Document:

Exhibit
10.2

 

 

McCORMICK & COMPANY, INCORPORATED

2004 DIRECTORS’ NON-QUALIFIED STOCK OPTION PLAN

STOCK OPTION NO. {NUMBER}

 

 

                THIS AGREEMENT, made
and entered into this __ day of January 2005, by and between McCORMICK &
COMPANY, INCORPORATED, a Maryland corporation, with its principal offices in
Baltimore County, Maryland (hereinafter called the “Company”) and {DIRECTOR}
(hereinafter called “Director”).

 

R E C I T A L S :

 

                WHEREAS, the Board
of Directors of the Company is of the opinion that the interests of the Company
and its shareholders will be advanced by encouraging its directors to become
owners of capital stock in the Company; and

 

                WHEREAS, the Board,
on the 27th day of January, 2004, authorized and approved a stock option plan
for members of the Board of Directors who are not employees of the Company,
subject to stockholder approval; and

 

                WHEREAS, the plan as
amended on January 19, 2000 provides that an option is to be granted for each
member of the Company’s Board of Directors who is not an employee of the
Company on the date on which the Board of Directors meets in January of each
year.

 

                NOW THEREFORE, in
consideration of the foregoing and of the covenants and agreements below set
forth, the parties hereby agree as follows:

 

                1.             The Director agrees to remain as a
director of the Company until the next Annual Meeting of Stockholders or until
a successor is duly elected and qualified.

 

                2.             The Company hereby grants to the
Director a non-qualified stock option to purchase, on the terms and conditions
hereinafter set forth, an aggregate of 5,000 shares of stock of the Company,
consisting of 2,500 shares of Common Stock, without par value, and 2,500 shares
of Common Stock Non-Voting, without par value, at a purchase price of $_____
per share, for each class of stock, which price is not less than 100% of the
fair market value at the date of this grant. 
In lieu of cash payments, the Director may surrender shares of Company
stock owned by the Director having a market value equal to the option price for
the number of shares to be purchased pursuant to the exercise of all or part of
this option.  The option granted
hereunder shall be exercisable, as hereinafter provided, between January __,
2005 and January __, 2015.  Director may
exercise this option as follows:

 

	
  January
  __, 2005 - January __, 2006

  	
   

  	
  None
  of the shares granted hereunder;

  
	
   

  	
   

  	
   

  

 

 

	
  January
  __, 2006 - January __, 2007

  	
   

  	
  Not
  more than 25% of the shares granted hereunder;

  
	
   

  	
   

  	
   

  
	
  January
  __, 2007 - January __, 2008

  	
   

  	
  Not
  more than 50% of the shares granted hereunder less any shares for which the
  option has been previously exercised;

  
	
   

  	
   

  	
   

  
	
  January
  __, 2008 - January __, 2009

  	
   

  	
  Not
  more than 75% of the shares granted hereunder less any shares for which the
  option has been previously exercised;

  
	
   

  	
   

  	
   

  
	
  January
  __, 2009 - January 26, 2015

  	
   

  	
  100%
  of the shares granted hereunder less any shares for which the option has been
  previously exercised.

  

 

                3.             This option is not transferable by
the Director otherwise than by will or by the laws of descent and distribution
and is exercisable during the Director’s lifetime only by the Director.

 

                                (a)           Subject to the provisions of
subparagraphs 3(b) and 3(c), all rights to exercise this option shall terminate
thirty (30) days after the Director ceases to be a member of the Board of
Directors of the Company.

 

                                (b)           If the Director ceases to be a member
of the Board of Directors on account of 
total and permanent disability or 
retirement from the Board of Directors, the Director may exercise this
option in full, or from time to time in part, regardless of the restrictions
that might otherwise apply with respect to the number of shares which may be
purchased pursuant to Paragraph 2 hereof, for a period of five (5) years after
leaving the Board or until the expiration date of this option, if earlier.

 

                                (c)           If the Director dies prior to
termination of this option without having exercised this option, the estate or
other representative may exercise this option in full, or from time to time in
part, regardless of the restrictions that might otherwise apply with respect to
the number of shares which may be purchased pursuant to Paragraph 2 hereof,
until the expiration date of this option.

 

                                (d)           In no event may either the Director
or the estate exercise all or any portion of this option after its expiration
date.

 

                                (e)           An exercise of this option with
respect to a part of the shares to which it relates shall not preclude a
subsequent exercise as to any remaining part.

 

                4.             Notwithstanding any provision of
this Agreement to the contrary, the option granted hereunder shall be
exercisable for 100% of the shares subject to the option, less any shares for
which the option has been previously exercised, upon the occurrence of any of
the following events (each an “Event”) at any time prior to the expiration or
exercise of the option:

 

 

(a)           the consolidation or merger of the Company with or into
another entity where the Company is not the continuing or surviving
corporation, or pursuant to which shares of the Company’s capital stock are
converted into cash, securities or other property, except for any consolidation
or merger of the Company in which the holders (excluding any “Substantial
Stockholders” as defined in Section 4 Common Stock subsection (b)(2)(H) of the
Certificate of Incorporation of the Company as in effect as of the date hereof
(the “Charter”)) of the Company’s (i) voting common stock, (ii) non-voting
common stock, and (iii) other classes of voting stock, if any, immediately
before the consolidation or merger shall, upon consummation of the
consolidation or merger, own in excess of 50% of the voting stock of the
surviving corporation;

 

(b)           any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party
as a single plan) of all or substantially all of the assets of the Company;

 

(c)           any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) shall as of the date hereof become the beneficial owner (as defined in
Section 4 Common Stock subsection (b)(2)(C) of the Charter), directly or
indirectly, of securities of the Company representing more than 13% (the
“Specified Percentage”) of the voting power of all the outstanding securities
of the Company having the right to vote in an election of the Board (after
giving effect, to the extent applicable, to the operation of Section 4 Common
Stock subsection (b) of the Charter) (including, without limitation, any
securities of the Company that any such person has the right to acquire
pursuant to any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, which shall be deemed beneficially owned by such
person), provided, however, that in the event that the vote limitation with respect
to Substantial Stockholders set forth in Section 4 Common Stock subsection (b)
of the Charter becomes inoperative by virtue of the operation of Section 4
Common Stock subsection (b)(12) of the Charter or otherwise, the “Specified
Percentage” shall be increased, without requirement for further action, to 35%;
or

 

(d)           individuals who as of the date hereof constitute the
entire Board and any new directors whose election by the Board, or whose
nomination by the Board to stand for election by the Company’s stockholders,
shall have been approved by a vote of at least a majority of the directors then
in office (which directors then in office either were directors as of the date
hereof or whose election or nomination for election shall have been so
approved), shall cease for any reason to constitute a majority of the members
of the Board.

 

                                Upon the occurrence of an Event, the
Director shall have the right to surrender the option outstanding immediately
prior to the Event in exchange for a cash payment equal to the excess of the
Transaction Value (defined below) of the shares subject to the option over the
option exercise price.  If the Director
has more than one option subject to the terms set forth in this Paragraph 4,
such right with respect to each option may be exercised independently of the
other option(s).  No later than five days
following the Event, the Company shall provide the Director with written notice
of the Event.  The Director may exercise
such right by surrendering such options to the Company either within 30 days
after receipt of the notice or within 10 days after the consummation of the
Event, whichever is later.  The Company
shall make the payment

 

 

in a cash lump sum within 30
days after the Director surrenders such options.  The Director’s option shall terminate upon
receipt of payment therefor pursuant to this provision.

 

                                The Transaction Value shall be equal
to the greater of (i) the highest fair market value of a share of the Company’s
Common Stock at the time of, or at any time during the 60 days preceding, the
Event, or (ii) the highest price paid for a share of the Company’s Common Stock
in any bona fide transaction related to the Event occurring no later than the
closing date of the Event.

 

                                In connection with an Event, and
solely with respect to options not surrendered in connection with such Event as
provided above, the Company may make provision for the assumption of
outstanding options by, or the substitution for outstanding options of new
options covering the stock of, a surviving or successor corporation or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices so as to prevent dilution or enlargement of the value of
the original options, all as determined by the Company at its discretion.

 

                5.             In the event that the Company’s
stockholders do not approve the Plan by January 26, 2005, the Plan shall
automatically terminate and the option granted hereunder shall become null and
void.

 

                6.             The Company shall not be required
to issue or deliver any certificate or certificates for shares of its capital
stock purchased upon the exercise of the option herein granted until and unless
the offering and sale of the shares represented thereby may legally be made
under the Securities Act of 1933, as amended, and the applicable rules and
regulations of the Securities and Exchange Commission.

 

                7.             The Company may require the
Director to agree that any shares of capital stock purchased upon the exercise
of this option shall be acquired for investment and not for distribution and
that each notice of the exercise of any portion of this option shall be
accompanied by a written representation that the shares of capital stock are
being acquired in good faith for investment and not for distribution.

 

                8.             In
the event that, prior to the delivery by the Company of all the shares of the
capital stock in respect of which this option is hereby granted, there is any
change in the Common Stock or Common Stock Non-Voting of the Company through
the declaration of stock dividends, or through re-capitalization resulting in
stock splits, or combinations or exchanges of shares, or otherwise, the number
of shares subject to this option and the option price shall be proportionately
adjusted.

 

                9.             The Director shall not have any of
the rights or privileges of a stockholder of the Company in respect of any of
the shares issuable upon the exercise of the option herein granted unless and
until certificates representing such shares have been issued and delivered.

 

                10.           Except as otherwise herein provided,
the option herein granted and the rights and privileges conferred hereby shall
not be transferred, assigned, pledged, or hypothecated in any

 

 

way (whether by operation of law or otherwise) and shall not be subject
to execution, attachment, or similar process. 
Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise
dispose of said option or of any right or privilege conferred hereby contrary
to the provisions hereof or upon the levy of any attachment or similar process
upon the rights and privileges conferred hereby, this option and the rights and
privileges conferred hereby shall immediately become null and void.

 

                11.           This option may be exercised by
sending a written notice together with full payment for the number of shares to
be purchased to the Company or Agents designated by the Company.  Such notice and any other notice to be given
under the terms of this agreement shall be addressed to the Company in care of
its Treasurer at 18 Loveton Circle, Sparks, Maryland 21152-6000 or to Agents of
the Company at addresses designated by the Company, and any notice to be given
to the Director shall be sent to the address the Director has given to the
Company or at such other address as either party may hereafter designate in
writing to the other.  Any such notice
shall be deemed to have been duly given if it is personally delivered to the
Treasurer or when enclosed in a properly sealed envelope or wrapper addressed
as aforesaid, registered and deposited, postage and registry fee prepaid, in a
post office or branch post office regularly maintained by the United States
Government.

 

                12.           This option shall be binding upon and
inure to the benefit of any successor or successors of the Company.

 

                IN WITNESS WHEREOF,
the Company has caused this document to be executed on its behalf by its duly
authorized officers.

 

 

	
  ATTEST:

  	
   

  	
   

  	
  McCORMICK
  & COMPANY, INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Robert W. Skelton

  	
   

  	
   

  	
  Robert J. Lawless

  
	
  Secretary

  	
   

  	
   

  	
  Chairman, President

  
	
   

  	
   

  	
   

  	
   

  	
  & Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  DirectorExhibit 10.1

 

EXECUTION COPY

 

 

AGREEMENT
AND PLAN OF MERGER

 

by
and among

 

JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION

 

JPM
MERGER SUB INC.

 

and

 

VASTERA,
INC.

 

dated

 

January
6, 2005

 

 

Table of Contents

 

 

	
  ARTICLE
  I THE MERGER

  	
   

  
	
  Section
  1.1

  	
  The
  Merger

  	
   

  
	
  Section
  1.2

  	
  Effective
  Time

  	
   

  
	
  Section
  1.3

  	
  Closing

  	
   

  
	
  Section
  1.4

  	
  Effects
  of the Merger

  	
   

  
	
  Section
  1.5

  	
  Certificate
  of Incorporation and Bylaws

  	
   

  
	
  Section
  1.6

  	
  Directors
  and Officers of the Surviving Corporation

  	
   

  
	
  Section
  1.7

  	
  Subsequent
  Actions

  	
   

  
	
  ARTICLE
  II MERGER CONSIDERATION; CONVERSION OF SECURITIES

  	
   

  
	
  Section
  2.1

  	
  Merger
  Consideration; Conversion of Capital Stock

  	
   

  
	
  Section
  2.2

  	
  Payment
  of Shares in the Merger

  	
   

  
	
  Section
  2.3

  	
  Tax
  Withholding

  	
   

  
	
  Section
  2.4

  	
  Lost,
  Stolen or Destroyed Certificates

  	
   

  
	
  Section
  2.5

  	
  Option
  Plans; ESPP

  	
   

  
	
  Section
  2.6

  	
  Dissenting
  Shares

  	
   

  
	
  Section
  2.7

  	
  Adjustment
  for Dilution

  	
   

  
	
  ARTICLE
  III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
   

  
	
  Section
  3.1

  	
  Organization

  	
   

  
	
  Section
  3.2

  	
  Capitalization

  	
   

  
	
  Section
  3.3

  	
  Authorization;
  Validity of Agreement; Company Action

  	
   

  
	
  Section
  3.4

  	
  Board
  Approvals

  	
   

  
	
  Section
  3.5

  	
  Required
  Vote

  	
   

  
	
  Section
  3.6

  	
  Consents
  and Approvals; No Violations

  	
   

  
	
  Section
  3.7

  	
  Company
  SEC Documents, Financial Statements and Sarbanes-Oxley Compliance

  	
   

  
	
  Section
  3.8

  	
  Absence
  of Certain Changes

  	
   

  
	
  Section
  3.9

  	
  No
  Undisclosed Liabilities

  	
   

  
	
  Section
  3.10

  	
  Litigation

  	
   

  
	
  Section
  3.11

  	
  Employee
  Benefit Plans; ERISA

  	
   

  
	
  Section
  3.12

  	
  Taxes.

  	
   

  
	
  Section 3.13

  	
  Contracts

  	
   

  
	
  Section 3.14

  	
  Real and Personal Property

  	
   

  
	
  Section 3.15

  	
  Potential Conflict of Interest

  	
   

  
	
  Section 3.16

  	
  Intellectual Property

  	
   

  
	
  Section 3.17

  	
  Labor Matters

  	
   

  
	
  Section 3.18

  	
  Compliance with Laws; Company Permits

  	
   

  
	
  Section 3.19

  	
  Warranties

  	
   

  
	
  Section 3.20

  	
  Environmental Matters

  	
   

  
	
  Section 3.21

  	
  Information in the Proxy Statement

  	
   

  
	
  Section 3.22

  	
  Opinion of Financial Advisor

  	
   

  

 

 

	
  Section 3.23

  	
  Insurance

  	
   

  
	
  Section 3.24

  	
  Brokers

  	
   

  
	
  Section 3.25

  	
  Certain Business Practices

  	
   

  
	
  Section 3.26

  	
  Takeover Statutes

  	
   

  
	
  Section 3.27

  	
  Material Acquisitions

  	
   

  
	
  ARTICLE
  IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE MERGER SUB

  	
   

  
	
  Section 4.1

  	
  Organization

  	
   

  
	
  Section 4.2

  	
  Authorization; Validity of Agreement;
  Necessary Action

  	
   

  
	
  Section 4.3

  	
  Consents and Approvals; No Violations

  	
   

  
	
  Section 4.4

  	
  Brokers

  	
   

  
	
  Section 4.5

  	
  Funds

  	
   

  
	
  Section 4.6

  	
  Information Supplied

  	
   

  
	
  ARTICLE
  V CONDUCT OF BUSINESS PENDING THE MERGER

  	
   

  
	
  Section 5.1

  	
  Interim Operations of the Company

  	
   

  
	
  Section 5.2

  	
  No Solicitation

  	
   

  
	
  ARTICLE
  VI ADDITIONAL AGREEMENTS

  	
   

  
	
  Section 6.1

  	
  Proxy Statement

  	
   

  
	
  Section 6.2

  	
  Meeting of Stockholders of the Company

  	
   

  
	
  Section 6.3

  	
  Notification of Certain Matters

  	
   

  
	
  Section 6.4

  	
  Access; Confidentiality

  	
   

  
	
  Section 6.5

  	
  Publicity

  	
   

  
	
  Section 6.6

  	
  Indemnification; Directors’ and Officers’
  Insurance

  	
   

  
	
  Section 6.7

  	
  Reasonable Best Efforts

  	
   

  
	
  Section 6.8

  	
  State Takeover Laws

  	
   

  
	
  Section 6.9

  	
  Subsequent Financial Statements

  	
   

  
	
  Section 6.10

  	
  Employee Matters

  	
   

  
	
  ARTICLE VII CONDITIONS

  	
   

  
	
  Section 7.1

  	
  Conditions to Each Party’s Obligations to
  Effect the Merger

  	
   

  
	
  Section 7.2

  	
  Additional Conditions to the Obligations of
  Parent and Merger Sub

  	
   

  
	
  Section 7.3

  	
  Additional Conditions to the Obligations of
  the Company

  	
   

  
	
  ARTICLE VIII TERMINATION

  	
   

  
	
  Section 8.1

  	
  Termination

  	
   

  
	
  Section 8.2

  	
  Effect of Termination; Termination Fees

  	
   

  
	
  ARTICLE IX
  MISCELLANEOUS

  	
   

  
	
  Section 9.1

  	
  Amendment and Modification

  	
   

  
	
  Section 9.2

  	
  Non-survival of Representations and
  Warranties

  	
   

  
	
  Section 9.3

  	
  Expenses

  	
   

  
	
  Section 9.4

  	
  Notices

  	
   

  
	
  Section 9.5

  	
  Definitions; Interpretations

  	
   

  
	
  Section 9.6

  	
  Counterparts

  	
   

  
	
  Section 9.7

  	
  Entire Agreement

  	
   

  
	
  Section 9.8

  	
  Severability

  	
   

  
	
  Section 9.9

  	
  Specific Performance

  	
   

  
	
  Section 9.10

  	
  Governing Law and Jurisdiction

  	
   

  
	
  Section 9.11

  	
  Assignment

  	
   

  

 

 

	
  Section
  9.12

  	
  Rules
  of Construction

  	
   

  
	
  Section
  9.13

  	
  No
  Waiver; Remedies Cumulative

  	
   

  
	
  Section
  9.14

  	
  Parties
  in Interest

  	
   

  
	
  Section
  9.15

  	
  Waiver
  of Jury Trial

  	
   

  

 

 

AGREEMENT
AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated
January 6, 2005, by and among JPMorgan
Chase Bank, National Association, a national banking association (“Parent”),
JPM Merger Sub Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of Parent (the “Merger Sub”), and Vastera, Inc., a Delaware
corporation (the “Company”).

 

RECITALS

 

WHEREAS,
Parent, Merger Sub and the Company intend to effect a merger of Merger Sub with
and into the Company (the “Merger”) in accordance with the terms and
conditions of this Agreement and Delaware General Corporation Law (the “DGCL”);

 

WHEREAS, the
board of directors of the Company (the “Company Board of Directors”) has
unanimously determined that the consideration to be paid for each issued and
outstanding share of common stock, par value $0.01, of the Company (the “Common
Stock”) in the Merger is fair to the holders of such Common Stock and has determined that the Merger upon the terms
and subject to the conditions set forth in this Agreement is advisable, fair to
and in the best interests of the holders of such Common Stock;

 

WHEREAS,
concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to Parent’s and the Merger Sub’s willingness to enter
into this Agreement, the stockholders of the Company listed on Exhibit A
have entered into Voting Agreements in the form attached hereto as Exhibit B
(the “Voting Agreements”); and

 

WHEREAS, the
Company, Parent and the Merger Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Merger;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:

 

1

 

ARTICLE
I

 

THE MERGER

 

Section 1.1             The Merger.  Upon the terms and subject to the conditions
of this Agreement and the applicable provisions of the DGCL, at the Effective
Time, the Company and the Merger Sub shall consummate the Merger pursuant to
which (i) the Merger Sub shall be merged with and into the Company, (ii) the
separate corporate existence of the Merger Sub shall thereupon cease, and (iii)
the Company shall continue as the surviving corporation in the Merger subject
to the laws of the state of Delaware. The Company, in its capacity as the
corporation surviving in the Merger, is herein sometimes referred to as the “Surviving
Corporation.”

 

Section 1.2             Effective
Time.  As promptly as possible on the
Closing Date, Parent, the Merger Sub and the Company shall cause a certificate
of merger (the “Certificate of Merger”) to be executed and filed with
the Secretary of State of the State of Delaware as provided in the DGCL and
shall make all other filings or recordings required under the DGCL to
effectuate the Merger.  The Merger shall
become effective at the time of filing the Certificate of Merger with the
Secretary of State of the State of Delaware or such later time as is agreed
upon by the parties and specified in the Certificate of Merger (the date and
time the Merger becomes effective being referred to herein as the “Effective
Time.”)

 

Section
1.3             Closing.  The closing of the Merger (the “Closing”)
will take place at 10:00 a.m., Eastern Standard Time, on a date to be specified
by the parties, such date to be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article VII or
such other date as the parties may agree (the “Closing Date”), at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP, 1440 New York Avenue,
N.W., Washington, DC  20005, or place as
the parties shall agree.

 

Section
1.4             Effects of the Merger.  From and after the Effective Time the Merger
shall have the effects set forth in the DGCL. 
Without limiting the generality of the foregoing, and subject thereto
and any other applicable laws, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and the Merger Sub
shall vest in the Surviving Corporation, and all debts, liabilities,
restrictions, disabilities and duties of the Company and the Merger Sub shall
become the debts, liabilities, restrictions, disabilities and duties of the
Surviving Corporation.

 

Section 1.5             Certificate
of Incorporation and Bylaws.

 

(a)           The Certificate of Incorporation of
the Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended in accordance with applicable law and such certificate of
incorporation, provided, however, that at the Effective Time
Article IV of the Certificate of Incorporation of the Surviving Corporation
shall be

 

2

 

amended and restated in its entirety to read
as follows: “The aggregate number of shares that the Company shall have the
authority to issue is one thousand (1,000) shares of common stock, par value
$0.01 per share.”

 

(b)           The Bylaws of the Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law, the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.

 

Section 1.6             Directors and Officers of the
Surviving Corporation.

 

(a)           The directors of the Merger Sub
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors of the Surviving Corporation, until their
respective successors shall have been duly elected or appointed and qualified,
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation’s Certificate of Incorporation and Bylaws, or as
otherwise provided by law.

 

(b)           The officers of the Company in office
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial officers of the Surviving Corporation until their
respective successors shall have been duly elected or appointed and qualified,
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation’s Certificate of Incorporation and Bylaws, or as
otherwise provided by law.

 

Section 1.7             Subsequent Actions.  If at any time after the Effective Time the
Surviving Corporation shall determine, in its sole discretion, or shall be
advised, that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of either of the
Company or the Merger Sub acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, then the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of either the Company or the Merger Sub, all such deeds, bills of sale,
instruments of conveyance, assignments and assurances and to take and do, in
the name and on behalf of each of such corporations or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title or interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out
this Agreement.

 

3

 

ARTICLE
II

 

MERGER CONSIDERATION; CONVERSION OF
SECURITIES

 

Section 2.1             Merger Consideration; Conversion
of Capital Stock.  At the Effective
Time, by virtue of the Merger and without any action on the part of the Parent,
the Merger Sub, the Company or holders of any of the following securities:

 

(a)           Each share of common stock of the
Merger Sub, $0.01 par value, of the Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock, par value $0.01, of the
Surviving Corporation.

