.15 Specific Performance. The Parties hereto agree that if, on or prior to
the Closing Date, any of the provisions of this Agreement or any other document contemplated by
this Agreement were not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist and damages would
be difficult to determine, and, therefore, prior to the Closing Date, the Parties shall be entitled
to specific performance of the terms hereof and thereof.

[SIGNATURE PAGE FOLLOWS]

72

 

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

	 	 	 	 	 
	 	COMPANY:

NETASPX, INC.

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

NAVISITE, INC.

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

NSITE ACQUISITION CORP.

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

ACKNOWLEDGED AND AGREED:

REPRESENTATIVE:

GTCR FUND VI, L.P.

By: GTCR Partners VI, L.P.

Its: General Partner

By: GTCR Golder Rauner, L.L.C.

Its: General Partner

	 	 	 	 	 
	By:

	 	/s/ Philip A. Canfield
 

	 	 
	Name: Philip A. Canfield	 	 
	Title: Principal	 	 

 

AGREEMENT AND PLAN OF MERGER

by and among

NETASPX, INC.,

NAVISITE, INC.,

NSITE ACQUISITION CORP.,

and

GTCR FUND VI, L.P.

SEPTEMBER 12, 2007

  

 

TABLE OF CONTENTS

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

-i-

 

TABLE OF CONTENTS
(continued)

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

-ii-

 

TABLE OF CONTENTS
(continued)

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

-iii-

 

TABLE OF CONTENTS
(continued)

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

-iv-

 

TABLE OF CONTENTS
(continued)

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

-v-

 

TABLE OF CONTENTS

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

-i-exv10w4

 

Exhibit 10.4

[Execution Copy]

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of September 12, 2007 (the “Agreement”), is
entered into by and between NavSite, Inc., a Delaware corporation (including any successor thereto,
whether by merger, consolidation, conversion or otherwise, the “Company”) and GTCR Fund VI, L.P.
(the “Representative”) as representative of the Purchasers (as defined below).

     WHEREAS, the Company, NSite Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of the Company, netASPx, Inc., a Delaware corporation (“netASPx”) and the
Representative, solely in its capacity as Representative thereunder have entered into that certain
Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 12, 2007;

     WHEREAS, pursuant to the Merger Agreement, the Representative has been appointed by the
Purchasers as agent for, and to act on behalf of, the Purchasers in connection with, among other
things, the Purchasers’ rights under this Agreement;

     WHEREAS, the Purchasers have the right to acquire shares of common stock, par value $0.01 per
share, of the Company (“Common Stock”) upon conversion of shares of Preferred Stock (as hereinafter
defined) of the Company, purchased pursuant to the Merger Agreement; and

     WHEREAS, the Company and the Representative (on behalf of the Purchasers) deem it to be in
their respective best interests to set forth their rights in connection with public offerings and
sales of shares of Common Stock and are entering into this Agreement as a condition to and in
connection with netASPx and the Representative entering into the Merger Agreement.

     NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations
hereinafter set forth, the Company and the Representative hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the following
terms shall have the following respective meanings:

     “Commission” means the United States Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant
statute for the particular purpose.

     “Effective Time” means the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes
effective.

     “Exchange Act” means the Securities Exchange Act of 1934, or any successor thereto, as the
same shall be amended from time to time.

     The term “holder” means each of the Purchasers and other persons who acquire Registrable
Securities from time to time (including any successors or assigns), in each case for so long as
such person owns any Registrable Securities.

 

 

     The term “person” means a corporation, association, partnership, organization, limited
liability company, limited partnership, limited liability partnership, or other similar entity,
individual, government or political subdivision thereof or governmental agency.

     “Purchasers” means the Company Stockholders, as such term is defined in the Merger Agreement.

     “Preferred Stock” means the Company’s Series A Convertible Preferred Stock, par value $0.01
per share.

