Document:

Exhibit 10.5

 

	
  

  	
  Key Executive

  Stock Deferral Plan

  

 

Stock
Restriction Agreement

 

This Stock Restriction Agreement (the “Agreement”) is made and entered
into this          day of                       ,
2003, by and between                                          (“Participant”)
and Science Applications International Corporation (the “Company”) with
reference to the following facts:

 

a.               Participant desires to become a Participant
in the Science Applications International Corporation Key Executive Stock Deferral
Plan (“Plan”) and has been determined to be eligible to become a Participant by
the Plan’s Deferral Authority.

 

b.              Participation in the Plan is specifically
conditioned on the Participant entering into an agreement with SAIC relating to
SAIC’s right of repurchase of shares of SAIC Class A Common Stock (“Company
Stock”) potentially distributable to Participant under the terms of the Plan.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.               Participant acknowledges and agrees that the
Company Stock is subject to the rights, restrictions and limitations set forth
in Article Fourth of Restated Certificate of Incorporation of Science
Applications International Corporation (“Certificate”).

 

2.               In addition to the rights, restrictions and
limitations set forth in Article Fourth of the Certificate, any shares of the
Company Stock distributed to Participant under the Plan shall be subject to the
Company’s additional right of repurchase on the terms and conditions set forth
below.

 

3.               The Company’s right of repurchase shall be
identical to that provided under ARTICLE FOURTH of the Certificate, except as
follows:

 

(a)          The Company shall have no right to repurchase shares of Company Stock
distributed to Participant under the terms of the Plan during the period of
time from the date such shares are distributed to Participant pursuant to the
terms of the Plan (“Distribution Date”) to two hundred ten (210) days after the
Distribution Date.

 

(b)         After two hundred ten (210) days after the Distribution Date, the
Company shall have the right to repurchase such shares. The period for
providing notice of the Company’s exercise of the right of repurchase shall
expire two hundred seventy (270) days after the Distribution Date.

 

(c)          If the Company elects to repurchase the shares, the price shall be the
Formula Price in effect on the date which is two hundred ten (210) days after
the Distribution Date and the Company shall pay for such shares in cash or by
Company check within three hundred (300) days after the Distribution Date.

 

4.               In all respects, other than those set forth
in paragraph 3 above, the Company’s additional right of repurchase shall be
governed by the terms of the ARTICLE FOURTH of the Certificate, and entering
into this Agreement shall in no way represent a waiver of the Company’s right
of repurchase under the Certificate, rather only an addition to such right.

 

5.               All other restrictions on the Company Stock
set forth in ARTICLE FOURTH of the Certificate or otherwise shall remain in
full force and effect.

 

6.               Defined terms used herein and not otherwise
defined shall have the meaning set forth for such terms in the Plan.

 

 

	
  Executed this

  	
   

  	
   day of

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  	
   

  
	
   

  	
  Participant Signature

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lucy K. Moffitt 

  	
  Participant Social Security #

  
	
   

  	
  Science Applications International Corporation

  	
   

  
											

 

Return form in envelope
provided to: Beth Bell, Mullin Consulting, Inc. 644 S Figueroa St. Los Angeles,
CA 90017Exhibit
10.6

 

EXECUTION
COPY

 

 

 

STOCK
PURCHASE AGREEMENT

 

BETWEEN

 

SCIENCE
APPLICATIONS INTERNATIONAL CORPORATION

 

AND

 

TTI HOLDING
CORPORATION

 

Dated as of November 17, 2004

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
  ARTICLE I
  PURCHASE AND SALE OF STOCK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Sale and Transfer of Stock.

  	
  1

  
	
   

  	
  1.2

  	
  The
  Purchase Price.

  	
  1

  
	
   

  	
  1.3

  	
  The Additional Purchase
  Price.

  	
  1

  
	
   

  	
  1.4

  	
  Purchase Price Adjustment.

  	
  3

  
	
   

  	
  1.5

  	
  Purchase Price Allocation.

  	
  7

  
	
   

  	
  1.6

  	
  The Closing.

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II
  REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Organization;
  Standing and Power; Charter Documents; Subsidiaries.

  	
  7

  
	
   

  	
  2.2

  	
  Capital
  Structure.

  	
  8

  
	
   

  	
  2.3

  	
  Authority;
  Non-Contravention; Necessary Consents.

  	
  8

  
	
   

  	
  2.4

  	
  Financial
  Statements; No Undisclosed Liabilities.

  	
  9

  
	
   

  	
  2.5

  	
  Absence of Certain
  Changes or Events.

  	
  10

  
	
   

  	
  2.6

  	
  Taxes.

  	
  11

  
	
   

  	
  2.7

  	
  Intellectual Property.

  	
  12

  
	
   

  	
  2.8

  	
  Compliance; Permits.

  	
  15

  
	
   

  	
  2.9

  	
  Litigation.

  	
  15

  
	
   

  	
  2.10

  	
  Employee Benefit Plans.

  	
  16

  
	
   

  	
  2.11

  	
  Title to Properties.

  	
  18

  
	
   

  	
  2.12

  	
  Environmental Matters.

  	
  19

  
	
   

  	
  2.13

  	
  Contracts.

  	
  20

  
	
   

  	
  2.14

  	
  Insurance.

  	
  21

  
	
   

  	
  2.15

  	
  Transactions
  with Seller and Affiliates.

  	
  21

  
	
   

  	
  2.16

  	
  Brokers and Finders.

  	
  21

  
	
   

  	
  2.17

  	
  Seller Organization, Standing and
  Power; Charter Documents

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND
  WARRANTIES OF PURCHASER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Organization; Standing
  and Power; Charter Documents.

  	
  22

  
	
   

  	
  3.2

  	
  Authority;
  Non-Contravention; Necessary Consents.

  	
  22

  
	
   

  	
  3.3

  	
  Availability of Funds.

  	
  23

  
	
   

  	
  3.4

  	
  Litigation.

  	
  24

  
	
   

  	
  3.5

  	
  Brokers and Finders.

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  INTERIM OPERATIONS OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Conduct of Business
  by the Company.

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V
  ADDITIONAL AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Acquisition Proposals.

  	
  27

  
	
   

  	
  5.2

  	
  Confidentiality;
  Access to Information.

  	
  27

  
	
   

  	
  5.3

  	
  Public Disclosure.

  	
  28

  
	
   

  	
  5.4

  	
  Regulatory
  Filings; Reasonable Efforts.

  	
  29

  

 

i

 

	
   

  	
  5.5

  	
  Notification of
  Certain Matters.

  	
  31

  
	
   

  	
  5.6

  	
  Employee Benefits.

  	
  31

  
	
   

  	
  5.7

  	
  Director’s
  and Officer’s Indemnification.

  	
  32

  
	
   

  	
  5.8

  	
  Tax Covenants.

  	
  34

  
	
   

  	
  5.9

  	
  Transition Services.

  	
  35

  
	
   

  	
  5.10

  	
  Release
  of Guaranties; Assumptions of Letters of Credit; Transfer of Equipment
  Leases.

  	
  36

  
	
   

  	
  5.11

  	
  Other Matters.

  	
  37

  
	
   

  	
  5.12

  	
  Financing.

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CONDITIONS PRECEDENT TO THE PARTIES’ PERFORMANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Conditions
  to the Performance of Each Party.

  	
  39

  
	
   

  	
  6.2

  	
  Additional
  Conditions to the Obligations of Seller.

  	
  39

  
	
   

  	
  6.3

  	
  Additional Conditions to
  the Obligations of Purchaser.

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Survival of
  Representations and Warranties.

  	
  41

  
	
   

  	
  7.2

  	
  Indemnification by Seller.

  	
  41

  
	
   

  	
  7.3

  	
  Indemnification by
  Purchaser.

  	
  42

  
	
   

  	
  7.4

  	
  Procedure for
  Claims Between Parties.

  	
  42

  
	
   

  	
  7.5

  	
  Defense of Third Party
  Claims.

  	
  43

  
	
   

  	
  7.6

  	
  Limitations.

  	
  45

  
	
   

  	
  7.7

  	
  No Duplication;
  Exclusive Remedy.

  	
  46

  
	
   

  	
  7.8

  	
  Tax Claims.

  	
  46

  
	
   

  	
  7.9

  	
  Tax Effect of
  Indemnification Payments.

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII TERMINATION, AMENDMENT
  AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Termination.

  	
  48

  
	
   

  	
  8.2

  	
  Notice of
  Termination; Effect of Termination.

  	
  49

  
	
   

  	
  8.3

  	
  Fees and Expenses.

  	
  50

  
	
   

  	
  8.4

  	
  Amendment.

  	
  50

  
	
   

  	
  8.5

  	
  Extension; Waiver.

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Notices.

  	
  50

  
	
   

  	
  9.2

  	
  Interpretation; Knowledge.

  	
  52

  
	
   

  	
  9.3

  	
  Counterparts.

  	
  53

  
	
   

  	
  9.4

  	
  Entire
  Agreement; Third-Party Beneficiaries.

  	
  53

  
	
   

  	
  9.5

  	
  Severability.

  	
  53

  
	
   

  	
  9.6

  	
  Other Remedies.

  	
  53

  
	
   

  	
  9.7

  	
  Governing Law; Waiver of Jury Trial;
  Arbitration of Patent Claims.

  	
  54

  
	
   

  	
  9.8

  	
  Rules of Construction.

  	
  55

  
	
   

  	
  9.9

  	
  Assignment.

  	
  55

  
	
   

  	
  9.10

  	
  No
  Waiver.

  	
  55

  

 

ii

 

Exhibits

 

	
  Exhibit A - Transition Services Agreement

  
	
  Exhibit B - Noncompetition Agreement

  
	
  Exhibit C - Cross License Agreement

  

 

iii

 

Definitions

 

The definitions used in this Agreement are defined in the following
Sections:

 

	
  Defined Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Acquisition

  	
   

  	
  Section 5.1

  
	
  Acquisition Proposal

  	
   

  	
  Section 5.1

  
	
  Additional Purchase Price

  	
   

  	
  Section 1.3

  
	
  Adjusted Working Capital

  	
   

  	
  Section 1.4(a)(iii)(1)

  
	
  Adjustment Statement

  	
   

  	
  Section 1.4(a)(ii)(1)

  
	
  Affiliate

  	
   

  	
  Section 9.2(e)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Ancillary Agreements

  	
   

  	
  Section 2.3(a)

  
	
  Benefit Plans

  	
   

  	
  Section 2.10(b)(i)

  
	
  Claim Notice

  	
   

  	
  Section 7.4

  
	
  Closing

  	
   

  	
  Section 1.6

  
	
  Closing Balance Sheet

  	
   

  	
  Section 1.4(a)(ii)(1)

  
	
  Closing Date

  	
   

  	
  Section 1.6

  
	
  Code

  	
   

  	
  Section 2.6(b)(ii)

  
	
  Commitment Letter

  	
   

  	
  Section 3.3(a)

  
	
  Company

  	
   

  	
  Recital A

  
	
  Company Balance Sheet

  	
   

  	
  Section 2.4(a)

  
	
  Company Charter Documents

  	
   

  	
  Section 2.1(b)

  
	
  Company Common Stock

  	
   

  	
  Recital B

  
	
  Company Indemnified Liabilities

  	
   

  	
  Section 5.7(a)

  
	
  Company Indemnified Parties

  	
   

  	
  Section 5.7(a)

  
	
  Company Indemnified Proceedings

  	
   

  	
  Section 5.7(a)

  
	
  Company Intellectual Property

  	
   

  	
  Section 2.7(a)(ii)

  
	
  Company Material Contract

  	
   

  	
  Section 2.13(a)

  
	
  Company Participants

  	
   

  	
  Section 5.6(a)

  
	
  Company Permits

  	
   

  	
  Section 2.8(b)

  
	
  Company Registered Intellectual Property

  	
   

  	
  Section 2.7(a)(iv)

  
	
  Confidentiality Agreements

  	
   

  	
  Section 9.2(f)

  
	
  Contract

  	
   

  	
  Section 2.7(f)

  
	
  Debt Financing

  	
   

  	
  Section 3.3(a)

  
	
  DGCL

  	
   

  	
  Section 5.7(a)

  
	
  DOJ

  	
   

  	
  Section 5.4(a)

  
	
  Effect

  	
   

  	
  Section 9.2(c)

  
	
  Employee

  	
   

  	
  Section 2.10(a)

  
	
  End Date

  	
   

  	
  Section 8.1(b)

  
	
  Environmental Law

  	
   

  	
  Section 2.12(a)

  
	
  ERISA

  	
   

  	
  Section 2.10(b)(i)

  
	
  ERISA Affiliate

  	
   

  	
  Section 2.10(b)(i)

  
	
  Estimated Working Capital Adjustment

  	
   

  	
  Section 1.4(a)(i)

  
	
  Excluded Claims

  	
   

  	
  Section 7.2(d)

  
	
  Financial Statements

  	
   

  	
  Section 2.4(a)

  

 

iv

 

	
  FTC

  	
   

  	
  Section 5.4(a)

  
	
  Funded Debt

  	
   

  	
  Section 1.4(a)(iii)(4)

  
	
  GAAP

  	
   

  	
  Section 2.4(a)

  
	
  Governmental Entity

  	
   

  	
  Section 2.3(c)

  
	
  Hazardous Materials

  	
   

  	
  Section 2.12(a)

  
	
  HSR Act

  	
   

  	
  Section 2.3(c)

  
	
  Included Assets

  	
   

  	
  Section 1.4(a)(iii)(2)

  
	
  Included Liabilities

  	
   

  	
  Section 1.4(a)(iii)(3)

  
	
  Indefinitely Surviving Representations

  	
   

  	
  Section 7.1

  
	
  Indemnified Party

  	
   

  	
  Section 7.4

  
	
  Indemnifying Party

  	
   

  	
  Section 7.4

  
	
  Independent Accountants

  	
   

  	
  Section 1.4(a)(iii)(5)

  
	
  Intellectual Property

  	
   

  	
  Section 2.7(a)(i)

  
	
  IRS

  	
   

  	
  Section 2.10(b)(iv)

  
	
  Knowledge

  	
   

  	
  Section 9.2(b)

  
	
  LCP Deferred Revenue

  	
   

  	
  Section 1.4(a)(iii)(6)

  
	
  Legal Proceedings

  	
   

  	
  Section 2.9

  
	
  Legal Requirement

  	
   

  	
  Section 2.3(b)

  
	
  Lenders’ Consent

  	
   

  	
  Section 6.2(e)

  
	
  Liens

  	
   

  	
  Section 2.1(c)

  
	
  Losses

  	
   

  	
  Section 7.2

  
	
  Material Adverse Effect

  	
   

  	
  Section 9.2(c)

  
	
  Minimum Amount

  	
   

  	
  Section 7.6(a)

  
	
  Multiemployer Plan

  	
   

  	
  Section 2.10(c)

  
	
  Necessary Consents

  	
   

  	
  Section 2.3(c)

  
	
  Net LCP Deferred Revenue

  	
   

  	
  Section 1.4(a)(iii)(7)

  
	
  Noncompetition Agreement

  	
   

  	
  Section 6.3(f)

  
	
  Notice Period

  	
   

  	
  Section 7.4

  
	
  October Financial Statements

  	
   

  	
  Section 5.12(c)

  
	
  Owned Real Property

  	
   

  	
  Section 2.11(a)

  
	
  Patent Claims

  	
   

  	
  Section 1.3(b)

  
	
  Pension Plans

  	
   

  	
  Section 2.10(b)(i)

  
	
  Permits

  	
   

  	
  Section 2.8(b)

  
	
  Person

  	
   

  	
  Section 9.2(d)

  
	
  Potential Contributor

  	
   

  	
  Section 7.6(a)

  
	
  Pre-Closing Tax Period

  	
   

  	
  Section 5.8(a)

  
	
  Proprietary Information

  	
   

  	
  Section 5.2(a)(ii)

  
	
  Prudent Business Reasons

  	
   

  	
  Section 5.11(a)(ii)

  
	
  PTO

  	
   

  	
  Section 2.7(b)

  
	
  Purchase Price

  	
   

  	
  Section 1.2

  
	
  Purchaser

  	
   

  	
  Preamble

  
	
  Purchaser Charter Documents

  	
   

  	
  Section 3.1(b)

  
	
  Purchaser Deductible Amount

  	
   

  	
  Section 7.6(a)

  
	
  Purchaser Indemnified Parties

  	
   

  	
  Section 7.2

  
	
  Registered Intellectual Property

  	
   

  	
  Section 2.7(a)(iii)

  
	
  Remaining Guaranties

  	
   

  	
  Section 5.10(b)

  

 

v

 

	
  Scheduled Guaranties

  	
   

  	
  Section 5.10(a)

  
	
  Seller

  	
   

  	
  Preamble

  
	
  Seller Disclosure Letter

  	
   

  	
  Article II

  
	
  Seller Indemnified Parties

  	
   

  	
  Section 7.3

  
	
  Shares

  	
   

  	
  Recital B

  
	
  Straddle Period

  	
   

  	
  Section 5.8(b)

  
	
  Subsidiaries

  	
   

  	
  Section 2.1(a)

  
	
  Subsidiary Charter Documents

  	
   

  	
  Section 2.1(b)

  
	
  Tax or Taxes

  	
   

  	
  Section 2.6(a)(i)

  
	
  Tax Claim

  	
   

  	
  Section 7.8(c)

  
	
  Tax Return

  	
   

  	
  Section 2.6(a)(ii)

  
	
  Transition Services Agreement

  	
   

  	
  Section 5.9

  
	
  TSA Litigation

  	
   

  	
  Section 1.3(a)

  
	
  Working Capital Deficit

  	
   

  	
  Section 1.4(a)(iii)(1)

  
	
  Working Capital Surplus

  	
   

  	
  Section 1.4(a)(iii)(1)

  

 

vi

 

STOCK
PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of November 17,
2004, between Science Applications International Corporation, a Delaware
corporation (“Seller”), and TTI
Holding Corporation, a Delaware corporation (“Purchaser”).

 

RECITALS

 

A.                                   Seller owns all of the issued and outstanding
shares of capital stock of Telcordia Technologies, Inc., a Delaware corporation
(the “Company”).

 

B.                                     At the Closing, Seller desires to sell all of
the outstanding shares (the “Shares”)
of common stock of the Company, par value $0.01 per share (“Company Common Stock”), to Purchaser and Purchaser
desires to purchase all of the Shares from Seller, in each case upon the terms
and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the
covenants and representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

ARTICLE I

PURCHASE
AND SALE OF STOCK

 

1.1                                 Sale and Transfer of Stock.

 

Subject to and upon the
terms and conditions of this Agreement, at the Closing, Seller shall sell,
convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase
from Seller, all the Shares, free and clear of all Liens.

 

1.2                                 The Purchase
Price. 
Subject to and upon the terms and conditions of this Agreement, in
consideration for the aforesaid sale, conveyance, assignment, transfer and
delivery of the Shares at the Closing, the Purchaser shall pay to Seller cash
in the amount of One Billion Three Hundred Fifty Million Dollars ($1,350,000,000)
(the “Purchase Price”), which
Purchase Price shall be paid by the Purchaser to the Seller at the Closing by
wire transfer of immediately available funds to such account as the Seller
shall, not less than one (1) business day prior to the Closing Date, designate
in writing to Purchaser.  The Purchase
Price shall be subject to adjustment as provided in Section 1.4.

