Document:

Q1 2006 Exhibit 10.1

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

OMRON MANAGEMENT CENTER OF AMERICA, INC.

SCIENTIFIC TECHNOLOGY INCORPORATED

AND

SCIENTIFIC TECHNOLOGIES INCORPORATED

Dated as of April 24, 2006

TABLE OF CONTENTS

	
 	
Page

	
Article I THE MERGER	
2
	
      1.1   The Merger	
2
	
      1.2   Effective Time; Closing	
2
	
      1.3   Effect of the Merger	
2
	
      1.4   Articles of Incorporation and Bylaws	
2
	
      1.5   Directors and Officers	
3
	
      1.6   Effect on Capital Stock	
3
	
      1.7   Dissenting Shares.	
7
	
      1.8   Surrender of Certificates	
7
	
      1.9   No Further Ownership Rights in Company Common Stock or Options	
9
	
      1.10  Lost, Stolen or Destroyed Certificates or Options	
9
	
      1.11  Further Action	
9
	
Article II REPRESENTATIONS AND WARRANTIES OF THE COMPANY	
10
	
      2.1   Organization; Standing and Power; Charter Documents; Subsidiaries	
10
	
      2.2   Capital Structure	
11
	
      2.3   Authority; No Conflict; Necessary Consents	
12
	
      2.4   SEC Filings; Financial Statements; Internal Controls	
14
	
      2.5   Absence of Certain Changes or Events	
15
	
      2.6   Taxes.	
16
	
      2.7   Title to Properties; Customer Information.	
17
	
      2.8   Intellectual Property	
18
	
      2.9   Governmental Authorizations	
23
	
      2.10   Litigation	
23
	
      2.11   Compliance with Laws	
23
	
      2.12   Environmental Matters	
24
	
      2.13   Brokers' and Finders' Fees; Fees and Expenses	
25
	
      2.14   Transactions with Affiliates	
25
	
      2.15   Employee Benefit Plans and Compensation	
26
	
      2.16   Contracts	
31
	
      2.17   Insurance	
33
	
      2.18   Export Control Laws	
33
	
      2.19   Foreign Corrupt Practices Act	
33
	
      2.20   Information Supplied	
34
	
      2.21   Board Approval	
34
	
      2.22   Fairness Opinion	
34
	
      2.23   Books and Records	
34
	
      2.24   Relationship with Key Customers and Suppliers	
34
	
      2.25   Absence of Debt	
35
	
      2.26   No Material Misstatements	
35
	
Article III REPRESENTATIONS AND WARRANTIES OF PARENT	
35
	
      3.1   Organization	
35
	
      3.2   Authority; Necessary Consents	
35
	
      3.3   Capital Resources	
36
	
      3.4   Proceedings Challenging Transactions	
36
	
      3.5   Information Supplied	
36
	
Article IV CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME	
37
	
      4.1   Conduct of Business by the Company.	
37
	
      4.2   Procedures for Requesting Parent Consent	
40
	
Article V ADDITIONAL AGREEMENTS	
40
	
      5.1   Proxy Statement	
40
	
      5.2   Meeting of Company Shareholders; Board Recommendation	
41
	
      5.3   Acquisition Proposals	
42
	
      5.4   Confidentiality; Access to Information; No Modification of Representations, Warranties or Covenants	
45
	
      5.5   Public Disclosure	
46
	
      5.6   Regulatory Filings; Reasonable Efforts	
46
	
      5.7   Notification of Certain Matters	
48
	
      5.8   Third-Party Consents	
48
	
      5.9   Equity Awards and Employee Matters	
48
	
      5.10   Indemnification.	
50
	
      5.11   Section&nbsp;16 Matters	
51
	
      5.12   FIRPTA Compliance	
51
	
      5.13   Insurance Approval	
51
	
      5.14   Estimated Expenses	
52
	
Article VI CONDITIONS TO THE MERGER	
52
	
      6.1   Conditions to the Obligations of Each Party to Effect the Merger	
52
	
      6.2   Additional Conditions to the Obligations of Parent	
53
	
      6.3   Additional Conditions to the Obligations of the Company	
54
	
Article VII TERMINATION, AMENDMENT AND WAIVER	
55
	
      7.1   Termination	
55
	
      7.2   Notice of Termination; Effect of Termination	
56
	
      7.3   Fees and Expenses	
57
	
      7.4   Amendment	
58
	
      7.5   Extension; Waiver	
58
	
Article VIII GENERAL PROVISIONS	
58
	
      8.1   Non-Survival of Representations and Warranties	
58
	
      8.2   Notices	
58
	
      8.3   Interpretation; Knowledge	
59
	
      8.4   Counterparts	
61
	
      8.5   Entire Agreement; Third-Party Beneficiaries	
61
	
      8.6   Severability	
61
	
      8.7   Other Remedies	
61
	
      8.8   Governing Law	
61
	
      8.9   Rules of Construction	
62
	
      8.10   Assignment	
62

Exhibit AHoldCo Stock Purchase Agreement

Exhibit BAP Purchase Agreement

Exhibit CThird Party Consents

Exhibit DContract Modifications

INDEX OF DEFINED TERMS

	
401(k) Plans	
5.9(c)
	
Acquisition Proposal	
5.3(g)(i)
	
Acquisition	
7.3(b)(iii)
	
Action of Divestiture	
5.6(e)
	
Agreement of Merger	
1.2
	
Agreement	
Preamble
	
Business Day	
1.2
	
Oregon Law	
Recitals
	
Certificates	
1.8(c)
	
Change of Recommendation Notice	
5.3(d)(iii)
	
Change of Recommendation	
5.3(d)
	
Closing	
1.2
	
Closing Date	
1.2
	
COBRA	
2.15(a)
	
Code	
1.8(d)
	
Company Balance Sheet	
2.4(b)
	
Company Board Approval	
2.21
	
Company Charter Documents	
2.1(b)
	
Company Common Stock	
1.6(c)(i)
	
Company Disclosure Letter	
Article II Preamble
	
Company Employee Plan	
2.15(a)
	
Company Environmental Permits	
2.12(d)
	
Company Financials	
2.4(b)
	
Company Intellectual Property	
2.8(a)
	
Company Material Contract	
2.16(a)
	
Company Options	
2.2(b)
	
Company Preferred Stock	
2.2(a)
	
Company Products	
2.8(a)
	
Company Purchase Plans	
1.6(g)
	
Company Registered Intellectual Property	
2.8(a)
	
Company Rights Agreement	
2.2(a)
	
Company Rights	
2.2(a)
	
Company SEC Reports	
2.4(a)
	
Company Stock Option Plans	
2.2(b)
	
Company Warrants	
1.6(d)
	
Company	
Preamble
	
Confidentiality Agreement	
5.4(a)
	
Contract	
2.2(d)
	
Customary Severance Practices	
2.15(h)
	
Dissenting Shares	
1.7(a)
	
DOJ	
2.3(c)
	
DOL	
2.15(a)
	
Effect	
8.3(c)
	
Effective Time	
1.2
	
Employee Agreement	
2.15(a)
	
Employee	
2.15(a)
	
End Date	
7.1(b)
	
ERISA Affiliate	
2.15(a)
	
ERISA	
2.15(a)
	
Exchange Act	
2.3(c)
	
Exchange Agent	
1.8(a)
	
Exchange Fund	
1.8(b)
	
Export Approvals	
2.18(a)
	
Fairness Opinion	
2.22
	
FCPA	
2.19
	
FTC	
2.3(c)
	
GAAP	
2.4(b)
	
Governmental Authorizations	
2.9
	
Governmental Entity	
2.3(c)
	
Hazardous Material	
2.12(b)
	
Hazardous Materials Activities	
2.12(b) 
	
HSR Act	
2.3(c)
	
Include, Includes, Including	
8.3(a)
	
Indemnified Parties	
5.10(a)
	
Intellectual Property Rights	
2.8(a)
	
Intellectual Property	
2.8(a)
	
International Employee Plan	
2.15(a)
	
IRS	
2.15(a)
	
Knowledge	
8.3(b)
	
Lease Documents	
2.7(b)
	
Leased Real Property	
2.7(a)
	
Legal Requirements	
2.2(d)
	
Liens	
2.1(c)
	
Material Adverse Effect	
8.3(c)
	
Merger Consideration	
1.6(c)(i)
	
Merger Sub Common Stock	
1.6(f)
	
Merger Sub	
Preamble
	
Merger	
1.1
	
Necessary Consents	
2.3(c)
	
Open Source	
2.8(p)
	
Option Ratio	
5.9(a)
	
Parent Common Stock	
5.1
	
Parent	
Preamble
	
PBGC	
2.15(a)
	
Pension Plan	
2.15(a)
	
Person	
8.3(d)
	
Proxy Statement	
2.20
	
PTO	
2.8(b)
	
Registered Intellectual Property	
2.8(a)
	
Returns	
2.6(b)(i)
	
Securities Acts	
2.4(a)
	
Shareholders' Meeting	
0
	
Shrink-Wrapped Code	
2.8(a)
	
Source Code	
2.8(a)
	
Subsidiary Charter Documents	
2.1(b)
	
Subsidiary	
2.1(a)
	
Superior Offer	
5.3(g)(ii)
	
Surviving Corporation	
1.1
	
Tax	
2.6(a)
	
Taxes	
2.6(a)
	
Termination Fee	
7.3(b)(i)
	
the business of	
8.3(a)
	
Trade Secrets	
2.8(a)
	
Triggering Event	
7.1
	
Voting Debt	
2.2(c)
	
WARN	
2.15(a)

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as of April 24
2006, by and among Omron Management Center of America, Inc., a Delaware corporation ("Parent"), Scientific
Technology Incorporated, a California corporation ("Holdco"), and Scientific Technologies Incorporated, an Oregon
corporation (the "Company").  

RECITALS

A.The respective Boards of Directors of Parent, Holdco and the Company have deemed it advisable and in the
best interests of their respective corporations and shareholders that Parent and the Company consummate the business combination
and other transactions provided for herein.

B.The business combination is intended to comprise, in addition to the other transactions provided for herein, three mutually
conditioned transactions, including the following: (1) the purchase by Parent of all of the outstanding shares of capital stock of Holdco
(which holds approximately 86% of the outstanding common stock of the Company) (the "Stock Purchase"),
pursuant to the terms of the Stock Purchase Agreement between Parent and the holders of all of the outstanding capital stock of
Holdco, dated as of the date hereof, in the form attached hereto as Exhibit A (the "Stock Purchase
Agreement"); (2) the sale and transfer to Automation Products Group, LLC ("AP Company") (1) the stock
of Lundahl Industries, PSI-Tronix and Applied Electro Technologies Inc., and (2), to the extent not covered by (1), the assets and
liabilities of Holdco and the Company unrelated to the Safety Products Group segment of Company's business
("SPG") (collectively, the "AP Purchase"), pursuant to that certain Purchase Agreement dated
as of April 24, 2006 (the "AP Purchase Agreement") by the Company to Automation Products Group, LLC (the
"AP Company"), in the form attached hereto as Exhibit B; and (3) the Merger (as defined in
Section 1.1) provided for herein. The AP Purchase would include, among other things, the assets and liabilities of HoldCo and
the Company solely related to Automation Products Group segment of Company's business ("APG").

C.The respective Boards of Directors of Holdco and the Company have approved, in accordance with the Chapter 60 of the
Oregon Revised Statutes ("Oregon Law") and the California Corporations Code ("California
Law"), this Agreement and the transactions contemplated hereby, including the Merger.  The Board of Directors of Parent
has approved this Agreement and the transactions contemplated hereby, including the Merger.

D.The Board of Directors of the Company has resolved to recommend to its shareholders approval and adoption of this
Agreement and approval of the Merger.

E.The shareholders of Holdco have approved and adopted this Agreement and approved the Merger.

F.Parent and the Company desire to make certain representations, warranties and agreements in connection with the Merger
and also to prescribe certain conditions to the Merger.

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

ARTICLE I 

THE MERGER

1.1   The Merger
.  At the Effective Time and subject to and upon the terms and conditions of this
Agreement and the applicable provisions of Oregon Law and California Law, Holdco shall be merged with and into the Company (the
"Merger"), the separate corporate existence of HoldCo shall cease and the Company shall continue as the
surviving corporation and as a wholly owned subsidiary of Parent.  The surviving corporation after the Merger is hereinafter sometimes
referred to as the "Surviving Corporation."

1.2   Effective Time; Closing
 .  Subject to the provisions of this Agreement, the parties hereto shall cause the Merger to be consummated by filing
a Plan of Merger consistent with this Agreement and in form and substance satisfactory to the parties hereto together with
accompanying officers' certificates with the Secretary of State of the State of Oregon in accordance with the relevant provisions of
Oregon Law (the "Plan of Merger") and filing an Agreement of Merger consistent with this Agreement and in form
and substance satisfactory to the parties hereto together with accompanying officers' certificates with the Secretary of State of the State
of California in accordance with the relevant provisions of California Law (the "Agreement of Merger") (the time of
such filings with the Secretary of State of the State of Oregon and the Secretary of State of the State of California (or such later time as
may be agreed in writing by the Company and Parent and specified in the Plan of Merger and the Agreement of Merger) being the
"Effective Time") as soon as practicable on or after the Closing Date.  The closing of the Merger (the
"Closing") shall take place at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
located at 650 Page Mill Road, Palo Alto, California, at a time and date to be specified by the parties, which shall be no later than the
second Business Day after the satisfaction or waiver of the conditions set forth in Article VI (other than those that by their
terms are to be satisfied or waived at the Closing), or at such other time, date and location as the parties hereto agree in writing.  The
date on which the Closing occurs is referred to herein as the "Closing Date."  "Business Day"
shall mean each day that is not a Saturday, Sunday or other day on which banking institutions located in San Francisco, CA, are
authorized or obligated by law or executive order to close.

1.3   Effect of the Merger
 .  At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions
of Oregon Law and California Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of Company and Holdco shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Company and Holdco shall become the debts, liabilities and duties of the Surviving Corporation.  

1.4   Articles of Incorporation and Bylaws
 .  Unless otherwise determined by Parent prior to the Effective Time, at the Effective Time, the Articles of
Incorporation of the Company shall be amended and restated in their entirety to be as set forth in the Plan of Merger, until thereafter
amended in accordance with Oregon Law and as provided in such Articles of Incorporation;
provided, however, that at the Effective
Time, the Articles of Incorporation shall be amended so as to comply with Section 5.10(a).   Unless otherwise
determined by Parent prior to the Effective Time, at the Effective Time, the Bylaws of the Company shall be amended and restated in
their entirety to be as set forth in the Plan of Merger, until thereafter amended in accordance with Oregon Law and as provided in such
Bylaws; provided, however, that at the Effective Time, the Bylaws shall be amended so as to comply with
Section 5.10(a).

1.5   Directors and Officers
 .  Unless otherwise determined by Parent prior to the Effective Time, the initial directors of the Surviving Corporation
shall be as set forth in the Plan of Merger, until their respective successors are duly elected or appointed and qualified.  Unless
otherwise determined by Parent prior to the Effective Time, the initial officers of the Surviving Corporation shall be as set forth in the
Plan of Merger, until their respective successors are duly appointed.  In addition, unless otherwise determined by Parent prior to the
Effective Time, Parent, and the Company shall cause the directors and officers of the Surviving Corporation immediately following the
Effective Time to be the directors and officers, respectively of each of the Company's Subsidiaries  immediately after the Effective Time,
each to hold office as a director of each such Subsidiary in accordance with the provisions of the laws of the respective jurisdiction of
organization and the respective bylaws or equivalent organizational documents of each such Subsidiary.

1.6   Effect on Capital Stock
 .  

	Definitions.

	"Adjustment Balance Sheet" shall mean the estimated unaudited consolidated balance sheet of the
Company delivered to Parent at least five (5) Business Days prior to the mailing of the Proxy Statement to the Company's shareholders
as provided in Section 5.1 and certified as a true and correct estimate by the Company's Chief Financial Officer as of the
Adjustment Date, that has been prepared in accordance with GAAP (except that the Adjustment Balance Sheet may omit footnotes and
other presentation items that may be required by GAAP) consistently applied on a basis consistent with the Company Financials and
that fairly presents an estimate by the Company in good faith based on reasonable assumptions of the balance sheet of the Company
as of the Adjustment Date.  
	"Adjustment Date" shall mean the last day of the last calendar month ending at least fifteen (15)
Business Days prior to the date of mailing of the Proxy Statement to the Company's shareholders as provided in Section 5.1.
	"Adjustment Date Cash" shall mean the
amount of cash held by the Company as of the Adjustment Date, as reflected on the Adjustment Balance Sheet, less the
amount of any Net APG Cash that has been received in connection with the AP Purchase prior to the Adjustment Date.
	"Adjustment Date Options" shall mean the Company Options which are outstanding as of the
Adjustment Date.
	 "Adjusted Working Capital" shall mean, as of a particular date, the adjusted working capital of the
Company, assuming for this purpose only that the Automation Products Group business is not included in the Company's financial
position and operating results, all as determined in accordance with GAAP and on the same basis as, and by applying the same
accounting principles, policies, and practices that were used in preparing the Company Balance Sheet as defined in Section 2.4 (b),
calculated consistently with the computation of non-cash working capital set forth on Schedule 1.6(a)(4). 
	"Aggregate Exercise Price" shall mean the aggregate Exercise Price, on the basis of a full cash
exercise by holder of all Adjustment Date Options which have an exercise price per share of Company Common Stock which may be
purchased pursuant thereto which is less than the Per Share Amount; provided that the exercise price of any Company Option
which is exercised at such a time that the payment of the Exercise Price therefor is reflected in the Adjustment Balance Sheet shall not
be included in the Aggregate Exercise Price. 
	  "Balance Sheet Adjustment Amount" shall mean
(A) the Company's Adjusted Working Capital as of the Adjustment Date, minus (B) the Company's Adjusted Working
Capital as of December 31, 2005. 
	"Business Day[s]" 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.
	"Company Rights" shall mean Company Options and any other rights to purchase Company Common
Stock (whether by exercise, conversion or exchange), other than pursuant to the Company Purchase Plan.
	"Estimated Transaction Costs" shall have the meaning set forth in Section 5.14.
	"Exercise Price" shall mean, with respect to a Company Right, the consideration that the holder thereof
must pay in order to exercise, convert or exchange such Company Right and acquire the shares of Company Common Stock that may
be acquired pursuant thereto.
	"In-the-Money Rights" shall mean all Company Rights the Exercise Price per share of which is less
than or equal to the Per Share Amount.
	"Net APG Cash"
shall mean the amount of cash purchase price paid (or to be paid) to the Company pursuant to the AP Purchase Agreement in
connection with the transactions contemplated therein, less the amount of tax owed by the Company in connection with the
consummation of the transactions contemplated in the AP Purchase Agreement, with such tax calculated in accordance with the
principles set forth in Schedule 1.6(a)(12). 
	"Per Share Amount" shall mean the quotient of the Total Consideration divided by the Total
Outstanding Shares, rounded up to the nearest whole penny.
	"Total Consideration" shall mean an amount equal to the sum of
(a) USD $94,000,000, plus (b) Adjustment Date Cash, plus (c) Net APG Cash, plus (d) income tax receivable (if any) as of the
Adjustment Date, plus (e) Aggregate Exercise Price, minus (f) Estimated Transaction Costs, plus (g) the Balance Sheet Adjustment
Amount (which for the avoidance of doubt may be positive or negative).
	"Total Outstanding Shares" shall mean, the sum of (a)
as of the Adjustment Date, the aggregate number of shares of Company
Common Stock issued and outstanding, plus (b) the maximum aggregate number of shares issuable upon a full cash exercise by
holder, exchange or conversion of all In-the-Money Rights which are outstanding as of the Adjustment Date and that are at that time or
will be at or prior to the Effective Time vested and convertible into, exercisable for or exchangeable for, shares of Company Capital
Stock, on an as converted to, exercised for and exchanged for Company Common Stock basis; provided that for purposes of
determining the number of shares of Company Common Stock issuable under the Company Purchase Plans as of the Adjustment Date
for purposes of this definition, it shall be assumed that employee payroll deductions under the Company Purchase Plans shall continue,
at the levels in affect as of the date hereof, through June 30, 2006 (even though that date may be before or after the Adjustment Date).

	"Transaction Costs" shall mean the third party costs and expenses incurred by the Company or HoldCo
with respect to the transactions contemplated herein (including, without limitation, attorney's fees, auditor's fees and the TSG Fee,
including estimated transaction costs) all as reflected on the Statement of Expenses delivered pursuant to Section 5.14;
provided that Transaction Costs shall not include expenses incurred under Section 5.10.
	"TSG Fee" shall mean the fee owed to The Spartan Group by the Company in connection with the
transactions contemplated herein.

	Adjustment Balance Sheet.  The Company shall prepare and deliver the Closing Date Balance Sheet not less than
five (5) Business Days prior to the mailing of the Proxy Statement to the Company's shareholders as provided in Section 5.1
and shall cause the Closing Date Balance Sheet to be certified as true and correct in all material respects in form acceptable to Parent
by the Company's Chief Financial Officer as of the Adjustment Date.

	Company Common Stock.  Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Holdco, the Company or the holders of any shares of capital stock of the
Company, the following shall occur:

	Each share of the Common Stock, no par value, of the Company ("Company Common
Stock") issued and outstanding immediately prior to the Effective Time, other than any shares of Company Common Stock to
be canceled pursuant to Section 1.6(e) or Dissenting Shares as provided in Section 1.7, will be canceled
and extinguished and automatically converted into the right to receive an amount of cash equal to the Per Share Amount, without
interest (such amount of cash hereinafter referred to as the "Merger Consideration") upon surrender of the
certificate representing such share of Company Common Stock in the manner provided in Section 1.8 (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 1.10). 

	Company Options.  At the Effective Time, all Company
Options outstanding under each Company Stock Option Plan shall not be assumed by Parent, and shall have their vesting accelerated
by the Company.  At the Effective Time, each Company Option held by any person that is unexpired, unexercised and outstanding
immediately prior to the Effective Time shall, on the terms and subject to the conditions set forth in this Agreement, terminate in its
entirety at the Effective Time, and the holder of each Company Option shall be entitled to receive therefor an amount of cash (rounded
down to the nearest whole cent) equal to the product of (i) the number of shares of Company Common Stock as to which such
Company Option was vested and exercisable immediately prior to the Effective Time (giving effect to any acceleration of vesting
resulting from the Merger), and (ii) the Per Share Amount  minus the per share exercise price of such Company Option immediately
prior to the Effective Time (the "Option Cash-Out Amount"); provided, however, that if the Per Share Amount does
not exceed the exercise price of such Option immediately prior to the Effective Time, the Option Cash-Out Amount for such Option shall
be zero; provided further, that nothing in this Section 1.6(d) shall prohibit the holder of an Option from exercising such Option
prior to the Effective Time in accordance with its terms. Prior to the Effective Time, the Company shall timely deliver any notices to
holders of Company Options as may be required by the terms of the Stock Option Plans.  Any materials to be submitted to the holders
of such Options shall be subject to review and approval by Parent. 
	Cancellation of Treasury and Parent Owned Stock.  Each share of Company
Common Stock held by Company or Parent or any direct or indirect wholly-owned Subsidiary of the Company or of Parent immediately
prior to the Effective Time shall be canceled and extinguished without any conversion thereof.
	Capital Stock of Holdco.  Each share of common stock, no par value, of Holdco (the
"Holdco Common Stock") issued and outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of common stock, no par value, of the Surviving Corporation.  Each certificate
evidencing ownership of shares of Holdco Common Stock shall evidence ownership of such shares of capital stock of the Surviving
Corporation.
	Employee Stock Purchase Plans.  Rights outstanding under the Company's 1997
Employee Stock Purchase Plan and any other employee stock purchase plan of the Company (collectively, the "Company
Purchase Plans") shall be treated as set forth in Section 5.9(b). 

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

1.7   Dissenting Shares. 

	Notwithstanding any other provisions of this Agreement to the contrary, any shares of Company
Common Stock held by a holder who has not effectively withdrawn or lost such holder's dissenters' rights under Chapter 13 of
the California Corporations Code (such code, "California Law") or of Oregon Law (collectively, the "Dissenting Shares"), shall not be converted into or represent a right to receive the
applicable consideration for Company Common Stock set forth in Section 1.6, but the holder thereof shall only be
entitled to such rights as are provided by Oregon Law and California Law. 
	Notwithstanding the provisions of Section 1.7(a), if any holder of Dissenting Shares shall effectively withdraw or
lose (through failure to perfect or otherwise) such holder's dissenters' rights under Oregon Law and California Law, then, as of the later
of the Effective Time and the occurrence of such event, such holder's shares shall automatically be converted into and represent only
the right to receive the consideration for Company Common Stock, as applicable, set forth in Section 1.6, without
interest thereon, upon surrender of the certificate representing such shares.
	The Company shall give Parent (i) prompt notice of any written demand for appraisal received
by the Company pursuant to the applicable provisions of Oregon Law or California Law, and (ii) the opportunity to participate in
all negotiations and proceedings with respect to such demands.  The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any such demands or offer to settle or settle any such demands.  Any written communication
to be made by the Company to any holder of Company Common Stock with respect to such demands shall be submitted to Parent in
advance and shall not be presented to any holder of Company Common Stock prior to the Company receiving Parent's consent (which
consent shall not be unreasonably withheld).  

1.8   
Surrender of Certificates
 .  

	Exchange Agent.  Prior to the Effective Time, Parent shall select an institution
reasonably acceptable to the Company to act as the exchange agent (the "Exchange Agent") for the
Merger.
	Parent to Provide Cash.  Prior to the Effective Time, Parent shall enter into an
agreement with the Exchange Agent that shall provide that Parent shall, within five Business Days following the Effective Time, make
available to the Exchange Agent for exchange in accordance with this Article I, the Merger Consideration payable pursuant to
Section 1.6(c)(i) and Section 1.6(d) in exchange for outstanding shares of Company Common Stock
and Company Options. Any cash deposited with the Exchange Agent shall hereinafter be referred to as the "Exchange
Fund."
	Exchange Procedures.  As soon as practicable following the Effective Time (but in
no event later than five (5) business days following the Effective Time), Parent shall cause the Exchange Agent to mail to each holder
of record (as of the Effective Time) of a certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock whose shares were converted into the right to receive the
Merger Consideration pursuant to Section 1.6(c)(i) or Company Options whose Options were converted into the
right to receive cash as provided in Section 1.6(d):  (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates or Options shall pass, only upon delivery of the Certificates or Options to
the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates or Options in exchange for cash constituting the
Merger Consideration.  Upon surrender of Certificates or Options for cancellation to the Exchange Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto and such other documents as may reasonably be required by the Exchange Agent, the holder
of record of such Certificates or Options shall be entitled to receive in exchange therefor the cash as provided in Section
1.6, and the Certificates or Options so surrendered shall forthwith be canceled.  Subject to the terms and conditions of this
Article I, Parent shall cause the Exchange Agent to pay the Merger Consideration as provided in Section 1.6. Parent shall not
take any action that would prevent the Exchange Agent from making payment of the Merger Consideration in accordance with its
customary procedures.  In the event of a transfer of ownership of Company Common Stock that is not registered in the stock transfer
books of the Company, payment of the Merger Consideration in exchange therefore may be made to a person other than the person in
whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for
transfer, and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person
other than the registered holder of such Certificate or establish to the reasonable satisfaction of the Surviving Corporation that such tax
has been paid or is not applicable. Until so surrendered, outstanding Certificates or Options will be deemed from and after the
Effective Time, for all corporate purposes, to evidence the ownership of the cash as provided in Section 1.6 into which such
shares of Company Common Stock or Options shall have been so converted. 
	Required Withholding.  Each of the Exchange Agent and the Surviving Corporation
shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock or Company Options such amounts as are required to be deducted or withheld
therefrom under the Internal Revenue Code of 1986, as amended (the "Code") or under any provision of state,
local or foreign Tax law or under any other applicable Legal Requirement.  To the extent such amounts are so deducted or withheld, the
amount of such consideration shall be timely deposited with the appropriate taxing authority and shall be treated for all purposes under
this Agreement as having been paid to the Person to whom such consideration would otherwise have been paid.

	No Liability.  Notwithstanding anything to the contrary in this Section 1.8, neither the Exchange
Agent, the Surviving Corporation nor any party hereto shall be liable to a holder of shares of Company Common Stock or Company
Options for any amount paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

	Expenses; Investment of Exchange Fund.  The expenses of the Exchange Agent shall not be paid from the
Exchange Fund but shall be paid directly by the Surviving Corporation or Parent.  If the amount of cash in the Exchange Fund is
insufficient to pay all of the amounts required to be paid pursuant to Section 1.6, Parent, from time to time after the Effective
Time, shall deposit additional cash with the Exchange Agent sufficient to make all such payments.  The Exchange Fund shall not be
used for any purpose that is not provided herein.  The Exchange Agent may invest, if so directed by Parent or the Surviving
Corporation, the Exchange Fund in obligations of the United States Government or any agency or instrumentality therefore, or in
obligations that are guaranteed or insured by the United States government or any agency or instrumentality thereof.  No such
investment or loss thereon shall affect the amounts payable to Company security holders pursuant to this Article I.  Any
interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess of the
amounts payable to Company security holders pursuant to this Article I shall promptly be paid to Parent.

	Termination of Exchange Fund.  Any portion of the Exchange Fund which remains undistributed to the holders of
Certificates or Options one year after the Effective Time shall, at the request of the Surviving Corporation, be delivered to the
Surviving Corporation or otherwise according to the instruction of the Surviving Corporation, and any holders of the Certificates or
Options who have not surrendered such Certificates or Options in compliance with this Section 1.8 shall
after such delivery to Surviving Corporation look only to the Surviving Corporation solely as general creditors for the cash into which
such Certificates or Options have been converted (which shall not accrue interest) pursuant to Section 1.6(c)(i)
or Section 1.6(d) with respect to the shares of Company Common Stock or Options formerly represented thereby.

1.9   No Further Ownership Rights in Company Common Stock or Options
 .  All consideration paid pursuant hereto upon the surrender for exchange of shares of Company Common Stock
or Options in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to
such shares of Company Common Stock or Options, and there shall be no further registration of transfers on the records of
the Surviving Corporation of shares of Company Common Stock or Options which were outstanding immediately prior to the
Effective Time.  If, after the Effective Time, Certificates or Options are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Article I.

1.10   Lost, Stolen or Destroyed Certificates or
Options
 .  In the event any Certificates or Options shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates or Options, upon the making of an affidavit of that fact by
the holder thereof, such cash payable pursuant to Section 1.6; provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificates or Options to
deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent, the Company
or the Exchange Agent with respect to the Certificates or Options alleged to have been lost, stolen or destroyed.

