AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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WATER PIK TECHNOLOGIES INC | COAST ACQUISITION CORPORATION | COAST MERGER CORPORATION

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 1/10/2006
Industry: Appliance and Tool Law Firm: Latham & Watkins LLP;O?Melveny & Myers LLP

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

COAST ACQUISITION CORPORATION,

COAST MERGER CORPORATION,

AND

WATER PIK TECHNOLOGIES, INC.

DATED AS OF JANUARY 6, 2006

TABLE OF CONTENTS

			Page

ARTICLE I		THE MERGER	1

	1.1	The Merger	1

	1.2	Effective Time; Closing	1

	1.3	Effect of the Merger	2

	1.4	Certificate of Incorporation and Bylaws	2

	1.5	Directors and Officers	2

	1.6	Effect on Capital Stock	2

	1.7	Surrender of Certificates	4

	1.8	Dissenting Shares	6

	1.9	Further Action	7

ARTICLE II		REPRESENTATIONS AND WARRANTIES OF THE COMPANY	7

	2.1	Organization; Standing and Power; Charter Documents; Subsidiaries	7

	2.2	Capital Structure	8

	2.3	Authority; Non-Contravention; Necessary Consents	10

	2.4	SEC Filings; Financial Statements	12

	2.5	No Undisclosed Liabilities	13

	2.6	Absence of Certain Changes or Events	13

	2.7	Taxes	14

	2.8	Intellectual Property	15

	2.9	Compliance; Permits	16

	2.10	Litigation	17

	2.11	Brokers’ and Finders’ Fees	17

	2.12	Employee Benefit Plans	18

	2.13	Environmental Matters	20

	2.14	Contracts	22

	2.15	Disclosure	24

	2.16	Board Approval	24

	2.17	Fairness Opinion	24

	2.18	Rights Plan	25

	2.19	Vote Required	25

	2.20	Real Estate	25

	2.21	Transactions With Affiliates	26

	2.22	Disclaimer of Other Representations and Warranties	27

	2.23	Labor and Employment Matters	27

	2.24	Insurance	27

	2.25	Asset Sufficiency	27

	2.26	Customers	27

ARTICLE III		REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB	28

	3.1	Organization; Standing and Power; Charter Documents; Subsidiaries	28

	3.2	Authority; Non-Contravention; Necessary Consents	28

	3.3	Brokers’ and Finders’ Fees	29

	3.4	Disclosure	30

	3.5	Board Approval	30

	3.6	Financing	30

	3.7	Section 203 of the Delaware Law	30

	3.8	No Reliance	30

	3.9	Guarantee	31

ARTICLE IV		CONDUCT PRIOR TO THE EFFECTIVE TIME	31

	4.1	Conduct of Business of the Company	31

ARTICLE V		AGREEMENTS	35

	5.1	Proxy Statement	35

	5.2	Meetings of Stockholders; Board Recommendation	35

	5.3	Acquisition Proposals	36

	5.4	Confidentiality; Access to Information	40

	5.5	Public Disclosure	40

	5.6	Regulatory Filings; Commercially Reasonable Efforts	40

	5.7	Notification of Certain Matters	43

	5.8	Indemnification	44

	5.9	Compliance with Section 409A; Continuation of Deferred Compensation Programs	45

	5.10	Section 16 Matters	46

	5.11	Financing	46

	5.12	Merger Sub Compliance	47

	5.13	Resignations	47

	5.14	Company Purchase Plan	47

	5.15	Company Performance Share Plan	48

ARTICLE VI		CONDITIONS TO THE MERGER	48

	6.1	Conditions to the Obligations of Each Party to Effect the Merger	48

	6.2	Additional Conditions to the Obligations of Parent and Merger Sub	48

	6.3	Additional Conditions to the Obligations of the Company	49

ARTICLE VII		TERMINATION, AMENDMENT AND WAIVER	50

	7.1	Termination	50

	7.2	Notice of Termination; Effect of Termination	52

	7.3	Fees	52

	7.4	Amendment	54

	7.5	Extension; Waiver	54

ARTICLE VIII		GENERAL PROVISIONS	54

	8.1	Non-Survival of Representations and Warranties	54

	8.2	Notices	55

	8.3	Interpretation; Knowledge	56

	8.4	Counterparts	57

	8.5	Entire Agreement; Third-Party Beneficiaries	57

	8.6	Severability	57

	8.7	Other Remedies; Specific Performance	57

	8.8	Governing Law; Jurisdiction	58

	8.9	Rules of Construction	58

	8.10	Assignment	58

	8.11	Waiver of Jury Trial	58

iii

INDEX OF DEFINED TERMS

Agreement		Intro paragraph
Alternative Transaction		Section 7.3(b)(i)
Antitrust Authorities		Section 5.6(e)(ii)
Antitrust Laws		Section 5.6(e)(i)
Certificate of Merger		Section 1.2
Certificates		Section 1.7(c)
Closing		Section 1.2
Closing Date		Section 1.2
Code		Section 1.6(d)
Company		Intro paragraph
Company Adverse Recommendation Change		Section 5.3(c)
Company Balance Sheet		Section 2.4(b)
Company Charter Documents		Section 2.1(b)
Company Common Stock		Section 1.6(a)
Company Disclosure Letter		ARTICLE II
Company Financials		Section 2.4(b)
Company Intellectual Property		Section 2.8(a)
Company Material Contract		Section 2.14(a)
Company Options		Section 2.2(b)
Company Permits		Section 2.9(b)
Company Plan		Section 2.12(a)
Company Preferred Stock		Section 2.2(a)
Company Purchase Plan		Section 2.2(b)
Company Rights		Section 2.2(a)
Company Rights Agreement		Section 2.2(a)
Company SEC Reports		Section 2.4(a)
Company Stock Plans		Section 2.2(b)
Company Termination Fee		Section 7.3(b)
Competing Transaction		Section 5.3(f)(i)
Competing Transaction Proposal		Section 5.3(a)
Confidentiality Agreement		Section 5.4(a)
Contract		Section 2.2(d)
Costs		Section 5.8(c)
Debt Financing		Section 3.6
Debt Financing Letter		Section 3.6
Deferred Compensation Plans		Section 5.9
Deferred Stock Units		Section 2.2(a)
Delaware Law		Section 1.1
Dissenting Shares		Section 1.8(a)
DOJ		Section 5.6(a)
Effective Time		Section 1.2
End Date		Section 7.1(b)
Environmental Claims		Section 2.13
Environmental Laws		Section 2.13