     “Registrable Securities” means the Securities; provided, however, that a Security shall cease
to be a Registrable Security upon the earliest to occur of the following: (i) a Shelf Registration
Statement registering such Security under the Securities Act has been declared or becomes effective
and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a
manner contemplated by such effective Shelf Registration Statement; (ii) such Security is sold
pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to
restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the
Company; (iii) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (iv)
such Security shall cease to be outstanding.

     “Registration Expenses” shall have the meaning assigned thereto in Section 4 hereof.

     “Rule 144,” “Rule 145,” “Rule 405” and “Rule 415” mean, in each case, such rule promulgated
under the Securities Act (or any successor provision), as the same shall be amended from time to
time.

     “Securities” means (i) the shares of Preferred Stock issued to the Purchasers pursuant to the
Merger Agreement and (ii) the shares of Common Stock of the Company issued or issuable upon
conversion of the shares of Preferred Stock issued to the Purchasers pursuant to the Merger
Agreement, and (iii) any other capital stock of the Company into which such shares of Preferred
Stock or Common Stock may be converted or which is issued or issuable upon conversion of such
shares of Preferred Stock, in each case as a result of any stock split, stock dividend,
recapitalization, exchange or similar event.

     “Securities Act” means the Securities Act of 1933, or any successor thereto, as the same shall
be amended from time to time.

     “Shelf Registration” shall have the meaning assigned thereto in Section 2(a) hereof.

     “Shelf Registration Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

     Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers
to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole

2

 

and not to any particular Section or other subdivision. Capitalized terms used herein but not defined herein shall
have the meaning assigned to such terms in the Merger Agreement.

     Section 2. Registration Under the Securities Act .

          (a) The Company shall file under the Securities Act, as soon as reasonably practicable but
in no event later than November 30, 2007, a “shelf” registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the
Commission (such filing, the “Shelf Registration” and such registration statement, the “Shelf
Registration Statement”). The Company agrees to use its reasonable best efforts (x) to cause the
Shelf Registration Statement to become or be declared effective as soon as reasonably practicable
after such filing, but in no event later than January 31, 2008, and subject to Section 3(d), to
keep such Shelf Registration Statement continuously effective until such time as there are no
longer any Registrable Securities outstanding, and (y) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable Securities, to take
any action reasonably necessary to enable such holder to use the prospectus forming a part thereof
for resales of Registrable Securities, including, without limitation, any action necessary to
identify such holder as a selling securityholder in the Shelf Registration Statement. The Company
further agrees to supplement or make amendments to the Shelf Registration Statement, including
without limitation, any post effective amendments, as and when required by the rules, regulations
or instructions applicable to the registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or rules and regulations thereunder for shelf registration. To
the extent the Company is required to file a prospectus under Rule 424(b) of the Securities Act, it
shall file such prospectus on the third business day following the Effective Time. In the event
that the Company and the Representative agree that it would be advisable to delay the registration
of a portion of the Securities, the Company shall file a subsequent Shelf Registration Statement
covering such portion of the Securities at a time which shall be mutually agreed by the Company and
the Representative. Such Shelf Registration Statement shall be subject to all of the terms and
provisions of this Agreement, except for the initial filing deadline described above.

          (b) The Company shall use all reasonable best efforts to take all actions necessary or
advisable to be taken by it to ensure that the transactions contemplated herein are effected as so
contemplated in Section 2(a) hereof, and to submit to the Commission, within two business days
after the Company learns that no review of the Shelf Registration Statement will be made by the
staff of the Commission or that the staff has no further comments on the Shelf Registration
Statement, as the case may be, a request for acceleration of effectiveness (or post effective
amendment, if applicable) of the Shelf Registration Statement to a time and date not later than 48
hours after the submission of such request.