1.11   Further Action

 .  At and after the Effective Time, the officers and directors of Parent and the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company and Holdco, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of Company and Holdco, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company represents and warrants to Parent, subject to the exceptions specifically disclosed in writing in the disclosure
letter (referencing the appropriate section, subsection, paragraph and subparagraph numbers; provided, that disclosure in any
section of such letter shall be deemed to be disclosed with respect to any other section of Article II of this Agreement to the extent that it
is reasonably apparent from the face of such disclosure that such disclosure is applicable to such other section) supplied by Company
to Parent dated as of the date hereof and certified by the chief executive officer of Company (the "Company Disclosure
Letter"), as follows:

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

	Organization; Standing and Power. The Company and
each of its Subsidiaries (as defined below) (i) is a corporation or other organization duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation or organization (except, in the case of good standing, for entities
organized under the laws of any jurisdiction that does not recognize such concept), (ii) has the requisite power and authority to
own, lease and operate its properties and to carry on its business as currently conducted, and (iii) 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 makes such qualification or licensing necessary, except for
such failures to be so qualified, licensed or in good standing individually or in the aggregate, as have not had and are not reasonably
likely to have a Material Adverse Effect.  For purposes of this Agreement, "Subsidiary," when used with respect to
any party, shall mean any corporation, association, business entity, partnership, limited liability company or other Person of which
such party, either alone or together with one or more Subsidiaries or by one or more Subsidiaries directly or indirectly owns or controls
securities or other interests representing more than 50% of the voting power of such Person.
	Charter Documents.  The Company has delivered or made available to Parent (or its
representatives) (i) a true and correct copy of the articles of incorporation and bylaws of the Company, each as amended to date
(collectively, the "Company Charter Documents") and (ii) the certificate of incorporation and bylaws, or like
organizational documents (collectively, "Subsidiary Charter Documents"), of each of its Subsidiaries, and each
such instrument is in full force and effect.  The Company is not in violation of any of the provisions of the Company Charter Documents
and each Subsidiary is not in violation of its respective Subsidiary Charter Documents.  
	Subsidiaries.  Section 2.1(c) of the Company Disclosure Letter sets
forth each Subsidiary of the Company.  The Company is the owner of all the outstanding shares of capital stock of, or other equity or
voting interests in, each such Subsidiary and all such shares have been duly authorized, validly issued and are fully paid and
nonassessable, free and clear of all pledges, claims, liens, charges, encumbrances, options and security interests of any kind or nature
whatsoever (collectively, "Liens"), including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests, except for restrictions imposed by applicable securities laws.  Other than the
Subsidiaries of the Company, neither the Company nor any of its Subsidiaries owns any capital stock of, or other equity or voting
interests of any nature in, or any interest convertible, exchangeable or exercisable for, capital stock of, or other equity or voting interests
of any nature in, any other Person, except for passive investments of less than 1% in the equity interests of public companies as part of
the Company's cash management program.

2.2   Capital Structure
 .  

	Capital Stock.  The authorized capital stock of
Company consists of:   100,000,000 shares of Company Common Stock, $0.001 par value per share.  At the close of business
on April 24, 2006: 9,800,253 shares of Company Common Stock were issued and outstanding, excluding shares of Company Common
Stock held by the Company in its treasury, and (ii) no shares of Company Common Stock were issued and held by the Company
in its treasury.  No shares of Company Common Stock are owned or held by any Subsidiary of the Company.  All outstanding shares of
Company Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights
created by statute, the Company Charter Documents, or any agreement to which the Company is a party or by which it is
bound.
	Company Options.  As of the close of business
on April 24, 2006:  (i) 553,816 shares of Company Common Stock are issuable upon the exercise of outstanding options to
purchase Company Common Stock under the Company's 1997 Stock Option Plan (the "Company Stock Option
Plan") (equity or other equity-based awards, whether payable in cash, shares or otherwise granted under or pursuant to the
Company Stock Option Plan are referred to in this Agreement as "Company Options"); (ii) as of April 24,
2006, 252,483 shares of Company Common Stock were available for future grant under the Company Stock Option Plan; (iii) 548,200
shares of Company Common Stock are issuable under the Company Purchase Plans; and (iv) no shares of Company Common Stock
are issuable pursuant to outstanding options to purchase Company Common Stock (A) which are issued other than pursuant to the
Company Stock Option Plan and (B) other than shares reserved for issuance under the Company Purchase Plans.
Section 2.2(b) of the Company Disclosure Letter sets forth a list of each outstanding Company Option: (a) the
particular Company Stock Option Plan (if any) pursuant to which any such Company Option was granted, (b) the name of the
holder of such Company Option, (c) the number of shares of Company Common Stock subject to such Company Option,
(d) the exercise price of such Company Option, and (e) in the case of Company Options, whether such Company Option is
an incentive stock option as defined in Section 422 of the Code and/or is subject to Section 409 of the Code.  All shares of Company
Common Stock subject to issuance under the Company Stock Option Plans and the Company Purchase Plans, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully
paid and nonassessable.  Except for the Stock Option and Stock Purchase Plans, there are no commitments or agreements of any
character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option as a result of the
Merger (whether alone or upon the occurrence of any additional or subsequent events).  As of the end of the most recent bi-weekly
payroll period ending prior to the date hereof, the aggregate amount credited to the accounts of participants in the Company Purchase
Plans was $26,970.15.  There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar
rights with respect to the Company. 
	Voting Debt.  No bonds, debentures, notes or other indebtedness of the Company or
any of its Subsidiaries (i) having the right to vote on any matters on which shareholders may vote (or which is convertible into, or
exchangeable for, securities having such right) or (ii) the value of which is any way based upon or derived from capital or voting
stock of the Company, are issued or outstanding as of the date hereof (collectively, "Voting Debt").
	Other Securities.  As of the date hereof, there are no
securities, options, warrants, calls, rights, contracts, commitments, agreements, instruments, arrangements, understandings,
obligations or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to (including on a deferred basis) issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock, Voting Debt or other voting securities of the Company or any of its Subsidiaries, or
obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, instrument, arrangement, understanding, obligation or undertaking.  All outstanding shares of Company
Common Stock, Company Options and all outstanding shares of capital stock of each Subsidiary of the Company have been issued,
granted or repurchased in compliance with (i) all applicable securities laws and all other applicable Legal Requirements and
(ii) all requirements set forth in applicable Contracts.  There are no outstanding Contracts of the Company or any of its
Subsidiaries to (i) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interests in,
the Company or any of its Subsidiaries or (ii) dispose of any shares of the capital stock of, or other equity or voting interests in,
any of its Subsidiaries.  The Company is not a party to any voting agreement with respect to shares of the capital stock of, or other
equity or voting interests in, the Company or any of its Subsidiaries, and, to the Knowledge of the Company, there are no irrevocable
proxies and no voting agreements or voting trusts with respect to any shares of the capital stock of, or other equity or voting interests in,
the Company or any of its Subsidiaries.  There are no rights plans, anti-takeover plans or registration rights agreements with respect to
any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries.  For purposes of this
Agreement, "Legal Requirements" shall mean any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.  For purposes of this Agreement, "Contract" shall mean any
written, oral or other agreement, contract, subcontract, settlement agreement, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment or undertaking of any
nature, as in effect as of the date hereof or as may hereinafter be in effect.

2.3   Authority; No
Conflict; Necessary Consents
 .  

	Authority.  The Company has all requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject, in the case of consummation of the Merger, to obtaining the approval and adoption of this
Agreement and the approval of the Merger by the Company's shareholders as contemplated in Section 5.2.  The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company and no further action is required on the part of the Company to authorize the
execution and delivery of this Agreement or to consummate the Merger and the other transactions contemplated hereby,
subject only to the approval and adoption of this Agreement and the approval of the Merger by the Company's shareholders and the
filing of the Agreement of Merger pursuant to Oregon Law.  The affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock is the only vote of the holders of any class or Series of Company capital stock necessary to approve and
adopt this Agreement, approve the Merger and consummate the Merger and the other transactions contemplated hereby.  This
Agreement and the Merger have been approved by the Board of Directors of the Company.  This Agreement has been duly executed
and delivered by the Company and assuming due authorization, execution and delivery by Parent constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws relating to the enforcement of
creditors' rights generally and by general principles of equity.
	No Conflict.  The execution and delivery by the Company of this Agreement and the
consummation of the transactions contemplated hereby, will not (i) conflict with or violate any provision of the Company Charter
Documents or any Subsidiary Charter Documents of any Subsidiary of the Company, (ii) subject to obtaining the approval and
adoption of this Agreement and the approval of the Merger by the Company's shareholders as contemplated in
Section 5.2 and compliance with the requirements set forth in Section 2.3(c), conflict with or violate any
Legal Requirement applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of
their respective properties or assets (whether tangible or intangible) is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both would become a default) under, or impair the Company's rights
or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the properties or assets of the Company or any of its Subsidiaries pursuant
to, any Company Material Contract, except in the case of clause (ii) or (iii) of this Section  2.3(b) for any such conflicts,
violations, breaches, defaults, terminations, cancellations, accelerations or losses which are not individually or in the aggregate
material.  Section 2.3(b) of the Company Disclosure Letter also lists any additional consents, waivers and approvals
under any of the Company's or any of its Subsidiary's Contracts required to be obtained in connection with the consummation of the
transactions contemplated hereby, which, if individually or in the aggregate not obtained, would result in a material loss of benefits to
the Company, Parent or the Surviving Corporation as a result of the Merger (such consents, waiver and approvals, together with any
consents required to avoid a breach or default described in (b)(ii) above, the "Required Contract
Consents").
	Necessary Consents.  No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with any supranational, national, state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other governmental authority or instrumentality, or any quasi-governmental
or private body legitimately exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a
"Governmental Entity") is required to be obtained or made by the Company in connection with the execution and
delivery of this Agreement or the consummation of the Merger and other transactions contemplated hereby and thereby, except for
(i) the filing of the Plan of Merger with the Secretary of State of the State of Oregon and of the State of California and appropriate
documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) the filing of the Proxy
Statement with the SEC in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (iii) the filing of any Notification and Report Forms with the United States Federal Trade Commission
("FTC") and the Antitrust Division of the United States Department of Justice ("DOJ") if
required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act") and the expiration
or termination of the applicable waiting period, if any, under the HSR Act and such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the foreign merger control regulations identified in
Section 2.3(c) of the Company Disclosure Letter, and (iv) such other consents, notices, waivers, approvals,
orders, authorizations, registrations, declarations and filings which if not obtained or made would have a Material Adverse Effect on
HoldCo, the Company or Parent, or materially adversely affect the ability of the parties hereto to consummate the Merger and the other
transactions contemplated hereby within the time frame in which the Merger and such other transactions would otherwise be
consummated in the absence of the need for such consent, notice, waiver, approval, order, authorization, registration, declaration or
filing.  The consents, approvals, orders, authorizations, registrations, declarations and filings set forth in (i) through (iv) are
referred to herein as the "Necessary Consents." 

2.4   SEC Filings; Financial Statements; Internal Controls
 .  

	SEC Filings.  The Company has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents (including all information incorporated by reference) required
to be filed by it with the SEC since January 1, 2003.  All such required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including those that the Company may file subsequent to the date hereof) are referred to herein as
the "Company SEC Reports."  As of their respective dates, the Company SEC Reports (i)  complied
in all material respects with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), or
the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports
and (ii) did not at the time they were filed (or if amended or superseded by a filing prior to the date of this Agreement then on the
date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

	Financial Statements.  Each of the consolidated
financial statements (including, in each case, any related notes thereto) contained in the Company SEC Reports (the
"Company Financials"), including each Company SEC Report filed after the date hereof until the Closing:
(i) complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto,
(ii) was prepared in accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form 10-Q, 8-K or any successor form under the
Exchange Act), and (iii) fairly and accurately presented in all material respects the consolidated financial position of the Company
and its consolidated Subsidiaries as at the respective dates thereof and the consolidated results of the Company's operations and cash
flows for the periods indicated (except that the unaudited interim financial statements were or are subject to normal and recurring year
end adjustments, none of which, when taken alone or together, are expected to be material).  The Company does not intend to correct
or restate, nor, to the Company's Knowledge, is there any basis for any correction or restatement of, any aspect of the Company
Financials.  The balance sheet of the Company contained in the Company SEC Reports as of December 31, 2005 is hereinafter
referred to as the "Company Balance Sheet."  Except as incurred since the date of the Company Balance Sheet
and prior to the date hereof in the ordinary course of business consistent with past practice or in connection with the transactions
contemplated by this Agreement or incurred after the date hereof in accordance with the terms of this Agreement and except as
disclosed in the Company Financials, neither the Company nor any of its Subsidiaries has any material  liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a consolidated balance sheet or in the related notes to the consolidated
financial statement prepared in accordance with GAAP.   
	The Company and each of its Subsidiaries has established and maintains, adheres to and enforces a system of internal accounting
controls which are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements in accordance with GAAP (including the Company Financials).  Neither the Company nor any of its Subsidiaries
nor, to the Company's Knowledge, the Company's independent auditors, has identified or been made aware of (i) any significant
deficiency or material weakness in the system of internal accounting controls utilized by the Company and its Subsidiaries,
(ii) any fraud, whether or not material, that involves the Company's management or other Employees who have a role in the
preparation of financial statements or the internal accounting controls utilized by the Company and its Subsidiaries or (iii) any
claim or allegation regarding any of the foregoing.

2.5   Absence of Certain Changes or Events
 .  Since the date of the Company Balance Sheet until the date hereof, there has not been, accrued or arisen:  

	entry by the Company or any of its Subsidiaries into any new line of business;
	any event or condition of any character that has had or is reasonably likely to have a Material Adverse
Effect on the Company;
	any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of,
any of the Company's or any of its Subsidiaries' capital stock, or any purchase, redemption or other acquisition by the Company or any
of its Subsidiaries of any of the Company's capital stock or any other securities of the Company or its Subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities except for repurchases from Employees following their
termination pursuant to the terms of their pre-existing stock option or purchase agreements;
	any split, combination or reclassification of any of the Company's or any of its Subsidiaries' capital stock;
	any change by the Company in its accounting methods, principles or practices, except as required by concurrent changes in
GAAP;
	any debt, capital lease or other debt or equity financing transaction by the Company or any of its Subsidiaries or entry into any
agreement by the Company or any of its Subsidiaries in connection with any such transaction;
	any termination of any material Contract to which the Company or any of its Subsidiaries was a party or by which it was
bound;
	any adoption of or change in any election in respect of Taxes, adoption or change in any accounting method in respect of Taxes,
agreement or settlement of any material claim or assessment in respect of Taxes, or extension or waiver of the limitation period
applicable to any claim or assessment in respect of Taxes; or
	any material revaluation by the Company of any of its assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past
practice.

2.6   Taxes.

	Definition of Taxes.  For the purposes of this Agreement, "Tax" or "Taxes" shall mean any and all federal,
state, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes as well as public imposts, fees and social
security charges (including health, unemployment, workers' compensation and pension insurance), together with all interest, penalties
and additions imposed with respect to such amounts and any obligations under any agreements or arrangements with any other person
with respect to such amounts and including any liability for taxes of a predecessor entity.

	Tax Returns and Audits.

	The Company and each of its Subsidiaries have timely filed or will file all material federal, state, local
and foreign returns, estimates, information statements and reports and all other filings ("Returns") relating to Taxes required to be filed by the Company or any of its Subsidiaries with any
Tax authority, including any combined, consolidated or unitary returns of which the Company or any Subsidiary is a member.  Such
Returns are true and correct in all material respects and have been completed in accordance with applicable Legal Requirements and
the Company and each of its Subsidiaries have timely paid or withheld and paid to the appropriate Governmental Entity all Taxes due
on such Returns. 
	Neither the Company nor any of its Subsidiaries has been delinquent in the payment of any material Tax, nor is there any Tax
deficiency outstanding, assessed or proposed in writing against the Company or any of its Subsidiaries, nor has the Company or any of
its Subsidiaries executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any
Tax.
	No audit or other examination of any Return of the Company or any of its Subsidiaries is presently in progress, nor has the
Company or any of its Subsidiaries been notified of any request for such an audit or other examination.
	Neither the Company nor any of its Subsidiaries has any material liabilities for unpaid Taxes which have not been accrued or
reserved on the Company Balance Sheet, whether asserted or unasserted, contingent or otherwise, and neither the Company nor any
of its Subsidiaries has incurred any liability for Taxes since the date of the Company Balance Sheet other than in the ordinary course of
business.
	Neither the Company nor any of its Subsidiaries has (a) ever been a member of an affiliated group (within the meaning of
Code  1504(a)) filing a consolidated federal income Tax Return (other than a group the common parent of which was Company or
HoldCo), (b) ever been a party to any Tax sharing, indemnification or allocation agreement, (c) any liability for the Taxes of
any person (other than Company or any of its Subsidiaries), under Treasury Regulation   1.1502-6 (or any similar provision of
state, local or foreign law including any arrangement for group or consortium Tax relief or similar arrangement), as a transferee or
successor, by contract or agreement, or otherwise and (d) to the Company's Knowledge, ever been a party to any joint venture,
partnership or other arrangement that could be treated as a partnership for Tax purposes.
	No adjustment relating to any Return filed by the Company or any of its Subsidiaries has been proposed orally or in writing by any
Tax authority to the Company or any of its Subsidiaries or any representative thereof.
	Neither the Company nor any of its Subsidiaries has constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.
	None of the Company or any of its Subsidiaries has engaged in a transaction that the Internal Revenue Service has determined to
be a Tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction, as set
forth in Treasury Regulation Section 1.6011-4(b)(2).
	The Company is not a U.S. Real Property Holding Company.

	Executive Compensation Tax.  There is no contract, agreement, plan or arrangement to which the Company or any
of its Subsidiaries is a party, including the provisions of this Agreement, covering any Employee of the Company or any of its
Subsidiaries, which, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Code.

2.7   Title to Properties; Customer Information.

	Properties.  Neither the Company nor any of its Subsidiaries owns any real property,
nor has the Company or any of its Subsidiaries ever owned any real property.  Section 2.7 of the Company Disclosure
Letter sets forth a list of all real property leased, licensed or subleased by the Company or any of its Subsidiaries or otherwise used or
occupied by the Company or any of its Subsidiaries for the operation of their business as of the date hereof (the "Leased Real
Property").  All such leases are in full force and effect, are valid and effective in accordance with their respective terms
(except as such enforceability may be subject to laws of general application relating to bankruptcy, insolvency, and the relief of debtors
and rules of law governing specific performance, injunctive relief, or other equitable remedies), and there is not with respect to the
Company or any of its Subsidiaries or to the Knowledge of the Company with respect to any other contracting party, under any of such
leases, any existing default or event of default (or event which with notice or lapse of time, or both, would constitute a default).  To
the Knowledge of the Company, neither the Company nor any of its Subsidiaries will be required to incur any material cost or expense
for any restoration or surrender obligations upon the expiration or earlier termination of any leases or other occupancy agreements for
the Leased Real Property.
	Documents.  The Company has provided or made available to Parent accurately
reproduced and complete copies of all leases, lease guaranties, agreements for the leasing, use or occupancy of, or otherwise granting
a right in or relating to the Leased Real Property, including all amendments, terminations and modifications thereof ("Lease
Documents"); and there are no other Lease Documents affecting the Leased Real Property or to which the Company or any
of its Subsidiaries is bound, other than those provided or made available to Parent as required by this
Section 2.7(b).

	Valid Title.  The Company and each of its Subsidiaries has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible and intangible properties and assets, real, personal and mixed,
used or held for use in its business, free and clear of any Liens except (i) for such properties and tangible assets as are no longer
used or usable in the conduct of the business of the Company or its Subsidiaries or have been disposed of in the ordinary course of
business, (ii) Liens for Taxes not yet due and payable and statutory Liens securing payments not yet due or which are being contested
in good faith by any appropriate proceedings for which adequate reserves have been established, and (iv) such liens,
encumbrances or imperfections of title, if any, as do not materially impair the use of the property subject thereto, or the operations of
the Acquired Company or any of their Subsidiaries.

2.8   Intellectual Property
.

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

"Company Intellectual Property" means any and all Intellectual Property and Intellectual Property Rights
used or that has been developed for use exclusively in the SPG that are owned by the Company or its Subsidiaries.

"Company Products" means all SPG products and technologies that have been distributed, sold or
licensed by or on behalf of the Company or any of its Subsidiaries.  Company Products specifically excludes those products, if any,
identified on Schedule 2.8(a). 

"Company Registered Intellectual Property" means all of the Registered Intellectual Property used or
that has been developed for use in the SPG that is owned by, or filed in the name of, the Company or any of its Subsidiaries.

"Intellectual Property" means any or all of the following (i) works of authorship including computer
programs, source code, and executable code, whether embodied in software, firmware or otherwise, architecture, documentation,
designs, files, records, and data, (ii) inventions (whether or not patentable), discoveries, improvements, and technology,
(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) domain names, web addresses
and sites, (vii) tools, methods and processes, (viii) devices, prototypes, schematics, breadboards, net lists, mask works,
test methodologies, verilog files, emulation and simulation reports, test vectors and hardware development tools, and (ix) any and
all instantiations of the foregoing in any form and embodied in any media.

"Intellectual Property Rights" means worldwide common law and statutory rights associated with
(i) patents, patent applications and inventors' certificates, (ii) copyrights, copyright registrations and copyright applications,
"moral" rights and mask work rights, (iii) the protection of trade and industrial secrets and confidential information
("Trade Secrets"), (iv) other proprietary rights relating to Intellectual Property, (v) trademarks, trade
names and service marks, (vi) divisions, continuations, renewals, reissuances and extensions of the foregoing (as applicable)
and (vii) analogous rights to those set forth above, including the right to enforce and recover remedies for any of the
foregoing.

"Open Source Materials" means computer software code that is subject to a license requiring, as a
condition to use, modification or use of the software code, that the software code or other software code combined or distributed with it
be (1) disclosed or distributed in Source Code form, (2) licensed for the purpose of making derivative works or (3) redistributable at no
charge.

"Registered Intellectual Property" means applications, registrations and filings for Intellectual Property
Rights that have been registered, filed, certified or otherwise perfected or recorded with or by any state, government or other public or
quasi-public legal authority.

"Shrink-Wrapped Code" means generally commercially available
object code where available for a cost of not more than U.S. $25,000 for a perpetual license for a single user or work station (or
$75,000 in the aggregate for all users and work stations).

"Source Code" means computer
software and code, in form other than object code form, including related programmer comments and annotations, help text, data and
data structures, instructions and procedural, object-oriented and other code, which may be printed out or displayed in human readable
form.

	Registered Intellectual Property; Proceedings.
Section 2.8(b) of the Company Disclosure Letter (i) lists all Company Registered Intellectual Property
and (ii) lists any proceedings or actions before any court or tribunal (including the United States Patent and Trademark Office (the
"PTO") or equivalent authority anywhere in the world) in which any of the Company
Registered Intellectual Property is involved.  
	Registration. All necessary registration, maintenance and renewal fees in connection with such Company
Registered Intellectual Property have been paid and all necessary documents and certificates in connection with such Company
Registered Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United States
or foreign jurisdictions, as the case may be, for the purposes of prosecuting and maintaining such Company Registered Intellectual
Property.  

	Further Actions.  There are no actions that must be taken by the Company or any of its Subsidiaries before
July 31, 2006, 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 or preserving or renewing Company Registered Intellectual
Property.
	Absence of Liens. Each item of Company
Intellectual Property (including all Company Registered Intellectual Property), is free and clear of any Liens other than those set forth on
Section 2.8(e) of the Company Disclosure Letter.  The Company is the exclusive owner of all Company Intellectual Property.

	Intellectual Property Development.  To the extent that any Intellectual Property used or that has been developed
for use in the SPG has been developed or created independently or jointly by any Person other than the Company or any of its
Subsidiaries for which the Company or any of its Subsidiaries has, directly or indirectly, provided consideration for such
development or creation, the Company or such Subsidiary, as the case may be, has obtained ownership of, and is the exclusive owner
by operation of law or by valid assignment of, all such Intellectual Property that is material to the SPG.
	Licenses-In.  Other than
(i) Shrink-Wrapped Code, (ii) Open Source Materials as set forth in Section 2.8(p) of the Company Disclosure Letter and
(iii) non-disclosure or confidentiality agreements, Section 2.8(g) of the Company Disclosure Letter lists all Contracts to
which the Company or any of its Subsidiaries is a party and under which the Company or any of its Subsidiaries has been granted or
provided any Intellectual Property or Intellectual Property Rights used or that has been developed for use exclusively in the SPG by a
third party.  
	Licenses-Out.  Other than (i)  non-disclosure
agreements and (ii) non-exclusive licenses, and related agreements (including software and maintenance and support
agreements), of current Company Products to end-users (in each case, pursuant to written agreements that have been entered into in
the ordinary course of business), Section 2.8(h)(ii) of the Company Disclosure Letter lists all contracts, licenses and
agreements related to the SPG to which the Company or any of its Subsidiaries is a party and under which the Company or any of its
Subsidiaries has either generated more than $500,000 in revenue in a fiscal year in any of the last three fiscal years or has granted or
provided any material Company Intellectual Property or current Company Products to third parties.
	No Default/No Conflict.  All Contracts relating to either (i) material Company Intellectual Property,
or (ii) Intellectual Property or Intellectual Property Rights of a third Person licensed to the Company or any of its Subsidiaries that
is material to the SPG business of the Company and its Subsidiaries, are in full force and effect and enforceable in accordance with
their terms.  The consummation of the transactions contemplated by this Agreement will neither violate nor by their terms result in the
breach, modification, cancellation, termination, suspension of, or acceleration of any payments with respect to, any such Contracts that
are individually or in the aggregate material.  Each of the Company and its Subsidiaries is in material compliance with, and has not
materially breached any term of any such Contracts and, to the Knowledge of the Company, all other parties to such Contracts are in
compliance with, and have not materially breached any term of, such Contracts.  Following the Closing Date, the Surviving Corporation
will be permitted to exercise all of the Company's and its Subsidiaries' rights under such Contracts to the same extent the Company
and its Subsidiaries would have been able to had the transactions contemplated by this Agreement not occurred without the payment of
any additional amounts or consideration other than ongoing fees, royalties or payments which the Company or any of its Subsidiaries
would otherwise be required to pay.  
	No Infringement.  Other than the actions listed in
the Company Disclosure Letter, the operation of the SPG business of the Company and its Subsidiaries as it is currently conducted by
the Company and its Subsidiaries, including the design, development, use, import, branding, advertising, promotion, marketing,
manufacture and sale of any Company Product does not infringe or misappropriate and will not infringe or misappropriate when
conducted by Parent and/or Surviving Corporation in substantially the same manner following the Closing, any Intellectual Property
Rights of any Person, violate any material right of any Person (including any right to privacy or publicity), or constitute unfair competition
or trade practices under the laws of any jurisdiction.  No third party that has licensed Intellectual Property to the Company or any of its
Subsidiaries has ownership rights or license rights to improvements or derivative works made by the Company or any of its Subsidiaries
in such Intellectual Property that has been licensed to the Company or any of its Subsidiaries.

	Notice. Neither the Company nor any of its Subsidiaries has received written notice from any Person claiming that
any Company Product or Company Intellectual Property infringes or misappropriates any Intellectual Property Rights of any Person or
constitutes unfair competition or trade practices under the laws of any jurisdiction (nor does the Company have Knowledge of any basis
therefor).

	No Third Party Infringement.  To the Knowledge of the Company, no person has or is infringing or misappropriating
any Company Intellectual Property.
	Transaction.  Except pursuant to the terms of the AP Purchase Agreement or the
Contracts listed in Section 2.8(m) of the Company Disclosure Letter, neither this Agreement nor the transactions contemplated by this
Agreement, including any assignment to Parent by operation of law as a result of the Merger of any contracts or agreements to which
the Company or any of its Subsidiaries is a party, will result in: (i) Parent, any of its subsidiaries or the Surviving Corporation
granting to any third party any right to or with respect to any Intellectual Property Rights owned by, or licensed to, any of them,
(ii) Parent, any of its subsidiaries or the Surviving Corporation, being bound by, or subject to, any non-compete or other material
restriction on the operation or scope of their respective businesses, or (iii) Parent, any of its subsidiaries or the Surviving
Corporation being obligated to pay any royalties or other material amounts, or offer any discounts, to any third party in excess of those
payable by, or required to be offered by, any of them, respectively, in the absence of this Agreement or the transactions contemplated
hereby. 

	Confidentiality and Security.  Each of the Company and its Subsidiaries has taken reasonable steps to protect
confidentiality of the confidential information of the Company and any of its Subsidiaries or provided by any other Person to the
Company or any of its Subsidiaries.  
	No Order.  No Company Intellectual Property or Company Product is subject to any
proceeding or outstanding decree, order, judgment, settlement agreement, forbearance to sue, consent, stipulation or similar obligation
that restricts in any manner the use, transfer or licensing thereof by the Company or any of its Subsidiaries or may affect the validity,
use or enforceability of such Company Intellectual Property or Company Product.
	Open Source Materials.  Section 2.8(p) of the Company Disclosure Letter sets forth a list of all Open Source Materials
that are included in, or provided or distributed with any current Company Product.
	Source Code.  Neither the Company, any of its Subsidiaries, nor any other Person
acting on any of their behalf has disclosed, delivered or licensed to any Person, agreed to disclose, deliver or license to any Person, or
permitted the disclosure or delivery to any escrow agent or other Person of, any Source Code that is Company Intellectual Property.
No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would
reasonably be expected to, result in the disclosure or delivery by the Company, any of its Subsidiaries or any Person acting on their
behalf to any Person of any Source Code that is Company Intellectual Property.  Section 2.8(q) of the Company Disclosure
Letter identifies each Contract pursuant to which the Company has deposited, or is or may be required to deposit, with an escrow agent
or any other Person, any Source Code that is Company Intellectual Property.

	Government Funding.  No government funding, facilities or resources of a university, college, other educational
institution or research center or funding from third parties was used in the development of the Company Intellectual Property.

	Indemnification.  Neither the Company nor any of its Subsidiaries is party to or bound by any agreement of
indemnification or any guaranty (other than any agreement unrelated to the SPG or agreement of indemnification that has been entered
into in the ordinary course of business in connection with the sale, distribution or licensing of the Company Products).

	Limitations.  Neither the Company nor any of its Subsidiaries is party to or bound by any Contract containing any
covenant (a) limiting in any respect the right of the Company or any of its Subsidiaries to engage in any line of business, to make
use of any material Intellectual Property or material Intellectual Property Rights (other than pursuant to the terms of Contracts set forth
in Section 2.8(g) of the Company Disclosure Letter) or compete with any Person in any material line of business or to compete
with any person, (b) granting any exclusive distribution rights, or (c) providing "most favored nation" or other
preferential pricing terms for current Company Products.

	Employee Agreements.  All employees who have contributed to or participated in the conception and development
of the Company Products (including software) on behalf of Company or any Subsidiaries either (1) have been party to an arrangement
or agreement with Company or the appropriate Subsidiary that has accorded Company or the appropriate Subsidiary ownership of all
tangible and intangible property thereby arising to the extent permitted by applicable law, or (2) have assigned to the Company or the
appropriate Subsidiary ownership of all tangible and intangible property thereby arising to the extent permitted by applicable
law.

2.9   Governmental Authorizations

.  Each consent, license, permit, grant or other authorization (i) pursuant to which the Company or any of its
Subsidiaries currently operates or holds any interest in any of their respective properties, or (ii) which is required for the operation
of the Company's or any of its Subsidiaries' business as currently conducted or currently proposed to be conducted or the holding of
any such interest or the use or proposed use of their assets or properties (collectively, "Governmental Authorizations") has been issued or granted to the Company or
any of its Subsidiaries, as the case may be, except for such consents, licenses, permits, grants or other authorizations which are not, in
the aggregate, material to the Company.  The Governmental Authorizations are in full force and effect.  As of the date hereof, no
suspension or cancellation of any of the Governmental Authorizations is pending or, to the Knowledge of the Company, threatened.
The Company and its Subsidiaries are in compliance in all material respects with the terms of the Governmental Authorizations.