 

1.3                                 The
Additional Purchase Price.

 

Subject to and upon the
terms and conditions of this Agreement, as additional consideration for the sale,
conveyance, assignment, transfer and delivery of the Shares at the Closing, the
Purchaser shall, within fifteen (15) days from the occurrence of any of the
following events, pay to Seller the following amounts (collectively, the “Additional Purchase Price”):

 

(a)                                  the amount of consideration, if any, received
by Purchaser or any of its Affiliates (including, following the Closing, the
Company or any of its Subsidiaries) (net of incremental Taxes imposed or Tax
attributes utilized with respect to the receipt of such

 

1

 

consideration)
related to or arising out of the settlement, or pursuant to a judgment or
order, in connection with the matter of Telcordia Technologies, Inc. v. Telkom
South Africa (the “TSA Litigation”);

 

(b)                                 fifty percent (50%) of the amount of
consideration, when and as received, (net of related out-of-pocket legal and
adviser fees and expenses incurred by the Company after the Closing Date and
incremental Taxes imposed or Tax attributes utilized with respect to the
receipt of such consideration), received by Purchaser or any of its Affiliates
(including, following the Closing, the Company or any of its Subsidiaries) in
settlement or pursuant to a judgment or order, including any license or
cross-license of intellectual property resulting therefrom, related to or
arising out of the enforcement of the Company’s rights under the patents set
forth on Section 1.3(b) of the Seller Disclosure Letter (“Patent Claims”), provided, however, that if Purchaser or any of its
Affiliates receives consideration other than cash in payment of any settlement,
judgment or order relating to the Patent Claims, including any license or
cross-license of intellectual property, the parties shall use commercially reasonable
efforts to value such non-cash consideration and Purchaser shall promptly pay
Seller its fifty percent (50%) share of such non-cash consideration in cash
based on the agreed-upon value of such non-cash consideration (i.e. value of
non-cash consideration shall be based on the additional incremental profit or
other value to be received by the Company attributable to the Patent Claims), provided, further, that if the parties are
unable to agree on the value of such non-cash consideration, then the value of
such non-cash consideration shall be determined in accordance with the
procedures set forth in Section 9.7(c);

 

(c)                                  if any amount representing the reserve for
Tax claims identified by state in Section 1.3(c) of the Seller Disclosure
Letter is greater than the final amount paid by the Company in connection with
the settlement or final judgment of any such Tax claims, the amount of the
difference between such reserve identified in Section 1.3(c) of the Seller
Disclosure Letter and the amount paid by the Company pursuant to such
settlement or judgment, provided, however,
that Seller’s obligation to indemnify Purchaser for such Tax claims in
accordance with Section 7.8 shall remain in full force and be unaffected
by this Section 1.3(c);

 

(d)                                 if any amount representing the reserve for
Tax claims identified by state or country in Section 1.3(d) of the Seller
Disclosure Letter is greater than the final amount paid by the Company in
connection with the settlement or final judgment of any such Tax claims, the
amount of the difference between the such reserve identified in Section 1.3(d)
of the Seller Disclosure Letter and the amount paid by the Company pursuant to
such settlement or judgment, provided,
however, that if no audit or investigation is instituted by the taxing
authorities in any such state or country by the second anniversary of the
Closing Date, then the amount representing the full amount of the reserve for
Tax claims identified by state or country in Section 1.3(d) of the Seller
Disclosure Letter shall be remitted to Seller within fifteen (15) days of the
second anniversary of the Closing Date, provided,
further that Seller’s obligation to indemnify Purchaser for such Tax
claims in accordance with Section 7.8 shall remain in full force and be
unaffected by this Section 1.3(d);

 

(e)                                  the amount of the U.S. federal research Tax
credits and New Jersey research Tax credits earned by the Company during the
Pre-Closing Tax Periods beginning on or after February 1, 2004, which may
not be includable or reportable on Seller’s U.S. or New Jersey

 

2

 

Tax
Returns, calculated in the case of such amounts attributable to the year in
which the Closing occurs by multiplying the total amount of each such tax
credit earned by the Company by a fraction, the numerator of which is the
number of days elapsed during any such Pre-Closing Tax Period and the
denominator of which is 365; provided,
however, that any payment made pursuant to this Section 1.3(e)
shall be made after such tax credits are actually utilized by the Company or
any of the Subsidiaries in a taxable period beginning after the Closing Date
and after all related tax credit carry-forwards existing as of the Closing Date
have been utilized by the Company or any of the Subsidiaries; and

 

(f)                                    any Tax refunds received (net of incremental
Taxes imposed or Tax attributes utilized with respect to the receipt of such
refund and net of Tax attributes reduced, extinguished or cancelled in
connection with, or as a result of, such refund) after the Closing (including
refund checks negotiated after the Closing to the extent not otherwise taken
into account in Section 1.4), if any, by the Company for the Pre-Closing
Tax Periods including, without limitation, refunds received by the Company
relating to the New Jersey Business Employment Incentive Program, all of which
shall, with respect to the year in which the Closing occurs, be calculated by
multiplying the total amount of any such Tax refund received by the Company for
the year in which the Closing occurs by a fraction, the numerator of which is
the number of days elapsed during such Pre-Closing Tax Period and the
denominator of which is 365; provided,
however, that no payment shall be required pursuant to this Section 1.3(f)
with respect to Tax refunds resulting from, or relating to, a carry-back of any
loss arising in a taxable period (or portion thereof) that began after the
Closing Date.

 

1.4                                 Purchase
Price Adjustment.

 

The Purchase Price shall be subject to adjustment as
follows:

 

(a)                                  Working Capital Adjustment.

 

(i)                           Estimated Working Capital Adjustment.  At
the Closing, the Purchase Price will be adjusted on a dollar-for-dollar basis
as set forth in this Section 1.4(a)(i). 
Not more than ten (10) business days, but in no event less than five (5)
business days, before the anticipated Closing Date, Seller shall, in good
faith, prepare and deliver to Purchaser a written statement of estimated
Adjusted Working Capital, LCP Deferred Revenue, Net LCP Deferred Revenue and
Funded Debt as of the open of business on the Closing Date, in each case using
an estimated Closing Balance Sheet prepared using the Company’s then available
financial information as of such date. The Purchase Price to be paid at Closing
shall be reduced by the estimated sum of any Net LCP Deferred Revenue plus the
Working Capital Deficit, if any, plus Funded Debt, if any, and shall be
increased by the amount of the Working Capital Surplus, if any (the net amount
of such adjustments is referred to herein as the “Estimated  Working Capital
Adjustment”).

 

(ii)                        Final Working Capital Adjustment.

 

(1)                                  As soon as practicable after the Closing, but
in no event later than thirty (30) days after the Closing Date, Purchaser shall
(i) prepare a balance sheet of the Company as of the Closing Date in accordance
with GAAP applied on a basis consistent with

 

3

 

the
Company’s historical practices in the preparation of its unaudited monthly
financial statements (the “Closing Balance
Sheet”), (ii) calculate the Adjusted Working Capital of the Company
as of the Closing Date, (iii) calculate the LCP Deferred Revenue as of the
Closing Date, (iv) calculate the Net LCP Deferred Revenue as of the Closing
Date, (v) calculate Funded Debt, and (vi) prepare and deliver to Purchaser a
statement (the “Adjustment Statement”)
setting forth Purchaser’s calculations of the Adjusted Working Capital, the LCP
Deferred Revenue, the Net LCP Deferred Revenue and Funded Debt.  For the avoidance of doubt, only those accounts
identified in Section 1.4(a)(ii) of the Seller Disclosure Letter shall be
included in the Closing Balance Sheet for purposes of calculating Adjusted
Working Capital.  Seller shall have
thirty (30) days after receipt of the Closing Balance Sheet and the Adjustment
Statement to give Purchaser written notice of its objection to any item or
calculation contained in the Closing Balance Sheet or the Adjustment
Statement.  If Seller does not give
Purchaser written notice of its objection to the Closing Balance Sheet and the
Adjustment Statement within such thirty (30) day period, such Closing Balance
Sheet and Adjustment Statement shall be deemed final and conclusive with
respect to the determination of the Adjusted Working Capital, the LCP Deferred
Revenue, the Net LCP Deferred Revenue and Funded Debt and shall be binding on
Seller for such purpose.  If, however,
Seller objects to any items or calculations contained in the Closing Balance
Sheet or the Adjustment Statement, Seller shall submit a statement of its
objections that quantifies the dollar amount of each objection and outlines in
reasonable detail the basis and rationale for such objection, and the parties
shall meet and shall attempt in good faith to resolve such objections.  If the parties are unable to resolve Seller’s
objections within thirty (30) days following such objection, such objections
will be resolved by the Independent Accountant, who shall resolve all such
objections and shall make any necessary changes or revisions to the Closing
Balance Sheet and the Adjustment Statement within fifteen (15) days after such
Independent Accountant receives written instructions to resolve such
objections.  The Independent Accountant’s
review shall be limited to the objections made in the statement submitted to
Purchaser by Seller and Purchaser’s responses thereto and in no event shall the
Independent Accountant determine that any objection made by Seller exceeds the
amount quantified by Seller relating to each such objection.  Within five (5) days after completion, the
Independent Accountant shall deliver the Closing Balance Sheet and the
Adjustment Statement (as so changed or revised, if applicable) to Purchaser and
Seller.  The Closing Balance Sheet and
the Adjustment Statement as finalized by the Independent Accountant shall be
deemed final and conclusive with respect to the determination of the Adjusted
Working Capital, LCP Deferred Revenue, the Net LCP Deferred Revenue and Funded
Debt and shall be binding on all the parties hereto for such purposes (but shall
not limit the representations, warranties, covenants or agreements of such
Parties set forth elsewhere in this Agreement). 
The fees and expenses of the Independent Accountant in resolving all
such objections shall be borne equally by the Seller and Purchaser.

 

(2)                                  Adjustments.  Purchaser and Seller shall
make the following payments, as applicable, within five (5) business days
following the final determination of the Closing Balance Sheet, Adjusted
Working Capital, the LCP Deferred Revenue, Net LCP Deferred Revenue and Funded
Debt in accordance with Section 1.4(a)(ii)(1):

 

a)                                      Seller shall pay to Purchaser an amount equal
to the Working Capital Deficit, if any, plus the Net LCP Deferred Revenue, if
any, plus Funded Debt, if any.

 

4

 

b)                                     Purchaser shall pay to Seller an amount equal
to the Working Capital Surplus, if any.

 

c)                                      The payments set forth in this Section 1.4(a)(ii)(2)
shall only be made after giving effect to any Estimated Working Capital
Adjustment pursuant to Section 1.4(a)(i) and, if Purchaser and Seller are
both required to make payments pursuant to this Section 1.4(a)(ii)(2),
then the parties shall only be required to pay the net amount, after offsetting
the payments to be received from the other party pursuant to this Section 1.4(a)(ii)(2).  In any event, if no Working Capital
Adjustment payment is due under this Section 1.4(a)(ii)(2) and a payment
was made at Closing pursuant to the Estimated Working Capital Adjustment set
forth in Section 1.4(a)(i), then the full amount of such payment made at
Closing shall be repaid to the Purchaser or Seller, as the case may be, by the
other party.  For the avoidance of doubt
and by way of example, if the Purchase Price is reduced at Closing as a result
of the Estimated Working Capital Adjustment, Seller’s obligation to pay
Purchaser pursuant to Section 1.4(a)(ii)(2)a) shall be reduced to the
extent of the Estimated Working Capital Adjustment.  Any payments to be made pursuant to this Section 1.4(a)(ii)(2)
shall be made by wire transfer of immediately available funds and, in the case
of a payment to the Seller, shall be made to such account designated by Seller
pursuant to Section 1.2 and, in the case of a payment to Purchaser, shall
be made to an account designated in writing by Purchaser.

 

(iii)                     Definitions.  For purposes of this Section 1.4(a), the terms set forth below have the
following meaning:

 

(1)                                  “Adjusted
Working Capital” means the value of the Included Assets, less the
value of the Included Liabilities as reflected in the Closing Balance Sheet,
after giving effect to the Estimated Working Capital Adjustment, if any.  To the extent the Adjusted Working Capital is
less than negative Forty-Seven Million Dollars ($47,000,000) such difference
shall be deemed to be a “Working Capital
Deficit.”  To the extent the
Adjusted Working Capital is more than negative Forty-Seven Million Dollars
($47,000,000)  such difference shall be deemed to
be a “Working Capital Surplus.”

 

(2)                                  “Included
Assets” means the total value of the following accounts, as
reflected in the Closing Balance Sheet: accounts receivable (billed); accounts
receivable (unbilled); allowances for doubtful accounts; prepaid accounts;
Chester holdback – accounts receivable; and current assets – other.  For the avoidance of doubt, (a) “current
assets – other” shall include all assets that would be classified as current
assets on a balance sheet prepared in accordance with GAAP, applied on a basis
consistent with the Company’s historical practices in the preparation of its
unaudited monthly financial statements, that do not appear in another account
included in the definition of Included Assets, and (b) Included Assets shall
exclude (i) payments made or to be made to the Company in connection with the
TSA Litigation or any Patent Claims, (ii) regular cash, (iii) cash equivalents,
short-term investments - less than 90 days, (iv) restricted cash, (v) work in
process, (vi) material inventory, (vii) finished goods inventory, (viii)
inventory reserves, (ix) A/R - non-trade, (x) notes receivable - current
portion, (xi) accrued interest receivable, (xii) officers and employee
advances, receivables, (xiii) short-term investments - greater than 90 days,
less than 1 year, (xiv) short-term deposits, (xv) deferred tax asset - current,
and (xvi) deferred costs - long term.

 

5

 

(3)                                  “Included
Liabilities” means the total value of the following accounts, as
reflected in the Closing Balance Sheet: accounts payable; accrued liabilities-other
(excluding sales tax reserves and TSA tax reserves); advance payments; deferred
revenue (current portion, excluding LCP Deferred Revenue); deferred credits
(current portion); deferred compensation (current portion); accrued salaries,
wages and other; accrued vacation; and accrued cash and stock bonus.  For the avoidance of doubt, (a) “accrued
liabilities-other” shall include all accrued liabilities that would be
classified as current on a balance sheet prepared in accordance with GAAP,
applied on a basis consistent with the Company’s historical practices in the
preparation of its unaudited monthly financial statements, that do not appear
in another account included in the definition of Included Liabilities, and (b)
Included Liabilities shall exclude (i) sales tax reserves and TSA tax reserves,
(ii) LCP Deferred Revenue, (iii) income taxes payable, (iv) deferred taxes and
(v) notes payable and current portion of long-term debt and (vi) amounts due
under the Company’s Employee Appreciation Plan. 
Included Liabilities shall not include any fees and expenses paid by
Seller pursuant to Section 8.3.

 

(4)                                  “Funded
Debt” means, as of the Closing Date, the outstanding principal
amount of, accrued and unpaid interest on, and any other payment obligations
(including prepayment premiums payable as of such date if such principal and
interest is paid in full as of such date, fees, expenses or other amounts)
arising under, any obligations of the Company or any Subsidiary for
indebtedness or guarantees of indebtedness for borrowed money, provided, however, that the cancellation
of obligations owing from the Company to Seller (or vice versa) at or prior to
the Closing Date shall in no event affect the Closing Balance Sheet or the
Estimated Working Capital Adjustment.

 

(5)                                  “Independent
Accountants” means either PricewaterhouseCoopers or KPMG.

 

(6)                                  “LCP
Deferred Revenue” means the value of that portion of the Company’s
deferred revenue reflected in the Closing Balance Sheet that is attributable to
pre-payments for the Company’s life cycle program.

 

(7)                                  “Net LCP
Deferred Revenue” means LCP Deferred Revenue less the amount of cash
reflected in the Closing Balance Sheet.

 

(b)                                 Patent Claim Adjustment.  The
Purchase Price to be paid at Closing shall be reduced by an amount equal to 50%
of any consideration received by the Company after the date hereof and prior to
the Closing Date in settlement or pursuant to a judgment or order, including
any license or cross-license of intellectual property resulting therefrom,
related to or arising out of any Patent Claims (net of any fees and expenses
paid by the Company in respect of such Patent Claims).

 

(c)                                  Other Adjustments.  The
Purchase Price to be paid at Closing shall be reduced by an amount equal to the
aggregate amounts due under the Executive Change-in-Control, Incentive and
Severance Agreements set forth in Section 1.4(c) of the Seller Disclosure
Letter.

 

6

 

1.5                                 Purchase
Price Allocation.

 

A portion of the Purchase
Price shall be allocated to the Noncompetition Agreement, as set forth in Section 1.5  of the Seller Disclosure Letter, and neither
Seller nor Purchaser shall take any position inconsistent with such allocation
in any Tax Return.

 

1.6                                 The Closing.  The closing for the consummation of the
transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Willkie Farr
& Gallagher LLP, located at 787 Seventh Avenue, New York, NY 10019, on the
later of (i) February 1, 2005 or (ii) the second business day after the
satisfaction or waiver of the conditions set forth in Article VI (other
than those that by their terms are to be satisfied or waived at the Closing),
or at such other time, date and location as the parties hereto agree in
writing.  The date on which the Closing
occurs is referred to herein as the “Closing
Date.”

 

ARTICLE II

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser, except
as set forth in the related section(s) of the disclosure letter supplied
by Seller to Purchaser dated as of the date hereof (the “Seller Disclosure Letter”), as follows:

 

2.1                                 Organization; Standing and Power;
Charter Documents; Subsidiaries.

 

(a)                                  Organization; Standing and Power.  The
Company and each of its Subsidiaries (as defined below) (i) is a corporation or
other organization duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (except, in
the case of good standing, for entities organized under the laws of any
jurisdiction that does not recognize such concept), (ii) has the requisite
power and authority to own, lease and operate its properties and to carry on
its business as now being conducted, and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed or to be in good standing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company. 
For purposes of this Agreement, “Subsidiaries”
shall mean the entities set forth on Schedule 2.1(a) of the Seller Disclosure Letter.

 

(b)                                 Charter Documents.  The
Company has made available to Purchaser a true and correct copy of (i) the
certificate of incorporation and bylaws of the Company, each as amended to date
(collectively, the “Company Charter Documents”)
and (ii) the certificate of incorporation and bylaws, or like
organizational documents of each of its Subsidiaries, each as amended to date
(collectively, “Subsidiary Charter Documents”),
and each such instrument is in full force and effect.  The Company is not in material violation of
any of the provisions of the Company Charter Documents and each Subsidiary is
not in material violation of its respective Subsidiary Charter Documents.

 

(c)                                  Subsidiaries.  All
the outstanding shares of capital stock of, or other equity or voting interests
in, each Subsidiary have been validly issued and are fully paid and

 

7

 

nonassessable
and are owned by the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever,
other than liens for Taxes not yet due and payable and restrictions imposed by
applicable securities laws (collectively, “Liens”).  Other than equity ownership interests in the
Subsidiaries, neither the Company nor any Subsidiary owns any capital stock of,
or other equity or voting interests of any nature in, or any interest
convertible, exchangeable or exercisable for, capital stock of, or other equity
or voting interests of any nature in, any other Person.

 

2.2                                 Capital
Structure.

 

The authorized capital stock of Company consists of
1,000 shares of Common Stock.  At the
close of business on the date hereof, seven shares of Company Common Stock were
issued and outstanding and no shares of Company Common Stock are owned,
beneficially, or of record, by any Person other than Seller.  All of the outstanding shares of capital
stock of the Company are duly authorized and validly issued, fully paid and
nonassessable and are owned by the Seller free and clear of all Liens and are
not subject to any preemptive rights.  At
the Closing, the Purchaser will acquire good and valid title to all of the
outstanding shares of capital stock of the Company, free and clear of all
Liens, except any Liens incurred by the Purchaser or its Affiliates.  Except as set forth above, (i) there are no
shares of capital stock of, or other equity or voting interests in, the Company
authorized, issued or outstanding, (ii) there are no existing options, warrants,
calls, preemptive rights, subscription or other rights, agreements,
arrangements or commitments of any character, relating to the issued or
unissued capital stock of the Company, obligating the Company or any of its
Subsidiaries to issue, transfer, redeem, purchase or sell or cause to be
issued, transferred, redeemed, purchased or sold any shares of capital stock of
the Company or any of its Subsidiaries or to otherwise make any payment in
respect of any such shares or any outstanding securities convertible into or
exchangeable into the issued or unissued capital stock of the Company or any of
its Subsidiaries, and (iii) there are no rights, agreements or arrangements of
any character which provide for a stock appreciation or similar right or grant
any right to share in the equity, income, revenue or cash flow of the Company.

 

2.3                                 Authority; Non-Contravention; Necessary Consents.

 

(a)                                  Authority.  Seller has all requisite
corporate power and authority to enter into this Agreement and the Transition
Services Agreement, the License Agreement and the Noncompetition Agreement (the
“Ancillary Agreements”) and to
consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Seller and no other corporate proceedings,
approvals or consents on the part of Seller, its stockholders or the Company
are necessary to authorize the execution and delivery of this Agreement or any
of the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby.  This Agreement has been, and, upon execution
and delivery, each of the Ancillary Agreements will be, duly executed and delivered
by Seller and, assuming due execution and delivery by Purchaser, constitute
valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) general principles of equity.

 

8

 

(b)                                 Non–Contravention.  The
execution and delivery of this Agreement and the Ancillary Agreements by Seller
does not and performance of this Agreement and the Ancillary Agreements by
Seller will not (i) conflict with or violate the certificate of
incorporation or bylaws of Seller, the Company Charter Documents or the
Subsidiary Charter Documents, (ii) conflict with or violate any material
federal, state, local, municipal, foreign or other law, statute, constitution,
principle of common law, resolution, ordinance, code, order, edict, decree,
rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Entity (each, a “Legal
Requirement”) applicable to Seller or by which Seller is bound or
applicable to the Company or any Subsidiary or by which the Company or any
Subsidiary is bound, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company’s or any Subsidiary’s rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its Subsidiaries pursuant to any Contract, except where such breach, default,
impairment, termination, amendment, acceleration, cancellation or creation of
Lien, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company.