 

(b)           Each share of Common Stock issued and
outstanding immediately prior to the Effective Time (other than (i) Dissenting
Shares and (ii) Common Stock to be cancelled in accordance with Section 2.1(c))
shall be converted into and represent the right to receive $3.00, payable to
the holder thereof in cash, without interest (the “Merger Consideration”).  From and after the Effective Time, all such
Common Stock shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate, that immediately prior to the Effective Time, represented such
Common Stock (a “Certificate”) shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration therefor
upon the surrender of such Certificate in accordance with Section 2.2.

 

(c)           Each share of Common Stock which is
held in the treasury of the Company or any of the Company Subsidiaries and each
share of Common Stock issued and outstanding immediately prior to the Effective
Time and owned by Parent, the Merger Sub, any other direct or indirect
wholly-owned Subsidiary of Parent, or any direct or indirect wholly-owned
Subsidiary of the Company, shall be cancelled and retired and shall cease to
exist, and no payment of consideration shall be made in respect thereof.

 

Section 2.2             Payment of Shares in the Merger.

 

(a)           Prior to the Effective Time, Parent
shall designate a bank or trust company reasonably acceptable to the Company,
and the Company agrees that any affiliate of the Parent shall be acceptable, to
act as paying agent (the “Paying Agent”) for the payment of the Merger
Consideration upon surrender of the Certificates in accordance with this
Article II.

 

(b)           Immediately prior to the Effective
Time or sooner, Parent or the Merger Sub shall deposit, or cause to be deposited,
with the Paying Agent funds in the amounts necessary to make the payments to
which holders shall be entitled pursuant to Section 2.1(b) upon surrender of
the Certificates and payments required to be made under Section 2.5(a).  Funds deposited by the Parent with the Paying
Agent shall be invested by the Paying Agent as directed by Parent, in its sole
discretion, pending

 

4

 

payment thereof by the Paying Agent to the
holders of the Common Stock.  Earnings
from such investments shall be the sole and exclusive property of Parent and no
part of such earnings shall accrue to the benefit of holders of Common Stock.

 

(c)           Promptly after the Effective Time,
the Paying Agent shall mail to each holder of record of a Certificate whose
Common Stock were converted pursuant to Section 2.1 into the right to receive
the Merger Consideration (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Paying Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for effecting the surrender of the Certificates
in exchange for payment of the Merger Consideration.  Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed and such other documents as may reasonably be requested by
the Paying Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each share of Common Stock
formerly represented by such Certificate and the Certificate so surrendered
shall forthwith be cancelled.  No
interest shall be paid or accrue on the Merger Consideration.  If payment of the Merger Consideration is to
be made to a Person other than the Person in whose name the surrendered
Certificate is registered in the transfer records of the Company, it shall be a
condition precedent of payment that (x) the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer, and (y)
the Person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a Person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not required to be paid.  Until surrendered as contemplated by this
Section 2.2, each Certificate (other than Certificates representing Dissenting
Shares and Certificates referred to in Section 2.1(c)) shall be deemed at any
time after the Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by Section 2.2, without interest thereon,
less any required applicable withholding of Taxes.

 

(d)           At the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall be no
further registration of transfers of Common Stock on the records of the
Company.  From and after the Effective
Time, the holders of Certificates evidencing ownership of Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Common Stock, except as otherwise provided for
herein or by applicable law.  If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
Paying Agent, they shall be cancelled and exchanged as provided in this Article
II, subject to applicable law in the case of Dissenting Shares.

 

(e)           Promptly following the date that is
six (6) months after the Effective Time, the Paying Agent shall deliver to
Parent all cash made available to the Paying Agent (including any interest
received with respect thereto) and documents in its

 

5

 

possession relating to the Merger, and
thereafter such holders shall be entitled to look only to the Surviving
Corporation (subject to applicable abandoned property, escheat or other similar
laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates, without any
interest thereon.  Notwithstanding the
foregoing, neither Parent, the Surviving Corporation nor the Paying Agent shall
be liable to any Person for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.  Any such portion of the aggregate Merger
Consideration remaining unclaimed by holders of Common Stock immediately prior
to such time as such amounts would otherwise escheat to or become property of
any Governmental Entity shall, to the extent permitted by law, become the
property of Parent free and clear of any and all claims or interest of any
Person previously entitled thereto.

 

Section 2.3             Tax Withholding.  Parent or the Paying Agent shall be entitled
to deduct and withhold from the Merger Consideration otherwise payable pursuant
to this Agreement to any holder of the Common Stock or Options such amounts as
Parent or the Paying Agent are required to deduct and withhold under the Code,
or any provision of state, local or foreign Tax law, with respect to the making
of such payment.  To the extent amounts
are so withheld by Parent or the Paying Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Common Stock or Options in respect of whom such deduction and withholding
was made by Parent or the Paying Agent.

 

Section 2.4             Lost, Stolen or Destroyed
Certificates.  If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent or the Surviving Corporation, the posting
by such Person of a bond, in such reasonable amount as Parent or the Surviving
Corporation may direct, as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent shall pay, in exchange
for such lost, stolen or destroyed Certificate, the Merger Consideration to be
paid in respect of the Common Stock represented by such Certificate, as
contemplated by this Article II.

 

Section 2.5             Option Plans; ESPP.

 

(a)           Not later than immediately before the
Effective Time, the Company Board of Directors (or, if appropriate, any
committee of the Company Board of Directors administering the Option Plans),
shall adopt such resolutions or take such other actions as may be required to
provide that, effective immediately after the Effective Time: (i) each
outstanding Option granted under the Option Plans, whether or not then exercisable
or vested, shall be cancelled solely in consideration for the right to payment,
if any, from the Merger Sub after the Effective Time (to be paid by the Merger
Sub as soon as practicable following the Effective Time) of an amount in
respect thereof, except as set forth on Section 2.5(a) of the Company
Disclosure, equal to the product of (I) the excess, if any, of the Merger
Consideration over the exercise price of each such Option

 

6

 

and (II) the number of shares of Common Stock
subject thereto (such payments, if any, to be net of applicable withholding and
excise taxes); (ii) the Option Plans shall terminate and all rights under any
provision of any other plan, program or arrangement providing for the issuance
or grant of any other interest in respect of the capital stock of the Company
or any Company Subsidiary shall be cancelled; and (iii) no Person shall have
any right under the Option Plans or any other plan, program, agreement or
arrangement with respect to equity securities of the Surviving Corporation or
any Subsidiary thereof (except as provided in the foregoing provisions of this
Section 2.5), and the Company shall make such other changes to the Option Plans
as Parent and the Company may agree are appropriate to give effect to the
Merger.

 

(b)           As
soon as practicable following the date of this Agreement, the Company Board of
Directors (or, if appropriate, any committee of the Company Board of Directors
administering the Company’s Employee Stock Purchase Plan (the “ESPP”)),
shall adopt such resolutions or take such other actions as may be required to
provide that with respect to the ESPP (i) participants may not increase their
payroll deductions or purchase elections from those in effect on the date of
this Agreement; (ii) no new offering period shall be commenced after the date
of this Agreement; (iii) each participant’s outstanding right to purchase
shares of Common Stock under the ESPP shall terminate on the day immediately
prior to the day on which the Effective Time occurs, provided that all amounts
allocated to each participant’s account under the ESPP as of such date shall
thereupon be used to purchase from the Company whole shares of Common Stock at
the applicable price determined under the terms of the ESPP for the then
outstanding offering periods using such date as the final purchase date for
each such offering period; and (iv) the ESPP shall terminate immediately
following such purchases of Common Stock.

 

(c)           Prior to the Effective Time, each of
Parent and the Company shall use its reasonable best efforts to cause any
dispositions of Common Stock (including derivative securities with respect to
Common Stock) resulting from the transactions contemplated by this Agreement by
each individual who is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to the Company to be exempt
under Rule 16b-3 promulgated under the Exchange Act, such efforts to
include all steps required be taken in accordance with the No-Action Letter
dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate,
Meagher & Flom LLP.

 

(d)           For purposes of this Agreement, the
following terms have the meaning ascribed to them below:

 

(i)            “Option”
means each outstanding employee or Director stock option, stock equivalent
right or right to acquire Common Stock granted under the Option Plans.

 

7

 

(ii)           “Option
Plans” means the Company’s 1996 Stock Option Plan and its 2000 Stock
Incentive Plan.

 

Section 2.6             Dissenting Shares.  Notwithstanding anything in this Agreement to
the contrary, shares of Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by a holder who did
not vote such shares of Common Stock in favor of the Merger and that is
entitled to demand and properly demands appraisal of Common Stock pursuant to,
the relevant provisions of Section 262 of the DGCL (“Dissenting Shares”)
shall not be converted into a right to receive the Merger Consideration unless
and until the holder or holders thereof shall have failed to perfect or shall
have effectively withdrawn or lost their rights to appraisal under the
DGCL.  The holders of such Dissenting
Shares shall be entitled only to such rights as are granted by Section 262 of
the DGCL.  At the Effective Time, all
Dissenting Shares shall no longer be outstanding and automatically shall be
cancelled and cease to exist, and except as otherwise provided by applicable law
each holder of Dissenting Shares shall cease to have any rights with respect to
such Dissenting Shares, other than such rights as are granted by Section 262 of
the DGCL.  Each holder of Dissenting
Shares who becomes entitled to payment for such shares pursuant to Section 262
of the DGCL shall receive payment therefor from the Surviving Corporation in
accordance with the DGCL, and any portion of the Merger Consideration deposited
with the Paying Agent to pay for such shares shall be returned to Parent upon
demand.  Notwithstanding the foregoing,
if any such holder of Dissenting Shares (i) shall have failed to establish such
holder’s entitlement to relief as a dissenting stockholder as provided in
Section 262 of the DGCL, (ii) shall have effectively withdrawn such holder’s
demand for relief as a dissenting stockholder with respect to such Dissenting
Shares or lost such holder’s right to relief as a dissenting stockholder and
payment for such holder’s Dissenting Shares under Section 262 of the DGCL, or
(iii) shall have failed to file a complaint with the appropriate court seeking
relief as to determination of the value of all Dissenting Shares within the
time provided in Section 262 of the DGCL, if applicable, such holder shall
forfeit the right to relief as a dissenting stockholder with respect to such
Common Stock, and each such Share shall be converted into the right to receive
the Merger Consideration without interest thereon, as provided in Section
2.1.  The Company shall give Parent
prompt written notice of any demands received by the Company for relief as a
dissenting stockholder, attempted withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company relating to
stockholders’ rights of appraisal.  Prior
to the Effective Time, Parent and Merger Sub shall have the right to direct all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. 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 or agree to do any of the foregoing.

 

Section 2.7             Adjustment for Dilution.  In the event that the Company changes the
number of shares of Common Stock, or securities convertible or exchangeable
into or exercisable for shares of Common Stock, issued and outstanding prior to
the Effective Time as a result of a reclassification, stock split (including a
reverse

 

8

 

stock split), stock dividend or
distribution, recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction effected with the prior written consent of
Parent, the Merger Consideration shall be equitably adjusted to reflect such
change.

 

ARTICLE
III

 

REPRESENTATIONS AND

WARRANTIES OF THE COMPANY

 

In order to
induce the Merger Sub and Parent to enter into this Agreement, the Company
hereby represents and warrants to Parent and the Merger Sub as follows:

 

Section 3.1             Organization.

 

(a)           The Company and each Subsidiary (as
defined in Section 9.5) of the Company (a “Company Subsidiary”) (i) is a
corporation or other business association duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization, (ii) has full corporate power and authority to carry on its
business as it is now being conducted and to own, lease and operate its
properties and assets, and (iii) is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or license necessary, except in the cases of clause (iii),
for those qualifications the absence of which would not, individually or in the
aggregate, have a Company Material Adverse Effect (as defined in Section
9.5).  Each of the jurisdictions referred
to in clause (iii) in the preceding sentence is listed in Section 3.1(a) of the
Company Disclosure Schedule delivered to Parent concurrent with the execution
hereof (the “Company Disclosure Schedule”).

 

(b)           Section 3.1(b) of the Company
Disclosure Schedule is a true and complete list of all of the Company
Subsidiaries, indicating the name of each such entity, a brief description of
the principal line or lines of business conducted by each such entity and the
jurisdiction of organization percentage ownership interest of the Company and
the Company Subsidiaries in each such entity. 
Other than with respect to the Company Subsidiaries, the Company does
not own, directly or indirectly, any capital stock or other equity securities
of any corporation, partnership, joint venture or other business association or
entity.  All such capital stock of the
Company Subsidiaries has been duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights, and there are no outstanding
subscriptions, options, rights or agreements of any kind relating to the
issuance, sale or transfer of any capital stock or other equity securities (or
convertible into or exchangeable for, securities having such rights) of any
such Company Subsidiary to any Person except the Company, and, except as set
forth on Section 3.1(b) of the Company Disclosure Schedule, each Company
Subsidiary is wholly-owned by either the Company or a Company Subsidiary, free
and clear of all liens, charges, security interests, options, claims,
mortgages, pledges, or other

 

9

 

encumbrances and restrictions of any nature
whatsoever (“Encumbrances”) other than such liens and pledges as
required pursuant to the Loan and Security Agreement, dated as of July 30,
2002, by and between Comerica Bank-California and Hamilton, Inc., as amended by
the First Amendment to Loan and Security Agreement, dated as of August 16,
2002, and the Second Amendment to Loan and Security Agreement, effective as of
July 30, 2004 (the “Comerica Loan”).

 

(c)           The Company has delivered or made
available in the Data Room to Parent complete and correct copies of the
Certificate of Incorporation and Bylaws or equivalent governing instruments of
the Company and each Company Subsidiary, as is in effect on the date of this
Agreement.  None of the Company nor any
of the Company Subsidiaries is in violation of any provision of its Certificate
of Incorporation or Bylaws or equivalent governing instruments.

 

(d)           The Company has delivered or made
available in the Data Room the minute books of the Company and the Company
Subsidiaries to Parent prior to the execution of this Agreement.  Except for the meetings, and the summary of
all material actions occurring at such meetings, set forth on Section 3.1(d) of
the Company Disclosure Schedule, the minute books of the Company and the
Company Subsidiaries contain accurate records of all meetings in all material
respects and accurately reflect all other material actions taken by the
stockholders, the board of directors, and all standing committees of the board
of directors of the applicable entities since January 1, 2001, except that such
minute books do not include minutes of meetings of the Strategic Transaction
Committee of the Company Board of Directors, which committee has no authority
to adopt resolutions or take any actions binding on the Company or any Company
Subsidiary.

 

Section 3.2             Capitalization.

 

(a)           The authorized capital stock of the
Company consists of (i) 100,000,000 shares of Common Stock and (ii) 10,000,000
shares of preferred stock of the Company, par value $0.01 (the “Preferred
Stock”).  As of the close of business
on January 3, 2005, (a) 42,248,756 shares of Common Stock were issued and
outstanding; and (b) no shares of Preferred Stock were issued or outstanding or
reserved for future issuance under any agreement, arrangement or
understanding.  As of the date hereof, no
Common Stock is issued and held in the treasury of the Company and no Common
Stock is held by any of the Company’s Subsidiaries.  All of the outstanding shares of the Company’s
capital stock are, and all Common Stock which may be issued pursuant to the
exercise of outstanding Options, when issued in accordance with the terms
thereof, will be, duly authorized, validly issued, fully paid and
non-assessable and not subject to any pre-emptive or similar rights.

 

(b)           Section 3.2(b) of the Company
Disclosure Schedule sets forth a complete list of outstanding Options under the
Option Plans as of January 3, 2005, showing the date of grant, the grantee,
whether or not such Option is an incentive stock

 

10

 

option or a non-qualified stock option, the
exercise price of each Option, and the number of shares of Common Stock
issuable upon exercise of each Option. 
16,765,981 shares of Common Stock are reserved for issuance pursuant to
outstanding Option Plans.  1,404,839
shares of Common Stock are reserved for issuance pursuant to the ESPP.  All of the Options have been granted to
employees and Directors of the Company in the ordinary course of business.  The only options granted by the Company are
those existing under the Option Plans or the ESPP.

 

(c)           There are no bonds, debentures, notes
or other indebtedness having the right to vote (or convertible into securities
having such rights) on any matters on which stockholders may vote (“Voting
Debt”) of the Company or any Company Subsidiary issued and
outstanding.  Except as disclosed in this
Section 3.2 or as set forth in Section 3.2(c) of the Company Disclosure
Schedule, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding, (ii) there are no existing options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any kind relating to the issued or unissued capital stock of the
Company or any Company Subsidiary obligating the Company or any Company
Subsidiary to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest
in, the Company or any Company Subsidiary or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any Company Subsidiary to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, and
(iii) there are no outstanding contractual obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any Common Stock
or the capital stock of the Company or any Company Subsidiary or any affiliate
of the Company or to provide funds to make any investment (in the form of a
loan, capital contribution or otherwise) in any Company Subsidiary or any other
entity.

 

Section 3.3             Authorization; Validity of
Agreement; Company Action.  The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the Merger and any other transactions
contemplated under this Agreement (the “Transactions”).  The execution, delivery and performance by
the Company of this Agreement and the consummation by it of Transactions, have
been duly and validly authorized by the Company Board of Directors and no other
corporate action on the part of the Company is necessary (other than the
approval of the Merger and this Agreement by an affirmative vote of a majority
of the outstanding shares of Common Stock (the “Company Stockholder Approval”))
to authorize the execution and delivery by the Company of this Agreement and
the consummation of the Transactions. 
This Agreement has been duly and validly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery of
this Agreement by Parent and the Merger Sub, constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except that such
enforceability (a) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to the enforcement of creditors’
rights generally and (b) is subject to general principles of equity.

 

11

 

Section 3.4             Board Approvals.  The Company Board of Directors, at a meeting
duly called and held, has unanimously (i) determined that this Agreement and
the Transactions contemplated hereby, including the Merger, are fair to and in
the best interests of the stockholders of the Company, (ii) approved this
Agreement and the transactions contemplated hereby, including the Merger, and
(iii) resolved to recommend that the stockholders of the Company approve this
Agreement and the Merger, and none of the aforesaid actions by the Company
Board of Directors, has been amended, rescinded or modified.

 

Section 3.5             Required Vote.  The Company Stockholder Approval is the only
vote of the holders of any class or series of the Company’s capital stock
necessary or required to approve the Merger.

 

Section 3.6             Consents and Approvals; No
Violations.  The execution, delivery
or performance of this Agreement by the Company, the consummation by the
Company of the Transactions and compliance by the Company with any of the
provisions of this Agreement do not and will not:

 

(a)           conflict with or result in any breach
of any provision of the Certificate of Incorporation or Bylaws of the Company
or the equivalent organizational documents of any Company Subsidiary;

 

(b)           subject to making the filings or
obtaining the authorizations, consents, approvals and reviews set forth in
Section 3.6(c) conflict with or violate any federal, state, foreign or other
law, statute, constitution, principle of common law, resolution, ordinance,
order, judgment, injunction, decree, rule, regulation or ruling by any court,
arbitral tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency, foreign or domestic (a “Governmental Entity”)  applicable to the Company or any of the
Company Subsidiaries or by which the Company or any of the Company Subsidiaries
or any of their respective properties is bound or affected;

 

(c)           require any registration or filing by
the Company, any Company Subsidiary or any of their affiliates with, or require
any action, permit, authorization, consent, approval of or review by, any third
party or any Governmental Entity other than (i) such filings as may be required
under the DGCL in connection with the Merger, (ii) filings, permits,
authorizations, consents and approvals as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”) and in respect of comparable provisions under applicable pre-merger
notification laws or regulations of foreign jurisdictions, (iii) the filing
with the Securities and Exchange Commission (the “SEC”) of a Proxy
Statement and such other filings under and compliance with applicable
requirements of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations thereunder the “Exchange Act”) as may be
required in connection with this Agreement, and (iv) consents or

 

12

 

approvals of any Governmental
Entity or third party set forth on Section 3.6(c) of the Company Disclosure
Schedule; or

 

(d)           except as set forth on Section 3.6(d)
of the Company Disclosure Schedule, violate or result in the violation of,
conflict with or result in a breach of any provisions of, constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, result in the termination of, accelerate the performance
required by or result in a cancellation or a right of termination or
acceleration, result in the loss of a material benefit under or result in the
creation of any Encumbrance upon the capital stock of any of the Company or any
Company Subsidiary or any of its or their properties or assets under any note,
bond, mortgage, indenture, guarantee, lease, license, agreement, contract,
understanding or other instrument or obligation (a “Contract”) to which
the Company or any Company Subsidiary is a party or by which any of them or any
of their respective properties or assets may be bound;

 

(e)           except in the case of clauses (b),
(c) or (d) where any failure to obtain such consents,  approvals, or notices or where such
violations, conflicts, breaches or defaults would not, individually or in the
aggregate, have a Company Material Adverse Effect.

 

Section 3.7             Company SEC Documents, Financial
Statements and Sarbanes-Oxley Compliance.

 

(a)           The Company has filed with the SEC
all forms, reports, schedules, statements and other documents (including
exhibits and all other information incorporated by reference) required to be
filed by the Company since January 1, 2002 under the Exchange Act or the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the “Securities Act”) (the “Company SEC Documents”).  As of their respective dates, the Company SEC
Documents, including any financial statements or schedules included in the
Company SEC Documents, as finally amended through the date hereof (i) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, and (ii) were prepared and timely filed in accordance with, and
complied, in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be.  None of the Company Subsidiaries is required
to file any forms, reports or other documents with the SEC.  The Company has delivered or made available
to Parent in the Data Room complete and correct copies of any correspondence
with, and inquiries from, the SEC since December 31, 2001.

 

(b)           All of the audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company included in any Company SEC Documents (the “Financial Statements”)
(i) have been prepared from, are in accordance with, and accurately reflect, in
all material respects, the books and records of the Company and the Company
Subsidiaries, (ii) at the time filed complied in all

 

13

 

material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (iii) have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto and except, in the case of the unaudited interim statements, as
may be permitted under Form 10-Q of the Exchange Act), and (iv) fairly present,
in all material respects, the consolidated financial position of the Company
and the Company Subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows (subject, in the case of
unaudited interim financial statements, to normal year-end adjustments) of the
Company and the Company Subsidiaries for the periods referred to therein.  The reserves reflected in the Financial
Statements are adequate, appropriate and reasonable and have been calculated in
a consistent manner in accordance with GAAP.

 

(c)           The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that:  (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions are taken with respect to any differences.

 

(d)           The revenues and accounts receivable
recorded in the books and records of the Company and the Company Subsidiaries
and reflected in the Financial Statements filed prior to the date hereof
comply, and the Financial Statements filed after the date hereof shall comply,
with the principles of revenue recognition set forth in SFAS No. 48 (Revenue Recognition
When Right of Return Exists), AICPA SOP No. 97-2 (Software Revenue Recognition)
and SEC Staff Accounting Bulletin No. 101 (Revenue Recognition in Financial
Statements).

