TABLE OF CONTENTS

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AGREEMENT AND PLAN OF MERGER				1
RECITALS				1
ARTICLE I DEFINITIONS				2
1.1.		Certain Definitions		2
1.2.		List of Additional Defined Terms		6
ARTICLE II THE MERGER				10
2.1.		The Merger		10
2.2.		Effective Time of the Merger		10
2.3.		Closing; Closing Deliveries		10
2.4.		Certificate of Incorporation and Bylaws		13
2.5.		Directors and Officers		13
2.6.		Effect on Capital Stock		13
2.7.		Adjustments to Purchase Price		15
2.8.		Exchange of Certificates; Payment		17
2.9.		Escrow		20
2.10.		Dissenting Shares		21
2.11.		Effect on Options, Warrants and Convertible Notes		22
2.12.		Lost, Stolen or Destroyed Share Certificates		22
2.13.		Further Action		22
2.14.		Stockholder Support Agreement		23
2.15.		Waiver of Right of First Refusal		23
2.16.		Agreements Regarding Sale Bonuses		23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY				23
3.1.		Organization		23
3.2.		Capitalization		24
3.3.		Authority; No Conflict; Necessary Consents		25
3.4.		Financial Statements		26
3.5.		Absence of Certain Changes or Events		27
3.6.		Taxes		29
3.7.		Title to Properties		31
3.8.		Intellectual Property		32
3.9.		Restrictions on Business Activities		36
3.10.		Governmental Authorizations		36
3.11.		Litigation		37
3.12.		Compliance with Laws		37

 

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3.13.		Environmental Matters		37
3.14.		Brokers’ and Finders’ Fees		37
3.15.		Related Party Transactions		38
3.16.		Employee Benefit Plans and Compensation		38
3.17.		Contracts		41
3.18.		Insurance		42
3.19.		Accounts Receivable		42
3.20.		Warranties; Products Liability		42
3.21.		Customers		43
3.22.		Suppliers		43
3.23.		Employee Complaints		43
3.24.		Export Control Laws		44
3.25.		Foreign Corrupt Practices Act		44
3.26.		Powers of Attorney		44
3.27.		Change of Control; Severance; Bonus Payments		44
3.28.		Financial Projections		45
3.29.		Books and Records		45
3.30.		Disclosures		45
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT, BV SUB AND MERGER SUB				45
4.1.		Organization; Good Standing; Capitalization of Merger Sub		45
4.2.		Authority; No Conflict; Necessary Consents		46
4.3.		Availability of Funds		47
4.4.		Litigation		47
4.5.		Brokers’ and Finders’ Fees		47
4.6.		Parent’s, BV Sub’s and Merger Sub’s Acknowledgement Regarding Forward-Looking Statements		47
4.7		Information Supplied		47
ARTICLE V CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME				48
5.1.		Conduct of Business by the Company Prior to Closing		48
5.2.		Control of Business		51
ARTICLE VI ADDITIONAL AGREEMENTS				52
6.1.		No Solicitation		52
6.2.		Confidentiality; Access to Information; No Modification of Representations, Warranties or Covenants		52
6.3.		Public Disclosure		53
6.4.		Regulatory Filings		53
6.5.		State Anti-Takeover Law		53
6.6.		Third-Party Consents		54
6.7.		Stockholder Support Agreements		54
6.8.		Notification of Certain Matters		54
6.9.		Options, Warrants and Convertible Notes		55

 

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6.10.		Indemnification		56
6.11.		Indebtedness; Releases		57
6.12.		Sale Bonus Holdback Agreement		57
6.13.		Resignations		57
6.14.		Tax Matters		57
6.15.		Stay Bonus Payments		59
6.16.		FIRPTA Compliance		59
6.17.		Employee Service Credit		59
6.18.		Information Statement		60
6.19		Additional Actions; Further Assurances		60
ARTICLE VII CONDITIONS TO THE MERGER				61
7.1.		Conditions to the Obligations of Each Party to Effect the Merger		61
7.2.		Additional Conditions to the Obligations of Parent, BV Sub and Merger Sub		61
7.3.		Additional Conditions to the Obligations of the Company		63
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER				64
8.1.		Termination		64
8.2.		Notice of Termination; Effect of Termination		66
8.3.		Amendment		66
8.4.		Extension; Waiver		67
ARTICLE IX INDEMNIFICATION				67
9.1.		Survival of Representations and Warranties		67
9.2.		Indemnification by the Participating Stockholders		67
9.3.		Limitation on Indemnification Obligations of the Participating Stockholders		69
9.4.		Indemnification by Parent		70
9.5.		Limitation on Indemnification Obligations of Parent		71
9.6.		Indemnification Procedures — Non-Third Party Claims		72
9.7.		Indemnification Procedures — Third Party Claims		72
9.8.		Tax Matters Indemnification		73
9.9.		No Contribution		74
9.10.		Effect of Investigation		74
9.11.		Subrogation		74
9.12.		Exclusive Remedies		74
9.13.		No Double Recovery		75
9.14.		Mitigation		75
ARTICLE X GENERAL PROVISIONS				75
10.1.		No Other Representations and Warranties		75
10.2.		Notices		75
10.3.		Interpretation		77
10.4.		Counterparts		77
10.5.		Attorneys’ Fees		77
10.6.		Entire Agreement; Third-Party Beneficiaries		77

 

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10.7.		Severability		77
10.8.		Other Remedies; Specific Performance		78
10.9.		Expenses		78
10.10.		Rules of Construction		78
10.11.		Assignment		78
10.12.		Time		78
10.13.		Governing Law; Jurisdiction		78
10.14.		Waiver of Jury Trial		79
ARTICLE XI THE REPRESENTATIVE				79
11.1.		Authorization		79
11.2.		Reliance		80
11.3.		Compensation; Exculpation; Indemnity		80

 

Exhibits and Schedules

Exhibit A	Form of Stockholder Support Agreement
Exhibit A-1	Form of Convertible Securities Agreement
Exhibit B	Form of Indemnity Escrow Agreement
Exhibit C	Preliminary Merger Consideration Allocation Schedule
Exhibit C-1	Form of Final Merger Consideration Allocation Schedule
Exhibit D	Form of Sale Bonus Holdback Agreement
Exhibit E	Form of Legal Opinion
Exhibit F	Form of Non-Competition and Non-Solicitation Agreements
Exhibit G	Key Employees
Exhibit H	Financial Statements Certificate
Exhibit J	Board Releases

 

Schedule I	Stockholders Delivering Consents
Schedule 2.3(b)(vi)	Sale Bonus Payments
Schedule 2.3(b)(vii)	Employee Bonuses
Schedule 2.3(c)(iii)	Closing Payoffs
Schedule 6.17	Service Credit

 

Company Disclosure Letter

Parent Disclosure Letter

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of December 5, 2006, by and among NAVTEQ Corporation, a Delaware corporation (“ Parent ”), NAVTEQ Holdings B.V., a corporation organized under the laws of The Netherlands and a wholly-owned subsidiary of Parent (“ BV Sub ”), NAVTEQ Holdings Delaware II, Inc., a Delaware corporation and a wholly-owned subsidiary of BV Sub (“ Merger Sub ”), The Map Network Inc., a Delaware corporation (the “ Company ”), and for the purposes described herein, Gannett Satellite Information Network, Inc., as the representative of the Participating Stockholders (the “ Representative ”).  All capitalized terms used in this Agreement shall have the respective meanings ascribed thereto in Article I.

RECITALS

WHEREAS , the Boards of Directors of Parent, BV Sub, Merger Sub and the Company deem it advisable and in the best interest of their respective stockholders to consummate the transactions contemplated by this Agreement on the terms and subject to the conditions provided for herein;

WHEREAS , the Boards of Directors of Parent, Merger Sub and the Company and the shareholder and managing director of BV Sub have approved, in accordance with applicable provisions of Applicable Law, this Agreement and the transactions contemplated hereby, including the acquisition of the Company by BV Sub through the Merger, and the Board of Directors of the Company has resolved to submit this Agreement and the Merger to the stockholders of the Company for their approval and to recommend that the stockholders approve and adopt this Agreement and approve the Merger;

WHEREAS , it is proposed that the acquisition of the Company by BV Sub be accomplished by the merger of the Merger Sub with and into the Company, with the Company being the Surviving Corporation, in accordance with the applicable provisions of Delaware Law, and each share of the capital stock and all other outstanding securities of the Company will thereupon be cancelled and converted into the right to receive the consideration as set forth herein, all upon the terms and subject to the conditions set forth herein;

WHEREAS , immediately following the execution and delivery of this Agreement by the Company pursuant to the resolutions of the Board of Directors of the Company (i) the stockholders of the Company identified on Schedule I hereto, representing, in the aggregate, not less than seventy percent (70%) of the issued and outstanding shares of the Company Common Stock, Company Series A Preferred and Company Series B Preferred Stock, voting together as a single class and on an as if converted to Common Stock basis and (ii) Gannett Satellite Information Network, Inc., as the sole holder of the Company Series B Preferred Stock as of the date hereof (each, a “ Consenting Stockholder ” and collectively, the “ Consenting Stockholders ”), will have executed and delivered to the Company, Parent, BV Sub and Merger Sub the Stockholder Support Agreement, in the form attached hereto as Exhibit A , and will have delivered to the Company their written consents pursuant to Section 228 of the DGCL, which consents adopt and approve this Agreement and approve the Merger in accordance with Delaware Law and the Company Charter Documents; and

 

WHEREAS , Parent, BV Sub, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

NOW, THEREFORE , in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending to be legally bound hereby, Parent, BV Sub, Merger Sub and the Company hereby agree as follows:

ARTICLE I
DEFINITIONS

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

“Acquisition Proposal” shall mean any offer, proposal or any third party indication of interest or intent relating to any transaction or series of related transactions involving a merger, consolidation, share exchange, business combination, sale of a majority or all assets, sale of shares of capital stock of the Company or similar transaction or any combination of the foregoing involving the Company (other than the transactions contemplated by this Agreement and the issuance of shares of capital stock upon the exercise of Company Options, Company Warrants or Company Convertible Notes outstanding on the date of this Agreement).