ERISA		Section 2.12(a)
ERISA Affiliate		Section 2.12(d)
Equity Financing		Section 3.6
Equity Financing Letter		Section 3.6
Exchange Act		Section 2.3(c)
Exchange Agent		Section 1.7(a)
Exchange Fund		Section 1.7(b)
Expenses		Section 7.3(b)
Financing		Section 3.6
Financing Letters		Section 3.6
FTC		Section 5.6(a)
Fully Diluted Shares		Section 2.2(b)
GAAP		Section 2.4(b)
Governmental Entity		Section 2.3(c)
Guarantees		Section 3.9
Hazardous Material		Section 2.13(a)
Hazardous Materials Activities		Section 2.13(b)
HSR Act		Section 2.3(c)
Include		Section 8.3(a)
Includes		Section 8.3(a)
Including		Section 8.3(a)
Indemnified Parties		Section 5.8(a)
Intellectual Property		Section 2.8(a)
International Plan		Section 2.12(h)
Improvements		Section 2.20(c)
IRS		Section 2.12(b)
Knowledge		Section 8.3(b)
Leased Real Property		Section 2.20(b)
Legal Requirements		Section 2.2(d)
Liens		Section 2.1(c)
Material Adverse Effect		Section 8.3(c)
Merger		Section 1.1
Merger Consideration		Section 1.6(a)
Merger Sub		Intro paragraph
Merger Sub Charter Documents		Section 3.1(b)
Merger Sub Common Stock		Section 1.6(c)
Necessary Consents		Section 2.3(c)
Option Merger Consideration		Section 1.6(d)
Owned Real Property		Section 2.20(a)
Parent		Intro paragraph
Parent Board Approval		Section 3.5
Parent Charter Documents		Section 3.1(b)
Parent Disclosure Letter		ARTICLE III
Parent Termination Fee		Section 7.3(b)
Permits		Section 2.9(b)

Permitted Liens		Section 2.20(a)
Person		Section 8.3(d)
Preferred Shares		Section 2.2(b)
Proxy Statement		Section 5.1
Real Property		Section 2.20(b)
Real Property Leases		Section 2.20(b)
Recommendation		Section 5.2(b)
Release		Section 2.13
Restricted Stock		Section 2.2(b)
SEC		Section 2.3(c)
Section 409A		Section 5.9
Securities Act		Section 2.4(a)
Series A Preferred		Section 2.2(a)
Stockholders’ Meeting		Section 5.2(a)
Subsidiary		Section 2.1(a)
Subsidiary Charter Documents		Section 2.1(b)
Superior Proposal		Section 5.3(f)(ii)
Surviving Corporation		Section 1.1
Tax		Section 2.7(a)
Taxes		Section 2.7(a)
Tax Returns		Section 2.7(a)
the business of		Section 8.3(a)
Title Materials		Section 2.20(a)
Triggering Event		Section 7.1(h)
Unavailable Debt Portion		Section 7.3(b)
Voting Debt		Section 2.2(c)

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of January 6, 2006, by and among Coast Acquisition Corporation, a Delaware corporation (“ Parent ”), Coast Merger Corporation, a Delaware corporation and wholly-owned subsidiary of Parent (“ Merger Sub ”) and Water Pik Technologies, Inc., a Delaware corporation (the “ Company ”).

RECITALS

A. The respective Boards of Directors of Parent, Merger Sub and the Company have deemed it advisable and in the best interests of their respective corporations and stockholders to consummate the Merger (as defined in Section 1.1), on the terms and subject to the conditions set forth in this Agreement.

B. The respective Boards of Directors of Parent, Merger Sub and the Company have approved and declared advisable this Agreement and the transactions contemplated hereby, including 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 (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the General Corporation Law of the State of Delaware (“ Delaware Law ”), Merger Sub shall be merged with and into the Company (the “ Merger ”), the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation. The Company, as 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 Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the relevant provisions of Delaware Law (the “ Certificate of Merger ”) (the time of such filing with the Secretary of State of the State of Delaware (or such later time as may be agreed in writing by the Company and Parent and specified in the Certificate of Merger) being the “ Effective Time ”) as soon as practicable on the Closing Date (as defined below). The closing of the Merger (the “ Closing ”) shall take place at the offices of O’Melveny & Myers LLP, 610 Newport Center Drive, 17 ^th Floor, Newport Beach, California, at a time and date to be specified by the parties, which shall be no later than the later of (a) the second business day after the satisfaction or waiver of the conditions set forth in Article VI and (b) April 26, 2006, or at such other time, date and location as the parties hereto agree in writing (the date on which the closing actually occurs, the “ Closing Date ”).

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 Delaware Law.

1.4 Certificate of Incorporation and Bylaws . At the Effective Time, the Certificate of Incorporation of the Company shall be amended to read in its entirety as set forth in Exhibit A . At the Effective Time, the Bylaws of the Company shall be amended to read in their entirety as set forth in Exhibit B .

1.5 Directors and Officers . The initial directors of the Surviving Corporation shall be the directors of Merger Sub immediately prior to the Effective Time, until their respective successors are duly elected or appointed and qualified. The initial officers of the Surviving Corporation shall be the officers of the Company immediately prior to the Effective Time, until their respective successors are duly appointed.

1.6 Effect on Capital 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, Merger Sub, the Company or the holders of any shares of capital stock of the Company, the following shall occur:

(a) Company Common Stock . Each share of the Common Stock, par value $0.01 per share, 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(b) and any Dissenting Shares) will be canceled and extinguished and automatically converted into the right to receive $27.75 per share in cash (the “ Merger Consideration ”).

(b) Cancellation of Treasury and Parent Owned Stock . Each share of Company Common Stock held by the 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.

(c) Capital Stock of Merger Sub . Each share of common stock, par value $.01, of Merger Sub (the “ Merger Sub Common Stock ”) issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

(d) Employee Stock Options; Restricted Stock; Deferred Stock Units .

(i) Except as provided for in Section 1.6(d)(ii), each Company Option (as defined in Section 2.2(b)) which is outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, shall by virtue of the Merger and without any action on the part of the Parent, Merger Sub, the Company or the holder thereof, be converted into and shall become a right to receive an amount in cash, without interest, with respect to each share subject thereto, equal to the excess, if any, of the Merger Consideration over the per share exercise or purchase price of such Company Option (such amount being hereinafter referred to as the “ Option Merger Consideration ”) and each

Company Option shall be canceled at the Effective Time. The payment of the Option Merger Consideration to the holder of a Company Option shall be reduced by any income or employment tax withholding required under the Internal Revenue Code of 1986, as amended (the “ Code ”) or any provision of state, local or foreign Tax (as defined in Section 2.6) law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of such Company Option. The Company Stock Plans (as defined in Section 2.2 (b)) shall terminate at the Effective Time.

(ii) Notwithstanding the provisions of Section 1.6(d)(i) that provide for the cancellation of the unexercised Company Options, Parent, in its sole discretion, may permit the holders of certain Company Options to elect, after the date hereof and before the Closing Date and on a form and in a manner reasonably acceptable to each of Parent and the Company, to exchange their outstanding Company Options and receive substituted options to purchase common stock of Parent. Parent intends that the exchange and substitution of the Company Options for new options shall be effected in a manner, including but not limited to adjustments to the exercise price of the new options, that satisfies the requirements of Section 409A of the Code and the requirements of Treasury Regulation Section 1.424-1 to the extent that such requirements can be satisfied in light of the intended terms of the new options; provided, however, that none of the Parent, Merger Sub or the Company shall have any liability to the optionee or any other person in the event that such requirements are not satisfied.