 

(c)                                  Necessary Consents.  No
consent, approval, order or authorization of, or registration, declaration or
filing with any supranational, national, state, municipal, local or foreign
government, any instrumentality, subdivision, court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a “Governmental Entity”),
is required to be obtained or made by Seller or the Company in connection with
Seller’s execution and delivery of this Agreement or any of the Ancillary
Agreements or the consummation of the transactions contemplated hereby or
thereby, except for (i) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal, foreign and state securities (or related) laws and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and satisfaction of such other
requirements of the comparable laws of other jurisdictions, (ii) such
other consents, authorizations, filings, approvals and registrations set forth
in Section 2.3(c) of the Seller Disclosure Letter, and (iii) such
other consents, authorizations, filings, approvals and registrations the
absence of which would not be reasonably expected to have a Material Adverse
Effect on the Company.  The consents,
approvals, orders, authorizations, registrations, declarations and filings set
forth in clauses (i) and (ii) are referred to herein as the “Necessary Consents.”

 

2.4                                 Financial Statements; No Undisclosed Liabilities.

 

(a)                                  Seller has made available to Purchaser
(i) a copy of the Company’s audited consolidated balance sheets as of January 31,
2004 and 2003 and the related consolidated statements of income, cash flows and
stockholder’s equity and comprehensive income for the three fiscal years ended January 31,
2004, accompanied by the report of the Company’s independent public accountants
thereon and (ii) a copy of the Company’s unaudited consolidated balance
sheet as of July 31, 2004 and the related consolidated statements of
income and cash flows for the six-month period then ended (collectively, the “Financial Statements”).  The Financial Statements have been prepared
in accordance with United States generally accepted

 

9

 

accounting
principles (“GAAP”) (subject, in
the case of unaudited financial statements, to normal, recurring year-end
adjustments and the absence of notes thereto) applied on a consistent basis
throughout the periods indicated.  The
Financial Statements present fairly in all material respects the financial
condition and operating results of the Company and its Subsidiaries as of the
dates, and for the periods, indicated therein, subject to normal year-end audit
adjustments.  The Company maintains a
standard system of accounting established and administered in accordance with
GAAP.  The Company’s unaudited balance
sheet as of July 31, 2004 is referred to in this Agreement as the “Company Balance Sheet.”

 

(b)                                 All accounts and notes receivable of the
Company and the Subsidiaries reflected in the Company Balance Sheet have arisen
in the ordinary course of business from bona fide transactions, represent valid
obligations due to the operations of the Company or the Subsidiaries in
accordance with their terms and have been properly accounted for in accordance
with GAAP (subject to normal year-end adjustments and the absence of notes
thereto).

 

(c)                                  Neither the Company nor any Subsidiary has
any liability or any obligations of any nature, whether or not accrued,
contingent or otherwise, and whether due or to become due or asserted or
unasserted, except for (a) liabilities shown on the Company Balance Sheet, (b)
liabilities and obligations incurred prior to the date of the Company Balance
Sheet in the ordinary course of business which will not be required by GAAP to
be reflected in, reserved against or otherwise described in the Company Balance
Sheet and that would not, individually or in the aggregate, have a Material
Adverse Effect and (c) liabilities and obligations incurred since the date of
the Company Balance Sheet in the ordinary course of business and which have not
and would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company.

 

2.5                                 Absence
of Certain Changes or Events. 
Since January 31, 2004, (a) the Company and its Subsidiaries have
conducted their businesses in the ordinary course of business in all material
respects, (b) there has not been (i) any Material Adverse Effect on the Company
or any events, circumstances or conditions that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect
on the Company, (ii) any declaration, setting aside or payment of any
dividend on, or other distribution (whether in cash, stock or property) in
respect of, any of the Company’s or any of its Subsidiaries’ capital stock,
other than any distributions of cash from the Company to Seller in accordance
with Seller’s cash management policies, (iii) any purchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any of the Company’s
capital stock or any other securities of the Company or its Subsidiaries or any
options, warrants, calls or rights to acquire any such shares or other
securities, (iv) any split, combination or reclassification of any of the
Company’s or any of its Subsidiaries’ capital stock, (v) any material
change by the Company in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, (vi) any material
revaluation by the Company of any of its assets other than in the ordinary
course of business or (vii) any material damage, destruction or loss (whether
or not covered by insurance) to any material assets of the Company or any
Subsidiary and (c) neither the Company nor any Subsidiary has taken any of the
actions set forth in Section 4.1(b)(ix) or (xi).

 

10

 

2.6                                 Taxes.

 

(a)                                  Definitions. For the purposes of this Agreement, the following terms shall have
the following meaning:

 

(i)                           “Tax”
or, collectively, “Taxes” shall
mean (i) any and all federal, state, local and foreign taxes and other like
governmental charges, fees or other like assessments of any kind whatsoever,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, registration,
franchise, withholding, payroll, recapture, employment, excise, environmental
and property taxes, together with all interest, penalties and additions imposed
with respect to such amounts, (ii) any liability for the payment of any amounts
of the type described in clause (i) of this Section 2.6 as a result of
being a member of an affiliated, consolidated, combined or unitary group for
any period, and (iii) any liability for the payment of any amounts of the type
described in clauses (i) or (ii) of this Section 2.6 as a result of any
express or implied obligation to indemnify any other Person or as a result of
any obligations under any agreements or arrangements with any other Person with
respect to such amounts and including any liability for taxes of a predecessor
entity.

 

(ii)                        “Tax Return”
shall mean any federal, state, local and foreign return, estimate, information
statement or report.

 

(b)                                 Tax Returns and Audits.

 

(i)                           The Company and each of its Subsidiaries have
prepared and filed, or joined in the filing of, when due (taking into account
all applicable extensions of time to file), all material required Tax Returns
and such Tax Returns have been completed in accordance with applicable law.

 

(ii)                        All material Taxes due and owing by the
Company or any of its Subsidiaries or to which the Company or any of its
Subsidiaries are liable under Treasury Regulations section 1.1502-6 by
virtue of having been a member of an “affiliated group” (within the meaning of Section 1504(a)
of the Internal Revenue Code of 1986, as amended (“Code”)) of which the Seller is the common parent, have been
paid as of the Closing Date, or have been accrued or reserved as set forth on
Sections 1.3(c) or 1.3(d) of the Seller Disclosure Letter.

 

(iii)                     Neither the Company nor any of its
Subsidiaries has any material liability for such Taxes as of the date of the
Company Balance Sheet which were not appropriately accrued or reserved on the
Company Balance Sheet in accordance with GAAP, and neither the Company nor any
of its Subsidiaries has incurred or will incur any material liability for such
Taxes after the date of the Company Balance Sheet through the Closing Date
other than in the ordinary course of business.

 

(iv)                    Each material audit or other examination
relating to Taxes of, or any Tax Return filed by or on behalf of, the Company
or any of its Subsidiaries which began after January 1, 2001 (whether
completed or in progress or of which the Company or any of its Subsidiaries
have been notified); each adjustment relating to any material Tax Return filed
by the Company or any of its Subsidiaries (or on behalf of the Company or any
of its Subsidiaries to the extent such adjustment relates to the Company or any
of its Subsidiaries) that has been proposed in writing by any Tax authority to
Seller, the Company or any of its Subsidiaries; and each

 

11

 

outstanding waiver of any statute of limitations on or outstanding
extension of the period for the assessment or collection of any Tax, and each
assessment for Taxes of the Company or any of its Subsidiaries which currently
remains unpaid, is set forth in the Seller Disclosure Letter.

 

(v)                       Neither the Company nor any of the
Subsidiaries (A) have any liability for the Taxes of another Person (other than
any member of the consolidated group of which the Seller is the common parent)
under Treasury Regulations section 1.1502-6 (or any similar provision of
applicable state, local or foreign law), as a transferee or successor, by
Contract or otherwise; (B) will be required to include any item of income in,
or exclude any item of deduction from, taxable income for any taxable period,
or portion thereof, ending after the Closing Date as a result of any (1) change
in method of accounting for a taxable period ending on or prior to the Closing
Date, (2) “closing agreement” as described in Section 7121 of the Code (or
any corresponding or similar provision of state, local or foreign income Tax
Law) executed on or prior to the Closing Date, (3) intercompany transactions or
excess loss account described in the Treasury Regulations under Section 1502
of the Code (or any corresponding or similar provision of state, local or
foreign income Tax law), (4) installment sale or open transaction disposition
made on or prior to the Closing Date, (5) item having been reported on the
completed contract method of accounting or the percentage of completion method
of accounting, (6) prepaid amount received on or prior to the Closing Date, or
(7) other action taken prior to the Closing Date; or (C) has distributed stock
of another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part
by Section 355 or Section 361 of the Code.

 

(vi)                    There is no contract, plan or arrangement
that, individually or collectively, could give rise to the payment of any
amount that would not be deductible by the Company, or any of its Subsidiaries
or Purchaser (or affiliates of Purchaser) by reason of Section 280G of the
Code.

 

(vii)                 Since January 1, 1998, Seller has been,
and currently is, the common parent of the affiliated group (within the meaning
of Section 1504 of the Code) of which the Company and each Subsidiary that
is organized within the United States are members.

 

2.7                                 Intellectual
Property.

 

(a)                                  Definitions.  For the purposes of this
Agreement, the following terms have the following meanings:

 

(i)                           “Intellectual
Property” shall mean any or all of the following and all rights in,
arising out of, or associated therewith (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, (ii) all inventions (whether patentable or
not), invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, processes, designs, techniques, research and
development projects, technical data and customer lists, and all documentation
relating to any of the foregoing, (iii) works of authorship in any media,
and all copyrights, copyrights registrations and applications therefor, and all
other rights, including authors’ or moral rights, corresponding thereto
throughout the world, (iv) all computer software, including all source
code, object code, firmware, development

 

12

 

tools, files, records and data, and all media on which any of the
foregoing is recorded, (v) all industrial designs and any registrations
and applications therefor throughout the world, (vi) all trade names, trade
dress, logos, common law trademarks and service marks, Internet domain names
and registration therefor, trademark and service mark registrations and
applications therefor throughout the world and all goodwill associated
therewith, (vii) all databases and data collections and all rights therein
throughout the world, (viii) all internet web pages, websites and all
intellectual property used in connection with or contained in all versions of
the Company’s website, and (ix) any similar or equivalent rights to any of the
foregoing anywhere in the world.

 

(ii)                        “Company
Intellectual Property” shall mean any Intellectual Property that is
owned by, or exclusively licensed to, the Company.

 

(iii)                     “Registered
Intellectual Property” shall mean all United States, international
and foreign (i) patents and design or utility patent applications,
(ii) registered trademarks, applications to register trademarks,
intent-to-use applications, or other registrations or applications related to
trademarks, (iii) registered Internet domain names and applications to register
Internet domain names and (iv) registered copyrights and applications for
copyright registration.

 

(iv)                    “Company
Registered Intellectual Property” shall mean all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or any of
its Subsidiaries.

 

(b)                                 Registered Intellectual Property; Proceedings.  Section 2.7(b)
of the Seller Disclosure Letter sets forth as of the close of business on the
date hereof all (i) Company Registered Intellectual Property and
specifies, where applicable, the jurisdictions in which each such item of
Company Registered Intellectual Property has been issued or registered and
(ii) proceedings or actions before any Governmental Entity (including the
United States Patent and Trademark Office (the “PTO”) or equivalent authority anywhere else in the world)
related to any of the Company Registered Intellectual Property.

 

(c)                                  No Order.  No Company Intellectual
Property owned by the Company and, to the Knowledge of Seller, no Company
Intellectual Property exclusively licensed to the Company, is subject to any
outstanding order, injunction or stipulation entered or imposed by any
Governmental Entity restricting in any manner the use, transfer, or licensing
thereof by Company or any of its Subsidiaries, or which may affect the
validity, use or enforceability of such Company Intellectual Property.

 

(d)                                 Registration.  All
necessary registration, maintenance and renewal fees currently due in
connection with Company Registered Intellectual Property have been made and all
necessary documents, recordations and certificates in connection with such
Company Registered Intellectual Property have been filed with the relevant
Governmental Authorities in the United States or those foreign jurisdictions in
which applications for Company Registered Intellectual Property have been filed, as the case may be, for
the purposes of prosecuting, maintaining or perfecting such Company Registered
Intellectual Property, except where such failures would not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect on the
Company.

 

13

 

(e)                                  Ownership of Intellectual Property; Absence
of Liens. The Company or its
Subsidiaries owns all right, title and interest in and to each material item of
Company Intellectual Property (excluding Company Intellectual Property used
pursuant to an exclusive license) free and clear of any Liens (excluding
non-exclusive licenses and related restrictions granted in the ordinary course
of business); provided, however,
that for purposes of this Section 2.7(e), the term “Company Intellectual
Property” shall not include trade secrets.

 

(f)                                    Licenses.  Other than “shrink wrap” and
similar widely available commercial “off the shelf” end-user licenses, to the
Knowledge of Seller, Section 2.7(f) of the Seller Disclosure Letter sets
forth a list as of the date hereof of all agreements, contracts, subcontracts,
settlement agreements, leases, instruments, notes, warranties, purchase orders,
licenses, sublicenses or other legally binding commitment (each, a “Contract”) (including any Contracts whereby
Company Intellectual Property is tied, bundled or co-branded with any
third-party Intellectual Property) that are material and to which the Company or
any of its Subsidiaries is a party pertaining to any Company Intellectual
Property or third-party Intellectual Property.

 

(g)                                 No Conflict.  All material Contracts
relating to any of (i) Company Intellectual Property, (ii) Intellectual
Property of a third party licensed to the Company or any of its Subsidiaries
(other than commercial off-the-shelf licenses), or (iii) Intellectual Property
licensed by the Company or any of its Subsidiaries to a third party are in full
force and effect. The consummation of the transactions contemplated by this
Agreement will neither violate nor result in the material breach, or
modification, of, or the cancellation, termination, suspension of, or
acceleration of any payments with respect to, such material Contracts. Each of
the Company and its Subsidiaries is in compliance with, and has not breached
any term of any such material Contracts and, to the Knowledge of Seller, all
other parties to such material Contracts are in compliance with, and have not
breached any term of, such material Contracts. Following the Closing Date, the
Company will be permitted to exercise all of the Company’s and its Subsidiaries’
rights under such Contracts to the same extent the Company and its Subsidiaries
would have been able to had the transactions contemplated by this Agreement not
occurred and without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments which the Company or any of its
Subsidiaries would otherwise be required to pay.

 

(h)                                 No Infringement.  To
the Knowledge of Seller, the operation of the business of the Company and its
Subsidiaries, as such business currently is conducted, does not infringe or
misappropriate the Intellectual Property of any third party.

 

(i)                                     No Notice of Infringement. 
Neither the Company nor any of its Subsidiaries has received written
notice from any third party that the operation of the business of the Company
or any of its Subsidiaries or any act, product or service of the Company or any
of its Subsidiaries, infringes, violates or misappropriates the Intellectual
Property of any third party.

 

(j)                                     No Third Party Infringement.  To
the Knowledge of Seller, no Person is infringing or misappropriating any
Company Intellectual Property.

 

(k)                                  Protection of Intellectual Property.  To
the Knowledge of Seller (i) none of the Company’s trade secrets have been used,
disclosed or appropriated to the detriment of the

 

14

 

Company
or any Subsidiary for the benefit of any Person other than the Company or such
Subsidiary and (ii) no employee, independent contractor or agent of the Company
or any Subsidiary has misappropriated any trade secrets or other confidential
information of any other Person in the course of the performance of his or her
duties as an employee, independent contractor or agent of the Company or any
Subsidiary.  The Company and its
Subsidiaries have taken commercially reasonable steps to protect and maintain
the confidentiality of all trade secrets owned by the Company and its
Subsidiaries.

 

(l)                                     Source Code.  None of the Persons listed on Section 2.7(l)
of the Seller Disclosure Letter has possession or the right to receive access
or possession of the source code for any material Company Intellectual
Property.

 

2.8                                 Compliance;
Permits.

 

(a)                                  Compliance.  Neither the Company nor any of
its Subsidiaries is, or has been since January 31, 2004, in conflict with,
or in default or in violation of, any Legal Requirement applicable to the
Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries or any of their respective businesses or properties is bound,
except for those conflicts, defaults or violations that, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse Effect
on the Company.  To the Knowledge of
Seller, no investigation or review by any Governmental Entity is pending or has
been threatened against the Company or any of its Subsidiaries.  There is no judgment, injunction, order or
decree binding upon the Company or any of its Subsidiaries that would be
reasonably expected to have a Material Adverse Effect on the Company.

 

(b)                                 Permits.  The Company and its
Subsidiaries hold, to the extent legally required, all permits, registrations,
licenses, variances, clearances, consents, commissions, franchises, exemptions,
orders and approvals from Governmental Entities (“Permits”) except where the failure to hold such Permits would
not be reasonably expected to have a Material Adverse Effect on the Company
(collectively, “Company Permits”).
No suspension or cancellation of any of the Company Permits is pending or, to
the Knowledge of Seller, threatened by any Governmental Entity.  The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure to
so comply would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect on the Company.

 

2.9                                 Litigation.

 

There are no claims, suits,
actions or proceedings (a “Legal Proceeding”)
pending or, to the Knowledge of Seller, threatened against the Seller, the
Company or any of its Subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority or any arbitrator that seek to
restrain or enjoin the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Agreements or would reasonably be expected,
either individually or in the aggregate with all such claims, actions or
proceedings, to have a Material Adverse Effect on the Company.  Section 2.9 of the Seller Disclosure
Letter sets forth each Legal Proceeding pending before any court, governmental
department, commission, agency,

 

15

 

instrumentality or authority or any arbitrator
instituted by or on behalf of the Company or any Subsidiary against any Person.

 

2.10                           Employee Benefit Plans.

 

(a)                                  Schedule.  Section 2.10(a) of the
Seller Disclosure Letter sets forth a list as of the close of business on the
date hereof of the following (i) all severance and employment agreements of the
Company with directors or executive officers, (ii) all severance programs and
policies of each of the Company or its Subsidiaries, (iii) all plans or
agreements of the Company or its Subsidiaries relating to any of their
respective current or former employees, consultants or directors (each, an “Employee”) pursuant to which benefits would
vest or an amount would become payable or the terms of which would otherwise be
materially altered, in any case by virtue of the transactions contemplated by
this Agreement or by the termination of employment or engagement or change in
position of any Employee following or in connection with the consummation of
the transactions contemplated by this Agreement, (iv) all Benefit Plans, and
(v) all Pension Plans.

 

(b)                                 Benefit Plan Compliance.

 

(i)                           For purposes of this Section 2.10, (i) “Benefit Plans” shall mean all “employee
benefit plans” as defied in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”),
and all other material employee benefit arrangements, programs, policies or
payroll practices (other than stock purchase, stock option, phantom stock or
other equity based compensation plans), including, without limitation,
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement, deferred compensation, bonus, hospitalization, medical insurance,
cafeteria, life insurance, tuition reimbursement and scholarship programs
maintained by the Seller, the Company or any Subsidiary and to which
contributions are made by the Seller, the Company or any Subsidiary on behalf
of the Employees, and (ii) “Pension Plans”
shall mean all “employee pension plans”, as defined in Section 3(2) of
ERISA, maintained by the Seller, the Company, the Subsidiaries or any trade or
business (whether or not incorporated) which is or has ever been under control
or treated as a single employer with the Seller or the Company under Section 414(b),
(c), (m) or (o) of the Code (“ERISA Affiliate”)
or to which the Seller, the Company or any ERISA Affiliate has contributed.

 

(ii)                        Each Benefit Plan has been administered,
maintained and operated in all material respects in accordance with its terms
and applicable laws (including ERISA and the Code, and any rules and
regulations promulgated thereunder).

 

(iii)                     None of the Benefit Plans or Pension Plans is
subject to Title IV of ERISA and none of the Company, its Subsidiaries or any
ERISA Affiliate has any liability with respect to any plan subject to Title IV
of ERISA.