“Affiliate” shall mean, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Applicable Law” shall mean any and all applicable federal, state, local, municipal, foreign or other law, statute, treaty, constitution, principle of common law, resolution, ordinance, code, edict, decree, directive, published guidance, order, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

“Business Day” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of Delaware.

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

“Company Common Stock ” shall mean the class of common stock, par value $0.01 per share, of the Company.

“Company Convertible Notes” shall mean any outstanding notes issued by the Company that are convertible into shares of Series B Preferred Stock upon the consummation of the Merger.

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“Company Material Adverse Effect” any change, circumstance, development, effect, event, fact or occurrence that, individually, or when taken together with all such other changes, circumstances, developments, effects, events, facts or occurrences that exist or have occurred prior to the date of determination of the Company Material Adverse Effect, has caused, resulted in or had, or is reasonably likely to cause, result in or have, a material and adverse effect on the business, condition (financial or otherwise), assets (whether real, personal or mixed, tangible or intangible), properties, or results of operations of the Company; provided, however, that, in no event shall the following be deemed to constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred:  any change, circumstance, development, effect, event, fact or occurrence primarily resulting (i) from changes affecting the United States or world economy generally, which changes do not affect the Company in a materially disproportionate manner, (ii) from changes affecting the industry in which the Company operates generally, which changes do not affect the Company in a materially disproportionate manner, (iii) from changes due to acts of war or terrorism, which changes do not affect the Company in a materially disproportionate manner, or (iv) from changes resulting primarily from the announcement or consummation of the transactions contemplated hereby.

“Company Options” shall mean any outstanding options to purchase shares of Company Common Stock under any of the Company Stock Option Plans or otherwise.

“Company Preferred Stock” shall mean the shares of preferred stock, par value $0.01 per shares, which have been designated as Series A Preferred Stock and the Series B Preferred Stock in the Company Charter Documents.

“Company Warrants” shall mean any outstanding warrants to purchase shares of Company Common Stock, Series A Preferred Stock or Series B Preferred Stock.

“Contract” shall mean any contract, subcontract, agreement, commitment, note, bond, mortgage, indenture, lease, license, sublicense, permit, franchise or other instrument, obligation or binding arrangement or understanding of any kind or character, whether oral or in writing.

“Convertible Securities Agreement” shall mean the form of agreement attached as Exhibit A-1 to be executed and delivered by each holder of outstanding Company Options, Company Warrants and Company Convertible Notes at or prior to Closing.

“Delaware Law” shall mean the DGCL and any other applicable law of the State of Delaware.

“DGCL” shall mean the General Corporation Law of the State of Delaware, or any successor statute thereto.

“Employees” shall mean all employees of the Company.

“Environmental Law” means any and all Applicable Law relating to occupational safety and health, the environment, or emissions, discharges or releases of Hazardous Substances into the environment, including ambient air, surface water, groundwater or land, or otherwise relating to the handling of Hazardous Substances or the investigation, clean-up or other remediation thereof.

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“Environmental Matters” means any liability or obligation arising under Environmental Law, whether arising under theories of contract, tort, negligence, successor or enterprise liability, strict liability or other legal or equitable theory, including (i) any failure to comply with an applicable Environmental Law or Permit and (ii) any liability or obligation arising from the manufacture, processing, distribution, treatment, storage, disposal, transport, presence of, release or threatened release of, or exposure of persons or property to, Hazardous Substances.

“Escrow Agent” means the Person engaged by Parent and BV Sub with the consent of the Company and the Representative, in such Person’s capacity as the escrow agent under the Indemnity Escrow Agreement.

“Hazardous Substance” means any “hazardous substance,” “hazardous waste,” “pollutant,” “contaminant” or “toxic substance” (as defined or regulated by any Environmental Law, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Resources Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., or the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., and regulations promulgated thereunder, or any analogous state and local laws and regulations), petroleum and petroleum products, polychlorinated biphenyls or asbestos.

“Indebtedness” means an amount equal to, as of the Closing Date, the then outstanding principal of, and accrued and unpaid interest on, and any premiums, prepayment fees and penalties due upon prepayment and full satisfaction of, all bank or other third party indebtedness for borrowed money of Company, including indebtedness under any bank credit agreement and any other related agreements but excluding all amounts due after the Closing Date under capital and operating leases and trade payables.

“Indemnity Escrow Account” means the account into which the Indemnity Escrow Amount is deposited by BV Sub with the Escrow Agent and held by it, subject to disbursement as provided herein and in the Indemnity Escrow Agreement.

“Indemnity Escrow Agreement” means the Indemnity Escrow Agreement among Parent, BV Sub, the Company, the Representative and the Escrow Agent, in the form attached hereto as Exhibit B or such other form as is agreed among Parent, BV Sub, the Company, the Representative and the Escrow Agent.

“Indemnity Escrow Amount” means, initially, the sum of $7,500,000, and at any time after the initial Indemnity Escrow Amount is deposited into the Indemnity Escrow Account, the term shall mean the amount of $7,500,000 plus any dividends, interest, gains or other distributions on such amount, less the amounts distributed from the Indemnity Escrow Account as provided herein and in the Indemnity Escrow Agreement.  The Managers shall contribute a proportional amount of their Sale Bonus Payments into the Indemnity Escrow Account in accordance with the Sale Bonus Holdback Agreements.

“Knowledge” shall mean with respect to the Company, with respect to any matter in question, the actual knowledge of Shane Green, Douglas Wheeler, Edin Saracevic and Tarik Kurspahic,

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and the knowledge that such individuals should have if they performed the duties applicable to their positions in a reasonably prudent manner.

“Legal Proceedings” shall mean any action, claim, suit, litigation, proceeding (public or private), criminal prosecution, audit or investigation by or before any Governmental Authority.

“Liability” or “Liabilities” shall mean all indebtedness, obligations and other liabilities, whether direct or indirect, and any loss, damage (including direct, incidental, consequential and special damages), cost, deficiency, Lien, penalty, fine, cost or expense (including any litigation expenses), or any diminution in value of any real or personal property (excluding any depreciation), or contingent liability, loss contingency, unpaid expense, claim, guaranty or endorsement (other than endorsements for deposits or collection of checks in the ordinary course of business).

“Lien” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, interference, option, right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

“NYSE” shall mean the New York Stock Exchange.

“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 Authority.

“Purchase Price” shall mean the sum of $37,500,000.00.

“SEC” shall mean the United States Securities and Exchange Commission, or any successor thereto.

“Series A Preferred Stock” shall mean the series of Company Preferred Stock, par value $0.01 per share, designated as Series A Preferred Stock in the Company Charter Documents.

“Series B Preferred Stock” shall mean the series of Company Preferred Stock, par value $0.01 per share, designated as Series B Preferred Stock in the Company Charter Documents.

“Stockholder Support Agreement” shall mean the form of agreement attached hereto as Exhibit A to be executed and delivered by the Consenting Stockholders of the Company at the time of execution of this Agreement, and any additional agreements in substantially such form executed and delivered by additional holders of shares of capital stock or other securities of the Company subsequent to the date of this Agreement and at or prior to Closing.

“Stockholders” shall mean, collectively, the holders of capital stock of the Company.

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1.2.          List of Additional Defined Terms.   The following capitalized terms shall have the respective meanings ascribed thereto in the respective sections of this Agreement set forth opposite each of the capitalized terms identified below:

 

 

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ARTICLE II
THE MERGER

2.1.          The Merger.   Upon the terms and subject to the conditions set forth in this Agreement and the applicable provisions of Delaware Law, at the Effective Time, Merger Sub shall be merged with and into the Company (the “ Merger ”), the separate corporate existence of Merger Sub shall thereupon cease and the Company shall continue as the surviving corporation of the Merger and a wholly-owned subsidiary of BV Sub.  (The Company, as the surviving corporation of the Merger, is sometimes hereinafter referred to as the “ Surviving Corporation ”).  At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of Delaware Law.  Without limiting the generality of the foregoing, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

2.2.          Effective Time of the Merger.  Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Merger Sub shall cause the Merger to be consummated under Delaware Law by filing a certificate of merger in customary form and substance (the “ Certificate of Merger ”) with the Secretary of State of the State of Delaware (the “ Delaware Secretary of State ”) in accordance with the applicable provisions of Delaware Law, with the time of such filing with the Delaware Secretary of State, or such later time as may be agreed in writing by Parent, BV Sub and the Company and specified in the Certificate of Merger, being referred to in this Agreement as the “ Effective Time ”).

