AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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PERFICIENT INC | BOLDTECH SYSTEMS, INC | PFT MergeCo IV, Inc

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 9/21/2007
Industry: Computer Services Law Firm: Vinson Elkins; Kendall, Koenig & Oelsner PC Sector: Technology

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

By and Among

PERFICIENT, INC.,

PFT MERGECO IV, INC.,

BOLDTECH SYSTEMS, INC.,

a Colorado corporation,

BOLDTECH SYSTEMS, INC.,

a Delaware corporation,

Each of the PRINCIPALS

and

KENT KASICA, as REPRESENTATIVE

Dated as of September 20, 2007

TABLE OF CONTENTS

		Page
	ARTICLE I
	DEFINITIONS
1.01.	Definitions	2
	ARTICLE II
	THE MERGER
2.01.	The Merger	16
2.02.	Plan of Merger	16
2.03.	Effective Time	16
2.04.	Effect of the Merger	17
2.05.	Certificate of Incorporation	17
2.06.	Bylaws	17
2.07.	Officers and Directors	17
2.08.	Conversion of Company Stock	17
2.09.	Conversion of Merger Sub Stock	18
2.10.	Treatment of Options	18
2.11.	Dissenters’ Rights	18
2.12.	Closing of Transfer Books	19
2.13.	Merger Consideration	19
2.14.	Working Capital Determination	21
2.15.	Escrowed Consideration	23
2.16.	Secondary Merger	23
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF COLORADO COMPANY AND DELAWARE COMPANY
3.01.	Organizational Matters	23
3.02.	Capital Structure	24
3.03.	Authority and Due Execution	26
3.04.	Non-Contravention and Consents	27
3.05.	Financial Statements; Chinese Company Practices	27
3.06.	Indebtedness	28
3.07.	Litigation	28
3.08.	Taxes	28
3.09.	Title to Property and Assets	31
3.10.	Intellectual Property	32
3.11.	Accounts Receivable	34
3.12.	Compliance; Permits.	34
3.13.	Brokers’ and Finders’ Fees	34
3.14.	Restrictions on Business Activities	35
3.15.	Employment Matters	35
3.16.	Employee Benefit Plans	36

3.17.	Environmental Matters	38
3.18.	Material Contracts	39
3.19.	Insurance	39
3.20.	Transactions with Related Parties	40
3.21.	Books and Records	40
3.22.	Absence of Changes	40
3.23.	Product Warranties; Services	42
3.24.	Customers and Supplier	42
3.25.	Illegal Payments	43
3.26.	Irrevocable Proxy and Voting Agreements	43
3.27.	Preferred Stockholder and Voting Agreements	43
3.28.	Disclosures	43
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
4.01.	Organization, Standing and Power	43
4.02.	Authority	44
4.03.	Non-Contravention and Consents	44
4.04.	Litigation	44
4.05.	Parent Common Stock	44
4.06.	Brokers’ and Finders’ Fees	45
4.07.	Reports	45
4.08.	Continuity of Business Enterprise	45
4.09.	No Acquisition of Parent Common Stock	45
4.10.	Reorganization	45
	ARTICLE V
	COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01.	Covenants of Company	45
5.02.	No Solicitation of Transactions	47
5.03.	All Necessary Action	48
	ARTICLE VI
	ADDITIONAL AGREEMENTS
6.01.	Regulatory Matters	48
6.02.	Securities Matters	48
6.03.	Registration Rights	49
6.04.	Stockholder Approval	53
6.05.	Access to Information; Confidentiality	54
6.06.	Legal Conditions to Merger	54
6.07.	Notification; Disclosure Supplements	54
6.08.	Tax Matters	55
6.09.	Tax Documentation	57
6.10.	Company Employees and Independent Contractors	57
6.11.	Employee Benefit Plans; Restricted Stock Grants	58
6.12.	Non-Competition Agreement	58

6.13.	Publicity	58
6.14.	Indemnification	59
6.15.	Insurance	59
6.16.	Stock Restriction Agreements	59
6.17.	Reorganization and Recapitalization	59
6.18.	Audited Financial Statements	59
6.19.	Chinese Company	60
6.20.	Tax Reporting	60
	ARTICLE VII
	CONDITIONS PRECEDENT
7.01.	Conditions to Each Party’s Obligation to Effect the Merger	60
7.02.	Conditions to Obligations of Parent and Merger Sub	60
7.03.	Conditions to Obligations of Company	62
	ARTICLE VIII
	TERMINATION AND AMENDMENT
8.01.	Termination	63
8.02.	Effect of Termination	63
8.03.	Expenses	63
8.04.	Extension; Waiver	63
	ARTICLE IX
	INDEMNIFICATION
9.01.	Agreement to Indemnify	64
9.02.	Survival of Indemnity	65
9.03.	Additional Provisions	65
9.04.	Claim Notice; Definitions; Third Party Claim Procedures	66
	ARTICLE X
	REPRESENTATIVE
10.01.	Authorization of the Representative	68
10.02.	Compensation; Exculpation; Indemnity	70
	ARTICLE XI
	GENERAL PROVISIONS
11.01.	Notices	71
11.02.	Interpretation	73
11.03.	Counterparts and Facsimile Execution	73
11.04.	Entire Agreement	73
11.05.	Governing Law	74
11.06.	Enforcement of Agreement	74
11.07.	Severability	74
11.08.	Assignment	74
11.09.	Amendment	74

iii

EXHIBIT LIST

EXHIBIT A	Form of Articles of Incorporation
EXHIBIT B	Form of Bylaws
EXHIBIT C	Form of Letter of Transmittal
EXHIBIT D	Form of Option Surrender Agreement
EXHIBIT E	Form of Escrow Agreement
EXHIBIT F	Form of Secondary Merger Agreement
EXHIBIT G	Form of Confidentiality and Intellectual Property Assignment Agreement
EXHIBIT H	Form of Contractor Services Agreement
EXHIBIT I-1	Form of Five Year Non-Compete Agreement
EXHIBIT I-2	Form of Three Year Non-Compete Agreement
EXHIBIT I-3	Form of Two Year Non-Compete Agreement
EXHIBIT J	Form of Stock Restriction Agreement
EXHIBIT K	Form of Irrevocable Proxy and Voting Agreement

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (the “ Agreement ”) dated as of September 20, 2007, by and among Perficient, Inc., a Delaware corporation (“ Parent ”), PFT MergeCo IV, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”), BoldTech Systems, Inc., a Colorado corporation (“ Colorado Company ”), BoldTech Systems, Inc., a Delaware corporation and a wholly-owned subsidiary of Colorado Company (“ Delaware Company ”), each Principal (as defined below) and Kent Kasica, in his capacity as Representative (“ Representative ”).

WHEREAS, Parent, Merger Sub, Delaware Company and Colorado Company have determined to engage in a strategic business combination;

WHEREAS, each Principal has executed and delivered to Colorado Company and Delaware Company an Irrevocable Proxy and Voting Agreement (as defined below) related to the voting of the each Principal’s shares of capital stock of Colorado Company and the shares of Delaware Company that such shares of capital stock of Colorado Company will be converted into pursuant to the Reorganization (as defined below);

WHEREAS, Colorado Company, Delaware Company and the holders of all of the Colorado Company Preferred Stock (as defined below) have entered into that certain Preferred Stockholder Agreement, dated September 18, 2007;

WHEREAS, as a condition to and in preparation for the strategic business combination and prior to the Closing (as defined below), Colorado Company will effect a reorganization by merging with and into Delaware Company (the “ Reorganization ”), a wholly owned subsidiary of Colorado Company, with the holders of capital stock of Colorado Company immediately before such merger holding an identical equity position in Delaware Company after the merger;

WHEREAS, following the Reorganization and prior to the Closing, Delaware Company will effect a recapitalization (the “ Recapitalization ”) pursuant to which, the rights and preferences of the Delaware Company Preferred Stock shall be amended (by approval and adoption of the Second Amended and Restated Certificate of Incorporation of Delaware Company (the “ Second Amended and Restated Certificate of Incorporation ”)) to, among other things, clarify that the maximum aggregate consideration that may be received per share by any holder of Delaware Company Preferred Stock in the event of a liquidation, dissolution or winding up of Delaware Company, either voluntary or involuntary, including a deemed liquidation, is equal to two times the original issue price per share, less the amount of any dividend or other amount paid to such holder on any share of Colorado Company Preferred Stock, prior to the Reorganization, or any share of Delaware Company Preferred Stock, after the Reorganization;

WHEREAS, the Liquidation Preference (as defined in the Second Amended and Restated Certificate of Incorporation) shall be paid by Delaware Company to the holders of Delaware Company Preferred Stock immediately prior to the Closing;

WHEREAS, following the Reorganization and the Recapitalization, Merger Sub will be merged with and into Delaware Company, with Delaware Company continuing as the surviving corporation in such merger as a direct wholly-owned subsidiary of Parent (the “ Merger ”);

WHEREAS, Parent and Delaware Company have determined that immediately after the effectiveness of the Merger, Delaware Company shall be merged with and into Parent (such merger being referred to herein as the “ Secondary Merger ”), with Parent continuing as the surviving entity in the Secondary Merger (sometimes hereinafter referred to as the “ Ultimate Surviving Corporation ”);

WHEREAS, for federal income tax purposes, it is intended that (i) the Reorganization constitute a reorganization described in Section 368(a)(1)(F) of the Code, (ii) this Agreement and the Secondary Merger Agreement (as defined below) constitute a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g), (iii) the Merger and the Secondary Merger constitute an integrated plan described in Rev. Rul. 2001-46, 2001-2 C.B. 321 and (iv) to the extent possible, the Merger and Secondary Merger constitute a reorganization within the meaning of Section 368(a) of the Code;

WHEREAS, the Boards of Directors of Colorado Company, Delaware Company, Parent (on its own behalf and as sole stockholder of Merger Sub) and Merger Sub have each approved and adopted this Agreement, the Merger and the other transactions contemplated hereby;

WHEREAS, the holders of the requisite number of shares of Delaware Company Common Stock (as defined below) and Delaware Company Preferred Stock outstanding after the Reorganization shall, after the Reorganization, the Recapitalization and the execution hereof and prior to the Closing, by written consent, approve and adopt this Agreement, the Merger and the other transactions contemplated hereby; and

WHEREAS, Parent, Merger Sub, Delaware Company and Colorado Company desire to make certain representations, warranties and covenants in connection with the Merger.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.01. Definitions . As used in this Agreement, the following terms shall have the meanings set forth or referenced below:

“ Accredited Investor ” shall have the meaning assigned to such term in Regulation D promulgated under the Securities Act.