          (c) If (but without any obligation to do so) the Company proposes to register (including for
this purpose a registration effected by the Company for stockholders of the Company other than the holders) any of its stock or other securities under the Securities Act
in connection with the public offering of such securities (other than a registration relating
solely to the sale of securities to participants in a Company stock plan, a registration relating
to a

3

 

corporate reorganization or other transaction under Rule 145, or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of debt securities that
are also being registered), the Company shall, at such time, promptly give each holder written
notice of such registration. Upon the written request of each holder given within twenty (20) days
after mailing of such notice by the Company, the Company shall use its best efforts to cause to be
registered under the Securities Act all of the Registrable Securities that each such holder has
requested to be registered. The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2(c) prior to the effectiveness of such
registration whether or not any holder has elected to include securities in such registration. The
expenses of such withdrawn registration shall be borne by the Company in accordance with Section 4
hereof.

          (d) Any reference herein to a registration statement or prospectus as of any time shall be
deemed to include any document incorporated, or deemed to be incorporated, therein by reference as
of such time and any reference herein to any post-effective amendment to a registration statement
as of any time shall be deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time. Any reference to a prospectus as of any time shall include
any supplement thereto, preliminary prospectus, or any free writing prospectus in respect thereof.

     Section 3. Registration Procedures.

     The following provisions shall apply to the filing of the Shelf Registration Statement:

          (a) The Company shall:

               (i) prepare and file with the Commission, as soon as practicable but in any case within the
time period specified in Section 2(a), a Shelf Registration Statement on any form which may then be
utilized by the Company and which shall register all of the Registrable Securities for resale by
the holders thereof in accordance with such method or methods of disposition as may be specified by
the holders and use all reasonable best efforts to cause such Shelf Registration Statement to
become effective as soon as practicable but in any case within the time periods specified in
Section 2(a);

               (ii) as soon as practicable prepare and file with the Commission such amendments and
supplements to such Shelf Registration Statement (including without limitation, any required post
effective amendments) and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such Shelf Registration Statement for the period specified in Section
2(a) hereof and as may be required by the applicable rules and regulations of the Commission and
the instructions applicable to the form of such Shelf Registration Statement, including without
limitation, to include any holder to be named as a selling security holder therein;

               (iii) comply with the provisions of the Securities Act with respect to the disposition of
all of the Registrable Securities covered by such Shelf Registration Statement in accordance with
the intended methods of disposition by the holders provided for in such Shelf Registration
Statement;

4

 

               (iv) provide the Representative and its counsel the opportunity to participate in the
preparation of such Shelf Registration Statement, each prospectus included therein or filed with
the Commission and each amendment or supplement thereto, in each case by providing drafts and
otherwise, subject to customary confidentiality restrictions;

               (v) for a reasonable period prior to the filing of such Shelf Registration Statement, and
throughout the period specified in Section 2(a), make available at reasonable times at the
Company’s principal place of business or such other reasonable place for inspection by the persons
referred to in Section 3(a)(iv) such financial and other information and books and records of the
Company, and cause the officers, employees, counsel and independent certified public accountants of
the Company to be available to respond to such inquiries, as shall be reasonably necessary, in the
judgment of the counsel referred to in such Section, to conduct a reasonable investigation within
the meaning of Section 11 of the Securities Act, and in connection therewith, the Company shall use
its reasonable best efforts to cooperate with such persons in obtaining from the Company’s
independent auditors, and counsel to the Company, such comfort letters and opinions and statements
as shall be appropriate to be delivered to and for the benefit of any such person in the relevant
circumstances, and the Company shall pay any fees and expenses of its independent certified public
accountants and counsel in connection therewith;

               (vi) promptly notify each of the holders, and if requested by any such holder, confirm such
advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or
any prospectus amendment or supplement or post-effective amendment has been filed, and, with
respect to such Shelf Registration Statement or any post-effective amendment, when the same has
become effective, (B) of any comments by the Commission and by the blue sky or securities
commissioner or regulator of any state with respect thereto or any request by the Commission for
amendments or supplements to such Shelf Registration Statement or prospectus or for additional
information, (C) of the issuance by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation or threatening of any proceedings for that
purpose, (D) if at any time the representations and warranties of the Company contemplated by
Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (F) that such Shelf Registration Statement, prospectus, prospectus amendment or
supplement or post-effective amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the rules and regulations of the Commission thereunder or
contains an untrue statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing;