2.3.           Closing; Closing Deliveries.

(a)           Closing Date .  The consummation of the Merger (the “ Closing ”) shall take place at a closing to occur at the offices of Pepper Hamilton LLP, 600 Fourteenth Street, N.W., Washington, D.C. 20005, on such date and at a time to be agreed upon by Parent, BV Sub, Merger Sub and the Company, which date shall be no later than the fifth  (5 th  ) Business Day after the satisfaction or waiver (to the extent permitted by this Agreement and Applicable Law) of the last to be satisfied or waived of the conditions set forth in Article VII other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver, to the extent permitted by this Agreement and Applicable Law, of such conditions); provided that the Closing shall occur no earlier than December 15, 2006 and provided, further that if by December 22, 2006 all conditions to Closing set forth in Article VII have not been met or waived (to the extent that any such condition may be waived under this Agreement and Applicable Law, and other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver, to the extent permitted by this Agreement and Applicable Law, of such conditions), then the Closing shall be no earlier than January 2, 2007, or at such other location, date and time as Parent, BV Sub, Merger Sub and the Company shall mutually agree upon in writing, with the date upon which the Closing shall actually occur pursuant hereto being referred to in this Agreement as the “ Closing Date .”

(b)            Closing Obligations and Deliveries — the Company .  At the Closing, the Company shall:

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(i)            deliver to Parent and BV Sub a certificate, duly executed by the Chief Executive Officer and Chief Operating Officer of the Company, dated the Closing Date and in form and substance reasonably satisfactory to Parent and BV Sub, certifying that the conditions specified in Section 7.2(a) and 7.2(b) have been fulfilled;

(ii)           deliver, or cause to be delivered to Parent and BV Sub, the Indemnity Escrow Agreement, duly executed by the Company and the Representative;

(iii)          deliver to Parent and BV Sub a certificate, duly executed by the corporate secretary of the Company, dated the Closing Date, to the effect that: (A) the Company Charter Documents attached to such certificate are true, correct and complete, and were in full force and effect in the form as attached to such certificate on the date of this Agreement and on the Closing Date, (B) each of the Consenting Stockholders is the holder of record of the shares of capital stock of the Company to which each such Consenting Stockholder’s written consent relates, (C) the number of shares and class or series of shares of capital stock of the Company to which the written consent of each Consenting Stockholder relates correctly represent the number of shares and class or series of shares of capital stock of the Company held of record by such Consenting Stockholder, (D) the Final Merger Allocation Schedule accurately represents the amounts payable to each holder of capital stock or other securities of the Company based upon the rights and privileges of the shares of capital stock or other securities held by such holder as reflected in the Company Charter Documents and other instruments or agreements defining the rights of holders of securities of the Company, and (E) the officers of the Company executing this Agreement and the other documents delivered in connection with the transactions contemplated by this Agreement to be executed and delivered by the Company are incumbent officers and the signatures on the Agreement and such documents are their genuine signatures;

(iv)          deliver, or cause to be delivered to Parent and BV Sub, Stockholder Support Agreements executed by Stockholders following the date of this Agreement, pursuant to Section 6.7 and Section 7.2(k);

(v)           deliver, or cause to be delivered to Parent and BV Sub, the Sale Bonus Holdback Agreements and the Non-Competition Agreements executed by each of Shane Green, Edin Saracevic, Doug Wheeler and Tarik Kurspahic following the date of this Agreement;

(vi)          deliver to Parent and BV Sub evidence that the amounts identified in Schedule 2.3(b)(vi) hereto payable by the Company to Shane Green, Edin Saracevic, Doug Wheeler and Tarik Kurspahic, subject to the amounts to be withheld and placed into separate escrow accounts and withheld for the payment of applicable taxes, as described on such Schedule 2.3(b)(vi) and in the Sale Bonus Holdback Agreements (the “ Sale Bonus Payments ”), have been paid and that the withheld amounts have been placed into escrow and/or withheld for the payment of applicable taxes, as applicable;

(vii)         deliver to Parent and BV Sub evidence that the amounts identified in Schedule 2.3(b)(vii) hereto payable by the Company to the persons identified therein (the “ Employee Bonuses ”), subject to the amounts to be withheld for the payment of

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applicable taxes, have been paid and that the withheld amounts have been withheld for the payment of applicable taxes;

(viii)        deliver, or cause to be delivered to Parent and BV Sub, all of the other certificates, resignations, agreements and releases and other documents and instruments set forth in Article VII.

(c)            Closing Obligations and Deliveries - Parent and BV Sub.   At the Closing, Parent and BV Sub shall:

(i)            deliver to the Company a certificate, duly executed by authorized executive officers of Parent, BV Sub and Merger Sub, dated the Closing Date and in form and substance reasonably satisfactory to the Company, certifying that the conditions specified in Section 7.3(a) and 7.3(b) have been fulfilled;

(ii)           deliver to the Company the Indemnity Escrow Agreement, duly executed by Parent and BV Sub;

(iii)          pay or cause to be paid the amounts identified on Schedule 2.3(c)(iii) hereto (the “ Closing Payoffs ”), and deliver to the Company evidence that such Closing Payoffs have been made;

(iv)          deliver to the Company cash in the amount necessary to make the Sale Bonus Payments;

(v)           deliver to the Company cash in the amount necessary to make the Employee Bonuses;

(vi)          deliver from BV Sub to the Exchange Agent an amount in cash (the “ Closing Payment ”) equal to (A) the Purchase Price plus the amount of the Estimated Working Capital Excess (if any) minus (B) the sum of (1) the Closing Payoffs, (2) the Sale Bonus Payments, (3) the Employee Bonuses, (4) the Estimated Working Capital Deficit (if any), (5) the initial Indemnity Escrow Amount, (6) the Representative Fee, and (7) the Representative Expense Reserve, for payment to the Participating Stockholders upon the terms and subject to the conditions of this Article II;

(vii)         deliver from BV Sub to the Escrow Agent the Indemnity Escrow Amount, to be held in the Indemnity Escrow Account, and distributed upon the terms and subject to the conditions of the Indemnity Escrow Agreement and this Agreement, the initial Indemnity Escrow Amount;

(viii)        deliver to the Representative (A) $25,000, on behalf of the Company and the Participating Stockholders, in payment of the Representative’s fee for acting in such capacity hereunder (the “ Representative Fee ”) and (B) $250,000, on behalf of the Company and the Participating Stockholders, as a reserve for its expenses as Representative hereunder (the “ Representative Expense Reserve ”), in each case as provided in Section 11.3(a) below; and

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(ix)           deliver, or cause to be delivered to each of Shane Green, Edin Saracevic, Doug Wheeler and Tarik Kurspahic, Sale Bonus Holdback Agreements duly executed by Parent and BV Sub.

2.4.          Certificate of Incorporation and Bylaws.  The certificate of incorporation and bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the certificate of incorporation and bylaws of the Surviving Corporation as of and after the Effective Time, until thereafter amended in accordance with the applicable provisions of Delaware Law, such certificate of incorporation and bylaws, and this Agreement.

2.5.          Directors and Officers.   Unless otherwise determined by Parent prior to the Effective Time, the directors and officers of Merger Sub holding office immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation as of and after the Effective Time and shall continue as such until their respective successors are duly elected or appointed and qualified.  Notwithstanding the above, no current officer or director of the Company as of the date hereof shall be required to remain an officer and/or director of the Company as of and after the Effective Time.

2.6.          Effect on Capital Stock.  Upon the terms and subject to the conditions of this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, BV Sub, Merger Sub, the Company or the holders of any shares of capital stock or other securities of the Company:

(a)           Treasury Stock .  All shares of capital stock of the Company, if any, held in the Company’s treasury shall be cancelled and cease to exist and no cash or other consideration shall be delivered in exchange therefor;

(b)           Subsidiary and Parent-Owned Stock .  All shares of capital stock of the Company, if any, held by any direct or indirect wholly-owned subsidiary of the Company shall be cancelled and cease to exist and no cash or other consideration shall be delivered in exchange therefor.  All shares of capital stock of the Company, if any, held by the Parent, BV Sub or any direct or indirect wholly-owned subsidiary of Parent or BV Sub shall be cancelled and cease to exist and no cash or other consideration shall be delivered in exchange therefor;

(c)           Merger Sub Shares .  Each outstanding share of common stock, par value $0.01 per share, of Merger Sub shall be converted into one share of common stock, par value $0.01 per share, of the Surviving Corporation.

(d)           Conversion of Company Securities .

(i)            For all purposes of and under this Agreement, the following capitalized terms shall have the following respective meanings:

“Common Stock Merger Consideration” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Company Common Stock plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Company Common Stock in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

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“Common Option and Warrant Merger Consideration ” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Company Options and Company Common Warrants (on an as if converted into Company Common Stock basis) pursuant to this Article II and/or Section 6.9 less the applicable per share exercise price under such Company Option and Company Common Warrant plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Company Options and Company Common Warrants (on an as if converted into Company Common Stock basis) in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

“Company Series A Warrant Consideration” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Company Series A Warrants (on an as if converted to Series A Preferred Stock basis) pursuant to this Article II and/or Section 6.9 less the applicable per share exercise price under such Company Series A Warrant plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Company Series A Warrants (on an as if converted to Series A Preferred Stock basis) in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

“Company Series B Warrant Consideration” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Company Series B Warrants (on an as if converted to Series B Preferred Stock basis) pursuant to this Article II and/or Section 6.9 less the applicable per share exercise price under such Company Series B Warrant plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Company Series B Warrants (on an as if converted to Series B Preferred Stock basis) in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

“Merger Consideration” shall mean, in the aggregate, the Closing Payment plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of capital stock or other securities of the Company in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

“Series A Merger Consideration” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Series A Preferred Stock plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Series A Preferred Stock in accordance with the terms of this Agreement and the Indemnity Escrow Agreement; and