(iii) Each Deferred Stock Unit (as defined in Section 2.2(b) hereof) which is outstanding immediately prior to the Effective Time, shall by virtue of the Merger and without any action on the part of the Parent, Merger Sub, the Company or the holder thereof, be converted into and shall become a right to receive an amount in cash equal to the Merger Consideration. Each Performance Share (as defined in Section 2.2(b) hereof) which the Company has, subject to certain specified criteria being satisfied, agreed to issue but not yet issued immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the Parent, Merger Sub, the Company or the holder thereof, be converted into and shall become a right to receive an amount in cash equal to the Merger Consideration. Each share of Company Common Stock that is subject to restrictions on ownership or transferability shall vest in full and become fully transferable and free of restrictions not later than immediately prior to the Effective Time. To the extent any holder of an award referenced in this Section 1.6(d)(iii) has made a deferred payment election prior to the date hereof in accordance with the terms of the applicable Company Plan with respect to any such award, any payment with respect to that award shall be made in accordance with the terms of such deferred payment election. The Company agrees to take any and all commercially reasonable actions necessary (including any action reasonably requested in writing by Parent) to effectuate the transactions contemplated by this Section 1.6(d).

(e) Adjustments to the 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, so that recipients of the Merger Consideration receive the same economic effect as contemplated by this Agreement prior to such event.

1.7 Surrender of Certificates .

(a) Exchange Agent . Prior to the Effective Time, Parent shall select a bank or trust company reasonably satisfactory to the Company to act as the exchange agent (the “ Exchange Agent ”) in the Merger. Prior to the Effective Time, Parent shall enter into an agreement with Exchange Agent, which shall be reasonably satisfactory to the Company.

(b) Parent to Provide Cash . At the Effective Time, Parent shall deposit, or shall cause the Surviving Corporation to deposit, with the Exchange Agent for exchange in accordance with this Article I, cash payable to the stockholders of the Company pursuant to Section 1.6(a) in exchange for outstanding shares of Company Common Stock. Any funds deposited with the Exchange Agent shall hereinafter be referred to as the “ Exchange Fund .”

(c) Exchange Procedures . Promptly after the Effective Time (and 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 cash pursuant to Section 1.6(a): (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates 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 in exchange for the Merger Consideration to which the holder of such Certificate is entitled pursuant to Section 1.6(a) (without limiting the effect of Section 1.7(e)). Upon surrender of Certificates for cancellation to the Exchange Agent, 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 such Certificates shall be entitled to receive promptly (and in no event later than five (5) business days after receipt thereof) in exchange therefor the Merger Consideration to which the holder of such certificate is entitled pursuant to Section 1.6(a) (less any withholding amount with respect to the shares of Company Common Stock formerly held by such holder as provided by Section 1.7(e)), and the Certificates so surrendered shall forthwith be canceled. No interest shall accrue or be paid on the amounts payable pursuant to this Article I upon surrender of the Certificates.

(d) Transfers of Ownership . If the payment of the amounts payable pursuant to Section 1.6(a) is to be made to a person other than the person in whose name the surrendered Certificate formerly evidencing shares of Company Common Stock are registered, it will be a condition of payment that the Certificates so surrendered will be properly endorsed and otherwise in proper form for transfer and that the Persons (as defined in Section 8.3(d)) requesting such payment will have paid to Parent or any agent designated by it any transfer or other Taxes (as defined in Section 2.6) required by reason of the payment of the amount specified in Section 1.6(a) to a Person other than the registered holder of the Certificates surrendered, or established to the reasonable satisfaction of Parent or any agent designated by it that such Tax has been paid or is not payable.

(e) Required Withholding . Each of the Exchange Agent and the Parent shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any former holder of Company Common Stock such amounts as may be required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign Tax law or under any other applicable Legal Requirement (as defined in Section 2.2(d)). To the extent such amounts are so deducted or withheld, the amount of such consideration 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.

(f) No Liability . Notwithstanding anything to the contrary in this Section 1.7, neither the Exchange Agent, the Surviving Corporation nor any party hereto shall be liable to a holder of shares of Company Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

(g) Investment of Exchange Fund . The Exchange Agent shall invest the Exchange Fund as directed by Parent on a daily basis; provided that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion; provided further that no such investment or loss thereon shall affect the amounts payable to Company stockholders pursuant to this Article I or otherwise impair the rights of such stockholders hereunder. 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 stockholders pursuant to this Article I shall promptly be paid to the Surviving Corporation.

(h) Termination of Exchange Fund . Any portion of the Exchange Fund which remains undistributed to the holders of Certificates twelve (12) months after the Effective Time shall, at the request of Parent, be delivered to the Surviving Corporation, and any holders of the Certificates who have not surrendered such Certificates in compliance with this Section 1.7 shall after such delivery to the Surviving Corporation look only to the Surviving Corporation (subject to abandoned property, escheat and similar laws) for payment of their claim for the Merger Consideration, without interest, to which such holders may be entitled pursuant to Section 1.6(a).

(i) No Further Ownership Rights in Company Common Stock . From and after the Effective Time, there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock. From and after the Effective Time, the holders of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock except as otherwise provided herein or by applicable law. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange Agent, they shall be canceled and exchanged for the Merger Consideration, as provided in this Article I, subject to Section 1.8 and applicable law in the case of Dissenting Shares. All cash paid upon surrender of Certificates in accordance with the terms of this Article I shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares previously represented by such Certificates.

(j) Lost, Stolen or Destroyed Certificates . In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall pay in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration to which the holder thereof is entitled pursuant to this Article I; provided, however, that Parent or the Surviving Corporation may, in their discretion and as a condition precedent to the payment thereof, require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as they may reasonably direct as indemnity against any claim that may be made against Parent, the Company, the Surviving Corporation or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed.

(k) Applicability to Dissenting Shares . The provisions of this Section 1.7 shall also apply to Dissenting Shares that lose their status as such, except that the obligations of the Exchange Agent under this Section 1.7 shall commence only on the date of such loss of status.

1.8 Dissenting Shares .

(a) Notwithstanding any provision of this Agreement to the contrary, any shares of Company Common Stock for which the holder thereof has demanded an appraisal of their value in accordance with, and has complied in all respects with, Section 262 of Delaware Law (collectively, the “ Dissenting Shares ”) shall not be converted into or represent the right to receive cash in accordance with Section 1.6(a), and the holder or holders of such shares shall be entitled only to such rights as may be granted to such holder or holders in Section 262 of Delaware Law.

(b) Notwithstanding the provisions of subsection (a), if any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such appraisal rights, then, as of the occurrence of such event, such holder’s shares shall no longer be deemed to be “Dissenting Shares” and such shares shall automatically be converted into and represent only the right to receive the applicable cash payment provided in Section 1.6(a), without interest, upon surrender of the certificate formerly representing such shares in accordance with Section 1.7.