               (vii) use all reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of such registration statement or any post-effective amendment thereto at the
earliest practicable date;

5

 

               (viii) if requested by any holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by the applicable rules and regulations of
the Commission and as such holder specifies should be included therein relating to the terms of the
sale of such Registrable Securities, including information with respect to the amount of
Registrable Securities being sold by such holder, the name and description of such holder the
offering price of such Registrable Securities and any compensation payable in respect thereof, and
make all required filings of such prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus supplement or post-effective
amendment;

               (ix) furnish to each holder and the respective counsel referred to in Section 3(a)(iv) a
conformed copy of such Shelf Registration Statement, each such amendment and supplement thereto (in
each case including all exhibits thereto and documents incorporated by reference therein) and such
number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically so requested by such holder) and of the
prospectus included in such Shelf Registration Statement, in conformity in all material respects
with the applicable requirements of the Securities Act and the rules and regulations of the
Commission thereunder, and such other documents, as such holder may reasonably request in order to
facilitate the offering and disposition of the Registrable Securities owned by such holder and to
permit such holder to satisfy the prospectus delivery requirements of the Securities Act; and
subject to Section 3(b) below, the Company hereby consents to the use of such prospectus and any
amendment or supplement thereto by each such holder, in each case in the form most recently
provided to such person by the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus or any supplement or amendment thereto;

               (x) use all reasonable best efforts to (A) register or qualify the Registrable Securities
to be included in such Shelf Registration Statement under such securities laws or blue sky laws of
such jurisdictions as any holder thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the continuance of offers, sales
and dealings therein in such jurisdictions during the period the Shelf Registration is required to
remain effective under Section 2(b) above and for so long as may be necessary to enable any such
holder to complete its distribution of Securities pursuant to such Shelf Registration Statement and
(C) take any and all other actions as may be reasonably necessary to enable each such holder to
consummate the disposition in such jurisdictions of such Registrable Securities; provided, however,
that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation
in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements
of this Section 3(a)(x), or (2) consent to general service of process in any such jurisdiction or
become subject to taxation in any such jurisdiction unless already subject to service of process or
taxation in such jurisdiction and unless required by law;

               (xi) use all reasonable best efforts to obtain the consent or approval of each governmental
agency or authority, whether federal, state or local, which may be required to effect the Shelf
Registration or the offering or sale in connection therewith or to enable the

6

 

selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities;

               (xii) unless any Registrable Securities shall be in book-entry only form, cooperate with
the holders to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates, if so required by any securities exchange
upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and which certificates
shall not bear any restrictive legends;

               (xiii) notify in writing each holder of Registrable Securities of any proposal by the
Company to amend or waive any provision of this Agreement pursuant to Section 8(i) hereof and of
any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of
the amendment or waiver proposed or effected, as the case may be; and

               (xiv) comply with all applicable rules and regulations of the Commission, and make
generally available to its securityholders as soon as practicable but in any event not later than
eighteen months after the effective date of such Shelf Registration Statement, an earning statement
of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including,
at the option of the Company, Rule 158 thereunder).

          (b) In the event that the Company would be required, pursuant to Section 3(a)(vi)(F) above,
to notify the holders of the matter described therein, the Company shall promptly prepare and
furnish to each of the holders a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus
shall conform in all material respects to the applicable requirements of the Securities Act and the
rules and regulations of the Commission thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then existing. Each holder
agrees that upon receipt of any notice from the Company pursuant to Section 3(a)(vi)(F) hereof,
such holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the
Shelf Registration Statement applicable to such Registrable Securities until such holder shall have
received copies of such amended or supplemented prospectus, and if so directed by the Company, such
holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent
file copies, then in such holder’s possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice.