2.10   Litigation
 .   Except as described in the Company's SEC Reports or as set forth in Section 2.10 of the Company Disclosure
Letter, there is no action, suit, claim or proceeding of any nature pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, any of their respective properties (tangible or intangible) or any of their officers or directors in their
capacities as such.  There is no investigation or other proceeding pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, any of their respective properties (tangible or intangible) or any of their officers or directors in their
capacities as such by or before any Governmental Entity.  There has not been since January 1, 2002, nor are there currently any
internal investigations or inquiries being conducted by the Company, the Company's Board of Directors (or any committee thereof) or
any third party at the request of any of the foregoing concerning any financial, accounting, tax, conflict of interest, illegal activity,
fraudulent or deceptive conduct or other misfeasance or malfeasance issues. 

2.11   Compliance with Laws
 .  Neither the Company nor any of its Subsidiaries is in violation or default in any respect of any Legal Requirements
(including Environmental Laws and regulations) applicable to the Company or any of its Subsidiaries or by which the Company or any
of its Subsidiaries or any of their respective properties is bound or affected except for such violations or defaults as are not in the
aggregate material to the Company.  There is no agreement, judgment, injunction, order or decree of any Governmental Entity binding
upon the Company or any of its Subsidiaries to which the Company or any Subsidiary is a party or by which any of their property is
bound.

2.12   Environmental
Matters
 . 

	The Company and its Subsidiaries are in compliance with all applicable Environmental Laws; and no material expenditures are or
will be required in order to come into compliance with any Environmental Laws.  "Environmental
Laws" for purposes of this Agreement shall mean (a) any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, codes, common laws, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any Hazardous
Materials into the environment; (b) laws relating to the control of any pollutant or the protection or restoration of the environment
(including air, water and land) or natural resources; or (c) the generation, manufacture, processing, use, handling, treatment,
storage, disposal, release, distribution and transportation of Hazardous Materials, including but not limited to the Clean Air Act, 42
U.S.C.  7401 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.  6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act,
33 U.S.C.  1251 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.  9601 et
seq., the Toxic Substances Control Act, 15 U.S.C.  2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C.  2701 et. seq., the
Emergency Planning and Community Right to Know Act, 42 U.S.C.  1101 et seq., the Hazardous Materials Transportation Act, 49
U.S.C.  1501 et seq., the Occupational Safety and Health Act, as amended, and their respective state counterparts, and the Safe
Drinking Water and Toxic Enforcement Act (Proposition 65), Cal. Health & Safety Code  25249.5 et seq.
	The Company and its Subsidiaries have not transported, stored, used, manufactured, disposed of, released, removed or exposed
its Employees or others to material quantities of Hazardous Materials or manufactured any product containing a Hazardous Material
(collectively "Hazardous Materials Activities") in violation of any
Environmental Law or in a manner which has caused or may reasonably be expected to cause damage, or liability to the Company or
any of its Subsidiaries for response costs under any Environmental Law, or any adverse health effect to any person.  "Hazardous Materials" for purposes of this Agreement shall mean
any substance that has been designated by any Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the environment, including, without limitation, means any pollutant,
contaminant, hazardous or toxic substance, or waste and any other substance or material classified as hazardous or toxic by reason of
deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity and including, without limitation,
asbestos and asbestos containing material, oil, petroleum, petroleum derived products, additives to petroleum or petroleum products,
natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, radioactive material, but excluding office and janitorial
supplies properly and safely maintained.
	Neither the Company nor its Subsidiaries have: (i) operated any underground storage tanks at any property that the
Company or any of its Subsidiaries has at any time owned, operated, occupied or leased, or (ii) released any material quantity of
any Hazardous Material on, to, from or in the vicinity of any real property, including but not limited to real property currently or
previously owned or used by the Company, its Subsidiaries or any predecessor entity in the case of either (i) or (ii) in violation of any
Environmental Law or in a manner which has caused or may reasonably be expected to cause damage or liability to the Company or
any of its Subsidiaries.
	The Company and its Subsidiaries currently hold all material Permits (the "Company
Environmental Permits") necessary for the conduct of their Hazardous Material Activities and other businesses of each of the
Company and each of its Subsidiaries as such activities and businesses are currently being conducted.
	No action, proceeding, revocation proceeding, amendment procedure, writ, injunction, order, penalty assessment, notice of
violation, judgment or claim is pending, or to the Company's Knowledge threatened, against the Company or any of its Subsidiaries
concerning any Company Environmental Permit, Hazardous Material or any Hazardous Materials Activity of the Company or any of its
Subsidiaries (collectively "Environmental Claims"). 
	The Company and its Subsidiaries have obtained all instruments of financial responsibility under Environmental Laws which are
required in connection with the business and the operations of the Company and its Subsidiaries.
	The Company and its Subsidiaries have made available copies of all material documents, reports, or analyses in the possession or
control of the Company or any of its Subsidiaries relating to the presence or absence of Hazardous Materials on, at, under or migrating
from or onto any real property currently or previously owned or used by Company and its Subsidiaries in connection with the operations
of the Company and its Subsidiaries.
	The Company and its Subsidiaries have not generated, arranged for disposal, transported or disposed of any Hazardous Material
to any facility where there has been a Release or threatened Release of Hazardous Materials or any other condition which has caused
or may reasonably be expected to cause damage, liability, response costs or expenses to be assigned to the Company or its
Subsidiaries, including but not limited to damage or liability under any Environmental Law.
	The Company and its Subsidiaries have not sold, placed into commerce or otherwise produced any product, good, material, supply
or substance that is in violation of any Environmental Law in a manner that may reasonably be likely to result in material liability to the
Company or any of its Subsidiaries.

2.13   Brokers' and Finders' Fees; Fees and Expenses
 .  Except for fees payable to The Spartan Group LLC, pursuant to an engagement letter dated August 29, 2005, a
copy of which has been provided to Parent, neither the Company nor any of its Subsidiaries has incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions, fees related to investment banking or similar advisory
services or any similar charges in connection with this Agreement or any transaction contemplated hereby.  

2.14   Transactions with Affiliates
 .  Except as set forth in the Company SEC Reports, since the date of the Company's last annual proxy statement
filed with the SEC, no event has occurred that would be required to be reported by the Company pursuant to Item 404 of
Regulation S-K promulgated by the SEC. 

2.15   Employee Benefit Plans and
Compensation
.

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

"Company Employee Plan" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred
compensation, performance awards, stock or stock-related awards, welfare benefits, retirement benefits, fringe benefits or other
employee benefits or remuneration of any kind, whether written or unwritten, funded or unfunded (including each "employee
benefit plan," within the meaning of Section 3(3) of ERISA), which is or, within the six years prior to the Effective Time, has
been maintained, contributed to, or required to be contributed to, by the Company, any of its Subsidiaries or any ERISA Affiliate for the
benefit of any Employee, or with respect to which the Company, any of its Subsidiaries or any ERISA Affiliate has or may have any
liability or obligation and any International Employee Plan.

"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.

"DOL" shall mean the United States Department of Labor.

"Employee" shall mean any current or former employee, consultant,
independent contractor or director of the Company, any of its Subsidiaries or any ERISA Affiliate, excluding consultants and
independent contractors who are not individuals.

"Employee Agreement" shall mean each management,
employment, severance, separation, settlement, consulting, contractor, relocation, repatriation, expatriation, loan, visa, work permit or
other agreement, or contract (including, any offer letter or any agreement providing for acceleration of Company Options or any other
agreement providing for compensation or benefits) between the Company, any of its Subsidiaries or any ERISA Affiliate and any
Employee and with respect to which the Company has or may have any current or future liabilities or obligations.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

"ERISA Affiliate" shall mean any other Person under common control
with the Company or any of its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code, and the regulations
issued thereunder.

 "International Employee Plan" shall mean each Company
Employee Plan that, within six years prior to the Effective Time, has been adopted or maintained by the Company, any of its
Subsidiaries or any ERISA Affiliate, whether formally or informally, or with respect to which the Company, any of its Subsidiaries or any
ERISA Affiliate will or may have any liability, for the benefit of Employees who perform services outside the United States.

"IRS" shall mean the United States Internal Revenue Service.

"PBGC" shall mean the United States Pension Benefit Guaranty
Corporation.

"Pension Plan" shall mean each Company Employee Plan that is an
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA.

"WARN" shall mean the Worker Adjustment and Retraining Notification
Act.

	Schedule.  Section 2.15(b)(i) of the Company Disclosure Letter contains
an accurate and complete list of each Company Employee Plan and each Employee Agreement.  To the Knowledge of the Company,
no employee of the Company intends to terminate his or her employment for any reason.  Section 2.15(b)(iii) of the
Company Disclosure Letter contains an accurate and complete list of all Employees (other than accountants, attorneys and investment
bankers) that have a consulting or advisory relationship with the Company or any of its Subsidiaries that is currently in effect or which is
or may be subject to ongoing obligations.

	Documents. The Company and each of its Subsidiaries has provided or made available to Parent (i) correct
and complete copies of all documents embodying each Company Employee Plan and each Employee Agreement including all
amendments thereto and all related trust, insurance or other funding documents, (ii) the three most recent annual reports
(Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code
in connection with each Company Employee Plan, (iii) if the Company Employee Plan is funded, the most recent annual and
periodic accounting of Company Employee Plan assets, (iv) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA with respect to each Company Employee Plan,
(v) all material written agreements, elections, directions and contracts relating to each Company Employee Plan, including
administrative forms, service agreements and group insurance contracts, (vi) all substantive communications to any Employee or
Employees relating to any Company Employee Plan or any proposed Company Employee Plan, in each case relating to any material
amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules, or
enrollments, elections, or events which would result in any material liability to the Company or any of its Subsidiaries, (vii) all
correspondence to or from any governmental agency relating to any Company Employee Plan other than correspondence that is not
reasonably likely to result in a material liability to the Company or any of its Subsidiaries, (viii) all policies pertaining to fiduciary
liability insurance covering the fiduciaries, and all fidelity bonds required under ERISA, for each Company Employee Plan, (ix) all
discrimination tests performed to demonstrate compliance with requirements of the Code for each Company Employee Plan for the
three most recent plan years, (x) all prospectuses prepared in connection with each Company Employee Plan and (xi) the
most recent IRS determination or opinion letter issued with respect to each Company Employee Plan.

	Employee Plan Compliance.  

	The Company and each of its Subsidiaries has performed all material obligations required to be performed by them under, is not in
default or violation in any material respect of, and the Company and each of its Subsidiaries has no Knowledge of any material default
or violation by any other party to, or service provider for, any Company Employee Plan, and each Company Employee Plan has been
established, administered and maintained in all material respects in accordance with its terms and in material compliance with all
applicable laws, statutes, orders, rules and regulations, including ERISA, the Code and other federal, state and local law.  Any
Company Employee Plan intended to be qualified under Section 401(a) of the Code has obtained a favorable determination letter
(or opinion letter, if applicable) as to its current qualified status under the Code or is maintained pursuant to a prototype or volume
submitter plan document.  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.
	There are no actions, suits, claims, or voluntary correction program applications pending or, to the Knowledge of the Company,
threatened or reasonably anticipated (other than routine claims for benefits) against or with respect to any Company Employee Plan or
against the assets of any Company Employee Plan.  Each Company Employee Plan can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms, without material liability to Parent, the Company, any of its
Subsidiaries or any ERISA Affiliate (other than ordinary administration expenses or liabilities that are set forth on the Company Balance
Sheet).
	There are no audits, inquiries or proceedings pending or to the Knowledge of the Company, threatened by the IRS, DOL, or any
other Governmental Entity with respect to any Company Employee Plan.  Neither the Company, any of its Subsidiaries or ERISA
Affiliates, nor any Company Employee Plan fiduciary is subject to any material liability, penalty or Tax with respect to any Company
Employee Plan under Section 502(i) of ERISA, part 4 of Title I of ERISA, or Sections 4975 through 4980G of the Code.

	For the three years preceding the date of this Agreement, the Company and each of its Subsidiaries have timely made all
contributions (including employee payroll deduction contributions) and other payments required by and due under the terms of each
Company Employee Plan.

	No Pension Plan.  Neither the Company, any of its Subsidiaries nor any current
or former ERISA Affiliate has ever maintained, established, sponsored, participated in, or contributed to, nor assumed any liability for,
any Pension Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of
the Code.

	No Self-Insured Plan.  Neither the Company, any of its Subsidiaries nor any ERISA Affiliate has ever maintained,
established, sponsored, participated in or contributed to any self-insured welfare plan or related trust fund that provides benefits to
Employees (including any such plan pursuant to which a stop-loss policy or contract applies).

	Collectively Bargained, Multiemployer and Multiple-Employer Plan.  At no time has the Company, any of its
Subsidiaries or any ERISA Affiliate contributed to or been obligated to contribute to any multiemployer plan (as defined in
Section 3(37) of ERISA), nor is the Company, any of its Subsidiaries or any ERISA Affiliate subject to any multiemployer pension
withdrawal liability (on a single, joint or contingent basis) that has not been fully paid.  Neither the Company, any of its Subsidiaries nor
any ERISA Affiliate has at any time ever maintained, established, sponsored, participated in or contributed to any multiple employer
plan or any plan described in Section 413 of the Code.
	No Post-Employment Obligations.  No Company Employee Plan or Employee
Agreement provides, or reflects or represents any liability to provide, post-termination or retiree life insurance, health or other employee
welfare benefits to any person for any reason, except as may be required by COBRA or other applicable statute, and neither the
Company nor any of its Subsidiaries has ever represented, promised or contracted (whether in oral or written form) to any Employee
(either individually or to Employees as a group) or any other person that such Employee(s) or other person would be provided with
post-termination or retiree life insurance, health or other employee welfare benefits, except to the extent required by statute or where
the Company and its Subsidiaries have no outstanding or continuing liability.

	COBRA.  All Company Employee Plans which are subject to COBRA have, prior to the Effective Time, materially
complied with COBRA and any similar provisions of state law applicable to any such Company Employee Plans.  No Company
Employee Plan has any material unsatisfied obligations to any Employees or qualified beneficiaries pursuant to COBRA or any similar
state law.
	Effect of Transaction.  Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby or any termination of employment or service in connection therewith will
(i) result in any payment (including severance, golden parachute, bonus or otherwise), becoming due to any Employee,
(ii) result in any forgiveness of indebtedness, (iii) materially increase any benefits otherwise payable by the Company or
any Subsidiary 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. No provision of any Company Employee Plan or Employee Agreement contains any
provision or is subject to any law that would prohibit the transactions contemplated by this Agreement.
	Parachute Payments; 409A.  There is no agreement,
plan, arrangement or other contract covering any Employee that, considered individually or considered collectively with any other such
agreements, plans, arrangements or other contracts, will, or could reasonably be expected to, give rise directly or indirectly to the
payment of any amount that would be characterized as a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code.  There is no agreement, plan, arrangement or other contract by which the Company or any of its
Subsidiaries is bound to compensate any Employee for excise taxes paid pursuant to Section 4999 of the Code. The
Company is not party to any contract, agreement or arrangement that is a "nonqualified deferred compensation plan"
subject to Section 409A of the Code.
	Employment Matters.  The Company and each of its Subsidiaries is in compliance in
all material respects with all applicable Legal Requirements relating to employment, equal opportunity, classification, nondiscrimination,
immigration employee safety and health and wages and hours, and in each case, with respect to Employees, does not have any
material liability (i) for any arrears of wages, severance pay or any Taxes or any penalty for failure to comply with any of the foregoing,
or (ii)  payment to any trust or other fund governed by or maintained by or on behalf of any governmental authority, with respect
to unemployment compensation benefits, social security or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past practice). There are no actions, suits, claims (other than routine
claims for benefits) or administrative matters pending, or to the Knowledge of the Company, threatened or reasonably anticipated
against the Company or any of its Subsidiaries relating to any Employee or Employee Agreement that individually or in the aggregate
could result in a material adverse effect to the Company.  There are no pending claims or actions against Company, any of its
Subsidiaries, any Company trustee or any trustee of any Subsidiary under any worker's compensation policy or long-term disability
policy.  The services provided by each of the Company's and each Subsidiary's Employees are terminable at the will of the Company
and its ERISA Affiliates.  Except as set forth in Section 2.15(l) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries is a party to any contract or agreement (whether written or unwritten) with any Employee of the Company or any of its
Subsidiaries that (i) restricts the right of the Company or any of its Subsidiaries to terminate the employment of any Employee without
cause or (ii) obligates the Company or any of its Subsidiaries to pay severance or other benefits (other than as required by COBRA) to
any Employee upon termination of such Employee's employment or provision of services with the Company or any of its Subsidiaries, a
change of control of the Company (including entry into an agreement in connection with a potential change of control), or a combination
thereof.

	Labor.  No work stoppage or labor strike against the Company or any of its Subsidiaries is pending, or to the
Knowledge of the Company threatened.  The Company has no Knowledge of any activities or proceedings of any labor union to
organize any Employees.  There are no actions, suits, claims, labor disputes or grievances pending or, to the Knowledge of the
Company, threatened or reasonably anticipated relating to any labor matters involving any Employee, including charges of unfair labor
practices, which, if adversely determined, would, individually or in the aggregate, result in any material liability to the Company.  Neither
the Company nor any of its Subsidiaries has engaged in any material unfair labor practices within the meaning of the National Labor
Relations Act.  Except as set forth in Section 2.15(m) of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is presently, nor has it been in the past, a party to, or bound by, any collective bargaining agreement or union contract with
respect to Employees and no collective bargaining agreement is being negotiated by the Company or any of its Subsidiaries.  Within
the past three years, neither the Company nor any of its Subsidiaries has incurred any liability or obligation under WARN or any similar
state or local law that remains unsatisfied, and no terminations prior to the Closing Date shall result in unsatisfied liability or obligation
under WARN or any similar state or local law.

	International Employee Plan.  With respect to each International Employee Plan, and the books and records
thereof, (i) such plan is established, administered and maintained in material compliance with its terms and all applicable laws of each
applicable jurisdiction; (ii) all material liabilities with respect to such plan are set forth on the Company Balance Sheet or in the notes
thereto in accordance with GAAP; and (iii) no such plan is or within the last two calendar years has been the subject of, or has received
notice that it is the subject of, an examination by a government agency or a participant in a government sponsored amnesty, voluntary
compliance or similar program that has given rise to or is reasonably expected to give rise to any material liability.  

2.16   Contracts
 .  

	Material Contracts.  For purposes of this Agreement, "Company Material
Contract" shall mean any of the following to which the Company or any of its Subsidiaries is a party or by which it or its
assets are bound: 

	any "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K
of the SEC) with respect to the Company and its Subsidiaries; 
	any employment, contractor or consulting Contract with any executive officer or other employee, contractor or consultant of the
Company earning annual compensation in excess of $125,000 or member of the Company's Board of Directors, other than
those that are terminable by the Company or any of its Subsidiaries on no more than 30 days notice without liability or financial
obligation to the Company;
	any Contract or plan, including, without limitation, any stock option plan, stock appreciation rights plan or stock purchase plan, any
of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement (either alone or upon the occurrence of additional or subsequent events) 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 (either alone or
upon the occurrence of additional or subsequent events);
	any Contract relating to the disposition or acquisition by the Company or any of its Subsidiaries of assets or any interest in any
other Person or business enterprise other than the Company's Subsidiaries not in the ordinary course of business that was (or is)
required to be disclosed in a periodic report on Form 8-K filed (or required to be filed) with the SEC;
	any dealer or distributor Contract pursuant to which the Company has recognized at least $500,000 in revenue during the last four
fiscal quarters ending March 31, 2006 of the Company;
	any Contract required to be disclosed in Section 2.8(h)(ii) or Section 2.8(g) of the Company Disclosure Letter or
any subsection thereof;
	any independent sales representative, private or brand-label agreements, manufacturing agreements, or joint marketing or
development agreements;
	any contracts that contain restrictive covenants binding on Company or any of its Subsidiaries which (A) restrict the ability of the
Company to operate its business in any geographic area, or (B) contain "most favored nation" or exclusivity, non-competition or non-solicitation provisions;
	any Contract containing any material support, maintenance or service obligation on the part of the Company or any of its
Subsidiaries, other than (i) those obligations that are terminable by the Company or any of its Subsidiaries on no more than 30 days
notice without liability or financial obligation to the Company or its Subsidiaries, (ii) Contracts that do not differ in substance from the
Company's standard forms included in Section 2.8(h)(ii) of the Company Disclosure Letter or (iii) product warranty obligations
handled in the ordinary course of business and adequately reserved for in accordance with GAAP;
	any other Contract not disclosed elsewhere in this Section 2.16 that has an aggregate value
of $500,000 or more in any individual case or any Contract which relates to one of the Company's customers or affiliates listed on
Section 2.16(a)(x) of the Company Disclosure Letter which sets forth a list of the Company's top 25 customers by
related revenue for the four fiscal quarters ended December 31, 2005 (provided that such list excludes purchase orders other than
blanket purchase orders covering deliveries over periods of 90 days or more); or
	any Contract, or group of Contracts with a Person (or group of affiliated
Persons), the termination or breach of which could reasonably be expected to have a Material Adverse Effect on the
Company.

	Schedule.  Section 2.16(b) of the
Company Disclosure Letter sets forth a list of all Company Material Contracts to which the Company or any of its Subsidiaries is a party
or is bound by as of the date hereof which are described in Sections 2.16(a)(i) through 2.16(a)(xi) hereof, setting
forth for each such Company Material Contract, the subsections of Section 2.16(a) applicable to such Company Material
Contract; provided, that any such Company Material Agreements that relate solely to the Company's Automation Products
Group are not so listed, but will be provided to Parent as soon as practicable following the execution of this Agreement in the form of a
revised Section 2.16(b) of the Company Disclosure Letter.

	No Breach.  Assuming due execution by the counterparty thereto, all Company Material Contracts are valid and in
full force and effect except to the extent they have previously expired in accordance with their terms or if the failure to be in full force
and effect, individually or in the aggregate, could not reasonably be expected to be
material to the Company.  Neither the Company nor any of its Subsidiaries has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time or both would constitute a default under the provisions of, any Company Material Contract, except for such violations, commissions, or failures to perform which in the
aggregate could not reasonably be expected to be material to the Company.

	Consents.  Except as set forth in Section 2.16(d) of the Disclosure Letter, the Company is not party to, subject to,
or bound by any Contract that (i) requires the Company to give any notice to any third party regarding the transaction contemplated by
this Agreement or (ii) that would give any third party any option, right of first refusal or offer, right of negotiation or similar right with
respect to the acquisition of the Company, any Subsidiary or any of their respective assets, or the licensing of any Company Intellectual
Property.

2.17   Insurance
 .  The Company has provided or made available to Parent true, correct and accurate summaries of all insurance
policies and fidelity bonds related to the business of the Company and its Subsidiaries.  There is no claim by the Company or any of its
Subsidiaries pending under any of the insurance policies and fidelity bonds covering the assets, business, equipment, properties,
operations, employees, officers and directors of the Company and its Subsidiaries as to which coverage has been questioned, denied
or disputed by the underwriters of such policies or bonds. 

2.18   Export Control Laws

.  The Company and each of its Subsidiaries has at all times conducted its export transactions materially in accordance
with (i) all applicable U.S. export and re-export controls, including the United States Export Administration Act and Regulations
and Foreign Assets Control Regulations and (ii) all other applicable import/export controls in other countries in which the
Company conducts business.  Without limiting the foregoing: 

	The Company and each of its Subsidiaries has obtained all export licenses, license exceptions and
other consents, notices, waivers, approvals, orders, authorizations, registrations, declarations, classifications and filings with any
Governmental Entity required for (i) the export and re-export of products, services, software and technologies and
(ii) releases of technologies and software to foreign nationals located in the United States and abroad ("Export Approvals");
	The Company and each of its Subsidiaries is in material compliance with the terms of all applicable Export Approvals;
	There are no pending or, to the Company's Knowledge, threatened claims against the Company or any Subsidiary with respect to
such Export Approvals;
	To the Company's Knowledge, there are no actions, conditions or circumstances pertaining to the Company's or any Subsidiary's
export transactions that may give rise to any future claims; and
	No Export Approvals for the transfer of export licenses to Parent or the Surviving Corporation are required, or such Export
Approvals can be obtained expeditiously without material cost.

2.19   Foreign Corrupt Practices
Act

.  Neither the Company nor any of its Subsidiaries (including any of their officers or directors) nor, to the Knowledge of the
Company, any of their respective agents, distributors, employees or other Person associated with or acting on their behalf) has, directly
or indirectly, taken any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any
rules or regulations thereunder or any similar anti-corruption or anti-bribery Legal Requirements applicable to the Company or any of its
Subsidiaries in any jurisdiction other than the United Sates (collectively, the "FCPA"), used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made, offered or authorized any
unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly, or made, offered or
authorized any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly.
The Company has established sufficient internal controls and procedures to reasonably ensure compliance with the FCPA and has
made available to Parent all such documentation.

2.20   Information
Supplied
 .   The information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by
reference in the preliminary and definitive proxy statements to be filed by the Company with the SEC in connection with the Merger
(collectively, the "Proxy Statement") will not, on each relevant filing date, on the date of mailing to the Company's
shareholders and at the time of the Shareholders' Meeting, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they are made, not misleading.  The Proxy Statement will comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations promulgated by the SEC thereunder.  If at any time prior to the Effective Time any event relating to
the Company or any of its Affiliates, officers or directors should be discovered by the Company which is required to be set forth in a
supplement to the Proxy Statement, the Company shall promptly inform Parent.  Notwithstanding the foregoing, the Company makes
no representation or warranty with respect to any information supplied by Parent for inclusion or incorporation by reference in the Proxy
Statement.

2.21   Board Approval
 .  The Board of Directors of the Company has, by resolution adopted by vote at a meeting of all Directors duly called
and held and not subsequently rescinded or modified in any way (the "Company Board Approval"), duly (i)
determined that the Merger is fair to, and in the best interest of, the Company and its shareholders and declared the Merger to be
advisable, (ii) approved this Agreement and the transactions contemplated thereby, including the Merger, and (iii) recommended that
the shareholders of the Company approve and adopt this Agreement and approve the Merger and directed that such matter be
submitted to the Company's shareholders at the Company Shareholders' Meeting. 

2.22   Fairness Opinion
 .  The Company's Board of Directors has received a written opinion from The Spartan Group LLC, dated as of April
24, 2006 that, as of such date, the Merger Consideration and the consideration received under the AP Purchase Agreement are fair to
the Company's shareholders from a financial point of view (the "Fairness Opinion").

2.23   Books and Records.
The books of account, minute books, stock record books, and other records of the Company, all of which have been
made available to Parent, are complete and correct in all material respects and have been maintained in all material respects in
accordance with sound business practices and, except as set forth in Section 2.23 of the Company Disclosure Letter, the requirements
of Section 13(b)(2) of the Securities Exchange Act of 1934, as amended, including the maintenance of an adequate system of internal
controls. The minute books of the Company contain accurate and complete records in all material respects of all meetings held of, and
corporate action taken by, the stockholders, the Board of Directors, and committees of the Board of Directors of the Company, and no
meeting of any such stockholders, Board of Directors, or committee has been held for which minutes have not been prepared and are
not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Company.

2.24   Relationship with Key Customers and
Suppliers
.    As of the date hereof, the Company has no knowledge of any intention or indication by a "Significant
Customer" (as herein defined) that such Significant Customer intends to terminate its business relationship with the Company or
to limit or alter its business relationship with the Company in any material respect.  As of the date hereof, the Company has no
knowledge of any intention or indication of intention by a "Significant Supplier" (as herein defined) to terminate its business
relationship with the Company or to limit or alter its business relationship with the Company in any material respect.  As used herein, (x)
"Significant Customer" means any of the 25 largest customers of the Company, measured in terms of sales volume
in dollars for the 12-month period ended December 31, 2005, and (y) "Significant Supplier" means any supplier of
the Company from whom Company has purchased $500,000 or more of goods during the year ended December 31, 2005 for use in the
Company's business.

2.25   Absence of Debt
.  The Company and its Subsidiaries have no outstanding debt, capital lease or other debt financing obligations, and there
are no Liens on the Company or its Subsidiaries' assets or properties securing any debt, capital lease or other debt financing.

2.26   No Material Misstatements

.  None of the representations or warranties made by Company (as modified by the Disclosure Letter), nor any statement
made in the Disclosure Letter or in any certificate furnished by Company pursuant to this Agreement contains or will contain at the
Closing, any untrue statement of a material fact or omits or will omit at the Closing to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances under which made, not misleading.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to the Company as follows:

3.1   Organization
 .   Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware.   Parent has the requisite power and authority to own, lease and operate its properties and to carry on its business as
currently conducted and 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 makes such
qualification or licensing necessary except for such failures to be in good standing, individually or in the aggregate, as have not had and
are not reasonably likely to have a Material Adverse Effect on Parent.

3.2   Authority; Necessary Consents
 .  

	Authority.  Parent has all requisite corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby.  The execution and delivery by Parent of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent and no other
action is required on the part of Parent to authorize the execution and delivery of this Agreement or to consummate the Merger and the
other transactions contemplated hereby, subject only to the filing of the Agreement of Merger pursuant to Oregon Law, the HSR filing
and other matters specified in Section 2.3(c).  This Agreement has been duly executed and delivered by Parent and, assuming
due execution and delivery of this Agreement by the Company and HoldCo, constitute the valid and binding obligations of Parent,
enforceable against Parent in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws relating to the enforcement of creditors' rights generally and by
general principles of equity.

	Necessary Consents.   No consent, notice, approval, order, authorization, registration, declaration or filing
with any Governmental Entity, or any third party, is required to be made or obtained by Parent in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) the Necessary Consents;
and (ii) such consents, notices, waivers, approvals, orders, authorizations, registrations, declarations and filings which, if not
obtained or made, would not materially adversely affect the ability of the parties hereto to consummate the Merger or the other
transactions contemplated hereby within the time frame in which the Merger and such other transactions would otherwise be
consummated in the absence of the need for such consent, approval, order, authorization, registration, declaration or filing.

	No Conflict.  The execution and delivery by Parent of this Agreement and the consummation of the transactions
contemplated hereby, will not (i) conflict with or violate any provision of the Certificate of Incorporation, Articles of Incorporation or
bylaws of Parent, (ii) subject to obtaining the Necessary Consents, conflict with or violate any material Legal Requirement
applicable to Parent or by which Parent or any of its properties or assets (whether tangible or intangible) is bound or affected, or
(iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default)
under any contract of Parent, except, in each case under the preceding clauses (i), (ii) and (iii), for any conflicts, violations, breaches or
defaults which would not 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.  

3.3   Capital Resources

	.   Parent has, and will have available to it upon the consummation of the Merger, sufficient capital resources to pay
the Merger Consideration. 

3.4   Proceedings Challenging Transactions
 .   As of the date hereof, (a) there is no proceeding before any Governmental Entity pending against Parent
challenging the Merger or the other transactions contemplated hereby, and (b) no such proceeding has been threatened against
Parent.