(c) The Company shall give Parent (i) prompt notice of any demands for appraisal of any shares of Company Common Stock and the withdrawals of such demands, and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under Delaware Law. The Company shall not, except with the prior written consent of Parent (which consent may not be unreasonably withheld, delayed or conditioned), offer to make or make any payment with respect to any demands for appraisal of the shares Company Common Stock or offer to settle or settle any such demands.

1.9 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 Company and Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of Company and Merger Sub, 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

Except as otherwise set forth in writing in appropriately corresponding sections of the disclosure letter supplied by the Company to Parent dated as of the date hereof (the “ Company Disclosure Letter ”) (it being understood that any matter set forth in the Company Disclosure Letter shall also be deemed disclosed with respect to any other section of this Article II to which the matter relates, so long as the applicability of such matter to such other section is readily apparent) or in any Company SEC Reports (as defined in Section 2.4) filed and publicly available prior to the date of this Agreement (other than forward looking statements set forth in the “risk factors” and “management’s discussion and analysis of financial condition and results of operations” portions of the Company’s SEC Reports), the Company represents and warrants to Parent and Merger Sub as follows:

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

(a) Organization; Standing and Power . The Company and each of its Subsidiaries (as defined below) is a corporation or other organization duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, except where the failure of any Subsidiary to be so organized, existing and in good standing would not reasonably be expected to have a Material Adverse Effect (as defined in Section 8.3(c)) on the Company, has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failure to so qualify or to be in good standing would not reasonably be expected to have a Material Adverse Effect on the Company. For purposes of this Agreement, “ Subsidiary ,” when used with respect to any party, shall mean any corporation or other organization, whether incorporated or unincorporated, at least a

majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries.

(b) Charter Documents . The Company has delivered or made available to Parent: (i) a true and correct copy of the Certificate of Incorporation and Bylaws of the Company, each as amended to date (collectively, the “ Company Charter Documents ”) and (ii) the certificate of incorporation and bylaws, or like organizational documents, each as amended to date (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, except, in the case of a Subsidiary, as would not reasonably be expected to have a Material Adverse Effect on the Company.

(c) Subsidiaries . Section 2.1(c) of the Company Disclosure Letter sets forth a true and complete list of the authorized and outstanding capital stock, name, jurisdiction of organization, and record, and, to the Knowledge of the Company, beneficial owner of the equity interests of each Subsidiary of the Company. All the outstanding shares of capital stock of, each such Subsidiary have been validly issued and are fully paid and non-assessable and free and clear of all pledges, claims, liens, charges, preemptive rights, mortgages, encumbrances, options and security interests of any kind or nature whatsoever (collectively, “ Liens ”), including any right of first refusal or any other restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity or ownership interests, except for restrictions imposed by applicable securities laws or as set forth on Section 2.1(c) of the Company Disclosure Letter. Except for the Subsidiaries listed in Section 2.1(c) of the Company Disclosure Letter, the Company does not own any shares of capital stock or any other equity interest in any corporation or any other Person.

2.2 Capital Structure .

(a) Capital Stock . The authorized capital stock of the Company at the close of business on the date hereof consists of: (i) 50,000,000 shares of Company Common Stock, par value $0.01 per share; and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share (the “ Company Preferred Stock ”), 500,000 of which have been designated as Series A Junior Participating Preferred Stock (“ Series A Preferred ”), all of which are reserved for issuance upon exercise of preferred stock purchase rights (the “ Company Rights ”) issuable pursuant to the preferred stock rights agreement, dated as of November 12, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C., as amended, (the “ Company Rights Agreement ”), none of which are issued and outstanding. As of January 5, 2006: (i) 12,290,738 shares of Company Common Stock were issued and outstanding, (ii) 708,738 shares of Company Common Stock were issued and held by the Company in its treasury, and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of capital stock of the Company are duly authorized and validly issued, fully paid and non-assessable and not issued in violation of or subject to any preemptive rights.

(b) Stock Options, Deferred Stock Units and Performance Shares . As of January 5, 2006: (i) 1,756,742 shares of Company Common Stock are subject to issuance pursuant to outstanding options to purchase Company Common Stock under the Company’s Broad-Based Stock Option Plan, the Company’s 1999 Incentive Plan, and the Company’s 1999 Non-Employee Director Stock Compensation Plan (together, such plans are referred to as the “ Company Stock Plans ” and such outstanding options are referred to as the “ Company Options ”); (ii) 153,690 deferred stock units (“ Deferred Stock Units ”), each such Deferred Stock Unit representing one share of Common Stock, are outstanding under the 1999 Incentive Plan, (iii) 174,605 performance shares(“ Performance Shares ”), each Performance Share entitling the holder to one share of the Company’s Common Stock, subject to certain specified criteria being satisfied, required to be issued by the Company under the 1999 Incentive Plan, (iv) 89,059 shares of Company Common Stock are available for future issuance under the Company Stock Plans, and (v) 84,558 shares of Company Common Stock are reserved for future issuance under the Company’s Employee Stock Purchase Plan, as amended (the “ Company Purchase Plan ”). As of the Effective Time, the aggregate number of Fully-Diluted Shares will not exceed 14,375,775. As used herein, “ Fully-Diluted Shares ” as of any time shall mean (i) shares of Company Common Stock that are issued and outstanding as of such time (other than shares that are held by the Company in its treasury as of such time) including, without limitation, Restricted Stock, that are issued and outstanding as of such time, (ii) any stock appreciation, phantom stock, profit participation or other similar rights that are based upon the fair market value of the Company Common Stock, including, without limitation, any Deferred Stock Units, that are outstanding as of such time, and (iii) shares of Company Common Stock issuable upon the exercise or conversion of, the exchange for, or otherwise pursuant to the terms of, any securities, options, warrants, calls, rights, commitments, Contracts, arrangements or undertakings of any kind (in each case, whether contingent or otherwise) to which the Company or any of its Subsidiaries are a Party, including, without limitation, Company Options, that are outstanding as of such time. All shares of Company Common Stock subject to issuance under the Company Stock Plans and the Company Purchase Plan, 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 non-assessable and not subject to any preemptive rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to the Company. Section 2.2(b) of the Company Disclosure Letter sets forth a list as of January 5, 2006, of all issued Company Options, Performance Shares, Deferred Stock Units and shares of Company Common Stock that are subject to repurchase rights, vesting or similar restrictions (“ Restricted Stock ”), and, for each such Company Option, Performance Share, Deferred Stock Unit or share of Restricted Stock listed, the name of the holder, the number of underlying shares of Common Stock subject to the award, the date of grant, the quantity vested, the exercise price and whether the award is an “incentive stock option” as defined in Section 422 of the Code or subject to Section 409A of the Code. Since January 5, 2006 the Company has not (i) issued any Company Options, Performance Shares, Deferred Stock Units or Restricted Stock and (ii) the Company has not issued any shares of Company Common Stock other than upon the exercise of any Company Options outstanding as of January 5, 2006.