“Series B Merger Consideration” shall mean, in the aggregate, the portion of the Closing Payment payable to holders of Series B Preferred Stock and Company Convertible Notes (on an as-if-converted into Series B Preferred Stock basis) pursuant to this Article II and/or Section 6.9 plus the amount (if any) distributed from the Indemnity Escrow Account and the Working Capital Excess to the holders of Company Series B Preferred Stock and Company Convertible Notes (on an as-if-converted into Series B Preferred Stock basis) in accordance with the terms of this Agreement and the Indemnity Escrow Agreement;

(ii)           Subject to the provisions of this Article II and Section 6.9 hereof, each issued and outstanding share of capital stock of the Company, and each Company Option, Company Warrant and Company Convertible Note shall be converted into the right to

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receive: (A) in the case of Company Common Stock, such share’s portion of the Common Stock Merger Consideration; (B) in the case of Series A Preferred Stock, such share’s portion of the Series A Merger Consideration; (C) in the case of Series B Preferred Stock and Company Convertible Notes, such share’s portion (on an as if converted to Series B Preferred Stock basis with respect to the Company Convertible Notes) of the Series B Merger Consideration; (D) in the case of Company Options, to the extent vested, and in the case of Company Common Warrants, such Company Option’s or Company Common Warrant’s portion, as applicable, of the Common Option and Warrant Merger Consideration, (E) in the case of Company Series A Warrants, such Company Series A Warrant’s portion of the Company Series A Warrant Consideration; and (F) in the case of Company Series B Warrants, such Company Series B Warrant’s portion of the Company Series B Warrant Consideration; in each case, as specified in the Final Merger Consideration Allocation Schedule.

(e)           Cancellation; Right to Merger Consideration .  Except as provided in Section 2.10 or purchased and exchanged as provided in Section 6.9, all shares of capital stock and other securities of the Company, when converted as provided in this Article II or purchased and exchanged as provided in Section 6.9, shall be retired, shall cease to be outstanding and shall automatically be cancelled, and the holder of a certificate or other instrument evidencing such security of the Company (“ Certificate ”) that, immediately prior to the Effective Time represented such shares of capital stock or other security of the Company shall cease to have any rights with respect thereto, except the right to receive, in accordance with Section 2.8(d) or Section 6.9, as applicable, the Common Stock Merger Consideration, Series A Merger Consideration, Series B Merger Consideration, Common Option and Warrant Merger Consideration, Company Series A Warrant Consideration and Company Series B Warrant Merger Consideration, applicable to the shares or other securities represented by such Certificate.  All Merger Consideration paid in accordance with the terms of Article II and Section 6.9 shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares or other securities, and there shall be no registration of transfers on the records of the Surviving Corporation of any shares of capital stock or other securities of the Company that were outstanding immediately prior to the Effective Time.  Except as provided in Section 6.9, if, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article II.

2.7.           Adjustments to Purchase Price.

(a)           Preliminary Closing Balance Sheet .  No later than two (2) Business Days prior to the Closing Date, the Company shall prepare and deliver to Parent and BV Sub an estimated unaudited balance sheet (the “ Preliminary Closing Balance Sheet ”) as of the Closing Date.  The Preliminary Closing Balance Sheet will be prepared in accordance with GAAP, and will be accompanied by a certification of each of the Company’s Chief Executive Officer and Chief Operating Officer that, the Preliminary Closing Balance Sheet presents the Company’s good faith estimate of the assets, liabilities and estimated Working Capital (the “ Estimated Working Capital ”), of the Company as of the Closing Date.

(b)           Preliminary Adjustment .  If the Estimated Working Capital, as calculated based upon the Preliminary Closing Balance Sheet, is less than zero dollars ($0) (the “ Target Working Capital ”), the Purchase Price shall be reduced on a dollar-for-dollar basis equal

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to the amount of the deficiency (the “ Estimated Working Capital Deficit ”) and if the Estimated Working Capital, as calculated based upon the Preliminary Closing Balance Sheet, is more than the Target Working Capital, the Purchase Price shall be increased on a dollar-for-dollar basis equal to the amount of the excess (the “ Estimated Working Capital Excess ”).  The Purchase Price shall thereafter be subject to further adjustment as provided in Section 2.7(c) and (d). For this purpose, “ Working Capital ” means total current assets minus total current liabilities as determined under GAAP, but excluding (i) as assets, any accounts receivable that are more than 120 days old as of the Closing Date, and (ii) as liabilities, the Indebtedness.

(c)           Closing Balance Sheet; Determination of Actual Working Capital .  As soon as possible, and in any event within thirty (30) days after the Closing Date, Peters Kearney & Associates, the Company’s accounting firm, shall prepare, and shall deliver to Parent and BV Sub and the Representative a Closing Balance Sheet (the “ Closing Balance Sheet ”) and a calculation of the actual Working Capital (“ Accountant’s Working Capital Calculation ”) of the Company as of the Closing Date, based on such Closing Balance Sheet and the definition of Working Capital included in Section 2.7(b) above.  The Closing Balance Sheet shall be prepared in accordance with GAAP.  During such thirty (30) day period, Surviving Corporation and Parent shall permit Peters Kearney & Associates access to the Company’s books and accounting records as may be reasonably required to prepare the Closing Balance Sheet.  If both Parent and the Representative do not object to the Closing Balance Sheet and Accountant’s Working Capital Calculation within thirty (30) days after receipt of, or both accept in writing, the Closing Balance Sheet and Accountant’s Working Capital Calculation during such thirty (30) day period, the Purchase Price shall be adjusted based upon the Accountant’s Working Capital Calculation, and payment made in accordance with Section 2.7(d) below.  If Parent objects to the Closing Balance Sheet and Accountant’s Working Capital Calculation, Parent shall notify the Representative in writing of such objection within thirty (30) days after Parent’s receipt thereof (such notice setting forth in reasonable detail the basis for such objection) (a “ Parent Dispute Notice ”).   If Representative objects to the Closing Balance Sheet and Accountant’s Working Capital Calculation, Representative shall notify Parent in writing of such objection within thirty (30) days after Parent’s receipt thereof (such notice setting forth in reasonable detail the basis for such objection) (a “ Stockholder Dispute Notice ”).  During such thirty (30) day period, Parent and/or Representative, as appropriate, shall be provided access to such work papers, relating to the preparation of the Closing Balance Sheet and Accountant’s Working Capital Calculation, as may be reasonably required to permit Parent and/or Representative to review in detail the manner in which the Closing Balance Sheet and Accountant’s Working Capital Calculation was prepared.  After delivery of a Parent Dispute Notice or Stockholder Dispute Notice, Parent and the Representative shall promptly negotiate in good faith with respect to the subject of the applicable Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery of the applicable Dispute Notice, the dispute shall be submitted to Grant Thornton LLP or such other independent auditor agreed upon by Parent and the Representative (the “ Independent Auditor ”).  Parent and Representative agree to execute, if requested by the Independent Auditor, an engagement letter, on terms reasonably acceptable to Parent and the Representative, with respect to the determination to be made by the Independent Auditor.  All fees and expenses relating to the work, if any, to be performed by the Independent Auditor shall be borne by the party that does not prevail in such dispute.  Except as provided in the preceding sentence, all other costs and expenses incurred by the parties in connection with resolving any dispute hereunder before the Independent Auditor shall be borne

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by the party incurring such cost and expense.  The Independent Auditor shall determine only those issues still in dispute and the Independent Auditor’s determination shall be based upon, and consistent with, the terms and conditions of this Agreement.  The determination by the Independent Auditor shall be based solely on presentations with respect to such disputed items by Parent and Representative to the Independent Auditor and not on the Independent Auditor’s independent review.  Parent and Representative shall use their reasonable best efforts to make their respective presentations as promptly as practicable following submission to the Independent Auditor of the disputed items, and each such party shall be entitled, as part of its presentation, to respond to the presentation of the other party and any questions or requests of the Independent Auditor.  In deciding any matter, the Independent Auditor (i) shall be bound by the provisions of this Section 2.7 and (ii) may not assign a value to any item greater than the greatest value for such item claimed by Parent or Representative or less than the smallest value for such item claimed by Parent or Representative.  The Independent Auditor will be directed to issue a final and binding decision within thirty (30) days of submission to the Independent Auditor, as to the issues of disagreement referred to in the applicable Dispute Notice and not resolved by Parent and the Representative (which submission shall be made no later than five (5) Business Days after the end of the fifteen-day period where Parent and Representative use good faith efforts to resolve the dispute among themselves).  The Closing Balance Sheet and Accountant’s Working Capital Calculation, and other items set forth therein, as so adjusted by agreement or by the Independent Auditor (if required), shall be final binding and non-appealable for all purposes hereunder; provided that such determination may be reviewed, corrected or set aside by a court of competent jurisdiction but only upon a finding that the Independent Auditor committed manifest error with respect to its determination.  The determination of the Independent Auditor shall not be deemed an award subject to review under the Federal Arbitration Act or any other statute.

(d)           The Working Capital amount determined in accordance with Section 2.7(c) (the “ Actual Working Capital ”) shall be used to calculate post-Closing adjustments to the Purchase Price as follows:

(i)            if the Actual Working Capital is greater than the Estimated Working Capital (the amount of such difference referred to herein as the “ Working Capital Excess ”), then BV Sub shall pay Representative within three (3) Business Days of the final determination of Actual Working Capital, by check or wire transfer of immediately available funds, the Working Capital Excess for distribution by the Representative to each holder of Company securities based on the proportions set forth in the Final Merger Consideration Allocation Schedule (with such percentages adjusted by the removal of any Dissenting Shares from the calculations thereof); or

(ii)           if the Actual Working Capital is less than the Estimated Working Capital (the amount of such difference referred to herein as the “ Working Capital Deficit ”), then BV Sub shall be entitled to indemnification with respect to the Working Capital Deficit and payment of such Working Capital Deficit shall be from the Indemnity Escrow Account.