“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition and this Agreement, the term “ control ” (and correlative terms) means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person.

“ Aggregate Common Shares ” means, with respect to a Common Securityholder, the aggregate of such Common Securityholder’s shares of Delaware Company Common Stock and Net Option Shares.

“ Aggregate Fractional Share Consideration ” means the aggregate amount of consideration payable pursuant to Section 2.13(a)(i) .

“ Aggregate Whole Shares ” means the aggregate number of each Securityholder’s Whole Shares.

“ Aggregate Whole Net Option Shares ” means the aggregate number of each Optionholder’s whole Net Option Shares.

“ Agreement ” has the meaning set forth in the Preamble.

“ Applicable Laws ” means all laws, statutes, constitutions, rules, regulations, principles of common law, resolutions, codes, ordinances, requirements, judgments, orders, decrees, injunctions, and writs of any Governmental Entity which has, or Colorado Company or Delaware Company believes is reasonably likely to have, jurisdiction over either Colorado Company, Delaware Company or any of the Subsidiaries or the businesses, operations or assets of Colorado Company, Delaware Company or any of the Subsidiaries, as they may be in effect on or prior to the Closing.

“ Applicable Percentage ” means, with respect to each Indemnifying Securityholder, a percentage equivalent of a fraction, the numerator of which is the aggregate number of whole Outstanding Shares and whole Net Option Shares held by such Securityholder and the denominator of which is the aggregate number of all whole Outstanding Shares and whole Net Option Shares.

“ Arbitrating Accountant ” has the meaning set forth in Section 2.14(e) .

“ Backlog ” means expected revenue committed under signed customer Contracts but not yet recognized as revenue under GAAP.

“ Certificate ” means a certificate representing Outstanding Common Shares.

“ Certificate of Merger ” has the meaning set forth in Section 2.03 .

“ Charter Documents ” has the meaning set forth in Section 3.01(c) .

“ Chinese Company ” means BoldTech Systems (Hangzhou), Ltd., a China wholly-owned foreign enterprise.

“ Claim Notice ” has the meaning set forth in Section 9.04(a) .

“ Closing ” has the meaning set forth in Section 2.03 .

“ Closing Cash Consideration ” means the (i) Total Cash Consideration less (ii) Escrowed Cash and less (iii) the Aggregate Fractional Share Consideration

“ Closing Cash Consideration Per Share ” means the Closing Cash Consideration divided by the sum of (i) the number of Aggregate Whole Shares and (ii) the number of Aggregate Whole Net Option Shares.

“ Closing Date ” has the meaning set forth in Section 2.03 .

“ Closing Date Dispute Notice ” has the meaning set forth in Section 2.14(b) .

“ Closing Date Statement ” has the meaning set forth in Section 2.14(b) .

“ Closing Stock Consideration ” means the Total Stock Consideration less the Escrowed Stock.

“ Closing Stock Consideration Per Share ” means the Closing Stock Consideration divided by the sum of (i) the number of Aggregate Whole Shares and (ii) the number of Aggregate Whole Net Option Shares.

“ Closing Stock Consideration Value ” means the product of the Closing Stock Consideration multiplied by the Parent Stock Per Share Price.

“ Code ” means the United States Internal Revenue Code of 1986, as amended; provided that all references to the Code, U.S. Treasury regulations or other governmental pronouncements shall be deemed to include references to any applicable successor regulations or amending pronouncement.

“ Colorado Company ” shall have the meaning set forth in the Preamble.

“ Colorado Company Common Stock ” means the common stock of Colorado Company, no par value.

“ Colorado Company Preferred Stock ” means the preferred stock of Colorado Company, no par value.

“ Commercially Reasonable Efforts ” means the commercially reasonable efforts that a prudent person desirous of achieving a result and having an incentive to and interest in achieving such result would use in similar circumstances to achieve that result as expeditiously as reasonably possible.

“ Common Securityholders ” means, collectively, the Common Stockholders and the Optionholders.

“ Common Stockholders ” has the meaning set forth in Section 3.02(a)(iii) .

“ Company ” means Colorado Company for all periods prior to the Reorganization and Delaware Company for all periods after the Reorganization.

“ Company Benefit Plans ” has the meaning set forth in Section 3.16(a) .

“ Company Charter Documents ” has the meaning set forth in Section 3.01(b) .

“ Company Common Stock ” means Colorado Company Common Stock for all periods prior to the Reorganization and Delaware Company Common Stock for all periods after the Reorganization.

“ Company Disclosure Schedule ” has the meaning set forth in ARTICLE III .

“ Company Material Adverse Effect ” means any event, circumstance, condition, development or occurrence causing, resulting in or having (or with the passage of time likely to cause, result in or have) a material adverse effect on the business or financial condition of Company or any of the Subsidiaries, taken as a whole; provided, however, that in no event shall any of the following be deemed to constitute or be taken into account in determining a Company Material Adverse Effect: any event, circumstance, change or effect that results from (i) changes affecting the economy or industry generally, (ii) the public announcement or pending nature of this Agreement and the transactions contemplated hereunder, or (iii) Company’s compliance with the terms of this Agreement.

“ Company Stock Plan ” has the meaning set forth in Section 3.02(b) .

“ Confidential Information ” has the meaning set forth in Section 3.10(h) .

“ Confidentiality and Intellectual Property Assignment Agreement ” means the Confidentiality and Intellectual Property Assignment Agreement in the form attached as Exhibit G .

“ Consents ” means all consents and approvals of third parties or Governmental Entities, in each case that are necessary to consummate the transactions contemplated hereby.

“ Continuing Employees ” has the meaning set forth in Section 6.10.

“ Continuing Independent Contractors ” has the meaning set forth in Section 6.10 .

“ Contract ” means any written, oral or other agreement, contract, subcontract, settlement agreement, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment or undertaking of any nature to which Company or any of the Subsidiaries is a party or by which Company or any of the Subsidiaries, or any of their properties or assets, is bound.

“ Contractor Services Agreement ” has means the Contractor Services Agreement to be entered into by and between Parent and each of the Continuing Independent Contractors, in the form attached as Exhibit H .

“ Creditable Foreign Taxes ” has the meaning set forth in Section 6.08(g) .

“ Damages ” means any and all claims, demands, suits, proceedings, judgments, losses, charges, Taxes, penalties and fees, costs and expenses (including reasonable attorneys’ fees and expenses) sustained, suffered or incurred by an Indemnified Party in connection with, or related to, any matter which is the subject to the indemnification provisions hereof, subject to the limitations on indemnification set forth in Sections 9.02 and 9.03 ; provided that “ Damages ” shall not include (i) any incidental, consequential, indirect, special or punitive damages, (ii) any amount for which reimbursement is received by Parent, Merger Sub, the Ultimate Surviving Corporation, Colorado Company, Delaware Company or an Indemnifying Securityholder, as the case may be, pursuant to insurance policies or third-party payments by virtue of indemnification or subrogation received by such party which the Parent, Representative and the Principals shall use their Commercially Reasonable Efforts to pursue, and (iii) shall be determined net of any tax benefit actually realized by the Indemnified Party as a result of the claim.

“ Delaware Company ” shall have the meaning set forth in the Preamble.

“ Delaware Company Common Stock ” means, after the Reorganization, the common stock of Delaware Company, no par value.

“ Delaware Company Preferred Stock ” means, after the Reorganization, the preferred stock of Delaware Company, no par value.

“ DGCL ” means the General Corporation Law of the State of Delaware.

“ Dissenting Shares ” has the meaning set forth in Section 2.11(b) .

“ Effective Date ” has the meaning set forth in Section 2.03 .

“ Effective Time ” has the meaning set forth in Section 2.03 .

“ Employee Benefit Plan ” means (i) any nonqualified deferred compensation or retirement plan or arrangement that is an Employee Pension Benefit Plan, (ii) any qualified defined contribution retirement plan or arrangement that is an Employee Pension Benefit Plan, (iii) any qualified defined benefit retirement plan or arrangement that is an Employee Pension Benefit Plan (including any Multiemployer Plan), (iv) any Employee Welfare Benefit Plan or fringe benefit plan or program, (v) any profit sharing, bonus, stock option, stock purchase, consulting, employment, severance or incentive plan, agreement or arrangement or (vi) any plan, agreement or arrangement providing benefits related to clubs, vacation, childcare, parenting, sabbatical or sick leave that is sponsored, maintained or contributed to by Company or any ERISA Affiliate for the benefit of the employees, former employees, independent contractors or agents of Company or any ERISA Affiliate or has been so sponsored, maintained or contributed to at any time prior to the Closing Date.