(c) Voting Debt . No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders may vote (“ Voting Debt ”) of the Company is issued or outstanding as of the date hereof.

(d) Other Securities . Except as otherwise set forth in this Section 2.2, there are no securities, options, warrants, calls, rights, commitments, Contracts, arrangements 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 issue, deliver or sell, or redeem, repurchase, acquire or pay for or cause to be issued, delivered or sold, or redeemed, repurchased, acquired or paid for additional shares of capital stock, Voting Debt, equity interests 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, Contract, arrangement or undertaking. All outstanding shares of Company Common Stock, all outstanding Company Options, all outstanding Deferred Stock Units, all outstanding Performance Shares and all outstanding shares of capital stock of each Subsidiary of the Company have been issued and granted in compliance in all material respects with (i) all applicable securities laws and all other applicable Legal Requirements (as defined below), (ii) all requirements set forth in applicable material Contracts and (iii) Company Charter Documents or Subsidiary Charter Documents. There are no voting trusts or other Contracts to which the Company or any of its Subsidiaries is a party with respect to the voting of capital stock of the Company or any of its Subsidiaries. For purposes of this Agreement: (x) “ Legal Requirements ” shall mean any federal, state, local, municipal, foreign or other law (including any Antitrust Law (as defined below)), statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling, judgment or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity; and (y) “ Contract ” shall mean any written or oral agreement, contract, subcontract, settlement agreement, lease, binding understanding, instrument, indenture, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment or undertaking of any nature.

2.3 Authority; Non-Contravention; Necessary Consents .

(a) Authority . The Company has all requisite corporate power and authority to enter into this Agreement, perform its obligations hereunder and, subject to the receipt of stockholder approval, to consummate the transactions contemplated hereby. 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 other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement or to consummate the Merger and the other transactions contemplated hereby (other than the adoption of this Agreement by the Company’s stockholders and the filing of the Certificate of Merger

pursuant to Delaware Law). This Agreement has been duly executed and delivered by the Company and, assuming due execution and delivery by Parent and Merger Sub, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent such enforcement may be limited by bankruptcy, insolvency, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

(b) Non-Contravention . The execution and delivery of this Agreement by the Company does not, and performance of this Agreement by the Company will not: (i) conflict with or violate the Company Charter Documents or any Subsidiary Charter Documents, (ii) subject to obtaining the adoption of this Agreement by the Company’s stockholders as contemplated in Section 5.2 and compliance with the requirements set forth in Section 2.3(c), conflict with or violate any material 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 is bound or affected, or (iii) except as set forth in Section 2.3(b) of the Company Disclosure Letter, 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 require consent under or result in the creation of a Lien on any of the material properties or assets of the Company or any of its Subsidiaries pursuant to, any Company Material Contract, other than, with respect to (ii) and (iii), any such breach, default, impairment, termination, amendment, acceleration or cancellation that would not reasonably be expected to have a Material Adverse Effect on the Company.

(c) Necessary Consents . No consent, approval, order or authorization of, or registration, declaration or filing with any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision, court, arbitral entity, administrative agency or commission or other governmental authority or instrumentality, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (each, a “ Governmental Entity ”) is required to be obtained or made by the Company in connection with the execution, performance and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for: (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company and its Subsidiaries and/or Parent are qualified to do business, (ii) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal, foreign and state securities (or related) laws and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) or any foreign laws regulating competition, antitrust, investment or exchange controls, (iii) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state securities or “blue sky” laws and the securities laws of any foreign country, (iv) the filing with the Securities and Exchange Commission (the “ SEC ”) of the Proxy Statement (as defined in Section 5.1) and such reports under the Securities and Exchange Act of 1934, as amended (together with the rules and regulations thereunder, the “ Exchange Act ”), as may be required in connection with this Agreement, the Merger and the other

transactions contemplated hereby, and (v) any consents, approvals, orders, authorizations, registration, declaration or filing as may be required by the rules and regulations of The New York Stock Exchange, Inc. The consents, approvals, orders, authorizations, registrations, declarations and filings set forth in (i) and (ii) are referred to collectively herein as the “ Necessary Consents .”

2.4 SEC Filings; Financial Statements .

(a) SEC Filings . The Company has timely filed all required registration statements, prospectuses, reports, schedules, forms, statements and other documents (including exhibits and all other 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), as amended, are referred to herein as the “ Company SEC Reports .” Except as set forth on Section 2.4(a) of the Company Disclosure Letter, as of their respective dates, the Company SEC Reports (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “ Securities Act ”), or the Exchange Act, as the case may be, applicable to such Company SEC Reports and (ii) did not at the time they were filed and became effective, or, in the case of proxy statements, on the mailing date, 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, except to the extent corrected prior to the date hereof by a subsequently filed Company SEC Report. None of the Company’s Subsidiaries is required to file any forms, reports or other documents with the SEC.

(b) 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 ”): (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 forms under the Exchange Act), and (iii) fairly 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 Company’s operations, cash flows and changes in stockholders equity for the periods indicated. The balance sheet of the Company contained in the Company SEC Reports as of September 30, 2005 is hereinafter referred to as the “ Company Balance Sheet .”

(c) Internal Control Over Financial Reporting . In all material respects, the Company is in compliance with and has complied with (since the effective date applicable to the Company) the applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated under such Act. The Company’s

principal executive officer and its principal financial officer have (x) established and maintained a system of internal control over financial reporting (as defined in Rules 13a-15(f) and Rule 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting (as defined in rules 13a-15(f) and Rule 15d-15(f) of the Exchange Act) and sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and the rules and regulations under the Exchange Act, and (y) disclosed to the Company’s auditors and the audit committee of the Board of Directors of the Company (i) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15(d)-15(e) under the Exchange Act). To the Company’s Knowledge, such disclosure controls and procedures are designed under the supervision of the Company’s principal executive officer and its principal financial officer to ensure that material information relating to the Company and its Subsidiaries required to be included in the Company’s periodic reports under the Exchange Act is made known to the Company’s principal executive officer and its principal financial officer by others within the Company or any of its Subsidiaries.

2.5 No Undisclosed Liabilities . Except (a) as set forth on Section 2.5 of the Company Disclosure Letter, (b) as reflected or reserved against in the Company’s consolidated balance sheets (or the notes thereto) included in the Company SEC Reports, and (c) liabilities and obligations arising in the ordinary course of business after September 30, 2005 or incurred pursuant to this Agreement, neither the Company, nor any Subsidiary of the Company, has any liabilities or obligations of any nature, whether or not reported, contingent or otherwise of a type that would be required to be reflected in the Company’s consolidated balance sheet prepared in accordance with GAAP and the Company’s past practice to the extent in accordance with GAAP (including any such liability that would be required to be disclosed in the notes thereto) and that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the SEC) or any transactions involving unconsolidated affiliates of the Company.

