Document:

exv10w1

Exhibit 10.1

EXECUTION VERSION

[COOPER]

SECOND AMENDMENT TO

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

     THIS SECOND AMENDMENT TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”), dated as of August 5, 2010, is entered into among COOPER RECEIVABLES LLC (the
“Seller”), COOPER TIRE & RUBBER COMPANY (the “Servicer”), MARKET STREET FUNDING
LLC, as Related Committed Purchaser and as Conduit Purchaser and PNC BANK, NATIONAL ASSOCIATION, as
Administrator, as LC Participant, as LC Bank and as Purchaser Agent.

RECITALS

     1. The parties hereto are parties to the Amended and Restated Receivables Purchase Agreement,
dated as of September 14, 2007 (as amended, restated, supplemented or otherwise modified through
the date hereof, the “Agreement”); and

     2. The parties hereto desire to amend the Agreement as hereinafter set forth.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

     SECTION 1. Certain Defined Terms. Capitalized terms that are used but not defined
herein shall have the meanings set forth in the Agreement.

     SECTION 2. Amendments to the Agreement.

     2.1 Clause (A) of the proviso to Section 1.4(f) of the Agreement is hereby
amended and restated in its entirety as follows:

(A) the amount of any such reduction shall be not less than $100,000 for each
Purchaser Group and shall be an integral multiple of $100,000, and the sum of the
Aggregate Capital and the LC Participation Amount after giving effect to such
reduction shall be not less than the Minimum Usage Amount; and

     2.2 Clause (a) of Section 1.13 of the Agreement is hereby amended and restated
in its entirety as follows:

     (a) The Seller may request the LC Bank, upon two (2) Business Days’ prior written
notice submitted on or before 11:00 a.m., Pennsylvania time, to issue a Letter of Credit by
delivering to the Administrator a Letter of Credit Application (the “Letter of Credit
Application”), substantially in the form of Annex F hereto and a Purchase Notice, in
the form of Annex B hereto, in each case completed to the satisfaction of the
Administrator and the LC Bank, and such other certificates, documents and other papers and
information as the Administrator may reasonably request. The Seller also has the

 

 

right to give instructions and make agreements with respect to any Letter of Credit
Application and the disposition of documents, and to agree with the Administrator upon any
amendment, extension or renewal of any Letter of Credit.

     2.3 Clause (b) of Section 1.13 of the Agreement is hereby amended and restated
in its entirety as follows:

     (b) Each Letter of Credit shall, among other things, (i) provide for the payment of
sight drafts or other written demands for payment when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents described therein,
(ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s
date of issuance, extension or renewal, as the case may be, and in no event later than the
date that is twelve (12) months after the Facility Termination Date. Each Letter of Credit
shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, and any amendments or
revisions thereof adhered to by the LC Bank (the “UCP Rules”) or the International
Standby Practices (ISP98-International Chamber of Commerce Publication Number 590), and any
amendments or revisions thereof adhered to by the LC Bank (the “ISP98 Rules”), as
determined by the LC Bank.

     2.4 Clause (c) of Section 1.13 of the Agreement is hereby amended by deleting
the reference to the words “paragraph (a)” therein and substituting a reference to the words
“Section 1.13(a)” therefor.

     2.5 The Agreement is hereby amended by inserting, in the appropriate numerical order, the
following new Section 1.23:

     Section 1.23 Minimum Usage Amount Computation. The Minimum Usage Amount shall
be initially computed on August 5, 2010. Thereafter, until the Facility Termination Date,
such Minimum Usage Amount shall be automatically recomputed (or deemed to be recomputed) on
each Business Day.

     2.6 The address for notice for the Servicer for purposes of Section 6.4 of the
Agreement is hereby amended to be as set forth on Exhibit A hereto.

     2.7 Exhibit I to the Agreement is hereby amended by inserting, in the appropriate
alphabetical order, the following new definitions:

     “Adjusted LC Participation Amount” means, at any time, the LC Participation
Amount minus the amount on deposit in the LC Collateral Account.

     “Minimum Usage Amount” means, at any time, an amount greater than or equal to
the lesser of (A) $30,000,000 and (B) an amount determined as the sum of the Aggregate
Capital plus the LC Participation Amount necessary to cause the Purchased Interest to equal
100%.

     2.8 The definition of “Alternate Rate” set forth in Exhibit I to the Agreement is
hereby amended and restated in its entirety as follows:

- 2 -

 

     “Alternate Rate” for any Yield Period for any Portion of Capital funded by any
Purchaser other than through the issuance of Notes, means an interest rate per
annum equal to the greater of: (a) 4.00% per annum above the
Euro-Rate for such Yield Period, or (b) the Base Rate for such Yield Period;
provided, that the “Alternate Rate” for any day while a Termination Event or an
Unmatured Termination Event exists shall be an interest rate equal to the greater of (i)
2.0% per annum above the Base Rate in effect on such day and (ii) the
“Alternate Rate” as calculated in clause (a) above.

     2.9 The definition of “Canadian Currency Volatility Reserve” set forth in Exhibit I to
the Agreement is hereby amended by deleting the reference to the percentage “6.77%” therein and
substituting a reference to the percentage “12.65%” therefor.

     2.10 The definition of “Concentration Percentage” set forth in Exhibit I to the
Agreement is hereby amended and restated in its entirety as set forth below:

     “Concentration Percentage” means, at any time: (a) for any Group A Obligor,
20.0%, (b) for any Group B Obligor, 20.0%, (c) for any Group C Obligor, 13.3% and (d) for
any Group D Obligor, 8.0%; provided, however, that the Administrator (with
the prior written consent of the Majority Purchaser Agents ) may (to the extent the Rating
Agency Condition has been satisfied with respect thereto if required by the securitization
program of any Conduit Purchaser) approve higher Concentration Percentages for selected
Obligors.

     2.11 The definition of “Concentration Reserve Percentage” set forth in Exhibit I to
the Agreement is hereby amended and restated in its entirety as follows:

     “Concentration Reserve Percentage” means, at any time, the (a) largest of the
following: (i) the sum of the five (5) largest Group D Obligor Receivables balances (up to
the Concentration Percentage for each Obligor), (ii) the sum of the three (3) largest Group
C Obligor Receivables balances (up to the Concentration Percentage for each Obligor), (iii)
the sum of the two (2) largest Group B Obligor Receivables balances (up to the Concentration
Percentage for each Obligor), and (iv) the largest Group A Obligor Receivables balance (up
to the Concentration Percentage for such Obligor), divided by (b) the sum of the outstanding
balances of all Eligible Receivables.

     2.12 The last sentence of the definition of “CP Rate” set forth in Exhibit I to the
Agreement is hereby amended and restated in its entirety as follows:

          The “CP Rate” for any day while a Termination Event or an Unmatured Termination Event
exists shall be an interest rate equal to the greater of (a) 2.0% per annum above
the Base Rate as in effect on such day and (b) the Alternate Rate as calculated in the definition
thereof.

     2.13 The definition of “Dilution Reserve Percentage” set forth in Exhibit I to the
Agreement is hereby amended and restated in its entirety as follows:

- 3 -

 

     “Dilution Reserve Percentage” means, on any date, the product of (a) the
Dilution Horizon multiplied by (b) the sum of (i) 2.5 times the average of the Dilution
Ratios for the twelve most recent calendar months and (ii) the Dilution Spike Factor.

     2.14 The definition of “Excess Concentration” set forth in Exhibit I to the Agreement
is hereby amended by (a) deleting clause (ii) thereof in its entirety and, after deleting such
clause (ii), (b) renumbering clauses (iii) through (vi) thereof as clauses (ii) through (v).

     2.15 The definition of “Facility Termination Date” set forth in Exhibit I to the
Agreement is hereby amended by deleting each reference to the date “September 14, 2010” therein and
substituting a reference to the date “August 4, 2011” therefor.

     2.16 Clause (a)(i) of the definition of “Loss Reserve Percentage” set forth in Exhibit
I to the Agreement is hereby amended by deleting the reference to the number “two” therein and
substituting a reference to the number “2.5” therefor.

     2.17 The definition of “Minimum Dilution Reserve” set forth in Exhibit I to the
Agreement is hereby amended and restated in its entirety as follows:

     “Minimum Dilution Reserve” means at any time, the product of (a) the Aggregate
Capital plus the LC Participation Amount at the close of business of the Servicer on such
date multiplied by (b)(i) the Minimum Dilution Reserve Percentage divided by (ii) 1 minus
the Minimum Dilution Reserve Percentage.

     2.18 The second sentence of the definition of “Purchased Interest” set forth in Exhibit
I to the Agreement is hereby amended by deleting the reference to the term “LC Participation
Amount” therein and substituting a reference to the term “Adjusted LC Participation Amount”
therefor.

     2.19 The proviso to the definition of “Termination Day” set forth in Exhibit I to the
Agreement is hereby deleted in its entirety.

     2.20 Clause (a) of Section 2 of Exhibit II to the Agreement is hereby
amended and restated in its entirety as follows:

     (a) in the case of each Funded Purchase and the issuance of any Letters of Credit, the
Servicer shall have delivered to the Administrator and each Purchaser Agent on or before
such purchase or issuance, as the case may be, in form and substance satisfactory to the
Administrator and each Purchaser Agent, a completed pro forma Information Package to reflect
the level of the Aggregate Capital, the LC Participation Amount and related reserves and the
calculation of the Purchased Interest after such subsequent purchase or issuance, as the
case may be, and a completed Purchase Notice in the form of Annex B (in the case of
such purchase) and a completed Letter of Credit Application in the form of Annex F
(in the case of such issuance); and

     2.21 Clause (g) of Exhibit V to the Agreement is hereby amended and restated
in its entirety as follows:

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     (g) (i) the (A) Default Ratio shall exceed 2.0%, (B) Delinquency Ratio shall exceed
4.0%, (ii) the average for three consecutive calendar months of: (A) the Default Ratio shall
exceed 1.5%, (B) the Delinquency Ratio shall exceed 3.0%, or (C) the Dilution Ratio shall
exceed 10.0% or (iii) Days’ Sales Outstanding exceeds 68 days;

     2.22 Exhibit V to the Agreement is hereby amended by (a) deleting the word “or” at the
end of clause (k) thereof, (b) deleting the period at the end of clause (l) thereof
and substituting therefor the following text “; or” and (c) inserting, in the appropriate
alphabetical order, the following new clause (m):

     (m) the sum of the Aggregate Capital plus the LC Participation Amount shall be less
than the Minimum Usage Amount for two (2) Business Days after the earlier of the Seller’s or
Servicer’s knowledge or notice thereof.

     SECTION
3. Representations and Warranties. Each of the Seller and the Servicer hereby
represents and warrants to the Administrator, each Purchaser and the Purchaser Agent as follows:

     (a) Representations and Warranties. The representations and warranties made by
it in the Transaction Documents are true and correct as of the date hereof (unless stated to
relate solely to an earlier date, in which case such representations or warranties were true
and correct as of such earlier date).

     (b) Enforceability. The execution and delivery by such Person of this
Amendment, and the performance of each of its obligations under this Amendment and the
Agreement, as amended hereby, are within each of its organizational powers and have been
duly authorized by all necessary organizational action on its part. This Amendment and the
Agreement, as amended hereby, are such Person’s valid and legally binding obligations,
enforceable in accordance with its terms.

     (c) No Default. Both before and immediately after giving effect to this
Amendment and the transactions contemplated hereby, no Termination Event or Unmatured
Termination Event exists or shall exist.

     SECTION 4. Effect of Amendment. All provisions of the Agreement, as expressly amended
and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes
effective, all references in the Agreement (or in any other Transaction Document) to “this
Agreement”, “hereof”, “herein” or words of similar effect referring to the Agreement shall be
deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be
deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Agreement
other than as set forth herein.

     SECTION 5. Effectiveness. This Amendment shall become effective as of the date hereof
upon receipt by the Administrator of each of the following, each in form and substance satisfactory
to the Administrator:

     (a) duly executed counterparts of this Amendment; and

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     (b) duly executed counterparts of that certain Purchaser Group Fee Letter, dated as of the
date hereof, by and among the Administrator, Market Street Funding LLC, the Seller and the Servicer
(including receipt of the “Structuring Fee” referred to therein).

     SECTION 6. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties on separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute but one and the same
instrument. Delivery by facsimile or email of an executed signature page of this Amendment shall be
effective as delivery of an originally executed counterpart hereof.

     SECTION 7. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York.

     SECTION 8. Section Headings. The various headings of this Amendment are included for
convenience only and shall not affect the meaning or interpretation of this Amendment, the
Agreement or any provision hereof or thereof.

[Signatures begin on next page]

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     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written
above.

	 	 	 	 	 
	 	COOPER RECEIVABLES LLC, as Seller

 	 
	 	By:  	/s/ C. F. Nagy
 	 
	 	Name:	Charles F. Nagy 	 
	 	Title:	Assistant Treasurer 	 
	 
	 	 	 
	 	By:  	                                      /s/ S. O. Schroeder
 	 
	 	Name: 	Stephen O. Schroeder 	 
	 	Title:	President and Treasurer 	 
	 
	 	COOPER TIRE & RUBBER COMPANY, as Servicer

 	 
	 	By:  	
/s/ Bradley E. Hughes
 	 
	 	Name: 	Bradley E. Hughes 	 
	 	Title:	Vice President and Chief Financial Officer 	 
	 
	 	 	 
	 	By:  	                                     /s/ S. O. Schroeder
 	 
	 	Name: 	Stephen O. Schroeder 	 
	 	Title:	Vice President and Treasurer 	 
	 

Second Amendment to A&R RPA (Cooper)

S-1

 

	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as Administrator

 	 
	 	By:  	/s/ Robyn A. Reeher
 	 
	 	 	Name:  	Robyn A. Reeher 	 
	 	 	Title:  	Vice President 	 
	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as Purchaser Agent

 	 
	 	By:  	/s/ Robyn A. Reeher
 	 
	 	 	Name:  	Robyn A. Reeher 	 
	 	 	Title:  	Vice President 	 
	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as the LC Bank and as an LC Participant

 	 
	 	By:  	/s/ Joseph G. Moran
 	 
	 	 	Name:  	Joseph G. Moran 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	MARKET STREET FUNDING LLC,

as a Related Committed Purchaser and as Conduit
     
Purchaser

 	 
	 	By:  	/s/ Doris J. Hearn
 	 
	 	 	Name:  	Doris J. Hearn 	 
	 	 	Title:  	Vice President 	 
	 

Second Amendment to A&R RPA (Cooper)

S-2

 

EXHIBIT A

ADDRESS FOR NOTICES

Cooper Tire & Rubber Company

701 Lima Avenue

Findlay, OH 45840

Attention: Bradley E. Hughes, Vice President and Chief Financial Officer

Telephone: (419) 424-4320

Facsimile: (419) 424-4212

Copy to:

James E. Kline, General Counsel

Cooper Tire & Rubber Company

701 Lima Avenue

Findlay, OH 45840

Telephone: (419) 427-4757

Facsimile: (419) 831-6876

Second Amendment to A&R RPA (Cooper)

S-3exv10w39

Exhibit 10.39

AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

HARMONIC INC.

ORINDA ACQUISITION CORPORATION

ORINDA ACQUISITION, LLC

OMNEON INC.

AND

SHAREHOLDER REPRESENTATIVE SERVICES, LLC, AS REPRESENTATIVE

Dated as of May 6, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1 Certain Defined Terms
	 	 	2	 
	1.2 Additional Defined Terms
	 	 	14	 
	1.3 Interpretations
	 	 	17	 
	ARTICLE II THE MERGER
	 	 	18	 
	2.1 The Merger
	 	 	18	 
	2.2 The Closing
	 	 	18	 
	2.3 Effective Time of First Step Merger and Second Step Merger
	 	 	19	 
	2.4 Effect of the First Step Merger and Second Step Merger
	 	 	19	 
	2.5 Organizational Documents
	 	 	19	 
	2.6 Directors and Officers
	 	 	20	 
	2.7 Effect of First Step Merger on Capital Stock of Constituent Corporations
	 	 	20	 
	2.8 Dissenting Shares
	 	 	23	 
	2.9 Determination of Final Adjusted Closing Cash Consideration
	 	 	23	 
	2.10 Closing Payment Procedures
	 	 	26	 
	2.11 No Further Ownership Rights in Company Capital Stock
	 	 	27	 
	2.12 No Liability
	 	 	27	 
	2.13 Transfers of Ownership
	 	 	27	 
	2.14 Surrender of Certificates; Lost, Stolen or Destroyed Certificates
	 	 	28	 
	2.15 Additional Adjustments to Merger Consideration
	 	 	28	 
	2.16 Further Assurances
	 	 	28	 
	2.17 Release of Escrow Fund
	 	 	28	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	28	 
	3.1 Organization of the Company
	 	 	29	 
	3.2 Company Capital Structure
	 	 	29	 
	3.3 Subsidiaries
	 	 	31	 
	3.4 Authority
	 	 	32	 
	3.5 No Conflict
	 	 	32	 
	3.6 Consents
	 	 	32	 
	3.7 Company Financial Statements
	 	 	33	 
	3.8 Internal Controls
	 	 	33	 
	3.9 No Undisclosed Liabilities
	 	 	34	 
	3.10 No Changes
	 	 	34	 
	3.11 Accounts Receivable
	 	 	34	 
	3.12 Tax Matters.
	 	 	34	 
	3.13 Restrictions on Business Activities
	 	 	37	 
	3.14 Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment
	 	 	37	 
	3.15 Intellectual Property
	 	 	38	 
	3.16 Material Contracts
	 	 	42	 
	3.17 Interested Party Transactions
	 	 	45	 
	3.18 Governmental Authorization
	 	 	45	 
	3.19 Litigation
	 	 	45	 
	3.20 Minute Books
	 	 	46	 
	3.21 Environmental Matters
	 	 	46	 
	3.22 Brokers’ and Finders’ Fees; Third Party Expenses
	 	 	47	 
	3.23 Employee Benefit Plans and Compensation
	 	 	47	 
	3.24 Insurance
	 	 	50	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	3.25 Compliance with Laws
	 	 	50	 
	3.26 Anti-Corruption and Anti-Bribery
	 	 	50	 
	3.27 Substantial Customers and Suppliers
	 	 	51	 
	3.28 Export and Import Control Laws
	 	 	51	 
	3.29 Contracts with Governmental Entities
	 	 	52	 
	3.30 Complete Copies of Materials; Information Supplied
	 	 	52	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS
	 	 	53	 
	4.1 Organization
	 	 	53	 
	4.2 Authority
	 	 	53	 
	4.3 No Conflict
	 	 	53	 
	4.4 Consents
	 	 	54	 
	4.5 Litigation.
	 	 	54	 
	4.6 Available Funds
	 	 	54	 
	4.7 Parent Common Stock
	 	 	54	 
	4.8 SEC Documents
	 	 	54	 
	4.9 No Changes
	 	 	55	 
	4.10 Anti-Corruption and Anti-Bribery
	 	 	55	 
	4.11 Information Supplied
	 	 	55	 
	4.12 Parent Capital Structure
	 	 	55	 
	ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME
	 	 	56	 
	5.1 Affirmative Conduct of the Business of the Company
	 	 	56	 
	5.2 Restrictions on Conduct of the Business of the Company
	 	 	57	 
	5.3 Conduct of the Business of the Parent
	 	 	60	 
	5.4 Disqualifying Actions
	 	 	60	 
	5.5 Procedures for Requesting Consent
	 	 	60	 
	ARTICLE VI ADDITIONAL AGREEMENTS
	 	 	61	 
	6.1 Stockholder Approval; Fairness Hearing
	 	 	61	 
	6.2 Alternative Transaction Proposals
	 	 	63	 
	6.3 Access to Information
	 	 	66	 
	6.4 Notification of Certain Matters
	 	 	66	 
	6.5 Merger Notification
	 	 	67	 
	6.6 Notice to Holders of Company Options and Company RSUs
	 	 	68	 
	6.7 Confidentiality
	 	 	68	 
	6.8 Public Disclosure
	 	 	68	 
	6.9 Commercially Reasonable Best Efforts to Complete
	 	 	68	 
	6.10 Contract Consents, Amendments and Terminations
	 	 	69	 
	6.11 Pre-Closing Employee Matters
	 	 	69	 
	6.12 Post-Closing Employee Matters
	 	 	70	 
	6.13 Agreements and Documents Delivered at Signing or Immediately Following Signing
	 	 	71	 
	6.14 Termination of Certain Benefit Plans
	 	 	71	 
	6.15 Expenses and Fees
	 	 	71	 
	6.16 Tax Matters
	 	 	71	 
	6.17 Insurance
	 	 	73	 
	6.18 S-8 Registration
	 	 	73	 
	6.19 NASDAQ Global Select Market Listing
	 	 	74	 
	6.20 Further Assurances
	 	 	74	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII CONDITIONS TO THE MERGER
	 	 	74	 
	7.1 Conditions to Obligations of Each Party to Effect the Merger
	 	 	74	 
	7.2 Conditions to the Obligations of Parent and Merger Subs
	 	 	74	 
	7.3 Conditions to Obligations of the Company
	 	 	78	 
	ARTICLE VIII SURVIVAL; INDEMNIFICATION; ESCROW ARRANGEMENTS
	 	 	79	 
	8.1 Survival
	 	 	79	 
	8.2 Indemnification
	 	 	79	 
	8.3 Indemnification Limitations
	 	 	81	 
	8.4 No Indemnification Limitations
	 	 	82	 
	8.5 Indemnification Claims Procedures
	 	 	83	 
	8.6 Third-Party Claims
	 	 	85	 
	8.7 Escrow Arrangements
	 	 	85	 
	8.8 Representative
	 	 	86	 
	ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
	 	 	87	 
	9.1 Termination
	 	 	87	 
	9.2 Notice of Termination; Effect of Termination
	 	 	89	 
	9.3 Fees
	 	 	89	 
	9.4 Amendment
	 	 	90	 
	9.5 Extension; Waiver
	 	 	90	 
	ARTICLE X GENERAL PROVISIONS
	 	 	90	 
	10.1 Notices
	 	 	90	 
	10.2 Counterparts
	 	 	92	 
	10.3 Telecopy Execution and Delivery
	 	 	92	 
	10.4 Entire Agreement
	 	 	92	 
	10.5 No Third Party Beneficiaries
	 	 	92	 
	10.6 Assignment
	 	 	92	 
	10.7 Severability
	 	 	92	 
	10.8 Other Remedies
	 	 	92	 
	10.9 Governing Law
	 	 	92	 
	10.10 Consent to Jurisdiction
	 	 	92	 
	10.11 WAIVER OF JURY TRIAL
	 	 	93	 

-iii-

 

INDEX OF EXHIBITS AND SCHEDULES

	 	 	 
	Exhibits
	 	 
	Exhibit A
	 	Form of Securityholder Voting Agreement
	Exhibit B
	 	Form of 280G Waiver
	Exhibit C
	 	Form of Certificate of Merger
	Exhibit D
	 	Form of Escrow Agreement
	Exhibit E
	 	Form of Letter of Transmittal
	Exhibit F
	 	Form of Proprietary Information Agreement
	Exhibit G
	 	Forms of Terminating Employee Release
	Exhibit H
	 	Form of Director and Officer Resignation Letter
	Exhibit I
	 	Form of Opinion of Fenwick & West LLP
	Exhibit J
	 	Form of Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
	 
	Schedules
	 	 
	Schedule I
	 	Designated Stockholders
	Schedule 1.1(u)
	 	Proposed Company Products
	Schedule 1.1(yy)
	 	Executive Employees
	Schedule 1.1(mmm)
	 	Key Employees
	Schedule 1.1(ssss)
	 	Form of Spreadsheet
	Schedule 6.10
	 	Excluded Change of Control Payments
	Schedule 7.2(f)(i)
	 	Required Consents, Waivers and Approvals
	Schedule 7.2(f)(ii)
	 	Terminated Contracts
	Schedule 7.2(f)(iii)
	 	Notices
	Schedule 7.2(l)
	 	Liens to be Released

-iv-

 

AGREEMENT AND PLAN OF REORGANIZATION

     THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made and entered into as of May
6, 2010 by and among Harmonic Inc., a Delaware corporation (“Parent”), Orinda Acquisition
Corporation, a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub
One”), Orinda Acquisition, LLC, a Delaware limited liability company and a direct, wholly-owned
subsidiary of Parent (“Merger Sub Two” and together with Merger Sub One, the “Merger Subs”), Omneon
Inc., a Delaware corporation (the “Company”), and Shareholder Representative Services LLC, a
Colorado limited liability company, solely in its capacity as representative (the
“Representative”). All capitalized terms that are used in this Agreement shall have the respective
meanings ascribed thereto in Article I.

RECITALS

     A. Each of the respective board of directors of Parent, the Merger Subs and the Company has
approved this Agreement and the transactions contemplated hereby, and deems it advisable and in the
best interests of their respective stockholders to enter into this Agreement and consummate the
transactions contemplated hereby pursuant to which, among other things, Merger Sub One will be
merged with and into the Company, with the Company continuing as the surviving entity (the “First
Step Merger”) in accordance with the applicable provisions of the General Corporation Law of the
State of Delaware (the “DGCL”). As soon as practicable following the First Step Merger, and as part
of a single integrated transaction, except as set forth in Section 2.1(c), Parent will cause the
Company, as the surviving entity in the First Step Merger, to merge with and into Merger Sub Two,
with Merger Sub Two continuing as the surviving entity (the “Second Step Merger” and, taken
together with the First Step Merger, unless otherwise provided in Section 2.1(c), the “Merger”).
For U.S. federal income Tax purposes, it is intended that, if the Second Step Merger occurs, the
Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and
that this Agreement will be, and is hereby, adopted as a “plan of reorganization” within the
meaning of Section 1.368-2(g) of the U.S. Income Tax Regulations promulgated under the Code (the
“Treasury Regulations”).

     B. Pursuant to the First Step Merger, among other things, and subject to the terms and
conditions of this Agreement, (i) all issued and outstanding Company Capital Stock will be
converted into the right to receive a portion of the Merger Consideration set forth herein, (ii)
all outstanding unvested Company Options not exercised prior to the Effective Time and all unvested
Company RSUs as of the Effective Time (other than those held by Terminating Employees or
non-employee directors of the Company) will be assumed by Parent in accordance with the terms
hereof, and (iii) all outstanding vested Company Options not exercised prior to the Effective Time
and all vested Company RSUs not yet settled as of the Effective Time will be converted into the
right to receive the Per Share Cash Consideration and the Per Share Stock Consideration (less any
applicable exercise price in the case of Company Options) as if such Company Options and Company
RSUs had been exercised or settled prior to the Effective Time.

     C. Contemporaneously with the execution and delivery of this Agreement by the parties hereto,
as a material inducement to Parent and Merger Subs to enter into this Agreement, certain holders of
shares of Company Capital Stock set forth on Schedule I hereto (each, a “Designated Stockholder”)
shall execute and deliver to Parent and Merger Subs, Securityholder Voting Agreements, in
substantially the form attached hereto as Exhibit A (each, a “Securityholder Voting Agreement” and
collectively, the “Securityholder Voting Agreements”).

     D. Contemporaneously with the execution and delivery of this Agreement by the parties hereto,
as a material inducement to Parent and Merger Subs to enter into this Agreement, each of the
Executive Employees
shall enter into or execute an offer letter and Parent’s form of confidentiality agreement,
(collectively, the “Executive Employee Offer Letters”), each to be effective as of the Effective
Time.

 

 

     E. Following the execution and delivery of this Agreement by the parties hereto, each Person
who might receive any payments and/or benefits in connection with the First Step Merger that
constitute “parachute payments” pursuant to Section 280G of the Code shall execute a 280G Waiver,
each in substantially the form attached hereto as Exhibit B (the “280G Waiver”), pursuant to which
each such Person will waive any right or entitlement to such payments and/or benefits to the extent
the value of such payments and/or benefits exceeds 2.99 times such Person’s base amount determined
in accordance with Section 280G of the Code and the regulations promulgated thereunder, unless the
requisite Company Stockholder approval of those payments and/or benefits is obtained pursuant to
Section 280G of the Code so that such payment and/or benefits do not constitute “parachute
payments” thereunder.

     F. The Company on the one hand, and Parent and the Merger Subs, on the other hand, desire to
make certain representations, warranties, covenants and other agreements in connection with the
Merger and the other transactions contemplated hereby.

     NOW, THEREFORE, in consideration of the mutual agreements, covenants and other premises set
forth herein, the mutual benefits to be gained by the performance thereof, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted,
the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Certain Defined Terms. For all purposes of and under this Agreement, the following
capitalized terms shall have the following respective meanings:

          (a) “401(k) Plan” shall mean any Company Employee Plan intended to include a Code
Section 401(k) arrangement.

          (b) “Acquisition” shall mean, for the purposes of Section 9.3(b) only, with respect
to the Company, any of the following transactions (other than the transactions contemplated by this
Agreement): (i) any purchase or acquisition by any Person or “group” (as defined under
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules
and regulations thereunder) of a fifty percent (50%) or more interest in the total outstanding
voting securities of the Company, or any tender offer or exchange offer that if consummated would
result in any Person or “group” beneficially owning fifty percent (50%) or more of the total
outstanding voting securities of the Company; (ii) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the Company pursuant to
which the equity interests held in the Company and retained following such transaction or issued to
or otherwise received in such transaction by the stockholders of the Company immediately preceding
such transaction constitute less than fifty percent (50%) of the aggregate equity interests in the
surviving or resulting entity of such transaction or any direct or indirect parent thereof; or
(iii) any sale, lease, exchange, transfer, license (other than in the ordinary course of business
consistent with past practices or in connection with sales of Company Products) or other
disposition (other than in the ordinary course of business consistent with past practices or in
connection with sales of Company Products) (including by way of joint venture) by the Company of
assets (including capital stock or other ownership interests in Subsidiaries of the Company)
representing fifty percent (50%) or more of the aggregate fair market value of the consolidated
assets of the Company, taken as a whole, immediately prior to such sale.

          (c) “Affiliate” shall mean with respect to any Person, any Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, such Person.

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          (d) “Affiliated Group” shall mean an affiliated, consolidated, combined, unitary or
similar group for Tax purposes, including any arrangement for group or consortium relief or similar
arrangement.

          (e) “Aggregate Option Exercise Price” shall mean the total aggregate exercise price
of all Company Options that are vested as of immediately prior to the Effective Time; (including,
for purposes of clarification, any Company Options that will be cancelled and become Cancelled
Equity pursuant to Section 2.7(f)(ii)).

          (f) “Aggregate Stock Consideration” shall mean 17,128,176 shares of Parent Common
Stock.

          (g) “Alternative Transaction Proposal” shall mean, with respect to the Company, any
offer, expression of interest or proposal (whether binding or non-binding), or any public
announcement of any intention to make any such offer, expression of interest or proposal, whether
made to the Company or its stockholders, relating to any transaction or series of related
transactions involving: (i) any purchase or acquisition by any Person or “group” (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than a twenty
percent (20%) interest in the total outstanding voting securities of the Company, or any tender
offer or exchange offer that if consummated would result in any Person or “group” beneficially
owning twenty percent (20%) or more of the total outstanding voting securities of the Company;
(ii) any merger, consolidation, business combination or similar transaction involving the Company;
(iii) any sale, lease, exchange, transfer, license (other than in the ordinary course of business
consistent with past practices or in connection with sales of Company Products) or other
disposition (including by way of joint venture) of assets (including capital stock or other
ownership interests in Subsidiaries of the Company) representing twenty percent (20%) or more of
the aggregate fair market value of the consolidated assets of the Company; (iv) any liquidation,
dissolution, reorganization or recapitalization of the Company; or (v) the declaration or payment
of any extraordinary dividend, whether of cash or other property, by the Company; provided,
however, for the sake of clarity, the transactions among Parent, Merger Subs and the Company
contemplated by this Agreement shall not be deemed an Alternative Transaction Proposal.

          (h) “Anti-Corruption and Anti-Bribery Laws” shall mean the Foreign Corrupt Practices
Act of 1977, as amended, any rules or regulations thereunder, or any other applicable United States
or foreign anti-corruption or anti-bribery laws or regulations.

          (i) “Business Day” shall mean each day that is not a Saturday, Sunday or other day
on which Parent is closed for business or banking institutions located in San Francisco, California
are authorized or obligated by Law or executive order to close.

          (j) “Cash Consideration Percentage” shall mean the percentage obtained by dividing
(i) the Preliminary Adjusted Closing Cash Consideration by (ii) the sum of (A) the Preliminary
Adjusted Closing Cash Consideration and (B) the product of (I) the Aggregate Stock Consideration
multiplied by (II) the Parent Common Stock Value.

          (k) “Change of Recommendation” shall mean the withholding, withdrawal or amendment,
qualification or modification (in a manner adverse to Parent), by the Company’s board of directors
(or any committee thereof) of its recommendation in favor of adoption and approval of this
Agreement, and, in the case of a tender or exchange offer made by a third party directly to the
Company’s stockholders, a failure to recommend that the Company’s stockholders reject such tender
or exchange offer; provided, however, that solely in response to an unsolicited tender offer
similar to that described in Rule 14d-9(e) of the Exchange Act, a
“stop, look and listen” communication by the Company’s board of directors to the Company’s

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stockholders substantially similar to that permitted pursuant to Rule 14d-9(f) of the Exchange Act
shall not be deemed to be a Change of Recommendation.

          (l) “Claim” shall mean any suit, action, audit by any Governmental Entity, claim,
arbitration, proceeding or investigation by any Governmental Entity or any other Person.

          (m) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (n) “Company Capital Stock” shall mean the Company Common Stock, the Company
Preferred Stock, and any other shares of capital stock of the Company.

          (o) “Company Common Stock” shall mean shares of the common stock, par value $0.001
per share, of the Company.

          (p) “Company Employee Plan” shall mean any plan, program, policy, practice,
contract, agreement, payroll practice or other arrangement, whether written or unwritten, providing
for compensation, bonus pay, commission pay, severance, change of control pay, termination pay,
deferred compensation, performance awards, phantom stock, stock option or stock-related awards,
commission, vacation, incentive, profit sharing, pension, payroll practice, retirement benefits,
welfare benefits, fringe benefits or other employee benefits or remuneration of any kind, whether
funded or unfunded, including, but not limited to, each “employee benefit plan,” within the meaning
of Section 3(3) of ERISA which is or has been maintained, contributed to, or required to be
contributed to, by the Company or any ERISA Affiliate for the benefit of any current Employee, or
any former Employee with respect to which the Company has any current or future liability or
obligation, or with respect to which the Company or any ERISA Affiliate has or may have any
liability or obligation and any International Employee Plan.

          (q) “Company Intellectual Property” shall mean any and all Intellectual Property
Rights that are owned or purported to be owned by or exclusively licensed to the Company.

          (r) “Company Material Adverse Effect” shall mean any change, event, circumstance,
condition or effect (any such item, an “Effect”), individually or when taken together with all
other Effects that have occurred on or prior to the date of determination of the occurrence of the
Company Material Adverse Effect, (i) that is or would reasonably be expected to be or become
materially adverse to the condition (financial or otherwise), business, assets (including
intangible assets), liabilities, employees, operations or results of operations of the Company,
taken as a whole, or (ii) that could reasonably be expected to materially impede the authority or
ability of the Company to consummate the transactions contemplated by this Agreement in accordance
with the terms hereof and applicable Law, except in each case to the extent that any such Effect
directly results from any of the following: (A) changes in general economic conditions or changes
affecting the industry generally in which the Company operates or acts of war or terrorism
(provided that such changes or acts do not affect the Company materially disproportionately as
compared to other companies operating in the same industries or geographies as such entity);
(B) the announcement of this Agreement or the pendency of the transactions contemplated hereby; or
(C) any changes in applicable Law or GAAP (provided that such changes do not affect the Company
materially disproportionately as compared to other companies operating in the same industries or
geographies as such entity).

          (s) “Company Option” shall mean any issued and outstanding option (including
commitments to grant options, but excluding Company Preferred Stock) to purchase or otherwise
acquire shares of Company Capital Stock (whether or not vested).

          (t) “Company Preferred Stock” shall mean shares of Company Series A-1 Preferred
Stock, Company Series A-2.1 Preferred Stock, Company Series A-2.2 Preferred Stock, Company Series
A-3

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Preferred Stock, and Company Series A-4 Preferred Stock, Company Series A-5 Preferred Stock,
Company Series A-6 Preferred Stock, Company Series B-1 Preferred Stock and Company Series C-1
Preferred Stock.

          (u) “Company Products” shall mean all products, technologies and services owned, or
made by the Company and currently marketed, provided, distributed, imported for resale, sold or
licensed by or on behalf of Company since its inception (the “Current Company Products”) and
products and services which the Company proposes to make commercially available, market,
distribute, sell, import for resale, or license that are listed on Schedule 1.1(u) (the “Proposed
Company Products”).

          (v) “Company RSUs” shall mean restricted stock units (“RSUs”) of the Company issued
and outstanding pursuant to the Stock Plans that are settled by issuance of shares of Company
Common Stock or the payment of the cash value equivalent of shares of Company Common Stock.

          (w) “Company Securityholder” shall mean any holder of any Company Capital Stock, or
any securities that are exchangeable or convertible into Company Capital Stock, including Company
Options and Company RSUs, immediately prior to the Effective Time.

          (x) “Company Series A-1 Preferred Stock” shall mean the Series A-1 Preferred Stock,
par value $0.001 per share, of the Company.

          (y) “Company Series A-2.1 Preferred Stock” shall mean the Series A-2.1 Preferred
Stock, par value $0.001 per share, of the Company.

          (z) “Company Series A-2.2 Preferred Stock” shall mean the Series A-2.2 Preferred
Stock, par value $0.001 per share, of the Company.

          (aa) “Company Series A-3 Preferred Stock” shall mean the Series A-3 Preferred Stock,
par value $0.001 per share, of the Company.

          (bb) “Company Series A-4 Preferred Stock” shall mean the Series A-4 Preferred Stock,
par value $0.001 per share, of the Company.

          (cc) “Company Series A-5 Preferred Stock” shall mean the Series A-5 Preferred Stock,
par value $0.001 per share, of the Company.

          (dd) “Company Series A-6 Preferred Stock” shall mean the Series A-6 Preferred Stock,
par value $0.001 per share, of the Company.

          (ee) “Company Series B-1 Preferred Stock” shall mean the Series B-1 Preferred Stock,
par value $0.001 per share, of the Company.

          (ff) “Company Series C-1 Preferred Stock” shall mean the Series C-1 Preferred Stock,
par value $0.001 per share, of the Company.

          (gg) “Company Stockholder” shall mean any holder of any Company Capital Stock
immediately prior to the Effective Time and any holder of Cancelled Equity.

          (hh) “Continuing Employee” shall mean each employee of the Company who (i) receives
and accepts an offer of at-will employment from Parent or any of its Subsidiaries prior to the
Effective Time and (ii) is an employee of Parent or any of its Subsidiaries immediately following
the Effective Time.

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          (ii) “Contract” shall mean any mortgage, indenture, lease, contract, covenant, plan,
insurance policy or other agreement, instrument, arrangement, understanding or commitment, permit,
concession, franchise or license, whether written or oral.

          (jj) “Copyleft License” shall mean any license to Open Source Materials that
requires, as a condition of use, modification and/or distribution of software licensed under such
license, that such software, or other software or content incorporated into, derived from, used, or
distributed with such software: (i) be distributed in a form other than binary form (e.g., source
code form), (ii) be licensed for the purpose of preparing derivative works, (iii) be licensed under
terms that allow the Company Products or portions thereof or interfaces therefor to be reverse
engineered, reverse assembled or disassembled (other than by operation of law), or (iv) be
redistributable at no license fee. Copyleft Licenses include without limitation the GNU General
Public License, the GNU Lesser General Public License, the Mozilla Public License, the Common
Development and Distribution License, and the Eclipse Public License.