“ Employee Pension Benefit Plan ” has the meaning set forth in Section 3(2) of ERISA.

“ Employee Welfare Benefit Plan ” has the meaning set forth in Section 3(1) of ERISA.

“ Environmental Law ” means any Applicable Law relating or pertaining to the public health and safety or the environment or otherwise governing the generation, use, handling,

collection, treatment, storage, transportation, recovery, recycling, removal, discharge or disposal of Hazardous Materials, including (i) the Solid Waste Disposal Act, 42 U.S.C. 6901 et seq., as amended, (ii) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., as amended, (iii) the Clean Water Act, 33 U.S.C. § 1251 et seq., as amended, (iv) the Clean Air Act, 42 U.S.C. § 7401 et seq., as amended, (v) the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., as amended, (vi) the Emergency Planning and Community Right To Know Act, 15 U.S.C. § 2601 et seq., as amended, and (vii) the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., as amended.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” means any subsidiary or other entity that would be considered a single employer with Company or a subsidiary within the meaning of Section 414 of the Code.

“ Escrow Account ” has the meaning set forth in the Escrow Agreement.

“ Escrow Agent ” means JPMorgan Chase Bank, N.A.

“ Escrow Agreement ” means the Escrow Agreement to be entered into among Parent, the Representative and the Escrow Agent, in the form attached hereto as Exhibit E , with such modifications as may be reasonably acceptable to Parent and the Representative, as requested by the Escrow Agent.

“ Escrow Distribution ” means the amount of any distribution out of the Escrow Account to the Indemnifying Securityholders.

“ Escrowed Cash ” means $1,873,800.

“ Escrowed Consideration ” means the Escrowed Cash and the Escrowed Stock.

“ Escrowed Consideration Value ” means the Escrowed Cash plus the product of (a) the Escrowed Stock multiplied by (b) the Parent Stock Per Share Price.

“ Escrowed Stock ” means that number of shares of Parent Common Stock equal to the quotient of $1,249,200 divided by the Parent Stock Per Share Price, rounded to the nearest whole share.

“ Estimated Closing Date Balance Sheet ” has the meaning set forth in Section 2.14(a) .

“ Estimated Net Working Capital ” has the meaning set forth in Section 2.14(a) .

“ Estimated Statement ” has the meaning set forth in Section 2.14(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934.

“ Fiduciary ” has the meaning set forth in Section 3(21) of ERISA.

“ Filing Date ” has the meaning set forth in Section 6.03(a) .

“ Financial Statements ” has the meaning set forth in Section 3.05(a) .

“ Five Year Non-Compete Agreement ” means the Non-Compete Agreement in the form attached as Exhibit I-1 .

“ GAAP ” means U.S. generally accepted accounting principles.

“ Governmental Entity ” means any 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.

“ Hazardous Material ” means any substance regulated or as to which liability might arise under any applicable Environmental Law and including, without limitation: (i) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar meaning or import found in any applicable Environmental Law; (ii) petroleum hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (iii) radioactive materials, asbestos containing materials, polychlorinated biphenyls or radon.

“ Holdback Amount ” has the meaning set forth in Section 2.14(a) .

“ Indebtedness ” without duplication, means (i) all indebtedness (including the principal amount thereof or, if applicable, the accreted amount thereof and the amount of accrued and unpaid interest thereon) of Company and the Subsidiaries, whether or not represented by bonds, debentures, notes or other securities, for the repayment of money borrowed, whether owing to banks, financial institutions, on equipment leases or otherwise, (ii) all deferred indebtedness of Company and the Subsidiaries for the payment of the purchase price of property or assets purchased, (iii) all obligations of Company and the Subsidiaries to pay rent or other payment amounts under a lease of real or Personal Property which is required to be classified as a capital lease or a liability on the face of a balance sheet prepared in accordance with GAAP, (iv) any outstanding reimbursement obligation of Company or a Subsidiary with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of Company or any of the Subsidiaries, (v) any payment obligation of Company or a Subsidiary under any interest rate swap agreement, forward rate agreement, interest rate cap or collar agreement or other financial agreement or arrangement entered into for the purpose of limiting or managing interest rate risks, (vi) all indebtedness for borrowed money secured by any Lien existing on property owned by Company or any Subsidiary, whether or not indebtedness secured thereby shall have been assumed, (vii) all guaranties, endorsements, assumptions and other contingent obligations of Company and the Subsidiaries in respect of, or to purchase or to otherwise acquire, indebtedness for borrowed money of others, and (viii) all premiums, penalties and change of control payments required to be paid or offered in respect of any of the foregoing as a result of the consummation of the transactions contemplated by this Agreement regardless if any of such are actually paid.

“ Indemnified Party ” means a Person who is entitled to indemnification pursuant to ARTICLE IX .

“ Indemnifying Party ” means a Person hereto who is required to provide indemnification under ARTICLE IX .

“ Indemnifying Securityholders ” means all Securityholders that receive consideration pursuant to Section 2.13(a)(iii) .

“ Injunction ” has the meaning set forth in Section 7.01(b) .

“ Intellectual Property ” means any or all of the following and all rights in, arising out of or associated therewith: (i) all United States, international and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof, (ii) all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists and all documentation relating to any of the foregoing, (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world, (iv) all Software, (v) all industrial designs and any registrations and applications therefor throughout the world, (vi) all maskworks and any registrations and applications therefor throughout the world, (vii) all trade names, logos, URLs, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world, (viii) all databases and data collections and all rights therein throughout the world, (ix) all moral and economic rights of authors and inventors, however denominated, throughout the world and (x) any similar or equivalent rights to any of the foregoing anywhere in the world.

“ Irrevocable Proxy and Voting Agreement ” means the Irrevocable Proxy and Voting Agreement in substantially the form attached as Exhibit K .

“ Lease Agreements ” has the meaning set forth in Section 3.09(b) .

“ Leased Real Property ” has the meaning set forth in Section 3.09(b) .

“ Letter of Transmittal ” means the Letter of Transmittal in the form attached as Exhibit C .

“ Licensed Software ” has the meaning set forth in Section 3.10(b) .

“ Lien ” or “ Liens ” means any pledges, claims, liens, charges, encumbrances, options and security interests of any kind or nature whatsoever.

“ Material Contract ” means any of the following:

(i) Any Contract that requires or may require future expenditures by Company or any of the Subsidiaries in excess of $100,000 or that might result in payments to Company or any of the Subsidiaries in excess of $100,000;

(ii) Any Contract to which Company or any of the Subsidiaries is a party that is not terminable without penalty on notice of 60 days or less;

(iii) Each Lease Agreement and each Contract or other right pursuant to which Company or any of the Subsidiaries uses or possesses any Personal Property (other than Personal Property owned by Company or a Subsidiary);

(iv) Any Contract with the Securityholders or any Principal, director or officer of Company or any of the Subsidiaries, or any Affiliate of any of such Persons, including any Contract providing for the furnishing of services by, rental of real or personal property from or otherwise requiring payments to any such Person;

(v) Any Contract relating to the Intellectual Property of Company or any of the Subsidiaries, any Third Party Intellectual Property Rights or any Confidential Information;

(vi) Any Contract containing any covenant (x) limiting the right of Company or any of the Subsidiaries to engage in any line of business, make use of any Intellectual Property, Third Party Intellectual Property Rights or any Confidential Information or compete with any Person in any line of business, (y) granting any exclusive distribution or supply rights or (z) otherwise having an adverse effect on the right of Company or any of the Subsidiaries to sell, distribute or manufacture any products or services or to purchase or otherwise obtain any software, components, parts or subassemblies;

(vii) Any Contract between Company or any of the Subsidiaries and any current or former employee, consultant or director of Company or any of the Subsidiaries pursuant to which benefits would vest or amounts would become payable or the terms of which would otherwise be altered by virtue of the consummation of the transactions contemplated by this Agreement or any other Transaction Document to which Company or any of the Subsidiaries is a party (whether alone or upon the occurrence of any additional or subsequent events);

(viii) Any Contract that requires a consent to a change of control, merger or an assignment by operation of law, either before or after the Closing Date; or

(ix) Any other Contract, or group of Contracts, the termination or breach of which would have, or would be reasonably expected to have, a Company Material Adverse Effect.

“ Merger ” has the meaning set forth in the Recitals.

“ Merger Consideration ” means the Closing Cash Consideration, the Closing Stock Consideration and the Escrowed Consideration.

“ Merger Consideration Value ” means the amount equal to the sum of the Closing Cash Consideration, the Closing Stock Consideration Value and the Escrowed Consideration Value.

“ Merger Shares ” means the Closing Stock Consideration and the Escrowed Stock Consideration.

“ Merger Sub ” has the meaning set forth in the Preamble.

“ Multiemployer Plan ” has the meaning set forth in Section 3(37) of ERISA.

“ Net Option Shares ” means, with respect to an Optionholder with an Outstanding In-the-Money Option, a number of shares of Company Common Stock as set forth opposite such Optionholder’s name in Schedule 1.01 , which is equal to (i) such Optionholder’s Outstanding Option Shares less (ii) the quotient of (A) the aggregate exercise price for all such Optionholder’s Outstanding In-the-Money Options divided by (B) Total Consideration Per Theoretical Fully Diluted Share.

“ Net Working Capital ” means the (i) the sum of (a) cash, (b) accounts receivable, including accounts receivable related to completed but unbilled projects (net of allowances for doubtful accounts) of Company and the Subsidiaries on a consolidated basis and (c) prepaid assets, less (ii) the liabilities of Company and the Subsidiaries on a consolidated basis, all as reflected on the Estimated Statement, as finally determined by the Closing Date Statement or pursuant to the procedures set forth in Section 2.14 .