 

(iv)                    With respect to each Benefit Plan that is
intended to qualify under Code Section 401(a), such Benefit Plan, and its
related trust, has received, has an application pending or remains within the
remedial amendment period for obtaining, a determination letter from the United
States Internal Revenue Service (“IRS”)
that it is so qualified and that its trust is

 

16

 

exempt from tax under Section 501(a) of the Code and, to the
Seller’s Knowledge, no facts or set of circumstances exist that could
reasonably be expected to cause such plan and related trust to be disqualified
or to be so non-exempt from Tax.

 

(v)                       There has been no violation of ERISA or the
Code with respect to the filing of applicable documents, notices or reports
(including, but not limited to, annual reports filed on IRS Form 5500)
regarding the Benefit Plans with the Department of Labor and the IRS, or the
furnishing of such required documents to the participants or the beneficiaries
of the Benefit Plans that would result in a material liability to the Company
or any Subsidiary.

 

(vi)                    There are no pending material actions, claims
or lawsuits which have been asserted, instituted or, to the Knowledge of
Seller, threatened, against the Benefit Plans, the assets of any of the trusts
under the Benefit Plans or the sponsor or the administrator of the Benefit
Plans, or, to the Seller’s Knowledge, against any fiduciary of the Benefit
Plans with respect to the operation of the Benefit Plans (other than routine
benefit claims).

 

(vii)                 Except as may be required under 4980B of the
Code or Section 601 of ERISA, no Benefit Plan provides retiree health or
life insurance benefits.  The Company and
its Subsidiaries have reserved the right to amend, terminate or modify at any
time all Benefit Plans providing for retiree health or life insurance benefits,
and there have been no written communications to Employees that could
reasonably be interpreted to promise or guarantee such Employees retiree health
or life insurance or other retiree death benefits on a permanent basis.

 

(c)                                  Multiemployer Plans.  None
of the Benefit Plans or Pension Plans is a “multiemployer plan,” as defined in Section 3(37)
of ERISA (“Multiemployer Plan”).  None of the Company, its Subsidiaries or any
ERISA Affiliate has incurred any liability due to a complete or partial
withdrawal from a Multiemployer Plan or due to the termination or
reorganization of a Multiemployer Plan, except for any such liability which has
been satisfied in full, and no events have occurred and no circumstances exist
that could reasonably be expected to result in any such liability to the
Company, its Subsidiaries or any ERISA Affiliate.

 

(d)                                 Labor.  Neither the Company nor any of
its Subsidiaries is a party to any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement is
being negotiated by the Company or any of its Subsidiaries.  There is no labor dispute, strike or work
stoppage against the Company or any of its Subsidiaries pending or, to the
Knowledge of Seller, threatened or reasonably anticipated which may materially
interfere with the respective business activities of the Company or any of its
Subsidiaries.  There are no actions,
suits, claims, labor disputes or grievances pending, or, to the Knowledge of
the Seller, threatened relating to any labor, safety or discrimination matters
involving any Employee, including, without limitation, charges of unfair labor
practices or discrimination complaints, which, if adversely determined, would,
individually or in the aggregate, be material to the Company.

 

(e)                                  Employment Matters.  The
Company and each of its Subsidiaries is in compliance with all applicable
foreign, federal, state and local laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment, employee

 

17

 

safety
and wages and hours, except where non-compliance would not be reasonably
expected to have a Material Adverse Effect on the Company.

 

2.11                           Title to Properties.

 

(a)                                  Owned Real Property.  Schedule 2.11(a) contains a true
and complete description of all real property owned by the Company or any of
its Subsidiaries (the “Owned Real Property”). 
With respect to each such parcel of Owned Real Property, except as otherwise
disclosed on Sections 2.11(a) and 2.11(b) of the Seller Disclosure Letter, (i)
there are no leases, subleases, options or other agreements, written or oral,
granting to any party or parties the right to obtain title of such parcel or
any portion thereto (except for which public notice has been provided or has
been disclosed in a survey) and (ii) to the Seller’s Knowledge, there are no
parties (other than the Company and/or any of its Subsidiaries and/or their
contractors, subcontractors, agents, sublessees, licensees, customers and
invitees) who have leases, subleases, options or other agreements, written or
oral, granting to any party or parties the right of use or occupancy and/or who
are in possession of or who are using any such parcel.  To the Seller’s
Knowledge, all improvements on the Owned Real Property conform in all material
respects with applicable laws and ordinances, and neither the Seller nor any of
its Affiliates has received any written notice of any violation of any such
laws or ordinances.  To Seller’s Knowledge, all improvements on the Owned
Real Property are in reasonable condition and repair and have not suffered any
casualty or other material damage that has not been repaired in all material
respects, except for ongoing and routine maintenance and repair
requirements.  To the Seller’s Knowledge, there is no material latent or
patent structural, mechanical or other significant defect, soil condition or
deficiency in the improvements located on the Owned Real Property.

 

(b)                                 Leased Real Property.  Section 2.11(b)
of the Seller Disclosure Letter sets forth a list as of the close of business
on the date hereof of all real property currently leased or subleased to or by
the Company or any of its Subsidiaries. 
All such current leases and subleases are valid, binding, enforceable
and in full force and effect, and there is not, under any of such leases or
subleases, any existing material default or, to the Seller’s Knowledge, any
event which with notice or lapse of time, or both, would constitute a material
default.  The Seller has made available
to the Purchaser complete and accurate copies of such leases and subleases,
each as amended to date.

 

(c)                                  Valid Title.  The Company and each of its
Subsidiaries has good and valid title to, or, in the case of leased properties
and assets, valid leasehold interests in, all of its tangible properties and
assets, real, personal and mixed, used or held for use in its business, free
and clear of any Liens, except (i) Liens imposed by law in respect of
obligations not yet due which are owed in respect of Taxes, (ii) mechanic’s and
material man’s liens incurred in the ordinary course of business, and (iii)
Liens which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the present
use, of the property subject thereto or affected thereby.

 

(d)                                 Sufficiency of Assets.  The
properties and assets now owned, licensed or leased by the Company and its
Subsidiaries are sufficient to carry on the business of the Company and its
Subsidiaries as presently conducted.

 

18

 

2.12                           Environmental
Matters.

 

(a)                                  Environmental Laws. 
Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, (i) neither the
Company nor its Subsidiaries is subject to any action, claim, suit, proceeding,
or investigation alleging the violation of, or liability under, any law
(including common law), statute, ordinance, regulation, order or similar
requirement of any Governmental Entity or other requirement of law regulating,
relating to or imposing liability or standards of conduct concerning protection
of human health or the environment, including any of the foregoing to the
extent such matters are addressed in any product safety or worker health or
safety laws including the Occupational Safety and Health Act of 1970 and any
similar state or local laws, rules or regulations (“Environmental Law”), (ii) neither the Company nor any of its
Subsidiaries is a party to any agreement concerning, nor have such entities
received any notice, demand, request for information, summons or order from any
Person relating to, actual or potential liability under any Environmental Law
or the presence or release of any Hazardous Materials, and (iii) no underground
storage tanks and no amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law or regulation
to be radioactive, toxic, hazardous or otherwise a danger to health or the
environment or that could reasonably be expected to result in liability to the
Company or any of its Subsidiaries under any applicable Environmental Law,
including PCBs, asbestos, petroleum, toxic mold, urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource
Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and janitorial supplies
(“Hazardous Materials”), are
present as a result of the actions or omissions of the Company or any of its
Subsidiaries or any Affiliate of the Company, or, to the Knowledge of the
Seller, any other Person, in, on or under any real property currently or
previously owned, leased or operated by the Company or any of its Subsidiaries
(including the property that is leased by the Company or any of its
Subsidiaries as of the close of business on the date hereof), including the
land and the improvements, ground water and surface water thereof, in violation
of any Environmental Law.

 

(b)                                 Hazardous Materials Activities. 
Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, neither the Company
nor any of its Subsidiaries has transported, stored, used, manufactured,
disposed of or arranged for the disposal of, released, removed or exposed its
Employees or others to Hazardous Materials or manufactured any product
containing any Hazardous Material in violation of any Environmental Law.

 

(c)                                  Environmental Reports. 
Seller has made available to Purchaser copies of all studies, audits,
assessments or investigations concerning compliance with, or liability or
obligations under, Environmental Laws affecting the Company or any of its
Subsidiaries with respect to real property currently owned or leased by the
Company or its Subsidiaries and that are in the
possession or control of Seller or the Company.

 

19

 

2.13                           Contracts.

 

(a)                                  Material Contracts.  For
purposes of this Agreement, “Company Material
Contract” shall mean:

 

(i)                           any employment or consulting Contract with
any executive officer or other employee of the Company or any Subsidiary,
involving an annual salary in excess of one hundred fifty thousand dollars
($150,000);

 

(ii)                        any Contract (A) containing any covenant
limiting in any material respect the right of the Company or any of its
Subsidiaries to engage in any line of business or operate in any jurisdiction
after the Closing Date, or compete with any Person in any line of business or
in any jurisdiction after the Closing Date or (B) granting exclusive sales,
marketing or licensing rights in any territory or region or “most favored
nations” or similar form of pricing protections;

 

(iii)                     any Contract relating to the disposition or
acquisition by the Company or any of its Subsidiaries of a material amount of
assets not in the ordinary course of business or pursuant to which the Company
or any of its Subsidiaries has or had any ownership interest in any other
Person or other business enterprise other than its Subsidiaries (A) dated after
January 31, 2004 or (B) that contains currently effective indemnification
or purchase price adjustment, holdback or escrow obligations;

 

(iv)                    any dealer, distributor, joint marketing or
development agreement under which the Company or any of its Subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled by the Company or its Subsidiaries
without material penalty, payment or continuing obligation upon notice of
ninety (90) days or less;

 

(v)                       any Contract containing any support,
maintenance or service obligation on the part of the Company or any of its
Subsidiaries, including, without limitation, any Contract with any Regional
Bell Operating Company or Governmental Entity, that is expected to involve
annual revenues to the Company or any Subsidiary in excess of seven million
five hundred thousand dollars ($7,500,000);

 

(vi)                    any mortgages, indentures, guarantees, loans
or credit agreements, security agreements or other Contracts relating to the
borrowing of money or extension of credit in a principal amount in excess of
one million dollars ($1,000,000) that is outstanding or may be incurred on the
terms thereof, other than accounts receivable and payable in the ordinary
course of business;

 

(vii)                 any Contract that relates to partnership,
joint venture or similar arrangement with any other Person that, in each case,
involves an investment by the Company in excess of one million dollars
($1,000,000);

 

(viii)              Any Contract required to be disclosed on Section 2.7(f)
of the Seller Disclosure Letter; or

 

20

 

(ix)                      any other agreement, contract or commitment
not otherwise defined in subsections (i) - (viii) above that involves a payment
to or from the Company or any Subsidiary in an amount in excess of one million
dollars ($1,000,000) over the term of such Contract (including all potential
extensions thereof).

 

(b)                                 Schedule.  Section 2.13(b) of the
Seller Disclosure Letter sets forth a list of all Company Material Contracts to
which the Company or any of its Subsidiaries is a party or is bound by as of
the close of business on the date hereof.

 

(c)                                  No Breach.  All Company Material Contracts
are valid and in full force and effect, except to the extent they have
previously expired in accordance with their terms.  To the Knowledge of the Seller, all Company
Material Contracts are enforceable against each of the other parties
thereto.  Neither the Company nor any of
its Subsidiaries has received written notice or, to the Knowledge of the
Seller, oral notice, alleging (i) any violation by any Person thereto of any
provision of a Company Material Contract or (ii) any failure to perform an act
which, with or without notice, lapse of time or both, would constitute a
default under the provisions of any Company Material Contract, and no event has
occurred or, to the Knowledge of the Seller, is alleged to have occurred which
with or without notice, lapse of time or both, except in each case for those
violations and defaults which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on to the Company.

 

2.14                           Insurance.  Section 2.14 of the Seller Disclosure
Letter lists all policies of liability, fire, casualty, business interruption,
workers’ compensation and other forms of insurance insuring the Company and its
Subsidiaries and their respective assets, properties and operations.  All such policies are in full force and
effect.  None of the Seller, the Company
or any Subsidiary has received written notice (A) of cancellation or adverse
modification of any such insurance, or (B) from any of their respective brokers
or carriers that such broker or carrier will not be willing or able to renew
their existing coverage.  None of Seller,
the Company or any Subsidiary is in material default under any provisions of
any such policy of insurance.

 

2.15                           Transactions with Seller and
Affiliates.  Neither the Company nor any of its Subsidiaries is a party to any
material agreements or arrangements with the Seller or any Affiliate of the
Seller (other than the Company and its Subsidiaries), including, but not
limited to, any material agreement or arrangement under which the Company or
any Subsidiary (i) leases any real or personal property (either to or from such
Person), (ii) licenses technology (either to or from such Person), (iii) is obligated
to purchase any tangible or intangible asset from or sell such asset to such
Person, (iv) purchases or receives products or services from such Person, or
(v) pays or receives commissions, rebates or other payments.

 

2.16                           Brokers and Finders.  Except
for J.P. Morgan Securities Inc., none of Seller, the Company, or any of the
Company’s Subsidiaries has employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements who would be entitled to a broker’s, finder’s or
similar fee or commission in connection therewith or upon the consummation
thereof that would be payable by the Company or the Subsidiaries.  The Seller is solely responsible for such
fees and expenses of J.P. Morgan Securities Inc.

 

21

 

2.17                           Seller Organization, Standing and Power;
Charter Documents

 

(a)                                  Organization; Standing and Power. 
Seller (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and (ii) has the requisite
power and authority to own, lease and operate its properties and to carry on
its business as now being conducted.

 

(b)                                 Charter Documents. 
Seller has delivered or made available to Purchaser a true and
correct copy of the certificate of incorporation and bylaws of Seller, each as
amended to date.

 

ARTICLE III

REPRESENTATIONS
AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller as
follows:

 

3.1                                 Organization;
Standing and Power;
Charter Documents.

 

(a)                                  Organization; Standing and Power. 
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, has the requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification necessary.

 

(b)                                 Charter Documents. 
Purchaser has delivered or made available to Seller a true and correct
copy of the certificate of incorporation and bylaws, or like organizational
documents, of Purchaser, each as amended to date (collectively, the “Purchaser Charter Documents”).  Purchaser is not in material violation of any
of the provisions of the Purchaser Charter Documents.

 

3.2                                 Authority;
Non-Contravention;
Necessary Consents.

 

(a)                                  Authority.  Purchaser has all requisite
corporate power and authority to enter into this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby.  The
execution and delivery of this Agreement and the Ancillary Agreements to which
Purchaser is a party, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of Purchaser and no other corporate proceedings, approvals or
consents on the part of Purchaser or its stockholders are necessary to
authorize the execution and delivery of this Agreement or the Ancillary
Agreements to which it is a party or to consummate the transactions
contemplated hereby and thereby.  This
Agreement has been, and upon execution and delivery, the Ancillary Agreements
to which it is a party will be, duly executed and delivered by Purchaser, and,
assuming due execution and delivery by Seller, constitutes, and, upon execution
and delivery the Ancillary Agreements to which it is a party will constitute,
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency,

 

22

 

reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) general principles of equity.

 

(b)                                 Non–Contravention.  The
execution and delivery by Purchaser of this Agreement and the Ancillary
Agreements to which it is a party does not, and performance of this Agreement
and the Ancillary Agreements to which Purchaser is a party will not
(i) conflict with or violate the Purchaser Charter Documents, (ii) subject
to compliance with the requirements set forth in Section 3.2(c), conflict
with or violate any material Legal Requirement applicable to Purchaser or by
which Purchaser or any of its properties is bound, or (iii) result in any
material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or
materially impair Purchaser’s rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, material
amendment, acceleration or cancellation of, or result in the creation of a
material Lien on any of the properties or assets of Purchaser or any of its
subsidiaries pursuant to, any Contract to which Purchaser is a party the
termination or breach of which would be reasonably expected to have a material
adverse effect on the ability of Purchaser to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements to which it is a
party.

 

(c)                                  Necessary Consents.  No
consent, approval, order or authorization of, or registration, declaration or
filing with any Governmental Entity is required to be obtained or made by
Purchaser in connection with the execution and delivery of this Agreement and
the Ancillary Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except for the Necessary Consents.

 

3.3                                 Availability
of Funds.

 

(a)                                  Purchaser has received a commitment letter
dated as of November 17, 2004 from JPMorgan Chase Bank, N.A., J.P. Morgan
Securities Inc., Bear Stearns Corporate Lending Inc. and Bear, Stearns &
Co. Inc. pursuant to which such parties have committed, subject to the terms
and conditions set forth therein, to provide to the Purchaser the $640,000,000
Senior Secured Credit Facilities and $410,000,000 in a Senior Subordinated
Bridge Facility (the “Commitment Letter”),
to complete the transaction contemplated hereby (the “Debt Financing”).  A true and complete copy of the Commitment
Letter has been made available to Seller on or prior to the date hereof.

 

(b)                                 Purchaser has received an executed equity
financing letter from its stockholders as of the date hereof, pursuant to which
the stockholders have agreed to provide, in the aggregate, on the terms set
forth therein, Four Hundred Forty Million Dollars ($440,000,000) of equity
financing to Purchaser.  A true and
complete copy of such letter has been made available to Seller on or prior to
the date hereof.

 

(c)                                  Upon satisfaction of the conditions set forth
in the Commitment Letter, at the Closing Date, the Purchaser will have
sufficient funds to consummate the transactions contemplated hereby.  To the knowledge of Purchaser, no event or
circumstances has occurred or exists that would be reasonably likely to cause a
condition under the Commitment Letter to not be satisfied prior to Closing.

 

23

 

3.4                                 Litigation.

 

As of the close of business on the date hereof,
there are no claims, suits, actions or proceedings pending or, to the knowledge
of Purchaser, threatened against Purchaser or any of its subsidiaries, before
any court, governmental department, commission, agency, instrumentality or
authority, or any arbitrator that seeks to restrain or enjoin the consummation
of the transactions contemplated hereby.

 

3.5                                 Brokers
and Finders.

 

The Purchaser has not
employed any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements who
would be entitled to a broker’s, finder’s or similar
fee or commission in connection therewith or upon the consummation thereof.

 

ARTICLE IV

INTERIM
OPERATIONS OF THE COMPANY

 

4.1                                 Conduct
of Business by the Company.

 

(a)                                  Ordinary Course. 
During the period from the date hereof and continuing until the earlier
of the termination of this Agreement pursuant to its terms or the Closing Date,
Seller shall cause the Company and each of its Subsidiaries to, except as
otherwise expressly contemplated by this Agreement or the Ancillary Agreements
or as set forth in Section 4.1 of the Seller Disclosure Letter or to the
extent that Purchaser shall otherwise consent in writing (which consent shall
not be unreasonably withheld or delayed), (i) carry on its business in the
usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and in compliance with all applicable laws and
regulations, (ii) pay its debts and Taxes when due, (iii) pay or perform other
material obligations when due, (iv) use commercially reasonable efforts to
preserve intact its present business organization, including operations,
relationships with lessors, licensors, suppliers, key employees and customers,
(v) continue to make capital expenditures consistent with past practices and
subject to the budget referenced in Section 4.1(a) of the Seller
Disclosure Letter, and (vi) enter into the Cross License Agreement in
substantially the form attached hereto as Exhibit C.