3.5   Information Supplied

 .   The information supplied or to be supplied by or on behalf of Parent for inclusion or incorporation by reference in
the Proxy Statement, will not contain, on the date of the mailing to the Company's shareholders and at the time of the Shareholders'
Meeting, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they are made, not misleading.  If at any time prior to the
Effective Time, any event relating to Parent or any of its Affiliates, officers or directors should be discovered by Parent which is required
to be set forth in a supplement to the Proxy Statement, Parent shall promptly inform the Company.  Notwithstanding the foregoing,
Parent makes no representation or warranty with respect to any information supplied by HoldCo or the Company which is contained in
the Proxy Statement.

ARTICLE IV

CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME

4.1   Conduct
of Business by the Company.

	Ordinary Course.  During the period from the date hereof and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company and each of its Subsidiaries shall,
except as otherwise expressly contemplated by this Agreement or disclosed in Section 4.1 of the Company Disclosure Letter
or as required by any Legal Requirement or to the extent that Parent shall otherwise consent in writing (which consent shall not be
unreasonably withheld, conditioned or delayed), (i) exercise commercially reasonable efforts to carry on its business in the usual,
regular and ordinary course, in substantially the same manner as heretofore conducted and in material compliance with all applicable
laws and regulations, (ii) pay its debts and Taxes when due (except to the extent disputed in good faith), pay or perform other
material obligations when due, and (iii) exercise commercially reasonable efforts consistent with past practices and policies to
(x) preserve intact its present business organization, (y) keep available the services of its present executive officers and
Employees, and (z) preserve its relationships with material customers, suppliers, licensors, licensees, and others with which it
has business dealings.  
	Required Consent.  Without limiting the generality of Section 4.1(a),
except as otherwise expressly contemplated by this Agreement, and except as provided in Section 4.1 of the Company
Disclosure Letter or as required pursuant to any Legal Requirement, without the prior written consent of Parent (which consent shall not
be unreasonably withheld, conditioned or delayed), during the period from the date hereof and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following, and shall not
permit any of its Subsidiaries to do any of the following:  

	Enter into any new line of business; 
	Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock (except for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent) or split,
combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock, other than any such transaction by a wholly-owned Subsidiary of it that remains a wholly-owned Subsidiary of it
after consummation of such transaction, in the ordinary course of business consistent with past practice;
	Purchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or the
capital stock of its Subsidiaries, except repurchases of unvested Common Stock of the Company in connection with the termination of
the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;

	Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock, Voting Debt
or any securities convertible into shares of capital stock or Voting Debt, or subscriptions, rights, warrants or options to acquire any
shares of capital stock or Voting Debt or any securities convertible into shares of capital stock or Voting Debt, or enter into other
agreements or commitments of any character obligating it to issue any such securities or rights, other than:  (A) issuances of
Company Common Stock upon the exercise of Company Options existing on the date hereof in accordance with their present terms,
(B) issuance of shares of Company Common Stock to participants in the Company Purchase Plan pursuant to the terms thereof,
and (C) the issuance of Company Options to newly hired employees in the ordinary course of business consistent with past
practices; 
	Cause, permit or propose any amendments to the Company Charter Documents or any of the Subsidiary Charter Documents of
the Company's Subsidiaries;
	Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity or voting interest in or a portion of the assets of, or by any other manner, any business or any Person or division
thereof, or otherwise acquire or agree to acquire any assets out of the ordinary course of business;
	Enter into any binding agreement, agreement in principle, letter of intent, memorandum of understanding or similar agreement with
respect to any joint venture, strategic partnership or alliance;
	Sell, lease, license, encumber or otherwise dispose of any material properties or assets
except (A) the sale of Company Products to customers in the ordinary course of business, (B) the sale, lease or disposition (other
than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its
subsidiaries or the licenses of current Company Products, in each case, in the ordinary course of business and in a manner consistent
with past practice and (C) except for (1) Liens for taxes not yet due and payable, (2) statutory Liens securing payments not yet due and
(3) Liens that do not materially detract from the value or interfere with the present use of the property subject thereto or affected
thereby;
	Make any loans, advances or capital contributions to, or investments in, any other Person, other than:  (a) loans or
investments by it or a wholly-owned Subsidiary of it to or in it or any wholly-owned Subsidiary of it, or (b) employee loans or
advances for travel and entertainment expenses made in the ordinary course of business consistent with past practices;
	Except as required by GAAP or the SEC as concurred in by its independent auditors, make any change in its methods or principles
of accounting;
	Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any
agreement, settle any claim or assessment in respect of Taxes, consent to any extension or waiver of the limitation period applicable to
any claim or assessment in respect of Taxes or amend any Return;
	Except in the ordinary course of business consistent with past practices, enter into any licensing, distribution, sponsorship,
advertising, merchant program, or other similar contracts, agreements, or obligations which may not be canceled without penalty by the
Company or its Subsidiaries upon notice of 30 days or less or which provide for express payments by or to the Company or its
Subsidiaries in an amount in excess of $250,000 in any one year or which involve any exclusive terms of any kind which are binding on
the Company;
	Cancel or terminate without reasonable substitute policy therefor any material insurance policy naming the Company as a
beneficiary or a loss payee without notice to Parent;
	Revalue any of its assets or make any change in accounting methods, principles or practices other than as required by Legal
Requirements promulgated or first effective after the date of this Agreement;
	Commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation by or against the Company or any
Subsidiary or relating to any of their businesses, properties or assets, which lawsuit, proceeding or settlement is seeking damages of
$50,000 or more;
	Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any
confidentiality, standstill or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its
subsidiaries is a beneficiary;
	Except as required by Legal Requirements or Contracts currently binding on the Company or its
Subsidiaries, (1) increase in any material manner the amount of compensation or fringe benefits of, pay or grant any bonus,
change of control, severance or termination pay to any Employee or director of the Company or any Subsidiary of the Company (other
than regular compensation increases for employees in the ordinary course of business consistent with past practices), (2) adopt
or amend (except to the extent necessary to maintain the tax-qualified status of such Company Benefit Plan) any Company Benefit
Plan or make any contribution, other than regularly scheduled contributions, to any Company Benefit Plan, (3) waive any
stock repurchase rights, accelerate, amend or change the period of exercisability of Company Options (other than accelerations as a
result of the accelerated vesting of the Company Options contemplated by this Agreement), or reprice any Company Options or
authorize cash payments in exchange for any Company Options, or (4) enter into any Employee Agreement or indemnification
agreement with any Employee (other than offer letters and letter agreements entered into in the ordinary course of business consistent
with past practice with employees who are terminable "at will" and other than option agreements in the Company's standard
form pursuant to option grants to newly hired employees in the ordinary course of business consistent with past practices) or enter into
any collectively bargained agreement;
	Grant any exclusive rights with respect to any Company Intellectual Property;
	Enter into or renew any Contracts containing, or otherwise subject the Surviving Corporation or
Parent to, any non-competition, non-solicitation, exclusivity, "most favored nations" or other preferential pricing or other
material restrictions on the Company or the Surviving Corporation or Parent, or any of their respective businesses, following the
Closing;
	Hire employees other than in the ordinary course of business consistent with past practice or hire officers or directors;
	Incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person,
issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of another Person, enter into any "keep well" or other agreement to maintain
any financial statement condition of any other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement
having the economic effect of any of the foregoing, other than in connection with the financing of ordinary course trade payables
consistent with past practice or pursuant to existing credit facilities in the ordinary course of business consistent with past
practice;
	Make or commit to make capital expenditures exceeding $100,000 individually or $250,000 in the
aggregate that are not provided for in the Company's current operating plan;
	Modify or amend in a manner adverse in any material respect to the Company, or terminate any Company Material Contract
currently in effect, or waive, release or assign any material rights or claims thereunder, in each case, in a manner adverse to the
Company;
	Enter into any Contract requiring the Company or any of its Subsidiaries to pay in excess of an
aggregate of $250,000; or
	Take, commit, or agree in writing or otherwise to take, any of the actions described in
Sections 4.1(b)(i) through 4.1(b)(xxiv) hereof, or any other action that would prevent the Company from
performing, or cause the Company not to perform in all material respects, its covenants or agreements hereunder.

4.2   Procedures for Requesting Parent
Consent

.  Notwithstanding Section 8.2, if the Company desires to take any action which would be prohibited pursuant to
Section 4.1(b) hereof 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 the individuals identified on Schedule 4.2 hereof, and may not take such
action until such consent in writing (including by way of reply email) has been received from one of such individuals.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1   Proxy Statement
 .  As promptly as reasonably practicable after the execution of this Agreement, the Company, in consultation with
Parent, will prepare and file with the SEC preliminary proxy materials that will constitute the Proxy Statement. The Proxy Statement
shall include the notice to shareholders required by Section 60.561 of the Oregon Revised Statutes and Section 1301 of the
California Corporations Code that dissenters' rights will be available.  As promptly as reasonably practicable after any comments are
received from the SEC thereon (or upon notice from the SEC that no such comments will be made), the Company shall, in consultation
with Parent, prepare and file any required amendments to, and the definitive, Proxy Statement with the SEC. The Company will notify
Parent reasonably promptly upon the receipt of any comments from the SEC or its staff in connection with the filing of, or amendments
or supplements to, the Proxy Statement.  Whenever any event occurs which is required to be set forth in an amendment or supplement
to the Proxy Statement, the Company will reasonably promptly inform Parent of such occurrence and will, in consultation with Parent,
file with the SEC or its staff, and/or mail to shareholders of the Company, such amendment or supplement.  The Company shall provide
Parent (and its counsel) with a reasonable opportunity to review and comment on the preliminary Proxy Statement and any amendment
or supplement thereto prior to filing such with the SEC, and will provide Parent with a copy of all such filings made with the SEC.  The
Company will exercise commercially reasonable efforts to cause the Proxy Statement to be mailed to its shareholders as soon as
reasonably practicable after the definitive Proxy Statement is filed with the SEC.  

5.2   Meeting of Company Shareholders; Board Recommendation
 .  

Meeting of Company
Shareholders.  The Company will take all commercially reasonable action necessary in accordance with Oregon Law and its
Articles of Incorporation and Bylaws to call, hold and convene a meeting of its shareholders, to consider approval of this Agreement and
approval of the Merger (the "Shareholders' Meeting") to be held as promptly as reasonably practicable after the
mailing of the Proxy Statement to the Company's shareholders.  Notwithstanding anything to the contrary contained in this Agreement,
the Company may adjourn or postpone the Shareholders' Meeting to the extent necessary to ensure that any necessary supplement or
amendment to the Proxy Statement is provided to its shareholders in advance of a vote on the Merger and this Agreement or, if as of
the time for which the Shareholders' Meeting is originally scheduled (as set forth in the Proxy Statement) there are insufficient shares of
Company Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such
Shareholders' Meeting.  The Company shall cause the Shareholders' Meeting to be called, noticed, convened, held and conducted, and
that all proxies solicited by it in connection with the Shareholders' Meeting are solicited in compliance with Oregon Law, its Articles of
Incorporation and Bylaws and all other applicable Legal Requirements.  

	Board Recommendation.  Except to the extent expressly permitted by Section 5.3(d):  (i) the
Board of Directors of the Company shall recommend that its shareholders vote in favor of approval of this Agreement and approval of
the Merger at the Shareholders' Meeting, (ii) the Proxy Statement shall include a statement to the effect that the Board of
Directors of the Company has recommended that the Company's shareholders vote in favor of approval of this Agreement and approval
of the Merger at the Shareholders' Meeting, and (iii) neither the Board of Directors of the Company nor any committee thereof
shall withdraw, amend or modify in a manner adverse to Parent, or resolve or publicly propose to withdraw, amend or modify in a
manner adverse to Parent, the recommendation of its Board of Directors that the Company's shareholders vote in favor of approval of
this Agreement and approval of the Merger.  

5.3   Acquisition
Proposals
 .  

	No Solicitation.  HoldCo and the Company agree that neither they nor any of their
affiliates or Subsidiaries nor any of their respective officers and directors shall, and that they shall use all commercially reasonable
efforts to cause their and their affiliates and Subsidiaries' Employees, agents and representatives (including any investment banker,
attorney or accountant retained by any of them) not to (and shall not authorize any of them to) directly or indirectly:  (i) solicit,
initiate, or knowingly induce, facilitate or encourage any inquiry with respect to, or the making, submission or announcement of, any
Acquisition Proposal, (ii) subject to Section 5.3(c), participate in any discussions or negotiations regarding, or
furnish to any Person any nonpublic information with respect to any Acquisition Proposal, (iii) subject to Section
5.3(c), engage in discussions with any Person with respect to any Acquisition Proposal, except to notify such Person as to
the existence of these provisions, (iv) approve, endorse or recommend any Acquisition Proposal (except to the extent specifically
permitted pursuant to Section 5.3(d)), or (v) enter into any letter of intent or similar document or any contract
agreement or commitment relating to any Acquisition Proposal.  The Company and its Subsidiaries will immediately cease and cause to
be terminated any and all existing activities, discussions or negotiations with any third parties with respect to any Acquisition
Proposal.  

	Notification of Unsolicited Acquisition Proposals.

	Within 72 hours after receipt of any Acquisition Proposal or any request for nonpublic information or inquiry that it reasonably
believes would lead to an Acquisition Proposal, HoldCo or the Company shall provide Parent with oral and written notice of the material
terms and conditions of such Acquisition Proposal, request or inquiry; the identity of the Person or group making any such Acquisition
Proposal, request or inquiry and a copy of all written materials provided by or on behalf of such Person or group in connection with such
Acquisition Proposal, request or inquiry.  Upon receipt of an Acquisition Proposal, request or inquiry, the Company shall provide Parent
within 48 hours oral and written notice setting forth all such information as is reasonably necessary to keep Parent informed in all
material respects of the status and details (including material amendments or proposed material amendments) of any such Acquisition
Proposal, request or inquiry and shall within 72 hours provide Parent a copy of the Acquisition Proposal, request or inquiry and all
written materials subsequently provided by or on behalf of such Person or group in connection with such Acquisition Proposal, request
or inquiry.
	The Company shall provide Parent with 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
Acquisition Proposal.
	Parent shall have five business days from receipt of notice of, and all required information regarding, a Superior Offer to match
such Superior Offer in writing delivered to Company (it being agreed that, in a case where the Superior Offer includes stock
consideration, Parent shall be entitled to match such Offer with the cash equivalent of such stock consideration).  If Parent elects to
match such Superior Offer, HoldCo and Company shall immediately suspend further dialogue concerning such Superior Offer with the
competitive bidder.

	Superior Offers.  Notwithstanding anything to the contrary contained in
Section 5.3(a), in the event that the Company receives an unsolicited, bona fide written Acquisition Proposal from an
unaffiliated third party that its Board of Directors has in good faith concluded (following the receipt of the advice of its financial and legal
advisors and such other advice and information as deemed necessary), is, or is reasonably likely to result in, a Superior Offer, the
Company may then take the following actions (but only if and to the extent that the Board of Directors of the Company concludes in
good faith, following the receipt of advice of the Company's outside legal counsel, that the failure to do so could reasonably be
determined to be inconsistent with its fiduciary obligations to the shareholders of the Company under applicable law:

	Request information from the Person making such Acquisition Proposal for the purposes of enabling the Board of Directors of the
Company to become appropriately informed about the Acquisition Proposal that has been made and the Person that made it;
	Furnish nonpublic information to the third party making such Acquisition Proposal, provided that
(a) (1) concurrently with furnishing any such nonpublic information to such party, the Company gives Parent written notice
of its intention to furnish such nonpublic information and (2) the Company receives from the third party an executed confidentiality
agreement containing customary limitations on the use and disclosure of all nonpublic 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 Confidentiality
Agreement and (b) contemporaneously with furnishing any such nonpublic information to such third party, the Company furnishes
such nonpublic information to Parent (to the extent such nonpublic information has not been previously so furnished); and
	Engage in discussions and negotiations with the third party with respect to the Acquisition Proposal, provided that
concurrently with entering into discussions or negotiations with such third party, the Company gives Parent written notice of the
Company's intention to enter into negotiations with such third party.

	Change of Recommendation.  In response to the receipt of a Superior Offer, the
Board of Directors of the Company may withhold, withdraw, amend or modify its recommendation in favor of the Merger, and, in the
case of a Superior Offer that is a tender or exchange offer made directly to the shareholders of the Company, may recommend that the
shareholders of the Company accept the tender or exchange offer and release the Person making the Superior Offer from any
"standstill" obligation pursuant to agreements between such Person and the Company (any of the foregoing actions,
whether by the Board of Directors of the Company or a committee thereof, a "Change of Recommendation"), if all
of the following conditions in clauses (i) through (v) are met:  

	A Superior Offer with respect to the Company has been made and has not been withdrawn or matched by Parent;
	The Shareholders' Meeting has not occurred;
	The Company shall have (a) delivered to Parent written notice (a "Change of
Recommendation Notice") at least two Business Days prior to publicly effecting such Change of Recommendation
which shall state expressly (1) that the Company has received a Superior Offer, (2) the material terms and conditions of
the Superior Offer and the identity of the Person or group making the Superior Offer, and (3) that the Company may effect a
Change of Recommendation and the manner in which it may do so, (b) provided to Parent a copy of all written materials
delivered to the Person or group making the Superior Offer in connection with such Superior Offer (to the extent not previously provided
to Parent), and (c) made available to Parent all materials and information made available to the Person or group making the
Superior Offer in connection with such Superior Offer; and
	The Board of Directors of the Company has concluded in good faith, after receipt of advice of its outside legal counsel, that, in light
of such Superior Offer, the failure of the Board of Directors to effect a Change of Recommendation could reasonably be determined to
be inconsistent with its fiduciary obligations to the shareholders of the Company under applicable law.

	Continuing Obligation to Call, Hold and Convene Shareholders' Meeting; No Other Vote.  Notwithstanding anything
to the contrary contained in this Agreement, the obligation of the Company to call, give notice of, convene and hold the Shareholders'
Meeting shall not be limited or otherwise affected by the commencement, disclosure, announcement or submission to it of any
Acquisition Proposal, or by any Change of Recommendation.  The Company shall not submit to the vote of its shareholders any
Acquisition Proposal, or publicly propose to do so unless this Agreement has been validly terminated in accordance with Article VII
hereof.

	Compliance with Tender Offer Rules.  Nothing contained in this Agreement shall prohibit the Company or its Board
of Directors from taking and disclosing to the shareholders of the Company a position contemplated by Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act; provided that the content of any such disclosure thereunder shall be governed by the
terms of this Agreement.  Without limiting the foregoing proviso, the Company shall not effect a Change of Recommendation unless
specifically permitted pursuant to the terms of Section 5.3(d).
	Certain Definitions. For purposes of this Agreement, the following terms shall have
the following meanings:

	"Acquisition Proposal," with respect to HoldCo or the Company, shall mean any
offer or proposal, relating to any transaction or series of related transactions involving:  (a) any purchase from such party 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 10% interest in the total outstanding voting securities of HoldCo, the Company or any of their
Subsidiaries or any tender offer or exchange offer that if consummated would result in any Person or group beneficially owning
10% or more of the total outstanding voting securities of HoldCo, the Company or any of their Subsidiaries, (b) any merger,
consolidation, business combination or similar transaction involving HoldCo, the Company or any of their Subsidiaries, (c) any
sale, lease (other than in the ordinary course of business), exchange, transfer, license (other than in the ordinary course of business),
acquisition or disposition of more than 10% of the assets of HoldCo, the Company (including their Subsidiaries taken as a whole), or
(d) any liquidation or dissolution of HoldCo or the Company (provided, however, the transactions among
Parent, HoldCo and the Company contemplated by this Agreement shall not be deemed an Acquisition Proposal); and
	"Superior Offer," with respect to the Company, shall mean a bona fide written
offer made by an unaffiliated third party to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger,
consolidation or other business combination, all or substantially all of the assets of the Company or a majority of the total outstanding
voting securities of the Company as a result of which the shareholders of the Company immediately preceding such transaction would
hold less than 50% of the equity interests in the surviving or resulting entity of such transaction and any direct or indirect parent or
subsidiary thereof, on terms that the Board of Directors of the Company has in good faith concluded (following the receipt of advice of
its financial adviser) would be more favorable, from a financial point of view, to the Company's shareholders (in their capacities as
shareholders) than the terms of the Merger and is reasonably likely of being consummated.

	Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that the
provisions of this Section 5.3 were not performed in accordance with their specific terms or were otherwise breached.  It is
accordingly agreed by the parties hereto that Parent 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 5.3  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 officer, director, agent,
representative or affiliate of HoldCo or the Company shall be deemed to be a breach of this Agreement by HoldCo and the
Company.

5.4   Confidentiality; Access to
Information; No Modification of Representations, Warranties or Covenants
 .  

	Confidentiality. The parties acknowledge that the Company and Parent have
previously executed a Confidential Disclosure Agreement dated December 21, 2005, as amended (the "Confidentiality
Agreement"), which Confidentiality Agreement will continue in full force and effect in accordance with its terms.
	Access to Information.  Upon reasonable notice
and subject to the Confidentiality Agreement and the requirements of the HSR Act, the Company shall afford Parent and its
accountants, counsel and other representatives, reasonable access (in a manner that is not disruptive to the Company) during normal
business hours during the period from the date hereof and prior to the Effective Time to (i) all of the properties, books, contracts,
commitments and records of the Company and its Subsidiaries, including all Company Intellectual Property (including access to design
processes and methodologies and all source code), (ii) all other information concerning the business, properties and personnel
(subject to restrictions imposed by applicable law) of the Company and its Subsidiaries as Parent may reasonably request, and
(iii) all Employees of the Company and its Subsidiaries as identified by Parent.  Upon reasonable notice and subject to the
Confidentiality Agreement and the requirements of the HSR Act, the Company agrees to provide to Parent and its accountants, counsel
and other representatives copies of internal financial statements (including Tax Returns and supporting documentation) promptly upon
request.  

	No Modification of Representations and Warranties or Covenants.  No information or knowledge obtained in any
investigation or notification pursuant to this Section 5.4, Section 5.6 or Section 5.7 shall
affect or be deemed to modify any representation or warranty contained herein, the covenants or agreements of the parties hereto or
the conditions to the obligations of the parties hereto under this Agreement.

5.5   Public Disclosure
 .  Without limiting any other provision of this Agreement, Parent and the Company will consult with each other before
issuing, and provide each other the opportunity to review, comment upon and concur with, and use commercially reasonable efforts to
agree on any press release or public statement with respect to this Agreement and the transactions contemplated hereby, including the
Merger, and any Acquisition Proposal, and will not issue any such press release or make any such public statement prior to such
consultation and (to the extent practicable) agreement, except as may be required by law or any listing agreement with the Nasdaq or
any other applicable national or regional securities exchange or market.  The parties have agreed to the text of the joint press release
announcing the signing of this Agreement.

5.6   Regulatory Filings; Reasonable Efforts
 .  

	Regulatory Filings.  Each of Parent and the Company shall coordinate and
cooperate with one another and shall each use commercially reasonable efforts to comply with, and shall each refrain from taking any
action that would impede compliance with, all Legal Requirements, and each of Parent and the Company shall make all filings, notices,
petitions, statements, registrations, submissions of information, application or submission of other documents required by any
Governmental Entity in connection with the Merger and the transactions contemplated hereby as promptly as reasonably practicable
after the date hereof (or as promptly as reasonably practicable following the occurrence of any events that cause any such filing, notice,
petition, statement, registration, submission or application to be reasonably likely to be required), including, without limitation:
(i) Notification and Report Forms with the FTC and the DOJ if required by the HSR Act, (ii) pre-merger notifications
required by the competition laws of other countries, or the European Union, as reasonably determined by Parent and the Company, and
(iii) any filings required under the Securities Act, the Exchange Act, any applicable state or securities or "blue sky"
laws and the securities laws of any foreign country, or any other Legal Requirement relating to the Merger.  Each of Parent and the
Company will cause all documents that it is responsible for filing with any Governmental Entity under this Section 5.6(a)
to comply in all material respects with all applicable Legal Requirements.

	Exchange of Information.  Parent and the Company each shall promptly supply the other with any information that
may be required in order to effectuate any filings or application pursuant to Section 5.6(a).  Except where prohibited by
applicable Legal Requirements, and subject to the Confidentiality Agreement, each of the Company and Parent shall consult with the
other prior to taking a position with respect to any such filing, shall permit the other to review and discuss in advance, and
consider in good faith the views of the other in connection with any analyses, appearances, presentations, memoranda, briefs, white
papers, arguments, opinions and proposals before making or submitting any of the foregoing to any Governmental Entity by or on
behalf of any party hereto in connection with any investigations or proceedings in connection with this Agreement or the transactions
contemplated hereby (including under any antitrust or fair trade Legal Requirement), coordinate with the other in preparing
and exchanging such information and promptly provide the other (and its counsel) with copies of all filings, presentations or
submissions (and a summary of any oral presentations) made by such party with any Governmental Entity in connection with this
Agreement or the transactions contemplated hereby, provided that with respect to any such filing, presentation or submission,
each of Parent and the Company need not supply the other (or its counsel) with copies (or in the case of oral presentations, a
summary) to the extent that any law, treaty, rule or regulation of any Governmental Entity applicable to such party requires such party
or its Subsidiaries to restrict or prohibit access to any such properties or information.

	Notification.  Each of Parent and the Company will notify the other promptly upon the receipt of:  (i) any
comments from any officials of any Governmental Entity in connection with any filings made pursuant hereto 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 with, any Legal Requirements.  Whenever any event occurs that is required to be set forth in an amendment or supplement to
any filing made pursuant to Section 5.6(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.

	Reasonable Efforts.  Subject to the express provisions of Section 5.2 and
Section 5.3 hereof and upon the terms and subject to the conditions set forth herein, each of the parties agrees to use
commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this Agreement, including using commercially reasonable
efforts to accomplish the following:  (i) the taking of commercially reasonable acts necessary to cause the conditions precedent
set forth in Article VI to be satisfied, (ii) the obtaining of all necessary actions or non-actions, waivers, consents,
approvals, orders and authorizations from Governmental Entities and the making of all necessary registrations, declarations and filings
(including registrations, declarations and filings with Governmental Entities, if any) and the taking of commercially reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the defending of
any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby and (iv) the execution or delivery of any additional instruments necessary
to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.  In connection with and
without limiting the foregoing, the Company and its Board of Directors shall, if any takeover statute or similar Legal Requirement is or
becomes applicable to the Merger, this Agreement or any of the transactions contemplated by this Agreement, use commercially
reasonable efforts to ensure that the Merger and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such Legal Requirement
on the Merger, this Agreement and the transactions contemplated hereby. In addition, nothing herein shall require Parent to litigate with
any Governmental Entity or third party.
	Limitation on Divestiture.  Notwithstanding anything in this Agreement to the contrary,
nothing contained in this Agreement shall be deemed to require Parent or the Company or any Subsidiary or affiliate thereof to agree to
any Action of Divestiture.   The Company shall not take or agree to take any Action of Divestiture without the prior written consent of
Parent.  For purposes of this agreement, an "Action of Divestiture" shall mean (x) any license, sale or other
disposition or holding separate (through establishment of a trust or otherwise) of any shares of capital stock or of any business, assets
or properties of Parent, its subsidiaries or affiliates or of the Company or its Subsidiaries, (y) the imposition of any limitation on
the ability of Parent, its subsidiaries or affiliates or the Company or its Subsidiaries 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 and its Subsidiaries, or (z) the imposition of any impediment on Parent, its subsidiaries or
affiliates or the Company or its Subsidiaries under any statute, rule, regulation, executive order, decree, order or other legal restraint
governing competition, monopolies or restrictive trade practices.  In addition, nothing herein shall require Parent to litigate with any
Governmental Entity.

5.7   Notification of Certain Matters
 .  

	By the Company.  The Company shall give prompt notice to Parent of any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate in any material respect, or any failure of the Company to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement.

	By Parent.  Parent shall give prompt notice to the Company of any representation or warranty made by it contained
in this Agreement becoming untrue or inaccurate in any material respect, or any failure of Parent to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement.

5.8   Third-Party Consents
 .  As soon as practicable following the date hereof, the Company will use commercially reasonable efforts (without
any obligation on the part of the Company or Holdco to incur any material cost or expense or to incur any additional material obligation
or suffer the loss of any material right or benefit) to give any required notices and to obtain any consents, waivers and approvals under
any of its or its Subsidiaries' respective Contracts required to be obtained in connection with the consummation of the transactions
contemplated hereby, including all consents, waivers and approvals set forth in Section 2.3(b) of the Company Disclosure
Letter. 

5.9   Equity Awards and Employee
Matters
 .  

	Employee Stock Options. As soon as practicable following the date hereof and
consistent with their terms, the Company shall deliver notice to the holders of Company Options, which such notice shall be in
compliance with the terms of such Company Options, that the Company Options will be cancelled or terminated prior to the Closing and
treated in the manner set forth in Section 1.6(d) hereof.  Any materials to be submitted to the holders of Company Options in
connection with the notice required under this Section 5.9 shall be subject to review and approval by Parent.  The
Company will grant no new Company Options after the Adjustment Date.
	Termination of Company Employee Stock Purchase
Plans.  The Company shall ensure that, after the date of this Agreement, participants in the Company Purchase Plans will not
be permitted to increase their elections under such plans.  As of June 15, 2006, each of the Company Purchase Plans shall be
terminated.  The rights of participants in each Company Purchase Plan with respect to any offering period then underway under such
Company Purchase Plan shall be determined by treating the last Business Day prior to, or if more administratively advisable, the last
payroll date of the Company immediately prior to, June 30, 2006, as the last day of such offering period and by making such other
pro-rata adjustments as may be necessary to reflect the shortened offering period but otherwise treating such shortened offering period as
a fully effective and completed offering period for all purposes under such Company Purchase Plan.  Outstanding rights to purchase
Company Common Stock will be exercised in accordance with the Company Purchase Plans, and each share of Company Common
Stock purchased pursuant to such exercise will by virtue of the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive Merger Consideration, without the issuance of certificates representing issued and outstanding
shares of Company Common Stock to participants under the Company Purchase Plans.  Prior to the Effective Time, the Company shall
take all actions (including, if appropriate, amending the terms of such the Company Purchase Plan and timely distributing any notices
required by the terms of the Company Purchase Plans) that are necessary to give effect to the transactions contemplated by this
Section 5.9(b). Any materials to be submitted to participants in the Company
Purchase Plan shall be subject to review and approval by Parent.  The Company will issue no new purchase rights under the Company
Purchase Plan after June 30, 2006.
	Spin-off and Continuation of 401(k) Plans.

Prior to the Effective Date, the Company shall amend or cause to be amended, as needed, any and all Company Employee Plans
which include or are intended to include a "qualified cash or deferred arrangement" described in Code Section 401(k) (each a "401(k)
Plan") effective no later than the Effective Date in accordance with the following:

	To provide that the AP Purchase effectively creates a distributable event (notwithstanding the "same desk rule") under
each 401(k) Plan with respect to any and all 401(k) Plan participants (and related surviving beneficiaries or alternate payees) who (i)
upon the AP Purchase will be employed by the AP Company or any of its subsidiaries or affiliates, or (ii) as of the AP Purchase date
were last employed by any of the business operations acquired in the AP Purchase (collectively, the "AP Participants"); and
	To ensure that Parent shall have the right to amend, merge or terminate each such 401(k) Plan thereafter.