“ Net Working Capital Threshold Amount ” means $2,921,700.

“ Non-Control Party ” has the meaning set forth in Section 9.04(b) .

“ Option ” has the meaning set forth in Section 3.02(b) .

“ Option Surrender Agreement ” means the Option Surrender Agreement in the form attached as Exhibit D .

“ Optionholder ” or “ Optionholders ” has the meaning set forth in Section 2.10.

“ Owned Software ” has the meaning set forth in Section 3.10(b) .

“ Outstanding Common Share ” or “ Outstanding Common Shares ” has the meaning set forth in Section 2.08 .

“ Outstanding In-the-Money Option ” means an Outstanding Option or portions thereof, with an exercise price per share of Delaware Company Common Stock that is less than the amount that would be paid on the Closing Date pursuant to Section 2.13(a)(iii) to a Common Securityholder holding one Outstanding Common Share.

“ Outstanding Option ” or “ Outstanding Options ” has the meaning set forth in Section 2.10 .

“ Outstanding Option Shares ” means the number of shares of Delaware Company Common Stock issuable immediately prior to the Effective Time if the Outstanding In-The-Money Options were exercised immediately prior to the Effective Time.

“ Outstanding Preferred Share ” or “ Outstanding Preferred Shares ” has the meaning set forth in Section 2.08 .

“ Outstanding Shares ” means Outstanding Common Shares and Outstanding Preferred Shares.

“ Parent ” has the meaning set forth in the Preamble.

“ Parent Common Stock ” means the Parent’s common stock, par value $0.001 per share.

“ Parent Disclosure Schedule ” has the meaning set forth in ARTICLE IV .

“ Parent Indemnification Basket ” has the meaning set forth in Section 9.01(a) .

“ Parent Indemnified Person ” has the meaning set forth in Section 9.01(a) .

“ Parent Indemnified Taxes ” means any and all Taxes without duplication, (1) imposed on Company or the Subsidiaries or for which Company or the Subsidiaries may be liable for any Pre-Closing Period and the portion of any Straddle Period ending on (and including) the Closing Date (determined in accordance with Section 6.08(c) , (2) resulting from the breach of the representations and warranties set forth in Section 3.08 (determined without regard to any materiality or knowledge qualifiers) or covenants set forth in Section 6.08 , (3) that are the employer’s portion of social security, medicare, unemployment or other employment Taxes due as a result of any payments made to the Securityholders pursuant to this Agreement, (4) that are Transfer Taxes for which the Securityholders are responsible pursuant to Section 6.08(g) , (5) of any member of an affiliated, consolidated, combined or unitary group of which Company or any Subsidiary (or any predecessor of Company or any Subsidiary) is or was a member on or prior to the Closing Date by reason of the liability of Company or any Subsidiary pursuant to Treasury Regulation § 1.1502-6(a) or any analogous or similar state, local or foreign law, or (6) for which Company or any Subsidiary may be liable as transferee or successor, by contract or otherwise. Notwithstanding the foregoing, “ Parent Indemnified Taxes ” shall not include any Tax that was included as a liability or otherwise taken into consideration in the computation of Net Working Capital as finally determined based upon the Closing Date Statement.

“ Parent Material Adverse Effect ” means any event, circumstance, condition, development or occurrence causing, resulting in or having (or with the passage of time likely to cause, result in or have) a material adverse effect on the business or financial condition of the Parent, taken as a whole; provided, however, that in no event shall any of the following be deemed to constitute or be taken into account in determining a Parent Material Adverse Effect: any event, circumstance, change or effect that results from (i) changes affecting the economy generally, (ii) the public announcement or pending nature of this Agreement and the transactions contemplated hereunder, or (iii) Parent’s compliance with the terms of this Agreement.

“ Parent SEC Filings ” has the meaning set forth in Section 4.07 .

“ Parent Stock Per Share Price ” means the average closing sale price of one share of Parent Common Stock as reported on the Nasdaq Global Select Market for the 30 consecutive trading days ending on the date that is one trading day immediately preceding the Closing Date

(as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ Permits ” means all licenses, permits, authorizations, certificates, franchises, variances, waivers, consents and other approvals from any Governmental Entity relating to the operation of Company and its Subsidiaries’ business, other than qualifications to do business as a foreign corporation.

“ Person ” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, or other entity.

“ Personal Property ” means all of the machinery, equipment, computer hardware, tools, motor vehicles, furniture, furnishings, leasehold improvements, office equipment, inventories, supplies, plant, spare parts, and other tangible personal property that is owned or leased by Company or any Subsidiary and which are used or held for use in its business or operations as of the Closing Date.

“ Pre-Closing Period ” means any Taxable period that ends on or before the Closing Date.

“ Pre-Closing Tax Returns ” has the meaning set forth in Section 6.08(a) .

“ Preferred Stockholders ” has the meaning set forth in Section 3.02(a)(iii) .

“ Principals ” means Don Kasica and Kent Kasica.

“ Prohibited Transaction ” has the meaning set forth in Section 406 of ERISA and Section 4975 of the Code.

“ R&D Tax Returns ” has the meaning set forth in Section 6.08(a) .

“ Real Property ” means all land, buildings, structures, improvements, and fixtures thereon, together with all rights of way, easements, privileges, and appurtenances pertaining or belonging thereto, that are owned or leased by Company or any Subsidiary and which are used or held for use in its business or operations as of the Closing Date.

“ Registration Period ” has the meaning set forth in Section 6.03(a)(ii) .

“ Registration Statement ” has the meaning set forth in Section 6.03(a) .

“ Representative ” has the meaning set forth in the Preamble.

“ Requisite Regulatory Approvals ” has the meaning set forth in Section 7.01(a) .

“ Related Party Transactions ” has the meaning set forth in Section 3.20 .

“ Recapitalization ” has the meaning set forth in the Recitals.

“ Reorganization ” has the meaning set forth in the Recitals.

“ SEC ” has the meaning set forth in Section 4.07 .

“ Second Amended and Restated Certificate of Incorporation ” has the meaning set forth in the Recitals.

“ Secondary Merger ” has the meaning set forth in the Recitals.

“ Secondary Merger Agreement ” has the meaning set forth in Section 2.16 .

“ Securities Act ” means the Securities Act of 1933.

“ Securityholders ” means, collectively, the Preferred Stockholders, the Common Stockholders and the Optionholders.

“ Securityholder Indemnitees ” has the meaning set forth in Section 9.01(b) .

“ Series A Preferred Stock ” means, after the Reorganization, the Series A Convertible Preferred Stock of Delaware Company, no par value.

“ Software ” has the meaning set forth in Section 3.10(b) .

“ Stockholders ” has the meaning set forth in Section 3.02(a)(iii) .

“ Stock Restriction Agreement ” means the Stock Restriction Agreement in the form attached as Exhibit J .

“ Straddle Period ” means any Taxable period that begins on or before the Closing Date and ends after the Closing Date.

“ Subsidiary ” or “ Subsidiaries ” has the meaning set forth in Section 3.01(c) .

“ Subsidiary Charter Documents ” has the meaning set forth in Section 3.01(c) .

“ Surviving Corporation ” has the meaning set forth in Section 2.01 .

“ Tax ” and “ Taxes ” means (i) any and all taxes, charges, fees, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, premium, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, estimated, severance, stamp, occupation, property or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties (including penalties for failure to file in accordance with applicable information reporting requirements), and additions to tax by any authority, whether federal, state, local, domestic or foreign and whether disputed or not and, (ii) any liability of Company or any of the Subsidiaries for the payment of any amounts of the type described in clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, as a result of any tax sharing, tax indemnity or tax allocation agreement, arrangement or understanding, or as a result of being liable for another Person’s taxes as a transferee or successor, by contract or otherwise.

“ Tax Authority ” means any entity, body, instrumentality, division, bureau or department of any federal, state or local or any foreign Governmental Authority, or any agent thereof (third party or otherwise), legally authorized to assess, lien, levy or otherwise collect, litigate or administer Taxes.

“ Tax Items ” has the meaning set forth in Section 3.08(a) .

“ Tax Proceeding ” has the meaning set forth in Section 6.08(d) .

“ Tax Reporting Documentation ” has the meaning set forth in Section 6.09 .

“ Tax Return ” means any report, return, form, declaration or other document or information required to be supplied to any Tax Authority or any person in connection with Taxes including any schedules or attachments thereto or any amendment thereof.

“ Theoretical Fully Diluted Shares ” means Outstanding Shares plus Outstanding Option Shares less Theoretical Repurchased Shares.

“ Theoretical Repurchased Shares ” means the aggregate exercise price for all Outstanding In-the-Money Options divided by the Total Consideration Per Theoretical Fully Diluted Share.

“ Third Party Claim ” means any claim, action, suit, proceeding, investigation or like matter which is asserted or threatened by a party other than the parties to this Agreement, their successors and permitted assigns, against any Indemnified Party or to which any Indemnified Party is subject.

“ Third Party Intellectual Property Rights ” has the meaning set forth in Section 3.10(c) .

“ Three Year Non-Compete Agreement ” means the Non-Compete Agreement in the form attached as Exhibit I-2 .

“ to the knowledge of Company ” has the meaning set forth in ARTICLE III .

“ to the knowledge of the Parent ” has the meaning set forth in ARTICLE IV .

“ Total Cash Consideration ” means $10,410,000, subject to adjustment pursuant to Section 2.14 .