 

(b)                                 Required Consent.  In
addition, without limiting the generality of Section 4.1, except as
permitted or contemplated by the terms of this Agreement, and except as
provided in Section 4.1 of the Seller Disclosure Letter, without the prior
written consent of Purchaser (which consent shall not be unreasonably withheld
or delayed), during the period from the date hereof and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Closing Date, Seller shall not permit the Company or any Subsidiary to do any
of the following:

 

(i)                           Cause, permit, adopt or propose any
amendments to the Company Charter Documents or any of the Subsidiary Charter
Documents;

 

(ii)                        Adopt a plan of complete or partial
liquidation or dissolution;

 

(iii)                     Declare, set aside or pay any dividends on or
make any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock

 

24

 

or equity interests or split, combine or reclassify any capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any capital stock or equity interests, other
than any such transaction between the Company and a wholly-owned Subsidiary of
the Company that remains a wholly-owned Subsidiary of the Company after
consummation of such transaction in the ordinary course of business and
consistent with past practices;

 

(iv)                    Purchase, redeem or otherwise acquire,
directly or indirectly, any shares of its capital stock or equity interests;

 

(v)                       Issue, deliver, sell, authorize, pledge or
otherwise encumber any shares of capital stock or equity interests, or any
securities convertible into shares of capital stock or equity interests, or
subscriptions, rights, warrants or options to acquire any shares of capital stock
or equity interests or any securities convertible into shares of capital stock
or equity interests, or enter into other agreements or commitments of any
character obligating it to issue any of the foregoing;

 

(vi)                    Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity or voting interest in or a
portion of the assets of, or by any other similar manner, any business or
any Person or division thereof, or otherwise acquire or agree to acquire any
assets or rights outside the ordinary course of business or which are material
to the business of the Company and its Subsidiaries;

 

(vii)                 Sell, lease, license, transfer, encumber or
otherwise dispose of any properties, rights or assets, except (i) the sale,
lease or disposition (other than through licensing) to third parties of
inventory in the ordinary course of business and of tangible property or assets
that are not material to the business of the Company and its Subsidiaries or
(ii) non-exclusive licenses of current Company products in the ordinary course
of business and consistent with past practices;

 

(viii)              Make any loans, advances or capital
contributions to, or investments in, any other Person, other than
(i) loans or investments by the Company or a Subsidiary to or in the Company
or a Subsidiary or (ii) employee loans or advances made in the ordinary
course of business and consistent with past practices;

 

(ix)                      Except as required by GAAP as concurred in by
its independent auditors, make any material change in its methods or principles
of accounting since the date of the Company Balance Sheet;

 

(x)                         Make, change or rescind any material Tax
election or accounting method, file any material amended Tax Return, enter into
any agreement relating to Taxes, surrender any material right to claim for a
Tax refund, settle or compromise any material income Tax liability or consent
to any extension or waiver of any limitation period with respect to material
Taxes, in each case, if such action could have an adverse effect on the Company
or any Subsidiary in a Tax period (or portion thereof) that ends after the
Closing Date;

 

(xi)                      Revalue any of its assets other than in the
ordinary course of business and other than as required by GAAP;

 

25

 

(xii)                   Grant any exclusive rights with respect to
any Company Intellectual Property other than in the ordinary course of business
and consistent with past practices;

 

(xiii)                Enter into or renew any Contracts containing,
or otherwise subject the Company or any Subsidiary following the Closing to,
any non-competition, exclusivity or other material restrictions on the Company,
any Subsidiary or any of their respective businesses, other than in the
ordinary course of business and consistent with past practices;

 

(xiv)               Other than in the ordinary course of business
and consistent with past practices, and except as otherwise contemplated by
this Agreement, (A) enter into any Company Material Contract that is of the
type enumerated in Sections 2.13(a)(v), (viii) or (ix), or (B) modify,
terminate, amend or grant any waiver in respect of any material term of any
Company Material Contract that is in effect as of the date hereof and that is
of the type enumerated in Sections 2.13(a)(v), (viii) or (ix);

 

(xv)                  Take any action that would or is reasonably
likely to result in any of the conditions to the sale and transfer of the
Shares set forth in Article VI not being satisfied or that would impair
the ability of Seller to consummate the transactions contemplated hereby in
accordance with the terms hereof or materially delay such consummation;

 

(xvi)               Incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person other than a Subsidiary,
issue or sell any debt securities or options, warrants, calls or other rights
to acquire any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another Person other than a Subsidiary, or
enter into any arrangement having the economic effect of any of the foregoing,
other than in the ordinary course of business and consistent with past
practices;

 

(xvii)            Enter into any new (or amend any existing)
Benefit Plan or any new (or amend any existing) employment or severance
agreement, grant any general increase in the compensation of Employees
(including any increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or grant any increase in the compensation payable, or to
become payable, to any Employee, except in each case either in accordance with
pre-existing contractual provisions or in the ordinary course of business and
consistent with past practices;

 

(xviii)         (A)  Fail to diligently pursue
any material right or claim of the Company or any of its Subsidiaries,
including any material claims relating to the enforcement of the Company rights
with respect to any Intellectual Property, (B) settle any pending or threatened
Legal Proceedings, other than any Patent Claims or those Legal Proceedings set
forth on Section 2.9 of the Seller Disclosure Letter, directly involving
(1) any material restrictions upon any of its operations or material assets, or
(2) the transactions contemplated by this Agreement and the Ancillary
Agreements, (C) cancel any material liabilities owed to, or waive any material
right or claim of, the Company or any Subsidiary, other than in the ordinary
course of business and consistent with past practices, or (D) voluntarily allow
the lapse of any of its material rights of ownership or use of any material
Company Intellectual Property;

 

26

 

(xix)                 Deviate in any material respect from existing
policies and procedures with respect to billing and collection services of the
Company or its Subsidiaries, other than in the ordinary course of business and
consistent with past practice;

 

(xx)                    Enter into any Contract that provides
deferred revenue to be recorded by the Company or any Subsidiary for longer
than a 12-month period after the date of such Contract; or

 

(xxi)                 Agree in writing or otherwise to take any of the
actions described in (i) through (xx) above.

 

ARTICLE V

ADDITIONAL
AGREEMENTS

 

5.1                                 Acquisition
Proposals.

 

Seller agrees that none of
Seller, the Company nor any of its Subsidiaries, nor any of their respective
officers and directors, shall, and that Seller shall use commercially
reasonable efforts to cause each of Seller’s, the Company’s and its
Subsidiaries’ employees, agents and representatives (including any investment
banker, attorney or accountant retained by Seller, the Company or its
Subsidiaries) not to (and shall not authorize any of them to) directly or
indirectly (i) solicit, initiate, knowingly encourage or knowingly
facilitate any inquiries with respect to, or the making, submission or
announcement of, any offer or proposal for an Acquisition (as defined below) of
the Company (an “Acquisition Proposal”),
(ii) participate in any discussions or negotiations regarding, or furnish
to any Person any nonpublic information with respect to, any Acquisition
Proposal, (iii) engage in discussions with any Person with respect to any
Acquisition Proposal, except as to the existence of these provisions, or
(iv) enter into any letter of intent or similar document or any contract
agreement or commitment contemplating any Acquisition Proposal or transaction contemplated
thereby.  Seller, the Company and its
Subsidiaries will cease any and all existing activities, discussions or
negotiations with any third parties conducted heretofore with respect to any
Acquisition Proposal, and, promptly after the Closing, will request in writing
the return or destruction of any confidential information provided to such
third party, in accordance with the terms of any confidentiality agreement with
such third party.  For purposes of this Section 5.1,
“Acquisition” shall mean any of
the following transactions (other than the transactions contemplated by this
Agreement) (i) a merger, consolidation, business combination or similar
transaction involving the Company or any Subsidiary, (ii) a sale or other
disposition by the Company of all or a substantial part of the assets of the
Company, or (iii) the acquisition by any Person or group, directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of any shares of capital stock or equity interests of the Company.

 

5.2                                 Confidentiality; Access to Information.

 

(a)                                  Confidentiality.

 

(i)                           The parties acknowledge that the
Confidentiality Agreements have been previously executed and will continue in
full force and effect in accordance with its terms, and each of Seller and
Purchaser will hold, and will cause its respective directors, officers,
employees, agents and advisors (including attorneys, accountants, consultants,
bankers and

 

27

 

financial advisors) to hold, any  information
regarding the other party confidential in accordance with the terms of the
Confidentiality Agreement.

 

(ii)                        Each of the parties hereto shall (and shall
cause their respective Affiliates to) keep confidential for a period of three
(3) years from the date of initial disclosure all “Proprietary Information” (as defined in the Confidentiality
Agreements, mutatis mutandis)
obtained from the other party or its Affiliates or representatives (A) pursuant
to the negotiation and execution of this Agreement and the Ancillary Agreements
or the consummation of the transactions contemplated hereby and thereby, and
(B) in connection with any matters set forth in Sections 5.4, 5.6 through 5.12
(inclusive) and Article VII, and shall, during such time, use reasonable
efforts to protect the confidential nature of such Proprietary Information.

 

(iii)                     At the Closing, Seller shall assign to
Purchaser, to the extent assignable, its rights under any confidentiality
agreements between Seller and Persons other than the Purchaser or its
Affiliates that were entered into in connection with, or relating to, a
possible sale of the Company, any of its Subsidiaries or any of their
respective businesses or assets, including, to the extent assignable, the right
to enforce all terms of such confidentiality agreements.

 

(b)                                 Access to Information. 
Seller shall, and shall cause the Company and the Subsidiaries to,
afford Purchaser and Purchaser’s accountants, counsel, financial advisors,
auditors, and other representatives reasonable access to the properties, books,
records, personnel and independent auditors of the Company and its Subsidiaries
(including the books, records, financial statements and personnel of Seller,
but only to the extent related to the Company and its Subsidiaries) during the
period prior to the Closing Date to obtain all information concerning their
respective businesses, liabilities, obligations, assets and other rights,
including the status of product development efforts, properties, results of
operations and personnel for purposes of this Agreement and the Ancillary
Agreements, as Purchaser may reasonably request.  Notwithstanding the foregoing, Seller, the
Company and its Subsidiaries may restrict the foregoing access to the extent
that (i) any Legal Requirement applicable to the Seller, the Company or any of
its Subsidiaries requires such party to restrict or prohibit access to any such
properties or information, (ii) such access would be in breach of any
confidentiality obligation, commitment or provision by which the Seller, the
Company or any of its Subsidiaries is bound or affected, which confidentiality
obligation, commitment or provision shall be disclosed to Purchaser, provided
that disclosure of such obligation, commitment or provision would not itself be
the breach of an obligation or commitment to a third party, or (iii) such
access would be reasonably likely to jeopardize any attorney-client privilege
or other legal privilege.  In addition,
any information obtained from the Seller, the Company or any of its
Subsidiaries pursuant to the access contemplated by this Section 5.2(b)
shall be subject to the Confidentiality Agreements.

 

5.3                                 Public Disclosure.  Without limiting any other provision of this
Agreement, Seller and Purchaser will consult with each other before issuing,
and provide each other the reasonable opportunity to review, comment upon and
concur with, and agree on any press release or public statement with respect to
this Agreement, any of the Ancillary Agreements and the transactions contemplated
hereby and thereby, and will not issue any such press release or make any such
public statement prior to such consultation and agreement, except as may be
required by law or any other applicable national or regional securities
exchange or market.  The Seller shall use

 

28

 

commercially reasonable efforts to cause the Company and its
Subsidiaries to comply with the preceding sentence.  The parties shall agree upon the text of the
joint press release announcing the execution of this Agreement.

 

5.4                                 Regulatory Filings; Reasonable Efforts.

 

(a)                                  Regulatory Filings.  Each
of Seller and Purchaser shall coordinate and cooperate with one another and
shall each use commercially reasonable efforts to comply with, and shall each
refrain from taking any action that would impede compliance with, all Legal
Requirements, and, as promptly as practicable after the date hereof, each of
Seller and Purchaser shall make (or cause to be made) all filings, notices,
petitions, statements, registrations, submissions of information, application
or submission of other documents required by any Governmental Entity in
connection with the transactions contemplated hereby, including
(i) Notification and Report Forms with the United States Federal Trade
Commission (the “FTC”) and the
Antitrust Division of the United States Department of Justice (“DOJ”) as required by the HSR Act,
(ii) any other filing necessary to obtain any Necessary Consent,
(iii) filings under any other comparable pre-merger notification forms
required by the merger notification or control laws of any applicable
jurisdiction, and (iv) any filings required under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, any
applicable state or securities or “blue sky” laws and the securities laws of
any foreign country, or any other Legal Requirement relating to the
transactions contemplated by this Agreement. 
Each of Seller and Purchaser will cause all documents that it is responsible
for filing with any Governmental Entity under this Section 5.4 to comply
in all material respects with all applicable Legal Requirements.

 

(b)                                 Exchange of Information. 
Seller and Purchaser each shall promptly supply the other with any
information which may reasonably be required in order to effectuate any filings
or application pursuant to Section 5.4. 
Except where prohibited by applicable Legal Requirements, and subject to
the Confidentiality Agreements and any joint defense agreement entered into
between the parties or their counsel, each of the Seller and Purchaser shall
consult with the other prior to taking a position with respect to any such
filing, shall permit the other to review and discuss in advance, and consider
in good faith the views of the other in connection with any analyses,
appearances, presentations, memoranda, briefs, white papers, arguments,
opinions and proposals before making or submitting any of the foregoing to any
Governmental Entity by or on behalf of any party hereto in connection with any
investigations or proceedings in connection with this Agreement or the
transactions contemplated hereby (including under any antitrust or fair trade
Legal Requirement), coordinate with the other in preparing and exchanging such
information and promptly provide the other (and its counsel) with copies of all
filings, presentations or submissions (and a summary of any oral presentations)
made by such party with any Governmental Entity in connection with this
Agreement or the transactions contemplated hereby; provided, however, that, with respect to any such filing,
presentation or submission, each of Seller and Purchaser need not supply the
other (or its counsel) with copies (or in case of oral presentations, a
summary) to the extent that (i) any law, treaty, rule or regulation of any
Governmental Entity applicable to such party requires such party or its
subsidiaries to restrict or prohibit access to any such properties or
information or (ii) such access would be in breach of any confidentiality obligation,
commitment or provision by which the Seller, the Company or any of its
Subsidiaries is bound or affected, which confidentiality obligation, commitment
or provision shall be disclosed to Purchaser, provided that disclosure of such
obligation,

 

29

 

commitment
or provision would not itself be the breach of an obligation or commitment to a
third party.

 

(c)                                  Notification.  Each
of Seller and Purchaser will notify the other promptly upon the receipt of
(i) any comments from any officials of any Governmental Entity in
connection with any filings made pursuant hereto, (ii) any request by any
officials of any Governmental Entity for amendments or supplements to any
filings made pursuant to, or information provided to comply in all material
respects with, any Legal Requirements, and (iii) any litigation or
administrative proceeding pending or, to its knowledge, threatened against such
party which challenges the transactions contemplated by this Agreement or any
of the Ancillary Agreements.  Whenever
any event occurs that is required to be set forth in an amendment or supplement
to any filing made pursuant to Section 5.4, Seller or Purchaser, as the
case may be, will promptly inform the other of such occurrence and cooperate in
filing with the applicable Governmental Entity such amendment or supplement.

 

(d)                                 Reasonable Efforts.  Upon
the terms and subject to the conditions set forth herein, each of the parties
agrees to use commercially 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, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement and the Ancillary
Agreements, including using commercially reasonable efforts to accomplish the
following:  (i) the taking of all
reasonable acts necessary to cause the conditions precedent set forth in Article VI
to be satisfied, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents, approvals, orders and authorizations from
Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings
with Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or proceeding
by any Governmental Entity, (iii) the obtaining of all necessary consents,
approvals or waivers from third parties, including the Lenders’ Consent and the
Necessary Consents (provided,
that the parties will discuss in good faith procedures to pursue third party
consents with respect to the transactions contemplated by this Agreement and
the Ancillary Agreements) (it being understood that failure to obtain any one
or more such consents, in and of itself, shall not constitute a failure by
Seller or Purchaser to comply with any of its covenants herein or a failure of
a condition to Closing hereunder), (iv) the defending of any suits,
claims, actions, investigations or proceedings, whether judicial or
administrative, challenging this Agreement, the Ancillary Agreements or the
consummation of the transactions contemplated hereby and thereby, and
(v) the execution or delivery of any additional instruments reasonably
necessary to consummate the transactions contemplated by, and to carry out
fully the purposes of, this Agreement and the Ancillary Agreements.  Promptly after the date hereof, Seller shall
use commercially reasonable efforts to arrange a meeting between each of those
Persons identified on Section 5.4(d)(i) of the Seller Disclosure Letter
and representatives of the Company, Purchaser and Seller to introduce Purchaser
to each such Person.  In the event Seller
or the Company receives any written notice or communication from any of those
Persons identified on Section 5.4(d)(ii) of the Seller Disclosure Letter
relating to the transactions contemplated hereby, or notice of termination or
threatened termination of any Company Material Contract with such Person, then
Seller shall promptly, and in any event within two (2) business days after
receipt thereof, furnish Purchaser with a copy of such notice or communication.

 

30

 

5.5                                 Notification
of Certain Matters.

 

(a)                                  By Seller.  Seller shall give prompt
notice to Purchaser of any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate, or any failure of Seller to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement, in each
case, such that the conditions set forth in Section 6.3(a) or 6.3(b) would
not be satisfied; provided, however,
that the delivery of any notice pursuant to this Section 5.5 will not
limit or otherwise affect the remedies available hereunder to Purchaser or the
representations, warranties or covenants of Seller or the conditions to the
obligations of Purchaser.

 

(b)                                 By Purchaser. 
Purchaser shall give prompt notice to Seller of any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate,
or any failure of Purchaser to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in Section 6.2(a)
or 6.2(b) would not be satisfied; provided,
however, that the delivery of any notice pursuant to this Section 5.5(b)
will not limit or otherwise affect the remedies available hereunder to Seller
or the representations, warranties or covenants of Purchaser or the conditions
to the obligations of Seller.

 

5.6                                 Employee
Benefits.

 

(a)                                  General.  Following the Closing Date,
Purchaser shall provide each participant in the Benefit Plans (including all
dependents) (the “Company Participants”),
for a period of at least one year from the Closing Date, benefits that are
substantially comparable, in the aggregate, to those provided under the Benefit
Plans as in effect as of the Closing Date. 
If Purchaser provides such benefits under Purchaser’s employee benefit
plans or arrangements, (x) each Company Participant shall be given service
credit for eligibility to participate (provided that no retroactive
contributions will be required) and eligibility for vesting under Purchaser
employee benefit plans and arrangements with respect to his or her length of
service with the Company (and its subsidiaries and predecessors) prior to the
Closing Date, and (y) Purchaser shall cause any and all pre-existing condition
(or actively at work or similar) limitations, eligibility waiting periods and
evidence of insurability requirements under any Purchaser employee benefit
plans and arrangements to be waived (other than limitations or waiting periods
that are already in effect with respect to such Company Participant and that
have not been satisfied prior to the Closing Date) with respect to such Company
Participants to the same extent waived or satisfied under comparable Benefit
Plans and shall provide them with credit for any co-payments, deductibles, and
offsets (or similar payments) made during the plan year which includes the
Closing Date for the purposes of satisfying any applicable deductible,
out-of-pocket, or similar requirements under any Purchaser employee benefit
plans or arrangements in which they are eligible in the plan year which
includes participate after the Closing Date.

 

(b)                                 401(k) Plan.  Notwithstanding anything to
the contrary in this Agreement, Purchaser shall cause the Company to continue
the Company’s 401(k) plan on substantially similar terms as are in existence at
the Closing Date for at least one year following the Closing Date; provided, however, that the Company shall
permit the retention or sale of any securities of Seller (shares or interests
in Seller’s Class A Common Stock) in participants’ accounts as of the

 

31

 

Closing
Date through such one-year anniversary but shall not permit the purchase of
additional securities of Seller after the Closing Date.  During this period, Purchaser shall cause the
Company to permit participants to elect to transfer funds from an investment in
Seller’s securities to alternative investments offered in the Company’s 401(k)
plan.  Seller shall continue to manage
all aspects of Seller’s securities, including transacting participant exchanges
in Seller’s securities on the quarterly trade cycle, provided, however, that Seller shall indemnify, save and
hold harmless Purchaser and its affiliates (including, after the Closing, the
Company and its Subsidiaries) for any Losses arising out of or related to the
valuation by Seller of Seller’s securities. 
On the date of Seller’s quarterly trade cycle immediately following the
one-year anniversary of the Closing Date or at such later date as Purchaser (or
the trustee of the 401(k) plan) and Seller shall agree, Purchaser (or the
trustee of the 401(k) plan) shall cause participants in the Company’s 401(k)
plan to offer for sale to Seller any Seller securities in participants’
accounts and shall use commercially reasonable efforts to continue using The
Vanguard Group, Inc. as the plan administrator for the Company’s 401(k) plan.

 

(c)                                  Company Deferral Plans. 
After Closing, Purchaser shall use commercially reasonable efforts to
cause the Company to establish a deferral plan to permit Company employees to
defer compensation, including amounts vested subsequent to Closing under the
Company’s Employee Appreciation Plan.

 

(d)                                 Pension Plan Amendments. 
Seller shall use commercially reasonable efforts to complete any
non-discrimination testing applicable to all Pension Plans prior to the
Closing, and Seller shall not cause or permit any amendments related to such
Pension Plans to be adopted at any time earlier than ten (10) days prior to the
anticipated Closing Date, unless such non-discrimination tests have been
completed and Seller concludes, in its sole and absolute discretion, that such amendments
are necessary in order to comply with applicable law.  Without the prior written consent of
Purchaser, no such amendment to the Pension Plans shall (i) result in an
increase in the “projected benefit obligations” of such plans of more than
$1,500,000 or (ii) require any current cash contribution to the Pension Plan by
the Company or any of its Subsidiaries.