          (c) The Company may require such holder to furnish to the Company such information regarding
such holder, the Registrable Securities held by it, and such holder’s intended method of
distribution of Registrable Securities as may reasonably be required in order to comply with the
Securities Act. Each such holder agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such holder to
the Company or of the occurrence of any event in either case as a result of which any
prospectus relating to such Shelf Registration contains or would contain an untrue statement of a
material fact regarding such holder or such holder’s intended method of disposition of such
Registrable

7

 

Securities or omits to state any material fact regarding such holder or such holder’s
intended method of disposition of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing, and promptly to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such prospectus shall not contain,
with respect to such holder or the disposition of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then existing.

          (d) Notwithstanding any other provision of this Agreement, if after January 31, 2008 the
Company shall furnish to the holders a certificate signed by the Chief Executive Officer, the
Chairman of the Board, the Chief Financial Officer or the General Counsel of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for the Shelf Registration to be effected at such
time, in which event the Company shall have the right to defer the filing of the Shelf Registration
Statement for a period of not more than forty-five (45) days (any such period, a “Suspension
Period”), provided, however, that the Company shall not utilize this right more than two times in
any twelve (12) month period and provided further, that the Company shall not register any other of
its shares during any Suspension Period.

          (e) The Company shall provide to each affected holder any comments or notifications of the
Commission or any other applicable regulatory authority that bears on the status of or disclosure
with respect to any such holder, or if applicable, the holders as a class, and in the event
requested by any holder, withdraw information relating to such holder as a selling shareholder from
such Shelf Registration Statement and any other related offering materials. In the event such
holder withdraws from such Shelf Registration Statement, such holder shall be eligible to
participate in any subsequent Shelf Registration Statement filed by the Company as contemplated by
Section 2(a), and the Company shall have no liability relating to the decision of such holder to
withdraw from such Shelf Registration Statement and shall not be deemed to have defaulted in its
obligations under this Agreement in any respect.

          (f) The Company shall as expeditiously as possible: (i) secure designation and quotation of
all of the Registrable Securities covered by a Registration Statement on The NASDAQ Capital Market
and (ii) provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereto and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration.

     Section 4. Registration Expenses.

     The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to
the Company’s performance of or compliance with this Agreement, including (a) all Commission and
any NASD registration, filing and review fees and expenses (b) all fees and expenses in connection
with the qualification of the Securities for offering and sale under the State securities and blue
sky laws referred to in Section 3(a)(x) hereof and determination of their eligibility for investment under the laws of such jurisdictions as or the holders may
designate, (c) all expenses relating to the preparation, printing, production, distribution and
reproduction of each registration statement required to be filed hereunder, each prospectus
included therein or

8

 

prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or
producing blue sky memoranda and all other documents in connection with the offering, sale or
delivery of Securities to be disposed of (including certificates representing the Securities), (d)
messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities
and the preparation of documents referred in clause (c) above, (e) internal expenses (including all
salaries and expenses of the Company’s officers and employees performing legal or accounting
duties), (f) fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or “cold comfort” letters
required by or incident to such performance and compliance), (g) reasonable fees, disbursements and
expenses of one counsel for the holders retained in connection with a Shelf Registration, as
selected by the holders of at least a majority in aggregate principal amount of the Registrable
Securities held by holders (which counsel shall be reasonably satisfactory to the Company) in an
amount not to exceed $10,000, and (h) fees, expenses and disbursements of any other persons,
including special experts, retained by the Company in connection with such registration
(collectively, the “Registration Expenses”). To the extent that any Registration Expenses are
incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor.
Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay
all agency fees and commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or other advisors or
experts retained by such holders (severally or jointly), other than the counsel and experts
specifically referred to above.