“ Total Cash Consideration Per Share ” means an amount equal to (a) the Total Cash Consideration divided by (b) the sum of (i) the number of Outstanding Shares plus (ii) the aggregate number of Net Option Shares.

“ Total Consideration ” means Total Cash Consideration plus $10,410,000.

“ Total Consideration Per Share ” means an amount equal to (a) the Total Consideration divided by (b) the sum of (i) the number of Outstanding Shares plus (ii) the aggregate number of Net Option Shares.

“ Total Consideration Per Theoretical Fully Diluted Share ” means an amount equal to Total Consideration divided by Theoretical Fully Diluted Shares.

“ Total Stock Consideration ” means that number of shares of Parent Common Stock equal to the quotient of $10,410,000 divided by the Parent Stock Per Share Price, rounded to the nearest whole share.

“ Total Stock Consideration Per Share ” means (a) the Total Stock Consideration divided by (b) the sum of (i) the number of Outstanding Shares plus (ii) the aggregate number of Net Option Shares

“ Total Stock Consideration Value ” means an amount equal to the Total Stock Consideration multiplied by the Parent Common Stock Per Share Price.

“ Transaction Documents ” means this Agreement and all other documents to be executed by any of the parties to this Agreement in connection with the consummation of the transactions contemplated in this Agreement.

“ Transfer Taxes ” has the meaning set forth in Section 6.08(h) .

“ Two Year Non-Compete Agreement ” means the Non-Compete Agreement in the form attached as Exhibit I-3 .

“ Ultimate Surviving Corporation ” has the meaning set forth in the Recitals.

“ Whole Shares ” means, with respect to a Securityholder, the aggregate number of such Securityholder’s whole shares of Delaware Company Common Stock and whole shares of Delaware Company Preferred Stock.

ARTICLE II

THE MERGER

2.01. The Merger . Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into Delaware Company in accordance with the DGCL. Following the Merger, Delaware Company shall continue as the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”) and the separate corporate existence of Merger Sub shall cease. The corporate existence of Delaware Company, with all its purposes, rights, privileges, franchise powers and objects shall continue unaffected and unimpaired by the Merger and, as the Surviving Corporation, it shall be governed by the laws of the State of Delaware.

2.02. Plan of Merger . This Agreement shall constitute an agreement and plan of merger for purposes of the DGCL.

2.03. Effective Time . As promptly as practicable, but in no event later than the third business day after all of the conditions set forth in ARTICLE VII shall have been satisfied or waived by the party or parties entitled to the benefit of the same, Delaware Company and Merger Sub shall duly execute and file a certificate of merger (the “ Certificate of Merger ”) with the

Secretary of State of the State of Delaware in accordance with Applicable Laws. The Merger shall become effective on the date (the “ Effective Date ” or the “ Closing Date ”) and at the later of such time (the “ Effective Time ”) as the Certificate of Merger is filed with the Secretary of State of the State of Delaware or at such later date and time as is specified in such Statement of Merger. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “ Closing ”) shall be held at the offices of Vinson & Elkins L.L.P., Terrace 7, 2801 Via Fortuna, Suite 100, Austin, Texas 78746 or such other location as the parties may mutually agree upon.

2.04. Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided herein and as set forth in Section 259 of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, (a) all the property, rights, privileges, powers and franchises of Merger Sub and Delaware Company shall vest in the Surviving Corporation, (b) all debts, liabilities, obligations, restrictions, disabilities and duties of Merger Sub and Delaware Company shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation and (c) the Surviving Corporation shall become a wholly-owned subsidiary of Parent.

2.05. Certificate of Incorporation . Unless otherwise agreed to by the parties prior to the Effective Time, at and after the Effective Time, the Certificate of Incorporation of Delaware Company, in the form attached hereto as Exhibit A , shall be the Certificate of Incorporation of the Surviving Corporation, until thereafter amended as provided by law and such Certificate of Incorporation.

2.06. Bylaws . Unless otherwise agreed to by the parties prior to the Effective Time, at and after the Effective Time, the Bylaws of Delaware Company, in the form attached hereto as Exhibit B , shall be the Bylaws of the Surviving Corporation, until thereafter amended as provided by law, the Articles of Incorporation of the Surviving Corporation and such Bylaws.

2.07. Officers and Directors . Unless otherwise agreed to by the parties prior to the Effective Time, the officers and directors of Merger Sub immediately prior to the Effective Time shall be the officers and directors of the Surviving Corporation immediately after the Effective Time, until thereafter elected as provided by law and the Certificate of Incorporation and Bylaws of the Surviving Corporation.

2.08. Conversion of Company Stock . At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, Delaware Company or the Stockholders, each issued and outstanding share of Delaware Company Common Stock (each an “ Outstanding Common Share ” and collectively, the “ Outstanding Common Shares ”) and each issued and outstanding share of Delaware Company Preferred Stock (each an “ Outstanding Preferred Share ” and collectively, the “ Outstanding Preferred Shares ”) shall be canceled and extinguished and automatically convert into, subject to the terms and conditions set forth in this Agreement, (i) the right to receive the Total Cash Consideration Per Share as set forth in Section 2.13 and (ii) the Total Stock Consideration Per Share as set forth in Section 2.13 ; provided , however , that each Preferred Stockholder shall receive, on a per share basis, no more than $15,581.91 per share of the sum of (A) cash plus (B) shares of Parent Common Stock multiplied by the Parent Stock Per Share Price, as set forth in Section 2.13(b) . Each share of Delaware Company Common Stock held in the treasury of Delaware Company immediately

prior to the Effective Time shall be canceled and retired without any conversion thereof, and no payment or distribution shall be made with respect thereto.

2.09. Conversion of Merger Sub Stock . At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub or Delaware Company, each share of common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted and exchanged for one validly issued, fully paid and nonassessable share of common stock, no par value, of the Surviving Corporation. The stock certificate evidencing shares of common stock of Merger Sub shall then evidence ownership of the outstanding shares of common stock of the Surviving Corporation, and after the Effective Time, Parent shall be the holder of all the issued and outstanding shares of common stock of the Surviving Corporation.

2.10. Treatment of Options . Prior to the Closing, Colorado Company and Delaware Company shall give notice in writing to each holder of an Option (each an “ Optionholder ” and collectively, the “ Optionholders ”) outstanding immediately prior to the Effective Time (each an “ Outstanding Option ” and collectively, the “ Outstanding Options ”) that (a) notwithstanding anything to the contrary in the Company Stock Plan or in any stock option agreement, each Outstanding In-The-Money Option shall be deemed to have been exercised to the extent vested immediately prior to the Effective Time and converted into the right to receive the amount(s) set forth in this Agreement and (b) all other Outstanding Options will be terminated as of the Effective Time. Company shall take such actions prior to the Effective Time, including amending the Company Stock Plan and stock option agreements, as may be required to facilitate the foregoing.

2.11. Dissenters’ Rights .

(a) Promptly following the later of the execution of this Agreement and the Reorganization, Delaware Company shall provide each record holder of Delaware Company Common Shares and Delaware Company Preferred Shares, who shall not have voted in favor of the Merger or consented thereto in writing, with notice of such holder’s appraisal rights pursuant to Section 262 of the DGCL. Delaware Company shall give Parent prompt notice of any demands for appraisal pursuant to Section 262 of the DGCL received by Delaware Company from any Stockholders, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by Delaware Company in connection therewith. No later than 10 days following the date on which the Effective Time occurs, Parent and the Surviving Entity shall provide notice of the Effective Time to each Stockholder who has neither voted in favor of the Merger nor consented thereto in writing and has not withdrawn or lost the right to the appraisal pursuant to Section 262 of the DGCL.

(b) Notwithstanding any provision of this Agreement to the contrary, no Outstanding Shares that are held immediately prior to the Effective Time by holders who have neither voted in favor of the Merger nor consented thereto in writing and who have demanded and perfected the right, if any, for appraisal of such Outstanding Common Shares in accordance with the provisions of Section 262 of the DGCL and have not withdrawn or lost such right to appraisal (collectively, the “ Dissenting Shares ”) shall be converted into or represent a right to receive the consideration for such shares set forth in this Agreement, but the holder of such

Dissenting Shares shall only be entitled to such appraisal rights as are granted by the DGCL. If a holder of Outstanding Shares who demands appraisal of such Outstanding Shares under the DGCL shall thereafter effectively withdraw or lose (through failure to perfect or otherwise) the right to appraisal with respect to such Outstanding Shares, then, as of the occurrence of such withdrawal or loss, each such Outstanding Share shall be deemed to have been converted into and represent only the right to receive, in accordance with Section 2.13 , the consideration for such shares set forth in this Agreement.

2.12. Closing of Transfer Books . From and after the Effective Time, the stock transfer books of Delaware Company shall be closed and no transfer of Delaware Company Common Stock or Delaware Company Preferred Stock shall thereafter be made. From and after the Effective Time, the holders of Certificates evidencing ownership of Outstanding Shares immediately prior to the Effective Time shall cease to have any rights with respect to such Outstanding Shares, except as otherwise provided for in this Agreement or by Applicable Law.

2.13. Merger Consideration .

(a) Closing Deliveries . At the Closing:

(i) Fractional Shares .

(B) Parent shall deliver or cause to be delivered to each Common Securityholder that delivers to Parent (1) with respect to the shares of Delaware Company Common Stock, if any, held by such Common Securityholder, a completed and duly executed Letter of Transmittal and a Certificate for cancellation (or an affidavit of lost Certificate as contemplated by the Letter of Transmittal), and (2) with respect to the Net Option Shares, if any, held by such Common Securityholder, a completed and duly executed Option Surrender Agreement, cash in an amount equal to the fractional share, if any, of the Aggregate Common Shares held by such Common Securityholder multiplied by the Total Consideration Per Share.