2.8.           Exchange of Certificates; Payment.

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(a)           Exchange Agent .  As soon as practicable following the date of this Agreement, Parent and BV Sub shall appoint SunTrust Bank, or such other bank or trust company reasonably satisfactory to the Company and the Representative, to act as exchange agent (the “ Exchange Agent ”) for the purpose of exchanging the applicable Closing Payment for shares of the capital stock or other securities of the Company in accordance with the terms of this Agreement.

(b)           BV Sub to Deposit Closing Payment and Indemnity Escrow Amount.   Prior to or on the Closing Date, BV Sub shall and Parent shall cause BV Sub to:

(i)            deposit the Closing Payment with the Exchange Agent.  The Closing Payment deposited with the Exchange Agent shall hereinafter be referred to as the “ Exchange Fund .”  The Exchange Agent shall, pursuant to irrevocable instructions, deliver cash contemplated to be issued out of the Exchange Fund on the terms set forth in this Article II and Section 6.9.  The Exchange Fund may not be used for any other purpose; and

(ii)           deposit the initial Indemnity Escrow Amount with the Escrow Agent.

(c)           Merger Consideration Allocation Schedules .

(i)            Attached hereto as Exhibit C is a preliminary merger allocation schedule prepared by the Company (the “ Preliminary Merger Consideration Allocation Schedule ”) which sets forth the preliminary allocation of proceeds among the holders of securities of the Company.  The Preliminary Merger Consideration Allocation Schedule shall set forth (A) the name, address and tax identification number (if known) of each holder of shares of capital stock or other securities of the Company as of the date of this Agreement, (B) the number of shares (or other securities on an as if converted basis) held by such holder, (C) the portion of the Closing Payment payable to such holder in accordance with the provisions of this Agreement and of the Company Charter Documents and any other agreement, arrangement or understanding to which the Company and any holder or holders of capital stock or other securities of the Company are parties, in each case as in effect as of the date hereof, including specific identification of the Common Stock Merger Consideration, Series A Merger Consideration, Series B Merger Consideration, Company Option and Warrant Merger Consideration, Company Series A Warrant Consideration and Company Series B Warrant Consideration payable to each such holder, and (D) each such holder’s proportional interest in the Indemnity Escrow Account and the Working Capital Excess.

(ii)           At the Closing, the Company will deliver to Parent and BV Sub a schedule setting forth a final schedule (the “ Final Merger Consideration Allocation Schedule ”), which shall be in the same form as the Preliminary Merger Consideration Allocation Schedule, except that the information provided in the Final Merger Consideration Allocation Schedule shall be as of the Closing Date.  Upon receipt by Parent and BV Sub and acceptance and approval thereof (which will not be unreasonably withheld or delayed), the Final Merger Consideration Allocation Schedule will be appended to this Agreement as Exhibit C-1 hereto and appended as an appropriately numbered exhibit to the Exchange Agent Agreement and the Indemnity Escrow Agreement.

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(iii)          The Company represents, warrants and agrees that (A) the allocations set forth in the Preliminary Merger Consideration Allocation Schedule and the Final Merger Consideration Allocation Schedule comply with and do not violate any provision of the Company Charter Documents and any other agreement, arrangement or understanding to which the Company and any holder or holders of capital stock or other securities of the Company are parties, in each case as in effect as of the Closing Date, (B) the allocations set forth on such Schedules as well as the Merger Consideration payable to the holders of capital stock or other securities of the Company as reflected therein will be subject to adjustment in accordance with the provisions of this Agreement and (C) the Final Merger Consideration Allocation Schedule will be used by Parent, BV Sub, the Exchange Agent, the Escrow Agent and the Representative for all purposes of determining (1) the amounts to which any holder of capital stock or other securities of the Company is entitled with respect to payments made from the Closing Payment, (2) distributions, if any, from the Indemnity Escrow Account, or otherwise (including distributions of any Working Capital Excess), and (3) proportional liability of a Participating Stockholder pursuant to Section 9.3(e) relating to indemnification obligations of Company Excepted Claims in excess of the Indemnity Escrow Amount, and each of Parent, BV Sub, the Exchange Agent, the Escrow Agent and the Representative shall be entitled to assume the accuracy of the Final Merger Consideration Allocation Schedule at and after the Closing.

(d)           Exchange Procedures .  Promptly following the date hereof, the Company shall mail to each holder of record (as of the date hereof) of a Certificate or Certificates, which immediately prior to the Effective Time represents outstanding shares of capital stock or other securities of the Company, whose shares or other securities will be converted into the right to receive a portion of the Merger Consideration pursuant to this Article II, at the Effective Time: (i) a letter of transmittal (the “ 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 Company prior to the Effective Time (who shall deliver such Certificates to the Exchange Agent), or the Exchange Agent after the Effective Time, and shall be in such form and have such other provisions as Parent and BV Sub may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the portion of the Closing Payment payable with respect to the shares represented by such Certificates.  Upon surrender of a Certificate or Certificates for cancellation to the Company prior to the Effective Time (who shall deliver such Certificates to the Exchange Agent), or the Exchange Agent after the Effective Time or to such other agent or agents as may be appointed by Parent and BV Sub, 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 Certificate (each a “ Participating Stockholder ”), subject to Section 2.8(f), shall be entitled to receive upon the Effective Time in exchange therefor the portion of the Closing Payment applicable to the shares of capital stock or other securities of the Company represented by such Certificate as indicated in the Final Merger Consideration Allocation Schedule, and upon the Effective Time the Certificate so surrendered shall forthwith be cancelled.  Until so surrendered, outstanding Certificates (except those representing Dissenting Shares) will be deemed from and after the Effective Time, for all corporate purposes, to evidence the ownership of the Merger Consideration into which such shares of the capital stock or other securities of the Company shall have been so converted.  Notwithstanding the provisions of this Section 2.8(d), holders of Company Warrants and Company Convertible Notes who have such securities purchased by BV Sub pursuant to Section

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6.9 and holders of Company Options who receive their proportionate share of the Merger Consideration in exchange for such Company Options in accordance with Section 2.11 and Section 6.9 shall comply with the applicable terms thereof and pursuant thereto shall become Participating Stockholders.

(e)           Payments to Persons Other than a Registered Holder .  If any portion of the payments due to holders of capital stock or other securities of the Company pursuant to this Article II and/or Section 6.9 is to be paid to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other Taxes required as a result of such payment to a Person other than the registered holder of such Certificate or establish to the satisfaction of Parent and BV Sub (or the Exchange Agent or any other agent designated by Parent and BV Sub) that such transfer or other Taxes have been paid or are otherwise not payable.

(f)            Required Withholding .  Each of the Exchange Agent, Parent, BV Sub 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 shares of capital stock or other securities of the Company such amounts as may be required to be deducted or withheld therefrom under Applicable Law.  To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

(g)           No Liability .  Notwithstanding anything to the contrary set forth in this Agreement, none of the Exchange Agent, Parent, BV Sub, the Surviving Corporation or any other party hereto shall be liable to a holder of shares of capital stock or other securities of the Company for any amount properly paid to a public official pursuant to any Applicable Laws.

2.9 .          Escrow.

(a)           Establishment of Escrow .  At or prior to the Closing, Parent, BV Sub, the Company, the Representative and the Escrow Agent shall enter into the Indemnity Escrow Agreement, and, at Closing, BV Sub shall deposit the initial Indemnity Escrow Amount into the Indemnity Escrow Account to be maintained by the Escrow Agent in accordance with the terms of this Agreement and the Indemnity Escrow Agreement.  The Indemnity Escrow Amount shall be available to compensate Parent, BV Sub and the other Parent Indemnified Parties for Losses pursuant to the indemnification obligations of the Participating Stockholders pursuant to Article IX hereof, for adjustments to the Purchase Price pursuant to Section 2.7 and payments of the Dissenting Shares Reduction Amount pursuant to Section 2.10, all as finally determined under this Agreement and the Indemnity Escrow Agreement.

(b)           Disbursements from Indemnity Escrow Account to Parent, BV Sub and Parent Indemnified Parties .  Parent, BV Sub and the Representative shall instruct the Escrow Agent to make disbursements to Parent, BV Sub and/or other Parent Indemnified Parties in accordance with this Agreement and the Indemnity Escrow Agreement.  If, at any time, the

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remaining Indemnity Escrow Amount held in the Indemnity Escrow Account is insufficient to satisfy a claim or claims for indemnification, Parent, BV Sub and the Representative shall instruct the Escrow Agent to make disbursements in payment of such claims up to the Indemnity Escrow Amount then remaining and the Parent Indemnified Parties may proceed against the Participating Stockholders only to the extent permitted by Section 9.3(e).