401(k) Plan amendments to accomplish the foregoing actions shall be proposed to Parent for its review and approval before being
adopted.  Copies of the approved amendments and corresponding board of directors' resolutions, as adopted, shall be provided to
Parent in advance of the Closing.  

	Company Employees.  Company
Employees shall be eligible to receive benefits consistent with Parent's applicable human resources policies.  Parent will or will cause
the Surviving Corporation or appropriate subsidiary of Parent to give Company Employees full credit under such policies for prior
service at the Company for purposes of determination of the level of benefits under Parent's benefit plans, programs or policies for prior
service at the Company; provided that such credit does not result in duplication of benefits. Notwithstanding the foregoing, nothing in
this Section 5.9(d) shall limit or prevent Parent or Company from modifying, amending, or terminating any employee benefit plans,
programs, or policies at any time in their sole discretion. 
	Change in Control Agreements.  Immediately prior to the Effective Time, all amounts
due for payments, acceleration of vesting of equity awards and extension of health benefits which may be due to employees or
directors of the Company pursuant to an agreement set forth in Section 2.15(j) of the Company Disclosure Letter, as a result of
the consummation of the Merger or the execution of this Agreement, shall be deemed to have been incurred by virtue of the
consummation of the Merger. The Company shall treat any conditions other than the consummation of the Merger or the execution of
this Agreement (such as actual or constructive termination of employment in connection with the Merger) as satisfied. It is
acknowledged and agreed that, upon consummation of the Merger, all further conditions (such as actual or constructive termination of
employment in connection with the Merger) set forth in any such agreement shall be deemed satisfied and that all such payments,
vesting of equity awards and extension of health benefits shall be made without regard to the occurrence of any subsequent event;
provided, (i) that cash payments may be made in lieu of health benefits, (ii) no such cash payments in lieu of health benefits
shall be made to any Person who receives health benefits as an employee of Parent following the Effective Time and (iii) such
payments, vesting acceleration and health benefits (or payment in lieu thereof) shall be conditioned upon receipt by Parent of a release
and waiver of claims and agreement to the foregoing in form and substance reasonably satisfactory to Parent.  The Company shall use
commercially reasonable efforts to accomplish the foregoing, including obtaining such releases and agreements prior to the Effective
Time.  

5.10   Indemnification.

	Indemnity.  From and after the Effective Time, Surviving Corporation will assume without
further action by any of the parties, fulfill and honor in all respects the obligations of the Company pursuant to all rights to
indemnification and exculpation from liabilities or acts or omissions occurring at or prior to the Effective Time (and rights for
advancement of expenses) now existing in favor of the current or former directors or officers of the Company in its Articles of
Incorporation or bylaws or any indemnification agreements between the Company and its directors and officers as of the date hereof
(the "Indemnified Parties"), subject to applicable law and the releases that the shareholders of HoldCo are
executing and delivering in connection with the closing of the Stock Purchase Agreement.  The Articles of Incorporation and Bylaws of
the Surviving Corporation will contain provisions with respect to exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Articles of Incorporation and Bylaws of the Company as in effect on the date hereof,
which provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner
that would adversely affect the rights thereunder of Indemnified Parties, unless such modification is required by law.  
	Insurance.  For a period of six years after the Effective Time, Surviving Corporation
will cause to be maintained 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 for a period of
six years; provided, however, that in no event will the Surviving Corporation be required to expend in excess of
250% of the annual premium currently paid by the Company for such coverage (and to the extent annual premium would exceed 250%
of the annual premium currently paid by the Company for such coverage, the Surviving Corporation shall use commercially reasonable
efforts to cause to be maintained the maximum amount of coverage as is available for such 250% of such annual premium) and
provided further, however, that notwithstanding the foregoing, Surviving Corporation may satisfy its obligations under
this Section 5.10(b) by purchasing a "tail" policy under the Company's existing directors' and officers'
insurance policy which (i) has an effective term of six 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, and (iii) contains terms and conditions that are comparable to the terms and conditions of the Company's
directors' and officers' insurance policy in effect as of the date hereof.
	Third Party Beneficiaries.  This Section 5.10 is intended to be for the
benefit of, and shall be enforceable by the Indemnified Parties and their heirs and personal representatives and shall be binding on the
Surviving Corporation and its respective successors and assigns.  In the event the Surviving Corporation or its successor or assign
(i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person (including but not limited
to a reorganization by Parent), then, and in each case, proper provision shall be made so that the successor and assign of the
Surviving Corporation shall honor the obligations set forth with respect to the Surviving Corporation in this
Section 5.10(c).  

5.11   Section 16 Matters
 .  Prior to the Effective Time, the Company shall take all such steps as may be required (to the extent permitted
under applicable law) to cause any dispositions of Company Common Stock (including derivative securities with respect to Company
Common Stock) resulting from the transactions contemplated by Article I of this Agreement by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act. 

5.12   FIRPTA Compliance
 .  On the Closing Date, the Company shall deliver to Parent 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).

5.13   Insurance Approval
 .  The Company shall deliver to Parent at least 15 days prior to the Closing a letter in a form acceptable to Parent
validly executed by an officer of the Company, which authorizes Parent's insurance broker to act as the Company's insurance broker of
record with respect to all insurance policies held by the Company.

5.14   Estimated Expenses

.  At the time of delivery of the Adjustment Balance Sheet, the Company shall provide Parent with a statement of its and
HoldCo's estimated Transaction Costs showing detail of accrued (both paid and unpaid) Transaction Costs incurred by the Company
and HoldCo as of the Adjustment Date, and a good faith estimation of Transaction Costs  that the Company and HoldCo estimate will
be incurred in completing the transactions contemplated by this Agreement, in form and substance reasonably satisfactory to Parent
(the  "Statement of Expenses"), and the Statement of Expenses shall be
certified as true and correct in all material respects in form acceptable to Parent as of the Adjustment Date by the Company's and
HoldCo's Chief Financial Officers.  The accrued unpaid expenses and estimated expenses reflected in the Statement of Expenses are
collectively referred to herein as the "Estimated Transaction Costs." The Statement of Expenses will reflect all
Transaction Costs accrued and expected to be incurred by the Company and HoldCo as a result of the negotiation and effectuation of
this Agreement and the transactions contemplated hereby.

ARTICLE VI

CONDITIONS TO THE
MERGER

6.1   Conditions to the Obligations of Each Party to Effect the Merger
 .  The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of the following conditions:

	Company Shareholder Approval.  This Agreement shall have been approved and adopted, and the Merger shall
have been duly approved, by the requisite vote under applicable law, by the shareholders of the Company.
	No Order.  No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which (i) is in effect and (ii) has the effect of
making the Merger illegal or otherwise prohibiting or preventing consummation of the Merger.
	HSR Act. All waiting periods
(and any extension thereof) under the HSR Act relating to the transactions contemplated hereby, if applicable, will have
expired or terminated early.  All other foreign antitrust approvals reasonably determined by Parent to be required to be obtained prior to
the Merger in connection with the transactions contemplated hereby shall have been obtained.

	Stock Purchase. The Stock Purchase shall close instantaneously prior to the Merger.

	Tail Policy.  The tail policy for D&O insurance coverage referenced in Section 5.10 shall have been bound and
coverage shall be in force, as evidenced by a certificate from the tail policy insurer.

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

	Representations and Warranties.  The representations and warranties of the
Company contained in this Agreement shall be true and correct on the date hereof and as of the Closing Date with the same force and
effect as if made on the Closing Date (except that those representations and warranties which address matters only as of a particular
date shall have been true and correct only on such date), except, in each case, or in the aggregate, as does not constitute a Material
Adverse Effect on the Company at the Closing Date (it being understood that for all purposes of determining the accuracy of such
representations and warranties, all references to the term "Material Adverse Effect" and materiality qualifications and other
qualifications based on the word "material" contained in such representations and warranties shall be disregarded).  Parent
shall have received a certificate with respect to the foregoing signed on behalf of the Company by the chief executive officer of the
Company.
	Agreements and Covenants.  The Company shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the
Closing Date, and Parent shall have received a certificate to such effect signed on behalf of the Company by the chief executive officer
of the Company.

	Sale of AP Business. The AP Purchase shall close immediately prior to the Merger and the Stock Purchase. 
	Material Adverse Effect.  No Material Adverse Effect on the Company shall have
occurred since the date hereof and be continuing.
	No Governmental Restriction; Litigation.  There shall not be any pending or
threatened suit, action or proceeding asserted by any Governmental Authority or third party (i) challenging or seeking to restrain
or prohibit the consummation of the Merger or any of the other transactions contemplated by this Agreement, the Stock Purchase
Agreement of the AP Purchase Agreement, or (ii) seeking to require Parent or the Company or any Subsidiary or affiliate to
effect an Action of Divestiture.
	Third Party Consents and Modifications. The Company shall have exercised
commercially reasonable efforts to deliver to Parent all of the consents and approvals and contract modifications set forth on
Schedule 6.2(f).

	Joint Venture Amendment.  The Company shall have delivered to Parent the letter agreement amending and
modifying the joint venture agreement, duly executed by Amplus, the joint venture partner, in the form set forth on Schedule
6.2(g).

	Lien Release.  Bank of the West shall have released its lien against HoldCo and shall have
released HoldCo from all liabilities and obligations, or otherwise terminated HoldCo's obligations, under any agreement with Bank of the
West relating to the credit agreement, letter of credit financings or other debt financings to which HoldCo is a party.

	 Bond Authorities.  The bond authorities who financed the Fremont and Logan real estate projects shall have
released HoldCo from all liabilities and obligations, or otherwise terminated all of HoldCo's obligations, under any agreement with such
authorities to which HoldCo is a party, or Ardenwood LLC ("Ardenwood") shall have agreed, on terms and
conditions reasonably acceptable to Purchaser, (a) to indemnify, defend and hold HoldCo harmless from all liability to such bond
authorities thereunder, (b) if Ardenwood sells or otherwise transfers to an unaffiliated third party either of the Fremont or Logan real
estate projects, it will at or prior to such sale, (i) cause the applicable bond authority to release HoldCo from all liabilities and
obligations, or otherwise terminate all of HoldCo's obligations, under any agreement with such authority or (ii) pay off the bonds as to
the applicable project and (c) if the Company desires to vacate either of the real estate projects or change its use of such projects in a
manner, which would violate the terms of the applicable bond agreements, but would not violate the Company's lease of such project,
and the Company has provided Ardenwood with not less than six (6) months prior written notice of such intent, Ardenwood will, at or
prior to the expiration of such notice period, (i) obtain a written waiver of such violation from the applicable bond authority, (ii) cause the
applicable bond authority to release HoldCo from all liabilities and obligations, or otherwise terminate all of HoldCo's obligations, under
any agreement with such authority or (iii) pay off the bonds as to the applicable project, all of which obligations will be binding upon any
successor or assign of Ardenwood or the applicable property, so long as the bonds as to such property remain outstanding. 
Such agreement will also provide that neither HoldCo nor the Company shall intentionally default under such agreements (except as
provided in subpart (c) above) and (ii) nothing in such agreement shall in any way amend or constitute a waiver of any of the
Company's obligations under its leases of the projects.

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

	Representations and Warranties.  The representations and warranties of Parent
contained in this Agreement shall be true and correct on the date hereof and as of the Closing Date with the same force and effect as if
made on the Closing Date (except that those representations and warranties which address matters only as of a particular date shall
have been true and correct only on such date), except, in each case, or in the aggregate, as does not materially impede the ability of
Parent to consummate the transactions contemplated by this Agreement in accordance with the terms hereof and applicable Legal
Requirements.  The Company shall have received a certificate with respect to the foregoing signed on behalf of Parent, with respect to
the representations and warranties of Parent, by an authorized executive officer of Parent.
	Agreements and Covenants.  Parent shall have
performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date, and the Company shall have received a certificate with respect to the foregoing
signed on behalf of Parent, with respect to the covenants of Parent, by an authorized executive officer of Parent.

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

7.1   Termination
 .  This Agreement may be terminated at any time prior to the Effective Time, by action taken by the terminating party
or parties, and except as provided below, whether before or after the requisite approvals of the shareholders of the Company:

	by mutual written consent of Parent and the Company;
	by either the Company or Parent if the
Merger shall not have been consummated by September 30, 2006 or such later date, if any, that Parent and the Company
may agree upon in writing (the "End Date"); provided, that the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted
in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of this
Agreement;
	by either the Company or Parent if a Governmental Entity shall have issued an order, decree or ruling or taken any other action
(including the failure to have taken an action), in any case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree, ruling or other action is final and nonappealable; provided that the party seeking to
terminate this Agreement shall have used all commercially reasonable efforts to challenge such order, decree, ruling or action;
provided, further, that notwithstanding anything to the contrary, the Company may challenge such order, decree,
ruling or action until September 30, 2006 but Parent shall have no obligation to remove such order, decree, ruling or action;
	by either the Company or Parent if the required approval of the shareholders of the Company
contemplated by this Agreement shall not have been obtained by reason of the failure to obtain the required vote at a meeting of the
Company shareholders duly convened therefore or at any adjournment thereof; provided, however, that the right to
terminate this Agreement under this Section 7.1(d) shall not be available to the Company where the failure to obtain
Company shareholder approval shall have been principally and proximately caused by the action or failure to act of Company which
constitutes a breach by the Company of this Agreement;
	by Parent (at any time prior to the adoption and approval of this Agreement and the Merger by the
required vote of the shareholders of the Company) if a Triggering Event (as defined below) with respect to the Company or a material
breach of Section 5.3 of this Agreement shall have occurred;
	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 6.3(a) or Section 6.3(b) would not be satisfied as of the time of such
breach or as of the time such representation or warranty shall have become untrue, provided that if such inaccuracy in
Parent's representations and warranties or breach by Parent is curable by Parent prior to the End Date through the exercise of
commercially reasonable efforts, then the Company may not terminate this Agreement under this Section 7.1(f) prior to
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 any such curable breach through such 30 day period (it being understood that the
Company may not terminate this Agreement pursuant to this paragraph (f) if it shall have materially breached this Agreement or if
such breach by Parent is cured within such 30 day period); 
	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 6.2(a) or Section 6.2(b) would not be satisfied as of
the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such
inaccuracy in 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 commercially reasonable efforts, then Parent may not terminate this Agreement under this
Section 7.1(g) prior to 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 any such curable breach through
such 30 day period (it being understood that Parent may not terminate this Agreement pursuant to this paragraph (g) if it shall
have materially breached this Agreement or if such breach by the Company is cured within such 30 day period); and
	by either the Company or Parent if either of the Stock Purchase Agreement or the AP Purchase Agreement is terminated.

For the purposes of this Agreement, a "Triggering Event," with respect to the Company, shall be deemed to
have occurred if:  (i) its Board of Directors or any committee thereof shall for any reason have withdrawn or shall have amended
or modified in a manner adverse to Parent its recommendation in favor of, the adoption and approval of the Agreement or the approval
of the Merger, (ii) it shall have failed to include in the Proxy Statement the recommendation of its Board of Directors in favor of
the adoption and approval of the Agreement and the approval of the Merger, (iii) its Board of Directors fails to reaffirm (publicly, if
so requested) its recommendation in favor of the adoption and approval of the Agreement and the approval of the Merger within
ten calendar days after Parent requests in writing that such recommendation be reaffirmed, (iv) its Board of Directors or
any committee thereof shall have approved or recommended any Acquisition Proposal, (v) the Company shall have entered into
any definitive agreement, contract or commitment providing for the consummation of any Acquisition Proposal; or (vi) a tender or
exchange offer relating to its securities shall have been commenced by a Person unaffiliated with HoldCo or Parent and the Company
shall not have sent to its security holders pursuant to Rule 14e-2 promulgated under the Securities Act, within ten business
days after such tender or exchange offer is first published, sent or given, a statement disclosing that the Board of Directors of the
Company recommends rejection of such tender or exchange offer.

7.2   Notice of Termination; Effect of Termination
 .  Any termination of this Agreement under Section 7.1 above will be effective immediately upon the
delivery of a valid written notice of the terminating party to the other party hereto.  In the event of the termination of this Agreement as
provided in Section 7.1, this Agreement shall be of no further force or effect and there shall be no further liability on the
part of any of the parties, except (i) as set forth in Section 5.4(a), this Section 7.2,
Section 7.3 and Article VIII, 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 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.

7.3   Fees and
Expenses
 .  

	General.  Except as set forth in this Section 7.3, 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 Merger
is consummated; provided, however, that the fees and expenses incurred by HoldCo or the Company in order to
consummate the transactions contemplated hereby and by the Stock Purchase Agreement and AP Purchase Agreement (including
without limitation the fees and expenses of The Spartan Group, WSGR, accountants, SEC) shall be paid from the Merger Consideration
and the Parent shall pay 50% of any filing fee for any Notification and Report Forms filed with the FTC and DOJ under the HSR Act and
financial printer costs.
	Company Payment.  

	Payment.  In the event that this Agreement is terminated by Parent or the
Company, as applicable, pursuant to Sections 7.1(d) or (e), the Company shall promptly, but in no event later
than two business days after the date of such termination, pay Parent a fee equal to $4,000,000 in immediately available
funds (the "Termination Fee"); provided, that in the case of termination under Section
7.1(d):  (a) such payment shall be made only if following the date hereof and prior to the termination of this Agreement,
there has been public disclosure of an Acquisition Proposal with respect to the Company and within 12 months following the termination
of this Agreement an Acquisition of the Company is consummated or the Company enters into an agreement providing for an
Acquisition of the Company, and (b) such payment shall be made promptly, but in no event later than two business days
after the consummation of such Acquisition of the Company or the entry into such agreement by the Company.

	Interest and Costs; Other Remedies.  The Company acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by this Agreement, and that, without these
agreements, Parent would not enter into this Agreement; accordingly, if the Company fails to pay in a timely manner the amounts due
pursuant to this Section 7.3(b), and, in order to obtain such payment, Parent makes a claim that results in a judgment
against the Company for the amounts set forth in this Section 7.3(b), the Company shall pay to Parent the reasonable
costs and expenses of Parent (including reasonable attorneys' fees and expenses) in connection with such suit, together with interest
on the amounts set forth in this Section 7.3(b) at the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made.  Payment of the fees described in this Section 7.3(b) shall not be in lieu of damages incurred in the
event of breach of this Agreement.
	Certain Definitions.  For the purposes of this Section 7.3(b) only,
"Acquisition," with respect to a party hereto, shall mean any of the following transactions (other than the
transactions contemplated by this Agreement):  (i) a merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the party pursuant to which the equity interests held in such party and retained following such
transaction or issued to or otherwise received in such transaction by the shareholders of the party immediately preceding such
transaction constitute less than 50% of the aggregate equity interests in the surviving or resulting entity of such transaction or any direct
or indirect parent thereof, (ii) a sale or other disposition by the party of assets representing in excess of 50% of the aggregate fair
market value of the party's business immediately prior to such sale, or (iii) the acquisition by any Person or group (including by
way of a tender offer or an exchange offer or issuance by the party or such Person or group), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing in excess of 50% of the voting power of the then
outstanding shares of capital stock of the party.

7.4   Amendment
 .  Subject to applicable law, this Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of the Merger by the shareholders of the Company,
provided, after approval of the Merger by the shareholders of the Company, no amendment shall be made which by law or in
accordance with the rules of any relevant stock exchange or Nasdaq requires further approval by the shareholders of the Company
without such further shareholder approval.  This Agreement may not be amended except by execution of an instrument in writing signed
on behalf of each of Parent and the Company.

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

ARTICLE VIII

GENERAL PROVISIONS

8.1   Non-Survival of Representations and Warranties
 .  The representations and warranties of the Company and Parent contained in this Agreement, or any instrument
delivered pursuant to this Agreement, shall terminate at the Effective Time, and only the covenants that by their terms survive the
Effective Time and this Article VIII shall survive the Effective Time.

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

	if to Parent, to:

Omron Management Center of America, Inc.

   East Commerce

   Schaumburg, Illinois 60045

Attention:  President

Telephone No.: (847) 843-7852

Telecopy No.: (847) 884-1866

with copies to:

Enterprise Law Group, LLP

Three First National Plaza

70 West Madison Street, Suite 740

Chicago, Illinois 60602

Attention:Steven K. Sims, Esq.

Telephone No.:  (312) 578-0200 x101

Telecopy No.:  (312) 578-0202

if to the Company, to:

Scientific Technologies Incorporated

   6550 Dumbarton Circle

   Fremont, California 94555

Attention:  Joseph J. Lazzara, President and Chief Executive Officer

Telephone No.: (510) 608-3400

Telecopy No.: (510) 744-1442

with copies to:

Wilson Sonsini Goodrich & Rosati, P.C.

   701 Fifth Avenue, Suite 5100

   Seattle, Washington 98104

Attention:  Christian E. Montegut, Esq.

Telephone No.: (206) 883-2500

Telecopy No.: (206) 883-2699

8.3   Interpretation; Knowledge
 .  

	When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.  When a reference is made in this Agreement to Sections,
such reference shall be to a section of this Agreement unless otherwise indicated.  For purposes of this Agreement, the words
"include," "includes" and "including," when used herein, shall be deemed
in each case to be followed by the words "without limitation."  The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  When
reference is made herein to "the business of" an entity, such reference shall be deemed to include the business of
such entity and its Subsidiaries, taken as a whole, unless otherwise expressly provided herein.  The word "affiliate"
when used herein shall mean, with respect to any specified person, any other person, that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, such specified person.
	For purposes of this Agreement, the term "Knowledge" means, with respect to a
party hereto, with respect to any matter in question, that any of the "officers" (as such term is defined in Rule 16a-1(f)
promulgated under the Exchange Act) of such party has actual knowledge of such matter, after a reasonable inquiry of such advisor(s)
or employee(s) of the party who would reasonably be expected to have actual knowledge of such matter.
	For purposes of this Agreement, the term "Material Adverse
Effect," when used in connection with an entity, means any change, event, violation, inaccuracy, circumstance or effect (any
such item, an "Effect"), individually or when taken together with all other Effects that have occurred prior to the date
of determination of the occurrence of the Material Adverse Effect, that is or is reasonably likely to (i) be materially adverse to the
business, operations, assets (including intangible assets), capitalization, financial condition or results of operations of such entity taken
as a whole with its Subsidiaries or, in the case of Company and its Subsidiaries, considering only the effect on the business, operations,
assets (including intangible assets), capitalization, financial condition or results of operations of SPG, or (ii) materially impede the
ability of such entity, or, in any case, Parent, to consummate the transactions contemplated by this Agreement in accordance with the
terms hereof and applicable Legal Requirements; provided, however, that in no event shall any of the
following, alone, be deemed to constitute a material adverse effect on or with respect to the Company: (i) actions or omissions of the
Company or any of its subsidiaries taken with the prior written consent of Parent; (ii) any change in the price or trading volume of the
Company Common Stock; (iii) any changes affecting the United States economy in general or generally affecting the industries in which
the Company operates, except any such change which as a disproportionate impact on Company; (iv) any changes affecting general
worldwide economic or capital market conditions; (v) any changes that the Company has reasonably demonstrated are principally the
result of any legally required announcement or announcement made with prior approval of Parent or the pendency of the Merger and
the other transactions contemplated by the Merger Agreement thereafter; (vi) any affects resulting from changes after the date of this
Agreement in U.S. GAAP; or (ix) any affects resulting from any legal proceeding
against the Company by shareholders of the Company challenging or seeking to restrain or prohibit the consummation of the Merger or
alleging breach of fiduciary duty in connection therewith.
	For purposes of this Agreement, the term "Person" shall mean any individual,
corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association,
organization, entity or Governmental Entity.

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

8.5   Entire Agreement; Third-Party Beneficiaries
 .  This Agreement and the documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Disclosure Letter, Stock Purchase Agreement and the AP Purchase
Agreement (i) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood
that the Confidentiality Agreement shall continue in full force and effect until the Closing and shall survive any termination of this
Agreement and (ii) are not intended to confer upon any other Person any rights or remedies hereunder, except as specifically
provided, following the Effective Time, in Section 5.10. 

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

8.7   Other Remedies

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

8.8   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 law thereof.    Each of the parties hereto
irrevocably and unconditionally submits to the exclusive jurisdiction of any Delaware State court, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated hereby (and each agrees that no such action, suit or
proceeding relating to this Agreement shall be brought by it or any of its affiliates except in such courts). Each of the parties hereto
further agrees that, to the fullest extent permitted by applicable law, service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be effective service of process for any action, suit or proceeding
in Delaware with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding
sentence. Each of the parties hereto irrevocably and unconditionally waives (and agrees not to plead or claim) any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in any Delaware
State court, or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

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

8.10   Assignment

 .  No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties, except that Parent may assign its rights and delegate its obligations hereunder to its affiliates as
long as Parent remains ultimately liable for all of Parent's obligations hereunder.  Any purported assignment in violation of this
Section 8.10 shall be void.  Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted assigns.

*****

IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be executed by their duly
authorized respective officers as of the date first written above.
Omron Management Center of America, Inc.

 

By:  __________________________

Tatsunosuke Goto

President

 

Scientific Technologies Incorporated

 

 By:  __________________________

    Joseph J. Lazzara

President, Chief Executive Officer and Treasurer

 

Scientific Technology Incorporated

 

 By:  __________________________

Anthony R. Lazzara

President and ChairmanQ1 2006 Exhibit 10.2

Exhibit 10.2

HoldCo Stock Purchase
Agreement

by and among

Omron Management Center of America, Inc.,

Scientific Technology Incorporated,

Scientific Technologies Incorporated,

the Shareholders,

and

Joseph J. Lazzara, as Shareholders' Representative

April 24, 2006

TABLE OF CONTENTS

	
 	
Page
	
ARTICLE 1 PURCHASE AND SALE OF COMPANY CAPITAL STOCK 	
2
	
      Section 1.1.  Purchase and Sale 	
2
	
      Section 1.2.   Consideration 	
2
	
      Section 1.3.   Closing 	
2
	
      Section 1.4.   No Further Ownership Rights in Shares 	
4
	
      Section 1.5.   Lost, Stolen or Destroyed Certificates 	
4
	
      Section 1.6.   Taking of Necessary Action; Further Action 	
4
	
      Section 1.7.   Escrow 	
4
	
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF HOLDCO AND THE SHAREHOLDERS 	
5
	
      Section 2.1.   Organization of HoldCo 	
5
	
      Section 2.2.   Subsidiaries 	
5
	
      Section 2.3.   HoldCo Capital Structure 	
5
	
      Section 2.4.   Authority 	
6
	
      Section 2.5.   No Conflict 	
6
	
      Section 2.6.   Consents 	
7
	
      Section 2.7.   Company Financial Statements 	
7
	
      Section 2.8.   No Undisclosed Liabilities 	
7
	
      Section 2.9.   Tax Matters 	
7
	
      Section 2.10.   Restrictions on Business Activities 	
9
	
      Section 2.11.   Agreements, Contracts and Commitments 	
9
	
      Section 2.12.   Litigation 	
10
	
      Section 2.13.   Books and Records 	
10
	
      Section 2.14.   Brokers' and Finders' Fees; Third Party Expenses 	
10
	
      Section 2.15.   Insurance 	
10
	
      Section 2.16.   Compliance with Laws 	
10
	
      Section 2.17.   Governmental Authorizations 	
10
	
      Section 2.18.   Environmental Matters. 	
11
	
      Section 2.19.   Intellectual Property. 	
13
	
      Section 2.20.   Title to Properties 	
17
	
      Section 2.21.   Absence of Certain Changes or Events 	
17
	
      Section 2.22.   Complete Copies of Materials 	
17
	
      Section 2.23.   Representations Complete 	
17
	
ARTICLE 2A FURTHER REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS 	
18
	
      Section 2A.1.   Ownership of Shares 	
18
	
      Section 2A.2.   Tax Matters 	
18
	
      Section 2A.3.   Absence of Claims by the Shareholders 	
18
	
      Section 2A.4.   Authority 	
18
	
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 	
19
	
      Section 3.1.   Organization, Standing and Power 	
19
	
      Section 3.2.   Authority 	
19
	
      Section 3.3.   Capital Resources 	
19
	
      Section 3.4.   No Conflict 	
19
	
      Section 3.5.   Consents 	
19
	
ARTICLE 4 CONDUCT PRIOR TO CLOSING 	
20
	
      Section 4.1.   Shareholder Conduct 	
20
	
ARTICLE 5 ADDITIONAL AGREEMENTS 	
20
	
      Section 5.1.   Confidentiality 	
20
	
      Section 5.2.   Expenses 	
20
	
      Section 5.3.   Public Disclosure 	
21
	
      Section 5.4.   Reasonable Efforts 	
21
	
      Section 5.5.   Notification of Certain Matters 	
21
	
      Section 5.6.   Additional Documents and Further Assurances 	
21
	
      Section 5.7.   HoldCo Cash and Liabilities 	
22
	
      Section 5.8.   Tax Matters 	
22
	
ARTICLE 6 CONDITIONS TO CLOSING 	
22
	
      Section 6.1.   Conditions to Obligations of Each Party to Effect the Acquisition 	
22
	
      Section 6.2.   Additional Conditions to Obligations of Purchaser 	
22
	
      Section 6.3.   Additional Conditions to the Obligations of Shareholders 	
25
	
ARTICLE 7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 	
26
	
      Section 7.1.   Survival of Representations, Warranties and Certain Indemnification Obligations 	
26
	
      Section 7.2.   Indemnification 	
26
	
      Section 7.3.   Special Indemnification. 	
27
	
      Section 7.4.   Indemnification Procedures. 	
28
	
      Section 7.5.   Escrow Funds. 	
30
	
      Section 7.6.   Distribution of Escrow Funds 	
30
	
      Section 7.7.   Shareholders' Representative 	
32
	
ARTICLE 8 TERMINATION; WAIVER AND AMENDMENT 	
33
	
      Section 8.1.   Termination 	
33
	
      Section 8.2.   Effect of Termination 	
34
	
      Section 8.3.   Waiver; Amendment 	
34
	
      Section 8.4.   Profit Capture 	
35
	
ARTICLE 9 GENERAL PROVISIONS 	
37
	
      Section 9.1.   Notices 	
37
	
      Section 9.2.   Interpretation 	
38
	
      Section 9.3.   Counterparts 	
38
	
      Section 9.4.   Entire Agreement; Assignment 	
38
	
      Section 9.5.   Severability 	
38
	
      Section 9.6.   Other Remedies 	
39
	
      Section 9.7.   Governing Law 	
39
	
      Section 9.8.   Rules of Construction 	
39
	
      Section 9.9.   Additional Shareholders 	
39

INDEX OF EXHIBITS

	
Exhibit
	
Description

	
Exhibit A 
	
List of Shareholders of HoldCo

	
Exhibit B
	
Form of Escrow Agreement

	
Exhibit C 
	
Form of Non-Competition and Non-Solicitation Agreement

	
Exhibit D 
	
Form of Shareholder Release

HOLDCO STOCK PURCHASE AGREEMENT

THIS HOLDCO STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of April 24, 2006 by and among Omron Management Center of America, Inc., a Delaware corporation
("Purchaser"), Scientific Technology Incorporated, a California corporation ("HoldCo"),
Scientific Technologies Incorporated, an Oregon corporation ("Company"), all of the shareholders of HoldCo listed
on Exhibit A hereto (together, the "Shareholders"), which Exhibit A includes the number of
shares each Shareholder owns, and Joseph J. Lazzara, as the Shareholders' Representative.