          (kk) “DOL” shall mean the United States Department of Labor.

          (ll) “Employee” shall mean any current employee, consultant, independent contractor
or director of the Company or any ERISA Affiliate.

          (mm) “Employee Agreement” shall mean each management, employment, severance, change
of control, separation, sales, commission, settlement, consulting, contractor, relocation,
repatriation, expatriation, loan, visa, work permit or other Contract (including, any offer letter
or any agreement providing for acceleration of Company Options, Restricted Shares, Company RSUs or
similar equity awards, or any other Contract providing for compensation or benefits) between the
Company or any ERISA Affiliate and any Employee, whether written or unwritten, or with respect to
which the Company or any ERISA Affiliate has or would reasonably be expected to have any liability
or obligation.

          (nn) “Equity Exchange Ratio” shall mean the quotient obtained by dividing (i) the
quotient of (A) the sum of (x) the Preliminary Adjusted Closing Cash Consideration plus (y) the
product of (I) the Aggregate Stock Consideration multiplied by (II) the Parent Common Stock Value
minus (z) the Series A-2.2 Preferred Preference divided by (B) the sum of (x) the number of shares
of Company Common Stock at the Effective Time (assuming conversion of all shares of Company
Preferred Stock other than the outstanding share of Company Series A-2.2 Preferred Stock) plus (y)
the number of shares of Company Common Stock underlying the Assumed Equity plus (z) the number of
shares of Company Common Stock underlying the Cancelled Equity divided by (ii) the Parent Common
Stock Value; provided, however, that if the Parent Closing Price exceeds the Parent Common Stock
Value, then, solely with respect to Company Options, the Equity Exchange Ratio shall be
recalculated at Closing by substituting the Parent Closing Price for the Parent Common Stock Value
in clause (ii) of the preceding sentence and, as a result, the calculations in Section 2.7(f)(i)
related to Company Options shall be adjusted based on the revised Equity Exchange Ratio set forth
herein.

          (oo) “Environmental Laws” shall mean any and all Laws which prohibit, regulate or
control any Hazardous Material or any Hazardous Material Activity, including without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource
Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act,
the Hazardous Materials Transportation Act, the Clean Water Act, the Occupational Safety and Health
Act, the European Union Directive 2002/96/EC on Waste Electrical and Electronic Equipment (WEEE
Directive) and European Union
Directive 2002/95/EC on the Restriction on the Use of Hazardous Substances (RoHS Directive),
and China’s Management Methods on the Control of Pollution Caused by Electronic Information
Products (China RoHS), all as amended.

-6-

 

          (pp) “Environmental Permit” shall mean any approval, permit, registration,
certification, license, clearance or consent required to be obtained from any private person or any
Governmental Entity with respect to a Hazardous Materials Activity which is currently conducted by
the Company.

          (qq) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any official guidance promulgated thereunder.

          (rr) “ERISA Affiliate” shall mean each Subsidiary of the Company and any other
Person under common control with the Company or that, together with the Company, could be deemed a
“single employer” within the meaning of Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or
(o) of the Code.

          (ss) “Escrow Agent” shall mean Deutsche Bank National Trust Company, or another
third party as mutually agreed upon between Parent and the Company prior to the Closing.

          (tt) “Escrow Amount” shall mean (i) the Indemnity Escrow Amount plus (ii) the
Representative Escrow Amount.

          (uu) “Escrow Fund” shall mean (i) the Indemnity Escrow Fund and (ii) the
Representative Escrow Fund.

          (vv) “Estimated Change of Control Fees” shall mean the amount of Change of Control
Fees incurred or paid by the Company prior to or at the Closing, or anticipated to be incurred or
payable with respect to the Company, in each case, that is authorized by the Company prior to the
Closing and which would be paid by the Company, Parent or the Final Surviving Entity after the
Closing, as estimated by the Company in good faith and based on reasonable assumptions as of the
Closing Date.

          (ww) “Estimated Third Party Expenses” shall mean the amount of Third Party Expenses
incurred or paid by the Company prior to or at the Closing, or anticipated to be incurred or
payable with respect to the Company, in each case, that is authorized by the Company prior to the
Closing and which would be paid by the Company, Parent or the Final Surviving Entity after the
Closing, as estimated by the Company in good faith and based on reasonable assumptions as of the
Closing Date.

          (xx) “Excess Expenses and Fees” shall mean any of the Company’s Third Party Expenses
or any Change of Control Fees that are not reflected on the Statement of Expenses.

          (yy) “Executive Employees” shall mean the employees of the Company listed in
Schedule 1.1(yy) hereto.

          (zz) “Export and Import Approvals” shall mean all export licenses, license
exceptions, consents, notices, waivers, approvals, orders, authorizations, registrations,
declarations and filings, from or with any Governmental Entity, that are required for compliance
with Export and Import Control Laws.

          (aaa) “Export and Import Control Laws” shall mean any U.S. or applicable non-U.S.
law, regulation, or order governing (i) imports, exports, reexports, or transfers of products,
services, software, or technologies from or to the United States or another country; (ii) any
release of Technology or software in any foreign country or to any foreign person (anyone other
than a citizen or lawful permanent resident of the United
States, or a protected individual as defined by 8 U.S.C. § 1324b(a)(3)) located in the United
States or abroad; (iii) economic sanctions or embargoes; or (iv) compliance with unsanctioned
foreign boycotts.

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          (bbb) “GAAP” shall mean United States generally accepted accounting principles
consistently applied.

          (ccc) “Governmental Entity” shall mean any government, any governmental or
regulatory entity or body, department, commission, board, agency or instrumentality, and any court,
tribunal or judicial body, in each case whether federal, state, county, provincial, and whether
local or foreign.

          (ddd) “Hazardous Material” shall mean any material, chemical, emission or substance
that has been designated by any Governmental Entity to be radioactive, toxic, hazardous, a
pollutant, a contaminant, biohazardous, a medical waste, or otherwise a danger to health,
reproduction or the environment.

          (eee) “Hazardous Material Activity” shall mean the transportation, transfer,
recycling, storage, use, treatment, manufacture, labeling, removal, remediation, release, exposure
of others to, sale, or distribution of any Hazardous Material or any product or waste containing a
Hazardous Material, or product manufactured with Ozone depleting substances, including, without
limitation, any required payment of waste fees or charges (including so-called e-waste fees) and
compliance with any recycling, packaging, product take-back or product content requirements.

          (fff) “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

          (ggg) “Indebtedness” shall mean (i) all indebtedness, liabilities and obligations
for borrowed money, (ii) all amounts owed by and obligations evidenced by notes, bonds, debentures
or other similar instruments, (iii) all amounts owed by and all obligations as lessee or lessees
under leases that have been recorded as capital leases, in accordance with GAAP, (iv) all
liabilities and obligations, contingent or otherwise, under acceptances, letters of credit or
similar facilities, (v) all obligations under conditional or installment sale or other title
retention Contracts relating to purchased property, and (vi) all guarantees of any of the foregoing
of another Person, provided, however, for purposes of clarification, Indebtedness shall not include
stand-by letters of credit that are outstanding as security deposits in connection with customer or
supplier Contracts in the ordinary course of business and consistent with past practice that are
not required to be included on a party’s balance sheet in accordance with GAAP.

          (hhh) “Indemnity Escrow Amount” shall mean (i) Twenty-One Million Three Hundred
Seventy-Five Thousand Dollars ($21,375,000) in cash and (ii) 1,926,920 shares of Parent Common
Stock.

          (iii) “Indemnity Escrow Fund” shall mean the Indemnity Escrow Amount, plus any
interest paid on such Indemnity Escrow Amount.

          (jjj) “Intellectual Property Rights” shall mean all common law and statutory rights
anywhere in the world arising under or associated with: (i) patents and patent applications, and
similar or equivalent rights in inventions (“Patents”); (ii) trademarks, trade names, service
marks, and trade dress (“Trademarks”); (iii) confidential information and trade and industrial
secrets (“Trade Secrets”); (iv) copyrights, “moral” rights, and any other rights of authors or in
works of authorship (“Copyrights”); (v) applications for, registrations of, and divisions,
continuations, reissuances, renewals, extensions, restorations and reversions of the foregoing (as
applicable); and (vi) all other similar or equivalent intellectual property or proprietary rights
anywhere in the world, including the right to enforce and recover damages for the infringement or
misappropriation of any of the foregoing.

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          (kkk) “International Employee Plan” shall mean each Company Employee Plan or
Employee Agreement, whether written or unwritten, that has been established, adopted, maintained,
by the Company or any ERISA Affiliate, or contributed to or required to be contributed to the
Company or any ERISA Affiliate, whether formally or informally or with respect to which the Company
or any ERISA Affiliate will or may have any liability with respect to employees who perform
services outside the United States.

          (lll) “IRS” shall mean the United States Internal Revenue Service.

          (mmm) “Key Employees” shall mean the employees of the Company listed in
Schedule 1.1(mmm) hereto.

          (nnn) “Knowledge” shall mean with respect to the Company, (A) (1) the actual
knowledge of Suresh Vasudevan, Denis Maynard, Ron Howe, Bob Wood, Geoff Stedman, Larry Kaplan and
Laura Perrone and (2) the knowledge that Suresh Vasudevan, Denis Maynard, Ron Howe, Bob Wood, Geoff
Stedman, Larry Kaplan and Laura Perrone would have obtained after reasonable inquiry of employees
of the Company who have primary administrative or operational responsibility for such matter in
question, and (B) the actual knowledge of the directors of the Company in their capacities as
directors of the Company. “Knowledge” shall mean with respect to the Parent, the actual knowledge
of Patrick Harshman, Robin Dickson, Shahar Bar, Diane Georgi and Neven Haltmeyer.

          (ooo) “Law” shall mean any statutes, rules, codes, regulations, restrictions,
ordinances, orders, decrees, approvals, guidance, directives, judgments, injunctions, writs, awards
and decrees of, issued by, adopted, promulgated, or put into effect by any Governmental Entity.

          (ppp) “Lien” shall mean any lien, pledge, charge, Claim, mortgage security interest,
or other similar restriction or encumbrance of any sort, other than (1) any restriction or
limitation imposed by this Agreement, (2) statutory liens for Taxes that are not yet due and
payable, (3) statutory liens to secure obligations to landlords, lessors or renters under leases or
rental agreements, (4) deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance or similar programs mandated by applicable law, and
(5) statutory liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims
for labor, materials or supplies and other like liens for amounts not yet due. For the avoidance
of doubt, the term “Lien” shall not include a license of intellectual property.

          (qqq) “made available” shall mean that the Company has posted such materials, on or
before 12:00 p.m. Pacific time on the date that is one (1) Business Day prior to the date hereof,
to the virtual data room managed by the Company hosted at the following IP address:
https://extranet2.fenwick.com/clients/24049/00200/default.aspx.

          (rrr) “Merger Consideration” shall mean the sum of (i) Final Adjusted Closing Cash
Consideration plus (ii) Aggregate Stock Consideration.

          (sss) “Open Source Materials” shall mean all software that is distributed under an
open source license, which includes (i) any license approved by the Open Source Initiative or any
similar license, (ii) any license that meets the “Open Source Definition” or the “Free Software
Definition”, and (iii) to the extent not included in the foregoing (i) and (ii), any Copyleft
Licenses.

          (ttt) “Parent Common Stock” shall mean the Common Stock, par value $0.001 per share
of Parent.

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          (uuu) “Parent Common Stock Value” shall mean $7.006.

          (vvv) “Parent Closing Price” shall mean the average of the daily closing price of
one share of Parent Common Stock as reported by the NASDAQ Global Select Market for the ten (10)
consecutive trading days ending on the day immediately prior to the Closing Date.

          (www) “Parent Material Adverse Effect” shall mean any Effect, individually or when
taken together with all other Effects that have occurred on or prior to the date of determination
of the occurrence of the Parent Material Adverse Effect, (i) that is or would reasonably be
expected to be or become materially adverse to the condition (financial or otherwise), business,
assets (including intangible assets), liabilities, employees, operations or results of operations
of Parent, taken as a whole, or (ii) that could reasonably be expected to materially impede the
authority or ability of Parent to consummate the transactions contemplated by this Agreement in
accordance with the terms hereof and applicable Law, except in each case to the extent that any
such Effect directly results from any of the following: (A) changes in general economic conditions
or changes affecting the industry generally in which Parent operates or acts of war or terrorism
(provided that such changes or acts do not affect Parent materially disproportionately as compared
to other companies operating in the same industries or geographies as such entity); (B) the
announcement of this Agreement or the pendency of the transactions contemplated hereby; (C) any
changes in applicable Law or GAAP (provided that such changes do not affect Parent materially
disproportionately as compared to other companies operating in the same industries or geographies
as such entity); or (D) change in the trading volume or trading price of Parent Common Stock on the
NASDAQ Global Select Market, or any failure to meet published analyst estimates (but not, in each
case, the underlying Effect that may have caused such change in the trading volume or trading price
of Parent Common Stock on the NASDAQ Global Select Market or such failure to meet published analyst
estimates).

          (xxx) “Parent Stock Plans” shall mean the Harmonic Inc. 1995 Stock Plan, the
Harmonic Inc. 1995 Director Option Plan, the Harmonic Inc. 1999 Nonstatutory Stock Option Plan, the
Harmonic Inc. 2002 Director Stock Plan and the Harmonic Inc. 2002 Employee Stock Purchase Plan.

          (yyy) “Pension Plan” shall mean each Company Employee Plan that is an “employee
pension benefit plan,” within the meaning of Section 3(2) of ERISA or any International Employee
Plan that is not account-based with individual participant accounts and that is designed to
accumulate or accrue a benefit, annuity payment or a cash balance that a service provider of the
Company could draw upon at a specific age, retirement or following separation from service.

          (zzz) “Per Share Cash Consideration” shall mean an amount of cash per share equal to
the quotient of (i) the sum of (A) the Final Adjusted Closing Cash Consideration minus (B) the
Series A-2.2 Cash Consideration divided by (ii) (A) the number of shares of Company Common Stock
outstanding at the Effective Time (assuming conversion of all shares of Company Preferred Stock
into Company Common Stock other than the outstanding share of Company Series A-2.2 Preferred
Stock), plus (B) the number of shares of Company Common Stock underlying the Cancelled Equity.

          (aaaa) “Per Share Stock Consideration” shall mean the number of shares of Parent
Common Stock equal to the quotient of (i) the sum of (A) the Aggregate Stock Consideration minus
(B) the Series A-2.2 Stock Consideration and minus (C) the product of (I) the number of shares of
Company Common Stock underlying the Assumed Equity multiplied by (II) the Equity Exchange Ratio
(not accounting for any changes that may be required to be made to the definition of “Equity
Exchange Ratio” pursuant to the final clause therein) divided by (ii) the sum of (A) the number of
shares of Company Common Stock outstanding at the Effective Time (assuming conversion of all shares
of Company Preferred Stock into Company Common Stock other than the outstanding share of Company
Series A-2.2 Preferred Stock) plus (B) the number of shares of Company Common Stock underlying the
Cancelled Equity.

-10-

 

          (bbbb) “Person” shall mean an individual or entity, including a partnership, a
limited liability company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a Governmental Entity (or any department, agency, or
political subdivision thereof).

          (cccc) “Pre-Closing Taxes” shall mean any and all Liabilities for any Taxes (i)
imposed on the Company with respect to any Pre-Closing Tax Period, (ii) of any other Person as a
result of being or having been a member of an Affiliated Group, as a transferee or successor, by
Contract, by operation of Law or otherwise, and (iii) imposed on Parent or any of its Affiliates
as a result of any breach of any representation or warranty under Section 3.12 or any covenant
under Section 6.16. For the avoidance of doubt, any employment or payroll Taxes with respect to
bonuses, option exercises or cash-outs or other compensatory payments in connection with the
transactions contemplated by this Agreement, including the vesting of Company RSUs outstanding as
of the Effective Time and vesting in connection with, or as a result of, the transactions
contemplated by this Agreement, shall be treated as arising in the Pre-Closing Tax Period. In the
case of any taxable period that includes but does not end on the Closing Date (each, a “Straddle
Period”), the real, personal and intangible property Taxes (“Property Taxes”) imposed upon the
Company allocable to the Pre-Closing Tax Period shall be equal to the amount of such Property Taxes
for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of
days during the Straddle Period that are in the Pre-Closing Tax Period and the denominator of which
is the number of days in the Straddle Period; and the Taxes (other than Property Taxes) imposed
upon the Company allocable to the Pre-Closing Tax Period shall be computed as if such taxable
period ended on the Closing Date, provided, that exemptions, allowances or deductions that are
calculated on an annual basis (including depreciation and amortization deductions), other than with
respect to property placed in service after the Closing, shall be allocated between the period
Pre-Closing Tax Period and the period after the Closing Date in proportion to the number of days in
each period.

          (dddd) “Pre-Closing Tax Period” shall mean any Tax period (or portion thereof)
ending on or before the Closing Date.

          (eeee) “Pro Rata Portion” shall mean, with respect to each Company Stockholder, an
amount equal to the quotient of (i) the amount of Merger Consideration payable pursuant to
Section 2.7 hereof in respect of the shares of Company Capital Stock or other securities of the
Company (other than Assumed Equity) owned by such Company Stockholder as of immediately prior to
the Effective Time, divided by (ii) the aggregate amount of all Merger Consideration payable to all
Company Stockholders pursuant to Section 2.7 hereof in respect of the shares of Company Capital
Stock or other securities of the Company (other than Assumed Equity) owned by such Company
Stockholder as of immediately prior to the Effective Time. For purposes of determining each
Company Stockholder’s Pro Rata Portion, the value of each share of Parent Common Stock payable as
Merger Consideration pursuant to Section 2.7 hereof in respect of shares of Company Capital Stock
or other securities of the Company (other than Assumed Equity) shall be deemed equal to the Parent
Common Stock Value.

          (ffff) “Reciprocal Confidentiality Agreement” shall mean the mutual nondisclosure
agreement made as of January 7, 2010, by and between Parent and the Company.

          (gggg) “Registered Intellectual Property” shall mean Intellectual Property Rights
that have been registered, filed, certified or otherwise perfected or recorded with or by any
Governmental Entity or other public or quasi-public legal authority.

          (hhhh) “Related Agreements” shall mean (i) the Reciprocal Confidentiality Agreement,
(ii) the Executive Employee Offer Letters, (iii) the Securityholder Voting Agreements, (iv) the
Escrow Agreement, (v) the 280G Waivers and (vi) all other agreements, instruments and certificates
entered into by

-11-

 

the Company or any of the stockholders of the Company in connection with the
transactions contemplated herein.

          (iiii) “Representative Escrow Amount” shall mean Two Hundred Fifty Thousand Dollars
($250,000) in cash.

          (jjjj) “Representative Escrow Fund” shall mean the Representative Escrow Amount,
plus any interest paid on such Representative Escrow Amount.

          (kkkk) “Required Stockholder Approval” shall mean the approval of the holders of a
type and number of shares of Company Capital Stock sufficient to adopt and approve this Agreement
and approve the First Step Merger and the transactions contemplated hereby, in each case as
required under applicable Law, the Company’s Charter Documents, and any applicable agreements
between the Company, on the one hand, and any holders of Company Capital Stock, on the other hand.

          (llll) “Restricted Shares” shall mean shares of Company Capital Stock that are
unvested or are subject to a repurchase option, substantial risk of forfeiture or other similar
condition (in each case giving effect to any acceleration of vesting or lapse of such option, risk
or condition due to the consummation of the transactions contemplated by this Agreement) under any
applicable restricted stock purchase agreement or other similar agreement with the Company.

          (mmmm) “Return” shall mean all U.S. federal, state, provincial, local, and non-U.S.
returns, estimates, information statements, elections, forms, transfer pricing studies and reports
relating to Taxes, including any attachments or addenda thereto or amendments thereof.

          (nnnn) “SEC” shall mean the United States Securities and Exchange Commission.

          (oooo) “Series A-2.2 Cash Consideration” shall mean an amount of cash equal to the
product of (i) the Series A-2.2 Preferred Preference multiplied by (ii) the Cash Consideration
Percentage.

          (pppp) “Series A-2.2 Preferred Preference” shall mean $1,513,032.40.

          (qqqq) “Series A-2.2 Stock Consideration” shall mean a number of shares of Parent
Common Stock, rounded down to the nearest whole share, equal to the quotient of (i) the product of
(A) Series A-2.2 Preferred Preference multiplied by (B) the Stock Consideration Percentage divided
by (ii) the Parent Common Stock Value.

          (rrrr) “Shrink-Wrap Code” shall mean generally commercially available binary code
(other than development tools and development environments) where available for a cost of not more
than $5,000 for a perpetual license for a single user or work station (or $25,000 in the aggregate
for all users and work stations); provided that the term “Shrink-Wrap Code” shall not include any
Open Source Materials.

          (ssss) “Spreadsheet” shall mean a spreadsheet which shall be certified as complete
and correct by the Company’s Chief Executive Officer and Chief Financial Officer substantially in
the form attached hereto as Schedule 1.1(ssss), which shall include, as of the Closing, (a)(i) all
Company Stockholders and their respective addresses, indicating whether such holder is a Continuing
Employee, a Terminating Employee or an “Outside Director” (as that term is defined in the
applicable Stock Plan), (ii) the number and type of shares of Company Capital Stock held by such
Company Stockholder, (iii) the respective certificate numbers, (iv) the date of acquisition of such
shares or Cancelled Equity, as applicable, (v) the aggregate Per Share Stock Consideration and the
aggregate Per Share Cash Consideration payable to each Company

-12-

 

Stockholder, (vi) the Pro Rata
Portion applicable to each Company  Stockholder, (vii) the amount of any loans outstanding from the
Company to such Company Stockholder and the amount by which the cash (or stock) portion of the
Merger Consideration payable to such Company Stockholder should be reduced to repay such
outstanding loans in accordance with Section 2.7(i) or by the exercise price of the Cancelled Equity in accordance with
Section 2.7(f)(ii), the amount, if any, to be withheld from any distribution to each Company
Stockholder pursuant to Section 2.7(h) and (viii) such other information relevant thereto or which
Parent or its agent, may reasonably request, and (b)(i) all holders of Company Options, Company
RSUs or any other similar equity award from the Company and their respective addresses, indicating
whether each such holder is a Continuing Employee, (ii) the number and type of Company Capital
Stock underlying each such award, (iii) the grant dates of such award and the vesting arrangement
with respect to such award, and (iv) if such award is Assumed Equity, the number of shares of
Parent Common Stock that will be underlying such award after the Effective Time.

          (tttt) “Statement of Expenses” shall mean a statement of Estimated Third Party
Expenses and Estimated Change of Control Fees in a form reasonably acceptable to Parent, certified
by the Company’s Chief Executive Officer and the Company’s Chief Financial Officer as true and
correct as of the Closing Date, showing detail of both the paid and unpaid Third Party Expenses and
Change of Control Fees incurred by the Company as of the Closing, or anticipated to be incurred or
payable with respect to the Company, in each case, that is authorized by the Company prior to the
Closing and which would be paid by the Company, Parent or the Final Surviving Entity after the
Closing.

          (uuuu) “Stock Consideration Percentage” shall mean 100% minus the Cash Consideration
Percentage.

          (vvvv) “Stockholder Written Consent” shall mean the written consent of stockholders
in a form reasonably acceptable to Parent, which shall include, among other things, (i) adoption of
this Agreement and the approval of the First Step Merger, (ii) the election of the stockholders of
the Company to convert all shares of Company Preferred Stock (other than the outstanding share of
Company Series A-2.2 Preferred Stock) into shares of Company Common Stock and (iii) the appointment
of Shareholder Representative Services LLC as the Representative.

          (wwww) “Stock Plans” shall mean the Omneon Video Networks, Inc. 1998 Stock Option
Plan and the Omneon, Inc. 2008 Equity Incentive Plan.

          (xxxx) “Subsidiary” shall mean any Person, whether or not existing on the date
hereof, in which the Company or Parent, as the context requires, directly or indirectly through
subsidiaries or otherwise, beneficially owns at least fifty percent (50%) of either the equity
interest, or voting power of or in such Person.

          (yyyy) “Superior Proposal” shall mean, with respect to the Company, an unsolicited,
bona fide written Alternative Transaction Proposal that (i) the board of directors of the Company
determines in good faith (after consultation with its outside legal counsel and the Company’s
financial advisor) to be more favorable (taking into account all relevant legal, financial,
regulatory, timing and other aspects of such Alternative Transaction Proposal (including the
conditions thereto) and the identity of the Person making the proposal), and provides greater
financial value, to the stockholders of the Company than the transactions contemplated by this
Agreement (after taking into account all of the terms of any proposal by Parent to amend or modify
the terms of the transactions contemplated by this Agreement), (ii) provides for consideration
consisting exclusively of cash and for which financing, to the extent required by the Person making
the offer, is then fully committed and not subject to any contingencies other than the conditions
to such Alternative Transaction Proposal, and (iii) is reasonably expected to be consummated on the
terms proposed without unreasonable delay relative to the transactions contemplated by this
Agreement; provided that, for purposes of

-13-

 

this definition of “Superior Proposal,” that each
reference to “20%” in the definition of “Alternative Transaction Proposal” contained herein shall
be deemed to be a reference to “100%.”

           (zzzz) “Technology” shall mean any or all of the following and any tangible
embodiments thereof: (i) works of authorship including computer programs, including but not limited
to source code or in object code form, whether embodied in software, firmware or otherwise,
development tools, documentation, designs, files, records, data, architecture and documentation,
and all media on which any of the foregoing is recorded, (ii) inventions (whether or not
patentable), discoveries and improvements, (iii) proprietary and confidential information, Trade
Secrets and know how, (iv) databases, data compilations and collections and technical data,
(v) logos, trade names, trade dress, Trademarks and service marks, (vi) methods and processes,
(vii) devices, prototypes, designs and schematics, and (viii) all instantiations and disclosures of
the foregoing in any form and embodied in any media, and all documentation related to the
foregoing.

          (aaaaa) “Terminating Employees” shall mean the employees of the Company whom the
Company is required to terminate prior to the Closing Date pursuant to Section 6.11(b) hereof.

          (bbbbb) “Termination Fee” shall mean an amount in cash equal to Fifteen Million Five
Hundred Thousand Dollars ($15,500,000).

          (ccccc) “Third Party Expenses” shall mean all legal, accounting, financial advisory,
consulting and all other fees and expenses of third parties incurred by the applicable Person in
connection with the First Step Merger, the Second Step Merger, this Agreement and with the
transactions contemplated hereby.

          (ddddd) “Working Capital” shall mean, as of a particular date, an amount equal to
(i)(A) all current assets (including all forms of accounts receivable) of the Company in accordance
with GAAP but excluding (B) (I) any Tax assets (including for the avoidance of doubt any right to
receive any tax savings or refund attributable to any net operating loss carryback arising in a
Pre-Closing Tax Period or portion thereof ending on the Closing Date), (II) any cash, cash
equivalents and restricted cash and (III) any accounts receivable associated with sales order
#022474, #025611, #025276 and #025275 to CNN, minus (ii)(A) all current liabilities of the Company
in accordance with GAAP but excluding any deferred revenue associated with sales order #022474,
#025611, #025276 and #025275 to CNN plus (B) any liability associated with any long-term deferred
revenue plus (C) all Indebtedness of the Company (other than short-term Indebtedness included in
the calculation of current liabilities in clause (A) and any contingent liabilities, or stand-by
letters of credit that are outstanding as security deposits in connection with customer or supplier
Contracts in the ordinary course of business and consistent with past practice, that are not
required to be included on the Company’s balance sheet in accordance with GAAP).

     1.2 Additional Defined Terms. The following capitalized terms shall have the respective meanings
set forth in the respective Sections of this Agreement set forth opposite each such respective term
below:

	 	 	 
	Capitalized Term	 	Section
	280G Approval
	 	6.1(h)
	280G Waiver
	 	7.2(c)(i)
	401(k) Plan
	 	6.14
	Agents
	 	6.2(a)
	Applicable Expiration Date
	 	8.1(a)
	Assumed Equity
	 	2.7(f)(i)
	Audited Financials
	 	3.7
	Balance Sheet Date
	 	3.7

-14-

 

	 	 	 
	Capitalized Term	 	Section
	California Commissioner
	 	6.1(a)
	California Permit
	 	6.1(a)
	Cancelled Equity
	 	2.7(f)(ii)
	Cash Payment
	 	2.7(f)(ii)
	CCC
	 	2.8(a)
	Certificate of Incorporation
	 	3.1(a)
	Certificate of Merger
	 	2.3(a)
	Certificates of Mergers
	 	2.3(b)
	Change of Control Fees
	 	6.10
	Change of Recommendation Notice
	 	6.2(d)(ii)
	Charter Documents
	 	3.1(a)
	Claim Certificate
	 	8.5(a)
	Closing
	 	2.1(c)
	Closing
	 	2.2
	Closing Date
	 	2.2
	Closing Working Capital
	 	2.9(a)(i)
	Company Auditors
	 	3.7
	Company Authorizations
	 	3.18
	Company Disclosure Schedule
	 	Article III
	Company Indemnifiable Matters
	 	8.2(b)
	Company Indemnified Parties
	 	8.2(b)
	Company Indemnified Party
	 	8.2(b)
	Company Indemnifying Parties
	 	8.2(a)
	Company Indemnified Party
	 	8.2(a)
	Company Registered Intellectual Property
	 	3.15(a)
	Company Stock Certificates
	 	2.10(b)(ii)
	Company Stockholders’ Meeting
	 	6.1(g)
	Company’s Closing Working Capital Statement
	 	2.9(a)(i)
	Conflict
	 	3.5
	Consent and Modification Fees
	 	6.10
	Contaminants
	 	3.15(n)
	Contract Termination Fees
	 	6.10
	Current Balance Sheet
	 	3.7
	Current Parent SEC Filings
	 	4.8
	Director and Officer Resignation Letter
	 	6.11(e)
	Dissenting Share Payments
	 	2.8(c)
	Dissenting Shares
	 	2.8(a)
	DOJ
	 	3.6
	Effective Time
	 	2.3(a)
	Election Notice
	 	6.1(c)
	End Date
	 	9.1(b)
	Escrow Agreement
	 	2.10(a)
	Escrow Expenses
	 	8.7(b)
	Excess Amount
	 	2.10(c)(ii)
	Exchange Documents
	 	2.10(b)(ii)
	Expiration Date
	 	8.1(a)
	Fairness Hearing Law
	 	6.1(a)
	Final Adjusted Closing Cash Consideration
	 	2.9(b)(v)
	Final Closing Working Capital
	 	2.9(b)(iv)(C)

-15-

 

	 	 	 
	Capitalized Term	 	Section
	Final Surviving Entity
	 	2.1(b)
	Financials
	 	3.7
	Foreign Employees
	 	3.23(i)
	FTC
	 	3.6
	Funded International Employee Plan
	 	3.23(h)
	Indemnified Parties
	 	8.2(b)
	Indemnifying Parties
	 	8.2(b)
	Independent Accounting Firm
	 	2.9(b)(iv)(B)
	Independent Accounting Firm Expenses
	 	2.9(b)(iv)(B)
	Information Statement
	 	6.1(a)
	In-Licenses
	 	3.15(i)
	Interim Financials
	 	3.7
	Interim Surviving Entity
	 	2.1(a)
	IP Contracts
	 	3.15(j)
	Lease Agreements
	 	3.14(b)
	Leased Real Property
	 	3.14(a)
	Letter of Transmittal
	 	2.10(b)(i)
	Litigation Claim
	 	3.19
	Loss
	 	8.2(a)
	Losses
	 	8.2(a)
	Material Contract
	 	3.16(a)
	Material Contracts
	 	3.16(a)
	Objection Notice
	 	8.5(b)
	Offer Letter
	 	6.12(a)
	Out-Licenses
	 	3.15(j)
	Parent Capital Stock
	 	4.12(a)
	Parent Certificate of Incorporation
	 	4.1
	Parent Charter Documents
	 	4.1
	Parent Disclosure Schedule
	 	Article IV
	Parent Indemnifiable Matters
	 	8.2(a)
	Parent Indemnified Parties
	 	8.2(a)
	Parent Indemnified Party
	 	8.2(a)
	Parent Indemnifying Parties
	 	8.2(b)
	Parent Indemnifying Party
	 	8.2(b)
	Parent Options
	 	4.12(c)
	Parent Preferred Stock
	 	4.12(a)
	Parent RSUs
	 	4.12(c)
	Parent SEC Filings
	 	4.8
	Parent’s Closing Working Capital Statement
	 	2.9(b)(i)
	Plexus
	 	3.16(a)(x)
	Post-Closing Notice of Dispute
	 	2.9(b)(ii)
	Pre-Closing Period
	 	5.1
	Pre-Closing Returns
	 	6.16(a)
	Preliminary Closing Working Capital
	 	2.9(a)(i)
	Proprietary Information Agreement
	 	3.15(h)
	Representative Expenses
	 	8.8(b)
	Section 280G Payments
	 	6.1(h)
	Section 409A
	 	3.12(e)
	Securities Act
	 	4.8

-16-

 

	 	 	 
	Capitalized Term	 	Section
	Shortfall Amount
	 	2.10(c)(i)

	Soliciting Materials
	 	6.1(f)

	Specified Representations
	 	8.1(a)

	Stock Payment
	 	2.7(f)(ii)

	Stockholder Notice
	 	6.1(g)

	Tax
	 	3.12(a)

	Tax Contest
	 	6.16(f)

	Tax Incentive
	 	3.12(b)(xiii)

	Tax Service Provider
	 	6.16(f)

	Taxes
	 	3.12(a)

	Terminated Agreements
	 	6.10

	Terminating Employee Release
	 	6.11(b)

	Third Party Claim
	 	8.6

	Transfer Taxes
	 	6.16(d)

	Triggering Event
	 	9.1(h)

	WARN
	 	3.23(g)

     1.3 Interpretations.

          (a) When a reference is made in this Agreement to an Exhibit or a Schedule, such
reference shall be to an Exhibit or a Schedule to this Agreement unless otherwise indicated.

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

          (c) The words “include”, “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation.”

          (d) The headings set forth in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

          (e) Unless otherwise specifically provided or the context otherwise requires, all
references in this Agreement to the Company shall mean and refer to the Company and its direct and
indirect Subsidiaries.

          (f) All references in this Agreement to the Subsidiaries of a Person shall be deemed
to include all direct and indirect Subsidiaries of such Person.

          (g) Unless otherwise specifically provided, all references in this Agreement to
monetary amounts or dollars shall mean and refer to United States denominated dollars.

          (h) The parties hereto agree that they have been represented by legal 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 shall be construed against the party drafting such agreement or document.

-17-

 

ARTICLE II

THE MERGER

     2.1 The Merger.

          (a) Upon the terms and subject to the conditions set forth in this Agreement and the
applicable provisions of the DGCL, at the Effective Time, Merger Sub One shall be merged with and
into the Company in the First Step Merger, the separate corporate existence of Merger Sub One shall
thereupon cease and the Company shall continue as the surviving entity of the First Step Merger and
as a wholly-owned Subsidiary of Parent. The Company, as the surviving entity of the First Step
Merger, is referred to herein as the “Interim Surviving Entity.”

          (b) Except as set forth in Section 2.1(c), as part of a single integrated plan, as
soon as practicable following the First Step Merger, upon the terms and subject to the conditions
set forth in this Agreement and the applicable provisions of the DGCL, the Interim Surviving Entity
shall be merged with and into Merger Sub Two in the Second Step Merger, the separate corporate
existence of the Interim Surviving Entity shall thereupon cease and Merger Sub Two shall continue
as the surviving entity of the Second Step Merger and as a wholly owned Subsidiary of Parent.
Merger Sub Two, as the surviving entity of the Second Step Merger, is referred to herein as the
“Final Surviving Entity.”

          (c) The Second Step Merger will not be consummated unless (1) the aggregate value of
the shares of Parent Common Stock paid for shares of Company Capital Stock is at least 40% of the
aggregate value of the total consideration (including, without limitation, shares of Parent Common
Stock, cash provided by Parent and cash distributed by the Company) paid for shares of Company
Capital Stock (the “40% Threshold”), taking into account the portion of the Preliminary Adjusted
Closing Cash Consideration paid for shares of Company Capital Stock, and (2) in the reasonable
judgment of Parent, after good faith consultation with its Tax advisor, the Merger will qualify as
a “reorganization” within the meaning of Section 368(a) of the Code if the Second Step Merger is
consummated, based on reasonable assumptions about the portion of the Final Adjusted Closing Cash
Consideration that will be paid for shares of Company Capital Stock in accordance with Section
2.10(c). For purposes of the 40% Threshold, each share of Parent Common Stock shall be valued at
the greater of the closing price of such share on the last trading day immediately prior to (1) the
date of this Agreement or (2) the Closing Date. If the Second Step Merger is consummated, but the
40% Threshold is not satisfied after taking into account the portion of the Final Adjusted Closing
Cash Consideration that is actually paid for shares of Company Capital Stock in accordance with
Section 2.10(c), the parties agree that Parent will be under no obligation to report the Merger as
a “reorganization” within the meaning of Section 368(a) of the Code. If the Second Step Merger is
not consummated, then (x) the Interim Surviving Entity shall be deemed to be the Final Surviving
Entity for all purposes of this Agreement, (y) all references to the Merger in this Agreement shall
be deemed to be references to the First Step Merger, except as the context otherwise requires, and
(z) the First Step Merger will not qualify as a “reorganization” within the meaning of Section
368(a) of the Code and any references to such status of the Merger shall be ignored.

     2.2 The Closing. Unless this Agreement is earlier terminated pursuant to Section 9.1, the closing
of the First Step Merger (the “Closing”) shall take place at 10:00 a.m., California time, on a
Business Day as promptly as practicable after the execution and delivery hereof by the parties
hereto, but no later than three (3) Business Days following satisfaction or waiver (to the extent
permitted hereunder) of the conditions set forth in Article VII (except for those conditions that,
by their nature, are to be satisfied at the Closing, but subject to the satisfaction of such
conditions at the Closing), at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 650 Page Mill Road, Palo Alto, California, 94304, unless another time, date or

-18-

 

place
is mutually agreed upon in writing by Parent and the Company. The date upon which the Closing
actually occurs shall be referred to herein as the “Closing Date.”

     2.3 Effective Time of First Step Merger and Second Step Merger.

          (a) Upon the terms and subject to the conditions set forth in this Agreement, at the
Closing, Parent, Merger Sub One and the Company shall cause the First Step Merger to be consummated
under the DGCL by filing a certificate of merger in substantially the form attached hereto in
Exhibit C (the “Certificate of Merger”) with the Secretary of State of the State of Delaware in
accordance with the applicable provisions of the DGCL (the time of such filing and acceptance by
the Secretary of State of the State of Delaware, or such later time as may be agreed in writing by
Parent, Merger Sub One and the Company and specified in the Certificate of Merger, being referred
to herein as the “Effective Time”).

          (b) Except as set forth in Section 2.1(c), as soon as practicable after the First
Step Merger, Parent shall cause the Second Step Merger to be consummated under the DGCL by filing a
certificate of merger (which together with the Certificate of Merger are, the “Certificates of
Mergers”) in customary form and substance with the Secretary of State of the State of Delaware in
accordance with the applicable provisions of the DGCL.