 

5.7                                 Director’s and Officer’s Indemnification.

 

(a)                                  For the period of six (6) years following the
Closing Date, Purchaser will cause the Company to indemnify and hold harmless
each Person who is now, or has been at any time prior to the date of this
Agreement or who becomes prior to the Closing Date, an officer, director or
employee of the Company or any of its Subsidiaries (the “Company Indemnified Parties”) against all
Losses paid in settlement, in each case to the extent actually and reasonably
incurred with the approval of the indemnifying party, which approval shall not
be unreasonably withheld or delayed (the “Company
Indemnified Liabilities”) of or in connection with any claim,
action, suit, proceeding or investigation by reason of the fact that such
Person is or was a director, officer or employee of the Company or any of its
Subsidiaries, whether pertaining to any matter existing or occurring at or
prior to the Closing Date and whether asserted or claimed prior to, or at or
after the Closing Date, including, without limitation, all Company Indemnified
Liabilities based on, primarily arising out of, or primarily relating to this
Agreement or the transactions contemplated hereby (to the extent that such
Losses arose from or are related directly to this Agreement or the transactions
contemplated hereby), in each case to the full

 

32

 

extent
a corporation is permitted by law to indemnify its own directors, officers and
employees (the “Company Indemnified
Proceedings”).  In the event
any Company Indemnified Party is or becomes involved in any Company Indemnified
Proceeding, Purchaser shall, or shall cause the Company to, pay expenses in
advance of the final disposition of any such Company Indemnified Proceeding to
each Company Indemnified Party to the full extent permitted by law upon receipt
of any undertaking contemplated by Section 145 of the Delaware General
Corporation Law (“DGCL”).  Without limiting the foregoing, in the event
any such Company Indemnified Proceeding is brought against any Company
Indemnified Party, (i) the Company Indemnified Party may retain counsel of
its choosing which shall be reasonably satisfactory to the Purchaser and the
Company, (ii) Purchaser shall, or shall cause the Company to, pay all
reasonable and documented fees and expenses of one counsel for all of the
Company Indemnified Parties with respect to each such Company Indemnified
Proceeding unless there is, under applicable standards of professional conduct,
a conflict on any significant issue between the positions of any two or more
Company Indemnified Parties, in which case Purchaser shall, or shall cause the
Company to, pay the reasonable and documented fees of such additional counsel
required by such conflict, promptly as statements therefor are received, and
(iii) Purchaser will, and will cause the Company to, use commercially
reasonable efforts to assist in the vigorous defense of any such matter; provided, however, that neither Purchaser
nor the Company shall be liable for any settlement of any claim effected
without its written consent, which consent shall not be unreasonably withheld
or delayed.  Any Company Indemnified
Party wishing to claim indemnification under this Section 5.7 upon
becoming aware of any such Company Indemnified Proceeding shall promptly notify
Purchaser and the Company (but the failure to so notify Purchaser or the
Company shall not relieve Purchaser or the Company from any liability it may
have under this Section 5.7 except to the extent such failure materially
prejudices Purchaser or the Company), and shall deliver to Purchaser and the
Company the undertaking contemplated by Section 145 of the DGCL.

 

(b)                                 For a period of six (6) years following the
Closing Date, Purchaser will, and will cause the Company to, fulfill and honor
in all respects the obligations of the Company pursuant to the indemnification
agreements between the Company or any Subsidiary and the Indemnified Parties
set forth in the Seller Disclosure Letter, subject to applicable law.  For a period of six (6) years following the
Closing Date, the certificate of incorporation and bylaws of the Company will
contain provisions with respect to exculpation and indemnification that are at
least as favorable to the Indemnified Parties as those contained in the
certificate of incorporation and bylaws of the Company as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified in
any manner that would adversely affect the rights thereunder of Indemnified
Parties.

 

(c)                                  This Section 5.7 is intended to be for
the benefit of, and shall be enforceable by the Indemnified Parties and their
heirs and personal representatives and shall be binding on Purchaser and the
Company and their respective successors and assigns.  In the event Purchaser or the Company or
their respective successor or assign (i) consolidates with or merges into
any other Person and shall not be the continuing or surviving corporation or
entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in each
case, proper provision shall be made so that the successor and assign of
Purchaser or the Company, as the case may be, honor the obligations set forth
with respect to Purchaser or the Company, as the case may be, in this Section 5.7.

 

33

 

(d)                                 Nothing in this Agreement is intended to,
shall be construed to or shall release, waive or impair any rights of the
Company Indemnified Parties to directors’ and officers’ insurance claims under
any policy of the Seller, the Company or any of their Affiliates in existence
on or prior to the Closing Date, it being understood and agreed that the
indemnification provided for in this Section 5.7 is not prior to or in
substitution for any such claims under such policy.

 

(e)                                  Notwithstanding any provision of this Section 5.7
to the contrary, none of the Company, the Purchaser or any Affiliate of either
shall be obligated to Seller pursuant to this Agreement to indemnify, or
maintain insurance for the benefit of, any Company Indemnified Party in respect
of any claim brought against any such Company Indemnified Party by the Seller
or any Affiliate or stockholder of the Seller, solely in his or her capacity as
a stockholder of Seller, with respect to matters occurring prior to the Closing
Date.

 

5.8                                 Tax Covenants.

 

(a)                                  Seller shall prepare and file when due, or
cause to be prepared and filed when due, all Tax Returns of the Company and any
of its Subsidiaries or, in the case of consolidated income Tax Returns under
federal, state or foreign law, that include the Company or any of its
Subsidiaries, for all Tax periods ending on or prior to the Closing Date (a “Pre-Closing Tax Period”).  Purchaser shall cooperate with and assist,
and shall cause the Company, its Subsidiaries and their respective officers,
employees and representatives to cooperate with and assist, Seller with respect
to the preparing and filing of Tax Returns for all Pre-Closing Tax
Periods.  Seller shall prepare such Tax
Returns by treating items on such Tax Returns in a manner consistent with past
practice with respect to such items, unless otherwise required by a Legal
Requirement.

 

(b)                                 Purchaser shall (or shall cause the Company
to) prepare and file when due, or cause to be prepared and filed when due, all
Tax Returns required to be filed by the Company and any of its Subsidiaries relating
to any taxable period that begins before, and ends after, the Closing Date (a “Straddle Period”) and the Company shall
remit (or cause to be remitted) any Taxes due in respect of such Tax Returns.
Purchaser shall provide Seller with a written notice of the amount owed by
Seller pursuant to Section 7.8(a) with respect to the taxable periods
covered by such Tax Returns 15 days before such Taxes are due and Seller shall
remit to Purchaser (or the Company) such amount no later than five (5) days
before such Taxes are due and shall promptly provide Seller with copies of all
such Tax Returns.

 

(c)                                  In connection with the preparation of Tax
Returns, audit examinations, and any administrative or judicial proceedings
relating to the Tax liabilities imposed on the Seller, the Purchaser, the
Company or the Subsidiaries for all Pre-Closing Tax Periods and the Straddle
Period, the Purchaser, the Company and the Subsidiaries on the one hand, and
the Seller on the other hand, shall cooperate fully with each other, including,
but not limited to, during normal business hours, the furnishing or making
available of records, personnel (as reasonably required and at no cost to the
other party), books of account, powers of attorney or other materials necessary
or helpful for the preparation of such Tax Returns, the conduct of audit
examinations or the defense of claims by Taxing Authorities as to the
imposition of Taxes.  The Seller, the
Purchaser, the Company and the Subsidiaries shall retain all Tax Returns,
schedules

 

34

 

and
work papers and all material records or other documents relating to all Tax
matters pertinent to the Company and the Subsidiaries relating to any Tax
period beginning before the Closing Date until the expiration of the statute of
limitations of the Tax periods to which such Tax Returns and other documents
relate, without regard to extension, except to the extent notified by another
party in writing of such extensions for the respective Tax periods.  The Seller, on the one hand, and each of the
Purchaser, the Company and the Subsidiaries, on the other hand, shall give the
other party reasonable written notice prior to destroying or discarding any
such books or records and, if the other party so requests, the other party
shall take possession of such books and records.

 

(d)                                 Seller shall cause all Tax sharing
agreements, Tax indemnity agreements or similar arrangements between the
Company and Seller or any of their Affiliates to be terminated, effective as of
immediately before the Closing, to the extent that any such agreement related
to the Company or any of its Subsidiaries and after the Closing, neither the
Company nor any of its Subsidiaries shall have any obligation under any such
agreement or arrangement.

 

(e)                                  Within sixty (60) days after Seller has
prepared the Tax Returns described in Section 5.8(a), Seller shall
transfer to the Company copies of all Tax Returns and Tax books and records
that relate to the Company and the Subsidiaries and which are in the possession
of the Seller or any of its Affiliates.

 

(f)                                    Seller shall not report on its U.S. federal
income Tax Return for the taxable year that includes the Closing Date any tax
credits described in Section 1.3(e) or take any other action that is
inconsistent with Purchaser, the Company or any Subsidiary claiming any such
tax credits on any Tax Return for any taxable period (or portion thereof)
ending after the Closing Date.

 

(g)                                 Seller shall deliver to Purchaser at the
Closing (i) a duly executed certificate of non-foreign status that satisfies
the requirements of Treasury Regulation Section 1.1445-2(b)(2) and (ii) a
duly executed IRS Form W-9.

 

(h)                                 Purchaser shall not make, and shall not
permit the Company to make, an election under Section 338(g) of the Code
or any corresponding elections under state, local, or foreign Tax law, with
respect to the transactions contemplated under this Agreement.

 

(i)                                     Purchaser shall not make, and shall not
permit the Company to make, an amended Tax Return filing for any taxable period
ending on or before the Closing Date without the prior written consent of
Seller, which consent shall not be unreasonably withheld or delayed, if such
amended Tax Return would have a material adverse effect on Seller.

 

5.9                                 Transition
Services.

 

Prior to the Closing, Seller
and Purchaser shall enter into a Transition Services Agreement in substantially
the form attached hereto as Exhibit A (the “Transition Services Agreement”).  Except as set forth in the Transition
Services Agreement, or as otherwise agreed to in writing by Seller and
Purchaser, all tax, information technologies, insurance, employee benefits,
treasury and other products and services provided to the Company or its
Subsidiaries by Seller or any Affiliate of Seller, including any agreements or
understanding (written or oral) with

 

35

 

respect thereto, shall terminate simultaneously with
the Closing without any further action or liability on the part of the parties
thereto; provided, however, that
if Purchaser desires additional transition services currently provided by the
Seller or any Affiliate of Seller but not described in the Transition Services
Agreement, Purchaser and Seller shall use commercially reasonable efforts to
agree upon the terms (including scope, duration and cost) to provide such
services.  Except as set forth in the
Transition Services Agreement, in the absence of any other written agreement,
the provision of any services (similar to those contemplated by the preceding
sentence) by Seller to the Company or its Subsidiaries from and after the
Closing shall be for the convenience, and at the expense of, the Purchaser only
and shall be furnished without any liability on the part of Seller with respect
thereto.

 

5.10                           Release of Guaranties; Assumptions of Letters of Credit; Transfer of
Equipment Leases.

 

(a)                                  Prior to Closing, Seller shall use
commercially reasonable efforts to be relieved of its guaranty and lease
payment obligations set forth in Section 5.10(a) of the Seller Disclosure
Letter (the “Scheduled Guaranties”).  Purchaser shall cooperate with Seller in
removing Seller’s obligations arising under or relating to the Scheduled
Guaranties, including, if necessary, assuming the Scheduled Guaranties or
providing substitute guaranties therefor (to the extent permitted by the
current beneficiaries of such Scheduled Guaranties).

 

(b)                                 After the Closing, (i) Purchaser and Seller
shall cooperate in removing any remaining obligations, of any nature
whatsoever, that Seller or any Affiliate of Seller has to guaranty the
performance or obligations of the Company or its Subsidiaries after the Closing
Date including, without limitation, any Scheduled Guaranties in existence as of
the Closing, contract-performance bonds, completion bonds, surety bonds or
other bonds posted to secure the performance, completion or other obligation of
the Company or its Subsidiaries under any Contract (the “Remaining Guaranties”) and (ii) Purchaser
shall assume the Remaining Guaranties or provide substitute guaranties therefor
(to the extent permitted by the current beneficiaries of such Remaining
Guaranties).  Notwithstanding the
foregoing, the Company and Purchaser shall have no obligations under this Section 5.10(b)
(and only this Section 5.10(b)) with respect to a given Remaining Guaranty
if any action required under this Section 5.10(b) would (i) materially
increase the Company’s costs in respect of any related project or Contract,
unless Seller has agreed in writing to reimburse the Company for such expense,
or (ii) cause the Company to default under any related Contract.  The Company shall pay any fees incurred in
the renewal after the Closing Date of any such letters of credit or bonds
securing obligations of the Company or any of its Subsidiaries and for which
Seller or any Affiliate (other than the Company or its Subsidiaries) is then
liable.  Purchaser shall, and shall cause
the Company to, keep Seller reasonably informed of the status of the Company’s
efforts to obtain such releases.

 

(c)                                  Promptly after the Closing, and, in any
event, within ninety (90) days from the Closing, Purchaser shall cause the
Company to establish a credit facility and shall, under such facility, take
assignment of, assume or replace the obligations arising under the letters of
credit set forth in Section 5.10(c) of the Seller Disclosure Letter.

 

(d)                                 Promptly after the Closing, and, in any
event, within ninety (90) days from the Closing, Seller and Purchaser shall
cooperate to effect the transfer to the Company of

 

36

 

the
equipment leases set forth in Section 5.10(d) of the Seller Disclosure
Letter.  In the event that any equipment
lease cannot be so transferred, Purchaser shall cause the Company to reimburse
Seller for the payments under such lease.

 

5.11                           Other Matters.

 

(a)                                  After the Closing, Purchaser shall, and shall
cause the Company and its Subsidiaries to take the following actions:

 

(i)                           Fully cooperate with Seller in connection
with Seller’s defense of the Tax audits and investigations set forth in Section 1.3(c)
of the Seller Disclosure Letter, in each case including (i) maintaining
relevant books and records of the Company and its Subsidiaries and other data,
in each case as reasonably required for prosecution and/or defense of such
claims, (ii) permitting Seller or its agents, at Seller’s expense, during
regular business hours and after provision of reasonable advance notice, to
inspect and make copies of such records for the sole purpose of prosecuting
and/or defending such claims (it being understood that such copies shall be
subject to Section 5.2(a)(ii) hereto), and (iii) making available, at
Seller’s expense, employees, contractors and other agents of the Company and
its Subsidiaries for the giving of interviews, depositions and other testimony,
as reasonably needed, in connection with Seller prosecution and/or defense of
such claims; and

 

(ii)                        Use commercially reasonable efforts to
diligently prosecute the Patent Claims, including, without limitation, the
actions, or potential actions, against the parties identified on Section 5.11(a)(ii)
of the Seller Disclosure Letter.  In
prosecuting the Patent Claims, Purchaser shall cause the Company to provide
Seller with timely written reports of material developments in any of the
pending Patent Claims, including providing written notice within five (5)
business days following the institution of litigation or arbitration
proceedings or the settlement of any Patent Claim.  Additionally, Purchaser shall cause the
Company to provide a written report once every six months (due each June 30
and December 31, commencing June 30, 2005) summarizing all pending
Patent Claims and all actions taken with respect to such claims in the prior
six-month period against the third parties identified in Section 5.11(a)(ii)
of the Seller Disclosure Letter.  Seller
shall pay, on a quarterly basis, fifty percent (50%) of the Company’s out-of
pocket costs and expenses incurred by the Company after the Closing Date in
connection with prosecuting the Patent Claims; provided that Purchaser or the
Company shall have provided reasonable supporting documentation in writing to
Seller.  If Purchaser and the Company
make a reasonable determination, acting in good faith, not to prosecute for
Prudent Business Reasons one or more of the Patent Claims set forth on Section 5.11(a)(ii)
of the Seller Disclosure Letter, Purchaser and the Company shall, within five
(5) business days, provide Seller with written notification of such
determination, including providing a description in reasonable detail of the
basis for such determination.  “Prudent Business Reasons” shall include,
but not be limited to, Purchaser’s good faith judgment that the out-of-pocket
costs and/or any profit or other value anticipated to be
lost from prosecuting any such Patent Claims exceeds the estimated value of any
settlement, judgment or other recovery reasonably expected to be derived
therefrom.  Notwithstanding the
foregoing, “Prudent Business Reasons” shall in no event include consideration
of any benefits (financial or otherwise) derived or costs incurred by any
affiliate of any shareholder of Purchaser (other than the Company and its
Subsidiaries) arising out of or relating to the prosecution of any Patent
Claims.

 

37

 

(b)                                 Purchaser and Seller shall reasonably
cooperate, and shall cause their respective Affiliates, officers, agents,
employees and other representatives to reasonably cooperate in connection with
responding to any investigation or report ongoing after the Closing Date,
including any investigation relating to environmental or tax matters, initiated
or undertaken by any Governmental Entity.

 

(c)                                  Seller shall, for a period of two years from
the Closing Date, maintain relevant books and records materially relating to
the Company or its Subsidiaries and shall permit the Company or its agents, at
the Company’s expense, during regular business hours and after provision of
reasonable advance notice, to inspect and make copies of such records as
reasonably needed in connection with operation of the Company’s business.

 

5.12                           Financing.

 

(a)                                  Purchaser agrees to use its reasonable best
efforts to obtain the Debt Financing prior to the Closing Date and on
substantially the terms set forth in the Commitment Letter, to keep the Seller
reasonably informed on the status of its efforts to obtain the Debt Financing
and to not permit any amendment or modification to the Commitment Letter that
would reasonably be expected to materially hinder or delay the receipt of the
Debt Financing upon the terms set forth in the Commitment Letter as of the date
hereof without the prior written consent of the Company (not to be unreasonably
withheld or delayed).

 

(b)                                 Seller will cause the Company, its
Subsidiaries and the respective officers, employees, accountants, attorneys and
advisers of the Company and its Subsidiaries, in each case, to provide
reasonable and customary cooperation in connection with the arrangement of the
Debt Financing and any other financing to be consummated contemporaneously with
the Closing in respect of the transactions contemplated by this Agreement,
including (i) participation in meetings, due diligence sessions and road shows,
(ii) the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents, and (iii) the execution and delivery of any
commitment or financing letters, underwriting, purchase or placement
agreements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents as may be reasonably
requested by Purchaser; provided,
however that the terms and
conditions of such financing may not require the payment of any commitment or
other fees by the Company or any of its Subsidiaries, or the incurrence of any
liabilities by the Company or any of its Subsidiaries prior to the Closing.

 

(c)                                  In order to provide financial statements
necessary to consummate the Debt Financing, Seller shall use commercially
reasonable efforts to, or to cause the Company to: (i) prepare and deliver to
Purchaser financial statements in accordance with GAAP for the nine month
periods ended October 31, 2004 and 2003 (the “October Financial Statements”), (ii) cause the Company’s
independent public accountants to (x) perform the procedures specified by the
American Institute of Certified Public Accountants for a review of financial
information as described in SAS 100, Interim Financial Information, with
respect to the October Financial Statements (or, if requested by the
Purchaser, the unaudited Financial Statements) and (y) prepare and deliver to
the underwriters any customary comfort letters reasonably requested by
Purchaser, (iii) obtain the consent of Seller’s independent public accountants,
when required, with respect to the audited Financial Statements, at Purchaser’s
expense, so that the audited

 

38

 

Financial
Statements can be used in Rule 144A offering memoranda issued by Purchaser or
one of its affiliates, and (iv) cooperate with Purchaser so Purchaser can
obtain information sufficient for Purchaser to comply with the requirements for
the Management’s Discussion and Analysis portion of any Rule 144A offering
memoranda (in conformity with SEC rules).

 

ARTICLE VI

CONDITIONS
PRECEDENT TO THE PARTIES’ PERFORMANCE

 

6.1                                 Conditions to the Performance of
Each Party.  The respective
obligations of each party to this Agreement to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing Date of the following conditions:

 

(a)                                  No Order.  No Governmental Entity of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order which (i) is in effect and (ii) has the effect of making the
transactions contemplated hereby illegal.

 

(b)                                 Antitrust Approvals; Necessary Consents. The waiting period (and any extension
thereof) under the HSR Act relating to the transactions contemplated hereby
shall have expired or terminated early, all foreign antitrust approvals listed
in Section 6.1(b) of the Seller Disclosure Letter shall have been obtained
and the Necessary Consents shall have been obtained.