RECITALS

A.HoldCo owns approximately 86% of the outstanding capital stock of the Company, and certain of the
Shareholders are executive officers and members of the board of directors of the Company.  The Company is organized into two
products groups:  Safety Products Group ("SPG") and Automation Products Group
("APG").

B.The Board of Directors of the Purchaser believes it is in the best interests of the Purchaser and its
shareholders to acquire all of the issued and outstanding capital stock owned by the Shareholders upon the terms and subject to the
conditions set forth herein (such transaction, the "Acquisition"), such that upon consummation of the Acquisition
the Purchaser will own all of the issued and outstanding capital stock of HoldCo.

C.The Shareholders desire to sell all of the capital stock of HoldCo owned by them to the Purchaser, all
upon the terms and subject to the conditions set forth herein.

D.As an inducement for the Purchaser to consummate the Acquisition, HoldCo, the Company and the
Shareholders have agreed to make certain representations, warranties, covenants and other agreements in connection with the
Acquisition, all as set forth herein. 

E.A portion of the cash otherwise payable by Purchaser in connection with the purchase and sale of capital
stock of HoldCo will be placed in escrow by Purchaser, the release of which amount will be contingent upon certain events and
conditions, all as more fully set forth in Article 7 hereof.

F.Immediately prior to the Acquisition, the Company will sell and transfer to APG Buyer all of its right, title
and interest in the shares of capital stock of Sub I, Sub II, and Sub III and any other Non-SPG Assets, and APG
Buyer shall assume all Assumed Liabilities, pursuant to that certain APG Stock and Asset Purchase Agreement (the "AP
Purchase Agreement") by and among the Company, HoldCo and APG Buyer dated as of the date hereof (the "AP
Asset Purchase").  (All defined terms in this Recital F which are not defined herein shall have the meanings ascribed to them
in the AP Purchase Agreement.)

G.Instantaneously following the Acquisition, HoldCo will merge with and into the Company (the
"Merger") pursuant to that certain Agreement and Plan of Merger by and among Purchaser, HoldCo and the
Company dated as of the dated hereof (the "Merger Agreement").

AGREEMENT

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

ARTICLE 1

PURCHASE AND SALE OF COMPANY CAPITAL STOCK

Section 1.1. Purchase and Sale

.  At the Closing (as defined in Section 1.3 hereof), and upon the terms and subject
to the conditions of this Agreement, the Purchaser shall purchase from the Shareholders, and the Shareholders shall sell, convey,
transfer, assign and deliver to the Purchaser, free and clear of all liens, encumbrances or other defects of title, all of the issued and
outstanding shares of capital stock of HoldCo now beneficially owned or held of record by the Shareholders at the Closing, including all
property or rights issued by HoldCo with respect to such Shares (the "Shares").  The name, address and taxpayer
identification number of each Shareholder, the number and description of such Shares being sold by such Shareholder pursuant hereto,
and the consideration payable in connection with the Acquisition to each Shareholder are set forth on Schedule 2.3(a)
hereto.

Section 1.2.  Consideration
.  Each Shareholder shall be allocated an amount equal to the respective amount set forth in the
column entitled "Purchase Price" opposite such Shareholder's name on Section 2.3(a) of the Disclosure
Letter, the total of which amounts shall equal the Derived Amount (as defined below) in cash, which amounts include the Escrow
Amount.  Such respective amount for each Shareholder is referred to herein as the "Purchase Price."  The
"Derived Amount" shall mean the product of the Per Share Amount (as defined in the Merger Agreement) times the
number of shares of Common Stock of the Company owned by Holdco.

Section 1.3.  Closing
.  

	The closing of the Acquisition (the "Closing") will take place instantaneously prior to
the Merger at the offices of, Wilson Sonsini Goodrich & Rosati, Professional Corporation, located at 650 Page Mill Road,
Palo Alto, California, at a time and date to be specified by the parties, which shall be no later than the second Business Day after the
satisfaction or waiver of the conditions set forth in Article VI (other than those that by their terms are to be satisfied or waived at
Closing), or at such other time, date and location as the parties hereto agree in writing.  The date upon which the Closing actually
occurs is herein referred to as the "Closing Date." "Business Day" shall mean each day that is
not a Saturday, Sunday or other day on which banking institutions located in San Francisco, California, are authorized or obligated by
law or executive order to close.

	The Closing shall be contingent upon (i) the satisfaction of the closing conditions set forth in the
Merger Agreement, unless any such closing conditions are waived, in writing, by the Purchaser, the Company and/or the Shareholder
Representative, as applicable, (ii) the filing of the Agreement of Merger (as defined in Section 1.2 of the Merger Agreement),
(iii) the closing of the AP Asset Purchase, unless waived by Purchaser, and (iv) the release of funds from the Exchange
Agent equal to the aggregate Purchase Price, net of the Escrow Amount.

	At the Closing, the Shareholders shall deliver or cause to be delivered to the Purchaser the
following:

	certificates representing the Shares duly endorsed or accompanied by stock powers duly endorsed in
blank, with any required transfer stamps affixed thereto;

	receipts, duly executed by each Shareholder, for receipt of the Purchase Price payable to such
Shareholder pursuant to Section 2.3(a) of the Disclosure Letter, less such Shareholder's Pro Rata Portion of the Escrow
Amount (as such term is defined in Section 1.7)); 

	the Non-Competition and Non-Solicitation Agreement in substantially the form attached hereto as
Exhibit C, duly executed by each of Anthony R. Lazzara, Joseph J. Lazzara, James A. Lazzara and James A.
Ashford;

	the Shareholder Release in substantially the form attached hereto as Exhibit D, duly
executed by each of Anthony R. Lazzara, Joseph J. Lazzara, James A. Lazzara and James A. Ashford;
and

	all other documents, certificates, instruments or writings required to be delivered by the Shareholders on or
prior to the Closing Date pursuant to this Agreement or as may be reasonably requested by Purchaser in order to consummate the
transactions contemplated by this Agreement.

	At the Closing, the Purchaser shall deliver or cause to be delivered to each Shareholder the
following:

	the Purchase Price due to such Shareholder pursuant to Section 2.3(a) of the Disclosure
Letter, less such Shareholder's Pro Rata Portion of the Escrow Amount; 

	the Escrow Agreement attached as Exhibit B hereto (the "Escrow
Agreement"), duly executed by Purchaser; and

	such other documents, certificates or writings required to be delivered by the Purchaser on or prior to the
Closing Date pursuant to this Agreement or as may be reasonably requested by the Shareholders' Representative in order to
consummate the transactions contemplated by this Agreement.

	At the Closing, the Shareholders' Representative shall deliver to the Purchaser the Escrow Agreement,
duly executed by the Shareholders' Representative (as defined in Section 7.5).

	At the Closing, the Purchaser shall deliver to Union Bank of California (the "Escrow
Agent"), in accordance with the Escrow Agreement, an aggregate of US$10,158,800, comprised of (1) US$5,658,800
(the "General Escrow Amount"), (2) US$2,500,000 (the "IP Escrow Amount"), and
(3) US$2,000,000 (the "Environmental Escrow Amount"), by wire transfer in immediately available funds to
the account designated therefor in the Escrow Agreement.  The General Escrow Amount (including the Tax Escrow Amount), IP
Escrow Amount and Environmental Escrow Amount, collectively, are sometimes referred to herein as the "Escrow
Amount."

Section 1.4.  No Further Ownership Rights in
Shares
.  All cash paid in respect of the surrender for exchange of the Shares in accordance with the terms
hereof shall be deemed to be full satisfaction of all of the Shareholders' rights pertaining to such Shares.

Section 1.5.  Lost, Stolen or Destroyed
Certificates
.  In the event any certificates evidencing any of the Shares shall have been lost, stolen or
destroyed, the Purchaser 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 in cash, if any, as may be required pursuant to Section 1.2 hereof; provided,
however, that the Purchaser may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificates to deliver a bond in such sum as it may direct against any claim that may be made against the
Purchaser with respect to the certificates alleged to have been lost, stolen or destroyed.

Section 1.6.  Taking of Necessary Action; Further
Action
.  If, at any time after the Closing Date, any further action is necessary, desirable or reasonably
requested by any party to carry out the purposes of this Agreement and to ensure that HoldCo retains full right, title and possession to
all of its assets, property, rights, privileges, powers and franchises, the Purchaser, the Shareholders and the officers and directors of
HoldCo are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and
necessary action.

Section 1.7  Escrow

.  At the Closing, the Shareholders' Representative and Purchaser shall enter into the Escrow
Agreement with the Escrow Agent.  Pursuant to the terms of the Escrow Agreement, Purchaser shall deposit the Escrow Amount in an
account to be managed and paid out by the Escrow Agent in accordance with the terms of the Escrow Agreement.  Section
1.7 of the Disclosure Letter sets forth, for each Shareholder, the fraction of the Escrow Amount that reflects such Shareholder's pro
rata portion ("Pro Rata Portion").

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

OF HOLDCO AND THE SHAREHOLDERS

HoldCo and each of the Shareholders hereby jointly and severally represents and warrants to the
Purchaser, subject to such exceptions as are specifically disclosed in the disclosure letter (referencing the appropriate section and
paragraph numbers of this Agreement) supplied by HoldCo and the Shareholders to the Purchaser (the "Disclosure
Letter") and dated as of the date hereof, on and at the date hereof, as follows:

Section 2.1.  Organization of HoldCo
.  HoldCo is a corporation duly organized, validly existing and in good standing under the laws of the
State of California.  HoldCo has the corporate power to own its properties and to carry on its business as now being conducted.
HoldCo is duly qualified or licensed to do business and in good standing as a foreign corporation in each jurisdiction in which it
conducts business, except where the failure to be so qualified or licensed would not have, individually or in the aggregate, a material
adverse effect on HoldCo and its subsidiaries.  Section 2.1 of the Disclosure Letter lists the directors and officers of
HoldCo.  HoldCo has delivered a true and correct copy of its Articles of Incorporation and Bylaws, each as amended to date, (together,
the "Charter Documents") to the Purchaser, and each of the Charter Documents is in full force and effect.  HoldCo
is not in violation of any provision of the Charter Documents.

Section 2.2.  Subsidiaries
.  Section 2.2 of the Disclosure Letter sets forth each subsidiary of HoldCo.  HoldCo
is the owner of all the outstanding shares of capital stock of, or other equity or voting interests in, each such subsidiary and all such
shares have been duly authorized, validly issued and are fully paid and nonassessable, free and clear of all liens and encumbrances,
including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other ownership interests, except for
restrictions imposed by applicable securities laws.  Other than the subsidiaries of HoldCo, HoldCo does not own any capital stock of, or
other equity or voting interests of any nature in, or any interest convertible, exchangeable or exercisable for, capital stock of, or other
equity or voting interests of any nature in, any other person, except for passive investments of less than 1% in the equity interests of
public companies as part of HoldCo's cash management program.

Section 2.3.  HoldCo Capital
Structure
.  The authorized capital stock of HoldCo consists of 25,000,000 authorized shares of common
stock, no par value per share, of which 3,200,000 shares are issued and outstanding as of the date hereof (the "HoldCo
Common Stock"); 1,000,000 authorized shares of Class A Preferred Stock, no par value per share, none of which are issued
or outstanding; and 1,000,000 authorized shares of Class B Preferred Stock, no par value per share, none of which are issued or
outstanding.  HoldCo Common Stock is held by the persons, with the domicile addresses and in the amounts set forth in
Section 2.3(a) of the Disclosure Letter.  All outstanding shares of HoldCo Common Stock are duly authorized, validly
issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the Articles of Incorporation or the Bylaws
of HoldCo, or any agreement to which HoldCo is a party or by which it is bound, and have been issued in compliance with federal and
state securities laws.  There are no declared or accrued unpaid dividends with respect to any shares of HoldCo Common Stock.  Other
than HoldCo Common Stock, HoldCo has no other capital stock authorized, issued or outstanding.

	HoldCo has never adopted or maintained any stock option plan or other plan providing for equity
compensation of any person.  There are no options, warrants, calls, rights, commitments or agreements of any character, written or
oral, to which HoldCo is a party or by which it is bound obligating HoldCo to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of HoldCo or obligating HoldCo to grant, extend,
accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or
agreement.  There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with
respect to HoldCo.  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of
HoldCo. 

	Upon completion of the Acquisition, the Purchaser will own one hundred percent (100%) of the issued and
outstanding capital stock of HoldCo, free and clear of all liens and encumbrances.

Section 2.4.  Authority
.  HoldCo has all requisite power and authority to enter into this Agreement and any Related
Agreements (as hereinafter defined) 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 HoldCo 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 HoldCo, and
no further action is required on the part of HoldCo to authorize this Agreement and any Related Agreements to which it is a party and
the transactions contemplated hereby and thereby.  This Agreement and any Related Agreements to which HoldCo is a party have
been duly executed and delivered by HoldCo, and, assuming the due authorization, execution and delivery by the other parties hereto
and thereto, constitute the valid and binding obligation of HoldCo, enforceable in accordance with its terms, except as such
enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy,
insolvency and the relief of debtors and to rules of law governing specific performance, injunctive relief or other equitable remedies.
The "Related Agreements" shall mean all ancillary agreements required in this Agreement to be executed and
delivered in connection with the transactions contemplated hereby, including, without limitation, the APG Stock Purchase Agreement,
Escrow Agreement, and the Merger Agreement.

Section 2.5.  No Conflict
.  Except as set forth in Section 2.5 of the Disclosure Letter, the execution and
delivery by HoldCo of this Agreement and any Related Agreement to which HoldCo is a party and the consummation of the transactions
contemplated hereby and thereby will not (a) conflict with any provision of the Articles of Incorporation, Bylaws or charter
documents of HoldCo, (b) result in any violation or breach of or default under (with or without notice or lapse of time, or both) any
mortgage, indenture, lease, contract, covenant or other agreement, instrument or commitment, permit, concession, franchise or license
(each a "Contract" and, collectively, the "Contracts") to which HoldCo or any of its properties
or assets (whether tangible or intangible) is subject, (c) give rise to a right of termination, cancellation, modification or
acceleration of any obligation or loss of any benefit under any Contract, or (d) result in any violation of any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to HoldCo or any of its properties (whether tangible or intangible) or assets
(any such event described in (a), (b), (c), or (d), a "Conflict").

Section 2.6.  Consents
.  No consent, waiver, approval, order or authorization of, or registration, declaration, notice or filing
with, any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission ("Governmental Entity") or any third party, including a party to any
agreement with HoldCo or any Shareholder (so as not to trigger any Conflict), is required by or with respect to HoldCo or the
Shareholders in connection with the execution and delivery of this Agreement and any Related Agreement to which HoldCo or a
Shareholder is a party or the consummation of the transactions contemplated hereby and thereby, except for such consents, waivers,
approvals, orders, authorizations, registrations, declarations, notices and filings as may be required under applicable securities laws
thereby or made or obtained at or prior to Closing.

Section 2.7.  Company Financial
Statements
.  Section 2.7 of the Disclosure Letter sets forth HoldCo's unaudited balance sheet as
of December 31, 2003, 2004 and 2005 and the related unaudited statements of operations and cash flows for the years then
ended (the "Year-End Financials").  For purposes of this Agreement, "Current Balance Sheet"
shall mean HoldCo's unaudited balance sheet as of December 31, 2005.  The Year-End Financials are correct in all material respects
and have been prepared in accordance with the United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated, except that the Year-End Financials do not contain footnotes.  The
Year-End Financials present fairly in all material respects the financial condition, revenues and expenses of HoldCo as of the dates and
during the periods indicated therein.  The Current Balance Sheet presents fairly in all material respects the financial condition of HoldCo
as of December 31, 2005 (the "Current Balance Sheet Date").

Section 2.8.  No Undisclosed Liabilities
.  Except as set forth in Section 2.8 of the Disclosure Letter, HoldCo has no liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of any type, whether accrued, absolute, contingent,
matured, unmatured or other (whether or not required to be reflected in financial statements in accordance with generally accepted
accounting principles), which individually or in the aggregate (a) has not been reflected in or reserved against in the Current
Balance Sheet, or (b) has not arisen in the ordinary course of business consistent with past practices since the Current Balance
Sheet Date, in either case which amounts do not exceed US$25,000 in the aggregate.

Section 2.9.  Tax Matters
.  

	Definition of Taxes.  For the purposes of this Agreement, "Tax" or,
collectively, "Taxes," means any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions.

	Tax Returns and Audits.  

	HoldCo as of the Closing will have prepared and timely filed all material federal, state, local and foreign
returns, estimates, information statements and reports ("Returns") relating to Taxes that it is obligated to file and
such Returns are true and correct in all material respects.

	HoldCo as of the Closing will have paid all Taxes it is required to pay and will have withheld or paid with
respect to its employees (and timely paid over any withheld amounts to the appropriate taxing authority) all federal and state income
taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes required to be withheld or paid.

	HoldCo has not been delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding,
assessed or proposed against HoldCo, nor has HoldCo executed any waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.

	No audit or other examination of any Return of HoldCo is presently in progress, nor has HoldCo been
notified in writing of any request for such an audit or other examination.  There is no waiver of any statute of limitations for Taxes that is
currently in effect.

	HoldCo has no liabilities for unpaid Taxes as of the Current Balance Sheet Date which have not been
accrued or reserved against in accordance with GAAP on the Current Balance Sheet, whether asserted or unasserted, contingent or
otherwise, and HoldCo has not incurred any liability for Taxes since the Current Balance Sheet Date other than in the ordinary course
of business.

	HoldCo has made available to the Purchaser or its legal counsel copies of all Tax Returns for HoldCo filed
for all periods since its inception.

	There are (and immediately following the Closing there will be) no liens, pledges, charges, claims,
restrictions on transfer, mortgages, security interests or other encumbrances of any sort (collectively, "Liens") on
the assets of HoldCo relating to or attributable to Taxes other than Liens for Taxes not yet due and payable.

	Neither HoldCo nor any Shareholder has knowledge of any basis for the assertion of any claim relating or
attributable to Taxes which, if adversely determined, would result in any Lien on the assets of HoldCo.

	None of HoldCo's assets is treated as "tax-exempt use property," within the meaning of
Section 168(h) of the Code.

	HoldCo 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.

	HoldCo is not, and has not been at any time, a "United States Real Property Holding
Corporation" within the meaning of Section 897(c)(2) of the Code.

	No adjustment relating to any Return filed by HoldCo has been proposed in writing by any tax authority to
HoldCo or any representative thereof.

	HoldCo has not engaged in a transaction that is the same as or substantially similar to one of the types of
transactions the Internal Revenue Service has determined to be a tax avoidance transaction and identified by notice, regulation, or
other form of published guidance as a listed transaction, as set forth in Treasury Reg.   1.6011-4(b)(2).

	Executive Compensation Tax.  There is no contract, agreement, plan or arrangement to which
HoldCo is a party as of the dates hereof, including but not limited to the provisions of this Agreement, covering any employee or former
employee of HoldCo, which, individually or collectively, could give rise to the payment of any amount that would not be deductible
pursuant to Sections 280G, 404 or 162(m) of the Code.

Section 2.10.  Restrictions on Business
Activities
.  There is no agreement (non-compete or otherwise), commitment, judgment, injunction, order or
decree to which HoldCo is a party or otherwise binding upon HoldCo which has or may reasonably be expected to have the effect of
prohibiting or impairing any business practice of HoldCo, any acquisition of property (tangible or intangible) by HoldCo or the conduct of
business by HoldCo.

Section 2.11.  Agreements, Contracts and
Commitments
.  

	Except as set forth in Section 2.11(a) of the Disclosure Letter, HoldCo is not a party to nor
is it bound by any agreement, contract or commitment related to the Safety Products Group segment of the Company's business
("SPG") that is not terminable at will by HoldCo without penalty or that involves payment by or to HoldCo of
US$50,000 or more in the aggregate.

	HoldCo is in compliance with and has not breached, violated or defaulted under, or received notice that it
has breached, violated or defaulted under, any of the terms or conditions of any Contract related to SPG ("SPG
Contract"), nor is HoldCo or any Shareholder aware of any event that would constitute such a breach, violation or default with
the lapse of time, giving of notice or both.  Each SPG Contract is in full force and effect and is not subject to any default thereunder by
any party obligated to HoldCo pursuant thereto.  HoldCo has obtained all necessary consents, waivers and approvals of parties to any
SPG Contract as are required thereunder in connection with the Acquisition or Merger for such SPG Contracts to remain in effect
without modification after the Closing.  Following the Closing, HoldCo will be permitted to exercise all of HoldCo's rights under the SPG
Contracts without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which HoldCo
would otherwise be required to pay had the transactions contemplated by this Agreement not occurred.  HoldCo has provided or made
available to Purchaser copies of each SPG Contract.

Section 2.12.  Litigation
.  There is no action, suit or proceeding of any nature pending, or, to HoldCo's or any Shareholder's
knowledge, threatened, against HoldCo, or its properties or any of its officers or directors, nor, to the knowledge of HoldCo or any
Shareholder, is there any reasonable basis therefor.  There is no investigation pending or, to HoldCo's or any Shareholder's knowledge
threatened, against HoldCo, or its properties or any of its officers or directors (nor, to the knowledge of HoldCo or any Shareholder, is
there any reasonable basis therefor) by or before any Governmental Entity.  No Governmental Entity has at any time challenged or
questioned the legal right of HoldCo to conduct its operations as presently or previously conducted. 

Section 2.13.  Books and Records
.  The books of account, minute books, stock record books, and other records of HoldCo, all of which
have been made available to Purchaser, are complete and correct and have been maintained in accordance with sound business
practices. The minute books of HoldCo contain accurate and complete records of all meetings held of, and corporate action taken by,
the stockholders, the Boards of Directors, and committees of the Boards of Directors of HoldCo, and no meeting of any such
stockholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such
minute books. At the Closing, all of those books and records will be in the possession of HoldCo.

Section 2.14.  Brokers' and Finders' Fees; Third Party
Expenses
.  Except for fees payable to the Spartan Group LLC, pursuant to an engagement letter dated August
29, 2005, a copy of which has been provided to Purchaser, HoldCo has not incurred, nor will it incur, directly or indirectly, any liability
for brokerage or finders' fees or agents' commissions or any similar charges in connection with the Agreement or any transaction
contemplated hereby.

Section 2.15. Insurance
.  Section 2.16 of the Disclosure Letter lists all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees, officers and directors of HoldCo.  There is no claim by
HoldCo or any employee, officer or director of HoldCo pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.  All premiums due and payable under all such policies
and bonds have been paid, and HoldCo is otherwise in material compliance with the terms of such policies and bonds (or other policies
and bonds providing substantially similar insurance coverage).  Neither HoldCo nor any Shareholder has knowledge of any threatened
termination of, or premium increase with respect to, any of such policies.

Section 2.16.  Compliance with Laws
.  HoldCo has complied in all material respects with, is not in material violation of, and has not
received any notices of violation with respect to, any foreign, federal, state or local statute, law or regulation (including, without
limitation, environmental laws and regulations).

Section 2.17.  Governmental Authorizations

.  HoldCo has all of the Governmental Authorizations necessary to permit it to lawfully conduct and operate
its businesses in the manner currently conducted and operate such business and to permit it to own and use its assets in the manner in
which it currently owns and uses such assets.  "Governmental Authorization" shall mean any approval, consent,
license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any
Governmental Entity or pursuant to any legal requirement.

Section 2.18.  Environmental Matters.

	HoldCo and its subsidiaries (including Company) are in compliance with all applicable Environmental Laws;
and no material expenditures are or will be required in order to come into compliance with any Environmental Laws.
"Environmental Laws" for purposes of this Agreement shall mean (a) any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, codes, common laws, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release
of any Hazardous Materials into the environment; (b) laws relating to the control of any pollutant or the protection or restoration of
the environment (including air, water and land) or natural resources; or (c) the generation, manufacture, processing, use,
handling, treatment, storage, disposal, release, distribution and transportation of Hazardous Materials, including but not limited to the
Clean Air Act, 42 U.S.C.  7401 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.  6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C.  1251 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.  9601 et seq., the
Toxic Substances Control Act, 15 U.S.C.  2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C.  2701 et. seq., the Emergency
Planning and Community Right to Know Act, 42 U.S.C.  1101 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.  1501 et
seq., the Occupational Safety and Health Act, as amended, and their respective state counterparts, and the Safe Drinking Water and
Toxic Enforcement Act (Proposition 65), Cal. Health & Safety Code  25249.5 et seq.

	Neither HoldCo, Company nor any of their subsidiaries have transported, stored, used, manufactured,
disposed of, released, removed or exposed its employees or others to material quantities of Hazardous Materials or manufactured any
product containing a Hazardous Material (collectively "Hazardous Materials Activities") in violation of any
Environmental Law or in a manner which has caused or may reasonably be expected to cause damage, or liability to HoldCo, the
Company or any of their subsidiaries for response costs under any Environmental Law, or any adverse health effect to any person.
"Hazardous Materials" for purposes of this Agreement shall mean any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law to be radioactive, toxic, hazardous or otherwise a danger to health or
the environment, including, without limitation, means any pollutant, contaminant, hazardous or toxic substance or waste and any other
substance or material classified as hazardous or toxic by reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity and including, without limitation, asbestos and asbestos containing material, oil, petroleum,
petroleum derived products, additives to petroleum or petroleum products, natural gas, natural gas liquids, synthetic gas, drilling fluids,
produced waters, radioactive material, but excluding office and janitorial supplies properly and safely maintained.

	HoldCo, Company and their subsidiaries have not: (i) operated any underground storage tanks at
any property that HoldCo, Company or any of their subsidiaries has at any time owned, operated, occupied or leased, or
(ii) released any material quantity of any Hazardous Materials on, to, from or in the vicinity of any real property, including but not
limited to real property currently or previously owned or used by HoldCo, the Company, their subsidiaries or any predecessor entity in
the case of either (i) or (ii) in violation of any Environmental Law or in a manner which has caused or may reasonably be expected to
cause damage or liability to HoldCo, the Company or any of their subsidiaries.

	HoldCo, Company and their subsidiaries currently hold all material permits (the "HoldCo
Environmental Permits") necessary for the conduct of its Hazardous Material Activities and other businesses of HoldCo,
Company and their subsidiaries as such activities and businesses are currently being conducted.

	No action, proceeding, revocation proceeding, amendment procedure, writ, injunction, order, penalty
assessment, notice of violation, judgment or claim is pending, or to the knowledge of Shareholders, HoldCo, Company or any of their
subsidiaries, threatened against HoldCo, Company or any of their subsidiaries concerning any Environmental Permit, Hazardous
Material or any Hazardous Materials Activity (collectively "Environmental Claims"). 

	HoldCo, Company and their subsidiaries have obtained all instruments of financial responsibility under
Environmental Laws which are required in connection with their respective business and operations. 

	HoldCo, the Company and its subsidiaries have made available true and complete copies of all material
documents, reports, or analyses relating to the presence or absence of Hazardous Materials on, at, under or migrating from or onto any
real property currently or previously owned or used by HoldCo, Company or their subsidiaries in connection with operation of their
respective businesses.

	HoldCo, Company and their subsidiaries have not generated, arranged for disposal, transported or
disposed of any Hazardous Material to any facility where there has been a release or threatened release of Hazardous Materials or any
other condition which has caused or may reasonably be expected to cause damage, liability, response costs or expenses to be
assigned to HoldCo, Company or their subsidiaries including but not limited to damage or liability under any Environmental Law.

	HoldCo, Company and their subsidiaries have not sold, placed into commerce or otherwise produced any
product, good, material, supply or substance that is in violation of any Environmental Law in a manner that may reasonably be likely to
result in material liability to HoldCo, Company or their subsidiaries.

Section 2.19.  Intellectual Property.

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

"HoldCo Intellectual Property" means any and all Intellectual Property and Intellectual
Property Rights that are owned by HoldCo or its subsidiaries.

"HoldCo products" means all products and technologies that have been distributed, sold or
licensed by or on behalf of HoldCo or any of its subsidiaries, other than those products identified on Schedule 2.19(a). 

"HoldCo Registered Intellectual Property" means all of the Registered Intellectual Property
owned by, or filed in the name of, HoldCo or any of its subsidiaries.

"Intellectual Property" means any or all of the following (i) works of authorship
including computer programs, source code, and executable code, whether embodied in software, firmware or otherwise, architecture,
documentation, designs, files, records, and data, (ii) inventions (whether or not patentable), discoveries, improvements, and
technology, (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) domain names,
web addresses and sites, (vii) tools, methods and processes, (viii) devices, prototypes, schematics, breadboards, net lists,
mask works, test methodologies, verilog files, emulation and simulation reports, test vectors and hardware development tools, and
(ix) any and all instantiations of the foregoing in any form and embodied in any media.

"Intellectual Property Rights" means worldwide common law and statutory rights associated
with (i) patents, patent applications and inventors' certificates, (ii) copyrights, copyright registrations and copyright
applications, "moral" rights and mask work rights, (iii) the protection of trade and industrial secrets and confidential
information ("Trade Secrets"), (iv) other proprietary rights relating to Intellectual Property,
(v) trademarks, trade names and service marks, (vi) divisions, continuations, renewals, reissuances and extensions of the
foregoing (as applicable) and (vii) analogous rights to those set forth above, including the right to enforce and recover remedies
for any of the foregoing.

"Open Source Materials" means computer software code that is subject to a license
requiring, as a condition to use, modification or use of the software code, that the software code or other software code combined or
distributed with it be (1) disclosed or distributed in Source Code form, (2) licensed for the purpose of making derivative works or (3)
redistributable at no charge.

"Registered Intellectual Property" means applications, registrations and filings for
Intellectual Property Rights that have been registered, filed, certified or otherwise perfected or recorded with or by any state,
government or other public or quasi-public legal authority.

"Shrink-Wrapped Code" means generally commercially
available object code where available for a cost of not more than U.S. $25,000 for a perpetual license for a single user or work station
(or $75,000 in the aggregate for all users and work stations).

"Source Code" means
computer software and code, in form other than object code form, including related programmer comments and annotations, help text,
data and data structures, instructions and procedural, object-oriented and other code, which may be printed out or displayed in human
readable form.

	Registered Intellectual Property;
Proceedings.  Schedule 2.19(b) (i) lists all HoldCo Registered Intellectual Property and (ii) lists any
proceedings or actions before any court or tribunal (including the United States Patent and Trademark Office (the "PTO") or equivalent authority anywhere in the world) in which any of the HoldCo Registered
Intellectual Property is involved.  

	Registration. All necessary registration, maintenance and renewal fees in connection with
such HoldCo Registered Intellectual Property have been paid and all necessary documents and certificates in connection with such
HoldCo Registered Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United
States or foreign jurisdictions, as the case may be, for the purposes of prosecuting and maintaining such HoldCo Registered Intellectual
Property.  

	Further Actions.  There are no actions that must be taken by HoldCo or any of its subsidiaries before
July 31, 2006, 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 or preserving or renewing HoldCo Registered Intellectual Property.

	Absence of Liens. Each item of
HoldCo Intellectual Property (including all HoldCo Registered Intellectual Property), is free and clear of any Liens other than those set
forth on Schedule 2.19(e).  HoldCo is the exclusive owner of all HoldCo Intellectual Property.