 

(e)           Except as set forth on Section 3.7(e)
of the Company Disclosure Schedule, all accounts receivable of the Company,
reflected in its audited consolidated balance sheet of the Company included in
the Company SEC Documents for the year ended December 31, 2003 and in the
Company SEC Documents filed after the date hereof, are collectible in the
ordinary course of the Company’s business consistent with past practice, net of
any reserves shown on such balance sheets, and arose from valid transactions in
the ordinary course of business consistent with past practice with unrelated
third parties.  Except as set forth on
Section 3.7(e) of the Company Disclosure Schedule, or for any waivers or
cancellations permitted by, or consented to by the Parent, pursuant to Section
5.1(b)(xi), the Company has received no notice or other indication that any of
the Company’s accounts receivable will not be collectible in full, net of any
reserves shown on such balance sheet.  The amounts carried for doubtful accounts and
allowances disclosed in the Financial Statements filed prior to the date hereof
are, and such amounts disclosed in the Financial Statements filed after the
date hereof shall be,

 

14

 

sufficient in the good faith estimation of the Company
management to provide for any losses which may be sustained on realization of
the receivables.

 

(f)            The Company has implemented “disclosure
controls and procedures” (as defined in Rules 13a-15(e) and 15d of the Exchange
Act) and such controls and procedures are designed to ensure that all material
information concerning the Company and the Company Subsidiaries is made known
on a timely basis to the individuals responsible for the preparation of the
Company’s filings with the SEC and other public disclosure documents.  Each required form, report
and document containing financial statements that has been filed with or
submitted to the SEC since July 31, 2002, was accompanied by the certifications
required to be filed or submitted by the Company’s chief executive officer and
chief financial officer pursuant to the Sarbanes-Oxley Act of 2002 and the SEC
rules and regulations promulgated thereunder, and at the time of filing or
submission of each such certification, such certification was true, accurate
and complete, and complied with the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated thereunder.

 

(g)           Except as indicated on Section 3.7(g)
of the Company Disclosure Schedule, since December 31, 2001, neither the
Company nor any Company Subsidiary nor, to the Company’s Knowledge, any
Director, officer, employee, auditor, accountant or representative of the
Company or any Company Subsidiary has received or otherwise had or obtained
Knowledge of any complaint, allegation, assertion or claim, whether written or
oral, regarding the accounting or auditing practices, procedures, methodologies
or methods of the Company or any Company Subsidiary or their respective
internal accounting controls, including any complaint, allegation, assertion or
claim that the Company or any Company Subsidiary has engaged in questionable
accounting or auditing practices.  No
attorney representing the Company or any Company Subsidiary, whether or not
employed by the Company or any Company Subsidiary, has reported “evidence of a
material violation” (as defined in 17 CFR Part 205) to the Company Board of
Directors or any committee thereof or to any Director or officer of the
Company.

 

Section 3.8             Absence of Certain Changes.  Except as contemplated by this Agreement and
except as set forth in Section 3.8 of the Company Disclosure Schedule or
disclosed in the Company SEC Documents filed prior to the date hereof, since
December 31, 2003, each of the Company and the Company Subsidiaries has
conducted its respective business only in the ordinary course of business
consistent with past practice, has not suffered any Company Material Adverse
Effect and, to the Company’s Knowledge, no fact or condition exists which would
have, or insofar as reasonably can be foreseen could have, a Company Material
Adverse Effect, and has not, through the date of this Agreement with respect to
the following clauses (i) through (xvi):

 

(i)            declared,
paid or set aside for payment any dividend or other distribution in respect of
its capital stock or redeemed, purchased or otherwise acquired, directly or
indirectly, any

 

15

 

shares
of capital stock or other securities of the Company or any Company Subsidiary;

 

(ii)           split,
combined or reclassified any of the Company’s capital stock;

 

(iii)          issued
or sold any stocks, notes, bonds or other securities issued by the Company or
any Company Subsidiary;

 

(iv)          settled
any litigation for amounts in excess of $100,000 in the aggregate;

 

(v)           made
any revaluation of any of its assets, including writing off the value of any
inventory or notes;

 

(vi)          sold,
transferred, or otherwise disposed of any of its properties or assets, except
in the ordinary course of business consistent with past practice and not
exceeding $100,000 individually or $250,000 in the aggregate;

 

(vii)         acquired
any assets except in the ordinary course of business consistent with past
practice and not exceeding $300,000 individually or $1,200,000 in the
aggregate;

 

(viii)        disposed
of or permitted to lapse any material Company IP rights;

 

(ix)           (A) sold, transferred or licensed to
any Person any material Company IP rights other than pursuant to nonexclusive
licenses entered into in the ordinary course of business consistent with past
practice; or (B) extended, amended or modified in any material respect any of
the material Company IP rights;

 

(x)            (A) entered
into, adopted, amended or increased
the benefits payable under any employment, deferred compensation, severance,
retirement or other similar plan, program or agreement with or covering any
consultant, Director, officer or employee, other than in the case of employees
below the director level in the ordinary course of business consistent with
past practice, (B) granted or paid any severance or termination pay, bonus,
commission, perquisite (such as company car allowances and club memberships) or
stay bonus to any consultant, Director, officer or employees, other than (1)
pursuant to the commission programs specified on Section 3.8(x) of the Company
Disclosure Schedule or (2) in the case of employees below the director level,
such grants or payments made in the ordinary course of business consistent with
past practice, (C) adopted or amended (except to the extent

 

16

 

required by applicable
law or as contemplated by this Agreement) any employee benefit plan, program or
agreement, (D) changed the wages of or other compensation or benefits payable
or to become payable to any consultant, Director, officer or employee
(including changes pursuant to any severance, retirement savings, or retirement
plans, programs or agreements), other than in the case of employees below the
director level changes in compensation made in the ordinary course of business
consistent with past practice, (E) except as contemplated by this Agreement, taken any
action to accelerate, amend or change the period of vesting or exercisability
of options or restricted stock, or reprice options granted under any employee,
consultant, Director or other stock plans or authorize cash payments in
exchange for any options granted under any of such plans, or (F) made any loans
to any officers, Directors, employees, or consultants or made any change in
borrowing or lending arrangements for or on behalf of any of such Persons
pursuant to an employee benefit plan, program or agreement or otherwise;

 

(xi)           (i)
made any change in any method of accounting, method of accounting principles or
practice except as required by concurrent changes in GAAP; (ii) made any Tax
election or changed any Tax election already made; (iii) amended any Tax
Return; (iv)  entered into any closing
agreement; (v) settled or compromised any claim or assessment relating to
Taxes;  or (vi) consented to any claim or
assessment relating to Taxes or any waiver of the statute of limitations for
any such claim or assessment;

 

(xii)          incurred
any material liability (absolute or contingent), except for current liabilities
and obligations incurred in the ordinary course of business consistent with
past practice;

 

(xiii)         received
any communication from Nasdaq with respect to delisting the shares of Common
Stock;

 

(xiv)        waived
or cancelled any claim, debt, right, account receivable or trade account
involving amounts in excess of $25,000 individually or $100,000 in the
aggregate;

 

(xv)         suffered
any damage, destruction or similar loss to any tangible or intangible property
of any nature or description in excess of $25,000 whether or not covered by
insurance; or

 

(xvi)        except
as contemplated by this Agreement, agreed, whether in writing or otherwise, to
take any action described in this Section.

 

17

 

Section 3.9             No Undisclosed Liabilities.  Except (a) as and to the extent disclosed or
reserved against on the audited consolidated balance sheet (including the notes
and schedules thereto) of the Company as of December 31, 2003 or consolidated
balance sheet of the Company as of September 30, 2004 included in the Company
SEC Documents filed prior to the date of this Agreement, (b) as incurred after
September 30, 2004 in the ordinary course of business consistent with past
practice, or (c) as set forth in Section 3.9 of the Company Disclosure Schedule
neither the Company nor any Company Subsidiary has any material liabilities or
obligations of any nature, (whether absolute, accrued, contingent or
otherwise).

 

Section 3.10           Litigation.  The Company SEC Documents filed prior to the
date of this Agreement or Section 3.10 of the Company Disclosure Schedule
reflect, as of the date of this Agreement, each action, suit, claim, charge,
inquiry, investigation, notice of violation, demand letter, proceeding, or
hearing, including, without limitation, arbitration proceeding or alternative
dispute resolution proceeding, or investigation pending, or, to the Knowledge
of the Company, threatened by or before any Governmental Entity against the
Company, any Company Subsidiary, any of the Company’s properties or any of the
Company’s officers or Directors (in their capacities as such) or seeking to restrain, enjoin, alter or
delay the consummation of the Merger or the Transactions.  Except as disclosed in the Company SEC
Documents filed prior to the date of this Agreement or set forth in Section
3.10 of the Company Disclosure Schedule, there is no action, suit, claim,
charge, inquiry, investigation, notice of violation, demand letter, proceeding,
or hearing, including, without limitation, arbitration proceeding or
alternative dispute resolution proceeding, or investigation pending, or, to the
Knowledge of the Company, threatened by or before any Governmental Entity
against the Company, any Company Subsidiary, any of the Company’s properties or
any of the Company’s officers or Directors (in their capacities as such), if
decided adversely to the Company or any Company Subsidiary, that has had or
could reasonably be expected to have a material adverse impact on the Company
and the Company Subsidiaries taken as a whole. 
There is no judgment, decree or order against the Company, any Company
Subsidiary or any of the Company’s officers or Directors (in their capacities
as such) that would, individually or in the aggregate, have or would reasonably
be expected to have a Company Material Adverse Effect.  There is no litigation, claim or suit that
the Company or any Company Subsidiary has pending against other parties except
instituted in the ordinary course of business and as to which the claim of the
Company or the Company Subsidiary does not exceed $50,000 individually and
$200,000 in the aggregate.

 

Section 3.11           Employee Benefit Plans; ERISA.

 

(a)           Section
3.11(a) of the Company Disclosure Schedule contains a true and complete list of
each employment, bonus, deferred compensation, incentive compensation, stock
purchase, stock option, severance or termination pay, hospitalization or other
medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement (including but not
limited to

 

18

 

employment agreements) or arrangement
(collectively, the “Benefit Plans”) currently maintained or contributed
to or required to be contributed to by (i) the Company, (ii) any Company
Subsidiary, or (iii) any trade or business, whether or not incorporated (an “ERISA
Affiliate”), that together with the Company or any Company Subsidiary would
be deemed a “single employer” within the meaning of section 4001 of the
Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder (“ERISA”), for the benefit of any
current or former employee or Director of the Company or any Company
Subsidiary.

 

(b)           With respect to each of the Benefit
Plans, the Company has delivered or made available in the Data Room to Parent
complete copies of each of the following documents: (i) the Benefit Plan
(including all amendments thereto); (ii) the annual report and actuarial
report, if required under ERISA or the Code, for the last three plan years
ending prior to the date hereof; (iii) the most recent Summary Plan
Description, together with each Summary of Material Modifications, if required
under ERISA; (iv) if the Benefit Plan is funded through a trust or any third
party funding vehicle, the trust or other funding agreement (including all
amendments thereto) and the latest financial statements with respect to the
reporting period ended most recently preceding the date thereof; (v) all
contracts with respect to which the Company, any Company Subsidiary or any
ERISA Affiliate may have any liability, including insurance contracts,
investment management agreements, subscription and participation agreements and
record keeping agreements; and (vi) the most recent determination letter
received from the Internal Revenue Service with respect to each Benefit Plan
that is intended to be qualified under Section 401(a) of the Code.

 

(c)           Neither
the Company, any Company Subsidiary, nor any ERISA Affiliate maintains or
contributes to or ever maintained was required to contribute to (i) any plan or
arrangement that is or was subject to Title IV of ERISA or Section 412 of the
Code, or (ii) any plan or arrangement that is or was a multiemployer plan
within the meaning of Section 3(40) or 4001(a)(3) of ERISA.

 

(d)           Each Benefit Plan intended to be “qualified”
within the meaning of Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service as to its qualification
and, to the Company’s Knowledge, no event has occurred that could reasonably be
expected to result in disqualification of such Benefit Plan.

 

(e)           Each of the Benefit Plans has been
operated and administered in all material respects in accordance with its terms
and in all material respects in accordance with applicable laws, including
ERISA and the Code.

 

(f)            Except as set forth on Section
3.11(f) of the Company Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee or Director of the Company or any Company Subsidiary to severance
pay, unemployment compensation or

 

19

 

any other payment, (ii) accelerate the time
of payment or vesting, or increase the amount of compensation due any such
current or former employee or Director, or (iii) result in any prohibited
transaction described in Section 406 of ERISA or Section 4975 of the Code for
which an exemption is not available.

 

(g)           With
respect to each Benefit Plan that is funded wholly or partially through an
insurance policy, neither the Company nor any Company Subsidiary has any
current liability under any such insurance policy in the nature of a
retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring prior
to the Closing.

 

(h)           There are no pending or, to the
Company’s Knowledge, threatened claims by or on behalf of any of the Benefit
Plans, by any employee or beneficiary covered under any Benefit Plan or
otherwise involving any Benefit Plan (other than routine claims for benefits).

 

(i)            Neither
the Company, any Company Subsidiary, ERISA Affiliate, any Benefit Plan, any
trust created thereunder, nor any trustee or administrator thereof has engaged
in a transaction in connection that could reasonably be expected to give rise
to a civil liability under either Section 409 of ERISA or section 502(i) of
ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code.

 

(j)            Except as contemplated by this
Agreement, neither the Company nor any Company Subsidiary has any formal plan
or commitment, whether legally binding or not, to create any additional Benefit
Plan or modify or change any existing Benefit Plan that would affect any
employee or terminated employee of the Company or any Company Subsidiary.

 

(k)           Except
as set forth on Section 3.11(k)(i) of the Company Disclosure Schedule, neither
the Company nor any Company Subsidiary is a party to any agreement, contract or
arrangement that could result, separately or in the aggregate, in the payment
of any “excess parachute payments” within the meaning of Section 280G of the
Code or in respect of which a deduction has been or could be disallowed
pursuant to Section 162(m) of the Code. 
Except as set forth on Section 3.11(k)(ii) of the Company Disclosure Schedule,
no current or former employee or Director of the Company or any Company
Subsidiary is entitled to receive any additional payment from the Company or
any Company Subsidiary or the Surviving Corporation by reason of the excise tax
required by Section 4999(a) of the Code being imposed on such Person by reason
of the transactions contemplated by this Agreement.

 

(l)            Except as set forth on Section
3.11(l) of the Company Disclosure Schedule, no “leased employees,” as that term
is defined in Section 414(n) of the Code, perform services for the Company, any
Company Subsidiary or any ERISA Affiliate. 
Except as set forth on Section 3.11(l) of the Company Disclosure
Schedule, neither the Company, any Company Subsidiary or any ERISA Affiliate
has used the

 

20

 

services or workers provided by third party
contract labor suppliers, temporary employees, such “leased employees,” or
individuals who have provided services as independent contractors to an extent
that would reasonably be expected to result in the disqualification of any
Benefit Plan or the imposition of penalties or excise taxes with respect to any
Plan by the Internal Revenue Service, the Department of Labor, or any other
Governmental Entity.

 

(m)          Neither
the Company, any Company Subsidiary nor any ERISA Affiliate is a party to any
agreement or understanding, whether written or unwritten, with the Internal
Revenue Service, the Department of Labor or the Pension Benefit Guaranty
Corporation.

 

(n)           Except as contemplated by this
Agreement with respect to matters addressed in Section 2.5 hereof, no
representations or communications, oral or written, with respect to the
participation, eligibility for benefits, vesting, benefit accrual or coverage
under any Benefit Plan have been made to employees, Directors or agents (or any
of their representatives or beneficiaries) of the Company, any Company
Subsidiary or any ERISA Affiliate that are not in accordance with the terms and
conditions of the Benefit Plans.

 

(o)           Except
as set forth on Section 3.11(o) of the Company Disclosure Schedule, no Benefit
Plan provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees or
Directors of the Company or any Company Subsidiary beyond their retirement or
other termination of service, other than (i) coverage mandated solely by
applicable law, (ii) death benefits or retirement benefits under any “employee
pension benefit plan” (as defined in section 3(2) of ERISA), (iii) deferred
compensation benefits accrued as liabilities on the books of the Company or a
Company Subsidiary, or (iv) benefits the full costs of which are borne by the
current or former employee or Director or his or her beneficiary.  Except as set forth on Section 3.11(o) of the
Company Disclosure Schedule, the Company has no retiree medical benefits.

 

(p)           With respect to each of Benefit Plan,
the provisions of Section 4980B(f) of the Code, Section 601 et seq. of ERISA,
and any similar local law have been complied with in all material respects.

 

(q)           With respect to each Benefit Plan
established or maintained outside of the United States of America primarily for
the benefit of employees of the Company or any Company Subsidiary residing outside
the United States of America (a “Foreign Benefit Plan”):  (i) except as set forth on Section 3.11(q)(i)
of the Company Disclosure Schedule, all employer and employee contributions to
each Foreign Benefit Plan required by law or by the terms of such Foreign
Benefit Plan have been made, or, if applicable, accrued, in accordance with
normal accounting practices; (ii) the fair market value of the assets of each
funded Foreign Benefit Plan, the liability of each insurer for any Foreign
Benefit Plan funded through insurance or the book reserve established for

 

21

 

any Foreign Benefit Plan, together with any
accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations with respect to all current and former participants in such
plan according to the actuarial assumptions and valuations most recently used
to determine employer contributions to such Foreign Benefit Plan and no
transaction contemplated by this Agreement shall cause such assets or insurance
obligations to be less than such benefit obligations; and (iii) each Foreign
Benefit Plan required to be registered has been registered and has been
maintained in good standing with applicable regulatory authorities.

 

(r)            No present or former employee of the
Company or any of its subsidiaries has a vested right to any “welfare benefits”
(as defined in ERISA) under any Benefit Plan.

 

Section 3.12           Taxes. 

 

(a)           The Company and all Company
Subsidiaries have duly filed (or there have been filed on their behalf) with
the appropriate Tax Authorities all Tax Returns required to be filed by them;
all such Tax Returns are true, correct and complete in all material respects;
and the Company and each of the Company Subsidiaries have, within the time and
in the manner prescribed by law, paid in full (or there has been paid on their
behalf), all Taxes that are due and payable from them.  All information with respect to Taxes made
available in the Data Room to Parent is true, correct and complete in all
material respects.

 

(b)           There are no liens for Taxes upon any
property or assets of the Company or any Company Subsidiary thereof, except for
liens for Taxes not yet due.

 

(c)           No federal, state, local or foreign
Audits are pending with regard to any material Taxes or Tax Returns of the
Company or any Company Subsidiary and to the best Knowledge of the Company and
the Company Subsidiaries no such Audit is threatened.

 

(d)           The federal income Tax Returns of the
Company and the Company Subsidiaries have never been audited by the applicable
Tax Authorities (or the applicable statutes of limitation for the assessment of
Taxes for such periods have expired).

 

(e)           Neither the Company nor any Company
Subsidiary is a party to, or is bound by, or has any obligation under, any
agreement, arrangement or understanding providing for the allocation,
indemnification, or sharing of Taxes.

 

(f)            Neither the Company nor any Company
Subsidiary has been a member of any “affiliated group” (as defined in section
1504(a) of the Code) other than the affiliated group of which Company is the “parent”
and is not subject to Treas. Reg. 1.1502-6 (or any similar provision under
foreign, state, or local law) for any period other than in connection with the
affiliated group of which the Company is the “parent”.

 

22

 

(g)           Neither the Company nor any
Company Subsidiary is or has been a United States real property holding
corporation (as defined in section 897(c)(2) of the Code) during the applicable
period specified in section 897(c)(1)(A)(ii) of the Code.

 

(h)           The Company and each Company
Subsidiary has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, member or other third party.

 

(i)            Neither the Company nor any
Company Subsidiary has received notice of any claim made by an authority in a
jurisdiction where it does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction.

 

(j)            Neither the Company nor any
Company Subsidiary has waived any statutory period of limitations for the
assessment of any Tax or agreed to any extension of time with respect to a Tax
assessment or deficiency, in each case, which is currently outstanding, nor is
any request to so waive or extend currently outstanding.

 

(k)           All accrued and unpaid Taxes
of the Company and the Company Subsidiaries as of September 30, 2004, do not
exceed the reserve for Taxes shown on the consolidated balance sheet of the
Company as of September 30, 2004.

 

(l)            For purposes of this Agreement,
the following terms have the definition given below:

 

(i)            “Audit” means any
audit, assessment, or other examination relating to Taxes by any Tax Authority
or any judicial or administrative proceedings relating to Taxes.

 

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

 

(iii)          “Tax” or “Taxes”
means all federal, state, local, and foreign taxes, and other fees, duties,
levies, customs, tariffs, imposts, obligations, charges and assessments of a
similar nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any Tax
Authority.

 

(iv)          “Tax Authority” means
the Internal Revenue Service and any other domestic or foreign governmental
authority responsible for the administration of any Taxes.

 

(v)           “Tax Returns” mean all
federal, state, local, and foreign Tax returns, declarations, statements,
reports, schedules,

 

23

 

forms, and
information returns with respect to any tax and any amendments, attachments and
supplements thereto.

 

Section 3.13           Contracts.

 

(a)           Except for the Contracts set
forth on Section 3.13(a) of the Company Disclosure Schedule, as of the date of
this Agreement the Company and each Company Subsidiary is not a party to or
bound by any of the following Contracts:

 

(i)            any loan and credit
agreement, revolving credit agreement, security agreement, guarantee, note,
agreement evidencing any lien, conditional sales agreement, factoring
agreement, leasing agreement, sale and leaseback and synthetic lease agreement,
or title retention agreement;

 

(ii)           any
Contract which is reasonably expected to entail an expenditure, or collection
of revenue, in excess of $100,000 other than contracts with customers entered
into after the date hereof consistent with past practice on customary terms and
conditions;

 

(iii)          any joint venture, partnership
or similar Contract providing for the sharing of profits, losses, costs or
liabilities by the Company or Company Subsidiary with any Person;

 

(iv)          any Contract providing for any
future payments that is conditioned, in whole or in part, on a change of
control of Company or any Company Subsidiary;

 

(v)           any Contract involving hedging
and similar arrangements;

 

(vi)          any Contract with Persons with
whom the Company or any Company Subsidiary is not dealing at arm’s length;

 

(vii)         (A) any lease for real property
under which the Company or any Company Subsidiary is the lessor or lessee, and
(B) any lease for personal property under which the Company or any Company
Subsidiary is the lessor or lessee involving the payment of more than $100,000
per year;

 

(viii)        any Contract with a consultant,
independent contractor or sub-contractor involving the payment of more than
$50,000 per year other than those entered into after the date hereof consistent
with Section 5.1;

 

24

 

(ix)           any employment contract which
may not be immediately terminated without penalty (or any augmentation or
acceleration of benefits) other than mandatory notice periods under law or
specified notice periods (which do not exceed two weeks) in the employment
contracts;

 

(x)            any Contract in settlement of
pending or threatened litigation (A) entered into since January 1, 2003, other
than settlements of employment and similar disputes in the ordinary course of
business in an aggregate amount less than $50,000, or (B) which has any
obligations outstanding as of the date hereof;

 

(xi)           any
Contract pursuant to which a third party manufactures or processes products for
either the Company or any Company Subsidiary, or performs material services for
customers of either of the Company or any Company Subsidiary;

 

(xii)          any
Contract with an Affiliate;

 

(xiii)         any
reseller Contract involving more than $200,000 per year; or

 

(xiv)        any
Contract in the nature of a shareholder agreement, voting agreement,
registration rights agreement or other similar agreement.