     2.4 Effect of the First Step Merger and Second Step Merger.

          (a) At the Effective Time, the effect of the First Step Merger shall be as provided
in this Agreement and the applicable provisions of the DGCL. Without limiting the generality of
the foregoing (and subject thereto), at the Effective Time, all of the property, rights,
privileges, powers and franchises of the Company and Merger Sub One shall vest in the Interim
Surviving Entity, and all debts, liabilities and duties of the Company and Merger Sub One shall
become the debts, liabilities and duties of the Interim Surviving Entity.

          (b) At the effective time of the Second Step Merger, the effect of the Second Step
Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing (and subject thereto), at the effective time of the Second Step Merger,
except as otherwise agreed to pursuant to the terms of this Agreement, all of the property, rights,
privileges, powers and franchises of the Interim Surviving Entity shall vest in the Final Surviving
Entity, and all debts, liabilities and duties of the Interim Surviving Entity and Merger Sub Two
shall become the debts, liabilities and duties of the Final Surviving Entity.

     2.5 Organizational Documents.

          (a) Interim Surviving Entity.

               (i) At the Effective Time, the Certificate of Incorporation of the Company shall be amended
and restated in its entirety to read identically to the certificate of incorporation of Merger Sub
One as in effect immediately prior to the Effective Time, and such amended and restated certificate
of incorporation shall become the certificate of incorporation of the Interim Surviving Entity
until thereafter amended in accordance with the applicable provisions of the DGCL and such
certificate of incorporation; provided, however, that at the Effective Time the certificate of
incorporation of the Interim Surviving Entity shall be amended so that the name of the Interim
Surviving Entity shall be “Omneon Inc.”

               (ii) At the Effective Time, the bylaws of Merger Sub One as in effect immediately prior to the
Effective Time shall become the bylaws of the Interim Surviving Entity until

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thereafter amended in
accordance with the applicable provisions of the DGCL, the certificate of incorporation of the
Interim Surviving Entity and such bylaws.

          (b) Final Surviving Entity.

               (i) Unless otherwise determined by Parent prior to the Effective Time, the certificate of
formation of Merger Sub Two as in effect immediately prior to the effective time of the Second Step
Merger shall be the certificate of formation of the Final Surviving Entity in the Second Step
Merger until thereafter amended in accordance with the applicable provisions of the DGCL and such
certificate of formation; provided, however, that at the effective time of the Second Step Merger,
the certificate of formation of the Final Surviving Entity shall be amended so that the name of the
Final Surviving Entity shall be “Omneon Inc.”

               (ii) Unless otherwise determined by Parent prior to the Effective Time, the limited liability
agreement of Merger Sub Two as in effect immediately prior to the effective time of the Second Step
Merger shall be the limited liability agreement of the Final Surviving Entity until thereafter
amended in accordance with the applicable provisions of the DGCL, the certificate of formation of
the Final Surviving Entity and such limited liability agreement.

     2.6 Directors and Officers.

          (a) Interim Surviving Entity. At the Effective Time, the directors of Merger Sub
One immediately prior to the Effective Time shall become the directors of the Interim Surviving
Entity , each to hold office in accordance with the certificate of incorporation and bylaws of the
Interim Surviving Entity until their respective successors are duly elected or appointed and
qualified. At the Effective Time, the officers of Merger Sub One immediately prior to the
Effective Time shall become the officers of the Interim Surviving Entity, each to hold office in
accordance with the certificate of incorporation and bylaws of the Interim Surviving Entity until
their respective successors are duly appointed.

          (b) Final Surviving Entity. At the effective time of the Second Step Merger, the
directors of the Interim Surviving Entity shall become the managers of the Final Surviving Entity,
each to hold the office in accordance with the certificate of formation and limited liability
agreement of the Final Surviving Entity until their respective successors are duly elected and
qualified. At the effective time of the Second Step Merger, the officers of the Interim Surviving
Entity immediately prior to the effective time of the Second Step Merger shall become the officers
of the Final Surviving Entity, each to hold office in accordance with the
certificate of formation and limited liability company agreement of the Final Surviving Entity
until their respective successors are duly appointed.

     2.7 Effect of First Step Merger on Capital Stock of Constituent Corporations. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the
First Step Merger and without any action on the part of Parent, Merger Sub One, the Company, or the
holders of any shares of Company Capital Stock:

          (a) Merger Sub One Common Stock. Each share of Common Stock of Merger Sub One that
is issued and outstanding immediately prior to the Effective Time shall be converted into and
thereafter represent one validly issued, fully paid and non-assessable share of Common Stock of the
Company as the Interim Surviving Entity, such that immediately following the Effective Time, Parent
shall become the sole and exclusive owner of all of the issued and outstanding capital stock of the
Company as the Interim Surviving Entity. Each stock certificate of Merger Sub One shall thereupon
evidence ownership of such shares of capital stock of the Company as the Interim Surviving Entity.

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          (b) Company-Owned Company Capital Stock. Notwithstanding anything to the contrary
in this Section 2.7, each share of Company Capital Stock that is held by the Company immediately
prior to the Effective Time shall be cancelled and extinguished without any consideration paid
therefor or in respect thereof.

          (c) Dissenting Shares of Company Capital Stock. Notwithstanding anything to the
contrary in this Section 2.7, Dissenting Shares shall be treated in accordance with the terms of
Section 2.8.

          (d) Preferred Stock Conversion. Immediately prior to the Effective Time, each of
the shares of Company Preferred Stock, other than the outstanding share of Company Series A-2.2
Preferred Stock, shall be converted into shares of Company Common Stock pursuant to the approval of
the stockholders of the Company as set forth in the Stockholder Written Consent and Article IV
Section B.3.b of the Company’s Certificate of Incorporation.

          (e) Company Capital Stock Generally. Upon the terms and subject to the conditions
set forth in this Agreement, including the provisions of Section 2.10(a), the maximum aggregate
consideration payable by Parent and the Merger Subs in the First Step Merger to Company
Securityholders shall be an amount of cash equal to the Final Adjusted Closing Cash Consideration
and a number of shares of Parent Common Stock equal to the Aggregate Stock Consideration. At the
Effective Time, by virtue of the First Step Merger and without any action on the part of Parent,
the Merger Subs, the Company or Company Stockholders, each share of Company Capital Stock that is
issued and outstanding immediately prior to the Effective Time (other than (i) any shares of
Company Capital Stock then held by the Company, and (ii) any Dissenting Shares) shall be cancelled
and extinguished and shall be converted automatically into the right to receive, upon the terms and
subject to the conditions set forth in this Agreement, including the provisions of Section 2.10(a)
the following consideration:

               (i) Company Series A-2.2 Preferred Stock. The share of Company
Series A-2.2 Preferred Stock
issued and outstanding immediately prior to the Effective Time (unless such share is a Dissenting
Share) will be cancelled and extinguished and will be converted automatically into the right to
receive, upon surrender of the certificate representing such share of Company Series A-2.2
Preferred Stock, (A) the Series A-2.2 Stock Consideration and (B) the Series A-2.2 Cash
Consideration.

               (ii) Company Common Stock. Each outstanding share of Company Common Stock issued
and
outstanding immediately prior to the Effective Time (other than Dissenting Shares) will be
cancelled and extinguished and will be converted automatically into the right to receive, upon
surrender of the certificate representing such shares of Company Common Stock, (A) the Per Share
Stock Consideration and (B) the Per Share Cash Consideration.

          (f) Treatment of Company Options, Restricted Shares and Company RSUs.

               (i) Unvested Company Options, Restricted Shares and Company RSUs. Each unvested
(after giving
effect to any vesting acceleration as a result of the Merger) Company Option and unvested (after
giving effect to any vesting acceleration as a result of the Merger) Company RSU that is issued and
outstanding immediately prior to the Effective Time, will be assumed by Parent and converted
automatically into an option to purchase Parent Common Stock or a bookkeeping entry of restricted
stock units representing Parent Common Stock (collectively, “Assumed Equity”), as the case may be,
as set forth below. The Assumed Equity will continue to have, and be subject to, the same terms
and conditions set forth in the Stock Plans and the agreements evidencing the grant thereof
immediately prior to the Effective Time, including provisions with respect to vesting, except that
(A) such Assumed Equity shall be exercisable for, or represent, that number of whole shares of
Parent Common Stock equal to the product of (1) the number of shares of Company Common Stock that
were issuable upon exercise of such Company Option, or that were

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represented by such Company RSU,
immediately prior to the Effective Time, multiplied by (2) the Equity Exchange Ratio and rounded
down to the nearest number of whole shares of Parent Common Stock, and (B) with regard to the
assumed Company Options, the per share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by
dividing (x) the exercise price per share of Company Common Stock at which such assumed Company
Option was exercisable immediately prior to the Effective Time, divided by (y) the Equity Exchange
Ratio, rounded up to the nearest whole cent; provided, however, that the exercise price of the
option, the number of shares purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in a manner that complies with Section 409A of the
Code. Each unvested (after giving effect to any vesting acceleration as a result of the Merger)
Restricted Share that is issued and outstanding immediately prior to the Effective Time, will be
assumed by Parent and represent the right to receive the Merger Consideration payable to holders of
Company Common Stock, as set forth in Section 2.7(e)(ii), provided, however, that any such Merger
Consideration shall continue to have, and be subject to, the same terms and conditions set forth in
the Stock Plans and the agreements to which the Restricted Shares were subject immediately prior to
the Effective Time, including provisions with respect to vesting, repurchase rights, risk of
forfeiture or similar conditions, and the payment of any cash portion of such Merger Consideration
will be contingent upon the vesting of such Restricted Share.

               (ii) Vested Company Options and Company RSUs. Each vested (after giving effect to
any vesting
acceleration as a result of the Merger) Company Option and vested (after giving effect to any
vesting acceleration as a result of the Merger) Company RSU that is issued and outstanding
immediately prior to the Effective Time (collectively, the “Cancelled Equity”) shall, on the terms
and subject to the conditions set forth in this Agreement, be cancelled and automatically converted
into the right to receive (A) an amount of cash (without interest) equal to the product of (1) the
Per Share Cash Consideration, multiplied by (2) the number of shares of Company Common Stock
subject to such Cancelled Equity (the “Cash Payment”), plus (B) a number of shares of Parent
Common Stock equal to (1) the Per Share Stock Consideration, multiplied by (2) the number of shares
of Company Common Stock subject to such Cancelled Equity (the “Stock Payment”), minus (C) an amount
in cash (or a reduction in the Stock Payment, valuing each share of Parent Common Stock at the
Parent Common Stock Value, to the extent the Cash Payment is not sufficient) equal to (1) the
exercise price per share of Company Common Stock subject to such Cancelled Equity that constitutes
a Company Option multiplied by (2) the number of shares of Company Common Stock subject to such
Company Option. The amount of cash each holder of Cancelled Equity is entitled to receive for the
Cancelled Equity, shall be rounded to the nearest cent and computed after aggregating all cash for
all shares subject to Cancelled Equity held by such holder.

          (g) Fractional Shares. No fraction of a share of Parent Common Stock will be issued
by virtue of the First Step Merger, but in lieu thereof each Company Stockholder that would
otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all
fractional shares of Parent Common Stock that otherwise would be received by such holder) shall,
upon surrender of such holder’s Company Stock Certificate(s) or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if required) in the manner provided
in Section 2.14, receive from Parent an amount of cash (rounded to the nearest whole cent), without
interest, less the amount of any withholding Taxes as contemplated by Section 2.7(h) which are
required to be withheld with respect thereto, equal to the product of: (i) such fraction,
multiplied by (ii) the Parent Common Stock Value.

          (h) Withholding Taxes. The Company and, on its behalf, Parent, the Final Surviving
Entity and the Escrow Agent, shall be entitled to deduct and withhold from any amounts payable
pursuant to this Agreement such amounts that are required, in Parent’s reasonable judgment, to be
deducted or withheld therefrom under any provision of U.S. federal, state, local or non-U.S. Tax
law or under any applicable legal requirement and to request any necessary Tax forms, including IRS
Form W-9 or the appropriate series of Form W-8, as applicable, or any similar information, from any
recipients of payments hereunder. Parent shall

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cause any amounts so deducted or withheld under
this subsection to be timely paid to the appropriate authorities. To the extent such amounts are
so deducted or withheld, such amounts shall be treated for all purposes as having been paid to the
Person to whom such amounts would otherwise have been paid.

          (i) Loans. In the event that any Company Stockholder has outstanding loans from the
Company as of the Effective Time, the cash consideration payable pursuant to this Section 2.7(i) to
such Company Stockholder shall be reduced by an amount equal to the sum of the outstanding
principal plus accrued interest of such Company Stockholder’s loans as of the Effective Time. Such
loans shall be satisfied as to the amount by which the consideration is reduced pursuant to this
Section 2.7(i). To the extent that any such consideration otherwise payable to such Company
Stockholder is so reduced, such amount shall be treated for all purposes as having been paid to
such Company Stockholder.

     2.8 Dissenting Shares.

          (a) Notwithstanding any other provisions of this Agreement to the contrary, any
shares of Company Capital Stock held by a Company Stockholder who has not effectively withdrawn or
lost such Company Stockholder’s appraisal rights under the DGCL, or dissenters’ rights under the
Corporations Code of the State of California (the “CCC”) to the extent applicable, (any such
shares, the “Dissenting Shares”) shall not be converted into or represent a right to receive the
applicable Merger Consideration for such Company Stockholder’s shares of Company Capital Stock set
forth in Section 2.7 hereof, but in lieu thereof, such Company Stockholder shall only be entitled
to such rights as are provided by the DGCL or the CCC.

          (b) Notwithstanding the provisions of Section 2.8(a) hereof, if any holder of
Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such
holder’s appraisal rights under the DGCL and the CCC, then, as of the later of the Effective Time
and the occurrence of such event, such holder’s shares shall automatically be converted into and
represent only the right to receive the Merger Consideration for Company Capital Stock, as
applicable, set forth in Section 2.7 hereof, without interest thereon, and upon surrender of the
certificate representing such shares in accordance with the terms of Section 2.10 hereof.

          (c) The Company shall give Parent (i) prompt notice of any demand for appraisal or
dissenters’ rights or other payment received by the Company pursuant to the applicable provisions
of the DGCL or the CCC, and (ii) the opportunity to participate in (but not control) all
negotiations and proceedings
with respect to such demands. The Company shall not, except with the prior written consent of
Parent (not to be unreasonably withheld, delayed or conditioned), make any payment with respect to
any such demands or offer to settle or settle any such demands. Any material communication to be
made by the Company to any stockholder of the Company with respect to such demands shall be
submitted to Parent in advance and shall not be presented to any stockholder of the Company prior
to the Company receiving Parent’s consent (not to be unreasonably withheld, delayed or
conditioned). Notwithstanding the foregoing, to the extent that Parent, the Interim Surviving
Entity, the Final Surviving Entity or the Company (A) makes any payment or payments in respect of
any Dissenting Shares or (B) incurs any Losses in respect of any Dissenting Shares (to the extent
that in aggregate such payments under (A) and (B) are in excess of the portion of the Merger
Consideration that otherwise would have been payable in respect of such shares in accordance with
Section 2.7(e)(ii) of this Agreement, the “Dissenting Share Payments”), Parent shall be entitled to
recover under the terms of Article VIII hereof the amount of such Dissenting Share Payments.

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     2.9 Determination of Final Adjusted Closing Cash Consideration.

          (a) Preliminary Adjusted Closing Cash Consideration.

               (i) At least five (5) Business Days prior to the Closing Date, the Company shall deliver
to
Parent (A) a statement (the “Company’s Closing Working Capital Statement”) of the Company’s Working
Capital as of the Closing Date immediately prior to the consummation of the transactions
contemplated hereby (“Closing Working Capital,” which, as set forth in the Company’s Closing
Working Capital Statement is the “Preliminary Closing Working Capital”) and itemized balances of
cash, cash equivalents and restricted cash as of the Closing Date immediately prior to the
consummation of the transactions contemplated hereby, and (B) the Company’s calculation of the
Preliminary Adjusted Closing Cash Consideration (as defined below) based upon the Company’s Closing
Working Capital Statement. The Company’s Closing Working Capital Statement (x) shall be prepared
in accordance with the accounting policies, practices and procedures used to prepare the
Financials, and the amounts set forth in the Company’s Closing Working Capital Statement shall be
calculated in accordance with GAAP applied consistently with the accounting policies, practices and
procedures used to prepare the Financials, and (y) shall fairly and accurately present the
Company’s good faith estimate (based on reasonable assumptions) of Closing Working Capital
immediately prior to the consummation of the transactions contemplated hereby. Company’s Closing
Working Capital Statement shall be itemized showing each component of current assets and current
liabilities and otherwise in reasonable detail and shall be accompanied by all supporting work
papers used by the Company to compute such amounts.

               (ii) “Preliminary Adjusted Closing Cash Consideration” shall mean (A) One
Hundred Ninety
Million Dollars ($190,000,000), plus (B) the Aggregate Option Exercise Price, minus (C) an amount
equal to any unpaid Estimated Third Party Expenses and Estimated Change of Control Fees that are
not otherwise reflected in the calculation of Preliminary Closing Working Capital, (D) minus (1)
the amount by which the cash, cash equivalent and restricted cash balance on the Company’s Closing
Working Capital Statement is less than Thirty-Two Million Dollars ($32,000,000) or plus (2) the
amount by which the cash, cash equivalent and restricted cash balance on the Company’s Closing
Working Capital Statement exceeds Thirty-Two Million Dollars ($32,000,000) and (E) minus (1) the
amount, if any, by which Preliminary Closing Working Capital is less than Three Million Dollars
($3,000,000) or plus (2) the amount, if any, by which Preliminary Closing Working Capital exceeds
Four Million Dollars ($4,000,000) (it being understood that, in the event that Preliminary Closing
Working Capital is between Three Million Dollars ($3,000,000) and Four Million Dollars
($4,000,000), then there shall be no adjustment to Preliminary Adjusted Closing Cash Consideration
pursuant to this clause (E)).

          (b) Final Adjusted Closing Cash Consideration.

               (i) Parent shall, within ninety (90) calendar days following the Closing Date, prepare (or
cause to be prepared) and delivered to the Representative (A) a statement (“Parent’s Closing
Working Capital Statement”) of Closing Working Capital and itemized balances of cash, cash
equivalent and restricted cash as of the Closing Date, and (B) Parent’s calculation of the Final
Adjusted Closing Cash Consideration (as defined below) based upon Parent’s Closing Working Capital
Statement. Parent’s Closing Working Capital Statement (x) shall be prepared in accordance with the
accounting policies, practices and procedures used to prepare the Financials, and the amounts set
forth in the Parent’s Closing Working Capital Statement shall be calculated in accordance with GAAP
applied consistently with the accounting policies, practices and procedures used to prepare the
Financials, and (y) shall fairly and accurately present Parent’s good faith estimate (based on
reasonable assumptions) of Closing Working Capital immediately prior to the consummation of the
transactions contemplated hereby. Parent’s Closing Working Capital Statement shall be itemized
showing each component of current assets and current liabilities and otherwise in reasonable detail
and shall be accompanied by all supporting work papers used by Parent to compute such amounts.

               (ii) In the event that the Representative shall disagree with any item(s) or amount(s) set
forth in Parent’s Closing Working Capital Statement within forty-five (45) calendar days following
the Representative’s receipt of Parent’s Closing Working Capital Statement, the Representative

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may
deliver a notice of such disagreement (a “Post-Closing Notice of Dispute”) setting forth, in
reasonable detail and to the extent practicable, (A) each item or amount so disputed by the
Representative, (B) the Representative’s calculation of each such item or amount, (C) the
Representative’s good faith estimate of Closing Working Capital after giving effect to the
Representative’s calculation of each such disputed item or amount, and (D) the Representative’s
calculation of the Final Adjusted Closing Cash Consideration (as defined below) after giving effect
to the Representative’s good faith estimate of Closing Working Capital. Parent shall provide the
Representative with reasonable access during normal business hours to the books and records and
personnel of the Company or Parent relating to preparation of the Parent’s Closing Working Capital
Statement. The Representative shall be deemed to have irrevocably consented and agreed, for and on
behalf of the Company Stockholders, to each item and amount set forth in Parent’s Closing Working
Capital Statement if the Representative shall fail to validly deliver a Post-Closing Notice of
Dispute, pursuant to this Section 2.9(b)(ii), setting forth the disputed items or amounts prior to
the expiration of the foregoing forty-five (45) calendar day period. In the event that the
Representative shall validly deliver to Parent a Post-Closing Notice of Dispute pursuant to this
Section 2.9(b)(ii), Parent may (in its sole and absolute discretion) either: (1) elect to negotiate
any disputed item(s) and amount(s) in order to determine the Final Adjusted Closing Cash
Consideration, or (2) refer any disputed item(s) and amount(s) to the Independent Accounting Firm
pursuant to Section 2.9(b)(iv)(B) hereof for resolution in accordance with the terms and conditions
thereof.

               (iii) In the event that Parent and the Representative shall reach agreement, within forty-five
(45) calendar days following Parent’s receipt of a Post-Closing Notice of Dispute validly delivered
by the Representative pursuant to Section 2.9(b)(ii) hereof, on all disputed items and amounts set
forth in a Post-Closing Notice of Dispute validly delivered by the Representative pursuant to
Section 2.9(b)(ii) hereof, then:

                    (A) Parent and the Representative shall execute a memorandum
setting forth (1) the resolved
item(s) and/or amount(s), and (2) Closing Working Capital, as calculated based on the resolved
item(s) and amount(s); and

                    (B) “Final Closing Working Capital” shall be
determined based upon the Closing Working
Capital, as so agreed by Parent and the Company.

               (iv) In the event that Parent and the Representative are unable to reach agreement, within
thirty (30) calendar days following Parent’s receipt of a Post-Closing Notice of Dispute
validly delivered by the Representative pursuant to Section 2.9(b)(ii) hereof, on all of the
disputed item(s) or amount(s) set forth in a Post-Closing Notice of Dispute validly delivered by
the Representative pursuant to Section 2.9(b)(ii) hereof, then:

                    (A) if applicable, Parent and the Representative shall execute a
memorandum setting forth (1)
the resolved item(s) and/or amount(s), if any, and (2) the item(s) or amount(s) that remain in
dispute following such negotiations;

                    (B) Parent and the Representative shall submit all remaining
disputed item(s) and amount(s) to
a nationally recognized accounting firm that is mutually agreeable to both parties (the
“Independent Accounting Firm”) for resolution in accordance with the terms and conditions hereof.
Each of the parties to this Agreement shall, and shall cause their respective Affiliates and
representatives to, provide full cooperation to the Independent Accounting Firm. The Independent
Accounting Firm shall (1) act in its capacity as an expert and not as an arbitrator, (2) consider
only those items and amounts as to which there is a dispute between Parent and the Representative,
and (3) be instructed to reach its conclusions regarding any such dispute within thirty (30)
calendar days after its appointment and provide a written explanation of its decision. In the
event that Parent and the Representative submit any disputed item(s) or

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amount(s) to an Independent
Accounting Firm pursuant to this Section 2.9(b)(iv), each such party may submit a “position paper”
to the Independent Accounting Firm setting forth the position of such party with respect to any
such disputed item or amount, which shall be considered by such Independent Accounting Firm as it
deems appropriate. The fees and expenses of the Independent Accounting Firm (the “Independent
Accounting Firm Expenses”) shall be borne by Parent and the Representative (solely on behalf of the
Company Stockholders) in proportion to the aggregate amount of all disputed items as to which such
party’s claim was unsuccessful. The Independent Accounting Firm shall determine all disputed
item(s) and amount(s) and its decision in respect thereof shall be final and binding upon Parent
and the Company Stockholders; and

                    (C) “Final Closing Working Capital” shall be
determined based upon: (1) the agreement of
Parent and the Representative in respect of any disputed items or amounts, as set forth in the
memorandum delivered by Parent and the Representative pursuant to clause (A) of this Section
2.9(b)(iv) hereof, in respect of each item and amount that is agreed upon by Parent and the
Representative prior to the expiration of the applicable forty-five (45) calendar day period set
forth in Section 2.9(b)(ii) hereof following the Representative’s valid delivery of a Post-Closing
Notice of Dispute pursuant to Section 2.9(b)(ii) hereof; and (2) the resolution of any disputed
items or amounts resolved by the Independent Accounting Firm pursuant to clause (B) of this Section
2.9(b)(iv).

               (v) On the basis of the foregoing, for all purposes of and under this Agreement, “Final
Adjusted Closing Cash Consideration” shall mean (A) Preliminary Adjusted Closing Cash Consideration
and (B) either minus (1) the amount, if any, by which Preliminary Closing Working Capital exceeds
the Final Closing Working Capital, or plus (2) the amount, if any, by which the Final Closing
Working Capital exceeds the Preliminary Closing Working Capital.

     2.10 Closing Payment Procedures.

          (a) Escrow Amount Deposit. As soon as practicable following the Effective Time,
Parent shall deposit with the Escrow Agent the Escrow Amount pursuant to the terms and subject to
the conditions set forth herein and in an escrow agreement, in substantially the form attached
hereto as Exhibit D (the “Escrow Agreement”). Parent shall be deemed to have contributed with the
Escrow Agent, with respect to each Company Stockholder, each such Company Stockholder’s Pro Rata
Portion of the Escrow Amount,
rounded to the nearest cent (with amounts greater than or equal to $0.005 rounded up) and
rounded down to the nearest share.

          (b) Closing Payments.

               (i) Promptly following the Closing Date, but in no event later than three (3) Business
Days
after the Closing Date, Parent or its agent shall mail a letter of transmittal in substantially the
form attached hereto as Exhibit E (the “Letter of Transmittal”) to each Company Stockholder at the
address set forth opposite each such Company Stockholder’s name on the Spreadsheet. The Letter of
Transmittal shall include, among other things, an acknowledgement by the Company Stockholder that,
by executing the Letter of Transmittal, such Company Stockholder agrees to be bound by all of the
terms and conditions contained in Article VIII of this Agreement.

               (ii) Upon surrender of a certificate that formerly represented their respective shares of
Company Capital Stock (the “Company Stock Certificates”) for cancellation to Parent or its agent,
together with the Letter of Transmittal and any other instruments that Parent or its agent requests
(the “Exchange Documents”), duly completed and validly executed in accordance with the instructions
thereto, the Company Stockholder shall be entitled to promptly receive from Parent or its agent in
exchange therefor, that portion of the Aggregate Stock Consideration and the Final Adjusted Closing
Cash Consideration into

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which the shares of Company Capital Stock represented by such Company Stock
Certificate and/or Cancelled Equity have been converted pursuant to Section 2.7 hereof (determined,
solely for purposes of this Section 2.10(b), as if the Final Adjusted Closing Cash Consideration
equaled the Preliminary Adjusted Closing Cash Consideration ), less each Company Stockholder’s Pro
Rata Portion of the Escrow Amount contributed with the Escrow Agent with respect to such holder
pursuant to Section 2.10(a) hereof. Parent or its agent shall deliver the consideration specified
in the preceding sentence to a Company Stockholder promptly following the receipt by Parent or its
agent of such Company Stockholder’s Company Stock Certificates and/or Exchange Documents, duly
completed and validly executed in accordance with the instructions thereto. Upon the surrender of
any such Company Stock Certificate, the Company Stock Certificate so surrendered shall thereupon be
cancelled. Until so surrendered, each Company Stock Certificate outstanding after the Effective
Time will be deemed, for all corporate purposes thereafter, to evidence only the right to receive
the portion of the Merger Consideration (without interest) into which such shares of Company
Capital Stock shall have been converted pursuant to Section 2.7 hereof.

          (c) Post-Closing Payments. As soon as practicable following the determination of
the Final Adjusted Closing Cash Consideration pursuant to Section 2.9(b) hereof, the following
shall occur:

               (i) in the event that the Final Adjusted Closing Cash Consideration is less than Preliminary
Adjusted Closing Cash Consideration (the “Shortfall Amount”), Parent and the Representative shall
instruct the Escrow Agent to promptly release from the Indemnity Escrow Fund and deliver to Parent
an amount in cash equal to the Shortfall Amount; and

               (ii) in the event that the Final Adjusted Closing Cash Consideration exceeds the Preliminary
Adjusted Closing Cash Consideration (the “Excess Amount”), Parent shall promptly deliver, or have
its agent deliver, an amount of cash equal to the Excess Amount for payment to the Company
Stockholders in accordance with their respective Pro Rata Portions; provided, however, that with
respect to any Company Stockholder that has not previously surrendered and delivered Company Stock
Certificates and/or Exchange Documents, as the case may be, in accordance with Section 2.10(b)(ii),
the portion of such Excess Amount applicable to such Company Capital Stock shall instead be held by
Parent or its agent on behalf of such Company Stockholder until such Company Stock Certificates
and/or Exchange Documents have been so surrendered.

     2.11 No Further Ownership Rights in Company Capital Stock. The amounts paid in respect of the
surrender for exchange of shares of Company Capital Stock in accordance with the terms hereof shall
be deemed to be full satisfaction of all rights pertaining to such shares of Company Capital Stock,
and there shall be no further registration of transfers on the records of the Interim Surviving
Entity or the Final Surviving Entity of shares of Company Capital Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Company Stock Certificates
are presented to the Final Surviving Entity for any reason, they shall be canceled and exchanged as
provided in this Article II.

     2.12 No Liability. Notwithstanding anything to the contrary in this Agreement, none of Parent,
Merger Subs, the Interim Surviving Entity, the Final Surviving Entity or any party hereto shall be
liable to a holder of any shares of Company Capital Stock for any amount paid to a public official
to the extent required by any applicable abandoned property, escheat or similar Law.

     2.13 Transfers of Ownership. If any payments are to be disbursed to a Person other than the Person
whose name is reflected on the Company Stock Certificate surrendered in exchange therefor, it will
be a condition of the issuance or delivery thereof that the certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the Person requesting such
exchange will have paid to Parent or any agent designated by it any transfer or other Taxes
required by reason of the payment of any portion of the Merger Consideration in any name other than
that of the registered holder of the certificate surrendered, or

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established to the satisfaction of
Parent or any agent designated by it that such Tax has been paid or is not payable.

     2.14 Surrender of Certificates; Lost, Stolen or Destroyed Certificates. No portion of the Merger
Consideration shall be paid to the holder of any unsurrendered Company Stock Certificate with
respect to shares of Company Capital Stock formerly represented thereby until the holder of record
of such Company Stock Certificate shall have surrendered such Company Stock Certificate and the
Exchange Documents pursuant hereto. In the event any Company Stock Certificates shall have been
lost, stolen or destroyed, Parent or its agent shall issue in exchange for such lost, stolen or
destroyed certificates, upon the making of an affidavit of that fact by the holder thereof, such
amount, if any, as may be required pursuant to Section 2.7 hereof; provided, however, that Parent
or its agent may, in its discretion and as a condition precedent to the issuance thereof, require
the Person who is the owner of such lost, stolen or destroyed certificates to either (a) deliver a
bond in such amount as it may reasonably direct, or (b) provide an indemnification agreement in a
form and substance acceptable to Parent or its agent, against any Claim that may be made against
Parent or its agent with respect to the certificates alleged to have been lost, stolen or
destroyed.

     2.15 Additional Adjustments to Merger Consideration. The Aggregate Stock Consideration shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into Parent Common
Stock), reorganization, recapitalization, reclassification or other like change with respect to
Parent Common Stock occurring or having a record date on or after the date hereof and prior to the
Effective Time.

     2.16 Further Assurances. If at any time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Final Surviving Entity with full right,
title and possession to all assets, property, rights, privileges, powers and franchises of the
Company, Parent, Merger Subs, and the officers and directors of the Company, the Interim Surviving
Entity, the Final Surviving Entity and Parent are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and reasonably necessary action.

     2.17 Release of Escrow Fund. The Escrow Fund shall be promptly released to the Company
Stockholders in accordance with their respective Pro Rata Portions eighteen (18) months following
the Closing Date, subject to holdback of any amounts that are set forth in a then-unresolved Claim
Certificate. Upon the resolution of any such unresolved Claim Certificate, the remainder of the
Escrow Fund shall be promptly released to the Company Stockholders in accordance with their
respective Pro Rata Portions and the terms of the Escrow Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in the disclosure schedule of the Company addressed to Parent and Merger
Subs, dated as of the date hereof and delivered to Parent and Merger Subs concurrently with the
parties’ execution of this Agreement (the “Company Disclosure Schedule”), referencing a
representation or warranty herein (it being understood that (i) the Company Disclosure Schedule
shall be arranged in sections and subsections corresponding to the sections and subsections
contained in this Article III, (ii) the disclosures in any section or subsection of the Company
Disclosure Schedule shall qualify the applicable representations and warranties in the
corresponding section or subsection of this Article III and, in addition, the representations and
warranties in other sections or subsections in this Article III to the extent it is reasonably
apparent on the face of such disclosures that such disclosures are applicable to such other
sections or subsections, and (iii) such disclosures in the Company Disclosure Schedule relating to
the representations and warranties in this

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Article III shall also be deemed to be representations
and warranties made by the Company under this Article III), the Company represents and warrants to
Parent and Merger Subs as follows:

     3.1 Organization of the Company.

          (a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has the corporate power to own its
properties and to carry on its business as currently conducted. The Company is duly qualified or
licensed to do business and in good standing (to the extent the concept of good standing is
recognized by such jurisdiction) as a foreign corporation in each jurisdiction in which the
character or location of its assets or properties (whether owned, leased or licensed) or the nature
of its business make such qualifications necessary, except where the failure to be so qualified,
licensed or in good standing would not reasonably be expected to be material to the Company.
Section 3.1(a) of the Company Disclosure Schedule lists every state or foreign jurisdiction in
which the Company has employees or facilities. The Company has made available a true and correct
copy of its certificate of incorporation, as amended to date (the “Certificate of Incorporation”)
and bylaws, as amended to date, each in full force and effect on the date hereof (collectively, the
“Charter Documents”), to Parent. The board of directors of the Company has not approved or
proposed any amendment to any of the Charter Documents.

          (b) Section 3.1(b) of the Company Disclosure Schedule lists the directors and
officers of the Company as of the date hereof, separately noting which of such directors and
officers has any rights to
indemnification from the Company and the documents or Contracts pursuant to which such
directors and officers have such rights, and also separately lists any other former director or
officer of the Company with rights to indemnification from the Company (other than with respect to
Company Products), and the documents or Contracts pursuant to which any such Person has such
rights. Section 3.1(b) of the Company Disclosure Schedule sets forth the trade names of the
Company used by it in conducting the operations now being conducted by the Company, and any other
trade names of the Company used by it at any time prior to the date hereof.

     3.2 Company Capital Structure.

          (a) The Company Capital Stock consists of 38,500,000 shares of Company Common Stock,
of which 3,736,485 shares of Company Common Stock are issued and outstanding as of the date hereof,
and 18,998,389 shares of Company Preferred Stock, of which (i) 11,363,661 shares of Company
Preferred Stock are designated as Company Series A-1 Preferred Stock, of which 11,363,661 shares of
Company Series A-1 Preferred Stock are issued and outstanding as of the date hereof, (ii) 512,901
shares of Company Preferred Stock are designated as Company Series A-2.1 Preferred Stock, of which
512,901 shares of Company Series A-2.1 Preferred Stock are issued and outstanding as of the date
hereof, (iii) 1 share of Company Preferred Stock is designated as Company Series A-2.2 Preferred
Stock, and 1 share of Company Series A-2.2 Preferred Stock is issued and outstanding as of the date
hereof, (iv) 27,557 shares of Company Preferred Stock are designated as Company Series A-3
Preferred Stock, of which 27,557 shares of Company Series A-3 Preferred Stock are issued and
outstanding as of the date hereof, (v) 21,275 shares of Company Preferred Stock are designated as
Company Series A-4 Preferred Stock, of which 21,275 shares of Company Series A-4 Preferred Stock
are issued and outstanding as of the date hereof, (vi) 99 shares of Company Preferred Stock are
designated as Company Series A-5 Preferred Stock, of which 99 shares of Company Series A-5
Preferred Stock are issued and outstanding as of the date hereof, (vii) 479,436 shares of Company
Preferred Stock are designated as Company Series A-6 Preferred Stock, of which 444,944 shares of
Company Series A-6 Preferred Stock are issued and outstanding as of the date hereof, (viii)
5,121,952 shares of Company Preferred Stock are designated as Company Series B-1 Preferred Stock,
of which 5,121,952 shares of Company Series B-1 Preferred Stock are issued and outstanding as of
the date hereof, and (ix) 1,471,507 shares of Company Preferred Stock are designated as Company
Series C-1 Preferred Stock, of which 1,459,586 shares of

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Company Series C-1 Preferred Stock are
issued and outstanding as of the date hereof. As of the date hereof, the capitalization of the
Company is as set forth in Section 3.2(a) of the Company Disclosure Schedule. The Company Capital
Stock is held by the persons with the domicile addresses and in the amounts set forth in Section
3.2(a) of the Company Disclosure Schedule which further sets forth for each such person the number
of shares held, class and/or series of such shares and the number of the applicable stock
certificates representing such shares. All outstanding shares of Company Capital Stock are duly
authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights
created by Law, the Charter Documents, or any agreement to which the Company is a party or by which
it is bound.

          (b) All currently and formerly outstanding shares of Company Capital Stock, options
or warrants to purchase Company Capital Stock have been validly issued or repurchased (in the case
of shares that were outstanding and repurchased by the Company or any stockholder of the Company)
in material compliance with all applicable Laws, and were issued, transferred and repurchased (in
the case of shares that were outstanding and repurchased by the Company or any stockholder of the
Company) in all material respects in accordance with any right of first refusal or similar right or
limitation, including those in the Charter Documents or any other agreements or arrangements to
which the Company is a party. There are no declared or accrued but unpaid dividends with respect
to any shares of Company Capital Stock. The Company has no other capital stock authorized, issued
or outstanding.

          (c) Section 3.2(c) of the Company Disclosure Schedule sets forth for all holders of
Restricted Shares as of the date hereof, the name of the holder of such Restricted Shares, the
repurchase price of such Restricted Shares, the date of purchase of such Restricted Shares and the
vesting schedule for such Restricted Shares, including the extent vested as of the date hereof,
whether the vesting of such Restricted Shares is subject to acceleration as a result of the
transactions contemplated by this Agreement or any other events (including a description of the
material terms of any such acceleration provisions).

          (d) Except for the Stock Plans, the Company has never adopted, sponsored or
maintained any stock option plan or any other plan, arrangement or agreement providing for equity
compensation to any person that has not been listed in Section 3.2(d) of the Company Disclosure
Schedule. The Company has reserved 9,413,821 shares of Company Common Stock for issuance to
employees and directors of, and consultants to, the Company upon the issuance of stock upon the
exercise of options or vesting of Company RSUs granted under the Stock Plans, of which (i)
5,702,279 shares are issuable, as of the date hereof, upon the exercise of outstanding, unexercised
Company Options or the vesting of Company RSUs granted under the Stock Plans and (ii) 300,455
shares remain available for future grant as of the date hereof. Section 3.2(d) of the Company
Disclosure Schedule sets forth for each outstanding Company Option and Company RSU as of the date
hereof, the name of the holder of Company Options or Company RSUs, the type of entity of such
holder if such holder is not an individual, the Stock Plan under which such holder was granted such
Company Options or Company RSUs, the number of shares of Company Capital Stock issuable upon the
exercise of such Company Options or Company RSUs, the exercise price of such Company Options, the
date of grant of such Company Options or Company RSUs, the vesting schedule for such Company
Options or Company RSUs, whether the vesting of such Company Options or Company RSUs is subject to
acceleration as a result of the transactions contemplated by this Agreement or any other events
(including a description of the material terms of such acceleration provisions), whether such
Company Options is a nonstatutory option or intended to qualify as an incentive stock option as
defined in Section 422 of the Code, whether such Company Options is early exercisable, and whether
such Company Options is subject to Section 409A of the Code. True and complete copies of all forms
of agreements and instruments relating to or issued under the Stock Plans have been made available
to Parent, and such agreements and instruments have not been amended, modified or supplemented, and
there are no agreements to amend, modify or supplement such agreements or instruments from the
forms thereof made available to Parent. Except for the Company Options or Company RSUs listed on
Section 3.2(d) of the Company Disclosure Schedule, as of the date hereof, there are no options,
warrants, calls, rights, convertible securities, commitments or agreements of any character,
written or

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oral, to which the Company is a party or by which the Company is bound obligating the
Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company
to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any
such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized
stock appreciation right, phantom stock, profit participation, or other similar rights with respect
to the Company.