     Section 5. Representations and Warranties.

     The Company represents and warrants to, and agrees with, each Purchaser and each of the
holders from time to time of Registrable Securities that:

          (a) Each registration statement covering Registrable Securities and each prospectus
(including any preliminary or summary prospectus) contained therein or furnished pursuant to
Section 3(c) or Section 3(d) hereof and any further amendments or supplements to any such
registration statement or prospectus, when it becomes effective or is filed with the Commission, as
the case may be, will conform in all material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and at all times subsequent to the Effective Time when
a prospectus would be required to be delivered under the Securities Act, other than from (i) such
time as a notice has been given to holders of Registrable Securities pursuant to Section
3(a)(vi)(F) hereof until (ii) such time as the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(b) hereof, each such registration statement, and each prospectus
contained therein or furnished pursuant to Section 3(a) hereof, as then
amended or supplemented, will conform in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein

9

 

or necessary to make the statements therein not misleading in the light of the circumstances then
existing; provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information furnished in
writing to the Company by a holder of Registrable Securities expressly for use therein.

          (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a)
hereof, when they become or became effective or are or were filed with the Commission, as the case
may be, will conform or conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and none of such documents will contain or contained an
untrue statement of a material fact or will omit or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by a holder of
Registrable Securities expressly for use therein.

          (c) The compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any subsidiary is a party or by which the Company or any subsidiary is bound or to which
any of the property or assets of the Company or any Subsidiary is subject, (ii) result in any
violation of the provisions of the certificate of incorporation or organization or the by-laws or
other governing documents, as applicable, of the Company or (iii) result in any violation of any
statute or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any subsidiary or any of their properties except, in the case of
clauses (i) and (iii), for such conflicts, breaches, violations or defaults as would not
individually, or in the aggregate, have a material adverse effect on the consolidated financial
position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken
as a whole; and no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement, except (i) the registration under the
Securities Act of the Securities, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or blue sky laws in connection with the
offering and distribution of the Securities, (iii) the filing of a notification form with the
Nasdaq Capital Market within five days after the Closing Date (as defined in the Merger Agreement),
(iv) such additional post-Closing filings as may be required to comply with applicable state and
federal securities laws and the listing requirements of the Nasdaq Capital Market and (v) such
consents, approvals, authorizations, registrations or qualifications that have been obtained and
are in full force and effect as of the date hereof.

          (d) This Agreement has been duly authorized, executed and delivered by the Company.

10

 

     Section 6. Indemnification.

          (a) Indemnification by the Company. The Company will indemnify and hold harmless each of
the holders of Registrable Securities included in a Shelf Registration Statement and the directors,
officers, members, partners, employees, agents and representatives thereof, and each other person,
if any, who controls such holder within the meaning of the Securities Act (the “Holder
Indemnitees”) against any losses, claims, damages or liabilities, joint or several, incurred in
investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation
or appeal taken from the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the Commission, whether pending or threatened, whether or not an
indemnified party is or may be a party thereto, to which such person may become subject under the
Securities Act, the Exchange Act or any other law, including without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Shelf Registration Statement, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any Shelf Registration
Statement under which such Registrable Securities were registered under the Securities Act, or any
preliminary, final or free writing prospectus contained therein or furnished by the Company to any
such holder or any amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any other violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated thereunder, in connection with any matter relating to the Shelf Registration
or the Shelf Registration Statement, and will reimburse such holder, such holder for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the Company shall not be
liable to any such person in any such case to the extent that any such loss, claim, damage or
liability (x) arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, or preliminary, final or free
writing prospectus, or amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by any such person expressly for use therein, or (y)
arises from such person’s use of the Shelf Registration Statement or prospectus or any amendments
or supplements thereto during a Suspension Period.