 

(b)           Each Contract listed on
Section 3.13(a) of the Company Disclosure Schedule, each Contract entered into
after the date hereof with the consent of the Parent pursuant to Section 5.1
and each Contract related to matters referred to on Section 5.1 of the Company
Disclosure Schedule (collectively, the “Material Contracts”), each
Contract with either a customer or supplier listed on Section 3.13(c) of the
Company Disclosure Schedule or each Contract entered into with any such
customer or supplier after the date hereof (collectively, the “Customer
Contracts”), and each Contract listed on Section 3.13(d) of the Company
Disclosure Schedule is, and with respect to Contracts entered into after the
date hereof, shall be, a legal, valid and binding agreement of the Company or
the applicable Company Subsidiaries, and to the Company’s Knowledge, of the
other party or parties thereto in accordance with its terms, and is in full
force and effect.  None of the Company,
any Company Subsidiary, or, to the Knowledge of the Company, the other parties
thereto (x) is in breach of or default under (and no event has occurred that
with notice or the lapse of time, or both, would constitute a breach, default
or violation) any Customer Contract other than such breaches that are
immaterial in nature and amount and in the aggregate do not have a Company
Material Adverse Effect or (y) is in material breach of or material default
under (and no event has occurred that with notice or the lapse of time, or
both, would constitute a material breach, material default or material
violation) any Material Contract or the Contracts listed on Section 3.13(d)

 

25

 

of the Company Disclosure Schedule.  Through the date of this Agreement, neither
the Company nor any Company Subsidiary has received any notice (written or
oral) of cancellation or termination of, or any expression or indication of an
intention or desire to cancel or terminate, any Material Contract or Customer
Contract.  Except as set forth on Section
3.13(b) of the Company Disclosure Schedule, as of the date hereof, with respect
to any Material Contract or Customer Contract which by its terms will terminate
as of a certain date unless renewed or unless an option to extend such Material
Contract or Customer Contract is exercised, neither the Company nor any of the
Company Subsidiaries has received any notice (written or oral), or otherwise
has any Knowledge, that any such Material Contract or Customer Contract will
not be so renewed or that any such extension option will not be exercised.  The Company has delivered or made available
in the Data Room to Parent complete and correct copies of the Material
Contracts and the Customer Contracts.

 

(c)           The documents and information
delivered or made available in the Data Room by the Company to Parent with
respect to relationships and volumes of business done with the significant
suppliers and customers of the Company or any of the Company Subsidiaries are
accurate and complete in all material respects. 
Section 3.13(c) of the Company Disclosure Schedule is a true and
complete list of (i) the 20 largest suppliers of the Company for the nine
months’ period ended September 30, 2004, (ii) all customers of the Company and
the Company Subsidiaries as of December 31, 2004, and (iii) the revenue
generated from each of the Company’s customers referred to in clause (ii) above
for the nine months’ period ended September 30, 2004.  Through the date of this Agreement, except as
set forth on Section 3.13(b) or (c) of the Company Disclosure Schedule, since
January 1, 2003, neither the Company nor any Company Subsidiary has received
any written notices of termination or written threats of termination, or any
other indication of any intention to terminate or not renew, from any of the 10
largest suppliers or the 25 largest customers of the Company and the Company Subsidiaries
taken as a whole.  To the Knowledge of
the Company, as of the date of this Agreement, no event has occurred or failed
to occur which would entitle any such supplier or customer to terminate its
business relationship with the Company and the Company Subsidiaries or to
change the financial terms of its business relationship in a material way
except such changes as are specified by the terms of the Contract between the
Company or Company Subsidiary and any such supplier or customer.

 

(d)           Neither the Company nor any
Company Subsidiary is a party to or otherwise bound by (i) except as set forth
in Section 3.13(d) of the Company Disclosure Schedule, any agreement containing
covenants purporting to limit the freedom of the Company or any Company Subsidiary
to compete in any line of business or sell, supply or distribute any service or
product, in each case, in any geographic area or to hire any individual or
group of individuals, (ii) any agreement that, after the Effective Time, would
have the effect of limiting in any material respect the freedom of Parent or
any of its Subsidiaries (other than the Company and any Company Subsidiary) to
compete in any line of business or sell, supply or distribute any product or
service, in each case, in any geographic area or to hire any individual or
group of individuals, or (iii) any

 

26

 

acquisition agreement containing “earn-out”
or other contingent payment obligations that could result in payments by the
Company or any Company Subsidiary after the date hereof in aggregate amounts,
with respect to a particular agreement, in excess of $50,000.

 

Section 3.14           Real
and Personal Property.

 

(a)           None of the Company nor any
Company Subsidiary owns any real property in fee simple.  Section 3.14(a) of the Company Disclosure
Schedule sets forth a true and complete list of all real property leased to the
Company or any Company Subsidiary (the “Leased Real Property”), and
there is no other real property owned, leased or occupied by the Company or any
of the Company Subsidiaries.

 

(b)           A complete and accurate copy
of each lease under which the Company or any Company Subsidiary is lessee of
any of the Leased Real Property, including amendments thereto, has been made
available in the Data Room to Parent and all such leases are listed on Section
3.14(b) of the Company Disclosure Schedule. 
To the Knowledge of the Company, the Company or any applicable Company
Subsidiary possesses and quietly enjoys all of the Leased Real Property.

 

(c)           With respect to the Leased
Real Property, the Company or a Company Subsidiary has an adequate leasehold,
license or similar interest in each of the Leased Real Properties free and
clear of all Encumbrances, except Permitted Encumbrances or as listed on Section
3.14 (c) of the Company Disclosure Schedule.

 

(d)           Except as disclosed in
Section 3.14(d) of the Company Disclosure Schedule, the Company is not a
party to any lease, assignment or similar arrangement under which the Company
is a lessor, assignor or otherwise makes available for use by any third party
any portion of its owned real property or Leased Real Property.

 

(e)           Section
3.14(e) of the Company Disclosure Schedule sets forth a complete list as of the
date specified thereon of (i) all equipment, machinery, motor vehicles, plants
and other tangible Personal property owned by the Company or any Company
Subsidiary, and (ii) all equipment, machinery, motor vehicles, plants and other
tangible personal property leased by the Company or any Company Subsidiary involving
the payment of more than $100,000 per year. 
Each of the Company and the Company Subsidiaries has good and
marketable title, free and clear of all Encumbrances (except (i) liens for
current Taxes not yet due, (ii) Encumbrances incurred in the ordinary course of
business consistent with past practice which individually and in the aggregate
are not material in nature or amount and do not impair the use of such Personal
property in the operation of the Company’s business, and (iii) such
Encumbrances as required pursuant to the Comerica Loan (such Encumbrances in
clauses (i) through (iii) being referred to as “Permitted Encumbrances”)),
to the personal property reflected on the Company’s Financial Statements for
the fiscal year ended December 31, 2003 as being owned by the Company, other
than properties and assets that have been sold or otherwise disposed of either
(i) in the ordinary course of business since December 31, 2003 and

 

27

 

prior
to the date hereof or (ii) after the date hereof consistent with Section
5.1.  The Company and the
Company Subsidiaries own, or hold under valid leases or licenses, all personal
property, plants, machinery and equipment reasonably necessary for the conduct
of the business of the Company and the Company Subsidiaries as it is being
conducted on the date hereof.  The
Company’s and the Company Subsidiaries’ equipment has been reasonably
maintained and is in good condition and repair, reasonable wear and tear
excepted.

 

Section 3.15           Potential
Conflict of Interest.

 

(a)           Except as set forth in the
Company SEC Documents filed prior to the date hereof since January 1, 2002,
there have been no transactions, agreements, arrangements or understandings
between the Company or any Company Subsidiary, on the one hand, and their
respective affiliates, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act (except for
amounts due as normal salaries and bonuses and as reimbursement of ordinary
expenses).

 

(b)           No Senior Management Personnel
owns, directly or indirectly, any interest in (excepting not more than one
percent (1%) stock holdings for investment purposes in securities of
publicly-held and traded companies) or is an officer, director, employee or
consultant of any Person which is a competitor, lessor, lessee, customer or
supplier of the Company.  Except as set
forth in the Company SEC Documents filed prior to the date hereof, no officer
or Director of the Company or any of Company Subsidiary (i) owns, directly or
indirectly, in whole or in part, any Company IP rights or any other
Intellectual Property rights that are necessary for the business of the Company
or any Company Subsidiary, (ii) has asserted any claim, charge, action or cause
of action against the Company or any Company Subsidiary, except for immaterial
claims for accrued vacation pay, accrued benefits under any Benefit Plans and
similar matters and agreements existing on the date hereof, and the Company has
no Knowledge of any basis for such claims, charges, actions or causes of
action, (iii) to the Company’s Knowledge has made, on behalf of the Company or
any Company Subsidiary, any payment or commitment to pay any commission, fee or
other amount to, or to purchase or obtain or otherwise contract to purchase or
obtain any goods or services from, any other Person of which any officer or
Director of the Company or any Company Subsidiary, or, a relative of any of the
foregoing, is a partner or stockholder (except stock holdings solely for
investment purposes in securities of publicly held and traded companies), or
(iv) owes any money to the Company or any Company Subsidiary except for
reimbursement of expenses or advances made in the ordinary course of business
consistent with the Company’s policies for expense reimbursement and advances.

 

(c)           The Company has not, in
violation of the Exchange Act, directly or indirectly, including through a
Company Subsidiary, extended or maintained credit, arranged for the extension
of credit, or renewed an extension of credit, in the form of a personal loan to
or for any Director or executive officer of the Company.

 

28

 

Section 3.16           Intellectual
Property.

 

(a)           Section 3.16(a) of the Company
Disclosure Schedule sets forth a true and complete list of the Registered
Company IP as of the date hereof.  The
Company or a Company Subsidiary is listed in the records of the appropriate
agency as the sole owner of record for each item of Registered Company IP
listed in Section 3.16(a) of the Company Disclosure Schedule.  The Registered Company IP that is currently
being used in the business and operations of the Company and the Company
Subsidiaries is subsisting, in full force and effect, has not been cancelled,
expired or been abandoned, has not been used, maintained, enforced or failed to
be used, maintained or enforced in a manner that would result in the
abandonment, cancellation or unenforceability of any Registered Company IP.

 

(b)           Section 3.16(b) of the Company
Disclosure Schedule sets forth a true and complete list of Company Software as
of the date hereof that is material to the business and operations of the
Company and the Company Subsidiaries as presently conducted.  Except as set forth on Section 3.16(b) of the
Company Disclosure Schedule, no source code for the Company Software has been
delivered, licensed, or made available by the Company or any Company Subsidiary
to a third party.  The Company Software
is free of any material defects or deficiencies.  No Company Software has been the subject of
any recall or similar action that has had or could be reasonably expected to
have, a material adverse impact on the Company and the Company Subsidiaries
taken as a whole; and to the Knowledge of the Company, no event has occurred,
and no condition or circumstance exists, that could reasonably be expected to
(with or without notice or lapse of time) directly or indirectly give rise to
or serve as a basis for any such recall, litigation, or similar action.  No Company Software incorporates or is used
in conjunction with Open Source Materials.

 

(c)           Section 3.16(c) of the Company
Disclosure Schedule sets forth a true and complete list of all Outbound License
Agreements in existence as of the date of this Agreement that are material to
the business and operations of the Company and the Company Subsidiaries as
presently conducted, other than end user license agreements for the Company
Software.  Each Outbound License Agreement
that is material to the business and operations of the Company and the Company
Subsidiaries as presently conducted is valid and binding on all the parties
thereto and constitutes an enforceable obligation of the Company or the Company
Subsidiary party thereto in accordance with its terms.  The Company and the Company Subsidiaries are
in compliance with, and have not breached, violated or committed a default
under (and no event has occurred that with notice or the lapse of time, or
both, would constitute a breach, default or violation of) any term of, any such
Outbound License Agreements.  All other
parties to such Outbound License Agreements are in compliance with, and have
not breached, violated or committed a default under (and no event has occurred
that with notice or the lapse of time, or both, would constitute a breach,
default or violation of) any term of, any such Outbound License
Agreements.  No Outbound License
Agreement grants any third party exclusive rights or rights to sublicense to or
under any material

 

29

 

Company IP rights.  Other than pursuant to the end user license
agreements for the Company Software, the Company has not undertaken any
indemnification obligations relating to infringement or violation of any third
party Intellectual Property rights.

 

(d)           Section 3.16(d) of the Company
Disclosure Schedule sets forth a true and complete list of all Inbound License
Agreements in existence as of the date of this Agreement that are material to
the business and operations of the Company and the Company Subsidiaries as
presently conducted.  Each Inbound
License Agreement that is material to the business and operations of the
Company and the Company Subsidiaries as presently conducted is valid and
binding on all parties thereto and constitutes an enforceable obligation of the
Company or the Company Subsidiary party thereto in accordance with its
terms.  The Company and Company
Subsidiaries are in compliance with, and have not breached, violated or
committed a default under (and no event has occurred that with notice or the
lapse of time, or both, would constitute a breach, default or violation of) any
term of, any such Inbound License Agreements. 
All other parties to such Inbound License Agreements are in compliance
with, and have not breached, violated or committed a default under (and no
event has occurred that with notice or the lapse of time, or both, would
constitute a breach, default or violation of) any term of, any such Inbound
License Agreements.

 

(e)           The Company or a Company Subsidiary
(i) solely owns all right, title and interest in and to the Company IP and (ii)
has the valid and enforceable right to use all third party Intellectual
Property used by the Company or any Company Subsidiary, in each case free and
clear of all Encumbrances, except for Permitted Encumbrances.  The Company has no Knowledge of any facts
that may prejudice the validity or enforceability of the Company IP rights.

 

(f)            There are no claims or suits
pending or, to the Knowledge of the Company, threatened:  (i) alleging that the use of the Company IP,
or the conduct of the Company’s or any Company Subsidiary’s business as
currently conducted or planned to be conducted, infringes upon or violates any
Intellectual Property rights of any third party (either directly or
indirectly), or (ii) challenging the ownership, use, validity, or
enforceability of any Company IP rights that, in each case or in the aggregate,
if decided adversely to the Company or any Company Subsidiary, has had or could
reasonably be expected to have a material adverse impact on the Company and the
Company Subsidiaries taken as a whole, and to the Company’s Knowledge, there is
no reasonable basis to allege any of the foregoing.  Section 3.16(f) of the Company Disclosure
Schedule lists all U.S. and foreign Patents of a third party for which:  (A) the Company or any Company Subsidiary has
obtained written opinion of counsel, or (B) the Company or any Company
Subsidiary has received written notice of infringement or license offer.  The Company or a Company Subsidiary has the
sole and exclusive right to bring a claim or suit for past, present, and future
infringement or violation of the Company IP rights.  The Company and the Company Subsidiaries have
not brought or threatened to bring any such claim or suit that remains
unresolved other than those brought with the consent of the Parent pursuant to
Section 5.1.

 

30

 

(g)           All of the Company IP was
developed, without infringing or violating any third party Intellectual
Property rights, by (1) employees of the Company or a Company Subsidiary within
the scope of their employment, (2) third parties as “works-made-for-hire,” as
that term is defined under Section 101 of Title 17 of the United States Code
(17 U.S.C. § 101), pursuant to valid written agreements, or (3) independent
contractors who have assigned their rights in such Company IP to the Company or
a Company Subsidiary pursuant to written agreements.

 

(h)           All Senior Management
Personnel and employees at the director level and above, and substantially all
other employees (and to the Knowledge of the Company, all former employees and
officers) of the Company and of each Company Subsidiary have executed a
proprietary rights and confidentiality agreement or a similar agreement.  To the Knowledge of the Company, no current
or former employees are in violation of his or her respective proprietary
rights and confidentiality agreements with the Company or a Company Subsidiary.

 

(i)            All Senior Management
Personnel and employees at the director level and above, and substantially all
other employees of the Company and of each Company Subsidiary and other parties
having access to any Trade Secrets related to the business of the Company or
any Company Subsidiary as currently conducted or contemplated to be conducted
have executed written nondisclosure agreements with the Company or a Company
Subsidiary to protect the Company’s or the Company Subsidiary’s proprietary
interests in and to such Trade Secrets. 
No Trade Secret related to the business of the Company or any Company
Subsidiary as currently conducted or contemplated to be conducted has been
disclosed or authorized to be disclosed to any third party other than pursuant
to a non-disclosure agreement, and no party to any such nondisclosure agreement
is in breach thereof.

 

(j)            The consummation of the
Merger will not result in (i) the loss or impairment of the Company IP rights
or any Intellectual Property rights licensed to the Company or any Company
Subsidiary, (ii) a breach, default or violation of any term of, or the
triggering of any termination or acceleration right under, any Inbound License
Agreement or Outbound License Agreement, (iii) the providing or making
available of source code for any Company Software to a third party, (iv) the
granting to any third party of rights in Company IP greater than the rights
granted therein by Company or any Company Subsidiary prior to consummation of
the Merger, or (v) Company or any Company Subsidiary being obligated to pay any
royalties or other amounts to any party in excess of the amounts payable by
Company or any Company Subsidiary prior to consummation of the Merger.

 

(k)           No current or former
stockholder, Director, officer or employee of the Company or any Company
Subsidiary (or any of their respective predecessors in interest) has or will
have, after giving effect to the Merger, any legal or equitable right, title,
or interest in or to, directly or indirectly, in whole or in part, any of the
Company IP.

 

31

 

(l)            For purposes of this
Agreement, the following terms have the meaning ascribed to them below:

 

(i)            “Company
IP” means all Intellectual Property owned, singly or jointly, by the
Company or any Company Subsidiary.

 

(ii)           “Company
Software” means all Computer Software that the Company or any Company
Subsidiary sells, leases, or licenses, or is planning to sell, lease, or
license to a third party.

 

(iii)          “Computer Software”
means all computer programs (including all source code and object code),
databases, compilations and data, and all documentation related to any of the
foregoing.

 

(iv)          “Copyrights” means all
copyrights, whether registered or unregistered, including without limitation
moral rights and rights of attribution and integrity, copyrights in Computer
Software and in the content contained on any Web site, and registrations and
applications for any of the foregoing, and rights to sue for infringement
thereof.

 

(v)           “Inbound License Agreements”
means all Contracts (whether written or oral, including consent to use
agreements and covenants not to sue but excluding licenses for software
applications that are generally available on nondiscriminatory pricing terms
and have an acquisition cost of $10,000  or
less) to which the Company or any Company Subsidiary is a party or otherwise
bound, under which the Company or any Company Subsidiary is granted any
Intellectual Property rights.

 

(vi)          “Intellectual Property”
means Patents, Copyrights, Trade Secrets, Trademarks, domain names, inventions,
processes, formulae, algorithms, models, plans, methodologies, theories, ideas,
techniques, discoveries, disclosures, drawings, records, any other intellectual
property recognized worldwide and any other intangibles of a like nature.

 

(vii)         “Open Source Materials”
means all Computer Software or other material that is distributed as “free
software”, “open source software” or under a similar licensing or reseller
model.

 

(viii)        “Outbound License Agreement”
means all Contracts (whether written or oral, including consent to use
agreements and covenants not to sue) to which the Company or any Company

 

32

 

Subsidiary is a party
or otherwise bound, under which the Company or any Company Subsidiary has granted
or is otherwise bound to grant any Intellectual Property rights.

 

(ix)           “Patents” means patents
and patent applications (including, without limitation, all provisionals,
divisionals, continuations, continuations-in-part, reissues, renewals,
extensions, and reexaminations), utility models, design registrations,
certificates of invention and other governmental grants for the protection of
inventions or industrial design anywhere in the world, and rights to sue for
infringement thereof.

 

(x)            “Registered Company IP”
means all: (i) Patents and Patent applications, (ii) registered Copyrights and
Copyright applications, (iii) registered Trademarks and Trademark applications,
(iv) domain names, and (v) any other intellectual property registered under the
laws of any jurisdiction and applications for registration thereof, in which
the Company or any Company Subsidiary has an ownership interest.

 

(xi)           “Trademarks” means any
trademarks, service marks, trade names, designs, logos, emblems, signs,
insignia, slogans, other designations of source or origin and general
intangibles of like nature, together with the goodwill of the business
symbolized by any of the foregoing, registrations and applications relating to
any of the foregoing, and rights to sue for infringement thereof.

 

(xii)          “Trade Secrets” means
all information, including a formula, pattern, compilation, program, device,
method, technique, or process, that:  (i)
derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, the
public, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy, and rights to sue for infringement
thereof.

 

Section 3.17           Labor
Matters.

 

(a)           Except as set forth in Section
3.17(a) of the Company Disclosure Schedule, neither the Company or any of the
Company Subsidiaries is party to, or bound by, any labor agreement, collective
bargaining agreement, work rules or practices, or any other labor-related agreement
or arrangement with any labor union, labor organization or works council; there
are no labor agreements, collective bargaining agreements, work rules or
practices, or any other labor-related agreements or arrangements that pertain
to any of the employees of the Company or any of the Company Subsidiaries; and
no employees of the Company or any of the Company

 

33

 

Subsidiaries are represented by any labor
organization with respect to their employment with the Company or any of the
Company Subsidiaries.

 

(b)           Except as set forth in Section
3.17(b) of the Company Disclosure Schedule, no labor union, labor organization,
works council, or group of employees of the Company or any of the Company
Subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened in writing to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority.  To the
Knowledge of the Company, there are no labor union organizing activities
occurring with respect to any employees of the Company or its Subsidiaries.

 

(c)           Except as set forth in Section
3.17(c) of the Company Disclosure Schedule, from January 1, 2001, there has
been no actual or, to the Knowledge of the Company, threatened material
arbitrations, labor or employee grievances, labor or employee disputes,
strikes, lockouts, labor or employee slowdowns or work stoppages against or
affecting the Company or any of the Company Subsidiaries.

 

(d)           Except as set forth in Section
3.17(d) of the Company Disclosure Schedule, neither the Company nor any of the
Company Subsidiaries, nor any of their respective employees, agents or
representatives have committed any material unfair labor practice as defined in
the National Labor Relations Act.

 

(e)           Except as set forth in Section
3.17(e) of the Company Disclosure Schedule, neither the Company nor any of the
Company Subsidiaries are delinquent in payments to any employees or former
employees for any services or amounts required to be reimbursed or otherwise
paid.

 

(f)            Except as set forth in
Section 3.17(f) of the Company Disclosure Schedule, neither the Company nor any
of the Company Subsidiaries has received (i) notice of any unfair labor
practice charge or complaint pending or threatened before the National Labor
Relations Board or any other Governmental Entity against it, (ii) notice of any
charge or complaint with respect to or relating to it pending before the Equal
Employment Opportunity Commission or any other Governmental Entity responsible
for the prevention of unlawful employment practices, (iii) notice of the intent
of any Governmental Entity responsible for the enforcement of labor,
employment, wages and hours of work, child labor, immigration, or occupational
safety and health laws to conduct an investigation with respect to or relating
to it or notice that such investigation is in progress, or (iv) notice of any
complaint, lawsuit or other proceeding pending or threatened in any forum by or
on behalf of any present or former employee of such entity, any applicant for
employment or classes of the foregoing, alleging breach of any express or implied
contract of employment, the breach of any applicable law governing employment
or the termination thereof, or other discriminatory, wrongful or tortuous
conduct in connection with the employment relationship.