 

6.2                                 Additional Conditions to the
Obligations of Seller.  The obligation
of Seller to consummate and effect the transactions contemplated by this
Agreement 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,
exclusively by Seller:

 

(a)                                  Representations and Warranties.  The
representations and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects (except for such representations
and warranties qualified by materiality or Material Adverse Effect, which shall
be true and correct in all 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 that address matters only as of a particular
date shall have been true and correct only on such date).  Seller shall have received a certificate with
respect to the foregoing signed on behalf of Purchaser by an authorized
executive officer of Purchaser.

 

(b)                                 Agreements and Covenants. 
Purchaser shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date.  Seller shall have received a certificate with
respect to the foregoing signed on behalf of Purchaser by an authorized
executive officer of Purchaser.

 

(c)                                  Transition Services Agreement. 
Purchaser shall have executed and delivered to Seller the Transition
Services Agreement.

 

(d)                                 Directors’ and Officers’ Liability Insurance. 
Purchaser shall have presented documentation that it has obtained, or
caused the Company to obtain effective as of the Closing, at the sole cost and
expense of the Purchaser or, after the Closing, the Company,

 

39

 

liability
insurance for the benefit of all past and present directors and officers of the
Company covering matters occurring prior to the Closing Date.  Such insurance policy shall have policy
limits of at least twenty-five million dollars ($25,000,000) per incident, be
fully paid, and shall remain in force and be non-cancelable for a period of 6
years from the Closing Date, with other coverage terms and deductibles
comparable to the coverage provided to the Company’s directors and officers as
of the date of this Agreement; provided,
however, that Purchaser shall not be required to cause to be
maintained such liability insurance policies to the extent the aggregate cost
of maintaining such policies exceeds four hundred thousand dollars ($400,000),
in which case the Purchaser shall only be required to cause to be maintained a
liability insurance policy with the greatest policy limits then reasonably
available at such cost.

 

(e)                                  Lenders’ Consent. Seller shall have obtained the prior
written consent of J.P. Morgan Chase Bank under that certain (i) Credit
Agreement (Multi-Year Facility), dated as of July 28, 2004, among Seller
and J.P. Morgan Chase Bank, as Administrative Agent, Citicorp USA, Inc., as
Syndication Agent, Morgan Stanley Bank, Wachovia Bank, N.A., The Royal Bank of
Scotland PLC, as Co-Documentation Agents, and the Lenders party thereto, and
(ii) Amended and Restated Credit Agreement (Multi-Year Facility), dated as of July 28,
2004, among Seller and J.P. Morgan Chase Bank, as Administrative Agent,
Citicorp USA, Inc., as Syndication Agent, Morgan Stanley Bank, Wachovia Bank,
N.A., The Royal Bank of Scotland PLC, as Co-Documentation Agents and the
Lenders party thereto (the “Lenders’ Consent”).

 

6.3                                 Additional Conditions to the Obligations
of Purchaser.  The obligations of
Purchaser to consummate and complete the transactions contemplated by this
Agreement 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,
exclusively by Purchaser:

 

(a)                                  Representations and Warranties.  The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects (except for such representations and
warranties qualified by materiality, which shall be true and correct in all
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 that address matters only as of a particular date shall have been
true and correct only on such date). 
Purchaser shall have received a certificate with respect to the
foregoing signed on behalf of Seller by an authorized executive officer of Seller.

 

(b)                                 Agreements and Covenants.  Seller
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. 
Purchaser shall have received a certificate to such effect signed on
behalf of Seller by an authorized executive officer of Seller.

 

(c)                                  Transition Services Agreement. 
Seller shall have executed and delivered to Purchaser the Transition
Services Agreement.

 

(d)                                 Resignations of Certain Directors. 
Seller shall have delivered to Purchaser executed resignations of each
of the directors of the Company and each Subsidiary other than those directors
of the Company and each Subsidiary who are employees of the Company.

 

40

 

(e)                                  Corporate Records. 
Seller shall have delivered to Purchaser (i) a certificate or
certificates representing the Shares, together with a stock power or stock
powers duly executed in blank, and (ii) all of the other minute books and stock
ledgers and certificates for the Company and each Subsidiary, except to the
extent that any of the foregoing in this clause (ii) are in the possession of
Company or the Subsidiaries.

 

(f)                                    Noncompetition Agreement. 
Seller shall have executed and delivered to Purchaser a Noncompetition
Agreement in the form attached hereto as Exhibit B (the “Noncompetition Agreement”).

 

(g)                                 Debt Financing.  The
conditions of the Debt Financing as set forth in the Commitment Letter shall
have been satisfied in full or waived, and the Debt Financing shall have been
provided or made available to the Company and/or Purchaser on the terms set
forth in the Commitment Letter (and, to the extent such terms are not set forth
in the Commitment Letter, on terms that are reasonably satisfactory to Purchaser).

 

(h)                                 No Material Adverse Change. There shall have been no change, event or
effect that shall have occurred that has had or, or that is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect of the
Company.

 

ARTICLE VII

INDEMNIFICATION

 

7.1                                 Survival of Representations and
Warranties.  All representations
and warranties of the parties contained in Article II or III of this
Agreement or in any compliance certificate delivered pursuant to Sections
6.2(a) or 6.3(a) shall survive until fifteen (15) months after the Closing
Date; provided, however, that the
representations and warranties contained in (i) Section 2.6 (Taxes) of
this Agreement shall survive the Closing until thirty (30) days after the
expiration of the applicable statute of limitations applicable to the matters
covered thereby (giving effect to any waiver, mitigation or extension thereof),
(ii) Sections 2.10 (Employee Benefits Plans) and 2.12 (Environmental Matters)
of this Agreement shall survive until the third anniversary of the Closing
Date, (iii) Section 2.7 (Intellectual Property) shall survive until the
second anniversary of the Closing Date, and (iv) Sections 2.1(a) (Organization;
Standing and Power), 2.1(c) (Subsidiaries), 2.2 (Capital Structure), 2.3(a)
(Authority), 3.1(a) (Organization; Standing and Power) and 3.2(a) (Authority)
shall survive the Closing indefinitely (the “Indefinitely
Surviving Representations”). The termination of representations and
warranties provided herein shall not affect the rights of any Indemnified Party
in respect of any claim made by such indemnified party in a Claim Notice
received by the other party pursuant to and in compliance with the provisions
of this Article VII prior to the expiration date specified above. All
covenants and agreements that by their terms are to
performed after the Closing shall expire upon the completion of performance or
waiver thereof.

 

7.2                                 Indemnification by Seller.  Subject in all cases to the limitations set
forth in this Article VII (including, without limitation, the limitations
set forth in Section 7.6), notwithstanding any investigation or inquiry by
Purchaser or any of its representatives or affiliates, Seller shall indemnify,
save and hold harmless Purchaser and its Affiliates (including, after the
Closing, the Company and the Subsidiaries) and their respective directors,
officers,

 

41

 

employees, shareholders, agents and representatives (collectively, the “Purchaser Indemnified Parties”) from and
against and in respect of all claims, costs, liabilities, obligations, fines,
penalties, awards, damages, losses and expenses (including reasonable attorney’s
fees and expenses) (“Losses”)
arising out of or resulting from any:

 

(a)                                  breach of, or inaccuracy in, any
representation or warranty contained in Article II of this Agreement
(other than those representations and warranties set forth in Section 2.6,
which shall be governed by Section 7.8) or the compliance certificate
delivered by Seller pursuant to Section 6.3(a),

 

(b)                                 breach or failure to perform by Seller of any
covenant, agreement or obligation of Seller contained in this Agreement,

 

(c)                                  liabilities for Taxes described in Section 7.8(a)
below,

 

(d)                                 matters described in Section 7.2(d) of
the Seller Disclosure Letter (the “Excluded
Claims”), and

 

(e)                                  Losses arising out of, or relating to, any
Claim initiated by or on behalf of any stockholder of Seller, solely in his or
her capacity as a stockholder of Seller, against a Company Indemnified Party.

 

7.3                                 Indemnification by Purchaser.  Subject in all cases to the limitations set
forth in this Article VII (including, without limitation, the limitations
set forth in Section 7.6), Purchaser shall indemnify, save and hold
harmless Seller and its Affiliates and their respective directors, officers,
employees, shareholders, agents and representatives (collectively, the “Seller Indemnified Parties”) from and
against and in respect of all Losses arising out of or resulting from any:

 

(a)                                  breach of, or inaccuracy in, any
representation or warranty contained in Article III of this Agreement or
the compliance certificate delivered by Purchaser pursuant to Section 6.2(a),

 

(b)                                 breach or failure to perform by Purchaser of
any covenant, agreement or obligation of Purchaser contained in this Agreement,

 

(c)                                  liabilities for Taxes described in Section 7.8(b)
below,

 

(d)                                 obligations of Seller or its Affiliates under
the Remaining Guaranties, and

 

(e)                                  insurance deductibles or retentions paid by
or on behalf of Seller after the Closing Date in connection with claims having
a date of occurrence prior to the Closing Date and reported by or on behalf of
the Company or any of the Subsidiaries under insurance policies maintained by
Seller, including, without limitation, general liability, automobile liability
and worker’s compensation.

 

7.4                                 Procedure for Claims Between
Parties.  If a claim for Losses
is to be made by a Person entitled to indemnification hereunder (an “Indemnified Party”), the Indemnified Party

 

42

 

shall give written notice (a “Claim
Notice”) to the party required to provide such indemnification (the “Indemnifying Party”) as soon as practicable
(and in any event within five (5) business days) after the Indemnified Party
becomes aware that a particular fact, condition or event may give rise to
Losses for which indemnification may be sought under this Article VII,
other than with respect to Losses related to Taxes (which shall be governed by Section 7.8
below).  Any failure to submit any such
Claim Notice in a timely manner to the Indemnifying Party shall not relieve the
Indemnifying Party of any liability hereunder, except to the extent (and only
to the extent) the Indemnifying Party is actually prejudiced by such failure.  Each Claim Notice shall set forth (i) the
specific representation, warranty or covenant alleged to have been breached,
(ii) the nature and amount of the claim asserted, together with sufficient
facts relating thereto, to the extent known by the Indemnified Party, so that
the Indemnifying Party may reasonably evaluate such claim, and (iii) a
calculation or good faith estimate, if such can be reasonably calculated, of
the aggregate Losses to which the Indemnified Party believes it is entitled in
connection with the claim.  If the
Indemnifying Party, within twenty (20) business days after receipt of the Claim
Notice (the “Notice Period”), does
not give written notice to the Indemnified Party or parties announcing its
intent to contest such claim, the claim shall be deemed accepted and the
Indemnifying Party shall, within ten (10) business days after expiration of the
Notice Period, deliver to the Indemnified Party the amount of Losses set forth
in the Claim Notice.  In the event,
however, that the Indemnifying Party or parties contest the assertion of a
claim by giving such written notice to the Indemnified Party within the Notice
Period, then the parties shall act in good faith to reach agreement regarding
such claim.  If the parties are unable to
reach agreement regarding any such claim, the resolution of such claim shall be
determined in a court proceeding conducted in accordance with the procedures
set forth in Section 9.7(b).

 

7.5                                 Defense of Third Party Claims.  Other than Tax Claims (which shall be governed
by Section 7.8), if any lawsuit or enforcement action is filed against any
Indemnified Party by a third party, written notice thereof will be given to the
Indemnifying Party as promptly as practicable (and in any event within five (5)
business days after the service of the citation or summons).  The failure of any Indemnified Party to give
timely notice hereunder will not affect rights to indemnification hereunder,
except to the extent (and only to the extent) that the Indemnifying Party is
actually materially prejudiced by such failure. 
After such notice, the Indemnifying Party will be entitled, if it so
elects, at its own cost, risk and expense (i) to take control of the defense
and investigation of such lawsuit or action, (ii) to employ and engage attorneys
of its own choice to handle and defend the same unless the named parties to
such action or proceeding include both the Indemnifying Party and the
Indemnified Party and the Indemnified Party has been advised in writing by
counsel that there may be one or more legal defenses available to such
Indemnified Party that are different from or additional to those available to
the Indemnifying Party, in which event the Indemnified Party will be entitled,
at the Indemnifying Party’s cost, risk and expense, to separate counsel of its
own choosing, and (iii) to compromise or settle such claim, provided such
compromise or settlement provides solely a monetary settlement with an
unconditional release of the Indemnified Party and does not include an
admission of liability.  The Indemnified
Party will cooperate with the Indemnifying Party and its attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom which cooperation will include, to the extent reasonably
requested by the Indemnifying party, the retention, and the provision to the
Indemnifying Party, of records and information reasonably relevant to such
third-party claim, and making employees of the Indemnified Party and its
affiliates available on a mutually convenient basis to provide additional

 

43

 

information and explanation of any materials provided hereunder.  The Indemnified Party shall have the right
but not the obligation to participate at its own expense in the defense thereof
by counsel of the Indemnified Party’s choice. The parties will cooperate with
each other in any notifications to insurers. 
If the Indemnifying Party fails to assume the defense of such claim
within fifteen (15) calendar days after receipt of the Claim Notice, the
Indemnified Party against which claim has been asserted will (upon delivering
notice to such effect to the Indemnifying Party) have the right to undertake,
at the Indemnifying Party’s cost, risk and expense, the defense, compromise or
settlement of such claim on behalf of and for the account and risk of the
Indemnifying Party; provided, however,
that such claim will not be compromised or settled without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.  If the Indemnified Party
assumes the defense of the claim, the Indemnified Party will keep the
Indemnifying Party reasonably informed of the progress of any such defense,
compromise or settlement.  The
Indemnifying Party will be liable for any settlement of any action effected
pursuant to and in accordance with this Section 7.5 and any final judgment
(subject to any right of appeal), and the Indemnifying Party will indemnify and
hold harmless the Indemnified Party from and against any Losses by reason of
any such settlement or judgment.  No
Indemnified Party will take any action the purpose of which is to prejudice the
defense of any claim subject to indemnification hereunder. Notwithstanding the
foregoing, an Indemnified Party shall have the right to jointly control the
defense of any claim subject to indemnification hereunder in the event the
potential Losses with respect to such Third Party Claim, when aggregated with
all other satisfied or pending Losses subject to indemnification pursuant to Section 7.2(i)
hereof, exceed the limits set forth in Section 7.6(a), provided, however, that in such case,
neither the Indemnifying Party nor the Indemnified Party may compromise or
settle such claims without the prior written consent of the other party, which
consent shall not be unreasonably withheld.

 

(b)                                 Notwithstanding anything in this Agreement to
the contrary, with respect to the defense of the Tax audits and investigations
set forth in Section 1.3(c) of the Seller Disclosure Letter and the
defense and prosecution of the TSA Litigation after the Closing Date, (i)
Seller shall control the defense and/or prosecution of such matters at Seller’s
own cost, risk and expense, (ii) Seller shall employ and engage attorneys and
any other advisers of its own choice to handle and defend the same, (iii)
Seller shall be entitled, except as provided in the following sentence, to
compromise or settle such matters in its sole discretion, and (iv) Purchaser
shall reasonably cooperate and cause the Company to cooperate with Seller, in
the same manner as set forth in Section 7.5(a).  Purchaser shall cause the Company to provide,
at the cost and expense of the Company, up to 200 hours of Company employee
assistance in the TSA Litigation in any given calendar quarter, including up to
20 hours of assistance per calendar quarter from each of the Company’s Chief
Executive Officer and Chief Financial Officer, but not to exceed 500 aggregate
hours of employee assistance in any calendar year, all of which assistance will
be at the cost and expense of the Company. 
Any additional assistance required beyond the hourly limits in the
preceding sentence shall be paid for by Seller at hourly rates based on the
base salaries of each employee. Seller shall not compromise or settle any Tax
audit without the prior written consent of Purchaser if such compromise or
settlement could adversely affect the Purchaser or its Affiliates (including,
after the Closing Date, the Company and the Subsidiaries), such consent not to
be unreasonably withheld.

 

44

 

7.6                                 Limitations.

 

(a)                                  The Purchaser Indemnified Parties shall not
be entitled to recover for any Losses pursuant to Section 7.2(a)
hereunder, unless (i) each of such Losses exceeds Fifty Thousand Dollars
($50,000) (the “Minimum Amount”)
and (ii) all such Losses (excluding Losses individually less than the Minimum
Amount) in the aggregate exceed Six Million Seven Hundred Fifty Thousand
Dollars ($6,750,000) (the “Purchaser
Deductible Amount”), at which time Purchaser shall be entitled to be
indemnified and compensated thereafter for all Losses (excluding Losses less
than the Minimum Amount) in excess of the Purchaser Deductible Amount.  Solely for purposes of determining the amount
of Losses for which the Purchaser Indemnified Parties are entitled to be
indemnified by Seller pursuant to Section 7.2 for a breach of, or
inaccuracy in, any representation or warranty (including for determining
whether a breach of a representation or warranty has occurred or an inaccuracy
of any representation or warranty exists), any materiality or Material Adverse
Effect standard contained in the applicable representation or warranty shall be
disregarded.  Absent fraud, in no event
shall Seller’s actual cumulative liability for Losses pursuant to Section 7.2,
excluding Losses relating to the Excluded Claims or Taxes, exceed Two Hundred
Two Million, Five Hundred Thousand Dollars ($202,500,000). In no event shall
Seller’s actual cumulative liability for all Losses hereunder, including
liability for Losses relating to the Excluded Claims and Taxes, exceed the
Purchase Price. Each Loss or right of indemnification under Section 7.8
for which any Purchaser Indemnified Party is entitled to recovery shall be
reduced by (i) the amount of any insurance proceeds actually received by such
Purchaser Indemnified Party (net of costs and expenses of collection) with
respect to such Loss or right of indemnification and (ii) any indemnity,
contribution or other similar payment that such Purchaser Indemnified Party
received from any third party with respect to such Loss or right of
indemnification. If Purchaser received any payment from Seller in respect of
any Losses pursuant to Section 7.2 and Purchaser could have recovered all
or part of such Losses from a third party (a “Potential
Contributor”) based on the underlying Claim (other than for Taxes),
at the written request of the Seller, Purchaser shall, to the extent permitted
by applicable Legal Requirement and any contractual provision, assign such of
its rights to proceed against the Potential Contributor as are necessary to
permit Seller to recover from the Potential Contributor the amount of such
payment.

 

(b)                                 In determining the amount of Losses for which
any Seller Indemnified Party is entitled to be indemnified by Purchaser
pursuant to Section 7.3 for a breach of, or inaccuracy in, any
representation or warranty (including for determining whether a breach of a
representation or warranty has occurred or an inaccuracy of any representation
or warranty exists), any materiality standard contained in the applicable
representation or warranty shall be disregarded. Each Loss or right of
indemnification pursuant to Section 7.8 for which any Seller Indemnified
Party is entitled to recovery shall be reduced by (i) the amount of any
insurance proceeds actually received by such Seller Indemnified Party (net of
costs and expenses of collection) with respect to such Loss or right of
indemnification and (ii) any indemnity, contribution or other similar payment
that such Seller Indemnified Party received from any third part with respect to
such Loss or right of indemnification.

 

(c)                                  Notwithstanding any other provision of this
Agreement to the contrary, in no event shall Losses include a party’s incidental
or consequential damages or special or punitive damages to such party.

 

45

 

7.7                                 No Duplication; Exclusive Remedy.  Any liability for indemnification hereunder
shall be determined without duplication of recovery by reason of the state of
facts giving rise to such liability constituting a breach of more than one
representation, warranty, covenant or agreement.  Seller and Purchaser agree that, after the
Closing, their sole remedy with respect to any and all claims arising in
connection with the transactions contemplated by this Agreement (other than
with respect to fraud or willful breach or as specifically set forth in the
Ancillary Agreements) shall be pursuant to the indemnification provisions set
forth in this Article VII.