          (e) There are no outstanding loans made by the Company to any stockholders of the
Company or to any current or former Employee.

          (f) Except as contemplated hereby, the Company is not a party to any, and to the
Knowledge of the Company there are no, voting trusts, proxies, or other agreements or
understandings with respect to the voting stock of the Company. There are no agreements to which
the Company is a party relating to the registration, sale or transfer (including agreements
relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Company Capital
Stock. As a result of the First Step Merger, Parent will be the sole record and beneficial holder
of all issued and outstanding Company Capital Stock and all rights to acquire or receive any shares
of Company Capital Stock, whether or not such shares of Company Capital Stock are outstanding.

     3.3 Subsidiaries. Section 3.3 of the Company Disclosure Schedule lists each corporation, limited
liability company, partnership, association, joint venture or other business entity in which the
Company owns, any shares of capital stock or holds any interest in, or otherwise controls, or has
controlled, directly or indirectly, and lists each Subsidiary of the Company. Each entity listed
on Section 3.3 of the Company Disclosure Schedule that is no longer in existence has been duly
dissolved in accordance with its charter documents and the Laws of the jurisdiction of its
incorporation or organization and there are no outstanding liabilities or obligations (outstanding,
contingent or otherwise), including Taxes, with respect to any such entity. Each Subsidiary is a
corporation duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization. Each Subsidiary has the corporate power to own
its properties and to carry on its business as currently conducted. Each Subsidiary is duly
qualified or licensed to do business and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties (whether owned, leased
or licensed) or the nature of its business make such qualifications necessary and where the failure
to be so qualified is reasonably likely to be material to the Company and its Subsidiaries, taken
as a whole. A true and correct copy of each Subsidiary’s charter documents and, if applicable,
bylaws, each as amended to date and in full force and effect on the date hereof, has been made
available to Parent. Section 3.3 of the Company Disclosure Schedule lists the directors and
officers of each Subsidiary as of the date of this Agreement. The operations now being conducted
by each Subsidiary listed on Section 3.3 of the Company Disclosure Schedule are not now and have
never been conducted under any other name other than the trade names listed on Section 3.1(b) of
the Company Disclosure Schedule. All of the outstanding shares of capital stock of each Subsidiary
listed on Section 3.3 of the Company Disclosure Schedule are owned of record and beneficially by
the Company or a Subsidiary of the Company. All outstanding shares of stock of each such
Subsidiary are duly authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights in the charter documents or bylaws of such Subsidiary, or any agreement to which
such Subsidiary is a party or by which it is bound, and have been issued in compliance with all
applicable Laws. There are no options, warrants, calls, rights, commitments or agreements of any
character, written or
oral, to which any Subsidiary listed on Section 3.3 of the Company Disclosure
Schedule is a party or by which it is bound obligating the Subsidiary to issue, deliver, sell,
repurchase or redeem, or cause to be issued, sold, repurchased or redeemed, any shares of the
capital stock of such Subsidiary or obligating such Subsidiary to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into any such option, warrant, call
right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar rights with

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respect to any of the Subsidiaries listed
on Section 3.3 of the Company Disclosure Schedule. The Company has not agreed or is obligated to
make any future investment in, or capital contribution to, any Person.

     3.4 Authority. The Company has all requisite corporate power and authority to enter into this
Agreement and any Related Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement and any Related
Agreements to which the Company 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 the
Company, and no further corporate action is required on the part of the Company to authorize the
Agreement and any Related Agreements to which it is a party and the transactions contemplated
hereby and thereby, subject only to the approval and adoption of this Agreement and the approval of
the transactions contemplated hereby by the stockholders of the Company. The vote required to
approve and adopt this Agreement, and to approve the First Step Merger and the other transactions
contemplated hereby by the stockholders of the Company is set forth in Section 3.4 of the Company
Disclosure Schedule. The board of directors of the Company has (a) unanimously resolved that the
First Step Merger is advisable and in the best interests of the Company and its stockholders, and
(b) unanimously approved the Agreement, the Merger and the transactions contemplated hereby. This
Agreement and each of the Related Agreements to which the Company is a party have been duly
executed and delivered by the Company and assuming the due authorization, execution and delivery by
the other parties hereto and thereto, constitute the valid and binding obligations of the Company
enforceable against it in accordance with their respective terms, except that such enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to
creditors’ rights generally, and is subject to general principles of equity.

     3.5 No Conflict. The execution and delivery by the Company of this Agreement and any Related
Agreements to which the Company is a party, and the consummation of the transactions contemplated
hereby and thereby, will not conflict with or result in any violation of or default under (with or
without notice or lapse of time, or both) or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under (any such event, a
“Conflict”) (a) any provision of the Charter Documents, as amended, (b) any Material Contract, or
(c) any Law applicable to the Company or any of its properties or assets (whether tangible or
intangible), except in the case of clause (b) or (c), as is not and would not reasonably be
expected be, material or result in material liability to the Company. Section 3.5 of the Company
Disclosure Schedule sets forth all necessary consents, notices, waivers and approvals of parties to
any Material Contracts as are required thereunder in connection with the First Step Merger or, if
the Second Step Merger is completed as provided in Section 2.1(c), the Second Step Merger, or for
any such Contract to remain in full force and effect without limitation, modification or alteration
after the Effective Time, and after the Second Step Merger is effective, so as to preserve all
rights of, and benefits to, the Company (or the Final Surviving Entity) under such Contracts from
and after the Effective Time, and if the Second Step Merger is effective. Following the Effective
Time, and if the Second Step Merger is effective, the Interim Surviving Entity or the Final
Surviving Entity, as applicable, will be permitted to exercise all of its rights under the
Contracts without the payment of any additional amounts or consideration other than ongoing fees,
royalties or payments which the Company would otherwise be required to pay pursuant to the terms of
such Contracts had the transactions contemplated by this Agreement not occurred.

     3.6 Consents. No consent, notice, waiver, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by, or with respect to, the Company
in connection with the execution and delivery of this Agreement and any Related Agreements to which
the Company is a party or the consummation of the transactions contemplated hereby and thereby,
except for (a) the filing of the Certificates of Merger with the Secretary of State of the State of
Delaware, (b) the approval and adoption of this Agreement and approval of the transactions
contemplated hereby by the stockholders of the Company, (c) the filing of the Notification and
Report Forms with the United States Federal Trade Commission (“FTC”) and the Antitrust Division of
the United States Department of Justice

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(“DOJ”) required by the HSR Act and the expiration or
termination of the applicable waiting period under the HSR Act and such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as may be required under
U.S. or foreign Laws applicable to mergers or acquisitions, and (d) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings which if not obtained or
made would not be material to the Company or materially adversely affect the ability of the parties
hereto to consummate the Merger within the time frame in which the Merger would otherwise be
consummated in the absence of the need for such consent, waiver, approval, order, authorization,
registration, declaration or filing.

     3.7 Company Financial Statements. Section 3.7 of the Company Disclosure Schedule sets forth the
Company’s (a) consolidated balance sheets as of December 31, 2008 and December 31, 2009 (with
December 31, 2009 as the
“Balance Sheet Date”), and the related consolidated statements of operations, cash flow and
stockholders’ equity for the three year period then ended on the Balance Sheet Date (the “Audited
Financials”), and (b) unaudited consolidated balance sheet as of March 31, 2010, and the related
unaudited consolidated statements of operations for the three months then ended (the “Interim
Financials,” and, together with the Audited Financials, the “Financials”), which Audited Financials
have been audited by PricewaterhouseCoopers LLP, the Company’s independent auditors (the “Company
Auditors”). The Financials are true and correct in all material respects and have been prepared in
accordance with GAAP consistently applied on a consistent basis throughout the periods indicated
and consistent with each other (except that the Interim Financials do not contain footnotes and
other presentation items that may be required by GAAP). The Financials present fairly in all
material respects the Company’s consolidated financial condition, operating results and, if
applicable, cash flows as of the dates and during the periods indicated therein, subject in the
case of the Interim Financials to normal year-end adjustments, which are not material in amount or
significance in any individual case or in the aggregate. The Company’s unaudited consolidated
balance sheet contained in the Interim Financials is referred to hereinafter as the “Current
Balance Sheet.” The Company has not had any disagreement (as such term is defined in Item 304 of
Regulation S-K) with the Company Auditors or any of its other auditors regarding accounting matters
or policies during any of its past three full fiscal years or during the current fiscal
year-to-date. The Company is not a party to, nor does it have any commitment to become a party to,
any joint venture, off-balance sheet partnership or any similar Contract relating to any
transaction or relationship between or among the Company, on the one hand, and any unconsolidated
Affiliate, including any structured finance, special purpose or limited purpose entity, on the
other hand, or any “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K).
The Company has identified all material uncertain Tax positions contained in all Returns filed by
the Company, and has established adequate reserves in all material respects and made appropriate
disclosures in the Audited Financials, in each case in accordance with the requirements of
Financial Interpretation No. 48 of FASB Statement No. 109.

     3.8 Internal Controls. The Company has established and maintains, adheres to and enforces a system
of internal accounting controls which are effective in providing assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with
GAAP (including the Financials) in all material respects, including policies and procedures that
(a) require the maintenance of records that in reasonable detail accurately and fairly reflect in
all material respects the transactions and dispositions of the assets of the Company, (b) provide
assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with GAAP in all material respects, and that receipts and expenditures of the Company
are being made only in accordance with appropriate authorizations of management and the board of
directors of the Company, and (c) provide assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the assets of the Company. Neither the Company nor
the Company Auditors has identified or been made aware of (i) any material weakness in the system
of internal accounting controls utilized by the Company, (ii) any fraud, whether or not material,
that involves the Company management or other employees, consultants or contractors who have a role
in the preparation of financial statements or the internal accounting controls utilized by the
Company, or (iii) any meritorious Claim or meritorious allegation regarding any of the foregoing.

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     3.9 No Undisclosed Liabilities. The Company has no material liability, indebtedness, obligation,
expense, Claim, deficiency, guaranty or endorsement of any type, whether known or unknown, accrued
or unaccrued, absolute or contingent, disputed or undisputed, secured or unsecured, joint or
several, matured or unmatured, due or to become due, vested or unvested, executory, determined,
determinable or other (whether or not required to be reflected in financial statements in
accordance with GAAP), except for (a) those which have been reflected in the Current Balance Sheet,
(b) those that have arisen in the ordinary course of business consistent with past
practices since the date of the Current Balance Sheet and prior to the date hereof and that,
individually or in the aggregate, have not or would not reasonably be expected to be material to
the Company, (c) after the date hereof, those resulting from any of the activities permitted under
Section 5.2 that have arisen in the ordinary course of business consistent with past practices, or
(d) Third Party Expenses and Change of Control Fees.

     3.10 No Changes. Since March 31, 2010 through the date hereof, and except for the Merger and the
other transactions contemplated by the Agreement and any Related Agreement, (a) the business of the
Company has been conducted in the ordinary course of business consistent with past practice; (b)
there has not been any Company Material Adverse Effect; and (c) there has not been any action or
event, nor any authorization, commitment or agreement by the Company with respect to any action or
event, that if taken or if it occurred after the date hereof would be prohibited by Section 5.2
hereof.

     3.11 Accounts Receivable.

          (a) The Company has made available to Parent a list of all accounts receivable,
whether billed or unbilled, of the Company as of the date of the Current Balance Sheet, together
with an aging schedule (of only billed accounts receivable) indicating a range of days elapsed
since invoice.

          (b) All of the accounts receivable of the Company reflected on the Current Balance
Sheet arose in the ordinary course of business, are carried at values determined in accordance with
GAAP consistently applied, are not subject to any valid set-off or counterclaim, do not represent
obligations for goods sold on consignment, on approval or on a sale-or-return basis or subject to
any other repurchase or return arrangement and, to the Knowledge of the Company, are collectible
except to the extent of reserves therefor set forth in the Current Balance Sheet. No Person has
any Lien on any accounts receivable of the Company and no request or agreement for material
deduction or discount has been made with respect to any such accounts receivable of the Company.

     3.12 Tax Matters.

          (a) Definition of Taxes. For the purposes of this Agreement, the term “Tax” or,
collectively, “Taxes” shall mean (i) any and all U.S. federal, state, provincial, local and
non-U.S. taxes, assessments and other governmental charges, duties, impositions, installments and
liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use
and occupation, capital and value added goods and services, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, escheat, excise and property taxes as well as public
imposts, fees and social security charges (including health, unemployment, workers’ compensation
and pension insurance), together with all interest, penalties and additions imposed with respect to
such amounts, (ii) any liability for the payment of any amounts of the type described in clause (i)
of this Section 3.12(a) as a result of being or having been a member of an Affiliated 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 3.12(a) as a result of any express or implied obligation to indemnify any
other Person or as a result of any obligation under any agreement or arrangement with any other
Person with respect to such amounts and including any liability for taxes of a predecessor or
transferor or otherwise by operation of Law.

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          (b) Tax Returns and Audits.

               (i) The Company has (A) prepared and timely filed all required Returns relating to any and
all
Taxes concerning or attributable to the Company or its operations, and such Returns in all material
respects are true and correct and have been completed in accordance with applicable Law and (B)
timely paid all Taxes required to be paid, whether or not shown to be due on such Returns. The
Company has made available to Parent copies of all Returns for the Company filed for all periods
for which the applicable statute of limitations has not expired.

               (ii) The Company has registered with all appropriate Tax authorities and has reported,
withheld and remitted, as applicable, with respect to its Employees, stockholders and other third
parties and from any other Person, all U.S. federal, state, provincial and non-U.S. income Taxes
and social security charges and similar fees, Federal Insurance Contribution Act amounts, Federal
Unemployment Tax Act amounts and other Taxes required to be reported, withheld and remitted, as
applicable, and has timely paid over such withheld amounts to the appropriate authorities.

               (iii) The Company is not delinquent in the payment of any Tax, nor is there any Tax deficiency
outstanding, assessed or proposed in writing against the Company, nor has the Company executed any
waiver of any statute of limitations on or extending the period for the assessment or collection of
any Tax. There are (and immediately following the Effective Time there will be) no Liens on the
assets of the Company relating or attributable to Taxes, other than Liens for Taxes not yet due and
payable.

               (iv) No audit or other examination of any Return of the Company is presently in progress, nor
has the Company been notified in writing of any request for such an audit or other examination. No
adjustment relating to any Return filed by the Company has been proposed in writing by any Tax
authority to the Company or any of its representatives. No Claim has ever been made that the
Company is or may be subject to taxation by a jurisdiction in which it does not file a Return.

               (v) The Company does not have any liabilities for unpaid Taxes as of March 31, 2010, which
have not been accrued or reserved on the Current Balance Sheet, whether asserted or unasserted,
contingent or otherwise. The Company has not incurred any liability for Taxes since such date
other than in the ordinary course of business.

               (vi) The Company has not (A) ever been a member of an Affiliated Group (other than an
Affiliated Group of which the Company is the common parent), (B) ever been a party to any Tax
sharing, indemnification or allocation agreement or arrangement, nor does the Company owe any
amount pursuant to such an agreement or arrangement, (C) any liability for the Taxes of any Person
under Treasury Regulation § 1.1502-6 (or any similar provision of state, local or non-U.S. Law, and
including any arrangement for group or consortium relief or similar arrangement) other than any
member of an Affiliated Group of which the Company is the common parent, as a transferee or
successor, by Contract, by operation of Law or otherwise and (D) ever been a party to any joint
venture, partnership or other arrangement that could be treated as a partnership for Tax purposes.

               (vii) The Company has not been, at any time, a “United States Real Property Holding
Corporation” within the meaning of Section 897(c)(2) of the Code.

               (viii) The Company has not constituted either a “distributing corporation” or a
“controlled
corporation” in a distribution of stock intended to qualify for tax-free treatment under Section
355 of the Code.

               (ix) The Company has not engaged in a “reportable transaction” as set forth in
Treasury
Regulation Section 1.6011, or any similar transaction under any provision of applicable Law.

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               (x) The Company is and has at all times been resident for Tax purposes in its country of
incorporation or formation, and is not and has not been treated as resident in any other country
for any Tax purpose (including any arrangement for the avoidance of double taxation). The Company
is not subject to Tax in any country other than its country of incorporation or formation by virtue
of having a branch, permanent establishment, place of business or source of income in that country.
The Company is not liable for any Tax as the agent of any other Person, business or enterprise or
constitutes a permanent establishment or other place of business of any other Person, business or
enterprise for any Tax purpose.

               (xi) The Company will not be required to include any income or gain or exclude any deduction
or loss from taxable income for any taxable period (or portion thereof ending after the Closing),
in each case in excess of the amount of net operating loss carryovers or the income equivalent of
tax credit carryovers of the Company that are available to currently offset any increase in taxable
income, as a result of (A) any change in method of accounting made prior to the Closing, (B)
closing agreement under Section 7121 of the Code executed prior to the Closing, (C) deferred
intercompany gain or excess loss account under Treasury Regulations under Section 1502 of the Code
in connection with a transaction consummated prior to the Closing (or in the case of each of (B)
and (C), under any similar provision of applicable Law), (D) installment sale or open transaction
disposition consummated prior to the Closing, or (E) prepaid amount received prior to the Closing.

               (xii) The tax basis of the Company in its assets for purposes of determining its future
amortization, depreciation and other income Tax deductions is accurately reflected on its Tax books
and records.

               (xiii) The Company has made available to Parent all documentation relating to, and the Company
is in compliance in all material respects with all terms and conditions of, any Tax exemption, Tax
holiday or other Tax reduction agreement or order with respect to the Company as applicable (each a
“Tax Incentive”). To the Knowledge of the Company, the consummation of the transactions
contemplated by this Agreement will not have any adverse effect on the continued validity and
effectiveness of any such Tax Incentive.

               (xiv) The Company is in compliance in all material respects with all applicable transfer
pricing Laws and regulations, including the execution and maintenance of contemporaneous
documentation substantiating the transfer pricing practices and methodology of the Company.

               (xv) The Company has in its possession official foreign receipts for any Taxes paid by it, for
which receipts are ordinarily provided to any foreign Tax authorities.

               (xvi) The Company has disclosed on its federal income Tax Returns all positions taken therein
which could give rise to understatement of Tax within the meaning of Section 6662 of the Code.

               (xvii) No stockholder of the Company holds shares of Company Capital Stock that are
non-transferable and subject to a substantial risk of forfeiture within the meaning of Section 83
of the Code with respect to which a valid election under Section 83(b) of the Code has not been
made, and no payment to any Company Stockholder of any portion of the Merger Consideration payable
pursuant to this Agreement will result in compensation or other income to such Company Stockholder
with respect to which Parent or the Company would be required to deduct or withhold any Taxes.

          (c) Loss of Compensation Deduction. There is no Contract, plan or arrangement to
which the Company or any ERISA Affiliate is a party, including the provisions of this Agreement,
covering any
Employee of the Company, which, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to Section 404 of the Code.

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          (d) Section 280G. None of the Company or any ERISA Affiliate has made any payments
to any Employee and none is a party to any agreement, plan, arrangement or other contract with any
current or former Employee to make payments individually or considered collectively with any other
events, agreements, plans, arrangements or other Contracts, that will, or could reasonably be
expected to, be characterized as a “parachute payment” within the meaning of Section 280G(b)(1) of
the Code or that could not be deductible under Section 280G of the Code. There is no agreement,
plan, arrangement or other contract by which the Company or any of its ERISA Affiliates is bound to
compensate any current or former Employee for excise taxes paid pursuant to Section 4999 of the
Code.

          (e) Section 409A. Section 3.12(e) of the Company Disclosure Schedule lists each
current Contract, agreement or arrangement between the Company or any ERISA Affiliate and any
Employee that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of
the Code) subject to Section 409A of the Code. Each such nonqualified deferred compensation plan,
if any, has been operated since January 1, 2005 in operational compliance in all material respects
with Section 409A of the Code and the guidance and regulations thereunder (“Section 409A”) and has
been, since January 1, 2009, in documentary compliance in all material respects with Section 409A.
No deferred compensation plan existing prior to January 1, 2005, which would otherwise be subject
to Section 409A, has been “materially modified” at any time after October 3, 2004. No stock right
(as defined in U.S. Treasury Department regulation 1.409A-1(l)) has been granted to any current or
former Employee on or after January 1, 2005 and/or that vested and became exercisable after January
1, 2005, (i) that has an exercise price that has been or may be less than the fair market value of
the underlying equity as of the date such option or right was granted, as determined by the board
of directors of the Company in good faith, (ii) that has any feature for the deferral of
compensation other than the deferral of recognition of income until the later of exercise or
disposition of such option or rights, or (iii) with respect to any class of stock that is not
“service recipient stock” (within the meaning of applicable regulations under Section 409A). No
compensation shall be reportable as nonqualified deferred compensation or includable in the gross
income of any Employee as a result of the operation of Section 409A with respect to any
arrangements or agreements in effect as of the Effective Time. There is no Contract, plan or
arrangement to which the Company or any of its ERISA Affiliates is a party, including the
provisions of this Agreement, covering any current or former Employee, which individually or
collectively could require the Company or any of its ERISA Affiliates to pay a Tax gross up payment
to, or otherwise indemnify, any current or former Employee for Tax-related payments under Section
409A.

     3.13 Restrictions on Business Activities. There is no Contract, plan or arrangement
(non-competition or otherwise), commitment, judgment, injunction, order or decree to which the
Company is a party or otherwise binding upon the Company which has or would reasonably be expected
to have the effect of prohibiting or impairing any material business practice of the Company, any
acquisition of property (tangible or intangible) by the Company, the conduct of business by the
Company in any material respects, or otherwise limiting the freedom of the Company to engage in any
line of business, to conduct any business activities, or to compete with any Person. Without
limiting the generality of the foregoing, the Company is not a party to any Contract under which
the Company is restricted from selling, licensing, manufacturing or otherwise distributing any of
its Technology or products or from providing services to customers or potential customers or any
class of customers, in any geographic area, during any period of time, or in any segment of the
market.

     3.14 Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment.

          (a) The Company does not own any real property, nor has the Company ever owned any
real property. Section 3.14(a) of the Company Disclosure Schedule sets forth a complete and
accurate list of all real property currently leased, subleased or licensed by or from the Company
or otherwise used or occupied by the Company (the “Leased Real Property”), including the name of
the lessor, licensor, sublessor, master

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lessor and/or lessee, the date and term of the lease,
license, sublease or other occupancy right and each amendment thereto.

          (b) The Company has made available to Parent true, correct and complete copies of
all leases, lease guaranties, subleases and agreements for the leasing, use or occupancy of, or
otherwise granting a right in or relating to, the Leased Real Property, including all written
amendments, terminations and modifications thereof and the material terms of any unwritten
amendments, terminations or modifications thereof (“Lease Agreements”). All such Lease Agreements
are in full force and effect, and there is not, under any of such Lease Agreements, any existing
default or event of default (or event which with notice or lapse of time, or both, would constitute
a default), and no rentals are past due. The Company has not received any written, or to the
Company’s Knowledge, any other notice of a default, alleged failure to perform, or any offset or
counterclaim with respect to any such Lease Agreement, which has not been fully remedied and
withdrawn. The execution and delivery by the Company of this Agreement and any Related Agreements
to which the Company is a party, and the consummation of the transactions contemplated hereby and
thereby, will not conflict with or result in any violation of or default under (with or without
notice or lapse of time, or both) or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under any Lease Agreement.
The Company currently occupies all of the Leased Real Property for operation of its business.
There are no other parties occupying, or with a right to occupy, the Leased Real Property. The
Company is not party to any real estate brokerage agreements or owe brokerage commissions or
finders fees with respect to any real property and would not owe any such fees if any existing
Lease Agreement were renewed pursuant to any renewal options contained in such Lease Agreements.
The Company has performed all of its obligations under any termination agreements pursuant to which
it has terminated any leases, subleases, licenses or other occupancy agreements for real property
that are no longer in effect and has no continuing liability with respect to such terminated
agreements.

          (c) The Leased Real Property is in good operating condition and repair, subject to
normal wear and tear, free from any material structural, physical and mechanical defects, is
maintained in a manner consistent with standards generally followed with respect to similar
properties, and is otherwise suitable for the conduct of the business as presently conducted in all
material respects. Neither the operation of the Company on the Leased Real Property nor, to the
Company’s Knowledge, such Leased Real Property, including the improvements thereon, violate in any
material respect any applicable building code, zoning requirement, ordinance, rule, regulation or
statute relating to such property or operations thereon, and any such non-violation is not
dependent on so-called non-conforming use exceptions. The Company has not received any written
notice of any eminent domain, condemnation or similar action. To the Company’s Knowledge, (i)
there are no Laws as of the date hereof in existence or under active consideration as of the date
hereof by any Governmental Entity which could require the tenant of any Leased Real Property to
make any expenditure in excess of $50,000 to modify or improve such Leased Real Property to bring
it into compliance therewith, and (ii) to the Company’s Knowledge, assuming the expiration of the
terms of al Lease Agreements as of the date of this Agreement, the Company is not required to
expend more than $100,000 in the aggregate under all Lease Agreements to restore the Leased Real
Property to the condition required under the Lease Agreement.

          (d) The Company has good and valid title to, or, in the case of leased properties
and assets, valid leasehold interests in, all of its material tangible properties and assets,
personal and mixed, used or held for use in its business, free and clear of any Liens, except as
reflected in the Current Balance Sheet.

          (e) The material equipment owned or leased by the Company in all material respects
(i) is adequate for the conduct of the business of the Company as currently conducted, and (ii) is
in good operating condition, regularly and properly maintained, subject to normal wear and tear.

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     3.15 Intellectual Property.

          (a) Section 3.15(a) of the Company Disclosure Schedule sets forth as of the date
hereof a true and complete list of all Registered Intellectual Property owned by, filed in the name
of, or licensed exclusively to, the Company, indicating for each item the registration or
application number and the applicable filing jurisdiction (the “Company Registered Intellectual
Property”). All Company Registered Intellectual Property has not expired, been cancelled, or
abandoned. All Company Registered Intellectual Property that is not an application is valid,
subsisting and enforceable.

          (b) Section 3.15(b) of the Company Disclosure Schedule sets forth all actions that
must be taken by the Company within one hundred and twenty (120) days of the date hereof, including
the payment of any registration, maintenance or renewal fees, or the filing of any documents,
applications or certificates for the purposes of maintaining, perfecting, preserving or renewing
any Company Registered Intellectual Property. The Company has not claimed “small business status”
on any application for any Company Registered Intellectual Property.

          (c) Neither the Company, nor any of its representatives have misrepresented, or
failed to disclose, and to Company’s Knowledge, there have not been any misrepresentations of or
failures to disclose, any facts or circumstances in any application for any Company Registered
Intellectual Property that would constitute fraud or a misrepresentation with respect to such
application, or that would otherwise affect the validity or enforceability of any Company
Registered Intellectual Property.

          (d) All Company Intellectual Property and Technology is owned exclusively by the
Company free and clear of all Liens. The Company has not transferred ownership of, or granted any
exclusive rights of, any Intellectual Property Rights that are or were Company Intellectual
Property. Following the Closing and the consummation of the Second Step Merger, all Company
Intellectual Property will be fully transferable, alienable or licensable by the Final Surviving
Entity and/or Parent without restriction and without payment of any kind to any Person. No
Intellectual Property Rights or Technology is jointly owned by the Company, on the one hand, with
any Person, on the other hand.

          (e) Neither the Company Products, nor the past or current conduct or operations, or
the conduct of the business by Parent following the Closing to the extent conducted in
substantially the same manner, including new products being released in substantially the same
manner, as such business was conducted by Company prior to the Closing, of the business of the
Company has, is or will, infringe or misappropriate the Intellectual Property Rights of any third
party, or has, is or will, violate any right of any Person (including any right to privacy or
publicity), or has, is or will, constitute unfair competition or trade practices under the Laws of
any jurisdiction. No Litigation Claim has been asserted against the Company by, and the Company
has not received notice from any third party, alleging that any Company Product or the operation or
conduct of the business of the Company infringes or misappropriates the Intellectual Property
Rights of any third party, violates the rights of any Person (including any right to privacy or
publicity) or constitutes unfair competition or trade practices under the Laws of any jurisdiction.
The Company has not and does not falsely mark any unpatented article that is or was a Company
Product and has been and is in compliance with 35 U.S.C. § 292(a).

          (f) To the Knowledge of the Company, no Person is misappropriating, infringing,
diluting or violating any material Company Intellectual Property. The Company has not brought any
Litigation Claims
before any Governmental Entity against any Person with respect to any Company Intellectual
Property. No Trademarks which are Company Intellectual Property have been or are now involved in
any opposition or cancellation proceedings, nor, to the Knowledge of the Company, are any such
proceedings threatened.

          (g) In each case in which Company has engaged or hired a third party to develop or
create any Intellectual Property Rights for the Company, or the Company has acquired or sought to
acquire ownership of any Intellectual Property Rights from any Person, the Company has obtained a
valid and

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enforceable assignment sufficient to irrevocably transfer all such Intellectual Property
Rights, to the fullest extent permitted by applicable law (including the right to seek past and
future damages with respect thereto) to the Company, and where such Intellectual Property Right is
Registered Intellectual Property, the Company has recorded each such assignment with the
appropriate Governmental Entity.

          (h) The Company has taken commercially reasonable measures necessary to protect its
Trade Secrets and the Trade Secrets of any third party provided to the Company. Without limiting
the generality of the foregoing, the Company has, and enforces, a policy requiring each Employee,
consultant and independent contractor involved in the creation of Intellectual Property Rights for
the Company to execute proprietary information, confidentiality and invention assignment agreement
substantially in the form attached hereto as Exhibit F (each a “Proprietary Information
Agreement”), and all current and former Employees, consultants and independent contractors of the
Company involved in the creation of Intellectual Property Rights for the Company have executed such
or a substantially similar agreement. Copies of all such agreements with employees, consultants
and independent contractors have been made available to Parent. Each of the Executive Employees
and Key Employees has executed an agreement, a copy of which has been made available to Parent,
assigning, without reservation, to the Company, all of such Executive Employee’s or Key Employee’s
Intellectual Property Rights related to the business of the Company.

          (i) Section 3.15(i) of the Company Disclosure Schedule lists all Contracts pursuant
to which a third party has licensed or granted any right to the Company with respect to any
Intellectual Property Rights (“In-Licenses”), where such third party Intellectual Property Rights
have been incorporated into the Company’s Products, or is part of tools used in the development of
the Company’s Products, other than (i) Shrink-Wrap Code, (ii) licenses for Open Source Materials,
and (iii) Proprietary Information Agreements described in Section 3.15(h). The Company is not, and
following the Closing and the consummation of the Second Step Merger, neither the Final Surviving
Entity, nor Parent will be, required to make or accrue any royalty or other payment in excess of
$100,000 per year, to any third party in connection with the business of the Company or any Company
Product.

          (j) Section 3.15(j) of the Company Disclosure Schedule lists all Contracts pursuant
to which the Company has granted any Person any rights or licenses, to any Company Intellectual
Property or Company Products (including rights to use, distribute or resell any Company Products)
or has agreed to or is required to, provide or perform any services related to any Company Product
(“Out-Licenses,” and, together with the In-Licenses, the “IP Contracts”), other than (i) agreements
which are no longer in effect except where the licenses granted survived termination of such
agreements and (ii) non-exclusive licenses and related agreements with respect thereto (including
maintenance and support agreements) of Company Products to end-users, in each case, pursuant to a
written Contract that has been entered into in the ordinary course of business that does not
materially differ from the Company’s standard forms which are included in Section 3.15(j) of the
Company Disclosure Schedule.

          (k) All IP Contracts are in full force and effect. The Company is not, nor, to the
Knowledge of the Company, is any other party to any IP Contract, in breach of any IP Contract that
is material to the business of the Company. Neither this Agreement nor the consummation of the
transactions contemplated hereby and the Second Step Merger will (i) violate or result in the
breach, modification, cancellation, termination, or suspension of any IP Contract; (ii) result in
the release of any source code for any Company
Products or in the granting of any right or licenses to any Company Intellectual Property to
any third party; (iii) result in Parent or the Final Surviving Entity being required to grant to
any third party any rights to any Intellectual Property Rights (other than those acquired as a
result hereof) owned by, or licensed to, any of them; or (iv) subject the Company, the Final
Surviving Entity or Parent to any non-compete or other material restriction on the operation or
scope on its business. There are no disputes regarding the scope of any IP Contract, or
performance under such IP Contract, including with respect to any payments to be made or received
by the Company thereunder. Following the Closing and the consummation of the Second Step

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Merger,
Parent will be permitted to exercise all of the Company’s rights under all IP Contracts to the same
extent the Company would have been able to had the transactions contemplated by this Agreement not
occurred and without being required to pay any additional consideration other than fees, royalties
or payments, which the Company would otherwise be required to pay had such transactions
contemplated hereby not occurred.

          (l) Section 3.15(l) of the Company Disclosure Schedule sets forth a complete and
accurate list of all Company Products.

          (m) No Claim has been made by any third party, or is pending, against the Company,
and no notice of any such Claim has been received by, Company, with respect to any Company Products
(including with respect to any delay, defect, deficiency of any product, or quality of any
service), which Claims, when taken in the aggregate, exceed reserves for such Claims set forth in
the Company’s financial statements, and to the Company’s Knowledge, there is no reasonable basis
for any present or future such complaint or Claim. Each Company Product (including any service
provided) has been and is in conformity with all applicable contractual commitments and all express
and implied warranties and specifications.

          (n) No Company Product contains any undisclosed disabling codes or instructions,
“time bombs,” “Trojan horses,” “back doors,” “trap doors,” “worms,” viruses, bugs, faults or other
software routines or hardware components that (i) enable or assist any person to access without
authorization or disable or erase the Company Products, or (ii) otherwise significantly adversely
affect the functionality of the Company Products (“Contaminants”).

          (o) All installation services, programming services, integration services, repair
services, maintenance services, support services, training services, upgrade services and other
services that have been performed by the Company were performed properly and in conformity with the
terms and requirements of all applicable warranties and other IP Contracts and with all applicable
Laws.

          (p) The Company has information technology systems sufficient to operate the
business as it is currently conducted and as contemplated to be conducted. The Company has taken
reasonable steps and implemented reasonable procedures to ensure that information technology
systems used in connection with the operation of the Company are free from Contaminants. The
Company has appropriate disaster recovery plans, procedures and facilities for the business and has
taken all reasonable steps consistent with (or exceeding) industry standards to safeguard the
information technology systems utilized in the operation of the business of the Company as it is
currently conducted or contemplated to be conducted. To the Company’s Knowledge, there have been
no unauthorized intrusions or breaches of the security of its information technology systems.

          (q) Section 3.15(q)(i) of the Company Disclosure Schedule lists all Open Source
Materials used in, distributed or provided with any Company Product, and describes (1) the manner
in which such Open Source Material was used, (2) whether (and, if so, how) the Open Source Material
was modified by or for the Company, (3) whether the Open Source Material was or is distributed by
or for, or otherwise provided by or for, the Company, and (4) how such Open Source Material is
integrated with or interacts with the Company
Products or any portion thereof. Except as set forth in Section 3.15(q)(ii) of the Company
Disclosure Schedule, the Company has not: (i) incorporated Open Source Materials into, or combined
Open Source Materials with, any Company Products; (ii) distributed or provided Open Source
Materials in conjunction with, or for use with, any Company Products; or (iii) used Open Source
Materials, in the case of each of (i), (ii) or (iii) in a manner that (A) requires or purports to
require any Company Products, any portion thereof, or any other Company Intellectual Property to be
subject to Copyleft Licenses (or any of the obligations or attributes thereof as specified in (i)
through (iv) of the definition thereof); or (B) causes, or purports to cause, any Trade Secret of
the Company to become publicly disclosed. The Company is in full compliance with all

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licenses for
Open Source Materials applicable thereto, including without limitation any and all copyright notice
and attribution requirements.

          (r) Except as Section 3.15(r) of the Company Disclosure Schedule, The Company has
not licensed or granted a third party the right to obtain any source code for software that is or
that is in any Company Product, including in any such case, any conditional right to access, or
under which the Company has established any escrow arrangement for the storage and conditional
release of any source code.

          (s) No government funding, facilities or resources of a university, college, other
educational institution or research center was used in the development of the Company Intellectual
Property, and no Governmental Entity, university, college, other educational institution or
research center has any Claim or right in or to the Company Intellectual Property. To the
Company’s knowledge, no current or former Employee, consultant or independent contractor of the
Company who was involved in, or who contributed to, the creation or development of any material
Company Intellectual Property, has performed services for the government, a university, college or
other educational institution, or a research center, during a period of time during which such
Employee, consultant or independent contractor was also performing services for the Company.

          (t) The Company is in compliance with all applicable Laws and its internal privacy
policies relating to the privacy of users of its products and services and all Internet websites
owned, maintained, or operated by the Company, and the collection, storage and transfer of personal
information of any Person. The execution and/or delivery of this Agreement, any other agreement or
document contemplated by this Agreement, the consummation of the Second Step Merger or the
performance of the Company’s obligations hereunder or thereunder, will not violate the Company’s
privacy policies (or applicable customer agreements).