2.6 Absence of Certain Changes or Events . Since the date of the Company Balance Sheet (a) there has not been any Material Adverse Effect on the Company, (b) and through the date hereof, the Company and its Subsidiaries have conducted in all material respects their respective businesses only in the ordinary course of business, except for the negotiation and execution of this Agreement and (c) through the date hereof, there has not been: (i) 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 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 options, warrants, calls or rights to acquire any such shares or other securities, (ii) any split, combination or reclassification of any of the Company’s or any of its Subsidiaries’ capital stock, or (iii) any action by the Company or its Subsidiaries which would, if taken after the date hereof but prior to the Closing Date, require the consent of Parent pursuant to Section 4.1(b) hereof.

2.7 Taxes . Except as set forth on Section 2.7 of the Company Disclosure Letter:

(a) For the purposes of this Agreement, the term “ Tax ” or, collectively, “ Taxes ,” shall mean 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 imposed by any Governmental Entity, together with all interest, penalties and additions imposed with respect to such amounts, and any obligations with respect to such amounts arising as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or under any agreements or arrangements with any other Person and including any liability for taxes of a predecessor entity. The Company and each of its Subsidiaries have filed all material federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (“ Tax Returns ”) required to be filed by any of them and all such Tax Returns are true and correct in all material respects. The Company and each of its Subsidiaries have timely paid, or have adequately reserved (in accordance with GAAP) for the payment of, all material Taxes required to be paid (whether or not shown on any Tax Returns), and the most recent financial statements contained in the Company SEC Reports reflect an adequate reserve (in accordance with GAAP) for all material Taxes payable by the Company and its Subsidiaries through the date of such financial statements.

(b) The Company and its Subsidiaries have each withheld (or will withhold) from their respective employees, independent contractors, creditors, stockholders and third parties and timely paid to the appropriate Tax authority proper and accurate amounts in all material respects for all periods ending on or before the Closing Date in compliance with all Tax withholding and remitting provisions of applicable laws.

(c) No deficiency for any material amount of Tax has been asserted or assessed by any Governmental Entity in writing against the Company or any Subsidiary (or, to the Knowledge of the Company, has been threatened or proposed), except for deficiencies which have been satisfied by payment, settled or been withdrawn or which are being contested in good faith and are Taxes for which the Company or the appropriate Subsidiary has set aside adequate reserves in accordance with GAAP. There are no liens for a material amount of any Taxes, other than liens for current Taxes and assessments not yet past due or which are being contested in good faith and for which the Company or the appropriate Subsidiary has set aside adequate reserves in accordance with GAAP, on the assets of the Company or any Subsidiary.

(d) (i) There are no pending or, to the Knowledge of the Company, threatened audits, examinations, investigations or other proceedings in respect of a material amount of Taxes of the Company or any Subsidiary with respect to which the Company or a Subsidiary has been notified in writing and (ii) neither the Company nor

any Subsidiary has waived any statute of limitations in respect of a material amount of Taxes or agreed to any extension of time with respect to an assessment or deficiency for a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course).

(e) Neither the Company nor any Subsidiary is a party to any indemnification, allocation or sharing agreement with respect to Taxes that could give rise to a material payment or indemnification obligation (other than agreements among the Company and its Subsidiaries and other than customary Tax indemnifications contained in credit or other commercial lending agreements).

(f) Neither the Company nor any of its Subsidiaries is required to make any disclosure to the Internal Revenue Service with respect to a “listed transaction” pursuant to Section 1.6011-4(b)(2) of the Treasury Regulations promulgated under the Code.

(g) Neither the Company nor any Subsidiary (i) has been a member of an affiliated group filing a consolidated federal income tax return (other than a group the common parent of which was the Company) or (ii) has any liability for the Taxes of any Person (other than the Company or any Subsidiary) under Treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee, successor, by contract or otherwise.

(h) Neither the Company nor any Subsidiary has distributed the stock of another company in a transaction that was purported or intended to be governed by section 355 or section 361 of the Code.

2.8 Intellectual Property .

(a) No Infringement . Except as set forth on Section 2.8(a) of the Company Disclosure Letter, the products, services and operations of the Company do not infringe or misappropriate the Intellectual Property (as defined below) of any third party where such infringement or misappropriation would reasonably be expected to have a Material Adverse Effect on the Company. “ Intellectual Property ” shall mean any or all of the following and all rights in, arising out of, or associated therewith: (i) all United States, international and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof, (ii) all patentable inventions, invention disclosures, improvements, trade secrets, proprietary information and know how, (iii) all copyrights, copyrights registrations and applications therefor, (iv) all industrial designs and any registrations and applications therefor throughout the world, (v) all mask works and any registrations and applications therefor throughout the world, and (vi) all trade names, logos, URLs, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world. “ Company Intellectual Property ” shall mean all Intellectual Property owned by the Company and/or exclusively licensed to the Company.

(b) No Impairment . Except as set forth on Section 2.8(b) of the Company Disclosure Letter, the Merger (including the assignment by operation of law of any Contract to the Surviving Corporation) will not result in: (i) Parent or any Subsidiary of Parent (other than the Company and its Subsidiaries, but only to the extent existing prior to the Merger) being bound by any material non-compete or other material restriction on the operation of any business of Parent or its Subsidiaries, (ii) Parent or any Subsidiary of Parent (other than the Company and its Subsidiaries, but only to the extent existing prior to the Merger) granting any rights or licenses to any material Intellectual Property of Parent or any Subsidiary of Parent to any third party (including a covenant not to sue with respect to any material Intellectual Property of Parent or any Subsidiary of Parent), (iii) the termination or breach of any Contract by which the Company holds a license to Intellectual Property of, or licenses Intellectual Property to, a third party, which termination or breach would reasonably be expected to have a Material Adverse Effect on either the Surviving Corporation or Parent, or (iv) the termination or forfeiture of any Company Intellectual Property, which termination or forfeiture would reasonably be expected to have a Material Adverse Effect on the Company.

(c) Schedule . Section 2.8(c) of the Company Disclosure Letter sets forth, as of the date hereof, a list of all material, registered Company Intellectual Property and all applications therefor. All registered Company Intellectual Property listed in Section 2.8(c) of the Company Disclosure Letter is valid and enforceable, except for those items designated in such Section as “Abandoned,” “Cancelled,” or “Sold,” none of which is material to the business of the Company and its Subsidiaries as currently conducted.

(d) Ownership and Maintenance . Except as set forth on Section 2.8(d) of the Company Disclosure Letter, the Company owns, or possesses licenses or other valid rights to use, all Intellectual Property which is required or necessary to the conduct of the business of the Company, except where the lack thereof would not reasonably be expected to have a Material Adverse Effect on the Company. To the Knowledge of the Company, except as set forth on Section 2.8(d) of the Company Disclosure Letter, no Person is infringing upon or violating any Company Intellectual Property, except where any such infringement would not reasonably be expected to have a Material Adverse Effect on the Company. The Company has taken reasonable steps to maintain the confidentiality of its trade secrets.