 

34

 

(g)           Except as set forth in Section
3.17(g) of the Company Disclosure Schedule, each of the Company and the Company
Subsidiaries are and have been in compliance in all material respects with all
notice and other requirements under the Workers’ Adjustment and Retraining
Notification Act and any similar foreign, state or local law relating to plant
closings and layoffs.

 

(h)           Except as set forth in Section
3.17(h) of the Company Disclosure Schedule, to the Company’s Knowledge, no
employee of the Company or any of the Company Subsidiaries is in any respect in
violation of any term of any employment agreement, nondisclosure agreement,
common law nondisclosure obligation, fiduciary duty, noncompetition agreement,
restrictive covenant or other obligation to a former employer of any such
employee relating (i) to the right of any such employee to be employed by the
Company or any Company Subsidiary or (ii) to the Knowledge or use of Trade
Secrets or proprietary information.

 

(i)            Except as set forth in
Section 3.17(i) of the Company Disclosure Schedule, the execution of this
Agreement and the consummation of the Transactions contemplated by this
Agreement will not result in any breach or other violation of any collective
bargaining agreement, employment agreement, consulting agreement or any other
labor-related agreement to which the Company or any of the Company Subsidiaries
is a party.

 

Section 3.18           Compliance
with Laws; Company Permits.

 

(a)           Except as set forth in Section
3.18(a) of the Company Disclosure Schedule, the Company and the Company
Subsidiaries have complied (i) in all material respects with all laws,
judgments, decrees, orders, writs and injunctions and (ii) in all respects with
all material rules, regulations and ordinances, in each case of all Governmental
Entities applicable to the Company and the Company Subsidiaries.

 

(b)           Each of the Company and the
Company Subsidiaries is in possession of all franchises, grants,
authorizations, establishment registrations, product listings, licenses,
permits, easements, variances, exceptions, consents, certificates,
identification and registration numbers, approvals and orders of any
Governmental Entity necessary for the Company and the Company Subsidiaries to
own, lease and operate their properties and assets as presently operated, or to
offer or perform their services or to develop, produce, store, distribute and
market their products or to otherwise carry on their business as it is now
being conducted (collectively, the “Company Permits”), other than those
the failure to hold would not result in a Company Material Adverse Effect.  Section 3.18(b)(i) of the Company Disclosure
Schedule contains a true and complete list of all such Company Permits as of
the date of this Agreement.  All Company
Permits are in full force and effect and the Company and the Company
Subsidiaries are in compliance in all materials respects with the terms of such
Company Permits.  Except as would not
have a Company Material Adverse Effect, no suspension or cancellation of a
Company Permit is pending, nor to the Knowledge of the Company, is any
suspension or cancellation

 

35

 

threatened. 
Except as set forth on Section 3.18(b)(ii) of the Company Disclosure
Schedule, no such Company Permits will terminate or be cancelable as a result
of the Transactions, including the Merger. 
Section 3.18(b)(iii) of the Company Disclosure Schedule sets forth, as
of the date of this Agreement, all actions, proceedings, investigations or
surveys pending or, to the Knowledge of the Company, threatened against the
Company or any Company Subsidiary that could reasonably be expected to result
in the suspension or cancellation of any Company Permit.  The Company has delivered or made available
to Parent copies of all Company Permits and all material correspondence which
bears on compliance by the Company and the Company Subsidiaries with the
Company Permits since January 1, 2003.

 

Section 3.19           Warranties.  In each agreement for Company Software that
is expected to entail the collection of revenue of $100,000 or more per annum
or in the aggregate, except as set forth on Section 3.19 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has
provided any warranties with respect to the Company Software other than stating
that for no more than 120 days from installation of the Company Software (a)
the Company Software will, under normal use and operation, perform
substantially in accordance with its documentation, and (b) the media on which
the Company Software is provided will be free of defects in materials and
workmanship under normal use.  The sole
and exclusive remedy for a breach of the media warranty described in the
previous sentence under the terms of each such agreement is for the Company or
a Company Subsidiary to replace the defective media.  In each agreement for Company Software,
neither the Company nor any Company Subsidiary has failed to limit its
liability under each agreement with such customer for Company Software (i) to
exclude consequential and punitive damages, and (ii) to the amount of fees paid
pursuant to the agreement (except in the case of indemnification claims).

 

Section 3.20           Environmental
Matters.

 

(a)           The Company and the Company
Subsidiaries are in compliance in all material respects with Environmental
Laws.

 

(b)           Since January 1, 2000 neither
the Company nor any Company Subsidiary has received any communication or
notice, whether from a Governmental Entity or otherwise, alleging any violation
of or noncompliance with any Environmental Laws by the Company or any Company
Subsidiary or for which any of them is responsible, and there is no pending or,
to the Company’s Knowledge, threatened Environmental Claim.

 

(c)           To the Company’s Knowledge,
there are no past or present facts or circumstances that are reasonably likely
to form the basis of any Environmental Claim against the Company or any Company
Subsidiary or against any Person or entity whose liability for any
Environmental Claim the Company or such Company Subsidiary have retained or
assumed either contractually or by operation of law.

 

36

 

(d)           The Company has delivered or
made available in the Data Room to Parent all assessments, reports, data,
results of investigations or audits, or other information that is in the
possession of, or reasonably available to the Company relating to environmental
matters at, or the environmental condition of, the real property owned by the
Company.

 

(e)           For purpose of this Agreement,
the following terms have the definitions ascribed below:

 

(i)            “Environmental Claim”
means any claim, action, investigation or notice by any Person or entity
alleging potential liability for investigatory, cleanup or governmental
response costs, or natural resources or property damages, or Personal injuries,
attorneys’ fees or penalties relating to (i) the presence, or release into the
environment, of any Materials of Environmental Concern at any location owned or
operated by the Company or any Company Subsidiary, now or in the past, or (ii)
any violation, or alleged violation, of any Environmental Law.

 

(ii)           “Environmental Laws”
means all federal, state, local and foreign laws and regulations relating to
pollution or protection or preservation of human health or the environment,
including, without limitation, laws and regulations relating to Materials of
Environmental Concern, or otherwise relating to the generation, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon.

 

(iii)          “Materials of Environmental
Concerns” means (a) any petrochemical or petroleum products, radioactive
materials, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “restricted hazardous
materials,” “extremely hazardous substances,” “toxic substances,” “contaminants”
or “pollutants” or words of similar meaning and regulatory effect; or (c) any
other chemical, material or substance, exposure to which is prohibited,
limited, or regulated by any applicable Environmental Law.

 

Section 3.21           Information
in the Proxy Statement.  The proxy or
information statement or similar materials to be delivered to the Company’s
stockholders in connection with the Merger (the “Proxy Statement”), at
the time filed with the SEC, at the date mailed to the Company’s stockholders
and at the time of the Company

 

37

 

Stockholder
Meeting, will not 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, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the Company with
respect to statements made therein based on information supplied in writing by
Parent or the Merger Sub expressly for inclusion in the Proxy Statement.  The Proxy Statement will comply in all material
respects with the provisions of the Exchange Act.

 

Section 3.22           Opinion
of Financial Advisor.  The Company
has received the written opinion of Thomas Weisel Partners, (“Thomas Weisel
Partners”) the Company’s financial advisor, dated as of the date of this
Agreement, to the effect that, as of the date of this Agreement, the Merger
Consideration is fair to the Company’s stockholders from a financial point of
view.  The Company has been authorized by
Thomas Weisel Partners to permit the inclusion of such opinion in its entirety
in the Proxy Statement, provided that Thomas Weisel Partners shall have the
right to review and approve in advance of filing the form and content of such
opinion and any reference thereto contained in the Proxy Statement (such approval
not to be unreasonably withheld).

 

Section 3.23           Insurance.  The Company and the Company Subsidiaries are
insured against such risks and in amounts and with coverage customarily carried
by Persons conducting business or owning assets similar to the Company and the
Company Subsidiaries.  Section 3.23 of
the Company Disclosure Schedule sets forth a complete and correct list of all
insurance policies (including the carrier and a brief summary of the nature and
terms thereof and any amounts paid or payable to the Company or any Company
Subsidiary thereunder) providing coverage in favor of the Company or any
Company Subsidiary or any of their respective properties and the Company has
delivered or made available in the Data Room to Parent a complete and accurate
copy of all such policies.  Each such
policy is in full force and effect; there is no default under any such policy;
and there has not been any failure to give any notice or present any claim
under any such policy in a timely fashion or in the manner required by any such
policy; and as of the date of this Agreement, no notice of termination,
cancellation or reservation of rights has been received by the Company or any
Company Subsidiary.

 

Section 3.24           Brokers.  No broker, investment banker, financial advisor
or other Person, other than Thomas Weisel Partners and Updata Capital (“Updata”),
the fees and expenses of which will be paid by the Company, is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Merger and the Transactions based upon arrangements made by
or on behalf of the Company or any Company Subsidiary.  True and correct copies of all agreements
between the Company and Thomas Weisel Partners and Updata, including, without
limitation, any fee arrangements have been delivered or made available in the
Data Room to Parent.  The fees and expenses of all accountants,
brokers, financial advisors and legal counsel retained by the Company in
connection with this Agreement or the transactions

 

38

 

contemplated hereby incurred
or to be incurred by the Company will not exceed the aggregate amount set forth
in Section 3.24 of the Company Disclosure Schedule.

 

Section 3.25           Certain
Business Practices.  Neither the
Company, any Company Subsidiary, or any officer, Director, employee or agent of
the Company or any Company Subsidiary, or any other Person acting on their
behalf has, directly or indirectly, (a) given, offered, solicited or agreed to
give, offer or solicit any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment, regardless of form and whether in money,
property or services, to any customer, supplier, governmental employee or other
Person who is or may be in a position to help or hinder the Company or any
Company Subsidiary in connection with the development, marketing, use, sale or
acceptance of products or services of the Company or any Company Subsidiary (or
to assist the Company or any Company Subsidiary in connection with any actual
or proposed transaction relating to the products and services of the Company or
any Company Subsidiary) that, in each case, was unlawful under any applicable
law; (b) used any corporate funds or, to the Knowledge of the Company or any
Company Subsidiary, any Personal funds, for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; (c)
made any unlawful payment to domestic or foreign government officials or
employees, or to domestic or foreign political parties or campaigns, from
corporate funds; (d) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; (e) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; or (f) made any false or
fictitious entry on the books or records of the Company or any Company
Subsidiary relating to any such payments.

 

Section 3.26           Takeover
Statutes.  The Company Board of Directors has
taken all necessary action so that the entry into this Agreement, and the
consummation of the Transactions shall be exempted from the “business
combination” restrictions of Section 203 of the DGCL.  No other “fair price,” “moratorium,” “control
share acquisition” or similar anti-takeover statute or regulation, including,
without limitation, the “business combination” restrictions of Section 203 of
the DGCL, or any applicable anti-takeover provision in the Certificate of
Incorporation and Bylaws of the Company  is,
or at the Effective Time will be, applicable to the Merger or the Transactions.

 

Section 3.27           Material
Acquisitions.

 

(a)           Neither the Company nor any
Company Subsidiary has made any claim under any Material Acquisition Agreement
or with respect to any Material Acquisition against the counterparty thereto
and no counterparty or any Person entitled to indemnification from the Company
thereunder has made any claim against the Company or any Company Subsidiary
under any Material Acquisition Agreement or with respect to any Material
Acquisition and to the Knowledge of the Company, there is no basis for any
claim.

 

39

 

(b)           For purposes of this
Agreement, the following terms have terms have the meaning ascribed to them
below:

 

(i)            “Material Acquisitions”
means all transactions contemplated by the Material Acquisition Agreements.

 

(ii)           “Material Acquisition
Agreement” means each of (A) the Asset Purchase Agreement by and between
Vastera, Inc. and General Electric Company and Client Business Services, Inc.,
dated June 19, 2003, and any related amendments and agreements necessary to
consummate the transactions contemplated thereby; (B) the Agreement and
Purchase and Sale by and among Vastera, Inc., 3063771 Nova Scotia Company,
882976 Ontario, Inc. t/a Imanet and the Shareholders of Imanet as identified
herein, dated February 6, 2002, and any related amendments and agreements
necessary to consummate the transactions contemplated thereby;  (C) the Subscription Agreement by and among Vastera
Do Brasil LTDA., Bergen Informática., Antálica S.A. and the Founders of Bergen
Informática LTDA., as identified herein, dated as of March 1, 2002, and any
related amendments and agreements necessary to consummate the transactions
contemplated thereby; (D) the Agreement and Plan of Merger and Reorganization
by and among Vastera Acquisition Corp., Vastera, Inc., CIMA Information
Technology, Inc., and the Founders of CIMA Information Technology, Inc., dated
as of December 19, 2001, and any related amendments and agreements necessary to
consummate the transactions contemplated thereby; (E) the Agreement and Plan of
Merger and Reorganization by and among Vastera, Inc., Vastera Acquisition
Corporation, Speed Chain Network, Inc. and the Founders of Speed Chain Network,
Inc. as identified therein, dated March 1, 2001, and any related amendments and
agreements necessary to consummate the transactions contemplated thereby; and
(F) the Stock Transfer Agreement by and among Vastera, Inc., Vastera Solution
Services Corporation and Ford Motor Company, dated July 14, 2000, and any
related amendments and agreements necessary to consummate the transactions
contemplated thereby (including without limitation (1) the License Agreement by
and between Ford Motor Company and Vastera Solution Services Corporation, dated
July 14, 2000; (2) the Global Trade Services Agreement by and between Ford
Motor Company and Vastera Solution Services Corporation, dated July 14, 2000;
(3) the Salaried Employee Secondment Agreement by and between Vastera Solution
Services Corporation and Ford Motor Company, dated July 14, 2000; and (4) the
Employee Transfer Agreement by and between Vastera Solution Services
Corporation and Ford Motor Company, dated July 14, 2000).

 

40

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES

OF PARENT AND THE MERGER SUB

 

Parent and the Merger Sub represent and
warrant to the Company as follows:

 

Section 4.1             Organization.

 

(a)           Parent is a national banking
association duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has all requisite
corporate power and authority to carry on its business as is now being
conducted.  Parent has made available to
the Company true and complete copies of the Organization Certificate, Articles
of Association, and Bylaws of Parent, in each case as amended to date.

 

(b)           The Merger Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has all requisite
corporate power and authority to carry on its business as is now being
conducted.  Parent has made available to
the Company true and complete copies of the Certificate of Incorporation and
Bylaws of the Merger Sub, in each case as amended to date.

 

Section 4.2             Authorization;
Validity of Agreement; Necessary Action. 
Each of Parent and the Merger Sub has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
Transactions.  The execution, delivery and
performance by Parent and the Merger Sub of this Agreement and the consummation
of the Transactions have been duly authorized by each of Parent and the Merger
Sub, and by the sole stockholder of the Merger Sub, and no other corporate
approval on the part of Parent or the Merger Sub is necessary to authorize the
execution and delivery by Parent and the Merger Sub of this Agreement and the
consummation of the Transactions.  This
Agreement has been duly and validly executed and delivered by Parent and the Merger
Sub and, assuming due and valid authorization, execution and delivery hereof by
the Company, is the valid and binding obligation of each of Parent and the
Merger Sub enforceable against each of them in accordance with its terms, except that such enforceability (a) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to the enforcement of creditors’ rights generally and (b) is
subject to general principles of equity.

 

Section 4.3             Consents
and Approvals; No Violations.  None
of the execution, delivery or performance of this Agreement by Parent or the
Merger Sub, the consummation by Parent or the Merger Sub of the Merger or the
other Transactions, or compliance by Parent or the Merger Sub with any of the
provisions hereof will:

 

41

 

(a)           conflict with or result in any
breach of any provision of the organizational documents of Parent or the
Certificate of Incorporation or Bylaws of the Merger Sub;

 

(b)           subject to making the filings
and obtaining the authorizations, consents, approvals and reviews set forth in
Section 4.3(c), conflict with or violate any federal, state, foreign or other
law, statute, constitution, principle of common law, resolution, ordinance,
order, judgment, injunction, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated or implemented by any Governmental Entity
applicable to Parent or the Merger Sub, or any of their properties or assets;

 

(c)           require any registration or
filing by Parent or the Merger Sub with, or require any action, permit,
authorization, consent, approval of or review by, any third party or any
Governmental Entity, other than (i) filings, permits, authorizations, consents
and approvals as may be required under the HSR Act and in respect of comparable
provisions under applicable pre-merger notification laws or regulations of
foreign jurisdictions, (ii) such filings under and compliance with applicable
requirements of the Exchange Act as may be required in connection with this
Agreement, and (iii) the Banking Regulatory Approvals;

 

(d)           violate or result in the
violation of, conflict with or result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by or result in a right of termination or acceleration,
result in the loss of a material benefit under or result in the creation of any
Encumbrance upon any of its properties or assets, under any of the terms,
conditions or provisions of any of its contractual obligations; or

 

(e)           except in the case of clauses
(b), (c) or (d) where any failure to obtain such consents,  approvals or notices, or where such
violations, conflicts, breaches or defaults would not individually or in the
aggregate have a material adverse effect on the ability of Parent and the
Merger Sub to consummate the Merger contemplated hereby.

 

Section 4.4             Brokers.  No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Transactions based upon arrangements made by or on behalf
of Parent or the Merger Sub.

 

Section 4.5             Funds.  Parent has and will have available to it at
the Effective Time, sufficient funds to deliver the Merger Consideration to all
of the holders of the Common Stock.

 

42

 

Section 4.6             Information
Supplied.  None of the information
supplied or to be supplied in writing by or on behalf of Parent or the Merger
Sub specifically for inclusion or incorporation by reference in the Proxy
Statement will, at the date it is first mailed to the stockholders of the Company
and at the time of the Company Stockholders’ Meeting, 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, in light
of the circumstances under which they are made, not misleading.

 

ARTICLE V

 

CONDUCT
OF BUSINESS PENDING THE MERGER

 

Section 5.1             Interim
Operations of the Company.

 

(a)           During the period from the
date hereof and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, except to the extent
that Parent shall otherwise give prior written consent or as expressly
permitted pursuant this Agreement, the Company shall, and shall cause each
Company Subsidiary to carry on its business, in the ordinary course consistent
with past practice, in substantially the same manner as currently conducted and
in compliance in all material respects with all applicable laws and
regulations, pay or perform other material obligations when due, and to use its
reasonable best efforts to (i) preserve intact its present business
organization, (ii) keep available the services of its officers, employees, and
(iii) preserve its relationships with customers, suppliers, licensors,
licensees, and others with which it has business dealings with the intention
that its goodwill and ongoing business shall be unimpaired at the Effective
Time.

 

(b)           Without limiting the
generality of the foregoing, except as expressly permitted by the terms of this
Agreement or as otherwise set forth on Section 5.1(b) of the Company Disclosure
Schedule, without the prior written consent of Parent, during the period from
the date hereof and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, the Company shall not
do, and shall not permit any Company Subsidiary to do, any of the following:

 

(i)            amend its Certificate of
Incorporation or Bylaws or the organizational documents of its Company
Subsidiary;

 

(ii)           (A) authorize for issuance, issue,
sell, transfer, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of, capital stock of any class or
any other securities or equity equivalents (including, without limitation,
stock appreciation rights) of the Company or any Company Subsidiaries, other
than pursuant to the exercise of the Options outstanding on the date hereof and
in accordance with the existing terms

 

43

 

of such Options; (B)
split, combine or reclassify the outstanding Common Stock or any capital stock
of the Company or the Company Subsidiaries; (C) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock (other than dividends or distributions by a direct or
indirect wholly-owned Company Subsidiary to the Company or another Company
Subsidiary);  (D) redeem, purchase or
otherwise acquire any shares of any class or series of its capital stock, or
any instrument or security which consists of or includes a right to acquire
such shares; or (E) except as permitted by and in accordance with the terms of
Section 5.2 enter into any agreement, understanding or arrangement with respect
to the sale, voting, or registration of the Company capital stock or that of
the Company Subsidiaries;

 

(iii)          (A) incur or assume any
indebtedness for borrowed money (including, without limitation, drawdowns under
existing credit facilities) other than pursuant to the equipment line under the
Comerica Loan or issue any debt securities; (B) fail to make any scheduled
payment on indebtedness evidenced by the debt instruments to which the Company
or any Company Subsidiary is a party; (C) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person (other than direct and
indirect wholly-owned Company Subsidiaries);or (D) make any loans, advances or
capital contributions to, or investments in, any other Person other than direct
or indirect wholly-owned Company Subsidiaries;

 

(iv)          incur or commit to incur any
capital expenditure or expenditures in excess of $300,000 individually or $1,500,000
in the aggregate;

 

(v)           except as required by
applicable law (A) take any of the actions described in Section 3.8(a)(x),  (B) promote any officers,
directors, employees or consultants, (other than promotions of employees below
the director level to another level below the director level in the ordinary
course of business consistent with past practice) or pursuant to existing
contractual commitments (and provided that if any such promotion is made, the
Company shall provide Parent with written notice of such action before
Closing), or (C) terminate any Benefit Plan;

 

(vi)          (A) enter into any
collective bargaining agreement, (B) hire any new officers, Directors,
employees at the director level or above or consultants other than as approved
in advance by Parent (which approval shall not be unreasonably withheld), (C)
terminate the employment of any officers, Directors, Senior Management
Personnel,

 

44

 

employees
at the director level, or consultants without cause, (D) substantially alter
the duties and responsibilities of any officers, Directors, Senior Management
Personnel, employees at the director level or above, or consultants, or (E)
fail to notify Parent if prior to the Closing any officer, Director, Senior
Management Personnel, employees at the director level or above or consultant
gives notice of resignation or retirement or if prior to the Closing the
Company or any Company Subsidiary gives a notice of termination or a
termination or disciplinary warning to any officer, Director, employee or
consultant;

 

(vii)         fail to maintain with reputable
insurance companies insurance in such amounts and against such risks and losses
as are customary for companies engaged in the business of the Company and the
Company Subsidiaries, consistent with the Companies’ past practices; provided,
however, that, the Company shall not, and shall not permit any Company
Subsidiary to, renew any insurance policies which provide for the payment of
any premiums that are materially greater than the amount of the current
premiums paid under any such insurance policy;

 

(viii)        except as set forth on Section
5.1(b)(viii) of the Company Disclosure Schedule and except for Permitted
Encumbrances, sell, transfer, lease, mortgage, pledge, license, encumber or
otherwise dispose of any of its properties or assets, other than in the
ordinary course of business consistent with past practice, provided that such
transactions do not exceed $50,000 per transaction and $200,000 in the
aggregate;

 

(ix)           (A) modify, amend or terminate
any Material Contract or Customer Contract; (B) waive, release or assign any
rights, or claims under any of the Material Contract other than such
modifications and amendments that are not material in nature or amount and provided
that a copy of such amendment or modification is provided to Parent in advance
of being entered into; or (C) enter into any commitment,  transaction, or Contract other than a
commitment, transaction or Contract (1) entered into in the ordinary course of
business consistent with past practice, (2) if with a supplier, does not
involve the payment by the Company or any Company Subsidiary of more than
$100,000 per annum, and (3) if with a customer, does not involve the receipt by
the Company or any Company Subsidiary of more than $250,000 per annum or
$500,000 over the life of the commitment, transaction or Contract and contains
terms consistent with past practice and no less favorable than those set forth
on Section 5.1(b)(ix) of the Company Disclosure Schedule;

 