     3.16 Material Contracts.

          (a) Section 3.16(a) of the Company Disclosure Schedule sets forth a complete and
accurate list of each of the following Contracts in effect as of the date hereof to which the
Company is a party or otherwise bound and which has not expired by its terms (any such Contract of
a nature described below (whether or not set forth on the Company Disclosure Schedule) to which the
Company is a party or otherwise bound, being referred to herein as a “Material Contract” and,
collectively, as the “Material Contracts”):

               (i) any (A) Employee Agreement granting (x) any bonus to any current or former Employee with
respect to which the Company or any ERISA Affiliate has or may have any current or future liability
or obligation in excess of $75,000, or (y) any severance benefits, change of control benefits, or
termination pay (in cash or equity or otherwise) to any current or former Employee with respect to
which the Company or any ERISA Affiliate has or may have any current or future liability or
obligation, and (B) contractor or consulting Contract, in each case with a firm or other
organization or with an individual if the amounts payable for 2009 and annually thereafter are in
excess of $100,000;

               (ii) any Contract or plan, including any stock option plan, stock appreciation rights plan or
stock purchase plan, or any plan providing similar equity awards, for which any benefits will be
increased or for which vesting of benefits will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement (or any events following this Agreement) or the value
of any of the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement (other than notices of grant, stock option agreements or restricted
stock unit agreement agreements, each on the Company’s standard form, which do not provide for any
acceleration);

               (iii) any lease of personal property involving future payments in excess of $100,000
individually or $250,000 in the aggregate;

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               (iv) any outstanding fidelity or surety bond or completion bond;

               (v) any Contract that restricts or prohibits the Company from hiring or soliciting any
individual to perform employment or consulting services for the Company;

               (vi) any Contract of indemnification or guaranty, other than those which relate to Company
Products or services, including the sale and development therefor;

               (vii) any Contract relating to capital expenditures and involving future payments in excess of
$100,000 individually or $250,000 in the aggregate;

               (viii) any Contract relating to the disposition or acquisition of assets (other than customer
and reseller Contracts) or any interest in any business enterprise outside the ordinary course of
the business of the Company;

               (ix) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or
other written agreements or instruments relating to the borrowing of money or extension of credit;

               (x) any purchase order or Contract for the purchase of materials by the Company involving
future payments in excess of (A) $100,000 individually to any third party other than Plexus Corp.
(“Plexus”), or (B) $500,000 individually to Plexus;

               (xi) any Contracts that contain “most favored nation” or preferred pricing provisions;

               (xii) any material written joint marketing, strategic alliance or affiliate agreement;

               (xiii) any Contract to alter the Company’s interest in any Subsidiary, corporation,
association, joint venture, partnership or business entity in which the Company directly or
indirectly holds any interest;

               (xiv) any written sales representative, original equipment manufacturer, manufacturing, value
added, remarketer, reseller, or other similar agreement for distribution of the products,
Technology or services of the Company pursuant to which the Company received any individual sales
order in 2009 or 2010 in the amount of at least $200,000, other than reseller agreements entered
into in the ordinary course of business granting the non-exclusive right to sell Company Products
that do not materially differ from the Company’s standard form of reseller agreement, which
standard form of reseller agreements set forth on Section 3.16(a)(xiv)(A) of the Company Disclosure
Schedules;

               (xv) any nondisclosure, confidentiality or similar Contract, other than those entered into
with any actual or prospective customer or vendor in the ordinary course of business consistent
with past practices or those entered into with Employees consistent with the Company’s
representation and warranty in Section 3.15(h) hereof;

               (xvi) any other Contract that involves future payments by the Company in excess of $100,000
individually or $250,000 in the aggregate, or, in the case of Plexus, $500,000 individually, and,
in each case, is not cancelable without material penalty within thirty (30) days;

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               (xvii) any Contract limiting the freedom of the Company to engage in any line of business or
to compete or to develop, distribute, sell, manufacture, have manufactured, assemble, license, or
sublicense any products or services;

               (xviii) any IP Contract;

               (xix) any Contract that contains indemnities relating to products or Technology sold or
services rendered by the Company since January 1, 2007 pursuant to which the Company received any
individual sales order in 2009 and 2010 in the amount of at least $200,000, other than
non-exclusive licenses and related agreements with respect thereto (including maintenance and
support agreements) of the Company Products to end users pursuant to a written Contract that has
been entered into in the ordinary course of business that does not materially differ from the
Company’s standard forms which are included in Section 3.15(j) of the Company Disclosure Schedule;

               (xx) any Contract not fully performed for the purchase by customers of (A)products that
involves $400,000 individually or more or (B) services that involves $100,000 individually or more;

               (xxi) any Lease Agreement;

               (xxii) any Contract not fully performed pursuant to which any third party has agreed to
design, manufacture, test or package any Company Product or component therefor and for which the
Company has or is required to pay consideration in excess of (A) $100,000 individually to any third
party other than Plexus or (B) $500,000 individually to Plexus, other than, in each case, Contracts
set forth under Section 3.16(a)(x);

               (xxiii) any Contract between the Company, on the one hand, and any of the Company
Securityholders, on the other hand, other than Contracts related to equity awards to Employees of
the Company and Employee Agreements; or

               (xxiv) any other Contract the termination or breach of which would reasonably be expected to
be material to the Company taken as a whole.

          (b) Each Material Contract is a valid and binding agreement, enforceable against the
Company and, to the Company’s Knowledge, each of the other parties thereto, in accordance with its
terms, and, to the Company’s Knowledge is in full force and effect. The Company is in material
compliance with and has not breached, violated or defaulted under, or received notice that they
have breached, violated or defaulted under, any of the terms or conditions of any such Material
Contract which would reasonably be expected to result in a material liability, nor to the Knowledge
of the Company is any party obligated to the Company pursuant to any such Material Contract subject
to any breach, violation or default thereunder, nor does the Company have Knowledge of any event
that with the lapse of time, giving of notice or both would constitute such a breach, violation or
default by the Company or any such other party, which breach, violation
or default would result in the termination of such Material Contract or result in material
liability to, or Loss by, the Company. True and complete copies of each Material Contract (whether
or not set forth on the Company Disclosure Schedule) have been made available to Parent.

          (c) The Material Contracts which constitute licenses of goods, services or rights
from third parties that are incorporated in any products, services or rights which the Company
sublicense to its customers are sublicenseable without any further payment to any Person, except as
identified in Section 3.16(c) of the Company Disclosure Schedule.

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          (d) There are no Litigation Claims outstanding, nor, to the Company’s Knowledge are
there any other Claims or material disagreements or disputes, with respect to any Material
Contract.

          (e) All Indebtedness of the Company outstanding on the date of this Agreement is set
forth in Section 3.16(d) of the Company Disclosure Schedule.

     3.17 Interested Party Transactions. No officer or director (nor any ancestor, sibling, descendant
or spouse of any of such Persons, or any trust, partnership or corporation in which any of such
Persons has an interest), has or has had, directly or indirectly, (a) any equity interest in any
entity which furnished or sold, or furnishes or sells, services, products, Technology or
intellectual property that the Company furnishes or sells, or proposes to furnish or sell, or (b)
any equity interest in any entity that purchases from or sells or furnishes to the Company any
goods or services, or (c) any interest in, or is a party to, any Contract to which the Company is a
party; provided, however, that ownership of no more than one percent (1%) of the outstanding voting
stock of a publicly traded corporation or five percent (5%) of the outstanding voting stock of any
private corporation or entity shall not be deemed to be an “interest in any entity” for purposes of
this Section 3.17; provided, further, that the Company makes no representation or warranty
regarding portfolio companies of the investment funds of which a director is a partner or by which
a director is employed. To the Company’s Knowledge, there are no Contracts with regard to
contribution or indemnification between or among any of the Company Securityholders.

     3.18 Governmental Authorization. Each consent, license, permit, grant or other authorization (a)
pursuant to which the Company currently operates or holds any interest in any of its material
properties or (b) which is required for the operation of the business of the Company as currently
conducted as of the date hereof (collectively, “Company Authorizations”) has been issued or granted
to the Company. The Company is, and has at all times been, in material compliance with all Company
Authorizations. The Company has made available to Parent true, correct and complete copies of each
Company Authorization in effect as of the date hereof. The Company has not received any written
notice from any Person regarding (A) any actual or possible violation of any Company Authorization
or any failure to comply with any term or requirement of any Company Authorization, or (B) any
actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of
any Company Authorization. None of the Company Authorizations will be terminated or materially
impaired, or will become terminable, in whole or in part, as a result of the entering into by the
Company of this Agreement or the consummation of the transactions contemplated hereby. The Company
Authorizations are in full force and effect and constitute all Company Authorizations required to
permit the Company to operate or conduct its business in all material respects or hold any interest
in its properties or assets.

3.19 Litigation. There is no suit, action, arbitration or proceeding (each a “Litigation Claim”) of any
nature pending, nor to the Knowledge of the Company, are there any Claims pending or threatened in
writing, against the Company or any of its properties or assets (tangible or intangible) or any of
its officers or directors, nor to the Knowledge of the Company, is there any reasonable basis
therefor. To the Knowledge of the Company, there is no investigation, audit or other proceeding
pending or threatened, against the Company, any of its properties or assets (tangible or
intangible) or any of its officers or directors by or before any Governmental Entity. No
Governmental Entity has at any time challenged or questioned the legal right of the Company to
conduct its operations as presently or previously conducted. There is no Litigation Claim of any
nature pending nor, to the Knowledge of the Company, are the any Claims pending or threatened in
writing, against any Person who has a contractual right or a right pursuant to applicable Law to
indemnification from the Company related to facts and circumstances existing prior to the Effective
Time. There is no Litigation Claim of any nature pending nor, to the Knowledge of the Company, are
there any Claims pending or threatened in writing, against the Company which challenges or seeks to
enjoin any of the transactions contemplated by this Agreement.

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     3.20 Minute Books. The minutes of the Company and each of its Subsidiaries made available to
Parent contain complete and accurate records in all material respects of the actions taken, and
summaries of the meetings held, by the stockholders and the boards of directors of the Company and
each of its Subsidiaries (and any committees thereof) through the date hereof. At the Closing, the
minute books of the Company and each of its Subsidiaries will be in the possession of the Company.

     3.21 Environmental Matters.

          (a) Condition of Property. As of the Closing, except in compliance with
Environmental Laws and in a manner that could not reasonably be expected to subject the Company to
liability, no Hazardous Materials are present on any Leased Real Property or were present on any
other real property at the time it ceased to be owned, operated, occupied, controlled or leased by
the Company. There are no underground storage tanks, asbestos which is friable or likely to become
friable or polychlorinated biphenyls present on any Leased Real Property or on any other real
property as a consequence of the acts of the Company or its agents.

          (b) Hazardous Materials Activities. The Company has conducted all Hazardous
Material Activities in compliance in all material respects with all applicable Environmental Laws.
The Hazardous Material Activities of the Company prior to the Closing have not resulted in the
exposure of any person to a Hazardous Material in a manner which has caused or could reasonably be
expected to cause an adverse health effect to any such person which would reasonably be expected to
result in liability to the Company.

          (c) Environmental Liabilities. The Company has no Knowledge of any fact or
circumstance, which could reasonably be expected to result in any environmental liability which
could reasonably be expected to result in any material liability on the Company. The Company has
not entered into any agreement that may require it to guarantee, reimburse, pledge, defend, hold
harmless or indemnify any other party with respect to liabilities arising out of Environmental Laws
or Hazardous Materials Activities of the Company.

          (d) Environmental Permits. Section 3.21(d) of the Company Disclosure Schedule
accurately lists all of the Environmental Permits currently held by the Company and the listed
Environmental Permits are all of the Environmental Permits necessary for the continued conduct of
any Hazardous Material
Activity of the Company as such activities are currently being conducted. All such
Environmental Permits are valid and in full force and effect. The Company has complied in all
material respects with all covenants and conditions of any Environmental Permit which is or has
been in force with respect to Hazardous Materials Activities. To the Company’s Knowledge, no
circumstances exist which could cause any Environmental Permit to be revoked, modified, or rendered
non-renewable upon payment of the permit fee. All Environmental Permits and all other consents and
clearances required by any Environmental Law or any agreement to which the Company is bound as a
condition to the performance of this Agreement, have been obtained or will be obtained prior to
Closing at no cost to Parent.

          (e) Environmental Litigation. Except as set forth in Section 3.21(e) of the Company
Disclosure Schedule, no action, proceeding, revocation proceeding, amendment procedure, writ,
injunction or Litigation Claim is pending, or threatened, nor to the Knowledge of the Company are
there any other Claims pending or threatened in writing, concerning or relating to any
Environmental Permit or any Hazardous Materials Activity of the Company.

          (f) Reports and Records. The Company has made available to Parent all records in
the Company’s possession or control concerning the activities of the Company related to Hazardous
Materials, and all environmental audits and environmental assessments.

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     3.22 Brokers’ and Finders’ Fees; Third Party Expenses. The Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions,
fees related to investment banking or similar advisory services or any similar charges in
connection with the Agreement or any transaction contemplated hereby, nor will Parent or the Final
Surviving Entity incur, directly or indirectly, any such liability based on arrangements made by or
on behalf of the Company, or any of the Company Securityholders. Section 3.22 of the Company
Disclosure Schedule sets forth the principal terms and conditions of any Contract with respect to
such fees or charges.

     3.23 Employee Benefit Plans and Compensation.

          (a) Schedule. Section 3.23(a)(i) of the Company Disclosure Schedule contains an
accurate and complete list as of the date hereof, of each Company Employee Plan (other than
standard equity award agreements that do not provide for acceleration) and each Employee Agreement
(other than “at-will” offer letters pursuant to which the Company does not and will not have any
liability upon termination of an Employee), in each case other than International Employee Plans.
The Company has provided to Parent a table which provides next to each current Employee’s name as
of March 31, 2010: (A) job title or position; (B) the location where such Employee performs
services; (C) the full-time or part-time or consultant or temporary status of such Employee; (D)
the salary, wage, actual bonus and/or target bonus opportunity, commission rate and/or commission
opportunity, and/or consulting fee structure (including a description of the services provided), as
applicable, for such Employee; (E) accrued vacation/paid-time off, and (F) the date of hire for
such Employee. Section 3.23(a)(ii) of the Company Disclosure Schedule contains an accurate and
complete list as of the date hereof, of all Persons that have a non-vendor independent contractor,
consulting or advisory relationship with the Company that is subject to ongoing obligations in
excess of $100,000 per year. Section 3.23(a)(iii) of the Company Disclosure Schedule contains an
accurate and complete list as of the date hereof, of all International Employee Plans (other than
on the Company’s standard forms which do not require notice greater than the applicable statutory
requirements). If required by applicable law, each of the Company and its ERISA Affiliates has
classified all individuals who perform services for it correctly under
the Company Employee Plans, ERISA and the Code as common law employees, independent
contractors or leased employees.

          (b) Documents. With respect to each Company Employee Plan and Employee Agreement in
effect (or pursuant to which there is any current or future liability) as of the date hereof, the
Company and each ERISA Affiliate has made available to Parent a current, accurate and complete copy
(or, to the extent no such copy exists, or, even if such copy does exist, but it does not reflect
the current terms, an accurate description) thereof and any amendments thereto and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii) for the three most
recent years (A) Forms 5500 and attached schedules and audit reports, (B) audited financial
statements, if any, (C) nondiscrimination testing results, and (D) actuarial valuation reports (or
other annual and periodic accounting of assets), if any; (iii) the most recent summary plan
description together with any summary of material modifications thereto, if any, and other written
communications (or a description of any oral communications) by the Company or its ERISA Affiliates
to the Employees concerning the extent of the benefits provided under a Company Employee Plan or
Employee Agreement, including any and all documents related to compliance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended and the Health Insurance Portability and
Accountability Act of 1996, as amended, and any official guidance promulgated thereunder or other
applicable laws; (iv) all Contracts relating to each Company Employee Plan; (v) all correspondence
to or from any Governmental Entity relating to any Company Employee Plan; (vi) all IRS
determination, opinion, notification and advisor letters issued with respect to each Company
Employee Plan, if applicable; and (vii) any other material documentation related to the Company
Employee Plans or Employee Agreements.

          (c) Employee Plan Compliance. (i) The Company and each ERISA Affiliate have in all
material respects (A) performed all obligations required to be performed by them under, (B) is not
in default

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or violation of, and (C) the Company has no Knowledge of any default or violation by any
other party to, any Company Employee Plan; (ii) each Company Employee Plan has been established,
registered, qualified, amended, funded, invested and administered in material compliance with the
terms of any document that affects such activity in respect of such Company Employee Plan, and in
material compliance with the applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations, to the extent applicable to a Company Employee Plan; (iii) each Company
Employee Plan which is intended to be qualified within the meaning of Section 401(a) of the Code
and each trust intended to qualify under Section 501(a) of the Code is so qualified in all material
respects and has received a favorable determination, notification, advisory and/or opinion letter,
as applicable, as to its qualification, and nothing has occurred, whether by action or failure to
act, that could reasonably be expected to cause the loss of such qualification; (iv) no event has
occurred and no condition exists that would subject the Company, either directly or by reason of
its affiliation with an ERISA Affiliate, to any Tax, fine, lien, penalty or other liability imposed
by ERISA, the Code or other applicable Laws; (v) neither the Company nor any of its ERISA
Affiliates has incurred any current or projected liability in respect of post-employment or
post-retirement health, medical or life insurance benefits for the Employees, except as required to
avoid an excise Tax under Section 4980B of the Code or otherwise except as may be required pursuant
to any other applicable Law; (vi) each Company Employee Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms, without liability to
Parent, the Company, the Final Surviving Entity or any ERISA Affiliate (other than ordinary
administration expenses pursuant to the terms of any existing Contract that has been disclosed to
Parent); (vii) there are no audits, inquiries or proceedings pending or, to the Knowledge of the
Company or any ERISA Affiliates, threatened by the IRS, DOL, or any other Governmental Entity with
respect to any Company Employee Plan; (viii) no “prohibited transaction,” within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section
408 of ERISA, has occurred with respect to any Company Employee Plan; and (ix) the Company has
timely made all contributions and other payments required by and due under the terms of each
Company Employee Plan, in all material respects.

          (d) Plans Not Maintained. Neither the Company nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in, or contributed to, any (i) Pension Plan,
including but not limited to, a plan which is subject to Part 3 of Subtitle B of Title I of ERISA,
Title IV of ERISA or Section 412 of the Code; (ii) “funded welfare plan” within the meaning of
Section 419 of the Code; (iii) a multiple employer welfare arrangement, as defined under Section
3(40)(A) of ERISA (without regard to Section 514(b)(6)(B) of ERISA), established or maintained for
the purpose of offering or providing welfare plan benefits to the employees of two or more employer
(including one or more self-employed individuals) or to their beneficiaries (iv) multiemployer plan
(as defined in Sections 3(37) and 4001(a)(3) of ERISA); (v) multiple employer plan or to any plan
described in Section 413 of the Code; or (vi) self-insured plan that provides benefits to employees
(including any such plan pursuant to which a stop-loss policy or Contract applies).

          (e) Effect of Transaction. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby (either alone or in connection with any
other event, including any termination of employment or service) will (i) result in any payment
(including severance, golden parachute, bonus or otherwise), becoming due to any current or former
Employee, (ii) result in any forgiveness of indebtedness, (iii) materially increase any benefits
otherwise payable by the Company or (iv) result in the acceleration of the time of payment or
vesting of any such benefits except as required under Section 411(d)(3) of the Code.

          (f) Employment Matters. The Company is in material compliance with applicable Laws
respecting employment, employment practices, terms and conditions of employment, worker
classification, Tax withholding, prohibited discrimination, equal employment, fair employment
practices, meal and rest periods, immigration status, employee safety and health, wages (including
overtime wages), compensation,

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and hours of work, and in each case, with respect to Employees: (i)
has withheld and reported all amounts required by Law or by Contract to be withheld and reported
with respect to wages, salaries and other payments to current or former Employees, (ii) is not
liable for any arrears of wages, severance pay or any Taxes or any penalty for failure to comply
with any of the foregoing, and (iii) is not liable for any payment to any trust or other fund
governed by or maintained by or on behalf of any Governmental Entity, with respect to unemployment
compensation benefits, social security or other benefits or obligations for Employees in each case
in all material respects (other than routine payments to be made in the normal course of business
and consistent with past practice). There are no Litigation Claims or administrative matters
pending, nor to the Knowledge of the Company, are there any Claims pending or threatened in writing
or reasonably anticipated against the Company or any of its current or former Employees relating to
any current or former Employee, Employee Agreement or Company Employee Plan. There are no pending
or to the Knowledge of the Company threatened or reasonably anticipated Claims against the Company,
any Company trustee under any worker’s compensation policy or long-term disability policy. The
Company is not a party to a conciliation agreement, consent decree or other agreement or order with
any Governmental Entity with respect to employment practices. The services provided by each of the
Company’s and its ERISA Affiliates’ Employees located in the United States are terminable at the
will of the Company and its ERISA Affiliates and any such termination would result in no liability
to the Company or any ERISA Affiliate. Section 3.23(f) of the Company Disclosure Schedule lists
all Contracts that would give rise to any liability of the Company to any Employee that would
result from the termination by the Company or Parent of such Employee’s employment or provision of
services, a change of control of the Company, or a combination thereof. Neither the Company nor
any ERISA Affiliate has any liability with respect to any misclassification of: (a) any Person as
an independent contractor rather than as an employee, (b) any employee leased from another
employer, or (c) any employee currently or formerly classified as exempt from overtime wages. The
employment of all employees in the United States is at will and can be terminated with or without
notice or cause. As of the date of this Agreement, to the Knowledge of the Company, Executive
Employee, Key Employee or group of employees has any plans to terminate employment with the
Company.

          (g) Labor. No strike, labor dispute, slowdown, concerted refusal to work overtime,
or work stoppage against the Company is pending, or to the Knowledge of the Company, threatened, or
reasonably anticipated. There are no Litigation Claims, labor disputes or grievances pending,
threatened in writing or reasonably anticipated relating to any labor matters involving any current
or former Employee, including charges of unfair labor practices that would give rise to any
material liability. Neither the Company nor any ERISA Affiliate has engaged in any unfair labor
practices within the meaning of the U.S. National Labor Relations Act. The Company is not a party
to or bound by any collective bargaining or union Contract with respect to Employees and no
collective bargaining agreement is being negotiated by the Company. The Company has no Knowledge of
any organizational effort currently being made or threatened by or on behalf of any labor union
with respect to the Employees of the Company. The Company has complied with any and all
obligations under the Workers Adjustment and Retraining Notification Act of 1988, as amended
(“WARN”) and all similar Laws. All liabilities and obligations relating to the termination of any
former employees, including all notice pay, termination pay, severance pay, benefits, or other
amounts in connection with the WARN and similar Laws, have been satisfied, and no terminations
prior to the Closing Date would trigger any notice or other obligations under WARN or any similar
Law.

          (h) International Employee Plan. Each International Employee Plan has been
established, maintained and administered in material compliance with its terms and conditions and
with the requirements prescribed by any and all Laws that are applicable to such International
Employee Plan. Furthermore, no International Employee Plan has material liabilities, which as of
the Closing Date, will not be offset in full by insurance. Except as required by Law, no condition
exists that would prevent the Parent, the Company or the Final Surviving Entity from terminating or
amending any International Employee Plan at any time for any reason without material liability to
the Company or its ERISA Affiliates (other than ordinary administration expenses or routine claims
for benefits). To the extent applicable, each International Employee Plan has been

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approved by the
relevant taxation and other Governmental Entity so as to enable: (i) the Company and the
participants and beneficiaries under the relevant International Employee Plan and (ii) in the case
of any International Employee Plan under which resources are set aside in advance of the benefits
being paid (a “Funded International Employee Plan”), the assets held for the purposes of the Funded
International Employee Plans, to enjoy the most favorable taxation status possible and the Company
is not aware of any ground on which such approval may cease to apply.

               (i) Foreign Employees. All Contracts of employment or for services with any
employee of the Company who provides services outside the United States (“Foreign Employees”), or
with any director or consultant of or to the Company can be terminated by three (3) months’ notice
or less given at any time without giving rise to any Claim for damages, severance pay, or
compensation (other than as mandated by local Law).

     3.24 Insurance. Section 3.24 of the Company Disclosure Schedule lists all insurance policies and
fidelity bonds as of the date hereof covering the assets, business, equipment, properties,
operations, employees, officers and directors of the Company or any ERISA Affiliate, including the
type of coverage, the carrier, the amount of coverage, the term and the annual premiums of such
policies. There is no Claim by the Company or any ERISA Affiliate pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed or that the Company,
that, to the Company’s Knowledge, is reasonably expected to be denied or disputed by the
underwriters of such policies or bonds. In addition, there is no pending Claim of which its total
value (inclusive of defense expenses) will exceed the policy limits. All premiums due and payable
under all such policies and bonds have been paid (or if installment payments are due, will be paid
if incurred prior to the Closing Date), and the Company and each ERISA Affiliate is otherwise in
material compliance with the terms of such policies and bonds (or other policies and bonds
providing substantially similar insurance coverage). Such policies and bonds (or other policies
and bonds
providing substantially similar coverage) remain in full force and effect. The Company has no
Knowledge of threatened termination of, or premium increase with respect to, any of such policies.
Neither the Company nor any Affiliate has ever maintained, established, sponsored, participated in
or contributed to any self-insurance plan.

     3.25 Compliance with Laws.

          (a) The Company has complied with, in all material respects, and is not in violation
of, and has not received any written notices of material violation with respect to, any foreign,
federal, state or local Law.

          (b) The Company has sought and received:

                    (i) for all Company Products sold or distributed in the United
States that are eligible to
receive approval and certification with respect to safety or electromagnetic compatibility
compliance, or both, the approval and certification (A) as to safety by Underwriters Laboratories
(or equivalent certifying organization), and/or (B) as to electromagnetic compatibility compliance
by the United States Federal Communications Commission; and

                    (ii) for all Company Products sold or distributed outside the
United States that are eligible
to receive approval and certification with respect to safety or electromagnetic compatibility
compliance, or both, the approval and certification (A) as to safety and electromagnetic
compatibility compliance by (1) the appropriate Governmental Entity of the European Union (or any
of its member States), and/or (2) an internationally recognized certifying organization.

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     3.26 Anti-Corruption and Anti-Bribery.

          (a) The Company (including any of its officers, directors, agents, employees or any
other Person associated with or acting on its behalf) has not, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, made any unlawful payment to foreign or domestic government
officials or employees or made any bribe, rebate, payoff, influence payment, kickback or other
similar unlawful payment, or taken any action which would cause it to be in violation of any
Anti-Corruption or Anti-Bribery Laws.

          (b) To the Knowledge of the Company, there are no past, pending, or threatened
investigations against the Company (including any of its officers, directors, agents, employees or
any other Person associated with or acting on its behalf) with respect to any alleged violation of
any Anti-Corruption or Anti-Bribery Laws.

          (c) There are no past, pending, or threatened in writing charges, settlements, civil
or criminal enforcement actions, lawsuits, or other court actions against the Company (including
any of its officers, directors, agents, employees or any other Person associated with or acting on
its behalf) with respect to any Anti-Corruption and Anti-Bribery Laws.

          (d) There are no actions, conditions, or circumstances pertaining to the activities
of the Company (including any of its officers, directors, agents, employees or any other Person
associated with or acting on its behalf) that would reasonably be expected to give rise to any
future valid claims, charges,
investigations, violations, settlements, civil or criminal actions, lawsuits, or other court
actions under any Anti-Corruption and Anti-Bribery Laws.

          (e) The Company has established and maintains internal controls and procedures with
respect to Anti-Corruption and Anti-Bribery Laws.

     3.27 Substantial Customers and Suppliers.

          (a) Section 3.27(a) of the Company Disclosure Schedule lists the twenty (20) largest
customers of the Company on the basis of revenues generated from each such customer for the fifteen
(15) month period ending on the date of the Current Balance Sheet. The Company has no material
disputes with such customers.

          (b) Section 3.27(b) of the Company Disclosure Schedule lists the twenty (20) largest
suppliers of the Company on the basis of cost of goods or services purchased for the fifteen (15)
month period ending on the date of the Current Balance Sheet.

          (c) No such supplier has (i) ceased or materially reduced its sales or provision of
services to the Company since the beginning of such fifteen (15) month period or (ii) to the
Knowledge of the Company, threatened in writing to cease or materially reduce such sales or
provision of services.

     3.28 Export and Import Control Laws.

          (a) The Company has conducted and continues to conduct its export and import
transactions in accordance in all material respects with all applicable Export and Import Control
Laws. Without limiting the foregoing: (i) the Company is in compliance with the terms of all
applicable Export and Import Approvals; (ii) to the Knowledge of the Company, there are no past,
pending, or threatened investigations with respect to the Export and Import Control Laws; (iii)
there are no past, pending, or threatened claims, charges, violations, settlements, civil or
criminal enforcement actions, lawsuits, voluntary disclosures, or other court actions against the
Company with respect to the Export and Import Control Laws; (iv) there are no actions, conditions
or circumstances pertaining to the Company’s export or import transactions that would

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reasonably be
expected to give rise to any future Claims, charges, investigations, violations, settlements, civil
or criminal actions, lawsuits, or other court actions under the Export and Import Control Laws; and
(v) no approval from a Governmental Entity is required for the transfer of Export and Import
Approvals to Parent, or such approvals can be obtained without material cost.

          (b) The Company has established and maintains internal controls and procedures with
respect to Export and Import Control Laws.

          (c) Section 3.28(c) of the Company Disclosure Schedule sets forth, as of the date
hereof, the true, complete, and accurate export control classifications, Harmonized Tariff Schedule
Codes, and Schedule B Codes applicable to the Company’s products, services, software and
technologies.

     3.29 Contracts with Governmental Entities. Except as set forth in Section 3.29 of the Company
Disclosure Schedule, (i) to the Company’s Knowledge, no current or former Employee is or during the
last three (3) years has been (except
as to routine security investigations) under administrative, civil or criminal investigation,
indictment or information by a Governmental Entity; (ii) to the Company’s Knowledge, there is no
pending audit or investigation by any Governmental Entity of the Company or any current or former
Employee; (iii) no voluntary disclosure has been made by the Company with respect to any Contract
between the Company and a Governmental Entity; (iv) neither the Company nor, to the Company’s
Knowledge, any current or former Employees, has made any intentional misstatement or omission in
connection with any Contract between the Company and a Governmental Entity; (v) there are no
disputes between the Company and a Governmental Entity under the Contract Disputes Act or any other
federal statute or between the Company and any third party, arising under or relating to any such
Contract; (vi) neither the Company nor, to the Company’s Knowledge, any current or former Employee
is, or during the last five years has been, suspended or debarred from doing business with a
Governmental Entity or is, or during such period was, the subject of a finding of
non-responsibility or ineligibility for contracting with a Governmental Entity; (vii) neither the
Company nor, to the Company’s Knowledge, any current or former Employee, has received written
notice of a termination for default or convenience, cure notice, or show cause notice from any
Governmental Entity; (viii) all representations, certifications, and warranties made by the Company
or any current or former Employee, in connection with any Contract between the Company and a
Governmental Entity, were accurate in all material respects as of their effective date, and the
Company and its current and former Employees, have complied in all material respects with all such
representations, certifications and warranties; (ix) the Company and its current and former
Employees, have complied in all material respects with all terms and conditions of any Contract
between the Company and a Governmental Entity; and (x) the Company has not ever been granted, by
any Governmental Entity, a Facility Security Clearance or other permission to engage in classified
work.

     3.30 Complete Copies of Materials; Information Supplied.

          (a) The Company has made available true and complete copies in all material respects of each
document (or summaries of the same) that is listed on the Company Disclosure Schedule.

          (b) The information furnished on or in any document mailed, delivered or otherwise furnished
to the securityholders of the Company by the Company in connection with the solicitation of their
approval and adoption of this Agreement, and the approval of the transactions contemplated hereby,
will not contain, at or prior to the time such document is mailed, delivered or otherwise furnished
to securityholders of the Company by the Company, any untrue statement of a material fact and will
not omit to state any material fact necessary in order to make the statements made therein, in
light of the circumstances under which made not misleading. Notwithstanding the foregoing, the
Company makes no representation, warranty or covenant with respect to any information provided by
Parent which is contained in any of the foregoing documents.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS

     Except as set forth in the disclosure schedule of the Parent and Merger Subs addressed to the
Company, dated as of the date hereof and delivered to the Company concurrently with the parties’
execution of this Agreement (the “Parent Disclosure Schedule”), referencing a representation or
warranty herein (it being understood that (i) the Parent Disclosure Schedule shall be arranged in
sections and subsections corresponding to the sections and subsections contained in this Article
IV, (ii) the disclosures in any section or subsection of the Parent Disclosure Schedule shall
qualify the applicable representations and warranties in the corresponding section or subsection of
this Article IV and, in addition, the representations and warranties in other sections or
subsections in this Article IV to the extent it is reasonably apparent on the face of such
disclosures that such disclosures are applicable to such other sections or subsections, and (iii)
such disclosures in the Parent Disclosure Schedule relating to the representations and warranties
in this Article IV shall also be deemed to be representations and warranties made by the Parent and
the Merger Subs under this Article IV), the Parent and Merger Subs represent and warrant to the
Company as follows:

     4.1 Organization. Parent is a company duly incorporated, validly existing and in good standing
under the laws of Delaware, Merger Sub One is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and Merger Sub Two is a limited liability
company duly organized, validly existing and in good standing under the laws of the State of
Delaware. Parent has the corporate power and authority to own its properties and to carry on its
business as currently conducted. Parent has made available a true and correct copy of its
certificate of incorporation, as amended to date (the “Parent Certificate of Incorporation”) and
bylaws, as amended to date, each in full force and effect on the date hereof (collectively, the
“Parent Charter Documents”), to the Company. The board of directors of Parent has not approved or
proposed any amendment to any of the Parent Charter Documents.

     4.2 Authority. Each of Parent and each of the Merger Subs has all requisite corporate or limited
liability company power and authority to enter into this Agreement and any Related Agreements to
which it is a party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Parent and each of the Merger Subs of this Agreement and any Related
Agreements to which it is a party and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or limited liability company action on
the part of Parent and each of the Merger Subs. No vote of Parent’s stockholders is required to
consummate the transactions contemplated by this Agreement and the Related Agreements pursuant to
the rules of the NASDAQ Stock Market, applicable Law or otherwise. This Agreement and each of the
Related Agreements to which Parent and the Merger Subs, as applicable, is a party have been duly
executed and delivered by Parent and the Merger Subs, as applicable, and assuming the due
authorization, execution and delivery by the other parties hereto and thereto, constitute the valid
and binding obligations of Parent and the Merger Subs, as applicable, enforceable against it in
accordance with their respective terms, except that such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights
generally, and is subject to general principles of equity.

     4.3 No Conflict. The execution and delivery by Parent and the Merger Subs of this Agreement and
the Related Agreements to which Parent and the Merger Subs, as applicable, is a party, and the
consummation of the transactions contemplated hereby and thereby, will not Conflict with: (a) any
provision of the certificate of incorporation, bylaws or other equivalent constituent documents (as
applicable) of Parent or the Merger Subs, (b) any “material contract” (as such term is defined in
Item 601(b)(10) of Regulation S-K promulgated by the SEC) of Parent that has been listed as an
exhibit to Parent’s annual report on Form 10-K for the fiscal year ended December 31, 2009 or to
any periodic report on Form 10-Q or current report on Form 8-K filed by Parent thereafter until the
date of this Agreement, or (c) any Law applicable to Parent or the Merger Subs or

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any of their
respective properties or assets (whether tangible or intangible), except in the case of clause (b)
or (c) for any such Conflicts that are not material in any respect.

     4.4 Consents. No consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity or any third party is required by, or with
respect to, Parent or the Merger Subs in connection with the execution and delivery of this
Agreement and any Related Agreements to which Parent or the Merger Subs is a party or the
consummation of the transactions contemplated hereby and thereby, except for (a) the filing of the
Certificates of Mergers with the Secretary of State of the State of Delaware, (b) the filing of the
Notification and Report Forms with the FTC and the Antitrust Division of the DOJ required by the
HSR Act and the expiration or termination of the applicable waiting period under the HSR Act and
such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings
as may be required under U.S. or foreign Laws applicable to mergers or acquisitions, (c) such
consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable securities Laws or the rules and regulations of the NASDAQ Stock
Market (other than the approval of Parent’s stockholders, which is not required under Rule 5635(a)
of the NASDAQ Stock Market), (d) issuance of the California Permit and (e) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings which, if not obtained
or made, would not reasonably expected to be, individually or in the aggregate, material to Parent
or materially adversely affect the ability of Parent and Merger Subs to consummate the First Step
Merger and the Second Step Merger within the time frame in which the First Step Merger and the
Second Step Merger would otherwise be consummated in the absence of the need for such consent,
approval, order, authorization, registration, declaration or filing.

     4.5 Litigation. There is no material Litigation Claim or proceeding pending, nor to the
Knowledge of Parent, are there any Claims pending or threatened in writing, against Parent or
Merger Subs or any of their respective properties or assets (tangible or intangible) or any of
their officers, directors, members or managers. To the Knowledge of Parent, there is no material
investigation, audit or other proceeding pending or threatened against Parent or Merger Subs or any
of their respective properties or assets (tangible or intangible) or any of their officers,
directors, members or managers by or before any Governmental Entity. No Governmental Entity has at
any time challenged or questioned the legal right of Parent to conduct its operations as presently
conducted. There is no Litigation Claim of any nature pending against Parent or the Merger Subs,
or, to the Knowledge of Parent, threatened, which challenges or seeks to enjoin any of the
transactions contemplated by this Agreement.

     4.6 Available Funds. Parent has, and will make available to Merger Sub One and Merger Sub Two, as
appropriate, pursuant to existing cash and cash equivalents and committed credit facilities, all
funds necessary to satisfy all of Parent’s, Merger Sub One’s and Merger Sub Two’s obligations under
this Agreement and the transactions contemplated hereby.

     4.7 Parent Common Stock. The shares of Parent Common Stock to be issued to Company Stockholders
pursuant to the First Step Merger have been duly authorized, and upon consummation of the
transactions contemplated by this Agreement, will be validly issued, fully paid and non-assessable.
All shares of Parent Common Stock which may be issued upon the exercise or vesting of Assumed
Equity assumed by Parent hereunder will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and non-assessable.

     4.8 SEC Documents. Parent has made available to the Company, by reference to the SEC’s EDGAR
website, Parent’s annual report on Form 10-K for the fiscal year ended December 31, 2009, all
quarterly reports on Form 10-Q and reports on Form 8-K and amendments thereto filed or furnished by
Parent with the SEC since December 31, 2009 and up to the date of this Agreement, if any, and any
proxy materials distributed to Parent’s stockholders since December 31, 2009 and up to the date of
this Agreement (the “Current Parent SEC Filings”). The Current Parent SEC Filings, and any forms,
reports and other

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documents required to be filed or furnished by Parent with the SEC, and filed or
furnished by Parent with the SEC, from the date hereof to the Effective Time (the “Parent SEC
Filings”) (a) conformed or will conform, as of the dates they were or are filed or furnished with
the SEC, in all material respects, to the requirements set forth in the instructions for such forms
under the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act, and (b)
did not or will not, as of the dates they were or are filed or furnished with the SEC, contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements contained therein, in light of the circumstances under which they were made, not
misleading, except to the extent corrected by a subsequently filed report with the SEC prior to the
date hereof. The financial statements of Parent included in the Current Parent SEC Filings fairly
and accurately presented, in all material respects, the consolidated financial condition of Parent
and its consolidated Subsidiaries as of their respective dates and Parent’s consolidated results of
operations for the respective periods specified therein and were prepared in accordance with GAAP
(except as indicated in the notes thereto or, in the case of unaudited statements included in
quarterly reports on Form 10-Q or Form 8-K, as permitted by the rules and regulations of the SEC
applicable to Form 10-Q or Form 8-K, as the case may be, and subject, in the case of unaudited
statements, to normal year-end audit adjustments).

     4.9 No Changes. Since April 2, 2010 through the date hereof, except as disclosed in the Current
Parent SEC Filings, and except for the Merger and the other transactions contemplated by this
Agreement and any Related Agreement, Parent has conducted its business in the ordinary course of
business consistent with past practice, and there has not been any Parent Material Adverse Effect.

     4.10 Anti-Corruption and Anti-Bribery. To Parent’s Knowledge, there are no pending or, threatened
in writing, claims, charges, investigations, violations, settlements, civil or criminal enforcement
actions, lawsuits, or other court actions against Parent or its Subsidiaries with respect to any
Anti-Corruption and Anti-Bribery Laws. Parent has established and maintains a compliance program
and internal controls and procedures with respect to Anti-Corruption and Anti-Bribery Laws.

     4.11 Information Supplied. The information about Parent or Merger Subs provided by Parent in
writing to the Company expressly for the purposes of furnishing such information to the
securityholders of the Company in any document mailed, delivered or otherwise furnished to the
securityholders of the Company by the Company in connection with the solicitation of their approval
and adoption of this Agreement and the transactions contemplated hereby, will not contain, at or
prior to the time such document is mailed, delivered or otherwise furnished to the securityholders
of the Company by the Company, any untrue statement of a material fact and will not omit to state
any material fact necessary in order to make the statements made therein, in light of the
circumstances under which made, not misleading. Notwithstanding the foregoing,
neither Parent nor Merger Subs makes any representation, warranty or covenant with respect to
any information supplied by the Company which is contained in any of the foregoing documents.