(c)           Termination of Escrow Agreement; Distributions to Stockholders .  Within three (3) Business Days following the Company Survival Date, the Escrow Agent shall distribute the remaining Indemnity Escrow Amount to the Participating Stockholders and Managers, with such distributions to be made to each holder and Manager based on the proportions set forth in the Final Merger Consideration Allocation Schedule (with such percentages adjusted by the removal of any Dissenting Shares from the calculations thereof); provided, however, that if at the time of any such distribution there remain outstanding and unresolved any timely asserted claims for Losses by any Parent Indemnified Party pursuant to Article IX hereof (“ Claimed Losses ”), the Escrow Agreement (including the Indemnity Escrow Account) shall continue and the Escrow Agent shall hold back from such distribution an amount equal to the Claimed Losses until such outstanding claims for Losses have been fully paid or finally determined to require no payment pursuant to the terms and conditions of this Agreement and the Indemnity Escrow Agreement.  In addition, on the first anniversary of the Closing Date, the Escrow Agent shall distribute forty percent (40%) of the income on the Indemnity Escrow Amount to the Participating Stockholders and the Managers, with such distributions to be made to each holder and Manager based on the proportions set forth in the Final Merger Consideration Allocation Schedule (with such percentages adjusted by the removal of any Dissenting Shares from the calculations thereof).

2.10.        Dissenting Shares.   Notwithstanding anything in this Agreement to the contrary, any shares of capital stock of the Company issued and outstanding immediately prior to the Effective Time, and held by a holder who has not voted in favor of, or consented in writing to, the Merger and who has exercised and perfected appraisal rights for such shares in accordance with and complied in all respects with Section 262 of the DGCL (a “ Dissenting Stockholder ” and the shares held by such Dissenting Stockholder, the “ Dissenting Shares ”), shall not be converted into the right to receive the Merger Consideration as provided in this Article II, unless and until such holder fails to perfect or effectively withdraws or otherwise loses such holder’s right to appraisal under applicable Delaware Law.  At the Effective Time, all Dissenting Shares shall be cancelled and cease to exist and the Dissenting Stockholder or Dissenting Stockholders shall be entitled only to such rights as may be granted to such Dissenting Stockholder or Dissenting Stockholders under Section 262 of the DGCL.  All Dissenting Shares held by Dissenting Stockholder or Dissenting Stockholders who have failed to perfect or who effectively shall have withdrawn or lost the right to appraisal under Delaware Law shall thereupon be deemed to have been converted into and to have become exchangeable for the right to receive the portion of the Merger Consideration applicable to such shares in accordance with this Agreement, without any interest thereon.  The Company shall provide Parent and BV Sub (a) prompt written notice of any written demands for appraisal, withdrawals of demands for appraisal and any other instruments served under applicable Delaware Law, and (b) the opportunity to participate in negotiations, proceedings or settlements with respect to demands for appraisal under applicable Delaware Law, provided that all such negotiations, proceedings and settlements shall be led by (i) the Company and Representative prior to the Effective Time and (ii) the Representative, after

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the Effective Time.  Neither the Company nor the Representative shall voluntarily make any payment with respect to any appraisal demands for appraisal and shall not, except with Parent’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or offer to settle any such demands.  If, as a result of any settlement or a determination made pursuant to Section 262 of the DGCL, any Dissenting Stockholder is paid or is entitled to receive as payment for such Dissenting Stockholder’s shares an amount in excess of the portion of the Merger Consideration payable with respect to such shares pursuant to this Article II (the aggregate of such excess payments with respect to all Dissenting Shares is referred to as the “ Dissenting Shares Reduction Amount ”), then the Company and the Representative shall provide joint written instruction to the Escrow Agent to deliver from the Indemnity Escrow Account to BV Sub an amount equal to the Dissenting Shares Reduction Amount.

2.11.        Effect on Options, Warrants and Convertible Notes.   At the Effective Time (i) each Company Option then outstanding under any of the Company Stock Option Plans or otherwise shall be cancelled and be of no further effect and to the extent vested shall be converted into the right to receive a portion of the Merger Consideration as set forth in Section 2.6 above, (ii) each Company Warrant then outstanding shall be cancelled and be of no further effect and shall be converted into the right to receive a portion of the Merger Consideration as set forth in Section 2.6 above, other than those purchased by BV Sub in accordance with Section 6.9(b), (iii) each Company Convertible Note shall be cancelled and be of no further effect and shall be converted into the right to receive a portion of the Merger Consideration as set forth in Section 2.6 above, other than those purchased by BV Sub in accordance with Section 6.9(c), and prior to the Closing Date, the Company shall take all action necessary to cause all outstanding Company Options, Company Warrants and Company Convertible Notes to be exercised or cancelled in accordance with this Section 2.11 and Section 6.9, as applicable (with any such cancellation effective as of Closing), including the adoption of amendments to the Company Stock Option Plans, the stock option agreements pertaining to any outstanding Company Options, the Company Warrants, and Company Convertible Notes and/or the obtaining of acknowledgments and releases from the holders of such Company Options, Company Warrants, and Company Convertible Notes as may be requested by Parent and BV Sub to facilitate the foregoing, all such action to be taken by the Company in compliance with Applicable Law.

2.12.        Lost, Stolen or Destroyed Share Certificates.   In the event that any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of a satisfactory affidavit of that fact by the holder thereof, the Merger Consideration applicable to the shares represented by such Certificates;  provided, however, that Parent and BV Sub may, in their discretion and as a condition precedent to the issuance thereof, require the owners of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent, BV Sub, the Surviving Corporation or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed.

2.13.        Further Action.   At and after the Effective Time, the officers and directors of Parent, BV Sub and the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company, BV Sub 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 necessary to vest, perfect or confirm of record or otherwise in the Surviving

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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.

2.14.        Stockholder Support Agreement.   Immediately following the execution and delivery of this Agreement by the Company pursuant to the resolutions of the Board of Directors of the Company, each of the Consenting Stockholders will execute and deliver to Parent and BV Sub the Stockholder Support Agreement in the form attached hereto as Exhibit A .  Pursuant to the Stockholder Support Agreement and the written consent included therewith (which consent shall also be delivered to the Company simultaneously with the delivery of the Stockholder Support Agreement to Parent and BV Sub), each of the Consenting Stockholders will have, among other things, consented to the adoption and approval of this Agreement and the approval of the Merger.

2.15.        Waiver of Right of First Refusal.   At the time of execution of this Agreement, the Company has delivered to Parent and BV Sub the executed waiver by Gannett Satellite Information Network, Inc. of its right of first refusal with respect to the purchase of the Company.

2.16.        Agreements Regarding Sale Bonuses.   At or prior to Closing, each of Shane Green, Edin Saracevic, Doug Wheeler and Tarik Kurspahic (each a “ Manager ”) shall have delivered to Parent and BV Sub an executed Sale Bonus Holdback Agreement, in the form attached hereto as Exhibit D (the “ Sale Bonus Holdback Agreement ”).

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent, BV Sub and Merger Sub, subject to the exceptions specifically disclosed in the disclosure letter (referencing the appropriate section or subsection of this Agreement, as applicable) supplied by the Company to Parent and BV Sub dated as of the date hereof and certified by a duly authorized executive officer of the Company (the “ Company Disclosure Letter ”), as follows in this Article III.  These representations and warranties, and the information in the Company Disclosure Letter, are current as of the date of this Agreement and as of the Closing Date except to the extent that a representation, warranty or information in the Company Disclosure Letter expressly states that such representation or warranty, or information in the Company Disclosure Letter, as applicable, is current only as of an earlier date or as of the date of this Agreement.

3.1.           Organization.

(a)           Organization; Good Standing; Power and Authority .  The Company is a corporation duly organized, validly existing and in good standing under Delaware Law with full corporate power and authority to conduct its business as it is currently being conducted and to own or lease, as applicable, its assets.  The Company is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary,

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except where the failure to be so qualified or in good standing would not have a Company Material Adverse Effect.

(b)           Charter Documents .  The Company has delivered or made available to Parent a true and correct copy of the certificate of incorporation, including all certificates of designation thereto (the “ Company Charter ”), and bylaws of the Company (the “ Company Bylaws ”), each as amended and or restated to date (collectively, the “ Company Charter Documents ”).

(c)           Subsidiaries .  The Company currently has no and never has had subsidiaries and does not own or control, directly or indirectly, any equity, participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust, or other business association.

3.2.           Capitalization.

(a)           Capital Stock .  The authorized capital stock of Company consists of: (i) 36,000,000 shares of Company Common Stock and (ii) 17,666,667 shares of Company Preferred Stock, 11,000,000 of which are designated as Series A Preferred Stock and 6,666,667 of which are designated as Series B Preferred Stock.  At the close of business on December 1, 2006:  (i) 9,988,081 shares of Company Common Stock were issued and outstanding, (ii) 8,047,153 shares of Series A Preferred Stock were issued and outstanding and (iii) 6,666,667 shares of Series B Preferred Stock were issued and outstanding.  All outstanding shares of Company Common Stock and Company Preferred Stock are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with federal and state securities laws 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.