(ii) Escrowed Consideration . Parent shall deposit or cause to be deposited the Escrowed Consideration with the Escrow Agent;

(iii) Closing Consideration .

(A) Parent shall deliver or cause to be delivered to each Preferred Stockholder that delivers a completed and duly executed Letter of Transmittal and a Certificate for cancellation (or an affidavit of lost Certificate as contemplated by the Letter of Transmittal) with respect to the shares of Delaware Company Preferred Stock held by such Preferred Stockholder to Parent, (1) cash in an amount equal to the number of whole shares of Delaware Company Preferred Stock held by such Preferred Stockholder multiplied by the Closing Cash Consideration Per Share, and (2) certificates representing a number of shares of Parent Common Stock equal to the number of whole shares of Delaware Company Preferred Stock held by such Preferred Stockholder multiplied by the Closing Stock Consideration Per Share.

(B) Parent shall deliver or cause to be delivered to each Common Securityholder that delivers to Parent (1) with respect to the shares of Delaware Company Common Stock, if any, held by such Common Securityholder, a completed and duly executed Letter of Transmittal and a Certificate for cancellation (or an affidavit of lost Certificate as contemplated by the Letter of Transmittal), and (2) with respect to the Net Option Shares, a completed and duly executed Option Surrender Agreement, (x) cash in an amount equal to the number of whole Aggregate Common Shares held by such Common Security Holder multiplied by the Closing Cash Consideration Per Share, and (y) certificates representing a number of shares of Parent Common Stock equal to the number of whole Aggregate Common Shares held by such Common Securityholder multiplied by the Closing Stock Consideration Per Share.

(b) Maximum Consideration; Gross-up . Notwithstanding anything to the contrary contained herein, the maximum value of the aggregate of the consideration that each Preferred Stockholder shall receive pursuant to Sections 2.13(a)(i)(A) and 2.13(a)(iii)(A) , and such Preferred Stockholder’s Applicable Percentage of (i) any Net Working Capital adjustment pursuant to Section 2.13(c) and (ii) the Escrowed Consideration Value, on a per share basis, shall be $15,581.91 per share. To the extent that a Preferred Stockholder, if not for the operation of this Section 2.13(b) , would have received more than the maximum consideration amounts set forth in this Section 2.13(b) , Parent shall deliver or cause to be delivered to each Common Securityholder that receives payments pursuant to Section 2.13(a)(i)(B) , Section 2.13(a)(iii)(B) or Section 2.13(c) , as the case may be, such Common Securityholder’s pro rata share of the aggregate of the excess amounts that would otherwise have been payable to the Preferred Stockholders, if not for the operation of this Section 2.13(b) , based on the number of Aggregate Common Shares, including any fractional share, held by such Common Securityholder immediately prior to the Effective Time divided by the number of Aggregate Common Shares held by all Common Securityholders immediately prior to the Effective Time, such payments to be made in cash and shares of Parent Common Stock in the same ratio as the Total Cash Consideration to Total Stock Consideration Value.

(c) Post Closing Payments . From and after the Closing, Parent shall promptly (and in any event within five business days after receipt) deliver or cause to be delivered (i) to each Stockholder that delivers a completed and duly executed Letter of Transmittal and all applicable Certificates for cancellation (or an affidavit of lost Certificate as contemplated by the Letter of Transmittal) to Parent at any time after the Closing Date, the certificates and cash (without interest) that would have been deliverable to such Stockholder pursuant to

Section 2.13(a) if such Stockholder had delivered such documents on or prior to the Closing Date, and (ii) to each Optionholder that delivers a completed and duly executed Option Surrender Agreement at any time after the Closing Date, the certificates and cash (without interest) that would have been deliverable to such Optionholder pursuant to Section 2.13(a) if such Optionholder had delivered such Option Surrender Agreement on or prior to the Closing Date. Any other payments (including Escrow Distributions and Net Working Capital adjustments payable pursuant to Section 2.14 ) to be made to the Indemnifying Securityholders following the Closing shall be made to such Indemnifying Securityholders pro rata according to each Indemnifying Securityholder’s Applicable Percentages.

(d) Withholding . Each of Parent, Merger Sub, Colorado Company, Delaware Company, the Surviving Corporation and the Ultimate Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable to the Securityholders pursuant to this Agreement any amounts required to be deducted and withheld under any provision of federal, foreign, state or local Tax law. If any of Parent, Merger Sub, Colorado Company, Delaware Company, the Surviving Corporation and the Ultimate Surviving Corporation so withholds amounts, such amount will be paid to the applicable taxing authority on behalf of any such Securityholder, and such amounts shall be treated for all purposes of this Agreement as having been paid to the Securityholder from whom such deduction or withholding and payment to a taxing authority was made.

2.14. Working Capital Determination .

(a) No more than three business days prior to the Closing Date, Company will prepare and deliver to Parent (i) an estimated balance sheet of Company and its consolidated Subsidiaries as of the Closing Date, together with supporting or back-up schedules and documentation reasonably requested by Parent (the “ Estimated Closing Date Balance Sheet ”) and (ii) a calculation and statement of its estimated Net Working Capital as of the Closing Date calculated from the Estimated Closing Date Balance Sheet (the “ Estimated Statement ”). Company will prepare the Estimated Closing Date Balance Sheet and Estimated Statement in good faith and all assets, liabilities and other amounts included on the Estimated Statement shall be determined in accordance with GAAP, subject to Parent’s good faith review and reasonable satisfaction. If the Net Working Capital set forth on the Estimated Statement (the “ Estimated Net Working Capital ”) is less than the Net Working Capital Threshold Amount, then the Closing Cash Consideration will be reduced by the amount of such deficiency. If the Estimated Net Working Capital is more than the Net Working Capital Threshold Amount, then the Closing Cash Consideration will be increased by the amount of such excess, provided that such amount (the “ Holdback Amount ”) shall be held back by Parent until such time as the Net Working Capital is finally determined based on the Closing Date Statement pursuant to this Section 2.14 .

(b) As soon as practicable but in no event later than 60 days following the Closing Date, Parent will prepare and deliver to the Representative a calculation and statement of the Net Working Capital as of the Closing Date (the “ Closing Date Statement ”). Parent will prepare the Closing Date Statement in good faith and all assets, liabilities and other amounts included on the Closing Date Statement shall be determined in accordance with GAAP, subject to the Representative’s good faith review and reasonable satisfaction. The Principals agree to cooperate with Parent in the preparation of the Closing Date Statement, including providing

Parent with supporting or back-up schedules and documentation reasonably requested by Parent. The Representative may submit to Parent, not later than 15 days from the receipt of the Closing Date Statement from Parent, a list of any components of the Closing Date Statement with which the Representative disagrees, if any (a “ Closing Date Dispute Notice ”), in which case the disagreement shall be resolved pursuant to the procedures set forth in paragraph (e) below. If the Representative does not issue a Closing Date Dispute Notice prior to such date, the Closing Date Statement, as supplied to the Representative, shall be deemed to have been accepted and agreed to by the Representative, and shall be final and binding on the parties to this Agreement.

(c) If Net Working Capital, as finally determined based upon the Closing Date Statement or pursuant to the procedures set forth in Section 2.14(e) , is less than the Estimated Net Working Capital then the amount of such deficiency shall be released promptly from the Holdback Amount, if any, and paid to Parent. If the amount of such deficiency owed to Parent is less than the Holdback Amount, the remaining balance of the Holdback Amount shall be distributed by Parent to the Indemnifying Securityholders in accordance with their Applicable Percentages. In the event that the Holdback Amount is insufficient to satisfy the amount of such deficiency, such deficiency shall be distributed to Parent from the Escrow Account. The Representative and Parent covenant and agree to jointly instruct the Escrow Agent in writing as soon as reasonably practicable after the final determination of the Net Working Capital to make any disbursement required by this Section 2.14(c) .

(d) If the Net Working Capital, as finally determined based upon the Closing Date Statement or pursuant to the procedures set forth in Section 2.14(e) , is greater than the Estimated Net Working Capital, Parent shall release the Holdback Amount, if any, and the Closing Cash Consideration will be further increased by the amount of such additional excess and the Holdback Amount and such additional excess shall be distributed by Parent to the Indemnifying Securityholders in accordance with their Applicable Percentages.

(e) In the event a Closing Date Dispute Notice is timely delivered to Parent by the Representative, Parent and the Representative shall thereafter for a period of up to 30 days negotiate in good faith to resolve any items of dispute. Any items of dispute which are not so resolved shall be submitted to an accounting firm with whom the Parent and Company have no relationship, who shall serve as an arbitrator hereunder (the “ Arbitrating Accountant ”). In connection with the resolution of any dispute, the Arbitrating Accountant shall have access to all documents, records, work papers, facilities and personnel necessary to perform its function as arbitrator. The Arbitrating Accountant so selected shall render a written decision as promptly as practicable, but in no event later than 30 days after submission of the matter to the Arbitrating Accountant. The decision of the Arbitrating Accountant shall be final and binding upon the parties, and judgment may be entered on such decision in a court of competent jurisdiction. To the extent not otherwise provided herein, the commercial arbitration rules of the American Arbitration Association as in effect at the time of any arbitration shall govern such arbitration in all respects. Each party shall bear its fees and expenses with respect to any proceeding under this paragraph, and the fees and expenses of the Arbitrating Accountant in connection with the resolution of disputes pursuant to this paragraph shall be paid by the non-prevailing party, who shall be determined by the Arbitrating Accountant.