     4.12 Parent Capital Structure.

          (a) As of April 30, 2010, the authorized capital stock of Parent consists of (i)
150,000,000 shares of Parent Common Stock, of which 96,910,999 shares were issued and outstanding
and (ii) 5,000,000 shares of Parent’s preferred stock, par value $0.001 per share (“Parent
Preferred Stock,” and together with the Parent Common Stock, the “Parent Capital Stock”) none of
which were issued and outstanding. All shares of Parent Capital Stock outstanding as of the date
hereof are duly authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the certificate of incorporation or bylaws of Parent, or any
Contract to which Parent is a party or by which it is bound. There are no declared or accrued but
unpaid dividends with respect to any shares of Parent Capital Stock.

          (b) All shares of Parent Capital Stock outstanding as of the date hereof have been
validly issued in compliance in all material respects with all applicable Laws, and were issued in
accordance with any

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right of first refusal or similar right or limitation included in the Charter
Documents or any other Contracts to which Parent is a party.

          (c) Except for the Parent Stock Plans, Parent has no stock option plan or any other
plan, arrangement or agreement providing for equity compensation to any person that has not been
filed with the Current Parent SEC Filings. As of April 30, 2010, Parent has reserved 11,650,620
shares of Parent Common Stock for issuance to employees and directors of, and consultants to,
Parent upon the issuance of stock upon the exercise of options (the “Parent Options”) or vesting of
Restricted Stock Units (the “Parent RSUs”) granted under the Parent Stock Plans, of which as of
April 30, 2010 (i) 10,876,651 shares are issuable, as of the date hereof, upon the exercise of
outstanding, unexercised options or the vesting of Restricted Stock Units granted under the Stock
Plans, and (ii) 773,969 shares remain available for future grant. Parent has reserved 2,219,807
shares of Parent Common Stock for issuance pursuant to Parent’s 2002 Employee Stock Purchase Plan.
As of the date hereof, except for the Parent Options and Parent RSUs and except as disclosed in the
Current Parent SEC Filings, there are no options, warrants, calls, rights, convertible securities,
commitments or agreements of any character, written or oral, to which Parent is a party or by which
Parent is bound obligating Parent to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of Parent or
obligating Parent to grant, extend, accelerate the vesting of, change the price of, otherwise amend
or enter into any such option, warrant, call, right, commitment or agreement. As the date hereof,
there are no outstanding or authorized stock appreciation right, phantom stock, profit
participation, or other similar rights with respect to Parent.

          (d) Parent is not a party to any, and to the Knowledge of Parent, there are no,
voting trusts, proxies, or other written agreements with respect to the voting stock of Parent.
There are no agreements to which Parent is a party relating to the registration, sale or transfer
(including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights)
of any Parent Capital Stock.

ARTICLE V

CONDUCT PRIOR TO THE EFFECTIVE TIME

     5.1 Affirmative Conduct of the Business of the Company.

     From the time of the execution of this Agreement until the first to occur of the Effective
Time or the termination of this Agreement pursuant to Section 9.1 hereof (the “Pre-Closing
Period”):

          (a) The Company shall conduct the business of the Company in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, pay the debts and Taxes
(unless contested in good faith) of the Company when due (subject to Section 5.2(e) below), pay or
perform other obligations when due, and, except in the case of the Terminating Employees, shall use
commercially reasonable efforts to preserve intact the present business organizations of the
Company, keep available the services of the present officers and Employees of the Company and
preserve the relationships of the Company with customers, suppliers, distributors, licensors,
licensees, and others having business dealings with them, all with the goal of preserving
unimpaired the goodwill and ongoing business of the Company at the Effective Time.

          (b) Delivery of Monthly Balance Sheet and Income Statement. As soon as practicable after each
month end, but in no event more than ten (10) Business Days after each month end, the Company shall
deliver to the Parent an unaudited consolidated balance sheet and related statement of income of
the Company, prepared on a consist basis with respect to accounting policies, practices and
procedures used to prepare the Financials.

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     5.2 Restrictions on Conduct of the Business of the Company. During the Pre-Closing Period, the
Company shall not, without the prior written consent of Parent (not to be unreasonably withheld,
delayed or conditioned) in accordance with Section 5.5(a) hereof or as expressly required by this
Agreement:

          (a) cause or permit any modifications, amendments or changes to the Charter
Documents;

          (b) (i) undertake any expenditure, transaction or commitment exceeding $250,000
individually or $500,000 in the aggregate, other than (A) sales of Products and services to
customers in the ordinary course of business on standard terms and conditions consistent with past
practices in an amount not in excess of $250,000 individually, or (B) pursuant to any Material
Contract, or (ii) undertake any expenditure, transaction or commitment for the procurement of
inventory and components (A) in an amount exceeding $100,000 individually from any third party
other than Plexus, or (B) in an amount exceeding $500,000 individually from Plexus;

          (c) pay or satisfy other than when due, discharge or waive, in an amount in excess
of $100,000 individually or $250,000 in the aggregate, any liability, right or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise);

          (d) adopt or change any significant accounting policies, principals, methods,
practices and procedures (including with regard to bad debt, sales returns reserve, inventory
reserves, warranty reserves and other accrued liabilities, depreciation or amortization policies or
rates, or revenue recognition policies, or timing of recognition of recognition and expenses) other
than as required by GAAP;

          (e) make or change any material Tax election, adopt or change any Tax accounting
method, enter into any closing agreement in respect of Taxes, settle any Tax Claim or assessment,
consent to any extension or waiver of the limitation period applicable to any Tax Claim or
assessment or, except in the ordinary course of business, file any income or material sales Tax
Return or file any amended Tax Return unless a copy of such Return has been delivered to Parent for
review and approval, in accordance with Section 6.16 of this Agreement;

          (f) except as required under GAAP, revalue any of its assets (whether tangible or
intangible), including writing down the value of inventory or writing off notes or accounts
receivable, other than in the ordinary course of business consistent with past practice;

          (g) declare, set aside, or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any Company Capital Stock, or split, combine or
reclassify any Company Capital Stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for, shares of Company Capital Stock, or directly or
indirectly repurchase, redeem or otherwise acquire any shares of Company Capital Stock (or options,
warrants or other rights convertible into, exercisable or exchangeable for, Company Common Stock)
except in accordance with the agreements evidencing Company Options or Company RSUs;

          (h) (i) adopt, amend or terminate any Company Employee Plan (other than the Company
Stock Plans in connection with Section 2.7(f)(ii) hereof); (ii) except as set forth on Section
5.2(h)(ii) of the Company Disclosure Schedule, enter into, terminate or amend any Employee
Agreement (except as set forth in Section 6.11 hereof) or collective bargaining agreement, (iii)
pay or promise to pay any special bonus or special remuneration (whether payable in cash, equity or
otherwise) to any Employee, other than commissions and bonuses pursuant to Contracts existing on
the date hereof and disclosed in Section 5.2(h)(ii) of the Company Disclosure Schedule, (iv)
increase, decrease or otherwise change the salary, wage rates, bonuses, fringe benefits or other
compensation (including equity-based compensation) payable or to become payable by the Company to
any of its Employees, other than salary increases not to exceed 10% of base salary in

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connection
with promotions or performance reviews in the ordinary course of business or Company-wide salary
reductions in the ordinary course of business made to employees who are not officers or directors,
(v) make any declaration, promise, commitment or obligation of any kind for the payment of, or
acceleration by, the Company of severance, termination, change of control, or bonus pay (whether in
cash or equity or otherwise), except payments (A) made pursuant to written agreements existing on
the date hereof and that are set forth on Section 5.2(h)(v) of the Company Disclosure Schedule or
any Company Employee Plan listed in Section 3.23(a)(i) or 3.23(a)(iii) of the Company Disclosure
Schedule or (B) to employees of the Company whose employment is terminated other than the
Terminating Employees pursuant to the Company’s severance policy existing as of the date hereof,
(vi) increase rights to indemnification for any Employee, or (vii) except as disclosed in
5.2(h)(vii) of the Company Disclosure Schedule, take any action to accelerate the vesting or extend
the post-termination exercise period of any Company Options, Company RSUs or any other equity
awards under the Stock Plans except with respect to the Cancelled Equity as provided in Section
2.7(f)(ii);

          (i) other than entering into non-exclusive licenses of the Company Products to end
users in the ordinary course of business pursuant to terms similar to the Company’s standard form
agreement(s) (which standard form agreements are set forth in Section 5.2(i) of the Company
Disclosure Schedule) involving aggregate payments to the Company of less than $250,000, (i) sell,
lease, license or otherwise dispose of or grant any security interest in any of its properties or
assets, including the sale of any accounts receivable, except for the sale of properties or assets
(whether tangible or intangible) which are not Intellectual Property Rights and only in the
ordinary course of business and consistent with past practices, or transfer to any Person any
rights to any Company Intellectual Property or enter into any Contract or modify or amend any
existing Contract with respect to any Company Intellectual Property with any Person or with respect
to any Intellectual Property Rights of any Person, (ii) purchase or license any Intellectual
Property Rights or enter into any Contract or modify or amend any existing Contract with respect to
the Intellectual Property Rights of any Person or (iii) enter into any Contract or modify or amend
any existing Contract with respect to the development of any Intellectual Property Rights with a
third party;

          (j) issue or agree to issue any refunds, credits, allowances or other concessions
with customers with respect to amounts collected by or owed to the Company, or waive or release any
right or
claim of the Company (including any write-off or other compromise of any account receivable)
in excess of $100,000 individually or $250,000 in the aggregate;

          (k) except for reasonable advances to employees for travel and business expenses not
exceeding $20,000 that are incurred in the ordinary course of business consistent with past
practices, make any loan to any Person, or forgive any loan to any Person, or purchase debt
securities of any Person or amend the terms of any outstanding loan agreement;

          (l) incur any Indebtedness (other than the obligation to reimburse employees for
travel and business expenses or Indebtedness incurred in connection with the purchase of goods and
services in the ordinary course of business consistent with past practices), amend the terms of any
outstanding loan agreement, guarantee any Indebtedness of any Person, issue or sell any debt
securities or guarantee any debt securities of any Person;

          (m) commence or settle any lawsuit, threat of any lawsuit or proceeding or other
investigation by or against the Company or relating to any of its business, properties or assets,
other than (i) for the collection of past due accounts receivable or other currently pending
lawsuits which do not require any payments by, or impose any restrictions on the conduct of
business of, the Final Surviving Entity or (ii) for a breach of this Agreement or the Reciprocal
Confidentiality Agreement;

          (n) issue, grant, deliver or sell or authorize or propose the issuance, grant,
delivery or sale of, or purchase or propose the purchase of, any Company Capital Stock or any
securities convertible into,

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exercisable or exchangeable for, or subscriptions, rights, warrants or
options to acquire, or other agreements or commitments of any character obligating any of them to
issue or purchase any such shares or other convertible securities, except for the issuance of
Company Common Stock pursuant to the exercise of outstanding Company Options, the issuance of
Company Common Stock upon conversion of outstanding Company Preferred Stock and grants of equity
awards to Employees of the Company as set forth in Section 5.2(n) to the Company Disclosure
Schedule or to newly hired Employees consistent with Section 5.2(n) to the Company Disclosure
Schedule;

          (o) enter into any Contract that would be a Material Contract or amend any Material
Contract pursuant to which any other party is granted marketing, distribution, resale, sales
representation, development, delivery, manufacturing or similar rights of any type or scope with
respect to any Company Products, or enter into any strategic alliance, affiliate agreement or joint
marketing arrangement (other than such Contracts, including reseller Contracts, entered into or
amended in connection with the purchase sale of Company Products in the ordinary course of business
consistent with past practices);

          (p) enter into any Contract to purchase or sell any interest in real property, grant
any security interest in any real property, enter into any lease, sublease, license or other
occupancy agreement with respect to any real property or agree to alter, amend, modify or terminate
any of the terms of any Lease Agreement;

          (q) except as contemplated by Section 6.10 hereof, terminate, amend or otherwise
modify (or agree to do so), violate the terms of, or make any payments resulting from agreed upon
early termination of, any of the Material Contracts set forth or described in Section 3.16 of the
Company Disclosure Schedule;

          (r) acquire or agree to acquire by merging or consolidating with, or by purchasing
any assets or equity securities of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or otherwise acquire
or agree to acquire any assets (other than licenses of Technology for the Company’s Products and
services in the ordinary course of business) or any equity securities, that are material
individually or in the aggregate, to the business of the Company;

          (s) waive any stock repurchase rights, accelerate, amend or change the period of
exercisability of options or restricted stock (except as necessary to comply with Section 2.7(f)
and Section 6.6 hereof), or reprice options granted under any Employee, consultant, director or
other Stock Plans or authorize cash payments in exchange for any options granted under any of such
plans;

          (t) except as set forth in Section 6.11 hereof, terminate any Employee listed on
Section 3.23(a) of the Company Disclosure Schedule, or encourage or otherwise cause any such
Employee to resign from the Company;

          (u) alter, or enter into any commitment to alter, its interest in any Subsidiary,
corporation, association, joint venture, partnership or business entity in which the Company
directly or indirectly holds any interest;

          (v) cancel, materially amend (other than in connection with the addition of
customers and suppliers to such insurance policies from time to time in the ordinary course of
business consistent with past practices) or renew any insurance policy of the Company; or

          (w) take, commit, or agree in writing or otherwise to take, any of the actions
described in Sections 5.2(a) through 5.2(v) hereof, or any other action that would reasonably be
expected to (i) prevent the Company from performing, or cause the Company not to perform, its
covenants or agreements hereunder or (ii) to the Company’s Knowledge, cause or result in any of its
representations and warranties contained herein being untrue or incorrect.

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     5.3 Conduct of the Business of the Parent. During the Pre-Closing Period, Parent shall not,
without the prior written consent of the Company in accordance with Section 5.5(b) hereof:

          (a) cause or permit any modifications, amendments or changes to its certificate of
incorporation or bylaws;

          (b) declare, set aside, or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of Parent Capital Stock;

          (c) acquire or agree to acquire by merging or consolidating with, or by purchasing
any assets or equity securities of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or otherwise acquire
or agree to acquire any assets (other than licenses of Technology and purchases of inventory or
equipment in the ordinary course of business) or any equity securities, (i) in which the aggregate
purchase price exceeds One Hundred Million Dollars ($100,000,000) in cash, or (ii) which, if
undertaken in exchange for Parent Common Stock, would, when taken together with this Agreement and
the transactions contemplated hereby, require Parent to obtain the vote of Parent’s stockholders in
connection with the transactions contemplated by this Agreement pursuant to the rules of the NASDAQ
Stock Market; or

          (d) take, commit, or agree in writing or otherwise to take, any of the actions
described in Sections 5.3(a) through 5.3(c) hereof, or any other action that would prevent Parent
from performing, or cause Parent not to perform, its covenants or agreements hereunder.

     Parent shall use commercially reasonable efforts to (i) comply with the continued listing
requirements of the NASDAQ Stock Market and (ii) timely file or furnish to the SEC all reports and
any proxy materials required to be filed or furnished by it under the Exchange Act.

     5.4 Disqualifying Actions. If the Second Step Merger is consummated as provided in Section 2.1,
then Parent shall not take any action after the Closing (other than any action specifically
contemplated by this Agreement) that would cause the Merger to fail to qualify as a
“reorganization” within the meaning of section 368(a) of the Code, assuming, only for purposes of
this paragraph that the 40% Threshold has been met.

     5.5 Procedures for Requesting Consent.

          (a) If the Company shall desire to take an action which would be prohibited pursuant
to Section 5.2 hereof during the Pre-Closing Period without the written consent of Parent, prior to
taking such action the Company may request such written consent by sending an e-mail or facsimile
to each of the following individuals, and may not take such action until such consent in writing
has been received from any of the following individuals; provided, however, that Parent shall be
deemed to have consented to such action if Parent shall not have responded to such request within
three (3) Business Days of receipt:

Patrick Harshman

Telephone: (408) 542-2694

Facsimile: (408) 542-2510

E-mail address: patrick.harshman@harmonicinc.com

Address: 549 Baltic Way

               Sunnyvale, California 94089

Or

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Robin Dickson

Telephone: (408) 542-2661

Facsimile: (408) 542-2511

E-mail address: robin.dickson@harmonicinc.com

Address: 549 Baltic Way

               Sunnyvale, California 94089

          (b) If Parent shall desire to take an action which would be prohibited pursuant to
Section 5.3 hereof during the Pre-Closing Period without the written consent of the Company, prior
to taking such action Parent may request such written consent by sending an e-mail or facsimile to
each of the following individuals, and may not take such action until such consent in writing has
been received from any of the following individuals; provided, however, that Parent shall be deemed
to have consented to such action if Parent shall not have responded to such request within three
(3) Business Days of receipt:

Suresh Vasudevan

Telephone: (408) 585-5464

Facsimile: (408) 585-5097

E-mail address: sureshv@omneon.com

Address: 1237 E. Arques Avenue

               Sunnyvale, California 94085

Or

Laura Perrone

Telephone: (408) 585-5164

Facsimile: (408) 585-5097

E-mail address: lperrone@omneon.com

Address: 1237 E. Arques Avenue

               Sunnyvale, California 94085

ARTICLE VI

ADDITIONAL AGREEMENTS

     6.1 Stockholder Approval; Fairness Hearing.

          (a) As soon as reasonably practicable following the execution of this Agreement,
Parent and the Company agree to prepare the necessary documents and Parent shall apply to obtain a
permit (a “California Permit”) from the Commissioner of Corporations of the State of California
(the “California Commissioner”) (after a hearing before such Commissioner) pursuant to Sections
25121 and 25142 of the California Corporate Securities Law of 1968 (the “Fairness Hearing Law”), so
that the issuance of Parent Common Stock in the First Step Merger to the Company Stockholders shall
be exempt from registration under the Securities Act, by virtue of the exemption provided by
Section 3(a)(10) thereof, and the Company shall prepare, with the cooperation of Parent, a related
information statement or other disclosure document (the “Information Statement”).

          (b) The Information Statement shall constitute a disclosure document for the offer
and issuance of the shares of Parent Common Stock to be received by the Company Stockholders in the
First Step Merger and an information statement for solicitation of stockholder consent with respect
to the adoption of this Agreement and the approval of the First Step Merger and the transactions
contemplated hereby. The Information Statement shall be accompanied by the notice required by
Section 262(d)(2) of the DGCL and, subject to the provisions of Section 6.2, shall include the
unanimous recommendation of the board of

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directors of the Company for the approval and adoption of
this Agreement and the approval of the First Step Merger and the transactions contemplated hereby
by the stockholders of the Company. The Company agrees that, other than with regard to the
information supplied by Parent specifically for inclusion in the Information Statement, the
Information Statement will not, on the date the Information Statement is first sent or furnished to
the stockholders of the Company, contain any statement which, at such time, is false or misleading
with respect to any material fact, or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they are made, not false or
misleading.

          (c) The Company shall cooperate with, and provide the information reasonably
requested by, Parent in connection with Parent’s application for the California Permit. Whenever
any event occurs that is required to be set forth in an amendment or supplement to the permit
application or Information Statement, the Company and Parent shall cooperate in delivering any such
amendment or supplement to all stockholders of the Company and/or filing any such amendment or
supplement with the California Commissioner or its staff and/or any other government officials.
Parent, with the reasonable cooperation of the Company, will respond to any comments from the
California Commissioner or the California Department of Corporations, and Parent and the Company
shall work together in good faith and use their commercially reasonable efforts to have the
California Permit granted as soon as practicable after such filing. Each of Parent and the Company
agrees to provide promptly to the other such information concerning its business and financial
statements and affairs as, in the reasonable judgment of the providing party or its counsel, may be
required or appropriate under the Fairness Hearing Law for inclusion in the Information Statement,
or in any amendments or supplements thereto, and to cause its counsel and auditors to cooperate
with the other’s counsel and
auditors in preparation of the Information Statement. Each of the Company and Parent shall
use its commercially reasonable efforts to cause the above-referenced documents, including the
permit application, the hearing notice and the Information Statement to comply with all
requirements of applicable federal and state securities Laws. In the event that, (x) after working
in good faith and using commercially reasonable efforts to obtain the California Permit, Parent
determines that it is not able to receive the California Permit under terms that permit the timely
closing of the transactions contemplated hereby or (y) the California Commissioner has denied
Parent’s application for a California Permit, Parent shall issue to the Company a notice (the
“Election Notice”) that it is abandoning the process to obtain a California Permit and will instead
register the securities to be issued pursuant to this Agreement on a registration statement on Form
S-4 in compliance with the Securities Act.

          (d) As promptly as practicable after the date of this Agreement, Parent and the
Company shall prepare and make such filings as are required under applicable blue sky Laws relating
to the transactions contemplated by this Agreement. The Company shall assist Parent as may be
necessary to comply with the securities and blue sky Laws relating to the transactions contemplated
by this Agreement.

          (e) As promptly as practicable after the receipt of a California Permit, but in no
event later than two (2) Business Days from the receipt of a California Permit, the Company shall
submit this Agreement and the transactions contemplated hereby to stockholders of the Company for
approval and adoption as provided by the DGCL and the Charter Documents. Such submission, and
consent in connection therewith, (1) shall include the Information Statement, (2) shall include the
Stockholder Written Consent (3) shall include the Letter of Transmittal and such other documents as
reasonably requested by Parent and (4) shall specify that adoption of this Agreement shall
constitute approval by the stockholders of the Company of: (x) the escrow and indemnification
obligations of the Company Stockholders set forth in Article VIII hereof and the deposit of the
Escrow Amount into the Escrow Fund as contemplated by Section 2.10(a) hereof and (y) in favor of
the appointment of Shareholder Representative Services LLC, as Representative, under and as defined
in this Agreement.

          (f) Any materials to be submitted to the stockholders of the Company in connection
with the solicitation of their approval of the First Step Merger and this Agreement, including the
Information

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Statement and, if required pursuant to Section 6.1(h), any materials submitted to the
stockholders of the Company in connection with obtaining the 280G Approval (the “Soliciting
Materials”), shall be subject to reasonable review and approval by Parent (not to be unreasonably
withheld, delayed or conditioned) and shall include information regarding the Company, the terms of
the First Step Merger and this Agreement, and subject to the provisions of Section 6.2, the
unanimous recommendation of the board of directors of the Company in favor of the Merger and this
Agreement, including each of the matters set forth in Section 6.1(e) hereof and if required
pursuant to Section 6.1(h), the 280G Approval. Anything to the contrary contained herein
notwithstanding, the Company shall not include in the Soliciting Materials any information with
respect to Parent or its Affiliates or associates, the form and content of which shall not have
been consented to in writing by Parent prior to such inclusion, such consent not to be unreasonably
withheld, delayed or conditioned. The Company and Parent will promptly advise the other in writing
if at any time prior to the Closing the Company or Parent, as the case may be, shall obtain
knowledge of any facts that might make it necessary or appropriate to amend or supplement the
Soliciting Materials in order to make statements contained or incorporated by reference therein not
misleading or to comply with applicable Law; provided that Parent shall only be required to provide
notice to the Company of any such facts to the extent such facts relate to information furnished in
writing by Parent or Merger Subs for the express purposes of including in such Soliciting
Materials; provided, further, that the Company shall only be required to provide notice to Parent
of any such facts to the extent they relate to the Company.

          (g) Promptly following receipt of written consents of the stockholders of the
Company constituting the Required Stockholder Approval, the Company shall deliver notice of the
approval of the First
Step Merger and the other actions approved by written consent of the stockholders of the
Company, pursuant to Section 228(e) of the DGCL (the “Stockholder Notice”). In the event the
Company holds a meeting of stockholders of the Company to obtain approval of the remaining
stockholders of the Company who have not executed the Stockholder Written Consent, the Company
shall consult with Parent regarding the date of the stockholders’ meeting (the “Company
Stockholders’ Meeting”) and shall not postpone or adjourn (other than for absence of a quorum) the
Company Stockholders’ Meeting without the consent of the Parent.

          (h) The Company shall use its commercially reasonable efforts to obtain the approval
by the stockholders of the Company by the requisite vote (and in a manner satisfactory to Parent),
by such number of stockholders of the Company as is required by the terms of Section 280G(b)(5)(B)
of the Code, any payment and/or benefits that may, separately or in the aggregate, constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code (the “Section 280G
Payments”) (which determination shall be made by the Company and shall be subject to review and
approval by Parent, such approval not to be unreasonably withheld, delayed or conditioned), such
that all such payments and benefits shall not be deemed to be Section 280G Payments (the “280G
Approval”), and prior to the Effective Time the Company shall deliver to Parent evidence
satisfactory to Parent that vote of the stockholders of the Company was solicited in conformance
with Section 280G and the regulations promulgated thereunder and that (x) such requisite 280G
Approval was obtained with respect to any Section 280G Payment, or (y) the 280G Approval was not
obtained with respect to any Section 280G Payment and as a consequence, that certain Section 280G
Payment shall not be made or provided, pursuant to the waivers of those payments and/or benefits
which were executed by the affected individuals prior to the vote of the stockholders of the
Company.

          (i) In the event that the Parent issues an Election Notice to the Company pursuant
to Section 6.1(c), the parties hereto agree to cooperate to take such other actions necessary to
complete the transactions contemplated by this Agreement.

     6.2 Alternative Transaction Proposals.

          (a) No Solicitation. The Company agrees that it shall not, and shall not permit or
authorize any of its officers, directors (or Affiliates of any such officers or directors),
Employees, Affiliates, investment

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bankers, attorneys, accountants, or other agents, advisers or
representatives (collectively, “Agents”) to, directly or indirectly: (i) solicit, initiate, seek,
knowingly encourage or knowingly facilitate, knowingly support or induce any inquiry with respect
to, or the making, submission or announcement of, any Alternative Transaction Proposal; (ii)
subject to Section 6.2(c), participate or otherwise engage in any discussions or negotiations
regarding, or furnish to any person any non-public information or grant access to the Company’s
books, records or personnel with respect to, or take any other action, in each case, intended to
facilitate any inquiries or the making of any proposal that constitutes or could reasonably be
expected to lead to, any Alternative Transaction Proposal (except to provide notification of or
disclose the existence of the provisions of this Section 6.2(a)); (iii) grant any person a waiver
or release under any standstill or similar agreement with respect to any Company Capital Stock
(which provisions the Company will use commercially reasonable efforts to enforce) or approve a
transaction (including any person becoming an “interested stockholder” under Section 203 of the
DGCL); (iv) approve, endorse or recommend any Alternative Transaction Proposal (except to the
extent specifically permitted pursuant to Section 6.2(d)); or (v) enter into any letter of intent
or similar document or any Contract, plan or arrangement (whether binding or not) contemplating or
otherwise relating to any Alternative Transaction Proposal or transaction contemplated thereby.
The Company will, and will cause its Agents to, immediately cease any and all existing activities,
discussions or negotiations with any third parties conducted heretofore with respect to any
Alternative Transaction Proposal, and, upon Parent’s request during the Pre-Closing Period, shall
request the prompt return or destruction of all confidential information previously furnished to
any Person with which the Company, or its Agents, have engaged in any
such activities within the twelve (12) month period preceding the date hereof. Any breach of
the foregoing provisions of this Section 6.2(a) by any of the Company’s Affiliates or its or their
Agents shall be deemed to be a breach by the Company.

          (b) Notification of Unsolicited Alternative Transaction Proposals. As promptly as
practicable (but in no event more than twenty-four (24) hours) after receipt by the Company or its
Agents of any Alternative Transaction Proposal or any request for non-public information or any
expression of interest or inquiry that could reasonably be expected to lead to an Alternative
Transaction Proposal, the Company shall provide Parent with oral and written notice of (A) the
material terms and conditions of such Alternative Transaction Proposal, request, expression of
interest or inquiry, (B) the identity of the Person or group making any such Alternative
Transaction Proposal, request, expression of interest or inquiry, and (C) a copy of all material
written materials provided by or on behalf of such Person or group in connection with such
Alternative Transaction Proposal, request, expression of interest or inquiry. In addition, the
Company shall provide Parent as promptly as practicable with oral and written notice setting forth
all such information as is reasonably necessary to keep Parent currently informed in all material
respects of the status and details (including substantive modifications or proposed substantive
modifications) of any such Alternative Transaction Proposal, request, expression of interest or
inquiry (including any negotiations contemplated by Section 6.2(c)(ii)) and shall promptly provide
Parent a copy of all written materials (including those provided by e-mail or otherwise in
electronic format) amending any material terms and conditions subsequently provided by or to it in
connection with such Alternative Transaction Proposal, request, expression of interest or inquiry.
The Company shall provide Parent with forty-eight (48) hours prior notice (or such lesser prior
notice as is provided to the members of its board of directors) of any meeting of its board of
directors at which its board of directors could reasonably be expected to consider any Alternative
Transaction Proposal, including to consider whether such Alternative Transaction Proposal is a
Superior Proposal.

          (c) Superior Proposal. Notwithstanding anything to the contrary contained in
Section 6.1(a), in the event that, prior to the time that Required Stockholder Approval has been
obtained, the Company receives an unsolicited, bona fide written Alternative Transaction Proposal
from a third party which is determined in good faith by the Company’s board of directors to be a
Superior Proposal, the Company may then take the following actions, but only if: (i) the Company’s
board of directors determines in good faith, after receiving advice from and consultation with its
outside legal counsel, that the failure to do so would be a breach of its fiduciary obligations to
its stockholders under the DGCL, (ii) the Company has given Parent

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prior written notice of its
intention to take any of the following actions, and (iii) the Company shall have previously
complied in all material respects with the provisions of this Section 6.2:

               (i) furnish non-public information to the third party making such Alternative Transaction
Proposal, provided that (A) the Company shall have received from such third party an executed
confidentiality agreement containing customary limitations on the use and disclosure of all
non-public written and oral information furnished to such third party on the Company’s behalf, the
terms of which are at least as restrictive as the terms contained in the Reciprocal Confidentiality
Agreement, which confidentiality agreement shall not include any provision having the actual or
purported effect of restricting the Company from fulfilling its obligations under this Agreement or
the Reciprocal Confidentiality Agreement, and (B) contemporaneously with furnishing any such
non-public information to such third party, the Company furnishes such non-public information to
Parent (to the extent such non-public information has not been previously so furnished); and

               (ii) engage in discussions or negotiations with the third party with respect to the
Alternative Transaction Proposal.

          (d) Change of Recommendation. Notwithstanding Section 6.1(b), at any time prior to
obtaining the Required Stockholder Approval, the board of directors of the Company may, solely in
response
to a Superior Proposal, make a Change of Recommendation and terminate this Agreement in
accordance with Section 9.1(h), if all of the following conditions in clauses (i) through (v) are
met:

               (i) in the case of a Superior Proposal, such Superior Proposal has not been withdrawn and
continues to be a Superior Proposal;

               (ii) the Company’s board of directors shall have (A) delivered to Parent written
notice (a
“Change of Recommendation Notice”) at least five (5) Business Days prior to informing the
stockholders of the Company of, or publicly effecting, such Change of Recommendation in response to
a Superior Proposal which shall state expressly (1) that the Company has received a Superior
Proposal, (2) the material terms and conditions of the Superior Proposal and the identity of the
Person or group making the Superior Proposal along with any documents delivered to the Company, or
any of its Agents, by such Person or group in connection with such proposal, and (3) that the
Company intends to effect a Change of Recommendation and the manner in which it intends to do so;
(B) provide to Parent a copy of all materials and information delivered or made available to the
Person or group making the Superior Proposal in connection with a Superior Proposal (to the extent
not previously delivered or made available to Parent), and (C) during the aforementioned five (5)
Business Day period, if requested by Parent, engaged in good faith negotiations to amend this
Agreement in such a manner that the Superior Proposal would no longer be a Superior Proposal;

               (iii) Parent shall not have, within the aforementioned five (5) Business Day period, made
an
offer that the Company’s board of directors has in good faith determined (after the receipt of
advice from and consultation with its outside legal counsel and its financial adviser) results in
the Alternative Transaction Proposal that had been determined to be a Superior Proposal no longer
being a Superior Proposal;

               (iv) the board of directors of the Company has concluded in good faith, after receipt of
advice from and consultation with its outside legal counsel, that, in light of such Superior
Proposal and after considering any adjustments or negotiations pursuant to the preceding clause
(ii), that the Company’s board of directors is required to effect a Change of Recommendation to
comply with its fiduciary obligations to the stockholders of the Company under the DGCL; and

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               (v) the Company shall have previously complied with, and continues to comply with, the
provisions set forth in this Section 6.2.

          (e) Continuing Obligation Regarding Distribution of the Information Statement and
the Stockholder Written Consent. Notwithstanding anything to the contrary contained in this
Agreement, the obligation of the Company to distribute the Information Statement and the
Stockholder Written Consent to the stockholders of the Company in order to solicit the Required
Stockholder Approval shall not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to it of any Alternative Transaction Proposal, or by any Change of
Recommendation; provided, however, that in the event of a Change of Recommendation subject to and
in accordance with Section 9.1(h), the Company may terminate this Agreement.

          (f) Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that the provisions of this Section 6.2 were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed by the parties hereto
that Parent, prior to any valid termination of this Agreement in accordance with Article IX, shall
be entitled to an immediate injunction or injunctions, without the necessity of proving the
inadequacy of money damages as a remedy and without the necessity of posting any bond or other
security, to prevent breaches of the provisions of this Section 6.2 and to enforce specifically the
terms and provisions hereof in any court of the United States or any state having jurisdiction,
this being in addition to any other remedy to which Parent may be entitled at law or in equity.
Without limiting the foregoing, it is understood that any violation of the restrictions set
forth above by any of the Company’s Affiliates or any of their Agents shall be deemed to be a
breach of this Agreement by the Company.

     6.3 Access to Information. Subject to applicable Law relating to the exchange of information,
during the Pre-Closing Period, the Company shall afford Parent and its accountants, counsel and
other representatives reasonable access during normal business hours to (a) all of the properties,
books, Contracts and records of the Company, including all Company Intellectual Property, (b) all
other information concerning the business, properties and personnel (subject to restrictions
imposed by applicable Law) of the Company as Parent may reasonably request, and (c) all Employees
of the Company as identified by Parent. The Company shall provide to Parent and its accountants,
counsel and other representatives copies of its internal financial statements that it prepares in
the ordinary course of business to the extent available (including Tax Returns and supporting
documentation) promptly upon request; provided, however, that no information discovered through the
access afforded by this Section 6.3 shall (x) limit or otherwise affect any remedies available to
the party receiving such notice, or (y) be deemed to amend or supplement the Company Disclosure
Schedule or prevent or cure any misrepresentations, breach of warranty or breach of covenant or
agreement.

     6.4 Notification of Certain Matters

          (a) During the Pre-Closing Period, the Company shall give prompt notice to Parent
of: (i) the Company obtaining Knowledge of the occurrence or non-occurrence of any event, the
occurrence or non-occurrence of which is reasonably likely to cause any representation or warranty
of the Company contained in this Agreement to be untrue or inaccurate at or prior to the Effective
Time such that the condition to Closing set forth in Section 7.2(a)(i) would not be satisfied, and
(ii) any failure of the Company to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder such that the conditions to Closing set forth in
Section 7.2(a)(ii) would not be satisfied; provided, however, that the delivery of any notice
pursuant to this Section 6.4(a) shall not (x) limit or otherwise affect any remedies available to
the party receiving such notice, or (y) be deemed to amend or supplement the Company Disclosure
Schedule or prevent or cure any misrepresentations, breach of warranty or breach of covenant.

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          (b) During the Pre-Closing Period, Parent shall give prompt notice to the Company
of: (i) Parent obtaining Knowledge of the occurrence or non-occurrence of any event, the occurrence
or non-occurrence of which is reasonably likely to cause any representation or warranty of Parent
contained in this Agreement to be untrue or inaccurate at or prior to the Effective Time such that
the condition to Closing set forth in Section 7.3(a)(i) would not be satisfied, and (ii) any
failure of Parent to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder such that the conditions to Closing set forth in Section
7.3(a)(ii) would not be satisfied; provided, however, that the delivery of any notice pursuant to
this Section 6.4(b) shall not (x) limit or otherwise affect any remedies available to the party
receiving such notice, or (y) be deemed to amend or supplement the Parent Disclosure Schedule or
prevent or cure any misrepresentations, breach of warranty or breach of covenant.

     6.5 Merger Notification.

          (a) To the extent applicable, as soon as may be reasonably practicable, the Company
and Parent (and any applicable stockholder of the Company) shall make all filings, notices,
petitions, statements,
registrations and submissions of information, application or submission of other documents
required by any Governmental Entity in connection with the Merger and the transactions contemplated
hereby, including: (i) Notification and Report Forms with the FTC and DOJ as required by the HSR
Act and (ii) and such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under U.S. or foreign Laws applicable to mergers or
acquisitions involving foreign parties. Each of Parent and the Company shall cause all documents
that it is responsible for filing with any Governmental Entity under this Section 6.5 to comply in
all material respects with applicable Law.

          (b) The Company and Parent (and/or any applicable stockholder of the Company) each
shall promptly supply the others with any information which reasonably may be required in order to
effectuate the filings contemplated by Sections 6.5(a) and 6.5(b) supply any additional information
which reasonably may be required by the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate. Except where prohibited by
applicable Law, the Company shall consult with Parent prior to taking a position with respect to
any such filings, shall permit Parent to review and discuss in advance, and consider in good faith
the views of Parent in connection with, any analyses, appearances, presentations, memoranda,
briefs, white papers, other materials, arguments, opinions and proposals before making or
submitting any of the foregoing to any Governmental Entity in connection with any investigations or
proceedings in connection with this Agreement or the transactions contemplated hereby, coordinate
with Parent in preparing and providing such information and promptly provide Parent’s counsel (on a
confidential, outside counsel only basis) copies of all filings, presentations and submissions (and
a summary of oral presentations) made by the Company with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby. Except where prohibited by
applicable Law, the Parent shall consult with Company prior to taking a position with respect to
any such filings, shall permit Company to review and discuss in advance, and consider in good faith
the views of Company in connection with, any analyses, appearances, presentations, memoranda,
briefs, white papers, other materials, arguments, opinions and proposals before making or
submitting any of the foregoing to any Governmental Entity in connection with any investigations or
proceedings in connection with this Agreement or the transactions contemplated hereby, coordinate
with Company in preparing and providing such information and promptly provide Company’s counsel (on
a confidential, outside counsel only basis) copies of all filings, presentations and submissions
(and a summary of oral presentations) made by the Parent with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby. Parent shall have principal control
over the strategy for interacting with such Governmental Entities in connection with the matters
contained in this Section 6.5.

          (c) Each of Parent and the Company shall notify the other promptly upon the receipt
of (i) any comments from any officials of any Governmental Entity in connection with any filings
made pursuant

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hereto and (ii) any request by any officials of any Governmental Entity for
amendments or supplements to any filings made pursuant to, or information provided to comply in all
materials respect with, applicable Law. Whenever any event occurs that is required to be set forth
in an amendment or supplement to any filing made pursuant to Section 6.5(a), Parent or the Company,
as the case may be, will promptly inform the other of such occurrence and cooperate in filing with
the applicable Governmental Entity such amendment or supplement.

     6.6 Notice to Holders of Company Options and Company RSUs. Prior to the Effective Time, and
subject to the review and approval of Parent (not to be unreasonably withheld, delayed or
conditioned), the Company shall take all actions necessary to effect the transactions anticipated
by Section 2.7(f) under all Company Option and Company RSU agreements and any other plan or
arrangement of the Company (whether written or oral, formal or informal), including delivering all
required notices. Any materials to be submitted to the holders of Company Options or Company RSUs
in connection with the notice required under this Section 6.6 shall be subject to review and
approval by Parent (not to be unreasonably withheld, delayed or conditioned).