(e) Privacy . The Company does not use or collect any of the information it collects from its web site visitors or other parties in an unlawful manner, or in a manner that violates the Company’s privacy policy or the privacy rights of its customers. The Merger will not violate the Company’s privacy policy or the privacy rights of its customers.

2.9 Compliance; Permits .

(a) Compliance . Since January 1, 2003, except as set forth on Section 2.9(a) of the Company Disclosure Letter, the Company and each of its Subsidiaries has complied with and is currently in compliance with, each Legal Requirement applicable to it (except for non-compliance that would not reasonably be expected to have a Material Adverse Effect on the Company, either individually or in the aggregate with all other non-compliance). Except as set forth on Section 2.9(a) of the Company Disclosure

Letter, neither the Company nor any of its Subsidiaries has received any written notice that such entity is in violation of any Legal Requirement applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective businesses or properties is bound, except, in each case, for uncured violations that would not reasonably be expected to have a Material Adverse Effect on the Company, individually or in the aggregate. Except as set forth on Section 2.9(a) of the Company Disclosure Letter, no material investigation or review by any Governmental Entity is pending or, to the Knowledge of the Company, has been threatened in a writing delivered to the Company or any of its Subsidiaries, against the Company or any of its Subsidiaries. There is no judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries which has or would reasonably be expected to have a Material Adverse Effect on the Company.

(b) Permits . Except as set forth on Section 2.9(b) of the Company Disclosure Letter, the Company and its Subsidiaries hold, to the extent legally required, all permits, licenses, authorizations, franchises, variances, exemptions, orders and approvals from Governmental Entities (“ Permits ”) that are required for the operation of the business of the Company and its Subsidiaries, as currently conducted, the failure to hold which would reasonably be expected to have a Material Adverse Effect on the Company, other than environmental Permits , the sole representations and warranties as to such environmental Permits are stated in Section 2.13(c) of this Agreement (collectively, “ Company Permits ”). As of the date hereof, no suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened. The Company and its Subsidiaries have received no written notice that such entity is not in compliance in all material respects with the terms of the applicable Company Permits.

2.10 Litigation . Except as set forth on Section 2.10 of the Company Disclosure Letter, there are no claims, suits, actions, investigations, arbitrations or proceedings pending or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries or any of their properties, except as would not reasonably be expected to have a Material Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries is subject to any judgment, decree, injunction, rule or order of any Governmental Entity that has had or would reasonably be expected to have a Material Adverse Effect on the Company. Section 2.10 of the Company Disclosure Letter sets forth a list of all Legal Proceedings to which the Company or any of its Subsidiaries is subject, involving monetary claims against the Company or any of its Subsidiaries for more than $50,000 individually, and any requests for injunctive relief.

2.11 Brokers’ and Finders’ Fees . Except for fees payable to J.P. Morgan Securities Inc. and Houlihan Lokey Howard & Zukin, the Company 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 this Agreement or any transaction contemplated hereby. The Company has on or prior to the date hereof provided to Seller true and correct copies of the engagement letters and all other agreements in effect as of the date hereof by and between the Company and each of J.P. Morgan Securities, Inc. and Houlihan Lokey Howard & Zukin or their respective affiliates. Except for (i) such fees payable to J.P. Morgan Securities Inc. and Houlihan Lokey Howard & Zukin pursuant to the agreements described in the preceding sentence, (ii) fees payable to the Company’s legal advisors and (iii) other incidental out-of-pocket expenses incurred in connection with the negotiation and execution of this Agreement, the preparation and mailing of the Proxy Statement and the transactions contemplated hereby, the Company has no obligation to any third party advisors with respect to any material out-of-pocket fees and expenses in connection with the transactions contemplated hereby.

2.12 Employee Benefit Plans .

(a) Except as set forth on Section 2.12(a) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries maintains, contributes to, is required to contribute to, is a party to, or otherwise has or may in the future have any liability (contingent or otherwise) with respect to (1) any “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), (2) any “employee pension benefit plan,” as defined in Section 3(2) of ERISA, (3) any plan or agreement providing for stock options, stock appreciation rights or other forms of equity-based compensation, (4) any other plan or agreement involving direct or indirect compensation other than workers’ compensation, unemployment compensation and other government programs, under which the Company or any of its Subsidiaries has or is reasonably expected to have any present or future material liability (directly or indirectly), or (5) any employment, severance or other similar contract, arrangement or policy providing for insurance coverage, non-statutory workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, other forms of incentive compensation or post-retirement insurance, compensation or benefits, under which the Company or any of its Subsidiaries has or is reasonably expected to have any present or future material liability (directly or indirectly). Each plan or agreement required to be set forth on Section 2.12(a) of the Company Disclosure Letter pursuant to the foregoing is referred to herein as a “ Company Plan .” Except as set forth on Section 2.12(a) of the Company Disclosure Letter, neither the Company nor any Subsidiary has any plan or commitment to establish any new material Company Plan or to materially modify any Company Plan.

(b) The Company has delivered or made available to Parent the following documents with respect to each Company Plan: (1) correct and complete copies of all documents embodying such Company Plan, including (without limitation) all amendments thereto, and all related trust documents, (2) a written description of any Company Plan that is not set forth in a written document, (3) the most recent summary plan description together with the summary or summaries of material modifications thereto, if any, (4) the most recent Internal Revenue Service (“ IRS ”) determination letter, if any, (5) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, (6) all material written agreements and contracts currently in effect, including (without limitation) administrative service agreements, group annuity contracts, and group insurance contracts, if any, and (7) the most recently prepared financial statement in connection with each such Company Plan.

(c) Each Company Plan has been maintained and administered in material compliance with its terms and in material compliance with the requirements prescribed by any and all statutes, orders, rules and regulations (foreign and domestic), including

(without limitation) ERISA and the Code, in each case which are applicable to such Company Plan. All material contributions, reserves or premium payments required to be made or accrued through the date hereof to the Company Plans have been timely made or accrued. Except as set forth in Section 2.12(c) of the Company Disclosure Letter, no Company Plan provides post-termination welfare benefits, and neither the Company nor any Subsidiary has any obligation to provide any post-termination welfare benefits other than (i) health care continuation as required by Part 6 of Title I of ERISA or Section 4980B of the Code or any similar statute, (ii) retirement or death benefits under any plan intended to be qualified under Section 401(a) of the Code or (iii) disability benefits that only cover claims incurred prior to a participant’s termination of employment and have been fully provided for by insurance under a Company Plan that constitutes an “employee welfare benefit plan” within the meaning of Section (3)(1) of ERISA.

(d) Except as set forth on Section 2.12(d) of the Company Disclosure Letter, none of the Company or any Subsidiary or any other Person or entity that, together with the Company or any Subsidiary, is or was treated as a single employer under Section 414(b), (c), (m) or (o) of the Code (each an “ ERISA Affiliate ”), has now or at any time within the past five years (and in the case of any such other Person or entity, only during the period within the past five years that such other Person or entity was an ERISA Affiliate) contributed to, sponsored, or maintained (i) a pension plan (within the meaning of Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of ERISA; (ii) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA); or (iii) a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which the Company or any Subsidiary or any ERISA Affiliate would reasonably be expected to incur liability under Section 4063 or 4064 of ERISA.