45

 

(x)            grant or agree to grant any
exclusive license, or enter into, agree to enter into or modify any reseller,
marketing, or sales agreement;

 

(xi)           except as set forth on Section
5.1(b)(xi) of the Company Disclosure Schedule, waive or cancel any debt (other
than due from officers, Directors and employees), claim, account receivable or
trade account involving amounts in excess of $25,000 individually or $100,000
in the aggregate;

 

(xii)          enter into any lease of real
property;

 

(xiii)         (A) sell, transfer or license to any Person
any material Company IP rights other than pursuant to nonexclusive licenses
entered into in the ordinary course of business consistent with past practice;
or (B) extend, amend or modify in any material respect any of the material
Company IP rights;

 

(xiv)        dispose of or permit to lapse any
Company IP rights not licensed from a third party;

 

(xv)         fail to make in a timely manner
any filings with the SEC required under the Securities Act or the Exchange Act;

 

(xvi)        take any action that would result
in a failure to maintain trading of the Common Stock on Nasdaq;

 

(xvii)       (A)  except as required by applicable law, make
any change in any accounting method, principles or practice by the Company or
any of the Company Subsidiaries, except for such change required by reason of a
concurrent change in GAAP or compliance with the applicable requirements of the
rules and regulations promulgated by the SEC; (B) make any Tax election or
change any Tax election already made; (C) amend any Tax Returns; (D) enter into
any closing agreement; (E) settle or compromise any claim or assessment
relating to Taxes; or (F) consent to any claim or assessment relating to Taxes
or any waiver of the statute of limitations for any such claim or assessment;

 

(xviii)      pay, discharge or satisfy any
claims, liabilities or obligations (whether absolute, accrued, contingent or
otherwise), other than the payment, discharge or satisfaction of any claims,
liabilities or obligations (x) in the ordinary course of business consistent
with past practice, or (y) fully reserved on the consolidated balance sheet (or
the notes thereto) of the Company, dated September 30,

 

46

 

2004, included in the
Form 10-Q filed by the Company with the SEC on November 8, 2004;

 

(xix)         (A) merge or consolidate with
any other Person (other than the Merger); 
(B) adopt a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization or other reorganization of the Company or any
Company Subsidiary;  (C) acquire the
capital stock of any Person or the business of any Person through the
acquisition of assets (except that purchases of assets may be made in the
ordinary course of business consistent with past practice that do not exceed
$50,000 per transaction or $200,000 in the aggregate); or (D) enter into any
partnership, joint venture or strategic alliance;

 

(xx)          take any action that would or
is reasonably likely to result in any of the conditions to the Merger set forth
in Article VII not being satisfied, or would make any representation or
warranty of the Company contained herein inaccurate in any material respect at,
or as of any time prior to, the Effective Time, or that would impair the ability
of the Company to consummate the Merger in accordance with the terms hereof or
materially delay such consummation;

 

(xxi)         subject Parent or the Surviving
Corporation or any of their respective Subsidiaries to any non-compete,
exclusivity or other restriction on any of their respective businesses or
operations following the Closing;

 

(xxii)        subject to the other restrictions
set forth in this Section 5.1, enter into any agreement or arrangement with any
of their respective affiliates or any of the stockholders other than such
agreements and arrangements as are entered into in the ordinary course of
business and which have been negotiated on an arm’s-length basis and are no
less favorable to the Company or any Company Subsidiary than the Company or
such Company Subsidiary would have obtained from an unaffiliated third party,
and provided that the Company shall have notified Parent in writing prior to
entering into any such affiliate or stockholder transaction;

 

(xxiii)       settle or compromise any suit,
action or investigation whether now pending or hereafter brought;

 

(xxiv)       make any material change in the
marketing or business operations of the Company, including, without limitation,
(x) entering into any new, or discontinuing any existing line of business or
operations, (y) commencing or discontinuing operations or

 

47

 

solicitations for
business in any geographic area, or (z) opening or closing any office; or

 

(xxv)        enter into any written or oral
agreement, contract, commitment or arrangement to do any of the foregoing, or
authorize, recommend, propose or announce an intention to do any of the
foregoing.

 

(c)           The Company shall confer with
Parent and keep Parent apprised on a regular basis and as and when reasonably
requested regarding the management, business, operations and financial
condition of the Company and the Company Subsidiaries, including without
limitation, reports on relations with customers and the status of Material
Contracts and Customer Contracts, negotiations with potential new customers or
existing customers and prompt (within one business day) notification if the
Company or any Company Subsidiary has received notice (written or oral) of the
cancellation or termination of, or any expression or indication of any
intention or desire to cancel or terminate, any Material Contract, or Customer
Contract.  In the event that the Company
requests the consent of the Parent to the taking of any action that would
otherwise be prohibited pursuant to Section 5.1(b), the Company shall give
written notice to any of Tod Burwell, Enrico DiLello or Paul Simpson (each, an “Approved
Representative”), by
e-mail or fax at the contract details to be provided by Parent on the date
hereof, whichever is the most practicable in the circumstances, of the matter
requiring consent in sufficient detail and background to allow the Parent to
make an effective evaluation of the matter and the consent requested. The
written notice shall go to the Approved Person whose name first appears in the
list provided in the preceding sentence. 
If such Person is unavailable or otherwise known by the Company to be
unavailable to receive such notice, the Company may provide such notice to the
second Person listed, and if unavailable, to the third Person listed.  If any such consent request relates to any
agreement, than a copy of such notice, with a copy of such agreements and any
related documents, shall also be sent to Bruce Gaylord or any other Person identified
by Parent as a representative of its legal department Parent (the “Approved
Legal Representative”). Consent requests related to litigation and other
similar legal matters should also be copied to the Approved Legal
Representative.  The Approved
Representative and the Approved Legal Representative, if required, shall act as
soon as practicable in the circumstance to advise the Company whether Parent
will consent.

 

(d)           The Company shall use
reasonable best efforts to negotiate and renew, on terms substantially similar
or no less favorable than existing terms, all Customer Contracts prior to the
date of expiration or any date that would grant any party thereto a right of
termination; provided, that in each case, Parent shall have the right to
consent to any such renewals to the extent required by Section 5.1(b).

 

(e)           The Company shall use
reasonable best efforts to solicit customers and negotiate and enter into new
Contacts with customers on terms substantially similar to, or no less favorable
than, the terms of the Company’s existing

 

48

 

Customer Contracts; provided, that in each
case, Parent shall have the right to consent to any such new contracts to the
extent required by Section 5.1(b).

 

(f)            The Company shall prepare and
deliver to the Parent at least five (5) business days prior to any proposed
Closing Date a preliminary Closing Balance Sheet necessary for the satisfaction
of the closing condition set forth in Section 7.2(h).  The Company shall make its accounting staff
available to Parent to review and discuss the preparation of the preliminary
Closing Balance Sheet.  The Closing
Balance Sheet delivered in connection with the Closing shall be substantially
identical to the preliminary Closing Balance Sheet, other than agreed
adjustments, and shall be subject to the acceptance of Parent, not to be
unreasonably withheld, conditioned or delayed. 
A good faith dispute as to the consistent application of GAAP,
arithmetic calculations or similar grounds shall constitute reasonable basis
for Parent to refuse to accept the Closing Balance Sheet.

 

(g)           The Company may, from time to
time prior to the Closing by written notice to Parent, through the Approved
Representative and the Approved Legal Representative, advise the Parent of any
matter which, if occurring prior to the date hereof, would have been required
to be set forth or described on the Company Disclosure Schedule, or to correct
any inaccuracy or breach in the representations and warranties made by the
Company in this Agreement.  In providing
any such notice, the Company shall provide sufficient detail and background of
the matters disclosed to allow the Parent to make an effective evaluation.  The Company shall make personnel available
and respond to requests from the Company for additional information.  Upon receipt of any such notice, the Parent
may, in its sole discretion, (i) expressly agree in writing that any such
inaccuracy or breach is immaterial, (ii) expressly waive in writing any such
inaccuracy or breach, (iii) reserve judgment with respect to any such
inaccuracy or breach, or (iv) exercise any other rights which may available to
the Parent or the Merger Sub as result of such inaccuracy or breach, including
without limitation, termination of this Agreement pursuant to Section 8.1.  In the absence of a writing from the Parent
pursuant to clauses (i) and (ii) in the preceding sentence, no such notice
shall be deemed to cure the representations and warranties to which such
matters relate with respect to satisfaction of the conditions set forth in
Section 7.2(a) or in 8.1(f) or otherwise affect any other term or condition
contained in this Agreement.

 

Section 5.2             No
Solicitation.

 

(a)           The Company agrees that it
shall immediately cease and cause to be terminated all existing discussions,
negotiations and communications with any third parties with respect to any
Acquisition Proposal.  After the date
hereof and prior to the Effective Time or the earlier termination of this
Agreement pursuant to Section 8.1, the Company shall not, and shall not authorize
or permit any Company Subsidiary or any of their respective officers,
Directors, employees, investment bankers, attorneys, accountants or other
advisors or agents (collectively, “Representatives”) to, directly or
indirectly (i) initiate, solicit or encourage (including, without limitation,
by way of

 

49

 

furnishing information), or take any action
to facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, (ii) enter into or
participate in negotiations or discussions with, or provide any information or
data to, any Person (other than Parent, the Merger Sub or any of their
respective affiliates or representatives) relating to any Acquisition Proposal,
(iii) make or authorize any statement, recommendation or solicitation in
support of, or approve, any Acquisition Proposal, (iv) enter into any letter of
intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition Proposal or transaction
contemplated thereby, or (v) grant any waiver or release under any standstill
or similar agreement with respect to any equity securities of the Company or
any of the Company Subsidiaries.  Any violation
of the foregoing restrictions by any of the Company’s Representatives shall be
deemed to be a breach of this Agreement by the Company, whether or not such
Representative is so authorized and whether or not such Representative is
purporting to act on behalf of the Company. 
“Acquisition Proposal” means any inquiry, proposal or offer from
any Person relating to, or that would reasonably be expected to lead to, (i)
any direct or indirect acquisition or purchase, in one transaction or a series
of transactions, of assets or businesses that constitute ten percent (10%) or
more of the revenues or the assets of the Company and the Company Subsidiaries,
taken as a whole, or ten percent (10%) or more of any class of equity
securities of the Company or the Company Subsidiaries, (ii) any tender offer or
exchange offer that if consummated would result in any Person, together with
Affiliates thereof, beneficially owning ten percent (10%) or more of any class
of equity securities of the Company or any of the Company Subsidiaries, or
(iii) any merger, consolidation, business combination, recapitalization,
liquidation, dissolution, joint venture, binding share exchange or similar
transaction involving the Company or any of the Company Subsidiaries pursuant
to which any Person together with Affiliates thereof, would own ten percent
(10%) or more of any class of equity securities of the Company or any of the
Company Subsidiaries or of any resulting parent company of the Company, other
than the transactions contemplated by this Agreement.

 

(b)           The Company shall promptly
(within 24 hours) notify Parent and the Merger Sub orally and in writing if any
proposals are received by, any information is requested from, or any
negotiations or discussions are sought to be initiated or continued with the
Company or any of its Representatives, in each case in connection with any
Acquisition Proposal or the possibility or consideration of making an
Acquisition Proposal indicating, in connection with such notice, the name of
the third party making such Acquisition Proposal and the material terms and
conditions of any proposals or offers. 
The Company agrees that it shall keep Parent and the Merger Sub
informed, on a current basis, of the status and terms of any Acquisition
Proposal.  The Company shall provide
Parent with forty-eight (48) hours prior notice (or such lesser prior notice as
is provided to the members of the Company Board of Directors) of any meeting of
the Company Board of Directors at which its Board of Directors is reasonably expected
to discuss or consider any Acquisition Proposal.

 

50

 

(c)                                  Notwithstanding the foregoing, at
any time prior to obtaining the Company Stockholder Approval, in response to a
bona fide written Acquisition Proposal that the Company Board of Directors
determinates in good faith after consultation with outside counsel and Thomas
Weisel Partners or another financial advisor of nationally recognized
reputation constitutes or is reasonably likely to lead to a Superior Proposal,
the Company may furnish information concerning its business, properties or
assets to any Person pursuant to an executed confidentiality agreement with
terms (i) no less favorable to the Company than those contained in the
Confidentiality Agreement, (ii) which shall not include any provision calling
for any exclusive right to negotiate with such party and which (iii) shall not
have the effect of prohibiting the Company from satisfying its obligations
hereunder, and may negotiate and participate in discussions and negotiations
with such Person concerning an Acquisition Proposal if, but only if, (x) such
entity or group has on an unsolicited basis, and in the absence of any
violation of this Section 5.2 by the Company or any of its Representatives,
submitted a bona fide written Acquisition Proposal to the Company, and (y) the
Company Board of Directors shall have concluded in its good faith judgment,
only after consultation with independent outside legal counsel to the Company,
that the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Company Board of Directors to
violate its fiduciary duties to the Company’s stockholders under applicable
law.  The Company shall promptly provide
to Parent any material non-public information regarding the Company provided to
any other party which was not previously provided to Parent, such additional
information to be provided no later than the date of provision of such
information to such other party.  “Superior
Proposal” means any Acquisition Proposal that is not conditioned upon the
ability to obtain financing (A) which is for all or substantially all of the
assets of the Company or a majority of the total outstanding voting securities
of the Company and as a result of which the stockholders of the Company
immediately preceding such transaction would hold less than fifty percent (50%)
of the equity interests in the surviving or resulting entity of such
transaction or any direct or indirect parent or Subsidiary thereof, and (B) in
relation to which such entity or group has, on an unsolicited basis and in the absence
of any violation of Section 5.2 by the Company or its Representatives,
submitted a bona fide written proposal to the Company relating to such
transaction and which the Company Board of Directors determines in its good
faith judgment, after consultation with its independent outside legal counsel
and Thomas Weisel Partners or another nationally recognized investment banking
firm, is (i) superior to the Company’s stockholders from a financial point of
view than the Merger (taking into account all of the terms and conditions of
such proposal and this Agreement (including any changes to the financial terms
of this Agreement proposed by Parent in response to such offer or otherwise))
and relevant legal, financial and regulatory aspects of the proposal, the identity
of the third party making such proposal and the conditions for completion of
such proposal, and (ii) reasonably capable of being consummated.

 

(d)                                 Unless this Agreement shall be
terminated in accordance with its terms, neither the Company Board of Directors
nor any committee thereof shall (i) (A) withdraw (or modify in a manner adverse
to Parent), or publicly propose to

 

51

 

withdraw (or modify in a manner
adverse to Parent), the approval, recommendation or declaration of advisability
by such Board of Directors or any such committee thereof of this Agreement, the
Merger or the other transactions contemplated by this Agreement or (B)
recommend, adopt or approve, or propose publicly to recommend, adopt or
approve, any Acquisition Proposal or (ii) approve or recommend, or propose to
approve or recommend, or allow the Company or any of the Company Subsidiaries
to execute or enter into, any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement, option
agreement, joint venture agreement, partnership agreement or other similar
agreement constituting or related to, or that is intended to or would
reasonably be expected to lead to, any Acquisition Proposal (other than a
confidentiality agreement referred to in Section 5.2).  Notwithstanding the foregoing, in response to
the receipt of a Superior Proposal, the Company Board of Directors may
withhold, withdraw, amend or modify its recommendation in favor of the Merger,
and, in the case of a Superior Proposal that is a tender or exchange offer made
directly to its stockholders, may recommend that its stockholders accept the
tender or exchange offer (any of the foregoing actions, whether by the Company
Board of Directors or a committee thereof, a “Change of Recommendation”),
if all of the following conditions in clauses (i) through (iv) are met:

 

(i)                                     A Superior Proposal with respect to
the Company has been made and has not been withdrawn;

 

(ii)                                  The Company Stockholders’ Meeting
has not occurred;

 

(iii)                               The Company shall have (A) delivered
to Parent written notice (a “Change of Recommendation Notice”) at least
four (4) business days prior to publicly effecting such Change of
Recommendation, which notice shall state expressly (1) that it has received a
Superior Proposal, (2) the material terms and conditions of the Superior
Proposal and the identity of the Person or group making the Superior Proposal,
and (3) that it intends to effect a Change of Recommendation and the manner in
which it intends (or may intend) to do so, (B) provided to Parent a copy of all
written materials delivered to the Person or group making the Superior Proposal
in connection with such Superior Proposal, and (C) made available to Parent all
materials and information made available to the Person or group making the
Superior Proposal in connection with such Superior Proposal, together with a
complete list identifying all such materials and information furnished to such
Person or group; and

 

(iv)                              The Company Board of Directors has
concluded in good faith, after receipt of advice of its outside independent
legal counsel, that, in light of such Superior Proposal, the failure of the
Company Board of Directors to effect a Change of Recommendation

 

52

 

would
result in a violation of its fiduciary obligations to its stockholders under
applicable law.

 

After delivering the Change of Recommendation
Notice, the Company shall provide Parent a reasonable opportunity (not to
exceed four (4) business days) to make such adjustments in the terms and
conditions of this Agreement, and negotiate in good faith with respect thereto,
as would enable the Company to proceed with its recommendation to stockholders
without making a Change of Recommendation.

 

(e)                                  Notwithstanding the foregoing,
nothing contained in this Section 5.2 or any other provision hereof shall
prohibit the Company or the Company Board of Directors from taking and
disclosing to the Company’s stockholders a position contemplated by Rule 14d-9
and Rule 14e-2(a) or Item 1012(a) of Regulation M-A promulgated under the
Exchange Act (or any similar communication to stockholders in connection with
the making or amendment of a tender offer or exchange offer) or from making any
legally required disclosure to stockholders; provided, however,
that the Company Board of Directors shall not in any case make a Change of
Recommendation except in accordance with Section 5.2(c).

 

(f)                                    Notwithstanding
anything to the contrary contained in this Agreement, unless this Agreement
shall be terminated in accordance with its terms, the Company shall be
obligated to call, give notice of, convene and hold the Company Stockholders’
Meeting, regardless of the commencement, disclosure, announcement or submission
to it of any Acquisition Proposal, or of any Change of Recommendation.

 

ARTICLE
VI

 

ADDITIONAL AGREEMENTS

 

Section 6.1                                      Proxy Statement.  As
promptly as practicable after the execution of this Agreement, the Company will
prepare and file with the SEC the preliminary Proxy Statement relating
to the approval of this Agreement and the Merger by the stockholders of the
Company.  Parent and the Company will provide each
other with any information which may be required in order to effectuate the
preparation and filing of the preliminary Proxy Statement.  The Company shall cooperate and provide
Parent (and its counsel) with a reasonable opportunity to review and comment on
the preliminary Proxy Statement, any amendment or supplement to the Proxy
Statement prior to filing such with the SEC, and will provide Parent with a
copy of all such filings made with the SEC. 
The Company will notify Parent upon the receipt of any comments
from the SEC or its staff in connection with the filing of, or amendments or
supplements to, the preliminary Proxy Statement.  The Company shall cooperate and provide
Parent and the Merger Sub (and its counsel) with a reasonable opportunity to
review and comment on any amendment or supplement to the Proxy Statement prior
to filing such statement with the SEC, and will provide Parent and the Merger
Sub with a copy of all such filings made

 

53

 

with the SEC.  As promptly as
practicable after comments are received from the SEC thereon and after the
furnishing by the Company and Parent of all information required to be
contained therein, the Company shall file with the SEC a revised Proxy
Statement and will use all reasonable bests efforts to have it cleared by the
SEC as soon thereafter as practicable.  The Company will cause the
Proxy Statement to be mailed to its stockholders as soon as practicable after
it is cleared by the SEC.

 

Section 6.2                                      Meeting
of Stockholders of the Company.

 

(a)                                  Promptly
after the Proxy Statement is cleared by the SEC, the Company will convene a
meeting of the Company’s stockholders to vote on this Agreement and the Merger
(the “Company Stockholders’ Meeting”) to be held as promptly as
practicable after the Proxy Statement is cleared by the SEC.  The Company will use reasonable best efforts
to solicit from its stockholders proxies in favor of the approval of this
Agreement and the Merger, and will take all other action necessary or advisable
to secure the vote or consent of its stockholders required by the rules of the
Nasdaq and the DGCL.  Notwithstanding
anything to the contrary contained in this Agreement, the Company may adjourn
or postpone the Company Stockholders’ Meeting if as of the time for which the
Company Stockholders’ Meeting is originally scheduled (as set forth in the
Proxy Statement) there are insufficient shares of Common Stock represented
(either in Person or by proxy) to constitute a quorum necessary to conduct the
business of the Company Stockholders’ Meeting. 
The Company shall call, notice and convene the Company Stockholders’
Meeting, and all proxies solicited by it in connection with the Company
Stockholders’ Meeting shall be solicited in compliance with the DGCL, its
Certificate of Incorporation and Bylaws, Nasdaq rules and all other applicable
law.

 

(b)                                 Except
to the extent expressly permitted by Section 5.2(c): (i) the Proxy
Statement shall include a statement to the effect that the Company Board of
Directors has unanimously recommended that the Company’s stockholders vote in
favor of approval and adoption of this Agreement and the Merger at the Company
Stockholders’ Meeting, (ii) the Company Board of Directors shall
unanimously recommend that the Company’s stockholders vote in favor of the
approval of this Agreement and the Merger at the Company Stockholders’ Meeting,
and (iii) neither the Company Board of Directors nor any committee thereof
shall withdraw, amend or modify, or propose or resolve to withdraw, amend or
modify in a manner adverse to Parent, the recommendation of the Company Board
of Directors that the Company’s stockholders vote in favor of the approval of
this Agreement and the Merger.

 

(c)                                  Once
the Company Stockholders’ Meeting has been called and noticed, the Company
shall not postpone or adjourn the Company Stockholders’ Meeting (other than for
the absence of a quorum) without the consent of Parent.  Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 6.2(c) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
Acquisition

 

54

 

Proposal or interest in an Acquisition Proposal or any Change of
Recommendation.  Notwithstanding any Change
of Recommendation, this Agreement and the Merger shall be submitted to the
stockholders of the Company at the Company’s Stockholders’ Meeting for the
purpose of approving the Agreement and the Merger and nothing contained herein
shall be deemed to relieve the Company of such obligation.

 

Section 6.3                                      Notification of Certain Matters.  The Company shall give prompt notice to
Parent, and the Merger Sub and Parent and the Merger Sub shall give prompt
notice to the Company, of (a) the occurrence or non-occurrence of any event
whose occurrence or non-occurrence, as the case may be, would be likely to
cause either (i) any representation or warranty contained in this Agreement to
be untrue or inaccurate or (ii) any condition set forth in Article VII to be
unsatisfied at any time from the date hereof to the Effective Date (except to
the extent it refers to a specific date) and (b) any failure of the Company,
the Merger Sub or Parent, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice
pursuant to this Section 6.3 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice or the representations
or warranties of the parties or the conditions to the obligations of the
parties hereto.

 

Section 6.4                                      Access;
Confidentiality.