     6.7 Confidentiality. Each of the parties hereto hereby agrees that the information obtained in
any investigation pursuant to Section 6.3 hereof or pursuant to any notice provided under Section
6.4 hereof, or pursuant to the negotiation and execution of this Agreement or the effectuation of
the transactions contemplated hereby, shall be governed by the terms of the Reciprocal
Confidentiality Agreement.

     6.8 Public Disclosure. The Company shall not (and shall instruct its representatives not to)
issue any statement or communication to any third Person (other than its representatives that are
bound by confidentiality restrictions) regarding the subject matter of this Agreement or the
transactions contemplated hereby, including, if applicable, the termination of this Agreement and
the reasons therefor, without the consent of Parent. Parent shall not issue any statement or
communication to any third Person (other than its representatives that are bound by confidentiality
restrictions) regarding the subject matter of this Agreement or the transactions contemplated
hereby, including, if applicable, the termination of this Agreement and the reasons therefor,
without first consulting with the Company, except that this restriction shall be subject to
Parent’s obligation to comply with applicable securities Laws (including, but not limited to, the
rules and regulations of the SEC and the rules of the NASDAQ Stock Market); provided that Parent
shall provide the Company with any proposed disclosure at least one (1) Business Days in advance
and shall consider in good faith any changes reasonably requested by the Company.

     Notwithstanding anything herein to the contrary, following Closing the Representative shall be
permitted to publicly announce that it has been engaged to serve as the Representative in
connection with the Merger as long as such announcement does not disclose any of the other terms of
the Merger or the other transactions contemplated herein.

     6.9 Commercially Reasonable Best Efforts to Complete. Upon the terms and subject to the
conditions set forth in this Agreement, the parties hereto shall use their respective commercially
reasonable best efforts to take promptly, or cause to be taken promptly, all actions, and to do
promptly, or cause to be done promptly, all things necessary, proper or advisable under applicable
Laws and regulations to consummate and make effective the transactions contemplated hereby as soon
as practicable, to satisfy all of the conditions to the obligations of the other parties hereto to
effect the Merger, to obtain all necessary waivers, consents, approvals and other documents
required to be delivered hereunder and to effect all necessary registrations and filings or permits
and to remove any injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement for the purpose of
securing to the parties hereto the benefits contemplated by this Agreement; provided, however, that
neither the Company nor Parent shall be required to agree to (a) any license, sale or other
disposition or holding separate (through establishment of a trust or otherwise) of any shares of
capital stock or of any business, assets or properties of Parent or Affiliates or of the Company,
or (b) the imposition

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of any limitation on the ability of Parent or Affiliates or the Company to
conduct their respective businesses or own any capital stock or assets or to acquire, hold or
exercise full rights of ownership of their respective businesses and, in the case of Parent, the
businesses of the Company, (any such action described in (a) or (b), an “Antitrust Restraint”).
Nothing herein shall require Parent to litigate against any Governmental Entity.

     6.10 Contract Consents, Amendments and Terminations. The Company shall (i) use its commercially
reasonable efforts to obtain all necessary consents, waivers and approvals of any parties to any
Contracts listed on Section 3.5 of the Company Disclosure
Schedule as are required thereunder in connection with the First Step Merger and, if the
Second Step Merger is to occur, the Second Step Merger for any such Contracts to remain in full
force and effect, so as to preserve all material rights of, and benefits to, the Company (or the
Final Surviving Entity) under such Contracts from and after the Effective Time and after the Second
Step Merger is effective, (ii) terminate each of the Contracts listed on Schedule 7.2(f)(ii) hereof
(the “Terminated Agreements”), effective as of and contingent upon the Closing, including sending
all required notices, such that each such agreement shall be of no further force or effect
immediately following the Effective Time, and (iii) provide all notices required under any Contract
in connection with the First Step Merger and the Second Step Merger, all of which such Contracts
are listed on Schedule 7.2(f)(iii). Such consents, modifications, waivers, notices and approvals
shall be in a form reasonably acceptable to Parent. In the event that the other parties to any
Contract listed in Section 3.5 of the Company Disclosure Schedule or Schedule 7.2(f)(ii), including
a lessor or licensor of any Leased Real Property, conditions its grant of a consent, modification,
waiver or approval (including by threatening to exercise a “recapture” or other termination right)
upon, or otherwise requires in response to a notice or consent request regarding the First Step
Merger or the Second Step Merger, the payment of a consent fee, “profit sharing” payment or other
consideration, including increased rent payments or other payments under the Contract or the
provision of additional security (including a guaranty), the Company shall be responsible for
making all such payments (the “Consent and Modification Fees”). The Company shall also be
responsible for making any payments required to terminate the Terminated Agreements (the “Contract
Termination Fees”). Except as set forth on Schedule 6.10, the Company shall be responsible for
making all change of control bonus, severance or other similar bonus or payment obligation that is
or will be paid or incurred by the Company, the Final Surviving Entity or Parent with respect to
Employees of the Company as of the Effective Time payable pursuant to severance Contracts between
the Company and such Employees existing as of the Effective Time as a result of the transactions
contemplated by this Agreement (for the avoidance of doubt, including any such payments paid or
incurred following the Effective Time) (collectively with the Contract Termination Fees and the
Consent and Modification Fees, the “Change of Control Fees”). The Company shall indemnify, defend,
protect and hold harmless Parent from all Change of Control Fees. In the event the First Step
Merger does not close for any reason, Parent shall not have any liability to the Company, the
securityholders of the Company or any other Person for any costs, Claims, liabilities or damages
resulting from the Company seeking to terminate any of the Terminated Agreements or to obtain any
consents, modifications, waivers and approvals.

     6.11 Pre-Closing Employee Matters

          (a) The Company shall cause each current employee of the Company who has not yet
done so to have entered into and executed, and each Person who becomes an employee of the Company
after the date hereof and prior to the Closing shall be required by the Company to enter into and
execute, a Proprietary Information Agreement with the Company enforceable and effective as of such
employee’s first date of employment or service. The Company shall cause each current consultant or
contractor of the Company to have entered into and executed, and each Person who becomes a
consultant or contractor of the Company after the date hereof and prior to the Closing shall be
required by the Company to enter into and execute, a Proprietary Information Agreement or similar
Contract in substance with the Company enforceable and effective as of such consultant or
contractor’s first date of service.

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          (b) Within thirty (30) days of the date hereof, Parent shall use its commercially
reasonable efforts to provide the Company with a list of Terminating Employees, if any. The
Company shall terminate the employment of each Terminating Employee effective no later than
immediately prior to the Closing. The Company shall use its commercially reasonable efforts to
assist such Terminating Employee, and each other employee of the Company whose employment is
terminated after the date hereof and prior to the Closing, to execute and return a valid release
and waiver, in substantially the forms attached hereto as Exhibit G (a
“Terminating Employee Release”), as applicable. Prior to any Terminating Employee or any
employee of the Company whose employment is terminated after the date hereof and prior to the
Closing receiving or becoming entitled to receive any severance payment, such Terminating Employee
and such terminated employee must execute and return (and not revoke) a valid Terminating Employee
Release. Subject to the foregoing, Parent shall provide severance benefits to the Terminating
Employees consistent with Parent’s existing severance policies or in accordance with any severance
Contract with the Company in effect on the date hereof and disclosed in Section 6.11(b) of the
Company Disclosure Schedule, and any such severance benefits shall not constitute Change of Control
Fees.

          (c) The Company shall amend the terms of any shares of Restricted Shares outstanding
as of the date hereof to provide that such shares shall vest in full as of the Effective Time, and
shall amend the terms of the Company Options and Company RSUs to permit the treatment specified in
Section 2.7(f). In addition, the Company shall accelerate the vesting on each Company Option and
Company RSU held by an “Outside Director” (as that term is defined in the applicable Stock Plans)
as of the Effective Time.

          (d) The Company shall take all actions, including the giving of any required notices
to holders of Company Options, necessary to ensure that no Company Options are exercised during the
seven (7) day period ending immediately prior to the Effective Time.

          (e) The Company shall, prior to the Closing, cause each officer and director of the
Company to execute a resignation letter in substantially the form attached hereto as Exhibit H (the
“Director and Officer Resignation Letter”), effective as of the Effective Time.

     6.12 Post-Closing Employee Matters

          (a) Parent or its Affiliates may offer employees of the Company, including the
Executive Employees and the Key Employees, but excluding Terminating Employees, “at-will”
employment by Parent and/or the Final Surviving Entity as a Continuing Employee, to be effective as
of the Closing Date, upon proof of a legal right to work in the United States, to the extent
applicable. Such “at-will” employment will: (i) be set forth in offer letters on Parent’s standard
form (each, an “Offer Letter”), (ii) be subject to and in compliance with Parent’s standard
applicable policies and procedures, including employment background checks and the execution of
Parent’s employee proprietary information agreement, governing employment conduct and performance,
(iii) have terms, including the position and compensation, which salary, bonus opportunities, and
incentive compensation (other than incentives) shall be no less favorable than the terms previously
held by such employees of the Company, and (iv) supersede any prior express or implied employment
agreements, arrangement or offer letter in effect prior to the Closing Date; provided, however,
that such Offer Letters shall provide Continuing Employees with benefits at least comparable to
similarly situated employees of Parent. Continuing Employees shall be eligible to receive employee
benefits consistent with Parent’s applicable human resources policies.

          (b) With respect to each benefit plan maintained by Parent in which any Continuing
Employee will participate after the Closing Date, Parent shall, or shall cause the Final Surviving
Entity to, recognize all service of the Continuing Employees with the Company, for purposes of
eligibility, participation and vesting and, in the case of any benefit plan maintained by Parent
that provides vacation benefits or any other form of paid time-off benefits, for purposes of
benefit accrual (except with respect to any defined

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benefit plan maintained by Parent to the extent
Parent is prohibited by law or to the extent it would result in a duplication of benefits). To the
extent Parent is permitted by Law and the terms of the applicable benefit plan, Parent shall, or
shall cause the Final Surviving Entity to, (i) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage requirements applicable
to the Continuing Employees under any benefit plan maintained by Parent that is a welfare
benefit plan in which such Continuing Employees may be eligible to participate after the Closing
Date, other than limitations or waiting periods that are already in effect with respect to such
Continuing Employees and that have not been satisfied as of the Closing Date under any welfare
benefit plan maintained for the Continuing Employees immediately prior to the Closing Date and (ii)
provide each Continuing Employee with credit for any co-payments and deductibles paid prior to the
Closing Date in satisfying any applicable deductible or out-of-pocket requirements under any
benefit plan maintained by Parent that are welfare plans in which such Continuing Employees are
eligible to participate in after the Closing Date.

     6.13 Agreements and Documents Delivered at Signing or Immediately Following Signing. The Company
shall use commercially reasonable efforts to cause each agreement and document that was executed by
any Person and delivered to Parent prior to, contemporaneously with, or immediately following, the
execution of this Agreement, as the case may be, to remain in full force and effect through the
Closing Date.

     6.14 Termination of Certain Benefit Plans. Effective as of no later than the day immediately
preceding the Closing Date, the Company and any ERISA Affiliate shall terminate any and all group
severance, separation or salary continuation plans, programs or arrangements and any and all
Company Employee Plans intended to include a Code Section 401(k) arrangement (each, a “401(k)
Plan”) (unless Parent provides written notice to the Company that such 401(k) Plans shall not be
terminated). Unless Parent provides such written notice to the Company, no later than five
Business Days prior to the Closing Date, the Company shall provide Parent with evidence that such
Company Employee Plans have been terminated (effective as of no later than the day immediately
preceding the Closing Date) pursuant to resolutions of the board of directors of the Company or
such ERISA Affiliate, as the case may be. The form and substance of such resolutions shall be
subject to review and approval of Parent. The Company also shall take such other actions in
furtherance of terminating such Company Employee Plans as Parent may reasonably require. In the
event that termination of a 401(k) Plan would reasonably be anticipated to trigger liquidation
charges, surrender charges or other fees, then such charges and/or fees shall be included in Third
Party Expenses and shall be the responsibility of the Company, and the Company shall take such
actions as are necessary to reasonably estimate the amount of such charges and/or fees and provide
such estimate in writing to Parent no later than seven (7) Business Days prior to the Closing Date.

     6.15 Expenses and Fees. The Company shall pay, or reflect in the Preliminary Closing Working
Capital or the Preliminary Adjusted Closing Cash Consideration, all of its Third Party Expenses and
any Change of Control Fees prior to the Closing Date, and except if otherwise determined by Parent
in its sole discretion, no Third Party Expenses or Change of Control Fees shall be incurred by the
Final Surviving Entity on behalf of the Company after the Closing Date. Whether or not the First
Step Merger is consummated, all Third Party Expenses shall be the obligation of the respective
party incurring such fees and expenses.

     6.16 Tax Matters.

     (a) Pre-Closing Tax Returns. The Company shall be responsible for the preparation
and filing of any Return of the Company that is required to be filed on or before the Closing Date.
Each such Return shall be true and correct in all material respects and shall be completed in
accordance with applicable Law and past practice (except to the extent inconsistent with applicable
Law). Parent shall be responsible, at the sole expense of the Company Stockholders as a claim by
Parent against the Company Stockholders
pursuant to Article VIII, for the preparation and filing of any Return of the Company that is
required to be filed after the Closing Date that is for any period ending on or before the Closing
Date (the “Pre-Closing

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Returns”), and each such Return shall be true and correct in all material
respects and shall be completed in accordance with applicable Law and consistent with past practice
(except to the extent inconsistent with applicable Law). Notwithstanding anything to the contrary
herein, the parties agree that no Return of the Company for which Parent is responsible pursuant to
this Agreement shall reflect any carryback of Tax assets or attributes of the Company to any Tax
period or portion thereof ending on or prior to the Closing Date. For the avoidance of doubt,
Pre-Closing Returns shall include final income Tax Returns required to be filed after the Closing
Date in all relevant jurisdictions with respect to any taxable period ending on the Closing Date.
The Company shall permit Parent, and Parent shall permit the Representative, to review and comment
on each such income or material sales Tax Return described in this Section 6.16(a) during a
reasonable period prior to filing, and shall not file any such income or material sales Tax Return
without the other party’s prior written approval (not to be unreasonably withheld, delayed or
conditioned). For purposes of this paragraph, a reasonable period shall be at least forty five
(45) calendar days prior to the due date (including extensions) for filing any Return with respect
to income Taxes, and at least ten (10) calendar days prior to the due date (including extensions)
for filing any other material sales Tax Return.

          (b) Post-Closing Tax Returns. Parent shall be responsible for the preparation and
filing of any Return with respect to the Company that is required to be filed after the Closing
Date, including any such Return for any Tax period that includes but does not end on the Closing
Date. Prior to the Closing Date, the Company shall prepare and deliver to Parent a list of all
Returns required to be filed for 2009 and 2010 and the due dates for filing such Returns.

          (c) Disputed Items. If the parties cannot agree on the treatment of any items
reflected on a draft of a Return that is subject to review under Section 6.16(a), such disputed
items shall be resolved by the Independent Accounting Firm in accordance with Section
2.9(b)(iv)(B). If a Return is required by applicable Law to be filed or a payment made before the
Independent Accounting Firm has resolved the disputed items (taking into account valid extensions
of time within which to file, which shall be sought to the extent necessary to permit the
resolution of disputed items), the Return shall be filed or payment made as determined by Parent,
and shall be amended if necessary to reflect the determination of the Independent Accounting Firm
with respect o the disputed items.

          (d) Transfer Taxes. Any sales, use, value-added, goods and services, gross
receipts, excise, registration, recording, conveyance, stamp, duty, transfer and other similar
Taxes and governmental fees imposed or levied on the Company or the Company Securityholders by
reason of, in connection with or attributable to, the transactions contemplated by this Agreement
(“Transfer Taxes”) shall be the responsibility of the Company Securityholders. The parties hereto
shall cooperate with each other to the extent reasonably requested and legally permitted to
minimize any such Transfer Taxes. The party required by applicable Law to file any Return with
respect to Transfer Taxes shall do so in the time and manner prescribed by applicable Law.

          (e) Actions Required in Connection with Second Step Merger. The Company
Stockholders shall be solely responsible for, and Parent shall be entitled to indemnification
pursuant to Article VIII with respect to, all costs and expenses relating to any action required to
be taken by Parent or any of its Affiliates, including the Company or any of its Subsidiaries, as a
result of the consummation of the Second Step Merger, including, without limitation, the
preparation and filing of any final Return, the preparation and filing of any documentation in
order to formally withdraw from any jurisdiction, and any registration or re-registration of any
branch office of the Company in any jurisdiction.

          (f) Cooperation. The parties to this Agreement, the Executive Employees and the
Designated Stockholders shall provide assistance as reasonably requested in preparing and filing
Returns and
responding to any audit, Claim, dispute, controversy or proceeding relating to Taxes (“Tax
Contest”), provide reasonably detailed notice of any Tax Contest sufficient to apprise the other
parties of the nature of

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the Claim, make available as reasonably requested all relevant
information, records, and documents, including workpapers, relating to Taxes of the Company, and
retain until the expiration of the applicable statute of limitations any books and records that
could reasonably be expected to be necessary or useful in connection with the preparation of any
Return, or for any Tax Contest. The Representative shall contact Parent prior the disposition of
any books and records described in this Section 6.16(f), and allow Parent to obtain such books and
records within thirty (30) days of such notice. Prior to the Closing Date, the Company shall
prepare and deliver to Parent a list and contact information of all third party providers of Tax
services (each a “Tax Service Provider”) that have been engaged by the Company within the last four
(4) years, together with an executed notice addressed to each such Tax Service Provider permitting
such Tax Service Provider to disclose to Parent and its agents confidential information relating to
the Taxes of the Company. The covenants set forth in this Section 6.16 shall survive the Closing
and the Effective Time until thirty (30) calendar days after the expiration of the applicable
statute of limitations (including extensions thereof) applicable to the Tax matters in question.

     6.17 Insurance. For a period of six (6) years after the Effective Time, Parent will assume, and
will cause the Final Surviving Entity to honor and fulfill, the obligations of the Company under
(i) the Charter Documents as in effect on the date hereof and (ii) any agreements for
indemnification, exculpation of liability and/or advancement of expenses in effect as of the date
hereof and listed on Section 6.17 of the Company Disclosure Schedule between the Company and any of
its respective current or former directors and officers and any person who becomes a director or
officer of the Company prior to the Effective Time. For a period of six (6) years after the
Effective Time, the Final Surviving Entity shall use its commercially reasonable efforts to
maintain, and Parent shall cause the Final Surviving Entity to use its commercially reasonable
efforts to maintain, directors’ and officers’ liability insurance maintained by the Company
covering those persons who are covered by the Company’s directors’ and officers’ liability
insurance policy as of the date hereof for events occurring prior to the Effective Time on terms
comparable to those applicable to the current directors and officers of the Company; provided,
however, that in no event will the Final Surviving Entity be required to expend in excess of 200%
of the annual premium currently paid by the Company for such coverage (and to the extent annual
premium would exceed 200% of the annual premium currently paid by the Company for such coverage,
the Final Surviving Entity shall use its commercially reasonable efforts to maintain, and Parent
shall cause the Final Surviving Entity to use its commercially reasonable efforts to maintain, the
maximum amount of coverage as is available for such 200% of such annual premium); and provided,
further, that notwithstanding the foregoing, Parent and the Final Surviving Entity may satisfy
their obligations under this Section 6.17 by purchasing a “tail” policy under the Company’s
existing directors’ and officers’ insurance policy which (i) has an effective term of six (6) years
from the Effective Time, (ii) covers those Persons who are currently covered by the Company’s
directors’ and officers’ insurance policy in effect as of the date hereof for actions and omissions
occurring on or prior to the Effective Time, (iii) contains terms and conditions (including,
without limitation, coverage amounts) that are no less advantageous, when taken as a whole, to
those applicable to the current directors and officers of the Company, and (iv) the cost of which
to Parent or the Final Surviving Entity does not exceed an amount equal to 200% of the annual
premium currently paid by the Company (and, to the extent such costs exceed such amount, Parent or
the Final Surviving Entity shall only be required to obtain the maximum amount of “tail” coverage
as is available for 200% of such annual premium). Prior to the Effective Time, the Company may
purchase a “tail” policy under its existing employment liabilities insurance policy. After the
Effective Time, as long as neither Parent nor the Final Surviving Entity are required to take any
action, pay any amount, or incur liabilities with respect to the “tail” policy for employment
liabilities insurance, Parent will not, and will not cause or permit the Final Surviving Entity to,
terminate such employment liabilities insurance “tail” policy.

     6.18 S-8 Registration. Parent shall use its commercially reasonable efforts to file with the SEC, within fifteen
(15) Business Days after the Closing Date, a registration statement on Form S-8, if available for
use by Parent, registering that number of shares of Parent Common Stock equal to the number of
shares of Parent Common Stock underlying all Assumed Equity and will use its commercially
reasonable

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efforts to maintain the effectiveness of such registration statement for so long as such
Assumed Equity remains outstanding and will reserve a sufficient number of shares of Parent Common
Stock for issuance upon exercise or settlement thereof.

     6.19 NASDAQ Global Select Market Listing. No later than the Effective Time, Parent shall apply for
the listing on the NASDAQ Global Select Market the shares of Parent Common Stock issuable, and
those subject to Assumed Equity, in connection with the First Step Merger, upon official notice of
issuance.

     6.20 Further Assurances. Each party hereto, at the request of another party hereto, shall execute
and deliver such other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation of the Merger and the
transactions contemplated hereby; provided, however, that this Section 6.20 shall not be require
either party to make any payments to any Person in aggregate in excess of $5,000.

ARTICLE VII

CONDITIONS TO THE MERGER

     7.1 Conditions to Obligations of Each Party to Effect the Merger. The respective obligations of
the Company, Parent and Merger Subs to effect the Merger shall be subject to the satisfaction, at
or prior to the Effective Time, of the following conditions:

          (a) Stockholder Approval. The Required Stockholder Approval shall have been
obtained.

          (b) No Order; Injunctions; Restraints; Illegality. No Governmental Entity shall
have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction, order or other legal restraint (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the Merger illegal or otherwise
prohibiting or preventing consummation of the Merger.

          (c) Other Governmental Approval. All consents, approvals, permits and
authorizations required to be obtained prior to the Effective Time from any U.S. Governmental
Entity in connection with the execution and delivery of this Agreement and the transactions
contemplated hereby shall have been obtained. Without limiting the generality of the foregoing,
(i) all applicable waiting periods under the HSR Act shall have expired or early termination of
such waiting periods shall have been granted by both the FTC and the DOJ, and all other approvals
required under antitrust, competition or similar applicable Laws of foreign jurisdictions shall
have been obtained, in each case without any condition or requirement requiring or calling for any
Antitrust Restraint, and (ii) either (A) the California Permit shall have been issued by the
California Commissioner and no stop order suspending the effectiveness of the California Permit or
any part thereof shall have been issued and no proceeding for that purpose or other similar
proceeding in respect of the California Permit shall have been initiated or threatened by the
Department of Corporations of the State of California, or (B) the SEC shall have declared a
registration statement covering the securities to be issued
under this Agreement effective, and no stop order suspending the effectiveness of such
registration statement or any part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the proxy statement/prospectus, shall have been
initiated or threatened in writing by the SEC, in each case as set forth in Section 6.1.

     7.2 Conditions to the Obligations of Parent and Merger Subs. The obligations of Parent and Merger
Subs to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing, exclusively by Parent and
Merger Subs:

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          (a) Representations, Warranties and Covenants. (i) The representations and
warranties of the Company in this Agreement shall be true and correct in all material respects
(except for such representations and warranties that are qualified by their terms by reference to
materiality or Company Material Adverse Effect, which representations and warranties as so
qualified shall be true and correct) on and as of the Closing Date as though such representations
and warranties were made on and as of such date (except for representations and warranties which
address matters only as to a specified date, which representations and warranties shall be so true
and correct with respect to such specified date), and (ii) the Company shall have
performed and complied in all material respects with each of the covenants and obligations
contained in this Agreement required to be performed and complied with by such parties as of the
Closing.

          (b) No Material Adverse Effect. Since the date hereof, a Company Material Adverse
Effect shall not have occurred.

          (c) 280G Stockholder Approval.

               (i) Each Person who might receive any payments and/or benefits in connection with the First
Step Merger that constitute “parachute payments” pursuant to Section 280G of the Code shall have
executed and delivered to the Company a 280G Waiver, each in substantially the form attached hereto
as Exhibit B (the “280G Waiver”), pursuant to which each such Person will waive any right or
entitlement to such payments and/or benefits to the extent the value of such payments and/or
benefits exceeds 2.99 times such Person’s base amount determined in accordance with Section 280G of
the Code and the regulations promulgated thereunder, unless the requisite Company Stockholder
approval of those payments and/or benefits is obtained pursuant to Section 280G of the Code so that
such payment and/or benefits do not constitute “parachute payments” thereunder, and such 280G
Waiver shall be in effect immediately prior to the Effective Time.

               (ii) With respect to any payments and/or benefits that Parent determines may constitute
“parachute payments” under Section 280G of the Code with respect to any employees, the Stockholders
of the Company shall have (i) approved, pursuant to the method provided for in the regulations
promulgated under Section 280G of the Code, any such “parachute payments” or (ii) voted upon and
disapproved such parachute payments, and, as a consequence, such “parachute payments” waived by
such Persons pursuant to the 280G Waivers shall not be paid or provided for in any manner, and
Parent shall not have any liabilities with respect to such “parachute payments.”

          (d) Appraisal Rights. Holders of Company Capital Stock at the Effective Time
holding (i) at least ninety percent (90%) of the total number of shares of Company Capital Stock
outstanding immediately prior to the Effective Time shall have approved the First Step Merger,
approved and adopted this Agreement and approved the transactions contemplated hereby, and (ii) no
more than ten percent (10%) of the total number of shares of Company Capital Stock outstanding
immediately prior to the Effective Time shall have
perfected, or continue to have a right to exercise appraisal or dissenters’ or other similar
rights under the DCGL or the CCC with respect to their Company Capital Stock by virtue of the First
Step Merger.

          (e) Litigation. There shall be no Litigation Claim, order, injunction or proceeding
of any nature pending before any Governmental Entity, or threatened in writing, against Parent or
the Company, their respective properties or any of their respective officers or directors (i) by
any Person which challenges or seeks to enjoin the Merger and would reasonably be expected to
result in a temporary, preliminary or permanent injunction of the Merger, or (ii) by any
Governmental Entity (A) which challenges or seeks to enjoin the Merger, or (B) arising out of, or
in any way connected with, the Merger or the other transactions contemplated by the terms of this
Agreement, which would reasonably be expected to be material to the Company, the Final Surviving
Entity or Parent.

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          (f) Third Party Contracts.

               (i) The Company shall have delivered to Parent all necessary consents, waivers and approvals
of parties to any Contract set forth on Schedule 7.2(f)(i)hereto.

               (ii) The Company shall have terminated each of those Contracts set forth on Schedule
7.2(f)(ii) hereto.

               (iii) The Company shall have sent the notices set forth on
Schedule 7.2(f)(iii) hereto.

          (g) Termination of Terminating Employees. The employment of each of the Terminating
Employees shall have been terminated.

          (h) New Employment Arrangements; Continuing Employees.

               (i) Each of the Executive Employees (A) shall have entered into “at-will”
employment
arrangements with Parent and/or the Final Surviving Entity pursuant to their execution of a Key
Employee Offer Letter which shall be in full force and effect, (B) shall have agreed to be
employees of Parent after the Closing, (C) shall be employees of the Company immediately prior to
the Effective Time and (D) shall not have taken any action or expressed any intent to terminate or
modify such acceptance or intent to leave the employ of Parent or the Company following the
Effective Time.

               (ii) At least twenty-one of the Key Employees shall be employees of the Company immediately
prior to the Effective Time, and shall not have provided notice to the Company of the intent to
terminate such employment.

               (iii) At least eighty-five percent (85%) of the employees who were employed by the Company on
the date hereof, other than the Terminating Employees, shall be employees of the Company
immediately prior to the Effective Time, and shall not have provided notice to the Company of the
intent to terminate such employment.

          (i) Resignation of Officers and Directors. Parent shall have received a duly
executed Director and Officer Resignation Letter from each of the officers and directors of the
Company effective as of the Effective Time.

          (j) Termination of Benefit Plans. Unless Parent has explicitly instructed in
writing, Parent shall have received from the Company evidence reasonably satisfactory to Parent
that each 401(k) Plan shall have been terminated pursuant to resolution of the board of directors
of the Company or the ERISA Affiliate,
as the case may be (the form and substance of which shall have been subject to review and
approval of Parent, such approval not to be unreasonably withheld, delayed or conditioned),
effective as of no later than the day immediately preceding the Closing Date, and the Company shall
have paid any liquidated charges, surrender fees or other fees or expenses.

          (k) Company Deliverables. Parent shall have received the following documents from
the Company:

               (i) At least Seven (7) Business Days prior to the Closing Date, the Statement of Expenses
and
the Spreadsheet;

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               (ii) At least five (5) Business Days prior to the Closing Date, the Company’s Closing
Working
Capital Statement;

               (iii) On the Closing Date, a properly executed statement in a form reasonably acceptable to
Parent for purposes of satisfying Parent’s obligations under Treasury Regulation Section
1.1445-2(c)(3); and

               (iv) A certificate from the Company, validly executed by the Chief Financial Officer of the
Company on the Company’s behalf, certifying as to the Company’s cash, cash equivalents and
restricted cash balances as of Closing.

          (l) Release of Liens. Parent shall have received from the Company a duly and
validly executed copy of all agreements, instruments, certificates and other documents, in form and
substance reasonably satisfactory to Parent, that are necessary or appropriate to evidence the
release of all Liens set forth in Schedule 7.2(l) hereto.

          (m) Legal Opinion. Parent shall have received a legal opinion from legal counsel to
the Company in the form attached hereto as Exhibit I.

          (n) Certificate of the Company. Parent shall have received a certificate from the
Company, validly executed by the Chief Executive Officer and the senior financial officer of the
Company for and on the Company’s behalf, to the effect that, as of the Closing:

               (i) the representations and warranties of the Company in this Agreement shall be true and
correct in all material respects (except for such representations and warranties that are qualified
by their terms by reference to materiality or Company Material Adverse Effect, which
representations and warranties as so qualified shall be true and correct) on and as of the Closing
Date as though such representations and warranties were made on and as of such date (except for
representations and warranties which address matters only as to a specified date, which
representations and warranties shall be true and correct with respect to such specified date);

               (ii) the Company has performed and complied in all material respects with each of the
covenants and obligations under this Agreement required to be performed and complied with by the
Company as of the Closing;

               (iii) no Company Material Adverse Effect has occurred since the date hereof; and

               (iv) the conditions to the obligations of Parent and Merger Subs set forth in this
Section 7.2
have been satisfied (unless otherwise waived in accordance with the terms hereof).

          (o) Certificate of Secretary of Company. Parent shall have received a certificate,
validly executed by the Secretary of the Company, certifying on behalf of the Company as to (i) the
Charter Documents, (ii) the valid adoption of resolutions of the board of directors of the Company
(whereby this Agreement, the Merger and the transactions contemplated hereunder were unanimously
approved by the board of directors), and (iii) the Required Stockholder Approval having been
obtained.

          (p) Certificates of Good Standing. Parent shall have received, (i) with respect to
the Company, (A) a long-form certificate of good standing from the Secretary of State of the State
of Delaware, and (B) a certificate of good standing from the applicable Governmental Entity in each
material jurisdiction where it is required to be qualified to do business, and (ii) with respect to
each of the Company’s Subsidiaries, (X) a certificate of good standing (or equivalent document)
from the Secretary of State (or equivalent

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Governmental Entity) of the jurisdiction of
incorporation or organization of such Subsidiary to the extent such certificates are issued in such
jurisdictions, and (Y) a certificate of good standing from the applicable Governmental Entity in
each jurisdiction where it is required to be qualified to do business, all of which are dated
within two (2) Business Days prior to the Closing.

          (q) Financials. Parent shall have received from the Company the Financials.

          (r) Returns. The Company shall have prepared and delivered to Parent a list of all
Returns required to be filed for 2009 and 2010 and the due dates for filing such Returns.

          (s) Conversion. The shares of Company Preferred Stock (other than the outstanding
share of Company Series A-2.2 Preferred Stock) shall have been converted into shares of Company
Common Stock.

     7.3 Conditions to Obligations of the Company. The obligations of the Company to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by the Company:

          (a) Representations, Warranties and Covenants. (i) The representations and
warranties of Parent and Merger Subs in this Agreement shall be true and correct in all material
respects (except for such representations and warranties that are qualified by their terms by
reference to materiality or Parent Material Adverse Effect, which representations and warranties as
so qualified shall be true and correct) on and as of the Closing Date as though such
representations and warranties were made on and as of such date (except for representations and
warranties which address matters only as to a specified date, which representations and warranties
shall be so true and correct with respect to such specified date), and (ii) Parent and each Merger
Sub shall have performed and complied in all material respects with all covenants and obligations
under this Agreement required to be performed and complied with by such parties as of the Closing
Date.

          (b) No Material Adverse Effect. Since the date hereof, a Parent Material Adverse
Effect shall not have occurred.

          (c) NASDAQ Listing; SEC Filings. (i) On the Closing Date, the Parent Common Stock
shall continue to be listed on the NASDAQ Global Select Market, and (A) Parent shall not have
received any “Staff Delisting Determination” as defined in Rule 5805 of the NASDAQ rules, and (B)
no proceedings for delisting shall be in process and Parent shall not have received a notice of
delisting, in either case, involving or citing deficiencies that would not reasonably be expected
to be cured and that would reasonably be expected to result in a delisting of the Parent Common
Stock from the NASDAQ Global Select Market and
(ii) on or prior to the Closing Date, Parent shall have filed or furnished to the SEC all
reports and any proxy materials required to be filed or furnished by it under the Exchange Act.

          (d) Certificate of Parent. Company shall have received a certificate executed on
behalf of Parent by a President or a Vice President for and on its behalf to the effect that, as of
the Closing:

               (i) all representations and warranties made by Parent and Merger Subs in this Agreement shall
be true and correct in all material respects (except for such representations and warranties that
are qualified by their terms by reference to materiality or Parent Material Adverse Effect, which
representations and warranties as so qualified shall be true and correct) on and as of the Closing
Date as though such representations and warranties were made on and as of such date (except for
representations and warranties which address matters only as to a specified date, which
representations and warranties shall be true and correct with respect to such specified date);

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               (ii) Parent and Merger Subs have performed and complied in all material respects with each of
the covenants and obligations under this Agreement required to be performed or complied with by
such parties as of the Closing; and

               (iii) No Parent Material Adverse Effect has occurred since the date hereof.

               (iv) the conditions to the obligations of the Company set forth in this Section 7.3
have been
satisfied (unless otherwise waived in accordance with the terms hereof).

          (e) Legal Opinion. The Company shall have received a legal opinion from legal
counsel to Parent in the form attached hereto as Exhibit J.

ARTICLE VIII

SURVIVAL; INDEMNIFICATION; ESCROW ARRANGEMENTS

     8.1 Survival.

          (a) The representations and warranties of the Company set forth in this Agreement,
or in any certificate delivered pursuant to this Agreement, shall survive the Closing and the
Effective Time for a period of eighteen (18) months following the Closing Date; provided, however,
that in the event of fraudulent or willful breach or willful misrepresentation of a representation
or warranty, such representation or warranty shall survive indefinitely; and provided, further,
that notwithstanding the foregoing, the representations and warranties of the Company set forth in
Section 3.1 (Organization), Section 3.2(a)—(d) (Company Capital Structure), Section 3.4
(Authority) and Section 3.12 (Tax Matters) shall survive the Closing and the Effective Time until
the expiration of the statutes of limitations (including extensions thereof) applicable to the
matters referenced therein (the representations and warranties referenced in the foregoing being
referred to herein, collectively, as the “Specified Representations”). The applicable periods
referenced in this Section 8.1 shall be referred to, collectively, as the “Expiration Date” and
each applicable period as the “Applicable Expiration Date.” It is the express intent of the
parties that, if the applicable survival period for an item as contemplated by this Section 8.1 is
shorter than the statute of limitations that would otherwise have been applicable to such matter,
then, by contract, the applicable statute of limitations with respect to such item shall be reduced
to the shortened survival period contemplated hereby. The parties further acknowledge that the
time periods set forth in this Section 8.1 for the survival of representations and warranties and
the assertion of
claims under this Agreement are the result of arms’-length negotiation among the parties and
that they intend for the time periods to be enforced as agreed by the parties.

          (b) The representations and warranties of Parent and Merger Subs set forth in this
Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall
expire at the Effective Time.

          (c) The agreements, covenants and other obligations of the parties hereto shall
survive the Closing and the Effective Time in accordance with their respective terms.

     8.2 Indemnification.

          (a) From and after the Effective Time, the Company Stockholders (each, a “Company
Indemnifying Party” and collectively, the “Company Indemnifying Parties”) shall severally, and not
jointly, in accordance with each Company Stockholder’s Pro Rata Portion, indemnify and hold
harmless Parent and its directors, officers and other Employees, Affiliates, agents and other
representatives, including the Final Surviving Entity (each, a “Parent Indemnified
Party” and
collectively, the “Parent Indemnified

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 Parties”), from and against all Claims, losses, liabilities,
damages, Taxes, diminution in value, costs, interest, awards, judgments, penalties and expenses,
including reasonable attorneys’ and consultants’ fees and expenses and including any such expenses
incurred in connection with investigating, defending against or settling any of the foregoing
(hereinafter individually a “Loss” and collectively “Losses”) paid, suffered, incurred or sustained
by the Indemnified Parties, or any of them, directly or indirectly, as a result of, arising out of
or in connection with the following (“Parent Indemnifiable Matters”): (i) (A) any inaccuracies or
misrepresentations in, or breaches of, any representation or warranty of the Company set forth in
this Agreement as of the date of this Agreement, and (B) any inaccuracies or misrepresentations in,
or breaches of, any representation or warranty of the Company set forth in this Agreement as of the
Closing Date as if such representations and warranties had been made at and as of the Closing, or
in the certificates delivered by the Company pursuant to Section 7.2 hereof; (ii) any failure by
the Company to perform or comply with any covenant applicable to it contained in this Agreement,
any Related Agreements (to which the Company is a party) or any certificates or other instruments
delivered by the Company pursuant to this Agreement; (iii) any fraudulent or willful breach or
willful misrepresentation by the Company or its directors or executive officers of any provision of
this Agreement or any certificates delivered by the Company pursuant to this Agreement; (iv) any
Dissenting Share Payments; (v) any Excess Expenses and Fees not otherwise taken into account in the
determination of the Final Adjusted Closing Cash Consideration; (vi) any Indebtedness of the
Company, except to the extent reflected in the calculation of the Final Adjusted Closing Cash
Consideration; (vii) the Shortfall Amount not previously paid from Escrow; (viii) any inaccuracy in
items (a)(i), (a)(ii), (a)(v), (a)(vi), (a)(vii) and (b) of the Spreadsheet; (ix) the release of
all Liens set forth in Schedule 7.2(l); and (x) any Pre-Closing Taxes, except to the extent
reflected in the calculation of the Final Adjusted Closing Cash Consideration.