(b)           Company Options and Warrants .  As of the close of business on December 1, 2006: (i) 1,397,970 shares of Company Common Stock are issuable upon the exercise of outstanding Company Options granted under the Company’s 2000 Equity Incentive Plan (the “ Company Stock Option Plan ”) or otherwise, (ii) 5,365,570 shares of Company Common Stock, 1,685,025 shares of Series A Preferred Stock and 424,531 shares of Series B Preferred Stock are issuable pursuant to outstanding Company Warrants, and (iii) 1,698,113 shares of Series B Preferred Stock are issuable pursuant to outstanding Company Convertible Notes.  Section 3.2(b) of the Company Disclosure Letter sets forth (A) a list of each outstanding Company Option, Company Warrant and Company Convertible Notes, (B) the name of the holder of each Company Option, Company Warrant and Company Convertible Note, (C) the number of shares of Company Common Stock, Series A Preferred Stock and Series B Preferred Stock subject to each Company Option, Company Warrant and Company Convertible Note, (D) the exercise price, or conversion price, of each Company Option, Company Warrant and Company Convertible Note, (E) the date of grant or issue for each Company Option, Company Warrant and Company Convertible Note, (F) the applicable vesting schedule, if any, and the extent to which each Company Option and Warrant is vested and exercisable as of the date hereof, (G) details regarding the acceleration of vesting, if any, and (H) the date on which each Company Option and Company Warrant expires.  All shares of Company Common Stock, Series A Preferred Stock and Series B Preferred Stock subject to issuance pursuant to the exercise of

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Company Options, Company Warrants and Company Convertible Notes, 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.  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 or Company Warrant as a result of the Merger (whether alone or upon the occurrence of any additional or subsequent events).  There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to the Company.  Copies of the Company’s capitalization table and stock ledger as of the date hereof are attached to Section 3.2(a) of the Company Disclosure Letter.

(c)           Other Securities .  Except as described in this Section 3.2 or in Section 3.2(c) of the Company Disclosure Letter, 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 is a party or by which any of them is bound obligating the Company to (including on a deferred basis) issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, or other voting securities of the Company, or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, instrument, arrangement, understanding, obligation or undertaking.  The Company is not now and has never been in violation of any provisions granting holders of Company securities preemptive, purchase or similar rights in any of the agreements listed in Section 3.2(c) of the Company Disclosure Letter.  There are no outstanding Contracts of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interests in, the Company.  Other than as described in Section 3.2(c) of the Company Disclosure Schedule, or the Stockholder Support Agreements entered in connection with this Agreement by each Consenting Stockholder, 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 nor are there any irrevocable proxies, voting trusts, rights plans, anti-takeover plans or registration rights agreements with respect to any shares of the capital stock of, or other equity or voting interests in, the Company.

3.3.           Authority; No Conflict; Necessary Consents.

(a)           Authority .  The Company has all requisite power and authority to enter into this Agreement and to consummate the Merger and the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the Merger and 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 filing of the Certificate of Merger pursuant to Delaware law.  This Agreement has been duly executed and delivered by the Company and assuming due authorization, execution and delivery by Parent, BV Sub and Merger Sub, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and except insofar as the availability of equitable remedies may be limited by Applicable Law.

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(b)           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, (ii) conflict with or violate any Applicable Law, 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 pursuant to, any Company Material Contract except, in the case of each of the preceding clauses (i), (ii) and (iii) for any conflict, violation, beach, default, impairment, alteration, giving of rights or Lien which would not reasonably be expected to result in a Company Material Adverse Effect or materially and adversely affect the ability of the Company to consummate the Merger within the time frame in which the Merger would otherwise be consummated in the absence of such conflict, violation, beach, default, impairment, alteration, giving of rights or Lien.

(c)           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 exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a “ Governmental Authority ”) or any other Person 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 Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company and/or Parent are qualified to do business (the “ Necessary Governmental Consents ”) and (ii) such other consents, waivers, approvals, orders, authorizations, registrations, declarations and filings which if not obtained or made would not be material to the Company or materially adversely affect the ability of the parties hereto to consummate the Merger within the time frame in which the Merger would otherwise be consummated in the absence of the need for such consent, waiver, approval, order, authorization, registration, declaration or filing.  Section 3.3(c) of the Company Disclosure Letter provides a list of all Persons, other than Governmental Authorities, whose consent is required to be obtained 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.

3.4.          Financial Statements.  The Company has delivered to Parent true and correct copies of the Company’s unaudited balance sheets as of December 31, 2005, 2004 and 2003 and unaudited statements of operations, cash flows and stockholders’ equity of the Company for the year ended December 31, 2005, 2004 and 2003 (the “ Financials ”) and the unaudited balance sheet of the Company as of September 30, 2006 (the “ Company Balance Sheet ”) and unaudited statements of operation, cash flows and stockholders’ equity for the nine-month period then ended (the “ Interim Financials ,” and together with the Financials, collectively, the “ Company Financials ”). The Company Financials were prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis (“ GAAP ”) (except as may be otherwise specified in such Company Financials or the notes thereto), and present fairly and accurately the financial condition and operating results of the Company as of the dates and for

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the periods indicated therein in all material respects, and are consistent with the books and records of the Company, subject, in the case of Interim Financials, to year-end audit adjustments and the absence of notes.   Except as set forth in the Company Financials or any notes thereto, the Company has (i) no liabilities, contingent or otherwise, other than (A) liabilities incurred  in the ordinary  course of business  subsequent to  any such Company Financials, (B) obligations incurred in the ordinary course of business and not required under GAAP to be reflected in the Company Financials, and (C) expenses in connection with the negotiation and consummation of the transactions contemplated hereby which, in all cases, individually or in the aggregate, are not material to the financial condition or operating results of the Company and (ii) no Indebtedness.  The Company is not a party to any off-balance sheet transactions that could have a current or future effect upon the Company’s financial condition, cash flows or results of operations. The Company maintains a system of accounting established and administered in accordance with GAAP.

3.5.          Absence of Certain Changes or Events.   From January 1, 2006 through the date of this Agreement, there has not been, accrued or arisen:

(a)           any Company Material Adverse Effect;

(b)           any acquisition by the Company of, or agreement by the Company to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agreement to acquire any assets or any equity securities;

(c)           any Contract, agreement in principle, letter of intent, memorandum of understanding or similar agreement with respect to any material joint venture, strategic partnership or alliance;

(d)           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 of any of the Company’s capital stock or any other securities of the Company or any options, warrants, calls or rights to acquire any such shares or other securities;

(e)           any split, combination or reclassification of any of the Company’s capital stock;

(f)            any granting by the Company, whether orally or in writing, of any increase in compensation or fringe benefits or any payment by the Company of any bonus or any change by the Company of severance, termination or bonus policies and practices or any entry by the Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby (either alone or upon the occurrence of additional or subsequent events);

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(g)           any amendment, termination or consent with respect to any Company Material Contract required to be disclosed in Section 3.17(b) of the Company Disclosure Letter;

(h)           any material change by the Company in its accounting methods (including Tax accounting), principles or practices, except as required by concurrent changes in GAAP;

(i)            any debt, capital lease or other debt or equity financing transaction by the Company or entry into any agreement by the Company in connection with any such transaction, except for capital lease and receivables financings entered into in the ordinary course of business consistent with past practices which are not individually or in the aggregate material to the Company;

(j)            any sale, lease, mortgage, pledge, license, encumbrance or other disposition of any properties or assets except the sale, lease, mortgage, pledge license, encumbrance or disposition of property or assets which are not material, individually or in the aggregate to the business of the Company other than Company Intellectual Property licenses included in the Company’s form customer agreements entered into in the ordinary course for the purchase of Company Products;

(k)           any purchases of fixed assets, spares or other long-term assets other than in the ordinary course of business and in a manner consistent with past practices;

(l)            any revaluation, or any indication that such a revaluation was merited under GAAP, by the Company of any of its assets, including, writing down the value of capitalized inventory, spares, long term or short-term investments, fixed assets, goodwill, intangible assets, deferred tax assets, or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practices;

(m)          any damage, destruction or other casualty loss (whether or not covered by insurance) with respect to any assets that, individually or in the aggregate, are material to the Company;

(n)           any sale, assignment or transfer of any of the Company Intellectual Property other than Company Intellectual Property licenses included in the Company’s form customer agreements entered into in the ordinary course for the purchase of Company Products;

(o)           receipt of notice that there has been a loss of, or order cancellation or reduction by, any customer of the Company that has or would result in a Company Material Adverse Effect;

(p)           any loans or guarantees made by the Company to or for the benefit of its employees, stockholders, officers or directors or any members of their immediate families, other than travel advances made in the ordinary course of its business;

(q)           any agreement, settlement, compromise or election made with respect to Taxes; or

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(r)            any agreement or commitment by the Company to do any of the things described in this Section 3.5(a)-(q).

3.6.           Taxes.

(a)           For purposes of this Agreement:

(i)            “ Relevant Group ” means any affiliated, combined, consolidated, unitary or similar group of which the Company is or was a member.

(ii)           “ Tax ” or “ Taxes ” means all federal, state, local or foreign, net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, bank shares, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, profits, windfall profits, transaction, license, lease, service, use, occupation, severance, energy, unemployment, social security, worker’s compensation, capital, premium, or other taxes, assessments, customs, duties, fees, levies, or other governmental charges in the nature of a tax, whether disputed or not, together with any interest, penalties, additions to tax, or additional amounts with respect thereto.

(iii)          “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

(iv)          “ Transfer Taxes ” means sales, use, transfer, real property transfer, recording, documentary, stamp, registration, stock transfer, and other similar taxes and fees (including any penalties and interest).

(b)           All Tax Returns required to have been filed by or with respect to the Company or a Relevant Group have been duly and timely filed, and each such Tax Return is true and accurate and correctly and completely reflects, in all material respects, liability for Taxes and all other information required to be reported thereon.  All Taxes owed by the Company or a Relevant Group (whether or not shown on any Tax Return) for all taxable periods through and including the Closing Date have been timely paid.  The Company has adequately provided for liabilities for all material unpaid Taxes for all taxable periods through and including the Closing Date in the Company Financials, which liabilities represent current Taxes not yet due and payable as of the Closing Date.