          (b) Indemnification by the Holders. Each holder agrees, severally and not jointly, to (i)
indemnify and hold harmless the Company and all other Holders Indemnitees against any losses,
claims, damages or liabilities to which the Company or such other persons may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such registration statement, or any preliminary, final or free
writing prospectus contained therein or furnished by the Company to any such holder, or any
amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written information furnished to
the Company by such holder expressly for use therein, and (ii) reimburse the Company for any legal

11

 

or other expenses reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that no such holder
shall be required to undertake liability to any person under this Section 6(b) for any amounts in
excess of the dollar amount of the net proceeds to be received by such holder from the sale of such
holder’s Registrable Securities pursuant to such registration.

          (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection
(a) or (b) above of written notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in
writing of the commencement of such action; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified party otherwise than
under the indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof to the
extent the indemnifying party is not materially prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall notify an indemnifying party of
the commencement thereof, such indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such indemnified party
for any legal expenses of other counsel or any other expenses, in each case subsequently incurred
by such indemnified party, in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that such indemnified party shall have the right
to retain its own counsel with the fees and expenses of not more than one counsel for such
indemnified party to be paid by the Company, if, in the reasonable opinion of such indemnified
party the representation by such counsel of such indemnified party and the Company would be
inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding, and provided, further,
that the indemnifying party shall not be required to pay for more than one such separate counsel
for all similarly situated indemnified parties in connection with any indemnification claim. No
indemnifying party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with respect to, any pending
or threatened action or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

          (d) Contribution. If for any reason the indemnification provisions contemplated by Section
6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of
the

12

 

indemnifying party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by such indemnifying party or by such indemnified party, and
the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were determined by pro rata allocation
(even if the holders were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
6(d). The amount paid or payable by an indemnified party as a result of the losses, claims,
damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 6(d), no holder shall be required to contribute any amount in excess of the amount
by which the dollar amount of the proceeds received by such holder from the sale of any Registrable
Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the
amount of any damages which such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The holders’
obligations in this Section 6(d) to contribute shall be several in proportion to the principal
amount of Registrable Securities registered by them and not joint.

          (e) The obligations of the Company under this Section 6 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each holder and each person, if any, who
controls any holder within the meaning of the Securities Act; and the obligations of the holders
contemplated by this Section 6 shall be in addition to any liability which the respective holder
may otherwise have and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his consent, is named in any registration
statement as about to become a director of the Company) and to each person, if any, who controls
the Company within the meaning of the Securities Act.

     Section 7. Rule 144.

     The Company covenants to the holders of Registrable Securities that to the extent it shall be
required to do so under the Exchange Act, the Company shall timely file the reports required to be
filed by it under the Exchange Act or the Securities Act (including the reports under Section 13
and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144) and the rules and
regulations adopted by the Commission thereunder, and shall take such further action
as any holder of Registrable Securities may reasonably request, all to the extent required
from time to time to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitations of the exemption provided by Rule 144, as such Rule may

13

 

be amended from time to time, or any similar or successor rule or regulation hereafter adopted by
the Commission. Upon the request of any holder of Registrable Securities in connection with that
holder’s sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as
to whether it has complied with such requirements.

     Section 8. Miscellaneous.

          (a) No Inconsistent Agreements . The Company represents, warrants, covenants and agrees
that it has not granted, and shall not grant, registration rights with respect to Registrable
Securities or any other securities which would be inconsistent with the terms contained in this
Agreement.

          (b) Specific Performance. The parties hereto acknowledge that there would be no adequate
remedy at law if the Company fails to perform any of its obligations hereunder and that the
Purchasers and the holders from time to time of the Registrable Securities may be irreparably
harmed by any such failure, and accordingly agree that the Purchasers and such holders, in addition
to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of the Company under this Agreement in accordance with the
terms and conditions of this Agreement, in any court of the United States or any State thereof
having jurisdiction.