          (b) From and after the Effective Time, Parent or the Final Surviving Entity (each a
“Parent Indemnifying Party” and collectively, the “Parent Indemnifying Parties,” together with the
Company Indemnifying Parties, the “Indemnifying Parties”) shall severally, and not jointly,
indemnify and hold harmless the Company Stockholders and their directors, officers and other
Employees, Affiliates, agents and other representatives, (each, a “Company Indemnified Party” and
collectively, the “Company Indemnified Parties,” together with the Parent Indemnified Parties, the
“Indemnified Parties”), from and against all Losses paid, suffered, incurred or sustained by the
Company Indemnified Parties, or any of them, directly or indirectly, as a result of, arising out of
or in connection with any failure by Parent or Merger Sub to perform
or comply with any covenant to be performed by it contained in this Agreement (“Company
Indemnifiable Matters”).

          (c) For the purpose of this Article VIII, when determining the amount of Losses
paid, suffered, sustained or incurred as a result of, arising out of, or in connection with, as
applicable (i) any inaccuracy or misrepresentation in, or any breach of, any representation or
warranty of the Company set forth in this Agreement or in any certificate delivered pursuant to
Section 7.2 hereof, whether as of the date hereof or as of the Closing Date, or (ii) any breach or
non-fulfillment of any covenant or other agreement of an the Company set forth in this Agreement,
any Related Agreement (to which the Company is a party) or any certificates or other instruments
delivered pursuant to this Agreement, but not for determining whether any such inaccuracy,
misrepresentation, breach or non-fulfillment has occurred, any representation, warranty, agreement
or covenant given or made by the Company that is qualified in scope as to “materiality” or a
“Company Material Adverse Effect” shall be deemed to be made or given without such materiality
qualification or qualification as to a “Company Material Adverse Effect.”

          (d) No Indemnifying Party shall have any rights of contribution, indemnification or
advancement from an Indemnified Party with respect to any Loss claimed by an Indemnified Party,
except to the extent such Losses are of a nature that would be covered by existing indemnification
agreements that are listed in Section 6.17 of the Company Disclosure Schedule.

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          (e) Notwithstanding anything to the contrary set forth in this Agreement, any Person
committing fraud, willful breach or willful misrepresentation with respect to this Agreement or in
any certificate delivered by the Company pursuant to this Agreement shall be liable for, and shall
indemnify and hold the Indemnified Parties harmless for, any Losses paid, suffered, incurred or
sustained by the Indemnified Parties, or any of them, directly or indirectly, as a result of,
arising out of or in connection with such fraud, willful breach or willful misrepresentation
committed by such Person.

          (f) Nothing in the Agreement shall limit the right of an Indemnified Party to pursue
remedies under any Related Agreement against the parties thereto.

     8.3 Indemnification Limitations.

          (a) Subject to Section 8.2(e), with respect to Section 8.2(a)(i), except in the
cases of (i) fraudulent or willful breach or willful misrepresentation by the Company or its
directors or executive officers of any provision of this Agreement or any certificate delivered
pursuant to this Agreement by the Company, in which case the maximum liability of any Company
Stockholder shall not exceed an aggregate amount which, if added to all other amounts paid or
payable as indemnification payments by such Company Stockholder under Section 8.2(a), would equal
such Stockholder’s Pro Rata Portion of the Merger Consideration, (ii) any indemnification claim
resulting from, arising out of or in connection with any inaccuracies or misrepresentations in, or
breaches of, Section 3.12 (Tax Matters), in which case the maximum liability of any Company
Stockholder shall not exceed an aggregate amount which, if added to all other amounts paid or
payable as indemnification payments by such Company Stockholder under Section 8.2(a), would equal
30% of such Stockholder’s Pro Rata Portion of the Merger Consideration, and (iii) any
indemnification claim resulting from, arising out of or in connection with any inaccuracies or
misrepresentations in, or breaches of, any of the Specified Representations (other than Section
3.12 (Tax Matters)), the Company Stockholders shall not be obligated to indemnify the Parent
Indemnified Parties for any amounts in excess of each such Company Stockholder’s Pro Rata Portion
of any amounts then held in the Indemnity Escrow Fund.

          (b) Subject to Section 8.2(e), with respect to Section 8.2(a)(ii) through Section
8.2(a)(x) and any indemnification claim resulting from, arising out of or in connection with any
inaccuracies or
misrepresentations in, or breaches of, any of the Specified Representations (other than
Section 3.12 (Tax Matters), the maximum liability of any Company Stockholder shall not exceed an
aggregate amount which, if added to all other amounts paid or payable as indemnification payments
by such Company Stockholder under Section 8.2(a), would equal such Stockholder’s Pro Rata Portion
of the Merger Consideration.

          (c) Notwithstanding anything to the contrary set forth in this Agreement, in the
event that a Parent Indemnified Party pays, suffers, incurs or sustains any Losses, any claims by
such Indemnified Party for Losses shall be made first against the Indemnity Escrow Fund, and, to
the extent permitted by this Agreement, second against the Company Stockholders directly. The form
of satisfaction of the amount of any indemnification obligation of the applicable Company
Stockholders under this Article VIII disbursed to Parent from the Indemnity Escrow Fund shall be in
the same proportion as to the aggregate amount of cash and shares of Parent Common Stock then held
in the Indemnity Escrow Fund. For purposes of this paragraph, the value of the shares of Parent
Common Stock held in the Indemnity Escrow Fund shall be deemed to be the Parent Common Stock Value.

          (d) With respect to Section 8.2(a)(i), other than with respect to the Specified
Representations, no Company Indemnifying Party shall be required to indemnify a Parent Indemnified
Party hereunder until such time as the aggregate amount of Losses for which the Parent Indemnified
Party are entitled to indemnification pursuant to this Agreement exceeds $750,000, at which time
the Company

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Indemnifying Party shall be obligated to indemnify the Parent Indemnified Party for the
full amount of all such Losses, subject to the limitations set forth in this Article VIII.

          (e) Except in the case of fraudulent or willful breach or willful misrepresentation
of any provision of this Agreement or any certificate delivered by the Company pursuant to this
Agreement on the part of the Company or its directors or executive officers, from and after the
Effective Time, (i) the Company Stockholders shall not be obligated to indemnify the Parent
Indemnified Parties pursuant to Section 8.2(a)(i) hereof for any indemnification claim that is made
after the Applicable Expiration Date of the representation and warranty that forms the basis for
such indemnification claim, and (ii) the Parent and Merger Subs shall not be obligated to indemnify
the Company Indemnified Parties for any indemnification claim that is made after the Applicable
Expiration Date of the representation and warranty that forms the basis for such indemnification
claim; provided, however, that such indemnification obligations shall not terminate with respect to
any item as to which an Indemnified Party shall have, before the Applicable Expiration Date of the
representation and warranty that forms the basis for such indemnification claim, previously made a
bona fide claim by validly delivering a Claim Certificate of such indemnification claim pursuant to
this Article VIII.

          (f) In no event will an Indemnifying Party be liable for any lost profits, lost
opportunity, or punitive damages of any kind (other than any such damages underlying a Third Party
Claim for which an Indemnified Party is otherwise entitled to indemnification). The amount of
Losses payable by an Indemnifying Party shall be reduced by any amounts actually received by an
Indemnified Party directly with respect to such indemnifiable Losses from (i) any insurance
proceeds, or (ii) any indemnity or contribution amounts from a third party; provided, however, for
purposes of clarification, there shall be no obligation on the part of any Indemnified Party to
seek such indemnity, payments or contributions; provided, however, that notwithstanding the
foregoing, Parent shall use commercially reasonable efforts to make claims under the Company’s
directors’ and officers’ liability insurance and employment practices liability insurance “tail”
policies to the extent that such claims could be covered under such policies.

          (g) Each of Parent and the Company acknowledges and agrees (on behalf of itself and
all of the other Indemnified Parties, respectively) that, subject to Section 8.2(e) and except as
permitted by Sections 8.4(b) and 8.4(c), (i) the indemnification provisions in this Article VIII
shall be the sole and exclusive remedy of the Parent Indemnified Parties and the Company
Indemnified Parties for any and all claims against the Company Indemnifying Parties and the Parent
Indemnifying Parties, respectively, for Losses and any and
all other damages incurred by the Parent Indemnified Parties and the Company Indemnified
Parties, respectively, with respect to this Agreement and the transactions contemplated hereby,
(ii) all applicable statutes of limitations or other claims periods with respect to claims
hereunder shall be shortened to the applicable claims periods and survival periods expressly set
forth herein, and (iii) the Parent Indemnified Parties and the Company Indemnified Parties
irrevocably waive any and all rights they may have to make claims against the Company Indemnifying
Parties and the Parent Indemnifying Parties, respectively, under statutory and common law as a
result of any Losses and any and all other damages incurred by the Parent Indemnified Parties and
the Company Indemnified Parties, respectively, with respect to this Agreement and the transactions
contemplated hereby, whether or not in excess of the maximum amounts permitted to be recovered
pursuant to the indemnification provisions herein.

     8.4 No Indemnification Limitations.

          (a) Notwithstanding anything to the contrary set forth in this Agreement, the
parties hereto agree and acknowledge that any Indemnified Party may bring a claim for
indemnification for any Loss under this Article VIII notwithstanding the fact that such Indemnified
Party had knowledge of the breach, event or circumstance giving rise to such Loss prior to the
Closing or waived any condition to the Closing related thereto.

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          (b) Notwithstanding anything to the contrary set forth in this Agreement, nothing
shall prohibit Parent from seeking and obtaining recourse against any Company Stockholder in the
event that Parent issues more than the portion of the Merger Consideration to which such Company
Stockholder is entitled.

          (c) Notwithstanding anything to the contrary set forth in this Agreement, nothing in
this Agreement shall limit the rights of any party hereto to apply for equitable remedies to
enforce the other party or parties’ obligations hereunder.

	8.5	 	Indemnification Claims Procedures.

          (a) With respect to Section 8.2(a) or Section 8.2(b), an Indemnified Party may make
an indemnification claim pursuant to Section 8.2(a) or Section 8.2(b), as applicable, by delivering
a certificate (a “Claim Certificate”) (i) in the case of a Parent Indemnifiable Matter, to the
Representative, with a copy to the Escrow Agent (if and to the extent that the Parent Indemnified
Party is seeking recourse against the Indemnity Escrow Fund), and/or to one or more Company
Stockholders (if and to the extent that the Parent Indemnified Party is seeking recourse directly
against any such Company Stockholder), (A) stating that a Parent Indemnified Party has (x) paid,
suffered, incurred or sustained Losses, (y) recorded an accrual in the amount of the Losses in its
financial statements in accordance with GAAP included in a report filed with the SEC or reasonably
expected to be included in the next subsequent quarterly report on Form 10-Q (or, if accrued during
the last three months of a fiscal year, an annual report on Form 10-K) to be filed with the SEC;
provided, however, that if such accrual is subsequently reversed, whether as a result of the
subsequent review or audit of such financial statements or in financial statements for or as of a
subsequent period or date, the Claim Certificate or Claim shall be deemed to be withdrawn and no
Claim for indemnification shall be entitled to be made with respect to such matter unless the
period during which such Claim can be made pursuant to this Article VIII shall not otherwise have
lapsed, or (z) in the case of a Third Party Claim, that it reasonably anticipates that such Parent
Indemnified Party will have to pay, incur or sustain Losses, and (B) specifying in reasonable
detail to the extent available the individual items of Losses included in the amount so stated, the
date each such item was paid, suffered, incurred or sustained, or the basis for such anticipated
liability, and, if applicable, the nature of the inaccuracy, misrepresentation or breach of
warranty or covenant to which such item is related, or (ii) in the case of a Company Indemnifiable
Matter, in which case the Representative shall be required to deliver such notice, to Parent, (A)
stating that a Company Indemnified Party has (x) paid, suffered, incurred or sustained Losses, (y)
recorded an accrual for Losses in the amount of the Losses in its financial statements in
accordance with GAAP; provided, however that if such accrual is subsequently reversed, whether as a
result of the subsequent review or audit of such financial statements or in financial statements
for or as of a subsequent period or date, the Claim Certificate or Claim shall be deemed to be
withdrawn and no Claim for indemnification shall be entitled to be made with respect to such matter
unless the period during which such Claim can be made pursuant to this Article VIII shall not
otherwise have lapsed, or (z) in the case of a Third Party Claim, that it reasonably anticipates
that such Company Indemnified Party will have to pay, incur or sustain Losses, and (B) specifying
in reasonable detail to the extent available the individual items of Losses included in the amount
so stated, the date each such item was paid, suffered, incurred or sustained, or the basis for such
anticipated liability, and the nature of the breach of covenant to which such item is related.

          (b) Following its receipt of a Claim Certificate, the Representative (or, if such
indemnification claim is made directly against a Company Stockholder, such Company Stockholder) or
Parent, as applicable, shall have thirty (30) calendar days to object to any item(s) or amount(s)
set forth therein by delivering written notice thereof which shall specify in reasonable detail (i)
each amount to which the Representative (or, if such indemnification claim is made directly against
a Company Stockholder, such Company Stockholder), or Parent, as applicable objects and (ii) the
nature of each objection (an “Objection
Notice”) to the Indemnified Party submitting such Claim Certificate at the address of such
Indemnified Party

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set forth in such Claim Certificate, with a copy to the Escrow Agent (if and to
the extent that a Parent Indemnified Party is seeking recourse against the Indemnity Escrow Fund in
connection with Section 8.2(a)). In the event that the Representative (or, if such indemnification
claim is made directly against a Company Stockholder, such Company Stockholder), or Parent, as
applicable shall fail to object, pursuant to this Section 8.5(b), to any item or amount set forth
in an Claim Certificate within the foregoing thirty (30) calendar day period, the Representative
(or, if such indemnification claim is made directly against a Company Stockholder, such Company
Stockholder), or Parent, as applicable, shall be deemed to have irrevocably agreed and consented to
each such item or amount. With respect to claims against the Indemnity Escrow Fund for which the
Representative does not object, or upon the expiration of such thirty (30) day calendar day period,
the Escrow Agent shall promptly release from the Indemnity Escrow Fund and deliver to any Parent
Indemnified Party that has previously delivered the Claim Certificate only an amount of cash and
Parent Common Stock equal to any item(s) and amount(s) that the Representative has not objected to,
or is deemed to have accepted pursuant to this Section 8.5(b).

          (c) In the event that the Representative (or, if such indemnification claim is made
directly against a Company Stockholder, such Company Stockholder), or Parent, as applicable, shall
object, pursuant to Section 8.5(b) hereof, to any item(s) or amount(s) set forth in any Claim
Certificate, the Representative (or, if such indemnification claim is made directly against a
Company Stockholder, such Company Stockholder) and the Indemnified Party shall attempt in good
faith to agree upon the rights of the respective parties with respect to each of such claims. If
the Representative (or, if such indemnification claim is made directly against a Company
Stockholder, such Company Stockholder), or Parent, as applicable, and the Indemnified Party should
so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties
and, in the case of a claim against the Indemnity Escrow Fund, shall be furnished to the Escrow
Agent. The Escrow Agent shall be entitled to rely on any such memorandum and make distributions
from the Indemnity Escrow Fund in accordance with the terms hereof.

          (d) If no such agreement can be reached after good faith negotiation and prior to
thirty (30) calendar days after delivery of an Objection Notice, either the Representative (or, if
such indemnification claim is made directly against a Company Stockholder, such Company
Stockholder) or Parent may demand arbitration of the matter unless the amount of the Loss that is
at issue is the subject of a pending litigation with a third party, in which event arbitration
shall not be commenced until such amount is ascertained or both parties agree to arbitration, and
in either such event the matter shall be settled by arbitration conducted by one arbitrator
mutually agreeable to the Representative (or, if such indemnification claim is made directly
against a Company Stockholder, such Company Stockholder) and Parent. In the event that, within
thirty (30) calendar days after submission of any dispute to arbitration, the Representative (or,
if such indemnification claim is made directly against a Company Stockholder, such Company
Stockholder) and Parent cannot mutually agree on one arbitrator, then, within fifteen (15) calendar
days after the end of such thirty (30) calendar-day period, the Representative (or, if such
indemnification claim is made directly against a Company Stockholder, such Company Stockholder) and
Parent shall each select one (1) arbitrator. The two (2) arbitrators so selected shall select a
third arbitrator, who shall have relevant industry experience, to conduct the arbitration.

          (e) Any such arbitration shall be held in Santa Clara County, California, under the
rules then in effect of the American Arbitration Association. The arbitrator(s) shall determine
how all expenses relating to the arbitration shall be paid, including the respective expenses of
each party, the fees of each arbitrator and the administrative fee of the American Arbitration
Association. The arbitrator or arbitrators, as the case may be, shall set a limited time period
and establish procedures designed to reduce the cost and time for discovery while allowing the
parties an opportunity, adequate in the sole judgment of the arbitrator, to discover relevant
information from the opposing parties about the subject matter of the dispute. The arbitrator
shall rule upon motions to compel or limit discovery and shall have the authority to impose
sanctions, including attorneys’
fees and costs, to the same extent as a competent court of law or equity, should the
arbitrator determine that

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discovery was sought without substantial justification or that discovery
was refused or objected to without substantial justification. The decision of the arbitrator as to
the validity and amount of any claim in such Claim Certificate shall be final, binding, and
conclusive upon Parent, the Representative, the Company Indemnifying Parties, the Parent
Indemnifying Parties, the Company Indemnified Parties and the Parent Indemnified Parties. Such
decision shall be written and shall be supported by written findings of fact and conclusions which
shall set forth the award, judgment, decree or order awarded by the arbitrator. With respect to
claims against the Indemnity Escrow Fund, the Escrow Agent shall be entitled to rely on, and make
distributions from the Indemnity Escrow Fund in accordance with, the terms of such award, judgment,
decree or order as applicable. Within fifteen (15) calendar days of a decision of the arbitrator
requiring payment by one (1) party to another, such party shall make the payment to such other
party, including any distributions out of the Indemnity Escrow Fund as applicable.

          (f) Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction.

          (g) The foregoing arbitration provisions shall apply to any dispute among the
Representative, Parent, any Indemnifying Party or Parties (as a single group, if applicable) and/or
the Indemnified Parties under this Article VIII.

     8.6 Third-Party Claims. In the event that a Parent Indemnified Party becomes aware of a third
party Claim (a “Third Party Claim”) which such Parent Indemnified Party reasonably believes may
result in an indemnification claim pursuant to this Article VIII, such Parent Indemnified Party
shall notify the Representative (or, in the event indemnification is being sought hereunder
directly from a Company Stockholder, such Company Stockholder) of such claim pursuant to the
procedures set forth in Section 8.5, and the Representative shall be entitled on behalf of the
Company Indemnifying Parties (or, in the event indemnification is being sought hereunder directly
from a Company Stockholder, such Company Stockholder shall be entitled), at their expense, to
participate in, but not to determine or conduct, the defense of such Third Party Claim, and shall
have the right to receive copies of all pleadings, notices, filings, documents and other
correspondences with respect to such Third Party Claim (except to the extent outside counsel to the
Parent Indemnified Party reasonably determines that the disclosure of such correspondences could
jeopardize the privileged nature of any such documents). The Parent Indemnified Party shall have
the right in its sole discretion to conduct the defense of, and to settle, any such Third Party
Claim; provided, however, that the Parent Indemnified Party shall consult in good faith with the
Representative with respect to the defense of any such Third Party Claim; provided, further, that
except with the consent of the Representative (or, in the event indemnification is being sought
hereunder directly from a Company Stockholder, such Company Stockholder), no settlement of any such
Third Party Claim with third party claimants shall be determinative of the amount of Losses
relating to such matter nor shall it affect the Representative’s power and authority to object with
respect to such Third Party Claim pursuant to Section 8.5. If there is a Third Party Claim that,
if adversely determined would give rise to a right of recovery for Losses hereunder, then any
amounts paid, sustained, suffered or incurred by the Parent Indemnified Parties in defense of such
Third Party Claim, regardless of the outcome of such claim, shall be deemed Losses hereunder. In
the event that the Representative (or, if such indemnification claim is made directly against a
Company Stockholder, such Company Stockholder) has consented to any such settlement with respect to
an indemnification claim under Section 8.2(a), the Company Stockholders shall not have any power or
authority to object under any provision of this Article VIII to the amount of any Third Party Claim
by Parent against the Indemnity Escrow Fund, or against the Company Stockholders directly, as the
case may be, with respect to such settlement.

     8.7 Escrow Arrangements.

          (a) Escrow Fund. By virtue of this Agreement and as security for the Indemnified
Parties under Section 8.2(a), at the Effective Time, Parent shall deposit with the Escrow Agent the
Escrow Amount

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in accordance with Section 2.10(a), such deposit of the Escrow Amount to constitute
an escrow fund to be governed by the terms set forth in the Escrow Agreement.

          (b) Fees. All fees of the Escrow Agent for performance of its duties under the
Escrow Agreement (the “Escrow Expenses”) shall be paid by Parent and the Company Stockholders in
accordance with the standard fee schedule of the Escrow Agent as set forth in the Escrow Agreement.

          (c) Successor Escrow Agents. Any corporation into which the Escrow Agent in its
individual capacity may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the Escrow Agent in its
individual capacity shall be a party, or any corporation to which substantially all the corporate
trust business of the Escrow Agent in its individual capacity may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.

          (d) The parties hereto agree that Parent is the owner of any cash in the Indemnity
Escrow Fund for Tax purposes, and that all interest on or other taxable income, if any, earned from
the investment of such cash pursuant to this Agreement shall be treated for Tax purposes as earned
by Parent. Within ten (10) days after the end of each fiscal quarter five percent (5%) of such
interest or other income earned during such quarter will be distributed to Parent.

          (e) Except under the circumstances described in Section 2.1(c), the parties hereto
agree that the Company Stockholders are the owners of Parent Common Stock in the Indemnity Escrow
Fund for Tax purposes, and, with respect to such Parent Common Stock, shall be entitled to exercise
applicable voting rights and be entitled to any cash dividends paid or accrued.

          (f) The parties hereto agree that the Company Stockholders are the owners of the
Representative Escrow Fund, and that all interest on or other taxable income, if any, earned from
the investment of the Representative Escrow Amount pursuant to this Agreement shall be treated for
Tax purposes as earned by the Company Stockholders.

     8.8 Representative.

          (a) By virtue of the approval of the First Step Merger, this Agreement and the
transactions contemplated hereby by the Company Stockholders, and by the receiving the benefits of
the First Step Merger, including the right to receive the consideration payable in connection with
the First Step Merger, each of the Company Stockholders shall be deemed to have agreed, and hereby
agrees, to appoint Shareholder Representative Services LLC as its agent and attorney-in-fact, as
the Representative for and on behalf of the Company Stockholders to (i) give and receive notices
and communications, (ii) authorize payment to any Indemnified Party from the Indemnity Escrow Fund
in satisfaction of claims by such Indemnified Party pursuant to Section 8.2(a), (iii) object to
such payments, (iv) agree to, negotiate, enter into settlements and compromises of, and demand
arbitration and comply with orders of courts and awards of arbitrators with respect to such claims,
(v) assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply
with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified
Party against any Company Stockholder or by any such Company Stockholder against any Indemnified
Party or any dispute between any Indemnified Party and any such Company Stockholder, in each case
relating to this Agreement, the Escrow Agreement or the transactions contemplated hereby or
thereby, (vi) authorize the release or delivery to the Representative of amounts from the
Representative Escrow Fund
in satisfaction or payment of any Representative Expenses (as defined in Section 8.8(b)
below), and (vii) to take all other actions that are either (A) necessary or appropriate in the
judgment of the Representative for the accomplishment of the foregoing, including taking such
action as necessary to transfer any shares of Parent Common Stock held in the Indemnity Escrow Fund
to any Indemnified Party or other Person as required

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under this Agreement or the Escrow Agreement,
or (B) specifically mandated by the terms of this Agreement or the Escrow Agreement. The identity
of the Representative may be changed by the Company Stockholders from time to time upon not less
than thirty (30) days prior written notice to Parent; provided, however, that the Representative
may not be removed unless holders of at least a majority of the interest of the Indemnity Escrow
Fund agrees in writing to such removal and to the identity of the substituted agent.
Notwithstanding the foregoing, if the Representative shall die, be removed, become disabled, resign
or otherwise be unable to fulfill its responsibilities hereunder, a vacancy in the position of
Representative may be filled by the holders of a majority in interest of the Indemnity Escrow Fund.
Notices or communications to or from the Representative shall constitute notice to or from the
Company Stockholders. A decision, act, consent or instruction of the Representative, including an
amendment, extension or waiver of this Agreement pursuant to Section 9.4 and Section 9.5 hereof,
shall constitute a decision of the Company Stockholders and shall be final, binding and conclusive
upon the Company Stockholders; and each of the Escrow Agent and Parent may rely upon any such
decision, act, consent or instruction of the Representative as being the decision, act, consent or
instruction of the Company Stockholders. Each of the Escrow Agent and Parent is hereby relieved
from any liability to any person for any acts done by them in accordance with such decision, act,
consent or instruction of the Representative. Each Company Stockholder hereby agrees to receive
correspondence from the Representative, including in electronic form.

          (b) The Representative shall not be liable for any act done or omitted hereunder as
Representative while acting in good faith and in the exercise of reasonable judgment. Any act done
or omitted pursuant to the advice of counsel shall be conclusive evidence that the Representative
acted in good faith and in the exercise of reasonable judgment. The Company Stockholders shall
indemnify the Representative and hold the Representative harmless against any loss, liability or
expense incurred without gross negligence or bad faith on the part of the Representative and
arising out of or in connection with the acceptance or administration of the Representative’s
duties hereunder, including the reasonable fees and expenses of any legal counsel retained by the
Representative, and any fees and expenses incurred by the Representative in connection with the
performance of his duties under this Agreement or the Escrow Agreement (“Representative Expenses”).
If not paid directly by the Company Stockholders, any Representative Expenses may be (i) withdrawn
by the Representative from the Representative Escrow Fund, or (ii) following the Expiration Date
and the satisfaction of all claims made by Indemnified Parties for Losses, recovered from the
Escrow Fund prior to any distribution to the Company Stockholders; provided that prior to any such
distribution pursuant to clause (ii) of this sentence, the Representative shall deliver to the
Escrow Agent a certificate setting forth the Representative Expenses actually incurred and not
previously satisfied from the Representative Escrow Fund; provided, further, that while this
section allows the Representative to be paid from the Representative Escrow Fund, it does not
relieve the Company Stockholders from their obligation to promptly pay such losses, liabilities or
expenses, nor does it prevent the Representative from seeking any remedies available to it at law
or otherwise.

          (c) The Company shall deliver to the Representative a copy of (i) the Information
Statement; (ii) the Spreadsheet; and (iii) the Company’s Closing Working Capital Statement.

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER

     9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, by action taken
by the terminating party or parties (upon the authorization of such party’s board of directors),
and except as provided below, whether before or after receipt of Required Stockholder Approval:

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

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          (b) by either the Company or Parent, if the First Step Merger shall not have been
consummated by September 30, 2010; provided, however, that if the Closing shall not have occurred
by September 30, 2010, but on such date, all of the conditions to Closing set forth in Article VII
have been satisfied or waived in writing (except those conditions that by their nature are only to
be satisfied as of the Closing) other than the condition set forth in Section 7.1(c), then neither
party shall be permitted to terminate the Agreement pursuant to this Section 9.1(b) until December
31, 2010, (such applicable date, the “End Date”); provided, further, that the right to terminate
this Agreement under this Section 9.1(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 First Step Merger to
occur on or before such date;

          (c) by either the Company or Parent, if any requirement of Law makes the
consummation of the Merger illegal, or if a Governmental Entity of competent jurisdiction 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 Merger, which order, decree, ruling or other action is final and nonappealable;
provided, however, that the right to terminate this Agreement under this Section 9.1(c) shall not
be available to any party whose action or failure to act has been a principal cause of or resulted
in such Legal Requirement or action;

          (d) by the Parent if the Required Stockholder Approval is not obtained within five
(5) Business Days after the receipt of the California Permit (or, if the Company issues an Election
Notice in accordance with the terms of Section 6.1(c) hereof, the date that a registration
statement on Form S-4 covering the shares of Parent Common Stock to be issued pursuant to this
agreement is declared effective by the SEC);

          (e) by Parent (at any time prior to the time the Required Stockholder Approval has
been obtained) if a Triggering Event with respect to the Company has occurred or a material breach
of Section 6.2 of this Agreement shall have occurred;

          (f) by the Company, upon a breach of any representation, warranty, covenant or
agreement on the part of Parent set forth in this Agreement, or if any representation or warranty
of Parent shall have become untrue, in either case such that the conditions set forth in Section
7.3(a) 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 Parent’s representations
and warranties or breach by Parent is curable by Parent prior to the End Date through the exercise
of reasonable efforts, then the Company may not terminate this Agreement under this Section 9.1(f)
prior to thirty (30) days following the receipt of written notice from the Company to Parent of
such breach, provided that Parent continues to exercise commercially reasonable efforts to cure
such breach through such thirty (30) day period (it being understood that the Company may not
terminate this Agreement pursuant to this Section 9.1(f) if it shall have materially breached this
Agreement or if such breach by Parent is cured within such thirty (30) day period);

          (g) by Parent, upon a breach of any representation, warranty, covenant or agreement
on the part of the Company 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
7.2(a) 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 the Company’s representations and warranties or breach by
the Company is curable by the Company prior to the End Date through the exercise of reasonable
efforts, then Parent may not terminate this Agreement under this Section 9.1(g) prior to thirty
(30) days following the receipt of written notice from Parent to the Company of such breach,
provided that the Company continues to exercise commercially reasonable efforts to cure such breach
through such thirty (30) day period (it being understood that Parent may not terminate this
Agreement pursuant to this Section 9.1(g) if it shall have materially breached this Agreement or if
such breach by the Company is cured within such thirty (30) day period); and

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          (h) by the Company, in connection with a Change of Recommendation made in accordance
with Section 6.2(d) in which the Company’s board of directors shall have determined to accept or
enter into a transaction related to a Superior Proposal that was the subject of such Change in
Recommendation; provided, however, that the Company shall not terminate this Agreement pursuant to
this Section 9.1(h), and any purported termination pursuant to this Section 9.1(h) shall be void
and of no force or effect, unless in advance of or concurrently with such termination the Company
pays the Termination Fee in the manner provided for in Section 9.3(b).

     For the purposes of this Agreement, a “Triggering Event” shall be deemed to have occurred if:
(i) the Company’s board of directors or any committee thereof shall have effected a Change of
Recommendation; (ii) the Company shall have failed to include in the Information Statement
delivered to the stockholders of the Company, the recommendation of its board of directors in favor
of the adoption of this Agreement; (iii) the Company’s board of directors or any committee thereof
shall have approved or recommended, or the Company shall have entered into any letter of intent or
other Contract regarding, any Alternative Transaction Proposal, or (iv) the Company shall have
entered into any letter of intent or similar document or any Contract, plan or arrangement
accepting any Alternative Transaction Proposal.

     9.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under, and in
accordance with, Section 9.1 above will be effective immediately upon the delivery of a written
notice of the terminating party to the other party hereto. In the event of the termination of this
Agreement as provided in Section 9.1, this Agreement shall be of no further force or effect and
there shall be no liability or obligation on the part of Parent, the Company, or their respective
officers, directors or stockholders, except (i) as set forth in Section 6.7 (Confidentiality), this
Section 9.2, Section 9.3 (Fees) and Article X (General Provisions), each of which shall survive the
termination of this Agreement and (ii) nothing herein shall relieve any party from liability for
any fraud or willful breach of any representation, warranty, covenant or other agreement contained
in 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.

     9.3 Fees.

          (a) General. Except as set forth in this Section 9.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such expenses whether or not the First Step Merger is consummated; provided,
however, that Parent and the Company shall share equally the filing fee for the Notification and
Report Forms filed with the FTC and DOJ under the HSR Act, and all premerger notification and
reports forms under similar applicable laws of other jurisdictions.

          (b) Company Payment.

               (i) Payment. In the event that this Agreement is terminated by Parent or the Company, as
applicable, pursuant to Sections 9.1(b), (d), (e), (g) or (h), the Company shall promptly, but in
no event later than two (2) Business Days after the date of such termination (except in the case of
a termination pursuant to Section 9.1(h), in which case the Termination Fee must be paid
concurrently with such termination), pay Parent the Termination Fee by wire transfer to an account
designated by Parent in immediately available funds; provided, that in the case of termination
under Sections 9.1(b), 9.1(d) or 9.1(g): (x) such payment shall be made only if following the date
hereof and prior to the termination of this Agreement, there has been disclosure publicly or to any
member of the board of directors or any officer of the Company of an Alternative Transaction
Proposal with respect to the Company and within twelve (12) months following the termination of
this Agreement an Acquisition of the Company is consummated or the Company enters into a Contract
providing for, or a letter of intent, memorandum of understanding, term sheet or similar

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arrangement contemplating, an Acquisition of the Company, in each case, with the Person making such
Alternative Transaction Proposal, and (y) such payment shall be made concurrently with the
consummation of such Acquisition of the Company or the entry into such Contract or letter of intent
or similar arrangement by the Company, as applicable, in each case, with the Person making such
Alternative Transaction Proposal.

               (ii) The Company acknowledges that the agreements contained in this Section 9.3 are an
integral part of the transactions contemplated by this Agreement, that without these agreements
Parent would not have entered into this Agreement, and that any amounts payable pursuant to this
Section 9.3 do not constitute a penalty. Upon payment of the Termination Fee in accordance with
this Section 9.3, the Company shall have no further liability to Parent or any Merger Sub with
respect to this Agreement or the transactions contemplated hereby, except for liability for any
fraud or willful breach of any covenant or agreement contained in this Agreement. In the event
that the Company shall fail to pay the Termination Fee when due, the Company shall reimburse Parent
for all costs and expenses incurred by Parent or Merger Subs (including reasonable fees and
expenses of counsel) in connection with the collection under and enforcement of this Section 9.3,
together with interest on the amounts set forth in this Section 9.3 at the prime rate of Citibank,
N.A., in effect on the date such payment was required to be made. For the avoidance of doubt, in
no event will more than one termination fee be owed by the Company to Parent.

     9.4 Amendment. This Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of the party against whom enforcement is sought. For
purposes of this Section 9.4, the Company Securityholders agree that any amendment of this
Agreement signed by the Representative shall be binding upon and effective against the Company
Securityholders whether or not they have signed such amendment.

     9.5 Extension; Waiver. At any time prior to the Effective Time, Parent and Merger Subs, on the
one hand, and the Company and the Representative, on the other hand, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations of the other party
hereto, (b) waive any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of
the covenants, agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. For purposes of this Section
9.5, the stockholders of the Company agree that any extension or waiver signed by the
Representative shall be binding upon and effective against all stockholders of the Company whether
or not they have signed such extension or waiver.

ARTICLE X

GENERAL PROVISIONS

     10.1 Notices. All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial messenger or courier service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment
of complete transmission) to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice or, if specifically provided for elsewhere in this
Agreement, by email); provided, however, that notices sent by mail will not be deemed given until
received:

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          (a) If to Parent, Merger Subs or the Final Surviving Entity, to:

Harmonic Inc.

549 Baltic Way

Sunnyvale, California 94089

Attention: Chief Executive Officer

                 Chief Financial Officer

Facsimile No.: (408) 542-2516

with copies (which shall not constitute notice) to:

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Attention: Jeffrey D. Saper, Esq.

                 Robert G. Day, Esq.

Facsimile No.: (650) 493-6811

          (b) If to the Company (prior to the Closing), to:

Omneon Inc.

1237 E. Arques Avenue

Sunnyvale, California 94085

Attention: Suresh Vasudevan

                   Laura Perrone

Telephone: (408) 585-5464

Facsimile: (408) 585-5097

with copies (which shall not constitute notice) to:

Fenwick & West LLP

801 California Street

Mountain View, California 94041

Attention: Mark A. Leahy, Esq.

                 Jeffrey R. Vetter, Esq.

Facsimile No.: (650) 938-5200

          (c) If to the Representative, to

Shareholder Representative Services LLC

601 Montgomery Street, Suite 2020

San Francisco, CA 94111

Attention: Managing Director

Email: deals@shareholderrep.com

Facsimile No.: (415) 962-4147

Telephone No.: (415) 367-9400

with copies (which shall not constitute notice) to:

Fenwick & West LLP

801 California Street

Mountain View, California 94041

Attention: Mark A. Leahy, Esq.

                 Jeffrey R. Vetter, Esq.

Facsimile No.: (650) 938-5200

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

     10.3 Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this
Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may
be delivered by one or more parties hereto by facsimile or similar electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At the request of any
party hereto, all parties hereto agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.

     10.4 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Company Disclosure
Schedule, the Reciprocal Confidentiality Agreement, and the documents and instruments and other
agreements among the parties hereto referenced herein 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.

     10.5 No Third Party Beneficiaries. This Agreement, the Exhibits and Schedules hereto, the Company
Disclosure Schedule, the Reciprocal Confidentiality Agreement, and the documents and instruments
and other agreements among the parties hereto referenced herein are not intended to, and shall not,
confer upon any other person any rights or remedies hereunder.

     10.6 Assignment. This Agreement, the Exhibits and Schedules hereto, the Company Disclosure
Schedule, the Reciprocal Confidentiality Agreement, and the documents and instruments and other
agreements among the parties hereto referenced herein shall not be assigned by operation of law or
otherwise, except that Parent may
assign its rights and delegate its obligations hereunder to its Affiliates provided that
Parent remains ultimately liable for all of Parent’s obligations hereunder.

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

     10.8 Other Remedies. Any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the exercise of any
other remedy.

     10.9 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws
of the State of Delaware, regardless of the Laws that might otherwise govern under applicable
principles of conflicts of laws thereof.

     10.10 Consent to Jurisdiction. Subject to the terms of Section 8.5 hereof, each of the parties
hereto irrevocably consents to the exclusive jurisdiction and venue of any court within Santa Clara
County, State of California, in connection with any matter based upon or arising out of this
Agreement or the matters

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contemplated herein, agrees that process may be served upon them in any
manner authorized by the laws of the State of California for such persons and waives and covenants
not to assert or plead any objection which they might otherwise have to such jurisdiction, venue
and such process. Subject to the terms of Section 8.5 hereof, each party agrees not to commence
any legal proceedings related hereto except in such courts.

     10.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

[Remainder of page intentionally left blank.]

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     IN WITNESS WHEREOF, the below parties have executed, or caused this Agreement to be executed,
as of the date first written above.

	 	 	 	 	 
	 	HARMONIC INC.

 	 
	 	By:  	/s/ Patrick Harshman
 	 
	 	 	Name:  	Patrick Harshman 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 
	 	ORINDA ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Patrick Harshman
 	 
	 	 	Name:  	Patrick Harshman 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 
	 	ORINDA ACQUISITION, LLC

 	 
	 	By:  	/s/ Patrick Harshman
 	 
	 	 	Name:  	Patrick Harshman 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 

(AGREEMENT AND PLAN OF REORGANIZATION)

 

 

     IN WITNESS WHEREOF, the below party has executed, or caused this Agreement to be executed, as
of the date first written above.

	 	 	 	 	 
	 	OMNEON INC.

 	 
	 	By:  	/s/ Suresh Vasudevan
 	 
	 	 	Name:  	Suresh Vasudevan 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 

(AGREEMENT AND PLAN OF REORGANIZATION)

 

 

     IN WITNESS WHEREOF, the below party has executed, or caused this Agreement to be executed, as
of the date first written above.

	 	 	 	 	 
	 	SHAREHOLDER REPRESENTATIVE SERVICES, LLC, as
Representative

 	 
	 	By:  	/s/ Paul Koenig
 	 
	 	 	Name:  	Paul Koenig  	 
	 	 	Title:  	Manager 	 
	 

(AGREEMENT AND PLAN OF REORGANIZATION)

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