 

(a)                                  From the date hereof until the
Effective Time, upon reasonable notice, the Company shall (and shall cause each
of the Company Subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives and agents of Parent and the Merger Sub
reasonable access, at reasonable times, to (i) all of the properties, books, analyses,
projections, plans, systems, contracts, commitments, records, notices,
personnel offices and other facilities of the Company and the Company
Subsidiaries, (ii) the appropriate individuals (including management,
personnel, attorneys, accountants and other professionals) for discussion of
the business, properties, prospects and personnel of the Company and the
Company Subsidiaries as Parent may reasonably request, and (iii) customers of
the Company as mutually agreed.  Notwithstanding the foregoing, any such
investigation or consultation shall be conducted in such a manner as not to
interfere with the business or operations of the Company or any Company
Subsidiaries.  During such period, the
Company shall (and shall cause each of the Company Subsidiaries to), subject to
any limitations imposed by law with respect to records of employees, furnish
promptly to Parent and the Merger Sub (x) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws, (y) a copy of
all material correspondence with any U.S. federal or foreign Governmental
Entity and (z) all other information concerning its business, properties and
personnel as Parent or the Merger Sub may reasonably request.  No investigation pursuant to this Section 6.4
or information shall affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the
parties to consummate the Merger. 
The parties will hold any information which is non-public in
confidence in accordance with

 

55

 

the terms of the Confidentiality Agreement, dated as of March 5, 2003,
between the Company and Parent (the “Confidentiality Agreement”) and, in
the event this Agreement is terminated for any reason, the parties shall
promptly return or destroy such information in accordance with the
Confidentiality Agreement.

 

(b)                                 From the date hereof until the
Effective Time, (i) upon reasonable notice, the Company shall
(and shall cause each of the Company Subsidiaries to) afford to the officers,
employees, counsel and other representatives and agents of Parent and the
Merger Sub reasonable access to Employees for purposes of communicating to
Employees the terms and conditions of employment that may apply after the
Closing; and (ii) without the written consent of Parent, neither the Company
nor any Company Subsidiary shall make (and the Company shall not permit any
other Person to make) any promises or commitments to any Employee with regard
to his or her employment status with Parent or its affiliates after the Closing
or the terms or conditions upon which such employment might occur or be
continued.  To the extent not
precluded by any law, rule, regulation, ordinance, judgment, decree, order or
writ of any Governmental Entity applicable to the Company (or a Company
Subsidiary, as applicable), the Company (or Company Subsidiary, as applicable)
shall subject, on or before March 15, 2005, each Employee that is not an Inactive
Employee to Parent’s policies and procedures for employment screening set forth
on Exhibit C, and the Company (or Company Subsidiary, as applicable)
shall subject each Inactive Employee to such policies and procedures for
employment screening immediately prior to such Inactive Employee returning to
work.  For
purposes of this Section 6.4(b), “Employee” shall mean each officer or
employee of the Company or any Company Subsidiary (including Inactive
Employees) and “Inactive Employee” shall mean any Employee who is not
actively at work due to an approved medical, family, military or personal leave
under the policies of the Company or any Company Subsidiary, including any
Employee who is receiving long-term disability benefits.

 

Section 6.5                                      Publicity.  The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to Parent
and the Company.  Thereafter, so long as
this Agreement is in effect, neither the Company nor Parent, nor any of their
respective affiliates, shall issue or cause the publication of any press
release or other announcement with respect to the Merger or this Agreement
without prior written consent of each of the other parties to this Agreement,
such consent not to be unreasonably withheld, conditioned, or delayed, except
as such party determines may be required by law or by any listing agreement
with or listing rules of a national securities exchange or trading market or by
the listing rules of The New York Stock Exchange or Nasdaq, in which case, the
party proposing to issue such press release or make such public announcement
shall use all reasonable efforts to consult in good faith with the other party
before issuing such press release or making such public announcements.

 

56

 

Section 6.6                                      Indemnification;
Directors’ and Officers’ Insurance.

 

(a)                                  Without limiting any additional
rights that any Indemnified Parties (as defined below) may have under any
employment agreement, indemnification agreement or Benefit Plan, Parent and
Merger Sub agree that (i) the Certificate of Incorporation or the Bylaws of the
Surviving Corporation and the Company’s Subsidiaries immediately after the
Effective Time shall contain provisions with respect to indemnification and
exculpation from liability that are at least as favorable to the beneficiaries
of such provisions as those provisions that are set forth in the Certificate of
Incorporation and Bylaws of the Company and its Subsidiaries, respectively, on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six (6) years following the Effective Time
in any manner that would adversely affect the rights thereunder of persons who
on or prior to the Effective Time were Directors, officers, employees or agents
of the Company or any of its Subsidiaries (collectively, the “Indemnified
Parties”), unless such modification is required by applicable law and (ii)
all rights to indemnification as provided in any indemnification agreement with
any current or former Directors, officers, employees, or agents of the Company
or any Company Subsidiaries as in effect as of the date hereof with respect to
matters occurring at or prior to the Effective Time shall survive the merger
and thereafter terminate as provided in such agreements.  The indemnity provided by this Section 6.6(a)
will operate in conjunction with the Prior Acts Coverage being arranged as per
Section 6.6(b) recognizing that any claim covered by the Prior Acts Coverage
must be paid by the insurer before any payment of the Parent or the Surviving
Corporation; provided, however, that an Indemnified Party’s
expenses shall be advanced to the maximum extent provided by the Company’s or a
Company Subsidiary’s Certificate of Incorporation or Bylaws or respective
indemnification agreements (each such indemnification agreement being set forth
on Section 6.6(a) of the Company Disclosure Schedule).  The Company represents and warrants that no
Indemnified Party acts as an officer or director of any Person other than the
Company or a Company Subsidiary following a request, or at the direction, of
the Company.

 

(b)                                 At the expense of the Company,
Parent or the Surviving Corporation and the Company will use its reasonable
best efforts to maintain the Company’s existing Errors and Omissions,
Employment Practices Liability, Employed Lawyers Professional Liability, and
D&O Insurances (the “Prior Acts Coverage”) for a period of not less
than six (6) years after the Effective Time; provided, however,
that Parent may substitute or cause to be substituted therefor policies of
substantially equivalent coverage and amounts containing terms no less
favorable to the Company or such Directors or officers; provided, further,
that if the existing Prior Acts Coverage expires or is terminated or cancelled
during such period, then Parent or the Surviving Corporation shall use all
reasonable best efforts to obtain substantially similar Prior Acts Coverage; provided
further, however, that in no event shall Parent be required to
pay premiums for insurance under this Section 6.6(b) in excess of two hundred
percent (200%) of the annual premium currently paid by the Company for such
coverage (which the Company represents and warrants to be not more than $400,000);
and provided,

 

57

 

further,
that if Parent or the Surviving Corporation is unable to obtain the amount of
insurance required by this Section 6.6(b) for such premium, Parent or the
Surviving Corporation shall obtain as much insurance as can be obtained for an
annual premium not in excess of two hundred percent (200%) of such current
premium.

 

(c)                                  This Section 6.6 is intended to be
for the benefit of, and shall be enforceable by, each of the Indemnified Parties
and their respective heirs and legal representatives.  The indemnification provided for herein shall
not be deemed exclusive of any other rights to which an Indemnified Party is
entitled, whether pursuant to law, contract or otherwise.

 

(d)                                 In the event the Surviving
Corporation or any of its respective successors or assigns (i) consolidates
with or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person as a condition
precedent to any such transaction, all necessary provisions and all necessary
provisions shall be made so that the successors and assigns of the Surviving
Corporation fully assumes all of the obligations set forth in this Section 6.6.

 

Section 6.7                                      Reasonable
Best Efforts.

 

(a)                                  Prior to the Closing, upon the terms
and subject to the conditions of this Agreement, the parties agree to use their
respective reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things reasonably necessary and appropriate, under applicable
laws to consummate and make effective the Merger and the Transactions as
promptly as practicable including, but not limited to (i) the preparation and
filing of all forms, registrations and notices required to be filed to
consummate the Merger and the Transactions and the taking of such actions as
are necessary to obtain all requisite approvals, consents, authorizations,
orders, exemptions or waivers by any third party or Governmental Entity, and
(ii) the satisfaction of applicable conditions to Closing.  In addition, no party hereto shall take any
action after the date hereof that would reasonably be expected to delay the
obtaining of, or result in not obtaining, any permission, approval or consent
from any Governmental Entity necessary to be obtained prior to Closing.

 

(b)                                 Parent and the Company shall, within
ten (10) business days after the execution and delivery of this Agreement, use
reasonable best efforts to (i) file with the Federal Trade Commission and the
Department of Justice the notification required to be filed with respect to the
transactions provided in this Agreement under the HSR Act (and request early
termination of the waiting period) and (ii) file with the appropriate
Governmental Entities all notifications required under applicable foreign
antitrust or competition laws.  Each of
Parent and the Company shall, in connection therewith, cooperate as necessary
to promptly amend such filings or supply additional

 

58

 

information and documentary
materials as may be requested pursuant to the HSR Act or foreign antitrust or
competition laws.

 

(c)                                  Prior to the Closing, each party
shall provide any necessary information with respect to, and provide the other
(or its counsel) copies of, all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement.  Parent shall keep the Company apprised of the
status of the Banking Regulatory Approvals and each party hereto shall promptly
inform the other of any communication from any Governmental Entity regarding
any other consent, approval, authorization, or filing required for or otherwise
relating to the Merger and the Transactions unless otherwise prohibited by
law.  If any party hereto or affiliate
thereof receives a request for additional information or documentary material
from any such Government Entity with respect to the Merger or the Transactions,
then such party shall endeavor in good faith to make, as soon as reasonably
practicable and after consultation with the other party (to the extent related
to any antitrust consent, approval, authorization or filing), an appropriate
response in compliance with such request. 
To the extent that transfers, amendments or modifications of Company
Permits are required as a result of the execution of this Agreement or
consummation of the Merger and the Transactions, the Company shall use its
commercially reasonable efforts to effect such transfers, amendments or
modifications.

 

(d)                                 Notwithstanding the foregoing, in
connection with the receipt of any necessary approvals under the HSR Act, any
applicable foreign antitrust or competition law or from the Office of the
Comptroller of the Currency, Parent shall not be required to divest or hold
separate any assets or any portion of any business of Parent, the Company or
their respective Subsidiaries or otherwise take or commit to take any action
that limits Parent’s or the Company’s freedom of action with respect to, any of
the businesses, product lines, properties or assets of the Company or Parent or
which would result in burdensome conditions being imposed on Parent’s or the
Company’s operations.

 

Section 6.8                                      State Takeover Laws.  The Company and its Board of Directors shall
(x) take all reasonable action necessary to ensure that no state takeover statute
or similar statute or regulation is or becomes applicable to this Agreement,
the Merger or any of the other transactions contemplated by this Agreement and
(y) if any state takeover statute or similar statute becomes applicable to this
Agreement, the Merger or any of the other transactions contemplated by this
Agreement, take all reasonable action necessary to ensure that Merger and the
other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on this
Agreement, the Merger and the other transactions contemplated by this
Agreement.

 

Section 6.9                                      Subsequent Financial Statements.  To the extent reasonably practicable, the
Company shall consult with Parent prior to making publicly available its
financial results for any period after the date of this Agreement and prior to

 

59

 

filing any Company SEC
Documents after the date of this Agreement, it being understood that Parent
shall have no liability by reason of such consultation.

 

Section 6.10                                Employee
Matters.

 

(a)                                  From and after the Effective Time,
Parent shall assume and honor or shall cause the Surviving Corporation to
assume and honor, the obligations of the Company and the Company Subsidiaries
under all existing Benefit Plans and the Parent or Surviving Corporation shall
perform the obligations of the Company and the Company Subsidiaries under such
Benefit Plans in the same manner and to the same extent that the Company and
the Company Subsidiaries would have been required to perform thereunder; provided,
however, that nothing herein shall be construed to prevent, on or
following the Effective Time, (i) the termination of employment of any
individual who immediately prior to the Effective Time was an employee of the
Company or any Company Subsidiary (such employees, the “Company Employees”)
or (ii) the amendment or termination of any Benefit Plan to the extent permitted
by the terms thereof and applicable law.

 

(b)                                 Except as otherwise provided in this
Section 6.10, subject to applicable law, Parent shall or shall cause the
Surviving Corporation to (i) provide employee benefits to the Company Employees
effective as of the Effective Time that shall be substantially similar, in the
aggregate, to the employee benefits that Parent and its subsidiaries (other
than the Surviving Corporation and its subsidiaries) provide to similarly
situated employees other than the Company Employees, and (ii) for the period
beginning at the Effective Time (provided the Effective Time occurs on or
before December 31, 2005) and ending no earlier than December 31, 2005, provide
each Company Employee with base pay or wage rates and incentive compensation
opportunities applicable to the Company Employee immediately before the
Effective Time.

 

(c)                                  To the extent that any employee
benefit plan is made available to the Company Employees at or following the
Effective Time, Parent shall, or shall cause one of its subsidiaries to, grant
the Company Employees credit for all service with the Company and its
subsidiaries prior to the Effective Time for purposes of eligibility and
vesting; provided that such service shall (i) be recognized only to the extent
that it would have been recognized under the plans of Parent or its
subsidiaries had it been in service with Parent or its subsidiaries and (ii)
not be recognized for purposes of (x) benefit accruals, grandfathering of
benefit schedules, and/or level of salary credits based on service under the
retirement plans of Parent or its subsidiaries, (y) retirement eligibility
under Parent’s option and stock award plans and arrangements and (z)
eligibility for post-retirement, medical or life insurance.  In addition, and without limiting the
generality of the foregoing: (i) each Company Employee shall be immediately
eligible to participate, without any waiting time, in any and all employee
benefit plans, programs, policies and arrangements sponsored by Parent and its
subsidiaries (such plans, collectively, the “New Plans”) to the extent
coverage under such plan replaces coverage

 

60

 

under a comparable Company Plan
in which such employee participates immediately before or at any time after the
Effective Time (such plans, collectively, the “Old Plans”) and (ii) for
purposes of each New Plan providing medical, dental, pharmaceutical, and/or
vision to any Company Employee, Parent shall cause all pre-existing condition
exclusions and actively-at-work requirements of such New Plan to be waived for
such employee and his or her covered dependents, and Parent shall cause any
eligible expenses incurred by such employee and his or her covered dependents
during the portion of the plan year of the Old Plan ending on the date such
employee’s participation in the corresponding New Plan begins to be taken into
account under such New Plan for purposes of satisfying all deductible, and
maximum out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been
paid in accordance with such New Plan; provided that, to the extent any Company Employee elects coverage under
Parent’s long-term disability insurance policy (the “LTD Policy”)
immediately following the Effective Time, the coverage of such Company Employee
shall be subject to the transfer provision of the LTD Policy, which provides
for no loss or gain in coverage for pre-existing conditions for Company Employees
who were covered by the Company’s long-term disability insurance policy or
program.

 

(d)                                 Parent acknowledges that a “change
of control,” a “change in control” or terms of similar meaning as used in any
Benefit Plan set forth on Section 6.10(d) of the Company Disclosure Schedule
shall occur at the Effective Time.

 

(e)                                  For the period beginning at the
Effective Time (provided the Effective Time occurs on or before December 31,
2005) and ending no earlier than December 31, 2005, Parent shall cause the Surviving
Corporation to maintain the Company’s severance policy for the Company
Employees (other than those Company Employees with an individual agreement
providing for a severance benefit) as in effect immediately prior to the
Effective Time.

 

ARTICLE
VII

 

CONDITIONS

 

Section 7.1                                      Conditions to Each Party’s
Obligations to Effect the Merger.  The respective obligations of each party to
effect the Merger shall be subject to the satisfaction on or prior to the
Closing Date of each of the following conditions, any and all of which may be
waived in whole or in part by Parent, the Merger Sub and the Company, as the
case may be, to the extent permitted by applicable law:

 

(a)                                  This Agreement and the Merger shall
have been duly approved by the requisite vote under applicable law by the
stockholders of the Company.

 

(b)                                 No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation,

 

61

 

executive order, decree,
injunction or other 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.

 

(c)                                  All waiting periods (and any extension
thereof) under the HSR Act and any foreign antitrust or competition laws
relating to the Merger and the transactions contemplated hereby shall have
expired or terminated.  All foreign
antitrust approvals required to be obtained prior to the Merger in connection
with the Merger and the transactions contemplated hereby shall have been
obtained.

 

Section 7.2                                      Additional Conditions to the
Obligations of Parent and Merger Sub.  The obligations of Parent and the Merger Sub
to consummate and effect the Merger shall be subject to the satisfaction at or
prior to the Closing Date of each of the following conditions, any of which may
be waived, in writing, by Parent or the Merger Sub:

 

(a)                                  The representations and warranties
of the Company as set forth in this Agreement that are qualified as to
materiality shall be true and complete in all respects and each such
representation or warranty that is not so qualified shall be true and complete
in all material respects, in each case as of the date hereof and at and as of the
Closing Date (except that those representations and warranties which address
matters only as of a particular date shall have been true and correct only on
such date).  Parent and the Merger Sub
shall have received a certificate with respect to the foregoing, and certifying
that no Company Material Adverse Effect shall have occurred since the date
hereof and be continuing, signed on behalf of the Company by the Chief
Executive Officer of the Company.

 

(b)                                 The Company and the Company
Subsidiaries shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by them at or prior to the Closing Date except to the extent that such
covenants are qualified by terms such as “material” or “Material Adverse
Effect,” in which case the Company and the Company Subsidiaries shall have
performed and complied with all such covenants in all respects prior to the
Closing Date and that the Company and the Company Subsidiaries shall have performed
and complied with all covenants and agreements in Section 2.5(a) in all
respects prior to the Closing Date, and Parent and the Merger Sub shall have
received a certificate to such effect signed on behalf of the Company by the
Chief Executive Officer of the Company.

 

(c)                                  No Company Material Adverse Effect
shall have occurred since the date hereof and be continuing.

 

(d)                                 No litigation shall have commenced
and be continuing or have been threatened in writing that seeks to prevent,
enjoin, alter or delay consummation of the Merger or the other transactions
contemplated under this Agreement, or which

 

62

 

seeks material damages in
connection with the Merger or the other transactions contemplated hereby or which
seeks to limit or prohibit ownership or operation by the Company, the Company
Subsidiaries, Parent or any of its Subsidiaries of any of their respective
businesses or assets.

 

(e)                                  All consents, permits, approvals and
authorizations of, and filings with or notifications to, any Governmental
Entity and any other Person required for the consummation of the Merger and the
other transactions contemplated hereby shall have been obtained or made and be
in effect at the Effective Time.

 

(f)                                    Parent shall have obtained the
Banking Regulatory Approvals and such approvals shall impose no burdensome
conditions on the operations of Parent or the Company from and after the
Effective Time.

 

(g)                                 Parent shall have received from the
Company an opinion from Crowell & Moring, the Company’s outside patent
legal counsel, that the Company’s and the Company Subsidiaries’ products,
services and business do not infringe any patents issued to DE Technologies,
such legal opinion to be in form and substance satisfactory to Parent.

 

(h)                                 The Net Tangible Asset Value of the
Company as shown on the Closing Balance Sheet accepted by Parent pursuant to
Section 5.1(f) shall not be less than $50,000,000.

 

Section 7.3                                      Additional Conditions to the
Obligations of the Company. 
The obligations of the Company to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, by Company:

 

(a)                                  The representations and warranties
of Parent and the Merger Sub contained in this Agreement shall be true and
correct in all material respects on the date hereof and as of the Closing Date
with the same force and effect as if made on the Closing Date (except that
those representations and warranties which address matters only as of a
particular date shall have been true and correct only on such date).  The Company shall have received a certificate
with respect to the foregoing, with respect to the representations and
warranties of Parent, signed by an authorized officer of Parent and a
certificate with respect to the foregoing, with respect to the representations
and warranties of the Merger Sub, signed by an authorized officer of the Merger
Sub.

 

(b)                                 Parent and the Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it at
or prior to the Closing Date except to the extent that such covenants are
qualified by terms such as “material” or “Material Adverse Effect,” in which
case the Parent and the Merger Sub shall have performed and complied with all
such covenants in all respects prior to the Closing Date, and the

 

63

 

Company shall have received a
certificate with respect to the foregoing signed on behalf of Parent, with
respect to the covenants of Parent, by an authorized officer of Parent and a
certificate with respect to the foregoing signed on behalf of the Merger Sub,
with respect to the covenants of the Merger Sub, by an authorized officer of
the Merger Sub.

 

ARTICLE
VIII

 

TERMINATION

 

Section 8.1                                      Termination.  This Agreement may be terminated and the
Merger abandoned at any time before the Effective Time, and except as provided
below, whether before or after the receipt of the Company Stockholder Approval
or the holding of the Company shareholders’ meeting:

 

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

 

(b)                                 by either Parent or the Company if
any Governmental Entity of competent jurisdiction shall have issued an order,
decree or ruling or taken any other non-appealable final action, in each case
permanently restraining, enjoining or otherwise prohibiting the Merger or the
Transactions;

 

(c)                                  by either Parent or the Company if
the Merger has not been consummated by July 1, 2005; provided,  however,
that the right to terminate this Agreement pursuant to this Section 8.1(c)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Merger to be consummated by such date;

 

(d)                                 by either Parent or the Company if
the Company Stockholder Approval shall not have been obtained by reason of the
failure to obtain the required vote at the Company Stockholders’ Meeting; provided,
however, that the right to terminate this Agreement under this Section
8.1(d) shall not be available to the Company where the failure to obtain the
Company’s Stockholder Approval shall have been caused by the action or failure
to act of the Company, and such action or failure to act constitutes a material
breach by the Company of this Agreement;

 

(e)                                  by Parent (at any time prior to the
receipt of the Company Stockholder Approval) if (i) the Company Board of
Directors or any committee thereof shall for any reason have withdrawn or shall
have amended or modified in a manner adverse to Parent its recommendation in
favor of, the approval of this Agreement and the Merger, (ii) the Company shall
have failed to include in the Proxy Statement the recommendation of its Board
of Directors in favor of the approval of the Agreement and the approval of the
Merger, (iii) the Company Board of Directors fails to reaffirm (publicly, if so
requested) its recommendation in favor of approval of the Agreement and the
Merger within ten (10) business days after the other party hereto requests in
writing that such recommendation be reaffirmed following the public
announcement of any

 

64

 

Acquisition Proposal, (iv) the
Company Board of Directors or any committee thereof shall have approved or
recommended any Acquisition Proposal, (v) a tender or exchange offer relating
to its securities shall have been commenced by a Person unaffiliated with
Parent and the Company shall not have sent or given to its security holders
pursuant to Rule 14e-2 promulgated under the Exchange Act, within ten (10)
business days after such tender or exchange offer is first published, a
statement disclosing that the Company Board of Directors recommends rejection
of such tender or exchange offer, (vi) the Company shall have violated or
breached any of its obligations under Section 5.2,  (vii) any Person or group other than Parent, the Merger Sub
or an arbitrageur shall have become the beneficial owner of more than twenty
percent (20%) of the Common Stock (either on a primary or a fully-diluted
basis), or (viii) the Company shall have delivered a Change of Recommendation
Notice;

 

(f)                                    by Parent, (i) in the event the
representations and warranties of the Company as set forth in this Agreement
that are qualified as to materiality shall not be true and complete in all
respects, (ii) in the event the representations or warranties of the Company as
set forth in this Agreement that are not so qualified as to materiality are not
true and complete in all material respects, in the case of (i) and (ii) as of
the date hereof and at and as of any date prior to the Closing Date (except
that those representations and warranties which address matters only as of a
particular date shall have been true and correct only as of such date), or
(iii) upon a material breach of any covenant or agreement on the part of the
Company set forth in this Agreement, and, in any of the foregoing events the
breach of any representation, warranty, covenant or agreement is not cured or,
by its nature can not be cured, within thirty (30) days following written
notice from the Parent of such breach; provided, that Parent shall not have the
right to terminate this Agreement pursuant to this Section 8.1(f) if Parent or
Merger Sub is then in material breach of any of its representations,
warranties, or covenants such that the Company would have a right to terminate
this Agreement pursuant to Section 8.1(g);

 

(g)                                 by the Company, (i) in the event the
representations and warranties of Parent or the Merger Sub as set forth in this
Agreement that are qualified as to materiality shall not be true and complete
in all respects, (ii) in the event the representations or warranties of Parent
or the Merger Sub as set forth in this Agreement that are not so qualified as
to materiality are not true and complete in all material respects, in the case
of (i) and (ii) as of the date hereof and at and as of any date prior to the
Closing Date (except that those representations and warranties which address
matters only as of a particular date shall have been true and correct only as
of such date), or (iii) upon a material breach of any covenant or agreement on
the part of Parent or the Merger Sub set forth in this Agreement, and, in any
of the foregoing events the breach of any representation, warranty, covenant or
agreement is not cured or, by its nature cannot be cured, within thirty (30)
days following written notice from the Company of such breach; provided, that
the Company shall not have the right to terminate this Agreement pursuant to
this Section 8.1(g) if Company is then in material breach of any of its
representations,

 

65

 

warranties, or covenants such
that the Parent would have the right to terminate this Agreement pursuant to
Section 8.1(f); or

 

(h)                                 by the Company, if, prior to the
approval of this Agreement and the Merger by the required vote of the
stockholders of the Company, the Company Board of Directors has provided
written notice to Parent that the Company intends to enter into a binding
written agreement for a Superior Proposal (with such termination becoming
effective only upon the Company entering into such binding written agreement); provided,
however, that (i) the Company shall have complied with Section 5.2 in
all material respects; (ii) the Company shall have delivered to Parent a Change
of Recommendation Notice with respect to such Superior Proposal and such Change
of Recommendation Notice complies with the requirements of Section 5.2; (iii)
Parent does not make, within four (4) business days after receipt of the
Company’s written notice pursuant to this Section 8.1(h), an offer that the
Company Board of Directors shall have reasonably concluded in good faith
(following consultation with its financial advisor and independent outside
counsel) is at least as favorable to the stockholders of the Company from a
financial point of view as such Superior Proposal; (iv) the Company Board of
Directors shall have received an opinion from Thomas Weisel Partners or another
investment banking firm of national reputation to the effect that the
consideration to be provided to the stockholders of the Company by such
Superior Proposal is superior from a financial point of view to that provided
by the Merger Consideration; and (v) the Company pays the Termination Fee in
accordance with Section 8.2(b) concurrently with entering into such binding
written agreement.