          (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered by hand, if
delivered personally, by facsimile or by courier, or three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested) as follows: If to the
Company, to it at 400 Minuteman Road, Andover, MA 01810, Attention: James W. Pluntze, Facsimile:
(978) 946-7803 with a copy to BRL Law Group LLC, 31 St. James Avenue, Suite 850, Boston, MA 02116,
Attention: Thomas B. Rosedale, Esq., Facsimile: (617) 399-6930, if to the Representative, to it at
c/o GTCR Golder Rauner, LLC, 6100 Sears Tower, Chicago, Illinois 60606, Attention: Philip A.
Canfield, Facsimile: (312) 382-2201, and if to a holder, to the address of such holder set forth in
the security register or other records of the Company, or to such other address as the Company or
any such holder may have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

          (d) Parties in Interest. All the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the parties hereto, the Purchasers
and the holders from time to time of the Registrable Securities and the respective successors and
assigns of the parties hereto and such holders. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without any further
writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by taking
and holding such Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms
and provisions of, this Agreement.

14

 

          (e) Survival. The respective indemnities, agreements, representations, warranties and each
other provision set forth in this Agreement or made pursuant hereto shall remain in full force and
effect regardless of any investigation (or statement as to the results thereof) made by or on
behalf of any holder of Registrable Securities, any director, officer or partner of such holder or
any director, officer or partner thereof, or any controlling person of any of the foregoing, and
shall survive delivery of and payment for the Registrable Securities pursuant to the Merger
Agreement and the transfer and registration of Registrable Securities by such holder and the
consummation of the transactions contemplated herein.

          (f) Governing Law . This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.

          (g) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF COURTS OF UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, OR THE STATE
OF DELAWARE, AND ANY APPELLATE COURT THEREFROM, FOR THE RESOLUTION OF ANY AND ALL DISPUTES,
CONTROVERSIES, CONFLICTS, LITIGATION OR ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE SUBJECT MATTER HEREOF AND AGREES NOT TO COMMENCE ANY LITIGATION OR ACTIONS ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE SUBJECT MATTER HEREOF IN ANY OTHER COURT.

          (h) Headings. The descriptive headings of the several Sections and paragraphs of this
Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.

          (i) Entire Agreement; Amendments. This Agreement and the other writings referred to herein
or delivered pursuant hereto which form a part hereof contain the entire understanding of the
parties with respect to its subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This Agreement may be
amended and the observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written instrument duly
executed by the Company and the holders of at least a majority of the Registrable Securities at the
time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section 8(i), whether or not
any notice, writing or marking indicating such amendment or waiver appears on such Registrable
Securities or is delivered to such holder.

          (j) Inspection. For so long as this Agreement shall be in effect, this Agreement and a
complete list of the names and addresses of all the holders of Registrable Securities shall be made
available for inspection and copying on any business day by any holder of Registrable Securities
for proper purposes only (which shall include any purpose related to the rights of the
holders of Registrable Securities under the Securities and this Agreement) at the offices of
the Company at the address thereof set forth in Section 8(c) above.

15

 

          (k) Counterparts. This Agreement may be executed by the parties in counterparts, each of
which shall be deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument. If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance hereof by you, on behalf
of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding
agreement among the Purchasers and the Company.

[Signature Pages Follow]

16

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Registration Rights Agreement as of
the date first above written.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	NaviSite, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James W. Pluntze
	 

	 	 	 	 
	 	 	Name: James W. Pluntze
	 	 	Title: Chief Financial Officer
	 
	 	 	 	 
	 	 	REPRESENTATIVE:
	 
	 	 	 	 
	 	 	GTCR FUND VI, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	GTCR Partners VI, L.P.
	 

	 	Its:
	 	General Partner
	 
	 	 	 	 
	 

	 	By:
	 	GTCR Golder Rauner, L.L.C.
	 

	 	Its:
	 	General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Philip A. Canfield
	 

	 	 	 	 
	 	 	Name: Philip A. Canfield
	 	 	Its: Principal

17

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