2.15. Escrowed Consideration . On or prior to the Closing, the Representative, Parent and the Escrow Agent shall enter into the Escrow Agreement. At Closing pursuant to Section 2.13(a)(i) , Parent shall deposit the Escrowed Consideration with the Escrow Agent to be held in escrow for a period of one year from the Closing Date, subject to the provisions of ARTICLE IX . The Escrowed Consideration shall be used solely to satisfy Damages, if any, for which the Parent Indemnified Persons are entitled to indemnification pursuant to ARTICLE IX , including any payment obligations set forth in Section 2.14(c) .

2.16. Secondary Merger . Immediately following the Effective Time, Parent shall cause the Surviving Corporation to merge with and into Parent, with Parent continuing as the surviving entity in such merger, substantially in accordance with the terms of the merger agreement (the “ Secondary Merger Agreement ”) attached hereto as Exhibit F . From and after such merger, Parent shall be the Ultimate Surviving Corporation for purposes of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF COLORADO COMPANY AND DELAWARE COMPANY

Colorado Company and Delaware Company hereby represent and warrant to Parent and Merger Sub that the statements contained below are true and correct, except as set forth in the disclosure schedule (the “ Company Disclosure Schedule ”) delivered by Company to Parent and Merger Sub, on the date hereof and as of the Effective Date. The disclosures in any section or subsection of the Company Disclosure Schedule shall qualify other sections and subsections in this ARTICLE III where it should be reasonably apparent that such disclosure relates to other such sections and subsections. When used herein, the term “ to the knowledge of Company ” shall mean the actual knowledge of one or more of the Principals after having conducted a commercially reasonable inquiry. For purposes of this ARTICLE III , unless the context dictates otherwise, all references to Company will also include and be references to each of the Subsidiaries, including Delaware Company.

3.01. Organizational Matters .

(a) Organization, Standing and Power to Conduct Business . Company is a corporation duly organized, validly existing and in good standing under the laws of the State of its incorporation; has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted; and is duly qualified and in good standing to do business in each jurisdiction in which the nature of Company’s business and operations or the character or location of the properties and assets owned by it and used in Company’s business and operations makes such qualification necessary, which jurisdictions are set forth in Schedule 3.01(a) and such jurisdictions are the only jurisdictions in which the nature of its business or operations or the ownership or leasing of its properties and assets makes such qualification necessary, except where failure to be so qualified could not reasonably be expected to result in a Company Material Adverse Effect.

(b) Charter Documents . Company has delivered to the Parent true and complete copies of the articles of incorporation and bylaws of Company, in each case as amended to date and currently in effect (such instruments and documents, the “ Company

Charter Documents ”). Company is not in violation of any of the provisions of its Company Charter Documents.

(c) Subsidiaries . Schedule 3.01(c) sets forth a complete list naming each Person (each a “ Subsidiary ” and together, the “ Subsidiaries ”) in which Company or any other Subsidiary owns, holds or has any interest in any capital stock or other equity interests, or rights or obligations to acquire capital stock or other equity interests, and the jurisdiction of organization of each such Subsidiary. Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Subsidiary has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each Subsidiary is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or operations or the character or location of the properties and assets owned by it and used in its business and operations makes such qualification necessary, which jurisdictions are set forth in Schedule 3.01(c) and such jurisdictions are the only jurisdictions in which the nature of its business or operations or the ownership or leasing of its properties and assets makes such qualification necessary, except where failure to be so qualified could not reasonably be expected to result in a Company Material Adverse Effect. Company has delivered to Parent true and complete copies of the certificate of incorporation and bylaws or other organizational documents of each Subsidiary, in each case as amended to date and currently in effect (such instruments and documents, the “ Subsidiary Charter Documents ” and, together with the Company Charter Documents, the “ Charter Documents ”). No Subsidiary is in violation of any of the provisions of its Subsidiary Charter Documents. Schedule 3.01(c) sets forth a true and complete list of each record and beneficial owner of the capital stock or other equity interest of each Subsidiary, and the amount and type of each class or series of such capital stock or other equity interest held by each such Person. Company or another Subsidiary directly owns 100% of the capital stock or other equity interests or ownership interests of each Subsidiary free and clear of all Liens. There are no outstanding securities convertible into or exchangeable or exercisable for capital stock or other equity interests or ownership interest any Subsidiary, or options, warrants or other rights to acquire capital stock or other equity interest or ownership interests in any Subsidiary. All outstanding capital stock or other equity interests or ownership interests of the Subsidiaries have been validly issued, are fully paid and non-assessable and have not been issued in violation of any preemptive rights or similar rights. The capital stock or other equity interests or ownership interests of the Subsidiaries are not subject to any voting trust agreement or any other Contract relating to the voting, dividend rights or disposition of the capital stock or other equity interests of the Subsidiaries.

(d) Powers of Attorney . There are no outstanding powers of attorney executed by or on behalf of Company.

3.02. Capital Structure .

(a) Capital Stock .

(i) As of the date hereof, the authorized capital stock of Colorado Company consists of 36,000,000 shares of Colorado Company Common Stock and

701,402 shares of Colorado Company Preferred Stock, all of which are designated as Series A Preferred Stock.

(ii) At the date hereof, (A) there are 7,937,139 shares of Colorado Company Common Stock issued and outstanding, all of which are owned by the holders and in the amounts as set forth in Schedule 3.02(a)(ii) , (B) there are 701,402 shares of Colorado Company’s Series A Preferred Stock issued and outstanding, all of which are owned by the holders and in the amounts as set forth in Schedule 3.02(a)(ii) and (C) there are no other issued or outstanding shares of capital stock of Colorado Company. All of the issued and outstanding shares of capital stock of Colorado Company are held beneficially and of record by the stockholders set forth in Schedule 3.02(a)(ii) free and clear of all Liens. All of the issued and outstanding shares of capital stock of Colorado Company have been duly authorized and validly issued and are fully paid, non assessable and not subject to any preemptive rights.

(iii) Following the Reorganization and immediately prior to the Effective Time, (A) there shall be 1,058.29 shares of Delaware Company Common Stock issued and outstanding, all of which are owned by the holders and in the amounts as set forth in Schedule 3.02(a)(iii) (the “ Common Stockholders ”), (B) there shall be 93.52 shares of Delaware Company’s Series A Preferred Stock issued and outstanding, all of which are owned by the holders and in the amounts as set forth in Schedule 3.02(a)(iii) (the “ Preferred Stockholders ” and together with the Common Stockholders, the “ Stockholders ”) and (C) there shall be no other issued or outstanding shares of capital stock of Delaware Company. All of the issued and outstanding shares of capital stock of Delaware Company shall be held beneficially and of record by the Stockholders free and clear of all Liens. All of the issued and outstanding shares of capital stock of Delaware Company shall have been duly authorized and validly issued and shall be fully paid, non assessable and not subject to any preemptive rights.

(iv) No shares of Colorado Company Common Stock, Colorado Company Preferred Stock or other capital stock of Company are held as treasury stock or are owned by Company. No Person will be entitled to receive a portion of the consideration hereunder, or any other payment or consideration as a result of the transactions contemplated by this Agreement or any other Transaction Document, other than the persons listed on Schedule 3.02(a)(iii) and Schedule 3.02(b)(ii) .

(b) Other Securities .

(i) Except for (A) the conversion privileges of the Colorado Company Preferred Stock, and (B) up to 1,737,172 shares of Colorado Company Common Stock issuable to employee, officers, directors and consultants of Company pursuant to options outstanding as of the date hereof (the “ Options ”) under Company’s Stock Incentive Plan (the “ Company Stock Plan ”), adopted by the Board of Directors of Company and approved by Company’s stockholders, there are no shares of capital stock or other securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Company is a party or by which it is bound obligating Company to (1) issue, deliver or sell, or cause to be issued, delivered or sold, shares of

capital stock or other voting securities of Company, (2) issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking or (3) issue or distribute to holders of any shares of capital stock of Company any evidences of indebtedness or assets of Company. Other than as contemplated by this Agreement and the Preferred Stock Agreement, Company is not under any obligation to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution with respect thereto. Company has furnished to Parent complete and accurate copies of the Company Stock Plan and forms of agreements used thereunder. As of the date hereof, Schedule 3.02(b)(i) sets forth a true, accurate and complete listing of each holder of an Option, the number of shares of Colorado Company Common Stock issuable pursuant to each Option and the exercise price for each share of Colorado Company Common Stock issuable pursuant to each Option.

(ii) Schedule 3.02(b)(ii) sets forth a true, accurate and complete listing of each Person that will hold an Option following the Reorganization and immediately prior to the Effective Time, the number of shares of Delaware Company Common Stock issuable pursuant to each such Option and the exercise price for each share of Delaware Company Common Stock issuable pursuant to each such Option.

(c) Agreements . Except as set forth on Schedule 3.02(c) , there are no agreements, written or oral, between Company and any Securityholder relating to the acquisition (including rights of first refusal or preemptive rights), disposition, registration under the Securities Act, or voting of the capital stock of Company.

(d) Compliance with Laws . All issued and outstanding shares of capital stock of Company have been issued in compliance with all applicable securities laws and all other Applicable Laws.