 

7.8                                 Tax Claims.

 

(a)                                  Seller Tax Indemnity. 
Seller shall indemnify and hold Purchaser Indemnified Parties harmless
from and against Losses arising out of or relating to the following, but only
to the extent such Losses exceed the related reserve, if any, set forth on Section 7.8(a)
of the Seller Disclosure Letter:

 

(i)                           any Loss incurred by reason of a breach of
the representations set forth in Section 2.6;

 

(ii)                        Taxes of any member of a consolidated,
combined or unitary group of which the Company or any Subsidiary is or was a
member on or prior to the Closing Date by reason of the liability of the
Company or any Subsidiary pursuant to Treasury Regulations section 1.1502-6(a)
(or any analogous or similar state, local or foreign law or regulation);

 

(iii)                     Taxes imposed on the Company or any
Subsidiary for any periods ending on or before the Closing Date (or any portion
of any period up through the Closing Date to the extent any period does not
close on such date);

 

(iv)                    the disallowance, in whole or in part, of the
use of the tax credits (other than as a result of there being insufficient tax
to use the credits) described in Section 1.3(e) by Purchaser or any of its
Affiliates (including the Company and the Subsidiaries) in any taxable period
beginning after the Closing Date, but only in the ratio that the amount of such
credits were paid to Seller as Additional Purchase Price; and

 

(v)                       the recovery by a Tax authority, in whole or
in part, of any refund described in Section 1.3(f) from Purchaser or any
of its Affiliates (including the Company and the Subsidiaries) previously paid
to Seller, but only in the proportion that the refund was paid to Seller as
Additional Purchase Price, and, with respect of the New Jersey Business
Employment Incentive Program regardless of whether such Loss resulted from any
action taken by the Purchaser or its Affiliates (including the Company and the
Subsidiaries) after the Closing Date.

 

For purposes of this Section 7.8(a), (i) reserves set forth on Section 7.8(a)
of the Seller Disclosure Letter shall be taken into account only after such
reserves have been reduced by the amount of any payment made to Seller pursuant
to Section 1.3 and (ii) no reserves set forth in Section 7.8(a) of
the Seller Disclosure Letter shall be taken into account for purposes of
Sections 7.8(a)(iv) and 7.8(a)(v). Any Losses incurred shall be reduced by the
amount of any Tax savings, whenever realized, arising from any increased
deductions, losses or credits, whenever realized, or by decreases in income,
gains or recapture of Tax credits. If any payment made pursuant to

 

46

 

this Section 7.8(a) is required by any relevant Tax authority to
be treated in a manner different from the treatment described in Section 7.9,
then any such payment shall be increased by the Tax liability resulting or
arising from the receipt of such payment (including any payment made pursuant
to this sentence). The indemnity set forth in this Section 7.8(a) shall
survive until the expiration of the statute of limitations applicable to the
matters covered hereby (giving effect to any waiver, mitigation or extension
thereof).

 

(b)                                 Purchaser Tax Indemnity. Purchaser shall indemnify and hold Seller
and its Affiliates harmless from and against Taxes imposed on the Company or
any Subsidiary for any taxable period beginning after the Closing Date (or
portion thereof). The indemnity set forth in this Section 7.8(b) shall
survive until the expiration of the statute of limitations applicable to the
matters covered hereby (giving effect to any waiver, mitigation or extension
thereof).

 

(c)                                  Procedure for Tax Claims.  Each
party hereto shall notify the other party in writing within fifteen (15) days
following receipt by such party of written notice of any pending or threatened
audits, notice of deficiency, proposed adjustment, assessment, examination or
other administrative or court proceeding, suit, dispute or other claim which
give rise to a claim for indemnification under this Section 7.8 (“Tax Claim”). The failure of any Indemnified
Party to give timely notice of a claim for indemnification or defense arising
under this Section 7.8 (including reasonable attorneys fees and expenses
and reasonable accountants’ fees and expenses incurred by a party in the
investigation or defense of any of the same or in asserting, preserving or
enforcing any such party’s rights arising under this Section 7.8) shall
not affect the rights to indemnification hereunder, except to the extent that
the Indemnifying Party is actually and materially prejudiced by such failure.
Seller shall have the right, at its sole discretion and expense, to represent
the interest of the Company and any Subsidiary in any Tax Claim relating to
Pre-Closing Tax Periods and to employ counsel of its choice; provided, however,
that if any Tax Claim could reasonably be expected to have a material adverse
effect on Purchaser, any Company, any Subsidiary or any of their affiliates in
any taxable period beginning after the Closing Date, the Tax Claim shall not be
settled or resolved without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld or delayed. In the case of a
Straddle Period, Seller shall be entitled to participate in the defense of any
Tax Claim relating in any part to Taxes attributable to the portion of such
Straddle Period deemed to end on or before the Closing Date and, at Seller’s
sole discretion and expense, may assume the control of such Tax Claim; provided, however, that if any Tax Claim
could reasonably be expected to have a material adverse effect on Purchaser,
any Company, any Subsidiary or any of their affiliates in any taxable period
beginning after the Closing Date, the Tax Claim shall not be settled or
resolved without Purchaser’s consent, which consent shall not be unreasonably
withheld or delayed. None of Purchaser, and of its Affiliates, the Company or
any Subsidiary may settle or otherwise dispose of any Tax Claim or which Seller
may have a liability under this Agreement without the prior written consent of
Seller, which consent shall not be unreasonably withheld or delayed. If Seller
elects not to participate and/or control a Tax Claim that it is entitled to
participate in and/or control under this Section 7.8(c), then Purchaser
shall control such Tax Claim, provided,
however, that (i) Purchaser shall keep Seller informed of all
material developments related to such Tax Claim on a timely basis and shall, in
good faith, (A) afford Seller the opportunity to review material submissions
related to such Tax Claim and (B) provide Seller with final copies of all such
submissions, (ii) the failure of Purchaser to satisfy clause (i) of this
sentence shall not affect the rights of the Purchaser Indemnified Parties to
indemnification hereunder, except to the

 

47

 

extent
that Seller is actually and materially prejudiced by such failure and (iii)
Purchaser shall not resolve such Tax Claim without Seller’s prior written
consent, which shall not be unreasonably withheld or delayed. In connection
with any Tax Claim, Purchaser and Seller and their Affiliates shall fully
cooperate in assisting the party controlling the Tax Claim to effectively
resist or resolve such Claim, including providing reasonable access to such
personnel, documents and records as may be necessary to resisting or resolving
the Tax Claim.

 

(d)                                 Resolution of all Tax Related Disputes.  If
Seller and Purchaser cannot agree on the calculation of any amount relating to
Taxes or the interpretation or application of any provision off this Agreement
relating to Taxes, such dispute shall be resolved by a nationally recognized
accounting firm mutually acceptable to each of Seller and Purchaser, whose
decision shall be final and binding upon all persons involved and whose
expenses shall be shared equally by Seller and Purchaser.

 

7.9         Tax Effect of Indemnification Payments.  All
indemnity payments made by Seller to Purchaser or any of its Affiliates
pursuant to this Agreement shall be treated for all Tax purposes as adjustments
to the consideration paid with respect to the Shares.

 

ARTICLE VIII

TERMINATION,
AMENDMENT AND WAIVER

 

8.1                                 Termination.  This Agreement may be terminated at any time
prior to the Closing Date as provided below:

 

(a)                                  by the mutual written consent of Seller and
Purchaser;

 

(b)                                 by either Seller or Purchaser if the sale and
transfer of the Shares pursuant to Article I of this Agreement shall not
have been consummated by March 31, 2005 (the “End Date”); provided,
however, that the right to terminate this Agreement under this Section 8.1(b)
shall not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the sale and transfer of the
Shares pursuant to Article I of this Agreement to occur on or before such
date and such action or failure to act constitutes a breach of this Agreement;

 

(c)                                  by either Seller or Purchaser if a
Governmental Entity shall have issued an order, decree or ruling or taken
any other action (including the failure to have taken an action), in any case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the sale and transfer of the Shares, which order, decree, ruling or
other action is final and nonappealable;

 

(d)                                 by Seller, upon a breach of any
representation, warranty, covenant or agreement on the part of Purchaser set
forth in this Agreement, or if any representation or warranty of Purchaser
shall have become untrue, in either case such that the conditions set forth in Section 6.2(a)
or Section 6.2(b) would not be satisfied as of the time of such breach or
as of the time such representation or warranty shall have become untrue, provided that if such inaccuracy in
Purchaser’s representations and warranties or breach by Purchaser is curable by
Purchaser prior to the End Date through the exercise of reasonable efforts,
then Seller may not

 

48

 

terminate
this Agreement under this Section 8.1(d) prior to thirty (30) days
following the receipt of written notice from Seller to Purchaser of such breach
(it being understood that Seller may not terminate this Agreement pursuant to
this Section 8.1(d) if it shall have materially breached this Agreement or
if such breach by Purchaser is cured so that such conditions would then be
satisfied);

 

(e)                                  by Purchaser, upon a breach of any
representation, warranty, covenant or agreement on the part of Seller set forth
in this Agreement, or if any representation or warranty of the Company shall
have become untrue, in either case such that the conditions set forth in Section 6.3(a)
or Section 6.3(b) would not be satisfied as of the time of such breach or
as of the time such representation or warranty shall have become untrue, provided that if such inaccuracy in Seller’s
representations and warranties or breach by Seller is curable by Seller prior
to the End Date through the exercise of reasonable efforts, then Purchaser may
not terminate this Agreement under this Section 8.1(e) prior to the End
Date thirty (30) days following the receipt of written notice from Purchaser to
Seller of such breach (it being understood that Purchaser may not terminate
this Agreement pursuant to this Section 8.1(e) if it shall have materially
breached this Agreement or if such breach by Seller is cured so that such
conditions would then be satisfied); and

 

(f)                                    by Purchaser, if Seller has not notified
Purchaser in writing within fifteen (15) business days of the date hereof that
the condition set forth in Section 6.2(e) has been satisfied.

 

8.2                                 Notice of Termination; Effect of
Termination.  Any termination of
this Agreement under Section 8.1 above will be effective immediately upon
the delivery of a valid written notice of the terminating party to the other
party hereto or, in the case of termination pursuant to Section 8.1(a), at
such time as set forth in such mutual written consent.  In the event of the termination of this
Agreement as provided in Section 8.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 5.2, Section 5.3,
this Section 8.2, Section 8.3 and Article IX, each of which
shall survive the termination of this Agreement, and (ii) nothing herein
shall relieve any party from liability for any willful breach of this
Agreement.  No termination of this
Agreement shall affect the obligations of the parties contained in the
Confidentiality Agreement, all of which obligations shall survive termination
of this Agreement in accordance with their terms.

 

49

 

8.3                                 Fees and Expenses.  All fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including fees
and expenses of financial advisors, financial sponsors, legal counsel and other
advisors, shall be paid by the party incurring such expenses whether or not the
transactions contemplated by this Agreement are consummated.  For the avoidance of doubt, neither the
Company nor any of the Subsidiaries shall be responsible for (a) any of the
fees and expenses incurred by or on behalf of Seller in connection with the
negotiation, execution or consummation of this Agreement or the Ancillary
Agreements, or (b) except as set forth below, any amounts due to any employee
or consultant of the Company or any Subsidiary in respect of stay bonuses,
transaction bonuses or similar payments arising from the consummation of the
transactions contemplated by this Agreement (excluding payments that require
subsequent action by Purchaser, the Company or any Subsidiary following the
Closing, including termination of the employment of any person), all of which
fees, expenses and amounts shall be paid by Seller.  Notwithstanding anything in this Agreement to
the contrary, the Company shall be solely responsible for the payment of (i)
any amounts of the “Actual Incentive Bonus,” as defined under the Executive
Change-in-Control, Incentive and Severance Agreements listed in Section 1.4(c)
of the Seller Disclosure Letter, and (ii) any amounts due under the Company’s
Employee Appreciation Plan.

 

8.4                                 Amendment.  Subject to applicable law, this Agreement may
be amended by the parties hereto at any time by execution of an instrument in
writing signed on behalf of each of Seller and Purchaser.

 

8.5                                 Extension; Waiver.  At any time prior to the Closing Date, either
party hereto may, to the extent legally allowed (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
made to such party contained herein or in any document delivered pursuant
hereto, and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein.  Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.  Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

 

ARTICLE IX

GENERAL
PROVISIONS

 

9.1                                 Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed duly given (i) on the
date of delivery if delivered personally, (ii) on the date of confirmation
of receipt (or, the first business day following such receipt if the date is not
a business day) of transmission by facsimile or email, or (iii) on the
date of confirmation of receipt (or, the first business day following such
receipt if the date is not a business day) if delivered by a nationally
recognized courier service.  All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:

 

50

 

	
   

  	
  if to Purchaser, to:

  
	
   

  	
   

  
	
   

  	
  TTI Holding Corporation

  
	
   

  	
  c/o Providence Equity Partners Inc.

  
	
   

  	
  50 Kennedy Plaza

  
	
   

  	
  18th Floor

  
	
   

  	
  Providence, RI 02903

  
	
   

  	
  Attention: Mark Pelson

  
	
   

  	
  Telephone No.: (401) 751-1710

  
	
   

  	
  Facsimile No.: (401) 751-1790

  
	
   

  	
  Email: m.pelson@provequity.com

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Warburg Pincus Private Equity VIII, L.P.

  
	
   

  	
  c/o Warburg Pincus LLC

  
	
   

  	
  466 Lexington Avenue

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Larry Bettino

  
	
   

  	
  Telephone No.: (212) 878-9499

  
	
   

  	
  Facsimile No.: (212) 878-9450

  
	
   

  	
  Email: lbettino@warburgpincus.com

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Willkie Farr & Gallagher LLP

  
	
   

  	
  787 Seventh Avenue

  
	
   

  	
  New York, NY 10010

  
	
   

  	
  Attention: Steven J. Gartner and David K. Boston

  
	
   

  	
  Telephone No.: (212) 728-8000

  
	
   

  	
  Facsimile No.: (212) 728-8111

  
	
   

  	
  Email: sgartner@willkie.com; dboston@willkie.com

  
	
   

  	
   

  
	
   

  	
  if to Seller, to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Science Applications International Corporation

  
	
   

  	
  10260 Campus Point Drive, M/S F3

  
	
   

  	
  San Diego, California 92121

  
	
   

  	
  Attention: Kevin A. Werner

  
	
   

  	
  Telephone No.: (858) 826-6637

  
	
   

  	
  Telecopy No.: (858) 826-2222

  
	
   

  	
  Email: kevin.a.werner@saic.com

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Science Applications International Corporation

  
	
   

  	
  10260 Campus Point Drive, M/S F3

  
	
   

  	
  San Diego, California 92121

  
	
   

  	
  Attention: Paul H. Greiner

  
				

 

51

 

	
   

  	
  Telephone No.: (858) 826-7360

  
	
   

  	
  Telecopy No.: (858) 826-4037

  
	
   

  	
  Email: paul.h.greiner@saic.com

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Heller Ehrman White & McAuliffe LLP

  
	
   

  	
  4350 La Jolla Village Drive, 7th Floor

  
	
   

  	
  San Diego, California 92122-1246

  
	
   

  	
  Attention: Stephen C. Ferruolo

  
	
   

  	
  Telephone No.: (858) 450-8400

  
	
   

  	
  Facsimile No.: (858) 450-8499

  
	
   

  	
  Email: sferruolo@hewm.com

  

 

9.2                                 Interpretation; Knowledge.

 

(a)                                  When a reference is
made in this Agreement to Exhibits, such reference shall be to an
Exhibit to this Agreement unless otherwise indicated.  When a reference is made in this Agreement to
Sections, such reference shall be to a section of this Agreement unless
otherwise indicated.  For purposes of
this Agreement, the words “include,”
“includes” and “including,” when used herein, shall be
deemed in each case to be followed by the words “without limitation.”  The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.  When reference is made herein to “the business of” the Company, such
reference shall be deemed to include the business of the Company and its
Subsidiaries, taken as a whole.  Except
as expressly set forth to the contrary in the Seller Disclosure Letter, an
exception or disclosure made in Seller Disclosure Letter with regard to a
representation of Seller shall be deemed made with respect to any other
representation by such party to which such exception or disclosure is
reasonably apparent from the context of such exception or disclosure.

 

(b)                                 For purposes of this Agreement, the term “Knowledge” means with respect to Seller,
with respect to any matter in question, the actual knowledge of the individuals
set forth in Section 9.2(b) of the Seller Disclosure Letter.

 

(c)                                  For purposes of this Agreement, the term “Material Adverse Effect,” means any change,
event, violation, inaccuracy, circumstance or effect (any such item, an “Effect”), individually or when taken
together with all other Effects that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, that (x) is
materially adverse to the business, assets, liabilities, financial condition or
results of operations of an entity taken as a whole with its subsidiaries or
(y) materially adversely affects the ability of an entity taken as a whole with
its subsidiaries to consummate the transactions contemplated by this Agreement;
provided, however, that in no
event shall changes, alone or in combination, affecting any of the industries
in which such entity operates generally or the United States or worldwide
economy generally, which changes in each case do not disproportionately affect
such entity in any material respect, be deemed to constitute an Effect or a
Material Adverse Effect.  For the
avoidance of doubt, any of the matters set forth on Section 9.2(c) of the
Seller Disclosure Letter shall not constitute an Effect or a Material Adverse
Effect.

 

52

 

(d)                                 For purposes of this Agreement, the term “Person” shall mean any individual,
corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate,
trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.

 

(e)                                  For purposes of this Agreement, the term “Affiliate” shall have the meaning given to
such term in Rule 12b-2 of Regulation 12B under the Securities Exchange Act of
1934, as amended.

 

(f)                                    For purposes of this Agreement, the term, “Confidentiality Agreements” shall mean,
collectively, (i) the Confidentiality Agreement, dated July 8, 2004,
between Seller and Providence Equity Partners Inc. and (ii) the Confidentiality
Agreement, dated July 8, 2004, between Seller and Warburg Pincus LLC.

 

9.3                                 Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

 

9.4                                 Entire Agreement; Third-Party
Beneficiaries.  This Agreement,
the Ancillary Agreements and the documents and instruments and other agreements
among the parties hereto as contemplated by or referred to herein and therein,
including the Seller Disclosure Letter (i) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement and (ii) are
not intended to confer upon any other Person any rights or remedies hereunder,
except as specifically provided, following the Closing Date, in Sections 5.7
and Article VII.

 

9.5                                 Severability.  In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the greatest extent possible, the economic,
business and other purposes of such void or unenforceable provision.

 

9.6                                 Other Remedies.  Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by law or
equity upon such party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. 
The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.

 

53

 

9.7                                 Governing Law; Waiver of Jury Trial; Arbitration of Patent
Claims.

 

(a)                                  Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ALL RESPECTS, INCLUDING AS TO
VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF
DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF).

 

(b)                                 Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
suit, action or other proceeding directly or indirectly arising out of, under
or in connection with this Agreement. Each party hereto (i) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such party would not, in the event of any action, suit or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement,
by, among other things, the mutual waiver and certifications in this Section 9.7(b).

 

(c)                                  Arbitration.  In the event the parties
cannot agree as to the value of non-cash consideration under Section 1.3(b),
the issue shall be settled by arbitration conducted in New York, New York, or
such other place as mutually agreed to by the parties, which shall be conducted
in accordance with the rules and procedures of the American Arbitration
Association (AAA) then in effect with respect to commercial disputes; provided, however, that discovery shall
be limited to depositions and interrogatories, document production and other
written discovery. The arbitration shall be final and binding upon all
parties.  The arbitration shall be
conducted by a single arbitrator with the relevant expertise on the valuation
of such consideration appointed in accordance with AAA rules.  The cost of any arbitration hereunder,
including the cost of the record or transcripts thereof, if any, administrative
fees, shall be divided evenly between the parties, or otherwise allocated in an
equitable manner, as determined by the arbitrator.  The parties shall use reasonable efforts to
enable the arbitrator to render its decision no later than sixty (60) days
after the submission of the dispute to the arbitrator.

 

54

 

9.8                                 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.

 

9.9                                 Assignment.  No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties, provided,
however, that (a) Seller may assign to any Affiliate its rights and
interests in and to the Additional Purchase Price, or any portion thereof and
(b) Purchaser may assign any or all of its (i) rights and obligations under
this Agreement to any wholly-owned subsidiary (provided that no such assignment
shall release the Purchaser from any obligation under this Agreement) or (ii)
rights under this Agreement to any Person that acquires all or any portion of
the stock or assets of the Company or any Subsidiary.  Any purported assignment in violation of this
Section 9.9 shall be void.  Subject
to the preceding sentence, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

9.10                           No
Waiver.  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.

 

*****

 

55

 

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

 

	
   

  	
  TTI HOLDING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   GEORGE
  M. H. ALLEN

  	
   

  
	
   

  	
   

  	
     George M. H. Allen

  
	
   

  	
   

  	
     Vice President

  
	
   

  	
   

  
	
   

  	
  SCIENCE APPLICATIONS INTERNATIONAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   WILLIAM A. ROPER, JR.

  	
   

  
	
   

  	
   

  	
     William A. Roper, Jr.

  	
   

  
	
   

  	
   

  	
     Corporate Executive Vice President

  	
   

  
					

 

[SIGNATURE PAGE TO STOCK
PURCHASE AGREEMENT

BETWEEN SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION

AND TTI HOLDING CORPORATION]

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