	Intellectual Property Development.  To the extent that any Intellectual Property used or that has
been developed for use in the SPG has been developed or created independently or jointly by any person other than HoldCo or any of
its subsidiaries for which HoldCo or any of its subsidiaries has, directly or indirectly, provided consideration for such
development or creation, HoldCo or such Subsidiary, as the case may be, has obtained ownership of, and is the exclusive owner by
operation of law or by valid assignment of, all such Intellectual Property.

	Licenses-In.
Other than (i) Shrink-Wrapped Code, (ii) Open Source Materials as set forth in Schedule 2.19(p) and (iii) non-disclosure
or confidentiality agreements, Schedule 2.19(g) lists all Contracts to which HoldCo or any of its subsidiaries is a party and
under which HoldCo or any of its subsidiaries has been granted or provided any Intellectual Property or Intellectual Property Rights
used or that has been developed for use in the SPG by a third party.  

	Licenses-Out.  Other than (i)  non-
disclosure agreements and (ii) non-exclusive licenses, and related agreements (including software and maintenance and support
agreements), of current HoldCo products to end-users (in each case, pursuant to written agreements that have been entered into in the
ordinary course of business), Schedule 2.19(h)(ii) lists all contracts, licenses and agreements related to the SPG to which
HoldCo or any of its subsidiaries is a party and under which HoldCo or any of its subsidiaries has either generated more than $500,000
in revenue in a fiscal year in any of the last three fiscal years or has granted or provided any material HoldCo Intellectual Property or
current HoldCo products to third parties.

	No Default/No Conflict.  All Contracts relating to either (i) material HoldCo
Intellectual Property, or (ii) Intellectual Property or Intellectual Property Rights of a third person licensed to HoldCo or any of its
subsidiaries that is material to the SPG business of HoldCo and its subsidiaries are in full force and effect and enforceable in
accordance with their terms.  The consummation of the transactions contemplated by this Agreement will neither violate nor by their
terms result in the breach, modification, cancellation, termination, suspension of, or acceleration of any payments with respect to, any
such Contracts that are individually or in the aggregate material.  Each of the HoldCo and its subsidiaries is in material compliance with,
and has not materially breached any term of any such Contracts and, to the knowledge of the Shareholders, all other parties to such
Contracts are in compliance with, and have not materially breached any term of, such Contracts.  Following the Closing Date, the
Company will be permitted to exercise all of the HoldCo's and its subsidiaries' rights under such Contracts to the same extent the
HoldCo and its subsidiaries would have been able to had the transactions contemplated by this Agreement not occurred without the
payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the HoldCo or any of its
subsidiaries would otherwise be required to pay.  

	No Infringement.  Other than the
actions listed in the schedules hereto, the operation of the SPG business of HoldCo and its subsidiaries as it is currently conducted by
HoldCo and its subsidiaries, including the design, development, use, import, branding, advertising, promotion, marketing, manufacture
and sale of any HoldCo product does not infringe or misappropriate and will not infringe or misappropriate when conducted by
Purchaser and/or Company in substantially the same manner following the Closing, any Intellectual Property Rights of any person,
violate any material right of any person (including any right to privacy or publicity), or constitute unfair competition or trade practices
under the laws of any jurisdiction.  No third party that has licensed Intellectual Property to the HoldCo or any of its subsidiaries has
ownership rights or license rights to improvements or derivative works made by the HoldCo or any of its subsidiaries in such Intellectual
Property that has been licensed to the HoldCo or any of its subsidiaries.

	Notice. Neither the HoldCo nor any of its subsidiaries has received written notice from any person
claiming that any HoldCo product or HoldCo Intellectual Property infringes or misappropriates any Intellectual Property Rights of any
person or constitutes unfair competition or trade practices under the laws of any jurisdiction (nor do the Shareholders have knowledge
of any basis therefor).

	No Third Party Infringement.  To the knowledge of the Shareholders, no person has or is infringing
or misappropriating any HoldCo Intellectual Property.

	Transaction.  Except pursuant to the terms of the AP Purchase
Agreement or the Contracts listed in Schedule 2.19(m), neither this Agreement nor the transactions contemplated by this Agreement,
including any assignment to Purchaser by operation of law as a result of the Merger of any contracts or agreements to which the
HoldCo or any of its subsidiaries is a party, will result in: (i) Purchaser, any of its subsidiaries or the Company granting to any
third party any right to or with respect to any Intellectual Property Rights owned by, or licensed to, any of them, (ii) Purchaser,
any of its subsidiaries or the Company, being bound by, or subject to, any non-compete or other material restriction on the operation or
scope of their respective businesses, or (iii) Purchaser, any of its subsidiaries or the Company being obligated to pay any
royalties or other material amounts, or offer any discounts, to any third party in excess of those payable by, or required to be offered by,
any of them, respectively, in the absence of this Agreement or the transactions contemplated hereby. 

	Confidentiality and Security.  Each of the HoldCo and its subsidiaries has taken reasonable steps to
protect confidentiality of the confidential information of HoldCo and any of its subsidiaries or provided by any other person to HoldCo or
any of its subsidiaries. 

	No Order.  No HoldCo Intellectual Property or HoldCo product is
subject to any proceeding or outstanding decree, order, judgment, settlement agreement, forbearance to sue, consent, stipulation or
similar obligation that restricts in any manner the use, transfer or licensing thereof by the HoldCo or any of its subsidiaries or may affect
the validity, use or enforceability of such HoldCo Intellectual Property or HoldCo product.

	Open Source Materials.  Schedule
2.19(p) sets forth a list of all Open Source Materials that are included in, or provided or distributed with any current HoldCo
product.

	Source Code.  Neither the HoldCo, any of its subsidiaries, nor any
other person acting on any of their behalf has disclosed, delivered or licensed to any person, agreed to disclose, deliver or license to
any person, or permitted the disclosure or delivery to any escrow agent or other person of, any Source Code that is HoldCo Intellectual
Property.  No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or
would reasonably be expected to, result in the disclosure or delivery by the HoldCo, any of its subsidiaries or any person acting on their
behalf to any person of any Source Code that is HoldCo Intellectual Property.  Schedule 2.19(q) identifies each Contract pursuant to
which the HoldCo has deposited, or is or may be required to deposit, with an escrow agent or any other person, any Source Code that
is HoldCo Intellectual Property.

	Government Funding.  No government funding, facilities or resources of a university, college, other
educational institution or research center or funding from third parties was used in the development of the HoldCo Intellectual
Property.

	Indemnification.  Neither HoldCo nor any of its subsidiaries is party to or bound by any agreement of
indemnification or any guaranty (other than any agreement unrelated to the SPG or agreement of indemnification that has been entered
into in the ordinary course of business in connection with the sale, distribution or licensing of the HoldCo products).

	Limitations.  Neither HoldCo nor any of its subsidiaries is party to or bound by any Contract
containing any covenant (a) limiting in any respect the right of HoldCo or any of its subsidiaries to engage in any line of business,
to make use of any material Intellectual Property or material Intellectual Property Rights (other than pursuant to the terms of Contracts
set forth in Schedule 2.19(g)) or compete with any person in any material line of business or to compete with any person,
(b) granting any exclusive distribution rights, or (c) providing "most favored nation" or other preferential pricing terms
for current HoldCo products.

	Employee Agreements.  All employees who have contributed to or participated in the conception
and development of the HoldCo products (including software) on behalf of HoldCo or any subsidiaries either (1) have been party to an
arrangement or agreement with HoldCo or the appropriate Subsidiary that has accorded HoldCo or the appropriate Subsidiary
ownership of all tangible and intangible property thereby arising to the extent permitted by applicable law, or (2) have assigned to
HoldCo or the appropriate Subsidiary ownership of all tangible and intangible property thereby arising to the extent permitted by
applicable law.

Section 2.20.  Title to Properties

.  HoldCo has good and valid title to all of its tangible and intangible properties and assets, real, personal
and mixed (including but not limited to HoldCo's shares of capital stock of Company), free and clear of any Liens, except Liens for
Taxes not yet due and payable, statutory Liens securing payments not yet due, and such minor imperfections of title, if any, none of
which is substantial in amount, materially detracts from the value or impairs the use of the property subject thereto. 

Section 2.21.  Absence of Certain Changes or Events

.  Since the date of the Current Balance Sheet, there has not been any material adverse change in
HoldCo's properties, assets, or financial condition, and, except for the transactions contemplated hereby, to the knowledge of
Shareholders, no event has occurred or circumstance exists that may result in such a change.

Section 2.22.  Complete Copies of
Materials
.  HoldCo has delivered or made available true and complete copies of each document (or
summaries of same) that has been requested by the Purchaser or its counsel.

Section 2.23.  Representations
Complete

.  None of the representations or warranties made by HoldCo or any Shareholder (as modified by the
Disclosure Letter), nor any statement made in any Schedule or certificate furnished by HoldCo or any Shareholder pursuant to this
Agreement contains or will contain at the Closing, any untrue statement of a material fact or to their knowledge omits or will omit at the
Closing to state any material fact necessary in order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.

ARTICLE 2A

FURTHER REPRESENTATIONS AND WARRANTIES

OF THE SHAREHOLDERS

Each Shareholder, severally but not jointly, further represents and warrants to the Purchaser, subject to such exceptions
as are specifically disclosed in the Disclosure Letter, on and at the date hereof, as follows:

Section 2A.1.  Ownership of Shares
.  Such Shareholder is the sole record and beneficial owner of the Shares designated as being owned by
such Shareholder opposite such Shareholder's name in Section 2.3(a) of the Disclosure Letter, and such Shares are to
be sold pursuant to this Agreement.  Except as set forth in Section 2A.1 of the Disclosure Letter, such Shares are not
subject to any Liens or to any rights of first refusal of any kind, and such Shareholder has not granted any rights to purchase or gifted
such Shares to any other person or entity.  Such Shareholder has the sole right to transfer such Shares to the Purchaser.  Such Shares
constitute all of HoldCo Common Stock owned, beneficially or of record, by such Shareholder, and such Shareholder has no options,
warrants or other rights to acquire HoldCo Common Stock.  Upon the Closing, the Purchaser will receive good title to such Shares,
subject to no Liens retained, granted or permitted by such Shareholder or HoldCo.  Such Shareholder has not engaged in any sale or
other transfer of any HoldCo Common Stock in contemplation of the Acquisition.

Section 2A.2.  Tax Matters
.  Such Shareholder has had an opportunity to review with its own tax advisors the tax consequences to
such Shareholder of the Acquisition and the other transactions contemplated by this Agreement.  Such Shareholder understands that it
must rely solely on its advisors and not on any statements or representations by the Purchaser, HoldCo or any of their agents.  Such
Shareholder understands that it (and not the Purchaser or HoldCo) shall be responsible for its own tax liability that may arise as a result
of the Acquisition or the other transactions contemplated by this Agreement.

Section 2A.3.  Absence of Claims by the
Shareholders
.  Such Shareholder does not have any claim against HoldCo or the Company, contingent or unconditional,
fixed or variable under any contract or on any other basis whatsoever, whether in equity or at law. 

Section 2A.4.  Authority
.  Such Shareholder has all requisite power and authority to enter into this Agreement and any Related
Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  This Agreement and any
Related Agreements to which such Shareholder is a party have been duly executed and delivered by such Shareholder, and, assuming
the due authorization, execution and delivery by Purchaser, constitute the valid and binding obligation of such Shareholder, enforceable
in accordance with its terms, except as such enforceability may be limited by principles of public policy and subject to the laws of
general application relating to bankruptcy, insolvency and the relief of debtors and to rules of law governing specific performance,
injunctive relief or other equitable remedies.  

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER

The Purchaser hereby represents and warrants to each of the Shareholders, on and at the date hereof, as
follows:

Section 3.1.  Organization, Standing and
Power
.  The Purchaser is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  The Purchaser has the corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the failure to be so
qualified or licensed would have a material adverse effect on the ability of the Purchaser to consummate the Acquisition and the other
transactions contemplated hereby.

Section 3.2.  Authority
.  The Purchaser 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 it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Purchaser.  This
Agreement and any Related Agreements to which it is a party has been duly executed and delivered by the Purchaser and, assuming
due authorization, execution and delivery by the Shareholders and HoldCo, constitute the valid and binding obligations of the
Purchaser, enforceable in accordance with their terms, except as such enforceability may be limited by principles of public policy and
subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies. 

Section 3.3.  Capital Resources
.  The Purchaser has sufficient capital resources to pay the Purchase Price.

Section 3.4.  No Conflict
.  The execution and delivery of this Agreement and any Related Agreements to which it is a party
does not, and the consummation of the transactions contemplated hereby and thereby will not, Conflict with (a) any provision of
the Certificate of Incorporation or the Bylaws of the Purchaser, (b) any mortgage, indenture, lease, contract or other agreement
or instrument, permit, concession, franchise or license to which the Purchaser or any of its respective properties or assets are subject,
or (c) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Purchaser or its properties or
assets, except in the case of (b) and (c), where such Conflict will not have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated by this Agreement.

Section 3.5.  Consents
.  No consent, waiver, approval, order or authorization of, or registration, declaration, notice or filing
with, any Governmental Entity, or any third party is required by or with respect to the Purchaser in connection with the execution and
delivery of this Agreement and any Related Agreements to which it is a party or the consummation of the transactions contemplated
hereby or thereby, except for such consents, waivers, approvals, orders, authorizations, registrations, declarations, notices and filings
as may be required under applicable securities laws, and such consents, waivers, approvals, orders, authorizations, registrations,
declarations, notices and filings which, if not obtained or made, would not have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated by this Agreement.

ARTICLE 4

CONDUCT PRIOR TO CLOSING

Section 4.1.  Shareholder Conduct
.  

	Transfer and Encumbrance.  Each Shareholder agrees not to transfer, sell, exchange, pledge or
otherwise dispose of or encumber the shares owned by such Shareholder, or any New Shares (as defined below) acquired by such
Shareholder, or to discuss, negotiate, or make or enter into any offer, contract or agreement relating thereto, at any time prior to the
Closing Date or termination of this Agreement (the "Expiration Date"); provided, however, that a
Shareholder may transfer any or all of its, his or her Shares (i) to Shareholder's spouse, ex-spouse, domestic partner, lineal descendant
or antecedent, brother or sister, adopted child or adopted grandchild, or the spouse or domestic partner of any child, adopted child,
grandchild or adopted grandchild, or to a trust or trusts for the exclusive benefit of Shareholder or those members of Shareholder's
family specified in this Section 4.1(a)(i), or by devise or descent, or as a bona fide gift effected for tax planning purposes;
provided, that, in all such cases, the transferee or other recipient executes a counterpart copy of this Agreement pursuant to
Section 9.9 and transferor shall remain jointly and severally liable for the obligations of the Shareholders hereunder; or (ii) with
the prior written consent of Purchaser.

	New Shares.  Each Shareholder agrees that any shares that Shareholder purchases or with
respect to which Shareholder otherwise acquires beneficial ownership after the date of this Agreement and prior to the Expiration Date
("New Shares") shall be subject to the terms and conditions of this Agreement to the same extent as if they
constituted Shares.

ARTICLE 5

ADDITIONAL AGREEMENTS

Section 5.1.  Confidentiality

.  Each of the parties hereto hereby agrees that the information obtained pursuant to the negotiation
and execution of this Agreement or the effectuation of the transaction contemplated hereby shall be governed by the terms of the
Confidential Disclosure Agreement, dated December 21, 2005 (the "Non-Disclosure Agreement"), between the
Company and the Purchaser; provided, however, that the Non-Disclosure Agreement shall terminate with respect to Purchaser's
obligations to maintain the confidentiality of all Confidential Information (as defined in the Non-Disclosure Agreement) relating to
HoldCo, the Company or their respective businesses upon Closing.

Section 5.2.  Expenses

.  Whether or not the Acquisition is consummated, all fees and expenses incurred in connection with
the Acquisition, including, without limitation, all legal, accounting, financial advisory, consulting and all other fees and expenses of third
parties ("Third Party Expenses") incurred by a party in connection with the negotiation and effectuation of the terms
and conditions of this Agreement and the transactions contemplated hereby or thereby, shall be the obligation of the respective party
incurring such fees and expenses; provided, however, that the fees and expenses, including, without limitation, Third Party
Expenses, incurred by the Shareholders and HoldCo in connection with the negotiation and effectuation of the terms and conditions of
this Agreement and the transactions contemplated hereby or thereby shall be treated in the manner set forth in the Merger
Agreement. 
Section 5.3.  Public Disclosure

.  Unless otherwise required by law, regulatory authority or stock exchange regulation, no party to
this Agreement may issue any statement or communication to the public or press regarding the transactions contemplated by this
Agreement without the prior written consent of the Purchaser, in the case of statements or communications by HoldCo, the Company or
the Shareholders, or the Company and the Shareholders' Representative, in the case of statements or communications by the
Purchaser.
Section 5.4.  Reasonable Efforts

.  Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall
use commercially reasonable efforts to take promptly, or cause to be taken, all actions within its control, and to do promptly, or cause to
be done, all things within its control necessary, proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals that such party is responsible
to obtain and to effect all necessary registrations and filings that such party is responsible to make 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 no party shall have an obligation to litigate in order to remove any impediment or delay to Closing.

Section 5.5.  Notification of Certain
Matters
.  Following the Closing, each of the Shareholders shall give prompt notice to the Purchaser of
(a) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which is likely to have caused any
representation or warranty of HoldCo or any Shareholder, respectively, contained in this Agreement to have been untrue or inaccurate
at the Closing, and (b) any failure of any Shareholder to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder after the Closing; provided, however, that the delivery of any notice pursuant to this
Section 5.5 shall not limit or otherwise affect any remedies available to the party receiving such notice.  No disclosure
by the Shareholders pursuant to this Section 5.5, however, shall be deemed to amend or supplement the Disclosure
Letter or prevent or cure any misrepresentations, breach of warranty or breach of covenant.

Section 5.6.  Additional Documents and Further
Assurances
.  Each party hereto, at the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the
consummation of the Closing and the transactions contemplated hereby.

Section 5.7.  HoldCo Cash and Liabilities
.  Prior to the Closing, any HoldCo cash on hand, if any, shall be distributed to the Shareholders and
all liabilities of HoldCo, if any, shall be satisfied in full.

Section 5.8.  Tax Matters

.  After the Closing Date, Purchaser shall file or cause to be filed all Returns of HoldCo and each of
its subsidiaries (including, without limitation, the Company); provided, however, that the Company shall file or cause to be
filed (i) all such Returns for the period ended December 31, 2005 and (ii) all such Returns for the short period ending on the Closing
Date.  Any federal or state income tax, property or other material Return of HoldCo or any of its subsidiaries which is filed after the
Closing Date and which pertains to a taxable period commencing prior to the Closing Date and ending on or after the Closing Date shall
be (i) prepared in accordance with the past practices of Company and each of its subsidiaries and (ii) submitted (with copies of relevant
work papers and other documentation then available) to Shareholders' Representative for approval (a) in the case of income and
property tax Returns not less than forty-five (45) calendar days, and (b) in the case of sales, use or other material tax Returns not less
than thirty (30) calendar days, prior to the due date for the filing of such Return, which approval shall not be unreasonably withheld.
Any objection by Shareholders' Representative to such Return which the parties are unable to mutually resolve not less than fifteen (15)
calendar days prior to the due date for the filing of such Return shall be resolved by an independent accountant, at the shared expense
of the parties, in a manner consistent with the past practices of HoldCo and its subsidiaries.

ARTICLE 6

CONDITIONS TO CLOSING

Section 6.1.  Conditions to Obligations of Each Party to Effect the
Acquisition
.  The respective obligations of each Party to this Agreement to effect the Acquisition shall be subject
to the satisfaction at or prior to the Closing of the following conditions:

	No Injunctions or Restraints; Illegality.  No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or governmental or regulatory authority or other legal or
regulatory restraint or prohibition preventing the consummation of the Acquisition shall be in effect.

	No Prohibition.  Neither the consummation nor the performance of the Acquisition will, directly or
indirectly (with or without notice or lapse of time), materially contravene, or conflict with, or result in a material violation of, or cause
Purchaser or HoldCo or any person affiliated with Purchaser or HoldCo to suffer any material adverse consequence under, any
applicable law, regulation, rule, statute, requirement, order, decree, or judgment.

Section 6.2.  Additional Conditions to Obligations of Purchaser
.  Purchaser's obligation to purchase the Shares and to take the other actions required to be taken
by Purchaser at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may
be waived by Purchaser, in whole or in part, to the extent permitted by applicable law):

	Accuracy of Representations and Warranties.  The representations and warranties of HoldCo and
the Shareholders contained in Article 2 and Article 2A of this Agreement shall be true and correct on the date hereof and as of
the Closing Date with the same force and effect as if made on the Closing Date (except that those representations and warranties
which address matters only as of a particular date shall have been true and correct only on such date), except, in each case, or in the
aggregate, as does not constitute a material adverse effect on the Company and HoldCo together at the Closing Date (it being
understood that for all purposes of determining the accuracy of such representations and warranties, all references to the term
"material adverse effect" and materiality qualifications and other qualifications based on the word "material"
contained in such representations and warranties shall be disregarded).  Purchaser shall have received a certificate signed by each of
the Shareholders and, on behalf of HoldCo, by the President of HoldCo, to the effect set forth in this
Section 6.2.

	HoldCo's and Shareholders' Performance.

	All of the covenants and obligations that HoldCo and Shareholders are required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in all material respects.  Purchaser shall have received a
certificate signed by each of the Shareholders and, on behalf of HoldCo, by the President of HoldCo, to the effect set forth in this
Section 6.2 with respect to such performance and compliance.

	Each document required to be delivered pursuant to Section 1.3 must have been delivered
to Purchaser.

	Additional Documentation.  HoldCo and the Shareholders shall have delivered to Purchaser such
other documents as Purchaser may reasonably request for the purpose of (i) evidencing the accuracy of any of HoldCo's and
Shareholders' representations and warranties, (ii) evidencing the performance by any Shareholder of, or the compliance by
HoldCo and any Shareholder with, any covenant or obligation required to be performed or complied with by the HoldCo or such
Shareholder, (iii) evidencing the satisfaction of any condition referred to in Section 1.3 or this
Section 6, or (iv) otherwise facilitating the consummation or performance of the Acquisition.

	No Proceedings.  Since the date of this Agreement, there must not have been commenced or
threatened against Purchaser, or against any person affiliated with Purchaser, any proceeding (i) involving any challenge to, or
seeking damages or other relief in connection with, the Acquisition, or (ii) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with the Acquisition.

	No Claim Regarding Stock Ownership or Sale Proceeds.  There must not have been made or
threatened by any person any claim asserting that such person (i) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other voting, equity, or ownership interest in HoldCo, or (ii) is
entitled to all or any portion of the Purchase Price payable for the Shares.

	Additional Shareholders.  Any persons acquiring shares of
HoldCo after the date hereof but prior to the Closing Date shall have become parties to this Agreement by executing a counterpart of
this Agreement in accordance with Section 9.9.

	FIRPTA Statement.  HoldCo shall deliver to Purchaser a properly executed statement in a form
reasonably acceptable to Purchaser for purposes of satisfying Purchaser's obligations under Treasury Regulation Section 1.1445-
2(c)(3).

	Consents and Contract Modifications.  HoldCo and/or the Company shall have used commercially
reasonable efforts to deliver to the Purchaser all of the consents and approvals and contract modifications set forth in
Section 6.2(h) of the Disclosure Letter, in form and substance satisfactory to the Purchaser.

	Joint Venture Amendment.  HoldCo and/or the Company shall have delivered to Purchaser the
letter agreement, amending the joint venture agreement, duly executed by Amplus, the joint venture partner.  

	APG Stock Purchase Documentation.  Purchaser shall have reviewed and approved in all
respects the content of the APG Stock Purchase Agreement and related agreements and disclosure schedules.

	Lien Release.  Bank of the West shall
have released its lien against HoldCo and shall have released HoldCo from all liabilities and obligations, or otherwise terminated
HoldCo's obligations, under any agreement with Bank of the West relating to the credit agreement, letter of credit financings or other
debt financings to which HoldCo is a party.

	Bond Authorities.  The bond authorities who financed the Fremont and Logan real estate
projects shall have released HoldCo from all liabilities and obligation or otherwise terminated all of HoldCo's obligations, under any
agreement with such authorities to which HoldCo is a party, or Ardenwood LLC ("Ardenwood") shall have agreed,
on terms and conditions reasonably acceptable to Purchaser, (a) to indemnify, defend and hold HoldCo harmless from all liability to
such bond authorities thereunder, (b) if Ardenwood sells or otherwise transfers to an unaffiliated third party either of the Fremont or
Logan real estate projects, it will at or prior to such sale, (i) cause the applicable bond authority to release HoldCo from all liabilities and
obligations, or otherwise terminate all of HoldCo's obligations, under any agreement with such authority or (ii) pay off the bonds as to
the applicable project and (c) if the Company desires to vacate either of the real estate projects or change its use of such projects in a
manner which would violate the terms of the applicable bond agreements, but would not violate the Company's lease of such project,
and the Company has provided Ardenwood with not less than six (6) months prior written notice of such intent, Ardenwood will, at or
prior to the expiration of such notice period, (i) obtain a written waiver of such violation from the applicable bond authority, (ii) cause the
applicable bond authority to release HoldCo from all liabilities and obligations, or otherwise terminate all of HoldCo's obligations, under
any agreement with such authority or (iii) pay off the bonds as to the applicable project, all of which obligations will be binding upon any
successor or assign of Ardenwood or the applicable property, so long as the bonds as to such property remain outstanding. 
Such agreement will also provide that neither HoldCo nor the Company shall intentionally default under such agreements (except as
provided in subpart (c) above) and (ii) nothing in such agreement shall in any way amend or constitute a waiver of any of the
Company's obligations under its leases of the projects.

Section 6.3.  Additional Conditions to the Obligations of Shareholders
.  Shareholders' obligation to sell the Shares and to take the other actions required to be taken by
Shareholders at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may
be waived by Shareholders, in whole or in part):

	Representations and Warranties.  All of Purchaser's representations and warranties in this
Agreement (considered collectively), and each of these representations and warranties (considered individually), shall be true and
correct on the date hereof and as of the Closing Date with the same force and effect as if made on the Closing Date (except that those
representations and warranties which address matters only as of a particular date shall have been true and correct only on such date),
except, in each case, or in the aggregate, as does not materially impede the ability of Purchaser to consummate the transactions
contemplated by this Agreement in accordance with the terms hereof and applicable Legal Requirements.  Purchaser shall have
delivered a certificate, signed by the President or any Vice President of Purchaser, to the effect set forth in this Section
6.3(a).

	Purchaser's
Performance.

	All of the covenants and obligations that Purchaser is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually),
must have been performed and complied with in all material respects.  Purchaser shall have delivered a certificate, signed by the
President or any Vice President of Purchaser, to the effect set forth in this Section 6.3(b).

	Each document required to be delivered by Purchaser pursuant to Section 1.3 must have
been delivered.

	Additional Documentation.  Purchaser must have caused the
following documents to be delivered to Shareholders and such other documents as Shareholders may reasonably request for the
purpose of (i) evidencing the accuracy of any representation or warranty of Purchaser, (ii) evidencing the performance by
Purchaser of, or the compliance by Purchaser with, any covenant or obligation required to be performed or complied with by Purchaser,
(iii) evidencing the satisfaction of any condition referred to in this Section 6, or (iv) otherwise facilitating the
consummation of the Acquisition.

ARTICLE 7

SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION

Section 7.1.  Survival of Representations,
Warranties and Certain Indemnification Obligations
.  HoldCo's and the Shareholders' representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall terminate on the 18-month anniversary of the Closing, except the representations
in Section 2.9, Section 2.18 and Section 2.19 which shall terminate on the 30-month
anniversary of the Closing.  To the extent that a claim for indemnification has been made pursuant to Section 7.4 (including the delivery
of a Claim of Notice) prior to the end of the applicable survival period that could affect the accuracy of any representation or warranty,
such representation or warranty shall continue to survive until the claim is resolved.  All of the Purchaser's representations and
warranties contained herein or in any instrument delivered pursuant to this Agreement shall terminate at the Closing.

Section 7.2.  Indemnification
. General Indemnification by Shareholders.  The Shareholders shall jointly
and severally indemnify and hold the Purchaser, and its officers, directors and affiliates (including HoldCo and the Company after the
Closing) (the "Purchaser Indemnified Parties"), harmless against all claims, losses (including, without limitation,
claims for lost profits), liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses of
investigation and defense (hereinafter individually, a "Loss" and collectively "Losses") related
to HoldCo, the Company or the Shareholders (without regard to any relationship or affiliation Shareholders may have with the
Company) which are incurred by the Purchaser Indemnified Parties, directly or indirectly, as a result of (1) any inaccuracy or
breach of a representation or warranty of HoldCo or the Shareholders contained in this Agreement or in any instrument or certificate
executed and delivered by HoldCo or the Shareholders to the Purchaser pursuant to this Agreement (excluding, however, the
representations in Section 2.18 hereof which are covered by Section 7.3(b) below and the
representation in Section 2.9 hereof which are covered by Section 7.2(5) below),  (2) any failure by HoldCo or
the Shareholders to perform or comply with any covenant contained in this Agreement, (3) any failure by APG Buyer to perform or
comply with any covenant or obligation contained in the APG Stock Purchase Agreement, (4) claims and litigation against HoldCo
relating to the Carmel Valley real estate, (5) any breach of the representations set forth in Section 2.9 to the extent that any
Losses related thereto result from a government taxing authority audit of HoldCo or the Company, or any of their respective
subsidiaries, or (6) dissolution of any inactive subsidiaries of HoldCo or the Company prior to Closing; provided however that
indemnification for the Indemnified IP Matters set forth in Section 7.3(a) below and indemnification for the
Indemnified Environmental Matters set forth in Section 7.3(b) below shall be exclusively governed by such provisions and not
by this Section 7.2.  The Shareholders shall not have any right of contribution from HoldCo or Company with respect to breach of any of
the representations and warranties Shareholders and HoldCo have jointly and severally made hereunder or any Loss claimed by the
Purchaser Indemnified Parties.  Notwithstanding the foregoing, no Purchaser Indemnified Party shall be entitled to indemnification for
any Losses hereunder until the aggregate amount of all Losses under all claims of all Purchaser Indemnified Parties shall exceed One
Hundred Thousand Dollars ($100,000) (the "Basket"), at which time all Losses incurred
shall be subject to indemnification hereunder in full including the amount of the Basket; provided, however, that Indemnified IP
Matters and Indemnified Environmental Matters shall not be subject to the Basket; provided, further, that the Basket shall not
apply to Losses hereunder with respect to the Carmel Valley claims and litigation ("Carmel Valley Claims");
provided, further, that Losses subject to indemnification hereunder pursuant to Section 7.2(5) above shall not be
subject to the Basket with respect to indemnification claims made pursuant to a Claim Notice that is delivered after the 18-month
anniversary of the Closing Date; and provided, further, that Losses relating to or arising from Indemnified IP Matters and
Indemnified Environmental Matters shall not count toward determining whether the Basket amount has been exceeded. Indemnification
of Purchaser against the Carmel Valley claims and litigation shall be made on a "dollar-one" basis. 

Section 7.3.  Special
Indemnification.