3.03. Authority and Due Execution .

(a) Authority . Each of Colorado Company and Delaware Company has all requisite corporate power and authority to enter into this Agreement and the other Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution, delivery and performance of this Agreement and the other Transaction Documents to which Colorado Company or Delaware Company, as applicable, is a party by each of Colorado Company and Delaware Company, and the consummation by each of Colorado Company and Delaware Company of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of each of Colorado Company and Delaware Company and no other corporate proceedings on the part of either Colorado Company or Delaware Company are necessary to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents by each of Colorado Company and Delaware Company or to consummate the transactions contemplated hereby or thereby.

(b) Due Execution . This Agreement and each other Transaction Document to which Colorado Company or Delaware Company, as applicable, is a party have been duly

executed and delivered by each of Colorado Company and Delaware Company and, assuming due execution and delivery by the Parent and other parties hereto and thereto, constitute the valid and binding obligation of Colorado Company and Delaware Company, as applicable, enforceable against Colorado Company or Delaware Company, as applicable, in accordance with their terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency (including, without limitation, all laws relating to fraudulent transfers), moratorium or similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.04. Non-Contravention and Consents .

(a) Non-Contravention . The execution and delivery of this Agreement and each other Transaction Document by Colorado Company and Delaware Company does not, and the performance of this Agreement and each other Transaction Document by Colorado Company and Delaware Company will not, (i) conflict with or violate the Charter Documents of either Colorado Company or Delaware Company, (ii) conflict with or violate any Applicable Laws or (iii) result in any breach or violation of or constitute a default (or any event that with notice or lapse of time or both would constitute a default) under, or impair the rights of Company 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 Company pursuant to, any Material Contract.

(b) Contractual Consents . Except as set forth in Schedule 3.04(b) , no Consent under any Material Contract is required to be obtained in connection with the execution, delivery or performance of this Agreement or any other Transaction Document by Company or the consummation of the transactions contemplated hereby or thereby.

(c) Governmental Consents . Other than the filing of the Certificate of Merger, no Consent of any Governmental Entity is required to be obtained or made by Company in connection with the execution, delivery and performance of this Agreement or any other Transaction Document by Company or the consummation of the transactions contemplated hereby or thereby.

3.05. Financial Statements; Chinese Company Practices .

(a) Company has delivered to the Parent (i) its unaudited financial statements (consisting of a balance sheet, statement of operations and statement of cash flows) for the year ended December 31, 2006, and (ii) its unaudited financial statements (consisting of a balance sheet, statement of operations and statement of cash flows) for the seven month period ended July 31, 2007 (collectively, the “ Financial Statements ”). The Financial Statements have been prepared in accordance with GAAP (except that the unaudited Financial Statements do not contain all notes required by GAAP and are subject to normal year end adjustments which are not material in amount or significance in the aggregate) consistently applied and in accordance with historic past practices throughout the periods involved and fairly present the financial position, results of operations and cash flows of Company as of the dates, and for the periods, indicated therein. Except as set forth in the Financial Statements, Company has no material

liabilities, contingent or otherwise, other than (a) liabilities incurred in the ordinary course of business subsequent to the date of the most recent Financial Statements and (b) obligations under contracts and commitments incurred in the ordinary course of business and not required under GAAP to be reflected in the Financial Statements, which, in both cases, are not material to the financial condition or operating results of Company. None of the assets of Company secure the guaranty or indemnification of any indebtedness of any other Person. For all periods covered by the Financial Statements, Company has maintained a standard system of accounting established and administered in accordance with GAAP.

(b) If reviewed or challenged by any Chinese Tax Authority or other Governmental Agency, Company’s practice as of the date hereof of recognizing revenue of the Chinese Company differently under GAAP and under Chinese generally accepted accounting principals would not result in any fines. Company’s method of transfer pricing as of the date hereof is reasonable and if reviewed or challenged by any Chinese Tax Authority or other Governmental Entity, would not result in any fines.

3.06. Indebtedness . Company does not have any Indebtedness of any type (whether accrued, absolute, contingent, matured, unmatured or other and whether or not required to be reflected in financial statements prepared in accordance with GAAP) that is not fully reflected in Schedule 3.06 . Schedule 3.06 lists each item of Indebtedness identifying the creditor including name and address, the type of instrument under which the Indebtedness is owed and the amount of the Indebtedness as of the business day immediately prior to the date hereof. With respect to each item of Indebtedness, Company is not in default, no payments are past due, and to the knowledge of Company, no circumstance exists that, with notice, the passage of time or both, could constitute a default by Company under any item of Indebtedness. Company has not received any notice of a default, alleged failure to perform or any offset or counterclaim with respect to any item of Indebtedness that has not been fully remedied and withdrawn. The consummation of the transactions contemplated by this Agreement or any other Transaction Document to which Company is a party will not cause a default, breach or an acceleration, automatic or otherwise, of any conditions, covenants or any other terms of any item of Indebtedness. Company is not a guarantor or otherwise liable for any liability or obligation (including indebtedness) of any other Person.

3.07. Litigation . There is no claim, action, suit or proceeding, or governmental inquiry or investigation, pending, or to the knowledge of Company, threatened against Company, nor to the knowledge of Company is there any basis for any such claim, action, suit, proceeding, inquiry or investigation. There is no judgment, decree or order against Company. Schedule 3.07 lists all litigation that Company has pending or threatened against other parties.

3.08. Taxes .

(a) (i) All Tax Returns which were required to be filed by or with respect to Company have been duly and timely filed, (ii) all items of income, gain, loss, deduction and credit or other items (“ Tax Items ”) required to be included in each such Tax Return have been so included and all such Tax Items and any other information provided in each such Tax Return is true, correct and complete, (iii) all Taxes owed by Company which are or have become due have been timely paid in full, (iv) no penalty, interest or other charge is or will become due with

respect to the late filing of any such Tax Return or late payment of any such Tax, (v) all Tax withholding and deposit requirements imposed on or with respect to Company have been satisfied in full in all respects, (vi) there are no Liens on any of the assets of Company that arose in connection with any failure (or alleged failure) to pay any Tax, and (vii) Company is not liable for any Tax as a transferee or successor.

(b) Schedule 3.08(b) lists all federal, state, local and foreign income Tax Returns filed with respect to Company for the five taxable years ending prior to the Closing Date, indicates those Tax Returns that have been audited, indicates those Tax Returns that are currently the subject of audit, indicates those Tax Returns whose audits have been closed and indicates those for which amendments were filed.

(c) There is no claim against Company for any Taxes, and no assessment, deficiency or adjustment has been asserted, proposed, or threatened with respect to any Tax Return of or with respect to Company.

(d) Intentionally omitted.

(e) Except as set forth in Schedule 3.08(e) , there is not in force any extension of time with respect to the due date for the filing of any Tax Return of or with respect to Company or any waiver or agreement for any extension of time for the assessment or payment of any Tax of or with respect to Company.

(f) There are no Tax allocation, sharing or indemnity agreements or arrangements affecting Company. No payments are due or will become due by Company pursuant to any such agreement or arrangement.

(g) The aggregate amount of the unpaid Tax liabilities of the Company for all Tax periods ending on or before the date of the most recent Financial Statements are reflected on the such Financial Statements as of the dates thereof (excluding any reserves for deferred Taxes). The aggregate amount of the unpaid Tax liabilities of the Company for all Tax periods (or portions thereof) prior to and including the Closing Date will not exceed the aggregate amount of the unpaid Tax liabilities of the Company as reflected on such Financial Statements (excluding any reserves for deferred Taxes), as adjusted for the operations and transactions in the ordinary course of business of the Company for the period from the date of the most recent Financial Statements to and including the Closing Date consistent with the past custom and practice of the Company.

(h) Except as set forth in Schedule 3.08(h) , none of the property of Company is held in an arrangement that has been classified as a partnership for Tax purposes, and Company does not own any interest in any controlled foreign corporation (as defined in section 957 of the Code), passive foreign investment company (as defined in section 1297 of the Code) or other entity the income of which is or could be required to be included in the income of Company.

(i) None of the property of Company is subject to a safe-harbor lease (pursuant to section 168(f)(8) of the Internal Revenue Code of 1954 as in effect after the Economic Recovery Tax Act of 1981 and before the Tax Reform Act of 1986) or is “tax-exempt

use property” (within the meaning of section 168(h) of the Code) or “tax-exempt bond financed property” (within the meaning of section 168(g)(5) of the Code).

(j) Company (or the Surviving Corporation or the Ultimate Surviving Corporation, each as successor to Company by merger) will not be required to include any amount in income for any taxable period ending after the Closing Date as a result of a change in accounting method for any taxable period beginning on or before the Closing Date or pursuant to any agreement with any Tax authority with respect to any such taxable period. The Surviving Corporation and the Ultimate Surviving Corporation, each as successor to Company by merger, will not be required to include in any period ending after the Closing Date any income that accrued in a prior period but was not recognized in any prior period as a result of the installment method of accounting, the completed contract method of accounting, the long term contract method of accounting or the cash method of accounting.

(k) Company does not have any liability for the Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any corresponding provisions of state, local or foreign Tax law), or as a transferee or successor, or by contract or otherwise. Company is not and has never been a member of an affiliated, consolidated, combined or unitary group filing for federal or state income tax purposes.

(l) Company has not entered into any agreement or arrangement with any Taxing Authority that requires Company (or any successor by merger) to take any action or to refrain from taking any action. Company is not a party to any agreement with any Taxing Authority that would be terminated or adversely affected as a result of the transactions contemplated by this Agreement.

(m) To the extent applicable, Company has properly and in a timely manner documented its transfer pricing methodology in compliance with Section 6662(e) (and any related sections) of the Code, the Treasury regulations promulgated thereunder and any comparable provisions of state, local, domestic or foreign Tax law.

(n) Company has not (i) participated (

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