 

Section 8.2                                      Effect
of Termination; Termination Fees.

 

(a)                                  In the event of the termination of
this Agreement as provided in Section 8.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become null and void and there shall be no liability on the part of
Parent, the Merger Sub or the Company, except (i) as set forth in the last
sentence of Section 6.4(a), (ii) this Section 8.2 and (iii) Article IX;
provided, however, that the termination of this Agreement shall not relieve any
party from liability for any breach of this Agreement.

 

(b)

 

(i)                                     If this Agreement is terminated by
Parent or the Company, as applicable, pursuant to Sections 8.1(e) or (h) or
pursuant to Section 8.1(f) and the breach of the representation, warranty or
covenant that gave rise to such termination right caused, or was reasonably
likely to cause a Company Material Adverse Effect, the Company shall promptly,
but in no event later than (x) two (2) business days after the date of such
termination in the case of a termination by Parent and (y) in accordance with
the last sentence of Section 8.1(h) in the case of a

 

66

 

termination
by Company under such Section, pay Parent a fee equal to $5,000,000 (“Termination
Fee”) in accordance with Section 8.2.

 

(ii)                                  If this Agreement is terminated by
Parent or the Company, as applicable, pursuant to Sections 8.1(c) or 8.1(d) and
the failure for the Merger to be consummate or to obtain the Company
Stockholder Approval was not the result of the failure to obtain the Banking
Regulatory Approvals or any other required approvals or consents of a
Governmental Entity required to be obtained by Parent and the Merger Sub, the
Company shall pay the Termination Fee if, following the date hereof and prior
to the termination of this Agreement, there has been public disclosure of an
Acquisition Proposal with respect to the Company and within twelve (12) months
following the termination of this Agreement the Company enters into an
agreement providing for an acquisition of the Company.  Such payment shall be made concurrently with
entering into such agreement, and in accordance with Section 8.2(c).

 

(c)                                  Payments. 
All amounts payable under Section 8.2(b) shall be paid in immediately
available funds by wire transfer to such account as Parent may designate in
writing to the Company.

 

ARTICLE
IX

 

MISCELLANEOUS

 

Section 9.1                                      Amendment and Modification.  Subject to applicable law and as otherwise
provided in the Agreement, this Agreement may be amended, modified and
supplemented in any and all respects, whether before or after any vote of the
stockholders of the Company contemplated hereby, by written agreement of the
parties hereto, but, after adoption and the approval of this Agreement by the
Company’s stockholders, no amendment shall be made which by law requires
further approval by such stockholders without obtaining such further
approval.  This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.  At any time prior to the
Effective Time, any party hereto may (i) extend the time for the performance of
any of the obligations or other acts of the other parties required hereunder,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) subject to the
requirements of applicable law and compliance with the provision in the prior
sentence, waive compliance with any of the agreements or conditions contained
herein.  Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.

 

Section 9.2                                      Non-survival of Representations and
Warranties.  The representations
and warranties of the Company, Parent and the Merger Sub contained in

 

67

 

this Agreement shall terminate
at the Effective Time, and only the covenants that by their terms survive the
Effective Time shall survive consummation of the Merger.

 

Section 9.3                                      Expenses.  Except as expressly set forth in Section
8.2(b), all fees, costs and expenses incurred in connection with this Agreement
and the Merger shall be paid by the party incurring such fees, costs and
expenses.

 

Section 9.4                                      Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, facsimiled (which is confirmed) or sent by a nationally recognized
overnight courier service (providing proof of delivery), to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

 

(a)                                  if to Parent or the Merger Sub, to:

 

JP Morgan Chase Bank, National Association

10420 Highland Mn Drive, Bl 2, 4th
Fl

Tampa, FL 33610

Attention: Tod R. Burwell, Vice President

Telephone No.: (813) 432-5281

Facsimile No.: (813) 432-5173

 

with copies to:

 

JP Morgan Chase Bank, National Association

Legal Department

1 Chase Manhattan Plaza, 25th Fl

New York, NY 10081

Attention: Richard M. Gottlieb, Senior Vice
President

Telephone No.: (212) 552-1401

Facsimile No.: (212) 383-0249

 

and

 

Skadden, Arps, Slate, Meagher & Flom LLP

1440 New York Avenue, N.W.

Washington, DC  20005

Attention: 
Marcia R. Nirenstein

Telephone No.:  (202) 371-7000

Facsimile No.:  (202) 393-5760

 

and

 

68

 

(b)                                 if to the Company, to:

 

Vastera, Inc.

45025 Aviation Drive, Suite 300

Dulles, VA 
20166

Attention: 
Brian D. Henderson, Chief Counsel

Telephone No.:  (703) 661-9006, ext. 2207

Facsimile No.:  (703) 742-4534

 

with a copy to:

 

DLA Piper Rudnick Gray Cary

6225 Smith Avenue

Baltimore, MD 
21209

Attention: 
Richard C. Tilghman, Jr.

Telephone No.:  (410) 580-4274

Facsimile
No.:  (410) 580-3274

 

Section 9.5                                      Definitions;
Interpretations.

 

(a)                                  For purposes of this Agreement the
following terms have the meanings ascribed to them below.

 

(i)                                     “Affiliate” shall have the
meaning set forth in Rule 12b-2 of the Exchange Act.

 

(ii)                                  “Banking Regulatory Approvals”
means the regulatory consent and approval of the Merger by the
Office of the Comptroller of the Currency and the Board of Governors of the
Federal Reserve System and any other consents or approvals required by any
comparable foreign regulatory agencies.

 

(iii)                               “Closing Balance Sheet” means
an estimated consolidated balance sheet of the Company prepared in good faith
by the Company as of the Closing Date in accordance with GAAP applied on a
consistent basis with the Financial Statements.

 

(iv)                              “Company Material Adverse Effect”
means any event, circumstance, change or effect that has had, or is reasonably
likely to have, a material adverse effect on (x) the business, assets,
properties, liabilities, condition (financial or otherwise), results of
operations or prospects of the Company and the Company Subsidiaries, taken as a
whole, including the fact that (other than any change or effect resulting from
(i) changes in general international, national or regional economic or
financials conditions or (ii) general changes or developments

 

69

 

in the
industries in which the Company and the Company Subsidiaries operate, except
where such changes or effects described in clause (i) or (ii) have a
disproportionate effect on the Company and the Company Subsidiaries), or (y)
the ability of the Company to consummate the Merger and the other transactions
contemplated hereby in a timely manner; it being agreed that if (A) customers
of the Company and the Company Subsidiaries that in the aggregate accounted for
more than $5,000,000 of the Company’s consolidated revenue in 2004 have
indicated that they will discontinue, (B) any of the customers of the Company
set forth on Section 9.5(a)(iv) of the Company Disclosure Schedule has failed
to affirmatively agree in a discussion with representatives of Parent that they
will continue, to conduct business with the Company on substantially similar
terms as presently conducted following the consummation of the Transactions or
(C) a Government Entity commences a formal investigation against the Company
(other than a routine audit by a taxing authority), such will constitute a
Company Material Adverse Effect.

 

(v)                                 “Data Room” means the
documents and materials related to the Company and the Company Subsidiaries
provided to Parent in the data room contained in the office of Piper Rudnick
LLP located at 1775 Wiehle Avenue, Suite 400, Reston, Virginia 20190 and
documents “made available in the Data Room” means those documents listed on the
Data Room Index included in Section 9.5(a)(v) to the Company Disclosure
Schedule.

 

(vi)                              “Director”, when used in
reference to the Company, means a member of the Company Board of Directors.

 

(vii)                           “employees at the director level”
and similar non-capitalized terms, means employees of the Company with the
title “Director” and not members of the Company Board of Directors.

 

(viii)                        “Knowledge” with
respect to the Company means the knowledge of the Company and the Company
Subsidiaries and their respective (i) officers, (ii) directors, and (iii)
Senior Management Personnel.

 

(ix)                                “Net
Tangible Asset Value” means an amount equal to the total tangible assets of
the Company and the Company Subsidiaries less the total liabilities of the
Company and the Company Subsidiaries.

 

(x)                                   “Person” means a natural
Person, partnership, corporation, limited liability company, business trust,
joint

 

70

 

stock
company, trust, unincorporated association, joint venture, Governmental Entity
or other entity or organization.

 

(xi)                                “Senior Management Personnel”
means the employees of the Company at the vice presidential level and above
(other than as set forth on Section 9.5(a)(xi) of the Company Disclosure
Schedule) and Dave Banta and Dick Brucker.

 

(xii)                             “Subsidiary” means with
respect to any party, any corporation, partnership or other organization,
whether incorporated or unincorporated, of which (i) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries or (ii) such
party or any other Subsidiary of such party is a general partner (excluding any
such partnership where such party or any Subsidiary of such party does not have
a majority of the voting interest in such partnership).

 

(b)                                 Index of Defined Terms. 
Solely for convenience purposes, the following is a list of terms that
are defined in this Agreement and the Section number where such definition is
contained:  

 

	
   Term

   	
    

   	
   Section

   	
    

   
	
  Acquisition Proposal

  	
   

  	
  5.2(a)

  	
   

  
	
  Affiliate

  	
   

  	
  9.5(a)(i)

  	
   

  
	
  Agreement

  	
   

  	
  First Paragraph

  	
   

  
	
  Approved Legal Representative

  	
   

  	
  5.1(c)

  	
   

  
	
  Approved Representative

  	
   

  	
  5.1(c)

  	
   

  
	
  Audit

  	
   

  	
  3.12(l)(i)

  	
   

  
	
  Banking Regulatory Approvals

  	
   

  	
  9.5(a)(ii)

  	
   

  
	
  Benefit Plans

  	
   

  	
  3.11(a)

  	
   

  
	
  Certificate

  	
   

  	
  2.1(b)

  	
   

  
	
  Certificate of Merger

  	
   

  	
  1.2

  	
   

  
	
  Change of Recommendation

  	
   

  	
  5.2(d)

  	
   

  
	
  Change of Recommendation Notice

  	
   

  	
  5.2(d)(iii)

  	
   

  
	
  Closing

  	
   

  	
  1.3

  	
   

  
	
  Closing Balance Sheet

  	
   

  	
  9.5(a)(iii)

  	
   

  
	
  Closing Date

  	
   

  	
  1.3

  	
   

  
	
  Code

  	
   

  	
  3.12(l)(ii)

  	
   

  
	
  Comerica Loan

  	
   

  	
  3.1(b)

  	
   

  
	
  Common Stock

  	
   

  	
  Recitals

  	
   

  
	
  Company

  	
   

  	
  First Paragraph

  	
   

  

 

71

 

	
   Term

   	
    

   	
   Section

   	
    

   
	
  Company Board of Directors

  	
   

  	
  Recitals

  	
   

  
	
  Company Disclosure Schedule

  	
   

  	
  3.1(a)

  	
   

  
	
  Company Employees

  	
   

  	
  6.10(a)

  	
   

  
	
  Company IP

  	
   

  	
  3.16(l)(i)

  	
   

  
	
  Company Material Adverse Effect

  	
   

  	
  9.5(a)(iv)

  	
   

  
	
  Company Permits

  	
   

  	
  3.18(b)

  	
   

  
	
  Company SEC Documents

  	
   

  	
  3.7(a)

  	
   

  
	
  Company Software 

  	
   

  	
  3.16(l)(ii)

  	
   

  
	
  Company Stockholder Approval 

  	
   

  	
  3.3

  	
   

  
	
  Company Stockholders’ Meeting

  	
   

  	
  6.2(a)

  	
   

  
	
  Company Subsidiary

  	
   

  	
  3.1(a)

  	
   

  
	
  Computer Software

  	
   

  	
  3.16(l)(iii)

  	
   

  
	
  Confidentiality Agreement

  	
   

  	
  6.4(a)

  	
   

  
	
  Contract

  	
   

  	
  3.6(d)

  	
   

  
	
  Copyrights

  	
   

  	
  3.16(l)(iv)

  	
   

  
	
  Customer Contracts

  	
   

  	
  3.13(b)

  	
   

  
	
  Data Room

  	
   

  	
  9.5(a)(v)

  	
   

  
	
  Delaware Courts

  	
   

  	
  9.10

  	
   

  
	
  Director

  	
   

  	
  9.5(a)(vi)

  	
   

  
	
  Dissenting Shares

  	
   

  	
  2.6

  	
   

  
	
  DGCL

  	
   

  	
  Recitals

  	
   

  
	
  Effective Time

  	
   

  	
  1.2

  	
   

  
	
  Employee

  	
   

  	
  6.4(b)

  	
   

  
	
  employees at the director level

  	
   

  	
  9.5(a)(vii)

  	
   

  
	
  Encumbrances

  	
   

  	
  3.1(b)

  	
   

  
	
  Environmental Claim

  	
   

  	
  3.20(e)(i)

  	
   

  
	
  Environmental Laws

  	
   

  	
  3.20(e)(ii)

  	
   

  
	
  ERISA

  	
   

  	
  3.11(a)

  	
   

  
	
  ERISA Affiliate

  	
   

  	
  3.11(a)

  	
   

  
	
  ESPP

  	
   

  	
  2.5(b)

  	
   

  
	
  Exchange Act

  	
   

  	
  3.6(c)

  	
   

  
	
  Financial Statements

  	
   

  	
  3.7(b)

  	
   

  
	
  Foreign Benefit Plan

  	
   

  	
  3.11(q)

  	
   

  
	
  GAAP

  	
   

  	
  3.7(b)

  	
   

  
	
  Governmental Entity

  	
   

  	
  3.6(b)

  	
   

  
	
  HSR Act

  	
   

  	
  3.6(c)

  	
   

  
	
  Inactive Employee

  	
   

  	
  6.4(b)

  	
   

  
	
  Inbound License Agreements

  	
   

  	
  3.16(l)(v)

  	
   

  
	
  Indemnified Parties

  	
   

  	
  6.6(a)

  	
   

  
	
  Intellectual Property

  	
   

  	
  3.16(l)(vi)

  	
   

  
	
  Knowledge

  	
   

  	
  9.5(a)(viii)

  	
   

  
	
  Leased Real Property

  	
   

  	
  3.14(a)

  	
   

  
	
  LTD Policy

  	
   

  	
  6.10(c)

  	
   

  
	
  Material Acquisition Agreement

  	
   

  	
  3.27(b)(ii)

  	
   

  

 

72

 

	
   Term

   	
    

   	
   Section

   	
    

   
	
  Material Acquisitions

  	
   

  	
  3.27(b)(i)

  	
   

  
	
  Material Contracts

  	
   

  	
  3.13(b)

  	
   

  
	
  Materials of Environmental Concerns

  	
   

  	
  3.20(e)(iii)

  	
   

  
	
  Merger

  	
   

  	
  Recitals

  	
   

  
	
  Merger Consideration

  	
   

  	
  2.1(b)

  	
   

  
	
  Merger Sub

  	
   

  	
  First Paragraph

  	
   

  
	
  Net Tangible Asset Value

  	
   

  	
  9.5(a)(ix)

  	
   

  
	
  New Plans

  	
   

  	
  6.10(c)

  	
   

  
	
  Old Plans

  	
   

  	
  6.10(c)

  	
   

  
	
  Open Source Materials

  	
   

  	
  3.16(l)(vii)

  	
   

  
	
  Option

  	
   

  	
  2.5(d)(i)

  	
   

  
	
  Option Plans

  	
   

  	
  2.5(d)(ii)

  	
   

  
	
  Outbound License Agreement

  	
   

  	
  3.16(l)(viii)

  	
   

  
	
  Parent

  	
   

  	
  First Paragraph

  	
   

  
	
  Patents

  	
   

  	
  3.16(l)(ix)

  	
   

  
	
  Paying Agent

  	
   

  	
  2.2(a)

  	
   

  
	
  Permitted Encumbrances

  	
   

  	
  3.14(e)

  	
   

  
	
  Person

  	
   

  	
  9.5(a)(x)

  	
   

  
	
  Preferred Stock

  	
   

  	
  3.2(a)

  	
   

  
	
  Prior Acts Coverage

  	
   

  	
  6.6(b)

  	
   

  
	
  Proxy Statement

  	
   

  	
  3.21

  	
   

  
	
  Registered Company IP

  	
   

  	
  3.16(l)(x)

  	
   

  
	
  Representatives

  	
   

  	
  5.2(a)

  	
   

  
	
  SEC

  	
   

  	
  3.6(c)

  	
   

  
	
  Securities Act

  	
   

  	
  3.7(a)

  	
   

  
	
  Senior Management Personnel

  	
   

  	
  9.5(a)(xi)

  	
   

  
	
  Subsidiary

  	
   

  	
  9.5(a)(xii)

  	
   

  
	
  Superior Proposal

  	
   

  	
  5.2(c)

  	
   

  
	
  Surviving Corporation

  	
   

  	
  1.1

  	
   

  
	
  Tax

  	
   

  	
  3.12(l)(iii)

  	
   

  
	
  Tax Authority

  	
   

  	
  3.12(l)(iv)

  	
   

  
	
  Tax Returns

  	
   

  	
  3.12(l)(v)

  	
   

  
	
  Termination Fee

  	
   

  	
  8.2(b)(i)

  	
   

  
	
  Thomas Weisel Partners

  	
   

  	
  3.22

  	
   

  
	
  Trade Secrets

  	
   

  	
  3.16(l)(xii)

  	
   

  
	
  Trademarks

  	
   

  	
  3.16(l)(xi)

  	
   

  
	
  Transactions

  	
   

  	
  3.3

  	
   

  
	
  Updata

  	
   

  	
  3.24

  	
   

  
	
  Voting Agreements

  	
   

  	
  Recitals

  	
   

  
	
  Voting Debt

  	
   

  	
  3.2(c)

  	
   

  

 

(c)                                  When a reference is made in this
Agreement to an Article or Section, such reference shall be to an Article or
Section of this Agreement unless

 

73

 

otherwise indicated.  The headings, the table of contents and the
index of defined terms contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  Whenever the words “include,”
“includes,” or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation.”

 

Section 9.6                                      Counterparts.  This Agreement may be executed manually in
two or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.

 

Section 9.7                                      Entire Agreement.  This Agreement (including the Schedules
hereto) and the Confidentiality Agreement constitute the entire agreement among
the parties with respect to the subject matter hereof and thereof and supersede
all other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof and thereof
(provided that the provisions of this Agreement shall supersede any conflicting
provisions of the Confidentiality Agreement).

 

Section 9.8                                      Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of the other provisions hereof.  If any provision of this Agreement, or the
application thereof to any Person or entity or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the intent
and purpose of such invalid and unenforceable provision and (b) the remainder
of this Agreement and the application of such provision to other Persons,
entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.

 

Section 9.9                                      Specific Performance.  The parties hereto agree that irreparable
damage would occur if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached
and that the parties shall be entitled to seek an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, in addition to any other remedy to which they are entitled at law
or in equity.

 

Section 9.10                                Governing Law and Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.  This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard
to the principles of conflicts of law thereof. 
Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to jurisdiction of the courts of the State of Delaware and
of the United States of America located in the State of

 

74

 

Delaware (the “Delaware
Courts”) for any litigation arising out of or relating to this Agreement
and the transactions contemplated hereby (and agrees not to commence any
litigation relating thereto except in such Delaware Courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum.

 

Section 9.11                                Assignment.  This Agreement shall not be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that the Merger Sub may
assign, in its sole discretion and without the consent of any other party, any
or all of its rights, interests and obligations hereunder to (i) Parent, (ii)
to Parent and one or more direct or indirect wholly-owned Subsidiaries of
Parent, or (iii) to one or more direct or indirect wholly-owned Subsidiaries of
Parent.

 

Section 9.12                                Rules of Construction.  The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.

 

Section 9.13                                No Waiver; Remedies Cumulative.  No failure or delay on the part of any party
hereto in the exercise of any right hereunder will impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.  All rights and remedies
existing under this Agreement are cumulative to, and not exclusive to, and not
exclusive of, any rights or remedies otherwise available.

 

Section 9.14                                Parties in Interest.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Section 6.6 nothing in this
Agreement, express or implied, is intended to or shall confer upon any other Person
any rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement.

 

Section 9.15                                Waiver of Jury Trial.  EACH OF PARENT, THE COMPANY AND THE MERGER
SUB HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
ACTIONS OF PARENT, THE COMPANY OR THE MERGER SUB IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

[REST OF PAGE INTENTIONALLY LEFT BLANK]

 

75

 

IN WITNESS
WHEREOF, Parent, the Merger Sub and the Company have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.

 

 

	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPM MERGER SUB INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VASTERA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy Davenport

  
	
   

  	
   

  	
  Title:

  	
  President and

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
						

 

 

Signature page to Agreement and Plan of Merger

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]