(c)           There is no action, audit, dispute or claim now pending, or to the Company’s Knowledge, threatened against, or with respect to, the Company, or any matters under discussion with any Governmental Authority in respect of any Taxes.  The Company is not the beneficiary of any extension of time within which to file any Tax Return, nor has it made (or had made on its behalf) any requests for such extensions.  No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction or that the Company must file Tax Returns in that jurisdiction.  There are no Liens on any of the capital or assets of the Company with respect to Taxes.

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(d)           The Company has not elected under the Code to be treated as an S Corporation.

(e)           With respect to all taxable periods through and including the Closing Date, the Company has withheld and timely paid all Taxes required to have been withheld and paid, and has collected and remitted all Taxes (including all sales and use Taxes), required to be collected and remitted, and has complied with all information reporting and backup withholding requirements.

(f)            Section 3.6 of the Company Disclosure Letter: (i) lists all federal, state, local, and foreign Tax Returns filed with respect to the Company for taxable periods ended on or after December 31, 2001, (ii) indicates those Tax Returns that have been audited, and (iii) indicates those Tax Returns that currently are the subject of audit.  The Company has delivered or made available to Parent correct and complete copies of all federal Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by to the Company since January 1, 2001.  The Company has not waived (and is not subject to a waiver of) any statute of limitations in respect of Taxes and has not agreed to (and is not subject to) any extension of time with respect to a Tax assessment or deficiency.

(g)           The Company has never been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

(h)           The Company has not agreed to nor is it required to make by reason of a change in accounting method or otherwise, nor could it be required to make by reason of a proposed change in accounting method or otherwise, any adjustment under Section 481(a) of the Code which would have a binding effect on the Company for any taxable period (or portion thereof) ending after the Closing Date.  The Company has not been the “distributing corporation” or the “controlled corporation” with respect to a transaction described in Section 355 of the Code.  The Company has not received (and is not subject to) any ruling from any taxing authority and has not entered into (and is not subject to) any agreement with a taxing authority which would have a binding effect on the Company for any taxable period (or portion thereof) ending after the Closing Date.  The Company has not engaged in a “reportable transaction” as defined in Treasury Regulation Section 1.6011-4.

(i)            The Company is not a party to any Tax allocation or sharing agreement (excluding, for this purpose, any agreements the primary purpose of which is not the allocation or sharing of Tax liabilities and in which such provisions related to Taxes are typical of such arrangements).  The Company has no liability for the Taxes of any Person, other than under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local, or foreign law) with respect to any Relevant Group of which the Company currently is a member, (i) as a transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local or foreign law), or (iv) otherwise.  The Company is not a party to any joint venture, partnership or other arrangement that is treated as a partnership for federal income tax purposes.

(j)            The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion

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thereof) ending after the Closing Date as a result of any:  (i) intercompany transactions or excess loss accounts described in Treasury regulations under Section 1502 of the Code (or any similar provision of state, local, or foreign Tax law), (ii) installment sale or open transaction disposition made on or prior to the Closing Date or (iii) prepaid amount received on or prior to the Closing Date.

(k)           The Company makes no representation or warranty on the ability of the Company, Parent or their Affiliates to use the Company’s net operating losses after the Effective Time.

(l)            The Company and any Relevant Group have complied with all transfer pricing laws, rules, regulations and interpretations thereof by Governmental Authorities including Section 482 of the Code.

3.7.          Title to Properties .

(a)           Owned and Leased Properties .  The Company has never owned any real property.  Section 3.7(a) of the Company Disclosure Letter sets forth a separate list of all real property currently leased, licensed or subleased by the Company or otherwise used or occupied by the Company (the “ Real Property ”), the name of the lessor, licensor, sublessor, master lessor and/or lessee and the date of the lease, license, sublease or other occupancy right and each amendment thereto.  All such current leases are in full force and effect, are valid and effective in accordance with their respective terms, and there is not, 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) by the Company, or, to the Company’s Knowledge, by any other party thereto.  The Company currently occupies all of the Real Property for the operation of its business.  No parties other than the Company have a right to occupy any material Real Property, except for subleases described in the Company Disclosure Letter pursuant to which third parties have the right to occupy Real Property.  The Real Property and the physical assets of the Company are, in all material respects, in good condition and repair and regularly maintained in accordance with standard industry practices and, to the Company’s Knowledge, the Real Property is in compliance, in all materials respects, with Applicable Laws.  The Company has performed all of its obligations under any termination agreements pursuant to which it has terminated any leases of real property that are no longer in effect and has no material continuing liability with respect to such terminated real property leases.

(b)           Lease Documents .  The Company has provided Parent true, correct and complete copies of all current leases, lease guaranties, agreements for the leasing, use or occupancy of, or otherwise granting to the Company a right to occupy the Real Property, including all amendments, terminations and modifications thereof (the “ Lease Documents ”); and there are no other Lease Documents affecting the Real Property or to which the Company is bound, other than those identified in Section 3.7(a) of the Company Disclosure Letter.

(c)           Title .  The Company has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of its material tangible properties and assets, real, personal and mixed, used or held for use in its business, free and clear of any Liens except (i) as reflected in the Company Balance Sheet, (ii) Liens for Taxes not yet due and

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payable or delinquent or being contested in good faith by appropriate proceedings for which reserves have been established in accordance with GAAP, (iii) Liens imposed by Applicable Law, such as carrier’s, warehousemen’s and mechanic liens and other similar Liens, which arise in the ordinary course of business with respect to obligations not yet due, and (iv) easements, covenants, conditions and restrictions and such other imperfections of title and encumbrances, if any, which do not in any material respect detract from the value or interfere with the present use of the property subject thereto or affected thereby.  The rights, properties and assets presently owned, leased or licensed by the Company include all rights, properties and assets necessary to permit the Company to conduct its business in all material respects in the same manner as its business has been conducted prior to the date hereof.

3.8.          Intellectual Property.

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

“Company Intellectual Property” shall mean any and all Intellectual Property Rights that are owned by, or licensed to, the Company.

“Company Products” shall mean all products and services that have been developed by or on behalf of the Company and/or are owned, made, provided, distributed, imported, sold or licensed to third Persons by or on behalf of the Company.

“Company Registered Intellectual Property” shall mean the applications, registrations and filings for Intellectual Property Rights that are owned by the Company or that have been registered, filed, certified or otherwise perfected or recorded with or by any Governmental Authority by or in the name of the Company.

“Intellectual Property” shall mean 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, and records, (ii) inventions (whether or not patentable), discoveries, improvements, and technology, (iii) proprietary and confidential information, trade secrets and know how, (iv) proprietary databases, and technical data, (v) logos, trade names, trade dress, trademarks and service marks, (vi) domain names, web addresses and sites, (vii) proprietary tools, methods and processes, (viii) devices, prototypes, schematics, breadboards, netlists, maskworks, 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 medium.

“Intellectual Property Rights” shall mean 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) trademarks, trade names and service marks, (vi) divisions, continuations, renewals, reissuances, extensions and any foreign equivalents of the foregoing (as applicable) and (vii) analogous rights to those set forth above, including the

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right to enforce and recover remedies for infringement or misappropriation of any of the foregoing.

“Shrink-Wrapped Code” means (a) generally commercially available binary code (other than development tools and development environments) where available for a cost of not more than U.S. $20,000 for a perpetual license for a single user or work station (or $150,000 in the aggregate for all users and work stations), and (b) generally commercially available software programs that are not Company Products and are used internally by the Company in the ordinary course of business.

“Source Code” shall mean computer software and code, in form other than object code form, including, to the extent currently prepared and in existence, any 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.

(b)           No Default/No Conflict .  All unexpired written Contracts relating to either (i) Company Intellectual Property, or (ii) Intellectual Property or Intellectual Property Rights of a third Person licensed to the Company, are valid and in full force and effect, and enforceable in accordance with their terms, assuming due execution by the other parties thereto, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and except insofar as the availability of equitable remedies may be limited by Applicable Law.  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, such Contracts, subject to obtaining any consents and approvals as are set forth in Section 3.8(b) of the Company Disclosure Letter.  The Company is in material compliance with, and has not materially breached any term of any such Contracts or committed or failed to perform any act which, with or without notice, lapse of time or both would constitute a material default under the provisions of any such Contract 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, and subject to obtaining any consents and approvals as are set forth in  Section 3.8(b) of the Company Disclosure Letter, the Surviving Corporation will be permitted to exercise all of the Company’s rights under such Contracts to the same extent the Company would have been able to had the transactions contemplated by this Agreement not occurred and without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay.

(c)           No Infringement .  To the Knowledge of the Company, the operation of the business of the Company as it is currently conducted, including the design, development, use, import, branding, advertising, promotion, marketing, licensing, manufacture and sale of any Company Product, has not and does not infringe or misappropriate any Intellectual Property Rights of any third Person, or constitute unfair competition or trade practices under the laws of any jurisdiction.

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(d)           Notice .  The Company has not received notice, written or otherwise, from any third Person claiming that any Company Product or the operation of the business of the Company infringes or misappropriates any Intellectual Property Rights of any third Person or constitutes unfair competition or trade practices under the laws of any jurisdiction. The Company has not received notice, written or otherwise, from any third Person challenging the complete and exclusive ownership of or right to use the Company Intellectual Property, or suggesting that any third Person has any claim of legal or beneficial ownership with respect thereto.  The Company has not received any notice, written or otherwise, challenging, terminating, amending or affecting the interest of the Company, in the Company Intellectual Property.

(e)           Transaction . Neither this Agreement nor the transactions contemplated by this Agreement, including any assignment to Merger Sub by operation of law as a result of the Merger of any material written contracts or agreements to which the Compan