(e) Neither the Company nor any of its Subsidiaries is subject to any material liability or penalty under Sections 4975 through 4980B of the Code or Title I of ERISA. The Company and its Subsidiaries have complied in all material respects with the applicable health care continuation requirements in Section 4980B of the Code and in ERISA. No material “Prohibited Transaction,” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Company Plan.

(f) Except as set forth on Section 2.12(f)(i) of the Company Disclosure Letter, no Company Plan exists that would reasonably be expected to result in the payment to any present or former employee, director or consultant of the Company or any Subsidiary of any money or other property or accelerate or provide any other rights or benefits, including any loan forgiveness, to any current or former employee, director or consultant of the Company or any Subsidiary as a result of the consummation of the Merger or any other transaction contemplated by this Agreement (whether alone or in connection with any other event). Except as set forth on Section 2.12(f)(ii) of the Company Disclosure Letter, no payment or other benefit that has been or may be made to any current or former employee or independent contractor of the Company or any Subsidiary under any contract, plan or arrangement with the Company or any Subsidiary would reasonably be expected to be characterized as an “excess parachute payment,” as such term is defined in Section 280G of Code.

(g) No action, suit or claim (excluding claims for benefits incurred in the ordinary course) has been brought or is pending or, to the Knowledge of the Company, threatened against or with respect to any Company Plan, or the assets or any fiduciary thereof (in that Person’s capacity as a fiduciary of such Company Plan). There are no audits, inquiries or proceedings pending or, to the Knowledge of the Company, threatened by the IRS, the Department of Labor or any other Governmental Entity with respect to any Company Plan.

(h) Section 2.12(h) of the Company Disclosure Letter sets forth each Company Plan that primarily covers employees who reside outside of the United States (each an “ International Plan ”). With respect to each International Plan: (i) the fair market value of the assets of each funded International Plan, the liability of each insurer for any International Plan funded through insurance or the book reserve established for any International Plan, together with any accrued contributions, is sufficient, in all material respects, to procure or provide for the accrued benefit obligations, as of the date of this Agreement, with respect to all current and former participants in such plan according to the actuarial assumptions and valuations most recently used and consistent with applicable law to determine employer contributions to such International Plan and no transaction contemplated by this Agreement shall cause such assets, reserve or insurance obligations to be less than such benefit obligations; (ii) each International Plan required to be registered has been registered and has been maintained, in all material respects, in good standing with applicable regulatory authorities; and (iii) no International Plan is a registered pension plan for purposes of applicable Canadian law.

2.13 Environmental Matters .

(a) Hazardous Material . Except as set forth on Section 2.13(a) of the Company Disclosure Letter, no underground storage tanks and no substance that has been designated by any Governmental Entity or by applicable Environmental Law to be radioactive, toxic, hazardous or otherwise a danger to health or the environment, including PCBs, asbestos, airborne mold, petroleum, urea-formaldehyde and all substances listed as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to the United States Resource Conservation and Recovery Act of 1976, as amended, and the regulations promulgated pursuant to said laws, but excluding office and janitorial supplies (a “ Hazardous Material ”), are present (a) in a manner which would reasonably be expected to result in material liability pursuant to any applicable Environmental Law in, on or under any property currently owned, operated, occupied or leased by the Company or any of its Subsidiaries as a result of the actions of the Company or any of its Subsidiaries or any affiliate of the Company, or, to the Knowledge of the Company, as a result of any actions of any third party; or (b) except as would not reasonably be expected to result in a Material Adverse Effect on the Company, in, on or under any property previously owned, operated, occupied or leased by the Company or any of its Subsidiaries as a result of the actions of the Company or any of its Subsidiaries or any affiliate of the Company, or, to the Knowledge of the Company, with respect to the period of the Company’s or Subsidiary’s ownership, operation, occupancy or lease of such property, as applicable, as a result of any actions of any third party.

(b) Hazardous Materials Activities . Except as set forth on Section 2.13(b) of the Company Disclosure Letter: (i) neither the Company nor any of its Subsidiaries has transported, stored, used, manufactured, disposed of, released or exposed its employees or others to Hazardous Materials in a manner which would reasonably be expected to result in material liability pursuant to any applicable Environmental Law in effect on or before the Closing Date; (ii) neither the Company nor any of its Subsidiaries has disposed of, transported, sold, used, released, exposed its employees or others to or manufactured any product containing a Hazardous Material (collectively, “ Hazardous Materials Activities ”) in a manner which would reasonably be expected to result in material liability pursuant to any Environmental Law; (iii) neither the Company nor any of its Subsidiaries has received any written request for information, has been notified in writing, or otherwise has any Knowledge, that it may be a “potentially responsible party”, related to any property on the Superfund National Priorities List, or any state equivalent list, and which has not been fully resolved or settled with no material obligations outstanding, or for which the Company or any of its Subsidiaries is not a de minimis party; (iv) neither the Company nor any Subsidiary has entered into a Contract to assume, guarantee or indemnify a third party for a specific Environmental Claim except, for Environmental Claims that would not reasonably be expected to result in a Material Adverse Effect; and (v) neither the Company nor any Subsidiary has any responsibility or liability under applicable Environmental Laws for any cleanup or remediation related to any Hazardous Materials which would reasonably be expected to result in a Material Adverse Effect on the Company.

(c) Environmental Permits . Except as set forth on Section 2.13(c) of the Company Disclosure Letter, each of the Company and its Subsidiaries has obtained, maintained and complied in all material respects with all material Permits necessary under any applicable Environmental Law for them to own, lease or operate their respective assets as currently held and to carry on their respective businesses as presently conducted, and such Permits are in full force and effect and not subject to appeal. As of the date hereof, no suspension or cancellation of any of the material environmental Permits is pending or, to the Knowledge of the Company, threatened. The Company and its Subsidiaries have received no written notice that such entity is not in compliance in all material respects with the terms of the applicable material environmental Permits.

(d) Environmental Claims . There are no Environmental Claims pending or, to the Knowledge of the Company, threatened in writing against the Company or any Subsidiary.

(e) Environmental Law . Except as set forth on Section 2.13(e) of the Company Disclosure Letter, and except as would not reasonably be expected to result in a Material Adverse Effect on the Company, the respective businesses of each of the Company and its Subsidiaries are, and have been, since January 1, 2003, conducted in compliance with applicable Environmental Laws.

(f) As used in this Agreement:

“ Environmental Claim ” means any and all administrative, regulatory or judicial claims, litigation, suits, proceedings, complaints, investigations or other actions, judgments, orders, summons, citations, written demands, written directives, Liens or written notices of noncompliance or violation, in any such case, by or from any person alleging liability of whatever kind or nature (including liability or responsibility for the costs of investigations, remediation or governmental response, natural resources damages, property damages, personal injuries, penalties, contribution, indemnification or injunctive relief) arising out of, base

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