	IP Indemnification.  The Shareholders shall jointly and severally release, defend, indemnify and hold
the Purchaser Indemnified Parties harmless against any Loss or Losses related to HoldCo, the Company or the Shareholders without
regard to any relationship or affiliation with the Company which are incurred by the Purchaser Indemnified Parties, directly or indirectly,
as a result of (i) any breach of the representations set forth in Section 2.19 or (ii) the Specific IP Matter (subsections (i) and (ii)
of this Section 7.3(a) together referred to herein as the "Indemnified IP Matters").  Notwithstanding the
foregoing, no Purchaser Indemnified Party shall be entitled to indemnification for any Losses hereunder until the aggregate amount of
all Losses under all claims of all Purchaser Indemnified Parties shall exceed Fifty Thousand Dollars ($50,000) (the "IP
Basket"), at which time all Losses incurred shall be subject to indemnification hereunder in full including the amount of the IP
Basket; provided, however, that the IP Basket shall not apply to Losses hereunder with respect to the claim disclosed on
Section 7.3(a) of the Disclosure Letter and any related litigation (the "Specific IP Matter") and
provided, further, that Losses with respect to the Specific IP Matter shall not count toward determining if the IP Basket has been
exceeded.  Indemnification of Purchaser against the Specific IP Matter shall be made on a "dollar-one" basis.

	Environmental Indemnification.  The Shareholders shall jointly and
severally release, defend, indemnify and hold the Purchaser Indemnified Parties
harmless against any Loss or Losses related to HoldCo, the Company or the Shareholders without regard to any relationship
or affiliation with the Company which are incurred by the Purchaser Indemnified Parties, directly or indirectly, as a result of (i) any
breach of the representations set forth in Section 2.18 hereof or (ii) any Environmental Claims of a Governmental Entity or
third party relating to the existence of Hazardous Materials in, on, under, about (including migrating to or from) that certain real property
disclosed in Section 7.3(b) of the Disclosure Letter (subsections (i) and (ii) of this Section 7.3(b) together referred to
herein as the "Indemnified Environmental Matters").  Notwithstanding the foregoing, no Purchaser Indemnified
Party shall be entitled to indemnification for any Losses hereunder until the aggregate amount of all Losses under all claims of all
Purchaser Indemnified Parties shall exceed Fifty Thousand Dollars ($50,000) (the "Environmental Basket"), at
which time all Losses incurred shall be subject to indemnification hereunder in full including the amount of the Environmental Basket;
provided, however, that the Environmental Basket shall not apply to Losses hereunder with respect to the
environmental claims made or which may be made regarding the claim disclosed on Section 7.3(b) of the Disclosure Letter
and any related litigation (the "Specific Environmental Claims") and provided, further, that Losses with
respect to the Specific Environmental Claims shall not count toward determining if the Environmental Basket has been exceeded.
Indemnification of Purchaser against the Specific Environmental Claims shall be made on a "dollar-one" basis.  The
indemnities in this Article 7 for any breach of the representations set forth in Section 2.18 above are not intended to apply to: (i) the
costs and expenses for an environmental audit voluntarily performed by or on behalf of any Purchaser Indemnified Party (except as
resulting from a claim, investigation or settlement of a claim, or contractual requirement of a third party or requirement of a
Governmental Authority); or (ii) the ordinary costs of decommissioning the operations of HoldCo, the Company or any of their
subsidiaries (including, by way of example, removal, decontamination and disposal of equipment and piping and approval of the
decommissioning by the Certified Unified Program Agency) from those operations that are undertaken by any of the Purchaser
Indemnified Parties following the Closing Date, excluding (so that the indemnity applies to) decontamination and disposal of any such
equipment not used by any Purchaser Indemnified Parties following the Closing Date, and disposal of any stored Hazardous Materials
remaining on any property operated by any Purchaser Indemnified Party as of the Closing Date, and operations of the
APG.

Section 7.4.  Indemnification
Procedures.

	Maximum Payments.  Except in cases of fraud by Shareholders, HoldCo or Company in
connection with the transactions contemplated by this Agreement (the "Excluded Breaches"), the maximum
amount the Purchaser Indemnifying Parties may recover from the Shareholders pursuant to the indemnification obligations set forth in
Section 7.2 and 7.3 for all Losses suffered or incurred by such parties shall be limited to (i) the General Escrow in
the aggregate (including the Tax Escrow) with respect to the indemnification set forth in Section 7.2, (ii) the IP
Escrow for the Indemnified IP Matters, and (iii) Environmental Escrow for the Indemnified Environmental Matters.  The amount
that the Purchaser Indemnified Parties may recover from the Shareholders pursuant to the indemnification obligations set forth in
Section 7.2 in respect of Losses suffered or incurred by such parties arising out of or resulting from any Excluded
Breach shall not be so limited. No investigation performed by Purchaser or knowledge acquired by Purchaser shall affect Purchaser's
indemnification rights, payment of damages or other remedies.

	Sole Remedy.  Except for cases of fraud, the sole and exclusive remedy of the Purchaser
Indemnified Parties with respect to the matters described in Sections 7.2 and 7.3 shall be the indemnification provisions set forth
therein, and, except for cases of fraud, the recourse to the applicable Escrow Fund (as defined below) shall be the sole remedy for such
indemnification.  Except for cases of fraud and rights and remedies conferred on Purchaser Indemnified Parties by virtue of the AP
Purchase Agreement, the Non-Competition and Non-Solicitation Agreement, or the Shareholder Release, the indemnification provisions
of this Article 7 shall be the exclusive remedy of the Purchaser Indemnified Parties for the recovery of any Losses arising out of this
Agreement, the Merger Agreement, or the Escrow Agreement, and any certificate delivered by or on behalf of HoldCo or the Company
or the Shareholders pursuant thereto.

	Procedure for Claims on the Escrow Account.  A Purchaser Indemnified Party shall give the
Shareholders' Representative notice of any matter which such Purchaser Indemnified Party has determined has given or could give rise
to a right of indemnification under this Agreement (a "Claim Notice"), within 30 days of such determination, stating
the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises.  Any failure to submit any such Claim Notice in a timely manner to
the Shareholders' Representative shall not relieve the Shareholders of any liability hereunder, except to the extent the Shareholders are
actually materially prejudiced by such failure.  Any Claim Notice seeking indemnification prior to the Release Date (as defined in
Section 7.6) shall also be delivered to the Escrow Agent.  The procedures with respect to the resolution of any such
claim by a Purchaser Indemnified Party shall be as set forth in the Escrow Agreement.

	Third Party Claims.  The obligations and liabilities of the Shareholders under this Article 7
with respect to Losses arising from claims of any third party which are subject to the indemnification provided for in this Article 7
("Third Party Claims") shall be governed by and contingent upon the following additional terms and conditions:  if a
Purchaser Indemnified Party shall receive notice of any Third Party Claim, such Purchaser Indemnified Party shall give the
Shareholders' Representative prompt notice of such Third Party Claim, and in any case within 14 days of the receipt by the Purchaser
Indemnified Party of such notice; provided, however, that the failure to provide such notice shall not release the
Shareholders from any of their obligations under this Article 7 except to the extent the Shareholders are actually materially
prejudiced by such failure and shall not relieve the Shareholders from any other obligation or liability that they may have to any
Purchaser Indemnified Party otherwise than under this Article 7.  If the Shareholders' Representative acknowledges in writing the
Shareholders' obligation to indemnify the Purchaser Indemnified Party hereunder against any Losses that may result from such Third
Party Claim, then the Shareholders' Representative shall be entitled to assume and control the defense of such Third Party Claim at the
expense of the Shareholders using counsel of the Shareholders' Representative's choice (subject to the reasonable approval of
Purchaser Indemnified Party) if the Shareholders' Representative gives notice of its intention to do so to the Purchaser Indemnified
Party within five business days of the receipt of such notice from the Purchaser Indemnified Party; provided, however, that if
there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the judgment of the Purchaser
Indemnified Party for the same counsel to represent both the Purchaser Indemnified Party and the Shareholders, then the Purchaser
Indemnified Party shall be entitled to retain its own counsel, in each jurisdiction for which the Purchaser Indemnified Party determines
counsel is required, at the expense of the Shareholders.  In all other cases, then the Purchaser Indemnified Party shall retain and
control the defense of such Third Party Claim at the expense of the Shareholders using counsel of the Purchaser Indemnified Party's
choice (subject to the reasonable approval of HoldCo), subject to the reasonable approval of HoldCo. In the event the Shareholders'
Representative exercises its right to undertake any such defense against any such Third Party Claim as provided above, the Purchaser
Indemnified Party shall cooperate with the Shareholders' Representative in such defense and make available to the Shareholders'
Representative, at the Shareholders' expense, all witnesses, pertinent records, materials and information in the Purchaser Indemnified
Party's possession or under the Purchaser Indemnified Party's control relating thereto as is reasonably required by the Shareholders'
Representative.  Similarly, in the event the Purchaser Indemnified Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, the Shareholders shall cooperate with the Purchaser Indemnified Party in such defense and make available to
the Purchaser Indemnified Party, at the Shareholders' expense, all such witnesses, records, materials and information in the
Shareholders' possession or under the Shareholders' control relating thereto as is reasonably required by the Purchaser Indemnified
Party.  Such Third Party Claim may not be settled by the Shareholders' Representative without the written consent of the Purchaser
Indemnified Party, which consent will not be unreasonably withheld or delayed, or by the Purchaser Indemnified Party without the
written consent of the Shareholders' Representative, which consent will not be unreasonably withheld or delayed. 

	Certain Limitations.  The amount of any Losses for which indemnification is provided hereunder
shall be net of any amounts actually recovered by the indemnified party from third parties (including amounts actually recovered under
insurance policies and tax benefits actually realized) with respect to such Losses.

Section 7.5.  Escrow Funds. 

	General Escrow Fund.  Any payment of indemnification required to be made pursuant to
Section 7.2 will be made exclusively out of the General Escrow Fund (as hereinafter defined) then held by the Escrow
Agent.  The "General Escrow Fund" shall mean the General Escrow Amount, as such sum may be decreased
as provided in the Escrow Agreement and in this Article 7.  

	IP Escrow Fund.  Any payment of indemnification required to be made pursuant to
Section 7.3(a) will be made exclusively out of the IP Escrow Fund (as hereinafter defined) then held by the Escrow
Agent.  The "IP Escrow Fund" shall mean the IP Escrow Amount, as such sum may be decreased as provided in
the Escrow Agreement and in this Article 7.  

	Environmental Escrow Fund.  Any payment of indemnification required to be made pursuant to
Section 7.3(b) will be made exclusively out of the Environmental Escrow Fund (as hereinafter defined) then held by the
Escrow Agent.  The "Environmental Escrow Fund" shall mean the Environmental Escrow Amount, as such sum
may be decreased as provided in the Escrow Agreement and in this Article 7. 

	Generally.  The General Escrow, the Tax Escrow Fund, the IP Escrow and the Environmental
Escrow are referred to herein generically as each an "Escrow Fund."

Section 7.6.  Distribution of Escrow
Funds
.  

	General Escrow Fund.  On the 18-month anniversary of the Closing Date (the "General
Release Date"), the Purchaser and the Shareholders' Representative shall direct the Escrow Agent to release to each of the
Shareholders their Pro Rata Portion of the remaining amount of the General Escrow Fund; provided however, that $500,000
shall remain in the General Escrow Fund and shall not be released to the Shareholders until the 30-month anniversary of the Closing
Date in accordance with Section 7.6(b) below (the "Tax Escrow Fund"); provided, further, however, that the
remaining amount in the General Escrow Fund on the General Release Date shall not be distributed to the extent of the aggregate
amount of all Losses specified in any then unresolved good faith indemnification claims made by any Purchaser Indemnified Party
pursuant to Section 7.2 prior to the General Release Date.  The Shareholders and the applicable Purchaser Indemnified
Party shall negotiate in good faith to determine the amount of such unresolved claims and in the event the parties cannot reach an
agreement on the amount of such claim within sixty days following the General Release Date, the amount shall be determined by
arbitration in accordance with the provisions of Section 7(b) of the Escrow Agreement.  To the extent that on the General Release Date
any amount has been reserved and withheld from distribution from the General Escrow Fund on such date on account of an unresolved
claim for indemnification and, subsequent to the General Release Date, such claim is resolved, the parties shall immediately direct the
Escrow Agent to (i) release to the applicable Purchaser Indemnified Party the amount of Loss, if any, due in respect of such claim
as finally determined, and (ii) release to each Shareholder an amount equal to such Shareholders Pro Rata Portion of the
excess, if any, remaining in the General Escrow Fund after the payments, if any, pursuant to the foregoing
clause (i).

	Tax Escrow Fund.  On the 30-month anniversary of the Closing Date (the "Tax Release
Date"), the Purchaser and the Shareholders' Representative shall direct the Escrow Agent to release to each of the
Shareholders their Pro Rata Portion of the remaining amount of the Tax Escrow Fund; provided however, that the remaining
amount in the Tax Escrow Fund on the Tax Release Date shall not be distributed to the extent of the aggregate amount of all Losses
specified in any then unresolved good faith indemnification claims made by any Purchaser Indemnified Party pursuant to
Section 7.2 prior to the 30-month anniversary of the Closing Date (the "Tax Claims Bar Date").  The
Shareholders and the applicable Purchaser Indemnified Party shall negotiate in good faith to determine the amount of such unresolved
claims and in the event the parties cannot reach an agreement on the amount of such claim within sixty days following the Tax Release
Date, the amount shall be determined by arbitration in accordance with the provisions of Section 7(b) of the Escrow Agreement.  To the
extent that on the Tax Release Date any amount has been reserved and withheld from distribution from the Tax Escrow Fund on such
date on account of an unresolved claim for indemnification and, subsequent to the Tax Release Date, such claim is finally resolved, the
parties shall immediately direct the Escrow Agent to (i) release to the applicable Purchaser Indemnified Party the amount of Loss,
if any, due in respect of such claim as finally determined, and (ii) release to each Shareholder an amount equal to such
Shareholders Pro Rata Portion of the excess, if any, remaining in the Tax Escrow Fund after the payments, if any, pursuant to the
foregoing clause (i).

	IP Escrow Fund.  On the later of the 30-month anniversary of the Closing Date and the date on
which the Specific IP Matter is finally disposed of (the "IP Release Date"), the Purchaser and the
Shareholders' Representative shall direct the Escrow Agent to release to each of the Shareholders their Pro Rata Portion of the
remaining amount of the IP Escrow Fund; provided however, that the remaining amount in the IP Escrow Fund on the Release
Date shall not be distributed to the extent of the aggregate amount of all Losses specified in any then unresolved good faith
indemnification claims made by any Purchaser Indemnified Party pursuant to Section 7.3(a) prior to the 30-month
anniversary of the Closing Date (the "IP Claims Bar Date").  The Shareholders and the applicable Purchaser
Indemnified Party shall negotiate in good faith to determine the amount of such unresolved claims and in the event the parties cannot
reach an agreement on the amount of such claim within sixty days following the IP Release Date, the amount shall be determined by
arbitration in accordance with the provisions of Section 7(b) of the Escrow Agreement.  To the extent that on the IP Release Date any
amount has been reserved and withheld from distribution from the IP Escrow Fund on such date on account of an unresolved claim for
indemnification and, subsequent to the IP Release Date, such claim is finally resolved, the parties shall immediately direct the Escrow
Agent to (i) release to the applicable Purchaser Indemnified Party the amount of Loss, if any, due in respect of such claim as
finally determined, and (ii) release to each Shareholder an amount equal to such Shareholders Pro Rata Portion of the excess, if
any, remaining in the IP Escrow Fund after the payments, if any, pursuant to the foregoing clause (i).

	Environmental Escrow Fund.  On the later of the 30-month anniversary of the Closing Date and
the date on which the Specific Environmental Claims are finally disposed of (the "Environmental Release
Date"), the Purchaser and the Shareholders' Representative shall direct the Escrow Agent to release to each of the
Shareholders their Pro Rata Portion of the remaining amount of the Environmental Escrow Fund; provided however, that the
remaining amount in the Environmental Escrow Fund on the Environmental Release Date shall not be distributed to the extent of the
aggregate amount of all Losses specified in any then unresolved good faith indemnification claims made by any Purchaser Indemnified
Party pursuant to Section 7.3(b) prior to the 30-month anniversary of the Closing Date (the "Environmental
Claims Bar Date").  The Shareholders and the applicable Purchaser Indemnified Party shall negotiate in good faith to
determine the amount of such unresolved claims and in the event the parties cannot reach an agreement on the amount of such claim
within sixty days following the Environmental Release Date, the amount shall be determined by arbitration in accordance with the
provisions of Section 7(b) of the Escrow Agreement.  To the extent that on the Environmental Release Date any amount has been
reserved and withheld from distribution from the Environmental Escrow Fund on such date on account of an unresolved claim for
indemnification and, subsequent to the Environmental Release Date, such claim is finally resolved, the parties shall immediately direct
the Escrow Agent to (i) release to the applicable Purchaser Indemnified Party the amount of Loss, if any, due in respect of such
claim as finally determined, and (ii) release to each Shareholder an amount equal to such Shareholders Pro Rata Portion of the
excess, if any, remaining in the Environmental Escrow Fund after the payments, if any, pursuant to the foregoing
clause (i).

	The General Release Date, the Tax Release Date, the IP Release Date and the Environmental Release
Date are generically referred to each as a "Release Date."

Section 7.7.  Shareholders'
Representative
.  

	By executing this Agreement, the Shareholders shall have appointed Joseph J. Lazzara (the
"Shareholders' Representative") as their agent and attorney in fact to give and receive notices and
communications, to appoint the Escrow Agent, to execute the Escrow Agreement, to authorize payment to the Purchaser of cash from
the applicable Escrow Fund in satisfaction of claims by the Purchaser, to object to such payments, to 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, and to take all other actions that are either (a) necessary or appropriate in the judgment of the Shareholders'
Representative for the accomplishment of the foregoing, or (b) specifically mandated by the terms of this Agreement.  Any
vacancy in the position of Shareholders' Representative may be filled by the holders of a majority in interest of the Escrow Funds.  No
bond shall be required of the Shareholders' Representative and the Shareholders' Representative shall not receive compensation for its
services.  Notices or other communications to or from the Shareholders' Representative shall constitute notice to or from the
Shareholders.

	The Shareholders' Representative shall not be liable for any act done or omitted hereunder as the
Shareholders' Representative while acting in good faith and in the exercise of reasonable judgment.  The Shareholders on whose
behalf the Escrow Amounts were was contributed to the Escrow Funds shall indemnify the Shareholders' Representative and hold the
Shareholders' Representative harmless against any loss, liability or expense incurred without negligence or bad faith on the part of the
Shareholders' Representative and arising out of or in connection with the acceptance or administration of the Shareholders'
Representative's duties hereunder, including the reasonable fees and expenses of any legal counsel retained by the Shareholders'
Representative.  After all claims for Losses by the Purchaser set forth in Claim Notices delivered to the Escrow Agent and the
Shareholders' Representative has been satisfied, or reserved against, the Shareholders' Representative, with the consent of the
majority in interest in the Escrow Funds, may recover from the Escrow Fund on the Release Date (prior to the distribution of the Escrow
Funds to the Shareholders pursuant to Section 7.6) payments not yet paid for any expenses incurred in connection with the
Shareholders' Representative's representation hereby.

	A decision, act, consent or instruction of the Shareholders' Representative shall constitute a decision of the
Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and the Purchaser may rely
upon any such decision, act, consent or instruction of the Shareholders' Representative as being the decision, act, consent or
instruction of the Shareholders.  The Escrow Agent and the Purchaser are 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 Shareholders' Representative.

	Subject to the Purchaser's prior claims for indemnification against the Escrow Funds, the Shareholders'
Representative shall be entitled to receive payment for its reasonable and documented expenses therefrom, prior to any payments to
the Shareholders.

ARTICLE 8

TERMINATION; WAIVER AND AMENDMENT

Section 8.1.  Termination
.  Except as provided in Section 8.2 below, this Agreement may be terminated and the
Acquisition abandoned at any time prior to the Closing: 

	by mutual consent of HoldCo, the Shareholders and Purchaser;

	by Purchaser or HoldCo if:  (i) the Closing has not occurred by September 30, 2006; (ii) there
shall be a final nonappealable order of a federal or state court in effect preventing consummation of the Acquisition; or (iii) there
shall be any statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the Acquisition by any
governmental entity that would make consummation of the Acquisition illegal;

	by Purchaser if it is not in material breach of its obligations under this Agreement and there has been a
material breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of HoldCo or any
Shareholder and such breach has not been cured within five (5) business days after written notice to HoldCo or the Shareholder
(provided, that, no cure period shall be required for a breach which by its nature cannot be cured); 

	by HoldCo if it is not in material breach of its obligations under this Agreement and there has been a
material breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of Purchaser and such
breach has not been cured within five (5) business days after written notice to Purchaser (provided, that, no cure period
shall be required for a breach which by its nature cannot be cured); or

	by either HoldCo or the Purchaser if either of the Merger Agreement or the AP Asset Purchase Agreement
is terminated.

Where action is taken to terminate this Agreement pursuant to this Section 8.1, it shall be
sufficient for such action to be authorized by the Board of Directors (as applicable) of the party taking such action.

Section 8.2.  Effect of Termination
.  In the event of termination of this Agreement as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or obligation on the part of Purchaser, HoldCo or Shareholders, or
their respective officers, directors or shareholders, provided, that, each party shall remain liable for any breaches of this
Agreement prior to its termination; and provided, further, that the provisions of Sections 5.1 and
5.2, this Article 8 and Article 9 of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.

Section 8.3.  Waiver; Amendment
.  

	The Purchaser may (i) extend the time for the performance of or waive any of the obligations or other
acts of the Shareholders contained herein, or (ii) waive any inaccuracies in the representations and warranties of the
Shareholders or HoldCo contained herein or in any document delivered by the Shareholders or HoldCo pursuant hereto.  Any such
extension or waiver shall be valid only if set forth in an instrument in writing signed by the Purchaser.

	The Shareholders may (i) extend the time for the performance of any of the obligations or other acts
of the Purchaser contained herein, or (ii) waive any inaccuracies in the representations and warranties of the Purchaser
contained herein or in any document delivered to the Shareholders by the Purchaser pursuant hereto.  Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the Shareholder's Representative.

	Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement.  The failure of any party
to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

This Agreement may not be amended, restated, supplemented or otherwise modified except by an instrument in
writing signed by the Purchaser and the Shareholders. 

Section 8.4.  Profit Capture
.  

	If the Merger Agreement is terminated pursuant to Section 7.1(d) or 7.1(e) of the Merger Agreement
(a "Triggering Termination") under circumstances that give rise to the obligation of the Company to pay the
Termination Fee under Section 7.3(b) of the Merger Agreement and any of a Shareholder's Shares are sold, transferred, exchanged, canceled or disposed of, or any of HoldCo's shares of capital stock of
the Company are sold, transferred, exchanged, canceled or disposed of, in connection with, or as a result of, any Acquisition that is in
existence on, or that has been otherwise made prior to, the nine month anniversary of the date of the Triggering Termination (an
"Alternative Disposition") then, within three business days after the closing of such Alternative Disposition, such
Stockholder (or HoldCo, as applicable) shall tender and pay to, or shall cause to be tendered and paid to, Purchaser, or its designee, in
immediately available funds, the Profit realized from such Alternative Disposition. As used in this Section 8.4(a),
"Profit" shall mean an amount equal to the excess, if any, of (i) the Alternative Transaction Consideration
over (ii) the Current Transaction Consideration. As used in this Section 8.4, "Alternative Transaction
Consideration" shall mean all cash, securities, notes or other debt instruments, and other consideration received or to be
received, directly or indirectly, by such Stockholder and his affiliates in connection with or as a result of such Alternative Disposition or
any agreements or arrangements  entered into, directly or indirectly, by such Stockholder or any of his affiliates as a part of or in connection with the Alternative
Disposition (excluding any employment agreement or consulting agreement, and
including any non-competition agreement, confidentiality agreement, settlement agreement and/or release agreement only if separate
consideration is expressly set forth and allocated to such agreements in the Alternative Disposition transaction documents).
As used in this Agreement, "Current Transaction Consideration"shall mean all amounts payable directly or
indirectly by Purchaser to the Stockholder in respect of his Shares pursuant to Section 1.3(d) of this Agreement. As used in
this Section 8.4, "Acquisition" shall refer to the definition in the Merger Agreement.

	For purposes of determining Profits under this Section 8.4, consideration received or to be
received by HoldCo in an Alternative Disposition or Second Transaction (as defined below) in consideration of shares of capital stock of
the Company held by HoldCo shall be deemed to be received by the Shareholders pro-rata in accordance with their relative share
ownership in HoldCo.  For purposes of determining Profits under this Section 8.4: (i) all non-cash items shall be
valued based upon the fair market value thereof as determined by an independent expert selected by Purchaser, (ii) all deferred
payments or consideration shall be discounted to reflect a market rate of net present value thereof as determined by the above-
referenced independent expert, (iii) all contingent payments will be assumed to have been paid and (iv) if less than all of a
Shareholder's Shares are subject to the Alternative Disposition, then the Current Transaction Consideration shall be deemed to be an
amount equal to the Current Transaction Consideration multiplied by a fraction, the numerator of which is the number of such
Shareholder's Shares sold, transferred, exchanged, canceled or disposed of in such Alternative Disposition and the denominator of
which is the total number of such Shareholder's Shares. In the event any contingent payments included in the determination of Profits
ultimately are not paid pursuant to an Alternative Disposition, then Purchaser shall reimburse such Shareholder for any amounts paid to
Purchaser hereunder in respect of such uncollected contingent payments promptly after receipt of written notice of such non-
payment.

	In the event that, after the date of this Agreement, pursuant to Section 5.3(b)(iii) of the Merger Agreement,
Purchaser agrees with the Company and/or the Shareholders to increase the dollar amount of the consideration to be paid (or deemed
paid) by Purchaser for the Shares (a "Second Transaction"), then, as may be requested by Purchaser, (i) the
Shareholders shall, and each shall cause each of its affiliates who Beneficially Own any of such Shareholder's Shares, to either execute
and deliver to Purchaser such documents or instruments as may be necessary to waive the right to receive the amount of such
increase to the extent that such increase would result in any Profit or (ii) the Shareholders shall each tender and pay, or cause to
be tendered and paid, to Purchaser, or its designee, in immediately available funds and promptly after receipt thereof, the Profit realized
from such Second Transaction. As used in this Section 8.4(c),  "Beneficially Own" or
"Beneficial Ownership" with respect to any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) including pursuant to any agreement, arrangement or understanding, whether or not in writing (without duplicative
counting of the same securities by the same holder, securities Beneficially Owned by a person (as defined in the Merger Agreement)
shall include securities Beneficially Owned by all other persons (who are affiliates of such person) who together with such person would
constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act), and "Profit" shall mean an
amount equal to the excess, if any, of (y) the Second Transaction Consideration over (z) the Current Transaction
Consideration. As used in this Agreement, "Second Transaction Consideration" shall mean all cash, securities,
settlement or termination amounts, notes or other debt instruments, and other consideration received or to be received, directly or
indirectly, by the Shareholders and their affiliates in connection with or as a result of the Second Transaction or any agreements or
arrangements  entered into, directly or indirectly, by a Shareholder or any of his affiliates with the Company as a part of or in connection
with the Second Transaction (excluding any employment agreement or consulting agreement, and including any non-competition
agreement, confidentiality agreement, settlement agreement and/or release agreement only if separate consideration is expressly set
forth and allocated to such agreements in the Second Transaction transaction documents).

ARTICLE 9

GENERAL PROVISIONS

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

	if to the Purchaser, to:

Omron Management Center of America, Inc.

   East Commerce

  Schaumburg, Illinois 60045

   Attention:  President

  Telephone No.: (847) 843-7852

   Facsimile No: (847) 884-1866

with a copy to:

Enterprise Law Group, LLP

   Three First National Plaza

   70 West Madison St., Suite 740

   Chicago, Illinois 60602

   Attention:  Steven K. Sims, Esq.

   Telephone No.:  (312) 578-0200

   Facsimile No:  (312) 578-0202

	if to HoldCo, the Company or the Shareholders, to:

Scientific Technology Incorporated

   6550 Dumbarton Circle

   Fremont, California 94555

   Attention:  Joseph J. Lazzara, President and Chief Executive Officer

   Telephone No.: (510) 608-3400

   Facsimile No: (510) 744-1442

with a copy to:

Wilson Sonsini Goodrich & Rosati, P.C.

   701 Fifth Avenue, Suite 5100

   Seattle, Washington  98104

   Attention: Christian E. Montegut, Esq.

   Telephone No:  (206) 883-2500

   Facsimile No.:  (206) 883-2699

Section 9.2.  Interpretation
.  The table of contents and headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.  The words "include," "includes"
and "including" when used herein shall be deemed in each case to be followed by the words "without limitation."
The word "affiliate" when used herein shall mean, with respect to any specified person, any other person, that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.  The
word "person" when used herein shall mean any individual, partnership, firm, corporation, joint venture, association, trust,
unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.  For purposes of this Agreement, the term
"knowledge" means, with respect to a party hereto, with respect to any matter in question, that, in case of an entity,
any of the "officers" (as such term is defined in Rule 16a-1(f) promulgated under the Exchange Act) of such party, or, in
case of an individual, such individual, has actual knowledge of such matter, after a reasonable inquiry of such advisor(s) or employee(s)
of the party who would reasonably be expected to have actual knowledge of such matter.

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

Section 9.4.  Entire Agreement;
Assignment
.  This Agreement, the Exhibits hereto, the Disclosure Letter, the Escrow Agreement, the Non-
Disclosure Agreement, the Merger Agreement, AP Purchase Agreement, and the documents and instruments and other agreements
among the parties hereto referenced herein:  (a) 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; (b) are not intended to confer upon any other person any rights or remedies hereunder (except Purchaser
Indemnified Parties); and (c) shall not be assigned, by operation of law or otherwise, by the Shareholders.

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

Section 9.6.  Other Remedies
.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a
party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and
the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

Section 9.7.  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 law thereof.  Each of the
parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of any Delaware State court, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby (and each agrees that no such
action, suit or proceeding relating to this Agreement shall be brought by it or any of its affiliates except in such courts). Each of the
parties hereto further agrees that, to the fullest extent permitted by applicable law, service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth above shall be effective service of process for any action,
suit or proceeding in Delaware with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately
preceding sentence. Each of the parties hereto irrevocably and unconditionally waives (and agrees not to plead or claim) any objection
to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in any
Delaware State court, or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

Section 9.8.  Rules of Construction
.  The parties hereto agree that they have been represented by counsel during the negotiation and
execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

Section 9.9.  Additional Shareholders
.  persons acquiring shares of HoldCo after the date hereof but prior to the Closing Date may
become parties to this Agreement by executing a counterpart of this Agreement, without any amendment of this Agreement, pursuant to
this paragraph.  Such persons shall become Shareholders for all purposes of this Agreement and shall be added to the list of
Shareholders attached as Exhibit A.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have executed or caused this HoldCo Stock Purchase Agreement
to be executed as of the date first written above.
Omron Management Center of America,
Inc.

 

By: _____________________________

Tatsunosuke Goto

President

 

Scientific Technologies Incorporated

 

  By: _____________________________

    Joseph J. Lazzara

President, Chief Executive Officer and Treasurer

 

Scientific Technology Incorporated

 

 By: _____________________________

 Anthony R. Lazzara

President and Chairman

  

Shareholders' Representative

 

 _____________________________

Joseph J. Lazzara

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